Suven Life Sciences Ltd Directors Report.

To the Members of Suven Life Sciences Limited

Your Companys Board of Directors has pleasure in presenting this 32nd Annual Report together with Ind AS compliant Audited Financial Statements of the Company for the financial year ended 31st March, 2021.

Financial Performance (Rs. in Lakhs)
Particulars

Standalone

Consolidated

2020-21 2019-20 2020-21 2019-20
Revenue from operations 1,348 1,441 1,348 1,441
Other income 775 1,404 775 1,404
Total Income 2,123 2,845 2,123 2,845
Less: R & D Expenses 2,517 2,594 7,102 10,323
Less: Other Expenses 1,885 2,379 2,252 2,696
Profit/(Loss) before Interest, Depreciation & Tax (2,280) (2,128) (7,231) (10,174)
Less: Depreciation and amortisation 434 417 434 417
Less: Finance cost 82 49 82 49
Net Profit/(Loss) before taxation (2,795) (2,594) (7,747) (10,640)
Tax Expense (532) (1,218) (532) (1,218)
Profit/(Loss) for the year (2,263) (1,375) (7,215) (9,422)
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 (2,294) (1,405) (7,246) (9,451)
Retained earnings - opening balance 22,077 23,482 (2,205) 7,246
Add: Profit/(Loss) for the year (2,294) (1,405) (7,246) (9,451)
Retained earnings - closing balance 19,783 22,077 (9,451) (2,205)

Review of Operations

During the year under review, your Companys thrust on innovative R&D in CNS therapies continued its ongoing work on the pipeline of 15 molecules in various stages of clinical development programs. Your Company with an objective to meet the future R&D spending requirements has issued and allotted 1,81,00,000 fully convertible warrants to the promoter/promoter group of the Company on preferential basis. With the infusion of the fresh funds the Companys determination for accelerating the pipeline and R&D activities catalyse.

Your company has spent Rs.2,517 Lakhs for the financial year ended 31st March, 2021 and will continue to spend on the Discovery R&D in the years to come. Your Company reported a loss of H2,263 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 the previous year EPS of H(1.08) in fiscal 2019-20 per share.

Your Companys consolidated revenue from operations for the Financial Year 2020-21 remained the same as that of standalone revenue. The consolidated loss incurred Rs.7,215 Lakhs are mainly due to clinical development expenditure incurred by Suven Neurosciences, Inc., (formerly Suven Inc.,) on various molecules in the clinical development programs.

The consolidated financial statements of the Company prepared in accordance with Indian Accounting Standards as specified in the Companies (Indian Accounting Standards) Rules, 2015, 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 than a year and second wave of the COVID-19 continued the restrictions and disruption in the routine. We remain committed to the health and safety of our employees and their families, as well as, business continuity to safeguard the interests of our patients, partners, customers and other stakeholders. However, COVID-19 has impacted the ongoing clinical study of SUVN-G3031 in enrollment and withdrawal of patients from the study leading to increased time frame and cost.

Dividend

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

Transfer to Reserves

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

Research and Development

During the year your company has spent Rs.2,517 Lakhs on innovative R&D in CNS therapies. Suven is a R&D company focused on discovering, developing the new chemical entities for unmet global medical needs to treat neurodegenerative diseases in CNS therapeutic segment. Suven has 4 clinical stage compounds, a Phase 2 ongoing, SUVN-502 and SUVN-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 of preclinical development targeting conditions such as ADHD, agitation, dementia, depression, Huntingtons disease, Parkinsons disease and pain.

The Company also regularly secures various product patents across the world as part of Research & Development of the Company to secure its discovery related innovation. The details on patent updates could be accessed at Companys website http://www.suven.com/Patentupdates.aspx.

Share Capital

The paid up Equity Share Capital as on 31st March, 2021 was Rs.1,272.82 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options or sweat equity shares.

Share Warrants:

During the year under review, the Company issued the 1,81,00,000 fully convertible warrants 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 on preferential basis, in accordance with the provisions of Chapter V of SEBI ICDR Regulations. The Company allotted 1,81,00,000 fully convertible warrants to its promoter group on 02nd April, 2021 upon receipt of upfront payment of 25% of the warrant issue price from the warrant holder and balance 75% is payable by the Warrant Holder at the time of allotment of the Equity Share which may be exercised at any time before expiry of 18 months 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 the Companies 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 Companys website http://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 Audit Committee Meetings were convened and held. The details of Board meetings and Audit Committee meetings are presented in the Corporate Governance report, which forms part of this Annual Report.

The Audit Committee composed of all independent directors. Shri Santanu Mukherjee is the Chairperson of the Audit Committee and Shri M. Gopalakrishna, Smt. J.A.S. Padmaja are members of the Audit Committee. The time gap between the said meetings was within the period prescribed under the provisions of the Companies Act, 2013 and the SEBI guidelines thereof.

Directors Responsibility Statement

Your Directors state that:

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

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

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 and that the financial controls were adequate and were operating effectively.

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

Policy on Nomination & Remuneration

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration, specifying criteria for evaluation of performance and process. The Remuneration Policy is stated in the Corporate Governance Report 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 the requirements of SEBI Guidelines. The policy is stated in the Annual Report and has been uploaded on the Companys website and can be accessed at http://www.suven.com/policiesdocuments.aspx

Particularsof Loans,Guarantees or Investments

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

Apart from this, the Company did not give any Loans, or provided Guarantees or any security 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. Suven Neurosciences Inc., as on 31st March, 2021. The consolidated financial statements of the Company prepared in accordance with Indian Accounting Standards as specified in the Companies (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 statement containing salient features of financial statements of subsidiary in Form No. AOC-1 is attached to the financial statements of the Company. Further, pursuant to the provisions of Section 136 of the Act, the separate audited financial statements in respect of the subsidiary company shall be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same or it can be also accessed on the website of your Company at http://www.suven.com/subsidiaryaccounts.aspx

Related Party Transactions

The Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed Form AOC-2 pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, forms part of this report as "Annexure - A".

The Board has approved a policy for related party transactions which has been uploaded on the Companys 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 of the Company between the end of the financial year of the Company and date of this Report i.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 exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 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 and protecting company, strictly adheres to and harmonise with the global patent regime. The Company through its Risk Management policy identifies the various risks and challenges, internally as well as externally and takes appropriate measures with timely actions to mitigate them and also recommend the Board about risk assessment and minimisation procedures. The risk management procedure is reviewed by the Audit Committee and Board of Directors on quarterly basis. The audit committee has additional oversight in the area of financial risks and controls. To ensure the mitigation of risk the Company manages monitors and reports on the principal risks and uncertainties that can impact its ability 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 Corporate Social Responsibility (CSR) Committee composed of Shri M. Gopalakrishna as Chairperson, Prof. 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 under subsection (1) of 135 of Companies Act, 2013 as post demerger the Company incurred the losses and could not satisfy the other parameters as well to make CSR contributions in terms of the provision of the Act. Hence, the Statement on CSR activities is not applicable. However, the CSR Committee reviewed the other compliance requirements viz. formulating & monitoring the CSR policy, etc. in accordance with the provisions of the law.

CSR policy of the Company can be accessed on the Companys 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 own performance, the directors individually as well as the evaluation of the working of its Committees. The Independent Directors separately carried out evaluation of Chairperson, Non Independent Directors and Board as a whole. The performance of each Committee was evaluated by the Board, based on views received from respective Committee Members. The overall performance evaluation of the Individual Director was reviewed by the Chairperson of the Board and feedback was given to Directors. The manner in which the evaluation has been 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 Annual General 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 of the resolution passed by the Members at the Annual General Meeting held on 14th August, 2019 for the re-appointment Smt. Sudharani Jasti. The tenure of the appointment was reduced to 3 years from the 5 years commencing from 1st November, 2019, in compliance with the Schedule V of the Act.

Further, during the year Dr. M. R. Naidu, Independent Director, resigned from the Directorship of the Company w.e.f. 25th January, 2021. The Board places on record its appreciation for the valuable contribution made by him during his tenure as Director of the 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 as provided in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI Listing Regulations.

Directors Retiring by Rotation

In accordance with the provisions of the Companies Act, 2013, Shri Venkateswarlu Jasti, Chairman and

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

The brief profile(s) of the director(s) seeking appointment/re-appointment at the ensuing 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, no amount on account of principal or interest on deposits was outstanding as on the date of the balance sheet.

Internal Financial Control Systems and their Adequacy

The Company has a comprehensive system of Internal Controls for effective conduct of business and ensure reliability of financial reporting. Your Company has laid down set of standards which enables to implement internal financial control across the organisation and ensure that the same are adequate and operating effectively (1) to provide reasonable assurances that: transactions are executed in conformity with generally accepted accounting principles/standards or any other criteria applicable to such statements, (2) to maintain accountability for assets; access to assets is permitted only in accordance with managements general or specific authorisation and the maintenance of records that are in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the assets that could have a material effect on the financial statements. The Audit Committee of the Board reviews reports submitted by the independent internal auditors and monitors the functioning of the system.

Vigil Mechanism

The Company promotes ethical behaviour in all its business activities. Towards this, the Company has adopted a policy on Vigil Mechanism and Whistle Blower to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company http://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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report as Annexure - C"

Corporate Governance

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

Managements Discussion and Analysis

Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

AUDITORS

Statutory Auditors

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

Auditors Report: The Auditors Report for the year under review does not contain any qualification, 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 has appointed M/s. DVM & Associates LLP, Company Secretaries in Practice, Hyderabad to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report forms part of this report as "Annexure - D". The Secretarial Audit Report does 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, 2014 dated 31st December 2014 issued by the Central Government, the requirement of Cost Audit is not applicable to the Company.

The Company is maintaining such accounts and record as specified by the Central Government and as applicable to the Company under sub-section (1) of section 148 of the Companies 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 and can 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 attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company.

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

On September 17, 2020, pursuant to approval by the shareholders in the AGM, the Board has been authorised to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the SLSL ESOP 2020 scheme. In terms of the scheme the total number of options to be granted are 10,00,000 of face value of C1/- each.

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

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

The SLSL ESOP 2020 in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, and there has been no material change to the plans during the fiscal.

The details of the SLSL ESOP 2020, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014, are available on the Companys website, at www.suven.com.

As the Company not yet granted any options during the year ended 31st March, 2021, the details of the options granted, vested and exercised as per SLSL ESOP 2020 is not available 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 which remained unpaid or unclaimed for a period of seven consecutive years have been transferred by the company to the IEPF, which has been established by the central government.

The above referred rules also mandate transfer of dividends remained unpaid and unclaimed for a period of seven consecutive years as well as the underlying equity shares to IEPF Authority. The company shall accordingly follow the procedures prescribed in this regard.

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

The Company has complied with the provisions relating to the constitution of Internal Complaints 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 cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

General

The Company has complied with the provisions of all applicable Secretarial Standards issued 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 the following 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 other than those which are reportable to the Central Government.

ii. a statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year".

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

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

v. There are no significant material orders passed by the Regulators/ Courts, which would 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 the confidence reposed by them and thank all the shareholders, customers, dealers, suppliers and other business associates for their contribution to your Companys activities. The Directors also wish to place on record their appreciation of the valuable services rendered by the executives, staff and workers of the Company.

Your Directors also thank the Central Government and State Government, the Financial Institutions and Banks for their support during the year and we look forward to its continuance.

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