Strides Pharma Science Ltd Management Discussions.

FY 2020-21 was a tough year for us with COVID-19 causing significanTheadwinds in our operating environment. We witnessed lower footfalls at pharmacies and lower elective surgeries in hospitals throughout the year, this led to lower prescription rates specifically in the US, UK and Europe. While we saw tepid demand for certain products in the acute portfolio, the winter portfolio was a complete washout in FY 2020-21 due to the absence of the flu season.

The disruptions in manufacturing operations including intermittent shutdowns at our facilities during the first wave had significantly depleted our safety stocks on many key products. Therefore, we had to add shipments in the second half of the year to maintain customer advocacy and minimise the failure to supply (FTS), despite very high freight rates. The year also saw significant cost escalations, attributable to disruptions caused by COVID-19. Despite a tough operating environment, we reported a healthy performance across all businesses in FY 2020-21. We continue to pursue a people-first approach, and the well-being of our employees remains our top priority.

We acknowledge the critical roles our teams played during the year to ensure business continuity.

In the near term, the operating environment continues to be challenging, ambiguous and uncertain, as we continue to adopt the people-first approach, prioritising health over profit. We believe that the resilience within the organisation, the strength of our product portfolio, and our presence in key markets will help us navigate these turbulent times. We are committed to drive high-operational performance and generate superior cashflows and return on capital employed.

Economic environment


The year 2020 saw the global economy suffer an unimaginable setback as the COVID-19 pandemic impacted all countries of the world. Economic activities came to a standstill for several months following complete lockdown or restricted mobility imposed by governments to flatten the COVID-19 curve. According to the International Monetary Fund (IMF), the global economy underwent a contraction of –3.3% during 2020.

Although the contraction in the global economy was unprecedented in living memory, extraordinary policy support by governments and central banks prevented significant economic and social impacts.

The US economy was severely impacted by the virus outbreak as millions of people lost lives and livelihood. In the initial months there was large-scale confusion among members of the medical fraternity and the federal government as to how to adequately ramp-up the health infrastructure, fast-track research on effective vaccines and save lives. US payrolls data suggested unemployment continued to escalate as businesses across sectors had to be closed down in order to curb the spread of the virus.

In March and April 2020, the U.S. Government passed three relief packages and one supplemental package, totalling approximately US$2.8 Trillion. The U.S. Federal Reserve also took a series of substantial monetary stimulus measures to complement the fiscal stimulus of the government. The Feds stimulus measures for 2020 fell into three basic categories: interest rate cuts, loans and asset purchases, and regulatory changes. These initiatives helped ensure that the U.S. economy had enough liquidity to combat the crisis and fast-track growth. The Federal Government cleared an additional US$1.9 Trillion COVID-19 relief package in March 2021.

In large parts of Europe precautionary social distancing and stringent lockdowns in response to surging COVID-19 cases triggered an unprecedented collapse in economic activity. EU nations focused on four priority areas as their first COVID-19 response initiative in April 2020: a) limiting the spread of the virus; b) ensuring the provision of medical equipment; c) promoting research for treatments and vaccines; and d) supporting jobs, businesses and the economy. EU leaders endorsed a €540 Billion package of three safety nets for workers, businesses and member states. The package comprised €100 Billion support to mitigate unemployment risks in an emergency (SURE), €200 Billion pan-European guarantee fund for loans to companies (European Investment Bank); and €240 Billion as pandemic crisis support for member states (European Stability Mechanism). The European Union has also agreed to begin distributing the Next Generation EU funds to cushion a large section of the vulnerable population from the economic impact (escalating personal debt, high rate of unemployment and loss of livelihoods) of COVID-19. These measures are expected to further boost economic growth and provide sizable support to trading partners.

Emerging economies have also announced various stimulus measures to support their economies, which were badly hit. However, the COVID-19 global recession and economic policy response have triggered a surge in debt levels in emerging markets. The advanced economies are expected to recover from the COVID-19 crisis faster than most emerging market economies, reflecting their earlier access to vaccinations and greater fiscal room to maintain supportive macroeconomic policies for a longer period time.


The strength of the recovery essentially depends on a rapid rollout of effective vaccines worldwide and the extent of support measures. The world is now looking towards an uncertain and fragile recovery, especially when we consider the more devastating impacts of the second and third COVID-19 waves.

The recovery is also divergent across geographies, with the US, EU, Japan and other advanced economies recovering at a faster pace, while middle-income and low-income economies in Asia and Africa are still grappling with COVID-19-induced headwinds. Inflationary pressures are also mounting on both advanced and emerging economies, which may limit the fiscal space left for central banks to sustain an accommodative stance for a prolonged period of time.

The IMF calls for a tailored approach to the crisis with policy responses attuned to the severity of the pandemic, the pace of economic recovery, and the social and economic capability of individual countries. With escalating debt levels, developing countries are already hamstrung. Therefore, they will need to exercise extra caution through an uncertain period, especially now that the resurgence of the virus and a delay in vaccine rollout has compounded their problems.


India was also severely impacted by the COVID-19 pandemic in 2020. The sluggish growth of 2020 was compounded by restrictions imposed by the government during the lockdown to curb the spread of the virus. The manufacturing and services sector (especially contact intensive sectors such as leisure, travel and tourism) were severely impacted. The countrys GDP declined by 24% during the first quarter of FY 2020-21.

To prevent further downslide, the Government of India announced fiscal and monetary stimulus worth 10% of the GDP. The Reserve Bank of India (RBI) took various measures to ease the liquidity constraints in the economy, protect Micro, Small and Medium-sized Enterprises (MSMEs) and the most vulnerable sections of society.

If we consider the entire stretch of FY 2020-21, Indias GDP contracted by 7.3%. However, it must be emphasised that the countrys economy moved into positive growth territory in the last two quarters of the year, aided by the fiscal and monetary stimulus measures of the Government of India and the Reserve Bank. The fiscal stimulus by the Government of India was reinforced by a forward-looking Union Budget for FY 2021-22, with emphasis on: a) health and well-being; b) physical and financial capital and infrastructure; c) inclusive development for aspirational India; d) reinvigorating human capital, innovation and R&D; e) and minimum government and maximum governance.


The outlook for the Indian economy will largely depend on how fast and effectively the country can manage the prevalent COVID-19 infections, which has forced localised lockdowns and restricted mobility in several states of the country. This has again impacted the performance of the manufacturing and services sector, which were beginning to recover from the first COVID-19 impact post Q3 of FY 2020-21.

However, aggregate supply conditions in the economy are supported by the resilience of the agricultural sector. The record food grains production and buffer stocks in FY 2020-21 provide food security and support to other sectors of the economy in the form of rural demand, employment and agricultural inputs and supplies, including for exports. The forecast of a normal monsoon by the India Meteorological Department (IMD) is likely to sustain rural demand and overall output in the current fiscal year, while also taming inflationary pressures.

Aggregate demand conditions are likely to see a temporary dip, depending on how the COVID-19 scenario unfolds. With restrictions and containment measures being localised and targeted, businesses and households are learning to adapt. According to the RBI the disruption in the manufacturing sector so far is minimal and consumption demand is also holding up. Consequently, the dent to aggregate demand is expected to be moderate compared to a year ago.

The high-frequency indicators (GST collections, Railway freight, power consumption, E-way bills) of the economy are positive, which may strengthen further in the second half of the fiscal year. However, there are huge downside risks, as the vaccination programme and healthcare infrastructure of the country are under significant stress. The government is assessing on a real-time basis the impact of the second wave on macro-economic and financial conditions.

Industry development

Global pharmaceutical industry

The global pharmaceutical market size in 2020 was estimated at US$1.27 Trillion and is expected to expand at a compound annual growth rate (CAGR) of 3-6% to US$1.6 Trillion by 2025 (this outlook excludes impact of spending on COVID-19 vaccines). Key factor driving global medicine spending will be a stronger growth of pharmerging markets and the consistent launch of high-end specialty innovative products in developed markets. An offsetting aspect will be the slower growth in developed markets as losses of exclusivity for original brands outweigh growth from new products.

The pharmaceutical markets in the developed world grew at ~4% CAGR from 2016 to 2020 and are estimated to grow at about 1.5-4.5% CAGR to reach US$1.13-1.16 Trillion by 2025. This will be driven by new treatment adoptions, offset by patent lifecycles and competition from generics and biosimilars. These are expected to continue to be the primary factors, influencing medicine spending and growth of the pharmaceutical markets in developed countries.

The pharmerging markets have reported a growth in spending at ~7.4% CAGR between 2016 and 2020 to reach US$290.8 Billion in 2020. Spending across major pharmerging markets is likely to grow at 7% to 10% through 2025, driven by the largest countries — China, Brazil, India and Russia.

COVID-19-led disruption had handicapped the global markets. The pharmaceutical industry witnessed multiple challenges ranging from supply chain disruption, product launches and uptake, lower footfalls at pharmacies and hospitals and slowdown in R&D activities among others.

Challenges also brought forward opportunities and it is rightly applied to the pharmaceutical industry which is now living through the impact of the COVID-19 pandemic and evolving under evolving circumstances. High-tech implementations and investments in research & development in many companies have started to improve their efficiency. Pharma companies worldwide focused on refining the production cycle with Artificial intelligence, Machine Learning, cloud technology, and other digital investments, resulting in benefits like help identify appropriate drugs for specific conditions, run budget-friendly trials for drug design, identify right times to start and change medical treatments, gather health data more efficiently, and many more advantages.

The global pandemic had varied impact on spending across countries in 2020. This trend is expected to continue through to 2022 before returning to historic patterns. The developed markets saw recovery towards the end of 2020 (variability of +/- 10% in specific countries). The year 2021 will see rebound spending (including COVID-19 vaccines) and exceed the pre-pandemic outlook through 2025. Moreover, pharmerging markets saw disruption and gave differentiated response. Overall demand for new therapeutics and vaccines for COVID-19 gained momentum. Going forward, global spending on COVID-19 vaccines is estimated to be US$157 Billion over the next five years.

Global pharmaceutical market growth
(US$ Billion)
Region 2020 2016-2020 CAGR 2025 2021-2025 CAGR
Developed 959.5 3.8% 1130-1160 1.5-4.5%
Pharmerging 290.8 7.4% 415-445 7-10%
Lower income countries 15.0 3.9% 18-22 3-6%
Global 1,265.3 4.7% 1580-1610 3-6%
Source: IQVIA Market Prognosis

Global pharmaceutical market 2025 – Product type

(US$ Billion)

Region Original brands Non-original brands Unbranded generics Other
Developed 795-825 170-200 48-52 90-110
Pharmerging 125-155 140-170 75-95 40-70
Lower income countries 5-9 6-10 2-4 1-2
Global 940-970 330-360 120-150 145-175
Source: IQVIA Market Prognosis

Specialty medicines

Specialty medicines are those which treat chronic, complex and rare diseases, and while they have a range of characteristics—including the complexity of disease management or distribution—the most commonly noted attribute is that they are more expensive than other more traditional medicines. Specialty medicines will represent nearly half of global spending in 2025 and almost 60% of total spending in developed markets. The ten largest developed countries and other high and upper middle-income countries are witnessing consistent increase in their spending share on specialty medicines.

Over the next five years, an average of 54-63 New Active Substances (NAS) are expected to be launched globally every year, totalling 290-315 over five years. This scenario is expected to contribute to a rising number of new medicines.

Key therapeutic areas

In the next five years, oncology and immunology are forecast to grow by 9-12% CAGR emerging as the two leading global therapy areas.

Top 20 therapy areas in 2025 in global spending (5-year CAGR forecast) (US$ Billion)

Generics market

Generics have witnessed a steady development path for over three decades. The global generic drugs market was valued at US$387.92 Billion in 2020 is expected to grow at a CAGR of 5.7% till 2030 (Source: http://www.

As the market for simple generic products has become saturated, biopharma companies are turning their focus to complex generic drugs. These drugs deliver more value to patients by addressing additional unmet needs which enable them to achieve market differentiation and opportunities for higher margins. A complex generic has a complex active ingredient, complex formulation, complex route of delivery, or complex drug device combinations.

Developed markets

Developed markets – Pharmaceutical spending and growth (US$ Billion)

Region/Country 2020 2016-2020 CAGR 2025 2021-2025 CAGR
USA 527.8 4.2% 605-635 2-5%
EU5 180.4 4.4% 215-245 2-5%
Germany 54.9 5.3% 65-85 3.5-6.5%
France 36.3 2.4% 43-47 1-4%
Italy 33.3 4.2% 38-42 2-5%
UK 30.2 5.3% 38-42 2.5-4.5%
Spain 25.7 4.6% 28-32 1.5-4.5%
Japan 88.2 (0.2)% 75-95 (2)-1%
Canada 22.8 4.8% 28-32 2-5%
South Korea 16.2 6.8% 18-22 4.5-7.5%
Australia 11.8 3.3% 13-17 1-4%
Other Developed 112.3 4.2% 125-155 2.5-5.5%
Developed markets 959.5 3.8% 1130-1160 1.5-4.5%

Source: IQVIA Market Prognosis

The US

USA, the worlds largest pharmaceutical market saw a ~4% CAGR from 2016-20 to reach US$527.8 Billion. This market is expected to grow at a 2%-5% CAGR to reach US$605-645 Billion by 2025. At the net level, rising discounts and rebates are expected to slow spending growth over time. Additionally, ongoing market dynamics around the use of medicines, the adoption of newer treatments, the impact of patent expiries, and new generic or biosimilar competition will contribute to historically slow market growth in the US for the next five years.

European Union (EU5)

The top five European Union (EU5) markets grew at a 4.4% CAGR from 2016-20 to reach US$180.4 Billion and is projected to grow at about 2-5% CAGR to US$215-245 Billion by 2025. Medicine spending in the top five European markets is expected to increase by US$35 Billion over the next five years, registering the same increase as in the past five years but with substantial shifts in the drivers of growth. Generics, including biosimilars, are expected to add over US$31 Billion to the market size over the next five years, as a range of patent expiries, and the maturation of biosimilars contribute to lower overall spending.


The market has witnessed marginal decline of 0.2% from 2016-20 to reach US$88.2 Billion; and is projected to progress at around (-2)-1% CAGR to US$75-95 Billion by 2025. In 2020, the market was impacted by both the COVID-19 pandemic and price-cuts, which took effect in April 2020. Going forward, rising spending on patent-protected original brands coinciding with policies will encourage a shift to generics for older medicines.


The Australian market grew by 3.3% from 2016-20 to reach US$11.8 Billion and is projected to grow at around 1-4% CAGR to US$13-17 Billion by 2025. The major factors likely to drive the market growth during the forecast period are the growing burden of chronic diseases and the rising geriatric population, along with the rising investments in research and development expenditure for novel therapeutics in Australia. Generic substitution rates in Australia are lower than most comparable countries, which the government views as an opportunity to promote generic use. The future of generic drug supply via the pharmaceutical benefits scheme (PBS) is important to allow consumers access to medications at the lowest possible price and to provide space for PBS listing of new and expensive drugs.

In January 2021, the Therapeutic Goods and Administration approved the COVID-19 vaccine developed by Pfizer and BioNTech. In addition, the Australian government has gone under nearly four agreements where it has invested around AUD 3.3 Billion to support the supply of vaccines in the country.

Pharmerging markets

Pharmerging markets – Pharmaceutical spending and growth (US$ Billion)

Region/Country 2020 2016-2020 CAGR 2025 2021-2025 CAGR
China 134.4 4.9% 170-200 4.5-7.5%
Brazil 28.7 10.7% 43-47 7.5-10.5%
India 22 9.5% 28-32 7.5-10.5%
Russia 17.5 10.8% 33-37 11-14%
Other Pharmerging 89.1 9.6% 120-150 8.5-11.5%

Source: IQVIA Market Prognosis


The Chinese market grew by 4.9% between 2016-20 to reach US$134.4 Billion and is projected to grow at around 4.5-7.5% CAGR to US$170-200 Billion by 2025. Chinas growth remains the largest in this group of countries, driven by a shift from the use of traditional Chinese medicines to new medicines. Over the next five years, the Chinese government policies will update the national reimbursement drug list (NRDL) more frequently, hence contributing to a greater share of new original medicines being reimbursed, resulting in higher levels of spending.


Africas pharma market is complex and demonstrates an industry-leading growth pattern. The African pharma market, valued at US$24 Billion in 2019 and expected to grow to US$45-65 Billion by 2030. It is driven by increasing urbanisation and the rapid expansion of primary healthcare, offering significant opportunities for pharmaceutical companies. Africa remains one of the most underpenetrated pharmaceutical markets in the world and is poised for growth in the coming years. 5 of the 12 fastest-growing economies in the world are in Africa. Rising industrialisation and urbanisation are leading to a rise in the per capita income. 26 of Africas 54 countries have achieved middle-income status. Increased penetration of health insurance is also taking place in many high-growth countries, such as Kenya.

About Strides Pharma

Incorporated in 1990, Strides Pharma Science Limited (Strides), listed on the BSE Limited and National Stock Exchange of India Limited, is a global pharmaceutical company. We primarily operate in the regulated markets of the US, Canada, the UK, European Union, Australia, South Africa, and the emerging markets of Africa. We also have an institutional business to service donor-funded programmes.

We have built a robust research and development platform at Strides to facilitate 50+ filings annually across the markets where we operate focussing on niche and technically complex offerings.

With eight manufacturing units located in India (Bengaluru—two sites, Puducherry, and Chennai), Singapore, Italy (Milan), the US (Florida) and Kenya (Nairobi), we focus on ‘difficult to manufacture products and reach 100+ countries

We manufacture a wide range of niche and technically complex pharmaceutical products, including a range of dosage forms such as, liquids, creams and ointments, soft gels, sachets, tablets, and modified release dosage formats. We are among the leading soft gelatin capsule manufacturers globally.

Our production units enjoy approvals from various global regulatory agencies such as the US Food and Drug Administration (US FDA), the Medicines and Healthcare Products Regulatory Agency (MHRA), the Therapeutic Goods Administration (TGA), World Health Organisation (WHO) and the Pharmaceuticals and Medical Devices Agency (PMDA).

Regulated markets: Continue to gain momentum

Through this business vertical we reach the regulated markets of the US, other parts of Europe, UK, Nordics, DACH region, South Africa, and Canada. We are a strategic supplier to the Australian market with our preferred supplier contract with Australias pharmaceutical behemoth, Arrotex.

Our revenue from this business segment grew 21% y-o-y from to Rs 22,027 Million in FY 2019-20 to CORPORATE SOCIAL RESPONSIBILITY REPORT FY 2020-21

[As prescribed under the amended rules of the Companies (Corporate Social Responsibility Policy) Rules, 2014 vide MCA notification dated January 22, 2021]

1. B rief outline on CSR Policy of the Company

A t Strides, community development are integral to our sustainability strategy. The Company strives to go beyond compliance and create sustainable value for communities by improving their health, education and employability.

The Policy encompasses our philosophy towards CSR and lays down guidelines and mechanisms for undertaking socially beneficial programmes for welfare and sustainable development of the community at large.


Vision: To actively contribute to the community in which we operate and provide high-quality solutions to the issues impacting their lives, which results in the overall development of the society.

Mission: To innovate for our society, deliver high-quality services and impactful interventions over a long period and ensure sustained relations with society.


The Company has set up dedicated teams for implementing CSR projects. Strides shall undertake its CSR activities, approved by the CSR Committee, through Strides Foundation or such other entity/ organisation as approved by the CSR Committee.

The Companys CSR activities are primarily implemented through Strides Foundation, a Trust set up by the Promoters of the Company as a not-for-profit organisation


Strides CSR initiatives help address socio-economic challenges in the realms of Health and Hygiene, Education, Employability and Disaster Management.

Projects to promote the wellbeing of the society has been developed post a comprehensive Community Need Analysis.

2. The Composition of the CSR Committee as at the date of this report is as under:

# Name of the Director Designation/ Nature of Directorship Date of Appointment as Member of the Committee Number of meetings of CSR Committee held during the year Number of meetings of CSR Committee attended during the year
1 Dr. Kausalya Santhanam Chairperson/ Independent Director Jan 9, 2020 Two meetings (May 20, 2020 and March 31, 2021) Two
2 Homi Rustam Khusrokhan Member/ Independent Director May 18, 2017 Two
3 Arun Kumar Member/ Non-Executive Director May 23, 2014 One (May 20,2020)
4 Deepak Vaidya Member/ Non-Executive Director May 23, 2014 Two

3. W eb-link relating to Composition of CSR Committee, CSR Policy and CSR Projects approved by the Board are disclosed on the Companys webiste on corporate- CSR.html

4. Details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014:

A s per the CSR provisions, Impact Assessment applicable for the Companys CSR projects. However, Strides carried out Impact Assessment for Strides CSR Projects undertaken since FY 2014-15

Impact Assessment was carried through Social Audit

Network, India (SAN India) which is the Indian unit of Social Audit Network, UK (SAN, UK). SAN UK evolved the Social Accounting and Audit framework which helps understand the impact, organisations have on the People and the Planet. It also leads to planning effective and efficient management of social impact within the organisation.

They have used the REES framework for the not Impact Assessment - where R stands for Relevance, E stands for Effectiveness and Efficiency and S stands for Sustainability.

Strides has scored an overall rating of 8.6 out of 10. Criteria and results were as under:

Focus Area Strides Objective Result
Healthcare To provide preventive, promotive and curative healthcare and hygiene facilities Met
Education To improve the quality of education and equip the students to be future ready through life skills and value education Met
Employability To provide necessary skills and education to needy, rural youth to be responsible citizens Met

A s part of the impact assessment, SAN India validated Strides CSR goals to that of UN Sustainable Development Goals (UN SDG). The UN SDG is the blueprint to achieve a better and more sustainable future for all. They address the global challenges faced, including those related to poverty, inequality, climate change, environmental degradation, peace and justice.

Upon consideration, it was derived that Strides CSR goals aligns with 4 UN SDGs viz.,

UN SDG 1 - End poverty in all its form and everywhere; also UN SDG 3 - Ensure Healthcare and well-being for all at all ages;

UN SDG 4 - Quality education for all; and

UN SDG 6 - Ensure availability and sustainable management of water and sanitation for all.

5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any: NIL

6. Average net profit of the company as per section 135(5): Rs1,14,22,00,000
(a) Two percent of average net profit of the company as per section 135(5) Rs2,28,44,000
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years. -
(c) Amount required to be set off for the financial year, if any -
(d) Total CSR obligation for the financial year (6a+6b-6c). Rs 2,28,44,000

7. (a) C SR amount spent or unspent for the financial year:

Amount Unspent (in Rs)
Total Amount Spent for the FY (in Rs)

Total Amount transferred to Unspent CSR Account as per section 135(6)

Amount transferred to any fund specified under Schedule VII as per second proviso to section 135(5)

Amount Date of transfer Name of the Fund Amount Date of transfer
2,48,07,062 - - None None None

(b) Details of CSR amount spent against ongoing projects for the financial year: NIL

(c) Details of CSR amount spent against other than ongoing projects for the financial year:

Location of the project

Mode of Implementation - Through Implementing

Sl. No Name of the Project. Item from the list of activities in Schedule VII to the Act. Local area (Yes/ No). State District Amount (in Rs) Mode of Implementa tion - Direct (Yes/ No) Agency Name CSR Registration Number
1 Arogyadhama Promoting Healthcare including preventive healthcare Yes Karnataka Anekal, Bengaluru 50,00,000 No Strides Foundation CSR00006315
2 RO water plant Providing safe drinking water Yes Karnataka Anekal, Bengaluru 8,40,000 No Strides Foundation CSR00006315
3 Sponsorship to Siva Sakthi Homes (Food and Medicine to the intellectually challenged) Preventive Healthcare Yes Karnataka Bengaluru 10,00,000 No Strides Foundation CSR00006315
4 COVID-19 Response: Donation of Ventilators - 15 Nos Promoting Healthcare including preventive healthcare Yes Karnataka Bengaluru 84,00,000 No Strides Foundation CSR00006315
5 COVID-19 Response: Donation of Hemo Dialysis machine to General Hospital - Ooty Promoting Healthcare including preventive healthcare No Tamilnadu Ooty 6,94,400 No Strides Foundation CSR00006315
6 COVID-19 Response: Donation of food / Survival kits to migrants at Anekal Promoting Healthcare including preventive healthcare Yes Karnataka Bengaluru 4,65,000 No Strides Foundation CSR00006315
7 COVID-19 Response: Donation of masks, Gloves, PPE kit, Sanitisers etc to front line COVID-19 Warriors Promoting Healthcare including preventive healthcare Yes Karnataka Bengaluru 29,58,000 No Strides Foundation CSR00006315
8 Leadership Adoption Program (LeAPS) designed for people transformation and customised for young students of government schools Promoting Education Yes Karnataka Bengaluru 1,20,000 No Strides Foundation CSR00006315
9 Education support - Tata Institute of Social Sciences (TISS) Promoting Education and Employment enhancing vocation skills Yes Puducherry Puducherry 26,57,282 Yes Direct by Company NA
10 Infrastructural support to Dr. Ambedkar Government law college Focus on Education, with an intention to provide quality learning environment Yes Puducherry Puducherry 4,70,230 No Strides Foundation CSR00006315
11 Employability development program with Swamy Vivekananda Rural Community College Employment enhancing vocation skills especially among children Yes Puducherry Puducherry 15,00,000 No Strides Foundation CSR00006315
TOTAL 2,41,04,912
( Amount spent in Administrative Overheads d) : -
(e) Amount spent on Impact Assessment, if applicable : Rs7,02,150
(f) Total amount spent for the Financial Year (7b+7c+7d+7e) : Rs2,48,07,062
(g) Excess amount for set off, if any : The Company does not intend to utilise this provision
Sl. No Particular Amount (in Rs)
(i) Two percent of average net profit of the company as per section 135(5) 2,28,44,000
(ii) Total amount spent for the Financial Year 2,48,07,062
(iii) Excess amount spent for the financial year [(ii)-(i)] 19,63,062
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any -
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] -

8. Details of Unspent CSR amount for the preceding three financial Not Applicable years:

(Db)etails of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): Not Applicable

9. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year (asset-wise details).

Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Date of creation or acquisition of the capital asset(s) Amount (in Rs) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc.
Following capital assets are held by Strides Foundation
Building construction of Primary 31-Mar-15 69,99,999
Healthcare Centre (PHC)
Extension of PHC - for car parking and generator 31-Mar-17 5,00,000
Computers & Printers 31-Mar-15 33,460
Addnl Computers & Printers 31-Aug-17 72,830
Furniture & Fixtures 31-Mar-15 2,23,852 Strides Foundation
Addnl Furniture & Fixtures 31-Mar-17 61,720 Address: Strides House, Bilekahalli, Bannerghatta Road, Bengaluru - 560 076
Medical Equipments 31-Mar-15 16,30,126
Addnl Medical Equipments 31-Aug-17 3,78,000
Addnl Medical Equipments 30-Apr-18 2,77,204
Plant & Machinery - Generator 31-Mar-17 2,45,000
Leasehold Land for PHC 31-Mar-17 76,920
CCTV Camera for PHC 30-Apr-18 57,598
TOTAL 1,05,56,709

10. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5): Not Applicable

11. Brief on the CSR projects

A. Health

1. Arogyadhama – State of the Art Specialty Health Centre:

Arogyadhama- Pioneering in Preventive, Promotive, and curative services, is a unique multi-specialty clinic in the rural setting of Suragajakkanahalli panchayat. The centre is equipped with state-of-the-art equipment viz X-ray, Scan, laboratory, minor OT along with out-patient facilities, partnerships with credible entities, and provision of high-quality consultation and diagnosis facilities. This establishment is economically friendly for the patients since consultations are free, and medicine and diagnostic services are highly subsidised. Arogyadhama has successfully served over 6,400 patients and further provides specialists facilities like Ophthalmology, Gynaecology, Paediatrics, Dental Treatments, Pharmacy, and day care.

Arogyadhama ensures their community stays at the top of their heath, thus, they have taken up the responsibility to spread awareness regarding various facets of health and hygiene.

They impart knowledge on the importance of a clean environment to prevent diseases like H1N1, COVID-19, Malaria, and so on. It has actively led health camps and outreach programmes to identify diabetes and hypertension patients. Further, counselling, administering regular medicines, follow up medical checks, data maintenance of all the patients are some of Arogyadhamas routine activities, in addition to providing curative healthcare and health management at the centre.

Milestones for FY 2020-21:

• Polio vaccines were administered to over 1,246 kids, covering 11 villages in co-ordination with Government PHC Haragadde

• 230 students of 8th to 10th standard were covered under Rapid Antigen Test when the schools reopened

• 60 children were covered under the ‘Mission Indradhanush Program of Government of India, which aims at ensuring full immunisation with all available vaccines for children.

• Health camp conducted in Gowrenahalli, in collaboration with Government PHC Anekal for Non-Communicable diseases and Revised National Tuberculosis Control Programme (RNTCP) programme

• Conducted a COVID-19 Survey along with Government PHC Haragadde in 10 Villages of Suragajakkanahalli Panchayat

• Serving as COVID-19 Vaccination Centre (CVC) in coordination with Government PHC Haragadde.

Through Arogyadhama, we could contribute to the nations fight against the pandemic by helping the Government PHCs with man-power to maintain patient related data and helped in protocols like quarantining or isolating the COVID-19 patients. Our team from Arogyadhama has continuously engaged with the Government frontline workers and hospitals to support and implement all the protocols, as per the need of the hour. The appreciation received for Arogyadhamas work has been a boost of encouragement for us to keep striving for the better. Arogyadhama has further been certified as one of the best PHC in maintaining the health records and keeping it real time.

2. RO Water plants

Provisions of safe drinking water is of utmost importance to eliminate the threat of consuming toxins and further prevents contraction of water borne diseases. Strides has made permanent arrangements for safe drinking water for over 11,000 people at Suragajakkanahalli, Hennagra, Haragadde and Neralur panchayats in Anekal Taluk, Bengaluru. To further this goal, till date, Strides Foundation has built 11 self-sustainable RO water units, with 2,000 litres per hour capacity each. This year we have commissioned 2 new units at Kumbaranahalli, Haragadde Panchayat and Anekal Main road, Suragajakkanahalli panchayat.

3. Support provided to fight against COVID-19

It is our privilege to shed some light on the Strides CSR initiatives taken up amidst the pandemic (Apr 2020 to Mar 2021). In addition to being a partner in the mitigating activities, we have also donated the following to supplement the immediate requirements for the betterment of the patients / people:

1. ICU Ventilators – 15 Nos. (4 nos. to Victoria Hospital & BMC, 3 nos. to Bowring & Lady Curzon Hospital, 3 nos. to Mahaveer Jain Hospital, 3 nos. to Jayadeva Hospital and 2 nos. to BBMP hospitals)

2. Hemo Dialysis Machine to Ooty General Hospital

3. 10,000 sanitisers of 500 ml each distributed to Government hospitals

4. Hand sanitisers, N95 masks, and gloves were provided to DC in Puducherry

5. Reusable cotton masks stitched by the local self-help groups were distributed in the Suragajakkanahalli village, thus providing temporary employment during the lock down period

6. Sponsored packed meals and survival kits to front line workers and migrants around Anekal

W e are proud to have received positive and appreciation by Government hospitals, local Panchayats and Government officials for our stellar contribution in this field.

4. Sponsorship to Siva Sakthi homes

Siva Sakthi Sathya Sai Charitable Trust is a registered trust, established to serve Intellectually Challenged Children and Senior Citizens. The Trust has a Home in Sri Raja Rajeswari Nagar, Bengaluru which has 28 differently abled inmates. As this home was looking for a willing donor to make provisions of groceries and medicines available, Strides Foundation stepped in to sponsor the same.

B. Education:

1. Leaps

Leadership Adoption Programme for Schools, popularly known as LeAPS is a programme designed to cater to people transformation and is further customisable for the young students of Government schools. The programme fosters overall developmental needs and imparts essentials skills into the students. However, despite LeAPS being an ongoing programme, it was not pursued this year as the school was shut in response to the pandemic.

2. Infrastructure Improvement

We recognise the importance of education and continue to direct our focus to strengthen educational infrastructure to provide quality learning environment. We have provided infrastructural support of a fully functional smart class and library to the Dr. Ambedkar Government Law college, Puducherry.

Further, for the children of Sidihoskote Village at Suragajakkanahalli Panchayat, Bengaluru, a state-of-the-art Anganwadi was constructed and handed over to the Local Authorities and the Anganwadi team.

C. Employability

1. Vocational skill Development:

To increase employment opportunities among the underprivileged sections of society, we made provisions of enhancing vocational abilities available to the youth of fisherman community at Puducherry. The Employment Empowerment Programme has been consistently organised every year and we have partnered with Swami Vivekananda Rural Community College (SVRCC) to widen our reach. This partnership has enabled the selection of 100 students who will be trained, in several job-related courses, with a holistic approach, to make them responsible citizens.

We take great pride in announcing that despite the pandemic, students of the 4th batch completed their studies amidst all protocols. Further, 70 children out of 100 have been placed and the rest 30 were not ready to take up jobs in fear of the pandemic even though the vacancies were available. However, we have the 5th batch students ready to take up the challenge and march forward to be skilled.

Responsibility Statement:

We hereby confirm that the implementation of the policy and monitoring of the CSR projects and activities is in compliance with the CSR objectives and CSR Policy of the Company

For and on behalf of the Board of Directors
Dr. Kausalya Santhanam Dr. R Ananthanarayanan
Independent Director & Managing Director & CEO
Chairperson of the CSR Committee DIN: 02231540
DIN: 06999168
Date: May 27, 2021
Place: Bengaluru

6,636 Million in FY 2020-21. With over 80% of our consolidated revenues coming from this segment, it remains a key focus area for us.

US: Steady performance, despite headwinds

Our US business witnessed a stable momentum, as we are steadily building the front-end and simultaneously tapering the partner business. Today, the front-end contributed ~86% of the revenues from this segment.

The US continues to be the worlds largest and most attractive pharmaceutical market, dominating trends in consumption and development, even as pricing remains a moot point there. Despite structural changes in the US market, it continues to be our largest pharma market. Our front-end business in the US is run through our subsidiary, Strides Pharma Inc., providing quality healthcare products to the market in prescriptions, private-label over-the-counter (OTC) and consumer health products.

Our US franchise has reached a critical size and operates a US$215 Million business with 130 ANDAs filings, of which 100 are approved by the USFDA. The US commercialised portfolio contains several products, where we are amongst the market leaders.

During FY 2020-21, the business generated healthy operating performance, despite an extremely weak flu season which impacted our winter portfolio. We continue to witness price erosion for our portfolio, while both patient footfalls at hospitals and pharmacies continue to remain below pre-COVID-19 levels, leading to subdued demand for few products. Our focused product selection strategy with relentless focus on supply commitments along with customer advocacy and continued investment in R&D portfolio will drive stable growth.

FY 2020-21 achievements

• Reported growth driven by improved revenue contribution from base molecules, new launches and Veteran Affairs (VA) business leveraging our Singapore facility

• Benefited from the proactive strategy to blitz scale when most incumbents are downsizing or exiting

• Strengthened our executive management team to enable our next level of growth with the addition of top-notch pharma leaders with vast industry experience

• Maintained superior customer advocacy through focus on building in-market safety stocks and supply chain efficiencies, with a very low historical Failure to Supply (FTS)

Strategy for future
Existing business • New l aunches to drive growth in the base business with continued ramp up in while partnered business will relatively downsize by design
• Tapping the VA opportunity through Singapore facility (commenced) and local manufacturing in the US will add a new lever to the growth trajectory
Monetise attractive pipeline • Robust R&D pipeline for expanding portfolio in the US with focus on middle of the pyramid products
• Target to file 10-15 new ANDAs in niche domains each year
Speciality segment • F ocus on creating a speciality generics strategy led by in-licensed opportunities
• Drive strategic partnerships with R&D organisations with a keen focus on developing specialty generics to solve for unmet patient needs
Private label & CHC • Focus on building an ‘in market for market private label business leveraging our portfolio of products
• Leverage our product development and local manufacturing capabilities in US
Sterile injectables • R e-entry into Steriles with lesser products, lighter infrastructure yet more valuable business
• Kick-start programmes with in-licensed products
• Positioned to utilise high quality manufacturing within group

Other regulated markets: Continued momentum, growth outlook robust

Other regulated markets for us include all regulated markets apart from the US. A large and fungibility regulated market portfolio allows us to have a strong presence in Canada, the UK, Europe, South Africa, Australia (through our partnership with Arrotex).

Other regulated markets business in FY 2020-21


We continue to serve the UK through our subsidiary Strides Pharma UK Limited. The UK market is one of the largest markets in the region and represents a US$11 Billion generic opportunity. We have the ability to tap multiple distribution channels for Rx and OTC products – Direct wholesalers, NHS supplies and Clinical commissioning groups (CCG). Our offerings in the region include high-quality generics and heritage OTC brands in this market


With Europes multi-cultural and multi-government setup, it has a dissimilar, region-specific pharmaceutical market. We are leveraging this market condition primarily through market fungibility under our portfolio maximisation strategy. We are steadily building our presence in Europe, the Nordic countries and DACH region We are using portfolio maximisation as a key tactic in the major European and DACH markets we serve through own frontend. We are also using an IP led partnership model to expand our reach other parts of Europe.


We are a preferred long-term strategic supplier to Arrotex—the countrys pharmaceutical behemoth with 60% of the market share—after exiting direct market in FY 2019-20. Our relationship with Arrotex spans across a large basket of products. We have multiple TGA approved sited including a dedicated plant in India to cater to the Australian market.

South Africa

Valued at US$3.4 Billion, South Africa is the largest pharma market in Sub-Saharan Africa. As a highly compliance-drive market, it is not-readily accessible to all players and we entered the market through our acquisition of Trinity Pharma in FY 2017-18.

At South Africa, we are building a strong base with portfolio maximisation to improve our IP landscape. We are further leveraging the distribution channels through pharmacy chains. We are also participating in the local antiretroviral (ARV) and non-ARV opportunities, as we steadily increase our reach.


Canadas pharma market offers an US$7 Billion opportunity. We are growing organically in the country by building a greenfield business across generics, private label OTCs and branded OTC extension from our portfolios in other markets as we continue to leverage our portfolio in the US and Australia. We remain committed to steadily accelerate the hybrid R&D model that is responsive to global regulatory needs, quality compliances and flexible manufacturing including the Canadian market.

FY 2020-21 achievements

• Delivered a strong performance across all other regulated markets led by portfolio expansion and strengthening of frontend presence

• Continued ramp up of supplies to Arrotex in Australia driven by increased volumes and expansion of product offerings

• Pick up in filing momentum for other regulated markets through continued investments in R&D, filed 18 new products and received 16 approvals

• Healthy order book and portfolio expansion to drive growth in FY 2021-22

Strategy for future
Base business • Move from B2B to B2C while focusing on key partnerships in select territories
• Strengthen presence in mature markets through portfolio expansion and capitalising on front end presence
Portfolio • Leverage portfolio maximisation strategy through front end presence and strategic partnership in key regulated markets
• Leverage large and established base portfolio to drive near-term growth
Supply chain • C ontinued focus on quality compliance and manufacturing flexibility to support growth across markets
• Superior supply chain execution with ability to backward integrate products to our manufacturing platform
Research & development • A ccelerate hybrid R&D model for developing products cutting across multiple geographies
• Strong regulatory filing capability across key regulated markets to drive new product introductions
Supply contract • 1 0 year preferred supply contract with Arrotex representing 60% of generic market in Australia
• Multiple TGA approved sites to backward integrate products and supply to Australian mar

Emerging markets: Strong bounce back in emerging markets, TLD commercialised

This segment includes our Africa operations and institutional business representing 20% of our consolidated revenues.

During the year, the institutional business delivered a healthy growth, benefiting from the successful commercialisation of Tenofovir, Lamivudine and Dolutegravir (TLD) combination. Moreover, the country specific registrations for TLD remains on track. Despite COVID-19 related headwinds, our Africa business returned to growth during FY 2020-21 on a lower base with a sharper focus on supply chain execution. We continue to emphasise introduction of new products and line extensions to our branded Africa business, alongside relentless focus on improved medical representative (MR) productivity to drive growth.


Africa business in FY 2020-21

We forayed into Africa in the early 1990s and since then having catering to its unmet requirements. Our objective is to be an important player in key African markets with a focus on building a robust branded generics portfolio for chronic therapies, womens health, Central Nervous System (CNS), cardiovascular, diabetes, dermatology and probiotics. We are helping improve the quality of life in these evolving economies by providing therapeutically effective, high-quality medication, as our brand finds resonance among doctors and at the community level locally.

With our ‘In Africa For Africa strategy, we have access to a WHO-approved manufacturing unit in Kenya to maximise our local development. We are growing as a pan-African player and are capitalising on our on ground field force and digital platforms to stay connected with pharmacies and doctors. We offer an extensive portfolio with established brands such as Renerve, Unibrol, Combiart, Duotab and Vitafer in Africa. We are also building a robust product registration pipeline to deliver a sustainable growth.

FY 2020-21 achievements

• Returned to growth during FY 2020-21 on a lower base with a sharper focus on supply chain execution

• Emphasised widening the reach in selected geographies

• Introduced new products, including line extensions for existing products to drive growth

• Improved MR productivity in Africa business to drive margin expansion

Strategy for future

• Maintain the rate of our new product introductions in the market, including line extensions for existing products

• Expand penetration into high-growth markets, implement better field force activities through modern technologies and improve targeting of key opinion leaders and specialists brand loyalist

• Focused on growing the branded generics business in Africa by leveraging digital platforms to stay connected with pharmacies and doctors

• Improve Per Capita Per Month (PCPM) and efficiency of our business along with maintaining channel hygiene will be the key priorities for us

Institutional business

Institutional business in FY 2020-21

With our objective of making quality medication available globally to patients at an affordable cost, we develop and manufacture drugs for institutionally funded aid projects and global procurement agencies. Our product portfolio in this segment includes ARV, anti-malarial, and other infectious disease. They reach over several countries in disease-prone regions in Africa.

Institutional business remains strategically important as we are an approved supplier to institutionally funded aid projects and Global Procurement Agencies like (United States Agency for International Development) USAID, Global Fund, Presidents (the US) Emergency Plan for AIDS Relief (PEPFAR), UNICEF, WHO, Pan American Health Organisation (PAHO), United Nations Development Program (UNDP), Population Services International (PSI), Chemeonics, Partnership for Supply Chain Management (PFSCM), among others.

Our products for the institutional business are produced in our Bengaluru facility (with multiple regulatory approvals) and the WHO-approved Kenyan facility. Our plant in Kenya also serves global donor agencies and local African governments. We are working towards strengthening our R&D initiatives to develop next-generation products. We continue to collaborate with donor agencies to make quality medicines available to the patient in emerging markets at affordable price.

FY 2020-21 achievements

• Our R&D pipeline for the new regimen ARVs is on track with the first key product TLD received approval

• Delivered a healthy growth in FY 2020-21 benefiting from successful commercialisation of TLD and steady offtake by donor funding agencies

• Continue to focus on shifting our key products in institutional business from India to our manufacturing site in Nairobi, Kenya for an "In Africa for Africa" market play

Strategy for future

• Poised to achieve planned outcomes on the ARV and malarial business driven by R&D pipeline and supply chain efficiencies

• Capitalise on TLD demand as it commands a significant share of the donor funding pool as the product has been included as a preferred first-line option among the current antiretroviral drug regimens

Update on Stelis Biopharma (Stelis)

Stelis is a vertically integrated biopharmaceutical company offering end-to-end state-of-the-art CDMO services across all phases of pre-clinical and clinical development and commercial supply of biologics. It has recently forayed into Vaccine manufacturing with a capability to do multiple vaccine types. Its operations include R&D, process development, scale-up and end-to-end cGMP manufacturing capabilities from drug substance through drug product in all formats and packaging. Stelis state-of-the-art research & development facility and 200,000 sq. ft. fully integrated cGMP manufacturing facility are located in Bengaluru, India.

Stelis has completed its incubation. Stelis is expected to break-even in FY 2021-22 and as it enters the growth phase it will need up to US$100 Million, additionally to fund all its programmes over the next three years.

During FY 2020-21, The Russian Direct Investment with Fund (RDIF, Russias sovereign wealth fund) partnered Stelis to produce, and supply a minimum of 200 million doses of the Russian Sputnik V vaccine sufficient to vaccinate 100 million people.

Toward the end of the fiscal, Stelis successfully concluded Series B and Series C fund raise for a cumulative amount of US$155 Million. Post money valuation for Stelis will be pegged at ~US$350 Million, underpinning the significant growth potential of the business. With the current capital raise, Stelis is now well positioned to pursue its growth initiatives and scale its business model to deliver promising returns in the coming years.

During the year under review, our Board of Directors approved in principle the demerger of Strides biopharma business under Stelis enabling unlocking of significant value for Strides shareholders.

Financial progress

Consolidated financial performance

(Rs in Million)

Particulars FY21 FY20
Revenue 33,308 27,637
EBITDA 6,497 5,276
Adjusted PAT 3,090 2,341
Key ratios
Particulars FY21 FY20
Debtors turnover 3.00 2.95
Inventory turnover 1.11 1.43
Interest coverage 4.33 3.10
Current ratio 1.03 0.93
Debt equity 0.46 0.46
EBITDA margin (%) 19.5 19.1
Net profit margin (%) 9.9 8.7

A research-focused organisation

Our R&D initiatives including portfolio maximisation have been one of the key growth pivots over the last few years. We develop niche and differentiated products with focussed research efforts and have a Global Formulation R&D centre at Bengaluru. Our robust R&D infrastructure has 225+ people working towards building a global portfolio using latest technologies available in the pharmaceutical industry in our state-of-the-art R&D facility.

R&D at Strides is engaged in developing an expansive range of dosage formats including Oral solids, Oral liquids, Topicals-liquids, creams and ointments, Soft gels, Sachets and modified release dosage formats for both Regulated and Emerging Markets.

Strengthening the IT infrastructure

Over the years, we have built a robust IT infrastructure that ensures the highest levels of compliance and quality for our offerings. We have introduced automation in key departments such as research, quality compliance and manufacturing to maximise efficiency and reduce the scope for human errors. We have introduced IT systems in business functions such as material management, production planning and control, product Development Protocol, electronic Batch Manufacturing Record (eBMR) in Manufacturing Execution system (MES), reagents and solutions management, chromatography management system, BMR/BPR issuance and control, calibration management, change management and control, asset management, quality management and personnel management. We are also incorporating new-age technologies such as robotic process automation or machine learning to handle high volumes of transaction and routine tasks and pursuing new ways of applying these technologies in other business functions.

In the coming years, these technologies will help us: a) reduce the deployment cycle; b) perform mundane and repetitive tasks with more speed and precision with least human intervention; and c) allow crucial talent to devote more attention to core operations and improve efficiency.

Please refer to the advance technologies section on PAGE 22 to 25 for detail coverage on information technology

People management

Strides has a global team of ~3,500 people who work in a diverse and harmonious work environment, with a transparent and open culture. We attract and retain the best talent and pursue a merit-based recruitment, rewards and recognitions policy. We support our people with adequate training for improving their skills and motivate them to align their goals with organisational objectives, driving excellence.

As part of our transparent organisational culture, we conduct several communication sessions, where our top management connect with our global employee base. We also have an app-based tool for employee feedback and governance to encourage two-way communication across the organisation.

We adhere to the highest standards of ethical, moral and legal conduct of business operations. Our Whistle Blower Policy provides mechanism for the Directors, employees and stakeholders of our Company to raise concerns on any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, among others.

We have adopted a gender-neutral Prevention of Sexual Harassment (POSH) policy. We conduct adequate trainings, workshops and awareness programmes against sexual harassment across the organisation.

Please refer to the social section on PAGE 30 to 31 on human resource management

Quality and compliance

At Strides, the emphasis is on achieving high benchmarks in the compliance curve. Our quality excellence programme provides clearly defined agendas concerning people, processes, products and technology. Our people are trained in advanced quality management through specific programmes, enabling the identification, reporting and rectification of quality concerns at Strides.

Risk management

At Strides, we acknowledge the fact that having a robust and pervasive risk-intelligent culture is essential for achieving the Companys stated objectives and build resilience for the future. We are consistently mapping the various levels of risks inherent in our business strategies and operations. The Board of Directors and the Senior Management are cognisant of the importance of equipping the employees with the necessary skills to navigate the complex risk-prone environment in the medium and long term.

Strides has institutionalised an Enterprise-wide Risk Management Programme and built a central team to provide oversight and guide the business teams on various emerging risks in the global markets where the Company operates. Through structured training programmes and workshops, employees are kept abreast with the leading risk management practices.

Effective risk management has also been made an integral part of individual KPIs to inculcate responsibility and accountability of people across various business units. We are committed to step up our investments in resources, tools and technologies that are globally acclaimed to make our risk-mitigation processes more data-driven and objective. These capabilities will help us build and equip our business with capabilities to sense and respond to emerging risks across our organisational ecosystem.

"The COVID-19 pandemic and the interconnected uncertainties that it brought up, has taught us that in risk management, it is no longer a question of "IF" something will go wrong, but "WHEN". Our reputation as an organisation is measured by our resilience to respond to uncertainties. Strides is committed to minimising risk and maximising performance through our comprehensive approach towards risk management, which enables business and operations to take risk-informed decisions, manage crisis scenarios and build a risk-aware culture"

Sormishta Ghosh, Chief Risk Officer

Management governance structure

Our risk management governance structure has been developed keeping in mind Strides Group structure, to ensure seamless integration of risk management process with the existing processes. To achieve the stated policy and ERM objectives, the Company has established three levels of risk management responsibilities: Risk Oversight, Risk Infrastructure & Management and Risk Ownership.

• The Board of Directors of the Company have the overall governance oversight responsibility with respect to ERM. The Board will be responsible to review the risk management policies and processes, define and review the risk appetite of the Company and provide direction to the management with respect to its ERM Practices

• The Board has delegated the roles and responsibilities for risk governance and oversight to Risk Management Committee (RMC) of the Board and Audit Committee

• Further, Group Level Steering Committee of RMC is formulated and Entity Level Risk Steering Committees for each entity will be formulated, whose roles and responsibilities shall be governed as per their approved charters

• We have appointed a Chief Risk Officer to assist the RMC and Steering Committee of RMC in risk monitoring and reporting process

Five steps risk management process

In order to manage risks in a systematic manner, Strides has followed the ERM framework to effectively manage uncertainty, respond to risk and exploit opportunities as they arise. In the context of Strides, ERM is followed process that encompasses all the basic elements of ERM process steps and components put forth as per ISO 31000: 2018.

Inherent and residual risks
Very High Risk High Risk
1. Regulatory compliance and regulatory actions 1. Product Approval and Supply
2. Patient safety and product efficacy 2. Cyber Risk
3. Supply chain disruptions 3. Contract Management
4. Changes in market dynamics in key markets
5. Cost Competitiveness
6. Statutory Compliance
7. Confidential Information
8. Merger & Acquisition
9. Inaccurate gross to net calculations
10. Lack of succession planning for key positions Liquidity and Working Capital
11. Business Continuity – EHS Disasters and possibility of lock down of operations

Risk-management approach for COVID-19

• Conducted COVID-19 related audits for plants and are constantly monitoring/reviewing the mitigation plans and their implementation

• Checked readiness for business units and various functions, including sites against the pandemic situation such as sanitation, WFH which continues today

• Benchmarked our practices against the good practices followed and adopted by similar and other industries

• Re-evaluated emerging risks in the backdrop of the second wave of COVID-19.

Internal control systems and adequacy

The Companys advanced IT infrastructure ensures adequate internal controls over business processes and practices. This internal control system provides reasonable assurance about the integrity and reliability of financial statements. Moreover, the Company has an active in-system audit programme, supported by Grant Thornton, which regularly encompasses various operations consistently. Our Audit Committee reviews internal audit observations regularly.