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Arvind Ltd.

BSE: 500101 Sector: Industrials
NSE: ARVIND ISIN Code: INE034A01011
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OPEN 350.95
PREVIOUS CLOSE 348.80
VOLUME 175258
52-Week high 423.60
52-Week low 235.90
P/E 25.07
Mkt Cap.(Rs cr) 9120.11
Buy Price 353.00
Buy Qty 19.00
Sell Price 353.15
Sell Qty 75.00
OPEN 350.95
CLOSE 348.80
VOLUME 175258
52-Week high 423.60
52-Week low 235.90
P/E 25.07
Mkt Cap.(Rs cr) 9120.11
Buy Price 353.00
Buy Qty 19.00
Sell Price 353.15
Sell Qty 75.00

Arvind Ltd. (ARVIND) - Director Report

Company director report

To the Members

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

1. FINANCIAL RESULTS

Highlights of Financial Results for the year are as under:

Rs in Crores
2015-2016 2014-2015
Turnover & Operating Income 5407.26 5224.69
Profit before Finance Costs Depreciation 914.68 955.44
and Amortisation Expenses
Extraordinary Items & Tax Expenses
Less : Finance costs 311.13 320.06
Profit before Depreciation and 603.55 635.38
Amortisation Expenses Extraordinary
Items & Tax Expenses
Less : Depreciation and Amortisation Expenses 146.60 125.83
Profit before Extraordinary Items and 456.95 509.55
Tax Expenses
Less : Exceptional Items 7.95 31.93
Profit Before Tax 449.00 477.62
Less : Current Tax 95.99 100.82
Less : Deferred Tax 23.41 68.87
Add: MAT Credit Entitlement 10.75 (15.64)
Excess Provision of Earlier Year Written Back NIL (53.86)
Profit for the year 318.85 377.43
Profit from Ordinary Activities after tax 318.85 376.86
(Continuing Operations)
Profit from Ordinary Activities after tax 0.00 0.57
(Discontinuing Operations)
Profit for the year 318.85 377.43
Balance of Profit brought forward 1543.73 1245.33
Balance available for appropriation 1862.58 1622.76
Less : Appropriation :
Transfer to General Reserve 0.00 0.00
Additional dividend on Equity Shares 0.00 0.01
Dividend distribution tax on additional dividend on Equity Shares 0.00 0.001
Proposed Dividend on Equity Shares 61.98 65.85
Tax on Dividend 12.62 13.17
Closing Balance 1787.98 1543.73

2. OPERATIONS

During FY2015-16 the global consumer markets were characterized by a combination ofsteady US weakening China and uncertain Europe. Consumer demand in the US continued to bebuoyant based on net job additions and continuing recovery in house prices. Europecontinues to grapple with multiple issues surrounding EU’s strength and stability– while the year 2015 started with promise of improved consumer outlook the actualperformance in several large markets like France and perceived impact of Chinese meltdowndragged down the outlook by second half of the year. In India despite the weak monsoonsand continuing challenges faced by the government on policy front the economy delivered ahealthy growth of 7.5% with promise of increasing momentum for the following year. Theeagerly awaited GST did not get passed for implementation by April 2016. Crude oil andcommodity prices continued to be soft helping the inflation to be under control andenabling RBI continued to ease up the interest rates and money supply. Consumer spendingoutlook started to look more positive as the year progressed.

In this backdrop your company closed the financial year 2015-16 with 8% growth inRevenue 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 waspowered by16% growth in Brand & Retail Segment.

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

3. DIVIDEND

Your Directors have recommended a dividend of 24% i.e. Rs2.40 per equity share of Rs10each for the year ended on 31st March 2016. The dividend if approved by the memberswould involve a cash outflow of Rs 74.60 crores (inclusive of tax on dividend).

4. TRANSFER TO RESERVES

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

5. SHARE CAPITAL

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

6. EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company has instituted the Employees Stock Option Scheme (ESOS) to grant equitybased incentives to certain eligible employees and directors of the Company and itssubsidiary companies. During the year under review the Company has not granted any stockoptions. Details of the shares issued under Employee Stock Option Scheme (ESOS) and alsothe disclosures in compliance with Section 62 of the Companies Act 2013 and Rule 12 ofCompanies (Share Capital and Debentures) Rules 2014 and the Securities and Exchange Boardof India (Share based Employee Benefits) Regulations 2014 are set out in Annexure -A tothis 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 withRule 16(4) of Companies (Share Capital and Debentures) Rules 2014 in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid section are not applicable.

8. FINANCE

The Company has repaid the installments of Term Loans amounting to Rs255 crores duringthe current year.

The Company has also made fresh borrowings of Rs438 Crores for funding capitalexpenditure and other requirements. Long Term Debt of the Company stands to Rs 1601 croresas on 31st March 2016.

9. DEPOSITS

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

10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

11. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Arvind Limited has been actively undertaking "Corporate SocialResponsibility" (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 RuralDevelopment 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 CSRefforts.

Initiatives undertaken by SHARDA Trust:

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

SHARDA Trust also conducted personality development programs (Basic English Computerfamiliarization and musical instruments) for the youth of Ahmedabad with an objective toenhance 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 Centresin Ahmedabad. These centres will be one stop solutions for all primary medical needs ofpeople. We plan to set up 3 primary health centres in various parts of Ahmedabad during2016-17 and after testing it for a year or so if successful we plan to set up morecentres across urban and rural set up.

In 2015-16 we also completed a Need Assessment Study of 6 villages in Santej Taluka ofGandhinagar and Dholka Taluka of Ahmedabad district using various participatory ruralappraisal tools. A plan is being made to initiate appropriate interventions during2016-17.

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 for8480 industrial workers in Dahej industrial area of Bharuch district. 209 health campswere organized which benefitted 4873 workers. External evaluation of these two programshas rated our performance as very good.

NLRDF organized 10 entrepreneurship trainings for marginalised women (250 widows) ofAhmedabad 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 ofKhedbrahma in Sabarkantha district in Gujarat. 2034 pregnant women 2672 lactating womenand 2113 under nourished children were covered under various services. NLRDF builtsanitation blocks for school girls in Village Pratappura of Kalol Taluka. The sanitationblocks benefit 120 girl students.

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

NLRDF conducted an Entrepreneurship Development Program on Food Processing Industriesbenefitting 30 entrepreneurs. After 3 months 21 participants have started their businessrelated to food processing.

Various workshops were organized in the field of animal husbandry and organic farmingfor 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." Theproject 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 onmaintenance and restoration of old manuscripts as well as education and research in thefield of Indology. As it is a continuing effort it requires constant funding anadditional corpus grant of Rs 1.00 Crore was given to LDBSV. This now makes the Arvindcorpus grant to LDBSV for the said project to Rs 2.00 Crores as during 2014-15 too acorpus grant of Rs 1.0 Crore was given.

The Annual Report on CSR ACTIVITIES in prescribed format is enclosed with this inAnnexure-B.

12. HUMAN RESOURCES

The Company believes that Human Resources will play a significant role in its futuregrowth. With an unswerving focus on nurturing and retaining talent the Company providesavenues for learning and development through functional behavioral and leadershiptraining programs knowledge exchange conferences communication channels for informationsharing to name a few.

The Group’s Corporate Human Resources plays a critical role in company’stalent management process.

13. RISK MANAGEMENT

The Company has a robust Enterprise Risk Management framework which enables it to takecertain risks to remain competitive and achieve higher growth and at the same timemitigate other risks to maintain sustainable results.

Under the framework the Company has laid down a Risk  Management Policy whichdefines the process for identification of risks its assessment mitigation measuresmonitoring and reporting. While the Company through its employees and ExecutiveManagement continuously assess the identified Risks the Audit Committee reviews theidentified Risks and its mitigation measures annually.

The Company has identified 17 Risks - 6 Strategic Risks 8 Operational Risks & 3Regulatory Risks. Key Strategic Risks include geographical concentration of itsmanufacturing capacity fluctuation in cotton prices business continuity & successionplanning. Key Operating Risks includefinancial labour unrest customers credit riskcustomers concentration & fluctuation on foreign exchange rates. Regulatory Risksinclude bilateral/multilateral trade agreements government policies with respect totextiles & Regulatory compliances.

14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has an Internal Audit department with adequateexperience and expertise in internal controls operating system and procedures. Indischarging their role and responsibilities the department is supported by an externalaudit firm.

The Internal Audit Department reviews the adequacy of internal control system in theCompany its compliance with operating systems and laid down policies and procedures.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy to deal with instances offraud and mismanagement if any. The details of the Whistle Blower Policy are explained inthe Corporate Governance Report and also posted on the website of the Company(www.arvind.com).

16. SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

As on 31st March 2016 the Company has 21 subsidiaries (Direct or Indirect) and 5joint 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 subsidiariesof 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 theCompanies (Accounts) Rules 2014 a statement containing salient features of financialstatements of subsidiaries associates and joint venture companies in Form AOC-1 isattached to the Financial Statements. The separate audited financial statements in respectof each of the subsidiary shall be kept open for inspection at the Registered Office ofthe Company. The Company will also make available these documents upon request by anyMember of the Company interested in obtaining the same. The separate audited statements inrespect of each of the subsidiary are also available on the website of the Company atwww.arvind.com The Company has framed a policy for determining material subsidiarieswhich has been uploaded on company’s website www. arvind.com

17. CONSOLIDATED FINANCIAL STATEMENTS

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

18. 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.

Pursuant to Section 149 of the Companies Act 2013 Mr. Samir Mehta (holding DIN00061903) and Mr. Nilesh Shah (holding DIN 01711720) were appointed as IndependentDirectors of the Company in the Annual General Meeting (AGM) held on 6th August 2015. TheIndependent Directors were appointed for a period of 5 consecutive years from theirappointment dates. The terms and conditions of appointment of Independent Directors are asper Schedule IV of the Companies Act 2013. All Independent Directors have furnished thedeclarations of independence stating that they meet the criteria of independence asmentioned 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 hasoffered himself for re-appointment as the Director of the Company.

The Board of Directors had on recommendation of Nomination and Remuneration Committeereappointed Mr. Sanjay Lalbhai as the Chairman and Managing Director of the Company for afurther period of 5 years from 1st April 2017 to 31st March 2022 and approved theremuneration 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 FinancialOfficer and Mr. R.V. Bhimani- Company Secretary are the key managerial personnel of theCompany.

19. 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 carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.

20. REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andSenior Management and their remuneration. The Remuneration Policy is explained in theCorporate Governance Report forming part of this Report.

21. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for the Independent Directors to familiarize them with theirrole rights and responsibility as Directors the working of the Company nature of theindustry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the Company www.arvind.com

22. 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 themeetings are provided in the Corporate Governance Report forming part of this Report.

23. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that: a. in preparation of the annualaccounts for the financial year ended March 31 2016 the applicable accounting standardshave 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 viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period; c. they have taken proper and sufficient caretowards the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d. they have prepared the annual accounts on a goingconcern basis; e. they have laid down internal financial controls which are adequate andare operating effectively; f. they have devised proper systems to ensure compliance withthe provisions of all applicable laws and such systems are ely. effectiv adequate andoperating

24. RELATED PARTY TRANSACTIONS

All the related party transactions are entered on arm’s length basis in theordinary course of business and are in compliance with the applicable provisions of theCompanies Act 2013 and the Listing

Regulations. There are no materially significant related party transactions made by theCompany with Promoters Directors or

Key Managerial Personnel etc. which may have potential conflict with the interest ofthe Company at large or which warrants the approval of the shareholders. Accordingly notransactions are being reported in Form AOC-2 in terms of Section 134 of the Act read withRule 8 of the Companies (Accounts) Rules 2014. However the details of the transactionswith Related Party are provided in the Company’s financial statements in accordancewith 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 innature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.

The Policy on Related Party Transactions as approved by the Board is available onCompany’s website www.arvind.com

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

26. AUDITORS

A. Statutory Auditors

Sorab S. Engineer & Co. Chartered Accountants (ICAI Registration No.110417W) theStatutory Auditors of the

Company will hold office until the conclusion of the ensuing Annual General Meetingand 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 theStatutory Auditors of the Company and has furnished a certificate of their eligibility andconsent under Section 141 of the Companies Act 2013 and the rules framed there under. Interms of the Listing Regulations the Auditors have confirmed that they hold a validcertificate issued by the Peer Review Board of the ICAI. The Board based on therecommendation 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 Accountantsas Auditors from the conclusion of the ensuing Annual General Meeting till the conclusionof 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 Statementsis enclosed to this report. The observations made in the Auditors’ Report areself-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 andtelecommunication products are required to be audited pursuant to Section 148 of theCompanies Act 2013 read with The Companies (Cost Records and Audit) Amendment Rules2014. Your Directors have on the recommendation of the Audit Committee appointed M/sKiran J. Mehta & Co. Cost Accountants Ahmedabad to audit the cost accounts of theCompany for the financial year 2016- 17 on a remuneration of Rs 3.75 lakhs. As requiredunder the Companies Act 2013 the remuneration payable to the cost auditor is required tobe placed before the Members in a general meeting for their ratification. Accordingly aResolution 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 theAnnual 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 hasappointed M/s Hitesh Buch & Associates a firm of Company Secretaries in practice toconduct the Secretarial Audit of the Company for the financial year 2015-16. TheSecretarial Audit Report is annexed herewith as "Annexure-C". The SecretarialAudit Report does not contains any qualifications reservation or adverse remarks.

27. 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 highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.

28. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS

The Corporate Governance Report and Management Discussion & Analysis which formpart of this Report are set out as separate Annexures together with the Certificate fromthe auditors of the Company regarding compliance of conditions of Corporate Governance asstipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "Annexure-D".

30. EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure -E".

31. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of Section 136(1) of the Companies Act 2013 the Report and Accountsare being sent to the Members and others entitled thereto excluding the information onemployees’ particulars which is available for inspection by the Members at the

Registered Office of the Company during business hours on working days of the Companyup to the date of the ensuing Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Company Secretary in this regard.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the (Appointment andRemuneration of Managerial Personnel)

Rules 2014 are given in Annexure-F to this report.

32. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.

During the financial year 2015-16 the company has received 1 (one) complaint on sexualharassment and has dealt with it as per the policy guidelines and ICC recommendations in afair and just manner.

33. VOLUNTARY DELISTING OF EQUITY SHARES OF THE COMPANY FROM THE AHMEDABAD STOCKEXCHANGE LIMITED

Pursuant to Regulation 7 of the Securities and Exchange Board of India (Delisting ofEquity Shares) Regulations 2009 equity shares of the Company have been voluntarilydelisted from the Ahmedabad Stock Exchange Limited ("ASEL") with effect from23rd December 2015 as there was no trading facility available on ASEL since so manyyears.

Neither the Company nor any shareholder was being benefited in any manner due tocontinued listing on ASEL. However your Company’s equity shares will continue to belisted on BSE Limited and National Stock Exchange of India Ltd having nationwideterminals. There was no change in the capital structure of the Company post delisting fromASEL.

34. ACKNOWLEDGEMENTS

The Board expresses its sincere thanks to all the employees customers suppliersinvestors lenders regulatory and government authorities and stock exchanges for theirsupport.

By order of the Board
Date: May 12 2016 Sanjay Lalbhai
Place: Ahmedabad Chairman and Managing Director

Annexure – A to the Directors’ Report

Disclosures under Regulation 14 of the SEBI (Share based Employee Benefits)Regulations:

The details of ESOP 2008 for the year ended March 31 2016 are as under:

1 Description of ESOP 2008:
(a) Date of shareholder approval 23-Oct-2007
(b) Total number of shares approved under ESOP 2008 5% of share capital from time to time.
(c) Vesting requirements Options vest over 5 years based on continued service and certain performance parameters.
(d) Exercise price or pricing formula Market price of the equity shares being latest available closing price on the Stock Exchange.
(e) Maximum term of options granted 5 years from the date of grant
(f) Source of shares Primary
(g) Variation of terms of options None
2 Method used to account for ESOS Intrinsic Value Method
3 Where the Company opts for expensing of the options using the intrinsic value of the options the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The impact of this difference on the profits and EPS of the Company shall also be disclosed.
(i) Difference between Intrinsic value and Fair value compensation cost Rs 213 lacs
(ii) Impact on the Profits of the Company (Rs) Profits would have been lower by Rs 259 lacs
(iii) Impact on Basic Earnings Per Share of the Company (Rs) Basic EPS would have been Rs 14.52 per share
(iv) Impact on Diluted Earnings Per Share of the Company (Rs) Diluted EPS would have been Rs 14.50 per share
4 Option movement during the year:
(a) Options Outstanding at the beginning of the year 1050000
(b) Options granted during the year 0
(c) Options forfeited / lapsed during the year 0
(d) Options vested during the year 0
(e) Options exercised during the year 0
(f) Number of shares arising as a result of exercise of option 0
(g) Money realised by exercise of options (Rs) 0
(h) Loan repaid by the Trust during the year from exercise price received NA
(i) Options Outstanding at the end of the year 1050000
(j) Options Exercisable at the end of the year 0
5A Weighted average exercise prices of options whose
Exercise price equals market price of stock Rs 200.45
Exercise price exceeds market price of stock 0
Exercise price is less than market price of stock 0
5b Weighted average fair value of options whose
Exercise price equals market price of stock Rs 121.30
Exercise price exceeds market price of stock 0
Exercise price is less than market price of stock 0
6 Employee wise details of options granted to:
(i) Senior managerial personnel
(ii) any other employee who receives a grant in any one year of options amounting to five per cent or more of options granted during that year Nil
(iii) identified employees who were granted options during any one year equal to or exceeding one per cent of the issued capital (excluding outstanding warrants and conversions) of the issuer at the time of grant
7 A description of the method and significant assumptions used during the year to estimate the fair values of options including following information: No grants made during the year.
(i) Share price (Rs)
(ii) Exercise price (Rs)
(iii) Expected volatility
(iv) Expected dividends
(v) Risk-free interest rate
(vi) Any other inputs to the model
(vii) Method used and the assumptions made to incorporate effects of expected early exercise
(viii) How expected volatility was determined including an explanation of the extent of to which expected volatility was based on historical volatility
(ix) Whether any or how any other features of option grant were incorporated into the measurement of fair value such as market condition.

Annexure – B to the Directors’ Report

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES SECTION 1

A brief outline of the company’s CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programs.

Brief outline of the company’s CSR policy

For Arvind Limited the flagship company of the Lalbhai Group care for the society hasbeen an intrinsic value for the promoters of the Lalbhai group.

The founders were instrumental in setting up pioneering institutions for sustaining andimproving Educational Social Cultural and Religious conditions that supported thesevalues and thereby Ahmadabad’s social and business progress. Ahmedabad EducationSociety Indian Institute of Management Ahmedabad Centre for Environmental Planning andTechnology H L College of Commerce and Lalbhai Dalpatbhai Institute of Indology are someexamples.

In addition the company undertakes "Corporate Social Responsibility (CSR)initiatives through Strategic Help Alliance for Relief to Distressed Area (SHARDA) Trustand Narottam Lalbhai Rural Development Fund (NLRDF). SHARDA & NLRDF have been workingon programs of social renewal with the urban poor & rural poor respectively.

In 2015-16 Arvind Foundation has been set up to act as an umbrella organization forundertaking CSR activities.

The Arvind Limited Policy on Corporate Social Responsibility (ALPCSR) was formally putin place in 2014-15 and last year we followed the policy and the Company Act 2013 inletter and spirit. The high points of the Policy are presented below and a copy of the CSRPolicy is enclosed with this report. The Policy can also be reached at our website throughthis link: http://www.arvind.com/csr/policy/CSRPolicy.pdf

Overview of projects or programs proposed to be undertaken

The Arvind Limited Policy on Corporate Social Responsibility (ALPCSR) aims to impactpositively the quality of life of people through initiatives of social economiceducational infrastructural environmental health and cultural advancement.

The projects and programs of ALPCSR will be synergetic to the thematic areas as definedor will be defined from time to time in Schedule VII of the New Companies Act.

The projects and programs under ALPCSR would be carried out by the Company promotedorganizations SHARDA Trust NLRDF and Arvind Foundation. The company will also beworking with organizations who bring specific expertise for a mutually beneficial programsfor the social development. For example: for setting up primary health centres we havepartnered with Swasth India Foundation.

Following initiatives are slated to continue expand and few at the initiation stage:

The ongoing Education Support Program GYANDA is ready for expansion from present about1300 students to about 6600 students by 2020. As expansion is on card to track theattendance and performance large number of students a software program is beingdeveloped.

New Initiative of setting up Primary Health Centre titled "Arvind MedicalCentre" in Ahmedabad in partnership with Swasth India Foundation has been planned. 3Primary Health Centres will be set up during 2016-17. Upon testing it for a year morecentres across urban and rural landscape will be set up.

The company had supported Lalbhai Dalpatbhai Bhartiya Sanskriti Vidyamandir (LDBSV) fora project of "Promotion of Indology" through a corpus grant during2014-15. The company decided to support the project for another year and continued withthe corpus grant of Rs 1.0 Crore during 2015-16 making it a total corpus grant of Rs 2.00Crores.

The company plans to start up rural development initiatives in villages around ourfactory premises in Santej based on the findings of the need assessment study. We are inthe process of designing meaningful initiatives which will be undertaken during 2016-17.

Another activity on the planning stage is to undertake promotion of sanitation acrossrural and urban set ups under CSR and Swachch Bharat Initiative. To begin with we plan toundertake this initiative in and around villages of our factory premises in Santej.

The company is committed to put in place a strategy to ensure financial sustainabilityto all our CSR initiatives. The company plans to achieve this through creation of a largecorpus fund over a period of time. Our CSR Policy has envisaged continuously investing ina corpus fund. During 2015-16 Rs 5.14 crores was invested in the corpus of ArvindFoundation.

A brief account of the projects and programs supported by the company during 2015-16is listed in Section 05:00 of this report in the format given by the Ministry of CorporateAffairs.

Section 2

Composition of the CSR Committee

The Arvind Limited has set up Corporate Social Responsibility Committee (CSR Committee)as per the requirement of the Companies Act. The members of the CSR Committee are: (i) Mr.Sanjay Lalbhai (Chairman and Managing Director) (ii) Mr. Punit Lalbhai (ExecutiveDirector) (iii) Mr. Jayesh Shah (Whole time Director and CFO) (iv) Mr. Bakul Dholakia(Independent Director)

Section 3

Average net profit of the company for last three financial years

The average net profit of the company is Rs 363 Crores.

Section 4

Prescribed CSR Expenditure (two per cent. of the amount as in Section 3:00 above)

The prescribed CSR Spend for Arvind Limited for the year 2014-15 is Rs 7.27 Crores.

Section 5

Details of CSR Spend during the financial year

(a) Total amount to be spent for the financial year: Rs 7.27 Crores (b) Amount Unspentif any: NONE.

(c) Manner in which the amount was spent during the financial year is detailed below:

1 2 3 4 5 6 7 8 9
Sr. No. CSR project or activity identified Sector in which the Project is covered Projects or programmes Amount outlay (budget) project or programms wise Amount spent on the projects or programs Cumulative expenditure upto to the reporting period Amount spent: Direct or through implementing agency Remarks
Sub Heads
(1) Local area or other (1) Direct expenditure on Projects or programs
(2)Specify the State and district where projects or programs was undertaken (2) Overhead
From 2% CSR Fund Rs Lacs
1 Project Expenses for Health Project Promoting Health care Project of setting up primary health centres in Ahmedabad 50 50 Through SHARDA Trust: Companys Implementing Agency
2 Promotion of Indology National Heritage Art & Culture Ahmedabad Gujarat 100 100 150 Through Implementing Agency - Lalbhai Dalpatbhai Bhartiya Sanskriti Vidyamandir (LDBSV) -Towards Corpus
Cultural Promotion National Heritage Art & Culture Navrangpura Ahmedabad Gujarat 10 10 160 Through Implementing Agency - Gujarat State Navratri Festival Society
3 Creation of Arvind Foundation Ahmedabad Gujarat 1 1 161 Arvind Foundation
4 Promotion of Education Ahmedabad Gujarat 7 7 168 Through Implementing Agencies Calorex Foundation and Visamo Kids Foundation
5 Other CSR Projects Suported 9 9 177
6 Corpus Donation Promoting Education Promoting Skills Promoting Health Promoting Sanitation Promoting other CSR projects as per schedule VII Interest to be used in the projects in these areas. 514 514 691 For creating a copus for Arvind Foundation -company’s own foundation created for undertaking CSR initiative.
7 Administrative Expenses 36 727 4.95% of 2%
Total Programs supported through Funds over and above 2% CSR Funds 727
1 Gyanda: Education Support Programme for Under privileged students Promoting Education Shahpur Khanpur Shahibaug areas of Ahmedabad Gujarat. Other Areas Proposed. 104 Through SHARDA Trust’s own & other sources Operational Expenses - Unaudited
2 NLRDF Programs Promoting Health Promoting Sanitation Skills and Training Gujarat 130 234 Through NLRDF’s own & other sources Operational Expenses - Unaudited
Total Spend (Rs Lacs) 234 234
GrandTotal 961 961

Details of the Implementation Agencies:

Details of Implementation Agency
Project and Programs Theme Implementing Agency Registration No
Arvind Medical Centre – Setting Promoting Strategic Help Alliance for Relief to Registration No. E / 10699 / Ahmedabad Dated 13th
up Primary Health Centres Health Distressed Area (SHARDA) Trust December 1995 under Bombay Public Trust Act 1950.
Cultural Lalbhai Dalpatbhai Bhartiya Registration No. F-63 Dated 15th December 1956 and under Society Registration Act 1860 vide Reg. No. 3475
Promotion of Indology Development Sanskriti Vidyamandir
Dated 7th June 1956.
Incorporation No. U85300GJ2015NPL084020 dated 3rd August 2015 and under section 7 and rule 8
Corpus Grant Multiple Projects Arvind Foundation (Incorporation) Rules 2014 Incorporated as Section 8 of the Company Act.

Section 6

In case the company has failed to spend the two percent of the average net profit ofthe last three financial years or any part thereof the company shall provide the reasonsfor not spending the amount in its Board report.

NOT APPLICABLE. THE COMPANY HAS SPENT THE REQUIRED AMOUNT.

The CSR Committee confirms that the implementation and monitoring of the CSR policy isin compliance with the CSR objectives and policy of the Company.

Sd/- Sd/-
Mr. Sanjay Lalbhai Dr. Bakul Dholakia
Chairman and Managing Director Chairman-CSR Committee

Annexure – C to the Directors’ Report

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

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

To

The Members Arvind Limited Naroda Road

Ahmedabad-380025

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Arvind Limited (hereinaftercalled the Company). Secretarial Audit was conducted in a manner that provided us areasonable basis for evaluating the corporate conducts / statutory compliances andexpressing our opinion thereon.

Based on our verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016 complied withthe statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:

1. We have examined the books papers minute books forms and returns filed and otherrecords maintained by Arvind Limited ("the Company") for the financial yearended on 31st March 2016 according to the provisions of: (i) The Companies Act 2013("the Act") and the rules made thereunder; (ii) The Securities Contracts(Regulation) Act 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings.

2. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’): (i) The Securities and ExchangeBoard of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011;

(ii) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 (upto 14th May 2015) and Securities and Exchange

Board of India (Prohibition of Insider Trading) Regulations 2015 (effective 15th May2015);

(iii) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(iv) The Securities and Exchange Board of India (Share based Employee Benefits)Regulations 2014;

(v) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (Not Applicable as the Company did not issue any such securitiesduring the financial year)

(vi) The Securities and Exchange Board of India (Registrars to Issue and Share TransferAgents) Regulations 1993 regarding the Companies Act and dealing with client; (NotApplicable as the Company is not registered as Registrar and Transfer Agents with SEBI)

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

(viii) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998. (Not Applicable as the Company has not bought back any of the securities duringthe financial year)

3. We have relied on the representation made by the Company and its Officers forsystems and mechanism formed by the Company for compliances under other applicable ActsLaws and Regulations as applicable to the Company.

4. The Company has complied with following specific laws applicable to the Company:

(i) Explosives Act 1884 (ii) Electricity Act 2003

(iii) Public Liability Insurance Act 1991 (iv) Information Technology Act 2000 (v)Essential Commodities Act 1955 (vi) Textile Committee Act 1963

(vii) Textile (Development & Regulation) Order 2001 (viii) Textile (ConsumerProtection) Regulations 1988

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

(i) Secretarial Standards issued by The Institute of Company Secretaries of India;(As applicable for the period under audit)

(ii) The Listing Agreements entered into by the Company with BSE Limited NationalStock Exchange of India Limited and Ahmedabad Stock Exchange Limited for the period upto30th November 2015;

(iii) The Listing Agreements entered into by the Company with BSE Limited and NationalStock Exchange of India Limited pursuant to Securities and Exchange Board of India(Listing Obligations & Disclosure Requirements) Regulations 2015 for the periodcommencing 1st December 2015 to 31st March 2016; During the period under review theCompany has complied with the provisions of the Act Rules Regulations GuidelinesStandards etc. mentioned above.

We further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent

Directors. The changes in the composition of the Board of Directors that took placeduring the period under review were carried out in compliance with the provisions of theAct. Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views arecaptured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines. specific We further reportthat during the audit period there were no events / actions having a major bearing onthe company’s affairs except the following:

1. Demerger and transfer of Real Estate Undertaking of the Company to ArvindInfrastructure Limited and Restructuring the Share Capital of the Company pursuant toorder dated 30th March 2015 passed by the High Court of Gujarat at Ahmedabad.

2. Delisting of shares from the Ahmedabad Stock Exchange Limited w.e.f. 23rd December2015.

Place: Ahmedabad Hitesh Buch
Date: May 12 2016 Proprietor
For Hitesh Buch & Associates
FCS No.: 3145
C P No.: 8195

To

The Members Arvind Limited Naroda Road Ahmedabad – 380025

Our Secretarial Audit Report of even date is to be read along with this letter.

Management’s Responsibility

1. It is the responsibility of the management of the Company to maintain secretarialrecords devise proper systems to ensure compliance withthe provisions of all applicablelaws and regulations and to ensure that the systems are adequate and operate effectively.

Auditor’s Responsibility

2. Our responsibility is to express an opinion on these secretarial records systemsstandards and procedures based on our audit.

3. Wherever required we have obtained the management’s representation about thecompliance of laws rules and regulations and happening of events etc.

Disclaimer

4. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

Hitesh Buch
For Hitesh Buch & Associates
Place: Ahmedabad FCS No.: 3145
Date: May 12 2016 C P No.: 8195

Annexure – D to the Directors’ Report

Information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014.

A. CONSERVATION OF ENERGY :

1. Energy Conservation Measures taken:

Naroda Road Unit - Electricity Conservation:

No. Initiatives Energy savings (Kwh/Day)
1. 125 LED streetlights in place of HPMV lights 200 Kwh/Day
2. Self-driven energy-efficient turbo ventilation exhaust fans instead of electrical operated options 1080 Kwh/Day
3. VFD system for cooling tower motor and energy efficient pump for water supply 450 Kwh/Day
4. VFD at microtech boiler 600 Kwh/Day
5. 1200 tube lights replaced by energy efficient LED lights at Naroda plant 500 Kwh/Day

Constant efforts in continuing all previous conservation measures and increasingawareness of energy management amongst employees have continued which should enablefurther savings going forward.

Naroda Road Unit (Naroda) Santej Units (Santej) Ankur Textiles (AT) and Arvind Intex(AI)

1. Proper preventive maintenance of all machines including utilities. (Naroda SantejAT & AI)

2. Optimum utilization of Air Compressors by minimizing air leakage in the lines andmachines. (Naroda & Santej)

3. Economical operation of humidification plants looking to the atmospheric conditionin all seasons which reduces the electrical energy units. (Naroda Santej AT & AI)

4. Conversion of old technology (DC) in baby rope dyeing / certain finishing machinesto new technology (AC) to reduce energy consumption as well as improve productivity.(Naroda & Santej)

5. Installation of variable frequency drives on pumps. (Naroda & Santej)

6. Optimum utilization of cooling towers at Compressors by installation of VFD andclose monitoring. (Naroda & Santej)

7. Monitoring of power consumption and production data to sustain lowest possiblekwh/kg through minimum operation of machines and aligning maintenance schedule andproduction program. (Naroda Santej AT & AI)

8. Installation of power capacitors in electrical distribution network for power factorcontrol and subsequent rebates obtained from grid supplier. (Naroda Santej & AI)

9. Installation of energy efficient motors for Autocoro machine and in fan motors.(Naroda Santej & AI) 10. Diverted in open access power and took benefit of low cost.(Naroda Santej & AI) 11. Replacement of old screw air compressor with energyefficient centrifugal air compressor. (Santej)

12. Installation of small size air compressor for seal air requirement of centrifugalcompressors. (Santej)

13. Continuous improvement in power factor to reduce the maximum demand & maximumdemand charge. (Santej)

14. Installation of pneumatic no loss drain valves in place of manual drain valves andcollection of drain water to cooling tower for better effectiveness. (Santej)

15. Replacement of Mercury lamps in street light to LED lamps. (Santej)

16. Reduction in air pressure through pressure reducing valve for cleaning airapplication which results into drastic reduction in energy. (Santej)

17. Installation of Loom sphere concentrated humidification plant in place ofconventional plant. (Santej) 18. Maintained/provided insulation to hot/cold pipelineseffectively in the entire plant. (Santej)

19. Optimum utilization of street lighting through Lux sensor. (Santej)

20. All energy conservation measures taken previously are being continued. (Santej)

21. Carried out energy audit by Kirloskar Pumps Ltd. and Forbes Marshall for continuousimprovement. (Santej) 22. Installation of capacitors to optimize power factor. (Santej)

23. Prevention of Steam Water & Air leakage by on line & offline method.(Santej)

24. Selection of New Humidification Plants with variable frequency drives air washerpump for smooth operation and constant humidity in the new classical weaving. (Santej)

25. Installation of self-driven turbo ventilation exhaust fans instead of electricaloperated exhaust fans. (Santej) 26. Approx. 5000 tube lights are replaced by energyefficient LED Lights at Santej.

27. Maximum demand controlled by installing controller and saved penalty charges.(Santej)

28. Installation of high frequency ballast in lighting for saving of power and forhigher lumen output. (Santej & AI)

29. Installation of new meters and ct pt to fulfill the requirement for open accesspower. (Santej & AI)

30. Use of 240 nos. of LED tube fittings in place of conventional tube light fittingsresulted in saving of 75000 Units per year. (AT) 31. Installation of Effimax unit on 8 Mtsteam boiler resulted in saving of 1.5 Mt of coal per day. (AT)

32. Installation of 13 nos. variable frequency drives in Weaving H plants resulted insaving of 625 Unit per day. (AT)

33. Change of location of compressor succession filters of air compressor filters toreduce specific power consumption. (AT)

34. Installation of pressure reducing valve in new cleaning airline and therebycontrolled air pressure supply. (AT)

35. Installation of pressure reducing valve on steam line of 6 nos. of Comby JiggerMachines and reduced steam consumption by 8% of those machines. (AT)

36. Old DG set cooling tower water line modification done & it is prepared for IHE- 5 Compressor Cooling Tower. (AI)

37. Maximum demand controlled by installing controller and saved penalty charges. (AI)38. Monitoring airline leakages to reduce compressor working hour and to save power. (AT& AI) 39. Installation of timers in street lights for saving in power. (AT & AI)40. Installation of inverter drives in spinning machines. (AI) 41. Regular checking andrepairing of water leakages for reduction in energy consumption.(AI)

42. Replacement of existing fans by energy efficient fans in pneumatic fan section ofring frame machines. (AI)

Water & Steam (Coal) Conservation: Naroda Road Unit

Water and steam (coal) conservation efforts at Arvind Denim have continued in variousforms these have helped drive both water usage and steam consumption down as well asimproved the availability of water from careful harvesting. Some key actions arehighlighted below:

No. Initiatives Savings (Ltr/Day)
1. Steam condensate adopted to reduce water/steam consumption 50000 Ltr/Day
2. Water reuse measures adopted to reduce water consumption on processing machines 90000 Ltr/Day
3. Reuse of pre wetting tank water to washing tank (Rope Dyeing machine) 100000 Ltr/Day
4. Reduced coal consumption in 2 FBC boiler by increasing efficiency 2.5 MT coal/day

Naroda Road Unit (Naroda) Santej Units (Santej) and Ankur Textiles (AT)

1. Reduction in steam consumption in yarn dyeing by reusing hot water into process.(Santej)

2. Water recycling in various areas adopted in order to reduce water consumption.(Santej & AT)

3. Installation and maintenance of float valves in open tank and cooling tower to stopthe overflowing of water. (Naroda & Santej)

4. Almost 400 KL per day water is reused in processing area in shirting. (Santej)

5. Reuse of machine cooling water as hot process water. (Santej & AT)

6. Regular checking for wasteful use of water followed by remedial action. (Santej& AT)

7. Steam condensate recycling in various areas adopted in order to reduce water andsteam consumption. (Santej & AT)

8. Effective operation of condensate and cooling recovery system. (Santej)

9. In view of saving of natural resources we started Sewage Treatment Plant at Ankurand as on today we take 1100 KL raw sewage from AMC treat it and use it as process water.(AT)

10. By using dyes having higher exhaustion effluent generation per mtr. of fabric isreduced from 16.5 ltr/mtr to 15.16 ltr/mtr. (AT)

2. Additional Investment and proposals if any being implemented for reduction ofconsumption of energy: Naroda Road Unit

There are several new proposals in place to further reduce energy/water consumption asbelow:

Electricity

Title Reduction of Power consumption
1 LED lights in place of CFL or incandescent lamps (3000 Nos)
2 LED lights in place of CFL or incandescent lamps (1000 Nos at DSSP)
3 Energy efficient motors in place of regular (IE3 in place of old)
4 Installation of new submersible pumps and VFD control systems for water delivery pumps
5 Renewable energy - Solar roof based systems for lighting (10 KW)
6 Elec. generation from steam pressure drop in boiler
7 Replacement of Air Lines with low friction air pipes
Water
1 Recycling rubber and cooling cylinder RDP
2 Sucker Muller Dye house water recycling
Steam conservation
1 Insulation paint on hot water/steam lines and sides of dry cans
2 Condensate recycling to boiler
3 Renewable energy - Solar water heating systems for NLRC
4 Renewable energy - Solar pre heating for boiler
5 Compressor waste heat recovery to heat water
6 Water-Water HX for CDR and Impecta
7 Install water preheater system at Thermopack boiler & use hot water at boiler feed
Other projects
1 Central data monitoring for steam / water / energy

Santej Units (Santej) Ankur Textiles (AT) and Arvind Intex (AI)

1. Installation of additional capacitors for further improvement in power at SantejUnits.

2. Replacement of faulty steam trap with right sized steam trap. (Santej)

3. Installation of VFD in Auto coners & rewinding machine. (Santej & AT)

4. Right capacity pumps to be installed for catering shirting water demand. (Santej)

5. Installation of VFD in pressure dryers in Yarn Dyeing. (Santej)

6. Erection/installation of Sewage Treatment Plant. (AT)

7. Installation of LED fittings invertors replacement of Thermodynamic Steam Traps byFloat Traps and use of high efficient submersible pumps in place of low efficient pumps.(AT) 8. Replacement of old humidification pump by new energy efficient pump. (AI) 9.Modification of RS1 waste system and thereby reduction in power consumption. (AI)

10. Installation of Voltage Stabilizer in lighting circuit to reduce power consumption.(AI) 11. Installation of LED tube lights in departments. (Santej & AI)

12. ent differ Energy Audit for manufacturing units to minimize the wasteful use ofpower. (AI)

3. Impact of the measures at (a) and (b) above for reduction of energyconsumption and consequent impact on the cost of production of goods :

Better Efficiency Optimum Fuel-Utilization and available Heat Energy Reduction inEnergy Bill Reduction in Down Time Higher Productivity and Reduction in Cost ofProduction. These measures will also help to create a better environment and result inwater conservation.

B. TECHNOLOGY ABSORPTION :

1. Efforts made in technology absorption

RESEARCH AND DEVELOPMENT (R&D)

I. Specific areas in which R & D carried out by the Company:

Denim Business-Naroda Road

New technology intelligence added to infrastructure: As part of Co-creation strategynew technology added to Arvind Denim Lab. Yilmak (Turkey) make washing machine and Dryeradded to lab. With this Metod (Turkey) make 3D machine Fabcare make brushing dummy andMectek (Italy) make Curing oven added. To strengthen the Corduroy Denim Concept one moreCorduroy

Cutting machine added. The old technology of Dual Core spinning is upgraded with morescientific controls to make high quality performance yarn. In Warping and Dyeing area newwarping machine added with upgraded technology and more number of end capacity. Infinishing area new technology of Stable Foam coating added to give high end fashionproducts. A Goller made new fabric preparatory machine added to carry out preparatoryprocess of outsourced grey fabric for Neo Technology. A very scientific new sanforizemachine make of Monforts with double rubber cylinder added which runs at double speed thenconventional machines.

Innovations by internal R & D: New dimension to Denim given with addition of newconcepts of Bi-stretch denim with Selvedge

Warp stretch men’s and women’s denims. Lathery denim made with stable foamcoating double cloth with backside checks and stripes Indigo lock prints Stay blue andstay black with reactive dyeing bright shades with new dyes other than Indigo andSulphur knit weave products for top and bottom weights new blends of Modal –Cotton Wool – Cotton and Tencel – Cotton introduced to Denim Family.

Innovation based on new raw material by Business Partners: High performing fibers likeDyneema Cordura (Nylon 66) Filaments Thermolite Infra-Red fiber technology tested inDenim. A break through innovation done with Recycling of used garments and cotton fiberextraction and reuse in ring spinning to make Sustainable denim.

Shirting Business- Santej

The company has been carrying out In-house Research & Development activities in thearea of product development process development production process development energyconservation and cost reduction which are as under:

Sustainable finish:

Natural finish launched & Ecru process developed resultant saving of variouspretreatment process and thus conserved energy.

Bioscouring of Viscose and Its blend fabric

- Conservation of water steam & other utilities along with improved productquality. Zero Detergent finish-

- 100% without detergent washing.

- Reduces numbers of washing cycles and thus water conservation.

- Quick drying which requires less energy to dry.

- Using less energy and less resources reducing carbon footprint

Formaldehyde free Resin finish for wrinkle free.

Natural softener from plant extract.

Application of pigment through foam coating.

Sustainable fabric from Post consumer used PET with use of Recyle Polyester

- Energy saving- Recycling 1 ton of PET saves 4.7 barrels of oil equivalent.

- Water usage-considerable reduction in water consumption (86%).

- PET made using the ReNEW process saves the equivalent fuel consumed in driving a car17 kms or lighting a 20W bulb for 210 hours.

Replacement of Corrosive conventional Indigo discharge printing technology withnoncorrosive printing technology.

Manufacturing of coloured cotton based fabric.

Automatic colour dispensing system imported for knitting and bottom division.

Development of performance finishes through paste coating technology.

Development of Fabrics with DuPont Sorona Fibres which contains 37 % Renewably sourcedpolymer content by weight & Reduces 63 % CO2 emission over the production of an equalamount of petrochemical-based Nylon 6 focusing more towards sustainability.

Leather Wax Pearl and Hunter coating through paste coating and pigment coatingthrough foam coating which uses very less amount of water.

Manufacturing knitted fabric range look like Denim.

Improvement on stretch property in knitted fabric range to enhancement in comfort levelof Knit fabric.

The company promotes various sustainable fabrics made with sustainable fibers likeTencel modal Bemberg

Route cause analysis for hazardous positive substances in after treated water as perZDHC MRSL & REACH guidelines.

Localized spill kits are prepared and put in all chemical stores in Arvind Santejfacility.

Modal and its blend knitted fabric for under garment application.

Using liquid Indigo dyes instead of conventional powder indigo dyes.

Functional Finishes for Traveller Shirt series developed like Ultra fresh (LA+UV+Antimicrobial + Teflon +Prepress) Stay smart (LA+UV +Antimicrobial + Prepress + MoistureManagement).

Installed boilers with ESP (Electrostatic Plating) to control particulate matter emissions.

Replacement in 150 W Mercury lamp with 65 W LED lamps. Energy Saving - 85 watts Perlamps (Total 350) & More Lumens & cleaner Light.

Installation of Energy efficient Centrifugal Air Compressor vis-a-vis screw compressor.Sp. Power Consumption for Screw Compressor = 210 Watts/ CFM vis-a-vis Installed C700 &C1000 Centrifugal Compressors of 165 watts /CFM.

Facility in Santej is Zero discharge plant recycling 98% of the process water.

Conventional Type of H Plant has been replaced with Fog type of H Plant. PowerConsumption before Modification = 1200 kWh/ day Power Consumption after Modification =600 kWh/day.

Advanced Materials Division - Santej

Fire retardant fabrics: Use of inherent FR denim fibres for making inherent FR Denimand also use of low GSM with high calorific value fabric.

Solid/Liquid and Air Filtration: Use of Polypropylene PTFE membrane PTFE fibers andfibre blends to meet 20 mg/mt3 and below for liquid and gas filtration in variousapplications.

Composites: Developing newer light weight material using PET phenolic & epoxy resinalong with glass fabric to be used for electrical and construction industries to replacetraditional metals.

Coated Materials: Use of acrylic polyurethane PVC coating on cotton poly- cottonnylon polyester fabric for making canvas awning fabric and tent. Acrylic andpolyurethane polymer have excellent function of water proofing for tent and awningapplication.

Woven Business-Santej-ETP

New technology intelligence added to infrastructure: MVRE ( Mechanical VapourRecompression Evaporation ) Plants had been Installed in Effluent Recycling Systemfor low cost evaporation and completing the ZLD system. This system is recovering wateras well as mixed salt in pure form which is used into dyeing of yarn and fabric againstglauber salt and vacuum salt.

MVRE-4 based on PTFE MED system is installed for this. It is running successfully.

Another new technology we added is Electro Chemical Oxidation for ETP Treatment. Thistechnology is futuristic technology. It is simple and eco-friendly. Less sludge generationwill be done by this technology with better energy efficiency.

We are also going to re-use the sewage of Ghandhinagar City against bore well water forwater conservation and Plant is going to be installed at the cost of 16.2 Crores of 4 MLDCapacity.

II. Benefits derived as a result of the above R & D:

Technology up-gradation quality improvement value engineering pollution controlenergy conservation import substitution de-risking the business organization brandbuilding longer business projections profitable and competitive business sustainabilityetc.

III. Future plan of Action :

Focus on performance based technologies and products.

Focus on sustainable resources and green technologies.

Use of new sustainable dyes chemicals and fibers newer finishes developments withcoating brushing calendaring and utilization of newer chemicals.

Business partnership with innovation oriented supply chain partners for jointdevelopment program.

New technology adoption for quality improvement cost reduction and de-risking thebusiness.

Action plan to improve chemical management performance.

Formaldehyde free printing package.

Nickel free printing operation.

Shifting to C6 to CO chemistry product in repellent based finishes.

Dope dyed polyester in melange blend with cotton knitted fabric.

Manufacturing Knitted fabric with Sorona polyester with Dupont.

Implementation of HIGGS index version 2.0 & validation by third party.

Formation of a dedicated sustainability team with expertise & experience inrelevant areas.

IV. Expenditure on R & D:

The Company has separate In-House Research & Development Centre at Naroda andSantej locations. Both the Centres are involved into new product development and newprocess development etc. and are fully recognized and approved by the Department of andIndustrial Research Ministry of Science and Technology Government of India. The detailsof Capital and Revenue

Expenditure incurred on Research and Development by both the Centres are as under:

Rs in crores
Year ended
Particulars March 31 2016 March 31 2015
(a) Capital Expenditure
Naroda Centre 0.00 0.67
Santej Centre 8.23 14.59
Total 8.23 15.26
(b) Revenue Expenditure
Naroda Centre 4.09 2.55
Santej Centre 20.95 13.52
Total 25.04 16.07
(c) Total R & D Expenditure 33.27 31.33
(d) Total R & D Expenditure as a percentage of total turnover 0.62% 0.60%

2. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:

I. Efforts in brief made towards technology absorption adaptation and innovation:

Denim Business-Naroda Road

The Denim business environment is becoming more and more challenging and competitiveand thirst for innovation is increasing.

Awareness of customer on sustainability raw material and change of fashion trends andinnovation offered creates new dimension of denim business. We follow strategy of DesignInnovation and Sustainability and more research is being done in this dimension to keepbusiness predictable sustainable and profitable and to de-risk our product portfolio.

As a part of strategy Sustainability is always on top of any development. Successfultrials done to make denim fabric using ring yarn from the cotton fiber extracted out ofused denim garments. A full proof chain is established to get the fiber from used garmentsfrom certified and reliable sources. Till date the technology set to make open end yarns.These fiber and yarn are certified by Global Recycled Standard. The sources are certifiedby Control Union. These category products were launched with "Renaissance"branding.

The Dual Core Ring Spinning Technology upgraded with scientific controls to make veryhigh quality yarns. These yarns help to make very high stretch denim fabrics that retainshapes after multiple stretch.

Gollar make preparatory machine added to finishing area. The machine is custom designedto perform different processes like desizing scouring bleaching single boxcaustisization reactive dyeing sulphur dyeing. This machine has added flexibility tosystem to carry out multiple finishes for out sourced fabric. Combination of thistechnology with existing Neo Technology helps to create new categories for men’s andwomen’s top and bottom wt.

With the same technology reactive dyed fabrics added to the basket to give Stay Blueand Stay Black. The denim can be washed industrially and after that it does not fed togive permanent look un-like conventional denim which gets faded on long term usage.

Denim is changing dimensions with addition of different class of fabric with Indigosensibility. Woven knit like fabrics are in trend in Indian and International market."Regalia" category added to product basket which satisfies the need of Indigoknitted T shirt and top weights.

Water repellent denim developed with ecofriendly Per fluorinated chemicals freechemistry. This satisfies the need of fashion denim with performance.

New blends of Modal Cotton introduced to product basket. This fabric due to itsinherent property of softness gives very good hand feel to women’s high stretchskinny garments. Wool-Cotton blend is successfully tested for Denim to create fabric withwarm retention for cold climates.

New dimensions to authentic Selvedge Denim with the current trend new bi-stretch andwarp stretch selvedge denim made. These fabrics are highly flexible and give very goodcomfort on wearing due to four way stretch. Also it satisfies the fashion need withauthentic selvedge.

Increase of good business relationship and to co-create innovation a world classwashing development lab is created. This infrastructure has opened new ways to work veryclosely with designers of top brands. The lab is equipped with the best technologyavailable for washing.

Shirting Business- Santej

Development of fabrics with Recycle poly Scafe Celliant BCI Tencel Sorona Bembergetc. focusing towards sustainability.

Development of fabric with Coolmax Thermolite and all season performance fiber.

Developing Bi-Stretch and super stretch products.

Developing finer count products.

Development of Sustainable & eco-friendly substitutes of special finishes likeflame retardant oil-water repellant resin application etc.

Advanced Materials Division - Santej

Development of woven and non-woven filtration fabrics for chemical pharmaceuticalmining power cement and steel industries. o State of art warping weaving ad processingfacility to develop these fabrics. Arvind’s technical marketing and productdevelopment team works with customers to provide complete solution. Arvind has a jointventure with Japanese company to manufacture nonwoven fabrics for hot-gas and liquidfiltration. o Have developed woven fabrics for Oil and water filtration. o Have developedNonwoven fabrics for meeting pollution control norms of <50 mg/cu.M emission.

Development of Fire retardant fabrics and garments for steel safety services and metalplants. o Arvind leverages its spinning weaving processing and garmenting expertise tosupply fabrics and garment in this segment. o Have developed fabrics which are metalsplash resistant.

Development of composites for infrastructure application is being conducted.

Have developed polyester based fabrics for conveyor belting application. These fabricsare used to make belts for mining application.

II. Benefits derived as a result of the above efforts :

Product development value addition cost reduction sustainable and environmentfriendly products and entry into big brands.

III. Information regarding technology imported during the three years :

Technology imported : 1. Development of Nonwoven fabrics for Hot-gas filtration application from Japan.
2. Yarn sheet dyeing under Nitrogen Atmosphere.
3. Stable and unstable Foam Coating Machine and Paste Coating Machine.
Year of Import : 1. 2014-15
2. 2013-14
3. 2012-13
Has technology been fully absorbed? : 1. Nonwoven fabrics for Hot-gas filtration application absorbed.
2. Yarn sheet dyeing absorbed.
3. Foam coating stable foam and paste Coating absorbed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Total Foreign Exchange used and earned:

Rs in crores
2015-16 2014-15
Total foreign exchange used 524.44 663.42
Total foreign exchange earned 2053.49 2145.89

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