Astron Paper & Board Mill Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 09th Annual Report for your Company together the Audited Statements of Accounts for the Financial year ended 31st March, 2019.

FINANCIAL HIGHLIGHTS:

(Rs in Lacs.)

PARTICULARS FY 18-19 FY 17-18
Income from Operations 37394.89 25292.95
Other Income 63.11 77.37
Total Income 37458.00 25370.32
Expenses 33815.17 23479.07
Profit before tax 3642.83 1891.25
Less: Tax Expenses 1179.70 192.11
Profit after Tax 2463.13 2083.35

CONSOLIDATED FINANCIAL AND OPERATIONAL REVIEW:

• Consolidated Net Sales has increased by 47.99% from Rs. 253.70 Crore to Rs.375.46 Crore.

• Consolidated EBITDA has increased by 70.57% from Rs.32.32 Cr to Rs.55.13 Cr.

• Consolidated Profit Before Tax has increased by 105.13% from Rs.18.91 Cr to Rs.38.79Cr.

• Consolidated Total Comprehensive Income has increased by 36.39 % from Rs20.83 Cr to Rs.28.41 Cr.

PROJECT IMPLEMENTATION AND PERFORMANCE REVIEW:

• During the year under review, your Company has increased its installed capacity by 45.50 % from 1,20,000 MTPA to 1,74,600 MTPA. Your Company has utilized its capacity to the tune of 122695 MTPA as against last years figure of 80096 MTPAwhich shows a utilization growth of 53.19 %.

• During the year under review, your Company has incurred capital expenditure to the tune of Rs.29.31 Cr towards plant & Machineries, Factory building and other capital expenditure.

• Your Company has successfully commenced the commercial production of PM-II at Unit-I located at Halvad, Gujarat on October, 2018.

DIVIDEND:

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

TRANSFER TO RESERVES:

Your Company does not propose to transfer any amount to any reserve of the Company for the year under review.

SHARE CAPITAL:

The Issued, Subscribed and Paid up Equity Share Capital of the Company as on 31st March, 2019 was Rs. 4650.00 Lacs divided in to 4,65,00,000 Equity Shares of Rs. 10.00 each.

EXECUTIVE COMMITTEE

Executive Committee was constituted on January 29, 2018 to take and approve routine business and transactions of the Company.

The composition of said committee is as under.

Name of the Member DIN Designation
Shri Kirit Patel 03353684 Chairman
Shri Ramakant Patel 00233423 Member
Shri Karshanbhai Patel 00048167 Member
Shri Kanubhai Patel 00386852 Member

DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re- enactment(s) for the time being in force).

PARTICULARS OF LOANS, GAURANTEES,OR INVESTMENTS UNDER SECTION 186:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri Kanubhai Patel, Director (DIN: 00386852) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Necessary resolution for his reappointment is included on the Notice of 09th AGM for seeking approval of members. The directors recommends his re- appointment for your approval.

On the recommendation of the Nomination and Remuneration Committee, Shri Dhiren Parikh (DIN: 08525317) and Shri Yogesh K. Patel (DIN: 03613259) were appointed as an Additional Director of the Company with effect from 05th August, 2019. In accordance with Section 161 of the Companies Act, 2013, Shri Dhiren Parikh (DIN: 08525317) and Shri Yogesh K. Patel (DIN: 03613259) will hold office upto the date of the ensuing AGM of the Company and being eligible, offers his candidature for appointment as a Director accustomed to act as an Independent Director, on the Board of the Company for 5 years w.e.f. 05th August, 2019. Your approval for their appointment as Independent Director has been sought in the Notice convening the ensuing AGM of the Company.

On the recommendation of the Nomination and Remuneration Committee, Board has appointed Shri Ramakant Patel (DIN: 02173231) as Whole Time Director of the Company for a period of 5 (Five) years with effect from 01st October, 2019. His appointment is subject to approval of Members of the Company and your approval has been sought for the same in the Notice convening the forthcoming AGM of the Company.

Shri Sanjiv Srivastava (DIN: 07361850) Director accustomed to act as an Independent Director, resigned from the post of Director (Independent) of the Company with effect from 05th August, 2019 and the Board of Directors took note of the same at the Board Meeting held on 03rd August, 2019. The Board of Directors places on record their deep appreciation of the valuable guidance and contribution made by Shri Sanjiv Srivastava during his tenure as Independent Director of the Company. Further, Shri Sanjiv Srivastava, Independent Director resigned as Independent Director and member/ chairman from all committees due to his pre-occupancy in other assignment. Further, Shri Sanjiv Srivastava has provided confirmation that no such material reasons other than those provided in his resignation letter

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

In compliance of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has put in place a mechanism for evaluation of its own performance, Committee and Individual Directors. The evaluation of the Board, Committees, Directors and Chairman of the Board was conducted based on the evaluation parameters such as Board composition and Structure, effectiveness of the Board, participation at meetings, domain knowledge, awareness and observance of governance, etc.

FAMILIARISATION PROGRAMME:

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

DECLARATION BY INDEPENDENT DIRECTORS:

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

INDEPENDENT DIRECTORS MEETING:

During the year under review, the Independent Directors of the Company met on 29th January, 2019, discussed inter-alia:

a) Evaluation of performance of Non-Independent Director and the Board of Directors of the Company as a whole.

b) Evaluation of performance of the Chairman of the Company, taking into views of executive and Non-Executive Directors.

c) Evolution of the quality, content and timelines of flow of information between the management and the board that is necessary for the board to effectively and reasonably perform its duties.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134 (3) (c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, your Directors hereby confirm the following: a) in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards have been followed;

b) the directors have selected such accounting policies and applied 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 have taken proper and sufficient care towards 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) the directors have prepared the annual accounts on a going concern basis;

e) the directors have laid down internal financial controls, which are adequate and operating effectively;

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

BOARD MEETINGS:

The Board of Directors met 5 (Five) times during the F.Y. 2018-19. The details of the board meetings and the attendance of the Directors is provided in the Corporate Governance Report forming part of this Report.

COMMITTEES OF THE BOARD:

Currently, the Board has four (04) Committees: a) Audit Committee b) Nomination and Remuneration Committee c) Stakeholder Relationship Committee d) Corporate Social Responsibility Committee

A detailed note on the Board and its committees, composition and compliances, as per the applicable provisions of the Act and Rules are provided under the Corporate Governance Report.

STATUTORY AUDITOR:

M/s, S.N Shah & Associate, Chartered Accountants (FRN:109782W ) were appointed as a Statutory Auditors of the Company with the approval of members at the 7th Annual General Meeting to hold office till the conclusion of the 12th Annual General Meeting to be held in the year of 2022. As per the recent amendment issued by Ministry of Corporate Affairs, ratification statutory auditors at every AGM is not required and hence your Directors have not proposed the ratification of M/ s S.N Shah & Associate, Chartered Accountants at ensuing AGM.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

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 Board of Directors has appointed M/s Pinakin Shah & Co., Company Secretaries in practice as the Secretarial Auditors of the Company to undertake the Secretarial Audit of the Company for the FY 2019-20. Your Company has received consent from M/s. Pinakin Shah & Co., Company Secretaries in practice to act as the Secretarial Auditors for conducting the audit of the secretarial records for the F.Y ending on 31st March, 2020.

DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS

The Company has not maintain cost records as specified by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013 as the said provisions are not applicable to Company.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit function is handled by an external firm of Chartered Accountants. The Internal Control Systems are regularly being reviewed by the Companys Internal Auditors with a view to evaluate the efficacy and adequacy of Internal Control Systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and to ensure that these are working properly and wherever required, are modified/ tighten to meet the changed business requirements.

The scope of the Internal Audit is defined and reviewed every year by the Audit Committee and inputs, wherever required, are taken from the Statutory Auditors. Based on the report of Internal Auditors, major audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Our management assessed the effectiveness of the Companys internal control over financial reporting (as defined in Clause 17 of SEBI Regulations 2015) as of March 31, 2019. The Statutory Auditors of the Company have audited the financial statements included in this annual report and have issued an attestation report on our internal control over financial reporting (as defined in Section 143 of Companies Act 2013).

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

Information required under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 as amended from time to time is attached as "ANNEXURE - A"to this Report.

RISK MANAGEMENT:

Regulation 21 is not Applicable to Company but your Company has an elaborate Risk Management procedure covering Business Risk, Operational Controls Assessment and Policy Compliance processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis within the risk appetite as approved from time to time by the Board of Directors.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENT:

During the year under review, investment of Rs. 403.50 Lacs was made on 23rd July, 2018 by acquiring 100 % equity stake of Balaram Papers Pvt. Ltd. The Company has formulated a policy for determining material subsidiaries pursuant to the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The said policy is available at the Company website at the link: http://astronpaper.com/wp-content/ uploads/2017/08/Material-Subsidiary-policy.pdf.

Pursuant to the provisions of Section 129 (3) of the Act, a statement containing the salient features of financial statements of the Companys subsidiary in Form AOC-1 is given in "ANNEXURE- B". Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to

Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which have been prepared in accordance with the applicable provisions of the Companies Act, 2013 and Indian Accounting Standards ("Ind AS") for financial year ended 31st March, 2019 and approved by the Board. These Consolidated Financial Statements have been prepared on the basis of the Audited Financial Statements of the Company and its Subsidiary Company, as approved by their respective Board of Directors.

Further, pursuant to the provisions of Section 135 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the company.

CORPORATE GOVERNANCE:

Your Company is committed to good Corporate Governance and has taken adequate steps to ensure that the requirements of Corporate Governance as laid down in Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are complied with. The details are given in "ANNEXURE- C".

The Board has framed Code of Conduct for all Board members and Senior Management of the Company and they have affirmed the compliance during the year under review.

The Board has during the year amended the framed "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information". The Code casts obligations upon the Directors and Officers of the Company to prevent / preserve Price Sensitive Informations, which may likely to have a bearing on the share price of the Company. Those who are in the knowledge of any such information are prohibited to use such information for any personal purpose. Similarly, the Code also prescribes how such information needs to be handled, disclosed or made available to the Public through Stock Exchanges, Companys website, Press, Media, etc. The Company Secretary & Compliance Officer has been entrusted with the duties to ensure compliance.

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

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate

Governance Report and the Secretarial Auditors Certificate regarding compliance of conditions of Corporate Governance are attached and forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As per Regulation 34 (2) (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is set out in a separate section included in this Annual Report and forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The details of Corporate Social Responsibility Committee has been provided under Corporate Governance section of this Annual Report. The CSR Policy can be access on the Companys website at the web link: http://astronpaper.com/wp-content/ uploads/2017/08/CSR-Policy.pdf. The report as per Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as "ANNEXURE- D".

EXTRACT OF ANNUAL RETURN:

Extract of the Annual Return of the Company in Form No. MGT 9 is attached as "ANNEXURE - E" to this report.

PARTICULARS OF EMPLOYEES:

Disclosure pertaining to remuneration and other details in terms of the provision of Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in "ANNEXURE-F" to this Report.

The focus for the year was on Capability Building, Employee Engagement and Key Talent Management. The total number of employees as on 31st March 2019 were 594 (including 252 on contractual basis).

SECRETARIAL AUDIT REPORT:

The Secretarial Audit Report for the financial year ended 31st March, 2019 is annexed with the Directors Report and forms part of the Annual Report as given in "ANNEXURE- G". Further, the Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

INSURANCE:

The Fixed Assets and Stocks of your Company are adequately insured.

VIGIL MECHANISM POLICY/ WHISTLE BLOWER POLICY:

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It has been communicated to the Directors and employees of the Company.

The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at the web link: http://astronpaper.com/wp-content/uploads/2017/08/Whistle-Blower-Policy.pdf.

CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

All the related party transactions that were entered during the financial year were on arms length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel or other designated persons etc. which may have potential conflict with the interest of the Company at large or which requires the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC- 2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Companys financial statements in accordance with the Accounting Standards.

All the Related Party Transactions were placed before the Audit Committee and also before the Board for its approval. Prior omnibus approval was obtained for the transactions which are of a foreseen and repetitive in nature. A statement of all related party transactions are placed before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has framed a Related Party Transactions policy for the purpose of identification and monitoring of such transactions. The policy on materiality of related party transactions as approved by the Board and may be accessed on the Companys website at web link: http:// astronpaper.com/wp-content/uploads/2018/01/ Material-Related-Party-Transaction-Policy-1.pdf.

POLICY RELATING TO PREVENTION OF SEXUAL HARASSMEN:

Your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provision of the Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made there under.

Further, the Company has Internal Complaints Committee for various locations of the Company in compliance with the above mentioned Act and Rules.

During the financial year 2018-19, there was no complaint / case of sexual harassment and hence no complaint remains pending as on 31st March, 2019.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS:

There are no significant and material orders passed by any regulator or court or tribunal impacting the going concern status and your Companys operations in future.

DETAILS OF FRAUDS REPORTED BY THE AUDITORS:

During the year under review, neither the Statutory Auditor nor the Secretarial Auditor have reported to the Audit Committee under Section 143 (12) of the Companies Act, 2013 any instances of fraud committed against the Company by its officers or employees.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/instances on these items during the year under review:

a) There has been no material change in the nature of business during the year under review.

b) Issue of equity shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme.

c) There were no events to report that has happened subsequent to the date of financial statements and the date of this report.

d) Neither the Managing Director nor the Whole Time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

38. APPRECIATIONS:

Your Company has maintained healthy, cordial and harmonious industrial relations at all levels. Your Directors wish to place on record their sincere appreciation for significant contributions made by the employees through their dedication, hard work and commitment towards the success and growth of your Company. Your Directors take this opportunity to place on record their sense of gratitude to the shareholders, dealers, distributors, consumers, Banks, Financial Institutions, Central and State Government Departments, their Local Authorities and other agencies working with the Company for their guidance and support. The Directors look forward to the continued support of all stakeholders in future also.

Date: 03-08-2019 For and on behalf of the Board,
Place: Ahmedabad Shri Kirit Patel,
Chairman & Managing Director
DIN: 03353684