Your Directors present the 18th Annual Report, together with the Audited Accounts forthe year ended March 31, 2010.
With your Company deciding to suspend its contract manufacturing business due tofailing profitability and unviablility unless a formulation facility was acquired by theCompany, sales during the last financial year was only around Rs 2.5 Crores. The lowturnover during the year has resulted in an operational loss of Rs.4.5 Crores.
In view of the Government's decision to set up a Critical Thermal Power plant spreadover 900 acres next to the Company's proposed DHA site, a Gas terminal and container, portbeing established on the seashore and the 9000 acre Rare Earth Facility of the Tata Groupcoming up close to the site, and since all the Fly-ash and lllimnite washings are beingdisposed alongside the site, the viability of the present site is questionable. Whilethere is considerable intellectual property that has been generated, which may yieldcommercial value at a future date, the management thought it prudent to withdraw from thissite. All movable R&D equipments have been relocated at a new site in Bangalore. TheBoard has therefore recommended that intangible expenditures relating to development ofDHA and various other molecules and other capital assets valued at Rs.8.76 Crores bewritten off.
In addition, in line with the Management's decision to wind up the operations of theCompany's own brand marketing division, INVIA, in Kerala, Tamil Nadu, Andhra and Orissa,due to issues with viability and management bandwidth, all the receivables representingunsold stocks of the Company's own brands, lying with distributors, needed to be destroyedand consequently a sum of Rs 5.3 Crores has been recommended to be written off.
Due to the above extraordinary items charged off to operations, the net result for theyear has been severely hit leading to a net loss of Rs.20.60 crores
Your Company's research efforts had seen deterioration due to working capital issuesand loss of key people. Your Board has therefore taken a decision to relocate the entireResearch Laboratory to an independent facility in Hosakote Industrial Area, Bangalore.This will allow the company to have greater interface with the Indian Institute ofSciences and other such organisations, to partner its research efforts. In addition, dueto Bangalore being a renowned centre for Biotechnology research, access to suitablepersonnel, is improved.
Your Board is happy to inform you of the final acceptance by the European Patent Officeof eleven claims in the Patent application filed by the Company leading to clearance ofthe patent application and publishing of the patent.
Efforts with the Company's application to the USPTO and the Indian Patent Officecontinues. It is hoped that these efforts will prove equally fruitful and the Company willget approvals for its patent applications filed.
The Company has also acquired 22 additional strains for a variety of Fatty Acids, 12for Biofuels and 11 IPs, apart from technology for a new algal biofuel. With these, theCompany underlines its focus to remain on Fatty Acids, Drug Discovery and Biofuels for thenext decade.
However, in taking a prudent and cautious stand, the Management instead of forayingahead on its own, believes that joint ventures and strategic alliances would be the modelof choice for commercialising these technologies so as to share the risks intrinsic to newtechnology development.
Trading of Shares in the Stock Exchanges
The shares of the Company are listed in the Mumbai and Luxemburg stock exchanges. Theshares of the Company are traded in the demat form.
The Company continues to follow the code of Corporate Governance during the year underreview.
Your Company has not accepted any deposits from public during the year under review.
Dr.G. Subramanian, Director, retires by rotation at the ensuing Annual General Meetingand being eligible, offers himself for reappointment.
M/s. Pratapkaran Paul & Co., Chartered Accountants, Chennai, Auditors of theCompany retire at the ensuing annual general meeting and a notice has been received undersection 224(1B) of the Companies Act, 1956 from them confirming their eligibility forreappointment
Your Directors place on record their appreciation of the sincere and dedicated servicesrendered by all the employees during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that:
- in the preparation of the Annual Accounts, the applicable Accounting Standards havebeen followed.
- they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March, 2008 and of the Profit and Lossof the Company for that period.
- Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
- the annual accounts are prepared on a going concern basis
ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
Information in accordance with the provisions of Section 217(1)(e) of the CompaniesAct, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board ofDirectors) Rules, 1988 regarding conservation of energy, Technology absorption and ForeignExchange earnings and outgo are given below:
CONSERVATION OF ENERGY
Energy conservation is not applicable to the biotechnology industry.
RESEARCH AND DEVELOPMENT
Your Company has, during the year, been continuing its Research and Developmentactivities of extracting bioactive compounds from microbes as well as development offormulations for nutrition and pharmaceuticals.
FOREIGN EXCHANGE EARNINGS
There was no foreign exchange earning during the year. (Previous Year: Nil)
FOREIGN EXCHANGE OUTGO
On account of import of goods - Nil.
Foreign Travel - Nil.
The Board of Directors wishes to place on record its gratitude to Axis Bank Limited andthe Department of Science and Technology, Department of Bio-Technology and the otherInstitutions / Organizations / Agencies who have supported the company during the year.
| ||For and on behalf of the Board of Directors |
|Date: 7-9-2010 || |
|Place: Chennai ||K. O. Isaac |
| ||Chairman and Managing Director |