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Directors Report of Gennex Laboratories Ltd.

Mar 31, 2016

The Directors are pleased to present the 31st Annual Report and the Audited Financial Statements for the Financial Year ended 31st March, 2016.

1. Financial Results (Rs. in Lakhs)

31.03.2016

31.03.2015

Total Revenue

3877.03

3208.27

Profit before finance

cost, depreciation

and tax expense

441.10

220.95

Finance cost

50.38

47.63

Profit before

depreciation and

tax expense

390.72

173.32

Depreciation

83.60

88.60

Profit before

tax expense

303.34

84.71

Tax expense

69.64

19.30

Net Profit for the year

233.69

65.41

Profit brought forward

from earlier year

574.31

508.90

Profit available for

appropriation

808.00

574.31

State of the Company’s Affairs

Your Directors wish to present the details of Business operations done during the year under review: During the year under review your Company has recorded a total Revenue of Rs. 3877.03 lakhs as against Rs. 3208.27 lakhs in the previous year, and the Company has recorded the Profit before Finance Cost, Depreciation and Tax Expenses of Rs. 441.10 lakhs (2015-16) as against Rs.220.95 lakhs (2014-15). In the current year the Net profit is Rs.233.69 Lakhs against the previous year 65.41 lakhs. There is steep increase in the Turnover and Profit during the year under review and the all efforts are being made to make the Company to be reckoned with in the Pharma Arena and your Directors are hopeful that the Company would be making better performance with higher turnover and profits in the coming years too.

Future Outlook

The Management of the Company is making all its efforts for manufacturing additional APIs by enhancing the production capacities and increased R & D efforts for which the management is also exploring the possibilities of various options to raise the required funds. The Management of the Company is also making all its efforts in bringing the unit at Zaheerabad operational by July, 2017, wherein the Management is looking for establishing an US (FDA) Plant with approvals from EDQM and TGA (Therapeutic Goods Administration) for manufacturing High Value Low Volume and Low Volume High Value Active Pharmaceutical Ingredients (APIs). As soon as the unit becomes operational, the Management is confident of giving Gennex an International province. The management is exploring various options to raise the required funds to make the unit operational.

Share Capital:

Authorized Share Capital During the year under review, there was no change in authorized share capital of the Company. Authorized share capital of the company as on March 31, 2016 was Rs.16,00,00,000/-, comprising of 16,00,00,000 equity shares of Rs.1.00 each.

Paid-up Share Capital

During the year under review, there was no change in paid up share capital of the Company. Paid up share capital of the company as on March 31, 2016 was Rs. 12,65,03,000/-, comprising of 12,65,03,000 equity shares of Rs.1.00 each Buy Back of Securities

The Company has not bought back any of its securities during the year under review. Sweat Equity

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

Bonus Shares

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.

Dividend

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

Transfers to Reserves

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

Fixed Deposits

During the year under review, your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made there under Subsidiaries and associates As on March 31, 2016, we have one associate and in this regard a statement containing the salient features of the financial statement of our Associates in the 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 in the Ordinary course of Business and are at Arm''s Length pricing basis. The Audit Committee granted approvals for the transactions and the same were reviewed by the Committee and the Board of Directors. There were no materially significant transactions with Related Parties during the financial year 2015-16 which were in conflict with the interest of the Company. The details of contracts and arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 were given as Annexure -II to the Board''s Report in form No: 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 and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”),the Company neither has, directly or indirectly, given any loan to its Directors nor extended any guarantee or provided any security in connection with any loan taken by them. Further, the Company has neither given any inter-corporate loan / advance nor made any investments in other companies during the financial year 2015-16. Number of Board Meetings held During the year ended March 31, 2016, five Board Meetings were held.

The dates on which the Board meetings were held are 30.05.2015, 14.08.2015, 14.11.2015, 22.01.2016 and 13.02.2016, the details of which are given in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and Secretarial Standard-1.

The conservation of energy, technology absorption, foreign exchange earnings 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, technology absorption, foreign exchange 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 this Report.

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

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are 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 the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and 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 required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence 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 Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry.

Independent Directors'' Meeting The Independent Directors met on 13.02.2016, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Director and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement, the Board of Directors of the Company hereby confirms:

i. that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii. that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of Profit and Loss Account of the Company for that period;

iii. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 ended March 31, 2016 on a going concern basis;

v. that the Directors have laid down Internal Financial Controls to be followed by the company and that such Internal Financial Controls are adequate and were operating effectively; and

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

Corporate Governance

The Company is committed to good corporate governance in line with the Listing Agreement (upto 30th November, 2015) and Schedule V of Listing Regulations (with effect from 1st December, 2015) and Provisions, Rules and Regulations of the Companies Act, 2013. The Company is in compliance with the provisions on corporate governance specified in the Listing Agreement with BSE. A certificate of compliance from M/s. Laxminiwas & Jain, practicing Chartered Accountants and the report on Corporate Governance form part of this Directors’ Report.

Management Discussion and Analysis In terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis given below discusses the key issues concerning the business and carried on by the Company and the same is enclosed as Annexure - VI to this Report.

Corporate Social Responsibility (CSR) Initiatives:

Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company ie. (a) networth of the Company to be Rs.500 crore or more; or (b) turnover of the company to be Rs. 1,000 crore or more; or (c) net profit of the company to be Rs. 5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of section 135 are not applicable to the Company.

Details of Directors or Key Managerial Personnel who were appointed or have resigned during the Year In terms of Section 152 of the Companies Act, 2013, Mr. Tiruvarur Muralidharan Gopalakrishnan, Whole Time Director would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr. Tiruvarur Muralidharan Gopalakrishnan has offered himself for re-appointment.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act 2013.

There was no other appointment or cessation of appointment of key managerial personnel during the Financial Year.

Statutory Auditors

At the Annual General Meeting held on September 30th, 2014, Laxminiwas & Jain, Chartered Accountants (Firm Registration No. 001859S), Hyderabad, were appointed as Statutory Auditors of the Company to hold office for a period of three years i.e., till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013 the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the said appointment of Laxminiwas & Jain, Chartered Accountants, Hyderabad, as Statutory Auditors of the Company is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Act. The Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Qualification by Statutory Auditor Information & Explanation in respect of Qualification / Reservation or Adverse remarks contained in Independent Auditor’s Report under Paras: Basis for Qualified opinion, Emphasis of Matter and Other Matters: Balance in Advances, Deposits, Unsecured loans, other Liabilities, Trade Receivables, Trade Payables and Advances against Suppliers are subject to confirmation by respective parties.

Board’s Response:

As pointed out by the Statutory Auditors, the company has not obtained confirmation of balances of Advances, Deposits, Unsecured Loans, other liabilities, Trade Receivables, Trade Payables and advance against Suppliers. The Company has made best of its efforts to obtain the same before 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 true and correct as per their knowledge.

Internal Auditors

The Board of Directors of the Company appointed Mr. Laxmipat Baid to conduct Internal Audit of the Company for the Financial Year ended 31st March, 2016.

Audit Committee

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

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

A mechanism has been established for employees to report concerns about unethical 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 avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.

Secretarial Audit Report

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has appointed M/s. BSS & Associates, Company Secretaries, as Secretarial Auditors to conduct Secretarial Audit of the company for the Financial Year ended on March 31, 2016. Secretarial Audit Report issued by Mr. S. Srikanth, Partner of M/s BSS & Associates, Company Secretaries, in Form MR-3 is enclosed as Annexure - VII to this Annual Report.

The following qualification was observed by the Secretarial Auditor in his Report to which the Board has shared the following explanations:

Qualification: The Company has not appointed Company Secretary as required under the Provisions of section 203 of the Companies Act, 2013 and Regulation 6 of the Listing Regulation entered with Stock Exchange(s), and other disclosures with Stock exchange.

Response: The Company is in the process to appoint a suitable person as Company Secretary of the company to comply with the provisions under section 203 of the Companies Act, 2013. There was delay in disclosures with Stock Exchange due to inadvertence. Insurance All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured. Details in respect of adequacy of Internal Financial Controls with reference to the Financial Statements

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

2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flows of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and

3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Fixed Assets Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The names of companies which have become or ceased to be company’s subsidiaries, 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 regulators or courts or tribunals impacting the going concern status and company’s operations in future.

No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Industrial Relations

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 Company from the Financial Year Ended 31st March, 2016 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 Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the Financial Year ended 31st March, 2016, the Company has not received any Complaints pertaining to Sexual Harassment. Listing of Equity Shares

The Company’s Equity shares are listed at the following Stock Exchanges:

i.BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai - 400 001; and The Company has paid the Annual Listing Fee to the said Stock Exchanges for the Financial Year 2016-17.

Listing Agreement

The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective 1st December, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited during February, 2016.

Policies

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

i. Whistleblower Policy (Policy on vigil mechanism)

The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company’s code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during fiscal 2016.

ii. Policy for Determining Materiality for Disclosures

This policy applies to disclosures of material events affecting. This policy is in addition to the Company’s corporate policy statement on investor relations, which deals with 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, 7A, Beltala Road Naresh Mitra Sarani Kolkata - 700 026 as its Share Transfer Agency for handling both Physical and Electronic Transfers.

Awards and recognition

The Company has not received any Award during the Financial Year.

Human Resources

Your Company treats its “human resources” as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

Cautionary Statement

Statements in these reports describing company’s projections, statements, 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 sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the Shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere 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 29, 2016 DIN: 03137458


Mar 31, 2015

Dear Members,

The Directors are pleased to present the 30th Annual Report and the Audited Financial Statements for the Financial Year ended 31st March, 2015.

1. Financial Results (Rs. in Lakhs)

31.03.2015 31.03.2014

Total Revenue 3208.27 3520.10

Profit before finance cost, depreciation and tax expense 220.95 183.82

Finance cost 47.63 32.03

Profit before depreciation and tax expense 173.32 151.79

Depreciation 88.61 81.99

Profit before tax expense 84.71 69.80

Tax expense 19.30 49.18

Net Profit for the year 65.41 20.62

Profit brought forward from earlier year 508.90 488.28

Profit available for appropriation 574.31 508.90

Surplus in Statement of Profit and Loss 65.41 20.62

State of the Company's Affairs

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

During the year under review your Company has recorded total revenue of Rs. 3208.27 lakhs as against Rs.3520.10 lakhs in the previous year, and the company has recorded the Profit before finance cost, depreciation and tax expenses Rs. 220.95 lakhs (2014-15) as against Rs. 183.82 lakhs (2013-14).

In the current year the Net profit is Rs. 65.41 Lakhs against the previous year Rs. 20.62 lakhs.

Your Directors are hopeful of better performance with increased revenue in the next year.

Listing of Equity Shares

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

i. BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai - 400 001; and The Company has paid the Annual Listing Fee to the said Stock Exchanges for the Financial Year 2014-15.

Performance and financial position of each of the subsidiaries, associates and joint venture

Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies of the Company is prepared and same is enclosed as Annexure -1 to this Report.

Number of Meetings of the Board of Directors

During the year ended March 31, 2015, five Board Meetings were held.

The dates on which the Board meetings were held are 30.05.2014, 14.08.2014, 01.10.2014, 15.11.2014 and 14.02.2015.

Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms:

i. that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii. that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of Profit and Loss Account of the Company for that period;

iii. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 ended March 31, 2015 on a going concern basis;

v. that the Directors have laid down Internal Financial Controls to be followed by the company and that such Internal Financial Controls are adequate and were operating effectively; and

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

Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149

The Independent Directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6). Nomination and Remuneration Committee The Nomination and Remuneration Committee consists of the following Directors namely Mr. Y Ravinder Reddy, Chairman, Ms. Sadhana Bhansali, Mr. Dipankar Dasgupta.

P Brief description of terms of reference:

* identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;

* carry on the evaluation of every Director's performance;

* formulation of the criteria for determining qualifications, positive attributes and independence of a Director;

* recommend to the Board a policy relating to the remuneration of the Directors, key managerial personnel and other employees;

* formulation of criteria for evaluation of Independent Directors and the Board;

* devising a policy on Board diversity; and

* any other matter as the Board may decide from time to time.

P Nomination and Remuneration policy The objectives of the Policy

1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2. To determine remuneration based on the Company's size and financial position and trends and practices on remuneration prevailing in peer companies.

3. To carry out evaluation of the performance of Directors.

4. To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company's operations.

5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

Particulars of Loans, Guarantees or Investments under Section 186

The company has not given any Loans, Guarantees, and made Investments during the Financial Year ended on March 31, 2015 in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Particulars of Contracts or Arrangements with Related Parties Referred to in Sub-Section (1) of Section 188

During the year under review there are no contracts / arrangements / transactions entered by the Company during the financial year with related parties and do not attract the provisions of Section 188 of the Companies Act, 2013.

Transfer of Amount to Reserves

The Company doesn't propose to transfer any amount to the general reserve for the Financial Year ended 31st March, 2015.

Dividend

The Board of Directors of the Company could not recommend Dividend for the financial year ended March 31, 2015.

Extracts of Annual Return The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - 4 to this Report.

The conservation of energy, technology absorption, foreign exchange earnings 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, technology absorption, foreign exchange 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 - 5 to this Report.

Risk Management Committee Philosophy

The Board has constituted Risk Management Committee to formulate a Risk Management Policy for dealing with different kinds of risks attributable to the operations of the Company outlining different kinds of risks and risk mitigating measures to be adopted. The Board shall be responsible for framing, implementing and monitoring the risk management plan of the Company.

The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate Internal Control Systems and procedures to combat the risk. The Risk management procedure will be reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.

Mechanism for Evaluation of Board Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

A. Criteria for evaluation of Board of Directors as a whole

i. The frequency of meetings;

ii. The length of meetings;

iii. The administration of meeting;

iv. The number of committees and their roles;

v. The flow of information to and between Board members;

vi. The quality and quantity of information; and

vii. The Disclosure of Information to the stakeholders.

B. Criteria for evaluation of the Individual Directors

i. Ability to contribute and monitor Corporate Governance practices;

ii. Ability to contribute by introducing best practices to address top management issues;

iii. Participation in long term strategic planning;

iv. Commitment to the fulfillment of Director obligations and fiduciary responsibilities;

v. Guiding strategy;

vi. Monitoring management performance and development;

vii. Statutory compliance & Corporate Governance;

viii. Attendance and contribution at Board / Committee meetings;

ix. Time spent by each of the member; and

x. Core competencies.

Directors

Mr. ARIHANT BAID was appointed as the Managing Director of the Company for a period of three (3) years with effect from 18.05.2012 on the terms and conditions and remuneration as approved by the Members at the Annual General Meeting held on 30th September 2012. As such, the present term of office of Mr. ARIHANT BAID shall expire on 17.05.2015. Mr. ARIHANT BAID has been associated with the Company since 2012 and currently holds overall responsibility for the working of the Company. Keeping in view the contribution made by Mr. ARIHANT BAID for the growth of the Company, the Board of Directors of the Company and the Remuneration Committee have recommended the reappointment of Mr. ARIHANT BAID for a period of three (3) years effective from 18th May 2015.

Mr. T.M Gopalakrishnan was appointed as the Whole Time Director of the Company for a period of three (3) years with effect from 18.05.2012 on the terms and conditions and remuneration as approved by the Members at the Annual General Meeting held on 30th September 2012. As such, the present term of office of Mr. T.M. Gopalakrishnan shall expire on 17.05.2015. Mr. T.M Gopalakrishnan has been associated with the Company since 2012. Keeping in view the contribution made by Mr. T.M. Gopalakrishnan for the growth of the Company, the Board of Directors of the Company and the Remuneration Committee have recommended the reappointment of Mr. T.M. Gopalakrishnan for a period of three (3) years effective from 18th May 2015.

Mr. DIPANKAR DASGUPTA was appointed as Additional Director of the Company by the Board at its meeting held on October 1, 2014. The Company has received a notice in writing from a Member, along with the requisite deposit of money, proposing his candidature for the office of Director of the Company under Section 160 of the Companies Act, 2013. The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Mr. DIPANKAR DASGUPTA as an Independent Director

Details of Directors or Key Managerial Personnel who were Appointed or have resigned during the Year

The shareholders of the Company have re- appointed Mr. Y. RAVINDER REDDY and appointed Ms. SADHANA BHANSALI as Independent Directors of the Company for a period of 5 years with effect from September 30, 2014.

The Board of Directors has appointed Mr. DIPANKAR DASGUPTA as Additional Director on 01.10.2014

Mr. Laxmipat Baid has been designated as Chief Financial Officer of the Company pursuant to provisions of Section 203 of the Companies Act, 2013.

Deposits

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.

Statutory Auditors

At the Annual General Meeting held on September 30th, 2014, Laxminiwas & Jain, Chartered Accountants (Firm Registration No. 001859S), Hyderabad, were appointed as Statutory Auditors of the Company to hold office for a period of three years i.e., till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the said appointment of Laxminiwas & Jain, Chartered Accountants, Hyderabad, as Statutory Auditors of the Company is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Act. The Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Qualification by Statutory Auditor

Information & Explanation in respect of Qualification / Reservation or Adverse remarks contained in Independent Auditor's Report under Paras: Basis for Qualified opinion, Emphasis of Matter and Other Matters: Balance in Advances, Deposits, Unsecured loans, other Liabilities, Trade Receivables, Trade Payables and Advances against Suppliers are subject to confirmation by respective parties.

Board's Response:

As pointed out by the Statutory Auditors, the company has not obtained confirmation of balances of Advances, Deposits, Unsecured Loans, other liabilities, Trade Receivables, Trade Payables and advance against Suppliers. The Company has made best of its efforts to obtain the same before 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 true and correct as per their knowledge Internal Auditors

The Board of Directors of the Company has appointed Mr. Laxmipat Baid to conduct Internal Audit of the Company for the Financial Year ended 31st March, 2015.

Audit Committee

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

A separate report on Corporate Governance and Management Discussion and Analysis is annexed as part of the Annual Report along with the Auditor's Certificate on its compliance.

Vigil Mechanism

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

A mechanism has been established for employees to report concerns about unethical 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 avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.

Secretarial Audit Report

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed M/s. BSS & Associates, Company Secretaries, as Secretarial Auditors to conduct Secretarial Audit of the company for the Financial Year ended on March 31, 2015.

Secretarial Audit Report issued by Mr. S. Srikanth, Partner of M/s BSS & Associates, Company Secretaries, in Form MR-3 is enclosed as Annexure - 3 to this Annual Report. The following qualification was observed by the Secretarial Auditor in his Report to which the Board has shared the following explanations:

Qualification: The Company has not appointed Company Secretary as required under the Provisions of section 203 of the Companies Act, 2013 and Clause 47(a) of the Listing Agreement entered with Stock Exchange(s).

Response: The company is in the process to appoint a suitable person as Company Secretary of the company to comply the provisions under section 203 of the Companies Act, 2013.

Statement of particulars of appointment and remuneration of managerial personnel

The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 2 to this Annual Report.

Insurance

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

Details in respect of adequacy of Internal Financial Controls with reference to the Financial Statements

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

2. The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flow of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations; and

3. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Fixed Assets Policy, Whistle Blower Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The names of companies which have become or ceased to be company's subsidiaries, 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 regulators or courts or tribunals impacting the going concern status and company's operations in future

No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

Material changes and commitments

There are no Material changes and commitments in the business operations of the Company from the Financial Year Ended 31st March, 2015 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 Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the Financial Year ended 31st March, 2015, the Company has not received any Complaints pertaining to Sexual Harassment.

Acknowledgement

The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the Shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere 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 Whole Time Director DIN: 03137458

Place: Hyderabad Date: August 14, 2015


Mar 31, 2014

Dear Members,

The Directors are pleased to present the Twenty Ninth Annual Report and the Audited Accounts for the year ended 31st March, 2014.

1. Financial Results (Rs. in Lakhs) Year ended Year ended 31.03.2014 31.03.2013 Profit before Finance charges and Depreciation 183.70 156.77

Finance Charges 32.03 28.15

Depreciation 81.99 79.62

Exceptional Items (0.12) 1.69

Provision for Tax:

- Current (31.00) (23.00)

- Deferred (8.39) 15.26

- Tax for earlier years (9.79) —

Profit after Tax 20.62 39.57 Surplus Brought

forward 488.28 448.71 Surplus carried

forward 508.90 488.28

2. Performance & Prospects: During the year under review, the Company has successfully achieved the maximum production capacity. There is huge demand of the products being manufactured by the Company in the Overseas and Domestic markets. Keeping in view the demand of its products, the Company is in the process of developing new products and research of the said products is being done in R & D Lab of the Company. This year the turnover of the company has increased considerably and the company expects that with the increasing demand for its products in the Overseas and Domestic markets the turnover of the company would amplify in the coming years.

The Company has successfully completed an ISO Audit and obtained ISO-14001 & OHSAS-18000 Certification.

The Company could achieve a gross profit of Rs.183.70 Lacs in the year 2013-14 as

against Rs.156.77 Lacs during the previous year 2012-13. Thus, there is increase in the gross profit in the current year. Due to fluctuation in the dollar rate there was increase in the cost of basic Raw Materials resulting in decrease in the net profit of the Company. Keeping in view the market demands, the Company is in the process of developing new high value drugs by researching in its R & D Lab and the Company is confident that the turnover and profits in the coming years would increase manifold.

3. Dividend: During the financial year 2013- 14 your Board of Directors could not recommend any dividend due to absence of distributable profit.

4. Directors: Shri T.M. Gopala Krishnan, Director, retires by rotation and being eligible, offers himself for re-appointment.

5. Corporate Governance: Your Company has complied with the mandatory provisions relating to Corporate Governance as prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report detailing such compliance together with the Certificate obtained from the Statutory Auditors in connection therewith is included as part of the Annual Report.

6. Directors'' Responsibility: Pursuant to Section 217(2A) of the Companies Act, 1956 the Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the company for the said period;

iii. Proper and sufficient care has been

taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going concern basis.

7. Sub-committees of the Board: The Board has Audit Committee, Remuneration Committee, Investment Committee and Investors'' Grievances Committee, the composition and details of which have been given in the Report on the Corporate Governance forming part of the Annual Report

8. Auditors: M/s. Laxminiwas & Jain, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

9. Cost Auditors: Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit for the Company. Based on recommendations of the Audit Committee and with the approval of the Central Government, M/s N.S.V. KRISHNA RAO & Co., Cost Accountants was appointed as Cost Auditor of the Company for the year 2014-2015

The cost audit report for the financial year 2013-2014 shall be submitted to the Central Government within the stipulated period.

10. Personnel: Employee relations at all levels were cordial during the year. Your Directors place on record their appreciation of the dedicated work put-in by the employees.

11. Public Deposits: Your Company has not accepted any Deposits from the public and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet

12. Compliance Certificate: A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49

of the Listing Agreement is attached to this Report along with a report on Corporate Governance

13. Management and Discussion Analysis Report:

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report is given in the Annexure, to form part of the Annual Report.

14. Internal Control System: Your Company has adequate internal control systems in all important areas of its operations and effectiveness of these systems is periodically reviewed for possible improvement in them

15. During the year under review there are no employees in the Company whose particulars are required to be given pursuant to Section 217(2A) of the Companies Act, 1956.

16. Acknowledgement: The Board of Directors are very thankful to the State Bank of Hyderabad and other Government Agencies for their continued help, guidance and assistance in the functioning of the Company.

17. Your Directors express their gratitude to the shareholders for the confidence reposed in the Company.

18. Information on Energy Conservation and Technology Absorption required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, forming part of the Directors'' Report for the year ended 31st March 2014, is enclosed as Annexure to this Report.

for and on behalf of the Board Arihant Baid Managing Director

T.M. Gopala Krishnan Whole Time Director

Place: Hyderabad Date: 30th May, 2014


Mar 31, 2013

The Directors are pleased to present the Twenty Eighth Annual Report and the Audited Accounts for the year ended 31st March, 2013.

1. Financial Results

(Rs. in Lakhs)

Year ended Year ended 31.03.2013 31.03.2012

Profit before Finance charges and Depreciation 156.77 169.91

Finance Charges 28.15 29.95

Depreciation 79.62 74.33

Exceptional Items 1.69

Provision for Tax:

- Current (23.00) (27.00)

- Deferred 15.26 (1.11)

Profit after Tax 39.57 37.52

Surplus Brought forward 448.71 411.18

Surplus carried forward 488.28 448.71

2. Performance & Prospects: During the year under review, the Company has successfully achieved the maximum production capacity. Keeping in view the demand of its products in the overseas and domestic markets, the Company has obtained approval from the State Licencing Authority for production of additional products after market survey. This year the turnover of the company has increased considerably and the company foresees that with the increasing demand for its products in the Overseas and Domestic markets the turnover of the company would be amplified in the coming years.

The Company is in the process of obtaining ISO-14001 & OHSAS-18000 Certification and expects that Gennex would be an ISO 14001 & OHSAS 18000 certified Company by 2013-14.

During the year under review the Company could achieve gross profit of Rs.156.77 Lacs as against Rs.169.91 Lacs during the previous year 2011-12. The decline in the gross profit is due to the reason that in the year under review industrial areas have been badly hit due to power crisis due to which the production cost have gone up as well the fuel charges. Apart from power crisis there is also increased in the prices of basic Raw Materials. Keeping in view the market demands, the Company is in the process of manufacturing new products, with additional products and enhancing the production capacities the Company is hopeful that the turnover and profits in the coming years would increase.

3. Dividend: During the financial year 2012- 13 your Board of Directors could not recommend any dividend due to absence of distributable profit.

4. Directors: Shri Y.Ravinder Reddy, Director, retires by rotation and being eligible, offers himself for re-appointment.

5. Corporate Governance:Your Company has complied with the mandatory provisions relating to Corporate Governance as prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report detailing such compliance together with the Certificate obtained from the Statutory Auditors in connection therewith is included as part of the Annual Report.

6. Directors'' Responsibility: Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates'' that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the company for the said period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv The Annual Accounts have been prepared on a going concern basis.

7. Sub-committees of the Board: The Board has Audit Committee, Remuneration Committee, Investment Committee and Investors'' Grievances Committee, the composition and details of which have been given in the Report on the Corporate Governance forming part of the Annual Report

8. Auditors: M/s. Laxminiwas & Jain, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

9. Cost Auditor: Cost Auditors. Pursuant to Section 233B of the Companies Act,1956, the Centra] Government has prescribed Cost Audit for the Company. Based on recommendations of the Audit Committee and subject to the approval of the Central Government, M/s N.S.V. KRISHNA RAO & Co., Cost Accountants was appointed as Cost Auditor of the Company for the year 2013- 2014. The cost audit report for the financial year 2012-2013 shall be submitted to the Central Government within the stipulated period.

10. Personnel: Employee relations at all levels were cordial during the year. Your Directors place on record their appreciation of the dedicated work put-in by the employees.

11. Public Deposits: Your Company has not accepted any Deposits from the public and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

12. Compliance Certificate: A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report along with a report on Corporate Governance.

13. Management and Discussion Analysis Report: In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report is given in the Annexure, to form part of the Annual Report.

14. Internal Control System: Your Company has adequate internal control systems in all important areas of its operations and effectiveness of these systems is periodically reviewed for possible improvement in them.

15. During the year under review there are no employees in the Company whose particulars are required to be given pursuant to Section 217(2AA) of the Companies Act, 1956.

16. Acknowledgement: The Board of Directors are very thankful to the State Bank of Hyderabad and other Government Agencies for their continued help, guidance and assistance in the functioning of the Company.

17. Your Directors express their gratitude to the shareholders for the confidence reposed in the Company.

18. Information on Energy Conservation and Technology Absorption required to be disclosed under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, forming part of the Directors'' Report for the year ended 31st March 2013, is enclosed as Annexure to this Report.

for and on behalf of the Board

Arihant Baid

Managing Director

Y. Ravinder Reddy

Director

Place: Hyderabad

Date: 30th May, 2013


Mar 31, 2010

The Directors are pleased to present the Twenty Fifth Annual Report and the Audited Accounts for the year ended 31st March, 2010.

1. Financial Results (Rs. in Lakhs)

Year ended Year ended 31.03.2010 31.03.2009

Profit before Finance charges and Depreciation 138.78 142.43

Finance Charges 23.11 28.83

Depreciation 69.01 67.38

Prior Period Adjustment (106.46) -

Provision for Tax:

- Current (21.00) (20.60)

- Deferred 10.79 5.35

- Fringe Benefit Tax - 1.00

Profit after Tax (70.01) 29.97

Adjustment for Tax - 0.04 of earlier year

Surplus Brought forward 440.44 410.51

Surplus carried forward 370.43 440.44

2. Performance & Prospects:

During the year under review, the Company has successfully achieved the maximum production capacity. Due to effect of swing- flu the demand of our products in the market has increased and the company is making all its efforts to take advantage of the market situation by achieving the maximum production and sales turnover. The Company foresees that the demand of its products would further increase in the domestic and international market in the coming year.

The Company is in the process for obtaining Certificate of ISO-14001 and OSHAS- 18000ISO OHAS.

During the year under review the Company could achieve net profit of Rs.138.78 Lacs as against Rs.142.43 Lacs during the previous year 2008-09. Due to the increase in the basic Raw Materials prices there is slender decrease in the net profit of the Company in the current year.

3. Share Warrants: The Company has issued 25 lacs Equity Share Warrants @ Rs.29/- each at a premium of Rs.19/- each on Preferential basis on 2nd February, 2008, with a option of its subsequent conversion into same number of Equity Shares. But, the upfront money received on issuance of Equity Share Warrants has been forfeited due to non-exercise of the said option by the warrant holders.

4. Dividend: During the financial year 2009- 10 your Board of Directors could not recommend any dividend due to absence of distributable profit.

5. Directors: Shri Y Ravinder Reddy, Director, retires by rotation and being eligible, offers himself for re-appointment.

6. Directors Responsibility: Pursuant to Section 217(2AA) of the Companies Act, 2000 the Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the loss of the company for the said period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going concern basis.

7. Auditors: M/s. Laxminiwas & Jain, Auditors, Firm Regn. No. 001859S, of the Company, retire at the ensuing Annual General Meeting and are eligible for re- appointment.

8. Personnel: Employee relations at all levels were cordial during the year. Your Directors place on record their appreciation of the dedicated work put-in by the employees.

9. During the year under review there are no employees in the Company whose particulars are required to be given pursuant to Section 217 (2A) of the Companies Act, 1956.

10. Acknowledgement: The Board of Directors are very thankful to the State Bank of Hyderabad and other Government Agencies for their continued help, guidance and assistance in the functioning of the Company.

11. Your Directors express their gratitude to the shareholders for the confidence reposed in the Company.

12.Information on Energy Conservation and Technology Absorption required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, forming part of the Directors Report for the year ended 31st March 2010, is enclosed as Annexure to this Report.

for and on behalf of the Board

Place:Hyderabad Vinod Baid

Date :1st September, 2010 Chairman


Mar 31, 2009

The Directors are pleased to present the Twenty Fourth Annual Report and the Audited Accounts for the year ended 31st March, 2009.

1. Financial Results (Rs. in Lakhs) Year ended Year ended 31.03.2009 31.03.2008

Profit before Finance charges and Depreciation 142.43 203.56

Finance Charges 28.83 18.05

Depreciation 67.38 78.47

Prior Period Adjustment - -

Provision for Tax:

- Current 20.60 42.00

- Deferred (5.35) (3.98)

- Fringe Benefit Tax 1.00 0.96

Profit after Tax 29.97 68.06

Adjustment for Tax 0.04 (7.38) of earlier year Surplus Brought forward 410.51 335.07

Surplus carried forward 440.44 410.51



2. Performance & Prospects:

During the year under review, the Company has successfully achieved the maximum production capacity and keeping in view the demand for its products in domestic and international markets shall be increasing its production capacity in the coming years.

During the year under review the Company could achieve net profit of Rs.142.43 lacs as against Rs.203.56 Lacs during the previous year 2007-08. Due to global recession and safeguarding the interest of customers, during the year under review the finished products were sold at a very competitive price, hence there is decrease in the net profit of the Company in the current year.

3. Dividend: During the financial year 2008- 09 your Board of Directors could not recommend any dividend due to absence of distributable profit.

4. Directors: Shri Vinod Baid, Director, retires by rotation and being eligible, offers himself for re-appointment.

5. Directors Responsibility: Pursuant to Section 217(2AA) of the Companies Act, 2000 the Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2009 and of the loss of the company for the said period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going concern basis.

6. Auditors: M/s. Laxminiwas & Jain, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

7. Personnel: Employee relations at all levels were cordial during the year. Your Directors place on record their appreciation of the dedicated work put-in by the employees.

8. During the year under review there are no employees in the Company whose particulars are required to be given pursuant to Section 217(2A) of the Companies Act, 1956.

9. Acknowledgement: The Board of Directors are very thankful to the State Bank of Hyderabad and other Government Agencies for their continued help, guidance and assistance in the functioning of the Company.

10. Your Directors express their gratitude to the shareholders for the confidence reposed in the Company.

11. Information on Energy Conservation and Technology Absorption required to be disclosed under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, forming part of the Directors Report for the year ended 31s March 2009, is enclosed as Annexure to this Report.

for and on behalf of the Board

PlacerHyderabad Vinod Baid

Date : 4th September, 2009 Chairman

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