Dr Habeebullah Life Sciences Ltd.
|BSE: 539267||Sector: Others|
|NSE: N.A.||ISIN Code: INE579N01018|
|BSE 12:29 | 19 Feb||46.05||
|NSE 05:30 | 01 Jan||Dr Habeebullah Life Sciences Ltd|
Dr Habeebullah Life Sciences Ltd. (DRHABEEBULLAH) - Director Report
Company director report
The Directors present their Report together with the Company's financial statements forthe year ended 31st March 2017.
The performance of the Company is as follows:
TRANSFER TO RESERVES
In view of the losses incurred by the Company during the year the Board of Directorsdid not propose to transfer any amount to reserves for the period under review.
The Company in its revival proposes no dividend for the year.
The Company has not accepted any deposits falling within the meaning of Sec. 73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the Financial Year under review.
During the year the Authorized Share Capital of the Company was increased from INR60000000/- divided into 6000000 Equity Shares of INR 10/- to INR 130000000/-divided into 13000000 Equity Shares of INR 10/- each.
The Company has allotted 4870606 Equity Shares on Preferential Basis through StockSwap (83:100) to certain existing shareholders of Krisani Bio Sciences Private Limited onThursday 13th October 2016; making KBSPL as 51.3% Subsidiary of the Company.Thus the Paid up Capital of the Company has increased from INR 53881000/- divided into5388100 Equity Shares of INR 10/- each to INR 102587060/- divided into 10258706Equity Shares of INR 10/- each.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF REPORT
OPEN OFFER CHANGE IN SHAREHOLDING AND MANAGEMENT OF THE COMPANY
The Company has undergone re-structuring in terms of Capital Change in PromotersShareholding and Change in Management of the Company. The details are as under:
a) On Wednesday August 24 2016 the Board of Directors of the Company approved aPreferential Allotment of 4870606 Equity Shares (47.48% of Paid Up Capital) on SWAPBasis to specific Shareholders of Krisani Bio-Sciences Private Limited (83:100 i.e. forEvery 100 Equity Shares held by the Shareholders of Krisani Bio-Sciences Private Limited83 Equity Shares of PC Products India Limited were allotted).
Out of 4870606 Equity Shares 2582130 Equity Shares were allotted to the presentPromoters of the Company i.e. Mr. K. Krishnam Raju (Acquirer 3) and balance 2288476Equity Shares to the PAC's of Mr. K. Krishnam Raju (PAC's: Mrs. K. Sarada Vijaya Kumari(PAC 1) Mrs. K. Nirusha (PAC 2) and Mrs. P. Parvathi (PAC 3); pursuant to Section 62 andother applicable provisions of Companies Act 2013 and SEBI (ICDR) Regulations 2009.
Pursuant to the Preferential Allotment Krisani Bio Sciences Private Limited has becomethe Subsidiary of the Company holding 51.30% of its Equity.
b) On Wednesday 24th August 2016 Mr. Arun Kumar Bhangadia (Ex/PastPromoter of the Company) has entered into a Share Purchase Agreement with the Acquirers toOpen Offer and Present Promoters of the Company - Dr. Mohammed Aejaz Habeeb (Acquirer 1)Dr. Syed Ameer Basha Paspala (Acquirer 2) and Mr. K. Krishnam Raju (Acquirer 3) for Saleof 2100000 Equity Shares.
Upon completion of the aforementioned Preferential Allotment of Equity Shares andpursuant to Share Purchase Agreement; Dr. Mohammed Aejaz Habeeb (Acquirer 1) Dr. SyedAmeer Basha Paspala (Acquirer 2) Mr. K. Krishnam Raju (Acquirer 3) Mrs. Kalidindi SaradaVijaya Kumari (PAC 1) Mrs. K. Nirusha (PAC 2) and Mrs. P. Parvathi (PAC 3) has triggeredOpen Offer under Regulation 3(1) and 4 of SEBI (Substantial Acquisition of Shares andTakeovers) Regulations 2011 as amended from time to time.
The Tendering Period of Open Offer was Tuesday 22th November 2016 toMonday 05th December 2016.
Post Open Offer the holding of the New Promoters - Dr. Mohammed Aejaz Habeeb (Acquirer1) Dr. Ameer Basha Paspala (Acquirer 2) Mr. K. Krishnam Raju (Acquirer 3) Mrs. K.Sarada Vijaya Kumari (PAC 1) Ms. K. Nirusha (PAC 2) and Mrs. P. Parvathi (PAC 3) is7629030 Equity Shares (74.37% of Paid-Up Capital).
Dr. Mohammed Aejaz Habeeb (Acquirer 1) Dr. Syed Ameer Basha Paspala (Acquirer 2) Mr.K. Krishnam Raju (Acquirer 3) Mrs. K. Sarada Vijaya Kumari (PAC 1) Ms. K. Nirusha (PAC2) and Mrs. P. Parvathi (PAC 3) have also acquired control over the affairs and managementof the Company w.e.f. Tuesday 27th December 2016 and were classified as NewPromoters of the Company as per Regulation 31(A) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and within the meaning definition of Promoteras defined in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 asamended from time to time.
Post Open Offer and as per the Share Purchase Agreement; the Ex/Past Promoter Mr. ArunKumar Bhangadia was re-classified under Public Category with his balance Equity Shares -826800 Equity Shares (8.06% of Paid Up Capital).
The Company has changed its Main Objects clauses during the year under review throughPostal Ballot. The Company is into the business of Bio-Pharma and has also entered intothe following areas:
New Drug Discovery including New Molecular Entity (NME - Pro Drug)
Clinical Research Organization (CRO) related activities
Stem Cell - Lab Research and Therapy
Research and Development in Bio-technology
Consultancy Division and Pharmacy
Academic Services like Courses / Lectures / Seminars on Biotechnology PharmaStem Cell Research and therapy Clinical Research and animal studies etc.
Nutraceuticals product development
Trading exporting and importing of medicinal drugs chemicals re-agents etc.
During the year the Company had entered into a Collaborative Agreement with KrisaniBio Sciences Private Limited for further development of NASH (Fatty Liver) Molecule andWilson Disease Molecule on revenue sharing basis and also entered into a CollaborativeAgreement with Centre For liver Research And Diagnostics (CLRD) to use their land building equipment and other facilities to run our business of Hospital DiagnosticsPharmacy Stem cell and other bio-technology laboratories on revenue sharing basis.
REPORT ON SUBSIDIARIES
During the Year under review the Company has acquired one Subsidiary - Krisani BioSciences Private Limited India.
The Consolidated Financial Statements of the Company including its subsidiary have beenprepared in accordance with Section 129(3) of the Companies Act 2013. Further astatement containing salient features of the financial statements of the subsidiaries inthe prescribed format Form AOC-1 is appended as Annexure I to the Director's Report. Thestatement also provides details of performance and financial position of the subsidiary.
As required under Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the website
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Securities Exchange Board of India vide its Adjudication Order EAD-5/SVKM/AO/21/2017-18] dated 17th May 2017 has imposed a penalty of INR 400000 on theCompany for non-compliance of provisions of Regulation 8(3) of SEBI (SubstantialAcquisition of Shares and Takeovers) Regulations 1997 within the due date during theyears 2004 to 2011 at Ahmedabad Stock Exchange Bangalore Stock Exchange and Madras StockExchange where its shares were listed. The Company has paid the Penal Amount of INR400000/- on Monday 29th May 2017 to Securities Exchange Board of Indiatowards the Adjudication order.
Except above there are no significant and material orders passed by the Regulatoryauthorities or Courts which effects the nature of the business of the company.
DETAILS OF BOARD OF DIRECTORS / KEY MANANGERIAL PERSONNEL
The Board of Directors of your Company comprises of 6 (SIX) Directors as on the date ofthis report representing the optimum blend of professionalism knowledge and having variedexperience in different discipline of corporate functioning. Of these 1 (ONE) is PromoterExecutive Director 2 (TWO) are Promoter Non-Executive Directors and 3 (THREE) areIndependent Non Executive Directors.
Change in Designation
Pursuant to the Open Offer and Share Purchase Agreement dated Wednesday 24thAugust 2016; entered by Mr. Arun Kumar Bhangadia (Ex/Past Promoter of the Company) of theCompany with the Acquirers & PACs (Present Promoter Group); the following members ofthe Board have resigned from their respective positions from the close of business hoursof Tuesday 27th December 2016:
1. Mr. Arun Kumar Bhangadia
2. Mr. Devender Kumar Rathi
3. Mr. Bellam Praveen
4. Ms. Nishita Kalantri
5. Mr. Bonthu Pardhasara
Mr. Anil Kumar Munjal Chief Financial Officer of the Company also resigned from theBoard from close of business hours of Tuesday 27th December 2016 due to hispersonal pre-occupations.
The Board placed on record the valuable services rendered by them during their tenureof office.
Retirement by rotation
Pursuant to provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. K. Krishnam Raju(DIN 00874650) is liable to retire by rotation at the ensuing 21st AnnualGeneral Meeting and being eligible offers himself for reappointment to the office ofdirectorship. Your Board of Directors recommend his re-appointment
The Present Board of Directors were appointed w.e.f. Tuesday 27th December2016 and the Change in Board / management and re-classification of Promoters was approvedby the Shareholders through Postal Ballot dated Wednesday 8th February 2017.
The Board of Directors duly met 9 (Nine) times in the Financial Year 2016-2017 on27/05/201630/07/2016 17/08/201624/08/201602/09/201613/10/201614/11/201627/12/2016and 14/02/2017.
Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Section 173(1) of Companies Act 2013 and Regulation 17(2) SEBI (LODR) Regulations2015.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have given a declaration that they met the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 read with therules made thereunder and Regulation 16(1)(b) of SEBI(LODR)Regulations 2015.
PERFORMANCE EVALUATION NOMINATION & REMUNERATION POLICY
Pursuant to the provisions of Companies Act 2013 read with the rules made thereunderand SEBI (LODR) Regulations 2015 the performance evaluation of individual DirectorsBoard and its Committees was carried out.
The requisite details as required by Section 134(3) Section 178(3) & (4) ofCompanies Act 2013 and Regulation 34(2) of SEBI (LODR) Regulations 2015 is provided inthe Corporate Governance Report.
Performance evaluation Nomination and Remuneration Policy is attached as Annexure 2 toCorporate Governance Report and the same is available on the website of the Company underInvestors Tab www.DCproductslimited.com .
The Company at its various meetings held during the Financial Year 2016-17 hadfamiliarized the Independent Directors with regard to their roles rightsresponsibilities in the Company nature of the industry in which the Company operates thebusiness models of the Company and future outlook etc. They are made to Interact withsenior management personnel and are given all the documents reports and internal policiessought by them for enabling a good understanding of the Company its various operationsand the industry of which it is a part of will enable the Directors to contributesignificantly to the Company. Periodic updates are made at the Board and CommitteeMeetings on business and performance of the Company business strategy relevant statutorychanges and important amendments are provided to the Directors.
Details of familiarization programs extended to the Independent Directors during theyear are also disclosed on the Company website of the Company under Investors Tab
EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board of Directors has carried out an annual evaluation of its own performanceand that of its Committees and individual Directors. The performance of the BoardCommittees and individual Directors was evaluated by the Board seeking inputs from all theDirectors and chairperson. The performance of the Committees was evaluated by the Boardseeking inputs from the Committee members and chairperson. The same was done throughevaluation forms.
The criteria for performance evaluation of the Board include aspects like contributionof the board to the development strategy contribution of the board to ensure robust andeffective risk management composition of the board and its committees right balance ofknowledge and skills to maximize performance Board response to any problems or crisisthat arose matters specifically reserved for the board Board communication with themanagement team employees and others updating to the Board with the latest developmentsin the regulatory environment and the market Conduct of Board Meetings at suitablelength management response to the Board receipt of timely information by the Board etc.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the Financial Year 2016-17.
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013and to the best of their knowledge and ability In terms of Section 134(3)(c) of theCompanies Act 2013 Your Directors confirm as under:
(i) In preparation of the annual accounts for the financial year ended March 31 2017the applicable accounting standards have been followed and there were no materialdepartures from prescribed accounting standards;
(ii) We have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;
(iii) We have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(iv) We have prepared the annual accounts on a going concern basis;
(v) We have laid down internal financial controls which are adequate and are operatingeffectively; and
(vi) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
STOCK EXCHANGE LISTING
The Company has its Equity Shares listed on BSE Limited Metropolitan Stock Exchange ofIndia Limited and Ahmedabad Stock Exchange Limited.
The Annual Listing Fees (BSE MSEI and ASE) and Annual Custodian Fees (NSDL CDSL)have been paid by the Company for the Financial Year 2016-17.
STATUTORY AUDITORS & AUDITORS REPORTS
At the 19th Annual General Meeting held on Wednesday 16thSeptember 2015 M/s. N.M. Khatavkar & Co. Chartered Accountants Hubli; wereappointed as Statutory Auditors of the Company to hold office till the conclusion ofAnnual General Meeting to be held in the Year 2020; subject to ratification by the Membersat every Annual General Meeting.
In terms of First proviso to section 139 of the Companies Act 2013 the appointment ofauditors shall be placed for ratification at every Annual General Meeting. Accordinglythe appointment of M/s. N.M. Khatavkar & Co. Chartered Accountants Hubli; asStatutory Auditors of the Company is placed for ratification by the Shareholders.
The Auditors have submitted their written consent that they are eligible and qualifiedto be re-appointed as Statutory Auditors of the Company in terms of Section 139 of theCompanies Act 2013 and also satisfy the criteria provided in Section 141 of the CompaniesAct 2013. Accordingly the Board recommends ratification of the appointment of M/s. N.M.Khatavkar & Co. Chartered Accountants as the Statutory Auditors of the Company at theensuing 21st Annual General Meeting.
There are no qualifications reservation adverse remarks or disclaimer made by theStatutory Auditors in their Report. The Company has received audit report with unmodifiedopinion for both standalone and consolidated audited financial results of the Company forthe Financial Year ended March 312017 from the statutory auditors of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. S. S. Reddy &Associates Practicing Company Secretaries was appointed to undertake the SecretarialAudit of the Company for the Financial Year 2016-17. There are no reservationqualifications or adverse remarks or disclaimer made by the Secretarial Auditor in theReport.
The Secretarial Audit Report in Form MR 3 is annexed herewith as Annexure II to thisreport.
DISCLOSURE ABOUT COST AUDIT Cost Audit is not applicable to your Company.
Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts)Rules 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board andits Powers) Rules 2014; M/s. Rathi & Co. Chartered Accountants were appointed asInternal Auditors of the Company for the Financial Year 2016-17.
M/s. Rathi & Co. Chartered Accountants have submitted their resignation and thusfor the Financial Year 2017-18 the Company has appointed Mr. P.V. Srikanth Partner ofM/s. Tungala & Co. Chartered Accountants as Internal Auditors of the Company.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure III of the Board's Report.
PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) of the Act read with Rule 5(1) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedis annexed as Annexure IV to this report.
The information required under Rule 5 (2) and (3) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure IV formingpart of the Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Particulars of Loans Guarantees and Investments made by the Company covered underthe provisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements provided in this Annual Report.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY: The operations of the Company involve low energyconsumption. However adequate measures have been taken to conserve energy whereverpracticable.
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
The Company continues to use the latest technologies for improving the quality of itsoperations.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO: Further the company did not have any foreignexchange earnings or outgo during the year.
Hence no information pursuant to Section 134 (3)(m) of the Companies Act 1956 readwith Disclosure of particulars in the report of Board of Directors Rules 1988 and Rule 8of Companies (Accounts) Rules 2014 is provided.
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM
The Company has in place adequate internal financial controls commensurate with thesize and needs of the business. These controls ensures the orderly and efficient conductof its Business including adherence to the Company's policies identification of areas ofimprovement safeguarding of its assets from unauthorized use the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand timely preparation of reliable financial statements and / or disclosures.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy framed to deal with instance of Fraud andMis-Management if any in the Group pursuant to the provisions of section 177(9) &(10) of the Companies Act 2013 and Regulation 22 & 34 (3) of SEBI (LODR) Regulations2015. The details of the Policy are posted on the website:
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSALACT 2013
The Company has in place an anti-sexual harassment policy in line with the requirementsof the Sexual Harassment of Women at the work place (Prevention Prohibition andRedressal) Act 2013. All Employees (Permanent Contractual temporary Trainees) arecovered under this policy. There were no case of sexual harassment reported during theyear under review.
CORPORATE SOCIAL RESPONSIBILITY
Your Company does not meet applicable requirements i.e.net worth of INR 500 Crore ormore or turnover of INR 1000 Crore or more or a net profit of INR 5 Crore as specifiedin section 135 of the Companies Act 2013 relating to Corporate Social Responsibility.Hence the Company did not constitute Corporate Social Responsibility Committee and did notadopt any Corporate Social Responsibility Policy
The Company process is in place to ensure that all the Current and Future MaterialRisks of the Company are identified assessed/quantified and effective steps are taken tomitigate/ reduce the effects of the risks to ensure proper growth of the business.Shareholders are also requested to refer a separate section on Internal Control systemsand their adequacy which also deals with Risk Management in Management Discussion andAnalysis Report.
PARTIC ULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company has formulated a Policy on dealing with Related Party Transactions. ThePolicy is disclosed on the website of the Company under Investors Tab
The information relating to particulars of contracts or arrangements with relatedparties referred to in sub Section (1) of section 188 of the Companies Act 2013 in FormAOC-2 is annexed as Annexure V forming part of this Report.
Mr. K. Krishnam Raju Executive Chairman of the Company have provided ComplianceCertificate which is annexed as Annexure VI to the Board in accordance with Regulation17(8) read with Part B of Schedule II of the SEBI (LODR) Regulations 2015 for theFinancial Year ended 31st March 2017.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under Regulation 34(2) of SEBI (LODR) Regulations 2015 forms part of theAnnual Report.
Your Company is committed to maintain the prescribed standards of Corporate Governanceand has taken adequate steps to adhere to all the stipulations laid down Listing Agreementand SEBI (LODR) Regulations 2015.
A separate report on Corporate Governance and a Management Discussion and AnalysisReport is being presented as part of the Annual Report.
Mr. S. Sarveswar Reddy Company Secretary in Practice has certified that conditions ofCorporate Governance as stipulated under SEBI (LODR) Regulations 2015 have been compliedby your Company and his Certificate is annexed as Annexure VII to this Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. The Company has not accepted any deposits from the public or otherwise in terms ofSection 73 of the Companies Act 2013 read with the rules made thereunder and as such noamount on account of principal or interest thereon on deposits from public was outstandingas on the date of Balance Sheet.
b. Issue of Equity Shares with differential rights as to dividend voting or otherwise.
c. The Auditors have not responded to any matter under Section 143(12) of the CompaniesAct 2013 and therefore no details are required to be disclosed under Section 134(3)(ca)of the Act.
d. The Company does not meet applicable requirements i.e. net worth of INR 500 Crore ormore or turnover of INR 1000 Crore or more or a net profit of INR 5 Crore or more asspecified in section 135 of the Companies Act 2013 relating to Corporate SocialResponsibility. The Company's profit before tax for the financial year ended March 312016& March 312017 is not more than or equal to INR 5 Crore. Hence pursuant to the abovethe Company did not constitute Corporate Social Responsibility Committee and did not adoptany Corporate Social Responsibility Policy.
APPRECIATIONS & ACKNOWLEDGEMENTS
Your Directors look to the future with confidence. Your Directors wish to express theirappreciation for the valuable support and co-operation received from customers investorslenders business associates bankers various statutory authorities and society at large.
The Directors also thank the State Governments Government of India Governments ofvarious countries other Government Departments and Governmental Agencies.
Your Directors are especially indebted to employees of the Company and its subsidiariesat all levels who through their dedication co-operation support and dynamic work haveenabled the company to achieve rapid growth. Your Directors seek and look forward to thesame support during the future years of growth.