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Directors Report of Arfin India Ltd.

Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the 26th Annual Report on the Businesses and Operations of the Company together with Audited Accounts for the financial year ended on March 31, 2018.

1. Financial Summary Rs. in Lakhs

Particulars	2017-18	2016-17
Revenue from Operations	47,738.53	38,677.84
Other Income	85.95	57.18
Total Income	47,824.48	38,735.02
Total Expenses	44,457.51	36,709.28
Profit / (Loss) Before Tax	3,366.97	2,025.74
Provisions for Income Tax including Deferred Tax	1,196.91	724.81
Profit / (Loss) After Tax	2,170.06	1,300.93
Other Comprehensive Income	17.12	2.40
Total Comprehensive Income for the Period	2,187.18	1,303.33
Earnings per Equity Share
Basic	29.98	40.06
Diluted	29.98	38.84
Proposed Dividend	264.87	81.02
Transfer to General Reserves	100.00	100.00
Profit carried to Balance Sheet	2,170.06	1,300.93
Accumulated Balance of Profit	3,853.00	2,690.69

* Figures for the financial year 2017-18 are post amalgamation of Mahendra Aluminium Company Limited with Arfin India Limited. Hence, not comparable with previous year numbers.

2. Financial Highlights and State of Companyâs Affair

After merging the figures of Mahendra Aluminium Company Limited (transferor company), the revenue from operations stood at Rs. 47,738.53 lakhs for the year 2017-18 in compare to Rs. 38,677.84 lakhs for the financial year 2016-17. Total net profit for the year stood at Rs. 2,170.06 in compare to Rs. 1,300.93 for the previous year 2016-17. It is further stated that the above figures for financial year 2016-17 are standalone figures of Arfin India Limited and thus figures for both the years are strictly not comparable.

Further, the company has started commercial production and sales from the conductor and cables plant during the quarter ended December 31, 2017. Master and ferro alloys plant also performed well which was started during the last quarter of FY17. The company is in process to set up second plant of ferro titanium (master alloys) to meet the increased customer demand. The company is also in process of set up of aluminium alloy wire rod plant and production of the same shall be captively consumed for manufacturing of conductor plant production which will result in improved margins in the business. The company also expects to start commercial production from aluminium alloy wire rod plant from second quarter of FY19.

3. Dividend

Considering the profit, growth and future prospects of the company, the directors have recommended a final dividend of Rs. 2/- per equity share (Rs. 2/- per equity share for the previous financial year) on equity shares of Rs. 10/- each for the financial year ended on March 31, 2018.

Considering equity share capital as on March 31, 2018, the dividend distribution would result in a cash outgo of Rs. 318.80 lakhs (including tax on dividend distribution of Rs. 53.93 lakhs) compared to Rs. 97.52 lakhs (including tax on dividend distribution of Rs. 16.49 lakhs) paid for the financial year ended on March 31, 2017.

4. Approval of Scheme of Amalgamation

The Honâble National Company Law Tribunal, Ahmedabad Bench, Ahmedabad has approved scheme of amalgamation of Mahendra Aluminum Company Limited (transferor company / MALCO), a group company of Arfin India Limited, with Arfin India Limited (transferee company / ARFIN) vide its order dated February 22, 2018.

The restructuring plan of Arfin group in the form of amalgamation of MALCO with Arfin benefits the group as well as its stakeholders in the following manner:

i. The amalgamation has consolidated the business activities and leads to greater efficiency in the overall business and achieving integration of the business operations as well as synergy benefits through combined operations of both the entities.

ii. Products of both the companies are similar in nature and thus the contemplated merger leads to economies of scale which in turn promotes cost efficiency by means of reduction in administrative overheads, reduction in multiplicity of legal and regulatory compliances, and help running the business more effectively and economically resulting better utilization of resources.

iii. This amalgamation created enhanced value for shareholders and allows a focused strategy in operations, which would be in the best interest of all its shareholders, creditors and all persons connected with the Companies.

Further, taking note of appointed date April 01, 2017, the closing books of accounts of MALCO i.e. books of accounts as on March 31, 2018 have been merged into the closing books of Arfin India Limited.

Allotment of equity shares pursuant to the scheme of amalgamation

Pursuant to the aforesaid scheme of amalgamation, the board of directors of the company in its meeting held on March 28, 2018, allotted 10,90,200 equity shares to the shareholders of transferor company i.e. Mahendra Aluminium Company Limited in the ratio of 92 new equity shares of Rs. 10/- each of Arfin India Limited against each 100 existing equity shares of Rs. 10/- each held by such respective shareholders in Mahendra Aluminium Company Limited.

5. Listing on Stock Exchanges

As on March 31, 2018, the equity shares of the company were listed on BSE Limited and the Calcutta Stock Exchange Limited. The company has paid the annual listing fees for the financial year ending on March 31, 2019 within time.

Further, the application made by the company during the financial year 2016-17 with the Calcutta Stock Exchange for delisting of its equity shares is pending with the Calcutta Stock Exchange Limited for its approval. Delisting from such regional stock exchange has been considered by the board as after listing of equity shares of the company on the BSE Limited, listing on such regional stock exchange was not providing any tangible advantage to the company or its investors.

6. Details in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements

The company has in place adequate internal control systems commensurate with the size of its operations. The internal control systems comprising of policies and procedures are designed to ensure sound management of your companyâs operations, safe keeping of its assets, optimal utilization of resources, reliability of its financial information and compliances. Clearly defined roles and responsibilities have been institutionalized within the organization. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your companyâs operations.

7. Details of Subsidiary / Joint Venture / Associate Companies

The company doesnât have any subsidiary, joint venture or associate company. Group Company to the Arfin India Limited includes Krish Ferro Industries Private Limited. Mahendra Aluminium Company Limited, an erstwhile group company to the Arfin group has been amalgamated into the Arfin India Limited during the financial year under report.

8. Material Changes and Commitment, if any, affecting the Financial Position of the Company

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these Financial Statements relate and on the date of this report. Further, during the financial year under report, no significant or material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and operations of the company in future except the order of the National Company Law Tribunal, Ahmedabad for amalgamation of Mahendra Aluminium Company Limited into Arfin India Limited under a scheme of amalgamation.

9. Deposits

During the financial year under report, your Company has not accepted any deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 nor it had any amount of deposits carried forward from the previous financial year.

10. Statutory Auditors

M/s. Mukesh Rajendra & Co., chartered accountants, Ahmedabad (FRN: 143123W) were appointed as statutory auditors of the company for a period of 5 years at the 25th annual general meeting held on September 10, 2017. Due to pre-occupation in other assignments, the auditors have expressed their unwillingness to continue as statutory auditors of the company by way of resignation. Therefore, the board of directors of the company in its meeting held on Friday, August 10, 2018 appointed M/s. Sanjay Bajoria & Associates, chartered accountants, Ahmedabad (FRN: 117443W) as statutory auditors upto the conclusion of this annual general meeting of the company to fill the casual vacancy caused due to resignation of the existing auditors.

Pursuant to the provisions of section 139 of the Companies Act, 2013, the appointment of M/s. Sanjay Bajoria & Associates has been put forth before the members at this ensuing 26th annual general meeting for their appointment till the conclusion of the 31st annual general meeting. M/s. Sanjay Bajoria & Associates, chartered accountants have furnished a certificate that their appointment, if made, will be within the limits prescribed under the said section of the Act.

The auditorsâ report issued by M/s. Mukesh Rajendra & Co., for the financial year ended on March 31, 2018 forms part of this annual report and the same does not contain any qualification, reservation or adverse remark.

11. Secretarial Auditors

In terms of section 204 of the Companies Act, 2013, the board of directors of your company has re-appointed M/s. Kamlesh M. Shah & Co., practicing company secretary, Ahmedabad as secretarial auditors to conduct an audit of secretarial records and compliances, for the financial year ending on March 31, 2019. The secretarial audit report for the financial year ended on March 31, 2018 is annexed herewith as Annexure - 5 and the same does not contain any qualification, reservation or adverse remarks.

12. Cost Auditors

The board of directors of your company has reappointed M/s. Ashish Bhavsar & Associates (FRN: 000387), cost accountants, Ahmedabad, as cost auditors to conduct audit of cost records for the financial year ending on March 31, 2019.

13. Share Capital

During the financial year under report, the company has allotted equity shares under the bonus issue as well as to the shareholders of Mahendra Aluminium Company Limited under the scheme of amalgamation. The detail of change in the capital structure of the company is tabulated as below:

Event date		Authorised share capital		Issued, subscribed and paid-up share capital
Event date	Particulars	No. of equity shares	Amount in Rs.	No. of equity shares	Amount in Rs.
April 01, 2017	Share capital at the beginning of the financial year	1,10,00,000	11,00,00,000	40,51,157	4,05,11,570
October 24, 2017	Addition of 1,90,00,000 equity shares of Rs. 10/- each into the authorised share capital (pursuant to the approval of members dated October 24, 2017 obtained vide postal ballot notice dated September 20, 2017)	1,90,00,000	19,00,00,000	0	0
November 03,2017	Allotment of bonus shares in the ratio of 2:1	0	0	81,02,314	8,10,23,140
	Resultant share capital	3,00,00,000	30,00,00,000	1,21,53,471	12,15,34,710
February 22,2018	Merging of authorized share capital of Mahendra Aluminium Company Limited into Arfin India Limited pursuant to the scheme of amalgamation	15,00,000	1,50,00,000	0	0
March 28, 2018	Allotment of equity shares pursuant to the scheme of amalgamation	0	0	10,90,200	1,09,02,000
March 31,2018	Resultant share capital / capital at the end of the financial year	3,15,00,000	31,50,00,000	1,32,43,671	13,24,36,710

14. Directors & Key Managerial Personnel

I. Appointments

Based on the recommendations of the nomination & remuneration committee, the board of directors of the company has at its meetings held on September 20, 2017 & November 09, 2017, appointed Mr. Dineshchandra Mangaldas Shah (DIN: 02479309) and Mr. Mukesh Shankerlal Chowdhary (DIN: 00025877) as additional independent directors of the company to hold office for a period of five consecutive years from the date of their appointment at the respective board meetings. As additional directors, both the proposed appointees hold the office of independent director from the date of their appointments till the date of ensuing annual general meeting or due date thereof.

The board recommends the resolutions in relation to appointment of Mr. Dineshchandra Mangaldas Shah and Mr. Mukesh Shankerlal Chowdhary, as independent directors, for the approval by shareholders of the company.

Also, appointment of Mr. Bherulal Lalchand Chopra (DIN: 01149396) made on December 27, 2016 was approved by the shareholders of the company at their 25th annual general meeting held on September 10, 2017.

Further, at the meeting held on November 09, 2017, the board of directors of the company has appointed Ms. Kruti Sheth as company secretary and compliance officer of the company.

II. Cessations

During the financial year under report, Mr. Dilip Kumar Daga and Mr. Bherulal Lalchand Chopra resigned and thus ceased to be independent directors of the company w.e.f. June 23, 2017 and November 03, 2017 respectively. Mr. Purvesh Pandit resigned from the post of company secretary and compliance officer of the company from the closure of working hours of August 10, 2017.

The board places on record its sincere appreciation for the valuable services rendered by the outgoing directors and the company secretary during their tenure.

III. Retirement by Rotation

In accordance with the provisions of section 152(6) of the Companies Act, 2013 and the articles of association of the company, Mrs. Pushpa M. Shah (DIN: 00182754) will retire by rotation at this annual general meeting and being eligible, she offers herself for reappointment. The board recommends her appointment.

IV. Evaluation of the Boardâs Performance

During the financial year under report, exercise of evaluation was carried out through a structured process covering various aspects of the boardâs functioning such as composition of the board & committee(s), experience & competencies, performance of specific duties & obligations, governance issues etc.

Separate exercise was carried out to evaluate the performance of each individual director including the boardâs chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgments, safeguarding of minority shareholdersâ interest etc.

The evaluation of the independent directors was carried out by the entire board excluding independent directors and that of the chairman and the non independent directors was carried out by the independent directors. The directors were satisfied with the evaluation results, which reflected the overall engagement of the board and its committees with the company. This may be considered as a statement under provisions of section 134(3)(p) of the Companies Act, 2013 and rule 8(4) of the Companies (Accounts) Rules, 2014. The board of your company is composed with proper number of executive and non-executive directors.

V. Remuneration Policy

The company follows a policy on remuneration of directors and senior management employees. The policy has been approved by the nomination & remuneration committee and the board. More details on the same have been given in the corporate governance report. The policy on remuneration of directors, key managerial personnel and senior employees can be accessed on website of the company at the following web link: http://arfin.co.in/pdf/ policies/remuneration-of-directors-key-managerial-personnel-and-senior-employees-policy.pdf

15. Number of Meetings of Board of Directors

The board of directors met 10 times during the financial year ended on March 31, 2018. The details of the board meetings and the attendance of the directors are provided in the corporate governance report.

16. Audit Committee

The audit committee of the company is constituted with Mr. Dineshchandra Mangaldas Shah as chairman and Mr. Mukesh Shankerlal Chowdhary and Mr. Mahendra R. Shah as members of the committee. All the recommendations, if any, made by the audit committee were accepted by the board of directors during the period under report. More details on the audit committee have been provided in the corporate governance report.

17. Nomination and Remuneration Committee

The nomination and remuneration committee of the company is constituted unanimously by the non-executive directors of the company. Mr. Mukesh Shankerlal Chowdhary holds position of chairman of the committee and Mr. Dineshchandra Mangaldas Shah and Mr. Shantilal Mehta are members of the committee.

The policy, required to be formulated by the nomination and remuneration committee, under section 178(3) of the Companies Act, 2013 is uploaded on the companyâs website at the following web link: http://arfin.co.in/pdf/ policies/remuneration-of-directors-key-managerial-personnel-and-senior-employees-policy.pdf

More details on the committee have been provided in the corporate governance report.

18. Stakeholder Relationship Committee

In order to redress the grievances of stakeholders timely and in efficient manner and as statutorily required, the company has formulated a committee named stakeholder relationship committee which is headed by Mr. Shantilal Mehta as chairman and is further constituted with Mr. Mahendra R. Shah and Ms. Kruti Sheth as members of the committee.

More details on the committee have been provided in the corporate governance report.

19. Internal Complaints Committee (ICC)

The board of directors of the company has constituted a committee named internal complaints committee at its registered / corporate office. The said committee has been formed to comply with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed thereunder and to provide the employees safety against harassment, if any. A policy adopted by the company for prevention of sexual harassment at workplace is available on its website at the following web link: http://arfin.co.in/pdf/policies/ prevention-of-sexual-harassment-policy.pdf

During the financial year ended on March 31, 2018, the company did not receive any complaint pertaining to sexual harassment.

20. Related Party Transactions

There were no materially significant related party transactions made by the company with promoters, directors or key managerial personnel etc. which may have potential conflict with the interest of the company at large.

All the related party transactions are presented to the audit committee and to the board. Omnibus approval has been obtained from audit committee, board of directors and members of the company for the transactions with the related parties.

The policy on related party transactions as approved by the board has been uploaded on the companyâs website at the following weblink:http://arfin.co.in/pdf/policies/related-party-transactions-policy.pdf

21. Establishment of Vigil Mechanism / Whistle Blower Policy for Directors and Employees

The company promotes ethical behavior in all its business activities and has put in place a mechanism wherein the employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the companyâs codes of conduct or corporate governance policies or any improper activity to the chairman of the audit committee of the company or to the chairman of the board. The whistle blower policy has been duly communicated within the company.

Under the whistle blower policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the audit committee in this regard.

The said vigil mechanism / whistle blower policy has been uploaded on website of the company and can be accessed at the following web link: http://arfin.co.in/pdf/policies/vigil-mechanism-or-whistle-blower-policy.pdf

22. Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

The company did not provide any guarantee in respect of loans availed by others, under the provisions of section 186 of the Companies Act, 2013 and rules framed thereunder during the financial year under report. Details of loans and investments covered under the provisions of section 186 are given in the notes forming part of the financial statements that form part of this annual report.

23. Managerial Remuneration

The company follows a policy on remuneration of directors, KMP and senior management employees. The company has paid remuneration to the executive as well as sitting fees to the non-executive directors during the financial year under report. More details on the managerial remuneration have been given in the extract of annual return and in the corporate governance report.

24. Management Discussion & Analysis Report

A detailed analysis of the companyâs performance is made in the management discussion and analysis report, which forms part of this annual report.

25. Corporate Governance Report

Your company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A report on corporate governance as per the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this annual report.

26. Code of Conduct

The board has laid down a code of conduct (âcodeâ) for the board members, managerial personnel and for senior management employees of the company. This code has been posted on the companyâs website at http://arfin.co.in/code-conduct.html

All the board members and senior management personnel have affirmed compliance with this code. A declaration signed by the managing director to this effect forms part of the corporate governance report. The board has also laid down a code of conduct for the independent directors pursuant to the provisions of section 149(8) and schedule IV to the Companies Act, 2013 via terms and conditions for appointment of independent directors, which is a guide to the professional conduct for independent directors and has been uploaded on the website of the company at the following weblink: http://arfin.co.in/pdf/disclosures/terms-and-conditions-of-appointment-of-independent-directors.pdf

27. Risk Management Policy

The board of directors has developed and implemented a risk management policy for the company. It has identified and assessed internal and external risks, with potential impact and likelihood that may impact the company in achieving its strategic objectives or may threaten its existence. The policy lays down the procedures for risk identification, description, evaluation, estimation, reporting and development of action plan. The policy includes identification of elements of risks which mainly covers strategic risk, operational risk, financial risk and hazardous risks. The same can be accessed from the website of the company at the following web link: http://arfin.co.in/pdf/ policies/risk-management-policy.pdf

More details on the risk and concern factors have been given in the management discussion and analysis report.

28. Corporate Social Responsibility

Pursuant to the provisions of section 135 of the Companies Act, 2013 including rules framed thereunder, the company attracts the criteria for applicability of corporate social responsibility. Accordingly, it has constituted a corporate social responsibility committee which comprises of:

Sr. No.	Name of the Member	Nature of Membership
1	Mr. Mahendra R. Shah	Chairman
2	Mr. Shantilal Mehta	Member
3	Mrs. Pushpa M. Shah	Member

In compliance with the requirements of section 135 of the Companies Act, 2013, the company has also laid down a CSR policy which can be accessed from the website of the company at the following web link: http://arfin.co.in/pdf/ policies/corporate-social-responsibility-policy.pdf

The contributions in this regard have been made to Shri Swaminarayan Gurukul, Patdi, Gujarat, Karnavati Lions Club, Ahmedabad and All India Social Education Charitable Trust, Ahmedabad.

The report of CSR activities for the financial year 2017-18 as per the provisions of section 135 of the Companies Act, 2013 has been given separately as Annexure - 7.

29. Directorsâ Responsibility Statement

In accordance with the provisions of section 134(5) of the Companies Act, 2013, with respect to the directorâs responsibility statement, it is hereby stated:

a. that in the preparation of the annual financial statements for the year ended on March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in notes to the financial statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on March 31, 2018 and of the profit of the company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements for the year ended on March 31, 2018 have been prepared on a going concern basis;

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

f. that the system to ensure the compliances with the provisions of all applicable laws was in place and were adequate and operating effectively.

30. Disclosure u/s 164 (2) of the Companies Act, 2013

The company has received the disclosure in Form DIR-8 from its directors being appointed or reappointed and has noted that none of the directors are disqualified under section 164(2) of the Companies Act, 2013 read with rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

31. Transfer of Amount(s) and Shares to the Investor Education and Protection Fund

Section 124 of the Companies Act, 2013 mandates that companies shall transfer dividend(s) that remain unpaid or unclaimed for a period of seven years, from the unpaid dividend account to the investor education and protection fund. In this respect, the stakeholders are requested to take note that company has not completed seven years from its first dividend paying financial year and thus there remains no unpaid dividend amount or equity shares corresponding thereto to be transferred to the investor education and protection fund.

32. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as to conservation of energy, technology absorption and foreign exchange earnings and outgo required to be disclosed in terms of section 134 of the Companies Act, 2013 & rule 8 of the Companies (Accounts) Rules, 2014 have been given separately as Annexure - 1.

33. Extract of Annual Return

The Extract of Annual Return in the Form MGT-9 is enclosed herewith as Annexure - 2.

34. Form AOC-2

Form AOC - 2 pursuant to clause (h) of sub section (3) of section 134 of the Companies Act, 2013 and rule 8(2) of the Companies (Accounts) Rules, 2014 for disclosure of particulars of contracts / arrangements, if any, entered into by the company with the related parties as referred in section 188(1) of the Companies Act, 2013 is enclosed herewith as Annexure - 3.

35. Particulars of Employees and Remuneration

As required by the provisions of section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, the particulars are set out in Annexure - 4.

36. Secretarial Audit Report

The secretarial audit report given by Mr. Kamlesh M. Shah, proprietor of M/s. Kamlesh M. Shah & Co., practicing company secretary, Ahmedabad, for the financial year ended on March 31, 2018 is enclosed herewith as Annexure - 5.

37. Auditors Certificate on Corporate Governance

A certificate from statutory auditors of the company regarding compliance of conditions of corporate governance as stipulated under the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as Annexure - 6.

38. Acknowledgments

Your directors express their deep sense of gratitude to the bankers, central & state governments, their departments, the local authorities, other regulators and the stock exchanges for their continued guidance and support. We would also like to place on record our sincere appreciation for the dedication, commitment and hard work put in by every member of the Arfin family. The board further expresses that the credit of the success of Arfin goes to each & every member of Arfin family equally. The management is deeply grateful for the confidence and faith that all the stakeholders have always reposed in them.

For and on Behalf of the Board of Directors

Mahendra R. Shah

Place: Ahmedabad (Chairman)

Date: August 10, 2018 (DIN:00182746)

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 24^th Annual Report on the Businesses and Operations of the Company together with Audited Accounts for the financial year ended on March 31, 2016.

1. Financial Summary Rs, In Lacs

Particulars	2015-16	2014-15
Revenue from Operations	30,688.92	28,028.69
Less: Central Excise Duty	3401.36	3,033.74
Net Revenue From Operations	27,287.56	24,994.94
Profit / (Loss) Before Tax	1,000.66	705.31
Provisions for Income Tax including Deferred Tax	339.68	238.18
Profit / (Loss) After Tax	660.98	467.13
Proposed Dividend	45.27	30.18
Transfer to General Reserves	75.00	40.00
Profit Carried to Balance Sheet	660.98	467.13
Accumulated Balance of Profit	1,489.85	958.36

2. State of Companyâs Affair

Your Companyâs performance during the financial year under report has increased in terms of production, sales quantity as well as turnover.

During the financial year under report, the Company achieved a gross turnover of Rs, 31,977.66 Lacs compared to Rs, 29,122.75 Lacs during the previous financial year. The Profit Before Depreciation, Interest and Tax (PBDIT) has increased from Rs, 1,265.49 Lacs to Rs, 1,496.61 Lacs. Net Profit After Tax increased from Rs, 467.13 Lacs to Rs, 660.98 Lacs. In view of infrastructural development of growing Indian economy, the Directors are hopeful of even more increase in demand for Companyâs products resulting into satisfactory top & bottom line growth of the Company in near future. Detailed analysis as to review of the Companyâs operational and financial performance is given in the Management Discussion & Analysis Report.

3. Dividend

Considering the profit, growth and bright future of the Company, the Directors have decided to share the Companyâs profit with the Shareholders by way of giving them Final Dividend at a rate which is 50% more than that given in the financial year ended on March 31, 2015. Accordingly, the Directors are pleased to recommend a dividend of Rs, 1.50 (15%) per equity share on 30,18,300 equity shares of the Company of Rs, 10/- each for the financial year ended on March 31, 2016. The total amount of Final Dividend recommended is Rs, 45.27 Lacs and dividend distribution tax would be Rs, 9.22 Lacs.

4. Listing

With Regional Stock Exchanges

The equity shares of the Company are listed with the Ahmadabad Stock Exchange Limited and the Calcutta Stock Exchange Limited and the listing fees has been duly and timely paid to both the Stock Exchanges during the financial year under report.

With Bombay Stock Exchange

During the financial year under report, 30,18,300 equity shares of the Company having face value of Rs, 10/- each got listed with the Bombay Stock Exchange (âBSEâ) w.e.f. May 28, 2015 under the âDirect Listing Route.â Initial as well as Annual Listing fees have been duly and timely paid by the Company to BSE.

5. Details in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the internal audit function is well defined. To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all the locations of the Company. Based on the report of internal audit function, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

6. Details of Subsidiary / Joint Venture / Associate Companies

The Company doesnât have any Subsidiary, Joint Venture or Associate Company.

Group Companies to the Arfin India Limited includes M/s. Mahendra Aluminum Company Limited & M/s. Krish Ferro Industries Private Limited.

7. Material Changes and Commitment, if any, affecting the Financial Position of the Company

8. Deposits

During the financial year under report, your Company has not accepted any deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

9. Statutory Auditors

M/s. Raman M. Jain & Co., Statutory Auditors of the Company were re-appointed at the 22nd Annual General Meeting of the Company for a period of three consecutive financial years (including transitional period). In accordance with the provisions of Section 139 of the Companies Act, 2013 & Rules framed there under, the Board recommends the members to ratify their appointment from the conclusion of this 24^th Annual General Meeting up to the conclusion of 25^th Annual General Meeting.

The Auditorsâ Report for the financial year ended on March 31, 2016 forms part of this Annual Report and the same does not contain any qualification, reservation or adverse remark.

10. Secretarial Auditors

In terms of Section 204 of the Companies Act,

2013, the Board of Directors of your Company has appointed M/s. Kamlesh M. Shah & Co., Practicing Company Secretaries, Ahmadabad as a Secretarial Auditors to conduct an Audit of secretarial records and compliances, for the financial year ending on March 31, 2017.

The Secretarial Audit Report for the financial year ended on March 31, 2016 is annexed herewith as Annexure-5 to this report and the same does not contain any qualification, reservation or adverse remarks.

11. Cost Auditors

The Board of Directors of your Company has appointed M/s. C. B. Modh & Co., Cost Accountants, Ahmadabad, as Cost Auditors to conduct Audit of Cost Records for financial year ending on March 31, 2017.

12. Share Capital

During the financial year under report, the Company didnât make any issue of equity shares with differential voting rights, sweat equity shares or under employee stock options scheme.

Further, the Company didnât make any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.

13. Directors & Key Managerial Personnel

I. Cessation of Directors

During the financial year under report, Ms. Mona Chhapia resigned from the post of Additional Independent Director of the Company w.e.f. September 10, 2015 and thus ceases to be Director of the Company. The Board places on record its sincere appreciation for the valuable services rendered by Ms. Mona Chhapia during her tenure.

II. Retirement by Rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Mahendra R. Shah (DIN: 00182746) will retire by rotation at this Annual General Meeting of the Company and being eligible, offers himself for reappointment. The Board recommends his appointment.

In this connection, it is clarified that as per the Articles of Association of the Company, the Managing Director and Whole Time Director are not liable to retire by rotation unless otherwise decided by the Board. Since there are only 3 Non Independent Directors out of whom one is Whole Time Director and another is Managing Director, to

comply with the provisions of Section 152(6) of the said Act, both the aforesaid Directors who are otherwise Non Rotational Directors, have consented to be liable to retire by rotation and the Board has decided that Mr. Mahendra R. Shah being longest in office would retire by rotation.

III. Appointment

a. Executive Directors

During the financial year under report, Mrs. Pushpa M. Shah (DIN: 00182754), has been appointed as an Additional Executive Director of the Company w.e.f. November 5, 2015. Her appointment is proposed for approval of the members.

b. Independent Directors

During the financial year under report, Mr. Shantilal Mehta (DIN: 06459451) has been designated as an Independent Director of the Company w.e.f. November 5, 2015. His appointment as an Independent Director is proposed for approval of the members.

Further, Mr. Dilip Kumar Daga and Mr. Rameshkumar Babulal Shah, who were originally appointed as Additional Independent Directors by the Board at its meeting held on August 25, 2014 were appointed as Independent Directors by the members at the previous Annual General Meeting held on September 27, 2015.

The Independent Directors have submitted the declaration of independence, as required pursuant to the provisions of Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of Independence as provided under Section 149(6).

A separate meeting of Independent Directors of the Company was held on March 29, 2016 in accordance with the provisions of Clause VII of the Schedule IV of the Companies Act, 2013.

c. Company Secretary and Compliance Officer

During the financial year under report, Ms. Riddhi N. Shah resigned and thus ceases to be Company Secretary of the Company w.e.f. July 20, 2015.

Further, Mr. Durgesh D. Soni, a member of the Institute of Company Secretaries of India (ICSI), who was appointed in her place as the Company Secretary and Compliance Officer of the Company at the meeting of Board of Directors held on July 20, 2015, resigned and thus ceases to be the Company Secretary of the Company w.e.f. closure of working hours of May 6, 2016.

Mr. Purvesh Pandit, a member of the Institute of Company Secretaries of India (ICSI) was appointed in his place as Company Secretary and Compliance Officer of the Company at the meeting of Board of Director held on May 21, 2016.

IV. Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has appointed Mrs. Pushpa M. Shah as Woman Director on the Board of the Company during the financial year under report. She is an Executive Director of the Company.

V. Evaluation of the Boardâs Performance

During the financial year under report, exercise of evaluation was carried out through a structured evaluation process covering various aspects of the Boardâs functioning such as composition of the Board & Committee(s), experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of each individual Director including the Boardâs Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgments, safeguarding of minority shareholdersâ interest etc.

The evaluation of the Independent Directors was carried out by the entire Board excluding Independent Directors and that of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. This may be considered as a statement under provisions of Section 134(3)(p) of the Companies Act, 2013 and Rule 8(4) of the Companies (Accounts) Rules, 2014. The Board of your Company is composed with proper number of Executive and NonExecutive Directors.

VI. Remuneration Policy

The Company follows a policy on remuneration of Directors and Senior Management Employees. The policy has been approved by the Nomination & Remuneration Committee and the Board. More details on the same has been given in the Corporate Governance Report.

The policy on Remuneration of Directors, Key Managerial Personnel and Senior Employees can be accessed on website of the Company at following web link:

http://www.arfin.co.in/pdf/policies/remuneration-

of-directors-key-managerial-personnel-and-

senior-employees-policy.pdf

14. Number of Meetings of Board of Directors

The Board of Directors met 6 times during the financial year ended on March 31, 2016. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

15. Composition of Audit Committee

The Board has constituted an Audit Committee which comprises of Mr. Dilip Kumar Daga as the Chairman and Mr. Rameshkumar Babulal Shah & Mr. Mahendra R. Shah as members.

Further, all the recommendations were accepted by the Board of Directors during the period under report. More details on the committee are given in the Corporate Governance Report.

16. Related Party Transactions

All the related party transactions are being entered on armâs length basis, in ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and relevant Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large.

All the related party transactions are presented to the Audit Committee and the Board. Omnibus approval has been obtained from Audit Committee, Board of Directors and members for the transactions with the related parties.

The Policy on Related Party Transactions as approved by the Board has been uploaded on the Companyâs website at the following web link: http://www.arfin.co.in/pdf/policies/related-party-transactions-policy.pdf

17. Establishment of Vigil Mechanism / Whistle Blower Policy for Directors and Employees

The Company promotes ethical behavior in all its business activities and has put in place a mechanism wherein the employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the Companyâs Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Board. The Whistle Blower Policy has been duly communicated within the Company.

Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the Audit Committee in this regard.

The said Vigil Mechanism / Whistle Blower Policy has been uploaded on website of the Company and can be accessed at following web link: http://www.arfin.co.in/pdf/policies/vigil-mechanism-or-whistle-blower-policy.pdf

18. Nomination and Remuneration Committee

The Board has constituted a Nomination and Remuneration Committee which comprises of Mr. Rameshkumar Babulal Shah as the Chairman and Mr. Dilip Kumar Daga & Mr. Shantilal Mehta as members. The policy, required to be formulated by the Nomination and Remuneration Committee, under Section 178(3) of the Companies Act, 2013 is uploaded on the Companyâs website at the web link:

http://www.arfin.co.in/pdf/policies/remuneration-

of-directors-key-managerial-personnel-and-

senior-employees-policy.pdf

More details on the Committee has been given in the Corporate Governance Report.

19. Stakeholder Relationship Committee

The Board has constituted a Stakeholder Relationship Committee which comprises of Mr. Shantilal Mehta as the Chairman and Mr. Mahendra R. Shah & Mr. Purvesh Pandit as members.

The above Committee has been reconstituted and Mr. Purvesh Pandit has taken place as a member of the Committee with effect from May 21, 2016, as approved by the Board at its meeting held on that day.

More details on the Committee has been given in the Corporate Governance Report.

20. Internal Complaints Committee (ICC)

At the Board meeting held on May 22, 2015, the Company has constituted a committee named âInternal Complaints Committeeâ at its Registered / Corporate Office. The said committee has been formulated both to comply with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under and to provide the employees safety against harassment, if any.

A policy adopted by the Company for Prevention of Sexual Harassment is available on its website at the following web link:

http://www.arfin.co.in/pdf/policies/prevention-of-

sexual-harassment-policy.pdf

During the financial year ended on March 31, 2016, the Company did not receive any complaints pertaining to sexual harassment.

21. Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

The Company did not grant / make any Loan / Investment and provide Guarantees in respect of loans availed by others, under the provisions of Section 186 of the Companies Act, 2013 and Rules framed there under during the financial year under report.

22. Managerial Remuneration

The Company follows a policy on remuneration of Directors, KMPs and Senior Management Employees. The Company has paid remuneration to the Executive as well as sitting fees to the Non Executive Directors during the financial year under report. More details on the Managerial Remuneration has been given in the Corporate Governance Report.

23. Management Discussion & Analysis Report

A detailed analysis of the Companyâs performance is made in the Management Discussion and Analysis Report, which forms part of this Annual Report.

24. Corporate Governance Report

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance as per the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

25. Code of Conduct

The Board has laid down a Code of Conduct (âCodeâ) for the Board Members, Managerial Personnel and for Senior Management Employees of the Company. This Code has been posted on the Companyâs website at http://arfin.co.in/code-conduct.html. All the Board Members and Senior Management Personnel have affirmed compliance with this Code. A declaration signed by the Managing Director to this effect forms part of the Corporate Governance Report.

The Board has also laid down a Code of Conduct for the Independent Directors pursuant to the provisions of Section 149(8) and Schedule IV to the Companies Act, 2013 via terms and conditions for appointment of Independent Directors, which is a guide to the professional conduct for Independent Directors and has been uploaded on the website of the Company at following web link:

http://www.arfin.co.in/pdf/disclosures/terms-and-

conditions-of-appointment-of-independent-

directors.pdf

26. Risk Management Policy

The Board of Directors has developed and implemented a Risk Management Policy for the Company. It has identified and assessed internal and external risks, with potential impact and likelihood that may impact the Company in achieving its strategic objectives or may threaten its existence. The Policy lays down the procedures for risk identification, description, evaluation, estimation, reporting and development of action plan. The policy includes identification of elements of risks which mainly covers Strategic Risk, Operational Risk, Financial Risk and Hazardous Risks. The same can be accessed from the website of the Company at following web link: http://www.arfin.co.in/pdf/policies/risk-management-policy.pdf

More details on the risk and concern factors has been given in the Management Discussion & Analysis Report.

27. Corporate Social Responsibility

During the financial year ended on March 31, 2016, the Company has attracted criteria for Corporate Social Responsibility (CSR) by crossing net profit beyond '' 5 Crores, pursuant to the provisions of Section 135 of the Companies Act, 2013 including Rules framed there under and thus provision of amount for CSR activities has been made for the financial year ended on March 31, 2016.

Accordingly, the Company has constituted a Corporate Social Responsibility Committee with following Directors:

- Mr. Mahendra R. Shah

- Mr. Shantilal Mehta

- Mrs. Pushpa M. Shah

The Committee at its first meeting held on July 11, 2016 approved the Corporate Social Policy. The same can be accessed from the website of the Company at following web link: http://www.arfin.co.in/pdf/policies/corporate-social-responsibility-policy.pdf

28. Directorsâ Responsibility Statement

Pursuant to the provisions of Section 134(3)(c)of the Companies Act, 2013, your Directors, based on the representations received from the head of the various departments, and after due enquiry, confirm that:

(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 for the financial year ended on March 31, 2016 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;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

29. Disclosure u/s 164(2) of the Companies Act, 2013

The Company has received the disclosure in Form DIR-8 from its Directors being appointed or reappointed and has noted that none of the Directors are disqualified under Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

30. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as to conservation of energy, technology absorption and foreign exchange earnings and outgo required to be disclosed in terms of Section 134 of the Companies Act, 2013 & Rule 8 of the Companies (Accounts) Rules, 2014 have been given separately as Annexure - 1.

31. Extract of Annual Return

The Extract of Annual Return in the Form MGT-9 is enclosed herewith as Annexure - 2.

32. Form AOC-2

Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred in Section 188(1) of the Companies Act, 2013 is enclosed herewith as Annexure - 3.

33. Disclosure as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The details as per Rule 5(1) & (2) of the aforesaid Rule are enclosed herewith as Annexure - 4.

34. Secretarial Audit Report

The Secretarial Audit Report given by Mr. Kamlesh M. Shah, Proprietor of M/s. Kamlesh M. Shah & Co., Practicing Company Secretary, Ahmadabad, is enclosed herewith as Annexure - 5.

35. Auditors Certificate on Corporate Governance

A Certificate from Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as Annexure - 6.

36. Disclaimer

Though, the applicability and adherence of provisions of regulations relating to Corporate Governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 being not mandated under the provisions of Regulation 15 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the Companies falling under the criteria of having Paid up Equity Share Capital not exceeding '' 10 Crores and Net Worth not exceeding '' 25 Crores as on the last date of previous financial year, the Board of Directors of your Company has still made sufficient efforts to comply with the provisions related to Corporate Governance and to disclose the relevant information in the Directorsâ Report, Corporate Governance Report and in the entire Annual Report, to the extent possible as a matter of prudence and good governance.

37. Acknowledgments

Your Directors express their deep sense of gratitude to the Bankers, Central & State Governments, their departments, the local authorities, other Regulators and the Stock Exchanges for their continued guidance and support.

We would also like to place on record our sincere appreciation for the dedication, commitment and hard work put in by every member of the Arfin family. The Board further expresses that the credit of the success of Arfin goes to each & every member of Arfin family equally. The Management is deeply grateful for the confidence and faith that all the stakeholders have always reposed in them.

For and on Behalf of the Board of Directors

Mahendra R. Shah

Place: Ahmadabad (Chairman)

Date: July 22, 2016 (DIN: 00182746)

Mar 31, 2015

The Directors have pleasure in presenting their 23rd Annual Report on the Businesses and Operations of the Company together with Audited Accounts for the financial year ending on March 31, 2015.

1. Financial Summary Rs,in Lacs

Particulars 2014-15 2013-14

Revenue From Operations 28,028.69 21,319.43

Less: Central Excise Duty 3,033.74 2,282.00

Net Revenue From Operations 24,994.94 19,037.43

Profit / (Loss) Before Taxation 705.31 401.45

Provisions For Income Tax including Deferred Tax 238.18 136.95

Profit / (Loss) After Taxation 467.13 264.51

Proposed Dividend 30.18 Nil

Transfer to General Reserves 40.00 Nil

Profit Carried to Balance Sheet 467.13 264.51

Accumulated Balance of Profit 958.36 568.39

2.State of Company's Affair

Your Company's performance during the financial year under report has increased in terms of production, sales quantity as well as turnover.

During the financial year under report, the Company achieved a gross turnover of Rs. 28,028.69 Lacs compared to Rs. 21,319.43 Lacs during the previous financial year. The profit before depreciation and tax increased from Rs. 443.62 Lacs to Rs. 780.75 Lacs. Net profit after tax increased from Rs. 264.51 Lacs to Rs. 467.13 Lacs. In view of infrastructural development of growing Indian economy, your Directors are hopeful of even more increase in demand for Company's products resulting into satisfactory top & bottom line growth of the Company in near future. Detailed analysis as to review of Company's operational and financial performance is given in Management Discussion & Analysis Report.

3.Dividend

Your Directors are pleased to recommend a dividend of Rs,1/- (10%) per equity share on 30,18,300 equity shares of the Company of Rs,10/- each for the financial year 2014-15. Total amount of dividend shall be Rs, 30,18,300/- and dividend distribution tax would be Rs, 6,03,482/-.

4.Listing

With Regional Stock Exchanges

The equity shares of the Company are listed with the Ahmedabad Stock Exchange Limited and the Calcutta Stock Exchange Limited and the listing fees has been duly and timely paid to both the Stock Exchanges for the financial year 2014-15 & 2015-16 as well.

With Bombay Stock Exchange

30,18,300 equity shares of the Company having face value of Rs. 10/- each got listed with the Bombay Stock Exchange ("BSE") w.e.f. May 28, 2015 under the "Direct Listing Route." Initial as well as Annual Listing fees have been duly and timely paid by the Company to BSE.

5.Details in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements

The Company has an Internal Control System,

commensurate with the size, scale and complexity of its operations. The scope and authority of the internal audit function is well defined. To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

6. Details of Subsidiary / Joint Venture / Associate Companies

The Company doesn't have any Subsidiary, Joint Venture or Associate Company.

Group Companies to the Arfin India Limited includes M/s. Mahendra Aluminum Company Limited & M/s. Krish Ferro Industries Private Limited (Formerly known as Arfin Capital Limited).

7.Material Changes and Commitment, if any, Affecting the Financial Position of the Company

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these Financial Statements relate and on the date of this report. Further, during the financial year under report, no significant or material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and operations of the Company in future.

8.Deposits

The details relating to deposits covered under

Chapter V of the Companies Act, 2013:

(a) accepted and repaid during the year: NIL

(b) remained unpaid or unclaimed as at end of the year: NIL

(c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: No

(i) at the beginning of the year: Not Applicable

(ii) maximum during the year: Not Applicable

(iii) at the end of the year: Not Applicable

The details of deposits which are not in compliance with the requirements of Chapter V of the Act: NIL.

9.Statutory Auditors

M/s. Raman M. Jain & Co., Statutory Auditors of the Company were re-appointed at the 22nd Annual General Meeting of the Company for a period of three years (including transitional period).

In accordance with the provisions of Section 139 of the Companies Act, 2013 & Rules framed there under, the Board recommends the members to ratify their appointment up to the conclusion of next Annual General Meeting.

10. Secretarial Auditor

Mr. Kamlesh M. Shah, Proprietor of M/s. Kamlesh M. Shah & Co., Practicing Company Secretary, Ahmedabad has been appointed by the Board of Directors as Secretarial Auditor of your Company for the financial year ended on March 31, 2015 & March 31, 2016.

11. Statutory and Secretarial Audit Report

The Statutory Auditor's Report is enclosed herewith, which is self explanatory and no comment from the Board of Directors of the Company is required as no qualification, reservation or adverse remark or disclaimer is given by the Statutory Auditor.

Further, the Board wishes to explain for the observations / comments given by the Secretarial Auditor in his report that the Company has passed various necessary resolutions for borrowings and the same have been properly recorded in the minutes books. However, difficulty in interpretation of provisions of new Companies Act, 2013, absence of appointment of Company Secretary and Compliance Officer on the Management of the Company for a part of financial year under report and lack of proper secretarial guidance led to some non compliances, for which the Company is in process of taking corrective measures.

12. Cost Auditors

M/s. C. B. Modh & Co., Cost Accountants, Ahmedabad has been appointed as Cost Auditors by the Board of Directors for auditing the cost accounts of your Company for the financial year ended on March 31, 2015 & March 31, 2016.

13. Share Capital

During the financial year 2014-15, the Company re- issued 1,55,000 equity shares at Rs. 40/- per share which includes Rs. 10/- per share for face value & Rs. 30/- per share being securities premium amount. These equity shares were originally forfeited on October 21, 2013.

During the financial year under report, the Company didn't make any issue of equity shares with differential voting rights, sweat equity shares or under employee stock options scheme. Further, the Company didn't make any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.

14. Directors & Key Managerial Personnel I. Cessation

As a part of restructuring of the Board of Group Companies of M/s. Arfin India Limited, Mrs. Pushpaben M. Shah (DIN: 00182754), resigned as the Director of the Company w.e.f. November 22, 2014. Mrs. Pushpaben M. Shah joined the Board in April, 2000 as a Director of the Company.

The Board places on record its sincere appreciation for the valuable services rendered by Mrs. Pushpaben M. Shah during her tenure.

II. Retirement by Rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and Article 125 & 126 of the existing Articles of Association of the Company, Mr. Jatin M. Shah, (DIN: 00182683) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re- appointment. The Board recommends his appointment.

In this connection, it is clarified that as per the present Articles of Association of the Company, the Managing Director and Whole Time Director are not liable to retire by rotation. However, there are only 3 Non Independent Directors out of which one is Managing Director and another is Whole Time Director. Thus, to comply with the provisions of Section 152(6) of the said Act, both the Executive Directors who are otherwise Non Rotational Directors, have consented to be liable to retire by rotation and Mr. Jatin M. Shah being longest in office would retire by rotation.

III. Appointment

Mr. Mahendra R. Shah as an Executive Chairman and Whole Time Director

During the financial year under report, Mr. Mahendra R. Shah (DIN: 00182746), has been designated as an Executive Chairman and Whole Time Director of the Company w.e.f. October 1, 2014 for a period of five years ending on March 31, 2019.

Mr. Jatin M. Shah as a Managing Director During the financial year under report, Mr. Jatin M. Shah (DIN: 00182683), has been designated as the Managing Director of the Company w.e.f. October 1, 2014 for a period of five years ending on March 31, 2019.

Company Secretary and Compliance Officer During the financial year under report, Ms. Riddhi N. Shah was appointed as Company Secretary and was designated as Compliance Officer of the Company w.e.f. November 26, 2014. Due to some personal reasons, she has resigned and thus ceases to be Company Secretary of the Company w.e.f. July 20, 2015. Mr. Durgesh D. Soni, a member of the Institute of Company Secretaries of India (ICSI) was appointed in her place as Company Secretary and Compliance Officer of the Company at the meeting of Board of Directors held on July 20, 2015.

IV. Appointment of Independent Directors

With coming into force of the Companies Act, 2013, the Board appointed Mr. Ramesh Babulal Shah (DIN: 00955337), Mr. Dilip Kumar Daga (DIN: 02918995) & Ms. Mona Chhapia (DIN: 07035947) as Independent Directors of the Company with effect from August 25, 2014, August 25, 2014 & December 6, 2014 respectively.

The shareholders are requested to approve their appointment at this ensuing Annual General Meeting.

The Independent Directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of Independence as provided under Section 149(6). The profile of the Independent Directors forms part of the Corporate Governance Report.

Further, a separate meeting of Independent Directors of the Company was held on March 27, 2015 in accordance with the provisions of Clause VII of the Schedule IV of the Companies Act, 2013.

V. Evaluation of the Board's Performance

During the financial year under report, exercise of evaluation was carried out through a structured evaluation process covering various aspects of the Boards' functioning such as composition of the Board & Committee(s), experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board's Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgments, safeguarding of minority shareholders' interest etc.

The evaluation of the Independent Directors was carried out by the entire Board excluding Independent Directors and that of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. This may be considered as a statement under provisions of Section 134(3)(p) of the Companies Act, 2013 and Rule 8(4) of the Companies (Accounts) Rules, 2014. Thus, the Board of your Company comprises of a proper mixture of Executive and Non Executive Directors.

VI. Remuneration Policy

The Company follows a policy on remuneration of Directors and Senior Management Employees. The policy has been approved by the Nomination & Remuneration Committee and the Board. More details on the same are given in the Corporate Governance Report.

The policy on Remuneration of Directors, Key Managerial Personnel and Senior Employees can be accessed on website of the Company at following web link:

http://www.arfin.co.in/pdf/policies/remuneration-of- directors-key-managerial-personnel-and-senior- employees-policy.pdf

VII. Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, your Company has appointed

Ms. Mona Chhapia as Woman Director on the Board of the Company during the financial year under report. She is also the Independent Director of the Company.

15. Number of Meetings of Board of Directors

The Board of Directors met 23 times during the financial year 2014-15. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

16. Composition of Audit Committee

The Board has constituted an Audit Committee which comprises of Mr. Dilip Kumar Daga as the Chairman and Mr. Rameshkumar Babulal Shah & Mr. Mahendra R. Shah as members. Further, all the recommendations were accepted by the Board of Directors during the period under report. More details on the committee are given in the Corporate Governance Report.

17. Related Party Transactions

All the related party transactions are entered on arm's length basis, in ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. There were no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large.

All the related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained from Audit Committee & Board of Directors for the transactions which are foreseen and repetitive in nature.

Particulars of contracts or arrangements with related parties referred in Section 188(1) of the Companies Act, 2013 & Rules framed there under in Form AOC-2 is enclosed herewith this Board's Report as

Annexure - 3.

The Policy on Related Party Transactions as approved by the Board has been uploaded on the Company's website at the web link:

http://www.arfin.co.in/pdf/policies/related-party- transactions-policy.pdf

18. Establishment of Vigil Mechanism / Whistle Blower Policy for Directors and Employees

The Company promotes ethical behavior in all its business activities and has put in place at the Board meeting held on May 22, 2015, a mechanism wherein the employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Board. The Whistle Blower Policy has been appropriately communicated within the Company.

Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the Audit Committee.

The said Vigil Mechanism / Whistle Blower Policy has been uploaded on website of the Company and can be accessed at following web link:

http://www.arfin.co.in/pdf/policies/vigil-mechanism- or-whistle-blower-policy.pdf

19. Nomination and Remuneration Committee

The Board has constituted a Nomination and Remuneration Committee which comprises of Mr. Rameshkumar Babulal Shah as the Chairman and Mr. Dilip Kumar Daga & Mr. Shantilal Mehta as members. The policy, required to be formulated by the Nomination and Remuneration Committee, under Section 178(3) of the Companies Act, 2013 is uploaded on the Company's website at the web link:

http://www.arfin.co.in/pdf/policies/remuneration-of- directors-key-managerial-personnel-and-senior- employees-policy.pdf

More details on the Committee are given in the Corporate Governance Report.

20. Stakeholder Relationship Committee

The Board has constituted a Stakeholder Relationship Committee which comprises of Mr. Shantilal Mehta as the Chairman and Mr. Mahendra R. Shah & Mr. Durgesh D. Soni as members.

The above Committee has been reconstituted and Mr. Durgesh D. Soni has taken place as a member of the Committee with effect from July 20, 2015, as approved by the Board at its meeting held on that day.

More details on the Committee are given in the Corporate Governance Report.

21. Internal Complaints Committee (ICC)

At the Board meeting held on May 22, 2015, the Company has constituted a committee named "Internal Complaints Committee" at its Registered / Corporate Office. The said committee has been formulated both to comply with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under and to provide the employees safety against harassment, if any.

A policy adopted by the Company for Prevention of Sexual Harassment is available on its website at following web link.

http://www.arfin.co.in/pdf/policies/prevention-of- sexual-harassment-policy.pdf

During the financial year ended on March 31, 2015 the Company did not receive any complaints pertaining to sexual harassment.

22. Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

The Company did not grant / make any Loan or Investment under provisions of Section 186 of the Companies Act, 2013 and Rules framed there under during the financial year under report.

23. Managerial Remuneration

The Company follows a policy on remuneration of Directors, KMP and Senior Management Employees. The Company has paid remuneration to the Executive as well as Non Executive Directors during the financial year under report. More details on Managerial Remuneration are given in the Corporate Governance Report.

24. Management Discussion & Analysis Report

A detailed analysis of the Company's performance is made in the Management Discussion and Analysis Report, which forms part of this Annual Report.

25. Corporate Governance Report

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a Certificate from Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under revised Clause 49 of the Listing Agreement is annexed to this Report.

26. Code of Conduct

The Board has laid down a Code of Conduct ("Code") for Board Members, Managerial Personnel and for Senior Management Employees of the Company. This Code has been posted on the Company's website at http://arfin.co.in/code- conduct.html. All the Board Members and Senior Management Personnel have affirmed compliance with this Code. A declaration signed by the Managing Director to this effect forms part of the Corporate Governance Report.

The Board has also laid down a Code of Conduct for Independent Directors pursuant to Section 149(8) and Schedule IV to the Companies Act, 2013 via terms and conditions for appointment of Independent Directors, which is a guide to professional conduct for Independent Directors and has been uploaded on the website of the Company at following web link:

http://arfin.co.in/pdf/disclosures/terms-and-conditions -of-appointment-of-independent-directors.pdf

27. Risk Management Policy

The Board of Directors has developed and implemented Risk Management Policy for the Company. It has identified and assessed internal and external risks, with potential impact and likelihood that may impact the Company in achieving its strategic objectives or may threaten its existence. The Policy lays down procedures for risk identification, description, evaluation, estimation, reporting and development of action plan. The policy includes identification of elements of risks which mainly covers Strategic Risk, Operational Risk, Financial Risk and Hazardous Risks. The same can be accessed from the website of the Company at following web link:

http://www.arfin.co.in/pdf/policies/risk-management -policy.pdf

More details on the risk and concern factors are given in the Management Discussion & Analysis Report.

28. Corporate Social Responsibility

During the financial year under report, the Company did not attract any criteria required for Corporate Social Responsibility. Accordingly, the provisions of Section 135 of the Companies Act, 2013 including Rules framed there under relating to Corporate Social Responsibility including but not limited to constitution of Committee therein and implementation of Policy on Corporate Social Responsibility are not applicable to the Company.

29. Directors' Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors, based on the representations received from the head of the various departments, and after due enquiry, confirm that:

(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 for the financial year ending on March 31, 2015 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;

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to

ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

30. Disclosure u/s 164(2) of the Companies Act, 2013

The Company has received the disclosure in Form DIR Â 8 from its Directors being appointed or re- appointed and has noted that none of the Directors are disqualified under Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

31. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as to conservation of energy, technology absorption and foreign exchange earnings and outgo required to be disclosed in terms of Section 134 of the Companies Act, 2013 & Rule 8 of the Companies (Accounts) Rules, 2014 are given separately as Annexure Â 1.

32. Extract of Annual Return

The Extract of Annual Return in the Form MGT-9 is enclosed herewith as Annexure Â 2.

33. Form AOC-2

Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred in Section 188(1) of the Companies Act, 2013 is enclosed herewith as Annexure Â 3.

34. Disclosure as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The details as per Rule 5(1) of the aforesaid Rule are enclosed herewith as Annexure Â 4.

Further, there is no employee falling under the criteria of Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 for receipt of remuneration stated therein and thus the statement under the said Sub-rule is not required to be given.

35. Secretarial Audit Report

The Secretarial Audit Report given by Mr. Kamlesh M. Shah, Proprietor of M/s. Kamlesh M. Shah & Co., Practicing Company Secretary (C.P. No.: 2072) is enclosed herewith as Annexure - 5.

36. Disclaimer

Though, the applicability of adherence of provisions

of revised Clause 49 of the Listing Agreement being not mandated, for the time being, for the Companies falling under the criteria of having Paid up Equity Share Capital not exceeding Rs. 10 Crore and Net Worth not exceeding Rs. 25 Crore as on the last date of previous financial year, as stated under the circular CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014 issued by the Securities and Exchange Board of India, the Board of Directors of your Company has still made sufficient efforts to provide the information in the Directors' Report and in the entire Annual Report, to the extent possible as a matter of prudence and good governance and to disclose as maximum possible information as the Company should / can.

37. Acknowledgments

Your Directors express their deep sense of gratitude to the Bankers, Central and State Governments and their departments and the local authorities for their continued guidance and support.

We would also like to place on record our sincere appreciation for the dedication, commitment and hard work put in by every member of the Arfin family. The Board further expresses that the credit of the success of Arfin goes to each & every member of Arfin family equally. The Management is deeply grateful for the confidence and faith that the shareholders & all other stakeholders have always reposed in them.

For and on Behalf of the Board of Directors

Place: Ahmedabad Mahendra R. Shah

Date: July 20, 2015 (Chairman)

(DIN: 00182746)

Mar 31, 2014

Dear members,

The Directors have pleasure in presenting their 22nd Annual Report and the Audited Accounts of the Company for the year ended on March 31, 2014 and Compliance Certificate for the year 2013 - 14.

Financial Highlights Rs. in Lacs 2013-14 2012-13

Revenue From Operations 21,319.43 18,610.91

Less: Central Excise Duty 2,282.00 1,719.81

Net Revenue From Operation 19,037.43 16,891.10

Profit/(Loss) Before Taxation 401.45 441.47

Provision for Income Tax including Deferred Tax 136.95 132.62

Profit/(Loss) After Taxation 264.51 308.84

Proposed Dividend Nil Nil

Transfer to General Reserves Nil Nil

Profit Carried to Balance Sheet 264.51 308.84

Accumulated Balance of Profit 568.39 303.88

Operational and Financial Review

The Company has accelerated its business growth during the year under report. After resuming its business operation during the year 2011-12 the Company has improved its business performance every year. The new factory installed at Chhatral is utilizing production capacity at its full fledged. The Company''s main products like aluminum or ferro alloys have been widely accepted by Company''s well reputed big customers. The production capacity is increased to 3000 MT/month for Aluminum. Thus there is sustainable business growth for the Company for past couple of years. During the year under report

the Net Revenue from Operation went up by 12.71% to Rs.19,037.43 Lacs as compared to Rs.16,891.10 Lacs of the previous year. However due to increase in turnover, the Company had to avail more financial assistance from bank. As a result of increased employees emoluments and finance cost, the profit before and after tax is decreased as compared to previous year. However directors feel that over a period of time finance cost shall be reduced to increase profitability of the Company. The directors of your Company express their satisfaction towards the business and financial performance of the Company.

Dividend

The Board of Directors does not recommend any payment of dividend for the year 2013 - 14.

Conservation of Energy, Technology absorption, Foreign Exchange Earnings and outgo

The particulars as to conservation of energy, technology absorption and foreign exchange earnings and outgo to be disclosed in terms of Section 217 (1) (e) of the Companies Act, 1956 read with rules framed there under is given separately by way of annexure.

Employees Details

No person was employed in a Company during the year in receipt of remuneration at a rate prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

Directors'' Responsibility Statement

In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, the directors'' state:

1. That in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. That the Directors have 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 or loss of the company for that period.

3. That the directors have 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.

4. That the directors have prepared the annual accounts on a going concern basis.

Public Deposits/Financial Resources

The Company has not invited any public deposits. The Company could manage it financial needs by way of fund and non fund based credit facilities from the bank. Further the Company during the year effected forfeiture of partly paid up shares. The Company forfeited 10,55000 Equity Shares and reissued 9,00,000 Equity Shares at Rs.40 (Including premium of Rs.30/-) to its directors or existing share holders or others.

Directors

Smt. Pushpaben M. Shah retires by rotation at the ensuing Annual General Meeting of the Company and being eligible offers herself for re-appointment.

Auditors

M/s. Raman M. Jain & Co., the retiring auditors are eligible for reappointment as auditors. The Board recommends reappointing them as auditors of the Company as per resolution set out in the notice of Annual General Meeting of the Company and to fix their remuneration.

Acknowledgement

The Board wish to place on record the unstinted support of all associated with the Company and smooth relation with the bankers of the Company. The Board hopes for the continuance support from all of them in future too.

Annexure 1 Forming Part of Report of Board of Directors

Conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo as per Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

Conservation of Energy

(a) Energy conservation measures taken: None

(b) Additional investments or proposals, if any, being implemented for reduction of consumption of energy: Nil

(c) Impact of (a) and (b) above: Not Applicable

(d) Total energy consumption and energy consumption per unit of production:

By order of the Board of Directors For, Arfin India Limited

Date: May 27, 2014 Place: Ahmedabad

Sd/- Mahendra R. Shah - Chairman

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