DRIVIN G ROWTH - Dr. Reddy's

internal accounting, administrative and
organisational controls, efficiency of
operations and the quality of performance in
carrying out assigned responsibilities. Internal
audit function reports directly to the CEO
and the Audit Committee of the Board of
Directors — both of whom have resolved to
support it as an independent appraisal
function. The Chief Internal Auditor,
therefore, is responsible to only the CEO and
Audit Committee, to assure both of a broad
range of audit coverage and of effective
actions on the audit findings and
recommendations.
Dr. Reddy’s has designed a system of
internal control to (i) safeguard the
Company’s assets, (ii) ensure that
transactions are properly authorised, and (iii)
provide reasonable assurance, at reasonable
cost, of the integrity, objectivity and reliability
of the financial information. The
management of Dr. Reddy’s duly considers
and takes appropriate action on
recommendations made by the Statutory
Auditors, Internal Auditors, and the Audit
Committee of the Board.
While it is true that no internal control
system can be perfect and foolproof, the CEO
and the Audit Committee are of the opinion
that it has adequately safeguarded the
interests of Company during 2001-02, and is
likely to do so in the foreseeable future.
opportunities and threats
OPPORTUNITIES
WITH GLOBAL REVENUES OF
approximately US$ 364 billion, the healthcare
industry is one of the world’s largest
industries, and India is gradually emerging as a
major player. The strength of India’s scientific
manpower and its relatively low costs should
allow the pharmaceutical industry to establish
a larger presence both in India and abroad.
Some Indian companies, of which Dr. Reddy’s
is one, have already moved up the value chain
from generics to novel drug delivery systems
and then to new drug discoveries. They have
the capability of capturing a larger share of the
global market.
Fifteen out of 35 leading molecules in the
world will go off-patent by 2005, and the
generics market in the developed world is
estimated to reach a size of US$ 45 billion.
Those who have skills in patent laws,
international regulatory approvals and
challenges, world class production facilities and
global marketing reach can create a serious
presence in the generics market. Moreover,
with the growth in generics, Dr. Reddy’s as
well as some other Indian pharmaceutical
companies should benefit in terms of greater
international demand for APIs.
The frontiers have opened in industry in
genomics and bio-informatics. Research- and
discovery-based pharmaceutical companies are
DR. REDDY’S LABORATORIES LTD. | MANAGEMENT DISCUSSION AND ANALYSIS | ANNUAL REPORT 2001-2002
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