PRE FEASIBILITY REPORT

DR. REDDY S LABORATORIES LTD. CHEMICAL TECHOPS III PLOT NO.116, 116A, 116B & 126C, S.V. CO OP. IND. ESTATE, BOLLARAM VILLAGE, JINNARAM MANDAL, MEDAK DISTRICT, TELANGANA PRE FEASIBILITY REPORT DR. REDDY S LABORATORIES LTD. Regd. Office : 8 2 337, Road No.3, Banjara Hills, Hyderabad 500 034. Phone: 040 4900 2900 Fax: 040 4900 2999 E mail: narasingaraoch@drreddys.com, pkirankumar@drreddys.com SUBMITTED TO MINISTRY OF ENVIRONMENT AND FORESTS, GOVERNMENT OF INDIA INDIRA PARYAVARAN BHAWAN, JOR BAGH ROAD, NEW DELHI

Pre Feasibility Dr. Reddy s Laboratories Ltd, Chemical Tech Ops III Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram, Jinnaram Mandal, Medak District, Telangana 1. Executive Summary M/s. Dr. Reddy s Laboratories Ltd, Chemical Tech Ops III proposed to expand its existing API s manufacturing facility from 4.45 TPM to 28.1 TPM located at Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram, Jinnaram Mandal, Medak District, Telangana. The expansion entails a capital cost of Rs. 12 crores towards modernization of zero liquid discharge facility, debottlenecking by way of incorporating the advanced technology and state of the art equipment, provision of solvent recovery system, additional boiler. The proposed expansion does not involve any additional civil construction for manufacturing blocks except utility and pollution control related works. The company has about 5.77 acres of land at Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram. The site is having a longitude 78 0 20 45 (E) and latitude 17 0 32 16 (N). The plant is surrounded by Ambica Steel Udyog Pvt. Ltd., in north direction, Open plot in south direction, Internal IDA road in east direction and US Granites in west direction. The nearest human settlement from the site is Bollaram village located at distance of 1.42 km from the site in Northeast direction. There are no ecologically sensitive areas like national parks, sanctuaries within 10 km radius of the site. 2. Introduction of the Project / Background Information: 2.1 Identification of Project and Project Proponent: The objective of this pre-feasibility study is to provide information for the manufacturing of Active Pharmaceuticals Ingredients unit with production capacity of 28.1 TPM with a proposal to manufacture 22 products, R&D products and installation of solvent recovery system at Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram, Jinnaram Mandal, Medak District, Telangana in an area of about 5.77 acres. 1 P age

The project proponent Mr. J Shravan Reddy, Associate Director - Operations, BE Chemical Engineering having 14 years experience. 2.2 Brief Description of Nature of the Project: The synthetic organic chemicals manufacturing will involve series of chemical reactions to get the final Product. The products of reaction are purified, filtered and dried before packing the final product. The Chemical reactions require various supporting services like Heating, Cooling and Agitation etc. 2.3 Need for the project and its importance to the country and or region: World population is growing at an alarming rate. In the Indian sub continent population growth is more than that of developed countries. To meet the needs and comforts of ever-growing population industrialization became inevitable. For the growing population the needs of health care substitutes are also increasing. 2.4 Demands-Supply Gap: The project is envisaged to meet the demand supply gap in both domestic market and export market, as API demand is increasing day by day. 2.5 Imports Vs. Indigenous Production: Since the site is already got US FDA, Australian TGA, WHO GMP, NAMMD Romania, EDQM Europe & ISO 9001 Certifications and supplying the products to cater the needs of national and international markets. The project shall reduce imports in some of the intermediate & finished products and also enhance the foreign exchange reserves in view of the proposed exports of few products to regulatory markets. 2.6 Domestic/export Markets: The products shall cater to both domestic and export markets. 2.7 Employment Generation (Direct and Indirect) due to the project: The present project for manufacturing of Synthetic Organic Chemicals requires substantial handling of raw materials, goods in process and finished goods. The proposed expansion shall increase the employment potential. 3. Project Description 3.1 Type of Project including interlinked and interdependent projects, if any: M/s. Dr. Reddy s Laboratories Ltd, Chemical Tech Ops III proposed to expand its existing API s manufacturing facility from 4.45 TPM to 28.1 TPM located at Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram, Jinnaram 2 P age

Mandal, Medak District, Telangana. The expansion entails a capital cost of Rs. 12 crores towards modernization of zero liquid discharge facility, debottlenecking by way of incorporating the advanced technology and state of the art equipment, provision of solvent recovery system, additional boiler. 3.2 Size or magnitude of operation: List of products and manufacturing capacity Manufacturing Capacity After Expansion S.No Name of the Product CAS No. Capacity TPM Kg/day 1 Esomeprazole Mg 161973-10-0 2 66.67 2 Omeprazole 73590-58-6 4 133.33 3 Omeprazole Magnesium 95382-33-5 1.5 50 4 Omeprazole Sodium 95510-70-6 0.3 10 5 Omerprazole Form B 73590-58-6 1 33.33 6 Pantoprazole Sodium 138786-67-1 3 100 7 Rabeprazole Sodium 117976-90-6 2.5 83.33 8 Amlodipine Besylate 111470-99-6 4 133.33 9 Amlodipine Maleate 88150-47-4 0.9 30 10 Lacipidine 103890-78-4 0.15 5 11 Alendronate Sodium Trihydrate 121268-17-5 0.2 6.67 12 Apprepitant 170729-80-3 0.1 3.33 13 Levocetrizine Di HCl 130018-87-0 0.3 10 14 Ramipril 87333-19-5 3 100 15 Terbinafine HCl 78628-80-5 4 133.33 16 Tizanidine HCl 64461-82-1 0.5 16.67 17 Zolendronic Acid 118072-93-8 0.01 0.33 18 Atomoxeline HCl 82248-59-7 0.05 1.67 19 Disodium Pamidronate 57248-88-1 0.01 0.33 20 Ropinrole HCl 91374-20-8 0.055 1.83 21 Lansoprozole 103577-45-3 0.25 8.33 22 Voriconazole 137234-62-9 0.25 8.33 23 R&D Products 0.03 1 Total 28.1 936.83 3.3 Process Description with process details (a schematic diagram/flow chart) Typical process description with process details is presented in Annexure I of FORM I Application. 3 P age

3.4 Raw material required along with estimated quantity likely source, marketing area of final product/s, mode of transport of raw material and finished product. All the raw materials required for manufacturing mostly available in India or from abroad. There are no banned chemicals or products which are proposed to be used. 3.5 Availability of water its source, energy/power requirement and source should be given The total water requirement shall increased from 88.5 KLD to 330.5 KLD after expansion out of which 216.5 KLD shall be drawn from APIIC (Industrial water supply) and balance shall be recycled water. The total water balance is presented table below. Total Water requirement After Expansion (Tentative) Purpose INPUT (KLD) OUTPUT (KLD) Fresh Water Recycled Water Loss Effluent Process 39.5 44.2* Washings 10 10 Scrubber 10 10 R& D 10 10 Boiler Feed 22 24 42 2 Cooling Tower 55 90 122 23 Additional water required for pretreatment of 25 25 water in RO/DM Plant Domestic 25 1.5 23.5 Gardening 20 20 Gross Total 216.5 114 185.5 147.7 Total 330.5 333.2 * Process effluents contain soluble raw materials, byproducts, solvents etc. 3.5.1 Electricity: The requirement of power will be 5700 HP. Further, due to the nature of the reactions and requirement of continuous power, the management proposes to put in place 100% self generation of power by DG sets of 1x1450 KVA and 1x1010 KVA capacity. Therefore no delay or difficulty is foreseen on the power front 4 P age

3.6 Quantity of wastes to be generated (liquid and solid) and Scheme for their Management/disposal Quantity of Effluent Generated and Mode of Treatment After Expansion (Tentative) S.No Description Quantity (KLD) Treatment/Disposal 1 Process Effluent 44.2 After Pre treatment sent to Waste water 2 Washings Effluent 10 recycling facility (WWRF at CTO II) 3 Scrubber Effluent 10 having Stripper, Multiple Effect 4 R & D Effluent 10 Evaporator followed by ATFD and 5 DM/RO Rejects from pretreatment 25 condensate to biological treatment. RO is of raw water provided for tertiary treatment. Total HTDS - I 99.2 6 Boiler Blow Down 2 After pre treatment sent to Waste water 7 Cooling tower Blowdown 23 recycling facility (WWRF at CTO II) 8 Domestic Effluent 23.5 having Reverse Osmosis System and Multiple Effect Evaporator System. Total HTDS - I 48.5 Grand Total (I+II) 147.7 Solid Wastes and Disposal After Expansion (Tentative) S.No Name of the Hazardous waste Units Quantity Disposal 1 2 Solvent Residue (Including SRS) Process Organic residue TPD 4.33 TSDF, Dundigal (V), Rangareddy District for Incineration / Authorized cement plants for co - processing. 3 Spent Carbon TPD 0.18 4 Spent Solvents & Spent Mixed Solvents KLD 800 Recovered within the plant premises / Reused / Sold to Authorized third parties. 5 Inorganic residue TPD 0.29 TSDF, Dundigal (V), Rangareddy 6 Evaporation salts TPD 1.82 District for land filling. 7 ETP Sludge TPD 1 8 Catalyst Kg/day 1 Sent to manufacturers for recovery. 9 Detoxified Containers and container liners of HW & hazardous chemicals Shall be disposed after complete detoxification. HDPE Drums no.s/month 1500 Plastic Bags Kg/Month 2000 Glass Bottles Kg/Month 3000 Carboys no.s/month 5000 10 Waste oil LPM 2000 Authorized Reprocessors / Recyclers. 11 Used batteries No.s/Year 30 Authorized Reprocessors / Recyclers. 5 P age

4. Site Analysis 4.1 Plant Location M/s. Dr. Reddy s Laboratories Ltd, Chemical Tech Ops III proposed to expand its existing API s manufacturing facility from 4.45 TPM to 28.1 TPM located at Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram, Jinnaram Mandal, Medak District, Telangana. The expansion entails a capital cost of Rs. 12 crores towards modernization of zero liquid discharge facility, debottlenecking by way of incorporating the advanced technology and state of the art equipment, provision of solvent recovery system, additional boiler. The proposed expansion does not involve any additional civil construction for manufacturing blocks except utility and pollution control related works. The company has about 5.77 acres of land at Plot. Nos. 116, 116A, 116B & 126C, S.V. Cooperative Industrial Estate, IDA, Bollaram. The site is having a longitude 78 0 20 45 (E) and latitude 17 0 32 16 (N). The plant is surrounded by Ambica Steel Udyog Pvt. Ltd., in north direction, Open plot in south direction, Internal IDA road in east direction and US Granites in west direction. The nearest human settlement from the site is Bollaram village located at distance of 1.42 km from the site in Northeast direction. There are no ecologically sensitive areas like national parks, sanctuaries within 10 km radius of the site. 5. Planning Brief: The project is envisages to be completed by December 2015, and the production shall be initiated thereon. Consultants are identified for preparing the detailed project report. 6. Proposed Infrastructure: 6.1 Power Requirement and Supply/Source The total power requirement is 5700HP. 6.2 Utilities List of Utilities S.No Utility Permitted Proposed After Expansion 1 Oil Fired Boiler 3 TPH --- 1 x 3 TPH 2 DG Set* 320 KVA, 250 KVA and 500 KVA * Shall be kept as Standby. 1450 KVA 1010 KVA 1 x 1450 KVA 1 x 1010 KVA 1 x 500 KVA 1 x 320 KVA 1 x 250 KVA 6 P age

Equipments The basic technology involved in the manufacturing of Bulk drugs is the process Kettles, Heat Exchangers, Centrifuges, and Storage Tanks. To support the process equipment Boilers, Chilling plants, Cooling Towers Etc. are required. All the above equipment can be sourced indigenously and the lead time to supply the equipment will not exceed 20 weeks. 6.3 Waste management Liquid Effluents The main sources of effluent generation from the plant are process, washings, Scrubber, blow downs from utilities like cooling tower, boiler & domestic effluents. The process effluents are segregated on the basis on TDS and COD loads and treated in Effluent treatment system. Air Pollution The sources of air pollution from the plant are from 3TPH existing Oil fired boiler, and DG set of 1x 320 KVA, 1 x 250KVA. 1 x 500kVA existing and 1 x 1450kVA and 1 x 1010KVA capacity.dg sets shall be provided with stack heights based on the CPCB formula for effective stack height. Solid waste Solid wastes are generated from the process, solvent distillation, distillate from stripper, salts from ATFD, sledges from ETP (primary & secondary), waste oil from DG sets, used batteries from DG sets. The stripper distillate, process residue and solvent residue are sent to TSDF/cement plants for co-incineration. The evaporation salts are sent to TSDF. Filter media like spent carbon, catalyst and hyflow are sent to TSDF/authorized recyclers. Waste oil and used batteries from the DG sets are sent to authorized recyclers. The sludge from effluent treatment plant is considered hazardous and the same is sent to TSDF. The ash from boiler is sold to brick manufacturers. The other solid wastes expected from the unit are containers, empty drums which are returned to the product seller or sold to authorize buyers after detoxification. 7. Rehabilitation and Resettlement (R&R) Plan Not applicable as the land area is only 5.77 acres already acquired. 7 P age

8. Project Schedule & Cost Estimates 8.1 Likely date of start of construction and likely date of completion (Time schedule for the project to be given) December 2015 8.2 Estimated project cost along with analysis in terms of economic viability of the project The estimated cost of the project is approximately Rs. 12 Crores. Project Cost Rs. In Crores Plant& machinery 6.0 Civil buildings 2.0 Structures 1.0 Total 9.0 Pipe lines & insulation 20% on plant & machinery 1.2 Electricals & instrumentation 10% on plant & machinery 0.6 Erection & commissioning & painting 8% on plant & machinery 0.56 Land & development 0.1 Material handling equipment charges 0.1 Laboratory equipment 0.1 Safety Equipment 0.1 Furniture, fixtures, computers, lighting etc 0.2 Total 2.96 Contingencies & pre-operative expenses 5% on the above 0.148 Project Cost 12.0 8 P age