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Suven Life Sciences Ltd.

BSE: 530239 Sector: Health care
NSE: SUVEN ISIN Code: INE495B01038
BSE 10:27 | 01 Dec 88.70 0.25
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89.10

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89.90

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NSE 10:19 | 01 Dec 88.40 0.10
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OPEN

90.40

HIGH

90.40

LOW

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OPEN 89.10
PREVIOUS CLOSE 88.45
VOLUME 6913
52-Week high 124.40
52-Week low 46.50
P/E
Mkt Cap.(Rs cr) 1,129
Buy Price 88.60
Buy Qty 277.00
Sell Price 88.75
Sell Qty 165.00
OPEN 89.10
CLOSE 88.45
VOLUME 6913
52-Week high 124.40
52-Week low 46.50
P/E
Mkt Cap.(Rs cr) 1,129
Buy Price 88.60
Buy Qty 277.00
Sell Price 88.75
Sell Qty 165.00

Suven Life Sciences Ltd. (SUVEN) - Director Report

Company director report

To the Members of Suven Life Sciences Limited

Your Company's Board of Directors has pleasure in presenting this 32nd Annual Reporttogether with Ind AS compliant Audited Financial Statements of the Company for thefinancial year ended 31st March 2021.

Financial Performance (Rs. in Lakhs)
Particulars

Standalone

Consolidated

2020-21 2019-20 2020-21 2019-20
Revenue from operations 1348 1441 1348 1441
Other income 775 1404 775 1404
Total Income 2123 2845 2123 2845
Less: R & D Expenses 2517 2594 7102 10323
Less: Other Expenses 1885 2379 2252 2696
Profit/(Loss) before Interest Depreciation & Tax (2280) (2128) (7231) (10174)
Less: Depreciation and amortisation 434 417 434 417
Less: Finance cost 82 49 82 49
Net Profit/(Loss) before taxation (2795) (2594) (7747) (10640)
Tax Expense (532) (1218) (532) (1218)
Profit/(Loss) for the year (2263) (1375) (7215) (9422)
Other Comprehensive Income
Items that will not be reclassified to profit or loss (47) (45) (47) (45)
Income tax relating to items that will not be reclassified to profit or loss

16

16 16 16
Total Other Comprehensive Income (31) (30) (31) (30)
Total Comprehensive Income (2294) (1405) (7246) (9451)
Retained earnings - opening balance 22077 23482 (2205) 7246
Add: Profit/(Loss) for the year (2294) (1405) (7246) (9451)
Retained earnings - closing balance 19783 22077 (9451) (2205)

Review of Operations

During the year under review your Company's thrust on innovative R&D in CNStherapies continued its ongoing work on the pipeline of 15 molecules in various stages ofclinical development programs. Your Company with an objective to meet the future R&Dspending requirements has issued and allotted 18100000 fully convertible warrants tothe promoter/promoter group of the Company on preferential basis. With the infusion of thefresh funds the Company's determination for accelerating the pipeline and R&Dactivities catalyse.

Your company has spent Rs.2517 Lakhs for the financial year ended 31st March 2021 andwill continue to spend on the Discovery R&D in the years to come. Your Companyreported a loss of H2263 Lakhs for the financial year 2020-21. The Earnings per Share(EPS) of your Company has come down to H(1.78) in fiscal 2020-21 per share from theprevious year EPS of H(1.08) in fiscal 2019-20 per share.

Your Company's consolidated revenue from operations for the Financial Year 2020-21remained the same as that of standalone revenue. The consolidated loss incurred Rs.7215Lakhs are mainly due to clinical development expenditure incurred by Suven NeurosciencesInc. (formerly Suven Inc.) on various molecules in the clinical development programs.

The consolidated financial statements of the Company prepared in accordance with IndianAccounting Standards as specified in the Companies (Indian Accounting Standards) Rules2015 form part of the Annual Report.

Impact of the COVID-19 pandemic

The COVID-19 pandemic has continued affecting the global economy from almost more thana year and second wave of the COVID-19 continued the restrictions and disruption in theroutine. We remain committed to the health and safety of our employees and their familiesas well as business continuity to safeguard the interests of our patients partnerscustomers and other stakeholders. However COVID-19 has impacted the ongoing clinicalstudy of SUVN-G3031 in enrollment and withdrawal of patients from the study leading toincreased time frame and cost.

Dividend

In view of the losses the Board of Directors has not recommended any dividend for theyear under review.

Transfer to Reserves

The Company has not transferred any amount to the general reserve during the currentfinancial year.

Research and Development

During the year your company has spent Rs.2517 Lakhs on innovative R&D in CNStherapies. Suven is a R&D company focused on discovering developing the new chemicalentities for unmet global medical needs to treat neurodegenerative diseases in CNStherapeutic segment. Suven has 4 clinical stage compounds a Phase 2 ongoing SUVN-502 andSUVN-G3031 and Phase 2 ready SUVN-D4010 and SUVN-911.

In addition to these clinical compounds the Company has eleven (11)internally-discovered therapeutic drug candidates currently in various stages ofpreclinical development targeting conditions such as ADHD agitation dementiadepression Huntington's disease Parkinson's disease and pain.

The Company also regularly secures various product patents across the world as part ofResearch & Development of the Company to secure its discovery related innovation. Thedetails on patent updates could be accessed at Company's websitehttp://www.suven.com/Patentupdates.aspx.

Share Capital

The paid up Equity Share Capital as on 31st March 2021 was Rs.1272.82 Lakhs. Duringthe year under review the Company has not issued any shares with differential votingrights nor granted stock options or sweat equity shares.

Share Warrants:

During the year under review the Company issued the 18100000 fully convertiblewarrants to its promoter group at a price of C81.57/- per warrant each convertible into 1(One) Equity Share of face value of C1/- (Rupees One Only) each of the Company onpreferential basis in accordance with the provisions of Chapter V of SEBI ICDRRegulations. The Company allotted 18100000 fully convertible warrants to its promotergroup on 02nd April 2021 upon receipt of upfront payment of 25% of the warrant issueprice from the warrant holder and balance 75% is payable by the Warrant Holder at the timeof allotment of the Equity Share which may be exercised at any time before expiry of 18months from the date of allotment of Warrants.

Annual Return

Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the Annual Return as at 31st March 2021 can be accessed at Company's websitehttp://www.suven.com/annualreports.aspx

Number of Meetings of the Board and Audit Committee

During the year under review five Board Meetings were convened and held and four AuditCommittee Meetings were convened and held. The details of Board meetings and AuditCommittee meetings are presented in the Corporate Governance report which forms part ofthis Annual Report.

The Audit Committee composed of all independent directors. Shri Santanu Mukherjee isthe Chairperson of the Audit Committee and Shri M. Gopalakrishna Smt. J.A.S. Padmaja aremembers of the Audit Committee. The time gap between the said meetings was within theperiod prescribed under the provisions of the Companies Act 2013 and the SEBI guidelinesthereof.

Directors Responsibility Statement

Your Directors state that:

(a) The applicable accounting standards have been followed in the preparation of theAnnual Accounts.

(b) Such accounting policies have been selected and applied consistently and judgmentsand estimates made when required that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period.

(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

(d) The Directors have prepared the Annual Accounts on a going concern basis.

(e) Proper internal financial controls were in place to be followed by the Company andthat the financial controls were adequate and were operating effectively.

(f) Proper systems devised to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.

Policy on Nomination & Remuneration

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration specifying criteria for evaluation ofperformance and process. The Remuneration Policy is stated in the Corporate GovernanceReport and also available at Company website http://www.suven.com/policiesdocuments.aspx

Dividend Distribution Policy

The Board has adopted a suitable Policy for Dividend Distribution as per therequirements of SEBI Guidelines. The policy is stated in the Annual Report and has beenuploaded on the Company's website and can be accessed athttp://www.suven.com/policiesdocuments.aspx

Particularsof LoansGuarantees or Investments

Details of loan given investments made guarantees given and securities provided arefurnished in the Standalone Financial Statement which can be referred at Note No. 6 and 29to the Standalone Financial Statement.

Apart from this the Company did not give any Loans or provided Guarantees or anysecurity during the year under the provisions of Section 186 of the Companies Act 2013.

Subsidiary companies

Your Company has one international wholly owned subsidiary company i.e. SuvenNeurosciences Inc. as on 31st March 2021. The consolidated financial statements of theCompany prepared in accordance with Indian Accounting Standards as specified in theCompanies (Indian Accounting Standards) Rules 2015 form part of the annual report.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of financial statements of subsidiary in Form No. AOC-1 isattached to the financial statements of the Company. Further pursuant to the provisionsof Section 136 of the Act the separate audited financial statements in respect of thesubsidiary company shall be kept open for inspection at the Registered Office of theCompany during working hours for a period of 21 days before the date of the Annual GeneralMeeting. Your Company will also make available these documents upon request by any Memberof the Company interested in obtaining the same or it can be also accessed on the websiteof your Company at http://www.suven.com/subsidiaryaccounts.aspx

Related Party Transactions

The Particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 in the prescribed Form AOC-2 pursuant to clause (h) ofsub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules2014 forms part of this report as "Annexure - A".

The Board has approved a policy for related party transactions which has been uploadedon the Company's website. http:// www.suven.com/policiesdocuments.aspx

Material Changes and Commitments Affecting Financial Position of the Company

There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year of the Company and date of this Reporti.e. 04th May 2021. There has been no change in the nature of business of the Company.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The information on conservation of energy technology absorption foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 forms part of this report as "Annexure- B"

Risk Management Policy

Business risks are inevitable for any business enterprise. Suven is an IP creating andprotecting company strictly adheres to and harmonise with the global patent regime. TheCompany through its Risk Management policy identifies the various risks and challengesinternally as well as externally and takes appropriate measures with timely actions tomitigate them and also recommend the Board about risk assessment and minimisationprocedures. The risk management procedure is reviewed by the Audit Committee and Board ofDirectors on quarterly basis. The audit committee has additional oversight in the area offinancial risks and controls. To ensure the mitigation of risk the Company managesmonitors and reports on the principal risks and uncertainties that can impact its abilityto achieve its strategic objectives.

Corporate Social Responsibility

In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has established CorporateSocial Responsibility (CSR) Committee composed of Shri M. Gopalakrishna as ChairpersonProf. Seyed E. Hasnain Shri Venkateswarlu Jasti Smt. Sudharani Jasti and Smt. J.A.S.Padmaja as members. During the year under review the company ceases to be covered undersubsection (1) of 135 of Companies Act 2013 as post demerger the Company incurred thelosses and could not satisfy the other parameters as well to make CSR contributions interms of the provision of the Act. Hence the Statement on CSR activities is notapplicable. However the CSR Committee reviewed the other compliance requirements viz.formulating & monitoring the CSR policy etc. in accordance with the provisions of thelaw.

CSR policy of the Company can be accessed on the Company's website at the link:http://www.suven.com/corporatesocialresponsibility.aspx

Performance Evaluation of the Board

Pursuant to the provisions of the Companies Act 2013 and as per the SEBI (LODR)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsCommittees. The Independent Directors separately carried out evaluation of ChairpersonNon Independent Directors and Board as a whole. The performance of each Committee wasevaluated by the Board based on views received from respective Committee Members. Theoverall performance evaluation of the Individual Director was reviewed by the Chairpersonof the Board and feedback was given to Directors. The manner in which the evaluation hasbeen carried out has been explained in the Corporate Governance Report.

Directors and Key Managerial Personnel

During the year under review the Members of the Company had at the previous AnnualGeneral Meeting held on 17th day of September 2020 approved the re-appointment of Smt.Sudharani Jasti as Whole-time Director for a period of 3 years in partial modification ofthe resolution passed by the Members at the Annual General Meeting held on 14th August2019 for the re-appointment Smt. Sudharani Jasti. The tenure of the appointment wasreduced to 3 years from the 5 years commencing from 1st November 2019 in compliance withthe Schedule V of the Act.

Further during the year Dr. M. R. Naidu Independent Director resigned from theDirectorship of the Company w.e.f. 25th January 2021. The Board places on record itsappreciation for the valuable contribution made by him during his tenure as Director ofthe Company.

The Company did not appoint any Key Managerial Personnel during the year under review.None of the Key Managerial Personnel has resigned during the year under review.

Declaration by Independent Directors:

All independent directors of the Company have given declarations under Section 149(7)of the Companies Act 2013 confirming that they meet the criteria of independence asprovided in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI ListingRegulations.

Directors Retiring by Rotation

In accordance with the provisions of the Companies Act 2013 Shri Venkateswarlu JastiChairman and

CEO (DIN:00278028) of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.

The brief profile(s) of the director(s) seeking appointment/re-appointment at theensuing Annual General Meeting are presented in the Annual Report.

Deposits

During FY 2020-21 the Company has not accepted any fixed deposits and as such noamount on account of principal or interest on deposits was outstanding as on the date ofthe balance sheet.

Internal Financial Control Systems and their Adequacy

The Company has a comprehensive system of Internal Controls for effective conduct ofbusiness and ensure reliability of financial reporting. Your Company has laid down set ofstandards which enables to implement internal financial control across the organisationand ensure that the same are adequate and operating effectively (1) to provide reasonableassurances that: transactions are executed in conformity with generally acceptedaccounting principles/standards or any other criteria applicable to such statements (2)to maintain accountability for assets; access to assets is permitted only in accordancewith management's general or specific authorisation and the maintenance of records thatare in reasonable detail accurately and fairly reflect the transactions and dispositionsof the assets of the company; and (3) Provide reasonable assurance regarding prevention ortimely detection of unauthorised acquisition use or disposition of the assets that couldhave a material effect on the financial statements. The Audit Committee of the Boardreviews reports submitted by the independent internal auditors and monitors thefunctioning of the system.

Vigil Mechanism

The Company promotes ethical behaviour in all its business activities. Towards thisthe Company has adopted a policy on Vigil Mechanism and Whistle Blower to deal withinstance of fraud and mismanagement if any. The details of the Whistle Blower Policy isexplained in the Corporate Governance Report and also posted on the website of the Companyhttp://www.suven.com/policiesdocuments.aspx.

Particulars of Employees and Remuneration

The information required under Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms partof this report as ''Annexure - C"

Corporate Governance

A detailed Report on Corporate Governance prepared in substantial compliance with theprovisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015with the Stock Exchanges together with the Auditors' Certificate regarding the complianceof conditions of corporate governance is presented in a separate section forming part ofthe Annual Report.

Management's Discussion and Analysis

Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (LODR) Regulations 2015 is presented in a separatesection forming part of the Annual Report.

AUDITORS

Statutory Auditors

Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rulesframed thereunder the Company in its Annual General Meeting (AGM) held on 14th August 2017has appointed M/s. TUKARAM & Co LLP Chartered Accountants (Firm Registration No.004436S) as statutory auditors of the Company from the conclusion of the 28th AnnualGeneral Meeting till the conclusion of the 33rd Annual General Meeting to be held in theyear 2022. The Companies (Amendment) Act 2017 dispensed the ratification of auditor'sappointment at every Annual General Meeting.

Auditors' Report: The Auditors' Report for the year under review does not contain anyqualification reservation or adverse remark.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. DVM & Associates LLP Company Secretaries in Practice Hyderabad toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportforms part of this report as "Annexure - D". The Secretarial Audit Reportdoes not contain any qualifications reservation or adverse remark.

Cost records & Audit

During the year under review in terms of Cost (Records and Audit) Amendment Rules 2014dated 31st December 2014 issued by the Central Government the requirement of Cost Auditis not applicable to the Company.

The Company is maintaining such accounts and record as specified by the CentralGovernment and as applicable to the Company under sub-section (1) of section 148 of theCompanies Act 2013.

Business Responsibility Report

Pursuant to the SEBI Listing Regulations a detailed Business Responsibility Report(BRR) is prepared. As a green initiative the BRR is placed on website of your company andcan be accessed at web link at http://www.suven.com/annualreports.aspx

Employees Stock Option Scheme

The Company grants share-based benefits to eligible employees with a view to attractingand retaining the best talent encouraging employees to align individual performances withCompany objectives and promoting increased participation by them in the growth of theCompany.

Suven Life Employee Stock Option Scheme 2020 ("SLSL ESOP 2020")

On September 17 2020 pursuant to approval by the shareholders in the AGM the Boardhas been authorised to introduce offer issue and provide share-based incentives toeligible employees of the Company and its subsidiaries under the SLSL ESOP 2020 scheme. Interms of the scheme the total number of options to be granted are 1000000 of face valueof C1/- each.

The nomination and remuneration committee (NRC) has not granted any options under theSLSL ESOP 2020 scheme during the year ended 31st March 2021. Upon the granting of theoptions it shall vest in one or more tranches based on the achievement of defined annualperformance parameters as determined by the administrator (the NRC).

The total number of equity shares to be allotted to the employees of the Company andits subsidiaries under the SLSL ESOP 2020 does not cumulatively exceed 1% of the issuedcapital.

The SLSL ESOP 2020 in compliance with SEBI (Share Based Employee Benefits) Regulations2014 as amended from time to time and there has been no material change to the plansduring the fiscal.

The details of the SLSL ESOP 2020 including terms of reference and the requirementspecified under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations2014 are available on the Company's website at www.suven.com.

As the Company not yet granted any options during the year ended 31st March 2021 thedetails of the options granted vested and exercised as per SLSL ESOP 2020 is notavailable in the Notes to accounts of the financial statements in this Annual Report.

Transfer of Unpaid and Unclaimed amounts to Investor Education and Protection Fund(IEPF)

Pursuant to the provisions of the Companies Act 2013 read with IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 as amended declared dividends whichremained unpaid or unclaimed for a period of seven consecutive years have been transferredby the company to the IEPF which has been established by the central government.

The above referred rules also mandate transfer of dividends remained unpaid andunclaimed for a period of seven consecutive years as well as the underlying equity sharesto IEPF Authority. The company shall accordingly follow the procedures prescribed in thisregard.

Disclosure in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

The Company has complied with the provisions relating to the constitution of InternalComplaints Committee as specified under Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

General

The Company has complied with the provisions of all applicable Secretarial Standardsissued by the Institute of Company Secretaries of India during the year under review.

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

i. Details of frauds reported by auditors under subsection (12) of section 143 otherthan those which are reportable to the Central Government.

ii. a statement regarding opinion of the Board with regard to integrity expertise andexperience (including the proficiency) of the independent directors appointed during theyear".

iii. the details of application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 (31 of 2016) during the year alongwith their status as at the end ofthe financial year.

iv. the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof.

v. There are no significant material orders passed by the Regulators/ Courts whichwould impact the going concern status of the Company and its future operations.

Acknowledgements

Your Directors wish to place on record their gratitude to Shareholders for theconfidence reposed by them and thank all the shareholders customers dealers suppliersand other business associates for their contribution to your Company's activities. TheDirectors also wish to place on record their appreciation of the valuable servicesrendered by the executives staff and workers of the Company.

Your Directors also thank the Central Government and State Government the FinancialInstitutions and Banks for their support during the year and we look forward to itscontinuance.

For and on behalf of the Board of Directors
Venkateswarlu Jasti
Place: Hyderabad Chairman & CEO
Date: 4th May 2021 DIN: 00278028

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