Parmax Pharma Ltd Directors Report.

Dear Shareholders,

The Board of Directors are pleased to present their 27th Annual Report on the business and operations of the Company and the Audited financial accounts for the Year ended 31st March, 2021.

Financial Results:

(Rs. In lacs.)
Particulars For the year ended on 31st March, 2021 For the year ended on 31st March, 2020
Net Total Income 2629.34 2103.19
Less: Operating and Admin. Exps. 2314.34 1929.41
Profit before depreciation and Taxes 315.00 173.78
Less: Depreciation 194.16 100.71
Less: Extraordinary/Exceptional Items 0 0
Net Profit/(Loss) on sale of Fixed Assets 0 0
Profit before Tax (PBT) 120.84 73.07
Less: Taxes (including deferred tax and fringe benefit tax)
Profit after Tax (PAT) 75.44 42.87
Balance Available for appropriation 136.73
Which the Directors propose to appropriate as under:
(i) Proposed Dividend 0 0
(ii) Corporate Dividend Tax 0 0
Surplus Carried to Balance Sheet 75.44 42.87
Earnings Per Equity Share
Basic 2.02* 1.15*
Diluted 2.02* 1.15*

*- Amount of EPS is in Rs.

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. 2103.19 lacs to Rs. 2629.34 lacs. The profit before tax of the Company has increased from Rs. 73.07 lacs to Rs. 120.84. The net profit after tax has increased from Rs. 42.87 lacs to Rs. 75.44 lacs. 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 directors do not recommend any dividend during the year under review

Public Deposits:

The Company had accepted deposits of Rs. 25 Lakh from Relative of Directors and Promoters 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, 2021, Your Company has Nil Subsidiary/Joint Venture/ Associate Company.

INTERNAL CONTROL SYSTEMS

Your Company has a robust system of internal controls commensurate with the size of the Company and the nature of its business, which ensures that transactions are recorded, authorised and reported correctly apart from safeguarding its assets against loss from wastage, unauthorised use and disposition. The internal control systems are supplemented by well documented policies, guidelines and procedures which are in line with the internal financial control framework requirements. There is an extensive programme of internal audit by a firm of chartered accountants followed by periodic management reviews. The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

RISK MANAGEMENT

Your Company considers that risk is an integral part of its business and therefore, it takes proper steps to manage all risks in a proactive and efficient manner. The Company management periodically assesses risks in the internal and external environment and incorporates suitable risk treatment processes in its strategy and business and operating plans. The details of practices being followed by the Company in this regard, form part of the Corporate Governance Report. There are no risks which, in the opinion of the Board, threaten the very existence of your Company. However, some of the challenges faced by it have been dealt with under Management Discussion and Analysis which forms part of this Report.

Depository System:

As members are aware, the companys shares are compulsorily tradable in the electronic form. As on March 31, 2021 almost 66.69% of the Companys total paid-up capital representing 24,95,260 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.

BOARD MEETINGS HELD DURING THE YEAR:

Sr. No. Date on which board Meetings were held Total Strength of the Board No. of Directors Present
1 11.06.2020 7 4
2 31.07.2020 7 4
3 15.09.2020 7 5
4 12.11.2020 7 6
5 16.01.2021 7 6
6 12.02.2021 5 5

Attendance of Directors at Board Meetings:

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

> In terms of Section 152 of the Companies Act, 2013, Mr. Umang Alkesh Gosalia (DIN: 005173830) 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.

EXTRACT OF ANNUAL RETURN AS PER SECTION 92 (3) OF COMPANIES ACT, 2013:

The Annual Return as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company and the web-link for the same is https://www.parmaxpharma.com/investor relations.php

KEY FINANCIAL RATIOS:

Key Financial Ratios for the financial year 2020-21 with comparatives for the year 2019-20, are disclosed in Annexure - C

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 B.A. Shah S.R. Mehta & Co., Chartered Accountants 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, 2022. The secretarial audit report for FY 2020-21 forms part of the Annual Report as Annexure B 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. Company has not complied with the provisions of Section 74 of the Companies Act, 2013 regarding acceptance of deposits. 1. The Board is in process of complying with Section 74 of Companies Act, 2013 regarding Acceptance of deposits.
2. 100% Promoters holding still not in Demat form, 700 Equity Shares of Mr. Mahasukh Gopani is not in dematerialized form. 2. As confirmed by the Promoters that they are in process of Dematerialization of 700 shares and it will be completed in due course.
However, Board assures to comply with the Act and Regulations.

Directors Response to Statutory Audit Report:-

Qualification/ Adverse Remark Explanation :
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. The Board is in process of complying with Section 74 of Companies Act, 2013 regarding Acceptance of deposits.
Company has not maintained the Fixed Asset Register Company Management is in process of maintaining Fixed Asset Register.

• Internal Auditors:

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 arms 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 C".

• Significant and Material Orders passed by the Regulators or Courts:

During the year under review, on 20th August 2020, under section 133 of Criminal Procedure Code the Sub-divisional magistrate and Deputy Collector Rajkot Zone -2 has passed conditional order to shut down our production capacity till further notice and after our written representations the Sub-divisional magistrate and Deputy Collector Rajkot Zone -2 has passed final order to operate and carry out our production activities and withdraw its earlier conditional order on 14th September, 2020 other than this no significant and material order was passed by the Regulators/Courts that could impact the going concern status of the Company and its future operations.

There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of onetime settlement with any Bank or Financial Institution.

• Policy against Sexual Harassment at Workplace

The Company values the dignity of individuals and is committed to provide an environment, which is free of discrimination, intimidation and abuse. The Company has put in place a policy on redressal of Sexual Harassment and a Policy on redressal of Workplace Harassment as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual Harassment Act"). As per the policy, any employee may report his/ her complaint to the Redressal Committee formed for this purpose or their Manager or HR personnel. The company has also constituted an Internal Complaints Committee to inquire into complaints of sexual harassment and recommendation for appropriate action. No complaints have been filed/ disposed of/ pending during the financial year ended 31st March, 2021

• 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.75,44,218/- profit of the Company to the General Reserve for this year.

• Employee Stock Option: The Company has not issued any Employee Stock Option.

• 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 not made any capital investment or not taken any other steps for conservation of energy or the clause is not applicable.

B) Technology absorption:

Your company has not made any efforts towards technology absorption and neither imported any technology nor made any expenditure on research and developments.

C) Foreign Exchange earnings and outgo:

Foreign Exchange inflow (Rs.): NIL

Foreign Exchange outflow (Rs.): 37,74,000/-.

• Corporate Governance:

The Company is committed to maximise the value for its stakeholders by adopting the principles of good Corporate Governance in line with the provisions of law and particularly those stipulated in the Listing Regulations. Its objective and that of its management and employees is to manufacture and market the Companys products in a way so as to create value that can be sustained over the long term for consumers, shareholders, employees, business partners and the national economy in general.

Certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in the Listing Regulations, is enclosed.

MANAGEMENT DISCUSSION AND ANALYSIS:

Economic Scenario:

Anticipating a Global Reboot of the Economy

As per the International Monetary Fund (IMF), the global economy is estimated to grow by 5.5% in 2021 and 4.2% in 2022. The projection comes on the back of vaccine approvals, which is expected to spur the economy later this year. However, the effectiveness of policy support and access to medical interventions will determine the extent of recovery in different countries. This years estimated growth follows a severe economic collapse in 2020 that has adversely impacted people globally. Based on the World Economic Outlook Update1 , the global growth contraction for 2020, estimated at -3.5%, was 0.9 percentage point higher than the growth estimated in the previous forecast, driven by a stronger than expected reboot in the second half of 2020. We believe strong multilateral cooperation will form the basis of bringing the pandemic under control everywhere. Increasing funding for equitable access to COVID-19 vaccines for all countries, ensuring global distribution, and facilitating the therapeutics at affordable rates are essential measures to rein in COVID-19. Several countries, mainly the low-income developing economies, set foot into the crisis with a huge debt, which is expected to rise even further due to the pandemic. Therefore, there is a need for the global community to work collaboratively and ensure adequate access to international liquidity to help these countries.

Trends Impacting the Global Pharmaceutical Sector COVID-19 has impacted health and disease patterns and brought changes to several aspects of the pharmaceutical industry. Some of the emerging trends are highlighted below:

1. Demand for digital transformation

2. Advancements in technology and increasing R&D spends

3. Need for a new understanding of diseases

4. Affordable pricing and improved market access

5. Building a cohesive regulatory framework Demand for Digital Transformation

Since the onset of artificial intelligence (AI) and the data science revolution a few years ago, healthcare has consistently lagged in adoption, compared to other sectors, in leveraging these technologies. Noticeable trends that underscore the need for digital healthcare are evident, with COVID-19 further proving that health consultations can be

This Management Discussion and Analysis statement of the Annual Report has been included in adherence to the spirit enunciated in the code of corporate governance approved by the Securities and Exchange Board of India. Statement in the Management Discussion and Analysis describing Companys objectives, projections, estimates, expectation may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual result could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include economic conditions affecting demand/supply and price conditions in the Government regulations, tax laws and other status and other incidental factors. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinion expressed here are subject to change without notice. The Company undertakes no obligations to publicly update or revise any of the opinions of forward looking statements expressed in this report, consequent to new information future events, or otherwise.

Readers are hence cautioned not to place undue reliance on these statements and are advised to conduct their own investigation and analysis of the information contained or referred to this statement before taking any action with regard to specific objectives.

RISK MANAGEMENT:

A. Risk Management Committee

The Company has not constituted any risk management committee. However the Board as and when required reviews the Risk Management Policy.

B. Major risks affecting the existence of the company Business Risk

• Operating Environment

• Ownership Structure

• Competitive position

• Management, Systems and Strategy, governance structure

Financial Risk

• Asset Quality

• Liquidity

• Profitability

• Capital Adequacy

C. Steps taken to mitigate the risks:

Company has framed formal risk management policy. However Board of directors are constantly trying to avoid the risks by way of planning, developing strategies to remain in the market, reviewing government policies and procedures, and doing marketing activities to remain in the market.

CORPORATE SOCIAL RESPONSIBILITY:

This clause is not applicable.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state the following:

> That in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

> That such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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, 2021 and of the profit of the Company for the year ended on that date;

> That 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 fraud and other irregularities;

> That the annual financial statements have been prepared on a going concern basis.

> That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

> That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Key Managerial Personnel:

Mr. Alkesh M Gopani, Managing Director (Executive) and Mr. Alkesh R. Gosalia, Managing Director (Finance and Operations), were the KMP during the year and as at end of the year Mr. Alkesh R. Gosalia (Managing Director)_ Mr. Umang Gosalia, Whole-time Director, Mr. Keyur D Vora, Chief Financial Officer and CS Yash Vora, Company Secretary are the Key Managerial Personnel of the Company.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR), Regulations, 2015. It is framed for employees and Directors of the company to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the companys code of conduct. This policy enables the employees or directors of Company to approach the Chairman of Audit Committee.

Further, the whistle blower policy is available at the website of our company at http://www.parmaxpharma.com/policies.php

THE CHANGE IN NATURE OF BUSINESS:

There is no material change in the business of the Company during the year under review.

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 - D" 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 2020-21.

ACKNOWLEDGMENT:

The Directors wish to place on record their appreciation to the devoted services of the workers, staff and the officers who largely contributed to the efficient management of the Company in the difficult times. The Directors place on record their appreciation for the continued support of the shareholders of the Company. The Directors also take this opportunity to express their grateful appreciation for assistance and cooperation received from the bankers, vendors and stakeholders including financial institutions, Central and State Government authorities, other business associates, who have extended their valuable sustained support and encouragement during the year under review.

By and order of Board of Directors
For, Parmax Pharma Limited
DATE: 14th August, 2021
PLACE: HADAMTALA Dr. Umang Gosalia
Managing Director
DIN:05153830