Your Directors submit to you the 30th Annual Report on thebusiness & operations of the Company and Audited Statement of Accounts for the yearended 31st March 2020 along with the Auditor's Report thereon.
(Rs. in Lakhs)
| ||2019- 2020 ||2018-2019 |
|Particulars || || |
|Total Income ||18.25 ||210.90 |
|Operational Administration and other expenses ||86.72 ||75.69 |
|Gross Operating Profit ||-68.47 ||135.80 |
|Interest and Financial Charges ||38.05 ||25.05 |
|Forex Gain/Loss ||- ||- |
|Depreciation ||989.69 ||989.42 |
|Profit before Tax/Loss ||(1096.22) ||(879.27) |
|Provision for Tax ||- ||- |
|Net Profit/Loss ||(1096.22) ||(879.27) |
The total turnover of the company for the year ended 31stMarch 2020 amounted to Rs. 18.25 Lakhs as against Rs. 210.90 Lakhs in the previous year.The company incurred a net Loss of Rs. 1096.22 Lakhs for the year as against a loss of Rs.879.27 Lakhs in the previous year. As can be noticed the management continued to revisebooks of accounts and has written off certain accounts wherever possible after followingthe standard accounting policies of India and in consultation with the auditors. Thisrevision has resulted in increased operating loss from the previous year.
The operations in the Subsidiary are being shut down for more thanthree years (since financial year 2015-16) with no activities of any sort.
The consolidated financial statements were authorized for issue by theCompany's Board of Directors on 24th August 2020.
Review and results of operations
The platform TrabiORALTM developed by Transgene over aperiod of nearly two decades has proven to be sound safe and effective from variousstudies conducted so far on different molecules of varying sizes. The architecture ofTrabiORALTM is based on its novel ligand and the presence of its receptors.
TrabiORALTM has succeeded in meeting its primary objectiveof enhancing bioavailability of the chosen molecule. This unique patented technology hasdemonstrated not only its clinical efficacy but also its uniqueness of bio-availabilityprofile comparable to that of injected route.
TrabiORALTM has unequivocally demonstrated its versatilityin the oral delivery of molecules of different sizes ranging between 5.8 kD to 150 kDapart from it's versatility in delivering single or multiple protein/peptide moietiessimultaneously covering wide ranging clinical applications such as diabetes OncologyVaccines IBD etc.
TrabiORALTM is protected by a series of patents coveringcountries such as USA France Germany Britain Italy Australia Japan etc.
b) SEBI order
After a prolonged and a relatively unsuccessful campaign on GDR matterthe company and its Directors past and present have acknowledged an order passed by SEBIdated 28th August 2019 delivered on 13th September 2019.
Aggrieved by some of the terms imposed in the said order with specialreference to Item 49 a:
"49. In view of the above I in exercise of the powers conferredupon me under Sections 11(1) 11(4) and 11B of the SEBI Act 1992 read with Section 19 ofthe SEBI Act 1992 hereby direct as under:
a. Transgene Biotek Limited (Noticee no. 1) shall continue to pursuethe measures to recall the outstanding amount of $ 38.5 million and bring the money backinto TLB's bank account in India within a period of one year from the date of thisorder. It is clarified that Noticee Nos. 2 4 and all other present directors of TBL shallensure the compliance of this direction by TBL and furnish a Certificate from a peerreviewed Chartered Accountant of ICAI along with necessary documentary evidences to SEBIcertifying the compliance of this direction."
the management of Transgene has filed an appeal at SAT unsuccessfully.
Not waiting for the outcome of continued efforts at different forumsincluding Hon'ble High
Court of Telangana efforts have been continuing for recovery of lostGDR funds. A certificate from a peer reviewed Chartered Accountant has been submitted toSEBI in abeyance to the order passed by SEBI delivered to us on 18th September2019.
c) SEBI Adjudication hearing
The lawyers on behalf of Sri. L. S. Shetty & Associates havepresented the case at the hearing of SEBI Adjudication Officer Mrs. Anita Anoop held on5th February 2020.
In the meantime we were informed that our case filed at Hon'bleHigh Court of Telangana with an appeal for suspension of the proceedings at SEBIadjudication came up for hearing in April 2020 (through on-line video hearing) and theCounsel for SEBI sought time ill the end of May for responding to our claims. The case hasnot come up for hearing as on this date.
Pertaining to the recovery of GDR funds the legal teams in London andSwitzerland are still pursuing to recover the funds but not yet reached a conclusivestage.
Employee: As stated above with limited resources themanagement has been judiciously maintaining required strength of employees to continue itsoperations without any interruption. It is commendable on the part of our employees fortheir dedication and hard work throughout the challenging period at the company fromdifferent angles.
Your Directors are unable to recommend any dividend since the companyhas not made any profits.
STRATEGIC FOCUS AND FUTURE ORIENTATION:
It is unfortunate that adding an insult to the injury while battlingthe GDR related issues Covid has thrown an additional punch in terms of plannedpre-clinical studies by different companies in Europe and USA postponing the studies ontheir molecules using TrabiORAL platform. However we still managed to conclude one studyon two different peptide molecules in the month of July 2020 and results of that study areawaited.
On successful monetization of TrabiORAL it is planned to reactivatemiRNA ad AAV technologies etc that comprises gene therapies also an area of tremendousopportunities on which Transgene has been working on since 2005 onwards.
It is indeed somewhat disheartening for the management's inabilityin mobilizing required resources in developing vaccine and a therapeutic drug againstCovid-19 competing with the rest in that sector across the globe.
Even in the case of our pursuit for recovery of GDR funds our effortshave been met with major blockade due to global lockdown. However we are determined notto ease our efforts in that pursuit since the management strongly believes being unfairlytreated on the GDR matter apart from severely impacting the opportunities and progress ofthe company.
Subsidiary Company - Transgene Biotek HK Limited
With revelation of new findings in the GDR fraud from the statementsprovided by some of those associated with GDR offerings we have been pursuing on thoseindividuals and entities. It is noteworthy that those revelations of crucial informationby one of the persons operating from Singapore to the Monetary Authority of Singaporeduring the course of investigation lead to Transgene Biotek HK Ltd not being audited forthe current year 2019-20 too. However the management is seeking the opinion of fewexperts in this regard as to exact course of action to be initiated on the prospects ofclosing this company altogether.
However the focus has not been lost regarding the irregularitiescommitted through the account at Standard Chartered Bank Singapore with effortscontinuing for the recovery of funds transferred illegally from its account. A Statementpursuant to Section 129 read with Rule 5 of the Companies (Accounts) Rules 2014 in FormAOC 1 is attached as 'Annexure A'
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The global economy in Calendar Year (CY') 2019 has seen oneof the slowest growth rates since the 2008 financial crisis. The biggest calamity was theoutbreak of coronavirus in the beginning of CY 2020 which grew from a local problem inChina to a global pandemic in a matter of weeks in early CY 2020. Lockdowns in most of theaffected countries saved lives but were a huge blow to economic activities and the impactwill be felt for a long time to come. To counter the losses and prevent a completeeconomic breakdown governments and central banks around the world have unleashedunprecedented amounts of fiscal and monetary support. Nonetheless warning of arecessionary effect was issued by top analysts. Following the Covid-19 outbreak Indiaimplemented one of the strictest nationwide lockdowns in the world early on in order tokeep the infection numbers under control.
Pursuant to Regulation 34 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations)the Management Discussion and Analysis Report for the year under review is presented in aseparate section forming part of the Annual Report as "Annexure B'
CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
The Company has a strong legacy of fair transparent and ethicalgovernance practices and it believes that good Corporate Governance is essential forachieving longterm corporate goals and to enhance stakeholders' value. In thispursuit the Company's philosophy on the Code of overnance is based on the beliefthat effective Corporate Governance practices constitute a strong foundation on whichsuccessful commercial enterprises are built to last.
Good Corporate Governance is indispensable to resilient and vibrantcapital markets and is therefore an important instrument of investor protection. As agood corporate citizen the Company lays great emphasis on a corporate culture ofconscience integrity fairness transparency accountability and responsibility forefficient and ethical conduct of its business.
The Company has adhered to the requirements stipulated underRegulations 17 to 27 read with Para C and D of Schedule V and clauses (b) to (i) ofsub-regulation (2) of Regulation 46 of the Securities and xchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015
(Listing Regulations') as applicable [including relaxationsgranted by the Securities and xchange Board of India (SEBI') in the wake ofCovid-19] with regard to Corporate Governance and the same is disclosed in this Report.
Your Company has taken adequate steps to adhere to all the stipulationslaid down in under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. A report on orporate Governance is included as part of this Annual Report as "AnnexureC".
Certificate from the Statutory Auditors of the company M/s. ManishaDubey & Associates Chartered Accountants confirming the compliance with theconditions of Corporate Governance as Stipulated under SEBI (Listing Obligations andDisclosure Requirements)
Regulations 2015 is included as part of this report as "AnnexureD"
DEMATERIALISATION OF SHARES
86.21% of the company's paid up Equity Share Capital is indematerialized form as on 31st March 2020 and balance 13.79% is in physicalform. The Company's Registrars are M/s. Big hare Services Pvt Ltd 306 Right Wing3rd Floor Amrutha Ville Opp. Yashoda Hospital Raj Bhavan Rd Somajiguda HyderabadTelangana-500 082.
NUMBER OF BOARD MEETINGS HELD
The Board of Directors duly met 6 (Six) times during the financial yearfrom 1st April 2019 to 31st March 2020 the details of which arefurnished in the report on Corporate Governance.
The evaluation of all the Directors including the Chairman theIndependent Directors and the Managing Director Board committees and the Board as a wholewas carried out based on the criteria and framework approved by the Nomination andRemuneration Committee pursuant to the provisions of the Act and the corporate governancerequirements as prescribed by SEBI under Regulation 17 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015).
The Board of Directors has carried out an annual evaluation of its ownperformance Board committees and individual directors
The performance of the Board was evaluated by the Board after seekinginputs from all the directors on the basis of the criteria such as the Board compositionand structure effectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board afterseeking inputs from the committee members on the basis of the criteria such as thecomposition of committees effectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee("NRC") reviewed the erformance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc. In addition the Chairman was also evaluated onthe key aspects of his role.
In a separate meeting of independent Directors performance of theboard as a whole and performance of the Chairman was evaluated. The same was discussed inthe board meeting that followed the meeting of the independent Directors at which theperformance of the Board its committees and individual directors was also discussed.
INDEPENDENT DIRECTORS AND DECLARATION
Our Independent Directors meet the baseline definition of IndependentDirectors under the Act and the Listing Regulations. At the beginning of each financialyear the Independent Directors submit a self-declaration confirming their independenceand compliance under section 149(6) Schedule IV of the Act and Regulation 16(1)(b) of theListing Regulations 2015 [Listing regulations]. All such declarations are placed beforethe Board for information and noting. Based on the declarations received the Board alsoconfirms that the Independent Directors fulfil the independence criteria under the ListingRegulations and are independent of the management.
Generally the Independent Directors meet before each board meeting.During FY 19-20 the independent Directors met Six (6) times i.e. on 24th May 2019 14thAugust 2019 28th August 2019 12th November 2019 04th February 2020 and 04thMarch 2020. The Independent Directors inter alia discuss matters arising out of Board andBoard Committee agendas company performance and various other board-related mattersidentify areas where they need clarity or information from management and to review theperformance of Independent Directors the Chairman and the Board as a whole and assess theeffectiveness and promptness of the information flow.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms Sujana Kadiam Independent Director of the Company retires at theensuing Annual General Meeting and being eligible offers himself for re-appointment.
Mr Santosh Kumar was appointed as an Additional Independent Directorw.e.f. 12th November 2019 and holds office till the date of the ensuing AnnualGeneral Meeting and eligible for reappointment as an Independent Director.
Smt. Swetha Marri was appointed as an Additional Independent Directorw.e.f. 03rd June 2020 and holds office till the date of the ensuing AnnualGeneral Meeting and eligible for reappointment as an Independent Director.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 Directors ofyour Company hereby state and confirm that:
In the preparation of the annual accounts for the year ended 31stMarch 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures;
They have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the loss of the company for the same period;
The directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;
They have prepared the annual accounts on a going concern basis;
They have laid down internal financial controls in the companythat are adequate and were operating effectively.
They have devised proper systems to ensure compliance with theprovisions of all applicable laws and these are adequate and are operating effectively.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the balance sheet.
RISK MANAGEMENT POLICY OF THE COMPANY
The Company has formulated and adopted a risk management policy at itsBoard Meeting. As per the policy the management continues to review and assess the riskand also the steps for mitigating the same.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 relating toCorporate Social Responsibility do not apply to the company.
POLICY ON DIRECTORSf APPOINTMENT AND REMUNERATION AND OTHERDETAILS
The Company's policy on directors' appointment andremuneration and other matters provided in Section 178(3) of the Act has been disclosed inthe corporate governance report which forms part of the directors' report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The internal control systems of the Company are adequate andcommensurate with the size of operations. These controls ensure that transactions areauthorized recorded and reported on time. They ensure that assets are safe guarded andprotected against loss or unauthorized disposal.
The Internal Audit department carried out audits in different areas ofthe Company's operations. Post-audit reviews were carried out to ensure that auditrecommendations were implemented. The Audit Committee of the Board of Directors reviewedthe audit program and findings of the Internal Audit department.
AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT:
The auditors' report and Secretarial auditors' report containcertain qualifications reservations or adverse remarks. Report of the secretarial auditoris given as an annexure which forms part of this report "Annexure E'
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
(A) The operations of the company are not power intensive neverthelessthe company continues its efforts to minimize energy wherever practicable by economizingon the use of power at the offices
|(B) ||Technology absorption ||NIL |
|(C) ||Foreign exchange earning ||NIL |
|(D) ||Foreign exchange outflow ||NIL |
RELATED PARTY TRANSACTIONS
There were no transactions which have been entered into with relatedparties of the Directors or the Key Managerial Personnel of the company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT-9 is annexed herewith as "Annexure - F"
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments have beendisclosed in the financial statements.
Your Directors take this opportunity to express their sincere thanksand place on record their appreciation of the continued assistance and co-operationextended to the company by its bankers government and semi government departmentscustomers marketing agents and suppliers and in particular Shareholders for theconfidence reposed in the company
Your directors also thank all the employees of the company for theirdedicated service without which your company would not have achieved those results.
| ||By the Order Of the Board |
| ||For TRANSGENE BIOTEK LIMITED |
| ||Sd/- |
|PLACE: HYDERABAD ||Dr. K. KOTESWARA RAO |
|DATE: 24.08.2020 ||CHAIRMAN & MANAGING DIRECTOR |