Mar 31, 2010
The Directors present the 1 8th Annual Report, together with the Audited Accounts for the year ended March 31,2010.
With your Company deciding to suspend its contract manufacturing business due to failing profitability and unviablility unless a formulation facility was acquired by the Company, sales during the last financial year was only around Rs 2.5 Crores. The low turnover during the year has resulted in an operational loss of Rs.4.5 Crores.
In view of the Governments decision to set up a Critical Thermal Power plant spread over 900 acres next to the Companys proposed DHA site, a Gas terminal and container port being established on the seashore and the 9000 acre Rare Earth Facility of the Tata Group coming up close to the site, and since all the Fly-ash and lllimnite washings are being disposed alongside the site, the viability of the present site is questionable. While there is considerable intellectual property that has been generated, which may yield commercial value at a future date, the management thought it prudent to withdraw from this site. All movable R&D equipments have been relocated at a new site in Bangalore. The Board has therefore recommended that intangible expenditures relating to development of DHA and various other molecules and other capital assets valued at Rs.8.76 Crores be written off.
In addition, in line with the Managements decision to wind up the operations of the Companys own brand marketing division, INVIA, in Kerala, Tamil Nadu, Andhra and Orissa, due to issues with viability and management bandwidth, all the receivables representing unsold stocks of the Companys own brands, lying with distributors, needed to be destroyed and consequently a sum of Rs5.3 Crores has been recommended to be written off.
Due to the above extraordinary items charged off to operations, the net result for the year has been severely hit leading to a net loss of Rs.20.60 crores
Your Companys research efforts had seen deterioration due to working capital issues and loss of key people. Your Board has therefore taken a decision to relocate the entire Research Laboratory to an independent facility in Hosakote Industrial Area, Bangalore. This will allow the company to have greater interface with the Indian Institute of Sciences and other such organisations, to partner its research efforts. In addition, due to Bangalore being a renowned centre for Biotechnology research, access to suitable personnel, is improved.
Your Board is happy to inform you of the final acceptance by the European Patent Office of eleven claims in the Patent application filed by the Company leading to clearance of the patent application and publishing of the patent.
Efforts with the Companys application to the USPTO and the Indian Patent Office continues. It is hoped that these efforts will prove equally fruitful and the Company will get approvals for its patent applications filed.
The Company has also acquired 22 additional strains for a variety of Fatty Acids, 1 2 for Biofuels and 1 1 IPs, apart from technology for a new algal biofuel. With these, the Company underlines its focus to remain on Fatty Acids, Drug Discovery and Biofuels for the next decade.
However, in taking a prudent and cautious stand, the Management instead of foraying ahead on its own, believes that joint ventures and strategic alliances would be the model of choice for commercialising these technologies so as to share the risks intrinsic to new technology development.
Trading of Shares in the Stock Exchanges
The shares of the Company are listed in the Mumbai and Luxemburg stock exchanges. The shares of the Company are traded in the demat form.
The Company continues to follow the code of Corporate Governance during the year under review.
Your Company has not accepted any deposits from public during the year under review.
Dr.G. Subramanian, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
M/s. Pratapkaran Paul & Co., Chartered Accountants, Chennai, Auditors of the Company retire at the ensuing annual general meeting and a notice has been received under section 224(1 B) of the Companies Act, 1956 from them confirming their eligibility for reappointment
Your Directors place on record their appreciation of the sincere and dedicated services rendered by all the employees during the year under review.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm that:
- in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed.
- 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 as on 31st March, 2008 and of the Profit and Loss of the Company for that period.
-Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
- the annual accounts are prepared on a going concern basis
ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
Information in accordance with the provisions of Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy, Technology absorption and Foreign Exchange earnings and outgo are given below:
CONSERVATION OF ENERGY
Energy conservation is not applicable to the biotechnology industry.
RESEARCH AND DEVELOPMENT
Your Company has, during the year, been continuing its Research and Development activities of extracting bioactive compounds from microbes as well as development of formulations for nutrition and pharmaceuticals.
FOREIGN EXCHANGE EARNINGS
There was no foreign exchange earning during the year. (Previous Year: Nil)
FOREIGN EXCHANGE OUTGO
On account of import of goods - Nil. Foreign Travel - Nil.
The Board of Directors wishes to place on record its gratitude to Axis Bank Limited and the Department of
Science and Technology, Department of Bio-Technology and the other Institutions / Organizations / Agencies who have supported the company during the year.
For and on behalf of the Board of Directors
K. O. Isaac Chairman and Managing Director
Date : 7-9-2010 Place: Chennai