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Suven Life Sciences Ltd.

BSE: 530239 Sector: Health care
NSE: SUVEN ISIN Code: INE495B01038
BSE 09:18 | 12 Aug 70.50 0.85
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NSE 00:00 | 11 Aug 69.65 -0.65
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OPEN 70.95
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VOLUME 4312
52-Week high 124.40
52-Week low 62.00
P/E
Mkt Cap.(Rs cr) 1,025
Buy Price 70.20
Buy Qty 218.00
Sell Price 70.50
Sell Qty 11.00
OPEN 70.95
CLOSE 69.65
VOLUME 4312
52-Week high 124.40
52-Week low 62.00
P/E
Mkt Cap.(Rs cr) 1,025
Buy Price 70.20
Buy Qty 218.00
Sell Price 70.50
Sell Qty 11.00

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 33rdAnnual Report together with Ind AS compliant Audited Financial Statements of the Companyfor the financial year ended 31st March 2022.

Financial Performance

Particulars Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Revenue from operations 1184 1348 1184 1348
Other income 532 775 532 775
Total Income 1716 2123 1716 2123
Less: R & D Expenses 2453 2517 10637 7102
Less: Other Expenses 2396 1885 2787 2252
Profit/(Loss) before Interest Depreciation & Tax (3133) (2280) (11708) (7231)
Less: Depreciation and amortization 439 434 439 434
Less: Finance cost 53 82 53 82
Net Profit/(Loss) before taxation (3625) (2795) (12200) (7747)
Tax Expense - (532) - (532)
Profit/(Loss) for the year (3625) (2263) (12200) (7215)
Other Comprehensive Income
Items that will not be reclassified to profit or loss (15) (47) (15) (47)
Income tax relating to items that will not be reclassified to profit or loss - 16 - 16
Total Other Comprehensive Income (15) (31) (15) (31)
Total Comprehensive Income (3640) (2294) (12215) (7246)
Retained earnings - opening balance 19783 22077 (9451) (2205)
Add: Profit/(Loss) for the year (3640) (2294) (12215) (7246)
Retained earnings - closing balance 16143 19783 (21665) (9451)

Review of Operations

During the year under review your Company continued to advance its innovation effortson drug discovery molecules which are in the development phase & clinical trial. YourCompany announced Phase 3 Clinical Trial of SUVN-502 (Masupirdine) a 5-HT6 antagonist fortreatment of Agitation and aggression in Alzheimer's type dementias which is asignificant achievement in enhancing our clinical pipeline. Also Phase 2 Clinical Trial ofSUVN-G3031 (Samelisant) a H3 inverse agonist for treatment of Narcolepsy (excessive daytime sleep disorder) has crossed 50% patient enrolment.

During the year under review your company has spent B 2453 Lakhs on Research &Development of drug discovery molecules and will continue to spend on the DiscoveryR&D in the years to come. Your Company reported a loss of B3625 Lakh for the financialyear 2021-22. The Earnings per Share (EPS) of your Company has come down to B (2.84) pershare in fiscal 202122 from the previous year EPS of B (1.78) per share in fiscal 2020-21.

Your Company's standalone revenue from operations for the Financial Year 2021-22 is B1184 Lakhs. The consolidated revenue from operations for the Financial Year 2021-22remained the same as that of standalone revenue. The consolidated loss incurred B 12200Lakhs 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.

Research and Development

During the year your company has spent C2453 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 3 initiated Masupirdine(SUVN- 502) on Agitation in Alzheimer's type patients a Phase 2 ongoing Samelisant(SUVN-G3031) on Narcolepsy (excessive day time sleep disorder) Phase 2 ready Usmapride(SUVN-D4010) and Ropanicant (SUVN-911).

In addition to these clinical compounds the Company has eleven (11)internally-discovered therapeutic drug candidates currently in various stages ofpre-clinical development targeting conditions such as ADHD agitation dementia bipolardisorders psychosis treatment resistant depression Gastrointestinal disorders and painand inflammation.

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.

Impact of the COVID-19 pandemic

The COVID-19 pandemic & global inflation affected the global economy in the recentpast. We at SUVEN remain committed to the health and safety of our employees and theirfamilies as well as business continuity to safeguard the interests of our patientspartners customers and other stakeholders. However COVID-19 has impacted the ongoingphase 2 clinical studies conducted in our subsidiary Suven Neurosciences Inc. USAleading to increased timeframe 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.

Share Capital

The paid up Equity Share Capital of the Company as on 31st March 2022 was B1453.82 Lakhs.

During the year under review the Company issued the 18100000 fully convertiblewarrants to its promoter group at a price of B 81.57/- per warrant each convertible into1 (One) Equity Share of face value of B 1/- (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 warrantissue price from the warrant holder and upon receipt of the balance 75% the Board ofDirectors in its meeting held on 28th March 2022 allotted 18100000 equityshares on conversion of equal number of warrants to promoter/promoter group of the Companyon preferential basis. Consequently the paid up equity shares capital of the Companystands increased to B 1453.82 Lakhs from B 1272.82 Lakhs.

During the year under review the Company has not issued any shares with differentialvoting rights nor granted stock options or sweat equity shares.

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 2022 can be accessed atCompany's website http://www.suven.com/annualreports.aspx .

Number of Meetings of the Board and Audit Committee

During the year under review Six 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 adequate accountingrecords in accordance with the provisions of the Companies Act 2013 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) 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.

Particulars of Loans Guarantees 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 30of 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 2022. The consolidated financialstatements of the Company prepared in accordance with Indian Accounting Standards asspecified in the Companies (Indian Accounting Standards) Rules 2015 form part of theannual 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. 07th May 2022. There has been no change in the nature of business of theCompany.

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 harmonize 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 risk. Risk management committee oversee and advise on current risk exposures ofthe company and future risk strategies and also recommend the Board about risk assessmentand minimization procedures. The risk management procedure is reviewed by the RiskManagement Committee and Board of Directors periodically. Risk Management committee alsoreviewed the Enterprise Risk Management Framework of the Company which is developed basedon the Risk Management policy of the Company. The audit committee has additional oversightin the area of financial risks and controls. To ensure the mitigation of risk the Companymanages monitors and reports on the principal risks and uncertainties that can impact itsability to 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. The company ceases to be covered under subsection (1) of 135 ofCompanies Act 2013 as post demerger the Company continue to incur losses and could notsatisfy the other parameters as well to make CSR contributions in terms of the provisionof the Act. Hence the Statement on CSR activities is not applicable. However the CSRCommittee reviewed the other compliance requirements viz. formulating & monitoring theCSR policy etc. in accordance with the provisions of the law.

CSR policy of the Company can be accessed on the Company's website at the link:

http://www.suven.com/corporatesocialresponsibility.aspx

Directors and Key Managerial Personnel

The Company did not appoint any Director or Key Managerial Personnel during the yearunder review. None of the Director or Key Managerial Personnel has resigned during theyear 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 and also affirmed compliance with Code of conduct as required under Regulation26(3) of the Listing Regulations.

Directors Retiring by Rotation

In accordance with the provisions of the Companies Act 2013 Smt. Sudharani JastiWhole time Director (DIN: 00277998) of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers herself 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.

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 Chairperson Non Independent Directorsand Board as a whole. The performance of each Committee was evaluated by the Board basedon views received from respective Committee Members. The overall performance evaluation ofthe Individual Director was reviewed by the Chairperson of the Board and feedback wasgiven to Directors. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.

Deposits

During FY 2021-22 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 organizationand 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 authorization 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 unauthorized 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 behavior in all its business activities. Towards this theCompany has adopted a policy on VigilMechanism and Whistle Blower to deal with instance offraud and mismanagement if any. The details of the Whistle Blower Policy is explained inthe 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

The tenure of M/s. TUKARAM & Co LLP Chartered Accountants (Firm Registration No.004436S) as the statutory auditors of the Company will expire at the conclusion ofensuing 33rd Annual General Meeting of the Company.

Hence audit committee in its meeting held on 07th May 2022 considered andrecommended to Board the appointment of M/s. KARVY & Co Chartered Accountants (FirmRegistration No. 001757S) as the statutory auditors of the Company for a term of fiveconsecutive years from the conclusion of the ensuing 33rd Annual GeneralMeeting of the Company till the conclusion of 38th Annual General Meeting to beheld in the year 2027 subject to the approval of the Members of the Company.

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 Report does notcontain 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 ofCost Audit is 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 may grant share-based benefits to eligible employees with a view toattracting and retaining the best talent encouraging employees to align individualperformances with Company objectives and promoting increased participation by them in thegrowth of the Company.

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

On 17th September 2020 pursuant to approval by the shareholders in theAGM the Board has been authorized to introduce offer issue and provide share-basedincentives to eligible employees of the Company and its subsidiaries under the SLSL ESOP2020 scheme. In terms of the scheme the total number of options to be granted are1000000 of face value of B 1/- each.

The nomination and remuneration committee (NRC) has not granted any options under theSLSL ESOP 2020 scheme during the year ended 31st March 2022. Upon the grantingof the options it shall vest in one or more tranches based on the achievement of definedannual performance 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 March2022 the details of the options granted vested and exercised as per SLSL ESOP 2020 isnot available in the Notes to accounts of the financial statements in this Annual Report.

Transfer of Unpaid & Unclaimed Dividend and underlying equity shares to InvestorEducation and Protection Fund (IEPF)

During the FY 2021-22 the Company has transferred B 1198169 to Investor Educationand Protection Fund (IEPF) in accordance with the provisions of Section 125 of the Actread with the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016.

In accordance with the aforesaid provisions the company has transferred 12090 equityshares held by 43 Shareholders whose dividends were remaining unpaid/ unclaimed for sevenconsecutive years i.e. from FY 2013-14 to IEPF Authority. Any shareholder whose shares aretransferred to IEPF Authority can claim the shares by making an online application in FormI EPF-5 (available on www.iepf.gov.in) with a copy to the Company.

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

There are no Companies have become or ceased to be your Company's subsidiaries jointventures or associate Companies during the year.

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 sub-section (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 along with their status as at the endof the 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.

VI. 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: 7th May 2022 DIN:00278028

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