The Directors have pleasure in presenting the 38th Annual Report together with Audited
Accounts of the Company for the year ended on 31st March 2026.
FINANCIAL RESULTS
Amount in ^ lakh
Particulars |
31.03.2026 |
31.03.2025 |
| Gross Profit before Depreciation |
(179.33) |
308.95 |
| Depreciation |
982.72 |
994.12 |
| Profit before Tax |
(1162.05) |
(685.17) |
| Provision for Tax |
- |
- |
| Current |
- |
- |
| - MAT Credit |
- |
- |
| - Deferred |
19.70 |
(42.89) |
| Surplus available for appropriation |
(1181.75) |
(642.28) |
| Dividend (including Dividend Tax) |
- |
- |
| Amount transferred to General Reserve |
- |
- |
| Surplus carried to Balance Sheet |
(1181.75) |
(642.28) |
WORKING RESULTS
The financial year 2025-26 was one of the most challenging years for the global natural
stone industry. The Company operated in an environment marked by weak construction demand,
an extraordinarily volatile U.S. trade policy environment, a Middle East conflict that
disrupted global petrochemical supply, and continued uncertainty in global supply chains.
These external developments significantly affected export demand, customer purchasing
behaviour, raw material costs and working capital across the industry.
The United States remained the Company's largest export destination, accounting for
approximately 65% of total exports, while Europe contributed around 25%. Consequently,
developments in U.S. trade policy in particular had a direct and material bearing on the
Company's performance through the year.
1. Global Market Conditions
Demand in the Company's key export markets remained subdued for much of the financial
year, as the cumulative effect of U.S. tariff measures fed through into higher consumer
prices for imported construction materials. This tariff-driven inflation added to the cost
of renovation and construction projects in the United States and contributed to more
cautious purchasing behaviour among customers through the year.
2. Impact of U.S. Trade Policy
The dominant development of the year was the introduction, escalation, and eventual
invalidation of the U.S. reciprocal tariff regime.
Reciprocal tariffs on Indian exports were introduced in April 2025 at 27%, and were
progressively revised over the following months, rising to a cumulative rate of
approximately 50% by August 2025 once an additional duty linked to India's purchases of
Russian oil was layered on. For most of the financial year, this left the Company at a
distinct disadvantage against competing origins. Vietnam, a key competing source for
engineered quartz, was initially assigned a comparable rate of 46%, but subsequently
negotiated this down to 20% in October 2025 - while India's rate remained at or near 50%
through this period. This gap was compounded by a further, longstanding freight- cost
disadvantage: ocean freight from Vietnam to the United States has historically been
cheaper than from India, meaning Indian-origin material was disadvantaged on both tariff
and logistics cost simultaneously for the greater part of the year. Brazilian quartzite, a
competing natural-stone category, secured an outright exemption from Brazil's country-
specific tariff, though Brazilian granite, marble and slate remained subject to separate
duties.
A partial narrowing occurred in February 2026, when a bilateral trade framework between
India and the United States reduced India's reciprocal tariff to 18% and removed the
additional Russian-oil-linked duty, briefly bringing India's rate below Vietnam's
negotiated 20%. This improvement proved short-lived: on 20 February 2026, the U.S. Supreme
Court ruled that the International Emergency Economic Powers Act (IEEPA) - the legal
authority under which the entire reciprocal tariff programme, covering India, Vietnam and
other trading partners alike, had been imposed - did not authorise the President to levy
tariffs. All IEEPA- based tariffs were accordingly terminated with effect from 24 February
2026, and the U.S. administration replaced them with a uniform 10% import surcharge under
Section 122 of the Trade Act of 1974, applicable to imports from nearly all countries for
up to 150 days. A summary of the tariff position through the year is set out below.
Table: U.S. Tariff Position - India, Vietnam and Brazil, FY 2025-26
Period |
India |
Vietnam |
Brazil (quartzite) |
Brazil (granite/ marble/slate) |
| Apr 2025 ("Liberation Day") |
27% reciprocal |
46% reciprocal |
Not yet targeted |
Not yet targeted |
| Jul-Aug 2025 |
25%, then +25% oil-linked = 50% cumulative |
46% (pre-deal) |
Exempted from Brazil's additional tariff |
Proposed 25% Section 301 duty; combined burden reported up to 50% |
| Oct 2025 |
50% (unchanged) |
Negotiated down to 20% |
Exempt (unchanged) |
Unchanged |
| Feb 2026 (bilateral deal) |
Cut to 18% |
20% (unchanged) |
Exempt (unchanged) |
Unchanged |
| 24 Feb 2026 (IEEPA struck down) |
Flat 10% Section 122 surcharge |
Flat 10% Section 122 surcharge |
Likely reverted, pending confirmation |
Section 301 duties rest on separate authority - likely unaffected |
As a result, the Company faced a genuine and sustained competitive disadvantage against
key competing origins for most of FY 2025-26, followed by a brief and ultimately moot
improvement, and the year closed with the reciprocal tariff structure that had shaped the
entire period struck down by the courts - leaving no lasting structural advantage to point
to, only a narrower, temporary, and still-unresolved tariff environment.
Throughout this period, the sheer unpredictability of the applicable tariff structure
created additional difficulty for importers. Since shipments from India typically require
55 to 75 days to reach U.S. ports, customers were often unable to determine the landed
cost of material at the time of placing orders. Many buyers responded by deferring
procurement decisions, postponing shipment schedules and holding lower inventory levels,
which contributed to slower order inflows, delayed dispatches and increased pricing
pressure over the course of the year.
3. Impact of Middle East Conflict on Raw Material Costs
Toward the close of the financial year, a further disruption emerged in the Company's
cost base. On 28 February 2026, the United States and Israel launched military action
against Iran, and Iran responded by closing the Strait of Hormuz - a waterway carrying
roughly a fifth of the world's seaborne oil and LNG trade. This triggered an immediate
tightening in global petrochemical supply, with early effects on resin markets visible
before the financial year closed on 31 March 2026. Polyester resin, which constitutes
approximately 60% of the raw material cost of the Company's engineered quartz slabs, is
directly exposed to disruption of this nature, and the Company began to see upward cost
pressure on this input in the final weeks of the year.
4. Domestic Business Environment
Domestic demand also remained under pressure during the year. In Bengaluru, one of the
Company's key domestic markets, the real estate sector continued
to face significant delays in obtaining Occupancy Certificates and related regulatory
clearances, including e-khata records, and no-objection certificates from the Fire and
Emergency Services Department, the Karnataka State Pollution Control Board, utility
providers and other approving authorities. Industry bodies such as CREDAI continued to
press for faster approvals through the year, and while the Karnataka government exempted
larger residential plots (1,200 sq ft and above, later extended to 2,400 sq ft) from the
mandatory Occupancy Certificate requirement in September 2025, delays affecting a large
number of existing and mid-sized projects persisted, holding back completions and
handovers. This, together with cautious spending by developers and homeowners and
increased competition from alternative construction materials, continued to weigh on
demand for granite and quartzite products in the domestic market. Pricing remained
competitive across several product categories, requiring continued focus on operational
efficiency and product mix optimization.
5. Operational Response
Despite these conditions, the Company remained focused on protecting its long-term
competitive position, undertaking tighter control over working capital, optimization of
production planning, disciplined inventory management, and continued cost rationalization
across operations.
6. Outlook and Subsequent Events
As at the date of this report, the U.S. tariff framework remains unsettled. The 10%
import surcharge currently in effect under Section 122 authority is temporary, and no
durable legal or negotiated framework has yet replaced the reciprocal tariff regime struck
down by the Supreme Court.
Separately, the disruption arising from the conflict in the Middle East has intensified
materially since the year end. Petrochemical and resin prices rose sharply through March
to May 2026 - industry data indicates increases in the range of 30% to 60% across various
resin categories over this period - as the Strait of Hormuz remained largely closed for
extended stretches and as at the date of this report, the conflict remains unresolved; The
Company is actively evaluating alternative sourcing arrangements and pricing pass- through
measures in response, and will continue to monitor both the U.S. trade policy environment
and the Middle East situation closely given their direct bearing on competitiveness and
cost structure in the year ahead.
DIVIDEND
Your directors have not recommended any dividend for the year 2025-26.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Company has not declared any dividend in the Financial Year 2017-18 accordingly no
transfer need to be done during the year to Investor Protection Fund under sub-section (2)
of section 125 of the Companies Act 2013 and IEPF (Accounting, Audit, Transfer and Refund)
Rules 2016 whereas Mr. Ayush Goel, 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 and were below the threshold
prescribed under Schedule XII of regulation 23 of SEBI LODR Regulations, 2015 during the
year. 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, Mr. G Sundareshwara (DIN: 00165762) has resigned as an Independent
Director of the Company, with effect from November 11, 2025, due to his increased
professional and personal commitments. Consequently, he shall also cease to be the
Chairperson of the Audit Committee and Stakeholder Relationship Committee & Member of
Nomination and Remuneration Committee and Corporate Social Responsibility Committee of the
Company. To fill the vacant position, the Board appointed Mr. Varathan Arul (DIN:
11480624) as an Additional Directors on February 04, 2026 as per the recommendation of the
Nomination and Remuneration Committee.
Subsequently, he was appointed as Non-Executive Independent Director upon receiving
approval from the members through Postal ballot on March 24, 2026 for a consecutive period
of five years effective from February 04, 2026.
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
Practicing Company Secretary M/s. S Panigrahi & Associates (CP No. 27507) was
appointed as the Secretarial Auditor by the members for a continuous period of Five Years
commencing from April 1, 2025 until March 31, 2030 to conduct the Secretarial Audit of the
Company.
The Secretarial Audit Report along with the Annual Secretarial Compliance Audit Report
under SEBI Regulation for the year 2025-26 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 2025-26 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 (SS2) issued by Institute of Company Secretary of India has been adopted by the
Company.
PRACTICING COMPANY SECRETARY'S CERTIFICATE ON CORPORATE GOVERNANCE
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015,
the Practicing Company Secretary's Certificate on Corporate Governance is enclosed as Annexure
III to the Board's Report. The Auditors' Certificate for the year 2025-26 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 31st March 2026.
Employed throughout the financial year, ended 31st March 2026 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 |
67 Years |
B. Sc. |
39 Years |
03.05.1988 |
Managing Director |
1,81,85,792 |
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 |
Mr. Sunil Kumar Arora, Managing Director |
508.425 |
| 2 |
Mr. G Sundareshwara |
2.796 |
| 3 |
Mrs. Sujata Arora |
4.054 |
| 4 |
Mr. Varathan Arul |
1.957 |
| 5 |
Mr. Keshava Murthy Kalasachar |
5.732 |
| 6 |
Mr. Sahil Arora, Whole Time Director |
119.814 |
| 7 |
Mr. Ashish Jyotindra Bhuta |
5.452 |
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 |
% Increase in Remuneration |
| 1 |
Mr. Sunil Kumar Arora, Managing Director |
(2.73) |
| 2 |
Mrs. Sujata Arora |
31.82 |
| 3 |
Mr. Varathan Arul |
100.00 |
| 4 |
Mr. Sahil Arora, Whole Time Director |
(0.35) |
| 5 |
Mr. G Sundareshwara |
(50.00) |
| 6 |
Mr. Keshava Murthy Kalasachar |
127.78 |
| 7 |
Mr. Ashish Jyotindra Bhuta |
116.67 |
| 8 |
Mr. C. Srinivasan, Chief Financial Officer |
(2.40) |
| 9 |
Mr. Ayush Goel, Company Secretary |
66.00 |
3. The percentage increase in the median remuneration of employees in the financial
year: 0.53
4. The number of permanent employees on the roll of Company: 150
5. Average percentile increase already made in the salaries of employees other than the
managerial personnel in the financial year ended 31st March 2026. 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 2026-27 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 |
|
(Sunil Kumar Arora) |
Sahil Arora |
Place: Hosur |
Managing Director |
Whole Time Director |
Date: 15.05.2026 |
DIN:00150668 |
DIN: 07970622 |
