Investing in Partnerships
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INVESTING IN PARTNERSHIPS SYNGENE INTERNATIONAL LIMITED Biocon SEZ, Biocon Park, Plot No. 2 & 3, Bommasandra Industrial Area, IV Phase, Jigani Link Road, Bengaluru - 560 099, Karnataka, India. ANNUAL REPORT 2018-19 CONTENTS Business Review About us 02 Inspiring us on our path 07 Financial Highlights 08 The Syngene Journey 10 Managing Director’s Message 12 CEO’s Operational Review 14 CFO’s Financial Review 18 The cover image depicts The Marketplace 21 embryological development, which epitomises the Our Business Model 22 continuous process of growth. Dedicated R&D Centres 24 At Syngene, the aim behind Discovery Services 26 investing in our partnerships Leveraging Bioinformatics in is inspired from this infinitely Drug Discovery & Development 30 small cell. We believe that when we connect and collaborate Development & Manufacturing Services 32 with our stakeholders, we will, Every Client Matters 34 just like the cell embryo, set Investing in Quality 36 up a continuous process of Investing in Information Technology 37 development, benefitting all who are directly or indirectly Investing in Supply Chain 38 connected with the Company. Investing in People 40 Investing for Long-Term Value Creation 42 Investing in Sustainable Operations 44 Investing in a Larger Purpose 46 Board of Directors 48 Executive Committee 50 Business Unit Heads 51 Corporate Information 52 Statutory Reports Board’s Report 53 Corporate Governance Report 89 Business Responsibility Report 110 Management Discussion and Analysis 123 Financial Statements Standalone Financial Statements 135 Consolidated Financial Statements 190 AGM Notice 246 Glossary 265 To download or view this report online, please log on to www.syngeneintl.com/investor-relations INVESTING IN PARTNERSHIPS Syngene International Limited has always believed in the power of partnerships to unlock long-term value for its stakeholders. These include not just our clients but a far wider gamut, including employees to environment, suppliers to scientific research-focussed organisations, and shareholders to society. We nurture our relationships through continual investments. These investments in people, infrastructure, processes, vendor management, logistics, supply chain or technology, enable us to harness the power of science to build trust, widen our collaborations, drive growth and deliver value. Today, Syngene is a trusted strategic partner to a diversified global clientele – from marquee companies to start-ups across sectors. As we celebrate 25 years of our successful journey, we pledge renewed commitment to our partnerships that have brought us so far in our journey. ABOUT US Incorporated in 1993, Syngene International Limited is an innovation-focussed global discovery, development and manufacturing organisation providing integrated scientific services to the pharmaceutical, biotechnology, nutrition, animal health, consumer goods and specialty chemical industries around the world. Our state-of-the-art infrastructure, qualified team of scientists and rich expertise in emerging technologies enable us to improve research and development productivity, drive innovation and reduce time-to-market for novel molecules. Our competitive advantage stems from our ability to customise our scientific solutions.T his unique value proposition is reflected in our long-term partnerships with the world’s leading pharmaceutical and biotechnology companies, along with strong relations with companies in other sectors and our growing association with small and virtual companies. Syngene International Limited 02 Business Review Statutory Reports Financial Statements The business is divided into three units: Dedicated R&D Centres, Discovery Services and Development and Manufacturing Services. Development and Dedicated Discovery Manufacturing R&D Centres Services Services Centres of excellence with dedicated Chemistry, biology, toxicology and Pre-clinical studies, drug substance infrastructure and scientific teams to bioinformatics services for both small development, drug product suit the needs of individual clients. and large molecules. development, allied services (stability services, viral testing, bioanalytical), Contracts are long-term in nature, Undertaken for multiple clients, clinical trials and manufacturing usually five years or more and Full- with the contracts being primarily services for small molecules time-equivalent (FTE) engagements FTE engagements and typically and biologics. to support the client’s R&D renewed annually. requirements. Largely Fee-for-service (FFS) engagements both for the short and long-term. Engagements generally expand in scope and extend in duration driven by our ability to generate added value for our clients. Pg 24 Pg 26 Pg 32 Read more on this business unit Read more on this business unit Read more on this business unit 03 Annual Report 2018-19 Syngene in Numbers* 331 8 CLIENTS OF THE GLOBAL TOP 10 PHARMACEUTICAL COMPANIES 3,996 1. 4 Mn sq. ft. QUALIFIED AREA OF R&D SCIENTISTS AND MANUFACTURING INFRASTRUCTURE Quality Certifications Our world-class facilities have received ISO 9001:2008, ISO 14001:2004, and OHSAS 18001:2007 certifications and have been audited by the United States Food and Drug Administration (USFDA), European Medicines Agency (EMA), Pharmaceuticals and Medical Devices Agency (PMDA), and major life sciences partners. Our animal health facilities 62 94% are Good Laboratory Practice LONG-TERM SHARE OF SALES (GLP) certified by the Indian CLIENTS FROM EXPORTS authorities and the Association (COLLABORATIONS OUTSIDE INDIA for Assessment and Accreditation EXTENDING OVER of Laboratory Animal Care 5 YEARS OR MORE) International (AAALAC) *As on 31 March 2019 accredited. Syngene International Limited 04 Business Review Statutory Reports Financial Statements 05 Annual Report 2018-19 Global Footprint Geographic break-up of clients Headquartered in Bengaluru, India, (as on 31 March 2019) Syngene is a global Contract Research Organisation (CRO). We have incorporated a wholly-owned overseas subsidiary in the United States (Syngene USA Inc.). This allows clients to have 73% 5% 14% local access to our business development US JAPAN EUROPE teams. We have also appointed regional business development representatives in the US (East and West Coast), Ireland and India. Our focus on client engagement has allowed us to build and 6% 2% maintain partnerships spanning the US, INDIA REST OF Europe, Asia-Pacific and Australia. WORLD Partnering with Diverse Industries Pharmaceuticals Biotechnology Nutrition Agrochemicals Animal health Consumer goods Specialty chemicals Academic and non- profit organisations Some of our Clients include: Amgen Inc. Artelo Biosciences Baxter International Inc Bristol-Myers Squibb GSK Herbalife Merck KGaA PharmAust Limited Zumutor Biologics Zoetis Inc. Syngene International Limited 06 Business Review Statutory Reports Financial Statements INSPIRING US ON OUR PATH OUR VISION To be a world-class partner delivering innovative scientific solutions. OUR VALUES Integrity Excellence Professionalism To be ethical, honest and transparent To commit ourselves to the To practise the highest degree of in all we do. highest levels of scientific and professionalism by encompassing operational excellence. attributes such as accountability, reliability and customer focus. OUR PARTNERSHIP COMMITMENT Clients Employees and producing safe products • Meet the current and future needs • Ensure a safe and sociable work • Support community health and of our clients by providing environment for all wellness programmes world-class talent, infrastructure • Provide opportunities to work with and systems high-performance teams. Patients, Physicians and Care Providers • Deliver services with sustained focus • Develop scientific, managerial on quality, affordable innovation and leadership skills to foster • Maintain highest standards of and productivity professional growth ethics and patient care • Work with our clients in flexible, • Uphold the highest standards adaptable and customised Society and Environment of ethics and professionalism partnership models • Safeguard the environment by in working with physicians and reducing waste, controlling pollution care providers 07 Annual Report 2018-19 FINANCIAL HIGHLIGHTS REVENUE (RS. MN) 19,007 14,849 12,716 11,133 8,716 FY15 FY16 FY17 FY18 FY19 Syngene International Limited 08 Business Review Statutory Reports Financial Statements EBITDA PAT NET FIXED ASSETS (RS. MN) (RS. MN) (RS. MN) 6,119 3,316 16,505 3,054 2,873 5,266 4,783 2,408 11,858 3,867 9,853 1,750 8,170 2,928 6,084 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 09 Annual Report 2018-19 THE SYNGENE JOURNEY Since our inception, we have made significant investments in our capacity and capabilities across the drug discovery, development and manufacturing value chain. This strategy has enabled us build collaborative, long-term relationships with our clients and deliver better value to all our stakeholders. 1993 1998 1999 2001 Initiated operations as Granted 100% Achieved first Forayed into Chemical a CRO with services in Export-Oriented Unit operational expansion Development chemistry and biology (EOU) status by the in R&D with lab space with a dedicated Government of India increased to over manufacturing facility 23,000 sq. ft. 2019 2018 2017 2016 Signed an agreement with Signed R&D agreement Strategic collaboration Acquired Strand Life Biotechnology Industry with GSK to advance with Zoetis to develop Sciences’ Systems Biology Research Assistance drug discovery in