BOARD’S REPORT

To,

The Members,

Your Directors have pleasure in submitting their Thirty- first Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2016.

2. CONFIRMATION OF INTERIM DIVIDEND PAID

Based on the company’s healthy performance, your Directors in its Board Meeting held on March 11, 2016 declared an Interim Dividend of Rs. 2/-per equity  share of Rs. 10 each during the financial year. The dividend is to be confirmed by the members at the ensuing Annual General Meeting.

The payment of Interim Dividend resulted into a Dividend outflow of Rs. 90,00,000/- and Dividend Distribution Tax of Rs.18,32,188/- in the current year aggregating to a total outflow of Rs. 1,08,32,188/- as against Rs. 90,00,000/- and Dividend Distribution Tax of Rs. 17,99,471/- aggregating to a total outflow of Rs. 1,07,99,471/- in the previous year.

The Board of Directors are once again pleased to inform you about the Company's consistency in paying dividends to shareholders since last 14 years in alignment with the Company’s policy of being shareholder friendly. The glimpse of dividend paid in the last 14 years is as follows

3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred sum of Rs. 69,398/- pertaining to the final dividend amount for the year ended 31st March, 2008, remaining unclaimed during the financial year 2015-16 to the Investor Education and Protection Fund established by the Central Government, in compliance with Section 205C of the Companies Act, 1956.

The said amount represents unclaimed dividends which were lying with the Company for a period of seven years from their respective due dates of payment.

4. COMPANY’S BUSINESS PERFORMANCE

The company has maintained a healthy growth on all counts during the financial year depicted as below.

Sales Income

Sales Income for the year ended 31st March, 2016 amounted to Rs. 3026.03 lacs as against Rs. 2660.13 lacs for the previous year, registering a growth of 13.75% The Management is again optimistic of growth at a faster rate in the years to come looking to the buoyancy in the market sentiments and increased activity in construction.

Exports

The Company has achieved export turnover of Rs. 25.06 Lacs during the year and is making renewed efforts to augment its exports to others countries in the near future.

Profits

The Company has earned Profit after tax of Rs. 649.06 lacs for the year ended 31st March 2016 as against Rs. 532.45 lacs for the previous year. Your share in the Company now commands a healthy book value of Rs. 140 and the EPS stands at Rs.14.42 per share for the year 2015-2016.

5. BUSINESS OVERVIEW

Your Company continues to be one of the most reputed manufacturers & providers of and exclusive range of Indian & Imported Marbles & Granites. The Company provides a large variety of products with a vision of quality satisfaction to our clients and customers.

The Company is reaping rich dividends on its carefully cultivated long-term relationships with several niche clients in India & abroad. The Company has strived to innovate in technology and marketing and has evolved accepting the changing customer demands and aspirations.

The Company has now entered the world of E-Commerce by offering its products online on its website thereby enabling clients to buy their requirements from the comfort of their premises resulting in an increase in client base.

Our company has seen a 21% increase in this year, in its profits comparatively. This is due to increasing productivity, improved quality, income enhancement, aggressive marketing and rational utilization of resources by the management of the Company has been an integral factor in achieving such excellent results for the year under review. Further there is no change in the nature of business of the Company for itself by introducing of new products and a wider range of colors and so the Company is well positioned to capture benefits of the upturn.

Customer Relationships

Your Company is a firm believer in the maxim that strong and healthy relationships with its existing clients is as important as adding new names to its clientele. The Company has been exploring new opportunities with its existing clients and has also widened its client base both geographically and numerically during the year under review and hopes to further expand it with the introduction of e-commerce facility on its website in the coming years.

Personnel & Performance

Your Company has been able to develop an environment, which is conducive to high growth and performance, a work culture that encourages meritocracy and rewards high performers in an adequate and fair manner.

6. CURRENT YEAR

The growth led by strong urbanization and continued industrialization trends and the resulting rise in residential and infrastructure construction activity in our economy. There is a promising growth of our company with such developments in our business sector.

Your Directors are optimistic that on the basis of inquiries generated and seriousness demonstrated by the Government for the development of housing and infrastructure industry, demand for granites and marbles would show an incremental growth.

The Management is fully equipped to take the opportunity of any upsurge in demand and capturing a major share of the incremental market demand. The Sales team is on high alert for scouting all new and existing opportunities as regards to big projects and retail demand as well.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.

8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS, TRIBUNALS IMPACTING THE

GOING CONCERN STATUS ANS COMPANY’S OPERATIONS IN FUTURE.

No significant or material orders have been passed against the company by the Regulators or Courts or Tribunals which impacts the going concern status and Company’s operations in future.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure A and is attached to this report.

10. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has in place a business risk management framework for identifying and monitoring risks and opportunities that may have a bearing on the organization's objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. Your Company follows well–established and detailed risk assessment and minimisation procedures, which are periodically reviewed by the Board.

The Company has laid down a well-defined risk management mechanism covering risk mapping, risk exposure and risk mitigation process. The Company’s Risk Management Policy has been developed to include various categories such as Human Resources, Financial, Business Processes and Systems, Strategy, Corporate Governance and Compliance and Information Security.

A detailed exercise has been carried out to identify, evaluate, manage and monitor the risks which shall help the Company to take pro-active decisions and avoid all financial implications. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting. Further, the Board ensures risk reporting and updates, risk policy compliances and provide overall guidance and support to business risk owners.

11. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company continues to be committed to the highest standards of Corporate Social Responsibility. It is our conviction that continuous business growth and sustainable communities go hand–in–hand while creating value for our stakeholders.

The Company during the year under review continues with its Corporate Social Responsibility initiatives implemented in the previous years in alignment with the National Theme of the Prime Minister Mr. Narendra Modi of “BETI PADHAO BETI BACHAO” by contributing amounts for the education of underprivileged girls in Kishangarh, Rajasthan.

The CSR Policy of the Company and the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year as per annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure B to this Report

12. DETAILS OF NOMINATION AND REMUNERATION POLICY U/S 178(3)

Nomination and Remuneration Committee has formulated a policy relating to the remuneration for the directors, KMPs and other employees. The link of the same is http://elegantmarbles.com/wp-content/uploads/2016/01/NRC-Policy.pdf.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The details of the Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013 by the Company, to other Body Corporates or persons are given in notes to the financial statements.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business. Since the provisions of Section 188 of the Companies Act, 2013 are not attracted, the disclosure in Form AOC- 2 is not required. Further, there are no material related party transactions as defined in the Listing Agreement during the year under review with the Promoters, Directors or Key Managerial Personnel.

All Related Party Transactions are placed before the Audit Committee for its perusal and recommendation to the Board.

The Policy on Related Party Transactions, as approved by the Board of Directors has been uploaded on the website of the Company. The link of the same is http://elegantmarbles.com/wp-content/uploads/2016/01/Related-Party-Transactions-Policy.pdf

15. SECRETARIAL AUDIT

In accordance with the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has got the Secretarial Audit conducted from the Practicing Company Secretary.

A Secretarial Audit Report issued by Shri Virendra G. Bhatt, Practicing Company Secretaries, in Form MR – 3, in respect of the secretarial audit of the Company for the financial year ended 31st March 2016, is provided in Annexure C.

16. PARTICULARS OF EMPLOYEES

The information required in accordance with Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Board’s Report for the year ended 31st March, 2016 can be accessed in the manner as provided under Section 136 of the Companies Act, 2013. If any Member is interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of the Company in this regard. The said disclosure is also available for inspection by members at the Registered Office of the Company, 21 days before the 31st Annual General Meeting and up to the date of the ensuing General Meeting during the business hours on working days.

Further, the Company has no person in its employment drawing salary of Rs. 60 lacs per annum or Rs. 5 lacs per month as defined under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) and 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

17. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There were no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective reports.

18. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Board has framed a Policy relating to appointment of Directors, payment of Managerial remuneration, Directors’ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178 (3) of the Companies Act, 2013 based on the recommendation of Nomination and Remuneration Committee. The details of this Policy is explained in the Corporate Governance Report.

19. EVALUATION OF THE BOARD’S PERFORMANCE

In compliance with the requirements of Section 134(3) (p) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the performance of the Board was carried out during the year under review. The Board was evaluated for its performance based on the following factors:

i. Attendance of Board Meetings and Committees;

ii. Contribution made to the Board discussions and future planning;

iii. Level of commitment to the stakeholders’ interest;

iv. Initiatives towards the growth of the business and profitability;

v. Providing outlook, view points and feedback taking the Company ahead beyond expectations.

The evaluation involves Self-Evaluation by the Board Member and thereafter in the following manner:

a) Individual Directors - The performance of the individual Directors’ is evaluated by the Nomination and Remuneration Committee

b) Board and Committees – The Board evaluated its own performance and also of the Committees taking into consideration the above mentioned factors. A member of the Board will not participate in the discussion of his / her evaluation.

20. EXTRACT OF ANNUAL RETURN

The extract of Annual Return (MGT – 9) pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure D and is attached to this Report

21. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had five (5) Board Meetings during the financial year under review. The Board Meetings were held in compliance with the Companies Act, 2013.The details of the same are provided in the Corporate Governance Report.

22. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:—

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that 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) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis; and

e) that proper internal financial controls were in place and that the internal financial controls were adequate and were operating effectively.

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

23. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

24. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

25. DEPOSITORY SYSTEM

The Company has entered into agreement with the National Securities Depository Limited as well as the Central Depository Services (India) Limited (CDSL) to enable shareholders to hold shares in a dematerialized form. The Company also offers simultaneous dematerialization of the physical shares lodged for transfer.

26. DISCLOSURE UNDER SECTION 164(2) OF THE COMPANIES ACT, 2013

The Company has received the disclosure in Form DIR – 8 from its Director being re-appointed and has noted that the Director is not disqualified under Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

27. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) Appointment of Independent Director

Mr. Om Parkash Singal, was appointed as an Independent Director in accordance with Section 149 of the Companies Act, 2013 on 15th July, 2015 (AGM date of the previous year) for a period up to 8th May, 2020.

i) Resignation of Company Secretary

Ms. Reshma Ramchandani, Company Secretary and Compliance Officer, being the Key Managerial Personnel of the Company resigned with effect from  the closing hours of 19th May, 2016 due to personal reasons.

ii) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013, Ms. Yogita Agrawal retires by rotation and is eligible for re-appointment. Accordingly her re- appointment has been included in the Notice convening the Annual General Meeting of the Company.

28. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules and as per the SEBI (LODR) Regulations, 2015.

29. STATUTORY AUDITORS

M/s. Ravi & Dev LLP, Chartered Accountants, Statutory Auditors, through a Special Notice have expressed their unwillingness to act as the Statutory Auditors beyond 19th May 2016 due to operational reasons.

The Board recommends M/s. SDBA and Co., Chartered Accountants to act as the Statutory Auditors and to hold the office for a period of three years i.e. from the conclusion of 31st Annual General Meeting till 34th Annual General Meeting, subject to ratification of members at every Annual General Meeting.

30. COST AUDITORS

The Company is not required to maintain cost records as per the Companies (Cost Records and Audit) Amendments Rules, 2014 as the turnover of the Company for the Financial Year 2015-16 was below Rs. 35 Crores.

31. AUDITORS REPORT

The notes to accounts referred to in the Auditor’s Report are self-explanatory and, therefore, do not call for any further comments

32. LISTING

The Company’s Equity Capital is listed on the Bombay Stock Exchanges Limited, Mumbai. The Company confirms that it has paid annual listing fees due to the stock exchange for the year 2016-2017 and has been diligent in observing all the compliances as stipulated in the Listing Agreement.

33. INSURANCE

The Company’s plant & machinery, buildings, stocks & assets are adequately insured.

34. INTERNAL CONTROL SYSTEM

Your Company is continuously strengthening its internal control processes and has appointed M/s. Deepak Mehta & Associates, Chartered Accountants, as the Internal Auditors of the Company. The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies.

Procedures to ensure conformance with the policies, standards and delegations of authority have been put in place covering all activities. Audit Committee periodically reviews the performance of internal audit system.

The Company has a rigorous business planning system to set targets and parameters for operations which are reviewed with actual performance to ensure timely initiation of corrective action, if required. The Audit Committee reviews adherence to internal control systems and internal audit reports. Further, the Board annually reviews the effectiveness of the Company's internal control system.

35. CORPORATE GOVERNANCE

Your Company strives to ensure that best corporate governance practices are identified, adopted and consistently followed. Your Company believes that good governance is the basis for sustainable growth of the business and for enhancement of stakeholder value. The Company has been proactive in following the principles and practices of good corporate governance.

The Company has ensured that the Corporate Governance requirements as stipulated in Clause 49 of listing agreement and Regulation 27 of the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchange are duly complied with. A separate Statement on Corporate Governance and Management Discussion & Analysis is given in this Report.

A Certificate of M/s. Ravi and Dev LLP, Chartered Accountants, from the Statutory Auditors of the Company regarding compliance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Report.

36. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Company has constituted an Audit Committee as required under Section 177 of the Companies Act, 2013 and has also established Vigil Mechanism for their employees and Directors to report their genuine concerns or grievances.

The details of the same are explained in the Corporate Governance Report. The Board has accepted all the recommendations of the Audit Committee during the year under review as and when brought to their notice.

37. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company’s premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

A policy on Prevention of Sexual Harassment at Workplace was released during the last financial year. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behaviour.

Internal Complaints Committee (ICC) was set up in accordance with the provisions of the Act. The ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy.

During the year ended 31st March 2016, the ICC did not receive any complaints pertaining to sexual harassment.

38. SHARES

a) Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

b) Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

c) Bonus Shares

No Bonus Shares were issued during the year under review.

d) Employees Stock Option Plan

The Company has not provided any Stock Option Scheme to the employees

39. ACKNOWLEDGEMENTS

Your Company will soon complete glorious 31 eventful years of the existence in this country. Very few brands continue to remain relevant and become iconic over such a long passage of time. Your Directors are proud of this rich heritage and thank all our stakeholders who have contributed to the success of your country.

Your Directors wish to place on record their appreciation, for the contribution made by the employees at all levels but for whose hard work, and support, your Company’s achievements would not have been possible.

Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company.

For and on behalf of the Board of

ELEGANT MARBLES AND GRANI INDUSTRIES LIMITED

Rajesh Agrawal

Chairman and Managing Director

(DIN : 00017931)

Place: Mumbai  

Date: 19th May, 2016