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Arrow Textiles Ltd.

BSE: 533068 Sector: Industrials
NSE: ARROWTEX ISIN Code: INE933J01015
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VOLUME 7175
52-Week high 55.00
52-Week low 32.00
P/E 28.24
Mkt Cap.(Rs cr) 90.34
Buy Price 47.45
Buy Qty 4.00
Sell Price 0.00
Sell Qty 0.00
OPEN 47.15
CLOSE 47.85
VOLUME 7175
52-Week high 55.00
52-Week low 32.00
P/E 28.24
Mkt Cap.(Rs cr) 90.34
Buy Price 47.45
Buy Qty 4.00
Sell Price 0.00
Sell Qty 0.00

Arrow Textiles Ltd. (ARROWTEX) - Director Report

Company director report

TO THE SHAREHOLDERS

Your Directors have pleasure in presenting the Ninth (9th) Directors' Report of yourCompany along with the financial statements for the financial year ended 31 st March2016.

1. OPERATING RESULTS

Certain key aspects of your Company's performance during the financial year ended 31stMarch 2016 as compared to the previous financial year are summarised below:

( Rs in ‘000)
Particulars Year Ended 31.03.2016 Year Ended 31.03.2015
Income for the year 505777.60 479767.55
Profit before Interest Depreciation and Tax 135256.67 121318.45
Finance Charges 12437.98 13056.79
Profit before Depreciation and Taxes 122818.69 108261.66
Depreciation & Amortisation 41991.74 39007.15
Provisions for Taxation/ Deferred Tax 27691.14 21953.70
Prior Period Items / Exceptional Items Nil 5.86
Minority Interest & Profit from Associate Company Nil Nil
Net Profit for the Current Year 53135.81 47294.95
Earlier Years Balance Brought forward 112189.09 64894.13
Net Profit available for Appropriation 165324.90 112189.08
Appropriation:
Proposed Dividend on Equity Shares 19043.939 Nil
Dividend on Equity Shares 19043.94 Nil
Dividend Distribution Tax 3703.67 Nil
Transfer to General Reserves Nil Nil
Balance carried to Balance Sheet 142577.30 112189.08

2. DIVIDEND

Your Directors recommend for approval of the Members at the ensuing Annual GeneralMeeting dividend of 10% i.e. Rs 1/- per Equity Share of Rs 10/- each for the financialyear ended 31st March 2016. The dividend will be paid in compliance with the applicablerules and regulations.

3. SHARE CAPITAL

There was no change in the Company's share capital during the year under review.

The Company's paid up equity share capital is Rs 190439390 comprising of 19043939equity shares of Rs 10/- each.

4. OVERVIEW OF OPERATIONS

During the year under review the Company recorded a total income of of Rs 505777.60(‘000) and Net Profit Rs 53135.81 (‘000). For further information kindly referto Management Discussion and Analysis Report forming part of this Annual report.

5. EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013(“the Act”) and as prescribed in Form No. MGT-9 of the Companies (Management andAdministration) Rules 2014 is appended as Annexure I to this Annual Report.

6. NUMBER OF MEETINGS OF THE BOARD

The Board met four times in financial year 2015-16 viz. on 12th May 2015 27th July2015 31st October 2015 and 6th February 2016.

7. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

i. In the preparation of the annual accounts for financial year ended 31st March 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures;

ii. The Directors have 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 at 31st March 2016 and of the profit ofthe Company for that period.

iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the Provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have prepared the annual accounts for financial year ended 31 stMarch 2016 on a ‘going concern' basis.

v. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and have been operatingefficiently.

vi. The Directors have devised proper systems to ensure compliance with provisions ofall applicable laws and that such systems were adequate and operating effectively.

8. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted the declaration of Independenceas required under Section 149(7) of the Act confirmingthat they meet the criteria ofIndependence under Section 149(6) of the Act and Regulation 16 (1)(b) of the SecuritiesExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations).

9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes Independence of a Director and othermatters provided under sub-section (3) of Section 178 of the Act and Regulation 19 ofListing Regulations is appended as Annexure II to this Annual Report.

10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act read with Companies (Meeting of Board and Its Powers) Rules 2014as on 31st March 2016 are given in the notes to the Financial Statements forming part ofthis Annual report.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2015-16 your Company has entered into transactions withrelated parties as defined under section 2(76) of the Act read with the Companies(Specification and Definitions Details) Rules 2014 and Rules made thereunder erstwhileClause 49 of the Listing Agreement and Regulation 23 of the Listing Regulations.

During the financial year 2015-16 the Company has not entered into transactions withrelated parties which qualify as material transactions under the erstwhile ListingAgreement and as per Listing Regulations. The Form AOC- 2 of the Companies (Accounts)Rules 2014 is set out as Annexure III to this Annual Report.

The details of related party transactions as required under Accounting Standard-18 areset out in notes to accounts to the Financial Statements forming part of this AnnualReport.

The Policy on Related Party Transaction may be accessed on the Company's website at thelink: http://www. arrowtextiles.com/Related-Party-Transaction-Policy.pdf

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.

13. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act read with theCompanies (Accounts) Rules 2014 is given in Annexure IV to this Annual Report.

14. BUSINESS RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk Management Committee toframe implement and monitor the risk management plan for the Company.

The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage.

The business risk framework defines the risk identification and its management approachacross the enterprise at various levels including documentation and reporting. Theframework helps in identifying risks trend exposure and potential impact analysis on aCompany's business.

15. VIGIL MECHANISM

The Company has adopted a Vigil Mechanism and Whistle Blower Policy for Directors andEmployees in compliance with the provisions of Section 177(10) of the Act and Regulation22 of the Listing Regulations to report genuine concerns and to provide for adequatesafeguards against victimization of persons who may use such mechanism. The said policy isalso available on the Company's website www.arrowtextiles.com.

16. ANNUAL EVALUATION OF PEFORMANCE OF THE BOARD

Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulationsthe Board has carried out an annual evaluation of its own performance performance of theDirectors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria for theBoard its Committees and Directors.

The Board's functioning was evaluated on various aspects including inter alia degreeof fulfilment of key responsibilities Board structure and composition establishment anddelineation of responsibilities to various Committees effectiveness of Board processesinformation and functioning.

The Committees of the Board were evaluated after taking inputs from the Committeemembers on the basis of criteria such as degree of fulfillment of key responsibilitiesadequacy of Committee composition and effectiveness of meetings.

The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on aspects such as attendance and contribution at Board/ CommitteeMeetings and guidance/support to the management outside Board/ Committee Meetings. Inaddition the Chairman was also evaluated on key aspects of his role including settingthe strategic agenda of the Board encouraging active engagement by all Board members.

The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. In a separate meeting of independentdirectors performance of non-independent directors performance of the board as a wholeand performance of the chairman was evaluated taking into account the views of executivedirectors and non-executive directors.

17. SUBSIDIARY COMPANIES

The Company does not have any subsidiaries. However the Company has formulated policyfor determining material subsidiary and the same is available on Company's website and thesame may be accessed at the linkhttp://www.arrowtextiles.com/Policy-for-Determining-Material-Subsidiaries.pdf.

18. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT 2013

The Company has neither accepted nor renewed any deposits during the financial year2015-16 in terms of Chapter V of the Act.

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.

20. INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

The Company has in place adequate internal financial control with reference tofinancial statements. The Company has adopted accounting policies which are in line withthe Accounting Standards prescribed in the Companies (Accounting Standards) Rules 2006that continue to apply under Section 133 and other applicable provisions if any of theAct read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions ofthe Act to the extent applicable. These are in accordance with generally acceptedaccounting principles in India.

The Company in preparing its financial statements makes judgments and estimates basedon sound policies and uses external agencies to verify/validate them as and whenappropriate. The basis of such judgments and estimates are also approved by the StatutoryAuditors and Audit Committee.

The Internal Auditor evaluates the efficacy and adequacy of internal control systemaccounting procedures and policies adopted by the Company for efficient conduct of itsbusiness adherence to Company's policies safeguarding of Company's assets preventionand detection of frauds and errors and timely preparation of reliable financialinformation etc. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152(6)(e) of the Act Ms. Anjali Mody(DIN : 02784924) Director of the Company will retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for re-appointment.

22. AUDITORS

1. Statutory Auditor

The Board of Directors recommends to re-appoint M/s. Amit Desai & Co CharteredAccountants as Statutory Auditors of the Company who were appointed as Statutory Auditorsof the Company at the Annual General Meeting held on 25th September 2014 to hold officefrom the conclusion of 7 th Annual General Meeting till the conclusion of 10th AnnualGeneral meeting subject to ratification of their appointment at every Annual GeneralMeeting. The Board of Directors of the Company at its meeting held on 12th May 2016recommended to members of the Company ratification of appointment of M/s. Amit Desai &Co Chartered Accountants as the Statutory Auditors of theCompanyforfinancial . year2016-2017 There are no qualifications reservations or adverse remarks or disclaimers madeby Statutory Auditors in their report.

Your Company has received a letter from M/s. Amit Desai & Co to the effect thattheir re-appointment if made would be under the second and third proviso to Section 139(1) of the Act and that they are not disqualified within the meaning of Section 141 of theAct read with Rule 4(1) of the Companies (Audit and Auditors) Rules 2014.

2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed A. K. Jain & Co. a firm of Company Secretaries in Practice to undertakethe Secretarial Audit of the Company for the year ended 31st March 2016. The SecretarialAudit Report is annexed as Annexure V to this Annual Report.

There are no qualifications reservations or adverse remarks or disclaimers made bySecretarial Auditor of the

Company in his secretarial audit report.

23. CORPORATE GOVERNANCE

Pursuant to erstwhile Listing Agreement and Listing Regulations the ManagementDiscussion & Analysis Report and Corporate Governance Report together with Certificatefrom Practicing Company Secretary on compliance with the conditions of CorporateGovernance as laid down forms a part of this Annual Report.

24. AUDIT COMMITTEE OF THE COMPANY:

The Company's Audit Committee comprises the following Directors:

1. Mr. Aditya Mangaldas (Chairman);

2. Mr. Aurobind Patel;

3. Mr. Chand Arora;

4. Dr. Vrajesh Udani

The composition of the Audit Committee is in compliance with the requirements ofSection 177 of the Act and Regulation 18 of the Listing Regulations.

25. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereare no employees drawing remuneration in excess of the limits set out in the said rulesand disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies. (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure VI to this AnnualReport.

26. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation received fromshareholders bankers and other business constituents during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the commitmentdisplayed by all executives officers and staff resulting in the successful performanceof the Company during the year.

By Order of the Board of Directors
JAYDEV MODY
Chairman
DIN: 00234797
Mumbai 10th August 2016
Registered Office:
Plot No. 101-103
19th Street MIDC
Satpur Nasik - 422 007 Maharashtra.
CIN: L51494MH2008PLC178384
Email ID: secretarial@arrowtextiles.com
Website: www.arrowtextiles.com
Tel No : 91-253-3918200

ANNEXURE II

NOMINATION AND REMUNERATION POLICY

The Board of Directors of Arrow Textiles Limited (“the Company”)re-constituted the “Nomination and Remuneration Committee” at its Meeting heldon 4th August 2014.

1. OBJECTIVE

The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andClause 49 under the Listing Agreement (as amended from time to time). The Key Objectivesof the Committee would be: 1.1. To guide the Board in relation to appointment and removalof Directors Key Managerial Personnel and Senior Management.

1.2. To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.

1.3. To recommend to the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.

1.4. To provide to Key Managerial Personnel and Senior Management reward linkeddirectly to their effort performance dedication and achievement relating to theCompany's operations.

1.5. To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.

1.6. To devise a policy on Board diversity.

1.7. To develop a succession plan for the Board and to regularly review the plan.

2. DEFINITIONS

2.1. Act means the Companies Act 2013 and Rules framed thereunder as amended fromtime to time. 2.2. Board means Board of Directors of the Company.

2.3. Directors mean Directors of the Company. 2.4. Key Managerial Personnel means2.4.1. Managing Director; 2.4.2. Whole-time Director;

2.4.3. Chief Financial Officer;

2.4.4. Company Secretary; and

2.4.5. such other officer as may be prescribed.

2.5. Senior Management means personnel of the company who are members of its coremanagement team excluding the Board of Directors including Functional Heads.

3. ROLE OF COMMITTEE

3.1 The Committee shall:

3.1.1. Formulate the criteria for determining qualifications positive attributes andindependence of a 3.1.2. Identify persons who are qualifiedto become Director and personswho may be appointed in Key Managerial in accordance with the criteria laid down in thispolicy.

3.1.3.Recommend to the Board appointment remuneration and removal of Director KMPand Senior Management Personnel.

3.2. Policy for appointment and removal of Director KMP and Senior Management

3.2.1.Appointment criteria and qualifications a) The Committee shall identify andascertain the integrity qualification expertise and experience of the person forappointment as Director KMP or at Senior Management level and recommend to the Board his/ her appointment. b) A person should possess adequate qualification expertise andexperience for the position he / she is considered for appointment. The Committee hasdiscretion to decide whether qualification expertise and experience possessed by a personis sufficient / satisfactory for the concerned position. c) The Company shall not appointor continue the employment of any person as Managing Director or Whole-time Director whohas attained the age of seventy years. Provided that the term of the person holding thisposition may be extended beyond the age of seventy years with the approval of shareholdersby passing a special resolution based on the explanatory statement annexed to the noticefor such motion indicating the justification for extension of appointment beyond seventyyears.

3.2.2.Term / Tenure a) Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its Managing Director orWhole-time Director for a term not exceeding five years at a time. No re-appointment shallbe made earlier than one year before the expiry of term. b) Independent Director:

- An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.

- No Independent Director shall hold office for more than two consecutive terms butsuch

Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for 5 years or more in the Company as on October1 2014 or such other date as may be determined by the Committee as per regulatoryrequirement; he/ she shall be eligible for appointment for one more term of 5 years only.

- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company or such othernumber as may be prescribed under the Act.

3.2.3.Evaluation

The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly).

3.2.4.Removal

Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations thereunder the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules and regulations.

3.2.5.Retirement

The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.

3.3. Policy relating to the Remuneration for the Managing Director or Whole-timeDirector KMP and Senior Management Personnel 3.3.1.General: a) The remuneration /compensation / commission etc. to the Managing Director or Whole-time Director KMP andSenior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required. b) The remuneration and commission to be paid to the Managing Directoror Whole-time Director shall be in accordance with the percentage / slabs / conditionslaid down as per the provisions of the Act and in line with the Company's policy. c)Increments to the existing remuneration/ compensation structure may be recommended by theCommittee to the Board which should be within the slabs approved by the Shareholders inthe case of Managing Director or Whole-time Director. d) Where any insurance is taken bythe Company on behalf of its Managing Director or Whole-time

Director Chief Executive Officer Chief Financial Officer the Company Secretary andany other employees for indemnifying them against any liability the premium paid on suchinsurance shall not be treated as part of the remuneration payable to any such personnel.Provided that if such person is proved to be guilty the premium paid on such insuranceshall be treated as part of the remuneration.

3.3.2.Remuneration to Whole-time / Executive / Managing Director KMP andSenior Management Personnel:

a) Fixed pay:

The Managing Director or Whole-time Director/ KMP and Senior Management Personnel shallbe eligible for a monthly remuneration as may be approved by the Board on therecommendation of the Committee. The breakup of the pay scale and quantum of perquisitesincluding employer's contribution to P.F pension scheme medical expenses club feesetc. shall be decided and approved by the Board/ the Person authorized by the Board on therecommendation of the Committee and approved by the shareholders and Central Governmentwherever required.

b) Minimum Remuneration:

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing Director or Whole-time Director inaccordance with the provisions of Schedule V of the Act and if it is not able to complywith such provisions with the previous approval of the Central Government.

c) Provisions for excess remuneration:

If any Managing Director or Whole-time Director draws or receives directly orindirectly by way of remuneration any such sums in excess of the limits prescribed underthe Act or without the prior sanction of the Central Government where required he / sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company. The Company shall not waive recovery of such sum refundable to it unlesspermitted by the Central Government.

3.3.3.Remuneration to Non-Executive / Independent Director:

a) Remuneration / Commission:

The remuneration fixedas per the slabs and conditions mentioned in the / commissionshall be Articles of Association of the Company and/or the Act.

b) Sitting Fees:

The Non- Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof. Provided that the amount of such feesshall not exceed Rs One Lac per meeting of the Board or Committee or such amount asmay be prescribed by the Central Government from time to time.

c) Commission: Commission may be paid within the monetary limit approved byshareholders subject to the limit not exceeding 1% of the profits of the Company computedas per the applicable provisions of the Act

d) Stock Options: An Independent Director shall not be entitled to any stock option ofthe Company.

4. MEMBERSHIP

4.1 The Committee shall consist of a minimum 3 non-executive Directors majority ofthem being independent. 4.2 Minimum two (2) members shall constitute a quorum for theCommittee meeting.

4.3 Membership of the Committee shall be disclosed in the Annual Report.

4.4 Term of the Committee shall be continued unless terminated by the Board ofDirectors.

5. CHAIRPERSON

5.1 Chairperson of the Committee shall be an Independent Director.

5.2 Chairperson of the Company may be appointed as a member of the Committee but shallnot be a Chairman of the Committee.

5.3 In the absence of the Chairperson the members of the Committee present at themeeting shall choose one amongst them to act as Chairperson.

5.4 Chairman of the Nomination and Remuneration Committee meeting could be present atthe Annual General Meeting or may nominate some other member to answer the shareholders'queries.

6. FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such regular intervals as may berequired.

7. COMMITTEE MEMBERS' INTERESTS

7.1 A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.

7.2 The Committee may invite such executives as it considers appropriate to bepresent at the meetings of the Committee.

8. SECRETARY

The Company Secretary of the Company shall act as Secretary of the Committee.

9. VOTING

9.1 Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee. 9.2 In the case of equality of votes theChairman of the meeting will have a casting vote.

10. NOMINATION DUTIES

The duties of the Committee in relation to nomination matters include:

10.1 Ensuring that there is an appropriate induction in place for new Directors andmembers of Senior Management and reviewing its effectiveness; 10.2 Ensuring that onappointment to the Board Non-Executive Directors receive a formal letter of appointmentin accordance with the Guidelines provided under the Act; 10.3 Identifying andrecommending Directors who are to be put forward for retirement by rotation.

10.4 Determining the appropriate size diversity and composition of the Board;

10.5 Setting a formal and transparent procedure for selecting new Directors forappointment to the Board; 10.6 Developing a succession plan for the Board and SeniorManagement and regularly reviewing the plan; 10.7 Evaluating the performance of the Boardmembers and Senior Management in the context of the Company's performance from businessand compliance perspective;

10.8 Making recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract.

10.9 Delegating any of its powers to one or more of its members or the Secretary of theCommittee; 10.10 Recommend any necessary changes to the Board; and 10.11 Considering anyother matters as may be requested by the Board.

11. REMUNERATION DUTIES

The duties of the Committee in relation to remuneration matters include:

11.1 to consider and determine the Remuneration Policy based on the performance andalso bearing in mind that the remuneration is reasonable and sufficient to attract retainand motivate members of the Board and such other factors as the Committee shall deemappropriate all elements of the remuneration of the members of the Board.

11.2 to approve the remuneration of the Senior Management including key managerialpersonnel of the Company maintaining a balance between fixed and incentive pay reflectingshort and long term performance objectives appropriate to the working of the Company.

11.3 to delegate any of its powers to one or more of its members or the Secretary ofthe Committee. 11.4 to consider any other matters as may be requested by the Board.

11.5 Professional indemnity and liability insurance for Directors and seniormanagement.

12. MINUTES OF COMMITTEE MEETING

Proceedings of all meetings must be minitised and signed by the Chairman of theCommittee at the subsequent meeting. Minutes of the Committee meetings will be tabled atthe subsequent Board and Committee meeting.

For and on behalf of the Board of Directors
Jaydev Mody
Chairman
Mumbai 10th August 2016 DIN: 00234797

ANNEXURE III

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Account) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's lengthbasis.

Name(s) of Related Party and nature of relationship
Nature of contracts/arrangements/transactions
Duration of the contracts/arrangements/ transactions
Salient terms of the contracts or arrangements or transactions including the value if any Justification for entering into such contracts or arrangements or transaction NIL
Date(s) of approval by the Board Amount paid as advances if any Date on which the special resolution was passed in the general meeting as required under first proviso to section 188

2. Details of the material contracts or arrangements or transactions at arm'slength basis

Name(s) of Related Party and nature of relationship
Nature of contracts/arrangements/transactions
Duration of the contracts/arrangements/ transactions
Salient terms of the contracts or arrangements or transactions including the value if any Date(s) of approval by the Board Amount paid as advances if any NA

 

For and on behalf of the Board of Directors
Jaydev Mody
Chairman
Mumbai 10th August 2016 DIN: 00234797

ANNEXURE IV

Particulars in respect of Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 (A) CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy

The Company continues its policy of giving priority to energy conservation measuresincluding regular review of energy generation and consumption and effective control onutilization of energy. The following energy conservation methods were implemented duringthe year :

a) Use of energy efficient equipments.

b) Intensified Internal Audit aimed at detecting wastage of electricity.

c) Campaign based synchronisation of utilities with plant operations.

d) The Company has installed LED street light fitting in place of regular fluorescentfittings.

The impact of above energy conservation measures is that it has resulted in improvementof power factor consequential tarrif benefits.

(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

(a) The Company is using latest technology machines since 4 to 5 years. The Company isusing Airjet label weaving imported machines in place of earlier rapier technology.

(b) The Company has developed B2B software through which our customers can see almostall the information they require online 24X7. Using our software they can create anartwork for multilingual wash-care labels online by punching a few variable information.With help of ERP & B2B software we have overhauled our entire service approach toexceed our customers growing expectations.

(ii) the benefits derived like product improvement cost reduction product developmentor import

(a) Quality and productivity improvement.

(b) Cost reduction.

(c) Energy consumption.

(d) Lower wastages.

(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)

(a) the details of technology imported : Nil

(b) the year of import : Nil

(c) whether the technology been fully absorbed : Nil

(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof : Nil

(iv) The expenditure incurred on Research and Development

Not identified separately.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year the foreign exchange outgo was Rs 16661.67 (‘000) (L.Y. Rs80222.34 (‘000)) the foreign exchange earned was Rs 2858.01 (‘000) (L.Y. Rs2412.02 (‘000)).

For and on behalf of the Board of Directors
Jaydev Mody
Chairman
Mumbai 10th August 2016 DIN: 00234797

ANNEXURE V

Form No. MR-3 SECRETARIAL AUDIT REPORT

For The financial year ended on 31st March 2016

[Pursuant to section 204(1) of the Companies Act 2013 and Rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Arrow Textiles Limited

Plot No.101-103

19th Street MIDC Satpur Nashik - 422007.

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Arrow Textiles Limited (CIN:L51494MH2008PLC178384) (hereinafter called “the Company”). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA') and the rules madethereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings (Not Applicable to the

Company during the Audit Period);

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act'):-a. The Securities and Exchange Boardof India (Substantial Acquisition of Shares and Takeovers) Regulations 2011; b. TheSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations 1992and The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015; c. The Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2009

(Not Applicable to the Company during the Audit Period); d. The Securities andExchange Board of India Benefits)Regulations 2014(Share Based Employee (Not

Applicable to the Company during the Audit Period); e. The Securities and ExchangeBoard of India (Issue and Listing of Debt Securities) Regulations 2008 (Not

Applicable to the Company during the Audit Period); f. The Securities and ExchangeBoard of India (Registrars to an Issue and Share Transfer Agents) Regulations 1993regarding the Companies Act and dealing with client (Not Applicable to the Companyduring the financial year under review); g. The Securities and Exchange Board of India(Delisting of Equity Shares) Regulations 2009 (Not Applicable to the Company duringthe Audit Period) and h. The Securities and Exchange Board of India (Buyback ofSecurities) Regulations 1998 (Not Applicable to the

Company during the Audit Period).

(vi) The management has confirmed that there is/ are no sector specific laws applicableto the Company during the Audit Period.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India(Applicable with effect from 1st July 2015);

(ii) The Equity Listing Agreement entered into by the Company with Stock Exchanges i.e.BSE Limited and National Stock Exchange of India Ltd and Securities and Exchange Board ofIndia (Listing obligations and Disclosures Requirements) Regulations 2015 (LODR) (LODRapplicable from 1st December 2015).

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines standards etc.

We further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. There were nochanges in the composition of the Board of Directors took place during the period underreview.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least 7 days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Decisions at the meetings of the Board of Directors were carried through on the basisof majority. There were no dissenting views by any member of the Board of Directors duringthe period under review.

We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

For A K Jain & Co.
Company Secretaries
Ashish Kumar Jain
Place: Mumbai Proprietor
Date: 10th August 2016 FCS: 6058. CP: 6124

Note: This report is to be read with our letter of even date which is annexed as‘Annexure A' and forms an integral part of this report.

ANNEXURE A

To

The Members

Arrow Textiles Limited

Plot No. 101-103 19th Street MIDC Satpur Nasik - 422007

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis

6. The secretarial audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

For A K Jain & Co.
Company Secretaries
Ashish Kumar Jain
Place: Mumbai Proprietor
Date: 10th August 2016 FCS: 6058. CP: 6124

ANNEXURE-VI

Disclosures pursuant to Section 197(12) of the Companies Act 2013 and Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are as under

(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year 2015-16

Sr. No. Name of Director Remuneration of Director for Financial Year Ratio of remuneration of each Director to median remuneration of employees
2015-16 (Rs in ‘000)
Non-Executive Directors
1 Mr. Jaydev Mody 15.00 0.08
2 Mr. Aditya Mangaldas 30.00 0.16
3 Ms. Anjali Mody 20.00 0.11
4 Mr. Aurobind Patel 30.00 0.16
5 Dr. Vrajesh Udani 20.00 0.11
Executive Directors
6 Mr. Chand Arora 8399.99 45.16

(ii) The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary or Manager if any in the financial year 2015-16

Sr. No. Name of Director / KMP Remuneration of Director / KMP for Financial Year 2015-16 (Rs In ‘000) % of increase in Remuneration in the Financial Year 2015-16
1 Mr. Jaydev Mody 15.00 Nil
2 Mr. Aditya Mangaldas 30.00 Nil
3 Ms. Anjali Mody 20.00 Nil
4 Mr. Aurobind Patel 30.00 Nil
5 Dr. Vrajesh Udani 20.00 Nil
6 Mr. Chand Arora 8399.99 Nil
(Managing Director)
7 Mr. Ulhas Kale 1112.13 8.33
(Chief Financial Officer)
8 Ms. SushamaVesvikar 451.10 6.24
(Company Secretary)

(iii) The percentage increase in median remuneration of employees for the financialyear 2015-16

12.05%

(iv) The number of permanent employees on the rolls of the Company as on 31st March2016

310

(v) Average percentile increase already made in the salaries of employees other thanmanagerial personnel in the last financial year and its comparision with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration

The average percentage increase made in the salaries of total employees other than theKey Managerial Personnel for FY-2016 is around 10% to 12% while the average increase inthe remuneration of the Key Managerial Personnel is 0.06%.

(vi) Affirmation that the remuneration is as per the remuneration policy of the Company

It is affirmed that the remuneration paid is as per the Remuneration Policy forDirectors Key Managerial Personnel and other employees adopted by the Company.

Particulars in terms of the provisions of Section 197(12) of the Act read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

There are no employees in the Company drawing remuneration in excess of Rs10200000/- in terms of provisions of Section 197 (12) read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) 2014.

For and on behalf of the Board of Directors
Jaydev Mody
Chairman
Mumbai 10th August 2016 DIN: 00234797