Transgene Biotek Ltd Directors Report.

Dear Shareholders

Your Directors submit to you the 31st Annual Report on the business & operations of the Company and Audited Statement of Accounts for the year ended 31st March, 2021 along with the Auditors Report thereon.

Financial Results

(Rs. in Lakhs)

Particulars 2020-2021 2019-2020
Total Income 43.64 18.25
Operational, Administration and other expenses 69.53 86.72
Gross Operating Profit -25.88 -68.47
Interest and Financial Charges 26.63 38.05
Forex Gain/Loss - -
Depreciation 990.80 989.69
Profit before Tax/Loss (1043.31) (1096.22)
Provision for Tax - -
Net Profit/Loss (1043.31) (1096.22)

OPERATIONS

The total turnover of the company for the year ended 31st March, 2021 amounted to Rs. 16.95 Lakhs as against Rs. 0 Lakhs in the previous year. The company incurred a net Lossof Rs.1043.31 Lakhs for the year as against a loss of Rs.1096.22 Lakhs in the previous year. As can be noticed, the management continued to revise books of accounts and has written off certain accounts wherever possible after following the standard accounting policies of India and in consultation with the auditors. This revision has resulted in increased operating loss from the previous year.

AUDITORS COMMENTS

The operations in the Subsidiary are being shut down for more than three years (since financial year 2015-16) with no activities of any sort.

The consolidated financial statements were authorized for issue by the Companys Board of Directors on 29th June, 2021.

Review and results of operations

a) TrabiORAL™

We have successfully formulated the molecule belonging to a very large global pharma company for undergoing studies at its own chosen facilities in USA. Results of those studies are expected shortly.

ii. Transgenes plans on commercialization of its drug delivery: The management is exploring various options to commercialize its oral and intra-nasal delivery technologies. It is with that aim, the management is in discussions with few select companies keeping in consideration about the restrictions imposed by SEBI through its order and also, the need for the availability or supplies of APIs or Biotechnology products needed for our delivery technologies. The management believes that in structuring a successful deal that benefits Transgene and its stakeholders.

B) PERORAL BIO PVT LTD

With the relaxation of lockdown conditions all around, the management plans to focus on the plans to transfer TrabiORAL to PerORAL as the process evolves in the days ahead.

C) SEBI Order seeking Certificate on the efforts for recovery of lost GDR funds

The Board has been regularly informed that the Managing Director has been pursuing vigorously with the help of the legal team in London and Switzerland to recover GDR funds, as directed by SEBI in its order dated 31st August 2020. It is brought to the attention of the Board that those efforts are nearing crucial stages in pursuit of recovery of the lost GDR funds.

D) SEBI Adjudication hearing

With the Covid situation still not abating fully, no further progress could be achieved on this front.

E) SBIRI/BIRAC

There has been no resolution yet on this matter.

F) CESTAT

There have been no further developments on this matter.

DIVIDEND

Your Directors are unable to recommend any dividend since the company has not made any profits.

STRATEGIC FOCUS AND FUTURE ORIENTATION:

With the success demonstrated repeatedly and consistently on several molecules on both oral and intra-nasal delivery routes, the management felt it right to focus on bringing this platform to a stage of commercialization. To achieve this objective, it is realized that one of the key links is the uninterrupted supply of APIs such as Insulin for it to be launched into the markets in the form of Oral or Intra-nasal or both routes in a phased manner. Therefore, the management is trying for a strategic alliance with companies manufacturing such biologics and biosimilar drugs. This alliance shall help in realizing the monetization goals of Transgene in general.

Subsidiary Company - Transgene Biotek HK Limited

With the adverse impact of Covid still influencing the proceedings across several countries, no action has been initiated on this yet.

However, the focus has not been lost regarding the irregularities committed through the account at Standard Chartered Bank, Singapore with efforts continuing for the recovery of lost GDR funds transferred illegally from its account at Investec Bank.A Statement pursuant to Section 129, read with Rule 5 of the Companies (Accounts) Rules, 2014 in Form AOC - 1 is attached as "Annexure -A"

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The market for Biologics and Biosimilars is an ever expanding one and substantial majority of those drugs are to be administered through injectable route only. The management, having optimized the technology and its utility in transforming and replacing those injectable routes into highly convenient and effective routes as oral or intra-nasal administration is now actively seeking strategic alliances for an uninterrupted supply of all such biologics that will undoubtedly create an impact across the world.

We believe that Transgene is well-positioned to create a significant impact with its unique delivery technology in growing globally based on its sound and superior delivery mechanism, scientific knowhow, low-cost manufacturing setup and a potentially broad product portfolio. We are confident in continuing to expand across the world that will bring immense relief and benefits to the patients across the world.

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 a separate section, forming part of the Annual Report as "Annexure B".

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The corporate governance philosophy at Transgene Biotek believes in adherence to good corporate practices, implements policies, guidelines and develops a culture of the best management practices and compliance with the law coupled with the highest standards of integrity, transparency, accountability. The Company has a strong legacy of fair, transparent and ethical governance practices and it believes that good Corporate Governance is essential for achieving long-term corporate goals and to enhance stakeholders value.

All our employees are committed to a balanced corporate governance system, which provides the framework for achieving the Companys objectives encompassing practically every sphere of management, from action plans and internal controls to corporate disclosures.

The Company continues to strengthen with an aim to generate long term value for all its stakeholders on a sustainable basis.

DEMATERIALISATION OF SHARES

86.34% of the companys paid up Equity Share Capital is in dematerialized form as on 31stMarch, 2021 and balance13.66% isin physical form. The Companys Registrars are M/s. Big Share Services Pvt Ltd, 306, Right Wing, 3rd Floor, Amrutha Ville, Opp. Yashoda Hospital, Raj Bhavan Rd, Somajiguda, Hyderabad, Telangana-500 082.

NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met 4(Four) times during the financial year from 1stApril, 2020 to 31stMarch2021the details of which are furnished in the report on Corporate Governance.

BOARD EVALUATION

The evaluation of all the Directors including the Chairman, the Independent Directors and the Managing Director, Board committees and the Board as a whole was carried out based on the criteria and framework approved by the Nomination and Remuneration Committee pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI under Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015).

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of the board as a whole and performance of the Chairman was evaluated. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

INDEPENDENT DIRECTORS AND DECLARATION

Our Independent Directors meet the baseline definition of Independent Directors under the Act and the Listing Regulations. At the beginning of each financial year, the Independent Directors submit a self-declaration confirming their independence and compliance under section 149(6), Schedule IV of the Act and Regulation 16(1)(b) of the Listing Regulations, 2015 [Listing regulations]. All such declarations are placed before the Board for information and noting. Based on the declarations received, the Board also confirms that the Independent Directors fulfil the independence criteria under the Listing Regulations and are independent of the management.

Generally, the Independent Directors meet before each board meeting. During FY 2020-21 the independent Directors met Four (4) times i.e. on03rd June 2020, 24thAugust 2020, 10thNovember 2020 and23rdJanuary 2021. The Independent Directors inter alia discuss matters arising out of Board and Board Committee agendas, company performance and various other board-related matters, identify areas where they need clarity or information from management and to review the performance of Independent Directors, the Chairman and the Board as a whole and assess the effectiveness and promptness of the information flow.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr G Santosh Kumar, Independent Director, of the Company retires at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

• In the preparation of the annual accounts for the year ended 31st March, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures;

• They have selected such accounting policies and applied them consistently and made judgments and estimates 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 loss of the company for the same period;

• The directors have taken proper and sufficient care 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;

• They have prepared the annual accounts on a going concern basis;

• They have laid down internal financial controls in the company that are adequate and were operating effectively.

• They have devised proper systems to ensure compliance with the provisions 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, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

RISK MANAGEMENT POLICY OF THE COMPANY

The Company has formulated and adopted a risk management policy at its Board Meeting. As per the policy, the management continues to review and assess the risk and also the steps for mitigating the same.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility do not apply to the company.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors report.

PARTICULARS OF EMPLOYEES

The statement showing particulars of employees pursuant to Section 197 of the Companies Act, 2013 (the Act) read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable on company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control systems of the Company are adequate and commensurate with the size of operations. These controls ensure that transactions are authorized, recorded and reported on time. They ensure that assets are safe guarded and protected against loss or unauthorized disposal.

The Internal Audit department carried out audits in different areas of the Companys operations. Post-audit reviews were carried out to ensure that audit recommendations were implemented. The Audit Committee of the Board of Directors reviewed the audit program and findings of the Internal Audit department.

AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT:

The auditors report and Secretarial auditors report contain certain qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report - "Annexure - E"

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

(A) The operations of the company are not power intensive nevertheless the company continues its efforts to minimize energy wherever practicable by economizing on 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 related parties 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 Form MGT-9 is annexed herewith as "Annexure - F"

A copy of the annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013 (the Act), in the prescribed form, is hosted on the Companys website and can be accessed at www.transgenebiotek.com

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their sincere thanks and place on record their appreciation of the continued assistance and co-operation extended to the company by its bankers, government and semi government departments, customers, marketing agents and suppliers and in particular Shareholders for the confidence reposed in the company

Your directors also thank all the employees of the company for their dedicated 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: 14.08.2021 CHAIRMAN & MANAGING DIRECTOR