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The Directors' have pleasure in presenting the 21 st Annual Report together with the Audited Financial statements for the year ended 31st March, 2015. The Corporate Governance Report and Management Discussion and Analysis form an integral part of this report
For the year ending 31st March, 2015, Operating profit i.e. EBITDA is Rs.5,352.52 lakhs, against Operating Profit of Rs.3,496.34 lakhs in preceding year 2013-14. Profit after Tax is Rs.1,477.43 lakhs for the year 2014-15, compared to Profit after Tax of Rs.862.05 lakhs reported for 2013-14.
For the year ending 31st March, 2015, Operating profit i.e. EBITDA is Rs.5,504.55 lakhs, against Operating Profit of Rs.3,574 lakhs in preceding year 2013-14. Profit after Tax is Rs.1,478.26 lakhs for the year 2014-15, compared to Profit after Tax of Rs.865.16 lakhs reported for 2013-14.
The Directors recommend the dividend of 12.5% on Equity Shares (Rs.1.25/- per share of Rs.10/-each) for the year ended on 31st March, 2015. The dividend tax on the proposed dividend is Rs.49.79 lakhs makingtotal outgo of Rs.292.98 lakhs. The payment of dividend will be paid subject to the approval of the shareholders at the ensuing Annual General Meeting. Company was not required to transfer any amount to Investor Education and Protection Fund as there is no amount lying Unpaid/Unclaimed in the Unpaid Dividend Account for morethan 7years.
Cash and Bank balances as at 31st March, 2015 was Rs.1,121.61 Lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
5. Particulars of loans, guarantees or investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
6. Share Capital
The paid up Equity Share Capital as on 31st March, 2015 was Rs.19,45,50,550/-. During the year under review, the Company has issued 9,25,925 Equity Shares on Preferential Basis to the persons belongingto Non-Promoter Group.
7. Management Discussion and analysis and Corporate Governance Report
As per clause 49 of the Listing Agreement with Stock Exchanges, a separate section on Management Discussion & Analysis and Corporate Governance Report, together with a certificate from the Practicing Company Secretary confirming compliance formsan integral part of this Report.
8. Public Deposits:
The company has not accepted any deposits and as such there are no overdue deposits outstanding as on 31st March, 2015.
9. Subsidiary Companies:
Your Company has following Subsidiary Companies:
a) Astec Crop Care Private Limited (a 100% subsidiary company) with the main object to start the business of trading in Agrochemicals formulation to sell in local as well as in export market with its own brand name. For the year ending 31 st March, 2015, Operating Profit ie. EBIDTA is of the order of Rs.243.27 lakhs, as against Operating Profit of Rs l 49.65 lakhs in the preceding year 2013-14. Profit before Tax is Rs.7.11 lakhs for the year 2014-15, compared to Profit of Rs.17.58 lakhs reported for 2013-14.
b) Behram Chemicals Private Limited, is a 65.63% subsidiary of Astec Life Sciences Limited and has a manufacturing facility at Mahad. This facility is given to Astec Life Sciences Limited, on lease.
The Company also has foreign subsidiary companies primarily to pursue grant of licenses and product registrations in conformity with the local lawsof respective countries/regions.
c) Astec Europe Sprl is 50.10% subsidiary of our Company which is engaged in product registration activities. The Company is yet to start any major commercial activity.
d) Comercializadora Agricola Agroastrachem Cia Ltda in Bogota, Columbia is 100% subsidiary of our Company with a main object of product registration activities. The company is yet to start any any commercial activity.
Report on the performance and financial position of each of the subsidiary companies included in consolidated financial statement forms a part of the Directors Report and is annexed herewith in Form AOC-1 as "Annexure A".
10. Consolidated financial statements
The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accou ntants of I nd ia form pa rt of th is An n u a I Re po rt.
11. Material Subsidiary Policy
The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding accounting year or has generated 20% of the consolidated income of the Company during the previous financial year. The Board has formulated a policy on material subsidiaries as required by the Companies Act, 2013 and in compliance with Listing Agreement which is made available on the website of the Company (www.astecls.com).
The Audited Annual Financial Statements of Subsidiary Companies are tabled at the Audit Committee and Board Meetings. Copies of the Minutes of the Board Meetings of Subsidiary Companies are individual ly given to all the Directors and are tabled at the subsequent Board Meetings.
The Company had pursuanttothe provision of Clause49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. Sitendu Sharma, Mr. Mohammed Zakir, Mr. VTnod Malshe and Mr. Mandar Patil and Dr. Leena Rajeas Independent Directors of the Company for the period of one year at the last Annual General Meeting. On recommendation of the Nomination & Remuneration Committee and in accordance with the provisions of section 149 of the Act, these directors need to be re-appointed as Independent directors to hold office for a term of 5years at the forthcoming Annual General Meeting (AGM) of the Company. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed Mr. Ashok V. Hiremath as Chairman & Managing Director and Mr. Janak Rawal as Whole Time Director with effect from 2Oth January, 2015 upto 19th January, 2018 subject to the approval of Shareholders at the General Meeting. In accordance with the provisions of the Companies Act, 2013 and in terms of Memorandum and Articles of Association of the Company, Mr. Ashok V. Hiremath and Mr. Janak Rawal wil I not be liable to retire by rotation and are eligible for re-appointment.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Laxmikant Kabra, Non-Executive Non-Independent Director retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment.
Appropriate resolutions forappointment/reappointment of the aforesaid Directors are being moved at theensuing Annual General Meeting, which the Board recommendsforyourapproval.
During the year Nine Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as welI as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration various aspects of the Board's functioning, composition of the Board and its committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Chairman & Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
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. Director's Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the fol lowing statements in terms of Section 134(3 )(c) and 134(5} of the Companies Act, 2013:
a. that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. that they have, in selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimated 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 profit of the Company forthat period;
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 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.
14. Auditors Statutory Auditors:
The Company's Auditors, M/s. Shah &Kathariya, Chartered Accountants, Mumbai, who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. As required under the provisionsof Section 139 & 141 of the Companies Act, 2013 and the Rules framed there under, the Company has obtained written confirmation from M/s Shah &Kathariya, Chartered Accountants that their appointment, if made would be in conformity with the limits specified in the said section. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board recommends the re-appointment of M/s Shah &Kathariya as the Statutory Auditors of the Company for the financial year 2015-2016. In this connection, the attention of the members is invited to Item No. 5 of the Notice of AGM.
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed M/s NNT &
Co., Cost Accountants of the Company for the financial year 2015-2016 on a remuneration of Rs.40,000/- (Rupees Forty Thousand Only) plus service tax, as applicable. As required under the Companies Act, 2013, the remuneration pay able to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member's ratification for the remuneration payable to Cost Auditors is included at Item No.11 <http://No.11> of the Notice convening the Annual General Meeting. The Cost Audit Report would be filed with the Central Government within 180 days of the closure of financial year.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Vikas R. Chomal & Associates, a firm of Company Secretaries in Practice (CP. No.12133) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as"Annexure B". There is no audit qualification for the year under review.
15. Composition of Audit Committee
Aud it Committee comprises of Mr. Sitendu Sharma, Chairman of the Committee, Mr. Laxmikant Kabra, Mr. Mohammed Zakir and Mr. Mandar Patil. Audit Committee Meetings were held 4 times during the year 2014-15 on 30th May, 2014, 9th August, 2014, 18th October, 2014 and on 31st January, 2015. Board has accepted al I the recom mendations of the Audit Comm ittee.
16. Corporate Social Responsibility CSR Committee & Policy:
Corporate Social Responsibility Committee of the Company comprises of three directors Mr. Vinod Malshe, Non-Executive Independent Director, Mr. Laxmikant Kabra Non-Executive Non-independent Director, Mr. Sitendu Sharma, Non-Executive Independent Director. Corporate Social Responsibility Pol icy as approved by the Board is uploaded on the website of the Company (www.astecls.com ).
As a part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken project(s) in the areas of Education, Environment, Health, Water and Sanitation and other Social Economic activities. Astec has volunteered its resources to the extent that it can reasonably afford, attain & improve health, environment, social initiatives and education, which will help improve the quality of life, of the people around the areas in which it operates. These projects are in accordance with Schedule VII of the Companies Act, 2013. One of the projects for betterment of health and sanitation facilities in Asanpoi ZP School at Mahad includes the following:
? Construction of new toilets (SAN ITATION)
Construction of new toilets and urinals in the school along with a septic tank and soak pit
? Providingclean and hygienic drinking water (HEALTH)
Astec will provide water cooler with purification system. This will help in improving the intake of clean & hygienic water.
? Providing support for further education to deserving students (EDUCATION)
Deserving students will be supported financially for further studies by the Company. This will be judged based on the performance in aptitude tests of the students and also his/her family income.
? Providingoverhead projector system alongwith Desktop.
Company has transferred Rs.11,32,200/- to a separate bank account specifical ly designated for CSR activities.
Annual Report on CSR Activities:
The Annual Report on CSR activities is annexed herewith as "Annexure C".
17. Risk Management:
Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. Our Company continuously monitors business and operational risk. All key functions and divisions are independently responsible to monitor risk associated within their respective areas of operations such as production, insurance, legal and other issues like health safety and environment. Company has form u I ated Risk Management Policy for identification of risks and has formed a Risk Management Committee in order to ensure implementation of the policy and review is done every quarter. Risk Management Policy is also made available on the website of the Company (www.astecls.com ).
18. Related Party Transaction:
Al I related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained annually forthe transactions which are of a foreseen and repetitive nature. The Company has developed a Related Party Transactions Pol icy for purpose of identification and monitoringof such transactions.
The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company.
The Company does not have contracts or arrangements with its related parties under Section 188(1) of the Companies Act, 2013, which are not on arms' length basis. Hence the details of such contracts or arrangements with its related parties are not disclosed in Form AOC-2 as prescribed under the Companies Act, 2013 and the rules framed there under. Directors draw attention of the shareholders to Note No.31 of the financial statement which sets out related party disclosures.
19. Nomination and Remuneration Committee
Company has constituted its Nomination and Remuneration Committee comprising of Mr. Mohammed Zakir, Chairman, Mr. Vinod Malshe & Mr. Laxmikant Kabra, all Non-Executive Directors in compliance with provisions of Companies act, 2013 and the Committee has formulated the Nomination and Remuneration policy on director's appointment and remuneration including determining qualifications, positive attributes and independence of directors, and of key managerial personnel and other Senior employees of the Company. Nomination and Remuneration Policy as approved by the Board is made available on the website of the Company (www.astecls.com).
20. Whistle Blower Policy/Vigil Mechanism
The Company has a vigil mechanism named Whistle Blower Policy which provides adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to Mr. Sitendu Sharma, Chairman of the Audit Committee, in appropriate or exceptional cases. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company (www.astecls.com).
21. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of TheSexual 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. There were no sexual harassment complaints received during the year 2014-15.
22. Managerial Remuneration
It is hereby confirmed that the remuneration paid is as perthe Nomination and Remuneration policy for Directors, Key Managerial Personnel and other Employees.
25. Extract Of Annual Return
Pursuant to Section 92 of Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in form MGT9 is annexed herewith as "Annexure D".
26. Explanations or comments by the Board on every qualification, reservation or adverse remarkordisclaimer made
There are no adverse remarks or qualifications, reservations, remarks or disclaimer made by either Statutory Auditors or Secretarial Auditors in their reports and therefore no explanations are required to be given by the Board of Directors
27. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and date of report (form 1 st April 2015 to the date of sign i ng of report)- if any
There are no material changes and commitments other than the information already published in public domain. Company has given necessary intimations and information to Stock Exchanges from time to time.
28. Employee Stock Options Plans
The Company has introduced ESOPScheme called Astec Employees Stock Option Plan 2012 with the approval of shareholders in the extra ordinary general meeting held on 27th March, 2012 at a price of Rs.34/- per option. The Employees Stock Options Committee of the Board administers and monitors the Employees Stock Option Scheme, 2012. The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be placed at the Annual General Meeting for inspection by members.
The Company is planning to implement Employee Stock Option Scheme 2015 (ESOS 2015). Necessary Resolutions forthe Approval of the Scheme are being moved at the ensuing Annual General Meeting, which the Board recommends for your approval.
29. Listing Fees:
The Company has paid requisite annual listing fees to BSE Limited and National Stock Exchange where its securities are listed.
30. Research and Development:
Your Company continues to focus on R&D. We believe that a productive R & D is a key ingredient for success. Duringtheyeara number of new products were developed and many cost reduction schemes were initiated.
31. Significant and material orders passed by the regulatorsor 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.
32. Conservation of Energy, 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 of The Companies (Accounts) Rules, 2014, is annexed herewith as"AnnexureE".
a) Conservation of Energy, etc: Steps have been taken to reduce the power consumption of agitators and pumps. Efficiency improvements were effected in our boilers and condensate recovery systems were installed.
b) Technology Absorption: Amajority of the technologies utilized byyourCompany are developed by in-house R&D department. Some processes have been provided by potential customers and those have been suitably absorbed.
c) Foreign Exchange Earnings and outgo:
1. Activities relating to Export, initiatives to increase exports, Development of new export markets for products and services and Export promotion plans:
The company is constantly trying to increase its exports; Strategic alliances are made with various parties to increase exports. The company is obtaining registration in various parts of the world. During the year, the company had exports (FOB value) of Rs11,272 lakhs.
Your Directors wish to record their appreciation for the support and co-operation received from the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for excellent support received from them during the year. Your Directors express their warm appreciation to all the Employees of the Company for their unstinted commitment and continued contribution to the Company.
34. Cautionary statement
Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
For and on behalf of the Board of Directors
Sd/- Ashok V. Hiremath
Chairman & Managing Director
Date: 16/3 /2015