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Genus Paper & Boards Ltd.

BSE: 538961 Sector: Industrials
NSE: GENUSPAPER ISIN Code: INE949P01018
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VOLUME 38849
52-Week high 26.50
52-Week low 9.70
P/E 70.00
Mkt Cap.(Rs cr) 396
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 15.60
CLOSE 15.60
VOLUME 38849
52-Week high 26.50
52-Week low 9.70
P/E 70.00
Mkt Cap.(Rs cr) 396
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Genus Paper & Boards Ltd. (GENUSPAPER) - Auditors Report

Company auditors report

To the Members of

Genus Paper & Boards Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the Standalone financial statements of Genus Paper& Boards Limited ("the Company”) which comprise the balance sheet as at31st March 2021 and the statement of Profit and Loss and Cash Flow Statement for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act”) in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 312021 and its Profit and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the financial statement. Emphasis ofMatter

We draw attention to Note No. 49 to the Financial Statements whichdescribes the uncertainties and impact of COVID-19 pandemic on the Company'soperation and result as assessed by the management. Our opinion is not modified in respectof this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements for the financial yearended March 312021. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the financial statements sectionof our report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying financial statements.

Key audit matters How our audit addressed the key audit matter
1. Existence of inventory of raw materials work in progress finished goods stores and spares consumables and packing material stock (refer note 8 to the standalone financial statements) We perform the following alternate audit procedures to audit the existence of inventories as per the guidance provided in SA 501 "Audit Evidence- Specific Considerations for Selected Items” as at the year-end since we were not able to physically observed the physical stock verification:
The company has its inventory located in factory premises and in godowns. The company has a policy of performing yearly count of its inventory. Due to travel restrictions imposed because of COVID-19 we were unable to participate physically in the physical verification of inventory performed by the management subsequent to the year end. In view of the forgoing obtaining sufficient appropriate audit evidence regarding existence of inventories as at the balance sheet date is identified as a key audit matter. a) Understood and evaluated the management's internal controls process to establish the existence of inventory such as
(i) the process of physical verification carried out by the management the scope and coverage of the verification programme the results of such verification included analysis of discrepancies if any;
(ii) maintenance of stock records at all locations;
b) Observed the physical verification of the inventories carried out by the management subsequent to year end through virtual mediums to verify the compliance with the standard operating procedures issued by the management for physical verification of inventory to determine existence of inventory.
c) On a sample basis performed role back procedures (by inspecting documentations relating to subsequent sales supported by acknowledged lorry receipts purchases stock transfer production records as applicable) from the inventory quantities physically verified by the management subsequent to the year end to arrive at the quantities at the balance sheet date. Compared such quantities at the balance sheet date based on such roll back procedures with the quantities as per the inventory records and obtained explanations for differences if any.
d) We have performed alternate procedures to audit the existence of inventory which includes inspection of supporting documentation relating to purchases sales stock transfer records and result of count performed by the management.

 

2. Procurement of Raw Materials and Valuation of Inventories
We identified procurement of Raw material and valuation of inventories as a key audit matters because of significance of costs incurred during the year related inventories as at reporting date and significant degree of management judgment involved in verification and valuation thereof. Evaluated the design and operating effectiveness of internal controls relating to procurement and inventory. We carried out a combination of procedures involving inquiry and observation re-performance and inspection of evidence in respect of operation of these controls.
We performed substantive testing by selecting samples of purchase transactions recorded during the year by verifying the underlying documents i.e. supplier invoices goods receipt notes etc.
Observed inventory value verification on a sample basis.
Re-computed the closing rate of sample items of inventories to check whether the same are in line with the accounting policy of the Company.
Obtained an understanding of the underlying data and estimates used for calculation of the yield ratio and compared the same with the previous years.
We performed cut-off testing for samples of purchase transactions recorded before and after the financial year end date by comparing with relevant underlying documentation which included supplier invoices goods receipt notes etc. to assess whether the purchases were recognized in the correct period.
We assessed manual journals posted to purchases to identify unusual items.

Other Information other than the Financial Statements andAuditor's Report thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Annual Report and other company related information but does not includethe financial statements and our auditor's report thereon. These reports are expectedto be made available to us after the date of this Auditor's Report.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information; we are requiredto report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended. This responsibility also includes maintenance of adequate accounting records inaccordance 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.

In preparing the financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing thecompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)0) of the Act we are also responsible for expressing our opinion on whetherthe company has adequate Internal Financial Controls with reference to FinancialStatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the FinancialStatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the Financial Statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements for the financial year ended March 312021 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in "Annexure 1" a statement on the matters specified in paragraphs 3 and 4of 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement and statement of changes in equity dealt with by this Report are inagreement with the books of account.

d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in 'Annexure 2' to this report.

g) With respect to the other matter to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act and

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Financial Statements. Refer Note No. 32 to the FinancialStatements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For D Khanna & Associates
Chartered Accountants
FRN:012917N
[Deepak Khanna]
Partner
M. No. 092140
UDIN: 21092140AAAADO7871
Date: June 28 2021
Place: Jaipur

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of

Genus Paper & Boards Limited of even date for the year ended on31-03-2021

(i) In respect of the Company's fixed assets:

(a) The Company has generally maintained proper records showing fullparticulars including quantitative details and situation of fixed assets (Property Plant& Equipment).

(b) The Company has a regular programme of physical verification of itsproperty plant and equipment by which all property plant and equipment are verified in aphased manner over a period of 3 years. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to informationand explanations given by the management the title deeds of immovable properties are heldin the name of the Company.

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification.

(iii) (a) The Company has granted loans the principal and interestthereof are re-payable on demand to a company covered in the register maintained undersection 189 of the Companies Act 2013. In our opinion and according to the informationand explanations given to us the terms and conditions of the grants and loans are notprejudicial to the Company's interest.

(b) The Company has granted loans that are re-payable on demand to acompany covered in the register maintained under section 189 of the Companies Act 2013.We are informed that the Company has not demanded repayment of any such loan and interestduring the year and thus there has been no default on the part of the parties to whomthe money has been lent.

(c) There are no overdue amounts in respect of the loan granted to acompany covered in the register maintained under Section 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanationsgiven to us provisions of section 185 and 186 of the Companies Act 2013 in respect ofloans to directors including entities in which they are interested and in respect of loansand advances given investments made and guarantees and securities given have beencomplied with by the Company.

(v) The company has not accepted deposits from the public within themeaning of Sections 73 to 76 of the Companies Act 2013 and the rules made there underhence this clause is not applicable.

(vi) We have broadly reviewed the accounts and records maintained bythe Company pursuant to the Rules made by the Central Government for the maintenance ofcost records under sub-section (1) of Section 148 of the Act read with Companies (CostRecords & Audit) Rules 2014 and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have not however made detailedexamination of the records with a view to determine whether they are accurate andcomplete.

(vii) (a) The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other material statutory dues applicable to it. Thereare no undisputed statutory dues outstanding as on 31st March 2021 for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insurancegoods and service tax income-tax sales-tax duty of custom duty of excise value addedtax goods and service tax cess and other material statutory dues were outstanding atthe year end for a period of more than six months from the date they became payable.

(c) According to the records of the Company the dues outstanding ofincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax and cess on account of any dispute are as follows:

(Rs. in Lacs)

Name of the Statue Nature of the Dues (including interest and penalty where applicable) Forum Period to which amount relates (Financial Year) Gross Amount (Rs. In Lacs) Amount Deposited under Protest (Rs. In Lacs) Net Amount Payable (Rs. In Lacs)
The Central Sales Tax / The State Sales Tax CST / VAT and Entry Tax Hon'ble High Court / Commissioner Appeals Various year (20132018) 92.50 58.32 34.18
The Central Excise Excise Duty / Service Tax Appellate Tribunal / Appeals Various year (20082017 46.19 0.80 45.39
Income Tax Income Tax ITAT Various year (20132019) 119.95 131.79 0.00
Total 258.64 190.91 79.57

(viii) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to informationand explanations given by the management we are of the opinion that the Company has notdefaulted in repayment of dues to a financial institution debenture holders bank orgovernment.

(ix) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management the Company has utilized the moniesraised by way of term loans for the purposes for which they were raised. The Company hasnot raised any money way of initial public offer/further public offer/debt instruments andhence not commented upon.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

(xi) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Thereforethe provisions of clause 3(xi) of the order are not applicable to the Company and hencenot commented upon.

(xiii) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management transactions with the relatedparties are in compliance with section 177 and 188 of Companies Act 2013 where applicableand the details have been disclosed in the notes to the financial statements as requiredby the applicable accounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence not commented upon.

(xv) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management the Company has not entered into anynon-cash transactions with directors or persons connected with him.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For D Khanna & Associates
Chartered Accountants
FRN:012917N
[Deepak Khanna]
Partner
M. No. 092140
UDIN: 21092140AAAADO7871
Date: June 28 2021
Place: Jaipur

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in Paragraph 2 under "Report on Other Legal andRegulatory Requirements” section of our report on even date to the members of GenusPaper & Boards Limited on the Financial Statements for the year ended 31stMarch 2021.

Report on the Internal Financial Controls with reference to FinancialStatements under Clause (i) of Sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls with reference toFinancial Statements of Genus Paper & Boards Limited ("the Company") as of31st March 2021 in conjunction with our audit of the Financial Statements ofthe Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls with reference to Financial Statements based onthe internal controls over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by The Institute ofChartered Accountants of India (ICAI). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to Financial Statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial control system with reference to FinancialStatements and their operating effectiveness. Our audit of internal financial control withreference to Financial Statements included obtaining an understanding of internalfinancial control with reference to Financial Statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the Financial Statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system with referenceto Financial Statements.

Meaning of Internal Financial Controls over Financial Reporting withreference to Financial Statements

A Company's internal financial control with reference to FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Financial Statements for external purposesin accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to Financial Statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of theCompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting with reference to Financial Statements Because of the inherent limitationsof internal financial controls with reference to Financial Statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls with reference to Financial Statementsto future periods are subject to the risk that the internal financial controls withreference to Financial Statements may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system with reference to Financial Statements in place and suchinternal financial controls with respect to Financial Statements were operatingeffectively as at 31 March 2021 based on the internal controls over financial reportingcriteria established by the Company considering the components of internal controls statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India.

For D Khanna & Associates
Chartered Accountants
FRN: 012917N
[Deepak Khanna]
Partner
M. No. 092140
UDIN: 21092140AAAADO7871
Date: June 28 2021
Place: Jaipur

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