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Dr Habeebullah Life Sciences Ltd.

BSE: 539267 Sector: Others
NSE: N.A. ISIN Code: INE579N01018
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OPEN 35.45
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VOLUME 10
52-Week high 58.65
52-Week low 31.70
P/E
Mkt Cap.(Rs cr) 43
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dr Habeebullah Life Sciences Ltd. (DRHABEEBULLAH) - Director Report

Company director report

Your Directors have pleasure in presenting the 22 (Twenty Second) Directors Report onthe business and operations of your Companyalong with the Audited Financial Statementsfor the Financial Year ended March 31 2018.

FINANCIAL SUMMARY

Amount in INR
Particulars Consolidated 2017-2018 Standalone 2017-18 Consolidated 2016-17 Standalone 2016-2017
Income 6448639 6167239 12943586 12943586
Expenditure 17560224 16382643 18791996 16140697
Provision for Current Tax (MAT) - - - -
MAT Credit Entitlement - - - -
Differed Tax -621568 - 7228586 -
Profit for the year -10490017 -10215404 -13076996 -3197111

REVIEW OF OPERATIONS

The Total Revenue of the Company for the financial year under review on consolidatedbasis was INR 6448639/- as against INR 12943586/- for the previous financial year. TheCompany recorded a Net Loss of INR 10490017/- for the Financial Year 2017-18 as againstthe Net Loss of INR 13076996/- for the Previous Year.

On Standalone basis the Total Revenue of the Company for the Financial Year 2017-18was INR 6167239/-as against INR 12943586/-for the Previous Financial Year. The NetLoss for the Financial Year 2017-18 is INR 10215404/- as against the Net Loss of INR3197111/- for the Previous Year.

The Company has not yet started its activities on full fledged. The management has beentaking all steps to start all activities in near future and generate more revenue.

CAPITAL STRUCTURE

Authorized Share Capital

During the Financial year the Authorized Share Capital of the Company was increasedfrom INR 130000000/- divided into 13000000 Equity Shares of INR 10/- to INR160000000/- divided into 16000000 Equity Shares th of INR 10/- each on 27 September2017.

Paid up Capital (Considering only Equity Share Capital of the Company)

During the Financial year the Paid up Capital of the Company has increased from INR102587060/- divided into 10258706 Equity Shares of INR 10/- each to INR117587060/- divided into 11758706 Equity Shares of INR 10/- each.

• The Company has allotted 800000 Equity Shares to Non Resident Indians (NRIs)on Preferential Basis on 17 November 2017.

• The Company has allotted 1000000 Convertible Equity Share Warrants toPromoters of the Company on Preferential Basis on 24 January 2018.

• The Company has allotted 2750000 Convertible Equity Share Warrants toNon-Promoters of the Company th on Preferential Basis on 17 November 2017. Out of which700000 Convertible Equity Share Warrants th were converted into Equity Shares on 24January 2018.

Shareholders in the Last 21st Annual General meeting held on Wednesday the 27th day ofSeptember 2017 have consented for issuance of ESOPS in terms of SEBI (Share BasedEmployee Benefits) Regulations 2014 and they are yet to be acted upon.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF REPORT

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The Company has converted further 455000 Convertible Equity Share Warrants intoEquity Shares on 04 May 2018 leading to increase in Paid up Capital to INR 122137060divided into 12213706 Equity Shares of INR 10/- each.

REGULATORY AFFAIRS BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT

The following were the regulatory affairs occurred as on the date of Board's Report–

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• As per SEBI Circular No. IMD/FPIC/CIR/P/2018/61 dated 5 April 2018 the CentralDepository Services (India) Limited (CDSL) was appointed as the Designated Depository forthe purpose of Monitoring the Foreign Investment Limits in the Company.

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• As per SEBI Circular No. SEBI/HO/CFD/DCR1/CIR/P/2018/85 dated 28 May 2018 theCentral Depository Services (India) Limited (CDSL) was appointed as the DesignatedDepository for the purpose of System Driven Disclosures in Securities Market for theCompany.

GREEN INITIATIVE

Securities and Exchange Board of India (SEBI) has vide its circular No.SEBI/HO/MIRSD/DOP1/ CIR/P/2018/73 dated 20th April 2018 mandated that all theshareholders whose ledger folio do not have or having incomplete details with respect totheir PAN and Bank particulars must submit the same to the Registrar and Transfer Agent(RTA) or the Company.

Your active co-operation is required in this regard and in order to be a part of thegreen initiative to help in conserving trees for a greener India and to enable theCompany to disseminate to you all the requisite documents and information electronicallyi.e. through emails and make payments of dividend directly into your bank account you arerequested:-

a. To provide your PAN and bank details as required by SEBI. For crediting yourdividend amount directlyinto your bank account through National Automated Clearing House(NACH) a separate form is attached for providing your bank details kindly fill and signthe form and submit with RTA/Company (for shares heldin physical form) or with yourdepository participant(for shares held in demat form) as the case may bealong withrequisite documents mentioned in theform within stipulated time.

b. To register or update your e-mail address by filling in and signing the attachedform and submit with RTA/Company (for shares held in physical form) or with yourdepository participant (for shares held indemat form) as the case may be along withrequisite documents mentioned in the form within stipulated time.

Kindly note that it is mandatory for the Company to mention your bank details on thedividend payment instrument in case where NACH details are not registered with theCompany / RTA.

DIVIDEND

The Company is in its revival process and hence no dividend is being declared for theyear.

TRANSFER TO GENERAL 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.

COMPANY'S OPERATIONS

The Company is into the business of Health Care diversified into the followingareas:

• Out-Patient Consultancy Division in name of ORIGIN HOSPITALS

• Diagnostics and Bio R&D Lab

• Pharmacy

• Stem Cell – Lab Research and Therapy

• Research and Development in Bio-technology

• New Drug Discovery including New Molecular Entity (NME – Pro Drug)

• Contract Research Organization (CRO) related activities

• Academic Services like Courses / Lectures / Seminars on Biotechnology PharmaStem Cell Research and therapy Clinical Research and animal studies etc.

CHANGE IN THE NATURE OF BUSINESS IF ANY

During the period under review and the date of Board's Report there was no change inthe nature of Business.

PATENTS FILED OR ASSIGNED IN THE NAME OF COMPANY

Application Number Title Patent No. / Status
201741042838 Bioengineered humanized endocrine neo-organ using decellularized spleen matrices PCT/IN2018/050183
201741040487 A Unique Prognostic panel of miRNAs in combination with viral load for assessment of disease status therapeutic response and relapse in HCV patients PCT/IN2018/050184
201641035316 Drug conjugated ultra-small nanoparticle for effective killing of drug resistant cancer cells PCT/IB2017/056384
201741026728 A neural conduit to reconstitute and regenerate the degenerated or damaged nervous system In the process of PCT filing
201841012280 Method of MRI-based cellular imaging using differential fractionation of bimetallic FeGdO3 nanoparticles In the process of PCT filing
201641038276 Decellularized liver as a natural 3D-bucket culture system In the process of PCT filing

CHANGE OF NAME OF THE COMPANY

The Name of the Company was changed from PC PRODUCTS INDIA LIMITED to DR HABEEBULLAHLIFE SCIENCES LIMITED vide Fresh certificate of Incorporation obtained from Registrar ofCompanies Hyderabad Telangana State India dated 25 October 2017.

AGREEMENTS SIGNED DURING THE YEAR

• The Company had entered into a Collaborative Agreement with its SubsidiaryKrisani Bio Sciences Private Limited for further development of Wilson Disease Molecule onrevenue sharing basis on 23 August 2017.

• The Company has terminated an Agreement entered with its Subsidiary Krisani BioSciences Private Limited on 17 November 2017 {Initially entered on dated 25 March 2017for further development of NASH (Fatty Liver) Molecule}

• The Company has entered into a Collaborative Agreement with Centre for LiverResearch And Diagnostics (CLRD) to use their land building equipment and otherfacilities to run business of Hospital Diagnostics Pharmacy Stem cell and otherbio-technology laboratories on revenue sharing basis dated 27 May 2017.

REPORT ON SUBSIDIARIES / ASSOCIATES / JOINT VENTURES

Subsidiaries – The Company has one Subsidiary – Krisani Bio SciencesPrivate Limited India.

Krisani Bio Sciences Pvt. Ltd (Krisani Bio) is an innovative biopharmaceuticalCompany with focus on large unmet medical and market needs with reduced risk and highreward molecules.

The division is currently working on 5 therapeutic areas of Wilson's diseaseNon-Alcoholic Steatohepatitis (NASH) Neuropathic Pain Cardiovascular DiseasesCystinosis Huntington's disease and has been granted 12 international patents. Most ofthe above molecules have the ability to qualify for 505(b) 2 approval process as perUSFDA. Adopting the concept of prodrug and selection of orphan drugs enables Less timeframe cost and regulatory hurdles in comparison with New Chemical Entities.

The new drug discovery and development process of Dr Habeebullah Life Sciences is basedon IP protected low risk innovative platform. This coupled with the strategy ofselecting orphan drug category for the product portfolio gives the Company an addedadvantage to commercialize its NME's at a proof-of-concept stage.

A statement containing salient features of the financial statements of the subsidiariesin the 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 Subsidiary are available on the websitehttp://www.drhlsl.com/investor/financials/#1514180834590-5156aacd-d874. These documentswill also be available for inspection during the business hours at the registered officeof the Company and any member who wishes to get copies of such financial statements maywrite to the Company for such requirement.

Associates / Joint Ventures – Further the Company has no Associates nor hasentered into any Joint Ventures.

DETAILS OF BOARD OF DIRECTORS / KEY MANAGERIAL 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 Whole-time Director Cum Promoter Executive Chairman 2 (TWO) arePromoter Non-Executive Directors and 3 (THREE) are Independent Non-Executive Directors andis also in compliance w.r.t presence of Chief Financial Officer and Company Secretary asKMPs.

Change in Designation

No changes in designation of directors during the Financial Year under review.

Retirement by rotation

Pursuant to provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 Dr. Mohammed AejazHabeeb (DIN 02265024) is liable to retire by nd rotation at the ensuing 22 Annual GeneralMeeting and being eligible offers himself for reappointment to the office of directorship.Your Board of Directors recommends his re-appointment.

Appointments

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Mrs. K. Nirusha was appointed as Chief Financial Officer of the Company on 26 June2017.

COMMITTEES OF THE BOARD

The Board of Directors of the Company had already constituted various Committees incompliance with the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 viz.

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Independent Directors Committee

All decisions pertaining to the constitution of Committees appointment of members andfixing of term of reference/role of the committee are taken on record by the Board ofDirectors.Details of the role and constitution of committees including the number ofmeetings held during the financial year and attendance at meetings are provided in thecorporate governance section of the Annual Report.

BOARD MEETINGS

The Board of Directors duly met (Four) times in the Financial Year 2017-2018 on27/05/2017 23/08/2017 17/11/2017 and 24/01/2018.

Further details of the composition and attendance of the Board and its Committees areprovided in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Section 173(1) of Companies Act 2013 andRegulation 17(2) SEBI (LODR) Regulations 2015.

TRAINING OF INDEPENDENT DIRECTORS:

Your Company's Independent Directors are highly qualified and have been associated withcorporate and business organizations. They understand Company's business and activitiesvery well however pursuant to Regulation 4 of the Listing Regulations the Board hasshown all the Independent Directors Company's business and manufacturing activities andwere also introduced to Company's staff.

FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS:

The familiarising programmes for the Independent Directors are disclosed in theCorporate Governance Report that forms part of this Annual Report.

INDIAN ACCOUNTING STANDARD (Ind AS) :

Your Company has adopted Indian Accounting Standard (Ind AS) notified by MCA and therelevant provision ofthe Companies Act 2013 and the general circulars issued by theMinistry of Corporate Affairs from time to time.

STATUTORY AUDITORS & AUDITOR'S REPORTS

The existing auditors M/s. N.M Khatavkar & Co. Charted Accountants have resignedon 27th August 2018 before the expiry of 5 years term. Accordingly the appointment ofM/s. MSKA & Associates. as statutory auditors of the Company in place of resigningauditors is placed for approval by the shareholders. The Auditors' Report for fiscal 2018does not contain any qualification reservation or adverse remark. The Auditors' Report isenclosed with the financial statements in this Annual Report.

The Company has received audit report with unmodified opinion for both Standalone andConsolidated audited financial results of the Company for the Financial Year ended March31 2018 from the statutory auditors of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the provisions of theSection 129(3) of Companies Act 2013Accounting Standards AS-21 and AS-27 and Indian Accounting Standard (Ind AS) yourDirectors have provided the Consolidated Financial Statements for the Financial Year endedMarch 31 2018 which forms part of the Annual Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM

The Company has adequate internal controls consistent with the nature of business andsize of the operations to effectively provide for safety of its assets reliability offinancial transactions with adequate checks and balances adherence to applicable statuesaccounting policies approval procedures and to ensure optimum use of availableresources.These systems are reviewed and improved on a regular basis. It has acomprehensive budgetary control system to monitor revenue and expenditure against approvedbudget on an ongoing basis.

INTERNAL AUDITORS

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; Mr. P.V. Srikanth Partner of M/s. Tungala & Co. CharteredAccountants were appointed as Internal Auditors of the Company for the Financial Year2017-18.Deviations are reviewed periodically and due compliance ensured. Summary ofSignificant Audit Observations along with recommendations and its implementations arereviewed by the Audit Committee and concerns if any are reported to Board.

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 M/s. S. S. Reddy &Associates Practicing Company Secretaries was appointed to undertake the SecretarialAudit of the Company for the Financial Year 2017-18. There is 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 AnnexureII to this report.

QUALIFICATIONS IN AUDIT REPORTS

Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made if any —

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2018 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges and growth in the marketexpected in view of the rapid global challenges. .

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report for the year ended March 312018 on the Compliances according to the provisions of section 204 of the Companies Act2013 and the same does not have any reservation qualifications or adverse remarks.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There have been no frauds reported by the Statutory Auditors u/s 143(12) .

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

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The Securities Exchange Board of India vide its Adjudication OrderEAD-5/SVKM/AO/21/2017-18] dated 17 May 2017 has imposed a penalty of INR 400000/- onthe Company 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 Equity Shares were listed. The Company has paid the Penal Amount ofINR 400000/- on Monday 29 May 2017 to Securities Exchange Board of India towards theAdjudication 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.

DECLARATION BY INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act2013 that he / she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 16(1) (b) and 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The declarations from 3 (Three) Independent Directors are attached as Annexure IIItothis Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 and to the bestof their knowledge and ability In terms of Section 134(3) (c) of the Companies Act 2013your directors confirm as under:

• In preparation of the annual accounts for the financial year ended March 312018 the applicable accounting standards have been followed and there were no materialdepartures from prescribed accounting standards;

• 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;

• 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;

• We have prepared the annual accounts on a going concern basis;

• We have laid down internal financial controls which are adequate and areoperating effectively; and

• We have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.

POLICIES

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. All the policies areavailable on our website www.drhlsl.com.

The policies are reviewed periodically by the Board and updated based on need and newcompliance requirement.

Name of the policy Brief Description Website link
Board Diversity Policy At DRHLSL we believe that a truly diverse board will leverage differences in thought perspective knowledge skill regional and industry experience cultural and geographical background age ethnicity race and gender which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. http://www.drhlsl.com/ wp- content/uploads/2018/ 06/Board-Diversity- Policy.pdf
Nomination and Remuneration Policy This policy formulates the criteria for determining qualifications competencies positive attributes and independence for the appointment of a director (executive / non-executive) and also the criteria for determining the remuneration of the directorskey managerial personnel and other employees. http://www.drhlsl.com/ wp- content/uploads/2018/ 06/Nomination-& - Remuneration- Policy.pdf
Policy on Material Subsidiaries The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. http://www.drhlsl.com/ wp- content/uploads/2018/ 06/Policy-for- determining-Material- Subsidiaries.pdf

Name of the policy Brief Description Website link

Related Party The policy regulates all transactions between the Companyhttp://www.drhlsl.com/

Transaction Policy and its related parties. wp-

content/uploads/2018/

06/Policy-on-Related-

Party-

Transactions.pdf

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of the SEBI (LODR) Regulations2015 during the year were in theordinary course of business and on an arms' length basis and the provisions of Section 188of the Companies Act 2013 were complied wherever necessary. However pursuant to theprovisions of Regulation 23 (2) of the SEBI (LODR) Regulations 2015 prior approval ofthe Audit Committee was sought for entering into the Related Party Transactions.

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 AnnexureIV forming part of this Report. Your Directorsalso drawattention of the members to Notes of Accounts to the Standalone FinancialStatement which sets out related party disclosures.

PARTICULARS OF EMPLOYEES

The information required under Section 197 (12) of the Act read with Rule 5(1) to (3)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended is annexed as Annexure Vto this report.

EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT 9 is included as Annexure VI and forms part of this 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 usethe latest technologies for improving the quality of its operations.

C.Foreign Exchange Earnings and Outgo: Further the company did not have anyforeign exchange 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.

BOARD EVALUATION

Pursuant to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out an Annual Evaluation of its own performanceperformance of the Directors and the working of its Committees. The Board's functioningwas evaluated on various aspects including inter alia degree of fulfilment of keyresponsibilities Board structure and composition establishment and delineation ofresponsibilities to various Committees effectiveness of Board processes information andfunctioning.

Evaluation of the Committees performance was based on the criteria like compositionits terms of the reference and effectiveness of committee meetings etc. IndividualDirector's performance evaluation is based on their preparedness on the issues to bediscussed meaningful and constructive discussions and their contribution to the Board andCommittee meetings. The Chairperson was evaluated mainly on key aspects of his role. Theseperformance exercises were conducted seeking inputs from all the Directors / CommitteeMembers wherever applicable.

The evaluation procedure followed by the company is as mentioned below

i) Feedback is sought from each Director about their views on the performance of theBoard covering various criteria such as degree of fulfilment of key responsibilitiesBoard structure and composition establishment and delineation of responsibilities tovarious Committees effectiveness of Board processes information and functioning Boardculture and dynamics quality of relationship between the Board and the Management andefficacy of communication with external stakeholders. Feedback was also taken from everyDirector on his assessment of the performance of each of the other Directors.

ii) The Nomination and Remuneration Committee (NRC) then discusses the above feedbackreceived from all the Directors.

iii) Based on the inputs received the Chairman of the NRC also makes a presentation tothe Independent Directors at their meeting summarising the inputs received from theDirectors as regards Board performance as a whole and of the Chairman. The performance ofthe Non Independent Non-Executive Directors and Board Chairman is also reviewed by them.

iv) Post the meeting of the Independent Directors their collective feedback on theperformance of the Board (as a whole) is discussed by the Chairman of the NRC with theChairman of the Board. It is also presented to the Board and a plan for improvement isagreed upon and is pursued.

v) Every statutorily mandated Committee of the Board conducts a self-assessment of itsperformance and these assessments are presented to the Board for consideration. Areas onwhich the Committees of the Board are assessed include degree of fulfilment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.

vi) Feedback is provided to the Directors as appropriate. Significant highlightslearning and action points arising out of the evaluation are presented to the Board andaction plans are drawn up. During the year under report the recommendations made in theprevious year were satisfactorily implemented.

The peer rating on certain parameters positive attributes and improvement areas foreach Board member are also provided to them in a confidential manner. The feedbackobtained from the interventions is discussed in detail and where required independentand collective action points for improvement are put in place.

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.

PUBLIC DEPOSITS

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.

INSURANCE

The Properties and Assets of your Company are adequately insured.

RISK MANAGEMENT

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.

DISCLOSURE ABOUT / COST AUDIT

Cost Audit as prescribed under Section 148 of Companies Act 2013 is not applicable toyour Company.

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015. The InsiderTrading Policy of the Company lays down guidelines and procedures to be followed anddisclosures to be made while dealing with shares of the Company as well as theconsequences of violation. The policy has been formulated to regulate monitor and ensurereporting of deals by employees and to maintain the highest ethical standards of dealingin Company securities.

The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our websitehttp://www.drhlsl.com/wp-content/uploads/2018/06/Code-for-Prevention-of-Insider-Trading.pdf

SECRETARIAL STANDARDS

The company is in compliance with applicable secretarial standards.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 theManagement's discussion and analysis is set out in this Annual Reportas Annexure VII.

CORPORATE GOVERNANCE

Corporate governance is about maximizing shareholder value legally ethically andsustainably. At DRHLSL we believe a sound corporate governance is critical to enhanceand retain investor trust. The goal of corporate governance is to ensure fairnessinformation about the Company for every stakeholder.

A separate section on Corporate Governance for fiscal 2018 forms part of this AnnualReport as Annexure VIII.

WTD and CFO CERTIFICATION

Mr. K. Krishnam Raju Whole-time Director andMrs. K. Nirusha Chief Financial Officerof the Company have provided Compliance Certificate which is annexed as Annexure IXto the Board in accordance with Regulation 17(8) read with Part B of Schedule II of theSEBI (LODR) Regulations 2015 for the Financial Year ended 31 March 2018.

CODE OF CONDUCT

The Company has formulated and implemented a Code of Conduct for Board Members andSenior Management of the Company. Requisite annual affirmations of compliance with therespective Codes have been made by the Directors and Senior Management of the Company.

Declaration on Code of Conduct for the year 2017-18

This is to confirm that the Board has laid down a code of conduct as per Regulation17(5) of the Listing Regulations for all Board members and senior management personnel ofthe Company. The code of Conduct has also been posted on the website of the Company andcan be accessed athttp://www.drhlsl.com/wp-content/uploads/2018/06/Code-of-Conduct-BOD-Senior-Mgmt.pdf

It is further confirmed that all Directors and senior management personnel of theCompany have affirmed compliance with the Code of Conduct of the Company for the financialyear ended on March 31 2018 as envisaged in Regulation 26(3) of the Listing Regulations.Adeclaration to this effect signed by Mr. K. Krishnam Raju Whole-time Director (DIN00874650) is attached as Annexure X.

COMPLIANCE CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

Mr. S. Sarveswar Reddy a Company Secretary in Practice has certified that conditionsof Corporate Governance as stipulated under SEBI (LODR) Regulations 2015 have beencomplied by your Company and his certificate is annexed as Annexure XI.

DISCLOSURE UNDER PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL ACT 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. Internal Complaint Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees are covered under thispolicy.The following is the summary of sexual harassment complaints received and disposedduring the calendar year:

• No. of complaints received Nil
• No. of complaints disposed off Nil

CORPORATE SOCIAL RESPONSIBILITY

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. Hence pursuant to the above the Company did not constitute CorporateSocial Responsibility Committee and did not adopt any Corporate Social ResponsibilityPolicy.

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has complied with the appropriate accounting policies and has ensured thatthey have been applied consistently. There have been no deviations from the treatmentprescribed in the Accounting Standards notified under Section 133 of the Companies Act2013.

DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT / UNCLAIMED SUSPENSE ACCOUNT.

Your company does not have any Unclaimed shares issued in physical form pursuant Publicissue/Rights Issue etc.

APPRECIATIONS & ACKNOWLEDGEMENTS

Your Directors wish to express their appreciation for the valuable support andco-operation received from Customers Investors Lenders Business Associates BankersNSDL CDSL RTA SEBI BSE MSEI ASE and Society at large.

The Directors also thank the Government of India Government of Telangana and otherGovernment States Ministry of Corporate Affairs Ministry of Commerce Ministry ofCommunication & Technology Ministry of Finance Income Tax Department Reserve Bankof India State Governments Governments of various countries other GovernmentDepartments Agencies.

Your Directors are especially indebted to employees of the Company and its subsidiaryat 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.

For and on Behalf of the Board of Directors
Sd/-
Place: Hyderabad K. Krishnam Raju
Date: 27th Aug 2018 Executive Chairman (DIN 00874650)