| Dear Stakeholder, |
| The weather is not the only thing that’s changing. The global business climate and the social environment are equally tumultuous. All three independently and by their confluence, are influencing businesses in unique ways. |
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| The generics industry too is feeling the impact. The economic slowdown, a large patent expiry pipeline, authorised generics, pricing pressures, changing regulatory frameworks and an enhanced demand for generics by insurance companies are giving birth to new market paradigms. |
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| Environmental concerns about water usage and discharge are rising to the forefront. On the social front, the impact of various global epidemics such as Swine Flu, SARS et al. and affordability have attracted unprecedented media attention to the industry, resulting in intense government-industry-society engagement. |
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| At Dr. Reddy’s, we are going beyond legacy and reinforcing our connect with stakeholders on all three fronts. We are proactively harnessing emerging opportunities and adopting mechanisms to mitigate risks. |
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| Market Connect |
| It was a year of co-optition. Our strategic association with GlaxoSmithKline helped us tap emerging markets. |
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| This enabled us to not only provide affordable medicine to a larger population, but also cater to a broader spectrum of medical needs. |
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| We continued to innovate and develop alternatives for complex products with limited competition. |
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| Vertical integration helped us weather a low pricing storm in Germany, caused by the shift from a regular market to a tender-based one. We are now well-poised to compete aggressively in this market. |
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| Quality Connect |
| Quality continues to be our prime focus. It is the foundation on which we have gained the trust of doctors and patients worldwide. We initiated two key quality concepts this year. |
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Quality by Design (QbD) |
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We are adopting a structured approach to build in quality across the entire process, right from the design stage. The objective is to ensure that there is zero error right from initial development to scale-up. |
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Quality across the supply chain |
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We constantly share our best practices with our strategic partners who help us make the intermediates. This year we covered a lot of ground and witnessed significant success in our endeavour to embed our quality systems into their organisations. |
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Customer Audits |
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Several customer audits conducted during the year confirmed that we have robust processes in place. These audits were also a source of learning and helped refine our systems and processes even further. |
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Product Responsibility |
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This year, for the first time, we faced a recall in the US. The entire exercise was handled in a responsible and transparent manner. Lots of lessons were learnt from this experience. Additional systems and controls have been instituted to eliminate the recurrence of such an incident. |
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| Talent Connect |
| New investments, new facilities and new capabilities all translated into an increase of over 2,500 employees. The focus during the year was to share our Company’s values and culture with our new family members. Thereby, reinforcing the paramount importance we give to safety, inculcating best practices and sharing with them the lessons learned. |
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| Communication aimed at aligning vision, roles and responsibilities took centre stage. |
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| Environment Connect |
| This year we introduced a holistic approach to product development and process selection, which has led to environment impacts being factored in right from the start. Investments required to preserve the environment are budgeted and form an integral part of the selection criteria. |
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| Our commitment to pursue environmental goals ensures that environmental performance is integrated at Dr. Reddy’s and remains the foundation of our past and future successes. |
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| Community Connect |
| Caring for communities comes naturally to Dr. Reddy’s and commendable work has been done in this area over the years through Dr. Reddy’s Foundation. The big change this year was the active participation of employees in social interventions. They helped identify the needs of the local community and devised suitable programmes that not only catered to them but also leveraged the core competency of the organisation. This has helped weave a symbiotic relationship between Dr. Reddy’s and local communities. |
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| Our performance across the triple bottom line is not due to one or two activities or interventions. It is because the team understands the core philosophy of sustainability and having experienced its positive outcomes, is self-motivated to go beyond and make a difference. |
| Regards,
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| K. Satish Reddy |
