Your Directors have pleasure in presenting the 22nd Annual Report of your Companytogether with the Audited Financial Statement for the year ended 31st March 2017.
FINANCIAL SUMMARY AND HIGHLIGHTS
The Company's financial performance for the year ended on 31st March 2017 issummarised below:
( Rs. in Lacs)
| ||Standalone Results |
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Gross Turnover and other receipts ||102322.15 ||95549.80 |
|Profit before Interest and Depreciation ||8183.18 ||7106.03 |
|Less: Interest ||2091.34 ||2375.23 |
|Profit Before Depreciation ||6091.84 ||4730.80 |
|Less: Depreciation ||2198.17 ||2122.30 |
|Profit Before Tax ||3893.67 ||2608.50 |
|Less: Provision for taxation ||1097.47 ||715.30 |
|Profit After Tax ||2796.20 ||1893.20 |
|Balance brought forward from previous year ||21540.57 ||18978.44 |
|Balance carried to Balance Sheet ||24155.70 ||21540.57 |
FINANCIAL HIGHLIGHTS & STATE OF AFFAIRS OF THE COMPANY
Your Company registered 8.85% growth in net sales from Rs. 87072.75 lacs in2015-16 to Rs. 94779.45 lacs in 2016-17. Earnings before interest depreciation and tax(EBIDTA) increased by 15.16% from Rs. 7106.03 lacs in 2015-16 to Rs. 8183.18 lacs in2016-17 due to increased sales of value-added tiles cost optimization arising from shopfloor efficiencies. The profit after tax grew by 47.70% from Rs. 1893.20 lacs in 2015-16to Rs. 2796.20 lacs in 2016-17. The earnings per share (basic) increased from Rs. 6.71 in2015-16 to Rs. 9.29 in 2016-17.
CONSOLIDATED OPERATING RESULTS
The consolidated sales and operating income increased to Rs. 106595.13 lacs from Rs.99390.01 lacs in the previous year showing a growth of 7.25%. The consolidated EBIDTAmargin for the year was Rs. 12712.05 lacs as against Rs. 9167.50 lacs in previous yearregistering growth of 38.6%. The consolidated net profit increased to Rs. 3911.45 lacsfrom Rs. 2425.90 lacs in the previous year registering a growth of 61.24%.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company are prepared in accordance withthe provisions of section 129 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 and under the SEBI (LODR) Regulations 2015 and forms the part ofthis Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
The details of operating performance of the Company for the year the state of affairsand the key changes in the operating environment have been analysed in the ManagementDiscussion and Analysis section which forms a part of the Annual Report.
TRANSFER TO RESERVES
No amount has been transferred to General Reserve Account during the year under review.
The Authorised Equity Share Capital of the Company consist of 36250000 (P.Y. 31250000)equity shares of Rs. 10/- each as 5000000 equity shares are included on account ofAmalgamation of erstwhile Artistique Ceramics Private Limited transferor company andissued subscribed and paid up Equity Share Capital consist of 30087446 (P.Y. 22582541)equity shares of Rs. 10/- each fully paid up as 7504905 equity shares are issued onaccount of Amalgamation of erstwhile Artistique Ceramics Private Limited transferorcompany.
Interim dividend of Rs. 0.50 per equity share of face value of Rs.10/- amounting to Rs.150.44 lacs was paid to the shareholders during the year under review. Further the Boardhas recommended a final dividend of Rs. 0.80 per equity share amounting to Rs. 240.70 lacsfor approval to shareholders at the 22nd Annual General Meeting of the Company. The totaldistribution towards dividend of Rs. 1.30 per equity share of face value of Rs. 10/- each.As a part of Good Corporate Governance practice the Company has adopted a DividendDistribution policy which is available on the website of the Companywww.aglasiangranito.com.
Adapting to change is quintessential to a growing organization's longevity. Over thetime Company has changed to adapt and evolve with the changing economic landscape whilekeeping its core values firmly entrenched.
The Human Resource Department has strategic and functional responsibilities for all ofthe Human Resource disciplines in this changing scenario. There are four correspondingroles for Human Resource:
(a) as a strategic partner working to align Human Resource and business strategy
(b) as an administrative expert working to improve organizational processes and deliverbasic Human Resource services
(c) as an employee champion listening and responding to employees' needs and
(d) as a change agent managing change processes to increase the effectiveness of theorganization.
Within organization Human Resource Department has active engagement with employeeissues listening to their concerns and building a professional and stable relationbetween employees and employers. Managing expectations being flexible communicating andadequate training are few of the most significant factors in keeping employees contented.Human Resource Department conducts performance appraisals career development and upskilling developing effective reward systems and designing jobs to fit both the needs ofthe business and employees.
On the Industrial front the Company continued to foster cordial Industrial Relationswith its workforce during the year. The Company has a diverse workforce of 2376 employeesas on 31st March 2017 vis--vis 1909 employees as on 31st March 2016. Going forwardthe Company will continue to focus on nurturing the right talent to achieve the businessgoal.
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015a Vigil Mechanism or Whistle Blower Policy' for directors employees and otherstakeholders to report genuine concerns has been established. The Audit committee reviewsthe functioning of the Whistle Blower mechanism on a quarterly basis. The same is uploadedon the website of the Company https://www. aglasiangranito.com/investor-relation
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013
The Company has in place a Prevention of sexual harassment policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013.
Internal Complaints Committee has been set up to redress complaints received regardingsexual harassment. All employees (permanent contractual temporary trainees) are coveredunder this policy. We have not received any sexual harassment complaints during the year2016-17.
The Company has formalised Risk Management system by formulating and adopting RiskManagement Policy to identify evaluate monitor and minimize the identifiable businessrisk in the Organisation. This is an ongoing process and the Audit Committee periodicallyreviews all the risk and suggests the necessary steps to mitigate the risk if any whichmay threaten the existence of the Company.
There is no such risk which in the opinion of the Board may threaten the existence ofthe Company.
ENVIRONMENT HEALTH & SAFETY
We believe that Environment Health and Safety (EHS) are essential and paramountpillars for sustainable growth of our business.
We have developed policies and guidelines which take our EHS compliance beyond theregulatory requirements. The policies also ensure consistent and continuous implementationof the EHS requirements throughout the Company.
A responsibility towards the environment is part of our mandate. We continuouslyendeavour to minimize adverse environmental impact and demonstrate our commitment toprotect the environment.
During the year all our manufacturing sites remained compliant with applicable EHSregulations.
HOLDING SUBSIDIARIES ASSOCIATE JOINT VENTURE COMPANIES AND THEIR PERFORMANCE
During the year under review Powergrace Industries Limited has become subsidiary ofAGL Industries Limited which is wholly owned subsidiary of your Company. Hence PowergraceIndustries Limited has become step down subsidiary of your Company.
A report on performance and financial position (Form AOC-1) of each of thesubsidiaries Associates and Joint Venture as per the Companies Act 2013 is provided asAnnexure-A.
The annual accounts of the Subsidiary Companies will be made available to any Member ofthe Company seeking such information at any point of time and are also available forinspection by any Member of the Company at the Registered Office of the Company on anyworking day during business hours up to the date of the Annual General Meeting. The annualaccounts of the Subsidiary Companies are also available on the website of the Company athttps://www.aglasiangranito.com/ investor-relation
RELATED PARTY TRANSACTIONS
For all related party transactions prior omnibus approval of the Audit Committee isobtained on a yearly basis for the transactions which are of a foreseen and repetitivenature and such approval is in the interest of the Company. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their approval. All related parties transactions are disclosed in note 43 tothe financial statements. In accordance with the related party transaction policy of theCompany and pursuant to the provisions of Section 188(1) of the Companies Act 2013 andRule 8(2) of the Companies (Accounts) Rules 2014 particulars of all contracts and/orarrangements entered between the Company and the related parties are annexed herewith inform AOC-2 annexed as Annexure- B.
The Related Party Transaction Policy as approved by the Board is uploaded on theCompany's website i.e. https://www. aglasiangranito.com/investor-relation
Your Company has not accepted any deposits from the public within the meaning ofSection 73 and 74 of the Companies Act 2013 and read with the Companies (Acceptance ofDeposits) Rules 2014 for the year ended 31st March 2017.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS
Details of Loans granted Guarantees given and Investments made during the year underreview covered under the provisions of Section 186 of the Companies Act 2013 are givenin the note no. 12 and 13 to the Financial Statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company believes that a strong internal control framework is necessary for businessefficiency management effectiveness and safeguarding assets. The Company has awell-defined internal control system in place which is designed to provide reasonableassurance related to operation and financial control. The Management of the Company isresponsible for ensuring that Internal Financial Control has been laid down in the Companyand that controls are adequate and operating adequately.
The audit scope mythology to be used reporting framework is defined in charter of theInternal Audit which is approved by the Audit Committee of the Board of Directors. TheInternal Auditors evaluates the efficacy and adequacy of internal control system itscompliance with operating systems and policies of the Company and accounting procedures atall the locations of the Company. Based on the report of the Internal Auditors processowners undertake corrective action in their respective areas and thereby strengthen thecontrols. Significant audit observations and corrective actions thereon are placed beforethe Audit Committee of the Board. The Internal Audit also continuously evaluates thevarious processes being followed by the Company and suggests value addition to strengthensuch processes and make them more effective.
I NTERNAL CONTROLS WITH RESPECT TO FINANCIAL STATEMENTS
The Company has an adequate system of internal financial control in place withreference to financial statements. The Company has policies and procedures in place forensuring proper and efficient conduct of its business the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.
The Company's plant property equipments and stocks are adequately insured againstmajor risks. The Company also has appropriate liability insurance covers particularly forproduct liability and clinical trials. The Company has also taken Directors' and Officers'Liability Policy to provide coverage against the liabilities arising on them.
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Bhogibhai B. Patel (holding DIN: 00300345) will retire byrotation at the ensuing Annual General Meeting and is eligible for re-appointment. Duringthe year Mr. Maganlal Prajapati (holding DIN: 00564105) and Mr. Shankarlal Patel (holdingDIN: 02179603) has resigned on 25th January 2017 and Mr. Hemendrakumar C. Shah (holdingDIN: 00077654)and Dr. Satish Deodhar (holding DIN: 07766673) has been appointed asAdditional Independent Director on 20th March 2017 subject to approval of members in theensuing Annual General Meeting.
All Independent Directors (IDs) have given declaration that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Thedetails terms of appointment of IDs are disclosed on the Company's website with followinglink http:// aglasiangranito.com/index.php/ investor-relation
MEETINGS OF THE BOARD
During the year eight Board Meetings and one Independent Directors' meeting was heldthe details of which are given in Corporate Governance Report. The provisions of CompaniesAct 2013 and SEBI (LODR) Regulations 2015 were adhered to while considering the time gapbetween two meetings. Details of the number of Board Meeting held during the year formspart of the Corporate Governance Report.
COMMITTEES TO THE BOARD
In compliance with the requirement of applicable laws and as part of best governancepractices the Company has following Committees of the Board as on 31st March 2017:
i. Audit Committee
ii. Stakeholders Relationship Committee
iii. Nomination and Remuneration Committee
iv. Corporate Social Responsibility Committee
v. Administrative Committee
The details with respect to the aforesaid Committees forms part of the CorporateGovernance Report.
FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying them in their appointment letter along withnecessary documents reports and internal policies to enable them to familiarise with theCompany's procedures and practices. The Company endeavours through presentations atregular intervals to familiarize the Independent Directors with the strategy operationsand functioning of the Company. Site visits to various plant locations are organized forthe Directors to enable them to understand the operations of the Company.
The Independent Directors also met with senior management team of the Company ininformal gatherings.
The details of such familiarization programmes for Independent Directors are posted onthe website of the Company and can be accessed athttps://www.aglasiangranito.com/investor-relation
BOARD PERFORMANCE EVALUATION
Pursuant to the provisions of companies Act 2013 and SEBI Listing regulations theBoard has carried out annual performance evaluation of its own performance its Committeesand the Directors including Chairman.
The evaluation manner has been carried out and has been explained in the CorporateGovernance Report.
KEY MANAGERIAL PERSONNEL
There was no change in the Key Managerial Personnel during the year under review.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of section 135 of the Companies Act 2013 theCompany has laid down a CSR policy. The contributions in this regard have been also madeto the Arham Yuva Seva Group which is engaged in activities in various fields likeEducation Healthcare Support Orphanage- Ashram Animal welfare and Arham Aahar (Food) toneedy persons help in natural calamity etc. The composition of the committee contents ofCSR policy and report on CSR activities carried out during the financial year ended 31stMarch 2017 in the format prescribed under Rule 9 of the Companies (Accounts) Rules 2014is annexed herewith as Annexure C forming part of this report.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(3)(c) of the Act 2013 in relation tofinancial statements of the Company for the year ended 31st March 2017 the Board ofDirectors state that:
i) In the preparation of the annual accounts for the year ended on 31st March 2017the applicable accounting standards have been followed and that no material departureshave been made from the same;
ii) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2017 and the profit and cash flowof the Company for the period 31st March 2017;
iii) Proper and sufficient care has been taken 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;
iv) The annual accounts have been prepared on a going concern basis;
v) The Company is following up the proper Internal financial controls and such internalfinancial controls are adequate and are operating effectively; and vi) The Company hasdevised proper system to ensure the Compliance with the provisions of all the applicablelaws and that such systems are adequate and operating effectively.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. Details of Remuneration under Section 197(12) of the Companies Act 2013 anddetails required under Rule 5(1) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014 are also stated in Annexure - D which forms part of thisreport.
AUDITORS a) Statutory Auditors
A. L. Thakar and Associates Chartered Accountants (Firm Registration No. 120116W)Statutory Auditors of the Company along with their network of firms of CharteredAccountants has completed more than 10 years as Statutory Auditors of your Company.Considering the requirements of Section 139(2) of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the Board of Directors of the Company at theirmeeting held on 10th August 2017 based on the recommendation of the Audit Committeehave made its recommendation for appointment of Manubhai and Shah LLP CharteredAccountants (Firm Registration No. 106041W/W100136) as the Statutory Auditors of theCompany by the Members at the 22nd Annual General Meeting of the Company for a term offive consecutive years i.e. from the conclusion of 22nd Annual General Meeting till theconclusion of 27th Annual General Meeting of the Company subject to ratification ofappointment for each year by shareholders at Annual General Meeting pursuant to Section139 of the Companies Act 2013. Accordingly a resolution proposing to the aforesaidappointment of M/s. Manubhai and Shah LLP as the Statutory Auditors of the Company formspart of the Notice of the 22nd Annual General Meeting of the Company. The Company hasreceived their written consent and a certificate that they satisfy the criteria providedunder Section 141 of the Act and that the appointment if made shall be in accordancewith the applicable provisions of the Act and rules framed thereunder.
b) Secretarial Auditor
The Board pursuant to Section 204 of the Companies Act
2013 read with Rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 including any statutory modification(s) or re-enactment thereofhad appointed M/s. Shilpi Thapar and Associates Company Secretaries as the SecretarialAuditors of the Company to conduct the Secretarial Audit as per the provisions of theCompanies Act 2013 for the year 2017-18 (Apr-17 to Mar-18). M/s. Shilpi Thapar andAssociates Company Secretaries have carried out the Secretarial Audit of the Company forFY2016-17 and the Report of Secretarial Auditors in Form MR-3 is annexed with this Reportas Annexure-E. The Company will take steps to ensure the compliances on observations ofSecretarial Auditors given in their Secretarial Audit Report.
During the year pursuant to SEBI (Listing Obligations and Disclosures Requirement)Regulations 2015 the Company has complied with applicable provision of CorporateGovernance and a separate report of Corporate Governance is included as a part of AnnualReport along with requisite certificate from M/s. A.L. Thakkar & Co. CharteredAccountants confirming compliance with the conditions of corporate governance is attachedto the Report on Corporate Governance.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return required under Section 134(3)(a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 inForm MGT-9 forms part of this report as Annexure-F.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as Annexure G.
PARTICULARS OF EMPLOYEES
Your Company does not have any employee drawing remuneration exceeding Rs. 1.02 croresper annum or Rs. 8.50 lacs per month for any part of financial year 2016-17 pursuant to
Section 197 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company.
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since 31st March 2017.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 532888 and on National Stock Exchange of India Limited (NSE) with scrip code ofASIANTILES. The Company confirms that the annual listing fees to both the stock exchangesfor the financial year 2017-18 have been paid.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
Your Directors thanks all Customers Investors Vendors Bankers Auditors Consultantsand Advisors for their continued support during the year. We also place on record ourappreciation of the contributions of employees at all levels. Your Directors thanksGovernments of various countries where we have our operations especially Government ofIndia and its various Ministries.
Your Directors look forward for their continued support in the future for theconsistent growth of the Company.
| ||For and on behalf of the Board |
| ||Kamleshbhai B. Patel |
|Place: Ahmedabad ||Chairman and Managing Director |
|Date: 10.08.2017 ||DIN: 00229700 |