FOR HEALTH.

FOR LIFE.
Connecting science, technology and innovation

Good Health
Annual Report 2020-21 Can’t Wait.
CONTENTS

CORPORATE OVERVIEW
FOR HEALTH. FOR LIFE.
For Health. For Life.
Connecting science, technology and innovation
Our guiding philosophy 02
Letter from the Chairman and Co-Chairman 04 In the last year and a half, the focus of the world has been on our collective health.
Our global presence 06
The current pandemic has reminded us of the paramount importance of our physical and
mental well-being. At the same time, it has prompted us to reNect on how our actions as
Our businesses 08
individuals have a bearing on us as a community and the entire planet.
Key performance indicators 09
For Health. For Life - putting science, technology and innovation into practice 10 This year's annual report is a reNection of our effort to bring science, technology and
• Venturing into Amazon’s HealthCareAisle
®
12 innovation together to find solutions to challenges posed by the pandemic, and to do our
• Living our purpose 14 best for all our stakeholders as a responsible member of the pharmaceutical industry.
• Future-ready with virtual reality 16
‘For Health. For Life' - because Good Health Can't Wait.
• Lighthouse factories 18
• A comprehensive COVID-19 portfolio 20
• Connecting science, technology, innovation and people in the face of a pandemic 22
Board of directors 24
Management council 26

STATUTORY REPORTS

Business responsibility report 28

Management discussion and analysis 40
Five years at a glance and key financial ratios 52
Corporate governance 54
Additional shareholders' information 70
Board’s report 80

FINANCIAL STATEMENTS

Standalone financial statements �Ind AS� 95

Consolidated financial statements �Ind AS� 169
Extract of audited IFRS consolidated financial statements 267
Glossary 270
Notice of the 37th annual general meeting 271
 Dr. Reddy’s Laboratories Limited Annual Report 2020-21

OUR GUIDING PHILOSOPHY

OUR OUR OUR OUR

PURPOSE PROMISES PRINCIPLES LEADERSHIP BEHAVIOURS
We accelerate access to
affordable and innovative
medicines because Bringing Empathy We aspire because Good Health Can't Wait.
expensive medicines We understand the needs
Good Health within reach of our patients and
Can’t Wait. partners better than a s p
others.
Addressing
unmet patient needs
Dynamism
We solve challenges that
Helping only a few can, and do
patients manage this with agility.
disease better

Aspirational Speed & Rigour People

Working Growth Mindset In Execution Leadership
with partners to help We target industry-leading growth We act with
through agility; cost leadership
innovation, We and
inspire people
taking risksto reach
them succeed we are disciplined their full potential through
and rigorous in execution work and continuous learning

Enabling
and helping our
partners ensure that
our medicines are r e
available where
needed

Innovation Results Excellence

Driven
We drive patient and customer-focused innovation in all areas using cutting-edge science, technology & tools
Focus
We take responsibility
We excel by combining
for outcomes and own
deep professional expertise
end results for our patients
and disciplined execution
02

03
Dr. Reddy’s Laboratories Limited Annual Report 2020-21

LETTER FROM THE CHAIRMAN • Simultaneously, Sputnik V showed strong Phase III trials in North America for Many of us have lost loved ones during this

AND CO-CHAIRMAN efficacy, immunogenicity and safety

results in Phase III clinical trials
outpatient setting with mild to moderate
symptoms.
pandemic, especially in the second wave.
Our sincerest condolences to them and our
conducted on 19,866 people in Russia by prayers that the families have the spirit and
c) 2-deoxy-D-glucose (2DG™): The 2-DG
RDIF. The efficacy of Sputnik V against strength to overcome their tragedies.
has been developed by Defence
COVID-19 was reported at 91.6%.
Research and Development Organization Stay safe. Vaccinate as soon as you can.
• In February 2021, we initiated the (DRDO) laboratories, in collaboration Wear masks. Maintain social distancing.
process with DCGI for Emergency Use with Dr. Reddy’s. The drug received This, too, shall pass. But it needs our
Authorization of Sputnik V. This emergency use approval as adjunct combined efforts. And determination to
authorization was granted in April 2021. therapy for hospitalized moderate to succeed.
severe COVID-19 patients.
• On May 1, 2021, the first consignment With our best regards and prayers,
of imported doses of the Sputnik V We are also working on Molnupiravir,
vaccine landed in India. These received Baricitinib and other COVID-19 drugs for
regulatory clearance from the Central treatment ranging from mild to severe
Drugs Laboratory, Kasauli, on May 13, conditions.
2021. The soft launch of the vaccine
To retain basic continuity across our annual
K Satish Reddy
commenced and the first dose of the Chairman
letters, let us share the consolidated
vaccine was administered in Hyderabad
financial results of your company for
on May 14, 2021.
FY2021.
• Further consignments of imported doses
• Consolidated revenues were ` 189.7
are expected over the coming period.
billion, or a 9% growth over the
Subsequently, supply of the Sputnik V
previous year. G V Prasad
vaccine will commence from Indian
manufacturing partners. Your company is • Consolidated gross profit was ` 103.1 Co-Chairman and
working closely with six manufacturing billion, which was 10% greater vis-à- Managing Director
partners in India to fulfil regulatory vis FY2020.
requirements to ensure smooth and • Earnings before interest, taxes,

timely supply.
K SATISH REDDY G V PRASAD depreciation and amortization (EBITDA)
Chairman Co-Chairman and Managing Director
• Sputnik V makes Dr. Reddy’s, the third increased to ` 47.4 billion, or an increase
enterprise in India that has been of 2% versus the previous year.
authorized to supply COVID-19 vaccines.
• Operating profit increased by 52% to
• We will work closely with stakeholders ` 24.3 billion.
Dear Member, in the government and the private sector • Profit before taxes (PBT) was ` 26.4
in India to ensure the widest possible billion, which was 46% higher than `
reach 18
There has never been a year such as this. of the Sputnik V vaccine as part of the
through an online platform and a home Sputnik V vaccine billion earned in the previous year.
We pray that there never will be any more national inoculation effort. This is a
isolation program.
in our lifetime as well as of our children and • In September 2020, when the first phase reaffirmation of our determination to • Profit after taxes (PAT) was ` 17.2
grandchildren. • Dedicated separate COVID-19 care of the pandemic was still raging in India, fight against the COVID-19 pandemic in billion, or 12% less than in FY2020.
facilities were launched for Dr. Reddy’s signed up with the Russian India.
As on May 14, 2021, the virus has infected • Diluted earnings per share (EPS) was
employees and dependents in three Direct Investment Fund (RDIF) —
over 160 million and has claimed the lives of Sputnik V is not the only commitment of ` 103.65 in FY2021, versus ` 117.40 in
locations to provide pre-hospitalization Russia’s sovereign wealth fund — to
3.4 million people worldwide. India, the your company regarding COVID-19 FY2020.
care. cooperate on clinical trials and
second worst infected country in the treatments. In addition, we have been
distribution of Sputnik V vaccine in We wish to take this opportunity of
world, has witnessed over 25 million cases • For employees working on-site, stringent involved in three other medicines.
India. Upon regulatory approval in India, thanking every employee of your company
and more than 270,000 deaths. social distancing and safety measures
RDIF committed to supply 100 million a) Remdesivir: We signed a licensing for putting in all the extra efforts in these
were deployed in work locations,
Your company’s core dictum is ‘Good doses of the vaccine to Dr. Reddy’s. agreement with Gilead Sciences, Inc. trying times to make these results happen.
transport facilities and cafeterias. Other
Health Can’t Wait’. that grants us the right to register, They have done spectacular work.
measures included multiple stages of • Thereafter, we created a partnership with
manufacture and sell Remdesivir, a
Never before in the history of Dr. Reddy’s disinfection, provision of personal the Biotechnology Industry Research Two of our key promises have been
potential treatment for COVID-19, in
has this maxim been more important than protective equipment, automating Assistance Council (BIRAC) of the addressing unmet patient needs, and
127 countries including India. We
now. In the context of this horrific actions that require manual contact. Department of Biotechnology, helping patients to manage disease better.
launched Remdesivir under the brand
pandemic, let us brieNy share with you what Moreover, we provided a daily hardship Government of India, for advisory Nothing has underscored the importance of
name “Redyx™” in India in September
your company has done to address the allowance. support and to use some of BIRAC’s these promises as the COVID-19 pandemic.
2020. With the surge of COVID-19 cases
situation. clinical trial centers for clinical trials of
• We contracted for additional insurance in the second wave, we ramped-up our We do not know when the second wave
Sputnik V vaccine.
With the pandemic Naring for the first time coverage for COVID-19 which covered capacities to increase availability of the will subside. Neither do we know whether
in April 2020, the primary objective was to hospitalization and home quarantine • From December 2020, we commenced medicine. there will be a third wave and of what
ensure health and safety of our employees expenses. This was extended to our clinical trials of Sputnik V. Based on ® intensity. But we do know that the only
b) Avigan (Favipiravir): We entered into a
and their families while continuing to supply employees and their dependents in India. satisfactory data from Phase II trials, we preventive worth the name is vaccination.
licensing agreement with Fujifilm Toyama
medicines across the world. Some of the Employees were also provided additional received approval from the Drugs And we are committed to seeing that your
Chemical Co. Ltd. to develop, sell and
interventions that we quickly put in place COVID-19 leave. Controller General of India (DCGI) to ® company plays a key role in the vaccinating
conduct Phase III clinical trial on 1,500 distribute Avigan (Favipiravir) in all program for our citizens.
were: At the same time, Dr. Reddy’s acted quickly countries other than Japan, China and
subjects as part of a randomized, double-
• A well-being and support plan that to bring various preventive and curative Russia. This has enabled us to launch Because Good Health Can’t Wait.
blind, parallel-group, placebo-controlled
comprised tele-consulting, helplines, medicines to deal with COVID-19, including ®
Avigan 200 mg tablets in India and few
study in India.
24x7 access to clinical psychologists a vaccine. Let us start with our vaccine other markets. We are also conducting
journey.
04

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 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

GLOBAL PRESENCE

48
Nationalities

56
Countries HIGHLIGHTS FILINGS LAUNCHES

REVENUES GENERIC FILINGS NEW PRODUCTS

₹ 189.7 billion 20 ANDA filings 273
& one NDA filing NAG
EBITDA 27
Sales & Marketing As on March 31, 2021, 95
₹ 47.4 billion generic filings are pending for
Europe
approval (92 ANDAs and three
Research & Development Centres PROFIT AFTER TAX NDAs). Of these, 47 are Para 40
IV filings and we believe 23 of
₹ 17.2 billion these have ‘First-to-File’
Emerging Markets
Manufacturing Facilities status. 116
DILUTED EPS
India
₹ 103.65 DMF FILINGS
Headquarters 90
14 DMFs filed in (Including Wockhardt acquired
portfolio of 70 products)
the US.

06 07
Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

OUR KEY PERFORMANCE

BUSINESSES INDICATORS
` MILLION
REVENUE ` MILLION GROSS PROFIT ` EBITDA
MILLION
FY2021 1,89,722 FY2021 1,03,077 FY2021 47,386

FY2020 1,74,600 FY2020 94,009 FY2020 46,432

FY2019 1,53,851 FY2019 83,430 FY2019 34,189

PHARMACEUTICAL FY2018 1,42,028 FY2018 76,304 FY2018 24,081

SERVICES AND
1,40,809 78,691 FY2017 25,495
ACTIVE PROPRIETARY FY2017 FY2017

GLOBAL INGREDIENTS PRODUCTS &

GENERICS (PSAI) OTHERS
(GG)
REVENUE REVENUE

REVENUE ` 32 billion 24% ` 3.3 billion 69%

` 154.4 billion 12% 16.8% of net revenues 1.8% of net revenues PBT ` MILLION PAT ` NET WORTH ` MILLION
MILLION
81.4% of net revenues FY2021 26,413 FY2021 17,238 FY2021 1,73,062

ACTIVE PHARMACEUTICALS PROPRIETARY PRODUCTS

FY202018,032 FY2020 19,498 FY2020 1,54,988
INGREDIENTS In our Proprietary Products business, we
sold our U.S. and select territory rights for
REVENUE BY GEOGRAPHY Active Pharmaceuticals Ingredients (API)
the commercialized portfolio of Derma and FY2019 22,443 FY2019 18,795 FY2019 1,40,197
is one of our core businesses. We partner
9% North America ₹ 70.5 billion with several leading generic formulation Neurology therapies that were being
15% India ₹ 33.4 billion companies in bringing their molecules first marketed in U.S. Our focus is now on FY2018 14,341 FY2018 9,806 FY20181,26,460
to the market. Our focus on innovation-led development of differentiated formulations
7% Emerging Markets ₹ 35.1 billion
affordability gives our customers access to for global markets. The aim is to improve the
32% Europe ₹ 15.4 billion patient’s holistic experience with our FY2017 14,653 FY2017 12,039 FY20171,24,044
the most complex active ingredients, while
maintaining a consistent global quality medicines, so as to improve efficacy, ease of
standard. Our API development efforts use and the resolution of unmet patient

GLOBAL GENERICS enable our own generics business to be needs.

Global generics is our biggest business cost competitive and get to market faster.
driver. We offer more than 550 high-quality AURIGENE DISCOVERY
generic drugs, keeping costs reasonable by AURIGENE PHARMACEUTICAL Aurigene Discovery, a wholly-owned
leveraging our integrated operations. SERVICES subsidiary, is a clinical stage biotech NET DEBT TO
Our expertise in active ingredients, product Our custom pharmaceutical business is a
company committed to bringing novel ROCE % EPS (DILUTED) ` EQUITY RATIO*
therapeutics for the treatment of cancer and
development skills, a keen understanding of promising future growth driver. We offer
inNammation. We have fully integrated drug FY2021 17.8 FY2021 103.6
regulations and intellectual property rights, end-to-end product development and (0.04 FY2021
discovery and development infrastructure
as well as our streamlined supply chain, manufacturing services and solutions to
from hit generation to clinical development. )
innovator companies. Our rich and FY2020 12.2 FY2020 117.4
makes us leaders in this segment. We have pioneered customized models of FY2020
extensive knowledge repository of various
drug discovery and development (0.03)
types of formulations helps shorten time
BIOLOGICS to market and support lifecycle
collaborations with large-pharmaceutical,
FY2019 14.7 FY2019 113.1 FY2019 0.09
Our biosimilars, generic equivalents of the mid-pharmaceutical companies and
management.
innovator’s biologics, offer affordable yet biotechnology companies.
equally effective alternatives. Our product FY2018 8.2 FY2018 59.0 FY2018 0.24
development capabilities and commercial Over 550 FY201710.3 FY201772.1
reach have given us an established presence high-quality API is a
in this segment. We have six products in the
FY2017 0.25
generic medicines foundational
market and an industry leading pipeline marketed Differen that present enhanced benefits business for us
spanning oncology and autoimmune worldwide
08 tiated
diseases.
formula
tions
Note: The numbers are as per IFRS reported financials
Note: The numbers are as per IFRS reported financials * FY2021 Net
debt to equity
ratio
computation
excludes
current
borrowings &
current
investments

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Dr. Reddy’s Laboratories Limited Company OverviewStatutory ReportsFinancial Statements Annual Report 2020-21

FOR HEALTH. FOR LIFE.

Putting
science,
technology and
innovation
into practice Leadership in
chosen spaces
We continue to strengthen our market
presence and build leadership positions
in each of the segments we operate in,
with a well-crafted strategy. We are
also exploring inorganic growth
opportunities to accelerate access to
high-quality and affordable medicines to
patients globally, and, in the process,
create value for all our stakeholders.

Operational
excellence
and Patient-centric
continuous improvement product innovation
To achieve industry-leading growth in our chosen
We have put in place an enhanced
spaces, we are augmenting our capabilities in
R&D and technology-driven platform
manufacturing, supply chain and quality by
to address the evolving needs of
deploying tools and systems, digital
patients, physicians and caregivers,
technologies and data analytics. These initiatives
through the development of
are improving productivity and building better
innovative products, services and
customer connect, while permeating our culture
digital business models.
of quality, compliance, safety, and execution
excellence in every function, unit and
location of the company.

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Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

VENTURING INTO AMAZON’S

®
HEALTHCAREAISLE
An important milestone for the OTC team in the U.S.
Dr. Reddy's first began selling its over-the- After landing on the name, the team hired another
®
counter Habitrol brand nicotine patches on company to design the logo. With the brand and
Amazon in 2016, as an experiment. Shortly after logo in hand, the team went about the business of
® ®
launching Habitrol , Doan's was added to the designing the packaging in-house. Initially, the
portfolio. team thought they were simply going to develop
and sell store-brand OTC products to Amazon,
The big change came two years later in 2018
not unlike the way they sell to other big-box
when Amazon reached out to us looking for
retailers and drug store chains. However, they
companies that could launch Amazon-exclusive
quickly learned that, in order to be successful, you
brands in the OTC space. A veteran of the
need to sell through Amazon, not to Amazon.
OTC team, Lindsay Proffitt, was put in charge of
an exhaustive branding development program The team hired another experienced agency to
working with one of the best pharma-branding help them navigate the Amazon business
agencies in the business, Brand Institute. Under framework and also develop a marketing and
Proffitt's leadership, the team worked through merchandising plan specifically for Amazon.
hundreds of names and naming conventions and The key learnings, as well as strategy and brand
conducted multiple brand research efforts. development, took most of 2019, and by 2020,
Dr. Reddy's direct-to-consumer strategic priority
Interestingly, the name 'HealthCareAisle' came
gained the necessary traction and proved its
up in a casual discussion among the team
viability. In January this year, the
members. Consumer research seemed to point ®
HealthCareAisle store brand hit a key milestone,
to the name as innovative and likeable.
achieving
US$ 100,000 of sales in a week.

At the current growth rate, the Amazon direct-to-

consumer channel is now a key growth driver for
the OTC business, and the team plans to launch
products on Amazon first and then to other
channels. Additionally, they anticipate ramping up
to double their online portfolio to 50+ products in
the foreseeable future.

In January this year,

®
the HealthCareAisle
store brand hit a
key milestone,
achieving US$
100,000 of sales in a
week.
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 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

LIVING OUR PURPOSE

How our teams kept medicine supplies to Europe
moving during the pandemic
When Nights began to be grounded at the
beginning of the pandemic, our global supply STRONGER TOGETHER
chain acted quickly and with persistence to find To us, this story is an example of how our
new solutions. One example is the launch of a colleagues around the world have truly lived our
crucial generic medicine (Cinacalcet) in Europe. brand principles of empathy and dynamism during
the pandemic. It is as much a tribute to the sense
In April 2020, with five days to go for the launch of ownership and steadfastness shown by our
of the product, lockdowns and work-from-home colleagues in quickly adapting to new and
policies began to be enforced in Europe. We unforeseen challenges posed by the pandemic, as
found ourselves suddenly needing to find various it is to the personal and professional adjustments
alternatives on extremely short notice. Working made by them to enable the same. The joy
remotely in many cases, colleagues began to derived from recognizing the impact of one's work
hunt for the same. A major hurdle was the in meeting the unmet needs of patients and
closing of airports in some countries – contributing to society is unmatched and has
including at our import location in the European renewed our commitment to deliver on our
Union (EU), which was critical for this launch as purpose and responsibility towards patients and
the product was being Nown in from India. To society.
find alternatives, the Supply Chain team worked
closely together with the Quality and Logistics
teams to find ways to address the situation
working late nights and through the weekend in
an attempt to approve a new import location. In
parallel, the manufacturing site in India
implemented safety and hygiene measures in
record time to ensure that manufacturing
continued without delay.

AIR, ROAD, SEA

Instead of a direct Night from India to the final
destination in Europe as originally planned, the
new arrangement was to Ny the product from Hard work, collaborative
India to another country with an open airport in
Europe, then transport the medicines first by effort, clockwork
road through two more countries before taking
the ferry to reach the final destination � of
precision and team play
course, ensuring supply chain security at every ensured that the
step of the journey.
product made it to
What followed was an excellent demonstration
of clockwork precision and team play to ensure
Europe on time, and was
that the product made it to the destination on launched without delay.
time. After due procedures, the product was
launched as per plan with no delay.

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 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

FUTURE-READY WITH
VIRTUAL REALITY
Training employees using VR in Hyderabad and Vizag
As a pharmaceutical company, we believe in machine calibrations and so on. In real life, this is
applying scientific techniques not only to come a huge hydraulics machine where a new operator
up with quality products, but also to increase may face a variety of safety and efficiency
overall efficiency in our facilities around the challenges. Operated with Human-Machine
world. Manufacturing is a key process where Interface, in a real scenario, a new resource can
we have embraced future-ready innovations so run into various safety hazards.
that our employees can learn new things quickly
and easily. At the same time, manufacturing Our virtual reality training programmes help to
must also ensure quality, safety and efficiency bridge gaps in skill among incoming employees. It
� crucial tenets in the pharmaceutical world. is at least 40 percent more efficient than
traditional training methods and allows trainers to
After intensive training, workers who join the monitor employees’ psychomotor skills, their levels
shop Noor are often overwhelmed by the plant of alertness and their reactions during
environment and machine sizes for the first few emergencies. And our people, in turn, enjoy the
days. In addition, they must apply their training experience.
in this environment, which can be challenging.
We realised that a simulated training Sridhar Sunkara, who anchored the VR
environment could go a long way to teach new fermentation module, says, “This is an excellent
employees the ropes, without them being initiative. The machine is very interactive, it will
intimidated by the equipment and keeping safe. definitely boost interest in learning.” In fact, those
who have trained in our VR labs are eagerly
Enter our Virtual Reality Labs in Hyderabad and awaiting the opening of our third lab in Baddi.
Vizag, where our employees train in “This setup is very good, and it provides excellent
manufacturing processes before joining the on-the-job training,” says Shweta Sharma, who
production Noor. They get accustomed to their attended the blender module.
work environment, learn to perform safety
checks, machine operations and quality checks. As we go onwards and upwards, we know our
people are the wind beneath our wings. We are
The success of any virtual reality implementation committed to empowering them using the latest
project stands on selecting the most challenging technologies and scientific know-how.
scenarios and converting them into simulated
cases or situations. Our content and technology
partners worked seamlessly together to replicate
our plant designs, machines and processes in the
virtual world so that our employees can train in
Enter our Virtual Reality Labs in
accurate modes and environments. For example, Hyderabad and Vizag, where our
the VR module of our compression machine sees
the employee performing various tasks virtually employees train in manufacturing
such as wearing PPEs, reviewing safety checks,
processes before joining the
production Noor�

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 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

LIGHTHOUSE
FACTORIES
Creating role models to lead
the way to a smarter world
The world is progressing at a dizzying pace as A digitally enabled factory of the future transforms
we experience the Fourth Industrial Revolution the lives of the people on the shopNoor and in the
— the automation of traditional manufacturing labs. Integrated systems provide information about
and industrial practices using smart tech. We too priorities, shift planning, performance against plan
are gearing up to be future-ready, and one of the indicators and realignment of plans where
steps we've taken in this direction is to initiate an necessary based on exceptions and delays. All
internal pilot to gradually transform our factories equipment is monitored real-time; information
to become 'lighthouse' factories. tracking and decision-making are easier, thereby
significantly improving supply chain metrics.
The lighthouses are some of the world's most
advanced factories from both digital and “The scale and speed at which new-age
sustainable perspectives. These serve as technology solves problems is amazing. It has to
beacons of light for the rest of the industry, and be applied aptly to improve end-to-end value for
Dr. Reddy's wants to be at the forefront as a the organization,” says G V Prasad, our Co-
leading pharmaceutical company. Chairman and Managing Director. Of course,
manufacturing efficiency will ultimately help us to
Our first pilot site for this transformation journey
make our medicines more accessible and
is the FTO-2 manufacturing unit located in
affordable, because Good Health Can't Wait.
Hyderabad. We believe in embracing the most
current technologies to improve manufacturing
efficiency, while at the same time contributing to
sustainable goals. The transformation has
significant impact on our culture and capability,
product quality, process robustness, efficiency
and productivity.

We believe in embracing the

most current technologies to
improve manufacturing
efficiency� while at the
same time contributing to
sustainable goals.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

A COMPREHENSIVE
COVID-19 OUR COVID-19 PORTFOLIO

PORTFOLIO SPUTNIK V VACCINE

Partnership with the Russian Direct Investment Fund in 2020
Contributing to the Received emergency use approval from the DCGI in April 2021

fight against the

pandemic in every way
we can REMDESIVIR (REDYX™)
Non-exclusive licensing agreement with Gilead Sciences, Inc. in 2020
Launched in India in 2020
The coronavirus pandemic has tested our readiness and
resolve to be a part of solutions during healthcare
emergencies. Through the course of 2020 and 2021, our
teams swung into action to ensure that we explore every
possible avenue and innovative solutions in the fight against FAVIPIRAVIR (AVIGAN ) ®

the COVID-19 pandemic. As a responsible pharma Licensing agreement with FujiFilm Toyama Chemical
company, we have worked hard to develop a portfolio of Commercialized in India in 2020
drugs aimed at treating mild, moderate as well as severe
COVID-19. To this portfolio, we also added a vaccine. We
will continue to support the collective global effort against
the COVID-19 pandemic.
2-DEOXY-D-GLUCOSE (2DG™)
At a time when human life is at its most vulnerable, our Partnership with Defence Research and Development Organization
teams across functions are working non-stop to accelerate Supply commenced in India in 2021
access to affordable medicines around the world.

MOLNUPIRAVIR
Non-exclusive licensing agreement signed with Merck Sharp & Dohme (MSD) in 2021

BARICITINIB
Non-exclusive licensing agreement signed with Eli Lilly and company in 2021
nd has the sole distribution rights of the first 250 million doses (first and second dose components included) of the
vaccine in India.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

CONNECTING SCIENCE, TECHNOLOGY,

INNOVATION AND PEOPLE IN THE FACE OF A
PANDEMIC Our priority remains
Since the beginning of the pandemic last year, Dr. Reddy’s has left no stone unturned to explore every avenue in the global fight against the
COVID-19 pandemic, and we will continue our efforts unwaveringly. Our priority remains the health, safety and well-being of our employees,
the health, safety and
communities around us, customers, suppliers, partners, stakeholders, and our promise to make affordable medicines accessible to patients
around the world.
well-being of our
employees, communities
ENSURING EMPLOYEE SAFETY AND WELL-BEING around us, customers,
suppliers, partners,
stakeholders, and our
promise to make affordable
medicines
Organized a
vaccination drive Established Introduced a home Dedicated Up-to-date information Strategic tie-ups accessible to patients
in-house isolation program helpline numbers on the local situation, with hospitals
for employees and
their family emergency care with tele-consulting for emergency employee connects and and healthcare around the world.
members centres for with doctors, daily support for employee assistance centres to assist
pre-hospitalization monitoring of vitals employees programmes to support employees and
care and a home the emotional, mental their families
isolation kit and physical well-
being of colleagues
around the world

SUPPORT TO THE COMMUNITY

1 During the first wave, the need of the hour was to support those most vulnerable and most affected by the lockdown.
Our efforts included�
• Delivery of funding, rations, sanitizers and life-saving PPEs
• Roll-out of training programs for COVID-19 warriors to build awareness about the disease

2 During the second wave, we aligned efforts to the needs of communities to do our bit to release the pressure on the
WE ARE ALL
medical infrastructure. IN THIS TOGETHER!
The second wave required intense effort in
PHASE I: PHASE II: the form of manpower, awareness, training,
coordination, equipment and infrastructure.
• Augmented medical facilities by Having initiated community awareness campaigns, access to testing and Additionally, a third wave appears to be a
helping set up step-down units home-care medicine supply, our teams are working towards the below. possibility in India, and will need significant
(between ICU and general ward levels), reinforcement of our healthcare infrastructure
sourcing ventilators, setting up oxygen • Promotion of COVID-19 appropriate behavior at community level through
on an urgent basis.
plants. IEC materials

• Provided ventilators, oxygen • Strengthening community awareness, surveillance, screening and triaging
concentrators and medical supplies, through FLWs Dr. Reddy’s has committed
including kits with COVID-19 therapeutic
drugs to charitable hospitals across the
• Improving access to testing services – providing RAT kits to
charitable hospitals, SuB centers and PHCs
₹ 50 CRORE
country. (~US$ 7 MILLION)
• Supporting home-care management of patients – working with district
• Worked with our Community towards the COVID-19 India
health department and charitable hospitals for home-based medical kits
Health Intervention Programme Collaborative Committed Fund
(CHIP), to source and distribute • Strengthening Government isolation centers – providing medical supplies,
oximeters, thermometers and clinical protocols and also tele-consultation
medicines to 155 villages We have also launched Dr. Reddy’s
• Providing emergency referral transport facility
• Supported State Governments of • Working on reduction of vaccine hesitancy COVID AID
Telangana, Andhra Pradesh, Himachal - a campaign inviting our partners, global
Pradesh with several thousands of • Strengthening vaccine delivery program
teams and employees to collaborate with us
medicines as per COVID-19 protocol and help strengthen the infrastructure in
We will continue to support the community in every possible way to win the battle against COVID-19. preparation for subsequent waves.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

22 23
Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

BOARD OF DIRECTORS

C M

M M M C
M M M M
K SATISH G V PRASAD LEO PURI SRIDAR IYENGAR
REDDY Co-Chairman and Managing Director Independent Director Independent Director
Chairman

C
M C C C
M M M M
ALLAN OBERMAN
DR. BRUCE L A CARTER PRASAD R MENON SHIKHA SHARMA
Independent Director
Independent Director Independent Director Independent Director

M
M

KALPANA MORPARIA
Independent Director

OUR BOARD LEVEL COMMITTEES

Audit committee C Committee chairmanship
Science, technology and operations committee Stakeholders' relationship committee
Nomination, governance and compensation committee
Banking and authorisations committee Corporate social responsibility committee M Committee membership
Risk management committee
24 25
Dr. Reddy’s Laboratories Limited Company OverviewStatutory ReportsFinancial Statements Annual Report 2020-21

MANAGEMENT COUNCIL

K SATISH G V PRASAD PARAG AGARWAL PATRICK AGHANIA

REDDY Co-Chairman and Chief Financial Officer Chief Executive Officer� Eur
Chairman Managing Director

EREZ
ISRAELI ARCHANA M V RAMANA SANJAY
BHASKAR Chief Executive SHARMA
Chief Executive
Chief Human Officer� Branded Global Head of
Officer
Resource Officer Markets (India and Manufacturing
Emerging Markets)

DEEPAK
SAPRA MARC SAUMEN SAURI
Chief Executive KIKUCHI CHAKRABORTY GUDLAVALLETI
Officer� API Chief Executive Advisor Global Head of
and Services Officer� North Integrated Product
America Generics Development
Organization (IPDO)

MUKESH
RATHI YUGANDHAR
Chief Digital and PUVVALA
Information Officer Global Head of
Supply Chain
26
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

At Dr. Reddy's, we remain

mindful of the needs of all our
stakeholders while creating healthy
ecosystems and strong communities.

Our endeavor is to go beyond

financial goals and legal requirements
to meet the ethical, social and
environmental expectations of our
stakeholders. Therefore, we engage
with them consistently to nurture
trust and ensure business
sustainability.

BUSINESS
RESPONSIBILITY
REPORT
28 29
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

Disclosures on the nine principles as charted by the Ministry of Corporate Affairs in the �National Voluntary SECTION A SECTION B SECTION D
Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business’ FINANCIAL DETAILS OF THE
GENERAL INFORMATION BR INFORMATION
ABOUT THE COMPANY COMPANY (AS ON MARCH 31, (A) Details of the director responsible
CORPORATE IDENTITY NUMBER (CIN) OF 2021) for implementation of the BR
THE COMPANY PAID-UP CAPITAL (₹) policy/policies
L85195TG1984PLC004507 832 million Mr. K Satish Reddy
Chairman
NAME OF THE COMPANY TOTAL TURNOVER FROM DIN: 00129701
Dr. Reddy’s Laboratories Limited OPERATIONS (STANDALONE) (₹)
133,491 million (B) Details of the BR Head
REGISTERED ADDRESS Mr. Thakur Pherwani
8-2-337, Road No. 3, Banjara Hills, TOTAL PROFIT AFTER TAX Head, EHS, Sustainability and
Hyderabad 500 034, Telangana, India (STANDALONE) (₹) Operations Excellence
21,864 million Tel: +91-40-4900-2339
WEBSITE E-mail ID: tpherwani@drreddys.com
www.drreddys.com TOTAL SPENDING ON CORPORATE DIN: Not applicable
SOCIAL RESPONSIBILITY (CSR) AS
PRINCIPLE 1 PRINCIPLE 2 PRINCIPLE 3 E-MAIL ID PERCENTAGE OF PROFIT AFTER TAX (C) Indicate the frequency with which
ETHICS, TRANSPARENCY & PRODUCT LIFE CYCLE EMPLOYEE shares@drreddys.com (%) the board of directors, committee of
ACCOUNTABILITY SUSTAINABILITY WELL-BEING
2.12% of the average net profits of the the board or CEO meets to assess the
FINANCIAL YEAR REPORTED company made during the immediately BR performance of the company
Businesses should conduct and govern Businesses should provide goods and Businesses should promote the
themselves with ethics, transparency April 1, 2020 to March 31, 2021 three preceding financial years. 3–6 months
services that are safe and contribute to well-being of all employees.
and accountability. sustainability throughout their lifecycle. SECTOR(S) THAT THE COMPANY IS LIST OF ACTIVITIES IN WHICH (D) Does the company publish a BR or a
ENGAGED IN (INDUSTRIAL ACTIVITY EXPENDITURE ABOVE HAS BEEN Sustainability Report? What is the
CODE-WISE) INCURRED hyperlink for viewing this report?
Pharmaceuticals (210) Refer to Principle 8 on page no. 38 How frequently is it published?
Yes, the company publishes both a BR
LIST THREE KEY PRODUCTS/ SERVICES
and a sustainability report. The
THAT THE COMPANY SECTION C
sustainability report can be viewed at:
MANUFACTURES/PROVIDES (AS IN OTHER DETAILS www.drreddys.com/our-people-and-our-
BALANCE SHEET) DOES THE COMPANY HAVE ANY citizenship/sustainability/
Buprenorphine & Naloxone, Omeprazole SUBSIDIARY COMPANY/COMPANIES?
and Nimesulide Yes The BR can be viewed as part of the
annual report. This report is published
TOTAL NUMBER OF LOCATIONS DO THE SUBSIDIARY COMPANY/ annually.
WHERE BUSINESS ACTIVITY IS COMPANIES PARTICIPATE IN THE
UNDERTAKEN BY THE COMPANY (E) Principle-wise (as per National
BUSINESS RESPONSIBILITY (BR)
Our manufacturing, sales and marketing Voluntary Guidelines) BR policy/
INITIATIVES OF THE PARENT
operations span over 56 countries. We also policies.
COMPANY? IF YES, THEN INDICATE THE
PRINCIPLE 4 PRINCIPLE 5 PRINCIPLE 6 serve API customers globally. Please refer Table 1
NUMBER OF SUCH SUBSIDIARY
STAKEHOLDER HUMAN RIGHTS ENVIRONMENT COMPANY(S)
(A) Number of international
ENGAGEMENT Our subsidiary companies are closely
locations: We have six manufacturing
Businesses should respect the interests Businesses should respect and promote Businesses should respect, protect and integrated with our corporate BR initiatives.
of and be responsive towards all facilities in Louisiana (USA), Middleburgh
human rights. make efforts to restore the (USA), Mexico, Mirfield (UK), Beverley
stakeholders, especially those who environment. DO ANY OTHER ENTITY/ENTITIES (E.G.
are disadvantaged, vulnerable and (UK) and Kunshan Development zone
SUPPLIERS, DISTRIBUTORS ETC.) THAT
marginalized. (China); and three research and
THE COMPANY DOES BUSINESS WITH,
development facilities in Cambridge
PARTICIPATE IN THE BR INITIATIVES OF
(UK), Leiden (The Netherlands) and
THE COMPANY? IF YES, THEN INDICATE
Kuala Lumpur (Malaysia). Refer page no.
THE PERCENTAGE OF SUCH
78
ENTITY/ENTITIES?
(B) Number of national locations Yes. We have a code of conduct for
We have 18 manufacturing units and partners, which we expect them to follow.
six research and development facilities For more details, please refer to:
in India. Refer page no. 79 www.drreddys.com/media/
720559/supplier-code-of-conduct.pdf
MARKETS SERVED BY THE COMPANY –
LOCAL/STATE/NATIONAL/
INTERNATIONAL
Our major markets include the United States
of America (USA), India, Russia, CIS regions
PRINCIPLE 7 PRINCIPLE 8 and Europe.
POLICY ADVOCACY EQUITABLE DEVELOPMENT PRINCIPLE 9
We also reach out to patients in various
CUSTOMER VALUE other markets like South Africa, Australia,
Businesses, when engaged in inNuencing Businesses should support inclusive Jamaica, New Zealand, Brazil, China and
public and regulatory policy, should do growth and equitable development. Businesses should engage with and Association of Southeast Asian Nations
so in a responsible manner. provide value to their customers (ASEAN) countries.
and consumers in a responsible
manner.

30 31
32

TABLE 1 | PRINCIPLE-WISE (AS PER NVGS) BR POLICY/POLICIES

P1
PRINCIPLE-WISE P2 P3 P4 P7 P8 P9
SL. (AS PER NVGS) ETHICS, PRODUCT P5 P6
NO BR POLICY/ TRANSPARENCY LIFE CYCLE EMPLOYEE STAKEHOLDER HUMAN RIGHTS ENVIRONMENT POLICY EQUITABLE CUSTOMER
POLICIES AND SUSTAINABILITY WELLBEING ENGAGEMENT ADVOCACY DEVELOPMENT VALUE
ACCOUNTABILITY
1 Do you have a
Yes Yes Yes Yes We comply with all the Yes Not Yes Yes
policy/policies
statutory requirements. applicable
for- All the contracts and
standing orders include
relevant aspects of
human rights.

2 Has the policy been Not

Yes Yes Yes Yes All the standing Yes Yes Yes
formulated in applicable
orders are cosigned by
consultation with the
the recognized union.
relevant stakeholders?

3 Does the policy

We have adopted We abide by all laws Yes, we conform We abide by all laws Yes, the policy Yes, the policy is Not Yes, the policy is inline We abide by all laws of
of of inline
conform to any a Code of the land and are to the required labor the land and are conforms to with international applicable with national the land and are a
Business a a national
national/ international Conduct and Ethics signatory to the 10 laws in each country. signatory to the 10 standards pertinent to standards. standards. signatory to the 10
standards? If yes, (COBE) which principles of the UN Apart from that, we principles of the UN human rights. principles of the UN
specify? conforms to national Global Compact. We continuously Global Compact. We Global Compact. We
and international take into account benchmark our take into account take into account
standards. This applies industry best practices policies with industry industry best practices
to all the directors and and global competition in best practices and and global
employees across the benchmarks in different markets and global benchmarks in benchmarks in
group. defining our policies. defining our policies. defining our policies.
review them as
needed.

4 Has the policy

Yes, it has been Statutory policies Policies in India are Statutory policies Policies in India are Yes Not Yes Statutory policies are
been
are are
approved by the approved by the board placed before approved by CHRO placed before the approved by CHRO applicable placed before the
board? If yes, has and/ or appropriately the board for and international board for and international board for
it
been signed by authorized. consideration and policies by consideration and policies by CEO/ consideration and
MD/ CEO/MD.
owner/CEO/ approval. All other The management approval. All other MD. The MC and approval. All other
appropriate board policies are approved council (MC) and policies are approved relevant stakeholders policies are approved
director? by CEO/MD. relevant stakeholders by CEO/MD. are consulted. by CEO/MD.
are consulted.

5 Does the company Yes The responsibility for All policy changes The responsibility for The responsibility Yes Not Yes The responsibility for
have a specified the implementation of are discussed in the implementation of for the implementation applicable the implementation of
committee of the policies and their HR leadership team policies and their policies and their
of policies and their
board/ director/ review primarily lies meeting. The MC review primarily lies review primarily lies
review primarily lies
official to oversee the with the respective and relevant with the respective with the respective
with the respective
implementation of business/function business/function business/function
stakeholders are business/function
the policy? head. head. head.
consulted before head.
taking it for approval.

6 Indicate the link for the

www.drreddys.com/ www.drreddys.com/me NA www.drreddys.com/me www.drreddys.com/ www.drreddys.com/me Not www.drreddys.com/me www.drreddys.com/me
policy to be viewed
investors/governance/c dia/636787/dr-reddys- dia/636787/dr-reddys- investors/governance/ dia/636787/dr-reddys- applicable dia/993225/csr- dia/636787/dr-reddys-
online?
ode-of-business- she-policy-board.pdf she-policy-board.pdf code-of-business- she-policy-board.pdf policy.pdf she-policy-board.pdf
conduct-and-ethics- conduct-and-ethics-
cobe.aspx cobe.aspx

TABLE 1 | PRINCIPLE-WISE (AS PER NVGS) BR POLICY/POLICIES

P1
PRINCIPLE-WISE P2 P3 P4 P7 P8 P9
SL. (AS PER NVGS) ETHICS, PRODUCT P5 P6
NO BR POLICY/ TRANSPARENCY LIFE CYCLE EMPLOYEE STAKEHOLDER HUMAN RIGHTS ENVIRONMENT POLICY EQUITABLE CUSTOMER
POLICIES AND SUSTAINABILITY WELLBEING ENGAGEMENT ADVOCACY DEVELOPMENT VALUE
ACCOUNTABILITY
7 Has the policy been Yes Employees are required Yes, all policies have Employees are required Yes Yes Not Yes Employees are required
formally communicated to sign an undertaking, been communicated to sign an undertaking, applicable to sign an undertaking,
to all relevant internal at least annually, stating to stakeholders. at least annually, stating
at least annually,
stating
and external that they have read that they have read that they have read the
stakeholders? the Code of Business
Code of Business the Code of Business
Conduct and Ethics Conduct and Ethics
Conduct and Ethics (COBE) and comply
(COBE) and comply (COBE) and comply
with the principles of with the principles of
with the principles of the code. New
the code. New the code. New
employees are required employees are required
employees are to sign a similar
required to sign a to sign a similar
undertaking at the time undertaking at the time
similar undertaking at of joining. Additionally,
the time of joining. of joining. Additionally,
all our policies with all our policies with
Additionally, all our respect to the nine
policies with respect respect to the nine
principles are available principles are available
to the nine principles on the company’s
on the company’s
are available on the website.
website.
company’s website.
8 Does the company Yes, we have an Yes Yes Yes Not Yes Yes
have in-house Yes Yes intranet where all applicable
structure to implement policies are published
the policy/policies? along with FAQs.
Apart from that, we
have employee
communications
sent out on any
changes in policies.

9 Does the company Yes We also have a Policy grievances We also have a Yes Yes Not Not We also have a
have a grievance dedicated are handled by the dedicated applicable applicable dedicated
redressal mechanism ombudsperson policy respective business ombudsperson policy ombudsperson policy
related to the to address all HR partners. We also to address all concerns to address all concerns
policy/policies to concerns related to have a common e-mail related to company- related to company-
address stakeholders’ company- level ID wherein employees level policies. level policies.
grievances related to policies. can drop an e-mail
the policy/policies? with their feedback.
through various
10 Has the company Yes We comply with the forums. All policies are audited We comply with the nine Yes Not applicable
carried out nine principles broadly by the internal audit principles broadly through
independent through the following team. We also have the following policies:
audit/evaluation of the policies: Code of external auditors who Code of Business Conduct
working of this policy Business Conduct and review HR and Ethics (COBE), SHE
by an internal or Ethics (COBE), SHE policy and principles,
policies/processes.
external agency? policy and principles, quality policy, purchase
quality policy, policy and HR policies.
purchase policy and These policies are regularly
HR policies. These reviewed by various
policies are regularly internal and external
reviewed by various agencies, including
internal and external regulatory agencies. We
agencies, including also proactively follow
regulatory agencies. public advocacy through
We also proactively various forums.
follow public advocacy
 t ugh the following SHE policy policy, purchase regularly reviewed by agenci vely follow public
We comply with the h policies: Code of and policy and HR various internal and es. We advocacy through
nine principles broadly r Business Conduct principles, policies. These external agencies, also various forums.
o and Ethics (COBE), quality policies are including regulatory proacti

Dr. Reddy’s Laboratories Limited

Company Overview
Statutory Reports
Financial Statements
Annual Report 2020-21
Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

SECTION E
In this endeavor, we have reduced the (a) Atorvastatin Calcium: This process has been successfully All critical business partners Cost Competitiveness:
PRINCIPLE 1 Process Mass Intensity substantially and An existing batch/commercial tested at pilot scale. Benefits of this contributing to 80% of sales value have We work with our business partners to
ETHICS, TRANSPARENCY AND quantified as given below: process of high volume API approach, when implemented at to undergo assessment and drive the process of Cost Improvement
ACCOUNTABILITY (Atorvastatin Calcium) consisting of commercial level, lesser space for reassessment at a fixed frequency Programmes (CIPs) wherein we jointly
1. Does the policy relating to ethics, PMI COMPARISON multiple chemical conversions & machine, reduction in manual depending on the sourcing category i.e. identify and explore new ideas or
bribery and corruption cover only unit operations is being redeveloped
activity and reduction in overhead (API’s, excipients, packaging etc). The opportunities that would help in overall
the company? Does it extend to the to generate a completely integrated
700
system starting from raw materials cost. frequency of assessment is once in reduction of costs or reduce expenditure
group/joint ventures/suppliers/ every two years for API’s/excipients, or also help in increasing efficiency (like
contractors/NGOs/others? 600 to dried API via Now processing. (b) CanagliNozin
There are four chemical conversions three years for primary packaging and reduction of wastages, reduction of
Yes. The policy relating to ethics, 500 In this product, a highly exothermic
followed by unit operations of four years for secondary packaging. solvent consumption, improving
bribery and corruption extends beyond & hazardous reaction involving the
400 crystallization, filtration, drying & process/minimising inefficiency etc).
our employees, both whole-time and use of n-Butyl Lithium has been Ease of doing business:
powder processing involved in
independent directors and covers our 300 designed & optimized inNow using a In order to build transparency and to We develop plans/strategy to generate
commercial process and two
wholly-owned subsidiaries. While chemical conversions as per the Vapourtec Now reactor at lab. Rig, simplify business transactions, we carry savings opportunities and to stay cost
200
contracts with our business partners, improved CIP process . There is which is designed for scale up to out our routine transactions on a digital competitive in end markets and improve
contractors and business partners 100 isolation & quality testing of plant, is installed at API-SEZ & few platform and a dedicated portal is affordability of the final product.
include adherence to our principles compounds at each of these steps. trials have been taken to establish available for our partners viz.
0 Vikreta2Connect, which facilitates the Alternate vendor development for
First Second A continuous manufacturing process Now process at plant scale. Better
concerning ethics, there is a separate Generation Generation
is developed using Now chemistry control on reaction & inherent safety whole process of procure to pay (P2P). imported materials that has significant
Route Route cost-reduction opportunity and to
code of conduct required to be principles wherein isolations at all is achieved by changing this reaction It serves as a one stop solution to
adhered to by our business partners and intermittent steps are eliminated promote local manufacturing.
from batch to Now. provide our business partners better
service
providers. ii. Continuous Manufacturing thus making the process lean. This visibility on RFQs, POs release, PO Air vs. Sea shipment:
The pharmaceutical industry has so new process has the potential to 3. Does the company have procedures
2. How many stakeholder complaints acknowledgement, ASN, invoice We have a process in place to monitor
far relied on batch processes for reduce the cycle time of in place for sustainable sourcing
have been received in the past submission, GRNs & payment status the overall air vs. sea shipments to
manufacturing drug substances as manufacturing from days to few (including transportation)? If yes,
financial year and what percentage well as drug products. However, hours. Reaction times in continuous and other related services. maximize the export shipments by sea,
what percentage of your inputs was
was satisfactorily resolved by the longer campaign times, labor mode are in minutes as compared to and yearly plans are laid down (market
sourced sustainably? The Vikreta portal has efficient invoice
management? intensive nature of batch long hours of reaction in batch specific targets are assigned) for shifting
Yes, we have well defined and management resulting in faster
During FY2021, the company received manufacturing (which has a mode. Flow approach has enabled to finished goods movement from air to
documented “Supplier Code of processing of invoices that has resulted
167 concerns through various channels significant impact on production explore design space that would be sea.
Conduct” for our business partners, in on-time payments to our business
of Ombuds reporting. All these cost) and batch rejections/batch to impractical (even impossible) in
batch mode. wherein we ensure that our business partners. Also, uploading digital There has been an increase of
concerns are investigated and acted batch variations in the product partners are aware of the code of invoices has promoted paperless approximately 2-3% in the share of sea
upon. As of March 31, 2021, 23 of these quality (which leads to Few salient comparisons between conduct and follow the same transactions. Here, business partners shipments in the reporting period as
concerns were pending for closure. wastage/regulatory concerns) are batch & Now process are mentioned appropriately. The Code of Conduct can make advance shipment compared to FY2020, contributing 57%
huge drawbacks of batch processing. in the table below: addresses all the elements of notification before executing in total export shipments in FY2021.
In addition, an increasing pressure on
sustainable sourcing with special dispatches making the operations quite
PRINCIPLE 2 quality and costs has all led the PMI COMPARISON
pharma industry towards gradually emphasis on supply continuity, quality easy.
PRODUCTS LIFE CYCLE SUSTAINABILITY
embracing the concept of and compliance, capacity and
1. List up to three of your products or
services whose design has continuous manufacturing.
160
capability building, long-term business
Forecasting Accuracy:
We have been working to improve the
There has been an
relationships, and overall sustainable
incorporated social or environmental Continuous manufacturing offers
140
performance management. We also
forecasting model across all major increase of
concerns, risks and/or opportunities. 120 geographies and the overall forecast
• Sitagliptin
many advantages such as shorter
processing times, increased safety,
have dedicated team at SCM which
accuracy level is above 70%. Despite approximately 2-3%
100 helps business partners align with our
• Continuous Manufacturing increased efficiency, less WIP
80 vision of sustainability and for capability
the challenges due to COVID-19 we in the share of sea
(a)Atorvastatin Calcium material, lesser manual handling and have been able to sustain and service
(b) CanagliNozin smaller footprint. It is also amenable 60
building.
the markets without any major impact. shipments in the
2. For each such product, provide the
to real-time release testing
approaches. 40
Few of the initiatives are listed below:
There is a reduction of approx. 31% in reporting period as
following details in respect of
resource use (energy, water, raw At Dr. Reddy’s, the API team has 20
Risk Mitigation:
At Dr. Reddy’s, we believe in mutually
overall COPE (Cost of Poor Execution)
due to better forecasting and
compared to FY2020,
material etc.) accuracy
sustainable growth coupled with levels, which led to less wastage while
contributing 57% in
per unit of product (optional): 0
embarked upon this journey & ATV ATN ATV
significant progress has been made on Commercial CIP Continues stability. In line with this philosophy, serving more volume of business during
i. Sitagliptin
We have continued to apply and two products: Process Process Flow
Process
we conduct a business partner risk FY2021. total export shipments
embed 12 principles of green Note: ATV & ATN refers to Atorvastatin calcium assessment to ensure the sustainability Rolling forecasts on a quarterly basis in FY2021.
chemistry in our research and and stability of our business partners.
are also shared with our business
development pursuits. We identified a Our business partner risk assessment
partners to help them to plan their input
synthesis of Sitagliptin in which a SALIENT COMPARISONS BETWEEN BATCH AND FLOW PROCESS framework comprises two key aspects
materials availability, capacity
catalytic enantioselective carbonyl COMMERCIAL PROCESS
CIP PROCESS
(AVF3) (ATN2) viz. “Organizational Risks" and "Supplier
FLOW PROCESS allocation etc. Sharing forecasts on a
reduction aiming to develop a greener Sustainability Risks".
regular basis has helped in better
and cost effective route to meet the
No. of isolations steps 4 2 2 We are associated with an independent inventory management, avoiding rush-
business needs without compromising Solvents used
risk assessment agency to conduct the orders, avoidance of air mode
4 organic solvents 2 organic solvent 2 organic solvent
on the environmental considerations is (Including water) & water & water & water risk assessment for our business shipments/reduction in logistics costs.
adopted. 34 Solvent qty./kg. of Form-I 107 litres 65 litres ~60 litres API (operation + analysis)
Overall cycle time to generate Stage-1 (10 days) &
35 days 20 days
Stage-2 (~16 hours)
Solid waste/kg. of API 0.13 kg. 0.13 kg.
(carbon + celite) 0.30 kg.
(excluding water)
Solvent reusability/kg. of API 70% 70%
30%
RMC US$ 185 US$ 150 US$ 50
partners. The i criteria which becomes part of the
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 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

4. Has the company taken any steps to

5. Does the company have a mechanism 8. What percentage of your employees aspirations through greater PRINCIPLE 6 The company has adopted multiple
procure goods and services from local
to recycle products and wastes? If yes, were given safety & skill up-gradation engagement. We build lasting bonds ENVIRONMENT initiatives for addressing climate change
& small producers, including and global warming. We have adopted
what is the percentage of recycled training in the last year? with all our stakeholders, internal and 1. Does the policy related to Principle 6
communities surrounding their place carbon emission targets based on the
products and wastes? 9,735 employees were given safety external, through meaningful cover only the company or extends
of work? If yes, what steps have been deliberations. This process helps us Science Based Target Initiative (SBTi) to
We have aspiringly taken the target to training. to the group/joint
taken to improve their capacity and review our actions, rethink our reduce our CO2 emission by 55% by
attain 100% waste neutrality by 2023 for ventures/suppliers/
capability of local and small vendors? Approximately 8,723 employees were 2030. We have also adopted Internal
India and globally by 2025 including roadmap, redress grievances and contractor/NGO’s/others.
Yes, small scale industries form a crucial provided skill upgradation training in Carbon Price, which helps us to drive
plastic waste. recognize new avenues of growth. We have a well defined Safety, Health �
part of our business partner base. We various technical and related areas. further projects for CO2 emission
We have identified clusters of Environmental policy and principles in reduction.
have been making continuous efforts to In this reporting period of FY2021, we
stakeholders who are directly and place to motivate our employees to
encourage both local and small scale had achieved waste neutrality in India of
minimize our environmental impact. We also publicly disclose our carbon
business partners by hand-holding them 98.98% and 100% in plastic waste indirectly affected by our operations,
The policy and principles are also emission performance and strategy
and providing technical support to meet whereas globally waste neutrality is and have developed targeted
communicated to all our stakeholders to publically through CDP (Carbon
any specific requirement of Dr. Reddy's, 98.16% & plastic waste 50%. engagement mechanisms for each
ensure that they are in compliance with Disclosure Project). In FY2021 we have
sometimes making advance payment to cluster. Table 3 gives details of our the policy.
On the waste water recycling front, we engagement platforms for each achieved a “B” in Climate Strategy and
help them in their sourcing activities, an “A” in CDP-SC (supply chain)
have nine ZLDs across our stakeholder group.
building capacity and supply of 2. Does the company have
manufacturing facilities in India, which disclosure.
materials to us. strategies/initiatives to address global
provide 100% waste water recycling for environmental issues such as climate We are also disclosing our water
Import Substitution is another initiative 16 out of our 18 facilities. PRINCIPLE 5 change, global warming, etc.? footprint through CDP’s water
in our efforts of localization that has HUMAN RIGHTS We are a responsible corporate disclosure. In FY2021, we have achieved
helped us in getting better cost- 1. Does the policy of the company on committed towards managing climate
PRINCIPLE 3 an “A-” score band in it.
advantage, better management of human rights cover only the change both within and beyond our
inventory, better compliance control and EMPLOYEE WELL-BEING company or extend to the group/joint sphere of inNuence. In the Dow Jones Sustainability Index,
it has led to significant reduction in lead 1. Please indicate the total number of ventures/suppliers/contractor/ we have retained our position in the
time and cost savings along with employees. NGO’s/others. Emerging Market Index for the 5th year
reduction in carbon footprint due to 22,739 At present, our policy is extended to the and are now rated 10th globally for our
significant reduction in transportation. group, our business partners, sustainability performance.
2. Please indicate the total number of
Local manufacturers were encouraged contractors and NGOs.
employees hired on temporary/ We publicly report on our
to take up the related development environmental performance through our
contractual/casual basis. 2. How many stakeholder complaints
activities of the import substitution sustainability report. Please refer to page
1,201 have been received in the past
products, and required technical no: 40 to 61 of our sustainability report
support is provided by Dr. Reddy's in financial year and what percent was
3. Please indicate the number of 2019-20 where we have mentioned
troubleshooting, conducting process satisfactorily resolved by the
permanent women employees. details regarding the environmental
validations, quality improvements and management?
3,888 initiatives taken at our units.
better process controls, and overall also We did not receive any complaints in
PRINCIPLE 4 the last financial year.
providing long-term commitments. 4. Please indicate the number of STAKEHOLDER ENGAGEMENT
permanent employees with disabilities. 1. Has the company mapped its
Few of the initiatives taken in this
52 internal and external stakeholders?
direction include:
• We help local business partners to Yes, we have mapped our internal and
5. Do you have an employee external stakeholders.
customize their existing products to
meet our product requirements and
association that is recognized by TABLE 3 | STAKEHOLDER ENGAGEMENT
management? Yes, we have recognized 2. Out of the above, has the
thus eliminate import shipments. Unions. KEY STAKEHOLDERS ENGAGEMENT PLATFORMS
• In terms of packaging materials, company identified the
disadvantaged, vulnerable and EMPLOYEES
6. What percentage of your permanent marginalized
procurement from small scale employees are members of this stakeholders? The driving forces of the organization, our employees deserve In-house publications | Intranet | Internal networking platform |
industries has been recorded to be recognized employee association? Yes, we have identified a safe, inclusive and empowering workplace with the freedom Leadership communication | 360 degree feedback | Celebrations |
about 17% of total packaging The percentage is 2.34% disadvantaged, vulnerable and to act, innovate and grow not just as professionals but also as Training programs | Employee Pulse Survey.
material marginalized
procurement. stakeholders. individuals.
7. Please indicate the number of
• The imports contributed to about 24% complaints relating to child 3. Are there any special initiatives taken INVESTORS AND SHAREHOLDERS
labor,
of the total packaging material forced labor, involuntary labor, by the company to engage with the Our investors and shareholders put trust and financial capital in Analyst meets | Quarterly results | Annual reports | Sustainability
sexual disadvantaged, vulnerable and the organization and expect a steady return on their investments. reports | Earning calls | E-mail communication | Official news
procurement cost, which was reduced harassment in the last financial year
by around 3% in the current year and pending, as on the end of marginalized stakeholders? releases and presentations.
the We believe businesses must strengthen
especially from the large volume SOCIETY
financial year.
materials. Table 2 provides the details. capabilities to fulfil stakeholder business partners who support various aspects of our operations.
Communities across the world, especially the economically
weaker sections of the society, whose lives are impacted by our
social contributions. Healthcare professionals who rely on
today’s products and tomorrow’s innovations.

TABLE 2 | NUMBER OF COMPLAINTS

FILED DISPOSED
SL. OPENING AS PENDING AS ON
CATEGORY DURING THE DURING THE
NO. ON APRIL 1, 2020 MARCH 31, 2021
FINANCIAL YEAR FINANCIAL YEAR
1 0 0 0 0 CUSTOMERS AND PARTNERS
Child labor/forced labor/involuntary labor
Insurers, vendors, distributors, Government, regulators and
2 Sexual harassment 1 15 15 1
3 3
3 Discriminatory employment 0 0 0 0
 Throug Reddy’s Foundation, Reddy’s Foundation for Nursing efficiency program | Sarathi - Doctor’s assistant Partnership with the beta Institute, Germany.
h Naandi Foundation, NICE Health and Education program | Sanjeevani – Pharmacists program | Awareness for
partner Foundation and local NGO (DRFHE) Inner circle - Life & Swasthyagraha – Awareness programs for public and
s like partners and employee Relationship building employees | Manthan & Mantra - Senior Doctors programs | Regular business meetings, vendor meets, strategic business
Dr. volunteering program Dr. programs | Abhilasha - Quality in Healthcare - Healthcare professional programs | partner training and development.

3 3
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

Our sustainability report 2019-20 can be

6. Are the emissions/waste generated by The key programmes are described Livelihood For details of the projects undertaken 3. Is there any case filed by any
accessed at:
the company with in the permissible below: Our livelihood programmes, refer to the projects listed in the CSR stakeholder against the company
https://www.drreddys.com/our-people-
limits given by CPCB/SPCB for the implemented through Dr. Reddy’s report. regarding unfair trade practices,
and-our-citizenship/sustainability/ Education
financial year being reported? Foundation (DRF), focuses on making irresponsible advertising and/ or anti-
Our education initiatives focus on the Indian youth employable, enhancing 5. Have you taken steps to ensure that
3. Does the company identify and Yes, air emissions and waste generated competitive behavior during the last
enhancing the quality of education. their earning potential. this community development
assess potential environmental by us are within the permissible limits five years and pending as on end of the
• Pudami neighborhood schools and initiative is successfully adopted
risks? prescribed by environmental regulators. • Grow: The program aims at delivering financial year?
English primaries aim to make by the community?
Yes, Dr. Reddy’s as a corporate identifies high quality skill training to youth to On December 18, 2016, the Attorneys
7. Number of show cause /legal available quality English medium Our community development initiatives
and assesses potential environmental help them get better skills and jobs. It General for 19 states in the United States
notices received from CPCB/SPCB education to children from are inclusive and designed towards
risks and mitigates them to eliminate particularly focuses on improving of America filed claims in the United
which are pending (i.e. not resolved underprivileged sections. 10 Pudami sustainability. We involve the gram
environmental risks through Enterprise ‘core employability’ skills to ensure States District Court for the District of
to satisfaction� as on end of financial schools are educating over 4,103 panchayat or local government in the
Risk Management (ERM) initiative. that the youth is equipped with Connecticut against a number of
year. students. Out of these 4,103 students project development discussions.
appropriate knowledge and skills for pharmaceutical companies alleging
The environmental risks as identified are None. enrolled in FY2021, 1,942 students
his/her profession-of-choice and For education programs, we encourage conspiracies to fix prices and to allocate
reviewed by the risk management were reached through online classes.
help pursue their career. In FY2021, the participation of parents in the bids and customers from 2013 through at
committee at the board level. Kallam Anji Reddy Vidyalaya (KARV),
PRINCIPLE 7 we impacted 371 youth. school management committee (SMC) least 2016, with respect to two generic
a model Pudami School caters to
Also, in FY2021, we completed the Task meetings, in which even local leaders drugs. Initially, our U.S. subsidiaries were
POLICY ADVOCACY 2,178 students. Out of these • Grow PwD: Grow People with
Force on Climate-Related Financial participate, to instill ownership, and a not named as defendants. However, in
1. Is your company a member of any students, 1,742 students were Disability, a skill development
Disclosures (TCFD) assessment. TCFD mandal education officer (MEO) reviews April 2017, a total of 45 states, plus the
trade and chamber or association? If reached through online classes. programme, where differently abled
provides guidance on disclosure of youth are given training in market the school performance on a quarterly District of Columbia and the
Yes, name only those major ones that
climate change-related risks and • Kallam Anji Reddy Vocational Junior driven skills which enables them to basis. Youth participating in the Commonwealth of Puerto Rico, joined as
your business deals with:
opportunities, governance, as well as • Indian Pharmaceutical Alliance (IPA) College (KAR-VJR) was established gain a suitable employment vocational skills enhancing program, plaintiff s in this case (the “State AG
setting targets and mitigation measures. in 2003, trains tenth class passed opportunity. In FY2021, we pay a small percentage of the course Action”) which in August 2017, were
• The Confederation of Indian Industry
(CII) students in two-year vocational impacted 105 youth. fees. For health programs, local consolidated with the private plaintiff
We conducted the transition and
• Indian Drug Manufacturers’ courses. The college offers courses panchayat and villagers were involved class actions pending in the multi-
physical climate change risk assessment • Marking Integrated Transformation
Association (IDMA) such as computer science, computer right at the beginning. Villagers and district litigation (“MDL-2724”) in the
across the short, medium, and long-term for Resourceful Agriculture (MITRA):
• Bulk Drug Manufacturers graphics animation, accounting and local government authorities have given United States District Court for the
for our manufacturing locations, This programme assists farmers on
Association (BDMA) taxation and medical lab technician. space for running out patient (OP) Eastern District of Pennsylvania. On
business partner manufacturing technology and methodology in
• Federation of Telangana and Andhra The college’s strength in FY2021 was wards and beneficiaries, i.e. the October 31, 2017, the Attorneys General
locations as well as raw material and farming. This programme helps them
Pradesh Chambers of Commerce 705 students were enrolled, out of community members are given the for the 45 States, plus the District of
product logistics. Subsequently, enhance their income by increasing
and Industry (FTACCI) which 309 students were covered responsibility of running the OP and Columbia and the Commonwealth of
mitigation measures will be developed productivity. In FY2021, we reached
• Medicines for Europe through online classes. scheduling the patients. Patients are Puerto Rico, filed an amended complaint
for the identified risks and opportunities. out to 30,603 farmers.
• Federation of Indian Chambers of showing a positive attitude towards in the State AG Action in MDL-2724
• School Improvement Programme
4. Does the company have any project Commerce and Industry (FICCI) (upto minimal contribution sought from them which added our
(SIP) is implemented in 229
related to clean development for rendering medical services at their U.S. subsidiary, Dr. Reddy’s Laboratories,
mechanism? Also, if yes, whether
March 31, 2021) government schools covering 66,543 Through CHIP, in door steps. For other community Inc., as a defendant. Further, on May 10,
students, across seven districts of
any environment compliance report 2. Have you advocated/lobbied through
above associations for the Andhra Pradesh and Telangana. FY2021, we reached development initiatives as well, we 2019, the Attorneys General of forty-nine
is filed? engage the local authorities whose U.S. States, the Commonwealth of
No, we have not filed any project under advancement or improvement of Through SIP we provide remedial
learning, computer skills, science
out to a population active involvement encourages Puerto Rico and the District of
public good?
clean development mechanism.
We have advocated for policy and education through mobile science of 1.93 lakhs participation and ownership from the
community members.
Columbia, filed a complaint in the United
States District Court for the District of
5. Has the company undertaken any economic reforms for the public good. labs, basic amenities such as safe
Connecticut against 21 generic
other initiatives on clean water and sanitation. SIP also
2. Are the programmes/projects pharmaceutical companies (including
technology, energy efficiency,
renewable energy, etc.? PRINCIPLE 8
provides scholarships for meritorious
students to pursue higher education.
undertaken through in-house 30,603 our U.S. subsidiary) and 15 individual
team/own foundation/external defendants alleging that our U.S.
Yes, as a responsible corporate we have EQUITABLE DEVELOPMENT
Health initiatives NGO/government structures/any farmers reached subsidiary and the other named
undertaken many energy conservation 1. Does the company have
initiatives. In FY2021, we have specified
Our health initiatives include: other organization? through MITRA defendants engaged in a conspiracy to
The Community Health Intervention We engage with the community through fix prices and to allocate bids and
implemented 161 energy conservation programs/initiatives/projects in
Programme (CHIP) covers 145 villages our partners such as Dr. Reddy’s program customers in the United States in the
projects across various business units pursuit of the policy related to
of Srikakulam, and Vizianagaram Foundation, Naandi Foundation, NICE sale of the 116 named drugs. Our U.S.
and accrued savings of ₹ 154 million. Principle 8?
districts. This project was started in Foundation, Agastya International subsidiary is specifically named as a
We are focusing on specific CSR
The share of renewable energy in our partnership with the NICE foundation Foundation and other similar PRINCIPLE 9 defendant with respect to five generic
total energy consumption has been initiatives that support social
to provide primary and preventive care organizations. CUSTOMER VALUE drugs (ciproNoxacin HCL tablets,
increasing over the years. Solar energy development. The implementation of
at the doorstep, to a large segment of 1. What percentage of customer glimepiride tablets, oxaprozin tablets,
these programs is carried out through 3. Have you done any impact assessment
consumption for FY2021 is more than rural population that do not have complaints/consumer cases are paricalcitol and tizanidine), and is named
various partner organizations. We work of your initiative?
77 million kwh, increasing from 65.96 access to safe and reliable healthcare in pending as on the end of the financial as an alleged co-conspirator on an
primarily in the areas of education, We review our internal assessment
million kwh in FY2020. This renewable the region. In FY2021, we reached out year? alleged “overarching conspiracy” with
energy adoption has avoided carbon livelihood and health. systems and projects from time to time.
to a population of 1.93 lakhs. As on March 31, 2021, there were 255 respect to the other 13 generic drugs
emission by 54,309 tonnes of CO2-e in Each project has specific deliverables
complaints pending in India, 99 in named. We deny the claims asserted and
FY2021. We have also generated 92.54 against which it is measured.
Germany and 134 in the U.S. intend to vigorously defend against the
TJ of energy using biomass/rice husk claims asserted.
briquettes in FY2021, thus eliminating 4. What is your company’s direct 2. Does the company display product 4. Did your company carry out
GHG emission by 11,478 tonnes of CO2-e. contribution to community information on the product label, any consumer survey/consumer
Environmental risks as identified are reviewed development projects – Amount
in INR and the details of the
over and above what is mandated as satisfaction trends?
No
per local laws?
by the risk management committee at the board projects undertaken? Yes, for the new launches, we have
We contributed ₹ 36.08 crore for
level. community development.
complied with the labelling
requirements.

3 3
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

For Dr. Reddy’s, ‘Good Health Can’t Bringing

Wait’ requires us to meet five promises. expensive
medicines
within
reach.

Addressing
unmet patient
needs.

Driven by its core dictum of

‘Good Health Can’t Wait’
Dr. Reddy’s Laboratories Helping patients

Ltd. (‘Dr. Reddy’s’ or ‘the manage disease

better.

company’) is committed to
accelerating access to
affordable and innovative
medicines to help patients Working with

lead healthier lives, creating our partners to

help them
succeed.
healthy ecosystems and
strong communities.

MANAGEMENT
Enabling
and helping our
partners ensure that
our medicines are
available where

DISCUSSION
needed.

As an integrated global pharmaceutical enterprise, we operate across three core business segments:

AND ANALYSIS
Note
(1) FY2021 represents fiscal year 2020�21� i.e.� from April 1� 2020 to March �1� 2021� and analogously for
FY2020 and previously such labelled years. Global Generics (GG), Pharmaceutical Services and Proprietary Products (PP),
(2) Unless otherwise stated� financial data given in this Management Discussion and Analysis is based on the which includes branded and unbranded Active Ingredients (PSAI), which is mainly composed of the
company’s consolidated results prepared in accordance with International Financial Reporting Standards prescription medicine as well as over-the- comprising Active Pharmaceutical differentiated formulations business�
counter (OTC) pharmaceutical products. Ingredients (APIs) and Custom focusing on certain key medical needs.
(IFRS) as issued by the International Accounting Standards Board.
It also includes the biosimilars business. Pharmaceutical Services (CPS).

40 41
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

The key highlights of Dr. Reddy’s

consolidated performance COVID-19 related disruptions impacting EBITDA growth was, however, impacted on • Revenue from Russia was ₹ 15.8 number of casualties and suffering due to pharmaceutical market is expected to grow
are given below. the demand for certain sets of products, a higher base of FY2020, when we had billion, representing a year-on-year global lockdowns, delays in health in the range of 3% to 6% CAGR over the
the supply chain and operations. We rose recognized income on the sale of our decline of 6% due to a depreciation of screenings and treatments along with the next five years to reach US$ 1.6 trillion from
to the challenges and ensured minimal commercialized neurology products in the ruble compared to the Indian rupee. rise in cases of mental health disorders. US$ 1.1 trillion currently. In addition, the
CONSOLIDATED FINANCIAL impact to operations. We ensured the Proprietary Products (PP) in the US and Moreover, sales were subdued on account COVID-19 led to a disruption in medicine cumulative spend on COVID-19 vaccinations
RESULTS FOR FY2021 health and safety of our employees and selected territory rights. of an overall market slowdown. usage varying in both timing and magnitude is anticipated to be around US$ 157 billion
UNDER IFRS business partners. We continued in developed and pharmerging countries over the next five years. Much of this
• Revenue from other CIS countries and
innovating new solutions to operate under alike during the last year. These included growth in vaccine demand will be in the
A SNAPSHOT OF Romania was ₹ 7.4 billion, or an
the difficult circumstances. We worked significant stock-piling of over-the-counter pharmerging markets, being partially offset
annual growth of 15%.
REVENUES upon new avenues of growth such as PERFORMANCE chronic and mental health medicines during by a slower growth in the developed
development and launch of COVID-19 GLOBAL GENERICS (GG) • Revenue from Rest of the World the initial stages of the pandemic. economies.
₹ 189.7 billion 9% products portfolio and successfully Revenue from GG in FY2021 was (RoW) territories was ₹ 11.8 billion, or
a year- on-year growth of 25%.
Medicine usage was also impacted by
The US market is expected to grow in the
integrated the portfolio acquired from ₹ 154.4 billion, which represented an frequent and widespread global
range of 0% to 3% CAGR over the next five
Wockhardt for our India business. We were increase of 12% compared to the previous Revenue from India was ₹ 33.4 billion, lockdowns.
years, down from 3% CAGR in the past five.
GROSS PROFIT MARGIN able to grow businesses across all our year. This growth was largely attributable which represented a growth of 15% The pandemic also emphasized the value of Japan, the third largest global market,
geographies, viz. GG for North America, to impressive performances witnessed in
54.3% 50bps Europe, India, several emerging Europe, certain emerging markets,
compared to FY2020. This was primarily
attributable to contribution from
health infrastructure, medical research and
science; and prompted a renewed focus on
should see a decline in medicine spends as
a result of the continued biennial price cut
economies, and PSAI across many parts of contribution from portfolio acquired from acquired portfolio of products from public health institutions, epidemiology and policy, and policies to encourage a shift to
the world. Wockhardt for India business as well as Wockhardt and launch of new products racial and ethical disparities and inequalities generics for older medicines. The European
EBITDA Our focus on cost controls, productivity favorable forex rates. including those related to COVID-19. in health. It prompted extraordinary market should grow by US$ 35 billion in the
₹ 47.4 billion 2% improvements and on creating a leaner and Revenue from North America Generics During FY2021, we launched 20 new
brands in India.
responses from the healthcare industry, the next five years with a focus on generics and
more de-layered business model continued (NAG) was ₹ 70.5 billion, with a growth research community, public health biosimilars. Growth in pharmerging markets
from the previous year. This helped us to of 9% versus FY2020. This growth was administrators and governments to develop is expected to be led by China, and might
OPERATING PROFIT become more efficient and also improve supported by the launch of 27 new new therapeutics, repurpose existing drugs, accelerate post-COVID-19.
our profits. products. Of these, the major new
PHARMACEUTICAL SERVICES and to develop new vaccines at speeds that
₹ 24.3 billion 52%
Improvements in revenue and EBITDA in launches were CiproNoxacin AND ACTIVE INGREDIENTS have never been seen before.
Table 1 gives the historical and forecasted
pharmaceuticals growth outlook for the
FY2021 were mainly due to the following Dexamethasone, OTC Diclofenac, (PSAI) Relentless efforts and ingenuity of scientists major countries of the world.
Sapropterin, Abiraterone (Canada) and Revenues from PSAI stood at ₹ 32 billion,
factors. and the pharmaceutical industry led to
PROFIT BEFORE TAXES Colchicine tablets. It should be noted that or a growth of 24% versus FY2020 mainly cutting the traditional timeline for the
The number of new active substances (NAS)
Growth in branded generics markets: launches are projected to continue with an
₹ 26.4 billion 46% We continued our growth momentum
while there was a healthy growth in the
sales volumes of our existing products and
driven by traction in base business, services
business growth and favorable forex
development of new vaccines from four to
average of 54 to 63 per year over the next
12 years on an average to just seven
across the key branded generics markets of favorable forex movement, these were movement. During the year, we filed 149 five years.
months. Novel methods of R&D were
India, CIS countries, China and some other offset by pricing pressures on some of our Drug Master Files (DMFs) worldwide, created along with active cross-border Spend on speciality medicines is expected
PROFIT AFTER TAXES regions. This was due to improved base key products, such as Buprenorphine and including 14 filings in the US. collaborations. to be nearly 60% in developed markets and
business as well as the launch of new Naloxone sublingual films, Atorvastatin,
₹ 17.2 billion 12% products. We also acquired a select Metoprolol and Liposomal Doxorubicin.
These have set new standards and shorter
timeframes for discovery and innovation for
50% globally in the next five years, with the
older and traditional therapies becoming
portfolio from Wockhardt for the India PROPRIETARY PRODUCTS (PP) other life-threatening diseases in the future. progressively less expensive over time.
In FY2021, we filed 20 new Abbreviated
business. Growth in Russia, however, was Revenue from PP was ₹ 0.5 billion. This
DILUTED EARNINGS PER New Drug Applications (ANDAs) and one
hindered due to an overall market translated to a decline of 93% following the The pandemic also proved to be a fuel for Oncology and immunology, the two largest
SHARE New Drug Application (NDA) under the
slowdown. divestment of commercialized products digitally-driven therapeutic change — therapy areas, should grow 9% to 12%
section 505(b)(2) with the US Food and
whether these be remote and virtual patient- CAGR through 2025, led by significant
₹ 103.65 12% Growth in the PSAI business: PSAI growth Drug Administration (USFDA). As on
from our neurology franchise in FY2020.
doctor engagements through telemedicine increase in new treatments and medicine
was driven by base business traction in March 31, 2021, we had 95 generic filings
and tele-health, digitized clinical trials use. Oncology is forecasted to add 100 new
API, custom pharmaceutical services and a pending approval from the USFDA. These GLOBAL PHARMACEUTICAL leveraging artificial intelligence and the treatments over the next five years,
favorable forex movement. comprise 92 ANDAs and three New Drug 1
MARKET OUTLOOK introduction of new disruptive business contributing to an increased spend in excess
Growth over previous year Applications (NDAs) filed under the
Continued growth momentum in the The last year marked one of the most models. Indeed, COVID-19 has become the of US$ 100 billion.
Section 505(b)(2) route of the US Federal
Europe generics business: FY2021 saw challenging year for all of humanity with the most significant trigger to force the major
Decline over previous year Food, Drug and Cosmetics Act. Of these,
significant growth in the existing COVID-19 pandemic severely affecting the players in the industry to significantly
47 are Para IV applications and we believe
geographies as well as newer markets in global population. The pandemic continues expand their digital capabilities well
that 23 of these have ‘First to File’ status.
Europe — driven by expansion of the base unabated with a severe second wave beyond their normal annual plans
business coupled with new product Revenue from Europe was ₹ 15.4 billion, currently engulfing India, having previously Equally, none can deny the major
Through our portfolio of products and
services, we operate in multiple therapeutic
launches. representing a growth of 32% compared to
FY2020. This was primarily due to
wreaked havoc on the US and certain key disruptions, especially ones relating to Globally, the Oncology
Moving ahead on our journey of cost European nations. As on May 14, 2021, the
areas. Of these, the major ones are control: We continued making solid expansion of the base business and new virus has infected over 160 million and has
manufacturing and the supply chain.
market is forecasted
(i) gastrointestinal, (ii) oncology,
(iii) cardiovascular, (iv) pain management,
progress on the journey that began in product launches. Growth was also aided
by the scaling up of our businesses in
claimed the lives of 3.4 million people While the landscape of the pharmaceutical
industry was radically altered by the
to add 100 new
FY2019 to trim cost structures through worldwide. The impact of the pandemic has
(v)central nervous system (CNS), enhanced productivity and elimination of newer markets of Italy, Spain and France, also been severe in terms of the indirect pandemic, probably more than any other treatments over the
(vi) respiratory, and (vii) anti-infective. waste across our businesses. The initiatives as well as favorable forex movement. sector, the industry will surely take stock
of how it navigated the pandemic. And, in
next five years,
We are present in several countries across that were put in place to drive cost
efficiencies and productivity improvement
Revenue from Emerging Markets was
₹ 35.1 billion, or a growth of 7% compared doing so, it will have to be prepared for contributing to an
similar sudden shifts and disruptions in
operations and regulations in the longer
term.
the globe, with the key geographies being
the US, Europe, India, Russia,
across manufacturing, procurement, R&D
expenditures and marketing spends played
to FY2020. This was driven by an
improvement in our base business Adoption of novel treatments, offset by increased spend in
stiff
Commonwealth of Independent States (CIS)
countries, China and other markets.
a significant part in improving the financial performance, new product launches and
1
The outlook and the key trends discussed in this section
are primarily from ‘The New Decade of Health and
competition from generics and biosimilars excess of
The FY2021 has been a year with an
performance of the company. While we
focused on productivity, we are also
scale up of business in some of our new
markets.
Science’ & ‘Global Medicine Spending and Usage Trends
outlook to 2025’ by IQVIA Institute and from various other
and patent lifecycles, will continue to
inNuence medicine spending and growth in US$ 100 billion.
4 4
 publicly available sources.
unprecedented set of challenges due to making investments to build capabilities, the developed markets. The global
brands and product pipeline.

4 4
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

providers, to expand their aseptic and — such as appointing chief digital major products. However, this impact was EMERGING MARKETS
TABLE 1 | PHARMACEUTICAL GROWTH FORECAST FOR HPAPI capacity to meet higher officers to their boards and implementing significantly offset by an increase in Revenue from Emerging Markets for
MAJOR COUNTRIES customer demand. a data-first approach in their operations. volumes for some of our base products, FY2021 was ₹ 35.1 billion, representing a
REGION 2016-2020 CAGR 2021-2025 CAGR The sector recognized that the digital and contribution from new product growth of 7% compared to the previous
• Greater focus on R&D value
revolution was here to stay and, in a launches — the important ones being year. Significant part of the growth has
3% to 6% leveraging artificial intelligence (AI) for
Global 4.6% data- rich industry, offered considerable CiproNoxacin Dexamethasone, OTC
improved efficiency: With an increased been on account of increased revenues
focus on
Developed 3.8% 1.5% to 4.5% benefits. During the pandemic, many of Diclofenac, Sapropterin, Abiraterone from our base business, new product
the value of medications, pharmaceutical
the industry’s core activities moved to the (Canada) and Colchicine tablets. Growth launches and scaling up of business in CIS
Top 10 Developed 3.8% 1.5% to 4.5% companies are increasingly examining
virtual sphere. This has significantly was further aided by the strengthening of countries (including Romania) and Rest of
their R&D practices to ensure these are
United States 4.2% 2% to 5% refined and sharply focused. The accelerated digital adaptations, both the US dollar against Indian rupee. Some the World markets.
estimated R&D cost of each USFDA within the pharmaceutical industry and in key developments were:
Japan -0.2% -2% to 1% Revenue from Russia for FY2021 was ₹ 15.8
approved drug is around US$ 2.6 billion. the healthcare systems it serves.
EU-5 4.4% 2% to 5% • Launched CiproNoxacin billion, representing a 6% decline over the
The use of AI in drug discovery can • Increased automation in the Dexamethasone Otic suspension, a
Germany 5.3% 3.5% to 6.5% previous year mainly constrained by an
expedite the overall R&D process by pharmaceutical supply chain: therapeutic equivalent generic version overall market slowdown and adverse forex
France 2.4% 1% to 4% improving success rates by 8% to 10%, Innovation in technology is expected to ®
of Ciprodex (ciproNoxacin 0.3% and movement. The growth was 1% in terms of
resulting in savings worth billions of impact not just drug development but dexamethasone 0.1%), used in treatment the local currency (ruble).
Italy 4.2% 2% to 5% dollars. AI can be also used to find also the supply chain, ranging from of acute otitis.
United Kingdom 5.3% 2.5% to 5.5% candidate molecules for drugs, develop speed to safety to manpower. In Russia, our key products — such as Nise,
compounds from scratch, and aid the • Launched OTC Diclofenac Sodium Omez, Nasivin, Cetrine and Ibuclin —
4.6% 1.5% to 4.5% Automation in pharmaceutical
Spain process of synthesizing the molecules topical gel, the store brand version of
manufacturing can help build more were ranked among the top 200 best-
Canada 4.8% 2% to 5% with better efficacy. ®
Voltaren , used in treatment of arthritic selling formulation brands, as per IQVIA in
resilient, Nexible and supply cost-
• Renewed focus on mergers & acquisitions effective chains. These can help make pain. its report for the 12-month period ended
South Korea 6.8% 4.5% to 7.5%
(M&As): 2020 was slow for M&As in the the batch unit operations more efficient, • Launched the generic version of March 31, 2021.
Australia 3.3% 1% to 4% pharmaceutical industry, thanks to the reconfigurable and streamlined, and Sapropterin Dihydrochloride tablets, Revenue from CIS countries (including
Other Developed 4.2% 2.5% to 5.5% economic instability brought about by thus reduce the production-to-market used in treatment of blood Romania) was ₹ 7.4 billion, representing 15%
COVID-19. The year saw nearly US$ 184 timeline by allowing the faster technical
Pharmerging 7.4% 7% to 10% phenylalanine levels. growth over the previous year. The growth
billion in M&A deals, which was one of transfer of data and greater versatility of
• Launched Abiraterone Acetate tablets was led by Ukraine, Kazak, Uzbek and
China 4.9% 4.5% to 7.5% the lowest in almost a decade. Instead of equipment throughout the API network.
M&As, pharmaceutical companies USP, 250 mg, a therapeutic equivalent Romania including certain tender sales.
Brazil 10.7% 7.5% to 10.5% It may also help to get better insights
focused on establishing partnerships to and recommendations, whether these
®
generic version of Zytiga , used in In the current fiscal, Olanzapine sales
Russia 10.8% 11% to 14% help fight the pandemic and develop treatment of prostate cancer. continue to drive our growth momentum in
be commercial, marketing or clinical
India 9.5% 7.5% to 10.5% vaccines. They not only partnered China. We were the first Indian company
trials data. • Launched Colchicine tablets USP, a
together but also established cross- to win a national tender in China in FY2020.
Other Pharmerging 9.6% 8.5% to 11.5% therapeutic equivalent generic version
industry partnerships with academic and • Expansion of global vaccine ® Revenue from our Rest of the World markets
of Colcrys , used in treatment of
Lower income countries 3.9% 3% to 6% healthcare establishments. However, in manufacturing capabilities: Production
familial Mediterranean fever (FMF). (which includes Brazil, China, South Africa,
2021, the focus should shift back to of vaccines has traditionally been done
traditional level of M&A deals. According by a handful of companies. However, • Gained market share in certain key and certain other markets) was ₹ 11.8 billion,

While the future of medicine use will be to a report by Price Waterhouse given the pandemic, individual products, such as Omeprazole DR and representing 25% growth over the previous
serve a smaller number of patients. year. This was primarily led by scaling up in
inNuenced by a number of complex factors Coopers, M&A deals in 2021 are countries want a certain level of Metoprolol ER.
Hence, a challenge associated with this the markets such as China, Vietnam,
which shall emerge after the pandemic predicted to be about US$ 250-275 autonomy. This has led to expansion in
model will be to raise profits through fast • Filed 20 new ANDAs and one NDA Myanmar, and Jamaica.
finally peters out, there is expected to be a billion. If that were so, it will mark a vaccine production capacities in Asia
production to accommodate different under section 505(b)(2), and these
renewed focus on (i) improved and efficient return to normal M&A activity for the and the Middle East. Biologics and Our focus is to improve market share in
demands. industry. comprises some complex products and
manufacturing technologies; (ii) augmenting vaccine manufacturing capacity the chosen therapy areas through growth
• Emergence of new API competitors and are across different dosage forms.
pharmaceutical supply-chains; (iii) novel • Move towards patient-centric care model: needed globally for COVID-19 vaccines in the existing products as well as new
methods of drug development; and increase in high potency API (HPAPI) and treatments is expected to take a Our current priority includes accelerating
The pandemic has driven the product launches.
(iv) increased adoption of digital tools. capacity: The competition for active significant percentage of the overall new product launches and increasing the
pharmaceutical industry towards a more
pharmaceutical ingredients (APIs) is available capacity. This growth in market share of existing products. The Our strategy for the Emerging Markets is
We now share with you some key trends patient-centered care model. This
expected to increase as more programs demand for vaccine manufacturing strategy is to significantly expand our to build a healthy pipeline of portfolio
that are likely to emerge. requires deep understanding of a
advance into late-stage clinical trials. capacity that we have seen in 2020 will portfolio and ensure right cost structures including differentiated and oncology
patient’s health condition and needs in
• Smaller-scale manufacturing with Nexible Strengthening of supply chains will order to deliver more efficient treatment continue into 2021 and perhaps for our products to be able to compete in products, and expansion of biosimilars
production capabilities for improved continue to become increasingly and ensure better availability of such beyond. this highly competitive market. across our markets. We will focus on
efficiency: Novel technologies such as important as companies start to think treatments. The emphasis on treating scaling up in our major markets, which
strategically to develop secondary We will continue to focus on complex include Russia, China, Brazil, South
cell and gene therapy will push the patients with more effective drugs is DR. REDDY’S MARKET formulations — primarily injectables and
industry towards rapidly deployable sourcing plans and carry significant encouraging innovators at early stages of Africa and Ukraine.
inventory to minimize risks of a stock-out.
PERFORMANCE, FY2021 oral solid dosage forms, as well as OTC
facilities, with smaller scale, modular and drug production to incorporate patient-
Most likely, this will lead to the NORTH AMERICA GENERICS brands in the medium term, and 505(b)(2)
centered insights. Sounder targeting of
portable plants being deployed. This will
raise speed to market, diversify the emergence of several new competitors in patient’s needs will help the industry (NAG) generics, controlled substances under Revenue from Emerging
class II, and non-substitutable generics in
manufacturing footprint globally and the API space. An area of growth in the achieve better clinical results and ensure
that pharmaceutical companies produce
NAG is Dr. Reddy’s largest market. In
the longer term. Markets for FY2021 was
increase the need for real-time supply industry is the high-potency active FY2021, it contributed to around 46% of the
chain management. The pharmaceutical pharmaceutical ingredient (HPAPI) space. more effective medicines that improve
their therapeutic value.
company’s GG sales, and 37% of overall ₹ 35.1 billion
industry will also utilize such capability The HPAPI market alone is expected to sales.
to cater to changing market dynamics grow to US$ 33 billion by 2025, up from • Acceleration in digital transformation:
— such as small batches of precision US$ 16 billion in 2016. Importance of Digital transformation in the
Revenue from the region for FY2021 was
₹ 70.5 billion (US$ 948 million),
NAG revenue for EUROPE
medicine — unlike what is needed for these HPAPIs lies in creating effective pharmaceutical industry was already in Revenue from Europe in FY2021 was
representing a growth of 9% over the FY2021 was
mass production of pharmaceuticals. On patient-centric treatments that require
lesser doses to achieve the same
progress before the pandemic. COVID-19
gave it an impetus like never before.
previous
continued year.
to seeEven so, the price
significant year erosion ₹ 70.5 billion ₹ 15.4 billion, representing a growth of
32% vis-a-vis the previous year. This
Several pharmaceutical companies took
the Nip side, when a smaller number of
medications are produced, these will therapeutic impact. We expect more API manufacturers, including contract service

4 4
 many positive steps towards digitization due to increased competition across growth was due to increased revenues
in
some
our base markets of Germany and the
UK,

4 4
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

and was aided by expansion in the newer

This business primarily comprises of APIs We remain fully committed to following SELLING, GENERAL AND account of increased head count and R&D EXPENSES
markets of Italy, France and Spain. The
and pharmaceutical services. We believe high standards of quality and strive towards annual increments; and increases
increase in revenues was propelled by high ADMINISTRATIVE EXPENSES R&D expenses for FY2021 were ₹ 16,541
that with recent market developments, further strengthening of our quality pertaining to legal and professional million, or 8.7% of revenue, versus 8.8%
volume growth, new product launches (SG&A)
there will be a good opportunity for us to management systems and processes for charges. The increase was offset by lower in FY2020. The R&D spends in FY2021
across all our markets and favorable forex SG&A expenses increased by 9% to
expand our API business. We are also sustainability. Our plans to enhance quality marketing and travel expenses with increased by 7% over FY2020, due to an
movement. ₹ 54,650 million in FY2021. This was
focusing on expanding our services business management systems and operations restricted activities due to COVID-19. increase in the development activities
Currently, Europe comprises 10% of our and expect it to be a growth driver. With include improvements in rigor of largely attributable to increase in logistics SG&A accounted for 28.8% of sales in pertaining to generics segment,
global generics sales. In the medium to this intent, Aurigene Pharmaceutical investigations and document control costs primarily due to COVID-19 situation; FY2021 versus 28.7% in FY2020 — or was including COVID-19 related products
long-term, we expect it to grow by Services Limited (APSL), a newly formed systems, standardization of instrument increase in personnel costs primarily on in-line with last year.
development.
leveraging our in-house portfolio, seeking company, has been carved out to focus on calibrations, strengthening controls with
in-licensing opportunities, further scaling contract research, development and respect to information technology as well as
up business in new markets including and manufacturing operations (CDMO). shop Noor training programs, and TABLE 2 | CONSOLIDATED REVENUE MIX BY SEGMENT (MILLION)
beyond Italy, France and Spain. Our strategy of building a sustainable and simplifying and standardizing standard FY2021 FY2020 Growth
operating procedures and batch records at PARTICULARS
growing business involves new product (US$) (₹) % (US$) (₹) % %
launches and ramping up of base businesses the shop Noor. 2�11
Global Generics 1 41�54�40 81�
4 81�88 31�38�12 79�1 12

Revenue from in key geographies. We will also leverage We have initiated additional operational
North America 70�494 64�659 9
Europe for FY2021 our relationships with key customers by
supplying materials that have value addition
improvements such as shop Noor
supervision and process walks, engineering, Europe
(1)
15�404 11�707 32
was instead being ‘plain-vanilla’ APIs. We aim to implementation of electronic batch India 33�419 28�946 15
₹ 15.4 billion records
be a partner of choice for global to eliminate manual errors, and focus on
generics robustness of processes. We are fully Emerging Markets
(2)
35�087 32�811 7
manufacturers and achieve global
INDIA leadership through costs and service. committed to produce safe and efficacious Pharmaceutical Services and Active
products for our patients. 437 31�982 1б�8 352 25�747 14�8 24
Revenue from India in FY2021 was Ingredients (PSAI)
₹ 33.4 billion, or a growth of 15%
compared to previous year. According to Revenue from PSAI Proprietary Products & Others 4б 3�33б 1�8 147 10�730 б�1 (б9)
FINANCIALS
the IQVIA in its report for the 12-month for FY2021 was Table 2 gives the abridged IFRS Total 2�594 1�89�722 100 2�387 1�74�б00 100 9
period ended March 31, 2021, our growth
₹ 32 billion
(1)
Europe includes Germany, the UK and out-licensing sales business, Italy, France and Spain.
has been 3.1%. Our market rank as per consolidated revenue performance of (2)
Emerging markets refer to Russia, other CIS countries, Romania and Rest of the World markets.
MAT (March 2021) improved to 11, from 13 Dr. Reddy’s for FY2021 compared to
in the last year. Our growth in this market FY2020. Table 3 gives the consolidated
has been on account of a select portfolio PROPRIETARY PRODUCTS (PP) income statement.
acquired from Wockhardt and launch of The PP business recorded revenue of ₹ 0.5
new products. billion in FY2021, a decline of 93% following
the divestment of two brands of our REVENUE
During the year, we launched 20 brands in neurology franchise in FY2020. Total revenue grew by 9% to ₹ 189,772
® ®
India, including Invista , Redyx™, Avigan Going forward, our strategy is to focus on million in FY2021. The growth was primarily
which aided growth. Thirteen of our brands an in-house pipeline in a well calibrated aided by increase in volume and new
® ® ®
— Omez , Omez -D, Atarax , Redyx™, Bro- manner which strives to achieve an optimal product launches across our businesses
® ® ®
Zedex , Razo-D , Ketorol™, Nise , Stamlo ,
®
and benefits due to depreciation of Rupee
balance between risks and costs. At an
® ®
Zedex , Practin , Mintop™ and Econorm —
® against the US Dollar, partially offset by
overall level, this aligns well with our
are among the top 300 brands of the Indian price erosion in our GG segment’s North
renewed strategy to enable us to achieve
pharmaceuticals market. America (the US and Canada), Europe and
self-sustainability and profitable growth for
certain other emerging markets. FY2020
In the near term, we will continue to drive each of our businesses.
sales included the sale of the US and select
productivity improvement and focus on our territory rights for two of our neurology
core therapeutic areas and big brands. We brands pertaining to PP segment.
AURIGENE DISCOVERY
also have a wide range of COVID-19
portfolio drugs including a vaccine which TECHNOLOGIES LIMITED (ADTL)
may contribute to growth in the near to ADTL is our wholly-owned subsidiary and is GROSS PROFIT
medium term. In the medium- to long- a clinical stage biotech company Gross profit increased by 10% to ₹ 103,077
term, our strategy is to build a healthy committed to bringing novel therapeutics million in FY2021. This resulted in a gross
pipeline of for the

4 4
 TABLE 3 | CONSOLIDATED INCOME STATEMENT (MILLION)

FY2021 FY2020 Growth

PARTICULARS
(US$) (₹) % (US$) (₹) % %
Revenues 2�594 1�89�722 100�0 2�387 1�74�600 100�0 9
Cost of Revenues 1�185 86�645 45�7 1�102 80�591 46�2 8
Gross Profit 1�409 1�03�077 54�3 1�285 94�009 53�8 10
Operating Expenses
Selling, General & Administrative expenses 747 54�650 28�8 685 50�129 28�7 9
Research and Development expenses 226 16�541 8�7 211 15�410 8�8 7
Impairment of non-current assets 117 8�588 4�5 229 16�767 9�6 (49)
Other operating (income) (13) (982) (0�5) (59) (4�290) (2�5) (77)
Results from operating activities 332 24�280 12�8 219 15�993 9�2 52
Finance (income), net (23) (1�653) (0�9) (20) (1�478) (0�8) 12
Share of (profit) of equity accounted
(7) (480) (0�3) (8) (561) (0�3) (14)
investees, net of income tax
differentiated products in relevant therapies treatment of cancer and inNammation. It profit margin of 54.3% in FY2021 � Profit before income 361 26�413 13� 247 18�03 10� 46
including biosimilars, and expand our recorded revenue of ₹ 2.8 billion in representing an increase of 50 basis
125 9�175 9
presence in new areas such as FY2021, or a growth of 1%. It is reported points compared to FY2020. The gross tax Income tax expense (20) 2 3 (726)
nutraceuticals. 4�8
as part of our ‘Others’ segment. profit margin for GG was 59.0%. The GG Profit for the period 236 17�238 267 (1�466) (0�8) (12)
gross profit margin was largely benefited Diluted Earnings Per Share (EPS) 1�4 103�6 9�1 1�6 (12)
2 5 1 19�49 11�
from
8 2
117�4
0
USFDA OBSERVATIONS: AN cost optimization initiatives taken by the
Revenue from company, favorable product mix and the Note: The conversion rate is considered as US$ 1 = ₹ 73.14

India for FY2021 UPDATE

Our
the facilities are fully compliant with
benefit from depreciation of rupee against
the US Dollar, which was partly offset
was with
₹ 33.4 billion USFDA regulations. Currently, the status for price erosion in the US, Europe and certain
all our facilities is either ‘NAI’, which means emerging markets as well as reduction in

‘No Action Initiated’ or ‘VAI’ which means export benefits. For the PSAI business, the
PSAI
The PSAI business recorded revenues of ‘Voluntary Action Initiated’. The warning gross profit margin was 29.5%. PSAI’s gross Gross profit increased by 10� to ₹ 103,077 million.
profit margin improved primarily on
₹32 billion in FY2021, representing a
24%
letter which was issued to us in November
2015 was closed in August 2020 after account of manufacturing cost leverage, An increase of 50 basis points compared to FY2020.
growth over the previous year. USFDA ascertained that we have addressed productivity initiatives taken by the
In FY2021 we filed 149 drug master files the cited violations and deviations. company and the benefit from depreciation
(DMFs) globally, of which 14 were in the of rupee against the US Dollar, which was
US. partly offset with price erosion and
reduction in export benefits.

4 4
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

IMPAIRMENT OF INTANGIBLES companies. In FY2021, the net profit after and other assurance teams to identify and • An additional insurance coverage for • Clarifying success in terms of outcomes located in Baddi. During these times, we
In FY2021, there has been an impairment tax was impacted largely by de- mitigate risks of business units, including COVID-19 which covers hospitalization and behaviors aligned to the organization focused on virtual on-boarding, training and
charge of ₹ 8,542 million which pertains to recognition of deferred tax asset due to risk relating to cyber security. and home quarantine expenses was goals. induction. Cultural assimilation sessions
charges of: non-availability of depreciation on goodwill extended for employees and their focused on people and organization
Our ERM function focuses on identification • Frequent check-in and Nexibility to
• ₹ 3,180 million for the product Ethinyl pursuant to an amendment to the Income of key business, and operational and dependents in India. Employees have also processes were conducted by leaders to
change the goals anytime.
Estradiol/Ethenogestral vaginal ring Tax Act. strategic risks. These are carried out been provided a provision of additional enable seamless integration between teams.
®
(generic equivalent to Nuvaring ). During through structured interviews, on-call COVID-19 leave. • Continuous, real time feedback
We continue to strengthen our talent
the year, there were significant changes discussions, and review of incidents. — moving away from assessments
LIQUIDITY AND CAPITAL • Support mechanisms to enhance work processes through cadre and capability
to the market for the product — to development.
Risks are aggregated at the unit, function from home experience like ergonomic building interventions. Significant work was
including the launch by a competitor of a RESOURCES and organization levels and are categorized infrastructure and network support • Clear feedback on performance against done in strengthening the capability
generic version of the product in January The data are given in Tables 4 and 5. by risk groups. Our response framework through mobile data plans were provided goals and behaviors demonstrated building agenda in the organization.
2021, thereby reducing the overall Cash generated from operating activities in categorizes these risks into (i) internal and work from home guidelines were Employees were assessed against functional
potential of future cash Nows for us. FY2021 was ₹ 35,703 million. Investing (preventable), (ii) internal (strategic) and Digitization of the people processes is a key
shared. and behavioral skills required for them to be
activities net outNow amounting to ₹ (iii) external risks. The finance, investment focus area. We have digitized processes
• ₹ 1,587 million for the product A combination of ambiguity in the external more effective in their roles. As part of
22,660 million in FY2021 includes net and risk management (FIRM) council is a across the employee lifecycle which
Saxagliptin/Metformin (generic version environment with the new reality of remote developing future ready talent, strategic
investment in property, plant, equipment management level committee that helps include joining assistance, on-boarding,
®
working, virtual collaboration and interventions have been designed in areas
of Kombiglyze -XR) and Phentermine and intangibles to build capacity and the ERM function to prioritize organization- internal hiring, employee referrals, learning
wide risks and steer mitigation efforts in unsupervised workdays has become the of digital and analytics. Learning journeys
and Topiramate (generic version of capabilities for future business growth. and compensation processes. This has
®
line with our risk appetite. new normal. We have relooked at our focused on competency building across
Qsymia ). During the year, there has been Cash outNow from financing activities was resulted in reducing turn-around times and
people processes with that lens. In doing so, specific cohorts were rolled out —
a significant decrease in the market ₹ 298 million. Mitigation work carried out by the ERM enhanced employee experience.
we have revamped our performance examples being in marketing and business
potential of these products, primarily Closing cash and cash equivalents as on team is periodically reviewed, and progress
process to help employees work in this new In the new normal, there is also a need to development. We also invested in
due to higher than expected value March 31, 2021 was ₹ 14,820 million. on key risks is discussed with the FIRM
reality and pursue individual and gauge employee engagement in real time. strengthening our learning resources to be
erosion. council, our senior management, as well as
organizational priorities. The new To enable this, we launched ‘Heartbeat’ — more contemporary and set up a digital
®
• ₹ 3,291 million for the product Xeglyze . at the risk management committee of the
performance process has been developed our internal engagement platform that infrastructure in the form of a Learning
DEBT-EQUITY board of directors. These include (i)
In view of the specific triggers measures engagement levels on an Experience Platform.
In FY2021, total borrowings, including the updates on the progress of mitigation of with the following principles in mind:
occurring in the year with respect to key risks
the Xeglyze
® current and non-current portion, increased
by ₹ 8,288 million. As on March 31, 2021 the
and (ii) specific risk-related initiatives everyday basis across different dimensions.
forming part of the company's company’s debt-to-equity ratio was 0.16 To promote internal talent mobility, we
Proprietary Products segment, the carried out during the year. Findings from the first cycle of Heartbeat launched ‘growth bridges’ that provide
as against 0.14 on March 31, 2020. The net
indicated that 92% of employees were ready
company determined that there was a debt-to-equity position was at (0.04) During FY2021, risk mitigation efforts We revamped our to put in discretionary effort for the
employees structured assignments and
decrease in the market potential of this included review of cyber security, ethics experiences equipping them to take on
product.
versus (0.03) last year. Table 6 gives the
and compliance program across the performance process organization and 82% would recommend
vertical and lateral growth opportunities.
data. Dr. Reddy’s as a great place to work. 87%
• ₹ 484 million on other products of
company, monitoring of environmental
including climate change related risks and
to help employees work to 89% valued the employee wellness, Diversity and inclusion continues to remain
global generics segment, as the
ENTERPRISE-WIDE RISK reviews of other operating risk in this new reality and safety and respect that the organization
provided.
important in the organizational agenda.
‘Chrysalis’, our Nagship leadership
company determined that there was a exposures.
decrease in the market potential of MANAGEMENT (ERM) pursue individual and With the acquisition of select business of development program, has been launched
these products. Our ERM function operates with the
following objectives: HUMAN RESOURCES (HR) organizational priorities. Wockhardt Limited, we successfully for women in middle management to
integrated the related sales and marketing
With the pandemic in FY2021, the primary prepare them for senior leadership roles.
NET FINANCE INCOME • Proactively identify and highlight risks teams, as well as the manufacturing plant
to objective was to facilitate health and safety of
The net finance income was ₹ 1,653 our employees and their families while ensuring
relevant stakeholders;
million in FY2021 versus ₹ 1,478 million in that we continue supplying medicines across
• Facilitate discussions around
FY2020. the world. A number of interventions and TABLE 5 | CONSOLIDATED WORKING CAPITAL (₹ MILLION)
risk prioritization and mitigation;
• Provide a framework to assess appetite; support mechanisms were put in place to
AS ON AS ON
• Develop systems to warn when transition to remote working and also safeguard PARTICULARS CHANGE
NET PROFIT the well-being of those employees coming to
MARCH 31, 2021 MARCH 31, 2020
Net profit decreαsed by 12� to ₹ 17,238 the appetite is being breached;
sites. Some of these were: Trade Receivables (A) 49�641 50�278 (637)
million in FY2021. This represents a PAT and
• Provide an analysis of residual risk. • A well-being and support plan was launched Inventories (B) 45�412 35�066 10�346
margin of 9.1% of revenues versus 11.2% in
FY2020. In FY2020, the net profit after tax The ERM team connects with our business comprising tele-consulting, helplines, 24x7 Trade Payables (C) 23�744 16�659 7�085
was benefitted largely due to recognition units and functions, which are the unlimited access to certified clinical Working Capital (A+B-C) 71�309 б8�б85 2�б24
of a deferred tax asset related to the primary sources for risk identification. It psychologists through an online platform and
Other Current Assets (D) 53�196 45�026 8�170
also monitors external trends on liabilities a home isolation program. Dedicated separate
Minimum Alternate Tax (“MAT”) credits Total Current Assets (A+B+D) 1�48�249 1�30�370 17�879
and risks reported by peers in the COVID-19 care facilities were launched for
and planned restructuring activity between
industry. The team collaborates with the employees and dependents across three Short & Long-term loans and borrowings, current portion (E) 24�000 20�707 3�293
the group
compliance, internal audit, information locations to provide pre-hospitalization care Other Current Liabilities (F) 35�647 35�448 199
TABLE 4 | CONSOLIDATED CASH security,
FLOW safetyIFRS
AS PER (₹ MILLION) amidst the dire state of uncertainty in the
Total Current Liabilities (C+E+F) 83�391 72�814 10�577
external environment.
PARTICULARS FY2021 FY2020
For employees coming on-site in manufacturing
Opening Cash and Cash Equivalents 1�962 2�228 and R&D,
• stringent social distancing and safety TABLE 6 | DEBT AND EQUITY POSITION (₹ MILLION)
measures were deployed in the work locations,
Cash Nows from: transport AS ON AS ON
PARTICULARS CHANGE
Total Shareholder’s Equity MARCH 31, 2021
1�73�062 MARCH1�54�98
31, 2020
(a) operating activities 35�703 29�841 facilities and cafeterias. Other measures 22�011
included multiple stages of 8
(b) investing activities (22�660) (4�923) Long-term debt (current portion) 864
disinfection, provision of personal 4�266
(c) financing activities (298) (25�159) Long-term debt (non-current 6�299
protective equipment and automating 1�304
actions that require manual contact. portion) Short-term borrowings 23�136
Effect of exchange rate changes 113 (25) 16�441
Daily hardship
allowance was also provided. Total Debt 30�299
Closing Cash and Cash Equivalents 14�820 1�962
4 4
 18�074
(3�402) 4�995
6�695
8�288

4 4
Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

For the fourth year in a row, we have been

per pack costs. Higher productivity is also • 2-deoxy-D-glucose (2DG™): The 2-DG through: (i) investments in digitalization; CAUTIONARY STATEMENT various market risks. By their nature, these
featured in the 2021 Bloomberg Gender
enabled by scaling up of Robotic Process has been developed by Defence (ii) development of complex products and The management of Dr. Reddy’s has expectations and projections are only
Equality Index for our commitment to
st Automation (RPAs) as well as digitalized Research and Development biosimilars; and (iii) strengthening sales and prepared and is responsible for the financial estimates and could be materially different
gender equality. We also won the 1 Runner processes with automated incident tracking Organization (DRDO), in collaboration marketing activities in branded markets. statements that appear in this report. These from actual results in the future. Readers are
up position in the ‘Leadership’ category and near zero manual errors. with These initiatives will continue in FY2022, as are in conformity with International cautioned not to place undue reliance on
(individual) in UN WEP awards. Dr. Reddy’s. The drug received
Market facing digital transformations are well, and thus provide necessary impetus to Financial Reporting Standards (IFRS), as these forward-looking statements, which
emergency use as adjunct therapy our performance in future years. reNect management’s analysis and
focused on improving customer and patient issued by the International Accounting
DIGITAL TRANSFORMATION engagement. We had invested in Omni-
for hospitalized moderate to severe
Standards Board, and accounting principles assumptions only as of the date hereof. In
COVID-19 patients. We will remain focused on patient centric
In FY2021, we continued to make progress channel connect platforms for our generally accepted in India and therefore, addition, readers should carefully review the
product innovation, operational excellence,
on our digital transformation journey, customers that helped us when the In addition to these, we are also working include amounts based on informed other information in this annual report and in
continuous improvement and attaining
which is structured along the lines of pandemic hit us. Similarly, in the B2B on Molnupiravir, Baricitinib and several judgments and estimates. The management our periodic reports and other documents
Digitalize the Core and Transform with leadership in chosen spaces. We are
businesses, digital solutions have been other COVID-19 drugs for treatment also accepts responsibility for the filed with all the stock exchanges.
Digital. committed to look for opportunities
deployed to drive improved customer ranging from mild to severe conditions. preparation of other financial information
aligned with our future business strategies
Digitalize the Core: service and account management. We We are committed to do our best in this that is included in this report. This write up
for inorganic growth. This is reNected in
We continued to simplify and digitalize our have also deployed advanced analytics- pandemic situation. includes some forward-looking statement,
select brand acquisition from Wockhardt
core business processes across the based insights to improve productivity of within the meaning of section 27A of the US
and other small scale acquisitions during
organization and ended the year with sales and marketing. Securities Act of 1933, as amended and
OUTLOOK, INCLUDING FY2021. We will continue to seek more such
nearly 80% digitalization of all core Few experiments have been underway to opportunities in future. section 21E of the US Securities Exchange
business processes. establish new patient engagement COVID-19 Act of 1934, as amended.
platforms - e.g., for an integrated end-to- FY2021 started with multiple COVID-19 The last few months have seen a second
We expanded the digital footprint into wave of COVID-19 impacting several parts The management has based these
end care management for cancer patients related disruptions with lockdowns in
regulatory and clinical processes resulting of the world, and the most in India. While forward- looking statements on its current
- as well as to look at adjacent business several of our major markets. This impacted
in faster cycle time and lower error rates. expectations and projections about future
models in the healthcare ecosystem. the physical connect of doctors with vaccinations and several treatment options
In manufacturing, we continued to expand events. Such statements involve known
patients and pharma representatives and are now available, rapid spread of the
implementation and adoption of the and unknown risks, uncertainties and other
also led to several challenges on operations, infection has led to further uncertainties in
Manufacturing Execution System and the
Laboratory Information Management
COVID-19 RELATED PRODUCTS supply chain and logistics. Some of these terms of business outlook. Consequently, factors that may cause actual results to Our commitment towards
We have continued to play our role in the our overall business growth may remain differ materially. These factors include, but
Systems which result in paperless fight against COVID-19 by acting
challenges continued throughout the year.
volatile in FY2022. are not limited to, changes in local and quality is reNected in all
shopNoor and labs, eliminates errors and
improves productivity. We also digitalized
proactively to bring multiple preventive
and curative treatment options, including a
We rose to the occasion with proactive
measures such as leveraging digital However, we believe that we have enough
global economic conditions, changes in
government regulations, ability to
our facilities being fully
safety processes and equipment lifecycle
management across the plants.
vaccine. Some of our major COVID-19 channels for many of our operations — levers of growth in terms of expanding our successfully implement the strategy, compliant with the
products are: examples being the enabling remote market share, new product launches, scale
In branded markets, our digitalization efforts working for our employees and digitally up of several businesses and opportunities
manufacturing or quality control outcomes,
ability to achieve expected results from
respective regulatory
• Sputnik V vaccine: We partnered with
have been focused on increasing field The Russian Direct Investment Fund connecting with doctors and business arising from COVID-19 products. These
should enable us to deliver satisfactory
investments in our product pipeline, change agencies’ regulations.
productivity with improved accuracy of (RDIF), Russia’s sovereign wealth fund, partners. in market dynamics, technological change,
doctors information enriched with We managed to continue with most of our
geocodes critical for route and call for conducting clinical trials and performance in FY2022. currency Nuctuations and exposure to
manufacturing operations through the year
planning. Within B2B markets, digitalization distribution of Sputnik V vaccine in and ensured that supplies were available for
of bid and tender management processes India. We successfully completed Phase each of our markets. We worked with
have resulted in higher win rates, III trial for the vaccine, which innovative solutions ensuring business
improved pricing vis-à-vis profitability and demonstrated efficacy at 91.6%, continuity; and while doing so we ensured
maintaining product market share. consistent safety and immunogenicity the health and safety of our employees and
results. In April 2021 we received the business partners. We also converted the
We extended our digital footprint to
Government of India’s approval for challenge to an opportunity with multiple
enable two major cross-functional value
emergency use of Sputnik-V in India.
chain processes: ‘Selection to Launch’ and set of COVID-19 related products.
We have launched Sputnik V in May
‘Product Management’. The ‘Selection to
2021. The pricing pressures in the US, Europe and
Launch’ platform digitalizes all core
certain emerging markets have continued.
processes involved across R&D, • Remdesivir: We signed a licensing
However, our strong performance was led
manufacturing and supply chain leading agreement with Gilead Sciences, Inc.
by volume growth and new product
up to the new product launch. The that grants Dr. Reddy’s the right to
‘Product Management’ platform helps launches across these markets. Having said
register, manufacture and sell
facilitate a 360 degree view along the that, some delays in launch of a few key
Remdesivir, a potential treatment for
product lifecycles through internal KPIs as COVID-19, in 127 countries including products hampered further growth.
well as market intelligence. India. We launched Remdesivir under the Our commitment towards quality is
brand name “Redyx™” in India in reNected in all our facilities being fully
Transform with Digital:
September 2020. With the surge of compliant with the respective regulatory
We continued to deploy digital and
COVID-19 cases in the second wave, we agencies’ regulations.
analytics solutions to improve customer
ramped-up our capacities to increase the
engagement and drive speed and We remain focused on improving our
availability of the medicine.
productivity in our value chain. market share position and continue our
®
• Avigan (Favipiravir): We entered into a journey towards creating a leaner business
Within R&D, multiple digital solutions were
licensing agreement with Fujifilm model, leveraging productivity
deployed that drove reduction in cycle
Toyama Chemical Co. Ltd. to develop, improvement, cost control and increased
time of drug development and help ®
improve our rate of being ‘first time right’. sell and distribute Avigan (Favipiravir) in efficiencies across several functions in
all countries other than Japan, China and FY2021.
Within manufacturing, we are building Russia. This enabled us to launch
Digital Lighthouse plants to increase plant ®
Avigan 200 mg tablets in India and few Simultaneously, we are committed to
productivity. These initiatives have other markets. We are also conducting investing in business to make it even more
markedly reduced Cost of Poor Quality Phase III trials in North America for competitive and future ready, especially
(COPQ) and outpatient setting with mild to moderate
symptoms.
50 51
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

FIVE YEARS AT A GLANCE KEY FINANCIAL RATIOS

(` MILLION)

YEAR ENDING MARCH 31 2021 2020 2019 2018 2017 YEAR ENDING MARCH 31 2021 2020 2019 2018 2017

INCOME STATEMENT DATA PROFITABILITY RATIOS

Revenues 1�89�722 1�74�600 1�53�851 1�42�028 1�40�809 EBITDA margin (%)
#
25� 27� 22� 17� 18�

Cost of revenues* 86�645 80�591 70�421 65�724 62�118 Gross Margin (%) 54� 54� 54� 54� 56�
Gross profit 1�03�077 94�009 83�430 76�304 78�691 Global Generics 59� 57� 59� 59� 62�
as a % of revenues �4c� ��c8 �4c2 ��c7 ��c9 PSAI 29� 24� 25� 20� 21�
OPERATING EXPENSES* Net Profit Margin (%)
#
9�1� 11�2� 12�2� 6�9� 8�5�
Selling, general and administrative expenses 54�650 50�129 48�680 46�857 46�300 Return on Net Worth (%)
#
10� 13� 13� 8� 10�
Research and development expenses 16�541 15�410 15�607 18�265 19�513 ASSET PRODUCTIVITY RATIOS
Impairment of non-current assets 8�588 16�767 210 53 445 Fixed Asset Turnover 3�5 3�3 2�7 2�5 2�5
Other Operating (income)/expenses, net (982) (4�290) (1�955) (788) (1�065) Total Assets Turnover 0�8 0�8 0�7 0�6 0�7
Total operating expenses 78�797 78�016 62�542 64�387 65�193 WORKING CAPITAL RATIOS
Operating income 24�280 15�993 20�888 11�917 13�498 Working Capital Days 188 188 180 194 204
as a % of revenues 12c8 9c2 1�c6 8c4 9c6 Inventory Days
#
177 154 163 154 160
FINANCE COSTS, NET Debtors Days
#
91 100 90 102 96
Finance income 2�623 2�461 2�280 2�897 1�587 Creditor Days
#
80 67 73 62 51
Finance expenses (970) (983) (1�163) (817) (781) GEARING RATIOS
Finance (expense)/income, net 1�653 1�478 1�117 2�080 806 Net Debt/Equity^
#
(0�04) (0�03) 0�09 0�24 0�25
#
Share of profit of equity accounted investees, net of income tax 480 561 438 344 349 Interest Coverage 25�5 16�8 18�3 15�0 17�7
#
Profit before income tax 26�413 18�032 22�443 14�341 14�653 Current Ratio 1�8 1�8 1�9 1�6 1�2
Income tax benefit/(expense) (9�175) 1�466 (3�648) (4�535) (2�614) VALUATION RATIOS
Profit for the year 17�238 19�498 18�795 9�806 12�039 Earnings per share (₹) 103�6 117�4 113�1 59�0 72�1
as a % of revenues 9c1 11c2 12c2 6c9 8c� Book Value per share (₹) 1�041 933 844 763 743
EARNINGS PER SHARE (₹) Dividend Payout 24� 21� 18� 34� 28�

Basic 104 118 113 59 72 Trailing Price/Earnings Ratio 43�6 26�6 24�6 35�3 36�5
(1) Fixed Asset Turnover: Net Sales/Avg Net Fixed Assets (Property, plant and equipment)
Diluted 104 117 113 59 72
(2) Total Asset Turnover: Net Sales/Avg Total Assets
Dividend declared per share for the year (₹) 25 25 20 20 20
(3) Working Capital Days: Inventory Days + Receivable Days – Payable Days
BALANCE SHEET DATA (4) Inventory Days: (Average of closing Inventory - as on end of September and March)/(Cost of Revenue during last 6 months) * 182
(5) Receivable Days: outstanding receivables netted-off with the daily average sales� starting from the latest month
Cash and cash equivalents, net of bank overdraft 14�820 1�962 2�228 2�542 3�779
(6) Payable Days: (Average of closing Payables - as on end of December and March)/(Material cost during last 3 months) * 90
Operating working capital** 71�309 68�685 58�895 53�655 53�178 (7) Book Value per share: Equity/Outstanding equity shares
(8) Dividend Payout: DPS/EPS
Total assets 2�65�491 2�32�241 2�25�427 2�25�604 2�19�821
(9) Trailing price: Closing share price on the last working day of March
Total long-term debt, excluding current portion 6�299 1�304 22�000 25�089 5�449 ^ FY2021 Net debt/equity computation excludes current borrowings & current investments

Total stockholders' equity 1�73�062 1�54�988 1�40�197 1�26�460 1�24�044

#
Key financial ratios in terms of Schedule V(B)(1)(h) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015�

ADDITIONAL DATA
Net cash provided by/(used in):
Operating activities 35�703 29�841 28�704 18�029 21�513
Investing activities (22�660) (4�923) (7�727) (14�883) (18�471)
Financing activities (298) (25�159) (21�326) (4�440) (3�692)
Effect of exchange rate changes on cash 113 (25) 35 57 (492)
Expenditure on property, plant and equipment & Intangibles (12�561) (6�115) (8�376) (11�043) (40�984)

* Figures are restated for previous years

** Operating working capital = Trade receivables + Inventories - Trade payables
Note: The numbers are as per IFRS reported financials Note: The numbers are as per IFRS reported financials

5 5
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

During FY2021, the members of the

CORPORATE GOVERNANCE company approved the continuation of
directorship of Mr. Prasad R Menon
SELECTION AND APPOINTMENT
OF NEW DIRECTORS
reports, investor presentations, recent
press releases, research reports, code of
Recommending any new member on the business conduct and ethics (COBE)
Dr. Reddy’s Laboratories Limited (DIN: 00005078), independent director board is the responsibility of the NGCC and the memorandum and articles of
This chapter, together with information Each director informs the company on
(‘Dr. Reddy’s’ or ‘the company’) believes on attaining the age of 75 years under of the board, which consists entirely of association and a brief on company’s board
given in the chapters on Management an annual basis about the board and board
that timely disclosures, transparent Regulation 17(1A) of the Listing independent directors. Given the existing practices. The new independent director
Discussion and Analysis and Additional committee positions she/he occupies
accounting policies coupled with a Regulations. composition of the board, the tenure individually meets with board members
Shareholders’ Information, constitute in other companies, and notifies it of any
strong and independent board go a long as well as the years left of the existing and senior management. Visits to plants
our report on corporate governance for changes regarding their directorships Additionally, members of the company
way in maintaining good corporate members to serve on the board, and and research locations are organized for
2020-21 (or FY2021). and committee positions. In addition, the approved the reappointment of
governance, preserving shareholders’ trust the need for new domain expertise are the director to understand the company’s
independent directors provide an annual Mr. G V Prasad (DIN: 00057433), as whole-
and maximizing long-term corporate value. reviewed by this committee. When such a operations.
BOARD OF DIRECTORS confirmation that they meet the criteria time director, designated as co-chairman
The company’s corporate governance need becomes apparent, the committee We believe that the board should be
COMPOSITION of independence as defined under Indian and managing director of the company for a
framework is based on the following main reviews potential candidates in terms of continuously empowered with knowledge
As on March 31, 2021, our board had 10 laws. Pursuant to a notification dated further period of five years with effect from
principles: their expertise, attributes, personal and of latest developments affecting the
directors, comprising of (i) two executive October 22, 2019, issued by the Ministry of January 30, 2021.
• Appropriate composition, diversity professional backgrounds and their ability company and the industry. Apart from
directors, including the chairman of the Corporate Affairs, all independent Section 152 of the Act, states that one-
and size of the board, with each director to attend meetings in India. It then places regular presentations on the company’s
board, and (ii) eight independent directors directors have completed the registration third of the board members, other than
bringing in key expertise in different the details of shortlisted candidates to the business strategies and associated risks,
as defined under the Companies Act, 2013 with the independent directors databank. independent directors, who are subject
areas. board for its consideration. If the board expositions are made on various topics
("the Act"), the Listing Regulations and Requisite disclosures have been received to retire by rotation, shall do so every
• Proactive Now of accurate information approves, the person is appointed as an covering the pharmaceutical industry.
the Corporate Governance Guidelines from the directors in this regard. After year and be eligible for reappointment, if
to members of the board and board additional director, subject to the approval Updates on relevant statutory changes
of the NYSE Listed Company Manual. assessment of such disclosures, declarations approved by the members. Accordingly,
committees to enable effective of members in the company’s next general and judicial pronouncements around
Their detailed profiles are available on the and confirmations, the board has opined Mr. G V Prasad (DIN: 00057433) retires by
discharge of fiduciary duties. meeting. industryrelated laws are regularly circulated
company's website: www.drreddys.com/our- that all the independent directors fulfil rotation at the forthcoming annual general
• Ethical business conduct by the board, FAMILIARIZATION PROCESS FOR to the directors. They also visit the
story/leadership/board-of-directors/ the conditions specified under Listing meeting (AGM) and being eligible, seeks
management and employees. INDEPENDENT DIRECTORS company’s manufacturing and research
Regulations and are independent of the reappointment.
• Well-developed systems of internal The directors have expertise in the fields To familiarize a new independent director
management. locations. Each director has complete
controls, risk management and financial of strategy, management and governance, Therefore, at the forthcoming annual with the company, an information kit is access to any of the company’s information
reporting. finance, operations, science, technology Table 2 gives the composition of our general meeting, approval of members provided containing documents about the and full freedom to interact with senior
• Protection and facilitation and human resources. Such expertise board, with all relevant details. is being sought for the reappointment of company. It contains, inter alia, information management.
of shareholders’ rights. enables the board to steer the company in TERM OF BOARD MEMBERSHIP Mr. G V Prasad, who retires by rotation such as its annual reports, sustainability
• Adequate, timely and accurate the right direction. On recommendations of the nomination, and, being eligible, offers himself for the
disclosure of all material operational and Table 1 gives details of their individual governance and compensation committee reappointment.
financial information to stakeholders. competence, expertise and skills. (NGCC), the board considers the
In India, the Securities and Exchange appointment and reappointment of TABLE 2 | COMPOSITION OF OUR BOARD AND THEIR DIRECTORSHIPS AS ON MARCH 31, 2021
The board provides leadership, strategic
Board of India (SEBI) regulates corporate directors.
guidance, objective and independent
governance for listed companies through DIRECTORSHIPS UNDER SECTION 165 OF THE COMPANIES ACT, 2013
views to the company’s management while Section 149(10) of the Act, provides that an

IN COMMITTEES(2)
DIRECTORSHIPS(1)

CHAIRMANSHIP
SEBI (Listing Obligations and Disclosure

MEMBERSHIPS(2)
discharging its fiduciary responsibilities, independent director shall hold office up RELATIONSHIP WITH OTHER DIRECTORS
Requirements) Regulations, 2015 (Listing DATE OF JOINING PUBLICPRIVATE

COMMITTEE
thereby ensuring that the management to five consecutive years on the board of NAME POSITION
Regulations). We are in full compliance a company from the date of appointment
adheres to high standards of ethics,
with all the applicable provisions of SEBI’s and shall be eligible for reappointment for a
transparency and disclosure. It regularly

OTHER
corporate governance norms. We are also second term of up to five consecutive years COMPANIES COMPANIES
reviews the company’s governance, risk
in compliance with the appropriate on passing of a special resolution by the
and compliance framework, business plans, Brother-in-law of
corporate governance standards of the and organization structure to align with members. Moreover, independent directors Mr. K Satish Reddy Chairman January 18, 1993 7 6 8 1 -
New York Stock Exchange, Inc. (NYSE) the highest global standards. cannot retire by rotation. Mr. G V Prasad(3)
and NSE IFSC Exchange Rules. Co-Chairman and Brother-in-law of
Mr. G V April 8, 1986 7 3 3 1 -
Managing Director Mr. K Satish Reddy(3)
Prasad
Ms. Kalpana Morparia Independent Director None June 5, 2007 2 - 1 - 2
TABLE 1 | MATRIX OF BOARD EXPERTISE
Dr. Bruce L A Carter MANAGEMENT AND HUMAN SCIENCE, TECHNOLOGY Independent Director None July 21, 2008 2 - 4 1 -
NAME STRATEGY FINANCE
GOVERNANCE RESOURCES AND OPERATIONS
Mr. K Satish Reddy √ √ √ √ √ Mr. Sridar Iyengar Independent Director None August 22, 2011 4 1 4 - 3

Mr. G V Prasad √ √ √ √ √
Mr. Bharat N Doshi* Independent Director None May 11, 2016 4 - 2 2 -
Ms. Kalpana Morparia √ √ √ √
Dr. Bruce L A Carter √ √ √ √ Mr. Prasad R Menon Independent Director None October 30, 2017 1 - 2 - -
Mr. Sridar Iyengar √ √
Mr. Bharat N Doshi* √ √ √ Mr. Leo Puri Independent Director None October 25, 2018 2 - - - -
Mr. Prasad R Menon √ √ √ √
Ms. Shikha Sharma Independent Director None January 31, 2019 5 - - 4 -
Mr. Leo Puri √ √ √ √
Ms. Shikha Sharma √ √ √ √
Mr. Allan Oberman Independent Director None March 26, 2019 1 - 1 - -
Mr. Allan Oberman √ √ √ √
* Term ended on May 10, 2021, as a director.
* Term ended on May 10, 2021, as a director.
(1) Other directorships are those, which are not covered under Section 165 of the Act.
(2) Membership/chairmanship in audit and stakeholders’ relationship committees of all public limited companies, whether listed or not, including the company are considered. Membership/
chairmanship of foreign companies, private limited companies and those under Section 8 of the Act, have been excluded. Membership/chairmanship of our nomination, governance
and compensation committee; science, technology and operations committee; corporate social responsibility committee; risk management committee; and banking and authorizations
Note: FY2021 represents fiscal year 2020-21, from April 1, 2020, to March 31, 2021, and analogously for FY2020 and previously such labelled committee are also excluded.
years. (3) Mr. K Satish Reddy (chairman) and Mr. G V Prasad (co-chairman and managing director) are not 'relative' as defined under Section 2(77) of the Act.
(4) None of the directors serves as an independent director in more than seven listed companies.

5 5
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
(5) None of the directors holds directorships in more than 10 public limited companies.

5 5
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

Details of the familiarization programs for

The committees were evaluated on various • Quarterly, half-yearly and annual POST-MEETING FOLLOW-UP
independent directors are available on TABLE 4 | DIRECTORS’ ATTENDANCE AT BOARD MEETINGS AND
parameters such as effective discharge of financial results of the company MECHANISM
the company’s website: www.drreddys.
their roles, responsibilities and advice given and its operating divisions or business Important decisions taken and suggestions
THE AGM, FY2021
com/media/997132/familiarization-
to the board for discharging its fiduciary segments; made by the board and its committees are MEETINGS HELD IN ATTENDANCE IN
programs-2021.pdf ATTENDANCE AT
responsibilities, including adequate and • Detailed presentations on the progress promptly communicated to the concerned NAME DIRECTOR’S LAST AGM HELD
THE MEETINGS
LETTER OF APPOINTMENT periodical updates to the board on the in research and development (R&D) departments or divisions. Action taken/ TENURE ON JULY 30, 2020
Upon their appointment, independent committees’ functioning. and new drug discoveries; status reports on decisions/suggestions of Mr. K Satish Reddy 5 4(1) Present
directors are given a formal appointment • Minutes of meetings of the board, the previous meeting(s) are followed up and
DIRECTORS’ SHAREHOLDING IN THE Mr. G V Prasad 5 5 Present
letter containing, inter alia, the terms of audit committee and other committees placed at the next meeting for information Ms. Kalpana Morparia 5 5 Present
COMPANY
appointment, roles, functions, duties and Table 3 gives details of shares/ADRs held by of the board; and further recommended actions, if any.
responsibilities, the company’s code of the directors as on March 31, 2021. • Information on recruitment and MEETINGS OF INDEPENDENT Dr. Bruce L A Carter 5 5 Present
conduct, disclosures and confidentiality. remuneration of key executives below DIRECTORS
MEETINGS OFplans
THEand
BOARD Mr. Sridar Iyengar 5 5 Present
For such terms and conditions, see: The company prepares the the board level including chief During FY2021, our independent directors Mr. Bharat N Doshi* 5 5 Present
financial
www.drreddys.com/investor/governance/ schedule of the board and board committee officer and the company secretary; met four times in sessions without the
policies-and-documents/terms-condition- • Significant regulatory matters presence of executive directors and other Mr. Prasad R Menon 5 5 Present
directors.html meetings 18 to 24 months in advance. The concerning Indian or foreign regulatory members of management. The company Mr. Leo Puri 5 5 Present
schedule of meetings and their agenda is authorities;
BOARD EVALUATION is ready to facilitate more such sessions
finalized in consultation with the chairman • Issues which involves possible public or Ms. Shikha Sharma 5 5 Present
Since FY2015, the board has carried out as and when required by the independent
of the board, the lead independent director product liability claims of a substantial
an annual self-evaluation of its directors. During these meetings, the Mr. Allan Oberman 5 5 Present
and committee chairpersons. Agendas are nature, if any;
performance, the working of its independent directors reviewed the * Term ended on May 10, 2021, as a director.
circulated in advance with appropriate • Risk analysis of various products,
committees and peer evaluation of each performance of the company and its (1) Was given leave of absence on request for one meeting.
presentations, detailed notes, supporting markets and businesses;
director internally.
Prior to that, on two such occasions, senior management, that of the chairman,
documents and executive summaries.
• Detailed analysis of potential acquisition co-chairman and managing director,
an independent expert was engaged to targets and possible divestments; Independent directors are entitled to auditing practices and for issuing reports
Under Indian laws, the board of directors and the board. Corporate strategy, risks,
conduct the evaluation process. In FY2019, • Details of any joint venture or receive sitting fees, commission based on based on such audits. The board of
must meet at least four times a year, competition, succession planning for the
an independent expert was engaged to collaboration agreements; the standalone net profits of the company directors has entrusted the audit committee
with a maximum gap of 120 days board and senior management and the
conduct the evaluation process and in • Transactions that involve substantial and reimbursement of any expenses for with the responsibility to supervise these
between two board meetings. During quality of information given to the board
FY2020 the evaluation and effectiveness payment towards, or impairment of attending meetings of the board and its processes and ensure adequate, accurate
FY2021, were also discussed.
process of the board, its committees goodwill, brand equity or committees. Such remuneration, including and timely disclosures that maintain the
all board meetings were held through
and individual directors was undertaken intellectual property; ANNUAL BOARD RETREAT commission payable, is in conformity with transparency, integrity and quality of
video conference in accordance with the
internally. • Significant sale of investments, During FY2021, the annual board retreat the provisions of the Act, and has been financial control and reporting.
provisions of law. Our board met five times
During FY2021, also the evaluation process was subsidiaries, assets which are not was held from January 5, 2021 - January 7, considered and approved by the board and The primary functions of the audit
during the financial year under review: on
undertaken internally. For the purpose, each in the normal course of business; 2021, at the company’s corporate office, the members. The company, in compliance committee are to:
May 20, 2020, July 29, 2020, October 28,
director completed a questionnaire involving • Contracts/arrangements in Hyderabad through video conferencing, with Section 197 of the Act, and the Listing • Supervise the financial reporting
2020, January 29, 2021, and March 24,
peer evaluation and feedback on processes of which director(s) are interested; where the board conducted a detailed Regulations, has not granted any stock process;
2021. Details of directors’ attendance at
the board and its committees. The contribution • Materially important show strategic review of the company’s business options to independent directors since • Review the quarterly and annual financial
board meetings and the AGM are given in
and impact of individual members were cause, demand, prosecution and segments and discussed various governance FY2013. Remuneration paid or payable to statements/results before placing them
Table 4.
evaluated on a number of parameters, such as penalty notices, if any; related matters. the directors for FY2021 is given in Table 5. to the board along with audit/limited
Our board and committee meetings • Fatal or serious accidents or dangerous
level of engagement, independence of judgment, DIRECTORS’ REMUNERATION INDEPENDENT DIRECTORS review report, related disclosures and
typically comprise structured two-day occurrences, if any;
conNict resolution, contributions to enhance the We have a policy for the remuneration of Independent directors of the company head filing requirements;
sessions. • Significant e�uent or pollution
board’s overall effectiveness, etc. Peer ratings on directors, key managerial personnel (KMP), the following governance and/or board • Review the adequacy of internal controls
certain parameters, positive attributes and INFORMATION GIVEN TO THE BOARD problems, if any; senior management personnel (SMP) committee functions: in the company, including the plan,
improvement areas for each director were Among others, the company provides the • Material default in financial and other employees, which lays down • Mr. Prasad R Menon: Governance, scope and performance of the internal
provided to them on a confidential basis. following information to the board obligations to and by the company or principles and parameters to ensure that corporate strategy, lead independent audit function;
and/or its committees: substantial non-payment for goods sold remunerations are competitive, reasonable, director, nomination, governance and • Discuss with management the
• Annual operating plans and budgets, by the company, if any; and in line with corporate and individual compensation committee and corporate company’s major policies with respect
capital budgets and other updates; • Significant labor problems and their performance. The remuneration policy is social responsibility committee; to risk assessment and risk
proposed solutions, if any; enclosed as Annexure A to this chapter. • Dr. Bruce L A Carter: Science, management;
TABLE 3 | SHARES/ADRs HELD BY DIRECTORS AS ON MARCH 31, 2021 • Significant development in the human technology and operations committee; • Hold discussions with statutory auditors
resources and industrial relations fronts; Executive directors are appointed/
NAME NO. OF SHARES/ADRs HELD • Mr. Sridar Iyengar: Audit committee; on the nature, scope and process of
• Quarterly details of foreign exchange reappointed by members’ resolution for a
He is also the financial expert and chief audits and any views that they have
Mr. K Satish Reddy(1) 898,432 exposure and the steps taken by period of five years. No severance fee is
ombudsperson for the company’s about the financial control and reporting
Mr. G V Prasad(1)(2) - management to limit the risks of adverse payable to them. Except the commission
whistle-blower policy; processes;
exchange rate movement; payable, all other components of
Ms. Kalpana Morparia 10,800 • Ms. Kalpana Morparia: • Ensure compliance with accounting
• Non-compliance of any regulatory or remuneration to the executive directors are
Stakeholders’ relationship standards and with listing requirements
Dr. Bruce L A Carter (ADRs) 7,800 statutory nature or listing requirements fixed in line with the company’s policies.
committee; and with respect to the financial statements;
Mr. Sridar Iyengar - as well as shareholders’ services such as Their annual remuneration, including
• Ms. Shikha Sharma: Risk management • Recommend the appointment and
non-payment of dividend and delays in commission based on standalone net profits
Mr. Bharat N Doshi* 1,000 committee; removal of external auditors and their
share transfer, if any; of the company, is recommended by the
COMMITTEES OF THE BOARD remuneration;
Mr. Prasad R Menon - • Subsidiary companies’ minutes, financial NGCC to the board for its consideration.
We have seven board-level committees, • Recommend the appointment of
Mr. Leo Puri - statements, significant transactions and While recommending such a commission,
whose details are given below: auditors;
Ms. Shikha Sharma investments; and the committee also takes into account
- • Review the independence of auditors;
* Term ended on May 10, 2021, as a director. • Significant transactions and the overall corporate performance in AUDIT COMMITTEE • Ensure that adequate safeguards have
Mr. Allan Oberman - a given year and the key performance The management is responsible for the
arrangements. been taken for legal compliance for the
indicators (KPIs). The remunerations are company’s internal controls and the company and its subsidiaries;
financial reporting process while the • Review the financial statements, in
(1) APS Trust owns 83.11% of Dr. Reddy’s Holdings Limited, which in turn owns 41,325,300 shares of Dr. Reddy’s Laboratories within the limits approved by members. compensation policies, as applicable statutory auditors are responsible for
Limited. Mr. G V Prasad, Mr. K Satish Reddy, Mrs. G Anuradha, Mrs. Deepti Reddy and their bloodline descendants are Perquisites and retirement benefits are
the beneficiaries of APS Trust. to all employees. performing independent audits of the
(2) During the year, Mr. G V Prasad has transferred 11,17,940 equity shares from his individual account to his HUF account. paid in accordance with the company’s

5 5
 company’s financial statements in accordance with generally accepted particular, investments made
by all the subsidiary companies
and their significant
transactions;

5 5
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

• Review and approval of related party

In addition, the chairman of the committee NOMINATION, GOVERNANCE AND The head of human resources (HR) makes • Review risk disclosure statements in any • Review measures taken for effective
transactions;
and other members met to review other COMPENSATION COMMITTEE periodic presentations to the committee on public documents or disclosures, where exercise of voting rights by shareholders;
• Review the functioning of whistle-blower
processes, particularly the internal control The nomination, governance and organization structure, talent management, applicable. • Review work done by the share transfer
mechanism;
mechanisms to prepare for certification compensation committee also entirely leadership, succession, diversity, agent including adherence to the service
• Review the implementation of applicable The company has in place an enterprise-
under Section 404 of the Sarbanes-Oxley consists of independent directors. performance appraisals, increments, standards;
provisions of the Sarbanes-Oxley Act, wide risk management system. The risk
Act, 2002, and subsidiary governance Its primary functions are to: performance bonus recommendations and • Review of corporate actions related
2002; management committee oversees and
oversight. • Examine the structure, composition other HR matters. to security holders;
• Scrutinize inter-corporate loans and reviews the risk management framework
and functioning of the board, and • Review investor engagement
investments; The chairman, CFO and the chief internal The committee met three times during the as well as the assessment of risks, their
recommend changes, as necessary, plans/initiatives and movement in
• Examine the valuation of undertakings auditor (CIA) are permanent invitees to year: on May 19, 2020, October 27, 2020, management and mitigation procedures.
to improve the board’s effectiveness, shareholdings and ownership
or assets of the company, wherever all the audit committee meetings. The and January 28, 2021. The co-chairman The committee reports its findings and
oversee the evaluation of the board structure; and
necessary; and representatives of statutory auditors are and managing director is a permanent observations to the board. A section on
and formulation of criteria for such • Review initiatives for reduction
• Evaluate internal financial controls; also present. The company secretary invitee to all such committee meetings. The risk management practices of the company
officiates as the secretary of the committee. evaluation; of quantum of unclaimed dividends
and review suspected fraud, if any, head of HR officiates as the secretary of the under the ERM framework forms a part of
• Formulate policies on the remuneration and ensure timely receipt of dividend/
committed against the company. committee. Table 7 gives the composition the chapter on Management Discussion
Audit committee meetings are preceded of directors, KMP and other annual report/statutory notices by
• Review compliance with provisions and attendance record of the committee, and Analysis in this annual report.
by pre-audit committee conference employees and on board diversity; the shareholders.
of SEBI (Prohibition of Insider Trading and its report is enclosed as Exhibit 2 to The chairman, CEO, CIA and the CCO are
calls with the members, the CFO, the • Assess the company’s policies and
Regulations, 2015, and verify that the this chapter. The committee also advises the company
CCO, the internal audit and compliance processes in key areas of corporate permanent invitees to all risk management
internal controls systems for ensuring on various shareholders’ related matters.
teams, external auditors and other key governance, other than those explicitly SCIENCE, TECHNOLOGY AND committee meetings. The CFO officiates
compliance with these regulations are The committee consists of three directors,
finance personnel of the company. During assigned to other board committees, OPERATIONS COMMITTEE as the secretary of the committee. The
adequate and effective. including two executive directors. The
these calls, key audit related matters are with a view to ensure that the company The science, technology and operations committee met thrice during the year:
chairperson of the committee is an
The audit committee comprises entirely discussed and items that need further is at the forefront of good governance; committee of the board also entirely on May 20, 2020, October 27, 2020, and
independent director. The committee met
of independent directors. All members are face-to-face discussion at the audit • Regularly examine ways to strengthen comprises of independent directors. January 28, 2021.
Its primary functions are to: four times during the year: on May 19,
financially literate and bring in expertise committee meetings are identified. organizational health, by improving Table 9 gives the composition and
• Review scientific, medical and 2020, July 28, 2020, October 27, 2020,
in the fields of finance, economics, The internal and statutory auditors of hiring, retention, motivation, attendance record of the committee, and
technical matters and operations and January 28, 2021. Table 10 gives the
strategy and management. The committee the company discuss their findings and development, deployment and behavior its report is enclosed as Exhibit 4 to this
involving the company’s development composition and attendance record of the
comprises Mr. Sridar Iyengar (chairman), updates, and submit their views to the of management and other employees. chapter.
and discovery programs (generic and committee, and its report is enclosed as
Ms. Kalpana Morparia and Ms. Shikha committee. Separate discussions are held In this context, the committee also
proprietary), including major internal STAKEHOLDERS’ RELATIONSHIP Exhibit 5 to this chapter.
Sharma. with the internal auditors to focus on reviews the framework and processes for
projects and business development COMMITTEE The company secretary officiates as the
Under the Indian laws, the audit committee compliance issues and to conduct motivating and rewarding performance
opportunities; The stakeholders’ relationship committee secretary of the committee and is also
must meet at least four times in a year, detailed reviews of the processes and at all levels of the organization, the
• Review and monitor management’s is empowered to perform the functions designated as the compliance officer in
with a maximum gap of 120 days between internal controls in the company. resulting compensation awards, and
actions in the creation of valuable of the board relating to the handling of terms of Listing Regulations and as a nodal
two meetings. The audit committee met Permissible makes appropriate proposals for board
intellectual property (IP); queries and grievances of security holders. officer under IEPF Rules. An analysis of
seven times during the year: on May 19, nonaudit related services undertaken by the approval. In particular, it recommends
• Review the safety and quality of the It primarily focuses on: investor queries and complaints received
2020, July 29, 2020, August 17, 2020, statutory and independent auditors are also all forms of compensation payable to
company’s operations; • Review investor complaints and their and responded/addressed during the
October 27, 2020, January 28, 2021, pre-approved by the committee. the executive directors, KMP and senior
• Review the status of non-infringement redressal; year is given in the chapter on Additional
February 11, 2021, and March 24, 2021. It management of the company;
The audit committee also reviews the • Review the sexual harassment patent challenges; and Shareholders’ Information.
also met the key members of the finance performance and remuneration of the CIA complaints, • Review and monitor management’s
team and chief internal auditor along with and chief compliance officer (CCO). the outcome of investigations, if any, and actions and plans in building and
the chairman and the CFO to discuss
Table 6 gives the composition and awareness initiatives; and nurturing science in the organization
matters relating to audit, assurance and
attendance record of the committee, and • Review the company’s ESOP in line with the company’s business TABLE 6 | AUDIT COMMITTEE MEMBERSHIP AND ATTENDANCE IN FY2021
accounting.
its report is enclosed as Exhibit 1 to this Schemes and recommend changes as strategy.
During the year, the committee also met necessary and also administering the
chapter. The co-chairman and managing director
representatives of statutory auditors ESOP Schemes and Dr. Reddy’s MEETINGS HELD IN THEATTENDANCE AT DIRECTOR’S
and chief executive officer (CEO) are COMMITTEE MEMBERSPOSITION
Employees
without the presence of the management. ESOS Trust. permanent invitees to all committee Mr. Sridar Iyengar Chairman 7 7
meetings. Officials heading IPDO, GMO, Mr. Bharat N Doshi* Member 7 7
quality, proprietary products and biologics
TABLE 5 | REMUNERATION PAID OR PAYABLE TO THE DIRECTORS FOR FY2021 (` ’000) are also invited to the meetings. The head Ms. Shikha Sharma Member 7 7
NAME SALARIES PERQUISITES (1)
COMMISSION (2)
TOTAL of IPDO acts as secretary of the committee. Mr. Leo Puri** Member 5 5
The committee met four times during Ms. Kalpana Morparia*** Member 2 2
Mr. K Satish Reddy 21�015 4�333 80�000 105�348
the year: on May 19, 2020, July 29,
Mr. G V Prasad 21�634 4�483 130�000 156�117 2020, October 27, 2020, and January 29, * Term ended on May 10, 2021, as a director.
** Ceased to be a member of the committee with effect from February 2, 2021.
Ms. Kalpana Morparia - - 10�967 10�967 2021. Table 8 gives the composition and *** Appointed as a member of the committee with effect from February 2, 2021.
attendance record of the committee, and
Dr. Bruce L A Carter - - 10�967 10�967
its report is enclosed as Exhibit 3 to this
Mr. Sridar Iyengar - - 11�698 11�698 chapter. TABLE 7 | NOMINATION, GOVERNANCE AND COMPENSATION COMMITTEE ME
Mr. Bharat N Doshi - - 12�429 12�429 RISK MANAGEMENT COMMITTEE
Mr. Prasad R Menon - - 12�794 12�794 The risk management committee also MEETINGS HELD IN THEATTENDANCE AT DIRECTOR’S
COMMITTEE MEMBERSPOSITION
Mr. Leo Puri - - 10�601 10�601 consists entirely of independent directors.
Its key functions are to: Mr. Prasad R Menon Chairman 3 3
Ms. Shikha Sharma - - 10�967 10�967 • Discuss with senior management Mr. Bharat N Doshi* Member 3 3
Mr. Allan Oberman - - 10�601 10�601 regarding enterprise risk management Mr. Leo Puri** Member 3 3
(ERM) and management of cyber
(1) Perquisites include medical reimbursement for self and family according to the rules of the company, leave travel assistance, personal accident insurance, leave encashment, long (US$ 5,000) variable fee per meeting based on
service award, company’s vehicle with driver for official use, telephone at residence and mobile phone, contribution to provident fund and superannuation scheme. All these benefits are the attendance at the board meetings to every
security risks and other key risks;
fixed in nature. independent director. • Ensure that it is apprised of the most significant risks along with mitigating actions taken by
(2) Payment of commission is variable, and based on the percentage of net profit calculated according to section 198 of the Act. The board of directors approved a fixed commission of (3) Apart from receiving the above remuneration, the management; and
` 7,311,000 (US$ 100,000) per Independent director; a specific amount of ` 1,827,750 (US$ 25,000) to the chairman of the audit committee; ` 1,096,650 (US$ 15,000) to the chair of non-executive directors do not have any
science, technology and operations committee; the nomination, governance and compensation committee; the risk management committee; the corporate social responsibility committee; pecuniary relationship or transaction with the
and the stakeholders’ relationship committee; ` 731,100 (US$ 10,000) to the other members of the committees; ` 1,827,750 (US$ 25,000) to the lead independent director; and ` 365,550 company.

5 5
 Ms. Kalpana Morparia*** Member - -
Mr. Allan Oberman**** Member - -
* Term ended on May 10, 2021, as a director.
** Ceased to be a member of the committee with effect from February 2, 2021.
*** Appointed as a member of the committee with effect from February 2, 2021.
**** Appointed as a member of the committee with effect from April 1, 2021.

5 5
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

CORPORATE SOCIAL RESPONSIBILITY

BANKING AND AUTHORIZATIONS COBE AND VIGIL MECHANISM The audit committee also reviews the • Discussion on business alliances are appropriately acted on and reported to
(CSR) COMMITTEE
COMMITTEE We have adopted a code of business utilization of loans/advances/investments proposals and organizational design. the SEBI/SEs. The company also maintains
The committee consists of three directors,
The banking and authorizations committee conduct and ethics (‘COBE’ or the ‘Code’) given by the company to its subsidiaries. a structured digital database, as required
including two executive directors.
authorizes executive directors and selected which applies to all directors and The minutes of board meetings of the MANAGEMENT DISCUSSION under the SEBI (Prohibition of Insider
The chairman of the committee is an
officers of the company to deal with day- employees of the company, its subsidiaries subsidiary companies are placed before AND ANALYSIS Trading) Regulations, 2015.
independent director. The CSR committee’s
today business operations such as banking, and affiliates. It is the responsibility of all the board for review. The company has The chapter on Management Discussion
primary functions are to:
treasury, insurance, excise, customs, directors and employees to familiarize also established a group governance and Analysis forms a part of this annual INTERNAL CONTROL SYSTEMS
• Formulate, review and recommend
administration and dealing with other themselves with this Code and comply policy for monitoring the governance of its report. AND STATUTORY AUDITS
to the board, a CSR policy
government/non-government authorities. It with its standards. The directors and the subsidiaries. We have both external and internal audit
indicating the activities to be
consists of two executive directors, and met employees across the company annually Mr. Sridar Iyengar and Dr. Bruce L A Carter, MANAGEMENT DISCLOSURES systems in place. Auditors have access to
undertaken by the
six times during the year: on May 20, 2020, affirm compliance with the code. independent directors of the company are Senior management of the company all records and information of the company.
company as specified in schedule VII of
July 29, 2020, October 28, 2020, also directors on the board of our material (at the internal role band of yellow and The board recognizes the work of the
the Act; A declaration of the CEO of the company
December 1, 2020, January 6, 2021, and subsidiaries, Dr. Reddy’s Laboratories S.A., above, as well as certain identified key auditors as an independent check on the
• Recommend the amount of expenditure to this effect is enclosed as Exhibit 7
January 29, 2021. The company secretary Switzerland and Dr. Reddy’s Laboratories, employees) make annual disclosures to information received from the management
to be incurred on the initiatives to this chapter.
officiates as the secretary of the Inc., USA, respectively. the board on all material, financial and on the operations and performance of the
as per the CSR policy; The company has an ombudsperson policy
committee. commercial transactions in which they may company. The board periodically reviews
• Provide guidance on various CSR (whistle-blower or vigil mechanism) to The company’s policy for determining have personal interest, if any, and which the findings and recommendations of the
initiatives undertaken by the company
OTHER BOARD MATTERS report concerns on actual or suspected material subsidiaries is available on the may have a potential conNict with the statutory and internal auditors and suggests
and monitor implementation and violations of the code. The audit committee company’s website: www.drreddys.com/
CAPITAL EXPENDITURES (CAPEX) interest of the company. Transactions with corrective actions whenever necessary.
adherence to the CSR programs and chairperson is the chief ombudsperson. media/763674/policy-for-determining-
The board approves the annual capex key managerial personnel are listed in the INTERNAL CONTROLS
policy of the company from time to time; Concerns raised to the company and their material-subsidiaries.pdf
budget in line with the company’s long-term financial section of this annual report under We maintain a system of internal controls
• Recommend to the board an annual CSR resolution are reported through the chief
strategy. An internal management DISCLOSURE ON related party transactions. designed to provide reasonable assurance
action plan delineating the CSR ombudsperson to the audit committee
committee approves all capex investments ACCOUNTING TREATMENT regarding the achievement of objectives in
projects or programmes to be
within the annual capex budget approved and where applicable, to the board. In the preparation of financial statements PROHIBITION OF INSIDER the following categories:
undertaken during the financial year;
by the board. An update on key capex During FY2021, no personnel has been for FY2021, there is no treatment of any TRADING • Organization’s strategic objective;
and denied access to the audit committee on
approvals (and their relevant details) transaction which is different from that We have a policy prohibiting insider trading • Effectiveness and efficiency
• Appoint an independent agency/firm ombudsperson issues.
granted by the internal management prescribed in the Indian Accounting in conformity with applicable regulations of operations;
to carry out impact assessment study,
committee is provided to the board. The COBE and ombudsperson policy are Standards notified by the Government of the SEBI in India and the Securities and • Adequacy of safeguards for assets;
if any.
COMPLIANCE REVIEWS available on the company’s website: of India under Section 133 of the Act, Exchange Commission (SEC) of the USA. • Reliability of financial and non-
The CSR committee met four times during read with Rule 7 of the Companies Necessary procedures have been laid
We have a chief compliance officer (CCO) www.drreddys.com/investors/governance/ financial reporting; and
the year: on May 19, 2020, July 28, 2020, code-of-business-conduct-and-ethics- (Accounts) Rules, 2014, and the down for directors, officers, designated
and a full-Nedged compliance team • Compliance with applicable laws
October 27, 2020, and January 28, 2021. Companies (Indian Accounting Standards) persons and their relatives for trading
to oversee compliance activities. The cobe/ and www.drreddys.com/investors/ and regulations.
The head of CSR officiates as the secretary Rules, 2015, as amended, the guidelines in the securities of the company. These
company’s compliance status is governance/ombudsperson-policy
of the committee. Table 11 gives the are periodically communicated to such The integrity and reliability of our internal
periodically updated to the senior issued by SEBI and other accounting
composition and attendance record of the RELATED PARTY TRANSACTIONS employees who are considered as insiders control systems are achieved through
management team and presentations are principles generally accepted in India.
committee, and its report is enclosed as We have adequate procedures to identify of the company. Apart from this, regular clear policies and procedures, process
given in the quarterly audit committee and
and monitor related party transactions. All automation, training and development of
Exhibit 6 to this chapter. MANAGEMENT insider trading awareness sessions are
risk management committee meetings.
transactions with related parties are placed employees and an organization structure
Our management develops and implements conducted for the benefit of designated
When pertinent, these are also shared with
before the audit committee and the board that segregates responsibilities.
policies, procedures and practices that persons. Trading window
all board members.
for review and approval, as appropriate.
attempt to translate the company’s closure/blackouts/ quiet periods, when the Our internal audit team is an independent
TABLE 8 | SCIENCE, TECHNOLOGY AND OPERATIONS COMMITTEETransactions
MEMBERSHIP AND
entered into ATTENDANCE
with related IN FY2021
core purpose and mission into reality. It directors and designated persons are not assurance and advisory function,
parties during the financial year were at permitted to trade in the securities of the
also identifies, measures, monitors and responsible for evaluating and improving
POSITION MEETINGS HELD IN THEATTENDANCE AT arm’s length pricing and generally in the company,
minimizes risks in the business and ensures the effectiveness of risk management,
COMMITTEE MEMBERS ordinary course of business. The details of are intimated in advance to all concerned.
DIRECTOR’S TENURE THE MEETINGS safe, sound and efficient operations.
related party transactions are discussed Violations of the policy, if any,
Dr. Bruce L A Carter Chairman 4 4 These risks are internally supervised
in note 2.23 to the standalone financial
and monitored through the company’s TABLE 10 | STAKEHOLDERS' RELATIONSHIP COMMITTEE
Ms. Kalpana Morparia* Member 4 4 statements. The company’s policy on
management council (MC).
Mr. Prasad R Menon Member 4 4 materiality of the related party transactions MEMBERSHIP AND ATTENDANCE IN FY2021
is available on the company’s website: MANAGEMENT COUNCIL (MC) MEETINGS HELD IN THE ATTENDANCE AT
Mr. Allan Oberman Member 4 4 www.drreddys.com/media/764069/policy- COMMITTEE MEMBERS POSITION
Mr. Leo Puri** Member - Our MC consists of senior Ms. Kalpana Morparia Chairperson DIRECTOR’S TENURE4 THE MEETINGS4
- materiality-related-party-transactions.pdf
management
from the business and corporate functions.
* Ceased to be a member of the committee with effect from February 2� Interested directors are not present during Mr. Bharat N Doshi* Member 4 4
2021.
Page nos. 26-27 of this annual report gives
** Appointed as a member of the committee with effect from February 2� discussion and voting on such related details of the members of the MC. Apart Mr. G V Prasad Member 4 4
2021. party transactions. Furthermore, the from monthly meetings, the MC meets Mr. K Satish Reddy Member 4 4
once
transactions with directors/their relatives/ a quarter for two-day sessions. Background
TABLE 9 | RISK MANAGEMENT COMMITTEE MEMBERSHIP AND (1)
Was given leave of absence on request for one entities outside our group in which they are
meeting.
notes for the monthly and quarterly meetings are circulated in advance. Listed below are some of
ATTENDANCE IN FY2021 interested, are reviewed by an independent the key issues that were considered by the MC during the year under review:
MEETINGS HELD IN THE ATTENDANCE AT chartered accountant. • The company’s long-term strategy, growth initiatives and priorities;
COMMITTEE MEMBERS POSITION DIRECTOR’S TENURE THE MEETINGS • Overall company performance, including performance of various business units;
SUBSIDIARY COMPANIES
The audit committee reviews the financial • Decision on major corporate policies;
Ms. Shikha Sharma Chairperson 3 3
statements of our subsidiaries. It also • Discussion and sign-off on annual plans, budgets, investments and other major initiatives; and
Dr. Bruce L A Carter Member 3 3 reviews the investments made by such
Mr. Sridar Iyengar Member 3 2(1) subsidiaries, the statement of all significant
Mr. Allan Oberman* Member 3 3 transactions and arrangements entered into
by subsidiaries and the compliances
Mr. Leo Puri** Member - - of each materially significant subsidiary
* Ceased to be a member of the committee with effect from April 1� 2021. on a periodic basis.
** Appointed as a member of the committee with effect from February 2�
2021.

6 6
 * Term ended on May 10, 2021, as a director.

TABLE 11 | CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

MEMBERSHIP AND ATTENDANCE IN FY2021
MEETINGS HELD IN THE ATTENDANCE
COMMITTEE MEMBERS POSITION
DIRECTOR’S TENURE THE
Mr. Bharat N Doshi* Chairman 4
Mr. Prasad R Menon** Chairman -
Mr. K Satish Reddy Member 4
Mr. G V Prasad Member 4
* Term ended on May 10, 2021, as a director. Chairman of the committee till April
11, 2021.
** Appointed as a member and chairman, with effect from April 12, 2021.

6 6
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

control and governance processes. The

face-to-face and via conference calls. 2. News releases, presentations, etc.: 8. Designated exclusive e-mail ID: CNBC Asia in 2015, Regional Honoree COMPLIANCE REPORT ON
internal audit team helps to enhance and
Remedial measures suggested by the The company has established systems We have designated an e-mail ID for the 2020 YPO Global Impact Award, DISCRETIONARY REQUIREMENTS
protect organizational value by providing
auditors and the audit committee have and procedures to disseminate relevant exclusively for investor services: r eceived the V. Krishnamurthy Award for UNDER REGULATION 27(1) OF THE
risk-based objective assurance, advice,
been either implemented or taken up for information to its stakeholders, including shares@drreddys.com. Excellence by the Centre for LISTING REGULATIONS
and insight. The internal audit team
implementation by management. members, analysts, business partners, Organizational Development in 2019, and 1. The board: Our chairman is an
prepares annual audit plans based on 9. Register to receive electronic
customers, employees and the society was designated The Boundary Breaker at executive director and maintains the
risk assessment and conducts extensive The statutory and independent communications: We provide an
at large. It also conducts earning calls the CEO Awards in 2018. chairman’s office at the company’s
reviews covering financial, operational auditors provide a confirmation of their option to the members to register their
with analysts and investors. Details of expenses for the performance of his
and compliance controls. Areas requiring independence every financial year. e-mail ID online through the company’s Prior to May 2014, Mr. Prasad held titles
communications made during the year duties.
specialized knowledge are reviewed in They confirm that the engagement team, website to receive electronic of chairman and chief executive officer.
are produced in Table 13. He was reappointed as a whole-time 2. Shareholders’ rights: We did not send
partnership with external experts or by involved in the audit of the company and communications. Members who wish to
recruiting resources with specialized its group including network firms have 3. Website: The primary source of receive electronic communications may director designated as co-chairman and half-yearly results to the household of
skills. Suggested improvements in complied with relevant ethical requirements information regarding the company’s register at managing director of the company at the each shareholder(s) in FY2021.
processes are identified during reviews and regarding independence. operations is the company’s website: www.drreddys.com/investors/investor- 36th AGM of the members held on July However, in addition to displaying our
communicated to the management on an www.drreddys.com, where all official services/shareholder-information.aspx 30, quarterly and half-yearly results on our
They also confirm that on the basis of
ongoing basis. news releases and presentations made 2020, for a period of five years commencing website, www.drreddys.com, and
procedures implemented within their 10. Disclosures: We have a policy on
to institutional investors and analysts January 30, 2021, to January 29, 2026, publishing
The audit committee of the board monitors practice, they have not identified any the determination of materiality for
are posted. It contains a separate liable to retire by rotation. He retires by in widely circulated newspapers, the
the performance of the internal audit situation or risk likely to affect their disclosure of certain events.
dedicated investors section, as required rotation at the forthcoming 37th AGM of quarterly financial results are sent, if
team on a periodic basis through review independence as company’s auditors for
under Regulation 46(2) of the Listing the company and, being eligible, offers asked for, to the registered e-mail IDs of
of audit plans, audit findings and speed of the financial year within the terms of the ADDITIONAL INFORMATION
Regulations, where the information for himself for reappointment. shareholders.
issue resolution through follow ups. Each rules of conduct applicable in India. ON DIRECTORS SEEKING
year, there are at least four meetings in members is available. Webcast of the APPOINTMENT/ In addition to the positions held in our 3. Audit qualifications: The auditors have
AUDITORS ’ FEES proceedings of the AGM is also made
which the audit committee reviews internal During FY2021, the company and its REAPPOINTMENT AT THE wholly-owned subsidiaries, Mr. Prasad is not qualified the financial statements of
audit findings. During the year, the audit available on the company’s website. ENSUING ANNUAL GENERAL also a director on the boards of Greenpark the company.
subsidiaries, on a consolidated basis paid
committee chairman also met the chief the fees mentioned in Table 12 to M/s. 4. Annual report: The company’s annual MEETING Hotels and Resorts Limited, Stamlo
4. Separate post of chairman and CEO:
internal auditor without the presence of report containing, inter alia, the MR. G V PRASAD Industries Limited, Dr. Reddy’s Holdings
S.R. Batliboi & Associates LLP, chartered Mr. K Satish Reddy is the chairman of
management. board’s report, additional shareholders Mr. G V Prasad (aged 60 years, Limited, Dr. Reddy’s Trust Services Private
accountants, the statutory auditors; and the company; Mr. G V Prasad is the
information, the corporate governance DIN: 00057433) holds a Bachelor degree in Limited, Dr. Reddy’s Institute of Life
CEO AND CFO CERTIFICATION to M/s. Ernst & Young Associates LLP, co- chairman and managing director
report, the business responsibility Chemical Engineering from Illinois Institute Sciences, International Foundation for
A certificate of the CEO as well as the the independent auditors and other and Mr. Erez Israeli is the CEO.
report, management’s discussion and of Technology, Chicago in the USA, and Research and Education and Indian School
CFO of the company on financial entities within their network. 5. Reporting of internal audit: The chief
analysis (MD&A), audited standalone an M.S. in Industrial Administration from of Business in India.
statements and applicable internal controls (` MILLIONS)
internal auditor regularly updates
as stipulated under Regulation 17(8) of the and consolidated financial statements, Purdue University, Indiana in the USA. Apart from the committee memberships
TABLE 12 | AUDITORS’ FEES auditors’ report and other important in Dr. Reddy’s, he is also a member of the
the audit committee on internal audit
Listing Regulations is enclosed as Exhibit 8 Mr. Prasad is a member of the company’s findings at the committee’s meetings and
TYPE OF SERVICE FY2021 FY2020 information are circulated to members nomination and remuneration committee
to this chapter. board since 1986 and serves as co- conference calls.
and others so entitled. The annual and the corporate social responsibility
STATUTORY AND IFRS AUDITORS Audit fees 84.4 76.0 chairman and managing director of the
report is also available on the company’s committee of the company’s wholly-owned ADDITIONAL SHAREHOLDERS’
For FY2021, M/s. S.R. Batliboi & Associates company. He leads the core team that
Tax audit fees 20.2 13.1 website in a user-friendly and subsidiary, Aurigene Discovery INFORMATION
LLP, chartered accountants (firm drives the growth and performance at
All other fees 7.0 2.1 downloadable form. Technologies Limited. The chapter on Additional Shareholders’
registration no. 101049W/E300004), Dr. Reddy’s. He has played a key role
5. Chairman’s speech: The speech given in the evolution of Dr. Reddy’s from a Information forms a part of this annual
the statutory auditors, audited the financial Total 111.6 91.2 Mr. Prasad has attended all meetings of the
at the AGM is made available on the mid-sized pharmaceutical company into report.
statements prepared in accordance with board held during FY2021. He does not hold
company’s website: www.drreddys.com. a globally respected pharmaceutical any equity shares in the company as on
the Ind AS. During the year, the company ANNEXURE A
reappointed M/s. Ernst & Young AGREEMENTS WITH MEDIA 6. Reminder to investors: Reminders major especially in developed markets. March 31, 2021.
He is also passionate about sustainable REMUNERATION POLICY
Associates LLP, as an independent The company has not entered into any to collect unclaimed dividend on Mr. G V Prasad and Mr. K Satish Reddy
manufacturing and business practices. He I.CONTEXT
registered public accounting firm agreement with any media company and/or shares or debenture are brother-in-laws. They are not 'relative'
is widely credited as the architect of Dr. The purpose of this policy is to set over
(independent auditor) its associates. redemption/interest are sent to the as defined under Section 2(77) of the Act.
Reddy’s successful Global Generics (GG) principles, parameters and governance
to audit the annual consolidated financial relevant shareholders and debenture framework of the remuneration for
statements and for issuing an opinion SHAREHOLDERS holders. and Active Pharmaceutical Ingredients LISTED COMPANY DIRECTORSHIP OF
(API) strategies, as well as the company’s THE BOARD MEMBERS directors, KMPs, senior management
on the financial statements prepared in MEANS OF COMMUNICATION 7. Compliances with stock exchanges: foray into biosimilars, proprietary products, Table 14 on page 64 enumerates the personnel and employees. This policy will
accordance with IFRS as issued by the 1. Quarterly and annual results: Quarterly National Stock Exchange of India Limited differentiated formulations, and the directors who are holding directorship in assist the board to fulfil its responsibility
International Accounting Standard Board and annual results of the company are (NSE) and BSE Limited (BSE) maintain company’s sustainability initiatives listed entities, including Dr. Reddy’s, as on towards attracting, retaining and motivating
(IASB) for FY2021. published in widely circulated national separate online portals for electronic including the adoption of green technologies March 31, 2021. the directors, KMPs, senior management
newspapers such as the Business submission of information by listed
The statutory and independent auditors and processes. personnel and employees through
Standard and the local vernacular companies. Various communications COMPLIANCE REPORT ON THE
render an opinion regarding the fair competitive and reasonable remuneration
daily, Andhra Prabha. These are also such as notices, press releases Mr. Prasad was listed among the Top NYSE CORPORATE GOVERNANCE
presentation in the financial statements in line with the corporate and individual
disseminated internationally through and the regular quarterly, half-yearly 50 CEOs that India ever had by Outlook GUIDELINES
of the company’s financial condition performance. This document outlines
Business Wire and made available on and annual compliances and disclosures magazine in 2017 and was recognized Pursuant to Section 303A.11 of the NYSE
and operating results. Their audits are following policies/guidelines:
the company’s website: www.drreddys. are filed electronically on these portals. as Listed Company Manual, a foreign private A. Performance evaluation of directors
conducted in accordance with
com. The financial results were sent, if In addition, such disclosures and one of the Top Five Most Valuable CEOs issuer, as defined by the SEC, must make B. Remuneration principles
generally accepted auditing standards
asked for, to the registered e-mail IDs of communications are also sent to the of India by Business World in 2016. He its US investors aware of significant ways in C. Board diversity
and include a review of the internal
members. NYSE, NSE IFSC Limited and filed with was also listed in the prestigious which its corporate governance practices
controls, to the extent necessary, to II. DEFINITIONS
SEC, as appropriate. ‘Medicine Maker 2020 and 2021 Power differ from those required of domestic
determine the audit procedures required “Board” means board of directors
List’ of the most inspirational professionals companies under NYSE listing standards. A
to support their opinion. of the company.
shaping the future of drug development detailed analysis of this is available on the
While auditing the operations of the and under the category of "Small company’s website: www.drreddys.com. “Committee” means nomination,
company, the external auditors recorded Molecules" for
TABLE 13 | DETAILS OF COMMUNICATION MADE DURING FY2021 governance and compensation committee
his remarkable work and contribution to of the company as constituted or
MEANS OF COMMUNICATION NUMBER pharmaceutical industry. He has also been
their observations and findings with the named India Business Leader of the year by reconstituted by the board, from time
Press releases/statements 61
management. These were then discussed Earnings calls 4 to time.
by the management and the auditors at/
6 6
 with the audit committee meetings – both Publication of results 4

6 6
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

“Company” means Dr. Reddy’s

subsidiary or associate company, or (iii) holds together with his relatives two excluding board of directors comprising The key principles for each of the positions The committee may review the overall
Laboratories Limited.
their promoters, or directors, amounting per cent or more of the total voting all members of management one level are outlined below: compensation approach for employees
“Director” means directors of the to two per cent or more of its gross power of the company; or below the executive directors, including 1) Executive directors – The executive and on any changes done for the entire
company. turnover or total income or fifty lakh (iv) is a chief executive or director, by the functional heads. directors shall be paid remuneration organization.
“Employee” means any person, including rupees or such higher amount as may be whatever name called, of any non- by way of monthly compensation and
Unless the context otherwise requires, VI. BOARD DIVERSITY
officers who are in the permanent prescribed, whichever is lower, during profit organization that receives profit based commission. The total
words and expressions used in this policy Building a diverse and inclusive workplace
employment of the company. the two immediately preceding financial twenty five per cent or more of its remuneration to be paid to the executive
and not defined herein but defined in the is an integral part of Dr. Reddy’s culture.
years or during the current financial receipts from the company, any directors shall be within the limits
“Independent Director” As provided Companies Act, 2013 as may be amended These principles are also applied to the
year; of its promoters, directors or its prescribed under the provisions of the
under clause 49 of the Listing Agreement from time to time shall have the meaning composition of our board.
e) who, neither himself nor any of his holding, subsidiary or associate Companies Act, 2013, and Rules made
and/or under the Companies Act, 2013, respectively assigned to them therein.
company or that holds two per cent thereunder; The board of directors shall have the
‘independent director’ shall mean a relatives —
or more of the total voting power of III.APPLICABILITY optimum combination of directors from
nonexecutive director, other than a nominee (i) holds or has held the position of 2) Non-executive directors –
the company; and This policy is applicable to the following: different areas�fields of expertise and
director of the company: a key managerial personnel or The non-executive directors shall
(v) is a material supplier, service • Directors (executive and non-executive); experience like operations, management,
a) who, in the opinion of the board, is is or has been employee of the receive remuneration by way of sitting
provider or customer or a lessor or • Key managerial personnel (KMPs); quality assurance, finance, sales and
a person of integrity and possesses company or its holding, subsidiary fees and reimbursement of expenses
lessee of the company. • Senior management personnel; and marketing, supply chain, research and
relevant expertise and experience; or associate company in any of the for attending meetings of board or
• and Other employees. development, human resources etc., or as
three financial years immediately f) who is not less than 21 years of age. committee thereof. In addition, the non-
b) (i) who is or was not a promoter of the may be considered appropriate. The board
preceding the financial year IV. EVALUATION OF DIRECTORS executive and independent directors
company or its holding, subsidiary "Key Managerial Personnel” is as defined shall have at least one member who has
in which he is proposed to be For the purpose of determining shall also be eligible to receive profit
or associate company; under the Companies Act, 2013 and means:- accounting or related financial management
appointed; remuneration (based on profitability of the related commission, as may be approved
(ii) who is not related to promoters a) the chief executive officer or the expertise and at least three members who
(ii) is or has been an employee or company), the evaluation criteria of the by the shareholders of the company.
or directors in the company, its managing director or the manager are financially literate.
proprietor or a partner, in any of executive and non-executive directors are They shall not be entitled
holding, subsidiary or associate (having ultimate controls over
the three financial years as outlined below: to any stock options. At least one member of the board should be
company; affairs of the company);
immediately preceding the financial 1) Executive directors: a woman.
The chairman of the company shall
c) apart from receiving director’s year b) the company secretary; a) Financial metrics covering growth
propose remuneration to be paid to non- VII. CONFIDENTIALITY
remuneration, has or had no pecuniary in which he is proposed to be c) the whole-time director; in return on capital employed (RoCE) The members of the committee may not
executive directors. The proposal for
relationship with the company, its appointed, of a firm of auditors or and profitability; and disclose, in particular, the information
d) the chief financial officer; and the remuneration shall be benchmarked
holding, subsidiary or associate company secretaries in practice b) Non-financial metrics covering contained in the confidential reports they
with global pharmaceutical companies
company, or their promoters, or or cost auditors of the company e) such other officer as may be prescribed aspects such as health, brand receive or the contents of confidential
and the contribution made and time
directors, during the two immediately or its holding, subsidiary or under the applicable statutory building, compliance, quality and discussions. They shall also ensure that
dedicated by each director;
preceding financial years or during the associate company; or any legal or provisions/regulations from time to time. sustainability of operations of the any employees appointed to support them
a consulting firm that has or had organization, as may be agreed upon 3) KMPs and senior management
current financial year; likewise comply with this rule.
“Senior Management” means officers/ from time to time with the company. personnel – Dr. Reddy’s recognizes that
any transaction with the company,
d) none of whose relatives has or had personnel of the company who are those chosen to lead the organization VIII. REVIEW
its holding, subsidiary or associate 2) Non-executive directors:
pecuniary relationship or transaction members of its core management team are vital to its ongoing success and This policy will be reviewed at appropriate
company amounting to ten per cent a) Level of engagement, independence
with the company, its holding, growth. Thus, these executives should time, as decided by the committee. The
or more of the gross turnover of of judgment, etc., and their
such firm; be offered competitive and reasonable utility and interpretation of this policy will
contribution in enhancing the board’s be at the sole discretion of the committee.
compensation so that Dr. Reddy’s can
overall effectiveness;
attract, retain and encourage critical
TABLE 14 | LISTED COMPANY DIRECTORSHIP OF BOARD MEMBERS AS ON MARCH 31, 2021 b) The non-executive directors EXHIBIT 1
talent to meet important organizational
DIRECTOR COMPANY LISTED IN DESIGNATION HELD remuneration shall be globally REPORT OF THE AUDIT COMMITTEE
goals and strategies. The compensation
benchmarked with similar
Mr. K Satish Reddy Dr. Reddy’s Laboratories Limited India Chairman will be the mix of fixed pay, variable To the shareholders of
organizations; and
pay, performance based incentive plans Dr. Reddy’s Laboratories Limited
Mr. G V Prasad Dr. Reddy’s Laboratories Limited India Co-Chairman and Managing Director c) Participation in the committees
or stock options. The executive total
Mr. Allan Oberman Dr. Reddy’s Laboratories Limited India Independent Director (either as chairperson or member) The audit committee of the board consists
compensation program will be Nexible
and the board meetings. of three directors. Each member is an
Mr. Bharat N Doshi Dr. Reddy’s Laboratories Limited India Independent Director to differentiate pay to recognize an
Dr. Bruce L A Carter Enanta Pharmaceutical Inc. V. REMUNERATION OF DIRECTORS, individual incumbents’ critical skills, independent director as defined under
Chairman
USA KMPS, SENIOR MANAGEMENT contributions, and future potential to Indian laws, Listing Regulations and the
Mirati Therapeutics Inc. Director PERSONNEL AND OTHER EMPLOYEES impact the organization’s success; New York Stock Exchange Corporate
Dr. Reddy’s Laboratories Limited India Independent Director The committee shall recommend to the Governance Guidelines. The committee
4) Other employees – The operates under a written charter adopted
Ms. Kalpana Morparia Philip Morris International Inc. USA Director board for their approval, any remuneration
compensation program for
employees is designed to by the board of directors, and has been
to be paid to the executive directors. The
Hindustan Unilever Limited Independent Director committee will separately review and help drive performance culture and vested with all the powers necessary to
India align employees for the creation of
Dr. Reddy’s Laboratories Limited Independent Director approve the remuneration to be paid to sustainable value through behaviors effectively discharge its responsibilities.

Mr. Leo Puri Hindustan Unilever Limited KMPs and senior management personnel. Dr. Reddy’s management has primary
Independent Director like execution excellence, innovation
Dr. Reddy’s Laboratories Limited India The level and composition of remuneration and leadership. In line with the responsibility for the financial statements
Independent Director
so determined by the committee shall organization principles of managing and reporting process, including the
Mr. Prasad R Menon Dr. Reddy’s Laboratories Limited India Independent Director be reasonable and sufficient required to the long-term and meritocracy, there systems of internal controls. During
Ms. Shikha Sharma Ambuja Cements Limited Independent Director attract, retain and motivate directors, are four principles of pay which have FY2021, the audit committee met seven
KMPs
and senior management in order to run the been enumerated – ability to pay, times. It discussed with the company’s
Mahindra and Mahindra Limited Independent Director
company successfully. There shall be a clear position-linked pay, person- internal auditors, statutory auditors and
specific
Tech Mahindra India Independent Director linkage of remuneration to performance and pay and performance-linked pay. The independent auditors the scope and
Limited
Tata Consumer Products Limited Independent Director health targets. The remuneration shall be a company may periodically review the plans for their respective audits. It also
mix of fixed and variable pay�long-term compensation and benefits at all levels discussed the results of their examination,
Dr. Reddy’s Laboratories Limited Independent Director their evaluation of the company’s internal
pay reNecting short and long-term to ensure that the company remains
performance
6 6
 Mr. Sridar Iyengar Mahindra Holidays & Resorts India Limited Independent Director objectives appropriate to the working of the competitive and is able to attract and controls, and overall quality of the
company and its strategic goals. retain desirable talent. company’s financial reporting. The audit
Aster DM Healthcare Limited India Independent Director
committee provides at each of its meetings
Dr. Reddy’s Laboratories Limited Independent Director

6 6
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

an opportunity for internal and external effectively discharge its responsibilities. The committee met thrice during the financial
per Ind AS be approved by the board as a • Establish, in consultation with the The committee’s primary responsibilities
auditors to meet privately with the year inter alia to review key initiatives and
true and fair statement of the financial management, the compensation are to:
members of the committee, without the matters. The committee also recommended
status of the company; and program for the company, and • Review scientific, medical and
presence of management. appropriate interventions from time to time. It
recommend it to the board for approval, technical matters and operations
b) That the financial statements prepared also apprised the board
In fulfilling its oversight responsibilities, and in that context: involving the company’s development
as per IFRS as issued by International
the committee reviewed and discussed a) Establish annual key result areas and discovery programs (generic and
Accounting Standards Board for the
the company’s quarterly unaudited and (KRAs) for the executive directors proprietary), including major internal
year ended March 31, 2021, be
annual audited financial statements with and oversee the status of their projects, business development
approved by the board and be included
the management. M/s. S.R. Batliboi & achievement; opportunities, interaction with
in the company’s annual report on Form
Associates LLP, chartered accountants, b) Review, discuss and provide guidance academic and other outside research
20-F, to be filed with the US Securities
the company’s statutory auditors for to the management, on the KRAs for organizations;
and Exchange Commission.
financial statements prepared in members of the MC, KMP and their • Assist the board and the
accordance with Ind AS, and M/s. Ernst & In addition, the committee also remuneration; and management in the creation of
Young Associates LLP, the company’s recommended the appointment of the c) Review the company’s ESOP schemes valuable intellectual property (IP);
independent auditors for financial statutory auditor, secretarial auditor, and oversee its administration. • Review the status of non-infringement
statements prepared in accordance with cost auditor and independent auditor patent challenges;
As on March 31, 2021, the company had
IFRS, are responsible for expressing their to the board. • Assist the board and the
1,015,522 outstanding stock options,
opinion on the conformity of the SRIDAR IYENGAR management in building and
which amounts to 0.61% of total equity
company’s financial statements with Chairman, Audit Committee nurturing science in the organization
capital. These options are held by 247
generally accepted accounting principles to support its business strategy; and
Place: USA employees of the company and its
(GAAP), as applicable. • Review the safety and quality of the
Date: May 13, 2021 subsidiaries under:
Relying on the review and discussions with company’s operations.
a) Dr. Reddy’s Employees Stock
the management and the auditors, the audit The committee met four times
EXHIBIT 2 Options Scheme, 2002;
during the financial year. During the
committee believes that the company’s
REPORT OF THE NOMINATION, b) Dr. Reddy’s Employees ADR
financial statements are fairly presented year, the committee also reviewed
GOVERNANCE AND COMPENSATION Stock Options Scheme, 2007; and
in conformity with Indian accounting global manufacturing, R&D, product
COMMITTEE
standards (Ind AS) and the IFRS as issued c) Dr. Reddy’s Employees Stock pipeline
by the International Accounting Standards To the shareholders of Dr. Reddy’s Option Scheme, 2018. and digital transformation in R&D. It also
Board in all material aspects. Laboratories Limited apprised the board on key discussions
359,252 stock options are exercisable at par
The nomination, governance and and recommendations made at such
To ensure that the accounts of the value i.e. ` 5/- per option and 656,270 stock
compensation committee of the board meetings.
company are properly maintained and that options are exercisable at fair market value.
accounting transactions are in accordance consists of three independent directors DR. BRUCE L A CARTER
as defined under Indian laws, Listing The committee met three times during the
with the prevailing laws and regulations, the Chairman, Science,
Regulations and the New York Stock financial year. In addition to the fulfilment
committee reviewed the internal controls Technology and Operations
Exchange Corporate Governance of its normal responsibilities as described
put in place by the company. In conducting Committee
Guidelines. The committee operates under above, this year the committee has given
such reviews, the committee found no Place: USA
a written charter adopted by the board of special emphasis to board renewal,
material discrepancy or weakness in the Date: May 13, 2021
directors, and has been vested with all the identifying candidates for the board, and
company’s internal control systems.
powers necessary to effectively discharge modifying committee composition. It has
During the year, the committee, inter alia,
its responsibilities. also worked with management to review EXHIBIT 4
also reviewed the following: the organization design, plan for upgrading REPORT OF THE RISK
a) Non-audit services being provided by The committee’s primary responsibilities and retaining talent at all levels, review MANAGEMENT COMMITTEE
the statutory and independent auditors are to: succession plans for key positions, and To the shareholders of Dr. Reddy’s
and concluded that such services were • Assess the company’s policies and support revision of training programs and Laboratories Limited
not in conNict with their independence; processes in key areas of corporate the performance enablement systems.
governance and the impact of related The risk management committee
b) Structure of the internal audit function, It also reviewed the company’s system for
significant regulatory and statutory of the board consists of four directors.
internal audit plan and chief internal hiring, developing and retaining talent.
changes, if any, to ensure that the Each member is an independent director
auditor’s remuneration;
company is at the forefront of good PRASAD R MENON as defined under Indian laws, Listing
c) Related party transactions, as corporate governance; Chairman, Nomination, Governance and Regulations and the New York Stock
applicable; • Periodically examine the structure, Compensation Committee Exchange Corporate Governance
composition and functioning of the Guidelines. The committee operates
d) The financial statements of the Place: Hyderabad
board, and recommend changes, under a written charter adopted by the
subsidiaries including their investments Date: May 13, 2021
as necessary, to improve the board’s board of directors and has been vested
and significant transactions; and
effectiveness, oversee the evaluation with all the powers necessary to
e) Ombudsperson process/complaints of the board and formulation of criteria
EXHIBIT 3 effectively discharge its responsibilities.
and insider trading matters. REPORT OF THE SCIENCE,
for such evaluation; The committee’s primary responsibilities
TECHNOLOGY AND OPERATIONS
The committee ensures that the company’s • Examine major aspects of the company’s are to:
COMMITTEE
code of business conduct and ethics has organizational design, and recommend • Discuss with senior management the
a mechanism such that no personnel changes as necessary; To the shareholders of Dr. Reddy’s
company’s enterprise-level risks
intending to make a complaint relating to • Formulate policies on the remuneration Laboratories Limited
and provide oversight as may be
securities and financial reporting shall be of directors, KMPs and other The science, technology and operations needed;
denied access to the audit committee. employees and on board diversity; committee of the board consists of four • Ensure it is apprised of the most
• Review and recommend compensation independent directors as defined under significant risks and emerging issues,
The audit committee has recommended and variable pay for executive directors
to the board of directors: Indian laws, Listing Regulations and the along with actions that the
to the board; New York Stock Exchange Corporate management is taking and how it is
a) That the audited standalone and • Review the sexual harassment
consolidated financial statements of Governance Guidelines. The committee ensuring effective enterprise risk
complaints, outcome of investigations, operates under a written charter adopted management (ERM); and
Dr. Reddy’s Laboratories Limited for the if any and awareness initiatives; and
year ended March 31, 2021, prepared by the board of directors, and has been • Review risk disclosure statements in any
as vested with all the powers necessary to public documents or disclosures.

6 6
 on key discussions and recommendations 8 CEO AND CFO CERTIFICATE
Guidelines. The committee operates
made at such meetings and shared TO THE BOARD PURSUANT TO
under a written charter adopted by
information on enterprise-wide risks. REGULATION 17
the board of directors, and has been
SHIKHA SHARMA vested with all the powers (8) OF THE LISTING REGULATIONS
Chairperson, Risk Management Committee necessary to effectively discharge We, Erez Israeli, chief executive officer,
Place: Mumbai Date: its responsibilities. and Parag Agarwal, chief financial officer,
May 13, 2021 The committee's primary to the
responsibilities are to:
EXHIBIT 5 REPORT • Formulate, review and
OF THE STAKEHOLDERS' recommend to the board a
RELATIONSHIP COMMITTEE CSR policy indicating the
activities to be undertaken by
To the shareholders of Dr. Reddy’s
the
Laboratories Limited
company as specified in schedule
The stakeholders’ relationship committee of VII of the Companies Act, 2013;
the board consists of three directors, • Recommend the amount of
including two executive directors. The expenditure to be incurred on the
chairperson is an independent director as initiatives as per the CSR policy;
defined under Indian laws, Listing • Provide guidance on various CSR
Regulations and the New York Stock initiatives undertaken by the
Exchange Corporate Governance company and to monitor their
Guidelines. The committee operates under a progress including their impact;
written charter adopted by the board of and
directors, and has been vested with all the • Monitor implementation and
powers necessary to effectively discharge adherence to the CSR policy of
its responsibilities. the company from time to time.
The committee's primary responsibilities are During the financial year, the
to: committee met four times. It also
• Review investor complaints and their reviewed
redressal; and apprised the board on the
• Review of queries received from CSR budget and spent, key
investors; discussions and recommendations
• Review of work done by the share made at such meetings and shared
transfer agent including their service information on the overall CSR
standards; initiatives undertaken by the
• Review corporate actions related to company.
security holders; and
PRASAD R MENON
• Review investor engagement
Chairman, Corporate Social
plans/initiatives and movement in
Responsibility Committee
shareholdings and ownership structure.
Place:
The committee met four times during the
Hyderabad
financial year. In addition to the fulfilment
Date: May 13,
of its normal responsibilities as described
2021
above, it also reviewed the functioning of
the company’s secretarial and investor
relations functions. It apprised the board on
EXHIBIT
key discussions and recommendations 7 CEO’S DECLARATION ON
made at such committee meetings. COMPLIANCE WITH CODE OF
BUSINESS CONDUCT AND ETHICS
KALPANA MORPARIA Dr. Reddy’s Laboratories Limited
Chairperson, Stakeholders' Relationship has adopted a code of business
Committee conduct and ethics (‘COBE’ and
Place: Mumbai Date: ‘the code’) which applies to all
May 13, 2021 employees and directors of
the company, its subsidiaries and
EXHIBIT 6 REPORT affiliates. Under the code, it is the
OF THE CORPORATE SOCIAL responsibility of all employees and
RESPONSIBILITY (CSR) COMMITTEE directors to familiarize themselves
with the code and comply with its
To the shareholders of Dr. Reddy’s
standards.
Laboratories Limited
I hereby certify that the board
The corporate social responsibility (CSR)
members and senior management
committee of the board consists of three
personnel of
directors, including two executive
Dr. Reddy’s have affirmed
directors. The chairman is an independent
compliance with the code of the
director as defined under Indian laws,
company for the financial year
Listing Regulations and the New York Stock
2020-21.
Exchange Corporate Governance
EREZ ISRAELI
Chief Executive Officer
Place:
Hyderabad
Date: May 14,
2021

EXHIBIT

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 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

best of our knowledge and belief, hereby

certify that: INDEPENDENT AUDITOR’S The Guidance Note on Reports or 8. The above-mentioned procedures include Accordingly, we do not accept or Dr. Reddy’s Laboratories Limited having
A. We have reviewed the financial REPORT ON COMPLIANCE Certificates for Special Purposes examining evidence supporting assume any liability or any duty of care CIN (Corporate Identification Number)
statements including the cash Now WITH THE CONDITIONS OF requires that we comply with the ethical the particulars in the Corporate or for any other purpose or to any other L85195TG1984PLC004507 and having
statement (standalone and consolidated) CORPORATE GOVERNANCE AS requirements of the Code of Ethics Governance Report on a test basis. party to whom it is shown or into registered office at 8-2-337, Road No.3,
for the financial year ended March 31, PER PROVISIONS OF CHAPTER issued by the Institute of Chartered Further, our scope of work under this whose hands it may come without our Banjara Hills, Hyderabad-500034, Telangana
2021 and that these statements: IV OF SECURITIES AND Accountants of India. report did not involve us performing audit prior consent in writing. We have no (hereinafter referred to as ‘the Company’),
i. do not contain any materially untrue EXCHANGE BOARD OF INDIA 6. We have complied with the relevant tests for the purposes of expressing an responsibility produced before us by the Company for
statement or omit any material fact (LISTING OBLIGATIONS applicable requirements of the Standard opinion on the fairness or accuracy of any to update this report for events and the purpose of issuing this Certificate, in
or contain statements that might be AND DISCLOSURE on Quality Control (SQC) 1, Quality of the financial information or the financial circumstances occurring after the date accordance with Regulation 34(3) read
misleading; and REQUIREMENTS) Control for Firms that Perform Audits statements of the Company taken as a of this report. with Schedule V Para-C clause (10)(i) of the
ii. together present a true and fair view REGULATIONS, 2015, AS and Reviews of Historical Financial whole. Securities Exchange Board of India (Listing
of the company’s affairs and are in AMENDED Information, and Other Assurance and
For S.R. BATLIBOI & ASSOCIATES LLP Obligations and Disclosure Requirements)
OPINION Chartered Accountants Regulations, 2015.
compliance with existing The Members of Dr. Reddy’s Related Services Engagements. 9. Based on the procedures performed by ICAI Firm Registration Number: In our opinion and to the best of our
accounting standards, applicable Laboratories Limited. 7. The procedures selected depend on us, as referred in paragraph 7 above, 101049W/E300004 information and according to the verifications
laws and regulations. 8-2-337, Road No. 3, Banjara Hills the auditor’s judgement, including the and according to the information and per S BALASUBRAHMANYAM
Hyderabad – 500 034 explanations given to us, we are of the (including Director Identification Number
B. There are no transactions entered into assessment of the risks associated Partner
opinion that the Company has (DIN) status at the portal www.mca.gov.in)
by the company during the year, which 1. The Corporate Governance Report in compliance of the Corporate Membership Number: 053315
complied with the conditions of as considered necessary and explanations
are fraudulent, illegal or violate the prepared by Dr. Reddy’s Laboratories Governance Report with the applicable UDIN: 21053315AAAABM6039
Corporate Governance as specified in furnished to us by the Company and its
company’s code of business conduct Limited (hereinafter the “Company”), criteria. Summary of procedures
the Listing Regulations, as applicable Place of Signature: Chennai officers, we hereby certify that none of the
and ethics. contains details as specified performed include:
for the year ended March 31, 2021, Date: May 14, 2021 Directors on the Board of the Company
in regulations 17 to 27, clauses (b) to (i) i. Read and understood the information
C. We accept the responsibility for as stated below (in table) for the Financial
of sub – regulation (2) of regulation 46 prepared by the Company and referred to in paragraph 4 above.
establishing and maintaining internal Year ending on 31st March, 2021 have
controls for financial reporting and that and para C, D, and E of Schedule V included in its Corporate PRACTICING COMPANY
OTHER MATTERS AND RESTRICTION been debarred or disqualified from being
we have evaluated the effectiveness of of the Securities and Exchange Board Governance Report; SECRETARY’S CERTIFICATE
ON USE appointed or continuing as Directors of
internal control systems of the company of India (Listing Obligations and ii. Obtained and verified that the OF NON-DISQUALIFICATION
10.This report is neither an assurance as to Companies by the Securities and Exchange
pertaining to financial reporting and Disclosure Requirements) Regulations, composition of the Board of OF DIRECTORS
the future viability of the Company nor the Board of India, Ministry of Corporate
2015, as amended (“the Listing Directors with respect to executive (pursuant to Regulation 34(3) and Schedule
have disclosed to the auditors and the Affairs or any such other Statutory
Regulations”) (‘Applicable criteria’) for and non- executive directors has been efficiency or effectiveness with which the V Para C clause (10)(i) of the SEBI (Listing
audit committee, deficiencies in the Authority.
the year ended March 31, 2021 met throughout the reporting period; management has conducted the affairs of Obligations and Disclosure Requirements)
design or operation of such internal
as required by the Company for annual iii. Obtained and read the Register of the Company. Regulations, 2015) Ensuring the eligibility for the appointment/
controls, if any, of which we are aware
submission to the Stock exchange. Directors as on March 31, 2021 and 11.This report is addressed to and provided continuity of every Director on the Board is
and the steps we have taken or propose To,
verified that at least one independent to the members of the Company solely the responsibility of the management of the
to take to address these deficiencies. The Members,
MANAGEMENT’S RESPONSIBILITY woman director was on the Board of for the purpose of enabling it to comply Company. Our responsibility is to express an
D. We have disclosed, wherever applicable, 2. The preparation of the Corporate Dr. Reddy’s Laboratories Limited,
Directors throughout the year; with its obligations under the Listing opinion on these, based on our verification.
to the auditors and the audit committee: Governance Report is the 8-2-337, Road No.3, Banjara
iv. Obtained and read the minutes of the Regulations with reference to compliance This certificate is neither an assurance as to
i. That there were no deficiencies in responsibility of the Management of Hills, Hyderabad-500034,
following committee meetings/other with the relevant regulations of Corporate the future viability of the Company nor of the
the design or operations of internal the Company including the preparation Telangana.
meetings held April 01, 2020 to Governance and should not be used by efficiency or effectiveness with which the
controls that could adversely and maintenance of all relevant March 31, 2021: We have examined the relevant registers, management has conducted the affairs of the
any other person or for any other purpose.
affect the company’s ability to supporting records and documents. (a) Board of Directors; records, forms, returns and disclosures Company.
record, process, summarize and This responsibility also includes the (b) Audit committee; received from the Directors of
report financial data including any FOR R & A ASSOCIATES
design, implementation and (c) Annual General meeting (AGM);
maintenance SL NO DATE OF APPOINTMENT IN COMPANY
of internal control relevant to the NAME OF DIRECTOR DIN (G RAGHU BABU)
corrective actions; preparation and presentation of the (a) Nomination Governance and 1. Satish Reddy Kallam 00129701 January 18, 1993 PARTNER
ii. that there are no material weaknesses Compensation committee; FCS. NO.# 4448, C.P. # 2820
Corporate Governance Report.
in the internal controls over financial Chartered Accountants of India (b)Stakeholders Relationship committee; 2. Venkateswara Prasad Gunupati
reporting; 3. The Management along with the Board (“ICAI”). (c) Science, Technology and Operation committee; 00057433 April 8,
iii. that there are no significant changes of Directors are also responsible for (d) Corporate Social Responsibility committee; and 1986
in internal control over financial ensuring that the Company complies (e) Risk management committee.
reporting during the year; with the conditions of Corporate v.3. Obtained
Bruce necessary
Leonard Andrews Carter
declarations from the02331774 July 21, 2008
directors of the Company. Place: Hyderabad
iv. all significant changes in the vi.4.Obtained
KalpanaandJaisingh Morparia
read the policy adopted by00046081
the Company for June 5, 2007
related Date: May 11, 2021
Governance as stipulated in the Listing
accounting policies during the year, Regulations, issued by the Securities and 5. party transactions.
Sridar Arvamudhan Iyengar 00278512 August 22, 2011
if any, and that the same have been Exchange Board of India. vii. Obtained the schedule of related party transactions during the year
6. Bharat Narotam Doshi 00012541 May 11, 2016
disclosed in the notes to the and balances at the year end. Obtained and read the minutes of the
financial statements; and AUDITOR’S RESPONSIBILITY 7. auditPrasad Raghava
committee Menon
meeting 00005078
wherein such related Octoberhave
party transactions 30, 2017
v. that there are no instances of 4. Pursuant to the requirements of the 8. beenLeo pre-approved
Puri prior by the audit committee.
01764813 October 25, 2018
significant fraud of which we have Listing Regulations, our responsibility viii. Performed necessary inquiries with the management and also
9. Shikha Sanjaya Sharma 00043265 January 31, 2019
become aware of and involvement is to provide a reasonable assurance obtained necessary specific representations from management.
therein of the management or an in the form of an opinion whether 10. Allan Grant Oberman 08393837 March 26, 2019
employee having a significant role the Company has complied with the
in the company’s internal control conditions of Corporate Governance as Note: Date of appointment of all the directors are original date of
appointment as per MCA records.
system over financial reporting. specified in the Listing Regulations.
EREZ ISRAELI 5. We conducted our examination of the
Chief Executive Officer Corporate Governance Report in
accordance with the Guidance Note
PARAG AGARWAL
on Reports or Certificates for Special
Chief Financial Officer
Purposes and the Guidance Note on
Place: Hyderabad Certification of Corporate Governance,
Date: May 14, 2021 both issued by the Institute of

6 6
UDIN: F004448C000279351

6 6
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

ADDITIONAL SHAREHOLDERS' INFORMATION TABLE 1 | PERSONS HOLDING 1% OR MORE OF THE EQUITY SHARES IN THE COMPANY AS ON MARCH 3
NAME NO. OF SHARES %
CONTACT INFORMATION INDIAN RETAIL INVESTORS E-VOTING DATES Dr. Reddy's Holdings Limited 41�325�300 24�85
REGISTERED AND CORPORATE OFFICE Mr. Sandeep Poddar The cut-off date for the purpose of Mitsubishi UFJ Financial Group, Stewart Investors & their associates 7�769�465 4�67
Dr. Reddy’s Laboratories Limited Company Secretary determining the shareholders eligible for 4�633�802 2�79
8-2-337, Road No. 3, Banjara Blackrock and their associates
Tel: +91-40-4900 2222 e-voting is Tuesday, July 20, 2021.
Hills Fax: +91-40-4900 SBI Mutual Fund and their associates 4�123�231 2�48
Hyderabad 500 034, Telangana, India 2999 The e-voting commences on Saturday, July Aditya Birla Sun Life Mutual Fund and their associates 3�233�048 1�94
Tel: +91-40-4900 2900 24, 2021, at 9.00 am (IST) and ends on
E-mail ID: shares@drreddys.com Mirae Asset Mutual Fund and their associates 2�976�083 1�79
Fax: +91-40-4900 2999 Tuesday, July 27, 2021, at 5.00 pm (IST).
Government of Singapore 2�773�174 1�67
Website: www.drreddys.com
CIN: L85195TG1984PLC004507
ANNUAL GENERAL MEETING INTERNATIONAL SECURITIES ICICI Prudential Life Insurance Company Limited 2�549�613 1�53
Date: Wednesday, July 28, 2021
E-mail ID: shares@drreddys.com IDENTIFICATION NUMBER (ISIN) NPS Trust and their associates 2�046�925 1�23
Time: 9.00 am (IST)
ISIN is a unique identification number of a DSP Mutual Fund and their associates 1�826�609 1�10
Mode: Through Video Conference (VC)
REPRESENTING OFFICERS facility/Other Audio Visual Means (OAVM)
traded scrip. This number has to be quoted
UTI Mutual Fund and their associates 1�825�177 1�10
Correspondence to the following officers in each transaction relating to the
may be addressed at the registered and Ministry of Corporate Affairs (MCA) vide dematerialized securities of the company. (1)
Does not include ADR holding.
corporate office of the company. circular no. 14/2020 dated April 8, 2020, The ISIN number of our equity shares is
general circular no. 17/2020 dated April 13, INE089A01023.
COMPLIANCE OFFICER UNDER 2020, circular no. 20/2020 dated May 5, TABLE 2 | EQUITY HISTORY OF THE COMPANY SINCE INCORPORATION OF THE COMPANY UP TO MARCH 31,
SECURITIES AND EXCHANGE BOARD
OF INDIA (LISTING OBLIGATIONS
2020, and general circular no. 02/2021 CUSIP NUMBER FOR ADRs 2021
dated January 13, 2021, has enabled The committee on uniform security
AND DISCLOSURE REQUIREMENTS) DATE/ CANCELLED/
convening of annual general meeting identification procedures (CUSIP) of the PARTICULARS ISSUED CUMULATIVE
REGULATIONS, 2015 AND NODAL FINANCIAL YEAR EXTINGUISHED
(AGM) through VC/OAVM without American Bankers Association has 24-Feb-84 Issue to promoters 200 200
OFFICER UNDER IEPF
requiring the shareholders to physically developed a numbering system for
Mr. Sandeep Poddar 22-Nov-84 Issue to promoters 243�300 243�500
assemble at a common venue. securities. A CUSIP number uniquely
Company Secretary identifies a security and its issuer and this 14-Jun-86 Issue to promoters 6�500 250�000
Tel: +91-40-4900 2222 Shareholders can attend the proceedings is recognized globally by organizations 09-Aug-86 Issue to public 1�116�250 1�366�250
Fax: +91-40-4900 of AGM by logging on the NSDL e- adhering to standards issued by the 30-Sep-88 Forfeiture of 100 shares 100 1�366�150
2999 voting system at www.evoting.nsdl.com International Securities Organization. 09-Aug-89 Rights issue 819�750 2�185�900
E-mail ID: spoddar@drreddys.com Our ADRs carry the CUSIP no. 256135203.
DIVIDEND 16-Dec-91 Bonus issue (1:2) 1�092�950 3�278�850
ADR INVESTORS/INSTITUTIONAL 17-Jan-93 Bonus issue (1:1) 3�278�850 6�557�700
INVESTORS/FINANCIAL ANALYSTS The board of directors of the company has DESCRIPTION OF
proposed a dividend of ₹ 25/- on equity 10-May-94 Bonus issue (2:1) 13�115�400 19�673�100
Mr. Amit Agarwal
share of face value of ₹ 5/- each. The
VOTING RIGHTS
All equity shares issued by the company 10-May-94 Issue to promoters 2�250�000 21�923�100
Head - Investor dividend, if declared by the shareholders at
Relations Tel: +91-40- the 37th AGM scheduled to be held on July carry equal voting rights. 26-Jul-94 GDR underlying equity shares 4�301�076 26�224�176
4900 2135 Fax: +91-40- 28, 2021, will be paid on or after August 2, 29-Sep-95 Standard Equity Fund Limited shareholders on merger 263�062 26�487�238
4900 2999 2021. PERSONS HOLDING OVER 1% OF 30-Jan-01 Cheminor Drugs Limited shareholders on merger 5�142�942 31�630�180
E-mail ID: amita@drreddys.com THE SHARES 30-Jan-01 Cancellation of shares held in Cheminor Drugs Limited on merger 41�400 31�588�780
MEDIA BOOK CLOSURE DATES Table 1 gives the names of the persons 11-Apr-01 ADR underlying equity shares 6�612�500 38�201�280
The dates of book closure are from Tuesday, who hold more than 1% of equity shares of
Ms. Archana Bhaskar 09-Jul-01 GDR conversion into ADR 38�201�280
July 13, 2021, to Thursday, July 15, 2021, the company as on March 31, 2021.
Chief Human Resource Officer and Head 24-Sep-01 American Remedies Limited shareholders on merger 56�694 38�257�974
- Corporate Communications (both days inclusive) for the purpose of
payment of dividend. 25-Oct-01 Sub-division of one equity share of ₹ 10/- into two equity shares of ₹ 5/- 76�515�948
Tel: +91-40-4900 2222
2004-05 Allotment pursuant to exercise of stock options 3�001 76�518�949
Fax: +91-40-4900
2999 2005-06 Allotment pursuant to exercise of stock options 175�621 76�694�570
E-mail ID: archanabhaskar@drreddys.com 2006-07 Allotment pursuant to exercise of stock options 63�232 76�757�802
30-Aug-06 Bonus issue (1:1) 76�757�802 153�515�604
FINANCIAL CALENDAR 22-Nov-06 ADR underlying equity shares 12�500�000 166�015�604
29-Nov-06 ADR underlying equity shares (green shoe option) 1�800�000 167�815�604
TENTATIVE CALENDAR FOR DECLARATION OF FINANCIAL RESULTS IN FY2022
2006-07 Allotment pursuant to exercise of stock options 96�576 167�912�180
For the quarter ending June 30, 2021 Last week of July 2021 2007-08 Allotment pursuant to exercise of stock options 260�566 168�172�746
2008-09 Allotment pursuant to exercise of stock options 296�031 168�468�777
For the quarter and half-year ending September 30, 2021 Last week of October 2021
2009-10 Allotment pursuant to exercise of stock options 376�608 168�845�385
For the quarter and nine months ending December 31, Last week of January 2022 2010-11 407�347 169�252�732
Allotment pursuant to exercise of stock options
2021 For the year ending March 31, 2022 Third week of May 2022 2011-12 Allotment pursuant to exercise of stock options 307�614 169�560�346
AGM for the year ending March 31, 2022 Last week of July 2022 2012-13 Allotment pursuant to exercise of stock options 276�129 169�836�475
2013-14 Allotment pursuant to exercise of stock options 272�393 170�108�868
2014-15 Allotment pursuant to exercise of stock options 272�306 170�381�174
LISTING ON STOCK EXCHANGES AND STOCK CODES 2015-16 Allotment pursuant to exercise of stock options 226�479 170�607�653
Buyback of equity shares 5�077�504 165�530�149
STOCK CODE
DETAILS OF STOCK EXCHANGE Allotment pursuant to exercise of stock options 211�564 165�741�713
EQUITY SHARESADRs
2017-18 Allotment pursuant to exercise of stock options 169�194 165�910�907
BSE Limited (BSE), P J Towers, Dalal Street, Fort, Mumbai 400 001, India 500124 - 2018-19 155�041 166�065�948
Allotment pursuant to exercise of stock options
National Stock Exchange of India Limited (NSE), Exchange Plaza, C-1, Block G, DRREDDY-EQ - 2019-20 Allotment pursuant to exercise of stock options 106�134 166�172�082
Bandra Kurla Complex, Bandra (E), Mumbai 400 051, India 2016-17
2020-21 Allotment pursuant to exercise of stock options 129�149 166�301�231
New York Stock Exchange Inc. (NYSE), 11, Wall Street, New York, 10005, USA 1. Listing fees to the Indian stock exchanges for listing of equity shares have been paid for the FY2022.
2. Listing fees to the NYSE for listing of ADRs has been paid for the CY2021.
3. The stock code on Reuters is REDY.NS and on Bloomberg is DRRD:IN.
NSE IFSC Limited, Unit No. 1201, Brigade International Financial Centre, 12th
Floor, Block-14, Road 1C, Zone-1, GIFT SEZ, Gandhinagar, Gujarat 382355, India FY2021 represents fiscal year 2020�21� from April 1� 2020� to March 31� 2021� and analogously for FY2020 and other such labeled years.
Notes:

7 7
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
- RDY

- DRREDDY

7 7
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

CHART 1 | MOVEMENT OF THE COMPANY’S SHARE PRICE ON DEPOSITORIES to the RTA of the company. Further, demat account details including client be issued only in demat mode. Therefore,
NSE AND NIFTY 50 INDEX OVERSEAS DEPOSITORY OF ADRs shareholders may cancel/vary their master list, either to the company or to the members holding shares in physical form
J.P. Morgan Chase & Co. nomination already made, in form SH-14 by RTA. On receipt and verification of these are requested to consider dematerilising
P.O. Box 64504, St. Paul sending it to the RTA. Those holding shares share certificate(s), the shares will get their holdings, for their own benefit.
190
MN 55164-0504, USA in dematerialized form may contact their credited to the demat account of the
Tel: +1-651 453 2128 Pursuant to the provisions of Section 46 of
180 respective depository participant (DP) to shareholders.
the Companies Act, 2013 ("the Act"), read
avail the nomination facility.
170 INDIAN CUSTODIAN OF ADRs with Rule 6(2)(a) of the Companies (Share
J.P. Morgan Chase Bank NA SHARE TRANSFER SYSTEM Capital and Debentures) Rules, 2014,
160 EXCHANGE OF SHARE All queries and requests relating to share
India Sub-Custody, 6th Floor duplicate share certificates, in lieu of those
150 Paradigm B Wing, Mindspace, Malad CERTIFICATES transfers/transmissions may be addressed that are lost or destroyed, should only be
(West) Mumbai 400 064, Maharashtra, Standard Equity Fund Limited (SEFL), to our RTA. issued with the prior consent of the board.
140
India Cheminor Drugs Limited (CDL) and To expedite the process of share transfers, Therefore, based on circular no. 19/2014
130 Tel: +91-22-6649 2617 American Remedies Limited (ARL) merged dated June 12, 2014, issued by the Ministry
the company secretary has been delegated
Fax: +91-22-6649 2509 with Dr. Reddy’s Laboratories Limited in the of Corporate Affairs, and consequent to
120 with the power to attend to the share
E-mail ID: india.custody.client.service@ years 1995, 2000 and 2001 respectively. transfer formalities at regular intervals. delegation of power of issuing duplicate
110 jpmorgan.com Also, during the year 2001, the company share certificates by the board of directors
In terms of Regulation 40(1) of SEBI Listing
100 sub-divided the face value of its equity Regulations, as amended from time to time, to the stakeholders' relationship committee,
REGISTRAR AND TRANSFER shares of ₹ 10/- into ₹ 5/-. Hence, the members may please note that shares can the committee attends to such requests at
OCT-20

JAN-21
AUG-20
APR-20

MAY-20

NOV-20

DEC-20
JUN-20

SEP-20

FEB-21

MAR-21
JUL-20

AGENT (RTA) FOR EQUITY share certificates of the above three be transferred only in dematerialised form regular intervals.
companies and old share certificates of ₹ with effect from April 1, 2019, except in
SHARES We periodically review the operations of our
DR. REDDY'S SHARE PRICE NIFTY 50 INDEX 10/- face value are no longer valid. case of request received for transmission or
Notes: (COMMON AGENCY FOR DEMAT AND RTA. The number of shares transferred/
PHYSICAL SHARES)
1. All values are indexed to 100 as on April 1, 2020. Shareholders who are still holding the share transposition of shares. Further, SEBI has transmitted in physical form during the last
Bigshare Services Private Limited
2. Nifty 50 is a diversified 50 stock index accounting for 13 sectors of the Indian economy. Nifty 50 is owned and managed
certificates of the above three companies or fixed March 31, 2021 as the cut-off date two financial years are given in Table 6.
by NSE Indices Limited, India’s specialized company focused upon the index as a core product. CIN: U99999MH1994PTC076534
of ₹ 10/- face value, are requested to for re-lodgement of transfer deeds and the
306, Right Wing, 3rd Floor, Amrutha
submit those share certificates along with shares that are re-lodged for transfer shall
Ville Opp. Yashoda Hospital, Rajbhavan
CHART 2 | MOVEMENT OF THE COMPANY’S ADR PRICES Road Hyderabad 500 082, Telangana, their
AND S&P ADR INDEX India Tel: +91-40-2337 4967
Fax: +91-40-2337 0295
E-mail ID: bsshyd@bigshareonline.com | HIGH, LOW AND NUMBER OF SHARES TRADED PER MONTH ON BSE, NSE AND NYSE DURING
TABLE 3
190
FY2021
180
EQUITY HISTORY OF BSE NSE NYSE
170 MONTH
THE COMPANY HIGH LOW NO. OF HIGH LOW NO. OF HIGH LOW NO. OF
160 Table 2 lists the equity history of the (`) (`) SHARES (`) (`) SHARES (US$) (US$) ADRs
(1)
company since the incorporation of the
150 Apr-20 4�095�00 3�027�55 746�155 4�094�30 3�025�10 29�689�756 53�23 38�71 5�459�279
company up to March 31, 2021.
140 May-20 4�099�90 3�613�45 664�811 4�132�20 3�613�85 24�331�385 53�73 48�56 4�746�633

130 STOCK DATA Jun-20 4�189�35 3�888�40 640�277 4�190�00 3�886�00 20�727�535 55�19 51�83 4�231�035
Table 3 gives the monthly high/low and Jul-20 4�558�70 3�815�80 973�115 4�560�00 3�814�00 29�069�616 60�95 51�12 3�914�978
120 the total number of shares/ADRs traded on Aug-20 4�754�30 4�230�10 823�335 4�758�60 4�216�65 22�575�369 62�60 57�54 2�543�632
110 monthly basis on the BSE, NSE and the Sep-20 5�514�65 4�233�85 2�522�272 5�512�65 4�232�00 89�387�168 73�50 57�86 4�438�302
NYSE during FY2021.
100 Oct-20 5�321�05 4�832�40 1�338�160 5�322�80 4�831�00 45�219�718 71�30 64�38 3�994�187
Chart 1 gives the movement of company’s 5�018�70 4�658�80 1�041�579 5�017�00 4�656�30 30�410�549 3�649�410
AUG-20

OCT-20

JAN-21
MAY-20

68�54 62�42
NOV-20

DEC-20
JUN-20

Nov-20
SEP-20

FEB-21
APR-20

MAR-21
JUL-20

share price on NSE vis-à-vis NIFTY 50 Index Dec-20 5�273�95 4�805�90 1�013�600 5�274�20 4�806�00 27�494�796 71�43 65�09 2�629�909
during FY2021. 5�443�35 4�550�00 841�355 5�443�50 4�550�00 17�177�042 3�453�127
Jan-21 73�39 61�13
DR. REDDY'S SHARE PRICE S&P ADR INDEX
Notes: Chart 2 gives the movement of company’s Feb-21 4�909�30 4�261�00 1�524�210 4�909�95 4�377�00 30�726�072 66�50 58�37 4�989�326
1. All values are indexed to 100 as on April 1, 2020. ADR price on NYSE vis-à-vis S&P ADR Index 4�582�85 4�135�90 805�451 4�583�35 4�135�00 19�169�389 57�54 4�697�127
ADR is equal to one equity share. There was no trading in the company’s ADRs on NSE IFSC except 20 ADRs were traded on December62�60
Mar-21
(1)
2. The S&P ADR Index is based on the non-US stocks comprising the S&P Global 1200 traded in the US exchanges. For One 9, 2020.
details of the methodology used to compute this index please visit www.adr.com. during FY2021.
Chart 3 gives the premium in percent on
company’s ADR traded on NYSE compared TABLE 4 | DISTRIBUTION OF SHAREHOLDING ON THE BASIS OF CATEGORY
CHART 3 | PREMIUM IN PERCENT ON COMPANY’S ADR TRADED to the share price quoted at NSE during
ON NYSE VERSUS SHARE PRICE QUOTED AT NSE AS ON MARCH 31, 2021 AS ON MARCH 31, 2020
FY2021.
CATEGORY NO. OF % OF NO. OF % OF % CHANGE
4
SHARES TOTAL SHARES TOTAL
SHAREHOLDING PATTERN AS Promoters’ Holding
(1)

ON MARCH 31, 2021 - Individuals/HUF 3�135�828 1�88 3�133�228 1�89 (0�01)

2 Tables 4 and 5 gives the data on - Companies 41�325�300 24�85 41�325�300 24�87 (0�02)
shareholding classified on the basis of Sub-total 44�461�128 26�73 44�458�528 26�76 (0�03)
category and distribution of ownership. Indian financial institutions 1�442�868 0�87 8�896�044 5�35 (4�48)
0
Banks 112�089 0�07 224�457 0�14 (0�07)
Mutual funds/UTI 22�138�337 13�31 14�539�166 8�75 4�56
-2
DIVIDEND HISTORY Foreign holdings
Chart 4 shows the dividend history of the - Foreign institutional investors/foreign portfolio investors 48�276�060 29�03 50�098�326 30�15 (1�12)
company from the FY2011 to FY2021. - Non resident Indians 1�666�509 1�00 1�653�054 0�99 0�01
-4
- ADRs 20�299�272 12�21 23�429�546 14�10 (1�89)
NOMINATION FACILITY - Foreign nationals 1�459 0�00 4�199 0�00 -
-6 Shareholders holding physical shares may, if Sub-total 93�936�594 56�49 98�844�792 59�48 (2�99)
Indian public and corporates 27�903�509 16�78 22�868�762 13�76 3�02
OCT-20

JAN-21
AUG-20
MAY-20

NOV-20

they so desire, send their nominations in form

DEC-20
JUN-20

SEP-20

FEB-21
APR-20

MAR-21
JUL-20

SH-13 of the Companies (Share Capital and Total 166�301�231 100�00 166�172�082 100�00 -
Debentures) Rules, 2015, as amended,

7 7
 Dr. Reddy’s Laboratories (1) Company Overview Statutory Reports Financial Annual Report 2020-
Note: Premium has been calculated on a daily basis using RBI reference exchange rate. Change in percentage and number of shares are due to ESOP allotment and purchase of 2,600 shares by Mr. G Sharath Chandra Reddy, respectively.

7 7
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

CHART 4 | DIVIDEND HISTORY FY2011-21 (%) DEMATERIALIZATION OF In addition to the above, for each quarter facility to all its shareholders, to enable postal transit/fraudulent encashment are
of FY2021, a qualified practicing company them to cast their votes electronically. The avoided. This also expedites credit of
SHARES
secretary carried out the reconciliation of company engages the services of NSDL for dividend directly to the shareholder’s
FY2021 PROPOSED 500% The company’s scrip forms part of the share capital audit to reconcile the total the purpose of providing such e-voting account as compared to the payment
compulsory dematerialization segment for admitted share capital held with NSDL and facility to all its shareholders. The through physical dividend warrant.
FY2020 500% all investors with effect from February 15, CDSL and the total issued and listed share shareholders have the option to vote either Shareholders are advised to refer to the
1999. To facilitate easy access of the capital. The reports confirm that the total by physical ballot or e-voting. Investor Handbook on the company’s
FY2019 400% dematerialized system to the investors, we issued/paid-up share capital is in agreement
website: www.drreddys.com, for further
have signed up with both the depositories in with total number of shares in physical form The company dispatches the postal ballot
and dematerialized form held with NSDL details on how to avail this facility.
FY2018 400% India — the National Securities Depository notices and forms along with self-addressed
Limited (NSDL) and the Central Depository and CDSL. business reply envelopes to its shareholders
FY2017 400% Services (India) Limited (CDSL) and have whose names appear on the register of UNCLAIMED DIVIDENDS/
established connectivity with the OUTSTANDING ADRs AND THEIR members/list of beneficiaries as on the cut- INTEREST
FY2016 400% depositories through our RTA. off date. The postal ballot notice is sent to
IMPACT ON EQUITY SHARES the shareholders in electronic form to the e-
Pursuant to Section 125 of the Act,
Chart 5 gives the breakup of dematerialized Our ADRs are traded in the US on New York unclaimed dividend amounts for the FY2013
FY2015 400% mail IDs registered with the DPs/RTA. of ₹ 7,676,380/- and bonus debentures
shares and shares in physical form as on Stock Exchange, Inc. (NYSE) under the
March 31, 2021, compared with March 31, ticker symbol ‘RDY’ and also listed in India Voting rights are reckoned on the paid-up redemption amount along with third and
FY2014 360%
2020. Dematerialization of shares is done on NSE IFSC Ltd. under the ticker symbol value of the shares registered in the names final year’s interest on debentures of
through RTA and the dematerialization ‘DRREDDY’. Each ADR is represented by one of the shareholders as on the cut- off date. ₹ 20,259,899/- has been transferred to the
FY2013 300% equity share. As on March 31, 2021, there
process is generally completed within 10 Shareholders desiring to exercise their votes general revenue account of the Central
were approximately 63 registered holders by physical postal ballot forms are Government/Investor Education and
FY2012 days from the date of receipt of a valid
275% and 15,257 beneficial shareholders of ADRs requested to return the forms duly Protection Fund (IEPF).
dematerialization request along with the evidencing 20,299,272 ADRs.
relevant documents. completed and signed, to the scrutinizer on The dividends for FY2014 which are
FY2011 225% or before the closing of the voting period. unclaimed for seven years will be
SECRETARIAL AUDIT QUERIES AND REQUESTS Shareholders desiring to exercise their votes transferred to IEPF. Table 9 gives the
RECEIVED FROM by electronic mode are requested to vote
Pursuant to Section 204 of the Act, and transfer dates in this regard.
before close of business hours on the last
corresponding Rule 9 of the Companies SHAREHOLDERS IN FY2021
CHART 5 | BREAK UP OF SHARES IN ELECTRONIC AND PHYSICAL (Appointment and Remuneration of Table 7 gives details of the nature of
day of e-voting. The last date specified by Bonus debentures, issued by the company
FORM AS ON MARCH 31, 2021 AND MARCH 31, 2020 Managerial Personnel) Rules, 2014, a shareholder queries received and replied to the company for receipt of duly completed in the year 2011, matured on March 24,
(%) secretarial audit for FY2021 was carried out during FY2021. Pending requests as on postal ballot forms or e-voting is deemed to 2014. These were redeemed for cash at a
March 31, 2021, were under process of be the date of passing of the resolution. face value of ₹ 5/- each along with third and
by M/s. Makarand M. Joshi & Co.,
final
ELECTRONIC -

year’s interest.
NSDL

95.51 practicing company secretaries, Mumbai, statutory formalities and were subsequently The scrutinizer submits his report to the
India (certificate of practice no. 3663) attended to. chairman of the board of directors or any Shareholders who have not claimed the
97.09 having more than 21 years of experience. person authorized by him, after the dividend(s) amount are, therefore,
The secretarial audit report forms a part of completion of scrutiny, and the requested to do so before they are
DATE AND VENUE OF LAST
this annual report. consolidated results of the voting by postal statutorily transferred to the IEPF.
THREE ANNUAL GENERAL ballot are then announced. The results are
In accordance with the SEBI Circular dated MEETINGS The shareholders who have not cashed their
also displayed on the company’s website:
PHYSICALELECTRONIC -

4.14 February 8, 2019, the company has also dividend are requested to immediately
CDSL

Table 8 gives the details of date, time, www.drreddys.com, besides being

obtained a Secretarial Compliance Report approach the company's RTA, for making
2.54 location and business transacted through communicated to the stock exchanges,
from M/s. Makarand M. Joshi & Co. payment through electronic bank transfer.
special resolutions at last three annual depository and RTA.
confirming compliances with all In cases where bank details for making
general meetings.
applicable SEBI Regulations, Circulars and electronic payment are not available, or
guidelines for the year ended March 31, DISCLOSURE ON LEGAL electronic payment instructions have failed
0.35 2021 2021. POSTAL BALLOT DETAILS
During the year, the company did not PROCEEDINGS PERTAINING TO or rejected by the bank, duplicate
warrant(s)/demand draft(s) may be issued
0.37 2020 propose any special resolution through SHARES
postal ballot. in lieu of the original warrant(s)/demand
There are three pending cases relating to
draft(s).
disputes over title of the shares of the
company, in which the company has been The information on unclaimed
PROPOSAL TO CONDUCT dividend/interest is available on the
made a party. These cases, however, are
not
TABLE 5 | DISTRIBUTION OF EQUITY SHAREHOLDING ACCORDING TO OWNERSHIP AS ON MARCH 31, POSTAL BALLOT FOR ANY material in nature. company’s website: www.drreddys.com
2021 NO. OF % OF NO. OF % OF MATTER IN THE ENSUING
SHARES HELD SHAREHOLDERS SHAREHOLDERS SHARES HELD SHAREHOLDING ANNUAL GENERAL MEETING NATIONAL ELECTRONIC TRANSFER OF UNDERLYING
1 – 5,000 222�489 97�58 6�742�433 4�05 There is no proposal to conduct postal CLEARING SERVICE (NECS)
ballot for any matter in the ensuing annual SHARES TO INVESTOR
5,001 – 10,000 2�089 0�92 1�537�852 0�92 general meeting. FACILITY FOR REMITTANCE OF EDUCATION AND PROTECTION
10,001 – 20,000 1�282 0�56 1�891�599 1�14 DIVIDEND ELECTRONICALLY FUND (IEPF)
20,001 – 30,000 457 0�20 1�141�232 0�69 PROCEDURE FOR POSTAL The company provides the facility for Pursuant to Section 124(6 ) of the Act, read
remittance of dividend to shareholders
30,001 – 40,000 313 0�14 1�095�860 0�66
BALLOT with Investor Education and Protection Fund
through NECS. Under this facility, Authority (Accounting, Audit, Transfer and
In compliance with the Listing Regulations
40,001 – 50,000 177 0�08 797�504 0�48 shareholders can receive dividends Refund) Rules, 2016, as amended, all shares
and Sections 108, 110 and other
electronically by way of direct credit to in respect of which dividend has not been
50,001 – 100,000 450 0�20 3�128�370 1�88 applicable provisions of the Act, read
their bank account. With this service, paid or claimed for seven consecutive
with applicable Rules, the company
100,001 & above 743 0�32 129�667�109 77�97 problems such as loss of dividend warrants years or more shall be transferred to IEPF.
provides e-voting
during
Total (excluding ADRs) 228�000 100�00 146�001�959 87�79 During the year, the company has
6 | SHARES
TABLEEquity TRANSFERRED/TRANSMITTED
shares underlying ADRs
(1)
IN PHYSICAL
1 FORM0�00 20�299�272 12�21 transferred (transmitted) 12,824 equity
shares held under 96 folios on which
Total
SHARES 228�001
TRANSFERRED/TRANSMITTED IN PHYSICAL FORM 100�00 166�301�231 100�00 FY2021 FY2020 dividend has not been paid or claimed for
(1) Held by beneficiαl owners outside Indiα� u mber of transfers*/transmissions
N
7 7
 Number of 6 26 seven
conse
shares 2�100 7�637 cutive
*Transfers processed during FY2021 years
were all lodged within prescribed time.
to
IEPF.

7 7
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

The company has sent individual notices to

dividends. If the shareholders do not claim Details of equity shares liable to be The dematerialized shares are held in an NON-COMPLIANCE ON PROCEDURE FOR CONVENING
the latest available addresses of the
the unpaid or unclaimed dividends and transferred to IEPF are available on the ‘unclaimed suspense account’ opened with
shareholders, whose dividends are lying
provide the requisite documents on or a depositary participant associated with
MATTERS RELATING TO AN EXTRAORDINARY GENERAL
company’s website: www.drreddys.com
unpaid/unclaimed for FY2014 along with CAPITAL MARKETS MEETING
before August 18, 2021, the shares held NSDL.
by
subsequent seven consecutive years’ them are liable to be transferred to IEPF. DEALING WITH SECURITIES Any corporate benefits accruing on There has been no instance of non- Pursuant to the provisions of Section 100 of
such
dividend, advising them to claim the compliance by the company on matters the Act, Companies (Management and
dividends on or before August 18, 2021. Any person, whose shares and unpaid/ WHICH HAVE REMAINED shares, viz. bonus shares, split etc., shall relating to capital markets for the last three Administration) Rules, 2014 and Secretarial
It has also published a notice in newspapers unclaimed dividends get transferred to the UNCLAIMED also be credited to an unclaimed suspense years. Standard on General Meeting (SS-2), an
inviting the shareholders’ attention. IEPF may claim the shares and Pursuant to Regulation 39(4) of Listing account, for a period of seven years and extraordinary general meeting (EGM) of the
unpaid/unclaimed dividends from the IEPF thereafter shall be transferred by the company may be called by a requisition
Shareholders who have not claimed their
Regulations read with Schedule VI of the FINANCIAL RESULTS ON THE
Authority in accordance with the said Regulations, the company has company to IEPF, in accordance with made by shareholders, either in writing or
dividends since 2013-14 can write to the prescribed procedure and submission of provisions of Section 124(5) and (6) of the COMPANY’S WEBSITE
dematerialized shares which have been through electronic mode, at least 21 clear
company’s RTA or at the registered office of relevant documents procedure. Act, and Rules made thereunder. The quarterly, half-yearly and annual results
returned undelivered by postal authorities days prior to the proposed date of such a
the company on or before August 18, 2021, of the company are displayed on its
and shares lying unclaimed after sub- Table 10 gives the details of the meeting. Such a requisition, signed by the
for making a valid claim for the unclaimed website: www.drreddys.com. Presentations
division. unclaimed shares as on March 31, 2021, requisitionists, shall set out the matters of
to analysts, as and when made, are
held by the company. consideration for which the meeting is to be
immediately placed on the website for the called and it shall be sent to the registered
TABLE 7 | SHAREHOLDER QUERIES AND PENDING COMPLAINTS RECEIVED AND REPLIED TO IN FY2021 The voting rights on such unclaimed shares benefit of the shareholders and public at office of the company.
shall remain frozen till the rightful owner large. Shareholders entitled to make requisition
SL. OPENING CLOSING
NO. NATURE BALANCE RECEIVED REPLIED BALANCE* claims these shares. Besides, the company also regularly for an EGM regarding any matter, shall be
1 Change of address - - - - provides relevant information to the stock those who hold not less than one tenth of
QUERIES AT ANNUAL GENERAL MEETING exchanges as per the requirements of the the paid-up share capital of the company on
2
Shareholders Request any
desiring for revalidation
information and
withissue of to
regard duplicate dividend
the accounts requested to write to the- company at e-mail
are warrants 96 ID: shares@drreddys.com
96 at an- early date so as to enable the management to keep the information Listing Regulations. the date of receipt of the requisition.
ready. The
3 queries relating to operational and financial
Request for sub-division of shares (exchange)performance may be raised at the AGM.2 16 18 -
4 Share transfers - - - - INFORMATION ON DIRECTOR PROCEDURE FOR NOMINATING
5 Transmission of shares - 5 5 - PROPOSED FOR APPOINTMENT/ A DIRECTOR ON THE BOARD
6 Split/consolidation of shares - - - -
REAPPOINTMENT/ Pursuant to section 160 of the Act, any
CONTINUATION person, or some shareholders intending to
7 Stop transfer - 24 24 - propose such person for appointment as a
The information is given in the chapter on
8 Power of attorney registration - - - - Corporate Governance and Notice of 37th director of the company, shall deposit a
AGM. signed notice signifying his/her candidature
9 Change of bank mandate - 59 59 - to the office of a director, at the registered
10 Correction of name - - - -
11 Dematerialization of shares - 110 110 -
TABLE 9 | DATES OF TRANSFER OF UNCLAIMED DIVIDEND ON SHARES/INTEREST AND
12 Rematerialization of shares - - - - REDEMPTION AMOUNT ON BONUS DEBENTURES
13 Issue of duplicate share certificates - 18 16 2 AMOUNT
DATE OF OUTSTANDING
FINANCIAL TYPE OF DUE FOR
14 Requests received from shareholders - 750 750 - DECLARATION/ AS ON MARCH
YEAR PAYMENT TRANSFER ON
PAYMENT 31, 2021
15 Complaints received through stock exchanges/SEBI etc. - 5 5 -
- 24 24 - 2013-14 Debenture redemption and 3rd & final year interest* 24-Mar-14 20�259�898�57 23-Mar-21
16 Claim of unclaimed share certificates
2013-14 Final dividend 31-Jul-14 8�709�606�00 30-Aug-21
* The company has since attended all the shareholders’ requests and queries which were pending as on March 31, 2021. The
above table does not include shareholders’ disputes, which are pending in various courts. 2014-15 Final dividend 31-Jul-15 9�282�820�00 30-Aug-22
2015-16 Final dividend 27-Jul-16 10�321�640�00 30-Aug-23
2016-17 Final dividend 28-Jul-17 15�603�860�00 31-Aug-24
TABLE 8 | LAST THREE ANNUAL GENERAL MEETINGS
2017-18 Final dividend 27-Jul-18 14�262�560�00 30-Aug-25
YEAR DATE AND TIME LOCATION SPECIAL RESOLUTION(S) PASSED
2018-19 Final dividend 30-Jul-19 14�294�360�00 5-Sep-26
2017-18 July 27, 2018 The Ballroom, Approval for reappointment of Mr. Anupam Puri (DIN: 00209113) as
• 2019-20 Final dividend 30-Jul-20 12�802�965�52 31-Aug-27
at 9.30 am (IST) Hotel Park Hyatt, an independent director for a second term of one year;
Road No. 2, Banjara • Approval for Dr. Reddy’s Employees Stock Option Scheme, 2018 (2018 *The unpaid debenture redemption and 3rd & final year interest amount was transferred to IEPF within a period of 30 days from the due date on April 9, 2021.
Hills, Hyderabad 500 ESOS);
034 • Grant of stock options to the employees of the subsidiary companies
under 2018 ESOS;
• Implementation of 2018 ESOS through Dr. Reddy’s Employees ESOS Trust
(Trust); and
• Authorization to the Trust for secondary acquisition of equity shares for
the purpose of stock options.

7 7
 TABLE 10 | UNCLAIMED SHARES AS ON MARCH 31, 2021
SL. NO. OF NO. OF
NO. PARTICULARS FOLIOS SHARES
i� No. of shareholders and the outstanding no. of unclaimed shares at the beginning of the year* 2�233 374�953
2018-19 July 30, 2019 ii� No. of shareholders who approached to claim the unclaimed shares during the year 56 6�378
at 9.30 am (IST) The Ballroom, • Approval for reappointment of Mr. Sridar Iyengar (DIN: 00278512) as
Hotel Park Hyatt, an independent director for a second term of four years; and iii� No. of shareholders who claimed and were given the unclaimed shares during the year 51 6�195
Road No. 2, Banjara Hills, • Approval for reappointment of Ms. Kalpana Morparia (DIN: 00046081) as iv� Aggregate no. of shareholders and the outstanding no. of unclaimed shares at the end of the year 2�182 368�758
Hyderabad 500 034 an independent director for a second term of five years.
2019-20 *This includes 2,040 shares under three folios dematerialized in April 2020, in the unclaimed suspense account.
July 30, 2020
at 9.00 am (IST) Held through Video • Continuation of directorship of Mr. Prasad R Menon (DIN: 00005078),
Conferencing (VC)/Other independent director, in terms of Regulations 17(1A) of the SEBI
Audio Visual Means (Listing Obligations and Disclosure Requirements) Regulations, 2015.
(OAVM)

7 7
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

office of the company, not less than 14

days before the shareholders’ meeting. COMMODITY PRICE RISK OR (e) Effected share transfers or transmissions PLANT/FACILITY LOCATIONS IN INDIA
FOREIGN EXCHANGE RISK and dispatched the certificates,
All directors’ nominations are considered wherever applicable within the time ACTIVE PHARMACEUTICAL FTO 2 - FORMULATIONS HYDERABAD FTO 11 - FORMULATIONS SRIKAKULAM
Appropriate disclosure on commodity price limit prescribed by various authorities;
by the nomination, governance and INGREDIENTS (API) FACILITIES PLANT PLANT
or foreign exchange risk and hedging
compensation committee of the company’s activities is given in note 2.28 of the notes to (f) Not exceeded the borrowing Sy No. 42, 43, 44P, 45, 46P, 53, 54 & 83, APIIC Industrial Estate,
board of directors, which entirely consists the standalone financial statement. or investment limits; and CTO 1 - API HYDERABAD PLANT Bachupally Village & Pydibheemavaram Village,
of independent directors. Plot No. 137, 138, 145 & 146, Mandal, Medchal-Malkajgiri Ranastalam Mandal, Srikakulam District,
(g) Paid dividend to the shareholders, S.V. Co-operative Industrial Estate, District, Telangana, Pin: 500 Andhra Pradesh, Pin: 532 409
CERTIFICATE FROM THE transferred the unpaid dividends and the IDA Bollaram, Jinnaram Mandal,
INFORMATION ON 090
COMPANY SECRETARY underlying shares in respect of which Sangareddy District, FTO 12 - FORMULATIONS BADDI PLANT
MEMORANDUM AND ARTICLES I, Sandeep Poddar, company secretary of dividend has remained unpaid or Telangana, Pin: 502 325 FTO 3 - FORMULATIONS HYDERABAD Village Kunjhal, PO - Barotiwala, Baddi,
OF ASSOCIATION Dr. Reddy’s Laboratories Limited, hereby unclaimed for seven consecutive years PLANT Tehsil Nalagarh Road, Solan District,
The company’s memorandum and articles of confirm that as on date of this certificate, to the Investor Education and Protection CTO 2 - API HYDERABAD PLANT Sy No. 41, Himachal Pradesh, Pin: 174 103
association are available on its website: the company has: Fund (IEPF) within the time limit and has Plot No. 75A, 75B, 105, 110, 111, 112 & 121/3, Bachupally Village &
www.drreddys.com. also complied with the provisions of the S.V. Co-operative Industrial Estate, Mandal, Medchal-Malkajgiri BIOLOGICS
(a) Complied with the provisions of IEPF Authority (Accounting, Audit,
applicable rules and regulations framed IDA Bollaram, Jinnaram Mandal, District, Telangana, Pin: 500 Survey No. 47, Bachupally Village & Mandal,
INVESTOR HANDBOOK/ Transfer and Refund) Rules, 2016, as Sangareddy District, 090
by the Securities and Exchange Board Medchal-Malkajgiri District,
amended. Telangana, Pin: 502 325
SHAREHOLDER SERVICES of India and the Companies Act, 2013 Telangana, Pin: 500 090
Please refer to the Investor Handbook on ("the Act"), as amended, effective as on The certificate is given by the undersigned FTO 6 - FORMULATIONS BADDI PLANT
the company’s website: www.drreddys.com, date, and applicable to the company; according to the best of his knowledge and CTO 3 - API HYDERABAD PLANT Village Khol, PO - Bhud, Baddi, RESEARCH AND DEVELOPMENT
for rights of shareholders, procedures belief and based on the available Plot No. 116, Nalagarh Road, Tehsil Nalagarh, FACILITIES IN INDIA
(b) Maintained all books of accounts and information and records, knowing that on S.V. Co-operative Industrial Estate, Solan District,
related to transfer/dematerialization/
statutory registers prescribed under the the faith and strength of what is stated IDA Bollaram, Jinnaram Mandal, Himachal Pradesh, Pin: 173 205
rematerialization/transmission of shares, INTEGRATED PRODUCT DEVELOPMENT
Act; above, full reliance will be placed on it by Sangareddy District,
nomination in respect of shareholding, ORGANISATION (IPDO)
change of address, unclaimed/unpaid (c) Filed all forms and returns and furnished the shareholders of the company. Telangana, Pin: 502 325 FTO 7 - FORMULATIONS DUVADDA Sy No. 42, 45, 46 & 54
dividend, shares underlying all necessary particulars to the Registrar PLANT Bachupally Village &
unpaid/unclaimed dividend, refund from of Companies and/or other authorities Sandeep Poddar CTO 5 - API NALGONDA PLANT Plot No. P1-P9, Phase III, Duvvada, Mandal, Medchal-Malkajgiri
IEPF, loss/misplacement of certificate(s), as required under the Act; Company Secretary Peddadevulapally, Tripuraram Mandal, VSEZ, Visakhapatnam, District, Telangana, Pin: 500
sub-division of shares, share certificates of Nalgonda District, Andhra Pradesh, Pin: 530 046 090
(d) Conducted the board meetings, Place: Hyderabad Telangana, Pin: 508 207
amalgamated companies, power of
attorney, registration of e-mail ID and shareholders' meeting and postal ballot Date: May 14, 2021
FTO 8 - FORMULATIONS BADDI PLANT IPDO, BENGALURU
registration of PAN/Bank details. as per the Act, and the minutes thereof
CTO 6 - API SRIKAKULAM PLANT Village Mauja Thana, PO - Bhud, 39-40, KIADB Industrial Area,
were properly recorded in the
Sy No. 5 to 9 & Baddi, Nalagarh Baddi Road, Electronic City Phase II,
respective minutes books;
Plot No. 5/1, 5/2, 5/3 & 5/4, Tehsil Nalagarh, Solan District, Hosur Road, Bengaluru,
APIIC, IDA Pydibheemavaram, Himachal Pradesh, Pin: 173 205 Karnataka, Pin: 560 100
Ransthalam Mandal, Srikakulam District,
FTO 9 - FORMULATIONS DUVADDA AURIGENE DISCOVERY TECHNOLOGIES
PLANT

PLANT/FACILITY LOCATIONS OUTSIDE INDIA Andhra Pradesh, Pin: 532 409 Plot No. Q1 to Q5, Phase III, LIMITED, BENGALURU
Duvvada, VSEZ, Visakhapatnam, 39-40, KIADB Industrial Area,
CTO SEZ - API SRIKAKULAM PLANT Andhra Pradesh, Pin: 530 046 Electronic City Phase II,
ACTIVE PHARMACEUTICAL FORMULATIONS MANUFACTURING RESEARCH AND DEVELOPMENT (SEZ) Hosur Road, Bengaluru,
INGREDIENTS (API) FACILITIES FACILITIES FACILITIES Pu1 & Developer Sector No. 28 & 34, FTO SEZ PU 1 - FORMULATIONS Karnataka, Pin: 560 100
Devunipalavalasa Village, SRIKAKULAM PLANT
API CUERNAVACA PLANT DR. REDDY’S LABORATORIES (UK) TECHNOLOGY DEVELOPMENT CENTRE, Ranastalam Mandal, Srikakulam District, Sector No. 9-14 & 17-20, AURIGENE PHARMACEUTICAL SERVICES
Industrias Quimicas Falcon De Mexico LIMITED CAMBRIDGE Andhra Pradesh, Pin: 532 409 Devunipalavalasa Village, LIMITED, HYDERABAD
S.A. de C.V., 6, Riverview Road, Beverley, Dr. Reddy's Laboratories (EU) Limited Ranastalam Mandal, Srikakulam District, Bollaram Road, Miyapur, Hyderabad,
Carretera Federal Cuernavaca-Cuautla East Yorkshire, HU 17 OLD, 410 Cambridge Science Park, FORMULATIONS MANUFACTURING Andhra Pradesh, Pin: 532 409 Telangana, Pin: 500 049
KM United Kingdom Milton Road, Cambridge FACILITIES
4.5 CIVAC, Jiutepec Morelos, CB4 0PE, United Kingdom FTO SEZ PU 2 - FORMULATIONS TECHNOLOGY DEVELOPMENT CENTRE 1
Mexico 62578 FORMULATIONS SHREVEPORT PLANT FTO 1 - FORMULATIONS HYDERABAD SRIKAKULAM PLANT Bollaram Road, Miyapur, Hyderabad,
Dr. Reddy’s Laboratories Louisiana LLC TECHNOLOGY DEVELOPMENT CENTRE, PLANT Sector No. 70, 71 & 73, Telangana, Pin: 500 049
API MIRFIELD PLANT 8800 Line Avenue, Shreveport, LEIDEN Plot No. 137, 138, 145 & 146, Devunipalavalasa Village,
Dr. Reddy’s Laboratories (EU) Limited Louisiana 7110-6717, USA Dr. Reddy’s Research and Development B V, S.V. Co-operative Industrial Estate, Ranastalam Mandal, Srikakulam District, TECHNOLOGY DEVELOPMENT CENTRE 2
Steanard Lane, Zernikedreef 12, 2333 CL Leiden, IDA Bollaram, Jinnaram Mandal, Andhra Pradesh, Pin: 532 409 Plot 31A, IDA, Jeedimetla, Hyderabad,
Mirfield, West Yorkshire, WF 14, 8HZ, KUNSHAN ROTAM REDDY The Netherlands Sangareddy District, Telangana, Pin: 500 050
United Kingdom PHARMACEUTICAL CO. LIMITED Telangana, Pin: 502 320
No. 258, Huang Pu Jiang (M) Road, AURIGENE DISCOVERY TECHNOLOGIES,
API MIDDLEBURGH PLANT Kunshan Development Zone, (MALAYSIA) SDN BHD
Dr. Reddy’s Laboratories New York Inc. Jiangsu Province, Level 2, Research Management &
1974 Route 145, P.O. Box 500, P. R. China, Pin: 215 300 Innovation Complex,
Middleburgh, University of Malaya,
New York 12122, USA Lembah Pantai 50603
Kuala Lumpur, Malaysia

7 7
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

BOARD’S REPORT The no-observation letters from the BSE

Limited and National Stock Exchange of
nature of business of the company. Further,
there was no significant change in the
These are also available for inspection
during regular business hours at our
India Limited were received on the basis of nature of business carried on by its registered office in Hyderabad, India and/or
Dear Member, subsidiaries.
FINANCIAL HIGHLIGHTS AND During the year, the company filed 20 no comments received from the Securities in electronic mode.
Your directors are pleased to present the abbreviated new drug applications and Exchange Board of India (SEBI). The
37th annual report for the year ended
COMPANY AFFAIRS* (ANDAs) and one new drug application petition for approval of the said scheme was
Any member desirous of inspecting such
March 31, 2021. Table 1 gives the consolidated and
(NDA) under Section 505(b)(2) in the USA. filed with the Hon’ble National Company MATERIAL CHANGES AND documents are requested to write to the
standalone financial highlights of the COMMITMENTS AFFECTING company by sending an email to
As of March 31, 2021, there were 95 Law Tribunal (NCLT), Hyderabad Bench.
The financial year 2021 started with COVID- company based on Indian Accounting shares@drreddys.com.
19 related lockdowns in India and several Standards (Ind AS) for FY2021 (i.e. from
generic filings awaiting approval with the
During FY2021, hearings on the petition
THE FINANCIAL POSITION OF
April 1, 2020, to March 31, 2021) compared US Food and Drug Administration THE COMPANY
parts of our major markets. The pandemic took place and on April 20, 2021, the
(USFDA), comprising 92 ANDAs and three
which started about 15 months back to the previous financial year. Hon’ble NCLT has reserved the order. There have been no such changes. PARTICULARS OF LOANS,
NDAs filed under Section 505(b)(2). Of the
impacted almost everyone and your The company’s consolidated total income GUARANTEES OR INVESTMENTS
92 ANDAs, 47 are Para IV applications,
company was no exception. There were for the year was ₹ 193.39 billion, which The company makes investments or extends
challenges around movement of people
and we believe that 23 of these have ‘First
DIVIDEND SUBSIDIARIES AND ASSOCIATES
was up by 7% over the previous year. This to File’ status. loans/guarantees to its wholly-owned
and all the business operations were Your directors are pleased to recommend a The company had 52 subsidiaries and one
amounted to US$ 2.64 billion. Profit subsidiaries for their business purposes.
impacted before tax (PBT) was ₹ 28.84 billion, Revenues from Emerging Markets were dividend of ₹ 25 (500%) for FY2021, on joint venture company as on March 31,
Details of loans, guarantees and
— be it manufacturing, research and representing an increase of 53% over the ₹ 35.1 billion, registering a year-on-year every equity share of ₹ 5/-. The 2021. During FY2021, Dr. Reddy’s (Beijing)
investments covered under Section 186 of
development (R&D), marketing or the supply previous year. This translated to US$ 394 growth of 7%. Revenues from India stood at recommended dividend is in line with the Pharmaceutical Company Limited in China
the Act, along with the purpose for which
chain and logistics. Our team accepted the million. ₹ 33.4 billion, showing a year-on-year dividend distribution policy of the and Dr. Reddy’s Formulations Limited in
such loan or guarantee was proposed to be
situation as a challenge and solved the growth of 15%. Revenues from Europe were company. India were incorporated as a step-down
The company’s standalone total income utilized by the recipient, form part of the
issues one by one to ensure that your ₹ 15.4 billion, or a year-on-year growth of subsidiary company and a wholly-owned
for the year was ₹ 141.50 billion, which was The dividend, if approved at the 37th notes to the financial statements provided
company continues to make medicines and 32%. subsidiary, respectively. Pursuant to sale of
up by 12% over the previous year. This was annual general meeting (AGM) will be paid in this annual report.
serve its patients across the globe. the membership interests in DRANU, LLC,
US$ 1.93 billion. PBT was ₹ 30.56 billion Revenues from Pharmaceutical Services to those members whose names appear on
(US$ 418 million), which was up by 10% in it ceased to be a joint venture during the
We also collaborated with multiple global and Active Ingredients (PSAI) stood at the register of members of the company as
rupee terms over the previous year. year. Further, the company sold its CORPORATE GOVERNANCE
partners and have been developing a ₹ 32 billion, with a year-on-year growth of end of the day on July 12, 2021. In terms
Contract Development and Manufacturing
number of COVID-19 related drugs. We Revenues from Global Generics were up of 24%. During the year, the company filed of the provisions of the Income Tax Act, AND ADDITIONAL
have successfully launched a vaccine. We 149 drug master files (DMFs) worldwide, Organization (CDMO) division of Custom
by 12% and stood at ₹ 154.4 billion. There 1961, such dividend will be taxable in the SHAREHOLDERS’ INFORMATION
found new ways of working by leveraging including 14 filings in the US. hands of the members. Pharmaceutical Services (CPS) business to
was growth across North America A detailed report on the corporate
digitalization and undertaking several Aurigene Pharmaceutical Services Limited
Generics, Emerging Markets and India, governance systems and practices of the
precautionary measures to ensure the In terms of Regulation 43A of the SEBI (APSL), a wholly-owned subsidiary, on
with strong growth in Europe.
health and safety of our employees and
SCHEME OF AMALGAMATION (Listing Obligations and Disclosure slump sale basis, for a consideration of company is given in a separate chapter of
business partners. We contributed our bit Revenues from North America stood at During FY2020, the scheme of Requirements) Regulations, 2015 (Listing ` 5,434.5 million. this annual report. Similarly, other
₹ 70.5 billion, registering a year-on-year amalgamation of Dr. Reddy’s Holdings Regulations), the dividend distribution information for shareholders is provided in
to support the needy and front line Section 129(3) of the Act, states that where
growth of 9%. This was largely on account Limited with the company was approved policy, is available on the company’s the chapter on Additional Shareholders’
workers. the company has one or more subsidiaries
of revenue contribution from new by the board of directors, members and website on www.drreddys.com/ Information. A certificate from the statutory
Our actions during the pandemic have or associate companies, it shall, in addition
products launched, increase in volumes unsecured creditors of the company. investors/governance/policies-and- auditors of the company confirming
been driven by our purpose of ‘Good for some of our base products, and to its financial statements, prepare a
Health Can’t Wait’ and reNect the dynamism documents/ compliance with the conditions of
favorable foreign exchange movement, consolidated financial statements of the
and empathy which are core to us. corporate governance is attached to the
partly offset by high price erosions in company and of all subsidiaries and
chapter on Corporate Governance.
some of our products. TRANSFER TO RESERVES associate companies in the same form and
TABLE 1 | FINANCIAL HIGHLIGHTS (₹ MILLION) The company has not proposed to transfer manner as that of its own and also attach
CONSOLIDATED STANDALONE any amount to the general reserve. along with its financial statements, a MANAGEMENT DISCUSSION
PARTICULARS separate statement containing the salient AND ANALYSIS
FY2021FY2020FY2021FY2020
Total income 193�389 181�376 141�502 125�936
SHARE CAPITAL features of the financial statements of its A detailed report on the Management
The paid-up share capital of your company subsidiaries and associates. Discussion and Analysis in terms of
Profit before depreciation, amortization, impairment and tax 47�411 46�694 39�062 35�650 increased by ₹ 0.65 million to ₹ 831.51
Hence, the consolidated financial Regulation 34 of SEBI’s Listing Regulations
million in FY2021 due to allotment of 129,149
Depreciation and amortization 12�288 11�631 8�350 7�892 statements of the company and all its is provided as a separate chapter in the
equity shares, on exercise of stock options
Impairment of non-current assets 6�768 16�767 150 - by eligible employees through the subsidiaries and associates, prepared in annual report.
28�355 18�296 30�562 27�758 ‘Dr. Reddy's Employees Stock Option accordance with Ind AS 110 and 111 as
Profit before tax and before share of equity accounted investees
Scheme, 2002’ and ‘Dr. Reddy’s Employees specified in the Companies (Indian
Share of profit of equity accounted investees, net of tax 480 561 - - ADR Stock Option Scheme, 2007’. BOARD OF DIRECTORS AND KEY
Accounting Standards) Rules, 2015, form
Profit before tax 28�835 18�857 30�562 27�758 part of the annual report. Moreover, a MANAGERIAL PERSONNEL
On December 9, 2020, the company also
statement containing the salient features of During FY2021, members of the company
Tax expense 9�319 (1�403) 8�698 (1�619) listed its ADRs on NSE International
the financial statements of the company’s approved the reappointment of Mr. G V
Exchange in GIFT City, Gujarat (NSE IFSC).
Net profit for the year 19�516 20�260 21�864 29�377 subsidiaries and joint ventures in the Prasad as a whole-time director designated
128�349 112�000 124�979 99�511 prescribed Form AOC-1, is attached as as co-chairman and managing director of
Opening balance of retained earnings
PUBLIC DEPOSITS Annexure I to the board’s report. This the company for a further period of five
Net profit for the year 19�516 20�260 21�864 29�377 years with effect from January 30, 2021. The
The company has not accepted any statement also provides details of the
Other comprehensive income/(loss) 3 5 3 5 deposits covered under Chapter V of the performance and financial position of each members also approved the continuation of
Companies Act, 2013 ("the Act"). subsidiary and joint venture. Mr. Prasad R Menon as an independent
Dividend paid during the year (4�147) (3�314) (4�147) (3�314)
Accordingly, there is no disclosure or director, pursuant to regulation 17(1A) of
Tax on dividend paid - (602) - (600) In accordance with Section 136 of the Act, the Listing Regulations, who attained the
reporting required in respect of details
- - - - relating to deposits. the audited financial statements and related age of seventy five years.
Transfer to general reserve
information of the company and its
Transfer to SEZ re-investment reserve, net (1�326) - (1�326) - subsidiaries, wherever applicable, are Mr. G V Prasad retires by rotation at the
142�395 128�349 141�373 124�979 CHANGE IN THE NATURE OF available on the company's website: forthcoming 37th AGM and being eligible,
Closing balance of retained earnings
www.drreddys.com. seeks reappointment.
*The conversion rate is considered as US$ 1 = ` 73.14.
BUSINESS, IF ANY
During the year, there was no change in the
Note: FY2021 represents fiscal year 2020�21� from April 1� 2020� to March 31� 2021� and analogously for FY2020 and other such labelled years.

8 8
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

Mr. Bharat N Doshi completed his term as

was held to discuss strategic matters. ENTERPRISE RISK VIGIL MECHANISM/WHISTLE- of practice no. 3662), Mumbai, India, were SIGNIFICANT AND MATERIAL
an independent director on May 10, 2021,
Details of board meetings and the board appointed as secretarial auditors of the
and does not seek reappointment. The MANAGEMENT BLOWER/OMBUDSPERSON ORDERS PASSED BY THE
retreat are given in the chapter on company for FY2021. The secretarial audit
board places on record its appreciation for The company has a risk management POLICY COURTS/REGULATORS/
Corporate Governance. report for FY2021 is annexed as Annexure
his contributions as director of the committee of the board, consisting entirely The company has an ombudsperson policy III to this report. TRIBUNALS
company. AUDIT COMMITTEE of independent directors, and chaired by (whistle-blower/vigil mechanism) to report Securities class-action lawsuit in the USA
As on March 31, 2021, the audit committee Ms. Shikha Sharma. Details of the concerns. Reporting channels under the Based on the consent received from
Mr. Saumen Chakraborty retired as chief On August 25, 2017, a securities class action
of the board of directors consisted entirely committee and its terms of reference are set vigil mechanism include an independent M/s. Makarand M. Joshi & Co.,
financial officer of the company with effect lawsuit was filed against the company, its
of independent directors: Mr. Sridar Iyengar out in the chapter on Corporate hotline, a web based reporting site practicing
from December 1, 2020. The board of then chief executive officer (CEO) and its
(chairman), Ms. Kalpana Morparia, Governance. (drreddys.ethicspoint.com) and a dedicated company secretaries (certificate of practice
directors, at its meeting held on October 28, then chief financial officer (CFO) in the
Mr. Bharat N Doshi and Ms. Shikha Sharma. e-mail to chief compliance officer. The no. 3662), Mumbai, India and on the
2020, appointed Mr. Parag Agarwal as The audit and risk management committees United States District Court for the District
Mr. Bharat N Doshi ceased to be a member recommendation of the audit committee, of New Jersey. The company’s co-
chief financial officer of the company with review key risk elements of the company’s ombudsperson policy also safeguards
of the committee on completing his term as the board has approved their appointment chairman, its chief operating officer (COO)
effect from December 1, 2020. The board business, finance, operations and against retaliation of those who use this
a director on May 10, 2021. Further details as the secretarial auditor of the company for of that time (since retired), and Dr. Reddy’s
records its appreciation for the excellent compliance, and their respective mitigation mechanism. The audit committee
are given in the chapter on Corporate FY2022. Laboratories, Inc., USA, were subsequently
work done by Mr. Chakraborty across strategies. The risk management committee chairperson is the chief ombudsperson.
Governance. The board has accepted all The policy also provides for raising concerns named as defendants in the case. The
various departments of the company, reviews strategic, business, compliance and
recommendations made by the audit directly to the chief ombudsperson. Details COST AUDITORS operative complaint alleges that the
including finance, during his long stint at Dr. operational risks, while issues around
committee during the year. of the policy are available on the company’s Pursuant to Section 148(1) of the Act, read company made false or misleading
Reddy’s. ethics and fraud, internal control over
website: www.drreddys.com/investors/ with the relevant Rules made thereunder, statements or omissions in its public filings,
financial reporting (ICOFR), as well as in violation of the US federal securities laws,
In accordance with Section 149(7) of the governance/ombudsperson-policy. the company maintains the cost records in
DIRECTORS’ RESPONSIBILITY process risks and their mitigation, are that the company’s share price dropped and
Act, each independent director has respect of its 'pharmaceuticals' business.
reviewed by the audit committee. its investors were affected.
confirmed to the company that he or she STATEMENT On the recommendation of the audit
meets the criteria of independence laid In terms of Section 134(5) of the Act, your The company’s finance, investment and risk STATUTORY AUDITORS On March 21, 2019, the District Court issued
committee, the board has appointed M/s.
down in Section 149(6) of the Act, and is in directors state that: management council (FIRM council) and the M/s. S.R. Batliboi & Associates LLP, its decision (dated March 20, 2019) granting
Sagar & Associates, cost accountants (firm
compliance with Rule 6(3) of the Companies compliance council are management level chartered accountants (firm registration no. in part and denying in part the motion to
1. applicable accounting standards have registration no. 000118) as cost auditors of
(Appointment and Qualifications of committees which operate under a charter 101049W/E300004) were appointed as dismiss. Pursuant to that decision, the Court
been followed in the preparation of the the company for the FY2022 at a
Directors) Rules, 2014 and Regulation 16(1) and focus on risks associated with the statutory auditors of the company at the dismissed the plaintiff’s claims on 17 out of
annual accounts; remuneration of ₹ 700,000/- plus
(b) of the Listing Regulations. Further, they company’s business and compliance 32nd AGM held on July 27, 2016, for a the 22 alleged misstatements/omissions.
reimbursement of out-of-pocket expenses
have affirmed compliance to the code of 2. accounting policies have been matters. The FIRM council and the period of five years till the conclusion of
at actuals and applicable taxes. The On May 15, 2020, Dr. Reddy’s Laboratories
conduct for independent directors as selected and applied consistently. compliance council periodically review the 37th AGM.
provisions also require that the Limited, Dr. Reddy’s Laboratories, Inc., and
prescribed in Schedule IV of the Act. Judgments and estimates made are matters pertaining to risk management and
Consequently, M/s. S.R. Batliboi & remuneration of the cost auditors be ratified certain of the company’s current or former
reasonable and prudent, so as to give a compliance and ethics respectively. Associates LLP, chartered accountants,
For reference of the members, a brief profile by the members. As a matter of record, directors and officers (collectively, the
true and fair view of the state of affairs Additionally, the enterprise wide risk complete their first term of five “Defendants”), have entered into a
of Mr. G V Prasad is given in the chapter relevant cost audit reports for FY2020 were
of the company at the end of the management (ERM) function helps consecutive years as the statutory auditors Stipulation and Agreement of Settlement
on Corporate Governance and in the Notice filed with the Central Government on
FY2021 and of the profit of the management and the board to prioritize, of the company at the conclusion of 37th (the “Stipulation”) with lead plaintiff i.e.
convening the 37th AGM. August 28, 2020, within the stipulated
company for that period; review and measure business risks against a AGM of the company. the Public Employees’ Retirement System of
timeline. The cost audit report for FY2021
BOARD EVALUATION pre-determined risk appetite, and their Mississippi in the putative securities class
3. proper and sufficient care has been Pursuant to section 139(2) of the Act, the will also be filed within the timeline.
As per provisions of the Act, and Regulation suitable response, depending on whether action filed against the Defendants in the
17(10) of the Listing Regulations, an taken to maintain adequate accounting such risks are internal, strategic or external. company can appoint an auditors firm for a United States District Court for the District
evaluation of the performance of the board, records in accordance with the second term of five consecutive years.
During FY2021, focus areas of risk AUDITORS’ QUALIFICATIONS, of New Jersey. As consideration for the
its committees and members was provisions of the Act for safeguarding
M/s. S.R. Batliboi & Associates LLP, have settlement of the class action, the company
undertaken. For details, please refer to the the assets of the company and for management committee included review of RESERVATIONS OR ADVERSE has agreed to pay US$ 9 million. The
cyber security, ethics and compliance consented to the said reappointment, and
chapter on Corporate Governance. preventing and detecting fraud and
confirmed that their reappointment, if
REMARKS OR DISCLAIMERS settlement is subject to the approval of the
other irregularities; program across the company and
APPOINTMENT OF DIRECTORS AND monitoring environmental and climate made, would be within the limits specified MADE court and may be terminated prior to court's
4. annual accounts have been prepared on under Section 141(3)(g) of the Act. They There are no qualifications, reservations or approval pursuant to the grounds for
REMUNERATION POLICY change related risks and other operating
a going concern basis; have further confirmed that they are not adverse remarks by the statutory auditors in termination set forth in the Stipulation.
Assessment and appointment of members risk exposures.
disqualified to be reappointed as statutory their report, or by the practicing company Subject to the terms of the Stipulation, in
to the board are based on a combination of 5. adequate internal financial controls for
auditor in terms of the provisions of the Act, secretary in the secretarial audit report. exchange for the settlement consideration,
criterion that includes ethics, personal and the company to follow have been laid
RELATED PARTY and the provisions of the Companies (Audit During the year, there were no instances of the lead plaintiff and members of the
professional stature, domain expertise, down and these are operating
and Auditors) Rules, 2014, as amended from frauds reported by auditors under Section settlement class who do not opt-out of this
gender diversity and specific effectively; and TRANSACTIONS
time to time. 143(12) of the Act. settlement would release, among other
qualifications required for the position. A In accordance with Section 134(3)(h) of the
potential board member is also assessed on 6. proper and adequate systems have been things, the claims that were asserted, or
Act, and Rule 8(2) of the Companies The audit committee and the board of
the basis of independence criteria defined devised to ensure compliance with the that they could have asserted, in this class
(Accounts) Rules, 2014, the particulars of directors recommend the reappointment of SECRETARIAL STANDARDS
provisions of all applicable laws and action. In entering into the settlement, the
in Section 149(6) of the Act, and Regulation the contracts or arrangements with related M/s. S.R. Batliboi & Associates LLP,
these systems are operating effectively. In terms of Section 118(10) of the Act, the Defendants do not admit, and explicitly
16(1)(b) of the Listing Regulations. parties referred to in Section 188(1) of the chartered accountants, as statutory auditors
company complies with Secretarial deny, any liability or wrongdoing of any
Act, in Form AOC-2 is attached as of the company from the conclusion of the
In accordance with Section 178(3) of the Standards 1 and 2, relating to the ‘Meetings kind. Subject to the terms of the Stipulation,
Annexure II to the board’s report. All 37th AGM till the conclusion of 42nd AGM,
Act, Regulation 19(4) of the Listing ADEQUACY OF INTERNAL of the Board of Directors’ and ‘General the settlement resolves the remainder of the
contracts and arrangements with related to the members.
Regulations and on recommendation of the Meetings’ respectively as specified by the litigation.
FINANCIAL CONTROL SYSTEMS parties were at arm’s length and in the
company’s nomination, governance and Institute of Company Secretaries of India
The company has in place adequate internal ordinary course of business of the company. On December 23, 2020, the court issued a
compensation committee, the board SECRETARIAL AUDITOR and approved by the Central Government. final order and judgment approving the
financial controls with reference to its Details of related party disclosures form
adopted a remuneration policy for directors, Pursuant to Section 204 of the Act, and the The company has also voluntarily adopted settlement. Pursuant to the
financial statements. These controls ensure part of the notes to the financial statements
KMP, senior management and other Companies (Appointment and the recommendatory Secretarial Standard-3 settlement/court order, the escrow was
the accuracy and completeness of the provided in the annual report.
employees. The policy is attached in the Remuneration of Managerial Personnel) on ‘Dividend’ and Secretarial Standard-4 on funded on January 4, 2021. The effective
accounting records and the preparation of
chapter on Corporate Governance. Rules, 2014, M/s. Makarand M. Joshi & ‘Report of the Board of Directors’ issued by date of the settlement occurred on February
reliable financial statements.
Co., practicing company secretaries the Institute of Company Secretaries of 1, 2021, upon transfer of the settlement
NUMBER OF BOARD MEETINGS
(certificate India. fund balance into the final escrow account.
The board of directors met five times during
the year. In addition, an annual board
retreat

8 8
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

As the company is adequately insured with

respect to the aforesaid liability, the Transfer and Refund) Rules, 2016, as sent to the members of the company and ANNEXURE-I
settlement did not have any impact on the amended, declared dividends and interest others entitled thereto. The said information
on debentures which remained unpaid or is available for inspection at the registered FORM AOC-1
company’s consolidated income statement
unclaimed for a period of seven years have office of the company or through (Statement pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)
for the year ended March 31, 2021.
been transferred by the company to the electronic mode during business hours on (Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures)

INFORMATION REQUIRED IEPF, which has been established by the working days up to the date of the

UNDER SEXUAL HARASSMENT

Central Government. forthcoming 37th AGM, by members. Any Part "A" | Subsidiaries
member interested in obtaining a copy All amounts in Indian Rupees millions, except share data and where otherwise stated
OF WOMEN AT WORKPLACE The above Rules also mandate transfer of
thereof may write to the company secretary
shares on which dividends are lying unpaid
(PREVENTION, PROHIBITION in this regard. AS AT MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021
and unclaimed for a period of seven
AND REDRESSAL) ACT, 2013 consecutive years to IEPF. The company has

% OF SHAREHOLDING

NET EXPENSE (TOTAL

PROPOSED DIVIDEND
RESERVES & SURPLUS
FOR THE SUBSIDIARY
The company has a policy to ensure issued individual notices to the members CONSERVATION OF ENERGY,

REPORTING PERIOD

OTHER LIABILITIES

BEFORE TAXATION
INCORPORATION/

AFTER TAXATION
prevention, prohibition and redressal of

EXCHANGE RATE

EXPENSE NET OF
OTHER INCOME)
whose equity shares are liable to be TECHNOLOGY ABSORPTION,

AND LIABILITIES

PROFIT/(LOSS)

PROFIT/(LOSS)
INVESTMENTS*
SHARE CAPITAL

PROVISION FOR
TOTAL ASSETS
sexual harassment at the workplace. It has

ACQUISITION

TOTAL EQUITY
NAME OF THE
transferred to IEPF, advising them to claim

SUBSIDIARY
an apex committee and an internal FOREIGN EXCHANGE EARNINGS

CURRENCY
REPORTING

TURNOVER

TAXATION
their dividend on or before August 18, 2021.
complaints committee which operate under AND OUTGO

DATE OF
Details of transfer of unpaid and unclaimed

SL. NO.
a defined framework for complaints The particulars as prescribed under Section
amounts to IEPF are given in the chapter on
pertaining to sexual harassment at 134(3)(m) of the Act, read with Rule 8(3) of
Additional Shareholders Information.
workplace. Details are available in the the Companies (Accounts) Rules, 2014 are 1 Aurigene Discovery
principle 3 of the Business Responsibility attached as Annexure VI to the board’s Technologies 31/03/2021 26/09/2007 100% MYR 17.63 16 24 2 42 42 13 25 23 2 - 2 -
Report forming part of this annual report. EMPLOYEES STOCK OPTION
report. (Malaysia) Sdn. Bhd.
SCHEMES 2 Aurigene Discovery
31/03/2021 29/04/2002 100% USD 73.11
CORPORATE SOCIAL Technologies, Inc. 257 (257) - - - - - 1 (1) - (1) -
During the year, there has been no change
RESPONSIBILITY (CSR) in the ‘Dr. Reddy’s Employees Stock ANNUAL RETURN 3 Aurigene Discovery
31/03/2021 100% INR 1.00 905 5,112 2,599 8,616 8,616 5,483 3,062 1,389 1,673 422 1,251 -
Option Scheme, 2002’, the ‘Dr. Reddy’s The annual return of the company as on 10/08/2001 Technologies Limited
INITIATIVES March 31, 2021, in terms of the provisions
Employees ADR Stock Option Scheme, 4 Aurigene
As per Section 135 of the Act, the company of Section 134(3)(a) of the Act, is available Pharmaceutical 31/03/2021 100% INR 1.00 401 (4,342) 6,700 2,759 2,759 342 1,914 2,093 (179) (619) 440 -
2007', and 'Dr. Reddy’s Employees Stock
has a board-level CSR committee consisting on the company’s website: 16/09/2019 Services Limited
Option Scheme, 2018’ (collectively referred
of Mr. Prasad R Menon (chairman), Mr. G V www.drreddys.com/investors/reports-and- 5 beta Institut
as ‘the schemes’).
Prasad and Mr. K Satish Reddy. Based on filings/annual-reports/ gemeinnützige 31/03/2021 100% EUR 85.75 5 - 4 9 9 - - 2 (2) - (2) -
the recommendation of the CSR committee, The schemes are in compliance with the 15/02/2006 GmbH(1)
6 betapharm
the board has adopted a revised CSR SEBI (Share Based Employee Benefits) 31/03/2021
policy that provides guiding principles for
ACKNOWLEDGMENT 15/02/2006 Arzneimittel GmbH(1) 100% EUR 85.75 60 29 8,338 8,427 8,427 - 10,513 10,533 (20) - (20) -
Regulations, 2014.
Your directors place on record their 7 Cheminor
selection, implementation and monitoring 31/03/2021 23/01/1990 100% INR 1.00 1 - - 1 1 - - - - - - -
Details are available on the company’s sincere appreciation for the significant Investments Limited
of CSR activities and formulation of the 8 Chirotech
website: www.drreddys.com/investors/ contribution made by its employees through 31/03/2021
annual action plan. During the year, the 30/04/2008 Technology Limited 100% GBP 100.75 1,060 217 162 1,439 1,439 - - (12) 12 (8) 20 -
governance/policies-and-documents/. The their dedication, hard work and
committee monitored the spend and
details also form part of note 2.24 of the commitment, as also for the trust reposed in 9 DRL Impex Limited 31/03/2021 18/08/1986 100% INR 1.00 760 (762) 13 11 11 - - - - - - -
implementation and adherence to the CSR 10 Dr. Reddy’s Bio-
notes to accounts of the standalone the company by the medical fraternity and 31/03/2021 09/07/2003 100% INR 1.00 589 (356) 71 304 304 - - 28 (28) - (28) -
policy. Details of the CSR policy and Sciences Limited
financial statements. patients. The board of directors also
initiatives taken by the company during the 11 Dr. Reddy's (Beijing)
acknowledge the support extended by the
year are available on the company’s Pharmaceutical Co. 31/03/2021 100% RMB 11.16 110 (3) 8 115 115 - 58 61 (3) - (3) -
analysts, bankers, government agencies,
website: www.drreddys.com. The report on PARTICULARS OF EMPLOYEES 19/08/2020 Limited
media, customers, business partners,
CSR activities is attached as Annexure IV Disclosures pertaining to remuneration and 12 Dr. Reddy’s
members and investors at large. Farmaceutica Do 31/03/2021 06/07/2000 100% BRL 12.83 818 (920) 1,132 1,030 1,030 - 1,262 1,189 73 31 42 -
to the board’s report. other details as required under Section
Brasil Ltda.
197(12) of the Act, read with Rule 5(1) of the It looks forward to your continued support 13 Dr. Reddy’s
Companies (Appointment and in the company’s endeavor to accelerate 31/03/2021 11/03/2021 100% INR 1.00 - - - - - - - - - - - -
Formulations Limited
BUSINESS RESPONSIBILITY Remuneration of Managerial Personnel) access to innovative and affordable
14 Dr. Reddy’s
REPORT Rules, 2014, are attached as Annexure V to medicines, because Good Health Can’t Wait. Laboratories
31/03/2021 07/06/2006 100% AUD 55.70
A detailed Business Responsibility Report as (Australia) Pty. 35 (314) 823 544 544 - 936 880 56 17 39 -
the board’s report
required under Regulation 34 of the Listing For and on behalf of the board of directors Limited
In terms of Section 197(12) of the Act, 15 Dr. Reddy’s
Regulations, is given as a separate chapter
read with Rule 5(2) and 5(3) of the Laboratories 31/03/2021 100% CAD 58.03 - 431 246 677 677 - 1,513 1,448 65 17 48 -
in this annual report. K Satish Reddy
Companies (Appointment and 29/08/2013 (Canada), Inc.
Chairman
Remuneration of Managerial Personnel) 16 Dr. Reddy's
TRANSFER OF UNPAID AND Rules, 2014, a statement showing the Place: Hyderabad
Laboratories Chile 31/03/2021 16/06/2017 100% CLP 0.10 140 (71) 174 243 243 - 268 225 43 - 43 -
names and other particulars of the SPA
UNCLAIMED AMOUNTS TO employees drawing remuneration in
Date: May 14, 2021
17 Dr. Reddy’s
INVESTOR EDUCATION AND excess of limits set out in said rules forms
Laboratories (EU) 31/03/2021 100% GBP 100.75 723 2,323 1,889 4,935 4,935 - 1,888 1,447 441 94 347 -
17/04/2002 Limited
PROTECTION FUND (IEPF) part of the annual report. 18 Dr. Reddy’s
Pursuant to the provisions of the Act, read (2) 31/03/2021 13/05/1992 100% USD 73.11 580 20,656 34,170 55,406 55,406 24 68,123 64,648 3,475 (494) 3,969 -
Considering the first proviso to Section
with IEPF Authority (Accounting, Audit, 19 Laboratories,
Dr. Reddy’s Inc.
136(1) of the Act, the annual report,
Laboratories Japan 31/03/2021 100% JPY 66.12 34 (20) 4 18 18 - 29 26 3 1 2 -
excluding the aforesaid information, is being
14/04/2015 KK
20 Dr Reddy’s
Laboratories 31/03/2021 30/11/2016 100% KZT 0.17 81 135 979 1,195 1,195 - 2,008 1,847 161 33 128 -
Kazakhstan LLP
21 Dr. Reddy’s
31/03/2021 11/05/2011 100% UAH 2.62 71 165 1,355 1,591 1,591 - 3,560 3,347 213 38 175 -
Laboratories LLC

8 8
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

Part "A" | Subsidiaries

Part "A" | Subsidiaries
All amounts in Indian Rupees millions, except share data and where otherwise stated
All amounts in Indian Rupees millions, except share data and where otherwise stated
AS AT MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021
AS AT MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021

% OF SHAREHOLDING

% OF SHAREHOLDING
RESERVES & SURPLUS

RESERVES & SURPLUS

PROPOSED DIVIDEND

PROPOSED DIVIDEND
FOR THE SUBSIDIARY

FOR THE SUBSIDIARY

NET EXPENSE (TOTAL

NET EXPENSE (TOTAL
REPORTING PERIOD

REPORTING PERIOD
OTHER LIABILITIES

OTHER LIABILITIES

BEFORE TAXATION
BEFORE TAXATION
INCORPORATION/

INCORPORATION/
PROFIT/(LOSS)

AFTER TAXATION
PROFIT/(LOSS)
AFTER TAXATION
EXCHANGE RATE

EXCHANGE RATE
EXPENSE NET OF

EXPENSE NET OF
PROFIT/(LOSS)

PROFIT/(LOSS)
AND LIABILITIES

AND LIABILITIES
OTHER INCOME)

OTHER INCOME)
ACQUISITION

ACQUISITION
PROVISION FOR

PROVISION FOR
SHARE CAPITAL

SHARE CAPITAL
INVESTMENTS*

INVESTMENTS*
TOTAL ASSETS

TOTAL ASSETS
TOTAL EQUITY
TOTAL EQUITY
NAME OF THE

NAME OF THE
SUBSIDIARY

SUBSIDIARY
REPORTING

REPORTING

TAXATION
TAXATION
TURNOVER

TURNOVER
CURRENCY

CURRENCY
DATE OF

DATE OF
SL. NO.

SL. NO.
22 Dr. Reddy’s 43 Lacock Holdings
31/03/2021 15/12/2005 100% EUR 85.75 1 466 1 468 468 - - 2 (2) - (2) -
Laboratories 31/03/2021 30/04/2008 100% USD 73.11 - (3,011) 7,543 4,532 4,532 - 2,937 3,905 (968) - (968) - Limited
Louisiana, LLC(2) 44 OOO Dr. Reddy's
23 Dr. Reddy’s 31/03/2021 05/04/2003 100% RUB 0.97 738 1,934 11,753 14,425 14,425 - 18,603 18,371 232 53 179 -
Laboratories Limited
Laboratories Malaysia 31/03/2021 10/07/2017 100% MYR 17.63 49 9 88 146 146 - 182 160 22 1 21 -
Sdn. Bhd. 45 OOO DRS LLC 31/03/2021 11/09/2007 100% RUB 0.97 30 19 89 138 138 - - 4 (4) - (4) -
24 Dr. Reddy’s 46 Promius Pharma,
31/03/2021 14/02/2003 100% USD 73.11 13,908 (13,865) 305 348 348 - 20 (16) 36 - 36 -
Laboratories New 31/03/2021 24/05/2011 100% USD 73.11 - (2,448) 3,107 659 659 - - 354 (354) (10) (344) - LLC(2)
York, LLC 47 Reddy Holding
31/03/2021 15/02/2006 100% EUR 85.75 1 23,931 2,998 26,930 26,930 - - (3,190) 3,190 1,057 2,133 -
25 Dr. Reddy's GmbH(1)
Laboratories 31/03/2021 100% PHP 1.51 20 (24) 13 9 9 - - 11 (11) - (11) - 48 Reddy Netherlands
31/03/2021 20/02/1997 100% EUR 85.75 7 2,917 - 2,924 2,924 - - (9) 9 - 9 -
09/05/2018 Philippines Inc. B.V.
26 Dr. Reddy’s 49 Reddy Pharma Iberia
31/03/2021 18/05/2006 100% EUR 85.75 (147) 394 457 704 704 - 998 992 6 (80) 86 -
Laboratories 31/03/2021 100% ZAR 4.94 - 403 839 1,242 1,242 - 1,822 1,705 117 33 84 - S.A.U.
13/06/2002 (Proprietary) Limited 50 Reddy Pharma Italia
31/03/2021 13/10/2006 100% EUR 85.75 257 65 1,289 1,611 1,611 - - 1 (1) - (1) -
27 Dr. Reddy’s S.R.L.
Laboratories 31/03/2021 07/06/2010 100% RON 17.44 24 409 1,177 1,610 1,610 - 2,218 2,086 132 21 111 - 51 Reddy Pharma SAS 31/03/2021 29/10/2015 100% EUR 85.75 386 (137) 391 640 640 - 1,135 1,038 97 (29) 126 -
Romania SRL 52 SVAAS Wellness
28 Dr. Reddy’s Limited (formerly
31/03/2021 16/04/2007 100% USD 73.11 20,539 21,337 13,871 55,747 55,747 2,120 24,202 28,235 (4,033) 391 (4,424) - 31/03/2021 08/07/2009 100% INR 1.00 1 4 3 8 8 6 - 3 (3) - (3) -
Laboratories SA Regkinetics Services
Limited)
29 Dr. Reddy’s
Laboratories SAS 31/03/2021 04/11/2014 100% COP 0.02 104 9 297 410 410 - 575 514 61 21 40 - * Includes all investments excluding investment in subsidiaries.
(1)
Tax expense for these entities is computed together as per the tax laws of Germany. The total tax expense is presented in Sl. No. 47 - Reddy Holding GmbH.
30 Dr. Reddy's (2)
Tax expense for these entities is computed together as per the tax laws of United States. The total tax expense is presented in Sl. No. 18 - Dr. Reddy’s Laboratories, Inc.
Laboratories 31/03/2021 23/02/2018 100% TWD 2.57 32 (16) 3 19 19 - 16 12 4 - 4 - (3)
The investment has been accounted using equity method. Refer note 2.5 of consolidated financial statements.
Taiwan Limited (4)
There were no subsidiaries which have been liquidated or sold during the year.
31 Dr. Reddy's
Laboratories 31/03/2021 13/06/2018 100% TWD 2.57 35 (53) 253 235 235 - 280 254 26 - 26 -
(Thailand) Limited
Part “B” | Associates and Joint ventures
32 Dr. Reddy’s
Laboratories (UK) 31/03/2021 29/11/2002 100% GBP 100.75 - 3,547 1,633 5,180 5,180 - 3,771 3,422 349 85 264 - All amounts in Indian Rupees millions, except share data and where otherwise stated
Limited
SHARES OF ASSOCIATE/ JOINT VENTURES HELD BY THE COMPANY ON THE YEAR END
33 Dr. Reddy's Research PROFIT/LOSS FOR THE YEAR
and Development B.V.31/03/2021 15/02/2013 100% EUR 85.75 460 1,795 1,289 3,544 3,544 - 1,051 (1,840) 2,891 - 2,891 -

REASON WHY THE ASSOCIATE/JOINT

SHAREHOLDING AS PER LATEST
NET WORTH ATTRIBUTABLE TO
34 Dr. Reddy’s S.R.L. 31/03/2021 05/08/2008 100% EUR 85.75 6 (778) 1,458 686 686 - 828 982 (154) - (154) -

IS A SIGNIFICANT INFLUENCE
DESCRIPTION OF HOW THERE

VENTURE IS NOT CONSOLIDATED

ASSOCIATES/JOINT VENTURE
AMOUNT OF INVESTMENT IN
NAME OF THE ASSOCIATE/
35 Dr. Reddy’s New
31/03/2021 01/02/2008 100% NZD 51.17 - 82 36 118 118 - 203 202 1 - 1 -

AUDITED BALANCE SHEET

Zealand Limited

EXTEND OF HOLDING %
BALANCE SHEET DATE
36 Dr. Reddy’s (WUXI)

IN CONSOLIDATION
Pharmaceutical Co. 31/03/2021 100% RMB 11.16 65 (28) 54 91 91 - 88 93 (5) - (5) -

NOT CONSIDERED
CONSOLIDATION
02/06/2017 Limited

LATEST AUDITED

CONSIDERED IN
JOINT VENTURE
37 Dr. Reddy's
31/03/2021 20/10/2010 100% VES 0.00 58 (4,735) 4,684 7 7 - - (115) 115 - 115 -
Venezuela, C.A.
38 Dr. Reddy’s
31/03/2021 11/09/2007 100% EUR 85.75 37 (2,625) 2,615 27 27 - - 2,776 (2,776) - (2,776) -

SL. NO.
Laboratories B.V.

NO.
39 Idea2Enterprises
31/03/2021 22/05/2010 100% INR 1.00 25 1,511 4 1,540 1,540 1 - - - - - -
(India) Private Limited
40 Imperial Credit 1 DRANU LLC, USA(1) NA NA 360 50% - - - NA NA
31/03/2021 22/02/2017 100% INR 1.00 12 13 - 25 25 24 - (1) 1 - 1 -
Private Limited 2 DRES Energy Private Limited, India 31/03/2021 8,580,000 86 26% - 19 54 NA NA
41 Industrias Quimicas
Falcon de Mexico, 31/03/2021 30/12/2005 100% MXN 3.58 594 298 5,136 6,028 6,028 - 5,893 5,782 111 62 49 - (1)
Ceased to be a joint venture with effect from March 31, 2021.
S.A. de CV
42 Kunshan Rotam for and on behalf of the board of directors of Dr. Reddy's Laboratories Limited
Reddy Pharmaceutical 31/03/2021 15/08/2001 51.33% RMB 11.16 - - - - - - - - - - 461 - K Satish Reddy Chairman
Company Limited(3)
G V Prasad Co-Chairman & Managing Director
Erez Israeli Chief Executive Officer
Place : Hyderabad Parag Agarwal Chief Financial Officer
Date : May 14, 2021 Sandeep Poddar Company Secretary

8 8
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

ANNEXURE-II d. The Securities and Exchange Board We further report that, the Board ANNEXURE A
of India (Share Based Employee of Directors of the Company is duly
FORM NO. AOC – 2 To
Benefits) Regulations, 2014; constituted with proper balance of
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the Companies (Accounts) Rules, The Members,
Executive Directors and Independent
2014) Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section e. The Securities and Exchange Board Dr. Reddy’s Laboratories Limited,
of India (Issue and Listing of Debt Directors. The changes in the composition
(1) of Section 188 of the Companies Act, 2013, including certain arm’s length transactions under third proviso thereto 8-2-337, Road No.3, Banjara
Securities) Regulations, 2008; (Not of the Board of Directors that took place
Hills,
Applicable to the Company during the period under review were carried Hyderabad – 500 034, Telangana, India
1. Details of contracts or arrangements or transactions not at arm’s length basis:
during the Audit Period); out in compliance with the provisions of the
(a) Name(s) of the related party and nature of relationship Act. Our report of even date is to be read along
f. The Securities and Exchange Board with this letter.
(b) Nature of contracts/arrangements/transactions Adequate notice is given to all directors
of India (Registrars to an Issue and 1. Maintenance of secretarial record is
(c) Duration of the contracts/arrangements/transactions to schedule the Board Meetings, agenda
Share Transfer Agents) Regulations, the responsibility of the management
(d) Salient terms of the contracts/arrangements/transactions including the value, if any and detailed notes on agenda were sent
1993 regarding the Companies Act of the company. Our responsibility is
at least seven days in advance and a
system to express an opinion on these
secretarial
(e) Justification for entering into such contracts/arrangements or transactions Not Applicable and dealing with client; records based on our audit.
exists for seeking and obtaining further
(f) Date(s) of approval by the board g. The Securities and Exchange Board information and clarifications on the agenda 2. We have followed the audit
of India (Delisting of Equity Shares) items before the meeting and for practices and processes as were
(g) Amount paid as advances, if any Regulations, 2009; (Not Applicable meaningful participation at the meeting. All appropriate to obtain reasonable
(h) Date on which the special resolution was passed in general meeting as required under first proviso to Section 188 to the Company during the Audit decisions at Board Meetings and assurance about the correctness of
Period) and; Committee Meetings are carried out the contents of the Secretarial
h. The Securities and Exchange Board unanimously as recorded in the minutes of records. The verification was done
2. Details of material contracts or arrangement or transactions at arm’s length basis: of India (Buyback of Securities) the meetings of the Board of Directors or on test basis to ensure that
Committee of the Board, as the case may correct facts are reNected in secretarial
Regulations, 2018; (Not Applicable
be. records. We believe that the processes
(a) Names(s) of the related party and nature of relationship Dr. Reddy’s Laboratories Inc., USA, wholly-owned subsidiary and practices, we followed provide a
to the Company during the Audit We further report that there are adequate reasonable basis for our opinion.
(b) Nature of contracts/arrangements/transactions Transfer or receipt of products, goods, materials or services Period). systems and processes in the Company
(c) Duration of the contracts/arrangements/transactions Ongoing 3. We have not verified the correctness
We have also examined compliance with commensurate with the size and operations
and appropriateness of financial records
(d) Salient terms of the contracts/arrangements/transactions Transfer or receipt of products, goods, materials or services on arm’s length the applicable clauses of the following: of the Company to monitor and ensure
and Books of Accounts of the
including the value, if any basis for an estimated amount of up to ` 36,550 million (i) Secretarial Standards issued by The compliance with applicable laws, rules,
company.
Institute of Company Secretaries of regulations and guidelines.
(e) Date(s) of approval by the board, if any NA. However, the transactions were approved by the audit committee 4. Where ever required, we have obtained
India; We further report that during the audit
(f) Amount paid as advances, if any - the Management representation about
(ii) The Securities and Exchange Board of period, the American Depository Receipts the compliance of laws, rules and
India (Listing Obligations and Disclosure (ADRs) of the Company have been listed regulations and happening of events etc.
requirements) Regulations, 2015. on NSE IFSC Limited (NSE International
K Satish Reddy 5. The compliance of the provisions
Exchange, GIFT City, Gujarat, India).
Chairman During the period under review the of Corporate and other applicable
Company has complied with the provisions For Makarand M. Joshi & Co. laws, rules, regulations, standards is
of the Act, Rules, Regulations, Guidelines Practicing Company Secretaries the responsibility of management.
and Standards, etc. mentioned above. Our examination was limited to the
Makarand Joshi verification of procedures on test basis.
ANNEXURE-III We further report that, having regard Partner
to the compliance system prevailing in FCS No. 5533 6. The Secretarial Audit report is
neither an assurance as to the future
viability
SECRETARIAL AUDIT REPORT books, papers, minute books, forms and returns filed and other records maintained (iii) The Depositories Act, 1996 and the Requirements) Regulations, the Company and on the examination of the
FOR THE FINANCIAL YEAR ENDED by the Company and also the information Regulations and Bye-laws framed there 2018; relevant documents and records in pursuance
MARCH 31, 2021 provided by the Company, its officers, under; thereof, on test- check basis, the Company has
[Pursuant to Section 204(1) of the agents and authorized representatives during complied with the following law applicable
(iv) Foreign Exchange Management Act,
Companies Act, 2013, and Rule 9 of the the conduct of secretarial audit, we hereby specifically to the Company:
Companies (Appointment and Remuneration 1999 and the rules and regulations
report that in our opinion, the Company has, (i) The Drugs and Cosmetics Act, 1940 and
of Managerial Personnel) Rules, 2014] made thereunder to the extent of
during the audit period covering the financial Rules made thereunder;
Foreign Direct Investment, Overseas
year ended on 31st March, 2021 (hereinafter
To, Direct Investment and External (ii) Drugs (Prices Control) Order, 2013 and
called the ‘Audit Period’) complied with the
The Members, Commercial Borrowings; Notifications made thereunder and;
statutory provisions listed hereunder and also
Dr. Reddy’s Laboratories Limited, that the Company has proper Board- (v) The following Regulations and (iii) The Narcotic Drugs and Psychotropic
8-2-337, Road No.3, Banjara processes and compliance-mechanism in Guidelines prescribed under the Substances Act, 1985.
Hills, place to the extent, in the manner and Securities and Exchange Board of
Hyderabad – 500 034, Telangana, India subject to the reporting made hereinafter: India Act, 1992 (‘SEBI Act’):-
We have conducted the secretarial audit a. The Securities and Exchange Board
We have examined the books, papers,
of the compliance of applicable statutory of India (Substantial Acquisition of
minute books, forms and returns filed and
provisions and the adherence to good Shares and Takeovers)
other records maintained by the Company
corporate practices by Dr. Reddy’s Regulations, 2011;
for the financial year ended on 31st March,
Laboratories Limited (hereinafter called 2021 according to the provisions of: b. The Securities and Exchange
‘the Company’). Secretarial Audit was (i) The Companies Act, 2013 (the Act), and Board of India (Prohibition of
conducted in a manner that provided the rules made there under; Insider Trading) Regulations,
us a reasonable basis for evaluating the 2015;
(ii) The Securities Contracts (Regulation)
corporate conducts/ statutory compliances
Act, 1956 (‘SCRA’) and the rules made c. The Securities and Exchange
and expressing our opinion thereon.
there under; Board of India (Issue of
Based on our verification of the Company’s Capital and Disclosure

8 8
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
CP No. 3662 of the company nor of the efficacy
UDIN: F005533C000301708 or effectiveness with which the
Peer Review No: P2009MH007000 management has conducted the
affairs of the company.
Place: Mumbai Date:
May 14, 2021 For Makarand M. Joshi & Co.
This report is to be read with our letter of Practicing Company
Secretaries
even date which is annexed as Annexure A
and forms an integral part of this report. Makarand
Joshi
Partner
FCS
No.
5533
CP
No.
3662
UDIN: F005533C000301708
Peer Review No: P2009MH007000
Place:
Mumbai
Date: May
14, 2021

8 8
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

ANNEXURE–IV (c) Details of CSR amount spent against other than ongoing projects for the financial year:
MODE OF IMPLEMENTATION THROUGH IMPLEMENTING
LOCATION OF THE PROJECT

IMPLEMENTATION
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

DIRECT (YES/NO)
SCHEDULE VII
1. Brief outline on CSR policy of the company:

THE PROJECT
ACTIVITIES IN

LOCAL AREA
THE LIST OF

OF THE ACT

(YES/NO)
At Dr. Reddy’s, all our activities are guided by our purpose and belief "We accelerate access to affordable and innovative medicines

ITEM FROM

CSR REGD.
SPENT ON

NUMBER
AMOUNT
DISTRICT

MODE OF
PROJECT
because Good Health Can’t Wait." Our business is based on a deep respect for people and the planet. Our contribution to societal

SL. NO.

OF THE
NAME
change embodies our values. We will continue to catalyse replicable, sustainable, and innovative actions for social change. We believe in

NAME
STATE

(IN `)
contributing to a sustainable community development and facilitating our efforts towards creating shared value.

2. Composition of CSR committee: 1 Quality education Education Yes Telangana Hyderabad 41,148,447 No Dr. Reddy’s CSR00000794
support serving
NUMBER OF MEETINGS OFNUMBER OF MEETINGS OF CSR COMMITTEE HELDCSR COMMITTEE low-
ATTENDED Foundation
SL.NAME OF THE NO. DIRECTOR
DESIGNATION / NATURE OF DIRECTORSHIP income community
DURING THE YEARDURING THE YEAR
schools

1 Mr. Bharat N Doshi* Independent Director, Chairman of 4 4 2 Providing quality Education Yes Telangana Ranga Reddy, 15,000,000 No Pudami CSR00003112
education to and Medchal - Educational
CSR committee (upto April 11, 2021) income peri-urban Malkajgiri Society
low-
2 Mr. Prasad R Menon** Independent Director, - - children through
Chairman of CSR committee pudami schools
3 Mr. K Satish Reddy Chairman, member of CSR committee 4 4 3 School Improvement Education Yes Telangana Hyderabad, 35,864,553 No Dr. Reddy’s CSR00000794

4 Mr. G V Prasad Co-chairman and Managing Director, 4 4

Programme (SIP) in and Andhra Nalgonda, Foundation

member of CSR committee government schools Pradesh Krishna, Guntur,
Visakhapatnam,
* Term ended on May 10, 2021, as a director.
** Appointed as a member and chairman, with effect from April 12, 2021. Vizianagaram,
and Srikakulam
3. The web-link where composition of CSR committee, CSR policy and CSR projects approved by the board are disclosed on 4 Enabling pure Education Yes Telangana Hyderabad 5,000,000 No University of CSR00006281
the website of the company: sciences higher Hyderabad
(a) Composition of the CSR committee - www.drreddys.com/investors/governance/committees-of-the-board/ education research
-Dr Anji Reddy
Chair
(b) CSR policy - www.drreddys.com/media/993225/csr-policy.pdf 5 Skilling and Livelihood No Kerala, Ernakulam, 1,300,000,000 No Dr. Reddy’s CSR00000794
(c) CSR projects - www.drreddys.com/our-people-and-our-citizenship/community/our-approach/ employability Madhya Jabalpur, Foundation
program for youth Pradesh, Indore,
4. Details of impact assessment of CSR projects carried out in pursuance of sub-rule (3) of Rule 8 of the Companies (Corporate Social Tamil Chennai, and
Responsibility Policy) Rules, 2014, if applicable (attach the report): Nadu and Bangalore
There are no projects undertaken or completed in FY2021 after the effective date of the aforementioned rules which warrant impact Karnataka
assessment. The company will carry out impact assessment of projects as may be applicable, and will provide details of the same as part of its future 6 MITRA - Agricultural Livelihood Yes Telangana Nalgonda and 9,900,000 No Dr. Reddy’s CSR00000794
reports as required pursuant to Rule 8(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014. program and Andhra Srikakulam Foundation
Pradesh
5. Details of the amount available for set-off in pursuance of sub-rule (3) of Rule 7 of the Companies (Corporate Social
7 Farmer livelihood Livelihood Yes Andhra Visakhapatnam 10,573,167 No Naandi CSR00001184
Responsibility Policy) Rules, 2014, and amount required for set-off for the financial year, if any: Not Applicable
project Pradesh Foundation
6. Average net profit of the company as per Section 135(5) of the Act: ` 17,050,145,140/- 8 Psychological Health Yes Telangana Hyderabad 1,220,000 No Roshni Trust CSR00000664
health support
7. (a) Two percent of average net profit of the company as per Section 135(5) of the Act: ` 341,002,903/- 9 Community health Health Yes Telangana Vizianagaram 15,000,000 No NICE CSR00000497
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: NA intervention and Andhra and Srikakulam Foundation
programme Pradesh
(c) Amount required to be set-off for the financial year, if any: NA
10 Community Rural Yes Telangana Nalgonda and 587,350 Yes NA NA
(d) Total CSR obligation for the financial year (7a�7b-7c): ` 341,002,903/- development development and Andhra Srikakulam
Pradesh
8. (a) CSR amount spent or unspent for the financial year: 11 COVID-19 relief Health Yes Telangana, Hyderabad, 91,683,464 Yes NA NA
AMOUNT UNSPENT (IN `) activities Andhra Nalgonda,
TOTAL Pradesh Visakhapatnam,
AMOUNT TRANSFERRED TO ANY FUND SPECIFIED and Vizianagaram,
AMOUNT TOTAL AMOUNT TRANSFERRED TO UNSPENT
SPENT FOR THE CSR ACCOUNT AS PER SECTION 135 (6) UNDER SCHEDULE VII AS PER THE SECOND PROVISION Himachal Srikakulam, and
OF SECTION 135 (5)
FINANCIAL Pradesh Solan
YEAR DATE OF Total 355,976,981
AMOUNT DATE OF TRANSFER NAME OF THE FUND AMOUNT TRANSFER
` 360,801,226 NA (d)Amount spent in administrative overheads: ` 4,824,245

(b) Details of CSR amount spent against ongoing projects for the financial year: Not Applicable (e)Amount spent on impact assessment, if applicable: Not Applicable

(f) Total amount spent for the financial year (8c�8d�8e): ` 360,801,226
9 9
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

9 9
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

(g) Excess amount for set off, if any�

ANNEXURE–VI refrigerant and to reduce the power cooling towers running which resulted
SL. consumption. Horizontal deployment of in better power saving. Integrated
PARTICULAR AMOUNT (IN `)
NO. Phase-IV, replacement of conventional compressor system to meet variable
CONSERVATION OF ENERGY,
(i) Two percent of average net profit of the company as per Section 135(5) 341,002,903 TECHNOLOGY ABSORPTION, FOREIGN belt driven blower motor assembly load demand and to stop multiple
EXCHANGE EARNINGS AND OUTGO with electronically commutated (EC) compressor running. Optimization
(ii) Total amount spent for the financial year 360,801,226
motor technology in HVAC systems of RH% when no production activity.
(iii) Excess amount spent for the financial year �(ii)-(i)� 19,798,323 (A)CONSERVATION OF ENERGY
across FTO sites. Phase-V, horizontal Enhancing the efficiencies of refrigerant
During the year, the company has compressors by adopting artic master
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any NA deployment of automatic tube
implemented energy conservation projects and ECO plug technologies. Boiler
cleaning system in refrigeration
(v) Amount available for set-off in succeeding financial years �(iii)-(iv)� 19,798,323 across its various business units and efficiency improvement by better
chillers and heat pumps. Phase-V zero
accrued savings of approximately ` 154 condensate recovery. Consolidation &
purge loss air dryers/HOC drier
9. (a) Details of unspent CSR amount for the preceding three financial years� Not Applicable million against an investment of ` 207 optimized utilization of chilled water/
replaced in place of purge loss drier in
million. brine/air/nitrogen compressors based
(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s)� Not Applicable compressed air network. Replacement
With above energy saving projects of existing conventional lights with LED on load for CTO sites.
10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent implementation, we have reduced 23,033 lights, installation of occupancy sensors 3. Identifying renewable power sources
in the financial year� Not Applicable tons of CO2 emissions on FY2020 base. to have energy efficient lighting system. at low cost: Roof top solar power
11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per Section 135(5)� Not Applicable Additional ` 301 million is being spend for Phase–II implementation scale and bio plants of 2.6 MW got commissioned in
the energy conservation projects including removal system for cooling tower water FTO-2, FTO-7, FTO-9, FTO-PU1 and
IOT for HVAC systems on high side & low in place of normal chemical treatment. FTO-11 plants. 1.5 MW hydel power
G V Prasad Prasad R Menon
Co-Chairman and Managing Director Chairman of CSR Committee side, FLP EC plus blowers for giving 2. Optimization of designs and supply started to FTO-7 and FTO-9
saving in FY2022. operational efficiencies: Optimization plants.
of compressed air pressure and 1 MW solar power supply started to
Major categories of energy projects are:
integration of compressed air piping, IPDO.
1. Installation of Innovative technology:
Steam operated pump trap technology arresting the air leakages & reduction of With above renewable power additions,
ANNEXURE - V the unloading hours of air compressor
adopted to use in steam distribution we have reduced 4,970 tons of CO2
system, which reduced the losses in units. Integration of chillers to increase emissions on FY2020 base.
Information in terms of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and the efficiency and to stop multiple
Remuneration of Managerial Personnel) Rules, 2014. steam distribution network. Intelligent New power purchase agreements
Now controller technology adopted chillers running. Replaced existing
(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company and the percentage increase/ pumps with energy efficient pumps, signed off for supply of 11 MW solar
to use in compressed air distribution power for FTO-2, Biologics, FTO-11 &
(decrease) in remuneration of each director, CEO, CFO and CS for FY2021: system, which reduced the losses in replaced existing chillers with energy
efficient chillers. Optimization of IPDO plants, 5.5 MW roof top & land
RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION compressed
OF air network replacement mounted solar capacities for various
% INCREASE/(DECREASE) IN REMUNERATION HVAC usage by shut down/sleep mode
of conventional blowers with energy plants to supply power in FY2022.
NAME DESIGNATION operations based on plant operational
efficient blowers in e�uent treatment
operation. Replacement of conventional requirements. Installed VFD for AHU’s With the above renewable capacity
split AC unit with variable refrigerant to minimize power losses, installed addition the total roof top capacity has
NG/FOR FY2021 capacitor banks to maintain power become 8.9 MW, 45 MW third party
DURI volume technology in HVAC system.
EMPLOYEES Replacement of conventional belt factor close to unity, optimization of PPA’s and 15 MW through JVC.
Mr. K Satish Reddy (1)
Chairman 211 14 chilled water temperature based on
driven axial fan motor assembly with During the year, the company has joined
Mr. G V Prasad(1) Co-Chairman and Managing Director 313 9 electronically commutated (EC) environmental temperature changes.
Installed heat pumps to reduce steam the Science Based Targets initiative's
motor technology in cooling towers (SBTi) business ambition for 1.5 °C,
Mr. Allan Oberman Independent director 21 (11) consumption, effectively reduced
across FTO sites. Phase-II becoming the first Indian and the third
Mr. Bharat N Doshi Independent director 25 - FO consumption by improving hot
implementation of artic maser in Asian pharmaceutical company to have
condensate recovery, integrated chillers
Dr. Bruce L A Carter Independent director 22 (11) most of the HVAC systems to regulate set its Science-Based Targets to further
and DG cooling towers to stop
the Now of minimize environmental impact.
Ms. Kalpana Morparia Independent director 22 (3) multiple
Mr. Leo Puri Independent director 21 (11)
(B) TECHNOLOGY ABSORPTION
Mr. Prasad R Menon Independent director 26 (3)
i. Efforts made towards technology absorption The company has a full-Nedged R&D division continuously engaged in research
Ms. Shikha
on new products andSharma
process improvement Independent
on existing director
products as part of continuous improvement. As a 22 (3)adoption, once technology is developed for a product, it is tested in a pilot plant and thereafter commercial production is performed. Innovation is embarked by an
part of technology absorption and
incrementalMr.
approach towards cost, time, Independent
Sridar Iyengar quality and complex
director product development by adopting cutting edge23 technology and our philosophy (10)
is to continuously upgrade the technology.
Mr. Erez Israeli (5)
Chief Executive Officer (CEO) NA 6 ii. Benefits derived like product improvement, cost Successful development of complex generics products accomplished through
reduction, product development or import substitution innovation and science. Improved quality by adopting quality by design concept.
Mr.
(1) Saumen
Includes Chakraborty
commission, salary and Chief
perquisites.
(2)(4)(5)
Financial
They Officer
do not receive (CFO)
any amount as remuneration from any subsidiary company. NA NA Technology adoption yielded improvement in robustness and cost.
(2) Retired with effect from December 1, 2020.
Mr.
(3) Parag
Was Agarwal
appointed
(3)(4)(5)
Chief
chief financial officer (CFO) Financial
with effect Officer1, (CFO)
from December 2020. NA NA iii. In case of imported technology (imported during the No imported technology
(4)
Mr.Remuneration
Sandeep inPoddarFY2021(5)was paid for partCompany
of the year, hence
Secretary
not comparable.
(CS) NA 8 last three years reckoned from the beginning of the
(�) Includes fixed pay, actual variable pay, fuel � maintenance on actuals and excludes value of stock options. financial year) –
(ii) The median remuneration of employees decreased by 1.5% in FY2021. a) Details of technology imported
b) Year of import
(iii) The number of permanent employees on the rolls of the company as on March 31, 2021, is 23,704. c) Whether the technology been fully absorbed
(iv) Average percentage increase in the salaries of employees other than KMP for FY2021 was 6% as compared to FY2020. There was an d) If not fully absorbed, areas where absorption has
increase of 15% in the total remuneration of executive directors and KMP for FY2021 on account of computation of remuneration, on not taken place, and the reasons therefore
accrual basis to executive directors and on actual basis for CEO, CFO and CS.
(v) It is hereby affirmed that the remuneration for FY2021 is as per the remuneration policy of the company.
K Satish Reddy
Chairman

9 9
 Dr. Reddy’s Laboratories Limited Company OverviewStatutory ReportsFinancial Statements Annual Report 2020-21

iv. Expenditure incurred on R&D FY2021 FY2020

a) Capital (` million) 562 654
b) Recurring* (` million) 12,542 11,343
c) Total (` million) 13,104 11,997
Total R&D expenditure as a % of total turnover 9.82% 10.12%
* Excluding depreciation and amortization

STANDALONE FINANCIAL STATEM

C) FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign exchange earned in terms of actual inNows and foreign exchange outgo in terms of actual outNows during the year�
(` MILLION)

PARTICULARS FY2021
Foreign exchange earned in terms of actual inNows 97,699
Foreign exchange outgo in terms of actual outNows 34,420

K Satish Reddy
Chairman

Independent Auditors’ Report Balance96

Sheet
Statement of Profit and Loss Statement
104of Changes in Equity Statem
Notes to Financial Statements 105
106
108
109

9 9
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

INDEPENDENT AUDITORS' REPORT

To the Members of Dr. Reddy’s Laboratories Limited
INDEPENDENT AUDITORS' REPORT (CONTINUED)
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion Key audit mattersHow our audit addressed the key audit matter
We have audited the accompanying standalone Ind AS financial statements of Dr. Reddy’s Laboratories Limited (“the Company”), which
comprise the Balance sheet as at 31 March 2021, the Statement of Profit and Loss, including the statement of Other Comprehensive
Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS Assessment of carrying value of intangible assets, intangible assets under development and goodwill (as described in note 1.3(f) and
financial statements, including a summary of significant accounting policies and other explanatory information. 1.3(i) of the significant accounting policies� and note 2.2� 2.3 and 2.4 for details and movement in goodwill� other intangible assets and
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial intangible assets under development respectively in the standalone Ind AS financial statements)
statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true
and fair view in
conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2021, its profit As at 31 March 2021, the Company has intangible Our audit procedures, among others included the following:
assets,
including other comprehensive income, its cash Nows and the changes in equity for the year ended on that date.
including intangible assets under development, of • We evaluated the design and tested the operating effectiveness of the
Basis for Opinion Rs. 22,035 million and goodwill of Rs. 853 million. Company's controls in assessing the recoverable value of goodwill,
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under The carrying value of these intangible assets are intangible assets and intangible assets under development.
section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the based on future cash flows and there is a risk that the
standalone Ind AS financial statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ assets may be impaired if cash flows are not in line with
• We assessed the Company’s methodology applied in determining the CGUs
to which these assets are allocated.
issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial projections.
statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance • We tested the estimated recoverable value of these assets and assessed
with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a Valuation of goodwill and intangible assets is subject to
the methodologies used by management in deriving the recoverable value
basis for our audit opinion on the standalone Ind AS financial statements. management's assessment of recoverable amount,
and tested the significant assumptions and the underlying data used by the
being the higher of the value in use and fair value less
Key audit matters Company in its analyses.
costs to sell, involving significant judgment and are
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS based on number of variables and estimates • We compared the significant assumptions to current industry, market and
financial statements for the financial year ended 31 March 2021. These matters were addressed in the context of our audit of the standalone including projection of future sales, operating costs economic trends, to the Company's historical data.
Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For and profit margins; appropriate discount rate and
each matter below, our description of how our audit addressed the matter is provided in that context. • We performed sensitivity analyses of the significant assumptions to evaluate
terminal value growth rate; and probability of technical the potential change in the recoverable values of these assets resulting
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the and regulatory success factors in applying discounted from hypothetical changes in underlying assumptions. We also assessed the
responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements section of our report, cash Now valuation methodology. As the assessment
recoverable value headroom by performing sensitivity testing of key
including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of of recoverable amount involves significant degree of
assumptions used.
the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures management judgement, we have identified this a key
performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements. audit matter. • We tested the arithmetical accuracy of the models.
• We involved valuation specialist to assist in evaluating the methodologies used
Key audit matters How our audit addressed the key audit matter and significant assumptions and inputs used to determine the recoverable value
Business transfer agreement with Wockhardt Limited (as described in note 1.3(d) of the significant accounting policies and note 2.38 of the of certain intangible assets.
standalone Ind AS financial statements)
Contingencies, including litigations and tax (as described in note 1.3(k) of the significant accounting policies� and note 2.29 (A) containing
During the current year, the Company completed the Our audit procedures, among others included the details of contingencies in the standalone Ind AS financial statements)
acquisition of select divisions of the branded generics following:
business of Wockhardt Limited in India and the • We evaluated the design and tested the operating effectiveness of the controls The Company is involved in disputes, lawsuits, Our audit procedures, among others included the following:
territories of Nepal, Sri Lanka, Bhutan and Maldives. The over the Company’s calculation of the estimated fair values of the intangible claims,
anti-trust, governmental and / or regulatory inspections, • We evaluated the design and tested the operating effectiveness of controls
transaction was accounted for as a business assets and the contingent consideration.
inquiries, investigations and proceedings, including relating to identification and evaluation of claims, proceedings and
combination. The Company’s accounting for the investigations at different levels in the Company, and the measurement of
acquisition included determining the fair value of the • We assessed the competence and independence of the third-party valuer patent, tax and commercial matters that arise from time
by reference to their qualifications and experience. to time in the ordinary course of business. Most of provisions for disputes, potential claims and litigation, contingent liabilities and
assets acquired, which primarily included product
the claims involve complex issues. The Company disclosures.
related intangibles. In connection with the • We tested the estimated fair value of the intangible assets and the contingent
acquisition, the Company recognized a contingent assisted by their external legal counsel assesses the • We obtained a list of ongoing litigations from the Company’s in-house legal
consideration liability, evaluated Company's selected valuation methods need to make provision or disclose a contingency on
consideration liability for acquisition consideration that counsel. We selected a sample of litigations based on materiality and
and tested the significant assumptions used in the models. In testing the a case- to-case basis considering the underlying facts
is payable based on a multiple of incremental revenue performed inquiries with the said counsel on the legal evaluation of these
valuation of contingent consideration, we assessed, among others, the of each litigation.
targets subject to a maximum amount. litigations. We compared the evaluation with the provision or disclosure in the
terms of the arrangement and the conditions met for the amounts to become
This area is significant to our audit, since the accounting standalone Ind AS financial statements. We tested the underlying
The accounting for the business combination was payable.
and disclosure for contingent legal and tax liabilities is computation of the management in relation to the measurement of provision
complex due to the significant estimation required by
• We compared the significant assumptions to current industry, market and complex and judgmental (due to the difficulty in or the contingency.
management to determine the fair value of the
intangible assets and the contingent consideration. The economic trends, assumptions used to value similar assets, and to the predicting the outcome of the matter and estimating the • We obtained legal letters from the Company’s external legal advisors with
significant estimation uncertainty was primarily due to historical results of the acquired business. potential impact if the outcome is unfavourable), and respect to the matters included in the summary. Where appropriate, we
the sensitivity of the respective fair values to the the amounts involved are, or can be, material to the examined correspondences connected with the cases.
underlying assumptions utilized in the measurement of • We involved valuation specialist to assist in evaluating the appropriateness standalone Ind AS financial statements.
the fair value of the intangible assets and contingent of the valuation model, key assumptions used in the valuation models and to • We inspected relevant communication with tax authorities.
consideration. The Company used a discounted cash test the model’s computational accuracy. • We involved tax experts in assessing the nature and amount of material
Now model to measure the fair value of the intangible indirect tax positions and assessed the technical merits based on the
• We tested the arithmetical accuracy of the models. correspondence and assessments from the relevant tax authorities.
assets, which included significant assumptions such
as the discount rate, useful life, and long-term growth • We also tested the completeness and accuracy of the underlying data used in • We also evaluated the disclosures made in the standalone Ind AS financial
rate. The Company measured the contingent the model. statements.
consideration at its estimated fair value, and the
significant assumptions used to determine the fair
value of contingent consideration included forecasted
revenue projections, revenue volatility and a risk
adjusted discount rate. Considering the above, this has
been included as a Key Audit Matter.

9 9
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

INDEPENDENT AUDITORS' REPORT (CONTINUED)

INDEPENDENT AUDITORS' REPORT (CONTINUED)

Key audit mattersHow our audit addressed the key audit matter
Auditor’s Responsibilities for the Audit of the standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS Financial Statements as a whole are free from material
Rebates, discounts and other deductions in Revenue (as described in note 1.3(l� of the significant accounting policies of standalone Ind
AS financial statements and note 2.12 of the standalone Ind AS financial statements� misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to
Revenue is recognised net of accrual for chargeback, Our audit procedures, among others included the following: inNuence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
rebates, sales returns and discounts, etc. The estimates
• We obtained an understanding, evaluated the design and tested the operating
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We
relating to the accruals are important given the effectiveness of internal controls over the sales deduction processes.
significance of revenue and also considering the
also:
distinctive terms of arrangement with customers. • We also tested management’s controls over the accuracy and completeness of
These estimates are complex and requires significant the estimates used to calculate the sales deductions.
• Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design
judgement and estimation by the Company for • We tested management’s estimated sales deductions and obtained and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
establishing an appropriate accrual. Accuracy of management’s calculations for the respective estimates. We tested for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
revenues may deviate on account of change in management’s estimates over the determination of sales deductions accruals may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
judgements and estimates. Accordingly, the same has by comparing the rates used in management’s estimate to rates in the
been considered as a key audit matter.
underlying contracts and historical sales deductions data. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate
• We compared the assumptions to contracted prices, historical rebates, internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
discounts, allowances and returns, as applicable to current payment trends.
• We also considered the historical accuracy of the management’s estimates • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
in prior years and assessed the estimated amounts, we evaluated trends in
actual sales and discount accrual balances.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
• We also tested the underlying data used in management's calculations for whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a
accuracy and completeness and verified source data supporting the inventory going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
levels, rebate claims paid subsequent to period end, and volume discounts related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
settled during the period. the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
• We tested recording of revenue in appropriate period which included the
following procedures: going concern.

• Performed trend analysis over sales levels as compared to previous periods; • Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and
• Verified sample sales transactions near period-end. whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

Other Information We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
The Company’s Board of Directors is responsible for the other information. The other information comprises the Statutory reports, Management and where applicable, related safeguards.
discussion and analysis, corporate governance and Board’s report included in the Annual report, which we obtained prior to the date of
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit
this auditor’s report, and Corporate Overview and letter from Chairman and Co-Chairman included in the Annual report, which is expected
of the standalone Ind AS financial statements for the financial year ended 31 March 2021 and are therefore the key audit matters. We describe
to be made available to us after that date. The other information does not include the standalone Ind AS financial statements and our auditor’s
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
report thereon.
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance reasonably be expected to outweigh the public interest benefits of such communication.
conclusion thereon.
Report on Other Legal and Regulatory Requirements
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, 1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of
consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of Order.
this other information, we are required to report that fact. We have nothing to report in this regard.
2. As required by Section 143(3) of the Act, we report that:
Responsibilities of Management for the standalone Ind AS Financial Statements
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of
purposes of our audit;
these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other
comprehensive income, cash Nows and changes in equity of the Company in accordance with the accounting principles generally accepted in b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination
India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting of those books;
Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the
c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement
provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities;
and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the
design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133
completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
true and fair view and are free from material misstatement, whether due to fraud or error.
e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors,
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company’s ability to continue as a going none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either
f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
g) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Company to its

9 9
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
directors in accordance with the provisions of section 197 read with Schedule V to the Act;

9 9
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

INDEPENDENT AUDITORS' REPORT (CONTINUED) ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE IND
AS FINANCIAL STATEMENTS OF DR. REDDY’S LABORATORIES LIMITED
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: (i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements– b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification
Refer Note 2.29(A) to the standalone Ind AS financial statements�
which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if
were noticed on such verification.
any, on long-term contracts including derivative contracts – Refer Note 2.27 to the standalone Ind AS financial statements�
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the c) According to the information and explanations given by the management, the title deeds of immovable properties, included in
Company. property, plant and equipment are held in the name of the Company, except for the immovable properties acquired during the
current year. As explained to us, Registration of title deeds is in progress in respect of an immovable property acquired during the
year aggregating Rs. 194 million.
for S.R. Batliboi & Associates LLP
Chartered Accountants (ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies
ICAI Firm Registration Number: were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at 31 March 2021 and no
101049W/E300004 per S Balasubrahmanyam material discrepancies were noticed in respect of such confirmations.
Partner
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies,
Membership Number: 53315
UDIN: 21053315AAAABK8303 firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
Accordingly, the provisions of clause 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented
Place: Chennai upon.
Date : 14 May
2021 (iv) In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to
a company in which the Director is interested to which provisions of section 185 of the Companies Act, 2013 apply and hence not
commented upon. In our opinion and according to the information and explanations given to us, the Company has made
investments and given guarantees/provided security which is in compliance with the provisions of section 186 of the Companies Act,
2013.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of
Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for
the maintenance of cost records under section 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the specified
accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state
insurance, income-tax, duty of customs, goods and service tax, cess and other statutory dues applicable to it.
b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’
state insurance, income-tax, duty of customs, goods and service tax, cess and other statutory dues were outstanding, at the year end,
for a period of more than six months from the date they became payable.
c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of customs, duty of excise, value added
tax and cess on account of any dispute, are as set out in Appendix 1.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment
of loans or borrowing to banks or government. There are no dues which are payable to financial institutions. The Company did not have
any debenture holders during the year.
(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public
offer/ further public offer/ debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence
not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial
statements and according to the information and explanations given by the management, we report that no fraud by the Company or no
material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in
accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3 (xii) of the order are not applicable to the
Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance
with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the standalone Ind
AS financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made
any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and
hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE IND
ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE IND AS
AS FINANCIAL STATEMENTS OF DR. REDDY’S LABORATORIES LIMITED (CONTINUED)
FINANCIAL STATEMENTS OF DR. REDDY’S LABORATORIES LIMITED

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions
with directors or persons connected with him as referred to in section 192 of Companies Act, 2013. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not We have audited the internal financial controls with reference to standalone Ind AS financial statements of Dr. Reddy’s Laboratories
applicable to the Company. Limited (“the Company”) as of 31 March 2021 in conjunction with our audit of the standalone Ind AS financial statements of the Company for
the year ended on that date.
Management’s Responsibility for Internal Financial Controls
for S.R. Batliboi & Associates LLP The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over
Chartered Accountants financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on
ICAI Firm Registration Number: Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These
101049W/E300004 per S Balasubrahmanyam responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating
Partner effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of
Membership Number: 53315 its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely
UDIN: 21053315AAAABK8303 preparation of reliable financial information, as required under the Companies Act, 2013.
Place: Chennai Auditor’s Responsibility
Date: 14 May Our responsibility is to express an opinion on the Company's internal financial controls with reference to these standalone Ind AS
2021 financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Act, to the
extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial
controls with reference to standalone Ind AS financial statements was established and maintained and if such controls operated effectively in all
material respects.
APPENDIX 1 AS REFERRED TO IN PARAGRAPH vii(c) OF ANNEXURE 1 TO INDEPENDENT AUDITORS’ REPORT
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to these
Disputed Amount Paid Period to which Forum where standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone
Name of the Nature of the dispute is
Amount under protest the amount Ind AS financial statements included obtaining an understanding of internal financial controls with reference to these standalone Ind AS
Statute dues Pending
in ₹ in ₹ Million relates financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of
Million internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the
risks of material
2001-2019
1,778 Appellate Authority - misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
Excise Duty, Interest upto Commissioners
Central Excise Act, 1944 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s
internal
and Penalty 89
406 2003-2017 CESTAT financial controls with reference to these standalone Ind AS financial statements.
54 2002-2008 High Court Meaning of Internal Financial Controls With Reference to these Standalone Ind AS Financial Statements
Appellate Authority - A company's internal financial controls with reference to standalone Ind AS financial statements is a process designed to provide reasonable assurance
41 2010-2020 upto Commissioners regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
Customs Act, 1962 Custom Duty 6 accounting principles. A company's internal financial controls with reference to standalone Ind AS financial statements includes those policies and
6 2010-2011 High Court procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reNect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
Cenvat Credit of 110 2012- 2016 CESTAT
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
Service Tax, Interest
6 Appellate Authority - upto with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
Finance Act, 1994 and Penalty 29
2005- Commissioners unauthorised acquisition, use, or disposition of the company's assets that could have a
2016
Service Tax and Penalty material effect on the standalone Ind AS financial statements.
177 2010-2015 CESTAT
Inherent Limitations of Internal Financial Controls With Reference to these Standalone Ind AS Financial Statements
Sales Tax Appellate
103 2002-2015 Because of the inherent limitations of internal financial controls with reference to standalone Ind AS financial statements, including the possibility
Tribunal.
Central Sales Tax Act of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.
and Sales Tax Acts of Sales Tax and Penalty 207 Appellate Tribunal - Also, projections of any evaluation of the internal financial controls with reference to standalone Ind AS financial statements to future periods are
various States 69 2003-2018
Upto Commissioners subject to the risk that the internal financial control with reference to standalone Ind AS financial statements may become inadequate because of
73 2007-2014 changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
High Court
Opinion
CGST Act , 2017 2017-2019 Appellate Authority –
GST 22 upto Commissioners In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone Ind AS financial
statements and such internal financial controls with reference to standalone Ind AS financial statements were operating effectively as at
2 2002-2003 High Court 31 March 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of
Income Tax Act, 1961 Income Tax
90 2017-2019 internal control stated in the Guidance Note issued by the ICAI.
Commissioner Appeal

for S.R. Batliboi & Associates LLP

Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per S Balasubrahmanyam
Partner
Membership Number: 53315

1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
UDIN: 21053315AAAABK8303
Place: Chennai
Date: 14 May 2021

1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

BALANCE SHEET
STATEMENT OF PROFIT AND LOSS
(All amounts in Indian Rupees millions, except share data and where otherwise stated) (All amounts in Indian Rupees millions, except share data and where otherwise stated)
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 M
PARTICULARS NOTE PARTICULARS NOTE
Assets Income
Non-current assets
Property, plant and equipment 2.1 35�792 37�698 Sales 2.12 132�094 109�925
Capital work-in-progress 8�771 3�841 Service income and License fees 2.12 720 8�105
Goodwill 2.2 853 323 Other operating income 2.13 677 474
Other intangible assets 2.3 21�798 6�318 Total revenue from operations 133�491 118�504
Intangible assets under development 2.4 237 277 Other income 2.14 8�011 7�432
Financial assets Total income 141�502 125�936
Investments 2.5 A 33�922 33�671
Trade receivables 2.5 B 118 1�737 Expenses
Loans 2.5 C 12 12 Cost of materials consumed 32�663 25�565
Other financial assets 2.5 D 492 474 Purchase of stock-in-trade 12�523 11�172
Deferred tax assets, net
2.26 2�548 6�129 Changes in inventories of finished goods�
2.15 (3�956) (999)
Tax assets, net 2�151 3�073 work-in-progress and stock-in-trade
Other non-current assets 2.6 A 160 138 Employee benefits expense 2.16 22�701 20�302
ƄƃƉƁƋƈƇ ƌƆƁƉƌƄ Depreciation and amortisation expense 2.17 8�350 7�892
Current assets Impairment of non current assets 150 -
Inventories
2.7 28�197 21�904
Finance costs 2.18 467 478
Financial assets Selling and other expenses 2.19 38�042 33�768
Investments 2.5 A 15�972 21�184
Total expenses 110�940 98�178
Trade receivables 2.5 B 40�800 46�387
Derivative instruments 2.27 915 783
Profit before tax 30�562 27�758
Cash and cash equivalents 2.5 E 13�063 392
Tax expense/(benefit) 2.26
Other financial assets 2.5 D 529 1�888
9�966 8�529
Current tax
Other current assets 2.6 B 5�401 4�839
Deferred tax 3�297 (6�458)
ƄƃƌƁƇƇƅ ƄƃƄƁƃƉƊ
Profit for the year 21�864 29�377
Total assets 216�296 194�758

Equity and Liabilities Other comprehensive income (OCI)

Equity Items that will not be reclassified subsequently
(169) 88
Equity share capital Other 2.8 832 831 to profit or loss
equity 169�005 151�088 Income tax on items that will not be
62 (33)
ƄƉƌƁƋƆƊ ƄƈƄƁƌƄƌ reclassified subsequently to profit or loss
Liabilities (107) 55
Non-current liabilities Items that will be reclassified subsequently to profit or loss 994 (750)
Financial liabilities
Borrowings 2.9 A 177 193 Income tax on items that will be reclassified subsequently
(346) 259
Provisions 2.10 A 251 545 profit or loss
to
Deferred tax liabilities, net 2.26 - - 648 (491)
Other non-current liabilities 2.11 A 428 296 Total other comprehensive income/(loss) for the year, net of tax 541 (436)
ƋƈƉ ƄƁƃƆƇ

Current liabilities
Total comprehensive income for the year 22�405 28�941
Financial liabilities
Earnings per share: 2.22
Borrowings 2.9 B 11�809 10�436 Basic earnings per share of ₹ 5/- each 131�84 177�23
Trade payables 2.9 C Diluted earnings per share of ₹ 5/- 131�46 176�88
each
Total outstanding dues of micro enterprises
and small enterprises The accompanying notes are an integral part of the financial statements�
152 55
Place: Chennai Date: 14 May 2021 Chief Executive Officer
Total outstanding dues of creditors other than 104 A
13�212 10�629 Parag Agarwal Chief Financial Officer
micro enterprises and small enterprises s
Sandeep Poddar Company Secretary
Derivative instruments 2.27 306 1�524
Other financial liabilities 2.9 D 12�169 13�928 Place: Hyderabad Date: 14
May 2021 p
Provisions 2.10 B 2�987 2�073
Other current liabilities 2.11 B 4�968 3�160 e
ƇƈƁƉƃƆ ƇƄƁƋƃƈ r
Total equity and liabilities 216�296 194�758
The accompanying notes are an integral part of the financial statements� o
As per our report of even date attached for and on behalf of the Board of Directors of Dr. u
for S.R. Batliboi & Associates LLP Reddy's Laboratories Limited r
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
r
per S Balasubrahmanyam K Satish Reddy Chairman, DIN: 00129701
Partner
e
G V Prasad Co-Chairman & Managing
Membership Number: 53315 Director, DIN: 00057433 p
UDIN : 21053315AAAABK8303 Erez Israeli o
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
rt of even date attached for S.R.
for and on behalf of the Board of Directors of Dr. Reddy's Laboratories
Batliboi & Associates LLP Chartered Limited
Accountants
ICAI Firm Registration Number: 101049W/E300004
per S Balasubrahmanyam K Satish Reddy Chairman, DIN: 00129701
Partner Membership
G V Prasad Co-Chairman & Managing Director, DIN:
Number: 53315 UDIN: 00057433
21053315AAAABK8303 Erez Israeli Chief Executive
Place: Chennai Officer Parag Agarwal Chief
Date: 14 May 2021 Financial Officer Sandeep Poddar
Company
Secretary
Place: Hyderabad
Date: 14 May
2021

105
 STATEMENT OF CHANGES IN EQUITY
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

Dr. Reddy’s Laboratories Limited

Other components of equity
Reserves and surplus Other comprehensive income
Equity Treasury Securities Share- Capital Capital General Retained Special Cash FVTOCI** Remeasurements Total
PARTICULARS share (1) (2)
based reserve(4) redemption reserve
(6)
earnings economic Now reserve(8) of the net defined equity
capital shares premium
payment reserve
(5)
zon hedge benefits
reserve
(3)
e re- plan
(9)

investment reserve(7)
(10)
reserve
Balance as at 1 April 2020 (A) 831 (1�006) 5�909 1�038 267 25 20�302 124�979 - (353) (13) (60) 151�919
Profit for the year - - - - - - - 21�864 - - - - 21�864
Net change in fair value of FVTOCI** equity instruments, net of tax benefit of ₹ Nil - - - - - - - - - - 17 - 17
Transfer on disposal of equity instruments classified as FVTOCI instruments - - - - - - - 3 - - (3) - -
Effective portion of changes in fair value of cash Now hedges, net of tax expense of
- - - - - - - - - 641 - - 641
₹ 346 (Refer note 2.27)
Actuarial gain/(loss) on post-employment benefit obligations, net of tax benefit of
- - - - - - - - - - - (117) (117)
₹ 62 (Refer note 2.25)
Total comprehensive income (B) - - - - - - - 21�867 - 641 14 (117) 22�405
Transactions with owners of the Company
Contributions and distributions
Issue of equity shares on exercise of options (Refer note 2.8) 1 232 392 (356) - - - - - - - - 269
Share-based payment expense (Refer note 2.24) - - - 584 - - - - - - - - 584
Purchase of treasury shares, net - (1�193) - - - - - - - - - - (1�193)
Dividend paid - - - - - - - (4�147) - - - - (4�147)
Total contributions and distributions 1 �961� 392 228 - - - �4�147� - - - - (4�487)
Changes in ownership interests - - - - - - - - - - - - -
Total transactions with owners of the Company (C) 1 (961) 392 228 - - - (4�147) - - - - (4�487)
Transfer to special economic zone re-investment reserve - - - - - - - (1�402) 1�402 - - - -
Transfer from special economic zone re-investment reserve on utilization - - - - - - - 76 (76) - - - -
(10)
Transfer to special economic zone re-investment reserve, net (D) - - - - - - - (1�326) 1�326 - - - -
Balance as at 31 March 2021 [(A)+(B)+(C)+(D)] 832 (1�967) 6�301 1�266 267 25 20�302 141�373 1�326 288 1 (177) 169�837

Other components of equity

Reserves and surplus Other comprehensive income
Equity Treasury Securities Share- Capital Capital General Retained Special Cash FVTOCI** Remeasurements Total
PARTICULARS share (1) (2)
based reserve(4) redemption reserve
(6)
earnings economic Now reserve(8) of the net defined equity
capital shares premium
payment reserve
(5)
zon hedge benefits
reserve
(3)
e re- plan
(9)

investment reserve(7)
(10)
reserve
Balance as at 1 April 2019 (A) 830 (535) 5�631 795 267 25 20�302 99�511 131 6 (122) 126�841
Profit for the year - - - - - - - 29�377 - - - - 29�377
Net change in fair value of FVTOCI** equity instruments, net of tax benefit of ₹ Nil - - - - - - - - - - (14) - (14)
Transfer on disposal of equity instruments classified as FVTOCI instruments - - - - - - - 5 - - (5) - -
Effective portion of changes in fair value of cash Now hedges, net of tax benefit of ₹ 259 - - - - - - - - (484) - - (484)
(Refer note 2.27) -
Actuarial gain/(loss) on post-employment benefit obligations, net of tax expense of ₹ 33 - - - - - - - - - - 62 62
(Refer note 2.25) -
Total comprehensive income (B) - - - - - - - 29�382 - (484) (19) 62 28�941
Transactions with owners of the Company
Contributions and distributions
Issue of equity shares on exercise of options (Refer note 2.8) 1 3 278 (278) - - - - - - - - 4
Share-based payment expense (Refer note 2.24) - - - 521 - - - - - - - - 521
Purchase of treasury shares, - (474) - - - - - - - - - - (474)
Dividend paid (including dividend distribution tax) - - - - - - - (3914) - - - - (3�914)
Total contributions and distributions 1 �471� 278 243 - - - �3�914� - - - - (3�863)
Changes in ownership interests - - - - - - - - - - - - -
Total transactions with owners of the Company (C) 1 (471) 278 243 - - - (3�914) - - - - (3�863)
Balance as at 31 March 2020 [(A)+(B)+(C)] 831 (1�006) 5�909 1�038 267 25 20�302 124�979 - (353) (13) (60) 151�919-

*Rounded off to millions�

**FVTOCI represents fair value through other comprehensive income

STATEMENT OF CHANGES IN EQUITY (CONTINUED)

(All amounts in Indian Rupees millions, except share data and where otherwise stated)

(1)
Pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on 27 July 2018, the Dr. Reddy’s Employees ESOS Trust (the “ESOS Trust”) was formed to support the
Dr. Reddy’s Employees Stock Option Scheme, 2018 by acquiring, including through secondary market acquisitions, equity shares which are used for issuance to eligible employees upon exercise of stock
options thereunder. Refer note 2.24 of these financial statements for further details on the Dr. Reddy’s Employees Stock Option Scheme, 2018.
(2)
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.
(3)
Share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees as part of their remuneration. Refer note 2.24 for further details of these
(4) plans. The Company recognises profit or loss on purchase, sale, issue or cancellation of the Company’s own equity instruments to capital reserve.
(5)
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so
purchased is transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of Section 69 of the Companies Act, 2013.
The general reserve is a free reserve which is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component
(6)

of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.
(7)
The cash Now hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash Now hedges.
Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged transaction occurs.
(8)

This reserve represents mark to market gain or loss on financial assets classified as FVTOCI. Depending on the category and type of the financial asset, the mark to market gain or loss is either reclassified to
statement of profit and loss or retained earnings upon disposal of the investment.
(9)

Remeasurements of the net defined benefits plan reserve comprises the cumulative net gains/ losses on actuarial valuation of post-employment obligations. Refer note 2.25 for further details.
(10)
Company Overview

The Company has created a Special Economic Zone (“SEZ”) Reinvestment Reserve out of profits of its eligible SEZ Units in accordance with the terms of Section 10AA(1) of the Indian Income Tax Act, 1961.
This reserve is to be utilized by the Company for acquiring Plant and equipment in accordance with Section 10AA(2) of such Act.
The accompanying notes are an integral part of the financial statements.

As per our report of even date attached

for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited
for S.R. Batliboi & Associates LLP
Chartered Accountants
Statutory Reports

ICAI Firm Registration Number: 101049W/E300004

K Satish Reddy Chairman, DIN: 00129701
per S Balasubrahmanyam
G V Prasad Co-Chairman & Managing Director, DIN: 00057433
Partner
Erez Israeli Chief Executive Officer
Membership Number: 53315
Parag Agarwal Chief Financial Officer
UDIN: 21053315AAAABK8303
Sandeep Poddar Company Secretary
Place: Chennai
Place: Hyderabad
Financial Statements

Date: 14 May 2021

Date: 14 May 2021
Annual Report 2020-21
107
Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

STATEMENT OF CASH FLOWS NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated)
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS

Cash Nows from��used in� operating activities

30,562 27,758 NOTE 1 | DESCRIPTION OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
Adjustments:
8,350 7,892 1.1 DESCRIPTION OF THE COMPANY
150 - Dr. Reddy’s Laboratories Limited (“Dr. Reddy’s” or “the Company”) is a leading India-based pharmaceutical company headquartered and
584 521 having its registered office in Hyderabad, Telangana, India. Through its three businesses - Pharmaceutical Services and Active Ingredients,
(821) Global Generics and Proprietary Products – the Company offers a portfolio of products and services, including Active Pharmaceutical
(510)
Ingredients (“APIs”), Custom Pharmaceutical Services (“CPS”), generics, biosimilars and differentiated formulations.
(443) (229)
(4,711) 135 The Company’s principal research and development facilities are located in the states of Telangana and Andhra Pradesh in India; its
principal manufacturing facilities are located in the states of Telangana, Andhra Pradesh and Himachal Pradesh in India; and its principal
(1,223) (856) markets are in India, Russia, the United States, the United Kingdom and Germany. The Company's shares trade on the Bombay Stock
467 478 Exchange, the National Stock Exchange, the NSE IFSC Limited in India and on the New York Stock Exchange in the United States.
69 95
- (397) 1.2BASIS OF PREPARATION OF FINANCIAL STATEMENTS
a) Statement of compliance
These financial statements as of and for the year ended 31 March 2021 comply in all material aspects with the Indian
7,137 (10,927)
Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015, and presentation
(5,827) (1,748)
requirements of Division II of Schedule III to the Companies Act, 2013, and as amended from time to time together with the
2,680 368 comparative period data as at and for the year ended 31 March 2020.
2,337 892
Cash generated from operations These financial statements have been prepared by the Company as a going concern on the basis of relevant Ind AS that are effective
39�622 23�161
or elected for early adoption at the Company’s annual reporting date, 31 March 2021. These financial statements were
(4,480) (4,769)
Net cash from operating activities authorised for issuance by the Company’s Board of Directors on 14 May 2021.
35,142 18,392
b) Basis of measurement
Cash Nows from��used in� investing activities These financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following
4900 58 material items in the balance sheet:
(8,575) (4,262) • derivative financial instruments are measured at fair value;
(2,364) (476) • financial assets are measured either at fair value or at amortised cost depending on the classification;
(69,520) (122,726) • employee defined benefit assets/(liabilities) are recognised as the net total of the fair value of plan assets, adjusted for
74,861 109,186 actuarial gains/(losses) and the present value of the defined benefit obligation;
- 343 • long-term borrowings are measured at amortised cost using the effective interest rate method;
(15,514) - • share-based payments are measured at fair value;
- 39 • assets held for sale are measured at fair value;
1,63 7 • assets acquired and liabilities assumed as part of business combinations are measured at fair value; and
2 588 • right-of-use the assets are recognised at the present value of lease payments that are not paid at that date. This amount is
�14,580� adjusted for any lease payments made at or before the commencement date, lease incentives received and initial direct costs,
�16,892�
incurred, if any.
Cash Nows from��used in� financing activities c) Functional and presentation currency
269 4 These financial statements are presented in Indian rupees, which is the functional currency of Dr. Reddy’s Laboratories Limited.
(1,193) (474) All financial information presented in Indian rupees has been rounded to the nearest million.
) 1,527 4,630 d) Use of estimates and judgements
) (3,743) (1,805) The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions
Payment of principal portion of lease liabilities (Refer note 2.9 (d)) (38) (155) that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may

differ from these estimates.

(4,147) (3,914)
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
(618) (527) period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of
Net cash used in financing activities �7,943� �2,241� estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following notes:
Net increase / (decrease) in cash and cash equivalents 12,619 (741) • Note 1.2 (c) — Assessment of functional currency;
44 - • Note 1.3 (c) — Financial instruments;
391 1,132 • Note 1.3 (d) — Business combinations;
13,054 391 • Notes 1.3 (e) and 1.3 (f) — Useful lives of property, plant and equipment and intangible assets;
*Rounded off to millions�
• Notes 1.3(g) — Determinationof cost for right-of-use assets and lease term;
The accompanying notes are an integral part of the financial statements.
• Note 1.3 (h) — Valuation of inventories;
As per our report of even date attached 108 Date: 14 May 2021 for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited • N
for S.R. Batliboi & Associates LLP o
Chartered Accountants t
ICAI Firm Registration Number: 101049W/E300004 K Satish Reddy Chairman, DIN: 00129701 e
per S Balasubrahmanyam G V Prasad Co-Chairman & Managing Director, DIN: 00057433
Partner Erez Israeli Chief Executive Officer Parag Agarwal Chief Financial Officer Sandeep Poddar
1
Membership Number: 53315 Company Secretary
UDIN: 21053315AAAABK8303 .
Place: Hyderabad Date: 14 May 2021 3
Place: Chennai
 (i) — Measurement of recoverable amounts of
cash-generating units;
• Note 1.3 (j) — Assets and obligations relating to
employee benefits;
• Note 1.3 (j) — Share-based payments;
• Note 1.3 (k) — Provisions and other accruals;
• Note 1.3 (l) —Measurement of transaction price in a
revenue transaction (sales returns, rebates and
chargeback provisions);
109
• Note 1.3 (n) — Evaluation of recoverability of
deferred tax assets, and estimation of income tax
payable and income tax expense in relation to an
uncertain tax position; and
• Note 1.3 (k) — Contingencies
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

e) Current and non-current classification Amendments to Ind AS 109 and Ind AS 107: Interest Rate Benchmark Reform
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria The amendments to Ind AS 109 "Financial Instruments" provide a number of reliefs, which apply to all hedging relationships that
set out in the Schedule III to the Companies Act, 2013 and Ind AS 1, Presentation of Financial Statements. are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty
about the timing and/or amount of benchmark-based cash Nows of the hedged item or the hedging instrument.
Assets:
An asset is classified as current when it satisfies any of the following
criteria:
• it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;
• it is held primarily for the purpose of being traded;
• it is expected to be realised within twelve months after the reporting date; or
• it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting date.
Liabilities:
A liability is classified as current when it satisfies any of the following
criteria:
• it is expected to be settled in the Company’s normal operating cycle;
• it is held primarily for the purpose of being traded;
• it is due to be settled within twelve months after the reporting date; or
• the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting
date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do
not affect its classification.
Current assets and liabilities include the current portion of non-current assets and liabilities respectively. All other assets and liabilities
are classified as non-current. Deferred tax assets and liabilities are always classified as non-current.
f) Prior period
Prior period amounts have been reclassified to conform to the current year classification.

1.3 SIGNIFICANT ACCOUNTING POLICIES

a) New Standards adopted by the Company
On 24 July 2020, the Ministry of Corporate Affairs (MCA) has issued amendments to certain Ind AS as summarised below:
Amendments to Ind AS 1 and Ind AS 8: Definition of Material
The amendments provided a new definition to the word material as follows:
‘Information is material if omitting, misstating or obscuring it could reasonably be expected to inNuence decisions that the primary
users of general-purpose financial statements make on the basis of those financial statements, which provide financial information
about a specific reporting entity.’
The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination
with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be
expected to inNuence decisions made by the primary users.
An information is considered to be obscured if it is communicated in a way that would have a similar effect for primary users of
financial statements to omitting or misstating that information. The amendments provided examples of circumstances that may
result in information being obscured.
An entity should apply the amendments prospectively for annual periods beginning on or after 1 April 2020.
The amendments to the definition of material had no impact on the financial statements of the Company.
Amendments to Ind AS 103: Definition of a Business
The amendments clarified the definition of a business for the purpose of identifying a business combination under Ind AS 103. As per
the
revised definition, business is ‘an integrated set of activities and assets that is capable of being conducted and managed for the
purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or generating other
income from ordinary activities’.
A related amendment has been made to the definition of ‘output’ as an element of business.
The amendments include an election to use a ‘concentration test’. This is a simplified assessment that would cause an
acquisition to qualify as an asset acquisition. The concentration test is met if substantially all of the fair value of the gross assets
acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.
An entity is required to apply the amendments to business combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after the 1 April 2020 and to asset acquisitions that occur on or after the beginning of
that period.
This amendment had no impact on the financial statements of the Company but may impact future periods should the Company enter
into any business combinations.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
The amendments to Ind AS 107 "Financial Instruments: Disclosures" prescribe the disclosures which entities are required to make for
hedging relationships to which the reliefs as per the amendments in Ind AS 109 are applied.
These amendments are applicable for annual periods beginning on or after the 1 April 2020. These
amendments had no impact on the financial statements of the Company as it does not have any interest rate hedge relationships.
Amendments Ind AS 116: COVID-19 related rent concessions
Ind AS 116 has been amended to provide limited relief to lessees in respect of rent concessions arising due to COVID-19 pandemic. No relief
has been allowed to the lessors.
The amendments provide a practical expedient that lessees may elect to not treat any rent concessions, provided by lessors as a direct
consequence of COVID-19 pandemic, as lease modifications. However, to be eligible for this relief:

• the revised consideration for the lease should be less than or equal to the lease consideration immediately before the change, the rent
concession should be for a period that does not extend beyond 30 June 2021 (for example, lease rents are reduced for a period upto
30 June 2021 and increased for periods thereafter); and
• there should be no substantial modification to the other terms and conditions of the lease.
Lessee should apply the amendments for annual reporting periods beginning on or after 1 April 2020. In case a lessee has not yet
approved the financial statements for issue before the issuance of the amendments, then the same may be applied for annual reporting
periods beginning on or after the 1 April 2019.
The aforesaid amendments had no impact on the financial statements of the Company.
For the year ended 31 March, 2020
Ind AS 116, “Leases”
On 30 March 2019, the Ministry of Corporate Affairs (MCA) notified Ind AS 116, Leases as part of the Companies (Indian Accounting
Standards (Ind AS)) Amendment Rules, 2019. Ind AS 116 replaces existing standard on leases i.e. Ind AS 17, Leases with effect from
accounting periods beginning on or after 1 April 2019.
The new standard brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and
finance leases. Lessor accounting, however, remains largely unchanged and the distinction between operating and finance leases is
retained.
Impact of the implementation of Ind AS 116 on the Company: The
Company adopted Ind AS 116 effective as of 01 April 2019. Ind AS 116, “Leases” changed the financial statements of the Company as the
majority of leases for which the Company is the lessee became on-balance sheet liabilities with corresponding right-of-use assets also
recognised on the Balance sheet. The lease liability reNects the net present value of the remaining lease payments adjusted for payments
made before the commencement date, lease incentives and other items related to the lease agreement, and the right-of-use asset
corresponds to the lease liability.
Upon adoption of the new standard, a portion of the annual operating lease costs, which was previously fully recognised as a rental / lease
expense, is recorded as interest expense. In addition, the portion of the lease payments which represents the reduction of the lease
liability is recognised in the statement of cash Nows as an outNow from financing activities, which was previously fully recognised as an
outNow from operating activities.
The Company implemented the new standard on 1 April 2019, and applied the modified retrospective method, with right-of-use assets
measured at an amount equal to the lease liability, adjusted by the amount of the prepaid or accrued lease payments relating to those
leases recognised in the balance sheet immediately before the date of initial application and will not restate prior years.
The Company elected to use the transition practical expedient that allows the standard to be applied only to contracts previously
identified under Ind AS 17, “Leases” and the contracts assessed using the guidance available under Appendix – C to Ind AS 17,
“Determining Whether an Arrangement Contains a Lease”.
The Company also elected to use the recognition exemption for lease contracts that, at the commencement date, have a lease term of 12
months or less and do not contain a purchase option (“short-term leases”) and lease contracts for which the underlying asset is of low
value (“low value assets”).
On 1 April 2019, the Company recognised lease liabilities of ₹ 332 (presented as part of borrowings) and right-of-use assets of ₹ 332
(presented as part of Property, plant and equipment).
Consequently, the Company has recognised an amount of ₹ 173 in depreciation expense and ₹ 60 in finance costs for the year ended
31 March 2020.
Adoption of the new standard had no impact upon leases for which the Company is a lessor.
Appendix C to Ind AS 12, “Uncertainty over Income Tax Treatments” On
30 March 2019, the Ministry of Corporate Affairs (MCA) made certain amendments to Ind AS 12, Income taxes by including Appendix C,
Uncertainty over Income Tax Treatments. This appendix clarifies how the recognition and measurement requirements of Ind AS 12 are
applied where there is uncertainty over income tax treatments. It does not apply to taxes or levies outside the scope of Ind AS 12, nor
does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

Appendix C explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.
over a tax treatment. An uncertain tax treatment is any tax treatment applied by an entity where there is uncertainty over whether that
treatment will be accepted by the applicable tax authority. For example, a decision to claim a deduction for a specific expense or not to
include a specific item of income in a tax return is an uncertain tax treatment if its acceptability is uncertain under applicable
tax law. The interpretation provides specific guidance in several areas where previously Ind AS 12 was silent. Appendix C applies to all
aspects of income tax accounting where there is an uncertainty regarding the treatment of an item, including taxable profit or loss, the
tax bases of assets and liabilities, tax losses and credits and tax rates.
The Company applied the interpretation effective 1 April 2019 using the modified retrospective approach. The adoption of Appendix C
did not have any material impact on the financial statements of the Company.
b) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of entities within the Company at exchange
rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured based on historical
cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at
fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at
which they were translated on initial recognition during the period or in previous financial statements are recognised in the statement of
profit and loss in the period in which they arise.
However, foreign currency differences arising from the translation of the following items are recognised in other comprehensive income
(“OCI”):
• certain debt instruments classified as measured at FVTOCI;
• certain equity instruments where the Company had made an irrevocable election to present in OCI subsequent changes in the
fair value;
• a financial liability designated as a hedge of the net investment in a foreign operation, to the extent that the hedge is effective; and
• qualifying cash Now hedges, to the extent that the hedges are effective.
When several exchange rates are available, the rate used is that at which the future cash Nows represented by the transaction or
balance could have been settled if those cash Nows had occurred at the measurement date.
c) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or
loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation or convention in the market place (e.g., regular way trades) are
recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing
components, in which case they are recognised at fair value. The Company’s trade receivables do not contain any significant financing
component and hence are measured at the transaction price measured under Ind AS 115 "Revenue from Contracts with Customers".
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments at amortised cost;
• Debt instruments at FVTOCI;
• Debt instruments, derivatives and equity instruments at FVTPL; and
• Equity instruments measured at fair value through FVTOCI.

Debt instruments at amortised cost

A "debt instrument" is measured at the amortised cost if both the following conditions are met:
• the asset is held within a business model whose objective is to hold assets for collecting contractual cash Nows; and
• contractual terms of the asset give rise on specified dates to cash Nows that are solely payments of principal and interest ("SPPI")
on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method
and are subject to impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the effective interest rate.
Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in statement of profit and loss and presented in other gains�(losses). The losses arising

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Debt instrument at FVTOCI
A "debt instrument" is classified as at the FVTOCI if both of the following criteria are met:
a) the objective of the business model is achieved both by collecting contractual cash Nows and selling the financial assets� and
b) the asset’s contractual cash Nows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair
value movements are recognised in the OCI. However, the Company recognises interest income, impairment losses and reversals and
foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously
recognised in OCI is reclassified to the statement of profit and loss. Interest earned while holding a FVTOCI debt instrument is
reported as interest income using the effective interest rate method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at
amortised cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria,
as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency
(referred to as an "accounting mismatch").
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit
and loss. Equity investments
All equity investments within the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and
contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL.
For all other equity instruments, the Company may make an irrevocable election to present in OCI subsequent changes in the
fair value. The Company makes such election on an instrument by-instrument basis. The classification is made upon initial
recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding
dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the statement of profit and loss, even on sale
of investment. However, on sale the Company may transfer the cumulative gain or loss within equity. Equity investments designated
as FVTOCI are not subject to impairment assessment.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit
and loss.
Investments in subsidiaries and joint venture:
Investments in subsidiaries and joint venture are carried at cost less accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal proceeds and
the carrying amounts are recognised in the statement of profit and loss.
Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries and joint ventures at the
Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1 April 2015.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e. removed from the Company’s balance sheet) when:
• the rights to receive cash Nows from the asset have expired� or

• Both (1) the Company has transferred its rights to receive cash Nows from the asset or has assumed an obligation to pay the
received cash Nows in full without material delay to a third party under a "pass-through" arrangement� and (2) either (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash Nows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred
nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to
recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that reNects the rights and obligations
that the Company has retained.
Impairment of trade receivables and other financial assets
In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement and recognition of
impairment loss on trade receivables or any contractual right to receive cash or another financial asset.
For this purpose, the Company follows a "simplified approach" for recognition of impairment loss allowance on the trade
receivable balances. The application of this simplified approach does not require the Company to track changes in credit risk. Rather,
it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade
receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and
is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes
in the forward-looking estimates are analysed.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

Financial liabilities
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then
Initial recognition and measurement
hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in OCI, remains there until the
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives
forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in OCI is recognised
designated as hedging instruments in an effective hedge, as appropriate.
immediately in the statement of profit and loss.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
Hedges of recognised assets and liabilities
attributable transaction costs.
Changes in the fair value of derivative contracts that economically hedge monetary assets and liabilities in foreign currencies, and
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and for which no hedge accounting is applied, are recognised in the statement of profit and loss. The changes in fair value of such
derivative financial instruments. derivative contracts, as well as the foreign exchange gains and losses relating to the monetary items, are recognised in the statement
of profit and loss. If the hedged item is derecognised, the unamortised fair value is recognised immediately in the statement of profit
Subsequent measurement and loss.
The measurement of financial liabilities depends on their classification, as described below�
Hedges of changes in the interest rates
Financial liabilities at FVTPL Consistent with its risk management policy, the Company uses interest rate swaps to mitigate the risk of changes in interest
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition rates. The Company does not use them for trading or speculative purposes.
as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging Cash and cash equivalents
instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily
unless they are designated as effective hedging instruments. convertible into known amounts of cash and which are subject to insignificant risk of changes in value. For this purpose, �short-
term� means investments having original maturities of three months or less from the date of investment. Bank overdrafts that are
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss. repayable on demand form an integral part of the Company’s cash management and are included as a component of cash and cash
Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of recognition, and only if the equivalents for the purpose of the statement of cash Nows.
criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains or losses attributable to changes in own credit d) Business combinations
risk are recognised in OCI. These gains or losses are not subsequently transferred to the statement of profit and loss. However, the The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments or other
Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the assets are acquired. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining
statement of profit and loss. The Company has not designated any financial liability as FVTPL. the acquisition date and determining whether control is transferred from one party to another. Control exists when the Company
Loans and borrowings is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised power over the entity. In assessing control, potential voting rights are considered only if the rights are substantive.
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of The Company determines that it has acquired a business when the acquired set of activities and assets include an input and a
profit and loss over the period of the borrowings using the effective interest method. substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest if it is critical to the ability to continue producing outputs, and the inputs acquired include an organized workforce with the necessary
rate method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is
considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
the effective interest rate amortisation process.
The consideration transferred for the acquisition of a subsidiary comprises the:
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of
the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit and loss. • fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired business;
Derecognition
• equity interests issued by the Company;
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
• fair value of any asset or liability resulting from a contingent consideration arrangement; and
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a • fair value of any pre-existing equity interest in the subsidiary.
new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Company recognizes any non-controlling interest in the
Derivative financial instruments
acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the
The Company is exposed to exchange rate risk which arises from its foreign exchange revenues and expenses, primarily in US dollars,
acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred.
UK pounds sterling, Russian roubles Brazilian reals, South African rands (“ZAR”), Romanian new leus (“RON”) and Euros, and
foreign currency debt in US dollars, Russian roubles, Ukrainian hryvnias and Euros. The excess of the sum of:
The Company uses derivative financial instruments such as foreign exchange forward contracts, option contracts and swap contracts to • the consideration transferred

mitigate its risk of changes in foreign currency exchange rates. The Company also uses non-derivative financial instruments as part of • the amount of any non-controlling interest in the acquired entity; and
its foreign currency exposure risk mitigation strategy. Derivatives are classified as financial assets when the fair value is positive • the acquisition-date fair value of any previous equity interest in the acquired entity.
and as financial liabilities when the fair value is negative. over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net
Hedges of highly probable forecasted transactions identifiable assets of the business acquired, the difference is recognized directly in the statement of profit and loss as a bargain purchase.
The Company classifies its derivative financial instruments that hedge foreign currency risk associated with highly probable forecasted Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value
transactions as cash Now hedges and measures them at fair value. The effective portion of such cash Now hedges is recorded in as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
the Company’s hedging reserve as a component of equity and re-classified to the statement of profit and loss as part of the hedged borrowing could be obtained from an independent financier under comparable terms and conditions.
item in the period corresponding to the occurrence of the forecasted transactions. The ineffective portion of such cash Now hedges is
recorded in the statement of profit and loss as finance costs immediately. Contingent consideration is classified either as equity or a financial liability. Contingent consideration classified as equity is not re-
measured and its subsequent settlement is accounted for within equity. Amounts classified as a financial liability are subsequently re-
The Company also designates certain non-derivative financial liabilities, such as foreign currency borrowings from banks, as measured to fair value, with changes in fair value recognized in the statement of profit and loss. If the business combination is achieved
hedging instruments for hedge of foreign currency risk associated with highly probable forecasted transactions. Accordingly, the in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value
Company applies cash Now hedge accounting to such relationships. Remeasurement gain or loss on such non-derivative financial at the acquisition date. Any gains or losses arising from such re-measurement are recognized in the statement of profit and loss.
liabilities is recorded in the Company’s hedging reserve as a component of equity and reclassified to the statement of profit and loss as
part of the hedged item in the period corresponding to the occurrence of the forecasted transactions. e) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the
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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
cost of materials and other costs directly attributable to bringing the asset to a working condition for its intended use.
Borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalised as part of
the cost of that asset.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items Research and development Expenditures on research activities undertaken with the prospect of gaining new scientific or
(major components) of property, plant and equipment. technical knowledge and understanding are recognised in the statement of profit and loss when
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal incurred.
with the carrying amount of property, plant and equipment and are recognised net within “Other income/ Selling and other expense, Development activities involve a plan or design for the production of new or substantially
net” in the statement of profit and loss. improved products and processes. Development expenditures are capitalised only if
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable • development costs can be measured reliably;
that the future economic benefits embodied within the part will Now to the Company and its cost can be measured reliably. The costs of • the product or process is technically and commercially feasible;
repairs and maintenance are recognised in the statement of profit and loss as incurred. • future economic benefits are probable and

Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair value, unless • the Company intends to, and has sufficient resources to complete development and to use
the exchange transaction lacks commercial substance or the fair value of either the asset received or asset given up is not reliably or sell the asset.
measurable, in which case the asset exchanged is recorded at the carrying amount of the asset given up. The expenditures to be capitalised include the cost of materials and other costs directly
Depreciation attributable to preparing the asset for its intended use. Other development expenditures
Depreciation is recognised in the statement of profit and loss on a straight line basis over the estimated useful lives of property, plant are recognised in the statement of profit and loss as incurred. As of 31 March 2021, none
and equipment. Land is not depreciated but subject to impairment. of the development expenditure amounts has met the aforesaid recognition criteria.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and any changes are considered Separate acquisition of intangible Payments to third parties that generally take the form of up-front payments and milestones
prospectively. The estimated useful lives are as follows: assets for in-licensed products, compounds and intellectual property are capitalised. The
Company’s criteria for capitalisation of such assets are consistent with the guidance given in
PARTICULARS YEARS paragraph 25 of Indian Accounting Standard 38 (“Ind AS 38”) (i.e., the receipt of economic
Buildings benefits embodied in each intangible asset separately purchased or licensed in the transaction
is considered to be probable).
-Factory and administrative buildings 20 to In-Process Research and Development Acquired research and development intangible assets that are under development are
-Ancillary structures 30 3 assets (“IPR&D”) or Intangible assets recognised as In-Process Research and Development assets (“IPR&D”) or Intangible
to 10 assets
Plant and equipment 5 to 10 under development under development. IPR&D assets are not amortised, but evaluated for potential impairment on
Furniture, fixtures and office equipment 3 to an annual basis or when there are indications that the carrying value may not be recoverable.
Vehicles Any impairment charge on such IPR&D assets is recorded in the statement of profit and
84
loss under "Impairment of non-current assets".
to 5

Subsequent expenditure
Schedule II to the Companies Act, 2013 (“Schedule”) prescribes the useful lives for various classes of tangible assets. For certain class
of assets, based on the technical evaluation and assessment, the Company believes that the useful lives adopted by it best represent Other intangible assets Subsequent expenditures are capitalised only when they increase the future economic benefits
the period over which an asset is expected to be available for use. Accordingly, for these assets, the useful lives estimated by the embodied in the specific asset to which they relate. All other expenditures, including
Company are different from those prescribed in the Schedule. expenditures on internally generated goodwill and brands, is recognised in the statement
of profit and loss as incurred.
Software for internal use, which is primarily acquired from third-party vendors and which is an integral part of a tangible asset, including
consultancy charges for implementing the software, is capitalised as part of the related tangible asset. Subsequent costs associated with In-Process Research and Development Subsequent expenditure on an IPR&D project acquired separately or in a business combination
maintaining such software are recognised as expense as incurred. The capitalised costs are amortised over the estimated useful life of assets (“IPR&D”) or Intangible assets and recognised as an intangible asset is:
the
software or the remaining useful life of the tangible fixed asset, whichever is lower. under development • recognised as an expense when incurred, if it is a research expenditure;
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, • recognised as an expense when incurred, if it is a development expenditure that does not
plant and equipment not ready to use before such date are disclosed under other non-current assets. Assets not ready for use are satisfy the criteria for recognition as an intangible asset in paragraph 57 of Ind AS 38; and
not depreciated but are tested for impairment. • added to the carrying amount of the acquired in-process research or development project,
if it is a development expenditure that satisfies the recognition criteria in paragraph 57
f) Goodwill and other intangible assets
of Ind AS 38.
Recognition and measurement
Amortisation
Goodwill Goodwill represents the excess of consideration transferred, together with the amount of Amortisation is recognised in the statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets.
non-controlling interest in the acquiree, over the fair value of the Company’s share of The amortisation expense is recognised in the statement of profit and loss account in the expense category that is consistent with the
identifiable net assets acquired. function of the intangible asset. Intangible assets that are not available for use are amortised from the date they are available for use.
Goodwill is measured at cost less accumulated impairment losses. In respect of equity The estimated useful lives are as follows:
accounted investees, the carrying amount of goodwill is included in the carrying amount of
the investment, and any impairment loss on such an investment is not allocated to any PARTICULARS YEARS
asset,
including goodwill, that forms part of the carrying value of the equity accounted investee. Product related intangibles 3 to 15
Other intangibles 3 to 5
Other intangible assets Other intangible assets that are acquired by the Company and that have finite useful lives are
measured at cost less accumulated amortisation and accumulated impairment losses. The cost
of intangible assets acquired in a business combination is their fair value at the date of The amortisation period and the amortisation method for intangible assets with a finite useful life are reviewed at each reporting date.
acquisition. Changes in the expected useful lives or expected pattern of consumption of future economic benefits embodied in the assets are
considered to modify the amortization period or method, as appropriate and are treated as change in accounting estimate.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Goodwill, intangible assets relating to products in development, other intangible assets not available for use and
intangible assets having indefinite useful life are subject to impairment testing at each reporting date. All other
intangible assets are tested for impairment when there are indications that the carrying value may not be
recoverable. All impairment losses are recognised immediately in the statement of profit and loss under
"Impairment of non-current assets".

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

De-recognition of intangible assets rate that reNects current market assessments of the time value of money and the risks specific to the asset or the cash-generating unit. For
Intangible assets are de-recognised either on their disposal or where no future economic benefits are expected from their use. the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate cash inNows from continuing
Losses arising on such de-recognition are recorded in the statement of profit and loss, and are measured as the difference between the use that are largely independent of the cash inNows of other assets or groups of assets (the �cash-generating unit�).
net disposal proceeds, if any, and the carrying amount of respective intangible assets as at the date of de-recognition.
g) Leases
As explained in note 1.3(a) above, the Company has changed its accounting policy for leases where the Company is the lessee. The
new policy is described below. Refer note 1.3(a) for the impact of the change in accounting policy.
The Company assesses at contract inception whether a contract is or contains a lease, which applies if the contract conveys the right to
control the use of the identified asset for a period of time in exchange for consideration. The Company recognises a right-of-use asset
at the commencement date of the lease, i.e. the date the underlying asset is available for use. Assets and liabilities arising from a lease
are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments to be
made over the lease term:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
• amounts expected to be payable by the Company under residual value guarantees
• the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reNects the Company exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases in the Company, then the lessee’s incremental borrowing rate is used. Such borrowing rate is calculated as
the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-
use asset in a similar economic environment with similar terms, security and conditions. The Company’s lease liabilities are included in
borrowings.
Lease payments are allocated between principal and interest cost. The interest cost is charged to statement of profit and loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost less accumulated depreciation and accumulated impairment comprised of the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs, and
• restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-
line basis as an expense in the the statement of profit and loss.. Short-term leases are leases with a lease term of 12 months or less.
Low-value assets comprise IT equipment and small items of office furniture.
The right-of-use assets are initially recognised on the balance sheet at cost, which is calculated as the amount of the initial
measurement of the corresponding lease liability, adjusted for any lease payments made at or prior to the commencement date of the
lease, any lease incentive received and any initial direct costs incurred by the Company.
h) Inventories
Inventories consist of raw materials, stores and spares, work-in-progress and finished goods and are measured at the lower of cost and
net realisable value. The cost of all categories of inventories is based on the weighted average method. Cost includes expenditures
incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location
and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads based on normal
operating capacity. Stores and spares consists of packing materials, engineering spares (such as machinery spare parts) and
consumables (such as lubricants, cotton waste and oils), which are used in operating machines or consumed as indirect materials in the
manufacturing process.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
The factors that the Company considers in determining the provision for slow moving, obsolete and other non-saleable inventory include
estimated shelf life, planned product discontinuances, price changes, ageing of inventory and introduction of competitive new products,
to the extent each of these factors impact the Company’s business and markets. The Company considers all these factors and adjusts
the inventory provision to reNect its actual experience on a periodic basis.
i) Impairment
Non�financial assets
The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, an
impairment test is performed each year at 31 March.
The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less
costs to sell. In assessing value in use, the estimated future cash Nows are discounted to their present value using a pre-tax discount

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash-generating units that
are expected to benefit from the synergies of the combination.
An impairment loss is recognised in the statement of profit and loss if the estimated recoverable amount of an asset or its cash-
generating unit is lower than its carrying amount. Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other
assets in the unit on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill that forms
part of the carrying amount of an investment in joint venture is not recognised separately, and therefore is not tested for
impairment separately. Instead, the entire amount of the investment in joint venture is tested for impairment as a single asset
when there is objective evidence that the investment in joint venture may be impaired.
j) Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to
be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Defined contribution
plans The Company’s contributions to defined contribution plans are charged to the statement of profit and loss as and when the
services are received from the employees.
Defined benefit plans
The liability in respect of defined benefit plans and other post-employment benefits is calculated using the projected unit credit
method consistent with the advice of qualified actuaries. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outNows using interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related defined
benefit obligation. In countries where there is no deep market in such bonds, the market interest rates on government bonds are
used. The current service cost of the defined benefit plan, recognised in the statement of profit and loss in employee benefit
expense, reNects the increase in the defined benefit obligation resulting from employee service in the current year, benefit
changes, curtailments and settlements. Past service costs are recognised immediately in the statement of profit and loss.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair
value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Actuarial gains and
losses arising from experience adjustments and changes in actuarial assumptions for defined benefit obligation and plan assets are
recognized in OCI in the period in which they arise.
When the benefits under a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service
or the gain or loss on curtailment is recognised immediately in the statement of profit and loss. The Company recognises gains or
losses on the settlement of a defined benefit plan obligation when the settlement occurs.
Termination benefits
Termination benefits are recognised as an expense in the statement of profit and loss when the Company is demonstrably
committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are recognised as an expense in the statement of profit and loss if the Company
has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of
acceptances can be estimated reliably.
Other long-term employee benefits
The Company’s net obligation in respect of other long-term employee benefits is the amount of future benefit that employees have
earned in return for their service in the current and previous periods. That benefit is discounted to determine its present value. Re-
measurements are recognised in the statement of profit and loss in the period in which they arise.
Compensated
absences The Company’s current policies permit certain categories of its employees to accumulate and carry forward a portion of
their unutilised compensated absences and utilise them in future periods or receive cash in lieu thereof in accordance with the
terms of such policies. The Company measures the expected cost of accumulating compensated absences as the additional
amount that the Company incurs as a result of the unused entitlement that has accumulated at the reporting date. Such
measurement is based on actuarial valuation as at the reporting date carried out by a qualified actuary.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

Equity settled share-based payment transactions

Presented below are the points of recognition of revenue with respect to the Company’s sale of goods:
The grant date fair value of options granted to employees is recognised as an employee benefit expense, , in the statement of profit
and loss, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the PARTICULARS POINT OF RECOGNITION OF REVENUE
options. The amount recognised as an expense is adjusted to reNect the number of awards for which the related service and Sales of generic products in India Upon delivery of products to distributors by clearing and forwarding agents of the
performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that Company. Control over the generic products is transferred by the Company when the
meet the related service and performance conditions at the vesting date. The expense is recorded for each separately vesting portion of goods are delivered to distributors from clearing and forwarding agents.
the award as if the
award was, in substance, multiple awards. The increase in equity recognised in connection with share-based payment transaction Sales of active pharmaceutical Upon delivery of products to customers (generally formulation manufacturers), from the
is presented as a separate component in equity under “share-based payment reserve”. The amount recognised as an expense is ingredients and intermediates in India factories of the Company.
adjusted to reNect the actual number of stock options that vest.
Export sales and other sales Upon delivery of the products to the customers unless the terms of the applicable
Cash settled share-based payment transactions outside of India contract provide for specific revenue generating activities to be completed, in which
The fair value of the amount payable to employees in respect of share-based payment transactions which are settled in cash is case revenue is recognised once all such activities are completed.
recognised as an expense, with a corresponding increase in liabilities, over the period during which the employees become
unconditionally entitled to payment. The liability is re-measured at each reporting date and at the settlement date based on the fair Profit share revenues
value of the share-based payment
transaction. Any changes in the liability are recognised in the statement of profit and loss. The Company from time to time enters into marketing arrangements with certain business partners for the sale of its products in certain
markets. Under such arrangements, the Company sells its products to the business partners at a non-refundable base purchase price
k) Provisions agreed upon in the arrangement and is also entitled to a profit share which is over and above the base purchase price. The profit share
A provision is recognised in the statement of profit and loss if, as a result of a past event, the Company has a present legal or is typically dependent on the business partner’s ultimate net sale proceeds or net profits, subject to any reductions or adjustments that
constructive obligation that can be estimated reliably, and it is probable that an outNow of economic benefits will be required to settle are required by the terms of the arrangement. Such arrangements typically require the business partner to provide confirmation of units
the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash sold and net sales or net profit computations for the products covered under the arrangement.
Nows at a pre-tax rate that reNects current market assessments of the time value of money and the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Revenue in an amount equal to the base sale price is recognised in these transactions upon delivery of products to the business
partners. An additional amount representing the profit share component is recognised as revenue only to the extent that it is highly
Restructuring probable that a significant reversal will not occur.
A provision for restructuring is recognised in the statement of profit and loss when the Company has approved a detailed and
formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating costs are not At the end of each reporting period, the Company updates the estimated transaction price (including updating its assessment of
provided. whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the
reporting period and the changes in circumstances during the reporting period.
Onerous contracts
A provision for onerous contracts is recognised in the statement of profit and loss when the expected benefits to be derived by Out licensing arrangements, milestone payments and royalties
the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is Revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial up-front
measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing payment on inception of the license and subsequent payments dependent on achieving certain milestones in accordance with the terms
with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that prescribed in the agreement. In cases where the transaction has two or more components, the Company accounts for the delivered
contract. item (for example, the transfer of title to the intangible asset) as a separate unit of accounting and records revenue upon delivery
of that component, provided that the Company can make a reasonable estimate of the fair value of the undelivered component.
Reimbursement rights Otherwise, non-refundable up-front license fees received in connection with product out-licensing agreements are deferred and
Expected reimbursements for expenditures required to settle a provision are recognised in the statement of profit and loss only when recognised over the balance period in which the Company has pending performance obligations. Milestone payments which are
receipt of such reimbursements is virtually certain. Such reimbursements are recognised as a separate asset in the balance sheet, with a contingent on achieving certain clinical milestones are recognised as revenues either on achievement of such milestones, over the
corresponding credit to the specific expense for which the provision has been made. performance period depending on the terms of the contract. If milestone payments are creditable against future royalty payments,
Contingent liabilities and contingent assets the milestones are deferred and released over the period in which the royalties are anticipated to be paid.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, Royalty income earned through a license is recognised when the underlying sales have occurred
require an outNow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outNow
of resources is remote, no provision or disclosure is made. Provision for chargeback, rebates and discounts
Provisions for chargeback, rebates, discounts and Medicaid payments are estimated and provided for in the year of sales and recorded
Contingent assets are not recognised in the financial statements. A contingent asset is disclosed where an inNow of economic benefits is as reduction of revenue. A chargeback claim is a claim made by the wholesaler for the difference between the price at which the
probable. Contingent assets are assessed continually and, if it is virtually certain that an inNow of economic benefits will arise, the asset product is initially invoiced to the wholesaler and the net price at which it is agreed to be procured from the Company.
and related income are recognised in the period in which the change occurs. Provisions for such chargebacks are accrued and estimated based on historical average chargeback rate actually claimed over a
l) Revenue The period of time, current contract prices with wholesalers/other customers and estimated inventory holding by the wholesaler.
Company’s revenue is derived from sales of goods, service income and income from licensing arrangements. Most of such revenue is Shelf stock adjustments
generated from the sale of goods. The Company has generally concluded that it is the principal in its revenue arrangements. Shelf stock adjustments are credits issued to customers to reNect decreases in the selling price of products sold by the Company, and
Sale of goods are accrued when the prices of certain products decline as a result of increased competition or otherwise. These credits are customary
Revenue is recognised when the control of the goods has been transferred to a third party. This is usually when the title passes to the in the pharmaceutical industry, and are intended to reduce the customer inventory cost to better reNect the current market
customer, either upon shipment or upon receipt of goods by the customer. At that point, the customer has full discretion over the prices. The determination to grant a shelf stock adjustment to a customer is based on the terms of the applicable contract, which may
channel and price to sell the products, and there are no unfulfilled obligations that could affect the customer’s acceptance of the or may not specifically limit the age of the stock on which a credit would be offered.
product. Refund Liability
Revenue from the sale of goods is measured at the transaction price which is the consideration received or receivable, net of returns, The Company accounts for sales returns accrual by recording refund liability concurrent with the recognition of revenue at the time of a
taxes and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the customer. product sale. This liability is based on the Company's estimate of expected sales returns. The Company deals in various products
and operates in various markets. Accordingly, the estimate of sales returns is determined primarily by the Company's historical
In arriving at the transaction price, the Company considers the terms of the contract with the customers and its customary experience in the markets in which the Company operates. With respect to established products, the Company considers its historical
business practices. The transaction price is the amount of consideration the Company is entitled to receive in exchange for transferring experience of actual sales returns, levels of inventory in the distribution channel, estimated shelf life, any revision in the shelf life of the
promised goods or services, excluding amounts collected on behalf of third parties. The amount of consideration varies because of product, product discontinuances, price changes of competitive products, and the introduction of competitive new products, to the
estimated rebates, returns and chargebacks, which are considered to be key estimates. extent each of these factors impact the Company's business and markets. With respect to new products introduced by the
Any amount of variable consideration is recognised as revenue only to the extent that it is highly probable that a significant reversal will Company, such products have historically been either extensions of an existing line of product where the Company has historical
not occur. The Company estimates the amount of variable consideration using the expected value method. experience or in therapeutic categories where established products exist and are sold either by the Company or the Company's

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
competitors. At the time of recognising the refund liability the Company also recognises an asset, (i.e., the right to the returned
goods) which is included in inventories for the products expected to be returned. The Company initially measures this asset at the
former carrying amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the
value of the returned goods.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

Along with re-measuring the refund liability at the end of each reporting period, the Company updates the measurement of the
Accruals for uncertain tax positions require management to make judgements of potential exposures. Accruals for uncertain tax
asset recorded for any revisions to its expected level of returns, as well as any additional decreases in the value of the returned
positions are measured using either the most likely amount or the expected value amount depending on which method the entity
products.
expects to better predict the resolution of the uncertainty. Tax benefits are not recognised unless the tax positions will probably be
Services accepted by the tax authorities. This is based upon management’s interpretation of applicable laws and regulations and the expectation
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of profit and loss as of how the tax authority will resolve the matter. Once considered probable of not being accepted, management reviews each material
the underlying services are performed. Upfront non-refundable payments received under these arrangements are deferred and tax benefit and reNects the effect of the uncertainty in determining the related taxable amounts.
recognised as revenue over the expected period over which the related services are expected to be performed.
p) Earnings per share
License fees The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the
License fees primarily consist of income from the out-licensing of intellectual property, and other licensing and supply arrangements profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
with various parties. Revenue from license fees is recognised when control transfers to the third party and the Company’s during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
performance obligations are satisfied. Some of these arrangements include certain performance obligations by the Company. average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options
Revenue from such arrangements is recognised in the period in which the Company completes all its performance obligations. granted to employees.
m) Shipping and handling costs q) Government grants and incentives
Shipping and handling costs incurred to transport products to customers, and internal transfer costs incurred to transport the products The Company recognises government grants only when there is reasonable assurance that the conditions attached to them will
from the Company’s factories to its various points of sale, are included in selling, general and administrative expenses. be complied with, and the grants will be received. Government grants received in relation to assets are presented as a reduction
to the carrying amount of the related asset. Grants related to income are deducted in reporting the related expense in the statement of
n) Other income and finance cost profit and loss.
Other income consists of interest income on funds invested, dividend income and gains on the disposal of assets. Interest income
is recognised in the statement of profit and loss as it accrues, using the effective interest method. Dividend income is recognised Export entitlements from government authorities are recognised in the statement of profit and loss as a reduction from “Cost of
in the statement of profit and loss on the date that the Company’s right to receive payment is established. The associated cash materials consumed” when the right to receive credit as per the terms of the scheme is established in respect of the exports made by
Nows are classified as investing activities in the statement of cash Nows. Finance expenses consist of interest expense on loans and the Company, and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
borrowings. r) Treasury shares
Borrowing costs are recognised in the statement of profit and loss using the effective interest method. The associated cash Nows Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is
are classified as financing activities in the statement of cash Nows. recognised in statement of profit and loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
Any difference between the carrying amount and the consideration, if reissued, is recognised in the securities premium.
Foreign currency gains and losses are reported on a net basis within other income and / or selling and other expenses. These primarily
include: exchange differences arising on the settlement or translation of monetary items; changes in the fair value of derivative
s) Rounding of amounts
contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting is
All amounts in Indian Rupees disclosed in the financial statements and notes have been rounded off to the nearest million unless
applied; and the ineffective portion of cash Now hedges.
otherwise stated.
o) Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognised in the statement of profit and loss except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax 1.4 DETERMINATION OF FAIR VALUES
payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any The Company's accounting policies and disclosures require the determination of fair value, for certain financial and non-financialassets and
adjustment to tax payable in respect of previous years. liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable,
further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
following temporary differences: participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most
• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that
advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
affects neither accounting nor taxable profit;
• temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
will not reverse in the foreseeable future; and liability, assuming that market participants act in their economic best interest.
• taxable temporary differences arising upon the initial recognition of goodwill. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole�
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that • Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
it is no longer probable that the related deferred tax asset will be utilised. Unrecognised deferred tax assets are reassessed at each
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
reporting date and are recognised to the extent that it has become probable that the future taxable profits will allow the deferred tax
observable.
assets to be recovered.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
Any deferred tax asset or liability arising from deductible or taxable temporary differences in respect of unrealised inter-company profit
or loss on inventories held by the Company in different tax jurisdictions is recognised using the tax rate of the jurisdiction in For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether
which such inventories are held. Dividend distribution tax arising out of payment of dividends to shareholders under the Indian Income transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to
tax regulations is not considered as tax expense for the Company and all such taxes are recognised in the statement of changes in the fair value measurement as a whole) at the end of each reporting period.
equity as part of the associated dividend payment.
External valuers are involved for valuation of significant assets, such as assets acquired in a business combination and significant liabilities,
Current and deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to items recognised in OCI such as contingent consideration. Involvement of external valuers is determined by the Management, based on market knowledge,
or directly in equity. In this case, the tax is also recognised in OCI or directly in equity, respectively. reputation, independence and whether professional standards are maintained.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

a) Property, plant and equipment NOTE 2 | NOTES TO FINANCIAL STATEMENTS

Property, plant and equipment, if acquired in a business combination or through an exchange of non-monetary assets, is measured at
fair value on the acquisition date. For this purpose, fair value is based on appraised market values and replacement cost. 2.1 PROPERTY, PLANT AND EQUIPMENT
FURNITURE,
b) Intangible assets PLANT AND FIXTURES
PARTICULARS LAND BUILDINGS EQUIPMENT AND OFFICE VEHICLES TOTAL
The fair value of brands, technology related intangibles, and patents and trademarks acquired in a business combination is based on EQUIPMENT
the discounted estimated royalty payments that have been avoided as a result of these brands, technology related intangibles,
Gross carrying value
patents or trademarks being owned (the “relief of royalty method”). The fair value of customer related, product related and 1�670
Balance as at 1 April 2019 18�433 60�440 4�382 154 85�079
other intangibles acquired in a business combination has been determined using the multi-period excess earnings method. Under Recognition of right-of-use asset on initial
this method, value is estimated as the present value of the benefits anticipated from ownership of the intangible assets in excess of (3) 93 - 28 211 332
application of Ind AS 116
the returns required or the investment in the contributory assets necessary to realise those benefits. Adjusted balance as at 1 April 2019 1�670 18�526 60�440 4�410 365 85�411
Additions 4 889 3�570 387 142 4�992
c) Inventories The Disposals (47) (480) (210) (49) (786)
fair value of inventories acquired in a business combination is determined based on its estimated selling price in the ordinary course of Balance as at 31 March 2020 1�674 19�368 63�530 4�587 458 89�617
business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and Balance as at 1 April 2020 1�674 19�368 63�530 4�587 458 89�617
sell the inventories. Assets acquired through business
84 113 165 11 - 373
d) Investments in equity and debt securities and units of mutual funds combinations
Additions
(1)
13 418 3�762 252 185 4�630
(2)
The fair value of marketable equity and debt securities is determined by reference to their quoted market price at the reporting date. Disposals (9) (1�143) (132) (127) (1�411)
For debt securities where quoted market prices are not available, fair value is determined using pricing techniques such as discounted Balance as at 31 March 2021 1�771 19�890 66�314 4�718 516 93�209
cash Now analysis. Accumulated Depreciation
Balance as at 1 April 2019 4�835 37�143 3�492 105 45�575
In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units
Depreciation for the year - 852 5�617 457 143 7�069
in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the Disposals - (30) (452) (209) (34) (725)
price at which issuers will redeem such units from the investors. Balance as at 31 March 2020 - 5�657 42�308 3�740 214 51�919

Accordingly, such net asset values are analogous to fair market value with respect to these investments, as transactions of these Balance as at 1 April 2020 - 5�657 42�308 3�740 214 51�919
mutual funds are carried out at such prices between investors and the issuers of these units of mutual funds. Depreciation for the year - 901 5�214 430 143 6�688
(2)
Disposals - (1) (990) (117) (82) (1�190)
e) Derivatives Balance as at 31 March 2021 - 6�557 46�532 4�053 275 57�417
The fair value of foreign exchange forward contracts is estimated by discounting the difference between the contractual forward price
and
the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). The fair value Net carrying value
of foreign currency option and swap contracts and interest rate swap contracts is determined based on the appropriate valuation As at 31 March 2020 1�674 13�711 21�222 847 244 37�698
techniques, considering the terms of the contract. As at 31 March 2021 1�771 13�333 19�782 665 241 35�792

f) Non-derivative financial liabilities (1) Refer note 2.38 of these financial statements for further details
(2) During the year ended 31 March 2021, the Company sold contract development and manufacturing organisation (CDMO) division of the Custom Pharmaceutical Services (CPS) business
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash of the Company. This sale was done by way of slump sale (as defined under section 2(42C) of Indian Income Tax Act,1961) including all related property, plant and equipment, current
Nows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by assets, current liabilities, and transfer of employees.
reference to similar lease agreements. In respect of the Company’s borrowings that have Noating rates of interest, their fair value (3) Leases:
The Company has lease contracts for various items of plant and equipment, vehicles and other equipment used in its operations. Below are the carrying amounts of right-of-use assets
approximates carrying value. recognised and the movements during the year.
g) Share-based payment transactions FURNITURE, FIXTURES AND
The fair value of employee stock options is measured using the Black-Scholes-Merton valuation model. Measurement inputs include share price on PARTICULARS BUILDINGS
PLANT AND EQUIPMENT
OFFICE EQUIPMENT VEHICLES TOTAL
grant date, exercise price of the instrument, expected volatility (based on weighted average historical volatility), expected life of
the instrument (based on historical experience), expected dividends, and the risk free interest rate (based on government bonds). Gross carrying value
Balance as at 1 April 2019 - - - - -
h) Contingent consideration Recognition of right-of-use asset on initial application of Ind AS 116 93 - 28 211 332
The fair value of the contingent consideration arising out of business combination is estimated by applying the income approach. The Adjusted balance as at 1 April 2019 93 - 28 211 332
fair value measurement is based on significant inputs that are not observable in the market, which Ind AS 103, “Fair Value Additions 38 3 17 130 188
Measurement” refers to as Level 3 inputs. Disposals - - - (29) (29)
Balance as at 31 March 2020 131 3 45 312 491

Balance as at 1 April 2020 131 3 45 312 491

Additions 22 - 7 177 206
Disposals - - (1) (125) (126)
Balance as at 31 March 2021 153 3 51 364 571

Accumulated Depreciation
Balance as at 1 April 2019 - - - - -
Depreciation for the year 37 1 13 122 173
Disposals - - - (14) (14)
Balance as at 31 March 2020 37 1 13 108 159

Balance as at 1 April 2020 37 1 13 108 159

Depreciation for the year 42 - 12 126 180
Disposals 2 - (1) (79) (78)
Balance as at 31 March 2021 81 1 24 155 261

Net carrying value

As at 31 March 2020 94 2 32 204 332
As at 31 March 2021 72 2 27 209 310

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.1 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

The following are the amounts recognised in the statement of profit and loss

FOR THE YEAR ENDED FOR THE YEAR ENDED

PARTICULARS
31 MARCH 2021 31 MARCH
2020
Depreciation expense of right-of-use assets 180 173
Interest expense on lease liabilities 62 60
242 233

The Company had total cash outNows for leases of ₹ 377 during the year ended 31 March 2021. The maturity analysis of lease liabilities are
disclosed in note 2.9 of these financial statements.
Capital commitments
As of 31 March 2021 and 31 March 2020, the Company was committed to spend ₹ 9,560 and ₹ 4,485, respectively, under agreements to
purchase property, plant and equipment. This amount is net of capital advances paid in respect of such purchase commitments.
Interest capitalisation
During the years ended 31 March 2021 and 31 March 2020, the Company capitalised interest cost of ₹ 149 and ₹ 52, respectively, with respect
to qualifying assets. The rate for capitalisation of interest cost for the years ended 31 March 2021 and 31 March 2020 was approximately 4.25%
and 4.22% respectively.
Depreciation for the year includes an amount of ₹ 595 (31 March 2020: ₹ 617) pertaining to assets used for research and development. During
the year, the Company incurred ₹ 522 (31 March 2020: ₹ 628) towards capital expenditure for research and development. (Refer note 2.40)

2.2 GOODWILL
Goodwill arising upon business combinations is not amortised but tested for impairment at least annually or more frequently if there is
any indication that the cash generating unit to which goodwill is allocated is impaired.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
2.3 OTHER INTANGIBLE ASSETS
PRODUCT CUSTOMER
PARTICULARS RELATED RELATED OTHERS TOTAL
INTANGIBLES INTANGIBLES

Gross carrying value

Balance as at 1 April 2019 10�884 - 1�455 12�339
Additions 39 - 158 197
Disposals/ De- recognitions (317) - - (317)
Balance as at 31 March 2020 10�606 - 1�613 12�219

Balance as at 1 April 2020 10�606 - 1�613 12�219

Additions 16�998 - 273 17�271
Disposals/ De- recognitions (53) - (49) (102)
Balance as at 31 March 2021 27�551 - 1�837 29�388

Amortisation/impairment loss
Balance as at 1 April 2019 4�519 - 820 5�339
Amortisation for the year 595 - 228 823
Disposals/ De- recognitions (261) - - (262)
Balance as at 31 March 2020 4�853 - 1�048 5�901

Balance as at 1 April 2020 4�853 - 1�048 5�901

Amortisation for the year 1�418 - 244 1�662
Disposals/ De- recognitions (53) - (30) (83)
(1)
Impairment loss 110 - - 110
Balance as at 31 March 2021 6�328 - 1�262 7�590

Net carrying value

AS AT AS AT As at 31 March 2020 5�753 - 565 6�318
PARTICULARS 31 MARCH 2021 31 MARCH 2020 As at 31 March 2021 21�223 - 575 21�798
1 Gross carrying value 1

Opening balance 323 323

Goodwill arising on Business combination 530 -
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Global Generics-Branded Formulations 853 323 (1)
Less: Impairments during the year (40) -

The recoverable amounts of the above cash generating units have been assessed using a value-in-use model. Value-in-use is generally Closing balance 237 277
calculated as the net present value of the projected post-tax cash Nows plus a terminal value of the cash generating unit to which the goodwill (1)
Impairment losses recorded for the year ended 31 March 2021:
is allocated.
Initially, a post-tax discount rate is applied to calculate the net present value of the post-tax cash Nows. Key assumptions upon which the As a result of the Company’s decision to discontinue a few products pertaining to its Global Generics segment, ₹ 150 was recorded as total
Company has based its determinations of value-in-use include: impairment charge in the statement of Profit and loss for the year ended 31 March 2021 of which ₹ 43 was pertaining to Doxercalciferol inj,
₹ 40 pertaining to Enalaprilat and the balance of ₹ 67 was on account of other product related intangibles
a) Estimated cash Nows for five years, based on management’s projections.
b) A terminal value arrived at by extrapolating the last forecasted year cash Nows to perpetuity, using a constant long-term growth rate of
0%. This long-term growth rate takes into consideration external macroeconomic sources of data. AS ATSuch
31long-term growthAS
MARCH 2021 rate
ATconsidered
31 MARCH 2020
PARTICULARS
does not exceed that of the relevant business and industry sector.
c) The after tax discount rates used are based on the Company’s weighted average cost of capital.
d) The after tax discount rates used is 10.5% for the cash generating unit. The pre-tax discount rate is 15.7%.
The Company believes that any reasonably possible change in the key assumptions on which a recoverable amount is based would not cause
the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)
2.5 FINANCIAL ASSETS 2.5 A. INVESTMENTS (CONTINUED)

2.5 A. INVESTMENTS PARTICULARS

AS AT AS AT
31 MARCH 2021 31 MARCH 2020
Investments consist of investments in units of equity securities, mutual funds, market linked debentures, preference shares, bonds, commercial 24,000 (31 March 2020: 24,000) equity shares of ₹ 100/- each
- -
paper, and term deposits with banks (i.e., certificates of deposit having an original maturity period exceeding 3 months). of Progressive E�uent Treatment Limited, India
20,250 (31 March 2020: 20,250) equity shares of ₹ 10/- each
- -
AS AT AS AT of Shivalik Solid Waste Management Limited, India
(2)

PARTICULARS 31 MARCH 2021 31 MARCH 2020

Total unquoted trade investments in equity shares of other companies, net (I) 1 1
i. Investments at FVTOCI
(1) Shares held in Biomed Russia Limited are not denominated in number of shares as per the laws of the country.
Quoted equity shares (fully paid-up) (2) Rounded off to millions in the note above.
25,000 (31 March 2020: 58,000) equity shares of ₹ 1/- each of State Bank of India, India 9 11
Quoted equity shares (fully paid-up) (I) 9 11 II. Investment in partnership firms
Investment in ABCD Technologies LLP 400 -
Investments in Market linked debentures (II) - 1�993 Total investment in partnership firms (II) 400 -
Total investments at FVTOCI (I + II) (A) 9 2�004 III. Investment in unquoted mutual funds 12�048 11�370
Total investments at FVTPL (I + II + III) (C) 12,449 11,371
ii. Investments carried at cost
Unquoted equity shares (fully paid-up) Investments carried at amortised cost
I. In subsidiary companies I. Investments in 2,000,000 (31 March 2020: 2,000,000) preference shares
15�511 15�658
105,640,410 (31 March 2020: 105,640,410) equity shares of CHF 1 of CHF 100 each of Dr. Reddy’s Laboratories SA, Switzerland
each of Dr. Reddy’s Laboratories SA, Switzerland 13�515 13�515 II. Investments in term deposit accounts with banks
3�402 5�003
2,499,726 (31 March 2020: 2,499,726) equity shares of ₹ 10/- (original maturity more than 3 months)
each of Idea2Enterprises (India) Private Limited, India 1�537 1�537
III. Investments in bonds 522 1�851
90,544,104 (31 March 2020: 90,544,104) equity shares of ₹ 10/- IV. Investments in commercial paper - 967
974 974
each of Aurigene Discovery Technologies Limited, India Total investments carried at amortised cost (D) 19,435 23,479
36,249,230 (31 March 2020: 36,249,230) shares of Real $ 1
each of Dr. Reddy's Farmaceutica Do Brasil Ltda., Brazil 825 825
Total investments (A+B+C+D) 49,894 54,855
140,526,270 (31 March 2020: 140,526,270) Series "A" shares of Peso 1
each of Industrias Quimicas Falcon de Mexico S.A. de C.V., Mexico 709 709
Current 15�972 21�184
58,932,070 (31 March 2020: 58,932,070) equity shares of ₹ 10/- Non- 33�922 33�671
each of Dr. Reddy's Bio-sciences Limited, India 515 515
current 49,894 54,855
123,000 (31 March 2020: 123,000) equity shares of ₹ 100/-
each of Imperial Credit Private Limited, India 31 31

50,000 (31 March 2020: 50,000) equity shares of ₹ 10/- each

9 11
of Svass Wellness Limited, India (formerly Regkinetics Services Limited, India) 1 1 Aggregate book value of quoted investments 9 11
134,513 (31 March 2020: 134,513) equity shares of ₹ 10/- each Aggregate market value of quoted investments 50�507 55�466
of Cheminor Investments Limited, India 1 1 Aggregate value of unquoted investments
622 622
18�108 18�108 Aggregate amount of impairment in the value of investments
Less: Impairment in the unquoted equity shares
Dr. Reddy's Farmaceutica Do Brasil Ltda., Brazil 2.5 B. TRADE RECEIVABLES
(622) (622)
Total unquoted investments in equity shares of subsidiary companies, net (I)
17�486 17�486 AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS

II. In joint ventures Trade receivables from other parties 13�594 11�532
(1)
Equity shares held in Kunshan Rotam Reddy Pharmaceutical Co. Limited, China 429 429 Receivables from subsidiaries and joint ventures(Refer note 2.23) 27�324 36�592
8,580,000 (31 March 2020: 8,580,000) equity shares of ₹ 10/- each 40,918 48,124
of DRES Energy Private Limited, India 86 86
Details of security
Total unquoted investments in equity shares of joint ventures, net (II) 515 515 Considered good, unsecured 41�069 48�256
Credit impaired 289 314
Total investments carried at cost (I+II)(B) 18�001 18�001 41�358 48�570

Less: Allowance for credit losses (440) (446)

(1) Shares held in Kunshan Rotam Reddy Pharmaceutical Co. Limited, China are not denominated in number of shares as per the laws of the country.
40,918 48,124
Investments at FVTPL
I. Investment in unquoted equity shares Current Non- 40�800 46�387
8,859 (31 March 2020: 8,859) equity shares of ₹ 100/- each (1)
1 1 current 118 1�737
of Jeedimetla E�uent Treatment Limited, India
(1)
40,918 48,124
Ordinary shares of Biomed Russia Limited, Russia - -
200,000 (31 March 2020: 200,000) equity shares of ₹ 10/- each (1) Represents amounts receivable pursuant to an out-licensing arrangement with a customer. As these amounts are not expected to be realised within twelve months from the end of the
- - reporting date, they are disclosed as non-current.
of Altek Engineering Limited, India

In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition of impairment loss
on its trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope
of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
provision matrix takes into account external and
internal credit risk factors and historical data of
credit losses from various customers. The details
of changes in allowance for credit losses during
the year ended 31 March 2021 and 31 March
2020 are as follows:

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.5 B. TRADE RECEIVABLES (CONTINUED) 2.5 E. CASH AND CASH EQUIVALENTS

FOR THE YEAR ENDED FOR THE YEAR ENDED AS AT AS AT
PARTICULARS 31 MARCH 202131 MARCH 2020 PARTICULARS 31 MARCH 2021 31 MARCH 2020
Balance at the beginning of the year 446 467 Balances with banks
Provision made during the year, net of reversals 64 93 In current accounts 4�094 248
Trade receivables written off during the year (70) (114) In EEFC accounts 8�689 19
Effect of changes in the foreign exchange rates - - In term deposits with banks (original maturities less than 3 months) 54 -
Balance at the end of the year 440 446 Cash on hand - 1
Other bank balances
2.5 C.
In unclaimed LOANS
dividend accounts 86 86
In unclaimed fractional share pay order accounts - 1
AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020 20 25
In unclaimed debentures and debenture interest account
Considered good, unsecured LC and Bank guarantee margin money 80 12
Loans and advances to wholly owned subsidiaries
(1)
12 12 Balances in Escrow account pursuant to the Business Transfer Agreement
with Wockhardt Limited (Refer to Note 2.38 for details) 40 -
Others - -
Ƅƅ Ƅƅ Cash and cash equivalents in the balance 13�063 392
sheet
Less: Allowance for doubtful loans and advances - - Less: Bank overdraft used for cash manangement purposes (9) (1)
12 12 Cash and cash equivalents in the statement of cash Now �including restricted cash� 13�054 391
(1)
Loans and advances to wholly owned subsidiaries comprise:
Restricted cash balances included above
Balance in unclaimed dividend and debenture interest account 106 112
MAXIMUM AMOUNT OUTSTANDING Other restricted cash balances 120 12
BALANCE AS AT
PARTICULARS AT ANY TIME DURING THE YEAR ENDED
31 MARCH 2021 31 MARCH 2020 31 MARCH 2021 31 MARCH 2020
2.6 OTHER ASSETS
Wholly owned subsidiaries
AS AT AS AT
DRL Impex Limited, India 11 11 11 11 PARTICULARS
(2) 31 MARCH 2021 31 MARCH 2020
Dr. Reddy’s Bio-sciences Limited, India 1 1 1 1
(2) A. Non-current assets
Cheminor Investments Limited, India - - - -
Considered good, unsecured
Dr. Reddy’s Farmaceutica Do Brasil Ltda., Brazil - - - 343
Industrias Quimicas Falcon de Mexico Capital advances 159 124
S.A. de C.V., Mexico - - - - Dues from joint ventures and other related parties 1 14
Reddy Antilles N.V., Netherlands - - - - 160 138
12 12
B. Current assets
(2)
Considered good, unsecured
Rounded off to millions in the note above� (1)
Balances and receivables from statutory authorities 5�909 3�733
Loans and advances to wholly owned subsidiaries are given for the purpose of working capital and other business requirements, settlement of Export benefits receivable
(2)
2�070 2�652
which is neither planned nor likely to occur in the next twelve months. Loans given to DRL Impex Limited, India and Cheminor Investments Advances to material suppliers 582 544
Limited, India are interest free. Prepaid expenses 738 530
Dues from joint ventures and other related parties 17 49
2.5 D. OTHER FINANCIAL ASSETS Others 650 1�021
AS AT AS AT Considered doubtful, unsecured
PARTICULARS 31 MARCH 2021 31 MARCH 2020 Other advances 107 104
I. Non-current assets 10�073 8�633
Considered good, unsecured Less: Allowance for doubtful advances (107) (104)
Security deposits 492 474 9�966 8�529
492 474
(1) Balances and receivables from statutory authorities primarily consist of amounts recoverable towards the goods and service tax ("GST"), excise duty, and value added tax and from customs
II. Current assets authorities of India.
Considered good, unsecured (2) Export benefits receivables primarily consist of amounts receivable from various government authorities of India towards incentives on export sales made by the Company.
Claims receivable 167 1�045
Interest accrued but not due on investments 114 523 2.7 INVENTORIES
Receivables from subsidiary companies including step down subsidiaries: AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Dr. Reddy’s Bio-sciences Limited, India Aurigene 55 55
Pharmaceutical Services Limited Aurigene Discovery 48 - Raw materials (includes in transit ₹ 53 ; 31 March 2020: ₹ 10�166 8�562
Technologies Limited, India Others 4 17 82) Work-in-progress 8�886 5�960
8 6 Finished goods 4�621 3�477
Other assets 133 242 Stock-in-trade 1�505 1�619
ƈƅƌ ƄƁƋƋƋ Packing materials, stores and spares 3�019 2�286
Less: Allowance for doubtful advances - - 28�197 21�904
529 1�888
During the year ended 31 March 2021, the Company recorded inventory write-down of ₹ 1,242 (31 March 2020: ₹ 1,586) in the statement of

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
profit and loss.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.8 SHARE CAPITAL (All amounts in Indian Rupees millions, except share data and where otherwise stated)

AS AT AS AT 2.8 SHARE CAPITAL (CONTINUED)

PARTICULARS 31 MARCH 2021 31 MARCH 2020
(e) Represents 200 equity shares of ₹ 5/- each, amount paid-up ₹ 500/- (rounded off to millions in the note above) forfeited due to non-
payment of allotment money.
Authorised share capital
240,000,000 equity shares of ₹ 5/- each (31 March 2020: 240,000,000) 1�200 1�200 (f) During the year ended 31 March 2017, the Company bought-back and extinguished 5,077,504 equity shares under the buy-back of equity
shares plan approved by the shareholders on 1 April 2016.
Issued equity capital
166,301,431 equity shares of ₹ 5/- each fully paid-up (31 March 2020: 166,172,282) 832 831 Aggregate number of shares bought-back during the period of five years immediately preceeding the reporting date:
Subscribed and fully paid-up
PARTICULARS YEAR ENDED 31 MARCH
166,301,231 equity shares of ₹ 5/- each fully paid-up (31 March 2020: 166,172,082) 832 831
2021 2020 2019 2018 2017
Add: Forfeited share capital (e) - -
Ordinary shares of ₹ 5 each - - - - 5�077�504
832 831
2.9 FINANCIAL LIABILITIES
a) Reconciliation of the equity shares outstanding is set out below: 2.9 A. NON-CURRENT BORROWINGS
FOR THE YEAR ENDED FOR THE YEAR ENDED AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
PARTICULARS 31 MARCH 2021 31 MARCH 2020
NO. OF SHARES AMOUNT NO. OF SHARES AMOUNT Unsecured
Opening number of equity shares/share capital 166�172�082 831 166�065�948 830 Long-term loans from banks (a) - -
(1)
Add: Equity shares issued pursuant to employee stock option plan 129�149 1 106�134 1 Secured
Closing number of equity shares/share capital 166�301�231 832 166�172�082 831 Long-term maturities of lease obligation 177 193
(2)
Treasury shares 575�201 1�967 395�950 1�006 177 193
(1)
During the years ended 31 March 2021 and 31 March 2020, equity shares were issued as a result of the exercise of vested options granted to employees pursuant to the Dr. Reddy’s Employees
Stock Option Plan, 2002 and Dr. Reddy’s Employees Stock Option Plan, 2007. The options exercised had an exercise price of ₹ 5, ₹ 2,607 or ₹ 2,814 per share. Upon the exercise of such
options, the amount of compensation cost (computed using the grant date fair value) previously recognised in the "share-based payment reserve” was transferred to“securities premium” in 2.9 B. CURRENT BORROWINGS
the statement of changes in equity.
(2) AS AT AS AT
Pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on 27 July 2018, the Dr. Reddy’s Employees ESOS Trust (the “ESOS Trust”) was formed to PARTICULARS 31 MARCH 2021 31 MARCH 2020
support the Dr. Reddy’s Employees Stock Option Scheme, 2018 by acquiring, from the Company or through secondary market acquisitions, equity shares which are used for issuance to
eligible employees (as defined therein) upon exercise of stock options thereunder. During the year ended 31 March 2021 and 31 March 2020, an aggregate of 85,250 and 1,150 equity shares, From Banks
respectively were issued as a result of the exercise of vested options granted to employees pursuant to the Dr. Reddy’s Employees Stock Option Scheme, 2018. The options exercised had an
₹ 2,607
exercise or of
price ₹ 2,814 per share. Upon the exercise of such options, the amount of compensation cost (computed using the grant date fair value) previously recognised in the “share based payment Unsecured
reserve” was transferred to “securities premium” in the statement of changes in equity. In addition, any difference between the carrying amount of treasury shares and the consideration Pre-shipment credit (b) 10�300 10�432
the secondary
received market forinan
was recognised theaggregate
“securitiesconsideration
premium”. Asofof₹311,967
Marchand ₹ 1,006,
2021 and 31respectively.
March 2020,Refer note Trust
the ESOS 2.24 of these
had financial575,201
outstanding statements for further
and 395,950 details
shares, on the Dr. which
respectively, Reddy’s Employees
it purchased Stock
from Bank overdraft 9 1
Option Scheme, 2018. Others 1�500 3

b) Terms / rights attached to the equity shares 11�809 10�436

The Company has only one class of equity shares having a par value of ₹ 5 per share. For all matters submitted to vote in a shareholders
meeting of the Company, every holder of an equity share, as reNected in the records of the Company as on the record date set for the (a) Represents External Commercial Borrowing for the year ended 31 March 2020, carrying interest rate of 1 Month LIBOR plus 82.7 bps and is
shareholders meeting, shall have one vote in respect of each share held. Should the Company declare and pay any dividends, such repayable in two equal installments in the year 31 March 2021. Current maturity of the same is shown under note 2.9 D of the
dividends will be paid in Indian rupees to each holder of equity shares in proportion to the number of shares held to the total equity shares financial statements.
outstanding as on that date. Indian law on foreign exchange governs the remittance of dividends outside India. In the event of liquidation
As per the loan arrangement, the Company is required to comply with certain financial covenants and the Company was in compliance with
of the Company, all preferential amounts, if any, shall be discharged by the Company. The remaining assets of the Company shall be
distributed to the holders of equity shares in proportion to the number of shares held to the total equity shares outstanding as on that date. such covenants as at 31 March 2020.
Final dividends on equity shares (including dividend tax on distribution of such dividends, if any) are recorded as a liability on the date of The aggregate maturities of long-term loans and borrowings, based on contractual maturities, as of 31 March 2021 were as follows:
their approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board
of Directors. The details of dividends paid by the Company are as follows: AS AT 31 MARCH 2021
PARTICULARS
FOREIGN CURRENCY LOAN OBLIGATIONS UNDER LEASES TOTAL
FOR THE YEAR ENDED FOR THE YEAR ENDED Maturing in the year ending 31 March
(1)
PARTICULARS 31 MARCH 2021 31 MARCH 2020
2021 - 159 159
Dividend per share (in absolute ₹) 25 20 2022 - 106 106
Dividend distribution tax on the dividend paid - 600 2023 - 57 57
Dividend paid during the year 4�147 3�314 2024 - 13 13
2025 - 1 1
At the Company’s Board of Directors’ meeting held on 14 May 2021, the Board proposed a dividend of ₹ 25 per share and aggregating to ₹ Thereafter
4,158, which is subject to the approval of the Company’s shareholders. - 336 336
c) Details of shareholders holding more than 5% shares in the Company
The aggregate maturities of long-term loans and borrowings, based on contractual maturities, as of 31 March 2020 were as follows:
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS AS AT 31 MARCH 2020
NO. OF% HOLDINGNO.
SHARES
OF% HOLDING
HELD IN SHARES
THE CLASS
HELD IN THE CLASS PARTICULARS
FOREIGN CURRENCY LOANOBLIGATIONS UNDER LEASES TOTAL
(1)
Dr. Reddy's Holdings Limited 41�325�300 24�85 41�325�300 24�88 Maturing in the year ending 31 March
Life Insurance Corporation of India and their associates 1�110�352 0�67 8�468�983 5�10 2020 3�783 157 3�940

(d) 217,253 (31 March 2020: 232,837) stock options are outstanding and are to be issued by the Company upon exercise of the same in 2022 - 42 42
accordance
outstanding
withand are toofbe
the terms issuedunder
exercise by the
the Company upon
"Dr. Reddy's exerciseStock
Employees of the same
Option in 2002",
Plan, accordance with
412,339 (31the terms
March of 354,343)
2020: exercise stock
underoptions
the "Dr.
are (Refer note2023
2.24) - 28 28
Reddy’s Employees ADR Stock Option Plan, 2007" and 385,930 (31 March 2020: 375,775) stock options are outstanding and are to be issued by the
Company upon exercise of the same in accordance with the terms of exercise under the "Dr. Reddy’s Employees Stock Option Scheme, 2018 ".
1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

2024 - 18 18
Thereafter
3�783 350 4�133
(1) Long-term debt obligations disclosed in the above table does not reNect any netting of transaction costs amounting to ₹ 0 and ₹ 0 as at 31 March 2021 and 31 March 2020,
respectively.
2021 - 105 105

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.9 B. CURRENT BORROWING (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

(b) Packing credit loans for the year ended 31 March 2021, comprised of INR denominated loans carrying rates of 3-months Treasury Bill plus
30 bps and fixed rate of 5.75� and are repayable within 6 to 12 months from the date of drawdown. Packing credit loans for the year
ended 31 March 2020, comprised of US$ denominated loans carrying interest rates of 1 Month LIBOR plus 12.5 to 16 bps and INR
denominated loans carrying rates of Treasury Bill plus 60 bps and are repayable within 6 to 12 months from the date of drawdown.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
2.9 D OTHER FINANCIAL LIABILITIES
AS AT AS AT Accrued expenses 6�705 5�710
PARTICULARS 31 MARCH 2021 31 MARCH 2020 Payable to subsidiary companies including step down subsidiaries (Refer note 2.23) 3�049 2�113
(1)

(c) The Company had uncommitted lines of credit of ₹ 18,361 and ₹ 20,743 as of 31 March 2021 and 31 March 2020, respectively, from its banks Current maturity of long-term borrowings - 3�783
for working capital requirements. The Company has the right to draw upon these lines of credit based on its working capital requirements. Due to capital creditors 2�019 1�186
(2)
Unclaimed dividends, debentures and debenture interest 106 111
(d) Reconciliation of liabilities arising from financing activities Trade and security deposits received 59 60
Interest accrued but not due on loans - 2
Current maturity of lease obligations 159 157
FOR THE YEAR ENDED 31 MARCH 2021
Others 72 806
PARTICULARS NON-CURRENT CURRENT
TOTAL 12,169 13,928
BORROWINGS(1) BORROWINGS(2)
Opening balance at the beginning of the year 4�133 10�435 14�568 (1) Represents current outstanding amount of External Commercial Borrowing, carrying interest rate of 1 Month LIBOR plus 82.7 bps and is repayable in two equal installments in the year
31 March 2021.
Recognition of right-of-use liability during the year 24 - 24 (2) As per the loan arrangement, the Company is required to comply with certain financial covenants and the Company was in compliance with such covenants as at 31 March 2020.
Borrowings (repaid)/made during the year - 19�083 19�083 Unclaimed amounts are transferred to Investor Protection and Education Fund after seven years from the due date.
Borrowings repaid during the year (3�743) (17�556) (21�299)
Payment of principal portion of lease liabilities (38) - (38)
2.10 PROVISIONS
Effect of changes in foreign exchange rates (40) (162) (202)
Others - - - AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Closing balance at the end of the year 336 11�800 12�136
A. Non-current provisions
FOR THE YEAR ENDED 31 MARCH 2020 Provision for employee benefits (Refer note
PARTICULARS NON-CURRENT CURRENT 2.25) Compensated absences 195 493
BORROWINGS (1) BORROWINGS(2) TOTAL Long service award benefit plan 56 52
Opening balance at the beginning of the year 5�183 5�463 10�646 251 545
Recognition of right-of-use liability on initial application of Ind AS 116 332 - 332 B. Current provisions
Recognition of right-of-use liability during the year 173 - 173 Provision for employee benefits (Refer note
Borrowings (repaid)/made during the year (1�805) 13�741 11�936 2.25)
Borrowings repaid during the year - (9�111) (9�111) Compensated absences 595 409
Payment of principal portion of lease liabilities (155) - (155) Gratuity 631 189
Effect of changes in foreign exchange rates 401 342 743 Long service award benefit plan 16 14
Others 4 - 4 Other provisions
(a)

Closing balance at the end of the year 4�133 10�435 14�568 Refund liability 1�134 914
Others 611 547
2,987 2,073
(1) Includes current portion.
(2)
Does not include movement in bank overdraft and includes current (a)
portion. Details of changes in other provisions during the year ended 31 March 2021 are as follows:
(1) (2)
PARTICULARS REFUND LIABILITY OTHERS
2.9 C TRADE PAYABLES
Balance as at beginning of the year 914 547
AS AT AS AT Provision made during the year, net of reversals 248 64
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Provision used during the year (28) -
Trade payables to third parties
(1)
Balance as at end of the year 1,134 611
Due to micro, small and medium enterprises Other 152 55
(1) Refund liability is accounted for by recording a provision based on the Company’s estimate of expected sales returns. See note 1.3(l) of these financial statements for the Company’s
parties 12�559 9�809 accounting policy on refund liability.
Trade payables to subsidiaries including step down subsidiaries (Refer note 2.23) 653 820
(2) Primarily consists of provision recorded towards the potential liability arising out of a litigation relating to cardiovascular and anti-diabetic formulations. Refer note 2.29 of these financial
statements under “Product and patent related matters - Matters relating to National Pharmaceutical Pricing Authority - Litigation relating to Cardiovascular and Anti-diabetic formulations”
13�364 10�684 for further details.

(1) (a) The principal amount remaining unpaid as at 31 March 2021 in respect of enterprises covered under the "Micro, Small and Medium Enterprises Development Act, 2006" (MSMED) is
₹ 152 (31 March 2020: ₹ 55). The interest amount computed based on the provisions under Section 16 of the MSMED is ₹ 0.00 (31 March 2020: ₹ 0.00) is remaining unpaid as of 31 March
2021. The interest amount of ₹ 0.00 that remained unpaid as at 31 March 2020 was paid fully during the current year. 2.11 OTHER LIABILITIES
(b) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest
specified under this Act is ₹ Nil (31 March 2020: Nil). AS AT AS AT
(c) The list of undertakings covered under MSMED was determined by the Company on the basis of information available with the Company and has been relied upon by the auditors. PARTICULARS 31 MARCH 2021 31 MARCH 2020
A. Non-current liabilities
For details regarding the Company’s exposure to currency and liquidity risks, see note 2.28 of the financial statements under �Liquidity
risk�. Deferred revenue 428 294
Others - 2
428 296
B. Current liabilities
Salary and bonus payable 2�022 1�921
Due to statutory authorities 2�514 633
Advance from customers 296 487
Deferred revenue 136 119
4,968 3,160

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.12 REVENUE FROM CONTRACTS WITH CUSTOMERS AND TRADE RECEIVABLES (All amounts in Indian Rupees millions, except share data and where otherwise stated)

Revenue from contracts with customers: 2.13 OTHER OPERATING INCOME

FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS PARTICULARS 31 MARCH 2021 31 MARCH
31 MARCH 2021 31 MARCH
2020 2020
Sales 132�094 109�925 Sale of spent chemicals 270 306
Service income 199 416 Scrap sales 115 137
License fees
(1)
521 7�689 Miscellaneous income 292 31
132,814 118,030 677 474
(1)
During the year ended 31 March 2020, the Company entered into a definitive agreement with Upsher-Smith Laboratories, LLC for the sale of its US and select territory rights for
® ® ®
2.14 OTHER INCOME
ZEMBRACE SYMTOUCH (sumatriptan injection) 3 mg and TOSYMRA (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) which formed part of its Proprietary Products
segment. License fees includes an amount of ` 7,486 (US$ 108.7 million) towards the aforesaid sale transaction.
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020
Analysis of revenues by segments:
Interest income
The following table shows the analysis of revenues (excluding other operating income) by On fixed deposits 245 311
segments:
FOR THE YEAR ENDED FOR THE YEAR ENDED On loans to subsidiaries - 11
PARTICULARS 31 MARCH 202131 MARCH 2020 (1)
On investment in preference shares of subsidiary 516 -
Global Generics 106�156 89�683 Others 462 534
Pharmaceutical Services and Active Ingredients 26�188 20�703 Dividend income
(2)
- 397
Proprietary Products 470 7�644 Profit on disposal of property, plant and equipment and other intangibles, net
(3)
4�711 -
132,814 118,030 Foreign exchange gain, net 1�237 1�705
Fair value gain on financial instruments measured at fair value through profit or loss 510 821
Details of refund liabilities: (4)
Miscellaneous income, net 330 3�653
FOR THE YEAR ENDED FOR THE YEAR ENDED 8,011 7,432
PARTICULARS 31 MARCH 2021 31 MARCH
(1) Includes ` 516 of preference dividend from Dr. Reddy's Laboratories S.A. 2020
(2) Balance
Includes at the
dividends beginning
received of the
from Kunshan year
Rotam Reddy Pharmaceutical Company Limited, China. 914 899
Provision made during the year, net of reversals 248 1�041 (3) Profit on disposal of property, plant and equipment and other intangibles includes an amount of ` 4,772 representing the profit on sale of business unit during the year ended 31 March
2021. The Company sold contract development and manufacturing organisation (CDMO) division of the Custom Pharmaceutical Services (CPS) business of the Company. This sale was
Provision used during the year (28) (1�026) done by way of slump sale (as defined under section 2(42C) of Indian Income Tax Act,1961) including all related property, plant and equipment, current assets, current liabilities, and
Balance at the end of the year 1,134 914 transfer of employees.
(4) Miscellaneous income, net includes ` 3,457 (US$50 millions) received from Celgene pursuant to a settlement agreement entered into in April 2019. The agreement effectively settles any
claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company�s ANDS
Current 1�134 914 ®
for a generic version of REVLIMID brand capsules (Lenalidomide) pending before Health Canada.
Non-current - -
1,134 914
2.15 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
FOR THE YEAR ENDED 31 MARCH
FOR
2021
THE YEAR ENDED 31 MARCH 202
Details of contract asset: PARTICULARS
As mentioned in the accounting policies for refund liability set forth in note 1.3 (l) of these financial statements, the Company recognises an Opening
asset ,
(i.e., the right to the returned goods), which is included in inventories for the products expected to be returned. The Company initially measures
Work-in-progress 5�960 5�630
this asset at the former carrying amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the
value of the returned goods. Along with re-measuring the refund liability at the end of each reporting period, the Company updates the
measurement of the asset recorded for any revisions to its expected level of returns, as well as any additional decreases in the value of the Finished goods 3�477 3�070
returned products. Stock-in-trade 1�619 ƄƄƁƃƈƉ 1�357 ƄƃƁƃƈƊ
As on 31 March 2021 and 31 March 2020, the Company had ₹ 37 and ₹ 23, respectively as contract assets representing the right to returned Closing
goods. Work-in-progress 8�886 5�960
Finished goods 4�621 3�477
Details of deferred revenue: Stock-in-trade 1�505 ƄƈƁƃƄƅ 1�619 ƄƄƁƃƈƉ
Tabulated below is the reconciliation of deferred revenue for the years ended 31 March 2021 and 31 March 2020: �3,956� �999�

2.16 EMPLOYEE BENEFITS EXPENSE FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 2021 31 MARCH FOR THE YEAR ENDED FOR THE YEAR ENDED
2020 PARTICULARS 31 MARCH 2021 31 MARCH
Balance at the beginning of the year 413 388 2020
Revenue recognised during the year (217) (109) Salaries, wages and bonus 18�876 17�123
Milestone payment received during the year 368 134 Contribution to provident and other funds 1�295 1�203
Balance at the end of the year 564 413 Staff welfare expenses 1�917 1�427
Share-based payment expenses 613 549
Current 136 119 22,701 20,302
Non-current 428 294
564 413 2.17 DEPRECIATION AND AMORTISATION EXPENSE
Details of contract liabilities :

1 1
 FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
FOR THE YEAR ENDED FOR THE YEAR ENDED Depreciation of property, plant and equipment
PARTICULARS 31 MARCH 202131 MARCH 2020 6�688 7�069
Advance from customers 296 487 Amortisation of intangible assets 1�662 823
296 487 8,350 7,892

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.18 FINANCE COSTS 2.21 AUDITORS’ REMUNERATION

FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020 PARTICULARS 31 MARCH 202131 MARCH 2020
Interest on long-term borrowings 96 156 Audit fees 14 13
Interest on other borrowings 371 322 Other charges – Certification fee 1 1
467 478 Reimbursement of out of pocket expenses 1 2
16 16

2.19 SELLING AND OTHER EXPENSES 2.22 EARNINGS PER SHARE (EPS)
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 2021 31 MARCH PARTICULARS 31 MARCH 2021 31 MARCH
2020 2020
Consumption of stores, spares and other materials 5�275 4�842 Earnings
Clinical trial expenses 1�605 916 Profit attributable to equity shareholders of the Company 21�864 29�377
Other research and development expenses 3�612 3�386 Shares
Advertisements 370 122 Number of equity shares at the beginning of the year (excluding treasury shares) 165�776�132 165�847�972
Commission on sales 181 176 Effect of treasury shares held during the year (56�014) (154�020)
Carriage outward 4�696 2�566 Effect of equity shares issued on exercise of stock options 124�222 64�432
Other selling expenses 8�744 9�134 Weighted average number of equity shares – Basic 165�844�340 165�758�384
(1)
Legal and professional 3�587 3�163 Dilutive effect of stock options outstanding 471�701 323�601
Power and fuel 2�913 2�905 Weighted average number of equity shares – Diluted 166�316�041 166�081�985
Repairs and maintenance Earnings per share of par value ₹ 5/- – Basic (₹) 131�84 177�23
Buildings 163 223 Earnings per share of par value ₹ 5/- – Diluted (₹) 131�46 176�88
Plant and equipment 760 734
(1) As at 31 March 2021 and 31 March 2020, 235,460 and 475,575 options, respectively, were excluded from the diluted weighted average number of equity shares calculation because their effect would have been anti-dilutive. The average market value of the Company’s shares for the purpose of calculating the dilutive effect of stock options was based on quoted market prices for the year during which the options were
Others
outstanding. 1�727 1�429
Insurance 456 298
Travel and conveyance 491 810 2.23 RELATED PARTIES
Rent 87 131
(a) List of all subsidiaries, joint ventures and other consolidating entities:
Rates and taxes 418 358
Corporate Social Responsibility and donations
(1)
479 447 Subsidiaries including step down subsidiaries:
Allowance for credit losses, net (Refer note 2.5 B) 64 93 1 Aurigene Discovery Technologies (Malaysia) SDN BHD, Malaysia
Allowance for doubtful advances, net 5 2 2 Aurigene Discovery Technologies Inc., USA
Non-Executive Directors’ remuneration 91 108 3 Aurigene Discovery Technologies Limited, India
Auditors’ remuneration (Refer note 2.21) 16 16 4 Aurigene Pharmaceutical Services Limited, India (from 16 September 2019)
Provision/(reversal of provision) relating to non-current investments, net - - 5 beta Institut gemeinnützige GmbH, Germany
Loss on sale/disposal of property , plant and equipment and other intangibles, net - 135 6 betapharm Arzneimittel GmbH, Germany
Other general expenses 2�302 1�774 7 Cheminor Investments Limited, India
38�042 33�768 8 Chirotech Technology Limited, UK (under liquidation)
(1) Details of Corporate Social Responsibility expenditure in accordance with section 135 of the Companies Act, 9 Dr Reddy’s Laboratories Kazakhstan, Kazakhstan
2013:
10 Dr. Reddy’s (Thailand) Limited, Thailand
11 Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd, China
IN CASH YET TO BE PAID IN CASH TOTAL
341 12 Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited (from 19 August 2020)
Gross amount required to be spent by the Company during the year 361 13 Dr. Reddy’s Bio-sciences Limited, India
-* 361
Amount spent during the year ending on 31 March 2021 275 14 Dr. Reddy’s Formulations Limited, India (from 11 March 2021)
- 275
Amount spent during the year ending on 31 March 2020 15 Dr. Reddy’s Farmaceutica Do Brasil Ltda., Brazil
* Rounded off to millions
16 Dr. Reddy’s Laboratories (Australia) Pty. Limited, Australia
17 Dr. Reddy’s Laboratories (EU) Limited, UK
2.20 RESEARCH AND DEVELOPMENT EXPENSES 18 Dr. Reddy’s Laboratories (Proprietary) Limited, South Africa
19 Dr. Reddy’s Laboratories (UK) Limited, UK
Details of research and development expenses (excluding depreciation and amortisation expense) incurred during the year and included under
20 Dr. Reddy’s Laboratories B.V., Netherlands (Formerly Eurobridge Consulting B.V.)
various heads of expenditures are given below:
21 Dr. Reddy’s Laboratories Canada, Inc., Canada
FOR THE YEAR ENDED FOR THE YEAR ENDED 22 Dr. Reddy’s Laboratories Inc., USA
PARTICULARS 31 MARCH 2021 31 MARCH
2020 23 Dr. Reddy’s Laboratories International SA, Switzerland (merged with Dr. Reddy’s Laboratories SA, Switzerland w.e.f 1 January 2019)
Employee benefits expense (included in note 2.16) 3�257 3�230 24 Dr. Reddy’s Laboratories LLC, Ukraine
Other expenses (included in note 2.19) 25 Dr. Reddy’s Laboratories Malaysia Sdn. Bhd., Malaysia
Clinical trial expenses 1�605 916 26 Dr. Reddy’s Laboratories New York, LLC (transfer of ownership from DRL Swiss to DRL Inc. effective 29 October 2020 and conversion
Materials and consumables 3�861 3�610 from Inc. to LLC effective 30 October 2020)
Power and fuel 207 201 27 Dr. Reddy’s New Zealand Limited, New Zealand
Other research and development expenses 3�612 3�386 28 Dr. Reddy’s Philippines Inc., Philippines
12�542 11�343 29 Dr. Reddy’s Research and Development B.V. (formerly Octoplus BV)

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.23 RELATED PARTIES (CONTINUED) 2.23 RELATED PARTIES (CONTINUED)

30 Dr. Reddy’s SRL, Italy 15
AverQ Inc.,USA Enterprise over which Key Managerial Personnel have significant inNuence
31 Dr. Reddy's Laboratories Chile SPA., Chile 16
Shravya Publications Pvt. Ltd. Enterprise over which whole-time directors and their relatives have significant
32 Dr. Reddy's Laboratories Japan KK, Japan inNuence
33 Dr. Reddy's Laboratories Louisiana LLC, USA 17
Cancelled Plans LLP Enterprise over which relatives of whole-time directors have significant
34 Dr. Reddy's Laboratories Romania S.R.L., Romania 18
Araku Originals Private Limited inNuence Enterprise over which whole-time directors have significant inNuence
19
35 Dr. Reddy's Laboratories SA, Switzerland Samarjita Management Consultancy Private Enterprise controlled by Key Managerial Personnel
36 Dr. Reddy's Laboratories SAS, Colombia Limited
37 Dr. Reddy's Laboratories Taiwan Limited, Taiwan
(c) In accordance with the provisions of Ind AS 24, Related Party Disclosures and the Companies Act, 2013, Company’s Directors, members of the
38 Dr. Reddy’s Singapore PTE Limited (till 04 June 2019)
Company’s Management Council and Company Secretary are considered as Key Managerial Personnel.
39 Dr. Reddy's Venezuela, C.A., Venezuela
40 DRL Impex Limited, India List of Key Managerial Personnel of the Company is as below:
41 Idea2Enterprises (India) Private Limited, India 1 K Satish Reddy Whole-time director (Chairman)
42 Imperial Credit Private Limited, India 2 G V Prasad Whole-time director (Co-Chairman and Managing Director)
43 Industrias Quimicas Falcon de Mexico, S.A.de C.V, 3 Allan Oberman Independent director
Mexico 4 Anupam Puri (till 26 July Independent director
44 Lacock Holdings Limited, Cyprus 2019)
45 OOO Dr. Reddy’s Laboratories Limited, Russia 5 Bharat Narotam Doshi Independent director
46 OOO DRS LLC, Russia 6 Dr. Bruce LA Carter Independent director
47 Promius Pharma LLC, USA
7 Dr. Omkar Goswami (till 30 July Independent director
48 Reddy Antilles N.V. (till 02 November 2019) 2019) Independent director
8 Kalpana Morparia
49 Reddy Holding GmbH, Germany
9 Leo Puri Independent director
50 Reddy Netherlands B.V., Netherlands
51 Reddy Pharma Iberia SAU, Spain 10 Prasad R Menon Independent director

52 Reddy Pharma Italia S.R.L, Italy 11 Shikha Sharma Independent director

53 Reddy Pharma SAS, France 12 Sridar Iyengar Independent director
54 Svaas Wellness Limited (formerly Regkinetics Services Limited) (name change effective 18 December 2020) 13 Anil Namboodiripad Management council member
Joint ventures 14 Archana Bhaskar Management council member
55 Kunshan Rotam Reddy Pharmaceutical Company Enterprise over which the Company exercises joint control with other joint venture
15
Deepak Sapra Management council member
Limited (“Reddy Kunshan”), China partners and holds 51.33% of equity shares 16
Dr. Raymond de Vre (till 31 March Management council member
2021)
56 DRANU LLC, USA (under 17 Erez Israeli CEO and management council member
Enterprise over which the Company’s step down subsidiary exercises joint
liquidation) control
with other joint venture partner and holds 50% of equity shares 18
Ganadhish Kamat Management council member
57 DRES Energy Private Limited, Enterprise over which the Company exercises joint control with other joint venture
19
Marc Kikuchi Management council member
India
partners and holds 26% of equity 20
Mukesh Rathi (from 1 December 2020) Management council member
shares
Other consolidating entities 21
M V Ramana Management council member
58 Cheminor Employees Welfare Trust, India The Company does not have any equity interests in this entity, but has significant 22
Parag Agarwal (from 1 December Management council member
inNuence or control over it. 2020) Management council member
23
Patrick Aghanian (from 7 October
2019)
59
Dr. Reddy’s Research Foundation, India The Company does not have any equity interests in this entity, but has significant 24
P Yugandhar Management council
inNuence or control over it. 25
Saumen Chakraborty member Management
60
Dr. Reddy's Employees ESOS Trust, The Company does not have any equity interests in this entity, but has significant 26
Sanjay Sharma council member
India (from 27 July 2018) inNuence or control over it. 27
Sauri Gudlavalleti Management council
member Management
council member
28
(b) List of other related parties with whom transactions have taken place during the current and/or previous Sandeep Poddar Company secretary
year:
1 Dr. Reddy's Institute of Life Sciences Enterprise over which whole-time directors have significant inNuence (d) Particulars of related party transactions
2 Stamlo Industries Limited 7 G Mallika Reddy Enterprise controlled by whole-time directors Enterprise controlled by relative of a whole-time director Mother of Chairman
3 Green Park Hotels and Resorts Limited 8 G V Sanjana Reddy Spouse of Co-chairman Spouse of Chairman Daughter of Co-chairman Daughter of Co-chairman
4 K Samrajyam
5 G Anuradha
6 K Deepti Reddy

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
The following is a summary of significant Revenues
FOR THE from: FOR THE YEAR ENDED
YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020
related party transactions� Subsidiaries including step down subsidiaries:
9 Akhil Ravi Son-in-law of Co-chairman Dr. Reddy’s Laboratories Inc. 35�914 31�455
10 Dr. Reddy’s Foundation Enterprise over which whole-time directors and their relatives have significant OOO Dr. Reddy’s Laboratories Limited 13�410 12�517
inNuence Dr. Reddy’s Laboratories SA 6�252 6�001
Joint Ventures
Others 15�799 10�948
11 Pudami Educational Society Enterprise over which whole-time directors and their relatives have significant Reddy Kunshan 22 14
71�375 60�921
inNuence Total 71�397 60�935
12 Indus Projects Private Limited Enterprise over which relatives of whole-time directors have significant inNuence
13 CERG Advisory Private Limited Enterprise controlled by (erstwhile) Key Managerial Personnel (till 30 July 2019)
14 Green Park Hospitality Services Private Enterprise controlled by relative of a whole-time director
Limited

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.23 RELATED PARTIES (CONTINUED) 2.23 RELATED PARTIES (CONTINUED)

FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020 PARTICULARS 31 MARCH 202131 MARCH 2020
Interest income from subsidiaries including step down subsidiaries: Other related parties
(1)
Dr. Reddy’s Laboratories SA 516 - Dr. Reddy’s Institute of Life Sciences 105 105
Dr. Reddy’s Farmaceutica Do Brasil Ltda. - 11 Indus Projects Private Limited 55 101
Dr. Reddy’s Bio-sciences Limited, India* - - Samarjita Management Consultancy Private Limited 28 -
Total 516 11 Others 2 4
Total 190 210
Service income from subsidiaries including step down subsidiaries:
Dr. Reddy’s Laboratories Inc. 10 143 Sale of assets to subsidiaries including step down subsidiaries
Dr. Reddy’s Laboratories SA 44 - Aurigene Pharmaceutical Services Limited 5�346 -
Total 54 143
Contributions towards social development
Joint Ventures 217 218
39 - Dr. Reddy’s Foundation
Reddy Kunshan Pudami Educational Society 15 15
Total 39 - Total 232 233

Licence fees from subsidiaries including step down subsidiaries: Catering services from Green Park Hospitality Services Private Limited 301 344
Dr. Reddy’s Laboratories Inc. 3 14
Total 3 14 36 24
Facility management services from Green Park Hospitality Services Private Limited
* Rounded off to millions
(1 Represents preference dividend
)
Hotel expenses
Commission on guarantee to subsidiaries including step down subsidiaries: Green Park Hotels and Resorts Limited 7 15
Dr. Reddy’s Laboratories SA - 49 Stamlo Industries Limited 1 7
Aurigene Pharmaceutical Services Limited 15 - Total 8 22
Total 15 49
Lease rentals paid under cancellable leases to
Lease rentals received from Key Managerial Personnel
K Satish Reddy 14 13
Subsidiaries including step down subsidiaries:
Relatives of Key Managerial Personnel 23 22
Aurigene Discovery Technologies Limited 4 18
Total 37 35
Aurigene Pharmaceutical Services Limited 44 -
Joint ventures 8 7
Salaries to relatives of Key Managerial Personnel
DRES Energy Private Limited 1 1
Total 49 19
Remuneration to Key Managerial Personnel
(1)
Salaries and other benefits 575 495
Dividend income from Reddy Kunshan - 392
Contributions to defined contribution plans 34 35
Commission to directors 301 298
Reimbursement of operating expenses by subsidiaries and step down subsidiaries:
Share-based payments expense 261 168
Aurigene Discovery Technologies Limited 2 40
Total 1�171 996
Aurigene Pharmaceutical Services Limited 19 -
(1)
Some of the Key Managerial Personnel of the Company are also covered under the Company’s Gratuity Plan along with the other employees of the Company. Proportionate amounts
Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited 2 - of gratuity accrued under the Company’s Gratuity Plan have not been separately computed or included in the above disclosure.
Total 23 40 Investment made/(disposed) in
Subsidiaries
Purchases and services from Dr. Reddy’s Laboratories SA - 14�485
Subsidiaries including step down subsidiaries Reddy Antilles N.V. - (411)
OOO Dr. Reddy’s Laboratories Limited 2�738 3�024 Svaas Wellness Limited (formerly Regkinetics Services Limited) - (200)
Dr. Reddy’s Research and Development B.V. 1�048 968 Dr. Reddy's Bio-sciences Limited - 49
Industrias Quimicas Falcon de Mexico, S.A. de CV 952 995 Total - 13�923
Dr. Reddy’s Laboratories LLC, Ukraine 664 623
Dr. Reddy’s Laboratories Inc. 626 590 Impairment/(reversal of impairment) in the value of non-current investments:
Dr. Reddy’s Laboratories (EU) Limited 533 488 Subsidiaries
Others 688 634 Reddy Antilles N.V. - (411)
Total 7�249 7�322 Total - (411)

Joint ventures
DRES Energy Private Limited 127 108

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.23 RELATED PARTIES (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

AS AT AS AT 2.23 RELATED PARTIES (CONTINUED)

PARTICULARS 31 MARCH 2021 31 MARCH 2020 AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Loans and advances given /(repaid by), net
Subsidiaries and step down subsidiaries Due to related parties (included in trade payables and other current liabilities) (continued)
Joint ventures
Dr. Reddy’s Farmaceutica Do Brasil Ltda. - (343) DRES Energy Private Limited 3 12
Dr. Reddy’s Bio-sciences Limited -* -*
Total - (343) Others
* Loans given / (repaid by) is inclusive of accrued interest Greenpark Hospitality Services Private Limited 38 48
Indus Projects Private Limited 17 31
Loans and advances given /(repaid by), net Green Park Hotels & Resorts Limited 1 -*

Joint ventures Dr. Reddy's Institute of Life Sciences 34 -*

DRES Energy Private Limited - (6) Total 90 79
Total - (6) *Rounded off to millions�
Outstanding Guarantee given on behalf of Aurigene Pharmaceutical Services 4�000 -
Limited
Movement in other receivables from Equity held in subsidiaries and joint venture has been disclosed under “Financial assets-Investments” (Note 2.5 A). Loans and advances to
Subsidiaries including step down subsidiaries: subsidiaries and joint venture have been disclosed under “Loans” (Note 2.5 C). Other receivables from subsidiaries and joint venture have been
Aurigene Pharmaceutical Services Limited 48 - disclosed under “Other financial assets” (Note 2.5 D).
Aurigene Discovery Technologies Limited (13) -
Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited 2 -
Joint ventures 2.24 EMPLOYEE STOCK INCENTIVE PLANS
DRES Energy Private Limited (16) 2 Dr. Reddy’s Employees Stock Option Plan-2002 (the “DRL 2002 Plan”):
Total 21 2 The Company instituted the DRL 2002 Plan for all eligible employees pursuant to the special resolution approved by the shareholders in the
Annual General Meeting held on 24 September 2001. The DRL 2002 Plan covers all employees and directors (excluding promoter directors) of
the parent
Guarantee given/(released) on behalf of Subsidiaries including step down subsidiaries company and its subsidiaries (collectively, “eligible employees”). The Nomination, Governance and Compensation Committee of the Board of the
Aurigene Pharmaceutical Services Limited 4�000 - parent company (the “Committee”) administers the DRL 2002 Plan and grants stock options to eligible employees. The Committee determines
which eligible employees will receive options, the number of options to be granted, the exercise price, the vesting period and the exercise
Dr. Reddy’s Laboratories SA - (17�289)
period. The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2002 Plan vest in periods
(e) The Company has the following amounts due from/to related parties: ranging between one and four years and generally have a maximum contractual term of five years.
The DRL 2002 Plan, as amended at annual general meetings of shareholders held on 28 July 2004 and on 27 July 2005, provides for stock option
AS AT AS AT
PARTICULARS grants in two categories:
31 MARCH 2021 31 MARCH 2020
Due from related parties Category A: 300,000 stock options out of the total of 2,295,478 options reserved for grant having an exercise price equal to the fair market value
Subsidiaries including step down subsidiaries (included in trade receivables) of the underlying equity shares on the date of grant; and
Dr. Reddy’s Laboratories Inc. 12�014 20�785 Category B: 1,995,478 stock options out of the total of 2,295,478 options reserved for grant having an exercise price equal to the par value of the
OOO Dr. Reddy’s Laboratories Limited 4�677 6�335 underlying equity shares (i.e., ₹ 5 per option).
Others 10�633 9�468
Under the DRL 2002 Plan, the exercise price of the fair market value options granted under Category A above is determined based on the
Total 27�324 36�589
average closing price for 30 days prior to the grant in the stock exchange where there is highest trading volume during that period.
Notwithstanding the foregoing, the Committee may, after obtaining the approval of the shareholders in the annual general meeting, grant
Joint ventures (included in other assets)
options with a per share exercise price other than fair market value and par value of the equity shares.
Reddy Kunshan - 3
DRES Energy Private Limited 1 16 After the stock split effected in the form of a stock dividend issued by the Company in August 2006, the DRL 2002 Plan provides for stock option
1 19 grants in the above two categories as follows:
Others
NUMBER OF NUMBER OF OPTIONS
Greenpark Hospitality Services Private Limited 17 47 PARTICULARS OPTIONS RESERVED UNDER TOTAL
Rental deposit to Key Managerial Personnel and their relatives 8 8 RESERVED UNDER CATEGORY B
Others -* -* CATEGORY A
Total 25 55 Options reserved under original Plan 300�000 1�995�478 2�295�478
*Rounded off to millions� Options exercised prior to stock dividend date (A) 94�061 147�793 241�854
Balance of shares that can be allotted on exercise of options (B) 205�939 1�847�685 2�053�624
Due to related parties (included in trade payables and other current liabilities) Options arising from stock dividend (C) 205�939 1�847�685 2�053�624
Subsidiaries including step down subsidiaries and other consolidating entities: Options reserved after stock dividend (A+B+C) 505�939 3�843�163 4�349�102
OOO Dr. Reddy’s Laboratories Limited 2�440 1�591
Dr. Reddy’s Research and Development B.V. 251 256
Industrias Quimicas Falcon de Mexico, S.A. de CV 238 341
Dr. Reddy’s Laboratories LLC, Ukraine. 161 134
Dr. Reddy’s Laboratories Inc. 159 290
Dr. Reddy’s Laboratories (EU) Limited 143 190
Others 310 131

1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Total 3�702 2�933

1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.24 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.24 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED)

The term of the DRL 2002 plan was extended for a period of 10 years effective as of 29 January 2012 by the shareholders at the Company�s
Annual General Meeting held on 20 July 2012. Stock options activity under the DRL 2007 Plan for the above two categories of options during the years ended 31 March 2021 and 31 March 2020
Stock option activity under the DRL 2002 Plan for the two categories of options during the years ended 31 March 2021 and 31 March 2020 is as was as follows:
follows:
Category A — Fair Market Value Options: There was no stock activity under this category during the years ended 31 March 2021
and 31 March 2020 and there were no stock options outstanding under this category as of 31 March 2021 and 31 March 2020.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
CATEGORY A -FAIR MARKET VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2021
SHARES RANGE OF WEIGHTED WEIGHTED AVERAGE
PARTICULARS ARISING OUT EXERCISE AVERAGE REMAINING USEFUL
OF OPTIONS PRICES EXERCISE PRICE LIFE (MONTHS)

Category B — Par Value Options: Stock options activity under this category during the years ended 31 March 2021 and 31 March 2020 was 1,982.00 to
Outstanding at the beginning of the year 202,760 2,353.62 72
as set forth in the below table. 2,814.00
Granted during the year 96,080 3,679.00 3,679.00 90
2,607.00/
FOR THE YEAR ENDED 31 MARCH 2021 Expired/forfeited during the year (13,348) 2,678.03 -
2,814.00
PARTICULARS SHARESRANGE
ARISING
OFOUT OF OPTIONS
EXERCISE PRICES WEIGHTED WEIGHTED AVERAGE AVERAGEREMAINING USEFUL 2,607.00/ 2,643.48
Exercised during the year (15,152) -
EXERCISE PRICE LIFE (MONTHS) 2,814.00

Outstanding at the beginning of the year 1,982.00 to

232�837 5�00 5�00 69 Outstanding at the end of the 270,340 2,791.65 67
3,679.00
Granted during the year 92�092 5�00 5�00 93 1,982.00 to
year Exercisable at the end of the 69,530 2,182.21 45
Expired/forfeited during the year (35�646) 5�00 5�00 - 2,814.00
Exercised during the year (72�030) 5�00 5�00 - year
Outstanding at the end of the year 217�253 5�00 5�00 69
Exercisable at the end of the year 46�130 5�00 5�00 44 CATEGORY A -FAIR MARKET VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2020
SHARES RANGE OF WEIGHTED WEIGHTED AVERAGE
FOR THE YEAR ENDED 31 MARCH 2020 PARTICULARS ARISING OUT EXERCISE AVERAGE REMAINING USEFUL
OF OPTIONS PRICES EXERCISE PRICE LIFE (MONTHS)
PARTICULARS SHARESRANGE
ARISING
OFOUT OF OPTIONS
EXERCISE PRICES WEIGHTED WEIGHTED AVERAGE AVERAGEREMAINING USEFUL
1,982.00/
146,060 2,166.00 81
EXERCISE PRICE LIFE (MONTHS) 2,607.00
Outstanding at the beginning of the year Outstanding at the beginning of the year 61,700 2,814.00 2,814.00 90
Granted during the year 270�141 5�00 5�00 73 (5,000) 2,607.00 2,607.00 -
49�796 5�00 5�00 90 Granted during the year
Expired/forfeited during the year - - - -
(14�934) 5�00 5�00 - Expired/forfeited during the year
Exercised during the year 1,982.00 to
Exercised during the year 202,760 2,353.62 72
(72�166) 5�00 5�00 - 2,814.00
Outstanding at the end of the year
Outstanding at the end of the 232�837 5�00 5�00 69 Exercisable at the end of the year 35,265 1,982.00� 2,150.81 51
year
Exercisable at the end of the year 40�548 5�00 5�00 43 2,607.00
The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ₹ 1,255 and ₹ 993 per
The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ₹ 3,677 and ₹ option, respectively. The weighted average share price on the date of exercise of options during the year ended 31 March 2021 was ₹ 4,506
2,746 per option, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 and
31 March 2020 was ₹ 4,565 and ₹ 2,681 per share, respectively. The aggregate intrinsic value of options exercised during the year ended 31 March 2021 was ₹ 28. As of 31 March 2021, options outstanding had an
aggregate intrinsic value of ₹ 466 and options exercisable had an aggregate intrinsic value of ₹ 120.
The aggregate intrinsic value of options exercised during the years ended 31 March 2021 and 31 March 2020 was ₹ 328 and ₹ 193,
respectively. As of 31 March 2021, options outstanding had an aggregate intrinsic value of ₹ 980 and options exercisable had an aggregate
intrinsic value of ₹ 208.
Dr. Reddy’s Employees ADR Stock Option Plan, 2007 (the “DRL 2007 Plan”):
The Company instituted the DRL 2007 Plan for all eligible employees in pursuance of the special resolution approved by the shareholders in the
Annual General Meeting held on 27 July 2005. The DRL 2007 Plan became effective upon its approval by the Board of Directors on 22 January Outstanding at the beginning of the year 151,583 5.00 5.00 73
2007. The DRL 2007 Plan covers all employees and directors (excluding promoter directors) of DRL and its subsidiaries (collectively, Granted during the year 52,316 5.00 5.00 89
“eligible employees”). The Committee administers the DRL 2007 Plan and grants stock options to eligible employees. The Committee
Expired/forfeited during the year (19,933) 5.00 5.00 -
determines which eligible employees will receive the options, the number of options to be granted, the exercise price, the vesting period and
Exercised during the year (41,967) 5.00 5.00 -
the exercise period. The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2007 Plan
vest in periods ranging between one and four years and generally have a maximum contractual term of five years. Outstanding at the end of the year 141,999 5.00 5.00 71
Exercisable at the end of the year 15,393 5.00 5.00 41
The DRL 2007 Plan provides for option grants in two categories:

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
CATEGORY B — PAR VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2021
SHARES RANGE OF WEIGHTED WEIGHTED AVERAGE
PARTICULARS ARISING OUT EXERCISE AVERAGE REMAINING USEFUL
OF OPTIONS PRICES EXERCISE PRICE LIFE (MONTHS)

Category A: 382,695 stock options out of the total of 1,530,779 stock options reserved for grant having an exercise price equal to the fair market
value of the underlying equity shares on the date of grant; and CATEGORY B — PAR VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2020
Category B: 1,148,084 stock options out of the total of 1,530,779 stock options reserved for grant having an exercise price equal to the par value SHARES RANGE OF WEIGHTED WEIGHTED AVERAGE
of the underlying equity shares (i.e., ₹ 5 per option). PARTICULARS ARISING OUT EXERCISE AVERAGE REMAINING USEFUL
OF OPTIONS PRICES EXERCISE PRICE LIFE (MONTHS)
Outstanding at the beginning of the year 115,155 5.00 5.00 73
Granted during the year 89,282 5.00 5.00 90
Expired/forfeited during the year (18,886) 5.00 5.00 -
Exercised during the year (33,968) 5.00 5.00 -
Outstanding at the end of the year 151,583 5.00 5.00 73
Exercisable at the end of the year 14,166 5.00 5.00 44

1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.24 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.24 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED)

The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ₹ 3,631 and ₹
2,747, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 and 31 March
The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ₹ 1,255 and ₹
2020 was
994 per option, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 and 31
₹ 4,334 and ₹ 2,757, respectively.
March 2020 was ₹ 4,609 and ₹ 2,914 per share, respectively.
The aggregate intrinsic value of options exercised during the years ended 31 March 2021 and 31 March 2020 was ₹ 182 and ₹ 93, respectively.
The aggregate intrinsic value of options exercised during the years ended 31 March 2021 and 31 March 2020 was ₹ 165 and ₹ 0.35,
As of 31 March 2021, options outstanding had an aggregate intrinsic value of ₹ 641 and options exercisable had an aggregate intrinsic value of
respectively. As of 31 March 2021, options outstanding had an aggregate intrinsic value of ₹ 563 and options exercisable had an aggregate
₹ 69.
intrinsic value of ₹ 104.
Dr. Reddy’s Employees Stock Option Scheme, 2018 (the “DRL 2018 Plan”):
The Company instituted the DRL 2018 Plan for all eligible employees pursuant to the special resolution approved by the shareholders at the Valuation of stock options:
Annual General Meeting held on 27 July 2018. The DRL 2018 Plan covers all employees and directors (excluding independent and promoter The fair value of services received in return for stock options granted to employees is measured by reference to the fair value of stock options
directors) of the parent company and its subsidiaries (collectively, “eligible employees”). Upon the exercise of options granted under the granted. The fair value of stock options granted under the DRL 2002 Plan, the DRL 2007 Plan and the DRL 2018 Plan has been measured using
DRL 2018 Plan, the applicable equity shares may be issued directly by the Company to the eligible employee or may be transferred from the the Black–Scholes-Merton model at the date of the grant.
Dr. Reddy’s Employees ESOS Trust (the “ESOS Trust”) to the eligible employee. The ESOS Trust may acquire such equity shares through The Black-Scholes-Merton model includes assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates.
primary issuances by the Company and/or by way of secondary market acquisitions funded through loans from the Company. The In respect of par value options granted, the expected term of an option (or “option life”) is estimated based on the vesting term and contractual
Nomination, Governance and Compensation Committee of the Board of the parent company (the “Compensation Committee”) administers the term, as well as the expected exercise behavior of the employees receiving the option. In respect of fair market value options granted, the
DRL 2018 Plan and grants stock options to eligible employees, but may delegate functions and powers relating to the administration option life is estimated based on the simplified method. Expected volatility of the option is based on historical volatility, during a period
of the DRL 2018 Plan to the ESOS Trust. The Compensation Committee determines which eligible employees will receive the options, equivalent to the option life, of the observed market prices of the Company’s publicly traded equity shares. Dividend yield of the options is
the number of options to be granted, the exercise price, the vesting period and the exercise period. The vesting period is determined for all based on recent dividend activity. Risk-free interest rates are based on the government securities yield in effect at the time of the grant.
options issued on the date of grant. The options issued under the DRL 2018 Plan vest in periods ranging between the end of one and five These assumptions reNect management’s best estimates, but these assumptions involve inherent market uncertainties based on market
years, and generally have a maximum contractual term of five years. conditions generally outside of the Company’s control. As a result, if other assumptions had been used in the current period, stock-based
The DRL 2018 Plan provides for option grants having an exercise price equal to the fair market value of the underlying equity shares on the date compensation expense could have been materially impacted. Further, if management uses different assumptions in future periods, stock-based
of grant as follows: compensation expense could be materially impacted in future years.
The estimated fair value of stock options is recognised in the statement of profit and loss on a straight-line basis over the requisite service period
NUMBER OF SECURITIES NUMBER OF SECURITIES
PARTICULARS TO BE ACQUIRED FROM SECONDARY
TO BE
MARKET TOTAL
ISSUED BY THE COMPANY for each separately vesting portion of the award as if the award was, in-substance, multiple awards.

Options reserved against equity shares

2,500,000 1,500,000 4,000,000 The weighted average inputs used in computing the fair value of options granted were as follows:
Options reserved against ADRs - 1,000,000 1,000,000
GRANTS MADE ON 27 OCTOBER 202019 MAY 202019 MAY 2020
Total 2,500,000 2,500,000 5,000,000 PARTICULARS

As at 31 March 2021, the outstanding shares purchased from secondary market are 575,201 shares for an aggregate consideration of ₹
Expected volatility 30.81% 29.12% 30.47%
1,967. Stock option activity under the DRL 2018 Plan during the years ended 31 March 2021 and 31 March 2020 was as follows: Exercise price ₹ 5.00 ₹ 3,679.00 ₹ 5.00
Option life 2.5 Years 5.0 Years 2.5 Years
FAIR MARKET VALUE OPTIONSFOR THE YEAR ENDED 31 MARCH 2021 Risk-free interest rate 4.36% 5.67% 4.62%
SHARESRANGE OF Expected dividends
WEIGHTED WEIGHTED AVERAGE AVERAGEREMAINING USEFUL 0.49 0.68% 0.68%
PARTICULARSARISING OUTEXERCISE OF OPTIONSPRICES Grant date share price % ₹ 3,700.00 ₹ 3,700.00
EXERCISE PRICE LIFE (MONTHS)
₹ 5,099.00

2,607.00/
Outstanding at the beginning of the year 375,775 2,697.12 GRANTS MADE ON 26 JANUARY 202031 OCTOBER 201916 MAY 201916 MAY 2019
2,814.00
Granted during the year 150,740 3,679.00 PARTICULARS
75
2,607.00 to
Expired/forfeited during the year (55,335) 79.00 Expected volatility 27.00% 27.10% 28.25% 29.29%
3,6 3,679.00
Exercise price ₹ 3,031.00 ₹ 5.00 ₹ 2,814.00 ₹ 5.00
2,607.00/
Exercised during the year (85,250)
2,8 14.00 90 Option life 5.0 Years 2.5 Years 5.0 Years 2.5 Years
2,607.00 to Risk-free interest rate 6.61% 5.72% 7.14% 6.76%
Outstanding at the end of the year 385,930 2,904.51
3,679.00 Expected dividends 0.66% 0.72% 0.71% 0.71%
-
Grant date share price ₹ 3,031.00 ₹ 2,783.20 ₹ 2,801.00 ₹ 2,801.00
Exercisable at the end of the year 71,225
2,671.71
-

3,056.51 71
2,607.00/
2,665.63
2,814.00

51 Share-based payment expense

FAIR MARKET VALUE OPTIONSFOR THE YEAR ENDED 31 MARCH 2020 FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020
SHARESRANGE OFWEIGHTED WEIGHTED AVERAGE
(1)
PARTICULARS ARISING OUT EXERCISE AVERAGE REMAINING USEFUL Equity settled share-based payment expense 584 521
OF OPTIONS PRICES EXERCISE PRICE LIFE (MONTHS) Cash settled share-based payment expense
(2)
29 28
Outstanding at the beginning of the year 229,600 2,607.00 2,607.00 84 613 549
2,607.00 to
2,814.00
Granted during the year 169,900 2,817.07 90
/3,031.00
1 1
Expired/forfeited during the year (22,575) 3,031.00 2,687.84 -
Exercised during the year (1,150) 2,607.00 2,607.00 -
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
(1) As of 31 March
2021 and 31 March
2020, there was ₹
612 and ₹ 515,
respectively, of total
unrecognised
compensation cost
related to unvested
stock options. This
cost is expected to
be recognised over
a weighted-
average period of
1.95 years and
1.93 years,
respectively.
(2) Certain of the
Company’s
employees are
eligible for share-
based payment
awards that are
settled in cash.
These awards
entitle the
employees to a
cash payment, on
the exercise date,
subject to vesting
upon satisfaction of
certain service
conditions which
range from 1 to 4
years. The amount
of cash payment is
determined based
on the price of the
Company’s ADSs
at the time of
vesting. As of 31
March 2021 and 31
March 2020, there
was ₹ 22 and ₹
25, respectively, of
total unrecognised
compensation cost
related to unvested
awards. This cost
is expected to be
recognised over a
weighted-average
period of 1.82 years
and 1.88 years,
respectively. This
scheme does not
involve dealing in
or subscribing to or
purchasing
securities of the
Company, directly
or indirectly.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.25 EMPLOYEE BENEFITS (All amounts in Indian Rupees millions, except share data and where otherwise stated)

Total employee benefit expenses, including share-based payments, incurred during the years ended 31 March 2021 and 31 March 2020 2.25 EMPLOYEE BENEFITS (CONTINUED)
amounted to ₹ 22,701 and ₹ 20,302, respectively. Sensitivity Analysis:
Gratuity benefits provided by the Company AS AT 31 MARCH 2021
PARTICULARS
In accordance with applicable Indian laws, the Company has a defined benefit plan which provides for gratuity payments (the �Gratuity Defined benefit obligation without effect of projected salary growth 1�795
Plan�) and
covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or Add: Effect of salary growth 833
termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the years of Defined benefit obligation with projected salary growth 2�628
employment with the Company. Effective 1 September 1999, the Company established the Dr. Reddy’s Laboratories Gratuity Fund (the Defined benefit obligation, using discount rate minus 50 basis points 2�700
�Gratuity Fund�) to fund the Gratuity Plan. Liabilities in respect of the Gratuity Plan are determined by an actuarial valuation, based upon
Defined benefit obligation, using discount rate plus 50 basis points 2�559
which the Company makes
contributions to the Gratuity Fund. Trustees administer the contributions made to the Gratuity Fund. Amounts contributed to the Gratuity Fund
are
invested in bonds issued by the Government of India and in debt securities and equity securities of Indian Defined benefit obligation, using salary growth rate plus 50 basis points 2�698
companies.
The components of gratuity cost recognised in the statement of profit and loss for the years ended 31 March 2021 and 31 March 2020 consist of Defined benefit obligation, using salary growth rate minus 50 basis points 2�560
the following:
Summary of the actuarial assumptions: The actuarial assumptions used in accounting for the Gratuity plan are as
follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 2021 31 MARCH The assumptions used to determine benefit obligations:
2020
FOR THE YEAR ENDED FOR THE YEAR ENDED
Current service cost 281 276 PARTICULARS 31 MARCH 202131 MARCH 2020
Interest on net defined benefit liability 8 (4) Discount rate 6�00� 6�65�
Gratuity cost recognised in statement of profit and loss 289 272
Rate of compensation increase 8�00� 7�50�
Details of the employee benefits obligations and plan assets are provided
below: The assumptions used to determine gratuity cost:
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020
2�628 2�349
Present value of funded obligations
Fair value of plan assets (1�997) (2�160) Discount rate 6�65� 7�45�
Net defined benefit liability recognised 631 189 8% per annum for the
Rate of compensation increase 7�50� first year and 9% per
Details of changes in the present value of defined benefit obligations are as annum thereafter
follows:
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 Contributions: The Company expects to contribute ₹ 317 to the Gratuity Plan during the year ending 31 March 2021.
PARTICULARS
Disaggregation of plan assets: The Gratuity Plan’s weighted-average asset allocation at 31 March 2021 and 31 March 2020, by asset category, was
2�349 2�200 as follows:
Defined benefit obligations at the beginning of the year
Current service cost 281 276
Interest on defined obligations 140 152 AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Re-measurements due to: Funds managed by insurers 100� 99�
Actuarial loss/(gain) due to change in financial assumptions 153 (96 Others 0� 1�
Actuarial loss/(gain) due to demographic assumptions (26) (48)
Actuarial loss/(gain) due to experience changes 51 59 The expected future cash Nows in respect of gratuity as at 31 March 2021 were as follows:
Benefits paid (345) (194) PARTICULARS AMOUNT
Liabilities assumed/(transferred)* 25 - Expected contributions
Defined benefit obligations at the end of the year 2�628 2�349 During the year ended 31 March 2022 (estimated) 317
* Liabilities assumed/(transferred) of ₹ 25 comprises of :
Expected future benefit payments
a) ₹ 70 increase in liability on account of acquisition of employees pursuant to the Business Transfer Agreement with Wockhardt limited. Refer to Note 2.38 of these standalone financial statements
31 March 2022 452
for further details. 31 March 2023 390
b) ₹ 45 transfer of liability on account of restructuring of the pharmaceutical services business between the parent company and its subsidiary.
31 March 2024 361
31 March 2025 339
Details of changes in the fair value of plan assets are as follows: 31 March 2026 308
AS AT
PARTICULARS AS AT Thereafter 1�971
31 MARCH 2021 31 MARCH 2020 Provident fund benefits
Fair value of plan assets at the beginning of the year
2�160 2�174 Certain categories of employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and
Employer contributions 25 14 employer each make monthly contributions to a government administered fund equal to 12% of the covered employee’s qualifying salary.
Interest on plan assets 132 156 The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed ₹ 854 and ₹ 780 to the
Re-measurements due to: provident fund plan during the years ended 31 March 2021 and 31 March 2020, respectively.
Return on plan assets excluding interest on plan assets (1) 10 Superannuation benefits
Benefits paid (345) (194) Certain categories of employees of the Company participate in superannuation, a defined contribution plan administered by the Life Insurance
1 1
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Assets acquired / (transferred)* 26 - Corporation of India. The Company makes monthly contributions based on a specified percentage of each covered employee’s salary.
The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed ₹ 84 and ₹ 82 to
Plan assets at the end of the year 1�997 2�160
the superannuation plan during the years ended 31 March 2021 and 31 March 2020, respectively.
* Assets acquired/(transferred) of ₹ 26 comprise of:
Compensated absences
a) ₹ 70 increase in asset on account of acquisition of employees pursuant to the Business Transfer Agreement with Wockhardt limited. Refer to Note 2.38 of these financial statements for
The Company provides for accumulation of compensated absences by certain categories of its employees. These employees can carry forward a
further details.
b) ₹ 44 transfer of asset on account of restructuring of the pharmaceutical services business between the parent company and its subsidiary. portion of the unutilised compensated absences and utilise them in future periods or receive cash in lieu thereof as per the Company’s
policy. The Company records a liability for compensated absences in the period in which the employee renders the services that increases this
entitlement. The total liability recorded by the Company towards this obligation was ₹ 790 and ₹ 902 as at 31 March 2021 and 31 March 2020,
respectively.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.26 INCOME TAXES 2.26 INCOME TAXES (CONTINUED)

(a) Income tax expense/ (benefit) recognised in the statement of profit and loss (e) Deferred tax assets and liabilities
Income tax expense recognised in the statement of profit and loss consists of the following: The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities and a description of the items that created
FOR THE YEAR ENDED FOR THE YEAR ENDED these differences is given below:
PARTICULARS 31 MARCH 2021 31 MARCH AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
2020 PARTICULARS
Current taxes 5�401 4�839
Deferred tax assets/(liabilities):
Deferred taxes expense/(benefit) 3�297 (6�458)
Minimum Alternate Tax* 4�749 6�247
Total income tax expense recognised in the statement of profit and loss 8�698 (1�619)
Trade receivables 255 243
(b) Income tax expense/(benefit) recognised directly in equity Operating tax loss/capital loss 355 1�651
Income tax expense/(benefit) recognised directly in equity consist of the following: Current liabilities and provisions 462 597
Loans (65) (65)
FOR THE YEAR ENDED FOR THE YEAR ENDED Property , plant and equipment (3�091) (2�331)
PARTICULARS 31 MARCH 2021 31 MARCH
2020 Investments (117) (213)
Tax effect on effective portion of change in fair value of cash Now hedges 346 (259) Net deferred tax assets/(Liabilities) 2�548 6�129
Tax effect on actuarial gains/losses on defined benefit obligations (62) 33
As per Indian tax laws, companies are liable for a Minimum Alternate Tax (“MAT” tax) when current tax, as computed under the provisions of the Income Tax Act, 1961 (“Tax Act”), is
Total income tax expense/(benefit) recognised in the equity 284 (226) * determined to be below the MAT tax computed under section 115JB of the Tax Act. If in any year the Company pays liability as per MAT, then it is entitled to claim credit of MAT paid over
and above the normal tax liability in the subsequent years. The MAT credit is eligible to be carried forward and set�off in the future against the current tax liabilities over a period of 15
years starting from the succeeding fiscal year in which such credit was generated.
(c) Reconciliation of effective tax rate
The following is a reconciliation of the Company’s effective tax rates for the years ended 31 March 2021 and 31 March 2020: In assessing whether the deferred income tax assets will be realised, management considers whether some portion or all of the deferred income tax
FOR THE YEAR ENDED FOR THE YEAR ENDED assets will not be realised. The ultimate realisation of the deferred income tax assets and tax loss carry forwards is dependent upon the
PARTICULARS 31 MARCH 2021 31 MARCH generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the
2020 scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategy in making this assessment. Based on the
Profit before income taxes 30�562 27�758 level of historical taxable income and projections of future taxable income over the periods in which the deferred tax assets are deductible,
Enacted tax rate in India 34�94� 34�94� management believes that the Company will realise the benefits of those recognised deductible differences and tax loss carry forwards.
Computed expected tax expense 10�678 9�699
Recoverability of deferred tax assets is based on estimates of future taxable income. Any changes in such future taxable income would impact the
Effect of� recoverability of deferred tax assets.
Unrecognised deferred tax assets/(recognition of previously unrecognised
deferred tax assets), net - (6�640)
(f) Movement in deferred tax assets and liabilities during the years ended 31 March 2021 and 31 March 2020
Differential Tax rate impact on dividend income received from Subsidary/JV
(87) (68) RECOGNISED IN THE STATEMENT
AS AT OF PROFIT AND LOSS
1 APRIL 2020 RECOGNISEDAS AT IN EQUITY31 MARCH 2021
outside India PARTICULARS
Income exempt from income taxes (1�504) (811)
(1)
Incremental deduction allowed for research and development costs - (1�241) Deferred tax assets/(liabilities)
Income from sale of capital assets - (2�620) Minimum Alternate Tax 6�247 �1�498� - 4�749
Other items (389) 62 Trade receivables 243 12 - 255
Income tax expense 8�698 (1�619) Operating tax loss/capital loss 1�651 (1�296) - 355
Effective tax rate 28�46� (5�83)� Current liabilities and provisions 597 149 (284) 462
(1) India’s Finance Act, 2016 incorporated an amendment that reduces the weighted deduction on eligible research and development expenditure in a phased manner from 200% to 150% Loans �65� - - �65�
commencing from 1 April 2017, and from 150% to 100% effective from 1 April 2020�
Property , plant and equipment (2�331) (760) - (3�091)
Investments (213) 96 - (117)
The Company's average effective tax rate for the years ended 31 March 2021 and 31 March 2020 were 28.46� and (5.83)�, respectively.
Net deferred tax assets/(liabilities) 6�129 (3�297) (284) 2�548
The Company's effective tax rate for the year ended 31 March 2020 was lower as compared to the year ended 31 March 2021 primarily
on account of:
• de-recognition of deferred tax asset during the year ended 31 March 2021 due to non-availability of depreciation on goodwill pursuant to an
amendment to section 2(11) of the Income Tax Act in the Finance Act, 2021; RECOGNISED IN THE STATEMENT
AS AT OF PROFIT AND LOSS
1 APRIL 2019 RECOGNISEDAS AT IN EQUITY31 MARCH 2020
PARTICULARS
• recognition of a deferred tax asset related to the Minimum Alternate Tax (“MAT”) credits during the fiscal year ended 31 March 2020.
• Weighted deduction on eligible research and development expenditure in Dr. Reddy's laboratories limited, India for the year
Deferred tax assets/(liabilities)
ended 31 March 2020.
Minimum Alternate Tax 1�630 4�617 - 6�247
• income from sale of capital assets during the year ended 31 March 2020, which was set off against the carried forward capital loss.
Trade receivables 245 (2) - 243
Operating tax loss/capital loss - 1�651 - 1�651
Current liabilities and provisions 266 105 226 597
(d) Unrecognised deferred tax assets Loans �65� - - �65�
mmarised below:
The details of unrecognised deferred tax assets are su Property , plant and equipment (2�549) 218 - (2�331)
AS AT AS AT Investments (82) (131) - (213)
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Net deferred tax assets/(liabilities) (555) 6�458 226 6�129
Taxable/Deductible temporary differences, net - -
(g) Uncertain tax positions
The Company is contesting various disallowances by the Indian Income Tax authorities. The associated tax impact for disallowances being more
likely than not to be accepted by Tax authorities is ` 2,291, and accordingly, no provision is made in these financial statements as of 31 March
2021.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.27 FINANCIAL INSTRUMENTS (All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.27 FINANCIAL INSTRUMENTS (CONTINUED)

Non-derivative financial instruments
Non-derivative financial instruments consist of investments in mutual funds, bonds, equity and debt securities, trade receivables, cash and cash As at 31 March 2021 and 31 March 2020, the changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for
equivalents, loans and borrowings, and trade payables. derivatives designated in hedge relationships and other financial instruments recognised at fair value.
Derivative financial instruments Derivative Financial instruments
The Company uses derivative contracts like forwards, options and interest rate swaps to mitigate its risk of changes in foreign currency The Company had a derivative financial asset and derivative financial liability of ₹ 915 and ₹ 306, respectively, as at 31 March 2021 as
exchange rates and interest rates. compared to derivative financial asset and derivative financial liability of ₹ 783 and ₹ 1,524, respectively, as at 31 March 2020 towards these
derivative financial instruments.
The carrying value and fair value of financial instruments as at 31 March 2021 and 31 March 2020 were as follows:
Details of gain/(loss) recognised in respect of derivative contracts
The following table presents details in respect of the gain/(loss) recognised in respect of derivative contracts during the applicable year ended:
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS FOR THE YEAR ENDED 31 MARCH
FOR THE
2021YEAR ENDED 31 MARCH 2
TOTAL TOTAL FAIR VALUE/ TOTAL TOTAL FAIR VALUE/ PARTICULARS
CARRYING VALUE AMORTISED COST CARRYING VALUE AMORTISED COST
Net gain/ (loss) recognised as part of statement of profit and loss in
Financial assets
respect of foreign exchange derivative contracts and cross currency interest rate swaps contracts 2�377 (986)
Cash and cash equivalents 13�063 13�063 392 392
Net gain/(loss) recognised in equity in respect of hedges of highly probable
Investments* 49�894 49�894 54�855 54�855
forecast transactions, net of amounts reclassified from equity and recognised
Trade receivables 40�918 40�918 48�124 48�124 987 (743)
as component of revenue
Loans 12 12 12 12
Derivative instruments 915 915 783 783 Net gain/(loss) reclassified from equity and recognised as component
354 (34)
of revenue occurrence of forecasted transaction
Other financial assets
Total 1�021 1�021 2�362 2�362
105�823 105�823 106�528 106�528
Financial liabilities The net carrying amount of the Company’s “hedging reserve” as a component of equity before adjusting for tax impact was a gain of ₹ 452 as at
Trade payables 31 March 2021, as compared to a loss of ₹ 537 as at 31 March 2020.
13�364 13�364 10�684 10�684
Long-term borrowings 177 177 193 193 Outstanding foreign exchange derivative contracts
Short-term borrowing 11�809 11�809 10�436 10�436 The following table gives details in respect of the notional amount of outstanding foreign exchange derivative contracts as of 31 March 2021:
Derivative instruments 306 306 1�524 1�524 CROSS AMOUNTS IN BUY/SELL
Other financial liabilities 12�169 12�169 13�928 13�928 CATEGORY INSTRUMENT CURRENCY
(1)
(1)
CURRENCY MILLIONS
Total 37�825 37�825 36�765 36�765 Forward contract AUD INR AUD 7 Sell
* Interest accrued but not due on investments is included in other financial assets.
Forward contract CHF INR CHF 200 Sell
Forward contract GBP INR GBP 8 Sell
Fair value hierarchy Hedges of recognised assets and Forward contract RUB INR RUB 2,799 Sell
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. liabilities Forward contract US $ INR US $ 353 Sell
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or Forward contract US $ MXN US $ 10 Buy
indirectly (i.e., derived from prices). Forward contract US $ UAH US $ 9 Buy
Forward contract ZAR INR ZAR 111 Sell
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). The
Forward contract AUD INR AUD 10 Sell
following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2021: Hedges of highly probable forecasted Forward contract RUB INR RUB 6,850 Sell
transactions Option contract US $ INR US $ 645 Sell
PARTICULARS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Forward contract ZAR INR ZAR 148 Sell
FVTPL - Financial asset - Investments in units of mutual funds 12�048 - - 12�048
FVTPL - Financial asset – Investment in limited liability partnership firm - - 400 400
FVTPL - Financial asset - Investments in equity securities - - 1 1 The following table gives details in respect of the notional amount of outstanding foreign exchange derivative contracts as of 31 March 2020:
FVTOCI - Financial asset -Investment in equity securities 9 - - 9 CROSS AMOUNTS IN
CATEGORY INSTRUMENT CURRENCY
(1)
(1)
BUY/SELL
Derivative financial instruments – net gain�(loss) on outstanding foreign CURRENCY MILLIONS
- 609 - 609
exchange forward, option and swap contracts and interest rate swap contracts (1) Forward contract US$ INR US$ 148 Sell
Contingent consideration pursuant to the Business Transfer Agreement with Forward contract RUB INR RUB 5,968 Sell
- - 420 420
Wockhardt Limited (Refer to Note 2.38 for details) Forward contract GBP INR GBP 9 Sell
Hedges of recognised assets and Forward contract AUD INR AUD 4 Sell
liabilities Forward contract CHF INR CHF 200 Sell
The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2020: Forward contract ZAR INR ZAR 71 Sell
Option contract US $ INR US$ 140 Sell
PARTICULARS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Hedges of highly probable forecasted
FVTPL - Financial asset - Investments in units of mutual funds 11�370 - - 11�370 Option contract US$ INR US$ 270 Sell
transactions
FVTPL - Financial asset - Investments in equity securities - - 1 1
FVTOCI - Financial asset - Investment in equity securities 11 - - 11 (1) “INR” means Indian Rupees, “US$” means United States dollars, “RUB” means Russian roubles. “GBP” means U.K. pounds sterling, “AUD” means Australian dollars, “CHF” means Swiss francs,
“ZAR” means South Aftrican rands, “MXN” means Mexican Peso and “UAH” means Ukrainian Hryvnia.
FVTOCI - Financial asset - Investment in market linked debenturesn 1�993 - - 1�993
Derivative financial instruments - net gain�(loss) on outstanding foreign
(1) - (741) - (741)
exchange forward, option and swap contracts and interest rate swap contracts
(1)
The Company enters into derivative financial instruments with various counterparties, principally financial institutions and banks. Derivatives valued using valuation techniques with market
observable inputs are mainly interest rate swaps, foreign exchange forward option and swap contracts. The most frequently applied valuation techniques include forward pricing, swap
models and Black-Scholes-Merton models (for option valuation), using present value calculations. The models incorporate various inputs including foreign exchange forward rates, interest
rate curves and forward rate curves.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.27 FINANCIAL INSTRUMENTS (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.28 FINANCIAL RISK MANAGEMENT (CONTINUED)

The table below summarises the periods when the cash Nows associated with highly probable forecast transactions that are classified as cash
Now hedges are expected to occur: The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue
to Nuctuate substantially in the future. Consequently, the Company uses both derivative and non-derivative financial instruments, such as
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 foreign exchange forward contracts, option contracts, currency swap contracts and foreign currency financial liabilities, to mitigate the risk of
PARTICULARS
changes in foreign currency exchange rates in respect of its highly probable forecast transactions and recognised assets and liabilities.
Cash Nows in US� The details in respect of the outstanding foreign exchange forward and option contracts are given in note 2.27 above.
In respect of the Company’s forward contracts and option contracts, a 10% decrease/increase in the respective exchange rates of each of the
Not later than one month 3�656 2�648 currencies underlying such contracts would have resulted in:
Later than one month and not later than three months 7�311 5�297 • a ₹ 4,895/(4,267) increase/(decrease) in the Company’s hedging reserve and a ₹ 5,063/(5,063) increase/(decrease) in the Company’s net profit
Later than three months and not later than six months 12�063 7�945 from such contracts, as at 31 March 2021;
Later than six months and not later than one year 24�126 4�540 • a ₹ 1,303/(1,837) increase/(decrease) in the Company’s hedging reserve and a ₹ 4,195/(4,246) increase/(decrease) in the Company’s net
profit from such contracts, as at 31 March 2020;
47�156 20�430
Cash Nows in Russian Roubles The following table analyses foreign currency risk from non-derivative financial instruments as at 31 March 2021:
Not later than one month 437 - (All figures in equivalent Indian Rupees millions)
Later than one month and not later than three months 874 - RUSSIAN
(1)
Later than three months and not later than six months 1�748 - PARTICULARS US$ EURO ROUBLES OTHERS TOTAL
Later than six months and not later than one year 3�593 - Assets:
6�651 - Cash and cash equivalents 12�400 5 29 73 12�507
Cash Nows in South African Rands Trade receivables 28�132 1�692 5�391 2�388 37�603
Not later than one month 61 - Investments - - - 15�511 15�511
Later than one month and not later than three months 121 - Other financial assets 30 18 3 12 63
Later than three months and not later than six months 182 - Total 40�562 1�715 5�423 17�984 65�684
Later than six months and not later than one year 364 - Liabilities:
728 - Trade payables 1�658 390 - 643 2�691
Cash Nows in Australian Dollars Long-term borrowings - - 15 4 19
Not later than one month 46 - Short-term borrowings - - - - -
Later than one month and not later than three months 92 - Other financial liabilities 615 209 2�521 658 4�003
Later than three months and not later than six months 139 - Total 2�273 599 2�536 1�305 6�713
Later than six months and not later than one year 277 -

555 - The following table analyses foreign currency risk from non-derivative financial instruments as at 31 March 2020:
(All figures in equivalent Indian Rupees millions)
Hedges of changes in the interest rates:
Consistent with its risk management policy, the Company uses interest rate swaps (including cross currency interest rate swaps) to mitigate the of the Company’s revenues are in these foreign currencies, while a significant portion of its costs are in Indian rupees. As a result, if the value of the
risk of changes in interest rates. The Company does not use them for trading or speculative purposes. Indian rupee appreciates relative to these foreign currencies, the Company’s revenues measured in Indian rupees may decrease.

A net gain/loss of ₹ Nil, representing the changes in the fair value of interest rate swaps used as hedging instrument in a cash Now
hedge is recognised in the statement of other comprehensive income. For balance interest rate swaps, the changes in fair value (including
cross currency interest rate swaps) are recognised as part of the foreign exchange gain and losses and finance costs. Accordingly the Company
has recorded, as part of statement of profit and loss, a net gain of ₹ 164 and a net gain of ₹ 36 for the year ended 31 March 2021 and 31
March 2020 respectively.
The Company had outstanding cross currency swap against INR borrowing of ` 7,240 as at 31 March 2021 and ` Nil as on 31 March 2020. The
swap hedges the principal repayment of underlying INR liability and transforms it into USD principal repayment liability.

2.28 FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk
management focus is to minimise potential adverse effects of market risk on its financial performance. The Company’s risk management
assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and
controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are
reviewed regularly to reNect changes in market conditions and the Company’s activities. The Board of Directors and the Audit Committee is
responsible for overseeing the Company’s risk assessment and management policies and processes.

a. Market risk
Market risk is the risk of loss of future earnings, fair values or future cash Nows that may result from adverse changes in market rates and
prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a
result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign
currency receivables and payables and all short-term and long-term debt. The Company is exposed to market risk primarily related to foreign
exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a function of
investing and borrowing activities and revenue generating and operating activities in foreign currencies.

Foreign exchange risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in United
States dollars, Russian roubles, U.K pounds sterling and Euros) and foreign currency borrowings (in United States dollars). A significant portion

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 Dr. Reddy’s Laboratories Company Overview
US$ Statutory Reports RUSSIAN ROUBLES
Financial Annual Report 2020-
PARTICULARS EURO OTHERS (1) TOTAL

Assets:
Cash and cash equivalents 219 - 4 69 292
Trade receivables 35�896 610 7�318 1�325 45�149
Investments - - - 15�658 15�658
Other financial assets 716 19 3 9 747
Total 36�831 629 7�325 17�061 61�846
Liabilities:
Trade payables 2�632 384 - 165 3�181
Long-term borrowings - - 1 33 34
Short-term borrowings 6,432 - - - 6,432
Other financial liabilities 6,127 194 1,647 234 8,202
Total 15,191 578 1,648 432 17,849
(1) Others include currencies such as Mexican pesos, U.K pounds sterling and Swiss francs.

For the years ended 31 March 2021 and 31 March 2020, every 10% depreciation/appreciation in the exchange rate between the Indian
rupee and the respective currencies for the above mentioned financial assets/liabilities would affect the Company�s net profit by `
5,897 and ` 4,400, respectively.
Interest rate
risk As of 31 March 2021, the Company had loans with Noating interest rates as follows: ₹ 8,800 of loans carrying a Noating interest rate
of 3 Months India Treasury Bill plus 30 bps. As of 31 March 2020, the Company had loans with Noating interest rates as follows: ₹ 10,215
of loans carrying a Noating interest rate of 1 Month LIBOR plus 12.5 bps to 1 Month LIBOR plus 82.7 bps and ₹ 4,000 of loans carrying a
Noating interest rate of 1 Month India Treasury Bill plus 60 bps. These loans expose the Company to risk of changes in interest rates. The
Company’s treasury department monitors the interest rate movement and manages the interest rate risk based on its policies, which
include entering into interest rate swaps as considered necessary.
For details of the Company’s short-term and long-term loans and borrowings, including interest rate profiles, refer note 2.9A and 2.9B of these
financial statements.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.28 FINANCIAL RISK MANAGEMENT (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.28 FINANCIAL RISK MANAGEMENT (CONTINUED)

For the years ended 31 March 2021 and 31 March 2020, every 10% increase or decrease in the Noating interest rate component (i.e., Treasury
bill) applicable to its loans and borrowings would affect the Company’s net profit by ₹ 29 and ₹ 27. As at 31 March 2020, the Company had working capital of ₹ 59,262, including cash and cash equivalents of ₹ 392, investments in term deposits
The carrying value of the Company’s borrowings, interest component of which designated in a cash Now hedge was ₹ Nil as of 31 March 2021 with banks (i.e., deposits having original maturities of more than 3 months) of ₹ 5,003, investments in bonds of ₹ 1,851, investment in
and 31 March 2020. commercial paper of ₹ 967, investments in marked linked debentures of ₹ 1,993 and investments in mutual funds of ₹ 11,370.

The Company’s investments in term deposits (i.e, certificates of deposit) with banks and short-term liquid mutual funds are for short durations, The table below provides details regarding the contractual maturities of significant financial liabilities (other than long-term borrowings and
and therefore do not expose the Company to significant interest rates risk. obligations under leases, which have been disclosed in note 2.9 A to these financial statements) as at 31 March 2021:

Commodity rate risk PARTICULARS 2022 2023 2024 2025 THEREAFTER TOTAL
Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active
Trade payables 13�364 - - - - 13�364
pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products,
Short-term borrowings 11�809 - - - - 11�809
whose prices may Nuctuate significantly over short periods of time. The prices of the Company’s raw materials generally Nuctuate in line with
commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more Other financial liabilities 12�169 - - - - 12�169
volatile. Cost of raw materials forms the largest portion of the Company’s operating expenses. Commodity price risk exposure is evaluated Derivative financial instruments � liabilities 306 - - - - 306
and managed through operating procedures and sourcing policies. As of 31 March 2021, the Company had not entered into any material
derivative contracts to hedge exposure to Nuctuations in commodity prices. The table below provides details regarding the contractual maturities of significant financial liabilities (other than long-term loans, borrowings and
b. Credit risk obligations under finance leases, which have been disclosed in note 2.9 A to these financial statements) as at 31 March 2020:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company’s receivables from customers and investment securities. The Company establishes PARTICULARS 2021 2022 2023 2024 THEREAFTER TOTAL
an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables
Trade payables 10�684 - - - - 10�684
and investments.
Short-term borrowings 10�436 - - - - 10�436
Trade and other receivables
Other financial liabilities 13�928 - - - - 13�928
The Company’s exposure to credit risk is inNuenced mainly by the individual characteristics of each customer. The demographics of the
customer, including the default risk of the industry and country in which the customer operates, also has an inNuence on credit risk Derivative financial instruments � liabilities 1�524 - - - - 1�524
assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness
of customers to which the Company grants credit terms in the normal course of business.
Investments The 2.29 CONTINGENT LIABILITIES AND COMMITMENTS
Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating.
A. Contingent liabilities (claims against the Company not acknowledged as debts)
The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of
The Company is involved in disputes, lawsuits, claims, governmental and/or regulatory inspections, inquiries, investigations and proceedings,
exposures to specific industry sectors or specific country risks.
including patent and commercial matters that arise from time to time in the ordinary course of business. The more significant matters are
Details of financial assets � not due� past due and impaired discussed below. Most of the claims involve complex issues. Often, these issues are subject to uncertainties and therefore the probability of a
None of the Company’s cash equivalents, including term deposits (i.e., certificates of deposit) with banks, were past due or impaired as loss, if any, being sustained and an estimate of the amount of any loss is difficult to ascertain. Consequently, for a majority of these claims, it is
at 31 March 2021. The Company’s credit period for trade receivables payable by its customers generally ranges from 20 - 180 days. not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings.
This is due to a number of factors, including: the stage of the proceedings (in many cases trial dates have not been set) and the overall length
The ageing of trade receivables is given below: and extent of pre-trial discovery; the entitlement of the parties to an action to appeal a decision; clarity as to theories of liability; damages and
governing law; uncertainties in timing of litigation; and the possible need for further legal proceedings to establish the appropriate amount of
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 damages, if any. In these cases, the Company based on internal and external legal advice discloses information with respect to the nature and
PARTICULARS
facts of the case.
The Company also believes that disclosure of the amount sought by plaintiffs, if that is known, would not be meaningful with respect to those legal
Neither past due nor impaired 30�625 38�935 proceedings.
Past due but not impaired Although there can be no assurance regarding the outcome of any of the legal proceedings or investigations referred to in this Note, the Company
Less than 365 days 10�444 9�321 does not expect them to have a materially adverse effect on its financial position, as it believes that the likelihood of loss in excess of amounts
More than 365 days 289 314 accrued (if any) is not probable. However, if one or more of such proceedings were to result in judgements against the Company, such judgements
ƇƄƁƆƈƋ ƇƋƁƈƊƃ could be material to its results of operations in a given period.
Less: Allowance for credit losses (440) (446) (i) Product and patent related matters
Total 40�91 48�12 Matters relating to National Pharmaceutical Pricing
8 4 Authority 1RUǁR[DFiQ, IQGiD OiWiJDWiRQ
Refer note 2.5 B of these financial statements for the activity in the allowance for credit The Company manufactures and distributes NorNoxacin, a formulations product, and in limited quantities, the active pharmaceutical
losses. ingredient norNoxacin. Under the Drugs (Prices Control) Order (the “DPCO”), the National Pharmaceutical Pricing Authority (the
“NPPA”) established by the Government of India had the authority to designate a pharmaceutical product as a “specified product” and fix
Loans and advances the maximum
Loans and advances are predominantly given to subsidiaries for the purpose of working capital and other business requirements. commercial paper of ₹ Nil, investments in marked linked debentures of ₹ Nil and investments mutual funds of ₹ 12,048.
Refer note 2.5 C of these financial statements for the activity in the allowance for doubtful advances.
Other than trade receivables and loans and advances, the Company has no significant class of financial assets that is past due but not impaired.
c. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its
liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.
As at 31 March 2021 and 31 March 2020, the Company had uncommitted lines of credit from banks of ₹ 18,361 and ₹ 20,743 respectively.
As at 31 March 2021, the Company had working capital of ₹ 63,839, including cash and cash equivalents of ₹ 13,063, investments in term
deposits with banks (i.e., deposits having original maturities of more than 3 months) of ₹ 3,402, investments in bonds of ₹ 522, investment in
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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
selling price for such product. In 1995, the NPPA issued a notification and designated NorNoxacin as a “specified product” and fixed the
maximum selling price. In 1996, the Company filed a statutory Form III before the NPPA for the upward revision of the maximum selling
price and a writ petition in the Andhra Pradesh High Court (the “High Court”) challenging the validity of the designation on the grounds
that the applicable rules of the DPCO were not complied with while fixing the maximum selling price.
The High Court had previously granted an interim order in favour of the Company; however it subsequently dismissed the case in April 2004.
The Company filed a review petition in the High Court in April 2004 which was also dismissed by the High Court in October 2004.
Subsequently, the Company appealed to the Supreme Court of India, New Delhi (the “Supreme Court”) by filing a Special Leave Petition.
During the year ended 31 March 2006, the Company received a notice from the NPPA demanding the recovery of the price charged by the
Company for sales of NorNoxacin in excess of the maximum selling price fixed by the NPPA, which was ₹ 285 including interest.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.29 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.29 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

The Company filed a writ petition in the High Court challenging this demand order. The High Court admitted the writ petition and granted
an interim order, directing the Company to deposit 50% of the principal amount claimed by the NPPA, which was ₹ 77. The Company The First Pricing Complaint was removed to the U.S. District Court for the Eastern District of Pennsylvania (the “E.D.P.A. Federal Court”)
deposited this amount with the NPPA in November 2005. In February 2008, the High Court directed the Company to deposit an additional and, pending the outcome of the First Pricing Complaint, the Second Pricing Complaint was stayed. On 25 September 2017, the E.D.P.A.
amount of Federal Court dismissed all the claims of the plaintiffs in the First Pricing Complaint and denied leave to amend such complaint as futile.
₹ 30, which was deposited by the Company in March 2008. In November 2010, the High Court allowed the Company’s application to Subsequent to this decision, the plaintiffs’ right to appeal the dismissal of the First Pricing Complaint expired.
include additional legal grounds that the Company believed strengthened its defense against the demand. For example, the
Company added as grounds that trade margins should not be included in the computation of amounts overcharged, and that it was Further, on 17 November 2016, certain class action complaints were filed against the Company and a number of other
necessary for the NPPA to set the active pharmaceutical ingredient price before the process of determining the ceiling on the pharmaceutical companies as defendants in the E.D.P.A. Federal Court. Subsequently, these complaints were consolidated into one
formulation price. In October 2013, the Company filed an additional writ petition before the Supreme Court challenging the inclusion amended complaint as part of a multi-district, multi product litigation pending with the E.D.P.A. Federal Court. These complaints allege that
of NorNoxacin as a “specified product” under the DPCO. In January 2015, the NPPA filed a counter affidavit stating that the inclusion of the Company and the other named defendants have engaged in a conspiracy to fix prices and to allocate bids and customers in the sale of
NorNoxacin was based upon the recommendation of a committee consisting of experts in the field. On 20 July 2016, the Supreme pravastatin sodium tablets and divalproex sodium extended-release tablets in the United States.
Court remanded the matters concerning the inclusion of NorNoxacin as a “specified product” under the DPCO back to the High Court
In March 2017, plaintiffs agreed by stipulation to dismiss Dr. Reddy’s Laboratories Inc. and Dr. Reddy’s Laboratories Limited from the
for further proceedings. During the three months ended 30 September 2016, the Supreme Court dismissed the Special Leave Petition
actions related to pravastatin sodium tablets without prejudice. The Company denies any wrongdoing and intends to vigorously defend
pertaining to the fixing of prices for NorNoxacin formulations.
against these allegations.
During the three months ended 31 December 2016, a writ petition pertaining to NorNoxacin was filed by the Company with the Delhi High
In response to the consolidated new complaint, the Company filed a motion to dismiss in October 2017. The plaintiffs filed opposition to the
Court. The matter has been adjourned to 29 July 2021 for hearing.
motion to dismiss in December 2017 and a reply was filed by the Company in January 2018. In October 2018, the Court denied the motion
Based on its best estimate, the Company has recorded a provision for potential liability for sale proceeds in excess of the notified to dismiss on the grounds that the allegations pled leave open the possibility of conspiracy. Therefore, discovery will proceed to look into
selling prices, including the interest thereon, and believes that the likelihood of any further liability that may arise on account of penalties this possibility.
pursuant to this litigation is not probable.
The Company believes that the asserted claims are without merit and intends to vigorously defend itself against the allegations. Also any
Litigation relating to Cardiovascular and Anti-diabetic formulations liability that may arise on account of these claims is unascertainable. Accordingly, no provision was made in the financial statements of the
In July 2014, the NPPA, pursuant to the guidelines issued in May 2014 and the powers granted by the Government of India under the Company.
Drugs (Price Control) Order, 2013, issued certain notifications regulating the prices for 108 formulations in the cardiovascular and
(i) Civil litigation with Mezzion
antidiabetic therapeutic areas. The Indian Pharmaceutical Alliance (“IPA”), in which the Company is a member, filed a writ petition in the
On 13 January 2017, Mezzion Pharma Co. Ltd. and Mezzion International LLC (collectively, “Mezzion”) filed a complaint in the New Jersey
Bombay High Court challenging the notifications issued by the NPPA on the grounds that they were ultra vires, ex facie and ab initio void.
Superior Court against the Company and its wholly owned subsidiary in the United States. The complaint pertains to the production
The Bombay High Court issued an order to stay the writ in July 2014. On 26 September 2016, the Bombay High Court dismissed the writ
and supply of the active pharmaceutical ingredient (“API”) for udenafil (a patented compound) and an udenafil finished dosage product
petition filed by the IPA and upheld the validity of the notifications�orders passed by the NPPA in July 2014. Further, on 25 October 2016,
during a period from calendar years 2007 to 2015. Mezzion alleges that the Company failed to comply with the U.S. FDA’s current Good
the IPA filed a Special Leave Petition with the Supreme Court, which was dismissed by the Supreme Court.
Manufacturing Practices (“cGMP”) at the time of manufacture of the API and finished dosage forms of udenafil and, consequently, that this
During the three months ended 31 December 2016, the NPPA issued show-cause notices relating to allegations that the Company exceeded resulted in a delay in the filing of a NDA for the product by Mezzion. The Company filed a motion to dismiss Mezzion’s complaint on
the notified maximum prices for 11 of its products. The Company has responded to these notices. the technical grounds that the Court lacks jurisdiction over the Company. In January 2018, the Court denied the Company’s motion
to dismiss the complaint on the jurisdictional matter. The Company’s interlocutory appeal of said denial was also denied. The case is
On 20 March 2017, the IPA filed an application before the Bombay High Court for the recall of the judgement of the Bombay High Court continuing in pretrial discovery.
dated 26 September 2016. This recall application filed by the IPA was dismissed by the Bombay High Court on 4 October 2017.
Further, on 13 December 2017, the IPA filed a Special Leave Petition with the Supreme Court for the recall of the judgement of the The Company denies any wrongdoing or liability in this regard, and intends to vigorously defend against the claims asserted in
Bombay High Court dated 4 October 2017, which was dismissed by Supreme Court on 10 January 2018. Mezzion’s complaint. Any liability that may arise on account of this claim is unascertainable. Accordingly, no provision was made in
the financial statements of the Company.
During the three months ended 31 March 2017, the NPPA issued notices to the Company demanding payments relating to the
foregoing products for the allegedly overcharged amounts, along with interest. On 13 July 2017, in response to a writ petition which the (ii) Securities Class Action Litigation
Company had filed, the Delhi High Court set aside all the demand notices of the NPPA and directed the NPPA to provide a personal On 25 August 2017, a securities class action lawsuit was filed against the Company, its Chief Executive Officer and its Chief Financial Officer
hearing to the Company and pass a speaking order. A personal hearing in this regard was held on 21 July 2017. On 27 July 2017, the in the United States District Court for the District of New Jersey. The Company’s Co-Chairman, its Chief Operating Officer,
NPPA passed a speaking order along with the demand notice directing the Company to pay an amount of ₹ 776. On 3 August 2017, the and Dr. Reddy’s Laboratories, Inc., were also subsequently named as defendants in the case. The operative complaint alleges that the
Company filed a writ petition challenging the speaking order and the demand notice. Upon hearing the matter on 8 August 2017, the Delhi Company made false or misleading statements or omissions in its public filings, in violation of U.S. federal securities laws, and that the
High Court stayed the operation of the demand order and directed the Company to deposit ₹ 100 and furnish a bank guarantee for ₹ Company’s share price dropped and its investors were affected. On 9 May 2018, the Company and other defendants filed a motion to
676. dismiss the complaint in the United States District Court for the District of New Jersey.
Pursuant to the order, the Company deposited ₹ 100 on 13 September 2017 and submitted a bank guarantee of ₹ 676 dated 15 On 25 June 2018, the plaintiffs filed an opposition to the motion to dismiss and, on 25 July 2018, a further reply in support of the motion to
September 2017 to the Registrar General, Delhi High Court. On 22 November 2017, the Delhi High Court directed the Union of India dismiss was filed by the Company. In August 2018, oral argument on the motion to dismiss was heard by the Court.
to file a final counter affidavit within six weeks, subsequent to which the Company could file a rejoinder. On 10 May 2018, the counter
On 21 March 2019, the District Court issued its decision granting in part and denying in part the motion to dismiss. Pursuant to that decision,
affidavit was filed by the Union of India. The Company subsequently filed a rejoinder and both were taken on record by the Delhi High
the Court dismissed the plaintiffs claims with respect to seventeen out of the twenty two alleged misstatements and omissions.
Court. The matter has been adjourned to 3 August 2021 for hearing.
On 15 May 2020, Dr. Reddy’s Laboratories Limited, Dr. Reddy’s Laboratories, Inc., and certain of the Company’s current or former directors
Based on its best estimate, the Company has recorded a provision of ₹ 310 under “Selling and other expenses” as a potential liability for
and officers, have entered into a Stipulation and Agreement of Settlement (the “Stipulation”) with lead plaintiff the Public Employees’
sale proceeds in excess of the notified selling prices, including the interest thereon, and believes that the likelihood of any further liability
Retirement System of Mississippi in the putative securities class action filed against the defendants in the United States District Court
that may arise on account of penalties pursuant to this litigation is not probable.
for the District of New Jersey. As consideration for the settlement of the class action, the Company has agreed to pay US$ 9 million.
However, if the Company is unsuccessful in such litigation, it will be required to remit the sale proceeds in excess of the notified selling
The settlement is subject to the approval of the court and may be terminated prior to court approval pursuant to the grounds for
prices to the Government of India with interest and could potentially include penalties, which amounts are not readily ascertainable.
termination set forth in the Stipulation. Subject to the terms of the Stipulation, in exchange for the settlement consideration, lead plaintiff
Class Action and Other Civil Litigation on Pricing/Reimbursement Matters and members of the settlement class who do not opt-out of this settlement would release, among other things, the claims that were
On 30 December 2015 and on 4 February 2016, respectively, a class action complaint (the “First Pricing Complaint”) and another complaint asserted, or that they could have asserted, in this class action. In entering into the settlement, the defendants do not admit, and explicitly
(not a class action) (the “Second Pricing Complaint”) were filed against the Company and eighteen other pharmaceutical defendants in deny, any liability or wrongdoing of any kind.
State Court in the Commonwealth of Pennsylvania. In these actions, the class action plaintiffs allege that the Company and other
Subject to the terms of the Stipulation, the settlement resolves the remainder of the litigation.
defendants, individually or in some cases in concert with one another, have engaged in pricing and price reporting practices in
violation of various Pennsylvania state laws. More specifically, the plaintiffs allege that� (1) the Company provided false and misleading As the Company is adequately insured with respect to the aforesaid liability, the settlement did not have any impact on the Company’s
pricing information to third party drug compendia companies for the Company’s generic drugs, and such information was relied upon by statement of profit and loss for the year ended 31 March 2020.
private third party payers that reimbursed for drugs sold by the Company in the United States, and (2) the Company acted in concert
with certain other defendants to unfairly raise the prices of generic divalproex sodium ER (bottle of 80, 500 mg tablets ER 24H) and The amount payable to the plaintiffs on account of the settlement and the corresponding receivable from the insurer have been presented
generic pravastatin sodium (bottle of 500, 10 mg tablets). under “other current financial assets� and �other current financial liabilities”, respectively, in the balance sheet of the Company as at
31 March 2020.

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.29 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.29 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

On 23 December 2020, the court issued a final order and judgment approving the settlement. Pursuant to the settlement/court order, the
escrow was funded on 4 January 2021. The effective date of the settlement occurred on 1 February 2021, upon transfer of the settlement Water pollution and air pollution
fund balance into the final escrow account. As the transfer of funds to the final escrow account constitutes settlement of liability, the During the year ended 31 March 2012, the Company, along with 14 other companies, received a notice from the Andhra Pradesh Pollution
amount of liability has been derecognised during the three months ended 31 March 2021. Control Board (the “APP Control Board”) to show cause as to why action should not be initiated against them for violations under the Indian
(iii) Internal Investigation Water Pollution Act and the Indian Air Pollution Act. Furthermore, the APP Control Board issued orders to the Company to (i) stop
The Company has commenced a detailed investigation into an anonymous complaint. The complaint alleges that healthcare professionals in production of all new products at the Company’s manufacturing facilities in Hyderabad, India without obtaining a “Consent for
Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of U.S. Establishment”, (ii) cease manufacturing products at such facilities in excess of certain quantities specified by the APP Control Board and
anti-corruption laws, specifically the US Foreign Corrupt Practices Act. A US law firm is conducting the investigation at the instruction of a (iii) furnish a bank guarantee to assure compliance with the APP Control Board’s orders.
committee of the Company's Board of Directors. The investigation is ongoing. The Company has disclosed the matter to the US Department The Company appealed the APP Control Board orders to the Andhra Pradesh Pollution Appellate Board (the “APP Appellate Board”). The
of Justice, Securities and Exchange Commission and Securities Exchange Board of India. While the matter may result in APP Appellate Board, on the basis of a report of a fact-finding advisory committee, recommended to the Andhra Pradesh Government to
government enforcement actions against the Company in the United States and/or foreign jurisdictions, which could lead to civil and allow expansion of units fully equipped with Zero-Liquid Discharge (“ZLD”) facilities and otherwise found no fault with the Company (on
criminal sanctions under relevant laws, the probability of such action and the outcome are not reasonably ascertainable at this time. certain conditions).
(iv) Environmental The APP Appellate Board’s decision was challenged by one of the petitioners that was pending in the National Green Tribunal, (the “NGT”), Delhi.
matters Land pollution
The Indian Council for Environmental Legal Action filed a writ in 1989 under Article 32 of the Constitution of India against the Union of Separately, the Andhra Pradesh Government, following recommendations of the APP Appellate Board, published a notification in July 2013
India and others in the Supreme Court of India for the safety of people living in the Patancheru and Bollaram areas of Medak district of the that allowed expansion of production of all types of existing bulk drug and bulk drug intermediate manufacturing units subject to the
then existing undivided state of Andhra Pradesh. The Company has been named in the list of polluting industries. In 1996, the Andhra installation of ZLD facilities and the outcome of cases pending in the NGT. Importantly, the notification directed pollution load of industrial
Pradesh District Judge proposed that the polluting industries compensate farmers in the Patancheru, Bollaram and Jeedimetla areas for units to be assessed at the point of discharge (if any) as opposed to the point of generation.
discharging e�uents which damaged the farmers’ agricultural land. The compensation was fixed at ₹ 0.0013 per acre for dry land and ₹ In September 2013, the Ministry of Environment and Forests, based on the revised Comprehensive Environment Pollution Index, issued a
0.0017 per acre for wet land. Accordingly, the Company has paid a total compensation of ₹ 3. The Andhra Pradesh High Court notification that re-imposed a moratorium on expansion of industries in certain areas where some of the Company’s manufacturing facilities
disposed of the writ petition on 12 February 2013 and transferred the case to the National Green Tribunal (“NGT”), Chennai, India. are located. This notification overrides the Andhra Pradesh Government’s notification that conditionally permitted expansion.
The interim orders passed in the writ petitions will continue until the matter is decided by the NGT. The NGT has, through its order
dated 30 October 2015, constituted a Fact Finding Committee. The NGT has also permitted the alleged polluting industries to appoint The appeals filed by Mr. K. Chidambaram against the Orders of the Appellate Authority, Andhra Pradesh are disposed off as the same do
a person on their behalf in the Fact Finding Committee. However, the Company, along with the alleged polluting industries, has not survive for consideration as the G.O. based on which the then APPCB had passed its order which was subject matter of appeal before
challenged the constitution and composition of the Fact Finding Committee. The NGT has directed that until all the applications the Appellate Authority has itself been amended vide order 25 July 2013. However, the NGT, Delhi has passed a direction for the issue of
challenging the constitution and composition of the Fact Finding Committee are disposed of, the Fact Finding Committee shall not pollution to be considered by the Joint Committee of Central Pollution Control Board, National Environmental Engineering Institute (NEERI),
commence its operation. and the Telangana State Pollution Control Board to ascertain the present status of pollution issues in the Medak, Ranga Reddy,
Mahaboobnagar and Nalagonda districts in the State of Telangana particularly in the Patancheru and Bollaram industrial clusters and
The NGT, Chennai in a judgement dated 24 October 2017, disposed of the matter. The Bulk Drug Manufacturers Association of India file a report within three months before the NGT, Delhi.
(“BDMAI”), in which the Company is a member, subsequently filed a review petition against the judgement on various aspects.
(v) Fuel Surcharge Adjustments
The NGT, Delhi, in a judgement dated 16 November 2017 in another case in which the Company is not a party, stated that the moratorium The Andhra Pradesh Electricity Regulatory Commission (the “APERC”) passed various orders approving the levy of Fuel Surcharge
imposed in the Patancheru and Bollaram areas shall continue until the Ministry of Environment, Forest and Climate Change passes an order Adjustment (“FSA”) charges for the period from 1 April 2008 to 31 March 2013 by power distribution companies from all the consumers of
keeping in view the needs of the environment and public health. The Company filed an appeal challenging this judgement. electricity in the then existing undivided state of Andhra Pradesh, India where the Company’s headquarters and principal manufacturing
The High Court of Hyderabad heard the Company’s appeal challenging this judgement in July 2018 and directed the respondents to file facilities are located. Separate writ petitions filed by the Company for various periods, challenging and questioning the validity and
their response within a period of four weeks. During the three months ended 30 September 2018, the respondents filed counter affidavits legality of this levy of FSA charges by the APERC, are pending before the High Court of Andhra Pradesh and the Supreme Court of
and the matter has now been adjourned for final hearing. India.
The total amount approved by APERC for collection by the power distribution companies from the Company in respect of FSA
The appeal came up for hearing before the High Court of Hyderabad on 25 October 2018 and has been adjourned for further hearing.
charges for the period from 1 April 2008 to 31 March 2013 is ₹ 482. After taking into account all of the available information and legal
On 24 April 2019, based upon the judgement of the NGT, Chennai dated 24 October 2017, the Government of Telangana has issued provisions, the Company has recorded ₹ 219 as the potential liability towards FSA charges. However, the Company has paid, under protest,
G.O.Ms. No 24 of 2019 that allows for expansion of production of all kinds of existing industrial units located within the stretch of an amount of ₹ 354 as demanded by the power distribution companies as part of monthly electricity bills. The Company remains
Patancheru – Bollaram upon depositing an amount equivalent to 1% of the annual turnover of the respective unit for the concluded fiscal exposed to additional financial liability should the orders passed by the APERC be upheld by the Courts.
year i.e., 31 March 2019. Accordingly, the Company made a provision of ₹ 29.4, representing the probable cost of expansion, during the
year ended 31 March 2019. During the three months ended 30 June 2016, the Supreme Court of India dismissed the Special Leave Petition filed by the Company in this
regard for the period from 1 April 2012 to 31 March 2013. As a result, for the quarter ended 30 June 2016, the Company recognised
During the three months ended 30 September 2019, the Telangana State Pollution Control Board (“TSPCB”) has issued Operational an expenditure of ₹ 55 (by de-recognising the payments under protest) representing the FSA charges for the period from 1 April
Guidelines basis the NGT, Chennai Order dated 24 October 2017, G.O.Ms. No. 24 dated 24 April 2019 and G.O.Ms. No. 31 dated 24 May 2012 to 31 March 2013.
2019 and sought to recover retrospectively an amount of 0.5% of the annual turnover from the fiscal years 2016-2017 to 2018-2019 for all
the industrial units situated in Patancheru and Bollaram for the purposes of restoration of the said effected area. The Company has four (vi) Indirect taxes related matters
industrial units situated in Patancheru and Bollaram. Value Added Tax (“VAT”) matter
The Company has received various demand notices from the Government of Telangana’s Commercial Taxes Department objecting to the
The Consent For Operation (“CFO”) for change of product mix application filed by one of the industrial unit of the Company has been Company’s methodology of calculation of VAT input credit. The below table shows the details of each of such demand notice, the amount
recommended for issuance of CFO with change of product mix only upon payment of 0.5% of the annual turnover from the fiscal demanded and the current status of the Company’s responsive actions.
years 2016-2017 to 2018- 2019 to the TSPCB. The Company intends to vigorously defend itself against the Operational Guidelines.
In November 2019, demand notices were issued by the TSPCB for collection of Corpus Fund of 0.5 % as remediation fee on the previous PERIOD COVERED UNDER THE NOTICE AMOUNT DEMANDED STATUS
year turnover as per Operational Guidelines dated 3 August 2019 issued by TSPCB under the guise of G O Ms No 24 dated 24 April 2019 The State VAT Appellate Tribunal has remanded the
and G O Ms No 31 dated 24 May 2019 and basis the judgement of NGT, Chennai dated 24 October 2017 for the fiscal years 2015-2016 to matter to the assessing authority to re-compute the
2018 -2019 received
by CTO-1, CTO-2 and CTO-3 of the Company. April 2006 to March 2009 ₹ 66 plus 10% penalty eligibility and penalty orders are set-aside.
On 22 November 2019, The Hon’ble High Court of Judicature at Hyderabad issued an Interim Order which stayed the demand on the The Company filed appeal against the same with
condition that the Company deposit ₹ 60 as the remediation fee for the fiscal year 2018-2019 payable in the fiscal year 2019-2020. The the High Court, Telangana.
deposit of ₹ 60 was made and the Interim Order is continuing. The matter was adjourned to 22 April 2020, but has been delayed as a
result of the closure of the Court due to the COVID-19 lockdown, and a new date has not yet been rescheduled. The Company has filed an appeal before the Sales
Tax Appellate Tribunal - The matter was remanded
to the
The Company believes that any additional liability that might arise in this regard is not probable. Accordingly, no provision relating to these April 2009 to March 2011 ₹ 59 plus 10% penalty
claims has been made in the financial statements. April 2011 to March
2014

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
original direction to re- the year ended 31 March 2010.
adjudicating calculate the
authority with a eligibility for The Appellate Deputy Commissioner issued an
₹ 27 plus 10% penalty
order partially in favour of the Company

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.29 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.34 OTHER UPDATES (CONTINUED)

The Company has recorded a provision of ₹ 51 as of 31 March 2021, and believes that the likelihood of any further liability that may arise
on account of the ongoing litigation is not probable. B. Update on warning letter from the U.S. FDA
Notices from Commissioner of Goods and Services Tax, India The Company received a warning letter dated 05 November 2015 from the U.S. FDA relating to current Good Manufacturing Practices (“cGMPs”)
In the months of November 2019 and January 2020, the Commissioner of Goods and Services Tax, India issued notices to the deviations at its active pharmaceutical ingredient (“API”) manufacturing facilities at Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as
Company alleging that the Company has irregularly availed input tax credit of ₹ 307. The Company has received orders dropping the well as violations at its oncology formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. The contents of the warning
demand of ₹ 307. letter emanated from Form 483 observations that followed inspections of these sites by the U.S. FDA in November 2014, January 2015
and February-March 2015.
The Company has recorded a provision of ₹ 31 as on 31 March 2021 and believes that the likelihood of any further liability that may arise
on account of the allegedly inappropriate claims to credits is not probable. Accordingly, no further provision was made in these Tabulated below are the further updates with respect to the aforementioned sites:
financial statements.
MONTH AND YEAR UPDATE
Others The U.S. FDA completed the re-inspection of the aforementioned manufacturing facilities. During the
Additionally, the Company is in receipt of various demand notices from the Indian Sales and Service Tax authorities. The disputed amount is
February, March re-inspections, the U.S. FDA issued three observations with respect to the API manufacturing facility at
₹ 474. The Company has responded to such demand notices and believes that the chances of any liability arising from such notices are less Miryalaguda, two observations with respect to the API manufacturing facility at Srikakulam and thirteen
and April 2017
than probable. Accordingly, no provision is made in these financial statements as of 31 March 2021. observations with respect to the Company’s oncology formulation manufacturing facility at Duvvada.
(vii) Others The U.S. FDA issued an Establishment Inspection Report (“EIR”) which indicated that the inspection of
Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/or regulatory inspections, inquiries, June 2017
the Company’s API manufacturing facility at Miryalaguda was successfully closed.
investigations and proceedings, including patent and commercial matters that arise from time to time in the ordinary course of business.
The Company received EIRs from the U.S. FDA for the oncology manufacturing facility at Duvvada which
Except as discussed above, the Company does not believe that there are any such contingent liabilities that are expected to have any November 2017
indicated that the inspection status of this facility remained unchanged.
material adverse effect on its financial statements.
The Company received EIRs from the U.S. FDA for API manufacturing facility at Srikakulam which indicated that
B. Commitments: February 2018
the inspection status of this facility remained unchanged.
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS The Company requested the U.S. FDA to schedule a re-inspection of the oncology formulation manufacturing
June 2018 facility at Duvvada.
Estimated amounts of contracts remaining to be executed on capital
9,560 4,485 The re-inspection was completed for the oncology formulation manufacturing facility at Duvvada and the U.S.
account and not provided for (net of advances) October 2018
FDA issued a Form 483 with eight observations.
November 2018 The Company responded to the observations identified by the U.S. FDA for the oncology formulation
2.30 DIVIDEND REMITTANCE IN FOREIGN CURRENCY manufacturing facility at Duvvada in October 2018.

The Company does not make any direct remittances of dividends in foreign currencies to American Depository Receipts (ADRs) holders. The U.S. FDA issued an EIR indicating successful closure of the audit of the oncology formulation
February 2019 manufacturing facility at Duvvada.
The Company remits the equivalent of the dividends payable to the ADR holders in Indian Rupees to the custodian, which is the
registered shareholder on record for all owners of the Company’s ADRs. The custodian purchases the foreign currencies and remits it to the With respect to the API manufacturing facility at Srikakulam, subsequent to the receipt of an EIR in February 2018, the Company was asked, in
depository bank which inturn remits the dividends to the ADR holders. October 2018, to carry out certain detailed investigations and analyses and the Company submitted the results of the investigations and
analyses. As part of the review of the response by the U.S. FDA, certain additional follow on queries were received by the Company, and
the Company responded to all such queries in January 2019. In February 2019, the Company received certain other follow on questions from
2.31 SEGMENT REPORTING the U.S. FDA and the Company responded to these questions in March 2019. The U.S. FDA completed the audit on 28 January 2020. The
Company was issued a Form 483 with 5 observations and responded to the observations in February 2020. In May 2020, the Company received
In accordance with Ind AS 108, Operating Segments, segment information has been given in the consolidated financial statements of an EIR from the U.S. FDA, for the above-referred facility, indicating closure of the audit and classifying the inspection of this facility as Voluntary
Dr. Reddy’s Laboratories Limited and therefore no separate disclosure on segment information is given in these financial statements. Action Indicated (“VAI”). With this, all facilities under warning letter are now determined as VAI.
Inspection of other facilities:
2.32 CAPITAL MANAGEMENT Tabulated below are the details of the U.S. FDA inspections carried out at other facilities of the
Company: Located in India
For the purposes of the Company’s capital management, capital includes issued capital and all other equity reserves. The primary objective of
the Company’s capital management is to maximise shareholder value. The Company manages it’s capital structure and makes adjustments in MONTH AND YEAR UNIT DETAILS OF OBSERVATIONS
the light of changes in economic environment and the requirements of the financial covenants. The Company monitors capital using gearing
ratio, which is
total debt divided by total capital plus debt. The capital gearing ratio as on 31 March 2021 and 31 March 2020 was 7% and 9%, respectively. significant June 2018 November 2018 API Srikakulam Plant (SEZ)
improvements
to its cyber Formulations Srikakulam Plant (SEZ) Unit II
2.33 IMPACT OF COVID – 19 January 2019
and data Formulations Srikakulam Plant (SEZ) Unit I
The Company considered the uncertainty relating to the COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible security
assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of systems to January 2019 API manufacturing Plant at Miryalaguda, Nalgonda
approval of these interim financial statements. The Company based on its judgments, estimates and assumptions including sensitivity analysis, safeguard
expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. from such
Formulations manufacturing facility at Bachupally, Hyderabad
risks in the
The Company will continue to closely monitor any material changes to future economic conditions. future. January 2019 Aurigene Discovery Technologies Limited, Hyderabad
Formulations manufacturing plants, Duvvada {Vizag SEZ plant 1 (FTO VII) and Vizag
SEZz plant 2(FTO IX)}
2.34 OTHER UPDATES
March 2019
A. Update on Cyber Incident
On 22 October 2020, the Company experienced a cybersecurity incident related to ransom-ware. The Company employed two leading
cyber security incident response firms to assist with the investigation process. The incident was contained in a timely fashion and an enterprise-
wide remediation was undertaken to ensure all traces of infection are completely removed from the network. Since then, the Company June 2019
has strengthened a series of technical controls to augment the current cyber security posture and has also focused on implementing

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
No observations were noted. An EIR indicating the closure of audit for this facility Eleven EIR was issued by the U.S. FDA noted. In June 2019, the Company received an EIR from the U.S. FDA indicating
was issued by the U.S. FDA in August 2018. observations indicating the closure of audit the closure of audit for this facility.
No observations were noted. An EIR indicating the closure of audit for this facility was issued by the U.S. FDA in February 2019. were noted. The and the inspection classification Two observations were noted. The Company responded to the observations.
Company of the facility was determined as In September 2019, an EIR was issued by the U.S. FDA indicating the closure of
Four observations were noted. The Company responded to the observations and an EIR indicating the closure of audit for this facility was issued
responded to the VAI. audit of these facilities.
by the U.S. FDA in April 2019.
observations in No
One observation was noted. The Company responded to the observation. In May 2019, an EIR was issued by the U.S. FDA January 2019.
observations
indicating the closure of audit and the inspection classification of the facility was determined as VAI. In April 2019, an

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated) NOTES TO FINANCIAL STATEMENTS
2.34 OTHER UPDATES (CONTINUED) (All amounts in Indian Rupees millions, except share data and where otherwise stated)

MONTH AND YEARUNIT DETAILS OF OBSERVATIONS 2.37 MERGER OF DR. REDDY’S HOLDINGS LIMITED INTO DR. REDDY’S LABORATORIES LIMITED (CONTINUED)

During year ended 31 March 2020, the scheme of amalgamation of Dr. Reddy’s Holdings Limited with the Company was approved by the board
Five observations were noted during U.S. FDA inspection. The Company responded of directors, members and unsecured creditors of the Company. The no-observation letters from the BSE Limited and National Stock Exchange
July 2019 API Hyderabad plant 2, to the observations in August 2019. of India Limited were received on the basis of no comments received from Securities and Exchange Board of India (“SEBI”). The petition for
approval
Bollaram, Hyderabad In October 2019, an EIR was issued by the U.S. FDA indicating the closure of audit of the said scheme was filed with the Hon’ble NCLT, Hyderabad Bench.
and the inspection classification of the facility was determined as VAI. The hearings on the petition took place on 20 April 2021, and the Hon'ble NCLT reserved the issuance of an order pending its review and further
Formulations manufacturing Eight observations were noted. The Company responded to the observations in analysis of the matter.
plants, (Vizag SEZ plant 1), September 2019.
August 2019
Duvvada, Visakhapatnam In February 2020, an EIR was issued by the U.S. FDA indicating the closure of In2.38
FebruaryBUSINESS TRANSFER
2020, the Company signed aAGREEMENT WITH
Business Transfer WOCKHARDT
Agreement LIMITEDLimited ("Wockhardt") to acquire select
("BTA") with Wockhardt
(FTO VII) audit and the inspection classification of the facility was determined as VAI. divisions of its branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives for a consideration of ₹ 18,500.
No observations were noted. The business consists of a portfolio of 62 brands in multiple therapy areas such as respiratory, neurology, venous malformations, dermatology,
Formulations manufacturing gastroenterology, pain and vaccines. This entire portfolio was to be transferred to the Company, along with related sales and marketing teams,
In October 2019, an EIR was issued by the U.S. FDA indicating the closure of the
August 2019 facility at Shreveport, the manufacturing plant located in Baddi, Himachal Pradesh and all plant employees (together the "Business Undertaking"). The transaction
audit and the inspection classification of the facility was determined as No
Louisiana, U.S.A involved 2,051 employees engaged in operations of the acquired Business Undertaking.
Action Initiated (“NAI”).
As of 31 March 2020, the acquisition of this Business Undertaking was subject to certain closing conditions, such as approval from shareholders
API Srikakulam plant (SEZ), Four observations were noted. The Company responded to the observations in
October 2019 Andhra Pradesh November 2019.
In May 2020, an EIR was issued by the U.S. FDA indicating the closure of the audit. and lenders of Wockhardt and other requisite approvals under applicable statutes. Hence, the transaction was not accounted for in the year ended
Formulations Srikakulam Plant No observations were noted. 31 March 2020.
February 2020 In May 2020, an EIR was issued by the U.S. FDA indicating the closure of the audit Due to the COVID-19 pandemic and the consequent government restrictions, there has been a reduction in the revenue from the sales of the
and
(SEZ) Unit I
the inspection classification of the facility was determined as NAI. products forming part of the Business Undertaking during March and April 2020. Accordingly, through an amendment to the BTA, the Company
Formulations manufacturing One observation was noted. The Company responded to the observation in and Wockhardt agreed that the consideration shall now be upto ₹ 18,500, to be paid as per the following terms:
February 2020 facility at Bachupally, March 2020. In May 2020, an EIR was issued by the U.S. FDA indicating the
a) an amount of ₹ 14,830 to be paid on the date of closing;
Hyderabad (FTO Unit III) closure of the audit and the inspection classification of the facility was determined
as VAI. b) an amount of ₹ 670 to be deposited in an escrow account which shall be released subject to adjustments for, inter alia, net working capital,
Integrated Product
employee liabilities and certain other contractual and statutory liabilities;
Development Organization
February 2020 No observation was noted.
(IPDO) at Bachupally, c) an amount of ₹ 3,000 (the “Holdback Amount”) which shall be released as follows:
In May 2020, an EIR was issued by the U.S. FDA indicating the closure of the audit
Hyderabad • If the revenue from sales of the products forming part of the Business Undertaking during the twelve (12) months post-closing exceeds
and the inspection classification of the facility was determined as NAI.
₹ 4,800, the Company will be required to pay to Wockhardt an amount equal to two (2) times the amount by which the revenue
exceeds ₹ 4,800, subject to the maximum of the Holdback Amount.
API manufacturing Plant at Three observations were noted. The Company responded to the observations
March 2020 The acquisition is in line with the Company's strategic focus on India and has paved a path for accelerated growth and leadership in the
Miryalaguda, Nalgonda in March 2020.
In April 2020, an EIR was issued by the U.S. FDA indicating the closure of the audit domestic Indian market. The Company believes that the acquired Business Undertaking offers to strengthen the Company’s pharmaceutical
and the inspection classification of the facility was determined as VAI. portfolio and products in the Indian market.
No U.S. FDA audits were conducted during the year ended 31 March 2021.
The transaction was completed on 10 June 2020.
The Company has accounted for the transaction under Ind AS 103, “Business
2.35 THE CODE ON SOCIAL SECURITY, 2020
Combinations”. As of 30 June 2020, the purchase price allocation was preliminary.
India's Code on Social Security, 2020, which aims to consolidate, codify and revise certain existing social security laws, received
Presidential assent in September 2020 and has been published in the Gazette of India. However, the related final rules have not yet been During the three months ended 30 September 2020, the Company completed the purchase price allocation. Tabulated below are the fair values of
the assets acquired, including goodwill, and liabilities assumed on the acquisition date:
issued and the date on which this Code will come into effect has not been announced. The Company will assess the impact of this Code and the
rules thereunder when they come into effect.
PARTICULARS AMOUNT
Cash 14�990
2.36 SECONDARY LISTING OF THE COMPANY’S ADR ON NSE IFSC LIMITED Payment through Escrow account 564
The Company completed the secondary listing of its American Depository Receipts (“ADRs”) on NSE IFSC Limited under the symbol ’DRREDDY’ Contingent consideration (Holdback Amount) 561
on 9 December 2020. NSE IFSC Limited is a recognized international stock exchange established in the International Financial Services Total consideration 16�115
Centre (“IFSC”) at Gujarat International Finance Tec (“GIFT”) City in Gujarat, India. IFSC is one of the permissible jurisdictions where Assets acquired
Depository Receipts
can be listed. This listing will provide a secondary platform (other than NYSE Inc.) to overseas investors for trading in the Company’s ADRs. This Goodwill 530
is a
secondary listing of ADRs that are currently issued by J.P. Morgan Chase Bank N.A. under its ADR Deposit Agreement with the Company, Property, plant and equipment 373
and no further capital raising or issuance of new securities is involved.
Product related intangibles 14�888
Inventories 466
2.37 MERGER OF DR. REDDY’S HOLDINGS LIMITED INTO DR. REDDY’S LABORATORIES LIMITED Other assets 245
Liabilities assumed
The Board of Directors, at its meeting held on 29 July 2019, has approved the amalgamation (the “Scheme”) of Dr. Reddy’s Holdings Limited
(“DRHL”), an entity held by the Promoter Group, which holds 24.88% of Dr. Reddy’s Laboratories Limited (the “Company”) into the Company. Employee benefits (Gratuity- ₹ 70 and Compensated absences- ₹ 75) (145)
This is subject to the approval of shareholders, stock exchanges, the National Company Law Tribunal and other relevant regulators. Refund liability (242)
Total net assets 16�115
The Scheme will lead to simplification of the shareholding structure and reduction of shareholding tiers.
The Promoter Group cumulatively would continue to hold the same number of shares in the Company, pre- and post the amalgamation. All directors, employees, officers, representatives, or any other person authorised by the Company (excluding the Promoters) for any liability, claim, or
costs, charges and expenses relating to the Scheme will be borne out of the surplus assets of DRHL. Further, any expense, if exceeding the demand, which may devolve upon the Company on account of this amalgamation.
surplus assets of DRHL, will be borne directly by the Promoters.
The Scheme also provides that the Promoters of the Company will jointly and severally indemnify, defend and hold harmless the Company, its

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
The total goodwill of ₹ 530 consists largely of the synergies and economies of scale expected from the acquired business, together with
the value of the workforce acquired. The entire amount of goodwill is deductible for tax purposes. Acquisition related costs amounted
to ₹ 60 and were excluded from the consideration transferred and were recognised as expense under “Selling and other expenses” in the
Statement of profit and loss for the year ended 31 March 2021.
The fair value of the contingent consideration of ₹ 561 was estimated by applying the income approach. The fair value measurement is
based on significant inputs that are not observable in the market, which Ind AS 113, “Fair Value Measurement” refers to as Level 3 inputs.
The significant unobservable inputs in the valuation is the estimated sales forecast. During the three months ended 31 March 2021, the
Company, after taking into account the revenue of the products until twelve months post-closing (9 June 2021), re-measured the
contingent consideration to ₹ 420.

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 Dr. Reddy’s Laboratories Limited Company OverviewStatutory ReportsFinancial Statements Annual Report 2020-21

NOTES TO FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and where otherwise stated)

2.38 BUSINESS TRANSFER AGREEMENT WITH WOCKHARDT LIMITED (CONTINUED)

The amount of revenue included in the Statement of profit and loss for the year ended 31 March 2021 pertaining to the acquired business since
10 June 2020 is ₹ 3,887.
The acquired business has been integrated into the Company’s existing activities and it is not practicable to identify the impact on the Company
profit in the year.

2.39 RESTRUCTURING OF PHARMACEUTICAL SERVICES BUSINESS

The Board of Directors of the Company, in their meeting held on 27 March 2020, had approved the plan for restructuring of the
CONSOLIDATED FINANCIAL STATE
Company’s pharmaceutical services business that involves setting up a wholly owned subsidiary and transferring the all tangible and
intangible assets, contracts, permission, consents, rights, registrations, personnel and employees, other assets and liabilities on a slump sale
basis (an Indian tax law concept which refers to the transfer of a business as a going concern without values being assigned to individual assets
and liabilities) to the newly incorporated wholly owned subsidiary. During the year ended 31 March 2021, the Company sold contract
development and manufacturing organisation (CDMO) division of the Custom Pharmaceutical Services (CPS) business of the Company. This
sale was done by way of slump sale (as defined under section 2(42C) of Indian Income Tax Act,1961) including all related property, plant and
equipment, currentassets, current liabilities, and transfer of employees.
As the transaction is between the Company and its subsidiaries, no further disclosures are made in this regard.

2.40 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS USED FOR RESEARCH AND
DEVELOPMENT (INCLUDED IN NOTE 2.1 AND NOTE 2.3)
GROSS CARRYING VALUE ACCUMULATED DEPRECIATION/ AMORTISATION NET CARRYING VALUE
(a) (b) (b)
PARTICULARS AS AT 1 ADDITIONS DISPOSALS AS AT 31 AS AT 1 FOR THE DISPOSALS
(a)
AS AT 31 AS AT 31 AS AT
31 APRIL 2020 MARCH 2021 APRIL 2020 YEAR MARCH 2021 MARCH 2021 MARCH
2020
Property, plant and
equipment
Land 70 - - 70 - - - - 70 70
Buildings 1�099 25 �9� 1�115 405 42 �2� 445 670 694
Plant and equipment 6�459 459 �577� 6�341 4�272 507 �458� 4�321 2�020 2�187
Furniture and fixtures 240 1 �35� 206 201 11 �33� 179 27 39
Office equipment 418 37 �55� 400 351 35 �43� 343 57 67
Total (A) 8�286 522 (676) 8�132 5�229 595 (536) 5�288 2�844 3�057

Intangible assets
Softwares 266 27 �37� 256 231 17 �29� 219 37 35
Others 112 13 �21� 104 44 - - 44 60 68
Total (B) 378 40 (58) 360 275 17 (29) 263 97 103
Independent Auditors’ Report Consolidated Balance Sheet
170 Consolidated S
Total (A+B) 8�664 562 (734) 8�492 5�504 612 (565) 5�551 2�941 3�160 Consolidated Statement of Changes in Equity Consolidated
178 Statement of Ca
Previous year 8�097 655 �88� �264� 4�932 648 �76� 5�504 3�160
Notes to the Consolidated Financial Statements 179
(a) Additions include transfers from non-research and development group to research and development group. The gross carrying value of such transferred assets is ₹ 34 (31 March 2020: ₹ 11) and
accumulated depreciation/amortisation is ₹ 16 (31 March 2020: ₹ 2).
180
(b) Disposals include transfers from research and development group to non-research and development group. The gross carrying value of such transferred assets is ₹ 62 (31 March 2020: ₹ 11) and 182
accumulated depreciation/amortisation is ₹ 38 (31 March 2020: ₹6).
183
The Company has also incurred capital expenditure of ₹ 792 towards research and development expenditure lying in Capital work in progress as
on 31 March 2021.

2.41 SUBSEQUENT EVENTS

There are no significant events that occurred after the balance sheet date.

As per our report of even date attached for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited
for S.R. Batliboi & Associates LLP
Chartered Accountants K Satish Reddy Chairman, DIN: 00129701
ICAI Firm Registration Number: 101049W/E300004 G V Prasad Co-Chairman & Managing Director, DIN: 00057433
per S Balasubrahmanyam Erez Israeli Chief Executive Officer
Partner Parag Agarwal Chief Financial Officer
Membership Number: Sandeep Poddar Company Secretary
53315

Place: Chennai
Place: Hyderabad
Date: 14 May 2021

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 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

INDEPENDENT AUDITORS’ REPORT INDEPENDENT AUDITORS’ REPORT (CONTINUED)

To the Members of Dr. Reddy’s Laboratories Limited
Key audit matters How our audit addressed the key audit matter
Report on the Audit of the Consolidated Financial Statements
Assessment of carrying value of intangible assets, intangible assets under development and goodwill (as described in note 1.3(g) and
Opinion 1.3(j) of the significant accounting policies� and note 2.2� 2.3 and 2.4 for details and movement in goodwill � other intangible assets and
We have audited the accompanying consolidated financial statements of Dr. Reddy’s Laboratories Limited (hereinafter referred to as “the intangible assets under development respectively in the consolidated financial statements)
Holding
Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its joint ventures comprising of As at 31 March 2021, the Company has intangible Our audit procedures, among others included the following:
the consolidated Balance sheet as at 31 March 2021, the consolidated Statement of Profit and Loss, including other comprehensive income, the assets, including intangible assets under development, • We evaluated the design and tested the operating effectiveness of the
consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated of ` 35,248 million and goodwill of ` 5,599 million. The Company’s controls in assessing the recoverable value of goodwill,
financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as carrying value of these intangible assets are based intangible assets and intangible assets under development.
“the consolidated financial statements”). on future cash flows and there is a risk that the assets • We assessed the Group’s methodology applied in determining the CGUs to
may be impaired if cash flows are not in line with which these assets are allocated.
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of
projections. • We tested the estimated recoverable value of these assets and assessed
reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, the aforesaid consolidated
the methodologies used by management in deriving the recoverable value
financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and Valuation of goodwill and intangible assets is subject
and tested the significant assumptions and the underlying data used by the
give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of to management’s assessment of recoverable
Company in its analyses.
the Group and joint ventures as at 31 March 2021, their consolidated profit including other comprehensive income, their consolidated amount, being the higher of the value in use and
• We compared the significant assumptions to current industry, market and
cash Nows and the consolidated statement of changes in equity for the year ended on that date. fair value less costs to sell, involving significant
economic trends, to the Company’s historical data.
judgment and are based on number of variables and
Basis for Opinion • We performed sensitivity analyses of the significant assumptions to
estimates including projection of future sales,
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs), as specified under evaluate the potential change in the recoverable values of these assets
operating costs and profit margins; appropriate
section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the resulting from hypothetical changes in underlying assumptions. We also
discount rate and terminal value growth rate; and
Consolidated Financial Statements’ section of our report. We are independent of the Group in accordance with the ‘Code of Ethics’ issued assessed the recoverable value headroom by performing sensitivity testing
probability of technical and regulatory success
by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial of key assumptions used.
factors in applying discounted cash Now valuation
statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance • We tested the arithmetical accuracy of the models.
methodology. As the assessment of recoverable
with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to • We involved valuation specialist to assist in evaluating the methodologies used
amount involves significant degree of management
provide a basis for our audit opinion on the consolidated financial statements. and significant assumptions and inputs used to determine the recoverable value
judgement, we have identified this a key audit matter.
of certain intangible assets and intangible assets under development.
Key Audit Matters Contingencies, including litigations and tax (as described in note 1.3(l) of the significant accounting policies� and note 2.32 (A) containing
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated details of contingencies in the consolidated financial statements)
financial
statements for the financial year ended 31 March 2021. These matters were addressed in the context of our audit of the consolidated financial The Company and certain of its subsidiaries are Our audit procedures, among others included the following:
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, involved in disputes, lawsuits, claims, anti-trust, • We evaluated the design and tested the operating effectiveness of controls
our description of how our audit addressed the matter is provided in that context. governmental and / or regulatory inspections, relating to identification and evaluation of claims, proceedings and
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the inquiries, investigations and proceedings, including investigations at different levels in the group, and the measurement of
responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, patent, tax and commercial matters that arise from provisions for disputes, potential claims and litigation, contingent liabilities and
including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our time to time in the ordinary course of business. Most disclosures.
assessment of the risks of material misstatement of the consolidated financial statements. The results of audit procedures performed by us of the claims involve complex issues. The Company • We obtained a list of ongoing litigations from the Company’s in-house legal
and by other auditors of components not audited by us, as reported by them in their audit reports furnished to us by the management, assisted by their external legal counsel assesses the counsel. We selected a sample of litigations based on materiality and performed
including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated need to make provision or disclose a contingency on a inquiries with the said counsel on the legal evaluation of these litigations.
financial statements. case-to-case basis considering the underlying facts of We compared the evaluation with the provision or disclosure in the
each litigation. consolidated financial statements. We tested the underlying computation of the
This area is significant to our audit, since the management in relation to the measurement of provision or the contingency.
Key audit matters How our audit addressed the key audit matter
accounting and disclosure for contingent legal and • We obtained legal letters from the Company’s external legal advisors with
Business transfer agreement with Wockhardt Limited (as described in note 1.3(e� of the significant accounting policies and note 2.40 of the respect to the matters included in the summary. Where appropriate, we
tax liabilities is complex and judgmental (due to the
consolidated financial statements� examined correspondences connected with the cases.
difficulty in predicting the outcome of the matter
and estimating
During the current year, the Company completed the acquisition of Our audit procedures, among others included the following: • We inspected relevant communication with tax authorities.
the potential impact if the outcome is unfavourable),
select divisions of the branded generics business of Wockhardt Limited • We evaluated the design and tested the operating effectiveness • We involved tax experts in assessing the nature and amount of material indirect
and the amounts involved are, or can be, material to
in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. of the controls over the Company’s calculation of the estimated tax positions and assessed the technical merits based on the
the consolidated financial statements.
The transaction was accounted for as a business combination. The fair values of the intangible assets and the contingent consideration. correspondence and assessments from the relevant tax authorities.
Company’s accounting for the acquisition included determining the fair • We assessed the competence and independence of the third- • We also evaluated the disclosures made in the consolidated financial statements.
value of the assets acquired, which primarily included product related party valuer by reference to their qualifications and experience.
intangibles. In connection with the acquisition, the Company • We tested the estimated fair value of the intangible assets and
recognized a contingent consideration liability for acquisition the contingent consideration liability, evaluated Company’s
consideration that is payable based on a multiple of incremental revenue selected valuation methods and tested the significant
targets subject to a maximum amount. The accounting for the business assumptions used in the models. In testing the valuation of
combination was complex due to the significant estimation required by contingent consideration, we assessed, among others, the terms
management to determine the fair value of the intangible assets and the of the arrangement and the conditions met for the amounts to
contingent consideration. The significant estimation uncertainty was become payable.
primarily due to the sensitivity of the respective fair values to the • We compared the significant assumptions to current industry, market
underlying assumptions utilized in the measurement of the fair value of and economic trends, assumptions used to value similar assets, and
the intangible assets and contingent consideration. The Company used to the historical results of the acquired business.
a discounted cash Now model to measure the fair value of the • We involved valuation specialist to assist in evaluating the
intangible assets, which included significant assumptions such as the appropriateness of the valuation model, key assumptions used in the
discount rate, useful life, and long-term growth rate. The Company valuation model’s, and to test the model’s computational accuracy.
measured the contingent consideration at its estimated fair value, and • We tested the arithmetical accuracy of the models
the significant assumptions used to determine the fair value of contingent • We also tested the completeness and accuracy of the underlying
consideration included forecasted revenue projections, revenue volatility data used in the model.
and a risk adjusted discount rate. Considering the above, this has been
included as a Key Audit Matter.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

INDEPENDENT AUDITORS’ REPORT (CONTINUED) INDEPENDENT AUDITORS’ REPORT (CONTINUED)

Key audit matters How our audit addressed the key audit matter Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Rebates, discounts, chargebacks, and other deductions in revenue(as described in note 1.3(m) of the significant accounting policies of Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
consolidated financial statements and note 2.13 of the consolidated financial statements) misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it
exists.
Revenue is recognised net of accrual for chargeback, Our audit procedures, among others included the following: Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
rebates, sales returns and discounts, etc. The estimates • We obtained an understanding, evaluated the design and tested the to inNuence the economic decisions of users taken on the basis of these consolidated financial statements.
relating to the accruals are important given the operating effectiveness of internal controls over the sales deduction
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the
significance of revenue and also considering the processes.
audit. We also:
distinctive terms of arrangement with customers. These • We also tested management’s controls over the accuracy and completeness
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design
estimates are complex and requires significant of the estimates used to calculate the sales deductions.
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
judgement and estimation by the Company for • We tested management’s estimated sales deductions and obtained
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
establishing an appropriate accrual. Accuracy of management’s calculations for the respective estimates. We tested
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
revenues may deviate on account of change in management’s estimates over the determination of sales deductions
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
judgements and estimates. Accordingly, the same has accruals by comparing the rates used in management’s estimate to rates in
circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Holding Company has
been considered as a key audit matter. the underlying contracts and historical sales deductions data.
adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• We compared the assumptions to contracted prices, historical rebates,
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
discounts, allowances and returns, as applicable to current payment trends.
management.
• We also considered the historical accuracy of the management’s
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
estimates in prior years and assessed the estimated amounts, we evaluated
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its joint
trends in actual sales and discount accrual balances.
ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
• We also tested the underlying data used in management’s calculations
report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
for accuracy and completeness and verified source data supporting the
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
inventory levels, rebate claims paid subsequent to period end, and
the Group and its joint ventures to cease to continue as a going concern.
volume discounts settled during the period.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the
• We tested recording of revenue in appropriate period which included the
consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
following procedures:
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group of
○ Performed trend analysis over sales levels as compared to previous
which we are the independent auditors and whose financial information we have audited, to express an opinion on the consolidated financial
periods;
statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities
○ Tested management’s monitoring process over distributors’ stocking
included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated
levels;
financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision
○ Verified sample sales transactions near period-end
and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated
financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and
Other Information significant
The Holding Company’s Board of Directors is responsible for the other information. The other information comprises, Statutory reports, the financial reporting process of the Group and of its joint ventures.
corporate
governance and Board’s report included in the Annual report, which we obtained prior to the date of this auditor’s report and Corporate
Overview and letter from Chairman and Co-Chairman included in the Annual report, which is expected to be made available to us after
that date. The Other information does not include the Standalone financial statements, Consolidated financial statements and our auditor’s
report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so,
consider whether such other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated financial statements
in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial
performance including other comprehensive income, consolidated cash Nows and consolidated statement of changes in equity of the Group and
joint ventures in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS)
specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board
of Directors of the companies included in the Group and its joint ventures are responsible for maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding of the assets of the Group and of its joint ventures and for preventing
and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that
were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation
of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error,
which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as
aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its
joint ventures are responsible for assessing the ability of the Group and of its joint ventures to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
Those respective Board of Directors of the companies included in the Group and of its joint ventures are also responsible for overseeing
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
audit findings, including any significant deficiencies in internal control that we identify during our audit. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit
of the consolidated financial statements for the financial year ended 31 March 2021 and are therefore the key audit matters. We describe these
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably
our independence, and where applicable, related safeguards.
be expected to outweigh the public interest benefits of such communication.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

INDEPENDENT AUDITORS’ REPORT (CONTINUED) INDEPENDENT AUDITORS’ REPORT (CONTINUED)

Other Matter
(a) We did not audit the financial statements and other financial information, in respect of two subsidiaries, whose financial statements g) In our opinion and based on the consideration of reports of other statutory auditors of the subsidiaries, and joint ventures incorporated in
include total assets of ` 23,729 million as at 31 March 2021 and total revenues of ` 32,687 million and net cash outNows of ` 169 India, the managerial remuneration for the year ended 31 March 2021 has been paid / provided by the Holding Company, its subsidiaries
million for the year ended on that date. These financial statement and other financial information have been audited by other and joint ventures incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V to the Act;
auditors, which financial statements, other financial information and auditor’s reports have been furnished to us. Our opinion on the h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors)
consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us and based on the
report in terms of sub- sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries,
report(s) of such other auditors. as noted in the ‘Other matter’ paragraph:
These subsidiaries are located outside India whose financial statements and other financial information have been prepared in accordance i. The consolidated financial statements disclose the impact of pending litigations on its consolidated financial position of the Group in its
with accounting principles generally accepted in their respective countries and which have been audited by other auditors under consolidated financial statements – Refer Note 2.32(A) to the consolidated financial statements;
generally accepted auditing standards applicable in their respective countries. The Holding Company’s management has converted ii. Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards,
the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their respective for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 2.30 to the consolidated
countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Holding financial statements;
Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by
the report of other auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us. the Holding Company, its subsidiaries and joint ventures incorporated in India during the year ended 31 March 2021.
(b) Our opinion above on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is
not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the
financial statements and other financial information certified by the Management. for S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
Report on Other Legal and Regulatory Requirements
per S Balasubrahmanyam
As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors on separate
Partner
financial statements and the other financial information of subsidiaries, as noted in the �other matter’ paragraph we report, to the extent
Membership Number: 053315
applicable, that�
UDIN: 21053315AAAABL7527
a) We/the other auditors whose report we have relied upon have sought and obtained all the information and explanations which to the best Place: Chennai
of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements; Date: 14 May 2021
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements
have been kept so far as it appears from our examination of those books and reports of the other auditors;
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement of Other Comprehensive
Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in
agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements;
d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of
the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of the written representations received from the directors of the Holding Company as on 31 March 2021 taken on record
by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of
the Act, of its subsidiary companies and joint ventures, none of the directors of the Group’s companies, its joint ventures/ incorporated in
India, is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
f) With respect to the adequacy and the operating effectiveness of the internal financial controls with reference to consolidated financial
statements of the Holding Company and its subsidiary companies and joint ventures, incorporated in India, refer to our separate Report in
“Annexure 1” to this report;
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

ANNEXURE 1 TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE CONSOLIDATED

FINANCIAL STATEMENTS OF DR. REDDY’S LABORATORIES LIMITED ANNEXURE 1 TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE CONSOLIDATED
FINANCIAL STATEMENTS OF DR. REDDY’S LABORATORIES LIMITED (CONTINUED)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
Opinion
In conjunction with our audit of the consolidated financial statements of Dr. Reddy’s Laboratories Limited (hereinafter referred to as the In our opinion, the Group and its joint ventures, which are companies incorporated in India, have, maintained in all material respects, adequate
“Holding Company”) as of and for the year ended 31 March 2021, we have audited the internal financial controls with reference to consolidated internal financial controls with reference to consolidated financial statements and such internal financial controls with reference to consolidated
financial statements of the Holding Company and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) financial statements were operating effectively as at 31 March 2021, based on the internal control over financial reporting criteria established by
and its joint ventures, which are companies incorporated in India, as of that date. the Holding Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

Management’s Responsibility for Internal Financial Controls Other Matters

The respective Board of Directors of the companies included in the Group and its joint ventures, which are companies incorporated in India, are Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with
responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established reference to consolidated financial statements of the Holding Company, in so far as it relates to the subsidiary companies, and joint
by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial ventures, which are companies incorporated in India, is based on the corresponding reports of the auditors of such subsidiaries and joint
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, ventures incorporated in India.
implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient for S.R. Batliboi & Associates LLP
conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection Chartered Accountants
of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as ICAI Firm Registration Number: 101049W/E300004
required under the Companies Act, 2013. per S Balasubrahmanyam
Partner
Auditor’s Responsibility
Membership Number: 053315
Our responsibility is to express an opinion on the Holding Company’s internal financial controls with reference to consolidated financial
UDIN: 21053315AAAABL7527
statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Place: Chennai
Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, specified under section 143(10) of the Act, to the extent Date: 14 May 2021
applicable to an audit of internal financial controls, both, issued by ICAI. Those Standards and the Guidance Note require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls
with reference to consolidated financial statements was established and maintained and if such controls operated effectively in all
material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to
consolidated financial statements and their operating effectiveness. Our audit of internal financial controls with reference to consolidated
financial statements included obtaining an understanding of internal financial controls with reference to consolidated financial
statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to
in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with
reference to consolidated financial statements.

Meaning of Internal Financial Controls With Reference to Consolidated Financial Statements

A company’s internal financial control with reference to consolidated financial statements is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal financial control with reference to consolidated financial statements includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reNect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to Consolidated Financial Statements
Because of the inherent limitations of internal financial controls with reference to consolidated financial statements, including the
possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls with reference to consolidated financial statements to future
periods are subject to the risk that the internal financial controls with reference to consolidated financial statements may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

CONSOLIDATED BALANCE SHEET CONSOLIDATED STATEMENT OF PROFIT AND LOSS

(All amounts in Indian Rupees millions, except share data and where otherwise stated)
(All amounts in Indian Rupees millions, except share data and where otherwise stated)
AS AT AS AT FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS NOTE PARTICULARS NOTE
31 MARCH 2021 31 MARCH 2020 31 MARCH 2021 31 MARCH 2020
Assets Income
Non-current assets Sales 2.13 184,202 163,574
Property, plant and equipment 2.1 47,322 47,779 Service income and License fees 2.13 5,520 11,026
Capital work-in-progress 9,539 4,364 Other operating income 2.14 753 570
Goodwill 2.2 5,599 4,913 Total revenue from operations 190,475 175,170
Other intangible assets 2.3 29,136 15,811 Other income 2.15 2,914 6,206
Intangible assets under development 2.4 6,112 10,987
Total income 193,389 181,376
Investment in equity accounted investees 2.5 3,375 2,763
Financial assets
ExpensesInvestments 2.6 A 4,958 328
Trade receivables 2.6 B 118 1,737 Cost of materials consumed 42,958 29,848
Other financial assets 2.6 C 768 793 Purchase of stock-in-trade 25,736 25,459
Deferred tax assets, net 2.29 10,686 12,199 Changes in inventories of finished goods, work-in-progress and stock-in-trade 2.16 (7,905) 237
Tax assets, net 2,745 4,379 Employee benefits expense 2.17 36,299 33,802
Other non-current assets 2.7 A 307 209 Depreciation and amortisation expense 2.18 12,288 11,631
120,665 106,262 Impairment of non-current assets 6,768 16,767
Current assets Finance costs 2.19 970 983
Inventories
Financial assets 2.8 45,412 35,067 Sellingexpenses
Total and other expenses 2.20 47,920
165,034 44,353
163,080
Investments 2.6 A 19,744 23,687 Profit before tax and before share of equity accounted investees 28,355 18,296
Trade receivables 2.6 B 49,641 50,278
Derivative instruments 2.30 1,218 1,105 Share of profit of equity accounted investees, net of tax 480 561
Cash and cash equivalents 2.6 D 14,829 2,053
Other financial assets 2.6 C 1,858 3,377
Profit before tax 28,835 18,857
Other current assets 2.7 B 12,650 10,424
Total current assets before assets held for sale 145,352 125,991
Assets held for sale 151 - Tax expense/(benefit) 2.29
145,503 125,991 Current tax 8,172 6,616
Total assets 266,168 232,253 Deferred tax 1,147 (8,019)
Profit for the year 19,516 20,260
Equity and Liabilities
Equity Other comprehensive income (OCI)
Equity share capital 2.9 832 831 Items that will not be reclassified subsequently to profit or loss 4,026 (412)
Other equity 175,585 155,157 Income tax on items that will not be reclassified subsequently to profit or loss (220) (22)
176,417 155,988 3,806 (434)
Liabilities
Non-current liabilities Items that will be reclassified subsequently to profit or loss 1,913 (448)
Financial Liabilities Income tax on items that will be reclassified subsequently to profit or loss (319) 232
Borrowings 2.10 A 6,299 1,304 1,594 (216)
Provisions 2.11 A 508 745
Deferred tax liabilities, net 2.29 289 20 Total other comprehensive income/(loss) for the year, net of tax 5,400 (650)
Other non-current liabilities 2.12 A 1,617 2,055
8,713 4,124 Total comprehensive income for the year 24,916 19,610
Current liabilities
Borrowings 2.10 B 23,145 16,532 Profit for the year
Financial Liabilities
Trade payables 2.10 D Attributable to:
Total outstanding dues of micro enterprises and small enterprises 158 55 Equity holders of the parent 19,516 20,260
Total outstanding dues of creditors other than micro enterprises and small enterprises 17,951 15,193 Non-controlling interests - -
Derivative instruments 2.30 326 1,602 Total comprehensive income for the year
Other financial liabilities 2.10 C 24,281 27,006 Attributable to:
Liabilities for current tax, net 1,388 572 Equity holders of the parent 24,916 19,610
Provisions 2.11 B 5,015 4,669 Non-controlling interests - -
Other current liabilities 2.12 B 8,774 6,512
81,038 72,141 Earnings per share:
Total equity and liabilities 266,168 232,253 Basic earnings per share of ` 5/- each 2.23 117.67 122.22
The accompanying notes are an integral part of consolidated financial statements. Diluted earnings per share of ` 5/- each 2.23 117.34 121.99

As per our report of even date attached for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited The accompanying notes are an integral part of consolidated financial statements.
for S.R. Batliboi & Associates LLP
Chartered Accountants As per our report of even date attached for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited
ICAI Firm Registration Number: 101049W/E300004 K Satish Reddy Chairman , DIN: 00129701 for S.R. Batliboi & Associates LLP
per S Balasubrahmanyam G V Prasad Co-Chairman & Managing Director, DIN: 00057433 Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004 K Satish Reddy Chairman , DIN: 00129701
Partner Erez Israeli Chief Executive Officer
per S Balasubrahmanyam G V Prasad Co-Chairman & Managing Director, DIN: 00057433
Membership Number: 053315 Parag Agarwal Chief Financial Officer
Partner Erez Israeli Chief Executive Officer
Sandeep Poddar Company Secretary
Membership Number: 053315 Parag Agarwal Chief Financial Officer
Place: Chennai Place: Hyderabad Sandeep Poddar Company Secretary
Date: 14 May 2021 Date: 14 May 2021 Place: Chennai Place: Hyderabad
Date: 14 May 2021 Date: 14 May 2021
 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Dr. Reddy’s Laboratories Limited

(All amounts in Indian Rupees millions, except share data and where otherwise stated)
Other components of equity
Equity Reserves and surplus Other comprehensive income
PARTICULARS share Treasury SecuritiesShare- Capital Capital General Special Retained Cash Now FVTOCI** (9) RemeasurementsForeign Total equity
capital shares(1) premium(2)based reserve(4) redemption (5) reserve(6) economic zoneearningshedge of the net defined currency
payment reserve re-investment reserve(8) benefits plan(10) translation
reserve(3) reserve(7) reserve(11)
Balance as at 1 April 2020 (A) 831 (1,006) 5,916 1,038 267 173 20,374 - 128,349 (563) (3,523) (54) 4,186 155,988
Profit for the year - - - - - - - - 19,516 - - - - 19,516
Net change in fair value of FVTOCI** equity instruments and debt - - - - - - - - 3,956 - - 3,956
instruments, net of tax expense of ` 293 - -
Transfer on disposal of equity instruments classified as FVTOCI** - - - - - - - - 3 - (3) - - -
Foreign currency translation adjustments, net of tax benefit of ` Nil - - - - - - - - - - - 783 783
Effective portion of changes in fair value of cash Now hedges,
- - - - - - - - - 804 - - - 804
net of tax expense of ` 319 (Refer note 2.30)
Actuarial gain/(loss) on post-employment benefit obligations, - - - - - - - - - (143) - (143)
- -
net of tax benefit of ` 73 (Refer note 2.27)
Total comprehensive income (B) - - - - - - - - 19,519 804 3,953 (143) 783 24,916
Transactions with owners of the Company
Contributions and distributions
Issue of equity shares on exercise of options (Refer note 2.9) 1 232 392 (356) - - - - - - - - - 269
Share-based payment expense (Refer note 2.28) - - - 584 - - - - - - - - - 584
Purchase of treasury shares - (1,193) - - - - - - - - - - - (1,193)
Dividend paid - - - - - - - - (4,147) - - - - (4,147)
Total contributions and distributions 1 (961) 392 228 - - - - (4,147) - - - - (4,487)
Changes in ownership interests
Total transactions with owners of the Company (C) 1 (961) 392 228 - - - - (4,147) - - - - (4,487)
Transfer to special economic zone re-investment reserve - - - - - - - 1,402 (1,402) - - - - -
Transfer from special economic zone - - - - - (76) 76 - - - - -
- -
Transfer to special
re-investment economic
reserve zone
on utilization - - - - - 1,326 (1,326) - - - - -
- -
Balance as at 31 March 2021 [(A)+(B)+(C)+(D)] 832 (1,967) 6,308 1,266 267 173 20,374 1,326 142,395 241 430 (197) 4,969 176,417
re-investment reserve, net (D)(7)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

Other components of equity
Reserves and surplus Other comprehensive income
Equity
PARTICULARS share Treasury SecuritiesShare- Capital Capital General Special Retained Cash Now FVTOCI**(9) Remeasurements Foreign Total equity
capital shares(1) premium(2)based reserve(4) redemption reserve(6) economic zoneearningshedge of the net defined currency
payment reserve(3) reserve(5) re-investment reserve(8) benefits plan(10) translation
reserve(7) reserve(11)
Balance as at 1 April 2019 (A) 830 (535) 5,631 795 267 173 20,374 - 112,000 156 (3,042) (89) 3,676 140,236
Profit for the year - - - - - - - - 20,260-----------------------------------------------------------------20,260
Net change in fair value of FVTOCI** equity instruments and debt - - - - - - - - - - (476) - - (476)
instruments, net of tax expense of ` Nil
Transfer on disposal of equity instruments classified as FVTOCI** - 5 (5) -
Foreign currency translation adjustments, net of tax benefit of ` Nil - - - - - - - - - - - - 510
510
Effective portion of changes in fair value of cash Now hedges,
- - - - - - - - - (719) - - - (719)
net of tax benefit of ` 232 (Refer note 2.30)
Actuarial gain/(loss) on post-employment benefit obligations,
net of tax expense of ` 22 (Refer note 2.27) - - - - - - - - - - - 35 - 35
Total comprehensive income (B) - - - - - - - - 20,265 (719) (481) 35 510 19,610
Transactions with owners of the
Company Contributions and distributions
Company Overview

Issue of equity shares on exercise of options (Refer note 2.9) 1 3 285 (278) - - - - - - - - - 11
Share-based payment expense (Refer note 2.28) - - - 521 - - - - - - - - - 521
Purchase of treasury shares - (474)--------------------------------------------------------------------------------------------------------------------------------------------------------------------------(474)
Dividend paid (including dividend distribution tax) - - - - - - - - (3,916)----------------------------------------------------------------------(3,916)
Total contributions and distributions 1 (471) 285 243 - - - - (3,916)----------------------------------------------------------------------(3,858)
Changes in ownership interests
Total transactions with owners of the Company (C) 1 (471) 285 243 - - - - (3,916)----------------------------------------------------------------(3,858)
Balance as at 31 March 2020 [(A)+(B)+(C)] 831 (1,006) 5,916 1,038 267 173 20,374 - 128,349 (563) (3,523) (54) 4,186 155,988
Statutory Reports

* Rounded off to millions.

**FVTOCI represents fair value through other comprehensive income.
(1) Pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on 27 July 2018, the Dr. Reddy’s Employees ESOS Trust (the “ESOS Trust”) was formed to support the Dr. Reddy’s Employees Stock Option Scheme, 2018 by
acquiring, including through secondary market acquisitions, equity shares which are used for issuance to eligible employees upon exercise of stock options thereunder. Refer to note 2.28 of these consolidated financial statements for further details on the
Dr. Reddy’s Employees Stock Option Scheme, 2018.
(2) Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.

(3) Share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to note 2.28 for further details of these plans.

(4) The Company recognises profit or loss on purchase, sale, issue or cancellation of the Company’s own equity instruments to capital reserve.
Financial Statements

(5) As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The

reserve is utilised in accordance with the provisions of Section 69 of the Companies Act, 2013.
(6) The general reserve is a free reserve which is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive

income, items included in the general reserve will not be reclassified subsequently to consolidated statement of profit and loss.
(7) The Company has created a Special Economic Zone (“SEZ”) Reinvestment Reserve out of profits of its eligible SEZ Units in accordance with the terms of Section 10AA(1) of the Indian Income Tax Act, 1961. This reserve is to be utilized by the Company for acquiring Plant

and Machinery in accordance with Section 10AA(2) of such Act.

(8) The cash Now hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash Now hedges. Such gains or losses will be reclassified to consolidated

statement of profit and loss in the period in which the hedged transaction occurs.
(9) This reserve represents mark to market gain or loss on financial assets classified as FVTOCI. Depending on the category and type of the financial asset, the mark to market gain or loss is either reclassified to profit and loss account or retained earnings upon disposal

of the investment.
(10) Remeasurements of the net defined benefits plan reserve comprises the cumulative net gains� losses on actuarial valuation of post-employment obligations. Refer note 2.27 for further details

(11) The exchange differences arising from the translation of financial statements of foreign operations with functional currency other than Indian rupees is recognised in other comprehensive income, net of taxes and is presented within equity in the foreign currency

translation reserve.
The accompanying notes are an integral part of consolidated financial statements.
Annual Report 2020-21

As per our report of even date attached for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited
for S.R. Batliboi & Associates LLP
Chartered Accountants K Satish Reddy Chairman , DIN: 00129701
ICAI Firm Registration Number: 101049W/E300004 G V Prasad Co-Chairman & Managing Director, DIN: 00057433
per S Balasubrahmanyam Erez Israeli Chief Executive Officer
Membership Number: 053315 Parag Agarwal Chief Financial Officer
Partner Sandeep Poddar Company Secretary
Place: Hyderabad Place: Chennai
Date: 14 May 2021 Date: 14 May 2021
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

CONSOLIDATED STATEMENT OF CASH FLOW

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated) (All amounts in Indian Rupees millions, except share data and per share data)

FOR THE YEAR ENDED FOR THE YEAR ENDED

PARTICULARS
31 MARCH 2021 31 MARCH 2021
NOTE 1 | DESCRIPTION OF THE GROUP AND SIGNIFICANT ACCOUNTING POLICIES
Cash Nows from � (used in) operating activities 1.1 DESCRIPTION OF THE GROUP
Profit before ta� 28,835 18,857 Dr. Reddy’s Laboratories Limited (the “parent company”), together with its subsidiaries and joint ventures (collectively, the
Adjustments for: “Company”), is a leading India-based pharmaceutical company headquartered and having its registered office in Hyderabad,
Fair value gain on financial instruments at fair value through profit or loss (557) (929) Telangana, India. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products
Depreciation and amortisation expense 12,288 11,631 – the Company offers a portfolio of products and services, including Active Pharmaceutical Ingredients (“APIs”), Custom Pharmaceutical
Impairment of non-current assets 6,768 16,767 Services (“CPS”), generics, biosimilars and differentiated formulations.
Allowance for credit losses (on trade receivables and other advances) 230 190
The Company’s principal research and development facilities are located in the states of Telangana and Andhra Pradesh in India, Cambridge
Loss/(gain) on sale or de-recognition of non-current assets, net 42 68
Share of profit of equity accounted investees (480) (561) in the United Kingdom and Leiden in the Netherlands; its principal manufacturing facilities are located in the states of Telangana,
Foreign exchange loss/(gain), net 1,853 (2,152) Andhra Pradesh and Himachal Pradesh in India, Cuernavaca-Cuautla in Mexico, Mirfield in the United Kingdom, and Louisiana in the
Interest income (826) (888) United States; and its principal markets are in India, Russia, the United States, the United Kingdom, and Germany. The Company’s shares
Finance costs 970 983 trade on the Bombay Stock Exchange, the National Stock Exchange, the NSE IFSC Limited in India and on the New York Stock Exchange in
Equity settled share-based payment expense 584 521 the United States.
Dividends income -* (5) Please refer note 2.26 for list of subsidiaries, step-down subsidiaries and joint ventures of the parent company.
Changes in operating assets and liabilities:
Trade receivables 2,081 (12,446)
Inventories (9,881) (1,487)
Trade payables 2,861 1,576 1.2 BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
Other assets and other liabilities, net (3,349) 4,821 a) Statement of compliance
Cash generated from operations 41,419 36,946 These consolidated financial statements as of and for the year ended 31 March 2021 comply in all material aspects with the
Income tax paid, net (5,716) (7,105)
Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules 2015, and
Net cash from operating activities 35,703 29,841
presentation requirements of Division II of Schedule III to the Companies Act, 2013, and as amended from time to time together
Cash Nows from � (used in) investing activities
with the comparative period data as at and for the year ended 31 March 2020.
Expenditures on property, plant and equipment (9,741) (4,846) These consolidated financial statements have been prepared by the Company as a going concern on the basis of relevant Ind
Proceeds from sale of property, plant and equipment 85 131 AS that are effective or elected for early adoption at the Company’s annual reporting date, 31 March 2021 These consolidated
Expenditures on other intangible assets (2,820) (1,269) financial statements were authorised for issuance by the Company’s Board of Directors on 14 May 2021.
Proceeds from sale of other intangible assets - 259
Payment for acquisition of business (Refer note 2.40 for details) (15,514) - b) Basis of measurement
Purchase of investments (75,418) (111,918) These consolidated financial statements have been prepared on the historical cost convention and on an accrual basis, except for the
Proceeds from sale of investments 79,528 111,704 following material items in the balance sheet:
Dividend received from equity accounted investees - 392
• derivative financial instruments are measured at fair value;
Interest and dividend received 1,220 624
Net cash used in investing activities (22,660) (4,923) • financial assets are measured either at fair value or at amortised cost, depending on the classification;
• employee defined benefit assets/(liabilities) are recognised as the net total of the fair value of plan assets, adjusted for actuarial
Cash Nows from � (used in) financing activities
gains/(losses) and the present value of the defined benefit obligation;
Proceeds from issuance of equity shares (including treasury shares) 269 4 • long-term borrowings are measured at amortised cost using the effective interest rate method;
Purchase of treasury shares (1,193) (474) • share-based payments are measured at fair value;
Proceeds from short-term loans and borrowings, net (Refer note 2.10 (h)) 6,791 4,235
• investments in joint ventures are accounted for using the equity method;
Proceeds from long-term loans and borrowings (Refer note 2.10 (h)) 3,800 -
Repayment of long-term loans and borrowings (Refer note 2.10 (h)) (3,743) (22,918) • assets held for sale are measured at fair value;
Payment of principal portion of lease liabilities (Refer note 2.10 (h)) (754) (482) • assets acquired and liabilities assumed as part of business combinations are measured at fair value; and
Dividends paid (including corporate dividend tax for the year ended 31 March 2020) (4,147) (3,916) • right-of-use the assets are recognised at the present value of lease payments that are not paid at that date. This amount is
Interest paid (1,321) (1,608) adjusted for any lease payments made at or before the commencement date, lease incentives received and initial direct costs,
Net cash used in financing activities (298) (25,159) incurred, if any.

Net increase/ (decrease) in cash and cash equivalents 12,745 (241)

c) Functional and presentation currency
Effect of exchange rate changes on cash and cash equivalents 113 (25)
These consolidated financial statements are presented in Indian rupees, which is the functional currency of the parent company. All
Cash and cash equivalents at the beginning of the year (Refer note 2.6 D) 1,962 2,228
financial information presented in Indian rupees has been rounded to the nearest million.
Cash and cash equivalents at the end of the year (Refer note 2.6 D) 14,820 1,962
* Rounded off to millions� In respect of certain non-Indian subsidiaries that operate as marketing arms of the parent company in their respective
The accompanying notes are an integral part of consolidated financial statements. countries/ regions, the functional currency has been determined to be the functional currency of the parent company (i.e., the
Indian rupee). The operations of these entities are largely restricted to importing of finished goods from the parent company in
As per our report of even date attached for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited India, sales of these products in the foreign country and making of import payments to the parent company. The cash Nows realised
for S.R. Batliboi & Associates LLP from sales of goods are available for making import payments to the parent company and cash is paid to the parent company on a
Chartered Accountants regular basis. The cash Nows realised from sales of goods are available for making import payments to the parent company and
ICAI Firm Registration Number: 101049W/E300004 K Satish Reddy Chairman , DIN: 00129701
cash is paid to the parent company on a regular basis. The costs incurred by these entities are primarily the cost of goods imported
per S Balasubrahmanyam G V Prasad Co-Chairman & Managing Director, DIN:
00057433 from the parent company. The financing of these subsidiaries is done directly or indirectly by the parent company.
Partner Erez Israeli Chief Executive Officer In respect of subsidiaries whose operations are self-contained and integrated within their respective countries/regions, the functional
Membership Number: 053315 Parag Agarwal Chief Financial Officer currency has been generally determined to be the local currency of those countries/regions, unless use of a different currency
Sandeep Poddar Company Secretary is considered appropriate.
Place: Chennai Place: Hyderabad
Date: 14 May 2021 Date: 14 May 2021 d) Use of estimates and judgements
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
An entity should apply the amendments prospectively for annual periods beginning on or after 1 April 2020.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected. In particular, information about significant The amendments to the definition of material had no impact on the consolidated financial statements of the Company.
areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the Amendments to Ind AS 103: DeNnition of a Business
amounts recognised in the financial statements is included in the following notes� The amendments introduced a revised definition of a business for the purpose of identifying a business combination under
• Note 1.2(c) — Assessment of functional currency; Ind AS 103 “Business Combinations”. As per the revised definition, business is ‘an integrated set of activities and assets that is
• Note 1.3(b) — Evaluation of joint arrangements; capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment
income (such as dividends or interest) or generating other income from ordinary activities’.
• Note 1.3(d) — Financial instruments;
• Note 1.3(e) — Business combinations; A related amendment has been made to the definition of ‘output’ as an element of business.
• Notes 1.3(f) and 1.3(g) — Useful lives of property, plant and equipment and intangible assets; The amendments include an election to use a ‘concentration test’. This is a simplified assessment that would cause an
• Notes 1.3(h) – Determination of cost for right-of-use assets and lease term; acquisition to qualify as an asset acquisition. The concentration test is met if substantially all of the fair value of the gross
• Note 1.3(i) — Valuation of inventories; assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.
• Note 1.3(j) — Measurement of recoverable amounts of cash-generating units; An entity is required to apply the amendments to business combinations for which the acquisition date is on or after the beginning of
• Note 1.3(k) — Assets and obligations relating to employee benefits; the first annual reporting period beginning on or after the 1 April 2020 and to asset acquisitions that occur on or after the beginning
of that period.
• Note 1.3(k) — Share-based payments;
• Note 1.3(l) — Provisions and other accruals; This amendment had no impact on the consolidated financial statements of the Company but may impact future periods should the
Company enter into any business combinations.
• Note 1.3(m) — Measurement of transaction price in a revenue transaction (sales returns, rebates and chargeback provisions);
• Note 1.3(p) — Evaluation of recoverability of deferred tax assets, and estimation of income tax payable and income tax expense Ind AS 109 and Ind AS 107: Interest Rate Benchmark Reform
in relation to uncertain tax positions; and The amendments to Ind AS 109 “Financial Instruments” provide a number of reliefs, which apply to all hedging relationships that are
• Note 1.3(l) — Contingencies directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the
timing and/or amount of benchmark-based cash Nows of the hedged item or the hedging instrument.
e) Current and non-current classification The amendments to Ind AS 107 “Financial Instruments: Disclosures” prescribe the disclosures which entities are required to make for
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria hedging relationships to which the reliefs as per the amendments in Ind AS 109 are applied.
set out in the Schedule III to the Companies Act, 2013 and Ind AS 1, Presentation of Financial Statements.
These amendments are applicable for annual periods beginning on or after the 1 April 2020.
Assets:
An asset is classified as current when it satisfies any of the following criteria� These amendments had no impact on the consolidated financial statements of the Company as it does not have any interest
rate hedge relationships.
a) it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;
b) it is held primarily for the purpose of being traded; Amendments Ind AS 116: COVID-19 related rent concessions
Ind AS 116 has been amended to provide limited relief to lessees in respect of rent concessions arising due to COVID-19 pandemic.
c) it is expected to be realised within twelve months after the reporting date; or
No relief has been allowed to the lessors.
d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting date. The amendments provide a practical expedient that lessees may elect to not treat any rent concessions, provided by lessors as a direct
Liabilities: consequence of COVID-19 pandemic, as lease modifications. However, to be eligible for this relief:
A liability is classified as current when it satisfies any of the following criteria� • the revised consideration for the lease should be less than or equal to the lease consideration immediately before the change;
a) it is expected to be settled in the Company’s normal operating cycle; • the rent concession should be for a period that does not extend beyond 30 June 2021 (for example, lease rents are reduced for a
period upto 30 June 2021 and increased for periods thereafter); and
b) it is held primarily for the purpose of being traded;
• there should be no substantial modification to the other terms and conditions of the lease.
c) it is due to be settled within twelve months after the reporting date; or
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the Lessee should apply the amendments for annual reporting periods beginning on or after 1 April 2020. In case a lessee has not yet
reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity approved the financial statements for issue before the issuance of the amendments, then the same may be applied for annual
instruments do not affect its classification. reporting periods beginning on or after the 1 April 2019.
Current assets and liabilities include the current portion of non-current assets and liabilities respectively. All other assets and liabilities The aforesaid amendments had no impact on the consolidated financial statements of the Company.
are classified as non-current. Deferred tax assets and liabilities are always classified as non-current.
For the year ended 31 March 2020
f) Prior period Ind AS 116, “Leases”
Prior period amounts have been reclassified to conform to the current year classification. On 30 March 2019, the Ministry of Corporate Affairs (MCA) notified Ind AS 116, Leases as part of the Companies (Indian Accounting
Standards (Ind AS)) Amendment Rules, 2019. Ind AS 116 replaces existing standard on leases i.e. Ind AS 17, Leases with effect from
accounting periods beginning on or after 1 April 2019.
1.3 SIGNIFICANT ACCOUNTING POLICIES The new standard brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between
a) New Standards adopted by the Company operating and finance leases. Lessor accounting, however, remains largely unchanged and the distinction between operating and
On 24 July 2020, the Ministry of Corporate Affairs (MCA) has issued amendments to certain Ind AS as summarised below� finance leases is retained.

Amendments to Ind AS 1 and Ind AS 8: DeNnition of Material Impact of the implementation of Ind AS 116 on the Company:
The amendments provided a new definition to the word material as follows� The Company adopted Ind AS 116 effective as of 1 April 2019. Ind AS 116, �Leases� changed the financial statements of the
‘Information is material if omitting, misstating or obscuring it could reasonably be expected to inNuence decisions that the Company as the majority of leases for which the Company is the lessee became on-balance sheet liabilities with corresponding right-
primary users of general-purpose financial statements make on the basis of those financial statements, which provide financial of-use assets also recognised on the consolidated balance sheet. The lease liability reNects the net present value of the remaining
information about a specific reporting entity.’ lease payments adjusted for payments made before the commencement date, lease incentives and other items related to the lease
agreement, and the right-of-use asset corresponds to the lease liability.
The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination
with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be Upon adoption of the new standard, a portion of the annual operating lease costs, which was previously fully recognised as a rental/
expected to inNuence decisions made by the primary users. lease expense, is recorded as interest expense. In addition, the portion of the lease payments which represents the reduction
of the lease liability is recognised in the statement of cash Nows as an outNow from financing activities, which was previously
An information is considered to be obscured if it is communicated in a way that would have a similar effect for primary users of fully recognised as an outNow from operating activities.
financial statements to omitting or misstating that information. The amendments provided examples of circumstances that may result
in information being obscured.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

changed where necessary to align them with the policies adopted by the Company. Furthermore, the financial statements of the joint
NOTES TO THE CONSOLIDATED FINANCIAL ventures are prepared for the same reporting period as of the Company.

STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

The Company implemented the new standard on 1 April 2019, and applied the modified retrospective method, with right-of-use
assets measured at an amount equal to the lease liability, adjusted by the amount of the prepaid or accrued lease payments relating
to those leases recognised in the consolidated balance sheet immediately before the date of initial application and will not restate
prior years.
The Company elected to use the transition practical expedient that allows the standard to be applied only to contracts
previously identified under Ind AS 17, “Leases” and the contracts assessed using the guidance available under Appendix C to
Ind AS 17, “Determining Whether an Arrangement Contains a Lease”.
The Company also elected to use the recognition exemption for lease contracts that, at the commencement date, have a lease term
of 12 months or less and do not contain a purchase option (“short-term leases”) and lease contracts for which the underlying asset is
of low value (“low value assets”).
On 1 April 2019, the Company recognised lease liabilities of ` 1,335 (presented as part of borrowings) and right-of-use assets of `
1,153, after adjustments of ` 182 towards lease incentives and other items related to the lease agreement as at 31 March 2019
(presented as part of Property, plant and equipment).
Consequently, the Company has recognised an amount of ` 491 in depreciation expense and ` 230 in finance costs for the year ended
31 March 2020.
Adoption of the new standard had no impact upon leases for which the Company is a lessor.
Appendix C to Ind AS 12, “Uncertainty over Income Tax Treatments”
On 30 March 2019, the Ministry of Corporate Affairs (MCA) made certain amendments to Ind AS 12, Income taxes by including
Appendix C, Uncertainty over Income Tax Treatments. This appendix clarifies how the recognition and measurement requirements
of Ind AS 12 are applied where there is uncertainty over income tax treatments. It does not apply to taxes or levies outside the scope
of Ind AS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.
Appendix C explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty
over a tax treatment. An uncertain tax treatment is any tax treatment applied by an entity where there is uncertainty over
whether that treatment will be accepted by the applicable tax authority. For example, a decision to claim a deduction for a specific
expense or not to include a specific item of income in a tax return is an uncertain tax treatment if its acceptability is uncertain
under applicable tax law. The interpretation provides specific guidance in several areas where previously Ind AS 12 was silent.
Appendix C applies to all aspects of income tax accounting where there is an uncertainty regarding the treatment of an item,
including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates.
The Company applied the interpretation effective 1 April 2019 using the modified retrospective approach. The adoption of
Appendix C did not have any material impact on the financial statements of the Company.

b) Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including special purpose entities) that are controlled by the Company. Control exists when the Company
is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through
power over the entity. In assessing control, potential voting rights are considered only if the rights are substantive. The
financial statements of subsidiaries are included in these consolidated financial statements from the date that control
commences until the date that control ceases.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit
and loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
For the purpose of preparing these consolidated financial statements, the accounting policies of subsidiaries have been
changed where necessary to align them with the policies adopted by the Company.
Joint arrangements (equity accounted investees)
Joint arrangements are those arrangements over which the parties have joint control, established by contractual agreement
and requiring unanimous consent for strategic financial and operating decisions.
A joint arrangement is either a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint
venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the
arrangement.
With respect to joint operations, the Company recognises its direct right to the assets, liabilities, revenues and expenses of
joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses.
Investments in joint ventures are accounted for using the equity method and are initially recognised at cost. The carrying value of the
Company’s investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The Company
does not consolidate entities where the non-controlling interest (“NCI”) holders have certain significant participating rights that
provide for effective involvement in significant decisions in the ordinary course of business of such entities. Investments in such
entities are accounted by the equity method of accounting. When the Company’s share of losses exceeds its interest in an
equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to zero and the
recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on
behalf of the investee.
For the purpose of preparing these consolidated financial statements, the accounting policies of joint ventures have been
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in full while preparing these consolidated financial statements. Unrealised gains or losses arising from transactions
with equity accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee.
Changes in ownership interests
Acquisition of some or all of the NCI is accounted for as a transaction with equity holders in their capacity as equity holders.
Consequently, the difference arising between the fair value of the purchase consideration paid and the carrying value of the
NCI is recorded as an adjustment to retained earnings that is attributable to the parent company. The associated cash Nows are
classified as financing activities. No goodwill is recognised as a result of such transactions.
Loss of Control
Upon loss of control, the Company derecognises the assets and liabilities of the subsidiary, any NCIs and the other
components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the
consolidated statement of profit and loss. If the Company retains any interest in the previous subsidiary, then such interest is
measured at fair value at the date that control is lost. Subsequently, depending on the level of inNuence retained, it is accounted for
as an equity-accounted investee or as an investment measured at fair value through other comprehensive income (“FVTOCI”) or fair
value through profit or loss (“FVTPL”), under Ind AS 109.

c) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of entities within the Company at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the
reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items
that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was
measured.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from
those at which they were translated on initial recognition during the period or in previous financial statements are recognised
in the consolidated statement of profit and loss in the period in which they arise.
However, foreign currency differences arising from the translation of the following items are recognised in other
comprehensive income (“OCI”):
• certain debt instruments classified as measured at FVTOCI;
• certain equity instruments where the Company had made an irrevocable election to present in OCI subsequent changes in
the fair value;
• a financial liability designated as a hedge of the net investment in a foreign operation, to the extent that the hedge is effective;
and
• qualifying cash Now hedges, to the extent that the hedges are effective.
When several exchange rates are available, the rate used is that at which the future cash Nows represented by the transaction
or balance could have been settled if those cash Nows had occurred at the measurement date.
Foreign operations
Foreign exchange gains and losses arising from a monetary item receivable from a foreign operation, the settlement of which
is neither planned nor likely in the foreseeable future, are considered to form part of the net investment in the foreign operation and
are recognised in OCI and presented within equity as foreign currency translation reserve (“FCTR”).
In case of foreign operations whose functional currency is different from the parent company’s functional currency, the assets
and liabilities of such foreign operations, including goodwill and fair value adjustments arising upon acquisition, are translated
to the reporting currency at exchange rates at the reporting date. The income and expenses of such foreign operations are
translated to the reporting currency at the monthly average exchange rates prevailing during the year. Resulting foreign currency
differences are recognised in OCI and presented within equity as part of FCTR. When a foreign operation is disposed of, in part or in
full, such that control, significant inNuence or joint control is lost, the relevant amount in the FCTR is reclassified to the consolidated
statement of profit and loss.

d) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or
loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation or convention in the market place (e.g., regular way trades)
are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant
financing components, in which case they are recognised at fair value. The Company’s trade receivables do not contain any
significant financing component and hence are measured at the transaction price measured under Ind AS 115 “Revenue from
Contracts with Customers”.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
When the Company has transferred its rights to receive cash Nows from an asset or has entered into a pass-through
Subsequent measurement arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
For purposes of subsequent measurement, financial assets are classified in four categories: transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
• Debt instruments at amortised cost; Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the
• Debt instruments at FVTOCI; Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that
reNects the rights and obligations that the Company has retained.
• Debt instruments, derivatives and equity instruments at FVTPL; and
• Equity instruments measured at FVTOCI. Impairment of trade receivables and other financial assets
In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and recognition of
Debt instruments at amortised cost impairment loss on trade receivables or any contractual right to receive cash or another financial asset.
A “debt instrument” is measured at the amortised cost if both the following conditions are met:
For this purpose, the Company follows a “simplified approach� for recognition of impairment loss allowance on the trade
a) the asset is held within a business model whose objective is to hold assets for collecting contractual cash Nows; and
receivable balances. The application of this simplified approach does not require the Company to track changes in credit risk. Rather,
b) contractual terms of the asset give rise on specified dates to cash Nows that are solely payments of principal and interest it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
(“SPPI”) on the principal amount outstanding.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and
and are subject to impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in
or costs that are an integral part of the effective interest rate. the forward-looking estimates are analysed.
Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or Financial liabilities
loss arising on derecognition is recognised directly in profit and loss and presented in other gains�(losses). The losses arising from Initial recognition and measurement
impairment are recognised in the consolidated statement of profit and loss. Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives
This category generally applies to trade and other receivables. designated as hedging instruments in an effective hedge, as appropriate.
Debt instrument at FVTOCI All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
A “debt instrument” is classified as at the FVTOCI if both of the following criteria are met: attributable transaction costs.
a) the objective of the business model is achieved both by collecting contractual cash Nows and selling the financial assets; and The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and
b) the asset’s contractual cash Nows represent SPPI. derivative financial instruments.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value Subsequent measurement
movements are recognised in the OCI. However, the Company recognises interest income, impairment losses and reversals and The measurement of financial liabilities depends on their classification, as described below:
foreign exchange gain or loss in the consolidated statement of profit and loss. On derecognition of the asset, cumulative gain or loss Financial liabilities at FVTPL
previously recognised in OCI is reclassified to the consolidated statement of profit and loss. Interest earned while holding a FVTOCI Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition
debt instrument is reported as interest income using the effective interest rate method. as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
Debt instrument at FVTPL term. This category also includes derivative financial instruments entered into by the Company that are not designated as
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for
amortised cost or as FVTOCI, is classified as at FVTPL. trading unless they are designated as effective hedging instruments.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, Gains or losses on liabilities held for trading are recognised in the consolidated statement of profit and loss.
as FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of recognition, and
(referred to as an “accounting mismatch”). only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains� losses attributable to changes in
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the own credit risk are recognised in OCI. These gains or losses are not subsequently transferred to the consolidated statement of profit
consolidated statement of profit and loss. and loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability
are recognised in the consolidated statement of profit and loss. The Company has not designated any financial liability as FVTPL.
Equity investments
All equity investments within the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading Loans and borrowings
and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies, are classified as at Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in OCI subsequent changes amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the
in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made upon consolidated statement of profit and loss over the period of the borrowings using the effective interest method.
initial recognition and is irrevocable. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding interest rate method. Gains and losses are recognised in the consolidated statement of profit and loss when the liabilities are
dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the consolidated statement of profit and derecognised as well as through the effective interest rate amortisation process.
loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part
investments designated as FVTOCI are not subject to impairment assessment. of the effective interest rate. The effective interest rate amortisation is included as finance costs in the consolidated statement
Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the of profit and loss.
consolidated statement of profit and loss. Derecognition
Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing
derecognised (i.e. removed from the Company’s consolidated balance sheet) when: liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and
• the rights to receive cash Nows from the asset have expired; or the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated statement of
profit and loss.
• both (1) the Company has transferred its rights to receive cash Nows from the asset or has assumed an obligation to pay the
received cash Nows in full without material delay to a third party under a “pass-through” arrangement; and (2) either (a) the Derivative financial instruments
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor The Company is exposed to exchange rate risk which arises from its foreign exchange revenues and expenses, primarily in US dollars,
retained substantially all the risks and rewards of the asset, but has transferred control of the asset. UK pounds sterling, Russian roubles, Brazilian reals, Swiss francs, South African rands, Kazakhstan tenges, Romanian new leus,
Australian dollars and Euros, and foreign currency debt in US dollars, Russian roubles, South African rands, Mexican pesos, Ukrainian
hryvnias and Brazilian reals.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
The excess of the sum of:
The Company uses derivative financial instruments such as foreign exchange forward contracts, option contracts and swap contracts • the consideration transferred;
to mitigate its risk of changes in foreign currency exchange rates. The Company also uses non-derivative financial instruments as part
• the amount of any non-controlling interest in the acquired entity; and
of its foreign currency exposure risk mitigation strategy. Derivatives are classified as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative. • the acquisition-date fair value of any previous equity interest in the acquired entity.

Hedges of highly probable forecasted transactions over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
The Company classifies its derivative financial instruments that hedge foreign currency risk associated with highly probable forecasted net identifiable assets of the business acquired, the difference is recognised directly in the consolidated statement of profit and loss
transactions as cash Now hedges and measures them at fair value. The effective portion of such cash Now hedges is recorded in the as a bargain purchase.
Company’s hedging reserve as a component of equity and re-classified to the consolidated statement of profit and loss as part of the Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
hedged item in the period corresponding to the occurrence of the forecasted transactions. The ineffective portion of such cash Now present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a
hedges is recorded in the consolidated statement of profit and loss as finance costs immediately. similar borrowing could be obtained from an independent financier under comparable terms and conditions.
The Company also designates certain non-derivative financial liabilities, such as foreign currency borrowings from banks, as hedging Contingent consideration is classified either as equity or a financial liability. Contingent consideration classified as equity is not re-
instruments for hedge of foreign currency risk associated with highly probable forecasted transactions. Accordingly, the measured and its subsequent settlement is accounted for within equity. Amounts classified as a financial liability are subsequently re-
Company applies cash Now hedge accounting to such relationships. Remeasurement gain or loss on such non-derivative financial measured to fair value, with changes in fair value recognised in the consolidated statement of profit and loss. If the business
liabilities is recorded in the Company’s hedging reserve as a component of equity and reclassified to the consolidated statement of combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree
profit and loss as part of the hedged item in the period corresponding to the occurrence of the forecasted transactions. is re-measured to fair value at the acquisition date. Any gains or losses arising from such re-measurement are recognised in the
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge consolidated statement of profit and loss.
accounting is discontinued prospectively. The cumulative gain or loss previously recognised in OCI, remains there until the forecasted
f) Property, plant and equipment
transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in OCI is recognised immediately in
Recognition and measurement
the consolidated statement of profit and loss.
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
Hedges of recognised assets and liabilities losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-
Changes in the fair value of derivative contracts that economically hedge monetary assets and liabilities in foreign currencies, constructed assets includes the cost of materials and other costs directly attributable to bringing the asset to a working
and for which no hedge accounting is applied, are recognised in the consolidated statement of profit and loss. The changes in fair condition for its intended use. Borrowing costs that are directly attributable to the construction or production of a qualifying asset
value of such derivative contracts, as well as the foreign exchange gains and losses relating to the monetary items, are are capitalised as part of the cost of that asset.
recognised in the consolidated statement of profit and loss. If the hedged item is derecognised, the unamortised fair value is
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
recognised immediately in the consolidated statement of profit and loss.
components) of property, plant and equipment.
Hedges of changes in the interest rates
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal
Consistent with its risk management policy, the Company uses interest rate swaps to mitigate the risk of changes in interest
with the carrying amount of property, plant and equipment and are recognised net within “Other income/ Selling and other expense,
rates. The Company does not use them for trading or speculative purposes.
net” in the consolidated statement of profit and loss.
Cash and cash equivalents
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily
probable that the future economic benefits embodied within the part will Now to the Company and its cost can be measured reliably.
convertible into known amounts of cash and which are subject to insignificant risk of changes in value. For this purpose, �short-
The costs of repairs and maintenance are recognised in the consolidated statement of profit and loss as incurred.
term� means investments having original maturities of three months or less from the date of investment. Bank overdrafts that are
repayable on demand form an integral part of the Company’s cash management and are included as a component of cash and cash Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair value, unless
equivalents for the purpose of the consolidated statement of cash Nows. the exchange transaction lacks commercial substance or the fair value of either the asset received or asset given up is not
reliably measurable, in which case the asset exchanged is recorded at the carrying amount of the asset given up.
e) Business combinations
Depreciation
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or
Depreciation is recognised in the consolidated statement of profit and loss on a straight line basis over the estimated useful lives
other assets are acquired. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied
of property, plant and equipment. Land is not depreciated but subject to impairment.
in determining the acquisition date and determining whether control is transferred from one party to another. Control exists when the
Company is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those Depreciation methods, useful lives and residual values are reviewed at each reporting date and any changes are considered
returns through power over the entity. In assessing control, potential voting rights are considered only if the rights are substantive. prospectively.
The Company determines that it has acquired a business when the acquired set of activities and assets include an input and a The estimated useful lives are as follows:
substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered
substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with PARTICULARS YEARS
the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue
Buildings
producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the
ability to continue producing outputs. - Factory and administrative buildings 20 to 50
The consideration transferred for the acquisition of a subsidiary is comprised of: - Ancillary structures 3 to 15
• fair values of the assets transferred; Plant and equipment 3 to 15
• liabilities incurred to the former owners of the acquired business; Furniture, fixtures and office equipment 3 to 10
• equity interests issued by the Company; Vehicles 4 to 5
• fair value of any asset or liability resulting from a contingent consideration arrangement; and
Schedule II to the Companies Act, 2013 (“Schedule”) prescribes the useful lives for various classes of tangible assets. For certain class
• fair value of any pre-existing equity interest in the subsidiary.
of assets, based on the technical evaluation and assessment, the Company believes that the useful lives adopted by it best represent
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, the period over which an asset is expected to be available for use. Accordingly, for these assets, the useful lives estimated by
measured initially at their fair values at the acquisition date. The Company recognises any non-controlling interest in the the Company are different from those prescribed in the Schedule.
acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the
Software for internal use, which is primarily acquired from third-party vendors and which is an integral part of a tangible asset,
acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred.
including consultancy charges for implementing the software, is capitalised as part of the related tangible asset. Subsequent
costs associated with maintaining such software are recognised as expense as incurred. The capitalised costs are amortised
over the estimated useful life of the software or the remaining useful life of the tangible fixed asset, whichever is lower.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property,
plant and equipment not ready to use before such date are disclosed under other non-current assets. Assets not ready for use are not
depreciated but are tested for impairment.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
The amortisation period and the amortisation method for intangible assets with a finite useful life are reviewed at each reporting date.
g) Goodwill and other intangible assets
Recognition and measurement Goodwill, intangible assets relating to products in development, other intangible assets not available for use and intangible
assets having indefinite useful life are subject to impairment testing at each reporting date. All other intangible assets are tested for
Goodwill Goodwill represents the excess of consideration transferred, together with the amount of non- impairment when there are indications that the carrying value may not be recoverable. All impairment losses are recognised
controlling interest in the acquiree, over the fair value of the Company’s share of identifiable net assets immediately in the consolidated statement of profit and loss under �Impairment of non-current assets”.
acquired.
De-recognition of intangible assets
Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, Intangible assets are de-recognised either on their disposal or where no future economic benefits are expected from their use. Losses
the carrying amount of goodwill is included in the carrying amount of the investment, and any arising on such de-recognition are recorded in the consolidated statement of profit and loss, and are measured as the difference
impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of
the carrying value of the equity accounted investee.
Other intangible Other intangible assets that are acquired by the Company and that have finite useful lives are between the net disposal proceeds, if any, and the carrying amount of respective intangible assets as at the date of de-recognition.
assets measured at cost less accumulated amortisation and accumulated impairment losses. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition. h) Leases
As explained in note 1.3(a) above, the Company has changed its accounting policy for leases where the Company is the lessee.
Research and Expenditures on research activities undertaken with the prospect of gaining new scientific or technical
The new policy is described below. Refer note 1.3(a) for the impact of the change in accounting policy.
development knowledge and understanding are recognised in the consolidated statement of profit and loss when
incurred. The Company assesses at contract inception whether a contract is or contains a lease, which applies, if the contract conveys the right
Development activities involve a plan or design for the production of new or substantially improved products to control the use of the identified asset for a period of time in exchange for consideration. The Company recognises a right-of-
and processes. Development expenditures are capitalised only if: use asset at the commencement date of the lease, i.e. the date the underlying asset is available for use. Assets and liabilities arising
• development costs can be measured reliably; from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease
• the product or process is technically and commercially feasible; payments to be made over the lease term:
• future economic benefits are probable and • fixed payments (including in-substance fixed payments), less any lease incentives receivable
• the Company intends to, and has sufficient resources to complete development and to use or sell the • variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement
asset. date
The expenditures to be capitalised include the cost of materials and other costs directly attributable to • amounts expected to be payable by the Company under residual value guarantees
preparing the asset for its intended use. Other development expenditures are recognised in the consolidated • the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and
statement of profit and loss as incurred. As of 31 March 2021, none of the development expenditure
• payments of penalties for terminating the lease, if the lease term reNects the Company exercising that option.
Separate acquisition amounts has met the aforesaid recognition criteria.
of intangible assets Payments to third parties that generally take the form of up-front payments and milestones for in- The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
licensed products, compounds and intellectual property are capitalised. The Company’s criteria for is generally the case for leases in the Company, then the lessee’s incremental borrowing rate is used. Such borrowing rate is
capitalisation of such assets are consistent with the guidance given in paragraph 25 of Indian calculated as the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar
Accounting Standard (“Ind AS 38”) (i.e., the receipt of economic benefits embodied in each intangible asset value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The Company’s lease
separately purchased or licensed in the transaction is considered to be probable). liabilities are included in borrowings.
In-Process Research
and Development Acquired research and development intangible assets that are under development are recognised as Lease payments are allocated between principal and interest cost. The interest cost is charged to profit or loss over the lease period
assets (“IPR&D”) In-Process Research and Development assets (“IPR&D”) or intangible assets under development. Intangible so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
or Intangible assets assets under development are not amortised, but evaluated for potential impairment on an annual basis or
under development Right-of-use assets are measured at cost less accumulated depreciation and accumulated impairment comprised of the following:
when there are indications that the carrying value may not be recoverable. Any impairment charge on such
intangible assets under development assets is recorded in the consolidated statement of profit and loss • the amount of the initial measurement of lease liability
under “Impairment of non-current assets”. • any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs, and
Subsequent expenditure
• restoration costs.
Other intangible Subsequent expenditures are capitalised only when they increase the future economic benefits embodied in Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
assets the specific asset to which they relate. All other expenditures, including expenditures on internally generated
goodwill and brands, is recognised in the consolidated statement of profit and loss as incurred. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
In-Process Research straight-line basis as an expense in consolidated statement of profit and loss. Short-term leases are leases with a lease term of
Subsequent expenditure on an IPR&D or intangible assets under development project acquired separately or
and Development 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
in a business combination and recognised as an intangible asset is:
assets (“IPR&D”) • recognised as an expense when incurred, if it is a research expenditure; The right-of-use assets are initially recognised on the consolidated balance sheet at cost, which is calculated as the amount of
or Intangible assets the initial measurement of the corresponding lease liability, adjusted for any lease payments made at or prior to the commencement
• recognised as an expense when incurred, if it is a development expenditure that does not satisfy the
under development
criteria for recognition as an intangible asset in paragraph 57 of Ind AS 38; and date of the lease, any lease incentive received and any initial direct costs incurred by the Company.
• added to the carrying amount of the acquired IPR&D project, if it is a development expenditure that
satisfies the recognition criteria in paragraph 57 of Ind AS 38. i) Inventories
Inventories consist of raw materials, stores and spares, work-in-progress and finished goods and are measured at the lower of cost
and net realisable value. The cost of all categories of inventories is based on the weighted average method. Cost includes
Amortisation expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to
their existing
Amortisation is recognised in the consolidated statement of profit and loss on a straight-line basis over the estimated useful lives of
intangible assets. The amortization expense is recognised in the statement of profit and loss account in the expense category that is
consistent with the function of the intangible asset. Intangible assets that are not available for use are amortised from the date they
are available for use.
The estimated useful lives are as follows:

PARTICULARS YEARS
Product related intangibles 3 to 20
Other intangibles 3 to 15
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads based
on normal operating capacity. Stores and spares consists of packing materials, engineering spares (such as machinery spare parts)
and consumables (such as lubricants, cotton waste and oils), which are used in operating machines or consumed as indirect
materials in the manufacturing process.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
The factors that the Company considers in determining the provision for slow moving, obsolete and other non-saleable
inventory include estimated shelf life, planned product discontinuances, price changes, ageing of inventory and introduction of
competitive new products, to the extent each of these factors impact the Company’s business and markets. The Company
considers all these factors and adjusts the inventory provision to reNect its actual experience on a periodic basis.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
Other long-term employee benefits
j) Impairment The Company’s net obligation in respect of other long-term employee benefits is the amount of future benefit that employees
Non-financial assets have earned in return for their service in the current and previous periods. That benefit is discounted to determine its present
The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at value. Re-measurements are recognised in the consolidated statement of profit and loss in the period in which they arise.
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
Compensated absences
recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, an
The Company’s current policies permit certain categories of its employees to accumulate and carry forward a portion of their
impairment test is performed each year at 31 March.
unutilised compensated absences and utilise them in future periods or receive cash in lieu thereof in accordance with the terms of
The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less such policies. The Company measures the expected cost of accumulating compensated absences as the additional amount that the
costs to sell. In assessing value in use, the estimated future cash Nows are discounted to their present value using a pre-tax discount Company incurs as a result of the unused entitlement that has accumulated at the reporting date. Such measurement is based on
rate that reNects current market assessments of the time value of money and the risks specific to the asset or the cash- actuarial valuation as at the reporting date carried out by a qualified actuary.
generating unit. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate
Equity settled share-based payment transactions
cash inNows from continuing use that are largely independent of the cash inNows of other assets or groups of assets (the �cash-
The grant date fair value of options granted to employees is recognised as an employee expense in the consolidated statement
generating unit�).
of profit and loss, with a corresponding increase in equity, over the period that the employees become unconditionally entitled
The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash-generating units that are to the options. The amount recognised as an expense is adjusted to reNect the number of awards for which the related service
expected to benefit from the synergies of the combination. and performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards
An impairment loss is recognised in the consolidated statement of profit and loss if the estimated recoverable amount of an asset or that meet the related service and performance conditions at the vesting date. The expense is recorded for each separately vesting
its cash-generating unit is lower than its carrying amount. Impairment losses recognised in respect of cash-generating units are portion of the award as if the award was, in substance, multiple awards. The increase in equity recognised in connection with
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the share-based payment transaction is presented as a separate component in equity under “share-based payment reserve”. The amount
other assets in the unit on a pro-rata basis. recognised as an expense is adjusted to reNect the actual number of stock options that vest.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior Cash settled share-based payment transactions
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is The fair value of the amount payable to employees in respect of share-based payment transactions which are settled in cash is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed recognised as an expense, with a corresponding increase in liabilities, over the period during which the employees become
only to the extent that the asset’s carrying amount does not exceed its recoverable amount, nor exceed the carrying amount unconditionally entitled to payment.
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill The liability is re-measured at each reporting date and at the settlement date based on the fair value of the share-based
that forms part of the carrying amount of an investment in joint venture is not recognised separately, and therefore is not tested for payment transaction. Any changes in the liability are recognised in the consolidated statement of profit and loss.
impairment separately. Instead, the entire amount of the investment in joint venture is tested for impairment as a single asset when
there is objective evidence that the investment in joint venture may be impaired. l) Provisions
A provision is recognised in the consolidated statement of profit and loss if, as a result of a past event, the Company has a
An impairment loss in respect of equity accounted investee is measured by comparing the recoverable amount of investment with its
present legal or constructive obligation that can be estimated reliably, and it is probable that an outNow of economic benefits will be
carrying amount. An impairment loss is recognised in the consolidated statement of profit and loss, and reversed if there has been a
required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting
favourable change in the estimates used to determine the recoverable amount.
the expected future cash Nows at a pre-tax rate that reNects current market assessments of the time value of money and the risks
k) Employee benefits specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance
Short-term employee benefits cost.
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected Restructuring
to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided A provision for restructuring is recognised in the consolidated statement of profit and loss when the Company has approved a detailed
by the employee and the obligation can be estimated reliably. and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating costs
Defined contribution plans are not provided.
The Company’s contributions to defined contribution plans are charged to the consolidated statement of profit and loss as and when Onerous contracts
the services are received from the employees. A provision for onerous contracts is recognised in the consolidated statement of profit and loss when the expected benefits to
Defined benefit plans be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
The liability in respect of defined benefit plans and other post-employment benefits is calculated using the projected unit credit The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected
method consistent with the advice of qualified actuaries. The present value of the defined benefit obligation is determined by net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the
discounting the estimated future cash outNows using interest rates of high-quality corporate bonds that are denominated in the assets associated with that contract.
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related defined benefit Reimbursement rights
obligation. In countries where there is no deep market in such bonds, the market interest rates on government bonds are used. Expected reimbursements for expenditures required to settle a provision are recognised in the consolidate statement of profit and loss
The current service cost of the defined benefit plan, recognised in the consolidated statement of profit and loss in employee benefit only when receipt of such reimbursements is virtually certain. Such reimbursements are recognised as a separate asset in the balance
expense, reNects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, sheet, with a corresponding credit to the specific expense for which the provision has been made.
curtailments and settlements. Past service costs are recognised immediately in the consolidated statement of profit and loss.
Contingent liabilities and contingent assets
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
of plan assets. This cost is included in employee benefit expense in the consolidated statement of profit and loss. Actuarial gains and
not, require an outNow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of
losses arising from experience adjustments and changes in actuarial assumptions for defined benefit obligation and plan assets are
outNow of resources is remote, no provision or disclosure is made.
recognised in OCI in the period in which they arise.
When the benefits under a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or Contingent assets are not recognised in the consolidated financial statements. A contingent asset is disclosed where an inNow
the gain or loss on curtailment is recognised immediately in the consolidated statement of profit and loss. The Company recognises of economic benefits is probable. Contingent assets are assessed continually and, if it is virtually certain that an inNow of
gains or losses on the settlement of a defined benefit plan obligation when the settlement occurs. economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

Termination benefits m) Revenue

Termination benefits are recognised as an expense in the consolidated statement of profit and loss when the Company is The Company’s revenue is derived from sales of goods, service income and income from licensing arrangements. Most of such
demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before revenue is generated from the sale of goods. The Company has generally concluded that it is the principal in its revenue arrangements.
the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Sale of goods
Termination benefits for voluntary redundancies are recognised as an expense in the consolidated statement of profit and loss if the Revenue is recognised when the control of the goods has been transferred to a third party. This is usually when the title passes
Company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number to the customer, either upon shipment or upon receipt of goods by the customer. At that point, the customer has full discretion
of acceptances can be estimated reliably. over the channel and price to sell the products, and there are no unfulfilled obligations that could affect the customer’s acceptance of
the product.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
Refund Liability
Revenue from the sale of goods is measured at the transaction price which is the consideration received or receivable, net of returns, The Company accounts for sales returns accrual by recording refund liability concurrent with the recognition of revenue at the time
taxes and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the customer. of a product sale. This liability is based on the Company’s estimate of expected sales returns. The Company deals in various products
In arriving at the transaction price, the Company considers the terms of the contract with the customers and its customary business and operates in various markets. Accordingly, the estimate of sales returns is determined primarily by the Company’s historical
practices. The transaction price is the amount of consideration the Company is entitled to receive in exchange for transferring experience in the markets in which the Company operates. With respect to established products, the Company considers its historical
promised goods or services, excluding amounts collected on behalf of third parties. The amount of consideration varies because experience of actual sales returns, levels of inventory in the distribution channel, estimated shelf life, any revision in the shelf life of
of estimated rebates, returns and chargebacks, which are considered to be key estimates. Any amount of variable the product, product discontinuances, price changes of competitive products, and the introduction of competitive new products,
consideration is recognised as revenue only to the extent that it is highly probable that a significant reversal will not occur. The to the extent each of these factors impact the Company’s business and markets. With respect to new products introduced by the
Company estimates the amount of variable consideration using the expected value method. Company, such products have historically been either extensions of an existing line of product where the Company has
historical experience or in therapeutic categories where established products exist and are sold either by the Company or the
Presented below are the points of recognition of revenue with respect to the Company’s sale of goods: Company’s competitors. At the time of recognising the refund liability, the Company also recognises an asset, (i.e., the right to the
PARTICULARS POINT OF RECOGNITION OF REVENUE returned goods) which is included in inventories for the products expected to be returned. The Company initially measures this
asset at the former carrying amount of the inventory, less any expected costs to recover the goods, including any potential
Sales of generic products in India Upon delivery of products to distributors by clearing and forwarding agents of the Company.
decreases in the value of the returned goods. Along with re-measuring the refund liability at the end of each reporting period,
Control over the generic products is transferred by the Company when the goods are delivered
the Company updates the measurement of the asset recorded for any revisions to its expected level of returns, as well as any
to distributors from clearing and forwarding agents.
additional decreases in the value of the returned
Sales of active pharmaceutical Upon delivery of products to customers (generally formulation manufacturers), from the products.
ingredients and intermediates in factories of the Company. Services
India
Revenue from services rendered, which primarily relate to contract research, is recognised in the consolidated statement of profit and
Export sales and other sales Upon delivery of the products to the customers unless the terms of the applicable contract loss as the underlying services are performed. Upfront non-refundable payments received under these arrangements are deferred and
outside of India provide for specific revenue generating activities to be completed, in which case revenue is recognised as revenue over the expected period over which the related services are expected to be performed.
recognised once all such activities are completed.
License fees
License fees primarily consist of income from the out-licensing of intellectual property, and other licensing and supply arrangements
Profit share revenues with various parties. Revenue from license fees is recognised when control transfers to the third party and the Company’s performance
The Company from time to time enters into marketing arrangements with certain business partners for the sale of its products obligations are satisfied. Some of these arrangements include certain performance obligations by the Company. Revenue from such
in certain markets. Under such arrangements, the Company sells its products to the business partners at a non-refundable base arrangements is recognised in the period in which the Company completes all its performance obligations.
purchase price agreed upon in the arrangement and is also entitled to a profit share which is over and above the base purchase price.
The profit share is typically dependent on the business partner’s ultimate net sale proceeds or net profits, subject to any reductions or n) Shipping and handling costs
adjustments that are required by the terms of the arrangement. Such arrangements typically require the business partner to provide Shipping and handling costs incurred to transport products to customers, and internal transfer costs incurred to transport the
confirmation of units sold and net sales or net profit computations for the products covered under the arrangement. products from the Company’s factories to its various points of sale, are included in selling, general and administrative expenses.

Revenue in an amount equal to the base sale price is recognised in these transactions upon delivery of products to the o) Other income and finance cost
business partners. An additional amount representing the profit share component is recognised as revenue only to the extent that it Other income consists of interest income on funds invested, dividend income and gains on the disposal of assets. Interest
is highly probable that a significant reversal will not occur. income is recognised in the consolidated statement of profit and loss as it accrues, using the effective interest method.
At the end of each reporting period, the Company updates the estimated transaction price (including updating its assessment Dividend income is recognised in the consolidated statement of profit and loss on the date that the Company’s right to receive
of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of payment is established. The associated cash Nows are classified as investing activities in the statement of cash Nows. Finance
the reporting period and the changes in circumstances during the reporting period. expenses consist of interest expense on loans and borrowings.

Out licensing arrangements, milestone payments and royalties Borrowing costs are recognised in the consolidated statement of profit and loss using the effective interest method. The associated
Revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial cash Nows are classified as financing activities in the statement of cash Nows.
up-front payment on inception of the license and subsequent payments dependent on achieving certain milestones in Foreign currency gains and losses are reported on a net basis within other income and / or selling and other expenses. These
accordance with the terms prescribed in the agreement. In cases where the transaction has two or more components, the primarily include: exchange differences arising on the settlement or translation of monetary items; changes in the fair value of
Company accounts for the delivered item (for example, the transfer of title to the intangible asset) as a separate unit of accounting derivative contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting
and record revenue upon delivery of that component, provided that the Company can make a reasonable estimate of the fair is applied; and the ineffective portion of cash Now hedges.
value of the undelivered component. Otherwise, non-refundable up-front license fees received in connection with product out-
licensing agreements are deferred and recognised over the balance period in which the Company has pending performance p) Income tax
obligations. Milestone payments which are contingent on achieving certain clinical milestones are recognised as revenues either on Income tax expense consists of current and deferred tax. Income tax expense is recognised in the consolidated statement of
achievement of such milestones, over the performance period depending on the terms of the contract. If milestone payments profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
are creditable against future royalty payments, the milestones are deferred and released over the period in which the royalties are Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
anticipated to be paid. reporting date, and any adjustment to tax payable in respect of previous years.
Royalty income earned through a license is recognised when the underlying sales have occurred. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
Provision for chargeback, rebates and discounts
for the following temporary differences:
Provisions for chargeback, rebates, discounts and Medicaid payments are estimated and provided for in the year of sales and
recorded as reduction of revenue. A chargeback claim is a claim made by the wholesaler for the difference between the price at • temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit;
which the product is initially invoiced to the wholesaler and the net price at which it is agreed to be procured from the
Company. Provisions for such chargebacks are accrued and estimated based on historical average chargeback rate actually • temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future; and
claimed over a period of time, current contract prices with wholesalers/other customers and estimated inventory holding by the
wholesaler. • taxable temporary differences arising upon the initial recognition of goodwill.
Shelf stock adjustments Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on
Shelf stock adjustments are credits issued to customers to reNect decreases in the selling price of products sold by the the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is
Company, and are accrued when the prices of certain products decline as a result of increased competition or otherwise. These a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority
credits are customary in the pharmaceutical industry, and are intended to reduce the customer inventory cost to better reNect the on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
current market prices. The determination to grant a shelf stock adjustment to a customer is based on the terms of the applicable tax assets and liabilities will be realised simultaneously.
contract, which may or may not specifically limit the age of the stock on which a credit would be offered.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
1.4DETERMINATION OF FAIR VALUES
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the The Company’s accounting policies and disclosures require the determination of fair value, for certain financial and non-financial assets and
temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable,
no longer probable that the related deferred tax will be utilised. Unrecognised deferred tax assets are reassessed at each reporting further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
date and are recognised to the extent that it has become probable that the future taxable profits will allow the deferred tax assets to
be recovered. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset
Any deferred tax asset or liability arising from deductible or taxable temporary differences in respect of unrealised inter- or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most
company profit or loss on inventories held by the Company in different tax jurisdictions is recognised using the tax rate of the advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
jurisdiction in which such inventories are held. Dividend distribution tax arising out of payment of dividends to shareholders under
the Indian Income tax regulations is not considered as tax expense for the Company and all such taxes are recognised in the The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset
statement of changes in equity as part of the associated dividend payment. or liability, assuming that market participants act in their economic best interest.

Current and deferred tax is recognised in the consolidated statement of profit and loss, except to the extent that it relates to A fair value measurement of a non-financial asset takes into account a market participant�s ability to generate economic benefits by using
items recognised in OCI or directly in equity. In this case, the tax is also recognised in OCI or directly in equity, respectively. the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

Accruals for uncertain tax positions require management to make judgements of potential exposures. Accruals for uncertain tax The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
positions are measured using either the most likely amount or the expected value amount depending on which method the value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
entity expects to better predict the resolution of the uncertainty. Tax benefits are not recognised unless the tax positions will All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair
probably be accepted by the tax authorities. This is based upon management’s interpretation of applicable laws and regulations value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole�
and the expectation of how the tax authority will resolve the matter. Once considered probable of not being accepted, management
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
reviews each material tax benefit and reNects the effect of the uncertainty in determining the related taxable amounts.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
q) Earnings per share observable.
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing • Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders For assets and liabilities that are recognised in the consolidated financial statements at fair value on a recurring basis, the Company
and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input
includes all stock options granted to employees. that is significant to the fair value measurement as a whole) at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as assets acquired in a business combination and significant liabilities,
r) Government grants and incentives such as contingent consideration. Involvement of external valuers is determined by the Management, based on market knowledge,
The Company recognises government grants only when there is reasonable assurance that the conditions attached to them will reputation, independence and whether professional standards are maintained.
be complied with, and the grants will be received. Government grants received in relation to assets are presented as a reduction to
the carrying amount of the related asset. Grants related to income are deducted in reporting the related expense in the a) Property, plant and equipment
consolidated statement of profit and loss. Property, plant and equipment, if acquired in a business combination or through an exchange of non-monetary assets, is measured at
Export entitlements from government authorities are recognised in the consolidated statement of profit and loss as a reduction from fair value on the acquisition date. For this purpose, fair value is based on appraised market values and replacement cost.
“Cost of materials consumed” when the right to receive credit as per the terms of the scheme is established in respect of the exports
made by the Company, and where there is no significant uncertainty regarding the ultimate collection of the relevant export b) Intangible assets
proceeds. The fair value of brands, technology related intangibles, and patents and trademarks acquired in a business combination is based on
the discounted estimated royalty payments that have been avoided as a result of these brands, technology related intangibles,
s) Segment reporting patents or trademarks being owned (the “relief of royalty method”). The fair value of customer related, product related and other
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. intangibles acquired in a business combination has been determined using the multi-period excess earnings method. Under this
The Chief Executive Officer of the Company is responsible for allocating resources and assessing performance of the operating method, value is estimated as the present value of the benefits anticipated from ownership of the intangible assets in excess of the
segments and accordingly is identified as the chief operating decision maker. returns required or the investment in the contributory assets necessary to realise those benefits.

t) Treasury shares c) Inventories

Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss The fair value of inventories acquired in a business combination is determined based on its estimated selling price in the
is recognised in the consolidated statement of profit and loss on the purchase, sale, issue or cancellation of the Company’s own ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort
equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in the securities required to complete and sell the inventories.
premium.
d) Investments in equity and debt securities and units of mutual funds
u)Non-currents assets held for sale The fair value of marketable equity and debt securities is determined by reference to their quoted market price at the reporting date.
The Company classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally For debt securities where quoted market prices are not available, fair value is determined using pricing techniques such as discounted
through a sale transaction rather than through continuing use. Non-current assets classified as held for sale are measured at the cash Now analysis.
lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the
In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund
disposal of an asset, excluding finance costs and income tax expense. The criteria for held for sale classification is regarded as met
units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund
only when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition.
and the price at which issuers will redeem such units from the investors.
Property, plant and equipment are not depreciated or amortised once classified as held for sale. Assets classified as held for sale are
presented separately as current items in the consolidated balance sheet. Accordingly, such net asset values are analogous to fair market value with respect to these investments, as transactions of
these mutual funds are carried out at such prices between investors and the issuers of these units of mutual funds.
v) Rounding of amounts
All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest million unless
otherwise stated.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

e) Derivatives The fair

value of foreign exchange forward contracts is estimated by discounting the difference between the contractual forward price and the current 2.1 PROPERTY, PLANT AND EQUIPMENT
forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). The fair value of FURNITURE,
foreign currency option and swap contracts and interest rate swap contracts is determined based on the appropriate valuation techniques, PLANT AND
PARTICULARS LAND BUILDINGS FIXTURES TOTAL
considering the terms of the contract. EQUIPMENT AND OFFICE VEHICLES
EQUIPMENT
f) Non-derivative financial liabilities Gross carrying value
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash Nows,
Balance as at 1 April 2019 4,229 23,005 70,427 5,738 809 104,208
discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to
similar lease agreements. In respect of the Company’s borrowings that have Noating rates of interest, their fair value approximates Recognition of right-of-use asset on initial application - 723 2 28 400 1,153
carrying value. of Ind AS 116
Adjusted balance as at 1 April 2019 4,229 23,728 70,429 5,766 1,209 105,361
g) Share-based payment transactions
Additions 4 997 4,278 497 295 6,071
The fair value of employee stock options is measured using the Black-Scholes-Merton valuation model. Measurement inputs include
share price on grant date, exercise price of the instrument, expected volatility (based on weighted average historical volatility), Disposals - (55) (706) (253) (218) (1,232)
expected life of the instrument (based on historical experience), expected dividends, and the risk free interest rate (based on Effect of changes in foreign exchange rates (84) 245 392 (38) (76) 439
government bonds).
Balance as at 31 March 2020 4,149 24,915 74,393 5,972 1,210 110,639
h) Contingent consideration
The fair value of the contingent consideration arising out of business combination is estimated by applying the income Balance as at 1 April 2020 4,149 24,915 74,393 5,972 1,210 110,639
approach. The fair value measurement is based on significant inputs that are not observable in the market, which Ind AS 103,
Assets acquired through business combinations(1) 84 113 165 11 - 373
�Fair Value Measurement” refers to as Level 3 inputs.
Additions 13 2,720 4,544 437 220 7,934
Disposals - (35) (852) (134) (182) (1,203)
Assets held for sale (A) (18) (245) (334) (58) - (655)
Effect of changes in foreign exchange rates 38 3 201 30 8 280
Balance as at 31 March 2021 4,266 27,471 78,117 6,258 1,256 117,368

Accumulated Depreciation
Balance as at 1 April 2019 - 6,786 43,210 4,621 464 55,081
Depreciation for the year - 1,299 6,382 564 379 8,624
Disposals - (31) (677) (245) (197) (1,150)
Effect of changes in foreign exchange rates - 121 265 (33) (48) 305
Balance as at 31 March 2020 - 8,175 49,180 4,907 598 62,860

Balance as at 1 April 2020 - 8,175 49,180 4,907 598 62,860

Depreciation for the year - 1,689 5,926 553 342 8,510
Impairment for the year 4 32 9 1 - 46
Disposals - (26) (773) (125) (136) (1,060)
Assets held for sale (B) (4) (140) (306) (54) - (504)
Effect of changes in foreign exchange rates - 13 156 25 - 194
Balance as at 31 March 2021 - 9,743 54,192 5,307 804 70,046

Net carrying value

As at 31 March 2020 4,149 16,740 25,213 1,065 612 47,779
As at 31 March 2021 4,266 17,728 23,925 951 452 47,322

Assets held for sale [(A)-(B)] 14 105 28 4 - 151

(1)
Refer note 2.40 of these financial statements for further details
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.1 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

2.1 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Leases The Company had total cash outNows for leases of ` 1,252 and ` 972 during the year ended 31 March 2021 and 31 March 2020, respectively.
The Company has lease contracts for various items of plant and equipment, vehicles and other equipment used in its operations. Below are The maturity analysis of lease liabilities are disclosed in note 2.10 of these consolidated financial statements.
the carrying amounts of right-of-use assets recognised and the movements during the year included in the above property, plant and
Capital commitments
equipment.
As of 31 March 2021 and 31 March 2020, the Company was committed to spend ` 9,841 and ` 4,888, respectively, under agreements to
FURNITURE, purchase property, plant and equipment. This amount is net of capital advances paid in respect of such purchase commitments.
PLANT ANDFIXTURES VEHICLES
PARTICULARS LAND BUILDINGS TOTAL Interest capitalisation
EQUIPMENT AND OFFICE
During the years ended 31 March 2021 and 31 March 2020, the Company capitalised interest cost of ` 149 and ` 52, respectively, with respect
EQUIPMENT
to qualifying assets. The rate for capitalisation of interest cost for the years ended 31 March 2021 and 31 March 2020 was approximately
Gross carrying value 4.25% and 4.22%, respectively.
Balance as at 1 April 2019 73 840 12 - 37 962
Recognition of right-of-use asset on initial application - 723 2 28 400 1,153
of Ind AS 116 2.2 GOODWILL
Adjusted balance as at 1 April 2019 73 1,563 14 28 437 2,115 Goodwill arising upon business combinations is not amortised but tested for impairment at least annually or more frequently if there is
any indication that the cash generating unit to which goodwill is allocated is impaired. Gross carrying value and accumulated
Additions - 87 3 17 146 253
amortisation with respect to goodwill represent Indian GAAP balances, that have been carried forward as such, relating to business
Disposals - (1) - - (56) (57) combination entered before the transition date i.e., 1 April 2015.
AS AT AS AT
Effect of changes in foreign exchange rates 5 39 1 - 3 48 PARTICULARS
31 MARC 31 MARC
Balance as at 31 March 2020 78 1,688 18 45 530 2,359 H 2021 H 2020
Gross carrying value

Balance as at 1 April 2020 78 1,688 18 45 530 2,359 Opening balance 37,186 35,157

Additions (1)
- 2,212 - 7 194 2,413 Goodwill arising on business combinations(1) 530 -

Disposals - - - (1) (120) (121) Disposals - -

Effect of changes in foreign exchange rates 1,193 2,029
Effect of changes in foreign exchange rates 3 (14) - - - (11)
Closing balance 38,909 37,186
Balance as at 31 March 2021 81 3,886 18 51 604 4,640

Accumulated amortisation
Accumulated Depreciation
Opening balance 32,273 30,498
Balance as at 1 April 2019 - 454 12 - 33 499
Impairment loss - 10
Depreciation for the year - 267 1 13 210 491
Effect of changes in foreign exchange rates 1,037 1,765
Disposals - (1) - - (41) (42)
Closing balance 33,310 32,273
Effect of changes in foreign exchange rates - 24 1 - (3) 22
Balance as at 31 March 2020 - 744 14 13 199 970 Net carrying value 5,599 4,913
(1)
Refer note 2.40 of these financial statements for further details

Balance as at 1 April 2020 - 744 14 13 199 970 For the purpose of impairment testing, goodwill is allocated to a cash generating unit, representing the lowest level within the Company
Depreciation for the year - 616 1 12 202 831 at which goodwill is monitored for internal management purposes and which is not higher than the Company’s operating segment.

Disposals - - - - (78) (78) The carrying amount of goodwill (other than those arising upon investment in a joint venture) was allocated to the cash generating units as
follows:
Effect of changes in foreign exchange rates - (25) - - (2) (27)
AS AT
Balance as at 31 March 2021 - 1,335 15 25 321 1,696 PARTICULARS
31 MARCH 2021
PSAI-Active Pharmaceutical Operations 170
Net carrying value Global Generics-Complex Injectables 1,928
As at 31 March 2020 78 944 4 32 331 1,389 Global Generics-North America Operations 308
As at 31 March 2021 81 2,551 3 26 283 2,944 Global Generics-Germany Operations 2,288
(1)
Additions for the year ended 31 March 2021 include recognition of a right-of-use asset of ` 1,852 relating to a warehousing services agreement in the United States.
Global Generics-Branded Formulations 905
5,599
The following are the amounts recognised in statement of profit and loss�
The recoverable amounts of the above cash generating units have been assessed using a value-in-use model. Value in use is generally
FOR THE YEAR ENDEDFOR THE YEAR ENDED calculated as the net present value of the projected post-tax cash Nows plus a terminal value of the cash generating unit to which the goodwill
PARTICULARS
Depreciation expense of right-of-use assets 31 MARCH
8312021 31 MARCH
4912020 is allocated. Initially, a post-tax discount rate is applied to calculate the net present value of the post-tax cash Nows. Key assumptions
upon
Interest expense on lease liabilities 227 230 which the Company has based its determinations of value-in-use include:
1,058 721 a) Estimated cash Nows for five years, based on management’s projections.
b) A terminal value arrived at by extrapolating the last forecasted year cash Nows to perpetuity, using a constant long-term growth rate
of
0%. This long-term growth rate takes into consideration external macroeconomic sources of data. Such long-term growth rate considered
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.4 INTANGIBLE ASSETS UNDER DEVELOPMENT
2.2 GOODWILL (CONTINUED)
FOR THE YEAR ENDED FOR THE YEAR ENDED 31 MARCH
c) The after tax discount rates used are based on the Company’s weighted average cost of capital. PARTICULARS
31 MARCH 2021
d) The after tax discount rates used range from 7.6% to 10.5% for various cash generating units. The pre-tax discount rates range from
9.1% to 15.7%. Balance at the beginning of the year 10,987 24,610
The Company believes that any reasonably possible change in the key assumptions on which a recoverable amount is based would not cause Add: Additions during the year(1) 1,737 950
the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit. Less: Capitalisations during the year (2)
- (2,530)
Less: Impairment during the year (3)
(6,279) (13,379)
2.3 OTHER INTANGIBLE ASSETS
Effect of changes in exchange rates (333) 1,336
PRODUCT RELATED
PARTICULARS OTHERS TOTAL Balance at end of the year 6,112 10,987
INTANGIBLES
(1)
During the year ended 31 March 2021, additions includes ` 1,471 representing the expenditure for purchase of intellectual property rights relating to Xeglyze® forming part of the
Gross carrying value Company’s Proprietary Products segment.
During the year ended 31 March 2020, the Company acquired a portfolio of approved, non-marketed Abbreviated New Drug Applications (“ANDAs”) in the United States from Teva for a
Balance as at 1 April 2019 39,174 1,945 41,119 total consideration of ` 277. The Company recognised these ANDAs acquired as product related intangibles.
(2)
During the year ended 31 March 2020, the product ramelton was available for use and are subject to amortisation. Accordingly, the Company reclassified the amount from intangible
Additions 3,222 165 3,387 assets under development to product related intangibles.
Disposals/ De- recognitions (597) (1) (598)
(3)
Impairment losses recorded for the year ended 31 March 2021
Total impairment charges for the year ended 31 March 2021 were ` 6,722 which were recorded in impairment of non-current assets in the consolidated statement of profit and loss, of which
Effect of changes in foreign exchange rates 1,617 5 1,622 ` 3,180 was attributable to impairment of gNuvaring, ` 1,471 was attributable to impairment of Xeglyze® and the balance of ` 2,071 was attributable to other product related intangibles.

Balance as at 31 March 2020 43,416 2,114 45,530 Impairment of gNuvaring

During the year ended 31 March 2021, there were significant changes to the generics market for Ethinyl estradiol/Ethenogestral vaginal ring (a generic equivalent to Nuvaring®), one
of the 8 ANDAs acquired from Teva in June 2016. The changes include the launch by a competitor of a generic version of the product in January 2021. Due to these adverse market
developments, the Company tested the carrying value of this product at the product cash generating unit (“CGU”) level, being the smallest identifiable group of assets that
Balance as at 1 April 2020 43,416 2,114 45,530 generate cash inNows that are largely independent of the cash inNows from other assets or groups of assets. The recoverable amount was determined by reference to the product’s
value-in-use or fair value less costs to sell, whichever is higher. This resulted in the value-in-use being the recoverable value of the product. Accordingly, the Company recorded an
Additions(1) 2,550 304 2,854 impairment loss of ` 3,180 for the year ended 31 March 2021. This impairment loss pertained to the Company’s Global Generics segment. With this impairment, the carrying value of
the asset has been reduced to ` Nil.
Assets acquired through business combinations(2) 14,888 - 14,888
Impairment of Xeglyze®
Disposals/ De- recognitions (152) - (152) Consequent to the decline in the market potential of the product Xeglyze® forming part of the Company's Proprietary Products segment, the Company recorded an amount of ` 3,291
as impairment loss for the year ended 31 March 2021.
Effect of changes in foreign exchange rates (532) 2 (530)
Other intangible assets
Balance as at 31 March 2021 60,170 2,420 62,590 With respect to the saxagliptin/metformin (generic version of Kombiglyze®-XR) and phentermine and topiramate (generic version of Qsymia®), two of the 8 ANDAs acquired from Teva
in June 2016, there has been a significant decrease in the market potential of these products, primarily due to higher than expected value erosion. Accordingly, the Company assessed
the recoverable amount by revisiting market volume, share and price assumptions for these two products and recorded an amount of ` 1,587 as impairment loss for the year
Amortisation/impairment loss ended 31 March 2021. This impairment loss pertained to the Company’s Global Generics segment.
In view of the specific triggers occurring in the year with respect to some other product related intangible assets forming part of the Company's Global Generics segment, the Company
Balance as at 1 April 2019 21,894 1,101 22,995 determined that there was a decrease in the market potential of these products primarily due to higher than expected price erosion and increased competition leading to lower volumes.
Amortisation for the year 2,744 263 3,007 Consequently, the Company recorded an amount of ` 484 as impairment loss for the year ended 31 March 2021.
The Company used the discounted cash Now approach to calculate the value-in-use which considered assumptions such as revenue projections, rate of generic penetration, estimated
Impairment loss(3) 3,378 - 3,378 price erosion, the useful life of the asset and the net cash Nows have been discounted based on post tax discount rate.
Disposals/ De- recognitions (531) (1) (532) Impairment losses recorded for the year ended 31 March 2020
Total impairment charges for the year ended 31 March 2020 were ` 16,757 which were recorded in impairment of non-current assets in the consolidated statement of profit and loss, of
Effect of changes in foreign exchange rates 868 3 871 which ` 11,137 was attributable to impairment of gNuvaring and the balance of ` 5,620 was attributable to other product related intangibles.
Balance as at 31 March 2020 28,353 1,366 29,719 Impairment of gNuvaring
During the year ended 31 March 2020, there were significant changes to the generics market for Ethinyl estradiol / Ethenogestral vaginal ring (a generic equivalent to Nuvaring®), one
of the 8 ANDAs acquired from Teva in June 2016. The changes include the launches by competitors of both generic and authorised generic versions of the product in December 2019.
Balance as at 1 April 2020 28,353 1,366 29,719 Due to these adverse market developments, as at 31 December 2019, the Company tested the carrying value of this product at the product cash generating unit (“CGU”) level, being
the smallest identifiable group of assets that generate cash inNows that are largely independent of the cash inNows from other assets or groups of assets. The recoverable amount was
Amortisation for the year 3,481 297 3,778 determined by reference to the product’s value-in-use or fair value less costs to sell, whichever is higher. This resulted in the value-in-use being the recoverable value of the product.
Accordingly, the Company recorded an impairment loss of ` 11,137 for the year ended 31 March 2020. This impairment loss pertained to the Company’s Global Generics segment.
Impairment loss (3)
443 - 443
The carrying value of the asset after the impairment was ` 3,269.
Disposals/ De- recognitions (152) - (152) The Company used the discounted cash Now approach to calculate the value in use, with the assistance of independent appraisers. The key assumptions considered in the calculation
Effect of changes in foreign exchange rates (335) 1 (334) are as follows:
a. Weighted average of probability adjusted revenue projections which take into consideration different scenarios such as the base case, the upside case and the downside case;
Balance as at 31 March 2021 31,790 1,664 33,454 b. Rate of generic penetration and estimated price erosion throughout the period;
c. Estimate of useful life over which the product is expected to generate cash Nows; and
d. the net cash Nows have been discounted based on a post-tax discounting tax rate of 8%.
Net carrying value Other intangible assets
As at 31 March 2020 15,063 748 15,811 In June 2019, the Company launched tobramycin inhalation solution, USP, a therapeutic equivalent generic version of TOBI® (tobramycin) Inhalation Solution, and in July 2019
the Company launched ramelteon tablets, 8 mg, a therapeutically equivalent generic version of Rozerem ® (ramelteon, 8 mg) Tablets. Subsequent to their respective launches, both
As at 31 March 2021 28,380 756 29,136 products experienced adverse market conditions, such as increased competition and reduced selling prices by competitors. As a result, the performance of the products was
significantly lower than the Company’s prior estimates. Furthermore, the Company decided to drop the launch of its planned imiquimod cream product. Accordingly, the
(1)
Assets acquired during year ended 31 March 2021 includes the following: Company assessed the recoverable amount of intangible assets associated with these three products, and recognised an impairment loss of ` 4,385 (US$ 61.4 million) for the year
The Company entered into a definitive agreement with Glenmark Pharmaceuticals Limited to acquire marketing authorizations and other rights of select brands in four “Emerging ended 31 March 2020. These impairment losses pertained to the Company’s Global Generics segment.
Markets” countries. The acquired brands represent two products, (a) a mometasone mono product and (b) a combination of mometasone with azelastine, and are indicated for the
treatment of seasonal and perennial allergic rhinitis. The total consideration paid was ` 1,516. Following the principles of Ind AS 38, “Intangible assets”, the Company recognisedthe In view of the specific triggers occurring in the year with respect to some of other product related intangible assets forming part of the Company's Global Generics and
acquired brands at their acquisition cost. The acquisition pertains to the Company’s Global Generics segment. Proprietary Products segments, the Company determined that there was a decrease in the market potential of these products primarily due to higher than expected price erosion and
(2)
Refer Note 2.40 of these financial statements for further details. increased competition leading to lower volumes. Consequently, the Company recorded an amount of ` 1,235 as impairment loss for the year ended 31 March 2020.
(3)
Refer note 2.4 for “Impairment losses recorded for the year ended 31 March 2021 and 31 March 2020.”
Consequent to the materiality of the amount involved, these impairment amounts have been disclosed separately in the consolidated statement of profit and loss.

Interest capitalisation
During the years ended 31 March 2021 and 31 March 2020, the Company capitalised interest cost of ` 266 and ` 674, respectively, with
respect to certain qualifying assets. The rate for capitalisation of interest cost for the years ended 31 March 2021 and 31 March 2020 ranged
from 3.95% to 4.74% and from 2.04% to 4.60%, respectively.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.4 INTANGIBLE ASSETS UNDER DEVELOPMENT (CONTINUED)

2.5 INVESTMENT IN EQUITY ACCOUNTED INVESTEES (CONTINUED)

Details of significant intangible assets �including intangible assets under development� as at 31 March 2021: Details of the Company's investment in DRES Energy Private Limited :
PARTICULARS ACQUIRED FROM CARRYING COST AS AT AS AT
PARTICULARS
H 2021
31 MARC H 2020
31 MARC
Select portfolio of branded generics business Wockhardt Limited 14,241
Select portfolio of dermatology, respiratory and pediatric assets UCB India Private Limited and affiliates 4,568 Carrying value of the Company’s investment 68 49

Intellectual property rights relating to PPC-06 Xenoport, Inc 4,036 Company’s share of loss for the year 19 (16)

Various ANDAs Teva and an affiliate of Allergan 4,000

Commercialisation rights for an anti-cancer biologic agent Eisai Company Limited 1,840
2.6 FINANCIAL ASSETS
Select Anti-Allergy brands Glenmark Pharmaceuticals Limited 1,487 2.6 A. INVESTMENTS
Habitrol® brand Novartis Consumer Health Inc. 1,181 Investments consist of investments in units of mutual funds, market linked debentures, equity securities, bonds, commercial paper,
limited liability partnership and term deposits with banks (i.e., certificates of deposit having an original maturity period exceeding 3 months).
OTC product brands Ducere Pharma LLC 494
AS AT AS AT
ANDAs Gland Pharma Limited 262 PARTICULARS
H 202131 MARCH 2020
31 MARC
Investments at FVTOCI
2.5 INVESTMENT IN EQUITY ACCOUNTED INVESTEES I. Equity instruments
AS AT AS AT
PARTICULARS
31 MARC 31 MARC Quoted equity shares (fully paid up)
H 2021 H 2020
5,465,693 (31 March 2020: 5,465,693) equity shares of US$ 0.05 each of Curis, Inc. (Refer note 2.33) 4,523 292
Investment in unquoted equity shares 25,000 (31 March 2020: 58,000) equity shares of ` 1/- each of State Bank of India 9 11
Equity shares held in Kunshan Rotam Reddy Pharmaceutical Company Limited, China(1) 3,307 2,714 II. Debt instruments
8,580,000 (31 March 2020: 8,580,000) equity shares of ` 10/- each of DRES Energy Private Limited, India 68 49 Investment in market linked debentures - 1,993
3,375 2,763 Total investments at FVTOCI (I+II) (A) 4,532 2,296
(1)
Shares held in Kunshan Rotam Reddy Pharmaceutical Company Limited, China are not denominated in number of shares as per the laws of the country.
Investments at FVTPL
I. Investment in unquoted equity shares
Details of the Company's investment in Kunshan Rotam Reddy Pharmaceuticals Company Limited :
Kunshan Rotam Reddy Pharmaceuticals Company Limited (“Reddy Kunshan”) is engaged in manufacturing and marketing of finished dosages 8,859 (31 March 2020: 8,859) equity shares of ` 100/- each of Jeedimetla E�uent Treatment 1 1
in China. The Company’s interest in Reddy Kunshan was 51.3% as of 31 March 2021 and 31 March 2020. Four directors of the Company are Limited, India
on the board of Reddy Kunshan, which consists of eight directors. Under the terms of the joint venture agreement, all major decisions Ordinary shares of Biomed Russia Limited, Russia (1) - -
with respect to operating activities, significant financing and other activities are taken by the approval of at least five of the eight directors of 200,000 (31 March 2020: 200,000) equity shares of ` 10/- each of Altek Engineering Limited, India - -
Reddy Kunshan’s board. As the Company does not control Reddy Kunshan’s board and the other partners have significant participation
rights, the Company’s interest in Reddy Kunshan has been accounted for under the equity method of accounting. 24,000 (31 March 2020: 24,000) equity shares of ` 100/- each of Progressive E�uent Treatment - -
Limited, India
Summary financial information of Reddy Kunshan, as translated into the reporting currency of the Company and not adjusted for the 20,250 (31 March 2020: 20,250) equity shares of ` 10/- each of Shivalik Solid Waste Management - -
percentage ownership held by the Company, is as follows:
Limited, India (2)

AS AT/ AS AT/ 1 1
PARTICULARS FOR THE YEAR ENDED FOR THE YEAR ENDED II. Investment in unquoted mutual funds 13,263 13,832
31 MARCH 2021 31 MARCH 2020 III. Investment in partnership firms
Ownership 51.3% 51.3% ABCD Technologies LLP 400 -
Total current assets 8,778 6,925 Total investments at FVTPL (I+II+III) (B) 13,664 13,833
Total non-current assets 892 732 Investments carried at amortised cost
Total assets 9,670 7,657 I. Investment in term deposit with banks (original maturity more than 3 months) 5,959 5,044
IV. Others 25 24
Equity 6,088 4,931 II. Investment in bonds 522 1,851
Total investments carried at amortised cost (C) 6,506 7,886
Total current liabilities 3,582 2,726 III. Investment in commercial paper - 967
Total investments (A+B+C) 24,702 24,015
Total equity and liabilities 9,670 7,657
Revenues 9,017 7,679
Expenses 8,118 6,554
Profit for the year 899 1,125
Current 19,744 23,687
Company’s share of profits for the year 461 577 Non-current 4,958 328
Carrying value of the Company’s investment 3,307 2,714 24,702 24,015
Translation adjustment arising out of translation of foreign currency balances 438 306
During the year ended 31 March 2020, the Company recognised an amount of ` 392, representing its share of dividend declared by the equity Aggregate carrying value of quoted investments 4,532 303
accounted investee, Reddy Kunshan. The amount of dividend is adjusted against the carrying amount of investment in the consolidated Aggregate market value of quoted investments 4,532 303
balance sheet.
Aggregate carrying value of unquoted investments 20,170 23,712
Aggregate amount of impairment in value of investment in unquoted equity shares - -
(1)
Shares held in Biomed Russia Limited, Russia are not denominated in number of shares as per the laws of the country.
(2)
Rounded off to millions.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.6 D. CASH AND CASH EQUIVALENTS
2.6 B. TRADE RECEIVABLES PARTICULARS AS AT AS AT
AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
31 MARCH 2021 31 MARCH 2020
Trade receivables from other parties 49,759 52,012 Balances with banks
Receivables from joint ventures (Refer note 2.24) - 3 In current accounts 5,442 1,636
49,759 52,015 In EEFC accounts 8,776 59
Details of security In term deposit with banks (original maturities less than 3 months) 384 232
Considered good, Unsecured 49,948 52,169 Cash on hand 1 2
Credit impaired 1,107 1,048 Other bank balances
51,055 53,217 In unclaimed dividend accounts 86 86
Less: Allowance for credit losses (1,296) (1,202) In unclaimed fractional share pay order accounts - 1
49,759 52,015 In unclaimed debentures and debenture interest account 20 25
LC and Bank guarantee margin money 80 12
Current 49,641 50,278 Balances in Escrow account pursuant to the Business Transfer Agreement with Wockhardt Limited 40 -
(1) (Refer note 2.40 for details)
Non-current 118 1,737
Cash and cash equivalents in the consolidated balance sheet 14,829 2,053
49,759 52,015
(1)
Represents amounts receivable pursuant to an out-licensing arrangement with a customer. As these amounts are not expected to be realised within twelve months from the end of the Less: Bank overdraft used for cash management purposes (Refer note 2.10 B) (9) (91)
reporting date, they are disclosed as non-current.
Cash and cash equivalents in the consolidated statement of cash Now �including restricted cash� 14,820 1,962
Restricted cash balances included above
Pursuant to an arrangement with a bank, the Company sells to the bank certain of its trade receivables forming part of its Global
Generics segment, on a non-recourse basis. The receivables sold were mutually agreed upon with the bank after considering the Balance in unclaimed dividend and debenture interest account 106 112
creditworthiness and contractual terms with the customer including any gross to net adjustments due to rebates, discounts etc. from the Other restricted cash balances 120 12
contracted amounts. As a result, the receivables sold are generally lower than the total net amount of trade receivables. The Company has
transferred substantially all the risks and rewards of ownership of such receivables sold to the bank and accordingly, the same are
derecognised in the consolidated balance sheet. As on 31 March 2021 and 31 March 2020, the amount of trade receivables de-recognised 2.7 OTHER ASSETS
pursuant to the aforesaid arrangement was ` 9,254 (US$ 127million) and ` 9,049 (US$ 120 million), respectively. PARTICULARS AS AT AS AT
In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition of impairment 31 MARCH 2021 31 MARCH 2020
loss on its trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the A. Non-current assets
scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables.
The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers. Unsecured, considered good
The details of changes in allowance for credit losses during the year ended 31 March 2021 and 31 March 2020 are as follows: Capital advances 240 158
FOR THE YEAR ENDED OR THE YEAR ENDED Others 66 37
PARTICULARS
31 MARCH 2020 Dues from joint ventures and other related parties 1 14
F 31 MARCH 2021
Balance at the beginning of the year 1,202 1,172 307 209

Provision made during the year, net of reversals 176 154 B. Current assets

Trade receivables written off during the year and effect of changes in the foreign (82) (124) Unsecured, considered good
exchange rates Balances and receivables from statutory authorities (1)
7,227 4,445
Balance at the end of the year 1,296 1,202 Export benefits receivable(2) 2,070 2,652
Prepaid expenses 1,141 950
2.6 C. OTHER FINANCIAL ASSETS Dues from other related parties 17 50
AS AT AS AT
PARTICULARS Others (3)
2,195 2,327
31 MARCH 2021 31 MARCH 2020
I. Non-current assets Unsecured, considered doubtful
Considered good, Unsecured Other advances 157 114
Security deposits 666 613 12,807 10,538
Other assets 102 180 Less: Allowance for doubtful advances (157) (114)
768 793 12,650 10,424
II. Current assets
(1)
Balances and receivables from statutory authorities primarily consist of amounts recoverable towards the goods and service tax (“GST”), excise duty, and value added tax and from
customs
authorities of India.
Considered good, Unsecured Export benefits receivables primarily consist of amounts receivable from various government authorities of India towards incentives on export sales made by the Company.
(2)

(3)
Others primarily includes advances given to vendors and employees.
Claims receivable 187 1,123
Other assets(1) 1,671 2,254
1,858 3,377
(1) Others primarily includes security deposits, interest accrued but not due on investments and other advances.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data) 2.9 SHARE CAPITAL (CONTINUED)

2.8 INVENTORIES In the event of liquidation of the Company, all preferential amounts, if any, shall be discharged by the Company. The remaining
AS AT AS AT assets of the Company shall be distributed to the holders of equity shares in proportion to the number of shares held to the total equity
PARTICULARS
31 MARC 31 MARC shares outstanding as on that date.
H 2021 H 2020
Final dividends on equity shares (including dividend tax on distribution of such dividends, if any) are recorded as a liability on the date of their
Raw materials (includes in transit 31 March 2021: ` 139; 31 March 2020: ` 206) 12,287 10,594 approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.
Work-in-progress 10,009 6,806 The details of dividends paid by the Company are as follows:
Stock-in-trade 6,097 6,873
Finished goods 13,732 8,254 PARTICULARS
Packing material, stores and spares 3,287 2,540 31 MARCH 2021 31 MARCH 2020
FOR THE YEAR ENDED FOR THE YEAR ENDED
45,412 35,067 Dividend per share (in absolute `) 25 20

During the year ended 31 March 2021, the Company recorded inventory write-down of ` 2,521 (31 March 2020 : ` 3,652) in the consolidated Dividend distribution tax on the dividend paid - 602
statement of profit and loss.
Dividend paid during the year 4,147 3,314
Following the Company’s decision to voluntarily recall all of its ranitidine medications sold in United States, due to confirmed
contamination with N-Nitrosodimethylamine ("NDMA") above levels established by the U.S. FDA, the Company recognised ` 373 as inventory At the Company’s Board of Directors’ meeting held on 14 May 2021, the Board proposed a dividend of ` 25 per share and aggregating to ` 4,158,
write downs of ranitidine during the year ended 31 March 2020. Furthermore, an amount of ` 239 was recognised (as a reduction from which is subject to the approval of the Company’s shareholders.
revenue) as a provision for refund liabilities arising out of the Company’s recall decision.
c) Details of shareholders holding more than 5% shares in the Company
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
2.9 SHARE CAPITAL PARTICULARS NO. OF SHARES % HOLDING IN THE NO. OF SHARES % HOLDING IN THE
AS AT AS AT HELD CLASS HELD CLASS
PARTICULARS
31 MARCH 2021 31 MARCH 2020 Dr. Reddy's Holdings Limited 41,325,300 24.85 41,325,300 24.88
Authorised share capital Life Insurance Corporation of India and their associates 1,110,352 0.67 8,468,983 5.10
240,000,000 equity shares of ` 5/- each (31 March 2020: 240,000,000) 1,200 1,200 d) 217,253 (31 March 2020: 232,837) stock options are outstanding and are to be issued by the Company upon exercise of the same in
Issued equity capital accordance with the terms of exercise under the "Dr. Reddy's Employees Stock Option Plan, 2002", 412,339 (31 March 2020: 354,343)
stock options are outstanding and are to be issued by the Company upon exercise of the same in accordance with the terms of exercise
166,301,431 equity shares of ` 5/- each fully paid-up (31 March 2020: 166,172,282) 832 831 under the "Dr. Reddy’s Employees ADR Stock Option Plan, 2007" and 385,930 (31 March 2020: 375,775) stock options are outstanding and
Subscribed and fully paid-up are to be issued by the Company upon exercise of the same in accordance with the terms of exercise under the "Dr. Reddy’s Employees
Stock Option Scheme, 2018 ". (Refer note 2.28)
166,301,231 equity shares of ` 5/- each fully paid-up (31 March 2020: 166,172,082) 832 831
e) Represents 200 equity shares of ` 5/- each, amount paid-up ` 500/- (rounded off to millions in the note above) forfeited due to non-
Add: Forfeited share capital (e) - -
payment of allotment money.
832 831
f) During the year ended 31 March 2017, the Company bought-back and extinguished 5,077,504 equity shares under the buy-back of equity
shares plan approved by the shareholders on 1 April 2016.
a) Reconciliation of the equity shares outstanding is set out below:
FOR THE YEAR ENDED 31 MARCH
FOR THE
2021YEAR ENDED 31 MARCH 2020 Aggregate number of shares bought back during the period of five years immediately preceding the reporting date:
PARTICULARS YEAR ENDED 31 MARCH
NO. OF SHARES AMOUNT NO. OF SHARES AMOUNT 2021 2020 2019 2018 2017
Opening number of equity shares/share capital 166,172,082 831 166,065,948 830 Ordinary shares of ` 5 each - - - - 5,077,504
Add: Equity shares issued pursuant to employee stock option plan (1)
129,149 1 106,134 1
Closing number of equity shares/share capital 166,301,231 832 166,172,082 831
2.10 FINANCIAL LIABILITIES
Treasury shares(2) 575,201 1,967 395,950 1,006
*Rounded off to millions.
2.10 A. NON-CURRENT BORROWINGS
(1)
During the years ended 31 March 2021 and 31 March 2020, equity shares were issued as a result of the exercise of vested options granted to employees pursuant to the Dr. Reddy’s
AS AT AS AT
Employees Stock Option Plan, 2002 and the Dr. Reddy’s Employees Stock Option Plan, 2007. The options exercised had an exercise price of ` 5, ` 2,607 or ` 2,814 per share. Upon PARTICULARS
the exercise of such options, the amount of compensation cost (computed using the grant date fair value) previously recognised in the "share-based payment reserve” was transferred H 2021
31 MARC H 2020
31 MARC
to“securities premium” in the statement of changes in equity.
(2)
Pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on 27 July 2018, the Dr. Reddy’s Employees ESOS Trust (the “ESOS Trust”) was formed
Unsecured
to support the Dr. Reddy’s Employees Stock Option Scheme, 2018 by acquiring, from the Company or through secondary market acquisitions, equity shares which are used for issuance Long-term loans from banks (a) - -
to eligible employees (as defined therein) upon exercise of stock options thereunder. During the year ended 31 March 2021 and 31 March 2020, an aggregate of 85,250 and 1,150
equity shares, respectively were issued as a result of the exercise of vested options granted to employees pursuant to the Dr. Reddy’s Employees Stock Option Scheme, 2018. The options Non-convertible debentures by the APSL subsidiary (1)
3,800 -
exercised had an exercise price of ` 2,607 or ` 2,814 per share. Upon the exercise of such options, the amount of compensation cost (computed using the grant date fair value)
previously recognised in the “share based payment reserve” was transferred to “securities premium” in the statement of changes in equity. In addition, any difference between the
carrying amount of treasury shares and the consideration received was recognised in the “securities premium”. As of 31 March 2021 and 31 March 2020, the ESOS Trust had
outstanding 575,201 and 395,950 shares, respectively, which it purchased from the secondary market for an aggregate consideration of ` 1,967 and ` 1,006, respectively. Refer note Secured
2.28 of these financial statements for further details on the Dr. Reddy’s Employees Stock Option Scheme, 2018.
Long-term maturities of lease liabilities (2) 2,499 1,304
b) Terms/rights attached to the equity shares 6,299 1,304
The Company has only one class of equity shares having a par value of ` 5 per share. For all matters submitted to vote in a shareholders
meeting of the Company, every holder of an equity share, as reNected in the records of the Company as on the record date set for
the shareholders meeting, shall have one vote in respect of each share held.
Should the Company declare and pay any dividends, such dividends will be paid in Indian rupees to each holder of equity shares in
proportion to the number of shares held to the total equity shares outstanding as on that date. Indian law on foreign exchange governs
the remittance of dividends outside India.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.10 B. CURRENT BORROWINGS 2.10 A & B. BORROWINGS (CONTINUED)

AS AT AS AT d) The aggregate maturities of long-term loans and borrowings, based on contractual maturities, as of 31 March 2020:
PARTICULARS
H 2021
31 MARC H 2020
31 MARC AS AT
From Banks PARTICULARS 31 MARCH 2020
Unsecured FOREIGN CURRENCY LOAN OBLIGATIONS UNDER TOTAL
LEASES
Pre-shipment credit (e & f) 10,300 10,432
Maturing in the year ending 31 March (1)
Other foreign currency borrowings (e & f) 12,836 6,009
2021 3,783 483 4,266
Bank overdraft 9 91
2022 - 359 359
23,145 16,532
2023 - 267 267

a) Summary of long-term borrowings is as follows: 2024 - 249 249

AS AT AS AT 2025 - 286 286

PARTICULARS 31 MARCH 2021 31 MARCH 2020 Thereafter - 143 143
NON-CURRENT CURRENT NON-CURRENT CURRENT 3,783 1,787 5,570
Foreign currency borrowing(3) - - - 3,783
(1)
Long-term debt obligations disclosed in the above table do not reNect any netting of transaction costs amounting to ` 0.

Non-convertible debentures 3,800 - - - e) Short-term borrowings primarily consist of “pre-shipment credit” drawn by the parent company and other unsecured loans drawn by
Obligations under leases 2,499 864 1,304 483 certain of its subsidiaries in Switzerland, the United States, Russia, Mexico, South Africa, Brazil and Ukraine which are repayable
within 6 to 12 months from the date of drawdown.
6,299 864 1,304 4,266
(1)
“APSL subsidiary” refers to Aurigene Pharmaceutical Services Limited. f) The interest rate profile of short-term borrowings from banks is given below:
During the year 31 March 2021, the APSL subsidiary issued non-convertible debentures for ` 3,800. The aforesaid non-convertible debentures are repayable at par after 3 years following
the date of issue. AS AT AS AT
(2)
Additions year ended 31 March 2021 include lease liabilities of `1,878 relating to a warehousing services agreement in the United States. PARTICULARS 31 MARCH 2021 31 MARCH 2020
(3)
During the year ended 31 March 2021, the Company repaid both the long-term borrowings of US$ 50 million.
During the year ended 31 March 2020, the Company repaid both the long-term borrowings of US$ 250 million in the Swiss subsidiary and EUR 42 million in the German Subsidiary. CURRENCY(1) INTEREST RATE(2) CURRENCY(1) INTEREST RATE(2)
Pre-shipment credit INR 3 Month T-Bill + 30 Bps INR 1 Month T-Bill + 60 Bps
b) The interest rate profiles of long-term borrowings (other than obligations under leases) as at 31 March 2021 and 31 March 2020 INR 5.75% - -
were as follows:
- - US$ 1 Month LIBOR + 12.5 to 16 bps
AS AT AS AT
31 MARCH 2021 31 MARCH 2020 Other working capital borrowings US$ (2.20%) to (1.80%) US$ 1 Month/3 Month LIBOR + 55 to 78 bps
PARTICULARS
CURRENCY (1)
INTEREST RATE (2)
CURRENCY (1)
INTEREST RATE (2) MXN TIIE + 1.2% MXN TIIE + 1.25%
RUB 3.00% to 3.40% and 5.55% RUB 7.05%
1 Month LIBOR
Foreign currency borrowings - - US$ + 82.7 bps BRL 4.00% BRL 7.25%
- - EUR 0.81% INR 4.00% INR 7.75%
Non-convertible debentures INR 6.77% - - UAH 4.75% - -
(1)
“US$” means United States dollars and “EUR” means Euros. - - ZAR 1 Month JIBAR + 120 Bps
(2)
“LIBOR” means the London Inter-bank Offered Rate. (1)
“INR” means Indian rupees, “US$” means United States Dollars, “RUB” means Russian roubles, “MXN” means Mexican pesos, “UAH” means Ukrainian hryvnia, “ZAR” means South African
rand and "BRL" means Brazilian reals
(2)
“LIBOR” means the London Inter-bank Offered Rate,"T-Bill" means India Treasury Bill, “TIIE” means the Equilibrium Inter-banking Interest Rate (Tasa de Interés Interbancaria de
c) The aggregate maturities of long-term loans and borrowings, based on contractual maturities, as of 31 March 2021: Equilibrio) and “JIBAR” means the Johannesburg Interbank Average Rate.
AS AT 31 MARCH 2021
g) The Company had uncommitted lines of credit of ` 38,766 and ` 39,374 as of 31 March 2021 and 31 March 2020, respectively, from its
OBLIGATIONS UNDER
PARTICULARS banks for working capital requirements. The Company has the right to draw upon these lines of credit based on its working capital
NON-CONVERTIBLE requirements.
TOTAL
DEBENTURES LEASES
h) Reconciliation of liabilities arising from financing activities
Maturing in the year ending 31 March
DURING THE YEAR ENDED 31 MARCH 2021
2022 - 864 864 PARTICULARS NON-CURRENT CURRENT
2023 - 802 802 TOTAL
BORROWINGS(1) BORROWINGS(2)
2024 3,800 745 4,545 Opening balance 5,570 16,441 22,011
2025 - 734 734 Recognition of right-of-use liability during the year 2,393 - 2,393
2026 - 118 118 Payment of principal portion of lease liabilities (754) - (754)
Thereafter - 100 100 Borrowings made during the year 3,800 44,469 48,269
3,800 3,363 7,163 Borrowings repaid during the year (3,743) (37,678) (41,421)
Effect of changes in foreign exchange rates (103) (96) (199)
Closing balance 7,163 23,136 30,299
(1)
Includes current portion
(2)
Does not include movement in bank overdraft
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data)

2.10 A & B. BORROWINGS (CONTINUED) 2.11 PROVISIONS

DURING THE YEAR ENDED 31 MARCH 2020 AS AT AS AT
PARTICULARS
PARTICULARS 31 MARCH 2021 31 MARCH 2020
NON-CURRENT CURRENT
BORROWINGS(1) BORROWINGS(2) TOTAL A. Non-current provisions
Opening balance 26,256 12,125 38,381 Provision for employee benefits (Refer note 2�27)
Recognition of right-of-use liability on initial application of Ind AS 116 1,335 - 1,335 Long service award benefit plan 58 52
Pension, seniority and severance indemnity plans 153 113
Recognition of right-of-use liability during the year 238 - 238
Compensated absences 239 526
Payment of principal portion of lease liabilities (482) - (482)
Other provisions (a) 58 54
Borrowings made during the year - 29,855 29,855
508 745
Borrowings repaid during the year (22,918) (25,620) (48,538) B. Current provisions
Effect of changes in foreign exchange rates 1,051 81 1,132 Provision for employee benefits (Refer note 2�27)
Others 90 - 90 Gratuity 656 197
Closing balance 5,570 16,441 22,011 Long service award benefit plan 16 14
(1)
Includes current portion. Pension, seniority and severance indemnity plans 17 23
(2)
Does not include movement in bank overdraft.
Compensated absences 891 635
2.10 C. OTHER FINANCIAL LIABILITIES Other provisions (a)
Refund liability 2,824 3,252
AS AT AS AT
PARTICULARS Others 611 548
31 MARCH 2021 31 MARCH 2020
C������ �������� ����������� 5,015 4,669

Current maturities of long-term debt - 3,783

a) Details of changes in other provisions during the year ended 31 March 2021 are as follows:
Current maturities of lease liabilities 864 483
REFUND ENVIRONMENTALLEGAL AND
PARTICULARS TOTAL
Due to capital creditors 3,807 1,411 LIABILITY(1) LIABILITY(2) OTHERS(3)
Interest accrued but not due on loans 94 30 Balance at the beginning of the year 3,252 54 548 3,854
Accrued expenses 17,729 18,024 Provision made during the year, net of reversals 2,934 63 2,997
Trade and security deposits received 178 172 Provision used during the year (3,309) - (3,309)
Unclaimed dividends, debentures and debenture interest (1)
106 111 Effect of changes in foreign exchange rates (53) 4 - (49)
Others 1,503 2,992 Balance at end of the year 2,824 58 611 3,493
24,281 27,006
(1)
Unclaimed amounts are transferred to Investor Protection and Education Fund after seven years from the due date. Current 2,824 - 611 3,435
Non- current - 58 - 58
2.10 D. TRADE PAYABLES 2,824 58 611 3,493
AS AT
PARTICULARS AS AT (1)
Refund liability is accounted for by recording a provision based on the Company’s estimate of expected sales returns. See note 1.3 (m) of these consolidated financial statements for the
31 MARCH 2021 31 MARCH 2020 Company’s accounting policy on refund liability.
(2)
As a result of the acquisition of a unit of The Dow Chemical Company in April 2008, the Company assumed a liability for contamination of the Mirfield site acquired of ` 39 (carrying value
Due to micro, small and medium enterprises 158 55 ` 58). The seller is required to indemnify the Company for this liability. Accordingly, a corresponding asset has also been recorded in the consolidated balance sheet.
(3)
Primarily consists of provision recorded towards the potential liability arising out of a litigation relating to cardiovascular and anti-diabetic formulations. Refer note 2.32 of these consolidated
Others 17,951 15,193 financial statements under �Product and patent related matters - Matters relating to National Pharmaceutical Pricing Authority - Litigation relating to Cardiovascular and Anti-diabetic
formulations” for further details.
18,109 15,248
For details regarding the Company’s exposure to currency and liquidity risks, see note no. 2.31 of these consolidated financial statements
under “Liquidity risk”. 2.12 OTHER LIABILITIES
AS AT AS AT
PARTICULARS
Trade payables and other financial liabilities includes amount due to related party ` 93 and ` 91 as on 31 March 2021 and 31 March 2020, see 31 MARC 31 MARC
note no. 2.24 of these consolidated financial statements. H 2021 H 2020
A. Non-current liabilities
Deferred revenue(1) 1,531 1,956
Other non-current liabilities 86 99
1,617 2,055
B. Current liabilities
Salary and bonus payable 3,576 3,385
Statutory dues payable 2,968 980
Deferred revenue(1) 1,052 1,242
Advance from customers 981 668
Others 197 237
8,774 6,512
(1)
Refer note 2.13 for details of deferred revenue.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data)

2.13 REVENUE FROM CONTRACTS WITH CUSTOMERS AND TRADE RECEIVABLES

2.13 REVENUE FROM CONTRACTS WITH CUSTOMERS AND TRADE RECEIVABLES (CONTINUED)

Revenue from contracts with customers: Analysis of revenues by geography:

FOR THE YEAR ENDED FOR THE YEAR ENDED The following table shows the distribution of the Company’s revenues (excluding other operating income) by country, based on the
PARTICULARS location of the customers:
31 MARCH 2021 31 MARCH 2020
FOR THE YEAR ENDED FOR THE YEAR ENDED
Sales 184,202 163,574 PARTICULARS
31 MARCH 2021 31 MARCH 2020
Service income 4,105 2,409
India 36,252 32,089
License fees(1) 1,415 8,617
United States 76,702 76,028
189,722 174,600
Russia 15,816 16,900
(1)
During the year ended 31 March 2020, the Company entered into a definitive agreement with Upsher-Smith Laboratories, LLC for the sale of its US and select territory rights for
ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) which formed part of its Proprietary Others 60,952 49,583
Products segment. License fees includes an amount of ` 7,486 (US$ 108.7 million) towards the aforesaid sale transaction.
189,722 174,600
Analysis of revenues by segments:
The following table shows the analysis of revenues (excluding other operating income) by segments:
FOR THE YEAR ENDED FOR THE YEAR ENDED Information about major customers
PARTICULARS Revenues from two customers of the Company's Global Generics segment were ` 19,341 and ` 9,867, representing approximately 10% and 5%
31 MARCH 2021 31 MARCH 2020
respectively, of the Company’s total revenues for the year ended 31 March 2021.
Global Generics 154,404 138,123
Revenues from two customers of the Company's Global Generics segment were ` 14,164 and ` 9,267, representing approximately 8% and 5%
PSAI 31,982 25,747 respectively, of the Company’s total revenues for the year ended 31 March 2020.
Proprietary products 523 7,949
Others 2,813 2,781 Details of significant gross to net adjustments relating to Company�s North America Generics business �amounts in US� millions�
189,722 174,600 A roll-forward for each major accrual for the Company’s North America Generics business for the financial years ended 31 March 2021
and 31 March 2020 is as follows:
Analysis of revenues within the Global Generics segment: All values in US$ millions
An analysis of revenues (excluding other operating income) by therapeutic areas in the Company’s Global Generics segment is given below: PARTICULARS CHARGEBACKS REBATES MEDICAID REFUND LIABILITY
FOR THE YEAR ENDED FOR THE YEAR ENDED Balance as at 1 April 2019 128 92 11 30
PARTICULARS
31 MARCH 2021 31 MARCH 2020
Current provisions relating to sales during the year (1)
1,468 319 20 21
Nervous System 29,040 26,825
Provisions and adjustments relating to sales in prior years * - - -
Gastrointestinal 21,132 19,394
Credits and payments** (1,440) (331) (20) (27)
Oncology 16,842 18,245
Balance as at 31 March 2020 156 80 11 24
Pain Management 15,531 13,808
Balance as at 1 April 2020 156 80 11 24
Cardiovascular 15,460 14,729
Current provisions relating to sales during the year(2) 1,702 245 21 15
Anti-Infective 12,906 9,402
Provisions and adjustments relating to sales in prior years * - - -
Respiratory 11,089 10,433
Credits and payments** (1,656) (247) (19) (20)
Others 32,404 25,287
Balance as at 31 March 2021 202 78 13 19
154,404 138,123 * Currently, the Company does not separately track provisions and adjustments, in each case to the extent relating to prior years for chargebacks. However, the adjustments are expected
to be non-material. The volumes used to calculate the closing balance of chargebacks represent approximately 1.3 months equivalent of sales, which corresponds to the pending
chargeback claims yet to be processed.
Analysis of revenues within the PSAI segment: ** Currently, the Company does not separately track the credits and payments, in each case to the extent relating to prior years for chargebacks, rebates, medicaid payments or refund
An analysis of revenues (excluding other operating income) by therapeutic areas in the Company’s PSAI segment is given below: liability.
(1)
Chargebacks provisions for the year ended 31 March 2020 were higher compared to the year ended 31 March 2019, primarily as a result of higher sales volumes, which were partially
FOR THE YEAR ENDED FOR THE YEAR ENDED offset due to a lower pricing rates per unit for chargebacks. Such lower pricing was primarily on account of a reduction in the invoice price to wholesalers for certain of the Company’s
PARTICULARS products. The chargebacks payments for the year ended 31 March 2020 were lower compared to the year ended 31 March 2019, primarily as a result of higher pending chargebacks
31 MARCH 2021 31 MARCH 2020
claims at 31 March 2020 as compared to 31 March 2019. The rebates provisions and the payments for the year ended 31 March 2020 were each lower as compared to the year ended
Cardiovascular 9,834 8,567 31 March 2019, primarily as a result of lower pricing rates per unit for rebates due to a reduction in the invoice price to wholesalers for certain of the Company’s products which were
partially offset by higher sales volumes during the year ended 31 March 2020 as compared to the year ended 31 March 2019.
Pain Management 4,657 5,073 (2)
Charge backs provisions and payments for the year ended 31 March 2021 were each higher as compared to the year ended 31 March 2020, primarily as a result of higher sales volumes
and also due to higher pricing rates per unit for chargebacks, due to reduction in the contract prices through which the product is resold in the retail part of the supply chain for certain of
Anti-Infective 4,126 2,264 the Company’s products. The rebates provisions and payments for the year ended 31 March 2021 were each lower as compared to the year ended 31 March 2020, primarily as a result
of lower pricing rates per unit for rebates, due to a reduction in the invoice price to wholesalers for certain of the Company’s products and also due to reduction in the contract prices
Nervous System 2,704 2,797 through which the product is resold in the retail part of the supply chain for certain of the Company’s products, which were partially off-set by higher sales volumes during the year ended
31 March 2021 as compared to the year ended 31 March 2020.
Oncology 2,385 1,798
The Company’s overall refund liability as of 31 March 2021 relating to its North America Generics business was US$ 19 million, as compared to
Dermatology 768 1,370
a liability of US$ 24 million as at 31 March 2020. This decrease in the Company's liability was primarily attributable to a lower refund
Others 7,508 3,878 liability allowance for the year ended 31 March 2021 as compared to the year ended 31 March 2020. Such allowance change was
31,982 25,747 primarily due to certain product mix changes and recent trends in actual sales returns, together with the Company's historical experience, and
also the price reduction for certain products resulting into lower refund liability to be carried.
The estimates of “gross-to-net” adjustments for the Company’s operations in India and other countries outside of the United States relate
mainly to refund liability in all such operations, and certain rebates to healthcare insurance providers are specific to the Company’s German
operations. The pattern of such refund liability is generally consistent with the Company’s gross sales. In Germany, the rebates to healthcare
insurance providers mentioned above are contractually fixed in nature and do not involve significant estimations by the Company.
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.15 OTHER INCOME
2.13 REVENUE FROM CONTRACTS WITH CUSTOMERS AND TRADE RECEIVABLES (CONTINUED)
FOR THE YEAR ENDED FOR THE YEAR ENDED
Details of refund liabilities: PARTICULARS
31 MARCH 2021 31 MARCH 2020
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS
31 MARCH 2021 31 MARCH 2020 Interest income 826 888
Balance at the beginning of the year 3,252 3,581 Fair value gain on financial instruments measured at fair value through profit or loss 557 929
Provision made during the year, net of reversals 2,934 2,675 Foreign exchange gain, net 1,243 629
Provision used during the year (3,309) (3,224) Miscellaneous income, net(1) 288 3,760
Effect of changes in foreign exchange rates (53) 220 2,914 6,206
Balance at end of the year 2,824 3,252 (1)
Miscellaneous income, net includes ` 3,457 (US$50 millions) received from Celgene pursuant to a settlement agreement entered into in April 2019. The agreement effectively settles
any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the
Company�s ANDS for a generic version of REVLIMID® brand capsules (Lenalidomide) pending before Health Canada.

Current 2,824 3,252

2.16 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
Non-current - -
FOR THE YEAR ENDED FOR THE YEAR ENDED
2,824 3,252 PARTICULARS 31 MARCH 2021 31 MARCH 2020
Opening
Details of contract asset:
As mentioned in the accounting policies for refund liability set forth in note 1.3 (m) of these consolidated financial statements, the Company Work-in-progress 6,806 7,201
recognises an asset, (i.e., the right to the returned goods), which is included in inventories for the products expected to be returned. Finished goods 8,254 7,127
The Company initially measures this asset at the former carrying amount of the inventory, less any expected costs to recover the
Stock-in-trade 6,873 21,933 7,842 22,170
goods, including any potential decreases in the value of the returned goods. Along with re-measuring the refund liability at the end of each
reporting period, the Company updates the measurement of the asset recorded for any revisions to its expected level of returns, as well as Closing
any additional decreases in the value of the returned products. Work-in-progress 10,009 6,806
As on 31 March 2021 and 31 March 2020, the Company had ` 37 and ` 23, respectively, as contract assets representing the right to returned Finished goods 13,732 8,254
goods.
Stock-in-trade 6,097 29,838 6,873 21,933
Details of deferred revenue: (7,905) 237
Tabulated below is the reconciliation of deferred revenue for the years ended 31 March 2021 and 31 March 2020:
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS
31 MARCH 2021 31 MARCH 2020
2.17 EMPLOYEE BENEFITS EXPENSE
FOR THE YEAR ENDED FOR THE YEAR ENDED
Balance at the beginning of the year 3,198 2,592 PARTICULARS
31 MARCH 2021 31 MARCH 2020
Revenue recognised during the year (1,089) (1,250) Salaries, wages and bonus 30,407 28,563
Milestone payment received during the year 474 1,856 Contribution to provident and other funds 2,599 2,504
Balance at end of the year 2,583 3,198
Staff welfare expenses 2,552 2,120
Current 1,052 1,242
Share-based payment expenses 741 615
Non-current 1,531 1,956
36,299 33,802
2,583 3,198
2.18 DEPRECIATION AND AMORTISATION EXPENSE
Details of contract liabilities:
AS AT AS AT FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS PARTICULARS
31 MARC 31 MARC 31 MARCH 2021 31 MARCH 2020
H 2021 H 2020
Depreciation of property, plant and equipment 8,510 8,624
Advance from customers 981 668
Amortisation of other intangible assets 3,778 3,007
981 668
12,288 11,631

2.14 OTHER OPERATING INCOME

2.19 FINANCE COSTS
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS FOR THE YEAR ENDED FOR THE YEAR ENDED
31 MARCH 2021 31 MARCH 2020 PARTICULARS
31 MARCH 2021 31 MARCH 2020
Sale of spent chemicals 270 306
Interest on long-term borrowings 94 282
Scrap sales 142 167
Interest on other borrowings 876 701
Miscellaneous income, net 341 97
970 983
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
753 570
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.22 AUDITORS' REMUNERATION
2.20 SELLING AND OTHER EXPENSES
FOR THE YEAR ENDED FOR THE YEAR ENDED
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS

PARTICULARS 31 MARCH 2021 31 MARCH 2020

Audit fees 16 15
31 MARCH 2021 31 MARCH 2020
Other charges- Certification fee 1 1
Consumption of stores, spares and other materials 5,852 5,512
Reimbursement of out of pocket expenses 1 2
Clinical trials and other R&D expenses 6,561 5,837
Advertisements 1,63718 18
1,386
Commission on sales 453 227
Carriage
2.23 outward
EARNINGS PER SHARE (EPS) 5,871 3,849
Other selling expenses 7,716 8,621
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS
Legal and professional 5,095
31 MARCH 2021 4,219
31 MARCH 2020
Power and fuel 3,205 3,148
Repairs and maintenance
Buildings 228 259
Earnings 19�516 20�260
Plant and equipment 944 809
Others 2,159 2,037 Profit attributable to equity shareholders of the Company

Insurance 676 494 Shares

Travel and conveyance 995 1,648 Number of equity shares at the beginning of the year (excluding treasury shares) 165�776�132 165�847�972
Rent 271 260 Effect of treasury shares held during the year (56�014) (154�020)
Rates and taxes 1,160 1,012 Effect of equity shares issued on exercise of stock options 124�222 64�432
Loss on sale / disposal of property, plant and equipment and other intangible assets, net 42 67
Weighted average number of equity shares – Basic 165�844�340 165�758�384
Corporate social responsibility and donations(1) 504 459
(1)
Allowance for credit losses, net (Refer note 2.6 B) 176 154 Dilutive effect of stock options outstanding 471�701 323�601

Allowance for doubtful advances, net 54 36 Weighted average number of equity shares – 166�316�041 166�081�985
Non-Executive Directors’ remuneration 91 108 Diluted 117�67 122�22
Auditors’ remuneration (Refer note 2.22) 18 18 Earnings per share of par value ₹ 5/- – Basic ( ₹ ) 117�34 121�99
Earnings per share of par value ₹ 5/- – Diluted ( ₹ )
Other general expenses 4,212 4,193 (1)
As at 31 March 2021 and 31 March 2020, 235,460 and 475,575 options, respectively, were excluded from the diluted weighted average number of equity shares calculation because
their effect would have been anti�dilutive. The average market value of the Company�s shares for the purpose of calculating the dilutive effect of stock options was based on quoted
47,920 44,353 market prices for the year during which the options were outstanding.
(1)
Details of corporate social responsibility expenditure in accordance with section 135 of the Companies Act, 2013:
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
PARTICULARS IN CASH YET TO BE PAID IN CASH TOTAL
Gross amount required to be spent by the Company during the year 356
Amount spent during the year ending on 31 March 2021 377 -* 377
Amount spent during the year ending on 31 March 2020 285 -* 285
* Rounded off to million�

2.21 RESEARCH AND DEVELOPMENT EXPENSES

Details of research and development expenses (excluding depreciation and amortisation expense) incurred during the year and included under
various heads of expenditures are given below:
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS
31 MARCH 2021 31 MARCH 2020
Employee benefits expense (included in note 2.17) 4,708 4,781
Other expenses (included in note 2.20)
Materials and consumables 4,199 4,078
Clinical trials and other R&D expenses 6,561 5,837
15,468 14,696
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data)

2.24 RELATED PARTIES

2.24 RELATED PARTIES (CONTINUED)
a) In accordance with the provisions of Ind AS 24, Related Party Disclosures and the Companies Act, 2013, Company's Directors, members of
c) The following is a summary of significant related party transactions�
the Company's Management Council and Company Secretary are considered as Key Managerial Personnel.
List of Key Managerial Personnel of the Company is as below: FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 202131 MARCH 2020
1. K Satish Reddy
2. G V Prasad Whole-time director (Chairman) Research and development services received
3. Allan Oberman Whole-time director (Co-Chairman and Managing Director) Dr.Reddy’s Institute of Life Sciences 105 105
4. Bharat Narotam Doshi Independent director
5. Dr. Bruce LA Carter Independent director Research and development services provided
6. Kalpana Morparia Independent director Kunshan Rotam Reddy Pharmaceuticals Company Limited 93 58
7. Leo Puri Independent director
8. Prasad R Menon Independent director Contributions towards social development
9. Shikha Sharma Independent director Dr.Reddy’s Foundation 217 218
10. Sridar Iyengar Independent director Pudami Educational Society 15 15
Independent director Total 232 233
11. Dr. Omkar Goswami (till 30 July 2019)
12. Anupam Puri (till 26 July 2019) Independent director
Independent director Catering services
13. Anil Namboodiripad
14. Archana Bhaskar Management council member Green Park Hospitality Services Private Limited 301 344
Management council member
15. Deepak Sapra
Management council member Facility management services
16. Erez Israeli
CEO and management council member Green Park Hospitality Services Private Limited 36 24
17. M V Ramana
Management council member
18. Marc Kikuchi
Management council member Hotel expenses
19. P Yugandhar
Management council member Green Park Hotel and Resorts Limited 7 15
20. Sanjay Sharma
Management council member Stamlo Industries Limited 1 7
21. Saumen Chakraborty
Management council member Total 8 22
22. Sauri Gudlavalleti
Management council member
23. Patrick Aghanian (from 7 October 2019)
Management council member Civil works
24. Mukesh Rathi (from 1 December 2020)
Management council member Indus Projects Private Limited 55 101
25. Parag Agarwal (from 1 December 2020)
Management council member
26. Ganadhish Kamat (till 31 March 2021)
Management council member Professional consulting services
27. Dr. Raymond de Vre (till 31 March
2021) Management council member Samarjita Management Consultancy Private Limited 28 -
28. Sandeep Poddar Company secretary AverQ Inc. 2 3

b) List of related parties with whom transactions have taken place during the current and/or previous Others -* 1
year: 30 4
1. K Samrajyam Mother of Chairman *Rounded off to millions.
2. K Deepti Reddy Spouse of Chairman
3. G Anuradha Spouse of Co-chairman Sales of goods
4. G Mallika Reddy Daughter of Co-chairman Kunshan Rotam Reddy Pharmaceuticals Company Limited 22 14
5. G V Sanjana Reddy Daughter of Co-chairman
6. Akhil Ravi Son-in-law of Co-chairman Lease rentals paid to
7. Kunshan Rotam Reddy Pharmaceuticals Enterprise over which the Company exercises joint control with other Key Managerial Personnel
Company Limited joint venture partners and holds 51.33% of equity shares K Satish Reddy 14 13
8. DRES Energy Private Limited Enterprise over which the Company exercises joint control with other Relatives of Key Managerial Personnel 23 22
joint venture partners and holds 26% of equity shares Total 37 35
9. Araku Originals Private Limited Enterprise over which whole-time directors have significant inNuence
10. AverQ Inc.,USA Enterprise over which Key Managerial Personnel have significant inNuence Lease rentals received
11. Cancelled Plans LLP Enterprise over which relatives of whole-time directors have significant inNuence DRES Energy Private Limited 1 1
12. CERG Advisory Private Limited Enterprise controlled by (erstwhile) Key Managerial Personnel (till 30 July 2019)
13. Dr. Reddy’s Foundation Enterprise over which whole-time directors and their relatives have significant inNuence Purchase of Solar power
14. Dr. Reddy's Institute of Life Sciences Enterprise over which whole-time directors have significant inNuence DRES Energy Private Limited 127 108
15. Green Park Hospitality Services Private Limited Enterprise controlled by relative of a whole-time director
16. Green Park Hotels and Resorts Limited Enterprise controlled by relative of a whole-time director Salaries to relatives of Key Managerial Personnel 8 7
17. Indus Projects Private Limited Enterprise over which relatives of whole-time directors have significant inNuence
18. Pudami Educational Society Enterprise over which whole-time directors and their relatives have significant inNuence Other services received (Rounded off to millions) -* -*
19. Samarjita Management Consultancy Private Enterprise controlled by Key Managerial Personnel
Limited Enterprise over which whole-time directors and their relatives have significant inNuence Remuneration to Key Managerial Personnel
(1)
20. Shravya Publications Pvt. Ltd. Enterprise controlled by whole-time directors Salaries and other benefits 816 694
21. Stamlo Industries Limited Contributions to defined contribution plans 35 35
Further, the Company contributes to the Dr. Reddy's Laboratories Gratuity Fund, which maintains the plan assets of the Company's Gratuity Company and the Gratuity Commission to payments
Plan for the benefit of its employees. Refer note 2.27 of these consolidated financial statements for information on transactions between the Fund. directors Share-based expense
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Total 301 298 1�195
261 168
1�413
(1)
Some of the Key Managerial Personnel of the Company are also covered under the Company's Gratuity Plan along with the other employees of the Company. Proportionate amounts
of gratuity accrued under the Company's Gratuity Plan have not been separately computed or included in the above disclosure.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data)

2.24 RELATED PARTIES (CONTINUED)

2.25 SEGMENT REPORTING (CONTINUED)

d) The Company has the following amounts due from/ to related parties: Segment information:
FOR THE YEAR ENDED 31 MARCH 2021
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS REPORTABLE SEGMENTS GLOBAL PSAI PROPRIETARY
GENERICS PRODUCTS OTHERS TOTAL
Due from related parties Revenue from operations 154�759 39�284 523 2�814 197�380
(1)
Key Managerial Personnel (towards rent deposits) 8 8 Less: Inter-segment revenue - (6�905) - - (6�905)
Revenue from operations 154�759 32�379 523 2�814 190�475
Kunshan Rotam Reddy Pharmaceuticals Company Limited 54 3
Gross profit 91�111 9�444 482 2�058 103�177
Green Park Hospitality Services Private Limited 17 47 Less: Selling and other unallocable expense/ (income), net 74�740
DRES Energy Private Limited 1 17 Profit before tax and before share of equity accounted investees 28�355
Others - 1 Add: Share of profit of equity accounted 480
investees 28�835
Total 80 76
Profit before tax 9�319
Tax expense 19�516
Due to related parties Profit for the
year
Green Park Hospitality Services Private 38 48 FOR THE YEAR ENDED 31 MARCH 2020
Limited Dr. Reddy's Institute of Life Sciences 34 - REPORTABLE SEGMENTS GLOBAL GENERICS PSAI PROPRIETARY OTHERS TOTAL
138�264 32�086 PRODUCTS
7�949 2�781 181�080
Indus Projects Private Limited 17 31
Less: Inter-segment revenue
(1)
- (5�910) - - (5�910)
DRES Energy Private Limited 3 12 Revenue
Revenue from
fromoperations
operations 138�264 26�176 7�949 2�781 175�170
Others 1 -* Gross profit 78�449 6�219 7�744 1�626 94�038

Less: Selling and other unallocable expense/ (income), net 75�742

Total 93 91
Profit before tax and before share of equity accounted 18�296
*Rounded off to millions�
investees Add: Share of profit of equity accounted 561
investees Profit before tax 18�857
2.25 SEGMENT REPORTING Tax expense (1�403)
Profit for the year 20�260
The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources based on an analysis of various (1)
Inter-segment revenue represents sale from PSAI to Global Generics at cost.
performance indicators by operating segments. The CODM reviews revenue and gross profit as the performance indicator for all of the
operating segments, and does not review the total assets and liabilities of an operating segment. The Co-Chairman and Managing Director was Analysis of revenues within the Global Generics segment:
previously
the CODM of the Company. Pursuant to certain organisational changes, effective 1 December 2020, the office of Chief Executive Officer An analysis of revenues (excluding other operating income) by therapeutic areas in the Company's Global Generics segment is given below:
(“CEO”) assumed the authority and responsibility for making decisions about resources to be allocated to various segments and
assessing their performance. Consequently, the CEO is currently the CODM of the Company. FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 20213
PARTICULARS
The Company’s reportable operating segments are as follows:
• Global Generics; Nervous System 29�040 26�825
• Pharmaceutical Services and Active Ingredients (“PSAI”); Gastrointestinal 21�132 19�394
• Proprietary Products; and Oncology 16�842 18�245
• Others Pain Management 15�531 13�808
Global Generics: This segment consists of the Company’s business of manufacturing and marketing prescription and over-the-counter finished Cardiovascular 15�460 14�729
pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic Anti-Infective 12�906 9�402
finished dosages with therapeutic equivalence to branded formulations (generics). This segment includes the operations of the Respiratory 11�089 10�433
Company’s biologics business. Others 32�404 25�287
Pharmaceutical Services and Active Ingredients: This segment primarily consists of the Company’s business of manufacturing and Total 154�404 138�123
marketing active pharmaceutical ingredients and intermediates, also known as “API”, which are the principal ingredients for finished
pharmaceutical products. Active pharmaceutical ingredients and intermediates become finished pharmaceutical products when the dosages are Analysis of revenues within the PSAI segment:
fixed in a form
ready for human consumption such as a tablet, capsule or liquid using additional inactive ingredients. This segment also includes the Company’s (“ADTL”), a discovery stage biotechnology company developing novel and best-in-class therapies in the fields of oncology and inNammation ADTL
contract research services business and the manufacture and sale of active pharmaceutical ingredients and steroids in accordance with works with established pharmaceutical and biotechnology companies through customised FOR
models
THEof YEAR
drug-discovery
ENDED collaborations.
FO R THE YEAR ENDED
the specific customer requirements. PARTICULARS 31 MARCH 2021 31 MARCH 2020
The measurement of each segment’s revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the
Proprietary Products: This segment consists of the Company’s business that focuses on the research and development of Cardiovascular
Company’s consolidated financial statements. 9�834 8�567
differentiated formulations. The segment is expected to earn revenues arising out of monetisation of such assets and subsequent royalties, if Pain Management 4�657 5�073
any. Anti-Infective 4�126 2�264
Others: This segment consists of the operations of the Company’s wholly-owned subsidiary, Aurigene Discovery Technologies Limited Nervous System 2�704 2�797
Oncology 2�385 1�798
Dermatology 768 1�370
Others 7�508 3�878
Total 31�982 25�747
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
An analysis of revenues (excluding other operating income) by therapeutic areas in the Company's PSAI segment is given below:
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.25 SEGMENT REPORTING (CONTINUED)

2.26 DESCRIPTION OF THE GROUP
Analysis of revenues by geography:
The following table shows the distribution of the Company's revenues (excluding other operating income) by country, based on the location of A. Subsidiaries, step-down subsidiaries, joint ventures and other consolidating entities of the parent company are listed below:
the customers:
ENTITY COUNTRY OF INCORPORATION
% OF DIRECT/INDIRECT OWNERS

PARTICULARS FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
Subsidiaries
Aurigene Discovery Technologies Limited India 100
India 36�252 32�089 Cheminor Investments Limited India 100
Dr. Reddy’s Bio-Sciences India 100
United States 76�702 76�028 Limited India 100
Russia 15�816 16�900 Dr. Reddy’s Formulations Limited (incorporated effective 11 March 2021) Brazil 100
(1) Dr. Reddy’s Farmaceutica Do Brasil Ltda. Switzerland 100
Others 60�952 49�583
Dr. Reddy's Laboratories SA India 100
Total 189�722 174�600 Idea2Enterprises (India) Private Limited India 100
(1)
Others include Germany, the United Kingdom, Ukraine, China, Canada and other countries across the world.
Imperial Credit Private Limited Mexico 100
Industrias Quimicas Falcon de Mexico, S.A.de C.V. Netherlands 100
Reddy Antilles N.V. (Liquidated during the year ended 31 March 2020) India 100
Analysis of assets by geography:
Svaas Wellness Limited (Formerly known as Regkinetics Services Limited )
The following table shows the distribution of the Company's non-current assets (other than financial instruments and deferred tax assets) by
country, based on the location of assets: Step-down subsidiaries
Aurigene Discovery Technologies (Malaysia) SDN Malaysia (3)
100
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020 BHD Aurigene Discovery Technologies Inc. USA
PARTICULARS Aurigene Pharmaceutical Services Limited, India (from 16 September 2019) India 100
(3)

(3)
100

India beta Institut gemeinnützige GmbH Germany (8)

76�232 56�900 100
betapharm Arzneimittel GmbH Germany
Switzerland 100
(8)
11�635 18�151 Chirotech Technology Limited United Kingdom
United States DRL Impex Limited India 100
(2) (5)
7�324 7�445
Germany Dr. Reddy’s Laboratories (Australia) Pty. Limited Australia (15)
100
2�973 2�900 Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited (incorporated effective 19 August 2020) China
Others Dr. Reddy’s Laboratories B.V. (Formerly Eurobridge Consulting B.V.) Netherlands 100
(10)

5�971 5�809
Total Dr. Reddy’s Laboratories Canada, Inc. Canada 100
(10)

104�135 91�205 Dr. Reddy's Laboratories Chile SPA. Chile (12)

100
Dr. Reddy’s Laboratories (EU) Limited United Kingdom
(10)
100
(10)
100
(10)
100
The following table shows the distribution of the Company's property, plant and equipment including capital work in progress and intangible Dr. Reddy’s Laboratories Inc. USA (10)
100
assets acquired during the year (other than goodwill arising on business combination) by country, based on the location of assets: Dr. Reddy’s Laboratories International SA Switzerland
(10)
(merged with Dr. Reddy's Laboratories SA w.e.f 24 June 100
2019)
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020 Japan
PARTICULARS Dr. Reddy's Laboratories Japan KK Kazakhstan 100
(10)

Dr. Reddy’s Laboratories Kazakhstan LLP Ukraine (10)

Dr. Reddy’s Laboratories LLC 100
(10)
100
India 27�822 6�043 5�475 D
Switzerland 1�940 1�025 r
Informa
tion .
United States 2�155 296
about
Others major 1�014 709
custom R
Total ers 32�93 7�505 e
1 d
d
Analysis of depreciation and amortisation, for arriving gross profit by reportable segments� y
'
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS s

Global Generics 3�667

L
3�435
PSAI 2�776 a
Others 2�560 b
72
o
Total 48
6�515 r
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
atories Louisiana LLC Dr. Reddy’s Laboratories Malaysia Sdn. USA Roman ore Italy (5)
100
(6) 100
Bhd. M ia China Venezuela Cyprus Russia Russia (10)
Dr. Reddy’s Laboratories New York, Inc. (transfer of ownership from DRL Swiss to DRL Inc. effective 29 Colom 100
(10) 100
al
October 2020 and conversion from Inc. to LLC effective 30 October 2020 bia 100
(12)
a 100
(6)

Dr. Reddy's Laboratories Philippines Inc. Dr. Reddy’s y Taiwan (10)

100
Laboratories (Proprietary) Limited Dr. Reddy's Laboratories si Thaila
(10)
Romania S.R.L. Dr. Reddy's Laboratories SAS Dr. nd 100 100
(11)

a
Reddy's Laboratories Taiwan Limited Dr. Reddy's Laboratories U United 100
(10)
100
(10)

(Thailand) Limited Dr. Reddy’s Laboratories (UK) Limited Dr. S Kingdo (10)
100 100
(10)

Reddy’s New Zealand Limited Dr. Reddy's Research and A m New

(10)
Development B.V. Zealan 100 100
(10)

Dr. Reddy’s Singapore PTE Limited (liquidated during the year ended 31 March 2020) Dr. Reddy’s Srl Philippin d 100
(10) (10)
100
Dr. Reddy’s (WUXI) Pharmaceutical Co. Limited Dr. Reddy's es South Netherl (10)
ands 100 100
(9)
Venezuela, C.A. Lacock Holdings Limited Africa
OOO Dr. Reddy’s Laboratories Limited OOO DRS LLC Singap
Revenues from two customers of the Company's Global Generics segment were ` 19,341 and ` 9,867, representing approximately 10% and Promius Pharma LLC USA (6)
100
5%, respectively, of the Company’s total revenues for the year ended 31 March 2021. Reddy Holding GmbH Germany (10)
100
Reddy Netherlands B.V. Netherlands
Revenues from two customers of the Company's Global Generics segment were ` 14,164 and ` 9,267, representing approximately 8% and Reddy Pharma Iberia SAU Spain 100
(10)

5%, respectively, of the Company’s total revenues for the year ended 31 March 2020 Reddy Pharma Italia S.R.L Italy (10)
100
Reddy Pharma SAS France (7)
100
(10)
100
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.26 DESCRIPTION OF THE GROUP (CONTINUED)

2.26 DESCRIPTION OF THE GROUP (CONTINUED)

ENTITY COUNTRY OF INCORPORATION

% OF DIRECT/INDIRECT OWNERSHIP INTEREST AS AT 31 MARCH 2021 FOR THE YEAR ENDED 31 MARCH 2021

Joint ventures NET ASSETS, i.e., SHARE IN SHARE IN TOTAL

SHARE
DRANU LLC USA TOTAL ASSETS MINUS PROFIT COMPREHENSIVE
50
(2) (13) SL. TOTAL LIABILITIES OR LOSS IN OCI INCOME (TCI)
NO. NAME OF THE ENTITY
DRES Energy Private Limited India AS % OF AS % OF AS % OF AS % OF
(14)
Kunshan Rotam Reddy Pharmaceutical Company China 26 CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT CONSOLIDATED
(4) AMOUNT
Limited 51.33 NET ASSETS PROFIT OR LOSS OCI TCI

Foreign
Other consolidating entities India
Cheminor Employees Welfare Trust India Refer to footnote 1 Aurigene Discovery Technologies (Malaysia) SDN BHD 0�02 40 0�01 2 - - 0�01 2
Dr. Reddy's Employees ESOS Trust India 16 Refer to 2 Aurigene Discovery Technologies Inc. - - (0�01) (1) - - (0�00) (1)
Dr. Reddy's Research Foundation footnote 16 Refer 3 beta Institut gemeinnützige GmbH - 5 (0�01) (2) - - (0�01) (2)
to footnote 16
(1) Indirectly owned through Dr. Reddy's Research and Development 4 betapharm Arzneimittel GmbH 0�05 89 (0�10) (20) - - (0�08) (20)
B.V.
5 Chirotech Technology Limited 0�72 1�277 0�10 20 - - 0�08 20
(2) Entities under liquidation.
6 Dr. Reddy's (Beijing) Pharmaceutical Co. Limited 0�06 107 (0�02) (3) - - (0�01) (3)
(3) Indirectly owned through Aurigene Discovery Technologies Limited.
7 Dr. Reddy’s Farmaceutica Do Brasil Ltda. (0�06) (102) 0�22 42 - - 0�17 42
(4) Kunshan Rotam Reddy Pharmaceutical Co. Limited is a subsidiary as per Indian Companies Act, 2013, as the Company holds a 51.33% stake. However, the Company accounts for 8 Dr. Reddy’s Laboratories (Australia) Pty. Limited (0�16) (279) 0�20 39 - - 0�16 39
this investment by the equity method and does not consolidate it in the Company's consolidated financial statements.
9 Dr. Reddy’s Laboratories (Canada) Inc. 0�24 431 0�25 48 - - 0�19 48
(5) Indirectly owned through Dr. Reddy's Laboratories (EU) Limited.
10 Dr. Reddy's Laboratories Chile SPA. 0�04 69 0�22 43 - - 0�17 43
(6) Indirectly owned through Dr. Reddy's Laboratories Inc.
11 Dr. Reddy’s Laboratories (EU) Limited 1�73 3�046 1�78 347 - - 1�39 347
(7) Indirectly owned through Lacock Holdings Limited.
12 Dr. Reddy’s Laboratories Inc. 12�04 21�236 20�34 3�969 - - 15�93 3�969
(8) Indirectly owned through Reddy Holding GmbH.
13 Dr. Reddy's Laboratories Japan KK 0�01 14 0�01 2 - - 0�01 2
(9) Indirectly owned through OOO Dr. Reddy's Laboratories Limited (from January 2019), formerly subsidiary of Dr. Reddy's Laboratories B.V (Formerly Eurobridge consulting B.V.)
14 Dr. Reddy’s Laboratories Kazakhstan LLP 0�12 216 0�66 128 - - 0�51 128
(10) Indirectly owned through Dr. Reddy's Laboratories SA.
15 Dr. Reddy’s Laboratories LLC 0�13 236 0�90 175 - - 0�70 175
(11) Indirectly owned through Reddy Pharma Italia S.R.L.
16 Dr. Reddy’s Laboratories Louisiana LLC (1�71) (3�011) (4�96) (968) - - (3�89) (968)
(12) Indirectly owned through Reddy Netherlands B.V.
17 Dr. Reddy’s Laboratories Malaysia Sdn. Bhd. 0�03 58 0�11 21 - - 0�08 21
(13) DRANU LLC is consolidated in accordance with guidance available in Ind AS 110.
18 Dr. Reddy’s Laboratories New York, LLC (1�39) (2�448) (1�76) (344) - - (1�38) (344)
(14) Accounted in accordance with Ind AS 111, Joint Arrangements. 19 Dr. Reddy's Laboratories Philippines Inc. - (4) (0�06) (11) - - (0�04) (11)
(15) Indirectly owned through Idea2Enterprises (India) Private Limited. 20 Dr. Reddy’s Laboratories (Proprietary) Limited 0�23 403 0�43 84 - - 0�34 84
(16) The Company does not have any equity interests in this entity, but has significant inNuence or control over it. 21 Dr. Reddy’s Laboratories Romania S.R.L. 0�25 433 0�57 111 - - 0�45 111
22 Dr. Reddy’s Laboratories SA 23�74 41�876 (22�67) (4�424) 4�83 261 (16�71) (4�163)
B. Additional information pursuant to para 2 of general instructions for the preparation of consolidated financial statements� 23 Dr. Reddy’s Laboratories SAS 0�06 113 0�20 40 - - 0�16 40
24 Dr. Reddy's Laboratories Taiwan Ltd. 0�01 16 0�02 4 - - 0�02 4
AS AT 31 MARCH 2021 FOR THE YEAR ENDED 31 MARCH 2021
25 Dr. Reddy's Laboratories (Thailand) Limited (0�01) (18) 0�13 26 - - 0�10 26
NET ASSETS, i.e., SHARE IN PROFIT OR LOSS SHARE IN TOTAL COMPREHENSIVE INCOME (TCI) 26 Dr. Reddy’s Laboratories (UK) Limited 2�01 3�547 1�35 264 - - 1�06 264
SHARE IN OCI
SL. TOTAL ASSETS MINUS 27 Dr. Reddy's Research and Development B.V. 1�28 2�255 14�81 2�891 - - 11�60 2�891
NAME OF THE ENTITY TOTAL LIABILITIES
NO. AS % OF AS % OF
AS % OF 28 Dr. Reddy’s Srl (0�44) (772) (0�79) (154) - - (0�62) (154)
TCI
AS % OF
CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT 29 Dr. Reddy’s New Zealand Limited 0�05 82 0�01 1 - - 0�00 1
NET PROFIT OR OCI
ASSETS LOSS 30 Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd. 0�02 37 (0�03) (5) - - (0�02) (5)
Parent 31 Dr. Reddy's Venezuela, C.A. (2�65) (4�677) 0�59 115 - - 0�46 115
Dr. Reddy's Laboratories Limited 96�27 169�837 112�03 21�864 10�02 541 89�92 22�405 32 Euro Bridge Consulting B.V. (1�47) (2�588) (14�22) (2�776) - - (11�14) (2�776)
33 Industrias Quimicas Falcon de Mexico, S.A. de CV 0�51 892 0�25 49 (0�43) (23) 0�10 26
Subsidiaries 34 Lacock Holdings Limited 0�26 467 (0�01) (2) - - (0�01) (2)
India 35 OOO Dr. Reddy's Laboratories Limited 1�51 2�672 0�92 179 - - 0�72 179
1 Aurigene Discovery Technologies Limited 3�41 6�017 6�41 1�251 72�94 3�939 20�83 5�190 36 OOO DRS LLC 0�03 49 (0�02) (4) - - (0�02) (4)
2 Cheminor Investments Limited - 1 - - - - - - 37 Promius Pharma LLC 0�02 43 0�18 36 - - 0�14 36
3 Dr. Reddy’s Bio-Sciences Limited 0�13 233 (0�14) (28) - - (0�11) (28) 38 Reddy Holding GmbH 13�57 23�932 10�93 2�133 - - 8�56 2�133
4 DRL Impex Limited - (2) - - - - - - 39 Reddy Netherlands B.V. 1�66 2�924 0�05 9 - - 0�04 9
5 Idea2Enterprises (India) Private Limited 0�87 1�536 - - - - - - 40 Reddy Pharma Iberia SA 0�14 247 0�44 86 - - 0�35 86
6 Imperial Credit Private Limited 0�01 25 0�01 1 - - 0�00 1 41 Reddy Pharma Italia S.R.L 0�18 322 (0�01) (1) - - - (1)
7 Svaas Wellness Limited 42 Reddy Pharma SAS 0�14 249 0�65 126 - - 0�51 126
- 5 (0�02) (3) - - (0�01) (3)
(formerly Regkinetics Services Limited)
8 Aurigene Pharmaceutical Services Limited (2�23) (3�941) 2�25 440 (0�09) (5) 1�75 435
9 Dr. Reddy’s Formulations Limited - - - - - - -
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data)

2.26 DESCRIPTION OF THE GROUP (CONTINUED)

2.27 EMPLOYEE BENEFITS (CONTINUED)

AS AT 31 MARCH 2021 FOR THE YEAR ENDED 31 MARCH 2021

Details of changes in the present value of defined benefit obligations are as follows:
SHARE IN PROFIT OR LOSS SHARE IN TOTAL COMPREHENSIVE INCOME (TCI)
NET ASSETS, i.e., TOTAL ASSETS MINUS TOTAL LIABILITIES SHARE IN OCI FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 20213
SL. NAME OF THE ENTITY PARTICULARS
NO. AS % OF AS % OF
AS % OF 2�349 2�200
AS % OF Defined benefit obligations at the beginning of the year
CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT CONSOLIDATED AMOUNT CONSOLIDATED
AMOUNT NET ASSETS PROFIT OR LOSS OCI Current service cost 281 276
TCI
Interest on defined obligations 140 152
Joint ventures
India
Re-measurements due to:
Actuarial loss/(gain) due to change in financial assumptions 153 (96)
1 DRES Energy Private Limited - - 0�10 19 - - 0�08 19
Actuarial loss/(gain) due to demographic assumptions (26) (48)
Foreign
Actuarial loss/(gain) due to experience changes 51 59
1 DRANU LLC - - - - - - - -
Benefits paid (345) (194)
2 Kunshan Rotam Reddy Pharmaceutical Company - - 2�36 461 - - 1�85 461
Limited Liabilities assumed/(transferred)* 25 -
Defined benefit obligations at the end of the year 2�628 2�349
Other consolidating entities * Liabilities assumed/transferred of ` 25 comprise of:
a. ` 70 increase in liability on account of acquisition of employees pursuant to the Business Transfer Agreement with Wockhardt limited. Refer note 2.40 of these consolidated financial
India statements for further details.
1 Cheminor Employees Welfare Trust 0�17 301 0�05 9 - - 0�04 9 b. ` 45 transfer of liability on account of restructuring of the pharmaceutical services business between the parent company and its subsidiary.

2 Dr. Reddy's Research Foundation - 5 - - - - - -

Details of
Subchanges
total in the fair value of plan assets are as follows:
151�60 267�501 134�71 26�289 87�27 4�713 124�42 31�002

FOR THE YEAR ENDED FO R THE YEAR ENDED

Less: Effect of intercompany adjustments � eliminations (51�60) (91�084) (34�71) (6�773) 12�73 687 (24�42) (6�086) PARTICULARS 31 MARCH 2021 31 MARCH 2020
Fair value of plan assets at the beginning of the year 2�160 2�174
Total 100�00 176�417 100�00 19�516 100�00 5�400 100�00 24�916
Employer contributions 25 14
Note: Net assets and share in profit or loss for the Parent Company, subsidiaries, joint ventures and other consolidating entities are as per the Interest on plan assets 132 156
standalone financial statements of the respective entities. Re-measurements due to:

2.27 EMPLOYEE BENEFITS Return on plan assets excluding interest on plan assets (1) 10
Benefits paid (345) (194)
Total employee benefit expenses, including share-based payments, incurred during the years ended 31 March 2021 and 31 March 2020
amounted to ` 36,299 and ` 33,802, respectively. Assets acquired / (transferred)* 26 -
Plan assets at the end of the year 1�997 2�160
Gratuity benefits provided by the parent company
* Assets acquired/transferred of ` 26 comprise of:
In accordance with applicable Indian laws, the Company has a defined benefit plan which provides for gratuity payments (the �Gratuity a. ` 70 increase in liability on account of acquisition of employees pursuant to the Business Transfer Agreement with Wockhardt limited. Refer note 2.40 of these consolidated financial
Plan�) and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at statements for further details.
b. ` 44 transfer of liability on account of restructuring of the pharmaceutical services business between the parent company and its subsidiary.
retirement or termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the
years of employment with the Company. Effective 1 September 1999, the Company established the Dr. Reddy’s Laboratories Gratuity Fund
(the �Gratuity Fund�) to fund the Gratuity Plan. Liabilities in respect of the Gratuity Plan are determined by an actuarial valuation, based Sensitivity Analysis:
upon which the Company makes contributions to the Gratuity Fund. Trustees administer the contributions made to the Gratuity Fund.
Amounts contributed to the Gratuity Fund are invested in bonds issued by the Government of India and in debt securities and equity AS AT 31 MARCH 2021
PARTICULARS
securities of Indian companies.
The components of gratuity cost recognised in the consolidated statement of profit and loss for the years ended 31 March 2021 and 31 March
2020 consist of the following: Defined benefit obligation without effect of projected salary growth 1�795
Add: Effect of salary growth 833
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS Defined benefit obligation with projected salary growth 2�628
Defined benefit obligation, using discount rate minus 50 basis points 2�700
Current service cost 281 276 Defined benefit obligation, using discount rate plus 50 basis points 2�559
Interest on defined benefit liability 8 (4) Defined benefit obligation, using salary growth rate plus 50 basis points 2�698
Gratuity cost recognised in consolidated statement of profit and 289 272 Defined benefit obligation, using salary growth rate minus 50 basis points 2�560
loss

Details of the employee benefits obligations and plan assets are provided
Summary of the actuarial assumptions: The actuarial assumptions used in accounting for the Gratuity plan are as follows:
below:
The assumptions used to determine benefit obligations:
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 M
PARTICULARS
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

Present value of funded obligations 2�628 2�349

Fair value of plan assets (1�997) (2�160) Discount rate 6�00� 6�65�
Net defined benefit liability 631 189 Rate of compensation increase 8�00� 7�50�
recognised
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.27 EMPLOYEE BENEFITS (CONTINUED)

2.27 EMPLOYEE BENEFITS (CONTINUED)

The assumptions used to determine gratuity cost: Details of changes in the present value of defined benefit obligations are as follows:

FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS

AS AT 31 MARCH 2021 AS AT 31 MARCH 2020

PARTICULARS

Discount rate 6.65% 7.45% Defined benefit obligations at the beginning of the year 234 223

8% per annum for Current service cost 13 11

Rate of compensation increase 7.50% the first year and Interest on defined obligations 21 25
9% per annum
thereafter Re-measurements due to:
Actuarial loss/(gain) due to change in financial assumptions 24 50
Contributions: The Company expects to contribute ` 317 to the Gratuity Plan during the year ending 31 March 2022.
Actuarial loss/(gain) due to experience changes 19 (8)
Disaggregation of plan assets: The Gratuity Plan’s weighted-average asset allocation as of 31 March 2021 and 31 March 2020, by asset (32) (41)
Benefits paid
category, was as follows:
Foreign exchanges differences 28 (26)
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 Defined benefit obligations at the end of the year 307 234
PARTICULARS

Funds managed by insurers

100% 99%
Others Details of changes in the fair value of plan assets are as
- 1% follows:

The expected future cash Nows in respect of gratuity as at 31 March 2021 were as AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS
follows: 128 70
PARTICULARS AMOUNT Fair value of plan assets at the beginning of the year
32 113
Employer contributions
Expected contributions 13 9
Interest on plan assets
During the year ended 31 March 2022 (estimated) 317
Re-measurements due to:
Expected future benefit payments 12 (7)
31 March 2022 452 Return on plan assets excluding interest on plan assets
31 March 2023 390 Benefits paid (32) (41)
31 March 2024 361 Foreign exchanges differences 16 (16)
31 March 2025 339 Plan assets at the end of the year 169 128
31 March 2026 308

Thereafter 1�971 Sensitivity Analysis:

AS AT
PARTICULARS 31 MARCH 2021
Pension plan of the Company’s subsidiary, Industrias Quimicas Falcon de Mexico
All employees of the Company’s Mexican subsidiary, Industrias Quimicas Falcon de Mexico (“Falcon”), are entitled to a pension benefit in the
form of a defined benefit pension plan. The Falcon pension plan provides for payment to vested employees at retirement or termination of Defined benefit obligation without effect of projected salary growth 209
employment. Liabilities in respect of the pension plan are determined by an actuarial valuation, based on which the Company makes Add: Effect of salary growth 98
contributions to the pension plan fund. This fund is administered by a third party, who is provided guidance by a technical committee formed
Defined benefit obligation with projected salary growth 307
by senior employees of Falcon.
Defined benefit obligation, using discount rate minus 50 basis points 321
The components of net pension cost recognised in the consolidated statement of profit and loss for the years ended 31 March 2021 and
31 March 2020 consist of the following: Defined benefit obligation, using discount rate plus 50 basis points 294
Defined benefit obligation, using salary growth rate plus 50 basis points 321
PARTICULARS FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
Defined benefit obligation, using salary growth rate minus 50 basis points 294
Current service cost below: 13 11
Interest on defined benefit liability 8 16
Total cost recognised in consolidated statement of profit and loss 21 27

Details of the employee benefits obligations and plan assets are provided

AS AT 31 MARCH 2021 AS AT 31 MARCH 2020

PARTICULARS
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
accounting for the Falcon follows:
Summary of the actuarial assumptions: The actuarial assumptions used in defined benefit plans are as
The assumptions used to determine benefit obligations:

Discount rate 7�75�

FOR THE YEAR ENDEDFOR THE YEAR ENDED 8�75�
31 MARCH 202131 M
PARTICULARS
Rate of compensation increase 4�50� 4�50�
Present value of funded obligations 307 234
Fair value of plan assets (169) (128)
Net defined benefit liability 138 106
recognised
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.27 EMPLOYEE BENEFITS (CONTINUED)

2.28 EMPLOYEE STOCK INCENTIVE PLANS
The assumptions used to determine defined benefit
cost� Dr. Reddy’s Employees Stock Option Plan, 2002 (the “DRL 2002 Plan”):
The Company instituted the DRL 2002 Plan for all eligible employees pursuant to the special resolution approved by the shareholders in the
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS
Annual General Meeting held on 24 September 2001. The DRL 2002 Plan covers all employees and directors (excluding promoter directors) of
the parent company and its subsidiaries (collectively, “eligible employees”). The Nomination, Governance and Compensation Committee of the
8.75% 11.25% Board of the parent company (the “Committee”) administers the DRL 2002 Plan and grants stock options to eligible employees. The
Discount rate
Committee determines which eligible employees will receive options, the number of options to be granted, the exercise price, the vesting period
Rate of compensation increase 4.50% 4.50% and the exercise period. The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2002
Plan vest in periods ranging between one and four years and generally have a maximum contractual term of five years.
Contributions: The Company expects to contribute ` 36 to Falcon defined benefit plans during the year ending 31 March 2022.
The DRL 2002 Plan, as amended at annual general meetings of shareholders held on 28 July 2004 and on 27 July 2005, provides for stock option
Disaggregation of plan assets: The Falcon pension plan’s weighted-average asset allocation as of 31 March 2021 and 31 March 2020, by asset grants in two categories:
category was as follows:
Category A: 300,000 stock options out of the total of 2,295,478 options reserved for grant having an exercise price equal to the fair market
value of the underlying equity shares on the date of grant; and
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS
Category B: 1,995,478 stock options out of the total of 2,295,478 options reserved for grant having an exercise price equal to the par value of
the

Funds managed by insurers underlying equity shares (i.e., ` 5 per option).

51% 51%
Others Under the DRL 2002 Plan, the exercise price of the fair market value options granted under Category A above is determined based on the
49% 49%
average closing price for 30 days prior to the grant in the stock exchange where there is highest trading volume during that period.
Notwithstanding the foregoing, the Committee may, after obtaining the approval of the shareholders in the annual general meeting, grant
options with a per share
The expected future cash Nows in respect of post-employment benefit plans in Mexico as at 31 March 2021 were as follows: exercise price other than fair market value and par value of the equity shares.
After the stock split effected in the form of a stock dividend issued by the Company in August 2006, the DRL 2002 Plan provides for stock
PARTICULARS AMOUNT
option grants in the above two categories as follows:
Expected contributions
NUMBER OF OPTIONS RESERVED
NUMBERUNDER
OF OPTIONS
CATEGORY
RESERVED
A UNDER CATEGORY B
During the year ended 31 March 2022 (estimated) 36 PARTICULARS TOTAL
Expected future benefit payments
Options reserved under original Plan 300�000 1�995�478 2�295�478
31 March 2022 Options exercised prior to stock dividend date (A) 94�061 147�793 241�854
6 Balance of shares that can be allotted on exercise of options (B) 205�939 1�847�685 2�053�624
31 March 2023 6 Options arising from stock dividend (C) 205�939 1�847�685 2�053�624
31 March 2024 Options reserved after stock dividend (A+B+C) 505�939 3�843�163 4�349�102
12
31 March 2025 The term of the DRL 2002 plan was extended for a period of 10 years effective as of 29 January 2012 by the shareholders at the Company�s
16
31 March 2026 Annual General Meeting held on 20 July 2012.
21
Thereafter Stock option activity under the DRL 2002 Plan for the two categories of options during the years ended 31 March 2021 and 31 March 2020 is as
608
follows:
Provident fund Category A — Fair Market Value Options: There was no stock activity under this category during the years ended 31 March 2021 and
benefits
Certain categories of employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee 31 March 2020 and there were no stock options outstanding under this category as of 31 March 2021 and 31 March 2020.
and employer each make monthly contributions to a government administered fund equal to 12% of the covered employee’s qualifying
Category B — Par Value Options: Stock options activity under this category during the years ended 31 March 2021 and 31 March 2020 was as
salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed ` 906 and `
set forth in the below table.
812 to the provident fund plan during the years ended 31 March 2021 and 31 March 2020, respectively.
Superannuation benefits FOR THE YEAR ENDED 31 MARCH 2021
Certain categories of employees of the Company participate in superannuation, a defined contribution plan administered by the Life Insurance PARTICULARS WEIGHTEDWEIGHTED
SHARES
RANGE
ARISING
AVERAGE
OF EXERCISE
OUT OF
AVERAGEREMAINING
OPTIONS
PRICES USEFUL EXERCISE PRICELIFE (MONTHS)
Corporation of India. The Company makes monthly contributions based on a specified percentage of each covered employee’s salary.
The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed ` 84 and ` 82 to the
Outstanding at the beginning of the 232�837 5�00 5�00 69
superannuation plan during the years ended 31 March 2021 and 31 March 2020, respectively. 92�092
year Granted during the year 5�00 5�00 93
Other contribution plans Expired/forfeited during the year (35�646) 5�00 5�00 -
In the United States, the Company sponsors a defined contribution 401(k) retirement savings plan for all eligible employees who meet minimum Exercised during the year (72�030) 5�00 5�00 -
age and service requirements. The Company contributed ` 139 and ` 177 to the 401(k) retirement savings plan during the years ended 31 Outstanding at the end of the 217�253 5�00 5�00 69
March 2021 and 31 March 2020, respectively. The Company has no further obligations under the plan beyond its monthly matching year Exercisable at the end of the 46�130 5�00 5�00 44
contributions. year
FOR THE YEAR ENDED 31 MARCH 2020
In the United Kingdom, certain social security benefits (such as pension, unemployment and disability) are funded by employers and employees
through mandatory National Insurance contributions. The contribution amounts are determined based upon the employee’s salary. The PARTICULARS WEIGHTEDWEIGHTED
SHARES
RANGE
ARISING
AVERAGE
OF EXERCISE
OUT OF
AVERAGEREMAINING
OPTIONS
PRICES USEFUL EXERCISE PRICELIFE (MONTHS)
Company has no further obligations under the plan beyond its monthly contributions. The Company contributed ` 143 and ` 135 to the National
Insurance during the years ended 31 March 2021 and 31 March 2020, respectively.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
Compensated absences
Outstanding at the beginning of the 270�141 5�00 5�00 73
The Company provides for accumulation of compensated absences by certain categories of its employees. These employees can carry forward a
year Granted during the year 49�796 5�00 5�00 90
portion of the unutilised compensated absences and utilise them in future periods or receive cash in lieu thereof as per the Company’s policy.
Expired/forfeited during the year (14�934) 5�00 5�00 -
The Company records a liability for compensated absences in the period in which the employee renders the services that increases this
Exercised during the year (72�166) 5�00 5�00 -
entitlement. The total liability recorded by the Company towards this obligation was ` 1,130 and ` 1,161 as at 31 March 2021 and 31 March Outstanding at the end of the year 232�837 5�00 5�00 69
2020, respectively. Exercisable at the end of the year 40�548 5�00 5�00 43
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.28 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED)

2.28 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED)
The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ` 3,677 and `
2,746 per option, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 and The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ` 1,255 and `
31 March 2020 was ` 4,565 and ` 2,681 per share, respectively. 993 per option, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 was `
4,506 per share.
The aggregate intrinsic value of options exercised during the years ended 31 March 2021 and 31 March 2020 was ` 328 and ` 193, respectively.
As of 31 March 2021, options outstanding had an aggregate intrinsic value of ` 980 and options exercisable had an aggregate intrinsic value of ` The aggregate intrinsic value of options exercised during the years ended 31 March 2021 was ` 28. As of 31 March 2021, options outstanding had
208. an aggregate intrinsic value of ` 466 and options exercisable had an aggregate intrinsic value of ` 120.

Dr. Reddy’s Employees ADR Stock Option Plan, 2007 (the “DRL 2007 Plan”) CATEGORY B — PAR VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2021
The Company instituted the DRL 2007 Plan for all eligible employees in pursuance of the special resolution approved by the shareholders in the
SHARESRANGE OF WEIGHTEDWEIGHTED AVERAGE AVERAGEREMAI
Annual General Meeting held on 27 July 2005. The DRL 2007 Plan became effective upon its approval by the Board of Directors on 22 January
PARTICULARSARISING OUTEXERCISE OF OPTIONSPRICES
2007. The DRL 2007 Plan covers all employees and directors (excluding promoter directors) of DRL and its subsidiaries (collectively, EXERCISE PRICE LIFE (MONTHS)
“eligible
employees”). The Committee administers the DRL 2007 Plan and grants stock options to eligible employees. The Committee determines which
Outstanding at the beginning of the 151�583 5�00 5�00 73
eligible employees will receive the options, the number of options to be granted, the exercise price, the vesting period and the exercise period.
The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2007 Plan vest in periods ranging year Granted during the year 52�316 5�00 5�00 89
between one and four years and generally have a maximum contractual term of five years. Expired/forfeited during the year (19�933) 5�00 5�00 -
Exercised during the year (41�967) 5�00 5�00 -
The DRL 2007 Plan provides for option grants in two categories:
Outstanding at the end of the year 141�999 5�00 5�00 71
Category A: 382,695 stock options out of the total of 1,530,779 stock options reserved for grant having an exercise price equal to the fair Exercisable at the end of the year 15�393 5�00 5�00 41
market value of the underlying equity shares on the date of grant; and
Category B: 1,148,084 stock options out of the total of 1,530,779 stock options reserved for grant having an exercise price equal to the par
CATEGORY B — PAR VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2020
value of the underlying equity shares (i.e., ` 5 per option).
SHARESRANGE OF WEIGHTEDWEIGHTED AVERAGE AVERAGEREMAI
Stock options activity under the DRL 2007 Plan for the above two categories of options during the years ended 31 March 2021 and 31 March
PARTICULARSARISING OUTEXERCISE OF OPTIONSPRICES
2020 was as follows: EXERCISE PRICE LIFE (MONTHS)
Outstanding at the beginning of the 115�155 5�00 5�00 73
CATEGORY A — FAIR MARKET VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2021
year Granted during the year 89�282 5�00 5�00 90
SHARESRANGE OF WEIGHTEDWEIGHTED AVERAGE AVERAGEREMAINING USEFUL Expired/forfeited during the year (18�886) 5�00 5�00 -
PARTICULARSARISING OUTEXERCISE OF OPTIONSPRICES Exercised during the year (33�968) 5�00 5�00 -
EXERCISE PRICE LIFE (MONTHS)
Outstanding at the beginning of the Outstanding at the end of the 151�583 5�00 5�00 73
202�760 1�982�00 to 2�353�62 72
year year Exercisable at the end of the 14�166 5�00 5�00 44
2�814�00
year
Granted during the year 96�080 3�679�00 3�679�00 90

Expired/forfeited during the year (13�348) 2�607�00/ 2�678�03 - The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ` 3,631 and `
2�814�00 2,747, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 and 31 March
Exercised during the year 2020 was
(15�152) 2�607�00/ 2�643�48 -
` 4,334 and ` 2,757, respectively.
2�814�00
Outstanding at the end of the 270�340 1�982�00 to 2�791�65 67 The aggregate intrinsic value of options exercised during the years ended 31 March 2021 and 31 March 2020 was ` 182 and ` 93, respectively.
3�679�00 As of 31 March 2021, options outstanding had an aggregate intrinsic value of ` 641 and options exercisable had an aggregate intrinsic value of
year Exercisable at the end of the 69�530 ` 69.
1�982�00 to 2�182�21 45
2�814�00 Dr. Reddy’s Employees Stock Option Scheme, 2018 (the “DRL 2018 Plan”)
year The Company instituted the DRL 2018 Plan for all eligible employees pursuant to the special resolution approved by the shareholders at the
Annual General Meeting held on 27 July 2018. The DRL 2018 Plan covers all employees and directors (excluding independent and promoter
CATEGORY A — FAIR MARKET VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2020 directors) of the parent company and its subsidiaries (collectively, “eligible employees”). Upon the exercise of options granted under the DRL
2018 Plan, the applicable equity shares may be issued directly by the Company to the eligible employee or may be transferred from the Dr.
SHARESRANGE OF WEIGHTED WEIGHTED AVERAGE AVERAGEREMAINING USEFUL
Reddy’s Employees ESOS Trust (the “ESOS Trust”) to the eligible employee. The ESOS Trust may acquire such equity shares through
PARTICULARSARISING OUTEXERCISE OF OPTIONSPRICES
EXERCISE PRICE LIFE (MONTHS) primary issuances by the Company and/or by way of secondary market acquisitions funded through loans from the Company. The
146�060 1�982�00/ 2�166�00 81 Nomination, Governance and Compensation Committee of the Board of the parent company (the “Compensation Committee”) administers the
DRL 2018 Plan and grants stock options to eligible employees, but may delegate functions and powers relating to the administration of the
2�607�00
Outstanding at the beginning of the DRL 2018 Plan to the ESOS Trust. The Compensation Committee determines which eligible employees will receive the options, the number of
61�700 2�814�00 2�814�00 90
year options to be granted, the exercise price, the vesting period and the exercise period. The vesting period is determined for all options issued on
(5�000) 2�607�00 2�607�00 - the date of grant. The options issued under the DRL 2018 Plan vest in periods ranging between the end of one and five years, and generally
- - - - have a maximum contractual term of five years.
Granted during the year
202�760 1�982�00 to 2�353�62 72
Expired/forfeited during the year The DRL 2018 Plan provides for option grants having an exercise price equal to the fair market value of the underlying equity shares on the date
2�814�00
Exercised during the year of
35�265 1�982�00� 2�150�81 51
Outstanding at the end of the
NUMBER OF SECURITIES TO BE ACQUIREDNUMBER
FROM SECONDARY
OF SECURITIES
MARKET
TO BE ISSUED BY THE COMPANY
year PARTICULARS TOTAL

Exercisable at the end of the year

Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
2�607�00 Options reserved against equity 2�500�000 1�500�000 4�000�000
shares - 1�000�000 1�000�000
Options reserved against ADRs 2�500�000 2�500�000 5�000�000
Total
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.28 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED)

2.28 EMPLOYEE STOCK INCENTIVE PLANS (CONTINUED)
As at 31 March 2021, the outstanding shares purchased from secondary market are 575,201 shares for an aggregate consideration of `
The weighted average inputs used in computing the fair value of options granted were as follows:
1,967. Stock option activity under the DRL 2018 Plan during the years ended 31 March 2021 and 31 March 2020 was as follows:
GRANTS MADE ON
FAIR MARKET VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2021
PARTICULARS 19 MAY 2020
SHARES RANGE OF WEIGHTED WEIGHTED AVERAGE Expected volatility 27 OCTOBER 2020
30�81� 29�12� 19 MAY 2020
30�47�
PARTICULARS ARISING OUT EXERCISE AVERAGE REMAINING USEFUL Exercise price `�5�00 ` 3�679�00 ` 5�00
OF OPTIONS PRICES EXERCISE PRICE LIFE (MONTHS)
Option life 2�5 Years 5�0 Years 2�5 Years
Outstanding at the beginning of the year 375,775 2,607.00/ 2,697.12 75
Risk-free interest rate 4�36� 5�67� 4�62�
2,814.00
Expected dividends 0�49� 0�68� 0�68�
Granted during the year 150,740 3,679.00 3,679.00 90 Grant date share price ` 5�099�00 ` 3�700�00 ` 3�700�00
Expired/forfeited during the year (55,335) 2,607.00 to 2,904.51 -
3,679.00
Exercised during the year (85,250) 2,607.00/ 2,671.71 - GRANTS MADE ON
2,814.00 PARTICULARS
385�930 2�607�00 to 3�056�51 71 26 JANUARY 2020 31 OCTOBER 2019 16 MAY 2019 16 MAY 2019
Outstanding at the end of the year
3�679�00 Expected volatility 27�00� 27�10� 28�25� 29�29�
Exercisable at the end of the year 71�225 2�607�00� 2�665�63 51 Exercise price ` 3�031�00 `�5�00 ` 2�814�00 ` 5�00
2�814�00 Option life 5�0 Years 2�5 Years 5�0 Years 2�5 Years
Risk-free interest rate 6�61� 5�72� 7�14� 6�76�
Expected dividends 0�66� 0�72� 0�71� 0�71�
FAIR MARKET VALUE OPTIONS FOR THE YEAR ENDED 31 MARCH 2020 Grant date share price ` 3�031�00 ` 2�783�20 ` 2�801�00 ` 2�801�00
SHARESRANGE OFWEIGHTED WEIGHTED AVERAGE
PARTICULARSARISING OUTEXERCISEAVERAGE REMAINING USEFUL OF OPTIONSPRICESEXERCISE PRICELIFE (MONTHS)
Share-based payment expense
Outstanding at the beginning of the 229,600 2,607.00 2,607.00 84
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 M
year Granted during the year 169,900 2,814.00/ 2,817.07 90 PARTICULARS
3,031.00 (1)

(22,575) 2,607.00 to 2,687.84 - Equity settled share-based payment expense 584 521
Expired/forfeited during the year
(2)
3,031.00 Cash settled share-based payment expense 157 94
Exercised during the year (1,150) 2,607.00 2,607.00 - 741 615
Outstanding at the end of the year 375�775 2�607�00� 2�697�12 75
(1) As of 31 March 2021 and 31 March 2020, there was ` 612 and ` 515, respectively, of total unrecognised compensation cost related to unvested stock options. This cost is expected to be recognised
2�814�00 over a weighted-average period of 1.95 years and 1.93 years, respectively.
Exercisable at the end of the year 53�100 2�607�00 2�607�00 53 (2) Certain of the Company’s employees are eligible for share-based payment awards that are settled in cash. These awards entitle the employees to a cash payment, on the exercise date,
subject to vesting upon satisfaction of certain service conditions which range from 1 to 4 years. The amount of cash payment is determined based on the price of the Company’s ADSs at
the time of vesting. As of 31 March 2021 and 31 March 2020, there was ` 126 and ` 97, respectively, of total unrecognised compensation cost related to unvested awards. This cost is expected to
be recognised over a
The weighted average grant date fair value of options granted during the years ended 31 March 2021 and 31 March 2020 was ` 1,255 and ` weighted-average period of 1.88 years and 1.93 years, respectively. This scheme does not involve dealing in or subscribing to or purchasing securities of the Company, directly or indirectly.

994 per option, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2021 and
31 March 2020 was ` 4,609 and ` 2,914 per share, respectively.
2.29 INCOME TAXES
The aggregate intrinsic value of options exercised during the years ended 31 March 2021 and 31 March 2020 was ` 165 and ` 0.35,
respectively. As of 31 March 2021, options outstanding had an aggregate intrinsic value of ` 563 and options exercisable had an aggregate a) Income tax expense/(benefit) recognised in the consolidated statement of profit and loss
intrinsic value of ` 104. Income tax expense recognised in the consolidated statement of profit and loss consists of the following:
Valuation of stock options:
The fair value of services received in return for stock options granted to employees is measured by reference to the fair value of stock options FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 M
PARTICULARS
granted. The fair value of stock options granted under the DRL 2002 Plan, the DRL 2007 Plan and the DRL 2018 Plan has been measured using
the Black–Scholes-Merton model at the date of the grant. Current taxes
The Black-Scholes-Merton model includes assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates.
In respect of par value options granted, the expected term of an option (or “option life”) is estimated based on the vesting term and contractual service period for each separately vesting portion of the award as if the award D F
term, as well as the expected exercise behavior of the employees receiving the option. In respect of fair market value options granted, the was, in-substance, multiple awards. o o
option life is estimated based on the simplified method. Expected volatility of the option is based on historical volatility, during a period
equivalent to the option life, of the observed market prices of the Company’s publicly traded equity shares. Dividend yield of the options is m r
based on recent dividend activity. e e
Risk-free interest rates are based on the government securities yield in effect at the time of the grant. These assumptions reNect management’s s i
best estimates, but these assumptions involve inherent market uncertainties based on market conditions generally outside of the
t g
Company’s control. As a result, if other assumptions had been used in the current period, stock-based compensation expense could have been
materially impacted. Further, if management uses different assumptions in future periods, stock-based compensation expense could be i n
materially impacted in future years. c
The estimated fair value of stock options is recognised in the consolidated statement of profit and loss on a straight-line basis over the requisite D
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
eferred taxes Domestic Foreign 5�849 5�15
7
2�323
1�45
Total income tax expense/(benefit� recognised in the consolidated statement of profit and loss 8�172
9
6�61
2�736 (1�589) 1�147 6
9�319
(6
�58
2)
(1�
437
)
(8�
019
�
(1�
403
�
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.29 INCOME TAXES (CONTINUED)

2.29 INCOME TAXES (CONTINUED)

b) Income tax expense/(benefit) recognised directly in equity During the year ended 31 March 2021, the Company recognised deferred tax assets on operating tax losses pertaining primarily to
Income tax expense/(benefit) recognised directly in equity consist of the following: Dr. Reddy’s Laboratories New York, Inc. as the Company believes that it is probable that there will be available taxable profits against which
such tax losses can be utilised.
FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 202131 MARCH 2020
PARTICULARS During the year ended 31 March 2021, the Company did not recognise deferred tax assets on operating tax losses and other deductible temporary
differences pertaining primarily to Dr. Reddy’s Laboratories SA, Switzerland and Dr. Reddy’s Research and Development B.V., Netherlands.
Tax effect on changes in fair value of investments 293 -
Tax effect on foreign currency translation differences Deferred income taxes are not provided on undistributed earnings of ` 22,099 and ` 23,615 as at 31 March 2021 and 31 March 2020,
- - respectively, of subsidiaries, where it is expected that earnings of the subsidiaries will not be distributed in the foreseeable future.
Tax effect on effective portion of change in fair value of cash Now hedges 319 (232) Generally, the Company indefinitely reinvests all of the accumulated undistributed earnings of subsidiaries, and accordingly, has not recorded
Tax effect on actuarial gains/losses on defined benefit obligations (73) 22 any deferred taxes in relation to such undistributed earnings of its subsidiaries.
Total income tax expense�(benefit) recognised in the equity (210) e) Deferred tax assets and liabilities
539
The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities and a description of the items that
c) Reconciliation of effective tax rate created these differences is given below:
The following is a reconciliation of the Company’s effective tax rates for the years ended 31 March 2021 and 31 March 2020: AS AT AS AT
PARTICULARS 31 MARCH 2021 31 MARCH 2020
FOR THE YEAR ENDED FOR THE YEAR ENDED
PARTICULARS 31 MARCH 2021 31 MARCH 2020 Deferred tax assets/(liabilities):

Profit before income taxes 28�835 18�857 Inventory 3�987 3�197

Enacted tax rate in India 34�94� 34�94� Minimum Alternate Tax* 4�749 6�247
Computed expected tax expense 10�075 6�589 Trade receivables 889 904
Effect of� Operating tax loss and interest loss carry-forward 2�745 3�399
Differences between Indian and foreign tax rates 372 3�375 Current liabilities and provisions 1�060 630
Unrecognised deferred tax assets/(recognition of 949 (6�496) Property, plant and equipment (2�723) (2�638)
previously unrecognised deferred tax assets), net Investments (130) 65
Expenses not deductible for tax purposes 230 182
Others (180) 375
Reversal of earlier years’ tax provisions - -
Income exempt from income taxes (1�807) (1�091) Net deferred tax assets 10�397 12�179
* As per Indian tax laws, companies are liable for a Minimum Alternate Tax (“MAT” tax) when current tax, as computed under the provisions of the Income Tax Act, 1961 (“Tax Act”), is
determined to

Foreign exchange differences (13) (47) be below the MAT tax computed under section 115JB of the Tax Act. If in any year the Company pays liability as per MAT, then it is entitled to claim credit of MAT paid over and above the
(1) normal tax liability in the subsequent years. The MAT credit is eligible to be carried forward and set�off in the future against the current tax liabilities over a period of 15 years starting from
Incremental deduction allowed for research and development costs - (1�241) the succeeding fiscal year in which such credit was generated.
Tax expense on distributed/undistributed earnings of subsidiary outside India - 254
Write off of accounts receivables - - In assessing whether the deferred income tax assets will be realised, management considers whether some portion or all of the deferred
Effect of change in tax laws and rate in jurisdictions outside India (313) (41) income tax assets will not be realised. The ultimate realisation of the deferred income tax assets and tax loss carry forwards is dependent
Income from sale of capital assets - (2�620) upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management
Others (174) (267) considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategy in making this
Income tax expense �(benefit) assessment. Based on the level of historical taxable income and projections of future taxable income over the periods in which the
9�319 (1�403)
deferred tax assets are deductible, management believes that the Company will realise the benefits of those recognised deductible
Effective tax rate 32�32� (7�44)�
differences and tax loss carry forwards. Recoverability of deferred tax assets is based on estimates of future taxable income. Any changes in
such future taxable income would impact the
(1) India’s Finance Act, 2016 incorporated an amendment that reduces the weighted deduction on eligible research and development expenditure in a phased manner from 200% to 150% recoverability of deferred tax assets.
commencing from 1 April 2017, and from 150% to 100% effective 1 April 2020�
Operating loss carry forward consists of business losses, unabsorbed depreciation and unabsorbed interest carry-forwards. A portion of this total
The Company’s effective tax rate for the year ended 31 March 2021 was higher as compared to the year ended 31 March 2020 primarily on loss can be carried indefinitely and the remaining amounts expire at various dates ranging from 2022 through 2037.
account of: f) Movement in deferred tax assets and liabilities during the years ended 31 March 2021 and 31 March 2020
• de-recognition of deferred tax asset during the year ended 31 March 2021 due to non-availability of depreciation on goodwill pursuant to an The details of movement in deferred tax assets and liabilities are summarised below:
amendment to section 2(11) of the Income Tax Act in the Finance Act, 2021;
• recognition of a deferred tax asset related to the Minimum Alternate Tax (“MAT”) credits and planned restructuring activity between RECOGNISED IN THE CONSOLIDATED STATEMENT OF PROFIT AND LOSS
AS AT 1 APRIL 2020 RECOGNISED IN EQUITY AS AT 31 MARCH 2021
companies of our group during the year ended 31 March 2020; PARTICULARS
• weighted deduction on eligible research and development expenditure in Dr. Reddy’s Laboratories Limited, India for the year ended
31 March 2020; and Deferred tax assets/(liabilities)
• income from sale of capital assets during the year ended 31 March 2020, which was set off against the carried forward capital loss.
Inventory P r l and
d) Unrecognised deferred tax assets and liabilities Minimum Alternate Tax r t a equi
The details of unrecognised deferred tax assets and liabilities are summarised below:
Trade receivables o y n pme
AS AT AS AT Operating tax loss and interest loss carry-forward p , t nt
PARTICULARS 31 MARCH 2021 31 MARCH 2020 e p Inve
Current liabilities and provisions
Deductible temporary differences, net 464 387
Operating tax loss carry-forward 4�742 3�926
5�206 4�313
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
stments 3�197 79 (555) 3�987
Others 6�247 0 (1�243) 4�749
Net deferred tax assets/(liabilities) 904 (1�498 889
3�399 ) 2�745
630 (2�638) (15) (246) 1�060
65 (654) (2�723)
375 676 (293) (130)
12�179 (85) (180)
98 (539) 10�397
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.30 FINANCIAL INSTRUMENTS (CONTINUED)
2.29 INCOME TAXES (CONTINUED)

RECOGNISED IN Fair value hierarchy

AS AT THE CONSOLIDATED RECOGNISED AS AT Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
PARTICULARS 1 APRIL 2019 STATEMENT OF IN EQUITY 31 MARCH 2020
PROFIT AND LOSS Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or
Deferred tax assets/(liabilities) indirectly (i.e., derived from prices).
Inventory 3�302 (105) - 3�197 Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Minimum Alternate Tax 1�630 4�617 - 6�247
The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March
Trade receivables 801 103 - 904
Operating tax loss and interest loss carry-forward 298 3�101 - 3�399 2021:
Current liabilities and provisions 701 (281) 210 630
PARTICULARS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Property, plant and equipment (2�950) 312 - (2�638)
FVTPL - Financial asset - Investments in units of mutual funds 13�263 - - 13�263
Investments 197 (132) - 65
FVTPL - Financial asset - Investment in limited liability partnership firm - - 400 400
Others (135) 510 - 375
FVTPL - Financial asset - Investment in equity securities - - 1 1
Net deferred tax assets/(liabilities) 3�844 8�125 210 12�179
FVTOCI - Financial asset - Investment in equity securities 4�532 - - 4�532
The amounts recognised in the consolidated statement of profit and loss for the years ended 31 March 2021 and 31 March 2020 include ` (96) Derivative financial instruments � net gain/(loss) on outstanding foreign exchange - 892 - 892
(1)
and forward, option and swap contracts and interest rate swap contracts
` 106 respectively, which represent exchange differences arising due to foreign currency translations. FVTPL - Contingent consideration pursuant to the Business Transfer Agreement - - 420 420
with Wockhardt Limited (Refer note 2.40 for details)
g) Uncertain tax positions
The Company is contesting various disallowances by the Indian Income Tax authorities. The associated tax impact for disallowances being
more likely than not to be accepted by Tax authorities is ` 2,291, and accordingly, no provision is made in these financial statements as of The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2020:
31 March 2021.
PARTICULARS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
During the years ended 31 March 2014, 2015 and 2016, Industrias Quimicas Falcon de Mexico, S.A. de CV, a wholly-owned subsidiary of the
Company in Mexico, received a notice from Mexico's Tax Administration Service, Servicio de Administracion Tributaria (“SAT”), with FVTPL - Financial asset - Investments in units of mutual funds 13�832 - - 13�832
respect to disallowance on account of transfer pricing adjustments pertaining to the calendar years ended 31 December 2006, 31 FVTPL - Financial asset - Investment in equity securities - - 1 1
December 2007 and 31 December 2008. The associated tax impact is ` 801 (MXN 224 million) and profit share impact is ` 89 (MXN 25 FVTOCI - Financial asset - Investment in equity securities 303 - - 303
million). The Company filed administrative appeals with the SAT by challenging these disallowances and, during February and March 2017, FVTOCI - Financial asset - Investment in market linked 1�993 - - 1�993
the Company received orders of the SAT confirming these disallowances by dismissing its administrative appeals. The Company disagrees debentures - (497) - (497)
with the SAT's disallowances and filed an appeal with the Tribunal Federal de Justicia Administrativa (Federal Tax and Administrative Court
Derivative financial instruments � net gain/(loss) on outstanding foreign
of Mexico) in March and April 2017. The Company believes that it is more likely than not that it would prevail over the SAT in this litigation. (1)
exchange forward, option and swap contracts and interest rate swap contracts
Accordingly, no provision has been made
(1) The Company enters into derivative financial instruments with various counterparties, principally financial institutions and banks. Derivatives valued using valuation techniques with market
in these consolidated financial statements as of 31 March
observable inputs are mainly interest rate swaps, foreign exchange forward option and swap contracts. The most frequently applied valuation techniques include forward pricing, swap
2021. models and Black-Scholes-Merton models (for option valuation), using present value calculations. The models incorporate various inputs including foreign exchange forward rates, interest
rate curves and forward rate curves.
2.30 FINANCIAL INSTRUMENTS
As at 31 March 2021 and 31 March 2020, the changes in counterparty credit risk had no material effect on the hedge effectiveness assessment
Financial instruments by category for derivatives designated in hedge relationships and other financial instruments recognised at fair value.
The carrying value and fair value of financial instruments as at 31 March 2021 and 31 March 2020 were as follows
Derivative financial instruments
AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 The Company had a derivative financial asset and derivative financial liability of ` 1,218 and ` 326, respectively, as of 31 March 2021 as
PARTICULARS TOTAL FAIR VALUE/ TOTAL FAIR VALUE/ compared to derivative financial asset and derivative financial liability of ` 1,105 and ` 1,602, respectively, as of 31 March 2020 towards these
TOTAL CARRYING VALUE TOTAL CARRYING VALUE derivative financial instruments.
AMORTISED COST AMORTISED COST
Financial assets Details of gain/(loss) recognised in respect of derivative contracts
Cash and cash equivalents 14�829 14�829 2�053 2�053 The following table presents details in respect of the gain/(loss) recognised in respect of derivative contracts during the applicable year ended :

Investments
(1)
24�702 24�702 24�015 24�015 FOR THE YEAR ENDEDFOR THE YEAR ENDED 31 MARCH 20213
PARTICULARS
Trade receivables 49�759 49�759 52�015 52�015
Net gain/ (loss)instruments
Derivative recognised as a part of consolidated statement of profit and loss in respect
1�218 1�218of foreign exchange derivative
1�105 contracts and 1�105
cross currency interest rate swaps contracts

assets in equity in respect of hedges of highly2�626 2�626 net of amounts reclassified

4�170 2�619 155
Other financial
Net gain/(loss) recognised probable forecast transactions, from equity4�170
and recognised as component of revenue
Total 93�134 93�134 83�358 83�358
Net gain/(loss) reclassified from equity and recognised as component
Financial liabilities of revenue occurrence of forecasted transaction
Trade payables 18�109 18�109 15�248 15�248 1�123 (951)
Long-term borrowings 6�299 6�299 1�304 1�304
Short-term borrowings 23�145 23�145 16�532 16�532
340 (50)
Derivative instruments 326 326 1�602 1�602 (1) Interest accrued but not due on investments is included in other financial assets�

Other financial liabilities 24�281 24�281 27�006 27�006

Total 72�160 72�160 61�692 61�692
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

The net carrying amount of the Company’s “hedging reserve” as

a component of equity before adjusting for tax impact was a
gain of ` 401 as at 31 March 2021, as compared to a loss of `
722 as at 31 March 2020.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)

2.30 FINANCIAL INSTRUMENTS (CONTINUED)

2.30 FINANCIAL INSTRUMENTS (CONTINUED)
Outstanding foreign exchange derivative contracts
The following table gives details in respect of the notional amount of outstanding foreign exchange derivative contracts as of 31 March The table below summarises the periods when the cash Nows associated with highly probable forecast transactions that are classified as cash
2021: Now hedges are expected to occur:

CATEGORY
(1) (1) AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
INSTRUMENT CURRENCY CROSS CURRENCY AMOUNTS IN MILLIONS BUY/SELL PARTICULARS
Forward contract AUD INR AUD 7 Sell
Forward contract CHF INR CHF 200 Sell Cash Nows in United States dollars
Forward contract GBP INR GBP 8 Sell Not later than one month 3�656 2�648
Forward contract RUB INR RUB 2,799 Sell Later than one month and not later than three months 7�311 5�297
Forward contract US$ INR US$ 353 Sell
Later than three months and not later than six months 12�063 7�945
Forward contract US$ MXN US$ 10 Buy
Later than six months and not later than one year 24�126 4�540
Forward contract US$ UAH US$ 14 Buy
Forward contract ZAR INR ZAR 111 Sell 47�156 20�430
Hedges of recognised Forward contract US$ RUB US$ 2 Buy Cash Nows in Russian roubles
assets and liabilities Forward contract US$ RON US$ 12 Buy Not later than one month 437 -
Forward contract US$ AUD US$ 3 Buy Later than one month and not later than three months 874 -
Forward contract GBP US$ GBP 48 Buy 1�748 -
Forward contract EUR GBP EUR 1 Sell Later than three months and not later than six months
Forward contract EUR US$ EUR 16 Buy Later than six months and not later than one year 3�593 -
Forward contract CHF US$ CHF 200 Buy 6�651 -
Forward contract US$ KZT US$ 4 Buy Cash Flows in Australian Dollars
Forward contract US$ CLP US$ 3 Buy Not later than one month 46 -
Forward contract US$ COP US$ 4 Buy
Later than one month and not later than three months 92 -
Forward contract US$ BRL US$ 4 Buy
Later than three months and not later than six months 139 -
Forward contract US$ KZT US$ 9 Buy
Forward contract AUD INR AUD 10 Sell Later than six months and not later than one year 277 -
Hedges of highly
probable forecast Forward contract RUB INR RUB 6,850 Sell 555 -
transactions US$ INR US$ 645 Sell - Risk Reversal Cash Nows in South African Rands
OptionForward
contractcontract ZAR INR ZAR 148 Sell Not later than one month 61 -
The following table gives details in respect of the notional amount of outstanding foreign exchange derivative contracts as of 31 March Later than one month and not later than three months 121 -
2020.
(1) (1) Later than three months and not later than six months 182 -
CATEGORY INSTRUMENT CURRENCY CROSS CURRENCY AMOUNTS IN MILLIONS BUY/SELL
Later than six months and not later than one year 364
-
Forward contract US$ INR US$ 148 Sell
728 -
Forward contract RUB INR RUB 5,968 Sell
Forward contract GBP INR GBP 9 Sell
Hedges of changes in the interest rates Consistent with its risk management policy, the Company uses interest rate swaps (including cross currency interest rate swaps) to mitigate the risk of changes in interest rates.
Sell
The Company does not use themForward contract
for trading AUD
or speculative purposes. INR AUD 4
Forward contract CHF INR CHF 200 Sell
A net gain/loss of ` Nil, representing
Forward thecontract
changes in the fair ZAR
value of interest rate swaps
INR used as hedging instrument
ZAR 71 in a cash Now
Sell hedge is recognised in the statement of other comprehensive income. For balance interest rate swaps, the changes in fair value (including cross currency interest rate swaps)
are recognised as part of the foreign exchange
Forward gains and lossesCHF
contract and finance costs. Accordingly
US$ the Company hasCHF
recorded,
200 as part of consolidated
Buy statement of profit and loss, a net gain of ` 164 and a net gain of ` 33 for the year ended 31 March 2021 and 31 March 2020 respectively.
Forward contract EUR GBP EUR 3 Sell The Company had outstanding cross currency swap against INR Borrowing of ` 7,240 as at 31 March 2021 and ` Nil as on 31st March 2020. The
Forward contract Buy
Hedges of recognised EUR US$ EUR 6 swap hedges the principal repayment of underlying INR liability and transforms it into USD Principal repayment liability.
assets and liabilities Forward contract GBP US$ GBP 38 Buy
Forward contract US$ AUD US$ 5 Buy
Forward contract US$ BRL US$ 6 Buy 2.31 FINANCIAL RISK MANAGEMENT
Forward contract US$ CLP US$ 4 Buy
Forward contract US$ COP US$ 4 Buy The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk
management focus is to minimise potential adverse effects of market risk on its financial performance. The Company’s risk management
Forward contract US$ KZT US$ 11 Buy
assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and
Forward contract US$ MXN US$ 2 Buy
controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are
Forward contract US$ RON US$ 7 Buy
reviewed regularly to reNect changes in market conditions and the Company’s activities. The Board of Directors and the Audit Committee is
Forward contract US$ RUB US$ 6 Buy
responsible for overseeing the Company’s risk assessment and management policies and processes.
Forward contract US$ UAH US$ 19 Buy
transactions Option contract US$ INR US$ 140 Sell
Hedges of highly
(1) “INR” means Indian Rupees, “US$” means United States dollars, “RON” means Romanian new leus, “GBP” means U.K. pounds sterling, “AUD” means Australian dollars, “CHF” means Swiss
probable forecast Option
francs, “ZAR” means South African rands, “EUR”contract
means Euros, “BRL” meansUS$ INR pesos, “COP” means Colombian
Brazilian reals, “CLP” means Chilean US$pesos, Sell tenges,
270 “KZT” means Kazakhstan
“MXN” means Mexican pesos, “UAH” means Ukrainian hryvnias and “RUB” means Russian roubles.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS (All amounts in Indian Rupees millions, except share data and per share data)

(All amounts in Indian Rupees millions, except share data and per share data) 2.31 FINANCIAL RISK MANAGEMENT (CONTINUED)

2.31 FINANCIAL RISK MANAGEMENT (CONTINUED)

For the years ended 31 March 2021 and 31 March 2020, every 10% depreciation/appreciation in the exchange rate between the Indian rupee and
the respective currencies for the above mentioned financial assets/liabilities would affect the Company�s net profit by ` 2,595 and ` 1,710,
a. Market risk
respectively.
Market risk is the risk of loss of future earnings, fair values or future cash Nows that may result from adverse changes in market rates and
prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a Interest rate risk
result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign As of 31 March 2021, the Company had loans with Noating interest rates as follows: ` 8,800 of loans carrying a Noating interest rate of 3
currency receivables and payables and all short-term and long-term debt. The Company is exposed to market risk primarily related to foreign Months India Treasury Bill plus 30 bps and ` 1,896 of loans carrying a Noating interest rate of TIIE�1.20%.
exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a function of
As of 31 March 2020, the Company had loans with Noating interest rates as follows: ` 10,971 of loans carrying a Noating interest rate ranging
investing and borrowing activities and revenue generating and operating activities in foreign currencies.
from 1 Month LIBOR plus 12.5 bps to 1 Month LIBOR plus 82.7 bps; ` 4,000 of loans carrying a Noating interest rate of 1 Month India Treasury
Foreign exchange risk Bill plus 60 bps; ` 1,627 of loans carrying a Noating interest rate of 3 Month LIBOR plus 55 bps; ` 1,579 of loans carrying a Noating interest rate
The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (U.K. pounds sterling, Russian of TIIE�1.25%, and ` 63 of loans carrying a Noating interest rate of 1 Month JIBAR plus 120 bps.
roubles, Brazilian reals, Swiss francs, South African rands, Kazakhstan tenges, Romanian new leus, Austrailian dollars and Euros) and
For details of the Company’s short-term and long-term loans and borrowings, including interest rate profiles, refer note 2.10 A and B of these
foreign currency borrowings (in United States dollars, Russian roubles, South African rands, Mexican pesos, Ukrainian hryvnias and
consolidated financial statements.
Brazilian reals). A significant portion of the Company’s revenues are in these foreign currencies, while a significant portion of its costs are
in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Company’s revenues For the years ended 31 March 2021 and 31 March 2020, every 10% increase or decrease in the Noating interest rate component (i.e., LIBOR,
measured in Indian rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially JIBAR, Treasury Bill and TIIE) applicable to its loans and borrowings would affect the Company’s net profit by ` 37 and ` 41.
in recent periods and may continue to Nuctuate substantially in the future. Consequently, the Company uses both derivative and non-derivative
The carrying value of the Company’s borrowings, interest component of which was designated in a cash Now hedge, was ` Nil as of 31 March
financial instruments, such as foreign exchange forward contracts, option contracts, currency swap contracts and foreign currency financial
2021 and as on 31 March 2020.
liabilities, to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecast transactions and
recognised assets and liabilities. The Company’s investments in term deposits (i.e., certificates of deposit) with banks and short-term liquid mutual funds are for short durations,
and therefore do not expose the Company to significant interest rates risk.
The details in respect of the outstanding foreign exchange forward and option contracts are given in note 2.30 to these consolidated financial
statements. Commodity rate risk
Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active
In respect of the Company’s forward and option contracts, a 10% decrease/increase in the respective exchange rates of each of the currencies
pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products,
underlying such contracts would have resulted in:
whose prices may Nuctuate significantly over short periods of time. The prices of the Company’s raw materials generally Nuctuate in line with
• A ` 4,824/(4,195) increase/(decrease) in the Company’s hedging reserve and a ` 2,658/(2,658) increase/(decrease) in the Company’s profit
commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more
from such contracts, as at 31 March 2021;
volatile. Cost of raw materials forms the largest portion of the Company’s operating expenses. Commodity price risk exposure is evaluated
• A ` 1,203/(1,740) increase/(decrease) in the Company’s hedging reserve and a ` 2,070/(1,745) increase/(decrease) in the Company’s profit
and managed through operating procedures and sourcing policies. As of 31 March 2021, the Company had not entered into any material
from such contracts, as at 31 March 2020.
derivative contracts to hedge exposure to Nuctuations in commodity prices.
The following table analyses foreign currency risk from non-derivative financial instruments as at 31 March 2021:
b. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
PARTICULARS UNITED STATES DOLLARS EUROS RUSSIAN ROUBLES OTHERS
(1)
TOTAL
obligations, and arises principally from the Company’s receivables from customers and investment securities. The Company establishes
Assets an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables
Cash and cash equivalents 12�643 129 30 92 12�894 and investments.
Investments 24 - - - 24
Trade and other receivables
Trade receivables 30�247 841 721 101 31�910
The Company’s exposure to credit risk is inNuenced mainly by the individual characteristics of each customer. The demographics of the
Other financial assets 184 20 3 16 223
customer, including the default risk of the industry and country in which the customer operates, also has an inNuence on credit risk assessment.
Total 43�098 990 754 209 45�051
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers
Liabilities to which the Company grants credit terms in the normal course of business.
Trade payables 3�694 1�092 - 151 4�937
Long-term borrowings 1�703 78 15 3 1�799 Investments
Short-term borrowings 3�657 - 3�717 - 7�374 The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit
Other financial liabilities 4�301 217 85 391 4�994 rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant
Total 13�355 1�387 3�817 545 19�104 concentration of exposures to specific industry sectors or specific country risks.
(1) Others primarily consists of U.K. pounds sterling, Swiss francs, Romanian new leus Chinese Yuans (Renminbi), Canadian Dollars and Ukrainian hryvnia. Details of financial assets � not due� past due and impaired
None of the Company’s cash equivalents, including term deposits (i.e., certificates of deposit) with banks, were past due or impaired as
The following table analyses foreign currency risk from non-derivative financial instruments as at 31 March 2020: at 31 March 2021. The Company’s credit period for trade receivables payable by its customers generally ranges from 20 - 180 days.

(1) The ageing of trade receivables is given below:

PARTICULARS UNITED STATES DOLLARS EUROS RUSSIAN ROUBLES OTHERS TOTAL
Assets AS AT 31 MARCH 2021 AS AT 31 MARCH 2020
PARTICULARS
Cash and cash equivalents 365 43 4 135 547
Investments 24 - - - 24
Trade receivables 31�931 705 989 317 33�942 Neither past due nor impaired 41�350 45�864
Other financial assets 921 15 3 153 1�092 Past due but not impaired
Total 33�241 763 996 605 35�605 Less than 365 days 8�598 6�305
Liabilities More than 365 days 1�107 1�048
Trade payables 1579 379 - 37 1�995 51�055 53�217
Long-term borrowings 469 - 1 40 510 Less : Allowance for credit losses (1�296) (1�202)
Short-term borrowings 7�316 - - - 7�316 Total 49�759 52�015
Other financial liabilities 7�950 208 56 470 8�684
Total 17�314 587 57 547 18�505
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
(1) Others primarily consists of U.K. pounds sterling, Swiss francs, Romanian new leus, Chinese Yuans (Renminbi), Canadian Dollars and Ukrainian hryvnia.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

8 mg/2 mg, and 12 mg/3 mg dosages, a therapeutic equivalent generic version of Suboxone sublingual film. The U.S. FDA approval came after
the conclusion of litigation in the U.S. District Court for the District of Delaware (the “Delaware District Court”), where the Delaware
®
District Court held that patents covering Suboxone sublingual film would not be infringed by the Company’s commercial launch of its
STATEMENTS generic sublingual film product. In light of the favourable decision from the Delaware District Court, the Company launched its generic
sublingual film product in the United States immediately following the U.S. FDA approval on 14 June 2018. On July 12, 2019, the U.S. Court of
(All amounts in Indian Rupees millions, except share data and per share data)
Appeals for the Federal Circuit (“the Court of Appeals”) affirmed the Delaware District Court’s ruling that the Company’s generic version of
®
2.31 FINANCIAL RISK MANAGEMENT (CONTINUED) Suboxone sublingual films did not infringe the two remaining patents at issue in the Delaware District Court’s case (U.S. patent numbers
8,603,514 and 8,015,150).
See Note 2.6 B of these consolidated financial statements for the activity in the allowance for credit losses.
Other than trade receivables, the Company has no significant class of financial assets that is past due but not
impaired.
c. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its
liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
As of 31 March 2021 and 31 March 2020, the Company had uncommitted lines of credit from banks of ` 38,766 and ` 39,374 respectively.
As of 31 March 2021, the Company had working capital of ` 64,314 (excluding assets held for sale of `151), including cash and cash
equivalents of
` 14,829, investments in term deposits with banks, bonds and commercial paper of `6,481, and investments in mutual funds of ` 13,263.
As of 31 March 2020, the Company had working capital of ` 53,850, including cash and cash equivalents of ` 2,053, investments in term
deposits with banks, bonds and commercial paper of ` 7,862, investments in marked linked debentures of ` 1,993 and investments in mutual
funds of
` 13,832.
The table below provides details regarding the contractual maturities of significant financial liabilities (other than long-term borrowings
and obligations under leases, which have been disclosed in note 2.10 A to these consolidated financial statements) as at 31 March 2021:

PARTICULARS 2022 2023 2024 2025 THEREAFTER TOTAL

Trade payables 18�109 - - - - 18�109
Short-term borrowings 23�145 - - - - 23�145
Derivative instruments 326 - - - - 326
Other financial liabilities 24�281 - - - - 24�281

The table below provides details regarding the contractual maturities of significant financial liabilities (other than long-term borrowings
and obligations under finance leases, which have been disclosed in note 2.10 A to these consolidated financial statements) as at 31 March
2020:

PARTICULARS 2021 2022 2023 2024 THEREAFTER TOTAL

Trade payables 15�248 - - - - 15�248
Short-term borrowings 16�532 - - - - 16�532
Derivative instruments 1�602 - - - - 1�602
Other financial liabilities 27�006 - - - - 27�006

2.32 CONTINGENT LIABILITIES AND COMMITMENTS

A. CONTINGENT LIABILITIES (CLAIMS AGAINST THE COMPANY NOT ACKNOWLEDGED AS DEBTS)

The Company is involved in disputes, lawsuits, claims, governmental and/or regulatory inspections, inquiries, investigations and proceedings,
including patent and commercial matters that arise from time to time in the ordinary course of business. The more significant matters
are discussed below. Most of the claims involve complex issues. Often, these issues are subject to uncertainties and therefore the probability of
a loss, if any, being sustained and an estimate of the amount of any loss is difficult to ascertain. Consequently, for a majority of these claims, it
is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings.
This is due to a number of factors, including: the stage of the proceedings (in many cases trial dates have not been set) and the overall length
and extent of pre-trial discovery; the entitlement of the parties to an action to appeal a decision; clarity as to theories of liability; damages and
governing law; uncertainties in timing of litigation; and the possible need for further legal proceedings to establish the appropriate amount of
damages, if any. In these cases, the Company based on internal and external legal advice discloses information with respect to the nature and
facts of the case.
The Company also believes that disclosure of the amount sought by plaintiffs, if that is known, would not be meaningful with respect to those
legal proceedings.
Although there can be no assurance regarding the outcome of any of the legal proceedings or investigations referred to in this Note, the
Company does not expect them to have a materially adverse effect on its financial position, as it believes that the likelihood of loss in excess of
amounts accrued (if any) is not probable. However, if one or more of such proceedings were to result in judgements against the Company,
such judgements could be material to its results of operations in a given period.
(i) Product and patent related matters
Launch of product
On 14 June 2018, the U.S. FDA granted the Company final approval for buprenorphine and naloxone sublingual film, 2 mg/0.5 mg, 4 mg/1 mg,
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

After the Delaware District Court’s decision, Indivior filed a second lawsuit against the Company alleging infringement of three additional U.S.
patents (numbers 9,687,454, 9,855,221 and 9,931,305) in the U.S. District Court for the District of New Jersey (the “New Jersey District
Court”), styled Indivior Inc. et al. v. Dr. Reddy’s Laboratories S.A., Civil Action No. 2:17-cv-07111 (D.N.J.). Following the launch, on 15 June
2018, Indivior filed an emergency application for a temporary restraining order and preliminary injunction against the Company in the
New Jersey District Court. Indivior’s motion alleged that the Company’s generic sublingual film product infringed one of three U.S. patents
(number 9,931,305) at issue in the New Jersey District Court. Pending a hearing and decision on the injunction application, the New
Jersey District Court initially issued a temporary restraining order against the Company with respect to further sales, offer for sales, and
imports of its generic sublingual film product in the United States. Subsequently, on 14 July 2018, the New Jersey District Court granted a
preliminary injunction in favour of Indivior. Under the order, Indivior was required to and did post a bond of US$72 to pay the costs and
damages sustained by the Company if it was found to be wrongfully enjoined. The Company immediately appealed the decision, and the
Court of Appeals agreed to expedite the appeal.
On 20 November 2018, the Court of Appeals issued a decision vacating the preliminary injunction. The Court of Appeals denied Indivior’s
petition for rehearing on 4 February 2019.
Indivior subsequently filed two emergency motions in the Court of Appeals to stay issuance of the mandate and to keep the preliminary
injunction in place, which the Court of Appeals denied. Indivior then petitioned the U.S. Supreme Court to stay issuance of the mandate.
Indivior’s petition was denied by the Chief Justice of the U.S. Supreme Court on 19 February 2019, and the mandate was issued on the same
day. The Company resumed sales of its generic sublingual film product after the mandate was issued.
On 19 February 2019, the New Jersey District Court entered a stipulated order of dismissal of Indivior’s claims under U.S. patent number
9,855,221. On 5 November 2019, the New Jersey District Court issued its claim construction decision construing certain terms in U.S.
patent numbers 9,931,305 and 9,687,454. After such claim construction decision, on 8 January 2020, the New Jersey District Court entered a
stipulated order that the Company’s generic sublingual film product does not infringe the asserted claims in U.S. patent number 9,931,305. In
the stipulated order, Indivior reserved the ability to appeal the New Jersey District Court’s claim construction order. The Company filed a
motion requesting that the New Jersey District Court enter partial final judgement in the Company’s favour relating to the allegations of
infringement of U.S. patent number 9,931,305, which the District Court denied without prejudice on 24 August 2020, pending resolution of
Indivior’s allegations relating to U.S. patent number 9,687,454.
On 11 November 2019, a Magistrate Judge in the District of New Jersey granted the Company leave to file a counterclaim against Indivior that
alleges that Indivior engaged in anticompetitive conduct by making false or misleading statements to the New Jersey District Court during the
preliminary injunction proceedings in violation of federal antitrust laws. Indivior appealed the Magistrate Judge’s ruling to the District
Court Judge and, on 24 August 2020, the District Court Judge denied Indivior’s appeal. The District Court did grant Indivior’s motion to
bifurcate the patent claims and the antitrust claims into two separate trials. Fact discovery closed on 29 January 2021. No trial date has been
set and expert discovery on both the patent and antitrust claims is ongoing. Opening expert reports were submitted on 24 March 2021. Expert
discovery is scheduled to close on or around 01 September 2021.
In addition to the District Court proceeding, on 13 November 2018, the Company filed two petitions for inter-partes review challenging the
validity of certain claims of U.S. patent number 9,687,454 before the Patent Trial and Appeal Board (“PTAB”). On 13 June 2019, the PTAB
agreed to institute inter-partes review on one of the two petitions filed by the Company. The PTAB heard oral argument in the pending inter-
partes review challenge on 3 March 2020.
On 2 June 2020, the PTAB issued a final written decision in the Company’s favour finding that the Company had demonstrated that claims 1–5,
7, and 9–14 of U.S. patent number 9,687,454 were unpatentable. The PTAB upheld the validity of only one of the challenged claims,
claim 8. Additionally, claim 6 was not at issue in the inter-partes review and therefore not subject to the final written decision. Claims 6
and 8 remain asserted against the Company in the New Jersey District Court litigation. Indivior filed a timely notice of appeal of the
PTAB’s Final Written Decision (“ FWD”) for claims 1-5, 7, and 9-14, and the Company cross appealed the PTAB’s FWD on claim 8. In the
PTAB appeal, Indivior submitted its principal appeal brief on 9 December 2020. Indivior did not challenge the Board’s decision on claims 5 and
12 in its appeal brief. The Company submitted its opening and response brief on 18 February 2021 and Indivior submitted its response and
reply brief on 30 March 2021. The Company's reply brief was submitted on 20 April 2021. The court of appeals has not yet scheduled oral
arguments in the appeal.
The Company intends to vigorously defend its positions and pursue a claim for damages caused by the preliminary injunction. Any liability that
may arise on account of this litigation is unascertainable. Accordingly, no provision was made in these consolidated financial statements of the
Company.
Matters relating to National Pharmaceutical Pricing Authority
NorNoxacin, India litigation
The Company manufactures and distributes NorNoxacin, a formulations product, and in limited quantities, the active pharmaceutical
ingredient norNoxacin. Under the Drugs (Prices Control) Order (the “DPCO”), the National Pharmaceutical Pricing Authority (the “NPPA”)
established by the Government of India had the authority to designate a pharmaceutical product as a “specified product” and fix the maximum
selling price for such product. In 1995, the NPPA issued a notification and designated NorNoxacin as a “specified product” and fixed the
maximum selling price. In 1996, the Company filed a statutory Form III before the NPPA for the upward revision of the maximum selling price
and a writ petition in the Andhra Pradesh High Court (the “High Court”) challenging the validity of the designation on the grounds that the
applicable rules of the DPCO were not complied with while fixing the maximum selling price. The High Court had previously granted an interim
order in favour of the Company� however it subsequently dismissed the case in April 2004.
The Company filed a review petition in the High Court in April 2004 which was also dismissed by the High Court in October 2004.
Subsequently, the Company appealed to the Supreme Court of India, New Delhi (the “Supreme Court”) by filing a Special Leave Petition.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

under the PPPA and failed to issue general certificates of conformance. In addition, the CPSC asserted that the Company violated the
NOTES TO THE CONSOLIDATED FINANCIAL CPSA by failing to immediately advise the CPSC of the alleged violations. The Company disagrees with the CPSC’s allegations.

STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

During the year ended 31 March 2006, the Company received a notice from the NPPA demanding the recovery of the price charged by
the Company for sales of NorNoxacin in excess of the maximum selling price fixed by the NPPA, which was ` 285 including interest.
The Company filed a writ petition in the High Court challenging this demand order. The High Court admitted the writ petition and
granted an interim order, directing the Company to deposit 50% of the principal amount claimed by the NPPA, which was ` 77. The Company
deposited this amount with the NPPA in November 2005. In February 2008, the High Court directed the Company to deposit an additional
amount of ` 30, which was deposited by the Company in March 2008. In November 2010, the High Court allowed the Company’s
application to include additional legal grounds that the Company believed strengthened its defense against the demand. For example,
the Company added as grounds that trade margins should not be included in the computation of amounts overcharged, and that it was
necessary for the NPPA to set the active pharmaceutical ingredient price before the process of determining the ceiling on the formulation
price. In October 2013, the Company filed an additional writ petition before the Supreme Court challenging the inclusion of NorNoxacin as a
“specified product” under the DPCO. In January 2015, the NPPA filed a counter affidavit stating that the inclusion of NorNoxacin was based
upon the recommendation of a committee consisting of experts in the field. On 20 July 2016, the Supreme Court remanded the matters
concerning the inclusion of NorNoxacin as a “specified product” under the DPCO back to the High Court for further proceedings. During the
three months ended 30 September 2016, the Supreme Court dismissed the Special Leave Petition pertaining to the fixing of prices for
NorNoxacin formulations.
During the three months ended 31 December 2016, a writ petition pertaining to NorNoxacin was filed by the Company with the Delhi High Court.
The matter has been adjourned to 29 July 2021 for hearing.
Based on its best estimate, the Company has recorded a provision for potential liability for sale proceeds in excess of the notified selling prices,
including the interest thereon, and believes that the likelihood of any further liability that may arise on account of penalties pursuant to
this litigation is not probable.
Litigation relating to Cardiovascular and Anti-diabetic formulations
In July 2014, the NPPA, pursuant to the guidelines issued in May 2014 and the powers granted by the Government of India under the Drugs
(Price Control) Order, 2013, issued certain notifications regulating the prices for 108 formulations in the cardiovascular and antidiabetic
therapeutic areas. The Indian Pharmaceutical Alliance (“IPA”), in which the Company is a member, filed a writ petition in the Bombay High
Court challenging the notifications issued by the NPPA on the grounds that they were ultra vires, ex facie and ab initio void. The Bombay High
Court issued an order to stay the writ in July 2014. On 26 September 2016, the Bombay High Court dismissed the writ petition filed by the IPA
and upheld the validity of the notifications�orders passed by the NPPA in July 2014. Further, on 25 October 2016, the IPA filed a Special Leave
Petition with the Supreme Court, which was dismissed by the Supreme Court.
During the three months ended 31 December 2016, the NPPA issued show-cause notices relating to allegations that the Company exceeded the
notified maximum prices for 11 of its products. The Company has responded to these notices.
On 20 March 2017, the IPA filed an application before the Bombay High Court for the recall of the judgement of the Bombay High Court dated
26 September 2016. This recall application filed by the IPA was dismissed by the Bombay High Court on 4 October 2017. Further, on 13
December 2017, the IPA filed a Special Leave Petition with the Supreme Court for the recall of the judgement of the Bombay High Court dated
4 October 2017, which was dismissed by Supreme Court on 10 January 2018.
During the three months ended 31 March 2017, the NPPA issued notices to the Company demanding payments relating to the foregoing
products for the allegedly overcharged amounts, along with interest. On 13 July 2017, in response to a writ petition which the Company had
filed, the Delhi High Court set aside all the demand notices of the NPPA and directed the NPPA to provide a personal hearing to the
Company and pass a speaking order. A personal hearing in this regard was held on 21 July 2017. On 27 July 2017, the NPPA passed a
speaking order along with the demand notice directing the Company to pay an amount of ` 776. On 3 August 2017, the Company filed a writ
petition challenging the speaking order and the demand notice. Upon hearing the matter on 8 August 2017, the Delhi High Court stayed
the operation of the demand order and directed the Company to deposit ` 100 and furnish a bank guarantee for ` 676. Pursuant to the
order, the Company deposited ` 100 on 13 September 2017 and submitted a bank guarantee of ` 676 dated 15 September 2017 to the
Registrar General, Delhi High Court. On 22 November 2017, the Delhi High Court directed the Union of India to file a final counter affidavit
within six weeks, subsequent to which the Company could file a rejoinder. On 10 May 2018, the counter affidavit was filed by the Union of
India. The Company subsequently filed a rejoinder and both were taken on record by the Delhi High Court. The matter has been adjourned
to 3 August 2021 for hearing.
Based on its best estimate, the Company has recorded a provision of ` 310 under “Selling, and other expenses” as a potential liability for
sale proceeds in excess of the notified selling prices, including the interest thereon, and believes that the likelihood of any further liability that
may arise on account of penalties pursuant to this litigation is not probable.
However, if the Company is unsuccessful in such litigation, it will be required to remit the sale proceeds in excess of the notified selling prices to
the Government of India with interest and could potentially include penalties, which amounts are not readily ascertainable.
Other product and patent related matters
Child resistant packaging matter complaint under the False Claims Act (“FCA”)
In May 2012, the Consumer Product Safety Commission (the “CPSC”) requested that Dr. Reddy’s Laboratories Inc., a wholly-owned subsidiary
of the Company in the United States, provide certain information with respect to compliance with requirements of special packaging for
child resistant blister packs for 6 products sold by the Company in the United States during the period commencing in 2002 through 2011. The
Company provided the requested information. The CPSC subsequently alleged in a letter dated 30 April 2014 that the Company had violated the
Consumer Product Safety Act (the “CPSA”) and the Poison Prevention Packaging Act (the “PPPA”) and that the CPSC intended to seek
civil penalties. Specifically, the CPSC asserted, among other things, that from or about 14 August 2008 through 1 June 2012, the Company
sold prescription drugs having unit dose packaging that failed to comply with the CPSC's special child resistant packaging regulations
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

Simultaneously, the U.S. Department of Justice (the “DOJ”) began to investigate a sealed complaint which was filed in the United States
District Court for the Eastern District of Pennsylvania under the Federal False Claims Act (“FCA”) related to these same issues (the “FCA
Complaint”). The Company cooperated with the DOJ in its investigation. The DOJ and all States involved in the investigation declined to
intervene in the FCA Complaint. On 10 November 2015, the FCA Complaint was unsealed and the plaintiff whistleblowers, who are two
former employees of the Company, proceeded without the DOJ’s and applicable States’ involvement. The unsealed FCA Complaint
relates to the 6 blister pack products originally subject to the investigation and also 38 of the Company’s generic prescription products
sold in the U.S. in various bottle and cap packaging.
The Company filed its response to the FCA Complaint on 23 February 2016 in the form of a motion to dismiss for failure to state a claim upon
which relief can be granted. On 26 March 2017, the Court granted the Company’s motion to dismiss, dismissing the FCA Complaint and
allowing the plaintiffs one more chance to refile this complaint in an attempt to plead sustainable allegations.
On 29 March 2017, the plaintiffs filed their final amended FCA Complaint, which the Company opposed and during the three months
ended 31 March 2018, the Company obtained dismissal of the FCA Complaint with prejudice. The plaintiffs filed a petition with the Court
requesting that the Court reconsider its decision to dismiss the FCA Complaint with prejudice, and that request was denied.
The parallel investigation by the CPSC under the CPSA and the PPPA was referred by the CPSC to the DOJ’s office in Washington, D.C.
in April 2016, with the recommendation that the DOJ initiate a civil penalty action against the Company. The CPSC matter referred to the DOJ
relates to five of the blister pack products.
On 18 January 2018, the Company and the DOJ entered into a settlement of the action and agreed to a consent decree providing for a civil
penalty of US$5 million (` 319), and injunctive relief. The settlement was without adjudication of any issue of fact or law, and the Company
has not admitted any violations of law pursuant to this settlement.
During the three months ended 31 March 2018, the Company obtained dismissal of the FCA Complaint with prejudice. The plaintiffs
subsequently filed a petition with the Court requesting that the Court reconsider its decision to dismiss the FCA Complaint with prejudice,
and that request was denied.
In June 2018, the plaintiffs filed their Notice of Appeal to the Third Circuit Court of Appeals. During the three months ended September 2018,
the plaintiffs and the DOJ settled and thus this appeal was dismissed. The plaintiffs then filed an application for recovery of attorneys� fees
from the Company under the "alternative remedy doctrine." The Company made opposing filings to this and in response the plaintiffs
withdrew their application.
The Company believes that the likelihood of any liability that may arise on account of the FCA Complaint is not probable. Accordingly, no
provision has been made in these consolidated financial statements.
Namenda Litigation
In August 2015, Sergeants Benevolent Assoc. Health & Welfare Fund (“Sergeants”) filed suit against the Company in the United States District
Court for the Southern District of New York. Sergeants alleged that certain parties, including the Company, violated federal antitrust
®
laws as a consequence of having settled patent litigation related to the Alzheimer’s drug Namenda (memantine) tablets during a period from
®
about 2009 until 2010. Sergeants seeks to represent a class of “end payor” purchasers of Namenda tablets (i.e., insurers, other third-
party payors and consumers).
Sergeants seeks damages based upon an allegation made in the complaint that the defendants entered into patent settlements
®
regarding Namenda tablets for the purpose of delaying generic competition and facilitating the brand innovator’s attempt to shift sales from
the original immediate release product to the more recently introduced extended release product.
On 23 August 2020, the Company and certain other defendants entered into a settlement agreement. The settlement agreement calls for the
dismissal with prejudice of the claims brought by the plaintiff on behalf of the putative class, in exchange for the payment of US$0.4
million. The Company paid that amount into escrow. The Court preliminarily approved the settlement on 5 October 2020. The settlement
agreement is contingent upon final court approval. The settlement agreement explicitly disclaims any liability or wrongdoing.
Following the settlement agreement, the Company recognised such amount in the statement of profit and loss for the three months
ended 30 September 2020.
On 5 November 2019 plaintiffs MSP Recovery Claims, Series LLC and MSPA Claims 1, LLC filed suit against the Company and other drug
manufacturers in the United States District Court for the Southern District of New York. The claims in this complaint were similar in nature to
the claims in the Sergeants lawsuit, and those cases were coordinated for discovery purposes. On 14 April 2020, with the consent of the
Company and the other defendants, plaintiffs MSP Recovery Claims, Series LLC and MSPA Claims 1, LLC voluntarily dismissed their
claims without prejudice.
Other class action complaints containing similar allegations to the Sergeants complaint have also been filed in the U.S. District Court for
the Southern District of New York. However, apart from the Sergeants case described above, there are no such class actions that are pending
and that name the Company as a defendant.
In addition, the State of New York filed an antitrust case in the U.S. District Court for the Southern District of New York. The case brought by
the State of New York contained some (but not all) of the allegations set forth in the class action complaints, but the Company was not named
as a party. The case brought by the State of New York was dismissed by stipulation on 30 November 2015.
The Company believes that the likelihood of any liability, apart from the settlement payment described above, that may arise on account of
alleged violation of federal antitrust laws is not probable. Accordingly, no provision has been made in these consolidated financial statements.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

In March 2017, plaintiffs agreed by stipulation to dismiss Dr. Reddy’s Laboratories Inc. and Dr. Reddy’s Laboratories Limited from the actions
NOTES TO THE CONSOLIDATED FINANCIAL related to pravastatin sodium tablets without prejudice. The Company denies any wrongdoing and intends to vigorously defend against these
allegations.
STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

Ranitidine recall and Litigation

On 1 October 2019, the Company initiated a voluntary nationwide retail (at the retail level for over-the-counter products and at the consumer
level for prescription products) of its ranitidine medications sold in the United States due to the presence of N-Nitrosodimethylamine (“NDMA”)
above levels established by the U.S. FDA. On 1 November 2019, the U.S. FDA issued a statement indicating that it had found levels of NDMA in
ranitidine from its testing generally that were “similar to the levels you would expect to be exposed to if you ate common foods like grilled or
smoked meats.” See https://www.fda.gov/news-events/press-announcements/statement-new-testing-results-including-low-levels-impurities-
ranitidine-drugs. On 1 April 2020, the U.S. FDA issued a press release announcing that it was requesting manufacturers to withdraw all
prescription and over-the-counter ranitidine drugs from the market immediately.
Individual federal court personal injury lawsuits, as well as various class actions, have been transferred to the In re Zantac (Ranitidine) Products
Liability Litigation Multidistrict Litigation in the Southern District of Florida, MDL-2924 (“MDL-2924”). The Company and/or one or more of
its U.S. subsidiaries have been named as a defendant in over 250 lawsuits pending in the MDL-2924. A census registry established in the
MDL-2924 includes tens of thousands of claimants who have not filed complaints but are presenting claims for consideration in the MDL-2924
against the many pharmaceutical manufacturers, distributors and retailers which are defendants in the MDL-2924. The MDL-2924 also involves
a proposed nationwide consumer class action and a proposed nationwide class action for medical monitoring. A third-party payor class action
was dismissed without prejudice and has been appealed by plaintiffs to the U.S. Court of Appeals for the Eleventh Circuit.
On 31 December 2020, the MDL-2924 Court ruled on multiple motions to dismiss in the MDL-2924 and granted the generic
manufacturers’ (the Company is a generic manufacturer) motion to dismiss based on federal preemption. The plaintiffs’ failure-to-warn and
design defect claims against the Company were dismissed with prejudice, but the Court permitted plaintiffs to attempt to replead several
claims/theories. Plaintiffs have filed their amended complaints and the defendants, including the Company, filed motions to dismiss seeking
dismissal of all claims against them on 24 March 2021. The briefings and arguments as to the latest round of motions to dismiss were
completed and the parties are continue to engage in discovery consistent with orders from the MDL-2924 Court.
There are three ranitidine-related actions currently pending against the Company in state courts. The New Mexico State Attorney General filed
suit against the Company’s U.S. subsidiary, and multiple other manufacturers and retailers. The State of New Mexico asserted claims of
statutory and common law public nuisance and negligence claims against the Company. The Company joined in an effort to transfer the case
from the Santa Fe County Court to the MDL-2924, but the case was remanded by the MDL-2924 Court to the Santa Fe County Court.
Plaintiff filed an amended complaint on 16 April 2021, and a briefing schedule has been entered pursuant to which the defendants will move
to dismiss the case.
In November 2020, the City of Baltimore filed a similar action against the Company’s U.S. subsidiary, and multiple other manufacturers
and retailers. The City of Baltimore asserts public nuisance and negligence claims against the Company. The City of Baltimore action also
was transferred to the MDL and subsequently was remanded to the Circuit Court of Maryland by the MDL Court. The City of Baltimore
intends to file an amended complaint and the defendants will then move to dismiss the case.
In January 2021, the Company was served in a Proposition 65 case filed by the Center for Environmental Health in the Superior Court of
Alameda County, California. The plaintiff purports to bring the case on behalf of the people of California and alleges that the Company
violated Proposition 65, a California law requiring manufacturers to disclose the presence of carcinogens in consumer products. The Company
and other defendants have filed demurrers (motions to dismiss) in the case, and on 7 May 2021 the Court granted all such demurrers
without leave to amend the pleadings. The People of California have the right to appeal this decision.
The Company believes that all of the aforesaid complaints and asserted claims are without merit and it denies any wrongdoing and intends to
vigorously defend itself against the allegations. Any liability that may arise on account of these claims is unascertainable at this time.
Accordingly, no provision was made in these consolidated financial statements of the Company.
Class Action and Other Civil Litigation on Pricing/Reimbursement Matters
On 30 December 2015 and on 4 February 2016, respectively, a class action complaint (the “First Pricing Complaint”) and another complaint
(not a class action) (the “Second Pricing Complaint”) were filed against the Company and eighteen other pharmaceutical defendants in State
Court in the Commonwealth of Pennsylvania. In these actions, the class action plaintiffs allege that the Company and other defendants,
individually or in some cases in concert with one another, have engaged in pricing and price reporting practices in violation of various
Pennsylvania state laws. More specifically, the plaintiffs allege that: (1) the Company provided false and misleading pricing information to third
party drug compendia companies for the Company’s generic drugs, and such information was relied upon by private third party payers that
reimbursed for drugs sold by the Company in the United States, and (2) the Company acted in concert with certain other defendants to unfairly
raise the prices of generic divalproex sodium ER (bottle of 80, 500 mg tablets ER 24H) and generic pravastatin sodium (bottle of 500, 10 mg
tablets).
The First Pricing Complaint was removed to the U.S. District Court for the Eastern District of Pennsylvania (the “E.D.P.A. Federal Court”)
and, pending the outcome of the First Pricing Complaint, the Second Pricing Complaint was stayed. On 25 September 2017, the E.D.P.A.
Federal Court dismissed all the claims of the plaintiffs in the First Pricing Complaint and denied leave to amend such complaint as futile.
Subsequent to this decision, the plaintiffs’ right to appeal the dismissal of the First Pricing Complaint expired.
Further, on 17 November 2016, certain class action complaints were filed against the Company and a number of other pharmaceutical
companies as defendants in the E.D.P.A. Federal Court. Subsequently, these complaints were consolidated into one amended complaint
as part of a multi-district, multi product litigation pending with the E.D.P.A. Federal Court. These complaints allege that the Company and the
other named defendants have engaged in a conspiracy to fix prices and to allocate bids and customers in the sale of pravastatin sodium tablets
and divalproex sodium extended-release tablets in the United States.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)

2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)

In response to the consolidated new complaint, the Company filed a motion to dismiss in October 2017. The plaintiffs filed opposition to the
motion to dismiss in December 2017 and a reply was filed by the Company in January 2018. In October 2018, the Court denied the motion to
dismiss on the grounds that the allegations pled leave open the possibility of conspiracy. Therefore, discovery will proceed to look into this
possibility.
The Company believes that the asserted claims are without merit and intends to vigorously defend itself against the allegations. Also any
liability that may arise on account of these claims is unascertainable. Accordingly, no provision was made in these consolidated financial
statements of the Company.
United States Antitrust Multi-District Litigation:
The following cases against the Company’s U.S. subsidiary, Dr. Reddy’s Laboratories, Inc., have been filed and are pending and consolidated in
In re Generic Pharmaceutical Pricing Antitrust Litigation, MDL 2724, 14-MD-2724 (Eastern District of Pennsylvania), Multi District Litigation
(“MDL”) in the Eastern District of Pennsylvania (“MDL-2724”):
a) U.S. States Attorneys General Antitrust Complaints:
On 30 October 2017, the Attorneys General of forty-nine U.S. States, the Commonwealth of Puerto Rico and the District of Columbia, filed an
Amended Complaint in the United States District Court for the Eastern District of Pennsylvania, against eighteen generic pharmaceutical
companies (including the Company’s U.S. subsidiary) with respect to fifteen generic drugs, alleging that the Company’s U.S. subsidiary and the
other named defendants engaged in a conspiracy to fix prices and to allocate bids and customers in the United States in the sale of the fifteen
named drugs. The Company’s U.S. subsidiary is specifically named as a defendant with respect to two generic drugs (meprobamate and
zoledronic acid), and is named as an alleged co-conspirator on an alleged “overarching conspiracy” with respect to the other thirteen generic
drugs named. The Amended Complaint alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and the consumer protection and
antitrust laws of each of the jurisdictions that are plaintiffs.
The Amended Complaint seeks injunctive relief, statutory penalties, punitive damages, and recovery of treble damages, plus attorney’s fees
and costs, against all named defendants on a joint and several basis, on behalf of the plaintiff jurisdictions and their citizens and
inhabitants. The Company denies any wrongdoing and intends to vigorously defend against the claims asserted.
On 10 May 2019, the Attorneys General of forty-nine U.S. States, the Commonwealth of Puerto Rico and the District of Columbia, filed a
Complaint in the United States District Court for the District of Connecticut against twenty-one generic pharmaceutical companies
(including the Company’s
U.S. subsidiary) and fifteen individual defendants, with respect to 116 generic drugs, alleging that the Company’s U.S. subsidiary and the other
named defendants engaged in a conspiracy to fix prices and to allocate bids and customers in the United States in the sale of the 116 named
drugs. Under the MDL rules, this action will be designated a related “tag along” action and will be transferred to and become a part of the
MDL-2724. The Company’s U.S. subsidiary is specifically named as a defendant with respect to five generic drugs (ciproNoxacin HCL tablets,
glimepiride tablets, oxaprozin tablets, paricalcitol and tizanidine), and is named as an alleged co-conspirator on an alleged “overarching
conspiracy” with respect to the other thirteen generic drugs named. The Complaint alleges violations of Section 1 of the Sherman Act, 15
U.S.C. §1, and the consumer protection and antitrust laws of each of the jurisdictions that are plaintiffs. The Complaint seeks injunctive relief,
statutory penalties, punitive damages, and recovery of treble damages, plus attorney’s fees and costs, against all named defendants on a joint
and several basis, on behalf of the plaintiff jurisdictions and their citizens and inhabitants. The Company denies any wrongdoing and intends to
vigorously defend against the claims asserted.
b) Divalproex Antitrust Class Action Cases Filed by Direct Payor Plaintiffs, End Payor Plaintiffs and Indirect Reseller Plaintiffs Classes:
Since 17 November 2016, certain class action complaints on behalf of Direct Purchaser Plaintiffs, Indirect Reseller Plaintiffs and End Payor
Plaintiffs classes were filed against the Company’s U.S. subsidiary, Dr. Reddy’s Laboratories, Inc., and a number of other pharmaceutical
defendants in the United States District Court for the District of Pennsylvania alleging that the Company’s U.S. subsidiary and the other
named defendants have engaged in a conspiracy to fix prices and to allocate bids and customers in the sale of divalproex ER tablets in the
United States.
The actions allege violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and of state consumer protection and antitrust laws, and asserts
claims of unjust enrichment, under a total of thirty-one States and the District of Columbia. The actions seek injunctive relief and
recovery of treble damages, punitive damages, plus attorney’s fees and costs, on a joint and several basis, on behalf of the plaintiff classes.
The Company denies any wrongdoing and intends to vigorously defend against these class action claims.
c) Pravastatin Antitrust Class Action Cases Filed by Direct Payor Plaintiffs, End Payor Plaintiffs and Indirect Reseller Plaintiffs Classes:
Since 17 November 2016, certain class action complaints on behalf of Direct Purchaser Plaintiffs, Indirect Reseller Plaintiffs and End Payor
Plaintiffs classes were filed against the Company and a number of other pharmaceutical defendants in the United States District Court for the
District of Pennsylvania, alleging that the Company’s U.S. subsidiary and the other named defendants engaged in a conspiracy to fix prices
and to allocate bids and customers in the sale of pravastatin sodium tablets in the United States. The Company’s U.S. subsidiary has been
dismissed from these actions, without prejudice, in exchange for a tolling agreement with the plaintiffs suspending the statute of limitations as
to the claims asserted. The Company denies any wrongdoing and intends to vigorously defend against these claims.
d) Antitrust “Overarching Conspiracy” Cases Filed by Direct Payor Plaintiffs, End Payor Plaintiffs and Indirect Reseller Plaintiffs Classes:
In June 2018, three class action complaints were filed in the MDL-2724 by Direct Purchaser Plaintiffs, Indirect Resellers Plaintiffs and End
Payor Plaintiffs classes. All three complaints allege conspiracies in restraint of trade in violation of Sections 1 of the Sherman Act, and
violations of thirty-one State antitrust statutes and consumer protection statutes, and asserts claims of unjust enrichment seeking injunctive
relief, recovery of treble damages, punitive damages, attorney's fees and costs against all named defendants on a joint and several basis.
They allege an “overarching conspiracy” among the named defendants involving fifteen drugs and, with slight variations, name
approximately twenty-five generic pharmaceutical manufacturers including the Company’s U.S. subsidiary, Dr. Reddy’s Laboratories,
Inc.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
j) Antitrust Case Filed by United Healthcare Services, Inc.:
The drug-specific allegations against the Company’s U.S. subsidiary involve two of the fifteen drugs, meprobamate and zoledronic acid. Plaintiffs On 11 October 2019, United Healthcare Services, Inc. filed a second complaint (which substantially tracks the second complaint filed by the
also allege that the Company’s U.S. subsidiary (as well as all other manufacturers named) were part of a larger “overarching conspiracy” as to State Attorneys General on 10 May 2019) against the Company’s U.S. subsidiary and twenty-four other defendants in the United States District
all of the drugs named in the complaints. The complaint alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and violations of Court for the District of Minnesota with respect to 116 generic drugs, alleging that the Company’s U.S. subsidiary and the other named
thirty-one States’ antitrust statutes and consumer protection statutes, and asserts claims of unjust enrichment. The complaint seeks defendants engaged in a conspiracy to fix prices and to allocate bids and customers in the United States in the sale of the 116 named drugs.
injunctive relief, recovery of treble damages, punitive damages, attorney's fees and costs against all named defendants on a joint and several Under the MDL rules, this action will be designated a related “tag along” action and will be transferred to and become a part of the MDL-2724.
basis. The Company denies any wrongdoing and intends to vigorously defend against these claims. The Company’s U.S. subsidiary is specifically named as a defendant with respect to five generic drugs (ciproNoxacin HCL tablets,
e) Antitrust Case Filed by The Kroger Co., Albertsons Companies, LLC, and H.E. Butt Grocery Company, L.P.: glimepiride tablets, oxaprozin tablets, paricalcitol and tizanidine), and is named as an alleged co-conspirator on an alleged “overarching
On 22 January 2018, each of the Kroger Co., Albertsons Companies, LLC, and H.E. Butt Grocery Company, L.P., filed a complaint against conspiracy” with respect to the other generic drugs named. The complaint alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and
the Company’s U.S. subsidiary and thirty-one other companies alleging that they had engaged in a conspiracy to fix prices and to allocate bids violations of the Minnesota antitrust laws and various other state antitrust and consumer protection laws, and asserts claims for unjust
and customers in the United States in the sale of the thirty named generic drugs. The Company’s U.S. subsidiary is specifically named as a enrichment.
defendant with respect to three generic drugs (divalproex ER, meprobamate and zoledronic acid), and is named as an alleged co-conspirator on The complaint seeks injunctive relief, statutory penalties, punitive damages, and recovery of treble damages, plus attorney’s fees and
an alleged “overarching conspiracy” claim with respect to the other generic drugs named. costs, against all named defendants on a joint and several basis. The Company denies any wrongdoing and intends to vigorously defend
This action alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and seeks injunctive relief and recovery of treble damages, punitive against these claims.
damages, plus attorney’s fees and costs, against all named defendants on a joint and several basis. The Company denies any wrongdoing and k) Antitrust “Overarching Conspiracy” Cases Filed by Direct Payor Plaintiffs, End Payor Plaintiffs and Indirect Reseller Plaintiffs Classes:
intends to vigorously defend against these class action claims. On 19 December 2019, a new class action complaint was filed by the End Payor Plaintiffs. The complaint alleges a conspiracy in restraint of
f) Antitrust Case Filed by Humana Inc.: trade in violation of Section 1 of the Sherman Act, 15 U.S.C. §1, and violations of twenty-eight States’ antitrust statutes and twenty-nine States’
On 3 August 2018, Humana, Inc., filed a complaint against the Company’s U.S. subsidiary and thirty-nine other companies alleging that they consumer protection statutes, and asserts claims of unjust enrichment. The complaint seeks injunctive relief, recovery of treble damages,
had engaged in a conspiracy to fix prices and to allocate bids and customers in the United States in the sale of twenty-nine named punitive damages, attorney’s fees and costs. The complaint alleges an “overarching conspiracy” among the named defendants involving one
generic drugs. On 15 December 2020, Humana, Inc., filed an Amended Complaint encompassing fifty-one defendants and a total of one hundred and thirty-five drugs and, with slight variations, names approximately thirty-six generic pharmaceutical manufacturers, including the
hundred forty nine drugs. In the Amended Complaint, the Company’s U.S. subsidiary is specifically named as a defendant with respect to Company’s U.S. subsidiary.
eighteen generic drugs: allopurinol, ciproNoxacin ER, eszopiclone, Nuconazole, glimepiride, isotretinoin, lamotrigine ER, meprobamate, The drug-specific allegations against the Company’s U.S. subsidiary involve eight of the one hundred thirty-five drugs, including
metroprolol succinate ER, montelukast, omeprazole sodium bicarbonate, oxaprozin, paricalcitol, ranitidine, sumatriptan, tizanidine, allopurinol, ciproNoxacin HCL, Nuconazone, glimepiride, oxaprozine, paricalcitol, ranitidine HCL and tizanidine. The Company denies any
valganciclovir, and zoledronic acid. The Company’s subsidiary is also named as a co-conspirator on an alleged “overarching conspiracy” claim wrongdoing and intends to vigorously defend against these claims.
with respect to the other generic drugs named. The complaint also alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and
violations of thirty-one States’ antitrust statutes and consumer protection statutes, and asserts claims of unjust enrichment. The complaint On 19 December 2019, a new class action complaint was filed by certain pharmacy and hospital indirect purchaser plaintiffs. The complaint
seeks injunctive relief, recovery of treble damages, punitive damages, attorney's fees and costs against all named defendants on a joint and alleges a conspiracy in restraint of trade in violation of Sections 1 and 3 of the Sherman Act, 15 U.S.C. §1 and §3, and violations of forty-three
several basis. The Company denies any wrongdoing and intends to vigorously defend against these claims. States’ antitrust statutes and consumer protection statutes, and asserts claims of unjust enrichment. The complaint seeks injunctive relief,
recovery of treble damages, punitive damages, attorney’s fees and costs against all named defendants on a joint and several basis. The
g) Antitrust Case Filed by Marion Diagnostic Center, LLC, and Marion Healthcare, LLC: complaint alleges an “overarching conspiracy” among the named defendants involving one hundred and sixty-two drugs and, with slight
On 25 September 2018, Marion Diagnostic Center, LLC, and Marion Healthcare, LLC, filed a complaint in the MDL-2724, on behalf of variations, names approximately twenty-eight generic pharmaceutical manufacturers, including the Company’s U.S. subsidiary, as well as
themselves and a class of all direct purchasers from distributors, against the Company’s U.S. subsidiary and twenty-two other defendants, seven pharmaceutical distributor defendants and sixteen individual defendants.
including a major distributor of pharmaceutical products, involving a total of sixteen generic drugs, alleging an “overarching conspiracy” to fix
prices and to rig bids and allocate customers with respect to sixteen generic drugs. The Company’s U.S. subsidiary is specifically named with The drug-specific allegations against the Company’s U.S. subsidiary involve nineteen drugs: allopurinol, capecitabine, ciproNoxacin HCL,
respect to two drugs: meprobamate and zoledronic acid. Plaintiffs also allege that the Company’s U.S. subsidiary (as well as all other divalproex ER, eszopiclone, fenofibrate, glimepiride, isotretinoin, lamotrigine ER, meprobamate, metoprolol ER, montelukast granules,
manufacturers named) were part of a larger “overarching conspiracy” as to all of the drugs named in the complaints. The complaint alleges omeprazole sodium bicarbonate, oxaprozine, paricalcitol, sumatriptan, tizanidine HCL, valganciclovir and zoledronic acid. The Company
violations of Section 1 of the Sherman Act, 15 U.S.C. §1, and violations of twenty-four States’ antitrust statutes and consumer protection denies any wrongdoing and intends to vigorously defend against these claims.
statutes, and asserts claims of unjust enrichment. The complaint seeks injunctive relief, recovery of treble damages, punitive damages, l) Antitrust Case Filed by Fourteen New York State Counties;
attorney's fees and costs against all named defendants on a joint and several basis. The Company denies any wrongdoing and intends to On 19 December 2019, a new class action complaint was filed by certain pharmacy and hospital indirect purchaser plaintiffs. The
vigorously defend against these claims. complaint alleges a conspiracy in restraint of trade in violation of Sections 1 and 3 of the Sherman Act, 15 U.S.C. §1 and §3, and violations of
h) Antitrust Case Filed by United Healthcare Services, Inc.: forty-three States’ antitrust statutes and consumer protection statutes, and asserts claims of unjust enrichment. The complaint seeks injunctive
On 16 January 2019, United Healthcare Services, Inc., filed a complaint against the Company’s U.S. subsidiary and forty-two other defendants, relief, recovery of treble damages, punitive damages, attorney’s fees and costs against all named defendants on a joint and several basis. The
involving a total of thirty generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with respect to complaint alleges an “overarching conspiracy” among the named defendants involving one hundred and sixty-two drugs and, with slight
the thirty drugs. The Company’s U.S. subsidiary is specifically named with respect to four drugs: divalproex ER, meprobamate, variations, names approximately twenty-eight generic pharmaceutical manufacturers, including the Company’s U.S. subsidiary as well as
pravastatin and zoledronic acid. Plaintiffs also allege that the Company’s U.S. subsidiary (as well as all other manufacturers named) were seven pharmaceutical distributor defendants and sixteen individual defendants. The drug-specific allegations against the Company’s U.S.
part of a larger “overarching conspiracy” as to all of the drugs named in the complaints. The complaint alleges violations of Section 1 of subsidiary involve nineteen drugs: allopurinol, capecitabine, ciproNoxacin HCL, divalproex ER, eszopiclone, fenofibrate, glimepiride,
the Sherman Act, 15 U.S.C. §1, and violations of the thirty States’ antitrust laws and consumer protection statutes, and asserts claims of isotretinoin, lamotrigine ER, meprobamate, metoprolol ER, montelukast granules, omeprazole sodium bicarbonate, oxaprozine,
unjust enrichment. The complaint seeks injunctive relief, recovery of treble damages, punitive damages, and attorney's fees and cost against paricalcitol, sumatriptan, tizanidine HCL, valganciclovir and zoledronic acid. The Company denies any wrongdoing and intends to vigorously
all defendants on a joint and several basis. The Company denies any wrongdoing and intends to vigorously defend against these claims. defend against these claims.

i) Pennsylvania Court of Common Pleas Praecipe For a Writ of Summons Filed by 87 End Payor Entities consisting of Blue Cross Blue m) Antitrust Case Filed by Health Care Services, Inc.:
Shield entities and other health insurance companies and HMO On 11 December 2019, Health Care Services, Inc. filed a complaint against the Company’s U.S. subsidiary and thirty-eight other
entities: On 19 July 2019, a Praecipe For a Writ of Summons for a tort action was filed in the Pennsylvania Court of Common Pleas of defendants, involving a total of one hundred twenty-eight generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids
Philadelphia County, First Judicial District of Pennsylvania, Civil Trial Division, by 87 Blue Cross Blue Shield entities, and other health and allocate customers with respect to these drugs. On 15 December 2020, Health Care Services filed an Amended Complaint naming a total of
insurance companies and HMO entities, against the Company’s U.S. subsidiary and 69 other defendants (consisting of 51 other one hundred seventy drugs. In the Amended Complaint, the Company’s U.S. subsidiary is specifically named with respect to nineteen
pharmaceutical companies and 17 individuals). These 87 plaintiffs had been previously encompassed by the End Payor Plaintiff class actions in drugs: allopurinol, ciproNoxacin HCL, divalproex ER, eszopiclone, Nuconazole, glimepiride, isotretinoin, lamotrigine ER, meprobamate,
metroprolol succinate ER, montelukast, omeprazole sodium bicarbonate, oxaprozine, paricalcitol, ranitidine, sumatriptan, tizanidine,
the MDL-2724. Only a Praecipe of Writ of Summons has been filed. No complaint has been filed and, therefore, the potential claims have not
valganciclovir and zoledronic acid. Plaintiffs allege that the Company’s U.S. subsidiary (as well as all other manufacturers named) were part of
been asserted or delineated in any manner, including what drugs any such claims may relate to. A complaint may, at some point, be filed
a larger “overarching conspiracy” as to all of the drugs named in the complaint. The complaint also alleges violations of Sections 1 and 2 of the
encompassing the claims asserted by the End Payor Plaintiffs in the MDL-2724 actions. On 12 December 2019, an Order of the Court of
Sherman Act, 15 U.S.C. §1 and §2, and violations of thirty-one States’ antitrust laws and twenty-seven States’ consumer protection statutes,
Common Pleas placed the matter “in Deferred Status Pending Further Developments in Related Federal Multidistrict Litigation.” Because no
and asserts claims of unjust enrichment. The complaint seeks injunctive relief, recovery of treble damages, punitive damages, and attorney’s
Complaint has been filed setting forth any claims, and because the action has been placed into Deferred Status, no response is required by
fees and costs against all defendants on a joint and several basis. The Company denies any wrongdoing and intends to vigorously defend
the Company’s subsidiary at this time.
against these claims.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
s) Antitrust Case Filed by Rite Aid Corporation and Rite Aid Hdqtrs. Corp.:
n) Antitrust Case Filed by MSP Recovery Claims, Series LLC, MAO-MSO Recovery II, LLC, and MSPA Claims I, LLC (collectively “MSP On 9 July 2020, Rite Aid Corporation and Rite Aid Hdqtrs Corp. filed a complaint on their own behalf, and as assignee of McKesson
Recovery”), as Assignees of certain Medicare Advantage Plans: Corporation with regard to drugs sold by McKesson to Rite Aid, against the Company’s U.S. subsidiary and forty-six other defendants, involving
On 16 December 2019, MSP Recovery filed a complaint against the Company’s U.S. subsidiary and twenty-five other defendants, involving a a total of one hundred thirty-five generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with
total of sixteen generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with respect to the respect to these drugs. On 15 December 2020, Rite Aid filed an Amended Complaint against a total of fifty-five defendants involving a total of
sixteen drugs. The Company’s U.S. subsidiary is specifically named with respect to one drug: Divalproex ER. Plaintiffs also allege that one hundred eighty eight drugs. In the Amended Complaint, the Company’s U.S. subsidiary is specifically named with respect to eleven
the Company’s drugs: allopurinol, ciproNoxacin ER, divalproex ER, Nuconazole, glimepiride, meprobamate, oxaprozine, paricalcitol, ranitidine, tizanidine
U.S. subsidiary (as well as all other manufacturers named) were part of a larger “overarching conspiracy” as to all of the drugs named in and zoledronic acid. Plaintiff alleges that the Company’s U.S. subsidiary was part of a larger “overarching conspiracy” with all other
the complaint. manufacturers named as to all of the drugs named in the complaint; and, alternatively, was part of an overarching conspiracy with eighteen of
the defendants named with regard to forty-five of the drugs named. The complaint also alleges violations of Section 1 of the Sherman Act, 15
The complaint alleges violations of Sections 1 and 3 of the Sherman Act, 15 U.S.C. §1 and §3, and violations of twenty-eight States’ antitrust
U.S.C. §1. The complaint seeks injunctive relief, recovery of treble damages, and attorney’s fees and costs against all defendants on a joint
laws and twenty-three States’ consumer protection statutes, and asserts claims of unjust enrichment. The complaint seeks injunctive relief, and several basis. The Company denies any wrongdoing and intends to vigorously defend against these claims.
recovery of treble damages, punitive damages, and attorney’s fees and costs against all defendants on a joint and several basis. The Company
denies any wrongdoing and intends to vigorously defend against these claims. t) Antitrust Complaint Filed by Suffolk County, New York:
On 27 August 2020, Suffolk County, New York, filed a complaint against the Company’s U.S. subsidiary and forty-six other defendants, involving
o) Antitrust Case Filed by Molina Healthcare Inc.: a total of one hundred thirty generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with respect
On 27 December 2019, Molina Healthcare Inc. filed a complaint against the Company’s U.S. subsidiary and forty-one other defendants, to these drugs. The Company’s U.S. subsidiary is specifically named with respect to twelve drugs: ciproNoxacin ER, divalproex ER,
involving a total of one hundred twenty-eight generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate fenofibrate, Nuconazole, glimepiride, glyburide, metformin, oxaprozin, pravastatin, ranitidine, tizanidine and zoledronic acid. Plaintiffs
customers with respect to these drugs. On 15 December 2020, Molina Healthcare filed an Amended Complaint against a total of fifty-eight allege that the Company’s U.S. subsidiary was part of a larger “overarching conspiracy” with all other manufacturers named as to all of the
defendants involving one hundred eighty four drugs. In the Amended Complaint, the Company’s U.S. subsidiary is specifically named with drugs named in the complaint. The complaint also alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1. The complaint seeks
respect to nineteen drugs: allopurinol, ciproNoxacin, divalproex ER, eszopiclone, Nuconazole, glimepiride, isotretinoin, lamotrigine ER, injunctive relief, recovery of treble damages, and attorney’s fees and costs against all defendants on a joint and several basis. The Company
meprobamate, metroprolol succinate ER, montelukast, omeprazole sodium bicarbonate, oxaprozine, paricalcitol, ranitidine, sumatriptan, denies any wrongdoing and intends to vigorously defend against these claims.
tizanidine, valganciclovir and zoledronic acid. Plaintiffs allege that the Company’s U.S. subsidiary (as well as all other manufacturers named)
were part of a larger “overarching conspiracy” as to all of the drugs named in the complaint. The complaint also alleges violations of Sections 1 u) Antitrust Complaint Filed by J M Smith:
and 2 of the Sherman Act, 15 U.S.C. §1 and §2, and violations of eleven States’ antitrust laws and consumer protection statutes, and On 4 September 2020, J M Smith Corporation, as assignee of Burlington Drug Company, filed a complaint against the Company’s U.S.
asserts claims of unjust enrichment. The complaint seeks injunctive relief, recovery of treble damages, punitive damages, and attorney’s fees subsidiary and fifty other defendants, involving a total of one hundred thirty generic drugs, alleging an “overarching conspiracy” to fix prices
and costs against all defendants on a joint and several basis. The Company denies any wrongdoing and intends to vigorously defend and to rig bids and allocate customers with respect to these drugs. The Company’s U.S. subsidiary is specifically named with respect to eleven
against these claims. drugs: allopurinol, ciproNoxacin ER, divalproex ER, Nuconazole, glimepiride, meprobamate, oxaprozin, paricalcitol ranitidine, tizanidine
and zoledronic acid. Plaintiffs allege that the Company’s U.S. subsidiary was part of a larger “overarching conspiracy” with all other
p) Antitrust Case Filed by Harris Countv, Texas: manufacturers named as to all of the drugs named in the complaint; The complaint also alleges violations of Section 1 of the Sherman Act, 15
On 1 March 2020, Harris County, Texas filed a Complaint against the Company's U.S. Subsidiary and forty-two other defendants, involving a U.S.C. §1. The complaint seeks injunctive relief, recovery of treble damages, and attorney’s fees and costs against all defendants on a joint
total of one hundred twenty-eight generic drugs, alleging an "overarching conspiracy" to fix prices and to rig bids and allocate customers with and several basis. The Company denies any wrongdoing and intends to vigorously defend against these claims.
respect to the one hundred eighty-seven drugs. The case is in the process of being transferred to the MDL proceeding. The Company's U.S.
v) Antitrust Complaint Filed by Walgreen Company:
subsidiary is specifically named with respect to twenty drugs: allopurinol, amoxicillin, ciproNoxacin HCL, divalproex ER, famotidine, fenofibrate,
On 11 December 2020, Walgreen Company filed a complaint against the Company’s U.S. subsidiary and fifty-four other defendants, involving a
Nuconazole, Nuoxetine, glimepiride, glycopyrrolate, levalbuterol meprobamate, naproxen, ondansetron, oxaprozine, pravastatin sodium,
total of one hundred eighty-eight generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with
raloxifene HCL, ranitidine, tizanidine and zoledronic acid. Plaintiffs also allege that the Company's U.S. subsidiary (as well as all other
respect to these drugs. Walgreen asserts claims on its own behalf and as assignee of Amerisource Bergen for drugs that Amerisource Bergen
manufacturers named) were part of a larger "overarching conspiracy" as to all the drugs named in the complaints. The Complaint alleges
sold to Walgreen. The Company’s U.S. subsidiary is specifically named with respect to eleven drugs: allopurinol, ciproNoxacin ER,
violations of Sections 1 of the Sherman Act, 15 U.S.C. §1, violations of twenty-eight State's antitrust laws, violations of the Texas Deceptive
divalproex ER, Nuconazole, glimepiride, meprobamate, oxaprozin, paricalcitol, ranitidine, tizanidine and zoledronic acid. Plaintiff alleges that the
Trade Practices Act and Texas Free Enterprise and Antitrust Act and asserts claims of unjust enrichment and civil conspiracy. The Complaint
Company’s U.S. subsidiary was part of a larger “overarching conspiracy” with all other manufacturers named as to all of the drugs named
seeks injunctive relief, recovery of treble damages, punitive damages, disgorgement, and attorney's fees and costs against all defendants
in the complaint. The complaint also alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1. The complaint seeks injunctive
on a joint and several basis. The Company denies any wrongdoing and intends to vigorously defend against these claims.
relief, recovery of treble damages, and attorney’s fees and costs against all defendants on a joint and several basis. The Company denies any
q) Pennsylvania Court of Common Pleas Praecipe For a Writ of Summons Filed by 7 End Payor Entities consisting of Blue Cross Blue wrongdoing and intends to vigorously defend against these claims.
Shield entities and other health insurance w) Antitrust Complaint Filed by CVS Pharmacy Inc.:
companies: On 6 May 2020, a Praecipe For a Writ of Summons for a tort action was filed in the Pennsylvania Court of Common Pleas of On 15 December 2020, CVS Pharmacy, Inc., filed a complaint against the Company’s U.S. subsidiary and fifty-seven other defendants, involving
Philadelphia County, First Judicial District of Pennsylvania, Civil Trial Division, by 7 Blue Cross Blue Shield entities and other health insurance a total of four hundred four generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with respect
companies, against the Company’s U.S. subsidiary and 69 other defendants (consisting of 51 other pharmaceutical companies and 17 to these drugs. CVS Pharmacy asserts claims on its own behalf and as assignee of Cardinal Health and McKesson for drugs that Cardinal
individuals). These 7 plaintiffs had been previously encompassed by the End Payor Plaintiff class actions in the MDL-2724. Only a Praecipe Health and McKesson sold to CVS Pharmacy, Inc. The Company’s U.S. subsidiary is specifically named with respect to seven drugs:
of Writ of Summons has been filed. No complaint has been filed and, therefore, the potential claims have not been asserted or delineated in ciproNoxacin ER, glimepiride, meprobamate, oxaprozin, pravastatin, tizanidine and zoledronic acid. Plaintiff alleges that the Company’s U.S.
any manner, including what drugs any such claims may relate to. A complaint may, at some point, be filed encompassing the claims asserted subsidiary was part of a larger “overarching conspiracy” with all other manufacturers named as to all of the drugs named in the complaint.
by the End Payor Plaintiff class actions in the MDL-2724 actions. It is anticipated that this action will be placed in Deferred Status Pending The complaint also alleges violations of Section 1 of the Sherman Act, 15 U.S.C. §1. The complaint seeks injunctive relief, recovery of treble
Further Developments in the related MDL-2724 case. Because no Complaint has been filed setting forth any claims, and because it is expected damages, and attorney’s fees and costs against all defendants on a joint and several basis. The Company denies any wrongdoing and intends to
that the action will be placed into Deferred Status, no response is required by the Company’s subsidiary at this time. vigorously defend against these claims.
r) Antitrust Case Filed by Cigna Corp.: x) Antitrust Complaint Filed by Various Counties, Cities and Insurance Companies:
On 9 June 2020, Cigna Corp. filed a complaint against the Company’s U.S. subsidiary and forty-one other defendants, involving a total of On 15 December 2020, a Complaint was filed in the Supreme Court of the State of New York, Suffolk County, by a group of 22 plaintiffs against
one hundred forty generic drugs, alleging an “overarching conspiracy” to fix prices and to rig bids and allocate customers with respect to these the Company and 55 other defendants. Plaintiffs include 14 New York Counties (Albany, Cattaraugus, Chemung, Chenango, Columbia, Erie,
drugs. On 15 December 2020, Cigna Corp. filed an Amended Complaint against a total of forty-two defendants encompassing a total of two Essex, Livingston, Monroe, Oneida, Onondaga, Otsego and Schuyler), the Town of Amherst, New York, the City of Poughkeepsie, New
hundred and thirty-nine drugs. In the Amended Complaint, the Company’s U.S. subsidiary is specifically named with respect to twelve York, the City of Mobile, Alabama, the Counties of Osceola, Florida, and Shelby, Tennessee, and three insurance companies (Magnacare
drugs: allopurinol, ciproNoxacin HCL, divalproex ER, Nuconazole, glimepiride, meprobamate, oxaprozine, paricalcitol, pravastatin, Insurance, Mebco and WCA Group Health Trust). The case has been removed to the United States District Court for the Eastern District of
ranitidine, tizanidine and zoledronic acid. Plaintiffs allege that the Company’s U.S. subsidiary (as well as all other manufacturers named) were New York and is in the process of being transferred to, and consolidated with, the MDL-2724 litigation. The Complaint alleges an overarching
part of a larger “overarching conspiracy” as to all of the drugs named in the complaint. The complaint also alleges violations of Sections 1 and 2 conspiracy to fix prices and allocate markets for 294 generic drugs. Of the 294 drugs, DRL is specifically named with respect to 14 drugs:
of the Sherman Act, 15 U.S.C. §1 and §2, and violations of thirty-one States’ antitrust laws and twenty-nine States’ consumer protection Allopurinol, CiproNoxacin, Divalproex, Glimepiride, Glyburide Metformin, Isotretinoin, Lamotrigine, Meprobamate, Metoprolol
statutes, and asserts claims of unjust enrichment. The complaint seeks injunctive relief, recovery of treble damages, punitive damages, Succinate, Oxaprozin, Paricalcitol, Tizanidine, Valganciclovir and Zoledronic Acid. The Complaint alleges violations of Sections 1 and 2 of the
and attorney’s fees and costs against all defendants on a joint and several basis. The Company denies any wrongdoing and intends to Sherman Act, as well as violations of the Antitrust Statutes of Alabama, Florida, New York and Tennessee and Unjust Enrichment claims
vigorously defend against these claims. under the laws of Alabama, Florida, New York and Tennessee. The complaint seeks injunctive relief, recovery of treble damages, and
attorney’s fees and costs against all defendants on a joint and several basis. The Company denies any wrongdoing and intends to vigorously
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
defend against these claims.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
(iv)Securities Class Action Litigation
Note on Antitrust Complaints On 25 August 2017, a securities class action lawsuit was filed against the Company, its Chief Executive Officer and its Chief Financial Officer in
The Company believes that the aforesaid asserted claims in subsections a) though x) above are without merit and intends to vigorously defend the United States District Court for the District of New Jersey. The Company’s Co-Chairman, its Chief Operating Officer, and Dr. Reddy’s
itself against the allegations. Also, any liability that may arise on account of these claims is unascertainable. Accordingly, no provision was made Laboratories, Inc., were also subsequently named as defendants in the case. The operative complaint alleges that the Company made
in these consolidated financial statements of the Company. false or misleading statements or omissions in its public filings, in violation of U.S. federal securities laws, and that the Company’s share
Class Action under the Canadian Competition Act filed in Federal Court in Toronto, Canada price dropped and its investors were affected. On 9 May 2018, the Company and other defendants filed a motion to dismiss the complaint in
On 3 June 2020, a Class Action Statement of Claim was filed by an individual consumer in Federal Court in Toronto, Canada, against the the United States District Court for the District of New Jersey.
Company’s U.S. and Canadian subsidiaries and 52 other generic drug companies. The Statement of Claim alleges an industry-wide, overarching On 25 June 2018, the plaintiffs filed an opposition to the motion to dismiss and, on 25 July 2018, a further reply in support of the motion to
conspiracy to violate Sections 45 and 46 of the Canadian Competition Act by conspiring to allocate the market, fix prices, and maintain dismiss was filed by the Company. In August 2018, oral argument on the motion to dismiss was heard by the Court.
the supply of generic drugs in Canada. The action is brought on behalf of a class of all persons, from 1 January 2012 to the present, who
purchased generic drugs in the private sector. The Statement of Claim states that it seeks damages against all defendants on a joint and On 21 March 2019, the District Court issued its decision granting in part and denying in part the motion to dismiss. Pursuant to that decision, the
several basis, attorney’s fees and costs of investigation and prosecution. An Amended Statement of Claim was served on the Company’s U.S. Court dismissed the plaintiffs claims with respect to seventeen out of the twenty two alleged misstatements and omissions.
and Canadian subsidiaries on 15 January 2021 and adds an additional 20 generic drug companies. On 15 May 2020, Dr. Reddy’s Laboratories Limited, Dr. Reddy’s Laboratories, Inc., and certain of the Company’s current or former directors and
The Amended Statement of Claim also removes the identification of defendant companies with conspiracy allegations regarding specific generic officers have entered into a Stipulation and Agreement of Settlement (the “Stipulation”) with lead plaintiff the Public Employees’
drugs and alleges a conspiracy to allocate the North America Market as to all generic drugs in Canada. Retirement System of Mississippi in the putative securities class action filed against the defendants in the United States District Court for
the District of New Jersey. As consideration for the settlement of the class action, the Company has agreed to pay US$9 million.
The Company believes that the asserted claims are without merit and intends to vigorously defend itself against the allegations. Any liability
that may arise on account of this claim is unascertainable. Accordingly, no provision was made in these consolidated financial statements The settlement is subject to the approval of the court and may be terminated prior to court approval pursuant to the grounds for termination
of the Company. set forth in the Stipulation. Subject to the terms of the Stipulation, in exchange for the settlement consideration, lead plaintiff and members of
the settlement class who do not opt-out of this settlement would release, among other things, the claims that were asserted, or that they could
(ii) Civil litigation with Mezzion have asserted, in this class action.
On 13 January 2017, Mezzion Pharma Co. Ltd. and Mezzion International LLC (collectively, “Mezzion”) filed a complaint in the New Jersey
Superior Court against the Company and its wholly owned subsidiary in the United States. The complaint pertains to the production and supply In entering into the settlement, the defendants do not admit, and explicitly deny, any liability or wrongdoing of any kind.
of the active pharmaceutical ingredient (“API”) for udenafil (a patented compound) and an udenafil finished dosage product during a period Subject to the terms of the Stipulation, the settlement resolves the remainder of the litigation.
from calendar years 2007 to 2015. Mezzion alleges that the Company failed to comply with the U.S. FDA’s current Good Manufacturing Practices
(“cGMP”) at the time of manufacture of the API and finished dosage forms of udenafil and, consequently, that this resulted in a delay in the As the Company is adequately insured with respect to the aforesaid liability, the settlement did not have any impact on the Company’s
filing of a NDA for the product by Mezzion. The Company filed a motion to dismiss Mezzion’s complaint on the technical grounds that the consolidated statement of profit and loss for the year ended 31 March 2020.
Court lacks jurisdiction over the Company. In January 2018, the Court denied the Company’s motion to dismiss the complaint on the The amount payable to the plaintiffs on account of the settlement and the corresponding receivable from the insurer have been presented
jurisdictional matter. The Company’s interlocutory appeal of said denial was also denied. The case is continuing in pretrial discovery. under “other current financial assets” and “other current financial liabilities”, respectively, in the consolidated balance sheet of the
The Company denies any wrongdoing or liability in this regard, and intends to vigorously defend against the claims asserted in Mezzion’s Company as at 31 March 2020.
complaint. Any liability that may arise on account of this claim is unascertainable. Accordingly, no provision was made in the consolidated On 23 December 2020, the court issued a final order and judgement approving the settlement. Pursuant to the settlement/court order, the
financial statements of the Company. escrow was funded on 4 January 2021. The effective date of the settlement occurred on 1 February 2021, upon transfer of the settlement fund
(iii) Civil Litigation and Arbitration with Hatchtech Pty Limited balance into the final escrow account. As the transfer of funds to the final escrow account constitutes settlement of liability, the amount of
On 7 September 2015, the Company’s Swiss subsidiary, Dr. Reddy’s Laboratories, S.A., entered into an Asset Purchase Agreement (“APA”) with liability has been derecognised during the three months ended 31 March 2021.
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Hatchtech Pty Limited (“Hatchtech”). Pursuant to the APA, the Company’s subsidiary acquired from Hatchtech the patented product Xeglyze , a (v) Internal Investigation
topical lousicidal lotion for the treatment of head lice, and all rights in the product. The APA provides that the Company would seek to The Company has commenced a detailed investigation into an anonymous complaint. The complaint alleges that healthcare professionals
obtain New Drug Application (“NDA”) approval from the U.S. FDA, and would then commercialize the product in the United States. The APA in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of U.S.
specifies certain milestone payments to be paid by the Company’s Swiss subsidiary to Hatchtech, including a US$ 20 million NDA approval anti-corruption laws, specifically the US Foreign Corrupt Practices Act. A U.S. Law firm is conducting the investigation at the instruction of
milestone payment, a US$ 25 million ovicidal label approval milestone payment, and certain net sales milestone payments. a committee of the Company’s Board of Directors. The investigation is ongoing. The Company has disclosed the matter to the US Department of
On 24 July 2020, the Company received the NDA approval from the US FDA for the Xeglyze product.
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Justice, Securities and Exchange Commission and Securities Exchange Board of India. While the matter may result in government enforcement
actions against the Company in the United States and/or foreign jurisdictions, which could lead to civil and criminal sanctions under relevant
On 25 September 2020, the Company’s Swiss subsidiary filed an action in Delaware Chancery Court against Hatchtech to rescind the APA laws, the probability of such action and the outcome are not reasonably ascertainable at this time.
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based upon claims of fraud, negligent misrepresentations and mutual mistake in connection with the acquisition of the product Xeglyze , which
was dismissed as being untimely under the Delaware statute of limitations. (vi)Other matters
Civil Investigative Demand from the Office of the Attorney General� State of Te�as
On 8 October 2020, Hatchtech filed an arbitration demand against the Swiss Subsidiary before the American Arbitration Association On or about 10 November 2014, Dr. Reddy’s Laboratories, Inc., one of the Company’s subsidiaries in the United States, received a Civil
(“AAA”), International Center for Dispute Resolution (“ICDR”), in New York City, claiming that it was owed US$ 20 million for the NDA approval Investigative Demand (“CID”) from the Office of the Attorney General, State of Texas (the “Texas AG”) requesting certain information,
milestone and US$ 25 million for the ovicidal label approval milestone. documents and data regarding sales and price reporting in the U.S. marketplace of certain products for the period of time between 1 January
On 25 January 2021, the Company’s Swiss subsidiary filed a Writ of Summons and Statement of Claim in Victoria at Melbourne, Australia, 1995 and the date of the CID. The Company responded to all of the Texas AG’s requests to date.
against Hatchtech (as a nominal party), certain of its officers and a principal shareholder, alleging misrepresentations in connection with the Subpoena duces tecum from the Office of the Attorney General� California
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acquisition of the Xeglyze product and seeking damages and other relief. On 3 November 2014, Dr. Reddy’s Laboratories, Inc. received a subpoena duces tecum to appear before the Office of the Attorney
Based on its best estimate, the Company had recorded a provision for potential liability of US$ 20 million relating to the AAA-ICDR General, California (the “California AG”) and produce records and documents relating to the pricing of certain products. A set of five
arbitration filed by Hatchtech and believed that the likelihood of any further liability that may arise pursuant to that arbitration to be not interrogatories related to pricing practices was served as well. On 18 July 2016, the California AG sent a letter to inform Dr. Reddy’s
probable. Laboratories, Inc. that, in light of the information which had been provided, no further information would be requested at such time in response
to this subpoena.
On 14 June 2021, the Company received the arbitration decision and award issued by the AAA-ICDR in favour of Hatchtech in an amount
of US$ 46.25 million towards milestone payments, interest and fees. Subpoenas from the Antitrust Division of the U.S. Department of Justice (“DOJ”) and the office of the Attorney General for the State of
Connecticut On 6 July 2016 and 7 August 2016, Dr. Reddy’s Laboratories, Inc. received subpoenas from the DOJ (Anti-trust Division) and the
As this constitutes an adjusting subsequent event, the consolidated financial statements for the year ended 31 March 2021 were adjusted to office of the Attorney General for the State of Connecticut, respectively, seeking information relating to the marketing, pricing and sale of
reNect the impact of this event by recognising the balance amount of US$ 26.25 million in the consolidated statement of profit and loss. certain of our generic products and any communications with competitors about such products. On 15 May 2018, another subpoena
Of the total amount of US$ 46.25 million awarded to Hatchtech, the amount of US$ 45 million (` 3,291) was recognised in the was served on Dr. Reddy’s Laboratories, Inc. by the DOJ (False Claims Division) seeking similar information. The Company has been
consolidated statement of profit and loss under the heading “Impairment of non-current assets” and the balance of US$ 1.25 million (` 91) was cooperating, and intends to continue to fully cooperate, with these inquiries.
recognised under the heading, “Selling and general expenses”.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
The Company appealed the APP Control Board orders to the Andhra Pradesh Pollution Appellate Board (the “APP Appellate Board”). The APP
Civil Investigative Demand from the Civil Division of the DOJ Appellate Board, on the basis of a report of a fact-finding advisory committee, recommended to the Andhra Pradesh Government to allow
On 15 May 2018, Dr. Reddy’s Laboratories, Inc. received a Civil Investigative Demand from the Civil Division of the DOJ, enquiring whether expansion of units fully equipped with Zero-Liquid Discharge (“ZLD”) facilities and otherwise found no fault with the Company (on certain
there have been any violations of the U.S. False Claims Act. This query arose from allegations that generic pharmaceutical manufacturers, conditions).
including us, have engaged in market allocation or price fixing agreements, or paid illegal remuneration, and caused false claims to be
submitted in violation of the U.S. False Claims Act. The Company has been cooperating, and intends to continue to fully cooperate with The APP Appellate Board’s decision was challenged by one of the petitioners that was pending in the National Green Tribunal, (the “NGT”), Delhi.
the DOJ in responding to the demand and cooperate with the investigation. Separately, the Andhra Pradesh Government, following recommendations of the APP Appellate Board, published a notification in July 2013 that
(vii) Environmental matters allowed expansion of production of all types of existing bulk drug and bulk drug intermediate manufacturing units subject to the installation of
ZLD facilities and the outcome of cases pending in the NGT. Importantly, the notification directed pollution load of industrial units to be
Land pollution
assessed at the point of discharge (if any) as opposed to the point of generation.
The Indian Council for Environmental Legal Action filed a writ in 1989 under Article 32 of the Constitution of India against the Union of India
and others in the Supreme Court of India for the safety of people living in the Patancheru and Bollaram areas of Medak district of the then In September 2013, the Ministry of Environment and Forests, based on the revised Comprehensive Environment Pollution Index, issued a
existing undivided state of Andhra Pradesh. The Company has been named in the list of polluting industries. In 1996, the Andhra Pradesh notification that re-imposed a moratorium on expansion of industries in certain areas where some of the Company’s manufacturing facilities are
District Judge proposed that the polluting industries compensate farmers in the Patancheru, Bollaram and Jeedimetla areas for discharging located. This notification overrides the Andhra Pradesh Government’s notification that conditionally permitted expansion.
e�uents which damaged the farmers’ agricultural land. The compensation was fixed at ` 0.0013 per acre for dry land and ` 0.0017 per
The appeals filed by Mr. K. Chidambaram against the Orders of the Appellate Authority, Andhra Pradesh are disposed off as the same do
acre for wet land. Accordingly, the Company has paid a total compensation of ` 3. The Andhra Pradesh High Court disposed of the writ petition
not survive for consideration as the G.O. based on which the then APPCB had passed its order which was subject matter of appeal before the
on 12 February 2013 and transferred the case to the National Green Tribunal (“NGT”), Chennai, India. The interim orders passed in the writ
Appellate Authority has itself been amended vide order 25 July 2013. However, the NGT, Delhi has passed a direction for the issue of
petitions will continue until the matter is decided by the NGT. The NGT has, through its order dated 30 October 2015, constituted a Fact Finding
pollution to be considered by the Joint Committee of Central Pollution Control Board, National Environmental Engineering Institute (“NEERI”),
Committee.
and the Telangana State Pollution Control Board to ascertain the present status of pollution issues in the Medak, Ranga Reddy,
The NGT has also permitted the alleged polluting industries to appoint a person on their behalf in the Fact Finding Committee. However, Mahaboobnagar and Nalagonda districts in the State of Telangana particularly in the Patancheru and Bollaram industrial clusters and file a
the Company, along with the alleged polluting industries, has challenged the constitution and composition of the Fact Finding Committee. The report within three months before the NGT, Delhi.
NGT has directed that until all the applications challenging the constitution and composition of the Fact Finding Committee are disposed of, the
(viii)Fuel Surcharge Adjustments
Fact Finding Committee shall not commence its operation.
The Andhra Pradesh Electricity Regulatory Commission (the “APERC”) passed various orders approving the levy of Fuel Surcharge Adjustment
The NGT, Chennai in a judgement dated 24 October 2017, disposed of the matter. The Bulk Drug Manufacturers Association of India (“BDMAI”), (“FSA”) charges for the period from 1 April 2008 to 31 March 2013 by power distribution companies from all the consumers of electricity in the
in which the Company is a member, subsequently filed a review petition against the judgement on various aspects. then existing undivided state of Andhra Pradesh, India where the Company’s headquarters and principal manufacturing facilities are located.
Separate writ petitions filed by the Company for various periods, challenging and questioning the validity and legality of this levy of FSA charges
The NGT, Delhi, in a judgement dated 16 November 2017 in another case in which the Company is not a party, stated that the moratorium
by the APERC, are pending before the High Court of Andhra Pradesh and the Supreme Court of India.
imposed in the Patancheru and Bollaram areas shall continue until the Ministry of Environment, Forest and Climate Change passes an order
keeping in view the needs of the environment and public health. The Company filed an appeal challenging this judgement. The total amount approved by APERC for collection by the power distribution companies from the Company in respect of FSA charges for
the period from 1 April 2008 to 31 March 2013 is ` 482. After taking into account all of the available information and legal provisions, the
The High Court of Hyderabad heard the Company’s appeal challenging this judgement in July 2018 and directed the respondents to file
Company has recorded ` 219 as the potential liability towards FSA charges. However, the Company has paid, under protest, an amount of ` 354
their response within a period of four weeks. During the three months ended 30 September 2018, the respondents filed counter affidavits and
as demanded by the power distribution companies as part of monthly electricity bills. The Company remains exposed to additional
the matter has now been adjourned for final hearing.
financial liability should the orders passed by the APERC be upheld by the Courts.
The appeal came up for hearing before the High Court of Hyderabad on 25 October 2018 and has been adjourned for further hearing.
During the three months ended 30 June 2016, the Supreme Court of India dismissed the Special Leave Petition filed by the Company in this
On 24 April 2019, based upon the judgement of the NGT, Chennai dated 24 October 2017, the Government of Telangana has issued GO.Ms. regard for the period from 1 April 2012 to 31 March 2013. As a result, for the quarter ended 30 June 2016, the Company recognised an
No. 24 of 2019 that allows for expansion of production of all kinds of existing industrial units located within the stretch of Patancheru – expenditure of ` 55 (by de-recognising the payments under protest) representing the FSA charges for the period from 1 April 2012 to 31 March
Bollaram upon depositing an amount equivalent to 1% of the annual turnover of the respective unit for the concluded fiscal year i.e., 31 March 2013.
2019. Accordingly, the Company made a provision of ` 29.4, representing the probable cost of expansion, during the year ended 31 March
(ix) Indirect taxes related matters
2019.
Value Added Tax (“VAT”) matter
During the three months ended 30 September 2019, the Telangana State Pollution Control Board (“TSPCB”) has issued Operational Guidelines The Company has received various demand notices from the Government of Telangana’s Commercial Taxes Department objecting to the
basis the NGT, Chennai Order dated 24 October 2017, G.O.Ms. No. 24 dated 24 April 2019 and G.O.Ms. No. 31 dated 24 May 2019 and sought Company’s methodology of calculation of VAT input credit. The below table shows the details of each of such demand notice, the amount
to recover retrospectively an amount of 0.5% of the annual turnover from the fiscal years 2016-2017 to 2018-2019 for all the industrial units demanded and the current status of the Company’s responsive actions.
situated in Patancheru and Bollaram for the purposes of restoration of the said effected area. The Company has four industrial units situated in
Patancheru and Bollaram. The Consent For Operation (“CFO”) for change of product mix application filed by one of the industrial unit of the PERIOD COVERED UNDER THE NOTICE AMOUNT DEMANDED STATUS
Company has been recommended for issuance of CFO with change of product mix only upon payment of 0.5% of the annual turnover from the
The State VAT Appellate Tribunal has remanded the matter to
fiscal years 2016-2017 to 2018-2019 to the TSPCB. The Company intends to vigorously defend itself against the Operational Guidelines.
In November 2019, demand notices were issued by the TSPCB for collection of Corpus Fund of 0.5 % as remediation fee on the previous year
turnover as per Operational Guidelines dated 3 August 2019 issued by TSPCB under the guise of G.O.Ms No. 24 dated 24 April 2019 and G.O.Ms April 2006 to March 2009 ` 66 plus 10% penalty the assessing authority to re-compute the eligibility and
No. 31 dated 24 May 2019 and basis the judgement of NGT, Chennai dated 24 October 2017 for the fiscal years 2015-2016 to 2018-2019 penalty orders are set-aside. The Company filed appeal
received by CTO-1, CTO-2 and CTO-3 of the Company. against the same with the High Court, Telangana.
On 22 November 2019, The Hon’ble High Court of Judicature at Hyderabad issued an Interim Order which stayed the demand on the condition
The Company has filed an appeal before the Sales Tax
that the Company deposit ` 60 as the remediation fee for the fiscal year 2018-2019 payable in the fiscal year 2019-2020. The deposit of ` 60
was made and the Interim Order is continuing. The matter was adjourned to 22 April 2020 but has been delayed as a result of the closure of Appellate Tribunal - The matter was remanded to the
April 2009 to March 2011 ` 59 plus 10% penalty
the Court due to the COVID-19 lockdown, and a new date has not yet been rescheduled. original adjudicating authority with a direction to re-
calculate the eligibility for the year ended 31 March 2010.
The Company believes that any additional liability that might arise in this regard is not probable. Accordingly, no provision relating to these
claims has been made in the financial statements. The Appellate Deputy Commissioner issued an order partially
April 2011 to March 2014 ` 27 plus 10% penalty
Water pollution and air pollution in favour of the Company.
During the year ended 31 March 2012, the Company, along with 14 other companies, received a notice from the Andhra Pradesh Pollution
Control Board (the “APP Control Board”) to show cause as to why action should not be initiated against them for violations under the Indian
Water Pollution
Act and the Indian Air Pollution Act. Furthermore, the APP Control Board issued orders to the Company to (i) stop production of all new products at the Company’s manufacturing facilities in Hyderabad, India without obtaining a “Consent for Establishment”, (ii) cease manufacturing
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
products at such facilities in excess of certain quantities specified by the APP Control Board and (iii) furnish a bank guarantee to assure The Company has recorded a provision of ` 51 as on 31 March 2021, and believes that the likelihood of any further liability that may arise on
account
compliance with the APP Control Board’s orders.
of the ongoing litigation is not probable.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.34 CAPITAL MANAGEMENT
2.32 CONTINGENT LIABILITIES AND COMMITMENTS (CONTINUED)
For the purposes of the Company's capital management, capital includes issued capital and all other equity reserves. The primary objective of
Notices from Commissioner of Goods and Services Tax, India the Company's capital management is to maximise shareholder value. The Company manages it's capital structure and makes adjustments in
In the months of November 2019 and January 2020, the Commissioner of Goods and Services Tax, India issued notices to the Company the light of changes in economic environment and the requirements of the financial covenants. The Company monitors capital using gearing
alleging that the Company has irregularly availed input tax credit of ` 307. The Company has received order dropping the demand. ratio, which is total debt divided by total capital plus debt. The capital gearing ratio as on 31 March 2021 and 31 March 2020 was 15 % and
12%, respectively.
The Company has recorded a provision of ` 31 as on 31 March 2021 and believes that the likelihood of any further liability that may arise on
account of the allegedly inappropriate claims to credits is not probable. Accordingly, no further provision was made in these consolidated
financial statements.
2.35 IMPACT OF COVID – 19
Others
Additionally, the Company is in receipt of various demand notices from the Indian Sales and Service Tax authorities. The disputed amount is ` The Company considered the uncertainty relating to the COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible
474. The Company has responded to such demand notices and believes that the chances of any liability arising from such notices are less than assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of
probable. Accordingly, no provision is made in these consolidated financial statements as of 31 March 2021. approval of these consolidated financial statements. The Company based on its judgements, estimates and assumptions including sensitivity
(x)Others analysis, expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets.
Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/or regulatory inspections, inquiries, investigations The Company will continue to closely monitor any material changes to future economic conditions.
and proceedings, including patent and commercial matters that arise from time to time in the ordinary course of business. Except as discussed
above, the Company does not believe that there are any such contingent liabilities that are expected to have any material adverse effect on its
consolidated financial statements. 2.36 OTHER UPDATES

B. COMMITMENTS: A. Update on Cyber Incident

AS AT 31 MARCH 2021 AS AT 31 MARCH 2020 On 22 October 2020, the Company experienced a cybersecurity incident related to ransom-ware. The Company employed two leading
PARTICULARS cyber security incident response firms to assist with the investigation process. The incident was contained in a timely fashion and an enterprise-
wide remediation was undertaken to ensure all traces of infection are completely removed from the network. Since then, the Company
Estimated amounts of contracts remaining to be executed
on capital account and not provided for (net of advances) 9,841 4,888 has strengthened a series of technical controls to augment the current cyber security posture and has also focused on implementing
significant improvements to its cyber and data security systems to safeguard from such risks in the future
B. Update on the warning letter from the U.S. FDA
2.33 COLLABORATION LICENSE AND OPTION AGREEMENT WITH CURIS, INC The Company received a warning letter dated 5 November 2015 from the U.S. FDA relating to current Good Manufacturing Practices (“cGMPs”)
deviations at its active pharmaceutical ingredient (“API”) manufacturing facilities at Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as
On 18 January 2015, Aurigene Discovery Technologies Limited ("ADTL"), a wholly-owned subsidiary of the parent company, entered into well as violations at its oncology formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. The contents of the warning
a Collaboration, License and Option Agreement (as amended, the "Collaboration Agreement") with Curis, Inc. ("Curis") to discover, develop and letter emanated from Form 483 observations that followed inspections of these sites by the U.S. FDA in November 2014, January 2015
commercialise small molecule antagonists for immuno-oncology and precision oncology targets. and February-March 2015.
Under the Collaboration Agreement, ADTL has the responsibility for conducting all discovery and preclinical activities, including Tabulated below are the further updates with respect to the aforementioned sites:
Investigational New Drug ("IND") enabling studies and providing Phase 1 clinical trial supply, and Curis is responsible for all clinical
development, regulatory and commercialisation efforts worldwide, excluding India and Russia. The Collaboration Agreement provides that MONTH AND YEAR UPDATE
the parties will collaborate exclusively in immuno-oncology for an initial period of approximately two years, with the option for Curis to extend The U.S. FDA completed the re-inspection of the aforementioned manufacturing facilities. During the
the broad immuno-oncology
exclusivity. February, March re-inspections, the U.S. FDA issued three observations with respect to the API manufacturing facility at
Revenues under the Collaboration Agreement consist of upfront consideration (including shares of Curis common stock) and the development and April 2017 Miryalaguda, two observations with respect to the API manufacturing facility at Srikakulam and
and commercial milestone payments (including royalties) which are deferred and recognised as revenue over the period for which ADTL has thirteen observations with respect to the Company’s oncology formulation manufacturing facility at
continuing performance obligations. Duvvada.
June 2017
As a partial consideration for the collaboration, the following shares of common stock of Curis were issued to ADTL: The U.S. FDA issued an Establishment Inspection Report (“EIR”) which indicated that the inspection of the
Company's API manufacturing facility at Miryalaguda was successfully closed.
PARTICULARS NUMBER OF SHARES FAIR VALUE November 2017
The Company received EIRs from the U.S. FDA for the oncology manufacturing facility at Duvvada
1�452 which indicated that the inspection status of this facility remained unchanged.
Pursuant to the collaboration agreement dated 18 January 2015 17�1 million
US$ 23.5 million) February 2018
The Company received EIRs from the U.S. FDA for API manufacturing facility at Srikakulam which indicated
that the inspection status of this facility remained unchanged.

Pursuant to an amendment to collaboration agreement dated 7 September 2015

10�2 million 1�247 The Company requested the U.S. FDA to schedule a re-inspection of the oncology formulation manufacturing
(Common stock in lieu of receiving up to US$ 24.5 million of milestone and other payments) June 2018
(US$ 18.8 million) facility at Duvvada.

October 2018 The re-inspection was completed for the oncology formulation manufacturing facility at Duvvada and the U.S.
The Company has classified all of the shares of Curis common stock received, as a partial consideration for the collaboration, as an investment FDA issued a Form 483 with eight observations.
in equity instruments measured at FVTOCI. In May 2018, Curis completed a 1-for-5 reverse stock split of its common stock. After giving effect
to such stock split, the total number of Curis equity shares held by the Company is 5.47 million. The Company responded to the observations identified by the U.S. FDA for the oncology formulation
November 2018
manufacturing facility at Duvvada in October 2018.
AS OF 31 MARCH 2021 The U.S. FDA issued an EIR indicating successful closure of the audit of the oncology formulation
PARTICULARS February 2019
COSTUNREALISED GAINFAIR VALUE manufacturing facility at Duvvada.
2�699 1�824
Received on 18 January 2015 1�452 1�382
Received on 7 September 2015 1�247 442
Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
4�523 to ufacturing facility at Srikakulam, subsequent to the receipt of an EIR in February 2018, the Company was asked, in October 2018, to carry out
2�834 With the certain detailed investigations and analyses and the Company submitted the results of the investigations and analyses. As part of the review of
resp API the response by the U.S. FDA, certain additional follow on queries were received by the Company, and the Company responded to all
1�689 ect man such queries in January 2019.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-

NOTES TO THE CONSOLIDATED FINANCIAL

STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and per share data)
(All amounts in Indian Rupees millions, except share data and per share data)
2.37 THE CODE ON SOCIAL SECURITY, 2020
2.36 OTHER UPDATES (CONTINUED)

In February 2019, the Company received certain other follow on questions from the U.S. FDA and the Company responded to these questions in India’s Code on Social Security, 2020, which aims to consolidate, codify and revise certain existing social security laws, received
March 2019. The U.S. FDA completed the audit on 28 January 2020. The Company was issued a Form 483 with 5 observations and responded Presidential assent in September 2020 and has been published in the Gazette of India. However, the related final rules have not yet been
to the observations in February 2020. In May 2020, the Company received an EIR from the U.S. FDA, for the above-referred facility, indicating issued and the date on which this Code will come into effect has not been announced. The Company will assess the impact of this Code and the
closure of the audit and classifying the inspection of this facility as Voluntary Action Indicated (“VAI”). With this, all facilities under warning rules thereunder when they come into effect.
letter are now determined as VAI.
Inspection of other facilities 2.38 SECONDARY LISTING OF THE COMPANY'S ADR ON NSE IFSC LIMITED
Tabulated below are the details of the U.S. FDA inspections carried out at other facilities of the
Company: The Company completed the secondary listing of its American Depository Receipts (“ADRs”) on NSE IFSC Limited under the symbol 'DRREDDY'
on 9 December 2020. NSE IFSC Limited is a recognised international stock exchange established in the International Financial Services
Located in India
Centre (“IFSC”) at Gujarat International Finance Tec (“GIFT”) City in Gujarat, India. IFSC is one of the permissible jurisdictions where
Depository Receipts
MONTH AND YEAR UNIT DETAILS OF OBSERVATIONS
June 2018 can be listed. This listing will provide a secondary platform (other than NYSE Inc.) to overseas investors for trading in the Company's ADRs. This
API Srikakulam Plant (SEZ) No observations were noted. An EIR indicating the closure of audit for this facility
was issued by the U.S. FDA in August 2018. is a secondary listing of ADRs that are currently issued by J.P. Morgan Chase Bank N.A. under its ADR Deposit Agreement with the
November 2018 Formulations Srikakulam No observations were noted. An EIR indicating the closure of audit for this facility Company, and no further capital raising or issuance of new securities is involved.
Plant (SEZ) Unit II was issued by the U.S. FDA in February 2019.
January 2019 Four observations were noted. The Company responded to the observations and
Formulations Srikakulam
an EIR indicating the closure of audit for this facility was issued by the U.S. FDA in
2.39 MERGER OF DR. REDDY'S HOLDINGS LIMITED INTO DR. REDDY'S LABORATORIES LIMITED
Plant (SEZ) Unit I
April 2019.
January 2019 The Board of Directors, at its meeting held on 29 July 2019, has approved the amalgamation (the “Scheme”) of Dr. Reddy's Holdings Limited
One observation was noted. The Company responded to the observation.
API manufacturing Plant at (“DRHL”), an entity held by the Promoter Group, which holds 24.88% of Dr. Reddy's Laboratories Limited (the “Company”) into the Company.
In May 2019, an EIR was issued by the U.S. FDA indicating the closure of audit
Miryalaguda, Nalgonda This is subject to the approval of shareholders, stock exchanges, the National Company Law Tribunal and other relevant regulators.
and the inspection classification of the facility was determined as VAI.
January 2019 Eleven observations were noted. The Company responded to the observations in The Scheme will lead to simplification of the shareholding structure and reduction of shareholding tiers.
Formulations manufacturing
facility at Bachupally, January 2019.
In April 2019, an EIR was issued by the U.S. FDA indicating the closure of audit The Promoter Group cumulatively would continue to hold the same number of shares in the Company, pre- and post the amalgamation. All costs,
Hyderabad
and the inspection classification of the facility was determined as VAI. charges and expenses relating to the Scheme will be borne out of the surplus assets of DRHL. Further, any expense, if exceeding the surplus
assets
March 2019 Aurigene Discovery No observations noted. of DRHL, will be borne directly by the Promoters.
Technologies Limited, In June 2019, the Company received an EIR from the U.S. FDA indicating the The Scheme also provides that the Promoters of the Company will jointly and severally indemnify, defend and hold harmless the Company, its
Hyderabad closure of audit for this facility.
directors, employees, officers, representatives, or any other person authorised by the Company (excluding the Promoters) for any liability,
June 2019 Formulations manufacturing
Two observations were noted. The Company responded to the observations. claim, or demand, which may devolve upon the Company on account of this amalgamation.
plants, Duvvada {Vizag SEZ
In September 2019, an EIR was issued by the U.S. FDA indicating the closure of
plant 1 (FTO VII) and Vizag During year ended 31 March 2020, the scheme of amalgamation of Dr. Reddy's Holdings Limited with the Company was approved by the board
audit of these facilities.
SEZ plant 2(FTO IX)} of directors, members and unsecured creditors of the Company. The no-observation letters from the BSE Limited and National Stock Exchange
Five observations were noted during U.S. FDA inspection. The Company responded of India Limited were received on the basis of no comments received from Securities and Exchange Board of India (“SEBI”). The petition for
approval
July 2019 API Hyderabad plant 2, Bollaram, to the observations in August 2019. In April 2020, an EIR was issued by the U.S. FDA indicating the closure of the audit and the inspection classification of the facility was determined as VAI.
Hyderabad In October 2019, an EIR was issued by the U.S. FDA indicating the closure of
audit and the inspection classification of the facility was determined as VAI.
Eight observations were noted. The Company responded to the observations
Formulations manufacturing plants,
August 2019 in September 2019.
(Vizag SEZ plant 1), Duvvada,
In February 2020, an EIR was issued by the U.S. FDA indicating the closure of
Visakhapatnam (FTO VII)
audit and the inspection classification of the facility was determined as
VAI. No observations were noted.
August 2019 Formulations manufacturing facility at In October 2019, an EIR was issued by the U.S. FDA indicating the closure of
Shreveport, Louisiana, U.S.A the
audit and the inspection classification of the facility was determined as No
Action Initiated (“NAI”).
October 2019 API Srikakulam plant (SEZ), Andhra Four observations were noted. The Company responded to the observations in
Pradesh November 2019.
In May 2020, an EIR was issued by the U.S. FDA indicating the closure of the
February 2020 Formulations Srikakulam Plant (SEZ) audit. No observations were noted.
Unit I In May 2020, an EIR was issued by the U.S. FDA indicating the closure of the audit
and the inspection classification of the facility was determined as NAI.
February 2020 Formulations manufacturing facility at One observation was noted. The Company responded to the observation in March
Bachupally, Hyderabad (FTO Unit III) 2020. In May 2020, an EIR was issued by the U.S. FDA indicating the closure of
the audit and the inspection classification of the facility was determined as VAI.
Integrated Product Development
February 2020 No observation was noted.
Organization (IPDO) at Bachupally,
Hyderabad In May 2020, an EIR was issued by the U.S. FDA indicating the closure of the
audit and the inspection classification of the facility was determined as NAI.

March 2020 API manufacturing Plant at Three observations were noted. The Company responded to the observations
Miryalaguda, Nalgonda in March 2020.
 Dr. Reddy’s Laboratories Company Overview Statutory Reports Financial Annual Report 2020-
of the said Hon'ble NCLT reserved the Agreement (“BTA”) with Wockhardt Limited (“Wockhardt”) to acquire subject to certain closing conditions, such as approval from shareholders and lenders of Wockhardt and other requisite approvals under
scheme was issuance of an order pending its select divisions of its branded generics business in India and the territories applicable statutes. Hence, the transaction was not accounted for in the year ended 31 March 2020.
filed with the review and further analysis of the of Nepal, Sri Lanka, Bhutan and Maldives for a consideration of ` 18,500.
Hon'ble Due to the COVID-19 pandemic and the consequent government restrictions, there has been a reduction in the revenue from the sales of the
matter.
NCLT, The business consists of a portfolio of 62 brands in multiple therapy products forming part of the Business Undertaking during March and April 2020. Accordingly, through an amendment to the BTA, the Company
Hyderabad areas, such as respiratory, neurology, venous malformations, and Wockhardt agreed that the consideration shall now be upto `18,500, to be paid as per the following terms:
Bench. 2.40 BUSINESS dermatology, gastroenterology, pain and vaccines. This entire portfolio
a) an amount of ` 14,830 to be paid on the date of closing;
was to be transferred to the Company, along with related sales and
The hearings TRANSFER AGREEMENT marketing teams, the manufacturing plant located in Baddi, Himachal b) an amount of ` 670 to be deposited in an escrow account which shall be released subject to adjustments for, inter alia, net working capital,
on the WITH WOCKHARDT Pradesh and all plant employees (together the “Business Undertaking”). employee liabilities and certain other contractual and statutory liabilities;
petition took LIMITED The transaction involved 2,051 employees engaged in operations of
place on 20 c) an amount of ` 3,000 (the “Holdback Amount”) which shall be released as follows:
the acquired Business Undertaking.
April 2021, • If the revenue from sales of the products forming part of the Business Undertaking during the twelve (12) months post-closing exceeds
In February 2020, the Company
and the As of 31 March 2020, the acquisition of this Business Undertaking was `4,800, the Company will be required to pay to Wockhardt an amount equal to two (2) times the amount by which the revenue exceeds
signed a Business Transfer
No U.S. FDA audits were conducted during the year ended 31 March ` 4,800, subject to the maximum of the Holdback Amount.
2021.
Dr. Reddy’s Laboratories Limited Company OverviewStatutory ReportsFinancial Statements Annual Report 2020-21

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in Indian Rupees millions, except share data and per share data)

2.40 BUSINESS TRANSFER AGREEMENT WITH WOCKHARDT LIMITED (CONTINUED)

The acquisition is in line with the Company's strategic focus on India and has paved a path for accelerated growth and leadership in the
domestic Indian market. The Company believes that the acquired Business Undertaking offers to strengthen the Company’s pharmaceutical
portfolio and products in the Indian market.
The transaction was completed on 10 June 2020. EXTRACT OF AUDITED IFRS CONSOL
The Company has accounted for the transaction under Ind AS 103, “Business
Combinations”. As of 30 June 2020, the purchase price allocation was preliminary.
During the three months ended 30 September 2020, the Company completed the purchase price allocation. Tabulated below are the fair values of
the assets acquired, including goodwill, and liabilities assumed on the acquisition date:

PARTICULARS AMOUNT
Cash 14�990
Payment through Escrow account 564
Contingent consideration (Holdback Amount) 561
Total consideration 16�115
Assets acquired
Goodwill 530
Property, plant and equipment 373
Product related intangibles 14�888
Inventories 466
Other assets 245
Liabilities assumed
Employee benefits (Gratuity - ` 70 and compensated absences- ` 75) (145)
Refund liability (242)
Total net assets 16�115

The total goodwill of ` 530 consists largely of the synergies and economies of scale expected from the acquired business, together with the
value of the workforce acquired. The entire amount of goodwill is deductible for tax purposes. Acquisition related costs amounted to ` 60 and
were excluded from the consideration transferred and were recognised as expense under “Selling and other expenses” in the Statement of
profit or loss for the year ended 31 March 2021.
The fair value of the contingent consideration of ` 561 was estimated by applying the income approach. The fair value measurement is based
on significant inputs that are not observable in the market, which Ind AS 13, “Fair Value Measurement” refers to as Level 3 inputs. The
significant unobservable inputs in the valuation is the estimated sales forecast. During the three months ended 31 March 2021, the Company,
after taking into account the revenue of the products until twelve months post-closing (9 June 2021), re-measured the contingent consideration
to ` 420.
Consolidated Statements of Financial Position
268
The amount of revenue included in the consolidated statement of profit and loss for the year ended 31 March 2021 pertaining to the acquired
business since 10 June 2020 is ` 3,887.
Consolidated Income Statements
The acquired business has been integrated into the Company’s existing activities and it is not practicable to identify the impact on the Company
Consolidated Statements of Comprehensive
269 Income
profit in the year.

269
2.41 SUBSEQUENT EVENTS
There are no significant events that occurred after the balance sheet date.

As per our report of even date attached

for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Limited
for S.R. Batliboi & Associates LLP
Chartered Accountants
K Satish Reddy Chairman DIN: 00129701
ICAI Firm registration No.:
101049W/E300004 G V Prasad Co-Chairman & Managing Director DIN: 00057433
per S Balasubrahmanyam Erez Israeli Chief Executive Officer
Partner Parag Agarwal Chief Financial Officer
Membership No.: 53315 Sandeep Poddar Company Secretary

Place: Chennai Place: Hyderabad

Date: 14 May 2021 Date: 14 May 2021
 Dr. Reddy’s Laboratories Limited
Company Overview Statutory Reports Financial Statements Annual Report 2020-21

EXTRACT OF IFRS CONSOLIDATED FINANCIAL (All amounts in Indian Rupees millions, except share data and per share data)

STATEMENTS
We have adopted IFRS as issued by the International Accounting Standards Board (IASB) for preparing our financial statements for the purpose
of filings with the SEC. We have furnished all our interim financial reports of fiscal 2021 with the SEC which were prepared under IFRS. The
Annual
Report in Form 20-F will also be made available at the Company’s website. A hard copy of such Annual Report in Form 20-F will be made available
Revenues Cost 189�722 174�600 153�851
to the shareholders, free of charge, upon request. For details visit www.drreddys.com.
of revenues Gross 86�645 80�591 70�421
The extract of the consolidated financial statements prepared under IFRS has been provided hereunder profit 103�077 94�009 83�430
Selling, general and administrative expenses 54�650 50�129 48�680
(All amounts in Indian Rupees millions, except share data and per share data) Research and development expenses 16�541 15�410 15�607
Impairment of non-current assets 8�588 16�767 210
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Other income, net (982) (4�290) (1�955)
Total operating expenses 78�797 78�016 62�542
AS AT AS AT 24�280 15�993 20�888
PARTICULARS 31 MARCH 2021 31 MARCH 2020
Results from operating activities (A)
Finance income 2�623 2�461 2�280
Assets Finance expense (970) (983) (1�163)
Current assets Finance income, net (B) 1�653 1�478 1�117
Cash and cash equivalents 14�829 2�053 Share of profit of equity accounted investees, net of tax (C) 480 561 438
Other investments 19�744 23�687 Profit before tax ��A���B���C�� 26�413 18�032 22�443
Trade and other receivables 49�641 50�278 Tax expense/(benefit), net 9�175 (1�466) 3�648
Inventories 45�412 35�066 Profit for the year 17�238 19�498 18�795
Derivative financial instruments 1�218 1�105
Tax assets 2�745 4�379 Earnings per share:
Other current assets 14�509 13�802 Basic earnings per share of ` 5/- each 103�94 117�63 113�28
Total current assets before assets held for sale 148�098 130�370 Diluted earnings per share of ` 5/- each 103�65 117�40 113�09
Assets held for sale 151 -
Total current assets 148�249 130�370
Non-current assets
Property, plant and equipment 57�111 52�332 (All amounts in Indian Rupees millions, except share data and per share data)

Goodwill 4�568 3�994

Other intangible assets 35�648 27�659
Trade and other receivables 118 1�737
Investment in equity accounted investees 3�375 2�763
Other investments 4�958 328
Deferred tax assets 10�630 12�214
Other non-current assets 834 844
Total non-current assets 117�242 101�871
Total assets 265�491 232�241

Liabilities and Equity

Current liabilities
 Profit for the year 17�238 19�498 18�795
Other comprehensive income/(loss)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Items that will not be reclassified to the consolidated income statement�
Changes in the fair value of financial instruments 4�242 (469) (403)
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED Actuarial gains/(losses) on post-employment benefit obligations (216) 57 10
PARTICULARS 31 MARCH 2021 31 MARCH 2020 31 MARCH 2019 Tax impact on above items (220) (22) (414)
Total of items that will not be reclassified to the consolidated income statement 3�806 (434) (807)
Trade and other payables 23�744 16�659 Items that will be reclassified subsequently to the consolidated income statement�
Short-term borrowings 23�136 16�441 Changes in fair value of financial instruments 7 (7) -
Long-term borrowings, current portion 864 4�266 Foreign currency translation adjustments 706 311 (53)
Provisions 3�435 3�800 Foreign currency translation reserve re-classified to the income statement on
Tax liabilities 1�389 573 - - (113)
disposal of foreign operation
Derivative financial instruments 326 1�602
Effective portion of changes in fair value of cash Now hedges, net 1�123 (951) 180
Bank overdraft 9 91
Tax impact on above items (319) 232 (55)
Other current liabilities 30�488 29�382
Total current liabilities 83�391 72�814 Total of items that will be reclassified subsequently to the consolidated
1�517 (415) (41)
income statement
Non-current liabilities Other comprehensive income for the year, net of tax 5�323 �849� �848�
Long-term borrowings 6�299 1�304 Total comprehensive income for the year 22�561 18�649 17�947
Deferred tax liabilities 338 275
Provisions 58 54
Other non-current liabilities 2�343 2�806
Total non-current liabilities 9�038 4�439
Total liabilities 92�429 77�253
Equity
Share capital 832 831
Treasury shares (1�967) (1�006)
Share premium 8�887 8�495
Share-based payment reserve 1�461 1�233
Capital redemption reserve 173 173
Special economic zone re-investment reserve 1�326 -
Retained earnings 156�023 144�247
Other components of equity 6�327 1�015
Total equity 173�062 154�988
Total liabilities and equity 265�491 232�241
 Dr. Reddy’s Laboratories Not Annual Report 2020-

GLOSSARY NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 37th annual general meeting (AGM) of the members of Dr. Reddy’s Laboratories Limited (CIN: L85195TG1984PLC004507) will be held on Wednesday, July 28, 2021, at 9.00 am (IST) through Video
ADR American Depository Receipt ISIN International Securities Identification Number Obligations and Disclosure Requirements) Regulations, 2015,
Conferencing (VC) /Other Audio Visual Means (OAVM), to transact the following business:
AGM Annual General Meeting IT Information Technology (“Listing Regulations”) wherever applicable, is annexed hereto.
AI Artificial Intelligence JPY Japanese Yen The board of directors of the company at its meeting held on May
ANDA Abbreviated New Drug Application JWG Joint Working Group
ORDINARY BUSINESS: 14, 2021, concluded that the special business under item number
API Active Pharmaceutical Ingredient KARV Kallam Anji Reddy Vidyalaya
1. To receive, consider and adopt the financial statements 5, is critical and considered unavoidable, and hence needs to be
AS Accounting Standards KAR-VJR Kallam Anji Reddy – Vocational Junior College transacted at the 37th AGM of the company.
ASN Advanced Shipment Notice KMP Key Managerial Personnel
(standalone and consolidated) of the company for the year ended
ATV/ATN Atorvastatin calcium KPI Key Performance Indicators March 31, 2021, together with the reports of the board of 2) In view of the continuing COVID-19 pandemic, for maintaining
AVF Arteriovenous Fistula LABS Livelihood Advancement Business School directors and auditors thereon. social distancing norms and pursuant to General Circular nos.
BR Business Responsibility LSSSDC Life Sciences Sector Skill Development Council 2. To declare dividend on the equity shares for the financial year 14/2020, 17/2020, 20/2020, and 02/2021 dated April 8, 2020,
BSE Bombay Stock Exchange M&A Mergers and Acquisitions 2020-21. April 13, 2020, May 5, 2020, and January 13, 2021, respectively,
CAGR Compound Annual Growth Rate MC Management Council issued by the Ministry of Corporate Affairs (MCA) and Circular
CCO Chief Compliance Officer MD Managing Director 3. To reappoint Mr. G V Prasad (DIN: 00057433), as a director, who nos. SEBI/HO/CFD/CMD1/CIR/P/2020/79 and
CDP Carbon Disclosure Project MD&A Management Discussion & Analysis retires by rotation, and being eligible offers himself for the SEBI/HO/CFD/CMD2/ CIR/P/2021/11 dated May 12, 2020, and
CDSL Central Depository Services (India) Limited MT Metric Tonne reappointment. January 15, 2021, respectively issued by the Securities and
CEO Chief Executive Officer NAG North America Generics Exchange Board of India (collectively referred to as “the
CFO Chief Financial Officer NCEs New Chemical Entities 4. To reappoint statutory auditors and fix their remuneration.
Circulars”), companies are permitted to hold the AGM through
CIN Corporate Identity Number NCLT National Company Law Tribunal “RESOLVED THAT pursuant to the provisions of Section 139, VC/OAVM, without the physical presence of the members at a
COBE Code Of Business Conduct and Ethics NDA New Drug Application
142 and other applicable provisions, if any, of the Companies common venue. Accordingly, the 37th AGM of the company
COO Chief Operating Officer NGO Non-Governmental Organisation
Act, 2013, along with the relevant Rules made thereunder, and will be convened through VC/OAVM in compliance with the
CPS Custom Pharmaceutical Services NLEM National List of Essential Medicines
based on the recommendations of the audit committee and provisions of Act, and Rules made thereunder, Listing
CPCB Central Pollution Control Board NPPA National Pharmaceutical Pricing Authority
board of directors of the company, M/s. S.R. Batliboi & Regulations read with the Circulars. The deemed venue for
CRL Complete Response Letters NSDL National Securities Depository Limited
CSR Corporate Social Responsibility NSE The National Stock Exchange of India Limited
Associates LLP, chartered accountants (firm registration no. the 37th AGM shall be the registered office of the company i.e.
CTO Chemical Technical Operations NSE IFSC National Stock Exchange of India International Financial Service Centre 101049W/E300004), be and are hereby reappointed as 8-2-337, Road No. 3, Banjara Hills, Hyderabad – 500034,
CUSIP Committee on Uniform Security Identification Procedures NYSE New York Stock Exchange Inc. statutory auditors of the company, to hold office for a second Telangana, India.
DCGI Drug Controller General of India OP Out Patient term of five consecutive years from the conclusion of the 37th
3) In line with the Circulars, the company is providing VC/OAVM
DIN Director�s Identification Number OTC Over-the-counter AGM until the conclusion of the 42nd AGM, at such
facility to its members to attend the AGM. The facility for
DMF Drug Master File OTIF On Time In Full remuneration and out of pocket expenses, as may be decided by
attending the AGM virtually will be made available for 1,000
DP Depository Participant PAN Permanent Account Number the board of directors of the company.
DRF Dr. Reddy’s Foundation PAT Profit After Tax members on a first come first served basis. This will not
DRFHE Dr. Reddy’s Foundation for Health and Education PBT Profit Before Tax RESOLVED FURTHER THAT the board of directors of the include large members (i.e. members with 2% or more
EBITDA Earnings Before Interest, Taxes, Depreciation And Amortization PHC Primary Health Centres company be and are hereby authorized to decide and/or alter shareholding), promoters, institutional investors, directors, key
EC Electronically Commutated PMI Process Mass Intensity the terms and conditions of the appointment including the managerial personnel, the chairpersons of the audit committee,
EGM Extraordinary General Meeting PO Purchase Order remuneration for subsequent financial years as it may deem fit.” nomination, governance and compensation committee and
EM Emerging Markets PP Proprietary Products stakeholders’ relationship committee, auditors etc. who are
EPS Earnings Per Share PPE Personal Protective Equipment allowed to attend the AGM without such restriction of first
ERM Enterprise-wide Risk Management PSAI Pharmaceuticals Services and Active Ingredients SPECIAL BUSINESS: come first served basis.
ESOP Employees Stock Option Plan PwD People with Disablities 5. To ratify the remuneration payable to cost auditors, M/s. Sagar
EUG Europe Generics P2P Procure to Pay & Associates, cost accountants for the financial year ending 4) The VC/OAVM facility for members to join the meeting, shall
FO Fuel Oil RAT Rapid Antigen Tests March 31, 2022. be kept open 30 minutes before the start of the AGM and shall
FPL Friction Power Loss RD Regional Director be closed on expiry of 30 minutes after start of the AGM.
FTO Formulation Technical Operations R&D Research and Development To consider and, if thought fit, to pass, with or without Members can attend the AGM through VC/OAVM by following
FY Financial Year RDIF Russian Direct Investment Fund modification(s), the following resolution as an ordinary the instructions mentioned in this notice.
GDP Gross Domestic Product RMC Risk Management Committee resolution:
GDR Global Depository Receipt RO Reverse Omission 5) The facility for appointment of proxies by members is not
“RESOLVED THAT pursuant to the provisions of Section 148 available as the AGM will be held through VC/OAVM and
GG Global Generics RoCE Return on Capital Employed
GHG Green House Gas RoW Rest of World
and other applicable provisions, if any, of the Companies Act, physical attendance of the members is dispensed with
GMO Global Manufacturing Operations RTA Registrar and Transfer Agent 2013, and Companies (Cost Records and Audit) Rules, 2014, as pursuant to the Circulars. Hence, the proxy form and
GMP Good Manufacturing Practices SEBI Securities and Exchange Board of India amended from time to time, the members of the company attendance slip are not annexed to this notice.
HR Human Resources SEC Securities and Exchange Commission ratify the remuneration of ` 700,000/- (Rupees seven lakhs only)
HVAC Heat, Ventilation and Air Conditioning SEZ Special Economic Zone plus out of pocket expenses, at actuals and applicable taxes, to 6) Corporate members whose authorized representatives are
HOC Heat of Compression SHE Safety, Health and Environment M/s. Sagar & Associates, cost accountants (firm registration intending to attend the meeting are requested to send a certified
HPAPI High Potency Active Pharmaceutical Ingredient SG&A Selling, General and Administrative no. 000118), appointed by the board of directors of the copy of the board resolution authorizing such representative
IASB Indian Accounting Standard Board SIP School Improvement Program company as cost auditors for the financial year ending March 31, to attend the AGM through VC/OAVM, and cast their votes
ICAI Institute of Chartered Accountants of India SMP Senior Management Personnel 2022. through e-voting. Such documents can be sent to
ICC Internal Complaints Committee SPCB State Pollution Control Board drlscrutinizer@gmail.com.
IEC Information, Education and Communication SS Secretarial Standards RESOLVED FURTHER THAT the board of directors of the
IEPF Investor Education and Protection Fund SOX Sarbanes Oxley Act, 2002 company be and are hereby authorized to do all such acts, 7) Members attending the AGM through VC/OAVM shall be
IFRS International Financial Reporting Standards TCFD Task Force on Climate-Related Financial Disclosures matters, deeds and things as may be necessary to give effect to counted for the purpose of reckoning the quorum under Section
IGAAP Indian Generally Accepted Accounting Principles UK United Kingdom the above resolution.” 103 of the Act.
Ind AS Indian Accounting Standard US/USA/U.S. United States of America
8) The statutory registers maintained under the Act, including
INR Indian Rupees USD/US$ United States Dollar
register of directors and key managerial personnel and their
IOT Internet of Things USFDA United States Food and Drugs Administration NOTES: shareholding, the register of contracts or arrangements in which
IP Intellectual Property VFD Variable Frequency Drive 1) The statement pursuant to Section 102(1) of the Companies Act,
directors are interested and all other documents referred to in the
IPDO Integrated Product Development Organisation ZLD Zero Liquid Discharge 2013 ("the Act"), and Rules made thereunder in respect of the
notice will be available for inspection in electronic mode.
special business set out in the notice, Secretarial Standard on
Members who wish to inspect such documents are requested to
General Meetings (SS-2), wherever applicable, and SEBI (Listing
write to the company by sending an e-mail to
shares@drreddys.com.
9) In accordance with the Circulars, the notice of the 37th AGM
Dr. Reddy’s Laboratories Not Annual Report 2020-
along with the annual report for the financial year 2020-21 has been sent
 Dr. Reddy’s Laboratories Not Annual Report 2020-

only through electronic mode to the members who have

21. Dividend, if declared, at the 37th AGM, will be paid on or a. Declaration by insurance company member qualifying as insurer satisfactory review by the company, of all the documents submitted
registered their e-mail addresses with the company/depository
after August 2, 2021, subject to deduction of tax at source, to as per Section 2(7A) of the Insurance Act, 1938. by non-resident member.
participants. Members may note that the notice of the 37th AGM
those members whose names appear on the register of members
and the annual report are also available on the company’s b. Declaration by mutual fund member eligible for exemption under Declaration by members under Rule 37BA(2) of the Income Tax
of the company as of end of Monday, July 12, 2021.
website, www.drreddys.com, website of National Securities Section 10(23D) of the IT Act. Rules, 1962:
Depository Limited (NSDL) (www.evoting.nsdl.com) and on the 19) In terms of Schedule I of the Listing Regulations, listed In order to enable the company to provide credit of tax deducted at
c. Declaration by Category I/II Alternate Investment Fund (AIF)
website of Stock Exchanges (www.bseindia.com) and companies are required to use the Reserve Bank of India’s source to beneficial members in whose hands dividend paid by
registered with SEBI.
(www.nseindia.com). approved electronic mode of payment such as electronic company is assessable, members are requested to provide
clearance service (ECS), LECS (Local ECS)/RECS (Regional Declaration for exemption under Circular 18/2017 of the IT Act: declaration in format as prescribed under Rule 37BA(2) of the Income
10) In accordance with the Circulars, no physical copy of the
ECS)/NECS (National ECS), direct credit, real time gross In case of any member whose income is subject to lower rate of Tax Rules, 1962.
notice of the 37th AGM and the annual report for the financial
settlement, national electronic fund transfer (NEFT), etc. for TDS, or is exempt under the IT Act, such member is requested to
year 2020-21 has been sent to members who have not Section 206AB of the IT Act:
making payments like dividend etc. to the members. submit the following documents as per the relevant provisions of the
registered their e-mail addresses with the company/depository Rate of TDS @10% under Section 194 of the IT Act, is subject to
IT Act, duly signed by the authorized signatory:
participants. The members will be entitled to a physical copy of Accordingly, members holding securities in demat mode are provisions of Section 206AB of IT Act; (effective from July 1,
the annual report for the financial year 2020-21 free of cost, requested to update their bank details with their depository a. Lower withholding tax certificate for the financial year 2021-22 if 2021), which introduces special provisions for TDS in respect of
upon sending a request to the company secretary at 8-2-337, participants. Members holding securities in physical form any, obtained from the Income Tax authorities. non-filers of income tax return. As provided in Section 206AB, tax is
Road No. 3, Banjara Hills, Hyderabad – 500 034. should send a request to update their bank details, to the required to be deducted at higher of following rates in case of
b. In case the member has obtained tax exemption status under
company’s RTA. payments to specified persons:
11) In accordance with the Circulars, members who have not any provisions of the IT Act, the documentary evidence along
registered their e-mail address may register their e-mail address 20) In compliance with the Circulars, the company shall dispatch with declaration for the same. • at twice the rate specified in the relevant provision of the IT Act; or
on www.drreddys.com/investors/investor-services/shareholder- by post the dividend warrants/demand drafts to those members
For non-resident members, taxes are required to be withheld in • at twice the rate or rates in force; or
information or with their depository participant or send their who have not registered their bank mandate with company.
accordance with the provisions of Section 195 and other
consent at shares@drreddys.com along with their folio no./DP ID • at the rate of 5%.
21) Pursuant to the changes introduced in the Income Tax Act, 1961 applicable Sections of the IT Act, at the rates in force. The
client ID and valid e-mail address for registration.
("the IT Act") as amended by the Finance Act, 2020, dividend withholding tax shall be at the rate of 20% (plus applicable surcharge Where Sections 206AA and 206AB are applicable i.e. the specified
12) Pursuant to Section 108 of the Act, read with Rule 20 of the income will be taxable in the hands of the members and the and cess) or as notified by Government of India on the amount of person has not submitted the PAN as well as not filed the return, the
Companies (Management and Administration) Rules, 2014, as company is required to deduct tax at source (TDS) at the time of dividend payable. However, as per Section 90 of the IT Act, non- tax shall be deducted at the higher of the two rates prescribed in
amended from time to time, Regulation 44 of the Listing making the payment of dividend to members at the prescribed resident members may have an option to be governed by the these two sections.
Regulations and the Circulars, the company is pleased to offer rates: provisions of the Double Tax Avoidance Agreement (DTAA) between
voting by electronic means to the members to cast their votes The term 'specified person' is defined in sub-section (3) of Section
India and the country of tax residence of the member, if they are
For resident members, taxes shall be deducted at source 206AB as who satisfies the following conditions:
electronically on all resolutions set forth in this notice. The more beneficial to them. In order to avail the benefits of DTAA, the
detailed instructions for e-voting and attending the AGM under Section 194 of the IT Act, as follows:
non-resident members will have to provide the
through
VC/OAVM are given as a separate attachment to this notice. following: • A person who has not filed the income tax return for two previous
Valid PAN of member available 10% or as notified by the years immediately prior to the previous year in which tax is
13) Members, desiring any information relating to the financials from with the company Government of India • Self-attested tax residency certificate for the financial year 2021-
required to be deducted, for which the time limit of filing of
the management or the statutory auditors, are requested to write 22 obtained from the tax authorities of the country of which
return of income under Section 139(1) of the IT Act, has expired;
to the company at shares@drreddys.com at an early date. Members without PAN/invalid 20% or as notified by the the member is a resident.
and
PAN available with the company* Government of India • Self-attested copy of PAN allotted by the Indian income tax
• The aggregate of TDS and TCS in his case is ₹ 50,000/- or more in
14) A certificate from the auditors of the company certifying that the authorities. In case of non-availability of PAN, information each of these two previous years.
under
company’s ‘Dr. Reddy’s Employees Stock Option Scheme,
Member who has not filed 20%** sub-rule 2 of Rule 37BC to be submitted. The non-resident who does not have the permanent establishment is
2002’, ‘Dr. Reddy’s Employees ADR Stock Option Scheme,
returns of tax for FY2019 and excluded from the scope of a specified person.
2007’, and ‘Dr. Reddy’s Employees Stock Option Scheme, • Self-declaration in form 10F duly filled and signed.
2018’, are being implemented in accordance with the SEBI FY2020 before the due date and While the company is awaiting the guidelines from the Government of
aggregate of tax deducted at • Self-declaration from non-resident member (format available
Regulations and the resolutions passed by the members, is India prescribing the mechanism to determine who fulfils the
source is ₹ 50,000/- or more in on www.bigshareonline.com), primarily covering the following:
required to be placed at the AGM. Such certificate will be conditions of being a 'specified person'. Therefore, in order to comply
available for inspection by the members in electronic mode each of these two years a. Non-resident is and will continue to remain a tax resident of with the provisions of the IT Act, and unless any mechanism is
before and during the AGM. the
Members who wish to inspect the certificate are requested to 18) The board of directors of the company at its meeting held on exemption notification, if any, as per the relevant provisions of the IT
* Individual member needs to ensure that his/her PAN is linked with Aadhar number, on
write to the company by sending e-mail to shares@drreddys.com. May 14, 2021, have recommended a dividend of ₹ 25/- per or before June 30, 2021, else his/her PAN will be considered invalid. Act:
equity share of face value of ₹ 5/- each as dividend for the ** TDS rate is applicable for dividend paid on or after July 1, 2021.
15) Members are requested to immediately intimate, any change in
financial year 2020-
their address to their depository participants with whom they are
maintaining their demat accounts. If the shares are held in However, no tax shall be deducted on the dividend payable to a
physical form, change in address has to be intimated to the resident individual member, if the total dividend to be received by
company’s registrar and transfer agent (RTA), Bigshare Services them during the financial year 2021-22 does not exceed ₹ 5,000/-
Private Limited, 306, Right Wing, 3rd Floor, Amrutha Ville, Opp. and also in cases where members provide form 15G (applicable to
Yashoda Hospital, Rajbhavan Road, Hyderabad 500 082, any person other than HUF or a company or a firm)/form 15H
Telangana, India Tel: +91-40-2337 4967, Fax: +91-40-2337 (applicable to an individual who is 60 years and older) subject to
0295, e-mail ID: bsshyd@bigshareonline.com. conditions specified in the IT Act. Members may also submit any
other document as prescribed under the IT Act, to claim a lower/nil
16) SEBI has mandated the submission of permanent account withholding tax. PAN is mandatory for members providing form
number (PAN) by every participant in the securities market. 15G/form 15H or any other documents as mentioned above. The
Members holding shares in electronic form are, therefore, formats of form 15G/form 15H are available on the website of our
requested to submit their PAN to their depository participants registrar and transfer agent (RTA) Bigshare Services Private
with whom they are maintaining their demat accounts. Members Limited at www.bigshareonline.com.
holding shares in physical form should submit their PAN to the
company or its RTA. For resident mutual funds and insurance company members: In
order to provide exemption from TDS on the dividend payable to a
17) The register of members and share transfer books of the mutual fund specified under Clause (23D) of Section 10 of the IT Act,
company will remain closed from Tuesday, July 13, 2021 to or an insurance company as specified in Section 194 of the IT Act,
Thursday, July 15, 2021 (both days inclusive). members should submit the below document along with
 Dr. Reddy’s Laboratories Not Annual Report 2020-
country of residence during the financial year 2021-22; prescribed by the authorities in this regard, the company will
proceed on the assumption that all members are in
b. Non-resident is eligible to claim the benefit of respective
compliance with the provisions of Section 206AB of the IT Act.
tax treaty;
However, we request you to inform us well in advance and
c. Non-resident has no reason to believe that its claim for the before the cut-off date if you are covered under the definition
benefits of the DTAA is impaired in any manner; of 'specified person' as provided in Section 206AB of the IT
Act. The company reserves its right to recover any demand
d. Non-resident receiving the dividend income is the
raised subsequently on the company for not informing the
beneficial owner of such income;
company or providing wrong information about applicability
e. Dividend income is not attributable/effectively connected of Section 206AB in your case.
to any permanent establishment or fixed base in India;
A separate communication was sent to all the members through
f. In case of Foreign Institutional Investors and Foreign Portfolio email on June 8, 2021, and newspaper publication dated June
Investors, self-attested copy of SEBI registration 15, 2021, in this regard. A copy of the said communication is
certificate; and also available on the website of the company.
g. In case of a member being tax resident of Singapore, In order to enable the company to determine and deduct
please furnish the letter issued by the competent authority appropriate TDS/withholding tax, the company shall consider
or any other authority evidences demonstrating the non- the documents received from the members within the
applicability of Article 24 - Limitation of Relief under India- stipulated time as mentioned in the aforesaid communication.
Singapore DTAA.
For all members:
• Any other documents as prescribed under the Act, for lower Members are requested to update tax residential status,
withholding tax if applicable, duly attested by the member. permanent account number (PAN), registered email address,
mobile numbers and other details with their depository
The company is not obligated to apply the beneficial DTAA rates at
participants, in case the shares are held in dematerialized
the time of tax deduction/withholding on dividend amounts.
form. In case a member is holding shares in physical mode,
Application of beneficial DTAA rate shall depend upon the
he/she is requested to furnish details to the company's
completeness and
registrar and share transfer agent.
 Dr. Reddy’s Laboratories Not Annual Report 2020-

The aforementioned documents for tax exemption can be

form no. SH-13, to the RTA of the company. Further, Mr. Prasad is also a director on the boards of: Greenpark Hotels and M/s. S.R. Batliboi & Associates LLP, have consented to the said
downloaded from the website of the company's RTA-
members desirous of cancelling/varying nomination are Resorts Limited, Stamlo Industries Limited, Dr. Reddy’s Holdings reappointment, and confirmed that their reappointment, if made,
https://www.bigshareonline.com/Resources.aspx.
requested to send their requests in form no. SH-14, to the RTA Limited, Dr. Reddy’s Trust Services Private Limited, Dr. Reddy’s would be within the limits specified under Section 141(3)(g) of the
The company will arrange to e-mail a soft copy of TDS certificate of the company. These forms will be made available on request. Institute of Life Sciences, International Foundation for Research and Act. They have further confirmed that they are not disqualified to
at the members' registered e-mail ID in due course, post Education, Indian School of Business in India, and company’s wholly- be reappointed as statutory auditor in terms of the provisions of
23) In terms of Regulation 40(1) of SEBI Listing Regulations, as
payment of the said final dividend/furnishing of TDS returns for owned subsidiaries – Aurigene Discovery Technologies Limited and the Sections 139(1), 141(2) and 141(3) of the Act, and the provisions of
amended from time to time, members may please note that
the second quarter of financial year 2021-22 with the authorities. Idea2Enterprises (India) Private Limited in India; Aurigene Discovery the Companies (Audit and Auditors) Rules, 2014, as amended from
shares can be transferred only in dematerialized form with
Technologies Inc., Dr. Reddy’s Laboratories, Inc., and Promius time to time. The proposed remuneration to be paid to M/s. S.R.
All the documents submitted by the members will be verified effect from April 1, 2019, except in case of request received for
Pharma LLC in USA. Batliboi & Associates LLP, chartered accountants, for the financial
by the company and the company will consider the same transmission or transposition of shares. Further, SEBI has fixed
while deducting the appropriate taxes if they are in accordance March 31, 2021 as the cut-off date for re-lodgement of transfer He is a member of the corporate social responsibility committee, year 2021-22 is ` 1.69 crores.
with the provisions of the IT Act. deeds and the shares that are re-lodged for transfer shall be stakeholders’ relationship committee and banking and authorizations None of the directors/key managerial personnel of the company and
issued only in demat mode. Although, the members can committee of the company and a member of the nomination and their relatives are concerned or interested, financially or otherwise in
Members may note that in case the tax on said dividend is
continue to hold shares in physical form, they are requested remuneration committee and the corporate social responsibility
deducted at a higher rate in absence of receipt of the the resolution set out at item no. 4 of the notice.
to consider dematerializing the shares held by them in the committee of Aurigene Discovery Technologies Limited, a wholly-
aforementioned details/documents, option is available to the The board, on the recommendation of the audit committee,
company, for their own benefit. owned subsidiary.
member to file the return of income as per the IT Act, and claim recommends the resolution set forth in item no. 4 of the notice for
an appropriate refund, if eligible. 24) Your company is pleased to provide the facility of live webcast Except Mr. G V Prasad, Mr. K Satish Reddy and their relatives, approval of the members.
of proceedings of AGM. Members who are entitled to none of the other directors or key managerial personnel of the
All communications/queries in this respect should be addressed
participate in the AGM can view the live proceedings of AGM company and their relatives are concerned or interested, financially
to our RTA at their e-mail ID: ITEM NO. 5
by logging on the NSDL e-voting system at or otherwise, in the resolution set out at item no. 3 of the notice. Mr.
drltaxexemption@bigshareonline.com. The board, on the recommendation of the audit committee, has
www.evoting.nsdl.com using their secure login credentials. G V Prasad and Mr. K Satish Reddy are not ‘relative’ as defined under
approved the reappointment of M/s. Sagar & Associates, cost
Above communication on TDS only sets out the provisions of Members are encouraged to use this facility for the live the Act.
accountants, as cost auditors at a remuneration of ₹ 700,000/-
law in a summarized manner and does not purport to be a webcast. The webcast facility will be available from 9.00 am
The board recommends the resolution set forth in item no. 3 of (Rupees seven Lakhs) per annum plus out of pocket expenses, at
complete analysis or listing of all potential tax consequences. (IST) onwards on July 28, 2021.
the notice for approval of the members. actuals and applicable taxes, to conduct the audit of the cost records
Members should consult their own tax advisors for the tax
25) Since the AGM will be held through VC/OAVM, the route map of the company for the financial year ending March 31, 2022.
provisions applicable to their particular circumstances.
is not annexed in this notice. ITEM NO. 4 In accordance with the provisions of the Section 148 of the Act, read
22) Pursuant to Section 72 of the Act, members are entitled to make M/s. S.R. Batliboi & Associates LLP, chartered accountants (firm
a By order of the board
nomination in respect of shares held by them. Members desirous registration no. 101049W/E300004) were appointed as statutory
Place: Hyderabad Sandeep Poddar with the Companies (Audit and Auditors) Rules, 2014, the
of making a nomination, are requested to send their requests auditors of the company at the 32nd AGM held on July 27, 2016, for
Date: May 14, 2021 Company Secretary remuneration payable to the cost auditors has to be ratified by the
in a period of five years commencing from the conclusion of 32nd
AGM till the conclusion of the 37th AGM, subject to ratification by members of the company.
members every year. However, MCA vide its notification dated May Accordingly, consent of the members is sought for passing an ordinary
7, 2018, has

ANNEXURE TO NOTICE OF AGM

omitted the requirement under the first proviso to Section 139 of the resolution as set out at item no. 5 of the notice for ratification of
Act, and Rule 3(7) of the Companies (Audit and Auditors) Rules, the remuneration payable to the cost auditors for the financial year
2014, regarding ratification of appointment of statutory auditors
Statement pursuant to Section 102(1) of the Companies Act, 2013 ("the Act"), and Rules made thereunder in respect of the special business set ending March 31, 2022.
by members at every subsequent AGM.
out in the notice, Secretarial Standard on General Meetings (SS-2), wherever applicable, and SEBI (Listing Obligations and Disclosure None of the directors, key managerial personnel and their relatives
Requirements) Regulations, 2015, as and wherever applicable. Consequently, M/s. S.R. Batliboi & Associates LLP, chartered
are, in any way, concerned or interested, financially or otherwise,
accountants, will complete their first term of five consecutive years as
in this resolution.
ITEM NO. 3 the statutory auditors of the company at the conclusion of the
37th

Mr. G V Prasad (aged 60 years, DIN: 00057433) holds a AGM of the company. The board recommends the resolution set forth in item no. 5 of
remarkable work and contribution to pharmaceutical industry. He has
bachelor’s degree in chemical engineering from Illinois Institute of the notice for approval of the members.
also been named India Business Leader of the year by CNBC Asia Pursuant to Section 139(2) of the Act, the company can appoint
Technology, Chicago in the USA, and an M.S. in Industrial
in 2015, Regional Honoree for the 2020 YPO Global Impact an auditors firm for a second term of five consecutive years.
Administration from Purdue University, Indiana in the USA.
Award, received the V. Krishnamurthy Award for Excellence by the Accordingly, M/s. S.R. Batliboi & Associates LLP, chartered By order of the board
Centre for Organizational Development in 2019, and was accountants, are proposed to be reappointed as statutory auditors of
designated The the company for a
Mr. Prasad is a member of the company’s board since 1986 and Boundary Breaker at the CEO Awards in 2018. second term of five consecutive years commencing from the Place: Hyderabad Sandeep Poddar
serves conclusion of 37th AGM till the conclusion of the 42nd AGM. Date: May 14, 2021 Company Secretary
as co-chairman and managing director of the company. Prior to May 2014, Mr. Prasad held titles of chairman and chief
He leads the core team that drives the growth and performance at executive officer. He was reappointed as a whole-time director
Dr. Reddy’s. He has played a key role in the evolution of Dr. Reddy’s designated as co-chairman
the 36th AGM held on Julyand
30,managing
2020, fordirector
a periodof of
thefive
company
years at
from a
mid-sized pharmaceutical company into a globally respected

INSTRUCTIONS FOR E-VOTING

pharmaceutical major especially in developed markets. He is also
passionate about sustainable manufacturing and business practices. commencing January 30, 2021, to January 29, 2026, liable to retire
He is widely credited as the architect of Dr. Reddy’s successful by rotation. He retires by rotation at the 37th AGM of the company
Global Generics (GG) and Active Pharmaceutical Ingredients (API) and, being eligible, offers himself for the reappointment. Dear Members,
strategies, as well as the company’s foray into biosimilars,
The company has received an intimation in form DIR-8 pursuant In compliance with Regulation 44 of the Listing Regulations, SEBI
proprietary products,
to
differentiated formulations and the company's sustainability initiatives Rule 14 of the Companies (Appointment and Qualification of FY2021. circul 2020/242 dated company is pleased to
including the adoption of green technologies and processes. Directors) December 9, 2020, provide remote e-voting
ar no.
Rules, 2014, from Mr. Prasad to the effect that he is not disqualified Sections 108, 110 and facility to members to
Mr. Prasad was listed among the Top 50 CEOs that India ever had by SEBI/
in accordance with Section 164(2) of the Act, and a declaration that other applicable cast their vote on all
Outlook magazine in 2017 and was recognized as one of the Top Five HO/C
he is not debarred or restrained from acting as a director by any SEBI provisions of the Act, resolutions set forth in
Most Valuable CEOs of India by Business World in 2016. He was also FD/C
order or by any other such authority. read with the relevant the notice convening
listed in the prestigious ‘Medicine Maker 2020 and 2021 Power List’ of MD/C
Mr. Prasad has attended all meetings of the board held during IR/P/ Rules thereunder, the the 37th AGM to be
 Dr. Reddy’s Laboratories Not Annual Report 2020-
held on Wednesday, July 28, 2021, at 9.00 am (IST). The company Commencement of End of g (IST)
EVEN remot
has engaged remote e-voting
e
Tuesday, July 27,
e-
Saturday, July 24, 2021, at 9.00 am (IST) 2021, at 5.00 pm
116146 votin
the most inspirational professionals shaping the future of drug He does not hold any equity shares in the company as on the services of NSDL for the purpose of providing remote e-voting Please read the instructions printed below before exercising your vote.
development and under the category of "Small Molecules" for his March 31, 2021. facility to its members. The details and instructions for e-voting and participation at the
The remote e-voting facility is available at the following link: AGM through VC/OAVM form an integral part of this notice of the
www.evoting.nsdl.com. The e-voting event number (EVEN) and AGM to be held on July 28, 2021.
period of remote e-voting are set out below:
 Dr. Reddy’s Laboratories Not Annual Report 2020-

Procedure to vote electronically using NSDL e-voting system listed companies", e-voting process has been enabled to all the
Type of members Login method
The way to vote electronically on NSDL e-voting system consists individual demat account holders, by way of single login
of “Two Steps” which are mentioned below: credential, through their demat accounts/websites of
depositories/DPs in order to increase the efficiency of the 4. Alternatively, the user can directly access the e-voting page by providing demat account number and PAN
Step 1: Access to the NSDL e-voting system. no. from a link in www.cdslindia.com home page. The system will authenticate the user by sending OTP
voting process. Individual demat account holders would be able
Step 2: Cast your vote electronically and join ‘General Meeting’ on to cast their vote without having to register again with the e- on registered mobile and e-mail as recorded in the demat account. After successful authentication, user
the NSDL e-voting system. voting service provider (ESP) thereby not only facilitating will be provided links for the respective ESP i.e. NSDL where e-voting is in progress.
seam less authentication but also ease and convenience of
Step 1: Access to NSDL e-voting system
participating in e-voting process. Members are advised to Individual members 1. You can also login using the login credentials of your demat account through your depository participant
A) Login method for e-voting and joining virtual meeting
update their mobile number and e-mail ID in their demat (holding securities in registered with NSDL/CDSL for e-voting facility.
for individual members holding securities in demat mode.
accounts in order to access e-voting facility. demat mode) login
Pursuant to SEBI circular no. SEBI/HO/CFD/CMD/CIR/P/2020/ 2. Once logged in, you will be able to see the e-voting option. Once you click on the e-voting option,
through their depository
242 dated December 9, 2020 on "e-voting facility provided by you will be redirected to the NSDL/CDSL depository site after successful authentication, wherein
participants
you can see e- voting feature.

Login method for individual members holding securities in demat mode is given below:
3. Click on options available against company name or e-voting service provider-NSDL and you will be
redirected to e-voting website of NSDL for casting your vote during the remote e-voting period or
joining
Type of members Login method virtual meeting and voting during the meeting.

Individual members A. NSDL IDeAS facility Important note: Members who are unable to retrieve User ID/Password are advised to use forget User ID and forget Password option available
holding securities in If you are already registered, follow the below at respective websites.
demat mode with NSDL. steps:
Helpdesk for individual members holding securities in demat mode for any technical issues related to login through depository i.e.
1. Visit the e-services website of NSDL. Open web browser by typing the following URL: NSDL and CDSL.
https://eservices.nsdl.com/ either on a personal computer or on a mobile.
2. Once the home page of e-services is launched, click on the “Beneficial Owner” icon under “Login”
which is available under “IDeAS” section. Login type Helpdesk details
3. A new screen will open. You will have to enter your User ID and Password. After Individual members holding Please contact NSDL helpdesk by sending a request evoting@nsdl.co.in or call at toll free no.:
successful authentication, you will be able to see e-voting services. securities in demat mode with at 1800 1020 990 and 1800 22 44 30
NSDL
4. Click on “Access to e-voting” under e-voting services and you will be able to see e-voting page. Individual members holding Please contact CDSL helpdesk by sending a request at helpdesk.evoting@cdslindia.com or contact
5. Click on options available against company name or e-voting service provider - NSDL and you will be securities in demat mode with at 022- 23058738 or 022-23058542/43
re-directed to NSDL e-voting website for casting your vote during the remote e-voting period or CDSL
joining virtual meeting and voting during the meeting.
B) Login method for e-voting and joining virtual meeting for members other than individual members holding securities in demat mode
If you are not registered, follow the below steps: and members holding securities in physical mode.
1. Option to register is available at How to login to the NSDL e-voting website?
https://eservices.nsdl.com.
2. Select “Register Online for IDeAS” portal or click at https://eservices.nsdl.com/SecureWeb/ 1. Visit the e-voting website of NSDL. Open a web browser by b) For members who 16 Digit Beneficiary ID.
IdeasDirectReg.jsp typing the following URL: https://www.evoting.nsdl.com/ hold shares in demat
either on a personal computer or on a mobile. For example if your Beneficiary ID is
3. Please follow steps given in points 1-5 above. account with CDSL. 12************** then your User ID is
2. Once the home page of e-voting system is launched, click on the 12**************
B. E-voting website of NSDL. icon “Login” which is available under ‘Shareholder/Member’
1. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a personal section.

computer or on a mobile. 3. A new screen will open. You will have to enter your User ID, your c) For members holding EVEN number followed by folio no.
Password/OTP and a verification code as shown on the screen. shares in physical registered with the company.
2. Once the home page of e-voting system is launched, click on the icon “Login” which is available
form.
under ‘Shareholder/Member’ section. Alternatively, if you are registered for NSDL eservices i.e. IDEAS, For example if folio no. is 001*** and
you can login to https://eservices.nsdl.com/ with your existing EVEN is 123456 then User ID is
3. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat
IDEAS login. Once you log-in to NSDL eservices after using 123456001***
account number held with NSDL), Password/OTP and a verification code as shown on the screen.
your login credentials, click on e-voting and you can proceed to
Step 2
4. After successful authentication, you will be redirected to NSDL depository site wherein you can i.e. Cast your vote electronically.
5. Password details for members other than individual members are
see e-voting page. Click on options available against company name or e-voting service provider - 4. Your User ID details are given given below:
NSDL below :
and you will be redirected to e-voting website of NSDL for casting your vote during the remote e-
voting period or joining virtual meeting and voting during the meeting. a. If you are already registered for e-voting, then you can use
Manner of holding shares Your User ID your existing password to login and cast your vote.
i.e. Demat (NSDL or is:
CDSL) or Physical b. If you are using the NSDL e-voting system for the first time,
you
Individual members 1. Existing users who have opted for Easi/Easiest, they can login through their User ID and Password. Option will need to retrieve the ‘initial password’. Details of ‘initial
holding securities in will be made available to reach e-voting page without any further authentication. The URL for users to password’ is given in point c. Once you retrieve your ‘initial
demat mode with CDSL login to Easi/Easiest are https://web.cdslindia.com/myeasi/home/login or www.cdslindia.com and have links of e- NSDL. Click on NSDL to cast Easi/Easiest, option to register is available at the link given
click on New System Myeasi. voting service your vote. here:
provider i.e. https://web.cdslindia.com/myeasi/Registration/EasiRegistrat
2. After successful login of Easi/Easiest the user will be also able to see the e-voting menu. The menu will 3. If the user is not registered for
Dr. Reddy’s Laboratories Not Annual Report 2020-
ion a) For members who hold shares in a demat account with NSDL. 8 Character DP ID password’, you need to enter
followed by 8 Digit the ‘initial password’ and the
Client ID. system will force you to change
For example if your your password.
DP ID is IN300*** c. How to retrieve your ‘initial
and Client ID is password’?
12****** then your I. If your e-mail ID is
user ID is registered in your demat
IN300***12******. account or with the
company, your ‘initial
password’ is communicated
to you on your e-mail ID.
Trace the e-mail sent to you
from NSDL from your
mailbox. Open the email
and open the attachment
i.e. a .pdf file. Open the .pdf
file.
 Dr. Reddy’s Laboratories Not Annual Report 2020-

ii. The password to open the .pdf file is your 8 digit client
attested scanned copy of Aadhar card) to (company e-mail ID at h) Immediately after the conclusion of voting at the AGM, the specimen signature of the duly authorized signatory(ies) who are
ID for NSDL account, last 8 digits of client ID for CDSL
shares@drreddys.com). If you are an individual member holding scrutinizer shall first count the votes cast at the AGM and authorized to vote, to the scrutinizer by e- mail to
account or folio no. for shares held in physical form.
securities in demat mode, you are requested to refer to the login thereafter unblock the votes cast through remote e-voting in the drlscrutinizer@gmail.com with a copy marked to evoting
The
method explained at step 1 (A) i.e. login method for e-voting and presence of at least two witnesses not in the employment of @nsdl.co.in.
.pdf file contains your ‘User ID’ and your ‘initial password’.
joining virtual meeting for individual members holding securities the company. The scrutinizer shall prepare a consolidated
k) It is strongly recommended not to share your password with any
iii. If your e-mail ID is not registered, please follow steps in demat mode. scrutinizer’s report of the total votes cast in favor or against, if
other person and take utmost care to keep your password
mentioned below in “process for those members any, not later than forty eight hours after the conclusion of the
c) Alternatively members may send a request to evoting@nsdl.co.in confidential. Login to the e-voting website will be disabled
whose e-mail IDs are not registered”. AGM. This report shall be made to the chairman or any other
for procuring User ID and Password for e-voting by providing upon five unsuccessful attempts to key in the correct password.
person authorized by the chairman, who shall declare the result
6. If you are unable to retrieve or have not received the “initial above mentioned documents. In such an event, you will need to go through the ‘Forgot User
of the voting forthwith.
password” or have forgotten your password: Details/Password?’ or ‘Physical User Reset Password?’ option
d) In terms of SEBI circular dated December 9, 2020 on e-voting
I) The voting results declared along with the scrutinizer’s report available on www.evoting.nsdl.com to reset the password.
a. Click on “Forgot User Details/Password?”(If you are facility provided by listed companies, individual members holding
shall be placed on the company’s website www.drreddys.com
holding shares in your demat account with NSDL or CDSL) securities in demat mode are allowed to vote through their demat l) In case of any queries, you may refer to the frequently asked
and the website of NSDL immediately after the declaration of the
option available on www.evoting.nsdl.com. account maintained with depositories and depository questions (FAQs) and e-voting user manual, available at
result by the chairman or a person authorized by the chairman.
participants. Members are required to update their mobile downloads section of www.evoting.nsdl.com or call on toll free
b. Physical User Reset Password? (If you are holding shares The results shall also be immediately forwarded to the BSE
number and e-mail ID correctly in their demat account in order to nos.: 1800-1020-990/1800-224-430. You can also refer your
in physical mode) option available on www.evoting.nsdl.com. Limited, National Stock Exchange of India Limited, the New
access e-voting facility. queries to NSDL through e-mail ID: evoting@nsdl.co.in.
York Stock Exchange Inc., and NSE IFSC Limited.
c. If you are still unable to get the password by aforesaid
General instructions
two options, you can send a request at evoting@nsdl.co.in j) Institutional members (i.e. other than individuals, HUF, NRI etc.)
a) The remote e-voting period commences on Saturday, July 24,
mentioning your demat account number/folio no., your PAN, are required to send scanned copy (PDF/JPG format) of the
2021, (9.00 am IST) and ends on Tuesday, July 27, 2021, (5.00
your name and your registered address etc. relevant board resolution/authority letter etc. with attested
pm
d. Members can also use the OTP (One Time Password) IST). During this period, members of the company, holding shares
based login for casting the votes on the e-voting system of either
date ofinTuesday,
physicalJuly
form20,or2021,
in dematerialized
may cast theirform,
votesaselectronically.
on the cut-off
NSDL.

7. After entering your password, tick on agree to “Terms and

Conditions” by selecting on the check box. The remote e-voting module shall be disabled by NSDL for voting
hereafter. Once the vote on a resolution is cast by the member,
INSTRUCTIONS FOR MEMBERS ATTENDING THE
8. Now, you will have to click on the “Login” button. the member shall not be allowed to change it subsequently or
cast the vote again.
AGM THROUGH VC/OAVM ARE AS UNDER:
9. After you click on the “Login” button, home page of e-voting
b) Any person, who acquires shares of the company and becomes a
will open. 1. Members will be provided with a facility to attend the AGM 5. Members who would like to express their views/ask questions
member of the company after dispatch of the notice of AGM and
through VC/OAVM through the NSDL e-voting system. during the meeting need to register themselves as a speaker by
Step 2: How to cast your vote electronically on the NSDL e- holds shares as on the cut-off date i.e. Tuesday, July 20, 2021,
Members may access by following the steps mentioned above for sending their request mentioning their name, demat account
voting system? may obtain user ID and password by sending a request
access to NSDL e-voting system. After successful login, you nu mber / folio no., e-mail ID and mobile number at
1. After successful login at Step 1, you will be able to see all the at evoting@nsdl.co.in. However, if you are already registered
can see link of “VC/OAVM link” placed under “Join General shares@drreddys.com on or before July 24, 2021, (6:00 pm IST).
companies “EVEN” in which you are holding shares and whose with NSDL for e-voting, then you can use your existing User ID
meeting” menu against company name. You are requested to
voting cycle and general meeting is in active status. and Password for casting your vote. If you forget your password, 6. Those members who have registered themselves as speakers
click on VC/OAVM link placed under Join General Meeting
you can reset the password by using ‘forgot User in advance will only be allowed to express their views/ask
2. Select “EVEN” of Dr. Reddy's Laboratories Limited to cast your menu. The link for VC/OAVM will be available in
details/Password?’ or ‘physical user reset password?’ option questions during the meeting.
vote during the remote e-voting period/during the general Shareholder/Member login where the EVEN of company will
available on www.evoting.nsdl.com or contact NSDL at the 7. The company reserves the right to limit the number of
meeting. For joining a virtual meeting, you need to click on be displayed. Please note that the members who do not have
following toll free nos.: 1800-1020-990/1800-224-430. speakers depending on the availability of time at the AGM.
“VC/OAVM” link placed under “Join General Meeting”. the User ID and Password for e-voting or have forgotten the User
c) The members who have cast their vote by remote e-voting prior ID and Password may retrieve the same by following the remote
3. Now you are ready for e-voting as the voting page opens. 8. In case any assistance is needed, members may contact:
to the AGM may also attend the AGM but shall not be entitled e-voting instructions mentioned in this notice to avoid last
4. Cast your vote by selecting appropriate options i.e. assent or to cast their vote again. minute rush. a. Mr. Amit Vishal, Senior Manager, NSDL at amitv@nsdl.co.in
dissent, verify/modify the number of shares for which you wish or at telephone number: 022-24994360.
d) The facility for voting through electronic voting system shall 2. Members are encouraged to join the meeting through laptops
to cast your vote and click on “Submit” and also “Confirm”
be made available during the AGM and only those members, who instead of mobiles for better experience. b. Ms. Pallavi Mhatre, Manager, NSDL at pallavid@nsdl.co.in
when prompted.
will be present in the AGM through VC/OAVM facility and have or at telephone number: 022-24994545.
3. Further members will be required to allow camera usage on their
5. Upon confirmation, the message “Vote cast successfully” will not cast their vote on the resolutions through remote e-voting
systems and use a good speed internet to avoid any disturbance c. NSDL at evoting@nsdl.co.in or at toll free
be displayed. and are otherwise not barred from doing so, shall be eligible
during the meeting. nos.: 1800-1020-990/1800-224-430.
to vote through e-voting system in the AGM.
6. You can also take the printout of the votes cast by you by 4. Please note that participants connecting through mobile devices By order of the board
clicking on the print option on the confirmation page. e) The voting rights of members shall be in proportion to the shares
or tablets or laptop, via mobile hotspot may experience
held by them, of the paid-up equity share capital of the company
audio/video loss due to Nuctuation in their respective network. It
is
7. Once you confirm your vote on the resolution, you will not be ID), name, client master or copy of consolidated account therefore Place: Hyderabad
as on the cut-off date of Tuesday, July 20, 2021. recommended to
allowed to modify your vote. use stable Wi-Fi or Date: May 14, 2021
statement, PAN (self attested scanned copy of PAN card), LAN connection to
Aadhar (self f) Mr. G Raghu Babu, partner of M/s. R & A Associates,
Process for those members whose e-mail IDs are not registered mitigate any kind of
practicing company secretary, Hyderabad (membership no.
with the depositories/company for procuring User ID and Password aforesaid glitches.
4448 & certificate of practice no. 2820) has been appointed
and registration of e-mail IDs for e-voting for the resolutions set
by the board as the scrutinizer to scrutinize the voting
out in this notice:
through electronic means during AGM and remote e-voting
a) In case shares are held in physical mode please provide folio no., process in a fair and transparent manner.
name of member, scanned copy of the share certificate (front
g) At the AGM, at the end of discussion on the resolutions on
and back), PAN (self attested scanned copy of PAN card), Aadhar
which voting is to be held, the chairman shall, with the
(self attested scanned copy of Aadhar card) by e-mail
assistance of scrutinizer, order voting through electronic
to shares@drreddys.com or bsshyd@bigshareonline.com
means for all those members who are present at the AGM
b) In case shares are held in demat mode, please provide DP ID through VC/OAVM but have not cast their votes
& Client ID (16 digit DP ID & Client ID or 16 digit beneficiary electronically using the remote e-voting facility.
Dr. Reddy’s Laboratories Not Annual Report 2020-
Sandeep Poddar
Company Secretary
Dr. Reddy’s Laboratories Limited

NOTES

“
I strongly believe that the only way we can grow and thrive, not just survive, in the future i

DR. K ANJI REDDY

DR. REDDY’S LABORATORIES LIMITED
CIN:L85195TG1984PLC004507
8-2-337, Road No.3, Banjara Hills,
Hyderabad 500 034, India
www.drreddys.com

This report is published on 100% recycled paper and textile waste

at zero cost, based on waste circularity principle.