Notes to Accounts of Transgene Biotek Ltd.

Mar 31, 2024

q. Provisions

General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The company has made 100% provision for the investment made in the Transgene Biotek HK Limited (Subsidiary) for Rs. 92,20,09,728/- based on the documents provided to the company.

However, it came to be revealed, as per the statement by the management that entire GDR fund of USD 40.5 mil except for USD 0.6 mil received by the company was fraudulently siphoned out of its account at Investec Bank to entities such as M/s. Symmetric Sciences Inc etc. The management stated that it is pursuing the matter of recovering the entire amount of USD 39.9 mil lost from its account at Investec Bank taking help from different sources including an appeal to the Enforcement Directorate.

r. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery

of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the financial asset.

De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

i. The rights to receive cash flows from the asset have expired, or

ii. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay toa third party under a ''pass-through'' arrangement? And either

• the Company has transferred substantially all the risks and rewards of the asset, or

• the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Gains or losses on liabilities held for trading are recognised in the profit or loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

De-recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Reclassification of financial assets and liabilities

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets and financial liabilities. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

27. Contingent Liabilities:

a. Reference is made about the long standing case at CESTAT, Chennai and the Honourable Member Ms.Sulekha Beevi C.S passed an order on 25th May 2017 stating that "the matter is stayed by the Honhle High Court of Madras. Both sides have not been able to submit when the matters are likely to be disposed by the Hon''ble High Court. Viewed in this light, we are of the considered opinion that it would be appropriate and prudent to close the file for the purpose of statistics. Both sides are at liberty to file application before the Tribunal to reopen the matter as and when the case is disposed by the Hon''ble High Court or in the case of change of circumstances." In view of the above order, no provision has been made in the current balance sheet but the management shall keep a cautious eye on the potential developments, if any and will act as per the requirements.

b. During the year 2016-17 the Company had received notice u/s 263 from the Principal Commissioner of the Income Tax for the Assessment year 2012-13 for which the company has filed its arguments. The appeal filed against the Income tax demand for FY 2011-12 (AY 2012-13) has been accepted and demand has been nullified by the department with order dated 24/08/2021. The provision has been created through Retained earnings in previous years hence reversed it through the same. However, the

income tax department has filed appeal to high court against this order. Hence the demand amount of Rs.5.96 Crores is treated as contingent liability.

c. The Department of Biotechnology has sanctioned a loan amount of Rs.4.07 Crores under Small Business Innovative Research Initiative (SBIRI) scheme currently called as BIRAC for the novel technology Upgradation for Orlistat production, for which a charge against movable and immovable assets acquired from utilization of the said loan amount has been created. An amount of Rs.30,06,135/- is demanded by SIBRI towards interest for which a provision has been made. However, the company has made a settlement offer to BIRAC. On a condition that such offer upon acceptance an offer of Rs. 20 Lakhs made, which was encashed during the previous financial years. However, company is yet to receive any written acceptance towards their proposal.

30. Related Party Disclosures Related Parties:

a) Key Managerial Personnel:

Dr. K. Koteswara Rao: Managing Director

b) Subsidiaries

Transgene Biotek HK Limited: Wholly Owned Subsidiary

Peroral Bio Private Limited: Wholly owned Subsidiary (Closed during the FY 2023-24)

34. Standards issued and effective from 01^st April,2018 IND AS 115, Revenue from contracts with customers

In March 2018, the Ministry of Corporate Affairs has notified Ind AS 115, ''Revenue from Contracts with Customers'', which effective for accounting is periods beginning on or after 1 April 2018. This comprehensive new standard will supersede existing revenue recognition guidance, and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements Ind AS 115 is effective for annual reporting periods beginning on or after April 1, 2018. The Company intends to adopt Ind AS 115 effective April 1, 2018, using the modified retrospective method. The adoption of Ind AS 115 is not expected to have a significant impact on the Company''s recognition of revenues.

35. Other Amendments to Indian Accounting Standards:

The Ministry of Corporate Affairs (MCA), on 28 March 2018, issued certain amendments to Ind AS. The amendments relate to the following standards:

Ind AS 21, The Effects of Changes in Foreign Exchange Rates - The amendment lays down the principle regarding advance payment or receipt of consideration denominated or priced in foreign currency and recognition of non-monetary prepayment asset or deferred income liability.

Ind AS 12, Income Taxes - The amendment explains that determining temporary differences and estimating probable future taxable profit against which deductible temporary differences are assessed for utilization are two separate steps and the carrying amount of an asset is relevant only to determining temporary differences.

Ind AS 28, Investments in Associates and Joint Ventures - The amendment clarifies when a venture capital, mutual fund, unit trust or similar entities elect to initially recognize the investments in associates and joint ventures.

Ind AS 112, Disclosure of Interests in Other Entities - The amendment clarifies that disclosure requirements for interests in other entities also apply to interests that are classified as Held for sale or discontinued operations in accordance with Ind AS 105.

Ind AS 40, Investment Property - The amendment clarifies when a property should be transferred to / from investment property. The amendments are effective 1 April 2018. The Company believes that the aforementioned amendments will not materially impact the financial position, performance or the cash flows of the Company

36. Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies.

The areas involving critical estimates or judgements are:

• Estimated useful life of intangible asset.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances.

37. Financial Instruments

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (Unobservable inputs).

A. The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2024:

38. In the opinion of the Board of Directors of the company the value on realization of Current Assets in the ordinary course of business will not be less than the amount at which they have been stated in the Balance Sheet as on 31^st March, 2024.

39. Balances of Creditors, Debtors & Advances as on 31st March 2024 are subject to confirmation from the parties concerned.

40. Previous year figures have been regrouped and rearranged wherever necessary.

41. The figures have been rounded off to the nearest Rupee.

For Vasavi & Co For and on behalf of the board

Chartered Accountants M/s. Transgene Biotek Limited

F.R.N: 020965S

Sd/-

Vasavi Gollapudi Dr. K. KoteswaraRao Sujana kadiam

Proprietor Chairman& Managing Director Director

M.R.N: 249259 DIN: 02287235 DIN: 07167872

UDIN: 24249259BKHJNS6174 Place: Hyderabad Date: 30-05-2024

---

Mar 31, 2023

q. Provisions

General

Provisions are recognised when the Company has a present obligation (legal or constructive)as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.

The company has made 100% provision for the investment made in the Transgene BiotekHK
Limited (Subsidiary) for Rs. 92,20,09,728/- based on the documents provided to the company.

However, it came to be revealed, as per the statement by the management that entire GDR fund
of USD 40.5 mil except for USD 0.6 mil received by the company was fraudulently siphoned out of
its account at Investec Bank to entities such as M/s. Symetric Sciences Inc etc. The management
stated that it is pursuing the matter of recovering the entire amount of USD 39.9 mil lost from its
account at Investec Bank taking help from different sources including an appeal to the
Enforcement Directorate.

r. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and
afinancial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assetsnot
recorded at fair value through profit or loss, transaction costs that are attributable to
theacquisition of the financial asset. Purchases or sales of financial assets that require deliveryof
assets within a time frame established by regulation or convention in the market place(regular
way trades) are recognised on the trade date, i.e., the date that the Companycommits to
purchase or sell the financial asset.

De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar
financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet)
when:

i. The rights to receive cash flows from the asset have expired, or

ii. The Company has transferred its rights to receive cash flows from the asset or
hasassumed an obligation to pay the received cash flows in full without material delay
toa third party under a ''pass-through'' arrangement? Andeither

• the Company has transferred substantially all the risks and rewards of the asset,
or

• the Company has neither transferred nor retained substantially all the risks
andrewards of the asset, but has transferred control of the asset.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair valuethrough
profit or loss, loans and borrowings, payables, or as derivatives, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans andborrowings
and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and
borrowingsincluding bank overdrafts, financial guarantee contracts and derivative financial
instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments
entered into by the Company that are not designated as hedging instrumentsin hedge
relationships as defined by Ind AS 109. Gains or losses on liabilities held for trading are
recognised in the profit or loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measuredat
amortised cost using the EIR method. Gains and losses are recognised in profit or losswhen the
liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisitionand
fees or costs that are an integral part of the EIR. The EIR amortisation is included asfinance costs
in the statement of profit and loss.

De-recognition

A financial liability is derecognised when the obligation under the liability is discharged
orcancelled or expires. When an existing financial liability is replaced by another from thesame
lender on substantially different terms, or the terms of an existing liability aresubstantially
modified, such an exchange or modification is treated as the de-recognition ofthe original liability
and the recognition of a new liability. The difference in the respectivecarrying amounts is
recognised in the statement of profit or loss.

Reclassification of financial assets and liabilities

The Company determines classification of financial assets and liabilities on initial
recognition.After initial recognition, no reclassification is made for financial assets and financial
liabilities.If the Company reclassifies financial assets, it applies the reclassification
prospectivelyfrom the reclassification date which is the first day of the immediately next
reporting periodfollowing the change in business model. The Company does not restate any
previouslyrecognised gains, losses (including impairment gains or losses) or interest.

a. Reference is made about the long standing case at CESTAT, Chennai and the Honourable
Member Ms.Sulekha Beevi C.S passed an order on 25th May 2017 stating that "the matter is
stayed by the Hon''ble High Court of Madras. Both sides have not been able to submit when
the matters are likely to be disposed by the Hon''ble High Court. Viewed in this light, we are of
the considered opinion that it would be appropriate and prudent to close the file for the
purpose of statistics. Both sides are at liberty to file application before the Tribunal to reopen
the matter as and when the case is disposed by the Hon''ble High Court or in the case of
change of circumstances." In view of the above order, no provision has been made in the
current balance sheet but the management shall keep a cautious eye on the potential
developments, if any and will act as per the requirements.

b. During the year 2016-17 the Company had received notice u/s 263 from the Principal
Commissioner of the Income Tax for the Assessment year 2012-13 for which the company
has filed its arguments. The appeal filed against the Income tax demand for FY 2011-12 (AY
2012-13) has been accepted and demand has been nullified by the department with order
dated 24/08/2021. The provision has been created through Retained earnings in previous
years hence reversed it through the same. However, the income tax department has filed
appeal to high court against this order. Hence the demand amount of Rs.5.96 Crores is
treated as contingent liability.

c. The Department of Biotechnology has sanctioned a loan amount of Rs.4.07 Crores under
Small Business Innovative Research Initiative (SBIRI) scheme currently called as BIRAC for the
novel technology Upgradation for Orlistat production, for which a charge against movable
and immovable assets acquired from utilization of the said loan amount has been created. An
amount of Rs.30,06,135/- is demanded by SIBRI towards interest for which a provision has
been made. However, the company has made a settlement offer to BIRAC. On a condition
that such offer upon acceptance a offer of Rs. 20 Lakhs made, which was encashed during the
financial year. However company is yet to receive any written acceptance towards their
proposal.

30. Related Party Disclosures
Related Parties:

a) Key Managerial Personnel:

Dr. K. KoteswaraRao: Managing Director

b) Relatives to Key Managerial Personnel:

K. LaxmidharRao: Son of Managing director
K.NirmalaRao: Wife of Managing director
K. SrinivasaRao: Son of Managing Director

c) Subsidiaries

Transgene Biotek HK Limited: Wholly Owned Subsidiary
Peroral Bio Private Limited: Wholly owned Subsidiary

34. Standards issued and effective from 01^st April,2018
IND AS 115, Revenue from contracts with customers

In March 2018, the Ministry of Corporate Affairs has notified Ind AS 115, ''Revenue from Contracts
with Customers'', which effective for accounting is periods beginning on or after 1 April 2018. This
comprehensive new standard will supersede existing revenue recognition guidance, and requires an
entity to recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. The new standard also will result in enhanced disclosures about revenue,
provide guidance for transactions that were not previously addressed comprehensively (for
example, service revenue and contract modifications) and improve guidance for multiple-element
arrangements Ind AS 115 is effective for annual reporting periods beginning on or after April 1, 2018.
The Company intends to adopt Ind AS 115 effective April 1, 2018, using the modified retrospective
method. The adoption of Ind AS 115 is not expected to have a significant impact on the Company''s
recognition of revenues.

35. Other Amendments to Indian Accounting Standards:

The Ministry of Corporate Affairs (MCA), on 28 March 2018, issued certain amendments to Ind AS.
The amendments relate to the following standards:

Ind AS 21, The Effects of Changes in Foreign Exchange Rates - The amendment lays down the
principle regarding advance payment or receipt of consideration denominated or priced in foreign
currency and recognition of non-monetary prepayment asset or deferred income liability.

Ind AS 12, Income Taxes - The amendment explains that determining temporary differences and
estimating probable future taxable profit against which deductible temporary differences are
assessed for utilization are two separate steps and the carrying amount of an asset is relevant only
to determining temporary differences.

Ind AS 28, Investments in Associates and Joint Ventures - The amendment clarifies when a venture
capital, mutual fund, unit trust or similar entities elect to initially recognize the investments in
associates and joint ventures.

Ind AS 112, Disclosure of Interests in Other Entities - The amendment clarifies that disclosure
requirements for interests in other entities also apply to interests that are classified as Held for sale
or discontinued operations in accordance with Ind AS 105.

Ind AS 40, Investment Property - The amendment clarifies when a property should be transferred to
/ from investment property. The amendments are effective 1 April 2018. The Company believes that
the aforementioned amendments will not materially impact the financial position, performance or
the cash flows of the Company

36. Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by
definition, will seldom equal the actual results. Management also needs to exercise judgement in
applying the Company''s accounting policies.

The areas involving critical estimates or judgements are:

• Estimated useful life of intangible asset.

Estimates and judgements are continually evaluated. They are based on historical
experience and other factors, including expectations of future events that may have a
financial impact on the company and that are believed to be reasonable under the
circumstances.

37.Financial Instruments

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data
(Unobservable inputs).

38. In the opinion of the Board of Directors of the company the value on realization of Current
Assets in the ordinary course of business will not be less than the amount at which they have been
stated in the Balance Sheet as on 31^st March, 2023.

39. Balances of Creditors, Debtors & Advances as on 31st March 2023 are subject to confirmation
from the parties concerned.

40. Previous year figures have been regrouped and rearranged wherever necessary.

41. The figures have been rounded off to the nearest Rupee.

For ManishaDubey& Associates For and on behalf of the board

Chartered Accountants M/s. Transgene Biotek Limited

F.R.N: 010114S

Sd/- Sd/- Sd/-

ManishaDubey Dr. K. KoteswaraRao Sujana kadiam

Proprietor Chairman & Managing Director Director

M.R.N:212664 DIN:02287235 DIN:07167872

UDIN: 23212664BGZHJT6056

Place: Hyderabad
Date: 30-05-2023

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Mar 31, 2018

(C) Rights, preferences and restrictions attached to equity shares :

The Company has only one class of shares referred to as equity shares having a par value of Rs.10/- each. Each holder of one equity share is entitled to one vote per share.

In the event of the liquidation of the Company, the holders of shares shall be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However no such preferential amounts exists currently.

The amount distributed will be in proportion to the number of equity shares held by the shareholders.

Notes:

(i) Unsecured loans from others includes inter corporates.

(ii) Term loan from banks included loan from Union Bank of India settled during the year for a consideration of Rs. 2,52,18,322 including interest of Rs. 67,97,583 which have been accordingly treated in the books of account.

(iii) Term loan from other parties includes Department of Bio Technology (DBT), Ministry of Science and Technology are secured by the whole of movable and immovable properties acquired from the loan sanctioned by “the DBT under SBIRI scheme.

Notes:

(i) Current Provisions include:

- Rs. 22,26,171 of Statutory provisions payable to Government authorities.

- Rs. 74,03,730 on account of IT Demands raised by IT Dept, with respect to AY 2009-10 & AY 2013-14.

- Rs. 5,66,42,408 of Income tax provisions of earlier years.

(ii) Non-Current Provisions include 100% provision made against payment made to M/s. Symetric Sciences Inc utilized out of GDR proceeds which is also disclosed as Advances to others under Loans in Note No. 5.

Notes:

Under Ind AS, certain financial assets and financial liabilities are measured at mortised cost which involves the application of effective interest method. The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or financial liability. The interest unwinding is charged through profit and loss in subsequent period.

The company has a SIBRI loan of 10 years with 15% interest rate

37. Financial Instruments

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

A The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2018 :

Notes to the reconciliations

A As per IND AS 38 "Intangible Assets", Intangible Assets under construction should be shown under separate head "Intangible Assets under development".

B. As per IND AS 109 "Financial Instruments" Financials Assets & Financial liabilities arising out of similar events shall show with a net effect.

C. As per IND AS 109 "Financial Instruments" An instrument satisfying the definition of ither financial asset or financials liability, shall be disclosed separately under the respective head

D As per IND AS 109 "Financial Instruments" Government grants shall be shown at amortized cost.

1. Critical estimates and judgments

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the Company''s accounting policies.

The areas involving critical estimates or judgments are :

- Estimated useful life of intangible asset.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances. 39. In the opinion of the Board of Directors of the company the value on realization of Current Assets in the ordinary course of business will not be less than the amount at which they have been stated in the Balance Sheet as on 31st March, 2018.

2. Balances of Creditors, Debtors & Advances as on 31st March 2018 are subject to confirmation from the parties concerned.

3. Previous year figures have been regrouped and rearranged wherever necessary.

4. The figures have been rounded off to the nearest Rupee.

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Mar 31, 2015

1. Previous year figures have been regrouped and reclassified, wherever necessary according to the groupings and classifications are made for the current financial year.

2. Contingent Liabilities are not provided for in respect of

(Rs. In Lacs) 2014 - 15 2013 - 14

(i) Customs Duty Demands disputed by the Company 59.37 59.37

(ii) Claims against the company not acknowledged as debts 40.00 40.00

During the year one of the Employee of the Company sustained severe burns in a fire incident in the Company. The Company helped him financially for hospitalization and treatment after which he was discharged from the hospital. However, after the discharge, for some unknown reasons he contracted infection and died while being treated for that. His family approached Labour Court claiming an unspecified amount for his death from the Company. No amount is provided for in books of account for the same as the Company is not sure of the liability.

3. The Department of Biotechnology has sanctioned a loan amount of Rs.4.09 crores under Small Business Innovative Research Initiative (SBIRI) scheme for the novel technology upgradation of oralstat research, for which a charge against movable and Immovable assets acquired from utilization of the said loan amount has been created. SBIRI has demanded an interest of Rs 35,47,901/- for which a provision has been made though the management is yet to ascertain the actual liability of the company in this regard .

4. The company has made 100% provision for the investment made in the Transgene Biotek HK Limited (Subsidiary) for Rs. 92,20,09,728/-in the wake of the Auditors report of the Wholly Owned Subsidiary. Further, 100% provision is made against payment made to M/s. Symetric Sciences Inc utilized out of GDR proceeds. This is without prejudice to the company's claim in this regard.

5. The following are the Related Party Disclosures as per the AS-18 as notified under the Companies Act 2013.

6. In the opinion of the Board, current assets, loans and advances are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Balances of sundry debtors, sundry creditors, loans and advances, and other parties are subject to independent confirmation from the respective parties.

7. Additional information pursuant to Part II of Schedule VI to the Companies Act, 1956 to the extent relevant.

8. The Company is engaged in Diagnostic Services and trading of Bulk Drugs which as per accounting standard (AS) 17 is considered as business segments.

9. Periodically the Company evaluates all customers due to the company for collectables. The need for provisions is assessed based on the various factors including collectables of specific dues, risk perceptions of the industry in which the customers operate, and general economic factors, which could affect the customer's ability to settle.

10. Notes forming integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.

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Mar 31, 2014

1. Previous year figures have been regrouped and reclassified according to the groupings and Classifications made for the current financial year.

2. Contingent Liabilities are not provided for in respect of

(Rs. In Lacs) 2013-14 2012-13

(i) Customs Duty Demands disputed by the Company 64.42 64.42

(ii) Claims lodged against the Company 40.00 40.00

3. Contracts remaining to be executed on Capital Account are Rs. 8705.73 Lakhs (Previous year Rs.8705.73 Lakhs).

4. The Department of Biotechnology has sanctioned a loan amount of Rs.4.09 crores under Small Business Innovative Research Initiative (SBIRI) scheme for the novel technology up gradation of orilstat research, for which a charge against movable and Immovable assets acquired from utilization of the said loan amount has been created.

5. During the year the company has made 100% provision for the investment made in the Transgene Biotek HK Limited (Subsidiary) for Rs. 92,20,09,728/- in the wake of the Auditors report of the Wholly Owned Subsidiary. Further, 100% provision is made against to M/s. Symetric Sciences Inc utilized out of GDR proceeds.The corresponding Forex Reserve created against this advance as per AS 11 was also suitably adjusted.

6. The following are the Related Party Disclosures as per the AS-18 as notified under the Companies Act 1956.

A) KEY MANAGEMENT PERSONNEL :

Dr. K. Koteswara Rao : Managing Director

Transgene Biotek HK Limited : Wholly owned subsidiary

7. In the opinion of the Board, current assets, loans and advances are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Balances of sundry debtors, sundry creditors, loans and advances, and other parties are subject to independent confirmation from the respective parties.

8. Additional information pursuant to Part II of Schedule VI to the Companies Act, 1956 to the extent relevant.

Particulars of Capacities and Production

9. Periodically the Company evaluates all customers due to the company for collectables. The need for provisions is assessed based on the various factors including collectables of specific dues, risk perceptions of the industry in which the customers operate, and general economic factors, which could affect the customer''s ability to settle.

10. Notes 2 to 25 form integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.

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Mar 31, 2013

A. Basis of preparation of financial statements:

The accompanying financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accruals basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India (ICAI), the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied and management evaluates all recently issued or revised accounting standards on an ongoing basis.

1 Previous year figures have been regrouped and reclassified according to the groupings and Classifications made for the current financial year.

2. Contingent Liabilities are not provided for in respect of

(Rs.. In Lacs)

2012 – 13 2011-12

(i) Customs Duty Demands disputed by the Company 64.42 64.42

(ii) Claims lodged against the Company 40.00 40.00

3. Contracts remaining to be executed on Capital Account are Rs. 8705.73 Lakhs (Previous year Rs.8705.73 Lakhs).

4. The Department of Biotechnology has sanctioned a loan amount of Rs.4.09 crores under Small Business Innovative Research Initiative (SBIRI) scheme for the novel technology up gradation of orilstat research, for which a charge against movable and Immovable assets acquired from utilization of the said loan amount has been created.

5. The following are the Related Party Disclosures as per the AS-18 as notified under the Companies Act 1956. A) KEY MANAGEMENT PERSONNEL:

Dr. K. Koteswara Rao : Managing Director

Transgene Biotek HK Limited : Wholly owned subsidiary

6. In the opinion of the Board, current assets, loans and advances are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Balances of sundry debtors, sundry creditors, loans and advances, and other parties are subject to independent confirmation from the respective parties.

7. Additional information pursuant to Part II of Schedule VI to the Companies Act, 1956 to the extent relevant. Particulars of Capacities and Production

8. The Company had in the earlier years, recognized Forex Gain on Capital Advances under other Income and was passed through Profit & Loss Account. During the year under review, the management had, considered the same as Exceptional item and this being a non-monetary item, categorized under "Exchange Translation Reserve" under the head "Reserves & Surplus". The impact due to change in the Accounting Policy is Rs. 1308.33 Lakhs.

9. Periodically the Company evaluates all customers due to the company for collectables. The need for provisions is assessed based on the various factors including collectables of specific dues, risk perceptions of the industry in which the customers operate, and general economic factors, which could affect the customer''s ability to settle.

10. Notes 1 to 26 form integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.

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Mar 31, 2012

The Company has only one class of shares referred to as equity shares having a par value Rs.10. Eac holder of one equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holders of shares shall be entitled to receive any of tt remaining assets of the Company, after distribution of all preferential amounts. However no such preferenti amounts exist currently. The amount distributed will be in proportion to the number of equity shares he by the shareholders. '

** Term loans are secured by first pari passu charge on all the present and future fixed assets both movable and immovable and immovable property of the Company.

** Term loan from Department of Bio Technology (DBT), Ministry of Science and Technology are secured by the whole of movable and immovable properties acquired from the loan sanctioned by the DBT under SBIRI scheme.

1. Previous year figures have been regrouped and reclassified according to the groupings and classifications made for the current financial year.

2. Contingent Liabilities are not provided for in respect of

Rs. In Lakhs

2011 - 12 2010 - 11

Customs Duty Demands disputed by the Company 64.42 64.42

Claims lodged against the Company 40.00 40.00

The Company had deposited an amount of Rs. 40,00,000 with the Registrar of AP High Court, as per the directions of Hon'ble High Court of Andhra Pradesh in the case filed against the Company " and the same is covered in Note No. XI

3. Contracts remaining to be executed on Capital Account are Rs.8,705.75 Lakhs (Previous year Rs. 6,326.79 Lakhs).

4. GDR's Issue:

During the year the Company has issued 25,00,000 Global Depository Receipts (GDR) at a price of US$.7.0 per GDR on 3rd October, 2011, where one GDR represents 10 equity shares of Rs.10 each of the Company. The Company has received in aggregate US$ 1,75,00,000 equivalent to Rs.86.50 Crores which has been appropriated towards equity share capital of Rs.25,00,00,000 and Rs.61,50,00,000 as Securities premium. The expenses incurred in connection with the GDR issue of Rs.2,74,21,69§/- has been appropriated against the Premium received.

Usage of GDR proceeds:

The Company intends to use net proceeds from the issue of GDR's towards expansion of the present business activities of the Company; augmenting long term working capital and any other use as may be permitted under applicable law or regulations from time to time.

Out of net proceeds, an amount of US$ 1,69,52,000 equivalent toRs.86,72,04,98§/- has been paid as advances for acquiring new drug technologies and getting clinical technology services from technology/strategic partners abroad, through the Wholly owned subsidiary Company, M/s Transgene Biotech HK Limited, Hong Kong.

The Company intends to use the GDR issue proceeds in the following manner.

i. Research and Development of various products of the Company Viz, APIs, Vaccines,

ii. To carry out the Pre-Clinical / Clinical Trials for several novel Biotech Products in the pipe line,

iii. Setting up of new manufacturing facilities, expanding and modernizing existing manufacturing facilities In India,

iv. For establishMig manufacturing facilities outside India for the production of APIs and Bio Ted Proaucts...etc.

v. Process innovation and Process optimization

vi. Acquisition of Companies and Technologies domestic and overseas

vii. Working Capital Requirements of the Company.

As on the date of these notes, the filing of the relevant documents/forms to the Reserve Bank of India is yetto be done and the Company is in the process of doing the same.

5. The Department of Biotechnology has sanctioned a loan amount of Rs. 4.09 Crores under Small Business Innovative Research Initiative (SBIRI) scheme for the novel technology up gradation of orilstat research, for which a charge against movable and Immovable assets acquired from utilization of the said loan amount has been created for the financial year 2010-11.

6. The following are the Related Party Disclosures as per the AS-18 as notified under the Companies Act 1956.

7. In the opinion of the Board, current assets, loans and advances are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Balances of sundry debtors, sundry creditors, loans and advances, and other parties are subject to independent confirmation from the respective parties.

8. Additional information pursuant to the Companies Act, 1956 to the extent relevant. Particulars of Capacities and Production

9. The Company is engaged in Diagnostic Services and trading of Bulk Drugs which as per accounting standard (AS) 17 is considered the business segments.

10. Periodically the Company evaluates all customers due to the company for collectables. iheneeaTor provisions is assessed based on the various factors including collectables of specific dues, risk perceptions of the industry in which the customers operate, and general economic factors, which could affect the customer's ability to settle.

11. Schedules I to XXVI form integral part of the Balance Sheet and Profit and Loss Account and have been duly authenticated.

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Mar 31, 2011

1. Previous year figures have been regrouped and reclassified according to the groupings and Classifications made for tire current financier year.

2. Contingent Liabilities are not provided for in respect of

(Rs. In lacs)

2010-11 2009-10

(i) Customs Duty Demands disputed by the Company 64.42 64.42

3. Contracts remaining to be executed on Capital Account are Rs.63, 26, 79,912. (Previous year Rs. NIL).

4. GDR's Issue:

During the year the Company has issued 25 Lakhs Global Depository Receipts (GDR) at a price of US$.9.2 per GDR on 22nd February, 2011, where one GDR represents 10 equity shares of Rs.10 each of the Company. The Company has received in aggregate US$2.3 Crores equivalent to Rs.103.96 Crores which has been appropriated towards equity share capital of Rs.25 Crores and Rs.78.96 Crores as Securities premium. The expenses incurred in connection with the GDR issue of Rs.4,53,85,803/- has been appropriated against the Premium received.

Usage of GDR proceeds:

The Company intends to use net proceeds from the issue of GDR's towards expansion of the present business activities of the Company; augmenting long term working capital and any other use as may be permitted under applicable law or regulations from time to time.

Out of net proceeds, an amount of US$.1,40,00,129.58 equivalent to Rs.62,51,05,786/- has been utilized as advances for acquiring new drug technologies and getting clinical technology services from technologystrategic partners abroad and Rs.2,71,73,660/- for working capital requirement purposes in India and the remaining balance of US$.74,79,805.58 equivalent to Rs.33,39,73,718 is with non-scheduled bank in abroad for future requirements.

The Company intends to use the GDR issue proceeds in the following manner...

a. Research and Development of various products of the Company viz, APIs, Vaccines,

b. To carry out the Pre-Clinical / Clinical Trials for several novel Biotech Products in the pipe line,

c. Setting up of new manufacturing facilities, expanding and modernizing existing manufacturing facilities in India,

d. For establishing manufacturing facilities outside India for the production of APIs and Bio-Tech Products, ...etc

e. Process innovation and Process optimization

f. Acquisition of Companies and Technologies domestic and overseas

g. Working Capital Requirements of the Company.

5. The Department of Biotechnology has sanctioned a loan amount of Rs.4.09 crores under Small Business Innovative Research Initiative (SBIRI) scheme for the novel technology up gradation of orilstat research, for which a charge against movable and Immovable assets acquired from utilization of the said loan amount has been created.

6. The following are the Related Party Disclosures as per the AS-18 as notified under the Companies Act 1956.

A) KEY MANAGEMENT PERSONNEL:

Dr. K. Koteswara Rao : Managing Director

Mr.P.Narayana Murthy : Director

7. In the opinion of the Board, current assets, loans and advances are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Balances of sundry debtors, sundry creditors, loans and advances, and other parties are subject to independent confirmation from the respective parties.

8. Additional information pursuant to Part II of Schedule VI to the Companies Act, 1956 to the extent relevant.

9. Periodically the company evaluates all customers due to the company for collectables. The need for provisions is assessed based on the various factors including collectables of specific dues, risk perceptions of the industry in which the customers operate, and general economic factors, which could effect the customer's ability to settle.

10. Schedules I to XVIII form integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.

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Mar 31, 2010

1. Contingent Liabilities are not provided for in respect of

(Rs. In Lacs)

2009-10 2008-09

(i) Customs Duty Demand disputed 64.42 5.05 by the Company

2. Contracts remaining to be executed on Capital Account for the current year are nil. (Previous year NIL).

3. The following are the requirements under the Related Party Disclosures as per the AS-18 issued by the Institute of Chartered Accountants of India.

4. Statement of Particulars of employees pursuant to the provisions of the Section 217 (2A) of the Companies act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended up to date are not provided as there are no employees who are in receipt of the amounts prescribed under the said section Nil. Previous Year - Nil.

5. In the opinion of the Board, current assets, loans and advances are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Independent confirmation of balances of sundry debtors, sundry creditors, loans and advances, and other parties are in progress on date of this report.

6. Additional information pursuant to Part II of Schedule VI to the Companies Act, 1956 to the extent relevant.

7. Deferred Tax Liability or Asset has not been provided, as per AS - 22, as in the Financial Statements the Company has huge accumulated losses and there is no probability of tax liabilities arising during the year and in the coming years.

8. The company is engaged in providing Technology Outsourcing Services, Diagnostic Services and producing Tissue culture Plants which as per accounting standard (AS) 1 7 is considered the business segments.

9. Periodically the company evaluates all customers due to the company for collectables. The need for provisions is assessed based on the various factors including collectables of specific dues, risk perceptions of the industry in which the customers operates, and general economic factors, which could effect the customers ability to settle.

10. Schedules I to XV form integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.