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Arrow Textiles

BSE: 533068|NSE: ARROWTEX|ISIN: INE933J01015|SECTOR: Textiles - Weaving
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Directors Report Year End : Mar '16    Mar 15

TO THE SHAREHOLDERS

The Directors have pleasure in presenting the Ninth (9th) Directors’ Report of your Company along with the financial statements for the financial year ended 31st March, 2016.

1. OPERATING RESULTS

Certain key aspects of your Company’s performance during the financial year ended 31st March, 2016, as compared to the previous financial year are summarized below:

(Rs. in ‘000)

Particulars

Year Ended 31.03.2016

Year Ended 31.03.2015

Income for the year

5,05,777.60

4,79,767.55

Profit before Interest, Depreciation and Tax

1,35,256.67

1,21,318.45

Finance Charges

12,437.98

13,056.79

Profit before Depreciation and Taxes

1,22,818.69

1,08,261.66

Depreciation & Amortization

41,991.74

39,007.15

Provisions for Taxation/ Deferred Tax

27,691.14

21,953.70

Prior Period Items / Exceptional Items

Nil

5.86

Minority Interest & Profit from Associate Company

Nil

Nil

Net Profit for the Current Year

53,135.81

47,294.95

Earlier Years Balance Brought forward

1,12,189.09

64,894.13

Net Profit available for Appropriation

1,65,324.90

1,12,189.08

Appropriation:

Proposed Dividend on Equity Shares

1,90,43,.939

Nil

Dividend on Equity Shares

19,043.94

Nil

Dividend Distribution Tax

3,703.67

Nil

Transfer to General Reserves

Nil

Nil

Balance carried to Balance Sheet

1,42,577.30

1,12,189.08

2. DIVIDEND

Your Directors recommend for approval of the Members at the ensuing Annual General Meeting, dividend of 10% i.e. Rs. 1/- per Equity Share of Rs. 10/- each, for the financial year ended 31st March, 2016. The dividend will be paid in compliance with the applicable rules 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. 19,04,39,390 comprising of 1,90,43,939 equity shares of Rs. 10/each.

4. OVERVIEW OF OPERATIONS

During the year under review, the Company recorded a total income of Rs. 5,05,777.60 (Rs.000) and Net Profit of Rs. 53,135.81 (Rs.000). For further information, kindly refer to 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 and Administration) 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 July, 2015, 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, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. 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 31st March, 2016 and of the profit of the Company for that period.

iii. 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.

iv. The Directors have prepared the annual accounts for financial year ended 31st March, 2016 on a ‘going concern’ basis.

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently.

vi. The Directors have devised proper systems to ensure compliance with provisions of all 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 Independence as required under Section 149(7) of the Act, confirming that they meet the criteria of Independence under Section 149(6) of the Act and Regulation 16 (1)(b) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).

9. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act and Regulation 19 of Listing 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 of Section 186 of the Act, read with Companies (Meeting of Board and Its Powers) Rules, 2014 as on 31st March, 2016 are given in the notes to the Financial Statements forming part of this Annual report.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2015-16, your Company has entered into transactions with related parties as defined under section 2(76) of the Act, read with the Companies (Specification and Definitions Details), Rules, 2014 and Rules made there under, erstwhile Clause 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 with related parties which qualify as material transactions under the erstwhile Listing Agreement 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 are set out in notes to accounts to the Financial Statements forming part of this Annual Report.

The Policy on Related Party Transaction may be accessed on the Company’s website at the link: 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 of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

13. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Act, read with the Companies (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 to frame, implement and monitor the risk management plan for the Company.

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

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Company’s business.

15. VIGIL MECHANISM

The Company has adopted a Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. The said policy is also 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 Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

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

The Board’s functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

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

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

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors.

17. SUBSIDIARY COMPANIES

The Company does not have any subsidiaries. However, the Company has formulated policy for determining material subsidiary and the same is available on Company’s website and the same may be accessed at the link http://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 year 2015-16 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 would impact 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 to financial statements. The Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act, to the extent applicable. These are in accordance with generally accepted accounting principles in India.

The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.

The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Company’s policies, safeguarding of Company’s assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, process owners undertake corrective action 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.

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 Annual General 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, Chartered Accountants as Statutory Auditors of the Company who were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 25th September, 2014 to hold office from the conclusion of 7th Annual General Meeting till the conclusion of 10th Annual General meeting, subject to ratification of their appointment at every Annual General Meeting. The Board of Directors of the Company at its meeting held on 12th May, 2016 recommended to members of the Company ratification of appointment of M/s. Amit Desai & Co, Chartered Accountants as the Statutory Auditors of the Company for financial year 2016-2017.

There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditors, in their report.

Your Company has received a letter from M/s. Amit Desai & Co to the effect that their 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 the Act 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 and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed A. K. Jain & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2016. The Secretarial Audit Report is annexed as Annexure V to this Annual Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by Secretarial Auditor of the Company, in his secretarial audit report.

23. CORPORATE GOVERNANCE

Pursuant to erstwhile Listing Agreement and Listing Regulations, the Management Discussion & Analysis Report and Corporate Governance Report together with Certificate from Practicing Company Secretary, on compliance with the conditions of Corporate Governance 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 of Section 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, there are no employees drawing remuneration in excess of the limits set out in the said rules and disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies. (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure VI to this Annual Report.

26. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation received from shareholders, bankers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of 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

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