Agio Paper & Industries Ltd Directors Report.

Dear Shareholders,

Your directors have pleasure in presenting the 34 Annual Report together with the Audited Statement of Accounts of Agio Paper & Industries Limited for the year ended March 31, 2019.

1. SUMMARISED FINANCIAL HIGHLIGHTS
(Rs.)
Current Year Previous Year
Gross Turnover and other receipts 1,16,025 1,87,365
Profit / (Loss) before Exceptional Items and Depreciation (1,84,79,181) (1,75,37,974)
Less: Exceptional Items 65,01,70,46 3,21,95,140
Profit/(Loss) Before Depreciation (8,25,21,212) (4,97,33,114)
Less: Depreciation 9,75,015 16,77,307
Profit /(Loss) Before Tax (8,34,96,227) (5,14,10,421)
Less: Provision for taxation - (5596)
Profit /(Loss) After Tax (8,34,96,227) (5,14,10,421)

2. BUSINESS PERFORMANCE

The Operation of paper factory at Bilaspur is under suspension since 6th October, 2010 because of pollution control issues. Efforts are being made to comply with the norms and alternate means are also explored to start the factory along with new paper mill and power plant. In view of future plans and valuation of fixed Assets of the company, no impairment of fixed assets is envisaged by the management.

3. FUTURE OUTLOOK

Being restricted by the Central Pollution Control Boards order the option of exploring other areas of business has always been in the mind of management till the restrictions are lifted. The company is constantly envisaging the avenues related to generation of energy from renewable resources.

4. DIVIDEND

In absence of any production activities no operational profit was generated for recommendation of dividend for the financial year ended 31 March, 2019.

5. SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2019 was Rs.16.12 crores and Preference Share Capital is Rs. 32.57 Crores. During the year ended 31st March, 2019 the company has issued total 60,000, 10% Non-Cumulative Redeemable Preference shares of Rs. 100/- each on private placement basis as approved by the shareholders in the Postal Ballot dated 17 January, 2019.

6. CREDIT FACILITIES

The company is debt free with no debts existing to Banks or Financial Institutions.

7. ECONOMIC SCENARIO AND OUTLOOK

In 2018-19 fiscal, ending March 2019, Indian economy is estimated to have grown 7 per cent, lower than 7.2 per cent in 2017-18. The government is in fact taking a lot of measures to strengthen the corporate structure of the country and bringing more transparency in the corporate governance standards. Indian economy is expected to grow at 7.3 per cent in calendar year 2019 and 2020, and the government spending announced ahead of elections this year which will support near-term growth.

Details of Significant changes in Key financial Ratios: As per the requirement of the guidelines any change in the key financial ratios of 25% or more are to be disclosed in the Corporate Governance Report. During the period under review no such change has occurred in the company.

8. PAPER INDUSTRY OUTLOOK AND OPPORTUNITIES

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.

Imports of paper and paper products displayed an increasing trend till FY17 but subsequently declined in FY18. The growth in overall imports has been 13.7% for the FY05-FY17 period and 11.3% for the FY05-FY18 period. YTD FY19 imports have also been subdued fell by 11.7% to 2,761 thousand tonnes and increased by 8.6% in value terms to Rs 183.3bn. The decline in quantitative terms is expected to sustain for overall FY19 in the near term as the increase in international pulp price made imports costlier thereby changing the cost economics in favour of domestic paper. Paper and paper products exports grew by 51.5% to 1,599.7 thousand tonnes and by 52.4% to Rs 113.2bn for the April -January 2019 period as compared to the year ago period.

9. 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.

10. HUMAN RESOURCES

The well disciplined workforce who has served the company for three decades lies at the very foundation of the companys major achievements and this trend is set to continue. 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 principal of rewarding performance.

11. BUSINESS RISK MANAGEMENT

The prudent principles of risk minimization no longer are an option but have become a compulsion these days. In keeping with these norms the board took a well informed decision to initiate the procedure and thereafter formally adopted steps for framing, implementing and monitoring the risk management plan for the company. The objective of this policy is ensuring stability of business and its sound growth and also 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 todays 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.

12. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The system of internal control as well as Internal Financial Controls over Financials which are established are commensurate with the size and nature of business. Detailed procedures are in place to ensure all assets are safeguarded and protected against loss and all transactions are authorized, recorded and reported properly. The internal control system are monitored and evaluated by internal auditors and their reports are reviewed by the audit committee. 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.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Section 177 of the Companies Act, 2013 the Company has complied with the laws and the codes of conduct applicable to it and has ensured that the business is conducted 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 of company.

14. SEXUAL HARASSMENT POLICY

The Company has also framed a policy on prevention of Sexual Harassment of Women at Workplace which commits to provide a workplace that is free from all forms of discrimination, including sexual harassment.

As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee (ICC) formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. There was no such complaint during the year.

a Number of Complaints Filed during the FY

0

b Number of Complaints Disposed of during the FY

0
c Number of Complaints pending as on the end of the FY 0

15. DIRECTORS & COMMITTEES

During the year under review, Mr. Neeraj Kichlu (DIN: 05156014) has resigned from the post of the Non-Executive Independent Director w.e.f. 02 November, 2018 and Mr. Malay Chakrabarty (DIN: 03106149) and Mr. Umesh Kumar Dhanuka (DIN: 01666884) were appointed as the Additional Executive Director and Non Executive Independent Director w.e.f. 10 September, 2018 and 01 February, 2019 respectively, whose appointment is proposed for regularization at the ensuing Annual General Meeting of the Company.

Mr. Anurag Gupta has also tendered his resignation from the post of Company Secretary/Compliance Officer after the close of office hours on 31 March, 2019. He was appointed in the same capacity on 25 August, 2018.

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 regulation 16(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 will retire by rotation and being eligible offers himself for re-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 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.

16.2 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.

16.3 MEETINGS

During the year Nine 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 SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, as amended from time to time 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
Mrs. Mohini Agarwal* Member Non Executive & Independent Director

*Mrs. Mohini Agarwal has been inducted as a member of the Committee w.e.f. 01.01.2019.

*Mr. Neeraj Kichlu has resigned from the Board of the company with effect from 02.11.2018.

16.5 NOMINATION AND REMUNERATION COMMITTEE

The company is having a Nomination and Remuneration committee comprising of the following directors:

Name Status Category
Mr. Kamal Kumar Khetawat Chairman Non Executive & Independent Director
Mr. Umesh Kumar Dhanuka* Member Non Executive & Independent Director
Mrs. Mohini Agarwal Member Non Executive & Independent Director

*Mr. Umesh Kumar Dhanuka has been inducted as a member of the Committee w.e.f. 01.02.2019

17. 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, 2019, 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 judgment 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, 2018 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.

18. RELATED PARTY TRANSACTIONS

There were no material contracts or arrangements entered into by the company in accordance with provisions of section 188 of the Companies Act, 2013.

All Related Party Transactions in usual course were 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 Companys website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company

Further, there were no Related Party transactions with the Promoters of Promoters Group who hold more than 10% Shareholding or Voting rights in the company.

19. 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.

20. AUDITORS

20.1 STATUTORY AUDITORS

As per section 139 and other applicable provisions of the Companies Act, 2013 the Company has appointed M/s. J K V S & Co, Chartered Accountants (ICAI Registration No.: 318086E) as the Statutory Auditors of the Company,for a period of five years till the conclusion of 37 Annual General Meeting.

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 has appointed Shristi Garg & Associates (CP No.: 17447, ACS: 47506), Company Secretaries to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as Annexure 1.

Remarks: The remark given by the Secretarial Auditor is well noted and it was clarified that in absence of any Company Secretary this delay occurred.

20.3 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.

20.4 COST AUDITORS

Appointment of Cost Auditors and maintenance of Cost Records is not applicable to the Company.

21. CORPORATE GOVERNANCE

As per SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 as amended from time to time 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 Companys Secretarial 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 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.

23. 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 as well as it is disclosed on the website of the company on the following link http://agiopaper.com/Compliance.html.

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 respect of employees of the Company is as follows:

The company has Two Executive Directors and due to financial constraints being faced by the company the Whole Time Director has forgone remuneration. The Remuneration of the other Executive Director is disclosed in detail in the Extract of Annual Return in form MGT-9 of the Company. Further, no sitting fees has been paid to any director during the year.

In terms of the amended rules the names of the top ten employees in terms of remuneration drawn are provided in Annexure 4

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 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 with remuneration policy adopted by the company.

25. IMPAIRMENT OF ASSETS & CAPITAL WORK-IN-PROGRESS

The paper plant was closed on 6th October, 2010 to fulfill certain pollution control measures. The management of the Company has disposed off its entire plant & machinery and substantial portion of CWIP during the last year. The managemen t of the company is considering various alternative business plans to utilize the remaining PPE of the company. Further, the management does not forsee any impairment in the remaining PPE of the company.

26. FINANCIAL VIABILITY OF COMPANY

The financial viability of the company is totally dependent on the ability of the company to infuse funds into the company.

27. 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.

28. CAUTIONARY STATEMENT

The statements contained in the Boards 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 Directors

Kolkata RASHMI RANJAN ANKIT JALAN
DEBETA
28 August, 2019
PAN:ALSPD3810E DIN:02577501