Dear Shareholders
Your Directors submit to you the 33rd Annual Report on the business &
operations of the Company and Audited Statement of Accounts for the year ended 31st
March, 2023 along with the Auditors Report thereon.
Financial Results
(Rs. in Lakhs)
|
Standalone |
Consolidated |
| Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Total Income |
23.05 |
29.92 |
23.05 |
29.92 |
| Operational, Administration and other expenses |
110.74 |
55.01 |
110.76 |
55.01 |
| Gross Operating Profit |
- |
- |
- |
- |
| Interest and Financial Charges |
18.14 |
23 |
18.14 |
23 |
| Forex Gain/Loss |
- |
- |
- |
- |
| Depreciation |
495.01 |
992 |
495.01 |
992 |
| Profit before Tax/Loss |
-600.84 |
-1040.20 |
-600.86 |
-1040.20 |
| Provision for Tax |
0.00 |
0.00 |
0.00 |
0.00 |
| Net Profit/Loss |
-600.84 |
-1040.20 |
-600.86 |
-1040.20 |
OPERATIONS
Revenues — Standalone
During the year under review, the Company on a standalone basis has recorded an income
of Rs.23.05 Lakhs and incurred a loss of Rs. 600.84 Lakhs as against the income of Rs.
29.92 Lakhs and Loss of Rs. 1040.20 respectively in the previous financial year ending
31.03.2022.
Revenues — Consolidated
During the year under review, the Company on a consolidated basis has recorded an
income of Rs. 23.05 and incurred a loss of Rs. 600.86 as against the income of Rs. 29.92
Lakhs and Loss of Rs. 1040.20 Lakhs respectively in the previous financial year ending
31.03.2022.
AUDITORS COMMENTS
As reported last year too, there were no activities at the subsidiary company,
Transgene Biotek HK Ltd, since financial year 2015-16.
The consolidated financial statements were authorized for issue by the Companys Board
of Directors at the board meeting held on 14th November, 2023.
Review and results of operations
Although there are no further restrictions imposed by SEBI, there is an adverse impact
in raising required funds in view of penalties imposed by SEBI which has been challenged
at the Appellate Securities Tribunal. However, it has been difficult to continue with the
operations at the company in the absence of required funds to advance the product and
technology development programs with a potential to lose their value on further delays.
Transgenes exploration for an alternative
The management and board of Directors believe that the basic foundation for all IPRs
has been laid at Transgene by Dr Rao and the scientific team so far. Transgene has been
funded, mostly through unsecured loans from Dr Rao, with that objective over the past two
decades and its present architecture of IPRs are a testament to the resolute will of the
promoter backed by the shareholders. However, end results in bringing those technologies
and inherent IPRs towards successful monetization have been illuding. Therefore, Dr Rao
and rest of the management sought to unlock the potential through strategic associations
and verticals all with a specific purpose to benefit the TBL shareholders and restore the
pristine glory of TBL as a cutting-edge Biotech company.
It was with the above background necessitated by the zeal to sail through adverse
circumstances, a strategic alliance with a company by name NiedlFree Technologies Pvt Ltd
has been decided as a viable move forward. It is understood that NiedlFree is composed of
members with vast experience, possessing deep knowledge and expertise not only in
developing different biologics and bio-similars but also in the commercial production of
those. NiedlFree assured to set-up relevant infrastructure for the development of
biologics and formulations through its own sources of funding.
The said alliance between NiedlFree and Transgene would compose of key accruals from
NiedlFree to Transgene as listed below:
- Rs.5 Crores payable as milestones
- 28% of the equity in NiedlFree
- 25% of any lumpsum payments received by NiedlFree
- 6% of the net sales carried out by NiedlFree
- 15% received as non-royalty payments through sub-licensees.
However, what has not been transferred and remained with Transgene are several other
technologies and intellectual assets such as such as the patented AAV vectored gene
therapy technologies targeted against Liver and Breast cancers, technology for the
treatment of Multiple Sclerosis etc. The sum of all parts with plans to align different
forces together will help to serve larger than the whole culminating eventually into a
better and bigger entity, straddling the entire value chain.
With an assured infrastructure to be created by NiedlFree for biologicals and their
formulations resulting in monetization of those rapidly, the board has approved the
licensing agreement between Transgene and NiedlFree while taking note of Dr. K. Koteswara
Rao, Managing Director of Transgene Biotek Ltd holding an interest in NiedlFree
Technologies Pvt Ltd also.
As assured, NiedlFree made substantial investments and established a new infrastructure
that included a lot of new equipment.
Further, to move forward with the technology transferred from Transgene, NiedlFree made
several changes to the transferred technology resulting in a very efficient and effective
oral and nasal delivery technology platform with demonstrable results starting with oral
and nasal Insulin, first among others.
After the successful demonstration with changes made to the technology displaying
remarkable bio-availability, the management of NiedlFree is reported to be in active
discussions with few companies with an aim for monetization through different strategic
routes.
PerORAL Bio Pvt Ltd
With no useful purpose served by the presence of PerORAL Bio Pvt Ltd, it was felt by
the management that it would be better to close the company. Accordingly, an appropriate
resolution was passed by the board for its closure and steps have been taken on that.
SEBI Order and recovery of lost GDR funds
During the course of period since the last AGM, efforts have been intensified with the
help from London and Swiss Lawyers for the recovery of lost GDR funds from the entities
involved in the GDR fraud.
SEBI Adjudication hearing
SEBI in its Adjudication order dated 27th June 2022, delivered at our
offices on 10th October 2022, has imposed penalties of Rs.38 lacs on the
company apart from imposing penalties of different amounts on others named in the
adjudication order. Aggrieved by the unjust order, Transgene has filed an appeal at the
Securities Appellate Tribunal.
SBIRI / BIRAC
There has been no resolution yet to the aspect of outstanding amount of Rs.
5,00,73,313.42/- with BIRAC and the management is taking steps to close this matter at the
earliest during the ensuing year.
DIVIDEND
Your Directors are unable to recommend any dividend since the company has not made any
profits.
SUCCESION, STRATEGIC FOCUS AND FUTURE ORIENTATION:
Drawing strength from its strategic alliance with NiedlFree gaining significant results
from the delivery technology platform, the management of Transgene expects rapid progress
in commercialization of some technologies with resultant benefits accruing to it.
SUCCESSION PLANNING
With Dr. Koteswara Rao having past the age of 80 years, the management is looking
forward to handing over the baton to another person with an ability to infuse vigor and
vitality in managing the company and taking forward in realizing the goals and
aspirations. The search is continuing but one that may conclude only after the clearance
of SEBI issues. Therefore, the Board believing it to be in the best interests of
shareholders requested Dr. Koteswara Rao to continue serving in the same earlier capacity
at least till such time the company tides over the challenges and to facilitate a smooth
succession planning and for the transition to a new Chair, likewise for the position of
Managing Director too.
Subsidiary Company - Transgene Biotek HK Limited
Till the completion of investigation pertaining to the role played by the operators of
TBL HK account on the matter of unauthorized and illegal transfer of funds, no decision is
to be taken on its continued presence or its closure otherwise.
However, the focus has not been lost regarding the irregularities committed through the
account at Standard Chartered Bank, Singapore, and Hong Kong and through other banks too.
Likewise, the efforts are 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"
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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
We are basically a bio-pharmaceutical company with a focus on three components -
Research & Development of innovative biologic molecules, process to stabilize and
develop innovative formulations for delivery through either oral or nasal route thus
avoiding the injectable route of administration and finally initiate relevant studies for
regulatory approvals for the purposes of strategic monetization of the chosen molecule.
However, in order to overcome various challenges, temporary or otherwise, prevailing in
the path of progress on the above three components, well informed strategies need to be
put in place to realize the ultimate goal of accruing the benefits from the chosen path,
one of those is the transfer of oral delivery technology to NiedlFree Technologies. Annexure-B
CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
The Directors are collectively responsible for the success of the company. The Board
maintains and periodically reviews a list of matters that can only be approved by the
Board. Matters that have not been expressly reserved to the Board in this way are
delegated to the Managing Director or one of the Boards Committees. The Boards
responsibilities include setting our strategy and policies, overseeing risk and corporate
governance, and monitoring progress towards meeting our objectives and annual plans. It is
accountable to our shareholders for the proper conduct of the business and our long-term
success and seeks to represent the interests of all stakeholders.
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. Annexure-C
DEMATERIALISATION OF SHARES
86.35% of the companys paid up Equity Share Capital is in dematerialized form as on 31st
March, 2023 and balance 13.65% is in 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,
2022 to 31st March 2023 the 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 based on 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 based on 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 2022-23
the independent Directors met Four (4) times i.e. on 30th May 2022, 13th
August 2022, 12th November 2022 and 14th February 2023. 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
Mrs. Sujana Kadiam, Independent Director, of the Company retires at the ensuing Annual
General Meeting and being eligible, offers herself 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, 2023, 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
principal or interest on deposit 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.
Statutory Auditors
The Statutory Auditors, M/s. Vasavi & Co., Chartered Accountants, Hyderabad (Firm
Registration No. 020965S), Your directors recommend their appointment as Statutory
Auditors of the Company for a period of 5 years, i.e. from Financial year commencing from
2023-24 to 2027-28) to hold office till the conclusion of the Annual General Meeting to be
held in the year 2028.
Your Directors propose to appoint the firm M/s Vasavi & Co., chartered Accountants,
FRN - 006005S as Statutory Auditors for a period of five years from the ensuing Annual
General Meeting.
Internal Auditors
Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts)
Rules, 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board and
its Powers) Rules, 2014; during the year under review the Internal Audit of the functions
and activities of the Company was undertaken by the Internal Auditor of the Company on
quarterly basis. Deviations are reviewed periodically, and due compliance ensured. Summary
of Significant Audit Observations along with recommendations and its implementations are
reviewed by the Audit Committee and concerns, if any, are reported to Board. There were no
adverse remarks or qualification on accounts of the Company from the Internal Auditor.
Change In the Nature of Business, if Any
During the period under review and the date of Boards Report there was no change in
Business.
Material Changes & Commitment Affecting the Financial Position of the Company
There have been no material changes and commitments affecting the financial position of
the Company which have occurred between the end of the Financial Year of the Company to
which the financial statements relate and the date of the report.
Revision of Financial Statements
There was no revision of the financial statements for the year under review.
Further Issue of Share Capital
During the year under review, your Company has not made any allotments.
Transfer Of Shares and Unpaid or Unclaimed Amounts To Investor Education And Protection
Fund (IEPF)
Pursuant to the provisions of Section 124 of the Companies Act 2013, Investor Education
and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
("IEPF Rules") read with the relevant circulars and amendments thereto, the
amount of dividend remaining unpaid or unclaimed for a period of seven years from the due
date is required to be transferred to the Investor Education and Protection Fund
("IEPF"), constituted by the Central Government During the Year, no amount of
dividend was unpaid or unclaimed for a period of seven years and therefore no amount is
required to be transferred to Investor Education and Provident Fund under the Section
125(1) and Section 125(2) of the Act.
During the Year, no amount of dividend was unpaid or unclaimed for a period of seven
years and therefore no amount is required to be transferred to Investor Education and
Provident Fund under the Section 125(1) and Section 125(2) of the Act.
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 - D"
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 |
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexed
herewith as "Annexure - E"
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 company has not given loans, Guarantees, or made any investments attracting the
provisions of Section 186 of the Companies Act, 2013 during the year under review.
FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year and there are no fixed
deposits outstanding as on 31.03.2023.
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: 14.11.2023 |
CHAIRMAN & MANAGING DIRECTOR |
+91-9892691696
