Paushak Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting their 46th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2019.

1. Operations and State of Affairs of the Company:

( र in Lacs)
Particulars Year ended on 31st March, 2019 Year ended on 31st March, 2018
Profit for the year before Interest, Depreciation and Tax 4,284.09 3,235.03
Adjusting therefrom:
Less:
Interest (net) 13.64 9.80
Depreciation 386.51 338.70
Profit before Exceptional Items and Tax 3,883.94 2,886.53
Add:
Exceptional Items 1,015.04 -
Profit before Tax 4,898.98 2,886.53
Less:
Tax Expenses 1,003.24 739.45
Profit after Tax 3,895.74 2,147.08
Other Comprehensive Income 4,784.34 979.85
Total Comprehensive Income 8,680.08 3,126.93

The Company has prepared the Standalone Financial Statements in accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under Section 133 of the Companies Act, 2013.

2. Transfer to Reserve:

During the year under review, the Company has not proposed to transfer any amount to General Reserve out of the net profits of the Company.

3. Dividend:

Your Directors recommend Dividend at 5.00 per equity share (i.e. 50%) of face value 10/- per share for the financial year ended on 31st March, 2019 as against र 3.00 per equity share (i.e. 30%) for the financial year ended 31st March, 2018.

4. Management Discussion and Analysis Report:

As per the provision of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report has been included and is annexed herewith as Annexure A.

5. Corporate Governance:

The Report on Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

The requisite certificate from M/s. Samdani Shah & Kabra, Practising Company Secretaries confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Schedule V is enclosed to the Report on Corporate Governance.

6. Directors:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Chirayu Amin, Chairman of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

The first term of office of Dr. Shamita Amin, Independent Director will expire on 9th March, 2020. The Nomination and Remuneration Committee and the Board of Directors at their respective meetings held on 6th May, 2019 has recommended her re-appointment as Independent Director of the Company for a second term of 5 (five) consecutive years, subject to approval of the members by way of Special Resolution at the Annual General Meeting.

7. Key Managerial Personnel:

Mr. Abhijit Joshi, Whole-time Director & CEO, Mr. Kaushik Shah, Dy. CFO and Ms. Manisha Saraf, Company Secretary are Key Managerial Personnel of the Company.

During the year, Ms. Manisha Saraf was appointed as Company Secretary & Compliance Officer of the Company in place of Mr. Charandeep Singh Saluja w.e.f. 1st June, 2018.

8. Meetings of the Board:

Four (4) Board Meetings were held during the financial year ended 31st March, 2019. The details of the Board Meetings with regard to their dates and attendance of each of the Directors thereat have been provided in the Corporate Governance Report.

9. Independent Directors:

The Independent Directors of the Company have given the declaration and confirmation to the Company as required under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet the criteria of independence and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independentjudgement and without any external influence.

10. Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board and of the Committees of the Board, by way of individual and collective feedback from Directors.

The following were the Evaluation Criteria:

(a) For Independent Directors:

- Knowledge and Skills

- Professional conduct

- Duties, Role and Functions

- Fulfillment of the Independence Criteria and their independence from the management

(b) For Non- Executive Directors:

- Knowledge and Skills

- Professional conduct

- Duties, Role and Functions

(c) For Executive Directors:

- Performance as Team Leader/ Member

- Evaluating Business Opportunity and analysis of Risk Reward Scenarios

- Set Key Goals and Achievements

- Professional Conduct and Integrity

- Sharing of Information with the Board

The Directors expressed their satisfaction with the evaluation process.

11. Audit Committee:

The Audit Committee consists of Independent Directors with Mr. Amit Goradia as Chairman, Mr. Atul Patel and Mr. Vijay Gandhi as members. The Committee inter alia reviews the Internal Control System, Scope of Internal Audit, Reports of Internal Auditors and Compliance of various regulations. The Committee also reviews the financial statements before they are placed before the Board.

12. Vigil Mechanism:

In compliance with requirements of Section 177(9) & (10) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Vigil Mechanism or Whistle Blower Policy for directors, employees and other stakeholders to report genuine concerns has been established. The same is also uploaded on the website of the Company.

13. Internal Control Systems:

The Companys internal control procedure which includes internal financial controls, ensure compliance with various policies, practices and statutes and in keeping in view with the organizations pace of growth and increasing complexity of operations. The internal auditors team carries out extensive audits throughout the year across all functional areas and submits its reports to the Audit Committee.

14. Corporate Social Responsibility:

Alembic Group has been proactively carrying out CSR activities since more than fifty years. Alembic Group has established, nurtured and promoted various Non-Profit Organisations focusing on three major areas - Education, Healthcare and Rural Development.

In compliance with requirements of Section 135 of the Companies Act, 2013, the Company has laid down a CSR Policy. The composition of the Committee, contents of CSR Policy and report on CSR activities carried out during the financial year ended 31st March, 2019 in the format prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure B.

15. Policy on Nomination and Remuneration:

In compliance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has laid down a Nomination and Remuneration policy which has been uploaded on the Companys website.

During the year, the Company has amended the Nomination and Remuneration Policy to bring it in line with the amendments in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The web-link as required under Companies Act, 2013 is as under:

http://www.paushak.com/pdf/NR-Policy.pdf

The salient features of the NRC Policy are as under:

1) Setting out the objectives of the Policy.

2) Definitions for the purposes of the Policy.

3) Policy for appointment and removal of Director, KMP and Senior Management.

4) Policy relating to the Remuneration for the Managerial Personnel, KMP, Senior Management Personnel & other employees.

5) Remuneration to Non- Executive / Independent Director.

16. Related Party Transactions:

Related party transactions that were entered into during the financial year were on arms length basis and were in ordinary course of business. There are no materially significant related party transactions made by the Company which may have potential conflict with the interest of the Company.

There are no material related party transactions which are not in ordinary course of business or which are not on arms length basis and hence there is no information to be provided as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

The Board has approved a policy for related party transactions which has been uploaded on the Companys website. The web-link as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as under:

http://www.paushak.com/pdf/RPT-Policy.pdf

17. Loans, Guarantees or Investments:

Details of Loans granted, Guarantees given and Investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 is annexed herewith as Annexure C.

18. Listing of Shares:

The Equity Shares of the Company are listed on BSE Limited with security ID / symbol of PAUSHAKLTD. The Company confirms that the annual listing fees to BSE Limited for the financial year 2019-20 has been paid.

19. Auditors:

(a) Statutory Auditors:

The Auditors Report for financial year2018-19 does not contain any qualification, reservation or adverse remark. The Auditors Report is enclosed with the financial statements in this Annual Report.

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013.

(b) Secretarial Auditors:

The Board of Directors of the Company appointed M/s. Samdani Shah & Kabra, Practising Company Secretaries, Vadodara to conduct Secretarial Audit of the Company for the financial year 2019-20.

The Secretarial Audit Report of M/s. Samdani Shah & Kabra, Practising Company Secretaries for the financial year 2018-19 is annexed herewith as Annexure D.

The Secretarial Auditors Report does not contain any qualification, reservation or adverse remark.

During the year under review, the Company has complied with the applicable provisions of the Secretarial Standards.

(c) Cost Auditors:

M/s. Santosh Jejurkar & Associates, Cost Accountant, Vadodara, has been appointed as Cost Auditor of the Company for conducting audit of the cost accounts maintained by the Company relating to Inorganic Chemicals for the financial year 2019-20.

The Company has made and maintained the cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013.

(d) Internal Auditors:

The Board of Directors has appointed M/s. K. C. Mehta & Co., Chartered Accountants as Internal Auditors of the Company for the financial year 2019-20.

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

20. Particulars of employees and related disclosures:

Disclosures pertaining to remuneration and other 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, is annexed herewith as Annexure E.

A statement showing the names and other particulars of the employees falling within the preview of Rules 5(2) and 5(3) of the aforesaid rules are provided in the Annual Report. The Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during working hours and the same will be furnished on request in writing to the members.

21. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure F.

22. Extracts of Annual Return:

The extract of Annual Return required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, is annexed herewith as Annexure G and has been uploaded on the Companys website. The web-link as required under Companies Act, 2013 is as under:

https://www.paushak.com/notice.aspx

23. Material Changes:

There have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. since 31st March, 2019. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

24. Details of Unclaimed Suspense Account:

Disclosure pertaining to Unclaimed Suspense Account as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith as Annexure H. The voting rights on the equity shares which are transferred to Unclaimed Suspense Account shall remain frozen till the rightful owner of such equity shares claims the shares.

25. Directors Responsibility Statement:

In terms of the provisions of Companies Act, 2013, the Directors state that:

a) in preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards have been followed along with properexplanation relating to material departures;

b) the directors had selected such accounting policies as listed in Note 1 to the financial statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year as on 31st March, 2019 and of the profit of the Company for that period;

c) the directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of this 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 directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. Other Disclosures:

a) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

b) The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

c) The Company has not invited/accepted any deposits from public.

d) There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

On behalf of the Board of Directors,
Sd/-
Chirayu Amin
Chairman
Registered Office: Alembic Road, Vadodara - 390 003 DIN: 00242549
Tel: +91 265 2280550 Fax: +91 265 2282506
Website: www.paushak.com
Email ID: investors@paushak.com
CIN: L51909GJ1972PLC044638
Date: 6th May, 2019
Place: Vadodara

Annexure - E

As per the provisions of Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to disclose following information in the Boards Report.

Ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year

Name Ratio to Employees
Mr. Abhijit Joshi - Whole-time Director & CEO 1:0.04932
Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year
Name % Increase
Mr. Abhijit Joshi - Whole-time Director & CEO 6.99
Mr. Kaushik Shah - Dy. CFO 10.00
Ms. Manisha Saraf - Company Secretary N.A.*
*Appointed w.e.f. 1st June, 2018
Percentage increase in the median remuneration of employees in the financial year 3.44
Number of permanent employees on the rolls of Company 265
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 6.17% (Non- Managerial Personnel) 6.99% (Managerial Personnel)

We affirm that the remuneration paid to the Managerial and Non-Managerial Personnel is as per the Nomination and Remuneration Policy of the Company.

Annexure - F

Information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

(A) Conservation of Energy:

(i) Steps taken or impact on conservation of energy:

• The Company has explored using better mixing technology to improve process efficiency and hence reduce specific energy consumption.

• The Company is currently in process of upgrading old manufacturing plants, especially the utilities network, so as to achieve overall improved energy usage efficiency.

(ii) Steps taken for utilizing alternate sources of energy:

The Company has invested in windmill for captive use. A significant part of energy requirement are met from such non-conventional source of energy.

We are exploring the use of solar energy in plant applications and expansion projects.

(iii) Capital Investment on energy conservation equipments:

The Company has invested in energy efficient gas scrubbing system and air compressor.

(B) Technology Absorption:

(i) Efforts made towards technology absorption:

• The Company has established an improved indigenous technology for better phosgene manufacturing, based on study of global practices.

• The Company is also adopting a cleaner technology for its manufacturing process.

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution: The Company has continued to commercialize some products which were earlier available from China.

The Company has adopted solvent-free processes for many products, which are environment friendly as well as low cost.

(iii) Information regarding technology imported, during the last 3 years: Nil

(iv) Expenditure incurred on Research and Development:

During the year under review, the Company has incurred expenses of 224.02 Lacs as compared to 236.69 Lacs for the previous year on Research and Development.

(C) Foreign Exchange Earnings and Outgo:

Foreign exchange earned in term of actual inflows during the financial year 2018-19was 2,120.51 lacs.

Foreign exchange outgo in term of actual outflows during the financial year 2018-19 was 416.69 lacs.

On behalf of the Board of Directors,
Sd/-
Chirayu Amin
Date: 6th May, 2019 Chairman
Place: Vadodara DIN: 00242549