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Arvind Fashions Ltd.

BSE: 542484 Sector: Others
NSE: ARVINDFASN ISIN Code: INE955V01021
BSE 00:00 | 12 May 141.00 -1.25
(-0.88%)
OPEN

140.55

HIGH

144.25

LOW

140.10

NSE 00:00 | 12 May 140.95 -1.60
(-1.12%)
OPEN

142.60

HIGH

144.50

LOW

140.10

OPEN 140.55
PREVIOUS CLOSE 142.25
VOLUME 18776
52-Week high 188.80
52-Week low 107.95
P/E 49.30
Mkt Cap.(Rs cr) 1,391
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 140.55
CLOSE 142.25
VOLUME 18776
52-Week high 188.80
52-Week low 107.95
P/E 49.30
Mkt Cap.(Rs cr) 1,391
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Arvind Fashions Ltd. (ARVINDFASN) - Director Report

Company director report

To the Members Arvind Fashions Limited

Your Directors are pleased to present the Directors Report of the Company together withthe audited accounts for the financial year ended March 31 2019.

1. Financial Highlights

The Company's financial performances for the year under review along with previousyear's figures are given hereunder:

(र.in Crores)

Particulars

Standalone

Consolidated

2018-19 2017-18* 2018-19 2017-18*
Revenue from operations (Net) 1009.90 1000.94 4643.86 4218.90
Profit/(Loss) Before Interest Depreciation Tax & Exceptional Items 95.51 95.27 292.25 241.86
Less: Finance Cost 17.98 9.78 126.21 91.34
Profit/(Loss) Before Depreciation Tax & Exceptional Items 77-53 85.49 166.04 150.52
Less: Depreciation/Amortization 15.30 11.49 153.16 138.95
Profit/(Loss) before exceptional items & tax 62.23 74.00 12.88 11.57
Less: Exceptional items - - - -
Profit/(Loss) before tax 62.23 74.00 12.88 11.57
Less: Current tax/Deferred tax 0.72 20.61 (8.60) (1.35)
Profit/(Loss) after Tax 61.51 53.39 21.48 12.92
Add: Other Comprehensive Income (1.42)

(.7)

(6.68) 88.71
Profit/(Loss) after Tax and OCI 60.09 53.32 14.80 101.63
Profit /(Loss) after tax carried over to Balance Sheet 60.09 53.32 14.80 101.63
Proposed Dividend - - - -
Transfer to General Reserve - - - -

* W.e.f April 1 2018 the Company has adopted Ind AS 115 - "Revenue fromcontracts with customers" under the full retrospective approach. Accordingly thecomparatives have been adjusted to give the effect of Ind AS 115. The effect on adoptionof Ind AS 115 was insignificant on the financial results.

2. Review of Business Operations

Your Company has posted Revenue from operations (Net) for the current year Consolidatedat र. 4643.86 crores which was at र. 4218.90 crores during the previous year.The Profit before interest depreciation tax and exceptional items for the current yearConsolidated stands at र. 292.25 crores which was at र. 241.86 crores during theprevious year.

The year under review was challenging on many fronts. Your company has completed yetanother significant year in which it has achieved a sustained growth in terms of Turnoverand increase in profitability.

3. Scheme of Arrangement and Listing of Shares

The Composite Scheme of Arrangement amongst Arvind Limited ("Arvind") andArvind Fashions Limited ("Arvind Fashions") and Anveshan Heavy EngineeringLimited ("Anveshan") and The Anup Engineering Limited ("Anup") andtheir respective shareholders and creditors under Sections 230 - 232 read with Section 66and other applicable provisions of the Companies Act 2013 has been sanctioned by theNational Company Law Tribunal Bench at Ahmedabad (NCLT) vide its order dated 26th October2018. Branded Apparel Undertaking from Arvind Limited to Arvind Fashions was demerged witheffect from November 30 2018 (i.e Appointed Date). Subsequent to the Demerger the Companygot listed its equity shares with BSE Limited and National Stock Exchange of India Limitedon March 08 2019.

4. Extract of Annual Return

An extract of Annual Return in Form MGT-9 as on March 31 2019 is enclosed as anAnnexure-A to this Report.

5. Board Meetings held during the year

The Company had held four Board meetings during the financial year under review on03/05/2018 26/07/2018 29/10/2018 and 12/02/2019.

6. Directors' Responsibility Statement

The Directors hereby make the following Responsibility Statement as required by Section134(3)(c) of the Companies Act 2013:

a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss account of the company for that period.

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the annual accounts on a going concern basis.

e) They have laid down internal financial controls which are adequate and areoperating effectively.

f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

7. Explanation or Comments on Qualifications Reservations or Adverse Remarks orDisclaimers made by the Auditors and the Practicing Company Secretary in their Reports Therewere no qualifications reservations or adverse remarks made either by the StatutoryAuditors or by the Practicing Company Secretary in their respective reports.

8. Particulars of Loans guarantees or investments under Section 186 of the CompaniesAct 2013

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.

9. Related Party Transactions under Section 188 of the Companies Act 2013

All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the SEBI (LODR) Regulations. There are no materially significant relatedparty transactions made by the Company with Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict with the interest of the Company at largeor which warrants the approval of the shareholders. Accordingly no transactions are beingreported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014. However the details of the transactions with RelatedParty are provided in the Company's financial statements in accordance with the AccountingStandards.

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 at

https://www.arvindfashions.com/wp-content/uploads/2018/11/AFL-

RPT-Policy.pdf

10. Dividend

The profits for the year has been retained to invest in expanding Business of theCompany hence your directors did not declare any dividend for the year ended March 312019.

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 your Company has formulated a DividendDistribution Policy and the same is available on the Company's Website at https://www.arvindfashions.com/wp-content/uploads/2018/11/AFL-Dividend-Distribution-Policy.pdf

11. Material changes and commitments affecting the financial position of the Companywhich have occurred between March 31 2019 and May 16 2019 (date of the Report)

There were no material changes and commitments affecting the financial position of theCompany between the end of financial year (March 31 2019) and the date of the Report (May16 2019).

12. Information Conservation of Energy Absorption of technology and Foreign ExchangeEarnings and Outgo.

i) Conservation of Energy

Company has shifted -80% of electricity consumption in the corporate office to solarpower. Company has entered into an open access agreement with a third party to supply 14lakh kWh of solar power per annum. This initiative will help us reduce -1300 tons ofcarbon dioxide emissions per annum from our operations. Company is also exploring thepotential to shift to solar energy for all its warehouses and stores.

ii) Absorption of technology

The Company has not absorbed any technology.

iii) Foreign Exchange Earnings and Outgo

Amount in र.
Particulars 2018-2019 2017-2018
Earning in Foreign Currency 147454798 203751561
Expenditure in Foreign Currency 316653274 316681181

13. Nomination & Remuneration Policy of the Company

The Board has on the recommendation of the Nomination and 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 and is also available on theCompany's website at

https://www.arvindfashions.com/wp-content/uploads/2019/05/Nomination-and-Remuneration-Policy.pdf

14. Statement concerning development and implementation of Risk Management policy ofthe company

The Board has framed a policy to identify assess monitor and mitigate various risksto key business objectives. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The RiskManagement Policy is available on the Company's website at

https://www.arvindfashions.com/wp-content/uploads/20i9/03/Risk-Management-Policy.pdf

15. Corporate Social Responsibility (CSR)

The Annual Report on CSR Activities in prescribed format including details of CorporateSocial Responsibility Initiatives is enclosed as an Annexure-B.

16. Board Evaluation

Pursuant to the provisions of the Companies Act 2013 the Board of Directors("Board") has carried out an annual evaluation of its own performance and thatof its Committees and individual Directors. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.

17. Change In the nature of the Business

There was no change in the nature of the business during the year under review

18. Directors & Key Managerial Personnel

As per the provisions of Section 152 (6) of the Companies Act 2013 Mr. SanjaybhaiShrenikbhai Lalbhai (DIN 00008329) will retire by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment as the Director of theCompany.

During the year under review Mr. Nagesh Dinkar Pinge (DIN: 00062900) Mr. VallabhRoopchand Bhanshali (DIN: 00184775) Mr. Achal Anil Bakeri (DIN: 00397573) and Ms. AbantiSankaranarayanan (DIN: 01788443) were appointed as an Independent Director of the Companyw.e.f. from October 10 2018 for a term of five years subject to the approval ofshareholders in the ensuing annual general meeting.

During the year under review Ms. Nithya Easwaran (DIN: 03605392) was appointed as anAdditional Director of the Company w.e.f. October 10 2018 and she holds office until theensuing Annual General Meeting of the Company.

During the year under review Ms. Renuka Ramanath (DIN: 00147182) and Ms. NithyaEaswaran (DIN: 03605392) have resigned as the Nominee Director of the Company w.e.f.October 10 2019 and Mr. Kamal Shamlal Singal has resigned as an Independent Director ofthe Company w.e.f. October 10 2019.

The Independent Directors have submitted a declaration that each of them meet thecriteria for independence as provided in Section 149 (6) of the Companies Act 2013 andRegulation i6(i)(b) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and there has been no change in thecircumstances which may affect their status as an Independent Director during the year.

As per the provisions of Section 203 of the Companies Act 2013 Mr. Suresh Jayaraman-Managing Director & CEO Mr. Pramod Kumar Gupta Chief Financial Officer and Mr. VijayKumar B S Company Secretary are the key managerial personnel of the Company.

19. Statutory Auditors

At the Annual General Meeting ("AGM") held on August 04 2017 M/s. Sorab S.Engineer & Co Chartered Accountants (ICAI Firm Registration No. 110417W) wereappointed as statutory auditors for a period of five years. The Report given by theAuditors on the financial statements of the Company is part of the Annual Report.

20. Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s. N. V. Kathiria & Associates Company Secretary inPractice Ahmadabad to conduct the Secretarial Audit of the Company for the financial yearended March 31 2019. The Secretarial Audit Report (in Form MR-3) of the Company and itsmaterial Subsidiary Company is enclosed as an Annexure-C to this Report.

21. Subsidiaries /Joint Ventures / Associates

As on March 31 2019 the Company has 2 subsidiary companies and 2 Joint VentureCompanies.

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 financialstatements in respect of each of the subsidiary are also available on the website of theCompany at www.arvindfashions.com

The Company has framed a policy for determining material subsidiaries which has beenuploaded on company's website at https://www.arvindfashions.com/wp-content/uploads/2018/11/AFL-Policy-on-Material-Subsidiaries.pdf

22. Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Indian Accounting Standards issued by the Institute of Chartered Accountants ofIndia and form part of this Annual Report.

23. Deposits

During the year under review your Company has neither accepted nor renewed anydeposits within the meaning of provisions of Chapter V - Acceptance of Deposits byCompanies of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014.

24. Significant and Material Orders Passed by the Regulators or Courts or Tribunalsimpacting the Going Concern status of the Company

There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company

25. Internal financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements and dedicated Internal Audit team to ensure its adequacy. The scopeand authority of the Internal Audit function is well defined in the organisation. Tomaintain its objectivity and independence the Internal Audit function reports to theChairman of the Audit Committee of the Board. The Internal Audit Department monitors andevaluates the efficacy and adequacy of internal control systems in the Company itscompliance with operating systems accounting procedures and policies of the Company.Based on the report of the Internal Audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions suggested are presented to the Audit Committee of theBoard.

The Statutory Auditor of the Company has also given an opinion that the InternalFinancial Controls over Financial Reporting are adequate and are operating effectively atthe end of the financial year.

26. Disclosure of composition of Audit Committee

The Board has re-constituted the Audit Committee during the year under review andconsists of the following Members

i) Mr. Nilesh Shah -Independent Director

ii) Mr. Nagesh Pinge -Independent Director

iii) Ms. Abanti Sankaranarayanan -Independent Director

iv) Mr. Jayesh Shah -Non-Executive Director

v) Ms. Nithya Easwaran -Non-Executive Director

27. Transfer of Unclaimed Dividend to Investor Education and Protection Fund

The Provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid since incorporation of the Company.

28. Share Capital

During the year under review Pursuant to composite scheme of arrangement amongstArvind Limited and Arvind Fashions Limited and Anveshan Heavy Engineering Limited and TheAnup Engineering Limited and their respective Shareholders and Creditors approved by theHon'ble National Company Law Tribunal ("NCLT") Bench at Ahmedabad on October26 2018 Arvind Fashions Limited had consolidated Face Value of 2 Equity Shares ofर. 2 each to 1 Equity Shares of र. 4 each increased Authorised Capital of theCompany from र. 25 Crores issued to र. 75 Crores and allotted 51723414 shareson 04.12.2018 to the shareholders of Arvind Limited after extinguishing Arvind Limitedshareholding in the Company [i.e 1 (One) fully paid up equity share of र. 4/- (four)each of the Company for every 5 (Five) equity shares of र. 10/- (Rupees Ten) eachheld by such shareholder in the Arvind Limited on Record Date]. At the end of the year thepaid up Equity Share Capital of the Company stood at र. 231978692/- consisting of57994673 equity shares of र. 4/- each

A. Issue of Equity Shares with differential rights - No such issue and accordingly nocompliance

B. Issue of Sweat Equity Shares - No such issue and accordingly no compliance

C. Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees - Not applicable

29. Employee Stock Option Schemes (ESOS)

The Company has instituted the Employees Stock Option Scheme (ESOS) 2016 and 2018 togrant equity based incentives to certain eligible employees and directors of the Companyand its subsidiary and holding companies. During the year under review the Company hasgranted stock options to eligible employees. Disclosures in compliance with Section 62 ofthe Companies Act 2013 and Rule 12 of Companies (Share Capital and Debentures) Rules2014 and the Securities and Exchange Board of India (Share based Employee Benefits)Regulations 2014 are set out in Annexure -D to this report.

30. Vigil Mechanism

The Company has a vigil mechanism named Whistle Blower Policy to deal with instances ofunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct or ethics policy. The details of the Whistle Blower Policy are explained in theCorporate Governance Report and also posted on the website of the Company at https://www.arvindfashions.com/wp-content/uploads/2019/04/Whistleblower-Policy.pdf

31. Familiarization programme for the independent directors

In compliance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a familiarization programmefor the Independent Directors to familiarize them with their role rights andresponsibility as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The details of the familiarization programme areexplained in the Corporate Governance Report are also available on the Company's websiteat https://www.arvindfashions.com/wp-content/uploads/2018/11/AFL-Familiarisation-Programs-of-Independent-Directors.pdf

32. Corporate Governance Report and Management Discussion & Analysis

The Corporate Governance Report and Management Discussion & Analysis which formpart of this Report together with the Certificate from the auditors of the Companyregarding compliance of conditions of Corporate Governance as stipulated in Schedule V ofRegulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

33. Business Responsibility Report

The Business Responsibility Report for the year ended March 31 2019 as stipulatedunder Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed which forms part of this Annual Report.

34. 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 Annual Report andAccounts are being sent to the Members and others entitled thereto excluding theinformation on employees' particulars which is available for inspection by the Members atthe 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-E to this report.

35. 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 2018-19 the Company has not received any complaintson sexual harassment.

36. Acknowledgement

The Directors wish to express their appreciation for the continued support of bankersfinancial institutions customers and various Government agencies. The Directors alsowish to thank all the employees for their contribution support and continued co-operationthroughout the year.

For and on behalf of the Board of Arvind Fashions Limited
Sd/- Sd/-
Mr. Sanjay S. Lalbhai Mr. Suresh Jayaraman
(DIN 100008329) (DIN 103033110)
Chairman & Director Managing Director & CEO
Place: Ahmedabad
Date: 16/05/2019

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