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| ANNEXURES |
| INDEPENDENT ASSURANCE STATEMENT |
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| Introduction |
DNV GL represented by DNV GL Business Assurance India Private Limited (‘DNV GL’) has been commissioned by the management
of Dr. Reddy’s Laboratories Limited (‘Dr. Reddy’s’ or ‘the Company’) to carry out an independent assurance engagement on the
Company’s Sustainability Report 2013-15 (‘the Report’) presented to us as a word processing document format. Global Reporting
Initiative (GRI) Sustainability Reporting Guidelines Version 3.0 (GRI G3). This assurance engagement has been conducted against the
DNV Verification Protocol for Sustainability Reporting (‘VeriSustain’ - available on request from www.dnvgl.com). The verification was
conducted during August 2015 – December 2015, for the years of activities covered in the Report i.e. 1st April 2013 to 31st March 2015. |
The intended users of this Assurance Statement are the Management of the Company. The Management of the Company is
responsible for all information provided in the Report as well as the processes for collecting, analysing and reporting the information
which shall be presented in the printed and web-based versions of the Report, including the maintenance and integrity of the website.
Our responsibility in performing this work is regarding the verification of the sustainability performance disclosed in the Report only
and in accordance with the scope of work agreed with the Management of the Company. The assurance engagement is based on the
assumption that the data and information provided to us is complete and true. We expressly disclaim any liability or co-responsibility
for any decision a person or entity would make based on this assurance statement. |
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| Scope, Boundary and Limitations of Assurance |
The scope of assurance includes the review of Economic, Environmental and Social Disclosures in the Report. In particular, the
assurance engagement included: |
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Verification of the application of report content principles set out in GRI G3 and quality of information presented in the Report; |
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Review the Report against the requirements of VeriSustain with a moderate level of assurance; |
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Review and assessment of the processes and tools for collecting, aggregating and reporting qualitative data inside the Report and verification of the reliability of performance indicators reported; |
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The verification of the qualitative and quantitative information on sustainability performance disclosed in the report covering economic, environmental and social performance of the activities undertaken by the Company over the reporting period 1st April 2013 to 31st March 2015 and based on GRI G3; |
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Confirmation of Application Level A+ as per GRI G3 and as declared by Dr. Reddy’s. |
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| The reporting aspect boundary is based on the internal and external materiality assessment, predominantly covering the Company’s operations in India as set out in the Report, in the Section ‘Reporting Scope’ of the Chapter ‘Sustainability Approach’. During the assurance process, we did not come across limitations to the scope of the agreed assurance engagement. The reported data on economic performance and expenditure towards Corporate Social Responsibility, and other financial data is based on audited financial statements issued by the Company’s statutory auditors. No external stakeholders were interviewed as part of this assurance engagement. |
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| Verification Methodology |
This assurance engagement was planned and carried out in accordance with VeriSustain. The Report has been evaluated against the
following criteria: |
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Adherence to the principles of Stakeholder Inclusiveness, Materiality, Responsiveness, Completeness, Reliability and Neutrality; |
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Application of the principles and requirements of GRI G3 for an Application Level A+ as declared by Dr. Reddy’s. |
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During the assurance engagement, we adopted a risk based approach, i.e. we concentrated our verification efforts on the issues of
high material relevance to the Company and its key stakeholders. As part of verification, we visited the Corporate Office in Hyderabad
and four sites (Chemical Technical Operations (CTOs) and Formulations Technical Operations (FTOs)) located in India i.e. CTO-5
(Miryalguda), CTO-SEZ (Pydibhimavaram), FTO-7 (Duvvada) and FTO-3 (Bachupally). |
| As part of the engagement, we have verified the statements and claims made in the Report. In doing so, we have: |
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Reviewed the Company’s approach to stakeholder engagement and its materiality determination process; |
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Verified the sustainability-related statements and claims made in the Report and assessed the robustness of the data management
system, data accuracy, information flow and controls; |
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Examined and reviewed documents, data and other information made available by the Company; |
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Conducted in-person interviews with top and senior management team of Dr. Reddy's and other representatives including data
owners and decision-makers from different divisions and functions of the Company; |
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Performed sample-based reviews of the mechanisms for implementing the Company's sustainability related policies, as described in the Report; |
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Performed sample-based checks of the processes for generating, gathering and managing the quantitative data and qualitative
information included in the Report |
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| Conclusions |
In our opinion and based on the scope of this assurance engagement, the disclosures on sustainability performance reported in
Dr. Reddy’s Sustainability Report 2013-15 along with the referenced information in the Report provides a fair representation of the
material aspects, related strategies, management approach and performance of the Company during the reporting period and meets
the general content and quality requirements of GRI G3. |
We also confirm that the Report meets the content requirements of the GRI Application Level A+ i.e. the core and applicable additional
GRI indicators are responded to either fully or partially, or their omission is explained, with due regard to the materiality principle. |
| We have evaluated the Report’s adherence to the following principles on a scale of ‘Good’, ‘Acceptable’ and ‘Needs Improvement’: |
Stakeholder Inclusiveness: The Company has implemented a formal stakeholder engagement process and engages a third party for
stakeholder engagement in order to independently identify the stakeholder challenges and concerns. The material issues emerging from
the stakeholder engagement were collected and responded to based on criticality of issues and we are of the opinion that the responses
to key stakeholder concerns are fairly reflected in the Report. In our opinion, the level at which the Report adheres to this principle is
‘Acceptable’. |
Materiality: The Company has fairly arrived at the materiality and the outcomes of the materiality assessment process have not missed
out significant, known material issues. However, it is suggested that the process of quantifying the importance to stakeholders and to the
Company and prioritising material issues would help the Company in determining the sustainability issues and related impacts to focus
on. The Management of Dr. Reddy’s has established internal process for monitoring and management of material aspects on a continual
basis for their long term organisational sustainability. In our opinion, the level at which the Report adheres to this principle is ‘Good’. |
Responsiveness: The Company has responded to stakeholder concerns through its policies and management systems, and this is
fairly reflected in the Report. The Management is committed for full reporting of sustainability impacts of partially reported performance
in its future reports. The Report covers disclosures for the reporting period 2013-14 and 2014-15; in our opinion the reporting needs to
be structured on a regular and timely basis for stakeholders to make informed decisions. In our opinion, the level at which the Report
adheres to this principle is ‘Good’. |
Reliability: The Report contains data that is measured and estimated; the majority of the data and information verified were found to be
accurate. Some of the data inaccuracies identified during the verification process for the sampled sites were found to be attributable to
transcription, interpretation and aggregation errors and the errors have been corrected. In our view, the level at which the Report
adheres to this principle is ‘Good’. |
Completeness: The Report covers the responses to key performance indicators for the reporting period 2013-14 and 2014-15, within
the identified reporting boundary i.e predominantly covering operations in India. In our opinion the reporting boundary needs to be
expanded to cover all entities of the Company in various geo-locations; the Management of Dr. Reddy’s has committed to full reporting
and has prepared a roadmap. In our opinion, the level at which the Report adheres to this principle is ‘Acceptable’. |
Neutrality: The information contained in the Report is presented in a balanced manner, in terms of content and tone. Limitations are
fairly presented with commitments to future improvement. In our opinion, the level at which the Report adheres to this principle is ‘Good’ |
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| Opportunities for Improvement |
The following is an excerpt from the observations and opportunities for improvement reported to the Management of the Company and
are not considered for drawing our conclusions on the Report; however they are generally consistent with the Management’s objectives: |
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Future reports may disclose sustainability performance of all entities of the Company, including joint ventures and subsidiaries over
which it has operational control. |
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The Company may carry out a comprehensive risk assessment of value chain partners and disclose the sustainability performance
and impact of key value chain partners. |
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| DNV GL’s Competence and Independence |
DNV GL is a global provider of sustainability services, with qualified environmental and social assurance specialists working in over 100
countries. DNV GL states its independence and impartiality with regard to this assurance engagement. While we did conduct other
third party audits work with Dr. Reddy’s in 2013-15, in our judgement this does not compromise the independence or impartiality of our
assurance engagement or associated findings, conclusions and recommendations. We were not involved in the preparation of any
statements or data included in the Report, with the exception of this Assurance Statement. We maintain complete impartiality towards
any people interviewed. |
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| For DNV GL Business Assurance India Private Limited, |
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Kiran Radhakrishnan
Project Manager,
DNV GL Business Assurance India Private Limited, India. |
Balasubramoniam, Sivasubramaniam
Assurance Reviewer,
DNV GL Business Assurance India Private Limited, India. |
| Bangalore, India, 30th November, 2015 |
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