The Members of
Gennex Laboratories Limited
Your Directors are pleased to present the 35thAnnual Report and theStandalone and Consolidated Audited Financial Statements for the Financial Year endedMarch 31 2020.
Financial Highlights and Performance: 1. Financial Results
|PARTICULARS || |
| ||March 31 2020 ||March 31 2019 ||March 31 2020 ||March 31 2019 |
|Revenue from Operations ||5561.73 ||5580.26 ||5561.73 ||5580.26 |
|Other Income ||95.14 ||78.25 ||95.14 ||78.25 |
|Total Income ||5656.87 ||5658.52 ||5656.87 ||5658.52 |
|Share of Profit/(Loss) of Associates || || || || |
|Profit before Finance Cost Depreciation and Tax Expense ||430.72 ||480.57 ||430.72 ||480.57 |
|Finance Cost ||75.36 ||79.38 ||75.36 ||79.38 |
|Depreciation ||100.5 ||98.47 ||100.5 ||98.47 |
|Tax Expenses ||69.23 ||80.64 ||69.23 ||80.64 |
|Net Profit after Tax for the year ||185.63 ||222.08 ||185.63 ||222.08 |
|Other Compressive Income/ (Loss) (net of tax) || || || || |
|Total Comprehensive Income ||185.63 ||222.08 ||185.63 ||222.08 |
Review of operations
Your Directors wish to present the details of Business operations done during the yearunder review:
During the year under review your Company has recorded a total Revenue of Rs.5656.87lakhs as against Rs.5658.52 lakhs in the previous year and the company has recorded theProfit before Finance Cost Depreciation and Tax Expenses of Rs.430.72 lakhs (2019-20) asagainst Rs.480.57 lakhs (2018-19). In the current year the Net profit is Rs.185.63 Lakhsagainst the previous year Rs.222.08 lakhs. There is a decrease in the Profit during theyear under review and the all efforts are being made to make the Company to be reckonedwith in the Pharma Arena and your Directors are hopeful that the Company would be makingbetter performances with profits in the coming years.
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.
Kothur Unit: The Management of the
Company is making all its efforts in bringing the unit at Kothur near Zaheerabad intooperation by end December 2020 and the Company is in the process of getting thePollution Control Board (PCB) approval.
The Management is looking for establishing an US (FDA) approved Plant with allapprovals from EDQM and TGA for manufacturing High Value Low Volume and Low Volume HighValue Active Pharmaceutical Ingredients (APIs) at Kothur near Zaheerabad and as soon asthe unit becomes operational the Management is confident of giving Gennex anInternational presence. The management is exploring various options to raise the requiredfunds to make the unit operational.
Authorized Share Capital - During the year under review there was no change inauthorized share capital of the Company. Authorized share capital of the company as onMarch 31 2020 was Rs.160000000/- comprising of 160000000 equity shares of Rs.1/-each.
Paid-up Share Capital - During the year under review there was no change inpaid up share capital of the Company. Paid up share capital of the company as on March 312020 was Rs.126503000/- comprising of 126503000 Equity Shares of Rs.1/- each.
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 Joint Ventures and Associates
As on March 31 2020 we have one Associate and in this regard a Statement containingthe salient features of the Financial Statement of our Associates 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 Parties during thefinancial year 2019-20 which were in conflict with the interest of the Company. Thedetails of contracts and arrangements with Related Parties as referred to in Section188(1) of the Companies Act 2013 were given asAnnexure - II to the Board's Reportin form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of theCompanies (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 nor 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 2019-20.
Number of Board Meetings held
During the financial year ended March 31 2020 Eight Board Meetings were held.
The dates on which the Board Meetings were held are 12.04.2019 30.05.2019 06.07.201914.08.2019 24.08.2019 14.11.2019 30.01.2020 and 14.02.2020 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 Secretarial Standard-1.
The Board of directors have carried out an evaluation of its own performance and of itsCommittee as well as its individual Directors on the basis of criteria such as Compositionof the Board / Committee Structure effectiveness its process information andfunctioning etc.
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 tothis Report.
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 Extractsof Annual Return
As required by Section 92 (3) of the Act Read with Rule 12(1) of the Companies(Management and Administration) Rules 2014 extract of the Annual Return in Form MGT 9 isavailable on the Company's website at www.gennexlab.com
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 of independence as per sub-section (6) ofSection 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 14.02.2020 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 accounting standardshave been followed;
ii. that the Directors have selected such Accounting Policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2020 andof Profit and Loss Account of the Company for that period;
iii. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the Directors have prepared the Annual Accounts for the Financial Year endedMarch 31 2020 on a going concern basis;
v. that the Directors have laid down Internal Financial Controls to be followed by thecompany and that such Internal Financial Controls are adequate and were operatingeffectively; and
vi. that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
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.
Key Managerial Personnel (KMP)
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2020 are: Mr. Arihant Baid Managing Director Mr. T M GopalaKrishnan Whole Time Director Mr. Laxmipat Baid CFO and Mr. Rajesh Vankadara CompanySecretary of the Company.
Policy on Directors' appointment and remuneration and other details
Under Section 178 (3) of the Companies Act 2013 the Nomination and RemunerationCommittee of the Board has adopted a policy for nomination remuneration and other relatedmatters for Directors and senior management personnel. A gist of the policy is availablein the Corporate Governance Report.
M/s. PPKG & Co. Chartered Accountants (Firm Registration No. 009655S)wereappointed as Statutory Auditors of your Company to hold office from the conclusion of the33rd AGM held in the year 2019 until the conclusion of the 38th AGMto be held in the year 2023. Accordingly M/s.PPKG& Co. Chartered Accountants (FirmRegistration No. 009655S) Statutory Auditors of the Company will continue till theconclusion of Annual General Meeting to be held in 2023. In this regard the Company hasreceived a Certificate from the Auditors to the effect that their continuation asStatutory Auditors would be in accordance with the provisions of Section 141 of theCompanies Act 2013.
Auditors' Report and Secretarial Auditors' Report
1. Auditors' Report
Qualifications Reservations or Adverse Remarks:
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 Matter:
The Balances of Current Assets Other NonCurrent Assets Non-Current Liabilities OtherNon-Current Liabilities Current Liabilities & other Current Liabilities are subjectto confirmations/reconciliations. The Impact of the same is unascertained
Board's Response:- As pointed out by the Statutory Auditors the company has notobtained confirmation of The Balances of Current Assets Other Non-Current AssetsNon-Current Liabilities Other Non-Current Liabilities Current Liabilities & otherCurrent Liabilities. The Company has made best of its efforts to obtain the same beforesigning the accounts for current financial year as well as for last financial year.Further the Management of the Company confirms that balances shown in the Books are trueand correct as per their knowledge.
2. Secretarial Audit Report
As per the provisions of Section 204 of the Companies Act 2013 the Board of Directorshas appointed M/s. B S S & Associates Company Secretaries as Secretarial Auditors toconduct Secretarial Audit of the company for the Financial Year ended on March 31 2020.Secretarial Audit Report issued by Mr. S. Srikanth Partner of M/s. B S S& AssociatesCompany Secretaries in Form MR-3 is enclosed as Annexure - V to this AnnualReport.
The Board of Directors of the Company appointed Mr. Laxmipat Baid Chief FinancialOfficer to conduct Internal Audit of the Company for the Financial Year ended March 312020.
There is no such incidence where Board has not accepted the recommendation of the AuditCommittee during the year under review.
Sub Committees of the Board
The Board has Audit Committee Nomination and Remuneration Committee and Stakeholders'Relationship Committee. The composition and other details of these Committees have beengiven in the Report on the Corporate Governance forming part of the Annual Report
Corporate Social Responsibility (CSR) Initiatives
Section 135 of the Companies Act 2013 provides the threshold limit for applicabilityof the CSR to a Company ie. (a) net worth of the Company to be Rs.500 crore or more; or(b) turnover of the company to be Rs. 1000 crore or more; or (c) net profit of thecompany to be Rs. 5 crore or more. As the Company does not fall under any of the thresholdlimits given above the provisions of section 135 are not applicable to the Company
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 ManagementDiscussion and Analysis given below discusses the key issues concerning the business andcarried on by the Company and the same is enclosed as Annexure - VI 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. PPKG & Co.Chartered Accountants and the report on Corporate Governance form part of this Directors'Report as Annexure - VII.
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: -NIL-
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 March 31 2020 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 March 31 2020 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:
BSE Limited Phiroze JeeJeebhoy Towers Dalal Street Mumbai - 400 001; and The Companyhas paid the Annual Listing Fee to the said Stock Exchanges for the Financial Year2019-20.
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) Whistleblower Policy (Policy on vigil mechanism)
The Company has adopted the whistleblower 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 Whistleblower Policyadopted by the Company during fiscal 2019.
ii) Policy for Determining Materiality for 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 on Document Retention
The policy deals with the retention and preservation of corporate records of the Company.
Share transfer agency
The Company has appointed M/s.R&D Infotech Pvt. Ltd. 1st Floor 7ABeltala Road Naresh Mitra Sarani Kolkata - 700 026 as its Share Transfer Agency forhandling both Physical 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 Statutory requirements of the Country.
The Company has been awarded WHO-GMP certification by the State Drug Licensingauthority.
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 theEmployees Banks and Financial Institutions Insurance Companies Central and StateGovernment Departments and the Shareholders for their support and cooperation extended tothe Company 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 |
|September 03 2020 ||DIN: 03137458 |