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Arvind Ltd.

BSE: 500101 Sector: Industrials
NSE: ARVIND ISIN Code: INE034A01011
BSE 09:23 | 14 Oct 42.95 0.15
(0.35%)
OPEN

42.80

HIGH

43.30

LOW

42.75

NSE 09:07 | 14 Oct 43.00 0.15
(0.35%)
OPEN

43.00

HIGH

43.00

LOW

43.00

OPEN 42.80
PREVIOUS CLOSE 42.80
VOLUME 3886
52-Week high 125.02
52-Week low 42.40
P/E 4.79
Mkt Cap.(Rs cr) 1,111
Buy Price 42.95
Buy Qty 532.00
Sell Price 43.15
Sell Qty 240.00
OPEN 42.80
CLOSE 42.80
VOLUME 3886
52-Week high 125.02
52-Week low 42.40
P/E 4.79
Mkt Cap.(Rs cr) 1,111
Buy Price 42.95
Buy Qty 532.00
Sell Price 43.15
Sell Qty 240.00

Arvind Ltd. (ARVIND) - Auditors Report

Company auditors report

TO THE MEMBERS OF ARVIND LIMITED

Opinion

We have audited the accompanying standalone financial statements ofArvind Limited ("the Company") which comprise the Balance Sheet as at March 312019 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019its profit total comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Demerger of Brands and Engineering divisions from the Company

Key Audit Matter Description

During the year a Scheme of arrangement was approved between thecompany and its subsidiary companies Arvind Fashions Limited ("AFL) and The AnupEngineering Limited ("AEL") whereby it has proposed to demerge "BrandedApparel Undertaking" to AFL with effective date of the Scheme i.e. November 29 2018and "Engineering undertaking" to AEL with effect from January 01 2018.

Accounting treatment is provided by the management for transferring ofassets and liabilities of the Brand Apparel and Engineering undertaking to subsidiarycompanies and accordingly the impact is given in the financial statement for year ended onMarch 31 2019.

Thus it is considered to be key audit matter as this is significantevent which has happened during the year and it required compliance of scheme andapplicable Ind AS.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures includes obtaining an understanding of thetransaction. We have read the approved scheme of arrangement related to demerger andidentified pertinent terms relevant to the accounting for the transaction. We assessed theCompany's conclusion as regard business combination accounting in accordance with AppendixC to IND AS 103 with respect to Demerger scheme.

These conclusion included:

• the transfer of assets and liabilities at cost to the demergedentity as the entity were under common control.

• Impact in reserves and surplus on book value of net assetstransferred to the demerged entity.

In determining the treatment of the demerger we tested following:

• the arithmetic accuracy of management's calculations for givingeffect of the scheme in standalone financial statements

• tested the bifurcation of profit and loss into continued anddiscontinued business having engineering and brand division

• tested the adjustment given in the reserves and surplus for netassets transferred to the demerged entity

• tested the inter business transaction between demerged businessand continued business.

Upgradation of Accounting software

Key Audit Matter Description

During the year Company has upgraded its accounting software to SAPHANA with effect from October 1 2018 and other erstwhile systems have been discontinued.

Migration to S/4 HANA is a major upgrade to the existing coreenterprise application system resulting into a significant change to the financialaccounting configuration which is the core for financial reporting including preparationof standalone financial statements.

Risks identified as emanating from the aforesaid change were (i)Inappropriate changes made to the application systems or programs that contain relevantautomated controls (i.e. configurable settings automated algorithms automatedcalculations and automated data extraction) and/or report logic and (ii) Systems notadequately configured or updated to restrict system access to authorized users.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures included obtaining detailed project plan and SAPGovernance framework for transition to new SAP landscape. We involved InformationTechnology (IT) Specialists as part of the audit team to perform audit procedures inrespect of this upgradation.

Considering upgradation stabilization period we have planned to testit predominantly with transaction level manual controls followed by the entity.

We have reviewed manual controls implemented and tested itseffectiveness to ensure integrity of data processed and used in preparation of financialstatements.

Information Other than the Financial Statements and Auditor'sReport Thereon

• The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Director's Report including Annexuresto Director's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statements andour auditor's report thereon.

• Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

• In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

If based on the work we have performed on the other information thatwe obtained prior to the date of this auditor's report we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)0) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31st March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2019 from being appointed as a director interms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.

(ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

(iii) Following are the instances of delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company

Year for which the amount pertains Amount involved C In crores) Number of days delay in depositing the amount Date of deposit
1986-87 e 40539)* 616 15-06-2018
1995-96 e 50500)* 607 06-06-2018
1996-97 र 0.02 607 06-06-2018

*Amount in bracket represents absolute Rupees

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No: 117366W/W-100018)
Kartikeya Raval
Ahmedabad Partner
May 17 2019 (Membership no. 106189)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph i(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Arvind Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No: 117366W/W-100018)
Kartikeya Raval
Ahmedabad Partner
May 17 2019 (Membership no. 106189)