Dear Members,

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

1. Financial Summary Rs. in Lakhs

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

2. Financial Highlights and State of Company’s Affair

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

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

3. Dividend

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

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

4. Approval of Scheme of Amalgamation

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

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

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

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

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

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

Allotment of equity shares pursuant to the scheme of amalgamation

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

5. Listing on Stock Exchanges

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

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

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

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

7. Details of Subsidiary / Joint Venture / Associate Companies

The company doesn’t have any subsidiary, joint venture or associate company. Group Company to the Arfin India Limited includes Krish Ferro Industries Private Limited. Mahendra Aluminium Company Limited, an erstwhile group company to the Arfin group has been amalgamated into the Arfin India Limited during the financial year under report.

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

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

9. Deposits

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

10. Statutory Auditors

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

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

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

11. Secretarial Auditors

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

12. Cost Auditors

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

13. Share Capital

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

14. Directors & Key Managerial Personnel

I. Appointments

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

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

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

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

II. Cessations

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

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

III. Retirement by Rotation

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

IV. Evaluation of the Board’s Performance

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

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

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

V. Remuneration Policy

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

15. Number of Meetings of Board of Directors

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

16. Audit Committee

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

17. Nomination and Remuneration Committee

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

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

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

18. Stakeholder Relationship Committee

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

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

19. Internal Complaints Committee (ICC)

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

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

20. Related Party Transactions

All the related party transactions are being entered on arm’s length basis, in ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and relevant regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

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

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

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

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

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

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

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

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

23. Managerial Remuneration

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

24. Management Discussion & Analysis Report

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

25. Corporate Governance Report

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

26. Code of Conduct

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

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

27. Risk Management Policy

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

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

28. Corporate Social Responsibility

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

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

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

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

29. Directors’ Responsibility Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

33. Extract of Annual Return

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

34. Form AOC-2

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

35. Particulars of Employees and Remuneration

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

36. Secretarial Audit Report

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

37. Auditors Certificate on Corporate Governance

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

38. Acknowledgments

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

For and on Behalf of the Board of Directors

Mahendra R. Shah

Place: Ahmedabad (Chairman)

Date: August 10, 2018 (DIN:00182746)