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Syngene International Ltd.

BSE: 539268 | NSE: SYNGENE |

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Series: EQ | ISIN: INE398R01022 | SECTOR: Miscellaneous

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Annual Report

For Year :
2019 2018 2017 2016 2015

Director’s Report

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 : mayank.verma@syngeneintl.com

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 : einward.ris@karvy.com

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

 

Director’s Report