DIRECTORS' REPORT Dear Shareholders Your Directors have pleasure in presenting the 04th Annual Report and Audited Financial Statements on the Accounts of the Company for the financial year ended 31st March, 2015. OPERATIONS AND BUSINESS PERFORMANCE The Company's Net Sales / Revenue from Operations during the year under review is Rs. 28861.41 lakh as compared to Rs. 24746.11 lakh in previous year. The Profit after Tax for the year is Rs. 960.41 lakh as compared to Rs. 1,029.55 lakh in previous year. RESERVES During the Financial year 2014-15, 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. NUTURE OF BUSINESS The Company is engaged in the business of manufacturing of Kraft Paper and Steel Ingot. There was no change in the nature of business during the Financial Year 2014-15. LISTING The Company is pleased to inform the Members that the Stock Exchanges (BSE and NSE) have accorded their approval vide letters DCS/AMAL/LP/TRD/295/2014-15 dated 12.2.2015 and NSE/CML/28852 dated 12.2.2015 respectively for listing of 257125940 equity shares of Re 1/- each of the Company. The trading in the shares of the company is permitted at Stock Exchanges (BSE & NSE) since February 16, 2015. For more details about the scrip of the company, please refer the Corporate Governance section of this Annual Report. SUBSDIARIES During the year under report, the Company have one direct subsidiary viz. Genus Prime Infra Limited (formerly Gulshan Chemfill Limited) (GPIL) and three step down subsidiaries viz. Sansar Infrastructure Private Limited, Star Vanijya Private Limited and Sunima Trading Private Limited which are wholly owned subsidiaries of GPIL. During the year under report, Virtuous Paper & Urja Limited, an Associate of the Company has ceased to be its Associate Company w.e.f.18th March, 2015. Genus Prime Infra Limited (formerly Gulshan Chemfill Limited), a listed company, is engaged in the business of infrastructure and real estate sector. Sansar Infrastructure Private Limited, Star Vanijya Private Limited and Sunima Trading Private Limited, are wholly owned subsidiaries of Genus Prime Infra Limited. Each of the Companies is an unlisted company and engaged in the business of trading. For the performance and financial position of the subsidiaries of the company, please refer the Statement of Subsidiaries to standalone financial statements of this Annual Report. As provided under first proviso of Section 129(3) of the Companies Act 2013, a separate statement containing the salient features of the financial statements of subsidiaries of the Company in the prescribed form AOC-1 is annexed to the Standalone Financial Statements of the Company. As provided under fourth proviso of Section 136 of the Act, the Company shall place the separate audited accounts of its subsidiaries on its website - www.genuspaper.com The Company shall make available physical copies of separate audited financial statements in respect of each of its subsidiary, to any shareholder of the company who request for it. These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing AGM. In view of giving full attention to main business activities of the Company, the Board had on 23.6.2014 approved the transaction of disposal of entire shareholding in the Subsidiary of the Company viz. Genus Prime Infra Limited (formerly Gulshan Chemfill Limited) in terms of the Share Purchase Agreement dated 01.7.2014 and subject to the provisions of SEBI Takeover Regulations 2011. Pursuant to the SEBI' letter no. CFD/DCR/AT/SKD/PA/4585/2015 dated February 11, 2015. Genus Prime Infra Limited and all its subsidiaries have ceased to be subsidiaries of the Company w.e.f. 21st April, 2015. CONSOLIDATED FINANCIAL STATEMENTS In the manner as prescribed under Section 129 of the Companies Act, 2013 read with the Listing Agreement with Stock Exchanges and Accounting Standard - 21 issued by the Institute of Chartered Accountants of India, the Company has prepared Consolidated Financial Statements of the Company and its subsidiaries as on 31st March, 2015 and has published them in the Annual Report of the Company which is available on the website of the Company-www.genuspaper.com CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Rakesh Kumar Agarwal, Chief Financial Officer resigned from the Company effective from 13th November, 2014. The Board placed on records its appreciation for his sincere contribution in the success of the company. Mr. Sanjay Kumar Agarwal, AGM (Finance & Accounts), who is a Chartered Accountant and having more than 13 years experience in the field of Finance, Taxation, Accounts, Corporate Restructuring etc., was appointed as Chief Financial Officer of the Company effective from 13th November, 2014 to fill the causal vacancy caused by the resignation of Mr. Rakesh Kumar Agarwal, by the Board at its meeting held on 15.11.2014. Pursuant to Sections 149,152 and other applicable provisions, if any, of the Companies Act, 2013, Mr. Himanshu Agarwal (DIN-00065185), Whole Time 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. Pursuant to Section 149(1) of the Companies Act, 2013, the Board of Directors of the Company had on 31st March, 2014 appointed Mrs. Richa Jasrapuria (DIN-02097581) as an Additional Director in the category of Non-Executive Non Independent Director who is Woman Director on the Board w.e.f. 31st March, 2015. Mrs. Richa Jasrapuria shall hold office till the date of the ensuing Annual General Meeting of the Company and, being eligible, offer herself for re-appointment. The Board of Directors in their meeting held on 14th August, 2015 has recommended to re-appoint Mrs. Richa Jasrapuria as Non-Executive Non Independent Director within the meaning of Section 149 and 152 of the Companies Act, 2013 subject to retirement by rotation. In order to meet the requirement of appointment of minimum 1/2 independent directors of total directors under Clause 49 of the Listing Agreement, the Board of Directors of the Company had on 29th April, 2015 appointed Mr. Rajendra Aggarwal (DIN-07036881) as an Additional Director in the category of Non-Executive Independent Director w.e.f. 30th April, 2015 who shall hold office till the date of the ensuing Annual General Meeting of the Company under Section 161 of the Act. The Board of Directors in their meeting held on 14th August, 2015 has recommended to re-appoint Mr. Rajendra Aggarwal as Non-Executive Independent Director within the meaning of Section 149 and 152 of the Companies Act, 2013 read with Schedule IV thereto and Rules made there under, for a term of 5 (five) consecutive years commencing from the date of his appointment as an Additional Director in the Company i.e. 30th April, 2015, not subject to retirement by rotation, Mrs. Richs Jasrapuria is a fellow member of Institute of Chartered Accountants of India and possesses sound experience in the field of banking and business management. Mr. Rajendra Aggarwal is a B.Tech. and also Master of Business. He has wide experience in the field of Finance, Corporate Structuring and Business Management & Planning etc. As provided under section 149(7) of the Act, Mr. Rajendra Aggarwal has given a declaration to the effect that he meets the criteria of independence as required under section 149(6) to the Act and Clause 49 of the Listing agreement being qualified as an Independent Director. The Board believes that he possesses relevant expertise and experience and has relationship at arms' length with the Company and its directors. The Company has also received notices in writing from members signifying their/his intention to propose Mrs. Richa Jasrapuria and Mr. Rajendra Aggarwal as a candidature for the office of Director along with requisite deposit of Rupees one lakh as required under Section 160 of the Companies Act, 2013. The Nomination and Remuneration Committee of the Board in its meeting held on 14th August, 2015 has considered and recommended the aforesaid re-appointments of Mrs. Richa Jasrapuria and Mr. Rajendra Aggarwal to the Board for their approval. The Board has considered that the presence of Mrs. Richa Jasrapuria, Mr. Rajendra Aggarwal and Mr. Himanshu Agarwal as Directors 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. 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, Committee 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 and Mr. Rajendra Aggarwal have made declaration to the effect that they meet the criteria of independence as stipulated under Section 149(6) of the Act and Clause 49 of the Listing Agreement. 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 2014-15, 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 Company and their Audit Reports for the year under report are given below: Statutory Auditors Mr. Pradeep Kapoor (Proprietor of M/s Pradeep Hari & Co.), Chartered Accountant, Moradabad (having Membership No.-074491) was appointed as Statutory Auditors of the Company for a period of 3 consecutive years in the 03rd Annual General Meeting of the Company held on 30.09.2014 to conduct the statutory audit of the annual accounts of the company and to give audit report thereon in terms of provisions of the Companies Act, 2013. After the appointment of Mr. Pradeep Kapoor as Statutory Auditors of the Company, the Company became listed at Stock Exchanges w.e.f. 16th February, 2015. In terms of Clause 41 of the Listing Agreement with Stock Exchanges where the shares of the Company are listed, audit of listed companies shall be carried out by the auditors who have undergone Peer Review Process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of ICAI. Mr. Pradeep Kapoor informed the Board that we are in the process of peer review of ICAI and it may take longer time to get the desired certificate from ICAI to the effect as required under Clause 41 of the Listing Agreement. Thus, due to being not eligible, he resigned from the office of Statutory Auditors of the Company and the Board in its meeting held on 29th April, 2015 approved the resignation w.e.f. 24th April, 2015. To fill the causal vacancy caused by the resignation of Mr. Pradeep Kapoor, the Members of the Company in their Extraordinary General Meeting held on 28th May, 2015 have approved the appointment of M/s D. Khanna & Associates Chartered Accountants, Jaipur as Statutory Auditors of the Company to conduct statutory audit of the accounts of the company for the financial year ended 31st March, 2015. They shall hold the office till the conclusion of ensuing Annual General Meeting of the Company. M/s D. Khanna & Associates Chartered Accountants Firm, Jaipur, (ICAI Firm Registration No-012917N) who has given their consent vide their letter dated 01.8.2015, being eligible offer themselves for the re-appointment as Statutory Auditors of the Company. On the basis of recommendation of the Audit Committee, the Board recommends the appointment of M/s D. Khanna & Associates Chartered Accountants Firm, Jaipur as a Statutory Auditors of the Company, for the approval of members of the Company at ensuing annual general meeting. The observations of Auditors in their report read with the relevant notes to accounts are self-explanatory and therefore do not require further explanation. Secretarial Auditors M/s C. M. Bindal & Company, Company Secretaries, Jaipur, a very eminent Corporate Consultant having more than 27 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, 2015 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 C. M. Bindal & Company, Company Secretaries, Jaipur for the financial year 2014-15 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 explanation or comment by the Board. Cost Auditors Section 148 of the Companies Act, 2013 provides that such class of companies, which are engaged in 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 Ministry of Corporate Affairs (MCA) has notified new rules viz. the Companies (Cost Records and Audit) Rules 2014 on June 30, 2014 effective from the financial year commencing on or after the 1st day of April, 2014 in supersession of the old Cost Audit Rules, 2011 and has amended these rules on December 31, 2014. Such Rules prescribe the class of companies, criteria to maintain the cost records and that for cost audit based on turnover of individual and all products or services; and procedure for the appointment of cost auditor and to submit the cost audit report to the Central Government. M/s M. K. Singhal & Co., Cost Accountants, Modinagar (FRN-00074) who has given their consent vide their letter dated 05.5.2015, being eligible offer themselves for the re-appointment as Cost Auditors of the Company. In terms of Section 148 of the Companies Act, 2013 and Rule 6 of the Companies (Cost Records and Audit) Rules 2014, the Board has on 14.8.2014, on the recommendation of the Audit Committee, appointed to M/s M. K. Singhal & Co., Cost Accountant, (FRN-00074) as the Cost Auditors to conduct the Cost Audit of the Steel Plant of the Company for the financial year 2015-16 and to give their audit report thereon. The Board has also approved, on the recommendation of the Audit Committee of the Boards of Directors, that the remuneration of Rs. 60000/- plus traveling, lodging and boarding expenses be paid to the Cost Auditors to conduct the cost audit of Steel Plant of the Company for the financial year 2015-16 subject to the rectification by the members at the ensuing annual general meeting. The Board recommends the appointment of M/s M. K. Singhal & Co., Cost Accountant, (FRN-00074) for FY 2015-16 at a remuneration of Rs. 60000/- plus traveling, lodging and boarding expenses for the rectification by the members at the ensuing annual general meeting. The Cost Audit Report for the financial year 2014-15, in respect of the Kraft Paper & Steel Ingot prescribed under Cost Audit Rules, 2014, is due to be filed with MCA on or before 30.09.2015 (being within 180 days from the end of reporting year). Internal Auditors Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company has appointed to 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 The Corporate Social Responsibility Committee 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 During the year, the Company has spent Rs.20,00,000/- (Rupees Twenty Lakh) (2%) of the average net profits of last three years on CSR activities. For composition of CSR Committee 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 excise 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 Committee 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 Clause 49 of the Listing Agreement the Nomination and Remuneration Committee 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 Committees, experience and expertise, performance of specific duties and obligation, governance and compliance issues, attendance, 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 2014-15, the Board of Directors of the Company met 9 (Nine) times on 23/06/2014, 18/7/2014, 23/7/2014, 30/9/2014, 15/11/2014, 26/12/2014, 19/1/2015, 9/3/2015 and 31/3/2015. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELLATED 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 standalone financial statements provided in this Annual Report. 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 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 affirmed 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, 2015 in the prescribed Form No. MGT-9 is attached 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 MATERIALS ORERS 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 Due to disposal of Subsidiary of the Company namely Genus Prime Infra Limited (formerly Gulshan Chemfill Limited), the Company has incurred a loss of Rs. 321.15 lakh after the end of the financial year 2014-15. CORPORATE GOVERNANCE REPORT AND COMPLIANCE CERTIFICATE As provided under Clause 49 (X) of the Listing Agreement, 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 attached to the Report on Corporate Governance. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Pursuant to Clause 49 (VIII)(D) of the Listing Agreement, 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 Committee in exceptional cases. During the financial year 2014-15, there were no instances of unethical behaviour, fraud or violation of the company's code of conduct or ethics policy and no personnel have been denied access to the audit committee. 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 Whole Time Director DIN-00065185 Kailash Chandra Agarwal Managing Director & CEO DIN-00895365 Place : Moradabad Date : 14th August, 2015 |