Parmax Pharma Ltd Directors Report.

Dear Shareholders,

The Board of Directors are pleased to present their 26th Annual Report on the business and operations of the Company and the Audited financial accounts for the Year ended 31st March, 2020.

Financial Results:

(In Rs.)

Particulars For the year ended on 31st March, 2020 For the year ended on 31st March, 2019
Net Total Income 21,03,18,868 12,06,08,346
Less: Operating and Admin. Exps. 19,29,40,975 10,93,24,583
Profit before depreciation and Taxes 1,73,77,893 1,12,83,763
Less: Depreciation 1,00,71,526 1,03,02,507
Less: Extraordinary/Exceptional Items 0 0
Net Profit/(Loss) on sale of Fixed Assets 0 0
Profit before Tax (PBT) 73,06,367 9,81,256
Less: Taxes (including deferred tax and fringe benefit tax) 30,19,577 1,94,259
Profit after Tax (PAT) 42,86,790 7,86,997
Balance Available for appropriation 61,28,452 18,41,662
Which the Directors propose to appropriate as under:
(i) Proposed Dividend NIL NIL
(ii) Corporate Dividend Tax NIL NIL
Surplus Carried to Balance Sheet 42,86,790 18,41,662
Earnings Per Equity Share
Basic 1.15 0.21
Diluted 0.00 0.00

Covid 19 Pandemic:

In the last quarter of the financial year 2019-20, the corona virus disease developed rapidly into a global pandemic with many governments declaring lockdowns forcing citizens to stay indoors and complete disruption of all the economic activities resulting into unprecedented economic disruption globally and in India. Being manufacturers of APIs and hence provider of essential services and exempted from lockdown, the manufacturing facilities of your Company continued with the manufacturing operations at its manufacturing site albeit with initial challenges such as shortage of manpower, availability of raw materials, packing materials and disruptions in the logistics and supply chain. Your Company is continuously monitoring the situation closely and has taken/continue to take all the measures to comply with the guidelines issued by the local authorities, from time to time, to ensure the safety of its workforce across all its manufacturing plant, R&D center and the office. The continued manufacturing and supply of active pharmaceutical ingredients .

Your Company is also confident that the inherent business model of the Company, which to a great extent is resilient to such market disturbances, will navigate the challenges which are ahead of us and that the Covid-19 pandemic generally is not expected to impact Companys capital and financial resources, assets, profitability, liquidity position and ability to service debts. However, the extent to which the Covid-19 pandemic may impact the Company, its operations and financials will depend on future development in this regard which as we write this report are highly uncertain.

Highlights of Performance:

The company has posted a satisfactory performance for the year under review. The total revenue of the Company has increased from Rs. 12,06,08,346 to 21,03,18,868 (increased by 74%). The profit before tax of the Company has increased from Rs. 9,81,256/- to Rs.73,06,367/-. The net profit after tax has increased from Rs. 7,86,997/- to Rs. 42,86,790/-.We remained resolute and relentless in our quest for strengthening our cost-competiveness, better management of working capital and operational excellence across all businesses.

Dividend:

Keeping in view the financial results and in order to conserve financial resources for the future requirement of the fund, your Board of Directors do not recommend any dividend during the year under review.

Public Deposits:

The Company has accepted deposits of Rs. 25 Lakh from Relative of Directors and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the relative of Director contravenes.

Subsidiary/ Joint Venture/ Associate Company:

As on 31st March, 2020, Your Company has NIL Subsidiary/Joint Venture/ Associate Company.

Depository System:

As members are aware, the companys shares are compulsorily tradable in the electronic form. As on March 31, 2020 almost 64.86% of the Companys total paid-up capital representing 24,26,560 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

Extract of Annual Return as per Section 92 (3) Of Companies Act, 2013:

The details forming part of the extract of the Annual Return in form MGT 9 is not annexed herewith and it is placed on Company s website i.e. www.parmaxpharma.com.

Board meetings held during the financial year 2019-20:

Sr. No. Date on which board Meetings were held Total Strength of the Board No. of Directors Present
1 26.04.2019 7 4
2 30.05.2019 7 6
3 09.08.2019 7 5
4 27.08.2019 7 4
5 14.11.2019 7 5
6 13.01.2019 7 5
7 12.02.2020 7 5

Attendance of directors at board meetings held during the financial year 2019-20:

Sr. No. Name of Directors No. of Meeting No. of Meeting
Held Attended
1 Alkesh M Gopani 7 3
2 Alkesh R Gosalia 7 7
3 Umang A Gosalia 7 7
4 Vipul Gopani 7 1
5 Asha S Daftary 7 6
6 Pramay A Chhatra 7 5
7 Ami R. Shah 7 5

Directors and Key Managerial Personnel:

In terms of Section 152 of the Companies Act, 2013, Mr. Umang Alkesh Gosalia (DIN: 005153830) is liable to retire by rotation at forthcoming AGM and being eligible offers himself for re-appointment. A brief resume of director being re-appointed with the nature of their expertise, their shareholding in the Company as stipulated under as required under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this Notice of the ensuing Annual General Meeting. The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 164 of the Companies Act, 2013.

Matters As Prescribed Under Sub-Sections (1) And (3) Of Section 178 Of The Companies Act 2013:

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the Committee, is appended in the Corporate Governance Report.

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual evaluation of its own performance, the directors individually, as well as the evaluation of the working of its Committees. At the meeting of the Board all the relevant factors that are material for evaluating the performance of individual Directors, the Board and its various committees were discussed in detail. A structured questionnaire each for evaluation of the Board, its various Committees and individual Directors was prepared and recommended to the Board by Nomination & Remuneration Committee for doing the required evaluation after taking into consideration the input received from the Directors covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties, obligations and governance etc.

AUDITORS:

Statutory Auditors

Company had appointed M/s BA Shah SR Mehta & Co., Chartered Accountants, Rajkot for the purpose of carrying out Statutory Audit of the Company.

Secretarial Auditor

Mr. Samsad Alam Khan, Practicing Company Secretaries is re-appointed to conduct the secretarial audit of the Company for the financial year 2020-21, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. Your Company has received consent from Mr. Samsad Alam Khan to act as the auditor for conducting audit of the Secretarial records for the financial year ending 31st March, 2021. The secretarial audit report for FY 2019-20 forms part of the Annual Report as ‘Annexure A to the Boards report.

Directors Response to Secretarial Audit Report and Audit Report:-

Your Board of Directors would like to clarify the qualification remarks made in Secretarial Audit Report as under:-

Qualification/ Adverse Remark Explanation :
1. The Company has accepted deposits of Rs. 25 Lakh from Relative of Directors and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the relative of Director is contravene. The Board is in process of complying with Section 74 of Companies Act, 2013 regarding Acceptance of deposits.
? Company has not complied with the provisions of Section 74 of the Companies Act, 2013 regarding acceptance of deposits.

Directors Response to Secretarial Audit Report and Audit Report:-

The Company has accepted deposits of Rs. 25 Lakh from Relative of Directors and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the relative of Director is contravening. Staff Professional tax amounts payable Rs. 2,12,760/- in respect of the above were in arrears as at March 31, 2020 for a period of more than six months from the date on when they become payable. The Board is in process of complying with Section 74 of Companies Act, 2013 regarding Acceptance of deposits.
As competent authority for collecting Professional Tax from the Company is Gram Panchayat and as per general practice prevailing they collect outstanding amount in the next year from the amount due hence Company will pay outstanding in due course.

Internal Auditor

The Board appointed M/s. B A Shah & Associates., Chartered Accountants (Firm Registration Number:- 109493W) hereby appointed as Internal Auditor of the company for the financial year 2020-21. The report prepared by the Internal Auditors is to be reviewed by the Statutory Auditors & Audit Committee.

Internal Financial Control System and Their Adequacy:

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this report.

Particulars of Loans, Guarantees or Investments under section 186:

Details of Loans, Guarantees and Investments under the provisions of Section 186 of the Companies Act, 2013 are not applicable to the Company.

Audit Committee:

The composition and the functions of the Audit Committee of the Board of Directors of the Company is disclosed in the Report on Corporate Governance, which is forming a part of this report.

Related Party Transactions:

All the related party transactions entered into during the financial year were on an arm s length basis and were in the ordinary course of business. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is attached in "Annexure B".

Particulars of Employees:

A statement containing the names and other particulars of employees in accordance with the provisions of section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as "Annexure C" to this report.

No employee has received remuneration in excess of the limits set out in rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during FY 2019-20.

Significant and material orders passed by the Regulators or Courts:

There are no significant material orders passed by the Regulators / Courts during the Financial year 2019-20 which would impact the going concern status of the Company and its future operations.

Material Changes:

There are no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of the directors report.

Reserves:

The Company has proposed to transfer Rs. 42,86,790/- profit of the Company to the General Reserve for this year.

Employee stock option:

The Company has not issued any Employee Stock Option during the Financial year 2019-20.

Cash flow analysis:

The Cash Flow Statement for the year under reference in terms of Regulation 34(2) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the stock exchanges forms part of the Annual Report.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo:

A) Conservation of Energy:

Your company is serious in conserving energy by reducing consumption of power by implementing closed monitoring over plan running and adequate maintenance of electric components of plants and other machinery. Company has made capital investment towards the conservation of energy.

B) Technology absorption:

Your company has made serious efforts towards technology absorption and accordingly Company has imported the Gas Chromatograph technology for research and development purpose.

C)Foreign Exchange earnings and outgo:

Foreign Exchange inflow (Rs.): NIL

Foreign Exchange outflow (Rs.): 10,47,672/-

During the year under review, no complaint was filed with the Company with respect to Sexual Harassment of Women at Workplace.

Corporate Governance:

As per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on "Corporate Governance" is attached and forms a part of Directors Report. A Certificate from the Practicing Company Secretaries regarding compliance of the conditions of Corporate Governance as stipulated under the Listing Regulation is annexed to this Report.

By Order of the Board Of Directors
For, Parmax Pharma Limited
Date: 15th September, 2020 Sd/-
Place: Rajkot Alkesh R. Gosalia
Managing Director
(Finance and Operations)