Your Company's Board of Directors has pleasure in presenting this 33rd Annual Report together with Ind AS compliant Audited Financial Statements of the Company for the financial year ended 31st March, 2022.
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Financial Performance (B in Lakhs)
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Particulars
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Standalone
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Consolidated
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2021-22
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2020-21
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2021-22
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2020-21
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Revenue from operations
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1184
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1348
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1184
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1348
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Other income
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532
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775
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532
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775
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Total Income
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1716
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2123
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1716
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2123
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Less: R & D Expenses
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2453
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2517
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10637
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7102
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Less: Other Expenses
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2396
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1885
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2787
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2252
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Profit/(Loss) before Interest, Depreciation & Tax
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(3133)
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(2280)
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(11708)
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(7231)
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Less: Depreciation and amortization
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439
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434
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439
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434
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Less: Finance cost
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53
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82
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53
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82
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Net Profit/(Loss) before taxation
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(3625)
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(2795)
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(12200)
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(7747)
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Tax Expense
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-
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(532)
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-
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(532)
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Profit/(Loss) for the year
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(3625)
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(2263)
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(12200)
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(7215)
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Other Comprehensive Income
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|
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Items that will not be reclassified to profit or loss
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(15)
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(47)
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(15)
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(47)
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Income tax relating to items that will not be reclassified to profit or loss
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-
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16
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-
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16
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Total Other Comprehensive Income
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(15)
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(31)
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(15)
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(31)
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Total Comprehensive Income
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(3640)
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(2294)
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(12215)
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(7246)
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Retained earnings - opening balance
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19783
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22077
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(9451)
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(2205)
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Add: Profit/(Loss) for the year
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(3640)
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(2294)
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(12215)
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(7246)
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Retained earnings - closing balance
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16143
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19783
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(21,665)
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(9451)
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Review of Operations
During the year under review, your Company continued to advance its innovation efforts on drug discovery molecules which are in the development phase & clinical trial. Your Company announced Phase 3 Clinical Trial of SUVN-502 (Masupirdine), a 5-HT6 antagonist for treatment of Agitation and aggression in Alzheimer's type dementias, which is a significant achievement in enhancing our clinical pipeline. Also Phase 2 Clinical Trial of SUVN-G3031 (Samelisant), a H3 inverse agonist for treatment of Narcolepsy (excessive day time sleep disorder) has crossed 50% patient enrolment.
During the year under review, your company has spent B 2453 Lakhs on Research & Development of drug discovery molecules and will continue to spend on the Discovery R&D in the years to come. Your Company reported a loss of B3625 Lakh for the financial year 2021-22. The Earnings per Share (EPS) of your Company
Impact of the COVID-19 pandemic
The COVID-19 pandemic & global inflation affected the global economy in the recent past. We at SUVEN 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 phase 2 clinical studies conducted in our subsidiary, Suven Neurosciences Inc., USA leading to increased timeframe 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.
Share Capital
The paid up Equity Share Capital of the Company as on 31st March, 2022 was B 1453.82 Lakhs.
During the year under review, the Company issued the 1,81,00,000 fully convertible warrants to its promoter group at a price of B 81.57/- per warrant, each convertible into 1 (One) Equity Share of face value of B 1/- (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 upon receipt of the balance 75%, the Board of Directors in its meeting held on 28th March, 2022, allotted 1,81,00,000 equity shares on conversion of equal number of warrants to promoter/promoter group of the Company on preferential basis. Consequently, the paid up equity shares capital of the Company stands increased to B 1453.82 Lakhs from B 1272.82 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.
has come down to B (2.84) per share in fiscal 202122 from the previous year EPS of B (1.78) per share in fiscal 2020-21.
Your Company's standalone revenue from operations for the Financial Year 2021-22 is B 1184 Lakhs. The consolidated revenue from operations for the Financial Year 2021-22 remained the same as that of standalone revenue. The consolidated loss incurred B 12,200 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.
Research and Development
During the year your company has spent C2453 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 3 initiated Masupirdine (SUVN-502) on Agitation in Alzheimer's type patients, a Phase 2 ongoing Samelisant (SUVN-G3031) on Narcolepsy (excessive day time sleep disorder), Phase 2 ready Usmapride (SUVN-D4010) and Ropanicant (SUVN-911).
In addition to these clinical compounds the Company has eleven (11) internally-discovered therapeutic drug candidates currently in various stages of pre-clinical development targeting conditions such as ADHD, agitation, dementia, bipolar disorders, psychosis, treatment resistant depression, Gastrointestinal disorders and pain and inflammation.
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 Company's website http://www.suven.com/Patentupdates.aspx.
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 Company's website and can be accessed at http://www.suven.com/policiesdocuments.aspx.
Particulars of 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 30 of 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.
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, 2022 can be accessed at Company's website http://www.suven.com/annualreports.aspx .
Number of Meetings of the Board and Audit Committee
During the year under review Six 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.
Subsidiary companies
Your Company has one international wholly owned subsidiary company i.e. Suven Neurosciences Inc., as on 31st March, 2022. 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 Company's 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. 07th May, 2022. 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 harmonize 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 risk. Risk management committee oversee and advise on current risk exposures of the company and future risk strategies and also recommend the Board about risk assessment and minimization procedures. The risk management procedure is reviewed by the Risk Management Committee and Board of Directors periodically. Risk Management committee also reviewed the Enterprise Risk Management Framework of the Company which is developed based on the Risk Management policy of the Company. 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. The company ceases to be covered under subsection (1) of 135 of Companies Act, 2013 as post demerger
the Company continue to incur 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 Company's website at the link:
http://www.suven.com/corporatesocialresponsibility.aspx
Directors and Key Managerial Personnel
The Company did not appoint any Director or Key Managerial Personnel during the year under review. None of the Director or 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 and also affirmed compliance with Code of conduct as required under Regulation 26(3) of the Listing Regulations.
Directors Retiring by Rotation
In accordance with the provisions of the Companies Act, 2013, Smt. Sudharani Jasti, Whole time Director (DIN: 00277998) of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself 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.
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.
Deposits
During FY 2021-22, 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 organization 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 management's general or specific authorization 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 unauthorized 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 behavior in all its business activities. Towards this, the Company has adopted a policy on VigilMechanism 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.
Management's Discussion and Analysis
Management's 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
The tenure of M/s. TUKARAM & Co LLP, Chartered Accountants (Firm Registration No. 004436S), as the statutory auditors of the Company, will expire at the conclusion of ensuing 33rd Annual General Meeting of the Company.
Hence, audit committee in its meeting held on 07th May, 2022 considered and recommended to Board the appointment of M/s. KARVY & Co, Chartered Accountants (Firm Registration No. 001757S) as the statutory auditors of the Company for a term
of five consecutive years, from the conclusion of the ensuing 33rd Annual General Meeting of the Company till the conclusion of 38th Annual General Meeting to be held in the year 2027, subject to the approval of the Members of the Company.
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 may grant 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 17th September, 2020, pursuant to approval by the shareholders in the AGM, the Board has been authorized 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 B 1/- each.
The nomination and remuneration committee (NRC) has not granted any options under the SLSL ESOP 2020 scheme during the year ended 31st March, 2022. 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 Company's website, at www.suven.com.
As the Company not yet granted any options during the year ended 31st March, 2022, 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 & Unclaimed Dividend and underlying equity shares to Investor Education and Protection Fund (IEPF)
During the FY 2021-22, the Company has transferred B 11,98,169 to Investor Education and Protection Fund (IEPF) in accordance with the provisions of Section 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
In accordance with the aforesaid provisions, the company has transferred 12,090 equity shares held by 43 Shareholders whose dividends were remaining unpaid/ unclaimed for seven consecutive years i.e. from FY 2013-14 to IEPF Authority. Any shareholder whose shares are transferred to IEPF Authority can claim the shares by making an online application in Form I EPF-5 (available on www.iepf.gov.in) with a copy to the Company.
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
There are no Companies have become or ceased to be your Company's subsidiaries, joint ventures or associate Companies during the year.
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 sub-section (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 along with 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.
VI. 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 Company's 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: 7th May, 2022 DIN: 00278028
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