Synergising Sustainability, Performance & Growth S u s t a i n a b i l i t y R e p o r t 2 0 2 3 - 2 4
2 We are transforming sustainability from a simple catchphrase to a significant factor in shaping our future and for a world working together. The synergy arising from sustainability is turbocharging our performance and pursuit of growth opportunities. The way we address various sustainability opportunities, such as inclusivity, diversity, climate action, resource conservation, and the holistic effort to incorporate sustainability into both internal operations and external influence, along with strong governance, all contribute positively to value creation and growth. Looking through the synergy lens, we are: • Tapping into avenues for sustained value co-creation with our customers and supply chain partners • Catalysing growth through our environmental stewardship • Activating pathways for sustainable performance by nurturing engagement and connection with our people and communities Synergy for Sustainability
3 About this report Sai Life Sciences presents its 5th Sustainability Report for 2023-24. themed “Synergizing Sustainability, Performance & Growth,” this report embodies our holistic approach to creating a sustainable future. At Sai Life Sciences, we believe that true progress transcends financial metrics. Our commitment to sustainability is not a standalone endeavour but an integral part of our business strategy, driving innovation and excellence. We understand that our responsibility extends beyond the laboratory and the boardroom, protecting the environment we cherish, empowering the people we engage, and reaching into the communities we serve. Reporting Period We report our Sustainability disclosure annually and the reporting period is 1st April 2023 – 31st March 2024. Reporting Framework This report is prepared with reference to the GRI Universal Standards 2021 and summarises Sai Life Sciences sustainability performance for FY 2023-24 Scope and Boundary • Corporate office: Gachibowli, Hyderabad, India • R&D centres: - Shameerpet, Hyderabad, India (Unit II) - Process R&D centre, Manchester, UK • Manufacturing sites: - Bollaram, Hyderabad, India (Unit III) - Bidar, Karnataka, India (Unit IV) Reporting Boundary • Financial performance reporting: India, USA & UK • Environmental performance indicators: India • Employee metrics & incident statistics: India & Manchester • Community updates: India External Assurance Our report is subjected to external assurance by Bureau Veritas India Private Limited on International Standard on Assurance Engagements (ISAE) 3000 standard.
4 Contents
5 Dear valued stakeholders, I’m pleased to report that 2023 was a transformative year for Sai. We remained focused on positioning ourselves for growth and saw rapid expansion in our CMC and Discovery businesses. Our efforts to drive performance and growth have strengthened our position in our sustainability journey. As a trusted partner, we have consistently created value with our customers across a diverse range of New Chemical Entity (NCE) development programs. Our scientific talent, laboratory infrastructure and manufacturing facilities support the discovery, development and commercialisation of molecules in diverse therapeutic areas such as oncology, immuno-oncology, CNS, autoimmune diseases, metabolic disorders, fibrosis, rare diseases, and more. During this time, we have actively maintained our commitment to environmental and social responsibility in our operations and supply chain. For us, sustainability, growth, and performance go hand in hand, enabling us to achieve our business goals more effectively and drive growth. We have taken several opportunities to leverage this synergy. Aligned with our customers’ sustainability commitments, we are actively engaged with key global frameworks and initiatives. As a participant in the United Nations Global Compact, we adhere to the ten principles of human rights, labour, environment, and anti-corruption. Additionally, we are part of the Science-Based Targets initiative, which drives us to set science-based targets to reduce our carbon footprint. Our participation in the Carbon Disclosure Project (CDP) further demonstrates our commitment to being accountable for our environmental impact. Similarly, we are a part of Manufacture 2030, a program that specifically combats climate change through collective and collaborative actions in the supply chain. When people thrive, business thrives. Today, nothing is more crucial than our employees, investors, workers, contractors, and community members. We are committed to maintaining an inclusive and equitable culture, ensuring that all our people have the necessary resources and development opportunities to contribute to business growth in a meaningful way. We have upheld our commitment to creating a positive impact in communities, focusing our participation and volunteering efforts on the causes that align with our sustainable development goals. On this journey, we navigate continuous change and new challenges, but our determination to progress is consistently strong. With collaborative teams and vibrant customer engagement platforms, we are prepared to embrace the changes and challenges that inevitably lie ahead of us in this dynamic sector. Sincerely, K Ranga Raju Chairman Message from our Chairman
6 Dear valued stakeholders, In order to build a sustainable society, we must take decisive actions driven by clear visions, goals, and engaged individuals with the necessary skills. Our commitment to making a lasting impact is guided by our sustainable development goals, which serve as our guiding star. CRO-CDMOs play a pivotal role in today’s medicine production, crucial for a sustainable society. In this context, we aspire to become the Pre-eminent Asia- Pacific CRO-CDMO with a Global Delivery Platform, standing out as a partner of choice for pharmaceutical innovators by delivering service levels at par with the best global CRO-CDMOs. We understand that our vision is ambitious, but we are committed to achieving it. To succeed, we need to become more efficient and enhance our capabilities to embrace cutting-edge technology. Our confidence in moving forward comes from our mission of “Making it better together,” which prioritizes sustainability. We are implementing a three-pronged approach in alignment with our sustainability framework: 1. Productivity – achieving significantly more with fewer resources. We address material efficiency, efficiency in development and commercialisation meeting customer requirements through operational excellence initiatives and focus on health and safety 2. Digital and Automation – delivering swift, consistent, high-quality results with minimal manual intervention. Our focus is on fulfilling compliance requirements transparently and incorporating automation to ensure ease of operations and quick turnaround time in development, technology transfer and manufacturing 3.New Frontiers – expanding into pioneering modalities and technologies. We prioritise innovation, to partner with customers for new therapeutic possibilities, turning tangible opportunities for treatment. Our commitment to environmental, social, and economic stewardship is advanced through the implementation of our sustainability framework guided by national and international ESG protocols, reporting standards, and principles. Our organizational sustainable development goals closely align with the United Nations Sustainable Development Goals. We are involved in the transition to a lower-carbon future, actively reducing greenhouse gas (GHG) emissions and investing in technologies, processes, and systems. For example, as part of our energy conservation plan, we have spearheaded various initiatives for energy savings in production, utilities, and effluent treatment. We have invested USD 225,000 in a 2.7 MW wind turbine through a Group Captive Power project. This strategic investment, coupled with a 25-year power purchase agreement for 8,300 MWh per annum, marks a pivotal moment in our pursuit of net-zero emissions. This has contributed to significant increase in the use of renewable energy at our Bidar Facility to 89% in FY 24 from 79% in FY 23. While nurturing the planet is fundamental to building a better future for everyone, the move toward people sustainability is a parallel shift. We are undertaking a comprehensive effort to add value to the people we come in contact with --- our employees, contract workers, supply chain partners and communities where we operate. Our sustainability framework integrates the degree to which the organization creates value for our people, ensuring for them greater health, safety and well-being, stronger skills, jobs that grow capabilities and exposure, opportunities for advancement, progress toward equity, increased belonging, and connection to contributing to the mission. We have taken several proactive actions towards health, safety and well-being. We had zero fatalities across our sites. We successfully commissioned one of the production blocks at Bidar with zero incidents. The critical steps taken to embed a culture of safety and to create ownership for safety are exemplified by the 10 commandments in R&D and the non- negotiables in our manufacturing facilities. We embed process safety elements in the entire life cycle of the product. The process safety scrutiny starts from the quote stage and assessments are done by competent teams across the lifecycle. A novel approach of using customised job-specific pictorial modules and assessment questionnaires in local languages for worker training is well established in our manufacturing facilities. We proactively offer the Employee Wellness and Assistance Program (EWAP) which provides confidential support for any personal or work-related challenges our employees may face. Our family-friendly policy is designed to create a workplace culture that supports employees in balancing their work commitments and family responsibilities. Achieving people sustainability requires careful balancing of short-term initiatives and longer-term practices and we are continually undertaking steps to address structural and systemic issues. Our leaders are actively engaging with our people to know about what they value and how it can be pursued together. We are actively engaging with our key suppliers to collaborate on advancing ESG goals. As part of diversity, we are focused on building gender representation across employee levels. At present, our representation of women stands at 14%. It’s imperative that we work towards increasing it in order to foster a more diverse and inclusive environment. We seek to remove barriers and create equality of opportunity. We are creating safe spaces for women employees to share and listen to each other’s experiences. It has generated a deeper level of empathy among our people to reflect on and become sponsors and advocates. Our continued investment in governance has been strengthened with digitalisation and information protection measures. Our R&D and manufacturing activities are tracked and managed using digital platforms. We engage in paperless data acquisition, science-based modelling and predictive analytics. Leveraging the i ntersection of sustainability and digital transformation we are pursuing better resource utilization, bringing transparency in our operations and opening avenues for process innovations. We are deeply committed to supporting the communities where our various sites are situated. Our strategy is to partner with NGOs with programs in our focus areas and support them in extending those to target groups in the regions around our operations. We introduce innovative approaches to learning for students in government schools, promoting employability skills and better health. In this report, you will find information on our progress and future goals in our sustainability journey. We are dedicated to maintaining transparency throughout our journey and would greatly appreciate your feedback as we work towards harnessing the synergies arising from sustainability, performance, and growth. Sincerely, Krishna Kanumuri CEO & Managing Director Message from our CEO
7 About Us
8 Sai Life Sciences is built on the firm bedrock of partnership. We are dedicated to working with our global partners to accelerate a healthier future. We are committed to being flexible, responsive and innovative in addressing the evolving needs of our customers and the environment. Creating the medicines of tomorrow rely on the collaborative effortsof today. Ifwewant tomake life better, we must solve the problems together. Together we better the lives for patients around the world. We are an innovator-focused, contract research, development, and manufacturing organization (“CRDMO”). We provide end- to-end services across the drug discovery, development, and manufacturing value chain, for small molecule new chemical entities (“NCE”), to global pharmaceutical innovator companies and biotechnology firms. We possess both: • Discovery / contract research (“CRO”) and • Chemistry, Manufacturing, and Control (“CMC”) / contract development and manufacturing organization (“CDMO”) capabilities. Make It Better Together Belief in science for a healthier future Perseverance to make it better together Integrity Transparency Ownership Reliability Respect Collaboration Our Values
9 Where Sai is in its 25th Year FY 2024 Financials & Employee strength 300+ Discovery programs completed >65% Integrated Drug Discovery (IDD) >300 Active customers across Biotech, small & mid and big pharma across US, UK, EU, Japan 18 months Demonstrated time from Hit to IND 16 Tech Transfers from UK to India 10+ Years: Enduring customer relationships 20+ Assays transferred from Boston to Hyderabad 31 Commercial molecules in current portfolio of projects 11 Filed / Phase III molecules in current portfolio of projects Diverse therapy areas Oncology, CNS, Inflammation, Antivirals, Rare diseases and more 40+ Programs advanced to IND or Phase I/II/III 17/20 of the largest pharmaceutical companies are customers 5 Molecules from discovery to market $176.95 mn Revenue $141.45 mn Fixed Assets $10 mn Profit After Tax (PAT) $0.11 mn CSR Contributions Employees 2807 Manufacturing R&D Quality Others 804 287 1298 418
10 Sustainability journey and milestones 2019 CII-SR EHS Excellence Award: Twin wins - 5 star rating in CII EHS signifying excellence in EHS practices and runner up in Manufacturing Pharma category. 2020 • First India-headquartered CDMO company to join Pharmaceutical Supply Chain Initiative (PSCI) for strenghtening responsible business practices • Became an Associate member of ACS - Green Chemistry Institute for integration of green chemistry and engineering in the pharmaceutical industry • Accredited with ISO 14001:2015 and ISO 45001:2018 certification for Manufacturing unit at Bidar, R&D unit & Corporate office at Hyderabad • Published our first sustainability report for the FY 2019-20 • Rated Bronze rating in EcoVadis sustainability assessment 2021 • Became a Signatory of United Nations Global Compact (UNGC) and committed to adopt the Ten principles of the United Nations Global Compact (UNGC) on human rights, labour, environment and anticorruption. • Obtained Silver rating in EcoVadis CSR Assessment, in the industry category “manufacture of basic pharmaceutical products and pharmaceutical preparation”. 2022 • Awarded with ‘Excellent Energy Efficient Unit’ in the general category at CII’s National Energy Management Awards for four times in a row starting from 2020 to 2023. • LEED GOLD Certification by the U.S. Green Building Council based on the LEED v4.1 Rating System. 2023 Joined the Science Based Targets initiative (SBTi) and are committed to set near-term company-wide emission reductions help combat climate change. • R&T centre at Hyderabad certified with LEED Green building “Gold rating” from U.S.Green Building Council. • Rewarded with Environmental Supplier award 2021 by GSK in the ‘Primary Manufacturing’ category for effectively embedding green chemistry principles in its approach to process development.
11 Overview • Our CRO services include integrated discovery (“Discovery”) capabilities across biology, chemistry, and drug metabolism and pharmacokinetics (“DMPK”). We have provided services for more than 140 small molecule discovery programs in the past five years and to more than 100 customers in the past three years. We provide Discovery services through our Unit II Hyderabad facility and Greater Boston facility. • Our CDMO services include comprehensive capabilities that support our customers in the development and scaling up production of active pharmaceutical ingredients and intermediates for clinical phase and commercial phase supplies. We provide these CMC services through our Bidar facility, Hyderabad facility and Manchester Facility. Our CMC services are broadly classified as early-phase (pre-clinical to Phase II) and late phase (commercial, Phase III and post-Phase-III products). Excellence in Digitalizing Learning & Development, 2023 by ISTD AAALAC International full Accederation for the animal house Ecovadis Silver Awarded as “Excellent Energy Efficient Unit” at CII’s 24th National Energy Management Awards for the fourth consecutive year Winner of Gold in Brandon Hall Group’s Excellence in Technology Awards in “Best Advance in Content Authoring Technology” category Awards & Certifications We are also one of the few Indian CRDMOs to combine discovery and development operations in the US, the UK and India, with manufacturing capabilities in India. We have strategic presence, located in close proximity to innovation clusters in Boston, US and Manchester, UK.
12 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 ISO Certifications
13 Our facilities Our facilities have received several regulatory approvals and are subject to stringent quality standards and specifications, specified by our customers. Our facilities feature flexible set-ups, including large scale reactors for high-volume products, with some of our production areas specifically designed to accommodate modern drug development pipelines that produce relatively smaller quantities but involve more intricate chemical processes. We have four main facilities, each serving a unique purpose in drug discovery, development and manufacturing and adhering to applicable standards of safety, quality and regulatory compliance, in: • Bidar, India: This serves as our primary manufacturing facility. The manufacturing blocks in our Bidar Facility are designed as multi-purpose production trains, which allows for quick changes across multiple production processes. • Hyderabad, India: This facility houses a fully integrated R&D campus for Discovery R&D, CMC process development and clinical phase manufacturing. The R&D centre within this facility houses the pilot manufacturing facility and an analytical testing and release laboratory, which have been inspected by the USFDA. • Bollaram, India : We have an intermediate manufacturing facility in Bollaram near Hyderabad, India. • Manchester, United Kingdom: We have established and expanded a laboratory set-up in our Manchester facility, titled as ‘Centre of Excellence’, in process chemistry equipped with modern laboratories. It provides development, scale-up and technology transfer to our India-based sites. • Watertown (Greater Boston, MA), United States: Our Greater Boston Facility hosts an exploratory biology laboratory and houses advanced cellular and biochemical analysis platforms.
14 Our Services We provide Discovery and CMC services that span from drug discovery to process development and early-phase supplies, all the way to commercial launch and life cycle management: Discovery: Our Discovery capabilities include standalone and integrated discovery services for innovator pharmaceutical and biotech companies. We have completed discovery programs across therapeutic areas such as oncology, CNS disorders, inflammation, antivirals, rare diseases, among others. The services we offer include: CMC: Our CMC capabilities include the development of scalable chemical manufacturing processes for identified drug candidates and delivering materials for clinical studies as well as commercial sale. Materials supplied include APIs, intermediates, registered starting materials or key starting materials. Discovery Services spanning the entire journey from Target Validation to IND Integrated services: Medicinal Chemistry & Synthetic Chemistry, CADD, Biology, DMPK & Toxicology Target Validation HIT 2 Lead Pre -Clinical HIT ID Chemistry Lead Candidate Toxicology IND Biology In vivo Pharmacology DMPK Phase 1 Phase 2 Phase 3 Process Validation Commercial Supply Lifecycle Strategy Process Chemistry Services from H2L to Commercial Supply Underpinned by integrated scientific approaches applied in a phase-appropriate manner Chemistry & Analytical Toolboxes and Supply Capabi l ity Discovery Process Chemistry API Developability API Developability Commercial Route Selection Process Optimisation & Design Continuous Verification Continuous Improvement Supply Route Optimisation Control Strategy Definition
15 Sustainability Framework
16 Materiality at Sai Life Sciences is crucial for unlocking business success. Materiality helps us identify the issues that matter most to our business. It drives our focus on environmental, social, and governance (ESG) issues that are critical to our operations and aligned with the best interests of our stakeholders. Through our materiality assessments, conducted once every 3-5 years, we identify and prioritize the key topics that will shape our strategy and guide our efforts in creating long-term value. By concentrating on what truly matters, we ensure that our business remains resilient, responsible, and aligned with the evolving expectations of our stakeholders. How we conduct Materiality Assessment We use materiality assessment as a tool to identify and prioritise the most critical ESG issues or material topics for the organisation and its stakeholders. It involves the following steps: • We have taken the materiality topics from the materiality assessment conducted in the year 2019. We undertook a review to identify new material topics that have become relevant based on the needs of the business and increasing customer focus on ESG. • Various sources of information, such as industry standards, close look at GRI, benchmarking with peers, reference to SASB standards-health care sector specific were taken into consideration to identify and integrate new material topics. • We used a qualitative and quantitative approach for designing the materiality assessment method. • The materiality assessment was driven through a Survey Questionnaire that captured questions across the focus areas – Environment, Labour and Human Rights, Ethics and Sustainable Procurement. The Survey Questionnaire was administered across Management Team members and Functional Heads representing all cross functional departments. • The responses to the questionnaire were rated on a scale of 1- 4 wherein 4 denotes Materiality Our Sustainability Approach the highest and 1 denotes the lowest rating. • The responses of the Survey questionnaire were analysed to arrive at the list of material topics and those material topics which were rated 4 and received a 70% and above weightage were defined as high priority material topics. • The high priority material topics were further analysed through stakeholder consultation and the list of high priority material topics were finalized. • Each prioritized material topics were categorized across the focus areas • The x-axis represents the impact on our business (how important it is to the company) and the y-axis represents the impact on your stakeholders (how important it is to them). • By assessing the impact of each material topic on our business and the stakeholders, the material topics were plotted on a materiality matrix. • The issues in the top-right quadrant are the most material ones, meaning they have a high impact on both our business and our stakeholders. • The materiality matrix forms the basis to review and design the sustainability strategy, goals actions and paves the framework for our reporting. Materiality Assessment Identify Assess Prioritize Consultation Assign Significance Identify materiality topic Assess the impacts of material topics Prioritize the identified material topics Stakeholders consultation for prioritization Assign significance based on importance to business and stakeholders
17 The recent review of materiality assessment is summarized under themes, material topics and focus areas. Themes Catalysing growth through environmental stewardship Nurturing people and community engagement for sustainable performance Enhancing sustained value co-creation Material Topics Focus areas 1. Sustainable procurement 2. Ethics and code of conduct 3. Product Responsibility 4. Environmental Protection 5. Supplier Environmental Due Diligence 6. Employee health and safety 7. Employee engagement 8. Labour and Human Rights 9. Diversity, Equity & Inclusion 1. Implementing a supplier code of conduct covering environmental compliance, labour and human rights, health and safety risks 2. Training of buyer in procurement function on ESG requirements 3. Anti-competitive practices 4. Anti-corruption and bribery 5. Information security 6. Conflict of interest 7. Code of professional conduct and ethics 8. Awareness and training on the code of conduct and ethics 9. Mechanism to report and address violations on aspects related to corruption 10. Safe disposal instructions 11. Water 12. Energy 13. Waste management 14. Air pollution 15. Hazardous chemicals usage 16. Level of discharge of API to environment 17. Training and awareness of environmental risks and factors 18. Implementing a supplier code of conduct covering environmental compliance, health and safety risks. 19. Training of buyer in procurement function on ESG requirements 20. Handling hazardous chemicals 21. Risk identification and assessment 22. Employee well being 23. Industrial hygiene 24. Training in safety 25. Hazard controls 26. Contractor safety 27. Process safety 28. Hazard communication 29. Training 30. Working conditions 31. Prevention of labour 32. Equal opportunity for employment and progress 33. Prevention of and action orientation to address discrimination and harassment
18 Materiality Matrix Low priority Significance to business High priority Significance to stakeholders Low priority High priority Benefits and Performance Management Framework Employee Safety & Health Ethics & Code of Conduct Employee engagement & Product responsibility Sustainable procurement Supplier environmental due diligence Compliance – Regulatory, Quality Health* Waste Management Quality of science, robust process design Employee development & skill building Environmental Management* * Material topics related to Community Engagement Education* Infrastructure development for healthcare & education Labour & Human Rights Diversity Equity and Inclusion Operational excellence Sustainable manufacturing Delivery, Cost-effectiveness Climate action Energy Water Management Catalysing growth through environmental stewardship Nurturing people and community engagement for sustainable performance Enhancing sustained value co-creation
19 Stakeholder Consultation We believe that the stakeholder consultation process is a valuable opportunity for mutual exchange. It allows us to inform stakeholders about key material topics and, in turn, enables them to share their perspectives, raise concerns, and highlight potential impacts that matter to them. This collaborative approach helps us refine and prioritize our material topics, ensuring that our sustainability strategy is shaped by insights that are both relevant and responsive to the needs of our stakeholders. By engaging with our stakeholders, we strengthen our commitment to a sustainability strategy that is well-informed, inclusive, and aligned with the broader context in which we operate. The folowing details are the various stakeholder groups that engage directly or indirectly as well as highlights our ways of engagement to address key concerns. Stakeholder Engagement Mechanism Board of Directors/ Management Committee Members Board meeting Management review meeting Annual Diagnostic Survey ESG forum Investors/Shareholders Investor meeting Results – Quarterly and Year end results Press releases/ Media Announcements Release of Annual Report and Sustainability report Customers Audit Project review meeting Customer feedback survey Business development meeting Sustainability related survey Employees Employee well-being activities Employee satisfaction survey HSE promotional activities HSE review meetings Safety trainings Safety pep-talks SFTI walk-throughs PMS review Departmental / One on One meetings Stakeholder Engagement Mechanism Suppliers and Business Partners SCM discussions Manufacturing meet ups Manufacture 2030 Supply chain meets ESG Audits ESG questionnaires Government bodies and Agencies Audits Annual review Industry Associations Conferences Events Award applications Local Communities Engagement meeting Volunteering
20 Sustainability Strategy In our purpose to relentlessly explore science to help create medicines for today’s incurable maladies, we collaborate with innovator pharma and biotech companies to accelerate the discovery, development and manufacture of complex small molecules for a healthier tomorrow. In this pursuit, we recognize the need to navigate the various challenges facing businesses and believe in synergising sustainability, performance and growth at the core of our business strategy. Make it better together Enhancing Sustained Value Co-creation We are dedicated to fostering long-term partnerships that deliver mutual value. By integrating sustainability into every aspect of our operations, we ensure that our value creation is resilient, responsible, and aligned with the needs of our stakeholders. Catalysing Growth through Environmental Stewardship Environmental responsibility is at the heart of our growth strategy. We actively drive initiatives that reduce our environmental footprint while advancing innovation and efficiency. Our stewardship is focused on safeguarding natural resources, promoting circularity, and contributing to a sustainable future. Nurturing People and Community Engagement for Sustainable Performance We believe that our people and communities are the foundation of our sustainable success. We are committed to creating a positive impact through inclusive practices, socio-economic empowerment, and a deep focus on health, safety, and human rights. By nurturing our workforce and engaging with communities, we drive performance that is sustainable and beneficial to all.
21 We reinvigorated our commitment to the Sustainable Development Goals (SDGs) as part of our dedication to addressing global challenges like climate change & diversity, equity & inclusion. By considering stakeholder expectations and strengthening our focus on the various ESG commitments we have pledged to uphold, we ensure our actions align with these critical global objectives. Through our materiality assessment review, we anchor our sustainability startegy across three core elements, building a future where business success and sustainability go hand in hand. We have outlined all our SDG’s under these three strategic pillars to achieve by the year 2027 considering 2022 as the baseline year. Enhancing Sustained Value Co-creation Catalyzing Growth through Environmental Stewardship Nurturing People and Community Engagement for Sustainable Performance As a responsible CDMO, we support global innovators by co-creating value with customers, upholding the highest standards of quality management, advancing digital, analytics, and automation, protecting information, accelerating science and technology, fostering sustainable procurement, and consistently upholding governance and ethics. • Engage with 100% of critical suppliers in committing to the code of supplier conduct and ethics • Reduce specific water consumption by 25% • Reduce specific greenhouse gas emissions by 30% • Replace 70% of our energy requirements with renewable sources • Reduce specific hazardous waste generation by 10% • Recycle 90% of hazardous waste through co-processing and alternate reuse • 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 less privileged communities through our CSR programs • Achieve zero reportable incidents Key Focus Areas Key Focus Areas Key Focus Areas We commit to optimizing water and energy use, eliminating waste, protecting the environment, enhancing material efficiency, contributing to biodiversity, and driving supplier environmental responsibility, all while raising awareness and training our team on sustainable practices. We aim to increase opportunities for women in our workforce, ensure robust employee health and safety, enhance engagement, and empower women in socially underprivileged communities through education, while upholding labour and human rights across all operations.
22 Code of Business conduct and Ethics Policy Health, Safety & Environmental Policy Energy Policy Prevention of Sexual Harassment Policy Information Security Policy Diversity, Equity, and Inclusion (DEI) Policy Social Accountability Policy Labour Policy Human rights Policy Sustainable Procurement Policy Code of Supplier conduct and Ethics Policy Sustainable Development Goals Whistle blower Policy Family Friendly Policy Information Technology Policy Equal Opportunity Policy for Persons with Disabilities Vigil Mechanism Policy Grievance Redressal Policy ESG Policies
23 S. No. SDG Targets (FY 2022 to FY 2027) Performance as on FY 2024 1 Reduce specific water consumption by 20% Specific water consumption reduced by 15% 2A Reduce specific greenhouse gas emission by 30% Specific GHG emission reduced by 20% 2B Replace 70% of our energy consumption with renewable power We have replaced 50% of our energy consumption with renewable power 3A Reduce specific hazardous waste generation by 10% Specific hazardous waste generation increased by 12% 3B Recycle 90% of waste through coprocessing and alternate reuse Waste processing through coprocessing is increased to 97% 4 Increasing percentage of women employees in total workforce to 18% Women employees are 14.3% of total workforce and are increasing year on year 5 Provide socio-economic empowerment of women and education for 8000 people from socially and less previliged communities through our CSR programmes 8300 beneficiaries were benefitted from CSR programs. Youth empowerment through NIIT foundation was flagship program 6 Engage with 100% of critical suppliers in committing to the code of supplier conduct and ethics 67% of critical suppliers committed to the code of supplier conduct and ethics SDG Targets & Performance
Governance & Business Ethics
25 Robust governance and unwavering ethical standards form the foundation of our commitment to sustainable growth, ensuring that our business practices align with the highest standards of transparency, accountability and integrity. It is about fostering a culture of ethical decision-making and ensuring that our operations align with the interests of all stakeholders—customers, employees, investors, and the broader community. Through robust governance practices, we aim to build trust, mitigate risks, and drive sustainable growth, reinforcing our commitment to responsible leadership and long-term value creation. The governance mechanism at Sai Life Sciences is designed to ensure robust oversight, accountability, and ethical management across all levels of the organization. It involves a well-structured Board of Directors, supported by various committees that oversee critical areas such as audit, risk management, compliance, and sustainability. These committees work closely with executive management to align business strategies with our core values and stakeholder interests. Regular assessments, transparent reporting, and a commitment to continuous improvement form the backbone of our governance framework, ensuring that we operate with integrity and deliver on our promises to all stakeholders. In today’s fast-paced and fiercely competitive business landscape, staying ahead of the competition requires making swift, calculated decisions. Success hinges on the guidance of a high-performing board that can steer the company toward sustainable growth, ensuring long-term resilience and prosperity. The Board of Directors at Sai Life Sciences serves as the highest governing body, consisting of seven members, including both executive and non-executive directors. The Board is led by the Chairman and Managing Director, who are the executive members, while the non-executive members comprise three directors and two independent directors, one of whom is a woman director. The Board meets at least four times a year to review significant developments impacting the company, to discuss strategic decisions, and to act on matters requiring Board approval. Dr. K. Ranga Raju Chairman Executive directors Krishna Kanumuri CEO & Managing Director Raju A Penmasta Director Mitesh Daga Director Rajagopala S Tatta Independent Director Puneet Bhatia Director Manjusha A Joshi Independent Director Audit Committee Share transfer committee Corporate Social Responsibility (CSR) committee Nomination and Remuenaration committee Non Executive Directors Board of Directors Governance Mechanism
26 Sustainability focus The Sai Board of Directors plays a critical role in overseeing the company’s sustainable development, strategic planning, and risk management policies. At the Board level, the Management Committee holds overall responsibility for the management, goal setting, performance, and long-term success and sustainability of Sai. To ensure effective execution, additional corporate and site-level committees are in place to implement and monitor new initiatives, as well as to identify emerging opportunities. Our Sustainability Governance Council is responsible for integrating sustainability matters into business strategy and decision-making on critical matters. It oversees sustainability performance of the organization, progress against the targets and suggests improvements. The council comprises Board of Directors, CEO, COO and CFO. Sustainability Cell – Corporate is responsible for tracking and reporting sustainability performance and initiatives against targets. The corporate cell is headed by COO and comprises of all functional heads. The Sr. VP - HSE & OE convenes the meeting and primarily responsible to integrate the SDG targets in the overall planning process across all cross functions. 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. Board Committees The Board of Directors at Sai Life Sciences is supported by several key committees, each tasked with overseeing critical aspects of the company’s governance and operations. Report genuine concerns of Directors and employees Directs the company’s efforts towards social and environmental responsibilities, ensuring that CSR initiatives align with the company’s values and contribute meaningfully to the community Responsible for monitoring the performance of Independent Directors and assisting the Company in implementing governance practices Address and resolve the grievances of security holders of the Company Responsible for the appointment, evaluation, and compensation of the Board members and senior executives. It ensures that the Company attracts and retains top talent and that compensation practices align with performance and long-term value creation Oversees the integrity of financial reporting, internal controls, and the audit process. It ensures compliance with legal and regulatory requirements, while also assessing risks and implementing strategies for risk management Vigil Mechanism Committee Independent Directors Committee Corporate Social Responsibility (CSR) Committee Stakeholder’s relationship/ investors grievance redressal Committee Nomination & Remuneration Committee Board Committees Audit Committee
27 Business Ethics The Code of Business Conduct and Ethics serves as a foundational guide for all directors, officers, and employees, ensuring that their actions are governed by the highest standards of ethical conduct and integrity. This Code is integral to our operations, reflecting our unwavering commitment to ethical behaviour in every aspect of our business. Our activities are strictly aligned with our Anti-Corruption and Bribery, and Anti-money Laundering policies, which safeguard the integrity of our operations. All dealings with vendors, business partners, and contractors are conducted with honesty and transparency, in full compliance with the ethical standards outlined in our policies. By adhering to these principles, we maintain a culture of integrity and trust, which is essential to our long-term success and reputation. We are committed to upholding the Universal Declaration of Human Rights and the Core Labor Standards established by the International Labour Organization. At Sai Life Sciences, we prioritize Human Rights and Equality in the workplace by emphasizing key principles such as Equality, Freedom of Speech and Expression, and Freedom of Movement. We are steadfast in our efforts to prevent trafficking, combat unfair labour practices, and promote individual respect. Additionally, we support work-life balance and ensure robust grievance mechanisms, fostering an inclusive and respectful work environment where every employee’s rights and dignity are protected. We offer a multi-tiered grievance redressal mechanism supported by highly empowered committees that are equipped to respond swiftly and effectively to any violations of our policies or principles. This structured approach ensures that concerns are addressed promptly and fairly, reinforcing our commitment to maintaining a respectful, safe, and inclusive work environment. We encourage a culture of transparency and accountability where every employee feels safe and empowered to raise concerns about any unethical practices, misconduct, or legal violations. Our Vigil Mechanism Policy encourages employees and Directors to report significant non-compliance with the Company’s Code of Conduct without fear of retaliation. This policy provides a secure and confidential channel for reporting concerns related to violations of our Codes of Conduct or any company policies. By supporting this initiative, we ensure that all employees have a voice in upholding our values and maintaining the highest standards of integrity across the organization. Code of Business conduct and Ethics Policy Human Rights Grievance Redressal Vigil Mechanism Whistleblowing is the act of reporting any concerns regarding suspected wrongdoing or dangers related to our activities. This includes, but is not limited to: • Bribery or corruption • Facilitation of tax evasion • Fraud or other criminal activities • Miscarriages of justice • Health and safety risks • Environmental damage • Breaches of legal or professional obligations We encourage all employees and stakeholders to raise concerns under this policy. Our goal is to create an environment where whistleblowers feel safe and confident in bringing forward issues without fear of retaliation. Whistleblowers Policy
28 We conduct animal testing primarily on rats and mice, adhering to the highest standards of care and ethical practices. Our facility is accredited by The Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC), reflecting our commitment to an effective health and safety program for staff involved in animal care. Animals are housed in autoclaved polycarbonate cages, with rats accommodated 2 to 3 per cage and mice up to 5 per cage. They are provided with autoclaved corn cob bedding, ad libitum RO water, and food in sterilized bottles and feeders. The animal rooms are meticulously maintained, including monthly fumigation and twice-daily cleaning. We prioritize the welfare and humane treatment of animals through ongoing awareness training for employees. Staff working with animals and chemicals receive comprehensive job-specific training, including demonstrations, direct supervision, and information on potential hazards such as infectious diseases, chemicals, radiation, and species-specific risks. Training on safe handling of compressed gases, cryogenic liquids, and emergency procedures is also provided to ensure a safe working environment for all. We are committed to ensuring the safety and well-being of all our employees, regardless of gender. While the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, specifically addresses the protection of women, Sai extends these provisions to safeguard both male and female employees at our locations across India. As part of our commitment to education and prevention, we have integrated strict rules and regulations against sexual harassment into our employee conduct and discipline policies. We encourage all employees to report any instances of sexual harassment they experience personally. Additionally, concerned colleagues are empowered to notify the Internal Complaints Committee (ICC) of any behaviour they witness that may constitute sexual harassment towards another employee. Our goal is to maintain a respectful and safe work environment where every individual feels secure and supported. Animal Testing Sexual Harassment Policy Information security is paramount to ensuring that “Due Care” is exercised in safeguarding our information assets and those of our customers, employees, and stakeholders. “Due Care” is defined as providing cost-effective protection of information, proportionate to its business value. The potential risk to Sai Life Sciences Limited from compromised confidentiality, integrity, or availability of information underscores the critical nature of this responsibility. As we establish our ISMS Information Security Management System (ISMS), which is crucial for the applicability of our ISMS policy and certification to ISO 27001:2022, our primary objective is to demonstrate the organization’s commitment to information security through a comprehensive management process across the entire organization. Information Security Incidents reported 1. Number of confirmed corruption incidents 2. Number of reports related to whistleblower procedure 3. Number of incidents of discrimination and harassment 4. Number of information security breaches 5. Number of anti-competitive cases or behaviour NIL NIL NIL NIL NIL
Economic
30 CDMO companies serve as the backbone of pharmaceutical development and manufacturing, and the ability to innovate, directly impacts the speed, efficiency, and quality of bringing medicines to market. We are one of the largest integrated CRDMOs among listed Indian peers in terms of revenue from operations for the FY 2024, serving as a one-stop platform for discovery, development and manufacturing. We are present in the different phases of the value chain stages, which allows us to provide end-to-end support from discovery to commercialization. Enhancing sustained value co-creation with our customers and supply chain partners Value Chain Stages Phases Key Steps • Target lead identification • Lead Generation • Lead Optimization • Lead Selection • Biology Studies • Biological Analysis • Drug Metabolism, Pharmacokinetics (DMPK) • Toxicology studies (Safety studies) • Manufacturing Clinical Supplies • Phase 1,2,3 Clinical Trials • Drug Filing with Regulatory Authorities • Drug Substance Manufacturing (RSM, intermediates, APIs) & Formulation Research Development Pre-clinical development Clinical Development & Supplies Registration Commercial Manufacturing Contract Research, Development and Manufacturing Organizations (CRDMO) One stop service solution is a business model of pharmaceutical contract organization that provides services covering entire value chain Contract Research Organisation (CRO) Focus on the drug development, data management, and select analytical services Chemistry, Manufacturing and Control (CMC)/ Contract Development and Manufacturing Organization (CDMO) Focus on development and manufacturing Contract Manufacturing Organisation (CMO) Focus on development and manufacturing Drug Discovery Development & Clinical Supplies Commercial Manufacturing
31 Small molecules or synthetic compounds account for around 70% of APIs on the market today. Due to the considerable economic benefits of outsourcing API manufacturing, there has always been a substantial reliance on CDMOs for APIs. Outsourcing is anticipated to rise further in the next decades because of the increasing complexity of APIs, which are increasingly potent and need expert handling. As of March 31, 2024, approximately 25% of the combined total of 49 late phase (commercial, Phase III and post-Phase- III products) and 35% of the 100 early-phase products in our portfolio are APIs. We believe that this percentage of APIs in the product portfolio reflects our customers’ confidence in our quality and regulatory compliance. 15 of these 49 late phase products were transferred to our manufacturing facilities from another facility. Our scientific talent and laboratory infrastructure support diverse therapeutic areas such as oncology, immuno-oncology, CNS, autoimmune diseases, metabolic disorders, fibrosis, rare diseases, and more. The technical and R&D infrastructure capabilities resulted in us being awarded an early stage, complex and lengthy carbohydrate chemistry project with several chemical steps by an innovator pharmaceutical company. As a result of our process development efforts, we were able to reduce the cost by more than 70%, and we were also able to improve the product yield. Our diverse customer base includes global pharmaceutical companies and biotechnology companies, including 18 out of the top 25 pharmaceutical companies across the regulated markets of the US, the UK, EU and Japan. The number of customers we serviced among the top 25 pharmaceutical companies, doubled from 9 in the FY19 to 18 in FY24. We have made significant investment in our organizational transformational initiative, Sai Nxt to augment our talent, processes, and infrastructure. Our community investment includes making donations and contributions to various foundations involved in providing skill development and livelihood generation centre, conducting health camps, and providing education to underprivileged sections with a specific focus on women and girls. Our CSR spent in the reporting year was 0.2 million USD. Our Impact
RkJQdWJsaXNoZXIy MTIwMDc4NQ==