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Paramount Cosmetics (India) Ltd.

BSE: 507970 Sector: Consumer
NSE: N.A. ISIN Code: INE143I01013
BSE 00:00 | 21 Sep 31.00 -0.35
(-1.12%)
OPEN

30.10

HIGH

31.00

LOW

30.10

NSE 05:30 | 01 Jan Paramount Cosmetics (India) Ltd
OPEN 30.10
PREVIOUS CLOSE 31.35
VOLUME 1060
52-Week high 36.60
52-Week low 13.45
P/E 5.56
Mkt Cap.(Rs cr) 15
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 30.10
CLOSE 31.35
VOLUME 1060
52-Week high 36.60
52-Week low 13.45
P/E 5.56
Mkt Cap.(Rs cr) 15
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 35th Annual Report of yourCompany together with the business operations for the year ended 31st March2020.

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 31.03.2020 Year ended 31.03.2019
Sales and other Income 2421.76 2190.92
Profit before Depreciation Interest Exceptional Items 395.38 444.27
Depreciation 124.67 142.55
Interest and Finance Charges 225.22 250.37
Profit before Tax 45.49 51.35
Net Profit/Loss -11.77 -12.77
Re Measurement of net defined benefit plan(Net of tax) 4.34 12.33
Balance carried forward to the Balance Sheet -7.43 -0.43

*Previous year's figures have been regrouped / reclassified wherever necessary toconfirm to the current year presentation. INDIAN ACCOUNTING STANDARDS

The financial statements for the financial year 2019-20 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. 2421.76 lakhs as compared toRs. 2190.92 lakhs in the previous year showing an increase of 10.53%. PBDIT has shown adecrease of 11% over its preceding year. Company has incurred a loss after tax amountingto Rs.l1.77 lakhs in comparison to a loss of 12.77 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 2019-20.

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 312020 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 2020 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 do not propose to transfer any amount to the General Reserve.

MATERIAL CHANGES AND COMMITMENTS

During FY 2019-20 the Financial posititon 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 252020 which has impacted its business tosome extent in said FY 2019-20.

During FY 2020-21 the Company had a greater impact due to Lockdowns imposed in thefirst quarter of FY 2020-21. 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 and during lock down in the month of April & May2020 the Company's operations were fully shut (except work from home wherever wasfeasible). After resumption of Unlock 1 our factories and offices opened with only 30% ofworking capacity in the month of June 2020 and this has heavily impacted our business tomaintain our business operations and to even cover our business expenses.

Supply Chain disruptions in India as a result of the outbreak started with restrictionson movement of goods closure of borders etc. in several states followed by a nationwidelockdown from the 25th of March 2020 announced by the Indian Government to stem thespread of COVID-19. Due to this the operations of your company's manufacturingdistribution centres and extended supply chain partner locations got temporarilydisrupted.

The Company beacause 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 cashflows.

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 inAnnexure -IV in the prescribed Form MGT-9 which forms part of this Report. Further acopy of Annual 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 on September 30th 2019 as a director liable to retire by rotation iseligible for re-appointment and has tendered her willingness to be re-appointed.

The Company's Independent Directors include Mr.Vishwajeet Nalinkant Mehta and Mr.Shishir Babubhai Desai who have been re-appointed for a term of 5 years in the 34thAnnual General Meeting held on 30th September 2019. During FY 2019-20 Mr.Mukesh Tyagi Independent Director resigned from said post in February 2020.

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 2019-20 Ms. Pooja Agrawal resigned as Company Secretary & Complianceofficer of the Company w.e.f. January 10 2020 and necessary communications with the BSEand ROC was communicated accordingly.

During FY 2020-21 Ms. Pratyusha Katam resigned as Chief Financial Officer of theCompany. The Company appointed Mr. Santosh Shah as Company Secretary w.e.f August 172020and Mr. Rajnish Matta as Chief Financial officer w.e.f. September 9 2020.

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

e) Risk Management Committee

f) Independent Director 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 subject to ratification by members at every inter-verting AGM. TheBoard proposes the ratification of auditors to the shareholders at ensuing AGM.

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 madethereunder the Company has appointed M/s. K.P. Ghelani & Associates CompanySecretaries bearing CoP 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.

The requisite certificate from the Practicing Company Secretary M/s. K. P. Ghelani& Associates confirming compliance with the conditions of Corporate Governance asstipulated under the SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015in a separate section forming part of the Annual Report.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors was held on March 5 2020 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 2019-20 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 the reports andaccounts are sent to email address of the members whose names are registered with 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 year2019-20 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 FY2019-20 ended as on March 31 2020 required re-constitution of Audit committeeNomination & Remuneration Commiittee Statkeholder Relationship committee and ShareTransfer committee from February 11 2020 on account of resignation of Mr. Mukesh Tyagi.

Board Comment: The Board has taken note of the observations of the auditor and wishto inform that the Board of Directors are in process of identifying suitable candidaturefor the post of a Director and on identification will re- constitute the committees inline with SEBI 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.

Board Comment: The Board had taken note of the same and was in process ofidentifying the candidature suitable for the post of Company Secretary. However due toCovid-19 and Lockdowns kickstarted from March 2020 and onwards there was some delay inappointing new Company Secretary. The Company has currently appointed Company Secretaryw.e.f August 17 2020.

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 Form AOC-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 2019-20 the Financial posititon 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 252020 which has impacted its businessto some extent in said FY 2019-20.

During FY 2020-21 the Company had a greater impact due to Lockdowns imposed in thefirst quarter of FY 2020- 21. The revenue of the Company profitability and the generalmarket sentiments has impacted its liquidity . Your Company is in the business ofnon-essential items and during lock down in the month of April & May 2020 theCompany's operations were fully shut (except work from home wherever was feasible). Afterresumption of Unlock 1 our factories and offices opened with only 30% of working capacityin the month of June 2020 and this has impacted our business to maintain our businessoperations and to even cover our business expenses.

The Company beacause 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.

10) Corporate Social Responsibility - The Company do not meet the requisitecriteria specified under Section 135 of the Companies Act 2013 thereby requirement ofconstitution of CSR Committee and/or spending the CSR amount on the CSR Projects does notarise for the FY 2019-20 ended as on March 312020.

11) Disclosure on Detection of Fraud or Other Irregularities

Pursuant to provisions of Section 134(3)(ca) of the Companies Act 2013 your directorsreport that there are no fraud or other irregularities detected/ reported by the Auditorsunder Section 143 (12) of the Companies Act 2013.

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.

.