Genus Paper & Boards Ltd Directors Report.

Dear Shareholders

Your Directors have pleasure in presenting the 8th Annual Report and Audited Financial Statements on the Accounts of the Company for the financial year ended 31st March, 2019.

FINANCIAL HIGHLIGHTS

The highlights of financial statements of the company for the financial year 2018-19 are given below:

(Amount in Lakh)

Particulars

Current Year

Previous Year

31.03.2019

31.03.2018
Net Sales / Revenue from Operations 43143.73 35021.32
Other Income 221.13 83.71
Finance Cost 904.53 607.68
Depreciation 1303.25 1292.21
Profit Before Tax 1174.76 2254.94
Tax Expenses
-Current Tax 422.37 789.25
-Earlier Year Tax 37.44 -
-Deferred Tax -67.97 -28.29
Net Profit /(Loss) for the Year 782.93 1493.98
Other Comprehensive Income
Items that will not be reclassified to profit or loss -624.15 32.82
Total Comprehensive Income 158.78 1526.80
Earnings Per Share (FV Re. 1/- each)
-Basic (In Rs.) 0.30 0.58
-Diluted (In Rs.) 0.30 0.58

OPERATIONS AND BUSINESS PERFORMANCE

The Company’s Net Sales / Revenue from Operations during the year under review are Rs. 43143.73 lakh as compared to Rs. 35021.32 lakh in previous year. The Profit after Tax for the year is Rs. 782.93 lakh as compared to Rs. 1493.98 lakh in previous year.

RESERVES

During the Financial year 2018-19, the Company has proposed no amount to reserves.

DIVIDEND

To consolidate the future position of the Company and support the fund requirements to stimulate growth, your Board of Directors regret their inability to recommend any dividend for the year.

NATURE OF BUSINESS

The Company is engaged in the business of manufacturing of Kraft Paper. Since the Company has shut down its Steel Plant hence, the manufacturing of M.S. Ingot has been closed during the Financial Year 2018-19.

SUBSDIARIES

During the year under report, the Company has no subsidiary.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013, Mr. Ishwar Chand Agarwal (having DIN-00011152), Director of the Company will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment in accordance with the provisions of the said Act.

The Board has considered that the presence of Mr. Ishwar Chand Agarwal as Director on the Board would be immense benefit to the Company and has decided to recommend their appointment /reappointment for the approval of members of the Company at the ensuing general meeting of the company.

The Company in its meeting held on 25th June, 2019 had appointed Mr. Pradeep Narain Tandon as an Additional Director (Non Executive Independent Director) subject to the approval of the members of the Company in the ensuing Annual General Meeting. A brief resume of the Directors being appointed/ re-appointed, the nature of their expertise in specific functional areas, names of other companies in which they hold/have held Directorships, Commiee Memberships/ Chairmanships, their shareholding etc., are furnished in the explanatory statement to the notice of the ensuing AGM.

DECLARATION FROM INDEPENDENT DIRECTORS

As provided under Section 149 (7) of the Companies Act, 2013, All Independent Directors of the Company viz. Mr. Rameshwar Pareek, Mr. Udit Agarwal, Mr. Bhairon Singh Solanki, Mr. Rajendra Aggarwal and Mrs. Anu Sharma have made declaration to the effect that they meet the criteria of independence as stipulated under Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors of the Company in pursuant to clause (c) of sub section (3) of Section 134 of the Companies Act, 2013 hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had 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;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DEPOSITS

During the Financial Year 2018-19, the Company has not invited, accepted or renewed any deposits covered under Chapter V of the Companies Act, 2013 and there is no outstanding amount of deposits at the end of the financial year.

AUDITORS AND AUDITORS’ REPORT

Details of the Auditors of the Company and their Audit Reports for the year under report are given below:

Statutory Auditors

At the Annual General Meeting of the Company held on 26th September, 2015, M/s D. Khanna & Associates, Chartered Accountants Firm, Jaipur, (ICAI Firm Registration No-012917N) were reappointed as the Statutory Auditors of the Company for a period of 5 years which is subject to annual ratification by the members of the Company in terms of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. The consent of the members shall be taken for the re-appointment of M/s D. Khanna & Associates, Chartered Accountants Firm, Jaipur, (ICAI Firm Registration No-012917N) as the Statutory Auditors of the Company for the second consecutive term for 5 (five) years. The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments.

Secretarial Auditor and Secretarial Audit Report

M/s Gaurav Gupta & Associates, Company Secretaries, Moradabad, a very eminent Corporate Consultant having more than 15 years experience of rending professional services to several eminent companies including Central PSUs and Banks, were appointed as Secretarial Auditors of the Company to conduct the secretarial audit for the financial year ended March 31, 2019 and to give their report thereon.

Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report of M/s Gaurav Gupta & Associates, Company Secretaries, Moradabad for the financial year 2018-19 is annexed to this report as Annexure-I.

The said Secretarial Audit Report has no qualification, reservation or adverse remarks and it is self explanatory. Thus, there is no need to give any further explanation or comment by the Board.

Secretarial Compliance Report

In Compliance of Regulation 24A of the Listing Requirements read with SEBI Circular No. CIR/CFD/CMD/27/2019 dated February 08, 2019 the annual secretarial compliance report issued by the practicing company secretary for the financial year ended on March 31, 2019 is a ached as “Annexure-I.(i)”.

Cost Auditors

Section 148 of the Companies Act, 2013 provides that such class of companies, which are engaged in the production of such goods or providing such services, shall maintain cost records and shall get audit of such cost records by a Cost Accountant in practice, as may be prescribed in the Rules notified by the Central Government for the purpose.

The Cost Audit Report for the financial year 2018-19, in respect of the Steel Ingot prescribed under Cost Audit Rules, 2014, is not applicable to be filed with MCA since the Company has closed the unit of M.S. Ingot. Hence there is no requirement for the cost audit to be done of the Company’s unit of Steel Ignot for the financial year 2018-19.

Internal Auditors

Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company has re-appointed M/s Chaturvedi & Co., Chartered Accountants Firm as Internal Auditors of the Company to conduct the internal audit of the Company and to give their audit report thereon in the manner as prescribed under the Act.

CORPORATE SOCIAL RESPONSIBILITY POLICY

With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications issued by the Ministry of Corporate Affairs, every Company having the net worth of Rs.500 crores or more or turnover of Rs.1000 crores or more or net profit of Rs.5 crore or more during any financial year have to spend at least 2% of the average net profit of the Company made during the three immediately preceding financial years.

Accordingly, the Company has to do a CSR Activity for an amount of Rs.17.64 lacs based on the average profits of the three preceding financial years. The CSR activities carried/to be carried out by the Company is driven by the expertise of the management. Additionally, the Company gives preference to the local area(s) of its operations for CSR activities. The Company believes that the CSR should be in the field(s) which have substantial social impact and which co-relate with the philosophy of the Company to improve the quality of life. During the FY 2018-19, the Company has come across various project, which reflected the above approach and hence the spending prescribed towards CSR were made during FY 2018-19.

The Corporate Social Responsibility Commiee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which is approved by the Board. This CSR policy is also available on the Company’s website - www.genuspaper.com.

For composition of CSR Commiee and other details as prescribed, the Annual Report on CSR activities is annexed to this report as Annexure-II.

RISK MANAGEMENT POLICY

The Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. A detailed exercise is being carried out that the organization faces such as strategic, financial, credit, market, liquidity, property, and other risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

CRITERIA FOR APPOINTMENT OF INDEPENDENT DIRECTORS

The Independent Directors shall be of high integrity with relevant expertise and experience so as to have as diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, Law, governance and general management.

CRITERIA FOR APPOINTMENT OF MANAGING DIRECTOR / WHOLE TIME DIRECTORS

The Nomination and Remuneration Commiee shall identify persons of integrity who possess relevant expertise and experience particularly in Paper Industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

REMUNERATION POLICY

The Company follows a policy on remuneration of Directors and Senior Management employees, details of the same are given in the Corporate Governance Report.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Nomination and Remuneration Commiee has laid down the criteria for evaluation of individual Directors, the Board as a whole. Based on the criteria the exercise of evaluation was carried out through as structured process covering various aspects of the Board functioning such as composition of Board and Commiees, experience and expertise, performance of specific duties and obligation, governance and compliance issues, a endance, contribution at meeting etc.

The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors at a separately convened meeting and the performance of the Board as a whole evaluated was reviewed. The performance of the Independent Directors was carried out by the entire Board (Excluding the Director being evaluated).

The Directors expressed their satisfaction with the evaluation.

DISCLOSURES:

NUMBER OF BOARD MEETINGS

During the financial year 2018-19, the Board of Directors of the Company met 6 (Six) times on 22/05/2018, 29/06/2018, 31/07/2018, 04/09/2018, 29/10/2018, 30/01/ 2019.

AUDIT COMMITTEE

The Company has a qualified and independent Audit Commiee, the Composition of which is given below:

Name of the Member Category Status
Mr. Udit Agarwal Independent Non Executive Director Chairman
Mr. Rameshwar Pareek Independent Non Executive Director Member
Mr. Bhairon Singh Solanki Independent Non Executive Director Member
Mr. Kailash Chandra Agarwal Executive Promoter Director Member

During the financial year 2018-19, the Audit Commiee met 5 (Five) times on 22/05/2018, 31/07/2018, 04/09/2018, 29/10/2018, 30/01/ 2019. All recommendations of Audit Commiee were accepted by the Board.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangement with related parties referred to in Section 188 of the Companies Act, 2013 in the prescribed form AOC-2 are disclosed in Annexure -III and forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees or investments referred to in Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

The Company envisions becoming the leaders in all the areas of operations. Your Company is holding certain strategic investment, generally long term in nature and the board may evaluate further opportunities in this regard with a view to enhance value for the stakeholders of the Company.

PARTICULARS OF DIRECTORS AND EMPLOYEES

Pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and in terms of provisions of the Section 136 (1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during the working hours and any member interested in obtaining such information may write to the Company Secretary. It is hereby afirmed that the remuneration is as per the Remuneration Policy of the Company.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return as on March 31, 2019 in the prescribed Form No. MGT-9 is a ached herewith as Annexure-IV and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo have been given in the prescribed form in Annexure-V to this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATION OR COURTS OR TRIBUNALS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company’s operation in future.

MATERIAL CHANGES AND COMMITMENTS

The Company has terminated the lease agreement for Kraft paper manufacturing facility located at Kashipur, U arakhand (taken w.e.f. 22nd January, 2018). The termination is effective from 1st December, 2018.

CORPORATE GOVERNANCE REPORT AND COMPLIANCE CERTIFICATE

As provided under Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed compliance report on corporate governance is given in a separate section and forms an integral part to this Annual Report. The requisite certificate from Auditors of the Company confirming compliance with the conditions of Corporate Governance is a ached to the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(3) Part B Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on management discussion and analysis is given in a separate section and forms an integral part to this Annual Report.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Directors further state that during the year under review, there were no cases filed, pursuant to the sexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The company has devised a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct or ethics policy. This mechanism provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Commiee in exceptional cases.

During the financial year 2018-19, there were no instances of unethical behavior, fraud or violation of the company’s code of conduct or ethics policy and no personnel have been denied access to the audit commi ee.

The details of establishment of such mechanism are disclosed on the website of the Company viz. www.genuspaper.com.

INSURANCE

The properties of your Company comprising buildings, plant and machinery, other assets, stocks, etc. were adequately insured against various risks.

ACKNOWLEDGEMENT

Your Directors wish to place on record their gratitude for the assistance and cooperation extended by company’s shareholders, suppliers, dealers, business partners, bankers and financial institutions, Central and State Government and others associated with the Company. Your Directors also wish to place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment and look forward to their continued support.

For and on behalf of Board of Directors
For Genus Paper & Boards Limited
Himanshu Agarwal Kailash Chandra Agarwal
Place : Moradabad Whole Time Director Managing Director & CEO
Date : 31st July, 2019 DIN-00065185 DIN-00895365