Arora Fibres Ltd Directors Report

The Members,

Arora Fibres Limited

Your Directors present the twenty second Annual Report of your Company along with the Financial Statements for the year ended 31st March, 2015.

Financial Highlights:

Particulars	For the year ended March 31, 2015 Rupees in lacs	For the year ended March 31, 2014 Rupees in lacs
Revenue from operations	3551.20	6282.81
Operating Profit/ (Loss)	95.42	666.65
Extraordinary Item	302.46	0.00
Profit/ (Loss) before Tax	216.55	370.86
Provision for Tax	-	-
Profit/ (Loss) after Tax	216.55	370.86
Balance brought forward from previous year	(573.99)	(944.85)
Profit/ (Loss) carried to Balance Sheet	(357.44)	(573.99)

Dividend

The Directors do not propose to recommend any dividend for the year under review in view of accumulated losses.

Operations:

During the year under review, your Companys revenue declined by Rs.27.32 Crores. Sales of Polyester Staple Fibres declined to Rs.35.41 crores from Rs. 42.81 crores. The Company did not carry out much of Investment activity during the year. As a result the income from Investment activity declined to Rs.0.09 crores from Rs. 20.02 crores.

The Polyester Staple Fibre market is going through a volatile phase. During the first half of the year the market was favourable with good order traction. But during the second half market went into recession with drop in product prices and drying up of orders. The cost of raw materials did not decline in proportion to fall in product prices. This resulted into operating profit of just Rs.0.95 crores.

The extraordinary item is reversal of Excise Duty provision due to relief granted to the Company by Finance Act 2014 which has done away with retrospective amendment of Finance Act 2012 which had imposed excise duty on the Companys product.

Material changes and commitments after the end of financial year

There have been no material changes and commitments, if any, affecting the financial position of the Company, which have occurred between the end of the financial year and date of the report.

Particulars of loans, guarantees or investment

The Company does not have any loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013.

Human Resource

The Company continues to place significant importance on its human resources and enjoys cordial and peaceful relations at all levels. The Directors are pleased to place on record their appreciation of the services rendered by the employees at all levels.

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at workplace and matters connected therewith or incidental thereto covering all the aspects.

Particulars of Employee:

There is no information required to be given pursuant to section 197 read with Rule -5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Environment, Health & Safety:

Your Company is committed to ensure a clean and green pollution-free environment as well as a healthy and safe work place at its plant location. In fact the Companys business is of converting waste PET bottles into Polyster Staple Fibre. Thus the Companys operations are beneficial to the environment. Further the Company is taking environmental friendly initiatives like, energy saving projects and waste reduction initiatives.

Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo:

The Information on conservation of energy , technology absorption and foreign exchange earning and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure A“ which forms the part of the report .

Deposits

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Directors:

As per the provisions of Section 149(1), 161 and other applicable provision under The Companies Act, 2013, the Board has appointed Ms. Wilma Lobo as Additional Executive Woman Director of the Company with effect from March 16, 2015. The above appointment was based on recommendation of Nomination and Remuneration Committee and subject to approval of the Shareholders of the Company at the forthcoming Annual General Meeting.

The Board also appointed Mr. Navdeep Singh Khera as an Independent Director with effect from December 11, 2014. The appointment is subject to approval of the Shareholders of the Company at the forthcoming Annual General Meeting.

During the year, Mr. H V Deodhar resigned as Director due to personal reasons.

As per the provisions of the Companies Act, 2013 and Articles of Association, Mr. R. S. Arora is liable to retire by rotation at the Twenty Second Annual General Meeting.

Mr. R.S. Arora has confirmed his eligibility and willingness to accept the office of Directorship of your Company, if appointed. In the opinion of your Directors, Mr. R.S. Arora has the requisite qualifications and experience which would be useful for your Company and would enable him to contribute effectively to your Companys good operational performance and overall good corporate governance in his capacity as Director of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Mr. R.S Arora as Director and the Board recommends that the proposed resolution relating to re-appointment of Mr. R.S. Arora as Director of your Company be approved.

None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions vis-avis the Company, other than salaries, commission, sitting fees.

Declaration given by independent directors

All Independent Directors have given declarations that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Familiarisation programme for Independent Directors

The Companys familiarization programme for Independent Directors provides orientation and training at the time of joining to enable them to understand the operations, business and other details of the Company. The Independent Directors are regularly briefed on the developments that are taking place in the Company and its operations.

Number of meetings of the Board.

The Board meets at regular intervals to review the Companys businesses and discuss strategy and plans. A tentative annual calendar of the meetings is circulated to the Directors in advance to enable them to plan their schedule and to ensure effective participation.

During the year, six board meetings were convened and held. The maximum interval between the meetings did not exceed the period prescribed under the Companies Act, 2013 and Listing Agreement

Committees of the Board

During the year, in accordance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has constituted or reconstituted its Committees.

Currently, the Board has the following Committees:

Audit Committee

Nomination and Remuneration Committee Stakeholders Relationship Committee

Details of the Committees along with their constitution and other details are provided in the “Report on Corporate Governance”.

Directors Responsibility Statement:

Your Directors confirm that:

i) in the preparation of annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2015 and of the Profit of the Company for that year;

iii) 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;

iv) the annual accounts have been prepared on a going concern basis;

v) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors appointment and remuneration

The Nomination and Remuneration Committee has laid down the criteria for Directors appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a Director.

The following attributes / criteria for selection have been laid by the Board on the recommendation of the Committee.

a) Cultural fit and personal values

b) Vision and Strategic Management

c) Independence and impeccable reputation for integrity, deep expertise and insights and complementary skills

d) Change management and influencing change

The policy for appointment of Director, KMP is given in "Annexure E".

Annual evaluation of performance by the Board

As per criteria for performance evaluation, laid down by the Nomination and Remuneration Committee, the Board has assessed its own performance, the performance of each of the Directors and the performance of its committees.

The Independent Directors have assessed the performance of each of the non independent Director as provided in the Act and the Listing Agreement.

Remuneration Policy:

The Board has, on recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is set out in the "Annexure F" to this report.

Related Party Transaction:

All the related party transactions that were entered into during the financial year were on the arms length and were in ordinary course of business. All Related Party Transaction are placed before the Audit Committee as also the Board for the approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis which is for known and of repetitive nature. The transaction entered into pursuant to the omnibus approval so granted are audited and statement giving details of all the related party transactions is placed before the Audit Committee and Board of Directors for their approval on quarterly basis.

As per clause (h) of Sub-Section (3) of Section 134 of Companies Act, 2013 and Rule 8(2) of Companies (Accounts) Rule 2014, the details forming transaction of all the related party transaction in form AOC - 2 is annexed as “Annexure...B.”

The policy on Related Party Transactions, as approved by the Board, is uploaded on the website of the Company.

Corporate Social Responsibility

The provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility (CSR) are not applicable to the Company as the Company has posted losses and is still registered under BIFR.

Vigil Mechanism/ Whistle Blower Policy:

Your Company has adopted and disseminated its Whistle-Blower Policy to provide a secure environment and encourage employees to report unethical, unlawful or improper practices, acts or activities and to prohibit any adverse personnel action against those who report such practices in good faith.

The Whistle-Blower Policy is disclosed on the website of the Company under the heading Whistle Blower Policy to deal with the instance of fraud and mismanagement, if any.

Statutory Auditors:

M/s. Vinay Gudi & Associates, Chartered Accountants, (Registration No.129032W) Auditors of the Company have expressed their unwillingness to continue as auditors which will be effective from the close of the ensuing Annual General Meeting. M/s. Sunil Mistry & Company, Chartered Accountants (Registration No.123435W) have conveyed that, if appointed, they would be eligible to act as Auditors of the Company. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and Rules framed thereunder, for appointment as Statutory Auditors of the Company.

Your Directors on recommendation of the Audit Committee, seek approval of the Shareholders, for appointment of, M/s. M/s. Sunil Mistry & Company, (Registration No.123435W) Chartered Accountants, as the Statutory Auditors of the Company, from the conclusion of the forthcoming Annual General Meeting till the conclusion of the twenty-seventh Annual General Meeting of the Company, on such remuneration as shall be fixed by the Board of Directors, as set out in the resolution included in Notice convening the Annual General Meeting of the Company.

Secretarial Auditors-

In accordance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. V. N. Deadhar & Co. Company Secretaries, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is set out in the "Annexure C" to this report.

Comments on auditors report

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Vinay Gudi & Associates, Statutory Auditors, in their Auditors Report. M/s. V.N Deodhar & Co., Company Secretaries have qualified their Secretarial Audit Report for non-compliance in regards to appointment of Company Secretary. In this regard the Company would like to state that the Company is under the BIFR. It is searching for the right candidate and is hopeful of appointing a Company Secretary in the near future.

The Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

Extract of Annual Return

The details forming part of extract of Annual Return in form MGT - 9 is annexed herewith as “Annexure....D”

Management Discussion & Analysis Report and Report on Corporate Governance

a) As per Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, Corporate Governance Report and Management Discussion and Analysis Report are annexed and form part of the Directors report. (Annexure G & H respectively)

Acknowledgements:

Your Directors wish to place on record their sincere appreciation for the continuous support and co-operation received from customers, dealers, suppliers, financial institutions and others in successfully conducting the companys business operations. Your Directors also wish to place on record their deep sense of appreciation for the commitment and dedicated service of the companys employees. Your Directors also acknowledge with gratitude the encouragement and support extended by our valued shareholders.

On behalf of the Board of Directors,

R.S. ARORA

Chairman

Place: Mumbai

Date: 30th July, 2015

Annexure A to Directors’ Report

A Conservation of Energy:

Various steps and measures are continuously being taken to further reduce consumption of electricity.

The Company is using Bio Coal instead of LPG or electricity to run its boilers. These measures have resulted in saving in the consumption of power and fuel.

B. Research

There is no activity on research and development.

C. Technology absorption:

The Company has fully absorbed the technology obtained from Zhangjiagang Gangying Industry Co. Ltd., China. The Company is continuously taking steps to improve the product and process technology.

D. Foreign Exchange Earning and Outgo:

	(Rs. In Lacs)
a) Foreign Exchange earned	NIL
b) Foreign Exchange used-Travelling Expenses	6.07
c) Foreign Exchange used - Import of Plant & Machinery	6.25
d) Advance to suppliers	NIL
e) Foreign Exchange used-Import of Stores, Sparse & Machinery	NIL

Annexure B to Directors’ Report

Form No. AOC-2

[Pursuant to Clause (h) of Sub section (3) of section 134 of the Act and Rule 8(2) of the Companies

(Accounts) Rules, 2014]

Form for Disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act 2103 including certain arms length transaction under third proviso thereto:

1. Details of Contracts or arrangements or transactions not at arms length basis- Not applicable

2. Details of contract or arrangements or transactions at arms length basis and in the ordinary course of business of the Company for the year ended March 31, 2015 are as follows:

Name of Related Party	Nature of Relationship	Nature of Contract/ arrangement/ transaction	Duration of Contract	Salient terms of contract	Amount (Rs. in lakhs)
D.S.Arora	Father of Director	Office Rent	Ongoing basis	Payment of rent on monthly basis	4.80
Ritika Arora	Daughter of Director	Salary	Ongoing basis	Salary upto Rs.6.00 lacs	6.00
Amrita Arora	Daughter of Director	Salary	Ongoing basis	Salary upto Rs.3.00 lacs	3.00

DECLARATION BY THE WHOLETIME DIRECTOR UNDER CLAUSE 49 OF THE LISTING AGREEMENET REGARDING COMPLIANCE WITH CODE OF CONDUCT:

In accordance with Clause 49 I (D) of the Listing Agreement with the Bombay Stock Exchange Limited, I hereby confirm that all the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct for the year ended 31st March, 2015.

For Arora Fibres Limited

Wilma Lobo

Wholetime Director

ANNEXURE C

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st MARCH,2015

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

To,

The Members,

Arora Fibres Limited.

Survey No.213, Piparia Indl. Estate,

Silvassa, Dadra & Nagar Haveli,

Nagar Haveli.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Arora Fibres Limited (hereinafter called the company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of the Arora Fibres Limiteds books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March,2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board- processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by Arora Fibres Limited (“the Company”) for the financial year ended on 31st March, 2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,

1992;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

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

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreement entered into by the Company with Bombay Stock Exchange in respect of Issue and Listing of Securities;

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except that the Company has not appointed Company Secretary as required to be appointed as per Section 203 of the Companies Act,2013 and Clause 47 of the Listing Agreement with the BSE Limited.

We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members views (if any) are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

For V.N.DEODHAR & CO.,

V.N.DEODHAR

PROP.

FCS NO.1880

C.P No. 898

Place: Mumbai

Date: 30th July,2015

ANNEXURE A TO THE SECRETARIAL AUDIT REPORT

To,

The Members,

Arora Fibres Limited.

Survey No.213, Piparia Indl. Estate,

Silvassa, Dadra & Nagar Haveli,

Nagar Haveli.

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

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

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

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

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

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

6. The secretarial audit report is neither an assurance as to the future viability of the Company not of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For V.N.DEODHAR & CO.,

V.N.DEODHAR

PROP.

FCS NO.1880

C.P No. 898

Place: Mumbai

Date: 30th July,2015.

Annexure - E

Policy for appointment of Director, Key Managerial Personnel (KMP) and Senior Management:

Appointment Criteria, Qualification Evaluation and Removal:

The Director, KMP and Senior Management shall possess adequate qualification, experience and expertise with following attributes/skills

a) Cultural fit and Personal values

b) Vision and strategic management.

c) Change management and influencing change

An Independent director shall have impeccable reputation of integrity, deep expertise and insights and complementary skills and shall meet the requirements prescribed under Companies Act and the Listing agreement.

The Nomination and Remuneration Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel on yearly basis based on their effectiveness, and fulfillment of their responsibilities in the best interest of the Company and promoting highest standard of Corporate governance.

Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations thereunder, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations

Annexure - F

Remuneration Policy for Directors, Key Managerial Personnel and other employees

A NON-EXECUTIVE INDEPENDENT DIRECTOR (NEID)

NEIDs shall be paid a sitting fee of Rs.1000/- for every meeting of the Board or committee thereof attended by them as member.

The company has no stock options, plans and hence, such instruments do not form part of his remuneration package

B. MANAGING DIRECTOR & KEY MANAGERIAL PERSONNEL & OTHER EMPLOYEES

The remuneration policy is performance driven and directed to motivate towards excelling in performance, recognize contributions, retain talent and reward performance. It is aimed at attracting and retaining high calibre talent. The components of the remuneration vary for different grades and are governed by industry pattern, qualifications experience responsibilities handled, individual performance etc. The company has an incentive plan which is linked to performance and achievement of the Companys objectives. The remuneration system maintains a balance between fixed and variable pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

The company has no stock options plans and hence, such instruments do not form part of his remuneration package.

The above criteria and policy are subject to review by the Nomination & Remuneration committee & the Board of Directors of the Company.