Mar 31, 2023
Your Directors are pleased to present the 92nd Annual Report along with the Audited Financial Statements of the Company for the financial year ended 31st March 2023.
Highlights of Financial Results for the year are as under:
(Rs. in Crores) |
|||||
Particulars |
Standalone |
Consolidated |
|||
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
||
Turnover & Operating Income |
7774.10 |
7499.41 |
8427.00 |
8059.61 |
|
Profit before Finance Costs, Depreciation and Amortisation Expenses, Extraordinary Items & Tax Expenses |
748.72 |
834.27 |
844.52 |
857.47 |
|
Less : Finance costs |
154.56 |
166.70 |
164.24 |
176.43 |
|
Profit before Depreciation and Amortisation Expenses, Extraordinary Items & Tax Expenses |
594.16 |
667.57 |
680.28 |
681.04 |
|
Less : Depreciation and Amortisation Expenses |
208.49 |
203.24 |
253.01 |
253.95 |
|
Profit before Share of Profit of a Joint Venture, Exceptional Items and Tax Expenses |
385.67 |
464.33 |
427.27 |
427.09 |
|
Less : Exceptional Items |
(28.51) |
241.37 |
(58.76) |
9.29 |
|
Add : Share of profit/(loss) of Joint Ventures |
NIL |
NIL |
1.22 |
1.11 |
|
Profit Before Tax from Continuing Operation |
414.18 |
222.96 |
487.25 |
418.91 |
|
Current Tax |
90.88 |
20.00 |
100.09 |
26.06 |
|
(Excess)/Short Provision of Earlier Years |
9.13 |
13.82 |
9.27 |
13.86 |
|
Deferred Tax |
(37.78) |
111.99 |
(38.81) |
111.06 |
|
Profit/(Loss) for the year from Continuing Operation (A) |
351.95 |
77.15 |
416.70 |
267.93 |
|
Profit/(Loss) Before Tax for the year from Discontinuing Operation |
(7.54) |
(28.15) |
(5.03) |
(36.65) |
|
Tax Expense of Discontinued Business |
1.50 |
10.30 |
1.50 |
10.30 |
|
Profit/(Loss) for the year from Discontinuing Operation (B) |
(6.04) |
(17.85) |
(3.53) |
(26.35) |
|
Profit for the Year (A B) |
345.91 |
59.30 |
413.17 |
241.58 |
|
As expected at the outset, FY2023 saw an uncertain business environment almost through all the four quarters, and it continues well into the new financial year.
For Arvind Limited, Q1 started off as the best ever first quarter since the demerger of Anup Engineering and Arvind Fashions. Commodity prices that had seemed to be on an ever-
increasing trajectory finally started to come down towards the quarter end. This trend of falling prices of input Raw Materials and freight costs continued through the year. On the demand front, expectation has been of a sharp reduction following the interest rate hikes being administered to fight inflation. In reality, the actual retail sales in key markets have turned out to be better than expected quarter after quarter. As we wrap-up FY23 and start FY24, the outlook is much less grim in the
US and reasonably upbeat in the domestic markets. Europe continues to look challenged, at least in the near term.
Textile businesses delivered a mixed bag of performance. Volumes in Woven segment stayed strong and steady throughout, Denim and Garment volumes saw a steady reduction through the quarters as our key customers deferred their buying and also reduced the lot/ drop sizes to manage their inventory more sharply. Price realization peaked in Q2 and then started trending down to reflect the softening raw material prices.
Advanced Materials businesses - Human Protection, Industrials and Composites, continued to deliver the promised growth through the quarters, and closed the full year numbers at an aggregate of 22% higher revenues. These businesses also saw a margin expansion in Q4 as the benefits of lower input costs started to be realized. During the year, capacity expansion programs got initiated as current ones became fully utilised. Expanded fabric processing set-up, new line for non-wovens, additional capacities in garment manufacturing and investments in composites mold/ dies started to get implemented in the second half of FY2023, and are expected to enable continued growth through FY24 and beyond.
During the year, the Company also sold off its subsidiary company viz. Arvind Internet Limited to Bigfoot Retail Solutions. Among other smaller businesses, Arvind-Envisol - our effluent treatment business - had an improved year as it executed a large project, and also expanded its components business.
Also during FY23, the Company continued making investments in expanding its renewable energy capacity, and a 24MW hybrid solar-wind installation is expected to get commissioned in Q1 of FY2024. This will help the Company strengthen its industry leading sustainability credentials, and also reduce the energy costs.
A more detailed analysis and commentary is available in the Management Discussion and Analysis section of this report.
The Board of Directors have recommended a dividend of Rs.3.75/- per equity share and one-time special dividend of Rs.2/- per equity share, totalling Rs.5.75/- per equity share of Rs. 10/- each (i.e. 57.5%), for the financial year ended on 31st March, 2023. Dividend is subject to approval of members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source. The dividend, if approved by the members, would involve a cash outflow of about Rs. 150 crores.
In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is available on the Company''s Website at
https://www.arvind.com/sites/default/files/field_policy_file/DividendDistributionPolicy.pdf
During the year under review, the Company has not transferred any amount to reserves.
5. DETAILS OF MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR TILL THE DATE OF THIS REPORT
No Material Changes have taken place from the end of the financial year till the date of this report.
The authorised share capital of the Company as on 31st March 2023 was Rs.674.50 crores divided into 57.45 crores equity shares of Rs.10 each and 1 crore preference shares of Rs.100 each.
During the year under review the Company has allotted 9,11,655 Equity Shares of Rs.10 each to the eligible employees pursuant to the exercise of stock options granted in terms of the Employees Stock Option Scheme 2008 (ESOS) of the Company. Consequently, the paid up Equity Share Capital of the Company stood at 261.50 crores consisting of 26,14,97,474 equity shares of Rs.10 each.
During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.
7. EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme (ESOS) to grant equity based incentives to certain eligible employees and directors of the Company and its subsidiary companies. There is no material change in ESOS during the year under review and the scheme is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The certificate of the Secretarial Auditor regarding implementation of scheme shall be made available for inspection of members in electronic mode at Annual General Meeting.
Disclosures in compliance with Section 62 of the Companies Act, 2013 and Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and the Securities and Exchange Board of India (Share based Employee Benefits) Regulations, 2021 are set out in "Annexure - A'''' to this report.
The Company has repaid the instalments of Term Loans amounting to Rs.287.26 crores during the current year. The Company has not made any fresh long term borrowings. Long Term Debt of the Company stands to Rs. 621.73 crores as on 31st March, 2023.
During the year under review, the Company has not accepted or renewed any Deposit within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.
10. NON-CONVERTIBLE DEBENTURES
As on 31st March 2023, 8.5% - 750 Rated, Listed, Secured, Redeemable, Non-Convertible Debentures (NCDs) of the face value of Rs.10,00,000/- each, for cash at par, aggregating Rs.75 crores were outstanding, issued on private placement basis and listed on the Wholesale Debt Market Segment of BSE Limited.
During the year under review, the Company has not issued/ allotted any Non-Convertible Debentures.
11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
12. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Arvind Limited, through its CSR policy aims to work for social, economic, educational, infrastructural, environmental, health, inner wellbeing and cultural advancement of the people and thereby positively impact their quality of life. Our CSR programs are in the realm of education, rural transformation, livelihood promotion, art and heritage, women empowerment and inner wellbeing. The projects and programs are in accordance to the thematic areas as defined in Schedule VII of the Companies Act, 2013. The development initiatives are being carried out by company promoted organizations - Strategic Help Alliance for Relief to Distressed Areas (SHARDA) Trust, Narottam Lalbhai Rural Development Fund (NLRDF) and Arvind Foundation (AF) and other partner Civil Society Organizations.
The organizations have formed synergistic partnerships to enhance the quality of deliverables and increase the reach of the programs.
The Company has defined five broader themes to bring larger focus in our CSR initiatives. However, the Company has supported initiatives under five broader themes to bring larger focus in our CSR initiatives. The broad thematic areas are Educational Advancement, Rural Advancement, Environmental Advancement, Health Advancement and Cultural Advancement. All our initiatives broadly fall under the given themes without limiting the purpose, scope and flexibility of CSR initiatives.
Initiative brief:
During 2022-23, the Company supported the ongoing programmes of Rural Initiative brief - Rural Advancement, Educational Advancement, Digital Literacy, Environmental Advancement, Inner Wellbeing and a Project for Setting up Indigo Art Museum.
The specific programs undertaken during the year and a brief is given in following paragraphs:
Rural Development
Under the broad theme of Rural Advancement, the Arvind Rural Transformation Initiative (ARTI) is a combination of long term integrated programs focused in defined geographies. In Gujarat, geographically, the different projects are being implemented at Kalol in Gandhinagar, Sanand & Dholka in Ahmedabad, Dhasa in Botad, Saurastra, Garudeshwar in Aspirational district of Narmada and planned initiatives at Kheda district. Altogether, Rural Development programmes are being implemented in 39 Villages. In addition, the Rural Development initiatives are also planned at Karnataka and Jharkhand.
The broad focus of the rural development initiatives are on Education, Earning, Environment and Inner Wellbeing. Initiatives of Health & Nutrition are also undertaken as per the need and demand from the community.
A digital literacy programme as part of our education program in rural areas is being offered in partnership with HP Foundation. 3 HP CLAP Vans with 120 Laptops each move in village schools and villages to impart computer literacy programme to students and women. About 5700 students have taken advantage of the programme. Our old partnership with HP had also has a HP WOW Bus that has a classroom. This has been stationed at villages near Statue of Unity, Narmada. Over 500 students have taken advantage of this. The combined strength of students have shown their willingness to join the Supplementary Education Programme Gyanda which we will start during 2023-24 for the rural students. Over 1200 of these students were also taken to a visit of science city
The Environment project has major plantation drive. Close to 30,000 plants were planted in broadly three mode - plantation at individual homes, plantation in schools & crematorium and plantation at block and taluka level at large plots. Over 4000 students participated in planting the trees in their school campuses under our school greening programme. Environment clubs are also set up in schools where we are active.
To support and increase earning of farmers in villages we operate, a Credit support program for Animal loan was launched last year with partnership with Shree Mahila SEWA Bank. Around 80 new loans for buffalo were given and dairy linkages strengthened. This has given immediate rise in family income.
Our interaction with the communities lead to the realisation that attending to health issues many a time get neglected or postponed as it doesn''t seem to be posing any immediate challenge. To attend to this, we have launched health camps in villages we operate. A total of 23 Community Eye Check-up Camps, Community Health Camps and School Dental Health Camps were organised in partnerships with Government Hospitals and Specialised Trust run Hospitals. These were attended by close to 3500 people. The eye camp received the highest attendance and over 2000 specs were distributed and 66 cataract surgeries were performed.
We had reported earlier that as part of our rural advancement programme, the Homestay Project near famous Statue of Unity in Kevadia in Aspirational district Narmada was undertaken. A total of 37 rooms were created and income to the families had started. We conducted a rapid assessment of the project that suggested certain changes and showed us the potential. We have identified 11 new homes and started the work in 4 more homes. The idea is to create a Homestay Cluster supported by Arvind Foundation.
Educational Advancement: Project Gyanda
In addition to the digital education programme, our Supplementary Education Programme Gyanda in the urban areas with municipal school students is slowly but surely back to its core after badly getting affected due to Covid. We have around 850 students now and have started a new centre which will add to the numbers. In addition, few more centres are planned to open in urban areas. There is a demand from our students of digital education programme in rural areas to be part of Supplementary education programme which we will start during 2023-24 in a blended online and offline mode.
To support this expansion, we are integrating technology. During the year, in addition to our partnership with HP Foundation, we had two technology partnerships with Open Link Foundation and Tag Hive Foundation.
Open Links Foundation (OLF) was started by an alumni of IIT Delhi and IIM Ahmedabad in 2017. OLF considers Teachers as the most important link to implement any change program and it provides IT enabled program, tools and community for teacher support and teacher recognition by reducing their burden and motivating them to deliver quality education.
The tool also has a Wikipedia kind of open source platform for teachers to find right teaching resources and instruction methods like lesson plans, activities, worksheets and videos etc. The material that SHARDA Trust has developed has been uploaded on this platform which can now be accessed from anywhere by our teachers. This will help us a great deal as we plan our rural journey.
Tag Hive Inc. is a Samsung funded education Technology Company started by an IIT & Harvard alumni. TagHive has a solution called Class Saathi, which is a clicker based smart classroom solution that makes formative assessments seamless and data-driven. Teachers can use the Class Saathi app to evaluate student''s proficiency in various concepts taught in class. After the session, the students are given multiple choice questions to assess their understanding of what was taught in the class. The students click their answers on a clicker device and their answers immediately give the teacher an idea about students'' understanding with data. The data is recorded and can be used for individual counselling. We see this adding lot of value to our students in future.
We have also started a pre-primary section this year in our new Gyanda centre. We are developing a curriculum after a baseline study. The program looks at providing a strong Foundational literacy and numeracy, crucial for a child to attain basic numeracy and literacy skills by the end of grade 3.
For Institutions and Individual having emergency medical need, the company has supported Sheth Kasturbhai Lalbhai Hospital with an Ambulance. It has also supported few patients financially in meeting their critical medical situation.
Inner Wellbeing Programme:
The Company is carrying out an Ongoing Inner Wellbeing Program in rural Gujarat and Rajasthan since last five years. This is result of our conviction that the physical and social developments are meaningful only if people are also well from within. Heartfulness Meditation programs are being conducted in a planned and structured manner. This program is based on the Sahaj Marg system of Raja Yoga meditation. We had reported that in 2021-22, due to COVID, this programme suffered badly and most of the sessions were conducted online. We have, however, started this again going into villages, schools and rural institutions. Altogether, 8 people team reached to about 80 villages where regular sessions are getting
conducted. About 162 schools and 50 rural institutions had awareness sessions conducted.
Promotion of Indology Project:
The Company has supported a programme of Promotion of Indology for Promotion of National Heritage, Art and Culture. The programme is being carried out through our partner organisation Lalbhai Dalpatbhai Bhartiya Sanskriti Vidya Mandir (LDBSVM). The programme is to support preservation of manuscript, digitisation of manuscripts, automating the Library that has rare books, purchase of books and upgrading the Manuscript Data Archival Software System for tracking the digitised and archived manuscripts. The project also involves upgradation of infrastructure. This is being done to expand the Institution''s engagement with the public. It is being done both through online and offline methods.
Indigo Art Museum Project: The Company has supported Arvind Indigo Foundation for setting up the Indigo Art Museum. The Purpose of setting up the Indigo Museum is to capture the story of indigo and associated materials to create and capture broader narratives around the story and future of the colour and how it can play a crucial role in design thinking, artistic collaborations and sustainability. This living museum seeks to become a laboratory of ideas and practices so that the heritage of indigo is not presented as an inaccessible past but as a living colour with a story of continuing innovations in variety of materials.
For the Indigo Art Museum project, the land has been identified, the design and the foundation work is under progress and the structural clearing up of the site is done to start further construction activities. In addition, the Arvind Indigo Foundation has also started acquiring the artefacts, artwork and collaboration with artists, sculptors and designers on further work.
A company grows when its people grow. At Arvind we believe that talent truly shapes organizational success and destiny. At Arvind, there is highest commitment to investing in hiring the right talent, sustainably engaging and developing them, retaining and rewarding them to deliver organizational results and growth.
An important focus area for the organization has been to respond to trends shaping the future of work, that make the company agile, productive and help improve HR systems, processes and enhance employee experience.
The Company has invested efforts in bringing effectiveness in hiring and creating an employer brand, creating internal mobility, reorganizing structures in line with business
plans and performance and establishing the right rewards and recognition.
To ensure that our employees continue to challenge themselves and grow, the company has brought a significant focus to internal mobility and to rotating employees across different functional roles in order to grow into higher roles.
On learning our focus shall continue to be towards digitalization of learning and introduction of various e-learning courses on managerial & functional competencies. Adoption of digital tools, incorporation of hybrid work culture, in our new way of working has ensured that our employees are equipped to work with these through the right skills.
While doing so, we have been cognizant of understanding what motivates and engages our people and how they perceive their work environment. Therefore, we encourage open and regular dialogue between managers and their team members and offer hand holding support which ensures our people feel comfortable to speak up, raise concerns and are empowered to initiate improvements.
Our approach to performance management is a holistic one wherein, while holding people accountable, we look at continuous development and create opportunities for them to excel in new and or larger roles. This approach is directly linked to our compensation framework and promotion process. We also offer a wide range of benefits to our employees.
To ensure we develop future leaders, we provide a number of opportunities to foster management and leadership skills. The purpose is to equip our people with the necessary capabilities to lead the organization through change, develop their teams, manage performance and ensure business success in line with the organizational strategy.
The Company has a robust Enterprise Risk Management framework which enables it to take certain risks to remain competitive and achieve higher growth and at the same time mitigate other risks to maintain sustainable results.
Under the framework, the Company has laid down a Risk Management Policy which defines the process for identification of risks, its assessment, mitigation measures, monitoring and reporting. While the Company, through its employees and Executive Management, continuously assess the identified Risks, the Risk Management Committee reviews the identified Risks and its mitigation measures annually.
The top 20 risks identified by the Company includes - 4 Strategic Risks, 14 Operational Risks & 2 Regulatory Risks. Key Strategic Risks include demand destruction/shift, geopolitical issues, supply chain disruption and reputational risks.
Key Operating Risks include customer concentration, vendor concentration, availability of competent human resource, major system outages, industrial safety and cyber security/ data protection. Regulatory Risks include changes in trade agreements, litigation and regulatory compliances.
16. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. The Statutory Auditors of the Company have audited such controls with reference to the Financial Reporting and their Audit Report is annexed as Annexure A to the Independent Auditors'' Report under the Standalone Financial Statements and the Consolidated Financial Statements which forms part of the Integrated Annual Report.
17. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company at
https://www.arvind.coim/sites/default/files/field_policv_file/Whistle%20Blower%20Policv_n.pdf
18. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
As on 31st March 2023, the Company has 22 subsidiary companies (Direct or Indirect) and 4 joint ventures and 1 associate company.
During the year under review, companies/entities which have become and ceased to be subsidiary, joint venture or associate of the Company are given in the note no. 35 to the Financial Statements.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC-1 is attached to the Financial Statements. The separate audited financial statements in respect of each of the subsidiary shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of each of the subsidiary are also available on the website of the Company at http://www.arvind.com/financial-reports
The Company has framed a policy for determining material subsidiaries, which has been uploaded on Company''s website at
httDs://www.arvind.com/sites/default/files/field_Dolicv_file/Policv%20on%20Material%20Subsidiaries.Ddf
19. CHANGE IN NATURE OF BUSINESS
During the year under review, there has been no Material change in the nature of business of the Company.
However, during the year, the Company amended the "Object Clause" of Memorandum of Association of the Company by inserting two new objects viz. (i) establishing separate division for sourcing and imparting customised training to manpower required for various entry level job roles in textile and other industry and (ii) designing, manufacturing and supply of products made from indigo dyes.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors consists of 9 (nine) members, of which 5 (five) are Independent Directors. The Board also comprises of one woman Independent Director.
As per the provisions of Section 152(6) of the Act, Mr. Punit Sanjay Lalbhai (DIN 05125502) shall retire by rotation at the ensuing Annual General Meeting and being eligible, offered himself for re-appointment as the Director of the Company.
Ms. Renuka Ramnath (DIN: 00147182) tendered her resignation as an Independent Director of the Company consequent to the other pre-occupation. The Board has taken her resignation on record at the Board Meeting held on 18th May, 2022 and placed on record its appreciation for the valuable services rendered by Ms. Renuka Ramnath during her tenure as an Independent Director of the Company.
As per the approval received by the shareholders through Postal Ballot, Mr. Punit Sanjay Lalbhai (DIN: 05125502) and Mr. Kulin Sanjay Lalbhai (DIN: 05206878) were re-appointed as Executive Directors of the Company for a further period of five years from 1st August 2022.
As approved by the Board of Directors of the Company at the Board Meeting held on 1st August, 2022 and approved by shareholders in Annual General Meeting held on 6th September, 2022, Ms. Ismet Tehmesp Khambatta (DIN: 00030325) was appointed as an Independent Director of the Company for a period of five years from 1st August, 2022. In the opinion of the Board, she possesses requisite expertise, integrity and experience (including proficiency) for appointment as an Independent Director of the Company.
The Board of Directors of the Company at their meeting held on 25th January, 2023 accepted resignation of Mr. Swayam Saurabh as Chief Financial Officer as part of internal reorganisation and appointed Mr. Jayesh Kantilal Shah, Whole Time Director as Chief Financial Officer (CFO) of the Company with effect from 26th January 2023.
As per the provisions of Section 203 of the Companies Act, 2013, Mr. Sanjay Lalbhai - Chairman and Managing Director, Mr. Punit Lalbhai - Vice Chairman & Executive Director, Mr. Kulin Lalbhai - Executive Director, Mr. Jayesh Shah -Whole Time Director and Group Chief Financial Officer, and Mr. R.V. Bhimani - Company Secretary; are the Key Managerial Personnel of the Company.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance as well as that of its Committees and Individual Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
22. APPOINTMENT AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-Executive Directors, Key Managerial Personnel and Senior Management. The policy also provides the criteria for determining qualifications, positive attributes and Independence of Director and criteria for appointment and removal of Directors, Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee / Board of Directors. The policy is available on the website of the Company at
httDs://www.arvind.com/sites/default/files/field_Dolicy_file/Nomination%20and%20Remuneration%20Policv.Ddf.
23. FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report and also available on the Company''s website at
httDs://www.arvind.com/sites/default/files/field_Dolicy_file/Familiarization%20Programs%20of%20IDs.Ddf
24. DECLARATION OF INDEPENDENCE
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they have complied with the Code for Independent Directors as prescribed in Schedule IV to the Act.
25. BOARD AND COMMITTEE MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year under review, 5 meetings of the Board were held. The details of the Board and Committee meetings are provided in the Corporate Governance Report forming part of this Report.
With an objective of strengthen the governance standards and to comply with the applicable statutory provisions, the Board has constituted various committees details of such Committees constituted by the Board are given in the Corporate Governance Report, which forms part of this Annual Report.
27. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
a. in DreDaration of the annual accounts for the financial year ended 31st March, 2023 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. they 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 ComDany at the end of the financial year and of the Drofit and loss of the ComDany for that period;
c. they have taken proper and sufficient care towards 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;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls, which are adequate and are operating effectively;
f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
28. RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm''s length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Parties are provided in the Company''s financial statements in accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Policy on Related Party Transactions as approved by the Board is available on Company''s website at
29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
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.
⢠Statutory Auditors
M/s Deloitte Haskins & Sells LLP, Chartered Accountants, (ICAI Firm Registration No. 117366W/W-100018) were re-appointed as the Statutory Auditors of the Company at the Annual General Meeting of the Company held on 6th September, 2022 for a term of five consecutive years. The Report given by the Auditors on the financial statements
of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
⢠Cost Auditors
Kiran J. Mehta & Co., Cost Accountants, Ahmedabad (Firm Registration No. 000025) carried out the cost audit for applicable businesses during the year. The Board of Directors has appointed them as Cost Auditors for the financial year 2022-23. The remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to Kiran J. Mehta & Co., Cost Auditors is included at item No.4 of the notice convening the Annual General Meeting.
In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained cost accounts and records.
⢠Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Hitesh Buch & Associates, a firm of Company Secretaries in practice, to conduct the Secretarial Audit of the Company for the financial year 2022-23.
The Secretarial Audit Report for the financial year ended 31st March 2023, pursuant to Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as "Annexure -C". The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks.
31. ENHANCING SHAREHOLDERS'' VALUE
The Company believes that its Members are its most important stakeholders. Accordingly, the Company''s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. The Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively
impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.
32. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management Discussion & Analysis, which form part of this Report, together with the Certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
33. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
The Business Responsibility & Sustainability Report for the year ended 31st March 2023 as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed which forms part of this Annual Report.
34. SECRETARIAL STANDARDS
During the year under review, the Company has complied with the provisions of Secretarial Standard -1 and Secretarial Standard - 2 issued by the Institute of Company Secretaries of India.
35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings 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 - D".
36. THE ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Company''s website at
37. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the
Company, will be provided upon request. In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in "Annexure - E'''' to this report.
38. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
Arvind Internal Complaints Committee (AICC) is formed and its details are declared across the organizations. All AICC members are trained by subject experts on handling the investigations and proceedings as defined in the policy
During the financial year 2022-23, there were 3 complaints that were filed during the year and each of these cases have been investigated, necessary actions have been taken and closed.
39. GENERAL
The Board of Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions or applicability pertaining to these matters during the year under review:
i) Fraud reported by the Auditors to the Audit Committee or the Board of Directors of the Company.
ii) Payment of remuneration or commission from any of its subsidiary companies to the Managing Director/ Whole Time Director of the Company.
iii) Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant
to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013).
iv) Details of any application filed for corporate insolvency under Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016.
vi) One time settlement of loan obtained from the banks or financial institutions.
The Board expresses its sincere thanks to all the employees, customers, suppliers, investors, lenders, regulatory and government authorities and stock exchanges for their cooperation and support and look forward to their continued support in future.
By order of the Board
Place: Ahmedabad Sanjay Lalbhai
Date: 18th May , 2023 Chairman and Managing Director
Mar 31, 2018
To the Members,
The Directors are pleased to present the Annual Report along with the Audited Financial Statements for the period from 1st April, 2017 to 31st March, 2018.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs.in crores
Standalone |
Consolidated |
|||
2017-2018 |
2016-2017 |
2017-2018 |
2016-2017 |
|
Turnover & Operating Income |
6423.34 |
5980.98 |
10826.13 |
925769 |
Profit before Finance Costs, Depreciation and Amortisation Expenses, Extraordinary Items & Tax Expenses |
700.86 |
818.78 |
1027.58 |
1021.38 |
Less : Finance costs |
177.68 |
221.87 |
25785 |
288.41 |
Profit before Depreciation and Amortisation Expenses, Extraordinary Items & Tax Expenses |
523.18 |
596.91 |
769.73 |
732.97 |
Less : Depreciation and Amortisation Expenses |
208.85 |
182.10 |
35934 |
297.08 |
Profit before Extraordinary Items and Tax Expenses |
314.33 |
414.81 |
410.39 |
435.89 |
Less : Exceptional Items |
22.72 |
280.17 |
22.72 |
18.06 |
Profit Before Tax |
291.61 |
134.64 |
38767 |
41783 |
Current Tax |
60.93 |
4954 |
123.27 |
70.08 |
(Excess)/Short Provision of Earlier Years |
1.26 |
0.62 |
1.80 |
0.62 |
Deferred Tax |
(20.62) |
6592 |
(50.50) |
28.19 |
Share of profit/(loss) of Joint Ventures |
NIL |
NIL |
2.71 |
1.91 |
Profit After Tax |
250.04 |
18.56 |
315.81 |
320.85 |
2. COMPANYâS PERFORMANCE
Year 2017 saw a marked improvement in growth in the global economies on the back of strong growth in global trade. Global trade recovered strongly after an extremely weak 2016 and grew at 4.9% in 2017. Recovery was broad based with both developed and emerging economies registering an improvement in growth rate. Developed economies including US and Western Europe countries saw an increase in investment spending that led to higher growth. On the other hand, emerging economy registered a pick-up in consumer spending which drove their economic growth.
Indian economy registered a strong growth despite the aftereffects of demonetisation and disruptions caused by GST implementation. Inflation remained benign for most part of the year partially aided by low crude prices. With crude prices rising up now, we can expect to see a little higher inflation going forward.
In this backdrop, your Company delivered a growth of 16.9% in revenue while Operating Earnings before Interest, Depreciation and Taxes (EBITDA) was up 2.7% during FY2017-18. Our brands and retail business registered a strong growth of 31% in revenue driving the overall company growth. Profit before taxes for the year was Rs.413 crores, a decline of 5.6% over the previous year.
A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report.
3. DIVIDEND
Your Directors have recommended a dividend of 24% i.e. Rs.2.40 per equity share of Rs.10 each for the year ended on 31st March, 2018. The dividend, if approved by the members, would involve a cash outflow of Rs.75 crores (inclusive of tax on dividend).
In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Dividend Distribution Policy and the same is available on the Companyâs Website at: http://www.arvind.com/sites/default/files/field_policy_file/DividendDistributionPolicv.pdf
4. TRANSFER TO RESERVES
During the year under review, the Company has transferred Rs.50 crores to Debenture Redemption Reserve.
5. SCHEME OF ARRANGEMENT
The Scheme of Arrangement in the nature of amalgamation of Arvind Brands and Retail Limited (âABRLâ), Arvind Garments Park Private Limited (âAGPPLâ) and Dholka Textile Park Private Limited (âDTPPLâ) with Arvind Limited (âALâ) under sections 230-232 and other applicable provisions of the Companies Act, 2013 has been sanctioned by the National Company Law Tribunal, Bench at Ahmedabad (âNCLTâ) vide its order dated 24th August, 2017.
The Scheme has become effective on 9th November, 2017 on filing with the Registrar of Companies, Gujarat with effect from 1st April, 2016 i.e. Appointed Date.
During the year under review, your Directors had approved the Composite Scheme of Arrangement amongst Arvind Limited (âArvindâ) and Arvind Fashions Limited (âArvind Fashionsâ) and Anveshan Heavy Engineering Limited (âAnveshanâ) and The Anup Engineering Limited (âAnupâ) and their respective shareholders and creditors under Sections 230 - 232 read with Section 66 and other applicable provisions of the Companies Act, 2013 involving :
- demerger, transfer and vesting of Branded Apparel Undertaking from Arvind to Arvind Fashions and Engineering Undertaking from Arvind to Anveshan on a going concern basis and consequent issue of shares by Arvind Fashions and Anveshan;
- amalgamation of Anup with Anveshan ;
- reduction of share capital of Arvind Fashions and Anveshan. The Appointed Date for transfer of Branded Apparel Undertaking from Arvind to Arvind Fashions is the effective date and the Appointed Date for transfer of Engineering Undertaking from Arvind to Anveshan and for amalgamation of Anup with Anveshan is 1st January, 2018. The Scheme is subject to requisite approvals, including sanction by NCLT.
6. SHARE CAPITAL
During the year under review, the authorized equity share capital of the Company has been increased from Rs.565 crores to Rs.674.50 crores on account of amalgamation of Arvind Brands and Retail Limited, Arvind Garments Park Private Limited and Dholka Textile Park Private Limited with Arvind Limited. Consequently, the authorized share capital of the Company as on 31st March, 2018 was Rs.774.50 crores divided into 67.45 crores equity shares of Rs.10 each and 1 crore preference shares of Rs.100 each.
During the year under review, your Company allotted 2,58,000 Equity Shares ofRs.10 each to the eligible employees pursuant to the exercise of stock options granted in terms of the Employees Stock Option Scheme 2008 (ESOS) of the Company. Consequently, the paid up Equity Share Capital of the Company stood at Rs.258.62 crores consisting of 25,86,17,069 equity shares of Rs.10/- each.
During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.
7. EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employee Stock Option Scheme (ESOS) to grant equity based incentives to certain eligible employees and directors of the Company and its subsidiary companies. During the year under review, the Company has not granted any stock options. Details of the shares issued under Employee Stock Option Scheme (ESOS) and also the disclosures in compliance with Section 62 of the Companies Act, 2013 and Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and the Securities and Exchange Board of India (Share based Employee Benefits) Regulations, 2014 are set out in ââAnnexure -Aâ to this report.
8. DISCLOSURE UNDER SECTION 67 (3) (C) OF THE COMPANIES ACT, 2013
No disclosure is required under section 67 (3) (c) of the Companies Act, 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.
9. FINANCE
The Company has repaid the installments of Term Loans amounting to Rs.336 crores during the current year. The Company has also made fresh long term borrowings of Rs.525 crores (? 220 crores from subsidiaries) for funding capital expenditure and other requirements. Long Term Debt of the Company stands to Rs.901 crores (? 40 crores loan from subsidiaries) as on 31st March, 2018.
10. FIXED DEPOSITS
During the year under review, your Company has not accepted or renewed any Deposit within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.
11. NON-CONVERTIBLE DEBENTURES
During the year under review, your Company has issued and allotted the following Non-convertible Debentures:
- 8% - 1,000 Unsecured Listed Rated Redeemable NonConvertible Debentures of the face value of Rs.10,00,000 each, for cash at par, aggregating Rs.100 crores on private placement basis listed on the Wholesale Debt Market Segment of the BSE Limited;
- 7.79% - 1,000 Unsecured Listed Rated Redeemable NonConvertible Debentures of the face value of Rs.10,00,000 each, for cash at par, aggregating Rs.100 crores in series -01 and 02 of Rs.50 crores each, on private placement basis listed on the Wholesale Debt Market Segment of the BSE Limited.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
13. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.
14. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Arvind Ltd. believes that inclusive development of society is an integral part of doing business. To us, CSR is a synergistic and strategic investment to empower and grow our business along with our neighbouring community. Our development programs endeavour to create sustainable solutions to serve and empower the underserved community in the regions where we operate. Arvind Foundation (a section 8 company) was set up as an umbrella organization to strengthen and expand the development programs undertaken by our Trusts for many years.
Strategic Help Alliance for Relief to Distressed Areas (SHARDA) Trust works on the programs of urban renewal since 1997. Narottam Lalbhai Rural Development Fund (NLRDF) has been working with the rural populace transforming their lives through its interventions.
We believe in synergistic partnerships and have partnered with likeminded individuals and organisations including but not restricted to government bodies, corporates, academic institutions, research & development, training bodies and NGOs which add value to our programs and bring specific expertise.
Our development initiatives:
Educational Support Program called Gyanda is a unique supplementary education model designed for primary, secondary and higher secondary school going children studying in Municipal Schools. It prevents these children from dropping out and helps them complete their basic education from standard V to XII. At present there are around 1000 students in our system. This program is being managed by SHARDA Trust.
Rural development initiatives undertaken by NLRDF in 3 districts of Gujarat are reaching out to around 35,000 people. NLRDF provides transformative solutions and links Government programs with the rural poor thereby improving the delivery mechanism.
Arvind Medical Centres (a Primary Health Centre) provides credible, affordable and quality primary healthcare to the people and specifically benefitting the economically disadvantaged section of the society. Four Arvind centres are operational at present providing medical services under one roof.
Arvind Rural Transformation Initiative (ARTI) is a new program to work on the all-round development of 15 villages in Santej region. Enabling Sanitation Ecosystem (Project Asmita) is an endeavor to contribute towards making India open defecation free. Towards this end, we have created Asmita toilet design that is cost effective and easy to install. We are promoting the installation and use of these toilets in rural areas through like-minded partners. Promoting Inner Well Being through meditation programs among masses. People are exposed to the techniques and benefits of relaxation and meditation and are encouraged to make it a part of their daily routine.
Skill development program for tribal girls (CSR in spirit) encompasses training of tribal girls in Apparel Manufacturing and employing the girls to work in our manufacturing unit, thereby providing them employment, opportunity to upgrade their qualification and skills and seek better white collar jobs ahead.
The Annual Report on CSR Activities in prescribed format is enclosed as âAnnexure-Bâ
15. HUMAN RESOURCES
The Company believes that Human Resources play a significant role in achieving its business vision. Hence, the Company continues to invest on hiring the best talent from other industries, developing and retaining the available talent to ensure a sustainable talent supply within the organization. The Company provides various opportunities to the employees to develop and hone their skills to take up higher responsibilities in the organization.
A well - defined competency framework outlines the leadership behaviours expected from employees to be successful in Arvind. The Company also uses various communication channels to seek employeesâ feedback about the overall working environment and the necessary tools and resources they need to perform at their best potential.
Diverse employee engagement initiatives are launched to ensure employees of various age and background continue to be effective in their roles and build meaningful career at Arvind.
The Groupâs Corporate Human Resources plays a critical role in companyâs talent management process.
16. RISK MANAGEMENT
The Company has a robust Enterprise Risk Management framework which enables it to take certain risks to remain competitive and achieve higher growth and at the same time mitigate other risks to maintain sustainable results.
Under the framework, the Company has laid down a Risk Management Policy which defines the process for identification of risks, its assessment, mitigation measures, monitoring and reporting. While the Company, through its employees and Executive Management, continuously assess the identified Risks, the Audit Committee reviews the identified Risks and its mitigation measures annually.
The Company has identified 21 Risks - 5 Strategic Risks, 12 Operational Risks & 4 Regulatory Risks. Key Strategic Risks include geographical concentration of its manufacturing capacity, reputational risk, digital readiness to enable growth at Brands, changing customer preference from cotton to blends & business continuity planning. Key Operating Risks include fluctuation in cotton prices, labour unrest, diminishing product life cycle of voiles business, increased global and local competition, customersâ credit risk, fire & safety related accidents, non-renewal of licence, customersâ concentration & fluctuation on foreign exchange rates. Regulatory Risks include changes in taxation regime, bilateral/multilateral trade agreements, government policies with respect to textiles, regulatory compliances & data privacy.
17. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has an Internal Audit Department with adequate experience and expertise in internal controls, operating system and procedures. In discharging their role and responsibilities, the department is supported by an external audit firm.
The Internal Audit Department reviews the adequacy of internal control system in the Company, its compliance with operating systems and laid down policies and procedures. Based on the report of internal audit function, process owners undertake corrective actions 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.
18. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company at http://www.arvind.com/sites/default/files/field policy file/Whistleblower%2Qpolicy.pdf
19. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
As on 31st March, 2018, the Company has 27 subsidiaries (Direct or Indirect) and 2 joint venture companies.
During the year under review, the following Companies incorporated/acquired as or become subsidiaries/joint ventures of the Company (Direct or Indirect):
1. Arvind Transformational Solutions Private Limited (Subsidiary)
2. Arya Omnitalk Wireless Solutions Private Limited (Subsidiary)
3. Arvind Smart Textiles Limited (Subsidiary)
4. Arvind Enterprise (FZE), Sharjah, UAE (Subsidiary)
5. Arvind Envisol PLC , Ethiopia (Subsidiary)
6. Brillaire Inc. Canada (Subsidiary)
7. Calvin Klein Arvind Fashion Private Limited (Subsidiary)
8. Tommy Hilfiger Arvind Fashion Private Limited (Subsidiary) During the year under review, the following subsidiaries ceased to be the subsidiaries of the Company:
1. Arvind Brands and Retail Limited (merged with Arvind Limited)
2. Dholka Textile Park Pvt. Limited (merged with Arvind Limited)
3. Arvind Garments Park Pvt. Limited (merged with Arvind Limited)
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC-1 is attached to the Financial Statements. The separate audited financial statements in respect of each of the subsidiary shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of each of the subsidiary are also available on the website of the Company at www.arvind.com
The Company has framed a policy for determining material subsidiaries, which has been uploaded on companyâs website at http://www.arvind.com/sites/default/files/field_policy_file/PolicyonMaterialSubsidiaries.pdf
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors consists of 10 members, of which six are Independent Directors. The Board also comprises of one women Director.
As approved by the shareholders at the Annual General Meeting (AGM) held on 4th August, 2017, Mr. Punit Lalbhai (DIN: 05125502) and Mr. Kulin Lalbhai (DIN: 05206878) were appointed as Executive Directors of the Company for a further period of five years from 1st August, 2017.
As per the provisions of Section 152 (6) of the Act, Mr. Sanjay Lalbhai (holding DIN 00008329) shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment as the Director of the Company.
As per the provisions of Section 203 of the Companies Act, 2013, Mr. Sanjay Lalbhai- Chairman and Managing Director, Mr. Jayesh Shah-Whole time Director and Chief Financial Officer and Mr. R.V. Bhimani-Company Secretary are the key managerial personnel of the Company.
21. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
22. REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The Remuneration Policy is explained in the Corporate Governance Report forming part of this Report.
23. FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization program for the Independent Directors to familiarize them with their role, rights and responsibilities as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization program are explained in the Corporate Governance Report are also available on the Companyâs website at http://www.arvind.com/sites/default/files/field_policy_file/FamiliarisationProgramsofIDs.pdf
24. DECLARATION OF INDEPENDENCE
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
25. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year under review, 5 meetings of the Board were held. The details of the meetings are provided in the Corporate Governance Report forming part of this Report.
26. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
a. in preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. they 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 the end of the financial year and of the profit and loss of the Company for that period;
c. they have taken proper and sufficient care towards 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;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls, which are adequate and are operating effectively;
f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
27. RELATED PARTY TRANSACTIONS
All the related party transactions are entered on armâs length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. There are 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 or which warrants the approval ofthe shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Companyâs financial statements in accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Policy on Related Party Transactions as approved by the Board is available on Companyâs website at http://www.arvind.com/sites/default/files/field_policv_file/RelatedPartvTransactionsPolicv.pdf
28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
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.
29. AUDITORS
A. Statutory Auditors
Deloitte Haskins & Sells LLP, Chartered Accountants, (ICAI Firm Registration No. 117366W/W-100018) were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 4th August, 2017 for a term of five consecutive years.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
B. Cost Auditors
Kiran J. Mehta & Co., Cost Accountants, Ahmedabad (Firm Registration No. 000025) carried out the cost audit for applicable business during the year. The Board of Directors has appointed them as Cost Auditors for the financial year 2018-19.
The remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Membersâ ratification for the remuneration payable to Kiran J. Mehta & Co., Cost Auditors is included at item No.4 of the notice convening the Annual General Meeting.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 ofthe Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Hitesh Buch & Associates, a firm of Company Secretaries in practice, to conduct the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report is annexed herewith as âAnnexure-Câ The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
30. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders. Accordingly, your Companyâs operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socioeconomic and environmental dimensions and contribute to sustainable growth and development.
31. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management Discussion & Analysis, which form part of this Report, are set out as seperate Annexures together with the Certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
32. BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report for the year ended 31st March, 2018 as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015 is annexed which forms part of this Annual Report.
33. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings 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 âAnnexure- Dâ
34. EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as âAnnexure -Eâ
35. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in ââAnnexure-Fââ to this report.
36. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
Arvind Internal Complaints Committee (AICC) is formed and its details are declared across the organizations. All AICC members are trained by subject experts on handling the investigations and proceedings as defined in the policy.
During the financial year 2017-18, the Company has received 1 (one) complaint on sexual harassment. AICC conducted the proceedings as defined in the Policy. The case was dealt with, as per the policy guidelines and ICC recommendations were given, in a fair and just manner.
37. ACKNOWLEDGEMENTS
The Board expresses its sincere thanks to all the employees, customers, suppliers, investors, lenders, regulatory and government authorities and stock exchanges for their cooperation and support and look forward to their continued support in future.
By order of the Board
Date: May 9, 2018 Sanjay Lalbhai
Place: Ahmedabad Chairman and Managing Director
Mar 31, 2017
To the Members,
The Directors are pleased to present the Annual Report along with the Audited Financial Statements for the period from 1st April, 2016 to 31st March, 2017.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs. in crores
|
Standalone |
Consolidated |
||
2016-2017 |
2015-2016 |
2016-2017 |
2015-2016 |
|
Turnover & Operating Income |
5955 68 |
5364.82 |
9235 54 |
8010.57 |
Profit before Finance Costs, Depreciation and Amortisation Expenses, Extraordinary Items & Tax Expenses |
819.77 |
891.41 |
1021.38 |
1033.13 |
Less : Finance costs |
234.28 |
292.16 |
288.41 |
358.63 |
Profit before Depreciation and Amortisation Expenses, Extraordinary Items & Tax Expenses |
58549 |
599.25 |
732.97 |
674.50 |
Less : Depreciation and Amortisation Expenses |
18479 |
149.16 |
297.08 |
240.48 |
Profit before Extraordinary Items and Tax Expenses |
400.70 |
450.09 |
435.89 |
434.02 |
Less : Exceptional Items |
18.06 |
-1.37 |
18.06 |
-1.37 |
Profit Before Tax |
382.64 |
451.46 |
41783 |
435.39 |
Current Tax |
105.16 |
95.99 |
13497 |
105.93 |
Deferred Tax |
6.6 |
34.83 |
(35 29) |
18.69 |
Share of profit/(loss) of Joint Ventures |
NIL |
NIL |
1.91 |
5.37 |
Profit After Tax |
270.88 |
320.64 |
320.06 |
316.14 |
2. OPERATIONS
FY2016-17 was a mixed year for global economies with improving economic condition but new challenges emerging. Global trade growth in 2016 recorded its weakest performance since the global financial crisis. US saw a marked slowdown in economic growth in 2016 over the previous year. However, in spite of relatively weak underlying growth, unemployment in the economy continues to decline leading to high consumer confidence. Euro zone was shaken by UKâs referendum on exiting the European Union which led to sharp depreciation both in Euro and GBP. However, the Euro zone showed a lot of resilience post the Brexit and confidence in the regions remained high. Consumer demand was steady for most of the year thanks to continuously falling unemployment rate. China continues to face pressure on capital outflows and saw its currency depreciating in FY17 which provided some support to their exports.
Indian economy continued to grow at a strong pace albeit slower than previous year. Government Agencies expect the economy to grow at 7.1% in 2016-17, slowing from 7.6% in the previous financial year. A few key acts including long awaited GST Act was finally approved paving the way for its implementation in the current financial year. Consumer spending got a huge shock when Government demonetised two highest denominated currency bills. However, as the year progressed, demand recovered and achieved normalcy by 4th quarter. Thanks to the sustained lower crude prices and good monsoon, inflation also remained in check.
In this economic scenario, your company delivered a growth of 15.3% in revenue while Operating Earnings before Interest, Depreciation and Taxes (EBITDA) was down 1% during FY2016-17. Strong growth of 26% in our brands and retail business drove the growth in overall revenue. Profit before taxes for the year was Rs.436 crores, a growth of 0.4% over the previous year.
A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report.
3. DIVIDEND
Your Directors have recommended a dividend of 24% i.e. Rs.2.40 per equity share of Rs.10 each for the year ended on 31st March, 2017. The dividend, if approved by the members, would involve a cash outflow of Rs.74.67 crores (inclusive of tax on dividend).
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. The Board has approved and adopted the Dividend Distribution Policy and the same is available on the Companyâs Website at: http://www.arvind.com/pdf/shareholding/2016/Policies/DividendDistributionPolicy.pdf
4. TRANSFER TO RESERVES
During the year under review, the Company has not transferred any amount to reserves.
5. SHARE CAPITAL
During the year 2016-17, your Company has allotted 1,16,000 Equity Shares of Rs.10 each to the eligible employees pursuant to the exercise of stock options granted in terms of the Employees Stock Option Scheme 2008 (ESOS) of the Company.
Consequently, the paid up Equity Share Capital of the Company stood at Rs.258.36 crores.
During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.
6. EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme (ESOS) to grant equity based incentives to certain eligible employees and directors of the Company and its subsidiary companies. During the year under review, the Nomination and Remuneration Committee has granted 9 lakhs stock options to the wholetime Director and Chief Financial Officer of the Company at an exercise price of Rs.316.50 per option, representing one equity share for each option upon exercise. Details of the shares issued under Employee Stock Option Scheme (ESOS) and also the disclosures in compliance with Section 62 of the Companies Act, 2013 and Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and the Securities and Exchange Board of India (Share based Employee Benefits) Regulations, 2014 are set out in âAnnexure -Aââ to this report.
7. DISCLOSURE UNDER SECTION 67 (3) (C) OF THE COMPANIES ACT, 2013
No disclosure is required under section 67 (3) (c) of the Companies Act, 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.
8. FINANCE
The Company has repaid the installments of Term Loans amounting to Rs.995 crores during the current year. The Company has also made fresh borrowings of Rs.583 crores C 530 crores from subsidiaries) for funding capital expenditure and other requirements. Long Term Debt of the Company stands to Rs.1189 crores C 530 crores loan from subsidiaries) as on 31st March, 2017.
9. FIXED DEPOSITS
During the year under review, your Company has not accepted or renewed any Deposit within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement of furnishing details of deposits which are not in compliance with Chapter V of the Act, is not applicable.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
11. INDIAN ACCOUNTING STANDARDS (Ind AS)
As mandated by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (âInd ASâ) from 1st April, 2016 with a transition date of 1st April, 2015. The Financial Results for the year 2016-17 have been prepared in accordance with Ind AS, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and the other recognized accounting practices and policies to the extent applicable. The Financial Results for all the periods of 2016-17 presented have been prepared in accordance with Ind AS.
12. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Arvind Ltd. believes in inclusive development of the community where we operate and the society at large. Our development programs endeavour to create a positive impact on the community by empowering people with knowledge and skills and providing institutional support for growth and development. We have created a synergistic alignment between our social and economic goals while working with the underserved community.
Our initiatives in the realm of social development are undertaken by Strategic Help Alliance for Relief to Distressed Areas (SHARDA) Trust and Narottam Lalbhai Rural Development Fund (NLRDF).Both these organizations have been working on programs of social renewal with urban and rural poor respectively. In addition to this, we set up The Arvind Foundation in the year 2015-16 as a Section 8 company to act as an umbrella organization to strengthen and expand the present initiatives.
We also partner with likeminded individuals, organisations, Government, Corporate, Academic Institutions, Research, Development and Training bodies and NGOs which bring specific expertise.
Initiatives undertaken by SHARDA Trust:
Gyanda is a unique supplementary education model designed for primary, secondary and higher secondary school going children studying in Municipal Schools. It prevents these children from dropping out and helps them complete their basic education from standard V to XII, while focusing on improving their academic performance and overall personality development, leading them to become last generation in poverty. The Gyanda approach works on a multipronged strategy - providing academic support in form of tutoring and mentoring, financial support in the form of sponsorships for continuing education, mentoring support for overall personality development and parent support in each and every stage of their education to have a dream about their children.
At present there are around 1200 students in our system and we plan to expand the program rapidly.
Primary Health Centres - Powered By Arvind: Considering the lack of facilities for credible, affordable and quality primary healthcare in Ahmedabad, Arvind Limited established Arvind Medical Centres in Association with Swasth India Foundation. These Primary Health Centres provide quality healthcare to people that include -Doctor (consultation), Diagnosis (Pathological Tests), Drug (Strip Packed Quality Medicines), Dental Care and Day Time Care when required. 3 centres have been set up during the financial year - 2 in Ahmedabad and 1 in Khatraj (Taluka -Kalol, District- Gandhinagar). All the 3 centres are operational and are providing quality care to people.
Rural Development Initiatives undertaken by NLRDF:
NLRDF focuses its efforts to make the rural community self-reliant, prosperous and growth oriented. We are currently working in 3 districts of Gujarat reaching out to a population of around 35,000 people. NLRDF believes in creating synergies and hence we actively work towards linking government programmes with the rural poor to increase the efficiency and effectiveness of the delivery process.
Through NLRDF, the company has undertaken initiatives of women and child development (focusing on improving maternal and infant nutrition), HIV / AIDS awareness, promoting organic farming, skill development program for women and youth, community health, better sanitation practices, micro enterprise development and many more.
The Annual Report on CSR ACTIVITIES in prescribed format is enclosed with this in âAnnexure-Bââ.
14. HUMAN RESOURCES
The Company believes that Human Resources play a significant role in achieving its business vision. Hence, the Company continues to invest on hiring the best talent from other industries, developing and retaining the available talent to ensure a sustainable talent supply within the organization. The Company provides various opportunities to the employees to develop and hone their skills to take up higher responsibilities in the organization.
A well - defined competency framework outlines the leadership behaviours expected from employees to be successful in Arvind. The Company also uses various communication channels to seek employeesâ feedback about the overall working environment and the necessary tools and resources they need to perform at their best potential.
Diverse employee engagement initiatives are launched to ensure employees of various age and background continue to be effective in their roles and build meaningful career at Arvind.
The Groupâs Corporate Human Resources plays a critical role in companyâs talent management process.
15. RISK MANAGEMENT
The Company has a robust Enterprise Risk Management framework which enables it to take certain risks to remain competitive and achieve higher growth and at the same time mitigate other risks to maintain sustainable results.
Under the framework, the Company has laid down a Risk Management Policy which defines the process for identification of risks, its assessment, mitigation measures, monitoring and reporting. While the Company, through its employees and Executive Management, continuously assess the identified Risks, the Audit Committee reviews the identified Risks and its mitigation measures annually.
The Company has identified 19 Risks - 4 Strategic Risks, 12 Operational Risks & 3 Regulatory Risks. Key Strategic Risks include geographical concentration of its manufacturing capacity, reputational risk, changing customer preference from cotton to blends & business continuity planning. Key Operating Risks include fluctuation in cotton prices, labour unrest, increased global and local competition, customers credit risk, sales channel disruption, customersâ concentration & fluctuation on foreign exchange rates. Regulatory Risks include changes in taxation regime, bilateral/multilateral trade agreements, government policies with respect to textiles & regulatory compliances.
16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has an Internal Audit Department with adequate experience and expertise in internal controls, operating system and procedures. In discharging their role and responsibilities, the department is supported by an external audit firm.
The Internal Audit Department reviews the adequacy of internal control system in the Company, its compliance with operating systems and laid down policies and procedures. Based on the report of internal audit function, process owners undertake corrective actions 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.
17. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company www.arvind.com
18. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
As on 31st March, 2017, the Company has 22 subsidiaries (Direct or Indirect) and 5 joint venture companies.
During the year under review, the Company has incorporated/ acquired the following companies as subsidiaries/joint ventures (Direct or Indirect):
1. Arvind Fashions Limited (Subsidiary)
2. Arvind Ruf & Tuf Private Limited (Subsidiary)
3. Arvind Premium Retail Limited (Subsidiary)
4. Arvind True Blue Limited (Subsidiary)
During the year under review, the following subsidiaries ceased to be the subsidiaries of the Company.
1. Asman Investments Limited
2. Arvind Accel Limited
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC-1 is attached to the Financial Statements. The separate audited financial statements in respect of each of the subsidiary shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of each of the subsidiary are also available on the website of the Company at www.arvind.com
The Company has framed a policy for determining material subsidiaries, which has been uploaded on companyâs website www.arvind.com
19. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors consists of 10 members, of which six are Independent Directors. The Board also comprises of one women Director.
As approved by the shareholders at the Annual General Meeting (AGM) held on 4th August, 2016, Mr. Sanjay Lalbhai (DIN: 00008329) was appointed as the Chairman and Managing Director of the Company for a period of five years, with effect from 1st April, 2017.
As per the provisions of Section 152 (6) of the Act, Mr. Jayesh Shah (DIN:00008349) shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment as the Director of the Company.
The Board of Directors had, on recommendation of Nomination and Remuneration Committee, re-appointed Mr. Punit Lalbhai and Mr. Kulin Lalbhai as Executive Directors of the Company for a further period of 5 years from 1st August, 2017 to 31st July, 2022 and approved the remuneration payable to them for the said period.
As per the provisions of Section 203 of the Companies Act, 2013, Mr. Sanjay Lalbhai- Chairman and Managing Director, Mr. Jayesh Shah-Whole time Director and Chief Financial Officer and Mr. R.V. Bhimani-Company Secretary are the key managerial personnel of the Company.
20. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
21. REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The Remuneration Policy is explained in the Corporate Governance Report forming part of this Report.
22. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report are also available on the Companyâs website www.arvind.com
23. DECLARATION OF INDEPENDENCE
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
24. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year under review, 5 meetings of the Board were held. The details of the meetings are provided in the Corporate Governance Report forming part of this Report.
25. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
a. in preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. they 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 the end of the financial year and of the profit and loss of the Company for that period;
c. they have taken proper and sufficient care towards 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;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls, which are adequate and are operating effectively;
f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
26. RELATED PARTY TRANSACTIONS
All the related party transactions are entered on armâs length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations. There are 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 or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Companyâs financial statements in accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Policy on Related Party Transactions as approved by the Board is available on Companyâs website www.arvind.com
27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
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.
28. AUDITORS
A. Statutory Auditors
As per the provisions of Section 139 of the Companies Act 2013, the term of office of M/s. Sorab S. Engineer & Co. Chartered Accountants, (ICAI Registration No.110417W), as Statutory Auditors of the Company will conclude from the close of the forthcoming Annual General Meeting of the Company.
The Board of Directors places on record its appreciation for the services rendered by M/s. Sorab S. Engineer & Co. as the Statutory Auditors of the Company.
Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, (ICAI Firm Registration No. 117366W/W-100018) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013.
Membersâ attention is drawn to a Resolution proposing the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, as Statutory Auditors of the Company which is included at Item No. 4 of the Notice convening the Annual General Meeting.
Further, the report of M/s. Sorab S. Engineer & Co., the Statutory Auditors, along with notes to Financial Statements is enclosed to this annual report. The observations made in the Auditorsâ Report are self-explanatory and therefore do not call for any further comments.
B. Cost Auditors
On the recommendation of the Audit Committee, the Board of Directors appointed M/s Kiran J. Mehta & Co., Cost Accountants, Ahmedabad (Firm Registration No. 000025), as Cost Auditors of the Company for the year 2017-18 under Section 148 of the Companies Act 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014. M/s Kiran J. Mehta & Co. have confirmed that they are free from disqualification specified under Section 141 (3) and proviso to Section 148 (3) read with Section 141 (4) of the Companies Act, 2013 and that their appointment meets the requirements of Section 141 (3) (g) of the Companies Act, 2013. They have further confirmed their independent status and an armâs length relationship with the Company.
The remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution for seeking Membersâ ratification for the remuneration payable to M/s Kiran J. Mehta & Co., Cost Auditors is included at item No. 5 of the notice convening the Annual General Meeting.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Hitesh Buch & Associates, a firm of Company Secretaries in practice, to conduct the Secretarial Audit of the Company for the financial year 2016-17. The Secretarial Audit Report is annexed herewith as âAnnexure-Câ. The Secretarial Audit Report does not contains any qualifications, reservation or adverse remarks.
29. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders. Accordingly, your Companyâs operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.
30. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management Discussion & Analysis, which form part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
31. BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report for the year ended 31st March, 2017 as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015 is annexed which forms part of this Annual Report.
32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings 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 âAnnexure- Dâ.
33. EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as âAnnexure -Eâ.
34. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in âAnnexure-Fâ to this report.
35. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
Arvind Internal Complaints Committee (AICC) is formed and its details are declared across the organizations. All AICC members are trained by subject experts on handling the investigations and proceedings as defined in the policy.
During the financial year 2016-17, the Company has received 2 (two) complaints on sexual harassment. AICC conducted the proceedings as defined in the Policy. Out of which one complaint did not qualify to be considered as a Sexual Harassment case as defined in the policy. The second case was dealt with, as per the policy guidelines and ICC recommendations were given, in a fair and just manner.
36. ACKNOWLEDGEMENTS
The Board expresses its sincere thanks to all the employees, customers, suppliers, investors, lenders, regulatory and government authorities and stock exchanges for their co-operation and support and look forward to their continued support in future.
By order of the Board
Date: May 11, 2017 Sanjay Lalbhai
Place: Ahmedabad Chairman and Managing Director
Mar 31, 2015
To the Members,
The Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1st April, 2014 to
31st March, 2015.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs. in Crores
2014-2015 2013-2014
Turnover & Operating Income 5224.69 4775.48
Profit before Finance Costs, Depreciation 955.44 860.61
and Amortisation Expenses,
Extraordinary Items & Tax Expenses
Less : Finance costs 320.06 278.11
Profit before Depreciation and 635.38 582.50
Amortisation Expenses, Extraordinary
Items & Tax Expenses
Less : Depreciation and Amortisation Expenses 125.83 157.51
Profit before Extraordinary Items and Tax 509.55 424.99
Expenses
Less : Exceptional Items 31.93 16.40
Profit Before Tax 477.62 408.59
Less : Current Tax 100.82 86.30
Less : Deferred Tax 68.87 47.20
Add: MAT Credit Entitlement Excess
Provision of Earlier Year Written
Back
Profit for the year 377.43 361.39
Profit from Ordinary Activities after tax 376.86 362.02
(Continuing Operations)
Profit from Ordinary Activities after tax 0.57 (0.63)
(Discontinuing Operations)
Profit for the year 377.43 361.39
Balance of Profit brought forward 1245.33 991.07
Balance available for appropriation 1622.76 1352.46
Less : Appropriation
Transfer to General Reserve 0.00 36.15
Additional dividend on Equity Shares 0.01 0.00
Dividend distribution tax on additional 0.001 0.00
dividend on Equity Shares
Proposed Dividend on Equity Shares 65.85 60.67
Tax on Dividend 13.17 10.31
Closing Balance 1543.73 124533
2. TRANSFER TO RESERVES
No amount is appropriated from Profit and Loss Account and transferred
to any Reserve Account.
3. OPERATIONS
The macroeconomic scenario during the year under review was
characterized by world economy continuing its recovery from the
recession in the last decade, the global growth of 3.4% showed a
continued path to improvement taking into account growth of 3.4% in
2013. India''s economy also showed a continued cyclical upswing, in FY
2014-15, India''s GDP grew by 7.2%, as compared to 6.9% in FY14. While
these higher numbers partially reflect the change in base year used for
calculation of GDP, the overall growth demonstrates a strong recovery.
Due to record-low oil prices and focus on fiscal policy by the new
Government at the centre, inflation has eased. It has also allowed
easing of interest rates. However the consumer spending is yet to
pick-up in tandem with growth in GDP. In the backdrop of above
macro-economic scenario, your Company has closed the financial year
2014-15 with 10% growth in Revenue and 10% growth in Operating Earnings
before Interest, Depreciation and Taxes (EBITDA). Profit Before Tax
(excluding Exceptional Items) has shown a growth of 19% compared to
FY14.
The Revenue growth is led by 33% growth in Knits fabrics, followed by
10% growth in Voiles fabrics, 8% growth in Woven fabrics, 6% growth in
Garments and 2% growth in Denim fabrics.
A detailed analysis of the financial results is given in the Management
Discussion and Analysis report which forms part of this report.
4. DIVIDEND
Your Directors are pleased to recommend a dividend of 25.50% C2.55 per
equity share of Rs.10 each) for the year, subject to the approval of the
shareholders at the ensuing Annual General Meeting.
5. SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2015 was Rs.258.24
Crores.
A) Issue of equity shares with differential rights
During the year under review, the Company has not issued any shares
with differential voting rights.
B) Issue of sweat equity shares
During the year under review, the Company has not issued any sweat
equity shares.
C) Issue of employee stock options
The Company has instituted the Employees Stock Option Scheme- (ESOS) to
grant equity based incentives to certain eligible employees and
directors of the Company and its subsidiary companies. During the year
under review, the Nomination and Remuneration Committee had granted
10.50 lacs options to certain eligible employees of the Company at an
exercise price of Rs.200.45 per option, representing one equity share for
each option upon exercise. The details as per the requirements of SEBI
Guidelines are annexed and form part of this report. Pl. see ANEXURE-A
for this.
D) Provision of money by company for purchase of its own shares by
employees or by trustees for the benefit of employees
The Company has no scheme of provision of money for purchase of its own
shares by employees or by trustees for the benefit of employees. Hence
the details under rule 16 (4) of Companies (Share Capital and
Debentures) Rules, 2014 are not required to be disclosed.
6. FINANCE
The Company has repaid the installments of Term Loans amounting to Rs.167
crores during the current year.
The Company has also made fresh borrowings of Rs.264 Crores for funding
capital expenditure and other requirements. Long Term Debt of the
Company stands to Rs.1419 crores as on 31st March, 2015.
7. FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the year.
There are no outstanding and overdue deposits as at 31st March, 2015.
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
9. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Arvind Limited undertakes "Corporate Social Responsibility'''' (CSR)
initiatives through Strategic Help Alliance for Relief to Distressed
Area (SHARDA) Trust and Narottam Lalbhai Rural Development Fund
(NLRDF). SHARDA & NLRDF have been active in improving the quality of
life of the urban poor & rural poor respectively.
During 2014-15, the first year of the mandatory CSR rule, the company
has undertaken many initiatives, has prepared a strong foundation
through a policy framework for expanding some of the present
initiatives and undertaking newer CSR initiatives in the years to come.
Through SHARDA Trust, the company has undertaken an Educational
initiative called "Gyanda-fountain for knowledge" for the municipal
school going students in Ahmedabad. The initiative has completed eight
years covering a complete pilot phase.
Educational intervention in Gyanda includes organised academic support
as well as grooming on social, cultural and personal aspects with
students from primary to higher and college education. The students
from higher and professional education courses will soon start earning
which will make sure that it is the last generation in poverty for
them, a cherished dream that the Trust and the students have shared
together. With this experience of eight years, the programme is ready
for expansion from present about 1300 students to about 6000 students
in next 2-3 years.
Along with school education, Trust also conducted Basic Computer
Familiarization Programme for 165 students, homemakers, working and
non-working women and men. 72 youth were trained for English Language
Programme. The Trust also conducts regular Music classes and 135 people
of all age groups were part of this during the year.
In addition, expansion is on cards with initiatives on health, skills
and rural development. A need assessment survey is underway in six
villages of Santej and Dholka area of Gandhinagar and Ahmedabad
district for undertaking rural development initiatives.
On the other hand, through NLRDF, the company has undertaken
initiatives of women and child development, HIV / AIDS awareness and
prevention, community health, Micro enterprise development etc.
NLRDF implemented a project on Women and Child development titled
"Promoting Appropriate Nutrition Practices" for the benefit of
pregnant women, lactating women and children of the age group 0-2 years
to address the concern of malnutrition. Over 10000 persons from 137
Villages of Khedbharhma Block were impacted. A
Workshop on Experience Sharing about the project was organized. Our
546 village volunteers and 312 Anganwadi workers attended this
workshop. Chief of UNICEF and the Executive Director of NLRDF along
with Government Officers attended the workshop.
NLRDF also has a program for creating awareness to reduce the risk of
transmission of HIV/AIDS. The project reached to a population of about
960 persons in Sabarkantha District. The project''s major focus was on
Behavior Change Communication, Regular Medical Checkup, Counseling,
Treatment of Sexually Transmitted Diseases and Condom Promotion. In
Dahej industrial area of Bharuch District, NLRDF undertook similar
intervention with over 10000 migrant workers for HIV/ AIDS prevention
and control.
To strengthen the implementation of Mid Day Meal Scheme in selected 15
tribal schools, NLRDF undertook a pilot project in Khedbrahma block of
Sabarkantha District. It was done by imparting nutrition education in
school. The program has impacted 560 Boys and 599 Girls of 15 primary
schools.
Under Micro Enterprise Development Program, NLRDF trained about 100
participants in various trades like Beauty Parlor, Mason, Garment and
Artificial Jewelry making. All the participants were given respective
Kits to start their venture.
New Initiatives
In addition to the above ongoing programs, the company has planned
initiatives on following:
Promoting Education
The company is set to expand the ongoing education support program
Gyanda from present 1300 students to reach out to about 6000 students
in 2-3 years. In addition, establishing a scholarship program for
higher education for students is also on the card. To support these
programs partially, a corpus has been created with SHARDA Trust.
Rural Development Projects
The company wishes to start rural development initiatives around our
factory premises in Ahmedabad. To determine what initiatives can be
undertaken, a Need Assessment Study is underway in six villages.
Project details will be worked out based on the findings of the study.
Narottam Lalbhai Rural Development Fund (NLRDF) is rural CSR arm of the
company and is getting the project underway. An external agency has
been roped in to undertake this study.
National Heritage, Art & Culture
Cultural Development is an area that our CSR policy wishes to address.
The company has decided to support a program titled "Promotion of
Indology" that aims to work on maintenance and restoration of old
manuscripts as well as education and research in the field of Indology.
Lalbhai Dalpatbhai Bhartiya Sanskriti Vidyamandir (LDBSV), a public
charitable Trust is spearheading this project and a corpus has been
created with LDBSV to support this project on ongoing basis. In
addition, company has supported other cultural initiatives of Jagannath
Cultural Academy & Research Centre.
The Annual Report on CSR Activities in prescribed format is enclosed
with this as ANNEXURE- B.
10. EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonious.
The Board wishes to place on record its sincere appreciation of the
devoted efforts of all employees in advancing the Company''s vision and
strategy to deliver good performance.
11. BUSINESS RISK MANAGEMENT
The Company has laid down a Risk Management Policy and identified
threat of such events which if occurs will adversely affect either /
or, value to shareholders, ability of company to achieve objectives,
ability to implement business strategies, the manner in which the
company operates and reputation as "Risks". Further such Risks are
categorized in to Strategic Risks, Operating Risks & Regulatory Risks.
A detailed exercise is carried out to identify, evaluate, manage and
monitoring all the three types of risks. A Risk Management Committee
has been constituted to oversee the risk management process in the
Company required under Section 134 (3) (n) of the Companies Act, 2013
and Clause 49 of the Listing Agreement. The details of Committee and
its terms of reference are set out in the Corporate Governance Report
forming part of the Board''s Report. The Risk Management Committee
bi-annually will review the risk and suggest steps to be taken to
control and mitigate the same through a properly defined framework.
The Company has identified in all 17 risks, 6 Strategic Risks, 8
Operational Risks & 3 Regulatory Risks. Key Strategic Risks include
geographical concentration of its manufacturing capacity, fluctuation
in cotton prices, business continuity & succession planning. Key
Operating Risks include labour unrest, customers credit risk, customers
concentration & fluctuation on foreign exchange rates. Regulatory Risks
include bilateral/multilateral trade agreements, government policies
with respect to textiles & Regulatory compliances. The company has
prepared Risk Register documenting all the risks along with risk
mitigation measures which shall be reviewed by Risk Management Policy.
It may be noted that none of the identified risks is such which may
threaten the existence of the company.
12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. During the year under review,
the company retained external audit firm to review its existing
internal control system with a view of tighten the same and introduce
system of self certification by all the process owners to ensure that
internal controls over all the key business processes are operative.
The scope and authority of the Internal Audit (IA) function is defined
in the Internal Audit Charter.
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company and its subsidiaries. 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.
13. vigil MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy to deal
with instances of fraud and mismanagement, if any. The details of the
Whistle Blower Policy is explained in the Corporate Governance Report
and also posted on the website of the Company.
14. SUBSIDIARIES AND JOINT VENTURES
Pursuant to the provisions of Section 129(3) of the Companies Act,
2013, a statement containing salient features of financial statements
of subsidiaries, associates and joint venture companies in Form AOC-1
is attached to the Accounts. The separate audited financial statements
in respect of each of the subsidiary companies shall be kept open for
inspection at the Registered Office of the Company. The Company will
also make available these documents upon request by any Member of the
Company interested in obtaining the same. The separate audited
financial statements in respect of each of the subsidiary companies are
also available on the website of the Company at www.arvind.com
15. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in
accordance with the applicable Accounting Standards issued by the
Institute of Chartered Accountants of India form part of this Annual
Report.
16. DIRECTORS
a) Changes in Directors and Key Managerial Personnel
Pursuant to the provisions of Sections 149, 150, 152 and other
applicable provisions of the Companies Act, 2013 and the rules made
thereunder, read with Schedule IV to the Companies Act, 2013, your
Directors appointed Mr. Samir Mehta as Independent Director of the
Company to hold office for a period of five years with effect from 30th
July, 2014, subject to approval by the members in the ensuing Annual
General Meeting and his office as Independent Director shall not be
subject to retirement by rotation.
Details of the proposal for appointment of Mr. Samir Mehta are
mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of the ensuing Annual General
Meeting.
Mr. Prabhakar Dalal, Nominee Director of EXIM Bank of India, ceased to
be a Director with effect from 10th December, 2014 due to withdrawal of
nomination by EXIM Bank of India. The Board places on record its deep
sense of appreciation for the valuable guidance and counsel provided by
Mr. Prabhakar Dalal during his tenure as a Director of the Company.
Pursuant to the provisions of Sections 149, 150, 152 and other
applicable provisions of the Companies Act, 2013 and the rules made
thereunder, read with Schedule IV to the Companies Act, 2013, your
Directors appointed Mr. Nilesh Shah as Independent Director of the
Company to hold office for a period of five years with effect from 6th
May, 2015, subject to approval by the members in the ensuing Annual
General Meeting and his office as Independent Director shall not be
subject to retirement by rotation.
Details of the proposal for appointment of Mr. Nilesh Shah are
mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of the ensuing Annual General
Meeting.
Mr. Punit Lalbhai will retire at the forthcoming Annual General Meeting
of the Company and being eligible, offer himself for reappointment.
b) Declaration by an Independent Director(s) and re- appointment, if
any
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
c) Formal Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit, Nomination and
Remuneration Committees. The manner in which the evaluation has been
carried out has been explained in the Corporate Governance Report.
d) Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
stated in the Corporate Governance Report.
e) Number of Meetings of the Board of Directors and Audit Committee
A calendar of Meetings is prepared and circulated in advance to the
Directors.
During the year four Board Meetings and one Independent Directors''
meeting and four Audit Committee Meetings were convened and held. The
details of which are given in the Corporate Governance Report. The
intervening gap between the Meetings was within the period prescribed
under the Companies Act, 2013.
17. DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a. that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
b. that such accounting policies have been selected and applied
consistently and judgement 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 at March 31, 2015 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 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;
f. that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
18. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of business. There were no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
All Related Party Transactions upto 31st December, 2014 were placed
before the Audit Committee as also the Board for approval. Prior
omnibus approval of the Audit Committee was obtained for Related Party
Transactions for a period upto 31st March, 2015 and for the financial
year 2015-16. Unforeseen related party transactions upto Rs.1 crore per
transaction with related parties not covered under the omnibus approval
has also been approved by the Audit Committee. The transactions
entered into pursuant to the omnibus approval so granted were audited
and a statement giving details of all related party transactions was
placed before the Audit Committee for its review on a quarterly basis.
The Company has developed a Related Party Transactions Manual, Standard
Operating Procedures for purpose of identification and monitoring of
such transactions.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company''s website.
None of the Directors has any pecuniary relationships or transactions
vis-a-vis the Company.
Since all related party transactions entered into by the Company were
in ordinary course of business and were on an arm''s length basis, form
AOC - 2 is not applicable to the Company.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
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. AUDITORS
A. Statutory Auditors
The Company''s Auditors, Sorab S. Engineer & Co. Chartered Accountants,
Ismail Building, 381, Dr. D. Naoroji Road, Fort, Mumbai-400 001 who
retire at the ensuing Annual General Meeting of the Company are
eligible for reappointment. They have confirmed their eligibility
under Section 141 of the Companies Act, 2013 and the Rules framed
thereunder for reappointment as Auditors of the Company. As required
under Clause 49 of the Listing Agreement, the auditors have also
confirmed that they hold a valid certificate issued by the Peer Review
Board of the Institute of Chartered Accountants of India.
Members'' attention is invited to the observation made by the Auditors
under "Emphasis of Matter" appearing in the Auditors'' Report.
B. Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Amendment Rules, 2014. the cost
audit records maintained by the Company in respect of its textiles and
telecommunication products are required to be audited. Your Directors
had, on the recommendation of the Audit Committee, appointed M/s Kiran
J. Mehta & Co., Cost Accountants, Ahmedabad to audit the cost accounts
of the Company for the financial year 2015-16 on a remuneration of Rs.
3.75 lakhs. As required under the Companies Act, 2013, the remuneration
payable to the cost auditor is required to be placed before the Members
in a general meeting for their ratification. Accordingly, a Resolution
seeking Member''s ratification for the remuneration payable to M/s Kiran
J. Mehta & Co., Cost Auditors is included at Item No. 7 of the Notice
convening the Annual General Meeting.
C. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s Hitesh Buch &
Associates, a firm of Company Secretaries in Practice to undertake the
Secretarial Audit of the Company. The Secretarial Audit Report is
annexed herewith as "Annexure -C".
21. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important
stakeholders. Accordingly, your Company''s operations are committed to
the pursuit of achieving high levels of operating performance and cost
competitiveness, consolidating and building for growth, enhancing the
productive asset and resource base and nurturing overall corporate
reputation. Your Company is also committed to creating value for its
other stakeholders by ensuring that its corporate actions positively
impact the socio-economic and environmental dimensions and contribute
to sustainable growth and development.
22. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
As per Clause 49 of the Listing Agreement with the Stock Exchanges, the
Corporate Governance Report, Management Discussion and Analysis and the
Auditor''s Certificate regarding compliance of conditions of Corporate
Governance are attached separately and form part of the Annual Report.
23. CONSERVATION OF Energy, Technology ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings 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-D".
24. EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT 9 is annexed herewith as "Annexure-E".
25. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule, 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, will be provided
upon request. In terms of Section 136 of the Act, the Report and
Accounts are being sent to the Members and others entitled thereto,
excluding the information on employees'' particulars which is available
for inspection by the Members at the Registered Office of the Company
during business hours on working days of the Company up to the date of
the ensuing Annual General Meeting. If any Member is interested in
obtaining a copy thereof, such Member may write to the Company
Secretary in this regard.
26. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and
has adopted a policy against sexual harassment in line with the
provisions of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
During the financial year 2014-15, the company has not received any
complaints on sexual harassment and hence no complaints remain pending
as of 31 March, 2015.
27. ACKNOWLEDGEMENTS
Your Directors thank the various Central and State Government
Departments, Organizations and Agencies for the continued help and
co-operation extended by them. The Directors also gratefully
acknowledge all stakeholders of the Company viz. customers, members,
dealers, vendors, banks and other business partners for the excellent
support received from them during the year. The Directors place on
record their sincere appreciation to all employees of the Company for
their unstinted commitment and continued contribution to the Company.
By order of the Board
Date: May 14, 2015 Sanjay Lalbhai
Place: Ahmedabad Chairman and Managing Director
Mar 31, 2014
To the Members,
The Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1st April, 2013 to
31st March, 2014.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs. in Crores
2013-2014 2012-2013
Turnover & Operating Income 4775.48 3780.29
Profit before Finance Costs, Depreciation 878.94 680.15
and Amortisation Expenses,
Extraordinary Items & Tax Expenses
Less : Finance costs 296.44 268.44
Profit before Depreciation and 582.50 411.71
Amortisation Expenses, Extraordinary
Items & Tax Expenses
Less : Depreciation and Amortisation Expenses 157.51 150.49
Profit before Extraordinary Items and 424.99 261.22
Tax Expenses
Less : Exceptional Items 16.40 0.00
Profit Before Tax 408.59 261.22
Less : Current Tax 86.30 53.79
Less : Deferred Tax 47.20 0.00
Add: MAT Credit Entitlement (86.30) (53.79)
Profit for the year 361.39 261.22
Balance of Profit brought forward 991.07 799.67
Balance available for appropriation 1352.46 1060.89
Less : Appropriation :
Transfer to General Reserve 36.15 20.00
Proposed Dividend on Equity Shares 60.67 42.58
Tax on Dividend 10.31 7.24
Closing Balance 1245.33 991.07
2. OPERATIONS
The macroeconomic scenario during the year under review was
characterized by world economy continuing its downward trend on growth;
as world economy further decelerated growth rate to 3.0% in 2013
compared to 3.2% in 2012. India''s economy showed some signs of
recovery, albeit slow, in FY 2013-14. India''s GDP growth rate
moderately increased to 4.9%, as compared to 4.5% in FY 2012-13. This
was accompanied by some easing in the infation rate. However, high
interest rates, a depreciated currency and uncertainty due to general
elections have led to deceleration in the economic recovery.
Particularly, performance of industry sector was lacklustre last year,
owing to high interest cost and low investment. In the backdrop of
above macro-economic scenario, the performance of your Company is
highly encouraging. Your Company has closed the financial year 2013-14
with 26% growth in sales and 29% growth in Operating Earnings before
Interest, Depreciation and Taxes. (Operating EBITDA). PBT (excluding
Exceptional Income) has shown a growth of 63% compared to the previous
year.
Your Company has achieved the growth across all business segments. The
Revenue from Denim has increased by 22% (17% increase, ignoring the
loss of volume on account of strike in the previous year). As a result
of expansion in capacity and increase in price, the Woven Business
registered a growth of 29% in Revenue, Voiles Business registered a
growth of 21%, Knits Business registered a growth of 48% and Garments
Business registered a growth of 27%.
A detailed analysis of the financial results is given in the Management
Discussion and Analysis report, which forms part of this report.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 2.35 per equity
share of Rs.10 each.
4. FINANCE
The Company has repaid the installments of Term Loans amounting to Rs.228
crores during the current year.
The Company has also made fresh borrowings of Rs.447 Crores for funding
capital expenditure and other requirements. Long Term Debt of the
Company stands to Rs.1322 crores as on 31st March, 2014.
5. EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme- (ESOS) to
grant equity based incentives to certain eligible employees and
directors of the Company and its subsidiary companies. At present
66,680 options granted at an exercise price of Rs.73.70 per option
pursuant to the Scheme are outstanding. The details as per the
requirements of SEBI Guidelines are annexed and form part of this
report.
6. SUBSIDIARIES
A detailed discussion on certain subsidiary companies and their
performance during the year is contained in the Management Discussion
and Analysis Report which forms part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, the Company has prepared Consolidated
Financial Statements of the Company and its subsidiaries are included
in the Annual Report.
7. DIRECTORS
Mr. Munesh Khanna resigned from the Board of Directors of the Company
with effect from 15th April, 2014. Your Directors take this opportunity
to express their deep sense of appreciation for the valuable services
rendered by Mr. Munesh Khanna during his tenure as a Director.
Pursuant to the provisions of Sections 149, 150, 152 and other
applicable provisions of the Companies Act, 2013 and the rules made
thereunder, read with Schedule IV to the Companies Act, 2013, your
Directors appointed Mr. Vallabh Bhanshali and Mr. Dileep C. Choksi as
Independent Directors of the Company to hold ofce for a period of five
years with effect from 12th May, 2014, subject to approval by the
members in the ensuing Annual General Meeting and their ofce as
Independent Director shall not be subject to retirement by rotation.
Details of the proposal for appointment of Mr. Vallabh Bhanshali and
Mr. Dileep C. Choksi are mentioned in the Explanatory Statement under
Section 102 of the Companies Act, 2013 of the Notice of the ensuing
Annual General Meeting.
Pursuant to provisions of Sections 149, 150, 152 and other applicable
provisions of the Companies Act, 2013 and rules made thereunder, your
Directors are seeking appointment of Dr. Bakul Dholakia and Ms. Renuka
Ramnath as Independent Directors of the Company for five consecutive
years, for a term upto 31st July, 2019. Details of the proposal for
appointment of Dr. Bakul Dholakia and Ms. Renuka Ramnath are mentioned
in the Explanatory Statement under Section 102 of the Companies Act,
2013 of the Notice of the ensuing Annual General Meeting.
Mr. Sudhir Mehta, Director of the Company, retires by rotation at the
ensuing Annual General Meeting and does not seek re-appointment owing
to his preoccupations and other busy schedules. Accordingly, Mr. Sudhir
Mehta retires at this Annual General Meeting and the Board has decided
not to fill, for the time being, the vacancy caused due to his
retirement.
Mr. Sanjay Lalbhai shall retire at the forthcoming Annual General
Meeting of the Company and being eligible offers himself for re-
appointment.
8. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance and a Management Discussion
and Analysis Report are being published as a part of the Annual Report
of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are
complied by the Company and their Certificate is annexed to the Report
on Corporate Governance.
9. RESPONSIBILITY STATEMENT
The Directors confrm that:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no material
departures from the applicable accounting standards;
2. such accounting policies have been selected and applied
consistently and such judgments and estimates have been made as are
reasonable and prudent so as to give a true and fair view of the state
of afairs of the Company at the end of the financial year ended on 31st
March, 2014 and of the profit of the Company for that period;
3. proper and sufcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. the statements of accounts for the year ended on 31st March, 2014
have been prepared on a going concern basis.
10. FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the year.
There are no outstanding and overdue deposits as at 31st March, 2014.
11. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended from time to time, forms part of this report.
However, as per the provisions of Section 219 (1)(b) (iv), the report
and accounts are being sent to all shareholders of the Company
excluding the information relating to conservation of energy,
technology absorption and foreign exchange earning and outgo and the
statement of particulars of employees. Any shareholder interested in
obtaining such particulars may inspect the same at the Registered Ofce
of the Company or write to the Secretary for a copy.
12. AUDITORS
The Auditors, Sorab S. Engineer & Co., retire and ofer themselves for
re-appointment. It is proposed that Sorab S. Engineer & Co., be re-
appointed as auditors of the Company. You are requested to appoint the
auditors and fx their remuneration.
13. ACKNOWLEDGEMENT
Your Directors would like to appreciate the eforts of the Company''s
employees for their continued co-operation and unstinted support
extended to the company. The support of all lenders including Financial
Institutions, Commercial Banks, Overseas Banks and vendors and buyers
has also been invaluable to the Company''s performance and your
Directors take this opportunity to appreciate it deeply.
By Order of the Board
Date: May 15, 2014 Sanjay S. Lalbhai
Place: Ahmedabad. Chairman and Managing Director
Mar 31, 2013
To the Members,
The Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1st April, 2012 to
31st March, 2013.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs. in Crores
2012-2013 2011-2012
Turnover & Operating Income 3780.29 3494.12
Profit before Finance Costs, 680.15 637.05
Depreciation and Amortisation Expenses,
Extraordinary Items & Tax Expenses
Less : Finance costs 268.44 270.25
Profit before Depreciation and 411.71 366.80
Amortisation Expenses, Extraordinary
Items & Tax Expenses
Less : Depreciation and Amortisation Expenses 150.49 130.51
Profit before Extraordinary Items and 261.22 236.29
Tax Expenses
Add : Extraordinary Items 0.00 251.80
Profit Before Tax 261.22 488.09
Less : Current Tax 53.79 85.15
Add: MAT Credit Entitlement (53.79) (31.29)
Profit for the year 261.22 434.23
Balance of Profit brought forward 799.67 450.12
Add : Profit of Amalgamated Company 0.00 1.62
Less: Amount transferred to Statement of 0.00 56.31
Profit and Loss on account of Amalgamation
Balance available for appropriation 1060.89 829.66
Less : Appropriation :
Transfer to General Reserve 20.00 NIL
Proposed Dividend on Equity Shares 42.58 25.80
Tax on Dividend 7.24 4.19
Closing Balance 991.07 799.67
2. OPERATIONS
The macroeconomic environment posed many challenges for the company
during the year under review. On domestic front, stagnant economy, high
inflation and higher interest rates dampened the consumer sentiments.
On global front Euro Zone continued to be in turmoil. On the top of
challenging macroeconomic scenario, our company witnessed unprecedented
event of strike at two of its manufacturing plants in the month of
June, 2012 leading to loss of production. It is heartening to note that
despite such a challenging environment, our Company has closed the
financial year 2012-13 with 8% growth in sales and 7% growth in
Operating Earnings before Interest, Depreciation and Taxes. (Operating
EBITDA). PAT (excluding Exceptional Income) has shown a growth of 11%
compared to the previous year.
The growth in revenue was mainly led by woven fabric division which
registered growth of 28% in volume and 30% in revenue. The Operational
Excellence Drive to improve the productivity has resulted into higher
operating margins for woven business. While denim fabric volume was
lower by 7% on account of loss of production during strike period, it
has maintained its profitability under highly competitive market
scenario. Denim Business continues with its strategy of improving
product and customer mix so as to achieve higher contribution per
meter.
A detailed analysis of the financial results is given in the Management
Discussion and Analysis report which forms part of this report.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 1.65 per
equity share of Rs.10 each.
4. FINANCE
The Company has repaid the installments of Term Loans amounting to Rs.
195 crores during the current year.
The Company has also made fresh borrowings of Rs. 434 Crores for
funding capital expenditure and other requirements. Long Term Debt of
the Company stands to Rs. 1104 crores as on 31st March, 2013.
5. EMOLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme- (ESOS) to
grant equity based incentives to certain eligible employees and
directors of the Company and its subsidiary companies. 27.50 lacs and
2.00 lacs options were granted to certain eligible employees and
directors of the company and its subsidiary companies by the
Remuneration Committee at an exercise price of Rs. 14.65 per option and
Rs. 73.70 per option respectively, representing one share for each
option upon exercise. The details as per the requirements of SEBI
Guidelines are annexed and form part of this report.
6. SUBSIDIARIES
A detailed discussion on subsidiary companies and their performance
during the year is contained in the Management Discussion and Analysis
Report which forms part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, the Company has prepared Consolidated
Financial Statements of the Company and its subsidiaries are included
in the Annual Report.
7. DIRECTORS
Mr. G.M.Yadwadkar, a Nominee Director of IDBI Bank Ltd. has ceased to
be a Director with effect from 1st August, 2012 due to withdrawal of
his nomination by IDBI Bank Ltd. The Board places on record its deep
sense of appreciation for the valuable services rendered by Mr.
G.M.Yadwadkar during his tenure as Director.
Mr. Punit Lalbhai and Mr. Kulin Lalbhai were appointed as Additional
Directors of the Company with effect from 26th July, 2012. They were
also appointed as Executive Directors of the Company for a period
commencing from 1st August, 2012 to 31st July, 2017.
At the ensuing Annual General Meeting, Dr. Bakul Dholakia and Ms.
Renuka Ramnath, Directors of the Company, retire by rotation, but being
eligible, offer themselves for re-appointment.
8. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance and a Management Discussion
and Analysis Report are being published as a part of the Annual Report
of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are
complied by the Company and their Certificate is annexed to the Report
on Corporate Governance.
9. RESPONSIBILITY STATEMENT
The Directors confirm that:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no material
departures from the applicable accounting standards;
2. such accounting policies have been selected and applied
consistently and such judgments and estimates have been made as are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended on
31st March, 2013 and of the profit of the Company for that period;
3. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. the statements of accounts for the year ended on 31st March, 2013
have been prepared on a going concern basis.
10. FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the year.
There are no outstanding and overdue deposits as at 31st March, 2013.
11. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended from time to time, forms part of this report.
However, as per the provisions of Section 219 (1)(b) (iv), the report
and accounts are being sent to all shareholders of the Company
excluding the information relating to conservation of energy,
technology absorption and foreign exchange earning and outgo, and the
statement of particulars of employees. Any shareholder interested in
obtaining such particulars may inspect the same at the Registered
Office of the Company or write to the Secretary for a copy.
12. AUDITORS
The Auditors, Sorab S. Engineer & Co., retire and offer themselves for
re-appointment. It is proposed that Sorab S. Engineer & Co., be re-
appointed as auditors of the Company. You are requested to appoint the
auditors and fix their remuneration.
13. ACKNOWLEDGEMENT
Your Directors would like to appreciate the efforts of the Company''s
employees for their continued co-operation and unstinted support
extended to the company. The support of all lenders including Financial
Institutions, Commercial Banks, Overseas Banks etc. and vendors,
investors, business associates, Government of India and State
Government and various departments and agencies has also been
invaluable to the Company''s performance and your Directors take this
opportunity to appreciate it deeply.
By Order of the Board
Date: 16th May, 2013 Sanjay S. Lalbhai
Place: Ahmedabad. Chairman and Managing Director
Mar 31, 2012
To the Members,
The Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1st April, 2011 to
31st March, 2012.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs. in Crores
2011-2012 2010-2011
Turnover & Operating Income 3494.12 2683.26
Profit before Finance Costs, 637.05 438.19
Depreciation and Amortisation
Expenses, Extraordinary Items & Tax
Expenses
Less : Finance costs 270.25 187.23
Profit before Depreciation and 366.80 250.96
Amortisation Expenses, Extraordinary
Items & Tax Expenses
Less : Depreciation and Amortisation 130.51 116.16
Expenses
Profit before Extraordinary Items and 236.29 134.80
Tax Expenses
Add : Extraordinary Items 251.80 0.00
Profit Before Tax 488.09 134.80
Less : Current Tax 85.15 26.84
Add: MAT Credit Entitlement (31.29) (26.84)
Profit for the year 434.23 134.80
Balance of Profit brought forward 450.12 314.42
Add : Profit of Amalgamated Company 1.62 0.00
Less: Amount transferred to Statement of 56.31 0.00
Profit and Loss on account of Amalgamation
Add: Transfer from Debenture Redemption 0.00 0.90
Reserve
Balance available for appropriation 829.66 450.12
Less : Appropriation :
Proposed Dividend on Equity Shares 25.80 0.00
Tax on Dividend 4.19 0.00
Closing Balance 799.67 450.12
2. OPERATIONS
The Financial year 2011-12 was extremely challenging year for our
company. The year was characterized by global slowdown, weak retail
demand at home, high volatility in cotton prices and foreign exchange
and higher interest cost. It is satisfying to note that in the backdrop
of such a challenging environment, our Company has closed the financial
year 2011-12 with 30% growth in sales and 28% growth in Operating
Earnings before Interest Depreciation and Taxes (Operating EBITDA). PAT
(excluding Exceptional Income) has shown a growth of 75% compared to
the previous year.
A detailed analysis of the financial results is given in the Management
Discussions and Analysis report which forms part of this report.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 1 per equity
share of Rs.10 each.
4. FINANCE
During the year, the Company has repaid the installments of Term Loans
amounting to Rs. 401 crores falling due during the current year. The
Company has also made fresh borrowings of Rs. 223 Crores for funding
capital expenditure and other requirements. Long Term Debt including
lease of the Company stands to Rs. 829 crores as on 31st March, 2012.
5. EMOLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme- (ESOS) to
grant equity based incentives to certain eligible employees and
directors of the Company and its subsidiary companies. 27.50 lacs and
2.00 lacs options were granted to certain eligible employees and
directors of the company and its subsidiary companies by the
Remuneration Committee at an exercise price of Rs.14.65 per option and
Rs.73.70 per option respectively, representing one share for each option
upon exercise. The details as per the requirements of SEBI Guidelines
are annexed and form part of this report.
6. SUBSIDIARIES
A detailed discussion on subsidiary companies and their performance
during the year is contained in the Management Discussion and Analysis
Report which forms part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, the Company has prepared Consolidated
Financial Statements of the Company and its subsidiaries are included
in the Annual Report.
In view of the closure of business, the accounts of Arvind Overseas
(Mauritius) Limited and Arvind Spinning Limited have not been prepared
on the going on concern basis. Arvind Textile Mills Limited has not
commenced its business. Hence, the accounts of these subsidiary
companies have not been consolidated with accounts of the company as
per the provisions of the Accounting Standard 21 relating to
consolidation of accounts.
7. DIRECTORS
Export-Import Bank of India has nominated Mr. Prabhakar Dalal as its
Nominee Director on the Board of the Company in place of Mr. R. W.
Khanna with effect from 29th April, 2011. The Board places on record its
deep sense of appreciation for the valuable services rendered by Mr. R.
W. Khanna during his tenure as Director.
At the ensuing Annual General Meeting, Mr. Jayesh Shah and Mr. Munesh
Khanna, Directors of the Company, retire by rotation, but being
eligible, offer themselves for re-appointment.
8. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance and a Management Discussion
and Analysis Report are being published as a part of the Annual Report
of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are
complied by the Company and their Certifcate is annexed to the Report
on Corporate Governance.
9. RESPONSIBILITY STATEMENT
The Directors confrm that:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no material
departures from the applicable accounting standards;
2. such accounting policies have been selected and applied
consistently and such judgments and estimates have been made as are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended on 31st
March, 2012 and of the profit of the Company for that period;
3. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. the statements of accounts for the year ended on 31st March, 2012
have been prepared on a going concern basis.
10. FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the year.
There are no outstanding and overdue deposits as at 31st March, 2012.
11. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended from time to time, forms part of this report.
However, as per the provisions of Section 219 (1)(b) (iv), the report
and accounts are being sent to all shareholders of the Company
excluding the information relating to conservation of energy,
technology absorption and foreign exchange earning and outgo, and the
statement of particulars of employees. Any shareholder interested in
obtaining such particulars may inspect the same at the Registered Office
of the Company or write to the Secretary for a copy.
12. AUDITORS
The Auditors, Sorab S. Engineer & Co., retire and offer themselves for
re-appointment. It is proposed that Sorab S. Engineer & Co., be re-
appointed as auditors of the Company. You are requested to appoint the
auditors and fix their remuneration.
13. ACKNOWLEDGEMENT
Your Directors would like to appreciate the eforts of the Company's
employees for their continued co-operation and unstinted support
extended to the company. The support of all lenders including Financial
Institutions, Commercial Banks, Overseas Banks and vendors and buyers
has also been invaluable to the Company's performance and your
Directors take this opportunity to appreciate it deeply.
By Order of the Board
Date : 9th May, 2012 SANJAY S. LALBHAI
Place: Ahmedabad. CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2011
To the Members,
The Directors are pleased to present the Annual Report alongwith the
Audited Financial Statements for the period from 1st April, 2010 to
31st March, 2011.
1. FINANCIAL PERFORMANCE :
The highlights of the financial results are:
Rs. in lacs
Particulars 2010-2011 2009-2010
Turnover and other income 62060.51 47651.03
Profit before depreciation, interest
and taxation 5275.13 5141.54
Less: Interest & Finance Cost (Net) 2121.61 2322.24
Less: Depreciation 3113.19 3623.07
Profit / (Loss) before tax 40.33 (803.77)
Deferred Tax - (1210.49)
Profit / (Loss) for the year 40.33 406.72
Balance as per last year's
Balance Sheet (6320.59) (6727.31)
Balance carried to Balance Sheet (6280.26) (6320.59)
2. OPERATIONS :
A detailed discussion is carried out in the relevant section in
Management Discussion and Analysis appended elsewhere in the Annual
Report.
3. DIVIDENDS :
Your Directors do not recommend dividend on Preference Shares or Equity
Shares for the period under review, considering carried forward losses
of the Company.
4. DIRECTORS :
Mr. Vinod D. Modha and Mr. K. I. Patel, the Directors of the Company
retire by rotation at the ensuing Annual General Meeting and they,
being eligible, offer themselves for reappointment.
5. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance and a Management Discussion
and Analysis Report are being published as a part of the Annual Report
of the Company.
The Auditors of the Company have certifi ed that conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement are complied by the Company and their Certifi cate is annexed
to the Report on Corporate Governance.
6. RESPONSIBILITY STATEMENT :
The Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no material
departures from the applicable accounting standards.
2. Such accounting policies have been selected and applied
consistently and such judgments and estimates have been made as are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and Profit
of the Company for the year.
3. Proper and sufficient care have been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. The attached statements of accounts for the period ended on 31st
March, 2011 have been prepared on a going concern basis.
7. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES :
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended from time to time, form part of this report.
However, as per the provisions of Section 219(1)(b)(iv), the report and
accounts are being sent to all shareholders of the Company excluding
the information relating to conservation of energy, technology
absorption and foreign exchange earning and outgo and the statement of
particulars of employees. Any shareholder interested in obtaining such
particulars may inspect the same at the Registered Office of the
Company or write to the Secretary for a copy.
8. AUDITORS :
The Auditors, Sorab S. Engineer & Co., Chartered Accountants, retire
and offer themselves for reappointment. It is proposed that Sorab S.
Engineer & Co., Chartered Accountants, be reappointed as Auditors of
the Company. You are requested to appoint the Auditors and fix their
remuneration.
The specifi c notes forming part of the Accounts referred to in the
Auditors' Report are self-explanatory and give complete information.
9. ACKNOWLEDGEMENT :
Your Directors would like to appreciate the efforts of the Company's
employees for their continued co-operation and unstinted support
extended to the Company. The support of all lenders including Financial
Institutions, Commercial Banks, Overseas Banks, Vendors and buyers has
also been invaluable and your Directors take this opportunity to
appreciate it deeply.
By Order of the Board
Place : Ahmedabad ANANG A. LALBHAI
Date : 14.05.2011 Chairman and Managing
Director
Mar 31, 2010
The Directors are pleased to present the Annual Report alongwith the
Audited Financial Statements for the period from 1st April 2009 to 31st
March, 2010.
1. FINANCIAL PERFORMANCE :
The highlights of the financial results are:
Rs. in lacs
2009-2010 2008-2009
Turnover and other income 47615.48 38918.62
Profit before depreciation, interest
and taxation 5141.54 4112.66
Less: Interest & Finance Cost (Net) 2322.24 2909.48
Less: Depreciation 3623.07 3496.75
Profit / (Loss) before tax (803.77) (2293.57)
Fringe Benefit Tax - 17.85
Deferred Tax (1210.49) -
Profit / (Loss) for the year 406.72 <2311.42)
Balance as per last years Balance Sheet (6727.31) (4234.35)
Add: Adjustment of Exchange Rate Difference - 181.54
Balance carried to Balance Sheet (6320.59) (6727.31)
2. OPERATIONS :
A detailed discussion is carried out in the relevant section in
Management Discussion and Analysis appended elsewhere in the Annual
Report.
3. DIVIDENDS :
Your Directors do not recommend dividend on Preference Shares or Equity
Shares for the period under review, considering carried forward losses
of the Company.
4. DIRECTORS :
Mr. Naishadh I. Parikh and Mr. Shreyas C. Sheth, the Directors of the
Company retire by rotation at the ensuing Annual General Meeting and
they, being eligible, offer themselves for reappointment.
Mr. Jayesh K. Shah has been appointed by the Board as an Additional
Director at the meeting of the Board of Directors held on 25th January,
2010 and holds the office upto the date of this ensuing Annual General
Meeting. The Company has received notice in writing Under Section 257
from a member proposing his candidature as Director.
5. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate Governance
and has taken adequate steps to ensure that the requirements of
Corporate Governance as laid down in Clause 49 of the Listing Agreement
are complied with.
A separate report on Corporate Governance and a Management Discussion
and Analysis Report are being published as a part of the Annual Report
of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are
complied by the Company and their certificate is annexed to the Report
on Corporate Governance.
6. RESPONSIBILITY STATEMENT :
The Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no material
departures from the applicable accounting standards.
2. Such accounting policies have been selected and applied
consistently and such judgments and estimates have been made as are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and Profit
of the Company for the year.
3. Proper and sufficient care have been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. The attached statements of accounts for the period ended on 31st
March, 2010 have been prepared on a going concern basis.
7. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES :
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended from time to time, form part of this report.
However, as per the provisions of Section 219(1)(b)(iv), the report and
accounts are being sent to all shareholders of the Company excluding
the information relating to conservation of energy, technology
absorption and foreign exchange earning and outgo and the statement of
particulars of employees. Any shareholder interested in obtaining such
particulars may inspect the same at the Registered office of the
Company or write to the Company for a copy.
8. AUDITORS :
The Auditors, Sorab S. Engineer & Co., Chartered Accountants, retire
and offer themselves for reappointment. It is proposed that Sorab S.
Engineer & Co., Chartered Accountants, be reappointed as Auditors of
the Company. You are requested to appoint the Auditors and fix their
remuneration.
The specific notes forming part of the Accounts referred to in the
Auditors Report are self-explanatory and give complete information.
9. ACKNOWLEDGEMENT :
Your Directors would like to appreciate the efforts of the Companys
employees for their continued co-operation and unstinted support
extended to the Company. The support of all lenders including Financial
Institutions, Commercial Banks, Overseas Banks, Vendors and buyers has
also been invaluable and your Directors take this opportunity to
appreciate it deeply.
By Order of the Board
Place : Ahmedabad ANANG A. LALBHAI
Date : 25th May, 2010 Chairman and Managing Director
Sep 30, 2001
The Directors present the Annual Report alongwith the Audited
Financial Statements for the period from 1st April, 2000 to 30th
September, 2001.
FINANCIAL RESULTS :
The highlights of the financial results are:
(Rs. in lacs)
2000-2001 1999-2000
(18 months)
Turnover and other income 54136.87 44659.55
Profit/(Loss) before
depreciation,
interest, taxation and
Extraordinary items 5484.14 6759.84
Less: Interest & Finance
Cost (Net) 8045.61 4801.09
Less: Depreciation 6859.74 4360.97
Profit/(Loss) before tax and
extraordinary items (9421.21) (2402.22)
Less: Extraordinary Items -
Income (Expenses) 592.48 (347.69)
Less: Taxation - -
Profit/(Loss) for the year (8828.73) (2749.91)
Less: Short provision
for income-tax in earlier years à 0.09
Add: Deficit of post amalgamated period à (8.81)
Add : Transferred from
Amalgamation
Reserve 5574.25 Ã
Add : Transferred from General Reserve 1418.44 Ã
Add : Balance as per
last years
Balance Sheet 1836.04 (7.13)
Add : Balance of Profit & Loss Account
of amalgamated companies à 4601.98
Balance carried to Balance Sheet à 1836.04
The Companys financial year has been extended by a period of 6 months
i.e. upto 30th September, 2001. Accordingly, the financial year
2000-2001 comprises of a period of 18 months from 1st April, 2000 to
30th September, 2001. Hence the figures of the financial year under
review are not comparable with those of previous year. DIVIDENDS:
In view of the losses incurred during the year, your Directors have not
recommend any dividend on equity and preference shares for the year.
OPERATIONS :
Sales and Operating Income for the 18 months period ended 30th
September, 2001 were Rs. 53880 lacs as compared to Rs. 44399 lacs for
the 12 months ending on 31st March, 2000. Operating Profit (EBIDTA) for
the period ended 30th September, 2001 is Rs. 5227 lacs compared to Rs.
6499 lacs in the year ended 31st March, 2000.
The net loss increased to Rs. 8829 lacs for the period ended 30th
September, 2001 as compared to net loss of Rs. 2750 lacs in the year
ended 31st March, 2000. Interest & Finance Charges were Rs. 8045 lacs
and Depreciation was Rs. 6860 lacs for the period ended 30th September,
2001. The Company has incurred a Cash Loss of Rs. 2561 lacs during this
period. The Company has four separate manufacturing units. Arvind
Intex and Arvind Cotspin are yarn manufacturing units. Bottom weights
unit is engaged in manufacturing of cotton fabrics like Gabardine,
Khakis, Chinos, etc. for trousers. Ankur textiles is engaged in
manufacturing of Voiles. Share of Arvind Intex and Arvind Cotspin in
total revenue was 21% at Rs. 11540 lacs and 20% at Rs. 10830 lacs
respectively. Bottom weights unit contributes highest share of revenue
of 31% at Rs. 16910 lacs and Ankur unit has a share of 25% at Rs. 13590
lacs.
Both the yarns units have operated at optimum level during the period
under review. However general slowdown of textile industry has affected
their profitability. The operations of Arvind Intex are carried out on
job-work basis, which has resulted into reduction of revenue for the
unit and for the company. However it has recorded higher operating
profit margin at 18%. Ankur division operated at almost full capacity
utilisation with production of 25.15 million meters. The price
realisation improved to Rs. 46.20 per meter from Rs. 42.8 meter
previous year.
The Bottom weight division, which was commissioned in April, 1999
operated at capacity utilisation of 66% with production of 17.84
million meters during the period under review as against 12.2 million
meters during the previous year. Its price realisation at Rs. 85.87 per
meter was lower than that of previous year. There is substantial scope
of improvement in the performance of this division. Bottom weight
division is following a 3-fold strategy for a growth. This calls for
Segmentation of markets, Differentiating products & services and
development of new products. This strategy coupled with sizable orders
from export markets and international brands are expected to be the key
drivers for future growth.
STATUS OF DEBT RESTRUCTURING:
In view of its financial difficulties, the Company has initiated a
process of debt restructuring with its lenders. The debt restructuring
plan proposed by the Company to its lenders involves reschedulement of
repayment terms, reduction of rate of interest, etc. Certain lenders of
the Company have approved the debt restructuring plan, one of them has
preferred to go in for a one-time settlement while the approval of few
lenders is still awaited. The effect of debt restructuring is provided
in the accounts under review for those lenders who have conveyed their
approval to the debt restructuring plan.
The Company has been declared as a Relief Undertaking under the
provisions of the Bombay Relief Undertakings (Special Provisions) Act,
1958 whereby all rights, privileges, obligations and liabilities
occurred or incurred before it is declared as a Relief Undertaking and
any remedy for the enforcement thereof are suspended and all
proceedings relating thereto pending before any Court, Tribunal,
Officer or Authority are stayed during the period of this declaration.
This declaration is in force upto 12th June, 2002.
STATUS OF LISTING:
After amalgamation, Company obtained permission from SEBI for
relaxation of Rule 19(2)(b)/19(7) of the Securities Contracts
(Regulations) Rules, 1957 pursuant to which it applied for listing with
Ahmedabad, Mumbai, Bangalore, Delhi, Calcutta and National Stock
Exchange. Company has received listing permission from all the above
Stock Exchanges except National Stock Exchange.
On receipt of listing permission from all Stock Exchanges, trading
permission will be given simultaneously by all the Stock Exchanges.
DIRECTORS:
Shri Anang A. Lalbhai, a Director of the Company, retires by rotation
at the ensuing Annual General Meeting and he, being eligible, offers
himself for re-appointment.
RESPONSIBILITY STATEMENT :
The Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no material
departures from the applicable accounting standards.
2. Such accounting policies have been selected and applied
consistently and such judgements and estimates have been made as are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended on
30th September, 2001 and of the loss of the Company for that period.
3. Proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. The attached statement of accounts for the year ended on September
30, 2001 have been prepared on a going concern basis.
INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES:
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217(2A) of
the Companies Act, 1956 read with Companies [Particulars of Employees]
Rules, 1975, as amended from time to time, form part of this report.
However, as per the provisions of Section 219(1)(b)(iv), the report and
accounts are being sent to all shareholders of the Company excluding
the information relating to conservation of energy, technology
absorption and foreign exchange earning and outgo, and the statement of
particulars of employees. Any shareholder interested in obtaining such
particulars may inspect the same at the Registered Office of the
Company or write to the Secretary for a copy.
AUDITORS:
The Auditors, Sorab S. Engineer & Co., retire and offer for
re-appointment. It is proposed that Sorab S. Engineer & Co., be
re-appointed as Auditors of the Company. You are requested to appoint
the Auditors and fix their remuneration. The specific notes forming
part of the Accounts referred to in the Auditors Report are
self-explanatory and give complete information.
ACKNOWLEDGEMENT:
Your Directors appreciate the valuable assistance and support extended
by the Financial Institutions and the Bankers to the Company. Yours
Directors place on record their appreciation of the efforts of the
management, the officers and members of technical, administrative and
operative staff in furthering the activities of the Company.
For and on behalf of the Board of Directors
ARVIND N. LALBHAI
Chairman & Managing Director
Ahmedabad,
11th February, 2002
Mar 31, 2000
The Directors present the Annual Report alongwith the audited
financial statements for the year ending 31 st March, 2000.
FINANCIAL RESULTS :
The highlights of the financial results are :
(Rs. in lacs)
1999-2000
Turnover and other income 44685.42
Profit/(Loss) before depreciation
interest and taxation and
Extraordinary items 6359.69
Less : Net Interest 4400.94
Less : Depreciation 4360.97
Profit/(Loss) before tax and extraordinary items (2402.22)
Less : Extraordinary Items 347.69
Less : Taxation Ã
Profit/(Loss) for the year (2749.91)
Less : Short provision for income-tax in earlier years 0.09
Add : Balance as per last years balance sheet (7.13)
Add : Deficit for the year from 1.10.1998
to 31.3.1999-Post Amalgamation (8.81)
Add : Balance of Profit & Loss
Account of amalgamated companies. 4601.98
Balance carried to Balance Sheet 1836.04
DIVIDENDS :
In view of the losses incurred during the year, your Directors do not
recommend any dividend on equity and preference shares for the year.
REVIEW OF OPERATIONS :
By the Order of the Honble High Court of Gujarat, Arvind Polycot
Limited (APL), Arvind Intex Limited (AIL) and Arvind Cotspin Limited
(ACL) were amalgamated with the Company and therefore the turnover
shown in the accounts for the year relate to businesses of these
amalgamated companies. The total sales and operating income for the
year ended 31.3.2000 were Rs. 44685.42 lacs and the Company earned an
operating profit of Rs. 6359.69 Lacs. Bottomline of the Company was
adversely affected because of sharp rise in input costs, high charge of
interest and depreciation and lower price realisations.
The voiles business achieved a turnover of Rs.9451 lacs against Rs.
6990 lacs in the previous year, a growth of over 35%. This growth was
largely achieved by increased trading. The volume of business grew by
37% compared to the previous year. The price realization, however, was
lower at Rs. 42.8 per meter against Rs. 43.3 per meter in the previous
year. The market for voiles continues to be competitive. The new
facility for manufacture of Bottom Weight (Gabardine) at Santej was
commissioned on 1st April, 1999 and achieved a capacity utilization of
67% during the year, by producing 12.2 million meters against the
installed capacity of 18 million meters per annum. The average
realization per meter was also lower as the company faced initial
quality issues leading to higher rejects and quality claims. The
quality issue was resolved during the latter part of the year. The
company has achieved a turnover of Rs. 11780 lacs for this business
with an average price realization of Rs. 92.9 per meter.
Your company has been able to operate both its yarn Divisions at Arvind
Intex and Arvind Cotspin at full capacity during the year under review
and they have achieved turnover of Rs. 17437.20 lacs and Rs. 8395.52
lacs respectively. The recession in the textile industry, however, has
resulted in lower price realization of Rs.80.93 per kg. for its Intex
Division as compared to Rs. 87.22 per kg. in the previous year and Rs.
110.35 per kg. for its Cotpsin Division as compared to Rs. 113.05 per
kg. in the previous year.
AMALGAMATION :
During the year under review, the Honble High Court of Gujarat vide
its Order dated 6.12.1999 sanctioned the Scheme of Amalgamation of
Arvind Polycot Ltd. (APL), Arvind Intex Limited (AIL) and Arvind
Cotspin Limited (ACL) with the Company with effect from 1st October,
1998. As a result of amalgamation, all the assets and liabilities as
at 1 st October, 1998 of APL, AIL and ACL have been incorporated in the
accounts of the Company.
Prior to the amalgamation of APL, AIL and ACL with the Company, the
Company had no activities except investments and therefore the figures
for the year, which are post amalgamation, are not comparable with the
figures of the previous year.
Erstwhile Transferor Companies APL, AIL and ACL had carried on
businesses on behalf of the Company during the post amalgamation
period from 1.10.1998 til! 03.01.2000. Since the post amalgamation
period from 1.10.1998 to 31.3.1999 was preceding current accounting
year, the deficit of Rs. 8.81 lacs for the period has been considered
during the current year and debited to the Profit & Loss Account for
the year.
Capital Reserve of Rs. 30 lacs. General Reserve of Rs. 1523.68 lacs,
Investment Allowance Reserve of Rs.3.50 lacs and Investment Allowance
(Utilized Reserve) of Rs. 91 lacs have become the corresponding
reserves of the Company. The balance lying to the credit of the Profit
and Loss Account in the books of amalgamating companies as at 1st
October, 1998 being Rs. 4601.98 lacs have been credited to Profit and
Loss Account. The net surplus arising out of the difference between the
value of net assets acquired and consideration as reduced by reserves
and Profit and Loss Account retained amounting to Rs. 5574.25 lacs has
been credited to the Amalgamation Reserve.
ALLOTMENT OF SHARES :
Pursuant to the Scheme of Amalgamation approved by the Honble High
Court of Gujarat, your Company has allotted 8,09,39,988 equity shares
of Rs. 10/- each fully paid-up and 60,00,000 -13.5% Cumulative
Redeemable Preference Shares of Rs. 100/- each to the shareholders of
the Transferor Companies. The paid-up equity capital of the Company has
been restructured as per the Scheme of Amalgamation by issuance of
1,35,000 - 10% Cumulative Redeemable Preference Shares of Rs. 10/- each
and 15,000 equity shares of Rs. 10/- each to the equity shareholders of
the Company in exchange of their equity holding.
Asman Investments Ltd. holds 70.55% of equity shares of the Company.
The Company, therefore, has become a subsidiary of the said Company.
LISTING OF EQUITY SHARES :
On amalgamation becoming effective, your Company had approached
Securities and Exchange Board of India (SEBI) for necessary permission
for listing of its securities. SEBI has granted such permission for
listing of its securities. Your Company has made an application to the
Ahmedabad Stock Exchange for listing. The listing with other Stock
Exchanges will be sought after obtaining listing with Ahmedabad Stock
Exchange.
DIRECTORS :
Shri Samveg A. Lalbhai, the Director of the Company retires by rotation
at the ensuing Annua! General Meeting and he, being eligible, offers
himself for re-appointment.
INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES :
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 and under Section 217 (2A) of
the Companies Act, 1956 read with Companies [Particulars of Employees]
Rules, 1975, as amended from time to time, form part of this report.
However, as per the provisions of Section 219 (1) (b) (iv), the report
and accounts are being sent to all shareholders of the Company
excluding the information relating to conservation of energy,
technology absorption and foreign exchange earning and outgo, and the
statement of particulars of employees. Any shareholder interested in
obtaining such particulars may inspect the same at the Registered
Office of the Company or write to the Secretary for a copy.
AUDITORS :
The Auditors, Sorab S. Engineer & Co., retire and offer for re-
appointment. It is proposed that Sorab S. Engineer & Co., be re-
appointed as Auditors of the Company. You are requested to appoint the
Auditors and fix their remuneration.
The specific notes forming part of the Accounts referred to in the
Auditors Report are self-explanatory and give complete information.
ACKNOWLEDGEMENT
Your Directors appreciate the valuable assistance and support extended
by the Financial Institutions and the Bankers to the Company. Yours
Directors place on record their appreciation of the efforts of the
management, the officers and members of technical, administrative and
operative staff in furthering the activities of the Company.
For and on behalf of the Board of Directors
ANANG LALBHAI NAISHADH I. PARIKH
Managing Director Director
Ahmedabad,
29th June, 2000
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