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CORPORATE SOCIAL RESPONSIBILITY

"Corporate Social Responsibility is the continuing commitment by business to behave

ethically and contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large"

The same report gave some evidence of the different perceptions of what this should mean from
a number of different societies across the world. Definitions as different as "CSR is about
capacity building for sustainable livelihoods. It respects cultural differences and finds the
business opportunities in building the skills of employees, the community and the
government" from Ghana, through to "CSR is about business giving back to society" from the
Phillipines.

Business and society have been coeval since time immemorial and also have been inter-
dependant. This relationship between business and society is appreciated in Rigveda also :
“Corporates should work like a honeybee, which takes the nectar of a flower without the flower
being losing its shape and fragrance and provides honey for the wellbeing of the society.” It
means that both have to work on a symbiosis manner for each one’s survival and success. The
business history is replete with evidences to believe that business flourishes only where society
thrives. On the contrary, business dies when society condemns and rejects it. No business can
survive without societal approval and sanction. The inter-dependant nature of relationship
between the business and the society is best illustrated by the management guru Peter Drucker
(1954) by the example of a ship and sea. He states that the relationship between business and
society is “like the relationship between a ship and the sea which engirds it and carries it,
which threatens it with storm and shipwreck, which has to be crossed but which is yet alien
and distant.” No doubt, business has been conducted primarily to earn profit and / or create
wealth. However, there are reasons and evidences to believe that the mindless obsession with
profit maximization at any cost carried to any extreme has led to spurt in sordid activities in
business causing harm to both the business and society and ultimately leading business to
flounder and fizzle out. Enrons Parmalats, Union Carbide, and World.com are to name a few
representing examples of such business collapses. Business history is also replete with
examples that only the businesses that are conducted through good or right practices enjoy
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societal sanction and survive and last for long. Johnson & Johnson, Maruti Limited, Reliance
Industries Limited, and Tata Iron and Steel Company are such examples that indicate that being
good in conducting business activities proves good for businesses also. Hence, there has been
increasing concern for conducting business in a good or ethical manner. Though there has been
a spurt in research activities on business ethics or ethics in business, not much research has so
far been conducted on what actually makes business ethics and how being ethical or good is
good for business also.
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INTRODUCTION DR’REDDY LABORATORIES

Dr. Reddy’s Laboratories was founded by Dr Anji Reddy, an entrepreneur-scientist, in 1984.

The DNA of the company is drawn from its founder and his vision to establish India’s first
discovery led global pharmaceutical company. In fact, it is this spirit of entrepreneurship that
has shaped the company to become what it is today.

Dr Anji Reddy, having moved out of Standard Organics Limited, a company he had
successfully co-founded, started Dr. Reddy’s Laboratories with $ 40,000 in cash and $120,000
in bank loan! Today, the company with revenues of Rs.2, 427 crore (US $546 million), as of
fiscal year 2006, is India’s second largest pharmaceutical company and the youngest among its
peer group.

The company has several distinctions to its credit. Being the first pharmaceutical company from
Asia Pacific (outside Japan) to be listed on the New York Stock Exchange (on April 11, 2001) is
only one among them. And as always, Dr. Reddy’s chose to do it in the most difficult of
circumstances against widespread skepticism. Dr. Reddy’s came up trumps not only having its
stock oversubscribed but also becoming the best performing IPO that year.

Dr. Anji Reddy is well known for his passion for research and drug discovery. Dr. Reddy’s
started its drug discovery programme in 1993 and within three years it achieved its first
breakthrough by out licensing an
anti-diabetes molecule to Novo Nordisk in March 1997. With this very small but significant
step, the Indian industry went through a paradigm shift in its image from being known as just
‘copycats’ to ‘innovators’! Through its success, Dr. Reddy’s pioneered drug discovery in India.
There are several
such inflection points in the company’s evolution from a bulk drug (API) manufacturer into a
vertically integrated global pharmaceutical company today.

Today, the company manufactures and markets API (Bulk Actives), Finished Dosages and
Biologics in over 100 countries worldwide, in addition to having a very promising Drug
Discovery Pipeline. When Dr. Reddy’s started its first big move in 1986 from manufacturing
and marketing bulk actives to the domestic (Indian) market to manufacturing and exporting
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difficult-to-manufacture bulk actives such as Methyldopa to highly regulated overseas markets,
it had to not only overcome regulatory and legal hurdles but also battle deeply entrenched
mind-set issues of Indian Pharma being seen as producers of 'cheap' and therefore ‘low quality’
pharmaceuticals. Today, the Indian pharma industry, in stark contrast, is known globally for its
proven high quality-low cost advantage in delivering safe and effective pharmaceuticals. This
transition, a tough and often-perilous one, was made possible thanks to the pioneering efforts of
companies such as Dr. Reddy’s.

Today, Dr. Reddy’s continues its journey. Leveraging on its ‘Low Cost, High Intellect’
advantage. Foraying into new markets and new businesses. Taking on new challenges and
growing stronger and more capable. Each failure and each success renewing the sense of
purpose and helping the company evolve.

With over 950 scientists working across the globe, around the clock, the company continues its
relentless march forward to discover and deliver a breakthrough medicine to address an unmet
medical need and make a difference to people’s lives worldwide. And when it does that, it
would only be the beginning and yet it would be the most important step. As Lao Tzu wrote a
long time ago, ‘Even a 1000 mile journey starts with a single step.’

OUR CORE PURPOSE

“ To help people lead healthier lives”

OUR VISION

“To become a discovery led global pharmaceutical company”

OUR VALUES

We strive for excellence in everything we think, say and do.

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Quality: We are dedicated to achieving the highest levels of quality in everything we do to
delight customers, internal & external, every time

Respect for the Individual: We uphold the self esteem and dignity of each other by creating an
open culture conducive for expression of views and ideas irrespective of hierarchy

Innovation & Continuous Learning: We create an environment of innovation and learning

that fosters, in each one of us, a desire to excel and willingness to experiment

Collaboration & Teamwork: We seek opportunities to build relationships and leverage

knowledge, expertise and resources to create greater value across functions, businesses and
locations

Harmony & Social Responsibility: We take utmost care to protect our natural environment
and serve the communities in which we live and work

Our business practices are guided by the highest ethical standards of truth, integrity and
transparency.

Corporate social responsibility

While 'Sustainability: The Triple Bottom Line' as a term may have a contemporary ring to it,
the spirit underlying it has been relevant through the ages.

In 1987, the World Commission on Environment and Development (established by a resolution

of UN General Assembly) defined sustainability as "Development which meets the needs of the
present without compromising the ability of future generations to meet their own needs". It also
popularized the use of this term for resources renew ability, desired business plan and a
progressive way of doing things.

At Dr. Reddy's, we believe that any high performance sustainable organization rests on the
three pillars of economic, social and environmental performance. To be a truly sustainable
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organization, in the broadest definition of its terms, an organization must perform well across
all three dimensions.

As a company, we are fully committed to the principles of sustainability. We see our

stakeholders as shareholders, to whom we promise sustained economic performance, the
society - to whom we promise to create positive impact through our activities both business as
well as voluntary - and finally the environment, which we promise will be well protected and
enriched from our various activities.

In recognition of the conviction that the prosperity of communities is integral to the success of
companies, Social Initiatives is higher on the agenda of more companies now than ever before.

At Dr Reddy’s, we take pride in the fact that our products and what they are intended to achieve
represent the core of Social Initiatives – to help people lead healthier lives. The company
achieves this objective through increased access and affordability of its generics, API and
branded generics products and addressing unmet and undeserved medical needs by innovation
through its Specialty and NCE businesses.

At Dr Reddy’s, Social Initiatives represents an integral component of Corporate Social

Responsibility. Our investments in the communities have extended beyond the adhoc
disbursement of charity to a planned program in capability building, helping extend the
sporadic to the sustainable. The various organizations that we support are:

Dr. Reddy’s Foundation

NAANDI Foundation
Centre for Social Initiative & Management (CSIM)

At the company, Social Initiatives does not just cover the community, but also employees.
This re-interpretation has happened for an important reason: society represents a mix of
employees and non-employees. By including employees in our definition of Social
Initiatives, the company has demonstrated that no initiative can succeed unless if the
initiators of the improvement do not figure among the beneficiaries themselves. It is this
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comprehensive address – employees to communities – that enhances the impact of the
company’s social initiatives, strengthening its case for true sustainability.

Dr. Reddy foundation

At Dr. Reddy’s we believe that for any development to be sustainable, people need to be
empowered to support themselves in the first place. The company also believes that in
every human being and organization there is a latent need to ‘give back to society’.

It is with this perspective that Dr. Reddy's Foundation was incepted by Dr K Anji Reddy,
Chairman of Dr. Reddy’s Laboratories, in 1996.

In Dr. K. Anji Reddy’s own words,

The Foundation acts as a social change catalyst that fosters, develops and promotes
initiatives at individual / group / organization levels to promote sustainable human and
social development. Believing in the inherent motivation and capacity of the human being
for progress – given the appropriate and adequate environment - the Foundation innovates
and tries out novel concepts in pilot models that are continuously refined and scaled up to
cover larger groups of deprived populations.

Life . Research . Hope - Driven by this spirit, the company, led by the Chairman, Dr K
Anji Reddy, called upon similar-minded corporates and created a new social platform, a
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not-for-profit development organization that could showcase not only to India but the
international community as well, the depth of corporate will in shouldering the
responsibility of finding solutions to long-pending social development problems of the
country.

NaandiFoundation
Naandi Foundation was created through this effort. It is an autonomous, public trust that
works together with governments, corporates and civil society to improve the lives of the
underprivileged.

To underline the company's commitment in supporting Naandi's objectives, Dr K Anji

Reddy became one of its principal founders, and took on the responsibility of its
Chairmanship as well.

The employees of Dr Reddy's too have been staunch supporters of Naandi's vision of
improving lives. The company has defined 'corporate giving' by coming forward to
donate unconditionally to Naandi's social initiative programs through the Power of 10™.
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The Power of 10™

The Power of 10™ is a mechanism created by Naandi that allows everyone to do their bit
for the society, even if it is donating Rs 10 every month towards a cause. And leading the
way, we are proud to say, have been the company's factory workers. They give generously
to the Power of 10™ , which is channelised by Naandi into its education project,
popularly known as the 'Support Our Schools' program, aimed at improving the quality
of education in over 2000 government schools.

To encourage this culture of giving showcased by its employees, Dr. Reddy's too makes a
contribution to the Power of 10™ that matches the contributions made by the employees.

Dr. Reddy's has become a model that is being emulated by more and more corporates,
institutions, and individuals thereby enabling Naandi to become the platform that allows
for an interface between civil society and the underprivileged.

For employees who want to do more, Naandi offers several windows of opportunities to
give back to the society. These range from adopting government schools, and
volunteering in them to improve quality education, to participating in tribal development
projects. Dr. Reddy's new recruits inevitably get their first taste of rural India, every year,
through an Outbound Rural Sensitivity Training, that is organised by Naandi.

Ability to garner civil society support has propelled Naandi's growth and reach. It is the
only NGO in the country to run automated central Midday meal kitchens in urban
centres - the ones at Hyderabad and Visakhapatnam presently cater to around 1200
government schools. So far the kitchens have supplied 45 million meals, without any
complaints, to the underprivileged that come to these schools. This task gets bigger as
Naandi targets to implement this model for the children of 5 other cities in the country by
2005.

Among its other innovations, Naandi has enabled the revival of dead irrigation assets by
converting the small farmer into a micro-entrepreneur and bringing water back to more
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than 40,000 drought -hit families. By creating sustainable and cost-effective social
entrepreneurship models Naandi is enabling technology transfers from The Lawrence
Berkeley National Laboratory, California , to bring safe drinking water to Indian villages.
And in keeping with its vision, Naandi continues to create new development
breakthroughs in the areas of health, education and livelihood that are being replicated by
governments across the country to impact millions of men, women and children in the
country.

Centre for Social Initiative and Management (CSIM)

Centre for Social Initiative and

Several social divides confront the Indian society
Management (CSIM), an
today: their growing intensity and emerging newer
Initiative under the aegis of
ones make the situation increasingly difficult.
Manava Seva Dharma
Samvardhani (MSDS), is a
Social Work education in the country does not
registered Public Charitable
prepare students for such a
Trust with Mr. P.N.Devarajan as
challenge - therefore, the need for professional
its founder and Managing Trustee.
and entrepreneurial talent. Compassionate
The Hyderabad Chapter of CSIM,
individuals, who pitch in with noble intentions,
started in 2002, is supported by
have limitations in finding breakthrough solutions
Dr.Reddy's as CSIM fits
and thus add to the list of non-performing and
Dr.Reddy's concept of
under-performing NGOs.
social sustainability through
enhancing community value
through their programmes.

The environment thus presents an opportunity for individuals with initiative and who can
think of bold and creative solutions to make a significant difference through concrete
actions. The challenge is to discover and mould Social Entrepreneurs, who can generate
radical, path-breaking solutions to social divides, who can take reasonable risks and
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persistently work towards creating a lasting social impact. Similarly, small and medium
tier non-governmental organizations (NGOs), with compassionate individuals as leaders,
also need organizational skills to recharge themselves, refocus priorities and become
impact-driven. They need a long-term approach to sustenance, creatively plan a revenue
model and leverage hidden resources including volunteer talent.

Centre for Social Initiative and Management (CSIM) is a learning center that

• Enrolls, discovers and shapes Social Entrepreneurs

• Supports the process of social entrepreneurship in small and medium NGOs
• Provides a volunteer constituency to Social Entrepreneurs and NGOs

At CSIM, you will have access to:

Social Entrepreneurship Initiative that is knowledge and involvement based and offers
learning in Social Entrepreneurship. The programs are:

• One year PG diploma in Social Initiative and Management,

• Four month part-time program in Social Entrepreneurship Outlook,
• Training for volunteers who wish to partner with Social Entrepreneurs,
• Entrepreneurship Learning club as an interactive networking platform,
• Incubation service to design and deploy impact based social change initiatives
• Internship program for the socially conscious
• Customized management skill development programs for NGOs

Volunteering Initiative, which offers short term and action oriented programs for
socially conscious individuals, youth and working professionals. Several platforms such
as the Social Action Group, Student Volunteer Consulting program and Student-Non
Profit Exchange programs are operational with individual volunteers and also in
partnership with colleges, schools and corporates.
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Education - Program Overview
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A conviction that poor are not poor but rich by a state and conscientious civil society
and it is by accessing those who had failed in getting democratic institutions work for
them, with the institutions and standing by them in realizing their constitutional rights
has been the motive force behind all what DRF has been doing since 1997.

Education is more than attending schools, it decides how life would be and it relieves
one from the circularity in life and it is the deciding line that separates participants in
the development from those who are left behind. The very essentiality of education
makes it a fundamental right. DRF choose to stand by the children, who are denied of
that right and make every effort possible to support them realize their rights.

Besides undertaking the programme of mobilising children to school we thought it

would be half hearted effort unless we address the issue of quality education which is
no less a right than accessing school, which led us to take up a programme of partnering
with schools in Secunderabad and Hyderabad districts in improving school processes,
curriculum delivery mechanisms to ensure every pupil get trained in curricular
objectives proclaimed by the government.

Organization had taken up several programs to support young persons reclaim their
education, ABC centers mobilize adolescent boys and girls who are past their school
age Give them education, prepare them to complete 7th and 10th exams and let them
acquire relevant Certification to pursue their careers .DRF also facilitates youngsters to
get trained in the modern skills like communication and computers and expose them to
various opportunities.
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Livelihoods - LABS
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Dr. Reddy’s Foundation has been engaged in promoting pioneering public-private
partnership models linking life, learning and livelihoods. The foundation addresses the
cause of poverty alleviation, with specific emphasis on livelihoods for marginalized youth.

Livelihood Advancement Business School (LABS)

The Livelihood Advancement Business School (LABS), a flagship program of Dr. Reddy's
Foundation (DRF), since its inception in 1999, promotes tailor made programs targeted at
youth in the age group of 18 -35 years from economically weakest sections and enables
them to gain access to opportunities for sustainable livelihoods and growth in the New
Economy. LABS had so far created over 70,000 new economy livelihoods in

LABS assumes the role of a catalyst, facilitating ongoing, concurrent participation of

citizens, corporate and government in finding lasting solutions for sustainable livelihoods.
LABS is now operational in 86 centers across India. 11 states of the country have been
already covered by the program including all the major metropolitan towns, cities as well
as small and medium towns. There are 26 new sector curriculums within the LABS
framework, for e.g., BPO, retail academy, Customer Relations and Sales, Micro Irrigation,
Automobile, Hospitality, Bed side Patient Assistants, etc. Each curriculum is incorporated
into the LABS framework after a thorough market survey is undertaken in the sector. The
survey analyses the possible livelihoods in the respective sector and the potential for
upward mobility for the LABS aspirant. The training is imparted for duration of 90 days,
which in itself is unique. The classroom modules are unique with lot of emphasis on life
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