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Good Health Can't Wait.

Supplier Code of Conduct

Approved by

Arunabha Raychaudhuri P Yugandhar

Head – Sourcing & External Manufacturing Head - SCM
Global Sourcing

Issued on
01/09/2021
Review Committee: Supply Chain Management Team and Heads
Next Review date: 01/09/2024
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Contents

Introduction ………………………………………………………………………………… 3

Ethics ……………………………………………………………………………….... 4

Labour and Human Rights………………………………………………………………..…. 6

Wages and Benefits ……………………………………………………………………..…. 7

Health and Safety……………………………………………………………… ………………... 8

Environment …………………………………………………… …… ………………………….. 9

Management Systems…………………………………………………………………………… 10

Bribery and Corruption …………………………………………………………………………. 11

International Trade Compliances and Sanctions……………………………………………. 12

Personal Data Protection ………………………………………………….….……………………… 13

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DR.REDDY’S SUPPLIER CODE OF

CONDUCT – 2021
I INTRODUCTION

Dr.Reddy's is committed to providing quality products and services that are designed to improve the
health of patients. This Supplier Code of Conduct ("SCOC') defines non-negotiable minimum
standards that Dr.Reddy's asks its suppliers / vendors / service providers (hereafter referred to as
Supplier(s)), to respect and adhere to when conducting business with Dr.Reddy's.

At Dr.Reddy’s, our aim is to accelerate access to affordable and innovative medicines to patients
because Good Health Can’t Wait. This Supplier Code of Conduct (“SCOC’) defines non-negotiable
minimum standards that Dr.Reddy’s asks its suppliers / vendors / service providers (hereafter referred
to as Supplier(s)), to respect and adhere to when conducting business with Dr.Reddy’s.

This SCOC is modelled on and contains language from the Pharmaceutical Industry Principles
for Responsible Supply Chain Management (the “Principles”).

This SCOC is a part and parcel of the Sustainable Development approach of Dr.Reddy’s and its
commitment towards its internal Code of Business Conduct and Ethics (“COBE”). The Supplier commits
herein to strictly observe and comply with all the fundamental principles expressed in this SCOC in all
of its activities and sites. It is the Suppliers responsibility to disseminate, educate and exercise diligence
to ensure compliance with this SCOC by its directors, employees, agents and sub-tier suppliers
(“Supplier’s representatives”). All Supplier’s representatives are required to report suspected
violations of laws, rules, regulations either through internal reporting channels available at their
organisations or through designated channel detailed below. This includes reporting misconduct by
Dr.Reddy’s’ employees with whom business interactions are held. Dr.Reddy’s’ is committed to non-
retaliation and will maintain, as appropriate, confidentiality and anonymity with respect to all concerns
raised.

Concerns may be raised by:

a) Accessing https://drreddys.ethicspoint.com.The link can be accessed through the company’s

website.
b) Calling on the hotline number. List of hotline numbers are available in ‘Raise a concern by Phone’
section of https://drreddys.ethicspoint.com.. The hotline is available 24x7 in multiple languages.
c) Writing to [email protected] or [email protected].
d) By Post/ Courier to:

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Chief Compliance Officer/ Chief Ombudsperson,

Dr.Reddy’s Laboratories Limited,
8-2-337, Road No. 3, Banjara Hills,
Hyderabad – 5000 034, Telangana, India

II. ETHICS

All Suppliers are expected to conduct their business in an ethical manner and act with integrity. The
ethics elements include:

a) Business Integrity

Suppliers shall uphold the highest standards of integrity and transparency in all their transaction and
interaction with Dr.Reddy’s and must refrain from being involved in any form of corruption, extortion
or embezzlement.

b) Insider Trading

Suppliers should never communicate externally about Dr.Reddy’s prospects, performance

or policies nor disclose inside information which would affect the price of Dr.Reddy’s securities
unless they are required under any law or by an order from a competent authority. Suppliers are
forbidden from making any public posting of confidential or proprietary information related to any
aspect of Dr.Reddy’s business.

c) Fair Competition

Suppliers shall conduct their business in line with fair competition and in accordance with all
applicable anti-trust laws. Suppliers shall employ fair business practises including accurate and
truthful advertisement.

d) Privacy & Intellectual Property

Supplier shall safeguard and ensure protection of data privacy and protection of intellectual property
rights of Dr.Reddy’s, its directors, employees, agents and business partners.

e) Identification of Concerns

Suppliers shall provide means for Supplier Representatives to report concerns or potentially unlawful
activities in relation to any transaction with Dr.Reddy’s and its workplace. Any report should be
treated in a confidential manner. Suppliers must investigate such reports and take corrective action
if needed.

f) Whistle blower Protection and Anonymous Complaints

Suppliers must ensure the protection of whistle blower confidentiality and prohibit retaliation against

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employees, who participate in such programs in good faith. Suppliers shall provide an anonymous
complaint mechanism for its employees to report workplace grievances in accordance with local
laws and regulations. Suppliers shall have systems in place enabling anonymous grievance,
reporting and management. A designated officer shall continuously monitor the grievance
mechanism, keep records on the issues raised and take appropriate action in a confidential manner.

g) Fraud Prevention and Reporting

Suppliers shall implement robust fraud prevention and reporting program. Suppliers are required to
report all occurrences of fraud (actual or under investigation) involving Dr.Reddy’s business,
regardless of materiality, by writing to Dr.Reddy’s in the manner as mentioned in Section I above.

h) Conflict of Interest

Dr.Reddy’s expects all employees to be free from actual or potential conflict of interest. A conflict of
interest occurs whenever the prospect of direct or indirect personal gains may influence or appear
to influence your judgement or actions while conducting business with Dr.Reddy’s. The Supplier
should report to Dr.Reddy’s any situation that may appear as a conflict of interest.

i) Acceptance of Entertainment and gifts

Dr.Reddy’s employees should never accept or offer gifts, favour’s, services, entertainment, money
or other items of value that are intended to influence judgment or actions of its suppliers. Suppliers
are expected not to offer any kind of gifts or any other kind of personal benefit to Dr.Reddy’s
employees resulting from the relationships with the Suppliers. The Supplier is committed to work
against all forms of corruption, money, gifts, loans and rebates of unreasonable value which
are in non- compliance with all applicable laws, rules and regulations

j) Animal Welfare

Animals shall be treated humanely with pain and stress minimized. Animal testing should be
performed after consideration to replace animals, to reduce the numbers of animals used, or to refine
procedures to minimize distress. Alternatives should be used wherever these are scientifically valid
and acceptable to regulators.

k) ACCURACY OF BUSINESS RECORDS

All financial books and records must conform to generally accepted accounting principles. Records
must be complete and accurate in all material respects. Records must be legible, transparent and
reflect actual transactions and payments. Partners will not use any “off the books” or similar funds.

l) COOPERATION WITH GOVERNMENT AGENCIES

Suppliers will cooperate with investigating government agencies charged with enforcing compliance

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as and to the extent required by local laws (including, where permitted, by providing reasonable
access to facilities and workers). When required, partners will notify the relevant authority if they
receive credible information that a worker, contractor or subcontractor has violated local laws.

m) Data Controls.

Suppliers warrants to protect all of Dr.Reddy’s data and Confidential Information, and
implement due controls to safeguard all information of Dr.Reddy’s. Any breach of this
provision shall be considered as material breach and Dr.Reddy’s shall have the right to
terminate the Agreement and claim compensation available under Applicable Laws.

Suppliers shall not use Dr.Reddy's brands without the written permission of Dr.Reddy's.

In cases where suppliers are authorized to represent Dr.Reddy's / use their brand are expected to
abide by the Dr.Reddy's Code of Business Conduct and Ethics.

n) Sustainable sourcing and Traceability

Suppliers must procure all materials responsibly and ethically and perform due diligence on the sources
of important ingredients to promote legal and sustainable sourcing. Suppliers must make sure whether
the supply chain of the products contains conflict minerals (including tantalum, tin, tungsten and gold)
to help Dr.Reddy’s fulfil its obligations. Suppliers must provide evidence of compliance upon request.

III. LABOR AND HUMAN RIGHTS

Suppliers are expected to protect the human rights of their employees and to treat them with dignity
and respect. The labour and human rights elements include:

a) Child Labour and Young Workers

Suppliers shall not use child labour. The employment of young workers below the age of 18 shall
only occur in non-hazardous work and when young workers are above a country’s legal age for
employment or the age established for completing compulsory education. Suppliers shall provide
the necessary and appropriate direct assistance for the removal of children from the worst forms of
child labour and for their rehabilitation and social integration.

b) Forced Labour

Suppliers shall prohibit all forms of forced or compulsory labour. All work must be voluntary and
workers shall be free to leave work or terminate their employment with reasonable notice. Workers
must not be required to surrender any government-issued identification, passports, or work permits
as a condition of employment. Suppliers shall ensure that contracts for both direct and contract
workers clearly convey the conditions of employment in a language understood by the worker.

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c) Non discrimination

Suppliers shall not, discriminate or make distinction, exclude or give preference on the basis of race,
colour, age, gender, sexual orientation, ethnicity, disability, religion, political affiliation, union
membership, national origin, or marital status, in hiring and employment practices such as
applications for employment, promotions, rewards, access to training, job assignments.

d) Termination of Employment

Suppliers shall not terminate the employment of a worker unless there is a valid reason for such
termination connected with the worker’s capacity or conduct or based on the operational
requirements of the undertaking, establishment or service.

e) Fair Treatment

Suppliers must be committed to a workplace free of harassment and should not threaten workers
with or subject them to harsh or inhumane treatment, including sexual harassment, sexual abuse,
corporal punishment, mental coercion, physical coercion, verbal abuse or unreasonable restrictions
on entering or exiting company provided facilities.

f) Employment Policy

Suppliers are expected to declare and pursue an active policy designed to promote full, productive
and freely chosen employment which also ensure that there is work for all who are available for and
are seeking work; that such work is as productive as possible; and that there is freedom of choice
of employment and the fullest possible opportunity for each worker to qualify for, and to use his or
her skills and endowments in, a job for which he or she is well suited, irrespective of race, colour,
sex, religion, political opinion, national extraction or social origin.

g) Freedom to express oneself

Suppliers must respect the right of workers to associate freely, form and join workers organizations
of their own choosing, seek representation, and bargain collectively, as permitted by and in
accordance with applicable laws and regulations. Suppliers shall not discriminate with respect to
employment based on union membership and, in particular, shall not make employment subject to
the condition that the worker relinquish union membership or cause of dismissal for not joining in the
union.

h) Pre-Employment Screening

Third Parties who provide manpower services / people and who would have access to company
information or business processes must ensure that results from candidate pre-employment or pre-
engagement screening processes meet Company standards before an appointment is confirmed

IV. WAGES AND BENEFITS

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Suppliers should ensure that they pay workers according to the applicable wage laws, including
minimum wages, overtime hours and mandated benefits.

Suppliers shall:

Ensure payment of at least the minimum wage to all workers, as required by applicable laws and
regulations and provide all legally mandated benefits. Periodically review and adjust minimum wage
rates as per applicable laws.

 Ensure compliance with principle of equal remuneration for men and women workers for work of
equal value.

 Communicate with the workers basis on which they are being compensated in a timely manner and
also about the overtime requirements and the wages to be paid for such overtime.

 Ensure that the workers are duly notified of the method used to calculate wages. Wages are paid in
regular intervals and with reasonable frequency through cash, by check or by bank transfer, to the
exclusion of any other form of compensation, except in the specific cases. Deductions from wages
for disciplinary reasons are prohibited.

V. HEALTH AND SAFETY

The Supplier shall ensure a safe and healthy working environment for all employees working at their
sites. The Supplier are expected to develop a Health and Safety (HS) organization to define, implement
and follow-up on an HS policy and HS Management System that includes compliance with the applicable
local and national regulations. The health and safety elements include:

Workers Health and safety protection

Suppliers shall identify and protect workers from any physical, chemical and biological hazards in the
workplace as well as from risks associated with any infrastructures used by their employees. Safety
information for any identified workplace risks shall be made available to inform and train workers to
protect them from the risk. This includes safety information about hazardous substances used:
chemicals, pharmaceuticals active ingredients, intermediate products, etc.

Protection from hazardous materials

Suppliers should adopt and implement a coherent policy on safety in the use of chemicals at work, which
includes the production, the handling, the storage, and the transport of chemicals as well as the disposal
and treatment of waste chemicals, the release of chemicals resulting from work activities, and the
maintenance, repair and cleaning of equipment and containers of chemicals. In addition, it should
allocate specific responsibilities to suppliers and exporting states. Safety information relating to
hazardous materials – including pharmaceutical compounds and pharmaceuticals intermediate
materials – shall be available to educate, train, and protect workers from hazards.

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Response to Emergency

Supplier’s shall identify and assess possible emergency situations in the workplace and minimize their
impact inside and/ or outside the site by implementing emergency response plans and procedures.
Suppliers will identify and assess likely and potential emergency situations in the workplace and minimize
their impact by implementing emergency plans and response procedures.

Process Safety

Suppliers will have safety programs in place for managing and maintaining all their production processes
in accordance with the applicable safety standards. Suppliers will address product-related issues and
their potential impact during all stages of the production process. For hazardous installations the supplier
will conduct specific risk analyses and implement measures that prevent the occurrence of incidences
such as chemical releases and or explosions.

Social Security

Suppliers must lay down a minimum standard for the level of social security benefits and the conditions
under which they are granted. It covers the nine principal branches of social security, namely medical
care, sickness, unemployment, old age, employment injury, family, maternity, invalidity and survivors’
benefits.

VI. ENVIRONMENT

Suppliers should comply with all applicable environmental regulations and obtain and maintain all
required environmental permits, licenses, information registrations and should follow their operational
and reporting requirements. The environmental elements include:

Waste and Emissions

Suppliers should have systems in place to ensure the safe handling, movement, storage, recycling,
reuse, or management of waste, air emissions and wastewater discharges. Any of these activities which
have the potential to adversely impact human or environmental health will be appropriately managed,
measured, controlled and treated prior to release of any substance into the environment. Suppliers will
have systems in place to prevent or mitigate accidental spills and releases into the environment.

Resource Conservation and Climate Protection

Suppliers are expected to use natural resources (e.g. water, sources of energy, raw materials) in an
economical way. Negative impacts on the environment and climate will be minimized or eliminated at
their source or by practices such as the modification of production, maintenance and facility processes,
material substitution, conservation, recycling and material reutilization. Suppliers will engage in the
development of climate-friendly products and processes to reduce power consumption and greenhouse
gas emissions.

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Compliance with legal and regulatory requirements

The Supplier shall ensure compliance with the regulations and recommendations relating to
environmental protection applicable in the countries where it carries out its activities. The Supplier should
obtain and maintain appropriate certificates and/or permits allowing it to operate and prepare reports in
accordance with applicable regulations and should be available at the sites. Suppliers should ensure
that transportation of any consignment shall abide all applicable laws and regulations. All the vehicles
used for transportation should be in good condition.

VII. MANAGEMENT SYSTEMS

Suppliers must adopt or establish a management system designed to ensure compliance with
applicable laws and regulations, identify and mitigate related operational risks, and facilitate
continuous improvement with the expectations of these principles. The management system elements
include:

Risk Management

Suppliers are expected to implement mechanisms to identify, determine and manage risks in all
areas addressed by this SCOC and as per the applicable laws, regulations and standards. .

Documentation

Suppliers are expected to develop adequate documentation to demonstrate that they share the
principles and values expressed in this SCOC. This documentation may be reviewed by Dr.Reddy’s
from time to time. Supplier to dispatch material or provide services only after the PO is released.

Training and Competency

Suppliers will establish appropriate training measures to allow their managers and employees to gain
an appropriate level of knowledge and understanding of this SCOC, the applicable laws and regulations
and generally recognized standards.

Audits and Assessments

Dr.Reddy’s personnel may visit (and/or engage an external monitor to visit) Supplier’s facilities, with
or without notice, to assess compliance with this SCOC and to audit Supplier’s wage, hour, payroll,
and other worker records and practices.

Communication

A process for communicating clear and accurate information about the Supplier’s performance,
practices, and expectations to its workers, Suppliers, and customers is to be followed as a regular
practice.

Commitment and Accountability

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Suppliers shall demonstrate commitment to the concepts described in this document by

allocating appropriate resources, if required. The Suppliers shall indemnify, hold harmless and

defend, at its own expense, Dr Reddy’s, its directors, officers and employees from and against
any and all claims, liabilities, demands, proceedings, damages, losses, costs and expenses
including reasonable attorney fees (each a "Third Party Claim"), incurred by Dr.Reddy’s in
connection with, or resulting from any acts or omissions or a breach of any contractual
obligation or unlawful act of the Service Provider or by the representatives, officers,
employees, sub-contractors or third parties of the Service Provider.

Single Platform

Vikreta Connect to be used as a single platform for all business transactions and ensure all invoices
are digitally signed.

SUPPLIER SELECTION & MONITORING

Suppliers shall apply the principles outlined in this document when selecting their own partners and
suppliers. Partners shall have or put in place systems to monitor their supplier and subcontractor
compliance.

BUSINESS CONTINUITY

Suppliers are responsible for the development and implementation of appropriate business continuity
plans for operations supporting Dr.Reddy’s business.

CONTINUAL IMPROVEMENT

Suppliers are expected to continually improve by setting performance objectives and goals, executing
implementation plans and taking necessary corrective actions for deficiencies identified by internal
and/or external assessments, audits, inspections and management reviews.

ECONOMIC SUSTAINABILITY

Suppliers are urged to help promote social and economic development and contribute to the
sustainability of the communities they operate in. Suppliers shall also, engage socially and economically
different categories of suppliers through inclusive procurement processes that promote equal
opportunities.

VIII. BRIBERY AND CORRUPTION

The Suppliers shall not make any payment, gift or other commitment to employees of Dr.Reddy’s or
to government officials or otherwise in a manner contrary to applicable laws, policies or

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standards of conduct in relation to performance of its obligation towards Dr.Reddy’s under any
contract or otherwise. Nothing in this SCOC shall render Dr.Reddy’s liable to reimburse the
Suppliers or Supplier’s Representatives for any such consideration given or promised or for any
consequences arising out of such action.

The Supplier shall provide anti-bribery and anti-corruption training to relevant personnel, including
any relevant subcontractors, at the Supplier who act on behalf of Dr.Reddy’s or interact with
government officials during the course of any services provided to Dr.Reddy’s. The Supplier shall
provide Dr.Reddy’s the opportunity to evaluate the training to determine whether it abides by
Dr.Reddy’s standards and shall conduct additional training, as requested by Dr.Reddy’s. The
Supplier, upon request by Dr.Reddy’s, shall certify that the anti-bribery and anti-corruption training
has taken place.

IX. INTERNATIONAL TRADE COMPLIANCES AND SANCTIONS

Many laws govern trade across borders, including laws that are designed to ensure that transactions
are not being used for money laundering, laws that prohibit companies from illegal trade boycotts, as
well as “Sanction Laws” i.e., laws regulating/ restricting imports and exports with relation to certain
individuals and / or entities who are residents or operate on the territory of certain countries
categorized as “Sanctioned Countries” (by certain countries/ international organizations), the list of
which changes/ gets supplemented from time to time.

Dr.Reddy’s honour the trade, import and export control laws of all countries in which it operates
and comply with all applicable laws, rules and regulations and the Suppliers are also expected to
do the same. Trade requirements often change and laws in certain region may conflict.
Suppliers are responsible for knowing the laws that apply to them and seek expert advice if in doubt.

In this context, the Supplier shall:

(a) Disclose (voluntarily or upon being asked) to Dr.Reddy’s whether or not it is or has been (directly
or indirectly) subject to any Sanction Laws;

(b) Notify immediately to Dr.Reddy’s in the event any Sanction Laws gets imposed on it (directly
or indirectly) at any future point of time;

• Provide correct and reliable information regarding their legal owners, actual owners (who directly
or indirectly control the Supplier), members of Board of Directors or Senior Management, details
of servicing Bank and immediately notify in writing of any subsequent changes in such
information provided;

(c) Not directly or indirectly make any payments or provide other benefits or engage in any
business transaction with any third party to whom the Sanction Laws are applicable;

(d) Maintain appropriate import, export and customs records at each of its business locations;

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(e) Obtain all necessary licenses before the export or re-export of products, services or technology;

(f) Not cooperate with any restrictive trade practices or boycott that is prohibited or penalized
under applicable laws

X. PERSONAL DATA PROTECTION

Dr.Reddy’s may transfer personal data of its employees, directors or other persons (“Personal
Data Subjects”) during its normal course of business with its suppliers. With respect to such personal
data, the Supplier shall:

 Be aware of and comply with the applicable laws with respect to personal data confidentiality
and protection;

 Guarantee that such personal data shall be processed, stored and transferred in accordance with
the requirements under the applicable laws;

 Obtain consent from and notify the rights to the Personal Data Subjects, prior to transfer of
such personal data to any third party for the purpose of storing and processing;

 Ensure that such personal data is transferred and processed only for the purpose for which
the Personal Data Subjects have given their consent;

 Indemnify Dr.Reddy’s/ Personal Data Subjects, against any claim, loss and damages arising out
of the breach of any applicable laws with the respect to such personal data;

 Ensure protection of such personal data through organizational or technical means from
unauthorized access or processing.

Note: The Supplier Code of Conduct is also applicable to Aurigene Pharmaceutical Services Limited (APSL)

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