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Syngene International Ltd.

BSE: 539268 Sector: Health care
NSE: SYNGENE ISIN Code: INE398R01022
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VOLUME 498554
52-Week high 699.95
52-Week low 490.35
P/E 54.84
Mkt Cap.(Rs cr) 22,002
Buy Price 548.25
Buy Qty 3.00
Sell Price 548.90
Sell Qty 4.00
OPEN 564.00
CLOSE 561.00
VOLUME 498554
52-Week high 699.95
52-Week low 490.35
P/E 54.84
Mkt Cap.(Rs cr) 22,002
Buy Price 548.25
Buy Qty 3.00
Sell Price 548.90
Sell Qty 4.00

Syngene International Ltd. (SYNGENE) - Director Report

Company director report

Dear Members

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

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

As the pandemic took hold the Company suspended operations for two weeks to introduceCOVID-safe working protocols allowing it to quickly return to its vital work. Ouremployees showed unprecedented commitment and resilience: adopting shift working to reducedensity in the laboratories and working from home where possible. Many with theappropriate qualifications volunteered to work in our dedicated RT-PCR testing laboratoryserving the Bangalore community and later their colleagues through the onsite employeetesting protocol.

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

FINANCIAL REVIEW

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

(Rs in Mn )

Particulars 31st March 2021 31st March 2020
Revenue from operations 21794 20119
Other Income 646 816
Total revenue 22440 20935
Total expenditure 15094 13952
Profit before Depreciation Finance Costs Exceptional items and Tax expense 7346 6983
Less: Depreciation and Interest 3022 2539
Profit before Exceptional items and Tax expense 4324 4444
Add: Exceptional items 350 713
Profit before Tax expense 4674 5157
Less: Tax expenses 637 1042
Profit for the year 4037 4115
Other Comprehensive income 1906 (1916)
Total Comprehensive income 5943 2199
Revenue from operations excluding Export incentives 21753 19465
Earnings from operations (excluding Export incentives Other income Depreciation 6659 5513
Finance Costs Exceptional items and Tax expense)
Profit for the year excluding exceptional gains (net of tax) 3809 3656

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

• Revenue from operations excluding export incentives increased by 12% (from Rs19465 Mn to Rs 21753 Mn) driven by steady performance across all divisions

• Total Revenue increased by 7% (from Rs 20935 Mn to Rs 22440 Mn)

• Earnings from operations (excluding export incentives other incomedepreciation finance costs exceptional items and tax expense) increased by 21% (from Rs5513 Mn to Rs 6659 Mn) mainly driven by lower material costs

• Profit after tax excluding exceptional gains increased by 4% (from Rs 3656 Mnto Rs 3809 Mn)

• Profit for the year after exceptional gains declined by 2% (from Rs 4115 Mn toRs 4037 Mn)

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

OPERATIONAL REVIEW

Syngene International Limited is an integrated research development and manufacturingservices organization offering services across a wide spectrum of modalities includingsmall and large molecules antibody-drug conjugates (ADCs) and oligonucleotides. Itoperates at every step in the value chain. The strength of the Company lies in its highlyqualified research teams comprising over 4700 scientists and its state-of-the-artfacilities encompassing ~2 Mn. sq. ft. in three locations in India: Bangalore Hyderabadand Mangalore. Syngene has four divisions: Discovery Services Development ServicesManufacturing Services and the Dedicated Centres.

DISCOVERY SERVICES

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

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

The Company launched SynVent a platform for fully integrated therapeutic discovery anddevelopment across large and small molecules._ SynVent Integrated Drug Discovery servicesare designed to provide the most effective and efficient means to conduct targetvalidation translational interrogation therapeutic discovery and preclinicaldevelopment for clients.

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

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

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

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

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

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

DEVELOPMENT SERVICES

The Development Services division reported a steady performance for the year. Newclients were added across the various development disciplines while existing clientsestablished broader relationships by accessing more services. The scientific highlightsfor the year include critical contributions to the development of a drug to treat agenetic liver disease mainly found in children and progress the drug to phase III clinicaltrials/Food and Drug Administration (FDA) approval stage for biopharmaceutical clientAlbireo Pharma. In terms of capability enhancement a noteworthy milestone was the settingup and commissioning the Highly Potent Active Pharmaceutical Ingredient (HPAPI) laboratoryin Bangalore.

As part of our contribution to fighting the coronavirus a voluntary licensingagreement was signed with Gilead Sciences Inc. for the manufacturing and sale of itsantiviral drug Remdesivir. Following the technology transfer Development Servicessuccessfully completed the process validation and received Market Authorization Approval(MAA) and a license to manufacture Remdesivir under the brand name RemWin.

MANUFACTURING SERVICES

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

DEDICATED R&D CENTERS

Syngene operates Dedicated R&D Centers for four clients: Amgen Inc. Baxter IncBristol-Myers Squibb (BMS) and Herbalife. During the year the Dedicated R&D Centersdelivered a healthy performance primarily driven by growth in the BMS and Baxteraccounts. For both these Dedicated Centers the scope of engagement and the number ofscientists were increased and new facilities were established. A major milestone for theyear was the extension of the collaboration with BMS to 2030. Despite the disruptioncaused by the pandemic all the Dedicated Center R&D projects were completed accordingto expectations including those that involved generation of crucial data for regulatoryfiling within strict target timelines.

SUBSIDIARY COMPANY/JOINT VENTURE

Syngene USA Inc. is a wholly owned subsidiary of Syngene incorporated in fiscal year2018 to have a firm foothold in the United States market and provide easy access to theCompany's clients based in the United States.

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

DIVIDEND

Owing to the continuing uncertainty created by the second wave of COVID-19 pandemic inIndia the Board of Directors has deemed it prudent not to declare a dividend for thefinancial year 2020-21 in order to prioritise cash and maintain liquidity continuing theprudent management approach adopted during the last financial year.

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

RELATED PARTY CONTRACTS OR ARRANGEMENTS

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

Accordingly the disclosure of related party transactions in Form AOC-2 is notapplicable. However detailed disclosure on related party transactions as per IND AS 24containing the name of the related parties and details of the transactions entered withsuch related parties have been provided as part of the notes to the financial statementsprovided in the Annual Report.

The Company has formulated the policy on ‘Materiality of Related Partytransactions and on dealing with Related Party Transactions' and this is available athttps://www.syngeneintl. com/investors/corporate-governance/governance-reports-policies/

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

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

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

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

CHANGE IN NATURE OF BUSINESS

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

LOANS GUARANTEES OR INVESTMENTS

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

DEPOSITS

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

CREDIT RATING

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

PAID UP CAPITAL

During the financial year the paid-up share capital of the Company remained unchangedand stood at Rs 4000 Mn.

MATERIAL CHANGES AND COMMITMENTS

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

HUMAN RESOURCES

Syngene's multidisciplinary workforce is committed to operating safely and to worldclass quality standards. In these challenging circumstances employees have showncommitment and resilience during the past twelve months consistent with our values ofexcellence integrity and professionalism. In FY 2020-21 the Company was conferredwith ‘Dream Companies to Work for Award' in the pharmaceutical sector at the 29thedition of the World HRD Congress Awards for translating and combining vision with actionin HR strategy and cultivating competencies for the future. The Company has also achievedcertification as ‘Great Place to work' during the year. The headcount for year endingFY 2020-21 was approximately 5400 full-time employees including more than 4700scientists.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed to this Report as Annexure4.

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

EMPLOYEE STOCK OPTION PLAN /RESTRICTED STOCK UNITS PLAN

The Board of Directors of the Company had formulated the Syngene Employee Stock OptionPlan 2011 (hereinafter referred to as the "ESOP Plan") which was approved by themembers of the Company on 14th December 2011 and further ratified by themembers subsequent to the Initial Public Offering ("IPO") on 5thDecember 2015. The ESOP Plan is administered by the Syngene Employee Welfare Trust("the Trust") under the instructions and supervision of the Nomination andRemuneration Committee ("NRC"). The Trust had subscribed to equity shares of theCompany on 31st October 2012 using the proceeds from interest free loan of Rs150 million obtained from the Company. The NRC on various occasions has granted optionsto eligible employees of the Company through the Trust. During the financial year therewas no change in the ESOP Plan. During FY 2020-21 no options were granted to eligibleemployees under the ESOP Plan. However 620225 equity shares were transferred to eligibleemployees by the Syngene Employee Welfare Trust on exercise of stock options. The ESOPPlan complies with SEBI (Share Based Employee Benefits) Regulations 2014 ("SEBI(SBEB) Regulations 2014").

The shareholders at the 26th Annual General Meeting ("AGM") ofthe Company held on 24th July 2019 had approved the "Syngene RestrictedStock Unit ("RSU") Long Term Incentive Plan FY 2020" (hereinafter referredto as "the RSU Plan") designed to drive performance to achieve the Boardapproved strategic plan. The RSU Plan covers key employees who by virtue of their rolesinfluence the accomplishment of the strategic plan. The RSU Plan is administered by theTrust. The shareholders have also approved at the 26th AGM the issue andallotment of further equity shares to the Trust over a period of time for the purpose ofimplementation of the RSU Plan.

Vide special resolution passed through postal ballot on 30th August2020 the shareholders have approved variations to the RSU Plan to streamline the planwith similar plans adopted by group companies to achieve uniformity in the approach torewarding employees across the group. The terms of the modified plan are not detrimentalto the interests of the employees of the Company. The RSU Plan is in compliance with theprovisions of SEBI (SBEB) Regulations 2014.

The Company has granted 3184649 RSUs as on 31st March 2021 underthe RSU Plan. However none of these RSUs had vested during the year.

The details of both plans form part of the notes to accounts of the FinancialStatements in this Annual Report. The Company has obtained a certificate from thestatutory auditors of the Company that both the plans have been implemented in accordancewith SEBI (SBEB) Regulations 2014 and are in accordance with the resolutions passed bythe shareholders. As required under Regulation 14 of the above-mentioned regulations theapplicable disclosures as on 31st March 2021 with respect to both the plansare available on the website of the Company athttps://www.syngeneintl.com/investors/shareholder-services/

CORPORATE GOVERNANCE REPORT

Syngene's Corporate Governance report reflects a strong foundation of its values-ledculture comprising professionalism integrity and excellence. Fair transparent andethical governance robust accounting policies individual accountability and adherence toprevailing laws are integral to our business practices. This has provided soundfoundations for building a sustainable business trusted by stakeholders and attracting andretaining financial and human capital. The Board remains the custodian of this trust andacknowledges its responsibilities towards the growing stakeholder fraternity forsustainable long-term wealth creation.

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

AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE

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

DIRECTORS

The shareholders at the 27th Annual General Meeting of the Company held on22nd July 2020 regularised the appointment of Jonathan Hunt (DIN: 07774619) asthe Managing Director and Chief Executive Officer with effect from 1st April2020. Kiran Mazumdar Shaw (DIN: 00347229) who was the Chairperson and Managing Directorof the Company up to 31st March 2020 transitioned into the position ofNon-Executive Chairperson with effect from 1st April 2020. Her appointment asNon-Executive Chairperson (liable to retire by rotation) was regularised by theshareholders at the 27th Annual General Meeting of the Company held on 22ndJuly 2020.

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

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

During the year the Board of Directors appointed Vinita Bali as the Lead IndependentDirector.

KEY MANAGERIAL PERSONNEL

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

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy on appointment and remuneration of directors key management personnel andother persons provides guidance to human resource management thereby aligning plans forthe strategic growth of the Company. The Company's policy on appointment of directors andremuneration including the criteria for determining qualifications positive attributesindependence and other matters as provided under Section 178 (3) of the Companies Act2013 is formulated by the Board on the recommendation of the Nomination and RemunerationCommittee (NRC). The Policy was reviewed and updated by the Board on NRC's recommendationat its meeting held on

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

DECLARATION BY INDEPENDENT DIRECTORS

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

BOARD DIVERSITY

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

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations theannual performance of the Board as a whole its Committees Chairperson and IndividualDirectors including Independent Directors was evaluated by external consultants –Egon Zehnder a leadership advisory firm on board matters engaged by the Nomination andRemuneration Committee. The evaluation was conducted based on the criteria and frameworkagreed by the Committee.

In a separate meeting of independent directors performance of non-independentdirectors the Board as a whole and Chairperson of the Company was evaluated taking intoaccount the views of executive and non-executive directors. The Board and the Nominationand Remuneration Committee reviewed the performance of individual directors theCommittees and the Board as a whole. The details of the evaluation process is provided inthe Corporate Governance Report which forms part of this Annual Report.

NUMBER OF MEETINGS OF THE BOARD

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

AUDIT COMMITTEE

The Audit Committee has reviewed the accounts for the year ended 31st March2021. The Board accepted all recommendations made by the Audit Committee.

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

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has laid down guidelines policies processes and structures to enableimplementation of appropriate internal financial controls across the organisationcommensurate with its size and the nature of its operations. These control processesenable and ensure the orderly and efficient conduct of the Company's business and providereasonable assurance with regard to safeguarding of assets prevention and detection offraud and errors the accuracy and completeness of the accounting records timelypreparation of reliable financial information compliance with applicable statutesexecuting transactions with proper authorization and ensuring compliance with corporatepolicies. There are control processes both in manual and IT applications including ERPapplications wherein the transactions were approved and recorded. Review and controlmechanisms are built in to ensure that such control systems are adequate and operatingeffectively.

Because of the inherent limitations of internal financial controls including thepossibility of collusion or improper management override of controls materialmisstatements 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 theinternal financial control may become inadequate because of changes in conditions or thatthe compliance with the policies or procedures may deteriorate.

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

RISK MANAGEMENT POLICY

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

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with a proper explanation of material departures.

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

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

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

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

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

AUDITORS

STATUTORY AUDITORS

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

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

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

INTERNAL AUDITORS

The Board at its meeting held on 22nd October 2019 had re-appointed Ernst& Young LLP as the Company's Internal Auditors for a tenure of three years ending on30th September 2022.

SECRETARIAL AUDITORS

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

Pursuant to the SEBI circular no. CIR/CFD/CMD/1/27/2019 dated 8th February2019 the Annual Secretarial Compliance Report for the financial year ended 31stMarch 2021 issued by V. Sreedharan & Associates Practicing Company Secretaries isattached as Annexure 7 to this Report and shall also be submitted to the stock exchangeswhere the shares of the Company are listed.

REPORTING OF FRAUD BY AUDITORS

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

ANNUAL RETURN

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act 2013 the Company has constituted a CorporateSocial Responsibility (CSR) Committee ("the Committee") comprising ProfessorCatherine Rosenberg (Chairperson) Dr Vijay Kuchroo and Vinita Bali. The Committeemonitors and oversees various CSR initiatives of the Company.

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

In view of the ongoing pandemic the Company recognising its responsibility towardsthe stakeholders undertook COVID testing as part of its CSR activities to add to theGovernment's COVID testing capacity. The Company's CSR activities have been executed thisyear directly and through Biocon Foundation which develops and implements programmes inthe areas of healthcare education infrastructure projects rural development promotionof 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 https://www.syngeneintl.com/investors/corporate-governance/ governance-reports-policies/

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

BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34(2)(f) of the SEBI Listing Regulations the BusinessResponsibility Report ("BRR") forms part of this Annual Report. The BRR containsa detailed report describing the initiatives taken by the Company on businessresponsibilities vis--vis the nine principles of the National VoluntaryGuidelines on social environmental and economic responsibilities of business framed bythe Ministry of Corporate Affairs.

COVID-19 PANDEMIC

The COVID-19 pandemic has emerged as a global challenge. As a science-basedorganization the Company was quick to understand the complexity of the problems posed bythe pandemic. The Company committed itself to protecting the workforce minimizingbusiness disruption playing its part in improving human health and contributing to theGovernment's initiatives to combat COVID-19. A three-pronged strategy was adopted tocombat COVID-19 including: protecting employees and contractors; ensuring businesscontinuity; and leveraging the Company's R&D capabilities. Several proactiveinitiatives were undertaken including providing information and awareness to educate anddrive behavior changes implementing physical distancing zoning introducing a shiftsystem for onsite staff implementing work from home wherever possible provision of PPEand masks thermometers for temperature monitoring and intensive sanitisation ofpremises. The Company has also extended counselling and self-help services providingmental and emotional support to employees. The potential impact on business the detailsof initiatives taken and the strategy to combat the pandemic have been separately providedin the Annual Report under the caption "Response that made a difference.

WHISTLEBLOWER POLICY/VIGIL MECHANISM

The Company's whistleblower policy allows employees Directors and other stakeholdersto report genuine grievances corruption fraud misconduct misappropriation of assetsand non-compliance with the code of conduct of the Company or any other unethicalpractices. The policy provides adequate safeguard against victimisation to thewhistleblower and enables them to raise concerns to the Integrity Committee and providesan option of direct access to the Chairman of the Audit Committee. In order to maintainthe highest level of confidentiality and foster an environment of honesty the Company hasappointed an outsourced agency Navex Global to receive the complaints and co-ordinate withthe whistleblower if required. During FY 2020-21 no individuals have been denied accessto the Chairman of the Audit Committee.

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

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

Syngene has a strict Prevention of Sexual Harassment Policy (POSH) in accordance withthe statutory requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Policy is applicable to all employees includingthe Company's contractual employees. The Company is committed to providing a workplacethat is free from discrimination harassment and victimisation regardless of genderrace creed religion place of origin sexual orientation of a person employed or engagedwith the Company. The Internal Committee (‘IC') has been constituted to handle allcomplaints of sexual harassment in the workplace. Employee awareness programmes on POSHwere conducted during the year. In FY 2020-21 the Company received one complaint whichwas closed within the stipulated timeline.

SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNALS

During FY 2020-21 there were no significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations in future.

STATUTORY DISCLOSURES

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

SECRETARIAL STANDARD DISCLOSURE

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

GREEN INITIATIVE

The Company invites all shareholders to support the ‘Green Initiative' of theMinistry of Corporate Affairs and Syngene's continued endeavors to reduce itsenvironmental footprint by supporting the distribution of the Annual Report AGM Noticeand other documents electronically to the email address registered with the DepositoryParticipant/ Registrar and Share Transfer Agent. The Company invites all the investorswhose email ID is not registered to take necessary steps to register their email ID withthe Depository Participant/ Registrar and Share Transfer Agent.

ACKNOWLEDGMENTS

We would like to place on record our deep appreciation to Syngene employees for theircommitment and contribution during this exceptional year. We would like to thank all ourclients vendors bankers investors media and other business associates for theircontinued support and encouragement during the year.

We also thank the Government of India the Government of Karnataka Government ofTelangana the Ministry of Information Technology and Biotechnology the Ministry ofCommerce and Industry the Ministry of Finance and Corporate Affairs the Department ofScientific and Industrial Research Central Board of Indirect Taxes and Customs theReserve Bank of India the Central Board of Direct Tax SEZs (Special Economic Zones)BIRAC (Biotechnology Industry Research Assistance Council) and all other governmentagencies for their support during FY 2020-21 and look forward to their continued supportin future.

For and on behalf of the Board
Kiran Mazumdar Shaw
Place: Bangalore Non-Executive Chairperson
Date: 27th April 2021 DIN: 00347229

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