| Dear Shareholders,
The Directors have pleasure in presenting the 30th Annual Report
together with the Audited Statement of Accounts of Agio Paper &
Industries Limited for the year ended 31st March, 2015.
1. SUMMARISED FINANCIAL HIGHLIGHTS
(Rs. in Lacs)
Current Year Previous Year
Gross Turnover and other receipts 474.75 70.42
Profit / (Loss) before Interest
and Depreciation 372.48 (53.47)
Less: Interest - 495.66
Profit/(Loss) Before Depreciation 372.48 (549.08)
Less: Depreciation 28.86 27.57
Profit /(Loss) Before Tax 343.62 (576.65)
Less: Provision for taxation - -
Profit /(Loss) After Tax 343.62 (576.65)
Balance brought forward from
previous year (2699.81) (2123.16)
Balance carried to Balance Sheet (2356.18) (2699.81)
2. BUSINESS PERFORMANCE
The resumption of productivity depends upon a host of factors and the
main problem still revolves around the restrictions imposed by the
Central Pollution Control Board. However, we remain optimistic about
overcoming these hurdles in the near future.
3. DIVIDEND
In accordance with compromise settlement arrived with the lender bank
during the year the company has written back interest accrued in
earlier years in the books of accounts. However, in absence of any
production activities no operational profit was generated for
recommendation of dividend for the financial year ended 31st March,
2015.
4. SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2015 was Rs.16.12
crores. During the year under review the company has not issued any
shares or any convertible instruments.
5. CREDIT FACILITIES
Before closure of our factory at Bilaspur the Allahabad Bank had
granted us certain credit facilities in connection with our projects
at factory site. Even after closure of factory the company was regular
in its commitments to the bank but due to adversities after a period
of time such adherence was not complied with which led the bank to
exercising its rights. But the company had always been in contact with
the bank to amicably arrive at a mutual settlement. The efforts
finally came to fruition since an amicable settlement was reached
which was formally communicated to the company by the bank vide its
letter dated 27th March, 2015 and which certainly is a giant step
towards in right direction.
6. ECONOMIC SCENARIO AND OUTLOOK
India is set to become the world's fastest-growing major economy by
2016 ahead of China, the International Monetary Fund (IMF) said in its
recent latest forecast. India is expected to grow at 6.3 per cent in
2015, and 6.5 per cent in 2016 by when it is likely to cross China's
projected growth rate, the IMF said in the latest update of its World
Economic Outlook.
The government, engineering an economic rebound with a slew of
reforms, has unveiled a new statistical method to calculate the
national income with a broader framework that turned up a pleasant
surprise: GDP in the past year 2013-14 grew 6.9 per cent instead of
the earlier 4.7 per cent.
The International Monetary Fund (IMF) and the World Bank in a joint
report have forecasted that India will register a growth of 6.4 per
cent in 2015, due to renewed confidence in the market brought about by
a series of economic reforms pursued by the government.
7. PAPER INDUSTRY OUTLOOK AND OPPORTUNITIES
There are about 700 - 800 paper mills (organized & unorganized sector)
in the country out of which 12 large units accounts for production
share of about 30% and balance units mostly comprising of medium
(Agro-based) and Small (waste paper based) paper mills with production
share of 70%. Wood based industry accounts for 35% of production while
waste paper and agri residue accounts for 44% & 21% respectively.
The paper industry in India has become more promising as the domestic
demand is on the rise. Increasing population and literacy rate, growth
in GDP, improvement in manufacturing sector and lifestyle of
individuals are expected to account for the growth in the paper
industry of India.
According to "India Paper Industry Forecast & Opportunities, 2017" the
paper industry in India is expected to grow at the CAGR of around 9.6%
during 2012-2017, which will make the revenues of paper industry of
India to reach up to USD 11.83 Billion by 2017.
8. CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act, 2013 regarding Corporate
Social Responsibility are not attracted to the company yet the Company
has been, over the years, pursuing as part of its corporate
philosophy, an unwritten CSR policy voluntarily which goes much beyond
mere philanthropic gestures and integrates interest, welfare and
aspirations of the community with those of the Company itself in an
environment of partnership for inclusive development.
9. HUMAN RESOURCES
The well disciplined workforce which has served the company for three
decades lies at the very foundation of the company's major
achievements and shall well continue for the years to come. The
management has always carried out systematic appraisal of performance
and imparted training at periodic intervals. The company has always
recognized talent and has judiciously followed the principle of
rewarding performance.
10. BUSINESS RISK MANAGEMENT
Although the company has long been following the principle of risk
minimization as is the norm in every industry, it has now become a
compulsion.
Therefore, in accordance with clause 49 of the listing agreement the
Board members were informed about risk assessment and minimization
procedures after which the Board formally adopted steps for framing,
implementing and monitoring the risk management plan for the company.
The main objective of this policy is to ensure sustainable business
growth with stability and to promote a pro-active approach in
reporting, evaluating and resolving risks associated with the
business. In order to achieve the key objective, the policy
establishes a structured and disciplined approach to Risk Management,
in order to guide decisions on risk related issues.
In today's challenging and competitive environment, strategies for
mitigating inherent risks in accomplishing the growth plans of the
Company are imperative. The common risks inter alia are: Regulations,
competition, Business risk, Technology obsolescence, Investments,
retention of talent and expansion of facilities.
Business risk, inter-alia, further includes financial risk, political
risk, fidelity risk, legal risk.
As a matter of policy, these risks are assessed and steps as
appropriate are taken to mitigate the same.
11. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to safeguard and
protect from loss, unauthorized use or disposition of its assets. All
the transactions are properly authorized, recorded and reported to the
Management. The Company is following all the applicable Accounting
Standards for properly maintaining the books of accounts and reporting
financial statements. The internal auditor of the company checks and
verifies the internal control and monitors them in accordance with
policy adopted by the company. Even through this non-production period
the Company continues to ensure proper and adequate systems and
procedures commensurate with its size and nature of its business.
12. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its
employees are conducted in a fair and transparent manner by adoption
of highest standards of professionalism, honesty, integrity and
ethical behaviour the company has adopted a vigil mechanism policy.
This policy is explained in corporate governance report and also
posted on the website of company.
13. DIRECTORS & COMMITTEES
At the 29th Annual General Meeting of the company held on 24th
September, 2014 the company had appointed the existing independent
directors Shri Kamal Kumar Khetawat (DIN 00438830) and Shri Sheo
Shankar Joshi (DIN 01180895) as independent directors under the
companies Act, 2013 for 5 consecutive years for a term upto the
conclusion of the 34th Annual General Meeting.
All independent directors have given declaration that they meet the
criteria of independence as laid down under section 149(6) of the
Companies Act, 2013 and clause 49 of listing agreement.
At a board meeting held on 26.09.2014 the board had appointed Smt.
Sudha Dhanuka (DIN 06417787) as an Additional Director in the category
of Independent Director. At the same Board meeting the board also
noted and condoled the passing away of Executive Director Shri
Davinder Kumar (DIN 00289363) on 7th September, 2014.
In accordance with the provisions of Companies Act,2013 Shri Ankit
Jalan (DIN: 02577501), Executive Director retires by rotation and
being eligible offers himself for re-appointment.
13.1 BOARD EVALUATION
Pursuant to the provisions of companies Act,2013 and clause 49 of the
Listing Agreement, the Board has carried out annual performance
evaluation of its own performance, the directors individually as well
the evaluation of the working of its Audit, Nomination & Remuneration
and Stakeholder committee. The manner in which the evaluation has been
carried out has been explained in Corporate Governance Report.
13.2 REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration
committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
stated in the Corporate Governance Report.
13.3 MEETINGS
During the year Seven Board Meetings and one independent directors'
meeting was held. The Details of which are given in Corporate
Governance Report. The provisions of Companies Act,2013 and listing
agreement were adhered to while considering the time gap between two
meetings.
13.4 AUDIT COMMITTEE
The company is having an audit committee comprising of the following
directors:
Name Status Category
Shri Kamal Kumar Khetawat Chairman Non Executive &
Independent Director
Shri Ankit Jalan Member Executive Director
Shri Sheo Shankar Joshi Member Non Executive &
Independent Director
13.5 NOMINATION AND REMUNERATION COMMITTEE
The company is having a Nomination and Remuneration Committee
comprising of the following directors:
Name Status Category
Shri Kamal Kumar Khetawat Chairman Non Executive &
Independent Director
Shri Sheo Shankar Joshi Member Non Executive &
Independent Director
Smt Sudha Dhanuka Member Additional Director -
Independent Category
14. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a) that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
b) that such accounting policies as mentioned in Notes to the
Financial Statements have been selected and applied consistently and
judgement and estimates have been made that are reasonable and prudent
so as to give a true and fair view of the state of affairs of the
Company as at March 31, 2015 and of the profit of the Company for the
year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of
the Companies Act, 2013 for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
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
financial controls were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
15. RELATED PARTY TRANSACTIONS
There were no contracts or arrangements entered into by the company in
accordance with provisions of section 188 of the Companies Act, 2013.
However, there were material related party transactions in terms of
clause 49 of the listing agreement. All material related party
transactions that were entered into during the financial year were on
an arm's length basis and were in the ordinary course of business.
There are no materially significant related party transactions made by
the Company with Promoters, Directors, Key Managerial Personnel or
other designated persons which may have a potential conflict with the
interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee
as also the Board for approval.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company's website. None of the Directors has any
pecuniary relationships or transactions vis-a-vis the Company.
16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations.
17. AUDITORS
17.1 STATUTORY AUDITORS
M/s Singhi & Co (Firm Registration No.302049E) ,Chartered Accountants
have been appointed as statutory auditors of the company at the last
Annual General Meeting held on 24.09.2014 for a period of three years
subject to ratification by members at every consequent Annual General
Meeting. Therefore, ratification of appointment of Statutory Auditors
is being sought from the members of the Company at the ensuing AGM.
17.2 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 has appointed Subhasish Bosu & Co.
(CP No.:11469, FCS: 7277),Company Secretaries to undertake the
secretarial audit of the company. The Secretarial Audit Report is
annexed herewith as 'Annexure 1'.
17.3 INTERNAL AUDITORS
M/S Ashish K Gupta & Associates, Chartered Accountants performs the
duties of internal auditors of the company and their report is
reviewed by the audit committee from time to time.
18. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on corporate governance practices followed by the
Company, together with a certificate from the Company's Secretarial
Auditor confirming compliance forms an integral part of this Report.
19. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule, 8 of The Companies
(Accounts) Rules, 2014, is annexed herewith as "Annexure 2".
20. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT 9 is annexed herewith as "Annexure 3".
21. 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 in respect of employees of the Company is as follows:
The company has one Executive Director and due to financial
constraints being faced by the company he has forgone remuneration.
Further, no sitting fees has been paid to any director during the
year.
The particulars of the employees who are covered by the provisions
contained in Rule 5(2) and rule 5(3) of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 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 with remuneration policy adopted by the company.
22. IMPAIRMENT OF ASSETS & CAPITAL WORK-IN-PROGRESS
The paper plant was closed on 6th October, 2010 to ensure due
compliance of orders of the Central Pollution Control Board during
which the expansion unit was still under the installation stage. As a
result of the closure, the installation of the paper machine and the
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 since circumstances has led to non
commissioning of the power plant and the new paper machine both of
them have been shown as work in progress in auditor's report.
In compliance with Accounting Standard AS-28 relating to "Impairment
of Assets", the company has reviewed the carrying amount of its fixed
assets as at the end of the year. During the previous financial years
the valuation of the various assets of the company situated at our
mill site including the factory building and premises was carried out
by a registered valuer in connection with various financial facilities
granted by our banker. Although the report was submitted by the valuer
to the bank directly in accordance with his norms of appointment it is
significant to note that neither the bank has communicated any adverse
remarks on such assets nor have they expressed any concern regarding
the current state of such assets till date. Based on the strategic
plans and such valuation of the fixed assets of the company, no
impairment of assets is envisaged at the balance sheet date.
23. FINANCIAL VIABILITY OF COMPANY
As it has been pointed out in the statutory auditor's report that
there has been complete erosion of net worth due to closure of our
mill. The company is exploring various avenues to infuse funds into
the company for repaying debts as well as revival of the company
24. CPCB RESTRICTIONS
As it has been pointed out in the secretarial auditor's report the
factory still remains non operational due to restrictions imposed by
the Central Pollution Control Board. The management is pursuing active
steps to comply with norms in order to resume production activities.
25. ACKNOWLEDGEMENTS
The company has been very well supported from all quarters and
therefore your directors wish to place on record their sincere
appreciation for the support and co-operation received from Employees,
Dealers, Suppliers, Central and State Governments, Bankers and others
associated with the Company.
Your Directors wish to thank the banks, financial institutions,
shareholders and business associates for their continued support and
cooperation.
We look forward to receiving the continued patronage from all quarters
to become a better and stronger company.
26. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management
Discussion and Analysis contain certain statements relating to the
future and therefore are forward looking within the meaning of
applicable securities, laws and regulations.
Various factors such as economic conditions, changes in government
regulations, tax regime, other statues, market forces and other
associated and incidental factors may however lead to variation in
actual results.
For and on behalf of the Board of Director
Kolkata ANKIT JALAN K K KHETAWAT
11th April, 2015 (Executive Director) (Director) |