Independent Auditor's Report
Genus Paper & Boards Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Genus Paper & BoardsLimited ("the Company") which comprise the Balance Sheet as at March 312017 the Profit and Loss Statement and the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing an opinionon whether the Company has in place an adequate internal financial controls system overfinancial reporting and the effectiveness of such controls. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
(a) In the case of Balance Sheet of the state of affairs of the Company as at 31stMarch 2017; (b) In the case of Statement of Profit and Loss of the profit for the yearended on that date; and (c) In the case of Cash Flow Statement of the cash flows for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Government of India in terms of sub-section (11) of section 143 of the Actand on the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in the Annexure1 a statement on the matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143 (3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of accounts as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The balance sheet the profit and loss statement and cash flow statement dealt withby this Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (2) of the Act; and
f) With respect to the adequacy of the Internal Financial Controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure 2.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
I. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note No. 30 to the financial statements.
II. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
III. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
IV. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures our enquiries test check andrelying on the management representation regarding holding and nature of cash transactionincluding specified bank notes we report that the disclosures are in accordance withbooks of account maintained by the Company and as produced to us by the Management ReferNote .
| ||For D. Khanna & Associates |
| ||Chartered Accountants |
| ||ICAI Firm Regn. No. 012917N |
| ||Deepak Khanna |
|Place: Moradabad ||Partner |
|Date : 26th May 2017 ||Membership No.: 092140 |
ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in paragraph (1) of Report on other Legal and RegulatoryRequirements' of our Independent Auditors' Report of even date to the members of the GenusPaper & Boards Limited on the Financial statements for the year ended on 31stMarch 2017 we report that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) As explained to us the fixed assets have been physically verified by the managementduring the year in a phased periodical manner which in our opinion is reasonable havingregard to the size of the company and nature of its assets. No material discrepancies werenoticed on such physical verification.
c) Based on our verification and according to information and explanations given to usthe title deeds of immovable properties are held in the name of the company.
(ii) As per the information and explanation given to us the Company's management hascarried out physical verification of inventory at reasonable intervals. No materialdiscrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans the principal and interest thereof arere-payable on demand to a company covered in the register maintained under section 189 ofthe Companies Act 2013. In our opinion and according to the information and explanationsgiven to us the terms and conditions of the grants and loans are not prejudicial to theinterest of the company.
(b) The company has granted loans that are re-payable on demand to a company coveredin the register maintained under section 189 of the Companies Act 2013. The loans grantedare repayable on demand. We are informed that the company has not demanded repayment ofany such loan and interest during the year and thus there has been no default on the partof the parties to whom the money has been lent.
(c) There are no overdue amounts in respect of the loan granted to a company covered inthe register maintained under section 189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investment made and guarantees and securities given have been compliedwith by the company.
(v) The company has not accepted any deposits from the public.
(vi) The Central Government has prescribed the maintenance of cost records pursuant tothe Companies (Cost Records and Audit) Rules 2014 prescribed under section 148(1) of theAct in respect of certain manufacturing activities of the company. We have broadlyreviewed the accounts and records of the company in this connection and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the accounts and records with a viewto determine whether they are accurate or complete.
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccounts in respect of undisputed statutory dues including provident fund income taxsales tax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities though there has been a slight delay in a few cases.Noundisputed amounts payable in respect of provident fund employees' state insuranceincome tax service tax sales-tax custom duty excise duty value added tax cess andother material statutory dues were outstanding at the year end for a period of more thansix months from the date they became payable. b) According to the information andexplanations given to us there are no unpaid dues of income tax Sales tax Service Taxduty of Customs duty of Excise or value added tax under dispute as stated hereunder:-
| || || || ||(Rs. In Lacs) |
|Name of Statue ||Nature of Period to dues which the Amount relates ||Forum where dispute is pending ||Demand ||Amount deposited (under Protest) |
|1 The Central Sales Tax/ The State Sales Tax ||CST/ VAT and Various years Entry Tax from 2004-15 ||Hon'ble High Court/ Commissioner appeals ||402.86 ||174.96 |
|2 The Central Excise ||Excise Duty/ Various years Service Tax from 2008-17 ||Appellate Tribunal/ Appeals ||40.79 ||Nil |
| ||Total || ||443.65 ||174.96 |
(viii) Based on examination of books of accounts and information and explanation givento us the Company has not defaulted in repayment of loans or borrowings to a financialinstitution or bank. Company has not issued any debentures; hence nothing is due todebenture holders.
(ix) Based on examination of books of accounts and information and explanation given tous no money raised during the year by way of initial public offer and term loans wereapplied for the purposes for which those are raised.
(x) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company no material fraud by the company or any fraudon the Company by its officers or employees has been noticed or reported during the year.
(xi) The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
(xii) The company is not a Nidhi Company; hence reporting under this clause is notapplicable to the Company and hence not commented upon.
(xiii) According to the information and explanation given by management all thetransactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 and the details have been disclosed in the Financial Statements asrequired by the applicable accounting standards.
(xiv) According to the information and explanation given to us and on an overallexamination of the Balance Sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirement under clause 3(xiv) are not applicable tothe company and hence not commented upon.
(xv) According to the information and explanation given by the management the companyhas not entered into any non- cash transactions with directors or persons connected withhim under the provisions of section 192 of Companies Act 2013.
(xvi) According to the information and explanation given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the company.
For D Khanna & Associates
Date: 26th May 2017
ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT
Referred to in our report of even date to the members of Genus Paper & BoardsLimited on the accounts for the year ended 31st March 2017
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of Genus Paper& Boards Limited (the Company') as on 31st March 2017 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial control over financial reporting includedobtaining an understanding of internal financial control over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017based on the internal controls over financial reporting criteria established by theCompany considering the components of internal controls stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the ICAI.
For D Khanna & Associates
Date: 26th May 2017