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Aro Granite Industries Ltd.

BSE: 513729 Sector: Others
NSE: AROGRANITE ISIN Code: INE210C01013
BSE 00:00 | 22 Oct 39.60 -1.45
(-3.53%)
OPEN

39.20

HIGH

40.15

LOW

39.00

NSE 00:00 | 22 Oct 39.80 -2.20
(-5.24%)
OPEN

40.00

HIGH

40.30

LOW

38.95

OPEN 39.20
PREVIOUS CLOSE 41.05
VOLUME 4946
52-Week high 60.35
52-Week low 29.60
P/E 5.99
Mkt Cap.(Rs cr) 61
Buy Price 39.50
Buy Qty 200.00
Sell Price 40.00
Sell Qty 1000.00
OPEN 39.20
CLOSE 41.05
VOLUME 4946
52-Week high 60.35
52-Week low 29.60
P/E 5.99
Mkt Cap.(Rs cr) 61
Buy Price 39.50
Buy Qty 200.00
Sell Price 40.00
Sell Qty 1000.00

Aro Granite Industries Ltd. (AROGRANITE) - Director Report

Company director report

The Directors' have pleasure in presenting the 30th Annual Report togetherwith Audited Accounts of the Company for the year ended on 31st March 2018.

FINANCIAL RESULTS

31.03.2018 31.03.2017
Gross Profit before Depreciation 993.63 2547.88
Depreciation 865.03 909.55
Profit before Tax 128.60 1638.33
Provision for Tax -
Current 54.02 640.21
– MAT Credit - 243.94
– Deferred (42.75) (20.25)
Surplus available for appropriation 117.33 1262.31
Dividend (including Dividend Tax) - 184.15
Amount transferred to General Reserve - 200.00
Surplus carried to Balance Sheet 112.35 878.16

WORKING RESULTS

Financial year 2017-18 was a tough year with many macro headwinds impacting theoperational performance of the Company. The revenue of your Company declined by 15.89%from Rs.238.65 Cr in FY16-17 to Rs. to Rs.200.72Cr in FY17-18.The profitability of theCompany was also impacted with its EBITDA declining by 55.08% from Rs.30.68 Cr in FY16-17to Rs.13.78 Cr in FY17-18. Our Net Profit declined from Rs 12.62 Cr in FY16-17 to Rs 1.17Cr in FY17-18. We commenced commercial production from our 72 wire - Multi Wire which hasenabled us to enter the high value market of Quartzite's. These quartzite have a lowerlevel of competition where focus is more on Quality than Price. Due to the Cash Flowcrunch caused by the delayed refunds of Input Credit in the GST regime we are takingseveral steps into our cash flow management the effect of which will be seen in FY2018-19. Our Cut to Size division is picking up with over 40 projects being completedduring the year. This will help us further in the coming years as our reputation in thisline grows.

Though the Industry is going through its most difficult time in over three years wehave been able to maintain above industry average sales and that is largely due to thesuccess of our new warehouse. The 11000sqm showroom enables us to display all our stockswhich helps us make sales even better in these difficult times.

DIVIDEND

In view of the lower profitability the Board of Directors of the Company has notrecommended any Dividend for the year 2017-18.

FIXED DEPOSIT

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.

DIRECTORS

During the year Shri Sahil Arora (DIN 07970622) appointed as an Additional Directorwith the Designation of Whole Time Director for the period of three years with effect from01.11.2017. Shri Sundareshwara G. Sastry (DIN 00165762) appointed as an IndependentDirector for a period of Five years with effect from 28.10.2017.

Shri Kanwaljit Singh Independent Director resigned from Board of Directors of theCompany with effect from 16th November 2017. The Board records its appreciations for thevaluable services contributed 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 Annexure I.

AUDITORS AND AUDITORS' REPORT

(a) Statutory Auditor

M/s VAPS & Company. Chartered Accountants New Delhi was appointed as theStatutory Auditors of the Company for a period of Five Years from the Conclusion of TwentyNinth Annual General Meeting. The Notes on the financial statements referred to in theAuditors' Report are self-explanatory and do not call for any further comments. TheAuditors' Report does not contain any qualifications reservations or adverse remark.

(b) Secretarial Auditor

Practising Company Secretary Ms. Latika Jetley (CP No. 3074) was appointed as theSecretarial Auditor by the Board for the finanial year 2017-18 to conduct the SecretarialAudit. The Secretarial Audit Report for the year 2017-18 is annexed herewith as AnnexureII. The Secretarial Audit Report does not contain any qualifications reservations oradverse remark.

(c) Internal Auditor

The Board had appointed M/s Sreekantha & Co. Chartered Accountants Hosur as theInternal Auditor of the Company for the year 2017-2018.

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 2017-18 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 formMGT 9 is annexed herewith as Annexure V 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 2018.

Employed throughout the financial year ended 31st March 2018 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 31 Years 03.05.1988 Managing Director 16488088 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 of

Remuneration and sitting fee from the Company.

SI. No. Name Ratio to median remuneration
1 Shri Sunil K Arora Managing Director 659.392
2 Shri Sundareshwara G Sastry 3.999
3 Shri Dinesh Chandra Kothari 2.599
4 Shri Rahul Gupta 8.798
5 Smt. Sujata Arora 5.999
6 Shri K Raghavendra Acharya Executive Director 63.333
7 Smt. Vanita Sood 7.998
8 Shri Sahil Arora 35.993

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 -3.46
2 Shri Dinesh Chandra Kothari 44.44
3 Shri Rahul Gupta 15.79
4 Smt. Sujata Arora -86.82
5 Shri K Raghavendra Acharya Executive Director 4.14
6 Smt. Vanita Sood 1.00
7 Shri Sabyasachi Panigrahi Company Secretary 4.14
8 Shri S Sundara Rajan CFO 4.14

3. The percentage increase in the median remuneration of employees in the financialyear: (-) 14.17.

4. The number of permanent employees on the roll of Company: 137

5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the financial year ended 31st March 2018 was 7.00%.

6. The Company affirms that the remuneration is as per the remuneration policy of theCompany.

CORPORATE GOVERNANCE including details pertaining to Board Meetings Nomination andRemuneration Policy Audit 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 under review.

b) Policy on Nomination and Remuneration of Directors Key Managerial Personnel andSenior Management.

c) The details with respect to composition of Audit Committee and establishment ofVigil 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.

LISTING

The Equity Shares of the Company are listed in BSE Limited and National Stock Exchangeof India Limited. Listing fees for the year 2018-2019 have already been paid to BSELimited and National Stock Exchange of India Limited.

ACKNOWLEDGEMENT

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 committed 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: 21.04.2018 Managing Director Director