BOARD'S REPORT Your Directors have pleasure in presenting the 20th Annual Report together with the Audited Statement of Accounts of Asian Granito India Limited for the year ended 31 st March, 2015 2. Company Performance (Standalone and Consolidated Basis) The Company's Standalone revenues from operations were Rs. 907.84 Crores for the year ended 31st March, 2015 as compared to Rs. 841.63 Crores for the previous year, while Consolidated revenues from operations were Rs. 926.10 Crores for the year ended 31st March, 2015 as compared to Rs. 854.45 Crores for the previous year. However, your Directors are expecting to achieve better results in time to come and to continue the position of market leader in coming years. The highlights of the Company's performance are as under: 1. Revenue from operations increased to Rs. 907.84 Crores in the year 2014-15 from Rs. 841.63 Crores in the year 2013-14. 2. Net Profit is increased to Rs. 14.47 Crores in the year 2014-15 from Rs. 14.14 Crores in the year 2013-14. 3. EBIDTA is decreased to Rs. 61.37 Crores in the year 2014-15 from Rs. 65.09 Crores in the year 2013-14. Subsidiary Performance: Asian Granito India Limited has a wholly owned subsidiary as AGL Industries Limited. AGL Industries Limited has earned revenue of Rs. 1281.86 Lacs in the year 2013-14 which increased to C1826.10 Lacs in the year 2014-15. Company has made expenses of Rs. 1265.20 Lacs in the year 2013-14 which is increased to Rs. 1818.85 Lacs in the year 2014-15. Company has made profits of Rs. 11.50 Lacs in the year 2013-14 which has decreased to Rs. 3.32 Lacs in the year 2014-15. Associate Company And Joint Venture Company Performance: Asian Granito India Limited has one associate company Astron and Paper Board Mills Limited. This associate company has earned total revenue of Rs. 10619.79 Lacs in the last year 2013-14 which is increased to Rs. 15213.67 Lacs in the year 2014-15.Company has made expenses of C 10751.36 Lacs in the last year 20132014 which is increased to Rs. 14626.36 Lacs in the year 2014-15. Company had made loss of Rs. 287.86 Lacs in the year 2013-14 and has made profit of C406.25 Lacs in the year 2014-15. Asian Granito India Limited has entered into joint venture with AGL Panaria Private Limited on 13th June, 2012. The Company has earned revenue of Rs. 1096.89 Lacs in 2013-14 which has increased to Rs. 1564.93 Lacs in 2014-15. Company has made expenses of Rs. 1309.42 Lacs in the year 2013-14 which has increased to Rs. 1801.64 Lacs in the year 2014-15. Company has made losses of Rs. 212.53 Lacs in the year 2014-15 which has increased to Rs. 236.71 Lacs in the year 2014-15. 3. Consolidated Financial Statements: The consolidated financial statements of the Company are prepared in accordance with the provisions of section 129 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 and under the Listing Agreement with the stock exchanges. The audited financial statements in respect of each of its subsidiary/associates /joint venture companies will be made available to the shareholders, on receipt of a request from any shareholder and it has also been placed on the website of the Company. This will also be available for inspection by the shareholders at the registered office during the business hours. 4. Dividend: Your Directors do not recommend payment of any dividend for the financial year ended 31st March, 2015, in order to conserve the resources of the Company. The Company will retain the earnings for use in the future operations & projects and strive to increase the networth of stakeholders of the Company. 5. Management Discussion and Analysis Report: The Report on Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is included in this Report. Certain Statements in the said report may be forward looking. Many factors may affect the actual results which could be different from what the directors envisage in terms of the future performance and outlook. 6. Subsidaries, Associates and Joint Ventures: As required under Rule 8(1) of the Companies (Accounts) Rules, 2014, the Board's Report has been prepared on standalone financial statements and a report on performance and financial position of each of the subsidiaries and associates included in the consolidated financial statements is included in financial statements. In accordance with third proviso of section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.aglasiangranito.com in Investor Relation Section. Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.aglasiangranito.com in Investor Relation Section. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company's registered office. The statement required under section 134 of the Companies Act, 2013 in respect of subsidiaries, Associates and Joint Ventures is provided as AOC-1 as Annexure 1 to this Report. 7. Fixed Deposits: Your Company has not accepted any deposits from the public within the meaning of chapter V of the Act, 2013 for the year ended 31st March, 2015. 8. Directors: In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Bhaveshbhai Patel (DIN: 03382527), Executive Director, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. All independent Directors (IDs) have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of listing agreement. The details terms of appointment of IDs are disclosed on the Company's website with following link <http://aglasiangranito>. com/index.php/investor-relation. Separate meeting of Independent Directors was held on 9th February, 2015 and the Independent Directors reviewed the performance of non independent Director i.e 1. Mr. Kamleshbhai Patel, Chairman and Managing Director 2. Mr. Mukeshbhai Patel, Managing Director 3. Mr. Sureshbhai Patel, Executive Director 4. Mr. Bhaveshbhai Patel, Executive Director 5. Mr. Kanubhai Patel, Executive Director 6. Mr. Bhogibhai Patel, Executive Director and the Board as a whole. They reviewed the performance of Chairman after taking into account the views of Executive Directors. They also assessed the quality, quantity and timeliness of the flow of information between the Company's management and the board that are necessary for the board to effectively and reasonably perform their duties. Five out of six Independent Directors were present at the meeting. 9. Meetings of The Board: During the year seven Board Meetings and one Independent Directors' meeting was held, the details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and Listing Agreement were adhered to while considering the time gap between two meetings. 10. Performance Evaluation: Pursuant to the provisions of Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the Directors individually as well the evaluation of the working of the Board and its Committees i.e Audit, Nomination and Remuneration and Stakeholder committee, CSR by the way of individual and collective feedback from Directors. The following were the Evaluation Criteria: (a) For Independent Directors: - Participation in terms of adequacy (time & content) Contribution through expertise and perspective Guidance / support to management outside Board / Committee meetings (b) For Executive Directors: - Leadership initiative, Initiative in terms of new ideas and planning for the Company, professional skills, problem solving and decision making, Compliance with policies of the Company, ethics, code of conduct etc., Reporting of frauds, violations etc., safeguarding of interest of whistle blowers under vigil mechanism, timely inputs of the minutes of the meetings of the Board and Committee, if any. The Board reviewed each committee's terms of reference to ensure that the Company's existing practices remain appropriate. Recommendations from each committee are considered and approved by the board prior to implementation. 11. Remuneration Policy: The Board has, on the recommendation of the Nomination & Remuneration committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 13. Nomination and Remuneration Committee: The Committee has ensured that any person(s) who is/are appointed or continues in the employment of the Company as its Chairman, Managing Director, Whole Time Director shall comply with the conditions laid out under Part I of Schedule V to the Act, 2013. Criteria for performance evaluation, disclosures on the remuneration of Directors, criteria of making payments to Non Executive Directors have been disclosed as part of corporate governance report attached herewith. 14. Stakeholders Relationship Committee The Committee oversees performance of the Registrars and Transfer Agents of the Company and recommends measures for overall improvement in the quality of investor services. The Committee also monitors implementation and compliance with the Company's Code of Conduct for Prohibition of Insider Trading in pursuance of SEBI (Prohibition of Insider Trading) Regulations, 1992. 15. Corporate Social Responsibility Committee The Committee has reviewed the CSR Policy and associated frameworks, processes and practices of the Company and made appropriate recommendations to the Board. The Committee has ensured that the Company is taking the appropriate measures to undertake and implement CSR projects successfully and has monitored the CSR Policy. The Committee has identified the areas of CSR activities and recommended the amount of expenditure to be incurred on such activities. The Committee has coordinated with Asian Institute of Technology for implementing programs and executing initiatives as per CSR policy and has reviewed the performance of Asian Institute of Technology or such other agency periodically. 16. Vigil Mechanism: Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and Listing Agreements, a Vigil Mechanism or 'Whistle Blower Policy' for directors, employees and other stakeholders to report genuine concerns has been established. The same is uploaded on the website of the Company. 17. Corporate Social Responsibility: Corporate Social Responsibility (CSR) is not a new concept for the Company. Your company is actively involved in CSR initiatives like contributing to the schemes of eradicating hunger and poverty and promotion of education, health, safety and environment aspects. In compliance with the requirements of section 135 of the Companies Act, 2013, the Company has laid down a CSR policy. The contributions in this regard have been also made to the registered trust Asian Institute of Technology, which is providing technical education. The Company is also contributing on regular basis to Akshaypatra Foundation, which is providing food to the poor directly as part of the CSR initiative. The Company is also doing blood donation camp every year for health benefit of Society at large. The composition of the committee, contents of CSR policy and report on CSR activities carried out during the financial year ended 31st March, 2015 in the format prescribed under Rule 9 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure A. 18. Human Resources: The well disciplined workforce which has served the Company lies at the very foundation of the Company's major achievements and shall well continue for the years to come. The success of the Company and good track record are largely attributable to the remarkable commitment, dedication and hard work of the employees. The Company has strongly embedded core values and all employees are trained and encouraged to use these values in their daily operations and the bases for making decisions. The management has always carried out systematic appraisal of performance and imparted training at periodic intervals. The Company has always recognized talent and has judiciously followed the principle of rewarding performance. This has helped to ensure all employees are aligned and focused on key objectives and key performance indicators critical for the Company's performance. Remuneration and performance are strongly linked together through bonus schemes and increments. 19. Risk Management: Risk Management is done by way of systematically identifying, quantifying, and managing all risks and opportunities that can affect achievement of a corporation's strategic and financial goals. The Board is responsible for framing and monitoring the risk management plan for the Company. Risk Management Policy is framed by the Board and they are reviewing the risk management policies and system periodically. The risk mitigation is done by using the following key strategies: a) Risk Avoidance: By not performing an activity that could carry risk. b) Risk Transfer: Mitigation by having another party to accept the risk, either partial or total, typically by contract or by hedging. c) Risk Reduction: Employing mitigations methods/solutions that reduce the severity of the loss. d) Risk Retention: Accepting the loss when it occurs. Risk retention is done for small risks where the cost of insuring against the risk would be greater over time than the total losses sustained. All risks that are not avoided or transferred are retained by default. This includes risks that are so large or catastrophic that they either cannot be insured against or the premiums are infeasible. 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. 20. Internal Control System and their Adequacy The Company has adequate internal control system and procedures to ensure that all the assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorised and recorded. The Company has an established internal financial control framework including internal controls over financial reporting, operating controls and anti-fraud framework. This framework is regularly reviewed by the management and internal audit team and presented to the Audit Committee. The internal auditor team carries out extensive audits throughout the year across all locations and across all functional areas and submits its reports to the Audit Committee of the Board. 21. Related Party Transactions Related party transactions that were entered into during the financial year were on arm's length basis and were in ordinary course of business. There are no materially significant related party transactions made by the Company which may have potential conflict with the interest of the Company. There are no material related party transactions which are not in ordinary course of business or which are not on arm's length basis. Particulars of contracts and arrangements with related parties as per section 188(1) of Companies Act, 2013,including arms length transactions are enclosed as separate Annexure no.2 in Form no. AOC-2. The Board has approved a policy for related party transactions which has been uploaded on the Company's website. The weblink as required under Listing Agreement is as under: <http://aglasiangranito.com/index.php/investor-relation> 22. Material Changes There have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. since 31st March, 2015. Further, it is hereby confirmed that there has been no change in the nature of business of the Company. 23. Auditors A) Statutory Auditors In compliance with the Companies (Audit and Auditors) Rules, 2014, M/s. A.L. Thakkar & Co., Chartered Accountants, has been appointed as Statutory Auditors of the Company till the conclusion of Annual General Meeting for the F. Y. 20142015, as approved by the members at their 19th Annual General Meeting held on 30th September, 2014. Further, pursuant to the requirement of Section 139 of the Companies Act, 2013, the appointment of Statutory Auditors is to be ratified by the members at every Annual General Meeting. Members are requested to ratify their appointment for the F. Y. 2015-16. B) Secretarial Auditors The Board of Directors of the Company has appointed M/s. Shilpi Thapar & Associates, Practising Company Secretaries, Ahmedabad, to conduct Secretarial Audit for the F.Y. 2015-16. Further, the Secretarial Audit Report of M/s. Shilpi Thapar & Associates, Company Secretaries for the financial year ended 31st March, 2015, is annexed as Annexure 3. The Board has duly reviewed the Secretarial Auditor Report and gives following clarifications for the observations made by secretarial auditor as under: As regards observations in Secretarial Audit regarding loan to Companies, firms or other parties covered under register maintained under section 189 of the Companies Act, 2013, the Directors state that it is in normal course of business with interest provisions. C) Internal Auditors: The Board of Directors has appointed Mr. Rajendra Soni, Chartered Accountant as Internal Auditors of the Company for the F. Y. 2015-16. There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their report or by the Secretarial Auditors in their Secretarial Audit Report and hence no explanation or comments of the Board is required in this matter. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. 24. Corporate Governance The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite certificate from M/s. A.L. Thakkar & Co., Chartered Accountants, confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance 25. Listing of Shares The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 532888 and on National Stock Exchange of India Limited (NSE) with scrip code of ASIANTILES. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 2015-16 have been paid. 26. Loans, Guarantee or Investments Details of Loans granted, Guarantees given and Investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 27. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 ofThe Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure 4". 28. Extract of Annual Return The extract of Annual Return required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, forms part of this report as Annexure-5 29. 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 as follows: A statement showing following details of every employee of the Company who was in receipt of remuneration in excess of C 60 Lacs, if employed throughout the year or C 5 Lacs per month, if employed for part of the financial year or received remuneration in excess of that drawn by the MD/WTD/Manager & holding 2% or more of equity share capital of the Company (himself along with spouse & dependent children): Name, age & designation of the employee: Mr. B. G. Vyas, 58 years, Chief Operating Officer Remuneration received: C 74,78,607 Nature of employment, whether contractual or otherwise: Permanent Qualifications and experience of the employee: B. Com, MMS. Date of commencement of employment: 20.03.2014 the age of such employee: 58 years the last employment held by such employee before joining the Company: Sims Ceramic Private Limited the percentage of equity shares held in the along with spouse & dependent children-(3224 shares - 0.01%) Whether any such employee is a relative of any director or manager of the Company and if so, name of such director or manager - No 30. Disclosure Under the sexual harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013: The Company has framed and implemented an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. 31. Significant and Material orders Passed by the Regulators or Courts There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. Registered and Corporate office of the Company: 202, Dev Arc, Opp. Iskon Temple, Sarkhej Gandhinagar Highway, Ahmedabad - 380 015 32. Directors' Responsibility Statement In accordance with the provisions of section 134(5) of the Act, 2013, with respect to Director's Responsibility Statement, it is hereby stated:- a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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, 2015 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements for the year ended 31st March, 2015 have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 33. Cautionary Statement Statements in the Management discussion and analysis report describing the Company's objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed and implied. Important factors that could make a difference to the Company's operations include among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the government regulations, tax laws and other statutes and incidental factors. 34. Acknowledgements Your Directors thanks all Customers, Investors, Vendors, Bankers, Auditors, Consultants and Advisors for their continued support during the year. We also place on record our appreciation of the contributions of employees at all levels. Your Directors thanks Governments of various countries where we have our operations especially Government of India and its various Ministries. Your Directors looks forward for their continued support in the future for the consistent growth of the Company. For and on behalf of The Board of Directors Kamleshbhai B. Patel Chairman and Managing Director (DIN 00229700) Place: Ahmedabad Date : August 13, 2015 |