Your Directors have pleasure in presenting the 24th Annual Report on the Businesses andOperations of the Company together with Audited Accounts for the financial year ended onMarch 31 2016.
1. Financial Summary
Rs. In Lacs
|Particulars ||2015-16 ||2014-15 |
|Revenue from Operations ||30688.92 ||28028.69 |
|Less: Central Excise Duty ||3401.36 ||3033.74 |
|Net Revenue From Operations ||27287.56 ||24994.94 |
|Profit/(Loss) Before Tax ||1000.66 ||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 ||1489.85 ||958.36 |
2. State of Company's Affair
Your Company's performance during the financial year under report has increased interms of production sales quantity as well as turnover.
During the financial year under report the Company achieved a gross turnover ofRs.31977.66 Lacs compared to Rs.29122.75 Lacs during the previous financial year. TheProfit Before Depreciation Interest and Tax (PBDIT) has increased from Rs.1265.49 Lacsto Rs.1496.61 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 arehopeful of even more increase in demand for Company's products resulting into satisfactorytop & bottom line growth of the Company in near future. Detailed analysis as to reviewof the Company's operational and financial performance is given in the ManagementDiscussion & Analysis Report.
Considering the profit growth and bright future of the Company the Directors havedecided to share the Company's profit with the Shareholders by way of giving them FinalDividend at a rate which is 50% more than that given in the financial year ended on March31 2015. Accordingly the Directors are pleased to recommend a dividend of Rs.1.50 (15%)per equity share on 3018300 equity shares of the Company of Rs.10/- each for thefinancial year ended on March 31 2016. The total amount of Final Dividend recommended isRs.45.27 Lacs and dividend distribution tax would be Rs. 9.22 Lacs.
With Regional Stock Exchanges
The equity shares of the Company are listed with the Ahmedabad Stock Exchange Limitedand the Calcutta Stock Exchange Limited and the listing fees has been duly and timely paidto both the Stock Exchanges during the financial year under report.
With Bombay Stock Exchange
During the financial year under report 3018300 equity shares of the Company havingface 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 AnnualListing 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 theFinancial Statements
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the internal audit function iswell defined. To maintain its objectivity and independence the internal audit functionreports to the Chairman of the Audit Committee of the Board. The Internal Audit Departmentmonitors and evaluates the efficacy and adequacy of internal control system in theCompany its compliance with operating systems accounting procedures and policies at allthe locations of the Company. Based on the report of internal audit function processowners undertake corrective actions in their respective areas and thereby strengthen thecontrols. Significant audit observations and corrective actions thereon are presented tothe 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 Aluminium CompanyLimited & M/s. Krish Ferro Industries Private Limited.
7. Material Changes and Commitment if any affecting the Financial Position of theCompany
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these Financial Statements relateand on the date of this report. Further during the financial year under report nosignificant or material orders have been passed by any of the regulators or courts ortribunals impacting the going concern status and operations of the Company in future.
During the financial year under report your Company has not accepted any depositswithin the meaning of Sections 73 and 74 of the Companies Act 2013 read with theCompanies (Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-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 atthe 22nd Annual General Meeting of the Company for a period of three consecutive financialyears (including transitional period). In accordance with the provisions of Section 139thof the Companies Act 2013 & Rules framed there under the Board recommends themembers to ratify their appointment from the conclusion of this 24 Annual General Meetingup to the conclusion of 25th Annual General Meeting.
The Auditors' Report for the financial year ended on March 31 2016 forms part of thisAnnual Report and the same does not contain any qualification reservation or adverseremark.
10. Secretarial Auditors
In terms of Section 204 of the Companies Act 2013 the Board of Directors of yourCompany has appointed M/s. Kamlesh M. Shah & Co. Practicing Company SecretariesAhmedabad as a Secretarial Auditors to conduct an Audit of secretarial records andcompliances for the financial year ending on March 31 2017.
The Secretarial Audit Report for the financial year ended on March 31 2016 is annexedherewith as Annexure-5 to this report and the same does not contain any qualificationreservation or adverse remarks.
11. Cost Auditors
The Board of Directors of your Company has appointed M/s. C. B. Modh & Co. CostAccountants Ahmedabad as Cost Auditors to conduct Audit of Cost Records for financialyear ending on March 31 2017.
12. Share Capital
During the financial year under report the Company didn't make any issue of equityshares with differential voting rights sweat equity shares or under employee stockoptions scheme.
Further the Company didn't make any provision of money for purchase of its own sharesby 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 ofAdditional Independent Director of the Company w.e.f. September 10 2015 and thus ceasesto be Director of the Company. The Board places on record its sincere appreciation for thevaluable 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 theArticles of Association of the Company Mr. Mahendra R. Shah (DIN: 00182746) will retireby rotation at this Annual General Meeting of the Company and being eligible offershimself for reappointment. The Board recommends his appointment.
In this connection it is clarified that as per the Articles of Association of theCompany the Managing Director and Whole Time Director are not liable to retire byrotation unless otherwise decided by the Board. Since there are only 3 Non IndependentDirectors out of whom one is Whole Time Director and another is Managing Director tocomply with the provisions of Section 152(6) of the said Act both the aforesaid Directorswho are otherwise Non Rotational Directors have consented to be liable to retire byrotation and the Board has decided that Mr. Mahendra R. Shah being longest in office wouldretire by rotation.
a. Executive Directors
During the financial year under report Mrs. Pushpa M. Shah (DIN: 00182754) has beenappointed as an Additional Executive Director of the Company w.e.f. November 5 2015. Herappointment is proposed for approval of the members.
b. Independent Directors
During the financial year under report Mr. Shantilal Mehta (DIN: 06459451) has beendesignated as an Independent Director of the Company w.e.f. November 5 2015. Hisappointment as an Independent Director is proposed for approval of the members.
Further Mr. Dilip Kumar Daga and Mr. Rameshkumar Babulal Shah who were originallyappointed as Additional Independent Directors by the Board at its meeting held on August25 2014 were appointed as Independent Directors by the members at the previous AnnualGeneral Meeting held on September 27 2015.
The Independent Directors have submitted the declaration of independence as requiredpursuant to the provisions of Section 149(7) of the Companies Act 2013 stating that theymeet the criteria of Independence as provided under Section 149(6).
A separate meeting of Independent Directors of the Company was held on March 29 2016in accordance with the provisions of Clause VII of the Schedule IV of the Companies Act2013.
c. Company Secretary and Compliance Officer
During the financial year under report Ms. Riddhi N. Shah resigned and thus ceases tobe 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 ofthe Company at the meeting of Board of Directors held on July 20 2015 resigned and thusceases to be the Company Secretary of the Company w.e.f. closure of working hours of May6 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 atthe 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 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Companyhas appointed Mrs. Pushpa M. Shah as Woman Director on the Board of the Company during thefinancial year under report. She is an Executive Director of the Company.
V. Evaluation of the Board's Performance
During the financial year under report exercise of evaluation was carried out througha structured evaluation process covering various aspects of the Board's functioning suchas composition of the Board & Committee(s) experience & competencies performanceof specific duties & obligations governance issues etc. Separate exercise was carriedout to evaluate the performance of each individual Director including the Board's Chairmanwho were evaluated on parameters such as attendance contribution at the meetings andotherwise independent judgments safeguarding of minority shareholders' interest etc.
The evaluation of the Independent Directors was carried out by the entire Boardexcluding Independent Directors and that of the Chairman and the Non Independent Directorswas carried out by the Independent Directors. The Directors were satisfied with theevaluation results which reflected the overall engagement of the Board and its Committeeswith the Company. This may be considered as a statement under provisions of Section134(3)(p) of the Companies Act 2013 and Rule 8(4) of the Companies (Accounts) Rules2014. The Board of your Company is composed with proper number of Executive andNon-Executive Directors.
VI. Remuneration Policy
The Company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy has been approved by the Nomination & Remuneration Committee andthe 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 Employeescan 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 theCorporate Governance Report.
15. Composition of Audit Committee
The Board has constituted an Audit Committee which comprises of Mr. Dilip Kumar Daga asthe Chairman and Mr. Rameshkumar Babulal Shah & Mr. Mahendra R. Shah as members.
Further all the recommendations were accepted by the Board of Directors during theperiod under report. More details on the committee are given in the Corporate GovernanceReport.
16. Related Party Transactions
All the related party transactions are being entered on arm's length basis in ordinarycourse of business and in compliance with the applicable provisions of the Companies Act2013 and relevant Regulations of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. There were no materially significant related partytransactions made by the Company with Promoters Directors or Key Managerial Personneletc. 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 membersfor the transactions with the related parties.
The Policy on Related Party Transactions as approved by the Board has been uploaded onthe Company's 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 inplace a mechanism wherein the employees are free to report illegal or unethical behavioractual or suspected fraud or violation of the Company's Codes of Conduct or CorporateGovernance Policies or any improper activity to the Chairman of the Audit Committee of theCompany or Chairman of the Board. The Whistle Blower Policy has been duly communicatedwithin the Company.
Under the Whistle Blower Policy the confidentiality of those reporting violation(s) isprotected and they are not subject to any discriminatory practices. No personnel have beendenied access to the Audit Committee in this regard.
The said Vigil Mechanism/Whistle Blower Policy has been uploaded on website of theCompany 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 ofMr. Rameshkumar Babulal Shah as the Chairman and Mr. Dilip Kumar Daga & Mr. ShantilalMehta as members. The policy required to be formulated by the Nomination and RemunerationCommittee under Section 178(3) of the Companies Act 2013 is uploaded on the Company'swebsite 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 asmembers.
The above Committee has been reconstituted and Mr. Purvesh Pandit has taken place as amember of the Committee with effect from May 21 2016 as approved by the Board atitsmeeting 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 committeenamed Internal Complaints Committee at its Registered/Corporate Office. Thesaid committee has been formulated both to comply with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andRules 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 itswebsite 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 anycomplaints 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 ofloans availed by others under the provisions of Section 186 of the Companies Act 2013and 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 ManagementEmployees. The Company has paid remuneration to the Executive as well as sitting fees tothe Non Executive Directors during the financial year under report. More details on theManagerial Remuneration has been given in the Corporate Governance Report.
23. Management Discussion & Analysis Report A detailed analysis of the Company'sperformance is made in the Management Discussion and Analysis Report which forms part ofthis Annual Report.
24. Corporate Governance Report
Your Company practices a culture that is built on core values and ethical governancepractices and is committed to transparency in all its dealings. A
Report on Corporate Governance as per the provisions of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms part of this Annual Report.
25. Code of Conduct
The Board has laid down a Code of Conduct (Code) for the Board MembersManagerial Personnel and for Senior Management Employees of the Company. This Code hasbeen posted on the Company's website at http://arfin.co.in/code-conduct.html. All theBoard Members and Senior Management Personnel have affirmed compliance with this Code. Adeclaration signed by the Managing Director to this effect forms part of the CorporateGovernance Report.
The Board has also laid down a Code of Conduct for the Independent Directors pursuantto the provisions of Section 149(8) and Schedule IV to the Companies Act 2013 via termsand conditions for appointment of Independent Directors which is a guide to theprofessional conduct for Independent Directors and has been uploaded on the website of theCompany 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 theCompany. It has identified and assessed internal and external risks with potential impactand likelihood that may impact the Company in achieving its strategic objectives or maythreaten its existence. The Policy lays down the procedures for risk identificationdescription evaluation estimation reporting and development of action plan. The policyincludes identification of elements of risks which mainly covers Strategic RiskOperational Risk Financial Risk and Hazardous Risks. The same can be accessed from thewebsite 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 ManagementDiscussion & Analysis Report.
27. Corporate Social Responsibility
During the financial year ended on March 31 2016 the Company has attracted criteriafor Corporate Social Responsibility (CSR) by crossing net profit beyond Rs.5 Crorespursuant to the provisions of Section 135 of the Companies Act 2013 including Rulesframed there under and thus provision of amount for CSR activities has been made for thefinancial year ended on March 31 2016.
Accordingly the Company has constituted a Corporate Social Responsibility Committeewith 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 SocialPolicy. 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. Directors' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 yourDirectors based on the representations received from the head of the various departmentsand after due enquiry confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company for the financial year ended on March 312016 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 adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof 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 beingappointed or reappointed and has noted that none of the Directors are disqualified underSection 164(2) of the Companies Act 2013 read with Rule 14(1) of Companies (Appointmentand Qualification of Directors) Rules 2014.
30. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The particulars as to conservation of energy technology absorption and foreignexchange earnings and outgo required to be disclosed in terms of Section 134 of theCompanies Act 2013 & Rule 8 of the Companies (Accounts) Rules 2014 have been givenseparately 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 theCompany with related parties referred in Section 188(1) of the Companies Act 2013 isenclosed herewith as
33. Disclosure as per Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
The details as per Rule 5(1) & (2) of the aforesaid Rule are enclosed herewith asAnnexure 4.
34. Secretarial Audit Report
The Secretarial Audit Report given by Mr. Kamlesh M. Shah Proprietor of M/s. KamleshM. Shah & Co. Practicing Company Secretary Ahmedabad is enclosed herewith asAnnexure - 5.
35. Auditors Certificate on Corporate Governance A Certificate from Statutory Auditorsof the Company regarding compliance of conditions of Corporate Governance as stipulatedunder the provisions of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed herewith as Annexure - 6.
Though the applicability and adherence of provisions of regulations relating toCorporate 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 Companiesfalling under the criteria of having Paid up Equity Share Capital not exceeding Rs.10Crores and Net Worth not exceeding Rs.25 Crores as on the last date of previous financialyear the Board of Directors of your Company has still made sufficient efforts to complywith the provisions related to Corporate Governance and to disclose the relevantinformation in the Directors' Report Corporate Governance Report and in the entire AnnualReport to the extent possible as a matter of prudence and good governance.
Your Directors express their deep sense of gratitude to the Bankers Central &State Governments their departments the local authorities other Regulators and theStock Exchanges for their continued guidance and support.
We would also like to place on record our sincere appreciation for the dedicationcommitment and hard work put in by every member of the Arfin family. The Board furtherexpresses that the credit of the success of Arfin goes to each & every member of Arfinfamily equally. The Management is deeply grateful for the confidence and faith that allthe stakeholders have always reposed in them.
|For and on Behalf of the Board of Directors |
| ||Mahendra R. Shah |
|Place: Ahmedabad ||(Chairman) |
|Date: July 22 2016 ||(DIN: 00182746) |
Annexure 1 to the Directors' Report
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo[Pursuant to the Provisions of Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014]
(A) Conservation of Energy
|(i) steps taken or impact on conservation of energy ||Nil |
|(ii) steps taken by the Company for utilizing alternate sources of energy ||Nil |
|(iii) capital investment on energy conservation equipments ||Nil |
|(B) Technology Absorption || |
|(i) efforts made towards technology absorption ||Nil |
|(ii) benefits derived like product improvement cost reduction product development or import substitution ||Nil |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) || |
|(a) details of technology imported ||Nil |
|(b) year of import ||Not Applicable |
|(c) whether the technology been fully absorbed ||Not Applicable |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof ||Not Applicable |
|(iv) expenditure incurred on Research and Development ||Nil |
(C) Foreign Exchange Earnings and Outgo
|Description ||Rs. in Lacs |
|Foreign Exchange Earned (Actual Inflow) || |
|Sale of Finished Goods ||3504.27 |
|Others ||- |
|Total ||3504.27 |
|Foreign Exchange Used (Actual Outflow) || |
|Import of Raw Material ||8057.68 |
|Import of Stores ||0.61 |
|Import of Capital Goods ||- |
|Foreign Travelling Expenses ||7.91 |
|Others ||25.07 |
|Total ||8091.27 |
| ||For and on Behalf of the Board of Directors |
| ||Mahendra R. Shah |
|Place: Ahmedabad ||(Chairman) |
|Date: July 22 2016 ||(DIN: 00182746) |