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I. Scope

This Anti-Bribery and Anti-Corruption Policy (“the ABAC Policy”) applies to Dr. Reddy’s
Laboratories Limited and all its direct/step-down Subsidiaries and affiliates (collectively and
severally referred to as “the Company” or “Dr. Reddy’s”) and their directors, officers, employees,
consultants, business partners and any other person retained or hired by the Company to facilitate
business world-wide (“Associates”) and requires them to comply with all applicable anti-bribery,
anti-corruption, anti-graft and anti-kickback laws and regulations (of whatever name or title)
including but not limited to the Indian Prevention of Corruption Act, 1988, the US Foreign Corrupt
Practices Act of 1977, the Russian anti-corruption legislation, the European Union anti-bribery
regulations and the UK Bribery Act, 2010 (referred to as “the ABAC Regulations.”)

II. Purpose

The ABAC Policy is intended to ensure the Company and its Associates conduct business according
to the highest standards of ethics. It is designed to guide on all aspects of the ABAC Regulations
which include receiving or providing gifts, benefits or subsidies for and on behalf of the Company or
any other act suggestive of the same. The Company on its part shall make commercially reasonable
efforts to confirm that its contracting parties worldwide adhere to the ABAC Policy requirements or
a standard analogous thereto.

III. Statement

Our Company prohibits bribery in any form-direct or indirect and aims to make a positive
contribution to improve standards of integrity, transparency and accountability by enforcing zero
tolerance towards bribery and corruption worldwide, regardless of local business practices.

Main Definitions

In practice, the words “bribery” and “corruption” are often used interchangeably. Corruption is
generally understood as the misuse of power by a person to whom power has been entrusted, for his
or her private gain. The most common form of corruption is bribery.

“Corruption” is the illegal use of an official position by an individual against the legitimate interests
of the Company/society/Government to benefit in cash or cash value benefits, receipt of valuables or
other property or of services or illegal provision of such a benefit to a defined individual by other
individuals.

“Bribe” includes cash or cash value benefit, gift, fee, loan, kickbacks, subsidies, extortion, rewards,
rebates, promise or deferred promise which is accepted as an inducement for some illegal act or a
breach of trust; omission/forgiveness of any obligation or interest; illegal emoluments received or
provided as a consideration for preferring one person to another in performing a legal act.
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IV. Overview of an illustrative selection of legal enactments (not an exhaustive list of all applicable
legislation)

Prevention of Corruption Act, 1988 Indian federal law enacted by the Parliament of India prohibits
any public servant in Government agencies and public sector organizations and undertakings in India
from accepting or offering bribe or any other gratification.

Foreign Corrupt Practices Act of 1977 (FCPA) Prohibits the payment with corrupt intent (or offer,
promise or authorization of payment) of anything of value to any foreign official or employee,
directly or indirectly, for the purpose of obtaining or retaining business, directing business to any
person or entity, or securing any improper advantage. It requires the Company to maintain accurate
books, records and reasonable accounting records. As a US listed organization, this law is applicable
to the Company and its Associates outside the US as well. In addition, Company may be held liable
for any act in furtherance of a corrupt payment that occurs entirely outside the US and without any
connection to the instrumentalities of US commerce. For the avoidance of doubt, federal, state and
local legislation proscribe domestic corruption in the US.

The Russian Federation through its criminal code, civil code and federal law forbids accepting and
receiving of a bribe, commercial bribery, intermediation in bribery and forbids pubic officials
receiving a compensation for the conduct of duties, chargeable occupation of any kind except
provided by their official position, entrepreneurship or business trips at the expense of third parties.

European Commission prohibits corruption involving officials of the European Union or officials
of member states of the European Union. It also stipulates that for bribery committed by private
companies, those companies’ management shall be criminally liable for acts of corruption committed
by persons under their supervision.

UK Bribery Act, 2010 prohibits offering, promising or giving bribe to another person including
foreign public official and requesting, agreeing to receive or accepting a bribe from another person
including commercial bribery. It also states that it’s a corporate offence of failing to prevent bribery.

V. The Policy

The Company operates globally across different jurisdictions and with significant differences in
cultures, law and political environments. This ABAC Policy may in some circumstances conflict
with local law or customs of a particular country. In the event that a local law requires a standard
higher than that of this ABAC Policy, employees are advised to follow the local law. In all other
cases strict adherence to this ABAC Policy is mandated. For clarity, this ABAC policy shall prevail
in the event local customs and practices tolerate or make allowances for any form of bribery or
corruption.

This ABAC Policy is based on the OECD (Organization for Economic Cooperation and
Development) and Transparency International’s guidance for business principles for countering
bribery and is intended to complement Dr. Reddy’s Code of Business Conduct and Ethics (COBE.)
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VI. Contents of the Policy

a) Gifts, Hospitality and Expenses

Please refer the Company’s detailed policy on gifts and hospitality, and the COBE.

b) Charitable Contributions/Donations:
No donations or charities may be made on behalf of the Company with the intention of gaining
a business advantage.
A documented approval, as per the Delegation of Authority (DOA) and/or applicable laws is
required before any commitment to make and/or making charitable contributions.
Employees should ensure that in making the charitable contribution no potential conflict of
interest exists that would affect a material transaction or a current bidding situation.
A detailed and accurate description of all donations and charitable contributions must be
reflected in the Company’s books of accounts and records.

c) Political Contributions
Neither associates nor business partners may make direct or indirect contributions to political parties
or organizations and individuals engaged in politics, to gain a business advantage for the Company.
In this regard, both direct acts and those perceived to be made on behalf of the Company are
proscribed. Subject to the restriction stated in this clause, any political contribution made by the
Company must be lawful, appropriately recorded in the books of accounts and disclosed according to
the COBE and applicable laws. A documented approval by the CEO or COO is required before any
commitment to make and/or making political contributions.

d) Facilitation Payments
Though facilitation payments (payments made to expedite the performance of a routine action by a
government official without influencing the underlying decision) are permissible under the FCPA,
they are illegal under the Indian Prevention of Corruption Act, the UK Bribery Act and much other
anti-graft legislation. Accordingly, any form of facilitation payment by the Company or the
Associates is prohibited.

e) Sponsorship
Sponsorship must not be linked to prescribing, recommending or promoting any Company
product or service.
No sponsorship may be offered or extended to any government official, including health care
professionals (HCP) except to the extent expressly permitted by laws and regulations of the
country of work/residence of the sponsored person works and that in which the meeting/event
occurs.
No sponsorship of social, entertainment or sporting events may be extended or accepted, if
made with the intent of improperly influencing or as an offer of inducement to do an
inappropriate act.
No sponsorship to an HCP may be extended or accepted unless:
i. the topics covered at the meeting/event are directly relevant to the sponsored person’s
job responsibilities/area(s) of expertise; and
ii. the primary purpose of the sponsorship is to develop medical or scientific knowledge.
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f) Pharmaceutical Marketing and Promotional Activities

All marketing and promotional activities of the Company’s pharmaceutical products must comply
with all applicable laws and regulations and the Company’s marketing policy. Please refer to the
country specific marketing code for guidance on interactions with HCPs

g) Accounting and Disclosure

The Company needs to maintain an appropriate and adequate system of internal accounting controls
to provide reasonable assurance that:

All transactions conform to general or specific management authorization and accurately

recorded to permit preparation of financial statements conforming to applicable accounting
principles or regulations;
All applicable laws, external accounting requirements and procedures for reporting financial
information are followed; and
No off-the-book accounts, false or deceptive book keeping entries being made.

Note: No intentional misconduct leading to a violation needs to be established to arraign the

Company for wrongdoing. Inadvertent or unintentional errors resulting in misapplication or
unauthorized use of Company assets can result in charges against the Company for presumed failure
to maintain an adequate system of internal control.

h) Joint Venture and Consortia

The Company needs to complete a satisfactory due diligence inquiry before entering into any joint-
venture or joining a consortium, always ensuring such counterparties’ policies are consistent with its
own. In the event the Company cannot exercise effective control over a joint venture or consortium,
it should declare its policy to the participant counterparties, encouraging them to adopt a policy for
the venture, consistent with that of the Company.

i) Indirect Payments
The Company strictly prohibits use of intermediaries like agents, distributors, consultants or other
third parties for indirectly channelling bribes disguised as legitimate payments.

All procurement practices should be conducted in a fair and transparent manner.

All agreements and contracts with any intermediaries/business partners should contain a
written clause on compliance to anti-bribery and anti-corruption laws of that and other
applicable jurisdictions.
Compensation/remuneration paid to agents and any other intermediaries should be appropriate
and justifiable for the legitimate services rendered.

The following types of payment transaction needs to be scrutinized and if needed investigated:

Request for and/or payments to or by offshore holding companies/Subsidiaries/associates;

Third-party “consulting agreements” that include vaguely described services;
Cost build-up for shared services, transferring expenses assessed to other businesses of
counterparties to the current contractual activity billing;
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Payments or transfers to or from unidentified third parties or from/to anonymous or

unrecognizable accounts (including numbered and trust accounts) not apparently linked to the
business partner;
Excessive commission to third party agents and unreasonably large discounts to third party
distributors;
Questionable modes of payments that on the face appear “out of place” like bearer checks,
cash payments, split payments, payments beyond regular/industry norms and payments in a
third country; and
Anonymous wire transfers and wire transfers to/from high-risk geographic locations (not
having any nexus to the transaction or the parties thereto.)

VII. Third Party Due Diligence Procedure

It is mandated that the Company conduct a detailed integrity evaluation of all potential business
partners both prior to their engagement and during their continued association with the Company.
The corporate legal department shall ensure that all business partners comply with the due diligence
process through a questionnaire and self certification process. Additional assessment procedures may
be initiated in the event of significant risks being detected during the due diligence process.
Refer Annexure A and Annexure B.

VIII. Raising Concerns

If an employee is concerned that acts of bribery or corruption are taking place in the organization
they should inform the Chief Compliance Officer as per the Company’s whistle blower policy and/or
Ombudsperson Procedure and/or the Confidential Disclosure Program. This can be accomplished by
providing all relevant information in an email addressed to complianceofficer@drreddys.com or by
making a call to +91-40-4900 2000 or US toll-free number +1 877-328-0707. Please refer to the
COBE for more details on reporting violations of the code.

IX. Disciplinary Action

Any employee if proved to have accepted or offered any bribe will be subjected to disciplinary
action up to and including without limitation, termination from employment. Management is
responsible for determining any disciplinary action in accordance with Company policies and
applicable laws. Under certain circumstances the erring employee may in addition to Company
disciplinary action, be liable for civil or criminal penalties under applicable statutes. The Company
shall to the fullest extent necessary disclose to and cooperate with law-enforcement and other
appropriate agencies in all the attendant investigations/inquiries.

X. Exceptions
The only exception to this ABAC Policy applies strictly in extreme circumstances in which
Associates and/or others acting on behalf of the Company have no option but to make payments to
protect themselves or their family against loss of life or physical threat. In such circumstances, it is
the responsibility of the Associate to report the incident (preferably in writing) to the Chief
Compliance Officer if possible prior to and in any event immediately following the occurrence.

XI. Implementation and Support

The Chief Compliance Officer in collaboration with the respective business head/country head
and/or the head of finance shall ensure awareness of and compliance with this ABAC Policy through
induction and periodic trainings.
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XII. Effective Date and Review

This policy is effective from the date of its release. Sequentially numbered updated versions of the
ABAC Policy shall be notified from time to time and shall reflect changes in law, evolving case law
and their interpretation or revision in management policy.

XIII. Glossary For the purpose of this ABAC Policy the following words and phrases shall have the
respective meanings assigned to them:

“Subsidiaries” means a Company of which more than 50% of the voting shares are owned by
another corporation, termed the parent company and includes an entity where another (parent) entity
by virtue of predominant participation in the authorized capital or in accordance with a concluded
agreement or in another way (including operation of law) has an opportunity to define decisions,
made by this entity.

“Foreign Official” means any person holding a legislative, executive, administrative or judicial
office of a foreign country, whether appointed or elected and any person exercising any public
function for a foreign country including for a public agency or public enterprise. Officials of
government owned corporations, medical doctor employed in public hospitals, who have influence
over Government purchase or prescription of products are considered to be foreign officials.

“Government Official” means:

a) an employee, officer or representative of any civilian or military government agency,

instrumentality of a government agency or a government-owned/government-controlled
commercial enterprise;
b) a legislative, administrative or judicial official, regardless of whether elected or appointed;
c) an officer or individual with a position in a political party;
d) a candidate for political office;
e) an officer or employee of a supra-national organization (such as World Bank, United Nations,
or International Monetary Fund); and
f) any employee of a public sector unit with full or part government ownership.

“Public Servant” means someone who holds a government position either by election or by
appointment or is an employee of a public sector unit or where the government directly holds
majority ownership in that enterprise or establishment.

“Business Partner” means a third party acting on behalf of the Company, including but not limited
to joint-venture partners, agents, consultants, distributors, co-promotion partners, event planners,
brokers and the like.

“Charitable Contributions” means payments made for the benefit of the society, charitable,
educational, social welfare and similar causes voluntarily without demand or expectation of any
business or tangible return.
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“Sponsorship” is a business transaction and part of promotion and advertising. When the Company
makes a payment, in cash or in kind to associate its name with an activity and receives in
consideration for the sponsorship fee, rights and benefits such as advertising credits in media, events
and publications to promote its name, products and services.

“Political Contributions” mean any contribution, financial or in kind to support a political cause not
limited to gifts of property or services, advertising or promotional activities, purchase of tickets to
fundraising events and contributions to research organizations with close association with political
parties.

“Kickbacks” means payment or offering of services with the intent to influence or gain something
from a Company or a person.

“Payments” means money, transfer of stock/bonds, financial instruments or any other asset/property,
payment of expenses, forgivance of liabilities, providing of services of any type, or any other transfer
of goods, services, tangibles or intangibles that benefits the recipient or promotes his or her interest.

“Extortion” means the obtaining of property or money from someone else by wrongful use of actual
or threatened force, violence, or fear, or under pretext of an official right.

Approved by

K.Satish Reddy, Vice Chairman, MD & COO