Transgene Biotek Ltd Directors Report.

Dear Shareholders

Your Directors submit to you the 29th Annual Report on the business & operations of the Company and Audited Statement of Accounts for the year ended 31st March, 2019 along with the Auditors Report thereon.

Financial Results (Rs. in Lakhs)
Particulars 2018-2019 2017-2018
Total Income 210.90 749.09
Operational, Administration and other expenses 75.69 222.34
Gross Operating Profit 135.80 526.75
Interest and Financial Charges 25.05 102.82
Forex Gain/Loss - 0.0132
Depreciation 989.42 989.14
Profit before Tax/Loss (879.27) (565.22)
Provision for Tax - 78.61
Net Profit/Loss (879.27) (643.83)

OPERATIONS

The total turnover of the company for the year ended 31st March, 2019 amounted to Rs. 210.90 Lakhs as against Rs. 749.09 Lakhs in the previous year. The company incurred a net Loss of Rs. 879.27 Lakhs for the year as against a loss of Rs. 643.83 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 14th August, 2019.

REVIEW AND RESULTS OF OPERATIONS

During the year, SEBI hearing on GDR matter has not yet been concluded, hence the companys ability to raise required funds to advance its technologies continues to be curtailed. But the management with the help of funds raised through strategic sale of unused assets and with the help of promoters funds as and when required, continued to advance the TrabiORAL platform and in the process received patent approvals in various countries.

The scientists of Transgene have finally achieved the required breakthrough in TrabiORAL technology that has hitherto raised certain uncertainties in the minds of the potential strategic partners.

TrabiORAL has now demonstrated its deliverability of various protein and peptide molecules of varying sizes covering different clinical applications such as Diabetes, Vaccines, Cancer drugs, Inflammatory Bowel Diseases etc.

GDR issue

SEBI hearing on GDR matter has not yet been concluded. The management is waiting to receive various documents sought by our legal team of M/s L. S. Shetty & Associates from SEBI that may play a crucial role in defense of our case at SEBI.

Pertaining to the recovery of GDR funds, the legal teams in London and Singapore are still pursuing to recover the funds but not yet reached a conclusive stage but the management hopes a final resolution may be forthcoming during the current year.

EMPLOYEE

As stated above, with limited resources the management has been judiciously maintaining required strength of employees to continue its operations without any interruption.

DIVIDEND

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

STRATEGIC FOCUS AND FUTURE ORIENTATION

As reported during the previous year, GDR issue and the consequent SEBI order have severely curtailed the managements ability to undertake all the technologies it has at its disposal. Undeterred with such challenges, the management continued to survive and withstand various hurdles in its quest to come out with success on its TrabiORAL platform, a real tribute to the dedicated work of team of scientists.

SUBSIDIARY COMPANY - TRANSGENE BIOTEK HK LIMITED

It is note worthy to point out that with revelation of certain crucial information by one of the persons operating from Singapore to the Ministry of Singapore during the course of investigation, Transgene Biotek HK Ltd has not been audited for the current year 2018-19 too. However, the management is seeking the opinion of few experts in this regard as to exact course of action to be initiated on the prospects of closing this company altogether.

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 funds transferred illegally from its account. 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

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

Your Company has taken adequate steps to adhere to all the stipulations laid down in under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as part of this Annual Report as "Annexure - C".

Certificate from the Statutory Auditors of the company M/s. Manisha Dubey & Associates, Chartered Accountants confirming the compliance with the conditions of Corporate Governance as Stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included as part of this report as "Annexure D"

DEMATERIALISATION OF SHARES

86.21% of the companys paid up Equity Share Capital is in dematerialized form as on 31st March, 2019 and balance 13.79% 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 1st April, 2018 to 31st March 2019 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 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 18-19 the independent Directors met four times i.e. on 28th May 2018, 14th August 2018, 14th November 2018 and, 14th February 2019. 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 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, 2019, 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.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

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 7.12 lakhs
(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"

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 : 28-08-2019 CHAIRMAN & MANAGING DIRECTOR