Par Drugs & Chemicals Ltd Directors Report.

Dear Members,

Your Directors have immense pleasure in presenting the Twenty First Annual Report on the business and operations of the Company together with the Audited Financial Statements of your Company for the financial Year ended March 31st, 2020.

The Director Report is prepared based on the standalone financial statements of the company and the Report on the performance and financial position of the Company.

1. FINANCIAL RESULTS:

(Amount in t

Particulars For the Year ended 31st March, 2020 For the Year ended 31st March, 2019
Revenue from Operations 55,84,86,873 46,32,33,307
Other Income 9,85,557 8,87,016
Total Revenue 55,94,72,431 46,41,20,323
Less: Total Expenses (excluding Depreciation) 47,19,38,617 40,08,33,692
Profit Before Depreciation &Tax 8,75,33,814 6,32,86,631
Less: Depreciation 2,76,15,126 3,03,69,939
Profit Before Tax 5,99,18,687 3,29,16,692
Less:(i) Current Tax 1,00,00,000 67,80,000
(ii)Deferred Tax 22,68,830 10,26,248
Net Profit/(Loss) For The Year 4,76,49,857 2,51,10,444
EPS (Basic & Diluted) 7.75 5.60

2. Performance Review

1. The Company is engaged in the Manufacturing business of Active Pharma Ingredients ("APIs"), Antacid Molecules and other chemicals and pharmaceutical products. Our product portfolio presently comprises 18 APIs and10 Fine Chemical which are marketed domestically and exported.

2. The highlights of the Companys performance are as under:-

• Revenue from operations is increased to t 55,84,86,873/-during the current year compared to previous year of t 46,32,33,307/- i.e. the variation in the current year is approx 20.56%.

• Net Profit after tax for the current yearincreased substantially to t 4,76,49,857/-compared to the previous year of t 2,51,10,444/- i.e. variation in the current year is approx 89.76%

• Earnings per share increased to t 7.75 per share as compared to t 5.60 per share during the previous year i.e. variation in the current year is approx. 38.19%

The Company is making all out efforts for presenting better& better results. The Company is also redefining its marketing strategies so as to capture increased market share. Looking to the volatile market conditions, the Company management needs to be much alert all the times to have better business prospects and profitability.

3. MARKET PRICE DATA:

Our Company has listed on NSE Emerge platform this year on May 16, 2019. With NSE-Emerge having Symbol - PAR (NSE Emerge), ISIN: INE04LG01015. The following table showsHigh, Low (based on daily closing prices) and number of equity shares traded during each month in the FY 2019-20 on NSE- Emerge*;

Date High (?) Low (? ) Volume No of Trades
May-2019 50.2 48.8 34000 17
June-2019 51.2 41 292000 145
July-2019 56 46.2 298000 147
August-2019 49.5 44.7 58000 29
September-2019 47.9 45 14000 5
October-2019 47.7 43 30000 15
November-2019 50.85 43.1 42000 17
December-2019 46.4 38.9 152000 58
January-2020 40.5 37 58000 26
February-2020 39.6 34 102000 37
March-2020 42.8 26.2 298000 105

4. CHANGE IN THE BUSINESS OF THE COMPANY:

Company continues to operate only in one segment i.e. manufacturing business of Active Pharma Ingredients ("APIs"), Antacid Molecules and other chemicals and pharmaceutical products and there is no change in the nature of business of the company occurred during the year.

5. DIVIDEND:

Based on the Companys performance with the approval of the Board of Directors on 11th November, 2019, our Company paid an interim dividend of ^ 1.25/- per equity share of face value of ^ 10/- each, to shareholders who were on the register of members as on 25thNovember, 2019, being the record date fixed for this purpose.

The Board of Directors has recommendedfinal dividend of Rs 1.25 per equity share (12.50% on the face value of Rs 10/- each) on the paid up share capital of the Company for financial year ended on March31, 2020 amounting to ^ 76,90,398/-, which if declared, at the ensuing Annual General meeting scheduled on July 21, 2020,will be paid to those shareholders whose names appear in the Register of members as at closing hours of business onJuly13,2020 (Record date). In respect of shares held in electronic form, the dividend will be paid on the basis of beneficial ownership furnished by the depositories viz., NSDL and CDSL for this purpose. The Register of Members and Share Transfer Books will remain closed from Tuesday, July 14, 2020 to Tuesday, July 21, 2020 (both days inclusive).

Thus, the total dividend remains ^2.50/- per equity share during the F.Y. 2019-20 which includes interim dividend.

6. TRANSFER TO RESERVE:

Pursuant to provisions of Section 134(1)(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.

Further, there are no changes in Capital Reserve. Security premium amounting to ^ 6,85,52,000 added to security premium. During the year an amount of ^4,76,49,857/- transferred to the Surplus in the Statement of Profit & Loss and whereas earlier income tax liability amounting to Rs.1,04,362/-,Interim Dividend to Equity Shareholders amounting of Rs.76,90,398/-, Interim Tax on Dividend amounting to Rs. 15,80,783/- and Proposed Dividend to Equity Shareholders amounting to Rs. 76,90,398/- utilized from the same.

7. IPO PROCEEDS AND DEPLOYMENT OF FUNDS:

The Company has successfully come up with an Initial Public Offer (IPO) of 16,72,000 Equity Shares of face value of ^ 10 each for cash at a price of Rs 51/- each, aggregating to Rs 852.72 lakhs of equity shares of the company on May 3, 2019, Friday which was closed on May 08, 2019, Wednesdayand equity shares of the company listed on NSE SME EMRGE platform on May 16, 2019.

Statement of deviation / variation in utilization of funds raised during 2019-20:

Srn. Original Object Modified Object, if any Original Allocation Modified allocation, if any Funds Utilized Amount of Deviation/Variation for the quarter according to applicable object
1 Funding of the working capital requirement of the Company N.A 700.00 N.A 700.00 Nil
2. General Corporate Purpose N.A 88.72 N.A 88.72 Nil
3. Issue Expenses 64.00 N.A 64.00 Nil
Total 852.72 852.72

The total money raised for the purpose of working capital requirement of the Company is Rs. 700.00 Lakh out of which actual utilization till 30th September, 2019 was ^ 554.47 Lakh which had been already disclosed to NSE vide our letter reference. PAR/CS/NSE/2019-20/12 dated October 26, 2019. Further the remaining^ 145.83 Lakh has been utilized for the same object during next half ended 31st March, 2020.

Further issue related expenses of Rs 64.00 Lakh has been already utilized during the previous half year ended on 30th September, 2020 which was already disclosedto NSE vide our letter reference. PAR/CS/NSE/2019-20/12 dated October 26, 2019.

Thus, total of IPO Proceed of Rs 852.72 Lakh has already been utilized during the F.Y.2019-20 ended 31st March, 2020 without changing of object of the Utilization of fund as mentioned in the offer document of the Company.

8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

Material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this rept are as under:

• The Company has successfully come up with an Initial Public Offer (IPO) of equity shares of the company on May 3, 2019 and equity shares of the company listed on NSE SME EMRGE pl. .form on May 16, 2019.

• The issue size was ^ 852.72 lakhs consisting of 16,72,000 Equity Shares of face value of 10 each for cash at a price of ^ 51/- each (Face value ^ 10/- per share and premium of ^ 41/- per share).

9. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2020.

The Board has adopted the observation given by internal auditor of the Company that the manual system of records shall be replaced with the computerized system so as to assess the movement of the inventories at each level and its reports on day to day basis and the valuation of inventory system shall be replaced from the last purchase cost of raw materials to the moving weighted average.

Further, the Board has adopted procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

All the transactions are propery authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Management of the Company and internal auditor checks and verifies the internal control and monitors them in accordance with.

10. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS:

As there are no any significant and material orders were passed by any regulators and/or courts and tribunals during the year under review which may have the impact on the going concern status and companys operations in future.

11. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint Venture or Associate Company.

12. DEPOSITS:

The Company has neither accepted nor renewed any deposits falling within the purview of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time, during the year under review.

13. AUDITORS & AUDITORS REPORT:

Statutory Auditors:

M/s. V Dhamsania & Associates, Chartered Accountants (FRN: 132499W), Statutory Auditors of the company holds the office up to the thiforth coming Annual General Meeting of the company and are recommended for re-appointment as Statutory Auditors of the company till the conclusion of the next Annual General Meeting of the Company to be heldfor the F.Y. 2020 -21 at such remuneration including out of pocket expenses and other expenses as may be mutually agreed by and between the Board of Directors and the Auditor.

As required under the provisions of Section 139 of the Companies Act, 2013, company has obtained confirmation from M/s. V Dhamsania & Associates that their appointment, if made, would be in conformity with the limits specified in the said Section.

Boards comment on the Auditors Report:

Audit report to the Shareholders does not contain any qualification, reservation or adverse remarks. The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self-explanatory and does not call for any further comment.

Secretarial Auditor:

Pursuant to provisions of Section 204 of the Companies Act, 2013, Board of Directors have appointed M/s. DG Patel & Associates, Practicing Company Secretaries (C.P. No.: 13774) as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2019-20.

Secretarial Auditors Report:

The Secretarial Audit Report for the financial year ended 31st March, 2020 is self-explanatory and does not call for any further comments.

There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor.

The Secretarial Audit Report for the financial year ended 31st March, 2020 is annexed herewith as Annexure - I to this report.

Internal Auditor:

As per Section 138 of Companies Act 2013, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors.

During the year under review, M/s Siddhpura & Co., Chartered Accountants was appointed as Internal Auditors to conduct internal audit as per agreed scope of works pursuant to the provision of section 138 of Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

GST Auditor:

The Board of directors had appointed M/s. V Dhamsania & Associates as GST Auditors of the Company for financial year 2019-20.

14. DETAILS OF FRAUD REPORTING BY AUDITOR:

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud.

15. MAINTENANCE OF COST RECORDS& COST AUDIT:

Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 is required by the Company and accordingly such accounts and records are made and maintained. Requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 is not applicable to the company.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

16.1 Composition of Board of Directors:

The Board of Directors of Company is a balanced one with an optimum mix of Executive and Non Executive Directors. The Board of the Company is headed by an Executive Chairman.

As on 31st March, 2020, the Board of Company consists of following Directors:

Sr. No. Name of Director & DIN Category Age in Years No. of Directorship in other companies No. of membership &Chairmanship of committees in other Public Limited Company
1. Mr. Falgun Vallabhbhai Savani DIN:00198236 Chairman and Managing Director (Promoter) 45 NIL NIL
2. Mr. Jignesh Vallabhbhai Savani DIN:00198203 CEO and Executive Director (Promoter) 42 NIL NIL
3. Mr. Ghanshayambhai Bhagvanbhai Savani DIN: 03055941 Whole Time Director (Promoter Group) 49 NIL NIL
4. Mrs. Shilpa Falgunbhai Savani DIN:00198250 Non-Executive Director (Promoter Group) 40 NIL NIL
5. Mrs. Nayna Jignesh Savani DIN:00198189 Non-Executive Director (Promoter Group) 41 NIL NIL
6. Mr. Pravin Manjibhai Bhayani DIN:08332851 Non-Executive Independent Director 48 NIL NIL
7. Mrs. Krishna Mitulbhai Shah DIN:08317678 Non-Executive Independent Director 40 NIL NIL
8. Mrs. Kajal Chintanbhai Vaghani DIN:08317641 Non-Executive Independent Director 40 NIL NIL

Notes:

j(i) Chairmanship/Membership of Committee only includes Audit Committee and Stakeholders Relationships Committee in Indian Public Limited companies other than Par Drugs and Chemicals Limited. Members of the Board of the Company do not have membership of more than ten Board-level Committees or Chairperson of more than five such Committees.

(ii) None of the directors are related to each other than Mr. Falgun Vallabhbhai Savani, Mrs. Shilpa Falgunbhai Savani, Mr. Jignesh Vallabhbhai Savani, Mrs. Nayna Jignesh Savani, Mr. Ghanshayambhai Bhagvanbhai Savani, are related to each other.

(iii) Details of Director(s) retiring or being re-appointed are given in notice to Annual General Meeting.

(iv) Brief profiles of each of the above Directors are given in the beginning of the report.

16.2 Key Managerial Personnel (KMP):

As on 31st March, 2020, Mr. Falgun Vallabhbhai Savani, Chairman & Managing Director; Mr. Jignesh Vallabhbhai Savani, Chief Executive Officer; Mr. Chintan Pratapbhai Chauhan, Chief Financial Officer and Mr. Sanket Bhupendrabhai Trivedi, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act,2013. There is no change in Key Managerial Personnel during the year under review.

16.3 Directors retiring by rotation:

In terms of section 152 of the Companies Act, 2013, Mr. Ghanshayambhai Bhagvanbhai Savani, Wholetime Director (DIN: 03055941) and Mrs. Shilpa Falgunbhai Savani, Non-executive Director (DIN: 00198250), who retires by rotation and being eligible offers themselves for re-appointment. Based on the performance evaluation and recommendation of the nomination and remuneration committee, the Board recommends their reappointment.

A brief resume of Director being re-appointed along with the nature of his expertise, his shareholding in the Company and other details as stipulated under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as an annexure to the Notice of the ensuing Annual General Meeting.

16.4 Meetings of Board of Directors:

Details of the Board Meetings held during the Financial Year ended 31st March, 2020 are as under. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013.

Meeting No. Date of Board Meeting Total no. of Directors No. of Directors present
1/2019-20 10-04-2019 8 8
2/2019-20 22-04-2019 8 8
3/2019-20 23-04-2019 8 8
4/2019-20 25-04-2019 8 8
5/2019-20 14-05-2019 8 8
6/2019-20 27-06-2019 8 6
7/2019-20 03-10-2019 8 5
8/2019-20 11-11-2019 8 6
9/2019-20 23-01-2020 8 6

The names of members of the Board and their attendance at the Board Meetings are as under:

Name of the Directors Number of Meetings which Director was entitled to attend Number of Board Meetings attended during the F.Y. 2019-20
Mr. Falgun Vallabhbhai Savani 9 9
Mr. Jignesh Vallabhbhai Savani 9 9
Mr. Ghanshayambhai Bhagvanbhai Savani 9 9
Mrs. Shilpa Falgunbhai Savani 9 5
Mrs. Nayna Jignesh Savani 9 9
Mrs. Krishna Mitulbhai Shah 9 8
Mrs. Kajal Chintanbhai Vaghani 9 5
Mr. Pravin Manjibhai Bhayani 9 9

16.5 Board Committees and their Meetings:

1. Audit Committee:

The Audit Committee comprises of four members with three Independent Directors and one Executive Director as on 31st March, 2020. The Committee was reconstituted by inclusion of Mrs. Krishna Mitulbhai Shah as a member of the Committee on w.e.f October 7, 2019

The Composition of the Committee as on March 31, 2020 and its attendance for meetings held during the year is set out below:

Name of Member Category Status No. of meeting attended/ held
Mr. Pravin Manjibhai Bhayani Non-Executive & Independent Director Chairman 5/5
Mrs. Kajal Chintanbhai Vaghani Non-Executive & Independent Director Member 3/5
Falgun Vallabhbhai Savani Non-Executive & Independent Director Member 5/5
Mrs. Krishna Mitulbhai Shah* Non-Executive & Independent Director Member 2/5

* Mrs. Krishna Mitulbhai Shah appointed w.e.f. October 7, 2019

Meeting No. Date of Audit Committee Meeting Total no. of Member No. of Member present
1/AC/2019-20 10-04-2019 3 3
2/AC/2019-20 27-06-2019 3 3
3/AC/2019-20 03-10-2019 3 3
4/AC/2019-20 11-11-2019 4 3
5/AC/2019-20 23-01-2020 4 3

The Chairman of the Committee has attended the last Annual General Meeting of the Company held on 27th April, 2019.

2. Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of three members with two Independent Directors and one Non-executive Director as on 31st March, 2020.

The Committee met one time during the year i.e. on April10, 2019. The Composition of the Committee as on March 31, 2020 and its attendance for meetings held during the year is set out below:

Name of Member Category Status No. of meeting attended/ held
Mr. Pravin Manjibhai Bhayani Non-Executive & Independent Director Chairman 1/1
Mrs. Krishna Mitulbhai Shah* Non-Executive & Independent Director Member 1/1
Mrs. Nayna J. Savani Non-Executive Director Member 1/1

3. Stakeholders Relationship Committee:

Company has constituted a Stakeholders Relationship Committee to redress complaints of the shareholders. The Stakeholders Relationship Committee comprises of three members with two Independent Directors and one Non-executive Director as on 31st March, 2020.

The Committee met one times during the year i.e. on November 11, 2019. The Composition of the Committee as on March 31, 2020 and its attendance for meetings held during the year is set out below:

Name of Member Category Status No. of meeting attended/ held
Mr. Pravin Manjibhai Bhayani Non-Executive & Independent Director Chairman 1/1
Mrs. Krishna Mitulbhai Shah Non-Executive & Independent Director Member 1/1
Mr. Jignesh Vallabhbhai Savani Non-Executive Director Member 1/1

4. CSR Committee:

There was no requirement of CSR activity pursuant of Section 135 of Companies Act, 2013. Though, the board of directors have formulated the CSR Committee on January 23, 2020i n order to take corporate initiative to assess and take responsibility for the companys effects on the environment and impact on social welfare.

There was no meeting held during the F.Y. 2019-20. The CSR Committeecomprises of three members with two Independent Directors and one Non-executive Director named Mr. Pravin Manjibhai Bhayani, Non-Executive & Independent Director, Mrs. Krishna Mitulbhai Shah, Non-Executive & Independent Director andMrs. Nayna J. Savani, Non -executive Director as a Chairman& Members of Committee respectively as on March 31, 2020.

16.6 Details of Remuneration paid to Directors/KMPs:

Name of Director/KMP Designation Remuneration p.a. (in l)
Mr. Falgun Vallabhbhai Savani Chairman & Managing Director 43,00,008
Mr. Jignesh Vallabhbhai Savani CEO and Executive Director 42,98,008
Mr. Ghanshayambhai Bhagvanbhai Savani Wholetime Director 43,00,008
Mrs. Shilpa Falgunbhai Savani Non-Executive (Director 5000*
Mrs. Nayna Jignesh Savani Non-Executive Directs. 9000*
Mrs. Krishna Mitulbhai Shah Non-Executive Independent Director 8000*
Mrs. Kajal Chintanbhai Vaghani Non-Executive Independent Director 5000*
Mr. Pravin Manjibhai Bhayani Non-Executive Independent Director 9000*
Mr. Sanket Bhupendrabhai Trivedi Company Secretary& Compliance Officer 3,20,182
Mr. Chintan Pratapbhai Chauhan CFO 4,20,003

*Sitfng Fees

16.7 Policy on appointment and remuneration to Directors, KMP &Senior Management Personnel:

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013is available on the website of the company www.pardrugs.com.

16.8 Code of Conduct:

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company which is posted on the website of the Company www.pardrugs.com.

16.9 Insider Trading:

As per SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has devised the Code of Conduct to regulate, monitor and report trading in Companys securities by persons having access to unpublished price sensitive information of the Company. The Company Secretary is the Compliance Officer for the purpose of this code.

16.10 Familiarization Programme for Independent Director:

The Independent Directors are veryenthusiastic to get involved in the activity of the Company and on continuous basis they are in constant touch with the executive directors of the Company and also they have taken part in the activity like to visit Companys plants, where plant heads appraise them of the operational and sustainability aspects of the plants to enable them to have full understanding on the activities of the Company and initiatives taken on safety, quality, CSR, Sustainability etc. Further detailed programme is available on the website of the company www.pardrugs.com.

17. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Compliance Committees.

18. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors confirming that they meet criteria of independence as prescribed under Section 149(6) of the Companies. Act, 2013 and under Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. Pursuant to Ministry of Corporate Affairs Notification, dated October 2, 2019 all the Independent Directors of the Company have already registered themselves on IICA.

19. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTU/S 186 OF THE COMPANIES ACT, 2013:

During the reporting period, your Company has not granted any loans, guaranteesor made investments or provided securities in violation of Section 186 of the Companies Act, 2013 and rules thereof. Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements forming part of this annual report.

20. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in Form No.MGT-9 as required under Section 92 of the Companies Act, 2013 for the financial year ending March 31, 2019 is annexed hereto as Annexure - II and forms part of this report.

The Annual return of the Company for FY 2018-19 has been placed on the website of the Company and available at www.pardrugs.com. The Company will also place annual return in Form No MGT-7 for FY 2019-20 on completion of ensuing annual general meeting of shareholders of the Company.

21. SHARE CAPITAL:

Initial Public Offer and Listing of Shares:

The Company has successfully come up with an Initial Public Offer (IPO) of 16,72,000 Equity Shares of face value of ^ 10 each for cash at a price of ^ 51/- each, aggregating to ^ 852.72 lakhs of equity shares of the company on May 3, 2019,Friday which was closed on May 08, 2019, Wednesday and equity shares of the company listed on NSE SME EMRGE platform on May 16, 2019.

16,72,000 Equity Shares of Face value ^ 10/- per share were allotted at ^ 51/- per share (including a premium of ^ 41/- per share) on May 14, 2019 pursuant to the said IPO.

Authorized Share Capital:

The authorized share capital of the Company is ^ 8,75,00,000/-(Rupees Eight Crore Seventy Five Lacs Only) divided into 8750000 (Eighty Seven Lacs Fifty Thousands)Equity Shares of ^10/- (Rupees Ten only) each.

Paid up Share Capital:

At present, Paid up Share Capital of the company is ^ 6,15,23,180/- (Rupees Six Crores Fifteen Lakhs Twenty Three Thousands One Hundred and Eighty Only) divided into 61,52,318 Equity Shares of ^ 10/- (Rupees Ten Only) each.

Buy Back of Securities:

The Company has not bought back any of its securities during the year under review.

Sweat Equity:

The Company has not issued any Sweat Equity Shares during the year under review.

Bonus Shares:

No Bonus Shares were issued during the year under review.

Employees Stock Option Plan:

The Company has not provided any Stock Option Scheme to the employees.

22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

There were no:ontracts or arrangements with related parties during the year under review under Section 188 of the Companies Act, 2013 and hence disclosure in the Form AOC-2 is not applicable. Further, the disclosure of transactions with related party for the year, as per Accounting Standard 18 Related Party Disclosures is given in Note no. 31to the Balance Sheet as on 31st March, 2020.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Companies Act 2013, the rules made thereunder and the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015. This policy was considered and approved by the Board and has been uploaded on the website of the Company at www.pardrugs.com.

23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO:

A. Conservation of Energy& Technology Absorption:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have been furnished considering the nature of activities undertaken by the company during the year under review is annexed hereto as Annexure - III and forms part of this report.

B. Foreign Exchange earnings and Outgo:

Foreign Earnings: ^ 8,52,81,909/- Foreign Outgo: ^ 25,70,425.22/-

24. PARTICULARS OF EMPLOYEES:

During the year under review, none of the employees of the Company were in receipt of remuneration exceeding Rs. 1,02,00,000/- p.a., if employed throughout the year or Rs. 8,50,000/- p.m. if employed for part of the year. Further, statement containing particulars of employees under Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) 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 Companyfor the financial year 2019 -20 and the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary in the financial year 2019-20:

Name of Director Remuneration

Ratio of Remuneration of director to median remuneration of employee

% Increase/Decrease
Mr. Falgun Vallabhbhai Savani Chairman & MD 43,00,008/-

29.21:1

Not Applicable
Mr. Jignesh Vallabhbhai Savani Director & CEO 42,98,008/-

29.21:1

Not Applicable
Mr. Ghanshayambhai Bhagvanbhai Savani Whole time Director 43,00,008/-

29:21:1

Not Applicable
Chintan P. Chauhan CFO 4,20,003/- 2.85:1

Not Applicable

Sanket B. Trivedi CS 3,20,182/- 2.18:1

Not Applicable

Total 1,36,38,209/-

Note: Independent Directors and other Non-executive directors are entitled to siffing fees as

mentioned in point no. 16.6 above.

2. Median remuneration of employee during the year of the company is 1,47,204.00/-

3. The percentage increase in the median remuneration of employees during the financial year:15%

4. There were 96 employees are on the rolls of the company as on 31st March, 2020

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

a. Average increase in remuneration of employees excluding KMPs: 15%.

b. Average increase in remuneration of KMPs: Not Applicable

c. KMP salary are decided based on the Companys performance, individual performance, inflation.

6. Affirmation that the remuneration is as per the Remuneration Policy of the Compan;

The Company affirms remuneration is as per the Remuneration Policy of the Company

25. RISK MANAGEMENT POLICY:

At Par Drugs and Chemicals Limited, risks are measured, estimated and controlled with the objective to mitigate adverse impact. Your companys fundamental approach to risk management includes to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The Company has adopted a risk management policy which inter alia, sets out our approach towards risk assessment, risk management and risk monitoring, which is periodically reviewed by the Board. The said policy is available atwww.pardrugs.com.

26. CORPORATE SOCIAL RESPONSIBILITY:

The provisions of the Corporate Social Responsibility was not applicable to the company for the financial year 2019-20. However, the said provisions shall be applicable to the company from the financial year 2020-21 pursuant to Section 135 of the Companies Act, 2013. Company has already formed the CSR Committee and shall comply with the other applicable provisions related to Corporate Social Responsibility as and when required.

27. VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.pardrugs.com.

28. HUMAN RESOURCES:

During the period under review, the personal and industrial relations with the employees remained cordial in all respects. The management has always carried out systematic appraisal of performance and imparted training at periodic intervals.

29. CORPORATE GOVERNANCE:

Since our Company listed on SME-Emerge, the provisions relating to Corporate Governance is not applicable to the company.

30. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. Internal Complaint Committee is set up to redress complaints received regularly. There were no complaints received and reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

31. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a) In the preparation of the annual accounts, the applicable accounting standards had been followed alongwith 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 ad 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 the 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;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

f) The Directorshad devised proper systems to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.

32. COMPLIANCE WITH SECRETARIAL STANDARDS:

The company has complied with the applicable mandatory Secretarial Standards issuectime to timeby the Institute of Company Secretaries of India.

33. ACKNOWLEDGMENT

Your Directors would like to express their sincere appreciation for the assistance and cooperation received from the banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and wor kers.

For & On Behalf of Board of Directors

PAR DRUGS AND CHEMICALS LIMITED

Date: 15thJune, 2020
Place: Vadodara Sd/- Sd/-
(Falgun V. Savani) (Jignesh J. Savani)
Chairman & Managing Director Director & CEO
(DIN:00198236) (DIN: 00198203)