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Astron Paper & Board Mill Ltd.

BSE: 540824 Sector: Industrials
NSE: ASTRON ISIN Code: INE646X01014
BSE 00:00 | 18 Oct 101.90 0.75
(0.74%)
OPEN

100.90

HIGH

102.85

LOW

100.00

NSE 00:00 | 18 Oct 102.10 1.05
(1.04%)
OPEN

101.40

HIGH

102.80

LOW

99.70

OPEN 100.90
PREVIOUS CLOSE 101.15
VOLUME 32050
52-Week high 129.90
52-Week low 78.55
P/E 19.12
Mkt Cap.(Rs cr) 474
Buy Price 100.00
Buy Qty 1.00
Sell Price 101.90
Sell Qty 15.00
OPEN 100.90
CLOSE 101.15
VOLUME 32050
52-Week high 129.90
52-Week low 78.55
P/E 19.12
Mkt Cap.(Rs cr) 474
Buy Price 100.00
Buy Qty 1.00
Sell Price 101.90
Sell Qty 15.00

Astron Paper & Board Mill Ltd. (ASTRON) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 08th Annual Report on the business andOperations of the Company together with the Audited Financial Statements for the financialyear ended 31st March 2018.

FINANCIAL STATEMENTS AND RESULTS: (Rs in Lacs.)
PARTICULARS 2017-18 2016-17
Income from Operations 25292.95 18326.52
Other Income 77.37 132.39
Total Income 25370.32 18458.91
Expenses 23472.09 17622.24
Profit before tax 1898.24 836.66
Tax Expenses 192.11 165.53
Other Comprehensive Income 0.25 1.34
Profit after Tax 2090.59 1003.53

OPERATIONS:

On a comparable basis after reflecting accounting impact of GST for the full year netsales grew by 37%. Net Profit at Rs 2090.34 Lacs increased by 108%.

Detailed information on the operations of the Company and details on the state ofaffairs of the Company are covered in the Management Discussion and Analysis Report.

CREDIT RATING:

Acuite Ratings & Research Limited (erstwhile SMERA Ratings Limited) hasassignedlong term debt rating of "ACUITE BBB-(read as ACUITE BBB minus) against previousLongterm rating of ICRA BB and short term rating of ACUITE A3 (read as ACUITE A three)against previous ICRA A4 on Rs 113.00 Cr. bank facilities as on 27thJune 2018 andexpressed outlook as stable.

DIVIDEND:

With a view to conserve resources and expansion of business your Directors havethought it prudent not to recommend any dividend for the financial year under review.

TRANSFER TO RESERVES:

The Company does not propose to transfer amounts to the general reserve. Out of theamount available for appropriation and an amount of Rs 2090.34 lacs is proposed to beretained in the profit and loss account.

SHARE CAPITAL:

The Company's Initial Public Offering (IPO) of 14000000 Equity Shares of face valueof Rs 10/- (Rupees Ten only) for cash at a premium of Rs 40/- per share aggregating to

Rs 6882.50 Lacs (Rs 2.50 per share discount to Employee Reserve Share) by way of BookBuilding Process was opened on 15th December 2017 and closed on 20th December 2017. TheQIB portion was oversubscribed with by 108 times non-institutional portion by 394 timesand the retail portion by 74 times. The allotment was made on 27th December 2017.Subsequent to the completion of IPO the paid up equity share capital of the Company gotincreased from Rs 3250 Lacs to Rs 4650 Lacs.

The paid up equity share capital as on 31 March 2018 was Rs 4650.00 Lacs The trading ofEquity Shares of the Company commenced on National Stock Exchange of India Limited and BSELimited on 29th December 2017.

The Company has not issued shares with differential voting rights sweat equity sharesnor has it granted any stock options.

UTILIZATION OF IPO PROCEEDS:

The IPO issue proceeds of Rs 6982.50 Lacs has been fully utilized as under :

Object stated in Prospectus Estimated Utilized up to 30th June 2018 Pending for utilization
Setting Up New Manufacturing Facility with lower GSM kraft Paper 230.20 230.20 NIL
Part Repayment of Unsecured Loan 81.00 81.00 NIL
Funding Working Capital requirements of the Company 239.00 239.00 NIL
General Corporate Purpose 50.27 50.27 NIL
Total 600.47 600.47 NIL

IPO COMMITTEE:

IPO Committee was consitituted on May 29 2017 to take decisions with regard to IPO asit may in its absolute discretion deem fit and proper in the interest of the Companyincluding the appointement of merchant bankers lawyers registrar and other agencies asmay be required for the purpose of IPO.

The composition of said committee is as under :

Name of the Member Designation
Shri Kirit Patel Chairman
Shri Ramakant Patel Member
Shri Karshanbhai Patel Member
Shri Kanubhai Patel Member
Ms. Chaitali Parikh Member
Shri Uttam Patel Secretary

EXECUTIVE COMMITTEE:

Executive Committee was consitituted on January 29 2018 to take and approve routinebusiness and transactions of the company.

The composition of said committee is as under :

Name of the Member Designation
Shri Kirit Patel Chairman
Shri Ramakant Patel Member
Shri Karshanbhai Patel Member
Shri Kanubhai Patel Member

FIXED DEPOSITS :

The Company has not accepted any fixed deposits during the year 2017-18.

CAPACITY EXPANSION AND NEW PROJECTS

The Company's current installed capacity is 120000 MT/ year. As per stated object inprospectus our proposed PM-2 located at Halvad will commence commercial productionprobably in 2nd quarter having capacity of 33000 MT/ year.

SUBSIDIARIES

After closure of the financial year investment of

Rs 403.50 lacs was made in 23rd July 2018. The amount represents the considerationpaid for the acquisition of 100% equity stake.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Dr. Shyam Agrawal (DIN: 03516372) and Mr. Sudhir Maheshwari (DIN: 07827789) wereappointed as an Additional Director(s) (Independent Category) of the Company under Section161 of the Companies Act 2013 w. e. f 29th May 2017. Members approval is sought by wayof Ordinary Resolution for a period of 5 years.

In accordance with the Articles of Association of the Company Mr. Ramakant Patel (DIN:00233423) retires by rotation and being eligible offers himself for reappointment.Necessary resolution for his re-appointment is included in the Notice of AGM for seekingapproval of Members. The Directors recommend his re-appointment for your approval.

In terms of Section 203 of the Companies Act 2013 the Board has appointed Shri ParthPatel Chartered Accountant as the Chief Financial Officer (Key Managerial Personnel) ofthe Company with effect from 29th May 2017.

POLICY ON DIRECTORS' REMUNERATION

The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration as recommended by the Nomination & RemunerationCommittee.

DIRECTOR'S RESPONSIBILITY STATEMENT:

Your Directors confirm that:

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

b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year ended31st March 2018 and of the profit of the company for that period;

c) the directors have taken proper and sufficient care 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) the directors have prepared the annual accounts on a going concern basis;

e) the Board has laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively; and

f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS

The Board has put in place a mechanism for evaluation of its own performance Committeeand Individual Directors. The evaluation of the Board Committees Directors and Chairmanof the Board was conducted based on the evaluation parameters such as Board compositionand

Structure effectiveness of the Board participation at meetings domain knowledgeawareness and observance of governance etc.

FAMILIARISATION PROGRAMME:

The Company has put in place an induction and familiarization programme for all itsDirectors including the Independent Directors. The familiarization programme forIndependent Directors in terms of provisions of Regulation 46(2)(i) of ListingRegulations is uploaded on the website of the Company.

BOARD MEETINGS:

12 (Twelve) meetings of the Board of Directors of the Company were held during theyear. For further details please refer to Corporate Governance section of this AnnualReport.

DECLARATIONS BY INDEPENDENT DIRECTORS:

All the Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under section 149(6) of the Companies Act 2013 andRegulation 16(1) (b) of Listing Regulations.

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

The particulars under Section 134 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 are attached to this Report as "ANNEXURE- A".

CORPORATE GOVERNANCE

The Company is committed to good corporate governance practices. The Report onCorporate Governance as stipulated under Listing Regulations forms an integral part ofthis Report as "ANNEXURE-B". The requiste certificate from M/s PinakinShah & Co. Practicing Company Secretary is attached to the Report on CorporateGovernance.

The Board has received MD/CFO Certification under Regulation 17(8) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated underListing Regulations is presented in a section forming part of Annual Report. Items coveredin Board's Report are not repeated in the Management Discussion and Analysis Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The details of Corporate Social Responsibility Committee has been provided underCorporate Governance section of this Annual Report and is also posted on the website ofthe Company. The report as per Section 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility Policy) Rules 2014 is attached as

"ANNEXURE- C".

EXTRACT OF ANNUAL RETURN:

Extract of Annual Return of the Company is attached as "ANNEXURE- D"to this Report.

PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration as per Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is attached as "ANNEXURE-E" to this Report. Details ofemployee remuneration as required under provisions of Section 197 of the Companies Act2013 and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (including any modifications thereof) are available at the Registered Officeof the Company during working hours and shall be made available to any shareholder onrequest.

AUDITORS AND AUDIT REPORTS a) STATUTORY AUDITORS

M/s S.N Shah & Associate Chartered Accountants (FRN:109782W ) were appointed as aStatutory Auditors of the Company with the approval of members at the 7th Annual GeneralMeeting to hold office till the conclusion of the 12th Annual General Meeting to be heldin the year of 2022. As per the recent amendment issued by Ministry of Corporate Affairsratification statutory auditors at every AGM is not required and hence your Directors havenot proposed the ratification of M/s S.N Shah & Associate Chartered Accountants atensuing AGM. Auditor's Report for the year under review does not contain anyqualifications reservations or adverse remarks.

b) SECRETARIAL AUDITOR

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 M/s Pinakin Shah & Co. a firm of Company Secretaries in practice toconduct the Secretarial Audit of the Company for the financial year 2017-18. TheSecretarial Audit Report is annexed herewith as "ANNEXURE-F". TheSecretarial Audit Report does not contain any qualification reservation or adverseremarks.

AUDIT COMMITTEE

The terms of reference of the Audit Committee and the particulars of meetings held andattendance are mentioned in the Corporate Governance Report forming part of the

Annual Report.

VIGIL MECHANISM POLICY / Whistle Blower Policy

The Company has established a Vigil mechanism and Whistle Blower Policy for Directorsand employees. It has been communicated to the Directors and employees of the Company andalso posted on the website of the Company.

POLICY RELATING TO PREVENTION OF SEXUAL HARASSMENT

The Company has formulated a Prevention of Sexual Harassment Policy and has formed anInternal Complaints Committee. During the financial year 2017-18 the Company had notreceived any complaints on sexual harassment.

RISK MANAGEMENT

In compliance with Regulation 21 of Listing Regulations a Risk Management Committeehas been constituted by the Board. Risk Management Committee also known as Risk ManagementOversight Committee has been entrusted with roles and powers which includes: a) Review andapproval of risk management plan b) Review progress on the risk management plan c)Proposemethodology on risk classification and measurement. The Company has laid out a riskmanagement plan for identification and mitigation of risks. The Company has constituted aManagement Risk Committee which is chaired by an Executive Director and has functionalheads as members of the Committee. Business heads are invited as and when required. Risks(Business / Reputation) and mitigation plans are considered by this committee. The RiskManagement Committee of the Board provides reasonable oversight of the risks. The otherdetails are provided in the Corporate Governance Report.

CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. There are no materially significant related party transactions made by the Companywith Promoters Directors or Key Managerial Personnel etc. which may have potentialconflict with the interest of the Company at large or which warrants the approval of theshareholders. Accordingly no transactions are being reported in Form AOC-2 in terms ofSection 134 of the Act read with Rule 8 of the Companies (Accounts) Rules 2014. Howeverthe details of the transactions with Related Party are provided in the Company's financialstatements in accordance with the Accounting Standards.

All Related Party Transactions are placed before the Audit Committee and the Board.Omnibus approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transactions are placed before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://astronpaper.com/wp-content/uploads/2018/01/Material-Related-Party-Transaction-Policy-1.pdf

PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:

Details of loans guarantees or investments covered under the provisions of Section 186of the Companies Act 2013 are given in the notes to the Financial Statements.

HUMAN RESOURCES

The focus for the year was on Capability Building Employee Engagement and Key TalentManagement. The total number of employees as on 31st March 2018 were 277.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operations in future.

INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Company'sbusiness its size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising policies and procedures are designedto ensurere liability off financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.

GENERAL

The details of constitution of Nomination and Remuneration Committee and StakeholdersRelationship Committee are given in the Corporate Governance Report.

There have been no material changes and commitments affecting the financial position ofthe Company between the end of financial year and the date of this Report.

DISCLOSURE AS PER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

Your Company has adopted a policy on prevention prohibition and redressal of sexualharassment at the workplace in line with the provision of the Sexual Harassment atWorkplace (Prevention Prohibition and

Redressal) Act 2013 and Rules made there under. Your Company has constituted anInternal Complaints Committee across its commercial offices and Manufacturing sites.

DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS

The Company has not maintained cost records as specified by the Central Governmentunder sub- section (1) of Section 148 of the Companies Act 2013 as the said provision arenot applicable to Company.

APPRECIATION:

Your Directors wish to place on record their appreciation of the contribution made byemployees at all levels to the continued growth and prosperity of your Company. YourDirectors also wish to place on record their appreciation to the shareholders dealersdistributors consumers banks and other financial institutions for their continuedsupport.

Date: 06-08-2018 For and on behalf of the Board
Place: Ahmedabad Shri Kirit Patel
Chairman & Managing Director
DIN: 03353684