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Paramount Cosmetics (India) Ltd.

BSE: 507970 Sector: Consumer
NSE: N.A. ISIN Code: INE143I01013
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P/E 37.00
Mkt Cap.(Rs cr) 18
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OPEN 37.00
CLOSE 38.25
VOLUME 50
52-Week high 47.95
52-Week low 30.55
P/E 37.00
Mkt Cap.(Rs cr) 18
Buy Price 0.00
Buy Qty 0.00
Sell Price 38.25
Sell Qty 3.00

Paramount Cosmetics (India) Ltd. (PARAMOUNTCOSMET) - Director Report

Company director report

Your Directors have pleasure in presenting the 30th Annual Report of yourCompany together with the business and operations for the year ended 31stMarch 2015.

FINANCIAL RESULTS

Your Company’s performance during the year as compared with that during theprevious year is summarized below:

(Figures in Lakh)
Particulars Year ended 31.03.2015 Year ended 31.03.2014*
Sales and other Income 4852.81 4757.16
Profit before Depreciation Interest Exceptional Items Extraordinary 509.09 473.71
Items and Tax
Depreciation 79.79 60.48
Interest and Finance Charges 191.86 187.88
Exceptional Items and Extraordinary Items 00.15 00.25
Profit before Tax 237.29 225.61
Net Profit 173.56 150.18
Surplus 840.93 703.07
Appropriations 60.47 35.70
Balance carried forward to the Balance Sheet 780.46 667.37

* Previous year’s figures have been regrouped / reclassified wherever necessaryto confirm to the current year presentation.

PERFORMANCE DURING THE YEAR

Sales and other Income of the Company for the year is Rs. 4852.81 lakhs as compared toRs.4757.16 lakhs in the previous year showing an increase of 2.01 %. Profit after tax isRs.173.56 lakhs which is 15.57% higher than the preceding year which stood at Rs. 150.18lakhs due to increase in sales volume.

DIVIDEND

The Board of Directors are pleased to recommend a final dividend on Equity shares ofRs. 0.60/- per Equity share (i.e. at the rate of 6%) subject to approval by theShareholders at the Annual General Meeting.

The Final Dividend subject to the approval of Members at the Annual General Meeting on30th September 2015 will be paid to the Members whose names appear in theRegister of Members as on 23rd September 2015.

SHARE CAPITAL

The paid up Equity Share Capital as at March 31 2015 stood at Rs.485.50 Lakhs. Duringthe year under review the Company has not issued shares with differential voting rightsnor has granted any stock option or sweat equity. As on March 31 2015 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act 2013 and rules made thereunderMs. Aartii Topiwaala would retire by rotation at the ensuing Annual General Meeting andbeing eligible offers herself for re-appointment.

During the year under review the members approved the appointment of Mr. Mukesh KumarTyagi as Independent Director for a period of five consecutive years.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act and Clause 49 of the Listing Agreement with the Stock Exchange.

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the performance of Independent Directors was completed. The performanceevaluation of Chairman and the Non Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.

The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are formingpart of the Corporate Governance Report.

Details of Key Managerial Personnel

Following are the Details of Key Managerial Personnel who were appointed or haveresigned during the Financial Year 2014-15:

Name of KMPs Designation Date of Appointment Date of Cessation
Deepika Shrinivas Company Secretary 01st March 2013 17th April 2014
Nitya Babu Company Secretary 08th May 2014 13th January 2015
S Chakravarthi Chief Financial Officer 01st April 2014 28th August 2014
Hansraj Rathor Chief Financial Officer 13th February 2015 -

BOARD COMMITTEES

The details of following committees of the Board are provided in the CorporateGovernance Report. a) Audit Committee b) Nomination and Remuneration Committee c) ShareTransfer Committee d) Stakeholders Relationship Committee e) Risk Management Committee

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that:

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed alongwith proper explanation relating to material departures if any;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofits of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls for the Company and such internalfinancial controls are adequate and operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.

AUDITORS AND AUDITORS’ REPORT

M/s. S.S. Jain & Associates Chartered Accountant Statutory Auditor of theCompany hold office till the conclusion of the 34th Annual General Meeting subject to theratification in the ensuing Annual General Meeting. They have confirmed their eligibilityto the effect that their re-appointment if made would be within the prescribed limitsunder the Companies Act 2013 and that they are not disqualified for reappointment.

The Notes on financial statement referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditors’ Report doesnot contain any qualification reservation or adverse remark.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s. G.R. & Associates a firm of CompanySecretaries (C P No.6526) to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is included as an Annexure 1 forming part of this Annual Report.

There is no Secretarial Audit Qualification for the year under review.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by Securities Exchange Board ofIndia (SEBI).

The report on Corporate Governance as stipulated under the Listing Agreement ispresented in a separate section forming part of the Annual Report.

The requisite certificate from the Practicing Company Secretary M/s. G.R. &Associates confirming compliance with the conditions of Corporate Governance as stipulatedunder Clause 49 is presented in a separate section forming part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review asstipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India ispresented in a separate section forming part of the Annual Report.

POLICIES OF THE COMPANY

The Board of Directors has framed the following policies. The details of these policiesare explained in the Corporate Governance Report.

a) Code of Conduct

b) Risk Management Policy

c) Policy for selection of Directors and Performance Evaluation

d) Remuneration Policy for Directors Key Managerial Personnel and Other Employees

e) Whistle Blower Policy

f) Related Party Transactions

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. During the year the Company had entered into contract / arrangement /transaction with related parties which could not be considered material in accordance withthe policy of the Company on materiality of Related Party transactions.

Your Directors draw attention of the members to Note 30 to the financial statementwhich sets out related party disclosures.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Audit Committee of the Board and to the ManagingDirector of the Company.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.

Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The particulars required in terms of the provisions of Section 197(12) of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is appended as Annexure 2 to this Report.

In terms of Section 136 of the Companies Act 2013 the reports and accounts are beingsent to the members and others entitled thereto.

DISCLOSURES

1) Your Directors state that no disclosure or reporting is required in respect to theDeposits covered under Chapter V of the Companies Act 2013 and rules made thereunder asthere were no transactions on these items during the year under review.

2) No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

3) Extract of the Annual Return

The extract of the Annual Return in Form MGT 9 as required under Section 92(3) and Rule12 of the Companies (Management and Administration) Rules 2014 is appended as an Annexure3 to this Report.

4) Number of Meetings of the Board

The details of the number of meetings of the Board held during the financial year2014-15 forms part of the Corporate Governance Report.

5) Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made under the Auditors Report and Secretarial Audit Report

The Auditors Report and Secretarial Audit Report do not contain any qualificationreservation or adverse remark.

6) Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.

7) Particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 in the prescribed form;

The Particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 and Rule 8 of the Companies (Accounts) Rules 2014 in FormAOC-2 is appended as an Annexure 4 to this Report.

8) The amounts which it proposes to carry to any reserves

NIL

9) The amount which it recommends should be paid by way of Dividend Rs.2913000/-(Rupees Twenty Nine Lakhs Thirteen Thousand Only)

10) Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the Report

NIL

11) The Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Companies Act 2013 isappended as Annexure 5 to this Report.

ACKNOWLEDGEMENTS

Your Directors wish to take this opportunity to express their appreciation andgratitude for the continued support extended by its Customers Investors PartnersVendors Financial Institutions Bankers Suppliers and various Government and StatutoryAuthorities for the Company’s growth.

Your Directors also express sincere appreciation for the commitment and dedicatedservices rendered by each employee of the Company at all levels.

On behalf of Board of Directors
Sd/-
Dated: 10th August 2015 Hiitesh Topiiwaalla
Place: Bangalore Managing Director

ANNEXURES TO DIRECTORS’ REPORT

ANNEXURE - 1 Form NO.MR-3

FOR THE FINANCIAL YEAR ENDED 31.03.2015

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration personnel) Rules 2014]

SECRETARIAL AUDIT REPORT

CIN: L24240GJ1985PLC008282

To

The Members

M/s Paramount Cosmetics (India) Limited

2211/A -1 III Phase G I D C Vapi Gujarat - 396195

I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good Corporate practices by

M/s Paramount Cosmetics (India) Limited (hereinafter called the "Company").Secretarial Audit was conducted in a manner that provided me a reasonable basis forevaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on the verification of Books Papers Minutes Books Forms and Returns filed andother records maintained by the Company and also the information provided by the Companyits officers agents and authorized representatives during the conduct of secretarialaudit I hereby report that in my opinion the Company has during the audit periodcovering the financial year ended 31st March 2015 complied with the statutory provisionslisted hereunder and also that the Company has proper Board-processes andcompliance-mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:

I. I have examined the Books papers Minute Books Forms and Returns filed and otherrecords maintained by the Company for the financial year ended 31st March 2015 accordingto the provisions of:

a) The Companies Act 2013 (the Act) and the Rules made thereunder;

b) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the Rulesmade thereunder;

c) The Depositories Act 1996 and the Regulations and Bye-Laws framed thereunder;

d) Foreign Exchange Management Act 1999 and the Rules and Regulations made thereunderto the extent of Foreign Direct Investment Oversea Direct Investment and ExternalCommercial Borrowings; (Not applicable to the Company for the reporting period)

e) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’) to the extent applicable :-

(i) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(ii) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(iii) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(iv) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

(v) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (Not applicable to the Company during the Audit Period)

(vi) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;(Not applicable to the Company during the Audit Period)

(vii) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and (Not applicable to the Company during the Audit Period)

(viii) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; (Not applicable to the Company during the Audit Period)

II. I have also examined compliance with the applicable clauses of the following:

a) Secretarial Standards issued by The Institute of Company Secretaries of India. (Notapplicable to the Company during the Audit Period) b) The Listing Agreements entered intoby the Company with Bombay Stock Exchange (BSE);

III. During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc.

Apart from this the following laws as identified by the management are specificallyapplicable to the Company:

a) The Legal Metrology Act 2009; b) The Drugs & Cosmetics Act 1940 and Rulesthereunder;

c) Shop and Establishment Act and Rules thereunder;

d) Factories Act 1948;

e) Labour Laws and other incidental laws related to Labour and employee appointed bythe Company in relation to wages gratuity Provident fund ESI and compensation I placereliance on the Management Representation letter regarding the compliance under theseActs.

IV. I further report that:

a) the company is duly constituted with proper balance of Executive DirectorsNon-Executive Directors and Independent Directors. The changes in the composition of theBoard of Directors that took place during the period under review were carried out incompliance with the provisions of the Act.

b) Adequate notice is given to all directors to schedule the Board Meetings committeesand agenda and detailed notes on agenda were sent at least seven days in advance except inone case However the Company has complied with the provisions of Section 173(3) of theCompanies Act 2013 and a system exists for seeking and obtaining further information andclarifications on the agenda item before the meeting and for meaningful participation atthe meeting.

c) None of the Directors in any meeting dissented on any resolution and hence there wasno instance of recording any dissenting members view in the minutes.

V. I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the

Company to monitor and ensure compliance with applicable Laws Rules Regulations andGuidelines.

VI. I further report that during the audit period the company had no instances

a) Public / Right / Preferential issue of shares / debentures/ sweat Equity

b) Redemption / buy back of shares

c) Merger/ amalgamation /reconstruction etc.

d) Major decisions taken by the members in pursuance to section 180 of the CompaniesAct 2013

e) No Foreign Technical collaboration

FOR G. R. & ASSOCIATES
Sd/-
(G. RAJENDRAN)
FCS : 3006
C P NO: 6526
Place: Bangalore
Date: 10th August 2015

ANNEXURE - 2

Particulars of Employees and related disclosures

1) Statement of Disclosure of Remuneration Under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; 39.74 Times
(ii) the percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Director’s - NIL
Chief Financial Officer - NIL
Company Secretary - NIL
(iii) the percentage increase in the median remuneration of employees in the financial year; 11%
(iv) the number of permanent employees on the rolls of company; 189
(v) the explanation on the relationship between average increase in remuneration and company performance; The increase is based upon the general increase in inflation and Company’s Performance
(vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the company; There is no increase in remuneration to any Key Managerial Personnel
Remuneration paid to KMP Total Turnover of the Company Net Profit of the Company
106.025 4836.05 173.56
(vii) variations in the market capitalisation of the company price earnings ratio as at the closing date of the current financial year and previous financial year; and (In Lacs)
31.03.2015 31.03.2014
Market Cap (In Rs.) 1640.99 740.39
PE 9.47 4.94
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; The Company has been in existence for more than 30 years. The Equity shares of the Company were listed more than 20 years back. Hence such old records (the Stock Exchange) data is not available for comparison of Share pricing at Public Offer.
(viii) 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; 10.68%
(ix) comparison of the each remuneration of the Key Managerial Personnel against the performance of the company; There is no increase in remuneration to any Key Managerial Personnel
(x) the key parameters for any variable component of remuneration availed by the directors; N.A.
(xi) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; and N.A.
(xii) affirmation that the remuneration is as per the remuneration policy of the company. Yes

2) Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

Employed during the financial year under review if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than sixty lakh rupees
Name of the Employee Hiitesh Topiiwaalla
Designation Managing Director
Remuneration Received Rs. 8827500/- P.A.
Nature of Employment (Contractual/ Otherwise) Employment
Qualification B.Com
Experience 25 Years
Date of Commencement of Employment 01.08.2005
Age 43 Years
Last Employment held Paramount Cosmetics (I) Ltd.
Percentage of Equity held in the Company 52.75%
Relative of any Director/ Manager of the Company Husband of Ms. Aartii Topiwaala

Employed during the financial year under review if employed for a part of thefinancial year was in receipt of remuneration for any part of that year at a rate whichin the aggregate was not less than five lakh rupees per month: Not Applicable

Employed during the financial year under review if employed throughout the financialyear or part thereof was in receipt of remuneration in that year which in the aggregateor as the case may be at a rate which in the aggregate is in excess of that drawn bythe Managing Director or Whole-Time Director or Manager and holds by himself or along withhis spouse and dependent children not less than two percent of the equity shares of theCompany: Not Applicable

ANNEXURE - 4

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3)of section 134 of the Companies Act 2013 andRule 8(2) of the Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section

(1) of section 188 of the Companies Act 2013 including certain arm’s lengthtransactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship NIL
(b) Nature of contracts/ arrangements/ transactions NIL
(c) Duration of the contracts / arrangements/ transactions NIL
(d) Salient terms of the contracts or arrangements or transactions including the value if any NIL
(e) Justification for entering into such contracts or arrangements or transactions NIL
(f) Date(s) of approval by the Board NIL
(g) Amount paid as advances if any NIL
(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188 NIL

2. Details of material contracts or arrangement or transactions at arm’s lengthbasis

(a) Name(s) of the related party and nature of relationship Paramount Kum Kum Private Limited
(b) Nature of contracts/ arrangements/ transactions Sale/Purchase
(c) Duration of the contracts / arrangements/ transactions Five Years
(d) Salient terms of the contracts or arrangements or transactions including the value if any: At Negotiated price being lowest among other Suppliers
(e) Date(s) of approval by the Board if any 13.02.2015
(f) Amount paid as advances if any: NIL

 

On behalf of Board of Directors
Sd/-
Dated: 10th August 2015 Hiitesh Topiiwaalla
Place: Bangalore Managing Director

ANNEXURE - 5

PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO REQUIRED UNDER THE COMPANIES ACT 2013

(A) Conservation of energy Description
a) The steps taken or impact on conservation of energy Though the Company is engaged in manufacturing activities but it does not consume high energy for production and therefore it has very limited scope for energy conservation.
b) The steps taken by the company for utilising alternate sources of energy The Company is conscious of energy saving and various initiatives have been taken by the Company to ensure that consumption of energy is at minimal levels in our operations wherever feasible.
c) The capital investment on energy conservation equipment’s NIL
(B) Technology absorption
a) The efforts made towards technology absorption Not Applicable
b) The benefits derived like product improvement cost reduction product development or import substitution Not Applicable
c) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Not Applicable
(i) the details of technology imported
(ii) the year of import;
(iii) whether the technology been fully absorbed;
(iv) if not fully absorbed areas where absorption has not taken place and the reasons thereof;
d) The expenditure incurred on Research and Development Not Applicable
(C) Foreign exchange earnings and Outgo
Foreign Exchange earned in terms of actual inflows during the year 5614689
Foreign Exchange outgo during the year in terms of actual outflows NIL

 

On behalf of Board of Directors
Sd/-
Dated: 10th August 2015 Hiitesh Topiiwaalla
Place: Bangalore Managing Director