Directors Report of Dhruv Wellness Ltd.

Mar 31, 2018

DIRECTORS REPORT

To,

The Members,

Dhruv Wellness Limited

The Directors of M/s. Dhruv Wellness Limited (the “Company”)(earlier known as “Dhruv Wellness Private Limited) are pleased to present the Third (3^rd) Annual Report (the “Report”) on the business and operations of the Company, together with the audited financial statements of the Company for the Third year of the Company.

1. Financial summary or highlights/Performance of the Company (Standalone)

(Amount in INR)

Particulars	2017 - 2018	2016 - 2017
Revenue from operations	103,65,64,498	101,91,88,092
Other income	1,94,038	2,13,538
Gross Income	103,67,58,536	101,94,01,630
Total Expenses	102,92,85,476	101,33,92,994
Net Profit Before Tax	74,73,060	60,08,636
Provision for Tax	20,48,765	20,00,000
Net Profit After Tax	54,24,295	40,08,636

2. Brief description of the Company''s working during the year/State of Company''s affairs

The gross income from operations increased during the year under review amounted to Rs. 103,67,58,536/- as compared to Rs. 101,94,01,630/- in the previous year.

The net profit after tax is Rs. 54,24,295/- for the (FY 2017-18) after deducting all the expenses of the year.

3. Change in the nature of business, if any

During the period under review, there were no changes in the nature of the business of the Company.

In current financial year i.e. 2017 - 18 Company has converted into Public Limited Company with effect from 2^ndJuly, 2017 and subsequently Company is listed on BSE SME segment.

4. Dividend

The Directors do not recommend any dividend for the current financial year i.e. from 1^st April 2017 till 31^st March 2018, under consideration.

5. Reserves

During the period under review, no amount was transferred to Reserves.

6. Share Capital

During the period under review, the Company has offered, issued or allotted fully paid equity shares in following manner.

1. 96,660 Equity Shares to 0% (Zero] Optionally Convertible Debenture holders

2. 4,54,510 Equity shares to existing equity share holder on Right Basis.

3. 62,04,680 Equity Shares to existing shareholder as fully paid bonus shares in the ratio of 4:1 (Four equity shares as Bonus for each shares held].

4. 27,84,000 Equity shares to Indian public under IPO at BSE SME segment.

As on 31^st March, 2018, the issued, subscribed and paid up share capital of your Company stood at Rs. 10,53,98,500/-, comprising 1,05,39,850 Equity shares of Rs.10/- each.

7. Directors List of Directors as on 31^st March 2018.

Sr. No.	Name	DIN / PAN	Designation
1	Mr. Pravinkumar Prajapati	05192268	Managing Director
2	Mrs. Anita Prajapati	05192261	Director
3	Mr. Narayanbhai Prajapati	07112502	Director
4	Mr. Narayanbhai Prajapati	APUPP6518H	CFO(KMP]
5	Mr. Jignesh Shah	07831824	Independent Director
6	Mr. Kunal Sarkar	07831825	Independent Director

In current financial year i.e. Financial Year 2017 - 18 your Company has appointed One Managing Director, One CFO (KMP] and Two Independent Director and all are regularized in 2 ^nd annual general meeting of the Company.

8. Particulars of Employees

The Directors wish to place on record their appreciation of the contributions by the employees of the Company and look forward to their continued commitment to the success of the Company in the years ahead.

9. Meetings:

During the financial year, 12 (twelve) Board meetings were held, details of which are given below:

Date of the meeting	No. of Directors attended the meeting
02/02/2018	5
13/11/2017	5
09/09/2017	5
24/08/2017	5
07/07/2017	5
03/07/2017	5
28/06/2017	5
22/06/2017	5
12/06/2017	5
23/05/2017	3
26/04/2017	2
06/04/2017	2

10. Extract of Annual Return

Pursuant to section 92(3) of the Act and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is annexed as Annexure 1. MGT - 9 also being uploaded at website of the Company www.dhruvwellness.com

11. Details of Subsidiary/Ioint Ventures/Associate Companies

Not Applicable.

12. Auditors:

M/s Sanjay M. Kangutkar & Associates, Chartered Accountants, were ratified as the Statutory Auditors of the Company for the Financial year 2018 - 19. The company has received the consent from the auditor as per the Companies Act, 2013 to the effect that ratification, if made, will be within the limit prescribed.

13. Auditors'' Report

The Auditors'' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

14. Internal Controls

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

15. Risk management policy

The Company has adopted comprehensive risk management policy to manage risks across businesses.

The objective of the risk management policy:

- Consistency in the identification, assessment, mitigation, monitoring and reporting of risk;

- Proactive identification and management of risks and events to minimize financial losses, revenue leakages, unnecessary litigation, disruption to business processes; and

- non-financial impacts including regulatory, reputation and client impacts;

A core focus of the Risk Management Framework is the consistent identification, assessment, mitigation, monitoring and reporting of risk. This is achieved through the following key elements of the process:

- Understanding Control Environment

Sets tone of organization and control consciousness of its people. Further, it provides foundation for organizational risk culture, risk education and other relevant controls.

- Risk Assessment

- Risk Identification and analysis

- Risk Evaluation to form the basis for control

- Assessing Control Activities

- To meet SLAs, contracts and agreements

- To form the base for Approvals, authorizations, performance reviews

- Ensuring Information and Communication

- Relevant Information is identified, captured and communicated in time

- Flow and direction of information to ensure right people get pertinent information.

- Ongoing Monitoring of risk

- Continuous Assessment of control systems through sampling.

- Focus on effectiveness of controls through independent reviews.

16. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

There is no material changes and commitments, which affecting financial position of the Company.

17. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

There are no significant and material orders passed by the regulators or courts or tribunal that would impact the going concern status of the Company and its operations in future.

18. Details in respect of Frauds

As per Section 134(C], no frauds are reported by auditors under sub-section 12 of section 143.

19. Particulars of loans, guarantees or investments under section 186

There were no loans given, investments made, guarantees given or securities provided during the financial year.

20. Particulars of contracts or arrangements with related parties:

There were no any materially significant related parties'' transaction with promoters and directors which were in conflict with the interest of the Company attracting the provision of Section 188 of the Companies Act, 2013 during the financial year.

However, Form AOC 2 related with particulars of contract or arrangements with related parties are annexed herewith as Annexure 2

21. Obligation of Company under the Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal] Act, 2013 has been notified on 9^th December, 2013, by the Union Government. Under the said Act every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. Your Company has also in principle adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

22. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) The Particulars regarding Conservation of Energy.

As the Company is not covered in the list of industries required to furnish information in Form ''A'' relating to the conservation of Energy, the same is reported to be Nil. However, the Company takes all possible measures to conserve energy.

b) The Particulars regarding Technology Absorption. Adaptation and Innovation.

The particulars regarding Technology Absorption, Adaptation and Innovation are reported to be Nil.

(c) Foreign exchange earnings and Outgo

During the year, the total foreign exchange used was NIL and the total foreign exchange earned was Nil.

23. Corporate Social Responsibility (CSR)

The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility.

24. Directors'' Responsibility Statement

The Directors of the Company confirm that pursuant to Section 134(3)(c) of the Act and to the best of their knowledge and belief:

(a) In the preparation of the annual accounts for the year ended March 31, 208, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) that the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2018 and of the profit and loss of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual accounts have been prepared on a going concern basis; and

(e) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. Deposits

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 (“the Act”) read with the Companies (Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable.

26. FUTURE OUTLOOK:

Your Company is very well positioned to take advantage of ever increasing demand for the pharmaceutical and cosmetic product. So in this way, your Directors are hopeful to achieve better results in the coming years.

27. LISTING:

Your directors are pleased to inform you that the Company in the financial year 2017-18 brought the Initial Public Offer of its equity shares and got listed its shares on SME platform of BSE Ltd. on 12^th September, 2017.

As on the date of this report, the shares of the Company are listed on SME platform of BSE and the Company has paid the annual listing fees for the year 2018-19.

28. MEETING OF INDEPENDENT DIRECTORS:

The independent directors of company met one time during the year on Wednesday, 28th March, 2018 where all the independent directors were present under the requirement of Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

29. SECRETARIAL AUDITOR:

Pursuant to provision of Section 204 of Companies Act, 2013 and Rules made there under, Mr. Sanjog Naravankar, Company Secretary in Practice, has been appointed as a Secretarial Auditor of the Company for the “Financial Year 2017-18” in Meeting of Board of Directors. A Secretarial Audit Report in Form MR-3 given by Mr. Sanjog Naravankar, Company Secretary in Practice has been provided in an Annexure - 3 which forms part of the Directors Report.

SECRETARIAL AUDITORS'' OBSERVATIONS IN SECRETARIAL AUDIT REPORT:

There is no qualification, reservation or adverse remarks or disclaimer made by the Secretarial Auditor in their report and do not call for any further explanation/comment from the board.

30. EVALUATION OF BOARD''S PERFORMANCE:

In compliance with the provisions of the Companies Act, 2013 (''the Act''] and SEBI (LODR] Regulations, 2015, the Board during the year adopted a formal mechanism for evaluation of its performances as well as that of its committees and individual Directors, including the Chairman of the Board. A structured mechanism was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

31. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

32. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2] (e] of the Listing Regulations is given as an “Annexure - 4” to this report.

33. MD AND CFO CERTIFICATION:

The MD and CFO of the company required to gives annual certification on financial reporting and internal controls to the board in terms of Regulation 17(8] of listing regulation and certification on financial results while placing the financial result before the board in terms of Regulation 33 of listing regulation and same is published in this Annexure - 5 report.

34. INDUSTRIAL RELATIONS:

During the year under review, your Company enjoyed cordial relationship with employees at all level.

35. PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1] of the Companies (Appointment and Remuneration of Managerial Personnel] Rules, 2014 is as under:

1. the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year: 1.44

2. the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

During the year there is no such changes in Remuneration

3. the percentage increase in the median remuneration of employees in the financial year;

Nil

4. No. of permanent employees on the rolls of company; 14

Further, no employee of the Company was in receipt of the remuneration exceeding the limits prescribed in the rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, hence no information as required under the provisions of Section 197 of the Companies Act, 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this report.

36. ACKNOWLEDGEMENTS

The directors thank the Company''s employees, customers, vendors, investors and academic institutions for their continuous support.

The directors also thank the government of India, the governments of various states in India and concerned government departments / agencies for their co-operation.

For and on behalf of the Board of Directors

Sd/- Sd/-

Pravinkumar Prajapati Anita Prajapati

Managing Director Director

DIN: 05192268 DIN: 05192261

Place: Mumbai

Date: 30^th May, 2018