Phaarmasia Ltd Directors Report.

To

The Members Phaarmasia Limited

Your Directors have pleasure in presenting the 39thAnnual Report together with and the Audited Statement of Accounts for the year ended 31st March, 2020.

1. Financial summary or highlights/Performance of the Company

The performance during the period ended 31st March, 2020 has been as under:

(Rs. In Lakhs)
Particulars 31st March, 2020 31st March, 2019
Sales & Other Income 2503.14 2625.90
Operating profit before Financial Charges & Depreciation 139.64 132.95
Financial Charges 3.68 3.68
Profit before Depreciation 135.96 129.27
Depreciation 39.89 46.16
Profit / (Loss) before taxes 96.07 83.11
Prior Period Expenses 0.00 0.00
Provision for Taxation of Current Year 26.57 25.23
Deferred Tax for the Current Year 15.52 (19.87)
Net profit after taxes 53.98 77.74
Other comprehensive income 5.22 1.65
Dividend (including tax on Dividend) 0.00 0.00
Balance of profit brought forward 59.20 79.39

2. BRIEF DESCRIPTION OF THE COMPANYS WORKING DURING THE YEAR/STATE OF COMPANYS AFFAIRS:

During the year under review, the gross revenue of the Company decreased to Rs.2503.14Lakhs as compared to Rs.2625.90 Lakhs in the previous year. Profit after tax for the year decreased to Rs.53.98Lakhs as compared to Rs. 77.74 Lakhs in the previous year.

3. SEBI GUIDELINES FOR STRENGTHENING AND RAISING INDUSTRY STANDARDS

SEBIwith regards to Strengthening the Guidelines and Raising Industry standards for RTA, Issuer Companies and Banker to an Issue to issue the Intimation letter to the Shareholders of the Company calling for their bank mandate by way of cancelled cheque along with PAN and other details. Necessary intimation in this regards for shareholder is enclosed herewith.

4. FUTURE OUTLOOK:

Continuing positively from the FY 2019-20, The Company is expecting consolidate it strength and develop a state of art manufacturing facility and expand its products segments and widening of its domestic market segments in the narrow future, we expect steady and continuous growth in the financial years ahead.

5. SHARE CAPITAL:

The authorised capital of the company stand unchanged from previous year at Rs. 10,00,00,000/- (Rupees Ten Crores), the Issued, Subscribed and Paid up Capital of the Company as on March 31, 2020 is Rs.6,82,69,600/- (Rupees Six Crores Eighty Two Lakhs Sixty Nine Thousand and Six Hundred) divided into 68,26,960 equity shares of Rs.10/- (Rupees Ten) each.

6. DIVIDEND:

The company has not declared the dividend during the financial year under review.

7. TRANSFERS TO RESERVES:

No Profits during the year weretransferred to Reserves during the financial year 201920. However, profit for the year forms part of surplus.

8. LISTING

The Company confirms that it has paid the Annual Listing Fees for the year 2019-2020 to BSE where the Companys Shares are listed.

9. MEETING OF THE BOARD:

The Board of Directors duly met 4(Four) times on 30-05-2019, 14-08-2019, 14-112019, and 13-02-2020 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

The intervening gap between the Meetings was not more than 120 days as prescribed under the Companies Act, 2013.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL.

Reappointment:

Mrs. Rashmi Vinay Sapte, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offer herself for reappointment.

11. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134(5) OF THE COMPANIES ACT, 2013:

In compliance of section 134 (5) of the Companies Act, 2013, your directors confirm:

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

b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the company for the year under review;

c) that the Directors have taken proper and sufficient care 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;

d) The directors have prepared the annual accounts on agoing concern basis;

e) that the Directors had laid down internal financial controls to be followed by the company and that such internal financial control to be followed by the company are adequate and were operating effectively.

f) that the Directors has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet the criteria of their independence as laid down in Section 149(6) of the Companies Act, 2013.

13. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as under. Further, there were no employees who were drawing salary of more than INR 8.5 Lakhs per month or INR 102 Lakhs per annum.

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Executive Directors Ratio to Median remuneration
Yallapragada Naga Bhaskara Rao 3.31:1
Maneesh Ramakant Sapte Nil
OsfferiDirectors NIL

b. The percentage increase in remuneration of each directors, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year:

Directors, CEO, CFO and Company Secretary % increase in Remuneration in the Financial Year.
Maneesh Ramakant Sapte Nil
Y.N. Bhaskara Rao 10%
Vinay Ramakant Sapte Nil
- -
-

-

Rashmi Vinay Sapte Nil
Pravin Hegde Nil
Abhishek Wakchaure Nil

c. The percentage increase in the median remuneration of employees in the financial year: 10 %

d. The number of permanent employees on the rolls of Company: 19 Employees

e. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year.

Sr. Particular no As at March 31, 2020 As at March 31, 2019
1. Market Capitalization 9,48,94,744 11,50,34,276
2. Price Earnings Ratio 17.60:1 14.78:1

f. 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:

Average percentile increase in the salaries of the employees other than the managerial personnel in the last financial year is 10%

Average percentile increase in the Managerial remuneration in the last financial year is 10.00 %

g. Directors hereby affirm that the remuneration is as per the remuneration policy of the company.

14. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Company has framed policy on Directors appointment and remuneration and other matters provided in section 178(3) of the Act and is referred to while taking decisions under its purview.

15. BOARD EVALUATION

The Board of Directors of the Company carried out the Annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the applicable Act, rules and guidelines.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of the Board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

The overall performance of the Chairman, Executive Directors and Non-Executive Directors of the company is satisfactory. The review of performance was based on the criteria of performance, knowledge, analysis, quality of decision making etc.

16. 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

There are no material changes and commitments affecting the financial position of the Company which have occurred between the End of the Financial Year and the date of the report.

17. EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of annual return is placed on the website of the Company i.e http://phaarmasia.in

18. STATUTORY AUDITORS

Sathuluri & Co, Chartered Accountants, were appointed as Statutory Auditors for 5 years at the 36th AGM held on 22nd September, 2017. They have confirmed that they are not disqualified to acts as Statutory Auditors of the Company.

19. REPLIES TO AUDITORS REPORT:

With reference to observations made in Auditors Report, the notes of account are selfexplanatory and therefore do not calls for any further comments under section 134(5) of Companies Act, 2013.

SECRETARIAL AUDIT REPORT:

In terms of Section 204 of the Act and Rules made there under, Mr. Nagamalla Sricharan, Practicing Company Secretary has been appointed as Secretarial Auditor of the Company for the financial year under review.

Secretarial Audit Report as provided by Mr Nagamalla Sricharan, Practicing Company Secretaryis enclosed as Annexure I to this report.

20. COST AUDITORS

The provisions of Section 148 of the Companies Act, 2013 does not apply to the Company and hence, no Cost Auditors are appointed.

21. REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditors nor the Secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

22. INTERNAL AUDIT & CONTROLS

The Company has appointed M/s. Thirupathi &Associates, as its Internal Auditors for the financial year 2019-20.Their scope of work includes review of processes for safeguarding the assetsof the Company, review of operational efficiency, effectiveness of systemsand processes, and assessing the internal control strengths in all areas.Internal Auditors findings are discussed with the process owners and suitablecorrective actions taken as per the directions of Audit Committee on anongoing basis to improve efficiency in operations.

23. 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.

24. RISK MANAGEMENT POLICY

The Risk Management Policy is in place in the Company enables the Company to proactively take care of the internal and external risks of the Company and ensures smooth business operations.

The Companys risk management policy ensures that all its material risk exposures are properly covered, all compliance risks are covered and the Companys business growth and financial stability are assured. Board of Directors decide the policies and ensure their implementation to ensure protection of Company from any type of risks.

25. SECRETARIAL STANDARDS

The Company complies with Secretarial Standard-1 and Secretarial Standard-2, with respect to Board and General Meetings respectively, issued by The Institute of Company Secretaries of India,

26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

No other significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future.

27. DEPOSITS

The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 73 and 74 of the Companies Act, 2013, and no amount of principal or interest was outstanding as on the Balance Sheet date.

28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The Company has not given/done any Loans, Guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 during the reporting period.

29. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The details regarding transaction with related parties covered under section 188 of the Companies Act, 2013 are given in ‘Annexure II and forms part of this report.

30. CONSERVATION OF ENERGY, FOREIGN EXCHANGE ETC: -

(A) Conservation Of Energy

(i) The steps taken or impact on conservation of energy: Nil

(ii) The steps taken by the company for utilizing alternate sources of energy: Nil

(iii) The capital investment on energy conservation equipments: Nil

(B) Technology absorption

(i) The efforts made towards technology absorption;

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution;

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

(a) The details of technology imported;

(b) The year of import;

(c) Whether the technology been fully absorbed;

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof;

Notechnologyisimportedduringfinancialyear2019-20

(iv) The expenditure incurred on Research and Development: Nil

(C) Foreign exchange earnings and Outgo

Foreign Exchange Inflows:Rs. 33.57 Lakhs Foreign Exchange Outflows: INR Nil

31. Internal Financial Control Systems

The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

32. INSURANCE:

The Properties and assets of your Company are adequately insured.

33. CORPORATE GOVERNANCE:

As per regulation 15 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Compliance of Corporate Governance norms are not applicable to your Company, hence the disclosures under the Corporate Governance requirement have not been mentioned in the Annual Report. Though the provisions of Corporate Governance are not applicable to the Company, the operations and transactions of the Company are done in a transparent manner.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report, pursuant to Regulation 34 reads with Schedule V of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulations, 2015, forms part of this report and the same is annexed as Annexure III.

35. CORPORATE SOCIAL RESPONSIBILITY

The provisions w.r.t. CSR are not applicable to the Company therefore, the Company had not constituted CSR committee during the year 2019-20.

36. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

37. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year.

38. EMPLOYEE RELATIONS:

Your Directors are pleased to record their sincere appreciation of the contribution by the workmen and staff at all levels in the improved performance of the Company.

None of the employees are drawing Rs. 8,50,000/- and above per month or Rs. 1,02,00,000/- and above in aggregate per annum as remuneration, the limits prescribed under provisions of the Companies Act, 2013.

39. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company for their continued support and patronage.