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Chairman's Message

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"The only constant in the middle of these turbulent market conditions was AIS’s continued belief in its ability to stay focussed and keep its eyes and ears closer to the ground to sense and pick up the signals about the changing market trends and customer requirements."

Dear Shareholders,

I believe focus is the key to success in an era where there are impediments at every step. Successful companies are those that can overcome and outlast business challenges and emerge stronger. Overcoming challenges require one critical strength – FOCUSSED EXECUTION.

Companies also need to prudently judge the way forward after a thorough examination of its strengths and correcting its weaknesses. Also, companies need to take measures well in time to protect market share and grow further. From following a long-term vision based on a set of core values to carefully focusing on execution strategies, AIS has been charting a distinct growth trajectory over the years.

Globally, the favourable macro-economic conditions gathered pace in FY 2017-18 with many countries experiencing a synchronized upturn in growth. More importantly, most of the developed economies such as the US, EU, Japan, have witnessed improved growth conditions. China, which was a worrying factor in the previous fiscal, also posted better than expected growth figures in the year, adding to the buoyancy in the global market conditions. Global GDP growth in FY 2017-18 was pegged at 3.7%, up by 0.6% from the previous fiscal.

The Indian economy grew at 6.6% in FY 2017-18 with an expectation to grow 7.4% in FY 2018-19. In early 2017 India was projected to be fastest growing economy in Asia, at 7.4% while China was expected to grow by 6.5% or less. Instead, higher oil prices bumps from financial and fiscal measures lowered growth of Indian economy to approx. 6.6% in FY 2017-18.

Each year brings its own happy tidings and challenges and FY 2017-18 was no different. The only constant in the middle of these turbulent market conditions was AIS’s continued belief in its ability to stay focussed and keep its eyes and ears closer to the ground to sense and pick up the signals about the changing market trends and customer requirements. No doubt, this has helped AIS to come up with innovative solutions and value added products which are a fusion of complex and sophisticated technology along with better aesthetics.

The Indian auto industry is one of the largest in the world. Domestic passenger vehicle sales increased 7.9% year-on-year in FY 2017-18. AIS continued to be most preferred supplier of automotive glass to almost all OEMs in India. The glass industry in India is poised for sustained growth, powered by long term demand for automotive and construction segments. Increase in income levels and availability of a range of financing options is rising aspiration enabling rapid growth in auto and construction segments. Last year saw major change in tax regime with the introduction of GST and I am glad to announce that AIS has smoothly implemented the transition.

Riding on these positive trends in the domestic auto and building sectors, your Company could achieve a healthy performance in FY 2017-18. AIS's consolidated revenue saw a 4% increase to ` 2703.05 crores in FY 2017-18 as compared to ` 2598.55 crores in the previous financial year. Net profit before tax increased by 20.7% to ` 268.66 crores from ` 222.68 crores in FY 2016-17. Correspondingly, EBIDTA improved 9.2% to ` 487.17 crores whilst net profit after tax rose 18.6% to ` 177.38 crores in FY 2017-18.

AIS has always invested ahead of demand and has always remained customer ready to ride the next wave of growth. AIS has a successful track record of profitable growth and has maintained “numero uno” position in automotive glass segment for last 3 decades. We also continue to analyze the recent past and constantly re-examine past decisions taken to make necessary amendments wherever required. One of AIS’s strengths has been operational excellence and we are committed to making continuous improvements and costs optimization to keep AIS aligned to the needs of the market.

Continuing AIS’s strategy of adding capacities ahead of demand, the Company continues to make significant investments to create additional manufacturing capacities in some of the segments. Our Taloja plant refurbishment with state-of-the-art was completed in Q3 of FY 2017-18 which has enhanced the production capacity of float glass by 550 metric tons per day and has enabled us to serve our customers with superior quality value added float glass of complex varieties and caters to our needs internally by way of supplies of raw glass for automotive applications. The 5th automotive plant in Gujarat with 2.4 million capacity of each laminated windshields and tempered glass sets is underway and will commence its operation of the first phase in Q1 of FY 2019-20.

I am happy to report that in FY 2017-18, AIS has worked on developing and introducing several new technology products which are trendsetters for Indian market.

AIS continued to receive appreciation and motivation from OEM customers by way of their various awards conferred on AIS. Even though the awards are testament to our continuous efforts, it will further serve as a constant reminder for us to continually set benchmarks to serve customer requirements.

AIS faced a challenging year but continued to deliver on its promises ending this year on a good note. The yardsticks for measuring the real success of any company is the level of trust and satisfaction of its customers and the value creation provided to the company’s shareholders and stakeholders. In this context, I am happy to report the year-by-year increase in market share of AIS in various segments of its operations as a true reflection of the rising trust and satisfaction of its customers. I am equally proud to report AIS’s commendable social development activities at various places including Bawal and Roorkee to support, equip and empower young and not-so-young population of these villages through educational, skill development and other training programs.

During the year, Mr. Masaru Omae, Nominee Director of AGC Japan, resigned from Board of Directors & returned to Japan and Mr. Satoshi Ogata joined the AIS Board. I am sure his rich and wide experience and expertise will add immense value to the Board.

In view of the financial performance of AIS in FY 2017-18, and in line with AIS's Dividend Policy Board has recommended a final dividend of ` 1.5 per share.

AIS has always believed that our people are our partners at all times. During the last year also, we continued to maintain well-coordinated team efforts with a common outlook towards continued growth and higher productivity. Each employee is akin to a partner at AIS and I am proud that each one of us have contributed to AIS’s growth with our very own unique skills and contributions.

As we move ahead in the future, we are confident of the profitable growth opportunities that lie ahead of us. AIS is well positioned to seize this opportunity. On behalf of the Board, I would like to thank all our stakeholders including our customers, employees, partners, suppliers, shareholders, policy makers and the communities around our various manufacturing facilities for their continued support to AIS in FY 2017-18. We continue to look forward for your support and encouragement in the coming years as well.

With Best Regards

B. M. Labroo

Chairman