Parabolic Drugs Ltd Directors Report.

Dear Members,

The Board of Directors of your Company presents the Twenty Second Annual Report on the affairs of the Company, together with the Audited Accounts of the Company for the year ended 31ST March, 2018.

1. FINANCIAL RESULTS:

The Financial Results for the year under review vis--vis the financial results for the previous year are as under:

(Rs. In millions)
Particulars 2017-18 2016-17
Net Sales 718 691
Profit before Depreciation, Interest & Tax (PBDIT) (253) (732)
Financial Expenses 83 99
Depreciation 216 219
Profit before Tax (PBT) (552) (1050)
Provision for Taxation:
-Current Tax
-Deferred Tax 18 31
Profit after Tax (PAT) (570) (1081)
Profits available for equity shareholders
Appropriation: - -
Proposed Dividend on Equity Shares - -
Corporate Dividend Tax - -
Balance carried to Balance Sheet (570) (1081)
Earnings per Share (Basic) Rupees (9.21) (17.46)
Earnings per Share (Diluted)Rupees (9.21) (17.46)

FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS

Your Directors are hereby reporting performance of the business operations as follows:-

Sales and Export: During the year under review, your Company achieved a turnover of Rs. 718 million as compared to Rs. 691 million in the previous year with a increase of 4%. The export of API products has also been lower at Rs. 161 million as compared to 173 million in the previous year. Total exports including trading of products have been at Rs. 232 million as compared to Rs. 307 million in previous year. The overall decrease in exports sale has been owing to unfavorable market conditions and economic stress.

Profitability: During the period, the Earnings before depreciation, interest and tax (EBDITA) has been (-) Rs. 253 million as compared to (-) Rs. 732million during the corresponding previous year. The Company incurred a loss before tax (PBT) of Rs. 552 million as compared to a loss of Rs.1050 million during the previous year. After tax adjustment of Rs. 18 million, the net loss worked out to Rs. 570 million as compared to a net loss of Rs. 1081 million in the previous year.

Assets: The net fixed assets (including work-in-progress) as at 31stMarch, 2018 were Rs. 3329 million as compared to Rs. 3554 million in the previous year.

2. DIRECTORS:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with the Articles of Association of the Company, Mr. Pranav Gupta Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible offer himself for re-appointment. Notice convening the Annual General Meeting includes the proposal for his re-appointment as the Director.

The present term of appointment of Mr. Jagjit Singh Chahal, Mr. Sanjeev Kumar and Mrs. Vandana Singla (Independent & Non Executive Director) is expiring at the ensuring Annual General meeting. The Board of Directors recommend their appointment for a further term of one year.

Mr. Ashok Jindal, CFO of the Company has resigned from the post w.e.f. 05.02.2018 and Ms. Ishrat Gill , Company secretary of the Company has resigned w.e.f. 20.12.2017 Pursuant to section 2 (51) and Section 203 of Companies Act, 2013, Mr. Pranav Gupta (Managing Director) and Mr. Vineet Gupta (Whole Time Director) are the KMPs of the Company.

Statement on Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Section 149(6) of the Companies Act, 2013 and Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements), 2015.

3. SUBSIDIARIES:

The Company has two wholly owned subsidiaries namely M/s. Parabolic Research Labs Limited and M/s. Ziven Life Sciences Limited. The consolidated Financial Statements of these subsidiaries and the Company shall be laid before the Annual General Meeting of the Company.

Pursuant to Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of its subsidiary is attached along with the Financial Statements of the Company.

4. SHARE CAPITAL:

During the year under review, the Authorized Share Capital of the Company remained unchanged at Rs. 72 Crores (divided into 7,20,00,000 Equity Shares of Rs. 10 each). The Promoters/Promoters Associates had contributed Rs 260 million as their additional contribution towards equity share capital for the allotment of 1,80,55,556 equity shares at a price of Rs. 14.40/-(face value Rs.10 and premium Rs.4.40) per equity share in terms of sanctioned CDR package. The allotment of said shares to proposed allottee (s) has been pending for want of receipt of in principle approval from the NSE.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis of financial conditions and result of operations of the Company for the Financial Year 2017-18, as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement) Regulation, 2015, are annexed hereto as a separate statement in the Annual Report.

6. CORPORATE GOVERNANCE REPORT:

The Company aimed to conduct its affairs in ethical manner and has in place a system of Corporate Governance. A separate report on Corporate Governance forming a part of the Annual Report is annexed hereto. A certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Regulation 27 of SEBI (Listing Obligations and Disclosure Requirement) Regulation, 2015 is annexed to the report on Corporate Governance.

7. AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, every company at its first Annual General Meeting, has to appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth Annual General Meeting. No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint an audit firm as auditors for more than two terms of five consecutive years. However, a time of three years has been given for the compliance of the said provisions.

The Board has recommended to appoint M/s. V.K. Jindal & Company, Chartered Accountants, Chandigarh for a period of one year who shall hold office from the conclusion of this annual general meeting till the conclusion of next annual general meeting.

8. AUDITORS REPORT:

The Auditors Report on the Annual Accounts of the Company for the year under review is self-explanatory and requires no comments. During the year, there were no instances of frauds reported by auditors under section 143(12) of the Companies Act, 2013

9. SECRETARIAL AUDITORS REPORT:

Pursuant to section 204 of the Companies Act, 2013, M/s M.L. Aggarwal & Associates, Practising Company Secretary (COP no 13944), Chandigarh was appointed by the Board to conduct secretarial audit of the Company for the FY 31st March 2018. The Secretarial Audit Report is attached as an annexure.

10. APPOINTMENT OF COST AUDITOR:

The Board of Directors has approved the appointment of M/s. Anil Sharma & Co., Cost Accountants, Chandigarh, as the Cost Auditors of the Company for the Financial Year 2017-18, subject to the approval of the Members in the ensuing Annual General Meeting of the Company. The cost audit report for the Financial Year 2017-18 will be forwarded to the Central Government as required under Law. Further, Cost Audit report for F.Y. 2016-17 has been submitted to Central Government.

11. INTERNAL CONTROL SYSTEM:

The company has in place well designed adequate internal controls with reference to financial statements. These controls ensure the accuracy and completeness of the accounting records and preparation of reliable financial statements.

12. FIXED DEPOSITS:

During the year under review, the Company has not accepted any deposits from the public in terms of the provisions of Sections 73 of the Companies Act, 2013.

13. DIVIDEND:

In view of the loss incurred by the Company during the year under review, the Board of Directors has not recommended any dividend for the Financial Year 2017-18.

14. PERSONNEL AND HUMAN RESOURCES:

Your Company continues to lay emphasis on continued qualitative growth of its human resources by providing a congenial and conducive work environment in consonance with its belief that the real strength of its organization lies in its employees.

15. INDUSTRIAL RELATIONS:

The Industrial Relations between the employees and the management remained peaceful and cordial throughout the year at all the units of the Company.

16. STATEMENT OF PARTICULARS OF EMPLOYEES: A statement of Particulars of Employees pursuant to the provisions of Section 134 of the Companies Act, 2013, is enclosed and forms a part of this report.

17. GROUP:

The Company, inter-alia with the following entities, constitutes a group:

a) PNG Trading Private Limited

b) Parabolic Infrastructure Private Limited

18. MEETINGS OF BOARD OF DIRECTORS:

The Board of Directors met Seven times during the financial year. Detail of board meeting is given in corporate governance report.

19. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:-

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

b. appropriate accounting policies have been selected and applied consistently, and have 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 31st March, 2018 and of the profit and loss of the Company for the year ended on 31st March, 2018;

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 frauds and other irregularities; and

d. the annual accounts have been prepared on a going concern basis.

e. adequate internal financial controls to be followed by the Company have been laid down and such controls were operating effectively.

f. proper and adequate systems to ensure compliance with the provisions of all applicable laws have been

devised and such systems were operating effectively.

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

Energy conservation continues to be an area of major emphasis in our Company. The Company has adopted the strategy of bringing about a general awareness amongst all regarding energy conservation.

Particulars with respect to conservation of energy and other areas as per Section 134 (3) (m) of the Companies Act, 2013, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988,are annexed hereto and form part of this report.

21 . 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:

a) M/s. J.M. Financial Asset Reconstruction Company (the lead lender) while exercising its right to enforce security interest under the SARFAESI, ACT , 2002 has taken physical possession of the unit located at Plot No. 45, Industrial Area, Phase II, Panchkula on16th March, 2018. Thereafter, M/s. J.M. Financial Asset Reconstruction Company has sold the unit on 21st May, 2018. Likewise the lender has taken symbolic possession of Companys R&D Unit located at Plot No. 280-281, Phase 1, Block -1, Alipur, industrial estates , HSIIDC, Tehsil Barwala, Haryana on16th March, 2018.

b) M/s. J.M. Financial Asset Reconstruction Company (the lead lender) the financial creditor and M/s. Weather Makers Pvt. Ltd, Laxon Drugs Pvt. Ltd. and GMP Technical Solutions Pvt. Ltd has filled applications under section 7 and section 9 of the Insolvency & Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the company before the Honorable NCLT, Chandigarh Bench, Chandigarh.

22. REMUNERATION TO DIRECTORS/EMPLOYEES AND RELATED ANALYSIS:

During the period under review, no employee of the Company received salary in excess of the limits as prescribed under the Act. Accordingly, no particulars of employees are being given pursuant to Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The details pertaining to the ratio of the remuneration of each director to the median employees remuneration and other prescribed details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment And Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith and form part of the Directors Report as Annexure I.

23. EXTRACT OF THE ANNUAL RETURN:

Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2018 forms part of this report

24 . VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 and Regulation 22 Of SEBI (Listing Obligations and Disclosure Requirements), 2015, a Vigil Mechanism/Whistle Blower Policy for Directors and employees to report genuine concerns has been established

25. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provisions of Section 135 of Companies Act, 2013 are not applicable to the Company.

26. NOMINATION AND REMUNERATION POLICY:

The Companys Nomination and Remuneration Policy formulated by the Nomination and Remuneration Committee deals with the appointment and remuneration of Directors and KMPs of the Company. The policy also covers the criteria for determining qualifications, positive attributes, independence of a Director and KMP. In terms of Section 134(3)(e) of Companies Act, 2013 the Nomination and Remuneration Policy of the Company is annexed herewith and forms part of the Directors Report.

27. RISK MANAGEMENT POLICY:

Your Company has a Risk Management Policy in place, duly approved by the Board of Directors, wherein all material risks faced by the Company are identified and assessed. For each of the Risks identified, corresponding controls are assessed and policies and procedure are put in place for monitoring, mitigating and reporting risk on a periodic basis.

28 . LISTING / DE-LISTING OF SHARES:

The Shares of your Company are presently listed on The Bombay Stock Exchange Limited, Mumbai (BSE) and National Stock Exchange (NSE).

29 . RELATED PARTY TRANSACTIONS:

Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC -2, is appended as Annexure 2 to the Boards report. Details of related party disclosures form part of the notes to the financial statements provided in this annual report.

30. PERFORMANCE EVALUATION OF THE BOARD:

This part is covered under Corporate Governance Report.

31 . ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Bankers and Business Constituents and the shareholders for their continued support to and the confidence reposed in the Company.

Your Directors also express their deep appreciation for the devoted and sincere services rendered by workers, staff and executives at all levels of the organization and we are confident that our Company will continue to receive such co-operation from them in future also.

FOR AND ON BEHALF OF THE BOARD
Sd/- Sd/-
PLACE: Chandigarh Vineet Gupta PRANAV GUPTA
DATED: 14.08.2018 Whole Time Director Managing Director