The Board of Directors of your Company presents the Twenty Second Annual Report on theaffairs of the Company together with the Audited Accounts of the Company for the yearended 31ST March 2018.
1. FINANCIAL RESULTS:
The Financial Results for the year under review vis--vis the financial results forthe previous year are as under:
| || ||(Rs. In millions) |
|Particulars ||2017-18 ||2016-17 |
|Net Sales ||718 ||691 |
|Profit before Depreciation Interest & Tax (PBDIT) ||(253) ||(732) |
|Financial Expenses ||83 ||99 |
|Depreciation ||216 ||219 |
|Profit before Tax (PBT) ||(552) ||(1050) |
|Provision for Taxation: || || |
|-Current Tax || || |
|-Deferred Tax ||18 ||31 |
|Profit after Tax (PAT) ||(570) ||(1081) |
|Profits available for equity shareholders || || |
|Appropriation: ||- ||- |
|Proposed Dividend on Equity Shares ||- ||- |
|Corporate Dividend Tax ||- ||- |
|Balance carried to Balance Sheet ||(570) ||(1081) |
|Earnings per Share (Basic) Rupees ||(9.21) ||(17.46) |
|Earnings per Share (Diluted)Rupees ||(9.21) ||(17.46) |
FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS
Your Directors are hereby reporting performance of the business operations as follows:-
Sales and Export: During the year under review your Company achieved aturnover of Rs. 718 million as compared to Rs. 691 million in the previous year with aincrease of 4%. The export of API products has also been lower at Rs. 161 million ascompared to 173 million in the previous year. Total exports including trading of productshave been at Rs. 232 million as compared to Rs. 307 million in previous year. The overalldecrease in exports sale has been owing to unfavorable market conditions and economicstress.
Profitability: During the period the Earnings before depreciationinterest and tax (EBDITA) has been (-) Rs. 253 million as compared to (-) Rs. 732millionduring the corresponding previous year. The Company incurred a loss before tax (PBT) ofRs. 552 million as compared to a loss of Rs.1050 million during the previous year. Aftertax adjustment of Rs. 18 million the net loss worked out to Rs. 570 million as comparedto a net loss of Rs. 1081 million in the previous year.
Assets: The net fixed assets (including work-in-progress) as at31stMarch 2018 were Rs. 3329 million as compared to Rs. 3554 million in the previousyear.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and in accordancewith the Articles of Association of the Company Mr. Pranav Gupta Director of the Companyretires by rotation at the forthcoming Annual General Meeting and being eligible offerhimself for re-appointment. Notice convening the Annual General Meeting includes theproposal for his re-appointment as the Director.
The present term of appointment of Mr. Jagjit Singh Chahal Mr. Sanjeev Kumar and Mrs.Vandana Singla (Independent & Non Executive Director) is expiring at the ensuringAnnual General meeting. The Board of Directors recommend their appointment for a furtherterm of one year.
Mr. Ashok Jindal CFO of the Company has resigned from the post w.e.f. 05.02.2018 andMs. Ishrat Gill Company secretary of the Company has resigned w.e.f. 20.12.2017 Pursuantto section 2 (51) and Section 203 of Companies Act 2013 Mr. Pranav Gupta (ManagingDirector) and Mr. Vineet Gupta (Whole Time Director) are the KMP's of the Company.
Statement on Declaration by Independent Directors
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theSection 149(6) of the Companies Act 2013 and Regulation 15 of SEBI (Listing Obligationsand Disclosure Requirements) 2015.
The Company has two wholly owned subsidiaries namely M/s. Parabolic Research LabsLimited and M/s. Ziven Life Sciences Limited. The consolidated Financial Statements ofthese subsidiaries and the Company shall be laid before the Annual General Meeting of theCompany.
Pursuant to Section 129 of the Companies Act 2013 a separate statement containing thesalient features of the financial statements of its subsidiary is attached along with theFinancial Statements of the Company.
4. SHARE CAPITAL:
During the year under review the Authorized Share Capital of the Company remainedunchanged at Rs. 72 Crores (divided into 72000000 Equity Shares of Rs. 10 each). ThePromoters/Promoters' Associates had contributed Rs 260 million as their additionalcontribution towards equity share capital for the allotment of 18055556 equity sharesat a price of Rs. 14.40/-(face value Rs.10 and premium Rs.4.40) per equity share in termsof sanctioned CDR package. The allotment of said shares to proposed allottee (s) has beenpending for want of receipt of in principle approval from the NSE.
5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis of financial conditions and result of operations ofthe Company for the Financial Year 2017-18 as required under Regulation 34 of SEBI(Listing Obligations and Disclosure Requirement) Regulation 2015 are annexed hereto as aseparate statement in the Annual Report.
6. CORPORATE GOVERNANCE REPORT:
The Company aimed to conduct its affairs in ethical manner and has in place a system ofCorporate Governance. A separate report on Corporate Governance forming a part of theAnnual Report is annexed hereto. A certificate from the Statutory Auditors of the Companyregarding the compliance of conditions of Corporate Governance as stipulated underRegulation 27 of SEBI (Listing Obligations and Disclosure Requirement) Regulation 2015 isannexed to the report on Corporate Governance.
Pursuant to the provisions of Section 139 of the Companies Act 2013 every companyat its first Annual General Meeting has to appoint an individual or a firm as an auditorwho shall hold office from the conclusion of that meeting till the conclusion of its sixthAnnual General Meeting. No listed company or a company belonging to such class or classesof companies as may be prescribed shall appoint or re-appoint an audit firm as auditorsfor more than two terms of five consecutive years. However a time of three years has beengiven for the compliance of the said provisions.
The Board has recommended to appoint M/s. V.K. Jindal & Company CharteredAccountants Chandigarh for a period of one year who shall hold office from the conclusionof this annual general meeting till the conclusion of next annual general meeting.
8. AUDITORS' REPORT:
The Auditors' Report on the Annual Accounts of the Company for the year underreview is self-explanatory and requires no comments. During the year there were noinstances of frauds reported by auditors under section 143(12) of the Companies Act 2013
9. SECRETARIAL AUDITORS' REPORT:
Pursuant to section 204 of the Companies Act 2013 M/s M.L. Aggarwal &Associates Practising Company Secretary (COP no 13944) Chandigarh was appointed by theBoard to conduct secretarial audit of the Company for the FY 31st March 2018. TheSecretarial Audit Report is attached as an annexure.
10. APPOINTMENT OF COST AUDITOR:
The Board of Directors has approved the appointment of M/s. Anil Sharma & Co.Cost Accountants Chandigarh as the Cost Auditors of the Company for the Financial Year2017-18 subject to the approval of the Members in the ensuing Annual General Meeting ofthe Company. The cost audit report for the Financial Year 2017-18 will be forwarded to theCentral Government as required under Law. Further Cost Audit report for F.Y. 2016-17 hasbeen submitted to Central Government.
11. INTERNAL CONTROL SYSTEM:
The company has in place well designed adequate internal controls with reference tofinancial statements. These controls ensure the accuracy and completeness of theaccounting records and preparation of reliable financial statements.
12. FIXED DEPOSITS:
During the year under review the Company has not accepted any deposits from the publicin terms of the provisions of Sections 73 of the Companies Act 2013.
In view of the loss incurred by the Company during the year under review the Board ofDirectors has not recommended any dividend for the Financial Year 2017-18.
14. PERSONNEL AND HUMAN RESOURCES:
Your Company continues to lay emphasis on continued qualitative growth of its humanresources by providing a congenial and conducive work environment in consonance with itsbelief that the real strength of its organization lies in its employees.
15. INDUSTRIAL RELATIONS:
The Industrial Relations between the employees and the management remained peacefuland cordial throughout the year at all the units of the Company.
16. STATEMENT OF PARTICULARS OF EMPLOYEES: A statement of Particulars of Employeespursuant to the provisions of Section 134 of the Companies Act 2013 is enclosed andforms a part of this report.
The Company inter-alia with the following entities constitutes a group:
a) PNG Trading Private Limited
b) Parabolic Infrastructure Private Limited
18. MEETINGS OF BOARD OF DIRECTORS:
The Board of Directors met Seven times during the financial year. Detail of boardmeeting is given in corporate governance report.
19. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:-
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. appropriate accounting policies have been selected and applied consistently andhave made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2018 and of the profitand loss of the Company for the year ended on 31st March 2018;
c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act2013 for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;and
d. the annual accounts have been prepared on a going concern basis.
e. adequate internal financial controls to be followed by the Company have been laiddown and such controls were operating effectively.
f. proper and adequate systems to ensure compliance with the provisions of allapplicable laws have been
devised and such systems were operating effectively.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Energy conservation continues to be an area of major emphasis in our Company. TheCompany has adopted the strategy of bringing about a general awareness amongst allregarding energy conservation.
Particulars with respect to conservation of energy and other areas as per Section 134(3) (m) of the Companies Act 2013 read with the Companies (Disclosure of Particulars inthe Report of Board of Directors) Rules1988are annexed hereto and form part of thisreport.
21 . MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITIONOF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TOWHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
a) M/s. J.M. Financial Asset Reconstruction Company (the lead lender) while exercisingits right to enforce security interest under the SARFAESI ACT 2002 has taken physicalpossession of the unit located at Plot No. 45 Industrial Area Phase II Panchkula on16thMarch 2018. Thereafter M/s. J.M. Financial Asset Reconstruction Company has sold theunit on 21st May 2018. Likewise the lender has taken symbolic possession of Company'sR&D Unit located at Plot No. 280-281 Phase 1 Block -1 Alipur industrial estates HSIIDC Tehsil Barwala Haryana on16th March 2018.
b) M/s. J.M. Financial Asset Reconstruction Company (the lead lender) the financialcreditor and M/s. Weather Makers Pvt. Ltd Laxon Drugs Pvt. Ltd. and GMP TechnicalSolutions Pvt. Ltd has filled applications under section 7 and section 9 of the Insolvency& Bankruptcy Code 2016 for initiating corporate insolvency resolution process againstthe company before the Honorable NCLT Chandigarh Bench Chandigarh.
22. REMUNERATION TO DIRECTORS/EMPLOYEES AND RELATED ANALYSIS:
During the period under review no employee of the Company received salary in excess ofthe limits as prescribed under the Act. Accordingly no particulars of employees are beinggiven pursuant to Section 134 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The details pertaining to the ratio of the remuneration of each director to the medianemployee's remuneration and other prescribed details as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(1) of the Companies (Appointment And Remunerationof Managerial Personnel) Rules 2014 are annexed herewith and form part of the Directors'Report as Annexure I.
23. EXTRACT OF THE ANNUAL RETURN:
Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2018 forms part of thisreport
24 . VIGIL MECHANISM/WHISTLE BLOWER POLICY:
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act 2013 andRegulation 22 Of SEBI (Listing Obligations and Disclosure Requirements) 2015 a VigilMechanism/Whistle Blower Policy for Directors and employees to report genuine concerns hasbeen established
25. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The provisions of Section 135 of Companies Act 2013 are not applicable to the Company.
26. NOMINATION AND REMUNERATION POLICY:
The Company's Nomination and Remuneration Policy formulated by the Nomination andRemuneration Committee deals with the appointment and remuneration of Directors and KMPsof the Company. The policy also covers the criteria for determining qualificationspositive attributes independence of a Director and KMP. In terms of Section 134(3)(e) ofCompanies Act 2013 the Nomination and Remuneration Policy of the Company is annexedherewith and forms part of the Directors' Report.
27. RISK MANAGEMENT POLICY:
Your Company has a Risk Management Policy in place duly approved by the Board ofDirectors wherein all material risks faced by the Company are identified and assessed.For each of the Risks identified corresponding controls are assessed and policies andprocedure are put in place for monitoring mitigating and reporting risk on a periodicbasis.
28 . LISTING / DE-LISTING OF SHARES:
The Shares of your Company are presently listed on The Bombay Stock Exchange LimitedMumbai (BSE) and National Stock Exchange (NSE).
29 . RELATED PARTY TRANSACTIONS:
Particulars of contracts or arrangements with related parties referred to in Section188 (1) of the Companies Act 2013 in the prescribed Form AOC -2 is appended as Annexure2 to the Board's report. Details of related party disclosures form part of the notes tothe financial statements provided in this annual report.
30. PERFORMANCE EVALUATION OF THE BOARD:
This part is covered under Corporate Governance Report.
31 . ACKNOWLEDGEMENT:
Your Directors are pleased to place on record their sincere gratitude to theGovernment Bankers and Business Constituents and the shareholders for their continuedsupport to and the confidence reposed in the Company.
Your Directors also express their deep appreciation for the devoted and sincereservices rendered by workers staff and executives at all levels of the organization andwe are confident that our Company will continue to receive such co-operation from them infuture also.
| || ||FOR AND ON BEHALF OF THE BOARD |
| ||Sd/- ||Sd/- |
|PLACE: Chandigarh ||Vineet Gupta ||PRANAV GUPTA |
|DATED: 14.08.2018 ||Whole Time Director ||Managing Director |