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Directors Report of Syngene International Ltd.

Mar 31, 2023

Your Directors are pleased to present the 30th Annual Report of your Company, along with the Audited Financial Statements and Auditor''s Report for the financial year ended 31st March, 2023. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

Financial review

Your Company''s performance during FY23, compared to the previous year is summarised below.

(Rs. in Million)

Particulars

March 31, 2023

March 31, 2022

Total revenue

32,644

26,542

Total expenditure

22,592

18,080

Profit before depreciation, finance costs, exceptional items and tax expense

10,052

8,462

Less: Depreciation & interest

4,043

3,338

Profit before exceptional items and tax expense

6,009

5,124

Add: Exceptional items

-

(307)

Profit before tax expense

6,009

4,817

Less: Tax expenses

1,279

879

Profit for the year

4,730

3,938

Other comprehensive income

(972)

433

Total comprehensive income

3,758

4,371

Profit for the year excluding exceptional item

4,730

4,245

Key highlights of the Company''s financial performance during FY23 are as follows:

• Revenue increased by 23% (from Rs. 26,542 Mn to Rs. 32,644 Mn)

• Earnings before interest tax depreciation and amortisation (EBITDA) increased by 19% (from Rs. 8,462 Mn to Rs. 10,052 Mn)

• Profit after tax increased by 20% (from Rs. 3,938 Mn to Rs. 4,730 Mn)

A detailed financial performance analysis is provided in the Management Discussion and Analysis Report, which is part of this Annual Report.

Operational Review

Syngene International Limited is an integrated research, development and manufacturing services organisation serving the global pharmaceutical, biotechnology, nutrition, animal health, consumer goods and specialty chemical sectors. Headquartered in India and listed on the National Stock Exchange of India Limited and Bombay Stock Exchange, the operations are driven by its highly qualified teams comprising

~6000 scientists and its state-of-the-art facilities, spread over 2.2 million sq. ft., across three locations in India: Bangalore, Hyderabad and Mangalore. Syngene has four business divisions: Discovery Services, Development Services, Manufacturing Services and Dedicated Centers.

Discovery Services

Discovery Services witnessed a healthy demand environment throughout the year as clients continued to make up the ground they lost during the pandemic and bring new projects forward. Discovery Chemistry, in particular, saw buoyant customer demand. Synvent, Syngene''s integrated drug discovery platform, showed sustained growth during the year. The portfolio, which currently stands at 18 integrated programs, witnessed encouraging demand from emerging biotech companies.

During the year, Syngene''s second campus in Hyderabad played an increasingly important role in Discovery Chemistry operations, now grown to over 900 scientists and got more expansion plans. With the commissioning of the new DMPK labs, the Hyderabad facility started Discovery Biology services

during the year. Syngene also commissioned a new PROTAC lab in Hyderabad during FY23. PROTAC is part of Syngene''s novel drug discovery strategy for clients involved in the treatment of cancer.

Syngene''s proprietary AI (Artificial Intelligence) platform Syn.AI™ was launched during the year. The platform enables a deeper understanding of disease and network biology to identify and prioritise targets. It evaluates targets on multiple parameters pertaining to relevancy, druggability, and safety, thereby decreasing the later-stage attrition.

The Discovery Services division cleared many client and regulatory audits during the year, notably the AAALAC''s (Association for Assessment and Accreditation of Laboratory Animal Care) full accreditation for its animal laboratory facility.

Development Services

In Development Services, repeat orders from existing clients, as well as an increase in the number of collaborations with emerging biopharma companies, drove a robust performance during the year. Syngene continued to invest in new infrastructure and capability development to match its growing customer demands. During FY23, the Company commissioned a kilo lab to expedite formulation and process development work and a state-of-the-art sterile Fill-Finish facility for small-scale clinical manufacturing. With the commissioning of the Fill-Finish facility, Syngene can offer end-to-end solutions in drug product development and manufacturing for clinical supplies of small and large-molecule injectables.

The highlight of the year for Development Services is the successful tech transfer and completion of registration batches leading to two Abbreviated New Drug Application (ANDA) filings by clients.

Manufacturing Services

The Manufacturing Services division showed good growth and demand during the year. The highlight was the long-term agreement with Zoetis. The agreement, initially centred on Librela®, paves the way for development and manufacturing of other molecules in the coming years and is expected to be worth up to USD 500 Mn to Syngene over 10 years, subject to regulatory approvals and market demand. The Zoetis deal will leverage the sustained investments Syngene has made in developing world-class biologics production facilities. Manufacturing Services also completed the inspection of its biologics facilities by the US FDA, EMA and MHRA during the year.

The small molecule manufacturing facility in Mangalore is on track to obtain the key regulatory approvals around the mid of 2023. During the year, the Mangalore facility received ISO: 50001 for driving sustainability in energy conservation.

Dedicated R&D Centers

Syngene operates dedicated R&D Centers for three clients: Amgen Inc., Baxter Inc and Bristol-Myers Squibb (BMS). During the year, the Dedicated R&D Centers reported a steady performance. Syngene commissioned a new yeast display facility to accelerate the advancement of Amgen''s R&D projects. FY24 will mark the 25th year of Syngene-BMS collaboration.

Other business updates

Joydeep Kant joined the Company in November 2022 as SVP of Development Services. As a member of the Executive Committee, Joydeep drives Syngene''s Development Services division connecting upstream Discovery Services programs through the development process to ensure a smooth transition into commercial manufacturing. Andrew Webster joined Syngene in December 2022 as the Chief Human Resources Officer (CHRO) and a member of the Executive Committee.

Subsidiary companies, associates and joint ventures

Syngene has three wholly owned subsidiaries namely Syngene USA Inc, Syngene Scientific Solutions Limited and Syngene Manufacturing Solutions Limited. The Company neither has any associate companies nor has formed any joint venture.

Syngene USA Inc. was incorporated in FY 2018, to help the Company have a firm foothold in the US market and allow easy access to the Company''s clients based in that region. During FY23, Syngene USA Inc, posted a revenue of Rs. 453 mn and reported a profit(before tax) of Rs. 41 mn. Syngene Scientific Solutions Limited (SSSL) was incorporated on August 10, 2022 in India and is engaged in Contract Research and Clinical research services. Syngene Manufacturing Solutions Limited (SMSL) was incorporated on August 26, 2022 in India to carry on the business of manufacturing pharmaceutical, biopharmaceutical and biological products of any kind. During FY23, no revenue was generated in SSSL and SMSL as both Companies were yet to start their operations.

A report on the performance and financial position of each subsidiary is outlined in AOC-1, which is annexed to this report as Annexure - 1 pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 (''the Act'') and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014. The Consolidated Financial Statements presented in this Annual Report include the financial results of the subsidiaries.

Further, in accordance with Section 136 of the Act, the audited financial statements and related information of the Company and its subsidiaries, wherever applicable, are available on the Company''s website: www.syngeneintl.com. These are also available for inspection during regular business hours at

our registered office in Bangalore, India and/or in electronic mode. Any member desirous of inspecting such documents is requested to write to the Company by sending an email to [email protected].

The Company has formulated a policy determining material subsidiaries. This is available on the Company''s website at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/. The Company has no material subsidiary.

Transfer to reserves

The Company has not proposed to transfer any amount to the general reserve for the year ended March 31, 2023.

Dividend

The Board has recommended a final dividend @ 12.50% i.e. Rs. 1.25 per share (comprising a regular dividend of Re.0.50 per share and a special additional dividend of Re. 0.75 per share to mark the 30th anniversary of the founding of the Company in November 1993) for FY23. The total dividend pay-out will amount to approximately Rs. 502.52 Mn and tax pay-out as applicable. The dividend, if approved at the Annual General Meeting (AGM), will be paid to those members whose name appears in the Company''s Register of Members as on the record date of June 30, 2023, and the dividend pay-out date will be on or before August 07, 2023.

In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations"), the dividend distribution policy of the Company is available on the Company''s website at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/.

Related party contracts or arrangements

All transactions entered with related parties as defined under the Companies Act, 2013 during the financial year were in the ordinary course of business and on an arm''s length basis except for one transaction with a wholly-owned subsidiary, which was approved at book value as per the methodology defined under the Income Tax Act, details of which are mentioned in the Form AOC-2 attached as Annexure 2 to the Board''s Report. Detailed disclosure on related party transactions as per IND AS 24 containing the name of the related parties and details of the transactions entered with such related parties have been provided as part of the notes to the financial statements provided in the Annual Report.

The Company has formulated the policy on ''Materiality of Related Party transactions and on dealing with Related Party Transactions'', and the same can be accessed using the following

link: at http://www.syngeneintl.com/investors/corporate-

governance/governance-reports-policies/

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars, as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 3.

Change in the nature of business

There has been no change in the Company''s nature of business. Further, there was no significant change in the nature of business carried on by its subsidiaries. Your Company continues to be one of the largest and fastest growing internationally reputed Contract Research and Manufacturing Organisation and world-class partner delivering innovative scientific solutions.

Loans, guarantees or investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements.

Deposits

During FY23, your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 ("Act"). Accordingly, there is no disclosure or reporting required in respect of details relating to deposits.

Credit rating

During the year, CRISIL Ratings Limited ("CRISIL") vide its letter dated November 30, 2022, had removed the long-term rating from watch with developing implications and has reaffirmed the long-term rating at "CRISIL AA /Stable". The short-term rating has been reaffirmed at "CRISIL A1 ". ICRA Limited ("ICRA") vide its letter dated November 17, 2022, has removed the short-term rating from watch with developing implications and has reaffirmed the short-term rating at "ICRA A1 ". The long-term rating has been reaffirmed at "ICRA AA on watch with developing implications".

Paid-up capital

During the financial year, the paid-up share capital of the Company was increased by allotment of 6,38,000 Equity shares at Rs. 10 each to Syngene Employee Welfare Trust under the Syngene Long Term Incentive Restricted Stock Units (RSU) Plan, 2020. The paid-up share capital as on March 31, 2023 stood at Rs. 4,014,345,000.

Material changes and commitments

On April 26, 2023 the Board of Directors of the Company approved the allotment of 580,500 equity shares of Rs. 10 each

of the Company to Syngene Employee Welfare Trust at face value pursuant to shareholders'' approval at the Annual General Meeting held on July 24, 2019 to allot fresh equity shares upto 1.67% of the paid-up equity capital of the Company in tranches for the purpose of implementation of the Syngene International Limited- Restricted Stock unit Long Term Incentive Plan FY 2020. Consequent upon the aforesaid allotment, the paid-up equity share capital of the Company stands at Rs. 4,020,150,000.

Human Resources

Syngene''s multidisciplinary workforce is committed to operating safely and to world class quality standards. Talent and culture are among the key building blocks in shaping the Company into a resilient and sustainable organisation. Syngene continues to focus on defined strategic areas in order to leverage the potential of the human capital, consistent with its values of excellence, integrity and professionalism. The headcount for year ending FY23 was 6,847 permanent employees, including more than 6,000 scientists.

Particulars of employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 4.

Particulars of Employees'' Remuneration, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the said information, is being sent to the shareholders of the Company and others entitled thereto. The information is available for inspection at the registered office of the Company during working hours up to the date of the ensuing AGM. Any shareholder interested in obtaining such information may write to the Company Secretary in this regard.

Employee Stock Option Plan /Restricted Stock Units Plan

The Board of Directors of the Company had formulated the Syngene Employee Stock Option Plan 2011 (hereinafter referred to as the "ESOP Plan") which was approved by the members of the Company on December 14, 2011 and further ratified by the members subsequent to the Initial Public Offering ("IPO") on December 05, 2015. The ESOP Plan is administered by the Syngene Employee Welfare Trust ("the Trust") under the instructions and supervision of the Nomination and Remuneration Committee ("NRC"). The Trust had subscribed to equity shares of the Company on October 31, 2012, using

the proceeds from interest free loan of Rs. 150 million obtained from the Company. The NRC, on various occasions, has granted options to eligible employees of the Company through the Trust. During the financial year, there was no change in the ESOP Plan. During FY23, no options were granted to eligible employees under the ESOP Plan. However, 7,01,066 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options. The ESOP Plan complies with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Company has discontinued granting ESOPs under the above Plan and does not intend to issue any further grants under the said Plan in future. The Trust has some surplus shares under this Plan, which has arisen due to the lapse of options granted to the employees over the years. These surplus shares may further increase due to a lapse of options in the future. In order to use the cash and surplus shares lying with the Syngene Employee Welfare Trust on account of the ESOP Plan, the Shareholders vide special resolution passed by Postal Ballot on April 23, 2023 approved the termination of the ESOP Plan, and the transfer of the cash and surplus shares to the other share benefit schemes/ plans (existing or future) implemented or to be implemented by the Company, after meeting all the obligations under the ESOP Plan.

The shareholders, at the 26th Annual General Meeting ("AGM") of the Company held on July 24, 2019 had approved the "Syngene Restricted Stock Unit ("RSU") Long Term Incentive Plan FY 2020" (hereinafter referred to as "the RSU Plan") designed to drive performance to achieve the Board approved strategic plan. The RSU Plan covers key employees who, by virtue of their roles, influence the accomplishment of the strategic plan. The RSU Plan is administered by the Trust. The shareholders have also approved at the 26th AGM the issue and allotment of further equity shares to the Trust over a period of time for the purpose of implementation of the RSU Plan. Vide special resolution passed through postal ballot on August 30, 2020, the shareholders had approved variations to the RSU Plan to streamline the plan with similar plans adopted by group companies to achieve uniformity in the approach to rewarding employees across the group. Further, at the Annual General Meeting held on July 20, 2022, the shareholders approved the amendment to the RSU plan by extending the scope of the RSU plan to include the employees of Holding Company, Biocon Limited. The terms of the modified plan are not detrimental to the interests of the employees of the Company. The RSU Plan is in compliance with the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Company has granted 89,704 RSUs as on March 31, 2023 under the RSU Plan. 8,17,184 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options.

The details of both plans form part of the notes to accounts of the Financial Statements in this Annual Report. The Company has obtained a certificate from the secretarial auditors of the Company that both the plans have been implemented in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and are in accordance with the resolutions passed by the shareholders. As required under Regulation 14 of the above-mentioned regulations, the applicable disclosures as on March 31, 2023 with respect to both the plans are available on the website of the Company at https://www.syngeneintl.com/investors/share-holder-services/

The shareholders have vide special resolutions passed by Postal Ballot on April 23, 2023 approved Syngene Long Term Incentive Performance Share Plan 2023 and Syngene Long Term Incentive Outperformance Share Plan 2023 for grant of performance share units(PSUs) to eligible employees of the Company, holding company, subsidiary(ies) including future subsidiary(ies). The said new Plans will be implemented by the Trust.

Corporate Governance Report

Your Company believes that good Corporate Governance emerges from the application of sound management practices, compliance with laws, coupled with adherence to the highest standards of transparency and business ethics. Integrity, transparency, fairness, accountability and compliance with the law are embedded in the Company''s business practices, ensuring ethical and responsible leadership at the Board as well as the Management level. Syngene''s Corporate Governance report is a reflection of its robust value-led culture encompassing professionalism, integrity and excellence, which has been a key enabler in building stakeholders'' trust, attracting and retaining financial and human capitals and meeting societal expectations.

The Company''s report on corporate governance for the financial year ended March 31, 2023 as per regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

Auditors'' certificate on Corporate Governance

As required under Schedule V(E) of SEBI Listing Regulations, the auditors'' certificate on compliance with the requirement of corporate governance is enclosed as Annexure 5 to this Report. The auditors'' certificate for FY23 does not contain any qualification, reservation or adverse remarks.

Directors

The Company continues to fulfil the requirement of Board constitution as required under the Companies Act 2013 and SEBI Listing Regulations. Professor Catherine Rosenberg will retire by rotation at the ensuing AGM and, being eligible, offers herself for re-appointment. The Board recommends her re-appointment

as indicated in the AGM Notice. Her brief resume, in pursuance of Regulation 36(3) of SEBI Listing Regulations, is annexed to the AGM Notice.

Key Managerial Personnel

As on March 31, 2023, the Key Managerial Personnel (KMP) of the Company appointed under the provisions of Section 203 of the Companies Act, 2013, are Jonathan Hunt, Managing Director and Chief Executive Officer, Sibaji Biswas, Chief Financial Officer and Priyadarshini Mahapatra, Company Secretary and Compliance Officer.

Policy on Directors'' appointment and remuneration

The policy on appointment and remuneration of directors, key managerial personnel and other persons provides an underlying basis and guidance for human resource management, thereby aligning plans for strategic growth of the Company. The Company''s Policy on Directors'' appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence and other matters, as provided under Section 178(3) of the Companies Act, 2013 is formulated by the Board on the recommendation of the Nomination and Remuneration Committee (NRC). The policy has been uploaded on the website of the Company and is accessible at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/

Declaration by Independent Directors

In accordance with Section 149(7) of the Act, each Independent Director has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Act, and is in compliance with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and Regulation 16(1 )(b) of the SEBI Listing Regulations. Further, each Independent Director has affirmed compliance with the Code of Conduct for Independent Directors as prescribed in Schedule IV of the Act. The Board has taken on record such declarations after due assessment of legitimacy.

Separate meeting of the Independent Directors

In terms of requirements under Schedule IV of the Act and Regulation 25(3) of the Listing Regulations, four separate meetings of the Independent Directors were held during FY23. Further details are mentioned in the Corporate Governance report.

Board diversity

A diverse Board enables efficient functioning through its access to broad perspectives and diverse thought processes underpinned by a range of scientific, industrial and management expertise, gender, knowledge and geographical origins. The Board recognises the importance of diverse

composition and has adopted a Board Diversity Policy, which sets out the approach to diversity. The Board diversity policy of the Company is available on the website of the Company at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/

Board evaluation

Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The performance evaluation process has been designed in such a manner that helps to measure effectiveness of the entire Board, its Committees and Directors. There are various key performance areas and evaluation criteria which are measured and analysed during the performance evaluation process. The evaluation details have been laid down in the Corporate Governance Report that forms part of this Annual Report. The outcome of the Board evaluation for FY23 was discussed by the Independent Directors, Nomination and Remuneration Committee at their respective meetings held on January 17, 2023 and January 23, 2023.

Number of meetings of the Board

The Board met 5 (five) times during the year under review. The details of Board meetings and attendance of the Directors are provided in the Corporate Governance Report.

Audit Committee

The Audit Committee has reviewed the accounts for the year ended March 31, 2023. The Board accepted all recommendations made by the Audit Committee.

The members of the Audit Committee are Paul Blackburn (Chairman), Vinita Bali and Sharmila Abhay Karve, Independent Directors. The list and composition of the various other Board-level Committees are provided in the Corporate Governance Report.

Adequacy of Internal Financial Control

The Company has implemented a robust internal financial controls framework within the Company with well-defined guidelines, policies, processes and structures. The Internal Financial Controls have been documented and embedded in the business processes. These control processes enable and ensure the orderly and efficient conduct of the Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information. There are control processes both in

manual and IT applications including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

The internal control system is regularly tested and reviewed by Ernst & Young, the Independent Internal Auditor. The internal auditor is appointed by the Audit Committee of the Board. All possible measures are taken by the Audit Committee to ensure the objectivity and independence of the Internal Auditor, including quarterly one on one discussions. The Company also has a management audit team which carries out internal control reviews and follow-up audits. The team is also responsible for monitoring implementation of action points arising out of internal audits.

Risk Management Policy

In compliance with Regulation 21 of the SEBI Listing Regulations, the Board of Directors has a duly constituted the Risk Management Committee ("the Committee") to oversee the enterprise-wide risk management framework.

Syngene has an enterprise risk management framework based on which the key enterprise risks, associated mitigation plans and action updates are reviewed every quarter by the Risk Management Committee. Specific risk areas are also reviewed in detail in each such meeting. The Audit Committee has additional oversight in the area of financial risks and controls. For detailed terms of reference, please refer to the Corporate Governance Report which forms part of this Annual Report.

Directors'' Responsibility Statement

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on March 31, 2023.

In compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge, hereby confirm the following:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(b) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

(c) The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The Directors prepared the annual accounts on a going concern basis.

(e) The Directors laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

(f) The Directors devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors

Statutory Auditors

B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed at the 28th AGM held on July 21, 2021 as statutory auditors of the Company to hold office for a second term of five consecutive years, upto the conclusion of the Annual General Meeting of the Company to be held in 2026. The Auditors'' Report on the Financial Statements of the Company for the year ended March 31, 2023 does not contain any qualifications, reservations or adverse remarks. The Auditor''s Report is enclosed with the Financial Statements and forms part of the Annual Report.

Internal Auditors

The Board, at its meeting held on July 20, 2022, had re-appointed M/s. Ernst & Young LLP as the Company''s Internal Auditors for the period up to December 31, 2023.

Secretarial Auditors

The Board pursuant to Section 204 of the Companies Act, 2013 had appointed M/s. V Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct the Secretarial Audit of the Company for FY23. They have confirmed their eligibility for the re-appointment. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark and is annexed to this Report as Annexure 6.

Pursuant to the SEBI circular vide no. CIR/CFD/CMD/1/27/2019 dated February 8, 2019, the Annual Secretarial Compliance Report for the financial year ended March 31, 2023, issued by M/s. V Sreedharan & Associates, Practicing Company Secretaries is attached as Annexure 7 to this Report and shall also be submitted to the stock exchanges where the shares of the Company are listed.

Reporting of fraud by auditors

During the year under review, no instances of fraud have been reported by the statutory auditors or secretarial auditors to the Audit Committee or to the Board pursuant to section 143(12) of the Companies Act, 2013, the details of which should form part of this report.

Annual Return

In compliance with Section 92 and Section 134(3)(a) of the Companies Act, 2013 read with applicable Rules made thereunder, the Annual Return is available on the Company''s website https://www.syngeneintl.com/investors/share-holder-services/ statutory-disclosures-fy2023/

Management Discussion and Analysis Report

As required under Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual Report.

Corporate Social Responsibility

As per section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility (CSR) Committee, comprising Professor Catherine Rosenberg (Chairperson), Dr Vijay Kuchroo and Vinita Bali. The Committee monitors and oversees various CSR initiatives of the Company.

Syngene''s CSR initiatives are based on the principle of making enduring impact through programs that promote education, science, social and economic inclusion and environmental sustainability. The Company is committed to innovation, science, affordability and access to healthcare. In line with this commitment and as a socially responsible organisation, the Company has always invested in CSR programs aimed at making a difference in the lives of marginalised communities. Syngene''s CSR programs pivot around social welfare, environmental sustainability, healthcare and promoting education in the fields of science and medicine. The Company''s CSR activities this year have been executed directly and through Biocon Foundation. Biocon Foundation develops and implements healthcare, educational, infrastructure, rural development projects, promotes gender equality and safety of vulnerable sections of society. The Company''s CSR policy is available on its website at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/. A detailed report on CSR activities is annexed to this Report as Annexure 8.

Business Responsibility and Sustainability Report

Syngene had adopted the Business Responsibility and Sustainability Reporting ("BRSR") introduced by the Securities and Exchange Board of India ("SEBI") containing ESG disclosures voluntarily for FY22. Continuing the journey towards

sustainable development, in compliance with Regulation 34(2) (f) of the SEBI Listing Regulations, the BRSR forms part of this Annual Report and presents the ESG approach, including enhanced ESG voluntary leadership disclosures for FY23, to engage more meaningfully with stakeholders. The BRSR indicates the Company''s performance against the principles of the ''National Guidelines on Responsible Business Conduct'' and provides information on environmental social and governance initiatives and their impacts on the Company.

Whistle Blower Policy/Vigil Mechanism

The Company''s whistle blower policy allows employees, Directors and other stakeholders to report genuine grievances, corruption, fraud, misconduct, misappropriation of assets, and non-compliance with the Code of ethics and business conduct of the Company or any other unethical practices. The policy provides adequate safeguard against victimisation to the whistleblower and enables them to raise concerns to the Integrity Committee and provides an option of direct access to the Chairman of the Audit Committee. In order to maintain the highest level of confidentiality and foster an environment of honesty, the Company has appointed an outsourced agency, Navex Global to receive the complaints and co-ordinate with the whistleblower, if required. During FY 23, no individuals have been denied access to the Chairman of the Audit Committee.

The Whistlebower Policy is available on the Company''s website at https://www.syngeneintl.com/investors/corporate-governance/governance-reports-policies/

Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Syngene has a strict Prevention of Sexual Harassment Policy (POSH) in accordance with the statutory requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is applicable to all employees including the Company''s contractual employees. The Company is committed to providing a workplace that is free from discrimination, harassment and victimisation, regardless of gender, race, creed, religion, place of origin, sexual orientation of a person employed or engaged with the Company. The Internal Committee (''IC'') has been constituted to consider and redress all complaints of sexual harassment at workplace. Employee sensitisation programs on POSH were conducted during the year. In FY23, a total of 2 complaints were received and closed within the stipulated timeline.

Significant and material orders by the regulators or courts or tribunals

During FY23 there have been no significant and material orders passed by the regulators or courts or tribunals impacting the

going concern status and the Company''s operations in future.

Statutory disclosures

None of the Directors of the Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBI Listing Regulations.

Secretarial Standard disclosure

The Company has complied with the provisions of applicable secretarial standards, issued by The Institute of Company Secretaries of India (ICSI).

Green initiative

We request all the shareholders to support the ''Green Initiative'' of the Ministry of Corporate Affairs and Syngene''s continued endeavours for greener environment by enabling service of Annual Report, AGM Notice and other documents electronically to your email address registered with your Depository Participant/ Registrar and Transfer Agent. We also request all the investors whose email ID is not registered to take necessary steps to register their email ID with the Depository Participant/ Registrar and Transfer Agent.

Acknowledgments

We would like to place on record our deep sense of appreciation to Syngene employees for their contribution and services. We would like to thank all our clients, vendors, bankers, investors, media and other business associates for their continued support and encouragement during the year.

We also thank the Government of India; the Government of Karnataka; Government of Telangana; the Ministry of Information Technology and Biotechnology; the Ministry of Commerce and Industry; the Ministry of Finance and Corporate Affairs; the Department of Scientific and Industrial Research; Central Board of Indirect Taxes and Customs; the Reserve Bank of India; the Central Board of Direct Tax; SEZs (Special Economic Zones), BIRAC (Biotechnology Industry Research Assistance Council) and all other government agencies for their support during FY23 and look forward to their continued support in future.

For and on behalf of the Board

Kiran Mazumdar Shaw

Place: Bangalore Chairperson

Date: April 26, 2023 DIN: 00347229


Mar 31, 2022

Your Directors are pleased to present the 29th Annual Report of your Company, along with the Audited Financial Statements and Auditor''s Report for the Financial Year ended 31st March, 2022. On the business front, your Company weathered the pandemic very well and continued to innovate, build capabilities, attract new client relationships and explore novel areas of science. It adapted quickly and embraced a new operating model that prioritized the health and wellbeing of its employees, while enabling it to continue supporting its clients.

We take this opportunity to record our thanks to the executive team, the talented scientists and those around them for their continued support.

Financial Review

Your Company''s standalone performance during FY22, compared to the previous year is summarized below

(Rs. in Mn)

Particulars

March 31, 2022

March 31, 2021

Total revenue

26,542

22,440

Total expenditure

18,080

15,094

Profit before Depreciation, Finance Costs, Exceptional Items and Tax Expense

8,462

7,346

Less: Depreciation & Interest

3,338

3,022

Profit before Exceptional Items and Tax Expense

5,124

4,324

Add: Exceptional Item

(307)

350

Profit before tax expense

4,817

4,674

Less: Tax expense

879

637

Profit for the year

3,938

4,037

Other Comprehensive Income

433

1,906

Total Comprehensive Income

Profit after tax for the year excluding exceptional item

4,371

5,943

4,245

3,687

Key highlights of the Company''s standalone financial performance during FY22 are as follows:

• Revenue increased by 18% (from Rs. 22,440 Mn to Rs. 26,542 Mn)

• Earnings before interest tax depreciation and amortisation (EBITDA) increased by 15% (from Rs. 7346 Mn to Rs. 8,463 Mn)

• Profit after tax including exceptional item declined by 2% (from Rs. 4,037 Mn to Rs. 3,938 Mn) on account of exceptional item. Profit after tax excluding exceptional gain increased 15% (from Rs. 3,687 Mn to Rs. 4,245 Mn)

A detailed financial performance analysis is provided in the Management Discussion and Analysis Report, which is part of this Annual Report.

Operational Review

Syngene International Limited is an integrated research, development and manufacturing services organization. Working for clients around the globe, the Company delivers innovation that will benefit human and animal health and develop next generation compounds to improve people''s lives in the years to come. Headquartered in India and listed on the National Stock Exchange and Bombay Stock Exchange, the operations are driven by its highly qualified teams comprising ~5200 scientists and its state-of-the-art facilities, spread over 2 million sq. ft., across three locations in India: Bangalore, Hyderabad and Mangalore. Syngene has four business divisions: Discovery Services, Development Services, Manufacturing Services and the Dedicated Centers.

During the year, biopharmaceutical client Panbela Therapeutics, which develops disruptive therapeutics for cancer treatment, received a US patent. The patent covers a shortened synthesis of a lead investigational product. The Development Services team collaborated with the client to streamline this production process.

Syngene signed a five-year agreement with IAVI1, a USA-based, non-profit, scientific research organization to develop and manufacture three recombinant, monoclonal antibodies (mAbs) for Human Immunodeficiency Virus (HIV). Other key collaborations include a partnership with Dyadic International, Inc., a global biotechnology company, to develop a vaccine candidate to immunize people against current and future variants of the COVID-19 virus.

| MANUFACTURING SERVICES

The Manufacturing Services Division reported a steady performance for the year, driven by traction in Biologics business and manufacturing of remdesivir, the USFDA-approved COVID-19 drug. The Company continues to expand its biologics facility. A cGMP microbial manufacturing facility with 500-liter capacity was commissioned in 2021. A fourth 2,000-liter single-use bioreactor was added during the year to the mammalian biologics facility. In biologics manufacturing, the Company expanded its client base.

The Mangalore API facility is now qualified and its validation activities have resulted in approval from the Indian drug regulatory body. This facility is aiming to secure regulatory approvals from USFDA and EMA in two years. Some commercial supplies from the Mangalore unit have already started.

| DEDICATED R&D CENTERS

Syngene operates dedicated R&D Centers for three clients: Amgen Inc., Baxter Inc and Bristol-Myers Squibb (BMS). During the year, the Dedicated R&D Centers reported a steady performance. This was primarily driven by five-year renewal of the long-standing contract with Amgen Inc. and expansion of the Dedicated R&D Center for Bristol-Myers Squibb. These contract extensions confirm the stability of relationship with these key clients and provide a clear perspective on the future of the Dedicated Centers. As part of the contract extension with Amgen, Syngene will build and operate a new dedicated laboratory to accelerate advancement of Amgen''s R&D projects. The strategic collaboration with BMS is now effective until 2030 and includes more areas of research and an increase in the number of scientists working on the client''s projects..


DISCOVERY SERVICES

Discovery Services reported a robust performance for the year, characterized by strong client demand, particularly within the emerging biopharmaceutical segment, as well as further expansion of relationships with existing clients. SynVent, Syngene''s Integrated Drug Discovery platform, continued to attract new clients and expand business from existing customers. The Company attracted positive demand for newer services like Protein Degradation Technology (PROTACS) and peptide synthesis, complemented by demand from key client markets in the US and Europe with the resumption of normal operations.

Key scientific achievements include successful delivery of three candidates for preclinical evaluation. Two additional candidates were identified within the targeted protein degradation modality. Significant progress was made in selecting candidates for an antibody-drug conjugate, including validation of a novel linker moiety that imparts significantly improved physical properties such as solubility.

The Discovery team supplied high-quality viral proteins to Bharat Biotech, the makers of India''s indigenous COVID-19 vaccine. The scientific team also generated several variants of the SARS-CoV2 spike S1 protein including the alpha, beta and delta variants. The Company has received a grant from India''s Biotechnology Industry Research Assistance Council (BIRAC) for the co-development of a measles virosome-based COVID-19 vaccine.

The Company expanded its research facilities in Bangalore and Hyderabad. Post the completion of Phase-II expansion of the Hyderabad facility earlier in the year, Phase-III expansion is now underway. The Company also continued to invest in enhancing its scientific capabilities to both sustain and advance its position as a service provider for fully integrated therapeutic discovery.

The Research Informatics unit focused on providing seamless computational support to programs within SynVent. The unit launched a drug discovery informatics platform to empower the scientists with project information and tools to generate and evaluate hypotheses.

DEVELOPMENT SERVICES

The Development Services Division reported a steady performance for the year. The business experienced an uptick in enquiries as clients resumed activities following a lull during the pandemic. All project commitments were met despite the pandemic. The Company is in the process of establishing a new, state-of-the-art injectable fill-finish facility with a filling capacity of up to 2,000 vials per hour. This will help Syngene address the drug product requirements of both small molecule and large molecule for early phase clinical supplies on the injectable segment.

SUBSIDIARY COMPANY/JOINT VENTURE

A report on the salient features of the financial statements, performance and financial position of the subsidiary of the Company is outlined in AOC-1 which is annexed to this report as Annexure - 1 pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 (''the Act'') and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014. In accordance with the provisions of Section 136 of the Companies Act, 2013 and the amendments thereto, read with the SEBI Listing Regulations, the audited financial statements, including the consolidated financial statements and related information of the Company and financial statements of the subsidiary company will be available on our website www.syngeneintl.com. Syngene USA Inc. is a wholly-owned subsidiary of Syngene, incorporated in FY 2018, to have a firm foothold in the US market and allow easy access to the Company''s clients based in that region.

The Consolidated Financial Statements presented in this Annual Report include the financial results of the subsidiary.

DIVIDEND

The Board has recommended a Final Dividend @10% or Re

1.00/- per share (comprising 5% or Re 0.50 as regular dividend and 5% or Re 0.50 as additional special dividend) for FY22. The total dividend pay-out will amount to approximately Rs. 401 Mn and tax pay-out as applicable. The dividend, if approved at the Annual General Meeting (AGM), will be paid to those members whose name appears in the Company''s Register of Members as on the record date of July 1, 2022, and the dividend pay-out date will be on or before August 01, 2022.

In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations"), the dividend distribution policy of the Company is available on the Company''s website at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/.

RELATED PARTY CONTRACTS OR ARRANGEMENTS

All contracts, arrangements and transactions entered into by the Company with related parties during FY22 were in the ordinary course of business and on an arm''s length basis. During the year, the Company did not enter into any transaction, contract or arrangement with related parties that could be considered material in accordance with the Company''s policy on dealing with related party transactions.

Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable. However, detailed disclosure on related party transactions as per IND AS 24 containing the name of the related parties and details of the transactions entered with such related parties have been provided as part of the notes to the financial statements provided in the Annual Report.

The Company has formulated the policy on ''Materiality of Related Party transactions and on dealing with Related Party Transactions'', and the same can be accessed using the following link: http://www.syngeneintl.com/investors/ corporate-governance/governance-reports-policies/

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars, as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 2.

TRANSFER OF UNPAID AND UNCLAIMED DIVIDENDS TO INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs under Sections 124 and 125 of the Companies Act, 2013 requires dividends that are not encashed/ claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF). In FY22, there was no amount due for transfer to the IEPF.

CHANGE IN NATURE OF BUSINESS

There has been no change in the Company''s nature of business. Your Company continues to be one of the largest and fastest growing internationally reputed Contract Research and Manufacturing Organization and world-class partner delivering innovative scientific solutions.

LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements.

DEPOSITS

During the FY22, the Company did not accept any deposits covered under Chapter V of the Companies Act, 2013.

CREDIT RATING

During the year, CRISIL vide its letter dated March 10, 2022, has placed its ''CRISIL AA '' rating on the long-term bank facilities of the Company on ''Watch with Developing Implications following the rating action on the long term debt facilities of the holding Company, Biocon Limited. The rating on the shortterm bank facilities has been reaffirmed at ''CRISIL A1 ''.

During the year, ICRA vide its letter dated March 16, 2022, has placed its ''ICRA AA '' and ''ICRA A1 '' rating on the Company''s long-term and short-term banking facilities respectively on ''Watch with Developing Implications'' following the rating action on the debt facilities of the holding Company, Biocon Limited.


PAID UP CAPITAL

During the financial year, the paid-up share capital of the Company was increased by allotment of 796,500 Equity shares at Rs. 10 each to Syngene Employee Welfare Trust under the Syngene Long Term Incentive Restricted Stock Units (RSU) Plan, 2020. The paid-up share capital as on March 31, 2022 stood at Rs. 4,007,965,000

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

HUMAN RESOURCES

Syngene''s multidisciplinary workforce is committed to operating safely and to world class quality standards. In these challenging circumstances, employees have shown commitment and resilience during the past twelve months, consistent with our values of excellence, integrity and professionalism. The headcount for year ending FY22 was approximately 5975 full-time employees, including more than 5200 scientists.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 3.

Particulars of Employees'' Remuneration, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the said information, is being sent to the shareholders of the Company and others entitled thereto. The information is available for inspection at the registered office of the Company during working hours up to the date of the ensuing AGM. Any shareholder interested in obtaining such information may write to the Company Secretary in this regard.

EMPLOYEE STOCK OPTION PLAN /RESTRICTED STOCK UNITS PLAN

The Board of Directors of the Company had formulated the Syngene Employee Stock Option Plan 2011 (hereinafter referred to as the "ESOP Plan") which was approved by the members of the Company on 14th December, 2011 and further ratified by the members subsequent to the Initial Public Offering ("IPO") on 5th December, 2015. The ESOP Plan is administered by the Syngene Employee Welfare Trust ("the Trust") under

the instructions and supervision of the Nomination and Remuneration Committee ("NRC"). The Trust had subscribed to equity shares of the Company on 31st October 2012, using the proceeds from interest free loan of Rs 150 million obtained from the Company. The NRC, on various occasions, has granted options to eligible employees of the Company through the Trust. During the financial year, there was no change in the ESOP Plan. During FY22, no options were granted to eligible employees under the ESOP Plan. However, 489,152 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options. The ESOP Plan complies with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ["SEBI (SBEB & SE) Regulations, 2021"].

The shareholders, at the 26th Annual General Meeting ("AGM") of the Company held on 24th July, 2019 had approved the "Syngene Restricted Stock Unit ("RSU") Long Term Incentive Plan FY 2020" (hereinafter referred to as "the RSU Plan") designed to drive performance to achieve the Board approved strategic plan. The RSU Plan covers key employees who, by virtue of their roles, influence the accomplishment of the strategic plan. The RSU Plan is administered by the Trust. The shareholders have also approved at the 26th AGM the issue and allotment of further equity shares to the Trust over a period of time for the purpose of implementation of the RSU Plan. Vide special resolution passed through postal ballot on 30th August, 2020, the shareholders have approved variations to the RSU Plan to streamline the plan with similar plans adopted by group companies to achieve uniformity in the approach to rewarding employees across the group. The terms of the modified plan are not detrimental to the interests of the employees of the Company. The RSU Plan is in compliance with the provisions of SEBI (SBEB & SE) Regulations, 2021. During the financial year, there was no change in the RSU Plan.

The Company has granted 418,132 RSUs as on 31st March, 2022 under the RSU Plan. 427,352 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options.

The details of both plans form part of the notes to accounts of the Financial Statements in this Annual Report. The Company has obtained a certificate from the secretarial auditors of the Company that both the plans have been implemented in accordance with SEBI (SBEB & SE) Regulations, 2021 and are in accordance with the resolutions passed by the shareholders. As required under Regulation 14 of the above-mentioned regulations, the applicable disclosures as on 31st March, 2022 with respect to both the plans are available on the website of the Company at https://www.syngeneintl.com/investors/share-holder-services/

CORPORATE GOVERNANCE REPORT

Your Company believes that good Corporate Governance emerges from the application of sound management practices, compliance with laws, coupled with adherence to the highest standards of transparency and business ethics. Integrity, transparency, fairness, accountability and compliance with the law are embedded in the Company''s business practices, ensuring ethical and responsible leadership at the Board as well as the Management level. Syngene''s Corporate Governance report is a reflection of its robust values-led culture encompassing professionalism, integrity and excellence, which has been a key enabler in building stakeholders'' trust, attracting and retaining financial and human capital and meeting societal expectations. The Company''s corporate governance framework focusses on adequate and timely disclosures, transparent and robust accounting policies and a strong and independent Board to maximize shareholders'' benefits.

The Company''s report on corporate governance for the financial year ended March 31, 2022 as per regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

AUDITORS'' CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V(E) of SEBI Listing Regulations, the auditors'' certificate on compliance with the requirement of corporate governance is enclosed as Annexure 4 to this Report. The auditors'' certificate for FY22 does not contain any qualification, reservation or adverse remarks.

DIRECTORS

I. Retirement

John Shaw (DIN:00347250), who was associated with the Company since 2000 and instrumental in helping the Company cross significant milestones, retired as Non-executive Nonindependent Director due to health reasons on July 21, 2021. The Board expressed its deep appreciation and gratitude for the many years and dimensions of his wise counsel and stewardship of the Syngene business and its growth. The Board also acknowledged that his strong managerial and governance experience together with financial expertise were key to establishing the strong corporate governance that the Company is recognized for.

II. Appointment

Dr Kush Parmar (DIN:09212020) was appointed as Independent Director of the Company on June 22, 2021.

III. Re-appointment

Dr Carl Decicco (DIN:08576667), who was an Independent Director on the Board ceased to be an Independent Director on

February 28, 2022 and was appointed as an Additional Director (Non-Executive Non-Independent) w.e.f. March 01, 2022. The Company continues to fulfill the requirement of Board constitution as required under the SEBI Listing Regulations even after the change in the directorship status of Dr Carl Decicco from Independent Director to Non-executive Non-independent Director.

The shareholders, at the Annual General Meeting (AGM) of the Company held on July 22, 2020, had appointed Sharmila Abhay Karve (DIN:05018751) as an Independent Director for a tenure commencing from August 01,2019 until the conclusion of the forthcoming AGM. The Nomination and Remuneration Committee at its Meeting held on 26th April, 2022 on the basis of performance evaluation of Independent Directors has recommended to the Board that continued association of Sharmila Abhay Karve as an Independent Director of the Company would be beneficial to the Company. The decision was made based on the business knowledge, acumen, experience and the substantial contribution made by Sharmila Abhay Karve during her tenure.

Based on the above and the performance evaluation of Independent Directors, the Board recommends the reappointment of Sharmila Abhay Karve as Independent Director of the Company, not liable to retire by rotation, to hold office for a second term of five years from conclusion of the 29th AGM.

Kiran Mazumdar Shaw (DIN:00347229), Non-Executive Chairperson will retire by rotation at the ensuing AGM and, being eligible, offers herself for re-appointment. The Board recommends her re-appointment as indicated in the AGM Notice.

Brief resume of the Directors seeking appointment/ re-appointment at the ensuing AGM, in pursuance of Regulation 36(3) of SEBI LODR, is annexed to the AGM Notice.

KEY MANAGERIAL PERSONNEL

As on 31st March 2022, the Key Managerial Personnel (KMP) of the Company appointed under the provisions of Section 203 of the Companies Act, 2013, are Jonathan Hunt, Managing Director and CEO, Sibaji Biswas, Chief Financial Officer and Priyadarshini Mahapatra, Company Secretary and Compliance Officer.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The policy on appointment and remuneration of directors, key management personnel and other persons provides an underlying basis and guidance for human resource management, thereby aligning plans for strategic growth of the Company. The Company''s Policy on Directors'' Appointment and Remuneration, including

the criteria for determining qualifications, positive attributes, independence and other matters, as provided under Section 178(3) of the Companies Act, 2013 is formulated by the Board on the recommendation of the Nomination and Remuneration Committee (NRC). The Policy was reviewed and updated by the Board on NRC''s recommendation at its meeting held on January 19, 2022. The Policy has been uploaded on the website of the Company and is accessible at https://www.syngeneintl.com/ investors/corporate-governance/governance-reports-policies/.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent directors of the Company confirming that they meet with the criteria of independence as prescribed under section 149 (6) & (7) of the Companies Act, 2013 and SEBI Listing Regulations. The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs for the inclusion of their names in the data bank of Independent directors within the due date. All the Independent Directors were exempted from clearing the proficiency test as required by the Indian Institute of Corporate Affairs. However, Sharmila Abhay Karve had appeared for the test and cleared the same.

BOARD DIVERSITY

A diverse Board enables efficient functioning through its access to broad perspectives and diverse thought processes underpinned by a range of scientific, industrial and management expertise, gender, knowledge and geographical origins. The Board recognises the importance of a diverse composition and has adopted a Board Diversity Policy which sets out the approach to diversity. The Board diversity policy of the Company is available on the website of the Company at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee and the Board. The evaluation details have been laid down in the Corporate Governance report that forms part of this Annual Report. The outcome of the Board evaluation for FY22 was discussed by the Independent Directors, Nomination and Remuneration Committee and the Board at their respective meetings held on January 19, 2022.

NUMBER OF MEETINGS OF THE BOARD

The Board met 4 (four) times during the year under review. The details of Board meetings and attendance of the Directors is provided in the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee has reviewed the accounts for the year ended March 31, 2022. The Board accepted all recommendations made by the Audit Committee.

The members of the Audit Committee are Paul Blackburn (Chairperson), Vinita Bali and Sharmila Abhay Karve, Independent Directors. The list and composition of the various other Board-level Committees are provided in the Corporate Governance Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has implemented a robust internal financial controls framework within the Company with well-defined guidelines, policies, processes and structures. The Internal Financial Controls have been documented and embedded in the business processes. These control processes enable and ensure the orderly and efficient conduct of the Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information. There are control processes both in manual and IT applications including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

The internal control system is regularly tested and reviewed by Ernst & Young, the Independent Internal Auditor. The internal auditor is appointed by the Audit Committee of the Board. All possible measures are taken by the Audit Committee to ensure the objectivity and independence of the Internal Auditor, including quarterly one on one discussions. The Company also has a management audit team which carries out internal control reviews and follow-up audits. The team is also responsible for monitoring implementation of action points arising out of internal audits.

RISK MANAGEMENT POLICY

In compliance with Regulation 21 of the SEBI Listing Regulations, the Board of Directors has a duly constituted the Risk Management Committee to oversee the enterprise-wide risk management framework.

Syngene has an enterprise risk management framework based on which the key enterprise risks, associated mitigation plans and action updates are reviewed every quarter by the Risk Management Committee. Specific risk areas are also reviewed in detail in each such meeting. The Audit Committee has additional oversight in the area of financial risks and controls. For detailed terms of reference, please refer to the Corporate Governance Report which forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on March 31, 2022.

In compliance with Section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby confirm the following:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(b) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

(c) The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The Directors prepared the annual accounts on a going concern basis.

(e) The Directors laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

(f) The Directors devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS Statutory Auditors

B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed at the 28th AGM held on July 21, 2021 as statutory auditors of the Company

to hold office for a second term of five consecutive years, upto the conclusion of the Annual General Meeting of the Company to be held in 2026. The Auditors'' Report on the Financial Statements of the Company for the year ended 31st March, 2022 does not contain any qualifications, reservations or adverse remarks. The Auditor''s Report is enclosed with the Financial Statements and forms part of the Annual Report.

Internal Auditors

The Board at its meeting held on October 22, 2019 had reappointed Ernst & Young LLP as the Company''s Internal Auditors for tenure of three years ending on September 30, 2022.

Secretarial Auditors

The Board pursuant to Section 204 of the Companies Act, 2013 had appointed V Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct the Secretarial Audit of the Company for FY22.They have confirmed their eligibility for the re-appointment. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark and is annexed to this Report as Annexure 5.

Pursuant to the SEBI circular vide no. CIR/CFD/CMD/1/27/2019 dated February 8, 2019, the Annual Secretarial Compliance Report for the financial year ended March 31, 2022, issued by V Sreedharan & Associates, Practicing Company Secretaries is attached as Annexure 6 to this Report and shall also be submitted to the stock exchanges where the shares of the Company are listed.

REPORTING OF FRAUD BY AUDITORS

During the year under review, no instances of fraud have been reported by the statutory auditors or secretarial auditors to the Audit Committee or to the Board pursuant to section 143(12) of the Companies Act, 2013, the details of which should form part of this report.

ANNUAL RETURN

In compliance with Section 92 and Section 134(3)(a) of the Companies Act, 2013 read with applicable Rules made thereunder, the Annual Return is available on the Company''s website https://www.syngeneintl.com/investors/share-holder-services/

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

As per section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee, comprising Professor Catherine Rosenberg (Chairperson), Dr Vijay Kuchroo and Vinita Bali. The Committee monitors and oversees various CSR initiatives of the Company.

Syngene''s CSR initiatives are based on the principle of making enduring impact through programs that promote education, science, social and economic inclusion and environmental sustainability. The Company is committed to innovation, science, affordability and access to healthcare. In line with this commitment and as a socially responsible organization, the Company has always invested in CSR programs aimed at making a difference to the lives of marginalized communities. Syngene''s CSR programs pivot around social welfare, environmental sustainability, healthcare and promoting education in the fields of science and medicine. The Company''s CSR activities this year have been executed directly and through Biocon Foundation. Biocon Foundation develops and implements healthcare, educational, infrastructure, rural development projects, promotes gender equality and safety of vulnerable sections of the society. The Company''s CSR policy is available on its website at https://www.syngeneintl.com/investors/corporate-governance/governance-reports-policies/. A detailed report on CSR activities is annexed to this Report as Annexure 7.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

With a view to ensuring that investors have access to standardized disclosures on ESG parameters, SEBI had, on May 10, 2021, recommended the adoption of "business responsibility and sustainability reporting framework (BRSR)". BRSR would become mandatory for the top 1000 listed companies (by market capitalization) from FY23. While the existing Business Responsibility Report (BRR) filing continues for FY22, listed entities have been given the option of adopting the new BRSR for FY22 in lieu of the BRR. The disclosures in BRSR are intended to enable businesses to engage more meaningfully with their stakeholders and encourage them to go beyond regulatory financial compliance and report on their environmental and social impacts. The Company has opted to voluntarily adopt BRSR for FY22. In compliance with Regulation 34(2)(f) of the SEBI Listing Regulations, the BRSR forms part of this Annual Report.

WHISTLEBLOWER POLICY/VIGIL MECHANISM

The Company''s Whistleblower policy allows employees, Directors and other stakeholders to report genuine grievances, corruption, fraud, misconduct, misappropriation of assets, and non-compliance with the code of conduct of the Company or any other unethical practices. The policy provides adequate

safeguard against victimization to the whistleblower and enables them to raise concerns to the Integrity Committee and provides an option of direct access to the Chairman of the Audit Committee. In order to maintain the highest level of confidentiality and foster an environment of honesty, the Company has appointed an outsourced agency Navex Global to receive the complaints and co-ordinate with the whistleblower, if required. During FY22, no individuals have been denied access to the Chairman of the Audit Committee.

The Whistlebower Policy is available on the Company''s website at https://www.syngeneintl.com/investors/corporate-governance/governance-reports-policies/

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Syngene has a strict Prevention of Sexual Harassment (POSH) Policy in accordance with the statutory requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is applicable to all employees including the Company''s contractual employees. The Company is committed to providing a workplace that is free from discrimination, harassment and victimisation, regardless of gender, race, creed, religion, place of origin, sexual orientation of a person employed or engaged with the Company. The Internal Committee (''IC'') has been constituted to consider and redress all complaints of sexual harassment at workplace. Employee sensitisation programs on POSH were conducted during the year. In FY22, one complaint was received and closed within the stipulated timeline.

SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS

During FY22 there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBI Listing Regulations.

SECRETARIAL STANDARD DISCLOSURE

The Company has complied with the provisions of applicable secretarial standards, issued by The Institute of Company Secretaries of India (ICSI).

GREEN INITIATIVE

We request all the shareholders to support the ''Green Initiative'' of the Ministry of Corporate Affairs and Syngene''s continued endeavors for greener environment by enabling service of Annual Report, AGM Notice and other documents electronically to your email address registered with your Depository Participant/ Registrar and Share Transfer Agent. We also request all the investors whose email ID is not registered to take necessary steps to register their email ID with the Depository Participant/ Registrar and Share Transfer Agent.

ACKNOWLEDGMENTS

We would like to place on record our deep sense of appreciation to Syngene employees for their contribution and services. We would like to thank all our clients, vendors, bankers, investors, media and other business associates for their continued support and encouragement during the year.

We also thank the Government of India; the Government of Karnataka; the Ministry of Information Technology and Biotechnology; the Ministry of Commerce and Industry; the Ministry of Finance and Corporate affairs; the Department of

Scientific and Industrial Research; Central Board of Indirect Taxes and Customs; the Reserve Bank of India; the Central Board of Direct Tax; SEZs (Special Economic Zones), BIRAC (Biotechnology Industry Research Assistance Council) and all other government agencies for their support during FY22 and look forward to their continued support in future.

For and on behalf of the Board

Kiran Mazumdar Shaw

Place: Bangalore Chairperson

Date: April 27, 2022 DIN:00347229


Mar 31, 2021

On behalf of the Board of Directors (the ''Board''}, it is our pleasure to present the 28th Annual Report of your Company, along with the Audited Financial Statements and Auditor''s Report for the Financial Year ended 31st March, 2021.

As we draw this exceptional year to a close, we are proud to reflect on a period in which science stepped up to a global challenge and delivered solutions that have saved lives and livelihoods, as well as limiting the damage to economies across the world. Your Company has played its part, applying its skills, knowledge and capabilities to the challenge. It has worked on treatments, diagnostics and vaccines for clients around the world.

As the pandemic took hold, the Company suspended operations for two weeks to introduce COVID-safe working protocols, allowing it to quickly return to its vital work. Our employees showed unprecedented commitment and resilience: adopting shift working to reduce density in the laboratories and working from home, where possible. Many, with the appropriate qualifications, volunteered to work in our dedicated RT-PCR testing laboratory serving the Bangalore community and, later, their colleagues through the onsite employee testing protocol.

Throughout the year, the Company has continued to innovate, publishing novel science in respected journals, building new client relationships and exploring new areas of science. We are immensely proud of the progress made in this extraordinary year and would like to take this opportunity to record our thanks to the executive team, the talented scientists and those around them who have made such important contributions when they were most needed.

FINANCIAL REVIEW

Your Company''s standalone performance during FY 2020-21, compared to the previous year is summarized below.

(Rs in Mn }

Particulars

31st March, 2021

31st March, 2020

Revenue from operations

21,794

20,119

Other Income

646

816

Total revenue

22,440

20,935

Total expenditure

15,094

13,952

Profit before Depreciation, Finance Costs, Exceptional items and Tax expense

7,346

6,983

Less: Depreciation and Interest

3,022

2,539

Profit before Exceptional items and Tax expense

4,324

4,444

Add: Exceptional items

350

713

Profit before Tax expense

4,674

5,157

Less: Tax expenses

637

1,042

Profit for the year

4,037

4,115

Other Comprehensive income

1,906

(1,916}

Total Comprehensive income

Revenue from operations excluding Export incentives

Earnings from operations (excluding Export incentives, Other income, Depreciation, Finance Costs, Exceptional items and Tax expense}

Profit for the year excluding exceptional gains (net of tax)

5,943

2,199

21,753

6,659

19,465

5,513

3,809

3,656

Key highlights of the Company''s financial performance during FY 2020-21 are as follows:

• Revenue from operations, excluding export incentives, increased by 12% (from Rs 19,465 Mn to Rs 21,753 Mn) driven by steady performance across all divisions

• Total Revenue increased by 7% (from Rs 20,935 Mn to Rs 22,440 Mn)

• Earnings from operations (excluding export incentives, other income, depreciation, finance costs, exceptional items and tax expense) increased by 21% (from Rs 5,513 Mn to Rs 6,659 Mn) mainly driven by lower material costs

• Profit after tax excluding exceptional gains increased by 4% (from Rs 3,656 Mn to Rs 3,809 Mn)

• Profit for the year after exceptional gains declined by 2% (from Rs 4,115 Mn to Rs 4,037 Mn)

A detailed financial performance analysis is provided in the Management Discussion and Analysis Report, which is part of this Annual Report.

OPERATIONAL REVIEW

Syngene International Limited is an integrated research, development and manufacturing services organization offering services across a wide spectrum of modalities including small and large molecules, antibody-drug conjugates (ADCs), and oligonucleotides. It operates at every step in the value chain. The strength of the Company lies in its highly qualified research teams, comprising over 4,700 scientists, and its state-of-the-art facilities, encompassing ~2 Mn. sq. ft., in three locations in India: Bangalore, Hyderabad and Mangalore. Syngene has four divisions: Discovery Services, Development Services, Manufacturing Services and the Dedicated Centres.

DISCOVERY SERVICES

Despite a temporary suspension of activities in the first quarter due to the COVID-19 pandemic, a robust performance was achieved for the full year by returning to near-normal operations promptly once protective measures were in place to ensure employee safety. The Company entered into new client collaborations while expanding the team strength and scope of activity for several existing client contracts. One of the key collaborations for the year was the agreement signed with Deerfield Discovery and Development Corporation (3DC). As part of this five-year collaboration, Syngene will provide end-to-end discovery and preclinical development solutions, spanning multiple therapeutic areas and modalities.

Key scientific accomplishments during the year include the successful delivery of two drug candidates for clinical development. Another project delivered a library of 600 compounds with a success rate of >95%.

The Company launched SynVent, a platform for fully integrated therapeutic discovery and development across large and small molecules. SynVent Integrated Drug Discovery services are designed to provide the most effective and efficient means to conduct target validation, translational interrogation, therapeutic discovery, and preclinical development for clients.

The first phase of the newly established research facility at Genome Valley, Hyderabad opened in August 2019 is operating close to full capacity. Genome Valley was India''s first purpose-built cluster for life sciences R&D activities and provides a vibrant ecosystem to drive scientific innovation and seamless delivery. Construction of the second phase was completed during the year, while work on the third phase is currently underway.

Throughout the year, Syngene played an active role in the fight against the COVID-19 pandemic by using its scientific expertise to develop diagnostics, treatments and vaccines for clients. Our research scientists in Discovery Services developed various types of proteins including S1, RBD, and N proteins to help diagnostic kit manufacturers develop effective kits for COVID-19.

The Company partnered with several organizations to support the fight against COVID-19:

• Collaboration with the Centre for Cellular and Molecular Biology to deliver high throughput next generation sequencing

• Collaboration with the National Centre for Biological Sciences to develop a novel human ACE 2 transgenic mouse that is anticipated to phenocopy the full spectrum of human COVID-19

• Collaboration with the Foundation for Neglected Disease Research to facilitate SARS-CoV-2 in vitro and in vivo research to develop monoclonal antibodies against COVID-19

DEVELOPMENT SERVICES

The Development Services division reported a steady performance for the year. New clients were added across the various development disciplines while existing clients established broader relationships by accessing more services. The scientific highlights for the year include critical contributions to the development of a drug to treat a genetic liver disease mainly found in children and progress the drug to phase III clinical trials/Food and Drug Administration (FDA) approval stage for

biopharmaceutical client Albireo Pharma, in terms of capability enhancement, a noteworthy milestone was the setting up and commissioning the Highly Potent Active Pharmaceutical ingredient (HPAPI) laboratory in Bangalore,

As part of our contribution to fighting the coronavirus, a voluntary licensing agreement was signed with Gilead Sciences inc, for the manufacturing and sale of its antiviral drug Remdesivir, Following the technology transfer, Development Services successfully completed the process validation and received Market Authorization Approval (MAA) and a license to manufacture Remdesivir under the brand name RemWin,

MANUFACTURING SERVICES

The Company''s Mangalore Active Pharmaceutical ingredient "(API)" manufacturing facility completed the qualification process as planned and is now a GMP-certified facility. Meanwhile, the Biologics unit improved its performance from the previous year, Several first-time client contracts have been signed offering prospects of further future business, Contracts were also signed for antiviral testing of consumer products,

DEDICATED R&D CENTERS

Syngene operates Dedicated R&D Centers for four clients: Amgen Inc,, Baxter Inc, Bristol-Myers Squibb (BMS) and Herbalife, During the year, the Dedicated R&D Centers delivered a healthy performance, primarily driven by growth in the BMS and Baxter accounts, For both these Dedicated Centers, the scope of engagement and the number of scientists were increased, and new facilities were established, A major milestone for the year was the extension of the collaboration with BMS to 2030, Despite the disruption caused by the pandemic, all the Dedicated Center R&D projects were completed according to expectations, including those that involved generation of crucial data for regulatory filing within strict target timelines,

SUBSIDIARY COMPANY/JOINT VENTURE

Syngene USA Inc, is a wholly owned subsidiary of Syngene, incorporated in fiscal year 2018 to have a firm foothold in the United States market and provide easy access to the Company''s clients based in the United States,

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 (''the Act'') and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, salient features of the financial statements, performance and financial position of subsidiary is given in Form AOC-1 as Annexure 1 to this Report, The Consolidated Financial Statements presented in this Annual Report include the financial results of the subsidiary,

DIVIDEND

Owing to the continuing uncertainty created by the second wave of COVID-19 pandemic in India, the Board of Directors has deemed it prudent not to declare a dividend for the financial

year 2020-21 in order to prioritise cash and maintain liquidity, continuing the prudent management approach adopted during the last financial year,

In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations"), the dividend distribution policy of the Company is available on the Company''s website at https://www,syngeneintl,com/investors/corporate-governance/ governance-reports-policies/, A copy of the policy is annexed to this Report as Annexure 2,

RELATED PARTY CONTRACTS OR ARRANGEMENTS

All contracts, arrangements and transactions entered into by the Company with related parties during FY 2020-21 were in the ordinary course of business and on an arm''s length basis, During the year, the Company did not enter into any transaction, contract or arrangement with related parties that could be considered material in accordance with the Company''s policy on dealing with related party transactions,

Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable, However, detailed disclosure on related party transactions as per IND AS 24 containing the name of the related parties and details of the transactions entered with such related parties have been provided as part of the notes to the financial statements provided in the Annual Report,

The Company has formulated the policy on ''Materiality of Related Party transactions and on dealing with Related Party Transactions'', and this is available at https://www,syngeneintl, com/investors/corporate-governance/governance-reports-policies/

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars, as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 3,

TRANSFER OF UNPAID AND UNCLAIMED DIVIDENDS TO INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs under Sections 124 and 125 of the Companies Act, 2013 requires dividends that are not encashed/ claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF), In FY 2020-21, there was no amount due for transfer to IEPF.

CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of the Company''s business. Your Company continues to be a leading Contract Research Organization (CRO) and a world-class partner delivering innovative scientific solutions.

LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements.

DEPOSITS

During the FY 2020-21, the Company did not accept any deposits covered under Chapter V of the Companies Act, 2013.

CREDIT RATING

During the year, CRISIL upgraded its rating on the longterm bank facilities of the Company from ''CRISIL AA/Positive outlook'' to ''CRISIL AA /Stable'' and reaffirmed its short-term rating at ''CRISIL A1 ''. Additionally, ICRA upgraded its rating from ''ICRA AA/Positive outlook'' to ''ICRA AA /Stable outlook'' on the long-term rating. The rating on the short-term facilities was reaffirmed at ''ICRA A1 ''.

PAID UP CAPITAL

During the financial year, the paid-up share capital of the Company remained unchanged and stood at Rs 4,000 Mn.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

HUMAN RESOURCES

Syngene''s multidisciplinary workforce is committed to operating safely and to world class quality standards. In these challenging circumstances, employees have shown commitment and resilience during the past twelve months, consistent with our values of excellence, integrity and professionalism. In FY 2020-21 the Company was conferred with ''Dream Companies to Work for Award'' in the pharmaceutical sector at the 29th edition of the World HRD Congress Awards for translating and combining vision with action in HR strategy and cultivating competencies for the future. The Company has also achieved certification as ''Great Place to work'' during the year. The headcount for year ending FY 2020-21 was approximately 5400 full-time employees, including more than 4700 scientists.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 4.

Particulars of employee remuneration, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of this Report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding this information, is being sent to the shareholders of the Company and others entitled thereto. The information is available for inspection at the registered office of the Company during working hours up to the date of the ensuing AGM. Any shareholder interested in obtaining such information can write to the Company Secretary.

EMPLOYEE STOCK OPTION PLAN /RESTRICTED STOCK UNITS PLAN

The Board of Directors of the Company had formulated the Syngene Employee Stock Option Plan 2011 (hereinafter referred to as the "ESOP Plan") which was approved by the members of the Company on 14th December, 2011 and further ratified by the members subsequent to the Initial Public Offering ("IPO") on 5th December, 2015. The ESOP Plan is administered by the Syngene Employee Welfare Trust ("the Trust") under the instructions and supervision of the Nomination and Remuneration Committee ("NRC"). The Trust had subscribed to equity shares of the Company on 31st October, 2012, using the proceeds from interest free loan of Rs 150 million obtained from the Company. The NRC, on various occasions, has granted options to eligible employees of the Company through the Trust. During the financial year, there was no change in the ESOP Plan. During FY 2020-21, no options were granted to eligible employees under the ESOP Plan. However, 620,225 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options. The ESOP Plan complies with SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI (SBEB) Regulations, 2014").

The shareholders, at the 26th Annual General Meeting ("AGM") of the Company held on 24th July, 2019 had approved the "Syngene Restricted Stock Unit ("RSU") Long Term Incentive Plan FY 2020" (hereinafter referred to as "the RSU Plan") designed to drive performance to achieve the Board approved strategic plan. The RSU Plan covers key employees who, by virtue of their roles, influence the accomplishment of the strategic plan. The RSU Plan is administered by the Trust. The shareholders have also approved at the 26th AGM the issue and

allotment of further equity shares to the Trust over a period of time for the purpose of implementation of the RSU Plan.

Vide special resolution passed through postal ballot on 30th August, 2020, the shareholders have approved variations to the RSU Plan to streamline the plan with similar plans adopted by group companies to achieve uniformity in the approach to rewarding employees across the group. The terms of the modified plan are not detrimental to the interests of the employees of the Company. The RSU Plan is in compliance with the provisions of SEBI (SBEB) Regulations, 2014.

The Company has granted 3,184,649 RSUs as on 31st March, 2021 under the RSU Plan. However, none of these RSUs had vested during the year.

The details of both plans form part of the notes to accounts of the Financial Statements in this Annual Report. The Company has obtained a certificate from the statutory auditors of the Company that both the plans have been implemented in accordance with SEBI (SBEB) Regulations, 2014 and are in accordance with the resolutions passed by the shareholders. As required under Regulation 14 of the above-mentioned regulations, the applicable disclosures as on 31st March, 2021 with respect to both the plans are available on the website of the Company at https://www.syngeneintl.com/investors/share-holder-services/

CORPORATE GOVERNANCE REPORT

Syngene''s Corporate Governance report reflects a

strong foundation of its values-led culture comprising professionalism, integrity and excellence. Fair, transparent and ethical governance, robust accounting policies, individual accountability and adherence to prevailing laws are integral to our business practices. This has provided sound foundations for building a sustainable business trusted by stakeholders and attracting and retaining financial and human capital. The Board remains the custodian of this trust and acknowledges its responsibilities towards the growing stakeholder fraternity for sustainable long-term wealth creation.

The Company''s report on corporate governance for the Financial Year ended 31st March, 2021 as per regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

AUDITOR''S CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V(E) of SEBI Listing Regulations, the auditor''s certificate on compliance with the requirement of corporate governance is enclosed as Annexure 5 to this Report. The auditor''s certificate for FY 2020-21 does not contain any qualification, reservation or adverse remarks.

DIRECTORS

The shareholders, at the 27th Annual General Meeting of the Company held on 22nd July, 2020 regularised the appointment of Jonathan Hunt (DIN: 07774619) as the Managing Director and Chief Executive Officer with effect from 1st April, 2020. Kiran Mazumdar Shaw (DIN: 00347229), who was the Chairperson and Managing Director of the Company up to 31st March, 2020 transitioned into the position of Non-Executive Chairperson with effect from 1st April, 2020. Her appointment as Non-Executive Chairperson (liable to retire by rotation) was regularised by the shareholders at the 27th Annual General Meeting of the Company held on 22nd July, 2020.

Dr Bala S Manian (DIN: 01327667), Independent Director retired from Board w.e.f 15th July, 2020, on attaining the age of 75 years. The Board has placed on record its warm appreciation for the outstanding contribution made by him in the evolution and success of the Company during his tenure as Director on the Board of the Company.

Professor Catherine Rosenberg (DIN: 06422834), Non-Executive Director will retire by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for re-appointment. The Board recommends her re-appointment as indicated in the Annual General Meeting Notice. The brief resume of Professor Catherine Rosenberg is annexed to the AGM Notice in pursuance of Regulation 36(3) of SEBI Listing Regulations.

During the year, the Board of Directors appointed Vinita Bali as the Lead Independent Director.

KEY MANAGERIAL PERSONNEL

As on 31st March 2021, the Key Managerial Personnel (KMP) of the Company appointed under the provisions of Section 203 of the Companies Act, 2013, are Jonathan Hunt, Managing Director and Chief Executive Officer, Sibaji Biswas, Chief Financial Officer and Priyadarshini Mahapatra, Company Secretary and Compliance Officer.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy on appointment and remuneration of directors, key management personnel and other persons provides guidance to human resource management, thereby aligning plans for the strategic growth of the Company. The Company''s policy on appointment of directors and remuneration, including the criteria for determining qualifications, positive attributes, independence and other matters, as provided under Section 178 (3) of the Companies Act, 2013 is formulated by the Board on the recommendation of the Nomination and Remuneration Committee (NRC). The Policy was reviewed and updated by the Board on NRC''s recommendation at its meeting held on

27th April, 2021. The Policy has been uploaded on the website of the Company and is accessible at https;//www.syngeneintl. com/investors/corporate-governance/governance-reports-policies/

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under section 149 (6) and (7) of the Companies Act, 2013 and the SEBI Listing Regulations. The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs for the inclusion of their names in the data bank of Independent Directors within the due date.

BOARD DIVERSITY

A diverse Board enables efficient functioning through its access to broad perspectives and diverse thought processes underpinned by a range of scientific, industrial and management expertise, gender, knowledge and geographical origins. The Board recognises the importance of a diverse composition and has adopted a Board Diversity Policy which sets out the approach to diversity. The Board diversity policy of the Company is available on the website of the Company at https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board as a whole, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated by external consultants - Egon Zehnder, a leadership advisory firm on board matters, engaged by the Nomination and Remuneration Committee. The evaluation was conducted based on the criteria and framework agreed by the Committee.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairperson of the Company was evaluated, taking into account the views of executive and non-executive directors. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors, the Committees and the Board as a whole. The details of the evaluation process is provided in the Corporate Governance Report which forms part of this Annual Report.

NUMBER OF MEETINGS OF THE BOARD

The Board met four times during the year under review. The details of Board meetings and attendance of the Directors is provided in the Corporate Governance Report.


AUDIT COMMITTEE

The Audit Committee has reviewed the accounts for the year ended 31st March, 2021. The Board accepted all recommendations made by the Audit Committee.

The members of the Audit Committee are Paul Blackburn (Chairman), Vinita Bali and Sharmila Abhay Karve, Independent Directors. The list and composition of the various other Board-level Committees are provided in the Corporate Governance Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has laid down guidelines, policies, processes and structures to enable implementation of appropriate internal financial controls across the organisation, commensurate with its size and the nature of its operations. These control processes enable and ensure the orderly and efficient conduct of the Company''s business, and provide reasonable assurance with regard to safeguarding of assets, prevention and detection of fraud and errors, the accuracy and completeness of the accounting records, timely preparation of reliable financial information, compliance with applicable statutes, executing transactions with proper authorization and ensuring compliance with corporate policies. There are control processes both in manual and IT applications, including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and not be detected. Also, evaluation of the internal financial controls is subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedures may deteriorate.

The Company has, in all material respects, a robust internal financial controls system. The internal financial controls operate effectively based on the criteria established by the Company, considering the essential components of internal control stated in the guidance note on audit of internal control over financial reporting issued by the Institute of Chartered Accountants of India. The Company has appointed Ernst & Young LLP to oversee and carry out internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year and approved by the Audit Committee. The conduct of internal audit is oriented towards the review of internal controls and risks in the Company''s operations.

RISK MANAGEMENT POLICY

in compliance with Regulation 21 of the SEBI Listing Regulations, the Board of Directors has duly constituted the Risk Management Committee ("the Committee") to oversee the enterprise-wide risk management framework.

Syngene has an enterprise risk management framework based on which the enterprise risks, associated mitigation plans and action updates are reviewed every quarter by the Risk Management Committee. Specific risk areas are also reviewed in detail in each such meeting. The Audit Committee has additional oversight in the area of financial risks and controls. For detailed terms of reference, please refer to the Corporate Governance Report which forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on 31st March, 2021.

in compliance with Section 134 (5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby confirm the following:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with a proper explanation of material departures.

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The Directors have prepared the annual accounts on a going concern basis.

(e) The Directors have laid down internal financial controls to be followed by the Company which are adequate and operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS STATUTORY AUDITORS

B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) who were appointed at the 23rd AGM held on 30th June, 2016 as statutory auditors of the Company to hold office for a term of five consecutive years, would be completing their first term of appointment upon conclusion of the ensuing Annual General Meeting of the Company and accordingly are eligible for re-appointment. The Audit Committee has proposed, and the Board of Directors of the Company has recommended the appointment of BSR & Co. LLP as the statutory auditors of the Company to hold office for a second term of five consecutive years from the conclusion of the ensuing Annual General Meeting scheduled on 21st July, 2021 until the conclusion of the Annual General Meeting to be held in the year 2026, subject to the approval of the shareholders.

The Company has also received letter from BSR & Co. LLP, Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 141 (3) of the Act and that they are not disqualified from appointment as Statutory Auditors of the Company.

The Auditors'' Report on the Financial Statements of the Company for the year ended 31st March, 2021 does not contain any qualifications, reservations or adverse remarks. The Auditor''s Report is enclosed with the Financial Statements and forms part of the Annual Report.

INTERNAL AUDITORS

The Board, at its meeting held on 22nd October, 2019, had re-appointed Ernst & Young LLP as the Company''s internal Auditors for a tenure of three years ending on 30th September, 2022.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act, 2013, the Board had appointed V. Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct the Secretarial Audit of the Company for FY 2020-21. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks and is annexed to this Report as Annexure 6.

Pursuant to the SEBI circular no. CIR/CFD/CMD/1/27/2019 dated 8th February, 2019, the Annual Secretarial Compliance Report for the financial year ended 31st March, 2021, issued by V. Sreedharan & Associates, Practicing Company Secretaries

The Company''s CSR Policy is available on its website at https:// www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/

The initiatives undertaken by the Company on CSR activities during the year are set out in Annexure 8 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report ("BRR") forms part of this Annual Report. The BRR contains a detailed report describing the initiatives taken by the Company on business responsibilities vis-a-vis the nine principles of the National Voluntary Guidelines on social, environmental and economic responsibilities of business framed by the Ministry of Corporate Affairs.

COVID-19 PANDEMIC

The COVID-19 pandemic has emerged as a global challenge. As a science-based organization, the Company was quick to understand the complexity of the problems posed by the pandemic. The Company committed itself to protecting the workforce, minimizing business disruption, playing its part in improving human health, and contributing to the Government''s initiatives to combat COVID-19. A three-pronged strategy was adopted to combat COVID-19 including: protecting employees and contractors; ensuring business continuity; and leveraging the Company''s R&D capabilities. Several proactive initiatives were undertaken including providing information and awareness to educate and drive behavior changes, implementing physical distancing, zoning, introducing a shift system for onsite staff, implementing work from home wherever possible, provision of PPE and masks, thermometers for temperature monitoring, and intensive sanitisation of premises. The Company has also extended counselling and self-help services providing mental and emotional support to employees. The potential impact on business, the details of initiatives taken and the strategy to combat the pandemic have been separately provided in the Annual Report under the caption "Response that made a difference.

WHISTLEBLOWER POLICY/VIGIL MECHANISM

The Company''s whistleblower policy allows employees, Directors and other stakeholders to report genuine grievances, corruption, fraud, misconduct, misappropriation of assets, and non-compliance with the code of conduct of the Company or any other unethical practices. The policy provides adequate safeguard against victimisation to the whistleblower and enables them to raise concerns to the Integrity Committee and provides an option of direct access to the Chairman of

is attached as Annexure 7 to this Report and shall also be submitted to the stock exchanges where the shares of the Company are listed.

REPORTING OF FRAUD BY AUDITORS

During the year under review, no instances of fraud have been reported by the statutory auditors or secretarial auditors to the Audit Committee or to the Board pursuant to Section 143(12) of the Companies Act, 2013, the details of which should form part of this report.

ANNUAL RETURN

In compliance with Section 92 and Section 134 (3) (a) of the Companies Act, 2013 read with applicable Rules made thereunder, the Annual Return as on 31st March, 2021 is available on the Company''s website at https://www.syngeneintl. com/investors/share-holder-services/.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility (CSR) Committee ("the Committee") comprising Professor Catherine Rosenberg (Chairperson), Dr Vijay Kuchroo and Vinita Bali. The Committee monitors and oversees various CSR initiatives of the Company.

The Company''s CSR initiatives are based on the principle of making a long-term impact through programmes that promote education, science, social and economic inclusion and environmental sustainability. The Company is committed to innovation, science and access to affordable healthcare. In line with this commitment and as a socially responsible organisation, the Company has invested in CSR programmes aimed at making a difference to the lives of marginalised communities.

In view of the ongoing pandemic, the Company, recognising its responsibility towards the stakeholders, undertook COVID testing as part of its CSR activities to add to the Government''s COVID testing capacity. The Company''s CSR activities have been executed this year directly and through Biocon Foundation, which develops and implements programmes in the areas of healthcare, education, infrastructure projects, rural development, promotion of art and culture, gender equality and safety of the vulnerable sections of the society.

the Audit Committee, In order to maintain the highest level of confidentiality and foster an environment of honesty, the Company has appointed an outsourced agency Navex Global to receive the complaints and co-ordinate with the whistleblower, if required, During FY 2020-21, no individuals have been denied access to the Chairman of the Audit Committee,

The Whistlebower Policy is available on the Company''s website at https://www.syngeneintl.com/investors/corporate-governance/governance-reports-policies/

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013

Syngene has a strict Prevention of Sexual Harassment Policy (POSH) in accordance with the statutory requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, The Policy is applicable to all employees including the Company''s contractual employees, The Company is committed to providing a workplace that is free from discrimination, harassment and victimisation, regardless of gender, race, creed, religion, place of origin, sexual orientation of a person employed or engaged with the Company. The Internal Committee (''IC'') has been constituted to handle all complaints of sexual harassment in the workplace, Employee awareness programmes on POSH were conducted during the year, In FY 2020-21, the Company received one complaint, which was closed within the stipulated timeline,

SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS

During FY 2020-21 there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future,

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified as per provisions of Section 164 (2) of the Companies Act, 2013, Your Directors have made the necessary disclosures, as required under various provisions of the Act and SEBI Listing Regulations,

SECRETARIAL STANDARD DISCLOSURE

The Company has complied with the provisions of applicable secretarial standards, issued by the Institute of Company Secretaries of India (ICSI),

GREEN INITIATIVE

The Company invites all shareholders to support the ''Green Initiative'' of the Ministry of Corporate Affairs and Syngene''s continued endeavors to reduce its environmental footprint by supporting the distribution of the Annual Report, AGM Notice and other documents electronically to the email address registered with the Depository Participant/ Registrar and Share Transfer Agent, The Company invites all the investors whose email ID is not registered to take necessary steps to register their email ID with the Depository Participant/ Registrar and Share Transfer Agent,

ACKNOWLEDGMENTS

We would like to place on record our deep appreciation to Syngene employees for their commitment and contribution during this exceptional year, We would like to thank all our clients, vendors, bankers, investors, media and other business associates for their continued support and encouragement during the year,

We also thank the Government of India, the Government of Karnataka, Government of Telangana, the Ministry of Information Technology and Biotechnology, the Ministry of Commerce and Industry, the Ministry of Finance and Corporate Affairs, the Department of Scientific and Industrial Research, Central Board of Indirect Taxes and Customs, the Reserve Bank of India, the Central Board of Direct Tax, SEZs (Special Economic Zones), BIRAC (Biotechnology Industry Research Assistance Council) and all other government agencies for their support during FY 2020-21 and look forward to their continued support in future,

For and on behalf of the Board

Kiran Mazumdar Shaw

Place: Bangalore Non-Executive Chairperson

Date: 27th April, 2021 DIN: 00347229


Mar 31, 2019

Board's Report

Dear Members,

On behalf of the Board of Directors (the 'Board'), it's our immense pleasure to present the 26th Annual Report of your Company, along with the Audited Financial Statements and Auditors' Report for the Financial Year ended March 31, 2019. We are also delighted to share that 'Investing in Partnerships' remains a strategic purpose at Syngene to drive sustained value creation. By continually nurturing all our relationships through investments in customer relations, scientific talent, infrastructure, quality, safety systems, logistics, supply chain, information technology and social welfare, we are confident of cementing our position as a respected and relevant integrated scientific solutions provider.

FINANCIAL REVIEW

Your Company's standalone performance during FY19, compared to the previous year is summarised below.

 

 

Rs. in Million

Particulars

March 31, 2019

March 31, 2018

Total revenue

19,007

14,849

Total expenditure

12,900

9,587

Profit before interest, depreciation and tax

6,107

5,262

Depreciation & Interest

1,965

1,541

Profit before tax

4,142

3,721

Tax expenses

835

670

Profit for the year

3,307

3,051

Other Comprehensive Income

(702)

87

Total Comprehensive Income

2,605

3,138

Key highlights of the Company's financial performance during FY19 are as under:

> Revenue increased by 28% (from Rs. 14,849 Mn to Rs. 19,007 Mn)

> Earnings before interest tax depreciation and amortisation (EBITDA) increased by 16% (from Rs. 5,262 Mn to Rs. 6,107 Mn)

> Profit after tax increased by 8% (from Rs. 3,051 Mn to Rs. 3,307 Mn)

A detailed financial performance analysis is provided in the Management Discussion & Analysis Report, which is part of this Annual Report.

OPERATIONAL REVIEW

During the year, the Company's investment in capability and capacity enhancements enabled it to offer more innovative, sophisticated and integrated solutions to its global clients as well as deliver better value for its stakeholders at large. By remaining committed towards innovation, talent development, quality adherence, safety, regulatory compliance and cost optimisation, the Company successfully partnered its clients on their scientific programmes. Concerted efforts were also made in sales and marketing to drive client engagement. The Company's collaborative approach has enabled it to strengthen its position as a trusted strategic partner. This is reflected in the addition of new clients, wider scope of engagement with existing clients and successful foray into new markets.

The year saw considerable traction in the Company's dedicated R&D Centre vertical. The collaboration for the Baxter Global Research Centre (BGRC) was renewed up to 2024 and the scope of engagement was also enhanced. A new laboratory was commissioned, in line with the new agreement, to strengthen the existing capacity of BGRC to work on more complex projects. The extension of collaborations with Bristol Myers-Squib (BMS) and Amgen achieved in FY18 were also streamlined, resulting in higher revenues. As per the new agreement with BMS, a new facility was commissioned. This facility is spread over 25,000 sq. ft. comprising laboratory and office facilities and houses an additional team of about 75 Syngene scientists. The Company successfully completed the development and clinical supplies manufacturing of drug product for Amgen, which has been filed as an IND (Investigational New Drug) application with USFDA, by Amgen.

The discovery research business got a significant impetus driven by contract renewals, deeper engagement with existing clients as well new client wins. The most significant achievement was the renewal of the full-time equivalent (FTE) contract with Merck KGaA up to 2022. The new collaboration entered into with Artelo Biosciences Inc. for the discovery and development of novel oncology drugs was another noteworthy accomplishment.

The Company's chemical development and biologies manufacturing sections reported good performance driven by differentiated capabilities, process improvements and confirmation of new orders. The Company established a National Centre for Advanced Protein Studies (CAPS) at its Bengaluru facility. CAPS is funded by Biotechnology Industry Research Assistance Council (BIRAC), a government agency empowering emerging biotech enterprises in India. The upcoming commercial API manufacturing unit at Mangaluru is progressing as per schedule and is expected to be operational by the end of FY20.

Adherence to quality and compliance is one of the cornerstones of Syngene's success. The Company diligently complies with global regulatory requirements and continues to impress regulatory authorities and auditors with the quality of its facilities and its adherence to various GxP requirements. During the year, Syngene cleared a USFDA inspection of its formulations, stability and quality control units. This is the Company's seventh successful USFDA inspection over the past four years. The Company also invested in electronic Quality Management System (e-QMS) tools to strengthen its quality focus.

SUBSIDIARY COMPANY/JOINT VENTURE

Syngene USA Inc. is a wholly-owned subsidiary, incorporated in FY18, to have a firm foothold in the US market and allow easy access to its clients based in that region.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 ('the Act') and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, salient features of the financial statements, performance and financial position of subsidiary is given in Form AOC-1 as Annexure 1 to this Report. The Consolidated Financial Statements presented in this Annual Report include the financial results of the subsidiary.

BONUS ISSUE

In commemoration of the completion of 25 years of the Company, your directors at their meeting held on April 24, 2019, recommended issue of bonus shares in the proportion of 1 (One) new Equity Share of the Company of Rs.10 each fully paid for every 1 (One) existing Equity Share of the Company of Rs. 10 each held by the Members as on the Record Date fixed by the Board, by capitalizing a part of the Free Reserves.

Consequent to the proposal of issue of bonus shares, the authorised share capital of the Company was proposed to be increased from Rs. 2,500 Mn. (250 Mn. equity shares of Rs. 107-each) to Rs. 5,000 Mn. (500 Mn. equity shares of Rs. 10/-each). Your directors have decided to seek the approval of the shareholders for the above proposals by way of postal ballot.

DIVIDEND

The Board has recommended a Final Dividend @5% (i.e. Rs 0.50/- per share post-bonus) for FY19. The total dividend pay out will amount to approximately Rs. 241 Mn (including dividend distribution tax). The dividend, if approved at the Annual General Meeting (AGM), will be paid to those members whose name appears in the Company's Register of Members as on the record date of July 17, 2019, and the dividend pay- out date is July 31, 2019.

In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure requirement) Regulations, 2015 ("SEBI Listing Regulations"), the dividend policy of the Company is available on the Company's website at http://www.Syngeneintl .com/investor-relations/ corporategovernance. A copy of the same is annexed to this Report as Annexure 2.

RELATED PARTY CONTRACTS OR ARRANGEMENTS

There were no materially significant related party transactions entered between the Company, Directors, management and their relatives, except for those disclosed in the financial statements.

All the contracts/arrangements/transactions entered by the Company with the related parties during FY19 were in the ordinary course of business and on an arm's length basis.

Accordingly, particulars of contracts or arrangements with related parties referred to in section 188(1) along with the justification for entering into such a contract or arrangement in Form AOC-2 does not form a part of the Report.

The Company formulated the policy on 'Materiality of Related Party' transactions and on dealing with Related Party Transactions', and the same is available at http://www.Syngeneintl.com/investor-relations/corporate-governance

The details of related party disclosures form part of the notes to the Financial Statements provided in the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars, as prescribed under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 3.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs under section 124 and 125 of the Companies Act, 2013 requires dividends that are not encashed/ claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF). In FY19, there was no amount due for transfer to IEPF

CHANGE IN NATURE OF BUSINESS

There has been no change in the Company's nature of business. Your Company continues to be one of the largest and fastest growing Contract Research Organisation (CRO) in the world.

LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements.

DEPOSITS

During the FY19, the Company did not accept any deposits covered under Chapter V of the Companies Act, 2013.

CREDIT RATING

CRISIL has maintained it's 'CRISIL AA/positive' rating on the banking facilities availed by Syngene from various banking/ financial institutions. The rating on the short-term facilities was reaffirmed at 'CRISIL A1+'.

PAID UP CAPITAL

During the financial year, the paid-up share capital stood at Rs. 2,000 Mn.

MATERIAL CHANGES AND COMMITMENTS

No other material changes and commitments have occurred after the closure of the financial year till the date of this Report, which may affect the financial position of the Company.

HUMAN RESOURCES

Your Company considers its people its biggest asset. As on March 31, 2019, it had 4,619 full-time employees, including 3,996 scientists. This diverse talent pool of scientific and non- scientific professionals and continual investments in growing their capabilities, supports the business in achieving sustainable growth. In FY19, your Company was conferred the 'Best Leadership Development Program for Middle Management Award' by the World HRD Congress for its proactive approach towards building leadership skills for middle level managers. Syngene continues to foster an engaging work environment to attract and retain the best talent. Going forward, the Company intends to keep driving significant growth with its strong intellectual strength and deep knowledge base.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 4.

Particulars of Employees' Remuneration, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the said information, was sent to the shareholders of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company during working hours up to the date of the ensuing AGM. Any shareholder interested in obtaining such information may write to the Company Secretary in this regard.

EMPLOYEE STOCK OPTION PLAN

Syngene's Employee Stock Option Plan ("the Plan") is administered by the Syngene Employee Welfare Trust ("the Trust") under the instructions and supervision of the Nomination and Remuneration Committee (NRC). The Trust subscribed 66,80,000 equity shares of the Company on October 31, 2012. The NRC, on various occasions, had granted options to various eligible employees of the Company through the Trust. The options under each tranche will vest in the ratio of 25%, 35% and 40% at the end of the second, third and fourth year from the date of each grant, respectively. The exercise period under each tranche is three years from the date of each vesting.

During the financial year, there was no change in the Plan and it complies with SEBI (Share Based Employee Benefits) Regulation, 2014. A total of 191,668 options were granted to eligible employees, and 1,027,963 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options. Further, the Company has obtained a certificate from the statutory auditors of the Company that the scheme has been implemented in accordance with SEBI (Share

Based Employee Benefits) Regulation, 2014 and in accordance with the resolution passed by the shareholders.

As required under Regulation 14 of the above said Regulation, the applicable disclosure as on March 31, 2019 is annexed to this Report as Annexure 5. The details of the Plan form part of the notes to accounts of the Financial Statements in this Annual Report.

CORPORATE GOVERNANCE REPORT

Syngene's Corporate Governance report reveals the philosophy of the Company and its unceasing dedication to ethical business practices across the organisation.

The Company consistently follows good governance practices based on fairness, integrity, transparency, professionalism, honesty and accountability in all its business practices and dealings. The Company's corporate governance framework focusses on adequate and timely disclosures, transparent and robust accounting policies and a strong and Independent Board to maximise shareholders' benefits.

The Company's report on corporate governance for the Financial Year ended March 31, 2019 as per regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V(E) of SEBI LODR, the auditors' certificate on compliance with the requirement of corporate governance is enclosed as Annexure 6 to this Report. The auditors' certificate for FY19 does not contain any qualification, reservation or adverse remarks.

DIRECTORS

I. Appointment

During the Financial Year, no appointment has been made.

II. Continuation of Directorship

During the financial year, to comply with the provision of Regulation 17(1 A) of the SEBI (Listing Obligations and Disclosure Requirement) (Amendment) Regulations, 2018, ("the SEBI Listing Regulations"), notified by the Securities Exchange Board of India (SEBI) on May 9, 2018, and which is effective from April 1, 2019, the Company has obtained shareholders' approval via postal ballot for continuation of directorship of Russell Walls and Suresh Talwar, as Non-Executive Independent Directors, who had attained the age of 75 (seventy five) before March 31, 2019 till the conclusion of 26th Annual General Meeting.

III. Re-appointment

The shareholders, at an Extraordinary General Meeting held on September 11, 2014, had appointed Paul Blackburn as an Independent Director for a tenure of five years i.e. commencing from the date of appointment till the conclusion of the forthcoming 26th AGM scheduled on July 24, 2019.

The Board at its meeting held on April 24, 2019, has re-appointed Paul Blackburn as an Independent Director for another term of five years commencing from conclusion of the 26th AGM till the conclusion of 31st AGM proposed to be held in 2024 and he will not be liable to retire by rotation.

The brief resume of the Director seeking appointment/ re-appointment at the ensuing AGM, in pursuance of Regulation 36(3) of SEBI LODR, is annexed to the AGM Notice.

IV. Retirement

Prof. Catherine Rosenberg shall retire by rotation at the ensuing AGM and is eligible for re-appointment. The Board recommends her re-appointment and the same forms part of the AGM Notice.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Kiran Mazumdar Shaw, Managing Director, Jonathan Hunt, Whole-time Director and CEO, M. B. Chinappa, Chief Financial Officer and Mayank Verma, Company Secretary.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's policy on Director's appointment and remuneration, including criteria for determining qualifications, independence and other matters, as provided under Section 178(3) of the Companies Act, 2013, is given as Annexure 7 with this report and is also available on the Company's website at http://www.Syngeneintl.com/investor-relations/ corporategovernance.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Company's Independent directors confirming that they meet with the criteria of independence as prescribed under section 149 (6) & (7) of the Companies Act, 2013 and SEBI Listing Regulations.

BOARD DIVERSITY

A diverse Board enables efficient functioning through differences in perspectives and skills and fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background. The Board recognises the importance of a diverse composition and has adopted a 'Board Diversity Policy', which sets out the approach to diversity. The Board Diversity Policy of the Company is available at http://www.Syngeneintl.com/ investor-relations/corporate-governance.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The details of said evaluation has been enumerated in the Corporate Governance report that forms part of this Annual Report. The outcome of the Board evaluation for FY19 was discussed by the Independent Directors, Nomination and Remuneration Committee and the Board at their respective meeting held on January 22, 2019.

NUMBER OF MEETINGS OF THE BOARD

The Board met 4 (four) times during the year under review. The details of Board meetings and attendance of the Directors is provided in the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee has reviewed the accounts for the year ended March 31, 2019. The Board accepted all recommendations made by the Audit Committee.

The members of the Audit Committee are Paul Blackburn (Chairperson), Russell Walls and Suresh Talwar, all Independent Directors. The list and composition of the various other Board-level Committees are provided in the Corporate Governance Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company had laid down certain guidelines, policies, processes and structures to enable implementation of appropriate internal financial controls across the organisation. These control processes enable and ensure the orderly and efficient conduct of the Company's business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information. There are control processes both in manual and IT applications including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and not be detected. Also, evaluation of the internal financial controls is subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedures may deteriorate.

The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control stated in the guidance note on audit of internal control over financial reporting issued by the Institute of Chartered Accountants of India.

RISK MANAGEMENT POLICY

In compliance with Regulation 21 of the SEBI (Listing Obligation and Disclosure Requirements), 2015, the Board of Directors has constituted the Risk Management Committee ("the Committee") on January 22, 2019 to overlook the enterprise-wide risk management framework. Previously this was reviewed by Audit & Risk Committee.

Syngene has in place an enterprise-wide risk management framework that provides a holistic approach to the best of its capabilities. The Committee identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. For detailed terms of reference, please refer Corporate Governance Report which forms part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company's internal financial controls were adequate and effective as on March 31, 2019.

In compliance with Section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby confirm the following:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS

Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants (ICAI Registration No. 101248W/W-100022) were appointed as Statutory Auditors of the Company at the 23rd AGM held on June 30, 2016, to hold office from the conclusion of 23rd AGM till the conclusion of 28th AGM proposed to be held in 2021. The Auditors' Report on the Financial Statements of the Company for the year ended March 31, 2019 does not contain any qualification, reservation or adverse remark. The Auditors' Report is enclosed with the Financial Statements and forms part of the Annual Report.

Internal Auditors

The Board at its meeting held on October 20, 2016 had appointed M/s. Ernst& Young LLP as the Company's Internal Auditors for a period of three years.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013, the Board had appointed M/s. V. Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct the Secretarial Audit of the Company for FY19. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark and is annexed to this Report as Annexure 8.

REPORTING OF FRAUD BY AUDITORS

During the year under review, neither the statutory auditors nor secretarial auditors have reported to the Audit Committee any material fraud on the Company by its officers or employees under section 143(12) of the Companies Act, 2013, the details of which need to be provided in this report.

EXTRACT OF ANNUAL RETURN

In compliance with Section 92 and Section 134(3)(a) of the Companies Act 2013 read with applicable Rules made thereunder, the Annual Return is available at the Company's website http://www.Syngeneintl.com/investor-relations/  corporate-governance and also annexed as to this report as Annexure 10.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34of SEBI LODR, the Management Discussion and Analysis Report forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

As per section 135 of the Companies Act, 2013, the Company constituted a Corporate Social Responsibility Committee, comprising Dr. Bala Manian (Chairman), Suresh Talwar, Dr. Vijay Kuchroo, Vinita Bali and Prof. Catherine Rosenberg. The Committee monitors and oversees various CSR initiatives of the Company.

The Company's CSR initiatives are based on the principle of making a long-term impact through programmes that promote social and economic inclusion. The Company is committed to innovation and access to affordable healthcare. In line with this commitment and as a socially responsible organisation, the Company invested in CSR programmes aimed at making a difference to the lives of marginalised communities.

The Company's CSR activities are executed through Biocon Foundation, which develops and implements programmes in the areas of healthcare, education, infrastructure projects, rural development, promotion of art and culture, gender equality and safety of the vulnerable sections of the society.

The Company's CSR policy is available on its website at http:// www.Syngeneintl.com/investor-relations/corporate-governance. A detailed report on CSR activities is annexed to this Report as Annexure 10.

BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report ("BRR") forms part of this Annual Report. The BRR contains a detailed report describing the initiatives taken by the Company on business responsibilities vis-a-vis the nine principles of the National Voluntary Guidelines on social, environmental and economic responsibilities of Business framed by the Ministry of Corporate Affairs.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company's Whistle Blower policy allows employees, Directors and other stakeholders to report matters such as genuine grievances, corruption, fraud, misconduct, misappropriation of assets, and non-compliance of code of conduct of the Company or any other unethical practices. The Policy provides adequate safeguard against victimisation to the Whistle Blower and enables them to raise concerns to the Integrity Committee and also provides an option of direct access to the Chairperson, Audit Committee. Syngene has engaged "In Touch India, Ernst & Young" to provide online platform to raise complaints by the whistle blower. During FY19, none of the personnel have been denied access to the Chairman of the Audit Committee.

The Whistle Blower Policy is available on the Company's website at http://www.Syngeneintl.com/investor-relations/corporate-governance.

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013

Syngene has a strict Prevention of Sexual Harassment Policy (POSH) in accordance with the statutory requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is applicable to all employees including the Company's contractual employees. The Company is committed to providing a workplace that is free from discrimination, harassment and victimisation, regardless of gender, race, creed, religion, place of origin, sexual orientation of a person employed or engaged with the Company. The Internal Committee ('1C') has been constituted to consider and redress all complaints of sexual harassment at workplace. Employee sensitisation programmes on POSH were conducted during the year. In FY19, 5 cases were reported under POSH and all have been resolved.

SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS

During FY19, there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBILODR.

SECRETARIAL STANDARD DISCLOSURE

The Company has complied with the provisions of applicable secretarial standard, issued by The Institute of Company Secretaries of India (ICSI).

GREEN INITIATIVE

We request all the shareholders to support the 'Green Initiative' of the Ministry of Corporate Affairs and Syngene's continuance towards greener environment by enabling service of Annual Report, AGM Notice and other documents electronically to your email address registered with your Depository Participant/ Registrar and Share Transfer Agent.

We also request all the investors whose email id is not registered to take necessary steps to register their email id with the Depository Participant/ Registrar and Share Transfer Agent.

ACKNOWLEDGMENTS

We place on record our gratitude to our employees at all levels who have contributed to the growth and sustained success of the Company through their dedication, hard work, cooperation and support. We would like to thank all our clients, vendors, bankers, investors, media and other business associates for their continued support and encouragement during the year.

We also thank the Government of India; the Government of Karnataka; the Ministry of Information Technology and Biotechnology; the Ministry of Commerce and Industry; the Ministry of Finance and Corporate affairs; the Department of Scientific and Industrial Research; Central Board of Indirect Taxes and Customs; the Reserve Bank of India; the Central Board of Direct Tax; SEZs (Special Economic Zones), BIRAC (Biotechnology Industry Research Assistance Council) and all other government agencies for their support during FY19 and look forward to their continued support in future.

 

For and on behalf of the Board

Place: Bengaluru

Kiran Mazumdar Shaw

Date: April 24, 2019

Managing Director

 

DIN:00347229

ANNEXURE-1

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

 

 

(Rs. In Mn)

SI. No.

Particulars

 

1.

Name of the subsidiary

Syngene USA Inc.

2.

Reporting period for the subsidiary concerned, if different from the holding company's

NA

 

reporting period

 

3.

Reporting currency

USD

4.

Exchange rate on March 31, 2019

69.33

5.

Share capital

USD 50,000

6.

Reserves & surplus

9.0

7.

Total assets

16.2

8.

Total Liabilities

3.7

9.

Investments

-

10.

Turnover

99.9

11.

Profit before taxation

9.1

12.

Provision for taxation

2.7

13.

Profit after taxation

6.3

14.

Proposed Dividend

-

15.

% of shareholding

100

16.

Country

USA

Names of subsidiaries which are yet to commence operations: None

Names of subsidiaries which have been liquidated or sold during the year: None

ANNEXURE 2

DIVIDEND DISTRIBUTION POLICY

INTRODUCTION

Syngene, being a listed Company, is obligated to comply with the requirements under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ('Listing Regulations') and any amendment thereof.

This Dividend Distribution Policy ("the Policy") is being made and adopted by the Board of Directors of the Company in compliance with the regulation 43A of Listing Regulations & applicable provisions of Companies Act, 2013.

"Dividend" here means the distribution of a portion of the Company's earnings, decided by the Board of Directors of the Company to its Equity Shareholders and also includes Interim Dividend.

OBJECTIVE

The Company has an objective of appropriately rewarding shareholders through dividends and long term capital appreciation. As such, the Company would seek to strike the right balance between the quantum of dividend paid and amount of profits retained in the business for various purposes.

The Board of Directors will refer this policy while declaring/ recommending dividend on behalf of the Company. Through this, the Company would endeavour to maintain a consistent approach to dividend pay-out plans.

GUIDELINES

The Board, pursuant to provisions of section 123 of the Companies Act, 2013 and rules made thereunder, may declare interim dividend or recommend final dividend, payable to the existing shareholders of the Company subject to shareholders' approval. The Board may consider the free cash flow position, profit earned during that year, capex requirements, applicable taxes, overall market situation and other things as per company's state of profitability.

The Board as may deem fit, declare the interim dividend one or more times in a financial year in line with this policy. This would be in order to supplement the annual dividend or in exceptional situations.

Whereas, the final dividend is paid once for the financial year after the annual accounts are prepared. The Board of Directors of the Company has the power to recommend the payment of final dividend to the shareholders in an Annual General Meeting.

OTHER PROCEDURES

1. After satisfying the financial position of the Company, the Board shall declare interim dividend or recommend final dividend at its meetings.

2. The Company shall notify in advance to the stock exchange(s) where the securities of the Company are listed and also after the meeting of its Board of Directors at which the declaration of dividend is to be considered.

3. On declaration of the dividend, the Company shall notify stock exchange(s) for the record date or book closure date as the case may be and determine the shareholders eligible for the dividend.

4. The payment of declared dividend will be processed with the help of Registrar & Share Transfer Agents and the banks.

5. The final dividend needs the approval of shareholders at the Annual General Meeting.

6. In case of unpaid or unclaimed dividend, the Company shall prepare the statement of unclaimed dividend and the same shall be uploaded on Company's website at: www. syngeneintl.com as required under law.

7. According to applicable laws, the unpaid or unclaimed dividend amount shall be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government after the expiry of seven years from the date of transfer to "Unpaid Dividend Account" of the Company.

APPROACH

As the Company is in a growth and investment phase, the Board may consider the investment requirements, long term growth strategies, cash availability, debt commitments and other internal and external factors while determining whether or not to declare dividend or in determining the rate/amount of dividend to be declared for the shareholders.

FINANCIAL PARAMETERS THAT SHALL BE CONSIDERED WHILE DECLARING DIVIDEND

Subject to the provisions of the Companies Act, dividend shall be declared or paid only out of:

(i) Profit of current financial year;

a) After providing for depreciation in accordance with law;

b) After transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion.

(ii) The profits for any previous financial year(s):

a) After providing for depreciation in accordance with law;

b) Out of remaining undistributed amount; or (iii) Out of (i) & (ii) both

In computing the above, the Board may, at its discretion, subject to provisions of the law, exclude any or all of (i) extraordinary charges (ii) exceptional charges (iii) one off charges on account of change in laws or rules or accounting policies or accounting standards (iv) provisions or write offs on account of impairment in investments (long term or short term) (v) non-cash charges pertaining to amortization or ESOP or resulting from change in accounting policies or accounting standards.

The Board may, at its discretion, declare a special dividend under certain circumstances such as extraordinary profits from sale of investments, changes in financial structure, such as debt ratio or any other situation.

POLICY AS TO HOW THE RETAINED EARNINGS SHALL BE UTILIZED

The profits earned by the Company can either be retained in business and used for expansion of the business, capital expenditure, working capital, acquisitions, diversifications, buy back of shares, general corporate purposes, including contingencies, etc. or it can be distributed to the shareholders as dividend.

INTERNAL AND EXTERNAL FACTORS THAT SHALL BE CONSIDERED FOR DECLARATION OF DIVIDEND

The Dividend pay-out decision of the Company, whether interim or final dividend shall be based upon external and internal factors as mentioned below-

EXTERNAL FACTORS:

• State of Economy;

• Global Market conditions;

• Business Cycle;

• Industry outlook;

• Capital Markets;

• Government policies;

• Change in laws;

• Statutory Restrictions;

• Tax laws; and

• Any other factors as deemed fit by the Board.

INTERNAL FACTORS:

• Profits earned during the year;

• Availability of Cash flow;

• Availability of undistributed profits;

• Earnings stability;

• Present & future capital requirements of the businesses;

• Brand/Business Acquisitions;

• Expansion or modernization of existing businesses;

• Investments in subsidiaries/associates of the Company;

• Investments into external businesses;

• Debt obligations;

• Future cash flows; and

• Any other factors as deemed fit by the Board.

CIRCUMSTANCES UNDER WHICH THE SHAREHOLDERS MAY OR MAY NOT EXPECT DIVIDEND

The Equity Shareholders of the Company may expect dividend only if the Company is having surplus profits after providing for all expenses, depreciation and other necessary deductions and after complying with all other statutory provisions of the Companies Act, 2013 and other applicable laws. The internal and external factors specified above shall be a crucial factor for taking a dividend declaration decision and determining the dividend distribution amount.

The equity shareholders of the Company may not expect dividend, if the Company does not have surplus funds after providing for all expenses, depreciation, or other necessary deductions and after complying all other statutory provisions of  the Companies Act, 2013 and other applicable laws. Also, the equity shareholders of the Company may not expect dividend, if the internal and external factors specified above warrant full retention of the surplus profit.

CLASSES OF SHARES

The Company currently has only one class of shares i.e. equity shares.

DISCLOSURE

This Policy shall be uploaded on the Company's website for public information and the web link of the same shall be provided in the Annual Report of the Company.

AMENDMENTS AND UPDATIONS

The Key management personnel's (KMPs) or the person authorised by the Board may review this Policy from time to time. Any material changes to this Policy will need prior approval of the Board. In case of any inconsistency between the terms of this Policy, Listing Regulations & Companies Act, the provisions of the Listing Regulations & Companies Act shall prevail.

ANNEXURE-3

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended March 31, 2019)

Power and Fuel Consumption Details

FY19

FY18

1.

Electricity

 

 

 

a) Purchased

 

 

 

Million Unit

51

48

 

Total amount (Rs. mn)

415

368

 

Rate/Unit (Rs.)

8.1

8.2

 

b) Captive generation

 

 

 

HSD Quantity, KL

608

259

 

Million Units

2.2

0.9

 

Units /Litre

3.6

3.5

 

Cost/Lit (Rs.)

63.5

58.3

 

Generation cost, Rate / Unit (Rs.)

17.6

16.8

2.

Steam

 

 

 

a) Furnace Oil

 

 

 

HSD Quantity, KL

23

67

 

Total amount (Rs. mn)

1.64

4.13

 

Average rate per litre (Rs.)

71

62

Technology Absorption, Adoption and Innovation No Technology was imported by the Company during the year.

Energy Conservation details:

SI. No.

Energy conservation measures

Investment

Energy saved per Annum

(Rs.) Million

Power & Steam

(Rs.) Million

1

Heat recovery from water chiller to reuse the waste heat for hot water applications

13

Steam: 1200 Tons

3.3

2

Replacing existing Mercury vapour Lamps & CFL with low rating LED Lamps in facilities

2.6

Units: 198000

1.62

3

• Replacement of existing Motors for Cooling towers with Energy Efficient motors.

• Introduced new technology Energy Efficient Chiller for Animal facility

6.2

Units: 120000

1.0

Foreign exchange earnings and outgo for the year:

 

FY19

FY18

Foreign Exchange Earnings

 

16,413

12,828

Foreign Exchange Outgo (including Capital Expenditure)

 

6,188

4,071

* For details please refer information given in the notes to the financial statements of the Company.

 

For and on behalf of the Board

Date: April 24, 2019

Kiran Mazumdar Shaw

Place: Bengaluru

Managing Director

 

DIN: 00347229

ANNEXURE-4

Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(1) Ratio of the remuneration of each Director/Key Managerial Personnel (KMP) to the median remuneration of all the employees of the Company for the Financial Year 2018-19:

SI. No.

Name of Director/KMP and Designation

Remuneration of Director/ KMP for FY 2018-19 (Rs. In million)*

% increase in remuneration in the Financial Year 2018-19

Ratio of the remuneration of each Director/KMP to the median remuneration of all the employees (1)

Executive Directors

 

 

 

1.

Kiran Mazumdar Shaw

-

-

-

2.

Jonathan Hunt, CEO

89.52

(4.58)

142.10

Non-Executive Directors

 

 

 

3.

John Shaw

0.44

100.00

0.70

4.

Prof. Catherine Rosenberg

1.18

293.33

1.87

Independent Directors

 

 

 

5.

Russell Walls

3.23

8.38

5.13

6.

Dr. Bala S Manian

2.78

(10.62)

4.44

7.

Paul Blackburn

3.58

10.49

5.68

8.

Suresh Talwar

2.80

11.11

4.41

9.

Dr. Vijay Kuchroo

3.37

42.19

5.35

10.

Vinita Bali

1.79

12.58

2.84

Key Managerial Personnel

 

 

 

11.

Chinappa MB, CFO

28.53

(4.45)

45.29

12.

Mayank Verma, CS

2.67

(2.55)

4.24

*The remuneration paid to directors includes sitting fees and is based on the position they occupied in the various committees and meetings attended by them during the FY19. The details above is as on accrual basis.

Notes:

(1) The ratio of remuneration to median remuneration is based on remuneration paid during the period April 1, 2018 to March 31, 2019.

Median remuneration of all the employees of the Company for the Financial Year 2018-19

Rs. 6,32,516 p. a

The percentage increase in the median remuneration of employees in the Financial Year

4.58%

The number of permanent employees on the rolls of Company as on March 31, 2019

4,619

(2) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentile increase in salary of the Company's employees was 10% against which the increase in managerial remuneration was negative 2%. Decrease in percentile in managerial remuneration is due to mix of fixed and variable pay reflecting short and long-term performance objective.

(3) The key parameters for any variable component of remuneration availed by the directors:

Kiran Mazumdar Shaw, Managing Director does not draw any remuneration from the Company. Jonathan Hunt, CEO and Whole-Time Director is remunerated both in terms of fixed and variable pay components reflecting short and long -term performance objectives. Variable component is determined based on Company's performance for the year. Remuneration to Non-Executive Directors involve sitting fees for attending meetings of the Board/Committees and commission based on the attendance and contribution towards governance practices and discharging fiduciary duties. The payment is just not restricted to corporate governance or outlook of the Company but they also bring with them significant professional expertise and rich experience across the wide spectrum of functions.

(4) Affirmation

It is hereby affirmed that Remuneration is as per the remuneration policy of the Company.

 

On behalf of the Board of Directors

Date: April 24, 2019

Kiran Mazumdar Shaw

Place: Bengaluru

Managing Director

 

DIN: 00347229

ANNEXURE 5

SYNGENE INTERNATIONAL LIMITED

Disclosures pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 SEBI, vide its notification dated October 28, 2014, had issued the Securities and Exchange Board of India (Share-based Employee Benefits) Regulations, 2014 ('SEBI Regulations') which replaced the SEBI ESOP Guidelines, 1999.

Syngene ESOP Plan:

The Board of Directors has approved the Syngene Employee Stock Option Plan - 2011 (the ESOP Plan-2011) and created the Syngene Employee Welfare Trust ('Trust') for the benefit of the employees and Directors of the Company. The ESOP Plan-2011 was approved by the shareholders at an Extra Ordinary General Meeting held on December 14, 2011. The trust subscribed 6,680,000 equity shares (Face Value of Rs 10 per share) of the Company by using the proceeds from an interest free loan of Rs 150 million availed from the Company, adjusted for the consolidation of shares and bonus issue. Subsequent to Syngene's listing, the ESOP Plan-2011 was ratified by the shareholders via postal ballot on December 5, 2015. The ESOP Plan 2011 is the only prevailing plan and used by the Board for granting options through trust to eligible employees of the Company. As at March 31, 2019, the Trust holds 2,038,001 (March 31, 2018 - 3,065,964) equity shares of face value: Rs 10/- each. During the year ended March 31, 2019, the Trust has transferred 1,027,963 (March 31, 2018- 1,447,561) equity shares to the employees who has exercised their stock options.

Grant

Pursuant to the Scheme, the Company has granted options to eligible employees of the Company under ESOP Plan - 2011. Each option entitles for one equity share. The options under each tranche will vest in the ratio of 25%, 35% and 40% at the end of second, third and fourth year from the date of each grant respectively. The exercise period under each tranche is three years from the date of each vesting. The vesting conditions include service terms and performance grades of the employees. The options are exercisable at an exercise price of Rs 22.50 per share (Face Value of Rs 10 per share).

The Disclosures pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 are detailed under:

SI. No.

Particulars

Status of compliance

1

The Board of Directors in their report shall disclose any material change in the scheme(s) and whether the scheme(s) is /are in compliance with the regulations.

There was no material changes in the scheme and scheme is in compliance with the regulations.

A

Relevant disclosures in terms of the 'Guidance note on accounting for employee share-based payments' issued by ICAI or any other relevant accounting standards as prescribed from time to time.

Yes - Disclosed in Notes to Accounts - Refer note 33 to Standalone Financial Statements for the year ended March 31, 2019

B

Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations shall be disclosed in accordance with 'Accounting Standard on Earnings Per Share' issued by ICAI or any other relevant accounting standards as prescribed from time to time

Yes - Disclosed in Notes to Accounts - Refer note 36 to Standalone Financial Statements for the year ended March 31, 2019

C

Details related to ESOS

 

 

A description of each ESOS that existed at any time during the year, including the general terms and conditions of each ESOS, including

As detailed above

 

Syngene Employee Stock Option Plan - 2011

 

 

(a) Date of shareholders' approval

December 14, 2011 . Ratification post listing on December 5, 2015 via Postal ballot.

 

(b) Total number of options approved under ESOS

6,680,000 equity shares (adjusted for consolidation of shares and Bonus issue)

 

(c) Vesting requirements

The options under each tranche will vest in the ratio of 25%, 35% and 40% at end of second, third and fourth year from the date of each grant respectively.

 

(d) Exercise price or pricing formula

Rs 22.50

 

(e) Maximum term of options granted

Vesting period - as per (c) above Exercise period - 3 years from date of each vesting

 

(f) Source of shares (primary, secondary or combination)

Primary shares

 

(g) Variation in terms of options

None

(ii)

Method used to account for ESOP - Intrinsic or fair value.

Fair Value

(iii)

Where the company opts for expensing of the options using the intrinsic value of the options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed.

NA

V

Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock.

Yes- Disclosed in Notes to Accounts -Refer note 33 to Standalone Financial Statements for the year ended March 31, 2019.

vi

Employee wise details (name of employee, designation, number of options granted during the year, exercise price) of options granted to -

 

 

(a) senior managerial personnel;

Mr. Kenneth Barr- Senior Vice President 85,500 options

 

(b) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year; and

Nil

 

(c) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

Nil

vii

A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information:

the weighted-average values of share price, exercise price, expected volatility, expected option life, expected dividends, the risk-free interest rate and any other inputs to the model;

Yes - Disclosed in Notes to Accounts - Refer note 33 to Standalone Financial Statements for the year ended March 31, 2019

 

(b) the method used and the assumptions made to incorporate the effects of expected early exercise;

 

 

(c) how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and

 

 

(d) Whether and how any other features of the option grant were incorporated into the measurement of fair value, such as a market condition.

 

D.

Details related to ESPS -

Not Applicable

E.

Details related to SAR -

Not Applicable

F.

Details related to GEBS / RBS -

Not Applicable

 

 

 

 

G. Details related to Trust

(i) General information on schemes

SI. No.

Particulars

 

1

Name of the Trust

Syngene International Limited Employees Welfare Trust

2

Details of the Trustee(s)

Mr. Murali Krishnan KN

 

 

Mr. Sebi Chacko

3

Amount of loan disbursed by company / any company in the group, during the year

Nil

4

Amount of loan outstanding (repayable to company / any company in the group) as at the end of the year

Rs. 85,000

5

Amount of loan, if any, taken from any other source for which company / any company in the group has provided any security or guarantee

Nil

6

Any other contribution made to the Trust during the year

Nil

(ii) Brief details of transactions in shares by the Trust

(a) Number of shares held at the beginning of the year i.e. April 1, 2018 - 3,065,964.

(b) Number of shares acquired during the year through (i) primary issuance (ii) secondary acquisition, also as a percentage of paid up equity capital as at the end of the previous financial year, along with information on weighted average cost of acquisition per share - Nil

(c) Number of shares transferred to the employees/sold along with the purpose thereof - 1,027,963.

(d) Number of shares held at the end of the year i.e. March 31, 2019-2,038,001 (a+b-c) (iii) In case of secondary acquisition of shares by the Trust - NIL

Number of shares

As a percentage of paid-up equity capital as at the end of the year immediately preceding the year in which shareholders' approval was obtained

Held at the beginning of the year Acquired during the year Sold during the year Transferred to the employees during the year Held at the end of the year

NA

ANNEXURE 6

To

Independent Auditor's Certificate on Corporate Governance

The Members of Syngene International Limited

The Certificate is issued in accordance with the terms of our engagement letter dated 15 February 2019 along with related addendum dated 15 February 2019 with the Company.

We have examined the compliance of conditions of Corporate Governance by Syngene International Limited ("the Company"), for the year ended 31 March 2019, as stipulated in Regulations 17 to 27, clauses (b) to (i) of regulation 46(2) and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") as amended from time to time, pursuant to the Listing Agreement of the Company with Stock exchanges.

Management's Responsibility for compliance with the conditions of SEBI Listing Regulations

The Company's Management is responsible for compliance of conditions of Corporate Governance including the preparation and maintenance of all relevant supporting records and documents as stipulated under the Listing Regulations. This responsibility includes the design, implementation and maintenance of corporate governance process relevant to the compliance of the conditions. Responsibility also includes collecting, collating and validating data and designing, implementing and monitoring of Corporate Governance process suitable for ensuring compliance with the above mentioned Listing Regulations.

Auditor's Responsibility

Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

Pursuant to the requirements of the Listing Regulations, it is our responsibility to provide a reasonable assurance whether the Company has complied with the conditions of Corporate Governance as stipulated in Listing Regulations for the year ended 31 March 2019.

We conducted our examination of the corporate governance compliance by the Company as per the Guidance Note on

Reports or Certificates for Special purposes (Revised 2016), Guidance Note on Certification of Corporate Governance both issued by the Institute of Chartered Accountants of India ("ICAI") and the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013, in so far as applicable for the purpose of this certificate. The Guidance Note on Reports or Certificates for Special Purposes requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Regulations.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

Restriction on Use

This Certificate has been solely issued for the purpose of complying with the aforesaid Listing Regulations and may not be suitable for any other purpose. Accordingly, we do not accept or assume any liability or duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

for B S R & Co. LLP
Chartered Accountants
Firm registration number: 101248WAA/-100022
S Sethuraman
Partner
Membership Number: 203491
UDIN Number: 19203491AAAAAF1326
Place: Chennai
Date: April 24, 2019

ANNEXURE 7

Policy on Director's Appointment and Remuneration

The policy on appointment and remuneration of directors, key management personnel and other persons provides an underlying basis and guidance for human resource management, thereby aligning plans for strategic growth of the Company. The policy is pursuant to Section 178(4) of the Companies Act, 2013.

A brief summary of the policy in relation to the objective, appointment criteria, remuneration and general matters as administered by the Nomination and Remuneration Committee are reproduced herewith -

BACKGROUND SECTION I

The Key Objectives of the Committee / Policy would be:

• To guide the Board in relation to appointment, retention and removal of Directors, Key Managerial Personnel and Senior Management.

• To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

• To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and other staff (as deemed necessary), which shall be market-related, usually consisting of a fixed, variable and stock option component.

• To devise a policy on Board diversity.

• Reviewing and approving compensation strategy from time to time in the context of the then current Indian market in accordance with applicable laws.

• Analysing, monitoring and reviewing various human resource and compensation matters.

COMPOSITION AND MEETINGS

The Board has constituted a Nomination and Remuneration Committee in line with the requirements of the Companies Act, 2013 which oversees the functions related to appointment and remuneration of Directors, Key Managerial personnel and senior management personnel.

The terms of composition and requirements as to the meeting of the Committee are as below-

• The Committee shall consist of a minimum 3 nonexecutive directors, majority of them being independent.

• Minimum two (2) members shall constitute a quorum for the Committee meeting.

• Membership of the Committee shall be disclosed in the Annual Report.

• Term of the Committee shall be continued unless terminated by the Board of Directors.

DEFINITION

'Act' means the Companies Act, 2013 and Rules framed thereunder, as amended from time to time.

'Board' means Board of Directors of the Company.

'Committee' means the Nomination and Remuneration Committee

'Directors' mean Directors of the Company.

'Key Managerial Personnel' (KMP) means Chief Executive Officer and Managing Director, Whole-time Director, Chief Financial Officer, Company Secretary and such other officer as may be prescribed under the Act.

'Senior Management' means Senior Leadership personnel of the company excluding the Board of Directors and shall specifically include Company Secretary and Chief Financial Officer.

SECTION II

This section covers the duties of the Committee in relation to various matters and recommendations to be made by the Committee to the Board.

ROLE AND RESPONSIBILITY OF COMMITTEE

Matters to be dealt with, perused and recommended to the Board by the Committee shall include -

• Formulating the criteria for determining qualifications, positive attributes and independence of a director.

• Identifying persons who are qualified to become Director and persons who may be appointed in Key Managerial positions in accordance with the criteria laid down in this policy.

• Recommending to the Board, appointment and removal of Director, KMP and Senior Management Personnel.

Specifically, the responsibilities include

A. NOMINATION MATTERS

• Determining the appropriate size, diversity and composition of the Board;

• Setting a formal and transparent procedure for selecting new Directors for appointment to the Board;

• Ensuring that there is an appropriate induction in place for new Directors and members of Senior Management and reviewing its effectiveness;

• Identifying and recommending Directors who are to be put forward for retirement by rotation;

• Developing a succession plan for the Board and Senior Management and regularly reviewing the plan;

• Evaluating the performance of the Board members and Senior Management in the context of the Company's performance, Industry benchmarks and compliance;

• Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract;

• Recommend necessary changes to the Board in line with Board Diversity Policy; and

• Considering any other matters, as may be requested by the Board.

B. REMUNERATION MATTERS

• Considering and determining the Remuneration Policy, based on level, performance and composition of remuneration is reasonable and sufficient to attract, retain and motivate members of the Board.

• To approve the remuneration of key managerial personnel, senior management and other employees of the Company by maintaining a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company, and its growth strategy.

• To consider any other matters as may be requested by the Board and/or are statutorily prescribed under any law to be attended to by such committee.

SECTION III

This section covers the Policy for appointment, term and retirement of Directors and KMP by the Committee.

Appointment criteria and qualifications

• The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP and recommend to the Board his / her appointment.

• A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.

• The Company shall not appoint any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.

Term / Tenure

• Managing Director/Whole-time Director: The Company shall appoint or re-appoint any person as its Managing Director or Executive Director for a term not exceeding such term as may be specified under the Act. No re-appointment shall be made earlier than one year before the expiry of term, and which shall be done with the approval of the shareholders of the Company.

• Independent Director: - An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for re-appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.

Evaluation

The Committee shall carry out evaluation of performance of every Director and shall review the performance of KMP and Senior Management Personnel at regular intervals and at least on an annual basis.

Removal

Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations thereunder, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director or KMP subject to the provisions and compliance of the said Act, rules and regulations.

Retirement

The Director and KMP shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Board will have the discretion to retain the Director or KMP in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

SECTION IV

This Section of the Policy covers provisions relating to the Remuneration for the Whole-time Director, KMP, Senior Management Personnel and other employees.

General

• The relationship of remuneration with the performance is clear and meets performance benchmarks.

• The remuneration to the Whole-time Director and KMP will be determined by the Committee and recommended to the Board for approval. Wherever required, the remuneration / compensation / commission etc. shall be subject to approval of the shareholders of the Company and Central Government.

• The remuneration and commission including increments recommended to be paid to the Whole-time Director shall be in accordance with the percentage / slabs / conditions laid down as per the provisions of the Act. These would be subject to approval of the shareholders of the Company.

• The remuneration including increments payable to KMPs, senior management and any other employees shall involve balance between fixed and variable pay and as per the prevailing policy of the Company.

Remuneration to Whole-time / Executive / Managing Director, KMP and others

a) Fixed pay: The Whole-time Director / Managing Director shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee. The breakup of the pay scale and quantum of perquisites including, employer's contribution to PF, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board and approved by the shareholders and Central Government, wherever required.

b) Minimum Remuneration: If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Whole-time Director in accordance with the provisions of Schedule V of the Act and if it is not able to comply with such provisions, then with the previous approval of the Central Government.

c) Long-term rewards: These long-term rewards are linked to contribution to the performance of the Company based on relative position of the personnel in the organisation. These rewards could be in the form / nature of stock options and are based on level of employees and their criticality.

d) Provisions for excess remuneration: If any Whole-time Director draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Act or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.

Remuneration to Non- Executive / Independent Director:

a) Remuneration / Commission: The remuneration / commission shall be fixed as per the limits mentioned in the Act, subject to approval from the shareholders as applicable.

b) Sitting Fees: The Non- Executive / Independent Director shall receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed such amount as may be prescribed by law from time to time.

c) Stock Options: An Independent Director shall not be entitled to any stock option of the Company.

The remuneration structure for Non-Executive Directors per meeting of the Board / Committee effective April 1, 2019 is as follows -

Particulars Currency

Amount

Board sitting fees

INR

100,000

Board remuneration

US$

5,000

Travel allowance for overseas directors

US$

3,000

(Non America)

 

 

Travel allowance for overseas directors

US$

4,000

(America)

 

 

Chairperson of Audit Committee

US$

4,000

Chairperson of other Committees

US$

2,000

Members of Audit Committee

US$

2,000

Members of other Committees

US$

1,000

Remuneration to KMPs, senior management and any other employees

The remuneration including increments, payable to KMPs, senior management and any other employees shall be linked with individual's overall performances and as decided by the HR within the overall performance framework approved in consultation with MD/CEO. The remuneration should involve balance between fixed and variable pay as per the prevailing policy of the Company.

AMENDMENTS AND UPDATIONS

The Nomination and Remuneration Committee shall periodically review this Policy and may recommend amendments to this Policy from time to time as it deems appropriate, which shall be in accordance with the provisions of the Companies Act, 2013. In case of any modifications, amendments or inconsistencies with the Act, the provisions of the Act and the rules made thereunder would prevail over the Policy.

 

For and on behalf of the Board

Bengaluru

Kiran Mazumdar Shaw

April 24, 2019

Managing Director

ANNEXURE 8 Form No. MR-3 SECRETARIAL AUDIT REPORT

[Pursuant to Sub Section (1) of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

For The Financial Year Ended March 31, 2019

To,

The Members

Syngene International Limited

Bengaluru

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Syngene International Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's Books, Papers, Minute Books, Forms and Returns filed and other Records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the financial year ended on March 31, 2019 (the audit period) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company during the audit period according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and External Commercial Borrowings.

(The provisions of Overseas Direct Investment were not applicable to the Company during the period under review)

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act'):

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations), up to September 10, 2018 and SEBI ICDR Regulations, 2018 w.e.f September 11, 2018; (Not Applicable to the Company during the Audit Period);

d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not Applicable to the Company during the Audit Period);

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not Applicable to the Company during the Audit Period);

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (SEBI Buyback of Securities Regulations) up to September 10, 2018 and SEBI Buyback of Securities Regulations, 2018 w.e.f September 11, 2018 (Not Applicable to the Company during the Audit Period); and

i. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(vi) Other Laws Applicable Specifically to the Company namely:

a. Drugs and Cosmetics Act 1940

b. Bio Medical Waste (Management & Handling) Rules, 1998

c. ICH Guidelines (this is the base on which US FDA/ EU Guidelines etc. are created on).

d. LJCPMP (Currently voluntary - however proposed to be made mandatory).

e. National Biodiversity Act 2002

f. Drugs & Magical Remedies (Objectionable Advertisements) Rules, 1955

g. Narcotic Drugs and Psychotropic substance Act h. Drugs (Control) Act, 1950

i. Ethical Guidelines for Biomedical Research on Human Participants, 2006

j. The Poisons Act, 1919

k. Prevention of Cruelty to Animals Act, 1960 and the Breeding of and Experiments on Animals (Control and Supervision) Rules, 1998

I. Atomic Energy Act, 1962 and Atomic Energy (Radiation Protection) Rules, 2004

m. Radiation Protection Rules, 1971

n. Radiation Surveillance Procedures for Medical Application of Radiation,1989

We have also examined compliance with the applicable clauses of the following:

a. Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meeting.

b. Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange of India Limited

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We have not examined compliance with applicable Financial Laws, like Direct and Indirect Tax Laws, since the same have been subject to review by statutory financial audit and other designated professionals.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

As per the minutes of the meetings duly recorded and signed by the Chairman, the decisions of the Board were unanimous, and no dissenting views have been recorded.

We further report that based on the review of the compliance reports / certificates of the Company Secretary (CS) of the Company which were taken on record by the Board of Directors, there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, there was no event/action having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines etc.,

 

For V. SREEDHARAN & ASSOCIATES

 

(Pradeep B. Kulkarni)

 

Partner

 

FCS: 7260; CP No. 7835

Place: Bengaluru

 

Date: April 24, 2019

 

ANNEXURE 9

Secretarial compliance report of Syngene International Limited for the year ended March 31, 2019

We have examined:

(a) all the documents and records made available to us and explanation provided by Syngene International Limited ("the listed entity");

(b) the filings/ submissions made by the listed entity to the stock exchanges;

(c) website of the listed entity;

(d) any other document/filing, as may be relevant, which has been relied upon to make this certification;

for the year ended March 31, 2019 ("Review Period") in respect of compliance with the provisions of:

(a) the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the Regulations, circulars, guidelines issued thereunder; and

(b) the Securities Contracts (Regulation) Act, 1956 ("SCRA"), rules made thereunder and the Regulations, circulars, guidelines issued thereunder by the Securities and Exchange Board of India ("SEBI");

The specific Regulations, whose provisions and the circulars/ guidelines issued thereunder, have been examined, include: -

(a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations), up to September 10, 2018 and SEBI ICDR Regulations, 2018 w.e.f September 11, 2018

(c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(d) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (SEBI Buyback of Securities Regulations) up to September 10, 2018 w.e.f September 11, 2018; (Not Applicable to the Company during the Audit Period);

(e) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(f) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not Applicable to the Company during the Audit Period);

(g) Securities and Exchange Board of India (Issue and Listing of Non- Convertible and Redeemable Preference Shares) Regulations, 2013 (Not Applicable to the Company during the Audit Period);

(h) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(i) Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; and based on the above examination, we hereby report that, during the Review Period:

(a) The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder;

(b) The listed entity has maintained proper records under the provisions of the above Regulations and circulars/ guidelines issued thereunder insofar as it appears from our examination of those records.

(c) There was no action taken against the listed entity/ its promoters/ directors/ material subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/guidelines issued thereunder.

(d) The listed entity was not required to take any actions as there was no observations made by the Practicing Company Secretary (Secretarial Auditors) in previous reports.

 

For V. SREEDHARAN & ASSOCIATES

 

Company Secretaries

 

(Pradeep B. Kulkarni)

 

Partner

 

FCS: 7260; CP No. 7835

Place: Bengaluru

 

Date: April 24, 2019

 

ANNEXURE 10

MGT-9 EXTRACT OF ANNUAL RETURN

REGISTRATION & OTHER DETAILS:

1.

CIN

L85110KA1993PLC014937

2.

Registration Date

November 18, 1993

3.

Name of the Company

Syngene International Limited

4.

Category/Sub-category of the Company

Company limited by Shares

5.

Address of the Registered office & contact details

Biocon SEZ, Biocon Park, Plot. No. 2 & 3, Bommasandra Industrial Area, IV Phase, Jigani Link Road, Bommasandra Bangalore- 560099

 

 

Contact: Tel +91 8067758781

 

 

Email : [email protected]

6.

Whether listed company

Yes

7.

Name, Address & contact details of the Registrar & Transfer Agent, if any.

Karvy Fintech Private Limited Plot 31-32, Karvy Selenium, Tower B, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032

 

 

Contact : Tel +91 40 6716 1518; Email : [email protected]

Principal Business activities of the Company

SI. No

Name and Description of main products / services

NIC Code of the Product/ service

% to total turnover of the company

1

Scientific Research & Development

72

100.00%

Particulars of holding, subsidiary and associate companies

SI. No

Name and Address of the Companies

CIN/GNL

Holding/ Subsidiary/ Associate

% of shares held

Applicable Section under Companies Act, 2013

1

Biocon Limited

L24234KA1978PLC003417

Holding

72.61%

2(87)

2

Syngene USA Inc.

NA

Subsidiary

100%

2(87)

SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)

1. Category-wise Share Holding

Category of Shareholders

No. of Shares held at the end of the year [As on 31-March-2018]

No. of Shares held at the end of the year [As on 31-March-2019]

% Change during the year

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A. Promoters

 

 

 

 

 

 

 

 

 

(1) Indian

 

 

 

 

 

 

 

 

 

a) Individual/ HUF

12,698

-

12,698

0.01

19,728

-

19728

0.01

0.00

b) Central Govt

-

-

-

-

-

-

-

-

 

c) State Govt(s)

-

-

-

-

-

-

-

-

 

d) Bodies Corp.

147,084,516

-

147,084,516

73.54

140,487,386

-

140,487,386

70.24

(3.30)

e) Banks /Fl

-

-

-

-

 

 

 

 

 

f) Any other (Trust)

1,789,897

-

1,789,897

0.90

1,594,381

-

1,594,381

0.80

(0.10)

Sub Total (A-1)

148,887,111

-

148,887,111

74.45

142,101,495

-

142,101,495

71.05

(3.40)

(2) Foreign

 

 

 

 

 

 

 

 

 

a) NRI Individual

3,500

-

3,500

0.00

3,500

-

3,500

0.00

0.00

b) Other Individuals

-

-

-

-

-

-

-

-

 

d) Bodies Corp.

-

-

-

-

-

-

-

-

 

e) Banks /Fl

-

-

-

-

-

-

-

-

 

f) Any other

-

-

-

-

-

-

-

-

 

Sub Total (A-2)

3,500

-

3,500

0.00

3,500

-

3,500

0.00

0.00

Total shareholding of Promoter (A-1 + A-2)

148,890,611

-

148,890,611

74.45

142,104,995

-

142,101,995

71.05

(3.40)

B. Public Shareholding

 

 

 

 

 

 

 

 

 

1. Institutions

 

 

 

 

 

 

 

 

 

a) Mutual Funds

4,087,732

-

4,087,732

2.04

9,578,533

-

9,578,533

4.80

2.76

b) Banks /Fl

7,669

-

7,669

0.00

17,619

-

17,619

0.01

0.01

c) Central Govt

-

-

-

-

-

-

-

-

-

d) State Govt(s)

-

-

-

-

-

-

-

-

 

e) Alternate Investment Fund

809,200

-

809,200

0.40

1,568,112

-

1,568,112

0.78

0.38

f) Insurance Companies

-

-

-

-

-

-

-

-

-

g) Flls/Foreign Portfolio Investor

31,180,170

-

31,180,170

15.60

33,029,466

-

33,029,466

16.51

0.91

h) Foreign Venture Capital Funds

-

-

-

-

-

-

-

-

-

i) Others (specify)

-

-

-

-

-

-

-

-

-

Sub-total (B)(1):

36,084,771

-

36,084,771

18.04

44,193,730

-

44,193,730

22.10

4.06

2. Non-Institutions

 

 

 

 

 

 

 

 

 

a) Bodies Corp.

 

 

 

 

 

 

 

 

 

i) Indian

2,212,412

-

2,212,412

1.11

1,403,743

-

1,403,743

0.70

(0.41)

ii) Overseas

-

-

-

-

-

-

-

-

-

b) Individuals

 

 

 

 

 

 

 

 

 

i) Individual shareholders holding nominal share capital upto Rs. 2 lakh

6,910,789

110

6,910,899

3.45

7,396,208

110

7,396,318

3.69

0.24

ii) Individual shareholders holding nominal share capital in excess of Rs 2 lakh

2,235,787

-

2,235,787

1.12

2,199,309

-

2,199,309

1.10

(0.02)

c) NBFC's registered with RBI

227

-

227

0.00

680

-

680

0.00

0.00

d) Any Others (specify)

-

-

-

-

-

-

-

-

-

Non-Resident Indians

356,046

-

356,046

0.18

443,391

-

443,391

0.22

0.04

Qualified Foreign Investors

-

-

-

-

-

-

--

-

-

Clearing Members

193,223

-

193,223

0.10

159,023

-

159,023

0.08

(0.02)

Trusts

60

-

60

0.00

10,770

-

10,770

0.01

0.01

Foreign National

50,000

-

50,000

0.02

50,040

-

50,040

0.03

0.01

Foreign Bodies - D R

-

-

-

-

-

-

-

-

-

Sub-total (B)(2):

11,958,544

110

11,958,654

5.98

11,663,164

110

11,663,274

5.83

(0.15)

Total Public Shareholding (B)=(B)(1) + (B)(2)

48,043,315

110

48,043,425

24.02

55,856,894

110

55,857,004

27.93

3.91

C. Shares held by Custodian for GDRs

 

 

 

 

 

 

 

 

 

& ADRs

 

 

 

 

 

 

 

 

 

D. Non-Promoter non Public

3,065,964

-

3,065,964

1.53

2,038,001

-

2038001

1.02

(0.51)

Grand Total (A+B+C+D)

199,999,890

110

200,000,000

100.00

199,999,890

110

200,000,000

100.00

0

 

2. Shareholding of Promoters

SI. No,

Shareholder's Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in shareholding during the year

 

No. of Shares

% of total Shares of the company

% of Shares Pledged / encumbered to total shares

No. of Shares

% of total Shares of the company

% of Shares Pledged / encumbered to total shares

1

Biocon Limited

145,217,843

72.61

-

140,487,386

70.24

-

(2.37)

2

Biocon Limited Employee Welfare Trust

1,789,897

0.90

 

1,594,381

0.80

-

(0.10)

3

Biocon Research Limited

1,866,673

0.93

 

-

 

-

(0.93)

4

Kiran Mazumdar Shaw

7,638

0.01

-

7,638

0.01

-

0.00

5

Yamini R Mazumdar

4,000

0.00

 

11,030

0.01

 

0.1

6

Ravi R Mazumdar

1,060

0.00

 

1,060

0.00

 

0.00

7

Dev Mazumdar

3,500

0.00

-

3,500

0.00

-

0.00

 

Total

148,890,611

74.45

-

142,104,995

71.05

-

(3.40)

3. Change in Promoters' Shareholding

 

 

Shareholding at the beginning of the year

Cumulative Shareholding during the year

SI. No.

Particulars

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company

1

Biocon Limited

 

 

 

 

 

At the beginning of the year

145,217,843

72.61

-

-

 

Transfer/ sale of shares during the year

(4,730,457)

(2.37)

140,487,386

70.24

 

At the end of the year

-

-

140,487,386

70.24

2

Biocon Research Limited

 

 

 

 

 

At the beginning of the year

1,866,673

0.93

-

-

 

Transfer/ sale of shares during the year

(1,866,673)

(0.93)

-

-

 

At the end of the year

-

-

-

-

3

Biocon Limited Employee Welfare Trust

 

 

 

 

 

At the beginning of the year

1,789,897

0.89

-

-

 

Transfer during the year (ESOP)

(195,516)

(0.09)

1,594,381

0.80

 

At the end of the year

-

-

1,594,381

0.80

4

Kiran Mazumdar Shaw

 

 

 

 

 

At the beginning of the year

7,638

0.01

-

-

 

Transfer/ sale of shares

-

-

-

-

 

At the end of the year

-

-

7,638

0.01

5

Yamini R Mazumdar

 

 

 

 

 

At the beginning of the year

4,000

0.00

-

-

 

Bought during the year

7,030

0.001

11,030

0.01

 

At the end of the year

-

-

11,030

0.01

6

Ravi R Mazumdar

 

 

 

 

 

At the beginning of the year

1060

0.00

-

-

 

Bought during the year

-

0.00

-

-

 

At the end of the year

-

-

1,060

0.00

7

Dev Mazumdar

 

 

 

 

 

At the beginning of the year

3,500

0.00

-

-

 

Bought during the year

-

--

-

-

 

At the end of the year

-

-

3,500

0.00

4. Shareholding Pattern of top ten Shareholders

(Other than Directors, Promoters and Holders of GDRs and ADRs):

SI. No.

 

Shareholding at the beginning of the year

Cumulative Shareholding during the year

Name

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company

1

Theleme Master Fund Limited

 

 

 

 

 

At the beginning of the year

9,000,000

4.50

-

-

 

Sold during the year

2,526,086

1.27

6,473,914

3.23

 

At the end of the year

-

-

6,473,914

3.23

2

Camas Investments Pte. Ltd.

 

 

 

 

 

At the beginning of the year

4,785,000

2.39

-

-

 

Bought during the year

-

-

-

-

 

At the end of the year

-

-

4,785,000

2.39

3

Reliance Capital Trustee Co. Ltd

 

 

 

 

 

At the beginning of the year

919,394

0.45

-

-

 

Bought during the year

2,614,862

1.31

3,534,256

1.76

 

At the end of the year

-

-

3,534,256

1.76

4

UTI-Unit Linked Insurance Plan

 

 

 

 

 

At the beginning of the year

19,29,071

0.96

-

-

 

Bought during the year

10,10,544

0.50

29,39,615

1.46

 

At the end of the year

-

-

29,39,615

1.46

5

Gaoling Fund, L.P.

 

 

 

 

 

At the beginning of the year

1,750,443

0.88

-

-

 

Bought during the year

438,011

0.21

2,188,454

1.09

 

At the end of the year

-

-

2,188,454

1.09

6

Aberdeen Global-Asian Smaller Companies Fund

 

 

 

 

 

At the beginning of the year

-

-

-

-

 

Bought during the year

1,999,000

0.99

1,999,000

0.99

 

At the end of the year

-

-

1,999,000

0.99

7

Kotak Funds - India Midcap Fund

 

 

 

 

 

At the beginning of the year

-

-

-

-

 

Bought during the year

1,721,854

0.86

1,721,854 0.86

 

At the end of the year

-

-

1,721,854

0.86

8

Mirae Asset Emerging Bluechip Fund

 

 

 

 

 

At the beginning of the year

-

-

-

-

 

Bought during the year

1,509,964

0.75

1,509,964

0.75

 

At the end of the year

1,509,964 0.75

 

 

 

9

Steinberg India Emerging Opportunities Fund Limited

 

 

 

 

 

At the beginning of the year

869,153

0.43

 

-

 

Bought during the year

630,847

0.32

1,500,000

0.75

 

At the end of the year

-

-

1,500,000

0.75

10

Mondrian Emerging Markets Small Cap Equity Fund.L

 

 

 

 

 

At the beginning of the year

10,64,107

0.53

 

-

 

Sold during the year

40,000

0.02

1,024,107

0.51

 

At the end of the year

-

-

1,024,107

0.51

5. Shareholding of Directors and Key Managerial Personnel:

SI No

Shareholding of each Directors and each Key Managerial Personnel

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company

1

Kiran Mazumdar Shaw

 

 

 

 

 

At the beginning of the year

7,638

0.01

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

7,638

0.01

2

John Shaw

 

 

 

 

 

At the beginning of the year

0

0

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

0

0

3

Jonathan Hunt

 

 

 

 

 

At the beginning of the year

0

0

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

0

0

4

Suresh N Talwar

 

 

 

 

 

At the beginning of the year

25,000

0.01

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

25,000

0.01

5

Russell Walls

 

 

 

 

 

At the beginning of the year

25,000

0.01

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

25,000

0.01

6

Bala S Manian

 

 

 

 

 

At the beginning of the year

25,000

0.01

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

25,000

0.01

7

Paul F Blackburn

 

 

 

 

 

At the beginning of the year

25,000

0.01

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

25,000

0.01

8

Catherine Rosenberg

 

 

 

 

 

At the beginning of the year

1060

0.00

-

-

 

Bought/Sold during the year

-

0.00

-

0.00

 

At the end of the year

-

-

1,060

0.00

9

Vijay Kuchroo

 

 

 

 

 

At the beginning of the year

25,000

0.01

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

25,000

0.01

10

Vinita Bali

 

 

 

 

 

At the beginning of the year

0

0

-

-

 

Bought/Sold during the year

-

-

-

-

 

At the end of the year

-

-

0

0

11

Chinappa M B

 

 

 

 

 

At the beginning of the year

0

0.00

-

-

 

ESOP acquisition

16,325

0.008%

16,325

0.008%

 

Sold during the year

16,325

0.008%

16,325

0.008%

 

At the end of the year

-

-

-

-

12

Mayank Verma

 

 

 

 

 

At the beginning of the year

905

0.00

-

-

 

ESOP acquisition

5,414

0.00

-

-

 

Bought/sold during the year

-

0.00

-

-

 

At the end of the year

-

-

6,319

0.00

 

INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

 

Secured Loans excluding deposits

Unsecured Loans

Deposits

Total Indebtedness

Indebtedness at the beginning of the financial year

 

 

 

 

i) Principal Amount

6,926

948

-

7,874

ii) Interest due but not paid

-

-

-

-

iii) Interest accrued but not due

-

-

-

-

Total (i+ii+iii)

6,926

948

-

7,874

Change in Indebtedness during the

 

 

 

 

financial year, net

 

 

 

 

- Addition

-

1,119

-

1,119

- Reduction

(860)

-

-

(860)

Net Change

(860)

1,119

-

259

Indebtedness at the end of the financial year

 

 

 

 

i) Principal Amount

6,066

2,067

-

8,133

ii) Interest due but not paid

-

-

-

 

iii) Interest accrued but not due

-

-

 

 

Total (i+ii+iii)

6,066

2,067

-

8,133

Remuneration of Directors and Key Managerial Personnel

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

 

 

 

(Amount in INR million)

SI. No.

Particulars of Remuneration

Kiran Mazumdar Shaw (MD)

Jonathan Hunt (WTD & CEO)

Total Amount

1

Gross salary

 

 

 

 

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

-

47.21

47.21

 

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

-

 

 

 

(c) Profits in lieu of salary under section 17(3) Income-tax Act

-

 

 

2

Stock Option

-

42.31

42.31

3

Sweat Equity

-

 

 

4

Commission

 

 

 

 

- as % of profit

 

 

 

 

- Others, specify...

 

 

 

5

Others, (Bonus)

-

 

 

 

Total (A)

-

89.52

89.52

B. Remuneration to other directors

 

 

 

 

 

 

 

 

(Amount in INR million)

SI. No.

Particulars of Remuneration

Name of Directors

Total

1

Independent Directors

John Shaw

Russell Walls

Suresh Talwar

Paul Blackburn

Bala S Manian

Vijay Kuchroo

Vinita Bali

Catherine Rosenberg

 

 

Fee for attending board committee meetings

-

0.40

0.40

0.40

0.30

0.40

0.30

-

2.20

 

Commission

-

2.83

2.40

3.18

2.48

2.97

1.49

-

15.35

 

Total (1)

-

3.23

2.80

3.58

2.78

3.37

1.79

-

17.55

2

Other Non-Executive Directors

 

 

 

 

 

 

 

 

 

 

Fee for attending board committee meetings

0.10

-

-

-

-

-

-

0.40

0.50

 

Commission

0.34

-

-

-

-

-

-

0.78

1.12

 

Total (2)

0.44

-

-

-

-

-

-

1.18

1.62

 

Total B (1 + 2)

0.44

3.23

2.80

3.58

2.78

3.37

1.79

1.18

19.17

 

Overall Ceiling as per the Act (A+B)

 

 

 

 

 

 

 

C. Remuneration to key managerial personnel other than MD/Manager/Whole-time Director

 

 

 

(Figures in INR million)

SI. No.

Particulars

CFO

CS

Total

 

Gross salary

 

 

 

1

(a) Salary as per provisions contained in section 17(1 ) of the Income-tax Act, 1961

28.50

2.61

31.11

 

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

0.03

-

0.03

 

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

-

-

-

2

Stock Option

-

0.06

0.06

3

Sweat Equity

_

_

_

4

Commission

_

_

_

 

- as % of profit

-

-

-

 

Others, specify...

_

_

_

5

Others, please specify

-

-

-

Total

28.53

2.67

31.20

PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no penalties/punishment/ compounding of offences for the year ended March 31, 2019.

 

On behalf of the Board of Directors

Date: April 24, 2019

Kiran Mazumdar Shaw

Place: Bengaluru

Managing Director

 

DIN: 00347229

ANNEXURE 11

CORPORATE SOCIAL RESPONSIBILITY

[Pursuant to Section 135 of Companies Act, 2013]

Syngene's CSR initiatives are based on the principle of making enduring impact through programs that promote social and economic inclusion. The Company is committed to innovation, affordability and access to healthcare. In line with this commitment and as a socially responsible organization, the Company invested in CSR programs aimed at making a difference to the lives of marginalized communities.

The Company's CSR activities are executed through Biocon Foundation. Biocon Foundation develops and implements healthcare, educational, infrastructure projects, rural development, promotion of art and culture, gender equality and safety of vulnerable sections of society. For more details, visit our CSR Policy available on our website www.syngeneintl.com.

CSR Committee

The CSR Committee of our Board provides oversight of CSR Policy and monitors execution of various activities to meet the set CSR objectives.

The members of the CSR Committee are-

a) Dr. Bala S Manian, Chairperson

b) Mr. Suresh N Talwar

c) Dr. Vijay Kuchroo

d) Ms. Vinita Bali

e) Prof. Catherine Rosenberg

Financial details

The provisions pertaining to corporate social responsibility as prescribed under Section 135 of the Companies Act, 2013 are applicable to the Company. A summary of the financial details as sought by the Companies Act, 2013 are as follows -

Particulars

Amount

Average net profit before tax of the Company for last three financial years*

3,167

Prescribed CSR expenditure (2% of the average net profit as computed above)

63.34

Details of CSR spent during the financial year :

 

Total amount to be spent for the financial year

63.34

Total amount spent

63.34

Amount unspent, if any

Nil

The details of the amount spent during the financial year is detailed below:

 

 

 

 

 

 

 

Rs. in Mn

SI No

CSR project / program name

Sector

Location of project / program

Amount outlay (budget)

Amount spent on the projects or programs

Cumulative spend up to the reporting period. - Biocon

Amount spent: direct/ through external agency

(i)

Expenditure on Projects

& Programs

 

 

 

 

 

1

Cancer Screening

Promoting Healthcare

Karnataka, Punjab, Delhi, Assam, Kerala

5.65

5.65

5.65

Biocon Foundation

2

Cubbon Park

Restoration of sites of historical Importance

Bengaluru, Karnataka

0.10

0.10

0.10

Biocon Foundation

3

Drinking Water

Water, Sanitation and Hygiene

Bengaluru Rural, Karnataka

3.02

3.02

3.02

Biocon Foundation

4

eLaj Smart Clinic

Promoting Healthcare

Karnataka, Rajasthan, Nagaland

13.15

13.15

13.15

Biocon Foundation

5

Government School Construction

Rural Development

Bengaluru Rural, Karnataka

2.41

2.41

2.41

Biocon Foundation

6

Government, School Programs

Promoting Education

Karnataka

5.98

5.98

5.98

Biocon Foundation

7

Grant in Aid for Government Hospital

Promoting Healthcare

Karnataka, Kerala, Maharastra,

2.09

2.09

2.09

Biocon Foundation

8

Institute of Bioinformatics and Applied Biotechnology

Promoting Education

Bengaluru, Karnataka

0.90

0.90

0.90

Biocon Foundation

9

India Foundation for the Arts

Promotion of Traditional Arts

Karnataka

0.75

0.75

0.75

Biocon Foundation

10

Kylasanahalli link road

Rural Development

Bengaluru Rural, Karnataka

1.83

1.83

1.83

Biocon Foundation

11

Lake Rejuvenation

Environmental Sustainability

Bengaluru Rural, Karnataka

19.38

19.38

19.38

Biocon Foundation

12

Malnutrition

Promoting Healthcare

Karnataka , Telangana

1.71

1.71

1.71

Biocon Foundation

13

Sanitation

Water, Sanitation and Hygiene

Karnataka

1.06

1.06

1.06

Biocon Foundation

14

VTU NASD

Enhancing Vocational skills

Uttara Kannada, Karnataka

0.88

0.88

0.88

Biocon Foundation

15

Women's Safety

Empowering Women

Bengaluru Rural, Karnataka

1.35

1.35

1.35

Biocon Foundation

(ii)

Administrative Expenses

Office expenses

Bengaluru, Karnataka

3.08

3.08

3.08

Biocon Foundation

 

Total

 

 

63.34

63.34

63.34

 

Responsibility Statement

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

 

For and on behalf of the Board

 

Bengaluru

Kiran Mazumdar Shaw

Bala S Manian

April 24, 2019

Managing Director

Chairperson, CSR Committee

 

DIN: 00347229

DIN: 01327667

 


Mar 31, 2018

BOARD''S REPORT

Dear Members,

On behalf of the Board of Directors (the ''Board''), it''s our immense pleasure to present the 25th Annual Report of your Company, along with the audited financial statements and auditors'' report for the financial year ended March 31, 2018.

FINANCIAL REVIEW

Your Company''s performance during FY18, compared to the previous year is summarized below.

(Rs. in Mn)

Particulars

March 31, 2018

March 31, 2017

Total revenue

14,849

12,716

Total expenditure

9,587

7,933

Profit before interest, depreciation and tax

5,262

4,783

Depreciation and interest cost

1,541

1,318

Profit before tax

3,721

3,465

Tax expenses

670

592

Profit for the year

3,051

2,873

Other comprehensive income

87

848

Total comprehensive income

3,138

3,721

Key highlights of the Company''s financial performance during FY18 are as under:

- Revenue increased by 17% (from Rs. 12,716 Mn to Rs. 14,849 Mn)

- Earnings before interest tax depreciation and amortization (EBITDA) grew by 10% (from Rs. 4,783 Mn to Rs. 5,262 Mn)

- Profit after tax increased by 6% (from Rs. 2,873 Mn to Rs. 3,051 Mn)

a detailed financial performance analysis is provided in the Management discussion & Analysis Report, which is part of this Annual Report.

OPERATIONAL REVIEW

during FY18, the Company continued to make significant impact on its customers'' businesses through its commitment to innovation, operational efficiencies, diligent cost control, strong emphasis on quality and compliance. In line with the Company''s vision of becoming a world-class partner to its clients, it ramped its capabilities, expanded capacity, entered new markets and successfully cleared various regulatory audits. Moreover, the Company also added new clients and widened the scope of engagement with existing clients. All this was done with a singular objective of becoming a truly ''one-stop solution'' for our partners.

The year saw significant traction in the Company''s dedicated R&D Centre vertical. The ongoing collaboration with Bristol Myers-Squibb (BMS) for the BMS Biocon R&D Centre (BBRC) has been extended until 2026. Syngene will also set up a new dedicated facility for BMS spread across 25,000 sq ft. that will house an additional team of 75 scientists. Syngene and Amgen Inc. also expanded the size and scope of the Syngene Amgen R&D Centre (SARC), the dedicated R&D Centre set up for Amgen. According to the agreement, the size of SARC will double to 50,000 sq. ft. and will house a multi-disciplinary team of up to 185 Syngene scientists. The collaboration with Abbott Nutrition for the Abbott

Nutrition Research & Development (ANRD) centre expired at the end of the calendar year 2017.

The discovery research business got a significant impetus with the signing of a strategic collaboration with GlaxoSmithKline (GSK). The collaboration will focus on accelerating the discovery of new drug candidates using Syngene''s discovery services platforms. Syngene will set up a customized discovery research laboratory for GSK to support projects across several therapeutic areas.

Adherence to quality and compliance is one of the cornerstones of Syngene''s success. The Company diligently complies with global regulatory requirements and continues to impress regulatory authorities and auditors with the quality of its facilities and its adherence to various GXP requirements. During FY18, Syngene successfully cleared inspection of the Pharmaceutical and Medical Devices Agency (PMDA) inspection, considered one of the most stringent regulatory authorities globally. During FY18, a Form 483 was issued by the US FDA for the small molecule Human Pharmacology Unit (HPU) laboratory. The Company has filed its responses to the regulator and expects the Form 483 to be withdrawn. It also strengthened its presence in the nonpharma sector with the signing of a multi-year development and manufacturing collaboration with Zoetis, a global leader in animal health.

Biologics is one of the most promising sectors and is estimated to contribute close to 30% of the total pharma market revenue globally by 2020. The Company has made strategic investments in strengthening its capacity and capabilities in biologics research and manufacturing to leverage on the emerging business opportunities in this domain. It commissioned a new state-of-the-art biologics manufacturing plant complete with three cutting-edge single-use bioreactors, each with a capacity of 2,000 litres, and is designed for manufacturing clinical as well as commercial batches for global markets.

The construction activities at the upcoming API manufacturing facility at Mangalore has commenced and the facility is scheduled to begin operations by FY20. When commissioned, it will significantly ramp up Syngene''s commercial manufacturing capacities. The S2 facility, that was significantly impacted due to the fire in December 2016 has been refurbished and is expected to be operational in the first half of FY19. Once operational, it will further add to Syngene''s capacity. The total capacity at the Human Pharmacology Unit ("HPU") in Bangalore currently stands at 190, with the addition of 76 more beds during FY18. This will further strengthen the bioequivalence study capabilities of the Company''s clinical development business.

SUBSIDIARY COMPANY/JOINT VENTURE

During FY18, the Company incorporated a wholly-owned subsidiary, Syngene USA Inc., to have a firm foothold in the US market and allow easy access to its clients based in that region.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 (''the Act'') and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, salient features of the financial statements, performance and financial position of subsidiary is given in Form AOC-1 as Annexure 1 to this Report. The consolidated financial statements presented in this Annual Report include the financial results of the subsidiary.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments have occurred after the closure of the financial year till the date of this Report, which may affect the financial position of the Company.

DIVIDEND

The Board recommended a final dividend of Re. 1 (i.e. 10%) per equity share for FY18. The total dividend pay-out will amount to approximately Rs. 242 Mn (including dividend distribution tax). The dividend, if approved at the Annual General Meeting (AGM), will be paid to those members whose name appears in the Company''s Register of Members as on the record date of July 18, 2018 and the dividend payout date is August 1, 2018.

In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations"), the Dividend policy of the Company is available on the Company''s website at http://www. syngeneintl.com/investor-relations/corporategovernance. A copy of the same is annexed to this Report as Annexure 2.

RELATED PARTY CONTRACTS OR ARRANGEMENTS

There were no materially significant related party transactions entered between the Company, Directors, management or their relatives, except for those disclosed in the financial statements.

All the contracts/arrangements/transactions entered by the Company with the related parties during FY18 were in the ordinary course of business and on an arm''s length basis.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such a contract or arrangement in Form AOC-2 does not form a part of the Report.

The Company formulated the policy on ''Materiality of Related Party'' transactions and on dealing with ''Related Party Transactions'' and the same is available at http://www.syngeneintl. com/investor-relations/corporate-governance.

The details of related party disclosures form part of note to the financial statements provided in the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars, as prescribed under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 3.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs under Section 124 and 125 of the Companies Act, 2013 requires dividends that are not encashed/claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF). In FY18, there was no amount due for transfer to IEPF.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the Company''s nature of business. Your Company continues to be one of the largest and fastest growing Contract Research Organization ("CRO") in the world.

LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements.

DEPOSITS

During the financial year, the Company did not accept any deposits covered under Chapter V of the Companies Act, 2013.

CREDIT RATING

CRISIL has rated ''CRISIL AA/Positive'' on the banking facilities availed by Syngene from various banking/financial institutions.

The rating on the short-term facilities were reaffirmed at ''CRISIL A1 ''.

PAID-UP CAPITAL

During the financial year, the paid-up share capital stood at Rs. 2,000 Mn.

HUMAN RESOURCES

Your Company considers its people its biggest assets. As on March 31, 2018, it had 4,138 full-time employees, including 3,540 scientists. This diverse talent pool of scientific and non-scientific professionals continues to support it business in achieving sustainable growth by building the right capabilities. In FY18, your Company was awarded for its Best Talent Management Strategy by the ET Now - World HRD Congress. To attract and retain the best talent, Syngene continues to foster an engaging work environment to attract and retain the best talent. Going forward, the Company intends to continue driving significant growth with its strong intellectual strength and deep knowledge base.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure 4.

Particulars of employees'' remuneration, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the said information, was sent to the shareholders of the Company and others entitled thereto.

The said information is available for inspection at the registered office of the Company during working hours up to the date of the ensuing AGM. Any shareholder interested in obtaining such information may write to the Company Secretary in this regard.

EMPLOYEE STOCK OPTION PLAN

Syngene''s Employee Stock Option Plan ("the Plan") is administered by the Syngene Employee Welfare Trust ("the Trust") under the instructions and supervision of the Nomination and Remuneration Committee (NRC). The Trust overall holds 66,80,000 equity shares of the Company. The NRC, on various occasions, had granted options to various eligible employees of the Company through the trust. The options under each tranche will vest in the ratio of 25%, 35% and 40% at end of second, third and fourth year from the date of each grant, respectively.

The exercise period under each tranche is three years from the date of each vesting.

During the financial year, there was no change in the Plan and the Plan is in compliance with SEBI (Share Based Employee Benefits) Regulation, 2014. A total of 1,21,500 options were granted to eligible employees and 14,47,561 equity shares were transferred to eligible employees by the Syngene Employee Welfare Trust on exercise of stock options. Further, the Company has obtained a certificate from the statutory auditors of the Company that the scheme has been implemented in accordance with SEBI (Share Based Employee Benefits) Regulation, 2014 and in accordance with the resolution passed by the shareholders.

As required under Regulation 14 of the above said Regulation, the applicable disclosure as on March 31, 2018 is annexed to this Report as Annexure 5. The details of the Plan form part of the notes to accounts of the financial statements in this Annual Report.

CORPORATE GOVERNANCE REPORT

The Company''s philosophy on Corporate Governance is to consistently follow good governance practices based on fairness, integrity, transparency, professionalism, honesty and accountability in all its business practices and dealings.

The Company''s corporate governance framework focusses on adequate and timely disclosures, transparent and robust accounting policies and a strong and Independent Board to maximize shareholders'' benefits.

The Company''s Report on corporate governance for the financial year ended March 31, 2018 as per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

AUDITORS'' CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V(E) of SEBI Listing Regulations, the auditors'' certificate on compliance with the requirement of corporate governance is enclosed as Annexure 6 to this Report. The auditors'' certificate for FY18 does not contain any qualification, reservation or adverse remarks.

DIRECTORS I. Appointment

During the financial year, Jonathan Hunt, Chief Executive Officer, has been elevated as the Whole-time Director of the Company effective from May 1, 2017 for a tenure of five years and the same has been approved by the shareholders at the 24th Annual General Meeting held on July 28, 2017,

The Board also appointed Vinita Bali as an Independent Director (Additional) on the Board of the Company effective from July 31, 2017, who shall hold office up to the date of the ensuing AGM. Thereafter, subject to shareholders'' approval, she will be appointed as an Independent Director for a term of three years commencing from the date of the Board''s appointment till the conclusion of the AGM proposed to be held in 2020 and she will not be liable to retire by rotation.

II. Re-appointment

The shareholders, at the AGM held on June 30, 2016, had appointed Suresh Talwar as an Independent Director for a tenure of three years i.e. commencing from the date of board''s appointment till the conclusion of 25th AGM scheduled on July 25, 2018.

The Board, at its meeting held on April 25, 2018, had reappointed Suresh Talwar as an Independent Director for an another term of five years commencing from the conclusion of the 25th AGM till the conclusion of the 30th AGM proposed to be held in 2023 and he will not be liable to retire by rotation.

The brief resumes of the Directors seeking appointment/ re-appointment at the ensuing AGM, in pursuance of Regulation 36(3) of SEBI Listing Regulations, are annexed to the AGM Notice.

III. Retirement

John Shaw, shall retire by rotation at the ensuing AGM and is eligible for re-appointment. The Board recommends his re-appointment and the same forms part of the AGM Notice.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Kiran Mazumdar Shaw, Managing Director; Jonathan Hunt, Whole-time Director and CEO; M. B. Chinappa, Chief Financial Officer and Mayank Verma, Company Secretary.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company''s policy on Director''s appointment and remuneration, including the criteria for determining qualifications, independence and other matters, as provided under Section 178(3) of the Companies Act, 2013, is annexed to this Report as Annexure 7,

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Company''s Independent Directors confirming that they meet with the criteria of independence as prescribed under Section 149 (6) & (7) of the Companies Act, 2013 and SEBI Listing Regulations.

BOARD DIVERSITY

A diverse Board enables efficient functioning through differences in perspectives and skills and fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background.

The Board recognizes the importance of a diverse composition and has adopted a ''Board Diversity Policy'', which sets out the approach to diversity. The Board Diversity Policy of the Company is available at http://www.syngeneintl.com/investor-relations/ corporate-governance.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The details of said evaluation has been enumerated in the Corporate Governance Report that forms part of this Annual Report. The outcome of the Board evaluation for FY18 was discussed by the Independent Directors, the Nomination and Remuneration Committee and the Board at their meeting held on January 23, 2018.

NUMBER OF MEETINGS OF THE BOARD

The Board met four (4) times during the year under review. The details of Board meetings and attendance of the Directors is provided in the Corporate Governance Report.

AUDIT AND RISK COMMITTEE

The Audit and Risk Committee has reviewed the accounts for the year ended March 31, 2018. The Board accepted all recommendations made by the Audit and Risk Committee.

The members of the Audit and Risk Committee are Paul Blackburn (Chairman), Russell Walls and Suresh Talwar. The list and composition of the various other Board-level Committees are provided in the Corporate Governance Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company had laid down certain guidelines, policies, processes and structures to enable implementation of appropriate internal financial controls across the organization. These control processes enable and ensure the orderly and efficient conduct of the Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information. There are control processes both in manual and IT applications, including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and may not be detected. Also, evaluation of the internal financial controls is subject to the risk that the internal financial control may become inadequate because of changes in conditions or that the compliance with the policies or procedures may deteriorate.

The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control stated in the guidance note on audit of internal control over financial reporting issued by the Institute of Chartered Accountants of India.

RISK MANAGEMENT POLICY

Syngene has in place an enterprise-wide risk management architecture that provides a holistic approach to the best of its capabilities. The Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. The Audit and Risk Committee, on a quarterly basis, reviews critical risks along with its mitigation plans. The Committee also ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. The Committee, on a regular basis, reviews the Company''s portfolio of risks and examines it under the light of the Company''s Risk Appetite. The Committee also recommends changes to the risk management technique, associated frameworks, processes and practices of the Company.

DIRECTOR''S RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit and Risk Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on March 31, 2018.

In compliance with Section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby confirm the following:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period.

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The Directors had prepared the annual accounts on a going concern basis.

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants (ICAI Registration No. 101248W/W-100022) were appointed as Statutory Auditors of the Company at the 23rd AGM held on June 30, 2016, to hold office from the conclusion of the 23rd AGM till the conclusion of the 28th AGM proposed to be held in 2021.

The Auditors Report on the financial statements of the Company for the year ended March 31, 2018 does not contain any qualification, reservation or adverse remark. The Auditors Report, enclosed with the financial statements, forms part of the Annual Report.

Internal Auditors

The Board, at its meeting held on October 20, 2016, had appointed M/s. Ernst & Young LLP as the Company''s Internal Auditors for a period of three years.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013, the Board had appointed M/s. V. Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct the Secretarial Audit of the Company for FY18. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark and is annexed to this Report as Annexure 8.

REPORTING OF FRUAD BY AUDITORS

During the year under review, neither the statutory auditors nor the secretarial auditors have reported to the Audit and Risk Committee any instances or material fraud on the Company by its officers or employees under Section 143(12) of the Companies Act, 2013, the details of which need to be provided in this Report.

EXTRACT OF ANNUAL RETURN

In compliance with Section 92 and Section 134(3)(a) of the Companies Act, 2013, read with applicable Rules made there under, an extract of the Annual Return in Form MGT-9 is annexed to this Report as Annexure 9.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, the Company constituted a Corporate Social Responsibility Committee, comprising Dr. Bala S Manian (Chairman), Suresh Talwar,

Dr. Vijay Kuchroo, Vinita Bali and Prof. Catherine Rosenberg. The Committee monitors and oversees various CSR initiatives of the Company.

The Company''s CSR initiatives are based on the principle of making a long-term impact through programmes that promote social and economic inclusion. The Company is committed to innovation and access to affordable healthcare. In line with this commitment and as a socially responsible organization, the Company invested in CSR programmes aimed at making a difference to the lives of marginalized communities.

The Company''s CSR activities are executed through Biocon Foundation, which develops and implements programmes in the areas of healthcare, education, infrastructure projects, rural development, promotion of art and culture, gender equality and safety of the vulnerable sections of the society.

The Company''s CSR policy is available on its website at http:// www.syngeneintl.com/investor-relations/corporate-governance.

A detailed report on CSR activities is annexed to this Report as Annexure 10.

BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report ("BRR") forms part of this Annual Report. The BRR contains a detailed report describing the initiatives taken by the Company on business responsibilities vis-a-vis the nine principles of the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business framed by the Ministry of Corporate Affairs.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company''s Whistle Blower Policy allows employees, Directors and other stakeholders to report matters such as genuine grievances, corruption, fraud, misconduct, misappropriation of assets, non-compliance of code of conduct of the Company or any other unethical practices. The Policy provides adequate safeguard against victimization to the Whistle Blower and enables them to raise concerns to the Integrity Committee and also provides an option of direct access to the Chairperson, Audit and Risk Committee. Syngene has engaged "In Touch India, Ernst & Young" to provide online platform to raise complaints by the whistle blower. During FY18, none of the personnel have been denied access to the Chairman of the Audit and Risk Committee.

The Whistle Blower Policy is available on the Company''s website at http://www.syngeneintl.com/investor-relations/corporate-governance.

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Syngene has a strict Prevention of Sexual Harassment (POSH) Policy in accordance with the statutory requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is applicable to all employees, including the Company''s contractual employees. The Company is committed to providing a workplace that is free from discrimination, harassment and victimization, regardless of gender, race, creed, religion, place of origin and sexual orientation of a person employed or engaged with the Company. The Internal Committee (IC) has been constituted to consider and redress all complaints of sexual harassment at workplace. Employee sensitization programmes on POSH were conducted during the year under review. In FY18, one case was reported and resolved under POSH as on March 31, 2018.

SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS

During FY18, there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBI Listing Regulations.

SECRETARIAL STANDARD DISCLOSURE

The Company has complied with the provisions of applicable secretarial standard issued by The Institute of Company Secretaries of India ("ICSI").

GREEN INITIATIVE

We request all the shareholders to support the ''Green Initiative'' of the Ministry of Corporate Affairs and Syngene''s continuance towards greener environment by enabling service of Annual Report, AGM Notice and other documents electronically to your email address registered with your Depository Participant/ Registrar and Share Transfer Agent.

We also request all the investors whose email id is not registered to take necessary steps to register their email id with the Depository Participant/ Registrar and Share Transfer Agent.

ACKNOWLEDGMENTS

We place on record our gratitude to our employees at all levels who have contributed to the growth and sustained success of the Company through their dedication, hard work, cooperation and support. We would like to thank all our clients, vendors, bankers, investors, media and other business associates for their continued support and encouragement during the year.

We also thank the Government of India; the Government of Karnataka; the Ministry of Information Technology and Biotechnology; the Ministry of Commerce and Industry; the Ministry of Finance and Corporate Affairs; the Department of Scientific and Industrial Research; Central Board of Indirect Taxes and Customs; the Reserve Bank of India; the Central Board of Direct Tax; SEZs (Special Economic Zones), BIRAC (National Biopharma Mission) and all other government agencies for their support during FY18 and look forward to their continued support in future.

For and on behalf of the Board,

Date: April 25, 2018 Kiran Mazumdar Shaw

Place: Bengaluru Managing Director

DIN: 00347229


Mar 31, 2017

Dear Shareholders,

The Board of Directors hereby present the 24th Annual Report of your Company (the Company) along with the Audited Financial Statements and the Auditors’ Report for the financial year ended March 31, 2017.

Financial Review

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

Rs. In Million

Particulars

March 31, 2017

March 31, 2016

Total revenue

12,716

11,133

Total expenditure

7,933

7,266

Profit before interest depreciation and tax

4,783

3,867

Depreciation & Interest

1,318

1,057

Profit before tax

3,465

2,810

Provision for tax

592

402

Profit after tax

2,873

2,408

Total Profit available for Appropriation

9,980

7,107

The highlights of the Company’s financial performance during FY 2016-17 are as under:

- Revenue increased by 14% (from Rs.11,133 million to Rs.12,716 million)

- Earnings before interest tax depreciation and amortisation (EBITDA) increased by 24% (from Rs.3,867 million to Rs.4,783 million)

- Profit after tax (PAT) increased by 19% (from Rs.2,408 million to Rs.2,873 million)

A detailed financial performance analysis is provided in the Management Discussion & Analysis Report which is part of this annual report.

Operational Review

In order to build its capabilities in the niche but highly promising area of bioinformatics, Syngene acquired the systems biology and pharma services practice of Strand Life Sciences Private Limited along with a team of highly experienced scientists and data analysts. We also established an integrated, multi-disciplinary drug discovery and development center for Amgen Inc. and a Nutrition Research and Development Lab for Herbalife Nutrition. With this, the company now has five dedicated centers i.e. for Bristol-Myers Squibb, Abbott Nutrition, Baxter Inc., Amgen Inc. and Herbalife Nutrition. We have also commissioned Phase I of our new Formulation facility that is capable of manufacturing clinical supplies as well as commercial supplies of small volume niche technology products and complies with regulatory requirements of the USFDA, EMA and other regulatory authorities.

During December 2016, there was a fire incident at one of the company’s research facilities at Biocon Park in Bengaluru. This facility, including office and lab space, makes up approximately 20% of our total revenues and 12% of our net block. There was no injury or loss of life due to this incident and the company immediately implemented its Business Continuity Plan (BCP) to minimize impact on operations. Further, Industrial All Risk Insurance Policy has helped the Company to minimize the financial impact on account of damage to assets and loss of profits. The said facility has since been non-operational. We are in the process of obtaining necessary statutory approvals to commence the refurbishing activities.

Paid Up Capital

During the financial year, the equity shares paid up capital stood at Rs.2000 million.

Human Resource

Employees are the cornerstone of our business. The Company has a co-operative work culture. We have an experienced and qualified team of scientists across multiple disciplines. As on March 31, 2017 we have 3,492 full time employees including 3,053 scientists. With our strong intellectual strength and deep knowledge base, we intend to continue to drive significant growth in the years to come.

Dividend

During the financial year, the Board of Directors (“the Board”) has adopted the Dividend Distribution Policy as mandated under Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 (SEBI Listing Regulations, 2015). The objective of this policy is to help the Board to appropriately reward the shareholders by striking a balance between dividend pay-outs and long term capital appreciation. The “Dividend Distribution Policy” of the Company is available at http://www.syngeneintl.com/investor-relations/corporate-governance and is annexed to this report as Annexure 1.

The Board has recommended a final dividend of Rs.1.00 (i.e. 10%) per equity share for the financial year ended March 31, 2017, entailing a dividend pay-out of Rs.24 crores (including dividend distribution tax) subject to shareholders’ approval at the ensuing Annual General Meeting.

The record date for reckoning the eligible shareholders for the purpose of dividend pay-out will be Friday, July 21, 2017 and dividend will be paid on August 3, 2017.

Transfer of unpaid and unclaimed amount to Investor Education and Protection Fund

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, dividend which remains unpaid or unclaimed for a period of seven years from the date of its transfer to the Unpaid Dividend Account is required to be transferred by the Company to the Investor Education and Protection Fund (IEPF), established by the Central Government under the provisions of Section 125 of the Companies Act, 2013. During the financial year, there was no amount due for transfer to IEPF.

Employee Stock Option Plan

Syngene Employee Stock Option Plan (“the Plan”) is administered by the Syngene Employee Welfare Trust under the instructions and superintendence of Nomination and Remuneration Committee of the Board. During the financial year ended March 31, 2017, a total of 166,000 options were granted to eligible employees and 1,405,694 equity shares were transferred to eligible employees on exercise of stock options by the Syngene Employee Welfare Trust. Further, the Company has obtained a certificate from the statutory auditors of the Company that the scheme has been implemented in accordance with these regulations and in accordance with the resolution passed by the shareholders.

As required under Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the applicable disclosure as on March 31, 2017 is annexed to this report as Annexure 2. The details of the Plan form part of the notes to accounts of the financial statements in this Annual Report.

There is no material change in the Plan and the Plan is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014.

Material Changes and Commitments

No material changes and commitments have occurred subsequent to the end of the financial year till the date of this report, which affects the financial position of the Company.

Change in Nature of Business

There has been no change in the nature of business of the company. Your Company continues to be one of the leading contract research organisation (CRO) in the country.

Loans, Guarantees or Investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements.

Deposits

During the financial year, the company did not accept any deposits covered under chapter V of the Companies Act, 2013.

Credit Rating

CRISIL has maintained it’s ‘CRISIL AA/Stable’ rating on the banking facilities availed by Syngene from various banks/ financial institutions. The rating on the short-term facilities was reaffirmed at ‘CRISIL A1 ’.

Directors

I. Appointment

During the financial year, the Board has appointed Jonathan Hunt as Chief Executive Officer (CEO) of the Company effective from April 1, 2016.

The Board of your Company, at its meeting held on April 27, 2017, has appointed Jonathan Hunt, Chief Executive Officer, as a Whole-time Director of the Company for a period of five years commencing from May 1, 2017, not liable to retire by rotation, subject to shareholder’s approval in the ensuing Annual General Meeting.

The Board has also appointed Dr. Vijay Kuchroo as an Additional Independent Director on the Board of the Company effective from March 1, 2017, who shall hold office up to the date of ensuing Annual General Meeting. Thereafter, subject to shareholder’s approval, he will be appointed as an Independent Director for a term of three years commencing from the date of Board’s appointment till the conclusion of Annual General Meeting proposed to be held in 2020 and not liable to retire by rotation.

II. Re-appointment

The shareholders at its Annual General Meeting held on July 23, 2014 had appointed Russell Walls as an Independent Director for a tenure of three years i.e. till the conclusion of Annual General Meeting proposed to be held in the year 2017. Now, Russell Walls tenure will come to an end at this Annual General Meeting.

The Board at its meeting held on April 27, 2017, had reappointed Russell Walls, as an Independent Director for another term of three years commencing from the conclusion of the ensuing Annual General Meeting till the conclusion of the Annual General Meeting proposed to be held in 2020 and not liable to retire by rotation.

The brief resumes of the Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting, in pursuance of Regulation 36(3) of SEBI Listing Regulation, 2015, are annexed to the Annual General Meeting Notice.

III. Retirement

Prof. Catherine Rosenberg, shall retire by rotation at the ensuing Annual General Meeting and is eligible for reappointment. The Board recommends her re-appointment and the same forms part of Annual General Meeting Notice.

IV. Resignation

Peter Bains, Non-Executive Director and former CEO of your Company, has stepped down from the Board with effect from the conclusion of the Board meeting held on April 27, 2017. Peter has been associated with the Company since 2010 and was instrumental in driving its growth and a successful Initial Public Offer (IPO).

Key Managerial Personnel (KMP)

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Kiran Mazumdar Shaw, Managing Director, Jonathan Hunt, Chief Executive Officer, M B Chinappa, Chief Financial Officer and Mayank Verma, Company Secretary. During the financial year, Jonathan Hunt has been appointed as Chief Executive Officer of the Company with effect from April 1, 2016.

Declaration by Independent Directors

The Company has received necessary declaration from the Independent Directors in accordance with the requirements of Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and the SEBI Listing Regulation, 2015.

Policy on Directors’ Appointment and Remuneration

The policy of the Company on Director’s appointment and remuneration, including criteria for determining qualifications, independence and other matters, as provided under Section 178(3) of the Companies Act, 2013, is annexed to this report as Annexure 3.

Meetings of the Board

A calendar of board meetings is prepared and circulated in advance to the Directors. During the financial year, the Board met five times, details of which are given in the Corporate Governance Report that forms part of this Annual Report.

The intervening gap between the two Board meetings were within the period as prescribed under the Companies Act, 2013 and the SEBI Listing Regulations, 2015.

Audit Committee

The Audit Committee of the Company comprises entirely of Independent Directors. The members of the Committee are Russell Walls, Chairman, Paul Blackburn and Suresh Talwar. The Board has accepted all the recommendations made by the Audit Committee during the financial year.

The composition and other relevant details of other Board level committees i.e. Audit and Risk Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee are disclosed separately in the Corporate Governance Report which forms part of this annual report.

Board Diversity

A diverse Board enables efficient functioning through differences in perspectives and skills, and also fosters differentiated thought processes on the back of varied industrial and management expertise, gender, knowledge and geographical background. The Board recognises the importance of a diverse composition and has adopted a Board Diversity Policy which sets out the approach to diversity. The “Board Diversity Policy” of the Company is available at http://www.syngeneintl.com/investor-relations/ corporate-governance.

Board Evaluation

As per the provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015, the annual evaluation was carried out as per the criteria laid down by the Nomination and Remuneration Committee to review performance of the Board, its Committees, Chairperson and Individual Directors. The details of said evaluation has been enumerated in the Corporate Governance Report that forms part of this annual report. The outcome of the Board evaluation for the financial year 2016-17 was discussed by the Nomination and Remuneration Committee and the Board at their meeting held on January 24, 2017.

Director’s Responsibility Statement

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory, and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit and Risk Committee, is of the opinion that the Company’s internal financial controls were adequate and effective as on 31 March 2017.

In Compliance with section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby confirms the following:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors

Statutory Auditors

M/s. B S R & Co. LLP Chartered Accountants (ICAI Registration No. 101248W/W-100022) were appointed as Statutory Auditors of the Company at the Annual General Meeting held on June 30, 2016, to hold office from the conclusion of 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting proposed to be held in 2021, subject to annual ratification of their appointment by the shareholders.

As required under the provisions of section 139(1) of the Companies Act, 2013, the Company has received a written consent from B S R & Co. LLP Chartered Accountants to their appointment and a eligibility certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Companies Act, 2013.

Accordingly, the appointment of M/s. B S R & Co. LLP Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification of the shareholders and forms part of the Annual General Meeting Notice.

Internal Auditors

The tenure of M/s. Price Waterhouse Coppers & Co. (PwC) LLP Chartered Accountants, as Internal Auditors of the Company, had come to an end in October 2016. Based on the recommendation of Audit and Risk Committee, the Board at its meeting held on October 20, 2016, has appointed M/s. Ernst & Young LLP as new Internal Auditors of the Company for a period of three years.

Secretarial Auditors

Pursuant to section 204 of the Companies Act, 2013 read with rules made thereunder, inter-alia requires every listed company to annex, with its Board’s report, a Secretarial Audit Report given by a Company Secretary in Practice, in the Form MR-3.

The Board appointed M/s. V. Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct the Secretarial Audit of the Company for the Financial Year 2016-17. The report does not contain any qualification, reservation or adverse remarks. The Board at its meeting held on April 27, 2017, has appointed M/s. V Sreedharan & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year 2017-18. The Secretarial Audit Report of the Company for the financial year 2016-17 is annexed to this report as Annexure 4.

Board’s Response on the remarks made by Secretarial Auditors and Statutory Auditors

There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report and by the Company Secretary in practice in their Secretarial Audit Report.

Corporate Governance Report

The Company’s philosophy on Corporate Governance is to consistently follow sound Corporate Governance practices based on fairness, integrity, transparency, professionalism, honesty and accountability in all its business practices and dealings. The Company’s corporate governance framework focuses on adequate & timely disclosures, transparent & robust accounting policies and a strong & Independent Board in order to maximise shareholders benefit.

The Company’s report on Corporate Governance for the financial year ended March 31, 2017, as per regulation 34(3) read with Schedule V of the SEBI Listing Regulation, 2015, forms part of this annual report.

Auditors’ Certificate on Corporate Governance

As required under Schedule V(E) of SEBI Listing Regulation, 2015, the auditors’ certificate on compliance with the requirement of corporate governance is enclosed as Annexure 5 to this report. The auditors’ certificate for financial year 2016-17 does not contain any qualification, reservation or adverse remarks.

Management Discussion and Analysis Report

As required under Regulation 34 of SEBI Listing Regulation, 2015, the Management Discussion and Analysis Report forms part of this annual report.

Business Responsibility Report

Regulation 34(2)(f) of the SEBI Listing Regulation, 2015, mandates inclusion of the Business Responsibility Report as part of the Annual Report for top 500 listed entities based on market capitalization. The Business Responsibility Report contains a detailed report describing the initiatives taken by the Company on business responsibilities vis-a-vis the nine principles of the National Voluntary Guidelines on social, environmental and economic responsibilities of business framed by the Ministry of Corporate Affairs. In compliance with the regulation, the Company’s first Business Responsibility Report forms part of this annual report.

Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, the Company constituted a Corporate Social Responsibility Committee, which comprises of Dr. Bala S Manian, Chairman, Suresh Talwar, Dr. Vijay Kuchroo and Prof. Catherine Rosenberg. The Committee monitors and oversees various CSR initiative activities of the Company.

The Company’s CSR initiatives are based on the principle of making enduring impact through programs that promote social and economic inclusion. The Company is committed to innovation, affordability and access to healthcare. In line with this commitment and as a socially responsible organization, the Company invested in CSR programs aimed at making a difference to the lives of marginalized communities.

The Company’s CSR activities are executed through Biocon Foundation. Biocon Foundation develops and implements programs in the area of healthcare, education, infrastructure, rural development, promotion of art and culture, gender equality and development of vulnerable sections of the society.

The CSR policy of the Company is available on the Company’s website at http://www.syngeneintl.com/investor-relations/corporate-governance. A detailed report on CSR activities is annexed to this report as Annexure 6.

Adequacy of Internal Financial Control

The Company had laid down certain guidelines, policies, processes and structures to enable implementation of appropriate internal financial controls across the organisation. These control processes enable and ensure the orderly and efficient conduct of the company’s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

There are control processes both on manual and IT applications including ERP applications, wherein the transactions were approved and recorded. Review and control mechanisms are built in to ensure that such control systems are adequate and operating effectively.

Because of the inherent limitation of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and not be detected. Also, evaluation of the internal financial controls are subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedure may deteriorate.

Risk Management Policy

The Company has put in place an enterprise wide risk management framework. This holistic approach provides the assurance that, to the best of its capabilities, the Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. The Audit and Risk Committee, on a quarterly basis, reviews critical risks along with its mitigation plans. The Committee also ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. The Committee on regular basis, reviews the Company’s portfolio of risks and considers it against the Company’s Risk Appetite. The Committee also recommends changes to the risk management technique, associated frameworks, processes and practices of the Company.

Whistle Blower Policy/Vigil Mechanism

The Company’s Whistle Blower Policy, allows employees, directors and other stakeholders to report matters such as genuine grievances, corruption, fraud & misconduct, misappropriation of assets and non-compliance of Code of Conduct of the Company or any other unethical practices. The policy safeguards the whistle blowers to report concerns or grievances and also provides a direct access to the Chairman of the Audit Committee. During the financial year, none of the personnel has been denied access to the Chairman of the Audit Committee.

The Whistle Blower Policy is available on the Company’s website at http://www.syngeneintl.com/investor-relations/ corporate-governance.

Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013

Your company is committed to providing a workplace that is free from discrimination, harassment and victimization, regardless of gender, race, creed, religion. The Company has a policy in place on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in compliance with the requirements of “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”.

The object of this policy is to ensure prevention of sexual harassment and provide a safe working environment. The Policy is applicable to all employees including contractual employees of the Company. The Internal Complaints Committee (“ICC”) has been constituted to consider and redress all complaints of sexual harassment at workplace. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC while dealing with issues related to sexual harassment at workplace against any employee. During the financial year, two cases were reported under prevention of sexual harassment policy and both of them were satisfactorily addressed and resolved.

Significant and Material orders by the Regulators or Courts or Tribunals

During the financial year, there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in the future.

Related Party Contracts or Arrangements

There were no materially significant related party transactions entered between the Company, directors, management or their relatives except for those disclosed in the financial statements.

All the contracts/arrangements/transactions entered into by the Company with the related parties during the financial year 2016-17 were in the ordinary course of business and on an arm’s length basis.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form a part of the report.

The company formulated the policy on “Materiality of Related Party Transactions and Dealing with Related Party Transactions’’ and the same is available http://www. syngeneintl.com/investor-relations/corporate-governance.

The details of related party disclosures forms part of note to the financial statements provided in the annual report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars, as prescribed under section 134 (3) (m) of the Companies Act 2013, read with Rule 8(3) of the Companies (Accounts) Rules 2014 are annexed to this report as Annexure 7.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure 8.

Particulars of employees remuneration, as required under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. Considering first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the said information, was sent to the shareholders of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company during working hours up to the date of ensuing Annual General Meeting. Any shareholder interested in obtaining such information may write to the Company Secretary in this regard. The said information is also available on the website of the company at www.syngeneintl. com.

Extract of Annual Return

In compliance with Section 92 and Section 134(3)(a) of the Companies Act 2013 read with applicable Rules made thereunder, an extract of the annual return in Form MGT-9 is annexed to this report as Annexure 9.

Statutory Disclosures

None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and SEBI Listing Regulations 2015.

Acknowledgments

We place on record our gratitude to our employees at all levels who have contributed to the growth and sustained success of the Company through their dedication, hard work, cooperation and support. We would like to thank all our clients, vendors, bankers, investors, media and other business associates for their continued support and encouragement during the year.

We also thank the Government of India, the Government of Karnataka, the Ministry of Information Technology and Biotechnology, the Ministry of Commerce and Industry, the Ministry of Finance and Corporate Affairs, the Department of Scientific and Industrial Research, the Customs and Excise Departments, the Reserve Bank of India, the Income Tax Department, SEZs (Special Economic Zones), LTU Bengaluru and all Other Government Agencies for their support during the year and look forward to their continued support in the future.

For and on behalf of the Board

Date: April 27, 2017 Kiran Mazumdar Shaw

Place: Bengaluru Managing Director


Mar 31, 2015

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