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The Directors are pleased to present the Twenty-Fourth Annual Report on the Business and Operations of your Company together with the Audited Statement of Accounts for the year ended March 31, 2018.
Financial Results (Rs. in Crores)
Add : Other Income
Less : Total Expenditure
Operating Profit (PBDIT)
Less : Interest and Depreciation
Profit before Exceptional Items and Tax
Exceptional Items - Income / (Loss)
Profit before tax
Provision for Tax
Provision for Deferred Tax
Profit after Tax
Other Comprehensive Income
Total Comprehensive Income
Financial Performance of the Company
Your Company reported growth in revenue from operations of 1.11% over the previous year with sales of Rs. 2726.56 crores against that of Rs. 2696.52 crores in the previous year. The Company’s profit after tax is Rs. 35.64 crores against that of Rs. 44.48 crores in 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 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 financial year till the date of this Report, which affect the financial position of the Company.
Dividend And Reserves
Your Directors are pleased to recommend a dividend of 15% i.e. Rs. 1.50 per Equity Share of Rs. 10/- each aggregating to Rs. 240.10 Lakhs for the financial year ended March 31, 2018 subject to the approval of the members on September 25, 2018. During the year under review, your Company transferred a sum of Rs. 2 Crore to the General Reserve out of amount available for appropriations and rest of the profit is to be retained in the Profit and Loss Account.
During the year there is no change in share capital of the company.
The paid up capital of the Company as at March 31, 2018 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
No provision of money was made by Company for purchase of its own shares by employees or by trustees.
Your Company has not accepted any deposits during the financial year under review.
Scheme of Merger
The Scheme of Merger by Absorption (the “Scheme”) for merger of Asian Star Jewels Private Limited, wholly owned subsidiary into Asian Star Company Limited with the appointed date as April 1, 2017, has been filed with the National Company Law Tribunal, Mumbai Bench (“NCLT”) for approval. Upon receipt of approval, the Scheme shall be given effect to in the financial statements of the Company.
Performance of Subsidiary Companies Asian Star Jewels Private Limited
Asian Star Jewels offer world class diamond jewellery to its global clientele through a widespread marketing network. The Gross Revenue of the Company for FY 17-18 is Rs. 14,303.45 Lacs as compared to Rs. 14,582 Lacs in previous year. Profit after Tax stood at Rs. 616 Lacs for FY 2017-18 as compare to Rs. 434.17 Lacs in previous year.
Asian Star DMCC
Asian Star DMCC carries out trading in diamonds catering mainly to UAE market. The Gross Revenue of the Company for F.Y 17-18 is US $ 12,783,930 as compared to US $ 4,700,207 in previous year. Profit for the year was US $ 10,830,758 as compared to US $ 3,368,931 in previous year.
Asian Star Company Limited (USA)
Asian Star Company Limited (USA) is engaged in diamond trading and caters to the USA market. Gross Revenue of the company stood at US $ 677,513 for the Year. Net Profit after tax was US $ 68,013 .
Asian Star Trading (Hong Kong) Limited.
Asian Star Trading (Hong Kong) Limited is engaged in trading of diamonds. Gross revenue of the Company stood at US $ 108,719.79 as compare to US $ 101,359 in previous year. Profit after tax is US $ 102,662.68 as compared to US $ 91,206 in previous year.
Associate Company Shah Manufacturers
Shah Manufacturers is engaged in processing of diamond on job work basis. Gross revenue for Current year is Rs. 9,042.22 lacs as compare to Rs. 4,535.69 lacs in previous year. Profit after tax is Rs. 25.19 lacs as compared to Rs. 46.85 lacs in previous year.
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 and the associate company is set out in the prescribed form AOC-1, which forms part of the annual report. Performance and financial position of the subsidiary companies and the associate company is given in Annexure - A
Consolidated financial statements
The Consolidated Financial Statements of the Company, its subsidiaries and associate company are prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS’), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report on the operations of the Company, as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.
Corporate Governance Report
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 agreements of the Stock exchanges. A “Report on Corporate Governance”, along with a certificate of compliance from the statutory auditors of the Company - Mahendra Doshi & Associates, Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges) forms an integral part of this Report.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT 9, as required under section 92 (3) of the Companies Act, 2013, and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014 is annexed, as Annexure - B and forms an integral part of this Report. The copy of Annual Return is available on our website under “Investor Center” section at www.asianstargroup.com.
Directors and Key Managerial Personnel
A. Key Managerial Personnel:
The following are Key Managerial Personnel of the Company:-
1. Mr. Dinesh T. Shah: Chairman and CFO
2. Mr. Vipul P. Shah: CEO and Managing Director
3. Ms. Aparna R. Shinde: Company Secretary
In accordance with provision of section 152 of the Companies Act 2013 and Articles of Association of the Company, Mr. Dinesh T. Shah and Mr. Dharmesh D. Shah retires by rotation at the forthcoming Annual General Meeting. Accordingly Mr. Dharmesh D. Shah and Mr. Dinesh T. Shah based on their consent and eligibility are proposed for re-appointment. Their re-appointment forms a part of the Notice of the ensuing Annual General Meeting.
Mr. Rahil V. Shah (DIN:- 06811700) was appointed as Executive Director of the Company for a term of 5 years. His present term will expire on January 17, 2019. It is proposed to appoint him as Executive Director at the ensuing Annual General Meeting on terms and conditions decided by the Board of Directors.
Mr. Kundapur Mohanram Pai (DIN: - 00007198), Non-Executive Independent Director has attained the age of 81 years in the month of February 2018. As Regulation 17(1 A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 vide SEBI Notification No. SEBI/LAD-NRO/GN/2018/10 dated May 9, 2018 and other applicable provisions, if any, of the Companies Act, 2013. The Company seeks consent of the members by way of special resolution for continuation of his holding of existing office after the age of 75 years during the tenure of his appointment.
Based on performance evaluation done by Board of Directors and recommendation of Nomination and Remuneration Committee appointment of Mr. Kundapur Mohanram Pai (DIN 00007198), Mr. Apurva Rajendra Shah (DIN 00004781), Mr. Milind Hasmukh Gandhi (DIN 01658439) and Mr. Miyar R. Nayak (Din 03352749) as Independent Directors whose term will expire on May 21, 2019 and being eligible for appointment as an Independent Directors of Company for second term of 5 (five) consecutive years, i.e. up to May 21, 2024 subject to the approval of Members at the ensuing Annual General Meeting.
C. Board independence:
Our definition of ‘Independence’ of Directors is derived from Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges) and Section 149(6) of the Companies Act, 2013.
The following Non-Executive Directors are Independent in terms of Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges) and Section 149(6) of the Companies Act, 2013:
1. Mr. K. Mohanram Pai
2. Mr. Apurva Shah
3. Mr. Milind Gandhi
4. Mr. M. R. Nayak
5. Mrs. Neha Gada
6. Mr. Anand Gandhi
7. Mr. Hasmukh Gandhi*
*Mr. Hasmukh B. Gandhi (DIN: - 00009153), Independent - Non Executive Director, ceased to be director of the Company due to his sad demise on May 24, 2017.
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, Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Board, they fulfil the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.
Number of meetings of the Board
The Board met four times during the financial year, as held on May 24, 2017, August 10, 2017, November 10, 2017 and February 6, 2018 the details of which are given in the “Report on Corporate Governance”. The Company has complied with applicable Secretarial Standard issued by the Institute of Company Secretaries of India.
Committees of the Board
There are currently six Committees of the Board, as follows:
- Audit Committee
- Finance Committee
- Corporate Governance Committee
- Stakeholder Grievance’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.
Annual Evaluation of Board Performance and Performance of its Committees and of Directors
Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the individual Director 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.
Familiarisation Programme/Training of independent directors
Your company have 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. In addition, the Company also keeps the Independent Directors, updated on the events and developments in the industry and business environment.
Corporate Social Responsibility (CSR)
Company has a CSR Policy which 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 our website: www.asianstargroup.com.
CSR programs or projects to be undertaken by the Company in terms of this Policy, shall relate to one or more activities listed in Schedule VII of the Companies Act, 2013, at 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, CFO & Executive Director (Member) and Mr. Milind H. Gandhi, Independent Director (Member).
As part of its initiatives under “corporate social responsibility” (CSR), the company has contributed funds for the schemes of promotion of education, medical aid, eradicating hunger and malnutrition, promoting special education , promoting education facilities for tribal children and rural development projects etc. The contributions in this regard have been made to various registered trust which are undertaking these schemes.
The Report on CSR activities is annexed herewith as: Annexure - C.
Particulars of Employees
The table containing the names and other particulars of employees 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.
a. Statutory Auditor
In accordance with the provisions of section 139(1) of the Companies Act, 2013, Mahendra Doshi & Associates, Chartered Accountants, (Firm Registration Number 105765W) are the statutory auditors of the Company appointed in 23rd Annual General Meeting held on 28th September, 2017 until Conclusion of 28th Annual General Meeting to be held in 2022. The Company has received confirmation from them to the effect that they are not disqualified for holding the office of the Auditors.
The response of your Directors on the observations made by Statutory Auditor is as follows:-
The Director’s Identification Number (DIN) of some of the directors was deactivated during the year on account of non compliance of annual filing requirements in a private limited Company in which they are directors. The DIN of Directors was reactivated by the Ministry of Corporate Affairs after complying the necessary provisions of the Act in respect of the filing of the financial statements. The Directors of the Company ensure the compliance of all the applicable provisions of the Act even in respect of their directorship in other Companies in future.
b. Internal Auditor
Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of Companies (Accounts) Rules 2014, the Board of Directors of the Company had appointed Suresh Anchaliya & Company, to undertake the Internal Audit of the Company for the year ended March 31, 2019.
c. Secretarial Auditor
Pursuant to provision of Section 204 of the Companies Act, 2013 and rules made thereunder, the board has appointed Messrs Yogesh D. Dabholkar & Co. a firm of Company Secretaries in Practice (C.P.No. 6752) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure- E and forms an integral part of this Report.
The responses of your Directors on the observations made by the Secretarial Auditor are as follows:-Response to point No.1
Asian Star considers social responsibility as an integral part of its business activities and endeavors to utilize allocable CSR budget for the benefit of society. Asian Star CSR initiatives are on the focus areas approved by the Board benefitting the community. The Company is in the process of identifying the right charitable institutes to be associated with which has vis-a-vis same purpose as that of company CSR Policy. Due to non availability of viable projects during the year, the Company’s spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013. The CSR activities are scalable with few new initiatives that may be considered in future and moving forward the Company will endeavor to spend the complete amount on CSR activities in accordance with the statutory requirements.
Response to point No.2
As a part of the funding requirement, the company had agreed to give interest free loan to it’s wholly owned subsidiary in India. The management of the Company will take care of compliance of the provisions of the Act in respect of levy of interest on the loan granted to its wholly owned subsidiary.
Response to point No.3
The Director’s Identification Number (DIN) of some of the directors was deactivation during the year on account of non compliance of annual filing requirements in a private limited Company in which they are directors. The DIN of Directors was reactivated by the Ministry of Corporate Affairs after complying with the necessary provisions of the Act in respect of the annual filing requirements. The Directors of the Company shall ensure the compliance of all the applicable provisions of the Act even in respect of their directorship in other Companies in future.
Response to point No.4
The Company is law abiding entity, and is endeavor to file all required forms and returns with the Registrar in time. However, there have been few delays which the management ensures to take care in future. The Management is hopeful and committed to their level best to streamline the same in future.
Internal Control System and their Adequacy with reference to 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. A report on internal financial controls is provided in Annexure B to Independent Auditor’s Report.
Particulars of Loans, Guarantees or Advances
Details of Loans, Guarantees or Advances covered under the provisions of Section 186 of the Companies Act, 2013 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 Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges) & Companies Act, 2013 (‘the Act’). There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations.
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
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.
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 nevertheless 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.
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 2017-18, the Company has generated 197.57 lacs kwh resulting in the sales of Rs. 640 lacs.
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. 157,849 lacs in foreign exchange by way of exports, dividend and commission and has spent Rs.108,069 lacs in foreign exchange, for the import of raw materials, machinery & consumables, foreign travel, repairs and maintenance. The Directors are making their best endeavors to earn foreign exchange.
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 had 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 had prepared the annual accounts on a ‘Going Concern’ basis.
(v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively, and
(vi) The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
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 the applicable provisions of the Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges), 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.
The Equity Shares of the Company are listed on Bombay Stock Exchange Limited. The Company has paid listing fees for the year 2018-19.
Documents placed on the website
The following documents have been placed on the website: www.asianstargroup.com in compliance 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 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.
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 important assets.
Your Company continuously 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 2017-18, the Company has not received any complaint on sexual harassment.
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 the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Policy, as approved by the Board, is uploaded on the Company’s website: www.asianstargroup.com
No fraud has been reported during the year
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.
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.
114-C, Mittal Court, Nariman Point, For and on behalf of the Board
Mumbai - 400 021. Dinesh T. Shah
Place : Mumbai Chairman & CFO
Dated : May 24, 2018 DIN:00004685