Your directors have pleasure in presenting the 32nd Annual Report together with theAudited Statement of Accounts of Agio Paper & Industries Limited for the year endedMarch 31 2017.
|1. SUMMARISED FINANCIAL HIGHLIGHTS || ||(Rs. in Lacs |
| ||Current Year ||Previous Year |
|Gross Turnover and other receipts ||17.98 ||7.10 |
|Profit / (Loss) before Interest and Depreciation ||(116.76) ||(117.55) |
|Less: Interest ||(0.50) ||(0.02) |
|Profit/(Loss) Before Depreciation ||(116.75) ||(117.57) |
|Less: Depreciation ||19.43 ||23.66 |
|Profit /(Loss) Before Tax ||(136.18) ||(141.23) |
|Less: Provision for taxation ||- ||5.50 |
|Profit /(Loss) After Tax ||(136.18) ||(146.73) |
|Balance brought forward from previous year ||(2502.91) ||(2356.18) |
|Balance carried to Balance Sheet ||(2639.09) ||(2502.91) |
2. BUSINESS PERFORMANCE
The resumption of productivity depends upon a host of factors and the main problemstill revolves around the restrictions imposed by the Central Pollution Control Board.However we remain optimistic about overcoming these hurdles in the near future.
3. FUTURE OUTLOOK
Being restricted by the Central Pollution Control Board's order the option of exploringother areas of business has always been in the mind of management till the restrictionsare lifted.In modern day world the importance of generation of electricity from renewableresources can not be over emphasized.Being authorized by the memorandum of association itremains a preferred area to venture into provided the right opportunity arises in the nearfuture.
In absence of any production activities no operational profit was generated forrecommendation of dividend for the financial year ended 31st March 2017.
5. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2017 was Rs.16.12 crores and paid uppreference share capital as on that date was Rs.25.68 crores. During the year under reviewthe company has issued 1119750 10% Non-cumulative Redeemable Preference Shares ofRs.100/- each. The said preference shares were issued under private placement basis toBengal Orion Financial Hub Ltd throughout the year.
6. CREDIT FACILITIES
Since reaching an amicable settlement with the Allahabad bank regarding repayment ofcredit facilities which were availed in earlier years the company for the past two yearshas been consistently paying its quarterly dues as per schedule.
7. ECONOMIC SCENARIO AND OUTLOOK
After a lackluster outturn in 2016 economic activity is projected to pick up pace in2017 and 2018 especially in emerging market and developing economies. However there is awide dispersion of possible outcomes around the projections given uncertainty surroundingthe policy stance of the incoming U.S. administration and its global ramifications.
With these caveats aggregate growth estimates and projections for 2016-18 remainunchanged relative to the October 2016 World Economic Outlook. The outlook for advancedeconomies has improved for 2017-18 reflecting somewhat stronger activity in the secondhalf of 2016 as well as a projected fiscal stimulus in the United States. Growth prospectshave marginally worsened for emerging market and developing economies where financialconditions have generally tightened. Near-term growth prospects were revised up for Chinadue to expected policy stimulus but were revised down for a number of other largeeconomies-most notably India Brazil and Mexico. In India GDP figures for Q3 FY 2016astonished on the upside showing no significant slowdown from the government'sdemonetization. The reading sharply contrasted the picture painted by high-frequencyindicators which had pointed to muted activity due to a shortage of hard currencysparking concerns that the growth figures do not reflect reality in India's economy andcould be revised downwards. Meanwhile data for the fourth quarter is positive: industrialproduction rebounded in January and the PMIs rose in February.
8. PAPER INDUSTRY OUTLOOK AND OPPORTUNITIES
The paper industry in India has become more promising as the domestic demand is on therise. Increasing population and literacy rate growth in GDP improvement in manufacturingsector and lifestyle of individuals are expected to account for the growth in the paperindustry of India.
Many of the existing players are increasing their capacity to meet the growing demand.The focus of paper industry is now shifting towards more eco-friendly products andtechnology. Government of India has established rules and regulations to control thepopulation and degradation of forest. These measures taken by the government has broughtthe significant changes in the paper industry of India. According to "India PaperIndustry Forecast & Opportunities 2017" the paper industry in India is expectedto grow at the CAGR of around 9.6% during 2012-2017 which will make the revenues of paperindustry of India to reach up to USD 11.83 Billion by 2017. About 70% of the totalinstalled capacity of paper production in India is accounted by Gujarat West BengalOrissa Andhra Pradesh Karnataka and Maharashtra. Uttar Pradesh Tamil Nadu HaryanaKerala Bihar and Assam together account for about 25% of the total paper production inIndia.
9. CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the company yet the Company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
10. HUMAN RESOURCES
The well disciplined workforce which has served the company for three decades lies atthe very foundation of the company's major achievements and this trend is set to continue.The management has always carried out systematic appraisal of performance and impartedtraining at periodic intervals. The company has always recognized talent and hasjudiciously followed the principal of rewarding performance.
11. BUSINESS RISK MANAGEMENT
The prudent principles of risk minimization no longer are an option but has become acompulsion these days.
In keeping with these norms the board took a well informed decision to initiate theprocedure and thereafter formally adopted steps for framing implementing and monitoringthe risk management plan for the company.
The objective of this policy is ensuring stability of business and its sound growth andalso to promote a pro-active approach in reporting evaluating and resolving risksassociated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues.
In accordance with newly introduced Regulation 17(9) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulation 2015 the Board ensures adherence and continuationof such risk management policy.
In today's challenging and competitive environment strategies for mitigating inherentrisks in accomplishing the growth plans of the Company are imperative. The common risksinter alia are: Regulations competition Business risk Technology obsolescenceInvestments retention of talent and expansion of facilities.
Business risk inter-alia further includes financial risk political risk fidelityrisk legal risk.
As a matter of policy these risks are assessed and steps as appropriate are taken tomitigate the same.
12. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The system of internal control established is commensurate with the size and nature ofbusiness.Detailed procedures are in place to ensure all assets are safeguarded andprotected against loss and all transactions are authorized recorded and reportedproperly.The internal control system are monitored and evaluated by internal auditors andtheir reports are reviewed by the audit committee. . Even through this non-productionperiod the Company continues to ensure proper and adequate systems and procedurescommensurate with its size and nature of its business.
13. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act 2013 the Company has complied with thelaws and the codes of conduct applicable to it and has ensured that the business isconducted with integrity and accordingly the company has adopted a vigil mechanism policy.This policy is explained in corporate governance report and also posted on the website ofcompany.
14. SEXUAL HARASSMENT POLICY
The Company has also framed a policy on prevention of Sexual Harassment of Women atWorkplace which commits to provide a workplace that is free from all forms ofdiscrimination including sexual harassment.
As per the Policy any complaint received shall be forwarded to an Internal ComplaintCommittee ("ICC") formed under the Policy for redressal. The investigation shallbe carried out by ICC constituted for this purpose. There was no such complaint during theyear.
15. DIRECTORS & COMMITTEES
At the 29th Annual General Meeting of the company held on 24th September2014 thecompany had appointed the existing independent directors Mr. Kamal Kumar Khetawat (DIN00438830) and Mr. Sheo Shankar Joshi (DIN 01180895) as independent directors under thecompanies Act 2013 for 5 consecutive years for a term upto the conclusion of the 34thAnnual General Meeting.
Mrs. Sudha Dhanuka (DIN 06417787) who was serving as Director in the category ofIndependent/woman Director under the companies Act 2013 resigned on 12.11.2016. At aboard meeting held on that date the said resignation was accepted and the board appointedMrs. Mohini Agarwal (DIN 07632857) as an additional director in the category ofindependent category.
All independent directors have given declaration that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and regulation16(b) of SEBI (Listing Obligations & Disclosure Requirements) Regulation 2015 .
In accordance with the provisions of Companies Act 2013 MR. Ankit Jalan (DIN:02577501) Executive Director retires by rotation and being eligible offers himself forre-appointment.
16.1 BOARD EVALUATION
Pursuant to the provisions of companies Act 2013 and SEBI (Listing Obligations &Disclosure Requirements) Regulation 2015 the Board has carried out annual performanceevaluation of its own performance the directors individually as well the evaluation ofthe working of its Audit Nomination & Remuneration and Stakeholder committee.Themanner in which the evaluation has been carried out has been explained in CorporateGovernance Report.
16.2 REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
During the year Ten Board Meetings and one independent directors' meeting was held. TheDetails of which are given in Corporate Governance Report. The provisions of CompaniesAct 2013 and listing agreement and SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 were adhered to while considering the time gap between two meetings.
16.4 AUDIT COMMITTEE
The company is having an audit committee comprising of the following directors:
|Name ||Status ||Category |
|Mr. Kamal Kumar Khetawat ||Chairman ||Non Executive & Independent Director |
|Mr. Ankit Jalan ||Member ||Executive Director |
|Mr. Sheo Shankar Joshi ||Member ||Non Executive & Independent Director |
16.5 NOMINATION AND REMUNERATION COMMITTEE
The company is having a Nomination and Remuneration committee comprising of thefollowing directors:
|Name ||Status ||Category |
|Mr. Kamal Kumar Khetawat ||Chairman ||Non Executive & Independent Director |
|Mr. Sheo Shankar Joshi ||Member ||Non Executive & Independent Director |
|Mrs. Mohini Agarwal ||Member ||Non Executive & Independent Director |
17. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2017 and of the profit of the Company for the year ended on thatdate;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
18. RELATED PARTY TRANSACTIONS
There were no material contracts or arrangements entered into by the company inaccordance with provisions of section 188 of the Companies Act 2013.
All Related Party Transactions in usual course were placed before the Audit Committeeas also the Board for approval.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
20.1 STATUTORY AUDITORS
M/s Singhi & Co (Firm Registration No.302049E) Chartered Accountants the existingstatutory auditors shall complete their tenure in accordance with provisions of section139(2) of the Companies Act2013 at the forthcoming Annual General Meeting of the company.Therefore the appointment of Jitendra K Agarwal & Associates (Firm Registration No.318086E) is being recommended for approval by members at the forthcoming Annual GeneralMeeting.
20.2 SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Subhasish Bosu & Co. (CP No.:11469 FCS: 7277) Company Secretaries toundertake the secretarial audit of the company. The Secretarial Audit Report is annexedherewith as 'Annexure 1'.
20.3 INTERNAL AUDITORS
M/S Ashish K Gupta & Associates Chartered Accountants performs the duties ofinternal auditors of the company and their report is reviewed by the audit committee fromtime to time.
21. CORPORATE GOVERNANCE
As per SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 of theListing Agreement with the Stock Exchanges a separate section on corporate governancepractices followed by the Company together with a certificate from the Company'sSecretarial Auditor confirming compliance forms an integral part of this Report.
22. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "Annexure2".
23. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure 3".
24. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended in respectof employees of the Company is as follows:
The company has one Executive Director and due to financial constraints being faced bythe company he has forgone remuneration. Further no sitting fees has been paid to anydirector during the year.
In terms of the amended rules the names of the top ten employees in terms ofremuneration drawn are provided in "Annexure 4"
The particulars of the employees who are covered by the provisions contained in Rule5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended are:
a) Employed throughout the year Nil
b) Employed for part of the year Nil
The remuneration paid to all Key management Personnel was in accordance withremuneration policy adopted by the company.
26. IMPAIRMENT OF ASSETS & CAPITAL WORK-IN-PROGRESS
The paper plant was closed on 6th October 2010 to ensure due compliance of orders ofthe Central Pollution Control Board during which the expansion unit was still under theinstallation stage. As a result of the closure the installation of the paper machine andthe integration of the power plant with the old and new machines could not be carried out.In order to be effective as well as feasible both needs to operate in unison but sincecircumstances has led to non commissioning of the power plant and the new paper machineboth of them have been shown as work in progress in auditor's report.
In compliance with Accounting Standard AS-28 relating to "Impairment ofAssets" the company has reviewed the carrying amount of its fixed assets as at theend of the year. During the previous financial years the valuation of the various assetsof the company situated at our mill site including the factory building and premises wascarried out by a registered valuer in connection with various financial facilities grantedby our banker. Although the report was submitted by the valuer to the bank directly inaccordance with his norms of appointment it is significant to note that neither the bankhas communicated any adverse remarks on such assets nor have they expressed any concernregarding the current state of such assets till date. Based on the strategic plans andsuch valuation of the fixed assets of the company no impairment of assets is envisaged atthe balance sheet date.
27. FINANCIAL VIABILITY OF COMPANY
As it has been pointed out in the statutory auditor's report that there has been 50%erosion of net worth due to closure of our mill. During 2016-17 the company continuedinfusing funds by way of private placement of redeemable preference shares for repayingdebts as well as revival of the Company.
The company has been very well supported from all quarters and therefore your directorswish to place on record their sincere appreciation for the support and co-operationreceived from Employees Dealers Suppliers Central and State Governments Bankers andothers associated with the Company.
Your Directors wish to thank the banks financial institutions shareholders andbusiness associates for their continued support and cooperation.
We look forward to receiving the continued patronage from all quarters to become abetter and stronger Company.
29. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations.
Various factors such as economic conditions changes in government regulations taxregime other statues market forces and other associated and incidental factors mayhowever lead to variation in actual results.
| ||For and on behalf of the Board of Directos || |
|Kolkata ||K K KHETAWAT ||ANKIT JALAN |
|29th April 2017 ||(Director) ||(Executive Director) |