Dear Members,
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.
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
investor@syngeneintl.com.
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
maintenanceofadequateaccountingrecordsinaccordance 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 |
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