BOARD'S REPORT
To the Members of
Suven Life Sciences Limited
Your Company's Board of Directors has pleasure in presenting this 35th
Annual Report together with Ind AS compliant Audited Financial Statements of the Company
for the financial year ended 31st March, 2024.
Financial Summary
|
|
|
|
(Rs. in lakhs) |
|
Standalone |
Consolidated |
| Particulars |
Financial Year 2023-24 |
Financial Year 2022-23 |
Financial Year 2023-24 |
Financial Year 2022-23 |
| Revenue from operations |
1,169 |
1,354 |
1,169 |
1,354 |
| Other income |
2,113 |
845 |
2,113 |
845 |
| Total Income |
3,282 |
2,199 |
3,282 |
2,199 |
| Expenses |
|
|
|
|
| R & D Expenses |
2,039 |
2,050 |
11,443 |
11,535 |
| Operating expenditure |
2,224 |
2,078 |
2,527 |
2,407 |
| Depreciation and amortization |
650 |
654 |
650 |
654 |
| Total Expenses |
4,913 |
4,782 |
14,620 |
14,596 |
| Profit before finance costs and tax |
(1,631) |
(2,583) |
(11,338) |
(12,397) |
| Finance cost |
16 |
29 |
16 |
29 |
| Profit/(Loss) before Exceptional Items, Tax |
(1,647) |
(2,612) |
(11,354) |
(12,426) |
| Exceptional Items |
746 |
600 |
746 |
600 |
| Profit/(Loss) before tax |
(901) |
(2,012) |
(10,608) |
(11,826) |
| Tax Expense/Tax of earlier years |
(100) |
- |
(100) |
- |
| Profit/(Loss) for the year |
(801) |
(2,012) |
(10,508) |
(11,826) |
| Other Comprehensive Income |
|
|
|
|
| -Items that will not be reclassified to profit or loss |
(6) |
19 |
(6) |
19 |
| -Income tax relating to items that will not be reclassified to profit or loss |
" |
- |
- |
- |
| Total Other Comprehensive Income |
(6) |
19 |
(6) |
19 |
| Total Comprehensive Income |
(807) |
(1,993) |
(10,514) |
(11,807) |
| Retained earnings - opening balance |
14,149 |
16,143 |
(33,473) |
(21,665) |
| Add: Profit/(Loss) for the year |
(807) |
(1,993) |
(10,514) |
(11,808) |
| Retained earnings - closing balance |
13,342 |
14,149 |
(43,987) |
(33,473) |
The state of the company's affairs
During the year under review, Company continued to advance its innovation on
discovering and developing novel pharmaceutical products, for central nervous system
("CNS") disorders using G Protein-Coupled Receptor targets. Company's focus has
been on discovery and development of innovative molecules targeting diseases and areas,
which has undiscovered medical treatment opportunities.
Company singularly focuses on development of "New Chemical Entities"
("NCEs") molecules for CNS diseases such as Alzheimer's, various forms of
Dementia, Narcolepsy, Major Depressive Disorder("MDD"), Attention Deficient
Hyperactivity Disorder ("ADHD"), Huntington's disease, Parkinson, Bipolar
disorder and different forms of neuropsychiatry disorders, gastro and pain. In Company's
clinical development pipeline Phase 3 Clinical Trial of SUVN-502 (Masupirdine) 5-HT6
antagonist for treatment of Agitation and aggression in Alzheimer's type dementias, is
ongoing. The company announced successful outcome of Phase 2 Clinical Trial of SUVN-G3031
(Samelisant), a H3 inverse agonist for treatment of Narcolepsy (excessive day time sleep
disorder) and in the process of d iscussions with key opinion leaders for next phase.
During the year under review, your company has spent Rs.2039 Lakhs on Research &
Development of drug discovery molecules and will continue to spend in the years to come.
Your Company reported a loss of Rs.801 Lakhs for the financial year 2023-24. The Earnings
per Share (EPS) of your Company is Rs.(0.37) per share in fiscal 2023-24 from the previous
year EPS of Rs.(1.13) per share in fiscal 2022-23. Your Company's standalone revenue from
operations for the Financial Year 2023-24 is Rs.1169 Lakhs. The consolidated revenue from
operations for the Financial Year 2023-24 remained the same as that of standalone revenue.
The consolidated loss incurred Rs.10508 Lakhs are mainly due to clinical development
expenditure incurred by Suven Neurosciences, 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 ^11443 Lakhs (consolidated basis) on innovative
R&D in CNS therapies. Suven has 4 clinical stage compounds, ongoing phase 3 study on
Masupirdine (SUVN-502) on Agitation in Alzheimer's type patients, completed Phase 2 study
on Samelisant (SUVN-G3031) on Narcolepsy (excessive day time sleep disorder), ongoing
Phase 2 study on Ropanicant (SUVN-911) and ready for phase 2 study on Usmapride
(SUVN-D4010).
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.
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 March 31,2024 was Rs.2180.73
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.
Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the
Companies Act 2013, read with Rule 12 of the Companies (Management and Administration)
Rules, 2014the Annual Return as at March 31,2024 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, Four 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 Dr. Vajja Sambasiva Rao, 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 5EBI 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 Company's website and can be accessed at http://
www.suven.com/policiesdocuments.aspx.
Particulars of Loans, Guarantees or Investments Details of investments made are
furnished in the Standalone Financial Statement which can be referred at Note No. 6(a) of
the Standalone Financial Statement.
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. The consolidated financial statements of the Company are 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 sha 11 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/subsidiarvaccounts.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
subsection (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. 06th May, 2024. 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 Dr. Vajja Sambasiva Rao as Chairperson,
Prof. Seyed E. Hasnain, Shri Venkateswarlu Jasti and Smt. J.A.S. Padmaja as members.
The Company continues to incur losses and not made any profits during three immediately
preceding financial years. Therefore, there is no spending obligation of the Company under
CSR. Accordingly, 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/
corporatesocialresponsibilitv.aspx
Directors and Key Managerial Personnel
During theyear under review, theshareholdersoftheCompany at 34th Annual General Meeting
held on 05th August, 2023, approved the reappointment of Mr. Santanu Mukherjee (DIN:
07716452) as an Independent director of the Company for a second term of five years with
effect from 14th May, 2023 to 13th May, 2028, whose office shall not be liable to retire
by rotation and also approved the reappointment of Mrs. J.A.S. Padmaja (DIN: 07484630) as
an Independent director of the Company for a second term of five years with effect from
13th November, 2023 to 12th November, 2028, whose office shall not be liable to retire by
rotation.
During the year under review, based on the recommendation of Nomination and
Remuneration Committee, the Board at its meeting held on January 30, 2024 appointed Dr.
Vajja Sambasiva Rao (DIN: 09233939) as an Independent and Non- Executive Additional
Director for a term of three (3) years i.e. up to 20th January, 2027, in
accordance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The shareholders approved his
appointment as an Independent Director not liable to retire by rotation, through the
postal ballot voting concluded on 05th March, 2024. Dr. Vajja Sambasiva Rao was
inducted as member of various committees of the Board, such details are given in the
Corporate Governance Report.
In the opinion of the Board, all the Independent Directors possess the integrity,
expertise and experience including the proficiency required to be Independent Directors of
the Company, fulfill the conditions of independence as specified in the Act and the
Listing Regulations and are independent of the management and have also complied with the
Code for Independent Directors as prescribed in Schedule IV of the Companies Act, 2013.
Shri M Gopalakrishna ceased to be Director of the Company upon completion of his 2nd
term on 31st March, 2024. The Board places on record its sincere appreciation for the
contribution made by him during tenure on the Board of the Company.
Except as stated above 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.
The Board recommends the reappointment of Shri Venkateswarlu Jasti as Managing Director
of the Company, to the shareholders. The notice convening the 35th Annual
General Meeting, to be held on 02nd August, 2024, sets out the details.
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 LODR
Regulations and also affirmed compliance with Code of conduct as required under Regulation
26(3) of the SEBI LODR Regulations.
Directors Retiring by Rotation
In accordance with the provisions of the Companies Act, 2013, Shri Venkateswarlu Jasti,
Managing Director (DIN: 00278028) of the Company retires by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for reappointment.
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 2023-24, 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 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,
together with the Certificate issued by Practicing Company Secretary regarding the
compliance of conditions of corporate governance, is presented in a separate section
forming part of this 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 this 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 04th
August 2022 has appointed M/s. KARVY & Co, Chartered Accountants (Firm Registration
No. 001757S), as statutory auditors of the Company for a period of five years i.e. from
the conclusion of the 33rd Annual General Meeting till the conclusion of the 38th
Annual General Meeting to be held in the year 2027.
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 and Sustainability Report
The Business Responsibility and Sustainability Report as required under the SEBI
Listing Regulations, describing the initiatives taken by the Company from environment,
social and governance perspective, forms part of this report as "Annexure-E".
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 September 17, 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 Rs.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, 2024. 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 and Sweat
Equity) Regulations, 2021, 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 and Sweat Equity) Regulations, 2021, 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,
2024, 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 2023-24, the Company has transferred Rs.851,788.00 and Rs.548,522.00 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 8825 and 36194
equity shares held by 49 and 93 Shareholders respectively whose dividends were remaining
unpaid/ unclaimed for seven consecutive years i.e. from FY 2015-16 and 2016-17 to IEPF
Authority. Any shareholder whose shares are transferred to IEPF Authority can claim the
shares by making an online application in Form IEPF-5 (available on www.iepf.aov.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) 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.
(iii) 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.
(iv) 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 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 & MD |
| Date: 06th May, 2024 |
DIN: 00278028 |
|