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Gennex Laboratories Ltd.

BSE: 531739 Sector: Health care
NSE: N.A. ISIN Code: INE509C01026
BSE 00:00 | 26 Sep 6.55 -0.25
(-3.68%)
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6.90

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6.90

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NSE 05:30 | 01 Jan Gennex Laboratories Ltd
OPEN 6.90
PREVIOUS CLOSE 6.80
VOLUME 204911
52-Week high 12.26
52-Week low 5.75
P/E 22.59
Mkt Cap.(Rs cr) 83
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.90
CLOSE 6.80
VOLUME 204911
52-Week high 12.26
52-Week low 5.75
P/E 22.59
Mkt Cap.(Rs cr) 83
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gennex Laboratories Ltd. (GENNEXLAB) - Director Report

Company director report

To

The Members of

Gennex Laboratories Limited.

Your Directors are pleased to present the 36th Annual Reportand the Standalone and Consolidated Audited Financial Statements for the Financial Yearended March 31 2021.

Financial Highlights and Performance:

1. Financial Results

Rs. in Lakhs

PARTICULARS Standalone Consolidated
March 31 2021 March 31 2020 March 31 2021 March 31 2020
Revenue from Operations 5964.90 5561.73 5964.90 5561.73
Other Income 52.44 95.14 52.44 95.14
Total Income 6017.34 5656.87 6017.34 5656.87
Share of Profit/(Loss) of Associates 0 0 0 0
Profit before Finance Cost Depreciation and Tax Expense 668.64 430.72 668.64 430.72
Finance Cost 74.35 75.36 74.35 75.36
Depreciation 88.07 100.5 88.07 100.5
Tax Expenses 102.40 69.23 102.40 69.23
Net Profit after Tax for the year 403.82 185.63 403.82 185.63
Other Compressive Income /(Loss) (net of tax) 0 0 0 0
Total Comprehensive Income 403.82 185.63 403.82 185.63

Review of operations:

Your Directors wish to present the details of Business operations doneduring the year under review:

During the year under review your Company has recorded a total Revenueof Rs. 6017.34 lakhs as against Rs.5656.87 lakhs in the previous year and the companyhas recorded the Profit before Finance Cost Depreciation and Tax Expenses of Rs.668.64lakhs (2020-21) as against Rs. 430.72 lakhs (2019-20). In the current year the Net profitis Rs.403.82 Lakhs against the previous year Rs. 185.63 lakhs.

There is a 117% increment in the Profit during the year under reviewand the all efforts are being made to make the Company to be reckoned with in the PharmaArena and your Directors are hopeful of the our Company would be making betterperformances with profits in the coming years.

Future Outlook

The Management of the Company is making all its efforts for addingadditional APIs for manufacturing by enhancing the production capacities and increased R& D efforts for which the Management is also exploring the possibilities of variousoptions to raise the required funds.

Kothur Unit: The Management of the Company is making all itsefforts to clear all liabilities and fund the unit at Kothur near Zaheerabad by bringingback to its full 100% operational capacity. The Management and Technical team are keepingtheir full efforts to run the plant due to COVID-19 Pandemic all strategic plans of theCompany got delayed. Management is hopeful to start its operations by the end of year2022.

The Management is looking for establishing an US (FDA) approved Plantwith also approvals from EDQM and TGA for manufacturing High Value Low Volume and LowVolume High Value Active Pharmaceutical Ingredients (APIs) at Kothur near Zaheerabad andas soon as the 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.

Share Capital:

Authorized Share Capital - During the year under review there was nochange in authorized share capital of the Company. Authorized share capital of the companyas on March 31 2021 was Rs.160000000/- comprising of160000000 equity shares ofRs.1/- each.

Paid-up Share Capital - During the year under review there was nochange in paid up share capital of the Company. Paid up share capital of the company as onMarch 31 2021 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 yearunder review.

Sweat Equity:

The Company has not issued any Sweat Equity Shares during the yearunder review.

Bonus Shares:

The Company has not issued any bonus shares during the year underreview.

Employees Stock Option:

The Company has not provided any Stock Option Scheme to the employees.

Dividend:

Your Directors have not recommended any dividend on Equity Shares forthe year under review.

Transfers to Reserves:

Your Board of Directors does not appropriate any amount to betransferred to General Reserves during the year under review.

Deposits:

During the year under review your Company has not accepted any fixeddeposits within the meaning of Section 73 of the Companies Act 2013 read with Rules madethere under.

Subsidiaries Joint Ventures and Associates:

As on March 31 2021 we have one Associate and in this regard aStatement containing the salient features of the Financial Statement of our Associates inthe prescribed format AOC-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 inthe Ordinary course of Business and are at Arm's Length pricing basis. The Audit Committeegranted approvals for the transactions and the same were reviewed by the Committee and theBoard of Directors.

There were no materially significant transactions with Related Partiesduring the financial year 2020-21 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 were given as Annexure - II to the Board's Report inform 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 theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") the Company neither has directly orindirectly given any loan to its Directors nor extended any guarantee or provided anysecurity in connection with any loan taken by them. Further the Company has not made anyinter-corporate loan / advance nor made any investments in other companies during thefinancial year 2020-21 except to its associate Company.

Number of Board Meetings held:

During the financial year ended March 31 2021 Eight Board Meetingswere held.

The dates on which the Board Meetings were held are 27.04.202001.07.2020 30.07.2020 03.09.2020 15.09.2020 12.11.2020 21.12.2020 and 13.02.2021 thedetails of which are given in the Corporate Governance Report. The maximum intervalbetween any two meetings did not exceed 120 days as prescribed in the Companies Act 2013and Secretarial Standard -1.

Board evaluation:

The Board of directors have carried out an evaluation of its ownperformance and of its Committee as well as its individual Directors on the basis ofcriteria such as Composition of the Board / Committee Structure effectiveness itsprocess information and functioning etc.

The conservation of energy technology absorption foreign exchangeearnings and outgo pursuant to provisions of Section 134(3)(m) of the Companies Act 2013(Act) read with the Companies (Accounts) Rules 2014:

Information with respect to conservation of energy technologyabsorption foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Actread with Companies (Accounts) Rules 2014 is prepared and the same is enclosed as Annexure- III to this Report.

Remuneration ratio of the Directors / Key Managerial Personnel (KMP) /Employees:

The information required under Section 197 of the Companies Act 2013read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are provided in separate annexure forming part of this Report asAnnexure - IV.

Extracts of Annual Return:

As required by Section 92 (3) of the Act Read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 extract of the Annual Return inForm MGT 9 is available on the Company's website at www.gennexlab.com.

Declaration by Independent Directors:

The Independent Directors of the Company have submitted theirdeclarations as required under Section 149(7) of the Companies Act 2013 stating that theymeet the criteria of independence as per sub-section (6) of Section 149 of the Act.

Familiarization programmer for Independent Directors:

The Company proactively keeps its Directors informed of the activitiesof the Company it's Management and Operations and provides an overall industryperspective as well as issues being faced by the industry.

Independent Directors' Meeting:

The Independent Directors met on 21.12.2020 without the attendance ofNon-Independent Directors and Members of the Management. The Independent Directorsreviewed the performance of Non-Independent Directors and the Board as a whole; theperformance of the Chairman of the Company taking into account the views of ExecutiveDirector and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.

Directors Responsibility Statement as required under Section 134 of theCompanies Act 2013:

Pursuant to the requirement under Section 134 of the Companies Act2013 with respect to the Directors' Responsibility Statement the Board of Directors ofthe Company hereby confirms:

i. that in the preparation of the Annual Accounts the applicableaccounting standards have been followed;

ii. that the Directors have selected such Accounting Policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at March 312021 and of Profit and Loss Account of the Company for that period;

iii. that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. that the Directors have prepared the Annual Accounts for theFinancial Year ended March 31 2021 on a going concern basis;

v. that the Directors have laid down Internal Financial Controls to befollowed by the company and that such Internal Financial Controls are adequate and wereoperating effectively; and

vi. that the Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

Details of Directors or Key Managerial Personnel who were appointed orhave resigned during the Year:

In terms of Section 152 of the Companies Act 2013 Shri T MGopalakrishnan Director would retire by rotation at the forthcoming AGM and is eligiblefor re-appointment. Shri T M Gopalakrishnan has offered himself for re-appointment.

Key Managerial Personnel (KMP):

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on March 31 2021 are: Shri Arihant Baid ManagingDirector Shri T M Gopala Krishnan Whole Time Director Shri Laxmipat Baid CFO and ShriRajesh Vankadara Company Secretary of the Company.

Policy on directors' appointment and remuneration and other details:

Under Section 178 (3) of the Companies Act 2013 the Nomination andRemuneration Committee of the Board has adopted a policy for nomination remuneration andother related matters for Directors and senior management personnel. A gist of the policyis available in the Corporate Governance Report.

Statutory Auditors:

M/s. PPKG & Co. Chartered Accountants (Firm RegistrationNo. 009655S) were appointed as Statutory Auditors of your Company to hold office from theconclusion of the 33rd AGM held in the year 2019 until the conclusion of the38th AGM to be held in the year 2023. Accordingly M/s.PPKG & Co.Chartered Accountants (Firm Registration No. 009655S) Statutory Auditors of the Companywill continue till the conclusion of Annual General Meeting to be held in 2023. In thisregard the Company has received a Certificate from the Auditors to the effect that theircontinuation as Statutory Auditors would be in accordance with the provisions of Section141 of the Companies Act 2013.

Auditors' Report and Secretarial Auditors' Report:

1. Auditors' Report

Qualifications Reservations or Adverse Remarks:

Information & Explanation in respect of Qualification / Reservationor Adverse remarks contained in Independent Auditor's Report under Paras: Basis forQualified opinion Emphasis of Matter and Other Matter:

The Balances of Current Assets Other Non-Current Assets Non-CurrentLiabilities Other Non-Current Liabilities Current Liabilities & other CurrentLiabilities are subject to confirmations/reconciliations. The Impact of the same isunascertained

Board's Response: - As pointed out by the Statutory Auditors thecompany has not obtained confirmation of The Balances of Current Assets Other Non-CurrentAssets Non-Current Liabilities Other Non-Current Liabilities Current Liabilities &other Current Liabilities. The Company has made best of its efforts to obtain the samebefore signing 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 theBoard of Directors has appointed Shri Rakesh Kumar Gupta Company Secretaries asSecretarial Auditors to conduct Secretarial Audit of the company for the Financial Yearended on March 31 2021.

Secretarial Audit Report issued by Shri Rakesh Kumar Gupta CompanySecretaries in Form MR-3 is enclosed as Annexure - V to this Annual Report.

Internal Auditors:

The Board of Directors of the Company appointed Shri Laxmipat Baid toconduct Internal Audit of the Company for the Financial Year ended March 31 2021.

Audit Committee:

There is no such incidence where Board has not accepted therecommendation of the Audit Committee during the year under review.

Sub Committees of the Board:

The Board has Audit Committee Nomination and Remuneration Committeeand Stakeholders' Relationship Committee. The composition and other details of theseCommittees have been given in the Report on the Corporate Governance forming part of theAnnual Report

Corporate Social Responsibility (CSR) Initiatives:

Section 135 of the Companies Act 2013 provides the threshold limit forapplicability of the CSR to a Company i.e. (a) net worth of the Company to be Rs.500crore or more; or (b) turnover of the company to be Rs. 1000 crore or more; or (c) netprofit of the company to be Rs. 5 crore or more. As the Company does not fall under any ofthe threshold limits given above the provisions of section 135 are not applicable to theCompany

Management Discussion and Analysis:

In terms of the provisions of Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Management Discussion and Analysis given below discusses the key issuesconcerning the business and carried on by the Company and the same is enclosed as Annexure- VI to this Report.

Corporate Governance:

The Company is committed to good corporate governance in line with theSchedule V of SEBI (LODR) Regulations 2015 and Provisions Rules and Regulations of theCompanies Act 2013. The Company is in compliance with the provisions on corporategovernance specified in the Listing Agreement with BSE. A certificate of compliance fromM/s. PPKG & Co. Chartered Accountants and the report on Corporate Governance formpart of this Directors' Report as Annexure - VII.

Insurance:

All properties and insurable interests of the Company includingbuilding plant and machinery and stocks have been fully insured.

Vigil Mechanism:

The Board of Directors have adopted Whistle Blower Policy. The WhistleBlower Policy aims for conducting the affairs in a fair and transparent manner by adoptinghighest standards of professionalism honesty integrity and ethical behavior. Allpermanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns aboutunethical behavior actual or suspected fraud or violation of Code of Conduct and Ethics.It also provides for adequate safeguards against the victimization of employees who availof the mechanism and allows direct access to the Chairperson of the Audit Committee inexceptional cases.

Details in respect of adequacy of Internal Financial Controls withreference to the Financial Statements:

1. The Company has set Internal Control Systems to maintain accurateand complete accounting records to safeguard its assets to prevent and detect any fraudsand errors.

2. The Company has appointed internal employee as the Internal Auditorsto observe the Internal Controls whether the work flows of organization is being donethrough the approved policies of the Company. In every Quarter during the approval ofFinancial Statements Internal Auditors will present the Internal Audit Report andManagement Comments on the Internal Audit observations; and

3. The Board of Directors of the Company have adopted various policieslike Related Party Transactions Policy Fixed Assets Policy Whistle Blower Policy Policyto determine Material Subsidiaries and such other procedures for ensuring the orderly andefficient conduct of its business for safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.

The names of companies which have become or ceased to be company'ssubsidiaries joint ventures 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 regulatorsor courts or tribunals impacting the going concern status and company's operations infuture:

No Significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and company's operations in future.

Industrial Relations:

Industrial relations continued to be cordial throughout the year underreview.

Material changes and commitments:

There are no Material changes and commitments in the businessoperations of the Company from the Financial Year ended March 31 2021 to the date ofsigning of the Directors' Report.

Policy on Sexual Harassment:

The Company has adopted policy on Prevention of Sexual Harassment ofWomen at Workplace in accordance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

During the Financial Year ended March 31 2021 the Company has notreceived any Complaints pertaining to Sexual Harassment.

Listing of Equity Shares:

The Company's Equity shares are listed at the following StockExchanges:

BSE Limited Phiroze JeeJeebhoy Towers Dalal Street Mumbai - 400 001;and

The Company has paid the Annual Listing Fee to the said Stock Exchangesfor the Financial Year 2020-21.

Policies:

We seek to promote and follow the highest level of ethical standards inall our business transactions guided by our value system. The SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 mandated the formulation of certainpolicies for all listed companies. The policies are reviewed periodically by the Board andupdated based on need and new compliance requirement.

i) Whistleblower Policy (Policy on vigil mechanism):

The Company has adopted the whistle blower mechanism for directors andemployees to report concerns about unethical behavior actual or suspected fraud orviolation of the Company's code of conduct and ethics. There has been no change to theWhistleblower Policy adopted by the Company during fiscal 2019.

ii) Policy for Determining Materiality for Disclosures:

This policy applies to disclosures of material events affecting. Thispolicy is in addition to the Company's corporate policy statement on investor relationswhich deals with the dissemination of unpublished price-sensitive information.

iii) Policy on Document Retention:

The policy deals with the retention and preservation of corporaterecords of the Company.

Share transfer agency:

The Company has appointed M/s. R & D Infotech Pvt. Ltd. 1stFloor 7A Beltala Road Naresh Mitra Sarani Kolkata - 700 026 as its Share Transfer Agencyfor handling both Physical and Electronic Transfers.

Awards and recognition:

The Company has been awarded DIN EN ISO 9001:2008 ISO 18001:2007 BSOHSAS 18001:2007 and ISO 9001:2015 Certification by TUV NORD Cert GmbH for ManagementSystem for manufacture and sale of Active Pharmaceutical Ingredients and intermediates.

The Company has been awarded European Union Written Confirmation(EU-WC) for Guaifenesin & Methocarbamol by the Central Drugs & Standard ControlOrganization (CDSCO) New Delhi for Sale Statutory requirements of the Country.

The Company has been awarded WHO-GMP certification by the State DrugLicensing authority.

Human Resources:

Your Company treats its "human resources" as one of its mostimportant assets. Your Company continuously invests in attraction retention anddevelopment of talent on an ongoing basis. A number of programs that provide focusedpeople attention are currently underway. Your Company thrust is on the promotion of talentinternally through job rotation and job enlargement.

Cautionary Statement:

Statements in these reports describing company's projectionsstatements expectations and hopes are forward looking. Though these expectations etc.;are based on reasonable assumption the actual results might differ.

Acknowledgement:

The Directors take this opportunity to place on record their sincerethanks to the Employees Banks and Financial Institutions Insurance Companies Centraland State Government Departments and the Shareholders for their support and co-operationextended to the Company from time to time. Directors are pleased to record theirappreciation of the sincere and dedicated services of the employees and workmen at alllevels.

On behalf of the Board of Directors
for Gennex Laboratories Limited
Place: Hyderabad T.M. Gopalakrishnan Arihant Baid
Date: 06.09.2021 Whole Time Director Managing Director
DIN: 03137458 DIN: 01171845

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