Dear Shareholders,
The Directors have pleasure in presenting their 18th Annual Report on the business and
operations of the Company and the Audited Financial Statement for the financial year ended
March 31, 2019.
| PERFORMANCE HIGHLIGHTS |
|
|
|
|
( Rs. in Lakhs) |
| Particulars |
FY 2019 |
FY 2018 |
| Income |
|
|
| Sales |
2,512.01 |
2,381.38 |
| Other Income |
5.25 |
21.94 |
| Expenditure |
|
|
| Total Operating Expenditure |
3,261.40 |
4,644.15 |
| Profit / (Loss) Before Interest, Depreciation and Tax |
(744.14) |
(2,240.83) |
| Less: Interest Paid (net) |
75.4 |
1.59 |
| Profit / (Loss) Before Depreciation and Tax |
(819.54) |
(2,242,42) |
| Less: Depreciation |
4.17 |
4.17 |
| Profit / (Loss) Before Tax |
(823.71) |
(2,246.59) |
| Less: Tax Expenses |
- |
- |
| Net Profit / (Loss) After Tax |
(823.71) |
(2,246.59) |
| Other Comprehensive Income /(Loss) |
12.60 |
(1.45) |
| Total Comprehensive Income / (Loss) for the period |
(811.11) |
(2,248.04) |
| Earnings / (Loss) per Share (Basic/ Diluted) (Rs. ) (Face Value of Rs. 10 each) |
(3.17) |
(8.65) |
DIVIDEND
In view of the losses incurred by the Company, the Directors do not recommend any
dividend for the financial year ended March 31, 2019.
OPERATIONS REVIEW
The Company is engaged in globally marketing novel healthcare solutions from natural
resources and supplying over-the-counter products. During the year, sales (including Other
Income) increased by 5% to Rs. 2,517.26 lakhs as against Rs. 2,403.32 lakhs in FY2018. The
operating expenditure for FY2019 reduced to Rs. 3,261.40 lakhs as compared with Rs.
4,644.15 lakhs in FY2018. The improved gross margins and lower employee costs resulted in
reduction of loss to Rs. 823.71 lakhs in FY2019 from Rs. 2,246.59 in FY2018.
A detailed discussion of operations for the year ended March 31, 2019 is given in the
Management Discussion and Analysis Section.
SIGNIFICANT EVENTS DURING FY 2019
Scheme of Amalgamation between the Company and Piramal Enterprises Limited (‘PEL)
In May 2018, the Board of Directors of the Company had approved the draft Scheme of
Amalgamation between the Company and PEL (‘Transferee Company) and their respective
shareholders (‘the Scheme). Upon the Scheme being approved by the National Company
Law Tribunal (‘NCLT), PEL will issue and allot 1 (one) fully paid up equity share of
face value of Rs. 2 each for every 70 (seventy) fully paid up equity shares having face
value of Rs. 10 each held by the equity shareholders of the Company, as on the Record Date
which will be determined for this purpose. The Scheme was approved by the requisite
majority of the equity shareholders of the Company (including public shareholders) at the
NCLT convened meeting of the equity shareholders held on April 2, 2019. The details are
provided under the Report on Corporate Governance forming part of this Annual Report.
STATUTORY AUDITORS AND AUDITORS REPORT
In accordance with Section 139 of the Companies Act, 2013 (‘Act), M/s Price
Waterhouse Chartered Accountants LLP (FRN 012754N/N500016), were appointed by the Members
of the Company at the 17th Annual General Meeting (‘AGM) of the Company, held on
August 2, 2018, to hold office for a period of five years until the conclusion of the 22nd
AGM of the Company to be held in the year 2023.
The requirement to place the matter relating to appointment of auditors for
ratification by Members at every AGM has been dispensed with by the Companies (Amendment)
Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for
ratification of appointment of statutory auditors at the ensuing AGM.
The Auditors Report does not contain any qualification, reservation or adverse remark
on the financial statements for the year ended March 31, 2019. The statements made by the
Auditors in their Report are self - explanatory and do not call for any further comments.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
A) Conservation of energy:
The business of the Company mainly comprises marketing/ trading of pharmaceutical
products. As such, electricity consumption is not significant.
The Company is taking measures to improve overall energy efficiency by installing power
efficient equipment. Several environment friendly measures have been adopted by the
Company such as:
• Minimising usage of air-conditioning;
• Shutting off the lights when not in use;
• Minimising the usage of papers and maximum usage of e-prints or e-folders for
data archives;
• Creating environmental awareness by way of distributing relevant information in
electronic form, encouraging conservation of energy and natural resources.
B) Technology absorption
As stated earlier, the business of the Company mainly comprises marketing/ trading of
pharmaceutical products. Hence, details relating to Technology Absorption are not
applicable.
C) Foreign Exchange Earnings and Outgo
During the year, foreign exchange earnings were Rs. 21.27 Lakhs as against an outgo of
Rs. 1.25 Lakhs.
SHARE CAPITAL
The issued, subscribed and paid-up share capital of the Company stood at Rs. 2,596.03
Lakhs as at March 31, 2019 comprising of 2,59,60,340 Equity Shares of Rs.10 each fully
paid-up. There was no change in share capital during the year under review.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in prescribed Form No. MGT-9 is annexed herewith as
Annexure A. The same is available on http://piramalphytocare.com/investors/.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act, Ms. Rashida Najmi (DIN: 07757086) retires
by rotation at the ensuing AGM and being eligible offers herself for re-appointment. The
Board recommends her re-appointment for the consideration of the Members of the Company at
the ensuing AGM.
The Company has received declarations from all its Independent Directors, confirming
that they meet the criteria of independence as prescribed under Section 149(6) of the Act,
and Regulation 16(1)(b) of the Securities Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (‘Listing Regulations).
BOARD EVALUATION
Evaluation of performance of all Directors is undertaken annually. 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 Board of Directors has expressed its satisfaction with the evaluation process.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year, four Board Meetings were convened and held, details of which are given
in the Report on Corporate Governance forming part of this Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES
The Company has established a Vigil Mechanism, which includes a Whistle Blower Policy,
for its Directors and Employees, to provide a framework to facilitate responsible and
secure reporting of concerns of unethical behaviour, actual or suspected fraud or
violation of the Companys Code of Conduct & Ethics. The details of establishment of
Vigil Mechanism/ Whistle Blower policy are posted on the website of the Company and the
weblink to the same is http://piramalphytocare.com/investors/.
AUDIT COMMITTEE
The Audit Committee comprises of the following three members:
1. Mr. Gautam Doshi – Independent Director and Chairman
2. Mr. N. L. Bhatia – Independent Director
3. Mr. Rajesh Laddha – Non-Executive Non-Independent Director
Further details on the Audit Committee are provided in the Report on Corporate
Governance forming part of the Annual Report.
NOMINATION AND REMUNERATION POLICIES
The Board of Directors has formulated a Policy which lays down a framework for
selection and appointment of Directors and Senior Management and for determining
qualifications, positive attributes and independence of Directors.
The Board has also formulated a Policy relating to remuneration of Directors, members
of Senior Management and Key Managerial Personnel.
The Nomination Policy and the Remuneration Policy are given in Annexure B to this
report and is also available on the website of the Company http://piramalphytocare.com/.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
There were no loans, guarantees or investments covered under Section 186 of the Act.
MANAGERIAL REMUNERATION
A) Remuneration to Directors and Key Managerial Personnel i. The percentage
increase in remuneration of Manager, Chief Financial Officer and Company Secretary during
FY2019 is as under:
| Name of KMP |
Designation |
% increase in Remuneration during FY 2019 |
| 1. Mr. Rajiv Salvi |
Manager |
15.21% |
| 2. Mr. Ankit Kotak |
Chief Financial Officer (w.e.f. June 1, 2018) |
N.A. |
| 3. Mr. Maneesh Sharma |
Company Secretary |
30.10% |
Notes:
A. Ratio of remuneration of each Director to median remuneration of employees -
Independent Directors do not receive any remuneration other than sitting fees for
attending Board and Committee Meetings. Details of sitting fees paid to Independent
Directors are given in the Report on Corporate Governance forming part of the Annual
Report and hence, are not included in the above table. The Non-Independent Directors do
not receive any sitting fees nor any other remuneration. Therefore, details relating to
ratio of remuneration of each Director to median remuneration of employees, is not
applicable.
B. Mr. Karthik Muralidharan ceased to be the Chief Financial Officer on May 31, 2018
and hence remuneration paid to him during FY2018 and FY2019 are not comparable in his
case.
C. Percentage increase in remuneration during FY2019, provided in the above table, has
been calculated by comparing the remuneration paid during FY2019 with the remuneration
paid during FY2018. ii. The number of permanent employees on the rolls of the Company have
decreased to 141 in FY2019 from 255 in FY2018; iii. In the financial year, there was
34.15% increase in the median remuneration of employees; iv. Further owing to the
substantial decrease in the number of employees in FY2019, the average percentage change
in the salaries of employees other than the managerial personnel in the last financial
year i.e. FY2019 is strictly not comparable. As regards change in of managerial
remuneration during FY2019, details of the same are given in the above table at Sr.
No. (i); v. It is hereby affirmed that the remuneration paid is as per the Remuneration
Policy for Directors, Key Managerial Personnel and other Employees.
B) Employee Particulars
Details of employee remuneration as required under provisions of Section 197 of the Act
and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is provided in a separate statement forming part of this Report.
Further, this report is being sent to the Members excluding the said statement. The said
statement is available for inspection of Members at the Registered Office of the Company
during working hours upto the date of the Annual General Meeting and shall be made
available to any shareholder on request. The said statement is also available on your
Companys website, the weblink to which is http://piramalphytocare.com/investors/.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Rules made thereunder, the
Company has appointed M/s. Dhrumil M. Shah & Co., Practicing Company Secretary as the
Secretarial Auditor of the Company. The Secretarial Audit Report is annexed as Annexure C
and forms an integral part of this Report. The Secretarial Audit Report does not contain
any qualification, reservation or adverse remark.
CORPORATE GOVERNANCE CERTIFICATE
The Report on Corporate Governance as stipulated in the Listing Regulations forms part
of the Annual Report.
The requisite Certificate from M/s. Dhrumil M. Shah & Co., Practicing Company
Secretary, confirming compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Listing Regulations, is annexed hereto as Annexure D and forms part of
this Report.
RISK MANAGEMENT POLICY
The Company has a robust Risk Management framework to identify, measure and mitigate
business risk and opportunities. This framework seeks to create transparency, minimize
adverse impact on the business objective and enhance the Companys competitive advantage.
This risk framework thus helps in managing market, credit and operations risks.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company complies with all applicable secretarial standards.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and systems of compliance which
are established and maintained by the Company, audits conducted by the Internal, Statutory
and Secretarial Auditors including audit of internal financial controls over financial
reporting by the Statutory Auditors and reviews by the Management and the relevant Board
Committees, including the Audit Committee, the Board is of the opinion that the Companys
internal financial controls were adequate and effective during FY2019.
The Directors state that:
(a) in the preparation of the annual financial statements for the year ended March 31,
2019, the applicable accounting standards have been followed with no material departures;
(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 the Company as at March 31, 2019 and of the loss of
the Company for the year ended on that date;
(c) the Directors have taken proper and sufficient care 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) the Directors have prepared the annual financial statements on a going concern
basis;
(e) the Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and operating effectively;
and
(f) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year, the Company had entered into contract/ arrangement/ transaction with
related parties which were on arms length basis but which were considered material in
accordance with the definition of materiality as included in the policy of the Company on
Related Party Transactions. Accordingly, the disclosure of Related Party Transactions as
required under Section 134(3)(h) of the Act in Form AOC-2 is enclosed as Annexure E.
Prior omnibus approval of the Audit Committee has been obtained on an annual basis for
transactions with related parties which are of a foreseeable and repetitive nature. The
transactions entered into pursuant to the omnibus approval so granted and a statement
giving details of all transactions with related parties are placed before the Audit
Committee for their review on a periodic basis.
Your Company has formulated a policy for dealing with related party transactions which
is also available on website of the Company at http://piramalphytocare.com/investors/.
COST AUDIT
The Company is not required to maintain cost records as specified by the Central
Government under Section 148(1) of the Act.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has always believed in providing a safe and harassment free workplace for
every individual working in Companys premises through various interventions and
practices. The Company has in place a gender neutral policy on prevention of sexual
harassment at workplace which is in line with the requirements of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints
Committee has been set up to redress complaints received regarding sexual harassment. All
employees are covered under this Policy. During the year under review, there were no cases
filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
OTHERS
The 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:
1. The details relating to deposits, covered under Chapter V of the Act, since neither
has the Company accepted deposits during the year under review nor were there any deposits
outstanding during the year.
2. Details relating to issue of equity shares including sweat equity shares and shares
with differential rights as to dividend, voting or otherwise, since there was no such
issue of shares.
3. No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and Companys operations in future.
During the year under review, no Stock Options were granted, vested or exercised. No
Stock Options are in force as on date. Hence, there are no disclosures required to be made
pursuant to the applicable requirements of the Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014.
ACKNOWLEDGMENTS
We take this opportunity to thank the employees for their dedicated service and
contribution to the Company.
We also thank our banks, business associates, shareholders and other stakeholders for
their continued support to the Company.
By Order of the Board
| N. L. Bhatia |
Rajesh Laddha |
| Director |
Director |
Mumbai
May 7, 2019
+91-9892691696
