DIRECTOR'S REPORT

To

The Members,

Your directors are pleased to present their report along with the Audited accounts for the year ended 31-03-2015.

Operations:

During the year the company has sales revenue of Rs.75.75 Lakhs as against last year sales rev­enue of Rs.225.38 Lakhs, a decrease of about 66.4% in rupee terms. The management is expect­ing get good revenues from the second half of the financial year 2015-16 with the introduction of 10000 IU potency of Erythropoietin into the market.

Directors:

Mrs. J.Uma, Directors retiring by rotation and being eligible offers herself for reappointment.

Directors Responsibility Statement:

Pursuant to Section 134 of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate ac­counting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, being a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee consists of the following Directors namely Mr.B.R.Rao, Mr.K.Ramachandra Raju, and Mr.M.Satyanarayana Raju.

Brief description of terms of reference:

Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their ap­pointment and removal;

Carry on the evaluation of every director's performance :

Formulation of the criteria for determining qualifications, positive attributes and independence of a director;

Recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

Formulation of criteria for evaluation of independent Directors and the Board;

Devising a policy on Board diversity; and

Any other matter as the Board may decide from time to time.

Nomination and Remuneration policy

The objective of the Policy-

To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior

Management and Key Managerial positions and to determine their remuneration.

To determine remuneration based on the Company's size and financial positions and trends and practices on remuneration prevailing in peer companies.

To carry evaluation of the performance of Directors

To provide them rewards linked directly to their effort, performance, dedication and achievement relating to the Company's operations.

To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

Particulars of Loans, Guarantees and Investments Under Section 186:

The company has neither issued any Loans, Guarantees nor made any investments during the Financial Year.

Particulars of Contracts or Arrangements with Related Parties referred To sSec. 188(1):

The Company has not entered into any CONTRACTS OR ARRANGEMENTS WITH RELATED PAR­TIES REFERRED TO Sec. 188(1) during the Financial Year

Extract of Annual Return:

The Extract of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - A to this report.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Information with respect to the conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Sec. 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is prepared and annexed as Annexure-B to this report.

Statutory Auditors:

At the Annual General Meeting held on 30-09-2014 M/s VASG and Associates, Chartered Accoun­tants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the Financial Year 2017. In terms of 1st proviso to section 139(1) of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every Annual General Meeting. Accordingly appointment of M/s. VASG and Associates, Chartered Accountants is placed for ratification by shareholders. In the regard, the Company has received a certificate from the Auditors to the effect, if they are appointed, it will be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Audit Committee:

Composition Audit Committee included in Corporate Governance report.

Corporate Governance:

Pursuant to the provisions of the Clause 49 of the Listing Agreement a report on Corporate Governance and a certificate from the Statutory Auditors regarding the Compliance of conditions of Cor­porate Governance are annexed as Annexure -C to this report.

Whistle Mechanism:

The Board of Directors have adopted Whistle Blower policy. The Whistle Blower policy aims for conducting the affairs in the fair and transparent manner by adopting highest standards of profes­sionalism, honest, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the chairperson of the audit committee in exceptional cases.

Company Secretary:

The company is not making sufficient profits and hence not able to appoint a Company Secretary but utilizing the service of Sri.V.B.S.S.Prasad practicing Company Secretary to look after legal com­pliances.

Secretarial Audit Report:

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed Mr. V.B.S.S.Prasad, Practicing Company Secretary (C.P.No: 4605) as Secretarial Audi­tor to conduct Secretarial Audit of the Company for the Financial year ended 31st March, 2015.

Secretarial Audit Report issued by Mr. V B S S Prasad, Practicing Company Secretary in form MR-3 is enclosed as Annexure - D to this Annual Report.

There are no qualifications in Secretarial Audit Report.

Particulars of Employees:

No employee of the company is in receipt of remuneration of Rs.60 Lakhs per annum, and no employees is in receipt of Rs.5 Lakhs per month, for any part of the financial year whose particulars are required to be disclosed pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Change in Nature of Business:

There is no change in the Company's nature of business during the financial year ending March 31st, 2015.

Significant and Material Orders Passed By Regulators:

No such orders have been received.

Material Changes and Commitments:

There are no Material changes and commitments in the business operations of the Company from the Financial Year ended 31st March, 2015 to the date of signing of the Director's Report.

Acknowledgements:

The board wishes to place its deep sense of gratitude to all the employees for their valuable co- operation and contribution. The board also thanks all Government/statutory organizations for their support extended to the company.

During the Financial year ended 31st march, 2015, the company has not received any complaints pertaining to Sexual Harassment.

The board is also grateful to Banks and all those associated with the company for their co-operation and help.

For and on behalf of the Board

For Hindustan Bio Sciences Limited

J.V.R. Mohan Raju.

Chairman

Place : Hyderabad

Date : 29-05-2015