Dr Habeebullah Life Sciences Limited
Your Directors have pleasure in presenting the 23 (Twenty Third) Directors' Report onthe business and operations of your Company ('the Company' or 'DR HABEEB') along with theaudited "Financial statements for the "Fiscal Year ended March 31 2019. TheConsolidated performance of the Company and its subsidiaries has been referred to whereverrequired.
1. Financial summary/highlights:
The performance during the period ended 31 March 2019 has been as under:
| || || || ||(Amount in INR) |
| ||Standalone ||Consolidated |
|Particulars ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Turnover/Income (Gross) ||20144734 ||6167239 ||20144734 ||6167239 |
|Other Income ||1104569 ||- ||1104569 ||281400 |
|Profit/loss before Depreciation Finance ||(21260732) ||(10192883) ||(23299779) ||(10991916) |
|Costs Exceptional items and Tax Expense || || || || |
|Less: Depreciation/ Amortization/ Impairment ||94493 ||22521 ||184413 ||119669 |
|Profit /loss before Finance Costs Exceptional items and Tax Expense ||(21355225) ||(10215404) ||(23484192) ||(11111585) |
|Less: Finance Costs ||- ||- ||- ||- |
|Profit /loss before Exceptional items and Tax Expense ||(21355225) ||(10215404) - ||(23484192) ||(11111585) |
|Add/(less): Exceptional items ||- || ||- ||- |
|Profit /loss before Tax Expense ||(21355225) ||(10215404) ||(23484192) ||(11111585) |
|Less: Tax Expense (Current & Deferred) ||- ||- ||(267736) ||(621568) |
|Profit / loss for the year (1) ||- ||(10215404) ||(23216456) ||(10490017) |
|Total Comprehensive Income/loss (2) ||- ||- ||- ||- |
|Total (1+2) ||(21355225) ||(10215404) ||(23216456) ||(10490017) |
|Balance of profit /loss for earlier years ||(29222526) ||(19007122) ||(34434829) ||(24078467) |
|Less: Transfer to Debenture Redemption ||- ||- ||- ||- |
|Reserve || || || || |
|Less: Transfer to Reserves ||- ||- ||- ||- |
|Less: Dividend paid on Equity Shares ||- ||- ||- ||- |
|Less: Dividend paid on Preference Shares ||- ||- ||- ||- |
|Less: Dividend Distribution Tax ||- ||- ||- ||- |
|Balance carried forward ||(50577750) ||(29222526) ||(56745424) ||(34434829) |
2. Overview & state of the company's affairs:
During the year under review the Company has recorded an income of Rs. 212.49 Lakhsand profit / Loss of Rs. (213.55) Lakhs as against the income of Rs. 61.67 Lakhs and lossof Rs. (102.15) Lakhs in the previous financial year ending 31.03.2018.
During the year under review the Company has recorded an income of Rs. 212.49 Lakhsand loss of Rs. 232.16 Lakhs as against the income of Rs. 64.49 Lakhs and loss ofRs.104.90 Lakhs in the previous financial year ending 31.03.2018.
The Company is looking forward for good profit margins in near future.
Since. the Company is yet to start generating profits your Directors have decided notto recommend dividend for the year.
4. Transfer to reserves:
Pursuant to provisions of Section 134 (3) (j) of the Companies Act 2013 the companyhas not proposed to transfer any amount to general reserves account of the company duringthe year under review.
5. Material changes & commitment affecting the financial position of the company :
The Company has converted 455000 Convertible Equity Share Warrants into Equity Shareson 04 May 2018 and further converted 1595000 equity share warrants into equity shareson 26 March2019 during the Financial Year 2018-19 leading to increase in paid upcapital to INR 138087060 divided into 13808706 equity shares of INR 10/- each.
6. Revision of financial statements:
There was no revision of the financial statements for the year under review.
7. Significant & material orders passed by the regulators or courts or tribunals:
No significant or material orders have been passed against the Company by theRegulators Courts or Tribunals which impacts the going concern status and company'soperations in future.
8. Transfer of un-claimed dividend to Investor Education and Protection:
There is no such amount of Un-paid or Unclaimed Dividend be transferred to Investor andEducation and Protection Fund for the financial year ended 31 March 2019.
9. 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.
10. Deposits from public:
The Company has not accepted any public deposits during the Financial Year ended March31 2019 and as such no amount of principal or interest on public deposits wasoutstanding as on the date of the balance sheet.
Details of deposits not in compliance with the requirements of the Act:
Since the Company has not accepted any deposits during the Financial Year ended March31 2019 there has been no non-compliance with the requirements of the Act.
Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January2019 amending the Companies (Acceptance of Deposits) Rules 2014 the Company is requiredto file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 foroutstanding receipt of money/loan by the Company which is not considered as deposits.
The Company would be complying with this requirement within the prescribed timelines.
11. Depository System:
SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 mandate thatthe transfer except transmission and transposition of securities shall be carried out indematerialized form only with effect from 1st April 2019. In view of the numerousadvantages offered by the Depository system as well as to avoid frauds members holdingshares in physical mode are advised to avail of the facility of dematerialization fromeither of the depositories. The Company has directly as well as through its RTA sentintimation to shareholders who are holding shares in physical form advising them to getthe shares dematerialized.
12. Consolidated IND AS financial statements:
In compliance with the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter referred to as the 'Listing Regulations') and Section 129of the Companies Act 2013 the Consolidated Financial Statements which have been preparedby the Company in accordance with the applicable provisions of the Companies Act 2013 andthe applicable Indian Accounting Standards (Ind AS) forms part of this Annual Report.
13. Subsidiary companies:
The Company has one Subsidiary Krisani Bio Sciences Private Limited India.
Krisani Bio Sciences Pvt. Ltd (Krisani Bio) is an innovative biopharmaceutical Companywith focus on design and development of high reward molecules with reduced risk to addresslarge unmet medical and market needs.
The division has till date worked on5 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 theDirector's Report. The statement also provides details of performance and financialposition 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.
14. Companies which have become or ceased to be subsidiaries:
During the FY 2018-19 there was no change in subsidiaries further analysis on theconsolidated performance attention is invited to the section on Management Discussion andAnalysis notes to the consolidated financial statements.
15. Patents filed or assigned in the name of company:
|Application ||Title ||Patent No. / Status |
|Number || || |
|201741042838 ||Bioengineered humanized endocrine neo-organ using decellularized spleen matrices ||PCT/IN2018/050183 |
|201741040487 ||A miRNA prognostic panel 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/IN2018/050184 |
|201741026728 ||A neural conduit to reconstitute and regenerate the degenerated or damaged nervous system ||PCT Filed |
|201841012280 ||Method of MRI-based cellular imaging using differential fractionation of bimetallic FeGdO3 nanoparticles ||PCT Filed |
|201841012280 ||Decellularized liver as a natural 3D-bucket culture system ||PCT Filed |
16. Selection and procedure for nomination and appointment of directors:
The Company has a Nomination and Remuneration Committee ("NRC") which isresponsible for developing competency requirements for the Board based on the industryand strategy of the Company. The Board composition analysis reflects an in-depthunderstanding of the Company including its strategies environment operations andfinancial condition and compliance requirements.
The NRC makes recommendations to the Board in regard to appointment of new Directorsand Key Managerial Personnel ("KMP") and senior management. The role of the NRCencompasses conducting a gap analysis to refresh the Board on a periodic basis includingeach time a Director's appointment or reappointment is required. The NRC is alsoresponsible for reviewing the profiles of potential candidates vis--vis the requiredcompetencies undertake a reference and due diligence and meeting of potential candidatesprior to making recommendations of their nomination to the Board.
The appointee is also briefed about the specific requirements for the positionincluding expert knowledge expected at the time of appointment.
17. Criteria for determining qualifications positive attributes and independence of adirector:
In terms of the provisions of Section 178(3) of the Act and Regulation 19 of theListing Regulations the NRC has formulated the criteria for determining qualificationspositive attributes and independence of Directors the key features of which are asfollows:
Qualifications The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in the Act theDirectors are expected to demonstrate high standards of ethical behaviour communicationskills and independent judgment. The Directors are also expected to abide by therespective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets the criterialaid down in Section 149(6) of the Act the Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations.
18. 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.
19. Independent director's familiarization programmes:
The familiarization program aims to provide the Independent Directors with the scenariowithin the software technology/services the socio-economic environment in which theCompany operates the business model the operational and financial performance of theCompany significant development so as to enable them to take well-informed decisions intimely manner. The familiarization programme also seeks to update the Directors on theroles responsibilities rights and duties under the Act and other statutes. The policy onCompany's familiarization programme for Independent Directors is hosted on your Company'swebsite and its web link is http://www.drhlsl.com
20. Board Evaluation
The Board of Directors of the Company carried out annual evaluation of its ownperformance Committees of the Board and individual Directors pursuant to variousprovisions under the Act Regulation 17 19 and Schedule II of the Listing Regulationsthe SEBI circular dated January 5 2017 circular dated January 10 2019 which providesfurther clarity on the process of Board Evaluation ("SEBI Guidance Note") andSEBI circular dated February 5 2019.
The Company has implemented a system of evaluating performance of the Board ofDirectors and of its Committees and individual Directors on the basis of a structuredquestionnaire which comprises evaluation criteria taking into consideration variousperformance related aspects.
The procedure followed for the performance evaluation of the Board Committees andindividual Directors is enumerated in the Corporate Governance Report.
21. Number of Board the Meetings:
During the year Seven (7) meetings of the Board of Directors of the Company wereconvened and held in accordance with the provisions of the Act. The date(s) of the BoardMeeting attendance by the directors are given in the Corporate Governance Report as ANNEXURE-VIIIforming an integral part of this report.
22. Committees of the Board
There are various Board constituted Committees as stipulated under the Act and ListingRegulations namely Audit Committee Nomination and Remuneration Committee StakeholdersRelationship and Risk Management Committee. Brief details pertaining to composition termsof reference meetings held and attendance thereat of these Committees during the year hasbeen enumerated in Corporate Governance report.
23. Company's Operations
The Company is into the business of Health Care diversified into the following areas:
Out-Patient Consultancy Division in name of ORIGIN HOSPITALS
Diagnostics and Bio Lab
Stem Cell Lab Research and Therapy
Research and Development in Bio-technology
New Drug Discovery including New Molecular Entity (NME Pro Drug)
24. Audit Committee Recommendations :
During the year all recommendations of Audit Committee were approved by the Board ofDirectors.
25. Directors and 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.
a) Appointment / Re-Appointment of Independent Directors of the Company:
(i) Pursuant to provisions of Section 152 of the Companies Act 2013 read with theCompanies
(Appointment and Qualification of Directors) Rules 2014 Dr. Syed Ameer Basha Paspala(DIN 07585133) is liable to retire by rotation at the ensuing 23rd Annual General Meetingand being re-appointed.
(ii) Mr. B. Suryaprakasa Rao was appointed as the additional director and independentdirector of the Company on 26th March 2019 subject to approval of members in AnnualGeneral Meeting
(iii) Disclosure pursuant to Regulation 36(3) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") with respect to Directors seeking re-appointment/appointment at theMeeting is given below:
|Name of the Director ||Mr. B. Suryaprakasa Rao ||Dr. Syed Ameer Basha Paspala |
|Date of Birth ||14/07/1968 ||07/06/1966 |
|Qualification ||CA ||Phd M.Ch (Neurosurgery) |
|Expertise in specific functional areas ||Audit Accounts Finance and in Banking. At present in practice dealing in all Financial Matters i.e. Finance Accounting Audit Tax Planning including providing Advisory & Financial Consultancy Services to various clients at large and carrying out of Stock Audit Credit Audit and Concurrent Audit of Banks ||Consultant (Neurosurgery) |
|Names of Listed entities in which the person also holds the directorship and the membership of Committees of the board ||NIL ||NIL |
|Shareholding of non-executive directors: ||NIL ||1161800 |
|Inter se relationship with any Director ||NIL ||Relented to one promoter NED |
b) Resignation of Directors:
Dr. A.Radha Rama Devi Independent Director of the Company resigned w.e.f. March 262019 due to her preoccupation with professional Responsibilities and personal commitmentsand she further confirmed in her resignation letter dated March 18 2019 that there wereno other material reasons for her resignation other than those mentioned above.
c) Key Managerial Personnel for the financial year 2018-19
Mr. K. Krishnam Raju Whole Time Director of the company.
Mrs.K. Nirusha Chief Financial Officer of the company.
Mrs. Pooja Jain Company Secretary of the Company.
During the year under review Mrs. K. Ramyanka Yadav was appointed as the CompanySecretary of the Company with effect from August 30 2019 in place of Mrs. Pooja Jain whoceased to be the Company Secretary of the Company w.e.f. August 13 2019 due to herresignation.
26. Statutory Auditors :
The members of the Company at their Annual General Meeting held on 28th September 2018have appointed M/s. MSKA & Associates as statutory auditors of the Company to holdoffice until the conclusion of 23rd Annual General meeting of the Company. The Auditors'Report is enclosed with the financial statements in this Annual Report. The Company hasreceived audit report with unmodified opinion for both Standalone and Consolidated auditedfinancial results of the Company for the Financial Year ended March 31 2019 from thestatutory auditors of the Company.
The Auditors have confirmed that they have subjected themselves to the peer reviewprocess of Institute of Chartered Accountants of India (ICAI) and hold valid certificateissued by the Peer Review Board of the ICAI.
27. 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; M/s. Tungala & Co. Chartered Accountants were appointed asInternal Auditors of the Company for the Financial Year 2018-19.
Deviations are reviewed periodically and due compliance ensured. Summary of SignificantAudit Observations along with recommendations and its implementations are reviewed by theAudit Committee and concerns if any are reported to Board.
The Board has re-appointed M/s. Tungala & Co. Chartered Accountants Hyderabad asInternal Auditors for the Financial Year 2019-2020.
28. Secretarial auditors:
In terms of section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 based upon the recommendations ofthe Audit Committee the Board of Directors had appointed M/s. S.S. Reddy &Associates Practicing Company Secretaries (CP No. 7478) as the Secretarial Auditor of theCompany for conducting the Secretarial Audit for financial year ended March 31 2019
29. 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 2019 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.
The Auditors Report annexed with this Annual Report does not contain anyqualification reservation or adverse remarks.
(b) Secretarial Audit Report:
The Secretarial Audit was carried out by M/s. S.S. Reddy & Associates CompanySecretaries (CP No. 7478) for the financial year ended March 31 2019. The Report given bythe Secretarial Auditor is annexed herewith and forms integral part of this Report. Therehas been no qualification reservation or adverse remark or disclaimer in their Report.
As required under the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 the Secretarial Audit of Dr Habeebullah Life Sciences Limited wherethe material unlisted Subsidiaries of the company for the year ended March 31 2019 isprovided in the report attached as Annexure-II.
30. No Frauds reported by statutory auditors
During the Financial Year 2018-19 the Auditors have not reported any matter undersection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed under section 134(3) (ca) of the Companies Act 2013.
31. Authorised and paid up capital of the company:
The authorized capital of the company stands at Rs. 160000000/- dividedinto16000000 equity shares of Rs.10/- each and the Paid up Capital of the Company hasincreased from INR 117587060/- divided into 11758706 Equity Shares of INR 10/- eachto INR 138087060/- divided into 13808706 Equity Shares of INR 10/- each.
32. Material changes and Commitments affecting Financial Position between the end ofFinancial Year and Date of Report:
The Company has converted further 1000000 Convertible Equity Share Warrants intoEquity Shares on 14th June 2019 leading to increase in paid up capital to Rs.148087060 divided into 14808706 Equity Shares of INR 10/- each.
33. Annual Secretarial Compliance Report:
SEBI vide its Circular No. CIR/CFD/CMD1/27/2019 dated February 08 2019 read withRegulation 24(A) of the Listing Regulations directed listed entities to conduct AnnualSecretarial compliance audit from a Practicing Company Secretary of all applicable SEBIRegulations and circulars/guidelines issued thereunder. Further Secretarial ComplianceReport dated May 14 2019 was given by M/s. S.S. Reddy & Associates PracticingCompany Secretary which was submitted to Stock Exchanges within 60 days of the end of thefinancial year.
The Secretarial Compliance Report does not contain any qualification reservation oradverse remark.
34. Cost records and cost audit:
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Act are not applicable for the business activitiescarried out by the Company.
35. Declaration by the Company
The Company has issued a certificate to its Directors confirming that it has not madeany default under Section 164(2) of the Act as on March 31 2019.
36. Conservation of energy technology absorption and foreign exchange outgo:
The required information as per Sec.134 (3) (m) of the Companies Act 2013 is providedhereunder and Rule 8 of Companies (Accounts) Rules 2014:
A. Conservation of Energy:
Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
1. Foreign Exchange Earnings: Nil
2. Foreign Exchange Outgo: Nil
37. Management discussion and analysis report:
Management discussion and analysis report for the year under review as stipulated underRegulation 34 (e ) read with schedule V Part B of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 with the stock exchange in India is annexedherewith as Annexure- VII to this report.
38. Risk management policy:
The Board of Directors had constituted Risk Management Committee to identify elementsof risk in different areas of operations and to develop policy for actions associated tomitigate the risks. The Committee is responsible for reviewing the risk management planand ensuring its effectiveness. The major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continual basis.
39. Corporate governance:
Your Company has taken adequate steps to ensure compliance with the provisions ofCorporate Governance as prescribed under the Listing Regulations. A separate section onCorporate Governance forming a part of this Report and the requisite certificate from theCompany's Auditors confirming compliance with the conditions of Corporate Governance isattached to the report on Corporate Governance along with the Compliance Certificateregarding the Compliance of conditions of corporate governance as annexed inAnnexure-XI.
40. Extract of Annual Return:
Pursuant to Sections 92 & 134(3) of the Act and Rule 12 of the Companies(Management and Administration) Rules 2014 the extract of Annual Return in Form MGT-9 isprovided in AnnexureVI to this Report and is also available on the Company'swebsite.
41. Declaration of Independence:
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16(1)(b)read with Regulation 25 of the Listing Regulations.
The Independent Directors have also confirmed that they have complied with Schedule IVof the Act and the Company's Code of Conduct.
In terms of Regulations 25(8) of the Listing Regulations the Independent Directorshave confirmed that they are not aware of any circumstance or situation which exists ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgement and without any external influence.
During the year Independent Directors of the Company had no pecuniary relationship ortransactions with the Company other than sitting fees commission and reimbursement ofexpenses incurred by them for the purpose of attending meetings of the Board of Directorsand Committee(s) as provided in Annexure-III.
42. Policy on directors appointment and remuneration:
In adherence to the provisions of Section 134(3)(e) and178(1) & (3) of theCompanies Act 2013 the Board ofDirectors upon recommendation of the Nomination andRemuneration Committee approved a policy on Director's appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other matters. The said Policy extract is covered in Corporate GovernanceReport which forms part of this Report and is also uploaded on the Company's website atwww.drhlsl.com
43. Managerial Remuneration and particulars of employees
Information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as Annexure- V to thisreport.
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 pertaining to the top ten names andother particulars of employees also form part of this report. However this information isnot sent along with this report pursuant to the proviso to Section 136(1) of the Act. Anyshareholder interested in obtaining a copy of the same may write to the CompanySecretary/Compliance Officer at the registered office address of the Company.
44. Director's Responsibility Statement:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourDirectors confirm that:
a) in the preparation of the annual accounts for the financial year ended 31 March2019 the applicable accounting standards and schedule III of the Companies Act 2013 havebeen followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as on 31 March 2019 and of the profitand loss of the Company for the financial year ended 31 March 2019;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) Proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) Proper systems to ensure compliance with the provisions of all applicable laws werefollowed and that such systems were adequate and operating effectively.
45. Vigil Mechanism/Whistle Blower Policy:
The Board of Directors has formulated a Whistle Blower Policy which is in compliancewith the provisions of Section 177(10) of the Companies Act 2013 and Regulation 22 of theListing Regulations. The Company has a vigil mechanism to deal with fraud andmismanagement if any. The policy is on the website of the Company.
The policy provides for adequate safeguards against the victimisation of the employeeswho use the vigil mechanism. The vigil mechanism is overseen by the audit Committee.
46. Corporate social responsibility policy:
Since your Company does not have net worth of Rs. 500 Crore or more or turnover of Rs.1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
47. Secretarial Standards:
The company is in compliance with Secretarial Standards issued by The Institute ofCompany Secretaries of India on Meetings of the Board of Directors and General Meetings.
The properties and assets of your Company are adequately insured.
49. Particulars of loans guarantees:
The Company has not availed any facilities of Credit and Guarantee.
50. Internal Financial Control Systems:
Your Company has well laid out policies on financial reporting asset managementadherence to Management policies and also on promoting compliance of ethical and welldefined standards. The Company follows an exhaustive budgetary control and standardcosting system. Moreover the management team regularly meets to monitor goals and resultsand scrutinizes reasons for deviations in order to take necessary corrective steps. TheAudit Committee which meets at regular intervals also reviews the internal control systemswith the Management and the internal auditors.
The internal audit is conducted at the Company and covers all key areas. All auditobservations and follow up actions are discussed with the Management as also the StatutoryAuditors and the Audit Committee reviews them regularly.
51. Related Party Transactions:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. During the financial year2018-19 there were no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.
In line with provisions of Section 177 of the Act read with the Companies (Meetings ofthe Board and its Powers) Rules 2014 omnibus approval for the estimated value oftransactions with the related parties for the financial year is obtained from the AuditCommittee. The transactions with the related parties are routine and repetitive in nature.
The summary statement of transactions entered into with the related parties pursuant tothe omnibus approval so granted are reviewed and approved by the Audit Committee and theBoard of Directors on a quarterly basis. The summary statements are supported by anindependent audit report certifying that the transactions are at an arm's length basis andin the ordinary course of business
The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is is annexed herewith as Annexure- IV tothis report.
52. Code of Conduct for Prevention of Insider Trading :
During the year DR Habeebullah Life Sciences Ltd has amended the Code of Conduct forPrevention of Insider Trading in DR HABEEB ("Code") in accordance with SEBI(Prohibition of Insider Trading) Amendment Regulations 2018 which is effective fromApril 01 2019. The amended Code is uploaded on the website of the Company. The objectiveof the Code is to protect the interest of shareholders at large to prevent misuse of anyunpublished price sensitive information and to prevent any insider trading activity bydealing in shares of the Company by its Directors Designated Persons and their immediaterelatives.
Pursuant to Section 134(3) of the Companies Act 2013the nomination and remunerationpolicy of the Company which lays down the criteria for determining qualificationscompetencies positive attributes and independence for appointment of Directors andpolicies of the Company relating to remuneration of Directors KMP and other employees isavailable on the Company's website at www.drhlsl.com.
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 |
|Name of the policy ||Brief Description ||Website link |
|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 |
|Related Party Transaction Policy ||The policy regulates all transactions between the Company and its related parties. ||http://www.drhlsl.com/ wp- content/uploads/2018/ 06/Policy-on-Related- Party- Transactions.pdf |
|Corporate Social Responsibility Policy ||Your Company does not meet applicable requirements i.e.net worth of INR 500 Crore or more or turnover of INR 1000 Crore or more or a net profit of INR 5 Crore as specified in section 135 of the Companies Act 2013 relating to Corporate Social Responsibility. Hence the Company did not constitute Corporate Social Responsibility Committee and Policy. ||Not Applicable |
54. 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.
55. Non-executive directors' compensation and disclosures:
None of the Independent / Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.
56. Industry based disclosures as mandated by the respective laws governing thecompany:
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosuresis not required.
57. WTD/CFO Certification:
As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the WTD/CFO certification is attached with theannual report as Annexure- IX.
57(a). 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 andthe same is annexed as Annexure -X
58. Prevention of sexual harassment at workplace:
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at workplace.
This is in line with provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 (POSH Act') and the Rules madethereunder. With the objective of providing a safe working environment all employees(permanent contractual temporary trainees) are covered under this Policy. The policy isavailable on the website at www.drhlsl.com.
As per the requirement of the POSH Act and Rules made thereunder the Company hasconstituted an Internal Committee at all its locations known as the Prevention of SexualHarassment (POSH) Committees to inquire and redress complaints received regarding sexualharassment. During the year under review there were no Complaints pertaining to sexualharassment.
59. Green Initiatives:
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Notice of 23rd Annual General Meeting of theCompany are sent to all Members whose email addresses are registered with theCompany/Depository Participant(s). For members who have not registered their e-mailaddresses physical copies are sent through the permitted mode.
60. Other Disclosures:
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. Issue of equity shares with differential rights as to dividend voting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of the Company underany scheme referred to in this Report.
c. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
61. 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 theGovernment of India Government of Telangana and other State Governments Ministry ofCorporate Affairs Ministry of Commerce Ministry of Communication & TechnologyMinistry of Finance Income Tax Department Reserve Bank of India Governments ofvarious countries other Government Departments Agencies. Your Directors are especiallyindebted to employees of the Company and its subsidiary at all levels who through theirdedication co-operation support and dynamic work have enabled the Company to achieverapid growth. Your Directors seek and look forward to
| ||For and on behalf of the Board of |
| ||Dr Habeebullah Life Sciences Limited |
| ||Sd/- |
|Place: Hyderabad ||K. Krishnam Raju |
|Date:30.08.2019 ||Executive Chairman (DIN: 00874650) |