DIRECTORS' REPORT Dear Members, Your Directors are pleased to present the Twenty-First Annual Report on the Business and Operations of your Company together with the Audited Statement of Accounts for the year ended March 31, 2015. Performance of the Company Considering the challenging economic scenario during the year, both Overseas and in India, Company's performance was quiet satisfactory. In the difficult environment, Company has achieved sales of Rs. 2,274.41 crore, marginally lower than Rs. 2,288.25 crore of previous year. Profit after tax for the year has increased by 6.06 % to Rs. 43.21 crore. Dividend Your Directors are pleased to recommend a dividend of Rs. 1.50 per equity share of Rs.10/- each for the financial year ended March 31, 2015 subject to the approval of the members on September 9, 2015. Equity dividend if approved, will be paid to those members whose name appear on the Register of Members as at the end of business hours on September 2, 2015. Transfer to reserve The Company proposes to transfer Rs. 2 crore to the General Reserve out of amount available for appropriations and an amount of Rs. 34.86 crore is proposed to be retained in the Profit and Loss Account. Wind Energy As a part of its social commitments and endeavor to carry out operations in a more sustainable manner, the Company has always been inclined to promote a cleaner and greener environment. The Company has been pursuing generation of energy from wind power through establishment of Wind Turbine Generators (WTGs) since 2006. The Company's windmills are located in the state of Maharashtra, Tamil Nadu & Kerala. During the year 2014-15, the Company has generated 179 lacs kwh resulting in the sales of Rs. 590.36 lacs. Change in the nature of business, if any There is no change in the nature of business of your Company during the year under review. Material changes and commitments, if any, affecting the financial position of the Company: No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. Details of significant and material orders passed by the regulators/courts/tribunals impacting the going concern status and company's operations in future: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. Adequacy of internal financial controls with reference to the Financial statements: Your Company has adequate systems and processes of internal controls which are commensurate with its size and nature of operations. They have been designed to provide reasonable assurance with regard to recording and providing reliable financial information, complying with applicable statutes, safeguarding of assets, authorization of transactions and adherence to the Company's policies and practices. The internal controls and governance process are duly reviewed for their adequacy and effectiveness through periodic audits by Internal Auditor. Details of Subsidiary Companies/Joint Ventures/Associate Companies Your Company has four wholly owned subsidiaries. These consist of: 1. Asian Star Jewels Private Limited 2. Asian Star DMCC 3. Asian Star Co. Ltd (USA) 4. Asian Star Trading (Hong Kong) Ltd Out of the above Asian Star Jewels Private Limited is wholly owned Indian subsidiary company and rest three companies viz. Asian Star DMCC, Asian Star Co. Ltd (USA), Asian Star Trading (Hong Kong) Ltd are wholly owned foreign subsidiary companies of Asian Star Company Limited. 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 Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1, which forms part of the annual report. Performance and financial position of the subsidiary companies is given in Annexure - A. Deposit Your Company has not accepted any public deposit during the financial period under review. Auditors V. A. Parikh & Associates LLP, Chartered Accountants, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company received a certificate from V.A. Parikh & Associates, LLP, Chartered Accountants, to the effect that their reappointment, if made, would be in accordance with the provisions of section 141 of the Companies Act, 2013, it is proposed to reappoint them as the Auditors of the Company for the financial year 2015-2016. Share Capital The paid up capital of the Company as at March 31, 2015 stood at Rs. 16,00,68,000/- During the year under review, the Company has not issued: • Equity Shares with differential rights • Sweat Equity Shares • Employee Stock Options Listing The Equity Shares of the Company are listed on Bombay Stock Exchange Limited. The Company has paid listing fees for the year 2015-16. Extract of Annual Return Pursuant to Section 92 (3) of Companies Act, 2013 and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT 9 is annexed as Annexure - B. Energy conservation, Technology Absorption and Foreign Exchange Earnings and Outgo Conservation of Energy The activity of the Company does not require large-scale consumption of energy and the Company is not covered in the list of industries required to furnish information relating to conservation of energy. Technology Absorption The Directors are in constant touch with ongoing research in the world to upgrade and absorb improved technology for better line of products and to yield better quality, cost reduction and worldwide acceptability of its range of products. Foreign Exchange Earnings and Outgo The Company has earned Rs. 1,62,935.59 lacs in foreign exchange by way of exports and has spent Rs. 1,47,365.03 lacs in foreign exchange, for the imports of materials & consumables, foreign travel, diamond grading charges and repairs and maintenance. The Directors are making their best endeavors to earn foreign exchange. Corporate Social Responsibility (CSR) During the year, the Company introduced a CSR Policy emphasising its focus on community development projects, prioritizing local needs in the area of education, health, livelihood and environment, for ensuring long term sustainable benefits. Detailed policy is available on Company's website: www.asianstargroup.com As part of its initiatives under "corporate social responsibility" (CSR), the company has contributed funds for the schemes of eradicating hunger and poverty, promotion of education and medical aid. The contributions in this regard have been made to various registered trusts which are undertaking these schemes. The Report on CSR activities is annexed herewith as: Annexure - C Directors & Key Managerial Personnel A. Key Managerial Personnel: Mr. Dinesh T. Shah holds the position of Chairman and CFO, Mr. Vipul P. Shah is CEO & Managing Director and Ms. Aparna R. Shinde holds position of Company Secretary of your Company. B. Directors: In accordance with Companies Act, 2013 and Articles of Association of the Company, Mr. Arvind T. Shah and Mr. Rahil V. Shah retires by rotation at the ensuing Annual General Meeting. Accordingly Mr. Arvind T. Shah and Mr. Rahil V. Shah based on their consent and eligibility are proposed for reappointment. Their re-appointment forms a part of the Notice of the ensuing Annual General Meeting. Induction: The nomination and remuneration committee recommended the induction of Mrs. Neha R. Gada as an independent member of the Board. Accordingly she was appointed on Board of the Company on March 30, 2015 with reference to section 149 of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement. She holds office up to the date of the ensuing Annual General Meeting and hence we seek your support in confirming her appointment. C. Board Independence: Our definition of 'Independence' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchange and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent :- 1. Mr. Bhupendra Shroff 2. Mr. K. Mohanram Pai 3. Mr. Hasmukh Gandhi 4. Mr. Apurva Shah 5. Mr. Milind Gandhi 6. Mr. M. R. Nayak 7. Mrs. Neha Gada (Additional Director appointed w.e.f. March 30, 2015) D. Declaration by an Independent Director(s) All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchange. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. Annual Evaluation of Board Performance and Performance of its Committees and of Directors: Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the individual Directors as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria, procedure for the performance evaluation process for the Board, its Committees and Directors. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. Training of independent directors Your Company has developed an orientation programme known as "familiarisation programme" which is for the benefit of every new independent director of the Board. To familiarize the new inductee(s) with the strategy, operations and functions of our Company, the executive directors / senior managerial personnel make presentations to the inductees about the Company's strategy, operations, product and service offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management. Number of meetings of the Board The Board met five times during the financial year, as held on May 22, 2014, August 11, 2014, November 14, 2014, February 10, 2015, March 30, 2015 the details of which are given in the "Report on Corporate Governance" that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. Committees of the Board There are currently six Committees of the Board, as follows: • Audit Committee • Finance Committee • Corporate Governance Committee • Shareholder's Committee • Corporate Social Responsibility Committee • Nomination and Remuneration Committee Details of all the Committees along with their charters, composition and meetings held during the year are provided in the "Report on Corporate Governance", a part of this Annual Report. Vigil Mechanism Your Company is committed to standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. 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 are given in the notes to Financial Statement. Related Party Transactions All Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholders approval under Clause 49 of the Listing Agreement. All Related Party Transactions are placed before the Audit Committee for approval. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company's website: www.asianstargroup.com Particulars of Employees Detailed information in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure - D to the Board's report. Other 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, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. Secretarial Audit Report In terms of Section 204 of the Act and Rules made there under Yogesh D. Dabholkar & Co., Practicing Company Secretary has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure - E to this report. The report is self-explanatory and do not calls for any further comment. Risk management policy The Company operates in conditions where economic, financial and other risks are inherent to its businesses. To overcome this and as per requirement of Clause 49 of the listing agreement, Board has formed a Risk Management policy to regulate the plan for the key risks faced by the Company. The Company has developed a very comprehensive risk management policy under which all key risks are identified and controlled. 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 hereby confirm that: (i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. (ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period. (iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) The Directors have prepared the annual accounts on a 'Going Concern' basis. (v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, and (vi) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Corporate Governance Report & Management Discussion and Analysis Your Company has always been devoted to adopting and adhering to the best Corporate Governance practices. The Company understands and respects its fiduciary role and responsibility towards stakeholders and society at large and strives hard to serve their interests, resulting in creation of value and wealth for all stakeholders. As a listed company, necessary measures are taken to comply with the listing agreement of the Stock exchange. A "Report on Corporate Governance", along with a certificate of compliance from the Statutory Auditors of the Company - V. A. Parikh & Associates LLP, Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and Management Discussion and Analysis Report are given 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 in compliance with the Act: 1) Terms & Conditions of Appointment of Independent Directors 2) Familiarization Programme 3) Whistle Blower Policy 4) Policy on Related Party Transactions 5) Risk Management Policy 6) Nomination & Remuneration Policy 7) Corporate Social Responsibility Policy Special Business: As regard the items of the Notice of the Annual General Meeting relating to special business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Your attention is drawn to these items and Explanatory Statement annexed to the Notice. Finance The Company is availing working capital requirements from consortium of bankers. Insurance Properties and assets of the Company are adequately insured. Human Resources Your Company treats its "human resources" as one of its most important assets. Your Company invests in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. Disclosure as per Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2014-15, the Company has not received any complaint on sexual harassment. Cautionary Statement This report contains forward-looking statements which may be identified by their use of words like 'plans', 'expects' 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the company's strategy for growth, product development, market position, expenditures and financial results, are forward - looking statements. Forward - looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The company's actual results, performance or achievements could thus differ materially from those projected in any such forward - looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward - looking statements, on the basis of any subsequent developments, information or events. Appreciation Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to shareholders, customers, vendors, bankers, business associates, regulatory and government authorities for their continued support. For and on behalf of the Board Dinesh T. Shah Chairman & CFO Vipul P.Shah CEO & Managing Director Place : Mumbai Dated : May 18, 2015 Registered Office: 114-C, Mittal Court, Nariman Point, Mumbai - 400 021. |