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Paramount Cosmetics (India) Ltd.

BSE: 507970 Sector: Consumer
NSE: N.A. ISIN Code: INE143I01013
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NSE 05:30 | 01 Jan Paramount Cosmetics (India) Ltd
OPEN 45.50
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VOLUME 60
52-Week high 130.95
52-Week low 19.10
P/E 113.75
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 45.50
CLOSE 45.50
VOLUME 60
52-Week high 130.95
52-Week low 19.10
P/E 113.75
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

Your Directors have pleasure in presenting the 36th Annual Report of yourCompany together with the business operations for the year ended 31stMarch2021.

FINANCIAL RESULTS

Your Company's performance during the year as compared with that during the previousyear is summarized below:

(Figures in Rs. lakhs) (Figures in Rs. lakhs)
Particulars Year ended 31.03.2021 Year ended 31.03.2020
Sales and other Income 1750.40 2417.95
Profit before Depreciation Interest Exceptional Items 371.70 395.38
Depreciation 106.36 124.67
Interest and Finance Charges 231.06 225.22
Profit before Tax 38.18 45.49
Net Profit/Loss 34.28 -11.77
Re Measurement of net defined benefit plan(Net of tax) 20.81 4.34
Balance carried forward to the Balance Sheet 55.09 -7.44

INDIAN ACCOUNTING STANDARDS

The financial statements for the financial year 2020-21 have been prepared inaccordance with the applicable Indian Accounting Standards (INDAS) and the correspondingfigures for the previous year have been restated as per IND-AS for the purpose ofcomparison.

PERFORMANCE DURING THE YEAR

Sales and other Income of the Company for the year is Rs. 1750.40 lakhs as compared toRs. 2417.95 lakhs in the previous year showing decrease of 27.61%. PBDIT has shown adecrease of 6% over its preceding year. Company has incurred a profit after tax amountingto Rs.34.28 lakhs in comparison to a loss of Rs. 11.77 lakhs last year.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the financialyear 2020-21. DIVIDEND

The Board of Directors has decided to conserve the profit and has decided not topropose any dividend on Equity shares this financial year.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31 2021 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 2021 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.

DEPOSITS

The Company has not accepted any deposits covered under Chapter V of the Companies Act2013 read with The Companies (Acceptance of Deposits) Rules 2014.

TRANSFER TO RESERVE

Your Directors transfer profit of Rs. 34.28 Lakh to the General Reserve.

MATERIAL CHANGES AND COMMITMENTS

During FY 2020-21 the Financial position of the Company did have some impact due torestrictions imposed continuously due to Covid-19 Pandemic.

During FY 2020-21 the Company had a greater impact due to Continuous restrictionsimposed throughout the year. The revenue of the Company profitability and the generalmarket sentiments has impacted drastically impacting its liquidity. Your Company is in thebusiness of non-essential items the Company's operations were affected at large. Afterresumption of Unlock 1 our factories and offices opened with only 30% of working capacityin the month of June 2020 and this has heavily impacted our business to maintain ourbusiness operations and to even cover our business expenses.

The Company because of Covid-19 pandemic and its effects on lockdowns / restrictionson movement of people estimates huge loss of revenue which will hugely impact thecapability and maintain the infrastructure and people. This further affected theprofitability and cash flows.

Hence the Covid-19 pandemic will have material impact on the financial position of theCompany.

EXTRACT OF ANNUAL RETURNS

As provided under Section 92(3) of the Act the extract of annual return is given in Annexure-IV in the prescribed Form MGT-9 which forms part of this Report. Further a copy ofAnnual Return under Section 92(3) will be placed on the website of the Company @ https://www.parammount.com/.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Ms. Aartii Topiwaala who was appointed as non-executive promoter Director of theCompany is liable to retire by rotation is eligible for re-appointment and has tenderedher willingness to be re- appointed.

The Company has received declarations from all the existing Independent Directors ofthe Company confirming that they meet the criteria of independence as prescribed bothunder the Companies Act and SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015.

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015 the performance evaluation of IndependentDirectors was completed. The performance evaluation of Chairman and the Non-IndependentDirectors was carried out by the Independent Directors. The Board of Directors expressedtheir satisfaction with the evaluation process.

The details of programmes for familiarization 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.

During FY 2020-21 The Company appointed Mr. Santosh Shah as Company Secretary w.e.fAugust 17 2020 and Mr. Rajnish Matta as Chief Financial officer w.e.f. September 92020.

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) Share Transfer Committee

d) Stakeholders Relationship Committee

DIRECTORS' RESPONSIBILITY STATEMENT 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 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. PARY & CO. Chartered Accountants Surat (FRN: 007288C) were appointed asStatutory Auditors of the Company in the 34th Annual General Meeting (AGM) tohold office for a period of 5 consecutive years until conclusion of 39thAnnual General Meeting. The Auditors have confirmed that they are not disqualified fromcontinuing as Auditors of the Company.

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

SECRETARIAL STANDARD OF ICSI

The Directors state that the applicable Secretarial Standards i.e. SS-1 and SS-2issued by the Institute of Company Secretaries of India relating to Meeting of Board ofDirectors and General Meetings respectively have been duly complied with.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and rules made thereunder the Company has appointed M/s. K.P. Ghelani & Associates a firm of CompanySecretaries (C P No.12468) to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is included as an Annexure I forming part of this AnnualReport.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015 the performance evaluation of IndependentDirectors was completed. The performance evaluation of Chairman and the Non-IndependentDirectors was carried out by the Independent Directors. The Board of Directors expressedtheir satisfaction with the evaluation 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.

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 SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015 is presented in a separate section forming partof the Annual Report.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors was held on March 15 2021 without presenceof non- Independent Directors. In accordance with the SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015 the following matters were inter alia reviewedand discussed in the meeting:

• Performance of Non-independent Directors and the Board of Directors as a whole.

• Performance of the Chairman of the Company taking in to consideration the viewsof Executive and Non-Executive Directors.

• Assess the quality quantity and timeliness of flow of information between theCompany Management and the Board that is necessary for the Board to electively andreasonably perform their duties.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder The SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015 ispresented in a separate section forming part of the Annual Report.

POLICIES OF THE COMPANY

The Board of Directors have framed the following policies. The details of thesepolicies are 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

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013:

As required under the above mentioned Act we report that in the year 2020-21 no caseof sexual harassment of women was filed under the said Act.

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's lengthbasis. During the year the Company had entered into contract / arrangement / transactionwith related parties which could not be considered material in accordance with the policyof the Company on materiality of Related Party transactions.

Your Directors draw attention of the members to Notes to Accounts section of thefinancial statement on related party which 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 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. Due to Covid-19 pandemic thereports and accounts are sent to email address of the members whose names are registeredwith Company / Registrar and Transfer Agent.

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) Number of Meetings of the Board

The details of the number of meetings of the Board held during the financial year2020-21 forms part of the Corporate Governance Report.

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

The Secretarial Auditor in its report has mentioned that the Company during for FY2020-21 ended as on March 31 2021 required re-constitution of Audit committeeNomination & Remuneration Committee Stakeholder Relationship committee ShareTransfer committee as per Regulation 1819 20 of SEBI LODR Regulations.

Board Comment: The Board has taken note of the said qualification and wish to informthat the Board of Directors are in process of identifying suitable candidature for thepost of a Director and on identification will re-constitute the committees in line withSEBI LODR Regulations.

The Secretarial Auditor in its Report also states that the Company did not have aCompany Secretary during the period January 11 2020 to August 16 2020. Mr. Santosh Shahalso resigned w.e.f. May 13 2021.

Board Comment: The Board had taken note of the same and was in process of identifyingthe candidature suitable for the post of Company Secretary. However due to Covid-19 andLockdowns kick started from March 2020 and onwards there was some delay in appointing newCompany Secretary. The Company has currently in process of appointing a suitable candidatefor company secretary.

5) 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.

6) 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 II to this Report.

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

NIL

8) 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

During FY 2020-21 the Financial position of the Company did have some impact due toLock- down imposed in the last month of March 2020 (specifically last week of March 2020)due to Covid-19 Pandemic. The operations of the Company were shut during to nationwidelockdown / restrictions imposed from March 25 2020 which has impacted its business tosome extent in said FY 2020-21.

During FY 2020-21 the revenue of the Company profitability and the general marketsentiments has impacted its liquidity. Your Company is in the business of non-essentialitems and during lock down in the month of April & May 2020 the Company's operationswere fully shut (except work from home wherever was feasible). After resumption of Unlock1 our factories and offices opened with only 30% of working capacity in the month of June2020 and this has impacted our business to maintain our business operations and to evencover our business expenses.

The Company because of Covid-19 pandemic and its effects on lockdowns / restrictionson movement of people estimates loss of revenue which will impact the capability andmaintain the infrastructure and people. This further affected the profitability andcashflows.

Hence the Covid-19 pandemic will have material impact on the financial position of theCompany. However the Board is also of the view that the effect of the Pandemic on theCompany is for short term and the Company may be in position to overcome these challengesin the medium term and long term.

9) 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 III 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.

By Order of the Board
Paramount Cosmetics (India) Limited
Hiitesh Topiiwaalla
Managing Director
Place: Bangalore DIN: 01603345
Date: 03.09.2021

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