Your Directors are pleased to present the 42^nd Annual Report, highlighting the Business Performance along with the Audited Financial Statements for the financial year ended March 31, 2026. This report epitomizes our commitment to transparency, accountability, and the highest standards of corporate governance.

Financial Highlights and Company Affairs Table 1 gives the consolidated and standalone financial highlights of the Company based on Indian Accounting Standards (Ind AS) for Financial year 2026 (i.e. from April 1, 2025 to March 31, 2026) compared to the previous financial year.

The Company's consolidated total income for the year was Rs. 350.6 billion, which was up by 4% over the previous year. Profit before tax (PBT) was Rs. 53.9 billion, representing a decline of 30% over the previous year.

The Company's standalone total income for the year was Rs. 222.2 billion, which was down by 8% over the previous year. PBT was Rs. 42.5 billion, which was lower by 41% over the previous year.

Revenues from lines of business and geographies given below are from the Company's IFRS results.

Revenues from Global Generics were up by 3% and stood at Rs. 299.0 billion. All geographies except North America, i.e. Europe, India and Emerging Markets, contributed towards the growth, which was further augmented by the contributions from the acquired Consumer Healthcare business in Nicotine Replacement Therapy (‘NRT') and favourable foreign exchange rate movements.

Revenues from North America stood at Rs. 113.7 billion, reported a year-on-year decline of 22%. This was largely on account of lower revenues from lenalidomide. During the year, the Company filed 15 Abbreviated New Drug Applications (‘ANDAs') in the United States (US). As of March 31,2026, there were 77 generic filings awaiting approval with the US Food and Drug Administration (USFDA), comprising 75 ANDAs and two New Drug Applications filed under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act.

Revenues from Emerging Markets were Rs. 67.6 billion, a year-on-year growth of 23%. The growth was attributable to new launches across markets and higher volumes, further supported by favourable foreign exchange movements.

Revenues from India stood at Rs. 62.2 billion, a year-on-year growth of 16%. Growth was driven by revenues from new brand launches, including our innovation portfolio, price increases and higher volumes.

Revenues from Europe were Rs. 55.5 billion, a year-on-year growth of 55%. The growth was primarily on account of revenues from the acquired NRT business and new generic product launches, momentum in the base business volumes and favourable foreign exchange movements, partially offset by price erosion in generics.

Revenues from Pharmaceutical Services and Active Ingredients (PSAI) stood at Rs. 34.8 billion, which was higher by 3% compared to previous year. Growth was due to revenues from new launches of Active Pharmaceutical Ingredient (‘API') products, momentum in the pharmaceutical services business and favourable foreign exchange movements, offset by lower API prices. During the year, the Company filed 128 Drug Master Files (DMFs) worldwide, including 16 filings in the US.

The Company's financial performance (standalone and consolidated) for the year ended March 31, 2026 is summarised below:

During the reporting year; there's no change in Authorised Share Capital of the Company.

The paid-up share capital of your Company increased by 7 201,605 from Rs. 834,455,365 to 7 834,656,970 in FY2026 due to allotment of 201,605 equity shares of 7 1/- each, upon exercise of stock options by eligible employees through the 'Dr. Reddy's Employees Stock Option Scheme, 2002' and 'Dr. Reddy's Employees ADR Stock Option Scheme, 2007'. The equity shares issued pursuant to the above Employee Stock Option Schemes rank pari-passu with the existing equity shares of the Company.

As on March 31, 2026, the Company's Share Capital stands at:

Your Directors are pleased to recommend a final dividend of 78/- (800%) on every equity share of 71/-, each fully paid-up for FY2026 subject to the approval of the members of the Company at this 42^nd Annual General Meeting ("AGM"). As per the Dividend Distribution Policy of the Company, the amount of maximum dividend pay-out (including interim dividend) can be up to 20% of the cash profit under consolidated financial statement prepared under Indian Accounting Standards (IND-AS).

The recommended dividend is in line with the provision of the said policy. The dividend, if approved at the 42^nd Annual General Meeting ("AGM") will be paid to those members whose names appear on the register of members of the Company as of end of the day on July 10, 2026. The total dividend pay-out will be approximately 7 668 Crores resulting in a pay-out of 10.2% of the consolidated cash profit for the financial year ended March 31, 2026. Such dividend will be taxable in the hands of the members in terms of the provisions of the Income Tax Act, 2025.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Dividend Distribution Policy, is available on the Company's website on https:www.drreddvs. com/cms/cms/sites/default/files/2022-09/Dividend%20 distribution%20policy.pdf

The Company has not transfered any amount to the general reserve for the year ended March 31, 2026.

The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 (the "Act").

During the year, there was no change in the nature of business of the Company. Further, there was no Significant change in the nature of business carried on by its subsidiaries.

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and as on the date of this report.

The Company has overall 57 entities, comprising 45 overseas subsidiary companies (including step-down subsidiaries),

9 subsidiary companies (including step-down subsidiary) in India and 3 joint venture and associate companies as on March 31, 2026. Changes during the FY2026 were as follows:

• Dr. Reddy's Laboratories SA, wholly owned subsidiary of the Company incorporated ‘Dr. Reddy's Laboratories (Vietnam) Company Limited, as a wholly owned subsidiary in Vietnam on May 9, 2025, consequently the said entity became wholly-owned step-down subsidiary of the Company.

• Imperial Owners and Land Possessions Private Limited (Formerly Imperial Credit Private Limited), wholly owned subsidiary of the Company liquidated and stands dissolved with effect from August 5, 2025.

Further, the Company sold its entire shareholding in Svaas Wellness Limited ("Svaas"), consequently effective from April 7, 2026, Svaas ceased to be wholly owned subsidiary of the Company.

Section 129(3) of the Act, states that where the Company has one or more subsidiaries or associate companies, it shall, in addition to its financial statements, prepare a consolidated financial statements of the Company and of all its subsidiaries and associate companies in the same form and manner as that of its own and also attach along with its financial statements, a separate statement containing the salient features of the financial statements of its subsidiaries and associates.

Hence, the consolidated financial statements of the Company and all its subsidiaries and associates, prepared in accordance with Ind AS 110 and AS 111 as specified in the Companies (Indian Accounting Standards) Rules, 2015, forms part of the Integrated Annual Report. Moreover, a statement containing the salient features of the financial statements of the Company's subsidiaries and joint ventures in the prescribed FormAOC-1, is attached as Annexure I to this Board's Report. This statement also provides details of the performance and financial position of each subsidiary and joint venture. In accordance with Section 136 of the Act, the audited financial statements and related information of the Company and its subsidiaries, wherever applicable, are available on the Company's website: https://www.drreddvs. com/. These are also available for inspection during regular business hours at our registered office in Hyderabad, India and/or in electronic mode

In terms of Regulation 16(1 )(c) of the SEBI Listing Regulations, Material Subsidiary shall mean a subsidiary, whose turnover or net worth exceeds ten percent of the consolidated turnover or net worth, respectively, of the Company and its subsidiaries in the immediately preceding accounting year and the listed entity shall formulate a policy for determining its ‘material' subsidiary.

Accordingly, the Company has three material overseas subsidiary companies as on March 31, 2026, namely,

Dr. Reddy's Laboratories Inc. (USA), Dr. Reddy's Laboratories SA (Switzerland), Northstar Switzerland SARL.

The Policy for determining Material Subsidiaries is available on the Company's website and can be accessed at: https://www.drreddvs.com/cms/sites/default/files/media-librarv/ Policv%20for%20determinina%20of%20material%20 subsidiaries%20%282%29.pdf

Further, in terms of Regulation 24(1) of the SEBI Listing Regulations, at least one Independent Director on the Board of the Company shall be a Director on the Board of an unlisted material subsidiary, i.e. a subsidiary, whose turnover or net worth exceeds twenty percent of the consolidated turnover or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year, whether incorporated in India or not.

In compliance with the said provisions, Mr. Arun M Kumar (DIN: 09665138), Independent Director of the Company, was appointed as a Director on the Board of Dr. Reddy's Laboratories Inc. (USA) w.e.f. September 21, 2022 and Dr. Claudio Albrecht (DIN: 10109819), Independent Director of the Company, was appointed as a Director on the Board of Dr. Reddy's Laboratories SA (Switzerland) w.e.f July 6, 2023.

The Company makes investments or extends loans/ guarantees to its subsidiaries for their business purposes. Details of loans, guarantees and investments covered under Section 186 of the Act, along with the purpose for which such loan or guarantee was proposed to be utilized by the recipient, form part of the notes 2.24, 2.6 A, and 2.6 C to the standalone financial statements provided in this Integrated Annual Report.

Your Company has adopted the Integrated Annual Report for FY2026, which includes both financial and non-financial information. The reporting weaves together our purpose, values, strategy, governance, performance and future outlook, all of which influence the material aspects of our business.

A detailed report on the Corporate Governance systems and practices of the Company is given in a separate chapter of this Integrated Report. Similarly, other information for shareholders is provided in the chapter on Additional Shareholders' Information. The Company has also formulated a Group Governance Policy to monitor governance of its unlisted subsidiaries across the globe

A certificate from M/s. S.R. Batliboi & Associates LLP, Statutory Auditors of the Company, confirming compliance with the conditions of corporate governance is attached to the chapter on Corporate Governance forming part of this Integrated Report.

Management Discussion and Analysis A detailed report on the Management Discussions and Analysis in terms of Regulation 34 of the SEBI Listing Regulations is provided as a separate chapter forming part of this Integrated Annual Report

The BRSR for FY2026 as mentioned under Regulation 34 of the SEBI Listing Regulations, is given as a separate chapter forming part of this Integrated Report.

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the BRSR Core parameters for the financial year ended March 31, 2026 have been assured on a limited and reasonable basis by DNV Assurance Private Limited, as disclosed in the BRSR forming part of this Integrated Report.

The Board of Directors, at their meeting held on May 12, 2026, approved the appointment of Mr. Srikanth Velamakanni (DIN: 01722758) as an Additional Director in the category of an Independent Director of the Company, for a term of five consecutive years commencing from July 1, 2026 up to June 30, 2031, not liable to retire by rotation, subject to approval of the shareholders at the ensuing 42^nd Annual General Meeting

The Company has received necessary declarations and confirmations from Mr. Velamakanni confirming that he meets the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI Listing Regulations and that he is not disqualified from being appointed as a Director.

Further, Mr. Velamakanni is not related to any Director or Key Managerial Personnel of the Company and has not been debarred from holding the office of Director by virtue of any order of the Securities and Exchange Board of India or any other authority. In the opinion of the Board, the aforesaid Directors are persons of integrity and possess relevant expertise, experience and proficiency required to effectively contribute to the affairs of the Company.

A brief profile of Mr. Velamakanni is provided in the Notice convening the 42^nd AGM for the information of the shareholders.

Dr. K P Krishnan (DIN: 01099097) an independent Director of the Company is going to complete his first term as an Independent Director on January 6, 2027. Based on the recommendation of the Nomination, Governance and Compensation Committee, the Board of Directors, at their meeting held on May 12, 2026 approved the re-appointment of Dr. Krishnan, as an Independent Director of the Company for a second term of five consecutive years from January 7, 2027 to January 6, 2032, subject to the approval of shareholders at the ensuing 42^nd AGM

A brief profile of Dr. Krishnan is provided in the Notice convening the 42^nd AGM for the information of the shareholders.

During the year, the shareholders at the 41^st Annual General Meeting held on July 24, 2025, approved the re-appointment of Mr. G V Prasad as a whole-time Director, designated as Co-Chairman and Managing Director of the Company fora further period of five years with effect from January 30, 2026 to January 29, 2031, liable to retire by rotation.

Mr. KSatish Reddy (DIN: 00129701), Whole-time Director, designated as Chairman, is liable to retire by rotation at the forthcoming 42^nd AGM and being eligible, seeks re-appointment. The shareholders had approved re-appointment of Mr. K Satish Reddy, Whole-time Director, designated as Chairman of the Company fora period of five years effective from October 1,2022 to September 30, 2027.

A brief profile of Mr. K Satish Reddy is provided in the Notice convening the 42^nd Annual General Meeting forming part of this Integrated Report.

During the year under review, there were no changes in the Key Managerial Personnel of the Company. As on the date of this report, the Company has the following Key Managerial Personnel as per Section 2(51) and Section 203 of the Act:

In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has confirmed that he or she meets the criteria of independence laid down in Section 149(6) of the Act and is in compliance with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 as well as Regulation 16( 1 )(b) of the SEBI Listing Regulations. Furthermore, each Independent Director has affirmed adherence to the Code of Conduct for Independent Directors prescribed in Schedule IV of the Act, and the Board has duly taken these declarations on record after assessing their veracity.

Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has carried out performance evaluation of its own performance, the Directors (including the Chairman and Co-Chairman) individually, as well as the evaluation of the working of the Committees. An independent external agency, EgonZehnder, a leadership advisory firm on board matters, was engaged to conduct the Board evaluation for FY2026. The recommendations were discussed with the Board and individual feedback was provided to the Directors Further details of Board evaluation are provided in the Corporate Governance chapter of this Integrated Report.

Assessment and appointment of members to the Board are based on a combination of criterias that includes ethics, personal and professional stature, domain expertise, gender diversity and specific qualifications required for the position. For appointment of an Independent Director, the independence criteria defined in Section 149(6) of the Act, and Regulation 16(1 )(b) of the SEBI Listing Regulations are also considered

Pursuant to Section 178(3) of the Act and Regulation 19(4) of the SEBI Listing Regulations, and based on the recommendation of the Nomination, Governance and Compensation Committee (NGCC), the Board has adopted a Nomination, Governance and Compensation Policy applicable to Directors, KMP, Senior Management and other employees. The Policy, inter alia, sets out the role of the NGCC, including matters relating to appointment and removal, remuneration, performance evaluation, succession planning and Board governance. The Policy is available on the Company's website at https://www.drreddvs.com/cms/sites/default/ files/2025-07/Nomination%2C%20Governance%20%26%20 Compensation%20Policv.pdf

The salient features of the Policy forms part of the chapter on Corporate Governance of this Integrated Report.

Our executive compensation program supports attracting, motivating, and encouraging continuity of relevant leaders who advance our critical business objectives and promote the creation of shareholders' value over the long-term

a) Attract highly talented individuals from within and across industries drawing from a diverse pool of global talent

b) Provide long term and short-term incentives that advance the interests of shareholders and deliver levels of pay commensurate with performance.

The three principal components of the compensation package include, base salary, annual cash-based variable pay, and equity-based long-term incentives. In making decisions with respect to each element of compensation, the competitive market for executives and compensation levels of the comparable companies are considered. Pay practices at companies with which Dr. Reddy's competes for talent, including those engaged in similar activities are reviewed from time to time. Our approach is to be market aware and not market driven. We believe that information regarding pay practices at other companies is useful to assess the reasonableness and competitiveness of our own.

We generally target executive pay to be within range of 75^th percentile of pay packages for executives in similar positions, responsibilities and/or experience in similar companies of comparable size.

We identify certain roles that are fungible across multiple industries where our comparative pool is not limited to peer generic pharmaceutical organisations. In such cases a wider sample is selected comprising of non-pharma marquee organisations operating in the country with whom Dr. Reddy's competes for talent.

Executive compensation is reviewed annually.

Executive increment percentages approach is lesser than the Company average, while the frontline receiving the highest increase. A higher increase may be made in the event of a role change, promotion. The Company's performance, affordability, individual performance and compensation history are other considerations, while deciding on compensation.

Our executive directors' compensation comprises of a fixed monthly component and a profit based annual commission based on standalone net profits of the Company. The total remuneration to be paid to the executive directors is within the limits prescribed under the provisions of the Companies Act, 2013.

While recommending such a commission, the NGCC also takes into account the overall corporate performance in a given year in terms of balanced scorecard achievement and the Key Performance Indicators (KPIs). The considerations include but are not limited to: Financial metrics covering growth in return on capital employed (RoCE) and profitability; Non-financial metrics covering aspects such as health, brand building, compliance, quality and sustainability of operations of the organization, as may be agreed upon from time to time with the Company.

Perquisites and retirement benefits are paid in accordance with the Company's compensation policies, as applicable to all employees. The Company, in compliance with Section 197 of the Act and the SEBI Listing Regulations, does not grant any stock options to the Executive Directors. No severance fee is payable to them.

In terms of the approval given by the members of the Company, each of the Executive Directors was entitled to get 0.75% of the net profits of the Company, i.e. Rs. 291.91 Mn each. However, the Board, on the recommendation of the NGCC approved a fair commission for the Executive Directors, i.e. Rs. 73.80 Mn and Rs. 131.20 Mn for Mr. K Satish Reddy and Mr. G V Prasad, respectively.

Our CEO compensation comprises of guaranteed cash, shortterm incentives in the form of variable pay, long-term incentives, retirals, and perquisites. 75% of our CEO's pay is linked with the Company's performance in terms of balanced scorecard achievement against plan and long-term incentives from ESOPs. Short Term incentives are tied to the Company performance against the balanced scorecard and individual performance of the CEO as determined by the Board of Directors

During the FY2026, Mr. Erez Israeli, Chief Executive Officer, has received an increment of 5.3% on fixed compensation.

His fixed salary was Rs. 7.3 Cr, with a target variable pay of 100%, and long-term incentives of value Rs. 15.30 Cr vesting at the end of 3 years.

Our current performance management follows a balanced scorecard approach comprising of current business performance, Building the future and Health of the Business. The Board of Directors uses a stringent process to set ambitious financial targets in line with the strategy of the Company. In addition to the financial targets, the scorecard also has ambitious strategic objectives across key priority areas, including targets related to Compliances and Safety matters. The scorecard is proposed by management council to the Board of Directors for approval before the start of the financial year. Each parameter is devised into a metric, financial or otherwise and is measured quarterly.

All parameters are scored based on a predetermined grid. Additional considerations such as wind-falls, impairments and one-offs are measured separately. Our performance management process is specifically adapted to different employee cohorts based on their specific needs, the overall principles remain the same across all the models.

Performance evaluation of Management Council ("MC") member's focuses on achievement of their Business Unit Scorecard. Individual MC evaluation focusses on achievement of:

a) The BU (Business Unit) scorecard for the year that contributes to the delivery of the overall Company's strategy

b) Demonstration of desired leadership behaviours and aligned to the overall Company values

Balanced scorecard performance is measured in constant currencies to reflect operational performance that can be influenced.

Fiscal Year 2026 reflected a resilient performance despite product specific headwinds and several on-off impacts.

These were mitigated by strong double-digit growth in the underlying base business, supported by favourable foreign exchange movements and incremental revenues from the acquired consumer health portfolio in Nicotine Replacement Therapy. We delivered annual revenues exceeding US$3.58 billion, representing a 3.2% year-over-year growth and US$0.8 billion in EBITDA, with a margin of 22.8%.

These outcomes reflect the strategic leadership and execution capabilities of our management team, which enabled consistent delivery across key priorities, namely, scaling the base business, advancing key pipeline programs, pursuing targeted inorganic initiatives to complement the Company's organic growth ambitions, while continuing to enhance efficiencies across operations.

Further, our leaders continued to build long-term franchises in biosimilars, consumer healthcare, and innovation, through disciplined capital allocation and focused organizational structures

Our commitment to quality, regulatory compliance and sustainability remained unwavering through the year

Our two-pronged strategy of strengthening the base business, while investing in our future growth drivers positions us to build a high-performance organisation that delivers sustainable growth and creates long-term value for our stakeholders.

A brief snapshot of our scorecard performance for FY2026 is given below:

Overall Evaluation: Performance remained within acceptable levels, though marginally below stretch targets.

Variable Pay is paid based on annual performance target achievements as cash in the first quarter of the next financial year. The payout range for individual performance is between 0% to 150%. Overall payout is capped at 300% of target.

FY26 reflected a resilient operating performance, delivering highest ever annual revenues, amid product-specific headwinds and certain one-time impacts. The underlying base business continued to deliver double-digit growth. Based on the overall assessment, the Board of Directors decided on an Annual Incentive payout for the CEO amounting to Rs. 7.28 Cr.

Majority of the grants are ESOPs granted at fair market value, a small portion is in the form of Performance modified phantom shares that allows for multiplicative upside basis performance against defined metrics.

Grants are made annually and they cliff Vesting at the end of 3 years. ESOPs are exercised at fair market value (at the time of grant) and the Phantom Shares are payable in cash upon vesting.

Any performance linked compensation paid to Management Committee members is subject to malus and clawback rules. This means that the NGCC may decide - subject to applicable law-to retain any unpaid or unvested incentive compensation (malus), or to recover incentive compensation that has been paid or vested in the past (clawback).

This applies in cases where the payout has resulted from a violation of laws or conflicts with internal management standards, including Company and accounting policies.

This principle applies to both the short-term Annual Incentive and Long-Term Incentive (LTI) plans.

The Board of Directors met six times during the year.

In addition, an annual Board retreat was held to discuss strategic matters. The intervening gap between the meetings was within the period prescribed under the Act and the SEBI Listing Regulations. Details of Board meetings and the Board retreat are given in the chapter on Corporate Governance forming part of this Integrated Report.

Separate Meeting of Independent Directors In terms of requirements under Schedule IV of the Act and Regulation 25(3) of the SEBI Listing Regulations, four separate meetings of the Independent Directors were held during FY2026. Further details are mentioned in the chapter on Corporate Governance forming part of this Integrated Report.

As on March 31, 2026, the Board has the following Committees:

i) Audit Committee;

ii) Stakeholders' Relationship Committee;

iii) Nomination, Governance and Compensation Committee;

iv) Sustainability and Corporate Social Responsibility Committee;

v) Risk Management Committee;

vi) Science, Technology and Operations Committee; and

vii) Banking, Authorisations and Allotment Committee

All the recommendations made by the Board committees, including the Audit Committee, were accepted by the Board. The details of the above Committees are given in the Chapter on Corporate Governance forming part of this Integrated Report.

In terms of Section 134(5) of the Act, your Directors state that:

1. Applicable accounting standards have been followed in the preparation of the annual accounts and that no material departures have been made from the same;

2. Accounting policies have been selected and applied consistently. Judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the FY2026 and of the profit of the Company for that period;

3. Proper and sufficient care has been taken to maintain adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. Annual accounts have been prepared on a going concern basis;

5. Adequate internal financial controls for the Company to follow have been laid down and these are operating effectively; and

6. Proper and adequate systems have been devised to ensure compliance with the provisions of all applicable laws and these systems are operating effectively.

Adequacy of Internal Financial Control Systems The Company has in place adequate internal financial controls with reference to its financial statements.

These controls ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements

The Company has a Risk Management Committee of the Board, consisting entirely of Independent Directors. Details of the Committee and its terms of reference are set out in the chapter on Corporate Governance forming part of this Integrated Report.

The Audit Committee and Risk Management Committee review key risk elements of the Company's business, finance, operations and compliance, and their respective mitigation strategies. The Risk Management Committee reviews strategic, business, compliance and operational risks whereas the Audit Committee reviews issues around ethics and fraud, internal control over financial reporting (ICOFR), as well as process risks and their mitigation.

The Company's Risk Management Committee operates under the Company's Risk Management Policy and focuses on risks associated with the Company's business and compliance matters. This Committee periodically reviews matters pertaining to risk management. Additionally, the Enterprise Risk Management (ERM) function helps the Board and the Management to prioritize, review and measure business risks against a pre-determined risk appetite, and their suitable response depending on whether such risks are internal, strategic or external.

During FY2026, focus areas for risk assessment and mitigation included geo-political risks, inventory, assets, products, cyber security, data security & privacy, ethics & compliance, quality & regulatory, safety, country, strategic and other key operating risks.

All related party transactions entered into during the financial year ended March 31,2026 were in the ordinary course of business and on an arm's length basis and were carried out in compliance with Section 188 of the Companies Act, 2013 and Regulation 23 read with Schedule XII of the SEBI Listing Regulations, as amended.

All related party transactions, including any modifications, are placed before the Audit Committee for review and approval. Annual omnibus approval is obtained for repetitive transactions entered into in the ordinary course of business at arm's length and not material under the SEBI Listing Regulations, and a quarterly statement of such transactions is placed before the Audit Committee and the Board of Directors for review and approval. Disclosures relating to related party transactions form part of the notes to the financial statements included in this Integrated Annual Report.

In line with the requirements of the Act and the SEBI Listing Regulations, your Company has a Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions, which is also available on the Company's website https://www.drreddvs.com/cms/sites/default/files/ media-librarv/Policv%20on%20Materialitv%20of%20 Related%20Partv%20Transactions%20and%20Dealina%20 with%20Related%20Partv%20Transactions%20%281%29. pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties

In accordance with Section 134(3)(h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of the material contracts or arrangements with related parties referred to in Section 188(1) of the Act, in FormAOC-2 is attached as Annexure - II to this Board's Report.

The Company has an Ombudsperson Policy (Whistle-Blower/ Vigil mechanism) to report concerns. Reporting channels underthe vigil mechanism include an independent hotline, a web-based reporting site (drreddvs.ethicspoint. coml and a dedicated e-mail to Chief Compliance Officer.

In addition, concerns may also be submitted in writing by post or courier to the offices of the Chief Compliance Officer. The Ombudsperson Policy also safeguards against retaliation of those who use this mechanism. The Audit Committee Chairperson is the Chief Ombudsperson. The Policy also provides for raising concerns directly to the Chief Ombudsperson. Details of the Policy are available on the Company's website at: https://www.drreddvs.com/cms/cms/ sites/default/files/2021-12/Qmbudsperson.pdf

M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/E300004), will complete their second consecutive term as Statutory Auditors at the conclusion of the 42^nd AGM and shall cease to hold office thereafter. The Board of Directors places on record its deep appreciation for their professional services and contribution to the Company during their tenure.

Accordingly, based on the recommendation of the Audit Committee, the Board of Directors has recommended the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W100018), as the Statutory Auditors of the Company for a term of five consecutive years, commencing from the conclusion of the 42^nd AGM up to the conclusion of the 47^th AGM, subject to approval of the shareholders. Details relating to their appointment, including proposed remuneration for FY 2026-27, are set out in the Notice convening the 42^nd AGM forming part of this Integrated Report.

M/s Deloitte Haskins & Sells LLP have confirmed their eligibility and that they satisfy the criteria prescribed under Section 141 of the Companies Act, 2013, and that their appointment, if approved, will be in accordance with the applicable provisions of the Act and the rules made thereunder. They have also confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India ("ICAI") and hold a valid certificate issued by the ‘Peer Review Board of ICAI'.

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amended Regulation 24A of the SEBI Listing Regulations, members at the 41^st AGM held on July 24, 2025, appointed M/s. Makarand M Joshi & Co. Company Secretaries (FRN: P2009MH007000), as the Secretarial Auditors of the Company, for a term of five consecutive years from April 1, 2025 to March 31, 2030.

In compliance with Regulation 24Aof the SEBI Listing Regulations, the Annual Secretarial Compliance Report issued by the Secretarial Auditor was submitted to the Stock Exchanges within the statutory timelines. The Report of the Secretarial Auditor for FY26 is annexed herewith as Annexure - III.

Pursuant to Section 148(1) of the Act, read with the relevant Rules made thereunder, the Company maintains the cost records in respect of its ‘pharmaceuticals' business.

On the recommendation of the Audit Committee, the Board has appointed M/s. Sagar & Associates, Cost Accountants (Firm Registration No. 000118) as Cost Auditor of the Company for FY2027 at a remuneration of Rs.9,00,000 (Rupees Nine Lakhs only) plus reimbursement of out-of- pocket expenses at actuals and applicable taxes. M/s. Sagar & Associates have confirmed that they are free from disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that the appointment meets the requirements of the Act.

They have further confirmed their independent status and an arm's length relationship with the Company.

The provisions of the Act also require that the remuneration of the Cost Auditors be ratified by the members and therefore, the same is recommended for approval of the members at the forthcoming 42^nd AGM. As a matter of record, relevant Cost Audit Reports for FY2025 were filed with the Registrar of Companies on August 18, 2025, within the stipulated timeline. The Cost Audit Report for FY2026 will also be filed within the timeline.

There are no qualifications, reservations, adverse remarks or disclaimers by the Statutory Auditors in their report, by the Secretarial Auditor in the Secretarial Audit Report or by the Cost Auditor in the Cost Auditor Report. During the year, there were no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act, other than the instance reported to the Central Government.

Further, the Statutory Auditors have filed a report under sub-section (12) of section 143 of the Companies Act, 2013, in formADT -4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government relating to misappropriation of inventory (valued at Rs. ~ 1.96 Crore) which was not material to the financial statements

In terms of Section 118(10) of the Act, the Company complies with Secretarial Standards 1 and 2, relating to the 'Meetings of the Board of Directors' and ‘General Meetings', respectively as issued by the Institute of Company Secretaries of India ("ICSI").

The Company has also voluntarily adopted the recommendatory Secretarial Standards 3 on ‘Dividend'.

During FY2026, there were no significant or material orders passed by the Courts or Regulators or Tribunals impacting the going concern status and operations of the Company in the future.

The Company has a Policy to ensure prevention, prohibition and redressal of sexual harassment at the workplace. It has an Apex Committee and an Internal Complaints Committee in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which operate under a defined framework for complaints pertaining to sexual harassment at workplace.

The same is available on the Company's website at https:// www.drreddvs.com/cms/sites/default/files/2025-07/PQSI-l%20 Policy.pdf

During the year under review, following is the status of complaints:

As per Section 135 of the Act, the Company has a Board-level Committee namely, Sustainability and Corporate Social Responsibility (SCSR) Committee. As on March 31, 2026, the Committee consists of Dr. K P Krishnan (Chairman),

Mr. Sanjiv Mehta, Mr. G V Prasad and Mr. K Satish Reddy.

Based on the recommendation of the SCSR Committee, the Board has adopted a Corporate Social Responsibility (CSR) Policy that provides guiding principles for selection, implementation and monitoring of CSR activities and formulation of the annual action plan. During the year, the Committee monitored the CSR activities undertaken by the Company including the expenditure incurred thereon as well as implementation and adherence to the CSR policy.

An impact assessment of the eligible projects has been carried by an independent agency and the report of such impact assessment was noted by the SCSR Committee and the Board. Details of the CSR Policy and initiatives taken by the Company during the year are available on the Company's website at https://www.drreddvs.com/cms/sites/default/ files/2025-07/CSR%20Policv.pdf. The report on CSR activities as well as executive summary of the impact assessment report are attached as Annexure IV to this Board's Report.

We continue to prioritise social impact, delivering positive health outcomes for patients worldwide by enabling access to affordable and innovative medicines, fostering diversity, equity, and inclusion in our work environment, integrating environmental considerations into our operations, and ensuring responsible business practices.

In FY2026, we continued to make progress on our 12 stated ESG goals. During the year, Science Based Targets initiative (SBTi) has validated our targets which includes:

• Near-term targets: Reduce absolute Scope 1 and 2 GHG emissions by 80% by FY2030 from FY2023 base year. Reduce Scope 3 emissions by 51.6% per INR value added within the same timeframe

• Long-term targets: Reduce absolute Scope 1, 2 and 3 GFIG emissions by 90% by FY2045 from

FY 2023 base year.

• Net-Zero: Achieve net-zero greenhouse gas emissions across the value chain by FY2045.

To read more about the mitigation strategy for our updated material risks and opportunities, please refer to page 163 of our Business Responsibility and Sustainability Report forms part of the Integrated Annual Report. To read more about our ESG progress, programs, and impact, please refer to the Strategic Review section on Page 24 onwards of our Integrated Report.

Pursuant to the provisions of the Act, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, declared dividends which remained unpaid or unclaimed for a period of seven years have been transferred by the Company to the IEPF, which has been established by the Central Government.

The above Rules also mandate transfer of shares on which dividends are lying unpaid and unclaimed for a period of seven consecutive years to IEPF. The Company has issued individual notices to the members whose dividend is unclaimed and unpaid and advising them to claim their dividend. The details of transfer of unpaid and unclaimed amounts and shares to IEPF are given in the chapter on Additional Shareholders Information forming part of this Integrated Report.

Employees Stock Option Schemes The Company has three employee stock option schemes namely, ‘Dr. Reddy's Employees Stock Option Scheme, 2002', ‘Dr. Reddy's Employees ADR Stock Option Scheme, 2007', and ‘Dr. Reddy's Employees Stock Option Scheme, 2018' (the "Schemes").

The term of Dr. Reddy's Employees Stock Option Scheme, 2002 ended on January 28, 2022. However, the options already granted under the 2002 Scheme are eligible for exercise, in terms of the Scheme. There are no other changes in the said schemes during the year. The Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The details of Company's stock option Schemes as required under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are available on the Company's website at https://www.drreddvs.com/ investor#reports-and-filina#annual-report.

The Company's Secretarial Auditors, M/s. Makarand M. Joshi & Co., Company Secretaries, have certified that the Employee Stock Option Schemes of your Company have been implemented in accordance with the Regulations and the resolutions passed by the Members in this regard.

The details also form part of note 2.25. of the notes to accounts of the standalone financial statements.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached as Annexure - V to this Board's Report.

In terms of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in the said rules forms part of the Integrated Annual Report.

Considering the provisions of Section 136 of the Act, the Integrated Annual Report, excluding the aforesaid information, is being sent to the members of the Company and others entitled thereto. The said information is available for inspection by the members at the registered office of the Company or through electronic mode, during business hours on working days up to the date of the forthcoming 42^nd AGM. Any member interested in obtaining a copy thereof may write to the Company Secretary in this regard.

Particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are attached as Annexure VI to this Board's Report.

The Annual Return of the Company as on March 31, 2026, in terms of the provisions of Section 134(3)(a) of the Act, is available on the Company's website at https://www.drreddvs. com/investor#reports-and-filina#annual-report

The Board's Report has been prepared in accordance with Section 134 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, as amended by the Companies (Accounts) Second Amendment Rules, 2025, effective July 14, 2025.

The Company has complied with the provisions of the Maternity Benefit Act, 1961 and the rules made thereunder during the financial year under review

No application has been filed under the Insolvency and Bankruptcy Code. Consequently, the requirement to disclose any applications filed or proceedings pending under the Insolvency and Bankruptcy Code, 2016 during the year, along with their status at the close of the financial year, is not applicable.

There was no instance of one-time settlement with any Bank or Financial Institution.

Your Directors place on record their sincere appreciation for the significant contribution made by your Company's employees through their dedication, hard work and commitment, as also for the trust reposed in your Company by the medical fraternity and patients. The Board of Directors also acknowledges the support extended by the analysts, bankers, Government of India and various countries and other government agencies, media, customers, business partners, members and investors at large.

The Board looks forward to your continued support in the Company's endeavor to accelerate access to innovative and affordable medicines, because "Good Health Can't Wait".

For and on behalf of the Board of Directors

Chairman

DIN: 00129701

Place: Hyderabad

Date: May 12, 2026.