neuland laboratories ltd share price Management discussions


World Economic Overview

The second half of 2021 was marked with supply disruptions, hindering global manufacturing, especially in Europe and the United States. A resurgence in Covid-19 cases, particularly in Europe, held back a broader recovery. In China, disruptions from COVID outbreaks, interruptions to industrial production from power outages, declining real estate investment, and a faster-than-expected withdrawal of public investment all contributed to a slowdown. Although there were signs of a global turnaround in November, the Russia-Ukraine conflict swept away chances of major recovery in Europe. Economic damage from the conflict is expected to slow down global growth in the near term. Apart from a severe double-digit drop in GDP for Ukraine and a large contraction in Russia, worldwide spill overs through commodity markets, trade, and financial channels are evident. Fuel and food prices have increased rapidly, with vulnerable populations, particularly in low-income countries, most affected. Elevated inflation will complicate the trade-o_s central banks face between containing price pressures and safeguarding growth. Interest rates are expected to rise as central banks tighten policy, exerting pressure on emerging market and developing economies. Global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. A gradual resolution of supply-demand imbalances and a modest pickup in labour supply are expected, easing price inflation eventually.

Source: World economic Outlook – IMF, April 2022


The second Covid-19 wave, impacted the economy in the Q1 of FY 2021-22 on top of the significant loss of life. Similarly manufacturing too was disrupted due to limited availability of labour and prolonged lockdowns though localised. The GDP growth rate recovery in FY 2022, was expected on the back of robust growth in certain sectors including services, agriculture, manufacturing, mining, construction and energy. The third COVID-19 wave impacted growth in the last quarter of FY 2022. The year ended with rising international commodity prices emanating from the Russia-Ukraine conflict.

According to a report by Goldman Sachs, new investment and ordering activity witnessed a sharp pick-up in FY 2021-22 resulting in 210% jump in manufacturing sector as compared to FY 2020-21. The growth was contributed by both traditional sectors like petrochemicals, steel, cement, and automobiles, and new-age sectors like electronics, e-vehicles, and data centres. Megaproject announcements, especially, in the steel sector provided a strong impetus to growth. Announcement of Production-Linked Incentive (PLI) schemes for 13 sectors in FY 2020-21, had provided a significant boost. Indias merchandise exports rose to a record US$ 418 billion in FY 2021-22. Pharma sector recorded its best-ever exports performance with a remarkable growth of 103% since FY 2013-14, from Rs 90,415 crore to Rs 1,83,422 crore in FY 2021-22.

The GDP growth was 8.7% in FY 2022 while the IMF forecasts a growth-rate of 8.2% in FY 2023, respectively. The growth projections are primarily based on lower base effect, successful vaccination drive across the country, and ofitake of government programmes spurring investments and activity. Strong fiscal, monetary and budgetary interventions by the Government of India are expected to keep India on track to remain the fastest growing economy in the world.



The COVID-19 pandemic induced crisis had a long-lasting impact on global public health but it highlighted the resilience of global health systems with speedy adaption to peaks in demand. The differing impact of the COVID-19 pandemic across countries is expected to impact growth through 2022. The global medicine market excluding COVID-19 vaccines, using invoice price levels, is expected to grow from $1,340 billion in 2021 to $1,424 billion in 2022 at 1.5% CAGR. The total cumulative spending on COVID-19 vaccines through 2026 is projected to be $251 billion, largely focused on the initial wave of vaccinations expected to be mostly completed in 2022 in developed countries and in 2023 in lower income geographies. Booster shots maybe required annually or even more often depending on durability of immunity and the continued emergence of viral variants. The global medicine market excluding COVID-19 vaccines is expected to reach $1.8 trillion in 2026 at 3-6% CAGR.

The market continued to be dominated by the top 10 developed countries. United States was the largest region in the global medicine market followed by China and Germany. In developed countries, the adoption of new treatments, offset by patent lifecycles and competition from generics and biosimilars, are expected to continue as the main factors influencing medicine spending and growth. In pharmerging countries, dramatic increase in healthcare access was the largest driver of change. Increasingly, led by China, pharmerging countries are enabling access to newer medicines developed by multi-national companies, often earlier and with access to more of their populations than in the past. India has also been a key driver of the growth in the global markets having recorded amongst the higher growth-rates.

Country Sales (US$ in billion) Share Growth
US $588.08 39% 10%
CHINA $121.15 8% 11%
GERMANY $111.15 7% 9%
JAPAN $76.90 5% -4%
BRAZIL $64.25 4% 25%
ITALY $49.43 3% 9%
INDIA $44.33 3% 18%
FRANCE $43.07 3% 12%
SPAIN $42.42 3% 10%
UK $35.23 2% 16%
REST OF WORLD $329.02 22% 12%

Specialty medicine

Specialty medicines are those which treat chronic, complex and rare diseases, and that have a minimum of four out of seven additional characteristics related to the distribution, administration by another individual or healthcare professional, requiring special handling in supply chain, requiring patient payment assistance, initiated/maintained by a specialist, disease requires additional monitoring of therapy and prescription medication has significant side effects requiring additional monitoring/counselling. These are more expensive than other more traditional medicines. The global specialty pharmaceuticals market size was estimated at $33.5 billion in 2020 and is expected to grow at 18% CAGR to reach $210 billion by 2031. Specialty medicines have been increasing as a share of spending in higher-income countries, such as the 10 largest developed countries and other high and upper-middle income countries, where they have reached 48% and 39% respectively in 2021, up from 26% and 22% 10 years earlier. In pharmerging countries specialty medicine spending share was 15% in 2021 lagging behind largely due to cost. Spending and usage of medicines in pharmerging and lower income countries, is focused more on older traditional therapies, while developed countries spending is growing in newer specialty therapies despite continued high use in older therapies. By 2026, specialty medicines will represent 45% of global spending and almost 60% of total spending in developed markets, with the remainder predominately being older and traditional therapies that will become progressively lower cost over time.


Indian healthcare sector is well-developed with a globally renowned pool of scientists and engineers. The size of the Indian pharmaceutical market stood at $44.3 billion in FY 2022. India is the largest provider of generic drugs in the world and is the third largest producer of pharmaceutical by volume and was the seventh largest market by value. Almost half of the global demand for vaccines is fulfilled by India, 40% of generic demand in the United States and 25% of all medicine in the United Kingdom. The pharma industry has seen a rapid rise in the past three years with rapid digitisation and the advanced research in the field has opened gates for newer avenues of treatment.

According to the Indian Economic Survey 2021, the domestic market is expected to grow fix in the next decade. Domestic pharmaceutical market is estimated to reach $65 billion by 2024 and $120-130 billion by 2030. The industry is expected to foster a culture of R&D and innovation to enable rapid drug discovery and development to improve the health outcomes worldwide.

During the COVID-19 pandemic, the industry exhibited its commitment and strength by supplying essential medicines to over 120 countries. In India, the industry also contributed to the fields of preventive healthcare, sanitation and quarantine facilities. The Indian pharma industry responded to the challenges of COVID-19 by evaluating the possible utilisation of available drugs and exploring innovative approaches. India is a globally-accredited manufacturing hub and meets 60% of the world?s vaccine demand.

With an export value of $24.47 billion in FY 2021-22, the products of the Indian pharmaceutical industry continue to improve health outcomes for patients worldwide. The exports saw a meagre increase of 0.13% due to high base effect of 18% growth in FY 2020-21, the freight cost increase and a decline in US exports owing to pending regulatory inspections at Indian sites by the US Food and Drug Administration (USFDA). Some of the manufacturers in Japan and Europe also revived their pharma business during the COVID-19 period and started supplying to the US, which is another factor that may have impacted the Indian exporters.

Government push for pharma sector growth

In September 2021, the Indian government contributed $4 billion to the pharmaceutical and medical industries.

Prime Minister Mr. Narendra Modi inaugurated the first Global Innovation Summit of the pharmaceuticals sector having 12 sessions and over 40 national and international speakers deliberating on a range of subjects including regulatory environment, funding for innovation, industry-academia collaboration and innovation infrastructure.

Finance Minister

Ms. Nirmala Sitharaman announced an additional outlay of $26.6 billion over five years for the pharmaceutical PLI scheme in 13 key sectors such as active pharmaceutical ingredients, drug intermediaries and key starting materials.

To achieve self-reliance and minimise import dependency in the countrys essential bulk drugs, the Department of Pharmaceuticals initiated a PLI scheme to promote domestic manufacturing by setting up greenfield plants with minimum domestic value addition to four separate ‘Target Segments? with a cumulative outlay of $951.3 million from FY 2020-21 to FY 2029-30.

Under Union Budget FY 2021-22, the Ministry of Health and Family Welfare was allocated Rs73,932 crore and the Department of Health Research was allocated Rs2,663 crore. The government allocated Rs37,130 crore to the National Health Mission?. PM Aatmanirbhar Swasth Bharat Yojana was allocated Rs64,180 crore over six years. The Ministry of AYUSH was allocated Rs2,970 crore.

Key factors impacting growth

Geopolitical tensions: Russia and Ukraine are amongst the key emerging markets for Indian pharmaceutical exports. Russia accounts for 2.5-3% of the total pharmaceutical exports from India and the share of Ukraine is < 1%. The ongoing geo-political issues is unlikely to have a material impact on the Indian pharmaceutical industry. However, as the situation is evolving, there could be moderation in exports to Russia and also foreign exchange losses for exporters on receivables, given the considerable depreciation of the Ruble against the US$.

Supply Chain disruptions: Pharmaceutical supply chains were still struggling to adapt to the global Covid-19 pandemic and prioritise business planning for the future, when the Russia-Ukraine conflict caused further disruption. Since both demand and supply are erratic, supply chain agility becomes a critical capability to meet patient needs. Agility requires much tighter and more transparent holistic relationships with suppliers, and levels of collaboration that have not been consistently achieved in the pharmaceutical industry.

Re-emergence of COVID-19 related disruptions: Lockdowns imposed in China in early 2022 due to COVID-19 outbreak is unlikely to have any immediate material impact on the Indian pharma industry, due to negligent supply chain disruptions owing to adequate inventory stocking in the near term. However, any significant disruptions to the manufacturing activity in China could result in supply chain issues and consequent firming up of raw material prices.


Global API sector

In 2021, the global active pharmaceutical ingredients market size was valued at $208.9 billion and is expected to reach $334 billion by 2028 growing at 6.9% CAGR driven by rising adoption of biologics in disease management, increasing regulatory approvals, patent expiration of major drugs, growing trend of outsourcing and increase in geriatric population. The growth of the captive API segment is propelled by companies investing in solving challenges and developing new chemical ways for the production of APIs in house aiding in cost reduction and the risk of contamination. Artificial intelligence and protein synthesis are expected to facilitate faster development with greater control over the process. The rising prevalence of chronic and lifestyle-based conditions, such as cardiovascular diseases, is also accelerating the demand for API.

The generic API segment is gaining share in the market owing to its cost effectiveness, which helps in catering to the needs of the rising number of patients in developing regions with a low-income population. According to the Association for Accessible Medicines, in 2017, there was a considerable rise in manufacturing units in Asia, Australia, and EU5. There has also been an increase in the market share of generic drugs.

The API market has traditionally been dominated by drugs, such as anti-infectives and diabetes, cardiovascular, analgesics, and pain management drugs. However, as per the R&D trends, the demand is shifting toward developing complex APIs used in novel formulations, targeting niche therapeutic areas. The major factors limiting the market growth include drug price control policies across various countries, fierce competition among existing players, and stringent regulatory policies.

North America currently dominates the market and is expected to continue its stronghold in near future owing to the increasing incidences of disease and rising aging population. With the drastic spread of COVID-19 in the country, the demand for drugs and ingredients increased.

Most of its API requirements are met through imports from China and India, as these countries have well-established manufacturing facilities and a large talent pool serving the pharmaceutical sector.

The API market has several manufacturers from China and India holding a dominant market position due to their large manufacturing footprints. Europe, Italy, Germany, and the UK are the key regions for API trade due to the presence of a well-developed pharmaceutical and life sciences sector. Developing nations like India are being increasingly preferred in the market over dominant API market countries, like China, owing to geopolitical situations. Other factors favouring India include quality raw materials and products, large workforce, vast distribution network, and government subsidies under schemes like ‘Make in India?.

Most of the APIs produced by reputed MNCs are used for captive production. However, a few players have emerged as contract manufacturers with a diversified client base. With increasing technological advancements and product innovations, mid-size and small-scale companies are increasing their market presence by introducing new ingredients at competitive prices.

(Source: Global Active Pharmaceutical Ingredients Market 2021-2028 (

Indian API sector

The Indian active pharmaceutical ingredients (APIs) market was valued at $11.8 billion in FY 2020-21. The growth is mainly attributable to high growth of the biopharmaceutical sector, drug research and the increasing geriatric population expected to boost the demand through FY 2026-27. Growing prevalence of chronic diseases such as cardiovascular diseases, diabetes, cancer, respiratory disorders, among others is going to boost the market. The Indian pharmaceutical industry accounts for second largest number of Abbreviated New Drug Applications (ANDAs).

The synthetic method of synthesis dominated the market with 56.3% share in FY 2020-21 on account of the easy availability of raw materials and easier process for development of APIs. The biological method of synthesis segment is expected to steadily increase share owing to the growing demand for vaccines, monoclonal antibodies, recombinant proteins and biosimilars. Based on drug type, the market is segmented into generics and innovators. In FY 2020-21, the generics dominated the market with 69.56% share.

Post shutdown of 2020 in China, the Indian government drew up plans to allot land for three major bulk drug parks and to provide more than $1 billion in funding to encourage companies to manufacture ingredients domestically, as a part of ‘Make in India? campaign that looks to capitalise on firms searching for an alternative to China.


The Indian active pharmaceutical ingredients (APIs) industry is expected to grow at 12.24% CAGR during 2021 to 2027. Key drivers boosting the growth of the Indian APIs industry include rising drug research; the need for active pharmaceuticals during the COVID-19 pandemic; the derisking of supplies from China ; and supportive government policies such as Atmanirbhar

Bharat, Pharma Vision 2020, Production Linked Incentive Scheme, among others. Increasing approvals from the central government for new active pharmaceutical ingredient manufacturing plants is a major factor driving the growth of the market through FY 2026-27. The Governments thrust on boosting competitiveness of India?s indigenous manufacturing are the right steps to address challenges of escalating costs in scaling up local production.

Challenges impacting the Indian bulk drug industry

India?s pharma sector needs to reinvent itself and reduce its dependence on export of generics, so as to become an end-to-end drug manufacturer. Notwithstanding the government?s intent and vigour, the road to making India the epicentre of global API production is faced with certain roadblocks and challenges along the way.

Slow and mired clearances for large-scale mega parks to manufacture bulk drugs

Need for significant investment in setting up facilities which confer to regulatory requirements from foreign countries Lack of financial support from government in terms of lower tax, cheaper utilities and land subsidy to lower capex requirement Dilemma between raising the scale of production and averting cost-escalations Wafer thin margin in API manufacturing leading to competitive disadvantage versus Chinese imports


Global market overview

The global pharmaceutical CDMO market was valued at $183.62 billion in 2021 as compared to $160.12 billion in 2020. It is expected to reach $289.64 billion by 2027, at 7.29% CAGR. As a result of the rising demand for generic medicines and biologics, the capital-intensive nature of the business, and the complex manufacturing requirements, many pharmaceutical companies have identified the potential profitability in contracting with a CMO (contract manufacturing outsourcing) for both clinical and commercial stage manufacturing. The most significant factor driving growth of CMOs is the growing need for state-of-the-art processes and production technologies, which have proven significantly effective in meeting regulatory requirements.

The pharmaceutical companies have been directing their priorities toward core competency areas and prefer not to dispense available resources, expertise, and technology on formulating the final dose of medicines. The increased competition and shrinking profit margins compelled the pharmaceutical companies to revisit their production processes and R&D activities instead of manufacturing the formulated drug to stay competitive in the market. The complexity of the biopharmaceuticals and the highly personalised medical therapies and devices drive the increased complexity in the supply chain operations and lead to increasing reliance on contract manufacturing.

Key trends

The CDMO market growth is expected to be driven by increasing investments in R&D.

The United States is the largest market for drugs worldwide and accounts for about half of the R&D expenditure in the pharmaceutical and biotechnology markets. Hence, CMOs play a critical role in this market and have invested in new facilities and technologies to cater to a wide range of outsourcing units. Besides capturing the benefits of a location in Asia through an in-house investment, the companies are also turning to research-based partnerships as a way of high-end sourcing expertise, building drug discovery, and manufacturing investments in Asia.

The gradual change in the working principles have led to the shift in pattern, from cost-control to re-emphasis on value-added services. CDMOs have allowed their integration into the value chain of companies.

Among dosage forms, sterile liquids are witnessing strongest growth in outsourcing of development and manufacturing activities. R&D investments, as well as capacity expansions, are expected in the injectable and sterile liquid dose formulations segment. Small biotech firms get access to specialised knowledge and resources, which help them expedite their R&D activities. Greater technological complexity in drug development and greater specificity in targets helped in the average R&D costs, as firms identify drugs with particular molecular characteristics, as opposed to using trial-and-error methods to find compounds that work in the desired way.

(Source: Pharmaceutical CDMO Market : 2022 - 27 : Industry Share, Size, Growth (


Huge potential for upturn in outsourcing ratio for CDMOs CDMOs are increasingly resorting to data-driven techniques to make manufacturing more efficient Technological innovation and advancement will further optimise the performance of the product, making it more widely used in downstream applications


With nearly four decades of experience in the pharmaceutical world, Neuland Laboratories Limited has emerged as a leading market player with presence in around 80 countries. Neuland is one among the leaders in manufacturing APIs, complex intermediates and custom manufacturing solutions services. It is a well-known one-stop solution for all the chemistry needs of the pharmaceutical industry. Generic Drug Substances (GDS) and Custom Manufacturing Solutions (CMS) are the two main business verticals. Neuland?s peptide synthesis services include production of peptides from milligrams to multi-kilogram scale by standard sequential chemical peptide synthesis and segment condensation strategies. Neuland has expertise in solution phase synthesis, solid phase synthesis and hybrid technology for complex peptides.

The Company has a significant global presence and earns more than 75% of revenues through exports. It has three world class US FDA and EU GMP compliant manufacturing facilities. The facilities have successfully cleared 15 USFDA audits and comply with all regulatory guidelines and requirements of Current Good Manufacturing Practices (cGMP). The collective capacity of the three facilities is around 907 KL. 70% of total exports are to the US and European markets. The Company has filed over 916 Drug Master Files (DMFs) worldwide.

The Company boasts of a technologically advanced 3,400 square metres R&D centre housing a scientific team of over 300, near

Hyderabad. The Company?s strength is its expertise in manufacturing of APIs and advanced intermediates. The Company seamlessly ensures application of strong process chemistry to manufacturing in a regulatory compliant environment, supported by its strong, well-qualified team of more than 1500 employees.

The Company facilitates and accelerates drug development and cGMP manufacturing of APIs to provide a wide range of solutions and services across the globe. The Company has strong API capabilities and provides services such as cost-effective synthesis, IP protection and regulatory expertise. It serves the customers across the full spectrum of the product lifecycle, from preclinical all the way to generic, with a track record of over 75 APIs scaled up.


Statement of Profit & Loss

FY 2022 was a mixed bag. The year was marked by a fiat revenue primarily attributable to weak GDS ofitake due to volume drop in certain key products. The Company?s input cost structures experienced an unusual increase which impacted earnings. However, Neuland remains focused on building execution excellence and is confident about the long-term prospects of all the businesses despite facing certain technical issues with some late stage CMS projects. Given strong focus on delivering complex projects in line with clients? technical requirements, the overall business is expected to grow as per expectations with margin expansion over the long term.

The Company?s revenue remained fiattish at Rs 953.2 crores in FY 2022 as compared to Rs 953 crores in FY 2021, led by logistics issues and sharp increases in manpower costs and other expenses related to commercialisation of Unit-3, EBIDTA saw a drop of 11.2% to Rs 144.3 crores in FY 2022 as compared to Rs 162.5 crores in FY 2021. Profit after tax further declined 20.9%, due to higher depreciation on account of Unit-3 commercialisation, to Rs 63.5 crores in FY 2022 as compared to Rs 80.3 crores in FY 2021.

Interest Coverage Ratio

Increased by 31% to 16.0 in FY 2022 from 12.2 in FY 2021 on account of lower working capital utilisation and lower rate of interest owing to continuous negotiations with the lenders.

Operating Profit (EBIT) Margin (%)

Operating Profit Margin decreased by 23.6% to 10% in FY 2022 (Rs 95.2 crores) from 13.1% in FY 2021 (Rs 122.9 crores). The decline in margins was due to fiat revenues and elevated costs across the value chain, for example, logistics, power and fuel, consumer goods and also supply chains delays and disruptions coupled with volatility in procurement prices of various raw materials, increase in manpower cost and other expenses related to Unit III commercialisation.

Net Profit Margin (%)

Net Profit Margin declined 170 bps to 6.7% in FY 2022 from 8.4% in FY 2021 due to the reasons discussed above and also higher depreciation led by Unit 3 commercialisation.

Net Debt to Tangible Net Worth Ratio

Net Debt to Tangible Net Worth Ratio increased by 25.9% to 0.38 (FY 2022) from 0.30 (FY 2021) on account of increase in long term debt primarily due to sanction and disbursement of Foreign Currency Term Loan of Rs 42.6 crores to partially fund the capex outflows of Rs 95.9 crores. In addition, working capital borrowing increased to meet the business requirement owing to two reasons (a) higher receivables due to high volume of customer orders due for delivery at the end of the year (b) decline in payables due to increased number of MSME vendors as per the regulations and rationalised procurement activity in Q4 FY22.

It may be noted that the current Net Debt: Tangible Net Worth ratio of 0.38 is low compared to the acceptable norm of 1:1, highlighting the Company?s healthy capital structure.

Current Ratio

Current Ratio increased by 7% to 1.58 (FY 2022) from 1.47 (FY 2021) primarily on account of increase in inventories owing to advance procurement strategy of key raw materials to avoid future possible global disruptions, increase in accounts receivables coupled with decrease in accounts payables.

Cash Conversion Cycle

The Cash Conversion Cycle (No. of Days of Sale) is 149 days as against 122 days in FY 2021. The increase is attributable to increase in inventories, receivable and decrease in payables. Specific reasons for each of the attribute is stated in detail in above paragraphs.

Return on Capital Employed & Return on Invested Capital

Return on capital employed decreased by 28.3% at 9.7% against 13.5% in FY 2021 and Return on invested capital is at 6.7% as compared to 9.7% last year. The decrease is on account of lower operating margins for the reasons stated above along with higher capital base for capex investment and working capital requirements.

Fixed Assets Turnover

The Fixed Assets Turnover Ratio is at 2.08 as compared to 2.35 in FY 2021. The Company has made the capex investment of Rs 101.7 crores during the year attributable to investment in U3 to improve the occupancy and efficiencies and towards new CMS projects , these investments would play a vital role in setting the future growth trajectory in medium to long term.

R&D Investment

In FY 2021-22, the total R&D spend was at 36.4 crores which is at 3.8% of the total revenue as compared to Rs 22.9 crores in FY 2021. The Company has further strengthened R&D capabilities by adding scientific personnel, technological equipment, and an additional Lab.


The Company has established itself as a service provider in the manufacturing of Generic Drug Substances since starting operations. This vertical is the core business and operational expertise. The vertical is further segregated into two segments for effective and efficient management. The first segment, prime APIs comprises of the large volume, mature products while the second segment, specialty APIs, comprises of the lower volume, complex APIs with less competition. The Company?s product portfolio spans across 11 therapeutic categories around 65 APIs.

Prime APIs

Aided by its three US FDA and EU GMP compliant manufacturing facilities with collective capacity of ~900 KL, the Company works on a molecule with a business leadership approach or in a partnership with client. The segment comprises of around 15 mature large volume, APIs in a highly competitive market. The key molecules in this primary revenue generating segment are the anti-epileptic agent, Levetiracetam and the anti-depressant, Mirtazapine. Other important molecules include Levo_oxacin, Cipro_oxacin, Enalapril, Sotalol and Labetalol. In its over three-decade journey in the segment, the Company has thrived to establish leadership in identified strategic molecules with strong dedication to fulfil quality commitment and uninterrupted supply. Constant endeavour to optimise process and improve yields, productivity and margins enables the Company to maintain its leadership position in key molecules. The Company continues to invest in lifecycle management initiatives.

Specialty APIs

The segment comprises of more than 25 low volume, high value, complex APIs in a less competitive market. Speciality API is the profit driving segment for the organisation that leverages its core competencies in process chemistry involving Chiral chemistry, hydrogenation and inhalation products. Certain molecules enjoy patent protection and are supplied for validation batches and regulatory filings. Some of the main revenue generating molecules include Brinzolamide, Dorzolamide, Deferasirox, Donepezil, Entacapone and Salmeterol. The Company continues to strive to excel in specialty APIs and in filing IP for non-infringing processes.

Key highlights for 2021-22

In terms of the prime business, products like Labetalol and Levo_oxacin performed well, but products like Levetiracetam which had been doing well historically faced challenges. This is attributable to low customer off-take due to high inventories. Specialty business performed well. Products like Entacapone, Salmeterol and Ezetimibe witnessed robust growth.

There are nine projects under progress at various stages of development for the generic business.

The Company filed five DMFs for Vilanterol, Aripiprazole Monohydrate (sterile), Tafamidis Meglumine, Linezolid and Elagolix Sodium.


The GDS vertical is of strategic importance with specialty segment driving profit-led growth. The prime segment drives revenue for the vertical as generics become commonplace with increasing patent expiry. The Company will continue to foray into newer geographies in the prime segment. In the specialty segment the focus will be to penetrate deeper in the existing markets. For molecules like Mirtazapine, Labetalol, Sotalol it has been a constant endeavour of the Company to dominate the market to leverage economies of scale and improve profitability.

During FY 2023, the Company is likely to file 6 US DMFs. Once commercialised and the patent expires, these molecules will contribute significantly to the growth of the vertical. Even during the development phase some of these molecules, are expected to clock revenues. Quality-led portfolio is enabling strengthening the market position in both prime and specialty API segments.

As Unit III became fully operational during FY 2022, it led to short term increase in expenses which is inevitable for building a sustainable long-term business. The Company is looking towards cost effectiveness through process improvement programs for all products and also endeavouring to improve operational efficiencies.


The Company?s proven expertise in chemical process development to manufacturing at varied scales, a deep understanding of complex chemical processes and manufacturing drives its stronghold in the CMS business. CMS business is a high-uncertainty, high-margin, business wherein the Company caters to the needs of pharma and biotech companies. The facilities are compliant as per cGMP requirement and meeting environment and safety standards.

Backed by an excellent compliance history and track record, Neuland is equipped for molecules which are Pre-clinical all the way through Phase I to commercial API manufacturing and beyond genericisation, enabling its customers to deliver the products by providing a range of technology platforms and product services maximising the value opportunity.

The Company has established a niche for itself as one of the important players in the CMS segment catering to leading pharmaceutical and biopharma companies worldwide. It plays a crucial role in drug substance development and manufacturing process. Neuland offers integrated and versatile GMP manufacturing facilities capable of handling complex reactions and ensures the experienced transfer of processes from small-scale through validation to commercial manufacturing. It follows a consultative approach on customer relationships. Through its dedicated local teams at Hyderabad, New Jersey, Switzerland and Tokyo, Neuland helps its customers to expedite their discovery-to-market timelines with technical as well as commercial employees. Its services include manufacturing API to customer specifications, designing and developing manufacturing processes, process optimisation for competitiveness, acts as a complete CMC partner for the API.

In CMS, revenue generation is primarily through: I) R&D and Manufacturing of products in the pipeline

The Company undertakes process chemistry, analytical R&D and lab-scale work and manufacturing operations for molecules which are in the clinical pipeline. These projects are usually high margin but with lower probability of repeat business. Neuland has, however, emerged as a reliable partner on the innovation journey.

II) Commercial Manufacturing

The Company manufactures intermediates/ APIs for commercial novel molecules, covered under patent protection. This enables the Company to earn steady revenue amidst limited competition being the only or one among a few approved suppliers. Volume increases once the approved formulation is globally approved. The current pipeline has a healthy mix of projects at various stages of product life-cycle. There are certain late-stage development projects likely to transform into commercial manufacturing contracts with long-term revenue visibility.

Key highlights for FY 2021-22

The year was marked with CMS vertical growing marginally and recording revenues of Rs 282 crores. This is in comparison with Rs269 crores in FY 2021, resulting in 4.8% growth YoY despite a significant drop in sales of one of the oldest commercial products. During the course of the year two projects were commercialised, which would be key to the growth of commercial revenues.

The Company has a fairly healthy pipeline of phase III and early development projects which will be commercialised in the near future and have the potential of being significant contributors for the Company .

The Company does significant business with

Biotech companies and has a proven track record of delivering complex late-stage projects. This attribute is expected to differentiate the Company, establishing it as a reputed CMO.


It has been a constant endeavour to create a sustainable CMS business that is driven by technology and strong customer relationships. The potential of the CMS projects especially in phase III, Development and Commercial with FY 2022 revenue nearing the Rs300 crores mark, bodes well for long term business outlook. The current pipeline includes 81 active projects with 23 projects in Phase-III and Development stages. It is expected that one or two molecules will also get into commercial in FY 2023. The Company is well placed in the CMS vertical with a strong focus on molecules in the later stages of the clinical cycle. The Company is committed to add depth in technical capabilities. It is looking to invest in QBD labs, strengthen process engineering and foray into new chemistry capabilities. It remains focused on effectively improving customer relationships and leveraging portfolio expansion.

The Company does significant business with Biotech companies and has a proven track record of delivering complex late-stage projects. This attribute is expected to differentiate the Company, establishing it as a reputed CMO. Neuland has been working continuously to improve its project delivery timelines and create a very collaborative project management interface. Due to the high level of complexity of these projects, the team works collaboratively with customers during the journey of commercialising a New Chemical Entity (NCE).


Human capital is a crucial link in the growth story of Neuland. The Company is committed to nurturing its talent pipeline towards building a high-quality team to meet the requirements of a nimble business environment. The Company has implemented various skill and career development programs aimed at enabling employees to deliver at their optimal potential. Employee safety and wellbeing have been the topmost priorities for the Company amidst COVID-19 pandemic.

Talent Acquisition

Being a part of an increasingly complex world of work arrangements and employment channels, the Company realises that early recognition of talent and provision of opportunities for skill upgradation and career growth are essential to have a productive, sustainable, and engaged workforce. The Company, thus, continues to invest in multiple programs in this direction. The Company has built strategic partnerships with educational institutes of repute with special focus on developing strong business and managerial leadership capabilities through ‘Neuland Management Trainee (NMT) Program?. Management Trainees receive visibility to Company?s operations and are continually enriched through interactions with C-Suite.

In order to further strengthen its entry pipeline in the next fiscal year, the Company has entered also into partnership with several management, pharma and vocational training institutes.

Talent Management

The Company?s talent engagement program aims at engaging and recognising talent pools to keep them motivated and committed at all times. The Company constantly identifies high-potential talent from within and invests in nurturing them to embrace broader responsibilities. Several programs have been initiated to enhance functional, leadership, and technical skills to enable a strong leadership pipeline, including succession planning. The Company has continued its Management Trainee Program wherein over 60% of the management trainees were retained and moved into more challenging roles.

Learning & Development

Being a learning-focused entity, several learning and development initiatives have been undertaken keeping in mind both short-term and long-term goals of the Company. To strengthen employee skills, the Company has introduced several online learning initiatives including compliance trainings. As the Company prepares for the future, building people?s capabilities is pivotal. As a part of online learning program, around 150 employees have been enrolled across the Company for Lean Six Sigma, Project Management Program and MS Excel training. Over 70 manufacturing employees have been enrolled for online Life Sciences Sector Skill Development Council (LSSSDC) platform for imparting 360-degree GMP course. In line with the philosophy - ‘the more reviewer is vigilant the less will be the mistakes?, the Company has strengthened its Quality Review Mechanism. Sensitisation sessions were conducted for its reviewers along with pre and post assessment.

Employee Experience

The Company has implemented several digital transformation initiatives to enhance employee experience, improve transparency and enable ease of access to employee information when required for making key business decisions. The Company has implemented SAP SuccessFactors cloud based comprehensive human capital management system, which is the primary source of employee-related information from hire to retire stage.


The Company prides itself in following a strong research driven business approach, continuously engaged in research on new products and process improvement on existing products as part of continuous improvement. It?s R&D facility is approved by the Department of Scientific and Industrial Research (DSIR). During the year, the Company focused on building processes and systems for efficient new product development, strengthened R&D capabilities by adding specialised scientific personnel, high end equipment and an additional Lab. It?s a constant endeavour to keep the R&D lab updated with the latest technology and software. As a part of technology absorption and adoption, once technology is developed for a product, it is tested in a pilot plant and thereafter commercial production is performed. Innovation is enabled by an incremental approach towards cost, time, safety, quality and complex product development by adopting and upgrading technology.

Key Initiatives of FY 2022

The R&D team successfully added new molecules, filed 5 USDMFs, 15 filings in Europe, 4 DMFs in Brazil and 18 DMFs in rest of the world during the year. Besides strengthening the product portfolio, the Company has provided development support to APIs in Phase 2 and Phase 3 clinical development.

Life cycle management of the existing manufacturing processes for APIs resulted in lower production costs, reduced cycle times, and customer retention. The Company filed for eight patent applications, seven in India and one in PCT. During the year, the Company has also developed two generic peptides to be used as an Active Pharma Ingredient. The Company was awarded ‘IP facilitator of the year for excellence and innovation? from Assocham.

The Company currently has over 80 Custom Manufacturing active projects with several projects in late-stage product development. The Company has attained competency in manufacturing of sterile API and also developed Aripiprazole Monohydrate during the year.

R&D infrastructure

The Company further strengthened R&D capabilities by adding scientific personnel, technological equipment and an additional Lab. The Company strengthened the R&D team with the addition of experienced scientists who brought new capabilities to the group. Similarly, on the analytical and regulatory teams, the Company has very efficient and qualified people. On the equipment front, the Company added automated machinery, analytical tools like hygroscopic determination equipment, etc. To its already strong equipment range, during the year, the Company added additional equipment on the analytical and safety front. FBRAM is used for the determination and the development of polymorphs and crystallinity of the product which helps in designing and developing. Analytical instruments like LCMS, ICPMS, XRPD help in improving research and product quality parameters management. The Company has also created additional spaces for starting new areas like separation sciences, puri_cation lab.


High value molecules involving complex chemistry, automation, upgradation of testing equipment, digitisation and knowledge of complementary new technologies remain the key focus areas of the team. Significant investments are dedicated for further enhancing safety aspects like online monitoring and testing. These focus areas will result in development of unique products and processes to enhance customer satisfaction.


FY 2022 witnessed continuous churns and disruption in supply chain management (SCM) across the globe led by Geo-political conflicts and uncertainty Continued localised COVID-19 related disruptions leading to manpower shortage Global Force Majeure/Plant shut-downs in world?s prime manufacturers of liquid solvents Coal Shortages owing to falling mine output due to rains and floods across Asia, this led to 500% jump in coal prices worldwide from Nov 2020 to Oct 2021 Sea container shortages and Port congestions leading to higher freights and longer lead-times Protracted airfreight lead-times owing to absence of passenger aircrafts Disruptions in US led by adverse weather and export controls on key chemicals

Major increase in crude prices Above events ensued in increased prices of basic chemicals, solvents, and metals

To overcome these challenges and to ensure smooth business functioning, the Company undertook several measures. It forecasted requirements in advance to cover important materials and stocked up critical items in external and customs bonded warehouse. Wherever prices were volatile, the Company took forward contract coverage. The Company also made volatilities and uncertainties transparent across the organisation, to make the supply chain more responsive, enabling quicker decision making and initiation of counter measures. The Company continued to reduce dependency on China for sourcing Key Starting Materials (KSM) and intermediates for most APIs.

Key Initiatives of FY 2022

The Company is in the process of digitising logistics procurement and procure to pay functions by adoption and implementation of PRM360 and Gocomet. Procurement Process have been made completely transparent enabling equal opportunity to all the vendors by competing in a transparent e-auction through PRM360 Portal which helps to nurture competition amongst vendors to exploit the best price. Over 90% procurement is done through PRM360.

Gocomet has enabled tracking of outbound shipments and provide better trackability and visibility, thereby better customer service.

The Company is committed to price discovery and increasing visibility through digitisation of its supply chain and will continue to de-risk the supply chain by qualifying two or more vendors for KSMs.

The Company undertook vendor de-risking for key products like Levo_oxacin, Sotalol, Entacapone, Rabeprazole, Rivaroxaban, Mirtazapine. The Company also undertook Indian vendor qualification for Cipro_oxacin and Entacapone in its effort to reduce China dependency.

There was a protected impact of price increase due to stocking up price volatile raw materials.


Though it may not possible to eliminate China from supply chain, the Company is committed to reduce its direct sourcing dependency from China. Currently the Company is dependent on China for 13% of its raw material and aims to further reduce this dependence to less than 10% by FY 2023. The Company has developed qualified sources from India, Europe and US so that multiple sources are available making the supply chain sustainable. The Company is constantly working to shorten the supply chain and develop geographically closer sources.

The Company is committed to price discovery and increasing visibility through digitisation of its supply chain and will continue to de-risk the supply chain by qualifying two or more vendors for KSMs. The Company is also working to develop a sustainability framework for assessing key vendors. For better price prospecting the Company is working on mapping supply chain pathways and tracking cost drivers for cost control.

Digitalisation of supply chain is also a key focus area with the aim to make the entire purchasing process non-physical and development of B2B procure to pay software. The process has been accelerated substantially from the outbound logistics side and into the inbound procurement side.

The Company remains committed to enhancing procurement effectiveness and efficiency. For in-depth understanding of supply chain, the Company is powering up capacities using CMO model and supply chain mapping and pathways. This enables to map and monitor all its supplies and touch points and gauge vulnerabilities or dependencies. The Company remains committed to enhance manufacturing capacity in terms of increasing agility and flexibility allowing multi-product production, quick response to changing customer needs and promptly start work in reserve capacity.


Neuland complies with stringent international standards and constantly strives to exceed the customer?s quality expectations. Comprehensive quality management framework and practices ensure strict compliance to all pharmacopoeia and various customer specific requirements. The Company has significantly improved attention to detail by focusing on product and process improvement and enhancing quality. Policy implementation is prompt and at times ahead of legislation due to focused monitoring of possible direction of regulations and standards. In the course of its operations, the Company has cleared over 35 regulatory authority inspections, including 15 FDA audits. On an annual basis close to 150 customer audits are conducted. During the year, at unit III, successful regulatory inspection was completed and the Company expanded laboratories with one new world-class QC laboratory built for quality control. In terms of Proctor graphics systems, the Company switched from lab solution to Empower 3, a thorough software to mitigate any communication gaps.

Key Initiatives of FY 2022

The Company continued to invest in quality control and upgrade its product and process quality during the year under review.

LIMS for Quality Control Laboratories across three sites Laboratory Information Management System (LIMS) implementation in the labs will allow automate workflows with no physical interventions, integrate instruments, manage samples, effectively manage associated data and reduce the need for physical paper. This will become fully implemented in FY 2022-23.

Document Management System

Document Management System will be implemented to achieve accuracy and paperless Quality Assurance . The Document Management System that will help capture, track and store electronic documents and digital images of paper-based content.

First Time Right through robust Technology Transfers

First time right is one of the top priorities for the organisation. First Time Right through robust Technology Transfers, structured protocol checklist to reduce product/process failures during scale-up Quality assurance drives this process with the critical process parameters, process controls, materials nature, etc. It also assists in selection and mapping of equipment on utilities at the scale in the sites. The first-time right concept benefits all technologies in both CMS and GDS, in terms of robust chemistry methods, better results as it is based on requirements given by the customers and R&D, preparation process, lab assurance, etc.

Reduction of customer complaints Implementation of Project Management Systems enabled 40% reduction in customer complaints year on year, with further efforts from the quality assurance and quality control team for a greater reduction in complaints. The automated process involved communication with customers, investigation, root cause analysis and corrective and preventive action.

Scalability of QA, QC teams in order to meet the CMS customer services Customer requirements differ from one customer to another. Hence, it is imperative that the team possesses the right skill set to communicate, effectively and periodically, with the customer to understand requirements and to communicate the Company process in terms of analysis, documentation, turn around time, quality assurance and adherence to quality agreement. The Company provides adequate training sessions to enhance customer communication to identified employees.

To enhance the quality of investigations

Investigation plays a vital role in achieving robust root cause analysis, investigation management, effective corrective and preventive action and quality of reports. As most products are continuous products, it is imperative to complete the investigation promptly with timely identification and fixing of the root cause so that the batches in the pipeline do not fail in the same aspect. Also the process of failure investigation needs to be robust and prompt, especially in view of regulatory inspections like USFDA, to maintain repute. The management weekly monitors process robustness, investigation status, report documentation, and effectiveness of scientific rational, CAPA. A senior professional has been recruited as a single point of contact on the quality domain reporting to the head of Quality, for effective process reporting for all failure investigations and seamless coordination between R&D, manufacturing, QC, QA and TSD.

Expansion of document archival

As per guidelines, all GMP documents and development products life cycle reports are required to be stored for min of six years. The Company is in process of establishing a facility for document storage at Unit III.


Round the clock 24x7 GMP compliances across the sites and all-time inspection readiness Robust technology transfers allowing First Time Right processes Scientifically based closure of failure investigations with sufficient reasoning Aggressive TAT (Turn Around Time) enhancing QC efficiency for analysis Reduction of errors (Lab OOS & Lab incidents) Strengthening of Quality Units with Quality of Manpower Scale people capabilities to meeting rising expectations from CMS customers


With the emergence of COVID-19, IT has gained center stage and became a business enabler function. The robust IT framework at Neuland has enabled effective and seamless workflow throughout offices and operations worldwide. IT modernisation has made the organisation more cohesive and closely connected. Data protection and confidentiality being critical the Company works with innovator companies, significant investments in IT are imperative.

IT Infrastructure

COVID-19 pandemic imposed an unprecedented challenge mandating the use of face recognition along with a temperature control system. This being the safest and fastest method of security such systems were implemented across all locations. Virtual Desktop Infrastructure (VDI) was implemented for up to 90% of the organisation to improve hybrid working and security. The need emerged as the data can be stored safely in one central location and also enables the users to have remote access

Enterprise Application

The Company is working on improving its Resource Management which includes planning, scheduling, and allocating the resources to the right project at the right time to maximise profitability. The Company undertook IFC Automation to improve the governance process. The Company implemented contract workforce management for contractors in all locations to efficiently manage attendance and payroll of the contract workforce.

Data Security

Vulnerability Assessment and Penetration Testing (VAPT) was conducted for businesses wherein critical devices were tested for the resilience of IT infrastructure enabling identification of the possible route attackers could use to break into the Company network. Security Information and Event Management (SIEM) was implemented for the early detection and identification of potential threats. The Company upgraded bandwidth across locations by 100% of the previous year. Other initiatives include effective implementation of network monitoring tool, centralised cloud-based WIFI infrastructure, and email spam and phishing _lter.


Committing to the Hybrid Multi-Cloud Adoption SAP BPR, Upgrades, and Customer Relationship Management (CRM) systems Data-Driven Digital Enterprise

Digitisation and intelligent automation initiatives to drive business growth Strengthening Cyber Security posture– o Advancing XDR (Enhanced Detection and Response) Implementation o SIEM and NSX (VMwares Network Virtualisation and Security Platform) implementations o Adoption of Zero Trust Framework - PIM (Privileged Identity Management) / PAM (Privileged Access Management) Reinforcing privacy to protect customers, clients, partners, and employees Building Resilient IT Operations with robust Business Continuity Plans Enabling Remote Quality Audits with wearables and technology


At Neuland, compliance with all EHS laws is a business imperative. The Company seeks continuous improvement in performance to follow the best practices in global pharma industry. The Company aims to contribute to the common effort to protect workplace environment and integrate EHS into business planning and decision making. The guidelines on Occupational Health and Safety have been upgraded to IS0 45001 standards from OHSAS 18001, in addition to ISO 14001 (Environment Management Systems). Neuland had published its first sustainability report for FY 2020 on 12th June 2021 while that for FY 2021 was published on 30th July 2021.

Environmental Management

Effluent treatment is done through zero liquid discharge system facility across all the three units. R&D is provided with sewage treatment plant and the entire treated water is being used for utility make up.

Emissions control is being handled through regularly operated air pollution control system like double stage scrubbers and ensuring emissions well below the presided standards. Online Monitoring connectivity analysers including 3 digital flowmeters, VOC and IP Cameras to monitor the pollution values. Hazardous waste management is being implemented and handling through collection, storage, transportation, and disposal as per the rules 2016 All units are ISO 14001:2015 and ISO 45001:2018 certified.

Storm water drain system and sufficient storage collection tank for collection of first run off rainwater and fire water run-off have be developed in the sites

ETP Lab facilities on site.

Solvent recovery plant for recovery of spent solvents. Recovered solvents are being used for manufacturing.

Storage of liquid chemicals in warehouse on concrete floor with leach ate / spillage collection pit.

Process Safety

Review and ensure the Technology Transfer document is adequate (Thermal stability, Powder Safety studies and OEL reports) Evaluating the Management of change stage wise and recommending the action items for specific changes Advising the R&D and technology transfer team for defining the basis of safety for generating the thermal stability studies and powder safety data Conducting the HAZOP/HIRA/ risk assessments for the projects with CFT?s and prioritising the risk using the risk matrix, based on suggestion from the team.

Preparation of the risk mitigation plan and verification of HAZOP/HIRA/ Risk assessments recommendations compliance closure at the workplace Ensuring incorporation of all the safety recommendations and conducting awareness on HazOp/HIRA Recommendations in the BMS before starting a batch Monitoring the critical operations for EHS compliance including NBL, Palladium, High Toxic chemicals handling like DMS ethyl chloroformate etc. at shopfloor

Water conservation

Water management focuses on good water accounting practices for support systematic water footprint. 100% recycling of E_uent reverse osmosis water for utilitys make up and rejected water for multiple effective evaporator (MEE).

Recovery of steam condensate water and utilisation in the boiler. High pressure pumps have been installed for steam condensate, resulting in increase in recycling. Applying principles of reuse, recycle and recovery for manufacturing activities wherever applicable. Reduction of water consumption is taken as objective under environment sustainability.

Effluent management

Effluents are being segregated at source: High TDS effluent and low TDS effluents based on its TDS and COD values. Dedicated effluent collection tanks at manufacturing blocks.

Above ground effluent transferring system is implemented from production blocks to effluent treatment facility. Dedicated environment lab facility is available at all units. Effluent samples are analysed on daily, weekly and monthly basis.

High TDS effluents are being collected in dedicated collection tanks. Pre-treated effluents are treated into stripper column for recovery of organics. Separation of organics disposed to cement plants for co-processing. Stripped effluents are treated in MEE followed by ATFD. ATFD salts are disposed to TSDF/ pre-processing.

Low TDS effluent are treated in the following sequential methodology:

(i) primary treatment - clarification,

(ii) Secondary treatment- biologically activated sludge treatment, and

(iii) Tertiary treatment- activated sludge and pressurised sand filtration system followed by UF and RO Membrane System.

RO Permeate is reused for cooling tower makeup and RO reject is being treated in MEE system.

Hazardous waste management

Hazardous and other waste are handled as per hazardous waste management rules 2016. Hazardous waste generated from various production activities, solvent recovery plant and effluent treatment plant, is collected into MS drums/ double layer polythene bags and transferred to hazardous waste storage area along with proper labelling on the containers. Only trained people are allowed to handle hazardous waste. It is stored under the roof with concreate floor and leachate collection pit. It is disposed to PCB-authorised vendors for co-processing or at AFR facilities for pre-processing. Hazardous waste annual returns is submitted to TSPCB in Form-4. Bio Medical waste is disposed to TSPCB authorised Common Bio-medical Waste Treatment Facility (CBWTF).

Emissions management

Stack Emissions are monitored on monthly basis by MoEF&CC approved laboratory and reports are submitted to TSPCB. VOC level at workplace is closely monitored. Vent condensers or nitrogen blanking system were provided to solvent storage tanks. Solvent emissions are controlled by transferring solvent by using pumps, primary and secondary condensers to the reactor vents and mechanical seals to reactors and solvent handling pumps. Multistage solvent recovery plant is operated by using multi-stage utilities for improving efficiency.

EHS performance monitoring

Conducting internal audits and managing the customer audits and provide timely responses on the questionnaire and corrective and preventive actions Conducting safety training for employees, and temporary and permanent contractors

EHS risk register tracking of compliance of its recommendation?s implementation and closure throughout unit Preparation of safety CAPEX and OPEX requirements Responsible for execution and timely closure of the projects Permit to work system for all non-routine activities Coordinating with the factories department for all statutory and legal requirements on timely basis Regular site inspection for unsafe situations identification, hand holding for rectifications, advising for CAPAs closers etc. Reviewing the new/renovation projects, layouts, facilities and suggesting the recommendations from EHS aspects Assisting the CFT?s to investigate incidents and identify the root cause Ensure the effectiveness of corrective and preventive actions at workplace Managing all potential emergency scenarios through mock drills on regular basis Conducting promotion activities like National Safety Day, Road Safety Day, Environment Day


The Company has devised comprehensive internal control systems commensurate with the size and nature of business and industry in which it operates. The internal control systems are built in compliance with applicable laws and statutes. The systems ensure adequate assets safeguard and efficient productivity at all levels. The control systems are crucial for securing sensitive data, easing out audit process, maintaining proper accounting controls, monitoring operations, conservation of assets, preventing frauds and errors, executing authorised transactions, safeguarding assets from unauthorised use and ensuring compliance with corporate policies.

The empowered authority is allowed to approve contracts and expenditure as per defined limits. Processes to articulate annual and long-term business plans are clearly defined in the systems along with periodic review. The effectiveness of the internal control over financial reporting (as defined in Clause 17 of SEBI Regulations 2015) was assessed by the management as of March 31, 2022. The audit committee evaluated internal financial controls (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), as on March 31, 2022, and concluded the systems to be appropriate and operating effectively. The financial statements included in this annual report have been audited by MSKA & Associates, the statutory auditors of the Company who have issued an attestation report on the internal control over financial reporting (as defined in section 143 of Companies Act 2013).

The internal auditors, Ernst & Young LLP, are responsible to oversee and carry out internal audit of the Company?s activities. The Audit plan along with the audit process is defined on an annual basis in consultation with the Auditors and post approval by the Audit committee. The internal audit is directed towards the review of internal controls and risks in the Company?s operations such as manufacturing, R&D, supply chain management, accounting and finance, IT processes, EHS following international practice rules.

Business specific compliances such as quality management, production management, information security, etc. are periodically reviewed and audited by specialised third party consultants and professionals. The audit committee reviews the management reports and audit reports submitted by internal auditors and statutory auditors. Improvements and corrective actions as required are also suggested by the Audit committee. The audit committee and the statutory auditors discuss and review the adequacy of internal control systems. Major observations from this meeting are discussed with the board of directors periodically.

The Audit Committee concluded that Company?s internal financial controls were adequate and operating effectively, based on its evaluation (as defined in Section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), as on March 31, 2022.


Effective risk management process is crucial for achieving strategic and operational goals amidst an ever-evolving environment. The Company acknowledges that certain intrinsic risks are inherent and strives to strike a balance between managing risk and exploiting opportunities. During the year, the Company undertook an ERM enhancement program to ensure a comprehensive system for identifying risks and monitoring mitigation plans. The board approved a new ERM policy which is comprehensive in terms of its purview. The risks are being rated on the basis of severity and likelihood, while also taking into consideration the dimension of velocity. The entire program is being digitised which will allow for scaling the program across the individual units (R&D, Manufacturing, Sales Offices) and active monitoring of risk and mitigation plans. During the course of the enhancement program, the risk register has been expanded to cover more risks which emerged through 5 Risk Identification Workshops held across the organisation. Various managers at different levels are responsible and accountable for handling different risks. Identification and prioritisation of risks as per their likely impact is conducted through a formal monitoring process at the unit and Company level. Post initial assessment key responsibilities are handed down to select managers, and implementation of risk reduction actions and appropriate internal controls is ensured. Some important risks are enlisted below along with steps for mitigation. The list is strictly indicative and not exhaustive.


COVID Management:

The Company ensured 100% covid vaccination for employees. To encourage employee family members to take the vaccination, the Company empanelled with corporate hospitals and provided vaccination for employee?s family. The Company conducted COVID antibody testing for selective group for screening purpose and to plan booster dose vaccination on priority. The Company designed and implemented the following protocols: 100% completion of Covid vaccination for all employees COVID awareness sessions Distribution of immune boosting medicines like vitamin C, multivitamins, pocket sanitizers and masks to all employees COVID diet chart for adults displayed at canteen and communication on kids diet chart shared to employee families Empaneled with corporate diagnostics for RTPCR/RAT testing Pulmonologist consultation Psychological support for positive cases and daily health monitoring by OHC team

Preventive medical check-ups:

The Company promoted medical check-ups for identification of illnesses /disease well in advance followed by implementing preventive measures and mitigate plans to reduce health risk. The preventive medical check-ups were performed twice in a year. The Company also worked to identify health abnormalities, detect newly diagnosed diseases followed by health awareness, counselling

Medical Monitoring programs:

All employee records were reviewed post medical check-ups and monitored abnormal health of employees followed by communication to employees through specialised formats. Employees with chronic medical conditions are monitored periodically, with medical reports review system in place. The Company also conducted several wellness, awareness and screening programs based on the results of medical checkup.

Vaccination drives

The Company successfully conducted following vaccination drives: Hepatitis B vaccine inoculation for first aiders, medical team, bio medical waste handlers Typhoid vaccination for food handlers COVID vaccination 100% completion Encouraging employees to take Prevenar vaccination (1st phase age>45)

CSR Activities:

Oxygen concentrators distribution Medical kits donation to Government hospitals Masks and sanitizers distribution to the villagers and front-line warriors Voluntary Blood Donation Camps

Sustainable Health Management programs: The Company undertakes activities like on-site yoga and psychologist, cardiologist, dietician sessions.

Establishment of Onsite Speciality Clinics: The Company facilitated specialty clinics on-site.

Tuberculosis Elimination Programs:

Awareness programs on Tuberculosis elimination were conducted to the employees as part of National Tuberculosis Elimination program initiative of the Government.

Occupational Health related trainings:

The Company conducted various trainings on Occupational health hazards, personal hygiene, strengthening COVID protocols and health management at workplace, health monitoring at workplace, adequate first aid trainings and food safety at workplace.

Food Safety at workplace: Periodical food sample testing to ensure good quality of food is being served to employees. Both drinking water and ground water testing to ensure water quality. Personal hygiene training to canteen crew. Personal hygiene training and physical examination of canteen crew.

LCMS: Liquid chromatography–mass spectrometry (LC–MS) is an analytical chemistry technique that combines the physical separation capabilities of liquid chromatography (or HPLC) with the mass analysis capabilities of mass spectrometry (MS) ICPMS: Inductively coupled plasma mass spectrometry (ICP-MS) is an analytical technique that can be used to measure elements at trace levels in biological fluids.

XRPD: XRPD in pharma quality control is primarily concerned with identifying crystalline material, important in regulatory purposes or during development, as well as the different ‘_ngerprint" polymorphic forms of a substance.