Associated Stone Industries (Kotah) Limited
The Directors have pleasure in presenting the 70th Annual Report together with theAudited Financial Statements of the Company for the year ended 31st March 2016:
| || ||(Rs. in Lacs) |
| ||2015-16 ||2014-15 |
|Total Revenue ||17966.92 ||21543.14 |
|Profit before Finance Cost & ||3903.70 ||4352.37 |
|Less : Finance Cost ||1186.16 ||822.61 |
|Depreciation ||532.37 ||643.41 |
|Profit before Taxation & Exceptional Item ||2185.17 ||2886.35 |
|Add: Exceptional Item ||127.90 ||257.10 |
| ||2313.07 ||3143.45 |
|Provision for Taxation || || |
|Current Tax ||(885.00) ||(1070.00) |
|Deferred Tax ||6.55 ||(93.10) |
|Earlier Years Adjustments ||(0.72) ||(138.40) |
|Profit After Tax ||1433.90 ||1841.95 |
|Add: Balance in Statement of Profit & Loss ||7056.26 ||5703.58 |
|Profit available for Appropriation ||8490.16 ||7545.53 |
|Appropriation || || |
|Adjustment relating to Fixed Assets ||- ||50.66 |
|Transfer to General Reserve ||200.00 ||200.00 |
|Proposed Dividend ||198.85 ||198.85 |
|Tax on Dividend ||40.48 ||39.76 |
|Closing Balance ||8050.83 ||7056.26 |
| ||8490.16 ||7545.53 |
Your Directors are pleased to recommend a dividend of Re.0.30 (equivalent to 30%) perequity share of the face value of Re.1/- each [previous year Rs.1.50 (equivalent to 30%)per equity share of the face value of Rs. 5/- each]. The dividend payout is subject toapproval of the members at the ensuing Annual General Meeting.
Your Directors propose to transfer Rs. 200.00 Lacs to the General Reserve Account. Anamount of Rs. 8050.83 Lacs is proposed to be retained in the Statement of Profit &Loss.
For the year under review the production of Kotah Stone was 1207.40 Lacs sq. ft. asagainst 1172.77 Lacs sq. ft. in the previous year and sales were 1212.95 Lacs sq. ft. asagainst 1201.24 Lacs sq. ft. in the previous year.
During the year under review the Company has registered total revenue from operationsof Rs. 17201.30 Lacs as against that of previous year Rs. 20878.29 Lacs and Gross Profitof Rs. 3903.70 Lacs (previous year Rs. 4352.37 Lacs). This included revenue from thetrading activity which during the year under review was Rs. 4911.78 Lacs as against Rs.9158.71 Lacs in the previous year.
The profit before taxation during the year under review was Rs. 2313.07 Lacs ascompared to Rs. 3143.45 Lacs during the previous year.
There are no material changes/commitments affecting financial position of the Companybetween the end of year and to the date of Report.
WIND POWER PROJECT
As a part of its efforts to augment "Green Power" the Company continues tooperate at its installed 3.625 MW capacity Wind Power Plant comprising of 1.125 MWcapacity at Gadag District of Karnataka and 2.50 MW capacity at Satara District of
Maharashtra supplying to Electricity Boards. The Company has sold Wind Power Unit of1.125 MW at Tirupur District of Tamil Nadu in November 2015.
The Wind Power generations basically depends on flow of winds and due to unpredictableclimatic conditions generation of power varies from time to time. The generation duringthe year under review was lower as compared to previous year on account of low windthroughout the year.
SHARE CAPITAL OF THE COMPANY
The paid up Equity Share Capital as at 31st March 2016 was Rs. 66283730/-consisting of 66283730 Equity Shares having face value of Re.1/- each fully paid up.During the year under review the Equity shares having face value of Rs. 5/- each were subdivided into Re.1/- each and the Company has neither issued any share with differentialvoting rights nor granted any stock options/sweat equity shares.
CHANGE IN THE NATURE OF BUSINESS
The Company is mainly engaged in Mining and Processing of Kotah and other naturalStones. Apart from Mining Company is also engaged in generation of Wind Power and othertrading activities.
During the year under review there is no change in the nature of business of theCompany.
PERFORMANCE AND FINANCIAL STATEMENTS OF SUBSIDIARIES
As required under Regulation 33 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Section 129 of the Companies Act 2013 theConsolidated Financial Statements prepared by the Company in accordance with theapplicable provisions of the Companies Act 2013 and applicable accounting standards formpart of the Annual Report. The Company has an overseas wholly owned subsidiary in the nameof ASI Global Limited Mauritius which was set up in the year 2014 to acquire lime stonemine/crusher Company viz: Al
Rawasi Rock & Aggregate LLC in Fujairah UAE.
Your directors draw attention of the members to the Note No.33 to the ConsolidatedFinancial Statements which set out salient features of Financial Statement of SubsidiaryCompanies.
DIRECTORS RESPONSIBILITY STATEMENT
As stipulated in Section 134(5) of the Companies Act 2013 your Directors subscribe tothe "Directors Responsibility Statement" and the Board of Directors of theCompany confirm in the preparation of the annual accounts for the year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
the Directors have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and of the profitor loss of the Company for the year ended on that date;
the Directors have taken proper and sufficient care 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;
the Directors have prepared annual accounts on a going concern basis;
the Directors have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively; and
the Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORTS
The Company has complied with mandatory provisions of
Corporate Governance as prescribed under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (erstwhile Listing Agreement).
In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Corporate Governance and Management Discussion and Analysis Reportwhich form an integral part of this Report together with the Certificate with therequirements of Corporate Governance as stipulated in aforementioned Regulations.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per provision of Section 135 read with Schedule VII of the Companies Act 2013 alongwith the Companies (Corporate Social Responsibility Policy) Rules 2014 and any otherstatutory amendment or modification thereof and the Companys CSR
Policy in respect of Corporate Social Responsibility activity a separate Report on CSRactivities is attached as Annexure "A" to this Report. The CSR Policy hasbeen posted on the website of the Company at www.asistone.com.
The Company has made a budget of Rs. 51.50 Lacs (including short fall of Rs. 7.57 Lacsof previous year). During the year under review CSR expenditure was short by Rs. 6.49Lacs mainly on account of pending of certain proposals.
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporates risk management plans in its strategy business and operational plans.
Your Company through its risk management process strive to contain impact andlikelihood of the risks within the risk appetite as agreed from time to time with theBoard of Directors. During the year under review your Company has constituted a RiskManagement Committee to oversee the risk management efforts of the Company. The details ofthe Committee along with its charter are set out in the Corporate Governance Reportforming part of this Report.
There are no risks which in the opinion of the Board threaten the existence of yourCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis which forms part of this Report.
INTERNAL CONTROL SYSTEM AND ITS ADEQUACY
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Companys policies the safeguardof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of accounting records and timely preparation of reliable financialdisclosures.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Number of Meetings of Board
Five meetings of the Board of Directors were held during the year under review. Forfurther details please refer the Corporate Governance Report.
During the year under review Mrs. Anita Jatia was appointed as Whole Time Director andsame was approved by the shareholders at the 69th Annual General Meeting held on 25thSeptember 2015 and Mr. Tushya Jatia was re-designated from
Whole Time Director to Non-Executive Non Independent Director at the same meeting.
In accordance with the provisions of Section 152(6)(c) of the Companies Act 2013 andArticles of Association of the Company
Mr. Tushya Jatia (DIN: 02228722) Director retires by rotation at the forth comingAnnual General Meeting and being eligible has offered himself for reappointment. TheBoard recommends his re-appointment. The brief profile of retiring director is given inthe notice calling the Annual General Meeting.
The Board of Directors on recommendation of the Nomination and Remuneration Committeehas reappointed Mr. Deepak Jatia as Managing Director of the Company for a period of fiveyears w.e.f. 1st September 2016 subject to the approval of the members in the ensuingAnnual General Meeting.
Mr. Pramod G. Lath Independent Director has resigned from the Directorship w.e.f. 4thJuly 2016 and Mr. Gaurang M. Gandhi has been appointed as Independent Director w.e.f. 4thJuly 2016.
Statement on declaration given by Independent Directors
The Independent directors have submitted the declaration of independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 confirming that they meet thecriteria of independence provided in sub- section (6) so as to qualify themselves to beappointed/continued as Independent directors.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a structured questionnaire was prepared aftertaking into consideration various aspects of the Boards functioning composition ofthe Boards and its Committees culture execution and performance of specific duties andobligation and governance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and Non-Independent Directors was carried by the IndependentDirectors. The Board of Directors expressed their satisfaction with the evaluationprocess.
Appointment/Cessation of KMP
During the year under review the following persons were appointed/ceased as KeyManagerial Personnel (KMP) of the Company:-
|Sr. No ||Name of the Person ||Designation |
|1. ||Mrs. Anita Jatia ||Appointed as Whole Time Director |
|2. ||Mr. Tushya Jatia ||Ceased from the office of Whole Time Director |
|3. ||Mr. Uttam Shetty ||Ceased from the office of Company Secretary of the Company |
AUDITORS AND AUDITORS REPORT
M/s. B.L. Ajmera & Co. Chartered Accountants having Firm Registration Number(001100C) the Statutory Auditors of the Company hold office till the conclusion of theforthcoming Annual General Meeting and are eligible for re-appointment.
Your Company has received a confirmation letter from M/s. B.L. Ajmera & Co. to theeffect that their re-appointment if made would be within the prescribed limits underSection 141 of the
Companies Act 2013 and that they are not disqualified for reappointment.
M/s. B.L. Ajmera & Co. have issued Auditors Report for the financial yearended 31st March 2016 and the notes on financial statements referred to in the saidAuditors Report are self-explanatory and do not call for any further comments. The
Auditors Report does not contain any qualification reservation or adverseremark. During the year under review the Auditors have not reported any matter underSection 143(12) of the Companies Act 2013.
Pursuant to Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 M/s. GMJ & Associates CompanySecretaries had been appointed as the Secretarial Auditor for conducting the secretarialaudit for the financial year 2015-16.
The Secretarial Audit Report is attached as Annexure "B" to thisReport and forms an integral part of this Report. There was no qualification reservationand adverse remark in their Report.
Further on the recommendation of Audit Committee the Board of Directors haveappointed M/s. GMJ & Associates Company Secretaries as Secretarial Auditor of theCompany in relation to the financial year 2016-17. The Company has received their consentfor such appointment.
As per the requirement of the Central Government and pursuant to Section 148 of theCompanies Act 2013 read with Companies (Cost Records and Audit) Rules 2014 as amendedfrom time to time your Company has been carrying out audit of cost records.
Accordingly M/s. N.D. Birla & Co. a firm of Cost Accountants in practice wasappointed to undertake the Cost audit for the financial year ended 31st March 2016.
Further the Board of Directors on the recommendation of the Audit Committee haveappointed M/s. N.D. Birla & Co. a firm of Cost Accountants to undertake the audit ofcost records of the Company for the financial year 31 st March 2017.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the year underreview with related parties were in the ordinary course of business and on an armslength basis and do not attract the provisions of Section 188 of the Companies Act 2013.The Company presents a detailed landscape of all related party transactions before theAudit Committee on quarterly basis specifying the nature value and terms and conditionsof the transaction. Transactions with related parties are conducted in a transparentmanner with the interest of the Company and Stakeholders as utmost priority. Furtherduring the year the Company had not entered into any contract/ arrangement/ transactionwith related parties which could be considered material in accordance with the policy ofthe Company on materiality of related party transactions.
Since all related party transactions entered into by the Company were in ordinarycourse of business and were on arms length basis Form AOC-2 is not applicable tothe Company.
The policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Companys website atwww.asistone.com.
Your Directors draw attention of the members to Note No. 37 to the financial statementswhich sets out related party disclosures.
DISCLOSURES Audit Committee
The Audit Committee comprises of Independent Directors namely
Mr. Pramod G. Lath the Chairman Mr. Anshul M. Sonawala and Mr. Sanjay Seksaria asother members. All the recommendations made by the Audit Committee were accepted by theBoard. The terms of reference of audit committee and other details are explained in briefin Corporate Governance Report.
Nomination and Remuneration Committee and its policy
The Nomination and Remuneration Committee comprises of Independent Directors namely Mr.Sanjay Seksaria the
Chairman Mr. Pramod G. Lath and Mr. Anshul M. Sonawala as members of the Committee.The Nomination and Remuneration policy has been posted on the website of the Company atwww.asistone.com.
Whistle Blower Policy/Vigil Mechanism
In compliance with the requirements of Section 177 of Companies
Act 2013 the Company has a Whistle Blower Policy to report genuine concerngrievances fraud and mismanagements if any. The policy has been posted on the website ofthe Company at www.asistone.com.
Particulars of Loans Guarantees or Investment by the Company
During the year the Company has provided Loans and Corporate Guarantee to itsSubsidiaries for business purpose. Please refer
Note No. 10(b) for the Investment in subsidiaries Note No. 11 for Loans and Advancesand Note No. 25(1)(b)(ii) for Corporate Guarantee of the financial statements.
Details of loans given to other parties during the year under review are attached as Annexure"C" to this Report.
Extract of Annual Return
The extract of the Annual Return in Form No. MGT-9 as required under Section 134(3)(a)of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is attached as Annexure "D" to this Report.
Regulators or Significant
Courts or Tribunals
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and companys operations in future.
Your Company has constituted an Internal Complaint Committee as required under Section4 of Sexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal) Act2013.
There were no incidences of sexual harassment reported during the year under review.
The Companys Equity Shares have been admitted to the depository mechanism of theNational Securities Depository Limited (NSDL) and the Central Depository Services (India)Limited (CDSL). The Company has been allotted ISIN No. INE443A01030.
The Shareholders therefore are requested to take full benefit of the same and lodgetheir holdings with Depository Participants (DPs) with whom they have their Demat Accountsfor getting their holdings in electronic form.
Conservation of Energy Technology absorption and Foreign Exchange Earning and Outgo
As per provisions of Section 134(3)(m) of the Companies Act 2013 read with Rule 8 ofCompanies (Accounts) Rules 2014 a statement in respect of Conservation of EnergyTechnology Absorption and Foreign Exchange Earning and Outgo is attached as Annexure"E" to this Report.
Particulars of Employees
In terms of Section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thestatement showing the name of the employees drawing remuneration in excess of the limitspecified in the Rules are not applicable on the Company as during the period no employeeof the Company was drawing salary in excess of the limits prescribed therein. Theinformation required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached as Annexure"F" to this report.
Your directors draw attention of the members to the Note No.37 to the financialstatements which set out disclosure of remuneration to the Managing Director and ExecutiveDirector.
The Remuneration policy has been posted on the website of the Company atwww.asistone.com.
The Company has not accepted or renewed any deposits within the meaning of Section 73of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
Your Directors would like to acknowledge and place on record their sincere appreciationto all stakeholders clients Financial Institutions Banks Central and StateGovernments the Companys valued investors and all other business partners for theircontinued co-operation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of all the employeesof the Company and their continued contribution to its progress.
| ||On behalf of the Board of Directors |
| ||Deepak Jatia |
|Place: Mumbai. ||Chairman & Managing Director |
|Date: 28th May 2016 ||DIN: 01068689 |