Your Directors are pleased to present the Twenty-Third Annual Report on the Businessand Operations of your Company together with the Audited Statement of Accounts for theyear ended March 312017.
Financial Results (Rs. in Crores)
| ||2016-2017 ||2015-2016 |
|Total Sales ||2696.52 ||2372.62 |
|Add: Other Income ||8.13 ||1.72 |
|Total Income ||2704.65 ||2374.34 |
|Less: Total Expenditure ||2597.03 ||2284.31 |
|Operating Profit (PBDIT) ||67.47 ||90.03 |
|Less: Interest and Depreciation ||107.62 ||33.34 |
|Profit before Exceptional Items and Tax ||40.15 ||56.69 |
|Exceptional Items - Income / (Loss) ||(0.44) ||(0.86) |
|Profit before Tax ||67.03 ||55.83 |
|Provision for Tax ||22.76 ||20.81 |
|Provision for Deferred Tax ||(0.21) ||(5.14) |
|Profit after Tax ||44.48 ||40.16 |
|Open Comprehensive Income ||(1.74) ||(2.03) |
|Total Comprehensive Income ||42.74 ||38.13 |
Performance of the Company
Company reported a top-line growth of 13.65% over the Previous Year with sales of Rs.2696.52 crores against that of Rs. 2372.62 crores in previous year. The Company's Profitafter tax excluding exceptional items is Rs. 44.92 crores that of Rs. 41.02 crore inprevious year an increase of 9.50% over the previous year.
Change in the nature of business if any
There is no change in the nature of business of your Company during the year underreview.
Material changes and commitments if any affecting the financial position of theCompany
No material changes and commitments have occurred after the close of the financial yeartill the date of this Report which affect the financial position of the Company.
Your Directors are pleased to recommend a dividend of Rs. 1.50 per Equity Share ofRs.10/- each for the financial year ended March 31 2017 subject to the approval of themembers on September 28 2017. Equity Dividend if approved will be paid to those memberswhose name appear on the Register of Members as at the end of business hours on September212017.
Transfer to reserve
The Company proposes to transfer Rs. 2 crores to the General Reserve out of amountavailable for appropriations and an amount of Rs. 39.43 Crores is proposed to be retainedin the Profit and Loss Account.
As a part of its social commitments and endeavor to carry out operations in a moresustainable manner the Company has always been inclined to promote a cleaner and greenerenvironment. The Company has been pursuing generation of energy from wind power throughestablishment of Wind Turbine Generators (WTGs) since 2006. The Company's windmills arelocated in the state of Maharashtra Tamil Nadu & Kerala. During the year 2016-17 theCompany has generated 215 lacs kwh resulting in the sales of Rs. 706 lacs.
Details of significant and material orders passed by the regulators/courts/tribunalsimpacting the going concern status and company's operations in future
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
Adequacy of internal financial controls with reference to the financial statements
Your Company has adequate systems and processes of internal controls which arecommensurate with its size and nature of operations. They have been designed to providereasonable assurance with regard to recording and providing reliable financialinformation complying with applicable statutes safeguarding of assets authorization oftransactions and adherence to the Company's policies and practices. The internal controlsand governance process are duly reviewed for their adequacy and effectiveness throughperiodic audits by Internal Auditor. A report on internal financial controls is providedin Annexure B to Independent Auditor's Report.
Details of Subsidiary Companies/Joint Ventures/Associate Companies
Your Company has four wholly owned subsidiaries and one associate company. Theseconsist of:
1. Asian Star Jewels Private Ltd.
2. Asian Star DMCC
3. Asian Star Co. Ltd. (USA)
4. Asian Star Trading (Hong Kong) Ltd.
5. Shah Manufacturers
Out of the above Asian Star Jewels Private Limited is wholly owned Indian subsidiarycompany and rest three companies' viz. Asian Star DMCC Asian Star Co. Ltd (USA) AsianStar Trading (Hong Kong) Ltd are wholly owned foreign subsidiary companies of Asian StarCompany Ltd. Shah Manufacturers is a partnership firm which falls under the category ofassociate company.
There has been no material change in the nature of business of the subsidiaries.
In terms of proviso to sub section (3) of Section 129 of the Companies Act 2013 (henceforth refferd to as "the Act") the salient features of the financial statementof the subsidiaries and the associate company is set out in the prescribed form AOC-1which forms part of the annual report. Performance and financial position of thesubsidiary companies and the associate company is given in Annexure - A
Consolidated financial statements
The Consolidated Financial Statements of the Company its subsidiaries and associatecompany are prepared in accordance with Indian Accounting Standards notified under theCompanies (Indian Accounting Standards) Rules 2015 (Ind AS') form part of theAnnual Report and are reflected in the Consolidated Financial Statements of the Company.
Up to the year ended March 31 2016 the Company prepared its Financial Statements inaccordance with generally accepted accounting principles in India including accountingstandards read with Section 133 of the Act notified under the Companies (AccountingStandards) Rules 2006 ('Previous GAAP'). These are the Company's first Ind AS FinancialStatements.
Your Company has not accepted any deposits during the financial year under review.
V. A. Parikh & Associates LLP Chartered Accountants held office till theconclusion of the ensuing Annual General Meeting
In accordance with the provisions of Section 139 of the Act Mahendra Doshi &Associates Chartered Accountants (Firm Registration No. 105765W) are proposed to beappointed as auditors for a period of 5 years commencing from the conclusion of this AGMtill the conclusion of the 28h AGM of the Company to be held in 2022 subject toratification of their appointment at every AGM if so required under the Act.
Members are requested to approve the appointment of Mahendra Doshi & Associates andauthorize the Board of Directors to fix their remuneration.
Pursuant to the provisions of Section 138 of the Act read with Rule 13 of Companies(Accounts) Rules 2014 the Board of Directors of the Company had appointed SureshAnchaliya & Company to undertake the Internal Audit of the Company for the year endedMarch 312017.
The paid up capital of the Company as at March 312017 stood at Rs. 160068000/-Duringthe year under review the Company has not issued:
Equity Shares with differential rights
Sweat Equity Shares
Employee Stock Options
No provision of money was made by Company for purchase of its own shares by employeesor by trustees.
The Equity Shares of the Company are listed on BSE Limited. The Company has paidlisting fees for the year 2017-18.
Extract of Annual Return
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT 9 is annexed asAnnexure - B
Energy conservation Technology Absorption and Foreign Exchange Earnings and OutgoConservation of Energy
The activity of the Company does not require large-scale consumption of energy and theCompany is not covered in the list of industries required to furnish information relatingto conservation of energy nevertheless Company has been pursuing generation of energy fromwind power through establishment of Wind Turbine Generators (WTGs) since 2006. TheCompany's windmills are located in the state of Maharashtra Tamil Nadu & Kerala.
The Directors are in constant touch with ongoing research in the world to upgrade andabsorb improved technology for better line of products and to yield better quality costreduction and worldwide acceptability of its range of products.
Foreign Exchange Earnings and Outgo
The Company has earned Rs. 179961 lacs in foreign exchange by way of exports and hasspent Rs. 139504 lacs in foreign exchange for the imports of materials machinery &consumables foreign travel advertisement repairs and maintenance. The Directors aremaking their best endeavors to earn foreign exchange.
Corporate Social Responsibility (CSR)
Company has a CSR Policy which emphasising its focus on community development projectsprioritizing local needs in the area of education health livelihood and environment forensuring long term sustainable benefits. Detailed policy is available on our website:www.asianstargroup.com . CSR programs or projects to be undertaken by the Company in termsof this Policy shall relate to one or more activities listed in Schedule VII of the Actat present or as may be amended from time to time. The CSR Committee comprises of Mr.Arvind T. Shah Executive Director (Chairman) Mr. Dinesh T. Shah Chairman & CFO(Member) and Mr. Milind H. Gandhi Independent Director (Member).
As part of its initiatives under "corporate social responsibility" (CSR) thecompany has contributed funds for the schemes of promotion of education medical aideradicating hunger and malnutrition promoting special education and enhancing vocationalskills for employment especially among differently abled women benefit of Indian armedforces veterans war widows and their dependents rural development projects etc. Thecontributions in this regard have been made to various registered trust which areundertaking these schemes.
The Report on CSR activities is annexed herewith as: Annexure - C
Directors and Key Managerial Personnel
A. Key Managerial Personnel:
Mr. Dinesh T. Shah holds the position of Chairman and CFO while Mr. Vipul P. Shah isCEO & Managing Director and Ms. Aparna R. Shinde holds position of Company Secretaryof your Company.
In accordance with Companies Act 2013 and Articles of Association of the Company Mr.Priyanshu A. Shah and Mr. Arvind T. Shah retires by rotation at the ensuing Annual GeneralMeeting. Accordingly Mr. Priyanshu A. Shah and Mr. Arvind T. Shah based on their consentand eligibility are proposed for re-appointment. Their re-appointment forms a part of theNotice of the ensuing Annual General Meeting.
C. Board independence:
Our definition of 'Independence' of Directors is derived from Listing Regulations andSection 149(6) of the Act. The following Non-Executive Directors are Independent in termsof Listing Regulations and Section 149(6) of the Act:
1. K. Mohanram Pai
2. Hasmukh Gandhi
3. Apurva Shah
4. Milind Gandhi
5. M. R. Nayak
6. Neha Gada
D. Declaration by an Independent Director(s) :
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Act Regulation 16 (b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. In the opinion of theBoard they fulfil the conditions of independence as specified in the Act and the Rulesmade there under and are independent of the management.
Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors
Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual evaluation of its own performance performance of the Directors aswell as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteriaprocedure for the performance evaluation process for the Board its Committees andDirectors. Directors were evaluated on aspects such as attendance and contribution atBoard/ Committee Meetings and guidance/ support to the management outside Board/ CommitteeMeetings. Areas on which the Committees of the Board were assessed included degree offulfilment of key responsibilities adequacy of Committee composition and effectiveness ofmeetings.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole.
Familiarisation Programme/Training of independent directors
Your company have developed an orientation programme known as familiarisation programmewhich is for the benefit of every new independent director of the Board. To familiarizethe new inductee(s) with the strategy operations and functions of your Company theexecutive directors / senior managerial personnel make presentations to the inducteesabout the Company's strategy operations product and service offerings marketsorganization structure finance human resources technology quality facilities and riskmanagement. In addition the Company also keeps the Independent Directors updated on theevents and developments in the industry and business environment.
Number of meetings of the Board
The Board met four times during the financial year as held on May 19 2016 September13 2016 December 13 2016 and February 13 2017 the details of which are given in the"Report on Corporate Governance" that forms part of this Annual Report.
The intervening gap between two meetings was within the period prescribed by theCompanies Act 2013.
Committees of the Board
There are currently six Committees of the Board as follows:
Corporate Governance Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Nomination and Remuneration Committee
Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the "Report on Corporate Governance" a part ofthis Annual Report.
Vigil Mechanism/Whistle Blower Policy
Your Company Is committed to standards of ethical moral and legal business conduct.The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has been denied access to the AuditCommittee. The Policy as approved by the Board is uploaded on the Company's website:www.asianstargroup.com
Particulars of Loans Guarantees or Advances
Details of Loans Guarantees or Advances covered under the provisions of Section 186 ofthe Act are given in the notes to Financial Statement.
Related Party Transactions
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of
business and were in compliance with the applicable provisions of the ListingRegulations & the Act. There were no materially significant Related Party Transactionsmade by the Company during the year that would have required Shareholder approval underthe Listing Regulations.
All Related Party Transactions are placed before the Audit Committee for approval. Astatement of all Related Party Transactions is placed before the Audit Committee for itsreview on a quarterly basis specifying the nature value and terms and conditions of thetransactions.
The Company has adopted a Related Party Transactions Policy. The Policy as approved bythe Board is uploaded on the Company's website: www.asianstargroup.com
Particulars of Employees
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is appended asAnnexure - D to the Board's report.
Other information required pursuant to Section 197 read with Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting. If any Member is interestedin obtaining a copy thereof such Member may write to the Company Secretary in thisregard.
Secretarial Audit Report
Pursuant to the provisions of Section 204 read with Section 134(3) of the CompaniesAct 2013 the company is required to obtain Secretarial Audit Report from PracticingCompany Secretary. Mr. Yogesh D. Dabholkar proprietor of Yogesh D. Dabholkar & Co.Practising Company Secretary was appointed to issue Secretarial Audit Report for thefinancial year 2016-17. Secretarial Audit Report issued by Mr. Yogesh D. DabholkarPractising Company Secretary in Form MR-3 for the financial year 2016-17 forms part tothis report in Annexure-E. The said report contains observations as under-
1. The Company has complied with the provisions of section 135 of the Companies Act2013 pertaining to corporate social responsibility except section 135(5) relating to thespending of at least 2% of average net profits of the Company made during the threeimmediately preceding financial years in pursuant of company's CSR policy.
Directors response to the abovementioned observations in the Secretarial Audit Reportare as under:
The remaining amount has not spent due to the non availability of viable projects. TheCSR Committee was by then in process of identifying areas where it could contribute money.The Company has subsequently shortlisted certain projects though its committee for CSRand will expend the appropriate amount to facilitate the activity. Efforts would be madeto contribute more in the coming years.
2. The Company has granted loans unconditional and interest free to its Wholly OwnedSubsidiary Company.
Directors response to the abovementioned observations in the Secretarial Audit Reportare as under:
As a part of funding the Company had agreed to give interest free loan to Its whollyowned subsidiary and the said commitment continuous to make the wholly owned subsidiaryfinancially viable.
Risk management policy
The Company operates In conditions where economic financial and other risks areinherent to its businesses. To overcome this and as per requirement of the applicableprovisions of the Listing Regulations Board has formed a Risk Management policy toregulate the plan for the key risks faced by the Company. The Company has developed a verycomprehensive risk management policy under which all key risks are identified andcontrolled. The same is reviewed periodically by senior management and also by the Board.
Directors' Responsibility Statement
As required under Section 134(5) of the Companies Act 2013 the Directors herebyconfirm that:
(i) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures. If any.
(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profits of the Company for that period.
(iii) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) The Directors had prepared the annual accounts on a 'Going Concern' basis.
(v) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and
(vi) The Directors had devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Corporate Governance Report & Management Discussion and Analysis
Your Company has always been devoted to adopting and adhering to the best CorporateGovernance practices. The Company understands and respects its fiduciary role andresponsibility towards stakeholders and society at large and strives hard to serve theirinterests resulting in creation of value and wealth for all stakeholders.
As a listed company necessary measures are taken to comply with the ListingRegulations of the Stock exchange. A "Report on Corporate Governance" alongwith a certificate of compliance from the statutory auditors of the Company - V. A. Parikh& Associates LLP Chartered Accountants confirming compliance of conditions ofCorporate Governance as stipulated under Listing Regulations (erstwhile Listing Agreemententered into with the Stock Exchanges) and Management Discussion and Analysis Report aregiven separately in this report which forms a part of the Annual Report.
Documents placed on the website
The following documents have been placed on the website - www.asianstargroup.com incompliance with the Act:
1) Code of Conduct for Board of Directors and Senior Management
2) Terms & Conditions of Appointment of Independent Directors
3) Familiarization Program for Independent Directors
4) Whistle Blower Policy
5) Policy on Related Party Transactions
6) Investors Contact
7) Nomination & Remuneration Policy
8) Corporate Social Responsibility Policy
9) Composition of Board & Committees
10) Board Diversity Policy
11) Criteria for Making Payments to Non Executive Directors
12) Policy for Determination of Materiality of Events or Information
13) Policy for Determining Material Subsidiaries
14) Policy on Preservation of Documents and Archival Policy
As regard the items of the Notice of the Annual General Meeting relating to specialbusiness the resolutions incorporated in the Notice and the Explanatory Statementrelating thereto fully indicate the reasons for seeking the approval of members to thoseproposals.
Your attention is drawn to these items and Explanatory Statement annexed to the Notice.
The Company is availing working capital requirements from consortium of bankers.
Properties and assets of the Company are adequately insured.
Your Company treats its "human resources" as one of its most importantassets.
Your Company continuously invests in attraction retention and development of talent onan ongoing basis. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.
Disclosure as per Sexual Harassment of Women at workplace (Prevention Prohibition andRedressal) Act 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of
sexual harassment at workplace in line with the provisions of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthere under.
During the financial year 2016-17 the Company has not received any complaint on sexualharassment.
This report contains forward-looking statements which may be identified by their use ofwords like 'plans' 'expects' 'will' 'anticipates' 'believes' 'intends' 'projects'estimates' or other words of similar meaning. All statements that addressexpectations or projections about the future including but not limited to statementsabout the company's strategy for growth product development market positionexpenditures and financial results are forward - looking statements. Forward - lookingstatements are based on certain assumptions and expectations of future events. The companycannot guarantee that these assumptions and expectations are accurate or will be realized.
The company's actual results performance or achievements could thus differ materiallyfrom those projected in any such forward - looking statements. The company assumes noresponsibility to publicly amend modify or revise any forward - looking statements onthe basis of any subsequent developments information or events.
Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work solidarity cooperation anddedication during the year.
Your Directors sincerely convey their appreciation to shareholders customers vendorsbankers business associates regulatory and government authorities for their continuedsupport.
Place: Mumbai Dated : May 242017
Registered Office: 114-C Mittal Court Nariman Point Mumbai - 400 021.
For and on behalf of the Board
|Dinesh T. Shah ||Vipul P. Shah |
|Chairman & CFO ||CEO & Managing Director |
|DIN:00004685 ||DIN:00004746 |
ANNEXURE A TO DIRECTORS' REPORT FORM AOC -1
(Pursuant to first proviso to sub-section (3) of section 129 the Companies Act 2013read with Rule 5 of Companies (Accounts) Rules 2014) Statement containing salientfeatures of the financial statement of subsidiaries for the year ended March 312017.
(Rs. in Lacs)
|Particulars || |
Name of Subsidiary / Associate Company
| ||Asian Star Jewels Private Limited ||Asian Star Co. Ltd. (U.S.A.) ||Asian Star Trading (Hong Kong) Limited ||Asian Star DMCC ||Shah Manufacturers |
|Issued & Subscribed Capital ||120.81 ||178.75 ||204.76 ||62.23 ||- |
|Reserves ||2203.99 ||172.87 ||246.00 ||16845.42 ||* (286.55) |
|Total Assets ||8262.76 ||4769.30 ||14808.82 ||27765.76 ||570.51 |
|Total Liabilities ||8262.76 ||4769.30 ||14808.82 ||27765.76 ||570.51 |
|Investments ||- ||- ||- ||- ||- |
|Turnover ||14581.01 ||17520.47 ||1489.88 ||66862.44 ||4535.69 |
|Profit/(Loss) before Tax ||539.45 ||(139.31) ||49.86 ||2058.25 ||11.41 |
|Provision for Tax ||110.00 ||6.23 ||5.90 ||- ||19.85 |
|Profit/(Loss) after Tax ||429.45 ||(145.54) ||43.96 ||2058.25 ||(8.44) |
|Proposed Dividend ||- ||- ||- ||- ||- |
* represents credit balance of the partners in the partnership firm.
|For and on behalf of the Board |
|Dinesh T. Shah |
|Chairman & CFO |
Place: Mumbai Dated : May 24 2017