The Directors have pleasure in presenting the 35th Annual Report together
with Audited Accounts of the Company for the year ended on March 31, 2023.
FINANCIAL RESULTS
(Rs in lakh)
Particulars |
31.03.2023 |
31.03.2022 |
Gross Profit before Depreciation |
682.05 |
2,351.31 |
Depreciation |
1,272.74 |
1,273.74 |
Profit before Tax |
(590.69) |
1,077.57 |
Provision for Tax |
- |
- |
Current |
- |
190.57 |
MAT Credit |
- |
(190.57) |
Deferred |
(11.88) |
186.98 |
Surplus available for appropriation |
(578.81) |
890.59 |
Dividend (including Dividend Tax) |
- |
- |
Amount transferred to General Reserve |
- |
- |
Surplus carried to Balance Sheet |
(578.81) |
890.59 |
WORKING RESULTS
2022-23 witnessed many challenges which the company hopes will be solved in the coming
years.
The year started off with container prices rising to a record high, with our customers
paying as much as 12,000 to 18,000 USD per TEU (20' container). This amounts to an average
of 47% of the landed cost of goods being freight. This made the sales of budget and lower
cost goods plummet.
The Quartz plant also ran into trouble when USA announced an interim duty of 162% in
annual review 1 (AR1) on Quartz from India. This shuttered the plant for up to 6 months as
we waited for the final duties to be ratified. The duty levied due to a clerical error
from the representative of the largest exporter of quartz from India which resulted in
them getting a 323% duty - which averages to "All others" a rate of 162%. In
January of 2023 however the DOC wisely decided to revert the "All others" rate
to that of the initial investigation.
Our quartz customers in USA, during the 7 months of duty related issues, had already
explored other countries like Vietnam, Malaysia, Thailand, Turkey etc. and already started
purchases from there. It took an additional 2 months for orders to return to India and we
were able to restart production in a large scale in March 2023.
Europe went through a major energy crisis as the war in Ukraine continued. This led to
an increase in fuel and electricity costs which caused the real estate market to react
negatively, reducing our customers' sales. Further post pandemic many western European
countries have been facing a severe worker shortage and that issue continues now also.
As stimulus checks dried up and the interest rates in both USA and Europe continued to
rise, there has been a negative impact in the real estate markets of certain parts of
these regions. However, a good sign is that the market for renovations is continuing to be
strong.
By early 2023 freight rates took a steep nosedive from an average of over USD10,000 to
USD 2,000 and in some parts of Europe even lower than USD 1,000. This has caused some
customers to have above market price inventory and as they continue to buy cheaper new
inventory, they are facing space issues in their warehouses. Due to the steep dive in
freight prices, customers with higher valued stocks are facing difficulties in sales which
impact on us indirectly.
Being a 100% Export Oriented Unit, the slowdown in USA and European markets have
impacted the business adversely in the FY 2022-2023.
During the year we went through and were able to clear the following hurdles:
1. High Freight Rates
2. Duty on Quartz
3. Stabilisation of Europe even with the war
With the above Hurdles cleared and Interest rates expected to come down in the coming
quarters we expect a stable 2023 and things to pick up by 2024.
DIVIDEND
Your directors have not recommended any dividend for the year 2022-2023.
INVESTOR EDUCATION AND PROTECTION
FUND (IEPF)
During the year amount of 3,45,958/- for the Financial Year 2014-15 transfer to
Investor Protection Fund under subsection (2) of section 125 of the Companies Act 2013 and
IEPF (Accounting, Audit, Transfer and Refund) Rules 2016. Shri Sabyasachi Panigrahi,
Company Secretary is the Nodal Officer appointed by the Company under the Provisions of
the IEPF Act.
FIXED DEPOSIT
The Company has not accepted any fixed deposit from the public.
ANNUAL RETURN
The Annual Return referred to Section 134(3)(a) as per the Companies Act 2013 is
available on the website of the Company www.arotile.com
LOANS, GUARANTEES AND INVESTMENTS
The Company has not granted any Loans, Guarantees and made any Investments during the
year.
RELATED PARTY TRANSACTIONS
All contracts/arrangements and transactions entered by the Company with related parties
were in ordinary course of business and at arm's length basis. Your Directors draw
attention of the members to Notes to accounts of financial statement which sets out
related party disclosures. The related Party Transactions Policy as approved by the Board
is available on the website of the Company www.arotile.com.
DIRECTORS
During the year, there was no change in the Directorship of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state
that:
a) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
b) the accounting policies have been selected and applied consistently and judgments
and estimates made 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 and
loss of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provisions of the said Act for safeguarding the assets of
the 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 control to be followed by the Company have been laid down and
that such internal financial control are adequate and were operating effectively; and f)
the proper systems to ensure compliance with the provisions of all applicable laws have
been devised and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company which has been approved by the Board. The CSR policy may be
access from the website of the Company i.e. www.arotile.com. The Annual Report on CSR
activities is annexed herewith marked as Annexure I.
AUDITORS AND AUDITORS' REPORT
(a) Statutory Auditor
M/s Alok Mittal & Associates, Chartered Accountants, New Delhi was appointed as the
Statutory Auditor of the Company for a period of Five Years from the Conclusion of Thirty
Fourth Annual General Meeting. The Notes on the financial statements referred to in the
Auditors' Report are self-explanatory and do not call for any further comments. The
Auditors' 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 the
Secretarial Auditor by the Board for the financial year 2022-23 to conduct the Secretarial
Audit. The Secretarial Audit Report along with the Annual compliance Secretarial Audit
Report under SEBI Regulation for the year 2022-23 is annexed herewith as Annexure II.
The Secretarial Audit Report does not contain any qualifications, reservations or adverse
remark.
(c) Internal Auditor
The Board had appointed M/s Sreekantha & Co., Chartered Accountants, Hosur as the
Internal Auditor of the Company for the year 2022-2023. Internal Audit report does not
contain any qualifications, reservations or adverse remark.
COMPLIANCE WITH SECRETARIAL STANDARDS
Compliance of Secretarial Standards on Meeting of Board of Directors (SS-1) and General
Meeting (SS-2) issued by Institute of Company Secretary of India has been adopted by the
Company.
PRACTISING COMPANY SECRETARY'S CERTIFICATE ON CORPORATE GOVERNANCE
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015,
the Practising Company Secretary's Certificate on Corporate Governance is enclosed as Annexure
III to the Board's Report. The Auditors' Certificate for the year 2022-23 does not
contain any qualifications, 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 material orders passed by the
Regulators or courts or tribunals which would impact the going concern status of the
Company and its future operations.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Additional information on conservation of energy, technology absorption, foreign
exchange earnings and outgo as required as per the provisions of Companies Act 2013 and
Rules there under is annexed herewith in Annexure IV and form part of this report.
PARTICULARS OF REMUNERATION
Statement of particulars of employee pursuant to the provisions of section 197 of the
Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 for the year ended March 31, 2023. Employed throughout the
financial year, ended March 31, 2023 in receipt of remuneration not less than One Crore
two Lakh rupees per annum.
Name |
Age |
Qualification |
Experience |
Date of Commencement Employment |
Designation |
Remuneration |
Last Employment |
Mr. Sunil Kumar Arora |
64 Years |
B. Sc. |
36 Years |
May 3,1988 |
Managing Director |
18647863 |
Since Inception |
Pursuant to the provisions of Section 197 (12) of the Companies Act, 2013 read with
Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014,
the details regarding the ratio of remuneration of each Director to the median employee's
remuneration and such other details as required therein are as under:
1. The ratio of the remuneration of each director to the median remuneration of the
employees of the Company for the financial year: The Board of Directors of the Company
comprises 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 Kumar Arora, Managing Director |
935.099 |
2 |
Shri Sundareshwara G Sastry |
10.369 |
3 |
Shri Dinesh Chandra Kothari |
5.058 |
4 |
Smt. Sujata Arora |
6.828 |
5 |
Smt. Vinita Sood |
9.863 |
6 |
Shri Sahil Arora, Whole-Time Director |
219.387 |
2. The percentage increase in remuneration of each Director, Chief Financial Officer,
Company Secretary in the financial year: The Board of Directors of the Company comprises
of Non-Executive Directors who has been paid Commission and sitting fee from the Company.
SI. No. |
Name |
Ratio to median remuneration |
1 |
Shri Sunil Kumar Arora, Managing Director |
0.87 |
2 |
Shri Dinesh Chandra Kothari |
(48.72) |
3 |
Smt. Sujata Arora |
(27.03) |
4 |
Smt. Vinita Sood |
(17.02) |
5 |
Shri Sahil Arora, Whole Time Director |
1.17 |
6 |
Shri Sundareshwara G. Sastry |
(2.38) |
7 |
Shri Sabyasachi Panigrahi, Company Secretary |
- |
8 |
Shri M. Madangopal CFO |
1.20 |
3. The percentage increase in the median remuneration of employees in the financial
year: 1.56
4. The number of permanent employees on the roll of Company: 264
5. Average percentile increase already made in the salaries of employees other than the
managerial personnel in the financial year ended March 31, 2023. NIL
6. The Company affirms that the remuneration is as per the remuneration policy of the
Company.
CORPORATE GOVERNANCE INCLUDING DETAILS PERTAINING TO BOARD MEETINGS, NOMINATION AND
REMUNERATION POLICY, AUDIT COMMITTEE AND VIGIL MECHANISM
Your Company re-affirms its Commitment to the highest standards of Corporate Governance
practices. Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015, Management Discussion and Analysis, Corporate Governance Report and Auditors'
Certificate regarding compliance of conditions of Corporate Governance are made a part of
this Annual Report.
The Corporate Governance Report which form part of this report also covers the
following: a) Particulars of the Five Board Meetings held during the financial year. b)
Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior
Management. c) The details with respect to composition of Audit Committee and
establishment of Vigil Mechanism.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial control with reference to
financial statements and no material reportable weakness was observed in the system.
Further, the Company has in place adequate internal financial control commensurate with
the size and nature of its operations. The Company also has robust Budgetary Control
System and Management Information System (MIS) which are backbone of the Company for
ensuring that your Company's assets and interests are safeguarded.
LISTING
The Equity Shares of the Company are listed in BSE Limited and National Stock Exchange
of India Limited. Listing fees for the year 2023-2024 have already been paid to BSE
Limited and National Stock Exchange of India Limited.
ACKNOWLEDGEMENT
Your Directors wish to thank and acknowledge the Banks, Government Authorities,
Dealers, Suppliers, Business Associates and the Company's Valued Customers for their
assistance and cooperation and the esteemed Shareholders for their continued trust and
support. The Directors also wish to acknowledge the committed and dedicated team of Aro
granite whose unstinted work, efforts and ideas have taken the Company on a path of steady
growth and development.
|
For and on behalf of the Board |
|
Place: Hosur |
Sunil Kumar Arora |
Sahil Arora |
Date: May 19, 2023 |
Managing Director |
Whole-Time Director |
|