1 Steadfast on Sustainability Sustainability Report 2022-23
2 Building on the success of the first edition, we announced our renewed Sustainable Development Goals (SDGs) last year, steering our actions to achieve specific environmental, social and governance (ESG) targets by the financial year ending March 31, 2027. The renewed SDGs reflect a coming of age of our sustainability journey. The learnings and successes from the first edition have shaped our aspiration for this phase and signify a certain boldness that comes with perseverance on a chosen path. The underlying spirit behind our sustainability efforts lies an earnest commitment to build a positive influence on the environment, the community and to conduct our business responsibly. We steadfastly tread this path while maintaining continuous engagement with our stakeholders. 2
3 This is our fourth annual Sustainability Report and it reflects the coming of age of our sustainability journey. It documents our progress based on our ‘Sustainability Framework’ that comprises: • Sustaining as a partner of choice • Being an employer of choice • Growing as an HSE champion of choice • Becoming a neighbour of choice Reporting period April 2022 – March 2023 Reporting Cycle Annual Scope & Boundary • Corporate office, Hyderabad, India • R&D centre, Hyderabad, India • R&D centre, Manchester, UK • Manufacturing facilities in India - Bidar (Unit IV) - Bollaram (Unit III) - Shameerpet (Unit II) Scope of reporting • Financial performance reporting: India, USA & UK • Environmental performance indicators: India & Manchester (only incident statistics) • Employee metrics: India & Manchester • Community updates: India About this report Framework used We have referred to the Global Reporting Initiative (GRI) Universal Standards 2021 framework in developing this report. In our effort to plan for action, we have used the SDGs to frame our goals under the sustainability framework. Contents 3
4 Message from our Chairman Dear Stakeholders, Over the last 24 years, thanks to the trust that our clients have reposed in us, Sai Life Sciences has grown into a global CRO-CDMO providing the entire range of services along the drug discovery journey with world-class facilities across three continents. As we enter our 25th year, we rededicate ourselves to working with global innovator partners to accelerate a healthier future that is built on the strong fundamentals of sustainability. At Sai, we partner with key stakeholders with our strong presence and capabilities to handle advances in science and sustainability. The pursuit of drug discovery is becoming fast-paced. The demands of changing time as well as our experience of working with diverse partners including innovator pharma companies, biotechs, start-ups and academic institutions for over two decades guide our actions to institutionalise the various sustainability initiatives. For us, sustainability is about ensuring positive near-term as well as long-term impact on all the aspects of business touching our key internal and external stakeholders. At the heart of each of our sustainability initiative is the ultimate goal of making this planet better to live in for the future generations. We are aware of the fact that doing what is necessary is no longer enough. Our sustainability thoughtscape has changed to what we can do more. We stepped up our efforts on all fronts by renewing our internal Sustainable Development Goals (SDG) and charting out the roadmap to achieve specific Environmental, Social and Governance (ESG) targets by the financial year ending March 31, 2027. On every front, be it water management, cutting down on the usage of traditional modes of energy and replacing it with renewable sources, or increasing the Diversity, Equity and Inclusion (DEI) quotient at our workplaces, we are pushing the envelope to make the overall journey of drug discovery and development integrated with sustainability. To sustain the momentum, we will continue to energetically engage with our partners, learn from the rich experience of our peers and direct our efforts to ‘Make it better together.’ Sincerely, K Ranga Raju Chairman 4
5 Message from our CEO Dear Stakeholders, Sai Life Sciences entered its Silver Jubilee year in 2023 with aplomb, surpassing its vision of supporting global innovator partners in bringing 25 new medicines to market by 2025. The company crossed this milestone two years ahead of schedule and is poised to sustain this momentum on the back of a strong portfolio of molecules at various stages of clinical development. More significantly, our business growth has gone hand in hand with our sustainability agenda. At every step, we have been aware of the responsibility of being a vital link in the supply chain of innovator companies that are addressing the unmet medical needs of the patients. It is our constant endeavour to combine our deep expertise across science, quality, and HSE with operational excellence to generate sustainable value for our stakeholders and with each passing year, we are stepping up our efforts. New sustainability goals, renewed vigour On World Environment day 2023, we renewed our internal Sustainable Development Goals (SDG) charting out the roadmap to achieve specific environmental, social and governance (ESG) targets by the financial year ending March 31, 2027. Our renewed Sustainable Development Goals reflect a coming of age of our sustainability journey. The learnings and successes from the first edition have shaped our aspiration for this phase and signify our willingness to be bold and relentless on the chosen path. While sustainability has always been at the heart of our ethos at Sai, we continue to raise the bar by taking inspiration from all our customers and partners. Along with setting targets, we are forging partnerships that will enable us to sharpen our approach to assess the impact of climate change and develop a strategy to address it. We have joined the Science Based Targets initiative (SBTi), a global body enabling businesses to set ambitious emission reduction targets in line with the latest climate science. Accordingly, we have committed to set near-term company-wide emission reductions in line with climate science with the SBTi. Joining the SBTi will enable us to set targets, assess progress and calibrate actions to meet goals in a time-bound manner. It will allow the company to learn from SBTi’s rich experience of helping its member companies drive change and create an impact on the ground. 5
6 Besides, some of the other key updates include • We submitted our first Communication of Progress (CoP) as a signatory to the United Nations Global Compact (UNGC), showing commitment to sustainability practices • We concluded PSCI audits from innovator pharma customers with no major observations • We joined the ‘Sustainable Markets Initiative’ taskforce as part of Manufacture 2030, with stakeholders to take concrete steps to decarbonise healthcare supply chains • We strengthened sustainability governance by adding clauses on anti-corruption, bribery and anti-money laundering in our Code of Conduct and Ethics Policy • We began monitoring and measuring Scope 3 emissions to increase transparency and visibility of our carbon footprint across the value chain • We set up the ‘Sustainability Governance Council’ to integrate sustainability matters into business strategy and to oversee the enforcement of the sustainability mandate Augmenting capabilities, building partnerships At Sai, we build lasting partnerships with our clients through collaboration. We take a nimble and creative approach to deliver high-quality, cost effective solutions for our biotech and pharma partners to accelerate the time to market. In 2022-23, we concluded Sai Nxt, the 5-year long organization-wide initiative that focused on three key areas -- People & Culture, Processes & Automation and Infrastructure & Scientific capabilities by making a cumulative investment of US $150 million. Sai Nxt has provided us with a perfect platform to propel our growth and we will continue to maintain the momentum by strengthening capabilities. In the reporting year, these are some of the areas where we strengthened our capabilities and forged new partnerships which significantly contribute to the sustainability agenda: • We entered into a 5-year strategic agreement with Schrödinger, whose physics-based computational platform is transforming the way therapeutics and materials are discovered, to set up the Sai Schrödinger Research Laboratories (SSRL) in Hyderabad, India. In 100-day, we inaugurated SSRL at our R&D campus in Hyderabad, India. SSRL is a dedicated facility for integrated discovery work streams including medicinal & synthetic chemistry, in vitro biology, and process chemistry • We opened a new High-Potency API (HPAPI) manufacturing facility at our cGMP API manufacturing campus in Bidar, India. The addition of this new facility expands the company’s expertise across HPAPI development and manufacturing, providing our customers with a streamlined pathway for NCE development • We set up a GMP kilo lab at our facility in Alderley Park, Manchester, UK. The new GMP kilo lab will enable Sai to offer drug substance and intermediate supplies ranging from gram to kilogram quantities to meet customer clinical requirements at an accelerated pace • We continued to digitalize our systems & processes. This helped us improve collaborative innovation, increasing productivity and regulatory compliance, reducing safety risks, and accelerating time to market Beyond Science We believe in harmonious coexistence with the local communities and supporting their development as we chart our growth. We work with communities around our sites to identify opportunities for engagement in three priority areas – Education, Health and Livelihood Development. In the reporting year, we added environmental sustainability as a new focus area, and conducted multiple plantation drives to boost the green cover. Besides, we entered into an agreement with NIIT Foundation, a not-for-profit education society, to implement youth career development programs for underserved communities in Hyderabad. Sincerely, Krishna Kanumuri CEO & Managing Director 6
7 About us* * This section contains information and figures until December 2023.
8 A trusted partner in bringing new medicines to life. Fast. Sai Life Sciences is one of India’s fastest-growing contract research, development & Manufacturing organizations. As a pure-play, full-service CRO-CDMO, we work with global innovator pharma and biotech companies to accelerate the discovery, development, and commercialisation of small molecules. Over the past twenty-four years, we have served a diverse set of NCE development programmes, consistently delivering value based on our quality and responsiveness. We have a 100% successful track record of regulatory inspections across our R&D and manufacturing facilities. Today, we work with over 300 innovator pharma and biotech companies across the world, spanning start-ups, small & mid-sized pharma, and large pharma companies. We have over 3000 employees across our facilities in India, UK and USA.
9 Our global footprint Hyderabad London R&D and manufacturing sites Commercial presence Bidar Manchester Boston York Newcastle Nottingham Berlin Shanghai Sourcing San Diego Ohio Tokyo New York Cambridge
10 CSR contributions 0.2 $ MN Revenue $151.5MN Fixed assets $147.8MN Profit after tax (PAT) $1.2MN In 2023, we entered our Silver Jubilee year, surpassing the vision of supporting global innovator partners in bringing 25 new medicines to market by 2025. The company crossed this milestone two years ahead of schedule and is poised to sustain this momentum on the back of a strong portfolio of molecules at various stages of clinical development. At a glance
11 We are a full-fledged CRO-CDMO partner to global innovator pharma and biotech companies accelerating the journey from concept to clinic through speed and high-quality data through an integrated and collaborative approach. Drug discovery continuum
12 Discovery services spanning the entire journey from Target ID and validation to IND Sai Life Sciences delivers integrated discovery services seamlessly spanning synthetic and medicinal chemistry, biology, DMPK and toxicology to a global client base across diverse therapeutic areas. The organization has completed over 200 discovery programs across oncology, CNS, inflammation, antivirals, rare diseases, and more. Today we serve many innovator companies spanning biotechs, small to mid and big pharma across US, UK, EU and Japan. The discovery vertical of Sai Life Sciences has over 1000 employees across its sites in Boston and Hyderabad, and has a comprehensive range of offerings. Preclinical toxicology Drug substance/Product Med Chem Design Synthesis ADME PK Pre Formulation Biology Two global sites delivering integrated value Transfer to India reduces costs and cycle-time Our discovery biology team co-located in a single integrated campus with our teams in medicinal chemistry, process development, process engineering and scale-up enables us to accelerate our clients’ discovery programs through rapid turnaround times and shorter decision-making cycles. Exploratory focus allows clients to externalize complex biology projects that necessitate more fluid experimental design with realtime decision making. Boston Fully integrated R&D campus housing Discovery, Development, Process Engineering, pilot plant and early phase delivery. Hyderabad
13 Chemistry, Manufacturing, and Controls (CMC) The CMC business of Sai Life Sciences offers customers comprehensive capabilities from process development through to scale-up and early phase supplies. Over the last two decades, the company has consistently delivered a diverse set of NCE development programs for its customers with a track record of bringing value based on quality, pricing and responsiveness. Today, Sai Life Sciences works with 17 of the top 20 global pharmaceutical companies, in addition to several biotechs, small & mid pharma companies across USA, EU, UK, and Japan. It has 31 commercial products and 11 Phase III products in its portfolio. The CMC vertical of Sai Life Sciences has over 1700 employees across its sites in Manchester, Hyderabad and Bidar. • Process R&D Lab, Manchester: Set-up at Alderley Park in June 2020, the lab assists customers in developing routes and processes for their small molecule drug substances. The site has a team of 70+ scientists and complementing facilities including a fully equipped analytical laboratory, GMP Scale-up facilities, 21CFR Part 11 Compliant software and robust model for early phase tech transfer to India sites. • Research & Technology Centre, Hyderabad: The 450-member scientific team in Hyderabad has comprehensive capabilities spanning Process R&D, Analytical R&D, Process Safety, Quality Control, Process Engineering & Scale-up and Pilot facilities. It has advanced capabilities and technologies including Bio Catalysis, Flow Chemistry, Chemo Catalysis, Continuous Extraction, Continuous Distillation, Lyophilization, Amidites and HPAPI capabilities. • Manufacturing site, Bidar: The 450 KL capacity manufacturing site supplies APIs and advanced Intermediates for highly regulated markets including USA, EU and Japan. The site has undergone multiple successful audits by the USFDA, PMDA (Japan) in addition to over 600 audits by large pharma companies. The site operates at a containment level of 1 μg/m3, has 11 clean rooms of ISO – 8, dedicated blocks for amidites and HPAPIs (0.1 μg/m3) capability, in addition to capabilities including lyophilization at pilot & commercial scale, high pressure reactions, chromatography at commercial scale and cryo reactions at 2.5 KL, 4 KL & 5 KL scale. Delivering complex chemical synthesis from development to commercial scale
14 SaiNxt: Our transformation engine As part of our organization-wide initiative, Sai Nxt, has invested upwards of US $ 150 million between 2018 - 2023 to transform the company into a new generation CDMO. We have been guided by the insights and feedback from our customers and have made investments in three key areas. Processes & Automation Process simplification, strengthening governance systems, electronic manufacturing records, IT systems integration, the foundation for seamless data capture across operations, leveraging latest technologies (RPA, IoT, AI / ML, AR/ VR) for innovation and intelligence. People & Culture Expanding scientific talent pool, inducting top-notch global scientific and leadership talent, role-based integrated online training, shop floor transformation, nurturing culture of excellence. Infrastructure & Capabilities Biology lab in Cambridge (MA, USA), Process R&D lab in Manchester (UK), Integrated Discovery and Development campus, expanded suite of technology platforms, early phase delivery facility, flexible manufacturing with 2.5x capacity, advanced safety & quality systems. Through SaiNxt, the company has significantly expanded and upgraded its R&D and manufacturing facilities, deepened scientific and technological capabilities, strengthened automation and data systems, and above all raised the bar for sustainability, safety, quality and customer focus.
15 New additions Discovery expansion in R&D campus in Hyderabad High Potency manufacturing block in Bidar GMP Kilo lab in Manchester Phosphoramidite block in Bidar World-class R&D and manufacturing facilities Bidar Manufacturing facility Hyderabad R&T centre R&D facility Biology & DMPK facility Boston Manchester Biology lab Process R&D lab
16 Brandon Hall Group Technology Excellence Award EcoVadis Indian Society for Training & Development Excellence in Digitalizing Learning & Development, 2023 CII Excellent Energy Efficient Unit Our growth Awards and recognition 100+ clinical stage programs served; 28 active commercial programs & 9 in Phase III USA, EU, Japan > 95% of products manufactured serve these highly regulated markets USFDA, PMDA 100% successful track record of regulatory inspections across our R&D and manufacturing facilities 40+ programs advanced from IND to phase I, II or III Member of > 300 active customers of innovator companies Strong pool of scientific talent R&D 1387 2986 employees Quality 309 Manufacturing 854
17 ISO certifications ISO 14001 & ISO 45001 R&D unit at Shameerpet, Hyderabad & Corporate office ISO 14001 & ISO 45001 Manufacturing unit at Bidar, Karnataka ISO 50001 Manufacturing unit at Bidar, Karnataka Information Security Management System ISO 27001 Corporate office, R & D unit at Shameerpet, Hyderabad, manufacturing units at Bollaram, Hyderabad & Bidar, Karnataka, Manchester, UK
18 Sustainability framework
19 Driven by our philosophy of Make it Better Together, we are striving to achieve environmental, social, and economic stewardship while contributing to being an inclusive and sustainable company. Our sustainability journey continues to be on a steadfast path as we develop a sustainability framework with set commitments and targets that help us measure progress and ensure accountability. Sai’s sustainability framework provides us with a direction for the implementation of sustainability objectives and embedding sustainability into the organization. The framework is steered by national and international ESG protocols, reporting standards, and principles. We have organizational Sustainable Development Goals (SDG) that defines our commitments to Environment, Social, and Governance (ESG) principles while creating and enduring value to all our stakeholders. We exceeded our goal of supporting global innovator partners in bringing 25 novel medicines to market by 2025. We take immense pride in reporting that we have achieved this ahead of 2025 and are well-positioned to sustain this momentum as we develop a strong portfolio of molecules at various stages of clinical development. Belief in science for a healthier future Perseverance to make it better together Integrity Transparency Ownership Reliability Respect Collaboration Guiding Principles ESG Policies Committees Environment • Health, Safety & Environmental policy • Energy Policy Social • Human Rights Policy • Labour Policy • Privacy Policy • Grievance Redressal Policy • Corporate Social Responsibility Policy • Code of Supplier Conduct and Ethics Policy • Sexual Harassment Policy Governance • Code of Business Conduct & Ethics policy • Vigil Mechanism Policy • Information Security Policy • Supplier Code of Conduct & Ethics • Audit committee • Securityholders relationship/ investors • Grievance committee • Independent directors committee • Nomination & remuneration committee • Corporate Social Responsibility (CSR) Committee • Vigil mechanism Committee
20 A new chapter of change We are steadfast in the journey of sustainability and geared up to scale newer heights and will continue to deliver business impact in this crucial decade of action. By building on our accomplishments and aligning with aspirations we have formulated our SDGs that embody our commitment to protecting the environment, extending social responsibility and ensuring economic resilience. We announced our renewed Sustainable Development Goals (SDG) on World Environment day 2023, charting out the roadmap to achieve specific environmental, social and governance (ESG) targets by the financial year ending March 31, 2027. We have identified the following SDGs to be met over 5 years, with FY22 as the baseline year, inspired by its success and lessons learned. Our ESG focus areas are derived from the United Nations’s SDGs. The SDGs were identified based on the material areas critical to our stakeholders and paramount to our business. ENVIRONMENTAL Reduce specific water consumption by 25% Reduce specific greenhouse gas emissions by 30% Replace 70% of our energy requirement with renewable sources Reduce specific hazardous waste generation by 10% SOCIAL GOVERNANCE Engage with 100% of critical suppliers in committing to the code of supplier conduct and ethics Create more opportunities for women and increase the percentage of women employees in the total workforce to 18%. Advance socio-economic empowerment of women and provide education for 8,000 people from socially and less privileged communities through our CSR programs.
21 Sustainability awards and recognition As a signatory, we are committed to adopt the Ten principles of the United Nations Global Compact (UNGC) on human rights, labour, environment and anticorruption. We are the first India-headquartered company to join the Pharmaceutical Supply Chain Initiative (PSCI). It is a strong reaffirmation of our commitment to implement and champion responsible supply chain practices. We have joined the Science Based Targets initiative (SBTi) and are committed to set near-term company-wide emission reductions in line with latest climate science to help combat climate change. We retained the Silver rating with the overall score of 63 this year at the EcoVadis assessment, in the industry category “manufacture of basic pharmaceutical products and pharmaceutical preparation”. Awarded with ‘Excellent Energy Efficient Unit’ in the general category at CII’s 24th National Energy Management Awards. This is the fourth consecutive year that our Bidar manufacturing facility has been awarded by CII for its energy management.
22 Materiality We understand that the materiality assessment process is the basis to define our sustainability framework and is important for us to measure and monitor our progress. We periodically invest in the identification and prioritization of issues that are material to our business and our stakeholders. Materiality Assessment Approach Our Materiality assessment approach is more than a box to tick at Sai Life Sciences. We rely on the process of identifying and listing the material topics that have a potential impact on the business, examining both the direct and indirect effects of each material topic that have on the long term sustainability of our operations. The sustainability cell at the corporate are involved in the process of identification of the material topics while evaluating the operational and the strategic implications it has on the business. We involve our stakeholder’s in the process of assessing the material topics relevant to them. The material issues prioritized are laid across the four themes: • Sustaining as a partner of choice • Being an employer of choice • Growing as an HSE champion of choice • Becoming a neighbour of choice Materiality Assessment 1 2 Stakeholder engagement Materiality grid Issue prioritization Issue identification Stakeholders interviews/ survey Validation 6 3 5 4
23 Materiality Matrix Low priority SIGNIFICANCE TO STAKEHOLDER High priority SIGNIFICANCE TO BUSINESS Becoming an employer of choice Low priority High priority Climate action Operational excellence, sustainable manufacturing,quality, safety, delivery & cost efficiency Employee engagement Employee development & skill building Process safety capabilities Energy management Compliance – regulatory, quality & ESG requirements Water management Waste management Quality of science, robust process design, speed in technology transfer Sustaining as a partner of choice Growing as a HSE champion of choice Growing as a neighbour of choice Infrastructure development for education & healthcare Supplier engagement on EHS Volunteering Health Education Diversity, Equity & Inclusion Benefits & performance management framework OHS
24 Stakeholder engagement At Sai Life Sciences, stakeholder engagement is a dynamic process where we actively involve multiple stakeholders to chart out our sustainability journey. Customers Industry associations Investors/Board Employees Suppliers & Business Partners Local communities Government bodies & agencies Audit Project review meeting Customer feedback survey Business development meeting Sustainability related survey Conferences Events Award applications Board meeting Management review meeting Investor meetings Annual Diagnostic Survey ESG forum Employee satisfaction surveys Departmental meetings One on one meetings PMS reviews SFTI walk-throughs HSE review meetings HSE promotional activities Employee well-being activities SCM discussions, meets ESG questionnaires Manufacturing meet ups Engagement meeting Volunteering Audits Annual review Through fostering relationships, with both internal and external stakeholders, we aim to create a sustainable future that aligns with the values and expectations of our diverse stakeholder community.
25 Governance & business ethics
26 Corporate governance serves as the foundation of our commitment to long-term value creation, risk management and building trust with stakeholders. At Sai Life Sciences we perceive governance as a framework that goes beyond mere compliance; it shapes how we engage with shareholders, employees, customers and the wider community. Our governance practices are designed to promote integrity, transparency and accountability in all decision-making processes and actions. We have constituted six dedicated board committees with clearly defined terms of reference and scope for systemic management of our governance framework. Dr. K. Ranga Raju Chairman Executive Directors Krishna Kanumuri CEO & Managing Director *Joined in June 2023 Board of Directors Raju A Penmasta Director Mitesh Daga Investor Director Rajagopal S Tatta Independent Director Manjusha A Joshi* Independent Director Non Executive Directors Puneet Bhatia Investor Director Audit committee Oversee the company’s financial statements and auditors' reports Independent directors committee Responsible for monitoring the performance of the independent directors and assists the company in implementing best corporate governance practices Stakeholders’ relationship/investors grievance redressal committee Address and resolve the grievances of security holders of the company Nomination & remuneration committee Formulate criteria for qualification, appointment, remuneration and independence of the Board of directors Corporate social responsibility (CSR) committee Formulate and recommend Corporate Social Responsibility policy and programs and allocate CSR budget Vigil mechanism committee Report genuine concerns of directors and employees
27 Our directorial and key managerial personnel referred to as the Board of Directors is the highest governing body that navigates and monitors business decisions, oversees implementation and building long-term shareholder value. Board diversity By age group By gender The Board of Directors comprises both executive and non-executive members. We have seven Board of Directors in all, of which two of them are Executive members, the Chairman and the Managing Director. Among the five non-executive members, we have three Directors and two independent Directors and one of the Directors is a woman. We recognize the value of diverse perspectives and the Board ensures diversity and inclusion, within leadership roles. We believe that different voices are just not meant to be heard but need to be valued. 30-50 years 14% > 50 years 86% < 30 years 0% 14% 86%
28 Sustainability governance structure Over the years, we have built a culture where the tenets of sustainability have become intrinsic to our being. This has been made possible by the guidance of our leadership and the continuous efforts of our people. We have a three-tier-structure comprising Sustainability Governance Council, Sustainability Cell - Corporate and Sustainability Cell - Site that develops and oversees the enforcement of the sustainability mandate at Sai Life Sciences. Our Sustainability Governance Council is responsible for integrating sustainability matters into business strategy and decision-making on critical matters. The council formulates policy and strategy for incorporating sustainability practices across all business functions. It oversees sustainability performance of the organization, progress against the targets and suggests improvements. The council comprises Board of Directors, CEO, COO and CFO. The existing committees of organization governance i.e. CSR, Audit & Risk committee have been inducted in the governing council. Sustainability Cell – Corporate is responsible for tracking and reporting sustainability performance and initiatives against targets. The corporate cell is headed by COO and comprises all functional heads. It meets on half-yearly basis and Senior Vice President - HSE & OE are the coordinator for the meeting. The cell’s primary function is to assist the Governance Council in developing recommendations in connection with its strategy, standards, processes, and approach to environmental, social and governance matters that could affect the business activities, assets, performance and reputation of the company and for the company’s ongoing sustainable development. Sustainability Cell – Site is responsible for collation & reporting of sustainability data, tracking of performance and driving sustainability initiatives at respective sites. The site-specific cell is headed by respective plant head/in charge. Sustainability Governance Council Sustainability Cell - Corporate Sustainability Cell - Site Board of Directors, CEO, COO and CFO Headed by COO, coordinated by Senior Vice President - HSE & OE Headed by Plant Head / Incharge Ethics and integrity Code of Business conduct and Ethics Our Code of Conduct and Ethics Policy outlines a set of rules and principles that are binding for all Directors, employees to conduct business with highest standards of professional ethics and integrity. We ensure compliance with all applicable laws, rules and regulations and strive to promote honesty in conducting business. The code forbids bribery and corruption, disclosure of confidential information, embezzlement, the misappropriation of corporate assets, as well as violations of data privacy. Anti-corruption and Bribery We maintain a zero-tolerance stance towards all forms of corruption and bribery. Our code of conduct mandates strict adherence to all applicable laws and regulations related to anti-corruption and bribery. We stand firm against possible corruption by always being truthful, accurate, cooperative, and courteous when dealing with government or regulatory agency officials during business. Violations of our anti-corruption laws will lead to disciplinary actions, ranging from warnings to termination, depending on the severity of the offense. Anti-Money Laundering We are committed to comply with all laws that prohibit money laundering or financing for illegal or illegitimate purposes. “Money laundering” is the process by which persons or groups try to conceal the proceeds of illegal activities or try to make the sources of their illegal funds look legitimate. We always ensure that our business is conducted with reputable vendors and customers, for legitimate business purposes, with legitimate funds. Grievance Redressal Our Grievance redressal policy provides an avenue for employees to voice concerns and report grievances related to workplace issues, interpersonal conflicts, alleged discrimination on race, color, age, sex, gender, religion, nation origin, marital status or disability or any other matter affecting well-being or work performance. A complaint/suggestion box is provided at each location to anonymously receive complaints for employees. Grievance redressal committee is in place to ensure fair and unbiased resolutions are provided within defined timelines. Vigil Mechanism Policy We are committed to develop a culture where it is safe for all employees to raise concerns about any poor or unacceptable practice and any event of misconduct or violation of law in force. Vigil Mechanism provides a channel to the employees to report concerns about violation of the Code of Conduct. Such incidents are routed through the ethics committee for investigation and providing timely resolutions.
29 Code of Business conduct and Ethics training We invest in comprehensive training programs to educate our employees and stakeholders about the nuances of anti-corruption, bribery, and ensure adherence to our Code of Conduct. All employees are assigned courses on Code of Business conduct and Ethics, anti-corruption, bribery, anti-money laundering in our digital learning management system (LMS) and 100% training of these courses are ensured for both new and regular employees including governance body members in the reporting year. Reporting breaches We consistently report on the total number of incidents or violations in various areas, including but not limited to corruption, bribery, harassment, confidentiality breaches, conflicts of interest, money laundering. Information Security We recognize the paramount importance of information security in an era where digital assets play a central role in our operations. Our commitment to protecting sensitive information is epitomized by our Information Security Management System (ISMS) and our achievement of ISO 27001:2013 certification for all our operational sites. It provides a clear direction and support to ensure protection of our information assets, and to allow access, use, and disclosure of information in accordance with appropriate standards and laws. Our ISMS is built upon a foundation of rigorous risk assessment and management. We systematically identify potential risks to information security, cyber security and physical security, evaluate their impact, and implement robust control to mitigate these risks effectively. The framework of our ISMS is anchored in a comprehensive set of policies and procedures which ensures that any security incidents, whether internal or external, are promptly detected, reported, and addressed with precision to minimize potential impact. Our ISMS includes stringent access controls to ensure that information is accessible only to authorized personnel. The goal is to ensure, beyond the IT department, an appropriate level of protection for the confidentiality, availability, and integrity of information within the entire organization or the defined scope. It encompasses areas of security strategy & risk management, technical security, cyber defense & orchestration. Potential threats relating to information security are identified, analyzed, and mitigated, making them controllable. Incidents reported Number of confirmed corruption incidents Nil Number of reports related to whistleblower procedure Nil Number of incidents of discrimination and harassment Nil Number of information security breaches Nil
30 Sustaining as a partner of choice
31 Discovery Chemistry, Manufacturing & Controls (CMC) Development Manufacturing Offer a wide range of skill-sets and technologies that go into the drug discovery process and service the customers in different geographies giving access to flexibility and speed. Development: Adept at partnering by handling complex chemistry and tried and tested approach to scaling up and technology transfer. Steadfast in collaborating with customers for climate action, operationalising and continuously evolving our sustainability goals thereby enabling our customers progress with their supply chain related sustainability commitments, successfully manufacturing quality products delivered on-time. We are steadfast in our commitment to ‘being a partner of choice’ for our customers by addressing their needs in the discovery, development and manufacture of the medicines of future in a sustainable manner. At a time when the drug discovery, development and manufacturing cycles are on the fast track in order to meet patient needs, our customers explore ways of de-risking their R&D efforts and increasing the speed to market of their new molecules. To effectively partner, we are taking vital actions to boost efficiency, advance green chemistry practices, building automation tools, adding new capabilities and establishing norms that lead to sustainability being firmly established in our strategy and operations. Forging a path through discovery and into development with the same integrated partner like Sai where a good relationship, expertise and capabilities exist smoothens the path of outsourcing in the life sciences industry. Our sustainability commitment delivered through our business verticals and in the value chain For innovator companies, speed, quality, and cost continue to be critical levers and there is a need to balance these with market expectations and regulatory challenges. This makes them seek advanced supply chain opportunities to optimize the development of their molecules by establishing partnership with CDMO companies. At Sai we combine access to scientific talent, advanced technologies, manufacturing and process excellence which enables the innovator companies improve their capital efficiency while progressing with innovation goals. Discovery Our global delivery model delivers unique value to our customers through an optimal blend of talent, technologies, automation and relentless focus on speed, and cost efficiency. This journey typically starts with our exploratory biology facility in Boston, where we work hand-in-hand with our customers in real-time on early discovery biology programs that are difficult to outsource to India. These programs then transition to the company’s Hyderabad R&D campus, where we have consolidated chemistry, biology and ADME-PK services in one integrated campus, enabling our scientists to work as teams and deliver quality data to the customers. Electrophysiology: Understanding effects of drug better In FY23, we added new capabilities in niche areas such as electrophysiology. In drug discovery process, electrophysiology has the potential to revolutionize both lead-exploration and lead-optimization steps by providing a more accurate and efficient way to assess drug effects on ion channels and receptors. By combining electrophysiology with other advanced technologies, such as high-throughput screening, organoids/organ-on-a-chip, machine learning-based event detection, and iPSCs, researchers can greatly accelerate the drug discovery process and improve the chances of developing effective therapies for a wide range of diseases.
32 Automation in DMPK services • We invested in the infrastructure and automated (liquid handlers) technology for the development of high through ADME screens to support clients • To boost automation, we installed IDOT liquid handler, Biomek i7, dual integrated hybrid liquid handler, API7500 and Thermo Orbitrap Exploris240 to accelerate speed of ADME screens and support large volumes of ADME screens • We further augmented our specialization of developing customized ADME screens to solve the complex problems of the customers associated with the discovery and development programs High-Potency API Manufacturing facility at Bidar Chemistry, Manufacturing and Controls (CMC) Our CMC vertical offers customers comprehensive capabilities from process development through to scale-up and early phase supplies. Over the last two decades, the company has consistently delivered on a diverse set of NCE development programs for its customers with a track record of bringing value based on quality, pricing and responsiveness. Manufacturing As part of being a sustainable partner, we added a new High Potency API (HPAPI) manufacturing facility at our cGMP API Manufacturing campus in Bidar, India. The addition of this new facility expanded our expertise across HPAPI development and manufacturing, providing our customers with a streamlined pathway for NCE development. In 2022, we opened the HPAPI development facility at the R&D campus in Hyderabad. Now, with the addition of the new HPAPI production facility in Bidar, the company is capable of handling of all aspects of the project life cycle spanning process development, analytical development, particle engineering, warehousing, pilot, scale up, sampling, QC, powder processing, effluent treatment, packing, transportation and stability services. The new 16000 sq. ft. HPAPI block, located in the Bidar Manufacturing unit has the following features: • Designed and validated to handle high potent molecules less than 1 μg/m3 containment • Inbuilt warehouse to store KSMs, intermediates and finished goods • Dedicated sampling / dispensing area with isolators with three independent streams to handle commercial scale batches • Reactors to handle multiple unit operations equipped with isolators and split butterfly valves (SBVs) • Powder processing and packing area with isolators; dedicated isolator train for Quality Control testing • Deactivation facility Viaflow 384 Genevac EZ – Solvent Evaporator Biomek i7 Hybrid Dual Integrated – Liquid Handling System I-DOT – Liquid Handling System
33 Striving for excellence in manufacturing to contribute to sustainability impact We are engaged with our customers and part of Manufacture 2030 and are committed to strong climate action in our journey of bringing medicines to life, cleaner and greener. The Task Force is taking scalable action to collectively address emissions across supply chains, patient care pathways, and clinical trials. It has set joint, minimum climate and sustainability targets for suppliers to address emissions across the value chain and reduce the complexity of multiple asks and platforms. These joint, minimum supplier targets are as follows: • Assess and disclose Scope 1, 2, and 3 emissions by 2025 • By 2025, commit to set near-term targets aligned with the 1.5 degree pathway (SBTi) • By 2025, set targets to reduce waste (including solvents) and energy and reuse materials in manufacturing • Commit to switch to at least 80% renewable power by 2030 and make commitment public • By 2030, explore options to source green heat • Transport suppliers to make SBTi-aligned commitments by 2025 and include green transportation solutions in their core offering by 2030 • Commit to set standards for own suppliers • Set targets to increase water efficiency and commit to adopt water stewardship standards healthcare supply chains become greener, more efficient and circular. This is a major step taken to decarbonise healthcare supply chains and accelerate the transition to net zero, patient-centric health systems. Global pharmaceutical companies - AstraZeneca, GSK, Merck, Novo Nordisk, Roche, Samsung Biologics and Sanofi have united with the World Health Organization (WHO) to form a health systems Task Force called as “Sustainable Markets Initiative”. We are a valued partner and committed to make SFTI - A game changing sustainability commitment Building a culture of customer centricity The Shop Floor Transformation Initiative (SFTI) is a defined set of objectives and measures aimed at greater sustainability by improving material efficiencies and making processes simpler, safer and nimbler in manufacturing. It is a transformational approach to bring customer centricity at the frontline in daily management practices. Beyond measurable metrics, SFTI imparts intangible, intrinsic values such as a spirit of ownership and collaboration, which are our core values. Key Metrics Measurement • Monitoring the key metrics under Productivity, Quality, Cost, Delivery, Safety and Morale (P-Q-C-D-S-M) • Gap analysis through structured problem-solving tools Grass Root Team (GRT) • Identification of abnormalities in the shopfloor by executives work for solutions • Standard visual management and closure of actions Lean Audit • Auditing entire shopfloor biweekly with defined 5S checklists • Identifying the Opportunity of Improvements (OFI) • Cross Functional discussion and support to close the OFIs Daily Work Management • Daily meeting on shopfloor • CFT participation and discussed on the issues and solution • Engage shopfloor level employees in root cause analysis & improvements 5S and Standardization • Trained shopfloor team on housekeeping and 5S practices • Implementing multiple small improvements like Single Point Lesson (SPL), 5 Why analysis, Poka-yoke SFTI R&R • Rewarding best SFTI team for the month • Highlighting SFTI champion and rewarding them • Engaging and motivating employees to achieve best performance
34 Revamping of B2B & PCO cleaning methodology Introduced a modified clean-up methodology based on a comprehensive risk assessment and avoided batch to batch cleaning whenever the equipment is known to be taken for PCO Impact • Obtained savings on solvent cost from cleaning method revamp of primary solvent cycle & elimination of B2B cleaning before PCO • Tracked & estimated solvent consumptions of reactor PCO’s - annualized savings are over Rs. 1.1 Crore Re-use of oil in Patkar pumps following heating and filtration Oil consumption in Patkar pumps (used for PFO high vacuum distillation process) was reduced by reusing used oil through heating and filtration Impact • Reduction of fresh oil consumption in Patkar pumps • Oil recovery of 95% was achieved Employee Involvement in meeting sustainability goals Kaizen Blitz is our ‘continuous improvement program’ implemented throughout our Indian sites where the ideas are generated as well as implemented by employees. Kaizens are referred as the building block of lean production methods and cover a broad spectrum encompassing areas such as waste elimination, efficiency improvement, operating cost optimization and process improvements. The second edition of Kaizen Blitz received over 450+ Kaizen ideas. As a result of implementing the selected ideas, the annualized savings from the program stood at nearly Rs. 4 crore. 22% 40% 23% 26% 45% 66% 0% 10% 20% 30% 40% 50% 60% 70% FY 22 FY 23 Processing time Cleaning + Waiting time Establishing process excellence: Process time reduction & yield improvement As part of SFTI, Batch Cycle Time (BCT), and Batch Charge Frequency (BCF) are monitored continuously and steps are taken for improvement in case challenges observed in the production process. We took a series of initiatives for productivity enhancement through process modifications and improved yield and cost efficiency. Such productivity enhancement initiatives on BCT and BCF have resulted in higher capacity utilization of our equipment. In one of the products manufactured, we achieved a reduction of 35% BCT and 33% BCF. It resulted a yield improvement and cost efficiency. Such productivity enhancement initiatives on BCT and BCF have resulted in higher capacity utilization of our equipment.
35 Quality Systems that grow customer trust We have built a robust Quality system across the value chain from drug development to drug delivery. The emphasis on product responsibility is reflected in continuous updates to our quality systems in accordance with the current regulatory requirements. Across Sai, a single quality system is followed, and it is designed to meet global quality standards (US/EU/Japan). Customer audit All our actions are shaped by an unwavering focus towards meeting and exceeding customer expectations regarding product and service quality. Key highlights of feedback received from various customers on quality performance based on their audits are: • Transparency and openness for discussion • Continual improvement of quality systems • Continually benchmarking our digitalization far above the industry • Robust implementation of GMP Pro system with a thorough integration of quality, material, production & engineering systems • Best documentation practices This provides an overview of the customer audits conducted throughout the reporting year Unit-II: 12 (No critical observations) Unit-III: 04 (No critical observations) Unit-IV: 21 (No critical observations) Digitalization We are transforming the way we collect, analyse, and interpret data by way of digitalization. This we believe will boost operational excellence, bring value to our customers and ultimately help in accelerating the pace of drug discovery. These are our major digitalization initiatives that have contributed to increased efficiency, innovation and transparency in our quality management systems. Quality control systems, document management systems, engineering systems, audit management systems at our research and manufacturing facilities were digitized during the reporting period. Automating these operations and reducing manual intervention has not only improved operational efficiency, but also reduced errors, improved data integrity, and strengthened compliance. GMP Pro, Laboratory Information Management System (LIMS), Automated Measuring Systems (AMS) , Learning Measuring Systems LMS, Electronic Lab Notebook (ELN), GOVAL digital validation lifecycle management systemPro, Laboratory Information GoVal GoVal is a Validation Lifecycle Management System (VLMS) that has been implemented for paperless validation and to fulfil regulatory compliance. These are its key features: • Retrospective validation and periodic review of GxP computerized systems • Standardized templates for document generation with customizable sections • Defined workflows for document approval and E-signatures applied for all the deliverables • System level & functional level risk assessment as per ICHQ9 • Paperless execution for IQ, OQ, PQ • Automated report generation for IQ, OQ, PQ, summary report and system release BIOVIA ELN was rolled-out for the MedChem and Biology teams across India and Boston. It replaced the paper-based notebooks and Sai ELN. Initially, a select set of projects and users were onboarded and gradually it was extended to the rest of the Discovery segment on a staggered basis. The BIOVIA ELN offered a seamless platform across Discovery and CMC segments. Benefits of the application: • Stronger IP protection • Seamless collaboration across all global sites • Lower compliance risk • Lower cycle time • Better productivity • Lower cost BIOVIA Electronic Lab Notebook application
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