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Updated:05 Jun, 2020, 16:03 PM IST

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Updated:05 Jun, 2020, 16:01 PM IST


To the Members,

Your Directors are pleased to present the Annual Report along with the Audited Financial Statements for the period from 1st April, 2015 to 31st March, 2016.


During FY2015–16, the global consumer markets were characterized by a combination of steady US, weakening China and uncertain Europe. Consumer demand in the US continued to be buoyant based on net job additions and continuing recovery in house prices. Europe continues to grapple with multiple issues surrounding EU's strength and stability – while the year 2015 started with promise of improved consumer outlook, the actual performance in several large markets like France, and perceived impact of Chinese meltdown dragged down the outlook by second half of the year. In India, despite the weak monsoons and continuing challenges faced by the government on policy front, the economy delivered a healthy growth of 7.5% with promise of increasing momentum for the following year. The eagerly awaited GST did not get passed for implementation by April 2016. Crude oil and commodity prices continued to be soft helping the inflation to be under control and enabling RBI continued to ease up the interest rates and money supply. Consumer spending outlook started to look more positive as the year progressed.

In this backdrop, your company closed the financial year 2015–16 with 8% growth in Revenue and 5% growth in the Operating Earnings before Interest, Depreciation and Taxes (EBITDA). Profit before Tax (PBT) grew by 5% over the previous year. Revenue growth was powered by16% growth in Brand & Retail Segment.

A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report.


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, 2016. The dividend, if approved by the members, would involve a cash outflow of Rs. 74.60 crores (inclusive of tax on dividend).


During the year under review, the Company has not transferred any amount to reserves.


The paid up equity share capital of the Company as on March 31, 2016 was Rs. 258.24 crores. During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.


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 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 Annexure –A to this report.


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.


The Company has repaid the installments of Term Loans amounting to Rs.255 crores during the current year.

The Company has also made fresh borrowings of Rs.438 Crores for funding capital expenditure and other requirements. Long Term Debt of the Company stands to Rs. 1601 crores as on 31st March, 2016.


The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. Hence, the requirement for furnishing details of deposits, which are not in compliance with the Chapter V of the Act, is not applicable.


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.


Arvind Limited has been actively undertaking "Corporate Social Responsibility" (CSR) initiatives. The initiatives are driven through two Trusts – Strategic Help Alliance for Relief to Distressed Areas – SHARDA Trust undertakes CSR programs in urban areas and Narottam Lalbhai Rural Development Fund (NLRDF) works for development in rural areas.

During 2015– 16, the Company established Arvind Foundation, a Section 8 Company, to act as the umbrella organization to streamline all our CSR efforts.

Initiatives undertaken by SHARDA Trust:

SHARDA Trust has been providing educational support to the students of Municipal schools in Ahmedabad since 2006. It is a comprehensive education program impacting the students of class 5–12 and college students to pursuing professional degrees. The program aims at increasing the attendance, academic performance, increase retention and bring about positive behavioral changes in students. The impact assessment study conducted in 2015–16 reiterates that we have been successful in achieving our objectives. We plan to increase the reach from current about 1300 to 6600 students by the year 2020.

SHARDA Trust also conducted personality development programs (Basic English, Computer familiarization and musical instruments) for the youth of Ahmedabad with an objective to enhance their employability. In 2015–16, 169 youth participated in our programs.

Last year SHARDA Trust signed an MOU with Swasth India to set up Primary Health Centres in Ahmedabad. These centres will be one stop solutions for all primary medical needs of people. We plan to set up 3 primary health centres in various parts of Ahmedabad during 2016–17 and after testing it for a year or so, if successful, we plan to set up more centres across urban and rural set up.

In 2015–16, we also completed a Need Assessment Study of 6 villages in Santej Taluka of Gandhinagar and Dholka Taluka of Ahmedabad district using various participatory rural appraisal tools. A plan is being made to initiate appropriate interventions during 2016–17.

Initiatives undertaken by NLRDF:

NLRDF is currently working in 5 districts of Gujarat and Akola district of Maharashtra.

NLRDF conducted awareness programs on HIV/AIDS and sexually transmitted diseases for 8480 industrial workers in Dahej industrial area of Bharuch district. 209 health camps were organized which benefitted 4873 workers. External evaluation of these two programs has rated our performance as very good.

NLRDF organized 10 entrepreneurship trainings for marginalised women (250 widows) of Ahmedabad and Surat and motivated them to set up enterprises for livelihood generation.

NLRDF implemented a program to promote maternal and infant health in 136 villages of Khedbrahma in Sabarkantha district in Gujarat. 2034 pregnant women, 2672 lactating women and 2113 under nourished children were covered under various services.

NLRDF built sanitation blocks for school girls in Village Pratappura of Kalol Taluka. The sanitation blocks benefit 120 girl students.

NLRDF conducted free of cost coaching class and provided library for preparation of Competitive examination for Government job for schedule cast and schedule tribe students in the campus of Sarva Vidyalaya Education Campus, Kadi, Dist. Mehsana. 120 students have benefitted from the program during last year.

NLRDF conducted an Entrepreneurship Development Program on Food Processing Industries benefitting 30 entrepreneurs. After 3 months, 21 participants have started their business related to food processing.

Various workshops were organized in the field of animal husbandry and organic farming for the benefit of the farmer community. 147 participants benefitted from these workshops.

National Heritage, Art and Culture:

The company decided to support a project titled "Promotion of Indology." The project is undertaken by the Lalbhai Dalpatbhai Bhartiya Sanskriti Vidyamandir (LDBSV) that has a credible history of working in this field. The project aims to work on maintenance and restoration of old manuscripts as well as education and research in the field of Indology. As it is a continuing effort, it requires constant funding, an additional corpus grant of Rs. 1.00 Crore was given to LDBSV. This now makes the Arvind corpus grant to LDBSV for the said project to Rs. 2.00 Crores as during 2014–15 too a corpus grant of Rs. 1.0 Crore was given.

The Annual Report on CSR ACTIVITIES in prescribed format is enclosed with this in Annexure–B.


The Company believes that Human Resources will play a significant role in its future growth. With an unswerving focus on nurturing and retaining talent, the Company provides avenues for learning and development through functional, behavioral and leadership training programs, knowledge exchange conferences, communication channels for information sharing to name a few.

The Group's Corporate Human Resources plays a critical role in company's talent management process.


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 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 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 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.


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 ( ).


As on 31st March, 2016, the Company has 21 subsidiaries (Direct or Indirect) and 5 joint venture companies.

During the year under review, the Company had incorporated the following subsidiaries (Direct or Indirect):

1. Westech Advanced Materials Ltd., Canada (Subsidiary of the Company).

2. Arvind Enterprise (FZE), Sharjah, U.A.E. (Subsidiary of the Company).

3. Arvind Beauty Brands Retail Private Limited (Subsidiary of the Arvind Brands & Retail Limited which is a subsidiary of the Company).

4. Arvind Foundation (Subsidiary of the Company).

During the year under review, the following subsidiaries ceased to be the subsidiaries of the Company.

1. Arvind Infrastructure Limited

2. Arvind Hebbal Homes Pvt. Ltd.

3. Arvind Worldwide (M) Inc. Mauritius

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  

The Company has framed a policy for determining material subsidiaries, which has been uploaded on company's website www.  


The Consolidated Financial Statements of the Company prepared in accordance with the applicable Accounting Standards form part of this Annual Report.


The Board of Directors consists of 10 members, of which six are Independent Directors. The Board also comprises of one women Director.

Pursuant to Section 149 of the Companies Act, 2013, Mr. Samir Mehta (holding DIN 00061903) and Mr. Nilesh Shah (holding DIN 01711720) were appointed as Independent Directors of the Company in the Annual General Meeting (AGM) held on 6th August, 2015. The Independent Directors were appointed for a period of 5 consecutive years from their appointment dates. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Companies Act, 2013. All Independent Directors have furnished the declarations of independence stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As per the provisions of Section 152 (6) of the Act, Mr. Kulin Lalbhai (DIN 05206878) 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.

The Board of Directors had, on recommendation of Nomination and Remuneration Committee, reappointed Mr. Sanjay Lalbhai as the Chairman and Managing Director of the Company for a further period of 5 years from 1st April, 2017 to 31st March, 2022 and approved the remuneration payable to him 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.


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.


The Board has, on the recommendation of the Nomination & 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.



In compliance with the requirements of SEBI Regulations, 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. The same is also available on the website of the Company .


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.


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, 2016, 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 madejudgments 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.


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 Listing 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 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 .>


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.


A. Statutory Auditors

Sorab S. Engineer & Co. Chartered Accountants, (ICAI Registration No.110417W), the Statutory Auditors of the Company, will hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re–appointment as per Section 139 of the Companies Act, 2013.

Sorab S. Engineer & Co. have expressed their willingness to get re–appointed as the Statutory Auditors of the Company and has furnished a certificate of their eligibility and consent under Section 141 of the Companies Act, 2013 and the rules framed there under. In terms of the Listing Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI. The Board, based on the recommendation of the Audit Committee, recommends the appointment of Sorab S. Engineer & Co. as the Statutory Auditors of the Company.

The members are requested to appoint Sorab S. Engineer & Co., Chartered Accountants as Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to authorize the Board to fix their remuneration.

Further, the report of the Statutory Auditors along with notes to Financial Statements is enclosed to this report. The observations made in the Auditors' Report are self–explanatory and therefore do not call for any further comments.

B. Cost Auditors

The cost audit records maintained by the Company in respect of its textiles and telecommunication products are required to be audited pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014. Your Directors have, 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 2016­17 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. 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 2015–16. The Secretarial Audit Report is annexed herewith as "Annexure–C". The Secretarial Audit Report does not contains any qualifications, reservation or adverse remarks.


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.


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.


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".


The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure –E".


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 (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure–F to this report.


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 2015–16, the company has received 1 (one) complaint on sexual harassment and has dealt with it as per the policy guidelines and ICC recommendations in a fair and just manner.


Pursuant to Regulation 7 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, equity shares of the Company have been voluntarily delisted from the Ahmedabad Stock Exchange Limited ("ASEL") with effect from 23rd December, 2015 as there was no trading facility available on ASEL since so many years. Neither the Company nor any shareholder was being benefited in any manner due to continued listing on ASEL. However, your Company's equity shares will continue to be listed on BSE Limited and National Stock Exchange of India Ltd, having nationwide terminals. There was no change in the capital structure of the Company post delisting from ASEL.


The Board expresses its sincere thanks to all the employees, customers, suppliers, investors, lenders, regulatory and government authorities and stock exchanges for their support.

By order of the Board

Sanjay Lalbhai

Chairman and Managing Director

Date: May 12, 2016

Place: Ahmedabad

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