MIRA INFORM REPORT

Business information report

1. Summary Information

		Country	India
Company Name	DR. REDDYS LABORATORIES LIMITED	Principal Name 1	Dr. K. Anji Reddy
Status	Excellent	Principal Name 2	Mr. K. Satish Reddy
		Registration #	01-004507
Street Address	7-1-27, Ameerpet, Hyderabad – 500016, Andhra Pradesh
Established Date	24.02.1984	SIC Code	--
Telephone#	91-40-23731946/ 23731397/ 26511723/ 55511900/ 66511532	Business Style 1	Manufacturers and Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits.
Fax #	91-40-23731955/ 23734504/ 23739666	Business Style 2
Homepage	www.drreddys.com	Product Name 1	Ciprofloxacin Hydrochloride
# of employees	10,000 (approximately)	Product Name 2	Norfloxacin
Paid up capital	Rs. 846,137,000	Product Name 3	Omerprazole
Shareholders	Foreign Institutional Investors 31.87%	Banking	Allahabad Bank
Public Limited Corp.	--	Business Period	27 years
IPO	--	International Ins.	--
Public Enterprise	--	Rating	Aa (78)
Related Company
Relation - Associates	Country - Germany	Company Name	Betapharm Arzneimittel GmbH
Note	-

2. Summary Financial Statement

Balance Sheet as of	31.03.2010		(Unit: Indian Rs.)
Assets		Liabilities
Current Assets	27,286,000,000	Current Liabilities	16,893,000,000
Inventories	8,974,000,000	Long-term Liabilities	5,632,000,000
Fixed Assets	13,156,000,000	Other Liabilities	750,000,000
Deferred Assets	0	Total Liabilities	23,275,000,000
Invest& other Assets	33,005,000,000	Retained Earnings	58,302,000,000
		Net Worth	59,146,000,000
Total Assets	82,421,000,000	Total Liab. & Equity	82,421,000,000
Total Assets (Previous Year)	71,735,000,000
P/L Statement as of	31.03.2010		(Unit: Indian Rs.)
Sales	44,698,000,000	Net Profit	8,461,000,000
Sales(Previous yr)	39,997,000,000	Net Profit(Prev.yr)	5,609,000,000

MIRA INFORM REPORT

Report Date :

01.06.2011

IDENTIFICATION DETAILS

Name :	DR. REDDYS LABORATORIES LIMITED

Registered Office :	7-1-27, Ameerpet, Hyderabad – 500016, Andhra Pradesh

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	24.02.1984

Com. Reg. No.:	01-004507

Capital Investment / Paid-up Capital :	Rs. 846.137 Millions

CIN No.: [Company Identification No.]	L85195AP1984PLC004507

TAN No.: [Tax Deduction & Collection Account No.]	HYDD00080D

Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

Line of Business :	Manufacturers and Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits.

No. of Employees :	10,000 (approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (78)

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

Maximum Credit Limit :	USD 230000000

Status :	Excellent

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is an old, well – established and a reputed company engaged in manufacturing and marketing of pharmaceuticals. The company manufacturers wide range of pharmaceuticals products in India and Overseas. The company is doing good in business and profitability. Directors are reported to be experienced, respectable and resourceful businessmen. Trade relations are fair. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings under usual trade terms and conditions.

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	7-1-27, Ameerpet, Hyderabad – 500 016, Andhra Pradesh, India
Tel. No.:	91-40-23731946/ 23731397/ 26511723/ 55511900/ 66511532
Fax No.:	91-40-23731955/ 23734504/ 23739666
E-Mail :	drl@hd1.vsnl.net.in corpcom@drreddys.com vasudevan@drreddys.com pavanknvs@drreddys.com ssrinivasan@drreddys.com nikhilshah@drreddys.com shares@drreddys.com
Website :	www.drreddys.com

Corporate Office/ Media Relations:	Greenlands, Ameerpet, Hyderabad – 500 016, Andhra Pradesh, India.
Tel. No.:	91-40-23731946/ 47/ 48/ 49/ 50/ 66511620
Fax No.:	91-40-23731955/ 66511621
E-Mail :	mythilim@drreddys.com corpcom@drreddys.com
Website :	www.drreddys.com

Administrative Office:	Generics Survey No. 41, FTO Unit, 3 Bachupally Ranga Reddy Disc, Hyderabad - 500123, Andhra Pradesh, India

Custom Pharmaceuticals Services/ Discovery Research :	Bollaram Road, Miyapur, Hyderabad – 500049, Andhra Pradesh, India
Tel No.:	91-40-23043569/ 23045439
Fax No.:	91-40-23044044/ 23045438
E-Mail :	cpsgen@drreddys.com

Plants (In India) :	Bulk Drugs – I, II, III and IV · Plot Nos. 137, 138 and 146, IDA Bollarum, Jinnaram Mandal, Medak District - 502 320, Andhra Pradesh · Plot Nos. 110 and 111, IDA Bollarum, Jinnaram Mandal, Medak District - 502 320, Andhra Pradesh · Plot Nos. 116, IDA Bollarum, Jinnaram Mandal, Medak District - 502 320, Andhra Pradesh · Plot No. 9/A, Phase III, IDA Jeedimetla Ranga Reddy District – 500 055, Andhra Pradesh · Bulk Drugs – V Peddadevulapally, Tripuraram Mandal, Nalgonda District – 508207, Andhra Pradesh, India · Bulk Drugs – VI IDA Pydibheemavaram, Ransthal Mandal, Srikakulam District – 532409, Andhra Pradesh · Bulk Drugs – IX IDA Pydibheemavaram, Ransthal Mandal, Srikakularrf Dist, AP 532 409 Formulations · I – IDA Bollaram Jinnaram Mandal, Medak District – 502320, Andhra Pradesh, India · II- Survey No. 42, Bachupally Quthbullapur Mandal, Ranga Reddy District – 500123, Andhra Pradesh, India · III – R S No. 63/3 and 63/4, Thiruvandarkoil Mannvipet, Pondicherry – 605102, Tamil Nadu, India · IV – Ward – F, Block –4, Adavipolam, Yanam, Pondicherry – 533465, Tamil Nadu, India · V – Plot No. A-3 to A-6, Phase 1-A, Verna Industiral Estate, Verna, Goa – 403722 · VI – Khol, Nalagarh, Solan, Nalagarh Road, Baddi – 173205, Himachal Pradesh Generics · Survey No. 41, Bachupally Quthbullapur Mandal, Ranga Reddy District – 500043, Andhra Pradesh, India Boitech/Critical Care/Diagnostics · Survey No.47, Bachupally Quthbullapur Mandal, Ranga Reddy District – 500043, Andhra Pradesh, India Custom Chemical Services/Discovery Research · Bollaram Road, Miyapure, Hyderabad – 500050, Andhra Pradesh, India

Plants (Outside India) :	Riverview Road, Beverly, East Yorkshire, HU 17 Old United Kingdom Huangpujiangzhonglu Kunshan Economic and Technologica Development Zone, Jiangsu Province, China 208-214, York Road, Battersea, London, SW 11-3SD, United Kingdom

Finished Dosage - Generics: (North America)	3600 Arco Corporate Drive, Suite 310 Charlotte, NC 28273.
Tel. No.:	1-866 733-3952

Finished Dosage - Generics: (Europe)	258 Bath Road, Slough, Berkshire, SL 1 4DX
Tel. No.:	0044 1753 5125 00
Fax No.:	0044 1753 6966 77

Foundation:	6-3-655/12, Somajiguda, Hyderabad – 500 082, Andhra Pradesh, India.
Tel. No.:	91-40-65343424/ 23304199/ 1868
Fax No.:	91-40-23301085
E-Mail :	info@drreddysfoundation.org
Website :	www.drreddysfoundation.org

Active Pharmaceutical Ingredients :	8-2-120/76/1/B, 2nd Floor, Ashoka Hitec Chambers, Road No. 2, Banjara Hills - 500034, Hyderabad, India
Tel. No.:	91-40-66470960
Fax No.:	91-40-23541224

Branded Finished Dosages :	Block - III, 5th Floor, White House - Near Lifestyle, Begumpet, Hyderabad – 500016, India
Tel No.:	91-40-66022500

Business Development :	200 Somerset Corporate Blvd. Bridgewater, NJ 08807
Tel. No.:	1 908-203-4984
Fax No.:	1 908-203-4970
E-Mail :	businessdevelopment@drreddys.com

DIRECTORS

Name	Dr. K. Anji Reddy
Designation	Executive Chairman
Qualification	B. Sc. (Tech.), Ph. D.
Date of Joining	24.02.1984
Previous Employment	Managing Director – Standard Organics Limited
Other Directorships	Diana Hotels Limited ICICI Venture Funds Deccan Hospitals Corporation Limited Biotech Consortium India Limited Viral Therapeutic, Inc.

Name	Mr. K. Satish Reddy
Designation	Managing Director and Chief Operating Officer
Qualification	B. Tech., M. S.
Date of Joining	18.01.1993
Previous Employment	Director – Globe Organics Limited
Other Directorships	Diana Hotels Limited DRL Investments Limited Compact Electric Limited Cheminor Investments Limited

Name :	Dr. P. Satyanarayana Rao
Designation :	Director

Name :	Dr. V. Mohan
Designation :	Director

Name :	Dr. Omkar Goswami
Designation :	Director
Date of Appointment :	21.07.2008

Name :	Mr. Ravi Bhoothalingam
Designation :	Director
Date of Appointment :	30.10.2000

Name :	Mr. P.N. Devarajan
Designation :	Director

Name :	Dr. A. Venkateswarlu
Designation :	Director

Name :	Mr. Krishna G. Palepu
Designation :	Director

Name :	Mr. Anupam Puri
Designation :	Non – Executive Director
Date of Appointment :	04.06.2002

Name :	Mr. J P Moreau
Designation :	Director
Date of Appointment :	18.05.2007

Name :	Mrs. Kalpana Morparia
Designation :	Director
Date of Appointment :	05.06.2007

Name :	Mr. Bruce L A Carter
Designation :	Additional Director
Date of Appointment :	21.07.2008

KEY EXECUTIVES

Name	Mr. V. S. Suresh
Designation	Company Secretary

Name	Mr. K. Satish Reddy
Designation	Chief Operating Officer
Qualification	B. Tech., M. S.
Date of Joining	18^th January, 1993
Previous Employment	Director – Globe Organics Limited
Other Directorships	Diana Hotels Limited DRL Investments Limited Compact Electric Limited Cheminor Investments Limited

Name	Mr. G V. Prasad
Designation	Executive Vice Chairman and CEO
Date of Appointment :	08.04.1986

Name	Mr. V. S. Vasudevan
Designation	Chief Financial Officer
Name	Dr. R. Rajagopalan
Designation	President

Name	Mr. Arun Sawhney
Designation	President

Name	Mr. Abhijit Mukherjee
Designation	President

Name	Mr. K. B. Sankara Rao
Designation	Executive Vice President

Name	Mr. Saumen Chakraborthy
Designation	Executive Vice President

Name	Mr. S. Venkatraman
Designation	Senior Vice President

Name	Mr. Vilas M. Dholye
Designation	Senior Vice President

Name	Mr. Ashwani Kumar Malhotra
Designation	Senior Vice President

Name	Mr. C. V. Narayana Rao
Designation	Vice President

Name	Mr. Ranjan Chakraborthy
Designation	Vice President

Name	Dr. N. R. Srinivas
Designation	Vice President

Name	Dr. Javed Iqbal
Designation	Distinguish Research Scientist

Name	Mr. Jaspal Singh Bajwa
Designation	President

Name	Dr. Jayaram Chigurupati
Designation	Executive Vice President

Name	Dr. G. Om Reddy
Designation	Senior Vice President

Name	Mr. B.R. Reddy
Designation	Senior Vice President

Name	Mr. Arvind Vasudeva
Designation	Vice President

Name	Dr. M. Satyanarayana Reddy
Designation	Vice President

Name	Dr. R. Buchi Reddy
Designation	General Manager

Name :	Dr. K. Anji Reddy
Designation :	Executive Chairman
Profile:	He is the founder and the Executive Chairman of Dr. Reddy’s Laboratories Limited. He is also the founder of the Dr. Reddy’s Group, Dr. Reddy’s Research Foundation and Dr. Reddy’s Foundation for Human and Social Development. He is the chairman of the Academy of Human Resources Development and chairman of the Research and Development Committee of the Federation of Indian Chamber of Commerce and Industry (FICCI). He is a member of both the Board of Trade and the Task Force on pharmaceuticals and knowledge-based industries, which was instituted by the Prime Minister. He has been recently honoured with the Padmashree by the Government of India, for his distinguished service in the field of trade and commerce.

Name :	Mr. G.V. Prasad
Designation :	Vice Chariman and Chief Executive Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS on 31.03.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	4289484	3.12
Bodies Corporate	39128328	28.45

(2) Foreign

(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	9451542	6.87
Financial Institutions / Banks	400722	0.29
Insurance Companies	13863068	10.08
Foreign Institutional Investors	43834909	31.87

(2) Non-Institutions
Bodies Corporate	9290565	6.75

Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	13389602	9.73
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	924897	0.87

Any Others (Specify)
Clearing Members	216513	0.16
Non Resident Indians	2750434	2.00
Foreign Nationals	2500	--

Total	169252732	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits.

Products :

Item Code No. [ITC Code] 29419003

Product Description Ciprofloxacin Hydrochloride

Item Code No. [ITC Code] 29420001

Product Description Norfloxacin

Item Code No. [ITC Code] 30049038

Product Description Omerprazole

Exports :

Products :

API’s Finished Formulations

Countries :

All Countries

Imports :

Products :

Chemicals
Packaging Materials
Packaging Machinery

PRODUCTION STATUS (As on 31.03.2008):-

Class of Goods	Unit	Actual Production

Formulations	Million Units	2816
Active Pharmaceutical ingredients and intermediates [API]	Tones	3101
Generics	Million Units	1939.48
Biotechnology – on single shift basis	Grams	73
Custom Pharmaceutical Services	Kilograms	219200

GENERAL INFORMATION

No. of Employees :

10,000 (approximately)

Bankers :

Allahabad Bank,

Industrial Finance Branch, Secunderabad, Andhra Pradesh, India

Bank of Baroda

Khairatabad Branch, Hyderabad, Andhra Pradesh, India

Canara Bank

Basheer Bagh, Hyderabad, Andhra Pradesh, India

Canara Bank, India

Citi Bank

Hyderabad, Andhra Pradesh, India

Global Trust Bank

Secunderabad, Andhra Pradesh, India

HDFC Bank

Hyderabad, Andhra Pradesh, India

The Hongkong and Shanghai Banking Corporation Limited

Hyderabad, Andhra Pradesh, India

State Bank of Hyderabad

Overseas Branch, Hyderabad, Andhra Pradesh, India

State Bank of India

Industrial Finance Branch, Hyderabad, Andhra Pradesh, India

State Bank of Mysore

Industrial Finance Branch, Hyderabad, Andhra Pradesh, India

Standard Chartered Grindlays Bank Limited

Hyderabad, Andhra Pradesh, India

Andhra Bank

Balanagar Branch, Hyderabad – 500016, Andhra Pradesh, India

Facilities :

Secured Loans	31.03.2009 (Rs. In Millions)

From other than banks
Loan from Indian Renewable Energy Development Agency Limited (Note 1)	7.000
Finance lease obligations (Note 2)	19.000

Total	26.000
NOTE: 1. Loan from Indian Renewable Energy Development Agency Limited is secured by way of hypothecation of specific movable assets pertaining to the Solar Grid Interactive Power Plant. The loan is repayable in quarterly installments of Rs.1.48 each quarter and carries an interest rate of 2% per annum. 2. Finance lease obligations represent present value of minimum lease rentals payable for the vehicles leased by the Company
Unsecured Loans	31.03.2009 (Rs. In Millions)

Sales tax deferment loan from the Government of Andhra Pradesh (interest free)	60.000
From banks
Packing credit loans (Note 1)	5715.000
Bank overdraft (Note 2)	218.000
From others (Note 3)	384.000

Total	6377.000

Banking Relations :

Good

Auditors :

Name :

Bharat S. Raut and Company

Chartered Accountants

Joint Venture :

Kunshan Rotam Reddy Pharmaceutical Company Limited (“Reddy Kunshan”), China

Associates :

Betapharm Arzneimittel GmbH, Germany
Beta Healthcare Solutions GmbH, Germany
Beta institute fur sozialmedizinische Forschung und Entwicklung GmbH, Germany
Reddy Holding GmbH, Germany
Lacock Holdings Limited, Cyprus
Reddy Pharma Iberia SA, Spain
Reddy Pharma Italia SPA, Italy
Dr. Reddy’s Laboratories (Australia) Pty. Limited, Australia
Dr. Reddy’s Laboratories SA, Switzerland
Eurobridge Consulting B.V., Netherlands
OOO DRS Limited, Russia
Aurigene Discovery Technologies (Malaysia) Sdn Bhd
Affordable Health Care Limited, New Zealand
Macred India Private Limited, India
Dr. Reddy’s Laboratories ILAC TICARET Limited SIRKETI, Turkey
Jet Generici SRL, Italy (from 30 April 2008)
Dr. Reddy’s Laboratories Louisiana LLC, USA (from 30 April 2008)
Chirotech Technology Limited, UK (from 28 April 2008)
Perlecan Pharma Private Limited, India (from 31 July 2008)
APR LLC
Perlecan Pharma Private Limited, India

Subsidiaries :

DRL Investments Limited, India
Reddy Pharmaceuticals Hong Kong Limited, Hong Kong
OOO JV Reddy Biomed Limited, Russia
Reddy Antilles N.V., Netherlands
Reddy Netherlands BV, Netherlands
Reddy US Therapeutics Inc., USA
Dr. Reddy’s Laboratories Inc., USA
Reddy Cheminor S.A., France
Dr. Reddy’s Farmaceutica Do Brasil Limiteda, Brazil
Cheminor Investments Limited, India
Aurigene Discovery Technologies Limited, India
Aurigene Discovery Technologies Inc., USA
Dr. Reddy’s Laboratories (EU) Limited, UK
Dr. Reddy’s Laboratories (UK) Limited, UK
Dr. Reddy’s Laboratories (Proprietary) Limited, South Africa
OOO Dr. Reddy’s Laboratories Limited, Russia
Promius Pharma LLC (formerly Reddy Pharmaceuticals LLC, USA)
Dr. Reddy’s Bio-sciences Limited, India
Globe Enterprises (a partnership firm in India)
Trigenesis Therapeutics Inc., USA
Industrias Quimicas Falcon de Mexico, S.A.de.C.V., Mexico

Membership :

Confederation of Indian Industry

CAPITAL STRUCTURE

As on 23.07.2010

Authorised Capital : 1200.000 Millions

Paid and Subscribed Capital: Rs. 846.137 Millions

As on 31.03.2009

Authorised Capital :

No. of Shares	Type	Value	Amount

200000000	Equity Shares	Rs.5/- each	Rs.1000.000 millions

Paid and Subscribed Capital:

No. of Shares	Type	Value	Amount

168468977	Equity Shares	Rs.5/- each	Rs.842.000 Millions

Notes:

1. Subscribed and paid-up share capital includes:

(a) 111,732,202 equity shares of Rs.5 each fully paid-up, allotted as bonus shares. Out of total, 34,974,400 shares were allotted by apitalization of General Reserve and 76,757,802 equity shares allotted as bonus shares by apitalization of the Securities Premium Account in earlier years.

(b) 1,052,248 (previous year: 1,052,248) equity shares of Rs.5 each allotted pursuant to a scheme of amalgamation with Standard Equity Fund Limited without payments being received in cash.

I 20,571,768 (previous year: 20,571,768) equity shares of Rs.5 each allotted and 82,800 (previous year: 82,800) equity shares of Rs.5 each extinguished pursuant to a scheme of amalgamation with erstwhile Cheminor Drugs Limited (CDL) without payments being received in cash.

(d) 40,750,000 (previous year: 40,750,000) equity shares of Rs.5 each allotted against American Depository Shares (ADS).

(e) 17,204,304 (previous year: 17,204,304) equity shares of Rs.5 each allotted against Global Depository Receipts (GDR) that were converted into ADS during the year ended 31 March 2002.

(f) 226,776 (previous year: 226,776) equity shares of Rs.5 each allotted to the erstwhile members of American Remedies Limited (ARL) pursuant to a scheme of amalgamation with ARL without payments being received in cash.

(g) 882,832 (previous year: 659,227) equity shares of Rs.5 each allotted to the eligible employees of the Company and its subsidiaries on exercise of the vested stock options in accordance with the terms of exercise under the “Dr. Reddy’s Employees Stock Option Plan, 2002”. (Refer Note 9, Schedule 20).

(h) 72,426 (previous year: Nil) equity shares of Rs.5 each allotted to the eligible employees of the Company and its subsidiaries on exercise of the vested stock options in accordance with the terms of exercise under the “Dr. Reddy’s Employees Stock Option Plan, 2007”.

2. Represents 200 (previous year: 200) equity shares of Rs.5 each, amount paid-up Rs.500/- (rounded off in millions in the Schedule above) forfeited due to nonpayment of allotment money.

3. 914,896 (previous year: 932,568) stock options are outstanding to be issued by the Company on exercise of the vested stock options in accordance with the terms of exercise under the “Dr. Reddy’s Employees Stock Option Plan, 2002” and 156,577 (previous year: 182,778) stock options are outstanding to be issued by the Company on exercise of the vested stock options in accordance with the terms of exercise under the “Dr. Reddy’s Employees ADR Stock Option Plan, 2007”

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		844.000	842.000	840.900
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		58302.000	51749.000	47277.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		59146.000	52591.000	48118.100
LOAN FUNDS
1] Secured Loans		8.000	26.000	34.000
2] Unsecured Loans		5624.000	6377.000	4589.100
TOTAL BORROWING		5632.000	6403.000	4623.100
DEFERRED TAX LIABILITIES		750.000	904.000	0.000

TOTAL		65528.000	59898.000	52741.200

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		13156.000	12108.000	9874.200
Capital work-in-progress		7454.000	4112.000	2457.100

INVESTMENT		25551.000	17038.000	19306.200
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	8974.000	7351.000	6409.300
	Sundry Debtors	10605.000	14197.000	8977.100
	Cash & Bank Balances	3680.000	3844.000	5373.400
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	13001.000	13085.000	12720.200
Total Current Assets		36260.000	38477.000	33480.000
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	14475.000	10502.000	7863.500
	Other Current Liabilities
	Provisions	2418.000	1335.000	4512.800
Total Current Liabilities		16893.000	11837.000	12376.300
Net Current Assets		19367.000	26640.000	21103.700

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		65528.000	59898.000	52741.200

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	44698.000	39997.000	34497.100
		Other Income	2205.000	2982.000	1911.300
		TOTAL (A)	46903.000	42979.000	36408.400

Less	EXPENSES
		Manufacturing Expenses		3847.000	3765.200
		Administrative Expenses and Selling Expenses		10086.000	8641.100
		Raw Material Consumed		14699.000	11460.200
		Excise Duty	33671.000	112.000	845.100
		Employee Cost		686.000	3156.600
		Power & Fuel		3847.000	771.200
		Other Expenditure		286.000	161.200
		TOTAL (B)	33671.000	33563.000	28800.600

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) I		13232.000	9416.000	7607.800

Less	FINANCIAL EXPENSES (D)		160.000	185.000	146.900

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		13072.000	9231.000	7460.900

Less/ Add	DEPRECIATION/ AMORTISATION (F)		2224.000	1936.000	1619.900

	PROFIT BEFORE TAX (E-F) (G)		10848.000	7295.000	5841.000

Less	TAX (H)		2387.000	1686.000	1088.800

	PROFIT AFTER TAX (G-H) (I)		8461.000	5609.000	4752.200

Add	EXTRAORDINARY ITEM		3.800	NA	NA

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		20391.000	NA	NA

Less	APPROPRIATIONS
		Transfer to General Reserve	3063.000	NA	NA
	BALANCE CARRIED TO THE B/S		25792.800	NA	NA

	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	NA	31233.000	23668.000
	TOTAL EARNINGS		NA	31233.000	23668.000

	IMPORTS
		Import Value	NA	6893.000	7357.000
	TOTAL IMPORTS		NA	6893.000	7357.000

	Earnings Per Share (Rs.)		48.25	33.32	--

QUARTERLY RESULTS

PARTICULARS	30.06.2010 1^st Quarter	30.09.2010 2^nd Quarter	31.12.2010 (3^rd Quarter)
Net Sales	12655.700	12968.800	13897.600
Total Expenditure	9556.600	10229.800	10466.300
PBIDT (Excl OI)	3099.100	2739.000	3431.300
Other Income	266.100	523.500	372.100
Operating Profit	3365.200	3262.500	3803.400
Interest	4.600	1.300	5.400
PBDT	3360.600	3261.200	3798.000
Depreciation	572.000	613.500	638.900
Profit Before Tax	2788.600	2647.700	3159.100
Tax	343.800	445.700	531.400
Profit After Tax	2444.800	2202.000	2627.700
Net Profit	2444.800	2202.000	2627.700

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	18.04	13.05	13.05

Net Profit Margin (PBT/Sales)	(%)	24.27	18.24	16.93

Return on Total Assets (PBT/Total Assets}	(%)	21.95	14.42	13.47

Return on Investment (ROI) (PBT/Networth)		0.18	0.14	0.12

Debt Equity Ratio (Total Liability/Networth)		0.38	0.35	0.35

Current Ratio (Current Asset/Current Liability)		2.15	3.25	2.71

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject was came to on track in the year 1984 in Hyderabad, it was established by Dr Anji Reddy with an initial capital outlay of Rs.2.500 Millions. It is a global pharmaceutical company with a presence in more than 100 countries and its doing well with wholly-owned subsidiaries in the US, UK, Russia, Germany and Brazil; joint ventures in China, South Africa and Australia; representative offices in 16 countries; and third-party distribution set ups in 21 countries. The company proven research capabilities and vertically integrated with a presence across the pharmaceutical value chain and it conducts research in the areas of diabetes, obesity, cardiovascular diseases, anti-infectives and inflammation. The Indian based company produces finished dosage forms, active pharmaceutical ingredients and biotechnology products which are marketed globally, with focus on India, US, Europe and Russia.

The company made its beginning with the manufacture of Active Pharmaceutical Ingredients and Intermediates (API) in 1984 and commenced operations with a single drug in a 60-tonne facility near Hyderabad, India. In 1986, the first consignment of that drug, Methyldopa, was shipped to West Germany. In 1988 the company acquired Benzex Laboratories Private Limited to expand its Bulk Actives business and in the next year it acquired American Remedies Limited, a pharmaceutical company based in India. In the year 1993 the company established Dr. Reddy’s Research Foundation and started its Drug Discovery program. The company has membership in WTO since April 1994 and in the same year 1994 the company Makes a GDR issue of USD 48 million.

The Company’s Custom Pharmaceutical Services (CPS) business was formed in the year 2001, and in 2002 conducts its first overseas acquisition – BMS Laboratories Limited and Meridian Healthcare in UK, the company received ASIASTAR Award for Packaging Excellence 2002 for Mintop Forte – Customer Convenience Pack by Asian Packaging Federation in the year. Announced a 15-year exclusive product development and marketing agreement for OTC drugs with Leiner Health Products in the US by the company in the year 2003 and launched Ibuprofen, first generic product to be marketed under the “Dr. Reddy’s” label in the US and it conferred WORLDSTAR Award for Packaging Excellence 2003 For Omez capsules pack with Anti-Counterfeiting Features. The acquisition of Trigenesis gives the company to access drug delivery technology platforms in the year 2004. Dr. Reddy’s Lab increased focus point in CPS business after the acquisition of Roche’s API manufacturing unit, Mexico in the year 2005 and in the same year the company acquired Roche’s API Business at the state-of-the-art manufacturing site in Mexico with a total investment of USD 59 million. Announced the formation of Perlecan Pharma: India’s First Integrated Drug Development Company and again announced India’s first major co-development and commercialization deal for it’s molecule Balaglitazone (DRF 2593), with Rheoscience. It made unique partnership for the commercialization of ANDAs with ICICI Venture, the Best Management Award 2005 by Labour Department; Govt. of Andhra Pradesh, India came to the company. In the year 2006 the company acquired Betapharm- the fourth-largest generics company in Germany for a total enterprise value of? 480 million and received Finance Asia Achievement Awards 2006 for Best India Deal – acquisition of Betapharm. Dr. Reddy’s Lab becomes No.1 pharmaceutical company in India in turnover and profitability as on 2007.

The appreciation and recognition is a role to boost, as part the company has received plenty of awards and applications already, continued that, the company got Pharma Excellence Awards 2006-07 the category of Sustained Growth by The Indian Express, Dun and Bradstreet American Express in Corporate Awards 2007, Best Corporate Social Responsibility Initiative 2007 by BSE – India and Amity Leadership Award for Best Practices in HR in Pharmaceutical Sector. 4^th HR Summit ‘08.

Subject has entered into a settlement agreement with Novartis Pharma AG on January 2008, which involves a stipulation of dismissal of the lawsuits in the United States relating to the Abbreviated New Drug Applications filed by the company for a generic version of rivastigmine tartrate capsules sold under the trade-name Exelon and in same month and year the company has launched Supanac (Diclofenac potassium immediate release 50 mg tablets) in India, increasing its offering in the Rs 27000.000 Millions in NSAID market. Supanac is in-licensed from Applied Pharma Research (APR), Switzerland and is used for Acute Pain management. On February, 2008 the company has entered into an agreement with SkyePharma PLC to undertake a feasibility study of a product utilizing two of SkyePharma’s proprietary drug delivery systems. Dr. Reddy’s Laboratories announced that it has entered into a definitive agreement with The Dow Chemical Company to acquire a portion of Dowpharma Small Molecules business associated with its United Kingdom sites in Mirfield and Cambridge on 1^st April 2008. In the same month of same year Dr.Reddy’s Lab and 7TM Pharma has announced the signing of drug discovery collaboration on selected drug targets in the area of metabolic disorders. Under the terms of the agreement, Dr. Reddy’s and 7TM Pharma will collaborate to identify clinical candidates for pre-selected targets. Both the parties will jointly develop these candidates from the pre-clinical stage up to Phase Iia (proof-of-concept). As on April 2008, the company has acquired Jet Generici Srl, a company engaged in the sale of generic finished dosages in Italy. The deal has been completed via Dr Reddy’s Italian subsidiary.

DIRECTORS:

Ms. Kalpana Morparia and Dr. J P Moreau retire by rotation at the ensuing Annual General Meeting scheduled on 23 July 2010 and are eligible for re-appointment.

The Board of Directors had appointed Dr. Ashok S Ganguly as an additional director on the Board of the Company on 23 October 2009. He will hold this office till the conclusion of 26^th Annual General Meeting of the Company scheduled on 23 July 2010. Requisite notice under Section 257 of the Companies Act, 1956 has been received from a member proposing his appointment. It is proposed to appoint him as a Director of the Company liable to retire by rotation. The resolution for the same has been included in the notice of the 26^th Annual General Meeting scheduled to be held on 23 July 2010.

The brief profiles of Ms. Kalpana Morparia, Dr. J P Moreau and Dr. Ashok S Ganguly are given in the Corporate Governance section of the Annual Report for reference of the members.

RESEARCH AND DEVELOPMENT (R AND D):

1. Specific areas in which R AND D activities were carried out by the Company are: The research and development activities can be classified into several categories, which run parallel to the activities in the principal areas of operations:

- Global Generics, where the research and development activities are directed at the development of product formulations, processvalidation, bioequivalence testing and other dataneeded to prepare a growing list of drugs that are equivalent to numerous brand name products for sale in the emerging markets or whose patents and regulatory exclusivity periods have expired or are nearing expiration in the highly regulated markets of the United States and Europe. Global Generics also include the biologics business, where research and development activities are directed at the development of biologics products for the emerging as well as highly regulated markets. The new biologics research and development facility caters to the highest development standards, including cGMP, Good Laboratory Practices and bio-safety level IIA.

- Pharmaceutical Services and Active Ingredients, where the research and development activities concentrate on development of chemical processes for the synthesis of active pharmaceutical ingredients and intermediates (‘API’) for use in the Global Generics segment and for sales in the emerging and developed markets to third parties. The research and development activities also support the custom pharmaceutical line of business, where they continue to leverage the strength of the process chemistry and finished dosage development expertise to target innovator as well as emerging pharmaceutical companies. The research and development is directed toward providing services to support the entire pharmaceutical value chain – from discovery all the way to the market.

- Proprietary Products, where they are actively pursuing discovery and development of new molecules, sometimes referred to as ‘New Chemical Entity’ or ‘NCEs’ and Differentiated Formulations. The research programs focus on the following therapeutic areas:

Metabolic disorders
Cardiovascular disorders
Bacterial infections
Pain and inflammation

They are focusing on an integrated research strategy to build a coherent pipeline of New Chemical Entities and Differentiated Formulations with critical mass and demonstrate repeated success in the chosen therapeutic

area.

MANAGEMENT DISCUSSION AND ANALYSIS

Established in 1984, Dr. Reddy’s Laboratories (Dr. Reddy’s’ or the Company’) is an integrated global pharmaceutical company committed to providing affordable and innovative medicines through its three core

businesses:

- Global Generics, which includes branded and unbranded prescription and over-the-counter (OTC) drug products.

- Pharmaceutical Services and Active Ingredients (PSAI), comprising Active Pharmaceutical Ingredients and Custom Pharmaceutical Services.

- Proprietary Products, comprising Generic Biopharmaceuticals, New Chemical Entities (NCEs), Differentiated Formulations and a dermatology focused specialty company

- Promius TM Pharma.

The Company has a strong presence – in highly regulated markets such as the United States, the United Kingdom, Germany, as well as in emerging markets including India, Russia, Venezuela, Romania and certain CIS countries.

STRATEGY:

The Company’s strategy is to combine industryleading science and technology, product offering and customer service with execution excellence to provide affordable and innovative medicines for healthier lives. The key elements of Dr. Reddy’s strategy include:

STRENGTHENING OF SCIENCE AND TECHNOLOGY:

The Company’s strengths in science and technology range from synthetic organic chemistry, formulation development, biologics development to small molecule based drugdiscovery. Such expertise enables the creation of unique competitive advantages with an industryleading Intellectual Property (IP) and technologyleveraged product portfolio.

OFFERINGS:

Global Generics

* Branded Generics

The Company seeks to have a portfolio that is strongly differentiated and offers compelling advantages to doctors and patients.

- Unbranded Generics

It aims to ensure that its customers – pharmacy chains and distributors - are first to market’ the Company’s products; and that they have high product availability combined with low inventories resulting in superior inventory turns while addressing the customer’s needs. Vertical integration and process innovation ensures that the Company’s products remain competitive.

PSAI:

The Company’s product offering is geared to offer IP and technology-advantaged products to enable launches ahead of others at competitive prices. In the area of services, it aims to offer niche product service capabilities, technology platforms, and competitive cost structures to innovator companies.

PROPRIETARY PRODUCTS

* Differentiated Formulations:

The Company’s emerging Differentiated Products portfolio, which comprises of new, synergistic combinations as well as technologies that improve safety and / or efficacy by modifying pharmacokinetics of existing medicines, is focused on significant clinically unmet needs. The Company is also investigating new indications for existing medicines.

* New Chemical Entities (NCEs) The Company is also focused in the discovery, development, and commercialization of novel small molecule agents in therapeutic areas of bacterial infections, metabolic disorders, and pain / inflammation.

- Generic Biopharmaceuticals:

The Company aims to deliver equivalents of MANAGEMENT DISCUSSION AND ANALYSIS proprietary biopharmaceuticals as affordable alternatives through process development as well as relevant clinical research.

EXECUTION EXCELLENCE (BUILDING BLOCKS):

Execution excellence provides the framework to create sustainable customer value across all the activities of the Company. The key elements of execution excellence as practiced in the company are:

* Lean Manufacturing

Eliminating waste and reducing cycle time with focus on capacity constrained resources.

* Quality by Design Building quality into all processes and using quality tools to eliminate process risks.

* Principles of the Theory of Constraints in supply chain and product development This ensures high availability with low inventory through a pull-based logistics system. It also ensures speed in product development through Critical Chain Project Management (CCPM).

- Leadership Development Developing leaders as well as enhancing leadership behavior across the organization.

KEY EVENTS

FINANCIAL HIGHLIGHTS:

- Consolidated revenues for 2009-10 was Rs. 70,277 million.

Excluding revenues from sumatriptan - Dr. Reddy’s Authorized Generic version of Imitrexr which was launched in 2008-09 – the Company’s overall revenue grew by 9%. In US

In the US market, 2009 saw Dr. Reddy’s enter the list of the Top 10 generic companies. The Company has broken into the Top 10 league by improving its market share from 2.1% to 2.7%. This is a significant milestone, and corroborates Dr. Reddy’s longer term target of becoming a leading generics player in the US dollar terms, 2009-10 revenue was US$ 1.56 billion, compared to US$ 1.37 billion in the previous year. It may be noted that the Company’s revenue has been rising at a CAGR of 23% over the last 10 years.

- Adjusted EBITDA of Rs. 15,828 million is highest among pharmaceutical companies in India in the year 2009-10.

- Return on Capital Employed (RoCE) at 17% for 2009-10 as against 14% in 2008-09. This increase is attributable to:

· Core business growth of India, Russia and North America;

· Rationalization of business model; and

· Cost optimization and restructuring initiatives.

BUSINESS HIGHLIGHTS:

- In the US market, 2009 saw Dr. Reddy’s enter the list of the Top 10 generic companies.

The Company has broken into the Top 10 league by improving its market share from 2.1% to 2.7%. This is a significant milestone, and corroborates Dr. Reddy’s longer term target of becoming a leading generics player in the US.

At 6.5%, the Company’s growth in the US generics market was one percentage point higher than the average growth recorded by all the generic firms in the industry. In doing so, Dr. Reddy’s achieved a prescription growth of 40%.

Nine new products were launched in the US generics market in 2009-10, including one overthe- counter (OTC) product. The key launches include nateglinide, omeprazole magnesium (OTC), metformin glyburide and fluoxetine DR.

- India and Russia, both key emerging markets for the Company, registered impressive performance

In India, branded formulation revenues grew by 20% to Rs. 10,158 million. New product revenues contributed to 5% of total revenues from India formulations. The Company’s new product rank improved from 25^th in 2008-09 to 8^th in 2009-10.

In Russia, Dr. Reddy’s revenues grew by 25%

- out-performing market growth of 8% in value terms (Pharmexpert MAT, March 2010).

- Germany

Ongoing healthcare reforms and changing market dynamics continue to cause pricing pressures, leading to low margins. To remain competitive in this scenario, the Company has rationalized its field force and moved towards a lean operating model. In 2009-10, the Company recorded a one-time charge of Rs. 912 million related to termination benefits payable to a set of identified employees.

Moreover, the results of additional tenders in Germany led to further deterioration in the market dynamics, thereby resulting in the Company recording an impairment loss of:

* Rs. 2,112 million for the product related intangibles.

* Rs. 5,147 million towards carrying value of goodwill, and

* Rs. 1,211 million towards the trademark/brand, beta’, which forms a significant portion of the betapharm cash generating unit.

- Successful audits of the Company’s formulations and chemical plants 2009-10 saw successful US Food and Drug Authority (USFDA) audits of the Company’s formulation plants at Bachupally, Hyderabad and Vishakapatnam, the ANVISA audit of the formulation plant at Vishakapatnam and the MHRA audit of the chemical plants.

- Product pipeline continues to show impressive growth potential

* The Company has filed 158 cumulative Abbreviated New Drug Applications (ANDAs) up to date. As on 31 March 2010, there were 73 ANDAs pending approval at the USFDA, of which 38 are Para-IV filings and 12 have the status of first to file’.

* It has filed 19 Drug Master Files (DMFs) in the US during the year, taking the total filings to 156. It also filed five DMFs in Canada, eight in Europe, and four in the Rest of the World (RoW).

* In addition, Dr. Reddy’s has generated a sound near-term pipeline of limited competition / high margin opportunities of generic products and biosimilars,

STRATEGIC PARTNERSHIPS:

- Partnering with GlaxoSmithKline plc Dr. Reddy’s has entered into a strategic partnership with GlaxoSmithKline plc (GSK) to develop and market select products across emerging markets outside India. This partnership will expand the Company’s reach in emerging economies, and leverage its product portfolio and process development strengths across Generic and Differentiated Formulations with GSK’s market knowledge and presence in such markets. The products will be manufactured by Dr. Reddy’s; and will be licensed and supplied to GSK in markets such as Latin America, Africa, the Middle East, and Asia Pacific excluding India.

TRENDS IN GLOBAL MARKETS:

Note: Global market share numbers referred to in this and subsequent sections are based on latest available reports from IMS Health Inc. According to IMS Health Inc., the global pharmaceutical market grew by 7% in 2009 to reach US$ 837 billion on a constant-dollar basis

- compared with 4.8% growth in 2008. In 2010, the market is expected to grow by 4% to 6% in constant dollar terms, thus exceeding US$ 850 billion. This growth will be largely driven by strong overall growth in the emerging

countries, as well as the rising influence of healthcare access and funding on market demand. Moreover, the global market is expected to grow at 5% to 8% CAGR over the next five years, reaching an anticipated US$ 1.1 trillion in 2014.

KEY GLOBAL MARKET TRENDS:

- Emerging markets are set to play a pivotal role in future pharmaceutical successes Currently, emerging pharmaceutical markets are typically small. However, their rapid growth vis-a-vis the more regulated markets make them attractive prospects for the pharmaceutical industry. Rapidly growing economies, increasing population and greater health awareness combined with larger incomes to spend on healthcare will drive the growth of pharmaceuticals in emerging markets. By 2017, IMS forecasts revenues from emerging markets at US$ 290 billion to US$ 320 billion, with a CAGR of 12% to 15%.

- Therapy area growth dynamics will be driven by innovation cycles and unmet needs As the pharmaceutical industry’s research and development (R AND D) programs adjust to creating low-cost generic options in many chronic therapy areas, higher growth will occur in those areas where there is significant unmet clinical need. In oncology, diabetes, multiple sclerosis and HIV, annual growth is expected to exceed 10% right up to 2014, as new drugs are brought to market, patient access is expanded and funding is redirected from other areas where lower-cost generics take over.

- Transition from small molecules to big molecules, or the expansion of Biologics in developed markets; and branded and off-patent small molecule medicines in fast growing emerging markets In the developed markets of the US, Europe and Japan, the industry is perceptibly moving away from the small molecule driven sales model, towards targeting specialist secondary care indications through the use of high-value biologic therapies. The key driver of sales growth up to year 2014 will be injectable biologic therapies for the treatment of more secondary care indications.

In emerging markets, branded and off-patent medicines will continue to dominate, with occasional breakthroughs and revenue spikes coming from Biologics. Primary care drugs will still drive sales in these markets, with medicines for infectious diseases and endocrine/metabolic disorder experiencing the largest growth.

- Mergers, acquisitions and strategic partnerships are here to stay:In line with recovery from the global economic downturn, the number of MandA and strategic deals has been on the rise throughout the second half of 2009. While neither MandA nor strategic partnerships can totally offset sales declines from the impending patent cliff of 2011, these partnerships and mergers will offer improved profitability because of higher combined sales, cost saving opportunities and operational synergies.

A number of events may occur in 2010 that could have long term effects on the pharmaceutical market. These include actual initiation of the comprehensive healthcare reform in the US and cost-saving legislative or regulatory actions in other countries.

REGIONAL PERFORMANCE:

- The US market’s growth to slow down in 2010

In 2009, the US market grew by 5.5% to US$ 322 billion – thus crossing US$ 300 billion mark for the first time. However, the growth is expected to slow down to somewhere between 3% and 5% in 2010. This is due to growing substitution, taking the margin away from innovator brands in favor of generics. Generics have been growing much faster than brands due to the enormous number of patent expiries. Consequently, generics now account for more than 70% of the total US prescriptions.

- Other mature markets: Europe and Japan Europe contributed US$ 247 billion to the total pharmaceutical market, and showed a growth of 4.8% in 2009 versus 7% in 2008, in constant dollar terms. The expected market growth in Europe is in the 3% to 5% range in 2010. While Europe is seeing increased demand from an ageing population and for preventive care, growth is being hindered by constrained government healthcare budgets, and payer agencies using contracting and auctions to control costs. The Japanese pharmaceutical market grew by 7.6% to US$ 90 billion in 2009, versus 2.1% growth in 2008.

- Pharmerging’ markets in the aggregate sustain strong growth:

Seven pharmerging’ countries – Brazil, Russia, India, China, South Korea, Turkey and Mexico – are expected in aggregate to grow by 12% to 14% in 2010, and a CAGR of 13% to 16% over the next five years. China’s

pharmaceutical market is expected to grow at over 20% annually, and contribute 21% of overall global growth right up to 2013. Russia and Turkey may be negatively impacted by new measures intended to reduce the level of healthcare spending.

TRENDS IN NORTH AMERICA:

- Patent cliff to drive the generics market through 2014

The impending 2011 patent cliff is set to erode US$ 78 billion in global branded sales from drugs facing patent expiry over 2010-14. This is in addition to another US$ 32 billion from continued erosion of already expired brands. The patent cliff will be a major catalyst for the growth of generic pharmaceutical companies. Generics will be an aggressive driver of sales and, in the process, deliver cheaper drugs for all.

- US healthcare reforms

On 21 March 2010, with the US Congress passing The Patient Protection and Affordable Care Act, there are expectations of significant changes in the US pharmaceutical market. There are three parts to the US healthcare reform. The first is expanding healthcare coverage to citizens, mostly those employed in smaller companies, the unemployed and reducing co-payments for Medicaid – the federal insurance program for the poor. This should boost volumes for generic companies in the long term. The second is a higher emphasis on insurance regulation and access. There will be new regulations governing the insurance industry that will prohibit the denial of coverage due to pre-existing diseases, and ban placing life-time value limits on policy coverage. Indirectly, these reforms, too, should help improve overall generic penetration, and hence the opportunity for Indian pharmaceutical companies. The third part consists of regulations and data exclusivity protection in the biologics drugs space. The legislation grants innovator firms 12 years of data protection, and allows the first

interchangeable biosimilar 18 months of exclusivity. This may affect Dr. Reddy’s entry in biologics in the US market.

TRENDS IN INDIA :

The Indian pharmaceutical market has seen a CAGR of about 14% in the last five years. It continues to be highly fragmented and dominated by Indian companies. The domestic pharmaceutical industry grew by 18% in March Rapidly growing economies, increasing population and greater health awareness combined with larger incomes to spend on healthcare will drive the growth of pharmaceuticals in emerging markets.

2010 (ORG’s moving annual total, or MAT) versus 10% in March 2009.

Acute therapy dominates, with a share of over 75% of the total market value. The chronic segment has registered a growth of 21%, versus 16% in the acute segment. Anti-infectives grew by 14%, respiratory and dermatology by 21%, cardiac by 21% and CNS by 20%.

The Government of India’s Vision 2015 statement indicates an 18% plus CAGR for the pharmaceutical sector, translating to a doubling of revenues over the next five years. According to this report, growth will be driven by all

verticals domestic formulations, generics exports, and outsourcing. By 2015, the report expects specialty and super-specialty therapies to account for 45% of the market. Growing lifestyle disorders, particularly metabolic disorders like diabetes, obesity and hypertension, coronary heart disease, cardiovascular, neuropsychiatry and oncology drugs are likely to gain significance.

MARKET PERFORMANCE REVENUES:

The Company’s consolidated revenues increased marginally by 1% to Rs. 70,277 million (US$ 1.56 billion) in 2009-10. The relevant details are:

* Excluding sumatriptan, the Authorized Generic version of Imitrexr, revenues grew by 9% from Rs. 62,253 million in 2008-09 to Rs. 67,734 million in 2009-10. PSAI grew by 9% and Global Generics by 8%.

- In 2008-09, the Company launched sumatriptan tablets in North America. This contributed to Rs 2,543 million in 2009-10, versus Rs. 7,188 million in 2008-09. In 2009-10, share of revenue from the international businesses stood at 82%, with 18% coming from India. The revenue composition between geographies changed considerably primarily due to sale of sumatriptan in the US. As a result, North America (US and Canada contributed to 30% of total revenues in 2009- 10, versus 35% last year. Europe accounted for 24% of total sales in 2009-10, compared to 26% in 2008-09. Russia and other CIS countries contributed to 13% of total revenues. And India delivered 18% of total revenues in 2009-10 from 17% in 2008-09.

GLOBAL GENERICS BUSINESS:

Global Generics revenues were at Rs. 48,606 million in 2009-10, versus Rs. 49,790 million in 2008-09.

North America:

North America revenues dropped by 15% to Rs. 16,817 million in 2009-10 - largely due to the lower sales from sumatriptan during the year.

As mentioned earlier, sumatriptan contributed Rs. 2,543 million in 2009-10, compared to Rs. 7,188 million in 2008-09. Excluding sumatriptan, Dr. Reddy’s North American generics portfolio witnessed 13% growth. During 2009-10, the Company launched nine new products, including one OTC offering.

These new launches - for instance, nateglinide, omeprazole magnesium, metformin glyburide, fluoxetine DR and others – contributed Rs. 763 million or 5% of total North America revenues. OTC revenues grew by 59% to Rs. 1,575 million during 2009-10 from Rs. 992 million in 2008-09.

India:

Revenues in India grew by 20% to Rs. 10,158 million in 2009-10 – driven by volume growth of 16%, new product led growth of 6% and a price de-growth of 2%. New products contributed to 5% of total revenues. The Company’s revenue growth has outperformed a market growth of 18% (ORG IMS March 2010, MAT).

Dr. Reddy’s top-10 brands accounted for revenues of Rs. 3,845 million (38% of India formulations revenue). Some of the details are:

* Omezr and Omez DRr, the Company’s brands of omeprazole, grew by 26% compared to a market growth of 18%. OmezTM now accounts for 50% of the total market.

* RedituxTM, the Company’s brand of rituximab, grew by 17%. It continues to be the only biosimilar launched in India so far. The Dr. Reddy’s brand - accompanied by various awareness initiatives – led to this high growth.

* Aided by a focused market campaign, revenues from RazoTM and Razo-DTM, the Company’s brand of rabeprazole, grew by 18%. The brand has a market share of around 13%.

* MintopTM, Dr. Reddy’s brand of minoxidil, grew by 14%, and is ranked first with a market share of over 42%.

- Stamlor, the Company’s brand of amlodipine, grew by 12%, and is ranked first with a market share of over 21%.

Russia and Other CIS Countries:

Dr. Reddy’s outperformed the market in Russia. While the Russian pharmaceutical market grewby 8% in 2009-10, the Company grew its sales by 25%. Growth was driven by strong contributions from the OTC segment as well as prescriptionsales. Key brands such as Nise, Cetrine, Keterol, Omez and Ciprolet played a major role. At present, Dr. Reddy’s accounts for 1.39% market share in value terms (Pharmexpert MAT, March 2010).

Table 3 gives the revenues from the Company’s top five brands in Russia. Revenues from other CIS countries increased marginally by 4%.

Europe:

Revenues from Europe dropped by 19% to Rs. 9,643 million. This was largely due to revenues from the Company’s German subsidiary, betapharm, decreasing by 26% - from Rs. 9,854million in 2008-09 to Rs. 7,298 million in 2009-10. betapharm’s revenue decline was on account of severe pricing pressures due to Germany’s implementation of the lowest bid wins’ tender system. Revenues from rest of Europe increased by 15% to Rs. 2,345 million.

Rest of the World (RoW):

Revenues from RoW markets increased by 48% to Rs. 2,868 million in 2009-10. This was largely contributed by Venezuela, New Zealand and South Africa.

PHARMACEUTICAL SERVICES AND ACTIVE INGREDIENTS (PSAI) BUSINESS:

Revenues from PSAI grew by 9% to reach Rs. 20,404 million in 2009-10. International markets accounted for 87% of PSAI’s top-line, increasing by 8% to Rs. 17,758 million.

* Revenues from Europe grew by 8% to Rs. 6,653 million in 2009-10, primarily on account of increased sale of gemcitabine, clopidogrel and montelukast. This was partially offset by fall in the sales of ramipril and

olanzapine.

* Revenues from North America fell by 5% to Rs. 3,672 million. This was mostly on account of decrease in sales of naproxen, finasteride, ibuprofen, montelukast; and partially offset by increase in sales of levetiracetam.

- Revenues from the emerging markets increased by 17% to Rs. 7,433 million, on account of increased sales from Israel, Turkey, Brazil and Japan.

REVENUES

Revenues increased by 1% to Rs. 70,277 million in 2009-10. In November 2008, the Company launched sumatriptan, the Authorized Generic version of Imitrexr, which contributed Rs. 7,188 million in 2008-09 as against Rs. 2,543 million in 2009-10. Excluding sumatriptan revenues from both the years, the Company’s revenues grew by 9% in 2009-10.

GROSS PROFIT:

Dr. Reddy’s gross profit remains almost flat at Rs. 36,340 million. Gross profit as a percentage of revenue was 52% in 2009-10, versus 53% in 2008-09. The minor decrease in gross margin was primarily due to a fall in revenues from sumatriptan, which contributed a significantly higher margin in 2008-09.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling, general and administrative expenses increased by 7% to Rs. 22,505 million in 2009-10. During the year, the Company recorded a one-time charge of Rs. 912 million related to termination benefits payable to a set of identified employees in Germany. During the year, they also closed the research facility at Atlanta, Georgia, USA, and announced re-organization of the North America Generics business in Charlotte, North Carolina, USA, which triggered one time closure related costs. Other than the above, the selling and administrative expenses remained flat primarily due to increase in salaries and inflation in the India business, offset by a decrease in overall costs in Germany due to restructuring. Amortization expenses have almost remained flat at Rs. 1,479 million in 2009-10, versus Rs. 1,503 million in 2008-09.

R and D EXPENSES:

R and D expenses fell by 6% to Rs. 3,793 million. As a share of total revenue, R AND D expenditure was at 5% in 2009-10, compared to 6% in 2008-09. The fall in R AND D expenses was due to lower project expenses and bio-studies costs in 2009-10.

IMPAIRMENT LOSS ON OTHER INTANGIBLE ASSETS AND GOODWILL:

During the year 2009-10, the Company recorded a write-down of intangible assets of Rs. 3,456 million, and a write down of goodwill of Rs. 5,147 million. In 2008-09, the comparable numberswere Rs. 3,167 million and Rs. 10,856 million, respectively.

For both years, the impairment losses have been due to betapharm and the state of the tender-based German generics market. The decrease in market prices due to tender, which began in 2008-09, continued in 2009-10. The year saw additional tenders being announced by several State Healthcare Insurance (SHI) funds.

The Company participated in these tenders through betapharm. The final results of a majority of these tenders were announced with betapharm having a lower than anticipated success rate. Due to these results, the Company needed to re-assess the impact of such tenders on future sales and profits in the German market. In light of further deterioration and adverse market conditions in 2009-10, the Company recorded an impairment loss of:

* Rs. 2,112 million for the product related intangibles;

* Rs. 5,147 million towards carrying value of goodwill; and

- Rs. 1,211 million towards the trademark / brand – beta’ which forms a significant portion of the betapharm cash generating unit. These have been recorded in the income statement. In addition, the Company recorded a write down of Rs. 133 million towards customer related intangibles of US subsidiary, Dr. Reddy’s Louisiana. This arose from the evidence of revenue decline of a product from a customer - on which customer related intangibles had been recognized at the time of acquisition in early 2008-09.

OTHER EXPENSE/(INCOME), NET:

In 2009-10, net other income amounted to Rs. 569 million compared to net other expense of Rs. 254 million in 2008-09. The higher net other expenses in 2008-09 was largely due to an expense of Rs. 916 million on account of liquidated damages paid to Eli Lilly arising out of an unfavorable court decision relating to patent of olanzapine in Germany.

FINANCE (EXPENSES)/INCOME, NET:

Finance income/(expense) includes both net interest income / (expense) and foreign exchange gain / loss. Net expense in 2009-10 amounted to Rs. 3 million as against an expense of Rs. 1,186 million in 2008-09. This was largely due to a foreign exchange gain of Rs. 72 million in 2009-10, versus a loss of Rs. 634 million in previous year. Moreover, there has been a reduction in the interest expense by 64% during 2009-10, due to a fall in interest rates and repayment of long term borrowings.

INCOME TAX:

Provision for income tax for 2009-10 amounted to Rs. 985 million as against Rs. 1,172 million in 2008-09. Excluding the impact of impairment, revenues from sumatriptan in both the years ended 31 March 2010 and 2009 and liquidated damages relating to olanzapine patent in Germany in 2009, the company’s effective tax rate for the year ended 31 March 2010 was at 16.7% of profit before tax as compared to 12.4% for the year ended 31 March 2009. This movement is largely on account of lower R AND D expenditure resulting in lower weighted deduction, under Indian Tax law and also lower mix of profits from tax exempted manufacturing units in India.

PROFIT/(LOSS) FOR THE YEAR:

Dr. Reddy’s net profit was Rs. 1,068 million in 2009-10, versus a net loss of Rs. 5,168 million in 2008-09.

LIQUIDITY AND CAPITAL RESOURCES:

The Company’s cash flow for 2009-10 is higher primarily due to higher cash generated from its operating activities. Investing activities includes net investment in property, plant and equipment of Rs. 4,136 million to meet the business growth, compared to Rs. 4,426 million in 2008-09. Investment in mutual funds net of proceeds from sale amounted to Rs. 3,009 million. Net cash outflow from financing activities in 2009-10 mainly represents the repayment of Rs. 3,479 million of long term debt, and payment of dividends amounting to Rs. 1,233 million.

OUTLOOK:

The Company believes its focus on profitable growth and targeting a leadership position in Global Generics and Pharmaceutical Services and Active Ingredients (PSAI) will create significant value in the near term. It is addressing the need for infrastructure / capacity increases to meet future growth.

In the Global Generics segment, improving depth in key markets through portfolio expansion, consistent delivery of limited competition opportunities and supply chain excellence should lead to a leadership position in these markets. In the PSAI segment, they intend to be the partner of choice by creating compelling value for customers through leveraging IP, technology and cost leadership.

In the Proprietary Products business, they aim to create a viable business by calibrating investments to produce a self sustainable model.

They have been steadily building capabilities and capacity over the years, and have strengthened these further with initiatives at improving productivity and reducing costs. They expect these initiatives shall deliver value in the near term.

REVENUES FROM DIFFERENT BUSINESSES

ANDAs in North America:

In 2009-10, the Company filed 12 Abbreviated New Drug Applications (ANDAs) in US including six Para IV filings. The Company has filed 158 cumulative ANDAs up to date. As on 31 March 2010, there were 73 ANDAs pending approval at the USFDA, of which 38 are Para-IV filings, with 12 in the category of first to file’.

DMFs:

Regarding Active Ingredients business, the Company filed 36 DMFs in 2009-10. Of these, 19 were filed in US, five in Canada, eight in Europe and four in other countries. As on 31 March 2010, the Company had cumulative filings of 378 filings, with 156 in the US.

New Chemical Entities (NCEs):

As on 31 March 2010, Dr. Reddy’s had six New Chemical Entities (NCEs), of which five are in clinical development and one in the preclinical stage.

Pharmaceutical Services and Active Ingredients (PSAI):

* Revenues grew by 9% to Rs. 20,404 million in 2009-10 from Rs. 18,758 million in 2008-09. International revenues accounted for 87% of PSAI revenues.

- 2009-10 saw the company posting significant increase primarily from Europe by 8% and ‘Rest of the World’ markets (i.e., all markets other than North America, Europe, Russia and other countries of the former Soviet

Union and India) by 17%.

RECOGNITIONS:

The year saw Dr. Reddy’s win numerous awards. Some of the key ones were: ‘Corporate Social Responsibility Award’ at the CNBC TV18’s India Business Leader Awards (IBLA); ‘Golden Peacock Award for Excellence in Corporate Governance’ and ‘NASSCOM CNBC IT User Award’ 2009 in the Pharmaceutical vertical for the 2^nd year in a row.

For its HR initiatives, Dr. Reddy’s won the: Recruiting And Staffing Best In Class (RASBIC) award 2009-10 for the Best Overall Recruiting and Staffing Organization’ and Best Recruiting Evaluation Techniques’;Organization with Innovative HR Practices’ and Outstanding Contribution to the Cause of Education’ awards at the World HRD Congress and was adjudicated the best in the Great Places to Work Survey’ in the pharmaceutical and biotechnology industry. The Company’s Annual Report was conferred the Merit Award’ for the year 2008 in the category Manufacturing Sector’ by the South Asian Federation of Accountants.

TALENT ACQUISITION:

During the year, around 4,100 new employees were hired, including replacements. The highlights of the hiring program are:

* India field and manufacturing hires have contributed 25% each to the overall hiring while 24% of the hiring was in Quality, Research and Development and Engineering Services.

* Critical talent was added in the areas of Life Cycle Strategy, Formulations Scale- Up Development, Regulatory Strategy, Legal, Corporate Development and Strategic Planning, Safety Health and Environment,

Pharmacovigilance and Clinical Development, Bioassay and Medical Sciences.

- 24 Management Trainees and laterals were recruited from prestigious B-Schools including IIMs, ISB, TISS and about 628 technical trainees were recruited which includes a number of IIT graduates. They also ramped up the Self Managed Teams (SMTs) in Baddi and Vishakapatnam.

TALENT MANAGEMENT:

Nominations for promotion to and within Senior Management were taken through the Talent Management Board (TMB) process for the first time on a pilot basis. The TMB process roadmap was drawn up with the top management and is slated to be executed in FY11. The deployment of this initiative will be top down with TMBs for top management being done at the Corporate and for others in the Business Units. The Company’s Management Council (MC) will lead this process to reinforce the commitment of the top management to the development of leadership in the organization.

They are also partnering with a global consulting firm to work on critical interventions related to role clarification, job evaluations and competency management.

LEARNING and LEADERSHIP DEVELOPMENT

Leadership development across all levels and a culture of continuous learning are key to the growth aspirations. Some of the key activities carried out in this area for the year were:

* Second Leadership Summit was organized at Boston, USA with world class faculty sharing ideas on Performance and Execution, Talent and Leadership, and Organizational Culture.

* Hosted the Senior Leaders Program (SLP) for cross-industry consortium. During this program, senior leaders from high powered consortium companies including those from Dr. Reddy’s attended a week long program at the Leadership Academy.

* Coaching provided to middle and senior leaders based on their 360 degree feedback.

* Launched several learning interventions focused on developing critical skill sets, soft skills and leadership competencies. The Company offered 6,068 man days of training.

* Increased the reach of learning through Learning@drreddys – an internal learning portal.

- 399 Management, Engineering and Technical trainees inducted into the organization through an intense, systematic and well-planned Campus-to-Corporate induction program.

BUILDING AN INCLUSIVE AND ENABLING ORGANIZATION:

During the year, several new employee enabling policies like flexible work timings, sabbatical leave, part-time work, paternity leave and adoption were introduced with an aim to provide flexibility and work life balance to employees.

HR AWARDS:

In FY10, the Company received the following key recognitions for its HR initiatives.

* Recruiting and Staffing Best in Class Award (RASBIC) 2009-10 for the Best Overall Recruiting and Staffing Organization’ and Best Recruiting Evaluation Techniques’

* Employer awards at the World HRD Congress for Organization with Innovative HR Practices’ and Outstanding Contribution to the Cause of Education’

- Adjudicated the best in the Great Places to Work Survey’ in the Pharma and Biotech industry.

CORPORATE SOCIAL RESPONSIBILITY

A DEEP COMMITMENT:

‘Dr. Reddy’s Foundation (DRF) was born out of my anger’, says Dr. K Anji Reddy, Founder Chairman of Dr. Reddy’s. It was a Newsweek article which commented that ‘some parts of India were worse off than Sub-Saharan Africa’ that triggered a call for action. Dr. Reddy set out to seek an answer to the query – what can they do to improve the condition of the country?

DRF, founded in 1996, through its pioneering efforts in the field of livelihood creation and education, has changed the lives of millions while achieving measurable social impact. It has exemplified the change that could be brought in the lives of the underprivileged through corporate initiatives. Past efforts have given them the confidence and hope that they can do much more in the coming years for the betterment of the marginalized sections of society.

FLOOD RELIEF INITIATIVE:

DRF played an active part in providing relief to victims of the massive floods which hit Andhra Pradesh, India in October 2009.

Health camps were organized to provide immediate health services to the needy. Free treatment, essential medicines and technical advisers were made available by Dr. Reddy’s, while DRF carried out the community mobilization and camp management activities. In a week-long operation from 13-19 October 2009, about 5,800 patients from over 30,000 families were treated in 38 villages and 21 urban slums. The Company also made a contribution of Rs. 10 million to the Chief Minister’s Relief Fund and employees based out of India contributed their one day’s basicsalary towards the cause.

DR. REDDY’S FOUNDATION (DRF):

DRF has made significant progress in its social development endeavor in FY10 through several initiatives in the areas of creating Sustainable livelihoods and providing Quality education.

LIVELIHOODS UPDATE

Livelihood Advancement Business School (LABS):

A total of 20,820 livelihoods were generated by LABS in 2009-10 through various partnerships. (refer LABS Partnership table)

Andhra Pradesh in India accounted for 30% of the total livelihoods generated followed by Delhi and UP which accounts for approximately 8% and 7% respectively. 68% of 20,820 youths trained were placed with an average salary of Rs. 3,618. A total income of Rs. 611,491,659 (Rs. 611 million) was generated for the financial year 2009-10 with 14,157 families being the beneficiaries of this increase in income.

LABS PARTNERSHIPS INITIATED THIS YEAR:

Based on the experiences and results gained in the pilot projects, DRF has been able to sign up for the below sponsored projects:

- Lafarge India Private Limited: A MoU was signed with Lafarge India Private Limited for conducting diagnostic study to access the feasibility of initiating a skill development and employability program for rural youth in Himachal Pradesh and Rajasthan.

- Dalmia Cements and ACC DRF signed a MoU with Dalmia Cements to support the training of 250 aspirants in five villages and provide them with livelihoods in Gulbarga District, Karnataka. A similar MoU has been signed with ACC for training and providing support to 50 aspirants in Chattisgarh.

- Tata Power Company DRF initiated the Skilling Rural India Project in Pune in association with Tata Power to train 300 aspirants.

- Ashta No Kai DRF has also signed a MoU with a Pune based NGO Ashta No Kai for training and livelihoods support to 100 aspirants in five villages. DRF has raised sponsored projects worth Rs. 4.5 million with a target of skilling 700 youth in the next one year.

EDUCATION UPDATE YUVA YOUTH LEARNING CENTERS:

Community-based adolescent youth learning centers established in various urban slum areas around Hyderabad help bring dropouts and working children into the mainstream education system. These centers help eligible students obtain formal academic certification, provide career counseling and job-related training. Six Yuva Youth Learning Centers were established in 2009-10 with four teachers in each centre.

TRANSIT EDUCATION CENTERS:

A transit school comprises of an early childhood education center (cr che), a bridge course camp and a regular primary school. In FY10, 17 Non residential bridge centers, with a total strength of 38 teachers provided education to 575 students. Also, 360 students were taught at four Residential bridge centers with 20 teachers engaged in teaching them.

EDUCATION RESOURCE CENTER (ERC):

ERC is a Resource Center set up to provide academic support to all the Pudami Schools. ERC develops curricular content, material for teachers’ education and mechanisms for academic support to schools. To facilitate children’s shift to English medium, ERC has prepared an English transition course that aids children recover the academic backlog in any given class.

PUDAMI NEIGHBOURHOOD SCHOOLS:

Pudami schools address the rising demand for English medium education from marginalized / lower income communities. Four schools have been set up in Hyderabad and Ranga Reddy district so far where 70 teachers impart education to a combined strength of over 1,400 children drawn from all sections.

PUDAMI ENGLISH PRIMARIES:

To make quality English-medium education accessible to urban children from lower income groups, DRF set up 29 Pudami English Primaries in Hyderabad and Ranga Reddy Districts in Andhra Pradesh. They have a combined strength of 4,700 students (2,491 pre-primary and 2,209 primary) who are taught by 238 teachers.

KALLAM ANJI REDDY VIDYALAYA (KARV):

The Kallam Anji Reddy Vidyalaya at Hyderabad has 45 teachers providing education to about 1,200 students in both English and Telugu medium.

Kallam Anji Reddy Vocational Junior College at Hyderabad presently offers five 2-year vocational courses at the Intermediate level - Automobile Engineering Technician, Computer Graphics and Animation, Computer Science and Engineering, Hotel Operations and Multi-Purpose Health Worker. It has 450 students who are being trained by 20 teachers.

EARLY CHILDHOOD CARE and EDUCATION CENTER:

Early Childhood Care and Education (ECCE) Center takes care of children in the age group of 0-5 years belonging to migrant children living on construction sites in urban Hyderabad, India. In FY10, ten ECCE centers funded by World Bank and 20 ECCE supported by Sarva Sikshya Abhiyan (SSA), a Government of India initiative, supported a total of 1,340 children with help from 15 teachers and 10 assistant teachers.

BRIDGE SCHOOL AT JUVENILE HOME FOR GIRLS AT NIMBOLIADDA, HYDERABAD, INDIA:

Started in January 2010, about 84 children in three groups - Juvenile delinquents in special home, under-trials in observation home and children who need care and protection in the children home were housed in the campus. This bridge school has been set up with support from Sarva Sikshya Abhiyan (SSA).

DR. REDDY’S FOUNDATION FOR HEALTH EDUCATION (DRFHE):

DRFHE aims to create professionals (health educators) who would work with the medical fraternity to offer an integrated, multi-disciplinaryapproach to good health. The programs also aim at building the necessary soft skill capabilities with an objective of strengthening the healthcare delivery system for better patient care.

TRAINING INITIATIVES:

Training to deliver better patient care:

- INNER CIRCLE

Introduced in 2007 to impart soft skill training of doctors, 53 Inner Circle programs were conducted in FY10 benefiting 1,809 doctors.

- ABHILASHA

Is aimed at helping nurses understand the true importance of their work and boost their selfconfidence and motivation.

148 programs were conducted during FY10 benefitting 3,800 nurses.

- SARATHI

Is a program that enables a doctor’s assistant to emerge as a sharper, smarter and motivated individual. 60 programs were conducted during FY10 benefitting 1,474 participants.

- SANJEEVANI

Aimed at the pharmacist, this program helps them develop self confidence, empathy towards their customers and effective prescription dispensation. During FY10, 42 programs were conducted benefiting 672 pharmacists.

PATIENT INITIATIVES:

Reaching out, touching lives

- Living Well

This program, in partnership with the ‘Art of Living’, is aimed at helping people reduce riskfactors and increase their resistance levels through awareness and lifestyle modification. It also helps manage their chronic condition through a self management support system. Seven programs were conducted during FY10 benefiting 70 patients.

- Life at the doorstep (LAYD)

Based on the principle of ‘Home Care’ aspect of Palliative Care, this initiative aims to improve the quality of life for terminally ill patients by providing access to physical, psychological, emotional, social and spiritual support in anappropriate manner. A well-equipped medical van with a team consisting of a doctor, nurse and patient counselor goes to the patient’s doorstep to provide home care service. DRFHE is also tying up with DRF - LABS program to provide livelihood to one member of a family where the earning member has been a victim of cancer. During FY10 this service, apart from Hyderabad was also launched at Bangalore, Mumbai, Bhopal, Jabalpur, Kolkata, Cochin and Coimbatore benefiting 2,048 cancer patients.

FIXED ASSETS:

Land – Freehold
Building
Plant and Machinery
Electrical Equipment
Laboratory Equipment
Furniture and fixture
Office Equipment
Vehicles

WEBSITE DETAILS:

Established in 1984, Subject (NYSE: RDY) is an emerging global pharmaceutical company.

As a fully integrated pharmaceutical company, their purpose is to provide affordable and innovative medicines through their three core businesses:

Pharmaceutical Services and Active Ingredients, comprising their Active Pharmaceuticals and Custom Pharmaceuticals businesses;

Global Generics, which includes branded and unbranded generics; and

Proprietary Products, which includes New Chemical Entities (NCEs), Differentiated Formulations, and Generic Biopharmaceuticals.

The products are marketed globally, with a focus on India, US, Europe and Russia. Dr. Reddy’s conducts NCE research in the areas of metabolic disorders, cardiovascular indications, anti-infectives and inflammation.

The strong portfolio of businesses, geographies and products gives them an edge in an increasingly competitive global market and allows them to provide affordable medication to people across the world, regardless of geographic and socio-economic barriers.

BOARD OF DIRECTORS

Subject Board of Directors comprises eminent individuals from diverse fields. The Board acts with autonomy and independence in exercising strategic supervision, discharging its fiduciary responsibilities, and in ensuring that the management observes the highest standards of ethics, transparency and disclosure.

The directors are experts in the diverse fields of medicine, chemistry and medical research human resource development, business strategy, finance, and economics. They review all significant business decisions, including strategic and regulatory matters. Every member of the Board, including the non-executive directors, has full access to any information related to the company.

Committees appointed by the Board focus on specific areas, take decisions within the authority delegated to them and make specific recommendations to the Board on matters in their areas or purview.

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31.12.2010

Rs. In Millions

Particulars	(Unaudited) Quarter ended 31.12.2010	(Unaudited) Nine Months ended 31.12.2010
1. Sales/ Income from operations (including Excise Duty)	13732.700	39243.300
Less: Excise Duty	84.800	250.000
Net Sales/ income form operations	13647.900	38993.300
2. License fees and service income	101.300	205.800
3. Other Operating Income	148.400	378.400
4. Total Income (1+2+3)	13897.600	39577.500
5. Total Expenditure	11105.200	31875.700
a. Increase/ Decrease in stock	(505.200)	(795.700)
b. Material Consumed	4877.200	13457.000
c. Research and development expenses net	1298.200	3513.300
d. Personel Costs	1691.600	5121.500
e. Selling expenses	1263.800	3654.200
f. Other expenditure	1840.700	5101.000
g. Depreciation and amortisation	638.900	1824.400
h. Provision for decline in the value of long term investments	0.000	0.000

6. Profit form operation before other income, interest and exceptional item (4-5)	2792.400	7701.800
7. Other Income	372.100	904.900
8. Profit before interest and exceptional items (6+7)	3164.500	8606.700
9. Interest	5.400	11.300
10. Profit before Exceptional items (8-9)	3159.100	8595.400
11. Exceptional items	--	--
12. Profit from ordinary activities before tax (10-11)	3159.100	8595.400
13. Tax expenses	--	--
14. Net profit form ordinary activities after tax (12-13)	3159.100	8595.400
15. Extra-ordinary items	531.400	1320.900
16. Net Profit for the period / year (14-15)	2627.700	7274.500
17. Paid-up equity share capital (face value rs. 5/- each)	--	--
18. Reserves (excluding revaluation reserve)	2627.700	7274.500
19 Earning per share for the period (in Rs) per Rs. 5/- share	846.100	846.100
a) Before Extra-ordinary items
- Basic	15.53	43.02
- Diluted	15.45	42.76
b) After Extra-ordinary items
- Basic	15.43	15.43
- Diluted	15.45	15.45
20. Public Shareholding
- Number of Shares	92947595
- Percentage of Shareholding	54.92
21. Promoters and promoter group Shareholding
a) Pledged/ Encumbered
i) No. of Shares	2100000	2100000
ii) % of shareholding (as a % of the total Shareholding of Promoter and Promoter group)	4.84	4.84
iii) Percentage of shareholding (as a % of the total share capital of the company)	1.24	1.24
b) Non encumbered
i) No. of Shares	41317812	41317812
ii) Percentage of shareholding (as a % of the total shareholding of promoter and promoter group)	95.16	95.16
iii) Percentage of shareholding (as a % of the total share capital of the company)	24.42	24.42

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31.12.2010

Rs. In Millions

Particulars	(Unaudited) Quarter ended 31.12.2010	(Unaudited) Nine Months ended 31.12.2010

Segment wise revenue, results and capital employed:
1. Segment revenue :
a) Pharmaceutical Services and Active Ingredients	5562.100	14887.500
b) Global Generics	9121.400	27048.800
c) Proprietary Products	8.800	20.200
Total	14692.300	41956.500
Less: Inter segment revenue	870.100	2367.800
Add : Other unallocable Income	447.500	893.700
Total income	14269.700	40482.400

2. Segment results :
Profit / (loss) before tax and interest from each segment
a) Pharmaceutical Services and Active Ingredients	974.200	2043.600
b) Global Generics	2623.400	8044.600
c) Proprietary Products	(326.200)	(781.800)
Total	3271.400	9306.400
Less: (i) Interest	5.400	11.300
(ii) Other un-allocable expenditure	106.900	699.700
Total profit before tax	3159.100	8595.400

3. Capital Employed:
a) Pharmaceutical Services and Active Ingredients	16140.400	16140.400
b) Global Generics	25220.900	25220.900
c) Proprietary Products	7.100	7.100
d) Others	25071.600	25071.600
Total	66440.000	66440.000

Notes:

1. Pursuant to clause 41 of the Listing Agreement, the investor complaints received, disposed off and lying unresolved for the quarter ended 31.12.2010 are given in the table below:

Nature of Complaints

Opening balance

Received

Disposal

Closing Balance

Non receipt of shares and dividend

Nil

Nil

2. During the year ended 31.03.2010 the Company recorded a capital advance of Rs. 2680.000 millions with a corresponding liability representing its relief from future royalty payable to I-Ven Pharma Capital Limited (I-Ven) as per the agreement entered between the parties in earlier periods. On 01.10.2010, in settlement of this liability the Company and the shareholders of I-Ven entered into an agreement for the sale of controlling interest in I-Ven to DRL Investments Limited, a wholly owned subsidiary of the Company, at an amount of Rs. 2680.000 millions (of which Rs. 150.000 millions to be set aside for certain contingencies in an escrow account).

3. The unaudited results have been taken on record by the Board of Directors of the Company at its meeting held on 25.01.2011.

4. The figures for the pervious periods have been re-grouped/re-classified, wherever necessary, to conform with the current period classification.

PRESS RELEASE:

Dr. Reddy’s provides update on the fexofenadine-pseudoephedrine 24 hour litigation

31.01.2011, Hyderabad, India: Dr. Reddy’s Laboratories (NYSE: RDY) announced today that on Friday, 28.01.2011, the U.S. District Court of New Jersey filed a Stipulation and Order lifting an earlier motion for preliminary injunction and clearing the sale of Dr. Reddy’s generic product version of Allegra^® D24 (fexofenadine hydrochloride / pseudoephedrine hydrochloride 180mg / 240mg extended release tablet), which was approved by the FDA on 16.032010.

In addition, plaintiff’s sanofi-aventis and Albany Molecular Research have been required to post a security with the Court, an amount of USD 40.000 million towards the possibility that the injunction had been wrongfully granted. Having been excluded from launching the generic product since the June 2010 hearing, Dr. Reddy’s intends to pursue an award of this security.

Allegra D24 is a registered trademark of sanofi-aventis.

Disclaimer
This press release includes forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, our ability to successfully implement our strategy, the market acceptance of and demand for our products, our growth and expansion, technological change and our exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future.

About Dr. Reddy’s

Dr. Reddy’s Laboratories Limited (NYSE: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products – Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management, anti-infective and pediatrics. Major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New Zealand.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.03
UK Pound	1	Rs.74.43
Euro	1	Rs.64.75

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	8
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		78

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

PRODUCTION STATUS (As on 31.03.2008):-

8974.000

7351.000

6409.300

10605.000

14197.000

8977.100

3680.000

3844.000

5373.400

0.000

0.000

0.000

13001.000

13085.000

12720.200

36260.000

38477.000

33480.000

14475.000

10502.000

7863.500

2418.000

1335.000

4512.800

16893.000

11837.000

12376.300

19367.000

26640.000

21103.700

18.04

13.05

24.27

18.24

21.95

14.42

0.18

0.14

0.38

0.35

2.15

3.25

Unit