BOARD'S REPORT & MANAGEMENT DISCUSSION AND ANALYSIS To the members, The directors submit annual report of Asia Pack Limited (the "Company" or "APL") along with the audited financial statements for the financial year (FY) ended March 31, 2016. Consolidated performance of the Company and its subsidiaries has been referred to wherever required. The Management Discussion and Analysis is also included in this Report. 1. CORPORATE OVERVIEW: Asia Pack Limited ("Your Company") is a well known name in packaging and paper industry, with interests in real estate sector. The Company has its registered office at 3rd Floor, Miraj House, Udaipur, Rajasthan, India, PIN - 313 001. 2. ECONOMIC SCENARIO AND OUTLOOK / DEVELOPMENTS/OVERVIEW OF THE ECONOMY: The world economy stumbled in 2015, amid weak aggregate demand, falling commodity prices and increasing financial market volatility in major economies. The world economy is projected to grow by 2.9 percent in 2016 and 3.2 percent in 2017, supported by generally less restrictive fiscal and still accommodative monetary stances worldwide. With a much anticipated slowdown in China and persistently weak economic performances in other large developing and transition economies—notably Brazil and the Russian Federation—the developed economies are expected to contribute more to global growth in the near term, provided they manage to mitigate deflationary risks and stimulate investment and aggregate demand. The Reserve Bank of India in its first monetary policy statement of 2016-17 has stated that growth rate for 2016-17 shall be 7.6%. The reduction in small savings rates announced in March 2016, the substantial refinements in the liquidity management framework and the introduction of the marginal cost of funds based lending rate (MCLR) should improve transmission and magnify the effects of the current policy rate cut. The stance of monetary policy will remain accommodative. The current emphasis on 'Make in India', investments in accelerating development of transport infrastructure, pro-reform approach and efforts at fiscal rationalization are all positive indicators and your Company is optimistic that the economy will pick up with a lag. The fundamentals of the Indian economy continue to be good and there is sufficient reason to believe in the growth potential. However, execution of the reforms agenda and being able to restart the investment cycle will have a major bearing on India's economic performance. 3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE / DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE / RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS: During the year under review, the business activities of the company were limited to the trading of paper and paper products and other income. On standalone basis, in spite of adverse market condition, your company has generated total revenue to the tune of Rs. 3249.82 Lacs in compare to previous year Rs. 1669.88 Lacs from operations including other income. Company has managed to earn a net profit of Rs. 48.79 Lacs during the financial year under review compared to losses of Rs. 1.53 Lacs in previous financial year. On unconsolidated basis, company generated revenue from operations for FY 2015-16 was Rs. 3249.82 Lacs and managed to earn a net profit of Rs. 48.79 Lacs. 4. CHANGE IN THE NATURE OF BUSINESS: There is no change in nature of business of the Company during the year under review. 5. DIVIDEND AND RESERVES: Company has not recommended any dividend during the year under review, nor transferred any amount to General Reserve. 6. SHARE CAPITAL: The paid up Equity Share Capital as at March 31, 2016 stood at Rs. 2.73 crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company. 7. PAPER INDUSTRY OUTLOOK, RISKS, OPPORTUNITIES AND THREATS: The paper industry in India has become more promising as the domestic demand is on the rise. Increasing population and literacy rate, improvement in manufacturing sector and lifestyle of individuals are expected to account for the growth in the paper industry of India. The paper industry in India is growing in a rapid speed with demand increment and opportunity creation and attraction to the international players. The forecasted demand of Indian paper is 10 million tons and 33 percent of this demand is for P&W papers. Even though India has covered 15% of population in world, the paper consumption levels stands at very low which is 3 to 5 percent. The leading global paper manufacturers are gaining nearly 5% on average and it stands at 8% approximately among Asia. However, for Indian market it is 12% or above which sounds very lucrative for Indian paper industry. There should be impact on the printing paper industry in India which is significant but unfortunately in India it is less. The key challenges to be met is market conditions which are poor and technology obsolete, lacking ability in achieving economy scale and lack of skilled labor. Enabling a overall management and the holistic change which can incorporate a better standards for the organizational efficiency. 8. HUMAN RESOURCES It is your company's belief that people are at the heart of corporate & constitute the primary source of sustainable competitive advantage. The trust of your company's human resource development efforts therefore is to create a responsive and market driven organization. Your company continues its focus on strengthening competitiveness in all its business. Your directors look forward to the future with confidence. The company has followed a conscious policy of providing training to Management Staff through in-house and external programme, for upgrading personal and technical skills in relevant areas of functional disciplines. Industrial relations remained cordial and harmonious during the year under review. At the close of the year, the company had 8 permanent employees, as against 3 in the previous year. 9. FINANCE AND ACCOUNTS: Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for the year ended March 31, 2016. A Cash Flow Statement for the year 2015-16 is included in the annexed Statement of Accounts. 10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES: There were no subsidiaries, joint ventures and associate companies at the beginning of the year under review. One (1) company was became and ceased to be an associate company during the year under review. As on 31st March, 2016, we have one (1) wholly owned subsidiary namely Rhyah Tradex Private Limited and there are no associate companies or joint venture companies within the meaning of section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. During the year, the Board of Directors ("the Board") reviewed the affairs of the subsidiary. In accordance with section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company, which forms part of this Annual Report. Further, a statement containing salient features of the financial statements of our subsidiary in prescribed format AOC-1 is appended as Annexure - A to this report. In accordance with section 136 of the Companies Act, 2013, the audited financial statements of the Company, including consolidated financial statements and related information of the Company and audited accounts in respect of subsidiary, are available on the website of the Company viz. www.asiapackltd.com . These documents will also be available for inspection during business hours at out registered office in Udaipur, India. 11. DEPOSITS: The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. Further Company has not received any money from the Director(s) during the year under review. 12. CORPORATE GOVERNANCE REPORT AND CERTIFICATE: As required under Regulation 34 (3) read with Schedule V (C) of the Listing Regulations a report on Corporate Governance and the certificate as required under Schedule V (E) of the Listing Regulations from M/s Jain Nilesh and Company, Statutory Auditors of the Company, regarding compliance of conditions of Corporate Governance are attached, which forms part of this report. 13. EXTRACT OF ANNUAL RETURN: Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 and Rules framed thereunder, an extract of Annual Return as on 31 March, 2015 in the prescribed Form No. MGT-9 is annexed to this Report as Annexure - B, which forms part of this report. 14. DIRECTORS & COMMITTEES: Pursuant to the provisions of section 149 of the Companies Act 2013, Mr. Kulbir Singh Pasricha (DIN 06767577) and Mr. Sunil Upadhayay (DIN 06767593) were appointed as independent directors at the annual general meeting of the Company held on 30th September, 2014 and Mrs. Prabhjeet Kaur (DIN 07136767) was appointed as independent directors at the annual general meeting of the Company held on 30th September, 2015. They have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. In accordance with the provisions of Section 152 of the Companies Act 2013, Mr. Prakash Chandra Purohit retires by rotation and being eligible has offered himself for re-appointment at the forthcoming Annual General Meeting. During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company. a. Key Managerial Personnel: Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are - Mr. Jitender Purohit, Chief Executive Officer (CEO), Mr. Mr. Revant Purbia, Chief Financial Officer (CFO) and Mr. Ashok Ranjan Mishra, Company Secretary (CS). There has been no change in the key managerial personnel during the year. b. Meetings: Four meeting of the board were held during the year under review. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. The provisions of Companies Act, 2013, Secretarial Standard and listing agreement were adhered to while considering the time gap between two meetings. c. Board Evaluation: The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations"). The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role. In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated. d. Audit Committee: The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. e. Nomination And Remuneration Committee: The details pertaining to composition of nomination and remuneration committee are included in the Corporate Governance Report, which forms part of this report. f. Policy on directors' appointment and remuneration (Remuneration And Nomination Policy ) and other details: The Company's policy on directors' appointment and remuneration and other matters provided in section 178(3) of the Companies Act 2013 has been disclosed in the corporate governance report, which forms part of this report. g. Stakeholders Relationship Committee: The details pertaining to composition of stakeholders relationship committee are included in the Corporate Governance Report, which forms part of this report. h. Vigil Mechanism / Whistle Blower Policy: The Company has established a vigil mechanism / whistle blower policy and overseas through the committee, the genuine concerns or grievances expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of the employees and the Company. The Whistle Blower policy has been posted on the website of the Company viz. <http://asiapackltd.com/images/> media/media0921700105.pdf 15. DIRECTORS RESPONSIBILITY STATEMENT: To the best of knowledge and belief and according to the information and explanations obtained, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013. Your Directors state that: (a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; (b) the Directors have selected such accounting policies and applied them 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 as at March 31, 2016 and of the profit of the Company for the year ended on that date; (c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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 to be followed by the company and that such internal financial controls are adequate and are operating effectively; and (f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees,including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2015-16. 16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY: The particulars of loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the notes to Financial Statements. 17. RELATED PARTY TRANSACTIONS: All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and also to the Board for approval. Omnibus approval was obtained for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are reviewed by the Audit Committee and a statement giving details of all Related Party Transactions are placed before the Audit Committee and Board for review and approval. The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. None of the Directors has any pecuniary relationship or transactions vis-à-vis the Company. Particular of Contracts or Arrangements with Related parties referred to in Section 188 (1) in Form AOC- 2 is enclosed to this report in Annexure - C and the same forms part of this report. 18. AUDITORS: a. STATUTORY AUDITORS: M/ s. Vinod Singhal & Co., Chartered Accountants (Firm Registration No. 005826C), Jaipur, is proposed/ recommended to be appointed as Statutory Auditors of the Company by the Board after considering recommendations of the Audit Committee to fill the casual vacancy caused due to the resignation of M/s Jain Nilesh and Company, Chartered Accountants (Firm Registration No. 018943C) Udaipur, from the conclusion of this 31st Annual General Meeting for a term of one year until the conclusion of 32nd Annual General Meeting of the Company. Consent and certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if made by the members at ensuing Annual General Meeting, would be according to the terms and conditions prescribed under Section 139 of the Act and Rules framed thereunder. A resolution seeking their appointment forms part of the notice convening the 31st Annual General Meeting and the same is recommended for your consideration and approval. b. SECRETARIAL AUDITORS: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. B. L. Harawat & Associates, a firm of Company Secretaries in Practice (Membership No. 6098) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - D and forms an integral part of this Report. c. INTERNAL AUDITORS: Mr. Abhishek Gelra, Proprietor of M/s. Abhishek Gelra & Associates, Chartered Accountants, Rajsamand, (Firm Registration No. 021265C), a qualified Chartered Accountant performs the duties of internal auditors of the company and his report is reviewed by the audit committee from time to time. 19. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: There were no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective reports. Observations made in the Auditor's Report are self-explanatory and therefore do not call for any further comments under Section 134(1) of the Companies Act, 2013. 20. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT: No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which these financial statements relate on the date of this report. 21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. M/s Jain Nilesh and Company, the statutory auditors of APL has audited the financial statements included in this annual report and has issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act 2013). The internal and operational audit is entrusted to Mr. Abhishek Gelra, a qualified Chartered Accountant. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken, if any. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee. Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), our audit committee has concluded that, as of March 31, 2016, our internal financial controls were adequate and operating effectively. 22. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY / RISKS AND CONCERNS: The Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company through Audit Committee. 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. 23. REPORTING OF FRAUDS: There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and /or Board under Section 143(12) of the Act and Rules framed thereunder. 24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The provisions of Section 134 (3) (m) of the Companies Act, 2013 do not apply to our Company. There was no foreign exchange inflow or Outflow during the year under review. 25. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES: The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. 26. 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 given separately as Annexure - E and forms an integral part of this Report. None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company. 27. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. As required under law, an Internal Compliance Committee has been constituted for reporting and conducting inquiry in to the complaints made by the victim on the harassments at the work place. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16. > No of complaints received : NIL > No of complaints disposed off : Not Applicable 28. LISTING AGREEMENTS: Your Company has entered into new Listing Agreements with BSE Limited in compliance with Regulation 109 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended by SEBI. 29. BUSINESS RESPONSIBILITY REPORT: The Business Responsibility Reporting as required by regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to your Company for the financial year ending March 31, 2016. 30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS: There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations. 31. CAUTIONARY STATEMENT: Statements in this Directors' Report & Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and pricing in the Company's principle markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors. 32. APPRECIATION: Your Company has completed 31 eventful years of its existence in this Country. Very few brands continue to remain relevant and become iconic over such a long passage of time. Your Directors are proud of this rich heritage and thank all our stakeholders who have contributed to the success of your Company. Your Directors wish to place on record their appreciation, for the contribution made by the employees at all levels. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company. By Order of the Board of Directors For Asia Pack Limited Sd/- Prakash Chandra Purohit Director DIN : 01383197 Sd/- Revant Purbia Director DIN : 02423236 Date: 12th July, 2016 Place: Nathdwara |