Your Directors are pleased to present the 32nd Annual Report and the Audited FinancialStatements for the Financial Year ended 31st March 2017.
|1. Financial Results || ||(Rs. in Lakhs) |
| ||31.03.2017 ||31.03.2016 |
|Total Revenue ||4202.61 ||3877.03 |
|Profit before finance || || |
|cost depreciation || || |
|and tax expense ||464.56 ||441.10 |
|Finance cost ||70.54 ||50.38 |
|Profit before || || |
|depreciation and || || |
|tax expense ||394.02 ||390.72 |
|Depreciation ||83.94 ||83.60 |
|Profit before || || |
|tax expense ||310.08 ||303.34 |
|Tax expense ||39.64 ||69.64 |
|Net Profit for the year ||270.44 ||233.69 |
|Profit brought forward || || |
|from earlier year ||808.00 ||574.31 |
|Profit available for || || |
|appropriation ||1078.43 ||808.00 |
State of the Company's Affairs
Your Directors wish to present the details of Business operations done during the yearunder review: Your Company has recorded a total Revenue of Rs. 4202.61 lakhs as againstRs. 3877.03 lakhs in the previous year and the company has recorded the Profit beforeFinance Cost Depreciation and Tax Expenses of Rs. 464.56 lakhs (2016-17) as againstRs.441.10 lakhs (2015-16). In the current year the Net profit is Rs.270.44 Lakhs againstthe previous year 233.69 lakhs. There is steep increase in the Turnover and Profit duringthe year under review and the all efforts are being made to make the Company to bereckoned with in the Pharma Arena and your Directors are hopeful of the our Company wouldbe making better performances with higher turnover and profits in the coming years too.
The Management of the Company is making all its efforts for adding additional APIs formanufacturing by enhancing the production capacities and increased R & D efforts forwhich the management is also exploring the possibilities of various options to raise therequired funds.
The Management of the Company is pleased to inform that it has processed itsapplication for Environmental Clearence from Ministry of Environment and Forest and isconfident of obtaining MoEF Clearance by the end of September 2017 and CFE approval fromPollution Control Board by end-October 2017. Management is making all its efforts inbringing the unit at Zaheerabad operational by April 2018 wherein the Management islooking for establishing an US (FDA) approved Plant with also approvals from EDQM and TGA(Therapeutic Goods Administration) for manufacturing High Value Low Volume and Low VolumeHigh Value Active Pharmaceutical Ingredients (APIs). As soon as the unit becomesoperational the Management is confident of giving Gennex an International presence. Themanagement is exploring various options to raise the required funds to make the unitoperational.
Authorized Share Capital
During the year under review there was no change in authorized share capital of theCompany. Authorized share capital of the company as on March 31 2017 wasRs.160000000/- comprising of 160000000 equity shares of Re.1/- each.
Paid-up Share Capital
During the year under review there was no change in paid up share capital of theCompany. Paid up share capital of the company as on March 31 2017 was Rs. 126503000comprising of 126503000 equity shares of Re.1.
Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
The Company has not issued any Sweat Equity Shares during the year under review.
The Company has not issued any bonus shares during the year under review.
Employees Stock Option
The Company has not provided any Stock Option Scheme to the employees.
Your Directors have not recommended any dividend on Equity Shares for the year underreview.
Transfers to Reserves
Your Board of Directors does not appropriate any amount to be transferred to GeneralReserves during the year under review.
During the year under review your Company has not accepted any fixed deposits withinthe meaning of Section 73 of the Companies Act 2013 read with rules made there under
Subsidiaries and Associates
As on March 31 2017 we have one Associate and in this regard a statement containingthe salient features of the financial statement of our Associate in the prescribed formatAOC-1 is appended as Annexure -I to the Board's report.
Particulars of Contracts & Arrangements with Related Parties
All transactions entered by the Company with Related Parties were in the Ordinarycourse of Business and are at Arm's Length pricing basis. The Audit Committee grantedapprovals for the transactions and the same were reviewed by the Committee and the Boardof Directors. There were no materially significant transactions with Related Partiesduring the financial year 2016-17 which were in conflict with the interest of the Company.The details of Contracts and Arrangements with related parties as referred to in Section188(1) of the Companies Act 2013 are given as Annexure -II to the Board's Report in formNo: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014.
Particulars of Loans Guarantees or Investments
Pursuant to section 186 of Companies Act 2013 and Schedule V of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("Listing Regulations") the Company neither has directly or indirectlygiven any loan to its Directors nor extended any guarantee or provided any security inconnection with any loan taken by them. Further the Company has neither given anyinter-corporate loan / advance nor made any investments in other companies during thefinancial year 2016-17.
Number of Board Meetings held
During the year ended March 31 2017 Eight Board Meetings were held.
The dates on which the Board meetings were held are 30.05.2016 16.07.2016 13.08.201629.08.2016 14.11.2016 20.12.2016 14.02.2017 and 22.02.2017 the details of which aregiven in the Corporate Governance Report. The maximum interval between any two meetingsdid not exceed 120 days as prescribed in the Companies Act 2013 and SecretarialStandard-1.
The conservation of energy technology absorption foreign exchange earnings and outgopursuant to provisions of Section 134(3)(m) of the Companies Act 2013 (Act) read with theCompanies (Accounts) Rules 2014
Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies(Accounts) Rules 2014 is prepared and the same is enclosed as Annexure - III to thisReport.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees:
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure IV.
Extracts of Annual Return
The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014and the same is enclosed as Annexure - V to this Report.
Declaration by Independent Directors
The Independent Directors of the Company have submitted their declarations as requiredunder Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as per sub-section (6) of Section 149 of the Act.
Familiarization programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry.
Independent Directors' Meeting
The Independent Directors met on 14.02.2017 without the attendance of Non-IndependentDirectors and Members of the Management. The Independent Directors reviewed theperformance of Non-Independent Directors and the Board as a whole; the performance of theChairman of the Company taking into account the views of Executive Director andNon-Executive Directors and assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.
Directors Responsibility Statement as required under Section 134 of the Companies Act2013
Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms: i. that in the preparation of the Annual Accounts the applicable accountingstandards have been followed; ii. that the Directors have selected such
accounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2017 and of Profit and Loss Account of the Company for thatperiod; iii. that the Directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; iv. that the Directors have prepared the Annual Accounts for the FinancialYear ended March 31 2017 on a going concern basis; v. that the Directors have laid downInternal Financial Controls to be followed by the company and that such Internal FinancialControls are adequate and were operating effectively; and vi. that the Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.
Details of Directors or Key Managerial Personnel who were appointed or have resignedduring the Year
In terms of Section 152 of the Companies Act 2013 Mr. Arihant Baid Director wouldretire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr. ArihantBaid has offered himself for re-appointment. Based on the confirmations received fromDirectors none of the Directors are disqualified from appointment under Section 164 ofthe Companies Act 2013.
There was no other appointment or cessation of appointment of key managerial personnelduring the Financial Year.
In terms of the provisions of Section 139(1) of Companies Act 2013 (the"Act") no listed company can appoint or re-appoint an audit firm as auditor formore than two terms of five consecutive years. The Act further prescribes as per section139(2) that the Company shall comply with requirements within a period not later than thedate of First AGM held after three years from the commence of this Act. M/s. Laxminivas& Jain Chartered Accountants (Firm Registration No.001859S) Statutory Auditors ofthe Company have completed two consecutive terms of five years each. In terms of theirappointment made at the 29th AGM held on 30th September 2014 they shall hold office ofthe auditors up to the conclusion of the 32nd AGM. Your company's Board placed on recordits appreciation and gratitude to M/s. Laxminivas & Jain the retiring StatutoryAuditors for their long association with the Company and also thanked all the partners fortheir invaluable guidance rendered to the company.
Based on the recommendations of the Audit Committee and subject to the approval of theshareholders it is proposed to appoint M/s. Vinay Karwa & Associates CharteredAccountants (Firm Registration No.016004S) as Statutory Auditors of the Company for aperiod of 5 years commencing from the conclusion of 32nd AGM till the conclusion of the37th AGM. M/s.Vinay Karwa & Associates Chartered Accountants have consented to thesaid appointment and confirmed that their appointment if made would be within the limitsspecified under Section 141(3)(g) of the Act.
Qualification by Statutory Auditor
Information & Explanation in respect of Qualification / Reservation or Adverseremarks contained in Independent Auditor's Report under Paras: Basis for Qualifiedopinion Emphasis of Matter and Other Matters: Balance in Advances Deposits Unsecuredloans other Liabilities Trade Receivables Trade Payables and Advances against Suppliersare subject to confirmation by respective parties.
As pointed out by the Statutory Auditors the Company has not obtained confirmation ofbalances of Advances Deposits Unsecured Loans other liabilities Trade ReceivablesTrade Payables and Advance against Suppliers.
The Company has made best of its efforts to obtain the same before signing the accountsfor current Financial Year as well as for last Financial Year. Further the Management ofthe Company confirms that balances shown in the books are true and correct as per theirknowledge.
The Board of Directors of the Company appointed Mr. Laxmipat Baid to conduct InternalAudit of the Company for the Financial Year ended 31st March 2017.
There is no such incidence where Board has not accepted the recommendation of the AuditCommittee during the year under review.
Secretarial Audit Report
As per the provisions of Section 204 of the Companies Act 2013 the Board of Directorshas appointed M/s. BSS & Associates Company Secretaries as Secretarial Auditors toconduct Secretarial Audit of the company for the Financial Year ended on March 31 2017.Secretarial Audit Report issued by Mr. S. Srikanth Partner of M/s BSS & AssociatesCompany Secretaries in Form MR-3 is enclosed as Annexure - VI to this Annual Report. Thefollowing qualification was observed by the Secretarial Auditor in his Report to which theBoard has shared the following explanations: Qualification: The Company has not appointedCompany Secretary as required under the Provisions of section 203 of the Companies Act2013 and Regulation 6 of the Listing Regulation entered with Stock Exchange(s).
Response: The Company is in the process to appoint a suitable person as CompanySecretary of the company to comply the provisions under section 203 of the Companies Act2013 and the Board has taken the note of adverse qualification made by the SecretarialAuditor and ensure to comply accordingly.
Management Discussion and Analysis
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the
Management Discussion and Analysis discusses the key issues concerning the businesscarried on by the Company and the same is enclosed as Annexure - VII to this Report.
The Company is committed to good corporate governance in line with the Schedule V ofSEBI (LODR) Regulations 2015 and Provisions Rules and Regulations of the Companies Act2013. The Company is in compliance with the provisions on corporate governance specifiedin the Listing Agreement with BSE. A certificate of compliance from M/s. Laxminiwas &Jain a practicing Chartered Accountants and the report on Corporate Governance form partof this Directors' Report as Annexure VIII.
All properties and insurable interests of the Company including building plant andmachinery and stocks have been fully insured.
The Board of Directors have adopted Whistle Blower Policy. The Whistle Blower Policyaims for conducting the affairs in a fair and transparent manner by adopting higheststandards of professionalism honesty integrity and ethical behavior. All permanentemployees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairperson of the Audit Committee inexceptional cases.
Details in respect of adequacy of Internal Financial Controls with reference to theFinancial Statements
1. The Company has set Internal Control Systems to maintain accurate and completeaccounting records to safeguard its assets to prevent and detect any frauds and errors.
2. The Company has appointed Internal Auditors to observe the Internal Controlswhether the work flows of organization is being done through the approved policies of theCompany. In every Quarter during the approval of Financial Statements Internal Auditorswill present the Internal Audit Report and Management Comments on the Internal Auditobservations; and
3. The Board of Directors of the Company have adopted various policies like RelatedParty Transactions Policy Fixed Assets Policy Whistle Blower Policy Policy to determineMaterial Subsidiaries and such other procedures for ensuring the orderly and efficientconduct of its business for safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
The names of companies which have become or ceased to be company's subsidiaries jointventures or associate companies during the year:
Change in the nature of business
There is no change in the nature of business of the Company.
The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.
No Significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future.
Industrial relations continued to be cordial throughout the year under review.
Material changes and commitments
There are no Material changes and commitments in the business operations of the Companyfrom the Financial Year Ended 31st March 2017 to the date of signing of the Directors'Report.
Policy on Sexual Harassment
The Company has adopted Policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
During the Financial Year ended 31st March 2017 the Company has not received anyComplaints pertaining to Sexual Harassment.
Listing of Equity Shares
The Company's Equity shares are listed at the following Stock Exchanges: i. BSELimited Phiroze JeeJeebhoy Towers Dalal Street Mumbai - 400 001; and The Company haspaid the Annual Listing Fee to the said Stock Exchanges for the Financial Year 2017-18.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain Policiesfor all listed Companies. The Policies are reviewed periodically by the Board and updatedbased on need and new compliance requirement. i. Whistle blower Policy (Policy on vigilmechanism)
The Company has adopted the whistle blower mechanism for directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany's code of conduct and ethics. There has been no change to the Whistle blowerPolicy adopted by the Company during fiscal 2017. ii. Policy for Determining Materialityfor Disclosures
This Policy applies to disclosures of material events affecting. This policy is inaddition to the Company's corporate policy statement on investor relations which dealswith the dissemination of unpublished price-sensitive information. iii. Policy onDocument Retention
The Policy deals with the retention and preservation of corporate records of theCompany.
Share Transfer Agency
The Company has appointed M/s. R&D Infotech Pvt. Ltd. 1st Floor 7A Beltala RoadNaresh Mitra Sarani Kolkata 700 026 as its Share Transfer Agency for handling bothPhysical and Electronic Transfers.
Awards and recognition
The Company has been awarded DIN EN ISO 9001:2008 ISO 18001:2007 BS OHSAS 18001:2007and ISO 9001:2015 Certification by TUV NORD Cert GmbH for Management System formanufacture and sale of Active Pharmaceutical Ingredients and intermediates.
The Company has been awarded European Union -Written Confirmation (EU-WC) forGuaifenesin & Methocarbamol by the Central Drugs & Standard Control Organization(CDSCO) New Delhi for sale of the said products in European Markets as per statutoryrequirements of the Country.
The Company has been awarded WHO-GMP certification by the State Drug Licencingauthority. The Company has been awarded DUNS Registration by Dun & Bradstreet andrated the company as 4AS (Fair) under DUNS No. 86-217-2566.
Your Company treats its "Human Resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company's thrust is on the promotion of talent internally throughjob rotation and job enlargement.
Statements in these reports describing company's projections statements expectationsand hopes are forward looking. Though these expectations etc. are based on reasonableassumption the actual results might differ.
The Directors take this opportunity to place on record their sincere thanks to theBanks and Financial Institutions Insurance Companies Central and State GovernmentDepartments and the Shareholders for their support and co-operation extended to theCompany from time to time. Directors are pleased to record their appreciation of thesincere and dedicated services of the employees and workmen at all levels.
On behalf of the Board of Directors
| ||for Gennex Laboratories Limited |
| ||Arihant Baid |
| ||Managing Director |
| ||DIN: 01171845 |
| ||T.M. Gopalakrishnan |
|Hyderabad ||Whole Time Director |
|August 26 2017 ||DIN: 03137458 |