The Directors' have pleasure in presenting the 29th Annual Report togetherwith Audited Accounts of the Company for the year ended on 31st March 2017.
(Rs. in lacs)
| ||31.03.2017 ||31.03.2016 |
|Gross Profit before Depreciation ||2547.88 ||1590.32 |
|Depreciation ||909.55 ||912.08 |
|Profit before Tax ||1638.33 ||678.24 |
|Provision for Tax ||- || |
|Current ||640.21 ||312.46 |
| MAT Credit ||243.94 ||132.39 |
| Deferred ||(20.25) ||(87.97) |
|Surplus available for appropriation ||1262.31 ||586.14 |
|Dividend (including Dividend Tax) ||184.15 ||184.15 |
|Amount transferred to General Reserve ||200.00 ||200.00 |
|Surplus carried to Balance Sheet ||878.16 ||201.99 |
FY 2016-17 was a challenging year for natural stone industry. Inspite of manydifficulties it has turned out to be a reasonably good year. We were successful inimproving the profitability of our business after a particularly challenging FY2015-16.Our display warehouse got fully operational during the year which was instrumental for usto remain profitable. Our volume fell by 4.17% to 6.2 lakh Sqm but our revenue increasedby 10.70% to Rs. 238.00 Crores indicating a better product mix. In the Slab segment ourrevenues increased by 15.40% to Rs 202.00 Crores during the year. The tiles segment thoughremained challenging during the year and the revenue dropped by 10.40% to Rs 36.00 Cores.Our warehouse has given us a competitive edge over our competitors. It helped usincreasing our products under display and in a way it has become our USP. During the yearwe started our CUT-TO-SIZE segment by installing 2 CNC bridge cutting machines. Weparticipated in international bids for many real estate commercial projects andsuccessfully generated business for this division. As a conscious strategy we aregradually ramping up our production so that our team gets used to delivering the rightquality product on time. We are very optimistic about this segment and over the next 2years aim to scale it to 15-20% of our overall business. The margins in this segment aremuch higher and over time this will help us improve our overall margins.
We took various steps for cost optimisation and one such initiative was to reduce ourpower cost. Our regular power requirement is 5 MWh. Earlier we were buying the entirepower from TNEB at prescribed tariffs. Now we have signed a contract for wind power supplywith a private party under the open access scheme. We are hopeful that this newarrangement is likely to save us Rs.10-11 lakhs a month for 11 months of the year. For themonth of April alone we must draw power from TNEB. Domestic sales are 8% of our revenue.
Your Directors have recommended a dividend of Re. 1/- (i.e. 10%) per Equity Share ofRs. 10/- each (last year Re. 1/- per Equity Share) for the financial year ended 31stMarch 2017 amounting to Rs.184.15 lacs /- (inclusive of tax of Rs. 31.15 lacs). TheDividend payout is subject to approval of members at the ensuing Annual General Meeting.
The dividend will be paid to the members whose name appear in the Register of Membersas on 18.09.2017 and in respect of shares held in dematerialised form it will be paid tomembers whose name is furnished by National Securities Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL) as beneficial owners as on that date.
The Company has not accepted any fixed deposit from the public.
LOANS GUARANTEES AND INVESTMENTS
The Company has not granted any Loans Guarantees and made any Investments during theyear.
RELATED PARTY TRANSACTIONS
All contracts/arrangements and transactions entered by the Company with related partieswere in ordinary course of business and on arm's length basis. Your Directors drawattention of the members to Notes to accounts of financial statement which sets outrelated party disclosures. The Related Party Transactions Policy as approved by the Boardis available on the website of the Company www.arotile.com.
Shri Kasturi Lal Arora resigned from Board of Directors of the Company with effect from25th January 2017. The Board records its appreciations for the valuable servicescontributed by him.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act 2013 your Directors statethat:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) the accounting policies have been selected and applied consistently and judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the said Act for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) the internal financial controls to be followed by the Company have been laid downand that such internal financial controls are adequate and were operating effectively; and
f) the proper systems to ensure compliance with the provisions of all applicable lawshave been devised and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by the Company which has been approved by the Board. The CSR policy may beaccess from the website of the Company i.e. www.arotile.com. The Annual Report on CSRactivities is annexed herewith marked as
AUDITORS AND AUDITORS' REPORT
(a) Statutory Auditor
M/s Alok Mittal & Associates Chartered Accountants Statutory Auditors of theCompany has completed the tenure as permissible under Companies Act 2013.The newStatutory Auditor will be appointed in place of the retiring auditor in due course oftime. The Notes on the financial statements referred to in the Auditors' Report are selfexplanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservations or adverse remark.
(b) Secretarial Auditor
Practising Company Secretary Ms. Latika Jetley (CP No. 3074) appointed as theSecretarial Auditor by the Board for the finanial year 2016-17 to conduct the SecretarialAudit. The Secretarial Audit Report for the year 2016-17 is annexed herewith as AnnexureII. The Secretarial Audit Report does not contain any qualification reservations oradverse remark.
(c) Internal Auditor
The Board has appointed M/s Sreekantha & Co. Chartered Accountants Hosur as theInternal Auditor of the Company for the year 2016-2017.
Auditors' Certificate on Corporate Governance
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Auditors' Certificate on Corporate Governance is enclosed as Annexure III tothe Boards' Report. The Auditors' Certificate for the year 2016-17 does not contain anyqualifications reservations or adverse remarks.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the period under review there were no significant and material orders passed bythe Regulators or courts or tribunals which would impact the going concern status of theCompany and its future operations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Additional information on conservation of energy technology absorption foreignexchange earnings and outgo as required as per the provisions of Companies Act 2013 andRules there under is annexed herewith in Annexure IV and form part of this report.
EXTRACT OF THE ANNUAL RETURN
The Extract of annual return of the Company in form MGT 9 is annexed herewith as AnnexureV to this report.
PARTICULARS OF REMUNERATION
Statement of particulars of employee pursuant to the provisions of section 197 of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 for the year ended 31st March 2017.
Employed throughout the year ended 31st March 2017 in receipt ofremuneration not less than One Crore two Lakh rupees per annum.
|Name ||Age ||Qualification ||Experience ||Date of Commencement Employment ||Designation ||Remuneration ||Last Employment |
|Mr. Sunil K Arora ||59 Years ||B.Sc ||30 Years ||03.05.1988 ||Managing Director ||17080509 ||Since Inception |
Pursuant to the provisions of Section 197 (12) of the Companies Act 2013 read withRule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014the details regarding the ratio of remuneration of each Director to the median employee'sremuneration and such other details as required therein are as under:
1 The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year: The Board of Directors of the Companycomprises of Non-executive Directors who has been paid commission in the form ofRemuneration and sitting fee from the company.
|SI. No. ||Name ||Ratio to median remuneration |
|1. ||Shri Sunil K Arora Managing Director ||699.849 |
|2. ||Shri Kasturi Lal Arora ||32.052 |
|3. ||Shri Dinesh Chandra Kothari ||1.844 |
|4 ||Shri Rahul Gupta ||7.785 |
|5 ||Shri Kanwaljit Singh ||7.785 |
|6 ||Smt Sujata Arora ||46.617 |
|7 ||Shri K Raghavendra Acharya Executive Director ||62.321 |
|8 ||Smt Vanita Sood ||4.097 |
2 The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary in the financial year: The Board of Directors of the Company comprisesof Non-executive Directors who has been paid Commission and sitting fee from the company.
|SI. No. ||Name ||% Increase in Remuneration |
|1. ||Shri Sunil K Arora Managing Director ||18.61 |
|2. ||Shri Kasturi Lal Arora ||1322.29 |
|3. ||Shri Dinesh Chandra Kothari ||-70.97 |
|4 ||Shri Rahul Gupta ||-5.00 |
|5 ||Shri Kanwaljit Singh ||90.00 |
|6 ||Smt. Sujata Arora ||712.67 |
|7 ||Shri K Raghavendra Acharya Executive Director ||4.51 |
|8 ||Smt. Vanita Sood ||-4.76 |
|9 ||Shri Sabyasachi Panigrahi Company Secretary ||4.51 |
|10 ||Shri S Sundara Rajan CFO ||4.51 |
3. The percentage increase in the median remuneration of employees in the financialyear: (-) 19.36.
4. The number of permanent employees on the roll of company: 139
5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the financial year ended 31st March 2017 was 6.92%.
6. The Company affirms that the remuneration is as per the remuneration policy of theCompany.
Including details pertaining to Board Meetings Nomination and Remuneration PolicyAudit Committee and Vigil Mechanism
Your Company re-affirms its Commitment to the highest standards of Corporate Governancepractices. Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a Management Discussion and Analysis Corporate Governance Report and Auditors'Certificate regarding compliance of conditions of Corporate Governance are made a part ofthis Annual Report.
The Corporate Governance Report which form part of this report also covers thefollowing: a) Particulars of the Four Board Meetings held during the financial year underreview. b) Policy on Nomination and Remuneration of Directors Key Managerial Personneland Senior Management. c) The details with respect to composition of Audit Committee andestablishment of Vigil Mechanism.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements and no material reportable weakness was observed in the system.Further the Company has in place adequate internal financial controls commensurate withthe size and nature of its operations. The Company also has robust Budgetary ControlSystem and Management Information System (MIS) which are backbone of the Company forensuring that your Company's assets and interests are safeguarded.
The Equity Shares of the Company are listed in BSE Limited and National Stock Exchangeof India Limited. Listing fees for the year 2017-2018 have already been paid to BSELimited and National Stock Exchange of India Limited.
Your Directors wish to thank and acknowledge the Banks Government AuthoritiesDealers Suppliers Business Associates and the Company's Valued Customers for theirassistance and cooperation and the esteemed Shareholders for their continued trust andsupport. The Directors also wish to acknowledge the committee and dedicated team of AroGranite whose unstinted work efforts and ideas have taken the Company on a path of steadygrowth and development.
| ||For and on behalf of the Board || |
|Place: Hosur ||Sunil K Arora ||Sujata Arora |
|Date: 22.04.2017 ||Managing Director ||Director |