Dr Habeebullah Life Sciences Ltd Directors Report.
Dr Habeebullah Life Sciences Limited
Your Directors have pleasure in presenting the 23 (Twenty Third) Directors Report on the business and operations of your Company (the Company or DR HABEEB) along with the audited "Financial statements, for the "Fiscal Year ended March 31, 2019. The Consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Financial summary/highlights:
The performance during the period ended 31 March, 2019 has been as under:
|(Amount in INR)|
|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)||-||-||-||-|
|Balance of profit /loss for earlier years||(29222526)||(19007122)||(34434829)||(24078467)|
|Less: Transfer to Debenture Redemption||-||-||-||-|
|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 companys affairs:
During the year under review, the Company has recorded an income of Rs. 212.49 Lakhs and profit / Loss of Rs. (213.55) Lakhs as against the income of Rs. 61.67 Lakhs and loss of 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 Lakhs and loss of Rs. 232.16 Lakhs as against the income of Rs. 64.49 Lakhs and loss of Rs.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 not to recommend dividend for the year.
4. Transfer to reserves:
Pursuant to provisions of Section 134 (3) (j) of the Companies Act, 2013, the company has not proposed to transfer any amount to general reserves account of the company during the year under review.
5. Material changes & commitment affecting the financial position of the company :
The Company has converted 4,55,000 Convertible Equity Share Warrants into Equity Shares on 04 May, 2018 and further converted 15,95,000 equity share warrants into equity shares on 26 March,2019, during the Financial Year 2018-19, leading to increase in paid up capital to INR 13,80,87,060 divided into 1,38,08,706 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 the Regulators, Courts or Tribunals, which impacts the going concern status and companys operations 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 and Education 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 Boards Report there was no change in the nature of Business.
10. Deposits from public:
The Company has not accepted any public deposits during the Financial Year ended March 31, 2019 and as such, no amount of principal or interest on public deposits was outstanding 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 March 31, 2019, there has been no non-compliance with the requirements of the Act.
Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January 2019 amending the Companies (Acceptance of Deposits) Rules, 2014, the Company is required to file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 for outstanding 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 that the transfer, except transmission and transposition, of securities shall be carried out in dematerialized form only with effect from 1st April 2019. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has, directly as well as through its RTA, sent intimation to shareholders who are holding shares in physical form, advising them to get the 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 129 of the Companies Act, 2013, the Consolidated Financial Statements which have been prepared by the Company in accordance with the applicable provisions of the Companies Act, 2013 and the 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 Company with focus on design and development of high reward molecules with reduced risk to address large unmet medical and market needs.
The division has till date worked on5 therapeutic areas of Wilsons disease, Non-Alcoholic Steatohepatitis (NASH), Neuropathic Pain, Cardiovascular Diseases, Cystinosis, Huntingtons disease and has been granted 12 international patents. Most of the above molecules have the ability to qualify for 505(b) 2 approval process as per USFDA. Adopting the concept of prodrug and selection of orphan drugs enables Less time frame, cost, and regulatory hurdles in comparison with New Chemical Entities.
The new drug discovery and development process of Dr Habeebullah Life Sciences is based on IP protected, low risk innovative platform. This, coupled with the strategy of selecting orphan drug category for the product portfolio gives the Company an added advantage to commercialize its NMEs at a proof-of-concept stage.
A statement containing salient features of the financial statements of the subsidiaries in the prescribed format Form AOC-1 is appended as Annexure I to the Directors Report. The statement also provides details of performance and financial position of the subsidiary.
As required under Section 136 of the Companies Act, 2013 the audited financial statements including the consolidated financial statements and related information of the Company and Audited Accounts of Subsidiary are available on the website http://www.drhlsl.com/investor/financials/#1514180834590-5156aacd-d874. These documents will also be available for inspection during the business hours at the registered office of the Company and any member, who wishes to get copies of such financial statements, may write 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 the consolidated performance, attention is invited to the section on Management Discussion and Analysis, notes to the consolidated financial statements.
15. Patents filed or assigned in the name of company:
|Application||Title||Patent No. / Status|
|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 is responsible for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.
The NRC makes recommendations to the Board in regard to appointment of new Directors and Key Managerial Personnel ("KMP") and senior management. The role of the NRC encompasses conducting a gap analysis to refresh the Board on a periodic basis, including each time a Directors appointment or reappointment is required. The NRC is also responsible for reviewing the profiles of potential candidates vis--vis the required competencies, undertake a reference and due diligence and meeting of potential candidates prior to making recommendations of their nomination to the Board.
The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.
17. Criteria for determining qualifications, positive attributes and independence of a director:
In terms of the provisions of Section 178(3) of the Act, and Regulation 19 of the Listing Regulations, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:
Qualifications The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in the Act the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets the criteria laid 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 Companys Independent Directors are highly qualified and have been associated with corporate and business organizations. They understand Companys business and activities very well, however, pursuant to Regulation 4 of the Listing Regulations, the Board has shown all the Independent Directors Companys business and manufacturing activities and were also introduced to Companys staff.
19. Independent directors familiarization programmes:
The familiarization program aims to provide the Independent Directors with the scenario within the software technology/services, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant development so as to enable them to take well-informed decisions in timely manner. The familiarization programme also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes. The policy on Companys familiarization programme for Independent Directors is hosted on your Companys website 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 own performance, Committees of the Board and individual Directors pursuant to various provisions under the Act, Regulation 17, 19 and Schedule II of the Listing Regulations, the SEBI circular dated January 5, 2017, circular dated January 10, 2019, which provides further clarity on the process of Board Evaluation ("SEBI Guidance Note") and SEBI circular dated February 5, 2019.
The Company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.
The procedure followed for the performance evaluation of the Board, Committees and individual 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 were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report as ANNEXURE-VIII forming an integral part of this report.
22. Committees of the Board
There are various Board constituted Committees as stipulated under the Act and Listing Regulations namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship and Risk Management Committee. Brief details pertaining to composition, terms of reference, meetings held and attendance thereat of these Committees during the year has been enumerated in Corporate Governance report.
23. Companys 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 of Directors.
25. Directors and key managerial personnel:
The Board of Directors of your Company comprises of 6 (Six) Directors as on the date of this report representing the optimum blend of professionalism, knowledge and having varied experience in different discipline of corporate functioning.
Of these, 1 (ONE) is Whole-time Director Cum Promoter Executive Chairman, 2 (TWO) are Promoter Non-Executive Directors and 3 (THREE) are Independent Non-Executive Directors and is also in compliance w.r.t presence of Chief Financial Officer and Company Secretary as KMPs.
a) Appointment / Re-Appointment of Independent Directors of the Company:
(i) Pursuant to provisions of Section 152 of the Companies Act, 2013 read with the Companies
(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 Meeting and being re-appointed.
(ii) Mr. B. Suryaprakasa Rao was appointed as the additional director and independent director of the Company on 26th March, 2019 subject to approval of members in Annual General Meeting
(iii) Disclosure pursuant to Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") with respect to Directors seeking re-appointment/appointment at the Meeting 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||11,61,800|
|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 26, 2019 due to her preoccupation with professional Responsibilities and personal commitments, and she further confirmed in her resignation letter dated March 18, 2019 that there were no 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 Company Secretary of the Company with effect from August 30, 2019 in place of Mrs. Pooja Jain who ceased to be the Company Secretary of the Company w.e.f. August 13, 2019 due to her resignation.
26. Statutory Auditors :
The members of the Company at their Annual General Meeting held on 28th September, 2018 have appointed M/s. MSKA & Associates, as statutory auditors of the Company to hold office 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 has received audit report with unmodified opinion for both Standalone and Consolidated audited financial results of the Company for the Financial Year ended March 31, 2019 from the statutory auditors of the Company.
The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued 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 and its Powers) Rules, 2014; M/s. Tungala & Co., Chartered Accountants were appointed as Internal Auditors of the Company for the Financial Year 2018-19.
Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to Board.
The Board has re-appointed M/s. Tungala & Co., Chartered Accountants, Hyderabad as Internal Auditors for the Financial Year 2019-2020.
28. Secretarial auditors:
In terms of section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, based upon the recommendations of the 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 the Company, 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 adverse remark or disclaimer made, if any
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2019 and has noted that the same does not have any reservation, qualification or adverse remarks. However, the Board decided to further strengthen the existing system and procedures to meet all kinds of challenges and growth in the market expected in view of the rapid global challenges.
The Auditors Report annexed with this Annual Report, does not contain any qualification, reservation or adverse remarks.
(b) Secretarial Audit Report:
The Secretarial Audit was carried out by M/s. S.S. Reddy & Associates, Company Secretaries (CP No. 7478) for the financial year ended March 31, 2019. The Report given by the Secretarial Auditor is annexed herewith and forms integral part of this Report. There has 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, where the material unlisted Subsidiaries of the company for the year ended March 31, 2019 is provided 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 under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed 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. 16,00,00,000/- divided into1,60,00,000 equity shares of Rs.10/- each and the Paid up Capital of the Company has increased from INR 11,75,87,060/- divided into 1,17,58,706 Equity Shares of INR 10/- each to INR 138,087,060/- divided into 1,38,08,706 Equity Shares of INR 10/- each.
32. Material changes and Commitments affecting Financial Position between the end of Financial Year and Date of Report:
The Company has converted further 10,00,000 Convertible Equity Share Warrants into Equity Shares on 14th June , 2019 leading to increase in paid up capital to Rs. 14,80,87,060 divided into 1,48,08,706 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 with Regulation 24(A) of the Listing Regulations, directed listed entities to conduct Annual Secretarial compliance audit from a Practicing Company Secretary of all applicable SEBI Regulations and circulars/guidelines issued thereunder. Further, Secretarial Compliance Report dated May 14, 2019, was given by M/s. S.S. Reddy & Associates, Practicing Company Secretary which was submitted to Stock Exchanges within 60 days of the end of the financial year.
The Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.
34. Cost records and cost audit:
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act, are not applicable for the business activities carried out by the Company.
35. Declaration by the Company
The Company has issued a certificate to its Directors, confirming that it has not made any 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 provided hereunder and Rule 8 of Companies (Accounts) Rules, 2014:
A. Conservation of Energy:
Your Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy 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 under Regulation 34 (e ) read with schedule V , Part B of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 with the stock exchange in India is annexed herewith as Annexure- VII to this report.
38. Risk management policy:
The Board of Directors had constituted Risk Management Committee to identify elements of risk in different areas of operations and to develop policy for actions associated to mitigate the risks. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continual basis.
39. Corporate governance:
Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under the Listing Regulations. A separate section on Corporate Governance, forming a part of this Report and the requisite certificate from the Companys Auditors confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance along with the Compliance Certificate regarding the Compliance of conditions of corporate governance as annexed in Annexure-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 is provided in AnnexureVI to this Report and is also available on the Companys website.
41. Declaration of Independence:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed both under sub-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 IV of the Act and the Companys Code of Conduct.
In terms of Regulations 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.
During the year, Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors and 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 the Companies Act, 2013, the Board ofDirectors upon recommendation of the Nomination and Remuneration Committee approved a policy on Directors appointment and remuneration, including, criteria for determining qualifications, positive attributes, independence of a Director and other matters. The said Policy extract is covered in Corporate Governance Report which forms part of this Report and is also uploaded on the Companys website at www.drhlsl.com
43. Managerial Remuneration and particulars of employees
Information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure- V to this report.
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to the top ten names and other particulars of employees also form part of this report. However, this information is not sent along with this report pursuant to the proviso to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/Compliance Officer at the registered office address of the Company.
44. Directors Responsibility Statement:
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:
a) in the preparation of the annual accounts for the financial year ended 31 March 2019, the applicable accounting standards and schedule III of the Companies Act, 2013 have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as on 31 March 2019 and of the profit and 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 accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively; and
f) Proper systems to ensure compliance with the provisions of all applicable laws were followed 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 compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. The Company has a vigil mechanism to deal with fraud and mismanagement, if any. The policy is on the website of the Company.
The policy provides for adequate safeguards against the victimisation of the employees who 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 year, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.
47. Secretarial Standards:
The company is in compliance with Secretarial Standards issued by The Institute of Company 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 management, adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the internal auditors.
The internal audit is conducted at the Company and covers all key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.
51. Related Party Transactions:
All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. During the financial year 2018-19, there were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which 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 of the Board and its Powers) Rules, 2014, omnibus approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.
The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arms length basis and in the ordinary course of business
The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is is annexed herewith as Annexure- IV to this report.
52. Code of Conduct for Prevention of Insider Trading :
During the year, DR Habeebullah Life Sciences Ltd has amended the Code of Conduct for Prevention of Insider Trading in DR HABEEB ("Code") in accordance with SEBI (Prohibition of Insider Trading) Amendment Regulations, 2018, which is effective from April 01, 2019. The amended Code is uploaded on the website of the Company. The objective of the Code is to protect the interest of shareholders at large, to prevent misuse of any unpublished price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated Persons and their immediate relatives.
Pursuant to Section 134(3) of the Companies Act, 2013,the nomination and remuneration policy of the Company which lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of Directors and policies of the Company relating to remuneration of Directors, KMP and other employees is available on the Companys website at www.drhlsl.com.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All the policies are available on our website www.drhlsl.com.
The policies are reviewed periodically by the Board and updated based on need and new compliance 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 directors,key 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 Public issue/Rights Issue etc.
55. Non-executive directors compensation and disclosures:
None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.
56. Industry based disclosures as mandated by the respective laws governing the company:
The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.
57. WTD/CFO Certification:
As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the WTD/CFO certification is attached with the annual report as Annexure- IX.
57(a). CODE OF CONDUCT
The Company has formulated and implemented a Code of Conduct for Board Members and Senior Management of the Company. Requisite annual affirmations of compliance with the respective Codes have been made by the Directors and Senior Management of the Company and the 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 a Policy 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 made thereunder. With the objective of providing a safe working environment, all employees (permanent, contractual, temporary, trainees) are covered under this Policy. The policy is available on the website at www.drhlsl.com.
As per the requirement of the POSH Act and Rules made thereunder, the Company has constituted an Internal Committee at all its locations known as the Prevention of Sexual Harassment (POSH) Committees, to inquire and redress complaints received regarding sexual harassment. During the year under review, there were no Complaints pertaining to sexual harassment.
59. Green Initiatives:
In commitment to keep in line with the Green Initiative and going beyond it to create new green initiatives, electronic copy of the Notice of 23rd Annual General Meeting of the Company are sent to all Members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their e-mail addresses, physical copies are sent through the permitted mode.
60. Other Disclosures:
Your Directors state that no disclosure or reporting is required in respect of the following 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 under any scheme referred to in this Report.
c. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
61. Appreciations & Acknowledgements:
Your Directors wish to express their appreciation for the valuable support and co-operation received from Customers, Investors, Lenders, Business Associates, Bankers, NSDL, CDSL, RTA, SEBI, BSE, MSEI, ASE and Society at large. The Directors also thank the Government of India Government of Telangana and other State Governments, Ministry of Corporate Affairs, Ministry of Commerce, Ministry of Communication & Technology, Ministry of Finance, Income Tax Department, Reserve Bank of India, , Governments of various countries, other Government Departments, Agencies. Your Directors are especially indebted to employees of the Company and its subsidiary at all levels, who through their dedication, co-operation, support and dynamic work, have enabled the Company to achieve rapid growth. Your Directors seek, and look forward to
|For and on behalf of the Board of|
|Dr Habeebullah Life Sciences Limited|
|Place: Hyderabad||K. Krishnam Raju|
|Date:30.08.2019||Executive Chairman (DIN: 00874650)|