Good Health Can’t Wait.

Good Health Can’t Wait.
Dr. Reddy’s Laboratories Limited
BOARD OF DIRECTORS
AND KEY MANAGEMENT
PERSONNEL
As per the provisions of Sections 149
and 152 of the Companies Act, 2013,
the shareholders at their 30th Annual
General Meeting held on 31 July 2014,
had approved the re-appointment of
all the existing Independent Directors
of the Company for tenure of up to
five consecutive years. None of the
Independent Directors are liable to retire
by rotation.
In accordance with Section 149(7)
of the Companies Act, 2013, each
Independent Director has confirmed
to the Company that he or she meets
the criteria of independence laid down
in Section 149(6) of the Companies
Act, 2013 and Clause 49 of the Listing
Agreement.
Further, in accordance with provisions of
Section 152 of the Companies Act, 2013,
the shareholders had also approved the
variation in the terms of appointment
of Mr. G V Prasad and Mr. Satish Reddy,
Whole-time Directors, making them
liable to retire by rotation.
Accordingly, Mr. G V Prasad, Wholetime
Director, retires by rotation at the
forthcoming 31 st Annual General Meeting
scheduled on 31 July 2015 and being
eligible, seeks re-appointment. A brief
profile of Mr. G V Prasad is given in
the Corporate Governance section of
the annual report for reference of the
shareholders.
BOARD EVALUATION
As per provisions of the Companies
Act, 2013 and Clause 49 of the Listing
Agreement, an evaluation of the
performance of the Board and members
was undertaken. In order to ensure
objectivity, an independent expert was
engaged to manage the process. The
contribution and impact of individual
Directors were reviewed through a peer
evaluation on parameters such as level
of engagement and participation, flow of
information, independence of judgment,
conflicts resolution and their contribution
in enhancing the Board’s overall
effectiveness. A 360 degree feedbackcum-assessment
of individual directors,
the Board as a whole and its committees
was conducted. The feedback obtained
from the interventions was discussed in
detail and, where required, independent
and collective action points for
improvement put in place.
APPOINTMENT OF DIRECTORS AND
REMUNERATION POLICY
The assessment and appointment of
members to the Board is based on a
combination of criterion that includes
ethics, personal and professional stature,
domain expertise, gender diversity
and specific qualification required
for the position. The potential Board
member is also assessed on the basis of
independence criteria defined in Section
149(6) of the Companies Act, 2013 and
Clause 49 of the Listing Agreement.
In accordance with Section 178(3) of
the Companies Act, 2013, Clause 49(IV)
(B) of the Listing Agreement and on
recommendations of the Nomination,
Governance & Compensation
Committee, the Board adopted a
remuneration policy for Directors, Key
Management Personnel (KMPs) and
Senior Management. The policy is
attached as an annexure to the Corporate
Governance report.
NUMBER OF BOARD MEETINGS
The Board of Directors met four times
during the year. In addition, an Annual
Board Retreat was held to discuss
strategic matters. Details of Board
meetings are laid out in Corporate
Governance report, which forms a part of
this annual report.
AUDIT COMMITTEE
The Audit Committee of the Board
of Directors consists entirely of
Independent Directors. Presently, the
Committee comprises of Mr. Sridar
Iyengar (Chairman), Mr. Ravi
Bhoothalingam, Ms. Kalpana Morparia
and Dr. Omkar Goswami.
The Board has accepted all
recommendations made by the Audit
Committee during the year.
BUSINESS RISK MANAGEMENT
The Company has a Risk Management
Committee of the Board, consisting
entirely of Independent Directors. The
details of the Committee and its terms
of reference are set out in the Corporate
Governance section, which forms a part
of the Board’s report.
The Audit and Risk Management
Committees review the key elements
of the Company’s business, finance,
operations and compliance risk(s) and
respective mitigation strategies. The
Risk Management Committee reviews
key strategic, business and operational
risks, while issues around Ethics & Fraud,
Internal Control over Financial Reporting
(ICOFR), as well as Process risks and their
mitigation are reviewed by the Audit
Committee.
The Company has a management
level committee – ‘Finance Investment
and Risk Management Council’ (FIRM
Council) which operates under a
charter and focusses on risks associated
with the Company’s business and
investments. The FIRM Council and/or
the management, periodically reviews
specific policies or charters for Fraud Risk
Management, Compliance and Internal
Audit.
The Enterprise-wide Risk Management
(ERM) function helps the management
and the Board to periodically prioritize,
review and measure risks against a
pre-determined risk appetite and
to suitably respond, depending on
whether the risks are internal, strategic or
external. Significant risks are prioritized
on likelihood and severity, and their
mitigation is reviewed regularly.
During FY2015, focus areas of the
management and the Board included
progress on strategy execution, quality
and regulatory, geo-political, compliance
and patent infringement risk exposures,
while process safety and health
continued to remain a priority for the
Company.
ADEQUACY OF INTERNAL
FINANCIAL CONTROL SYSTEMS
The Company has in place adequate
internal financial controls with reference
to financial statements. These controls
ensure the accuracy and completeness of
the accounting records and preparation
of reliable financial statements.
DIRECTORS’ RESPONSIBILITY
STATEMENT
In terms of Section 134(5) of the
Companies Act, 2013, your Directors
state that:
1. applicable accounting standards
have been followed in the
preparation of the annual accounts;
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