Description
The Audit Committee of the Company comprises of 3 members, all of whom are Non-Executive Independent Directors. Mr. Munesh Khanna, an Independent Director acts as Chairman of the Committee. The Committee members are professionals having requisite experience in the fields of Finance and Accounts, Banking and Management.
Directors
Mr. Sanjay S. Lalbhai Chairman & Managing Director
Mr. Punit S. Lalbhai Executive Director
Mr. Kulin S. Lalbhai Executive Director
Mr. Jayesh K. Shah Director & Chief Financial Ofcer
Mr. Sudhir Mehta
Dr. Bakul Dholakia
Mr. Munesh Khanna
Ms. Renuka Ramnath
Mr. Prabhakar Dalal Nominated by Export-Import Bank of India
Company Secretary
Mr. R.V. Bhimani
Bankers
State Bank of India
Bank of Baroda
UCO Bank
State Bank of Patiala
HDFC Bank Ltd.
Standard Chartered Bank
ICICI Bank Ltd.
Export-Import Bank of India
Axis Bank Ltd.
State Bank of Hyderabad
IDBI Bank Ltd.
Canara Bank
Auditors
Sorab S. Engineer & Co.
Chartered Accountants
Ismail Building
381, Dr. D. Naoroji Road
Fort, Mumbai-400 001.
Registered Ofce
Naroda Road
Ahmedabad - 380025
Gujarat, India.
CONTENTS
Notice .............................................................................................. 1
Directors’ Report ...........................................................................2
Corporate Governance Report .................................................. 5
Management Discussion and Analysis .................................... 18
Strategy & programmes for
“Corporate Social Responsibility” 2012-13 ............................ 24
Auditors’ Report ..........................................................................25
Balance Sheet .............................................................................. 28
Proft & Loss Account ................................................................ 29
Cash Flow Statement ................................................................. 30
Notes to Financial Statements ................................................. 32
Consolidated Financial Statements ........................................ 57
Location & Sites .......................................................................... 82
REGISTRARS AND TRANSFER AGENTS
Sharepro Services (India) Private Limited
416-420, 4th Floor, Devnandan Mall
Opp. Sanyas Ashram, Ellisbridge
Ahmedabad -380 oo6.
Phone Nos.: 079-26582381 to 84
Fax No.: 079-26582385
E-mail: [email protected]
1
N O T I C E
NOTICE is hereby given that the Annual General Meeting of the members
of the Company will be held on Monday, the 29
th
July, 2013 at 9:30 a.m. at
Thakorebhai Desai Hall, Near Law Garden, Ellisbridge, Ahmedabad- 380 006
to transact the following Business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Statements of Accounts
for the fnancial year ended on 31
st
March, 2013 and the Reports of the
Directors and Auditors thereon.
2. To declare a dividend on equity shares.
3. To appoint a Director in place of Dr. Bakul Dholakia, who retires by
rotation in terms of Article 129 of the Articles of Association of the
Company and being eligible, ofers himself for reappointment.
4. To appoint a Director in place of Ms. Renuka Ramnath, who retires by
rotation in terms of Article 129 of the Articles of Association of the
Company and being eligible, ofers herself for reappointment.
5. To appoint auditors to hold ofce from the conclusion of this Annual
General Meeting until the conclusion of the next Annual General
Meeting and authorize the Board to fx their remuneration.
Registered Ofce: By Order of the Board
Naroda Road
Ahmedabad-380025 SANJAY S. LALBHAI
CHAIRMAN & MANAGING DIRECTOR
Date: 16
th
May, 2013
NOTES
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS
ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD
OF HIMSELF/HERSELF AND A PROXY NEED NOT BE A MEMBER.
2. Proxies, in order to be efective, should be duly stamped, completed,
signed and deposited at the Registered Ofce of the Company not
less than 48 hours before the meeting.
3. Members are requested to bring their copies of the Annual Report to
the meeting. The Members/Proxies should bring the Attendance Slip
sent herewith duly flled in for attending the meeting.
4. Members intending to require information about Accounts to be
explained in the Meeting are requested to inform the Company at
least 7 days in advance of the Annual General Meeting.
5. The members, holding shares in physical form, are requested to
intimate any change in their addresses or bank details to the
Company or its Registrar and Transfer Agent (RTA) viz. Sharepro
Services (India) Pvt. Ltd., Unit: Arvind Limited, 416-420, 4
th
Floor,
Devnandan Mall, Opp. Sanyas Ashram, Ellisbridge, Ahmedabad - 380
006. Those holding shares in dematerialized form may intimate any
change in their addresses or bank details / mandates to their
Depository Participants (DP) immediately. Members holding shares
in dematerialized form may note that bank details registered against
their respective depository accounts will be used by the Company
for payment of dividend. The Company or its RTA can not act on any
request directly received from any member holding shares in
dematerialized form for any change in such details. Such changes are
to be advised only to the DP of the members.
6. The Register of Members and Share Transfer Books of the Company
will remain closed from Monday, the 22
nd
July, 2013 to Monday, the
29
th
July, 2013 (both days inclusive).
7. The dividend on equity shares for the year 31
st
March, 2013, if
declared at the meeting, will be paid / dispatched on due date
to those members whose names appear on the Company’s Register
of Members on 29
th
July, 2013 or on records of National Securities
Depository Limited and Central Depository Services (India) Limited
as benefcial owners as on 22
nd
July,2013.
8. Pursuant to Section 205C of the Companies Act, 1956, all unclaimed
dividends up to the fnancial year ended 31
st
March, 1998 and for the
fnancial year 2004-05 have been transferred to the Investor
Education and Protection Fund (IEPF) of the Central Government.
The Company did not declare any dividends on equity shares for the
fnancial years 1998-1999 to 2003-2004. Unclaimed and unpaid
dividend for the fnancial year 2005-06 will be transferred to this
fund in the month of November, 2013. Those members who have so
far not encashed their dividend warrants for the fnancial year 2005-
06 are requested to approach the Company or RTA for payment
thereof. Kindly note that once unclaimed and unpaid dividend is
transferred to the Investor Education and Protection Fund, members
will not be entitled to claim such dividend.
9. The Annual Report of the Company for the year ended 31st March,
2013 is uploaded on the Company’s website www.arvind.com and
may be accessed by the members.
Registered Ofce: By Order of the Board
Naroda Road
Ahmedabad-380 025 SANJAY S. LALBHAI
CHAIRMAN & MANAGING DIRECTOR
Date : 16
th
May, 2013
2
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
DIRECTORS’ REPORT
To the Members,
Your Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1
st
April, 2012 to 31st
March, 2013.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
` in Crores
2012-2013 2011-2012
Turnover & Operating Income 3780.29 3494.12
Proft before Finance Costs,
Depreciation and Amortisation
Expenses, Extraordinary Items & Tax
Expenses
680.15 637.05
Less : Finance costs 268.44 270.25
Proft before Depreciation and
Amortisation Expenses, Extraordinary
Items & Tax Expenses
411.71 366.80
Less : Depreciation and Amortisation Expenses 150.49 130.51
Proft before Extraordinary Items and
Tax Expenses
261.22 236.29
Add : Extraordinary Items 0.00 251.80
Proft Before Tax 261.22 488.09
Less : Current Tax 53.79 85.15
Add: MAT Credit Entitlement (53.79) (31.29)
Proft for the year 261.22 434.23
Balance of Proft brought forward 799.67 450.12
Add : Proft of Amalgamated Company 0.00 1.62
Less: Amount transferred to Statement of
Proft and Loss on account of Amalgamation
0.00 56.31
Balance available for appropriation 1060.89 829.66
Less : Appropriation :
Transfer to General Reserve 20.00 NIL
Proposed Dividend on Equity Shares 42.58 25.80
Tax on Dividend 7.24 4.19
Closing Balance 991.07 799.67
2. OPERATIONS
The macroeconomic environment posed many challenges for the
company during the year under review. On domestic front, stagnant
economy, high infation and higher interest rates dampened the
consumer sentiments. On global front Euro Zone continued to be in
turmoil. On the top of challenging macroeconomic scenario, our
company witnessed unprecedented event of strike at two of its
manufacturing plants in the month of June, 2012 leading to loss of
production. It is heartening to note that despite such a challenging
environment, our Company has closed the fnancial year 2012-13 with
8% growth in sales and 7% growth in Operating Earnings before
Interest, Depreciation and Taxes. (Operating EBITDA). PAT
(excluding Exceptional Income) has shown a growth of 11% compared
to the previous year.
The growth in revenue was mainly led by woven fabric division which
registered growth of 28% in volume and 30% in revenue. The
Operational Excellence Drive to improve the productivity has
resulted into higher operating margins for woven business. While
denim fabric volume was lower by 7% on account of loss of
production during strike period, it has maintained its proftability
under highly competitive market scenario. Denim Business continues
with its strategy of improving product and customer mix so as to
achieve higher contribution per meter.
A detailed analysis of the fnancial results is given in the Management
Discussion and Analysis report which forms part of this report.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of ` 1.65 per
equity share of `10 each.
4. FINANCE
The Company has repaid the installments of Term Loans amounting
to ` 195 crores during the current year.
The Company has also made fresh borrowings of ` 434 Crores for
funding capital expenditure and other requirements. Long Term
Debt of the Company stands to ` 1104 crores as on 31
st
March, 2013.
5. EMOLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme-
(ESOS) to grant equity based incentives to certain eligible employees
and directors of the Company and its subsidiary companies. 27.50
lacs and 2.00 lacs options were granted to certain eligible employees
and directors of the company and its subsidiary companies by the
Remuneration Committee at an exercise price of `14.65 per option
and `73.70 per option respectively, representing one share for each
option upon exercise. The details as per the requirements of SEBI
Guidelines are annexed and form part of this report.
6. SUBSIDIARIES
A detailed discussion on subsidiary companies and their performance
during the year is contained in the Management Discussion and
Analysis Report which forms part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, the Company has prepared
Consolidated Financial Statements of the Company and its
subsidiaries are included in the Annual Report.
7. DIRECTORS
Mr. G.M.Yadwadkar, a Nominee Director of IDBI Bank Ltd. has ceased
to be a Director with efect from 1
st
August, 2012 due to withdrawal of
his nomination by IDBI Bank Ltd. The Board places on record its deep
sense of appreciation for the valuable services rendered by Mr.
G.M.Yadwadkar during his tenure as Director.
Mr. Punit Lalbhai and Mr. Kulin Lalbhai were appointed as Additional
Directors of the Company with efect from 26
th
July, 2012. They were
also appointed as Executive Directors of the Company for a period
commencing from 1
st
August, 2012 to 31st July, 2017.
At the ensuing Annual General Meeting, Dr. Bakul Dholakia and Ms.
Renuka Ramnath, Directors of the Company, retire by rotation, but
being eligible, ofer themselves for re-appointment.
3
8. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate
Governance and has taken adequate steps to ensure that the
requirements of Corporate Governance as laid down in Clause 49 of
the Listing Agreement are complied with.
A separate report on Corporate Governance and a Management
Discussion and Analysis Report are being published as a part of the
Annual Report of the Company.
The Auditors of the Company have certifed that conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement are complied by the Company and their Certifcate is
annexed to the Report on Corporate Governance.
9. RESPONSIBILITY STATEMENT
The Directors confrm that:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no
material departures from the applicable accounting standards;
2. such accounting policies have been selected and applied
consistently and such judgments and estimates have been
made as are reasonable and prudent so as to give a true and fair
view of the state of afairs of the Company at the end of the
fnancial year ended on 31
st
March, 2013 and of the proft of the
Company for that period;
3. proper and sufcient care has been taken for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the
assets of the Company and for preventing and detecting fraud
and other irregularities; and
4. the statements of accounts for the year ended on 31
st
March,
2013 have been prepared on a going concern basis.
10. FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the
year. There are no outstanding and overdue deposits as at 31
st
March,
2013.
11. INFORMATION REGARDING CONSERVATION OF ENERGY
ETC. AND EMPLOYEES
Information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 and under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975, as amended from time to time, forms part
of this report. However, as per the provisions of Section 219 (1)(b)
(iv), the report and accounts are being sent to all shareholders of the
Company excluding the information relating to conservation of
energy, technology absorption and foreign exchange earning and
outgo, and the statement of particulars of employees. Any
shareholder interested in obtaining such particulars may inspect the
same at the Registered Ofce of the Company or write to the
Secretary for a copy.
12. AUDITORS
The Auditors, Sorab S. Engineer & Co., retire and ofer themselves for
re-appointment. It is proposed that Sorab S. Engineer & Co., be re-
appointed as auditors of the Company. You are requested to appoint
the auditors and fx their remuneration.
13. ACKNOWLEDGEMENT
Your Directors would like to appreciate the eforts of the Company’s
employees for their continued co-operation and unstinted support
extended to the company. The support of all lenders including
Financial Institutions, Commercial Banks, Overseas Banks etc. and
vendors, investors, business associates, Government of India and
State Government and various departments and agencies has also
been invaluable to the Company’s performance and your Directors
take this opportunity to appreciate it deeply.
By Order of the Board
Date: 16
th
May, 2013 Sanjay S. Lalbhai
Place: Ahmedabad. Chairman and Managing Director
4
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Annexure to the Directors’ Report
Disclosures under Clause 12.1 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 :
1 Number of Options granted - ESOS 2008 Tranche-II 2,00,000 options
2 Pricing Formula Market Price as defned under SEBI guidelines.
3 Number of Options vested 66,660
4 Number of Options exercised NIL
5 Total number of shares arising out of exercise of Options NIL
6 Number of Options lapsed NIL
7 Variation in the terms of the Options No variations made.
8 Money realized by exercise of Options NIL
9 Total number of Options in force 2,00,000 options.
10 Employee wise details of options granted to -
a Senior Management Personnel Nil
b Any other employee who receives a grant in any one year of option amounting to
5% or more of options granted during the year
Nil
c Identifed employees who were granted options, during any one year, equal
to or exceeding 1% of the issued capital (excluding outstanding warrants and
conversions) of the company at the time of grant
Nil
11 Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option
calculated in accordance with Accounting Standard (AS) 20 – Earnings Per Share
` 10.11
12 Where the company has calculated the employee compensation cost using
the intrinsic value of the stock options, the diference 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 diference on profts and on EPS of the company shall also be
disclosed.
Company accounts for options under the intrinsic value
method. Since options are granted at market price, the
intrinsic value is Nil.
However, if fair value of the options (computed using
the Black Scholes Option Pricing Model) was to be used
for calculating the accounting value of the option, the
compensation cost would have been ` 23.00 lacs and the
profts would have been lesser by ` 23.00 lacs.
Basic and diluted EPS would have reduced to ` 10.12 and
` 10.11 respectively.
13a Weighted average exercise prices for options whose exercise price –
i. equals market price
ii. exceeds market price
iii. is less than market price
` 73.70
Nil
Nil
13b Weighted fair values for options whose exercise price –
i. equals market price
ii. exceeds market price
iii. is less than market price
` 38.18
Nil
Nil
14 A description of the method and signifcant assumptions used during the year
to estimate the fair values of options, including the following weighted-average
information: –
i. risk free rate
ii. expected life
iii. expected volatility
iv. expected dividends and
v. the price of the underlying share in the market at the time of option grant.
Black Scholes Option Pricing Model. The assumptions are as
under –
7.57%
4.01 years
62.46%
0.00%
` 73.70
5
CORPORATE GOVERNANCE REPORT
COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE
Corporate governance at Arvind is a value-based framework to manage our Company afairs in a fair and transparent manner. As a responsible corporation,
we use this framework to maintain accountability in all our afairs and employ democratic and open processes. We have evolved guidelines and best
practices over the years to ensure timely and accurate disclosure of information regarding our fnancials, performance, leadership and governance of
the Company.
Our corporate governance philosophy is based on the following principles :
• Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law.
• Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose.
• Make a clear distinction between personal conveniences and corporate resources.
• Communicate externally, in a truthful manner, about how the Company is run internally.
• Have a simple and transparent corporate structure driven solely by business needs.
• The Management is the trustee of the shareholders’ capital and not the owner.
The Board of Directors (‘the Board’) is at the core of our corporate governance practice and oversees how the Management serves and protects the
long-term interests of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards
of corporate governance. The majority of our Board, 5 out of 9, are independent members. Given below is the report on Corporate Governance at Arvind.
BOARD OF DIRECTORS
Composition of the Board
The Board has 9 Directors, comprising of 1 Chairman and Managing Director, 3 Executive Directors viz. 1 Director and Chief Financial Ofcer and 2 Executive
Directors and 5 Non- Executive Directors. The Non-Executive Directors who are also Independent Directors are leading professionals from varied felds
who bring in independent judgment to the Board’s discussions and deliberations. The following is the Composition of the Board as at 31
st
March, 2013:
Sr.
No.
Name of Director Executive/Non-executive/Independent No. of other
Directorships in Public
Limited Companies
No. of other Board/
Committees of which
Member / Chairman
1 Mr. Sanjay S. Lalbhai Executive-Chairman & Managing Director 6 -
2 Mr. Jayesh K. Shah Executive-Director and Chief Financial Ofcer 8 -
3 Mr. Punit S. Lalbhai* Executive-Director 1 -
4 Mr. Kulin S. Lalbhai** Executive-Director - -
5 Mr. Sudhir Mehta Non-executive-Independent Director 4 2 as Chairman and 1 as Member
6 Dr. Bakul Dholakia Non-executive-Independent Director 2 4 as Chairman
7 Mr. Prabhakar Dalal Non-executive-Independent &
Nominee Director of EXIM Bank of India
2 -
8 Mr. Munesh Khanna Non-executive-Independent Director 2 1 as Member
9 Ms. Renuka Ramnath Non-executive-Independent Director 3 -
10 Mr. G. M. Yadwadkar+ Non-executive-Independent & Nominee Director of
IDBI Bank Ltd.
- -
* Mr. Punit S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
** Mr. Kulin S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
Board Agenda
The annual calendar of Board and Committee Meetings is agreed upon at the beginning of each year. Meetings are governed by a structured Agenda and
a Board member may bring up any matter for consideration of the meeting in consultation with the Chairman. Agenda papers are generally circulated to
the Board members at least 4-5 working days in advance. Detailed presentations are made at the meetings on all major issues to enable the Board to take
informed decisions. An indicative list of the information placed before the Board during the year is as under:
• Annual Budgets and updates thereon.
• Capital Expenditure Proposals and review of their implementation.
• Quarterly and Annual Results.
• Product-wise Business Performance.
• Business Presentations covering Production, Marketing, Raw Materials, Sales, etc.
6
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
• New Projects and Joint Ventures.
• Sales of Material Nature of Investments, Subsidiaries, Assets, etc. which are not in the normal course of business.
• Performance of Subsidiaries.
• Business Restructuring.
• Legal Proceedings involving the Company.
• Minutes of Meetings of Audit Committee, Management Committee, Remuneration Committee and Investors’ Grievance Committee.
• Materially Important Show Cause Notices, Non-Compliances, if any, etc.
• Other relevant information pertaining to the Company including information detailed in Clause 49 of the Listing Agreement.
Meetings and Attendance
During the year, the Board of Directors met 4 times on 9
th
May, 2012, 26
th
July, 2012, 23
rd
October, 2012 & 30
th
January, 2013. The gap between two Board
Meetings was within the maximum time gap prescribed in Clause 49 of the Listing Agreement. The Attendance of Directors at these Board Meetings and
at the last Annual General Meeting was as under:
Sr.
No.
Name of Director Number of Board Meetings held during the
period when the Director was on the Board
Number of Board
Meetings attended
Whether present at the
previous AGM
1 Mr. Sanjay S. Lalbhai 4 4 Yes
2 Mr. Jayesh K. Shah 4 4 Yes
3 Mr. Punit S. Lalbhai* 3 1 Yes
4 Mr. Kulin S. Lalbhai** 3 3 Yes
5 Mr. Sudhir Mehta 4 3 Yes
6 Dr. Bakul Dholakia 4 4 Yes
7 Mr. Prabhakar Dalal 4 4 No
8 Mr. Munesh Khanna 4 3 No
9 Ms. Renuka Ramnath 4 2 No
10 Mr. G. M. Yadwadkar+ 2 0 No
* Mr. Punit S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
** Mr. Kulin S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
Committees of the Board
The Board of Directors has constituted 4 Committees of the Board viz.
• Audit Committee
• Remuneration Committee
• Investors’ Grievance Committee and
• Management Committee
The Board determines the terms of reference of these Committees from time to time. Meetings of these Committees are convened by the respective
Committee Chairman/Company Secretary. At each Board Meeting, minutes of these Committees are placed before the Directors for their perusal and
noting.
1. Audit Committee
The Audit Committee of the Company comprises of 3 members, all of whom are Non-Executive Independent Directors. Mr. Munesh Khanna, an
Independent Director acts as Chairman of the Committee. The Committee members are professionals having requisite experience in the felds of
Finance and Accounts, Banking and Management.
The Audit Committee met 4 times during the year. The Director and Chief Financial Ofcer and representatives of Internal and Statutory Auditors
are invitees to Audit Committee meetings and the Company Secretary acts as the Secretary of the Audit Committee.
Role
The terms of reference of the Audit Committee are as under:
1. Oversight of the company’s fnancial reporting process and the disclosure of its fnancial information to ensure that the fnancial statement is
correct, sufcient and credible.
2. Recommending to the Board the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the
fxation of audit fees.
3. Approval of payment of statutory auditors for any other services rendered by the statutory auditors.
7
4. Reviewing, with the management, the annual fnancial statements before submission to the board for approval, with particular reference to:
(a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA)
of Section 217 of the Companies Act, 1956.
(b) Changes, if any, in accounting policies and practices and reasons for the same.
(c) Major accounting entries involving estimates based on the exercise of judgment by management.
(d) Signifcant adjustments made in the fnancial statements arising out of audit fndings.
(e) Compliance with listing and other legal requirements relating to fnancial statements.
(f) Disclosure of any related party transactions.
(g) Qualifcations in the draft audit report.
5. Reviewing, with the management, the quarterly fnancial statements before submission to the board for approval.
6. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, stafng and seniority of the
ofcial heading the department, reporting structure coverage and frequency of internal audit.
8. Discussion with internal auditors any signifcant fndings and follow up thereon.
9. Reviewing the fndings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a
failure of internal control systems of a material nature and reporting the matter to the board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to
ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment
of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower mechanism, in case the same is existing.
13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Explanation (i) : The terms “related party transactions” shall have the same meaning as contained in the Accounting Standard 18, Related
Party Transactions, issued by The Institute of Chartered Accountants of India.
Explanation (ii) : If the Company has set up an Audit Committee pursuant to provision of the Companies Act, the said Audit Committee shall
have such additional functions / features as is contained in this clause.
14. Management Discussion and Analysis of fnancial condition and results of operations.
15. Statement of signifcant related party transactions (as defned by the Audit Committee), submitted by management.
16. Management letters / letters of internal control weaknesses issued by the Statutory Auditors.
17. Internal audit reports relating to internal control weaknesses; and
18. The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee.
19. To look into any other matter which may be referred to it by the Board.
20. In addition to the above, the Committee shall have such functions / role / powers as may be specifed in the Companies Act, Listing Agreement
with Stock Exchanges or any other applicable law.
Meetings and Attendance
During the year, 4 Audit Committee Meetings were held on 9
t
h May, 2012, 26
th
July, 2012, 23
rd
October, 2012 & 30
th
January, 2013. The Attendance of
Members at meetings was as under:
Sr.
No.
Name Position Number of Meetings held during the period
when the Member was on the Board
Number of Meetings attended
1 Mr. Munesh Khanna Chairman 4 3
2 Mr. Prabhakar Dalal* Member 4 4
3 Mr. G. M. Yadwadkar+ Member 2 0
4 Dr. Bakul Dholakia Member 4 4
* On 23
rd
October, 2012 the Board of Director of the Company has appointed Mr. Prabhakar Dalal as a chairman of the Audit Committee because of
in absence of Mr. Munesh Khanna
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
2. Remuneration Committee
The Board of Directors of the Company has constituted a Remuneration Committee consisting of 3 Directors, all of whom are Non-Executive
Independent Directors. The Remuneration Committee met twice during the year.
8
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Role
The terms of reference of the Remuneration Committee are as under:
1. To frame company’s policies for compensation and benefts for Executive Directors.
2. To Review and recommend compensation payable to the Executive Directors.
3. To administer and supervise Employee Stock Option Schemes (ESOS) including framing of policies related to ESOS and reviewing grant of
ESOS.
4. To Review HR Policies and initiatives.
Meetings and Attendance
During the year, 2 Meetings was held on 9th May, 2012 & 26th July, 2012. The Attendance of Members at meeting was as under:
Sr.
No.
Name Position Number of Meetings held
during the year
Number of Meetings
attended
1 Mr. Sudhir Mehta Chairman 2 1
2 Mr. Munesh Khanna+ Member 2 2
3 Dr. Bakul Dholakia Member 2 2
+ On 26th July, 2012 the Board of Director of the Company has appointed Mr. Munesh Khanna as a chairman of the Remuneration Committee
because of in absence of Mr. Sudhir Mehta.
Remuneration of Directors
Remuneration of Executive Directors is recommended by the Remuneration Committee and approved by the Board of Directors and the
Shareholders of the Company.
The Remuneration Committee and the Board of Directors at their respective meetings held on 9
th
May, 2012 and shareholders at their Annual
General Meeting held on 28
th
September, 2012 have approved remuneration payable to Mr. Sanjay S. Lalbhai, Chairman and Managing Director of
the Company for a period from 1
st
January, 2013 to 31
s
t March, 2017. The Company has entered into an agreement with him laying down his tenure,
remuneration and other terms.
The Remuneration Committee and the Board of Directors at their respective meetings held on 20
th
May, 2011 and shareholders at their Annual
General Meeting held on 30
th
September, 2011 have approved remuneration payable to Mr. Jayesh K. Shah, Whole-time Director with designation
of Director and Chief Financial Ofcer of the Company for a period of three years from 1
st
October, 2011 to 30
th
September, 2014. The Company has
entered into an agreement with him laying down his tenure, remuneration and other terms.
The Remuneration Committee and the Board of Directors at their respective meetings held on 26
th
July, 2012 and shareholders at their Annual
General Meeting held on 28
th
September, 2012 have approved remuneration payable to Mr. Punit S. Lalbhai, and Mr. Kulin S. Lalbhai - Executive
Directors of the Company for a period of fve years from 1
st
August, 2012 to 31
st
July, 2017. The Company has entered into an agreement with them
laying down their tenure, remuneration and other terms.
The remuneration of Non Executive Directors is determined by the Board and is also approved by the Shareholders in General Meeting. Non
Executive Directors were paid Sitting Fees of ` 5,000/- for every meeting of Board of Directors or Committee attended by them. Apart from this,
Non Executive Directors (other than Managing Director and Whole Time Director(s)) are entitled for commission not exceeding 1% of the net
profts of the Company per annum for each year for a period of 5 years commencing from 1
st
April, 2010.
Within the above limit, Executive Directors and Non-Executive Directors have been paid commission for the year 2012-13 as under:
Sr. No. Name of Director Salary ` Perquisites & Allowances ` Sitting Fees ` Commission/ Bonus `
1 Mr. Sanjay S. Lalbhai 7500000 29544032 - 10000000
2 Mr. Jayesh K. Shah 4761000 21548924 - 4000000
3 Mr. Punit S. Lalbhai* 1000000 4783681 - -
4 Mr. Kulin S. Lalbhai** 1000000 4747226 - -
5 Mr. Sudhir Mehta - - 30000 500000
6 Dr. Bakul Dholakia - - 65000 600000
7 Mr. Prabhakar Dalal - - 40000 600000
8 Mr. Munesh Khanna - - 40000 600000
9 Ms. Renuka Ramnath - - 10000 400000
10 Mr. G. M. Yadwadkar+ - - - 200000
Commission of ` 1.89 crores paid to Executive Directors during the year 2012-13 pertains to previous year.
* Mr. Punit S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
** Mr. Kulin S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
9
3. Investors’ Grievance Committee
The Investors’ Grievance Committee has 4 Members comprising of 2 Non-Executive Directors and 2 Executive Directors.
Role
The terms of reference of the Investors’ Grievance Committee are as under:
1. To specifcally look into the redressal of Investors’ Grievances pertaining to:
• Transfer of Shares and Debentures.
• Dividends, Interests and Redemption Proceeds of Debentures.
• Dematerialisation of Shares and Debentures.
• Replacement of Lost, Stolen, Mutilated Share and Debenture Certifcates.
• Non-receipt of Rights, Bonus, Split Share Certifcates.
2. To look into other related issues towards strengthening Investors’ Relations.
3. To consider and approve issuance of Share/Debenture Certifcates including Duplicate Share/ Debenture Certifcates.
4. To look into the reasons for any defaults in the payment to the Depositors, Debenture Holders, Shareholders (in case of non payment of
Declared Dividends) and Creditors.
Meetings and Attendance
During the year, 3 Investors’ Grievance Committee Meetings were held on 26
th
July, 2012, 23rd October, 2012 & 30
th
January, 2013. The Attendance of
Members at meetings was under:
Sr.
No.
Name Position Number of Meetings held
during the year
Number of Meetings
attended
1 Mr. Sanjay S. Lalbhai Member 3 3
2 Mr. Jayesh K. Shah Member 3 3
3 Mr. Sudhir Mehta Member 3 2
4 Dr. Bakul Dholakia Chairman 3 3
4. Management Committee
The Management Committee consists of 2 Directors, all of whom are Executive Directors. The Management Committee met 20 times during the
year.
Role
The Management Committee’s primary role is to look after the day-to-day business activities of the Company within Board approved direction/
framework. The Committee meets frequently, as and when need arises to transact matters within the purview of its terms of reference.
Meetings and Attendance
During the year, 20 Management Committee Meetings were held on various dates. The Attendance of Members at meetings was as under:
Sr.
No.
Name Position Number of Meetings held
during the year
Number of Meetings
attended
1 Mr. Sanjay S. Lalbhai Member 20 20
2 Mr. Jayesh K. Shah Member 20 20
MANAGEMENT DISCUSSION AND ANALYSIS
This is given as a separate chapter in the Annual Report.
Brief Resume of Directors seeking Re-appointment/ Appointment
Information required under Clause 49 IV (G) of the Listing Agreement with respect to the Directors retiring by rotation and
seeking reappointment / Directors sought to be appointed is as under:-
At the ensuing Annual General Meeting, Dr. Bakul Dholakia and Ms. Renuka Ramnath, Directors of the Company, retire by rotation and being eligible
seek re-appointment.
Brief profles of the above Directors along with particulars of their directorships and committee memberships are as under:
Dr. Bakul Dholakia
Dr. Bakul H. Dholakia is a Gold Medalist from Baroda University and he has a Doctorate in Economics. He has 41 years of professional
experience including 33 years at IIM, Ahmedabad. He has been a consultant to various national and international organizations. He was awarded
many awards including Padma Shri by the Government of India in recognition of his distinguished services in the feld of education in 2007,
Bharat Asmita National Award for his contribution to management education and teaching by the Hon’ble Chief Justice of India in 2008 etc.
10
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
In 2005, Dr. Bakul Dholakia was rated as one of the most powerful personalities of Gujarat by two separate media groups. Global Associations of
Business Schools have also honoured Dr. Bakul Dholakia for his sterling contribution in the feld of management education. The Global Foundation for
Management Education (GFME), jointly formed by the Associations of American and European Business Schools, has nominated Dr. Bakul Dholakia
as a Member of the Board of GFME representing Asia. Dr. Dholakia has been a Board Member of Reserve Bank of India, Western Area Board from 1993
to 2001. He was appointed as the Chairman of the National Board of Accreditation for Technical Education in India. Over the last two decades, Dr.
Dholakia has worked on numerous government committees. He has also been a member of the Jury for various Corporate Excellence Awards and
Selection Committees for CEOs. Dr. Dholakia is the author of 12 books. Currently, Dr. Dholakia is leading the educational initiatives of Adani Group.
He is holding 13,455 equity shares of the Company and is not related to any Director of the Company.
Sr.
No.
Name of the Company in which holding Directorship Name of the Committee Committee Membership
1 Ashima Limited Audit Committee
Remuneration Committee
Chairman
Chairman
2 Ashima Dyecot Limited Audit Committee
Remuneration Committee
Chairman
Chairman
3 L&T Power I/C - -
Ms. Renuka Ramnath
Ms. Renuka Ramnath is the Founder and Managing Director of Multiples Alternate Asset Management Pvt. Ltd. which seeks to manage circa $450
million of Indian and International capital.
In her career spanning nearly two and a half decades in the Indian fnancial sector, Ms. Renuka Ramnath has been involved with building several
businesses from scratch in the ICICI Group which include Investment Banking, Structured Finance and e-Commerce in the 1990s and Private Equity
in 2000; much before each of these terms became ubiquitous in Indian marketplace.
Ms. Renuka Ramnath led ICICI Venture to become India’s largest private equity fund whilst transforming the frm from a bank’s investment arm to a
traditional blue-chip private equity fund managing substantial amounts of third party capital – both domestic and international. All four funds raised
by her (aggregating to US$1.5 billion) have been the then largest domestic funds raised in the Indian market.
Time and again, Ms. Renuka Ramnath has demonstrated her ability to identify and conceptualize new business opportunities, create high quality
teams and quickly build these businesses to scale. As a result, she has featured in many prestigious listings, including the Top 25 Most Powerful
Women in Business (Business Today, India), India’s most Powerful CEO’s (Economic Times) and in the Top 25 Non Bank Women in Finance (US
Banker’s global list).
In her new avatar, Ms. Renuka Ramnath looks to bring together her tremendous experience, long-standing credibility and enormous relationships
to build Multiples as a platform to channelise long-term capital to create valuable enterprises and successful entrepreneurs. She draws motivation
from the fact that supporting entrepreneurs to build sustainable businesses has the potential to generate employment, to create ripple efects in
the Indian economy and to facilitate the greater process of nation building.
She is not holding any equity shares of the Company and is not related to any Director of the Company.
Sr. No. Name of the Company in which holding Directorship Name of the Committee Committee Membership
1 Multiple Alternate Asset Management Pvt. Ltd. - -
2 Multiples Equity Fund Trustee Private Limited - -
3 Shri Nath G Corporate Management Services Private Limited - -
4 Indian Energy Exchange Limited - -
5 Mogae Media Private Limited - -
6 PVR Limited - -
7 Cinemax India Limited - -
8 B2R Technologies Private Limited - -
Prevention of Insider Trading
In accordance with SEBI (Prohibition of Insider Trading) Regulations, 1992, the Board has adopted the following codes:
• Arvind Code for Prevention of Insider Trading – Under this code, obligations are cast upon Directors and Ofcers to preserve Price
Sensitive Information, which is likely to have a bearing on share price of the Company. Procedures are prescribed to ensure that such
information is not misused for any personal advantage. The Head (Legal & Secretarial) has been appointed as the Compliance Ofcer for
monitoring implementation of the Code across the Company.
• Arvind Code of Corporate Disclosures – This code lays down principles and procedures with the objective of ensuring that the Price
Sensitive Information related to the Company is handled in prescribed manner. Adequate disclosure of such information is sought to be made
to the Public through Stock Exchanges, Press, Media and the Arvind web-site in a timely manner to enable the investors to take informed
investment decisions with regard to the Company’s Securities. The Director and Chief Financial Ofcer has been appointed as the Company’s
Public Spokesperson under this Code.
11
• Code of Conduct for Directors and Senior Management Personnel– In terms of para no. I - D of Clause 49 of the Listing Agreement,
the Board of Directors of the Company has laid down a Code of Conduct for all Board Members and Senior Management Personnel of the
Company. The said Code of Conduct has been posted on the website of the Company. The Board Members and Senior Management Personnel
of the Company have afrmed compliance with the Code. The Chairman & Managing Director of the Company has given a declaration to the
Company that all the Board Members and Senior Management Personnel of the Company have afrmed compliance with the Code.
Investors may write to the Company’s Secretarial Department for a copy of these Codes.
Disclosures
(i) Disclosures on materially signifcant related party transactions i.e. transactions of the Company of material nature, with its promoters,
directors or the management, their subsidiaries or relatives etc. that may have potential conficts with the interest of the Company at large :
Transactions with related parties are disclosed in detail in Note No. 34 in “Notes forming part of the Accounts” annexed to the fnancial
statements for the year. There were no related party transactions having potential confict with the interest of the Company at large.
(ii) Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchange or SEBI or other authority
on any matter related to capital markets, during last three years: Nil.
(iii) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of Clause 49:
The Company has complied with the mandatory requirements relating to strengthening the responsibilities of Audit Committee, improving
the quality of fnancial disclosures, including related party transactions, calling upon Company Board to adopt formal code of conduct, clearly
setting out the position of nominee directors and improving disclosure relating to the compensation paid to non-executive directors and
securing the approval of shareholders for this compensation, setting the procedure for legal compliance and periodical review by the Board.
The Company has not adopted the non-mandatory requirements.
Shareholders’ Information
1. Name and Designation of Compliance Ofcer:
Ramnik V. Bhimani
Company Secretary
Arvind Limited
Bharti Parikh
Sharepro Services (India) Pvt. Ltd.
Registrars & Transfer Agents
2. Details of Complaints / Queries received and redressed during 1st April, 2012 to 31st March, 2013:
Sr.
No.
Particulars of Complaints / Queries Received Redressed Pending as
on 31.3.2013
1 Non receipt of Share Certifcates 1 1 0
2 Non receipt of Dividend /Interest Warrants 32 32 0
3 Confrmation of Demat Credit Nil Nil Nil
4 Non receipt of Debentures Redemption payment Nil Nil Nil
5 Non receipt of letter of ofer, allotment advice, share certifcates etc. for Rights
Issue & others
Nil Nil Nil
6 Others – Complaints received from SEBI, Stock Exchanges, NSDL, ROC, Company
Law Board etc.
10 10 0
Total 43 43 0
3. Share Transfer Details for the period from 1st April, 2012 to 31st March, 2013:
Transactions Physical Demat Total
Number of Transfers 1529 3630 5159
Average Number of Transfers per month 127 303 430
Number of Shares Transferred 59234 219283 278517
Average Number of shares Transferred per month 4936 18274 23210
No. of Pending Share Transfers Nil Nil Nil
4. Investors’ Grievances:
The Registrars and Transfer Agents under the supervision of the Secretarial Department of the Company look after investors’ grievances.
Ms. Bharti Parikh of Sharepro Services (India) Pvt. Ltd. is responsible for redressal of Investors’ Grievances. The Company Secretary of the
Company has been appointed as the Compliance Ofcer for this purpose. At each Meeting of the Investors’ Grievance Committee, all matters
pertaining to investors including their grievances and redressal are reported.
12
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
5. Information on General Body Meetings:
(i) The last 3 Annual General Meetings of the Company were held as under:
Date Time Venue
28
th
September, 2012 10.00 a.m. Thakorebhai Desai Hall, Nr. Law Garden, Ellisbridge, Ahmedabad-380006
30
th
September, 2011 10.30 a.m. Thakorebhai Desai Hall, Nr. Law Garden, Ellisbridge, Ahmedabad-380006
25
th
September, 2010 10.30 a.m. Thakorebhai Desai Hall, Nr. Law Garden, Ellisbridge, Ahmedabad-380006
(ii) Special Resolutions passed at the last 3 Annual General Meetings:
2011-12
1. Appointment of Mr. Punit S. Lalbhai as Executive Director of the Company and approval of overall limit of remuneration payable to
him for a period from 1
st
August, 2012 to 31
st
July, 2017.
2. Appointment of Mr. Kulin S. Lalbhai as Executive Director of the Company and approval of overall limit of remuneration payable to
him for a period from 1
st
August, 2012 to 31
s
t July, 2017.
3. Approval of terms of reappointment of Mr. Sanjay S. Lalbhai as Chairman and Managing Director of the Company and approval of
the overall limit of remuneration payable to him for a period from 1st January, 2013 to 31
st
March, 2017.
4. Approval of the appointment of Mr. Darshil Shah as Manager – Business Development in Arvind Infrastructure Limited, a subsidiary
of the Company under Section 314 of the Companies Act, 1956.
2010-11
1. Approval of terms of reappointment and remuneration of Mr. Jayesh K. Shah as Whole time Director with the designation of
Director and Chief Financial Ofcer of the Company for a further period of three years from 1
st
October, 2011 to 30
th
September,
2014.
2. Alteration of the Main Object Clause of Memorandum of Association of the Company so as to include the object of Real Estate
Business.
3. Commencement of new business of Real Estate.
4. Further Issue of Equity Shares or Securities convertible into Equity Shares for an amount not exceeding ` 300 Crores.
2009-10
1. Reappointment of and payment of remuneration to Mr. Sanjay S. Lalbhai as Chairman and Managing Director of the Company for
a further period of three years from 1
st
January, 2010 to 31
st
December, 2012.
2. Payment of commission to Non-Executive Directors including Nominee Directors of the company for a period of 5 years from 1
st
April, 2010 to 31
st
March,2015.
(iii) No resolutions were passed through Postal Ballot during the previous year.
Details of Extra Ordinary General Meeting:
During last 3 years, there was no Extra Ordinary General Meeting held.
6. Means of communication
i. The Quarterly Results are published in the Financial Express - All India Editions and Financial Express Gujarati Edition of Ahmedabad and
are also posted on the Company’s website at www.arvind.com.
ii. Information released to the press at the time of declaration of results is also sent to all Stock Exchanges where the shares of the Company
are listed for the beneft of investors. Moreover, the Company’s web-site hosts a special page giving information which investors usually
seek.
iii. Presentations made to institutional investors/analysts are posted on the Company’s web- site at www.arvind.com
7. Annual General Meeting:
Date 29
th
July, 2013
Time 9.30 a.m.
Venue Thakorebhai Desai Hall, Near Law Garden, Ellisbridge, Ahmedabad - 380 006
8. Financial Calendar:
The Financial Year of the Company is for a period of 12 months from 1
st
April to 31
st
March.
First quarter results : By end of July, 2013
Second quarter results : By end of October, 2013
Third quarter results : By end of January, 2014
Fourth quarter results / Year end results : By end of May, 2014
13
9. Book Closure : Monday, the 22
nd
July, 2013 to Monday, the 29
th
July, 2013 (Both Days inclusive).
10. Dividend payment Date : 3
rd
August, 2013
11. Listing on Stock Exchanges: Shares of the Company are listed on the following Stock Exchanges.
Sr. No. Name of the Stock Exchange Code Address
1 Ahmedabad Stock Exchange Ltd.
(Regional Stock Exchange)
05090 Kamdhenu Complex, Opp. Sahajanand College, Panjarapole,
Ahmedabad-380 015
2 Bombay Stock Exchange Ltd. 500101 Phiroze Jeejeebhoy Tower, Dalal Street Mumbai – 400 001
3 National Stock Exchange of India Ltd. ARVIND Exchange Plaza, 5
th
Floor, Plot No.C/1, G. Block, Bandra – Kurla Complex,
Bandra (E) Mumbai – 400 051
4 The Luxembourg Stock Exchange
(Listing of GDRs)
11, Avenue de la Porte-Neuve
L-2227 Luxembourg
The Company has paid Annual Listing Fees for the year 2013-2014 to the above Stock Exchanges.
12. Market Price Data:
The data on price of equity shares of the Company are as under:
High, Low during each month in last fnancial year and performance in comparison to broad-based indices such as BSE (Sensex) and NSE
(Nifty):
Share price BSE BSE Sensex Volumes Share price NSE NSE (NIFTY) Volumes
Month High
(`)
Low
(`)
High Low No of
shares
High
(`)
Low
(`)
High Low No of
shares
Apr-12 87.65 80.05 17,664.10 17,010.16 78,28,83,908 87.65 80.15 5378.75 5154.30 3,13,44,419
May-12 92.90 68.20 17,432.33 15,809.71 1,56,33,67,065 92.90 68.25 5279.60 4788.95 6,44,05,031
Jun-12 77.85 68.10 17,448.48 15,748.98 56,02,52,492 78.00 68.00 5286.25 4770.35 3,11,53,538
Jul-12 81.80 67.05 17,631.19 16,598.48 54,45,63,020 81.80 67.00 5348.55 5032.40 2,93,99,071
Aug-12 72.95 59.05 17,972.54 17,026.97 32,53,17,543 73.15 58.90 5448.60 5164.65 2,08,01,570
Sep-12 82.00 62.35 18,869.94 17,250.80 57,44,32,234 82.00 62.30 5735.15 5215.70 3,25,83,142
Oct-12 84.10 73.25 19,137.29 18,393.42 65,50,84,464 84.15 73.00 5815.35 4888.20 3,13,46,558
Nov-12 90.95 80.80 19,372.70 18,255.69 48,10,15,872 90.90 80.65 5885.25 5548.35 2,56,35,653
Dec-12 103.50 88.20 19,612.18 19,149.03 1,02,84,19,821 103.45 88.25 5965.15 5823.15 4,22,81,206
Jan-13 107.50 89.60 20,203.66 19,508.93 90,30,78,111 107.60 87.35 6111.80 5935.20 3,41,98,500
Feb-13 95.70 73.05 19,966.69 18,793.97 39,43,14,184 95.75 73.30 6052.95 5671.90 1,66,95,295
Mar-13 84.80 72.15 19,754.66 18,568.43 38,04,05,268 84.95 72.10 5971.20 5604.85 1,79,77,728
13. Registrars and Transfer Agents:
Sharepro Services (India) Pvt. Ltd.
416-420, 4
th
Floor, Devnandan Mall,
Opp. Sanyas Ashram, Ellisbridge, Ahmedabad - 380 006
Contact Person: Ms. Bharti Parikh
Phone Nos.: 079-26582381 to 84 Fax No. : 079-26582385
E-mail: [email protected]
14. Delegation of Share Transfer Formalities:
Since the Company’s shares are compulsorily traded in the demat segment on stock exchanges, bulk of the transfers take place in the
electronic form.
For expediting physical transfers, the Board has delegated share transfer formalities to certain ofcers of the Company who attend to them
at least 3 times in a month. Physical transfers are afected within the statutory period of one month. The Board has designated the Company
Secretary as the Compliance Ofcer.
14
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
15. Shareholding Pattern as on 31
st
March, 2013:
Sr. No. Category No. of shares
held
Percentage of
Shareholding
Holding of Promoter Group (‘Group’ as per MRTP Act, 1969)
1 Individuals:
Sanjaybhai Shrenikbhai Lalbhai 2000152 0.78%
Samvegbhai Arvindbhai Lalbhai 216576 0.08%
Shrenikbhai Kasturbhai Lalbhai 1580 0.00%
Relatives of above Individuals* 127050 0.05%
2 Major Bodies Corporate and Trusts:
Aura Securities Private Limited 95790590 37.12%
Sanjay Family Trust 100 0.00%
AML Employees’ Welfare Trust 6327317 2.45%
Amplus Capital Advisors Pvt. Ltd. 0 0.00%
Anagram Knowledge Academy Limited 0 0.00%
Anukul Investments Private Limited 0 0.00%
Aura Merchandise Pvt. Ltd. 0 0.00%
Lalbhai Realty Finance Private Limited 0 0.00%
Shruti Trade Link Pvt. Ltd. 0 0.00%
Adore Investments Private Limited 132296 0.05%
Aeon Investments Private Limited 607531 0.24%
Amardeep Holdings Private Limited 94250 0.04%
Amazon Investments Private Limited 1792158 0.69%
Anshuman Holdings Private Limited 137140 0.05%
Aayojan Investment Pvt. Ltd 0 0.00%
Aayojan Resources Pvt. Ltd 84505 0.03%
Acropolis Investment Pvt. Ltd 440062 0.17%
Active Investment Pvt. Ltd 178475 0.07%
Adhigam Investments Pvt. Ltd. 0 0.00%
Adhinami Investment Pvt. Ltd 1000 0.00%
Agrimore Limited 110000 0.04%
Akshita Holdings Pvt. Limited 0 0.00%
Alligator Investment Pvt. Ltd 40762 0.02%
Amal Limited 0 0.00%
Ameer Trading Corporation Limited 0 0.00%
Anchor Adhesives Private Limited 0 0.00%
Anubhav Investments Private Limited 1003815 0.39%
Atul Bioscience Limited 0 0.00%
Atul Limited 4127471 1.60%
Gujarat Synthwood Limited 0 0.00%
Osia Enterprises Pvt. Ltd 40000 0.02%
Rudolf Atul Chemicals Limited 0 0.00%
Suvidha Dairy Pvt. Ltd 14190 0.01%
Suvikash Trading Pvt. Ltd 118500 0.05%
Total Promoter Group holding 113385520 43.94%
3 Mutual Funds and UTI 31148254 12.07%
4 Banks, Financial Institutions, Central/State Government & Insurance Companies 17718817 6.87%
5 Foreign Institutional Investors, NRIs /OCBs, Foreign Banks 44543754 17.26%
6 GDR 454272 0.18%
7 Private Corporate Bodies 5791681 2.24%
8 Indian Public 44661512 17.31%
9 Trusts 3364 0.00%
10 Clearing Members 335895 0.13%
Total Non-Promoter holding 144657549 56.06%
GRAND TOTAL 258043069 100.00%
15
* The names of ‘Relatives of above Individuals’ are as per disclosures made as on 31
st
March, 2013 under the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011.
• Distribution of shareholding as on 31
st
March, 2013:
PHYSICAL MODE ELECTRONIC MODE TOTAL TOTAL
No. of shares No. of
holders
No. of
Shares
No. of
holders
No. of
Shares
No. of
holders
% No. of
Shares
%
1-500 77374 3162325 121070 15620368 198444 93.52 18782693 7.28
501-1000 351 245217 7525 6088684 7876 3.71 6333901 2.45
1001-2000 107 143605 3018 4580746 3125 1.47 4724351 1.83
2001-3000 21 52371 934 2408672 955 0.45 2461043 0.95
3001-4000 9 32344 394 1408373 403 0.19 1440717 0.56
4001-5000 11 49877 387 1824710 398 0.18 1874587 0.73
5001-10000 3 21889 496 3639140 499 0.24 3661029 1.42
10001-20000 4 55650 199 2828419 203 0.10 2884069 1.12
Above 20000 1 22318 296 215858361 297 0.14 215880679 83.66
TOTAL 77881 3785596 134319 254257473 212200 100.00 258043069 100.00
16. Dematerialisation of shares and liquidity:
The Company’s shares are available for dematerialisation on both the Depositories viz. National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL). Shares of the Company are compulsorily to be delivered in the demat form on Stock
Exchanges by all investors. As on 31
st
March, 2013, 25,42,57,473 shares representing 98.53%of the issued capital have been dematerialised by
investors and bulk of transfers take place in the demat form.
Demat ISIN:
Equity Shares fully paid : INE034A01011
17. Outstanding GDRs / ADRs / Warrants or any convertible instruments and conversion date and likely impact on equity:
As on 31
st
March, 2013, 4,54,272 GDRs (previous year 6, 60,226) are outstanding. Each GDR represents one underlying equity share.
18. Plant Locations:
• Lifestyle Fabrics–Denim, Naroda Road, Ahmedabad - 380 025, Gujarat.
• Lifestyle Fabrics – Voiles, Ankur Textiles, Outside Raipur Gate, Ahmedabad - 380 022, Gujarat.
• Lifestyle Fabrics–Shirting, Khakis & Knitwear, Santej, PO Khatrej, Taluka Kalol, Dist. Gandhinagar-382721, Gujarat.
• Lifestyle Apparel–Knits, Santej, PO Khatrej, Taluka Kalol, Dist. Gandhinagar - 382 721 , Gujarat.
• Lifestyle Apparel–Jeans, 26/2, 27/2 Kenchenahaili, Mysore Road, Near Bangalore University, Bangalore-560 059.
• Lifestyle Apparel–Shirts, No. 23/1, Sonnenahalli Village, Sitarampalya Cross, ITPL Road, Brookfeld, Mahadevpura Post, Bangalore - 560 048.
• Arvind Intex, Raipur Road, Gomtipur, Ahmedabad - 380 021, Gujarat
• Arvind Polycot, Khatrej, Taluka Kalol, Dist. Gandhinagar- 382 721, Gujarat
• Arvind Cotspin, D-64, MIDC, Gokul Shirgaon, Tal. Karveer, Kolhapur - 416 234, Maharashtra.
19. Unclaimed Dividend:
(1) Pursuant to Section 205A of the Companies Act, 1956, unclaimed dividends up to and including the fnancial years 1993-1994 have been
transferred to the General Revenue Account of the Central Government. Shareholders who have not encashed their dividend warrants
relating to any fnancial year up to 1993-1994 are requested to claim the amounts from the Registrar of Companies, Gujarat, ROC Bhavan,
Near Ankur Bus Stand, Naranpura, Ahmedabad 380 013 in the prescribed form. Investors may write to the Secretarial Department of the
Company or the Registrars and Transfer Agents for a copy of the form.
(2) Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, dividends on equity shares for the fnancial years 1994-1995
to 1997-1998 and 2004-05 remaining unclaimed for 7 years from their due dates have been transferred by the Company to the Investor
Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956.
Shareholders are requested to note that no claim shall lie against the said Fund or the Company in respect of any amount of unclaimed
or unpaid dividend transferred to IEPF.
(3) The Company did not declare any dividends on equity shares for the fnancial years 1998-1999 to 2003-2004 and 2006-07 to 2010-11.
(4) The dividends on equity shares for the following years remaining unclaimed for 7 years from the dates of declaration are required to be
transferred by the Company to IEPF and the various dates for transfer of such amounts are as under:
16
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Financial Year Date of Declaration Due for transfer to IEPF*
2005-06 30
th
September, 2006 6
th
November, 2013
2011-12 28
th
September, 2012 4
th
November, 2019
* Actual dates of transfer to IEPF may vary.
Members who have so far not enchased their dividend warrants in the respect of the above years are requested to claim their dividend
from the Company. Such members may write to the Company’s Registrars and Transfer Agents, Sharepro Services (India) Pvt. Ltd. for
payment of unclaimed dividend amount.
20. Nomination Facility:
Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the Company, as
permitted under Section 109A of the Companies Act, 1956 are requested to submit the prescribed Form 2B for this purpose. Shareholders
may write to the Secretarial Department of the Company for a copy of the Form.
21. Address for correspondence:
Shareholders may correspond with the Company at the Registered Ofce of the Company or at the ofce of Registrars and Transfer Agents
of the Company:
Arvind Limited
Secretarial Department
Naroda Road,
Ahmedabad - 380 025.
Phone Nos: 079-30138000/30138108-09
Fax No. : 079-30138668
e-mail : [email protected]
Web-site address: www.arvind.com
Sharepro Services (India) Pvt. Ltd.
Registrars and Transfer Agents
416-420, 4
th
Floor, Devnandan Mall,
Opp.Sanyas Ashram, Ellisbridge, Ahmedabad-380 006
Contact Persons: Ms. Bharti Parikh
Phone Nos.: 079-26582381to 84
Fax No. : 079-26582385
e-mail : [email protected]
The above Report has been placed before the Board at its meeting held on 16
th
May, 2013 and the same was approved.
For and on behalf of the Board
Place : Ahmedabad SANJAY S. LALBHAI
Date : 16
th
May, 2013 Chairman & Managing Director
17
Compliance of conditions of Corporate Governance
To the Members of Arvind Limited
We have examined the compliance of conditions of Corporate Governance by ARVIND LIMITED for the year ended on 31st March, 2013, as stipulated in
Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the
procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is
neither an audit nor an expression of opinion on the fnancial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the
management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing
Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or efectiveness with which the
management has conducted the afairs of the Company.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N. D. Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
___________________________________________________________________________________________________________________________________
CEO / CFO CERTIFICATION
The Board of Directors
Arvind Limited
Ahmedabad.
Re : Financial Statements for the year 2012-13 – Certifcation by CEO and CFO
We, Sanjay S. Lalbhai, Chairman & Managing Director and Jayesh K. Shah, Director & Chief Financial Ofcer of Arvind Limited, on the basis of review of the
fnancial statements and the cash fow statement for the fnancial year ending 31
st
March, 2013 and to the best of our knowledge and belief, hereby certify
that:
1. These statements do not contain any materially untrue statements or omit any material fact or contains statements that might be misleading;
2. These statements together present a true and fair view of the Company’s afairs and are in compliance with existing accounting standards, applicable
laws and regulations;
3. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year ended 31st March, 2013 which are
fraudulent, illegal or violative of the Company’s Code of Conduct;
4. We accept responsibility for establishing and maintaining internal controls, we have evaluated the efectiveness of the internal control systems of
the Company and we have disclosed to the auditors and the Audit Committee those defciencies, of which we are aware, in the design or operation
of the internal control systems and that we have taken the required steps to rectify these defciencies;
5. We further certify that :
(a) there have been no signifcant changes in internal control during this year;
(b) there have been no signifcant changes in accounting policies during this year;
(c) there have been no instances of signifcant fraud of which we have become aware and the involvement therein, of management or an
employee having signifcant role in the Company’s internal control systems.
Ahmedabad Sanjay S. Lalbhai Jayesh K. Shah
May 16, 2013 Chairman & Managing Director Director & CFO
___________________________________________________________________________________________________________________________________
DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE CODE OF
CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
This is to confrm that the Company has adopted a Code of Conduct for Directors and Senior Management Personnel which is available on the Company’s
website.
I confrm that the Company has in respect of the Financial Year ended 31
st
March, 2013, received from the Members of the Board and Senior Management
Personnel, a declaration of compliance with the Code of Conduct as applicable to them.
Ahmedabad Sanjay S. Lalbhai
16
th
May, 2013 Chairman & Managing Director
18
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
DISCLAIMER
Readers are cautioned that this discussion and analysis contains forward-
looking statements that involve risks and uncertainties. When used in
this discussion, the words “anticipate,” “believe,” “estimate,” “intend,”
“will,” and “expected” and other similar expressions as they relate to the
Company or its business are intended to identify such forward-looking
statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. Actual results, performances
or achievements, risks and opportunities could difer materially from
those expressed or implied in these forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements as these are relevant at a particular point of time & adequate
restrain should be applied in their use for any decision making or formation
of an opinion.
The following discussion and analysis should be read in conjunction with
the Company’s fnancial statements included herein and the notes thereto.
OVERVIEW OF THE ECONOMY
The year 2012-13 in India was in many ways that of a stagnant economy –
low GDP growth, steadily low industrial output, high infation, high interest
rates, depreciated currency and conservative policy reforms. However,
that can still be construed as good news on two fronts: (a) It did not decline
much further beyond the FY2011-12 levels and (b) that sets a low statistical
base for things looking to revive in FY2013-14.
The year saw the GDP growth decline to near-5% level, the headline CPI rate
stayed above 10% for good part the year, IIP growth fattened and overall
sentiments weak in the business society as well as among consumers.
The conficting challenges of managing large fscal defcits while trying to
boost economic growth have seen the government and the RBI looking to
push for several reforms, though there is still some way to go before those
reforms are efectively implemented.
Going forward, the expectation for FY2013-14 is that of gradual revival.
While some elements of economic pressures would continue to persist,
the larger picture points to an improvement over the past year. A major
change though, either positive or negative, is seen as unlikely within a year,
especially given that the general elections are scheduled for the next year.
The year is expected to be characterized by a gradual revival in the industrial
output, with stable activity in the agri-sector and services. Infation is likely
to ease gradually, but the trade-of in balancing between growth and
infation could see a cautious growth oriented monetary environment.
Some improvement can be expected in the CAD and the continued fows
of foreign capital is expected to keep the Rupee largely stable in mid-
ffties – assuming that geo-political tensions do not deteriorate and global
economic conditions remain where they are, with the recovery process
also being cautious. Overall, it is expected that growth will bottom in H1
2013 as domestic and foreign headwinds ease and that GDP growth could
average between 5-5.5% this year before picking up to 7%+ in 2014.
However, apart from the immediate sentiments being moderate for the
next year or two, the long-term India growth story – built on the rising
Indian middle-class that will be both younger and richer in the years to
come – continues to remain extremely strong. This is visible in the unabated
commitment of several large Indian and multi-national corporations to not
only sustain but aggressively build position of strength in the Indian markets.
Your company also strongly believes in the long-term India growth
and consumption story and is taking calculated steps to create strong
businesses that would see a major pivoting once an economic upturn
comes around. During the current moderate growth phase however, the
strategy is to follow a cautious growth approach that strengthens the
businesses fundamentally while also exploiting the current value creation
opportunities.
Indian Textile Industry
The Indian textile industry is one of the leading textile industries in the
world, steadily improving in its capabilities and competitiveness vis-à-vis
the other global economies. It chiefy consists of ginning, spinning, weaving
and processing industries and plays a major role in the country’s economy.
It contributes nearly 14% of the total industrial production of the country,
nearly 4% percent to the country’s GDP and accounts for about 17% of
its total foreign exchange earnings through textile exports. Further, it is
also the second largest employer in the country, only after agriculture,
currently employing more than 35 million Indians directly and almost twice
as many through the allied industries.
The industry operates in several segments, including cotton textiles, silk
textiles, woollen textiles, jute and coir, man-made textiles and readymade
garments. The total Indian textile industry size, including readymade
garments, was estimated to be ` 4.9 lakh Crores (nearly USD 90 Bn) in
2012, projected to grow over the next 10 years at a CAGR of 9-10%, to reach
` 10 lakh Crores (nearly USD 200 billion) by 2020. This constitutes of 65%
domestic market and 35% exports and the mix is expected to largely remain
the same given the balance of strong domestic consumption growth and
increasing global competitiveness.
India Textile Industry - Size and Growth Estimates 2011-2021
145
235
386
664
418
670
1050
Domestic
Exports
Total INR(‘000Cr)
INR (‘000Cr)
USD (bn)
2011 (E)
All numbers areroundedof
Source: Technopak Analysis
2016 (P) 2021 (P)
USD (bn)
USD (bn)
273
435
CAGR 9.5%
89
223
143
31
82
50
58
141
93
The industry saw low exports growth in 2012, due to weaker international
demand partly compensated by a weak Indian Rupee. However, over the
next 3-5 years, India’s share of global textile exports is poised to increase
from current 4% to around 7%, driven by the improving competitiveness
vis-à-vis other major exporters like China and Turkey.
Items
April-October
2009-10 2010-11 2010-11 2011-12*
Million US $ Million US $ Million US $ Million US $
Readymade Garments 10064.73 10627.99 5512.15 7O88.74
Cotton Textile 5711.41 8360.35 3466.96 4899.36
Manmade Textiles 3970.88 4643.06 2465.75 3215.49
Wollen, Yarn, Fabrics,
MadeupsEtc
470.20 429.75 248.77 324.65
Silk Textiles 596.05 595.19 323.95 282.34
Handloom 264.85 365.48 185.89 324.14
TOTAL 21078.12 25021.82 12203.47 16134.72
Source: Foreign Trade Statistics of India (Principal Commodities & Countries). * as per latest
fgures available
MANAGEMENT DISCUSSION & ANALYSIS
19
The US and the EU nations account for almost two-thirds of India’s textile
exports. The other major destinations are Bangladesh, Turkey, Japan,
South Korea, Canada, Saudi Arabia and UAE. In order to keep the textile
industry competitive and world class, there is a periodic need for installing
new machinery, adopting latest technology and improving availability of
accessories. Overall, going forward, the exports market is expected to
continue growing at 10% CAGR for the next decade.
31
10%
8%
13%
10 yr. CAGR
50
82
18
13
26
24
38
44
2011 (E) 2016 (P) 2021 (P)
Apparel Textiles Total Exports
All numbers areroundedof
Source: UN ComtradeTechnopak Analysis
India’s Textile & Apparel
Exports Projections (USD bn)
Product-wise Exports
Break-up
Country-wise Exports
Break-up
Apparel
Fiber
Yarn
Made-ups
Fabric
Others
USA
Germany
UAE
France
UK
Others
The Technical Textiles Segment
Globally, the technical textiles segment is an immense opportunity, with
the worldwide industry size estimated at USD 130 Bn. The size of this
segment in India is currently pegged at ` 70,000 Cr (nearly USD 13 Bn),
contributing nearly 15% to the total domestic textile market. This segment
is characterized by world-class manufacturing capabilities technology
skill-sets and is expected to show strong growth in India.
INR (Cr.)
Sr.
No.
Segment 2011 (E) 2016 (P) 2021 (P) CAGR
1 Packtech 27010 55350 81520 12%
2 Clothtech 7780 9310 10350 3%
3 Hometech 10440 17180 27650 10%
4 Mobiltech 4880 9230 12940 10%
5 Indutech 3500 4075 4430 2%
6 Sporttech 2410 3010 3420 4%
7 Buildtech 3040 5490 7490 9%
8 Meditech 1990 2530 2910 4%
9 Protech 2295 4570 6570 11%
10 Agrotech 790 1470 2050 10%
11 Geotech 440 880 1290 11%
12 Oekotech 75 1o5 130 6%
Tolal 64650 113200 160750 10%
All numbers are rounded Of.
Source: Ministry of Textiles, Technopak Analysis.
Policy measures and Impact of Union Budget 2013-14 on the Indian
Textile Industry
The government has taken several important decisions in the Union
Budget 2013-14 to support the growth of the Indian Textile Industry. The
highlights of those are: (1) Restoration of zero excise duty, as existed prior
to the Budget 2011-12, on readymade garments sold in the domestic market
as well as for cotton and manmade sector at the yarn, fabric and clothing
stages (2) Continuation of Technology Upgradation Fund Scheme (TUFS)
in the 12th Five Year Plan with an investment target of ` 1.51 lakh Crore
(3) Reducing custom duty on textile machinery (4) Investment allowance
of 15% on capital investment above ` 1 Bn (5) Allocation of ` 50 Crore to
Ministry of Textile to incentivize setting up Apparel Parks within the SITPs
to house apparel manufacturing units (6) Plan for a new scheme called the
Integrated Processing Development Scheme (IPDS) to be implemented
in the 12th Plan to address the environmental concerns of the textile
industry (7) Working capital and term loans at a concessional interest of 6
per cent to handloom sector and (8) Scheme of Fund for Regeneration of
Traditional Industries (SFURTI) extended to 800 clusters during the 12th
Plan. These measures collectively are expected to give a signifcant boost
to the Indian textiles sector and address many industry concerns.
Cotton
For the current cotton season (Oct’12 – Sep’13), the Cotton Advisory
Board has estimated the domestic acreage at 116 lakh hectares leading
to a production of 330 lakh bales, as against 353 lakh bales from 122 lakh
hectares in 2011-12. This coupled with high exports demand for cotton as
well as yarn and low opening stock of cotton is expected to put pressure on
the price of domestic cotton and yarn.
Cotton yarn spread continues to remain high with robust demand in
domestic as well as overseas market. Certain international trends in cotton
have given a boost to cotton exports and making cotton fbre and yarn
more expensive in the domestic market. Higher cotton prices in China
have prompted the Chinese textile players to import yarn (3% duty on yarn
import compared to 40% duty on cotton import based on decided quota).
Turkey has removed duty on Indian cotton yarn imports and Turkey being
the gateway to Europe, would lead to increased exports of yarn from
India. Also, with power shortage in Pakistan and Bangladesh, certain global
demand is shifting to India. Provisional data as available with DGFT shows
that the current cotton season registered a whopping 51% YoY (Oct-Feb)
increase in registration of contract for export of cotton yarn. Exports of
cotton bales was at all time high during last season and had also impacted
closing stock which is lowest point compared to last four years’ stock.
Yarn-Cotton Spread (Rs/Kg)
120
110
100
90
80
70
60
50
40
30
A
p
r
-
0
9
J
u
l
-
0
9
O
c
t
-
0
9
J
a
n
-
1
0
A
p
r
-
1
0
J
u
l
-
1
0
O
c
t
-
1
0
J
a
n
-
1
1
A
p
r
-
1
1
J
u
l
-
1
1
O
c
t
-
1
1
J
a
n
-
1
2
A
p
r
-
1
2
J
u
l
-
1
2
O
c
t
-
1
2
J
a
n
-
1
3
A
p
r
-
1
3
Weak Indian Rupee Making Exports More Competitive
The continued weakness of the Indian rupee against the US dollar and
Euro has improved India’s competitive positioning in the export market.
Therefore, should the advantage be maintained, the efect will be positive
on the rupee revenue of exporters. However, the beneft would be ofset
for companies with forex debt or higher percentage imports of raw
material over product exports. While rupee depreciation is considered
good for net foreign exchange earners, if there sharp volatility in currency,
it could become very difcult for exporters to, on one hand, hedge the
future foreign currency earnings and on the other hand manage foreign
currency debt.
Textile Outlook
In the mid-long term, the Indian textile industry is expected to grow
strongly with growth being balanced from both domestic consumption
as well as exports demand. In the near-term, domestic demand would
9%
18%
57%
8%
7%
6%
4%
39%
16%
14%
14%
8%
20
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
depend on the macro-economic factors that are expected to gradually
revive in FY2013-14. On exports front, there are both positive and negative
factors. Positive factors include the weak currency and decreasing cost
competitiveness of China that are likely to give positive impetus to the
Indian exports. At the same time, factors like slowdown and uncertainty in
the global markets, volatile foreign exchange rates and increase in cotton
and yarn prices are likely to negatively afect growth and proftability for
the textile exports.
Your company is looking to take a cautious growth approach in the textiles
business – protecting margins through moving into more premium and
diferentiated space, as well as operational measures like greater share
of in-house spinning by leveraging the central and state government
support on investments and gradual addition of capacities depending on
demand upturn. For garmenting, the focus is on strategically increasing
share of vertical business with the global as well as Indian brands,
providing both enhanced business growth as well as demand security
for the fabric manufacturing businesses. The company is also looking to
tactically leverage Bangladesh for greater competitiveness in the global
supply chain, through partnership routes. Lastly, the company is looking
to place selective large bets in the technical textiles segment to create
breakthrough growth opportunities for the future.
Indian Apparel Retail Market
The Indian consumption growth story needs no explanation. Despite the
slow recent economic growth translating into weak consumer sentiments
and demand trends, the larger story of growth of organized retail in India
is expected to continue to gain momentum, with the additional boost of
Ecommerce retailing (commonly known as E-tailing). The total size of
India’s retail market is pegged at USD 490 Bn in 2012 (Source: Technopak),
of which organized retail has a low share of ~7% at USD 34 Bn, while e-Tailing
is currently a nascent model at ~0.1% or USD 0.6 Bn.
The overall retail market expected to grow at 10-12% over the next decade,
with an expected market size of USD 1440 Bn by 2021 (source: Technopak).
The more important trend though, is that while the share of organized
retail in total retail has grown over the last 4-5 years from ~5% in 2007 to
reach ~7% by 2012, it is expected that the combined growth of brick-and-
mortal retailing and e-tailing is expected to take this share to ~20% by 2021.
That would translate into a compounded annual growth rate of over 25%
over a decade!
Indian Retail Market Size
2012
Source: Technopak Analysis
* Retail market sizefor 2021 is at nominal growth
2021
Exhibit 1
Total Retail Market Size USD ~ 1440* bn
Traditional Retail: Brick & Mortar CorporatizedRetail: Brick & Mortar CorporatizedRetail: E-tailling
Total Retail Market Size USD ~ 490 bn
0.6 (0.1%)
34 (6.9%)
76 (5.3%)
1152
(80%)
455
(93%)
212 (14.7%)
Apparel as a category constitutes the largest share of organized retailing at
~30%, driven by factors like higher brand preference in apparel compared
to categories like ‘Food & Grocery’ where fresh availability is a more
primary consumer need. Apparel is also a category that is more promptly
being adopted by the internet buyer, compared to other large retail
categories. Hence both trends put together, apparel is expected to be a
large part of the India organized retail opportunity in 2021, both in the brick
& format as well as in e-tailing.
In the shorter term, organized apparel retail witnessed some impact of
softened consumer sentiments during the last year, refecting in slower
like-to-like (LTL) sales growth in the apparel stores and the overall
industry growth of 4-5% in value terms over FY12-13. However, the gradual
revival expected in the economy in FY13-14, along with some major policy
reforms in this sector, will facilitate improved proftability of the existing
brands as well as promote entry of new brands that will further expand
the market. Three specifc drivers of recovery in apparel demand in FY13-
14 include (a) Restoration of zero excise duty on readymade garments and
made ups announced in the Union Budget 2013-14 (b) Faster clearance of
investment proposal of foreign branded retail and (c) Expected revival in
the overall economy in FY13-14 that will open up the unspent demand for
apparels.
Across the various apparel segments, menswear will continue to be the
largest segment, contributing to ~35% of the total apparel market, while
kidswear is expected to grow faster due to new brand oferings in this
hitherto unexploited market segment.
Your company operates in the branded apparel space through a diverse
portfolio of owned and licensed international brands that have seen
strong growth momentum in the past. The strategy has been to create
several large and high-growth ‘Power brands’ (like Arrow, US Polo, Tommy
Hilfger and Flying Machine) and your company has seen with experience
that these brands start to yield very healthy bottomlines and returns
once they reach a critical size. With many other strong growth brands in
the portfolio (including those acquired recently) like Gant, Nautica, Elle,
Billabong, Ed Hardy, Hanes and Wonderbra, the Arvind approach would be
to gradually make these brands the next set of ‘Power brands’, providing
signifcant topline growth as well as healthy bottomlines. While menswear
market, being the largest and most attractive branded apparel space,
would continue to be dominant in the Arvind portfolio, other important
and attractive segments like women, kids and innerwear are also being
emphasized to grow their share of the business portfolio and align it with
the market growth trends.
Your company operates in the retail space through its MegaMart brand of
stores that have undergone a major transformation in business model over
the last year to be repositioned as a value format and the strategy has also
started to deliver the expected results in terms of improved proftability.
The company has also launched its own brand of ‘Arvind Stores’ to target
the attractive domestic market for fabric retail and custom clothing.
With continued improvements in the existing formats and the addition of
specialty store formats like Debenhams and Next, Arvind will be looking
to become a leading apparel retail player in India and also strive to bring
newer formats to the Indian consumer and ofer them diferentiated
products and retail experience.
RESULT REVIEW
The macroeconomic environment posed many challenges for the
company during the year under review. On domestic front, stagnant
economy, high infation and higher interest rates dampened the consumer
sentiments. On global from Euro zone continued to be in turmoil. On the
top of challenging macroeconomic scenario, our company witnessed
unprecedented event of strike at its Naroda plant in the month of June
2012 leading to loss of production. It is heartening to note that despite
such a challenging environment, our Company has closed the fnancial
year 2012-13 with 8% growth in sales and 7% growth in Operating Earnings
before Interest Depreciation and Taxes. (Operating EBITDA). PAT
(excluding Exceptional Income) has shown a growth of 11% compared to
the previous year.
21
The Standalone Financials of the company is as under:
(` In Crores)
For Year Ended on
Particulars March 31, 2013 March 31, 2012
Amount
% of
Sales Amount
% of
Sales
Revenue from operations
(Net) 3,780 3,494
Other Income 93 136
Total Revenue 3,874 3,630
Cost of materials &
accessories consumed 1,641 43% 1,569 45%
Purchases of Stock in Trade 84 2% 37 1%
Project Expenses 28 1% 14 0%
Changes in inventories of
fnished goods, work-in-
progress and stock-in-trade (166) -4% 4 0%
Employee benefts expense 442 12% 361 10%
Other expenses 1,164 31% 1,009 29%
Total Expenses 3,194 84% 2,993 86%
EBITDA 680 18% 637 18%
Depreciation and
amortization expense 150 4% 131 4%
Finance costs 268 7% 270 8%
Proft before extraordinary
items and tax 261 7% 236 7%
Extraordinary Items - 252
Proft before Tax 261 7% 488 14%
Tax expense: - 54
Proft After Tax 261 7% 434 12%
Revenue, Sales and Operating Income
Total Revenue of the Company under review increased by 7% compared
to previous year. Sales and operating income also increased by 8%. The
Revenue from Denim went down by 4% as a result of Workmen Strike in
the month of June, 2012 which resulted in loss of production. As a result
of expansion in capacity, the Woven Business registered a growth of 26%
in Revenue. Other income aggregating to ` 93 Crs. is mainly consisting of
Proft on Sale of Land and other Fixed Assets, Scrap Income & Interest
Income.
Raw Materials
The raw material cost in absolute terms has increased by around 5%
compared to the previous year. But the raw material cost, as a percentage
to sales, reduced by 2% during the year consequent to cotton prices being
lower in the year 2012-13 compared to the previous year. The average
purchase price for cotton was for the year 2012-13 was lower by 19%
compared to the previous year. Following chart shows the movement
of cotton prices from April, 2012 to March, 2013 domestically as well as
globally:
Cotton Price movement on ICE, USA - $/Lbs
Weekly QCTc1 30-03-2012 - 07-06-2013 (MDS)
End, QCTc1, TradePrice
07-05-2013, 86.52, 87.12, 85.00, 86.86
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
Price
USc
Lbs
84
80
76
72
66
.12
88
86.86
Cotton Price movement on MCX, India – Rs / bale
25000
20000
15000
10000
5000
0
3
0
-0
4
-...
3
1
-0
5
-...
3
0
-0
6
-...
3
1
-0
7
-...
3
1
-0
8
-...
3
0
-0
9
-...
3
1
-1
0
-...
3
0
-1
1
-...
3
1
-1
2
-...
3
1
-0
1
-...
2
8
-0
2
-...
3
1
-0
3
-...
Direct Materials
The direct materials largely include Dyes & Chemicals & Spare parts which
were marginally higher than previous year at ` 307 Crores, showing an
increase by 22% in absolute terms and as a percentage of Sales, it stands at
8% as against 7% in the previous year.
Power & Fuel
Power & Fuel cost this year has gone up by 16% in absolute value. As a
percentage of Sales, it stands at 11% as against 10% in the previous year. On
account of non-availability of Gas, Company is now consuming Grid Power
and also buying the power through Open Access mechanism.
Manpower Cost
The Manpower cost for the year is higher by 23% in absolute value; however,
as a percentage to Sales, it was at 12% compared to 10% in the previous
year. On account of larger volume consequent to addition of new capacity
and several other initiatives being taken by the Company, Manpower Cost
in proportion to Sales is expected to reduce in the coming years.
Other Costs
The other costs have gone up by 15% in absolute terms in tandem with
revenue growth. However as a percentage to sales, it has remained more
or less constant at 31% of Sales as compared to 29% in the previous year.
Operating Margins (Proft)
During the year under review, company’s EBITDA margin has remained
constant at 18%. However, EBIDTA (excluding Other Income) has increased
to 16% for the year as compared to 14% in the previous year. EBIDTA margin
22
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
has improved mainly on account of revenue growth and improved product
& customer mix.
Finance Costs
The fnance cost for the current fnancial year is ` 268 Crores as against
`270 Crores for the previous fnancial year thus remaining at the same
level in absolute terms. The foreign exchange Loss on account of FX rate
changes was ` 15 Crores for the year compared to Loss of ` 18 Crores in the
previous year. Finance Cost as a percentage to Sales decreased by 63 bps
at 7.1%. During the year Company succeeded in negotiating reduction in
Interest Rates as a result of improved Financial and Liquidity Position.
Since around 41% of your Company’s revenue is dollar denominated, it
hedges its position in the foreign exchange market. Hence, for all decision
making purposes, the dollar rate is frozen. The accounting standard
requires restatement of all assets and liabilities at the exchange rate
prevailing at the end of the quarter. Therefore, realized proft or loss on
dollar denominated working capital borrowings are booked in the fnancial
statements.
Depreciation
Depreciation as a percentage to sales has been constant at 4% during the
current year.
Proft before Tax (PBT)
Proft before tax for the year was ` 261 Crores compared to ` 236 Crores in
the previous year, refecting 11% rise during the year consequent to higher
operating proft.
Net Proft (PAT)
Proft after tax stood at ` 261 Crores in the current fnancial year compared
to ` 236 Crores (excluding exceptional item of Proft of ` 252 Crores on sale
of stake in VF Arvind Brands Private Limited) in the previous year marking
Growth of 11%.
Debt
The total debt (including due within one year) of the Company as on 31st
March, 2013 stood at ` 2119 Crores against ` 1770 Crores as on 31st March,
2012. The increase in Total Debt is as a result of additional borrowing during
the year for fnancing Capital Expenditure. Further, the company has raised
this debt under TUFS which entitles Interest Rate Subsidy to the extent of
4% to 5%.
Working Capital & Liquidity
The Current Assets during the year has gone up by 23% in absolute terms &
Current Liabilities has gone up by 7% in absolute terms.
Strike
During the year, Company’s operations were impacted on account of
unforeseen event of strike by its workmen at two of its manufacturing
plants in the month of June, 2012. On account of the strike, there was
loss of production of 6.1 million meters of fabric which resulted in loss
of revenue of ` 95 Crores and loss of EBIDTA of ` 35 Crores. The workers
had gone on strike to press their demand for higher wages. The select
group of workers had gone on strike despite the fact that Textile Labour
Association (TLA) which is the representative union had fled a case in the
Industrial Court demanding higher wages against Ahmedabad Textile Mills’
Association (ATMA), which represents several textile mills including Arvind
Limited. The matter was being heard by full bench of the Industrial Court.
Unfortunately, disregarding the TLA and the sub-judice legal case, the
workers demanded a separate settlement which was neither practically
possible nor legally tenable which compelled the company to take strict
disciplinary action on few workers. After remaining on strike for a little less
than a month, the workers called of the strike unconditionally. The dispute
with the workers has since been amicably resolved with Company agreeing
to hike the wages by about 16%.
BUSINESS REVIEW & DEVELOPMENTS
Denim
The performance of Denim Division was impacted on account of Strike
by the workmen. Due to Strike, there was a loss of Production of 4.3 Mn
Mtrs which resulted into 7% reduction in volume for the year. It is highly
satisfying to note that Denim Division could maintain proftability despite
there being addition in Denim Capacities by about 250 Mn Mtrs in India
which made the markets highly competitive. Denim Business continues
with its strategy of improving Product and Customer Mix so as to achieve
higher Contribution per meter.
Denim Volume:
110.0
90.0
70.0
50.0
11-12 12-13
Mn Mtrs
95.9
-7%
89.2
Woven Fabrics
During the Year, Company expanded the Capacity of Woven Fabrics by
12 Mn Mtrs. On account of this expansion, the Woven Business has seen
growth of 28% in volume and 29% in revenue. It is heartening to note that
there is signifcant increase in businesses with the large global as well as
local customers like GAP, Levis etc. Further, the Operational Excellence
Drive to improve the productivity has resulted into higher Operating
Margins for Woven business.
Woven Fabrics Volume:
11-12 12-13
Mn Mtrs
90.0
70.0
50.0
67.7
28%
86.9
Exchange Rate
The exchange rate of INR against USD, which was 50.8 in April, 2012 reached
to 55.1 in June, 2012 and remained around that level till September, 2012. INR
saw sudden appreciation in October, 2012 and reached to 52.4. It remained
volatile at 53.9, 54.3, 54.1 and 53.2 during November, 2012, December, 2012,
23
January, 2013 & February, 2013 respectively. At the year end, it was 51.1. The
Company had taken forward cover on net dollar exposure and the average
exchange rate for the entire year was in range of INR 49.0 to a US dollar.
SUBSIDIARIES
Amalgamation of Arvind Retail Limited with Arvind Lifestyle
Brands Limited:
You are aware that your Company has been operating its Brands Business
primarily through the subsidiary company Arvind Lifestyle Brands Limited
(ALBL) and Retail Business through another subsidiary company Arvind
Retail Limited (ARL). ARL has now been amalgamated with ALBL, vide the
Order dated 18th April, 2013 passed by the Hon’ble High Court of Gujarat at
Ahmedabad. ARL has been operating under the brand name “MegaMart”,
and had been a pioneer in the Value Retail market ofering many of its own
private brands as well as a wide range of international brands. ALBL is one of
the dominant players in the organized branded apparel market in India, with
portfolio of several large international apparel brands. Both the companies
belong to the same group of management and are engaged in similar
commercial activities. It was therefore thought ft to amalgamate these two
companies with a view to consolidate the commercial activities and thereby
achieve synergistic benefts. It is envisaged that the amalgamation would
facilitate optimal utilization of resources and exercise efcient management
control. The amalgamation will result in reduction of administrative and
operational costs and thus be benefcial to all the concerned parties, viz. the
shareholders, creditors, employees and investors of these companies.
Overview of performance of Arvind Lifestyle Brands Limited:
The subsidiary revenues have grown by 13% during the year compared to
the previous year.
2011-2012 2012-2013
1500
1000
500
1137
1285
This 13% growth comprises of 25% growth of Brands and 2% growth of
MegaMart. There is 21% growth without considering newly acquired
Brands. While Brands registered Like-to-Like growth of 1.7%, MegaMart
registered negative Like-to-Like Growth of 3.8%. This year was extremely
challenging for MagaMart business as there was severe pressure on
operating margins on account of twin factors i.e. Incidence of excise duty
on branded apparels and higher purchased cost of fnished goods as a
result of higher cotton prices. The Company had to take several corrective
steps to restore the operating margins; the major being repositioning
MagaMart from “Discount Store” to “Value Retail” with higher proportion
of private labels, with the value proposition covering the entire range of
men, women & kids segments. These initiatives have yielded the desired
results and the proftability of MegaMart is restored back to yesteryears.
During the year 1.73 lakh sq ft of retail space was added for the Brands
Business and 0.18 lakh sq ft of retail space was added for the MagaMart
Business. With this addition, the distribution strength of the Brands &
Retail businesses stands at 487 Stores with 5 lakh sq ft of retail space for
Brands and 197 Stores with 7.1 lakh sq ft of retail space for MegaMart.
During the year ALBL acquired the India operating licenses for two
international apparel brands – Billabong & Nautica, two international retail
stores brands – Debenhams & Next and one international innerwear brand
– Hanes.
Anup Engineering Limited:
Anup Engineering Limited is engaged in engineering and fabrication
business listed on Ahmedabad Stock Exchange. The Company registered
after tax proft of ` 4.94 Crores during the year.
OUTLOOK
The Company is witnessing strong demand in the international markets
especially for Wovens. However domestic retail market is sluggish which
is likely to keep growth in the Brands and Retail business slow. The sluggish
retail demand may afect the growth of MegaMart. At the same time the
brands like Arrow, US Polo and Tommy Hilfger continue to show lot of
promise for growth. The newer brands added during the last year are also
expected to grow strongly, though on a smaller base, and would provide
additional growth to the business.
Under the above scenario, the Company is expecting overall revenue
growth of over 20% for FY2013-14, on account of volume growth in both
Textiles and Brands & Retail. The Textiles business may achieve growth in
the 12-15% range, whereas Brands & Retail business is expected to grow
strongly at 25%+.
The company expects that the overall margins for the coming year will be
maintained. Margins for the Textiles businesses may improve marginally
due to improved pricing and greater scale and operational efciency,
while margins for the Brands & Retail businesses may fall slightly due to
higher investments in marketing and distribution for the newly acquired
brands.
24
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
The Strategic Help Alliance for Relief to Distressed Area (SHARDA)
Trust and Narottam Lalbhai Rural Development Fund (NLRDF) are the
company’s arms for carrying out the CSR Programmes. SHARDA & NLRDF
have been active in improving the quality of life of the urban poor & rural
poor. During 2012-13, a defnitive step has been taken by launching a study
for collecting information of the workforce and their family members to
design programmes for them.
SHARDA Trust’s Programmes
Arvind Ltd. established SHARDA (Strategic Help Alliance for Relief to
Distressed Areas) Trust in 1995 with a purpose of helping the urban poor
by upgrading their quality of life. Besides improving infrastructure facilities
in distressed areas, providing healthcare facilities and helping the people
upgrade their skills to get well paying jobs, SHARDA trust is now focussing
on providing quality education to students studying in Municipal Schools
since 2006. These educational facilities are being provided by means of
an association with local Government, the Ahmedabad Municipal School
Board.
SHARDA Trust is working with about 1000 students from class V-XII
through ‘Gyanda Education Programme’. Education programme includes
organised academic support as well as grooming students on social,
cultural and personal aspects. Year 2012-13 was especially important for
Trust as the frst batch is completing class XII. These students will now
be going for higher and professional education and subsequently start
earning which will ensure that it is the last generation in poverty for them,
a cherished dream that the Trust and the students have shared together.
Most encouraging incidents are of those few parents whose one child (all
girls) is studying with us in Municipal School and the other child (all boys)
is in private school. After noticing the progress of their girls, the parents
decided to withdraw their children from private school and got them
admitted in Municipal School to be part of Gyanda Education programme.
We consider this as huge recognition of Trust’s eforts for bringing a small
but strong social change. Gyanda’s total enrolment is poised to reach about
1500 students by 2015-16 as our conversion from primary to secondary has
improved. The Trust does plans to initiate new Gyanda Centres.
Beside school education, Trust conducted Basic Computer Familiarization
Programme for 250 children, housewives, working women and working
and non-working men. In addition, about 100 youth were trained for
Basic English Programme. The Trust organised two ‘Yoga Shibirs’ for the
wellbeing of people in community around our Naroda premises during
2012-13. This was conducted by Swami Adhyatmanandji of the Sivananda
Ashram, Ahmedabad. Both the camps were attended by about 300 people
in each camp.
Towards end of 2012, the Trust initiated ambitious plan to collect
comprehensive information about Arvind’s workers and their family
members related to education, health, housing and contact information
and thereby plan welfare and capacity building initiatives to enhance
quality of life. For doing so, a Workers’ Information System was designed
with provisions for generating intended reports. All the information
was collected online. As of March 2013, frst set of study with over 7000
workers has been completed in Ahmedabad region and based on the
Strategy and Programmes for “Corporate Social
Responsibility”2012-13
fndings suggested initiatives were presented to the top management.
2013-14 will witness initiation of activities in Ahmedabad region and
expanding the scope of study to Santej and Bangalore regions to cover
complete workforce.
These activities and programmes have opened up avenues for expansion
of the Trust’s initiatives and for undertaking newer initiatives.
NLRDF’s Programmes
Established in 1978 as Public Charitable Trust, NLRDF is the rural CSR arm
of Arvind Limited. NLRDF directly intervenes at the village level with the
strategy of linking the government programmes with the rural poor and
thereby increasing the efciency and the efectiveness of the delivery
process.
The year under review mainly witnessed programmes for skill upgrading
for livelihood promotion, economic empowerment of widows and
programme for HIV/AIDS awareness and prevention.
Specifcally, 75 youngsters from BPL families received training for mason
work and tool kit for same was given to them to ensure earnings. NLRDF
trained 144 Female Sex Workers and their family members in diferent skill
up-gradation initiatives. Out of which, 111 women received a two months
training for Cutting and Tailoring. They got sewing machines at token cost
to ensure earnings. Other 33 women were trained for applying Mehandi.
NLRDF’s entrepreneurship programmes for widows have its operations
in 20 districts of Gujarat. It has trained about 11000 widows in last 6 years.
During 2012-13, more than 3000 widows were trained. Each one of them
received a kit of their choice worth about ` 5000 for their livelihood. Newly
acquired confdence to step out of their houses which they could not think
of earlier is the noticeable outcome from this programme. Few selected
needy and working widow entrepreneurs are being fnancially supported
for the expansion of their current business.
Another programme worth mentioning is on HIV/AIDs control.
Intervention includes providing services like Behaviour Change
Communication, Counseling, STD treatment and creating enabling
environment and referral and linkages to core population. This has
brought signifcant change in their practice and behaviour. A workshop
on ‘Awareness on HIV/AIDS-prevention and control’ was also organized
for industrial workers in Ahmedabad which was attended by about 500
people.
Under Mamta Taruni Programme, 860 non-school going adolescent girls
from 18 villages were identifed. They are trained for nutrition awareness,
personal hygiene, health care etc.
A state level programme on the occasion of International Women Day 2013
was celebrated on 8
th
March 2013 at Khedbrahma. Around 2500 women
from surrounding villages participated in this one day event and experts
shared with them information on their legal rights, education etc.
Arvind Limited, through SHARDA & NLRDF aspires to help the poor
in urban and rural settings through its programmes and believes that
programmes of social renewal with a business approach will bring lasting
change in society.
25
Report on the Financial Statements
We have audited the accompanying fnancial statements of ARVIND
LIMITED (“the Company”), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for
the year then ended, and a summary of signifcant accounting policies and
other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position, fnancial
performance and cash fows of the Company in accordance with the
Accounting Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 (“the Act”). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the fnancial statements that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these fnancial statements
based on our audit. We conducted our audit in accordance with the
Standards on Auditing issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the fnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the fnancial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company’s preparation and
fair presentation of the fnancial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the fnancial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the fnancial statements give the information
required by the Act in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of afairs of the Company
as at March 31, 2013;
(b) in the case of the Statement of Proft and Loss, of the proft for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows for the year
ended on that date.
Emphasis of Matter
As mentioned in Note No. 43 in respect of early adoption of Accounting
Standard (AS) – 30 on ‘Financial Instruments: Recognition and
Measurement’ issued by the Institute of Chartered Accountants of India
and the clarifcation issued on Application of AS 30, the Company has
measured all its Financial Assets and Liabilities at their respective Fair
Values or at Amortised Cost except for those items whose accounting
treatment is covered by the existing accounting standards notifed by
Companies (Accounting Standard) Rules, 2006. Accordingly, the carrying
amount of Long Term Borrowings would have been higher by ` 4.20 Crores
and carrying value of Hedge Reserve would have been higher by ` 23.64
Crores. Our opinion is not qualifed in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2003 (“the
Order”) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specifed in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which
to the best of our knowledge and belief were necessary for the
purpose of our audit;
b. in our opinion proper books of account as required by law
have been kept by the Company so far as appears from our
examination of those books and proper returns adequate for
the purposes of our audit have been received from branches
not visited by us;
c. the Balance Sheet, Statement of Proft and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the
books of account and with the returns received from branches
not visited by us;
d. in our opinion, the Balance Sheet, Statement of Proft and
Loss, and Cash Flow Statement comply with the Accounting
Standards referred to in subsection (3C) of section 211 of the
Companies Act, 1956 and Accounting Standards (AS) – 30 on
‘Financial Instruments: Recognition and Measurement’ issued
by the Institute of Chartered Accountants of India (ICAI);
e. on the basis of written representations received from the
directors as on March 31, 2013, and taken on record by the
Board of Directors, none of the directors is disqualifed as on
March 31, 2013, from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the Companies
Act, 1956.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N. D. Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
AUDITORS’ REPORT TO THE MEMBERS OF ARVIND LIMITED
26
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
ANNEXURE TO THE AUDITORS’ REPORT
Re: ARVIND LIMITED
Referred to in Paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date,
(i) (a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of its fxed assets.
(b) As explained to us, the fxed assets have been physically verifed by the management during the year in accordance with a phased programme
of verifcation, which in our opinion provides for physical verifcation of all the fxed assets at reasonable intervals. We are informed that no
material discrepancies were noticed on such verifcation.
(c) In our opinion and as per the information and explanations given to us, the Company has not made any substantial disposal of fxed assets
during the year and going concern status of the Company is not afected.
(ii) (a) As explained to us, the inventory has been physically verifed during the year by the management. In our opinion, the frequency of verifcation
is reasonable.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventory followed by
the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on verifcation between the physical
stocks and the book records were not material having regard to the size of the Company, and the same have been properly dealt with.
(iii) The Company has not granted/taken any loans secured or unsecured to/from Companies, frms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Consequently, requirement of clauses (iii,b), (iii,c), (iii,d), (iii,e), (iii,f) and (iii,g) of paragraph 4 of the
order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with
the size of the Company and the nature of its business with regard to purchase of inventory, fxed assets and with regard to the sale of goods and
services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.
(v) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that there were
no contracts or arrangements that need to be entered in the Register maintained under section 301 of the Companies Act, 1956. Consequently,
requirement of clauses (v,a) and (v,b) of paragraph 4 of the order are not applicable.
(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and
58AA or any other relevant provisions of the Act and rules framed thereunder. No order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) The Company has an internal audit system, which in our opinion, is commensurate with the size of the Company and the nature of its business.
(viii) We have broadly reviewed the books of accounts relating to materials, labour and other items of cost maintained by the Company pursuant to the
Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the
opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination
of these records with a view to determine whether they are accurate and complete.
(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
and other material statutory dues applicable to it.
(b) There are no undisputed amounts outstanding as at March 31, 2013 for a period of more than six months from the date they became payable.
(c) Following amounts have not been deposited as on March 31, 2013 on account of any dispute :
Nature of Statute Nature of the dues ` in Crores Period to which the amount relates Forum where matter is pending
Sales Tax Act Sales Tax 11.51 1998-1999, 2002-2003, 2003-2004,
2004-2005, 2005-2006, 2007-2008
High Court
0.05 2002-2003, 2003-2004 Appellate Tribunal
2.23 2006-2007 Joint Commissioner Commercial
Tax (Appeal )
0.90 2006-2007 Joint Commissioner Commercial
Tax (Appeal )
Central Excise Act Excise Duty 9.91 2000-2001, 2001-2002 High Court
3.05 2000-2001, 2001-2002, 2002-2003,
2003-2004, 2005-2006, 2008-2009,
2009-2010
CESTAT
9.18 1999-2000, 2000-2001 Supreme Court
5.47 2000-2001, 2001-2002, 2002-2003 Tribunal
27
Nature of Statute Nature of the dues ` in Crores Period to which the amount relates Forum where matter is pending
Customs Act Custom Duty 0.05 2005-2006, 2006-2007, 2007-08 Joint Commissioner
0.72 1998-1999 to 2006-2007 CESTAT
Finance Act Service Tax 0.61 2004-2005, 2005-2006, 2006-2007,
2007-2008
Additional Commissioner
0.05 2005-2006, 2006-2007 Assistant Commissioner
0.12 2005-2006 CESTAT(Appeal)
0.04 2004-2005, 2005-2006, 2006-2007,
2007-2008
Commissioner
Income Tax Act Fringe Beneft Tax 0.21 2005-2006 ITAT
Income Tax 13.97 2003-2004, 2004-2005, 2005-2006 CIT Appeal
(x) The Company has neither any accumulated losses nor has incurred any cash losses during the fnancial year covered by our audit and in the
immediately preceding fnancial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fnancial
institutions, banks or debenture holders.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/mutual beneft fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the order are not
applicable.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause
(xiv) of paragraph 4 of the order are not applicable.
(xv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the terms and conditions
on which the Company has given guarantees for loans taken by others from banks or fnancial Institutions are not prejudicial to the interest of the
Company.
(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans obtained
during the year were, prima facie, applied by the Company for the purpose for which they were obtained, other than temporary deployment
pending application.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds
raised on short-term basis have not prima facie, been used during the year for long-term investments.
(xviii) During the year, the Company has not made any preferential allotment of shares to persons covered in the register maintained under section 301 of
the Act.
(xix) According to the information and explanations given to us and the records examined by us, the Company has not issued any Secured Debentures
during the year.
(xx) The Company has not raised any money by public issue during the year.
(xxi) Based upon the audit procedure performed by us and as per the information and explanations given to us, we report that no fraud on or by the
Company has been noticed or reported during the course of our audit.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N. D. Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
28
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Note As at
March 31, 2013
As at
March 31, 2012
Equity and Liabilities
Shareholders’ funds
Share Capital 3 258.04 258.04
Reserves and Surplus 4 2,041.47 1,757.96
Non-current liabilities
Long Term Borrowings 5 947.10 707.35
Deferred Tax Liabilities (Net) 6 12.82 12.82
Long Term Provisions 7 11.98 49.51
Current liabilities
Short Term Borrowings 8 1,015.54 895.95
Trade Payables 9 664.48 598.32
Other Current Liabilities 10 245.33 246.26
Short Term Provisions 7 86.96 94.57
Total 5,283.72 4,620.78
Assets
Non-current assets
Fixed Assets
Tangible Assets 11 2,334.07 2,262.61
Intangible Assets 12 5.59 6.45
Capital Work-in-progress 200.32 179.10
Non-current Investments 13 492.86 337.11
Long Term Loans and Advances 14 235.93 189.21
Other Non-current Assets 15 0.54 2.04
Current assets
Inventories 16 877.96 728.42
Trade Receivables 17 442.42 405.55
Cash and Bank Balances 18 150.60 39.37
Short Term Loans and Advances 14 250.24 214.75
Other Current Assets 15 293.19 256.17
Total 5,283.72 4,620.78
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Balance Sheet as at 31st March, 2013
29
` in Crores
Note Year ended
March 31, 2013
Year ended
March 31, 2012
Revenue from operations (Gross) 21 3,795.14 3,511.87
Less : Excise Duty 14.85 17.75
Revenue from operations (Net) 3,780.29 3,494.12
Other Income 22 93.46 135.81
Total Revenue 3,873.75 3,629.93
Expenses:
Cost of materials and accessories consumed 23 1,641.22 1,568.76
Purchases of Stock in Trade 24 84.44 37.40
Project Expenses 28.07 13.60
Changes in inventories of fnished goods, work-in-progress and
stock-in-trade 25 (166.01) 3.57
Employee benefts expense 26 442.22 360.51
Finance costs 27 268.44 270.25
Depreciation and amortization expense 28 150.49 130.51
Other expenses 29 1,163.66 1,009.04
Total Expenses 3,612.53 3,393.64
Proft before exceptional and extraordinary items and tax 261.22 236.29
Exceptional items - -
Proft before extraordinary items and tax 261.22 236.29
Extraordinary Items 30 - 251.80
Proft before Tax 261.22 488.09
Tax expense:
Current Tax (MAT) 53.79 85.15
MAT Credit Entitlement (53.79) (31.29)
Proft for the year 261.22 434.23
Earnings per equity share 35
(Nominal Value per Share ` 10/- (Previous year ` 10/-):
Before Extraordinary Items
Basic & Diluted 10.12 9.16
After Extraordinary Items
Basic & Diluted 10.12 16.83
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Statement of Proft and Loss for the year ended on 31st March, 2013
30
A R V I N D L I M I T E D 82
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ANNUAL REPORT 2012-13
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
A CASH FLOW FROM OPERATING ACTIVITIES
Proft Before taxation 261.22 488.09
Adjustments for:
Depreciation /Amortization 150.49 130.51
Interest Income (24.26) (15.56)
Interest Expenses 244.39 245.77
Dividend Income (0.35) (0.56)
Share of Proft in LLP (0.58) (1.45)
Bad Debts Written Of 0.03 0.32
Provision for Dimunition in value of Investments - 6.48
Provision for Bad Debts 0.23 -
Provision for Retirement Benefts 5.36 4.24
Provision for Wealth Tax 0.20 0.20
Sundry Debit Written of 0.49 1.19
Sundry Credit Balances Appropriated (1.20) (2.83)
Foreign Exchange Diference 0.41 (0.16)
Fixed Assets written of 0.51 2.01
Proft on Sale of Land held for sale (16.12) (67.40)
Proft on Sale of Tangible/Intangible assets (26.13) (24.53)
Loss on sale of Investments 0.02 1.57
Extra Ordinary Item - 333.49 (251.80) 28.00
Operating Proft before Working Capital Changes 594.71 516.09
Working Capital Changes:
Changes in Inventories (149.54) 106.78
Changes in trade payables 67.36 (260.10)
Changes in other current liabilities 10.16 19.07
Changes in provisions 1.56 (1.83)
Changes in loans and advances 5.47 (46.67)
Changes in trade receivables (37.13) 208.90
Changes in other current assets (39.95) (84.75)
Changes in Other Bank Balances 4.28 (6.80)
Net Changes in Working Capital (137.79) (65.40)
Cash Generated from Operations 456.92 450.69
Direct Taxes paid (Net of Income Tax refund) (49.80) (73.11)
Net Cash from Operating Activities 407.12 377.58
B Cash Flow from Investing Activities
Purchase of tangible/intangible assets (263.66) (333.93)
Sale of tangible assets 71.42 126.48
Sale of Land held for sale 16.18 98.78
Changes in Capital Advances 8.79 (13.60)
Share Application Money (65.98) (7.62)
Change in Long Term Investments (90.01) (69.95)
Changes in Loans given (43.17) 11.33
Dividend Income 0.35 0.56
Share of Proft in LLP 0.58 1.45
Interest Income 24.41 15.07
Net cash fow before Extra Ordinary Item (341.09) (171.43)
Proceeds from Sale of Investments in Joint Venture - 257.27
Net cash fow from Investing Activities (341.09) 85.84
Cash Flow Statement for the year ended on 31st March, 2013
31
Cash Flow Statement for the year ended on 31st March, 2013 (Contd.)
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
C Cash Flow from Financing Activities
Issue of Share Capital - 0.23
Dividend Paid (25.64) -
Dividend Distribution Tax Paid (4.19) -
Securities Premium received - 0.11
Changes in long term Borrowings 224.57 (216.23)
Changes in short term borrowings 117.69 0.93
Interest Paid (264.47) (259.18)
Net Cash fow from Financing Activities 47.96 (474.14)
Net Increase/(Decrease) in cash & cash equivalents 113.99 (10.72)
Cash & Cash equivalent at the beginning of the period 26.81 23.32
Add : Adjustment on Amalgamation - 14.21
26.81 37.53
Cash & Cash equivalent at the end of the period 140.80 26.81
a. Particulars As at As at
March 31, 2013 March 31, 2012
Cash and cash equivalents comprise of: (Note 18)
Cash on Hand 0.77 1.02
Cheques on Hand (` 10,000/-) (` 15,000/-)
Balances with Banks* 140.04 25.78
Cash and cash equivalents 140.81 26.80
Efect of Exchange Rate Changes 0.01 (0.01)
Cash and cash equivalents as restated 140.80 26.81
* Includes the following balance which is not available for use by the Company
Unpaid dividend account 0.49 0.33
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
32
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
1. COMPANY BACKGROUND
Arvind Limited is one of the India’s leading vertically integrated
textile companies with the presence of almost eight decades in this
industry. It is among the largest denim manufacturers in the world.
It also manufactures a range of cotton shirting, denim, knits and
bottom weights (Khakis) fabrics and Jeans and Shirts Garments.
Arvind, through its subsidiary company Arvind Lifestyle Brands
Limited, is marketing in India the branded apparel under various
brands and is also licensee in India for various international brands.
The brands portfolio of the company includes International brands
like Arrow, US Polo, Izod, Elle, Cherokee etc. It also operates apparel
Value Retail stores MEGAMART. It also operates the specialty retail
stores under the licensing arrangement with international brands
of Debanhams & Next. Arvind also has the presence in Telecom
business directly and through joint venture companies. Recently
Arvind has made foray in to Technical Textiles on its own and in joint
venture with leading global players.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PREPARATION
The Company follows the accrual method of accounting. The
fnancial statements have been prepared in accordance with
the historical cost convention (except so far as they relate to
(a) revaluation of fxed assets and providing for depreciation
on revalued amounts and (b) items covered under ‘Accounting
Standard (AS) – 30’ on ‘Financial Instruments: Recognition and
Measurement” which have been measured at their fair value),
accounting principles generally accepted in India. The Financial
Statements comply with the requirements of the accounting
standards notifed under Section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and other relevant provisions
of the Companies Act, 1956.
The preparation of fnancial Statements requires the management
to make estimates and assumptions in the reported amounts
of assets and liabilities (including contingent liabilities) as of the
date of the fnancial statements and the reported income and
expenses during the reporting period. Management believes that
the estimates used in preparation of the fnancial statements are
prudent and reasonable. Future results could difer from these
estimates.
All assets and liabilities have been classifed as current or non-
current as per the Company’s normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition
of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current – non current classifcation of
assets and liabilities.
(B) INFLATION
Assets and liabilities are recorded at historical cost to the Company
(except so far as they relate to (a) revaluation of fxed assets and
providing for depreciation on revalued amounts and (b) items
covered under ‘Accounting Standard (AS) – 30’ on ‘Financial
Instruments: Recognition and Measurement” which have been
measured at their fair value). These costs are not adjusted to refect
the changing value in the purchasing power of money.
(C) REVENUE RECOGNITION
(C.1) Sales and operating income includes sale of products, by-
products and waste, income from job work services and gain
or loss on forward contracts. Sales are recognized based
on passage of title to goods which generally coincides with
dispatch. Revenue from export sales are recognized on
shipment basis. Sales are stated net of returns, excise duty
& Sales Tax/VAT. Export incentives are accounted on accrual
basis at the time of export of goods, if the entitlement can
be estimated with reasonable accuracy and conditions
precedent to claim are fulflled.
(C.2) Revenue from job work services is recognized based on the
services rendered in accordance with the terms of contracts.
(C.3) Revenue in respect of projects for Construction of Plants
and Systems, execution of which is spread over diferent
accounting periods, is recognised on the basis of percentage
of completion method in accordance with Accounting
Standard 7 – Accounting for Construction Contracts.
Percentage of completion is determined by the proportion
that contract costs incurred for work done till date bears to
the estimated total contract cost.
Diference between costs incurred plus recognised proft/
less recognised losses and the amount invoiced is treated as
contract in progress.
Determination of revenues under the percentage of
completion method necessarily involves making estimates by
the Company, some of which are of a technical nature, relating
to the percentage of completion, costs to completion,
expected revenue from the contract and the foreseeable
losses to completion.
(C.4) Claims receivable on account of Insurance are accounted
for to the extent the Company is reasonably certain of their
ultimate collection.
(D) VALUATION OF INVENTORY
(D.1) The stock of Work-in-progress and fnished goods of the Yarn,
Fabric and Branded Garment has been valued at the lower of
cost and net realizable value. The cost has been measured on
the standard cost basis and includes cost of materials and
cost of conversion.
(D.2) All other inventories of stores, consumables, raw materials
(Electronics Division), project material at site are valued at
cost. The stock of waste is valued at market price. The other
raw materials, fnished goods and stock at branches are valued
at lower of cost and net realizable value. Cost is measured
on actual average for the whole year. Excise duty wherever
applicable is provided on fnished goods lying within the
factory and bonded warehouse at the end of the year.
(E) FIXED ASSETS & DEPRECIATION
Tangible Assets
(E.1) Fixed assets are stated at their original cost of acquisition/
revalued cost wherever applicable less accumulated
depreciation and impairment losses. Cost comprises of
all costs incurred to bring the assets to their location and
working condition.
(E.2) Items of fxed assets that have been retired from active use
and are held for disposal are stated at the lower of their net
book value and net realisable value and are shown separately
in the fnancial statements. Any expected loss is recognised
Notes to fnancial statements
33
immediately in the Statement of Proft and Loss.
(E.3) Exchange rate gain or loss on foreign currency loans related
to acquisition of depreciable assets are being capitalized as
per the notifcation dated 31
st
March, 2009 as amended from
time to time issued by Ministry of Corporate Afairs, New
Delhi.
(E.4) Depreciation on Revalued Fixed Assets is calculated on
the residual life of the assets or as per rates specifed in the
Schedule XIV to the Companies Act, 1956 whichever is higher.
(E.5) Additions to fxed assets after 1st October 2006 have been
stated at cost net of CENVAT wherever applicable.
(E.6) Directly identifable preoperative expenses of new projects
of capital nature under implementation are carried forward
under capital work-in-progress, pending capitalization.
(E.7) Depreciation on Fixed Assets is provided, pro rata for the
period of use, on Straight Line Method (SLM), as per rates
specifed in the Schedule XIV to the Companies Act, 1956
except for the following which are based on management’s
estimate of useful lives of the fxed assets:
Car Vehicles: 20%; Leasehold Improvements: 10%
(E.8) Depreciation on impaired asset is provided on the asset’s
revised carrying amount, over its remaining useful life.
(E.9) Depreciation on exchange rate diference capitalized
is provided over the balance life of the assets as per the
notifcation dated 31
st
March, 2009 as amended from time to
time issued by the Ministry of Corporate Afairs.
(E.10) Individual assets costing less than ` 5,000/- have been fully
depreciated in the year of purchase on prorata basis.
(E.11) Revaluation Reserve on Assets sold is transferred to General
Reserve.
Intangible Assets
(E.12) Intangible assets are stated at their cost of acquisition,
less accumulated amortization and impairment losses. An
intangible asset is recognised, where it is probable that the
future economic benefts attributable to the asset will fow
to the enterprise and where its value/cost can be reliably
measured.
(E.13) The Company capitalizes software and related
implementation costs where it is reasonably estimated that
the software has an enduring useful life.
(E.14) Software is depreciated over management estimate of its
useful life of 5 years and Patent/Knowhow is depreciated over
its useful validity period.
(F) IMPAIRMENT OF ASSETS
An asset is considered as impaired in accordance with Accounting
Standard 28 on Impairment of Assets when at balance sheet date
there are indications of impairment and the carrying amount of
the asset, or where applicable the cash generating unit to which the
asset belongs, exceeds its recoverable amount (i.e. the higher of the
asset’s net selling price and value in use). The carrying amount is
reduced to the recoverable amount and the reduction is recognized
as an impairment loss in the Statement of Proft and Loss
Assessment is also done at each Balance Sheet date as to whether
there is any indication that an impairment loss recognised for an
asset in prior accounting periods may no longer exist or may have
decreased.
(G) INVESTMENTS
(G.1) Investments are classifed as Long Term Investments and
Current Investments. Long term investments are stated
at cost less permanent diminution in value, if any. Current
Investments are stated at lower of cost and net realizable value.
(G.2) Investments in subsidiaries are valued at cost less any
provision for impairment. Investments are reviewed for
impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable.
(G.3) Investment property: Investment in buildings that are
not intended to be occupied substantially for use by, or in
the operations of, the Company, have been classifed as
investment property. Investment properties are carried at
cost less accumulated depreciation.
(H) FOREIGN CURRENCY TRANSACTIONS
(H.1) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(H.2) Monetary items denominated in foreign currencies at the
year end are restated at year end rates.
(H.3) Non-monetary foreign currency items are carried at cost.
(H.4) The Company has opted to avail the choice provided under
paragraph 46A of AS 11: The Efects of Changes in Foreign
Exchange Rates inserted vide Notifcation dated December
29, 2011. Consequently, All long term foreign currency
monetary items consisting of loans which relate to acquisition
of depreciable capital assets at the end of the year have been
restated at the rate prevailing at the balance sheet date. The
diference arising as a result has been added to or deducted
from the cost of the assets. Exchange rate diference on
other long term foreign currency loans is carried to ‘Foreign
Currency Monetary Item Translation Diference Account’ to
be amortized up to the period of loan or up to March 31, 2020
whichever is earlier.
(H.5) Any income or expense on account of exchange diference
either on settlement or on translation other than as
mentioned in (H.4) above is recognised in the Statement of
Proft and Loss.
(H.6) Expenses of overseas ofces are translated and accounted at
the monthly average rate.
(I) DERIVATIVES & COMMODITY HEDGING TRANSACTIONS
(I.1) In order to hedge its exposure to foreign exchange, interest
rate and commodity price risks, the Company enters into
forward, option, swap contracts and other derivative
fnancial instruments. The Company neither holds nor issues
any derivative fnancial instruments for speculative purposes.
(I.2) Derivative fnancial instruments are initially recorded at their
fair value on the date of the derivative transaction and are
re-measured at their fair value at subsequent balance sheet
dates.
(I.3) Changes in the fair value of derivatives that are designated
and qualify as cash fow hedges and are determined to be an
efective hedge are recorded in hedging reserve account.
To designate a forward contract or option as an efective
hedge, management objectively evaluates and evidences
with appropriate supporting documents at the inception of
Notes to fnancial statements
34
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
each contract whether the contract is efective in achieving
ofsetting cash fows attributable to hedged risk. Any
cumulative gain or loss on the hedging instrument recognised
in hedging reserve is kept in hedging reserve until the forecast
transaction occurs or the hedged accounting is discontinued.
Amounts deferred to hedging reserve are recycled in the
Statement of Proft and Loss in the periods when the hedged
item is recognised in the Statement of Proft and Loss or
when the portion of the gain or loss is determined to be an
inefective hedge.
(I.4) Derivative fnancial instruments that do not qualify for hedge
accounting are marked to market at the balance sheet date
and gains or losses are recognised in the Statement of Proft
and Loss immediately.
(I.5) Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated or exercised, or no
longer qualifes for hedge accounting. If a hedged transaction
is no longer expected to occur, the net cumulative gain or loss
recognised in hedging reserve is transferred to proft or loss
for the year.
(J) EMPLOYEE BENEFITS
(J.1) The Company has Defned Contribution Plans for post
employment benefts namely Provident Fund and
Superannuation Fund which are recognized by the Income Tax
Authorities. These funds are administered through trustees
and the Company’s contributions thereto are charged
to revenue every year. The Company also pays insurance
premiums to fund a post-employment medical assistance
scheme, a Defned Contribution Plan administered by ICICI
Lombard General Insurance Company Limited which is
charged to revenue every year. The Company’s Contribution
to State Plans namely Employee’s State Insurance Fund and
Employee’s Pension Scheme are charged to revenue every
year.
(J.2) The Company has Defned Beneft Plans namely leave
encashment / compensated absences and Gratuity for all the
employees, the liability for which is determined on the basis
of an actuarial valuation at the year end and incremental
liability, if any, is provided for in the books. The actuarial
valuation is done based on Projected Unit Credit Method.
Gratuity scheme is administered through trust recognised
by the Income Tax Authorities and / or by Life Insurance
Corporation of India.
(J.3) Actuarial Gains and Losses comprise of experience
adjustments and the efects of changes in actuarial
assumptions and are recognised immediately in the
Statement of Proft and Loss as income or expense.
(K) BORROWING COST
Borrowing costs include interest, fees and other charges incurred
in connection with the borrowing of funds. It is calculated on the
basis of efective interest rate in accordance with Accounting
Standard (AS) -30 and considered as revenue expenditure and
charged to Statement of Proft and Loss for the year in which it is
incurred except for borrowing costs either generally or specifcally
attributed directly to the acquisition/improvement of qualifying
assets up to the date when such assets are ready for intended use
which are capitalised as a part of the cost of such asset.
(L) LEASE ACCOUNTING
(L.1) Assets acquired under Finance Lease are segregated from
the assets owned and recognized as asset at an amount equal
to the fair value of the leased assets at the inception of the
lease or the present value of the minimum lease payments
whichever is lower with corresponding outstanding liability.
(L.2) Lease rental payable on such fnance lease has been
apportioned between fnance charge and the reduction
in the outstanding liability. The fnance charge has been
allocated to periods during the lease term so as to produce
constant periodic rate of interest on the remaining balance
of liability for each period.
(L.3) Lease Rentals for assets acquired under operating lease are
recognised as an expense in Statement of Proft & Loss on a
straight line basis over the lease term.
(M) TAXES ON INCOME
(M.1) Tax expense consists of both current as well as deferred
tax. Current tax represents amount of income tax payable
including the tax payable u/s 115JB, if any, in respect of taxable
income for the year.
(M.2) Minimum Alternate Tax Credit is recognised as an asset only
when and to the extent there is convincing evidence that the
Company will pay normal income tax within the specifed
period.
(M.3) Deferred tax is recognised on timing diference between the
accounting income and the taxable income for the year that
originates in one period and are capable of reversal in one
or more subsequent periods. Such deferred tax is quantifed
using the tax rates and laws enacted or substantively enacted
as on the Balance Sheet date.
(M.4) Deferred tax asset is recognised and carried forward to
the extent that there is a virtual certainty supported by
convincing evidence that sufcient future taxable income
will be available against which such deferred tax asset can be
realized.
(N) EARNING PER SHARE
The Company reports basic and diluted Earnings Per Share (EPS)
in accordance with Accounting Standard 20 on Earnings Per Share.
Basic EPS is computed by dividing the net proft or loss for the year
by the weighted average number of Equity shares outstanding
during the year. Diluted EPS is computed by dividing the net proft
or loss for the year by the weighted average number of equity shares
outstanding during the year as adjusted for the efects of all dilutive
potential equity shares, except where the results are anti-dilutive.
(O) PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS
Provisions involving a substantial degree of estimation in
measurement are recognized when there is a present obligation
as a result of past events and it is probable that there will be an
outfow of resources. Contingent liabilities are not recognized but
are disclosed in the accounts by way of a note. Contingent assets are
neither recognized nor disclosed in the fnancial statements.
(P) CAPITAL ISSUE EXPENSES
Expenses on issue of Shares, Debentures and GDRs are being
adjusted against Securities Premium Account as permitted by
section 78 of the Companies Act.
Notes to fnancial statements
35
Notes to fnancial statements
` in Crores
3 Share Capital As at
March 31, 2013
As at
March 31, 2012
Authorised
Equity Shares
565,000,000 Shares (Previous Year 565,000,000) 565.00 565.00
Par Value of ` 10/- per share
Preference Shares
10,000,000 Shares (Previous Year 10,000,000) 100.00 100.00
Par Value of ` 100/- per share
665.00 665.00
Issued
Equity Shares
258,043,969 Shares (Previous Year 254,633,441) 258.04 254.63
Par Value of ` 10/- per share
258.04 254.63
Subscribed and fully paid up
Equity Shares
258,043,069 Shares (Previous Year 254,632,541) 258.04 254.63
Par Value of ` 10/- per share fully paid up
Forfeited Shares
900 Shares (Previous Year 900)
(` 4,500/- originally paid up (Previous Year ` 4,500/-)
Equity Shares Suspense Account - 3.41
Total 258.04 258.04
a Reconciliation of Number of Equity Shares
Particulars
As At March 31,2013 As At March 31,2012
No. of Shares ` in Crores No. of Shares ` in Crores
Balance at the beginning of the year 254,632,541 254.63 254,400,041 254.40
Add :
Shares alloted persuant to exercise of Employee Stock Option Plan - - 232,500 0.23
Shares alloted to the shareholders of Amalgamated Company 3,410,528 3.41 - -
Balance at the end of the year 258,043,069 258.04 254,632,541 254.63
b Rights, Preferences and Restrictions attached to Shares
Equity Shares:
The Company has one class of shares referred to as equity shares having a par value of ` 10 each. Each shareholder is entitled to one vote per share
held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except
in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their shareholding.
c Details of Shares held by Shareholders holding more than 5% of the aggregate shares in the Company
Particulars
As At
March 31,2013
As At
March 31,2012
Aura Securities Private Limited 9,57,90,590 8,57,38,882
37.12% 33.67%
Life Insurance Corporation of India 1,65,85,134 1,65,58,953
6.43% 6.50%
d Shares reserved for issue under options
Refer note 36 for details of shares to be issued under options
e Shares allotted as fully paid up pursuant to contract without payment being received in cash (during 5 years immediately preceding
March 31, 2013)
34,10,528 Equity Shares of ` 10 each were issued during the year to the erstwhile shareholders of Arvind Products Limited pursuant to the Scheme of
Amalgamation without payment being received in cash.
f Proposed Dividend
The fnal dividend proposed for the year is as follows:
Particulars
As At
March 31,2013
As At
March 31,2012
On Equity Shares of ` 10/- each
Dividend per Equity Share (` ) 1.65 1
Percentage of Dividend Proposed 16.50% 10%
36
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
` in Crores
4 Reserves and Surplus As at
March 31, 2013
As at
March 31, 2012
Captial Reserve
Balance as per last fnancial statements 26.71 26.71
General Reserve
Balance as per last fnancial statements 26.16 5.79
Add: Amount transferred from Revaluation Reserve 5.24 20.37
Add: Amount transferred from Surplus in Statement of Proft & Loss 20.00 -
Balance at the end of the year 51.40 26.16
Securities Premium Account
Balance as per last fnancial statements 653.54 653.43
Add: Addition during the year - 0.11
Balance at the end of the year 653.54 653.54
Captial Redemption Reserve
Balance as per last fnancial statements 69.50 69.50
Revaluation Reserve
Balance as per last fnancial statements 284.82 305.86
Add: Addition during the year (Note 11c) 8.34 -
293.16 305.86
Less: Amount transferred to General Reserve 5.24 20.37
Less: Loss on Compulsory Acquisition adjusted 10.13 0.67
Balance at the end of the year 277.79 284.82
Hedge Reserve (Note 43)
Balance as per last fnancial statements (98.25) 31.89
Add: Adjustment during the year (Net) 74.61 (130.14)
Balance at the end of the year (23.64) (98.25)
Foreign Currency Monetary Item Translation Diference Account
Balance as per last fnancial statements (4.19) 0.75
Add: Adjustment during the year (Net) (0.71) (4.94)
Balance at the end of the year (4.90) (4.19)
Investment Revaluation Reserve
Balance as per last fnancial statements - (2.19)
Add: Adjustment during the year (Net) - 2.19
Balance at the end of the year - -
Surplus in Statement of Proft and Loss
Balance as per last fnancial statements 799.67 450.12
Add/(Less): Adjustments on Amalgamation
Proft of Amalgamated Company - 1.62
Amount transferred to Statement of Proft and Loss on account of Amalgamation - (56.31)
799.67 395.43
Add: Proft for the year 261.22 434.23
1,060.89 829.66
Less : Appropriation
Transfer to General Reserve 20.00 -
Proposed dividend on Equity Shares for the year 42.58 25.80
Dividend distribution tax on Proposed dividend on Equity Shares 7.24 4.19
Balance at the end of the year 991.07 799.67
Total 2,041.47 1,757.96
37
` in Crores
5 Long Term Borrowings Non- Current portion Current Maturities
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Secured:
Term Loans :
From Banks 785.02 603.46 130.46 136.35
From Financial Institutions and Others 159.50 101.31 22.90 17.93
Unsecured:
From Financial Institutions 2.58 2.58 - -
Deferred Electricity Duty - - 3.12 12.69
947.10 707.35 156.48 166.97
Amount disclosed under the head “Other Current Liabilities” (Note 10) - - 156.48 166.97
Total 947.10 707.35 - -
a Borrowings As At
March 31, 2013
As At
March 31, 2012
At Amortized Cost 1,103.58 874.32
At Original Cost 1,107.78 873.32
b Nature of Security:
Term Loans of ` 1097.88 Crores
i Loans amounting to ` 1061.27 Crores are secured by (a) frst charge on all the Immovable Properties, Movable Properties, Intangible
Properties and General Assets of the Company presently relating to the Textile Plants and all Immovable Properties, Movable Properties,
Intangible Properties and General Assets acquired by the Company at any time after execution of and during the continuance of the Indenture
of Mortgage; (b) additional charge by way of mortgage on Immovable Properties at villages Jethlaj, Karoli, Vadsar, Moti Bhoyan, Santej and
Khatrej; (c) charge on the Company’s Trademarks and (d) Secured by second charge on all the Company’s Current Assets both present and
future relating to the Textile Plants. Out of these ` 837.47 Crores are additionally secured by frst charge on Movable Fixed Assets of Jeans and
Shirts Garment divisions at Bangalore. The Company is in the process of creating security in respect of loans amounting to ` 72.76 Crores.
ii Loans amounting to ` 34.22 Crores are secured by frst charge on all the Fixed Assets of Intex, Cotspin, Bottom Weight and Ankur divisions of
the Company and second charge on the entire Current Assets both present and future relating these divisions.
iii Loan of ` 1.34 Crores is secured by frst charge on Company’s Immovable Property situated at Ramnagar, Bangalore.
iv Loans of ` 1.05 Crores are secured by hypothecation of related vehicles.
“Textile Plants” means all immovable properties, and all movable properties of the Company, including movable machinery, machinery
spares, tools and accessories, but excluding Investments and excluding current assets charged in favour of the Working Capital Lenders, at
the following textile plants of the Company:
a) Naroda Road, District Ahmedabad
b) Village Santej at Taluka Kalol, District Mehsana
c) Village Khatrej at Taluka Kalol, District Mehsana
d) Asoka Spintex Division at Naroda Road, District Ahmedabad
c Rate of Interest and Terms of Repayment
Particulars ` in Crores Range of Interest (%) Terms of Repayment from Balance sheet date
From Banks
Rupee Loans 856.91 11% to 13% Repayable in quarterly instalments ranging between
8 to 24 with moratorium period in some of the loans
Foreign Currency Loans 58.56 LIBOR+3.40% Repayable in 8 equal half yearly instalments starting
from September 2015
From Financial Institutions and Others
Rupee Loans 157.39 11% to 12.30% Repayable in equal quarterly instalments ranging
between 12 to 24
Rupee Loans 1.34 15.25% Repayable in 25 monthly instalments
Foreign Currency Loans 22.63 LIBOR+ 3.75% Repayable in 14 equal quarterly instalments
Kotak Mahindra Prime Limited - Hire
Purchase Loan
1.05 8% to 10% Monthly payment of Equated Monthly Instalments
beginning from the month subsequent to taking the
loans
Notes to fnancial statements
38
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
6 Deferred Tax
In terms of the provisions of the Accounting Standard – 22 “Accounting for Taxes on Income” notifed by Companies (Accounting Standards) Rules,
2006, there is a net deferred tax asset on account of accumulated business losses and unabsorbed depreciation.
In compliance with provisions of Accounting Standard and based on General Prudence, the Company has not recognised the deferred tax asset
nor written back excess deferred tax liability, while preparing the accounts of the year under review.
` in Crores
Long Term Short Term
7 Provisions As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Provision for Employee Benefts 10.83 8.11 11.32 7.14
Provision for Losses on Derivative 1.15 41.40 17.40 53.23
Contracts
Proposed Dividend - - 42.58 25.80
Dividend Distribution Tax - - 7.24 4.19
Provision for Income Tax - - 7.17 3.18
(Net of Advance Tax of ` 198.88
Crores, Previous Year ` 149.08 Crores)
Provision for Wealth tax - - 1.23 1.03
Provision for Loyalty Program Reward
Points (Note a) - - 0.02 -
Total 11.98 49.51 86.96 94.57
a Provision for Loyalty Program Reward Points
The Company has made provision for customer loyalty program reward points. The movement in provision for those reward points are given
below:
` in Crores
Particulars As at
March 31, 2013
As at
March 31, 2012
Balance as per last fnancial statements - -
Add : Provision made during the year 0.02 -
Balance at the end of the year 0.02 -
8 Short Term Borrowings As at
March 31, 2013
As at
March 31, 2012
Secured:
Working Capital Loans repayable on demand from Banks 963.55 855.96
963.55 855.96
Unsecured:
Under Buyer’s Credit Arrangement 49.87 38.07
Intercorporate Deposits
From Related Parties 0.26 0.42
From Others 1.86 1.50
51.99 39.99
Total 1,015.54 895.95
Notes to fnancial statements
39
a Nature of Security
Cash Credit and Other Facilities from Banks
Secured by frst charge on all the Company’s Current Assets presently relating to the Textile Plants and all the Current Assets acquired by the
Company at any time after the execution of and during the continuance of the Indenture of Mortgage. They are also secured by a second charge over
all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants
and all Immovable Properties, Movable Properties, Intangible Properties and General Assets acquired by the Company at any time after execution
of and during the continuance of the Indenture of Mortgage. Some of the facilities are additionally secured by second charge on movable Plant and
Machinery of the Jeans and Shirts Garment divisions at Bangalore.
“Textile Plants” means all immovable properties, and all movable properties of the Company, including movable machinery, machinery spares, tools
and accessories, but excluding Investments and excluding current assets charged in favour of the Working Capital Lenders, at the following textile
plants of the Company.
a) Naroda Road, District Ahmedabad
b) Village Santej at Taluka Kalol, District Mehsana
c) Village Khatrej at Taluka Kalol, District Mehsana
d) Asoka Spintex Division at Naroda Road, District Ahmedabad
b Rate of Interest
i. Working Capital Loans from banks carry interest rates ranging from 9.70% to 15.25% per annum.
ii. Inter Corporate Deposits carry interest rates 12% and 12.25% per annum.
` in Crores
9 Trade Payables
As at
March 31, 2013
As at
March 31, 2012
Creditors in respect of Goods and Services (Note a) 472.69 503.85
Acceptances 191.79 94.47
Total 664.48 598.32
a The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development
(MSMED) Act, 2006 and hence disclosures as required under Section 22 of The Micro, Small and Medium Enterprise Development (MSMED) Act,
2006 regarding:
(a) Amount due and outstanding to suppliers as at the end of accounting year;
(b) Interest paid during the year;
(c) Interest payable at the end of the accounting year; and
(d) Interest accrued and unpaid at the end of the accounting year have not been given.
The Company is making eforts to get the confrmations from the suppliers as regard to their status under the said Act.
` in Crores
10 Other Current Liabilities
As at
March 31, 2013
As at
March 31, 2012
Current maturities of long-term borrowings (Note 5) 156.48 166.97
Interest accrued but not due on borrowings 4.57 5.33
Income received in advance 1.00 2.38
Advances from Customers 14.48 15.93
Payable to employees 44.59 33.35
Statutory dues including Provident Fund and Tax
deducted at Source 7.23 5.90
Security Deposits 6.85 3.81
Investor Education and Protection Fund shall be credited by the following amount namely :
Unpaid dividend (Note a) 0.49 0.33
Book Overdraft 0.44 1.49
Others 9.20 10.77
Total 245.33 246.26
a There are no amounts due for payment to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end.
Notes to fnancial statements
40
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
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41
Notes to fnancial statements
12 Intangible Assets
` inCrores
Particulars
Gross Block Amortization Net Block
As on
01.04.2012
Acquistion
through
Amalgamation
Additions Disposals Other
Adjustments
As on
31.03.2013
As on
01.04.2012
For the year Deductions As on
31.03.2013
As on
31.03.2013
As on
31.03.2012
Own Assets
Patent and Technical
Knowhow
0.33 - 0.14 - - 0.47 0.20 0.07 - 0.27 0.20 0.13
Computer Software 24.60 - 0.87 - 0.01 25.48 18.28 1.81 - 20.09 5.39 6.32
Total 24.93 - 1.01 - 0.01 25.95 18.48 1.88 - 20.36 5.59 6.45
Previous Year 24.65 0.01 1.23 0.96 - 24.93 17.48 1.92 0.92 18.48 6.45 7.17
a Dtails of Borrowing Cost and Exchange Diferences:
` in Crores
Particulars
Other Adjustements
For the year
2012-2013 2011-2012
Borrowing Cost 0.01 -
Total 0.01 -
13 Non Current Investments ` in Crores
Particulars
Face Value Per
Share (`)
No of Shares As at
March 31, 2013
As at
March 31, 2012
Investment Property (at cost less accumulated depreciation)
Cost of Ofce Building given on Operating Lease 13.70 13.70
Less: Accumulated Depreciation 3.35 3.13
10.35 10.57
Trade Investments (Valued at Cost unless stated otherwise)
Investments in Government Trust Securities
National Saving Certifcates (` 23,000/-) (` 23,000/-)
(Lodged with Sales Tax and Government Authorities)
Investments in Fully Paid Equity Shares
In Subsidiaries
Quoted
Anup Engineering Limited** 100 300,000 3.50 3.50
Unquoted
Arvind Brands and Retail Limited 2 52,000,000 249.10 189.10
(2,000,000 Shares purchased during the year)
Asman Investments Limited 10 65,500 0.07 0.07
(At cost less provision for other than temporary diminution of
` 6.48 Crores, Previous Year ` 6.48 Crores)
Syntel Telecom Limited 10 50,000 0.05 0.05
Arvind Accel Limited 10 50,000 0.05 0.05
Arvind Infrastructure Limited 10 1,050,000 10.05 0.05
(1,000,000 Shares purchased during the year)
Arvind Worldwide Inc., Delaware* (Share without par value) 500 0.07 0.07
Arvind Textile Mills Limited 10 Taka 320,000 1.53 1.53
Arvind Spinning Park Private Limited 10 10,000 0.01 -
(Shares acquired during the year)
42
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
13 Non Current Investments ` in Crores
Particulars
Face Value Per
Share (`)
No of Shares As at
March 31, 2013
As at
March 31, 2012
Arvind Processing Park Private Limited 10 10,000 0.01 -
(Shares acquired during the year)
In Joint ventures (Unquoted)
Arudrama Developments Private Limited 100 50,000 22.00 22.00
Tommy Hilfger Arvind Fashions Private Limited 10 11,461,839 31.55 13.50
(2,482,406 shares purchased during the year)
Arya Omnitalk Wireless Solutions Private Limited 10 1,000,000 1.00 1.00
Arya Omnitalk Radio Trunking Services Private Limited 10 1,005,000 6.01 6.01
In Joint ventures Subsidiaries (Unquoted)
Arvind Goodhill Suit Manufacturing Private Limted 10 10,200 0.01 -
(Shares acquired during the year)
Arvind OG Nonwowen Private Limited 10 10,000 0.01 -
(Shares acquired during the year)
Arvind PD Composites Private Limited 10 58,650 4.85 3.12
(17,340 Shares acquired during the year)
Arvind Niloy Exports Private Limited 100 Taka 28,000 0.19 -
(Shares acquired during the year)
In Limited Liability Partnership (Unquoted)
Arvind and Smart Value Homes LLP 61.95 61.15
Others
Ahmedabad Cotton Merchants’ Co-operative Shops and 10 10 (` 2,500/-) (` 5,000/-)
Warehouses Society Limited
(10 shares sold during the year)
Gujarat Cloth Dealers Co-operative Shops and Warehouses 10 10 (` 1,000/-) (` 1,000/-)
Society Limited
Amazon Textile Private Limited 10 50,000 0.87 1.69
(50,000 shares sold during the year)
Other Investments (Valued at Cost)
In Quoted Equity Shares
Atul Limited 10 773,641 10.41 10.41
Amol Decalite Limited** 10 16,500 0.06 0.06
403.35 313.36
Share Application Money 79.16 13.18
Total 492.86 337.11
* Revalued and adjusted in 2001-2002 as per the scheme of arrangement and the direction of High Court.
a Aggregate amount of quoted investments 13.97 13.97
Market value of quoted investments 26.72 18.37
Aggregate amount of unquoted investments 389.38 299.39
Value of investment property 10.35 10.57
Aggregate provision for diminution in value of investments 6.48 6.48
** Listed but not quoted and book value is taken as market value.
b Disclosure as per AS 13 - Accounting for Investments
Long Term Investments 403.35 313.36
Current Investments - -
Total 403.35 313.36
(Contd.)
43
Notes to fnancial statements
` in Crores
Long Term Short Term
14 Loans and Advances
(Unsecured, Considered good unless otherwise stated)
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Capital Advances 66.31 75.10 - -
Security Deposits 24.07 21.93 3.79 -
Loans:
To Related Parties - - 82.48 39.30
To Employees 4.61 5.16 1.74 1.66
To Others - - 23.00 22.54
MAT Credit Entitlement 140.71 86.92 - -
Advances recoverable in cash or in kind or for value to be received - - 111.48 129.60
Prepaid Expenses 0.23 0.10 8.80 4.01
Balances with Government Authorities - - 0.10 0.13
CENVAT/Custom Duty Receivable - - 18.85 17.51
Total 235.93 189.21 250.24 214.75
` in Crores
Non Current Current
15 Other Assets
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Non Current Bank Balances (Note 18) 0.54 2.04 - -
Land held for Sale - - 99.43 102.21
Interest Accrued - - 0.68 0.83
Unbilled Revenue - - - 4.37
Income Receivable - - 11.54 15.65
Receivable other than trade - - 122.05 80.00
Export Incentive Receivable - - 59.49 53.11
Total 0.54 2.04 293.19 256.17
` in Crores
16 Inventories
As at
March 31,
2013
As at
March 31,
2012
Raw Materials and Accessories 219.70 246.68
In Transit - 0.01
Fuel 2.63 2.56
Stores and Spares 49.86 40.20
Work-in-Progress 347.00 322.43
Finished Goods 225.05 101.09
Finished Goods in Transit 0.62 0.31
By Product 0.50 -
Stock in Trade 25.83 9.73
Project Work in Progress 5.21 3.45
Waste 1.56 1.96
Total 877.96 728.42
` in Crores
16
a
Inventories (Contd.)
Details of Inventory
As at
March 31,
2013
As at
March 31,
2012
Raw Material and Accesories
Cotton 150.86 198.52
Yarn 48.38 32.96
Fibre 7.03 2.58
Fabric 6.49 6.63
Accessories 5.98 5.21
Electronics 0.96 0.78
Total 219.70 246.68
Work-in-Progress
Fabric including Grey 197.32 180.87
Sizing/Yarn/Fibre 115.87 108.65
Electronics 1.00 0.54
Garments 32.81 32.37
Total 347.00 322.43
44
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
` in Crores
16 Inventories (Contd.)
As at
March 31,
2013
As at
March 31,
2012
Finished Goods
Fabric 205.30 80.00
Garments 14.51 17.86
Yarn/Fibre 5.16 3.07
Electronics 0.08 0.16
Total 225.05 101.09
Stock in Trade
Fabric 14.99 3.45
Garments 5.71 1.63
Accessories - 0.08
Electronics 4.08 4.23
Agri Products 1.05 0.34
Total 25.83 9.73
` in Crores
As at
March 31,
2013
As at
March 31,
2012
17 Trade Receivables
(Unsecured, considered good unless
otherwise stated)
Outstanding for a period exceeding six
months from the date they are due for
payment
Considered Good 58.50 28.32
Considered doubtful 0.27 0.04
Less: Provision for Doubtful Debts (0.27) (0.04)
58.50 28.32
Others 383.92 377.23
Total 442.42 405.55
` in Crores
Non Current Current
18 Cash and Bank Balances
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Cash and Cash Equivalents:
Cash on Hand - - 0.77 1.02
Cheques on Hand - - (` 10,000/-) (` 15,000/-)
Balances with Banks
In Current Accounts - - 11.65 16.70
In Unpaid Dividend Accounts - - 0.49 0.33
In Exchange Earners Foreign Currency Account - - - 0.19
In Cash Credit Account - - 123.00 8.56
In Saving Accounts - - (` 45,808/-) (` 45,808/-)
In Deposit Account with original maturity upto 3 months - - 4.90 -
- - 140.81 26.80
Other Bank Balances:
In Deposits Accounts
With original maturity more than 3 months but less than
12 months - - 4.74 4.23
With original maturity more than 12 months 0.43 1.65 - 4.72
Held as Margin Money
(Under lien with bank as Security for Guarantee Facility) 0.11 0.39 5.05 3.62
Lodged with Sales Tax Department - (` 20,000/-) (` 20,000/-)
0.54 2.04 9.79 12.57
Amount disclosed under the head “Other Non Current
Assets” (Note 15)
0.54 2.04 - -
Total - - 150.60 39.37
45
Notes to fnancial statements
` in Crores
19 Contingent Liabilities
As at
March 31,
2013
As at
March 31,
2012
(to the extent not provided for)
Bills Discounted 117.59 111.40
Claims against the Company not
acknowledged as debts
7.82 8.55
Guarantees given by the Banks on
behalf of the Company
69.48 59.00
Guarantees given by the Company to
Banks on behalf of Subsidiaries/Joint
Ventures
398.99 355.83
Disputed Demands in respect of
Excise/Custom Duty 28.85 30.83
Sales Tax 20.37 20.37
Income Tax 19.04 18.11
Service Tax 0.84 1.19
a It is not practicable for the Company to estimate the timings of cash
outfows, if any, in respect of the above pending resolution of the
respective proceedings.
20 Capital and Other Commitments
Capital Commitments
Estimated amount of contracts
remaining to be executed on capital
account and not provided for
80.77 52.39
Other Commitments - -
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
21 Revenue from Operations
Sale of Products
Finished Goods and Stock-in-Trade 3,690.09 3,315.89
Less : Excise Duty 14.85 17.75
3,675.24 3,298.14
Sale of Services 4.04 8.90
Other Operating Revenues
Gain/(Loss) on Forward Contracts (95.47) (1.26)
Export Incentives 102.58 109.78
Waste Sale 69.07 55.68
Others 24.83 22.88
Total 3,780.29 3,494.12
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
a Details of Sales and Services
Sale of Products (Net of Excise Duty)
Fabric 3,084.32 2,803.21
Garments 489.08 438.35
Grey Fabric 7.46 4.83
Yarn 42.78 14.21
Glass Fabric 0.82 -
Electronics Items 38.57 36.86
Agri Products 12.03 0.62
Accessories 0.18 0.06
3,675.24 3,298.14
Sale of Services
Processing Income 4.04 8.90
4.04 8.90
Total 3,679.28 3,307.04
22 Other Income
Interest Income 24.26 15.56
Dividend Income on:
Investments in Subsidiaries - 0.30
Long Term Investments 0.35 0.26
Share of Proft from Arvind and Smart
Value Homes LLP
0.58 1.45
Rent 1.42 0.61
Sundry Credit Balances Appropriated 1.20 2.83
Proft on Sale of Fixed Assets (Net) 26.13 24.53
Proft on Sale of Land held for Sale 16.12 67.40
Provision no longer required - 3.14
Scrap Income 12.02 10.46
Miscellaneous Income 11.38 7.45
Prior Period Item - 1.82
Total 93.46 135.81
23 Cost of Materials and Accessories
Consumed
Stock at the beginning of the year 246.68 294.28
Purchases 1,614.24 1,521.16
1,860.92 1,815.44
Less: Stock at the end of the year 219.70 246.68
Total 1,641.22 1,568.76
46
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
a Materials and Accessories
Consumed
Cotton 666.77 760.17
Yarn 660.55 555.59
Fibre 24.19 22.35
Grey Cloth/Fabric 224.92 160.04
EPABX 11.04 8.97
Accessories 53.75 61.64
Total 1,641.22 1,568.76
b Value of imported and indigenous
materials consumed
Raw Materials and Accessories
Imported 280.01 133.86
17.06% 8.53%
Indigenous 1,361.21 1,434.90
82.94% 91.47%
Total 1,641.22 1,568.76
24 Purchase of Stock In Trade
Cloth 47.13 18.26
Garments 15.00 6.10
Electronic Items 12.23 12.21
Accessories 0.19 0.17
Agri Products 9.89 0.66
Total 84.44 37.40
25 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade
(Increase)/Decrease in stocks
Stock at the end of the year
Finished Goods 225.05 101.09
Stock-in-trade 25.83 9.73
Work-in-Progress 347.00 322.43
Project Work-in-Progress 5.21 3.45
Waste 1.56 1.96
604.65 438.66
Stock at the beginning of the year
Finished Goods 101.09 112.24
Stock-in-trade 9.73 8.09
Work-in-Progress 322.43 245.98
Project Work-in-Progress 3.45 2.74
Waste 1.96 1.30
438.66 370.35
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
25 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade (Contd.)
Add : Adjusted on account of
Amalgamation
Finished Goods - 22.21
Work-in-Progress - 48.38
Waste - 1.15
438.66 442.09
Excise Duty in Value of Stock -
Increase / (Decrease)
(0.02) 0.14
(Increase)/Decrease in stocks (166.01) 3.57
26 Employee Benefts Expense
Salaries and Wages 387.67 318.69
Contribution to Provident Fund and
Other Funds
46.84 34.68
Staf Welfare Expenses 7.71 7.14
Total 442.22 360.51
27 Finance Costs
Interest
On Term Loans 87.27 92.67
On working capital loans 82.22 81.62
Others 49.86 37.12
Interest on shortfall of advance tax - 0.44
Exchange Diference to the extent
considered as an adjustment to
Borrowing Costs
25.04 33.92
Other Borrowing Costs 0.10 1.91
Bank Charges 23.95 22.57
Total 268.44 270.25
28 Depreciation / Amortization
Expense
Depreciation of Tangible Assets 148.39 128.24
Amortization of Intangible Assets 1.88 1.92
Depreciation of Investment Property 0.22 0.35
Total 150.49 130.51
29 Other Expenses
Power and fuel 406.13 349.24
Stores Consumed 307.32 251.01
Insurance 2.91 3.12
Processing Charges 73.75 51.65
Printing, Stationery & Communication 7.47 7.45
Rent 56.70 51.78
47
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
29 Other Expenses (Contd.)
Commission, Brokerage and Discounts 35.91 32.08
Rates and taxes 11.18 5.15
Repairs:
To Buildings 1.40 0.97
To Machineries 89.04 91.47
To others 4.29 4.68
Freight, Insurance and Clearing
Charges
30.26 23.24
Excise Duty borne by Company 0.21 0.39
Legal and Professional Fees 17.62 14.02
Conveyance and Travelling Expenses 15.48 12.22
Advertisement and Publicity 12.99 12.48
Directors’ sitting fees 0.02 0.05
Miscellaneous Labour Charges 21.83 25.30
Provision for Doubtful Debts 0.23 -
Bad Debts written of 0.03 0.32
Sundry Debits written of 0.49 1.19
Fixed Assets Written of 0.51 2.01
Provision for Diminution in Value of
Investment in Subsidiary
- 6.48
Payments to the auditor as
(a) Auditor 0.63 0.63
(b) For tax audit matters 0.14 0.14
(c) For taxation matters 0.04 0.04
(d) For Company law matters 0.24 0.24
(e) For Other Certifcation work 0.46 0.41
(f) For reimbursement of expenses 0.05 0.04
Exchange Diference (Net) 14.52 18.17
Loans to Subsidiaries Written Of - 7.91
Less : Adjusted against Provision for
doubtful Loans - (7.91)
- -
Loss on Sale of Investments 0.02 34.96
Less : Adjusted against Provision for
diminution in value of Investments - (33.39)
0.02 1.57
Goodwill on Amalgamation Written Of - 45.49
Charge on account of alignment of
accounting policies of Amalgamated
Company with the Company - 10.82
- 56.31
Less : Amount Transferred from
Opening balance of Surplus in
Statement of Proft and Loss - (56.31)
- -
Miscellaneous Expenses 51.79 41.50
Total 1,163.66 1,009.04
Notes to fnancial statements
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
a Value of imported and indigenous
Spare Parts consumed
Imported 21.31 17.10
23.93% 18.69%
Indigenous 67.73 74.37
76.07% 81.31%
Total 89.04 91.47
30 Extraordinary Item
Proft on Sale of Investment in Joint
Venture
- 251.80
Total - 251.80
31 CIF Value of Imports
Capital Goods 92.91 157.72
Raw Materials & Accessories 287.05 123.37
Dyes & Chemicals, Stores and Spares
Parts
73.87 61.27
32 Expenditure in Foreign Currency
Interest 17.59 14.64
Commission 5.70 7.11
Professional and Consultation Fees 4.11 3.07
Other Matters 25.58 28.59
Total 52.98 53.41
33 Earning in Foreign Currency
Export of goods calculated on F.O.B.
basis
1,444.94 1,487.10
Better Cotton Grant 2.52 2.45
34 Amount remitted during the year
in foreign currency on account of
dividend :
i) Amount remitted (` 2,350/-) -
ii) Number of shares held of ` 10
each
2350 -
iii) Number of Non-resident
Shareholders
7 -
iv) Year to which dividend relates 2011-2012 -
48
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
35 Earning Per Share (EPS) :
` in Crores, unless otherwise stated
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Proft after Tax before Extra
Ordinary Item
261.22 236.29
Add : Extra Ordinary Item (Net of Tax
of ` 53.86 Crores)
- 197.94
Proft after Extra Ordinary Item
available to equity shareholders
261.22 434.23
Weighted average no. of Equity Shares
For Basic EPS Nos. 258,043,069 257,983,329
For Diluted EPS Nos. 258,048,828 257,983,329
Nominal value of Equity Shares ` 10.00 10.00
Basic Earning Per Share
Before Extra Ordinary Item ` 10.12 9.16
After Extra Ordinary Item ` 10.12 16.83
Diluted Earning Per Share
Before Extra Ordinary Item ` 10.12 9.16
After Extra Ordinary Item ` 10.12 16.83
Weighted average number of Equity Shares
No. of Shares for Basic EPS 258,043,069 257,983,329
Dilutive Efect of ESOS 5,759 -
Weighted average number of shares
considered for calculating Diluted
EPS
258,048,828 257,983,329
36 Employee Share Based Payment:
i The Company has formulated Employee Stock Option Scheme (ESOS
2008), the features of which are as follows :
Scheme ESOS 2008 Tranche - II
Date of Grant April 21, 2011
Number of options granted 200,000
Exercise Price per option ` 73.70
Date of vesting The vesting will be as under :
33.33% on April 30, 2012
33.33% on April 30, 2013
33.33% on April 30, 2014
Exercise Period Within 3 years from the date of
respective vesting.
Method of settlement Through allotment of one Equity
Share for each option granted.
ii Intrinsic Value Method has been used to account for the employee share
based payment plans. The intrinsic value of each stock option granted
under the ESOS 2008 plan is ` Nil since the market price of the underlying
share at the grant date was same as the exercise price and consequently
the accounting value of the option (compensation cost) is ` Nil.
iii Further details of the stock option plans ESOS 2008 is as follows :
Particulars
ESOS 2008
Tranche-II
2012-2013 2011-2012
Options
Outstanding at the beginning of year 200,000 -
Granted During the year - 200,000
Lapsed during the year - -
Exercised during the year - -
Vested but not exercised at the end of year 66,660 -
Not vested at the end of year 133,340 200,000
Weighted Average Exercise Price per
Option
` 73.70 ` 73.70
iv The Black-Scholes-Mertons Option Pricing Model have been used
to derive the estimated value of stock option granted if the fair value
method to account for the employee share based payment plans
were to be used. The estimated value of each stock options and the
parameters used for deriving the estimated value of Stock Option
granted under Black-Scholes-Mertons Option Pricing Model is as
follows:
Particulars
ESOS 2008
Tranche-II
Vesting on April 30,
2012 2013 2014
Estimated Value of Stock
Options (`)
32.45 39.47 42.63
Share Price at Grant Date (`) 73.70 73.70 73.70
Exercise Price (`) 73.70 73.70 73.70
Expected Volatility (%) 62.46% 65.93% 62.19%
Dividend Yield Rate (%) 0.00% 0.00% 0.00%
Expected Life of Options
(in years)
2.53 3.53 4.53
Risk Free Rate of Interest (%) 7.57% 7.61% 7.65%
v Had the compensation cost for the stock options granted under
ESOS 2008 been determined on fair value approach, the Company’s
net proft and earning per share would have been as per pro forma
amounts indicated below:
Particulars
Year
ended
March 31,
2013
Year
ended
March 31,
2012
Proft before Extra Ordinary Item available
to equity shareholders
261.22 236.29
Less : Amortization of Compensation Cost
(pro forma)
0.23 0.43
Proft before Extra Ordinary Item available
to equity shareholders
260.99 235.86
Add : Extra Ordinary Item - 197.94
49
Notes to fnancial statements
Contd.
Particulars
Year
ended
March 31,
2013
Year
ended
March 31,
2012
Proft after Extra Ordinary Item and
amortization of Compensation
Cost (pro forma)
260.99 433.80
Earning Per Share - (Basic)
Proft before Extra Ordinary Item
- as reported 10.12 9.16
- pro forma 10.11 9.14
Proft after Extra Ordinary Item
- as reported 10.12 16.83
- pro forma 10.11 16.82
Earning Per Share - (Diluted)
Proft before Extra Ordinary Item
- as reported 10.12 9.16
- pro forma 10.11 9.14
Proft after Extra Ordinary Item
- as reported 10.12 16.83
- pro forma 10.11 16.82
37 Employee Benefts
Consequent to the adoption of Accounting Standard on Employee
Benefts (AS 15 Revised 2005) notifed by Companies (Accounting
Standards) Rules, 2006, the following disclosures have been made as
required by the Standard:
(i) Defned Contribution Plans
The Company has recognised the following amounts in the Statement
of Proft and Loss for Defned Contribution Plans:
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Provident Fund 16.68 14.35
Contributory Pension Scheme 0.35 -
Superannuation Fund 2.21 2.56
The Company’s Provident Fund is administered by the Trust. The Rules
of the Company’s Provident Fund administered by a Trust require
that if the Board of the Trustees are unable to pay interest at the rate
declared for Employees’ Provident Fund by the Government under
Para 60 of the Employees’ Provident Fund Scheme, 1952 for the reason
that the return on investment is less or for any other reason, then the
defciency shall be made good by the Company. Having regard to the
assets of the fund and the return on the investments, the Company
does not expect any defciency in the foreseeable future.
(ii) State Plans
The Company has recognised the following amounts in the Statement
of Proft and Loss for Contribution to State Plans:
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Employee’s State Insurance 7.22 6.35
Employee’s Pension Scheme 9.97 8.63
(iii) Defned Beneft Plans
(a) Leave Encashment/Compensated Absences
Salaries, Wages and Bonus include ` 5.36 Crores (` 4.24 Crores)
towards provision made as per actuarial valuation in respect of
accumulated leave encashment/compensated absences.
(b) Contribution to Gratuity Funds
The details of the Company’s Gratuity Fund for its employees including
Managing Director are given below which is certifed by the actuary
and relied upon by the auditors:
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Change in the Beneft Obligations :
Liability at the beginning of the year 64.51 43.31
Add : Adjustment on amalgamation - 14.16
Liability at the beginning of the year
after amalgamation
64.51 57.47
Interest Cost 4.05 4.95
Current Service Cost 4.73 4.80
Benefts Paid (5.64) (4.16)
Actuarial Loss/(Gain) 10.21 1.67
Other Adjustment - (0.22)
Liability at the end of the year 77.86 64.51
Fair Value of Plan Assets :
Fair Value of Plan Assets at the
beginning of the year
61.24 41.47
Add : Adjustment on amalgamation - 13.62
Fair Value of Plan Assets at the
beginning of the year after
amalgamation
61.24 55.09
Expected Return on Plan Assets 3.69 4.70
Contributions 8.91 6.08
Benefts Paid (5.64) (4.16)
Actuarial gain/(loss) on Plan Assets 2.31 (0.14)
Other Adjustment - (0.33)
Fair Value on Plan Assets at the end of
the year
70.51 61.24
Total Actuarial(Loss) /Gain to be
recognized
(7.90) (1.81)
Actual Return on Plan Assets :
Expected Return on Plan Assets 3.69 4.70
Actuarial gain/(loss) on Plan Assets 2.31 (0.14)
Actual Return on Plan Assets 6.00 4.56
Amount Recognized in the Balance Sheet :
Liability at the end of the year 77.86 64.51
Fair Value of Plan Assets at the end of
the year
70.51 61.24
Amount recognized in the Balance
Sheet under “ Provision for Employee
Benefts ”
7.35 3.27
50
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
(b) Contribution to Gratuity Funds (Contd.) ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Expense Recognized in the Statement of Proft and Loss:
Interest Cost 4.05 4.95
Current Service Cost 4.73 4.80
Expected Return on Plan Assets (3.69) (4.70)
Net Actuarial loss/(gain) to be
recognized
7.90 1.81
Expense recognized in the Statement
of Proft and Loss under “Employee
Benefts Expense”
12.99 6.86
Reconciliation of the Liability Recognized in the Balance
Sheet :
Opening Net Liability 3.27 2.38
Expense Recognized 12.99 6.86
Contribution by the Company (8.91) (6.08)
Other Adjustment - 0.11
Amount recognized in the Balance
Sheet under “ Provision for Employee
Benefts ”
7.35 3.27
Based on the above allocation and the prevailing yields on these assets,
the long-term estimate of the expected rate of return on fund assets
has been arrived at.
Principal Assumptions:
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Discount Rate (%) 8.25 8.50
Return on Plan Assets (%) 8.00 8.00
Investment Pattern:
Particulars
% Invested
in Current
Year
% Invested
in Previous
Year
Central Government Securities 0.36 0.67
State Government Securities/
Securities guaranteed by
State/Central Government
0.43 0.47
Public Sector/Financial Institutional
Bonds
8.01 9.55
Portfolio with Mutual Fund 90.53 88.64
Others (including bank balances) 0.67 0.67
Total 100.00 100.00
38 SEGMENT REPORTING
(A) Primary Segment (Business Segment)
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Segment Revenue
a) Textiles 3713.35 3426.59
b) Brands and Retail 25.19 19.91
c) Others 63.17 52.88
d) Unallocable - -
Total Sales 3801.71 3499.38
Less :Inter Segment Revenue 21.42 5.26
Net Sales 3780.29 3494.12
Segment Results
Segment Results before Interest & Finance Cost
a) Textiles 529.56 532.30
b) Brands and Retail (10.52) (7.44)
c) Others (3.26) 0.06
d) Unallocable 13.88 (18.38)
Total Segment Results 529.66 506.54
Less : Interest & Finance Cost 268.44 270.25
Proft from Ordinary Activities 261.22 236.29
Extra Ordinary Items (Net) - 251.80
Proft before Tax 261.22 488.09
Other Information
Segment Assets
a) Textiles 3660.27 3312.45
b) Brands and Retail 47.75 21.15
c) Others 64.27 60.17
d) Unallocable 1511.43 1227.01
Total Assets 5283.72 4620.78
Segment Liabilities
a) Textiles 660.24 695.25
b) Brands and Retail 13.06 4.17
c) Others 22.68 17.96
d) Unallocable 169.11 117.13
Total Liabilities 865.09 834.51
Segment Depreciation/Impairment
a) Textiles 142.82 123.52
b) Brands and Retail 0.77 0.40
c) Others 0.67 0.45
d) Unallocable 6.23 6.14
Total Depreciation/Impairment 150.49 130.51
51
Notes to fnancial statements
(A) Primary Segment (Business Segment) (Contd.) ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Capital Expenditure
a) Textiles 280.98 338.37
b) Brands and Retail 5.37 9.21
c) Others - 1.92
d) Unallocable 0.61 13.40
Total Capital Expenditure 286.96 362.90
Non cash expenses other than Depreciation
a) Textiles 1.04 3.38
b) Brands and Retail 0.10 0.00
c) Others - 0.00
d) Unallocable 0.12 14.53
Total Non cash expenses
other than Depreciation
1.26 17.91
(B) Secondary Segment (Geographical by Customers)
Segment Revenue
a) In India 2335.35 2007.02
b) Outside India 1444.94 1487.10
Total Sales 3780.29 3494.12
Carrying Cost of Assets by location of Assets
a) In India 5166.37 4474.91
b) Outside India 117.35 145.87
Total 5283.72 4620.78
Addition to Assets
a) In India 286.96 362.90
b) Outside India - -
Total 286.96 362.90
Notes:
1. The Company has considered business segment as the primary
reporting segment. Segments have been identifed taking into
account the nature of the products and services, diferential risks and
returns, the Organizational structure and internal reporting system.
Consequently, the geographical segment has been considered as a
secondary segment.
2. The business segment comprise of the following:
Textiles : Fabric, Yarn and Garments
Brands and Retail : Branded Garments and Apparels
Others : EPABX Systems (Electronics), Construction and Project
Activity
3. Geographical segment is considered based on sales within India and
outside India.
4. Intersegment Revenues are recognised at sales price.
39 Related Party Disclosures :
As per the Accounting Standard on “Related Party Disclosures” (AS
18) notifed by Companies (Accounting Standards) Rules, 2006, the
related parties of the Company are as follows :
a Name of Related Parties and Nature of Relationship :
Asman Investment Limited Subsidiary Company
The Anup Engineering Limited Subsidiary Company
Arvind Lifestyle Brands Limited Subsidiary Company
Arvind Accel Limited Subsidiary Company
Syntel Telecom Limited Subsidiary Company
Arvind Infrastructure Limited Subsidiary Company
Arvind Brands and Retail Limited Subsidiary Company
Arvind Envisol Private Limited Subsidiary Company
Arvind Worldwide Inc., USA Subsidiary Company
Arvind Worldwide (M) Inc., Mauritius Subsidiary Company
Arvind Overseas (M) Limited,
Mauritius
Subsidiary Company
Arvind Spinning Limited, Mauritius Subsidiary Company
Arvind Textile Mills Limited,
Bangladesh
Subsidiary Company
Arvind Spinning Park Private Limited Subsidiary Company
Arvind Processing Park Private
Limited
Subsidiary Company
Arvind Hebbal Homes Private Limited Subsidiary Company
Arya Omnitalk Wireless Solutions
Private Limited
Joint Venture
Tommy Hilfger Arvind Fashions
Private Limited
Joint Venture
Arya Omnitalk Radio Trunking
Services Private Limited
Joint Venture
Arudrama Developers Private Limited Joint Venture
Arvind PD Composites Private
Limited
Joint Venture Subsidiary
Company
Arvind Goodhill Suit Manufacturing
Private Limited
Joint Venture Subsidiary
Company
Arvind Niloy Exports Private Limited,
Bangladesh
Joint Venture Subsidiary
Company
Arvind OG Nonwovens Private
Limited
Joint Venture Subsidiary
Company
Arvind Bsafal Homes LLP Limited Liability Partnership
Ahmedabad East Infrastructure LLP Limited Liability Partnership
Arvind & Smart Value Homes LLP Limited Liability Partnership
Aura Securities Private Limited Company under the control
of Key Managerial Personnel
Amplus Capital Advisors Private
Limited
Company under the control
of Key Managerial Personnel
Shri Sanjay S. Lalbhai, Chairman and
Managing Director
Key Management Personnel
Shri Jayesh K. Shah, Director & Chief
Financial Ofcer
Key Management Personnel
Shri Punit S. Lalbhai Key Management Personnel
Shri Kulin S. Lalbhai Key Management Personnel
Shri Darshil J. Shah, Son of Director &
Chief Financial Ofcer
Relative of Key Management
Personnel
Note: Related party relationship is as identifed by the Company and
relied upon by the Auditors.
52
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
b Transactions and Balances : ` in Crores
Particulars
Subsidiary
Companies
Key Management
Personnel and
relatives
Joint Venture/
Limited Liability
Partnership
Company under the
control of Key
Managerial Personnel
Year ended Year ended Year ended Year ended
March
31, 2013
March
31, 2012
March
31, 2013
March
31, 2012
March
31, 2013
March
31, 2012
March
31, 2013
March
31, 2012
Transactions
Purchase of Goods and Materials 8.50 4.93
Purchase of Fixed Assets 11.80 4.07
Sales of Goods and Materials 30.33 122.86 11.88 7.10
Sale of Fixed Assets 7.39 - - 41.24
Rendering of Services 0.32 0.21 3.24 1.96
Remuneration 8.98 5.40
Receiving of Services 8.91 7.78
Interest Expense 0.45 0.63
Other Expenses 1.10 0.60 0.04 0.20
Debit Balance Written of - 0.02
Loan Written of - 7.91
Interest Income 19.92 10.14 0.42 0.44
Other Income 0.63 - - 0.01 0.02 -
Loan Given/(Repaid) (Net) 40.33 (6.53) (0.16) (0.06)
Adjustment due to Scheme of Arrangement - (132.10) - 22.00
Share Application Money Given 44.05 5.18 - 8.00
Diminuation in value of Shares - 6.48 - -
Investments (Net) 71.97 (34.81) 18.85 61.90
Balances as at year end
Trade and Other Receivable 92.64 83.54 4.95 3.45 (` 22,795) -
Receivable/(Payable) in respect of Loans 82.48 39.30 (0.26) 0.42
Trade and Other Payable 15.43 9.47 0.54 -
c Disclosure in respect of Related Party Transactions :
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Purchase of Goods and Materials
Arvind Lifestyle Brands Limited 8.34 4.34
Asman Investment Limited 0.02 -
Arvind Accel Limited 0.14 0.59
Purchase of Fixed Assets
The Anup Engineering Limited 0.16 0.05
Arvind Accel Limited 1.26 4.02
Arvind Envisol Private Limited 10.38 -
Sales of Goods and Materials
Asman Investment Limited 0.52 88.10
Arvind Lifestyle Brands Limited 29.65 34.70
Arvind PD Composites Private Limited 0.12 -
The Anup Engineering Limited 0.04 0.06
Arya Omnitalk Wireless Solutions
Private Limited
8.24 5.94
Tommy Hilfger Arvind Fashions Private
Limited
3.64 1.16
Sale of Fixed Assets
Arvind Infrastructure Limited 6.04 -
Arvind PD Composites Private Limited 1.35 -
Arvind & Smart Value Homes LLP - 41.24
c Disclosure in respect of Related Party Transactions : (Contd.)
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Rendering of Services
Arya Omnitalk Wireless Solutions
Private Limited
1.26 1.68
Arya Omnitalk Radio Trunking Services
Private Limited
1.98 -
Arvind Bsafal Homes LLP - 0.20
VF Arvind Brands Private Limited 0.00 0.10
Arvind Lifestyle Brands Limited 0.32 0.21
Remuneration
Shri Sanjay S. Lalbhai, Chairman and
Managing Director
4.70 2.90
Shri Jayesh K. Shah, Director & Chief
Financial Ofcer
3.03 2.24
Shri Punit S. Lalbhai 0.57 0.24
Shri Kulin S. Lalbhai 0.58 -
Shri Darshil J. Shah, Son of Director &
Chief Financial Ofcer
0.10 0.02
Receiving of Services
Arvind Worldwide Inc., USA 8.91 7.78
53
d Disclosures pursuant to the clause 32 of the Equity Listing Agreement
Loans and Advances in the nature of loans to subsidiaries ` in Crores
Name of Subsidiary
Closing Balance Maximum Outstanding
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Asman Investments Limited 2.14 2.14 2.14 158.33
Arvind Worldwide (M) Inc. 5.25 4.93 5.42 5.14
Arvind Worldwide Inc. USA 2.44 2.29 2.52 2.39
Arvind Accel Limited 4.53 2.50 22.98 19.74
Arvind Infrastructure Limited 0.45 - 106.67 -
The Anup Engineering Limited 0.10 0.10 10.10 0.10
Arvind Lifestyle Brands Limited 68.34 19.50 134.50 119.70
Arvind Envisol Private Limited 0.41 - 0.41 -
Arvind Retail Limited - 7.89 - 13.30
Syntel Telecom Limited 0.12 0.12 0.12 0.12
Arvind Textile Mills Limited, Bangladesh - 0.01 0.01 0.01
Arvind Brands and Retail Limited - 1.11 1.25 1.25
Arvind PD Composite Private Limited - 0.03 0.03 0.03
Total 83.78 40.62 286.15 320.11
Note : No repayment schedule has been fxed in case of above mentioned Loans & Advances in the nature of loans given to Subsidiary Companies and
some of them are interest free and repayable on demand.
Notes to fnancial statements
c Disclosure in respect of Related Party Transactions : (Contd.)
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Interest Expense
Aura Securities Private Limited 0.45 0.63
Other Expenses
Asman Investment Limited 0.80 0.60
Arvind Lifestyle Brands Limited 0.30 -
Arya Omnitalk Wireless Solutions
Private Limited
0.04 0.19
Syntel Telecom Limited - 0.01
Debit Balance Written of
Asman Investment Limited - 0.02
Loan Written of
Arvind Overseas (M) Limited, Mauritius - 7.91
Interest Income
The Anup Engineering Limited 0.20 0.54
Arvind Lifestyle Brands Limited 11.17 8.32
Arvind Accel Limited 2.40 1.09
Arvind Envisol Private Limited 0.01 -
Arvind Infrastructure Limited 6.14 0.19
Tommy Hilfger Arvind Fashions Private
Limited
- 0.24
Arvind & Smart Value Homes LLP 0.42 0.20
Other Income
Arvind Lifestyle Brands Limited 0.10 -
Arvind PD Composites Private Limited 0.53 -
Amplus Capital Advisors Private Limited 0.02 -
Arvind & Smart Value Homes LLP 0.00 0.01
Loan Given/(Repaid) (Net)
Asman Investment Limited - (24.09)
Arvind Lifestyle Brands Limited 40.95 15.54
Arvind Accel Limited 2.03 0.88
Arvind Envisol Private Limited 0.41 -
Arvind Infrastructure Limited (1.92) -
Arvind PD Composites Private Limited (0.03) 0.03
c Disclosure in respect of Related Party Transactions : (Contd.)
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Arvind Brands and Retail Limited (1.11) 1.11
Aura Securities Private Limited (0.16) (0.06)
Adjustment due to Scheme of Arrangement
Asman Investment Limited - (132.10)
Arudrama Developers Private Limited - 22.00
Share Application Money
Arvind Textile Mills Limited, Bangladesh 7.45 5.18
Arvind PD Composites Private Limited 1.40 -
Arvind Brands and Retail Limited 35.00 -
Arvind OG Nonwovens Private Limited 0.20 -
Tommy Hilfger Arvind Fashions Private
Limited
- 8.00
Diminuation in value of Shares
Asman Investment Limited - 6.48
Investments (Net)
Arvind Infrastructure Limited 10.00 -
Arvind PD Composites Private Limited 1.73 -
Arvind Brands and Retail Limited 60.00 -
Arvind Goodhill Suit Manufacturing
Private Limited
0.01 -
Arvind Spinning Park Private Limited 0.01 -
Arvind Processing Park Private Limited 0.01 -
Arvind OG Nonwovens Private Limited 0.01 -
Arvind Niloy Exports Private Limited,
Bangladesh
0.20 -
Tommy Hilfger Arvind Fashions Private
Limited
18.05 0.75
Arvind & Smart Value Homes LLP 0.80 61.15
Asman Investment Limited - (1.10)
Arvind Overseas (M) Limited, Mauritius - (28.32)
Arvind Spinning Limited, Mauritius - (5.39)
54
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
40 Lease Rent
Operating Lease
(A) Land is taken on lease period of 30 years with no option of renewal, no
sub lease of the land and having an escalation clause for increase in
lease rental by 5% after block of every 2 years.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
4.12 4.22
Not later than one year 0.11 0.10
Later than one year and not later than fve years 0.44 0.43
Later than fve years 3.57 3.69
Lease Payment recognised in Statement of
Proft and Loss
0.11 0.11
(B) Factory Building is taken on lease period of 18 to 20 years with no
option of renewal, no sub lease of the building and having an escalation
clause for increase in lease rental by 15% after every 3 years
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
79.59 72.51
Not later than one year 7.43 7.18
Later than one year and not later than fve years 31.50 23.54
Later than fve years 40.66 41.79
Lease Payment recognised in Statement of
Proft and Loss
7.24 7.09
(C) Plant & Machineries are taken on operating lease for a period of 5 to 8
years with the option of renewal
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
135.68 183.90
Not later than one year 30.53 35.40
Later than one year and not later than fve years 93.64 111.39
Later than fve years 11.51 37.12
Lease Payment recognised in Statement of
Proft and Loss
37.00 37.55
(D) Rent expense includes lease rental payments towards ofce premises,
showrooms and other facilities. Such leases are generally for a period
of 11 to 108 months with the option of renewal against increased rent.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
71.08 18.09
Not later than one year 9.27 2.56
Later than one year and not later than fve years 36.24 9.93
Later than fve years 25.57 5.61
Lease Payment recognised in Statement of
Proft and Loss
6.48 1.68
(E) Rent Income includes Lease Rental received towards Plant &
Machineries. Such operating lease is generally for a period of 5 years
with the option of renewal on mutual consent and premature
termination of agreement through agreed notice period.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments under
non-cancellable operating leases:
15.71 -
Not later than one year 1.36 -
Later than one year and not later than fve years 5.42 -
Later than fve years 8.93 -
Lease income recognised in Statement of Proft
and Loss
0.57 0.11
(F) Rent Income also includes Lease Rental received towards Building.
Such operating lease is generally for a period upto 36 months.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments under
non-cancellable operating leases:
0.81 0.29
Not later than one year 0.51 0.12
Later than one year and not later than fve years 0.30 0.18
Later than fve years - -
Lease income recognised in Statement of Proft
and Loss
0.71 0.43
41 Disclosures in respect of Joint Venture
(a) List of Joint Ventures:
Sr.
No
Name of Joint Venture Description of Interest
Proportion of
ownership interest
Country of
Incorporation Residence
1 Arya Omnitalk Wireless Solutions Pvt. Limited Jointly Controlled Entity 50% India India
2 Tommy Hilfger Arvind Fashions Private Limited Jointly Controlled Entity 50% India India
3 Arya Omnitalk Radio Turnking Services Private Limited Jointly Controlled Entity 50% India India
4 Arudrama Developers Private Limited Jointly Controlled Entity 50% India India
5 Arvind BSAFAL Homes LLP Limited Liability Partnership 50% India India
6 Arvind and Smart Value Homes LLP Limited Liability Partnership 50% India India
7 Ahmedabad East Infrastructure LLP Limited Liability Partnership 50% India India
55
b) Financial interest in Jointly Controlled Entities: ` in Crores
Sr.
No
Name of Joint Venture
Company’s share in
Assets As at Liabilities As at
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
1 Arya Omnitalk Wireless Solutions Pvt. Limited 21.77 18.03 13.83 11.62
2 Tommy Hilfger Arvind Fashions Private Limited 61.37 55.33 28.64 41.99
3 Arya Omnitalk Radio Trunking Services Private Limited 10.97 10.04 3.69 3.26
4 Arudrama Developers Private Limited 2.37 2.37 0.32 0.32
5 Arvind BSAFAL Homes LLP 45.23 46.14 38.82 26.69
6 Arvind and Smart Value Homes LLP 68.09 67.15 66.05 6.20
7 Ahmedabad East Infrastructure LLP 21.72 - 21.73 -
` in Crores
Sr.
No
Name of Joint Venture
Company’s share in
Income Year ended Expenses Year ended
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
1 Arya Omnitalk Wireless Solutions Pvt. Limited 26.72 27.19 24.10 25.03
2 Tommy Hilfger Arvind Fashions Private Limited 94.61 70.11 90.60 66.48
3 Arya Omnitalk Radio Trunking Services Private Limited 7.68 6.01 6.93 5.42
4 Arvind BSAFAL Homes LLP 15.08 24.70 12.27 18.03
5 Arvind and Smart Value Homes LLP 17.33 21.56 16.20 19.38
` in Crores
Sr.
No
Company’s share in:
Year ended
March 31, 2013 March 31, 2012
1 Contingent Liability in respect of guarantee given by Bank 2.21 2.80
2 Disputed Demand in respect of :
Income Tax 0.05 -
Sales Tax 0.08 0.02
Service Tax 0.44 0.44
3 Capital commitments
Estimated amount of contracts remaining to be executed on
capital account and not provided for
0.03 0.18
4 Claims against the Company not acknowledged as debts 0.61 -
Note : The above fgures are considered based on unaudited fnancial statements of the respective Jointly Controlled Entities.
Notes to fnancial statements
42 Impairment of Fixed Assets
In accordance with the Accounting Standard (AS -28) on ‘Impairment of Assets’ notifed by Companies (Accounting Standards) Rules, 2006, the
Company has reassessed its fxed assets and is of the view that no further impairment/reversal is considered to be necessary in view of its expected
realisable value.
43 Early adoption of AS 30, Financial Instruments :Recognition and Measurement
(a) Consequent to the Announcement of the Institute of Chartered Accountants of India (ICAI), the Company had chosen to early adopt
‘Accounting Standard – 30, Financial Instruments: Recognition and Measurement’ in its entirety, read with the clarifcation issued on
application of AS -30. Accordingly, the Company has changed the designation and measurement of all its signifcant fnancial assets and
liabilities. All the fnancial assets and fnancial liabilities and derivatives have been remeasured at their respective fair values or at amortized
cost as against cost except for those items whose accounting treatment is covered by the existing standards notifed by Companies
(Accounting Standards) Rules, 2006.
(b) As a result, as on Balance Sheet date, Long Term Borrowings are lower by ` 4.20 Crores, (Previous year higher by ` 1 Crores) and Hedge
Reserve account is debited by ` 23.64 Crores (Previous year ` 98.25 Crores) on account of fair valuation of outstanding derivatives.
44 Foreign Exchange Diferences
As per the notifcation issued by the Ministry of Corporate Afairs dated 31st March, 2009 as amended from time to time, the Company had already
exercised the option for accounting of exchange rate diferences with efect from April 1, 2007.
Consequent to the adoption of that option:
(a) Exchange rate diferences of long-term foreign currency loans which are related to acquisition of depreciable fxed
assets have been added to or deducted from the cost of the assets and depreciated over the balance life of the assets
and;
(b) Exchange rate diferences on other long-term foreign currency loans have been transferred to ‘Foreign Currency Monetary Item Translation
Diference Account’ to be amortized over the balance period of loans or up to 31st March, 2020 whichever is earlier.
As a result:
(a) An amount of ` 3.75 Crores being the exchange rate loss for the year (Previous year ` 0.30 Crores) has been adjusted against the fxed assets.
(b) An amount of ` 4.90 Crores being the exchange rate loss for the year (Previous year ` 4.19 Crores) remains to be amortized as at the balance
sheet date.
56
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
45 Category-wise Quantitative data about derivative instruments outstanding:
Particulars Currency
As at 31st March, 2013 As at 31st March, 2012
In Mn Avg. Ex. Rate ` in Crores In Mn Avg. Ex. Rate ` in Crores
Forward Sales USD 60.71 52.3898 318.06 206.87 49.1051 1,015.84
EUR 0.81 72.7398 5.88 1.25 70.3030 8.78
Forward Purchase USD 10.08 55.4186 55.86 34.03 51.1847 174.21
JPY 193.98 0.6141 11.91 - - -
Interest Swap USD 10.00 56.7325 56.73 - - -
Option Deals USD - - - 66.00 50.6136 334.05
The Company has borrowed long term as well as short term Loans in Foreign currency but as the Company is a net foreign currency surplus
Company, there is no unhedged exposure in foreign currency.
46 Disclosure in respect of Construction/Job work Contracts
` in Crores
Particulars
Year ended
March 31, 2013
Year ended
March 31, 2012
Amount of Contract Revenue recognized 24.59 16.02
Disclosure in respect of contracts in progress at the reporting date
Contract cost incurred and recognised profts less recognised losses up to the reporting date 24.59 16.02
Advance received from customers 6.03 5.84
Due from customers 3.19 2.15
47 Expenditure on Research and Development:
The Company has separate In-House Research & Development Centre at Naroda and Santej locations. Centre at Naroda location is duly recognised
and approved by Department of Scientifc and Industrial Research, Ministry of Science and Technology, Government of India while the company is
in the process of applying to Department of Scientifc and Industrial Reserach, Ministry of Science and Technology, Government of India, for
recognition of Centre at Santej Centre. Both the Centres are involved into new product development, new process development etc. The details of
Capital and Revenue Expenditure incurred on Research and Development by both the Centres are as under:
` in Crores
Particulars
Year ended
March 31, 2013
Year ended
March 31, 2012
Naroda Centre
Captial Expenditure 9.21 0.18
Revenue Expenditure 2.67 4.06
Total Expenditure at Naroda Centre 11.88 4.24
Santej Centre
Capital Expenditure 0.61 0.62
Revenue Expenditure 7.25 0.56
Total Expenditure at Santej Centre 7.86 1.18
48 Figures less than ` 50,000/- which are required to be shown seperately, have been shown as actual in brackets.
49 In the opinion of the Board, all assets other than fxed assets have a value on realization in the ordinary course of business at least equal to the amount
at which they are stated except for reconciliation adjustments in respect of some of the payables and receivables.
50 Previous year fgures have been regrouped or recast wherever necessary to make them comparable with those of the current year.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
57
We have audited the accompanying consolidated fnancial statements of
Arvind Limited (“the Company”) and its subsidiaries, which comprise
the consolidated Balance Sheet as at March 31, 2013, and the consolidated
Statement of Proft and Loss and consolidated Cash Flow Statement for
the year then ended, and a summary of signifcant accounting policies and
other explanatory information.
Management’s Responsibility for the Consolidated Financial
Statements
Management is responsible for the preparation of these consolidated
fnancial statements that give a true and fair view of the consolidated
fnancial position, consolidated fnancial performance and consolidated
cash fows of the Company in accordance with accounting principles
generally accepted in India; this includes the design, implementation
and maintenance of internal control relevant to the preparation and
presentation of the consolidated fnancial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated fnancial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the consolidated fnancial statements.
The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated
fnancial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the
Company’s preparation and presentation of the consolidated fnancial
statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation of the consolidated fnancial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us and based on the consideration of the reports of
the other auditors on the fnancial statements of the subsidiaries as noted
below, the consolidated fnancial statements give a true and fair view in
conformity with the accounting principles generally accepted in India:
INDEPENDENT AUDITOR’S REPORT To the Board of Directors
of Arvind Limited
(a) in the case of the consolidated Balance Sheet, of the state of afairs of
the Company as at March 31, 2013;
(b) in the case of the consolidated Statement of Proft and Loss, of the
proft for the year ended on that date; and
(c) in the case of the consolidated Cash Flow Statement, of the cash
fows for the year ended on that date.
Emphasis of Matter
As mentioned in Note No. 37 in respect of early adoption of Accounting
Standard (AS) – 30 on ‘Financial Instruments: Recognition and
Measurement’ issued by the Institute of Chartered Accountants of India
and the clarifcation issued on Application of AS 30, the Company has
measured all its Financial Assets and Liabilities at their respective Fair
Values or at Amortized Cost except for those items whose accounting
treatment is covered by the existing accounting standards notifed by
Companies (Accounting Standard) Rules, 2006. Accordingly, the carrying
amount of Long Term Borrowings would have been higher by ` 4.20 Crores
and carrying value of Hedge Reserve would have been higher by ` 23.64
Crores.
Other Matter
We did not audit the fnancial statements of certain subsidiaries and limited
liability partnership entities whose fnancial statements refect (before
giving efect to the consolidation adjustments) total assets of ` 312.62
Crores as at 31st March 2013 and total revenue of ` 79.91 Crores for the
year then ended. These Financial Statements have been audited by other
auditors whose reports have been furnished to us by the Management and
our opinion is based solely on the report of the other auditors.
We did not audit the fnancial statements of joint venture entities and
one limited liability partnership entity whose fnancial statements refect
(before giving efect to the consolidation adjustments) total assets of
` 163.05 Crores as at 31st March 2013 and total revenue of ` 146.33 Crores
for the year then ended which were prepared by the management. The
same has been considered for the purpose of consolidation and accepted
as correct by us. Any adjustment to their balances on completion of audit
could have consequential efect on the attached Consolidated Financial
Statements.
Our opinion is not qualifed in respect of these matters.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N D Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
58
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Note As at
March 31, 2013
As at
March 31, 2012
Equity and Liablities
Shareholders’ funds
Share Capital 3 258.04 258.04
Reserves and Surplus 4 1,995.94 1,769.56
Minority Interest 10.80 9.13
Non-current liabilities
Long Term Borrowings 5 1,005.12 777.04
Deferred Tax Liabilities (Net) 6 5.77 18.88
Other Long Term Liabilities 7 10.30 8.84
Long Term Provisions 8 13.22 50.45
Current liabilities
Short Term Borrowings 9 1,280.62 1,174.94
Trade Payables 10 1,097.80 893.39
Other Current Liabilities 7 466.72 344.25
Short Term Provisions 8 89.06 100.64
Total 6,233.39 5,405.16
Assets
Non-current assets
Fixed Assets
Tangible Assets 11 2,560.37 2,463.60
Intangible Assets 12 134.10 128.60
Capital Work-in-progress 207.64 180.34
Intangible Assets under development - 12.42
Non-current Investments 13 56.82 41.70
Long Term Loans and Advances 14 388.48 279.91
Other Non-current Assets 15 1.48 2.36
Current assets
Current Investments 13 10.98 -
Inventories 16 1,412.89 1,126.12
Trade Receivables 17 754.65 642.20
Cash and Bank Balances 18 185.58 70.85
Short Term Loans and Advances 14 216.92 197.16
Other Current Assets 15 303.48 259.90
Total 6,233.39 5,405.16
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Consolidated Balance Sheet as at 31st March, 2013
59
Consolidated Statement of Proft and Loss for the year ended on 31st March, 2013
` in Crores
Note Year ended
March 31, 2013
Year ended
March 31, 2012
Revenue from operations (Gross) 21 5,365.33 4,995.91
Less : Excise Duty 72.81 70.79
Revenue from operations (Net) 5,292.52 4,925.12
Other Income 22 80.56 118.50
Total Revenue 5,373.08 5,043.62
Expenses:
Cost of materials and accessories consumed 23 1,748.76 1,622.19
Purchases of Stock in Trade 763.09 727.24
Project Expense 109.77 100.40
Changes in inventories of fnished goods, work-in-progress and
stock-in-trade 24 (284.68) (55.12)
Employee benefts expense 25 565.63 451.40
Finance costs 26 315.34 309.10
Depreciation and amortization expense 27 204.30 161.39
Other expenses 28 1,702.54 1,476.77
Total Expenses 5,124.75 4,793.37
Proft before exceptional and extraordinary items and tax 248.33 250.25
Exceptional items - -
Proft before extraordinary items and tax 248.33 250.25
Extraordinary Items 29 - 245.04
Proft before Tax 248.33 495.29
Tax expense:
Current Tax 59.58 94.54
Deferred tax (5.57) (2.76)
MAT Credit Entitlement (53.75) (32.37)
Proft for the year before adjustment for Minority Interest 248.07 435.88
Share of Proft/(Loss) transferred to Minority Interest (0.34) 0.01
Net Proft for the year after adjustment for Minority Interest 248.41 435.87
Earnings per equity share 31
(Nominal Value per Share ` 10/- (Previous year ` 10/-):
Basic and Diluted
Before Extraordinary Items 9.63 9.48
After Extraordinary Items 9.63 16.90
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
60
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
A CASH FLOW FROM OPERATING ACTIVITIES
Proft Before taxation 248.33 495.29
Adjustments for:
Depreciation /Amortization 204.30 161.39
Impairment Reversal (0.05)
Interest Income (9.57) (7.35)
Interest Expenses 282.59 278.63
Dividend Income (0.35) (0.26)
Bad Debts Written Of (Including Provision) 0.75 2.67
Wealth Tax Provision 0.20 0.20
Sundry Debit Written of 1.57 1.38
Sundry Credit Balances Appropriated (1.40) (2.83)
Foreign Exchange Diference 0.41 (0.16)
Fixed Assets written of 0.58 2.02
Proft on Sale of Land held for sale (14.80) (67.40)
Proft on Sale of Tangible/Intangible assets (23.26) (13.52)
(Proft)/Loss on sale of Investment (0.11) 1.54
Extra Ordinary Item - (245.04)
440.86 111.27
Operating Proft before Working Capital Changes 689.19 606.56
Working Capital Changes:
Changes in Inventories (312.10) 64.81
Changes in trade payables 205.81 (9.19)
Changes in other current liabilities 124.53 40.66
Changes in provisions 9.47 3.34
Changes in loans and advances (46.36) (58.03)
Changes in trade receivables (113.08) (143.12)
Changes in Other assets (44.88) (78.69)
Changes in Other Bank Balances 6.66 (7.22)
Net Changes in Working Capital (169.95) (187.44)
Cash Generated from Operations 519.24 419.12
Direct Taxes paid (Net of Income Tax refund) (61.96) (83.92)
Net Cash Flow from Operating Activities 457.28 335.20
B Cash Flow from Investing Activities
Purchase of tangible/intangible assets (368.32) (449.25)
Sale of tangible assets 66.53 118.12
Sale of Land held for sale 20.30 98.78
Changes in Investments (28.06) 13.55
Capital Advances 12.47 (14.50)
Changes in Loans given (42.23) 14.42
Dividend Income 0.35 0.26
Interest Income 8.12 7.07
Net cash fow before Extra Ordinary Item (330.84) (211.55)
Proceeds from Sale of Investment in Joint Venture - 245.04
Net cash fow from Investing Activites (330.84) 33.49
Consolidated Cash Flow Statement for the year ended on 31st March, 2013
61
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
C Cash Flow from Financing Activities
Issue of Share Capital - 0.23
Securities Premium received - 0.11
Dividend Paid (25.64) -
Dividend Distribution Tax Paid (4.19) -
Changes in long term Borrowings 221.54 (169.18)
Changes in short term borrowings 103.78 102.02
Interest Paid (301.41) (294.71)
Net Cash fow from Financing Activities (5.92) (361.53)
Net Increase/(Decrease) in cash & cash equivalents 120.52 7.16
Cash & Cash equivalents at the beginning of the period 40.86 33.70
Cash & Cash equivalents at the end of the period 161.38 40.86
a Particulars As at
March 31, 2013
As at
March 31, 2012
Cash and cash equivalents comprise of: (Note 18)
Cash on Hand 1.47 1.75
Cheques on Hand 0.04 (` 15,000/-)
Balances with Banks* 159.88 39.10
Cash and cash equivalents 161.39 40.85
Efect of Exchange Rate Changes 0.01 (0.01)
Cash and cash equivalents as restated 161.38 40.86
* Includes the following balance which is not available for use by the Company
Unpaid dividend account 0.49 0.33
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Consolidated Cash Flow Statement for the year ended on 31st March, 2013 (Contd.)
62
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
1. BASIS OF CONSOLIDATION
Basis
(i) The Consolidated Financial Statements have been prepared in accordance with Accounting Standard - 21 on “Consolidated Financial
Statements” notifed by Companies (Accounting Standards) Rules, 2006 and relevant clarifcations issued by the Institute of Chartered
Accountants of India. The Consolidated Financial Statements comprise the fnancial statements of Arvind Limited and its subsidiaries
and its Joint Venture entities. Reference in these notes to Arvind Limited, Company, Parent Company, Companies or Group shall mean to
include Arvind Limited or any of its subsidiaries and its Joint Venture entities consolidated in the fnancial statements, unless otherwise
stated.
(ii) The Notes and Signifcant Accounting Policies to the Consolidated Financial Statements are intended to serve as a guide for better
understanding of the Group’s position. In this respect, the Company has disclosed such notes and policies, which represent the needed
disclosure.
Principles
(i) The fnancial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together like
items of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions and unrealised profts or losses are
fully eliminated.
(ii) The diference between cost to the Company of its investments in the subsidiary companies and its share of the equity of the subsidiary
companies, at the dates on which the investments in the subsidiary companies are made, is recognised as Goodwill or Capital Reserve as
the case may be.
(iii) Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders
at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the
equity subsequent to the dates of investments.
(iv) In case of Foreign Subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All assets and Liabilities
are converted at rates prevailing at the end of the year. Any exchange diference arising on translation is accumulated in a “Reserve on
Exchange Rate Fluctuation” in the Balance Sheet.
(v) The Company’s interest in the Joint Venture has been consolidated on line to line basis by adding together the value of assets, liabilities,
income and expenses, after eliminating the unrealised profts/losses of intra group transactions. Joint Venture accounts have been
included in segment to which they relate.
a. The List of Subsidiaries included in the Consolidated Financial Statements are as under :
Sr.
No.
Name of Subsidiary
Country of
incorporation
Proportion of ownership
as on 31st March 2013
1 Asman Investments Limited India 81.88%
2 The Anup Engineering Limited India 88.24%
3 Arvind Worldwide Inc. USA 100%
4 Arvind Worldwide (M) Inc. Mauritius 100%
5 Arvind Accel Limited India 100%
6 Syntel Telecom Limited India 100%
7 Arvind Infrastructure Limited India 100%
8 Arvind Brands & Retail Limited India 99.52%
9 Arvind Lifestyle Brands Limited India 99.76%
10 Arvind Envisol Private Limited India 100%
11 Arvind PD Composites Private Limited India 51%
12 Arvind Overseas (Mauritius) Limited Mauritius 100%
13 Arvind Spinning Limited Mauritius 100%
14 Arvind Textile Mills Limited Bangladesh 100%
15 Arvind Goodhill Suit Manufacturing Private Limited India 51%
16 Arvind Niloy Exports Private Limited Bangladesh 70%
17 Arvind Spinning Park Private Limited India 100%
18 Arvind Processing Park Private Limited India 100%
19 Arvind Hebbal Homes Private Limited India 100%
20 Arvind OG Nonwovens Private Limited India 74%
Notes to consolidated fnancial statement:
63
b. The following Joint Venture entities and Limited Liability Partnerships have been included in the Consolidated Financial Statements :
Sr.
No.
Name of the Entity
Country of
incorporation
Proportion of ownership as
on 31st March 2013
1 Arya Omnitalk Wireless Solutions Private Limited India 50%
2 Arya Omnitalk Radio Trunking Services Private Limited India 50%
3 Tommy Hilfger Arvind Fashions Private Limited India 50%
4 Arvind B SAFAL Homes LLP India 50%
5 Arvind Smart Value Homes LLP India 50%
6 Arudrama Developers Private Limited India 50%
7 Ahmedabad East Infrastructure LLP India 50%
2. SIGNIFICANT ACCOUNTING POLICIES
The Company follows the accrual method of accounting. The fnancial statements have been prepared in accordance with the historical
cost convention (except so far as they relate to (a) revaluation of fxed assets and providing for depreciation on revalued amounts and
(b) items covered under ‘Accounting Standard (AS) – 30’ on ‘Financial Instruments: Recognition and Measurement” which have been
measured at their fair value) and accounting principles generally accepted in India.
The Accounts of the fo reign subsidiaries have been prepared in accordance with local laws and applicable accounting standards / generally
accepted accounting principles.
(A) REVENUE RECOGNITION
(A.1) Sales and operating income includes sale of products, by-products and waste, income from job work services and gain or
loss on forward contracts. Sales are recognised based on passage of title to goods which generally coincides with dispatch.
Revenue from export sales are recognised on shipment basis. Sales are stated net of returns, excise duty & Sales Tax/VAT.
Export incentives are accounted on accrual basis at the time of export of goods, if the entitlement can be estimated with
reasonable accuracy and conditions precedent to claim are fulflled.
(A.2) Retail sales and revenues are recognised on delivery of the merchandise to the customer, when the property in the goods
is transferred for a price, when signifcant risks and rewards have been transferred and no efective ownership control is
retained. Sales are net of discount. Sales tax and VAT are reduced from Retail Turnover.
(A.3) The property in the merchandise of third party consignment stock does not pass to the Company. Since, however, the sale
of such stock forms a part of the activities of the Company’s departmental stores, the gross sales values and cost of the
merchandise are displayed separately in the Statement of Proft and Loss.
(A.4) In respect of gift vouchers and point award schemes operated by the Company, sales are recognised when the gift vouchers
or points are redeemed and the merchandise is sold to the customer.
(A.5) Revenue from store displays and sponsorships are recognised based on the period for which the products or the sponsors’
advertisements are promoted/ displayed. Facility management fees are recognised pro-rata over the period of the contract.
(A.6) Revenue from job work services and Rental Income are recognised based on the services rendered in accordance with the
terms of contracts.
(A.7) Revenue in respect of projects for Construction of Plants and Systems, execution of which is spread over diferent
accounting periods, is recognised on the basis of percentage of completion method in accordance with Accounting
Standard 7 – Accounting for Construction Contracts.
Percentage of completion is determined by the proportion that contract costs incurred for work done till date bears to the
estimated total contract cost.
Diference between costs incurred plus recognised proft / less recognised losses and the amount invoiced is treated as
contract in progress. Determination of revenues under the percentage of completion method necessarily involves making
estimates by the Company, some of which are of a technical nature, relating to the percentage of completion, costs to
completion, and the expected revenue from the contract and the foreseeable losses to completion.
(A.8) Claims receivable on account of Insurance are accounted for to the extent the Company is reasonably certain of their
ultimate collection.
(A.9) Dividend is accounted for as and when it is received.
(B) VALUATION OF INVENTORY
(B.1) The stock of Work-in-progress and Finished goods has been valued at the lower of cost and net realisable value. The cost
has been measured on the standard cost/moving average/FIFO basis as applicable and includes cost of materials and cost
of conversion.
(B.2) Merchandise received under consignment and concessionaire arrangements belong to the consignors/concessionaires
and are therefore excluded from the Company’s inventories.
Notes to consolidated fnancial statement:
64
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
(B.3) All other inventories of stores, consumables, raw materials (Electronics Division) are valued at cost. The stock of waste is
valued at market price. The other raw materials, fnished goods and stock at branches are valued at lower of cost and market
value. Cost is measured on actual average for the whole year. Excise duty wherever applicable is provided on fnished goods
lying within the factory and bonded warehouse at the end of the year.
(C) FIXED ASSETS & DEPRECIATION
Tangible Assets
(C.1) Fixed assets are stated at their original cost of acquisition or construction / revalued cost wherever applicable less
accumulated depreciation and impairment losses. Cost comprises of all costs incurred to bring the assets to their location
and working condition and includes all expenses incurred up to the date of launching new stores to the extent they are
attributable to the new store.
(C.2) Items of fxed assets that have been retired from active use and are held for disposal are stated at the lower of their net
book value and net realisable value and are shown separately in the fnancial statements. Any expected loss is recognised
immediately in the Statement of Proft and Loss.
(C.3) Exchange rate gain or loss on foreign currency loans related to acquisition of depreciable assets are being capitalized as per
the notifcation dated 31st March, 2009 as amended from time to time issued by Ministry of Corporate Afairs, New Delhi.
(C.4) Depreciation on Revalued Fixed Assets is calculated on the residual life of the assets or as per rates specifed in the Schedule
XIV to the Companies Act, 1956 whichever is higher.
(C.5) Additions to fxed assets have been stated at cost net of CENVAT wherever applicable.
(C.6) Directly identifable preoperative expenses of new projects of capital nature under implementation are carried forward
under capital work-in-progress, pending capitalization.
(C.7) Depreciation on additions to Fixed Assets has been provided on straight-line method at the rates specifed in Schedule XIV
to the Companies Act, 1956, as existing at the time of capitalization except for motor vehicles where depreciation has been
provided at 20/25% and on leasehold improvements at 10%.
(C.8) In Arvind Lifestyle Brands Limited, depreciation on addition to Fixed Assets is provided, pro rata for the period of use, by the
straight line method (SLM), as per the rates prescribed in Schedule XIV to the Act except for the following which are based
on management’s estimate of useful lives of the fxed assets:
Leasehold Improvements, Plant & Equipments,
Ofce Equipments and Furniture & Fixtures 15%
(C.9) Depreciation on impaired asset is provided on the asset’s revised carrying amount, over its remaining useful life.
(C.10) Depreciation on exchange rate diference capitalized is provided over the balance life of the assets as per the notifcation
dated 31st March, 2009 as amended from time to time issued by the Ministry of Corporate Afairs.
(C.11) Individual assets costing less than ` 5,000/- have been fully depreciated in the year of purchase on prorata basis.
(C.12) In the case of foreign subsidiaries, depreciation has been provided as per the rates permitted under the local laws/ at such
rate so as to write of the assets over its useful life.
(C.13) Premium on Leasehold Land is amortized over the period of Lease.
(C.14) Revaluation Reserve on Assets sold is transferred to General Reserve.
Intangible Assets
(C.15) Intangible assets are stated at their cost of acquisition and / or fair value, less accumulated amortisation and impairment
losses. An intangible asset is recognised, where it is probable that the future economic benefts attributable to the asset will
fow to the enterprise and where its value/cost can be reliably measured.
(C.16) The Company capitalizes software and related implementation costs where it is reasonably estimated that the software has
an enduring useful life.
(C.17) Job Workers’ Network Value, Vendors’ Network Value and Distribution Network Value have been amortized on Straight
Line basis over the period of fve years. Value of License Brands and Brand Value have been amortized in the ratio of revenue
expected to be generated from these brands over the period of ten years.
(C.18) Software is depreciated over management estimate of its useful life of 5 years.
(C.19) Patent/Knowhow is depreciated over its useful validity period.
(D) INVESTMENTS
(D.1) Investments are classifed as Long Term Investments and Current Investments. Long term investments are stated at cost
less permanent diminution in value, if any. Current Investments are stated at lower of cost and net realizable value.
(D.2) Investment property: Investment in buildings that are not intended to be occupied substantially for use by, or in the
operations of, the Company, have been classifed as investment property. Investment properties are carried at cost less
accumulated depreciation.
Notes to consolidated fnancial statement:
65
Notes to consolidated fnancial statement:
(E) IMPAIRMENT OF ASSETS
An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date
there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the
asset belongs, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value in use). The carrying amount
is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Proft and Loss.
Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an
asset in prior accounting periods may no longer exist or may have decreased.
(F) FOREIGN CURRENCY TRANSACTIONS
(F.1) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the
transaction.
(F.2) Monetary items denominated in foreign currencies at the year end are restated at year end rates.
(F.3) Non-monetary foreign currency items are carried at cost.
(F.4) The Company has opted to avail the choice provided under paragraph 46A of AS 11: The Efects of Changes in Foreign
Exchange Rates inserted vide Notifcation dated December 29, 2011. Consequently, All long term foreign currency monetary
items consisting of loans which relate to acquisition of depreciable capital assets at the end of the year have been restated at
the rate prevailing at the balance sheet date. The diference arising as a result has been added to or deducted from the cost
of the assets. Exchange rate diference on other long term foreign currency loans is carried to ‘Foreign Currency Monetary
Item Translation Diference Account’ to be amortized up to the period of loan or up to March 31, 2020 whichever is earlier.
(F.5) Any income or expense on account of exchange diference either on settlement or on translation other than as mentioned in
(F.4) above is recognised in the Statement of Proft and Loss.
(F.6) Expenses of overseas ofces are translated and accounted at the monthly average rate.
(G) DERIVATIVES & COMMODITY HEDGING TRANSACTIONS
(G.1) In order to hedge its exposure to foreign exchange, interest rate and commodity price risks, the Company enters into
forward, option, swap contracts and other derivative fnancial instruments. The Company neither holds nor issues any
derivative fnancial instruments for speculative purposes.
(G.2) Derivative fnancial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-
measured at their fair value at subsequent balance sheet dates.
(G.3) Changes in the fair value of derivatives that are designated and qualify as cash fow hedges and are determined to be an
efective hedge are recorded in hedging reserve account. To designate a forward contract or option as an efective hedge,
management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract
whether the contract is efective in achieving ofsetting cash fows attributable to hedged risk. Any cumulative gain or loss
on the hedging instrument recognised in hedging reserve is kept in hedging reserve until the forecast transaction occurs or
the hedged accounting is discontinued. Amounts deferred to hedging reserve are recycled in the Statement of Proft and
Loss in the periods when the hedged
item is recognised in the Statement of Proft and Loss or when the portion of the gain or loss is determined to be an
inefective hedge.
(G.4) Derivative fnancial instruments that do not qualify for hedge accounting are marked to market at the balance sheet date
and gains or losses are recognised in the Statement of Proft and Loss immediately.
(G.5) Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer
qualifes for hedge accounting. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in hedging reserve is transferred to proft or loss for the year.
(H) EMPLOYEE BENEFITS
(H.1) The Company has Defned Contribution Plans for post employment benefts namely Provident Fund and Superannuation
Fund which are recognised by the Income Tax Authorities. These funds are administered through trustees and the
Company’s contributions thereto are charged to revenue every year. The Company also pays insurance premiums to
fund a post-employment medical assistance scheme, a Defned Contribution Plan administered by ICICI Lombard General
Insurance Company Limited which is charged to revenue every year. The Company’s Contribution to State Plans namely
Employee’s State Insurance Fund and Employee’s Pension Scheme are charged to revenue every year.
(H.2) The Company has Defned Beneft Plans namely leave encashment/ compensated absences and Gratuity for all the
employees, the liability for which is determined on the basis of an actuarial valuation at the year end and incremental liability,
if any, is provided for in the books. The actuarial valuation is done based on Projected Unit Credit Method. Gratuity scheme
is administered through trust recognised by the Income Tax Authorities and / or by LIC.
(H.3) Actuarial Gains and Losses comprise of experience adjustments and the efects of changes in actuarial assumptions and are
recognised immediately in the Statement of Proft and Loss as income or expense.
66
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
(I) BORROWING COST
For Arvind Limited
Borrowing costs include interest, fees and other charges incurred in connection with the borrowing of funds. It is calculated on
the basis of efective interest rate in accordance with Accounting Standard (AS) -30 and considered as revenue expenditure and
charged to Statement of Proft and Loss for the year in which it is incurred except for borrowing costs either generally or specifcally
attributed directly to the acquisition/improvement of qualifying assets up to the date when such assets are ready for intended use
which are capitalised as a part of the cost of such asset.
For Subsidiaries and Joint Ventures
Borrowing costs includes interest, fees and other charges incurred in connection with the borrowing of funds and is considered as
revenue expenditure for the year in which it is incurred except for borrowing costs attributed to the acquisitions/improvement of
qualifying capital asset and incurred till the commencement of commercial use of the asset and which is capitalised as cost of that
asset.
(J) LEASE ACCOUNTING
(J.1) Assets acquired under Finance Lease are segregated from the assets owned and recognised as asset at an amount equal
to the fair value of the leased assets at the inception of the lease or the present value of the minimum lease payments
whichever is lower with corresponding outstanding liability.
(J.2) Lease rental payable on such fnance lease has been apportioned between fnance charge and the reduction in the
outstanding liability. The fnance charge has been allocated to periods during the lease term so as to produce constant
periodic rate of interest on the remaining balance of liability for each period.
(J.3) Lease Rentals for assets acquired under operating lease are recognised as an expense in the Statement of Proft & Loss on a
straight line basis over the lease term.
(K) TAXES ON INCOME
(K.1) Tax expense consists of both current as well as deferred tax liability. Current tax represents amount of income tax payable
including the tax payable u/s 115JB, if any, in respect of taxable income for the year.
(K.2) Minimum Alternate Tax Credit is recognised as an asset only when and to the extent there is convincing evidence that the
Company will pay normal income tax within the specifed period.
(K.3) Deferred tax is recognised on timing diference between the accounting income and the taxable income for the year that
originates in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantifed
using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
(K.4) Deferred tax assets are recognised and carried forward to the extent that there is a virtual certainty supported by convincing
evidence that sufcient future taxable income will be available against which such deferred tax assets can be realized.
(L) EARNING PER SHARE
The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per
Share. Basic EPS is computed by dividing the net proft or loss for the year by the weighted average number of Equity shares
outstanding during the year. Diluted EPS is computed by dividing the net proft or loss for the year by the weighted average number
of equity shares outstanding during the year as adjusted for the efects of all dilutive potential equity shares, except where the
results are anti-dilutive.
(M) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT
ASSETS
Provisions involving a substantial degree of estimation in measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outfow of resources. Contingent liabilities are not recognised but are
disclosed in the accounts by way of a note. Contingent assets are neither recognised nor disclosed in the fnancial statements.
(N) CAPITAL ISSUE EXPENSES
Expenses on issue of Shares, Debentures and GDRs are being adjusted against Share Premium Account as permitted by section 78
of the Companies Act.
(O) ACCOUNTING FOR JOINT VENTURE
Accounting for Joint Venture has been done as follows:
Type of Joint Venture Accounting Treatment
Jointly Controlled Entity Company’s share of proft or loss is accounted on determination of proft or loss by the Joint Ventures.
Joint Venture interests accounted as above have been included in segments to which it relates.
Notes to consolidated fnancial statement:
67
Notes to consolidated fnancial statement:
` in Crores
3 Share Capital As at
March 31, 2013
As at
March 31, 2012
Authorised
Equity Shares
565,000,000 Shares (Previous Year 565,000,000) 565.00 565.00
Par Value of ` 10/- per share
Preference Shares
10,000,000 Shares (Previous Year 10,000,000) 100.00 100.00
Par Value of ` 100/- per share
665.00 665.00
Issued
Equity Shares
258,043,969 Shares (Previous Year 254,633,441) 258.04 254.63
Par Value of ` 10/- per share
258.04 254.63
Subscribed and fully paid up
Equity Shares
258,043,069 Shares (Previous Year 254,632,541) 258.04 254.63
Par Value of ` 10/- per share fully paid up
Forfeited Shares
900 Shares (Previous Year 900)
(` 4,500/- originally paid up (Previous Year ` 4,500/-)
Equity Shares Suspense Account - 3.41
Total 258.04 258.04
a Reconciliation of Number of Equity Shares
Particulars
As At March 31, 2013 As At March 31, 2012
No. of Shares ` in Crores No. of Shares ` in Crores
Balance at the beginning of the year 254,632,541 254.63 254,400,041 254.40
Add :
Shares alloted pursuant to exercise of Employee Stock
Option Plan
- - 232,500 0.23
Shares alloted to the shareholders of Amalgamated Company 3,410,528 3.41 - -
Balance at the end of the year 258,043,069 258.04 254,632,541 254.63
b Rights, Preferences and Restrictions attached to Shares
Equity Shares:
The Company has one class of shares referred to as equity shares having a par value of ` 10 each. Each shareholder is entitled to one vote per share
held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In
the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
c Details of Shares held by Shareholders holding more than 5% of the aggregate shares in the Company
Particulars
As At
March 31, 2013
As At
March 31, 2012
Aura Securities Private Limited 9,57,90,590 8,57,38,882
37.12% 33.67%
Life Insurance Corporation of India 1,65,85,134 1,65,58,953
6.43% 6.50%
d Shares reserved for issue under options
Refer note 32 for details of shares to be issued under options
e Shares allotted as fully paid up pursuant to contract without payment being received in cash (during 5 years immediately
preceding March 31, 2013)
34,10,528 Equity Shares of ` 10 each were issued during the year to the erstwhile shareholders of Arvind Products Limited pursuant to the Scheme
of Amalgamation without payment being received in cash.
f Proposed Dividend
The fnal dividend proposed for the year is as follows:
Particulars
As At
March 31, 2013
As At
March 31, 2012
On Equity Shares of ` 10/- each
Dividend per Equity Share (` ) 1.65 1
Percentage of Dividend Proposed 16.50% 10%
68
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
4 Reserves and Surplus As at
March 31, 2013
As at
March 31, 2012
Captial Reserve
Balance as per last fnancial statements 28.53 29.97
Less: Adjustment on Amalgamation - (1.44)
Add: Addition during the year 0.38 -
Balance at the end of the year 28.91 28.53
Capital Reserve on Consolidation (Note 41)
Balance as per last fnancial statements 28.35 28.35
Add: Addition during the year 56.66 -
Balance at the end of the year 85.01 28.35
Special Reserve
Balance as per last fnancial statements 0.40 0.20
Add: Addition during the year 0.11 0.20
Balance at the end of the year 0.51 0.40
Reserve on Exchange Rate Fluctuation
Balance as per last fnancial statements (0.73) (0.47)
Add: Addition during the year (0.23) (0.26)
Balance at the end of the year (0.96) (0.73)
General Reserve
Balance as per last fnancial statements 26.16 5.79
Add: Amount transferred from Revaluation Reserve 5.24 20.37
Add: Amount transferred from Surplus in Statement of Profit & Loss 20.00 -
Balance at the end of the year 51.40 26.16
Securities Premium Account
Balance as per last fnancial statements 653.54 711.42
Less: Adjustment on Consolidation - (57.99)
Add: Addition during the year - 0.11
Balance at the end of the year 653.54 653.54
Captial Redemption Reserve
Balance as per last fnancial statements 69.50 69.50
Revaluation Reserve (Note 11c)
Balance as per last fnancial statements 284.82 305.86
Add: Addition during the year 8.34 -
293.16 305.86
Less: Amount transferred to General Reserve 5.24 20.37
Less: Loss on Compulsory Acquisition adjusted 10.13 0.67
Balance at the end of the year 277.79 284.82
Hedge Reserve (Note 37)
Balance as per last fnancial statements (98.25) 31.89
Add: Adjustment during the year (Net) 74.61 (130.14)
Balance at the end of the year (23.64) (98.25)
Foreign Currency Monetary Item Translation Diference Account
Balance as per last fnancial statements (4.19) 0.75
Add: Adjustment during the year (Net) (0.71) (4.94)
Balance at the end of the year (4.90) (4.19)
Investment Revaluation Reserve
Balance as per last fnancial statements - 3.29
Less: Adjustment on Amalgamation - (5.48)
Add: Adjustment during the year (Net) - 2.19
Balance at the end of the year - -
Surplus in Statement of Proft and Loss
Balance as per last fnancial statements 781.43 254.64
Add/(Less): Adjustment on Consolidation (101.13) 177.42
680.30 432.06
Less : Amount transferred to Statement of Proft and Loss on account of Amalgamation - (56.31)
680.30 375.75
Add : Proft for the year 248.41 435.87
928.71 811.62
Less: Appropriations
Transfer to General Reserve 20.00 -
Proposed dividend on Equity Shares for the year 42.58 25.80
Dividend distribution tax on Proposed dividend on Equity Shares 7.24 4.19
Transfer to Special Reserve 0.11 0.20
Balance at the end of the year 858.78 781.43
Total 1,995.94 1,769.56
Notes to consolidated fnancial statement:
69
Notes to consolidated fnancial statement:
` in Crores
5 Long Term Borrowings Non- Current portion Current Maturities
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Secured:
Term Loans :
From Banks 842.09 672.31 148.33 145.26
From Financial Institutions and Others 160.45 102.15 23.59 18.35
Unsecured:
From Financial Institutions and Others 2.58 2.58 - -
Deferred Electricity Duty - - 3.12 12.69
1,005.12 777.04 175.04 176.30
Amount disclosed under the head “Other Current
Liabilities” (Note 7)
- - 175.04 176.30
Total 1,005.12 777.04 - -
a Borrowings As At
March 31, 2013
As At
March 31, 2012
At Amortized Cost 1,180.16 953.34
At Original Cost 1,184.36 952.34
6 Deferred Tax
In terms of the provisions of the Accounting Standard – 22 “Accounting for Taxes on Income” notifed by Companies (Accounting Standards) Rules,
2006, there is a net deferred tax asset on account of accumulated business losses and unabsorbed depreciation.
In compliance with provisions of Accounting Standard and based on General Prudence, the Company has not recognised the deferred tax asset
nor written back excess deferred tax liability, while preparing the accounts of the year under review.
` in Crores
7 Other Liabilities Non- Current Current
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Current maturities of long-term borrowings (Note 5) - - 175.04 176.30
Interest accrued but not due on borrowings - - 4.65 6.14
Interest accrued and due - - 1.99 -
Income received in advance 0.02 0.03 3.59 4.47
Advances from Customers - - 54.17 49.86
Statutory dues including Provident Fund and Tax
deducted at Source
- - 23.02 22.78
Security Deposits 10.05 8.81 7.30 4.71
Investor Education and Protection Fund shall be credited
by the following amount namely :
Unpaid dividend (Note a) - - 0.50 0.34
Book Overdraft - - 123.31 1.81
Payable to employees - - 46.20 33.35
Others 0.23 - 26.95 44.49
Total
10.30 8.84 466.72 344.25
a There are no amounts due for payment to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end.
` in Crores
8 Provisions Long Term Short Term
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Provision for Employee Benefts 12.07 9.05 17.66 11.24
Provision for Losses on Derivative Contracts 1.15 41.40 17.40 53.23
Proposed Dividend - - 42.58 25.80
Dividend Distribution Tax - - 7.24 4.19
Provision for Income Tax (Net of Advance Tax) - - - 2.23
Provision for Wealth tax - - 1.23 1.03
Provision for Loyalty Points - - 0.14 0.11
Provision for Litigation /Disputed Matters - - 2.81 2.81
Total 13.22 50.45 89.06 100.64
70
A R V I N D L I M I T E D 82
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ANNUAL REPORT 2012-13
a Provision for Customer Loyalty Program Reward Points
The Company has made provision for customer loyalty program reward points. The movement in provision for those reward points are given
below:
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Balance as per last fnancial statements 0.11 0.20
Net Provision/(Reversal) made during the year 0.03 (0.09)
Balance at the end of the year 0.14 0.11
b Provision for Litigation/Disputed Matters
The Company has made provisions for pending disputed matters in respect of Indirect Taxes like Sales Tax, Excise Duty and Custom Duty, the liability
which may arise in the future, the quantum whereof will be determined as and when the matters are disposed of. The movement in the provision
account is as under:
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Balance as per last fnancial statements 2.81 2.81
Balance at the end of the year 2.81 2.81
` in Crores
9 Short Term Borrowings
As at
March 31, 2013
As at
March 31, 2012
Secured:
Working Capital Loans repayable on demand
From Banks 1,193.51 1,060.16
From Financial Institutions and Others - 8.26
1,193.51 1,068.42
Unsecured:
Under Buyer’s Credit Arrangement from Banks 66.31 38.07
Loans repayable on demand from Banks - 0.95
Intercorporate Deposits
From Related Parties 0.31 1.42
From Others 20.49 66.08
87.11 106.52
Total 1,280.62 1,174.94
` in Crores
10 Trade Payables
As at
March 31, 2013
As at
March 31, 2012
Creditors in respect of Goods and Services (Note a) 830.38 728.84
Acceptances 267.42 164.55
Total 1,097.80 893.39
a The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development
(MSMED) Act, 2006 and hence disclosures as required under Section 22 of The Micro, Small and Medium Enterprise Development (MSMED) Act,
2006 regarding:
(a) Amount due and outstanding to suppliers as at the end of accounting year;
(b) Interest paid during the year;
(c) Interest payable at the end of the accounting year; and
(d) Interest accrued and unpaid at the end of the accounting year have not been given. The Company is making eforts to get the confrmations
from the suppliers as regard to their status under the said Act.
Notes to consolidated fnancial statement:
71
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72
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
12 Intangible Assets
` in Crores
Particulars
Gross Block Amortization Net Block
As on
01.04.2012
Adjustment on
Consolidation/
Amalgamation
Additions Disposals Other
Adjustments
As on
31.03.2013
As on
01.04.2012
Adjustment on
Consolidation/
Amalgamation
For the
year
Deductions As on
31.03.2013
As on
31.03.2013
As on
31.03.2012
Own Assets
Goodwill onConsolidation 22.04 - - - - 22.04 - - - - - 22.04 22.04
Patent andTechnical Knowhow 0.33 - 12.77 - - 13.10 0.20 - 1.32 - 1.52 11.58 0.13
Computer Software 37.41 (2.49) 4.02 - 0.01 38.95 23.87 (2.49) 4.48 - 25.86 13.09 13.54
BrandValue&LicenceBrands 102.02 (1.36) 0.60 - - 101.26 12.33 (1.36) 8.31 - 19.28 81.98 89.69
DistributionNetwork - - 4.31 - - 4.31 - - 0.50 - 0.50 3.81 -
Vendors’ Network 6.27 - - - - 6.27 3.75 - 1.25 - 5.00 1.27 2.52
Jobworkers’ Network 1.73 - - - - 1.73 1.05 - 0.35 - 1.40 0.33 0.68
Total 169.80 (3.85) 21.70 - 0.01 187.66 41.20 (3.85) 16.21 - 53.56 134.10 128.60
Previous Year 176.17 (48.70) 43.29 0.96 - 169.80 30.33 - 11.82 0.95 41.20 128.60 145.84
a Details of Borrowing Cost and Exchange Diferences:
` in Crores
Particulars
Other Adjustements
For the year
2012-2013 2011-2012
Borrowing Cost 0.01 -
Total 0.01 -
` in Crores
13 Investments Non-Current Current
As at As at
Particulars March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Investment Property (at cost less accumulated depreciation)
Cost of Ofce Building given on Operating Lease 13.70 13.70 - -
Less: Accumulated Depreciation 3.35 3.13 - -
10.35 10.57 - -
Trade Investments (Valued at Cost unless stated otherwise)
Investments in Government Trust Securities 0.02 0.02 - -
Investments in Fully Paid Equity Shares (Unquoted)
In Subsidiaries - 1.85 - -
Others 0.87 1.69 - -
In Partnership Firm* - 1.65 - -
Other Investments
Quoted
In Equity Shares 10.47 10.47 - -
Unquoted
In Equity Shares - - 1.06 -
In Mutual Funds - 2.27 9.92 -
11.36 17.95 10.98 -
Share Application Money 35.11 13.18 - -
Total 56.82 41.70 10.98 -
* The fnancial statements of partnership frm are under compilation and therefore the balance of capital account disclosed above is subject to change.
` in Crores
a Disclosure as per AS 13 - Accounting for Investments As at
March 31, 2013
As at
March 31, 2012
Long Term Investments 11.36 17.95
Current Investments 10.98 -
Notes to consolidated fnancial statement:
73
Notes to consolidated fnancial statement:
` in Crores
14 Loans and Advances Long Term Short Term
(Unsecured, Considered good unless otherwise stated) As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Capital Advances 71.23 83.82 - -
Considered doubtful 0.12 - - -
Less: Provision 0.12 - - -
71.23 83.82 - -
Security Deposits 123.22 93.51 4.34 1.20
Advance tax paid (Net of Provision) 0.11 - - -
Loans:
To Related Parties - Director of Joint Venture 0.10 - - -
To Employees 4.65 5.18 2.07 1.99
To Others 40.72 - 24.88 23.02
MAT Credit Entitlement 146.34 92.55 - -
Advances recoverable in cash or in kind or for value to be received 0.03 4.75 144.69 137.07
Prepaid Expenses 0.23 0.10 19.63 13.66
Balances with Government Authorities 1.85 - 1.65 2.11
CENVAT/Custom Duty Receivable - - 19.66 18.11
Total 388.48 279.91 216.92 197.16
` in Crores
15 Other Assets
Non Current Current
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Non Current Bank Balances (Note 18) 1.48 2.33 - -
Preliminary Expenses - 0.03 0.02 0.01
Land held for Sale - - 99.43 102.21
Interest Accrued - - 2.46 1.01
Unbilled Revenue - - 7.08 7.12
Income Receivable - - 11.76 15.66
Receivable other than trade - - 122.05 80.00
Export Incentive Receivable - - 60.68 53.89
Total 1.48 2.36 303.48 259.90
` in Crores
16 Inventories
As at
March 31, 2013
As at
March 31, 2012
Raw Materials and Accessories 234.07 265.42
In Transit 0.83 0.82
Fuel 2.63 2.56
Stores and Spares 50.44 43.08
In Transit - 0.02
Work-in-Progress 354.37 330.20
Finished Goods 233.90 151.78
In Transit 0.62 0.31
By Product 0.50 -
Stock in Trade 349.48 248.83
In Transit 5.61 5.55
Waste 1.56 1.96
Packing Material 8.10 1.85
In Transit - 0.01
Material at Site 3.04 0.39
Project work-in-progress 165.61 71.21
Unsold plots of land 2.13 2.13
Total 1,412.89 1,126.12
` in Crores
17 Trade Receivables
As at
March 31, 2013
As at
March 31, 2012
(Unsecured, considered good
unless otherwise stated)
Outstanding for a period
exceeding six months from the
date they are due for payment
Secured 7.06 5.16
Considered Good 95.54 44.55
Considered doubtful 1.33 1.19
Less: Provision for Doubtful Debts 1.33 1.19
102.60 49.71
Others
Unsecured 652.05 592.49
Total 754.65 642.20
74
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Non Current Current
18 Cash and Bank Balances As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Cash and Cash Equivalents:
Cash on Hand - - 1.47 1.75
Cheques on Hand - - 0.04 (` 15,000/-)
Balances with Banks
In Current Accounts - - 30.09 30.01
In Unpaid Dividend Accounts - - 0.50 0.34
In Exchange Earners Foreign Currency A/c - - - 0.19
In Cash Credit Account - - 123.00 8.56
In Saving Accounts - - (` 45,808/-) (` 45,808/-)
In Deposit Account (with original maturity upto 3 months) - - 6.29 -
- - 161.39 40.85
Other Bank Balances:
In Deposits Accounts
With original maturity more than 3 months but less than 12 months - - 5.39 12.80
With original maturity more than 12 months 0.43 1.65 1.13 4.72
Held as Margin Money
(Under lien with bank as Security for Guarantee Facility) 1.04 0.68 17.67 12.48
Lodged with Sales Tax Department 0.01 - (` 20,000/-) (` 20,000/-)
1.48 2.33 24.19 30.00
Amount disclosed under the head “Other Non Current
Assets” (Note 15)
1.48 2.33 - -
Total - - 185.58 70.85
19 Contingent Liabilities
(to the extent not provided for)
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Bills Discounted 117.59 111.40
Claims against the Company not acknowledged as debts 9.27 31.24
Guarantees given by the Banks on behalf of the Company 103.17 91.37
Guarantees given by the Company to Banks on behalf of Joint Ventures 13.23 16.91
Guarantees given by the Company to Banks on behalf of Other Companies 95.61 124.41
Disputed Demands in respect of
Excise/Custom Duty 29.33 31.25
Sales Tax 22.81 22.00
Income Tax 19.11 18.13
Service Tax 1.28 1.63
Textile Committee Cess 0.11 0.11
a It is not practicable for the Company to estimate the timings of cash outfows, if any, in respect of the above pending resolution of the respective
proceedings.
20 Capital and Other Commitments
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for 86.76 67.98
Other Commitments - -
Notes to consolidated fnancial statement:
75
Notes to consolidated fnancial statement:
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
21 Revenue from Operations
Sale of Products
Finished Goods and Stock in Trade 5,216.01 4,755.08
Less : Excise Duty/ VAT 72.81 70.79
5,143.20 4,684.29
Sale of Services 29.73 35.59
Other Operating Revenues
Export Incentives 103.58 109.78
Waste Sales 72.49 55.68
Commission Income 10.22 6.85
Gain / (Loss) on Forward Contracts (95.47) (1.26)
Other Operating Income 28.77 34.19
Total 5,292.52 4,925.12
22 Other Income
Interest Income 9.57 7.35
Dividend Income on Long Term
Investments
0.35 0.26
Rent 0.88 0.58
Sundry Credit Balances Appropriated 1.40 2.83
Proft on Sale of Fixed Assets (Net) 23.26 13.52
Proft on Sale of Investments (Net) 0.11 -
Proft on Sale of Land held for Sale 14.80 67.40
Provision no longer required 2.77 3.20
Other non-operating income 27.42 21.54
Prior Period Item - 1.82
Total 80.56 118.50
23 Cost of Materials and Accessories
Consumed
Stock at the beginning of the year 265.42 373.03
Purchases 1,717.41 1,514.58
1,982.83 1,887.61
Less: Stock at the end of the year 234.07 265.42
Total 1,748.76 1,622.19
24 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade
(Increase)/Decrease in stocks
Stock at the end of the year
Finished Goods 233.90 151.78
Stock-in-trade 349.48 248.83
Work-in-Progress 354.37 330.20
Project Work-in-Progress 165.61 71.21
Unsold Plot of Lands 2.13 2.13
Waste 1.56 1.96
1,107.05 806.11
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
24 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade (Contd.)
Stock at the beginning of the year
Finished Goods 151.78 179.96
Stock-in-trade 248.83 220.08
Work-in-Progress 330.20 346.04
Project Work-in-Progress 71.21 47.73
Unsold Plot of Lands 2.13 -
Waste 1.96 2.45
806.11 796.26
Less : Adjusted on account of
Consolidation/Amalgamation
(25.33) (45.32)
780.78 750.94
Add : Transferred from Capital Work in
Progress
0.14 -
780.92 750.94
Adjustment on Consolidation 41.36 (0.09)
Excise Duty in Value of Stock - Increase
/ (Decrease)
0.09 0.14
(Increase)/Decrease in stocks (284.68) (55.12)
25 Employee Benefts Expense
Salaries and Wages 497.76 399.66
Contribution to Provident Fund and
Other Funds
54.02 39.58
Staf Welfare Expenses 13.85 12.16
Total 565.63 451.40
26 Finance Costs
Interest
On Term Loans 97.29 102.42
On working capital loans 104.46 91.69
Others 55.50 50.16
Interest on shortfall of advance tax - 0.44
Exchange Diference to the extent
considered as an adjustment to
Borrowing Costs
25.34 33.92
Other Borrowing Costs 7.75 2.02
Bank Charges 25.00 28.45
Total 315.34 309.10
27 Depreciation / Amortization
Expense
Depreciation of Tangible Assets 187.87 149.22
Amortization of Intangible Assets 16.21 11.82
Depreciation of Investment Property 0.22 0.35
Total 204.30 161.39
76
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
28 Other Expenses
Power and fuel 429.78 366.25
Stores Consumed 311.35 251.31
Jobwork and Processing Charges 82.98 70.63
Insurance 4.64 4.61
Printing, Stationery & Communication 13.89 12.83
Rent 165.01 129.95
Commission, Brokerage and Discounts 98.33 90.01
Rates and taxes 20.28 14.76
Repairs:
To Buildings 3.19 2.66
To Machineries 90.35 92.97
To Others 27.73 20.07
Freight, Insurance and Clearing
Charges
51.59 36.68
Excise Duty borne by Company 50.79 50.91
Legal and Professional Fees 24.94 19.17
Conveyance and Travelling Expenses 30.31 24.01
Advertisement and Publicity 80.70 73.70
Directors’ sitting fees 0.02 0.05
Miscellaneous Labour Charges 58.33 59.37
Royalty on Sales 33.83 -
Provision for Doubtful Debts 0.72 0.91
Bad Debts written of 0.03 1.76
Sundry Debits written of 1.57 1.38
Fixed Assets Written of 0.58 2.02
Payments to the auditor as
(a) Auditor 1.14 1.07
(b) For tax audit matters 0.16 0.14
(c) For taxation matters 0.10 0.10
(d) For Company law matters 0.24 0.24
(e) For Other Certifcation work 0.48 0.42
(f) For reimbursement of expenses 0.07 0.06
Exchange Diference (Net) 15.49 18.91
Loss on Sale of Investments (Net) - 1.54
Loans to Subsidiaries Written Of - 7.91
Less : Adjusted against Provision for
doubtful Loans
- (7.91)
Goodwill on Amalgamation Written Of 45.49
Charge on account of alignment of
accounting policies of Amalgamated
Company with the Company - 10.82
- 56.31
Less : Amount Transferred from
Opening balance of Surplus in
Statement of Proft and Loss - (56.31)
- -
Miscellaneous Expenses 103.92 128.28
Total 1,702.54 1,476.77
29 Extraordinary Item
Proft on Sale of Investment in Joint
Venture
- 245.04
Total - 245.04
30 Scheme of Arrangement
i A Composite Scheme of Arrangement (“the Scheme”) between
Arvind Lifestyle Brands Limited (“ALBL”) and Arvind Retail Limited
(“ARL”) under Sections 391 to 394 of the Companies Act, 1956 for
amalgamation of ARL with ALBL has been sanctioned by the High
Court of Gujarat at Ahmedabad on 18th April 2013. The Scheme has
become efective from the appointed date 1st April, 2011 .
31 Earning Per Share (EPS) ` in Crores, unless otherwise stated
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Proft after Tax before Extra
Ordinary Item
248.41 244.69
Add : Extra Ordinary Item (Net of Tax
of ` 53.86 Crores) - 191.18
Proft after Extra Ordinary Item
available to equity shareholders
248.41 435.87
Weighted average no. of Equity Shares
For Basic EPS Nos. 258,043,069 257,983,329
For Diluted EPS Nos. 258,048,828 257,983,329
Nominal value of Equity
Shares
` 10.00 10.00
Basic Earning Per Share
Before Extra Ordinary Item ` 9.63 9.48
After Extra Ordinary Item ` 9.63 16.90
Diluted Earning Per Share
Before Extra Ordinary Item ` 9.63 9.48
After Extra Ordinary Item ` 9.63 16.90
Weighted average number of Equity Shares
No. of Shares for Basic EPS 258,043,069 257,983,329
Dilutive Efect of ESOS 5,759 -
No. of Shares for Diluted EPS after
considering dilute efect of
outstanding stock
258,048,828 257,983,329
32 Employee Share Based Payment
i The Company has formulated Employee Stock Option Scheme (ESOS
2008), the features of which are as follows :
Scheme ESOS 2008 Tranche - II
Date of Grant April 21, 2011
Number of options granted 200,000
Exercise Price per option ` 73.70
Date of vesting The vesting will be as under :
33.33% on April 30, 2012
33.33% on April 30, 2013
33.33% on April 30, 2014
Exercise Period Within 3 years from the date of
respective vesting.
Method of settlement Through allotment of one
Equity Share for each option
granted.
ii Intrinsic Value Method has been used to account for the employee
share based payment plans. The intrinsic value of each stock option
granted under the ESOS 2008 plan is ` Nil since the market price of
the underlying share at the grant date was same as the exercise price
and consequently the accounting value of the option (compensation
cost) is ` Nil.
ii Pursuant to the Scheme:
a. ARL has been amalgamated with ALBL with efect from 1st
April 2011, (the appointed date).
b. The amalgamation has been accounted for under the
“purchase method”. Accordingly, as on appointed date, all the
assets of ARL have been taken at their fair value and all the
liabilities including the contingent liabilities have been
accounted for on the basis of accrual and certainty as decided
by the management.
77
Notes to Consolidated Financial Statements
iii Further details of the stock option plans ESOS 2008 is as follows :
Particulars
ESOS 2008
Tranche-II
2012-13 2011-12
Options
Outstanding at the beginning of year 200,000 -
Granted During the year - 200,000
Lapsed during the year - -
Exercised during the year - -
Vested but not exercised at the end of year 66,660 -
Not vested at the end of year 133,340 200,000
Weighted Average Exercise Price per
Option
` 73.70 ` 73.70
iv The Black-Scholes-Mertons Option Pricing Model have been used to
derive the estimated value of stock option granted if the fair value method
to account for the employee share based payment plans were to be used.
The estimated value of each stock options and the parameters used for
deriving the estimated value of Stock Option granted under Black-
Scholes-Mertons Option Pricing Model is as follows:
Particulars
ESOS 2008
Tranche-II
Vesting on April 30,
2012 2013 2014
Estimated Value of Stock Options (`) 32.45 39.47 42.63
Share Price at Grant Date (`) 73.70 73.70 73.70
Exercise Price (`) 73.70 73.70 73.70
Expected Volatility (%) 62.46% 65.93% 62.19%
Dividend Yield Rate (%) 0.00% 0.00% 0.00%
Expected Life of Options(in years) 2.53 3.53 4.53
Risk Free Rate of Interest (%) 7.57% 7.61% 7.65%
v Had the compensation cost for the stock options granted under ESOS
2008 been determined on fair value approach, the Company’s net
proft and earning per share would have been as per pro forma
amounts indicated below:
Particulars
Year
ended
March
31, 2013
Year
ended
March 31,
2012
Proft before Extra Ordinary Item available to
equity shareholders
248.41 244.69
Less : Amortization of Compensation Cost
(pro forma)
0.23 0.43
Proft before Extra Ordinary Item available to
equity shareholders
248.18 244.26
Add : Extra Ordinary Item - 191.18
Proft after Extra Ordinary Item and amorti-
zation of Compensation Cost (pro forma)
248.18 435.44
Earning Per Share - Basic and Diluted
Proft before Extra Ordinary Item
- as reported 9.63 9.48
- pro forma 9.62 9.47
Proft after Extra Ordinary Item
- as reported 9.63 16.90
- pro forma 9.62 16.88
33 Segment Reporting
(A) Primary Segment (Business Segment) ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Segment Revenue
a) Textiles 3713.35 3422.63
b) Brands and Retail 1404.07 1323.51
c) Others 240.32 224.11
d) Unallocable - -
Total Sales 5357.74 4970.25
Less :Inter Segment Revenue 65.22 45.13
Net Sales 5292.52 4925.12
Segment Results
Segment Results before Interest & Finance Cost
a) Textiles 521.52 527.72
b) Brands and Retail 25.71 41.93
c) Others 22.58 18.44
d) Unallocable (6.14) (28.74)
Total Segment Results 563.67 559.35
Less : Interest & Finance Cost 315.34 309.10
Proft from Ordinary
Activities
248.33 250.25
Extra Ordinary Items (Net) - 245.04
Proft before Tax 248.33 495.29
Other Information
Segment Assets
a) Textiles 3652.29 3267.37
b) Brands and Retail 1195.04 943.23
c) Others 457.31 310.72
d) Unallocable 928.75 883.84
Total Assets 6233.39 5405.16
Segment Liabilities
a) Textiles 643.69 686.02
b) Brands and Retail 451.31 360.44
c) Others 240.07 76.56
d) Unallocable 172.76 117.13
Total Liabilities 1507.83 1240.15
Segment Depreciation/Impairment
a) Textiles 143.36 120.14
b) Brands and Retail 49.13 31.87
c) Others 5.58 3.24
d) Unallocable 6.23 6.14
Total Depreciation/Impairment 204.30 161.39
Capital Expenditure
a) Textiles 294.32 338.43
b) Brands and Retail 86.24 83.84
c) Others 23.85 6.51
d) Unallocable 0.61 13.40
Total Capital Expenditure 405.02 442.18
Non cash expenses other than Depreciation
a) Textiles 1.04 3.37
b) Brands and Retail 0.20 1.87
c) Others 1.58 0.69
d) Unallocable 0.12 14.53
Total Non cash expenses
other than Depreciation
2.94 20.46
78
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to Consolidated Financial Statements
34 Related Party Disclosures
As per the Accounting Standard on “Related Party Disclosures” (AS 18) notifed by Companies (Accounting Standards) Rules, 2006, the related
parties of the Company are as follows :
a Name of Related Parties and Nature of Relationship :
Shri Sanjay S. Lalbhai, Chairman and Managing Director Key Management Personnel
Shri Jayesh K. Shah, Director & Chief Financial Ofcer Key Management Personnel
Shri Punit S. Lalbhai Key Management Personnel
Shri Kulin S. Lalbhai Key Management Personnel
Shri Darshil J. Shah, Son of Director & Chief Financial Ofcer Relative of Key Management Personnel
Aura Securities Private Limited Company under the control of Key Managerial Personnel
Amplus Capital Advisors Private Limited Company under the control of Key Managerial Personnel
Note: Related party relationship is as identifed by the Company and relied upon by the Auditors.
b Transactions and Balances : ` in Crores
Nature of Transactions
Key Management Personnel
and relatives
Company under the control
of Key Managerial Personnel
Year ended Year ended
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Transactions
Sales of Goods and Materials 7.00 9.65
Remuneration 8.98 5.40
Other Income 0.02 -
Interest Expense 1.22 1.49
Loan Received/(Repaid) (Net) (13.96) 17.06
Balances as at year end
Trade and other payable 2.75 3.65
Payable in respect of loans 0.26 25.69
c Disclosure in respect of Related Party Transactions : ` in Crores
Nature of Transactions
Year ended
March 31, 2013 March 31, 2012
Sales of Goods and Materials
Aura Securities Private Limited 7.00 9.65
Remuneration
Shri Sanjay S. Lalbhai, Chairman and Managing Director 4.70 2.90
Shri Jayesh K. Shah, Director & Chief Financial Ofcer 3.03 2.24
Shri Punit S. Lalbhai 0.57 0.24
Shri Kulin S. Lalbhai 0.58 0.00
Shri Darshil J. Shah, Son of Director & Chief Financial Ofcer 0.10 0.02
Other Income
Amplus Capital Advisors Private Limited 0.02 -
Interest Expense
Aura Securities Private Limited 1.22 1.49
Loan Received/(Repaid) (Net)
Aura Securities Private Limited (13.96) 17.06
Trade and other payable
Aura Securities Private Limited 2.75 3.65
Payable in respect of Loans
Aura Securities Private Limited 0.26 25.69
(B) Secondary Segment (Geographical by Customers)
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Segment Revenue
a) In India 3820.22 3404.46
b) Outside India 1472.30 1520.66
Total Sales 5292.52 4925.12
Carrying Cost of Assets by location of Assets
a) In India 6120.05 5259.29
b) Outside India 113.34 145.87
Total 6233.39 5405.16
Addition to Assets
a) In India 402.54 442.18
b) Outside India 2.48 -
Total 405.02 442.18
Notes:
1. The Company has considered business segment as the primary
reporting segment. Segments have been identifed taking into
account the nature of the products and services, diferential
risks and returns, the Organizational structure and internal
reporting system. Consequently, the geographical segment
has been considered as a secondary segment.
2. The business sgement comprise of the following:
Textiles : Fabric, Yarn and Garments
Brands and Retail : Branded Garments and Apparels
Others : EPABX Systems (Electronics), Construction and
Project Activity
3. Geographical segment is considered based on sales within
India and outside India.
4. Intersegment Revenues are recognised at sales price.
79
Notes to Consolidated Financial Statements
35 Lease Rent
Operating Lease:
(A) Land is taken on lease period of 30 years with no option of renewal, no sub
lease of the land and having an escalation clause for increase in lease
rental by 5% after block of every 2 years.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
4.12 4.22
Not later than one year 0.11 0.10
Later than one year and not later than fve years 0.44 0.43
Later than fve years 3.57 3.69
Lease Payment recognised in Statement of
Proft and Loss
0.11 0.11
(B) Factory Building is taken on lease period of 18 to 20 years with no option of
renewal, no sub lease of the building and having an escalation clause for
increase in lease rental by 15% after every 3 years
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
89.44 72.51
Not later than one year 9.76 7.18
Later than one year and not later than fve years 36.70 23.54
Later than fve years 42.98 41.79
Lease Payment recognised in Statement of
Proft and Loss
8.94 7.50
(C) Plant & Machineries are taken on operating lease for a period of 5 to 8
years with the option of renewal
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
135.68 183.91
Not later than one year 30.53 35.40
Later than one year and not later than fve years 93.64 111.39
Later than fve years 11.51 37.12
Lease Payment recognised in Statement of
Proft and Loss
37.00 37.55
(D) Rent expense includes lease rental payments towards ofce premises,
showrooms and other facilities. Such leases are generally for a period of
11 to 108 months with the option of renewal against increased rent.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
128.05 100.20
Not later than one year 40.47 38.05
Later than one year and not later than fve years 62.01 53.09
Later than fve years 25.57 9.06
Lease Payment recognised in Statement of
Proft and Loss
112.97 78.28
(E) Rent Income includes Lease Rental received towards Plant & Machineries.
Such operating lease is generally for a period of 5 years with the option of
renewal on mutual consent and premature termination of agreement
through agreed notice period.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments under
non-cancellable operating leases:
15.71 -
Not later than one year 1.36 -
Later than one year and not later than fve years 5.42 -
Later than fve years 8.93 -
Lease income recognised in Statement of
Proft and Loss
0.57 0.11
(F) Rent Income also includes Lease Rental received towards Building. Such
operating lease is generally for a period upto 36 months.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments under
non-cancellable operating leases:
0.29 0.30
Not later than one year 0.14 0.12
Later than one year and not later than fve years 0.15 0.18
Later than fve years - -
Lease income recognised in Statement of
Proft and Loss
0.51 0.43
36 Impairment of Fixed Assets
In accordance with the Accounting Standard (AS -28) on ‘Impairment of
Assets’ notifed by Companies (Accounting Standards) Rules, 2006, the
Company has reassessed its fxed assets and is of the view that no further
impairment/reversal is considered to be necessary in view of its expected
realisable value.
37 Early adoption of AS 30, Financial Instruments :Recognition and
Measurement
(a) Consequent to the Announcement of the Institute of Chartered
Accountants of India (ICAI), the Company had chosen to early adopt
‘Accounting Standard – 30, Financial Instruments: Recognition and
Measurement’ in its entirety, read with the clarifcation issued on
application of AS -30. Accordingly, the Company has changed the
designation and measurement of all its signifcant fnancial assets and
liabilities. All the fnancial assets and fnancial liabilities and derivatives
have been remeasured at their respective fair values or at amortized
cost as against cost except for those items whose accounting
treatment is covered by the existing standards notifed by Companies
(Accounting Standards) Rules, 2006.
(b) As a result, as on Balance Sheet date, Long Term Borrowings are lower
by ` 4.20 Crores, (Previous year higher by ` 1 Crores) and Hedge
Reserve account is debited by ` 23.64 Crores (Previous year ` 98.25
Crores) on account of fair valuation of outstanding derivatives.
38 Foreign Exchange Diferences
As per the notifcation issued by the Ministry of Corporate Afairs dated
31st March, 2009 as amended from time to time, the Company had already
exercised the option for accounting of exchange rate diferences with
efect from April 1, 2007.
Consequent to the adoption of that option:
(a) Exchange rate diferences of long-term foreign currency loans which
are related to acquisition of depreciable fxed assets have been
added to or deducted from the cost of the assets and depreciated
over the balance life of the assets and;
(b) Exchange rate diferences on other long-term foreign currency
loans have been transferred to ‘Foreign Currency Monetary Item
Translation Diference Account’ to be amortized over the balance
period of loans or up to 31st March, 2020 whichever is earlier.
As a result:
(a) An amount of ` 3.75 Crores being the exchange rate loss for the year
(Previous year ` 0.30 Crores) has been adjusted against the fxed assets.
(b) An amount of ` 4.90 Crores being the exchange rate loss for the year
(Previous year ` 4.19 Crores) remains to be amortized as at the balance
sheet date.
80
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to Consolidated Financial Statements
39 Disclosure in respect of Derivative Instruments and Unhedged Foreign Currency Transactions
a Category-wise Quantitative data about derivative instruments outstanding:
Particulars Currency
As at 31st March, 2013 As at 31st March, 2012
In Mn Avg. Ex.
Rate
` in Crores In Mn Avg. Ex.
Rate
` in Crores
Forward Sales USD 60.71 52.3898 318.06 206.87 49.1051 1,015.84
EUR 0.81 72.7398 5.88 1.25 70.3030 8.78
Forward Purchase USD 10.08 55.4186 55.86 34.03 51.1847 174.21
JPY 193.98 0.6141 11.91 - - -
Interest Swap USD 10.00 56.7325 56.73 - - -
Option Deals USD - - - 66.00 50.6136 334.05
b Unhedged Foreign Currency Transactions:
Particulars Currency
As at 31st March, 2013 As at 31st March, 2012
In Mn ` in Crores In Mn ` in Crores
Payable towards royalty USD 1.45 7.89 1.03 6.05
SEK 0.29 0.24 0.36 0.32
EUR 0.02 0.12 - -
Payable for purchase of goods USD 17.17 90.87 0.59 3.01
GBP 0.25 2.09 - -
EUR 0.39 2.73 0.16 1.10
Receivable on sale of goods USD 0.83 4.51 0.84 4.28
Payable towards Foreign Currency Loans USD 3.65 19.80 1.05 5.33
GBP 0.09 0.72 - -
40 Disclosure in respect of Construction/Job work Contracts ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Amount of Contract Revenue recognized 29.89 41.33
Disclosure in respect of contracts in progress at the reporting date
Contract cost incurred and recognised profts less recognised losses up to the reporting date 29.89 41.33
Advance received from customers 6.03 19.50
Due from customers 1.61 5.97
Due to customers - 0.08
41 Capital Reserve on Consolidation
Capital Reserve on Consolidation includes the losses in the value of the investments in subsidiary companies provided by the Arvind Limited
(Holding Company) in accordance with the scheme of arrangement sanctioned in earlier years.
42 Figures less than ` 50,000/- which are required to be shown seperately, have been shown as actual in brackets.
43 Previous year fgures have been regrouped or recast wherever necessary to make them comparable with those of the current year.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
81
NOTE UNDER SUB-SECTION (1) OF SECTION 212
The Ministry of Corporate Afairs has, vide its General Circular No. 2/2011 (No:5/12/2007-CL-III) dated 8th February,2011,granted a general exemption to
the Companies under Section 212(8) of Companies Act,1956, relating to the statements to be attached in respect of the subsidiary companies,with the
fnancial statements of the Companies. As required, the information in aggregate for each of the subsidiary Company is furnished as under.
Shareholders interested in obtaining the statements of Company’s interest in the subsidiaries or stand-alone fnancial statements of the subsidiaries
may obtain it by writing it to the Company.
The information in aggregate for each subsidiary including subsidiaries of subsidiaries in terms of direction
u/s 212 (8) of the Companies Act,1956 :
` in crores
Sr.
no.
Name of Subsidiary Capital Reserves
Total
Assets
Total
Liabilities
Details of
Investment
Turnover
Proft/
(Loss)
before
Taxation
Provision
for
Taxation
Proft/
(Loss)
after
Taxation
Proposed
Dividend
(a) (b) (c) (d) (e) (f) (g) (h) (I) (j)
1 Asman Investments Limited 0.08 (20.98) 4.39 25.29 [1] 7.20 0.89 0.30 0.59 Nil
2 The Anup Engineering Limited 3.40 33.83 66.39 29.16 [2] 73.45 7.00 2.06 4.94 Nil
3 Arvind Lifestyle Brands Limited 27.34 221.61 1089.74 840.79 [3] 1285.47 (19.22) (6.13) (13.09) Nil
4 Arvind Accel Limited 0.05 (12.74) 18.42 31.11 [2] 4.85 (7.85) (0.04) (7.81) Nil
5 Syntel Telecom Limited 0.05 (1.41) 0.31 1.67 [2] 0.02 (0.03) 0.00 (0.03) Nil
6 Arvind Infrastructure Limited 1.05 15.03 165.81 149.73 [4] 18.78 3.21 (0.03) 3.24 Nil
7 Arvind Brands and Retail Limited 10.45 239.79 285.69 35.45 [2] 0.00 0.19 0.00 0.19 Nil
8 Arvind PD Composites Private Limited 0.12 8.61 25.04 16.31 [2] 2.67 (1.57) 0.00 (1.57) Nil
9 Arvind Envisol Pvt. Ltd. 0.01 0.96 7.25 6.28 [2] 17.20 1.43 0.46 0.97 Nil
10 Arvind Goodhill Suit Manufacturing
Private Limited
0.02 (0.06) 2.34 2.38 [2] 0.00 (0.07) 0.00 (0.07) Nil
11 Arvind Spinning Park Pvt. Ltd. 0.01 0.00 0.01 0.00 [2] 0.00 0.00 0.00 -0.00 Nil
12 Arvind Processing Park Pvt. Ltd. 0.01 0.00 0.01 0.00 [2] 0.00 0.00 0.00 -0.00 Nil
13 Arvind OG Nonwovens Pvt. Limited 0.01 (0.20) 0.01 0.20 [2] 0.00 (0.20) 0.00 (0.20) Nil
14 Arvind Hebbal Homes Private Limited 0.01 0.39 39.92 39.52 [2] 0.00 0.01 0.00 0.01 Nil
15 Arvind Worldwide Inc. USA 2.19 0.51 4.70 2.00 [2] 8.60 0.36 0.01 0.35 Nil
16 Arvind Worldwide (M) Inc. Mauritius 23.87 (28.29) 1.66 6.08 [2] 0.00 (0.04) 0.00 (0.04) Nil
17 Arvind Overseas (M) Limited, Mauritius 42.35 (42.17) 0.30 0.12 [2] 0.00 0.00 0.00 0.00 Nil
18 Arvind Spinning Limited, Mauritius 14.63 (14.53) 0.10 0.00 [2] 0.00 0.00 0.00 0.00 Nil
19 Arvind Textile Mills Limited, Bangladesh 0.20 (5.65) 2.50 7.95 [2] 0.00 (1.67) 0.00 (1.67) Nil
20 Arvind Niloy Exports Pvt. Ltd.,
Bangladesh
0.25 (0.13) 0.28 0.16 [2] 0.00 (0.19) 0.00 (0.19) Nil
` in crores
[1] Not applicable being Investment Subsidiary
[2] These Companies have no Investments.
[3] Investment in Govt. Securities 0.02
[4] Investment in Partnership Firm 26.00
82
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Location & Sites
Lifestyle Fabrics – Denim
Arvind Limited
Naroda Road
Ahmedabad – 380 025
Gujarat, India
Tel : +91-79-30138000 / 30138181
Fax : +91-79-30138671
E-mail : [email protected]
Lifestyle Fabrics – Voiles
Ankur Textiles
Outside Raipur Gate,
Ahmedabad – 380 022
Gujarat, India
Tel : +91-79-30137200 / 30137231
Fax : +91-79-30137350
E-mail : [email protected]
Lifestyle Fabrics – Shirting, Khakis and
Knitwear
Arvind Limited
PO Khatrej, Taluka Kalol
Dist. Gandhinagar – 382 721
Gujarat, India
Tel : +91-2764-395000
Fax : +91-2764-395040
E-mail : [email protected]
Lifestyle Apparel – Knits
Arvind Limited
PO Khatrej, Taluka Kalol
Dist. Gandhinagar – 382 721
Gujarat, India
Tel : +91-2764-395410
E-mail : [email protected]
Lifestyle Apparel – Jeans
Arvind Limited
#26/2 ,27/2, Kenchenahalli
Mysore Road
Near Bangalore University
Bangalore – 560 059
Tel : +91-80-33719000
E-mail : [email protected]
Lifestyle Apparel – Shirts
Arvind Limited
No.23/1, Sonnenahalli Village
Sitarampalya Cross
ITPL Road, Brookfeld, Mahadevpura Post
Bangalore - 560048, Karnataka, India
Tel : +91-80-33717000
E-mail : [email protected]
Subsidiaries & Joint Ventures
Arvind Lifestyle Brands Limited
8th Floor, Du Park Trinity
17, M. G. Road, Bangalore - 560 001
Tel : +91-80-41550650
Fax : +91-80-41550651
E-mail : [email protected]
Arvind Goodhill Suit Manufacturing Private
Limited
Plot No.50 B1 & 50 C1, Survey No. 299,
Bommasandra Industrial Area,
Bangalore - 560099
E-mail : [email protected]
The Anup Engineering Limited
Behind 66KV Electric Sub Station
Odhav Road, Ahmedabad-382415
Gujarat, India
Tel : +91-79-22870622-23
Fax : +91-79-22870642
E-mail : [email protected]
Arvind Infrastructure Limited
24, Govt. Servant’s Society
Adj. Municipal Market
C. G. Road, Ahmedabad-380 009
Tel : +91-79-30137000
Fax:+91-79-30137021
E-mail : [email protected]
Arvind PD Composites Pvt. Limited
Village: Moti Bhoyan Ta: Kalol
Dist: Gandhinagar, Gujarat –382721
Tel :02764 396223-02764 395000
Fax: 02764-395043
E-mail : [email protected]
Arvind Envisol Private Limited
Arvind Mill Premises, Naroda Road,
Ahmedabad – 380 025
Tel: 079-3013456 / 8454
Fax: 079-30138677
E-mail : [email protected]
Arvind and Smart Value Homes LLP
1008-1009 Venus Atlantis,
Opp. Safal Pegasus,
100 ft. Ring Road, Prahladnagar,
Ahmedabad - 380015
Tel : +91-79-30137000
Fax:+91-79-30137021
E-mail : corporateinfo@smartvaluehomes.
in
Tommy Hillfger Arvind Fashion
Private Limited
4, Brunton First Cross Road
Bangalore - 560 025
Tel : +91-80-49363100
Fax : +91-80-41124092
Arya Omnitalk Wireless Solutions Private
Limited
3rd Floor, Ling Field Plaza
S.No.66/67, Salunke Vihar Road,
Wanowrie, Pune – 411 040
Tel : +91-20-26851072, 40118100
Fax : +91-20-26851077
E-mail:[email protected]
Overseas Ofces
Arvind Worldwide Inc.
130, West, 42nd Street,
Suite 603, 6th Floor,
New York, NY 10036, USA
Tel +(212)768-4815X104
E-mail : [email protected]
Arvind Limited
Plot No.221
Bir Uttam Mir Shawkat Road
(Gulshan – Tejgaon Link Road)
Tejgaon I/A, Dhaka – 1208
Bangladesh
Tel : +880-2-9887123 / 124
E-mail : [email protected]
Arvind Limited
Unit 1705, 17th Floor, Trendy Centre
682-684 Castle Peak Road
Cheung Sha Wan
Kowloon, Hongkong
Tel : +852 66271025
Fax : +852 27820090
E-mail : [email protected]
83
FORM OF PROXY
ARVIND LIMITED
NARODA ROAD, AHMEDABAD - 380 025
I/We of
in the District of
being a member / members of the above named Company hereby appoint of
in the District of or failing him
of in the District of
or failing him of
in the District of as my / our
proxy to vote for me / us on my / our behalf at the Annual General Meeting of the Company to be held on Monday, the 29
th
July, 2013 and
at any adjournment thereof.
Signed this day of 2013
Signature
L.F.No.
* Depository : NSDL/CDSL
* DP.ID:
* Client ID :
* For Shares held in Electronic Form
No. of Share(s) held
Notes :
(1) A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself.
(2) A proxy need not be a member.
(3) The completed form should be deposited at the Registered Ofce of the Company, Naroda Road, Ahmedabad – 380 025 not less than
48 hours before the time for holding the meeting.
ARVIND LIMITED
Naroda Road, Ahmedabad – 380 025.
ATTENDANCE SLIP
I hereby record my presence at the Annual General Meeting held at Thakorebhai Desai Hall, Near Law Garden, Ellisbridge,
Ahmedabad – 380 006 on Monday, the 29
th
July, 2013 at 9.30 a. m.
1. L.F.NO.
2. * DePOSITORy : NSDL/CDSL
3. * D.P.ID
4. * CLIENT ID
* FOR SHARES HELD IN ELECTRONIC FORM
5. FULL NAMe OF THe SHAReHOLDeR :
(IN BLOCK LETTERS)
6. NO. OF eQUITy SHAReS HeLD :
7. SIGNATURE OF THE SHAREHOLDER
OR PROXy ATTeNDING :
(PLEASE GIVE FULL NAME OF THE 1ST JOINT HOLDER)
MR./MRS./MISS
(TO BE USED ONLY WHEN FIRST NAMED SHAREHOLDER IS NOT ATTENDING)
NOTe : PLeASe FILL IN THIS ATTeNDANCe SLIP AND HAND IT OVER AT THE ENTRANCE OF THE HALL.
AFFIX
15 Paise
REVENUE
STAMP
84
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
doc_910850463.pdf
The Audit Committee of the Company comprises of 3 members, all of whom are Non-Executive Independent Directors. Mr. Munesh Khanna, an Independent Director acts as Chairman of the Committee. The Committee members are professionals having requisite experience in the fields of Finance and Accounts, Banking and Management.
Directors
Mr. Sanjay S. Lalbhai Chairman & Managing Director
Mr. Punit S. Lalbhai Executive Director
Mr. Kulin S. Lalbhai Executive Director
Mr. Jayesh K. Shah Director & Chief Financial Ofcer
Mr. Sudhir Mehta
Dr. Bakul Dholakia
Mr. Munesh Khanna
Ms. Renuka Ramnath
Mr. Prabhakar Dalal Nominated by Export-Import Bank of India
Company Secretary
Mr. R.V. Bhimani
Bankers
State Bank of India
Bank of Baroda
UCO Bank
State Bank of Patiala
HDFC Bank Ltd.
Standard Chartered Bank
ICICI Bank Ltd.
Export-Import Bank of India
Axis Bank Ltd.
State Bank of Hyderabad
IDBI Bank Ltd.
Canara Bank
Auditors
Sorab S. Engineer & Co.
Chartered Accountants
Ismail Building
381, Dr. D. Naoroji Road
Fort, Mumbai-400 001.
Registered Ofce
Naroda Road
Ahmedabad - 380025
Gujarat, India.
CONTENTS
Notice .............................................................................................. 1
Directors’ Report ...........................................................................2
Corporate Governance Report .................................................. 5
Management Discussion and Analysis .................................... 18
Strategy & programmes for
“Corporate Social Responsibility” 2012-13 ............................ 24
Auditors’ Report ..........................................................................25
Balance Sheet .............................................................................. 28
Proft & Loss Account ................................................................ 29
Cash Flow Statement ................................................................. 30
Notes to Financial Statements ................................................. 32
Consolidated Financial Statements ........................................ 57
Location & Sites .......................................................................... 82
REGISTRARS AND TRANSFER AGENTS
Sharepro Services (India) Private Limited
416-420, 4th Floor, Devnandan Mall
Opp. Sanyas Ashram, Ellisbridge
Ahmedabad -380 oo6.
Phone Nos.: 079-26582381 to 84
Fax No.: 079-26582385
E-mail: [email protected]
1
N O T I C E
NOTICE is hereby given that the Annual General Meeting of the members
of the Company will be held on Monday, the 29
th
July, 2013 at 9:30 a.m. at
Thakorebhai Desai Hall, Near Law Garden, Ellisbridge, Ahmedabad- 380 006
to transact the following Business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Statements of Accounts
for the fnancial year ended on 31
st
March, 2013 and the Reports of the
Directors and Auditors thereon.
2. To declare a dividend on equity shares.
3. To appoint a Director in place of Dr. Bakul Dholakia, who retires by
rotation in terms of Article 129 of the Articles of Association of the
Company and being eligible, ofers himself for reappointment.
4. To appoint a Director in place of Ms. Renuka Ramnath, who retires by
rotation in terms of Article 129 of the Articles of Association of the
Company and being eligible, ofers herself for reappointment.
5. To appoint auditors to hold ofce from the conclusion of this Annual
General Meeting until the conclusion of the next Annual General
Meeting and authorize the Board to fx their remuneration.
Registered Ofce: By Order of the Board
Naroda Road
Ahmedabad-380025 SANJAY S. LALBHAI
CHAIRMAN & MANAGING DIRECTOR
Date: 16
th
May, 2013
NOTES
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS
ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD
OF HIMSELF/HERSELF AND A PROXY NEED NOT BE A MEMBER.
2. Proxies, in order to be efective, should be duly stamped, completed,
signed and deposited at the Registered Ofce of the Company not
less than 48 hours before the meeting.
3. Members are requested to bring their copies of the Annual Report to
the meeting. The Members/Proxies should bring the Attendance Slip
sent herewith duly flled in for attending the meeting.
4. Members intending to require information about Accounts to be
explained in the Meeting are requested to inform the Company at
least 7 days in advance of the Annual General Meeting.
5. The members, holding shares in physical form, are requested to
intimate any change in their addresses or bank details to the
Company or its Registrar and Transfer Agent (RTA) viz. Sharepro
Services (India) Pvt. Ltd., Unit: Arvind Limited, 416-420, 4
th
Floor,
Devnandan Mall, Opp. Sanyas Ashram, Ellisbridge, Ahmedabad - 380
006. Those holding shares in dematerialized form may intimate any
change in their addresses or bank details / mandates to their
Depository Participants (DP) immediately. Members holding shares
in dematerialized form may note that bank details registered against
their respective depository accounts will be used by the Company
for payment of dividend. The Company or its RTA can not act on any
request directly received from any member holding shares in
dematerialized form for any change in such details. Such changes are
to be advised only to the DP of the members.
6. The Register of Members and Share Transfer Books of the Company
will remain closed from Monday, the 22
nd
July, 2013 to Monday, the
29
th
July, 2013 (both days inclusive).
7. The dividend on equity shares for the year 31
st
March, 2013, if
declared at the meeting, will be paid / dispatched on due date
to those members whose names appear on the Company’s Register
of Members on 29
th
July, 2013 or on records of National Securities
Depository Limited and Central Depository Services (India) Limited
as benefcial owners as on 22
nd
July,2013.
8. Pursuant to Section 205C of the Companies Act, 1956, all unclaimed
dividends up to the fnancial year ended 31
st
March, 1998 and for the
fnancial year 2004-05 have been transferred to the Investor
Education and Protection Fund (IEPF) of the Central Government.
The Company did not declare any dividends on equity shares for the
fnancial years 1998-1999 to 2003-2004. Unclaimed and unpaid
dividend for the fnancial year 2005-06 will be transferred to this
fund in the month of November, 2013. Those members who have so
far not encashed their dividend warrants for the fnancial year 2005-
06 are requested to approach the Company or RTA for payment
thereof. Kindly note that once unclaimed and unpaid dividend is
transferred to the Investor Education and Protection Fund, members
will not be entitled to claim such dividend.
9. The Annual Report of the Company for the year ended 31st March,
2013 is uploaded on the Company’s website www.arvind.com and
may be accessed by the members.
Registered Ofce: By Order of the Board
Naroda Road
Ahmedabad-380 025 SANJAY S. LALBHAI
CHAIRMAN & MANAGING DIRECTOR
Date : 16
th
May, 2013
2
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
DIRECTORS’ REPORT
To the Members,
Your Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1
st
April, 2012 to 31st
March, 2013.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
` in Crores
2012-2013 2011-2012
Turnover & Operating Income 3780.29 3494.12
Proft before Finance Costs,
Depreciation and Amortisation
Expenses, Extraordinary Items & Tax
Expenses
680.15 637.05
Less : Finance costs 268.44 270.25
Proft before Depreciation and
Amortisation Expenses, Extraordinary
Items & Tax Expenses
411.71 366.80
Less : Depreciation and Amortisation Expenses 150.49 130.51
Proft before Extraordinary Items and
Tax Expenses
261.22 236.29
Add : Extraordinary Items 0.00 251.80
Proft Before Tax 261.22 488.09
Less : Current Tax 53.79 85.15
Add: MAT Credit Entitlement (53.79) (31.29)
Proft for the year 261.22 434.23
Balance of Proft brought forward 799.67 450.12
Add : Proft of Amalgamated Company 0.00 1.62
Less: Amount transferred to Statement of
Proft and Loss on account of Amalgamation
0.00 56.31
Balance available for appropriation 1060.89 829.66
Less : Appropriation :
Transfer to General Reserve 20.00 NIL
Proposed Dividend on Equity Shares 42.58 25.80
Tax on Dividend 7.24 4.19
Closing Balance 991.07 799.67
2. OPERATIONS
The macroeconomic environment posed many challenges for the
company during the year under review. On domestic front, stagnant
economy, high infation and higher interest rates dampened the
consumer sentiments. On global front Euro Zone continued to be in
turmoil. On the top of challenging macroeconomic scenario, our
company witnessed unprecedented event of strike at two of its
manufacturing plants in the month of June, 2012 leading to loss of
production. It is heartening to note that despite such a challenging
environment, our Company has closed the fnancial year 2012-13 with
8% growth in sales and 7% growth in Operating Earnings before
Interest, Depreciation and Taxes. (Operating EBITDA). PAT
(excluding Exceptional Income) has shown a growth of 11% compared
to the previous year.
The growth in revenue was mainly led by woven fabric division which
registered growth of 28% in volume and 30% in revenue. The
Operational Excellence Drive to improve the productivity has
resulted into higher operating margins for woven business. While
denim fabric volume was lower by 7% on account of loss of
production during strike period, it has maintained its proftability
under highly competitive market scenario. Denim Business continues
with its strategy of improving product and customer mix so as to
achieve higher contribution per meter.
A detailed analysis of the fnancial results is given in the Management
Discussion and Analysis report which forms part of this report.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of ` 1.65 per
equity share of `10 each.
4. FINANCE
The Company has repaid the installments of Term Loans amounting
to ` 195 crores during the current year.
The Company has also made fresh borrowings of ` 434 Crores for
funding capital expenditure and other requirements. Long Term
Debt of the Company stands to ` 1104 crores as on 31
st
March, 2013.
5. EMOLOYEE STOCK OPTION SCHEME (ESOS)
The Company has instituted the Employees Stock Option Scheme-
(ESOS) to grant equity based incentives to certain eligible employees
and directors of the Company and its subsidiary companies. 27.50
lacs and 2.00 lacs options were granted to certain eligible employees
and directors of the company and its subsidiary companies by the
Remuneration Committee at an exercise price of `14.65 per option
and `73.70 per option respectively, representing one share for each
option upon exercise. The details as per the requirements of SEBI
Guidelines are annexed and form part of this report.
6. SUBSIDIARIES
A detailed discussion on subsidiary companies and their performance
during the year is contained in the Management Discussion and
Analysis Report which forms part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, the Company has prepared
Consolidated Financial Statements of the Company and its
subsidiaries are included in the Annual Report.
7. DIRECTORS
Mr. G.M.Yadwadkar, a Nominee Director of IDBI Bank Ltd. has ceased
to be a Director with efect from 1
st
August, 2012 due to withdrawal of
his nomination by IDBI Bank Ltd. The Board places on record its deep
sense of appreciation for the valuable services rendered by Mr.
G.M.Yadwadkar during his tenure as Director.
Mr. Punit Lalbhai and Mr. Kulin Lalbhai were appointed as Additional
Directors of the Company with efect from 26
th
July, 2012. They were
also appointed as Executive Directors of the Company for a period
commencing from 1
st
August, 2012 to 31st July, 2017.
At the ensuing Annual General Meeting, Dr. Bakul Dholakia and Ms.
Renuka Ramnath, Directors of the Company, retire by rotation, but
being eligible, ofer themselves for re-appointment.
3
8. CORPORATE GOVERNANCE
Your Company is committed to the tenets of good Corporate
Governance and has taken adequate steps to ensure that the
requirements of Corporate Governance as laid down in Clause 49 of
the Listing Agreement are complied with.
A separate report on Corporate Governance and a Management
Discussion and Analysis Report are being published as a part of the
Annual Report of the Company.
The Auditors of the Company have certifed that conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement are complied by the Company and their Certifcate is
annexed to the Report on Corporate Governance.
9. RESPONSIBILITY STATEMENT
The Directors confrm that:
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed. There are no
material departures from the applicable accounting standards;
2. such accounting policies have been selected and applied
consistently and such judgments and estimates have been
made as are reasonable and prudent so as to give a true and fair
view of the state of afairs of the Company at the end of the
fnancial year ended on 31
st
March, 2013 and of the proft of the
Company for that period;
3. proper and sufcient care has been taken for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the
assets of the Company and for preventing and detecting fraud
and other irregularities; and
4. the statements of accounts for the year ended on 31
st
March,
2013 have been prepared on a going concern basis.
10. FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the
year. There are no outstanding and overdue deposits as at 31
st
March,
2013.
11. INFORMATION REGARDING CONSERVATION OF ENERGY
ETC. AND EMPLOYEES
Information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 and under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975, as amended from time to time, forms part
of this report. However, as per the provisions of Section 219 (1)(b)
(iv), the report and accounts are being sent to all shareholders of the
Company excluding the information relating to conservation of
energy, technology absorption and foreign exchange earning and
outgo, and the statement of particulars of employees. Any
shareholder interested in obtaining such particulars may inspect the
same at the Registered Ofce of the Company or write to the
Secretary for a copy.
12. AUDITORS
The Auditors, Sorab S. Engineer & Co., retire and ofer themselves for
re-appointment. It is proposed that Sorab S. Engineer & Co., be re-
appointed as auditors of the Company. You are requested to appoint
the auditors and fx their remuneration.
13. ACKNOWLEDGEMENT
Your Directors would like to appreciate the eforts of the Company’s
employees for their continued co-operation and unstinted support
extended to the company. The support of all lenders including
Financial Institutions, Commercial Banks, Overseas Banks etc. and
vendors, investors, business associates, Government of India and
State Government and various departments and agencies has also
been invaluable to the Company’s performance and your Directors
take this opportunity to appreciate it deeply.
By Order of the Board
Date: 16
th
May, 2013 Sanjay S. Lalbhai
Place: Ahmedabad. Chairman and Managing Director
4
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Annexure to the Directors’ Report
Disclosures under Clause 12.1 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 :
1 Number of Options granted - ESOS 2008 Tranche-II 2,00,000 options
2 Pricing Formula Market Price as defned under SEBI guidelines.
3 Number of Options vested 66,660
4 Number of Options exercised NIL
5 Total number of shares arising out of exercise of Options NIL
6 Number of Options lapsed NIL
7 Variation in the terms of the Options No variations made.
8 Money realized by exercise of Options NIL
9 Total number of Options in force 2,00,000 options.
10 Employee wise details of options granted to -
a Senior Management Personnel Nil
b Any other employee who receives a grant in any one year of option amounting to
5% or more of options granted during the year
Nil
c Identifed employees who were granted options, during any one year, equal
to or exceeding 1% of the issued capital (excluding outstanding warrants and
conversions) of the company at the time of grant
Nil
11 Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option
calculated in accordance with Accounting Standard (AS) 20 – Earnings Per Share
` 10.11
12 Where the company has calculated the employee compensation cost using
the intrinsic value of the stock options, the diference 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 diference on profts and on EPS of the company shall also be
disclosed.
Company accounts for options under the intrinsic value
method. Since options are granted at market price, the
intrinsic value is Nil.
However, if fair value of the options (computed using
the Black Scholes Option Pricing Model) was to be used
for calculating the accounting value of the option, the
compensation cost would have been ` 23.00 lacs and the
profts would have been lesser by ` 23.00 lacs.
Basic and diluted EPS would have reduced to ` 10.12 and
` 10.11 respectively.
13a Weighted average exercise prices for options whose exercise price –
i. equals market price
ii. exceeds market price
iii. is less than market price
` 73.70
Nil
Nil
13b Weighted fair values for options whose exercise price –
i. equals market price
ii. exceeds market price
iii. is less than market price
` 38.18
Nil
Nil
14 A description of the method and signifcant assumptions used during the year
to estimate the fair values of options, including the following weighted-average
information: –
i. risk free rate
ii. expected life
iii. expected volatility
iv. expected dividends and
v. the price of the underlying share in the market at the time of option grant.
Black Scholes Option Pricing Model. The assumptions are as
under –
7.57%
4.01 years
62.46%
0.00%
` 73.70
5
CORPORATE GOVERNANCE REPORT
COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE
Corporate governance at Arvind is a value-based framework to manage our Company afairs in a fair and transparent manner. As a responsible corporation,
we use this framework to maintain accountability in all our afairs and employ democratic and open processes. We have evolved guidelines and best
practices over the years to ensure timely and accurate disclosure of information regarding our fnancials, performance, leadership and governance of
the Company.
Our corporate governance philosophy is based on the following principles :
• Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law.
• Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose.
• Make a clear distinction between personal conveniences and corporate resources.
• Communicate externally, in a truthful manner, about how the Company is run internally.
• Have a simple and transparent corporate structure driven solely by business needs.
• The Management is the trustee of the shareholders’ capital and not the owner.
The Board of Directors (‘the Board’) is at the core of our corporate governance practice and oversees how the Management serves and protects the
long-term interests of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards
of corporate governance. The majority of our Board, 5 out of 9, are independent members. Given below is the report on Corporate Governance at Arvind.
BOARD OF DIRECTORS
Composition of the Board
The Board has 9 Directors, comprising of 1 Chairman and Managing Director, 3 Executive Directors viz. 1 Director and Chief Financial Ofcer and 2 Executive
Directors and 5 Non- Executive Directors. The Non-Executive Directors who are also Independent Directors are leading professionals from varied felds
who bring in independent judgment to the Board’s discussions and deliberations. The following is the Composition of the Board as at 31
st
March, 2013:
Sr.
No.
Name of Director Executive/Non-executive/Independent No. of other
Directorships in Public
Limited Companies
No. of other Board/
Committees of which
Member / Chairman
1 Mr. Sanjay S. Lalbhai Executive-Chairman & Managing Director 6 -
2 Mr. Jayesh K. Shah Executive-Director and Chief Financial Ofcer 8 -
3 Mr. Punit S. Lalbhai* Executive-Director 1 -
4 Mr. Kulin S. Lalbhai** Executive-Director - -
5 Mr. Sudhir Mehta Non-executive-Independent Director 4 2 as Chairman and 1 as Member
6 Dr. Bakul Dholakia Non-executive-Independent Director 2 4 as Chairman
7 Mr. Prabhakar Dalal Non-executive-Independent &
Nominee Director of EXIM Bank of India
2 -
8 Mr. Munesh Khanna Non-executive-Independent Director 2 1 as Member
9 Ms. Renuka Ramnath Non-executive-Independent Director 3 -
10 Mr. G. M. Yadwadkar+ Non-executive-Independent & Nominee Director of
IDBI Bank Ltd.
- -
* Mr. Punit S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
** Mr. Kulin S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
Board Agenda
The annual calendar of Board and Committee Meetings is agreed upon at the beginning of each year. Meetings are governed by a structured Agenda and
a Board member may bring up any matter for consideration of the meeting in consultation with the Chairman. Agenda papers are generally circulated to
the Board members at least 4-5 working days in advance. Detailed presentations are made at the meetings on all major issues to enable the Board to take
informed decisions. An indicative list of the information placed before the Board during the year is as under:
• Annual Budgets and updates thereon.
• Capital Expenditure Proposals and review of their implementation.
• Quarterly and Annual Results.
• Product-wise Business Performance.
• Business Presentations covering Production, Marketing, Raw Materials, Sales, etc.
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A R V I N D L I M I T E D 82
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ANNUAL REPORT 2012-13
• New Projects and Joint Ventures.
• Sales of Material Nature of Investments, Subsidiaries, Assets, etc. which are not in the normal course of business.
• Performance of Subsidiaries.
• Business Restructuring.
• Legal Proceedings involving the Company.
• Minutes of Meetings of Audit Committee, Management Committee, Remuneration Committee and Investors’ Grievance Committee.
• Materially Important Show Cause Notices, Non-Compliances, if any, etc.
• Other relevant information pertaining to the Company including information detailed in Clause 49 of the Listing Agreement.
Meetings and Attendance
During the year, the Board of Directors met 4 times on 9
th
May, 2012, 26
th
July, 2012, 23
rd
October, 2012 & 30
th
January, 2013. The gap between two Board
Meetings was within the maximum time gap prescribed in Clause 49 of the Listing Agreement. The Attendance of Directors at these Board Meetings and
at the last Annual General Meeting was as under:
Sr.
No.
Name of Director Number of Board Meetings held during the
period when the Director was on the Board
Number of Board
Meetings attended
Whether present at the
previous AGM
1 Mr. Sanjay S. Lalbhai 4 4 Yes
2 Mr. Jayesh K. Shah 4 4 Yes
3 Mr. Punit S. Lalbhai* 3 1 Yes
4 Mr. Kulin S. Lalbhai** 3 3 Yes
5 Mr. Sudhir Mehta 4 3 Yes
6 Dr. Bakul Dholakia 4 4 Yes
7 Mr. Prabhakar Dalal 4 4 No
8 Mr. Munesh Khanna 4 3 No
9 Ms. Renuka Ramnath 4 2 No
10 Mr. G. M. Yadwadkar+ 2 0 No
* Mr. Punit S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
** Mr. Kulin S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
Committees of the Board
The Board of Directors has constituted 4 Committees of the Board viz.
• Audit Committee
• Remuneration Committee
• Investors’ Grievance Committee and
• Management Committee
The Board determines the terms of reference of these Committees from time to time. Meetings of these Committees are convened by the respective
Committee Chairman/Company Secretary. At each Board Meeting, minutes of these Committees are placed before the Directors for their perusal and
noting.
1. Audit Committee
The Audit Committee of the Company comprises of 3 members, all of whom are Non-Executive Independent Directors. Mr. Munesh Khanna, an
Independent Director acts as Chairman of the Committee. The Committee members are professionals having requisite experience in the felds of
Finance and Accounts, Banking and Management.
The Audit Committee met 4 times during the year. The Director and Chief Financial Ofcer and representatives of Internal and Statutory Auditors
are invitees to Audit Committee meetings and the Company Secretary acts as the Secretary of the Audit Committee.
Role
The terms of reference of the Audit Committee are as under:
1. Oversight of the company’s fnancial reporting process and the disclosure of its fnancial information to ensure that the fnancial statement is
correct, sufcient and credible.
2. Recommending to the Board the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the
fxation of audit fees.
3. Approval of payment of statutory auditors for any other services rendered by the statutory auditors.
7
4. Reviewing, with the management, the annual fnancial statements before submission to the board for approval, with particular reference to:
(a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA)
of Section 217 of the Companies Act, 1956.
(b) Changes, if any, in accounting policies and practices and reasons for the same.
(c) Major accounting entries involving estimates based on the exercise of judgment by management.
(d) Signifcant adjustments made in the fnancial statements arising out of audit fndings.
(e) Compliance with listing and other legal requirements relating to fnancial statements.
(f) Disclosure of any related party transactions.
(g) Qualifcations in the draft audit report.
5. Reviewing, with the management, the quarterly fnancial statements before submission to the board for approval.
6. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, stafng and seniority of the
ofcial heading the department, reporting structure coverage and frequency of internal audit.
8. Discussion with internal auditors any signifcant fndings and follow up thereon.
9. Reviewing the fndings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a
failure of internal control systems of a material nature and reporting the matter to the board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to
ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment
of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower mechanism, in case the same is existing.
13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Explanation (i) : The terms “related party transactions” shall have the same meaning as contained in the Accounting Standard 18, Related
Party Transactions, issued by The Institute of Chartered Accountants of India.
Explanation (ii) : If the Company has set up an Audit Committee pursuant to provision of the Companies Act, the said Audit Committee shall
have such additional functions / features as is contained in this clause.
14. Management Discussion and Analysis of fnancial condition and results of operations.
15. Statement of signifcant related party transactions (as defned by the Audit Committee), submitted by management.
16. Management letters / letters of internal control weaknesses issued by the Statutory Auditors.
17. Internal audit reports relating to internal control weaknesses; and
18. The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee.
19. To look into any other matter which may be referred to it by the Board.
20. In addition to the above, the Committee shall have such functions / role / powers as may be specifed in the Companies Act, Listing Agreement
with Stock Exchanges or any other applicable law.
Meetings and Attendance
During the year, 4 Audit Committee Meetings were held on 9
t
h May, 2012, 26
th
July, 2012, 23
rd
October, 2012 & 30
th
January, 2013. The Attendance of
Members at meetings was as under:
Sr.
No.
Name Position Number of Meetings held during the period
when the Member was on the Board
Number of Meetings attended
1 Mr. Munesh Khanna Chairman 4 3
2 Mr. Prabhakar Dalal* Member 4 4
3 Mr. G. M. Yadwadkar+ Member 2 0
4 Dr. Bakul Dholakia Member 4 4
* On 23
rd
October, 2012 the Board of Director of the Company has appointed Mr. Prabhakar Dalal as a chairman of the Audit Committee because of
in absence of Mr. Munesh Khanna
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
2. Remuneration Committee
The Board of Directors of the Company has constituted a Remuneration Committee consisting of 3 Directors, all of whom are Non-Executive
Independent Directors. The Remuneration Committee met twice during the year.
8
A R V I N D L I M I T E D 82
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ANNUAL REPORT 2012-13
Role
The terms of reference of the Remuneration Committee are as under:
1. To frame company’s policies for compensation and benefts for Executive Directors.
2. To Review and recommend compensation payable to the Executive Directors.
3. To administer and supervise Employee Stock Option Schemes (ESOS) including framing of policies related to ESOS and reviewing grant of
ESOS.
4. To Review HR Policies and initiatives.
Meetings and Attendance
During the year, 2 Meetings was held on 9th May, 2012 & 26th July, 2012. The Attendance of Members at meeting was as under:
Sr.
No.
Name Position Number of Meetings held
during the year
Number of Meetings
attended
1 Mr. Sudhir Mehta Chairman 2 1
2 Mr. Munesh Khanna+ Member 2 2
3 Dr. Bakul Dholakia Member 2 2
+ On 26th July, 2012 the Board of Director of the Company has appointed Mr. Munesh Khanna as a chairman of the Remuneration Committee
because of in absence of Mr. Sudhir Mehta.
Remuneration of Directors
Remuneration of Executive Directors is recommended by the Remuneration Committee and approved by the Board of Directors and the
Shareholders of the Company.
The Remuneration Committee and the Board of Directors at their respective meetings held on 9
th
May, 2012 and shareholders at their Annual
General Meeting held on 28
th
September, 2012 have approved remuneration payable to Mr. Sanjay S. Lalbhai, Chairman and Managing Director of
the Company for a period from 1
st
January, 2013 to 31
s
t March, 2017. The Company has entered into an agreement with him laying down his tenure,
remuneration and other terms.
The Remuneration Committee and the Board of Directors at their respective meetings held on 20
th
May, 2011 and shareholders at their Annual
General Meeting held on 30
th
September, 2011 have approved remuneration payable to Mr. Jayesh K. Shah, Whole-time Director with designation
of Director and Chief Financial Ofcer of the Company for a period of three years from 1
st
October, 2011 to 30
th
September, 2014. The Company has
entered into an agreement with him laying down his tenure, remuneration and other terms.
The Remuneration Committee and the Board of Directors at their respective meetings held on 26
th
July, 2012 and shareholders at their Annual
General Meeting held on 28
th
September, 2012 have approved remuneration payable to Mr. Punit S. Lalbhai, and Mr. Kulin S. Lalbhai - Executive
Directors of the Company for a period of fve years from 1
st
August, 2012 to 31
st
July, 2017. The Company has entered into an agreement with them
laying down their tenure, remuneration and other terms.
The remuneration of Non Executive Directors is determined by the Board and is also approved by the Shareholders in General Meeting. Non
Executive Directors were paid Sitting Fees of ` 5,000/- for every meeting of Board of Directors or Committee attended by them. Apart from this,
Non Executive Directors (other than Managing Director and Whole Time Director(s)) are entitled for commission not exceeding 1% of the net
profts of the Company per annum for each year for a period of 5 years commencing from 1
st
April, 2010.
Within the above limit, Executive Directors and Non-Executive Directors have been paid commission for the year 2012-13 as under:
Sr. No. Name of Director Salary ` Perquisites & Allowances ` Sitting Fees ` Commission/ Bonus `
1 Mr. Sanjay S. Lalbhai 7500000 29544032 - 10000000
2 Mr. Jayesh K. Shah 4761000 21548924 - 4000000
3 Mr. Punit S. Lalbhai* 1000000 4783681 - -
4 Mr. Kulin S. Lalbhai** 1000000 4747226 - -
5 Mr. Sudhir Mehta - - 30000 500000
6 Dr. Bakul Dholakia - - 65000 600000
7 Mr. Prabhakar Dalal - - 40000 600000
8 Mr. Munesh Khanna - - 40000 600000
9 Ms. Renuka Ramnath - - 10000 400000
10 Mr. G. M. Yadwadkar+ - - - 200000
Commission of ` 1.89 crores paid to Executive Directors during the year 2012-13 pertains to previous year.
* Mr. Punit S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
** Mr. Kulin S. Lalbhai has been appointed as an Executive Director w. e. f. 26
th
July, 2012.
+ Mr. G. M. Yadwadkar a Nominee Director of IDBI Bank Ltd. has ceased to be a Director w. e. f. 1
st
August, 2012.
9
3. Investors’ Grievance Committee
The Investors’ Grievance Committee has 4 Members comprising of 2 Non-Executive Directors and 2 Executive Directors.
Role
The terms of reference of the Investors’ Grievance Committee are as under:
1. To specifcally look into the redressal of Investors’ Grievances pertaining to:
• Transfer of Shares and Debentures.
• Dividends, Interests and Redemption Proceeds of Debentures.
• Dematerialisation of Shares and Debentures.
• Replacement of Lost, Stolen, Mutilated Share and Debenture Certifcates.
• Non-receipt of Rights, Bonus, Split Share Certifcates.
2. To look into other related issues towards strengthening Investors’ Relations.
3. To consider and approve issuance of Share/Debenture Certifcates including Duplicate Share/ Debenture Certifcates.
4. To look into the reasons for any defaults in the payment to the Depositors, Debenture Holders, Shareholders (in case of non payment of
Declared Dividends) and Creditors.
Meetings and Attendance
During the year, 3 Investors’ Grievance Committee Meetings were held on 26
th
July, 2012, 23rd October, 2012 & 30
th
January, 2013. The Attendance of
Members at meetings was under:
Sr.
No.
Name Position Number of Meetings held
during the year
Number of Meetings
attended
1 Mr. Sanjay S. Lalbhai Member 3 3
2 Mr. Jayesh K. Shah Member 3 3
3 Mr. Sudhir Mehta Member 3 2
4 Dr. Bakul Dholakia Chairman 3 3
4. Management Committee
The Management Committee consists of 2 Directors, all of whom are Executive Directors. The Management Committee met 20 times during the
year.
Role
The Management Committee’s primary role is to look after the day-to-day business activities of the Company within Board approved direction/
framework. The Committee meets frequently, as and when need arises to transact matters within the purview of its terms of reference.
Meetings and Attendance
During the year, 20 Management Committee Meetings were held on various dates. The Attendance of Members at meetings was as under:
Sr.
No.
Name Position Number of Meetings held
during the year
Number of Meetings
attended
1 Mr. Sanjay S. Lalbhai Member 20 20
2 Mr. Jayesh K. Shah Member 20 20
MANAGEMENT DISCUSSION AND ANALYSIS
This is given as a separate chapter in the Annual Report.
Brief Resume of Directors seeking Re-appointment/ Appointment
Information required under Clause 49 IV (G) of the Listing Agreement with respect to the Directors retiring by rotation and
seeking reappointment / Directors sought to be appointed is as under:-
At the ensuing Annual General Meeting, Dr. Bakul Dholakia and Ms. Renuka Ramnath, Directors of the Company, retire by rotation and being eligible
seek re-appointment.
Brief profles of the above Directors along with particulars of their directorships and committee memberships are as under:
Dr. Bakul Dholakia
Dr. Bakul H. Dholakia is a Gold Medalist from Baroda University and he has a Doctorate in Economics. He has 41 years of professional
experience including 33 years at IIM, Ahmedabad. He has been a consultant to various national and international organizations. He was awarded
many awards including Padma Shri by the Government of India in recognition of his distinguished services in the feld of education in 2007,
Bharat Asmita National Award for his contribution to management education and teaching by the Hon’ble Chief Justice of India in 2008 etc.
10
A R V I N D L I M I T E D 82
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ANNUAL REPORT 2012-13
In 2005, Dr. Bakul Dholakia was rated as one of the most powerful personalities of Gujarat by two separate media groups. Global Associations of
Business Schools have also honoured Dr. Bakul Dholakia for his sterling contribution in the feld of management education. The Global Foundation for
Management Education (GFME), jointly formed by the Associations of American and European Business Schools, has nominated Dr. Bakul Dholakia
as a Member of the Board of GFME representing Asia. Dr. Dholakia has been a Board Member of Reserve Bank of India, Western Area Board from 1993
to 2001. He was appointed as the Chairman of the National Board of Accreditation for Technical Education in India. Over the last two decades, Dr.
Dholakia has worked on numerous government committees. He has also been a member of the Jury for various Corporate Excellence Awards and
Selection Committees for CEOs. Dr. Dholakia is the author of 12 books. Currently, Dr. Dholakia is leading the educational initiatives of Adani Group.
He is holding 13,455 equity shares of the Company and is not related to any Director of the Company.
Sr.
No.
Name of the Company in which holding Directorship Name of the Committee Committee Membership
1 Ashima Limited Audit Committee
Remuneration Committee
Chairman
Chairman
2 Ashima Dyecot Limited Audit Committee
Remuneration Committee
Chairman
Chairman
3 L&T Power I/C - -
Ms. Renuka Ramnath
Ms. Renuka Ramnath is the Founder and Managing Director of Multiples Alternate Asset Management Pvt. Ltd. which seeks to manage circa $450
million of Indian and International capital.
In her career spanning nearly two and a half decades in the Indian fnancial sector, Ms. Renuka Ramnath has been involved with building several
businesses from scratch in the ICICI Group which include Investment Banking, Structured Finance and e-Commerce in the 1990s and Private Equity
in 2000; much before each of these terms became ubiquitous in Indian marketplace.
Ms. Renuka Ramnath led ICICI Venture to become India’s largest private equity fund whilst transforming the frm from a bank’s investment arm to a
traditional blue-chip private equity fund managing substantial amounts of third party capital – both domestic and international. All four funds raised
by her (aggregating to US$1.5 billion) have been the then largest domestic funds raised in the Indian market.
Time and again, Ms. Renuka Ramnath has demonstrated her ability to identify and conceptualize new business opportunities, create high quality
teams and quickly build these businesses to scale. As a result, she has featured in many prestigious listings, including the Top 25 Most Powerful
Women in Business (Business Today, India), India’s most Powerful CEO’s (Economic Times) and in the Top 25 Non Bank Women in Finance (US
Banker’s global list).
In her new avatar, Ms. Renuka Ramnath looks to bring together her tremendous experience, long-standing credibility and enormous relationships
to build Multiples as a platform to channelise long-term capital to create valuable enterprises and successful entrepreneurs. She draws motivation
from the fact that supporting entrepreneurs to build sustainable businesses has the potential to generate employment, to create ripple efects in
the Indian economy and to facilitate the greater process of nation building.
She is not holding any equity shares of the Company and is not related to any Director of the Company.
Sr. No. Name of the Company in which holding Directorship Name of the Committee Committee Membership
1 Multiple Alternate Asset Management Pvt. Ltd. - -
2 Multiples Equity Fund Trustee Private Limited - -
3 Shri Nath G Corporate Management Services Private Limited - -
4 Indian Energy Exchange Limited - -
5 Mogae Media Private Limited - -
6 PVR Limited - -
7 Cinemax India Limited - -
8 B2R Technologies Private Limited - -
Prevention of Insider Trading
In accordance with SEBI (Prohibition of Insider Trading) Regulations, 1992, the Board has adopted the following codes:
• Arvind Code for Prevention of Insider Trading – Under this code, obligations are cast upon Directors and Ofcers to preserve Price
Sensitive Information, which is likely to have a bearing on share price of the Company. Procedures are prescribed to ensure that such
information is not misused for any personal advantage. The Head (Legal & Secretarial) has been appointed as the Compliance Ofcer for
monitoring implementation of the Code across the Company.
• Arvind Code of Corporate Disclosures – This code lays down principles and procedures with the objective of ensuring that the Price
Sensitive Information related to the Company is handled in prescribed manner. Adequate disclosure of such information is sought to be made
to the Public through Stock Exchanges, Press, Media and the Arvind web-site in a timely manner to enable the investors to take informed
investment decisions with regard to the Company’s Securities. The Director and Chief Financial Ofcer has been appointed as the Company’s
Public Spokesperson under this Code.
11
• Code of Conduct for Directors and Senior Management Personnel– In terms of para no. I - D of Clause 49 of the Listing Agreement,
the Board of Directors of the Company has laid down a Code of Conduct for all Board Members and Senior Management Personnel of the
Company. The said Code of Conduct has been posted on the website of the Company. The Board Members and Senior Management Personnel
of the Company have afrmed compliance with the Code. The Chairman & Managing Director of the Company has given a declaration to the
Company that all the Board Members and Senior Management Personnel of the Company have afrmed compliance with the Code.
Investors may write to the Company’s Secretarial Department for a copy of these Codes.
Disclosures
(i) Disclosures on materially signifcant related party transactions i.e. transactions of the Company of material nature, with its promoters,
directors or the management, their subsidiaries or relatives etc. that may have potential conficts with the interest of the Company at large :
Transactions with related parties are disclosed in detail in Note No. 34 in “Notes forming part of the Accounts” annexed to the fnancial
statements for the year. There were no related party transactions having potential confict with the interest of the Company at large.
(ii) Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchange or SEBI or other authority
on any matter related to capital markets, during last three years: Nil.
(iii) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of Clause 49:
The Company has complied with the mandatory requirements relating to strengthening the responsibilities of Audit Committee, improving
the quality of fnancial disclosures, including related party transactions, calling upon Company Board to adopt formal code of conduct, clearly
setting out the position of nominee directors and improving disclosure relating to the compensation paid to non-executive directors and
securing the approval of shareholders for this compensation, setting the procedure for legal compliance and periodical review by the Board.
The Company has not adopted the non-mandatory requirements.
Shareholders’ Information
1. Name and Designation of Compliance Ofcer:
Ramnik V. Bhimani
Company Secretary
Arvind Limited
Bharti Parikh
Sharepro Services (India) Pvt. Ltd.
Registrars & Transfer Agents
2. Details of Complaints / Queries received and redressed during 1st April, 2012 to 31st March, 2013:
Sr.
No.
Particulars of Complaints / Queries Received Redressed Pending as
on 31.3.2013
1 Non receipt of Share Certifcates 1 1 0
2 Non receipt of Dividend /Interest Warrants 32 32 0
3 Confrmation of Demat Credit Nil Nil Nil
4 Non receipt of Debentures Redemption payment Nil Nil Nil
5 Non receipt of letter of ofer, allotment advice, share certifcates etc. for Rights
Issue & others
Nil Nil Nil
6 Others – Complaints received from SEBI, Stock Exchanges, NSDL, ROC, Company
Law Board etc.
10 10 0
Total 43 43 0
3. Share Transfer Details for the period from 1st April, 2012 to 31st March, 2013:
Transactions Physical Demat Total
Number of Transfers 1529 3630 5159
Average Number of Transfers per month 127 303 430
Number of Shares Transferred 59234 219283 278517
Average Number of shares Transferred per month 4936 18274 23210
No. of Pending Share Transfers Nil Nil Nil
4. Investors’ Grievances:
The Registrars and Transfer Agents under the supervision of the Secretarial Department of the Company look after investors’ grievances.
Ms. Bharti Parikh of Sharepro Services (India) Pvt. Ltd. is responsible for redressal of Investors’ Grievances. The Company Secretary of the
Company has been appointed as the Compliance Ofcer for this purpose. At each Meeting of the Investors’ Grievance Committee, all matters
pertaining to investors including their grievances and redressal are reported.
12
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
5. Information on General Body Meetings:
(i) The last 3 Annual General Meetings of the Company were held as under:
Date Time Venue
28
th
September, 2012 10.00 a.m. Thakorebhai Desai Hall, Nr. Law Garden, Ellisbridge, Ahmedabad-380006
30
th
September, 2011 10.30 a.m. Thakorebhai Desai Hall, Nr. Law Garden, Ellisbridge, Ahmedabad-380006
25
th
September, 2010 10.30 a.m. Thakorebhai Desai Hall, Nr. Law Garden, Ellisbridge, Ahmedabad-380006
(ii) Special Resolutions passed at the last 3 Annual General Meetings:
2011-12
1. Appointment of Mr. Punit S. Lalbhai as Executive Director of the Company and approval of overall limit of remuneration payable to
him for a period from 1
st
August, 2012 to 31
st
July, 2017.
2. Appointment of Mr. Kulin S. Lalbhai as Executive Director of the Company and approval of overall limit of remuneration payable to
him for a period from 1
st
August, 2012 to 31
s
t July, 2017.
3. Approval of terms of reappointment of Mr. Sanjay S. Lalbhai as Chairman and Managing Director of the Company and approval of
the overall limit of remuneration payable to him for a period from 1st January, 2013 to 31
st
March, 2017.
4. Approval of the appointment of Mr. Darshil Shah as Manager – Business Development in Arvind Infrastructure Limited, a subsidiary
of the Company under Section 314 of the Companies Act, 1956.
2010-11
1. Approval of terms of reappointment and remuneration of Mr. Jayesh K. Shah as Whole time Director with the designation of
Director and Chief Financial Ofcer of the Company for a further period of three years from 1
st
October, 2011 to 30
th
September,
2014.
2. Alteration of the Main Object Clause of Memorandum of Association of the Company so as to include the object of Real Estate
Business.
3. Commencement of new business of Real Estate.
4. Further Issue of Equity Shares or Securities convertible into Equity Shares for an amount not exceeding ` 300 Crores.
2009-10
1. Reappointment of and payment of remuneration to Mr. Sanjay S. Lalbhai as Chairman and Managing Director of the Company for
a further period of three years from 1
st
January, 2010 to 31
st
December, 2012.
2. Payment of commission to Non-Executive Directors including Nominee Directors of the company for a period of 5 years from 1
st
April, 2010 to 31
st
March,2015.
(iii) No resolutions were passed through Postal Ballot during the previous year.
Details of Extra Ordinary General Meeting:
During last 3 years, there was no Extra Ordinary General Meeting held.
6. Means of communication
i. The Quarterly Results are published in the Financial Express - All India Editions and Financial Express Gujarati Edition of Ahmedabad and
are also posted on the Company’s website at www.arvind.com.
ii. Information released to the press at the time of declaration of results is also sent to all Stock Exchanges where the shares of the Company
are listed for the beneft of investors. Moreover, the Company’s web-site hosts a special page giving information which investors usually
seek.
iii. Presentations made to institutional investors/analysts are posted on the Company’s web- site at www.arvind.com
7. Annual General Meeting:
Date 29
th
July, 2013
Time 9.30 a.m.
Venue Thakorebhai Desai Hall, Near Law Garden, Ellisbridge, Ahmedabad - 380 006
8. Financial Calendar:
The Financial Year of the Company is for a period of 12 months from 1
st
April to 31
st
March.
First quarter results : By end of July, 2013
Second quarter results : By end of October, 2013
Third quarter results : By end of January, 2014
Fourth quarter results / Year end results : By end of May, 2014
13
9. Book Closure : Monday, the 22
nd
July, 2013 to Monday, the 29
th
July, 2013 (Both Days inclusive).
10. Dividend payment Date : 3
rd
August, 2013
11. Listing on Stock Exchanges: Shares of the Company are listed on the following Stock Exchanges.
Sr. No. Name of the Stock Exchange Code Address
1 Ahmedabad Stock Exchange Ltd.
(Regional Stock Exchange)
05090 Kamdhenu Complex, Opp. Sahajanand College, Panjarapole,
Ahmedabad-380 015
2 Bombay Stock Exchange Ltd. 500101 Phiroze Jeejeebhoy Tower, Dalal Street Mumbai – 400 001
3 National Stock Exchange of India Ltd. ARVIND Exchange Plaza, 5
th
Floor, Plot No.C/1, G. Block, Bandra – Kurla Complex,
Bandra (E) Mumbai – 400 051
4 The Luxembourg Stock Exchange
(Listing of GDRs)
11, Avenue de la Porte-Neuve
L-2227 Luxembourg
The Company has paid Annual Listing Fees for the year 2013-2014 to the above Stock Exchanges.
12. Market Price Data:
The data on price of equity shares of the Company are as under:
High, Low during each month in last fnancial year and performance in comparison to broad-based indices such as BSE (Sensex) and NSE
(Nifty):
Share price BSE BSE Sensex Volumes Share price NSE NSE (NIFTY) Volumes
Month High
(`)
Low
(`)
High Low No of
shares
High
(`)
Low
(`)
High Low No of
shares
Apr-12 87.65 80.05 17,664.10 17,010.16 78,28,83,908 87.65 80.15 5378.75 5154.30 3,13,44,419
May-12 92.90 68.20 17,432.33 15,809.71 1,56,33,67,065 92.90 68.25 5279.60 4788.95 6,44,05,031
Jun-12 77.85 68.10 17,448.48 15,748.98 56,02,52,492 78.00 68.00 5286.25 4770.35 3,11,53,538
Jul-12 81.80 67.05 17,631.19 16,598.48 54,45,63,020 81.80 67.00 5348.55 5032.40 2,93,99,071
Aug-12 72.95 59.05 17,972.54 17,026.97 32,53,17,543 73.15 58.90 5448.60 5164.65 2,08,01,570
Sep-12 82.00 62.35 18,869.94 17,250.80 57,44,32,234 82.00 62.30 5735.15 5215.70 3,25,83,142
Oct-12 84.10 73.25 19,137.29 18,393.42 65,50,84,464 84.15 73.00 5815.35 4888.20 3,13,46,558
Nov-12 90.95 80.80 19,372.70 18,255.69 48,10,15,872 90.90 80.65 5885.25 5548.35 2,56,35,653
Dec-12 103.50 88.20 19,612.18 19,149.03 1,02,84,19,821 103.45 88.25 5965.15 5823.15 4,22,81,206
Jan-13 107.50 89.60 20,203.66 19,508.93 90,30,78,111 107.60 87.35 6111.80 5935.20 3,41,98,500
Feb-13 95.70 73.05 19,966.69 18,793.97 39,43,14,184 95.75 73.30 6052.95 5671.90 1,66,95,295
Mar-13 84.80 72.15 19,754.66 18,568.43 38,04,05,268 84.95 72.10 5971.20 5604.85 1,79,77,728
13. Registrars and Transfer Agents:
Sharepro Services (India) Pvt. Ltd.
416-420, 4
th
Floor, Devnandan Mall,
Opp. Sanyas Ashram, Ellisbridge, Ahmedabad - 380 006
Contact Person: Ms. Bharti Parikh
Phone Nos.: 079-26582381 to 84 Fax No. : 079-26582385
E-mail: [email protected]
14. Delegation of Share Transfer Formalities:
Since the Company’s shares are compulsorily traded in the demat segment on stock exchanges, bulk of the transfers take place in the
electronic form.
For expediting physical transfers, the Board has delegated share transfer formalities to certain ofcers of the Company who attend to them
at least 3 times in a month. Physical transfers are afected within the statutory period of one month. The Board has designated the Company
Secretary as the Compliance Ofcer.
14
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
15. Shareholding Pattern as on 31
st
March, 2013:
Sr. No. Category No. of shares
held
Percentage of
Shareholding
Holding of Promoter Group (‘Group’ as per MRTP Act, 1969)
1 Individuals:
Sanjaybhai Shrenikbhai Lalbhai 2000152 0.78%
Samvegbhai Arvindbhai Lalbhai 216576 0.08%
Shrenikbhai Kasturbhai Lalbhai 1580 0.00%
Relatives of above Individuals* 127050 0.05%
2 Major Bodies Corporate and Trusts:
Aura Securities Private Limited 95790590 37.12%
Sanjay Family Trust 100 0.00%
AML Employees’ Welfare Trust 6327317 2.45%
Amplus Capital Advisors Pvt. Ltd. 0 0.00%
Anagram Knowledge Academy Limited 0 0.00%
Anukul Investments Private Limited 0 0.00%
Aura Merchandise Pvt. Ltd. 0 0.00%
Lalbhai Realty Finance Private Limited 0 0.00%
Shruti Trade Link Pvt. Ltd. 0 0.00%
Adore Investments Private Limited 132296 0.05%
Aeon Investments Private Limited 607531 0.24%
Amardeep Holdings Private Limited 94250 0.04%
Amazon Investments Private Limited 1792158 0.69%
Anshuman Holdings Private Limited 137140 0.05%
Aayojan Investment Pvt. Ltd 0 0.00%
Aayojan Resources Pvt. Ltd 84505 0.03%
Acropolis Investment Pvt. Ltd 440062 0.17%
Active Investment Pvt. Ltd 178475 0.07%
Adhigam Investments Pvt. Ltd. 0 0.00%
Adhinami Investment Pvt. Ltd 1000 0.00%
Agrimore Limited 110000 0.04%
Akshita Holdings Pvt. Limited 0 0.00%
Alligator Investment Pvt. Ltd 40762 0.02%
Amal Limited 0 0.00%
Ameer Trading Corporation Limited 0 0.00%
Anchor Adhesives Private Limited 0 0.00%
Anubhav Investments Private Limited 1003815 0.39%
Atul Bioscience Limited 0 0.00%
Atul Limited 4127471 1.60%
Gujarat Synthwood Limited 0 0.00%
Osia Enterprises Pvt. Ltd 40000 0.02%
Rudolf Atul Chemicals Limited 0 0.00%
Suvidha Dairy Pvt. Ltd 14190 0.01%
Suvikash Trading Pvt. Ltd 118500 0.05%
Total Promoter Group holding 113385520 43.94%
3 Mutual Funds and UTI 31148254 12.07%
4 Banks, Financial Institutions, Central/State Government & Insurance Companies 17718817 6.87%
5 Foreign Institutional Investors, NRIs /OCBs, Foreign Banks 44543754 17.26%
6 GDR 454272 0.18%
7 Private Corporate Bodies 5791681 2.24%
8 Indian Public 44661512 17.31%
9 Trusts 3364 0.00%
10 Clearing Members 335895 0.13%
Total Non-Promoter holding 144657549 56.06%
GRAND TOTAL 258043069 100.00%
15
* The names of ‘Relatives of above Individuals’ are as per disclosures made as on 31
st
March, 2013 under the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011.
• Distribution of shareholding as on 31
st
March, 2013:
PHYSICAL MODE ELECTRONIC MODE TOTAL TOTAL
No. of shares No. of
holders
No. of
Shares
No. of
holders
No. of
Shares
No. of
holders
% No. of
Shares
%
1-500 77374 3162325 121070 15620368 198444 93.52 18782693 7.28
501-1000 351 245217 7525 6088684 7876 3.71 6333901 2.45
1001-2000 107 143605 3018 4580746 3125 1.47 4724351 1.83
2001-3000 21 52371 934 2408672 955 0.45 2461043 0.95
3001-4000 9 32344 394 1408373 403 0.19 1440717 0.56
4001-5000 11 49877 387 1824710 398 0.18 1874587 0.73
5001-10000 3 21889 496 3639140 499 0.24 3661029 1.42
10001-20000 4 55650 199 2828419 203 0.10 2884069 1.12
Above 20000 1 22318 296 215858361 297 0.14 215880679 83.66
TOTAL 77881 3785596 134319 254257473 212200 100.00 258043069 100.00
16. Dematerialisation of shares and liquidity:
The Company’s shares are available for dematerialisation on both the Depositories viz. National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL). Shares of the Company are compulsorily to be delivered in the demat form on Stock
Exchanges by all investors. As on 31
st
March, 2013, 25,42,57,473 shares representing 98.53%of the issued capital have been dematerialised by
investors and bulk of transfers take place in the demat form.
Demat ISIN:
Equity Shares fully paid : INE034A01011
17. Outstanding GDRs / ADRs / Warrants or any convertible instruments and conversion date and likely impact on equity:
As on 31
st
March, 2013, 4,54,272 GDRs (previous year 6, 60,226) are outstanding. Each GDR represents one underlying equity share.
18. Plant Locations:
• Lifestyle Fabrics–Denim, Naroda Road, Ahmedabad - 380 025, Gujarat.
• Lifestyle Fabrics – Voiles, Ankur Textiles, Outside Raipur Gate, Ahmedabad - 380 022, Gujarat.
• Lifestyle Fabrics–Shirting, Khakis & Knitwear, Santej, PO Khatrej, Taluka Kalol, Dist. Gandhinagar-382721, Gujarat.
• Lifestyle Apparel–Knits, Santej, PO Khatrej, Taluka Kalol, Dist. Gandhinagar - 382 721 , Gujarat.
• Lifestyle Apparel–Jeans, 26/2, 27/2 Kenchenahaili, Mysore Road, Near Bangalore University, Bangalore-560 059.
• Lifestyle Apparel–Shirts, No. 23/1, Sonnenahalli Village, Sitarampalya Cross, ITPL Road, Brookfeld, Mahadevpura Post, Bangalore - 560 048.
• Arvind Intex, Raipur Road, Gomtipur, Ahmedabad - 380 021, Gujarat
• Arvind Polycot, Khatrej, Taluka Kalol, Dist. Gandhinagar- 382 721, Gujarat
• Arvind Cotspin, D-64, MIDC, Gokul Shirgaon, Tal. Karveer, Kolhapur - 416 234, Maharashtra.
19. Unclaimed Dividend:
(1) Pursuant to Section 205A of the Companies Act, 1956, unclaimed dividends up to and including the fnancial years 1993-1994 have been
transferred to the General Revenue Account of the Central Government. Shareholders who have not encashed their dividend warrants
relating to any fnancial year up to 1993-1994 are requested to claim the amounts from the Registrar of Companies, Gujarat, ROC Bhavan,
Near Ankur Bus Stand, Naranpura, Ahmedabad 380 013 in the prescribed form. Investors may write to the Secretarial Department of the
Company or the Registrars and Transfer Agents for a copy of the form.
(2) Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, dividends on equity shares for the fnancial years 1994-1995
to 1997-1998 and 2004-05 remaining unclaimed for 7 years from their due dates have been transferred by the Company to the Investor
Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956.
Shareholders are requested to note that no claim shall lie against the said Fund or the Company in respect of any amount of unclaimed
or unpaid dividend transferred to IEPF.
(3) The Company did not declare any dividends on equity shares for the fnancial years 1998-1999 to 2003-2004 and 2006-07 to 2010-11.
(4) The dividends on equity shares for the following years remaining unclaimed for 7 years from the dates of declaration are required to be
transferred by the Company to IEPF and the various dates for transfer of such amounts are as under:
16
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Financial Year Date of Declaration Due for transfer to IEPF*
2005-06 30
th
September, 2006 6
th
November, 2013
2011-12 28
th
September, 2012 4
th
November, 2019
* Actual dates of transfer to IEPF may vary.
Members who have so far not enchased their dividend warrants in the respect of the above years are requested to claim their dividend
from the Company. Such members may write to the Company’s Registrars and Transfer Agents, Sharepro Services (India) Pvt. Ltd. for
payment of unclaimed dividend amount.
20. Nomination Facility:
Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the Company, as
permitted under Section 109A of the Companies Act, 1956 are requested to submit the prescribed Form 2B for this purpose. Shareholders
may write to the Secretarial Department of the Company for a copy of the Form.
21. Address for correspondence:
Shareholders may correspond with the Company at the Registered Ofce of the Company or at the ofce of Registrars and Transfer Agents
of the Company:
Arvind Limited
Secretarial Department
Naroda Road,
Ahmedabad - 380 025.
Phone Nos: 079-30138000/30138108-09
Fax No. : 079-30138668
e-mail : [email protected]
Web-site address: www.arvind.com
Sharepro Services (India) Pvt. Ltd.
Registrars and Transfer Agents
416-420, 4
th
Floor, Devnandan Mall,
Opp.Sanyas Ashram, Ellisbridge, Ahmedabad-380 006
Contact Persons: Ms. Bharti Parikh
Phone Nos.: 079-26582381to 84
Fax No. : 079-26582385
e-mail : [email protected]
The above Report has been placed before the Board at its meeting held on 16
th
May, 2013 and the same was approved.
For and on behalf of the Board
Place : Ahmedabad SANJAY S. LALBHAI
Date : 16
th
May, 2013 Chairman & Managing Director
17
Compliance of conditions of Corporate Governance
To the Members of Arvind Limited
We have examined the compliance of conditions of Corporate Governance by ARVIND LIMITED for the year ended on 31st March, 2013, as stipulated in
Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the
procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is
neither an audit nor an expression of opinion on the fnancial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the
management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing
Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or efectiveness with which the
management has conducted the afairs of the Company.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N. D. Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
___________________________________________________________________________________________________________________________________
CEO / CFO CERTIFICATION
The Board of Directors
Arvind Limited
Ahmedabad.
Re : Financial Statements for the year 2012-13 – Certifcation by CEO and CFO
We, Sanjay S. Lalbhai, Chairman & Managing Director and Jayesh K. Shah, Director & Chief Financial Ofcer of Arvind Limited, on the basis of review of the
fnancial statements and the cash fow statement for the fnancial year ending 31
st
March, 2013 and to the best of our knowledge and belief, hereby certify
that:
1. These statements do not contain any materially untrue statements or omit any material fact or contains statements that might be misleading;
2. These statements together present a true and fair view of the Company’s afairs and are in compliance with existing accounting standards, applicable
laws and regulations;
3. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year ended 31st March, 2013 which are
fraudulent, illegal or violative of the Company’s Code of Conduct;
4. We accept responsibility for establishing and maintaining internal controls, we have evaluated the efectiveness of the internal control systems of
the Company and we have disclosed to the auditors and the Audit Committee those defciencies, of which we are aware, in the design or operation
of the internal control systems and that we have taken the required steps to rectify these defciencies;
5. We further certify that :
(a) there have been no signifcant changes in internal control during this year;
(b) there have been no signifcant changes in accounting policies during this year;
(c) there have been no instances of signifcant fraud of which we have become aware and the involvement therein, of management or an
employee having signifcant role in the Company’s internal control systems.
Ahmedabad Sanjay S. Lalbhai Jayesh K. Shah
May 16, 2013 Chairman & Managing Director Director & CFO
___________________________________________________________________________________________________________________________________
DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE CODE OF
CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
This is to confrm that the Company has adopted a Code of Conduct for Directors and Senior Management Personnel which is available on the Company’s
website.
I confrm that the Company has in respect of the Financial Year ended 31
st
March, 2013, received from the Members of the Board and Senior Management
Personnel, a declaration of compliance with the Code of Conduct as applicable to them.
Ahmedabad Sanjay S. Lalbhai
16
th
May, 2013 Chairman & Managing Director
18
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
DISCLAIMER
Readers are cautioned that this discussion and analysis contains forward-
looking statements that involve risks and uncertainties. When used in
this discussion, the words “anticipate,” “believe,” “estimate,” “intend,”
“will,” and “expected” and other similar expressions as they relate to the
Company or its business are intended to identify such forward-looking
statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. Actual results, performances
or achievements, risks and opportunities could difer materially from
those expressed or implied in these forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements as these are relevant at a particular point of time & adequate
restrain should be applied in their use for any decision making or formation
of an opinion.
The following discussion and analysis should be read in conjunction with
the Company’s fnancial statements included herein and the notes thereto.
OVERVIEW OF THE ECONOMY
The year 2012-13 in India was in many ways that of a stagnant economy –
low GDP growth, steadily low industrial output, high infation, high interest
rates, depreciated currency and conservative policy reforms. However,
that can still be construed as good news on two fronts: (a) It did not decline
much further beyond the FY2011-12 levels and (b) that sets a low statistical
base for things looking to revive in FY2013-14.
The year saw the GDP growth decline to near-5% level, the headline CPI rate
stayed above 10% for good part the year, IIP growth fattened and overall
sentiments weak in the business society as well as among consumers.
The conficting challenges of managing large fscal defcits while trying to
boost economic growth have seen the government and the RBI looking to
push for several reforms, though there is still some way to go before those
reforms are efectively implemented.
Going forward, the expectation for FY2013-14 is that of gradual revival.
While some elements of economic pressures would continue to persist,
the larger picture points to an improvement over the past year. A major
change though, either positive or negative, is seen as unlikely within a year,
especially given that the general elections are scheduled for the next year.
The year is expected to be characterized by a gradual revival in the industrial
output, with stable activity in the agri-sector and services. Infation is likely
to ease gradually, but the trade-of in balancing between growth and
infation could see a cautious growth oriented monetary environment.
Some improvement can be expected in the CAD and the continued fows
of foreign capital is expected to keep the Rupee largely stable in mid-
ffties – assuming that geo-political tensions do not deteriorate and global
economic conditions remain where they are, with the recovery process
also being cautious. Overall, it is expected that growth will bottom in H1
2013 as domestic and foreign headwinds ease and that GDP growth could
average between 5-5.5% this year before picking up to 7%+ in 2014.
However, apart from the immediate sentiments being moderate for the
next year or two, the long-term India growth story – built on the rising
Indian middle-class that will be both younger and richer in the years to
come – continues to remain extremely strong. This is visible in the unabated
commitment of several large Indian and multi-national corporations to not
only sustain but aggressively build position of strength in the Indian markets.
Your company also strongly believes in the long-term India growth
and consumption story and is taking calculated steps to create strong
businesses that would see a major pivoting once an economic upturn
comes around. During the current moderate growth phase however, the
strategy is to follow a cautious growth approach that strengthens the
businesses fundamentally while also exploiting the current value creation
opportunities.
Indian Textile Industry
The Indian textile industry is one of the leading textile industries in the
world, steadily improving in its capabilities and competitiveness vis-à-vis
the other global economies. It chiefy consists of ginning, spinning, weaving
and processing industries and plays a major role in the country’s economy.
It contributes nearly 14% of the total industrial production of the country,
nearly 4% percent to the country’s GDP and accounts for about 17% of
its total foreign exchange earnings through textile exports. Further, it is
also the second largest employer in the country, only after agriculture,
currently employing more than 35 million Indians directly and almost twice
as many through the allied industries.
The industry operates in several segments, including cotton textiles, silk
textiles, woollen textiles, jute and coir, man-made textiles and readymade
garments. The total Indian textile industry size, including readymade
garments, was estimated to be ` 4.9 lakh Crores (nearly USD 90 Bn) in
2012, projected to grow over the next 10 years at a CAGR of 9-10%, to reach
` 10 lakh Crores (nearly USD 200 billion) by 2020. This constitutes of 65%
domestic market and 35% exports and the mix is expected to largely remain
the same given the balance of strong domestic consumption growth and
increasing global competitiveness.
India Textile Industry - Size and Growth Estimates 2011-2021
145
235
386
664
418
670
1050
Domestic
Exports
Total INR(‘000Cr)
INR (‘000Cr)
USD (bn)
2011 (E)
All numbers areroundedof
Source: Technopak Analysis
2016 (P) 2021 (P)
USD (bn)
USD (bn)
273
435
CAGR 9.5%
89
223
143
31
82
50
58
141
93
The industry saw low exports growth in 2012, due to weaker international
demand partly compensated by a weak Indian Rupee. However, over the
next 3-5 years, India’s share of global textile exports is poised to increase
from current 4% to around 7%, driven by the improving competitiveness
vis-à-vis other major exporters like China and Turkey.
Items
April-October
2009-10 2010-11 2010-11 2011-12*
Million US $ Million US $ Million US $ Million US $
Readymade Garments 10064.73 10627.99 5512.15 7O88.74
Cotton Textile 5711.41 8360.35 3466.96 4899.36
Manmade Textiles 3970.88 4643.06 2465.75 3215.49
Wollen, Yarn, Fabrics,
MadeupsEtc
470.20 429.75 248.77 324.65
Silk Textiles 596.05 595.19 323.95 282.34
Handloom 264.85 365.48 185.89 324.14
TOTAL 21078.12 25021.82 12203.47 16134.72
Source: Foreign Trade Statistics of India (Principal Commodities & Countries). * as per latest
fgures available
MANAGEMENT DISCUSSION & ANALYSIS
19
The US and the EU nations account for almost two-thirds of India’s textile
exports. The other major destinations are Bangladesh, Turkey, Japan,
South Korea, Canada, Saudi Arabia and UAE. In order to keep the textile
industry competitive and world class, there is a periodic need for installing
new machinery, adopting latest technology and improving availability of
accessories. Overall, going forward, the exports market is expected to
continue growing at 10% CAGR for the next decade.
31
10%
8%
13%
10 yr. CAGR
50
82
18
13
26
24
38
44
2011 (E) 2016 (P) 2021 (P)
Apparel Textiles Total Exports
All numbers areroundedof
Source: UN ComtradeTechnopak Analysis
India’s Textile & Apparel
Exports Projections (USD bn)
Product-wise Exports
Break-up
Country-wise Exports
Break-up
Apparel
Fiber
Yarn
Made-ups
Fabric
Others
USA
Germany
UAE
France
UK
Others
The Technical Textiles Segment
Globally, the technical textiles segment is an immense opportunity, with
the worldwide industry size estimated at USD 130 Bn. The size of this
segment in India is currently pegged at ` 70,000 Cr (nearly USD 13 Bn),
contributing nearly 15% to the total domestic textile market. This segment
is characterized by world-class manufacturing capabilities technology
skill-sets and is expected to show strong growth in India.
INR (Cr.)
Sr.
No.
Segment 2011 (E) 2016 (P) 2021 (P) CAGR
1 Packtech 27010 55350 81520 12%
2 Clothtech 7780 9310 10350 3%
3 Hometech 10440 17180 27650 10%
4 Mobiltech 4880 9230 12940 10%
5 Indutech 3500 4075 4430 2%
6 Sporttech 2410 3010 3420 4%
7 Buildtech 3040 5490 7490 9%
8 Meditech 1990 2530 2910 4%
9 Protech 2295 4570 6570 11%
10 Agrotech 790 1470 2050 10%
11 Geotech 440 880 1290 11%
12 Oekotech 75 1o5 130 6%
Tolal 64650 113200 160750 10%
All numbers are rounded Of.
Source: Ministry of Textiles, Technopak Analysis.
Policy measures and Impact of Union Budget 2013-14 on the Indian
Textile Industry
The government has taken several important decisions in the Union
Budget 2013-14 to support the growth of the Indian Textile Industry. The
highlights of those are: (1) Restoration of zero excise duty, as existed prior
to the Budget 2011-12, on readymade garments sold in the domestic market
as well as for cotton and manmade sector at the yarn, fabric and clothing
stages (2) Continuation of Technology Upgradation Fund Scheme (TUFS)
in the 12th Five Year Plan with an investment target of ` 1.51 lakh Crore
(3) Reducing custom duty on textile machinery (4) Investment allowance
of 15% on capital investment above ` 1 Bn (5) Allocation of ` 50 Crore to
Ministry of Textile to incentivize setting up Apparel Parks within the SITPs
to house apparel manufacturing units (6) Plan for a new scheme called the
Integrated Processing Development Scheme (IPDS) to be implemented
in the 12th Plan to address the environmental concerns of the textile
industry (7) Working capital and term loans at a concessional interest of 6
per cent to handloom sector and (8) Scheme of Fund for Regeneration of
Traditional Industries (SFURTI) extended to 800 clusters during the 12th
Plan. These measures collectively are expected to give a signifcant boost
to the Indian textiles sector and address many industry concerns.
Cotton
For the current cotton season (Oct’12 – Sep’13), the Cotton Advisory
Board has estimated the domestic acreage at 116 lakh hectares leading
to a production of 330 lakh bales, as against 353 lakh bales from 122 lakh
hectares in 2011-12. This coupled with high exports demand for cotton as
well as yarn and low opening stock of cotton is expected to put pressure on
the price of domestic cotton and yarn.
Cotton yarn spread continues to remain high with robust demand in
domestic as well as overseas market. Certain international trends in cotton
have given a boost to cotton exports and making cotton fbre and yarn
more expensive in the domestic market. Higher cotton prices in China
have prompted the Chinese textile players to import yarn (3% duty on yarn
import compared to 40% duty on cotton import based on decided quota).
Turkey has removed duty on Indian cotton yarn imports and Turkey being
the gateway to Europe, would lead to increased exports of yarn from
India. Also, with power shortage in Pakistan and Bangladesh, certain global
demand is shifting to India. Provisional data as available with DGFT shows
that the current cotton season registered a whopping 51% YoY (Oct-Feb)
increase in registration of contract for export of cotton yarn. Exports of
cotton bales was at all time high during last season and had also impacted
closing stock which is lowest point compared to last four years’ stock.
Yarn-Cotton Spread (Rs/Kg)
120
110
100
90
80
70
60
50
40
30
A
p
r
-
0
9
J
u
l
-
0
9
O
c
t
-
0
9
J
a
n
-
1
0
A
p
r
-
1
0
J
u
l
-
1
0
O
c
t
-
1
0
J
a
n
-
1
1
A
p
r
-
1
1
J
u
l
-
1
1
O
c
t
-
1
1
J
a
n
-
1
2
A
p
r
-
1
2
J
u
l
-
1
2
O
c
t
-
1
2
J
a
n
-
1
3
A
p
r
-
1
3
Weak Indian Rupee Making Exports More Competitive
The continued weakness of the Indian rupee against the US dollar and
Euro has improved India’s competitive positioning in the export market.
Therefore, should the advantage be maintained, the efect will be positive
on the rupee revenue of exporters. However, the beneft would be ofset
for companies with forex debt or higher percentage imports of raw
material over product exports. While rupee depreciation is considered
good for net foreign exchange earners, if there sharp volatility in currency,
it could become very difcult for exporters to, on one hand, hedge the
future foreign currency earnings and on the other hand manage foreign
currency debt.
Textile Outlook
In the mid-long term, the Indian textile industry is expected to grow
strongly with growth being balanced from both domestic consumption
as well as exports demand. In the near-term, domestic demand would
9%
18%
57%
8%
7%
6%
4%
39%
16%
14%
14%
8%
20
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
depend on the macro-economic factors that are expected to gradually
revive in FY2013-14. On exports front, there are both positive and negative
factors. Positive factors include the weak currency and decreasing cost
competitiveness of China that are likely to give positive impetus to the
Indian exports. At the same time, factors like slowdown and uncertainty in
the global markets, volatile foreign exchange rates and increase in cotton
and yarn prices are likely to negatively afect growth and proftability for
the textile exports.
Your company is looking to take a cautious growth approach in the textiles
business – protecting margins through moving into more premium and
diferentiated space, as well as operational measures like greater share
of in-house spinning by leveraging the central and state government
support on investments and gradual addition of capacities depending on
demand upturn. For garmenting, the focus is on strategically increasing
share of vertical business with the global as well as Indian brands,
providing both enhanced business growth as well as demand security
for the fabric manufacturing businesses. The company is also looking to
tactically leverage Bangladesh for greater competitiveness in the global
supply chain, through partnership routes. Lastly, the company is looking
to place selective large bets in the technical textiles segment to create
breakthrough growth opportunities for the future.
Indian Apparel Retail Market
The Indian consumption growth story needs no explanation. Despite the
slow recent economic growth translating into weak consumer sentiments
and demand trends, the larger story of growth of organized retail in India
is expected to continue to gain momentum, with the additional boost of
Ecommerce retailing (commonly known as E-tailing). The total size of
India’s retail market is pegged at USD 490 Bn in 2012 (Source: Technopak),
of which organized retail has a low share of ~7% at USD 34 Bn, while e-Tailing
is currently a nascent model at ~0.1% or USD 0.6 Bn.
The overall retail market expected to grow at 10-12% over the next decade,
with an expected market size of USD 1440 Bn by 2021 (source: Technopak).
The more important trend though, is that while the share of organized
retail in total retail has grown over the last 4-5 years from ~5% in 2007 to
reach ~7% by 2012, it is expected that the combined growth of brick-and-
mortal retailing and e-tailing is expected to take this share to ~20% by 2021.
That would translate into a compounded annual growth rate of over 25%
over a decade!
Indian Retail Market Size
2012
Source: Technopak Analysis
* Retail market sizefor 2021 is at nominal growth
2021
Exhibit 1
Total Retail Market Size USD ~ 1440* bn
Traditional Retail: Brick & Mortar CorporatizedRetail: Brick & Mortar CorporatizedRetail: E-tailling
Total Retail Market Size USD ~ 490 bn
0.6 (0.1%)
34 (6.9%)
76 (5.3%)
1152
(80%)
455
(93%)
212 (14.7%)
Apparel as a category constitutes the largest share of organized retailing at
~30%, driven by factors like higher brand preference in apparel compared
to categories like ‘Food & Grocery’ where fresh availability is a more
primary consumer need. Apparel is also a category that is more promptly
being adopted by the internet buyer, compared to other large retail
categories. Hence both trends put together, apparel is expected to be a
large part of the India organized retail opportunity in 2021, both in the brick
& format as well as in e-tailing.
In the shorter term, organized apparel retail witnessed some impact of
softened consumer sentiments during the last year, refecting in slower
like-to-like (LTL) sales growth in the apparel stores and the overall
industry growth of 4-5% in value terms over FY12-13. However, the gradual
revival expected in the economy in FY13-14, along with some major policy
reforms in this sector, will facilitate improved proftability of the existing
brands as well as promote entry of new brands that will further expand
the market. Three specifc drivers of recovery in apparel demand in FY13-
14 include (a) Restoration of zero excise duty on readymade garments and
made ups announced in the Union Budget 2013-14 (b) Faster clearance of
investment proposal of foreign branded retail and (c) Expected revival in
the overall economy in FY13-14 that will open up the unspent demand for
apparels.
Across the various apparel segments, menswear will continue to be the
largest segment, contributing to ~35% of the total apparel market, while
kidswear is expected to grow faster due to new brand oferings in this
hitherto unexploited market segment.
Your company operates in the branded apparel space through a diverse
portfolio of owned and licensed international brands that have seen
strong growth momentum in the past. The strategy has been to create
several large and high-growth ‘Power brands’ (like Arrow, US Polo, Tommy
Hilfger and Flying Machine) and your company has seen with experience
that these brands start to yield very healthy bottomlines and returns
once they reach a critical size. With many other strong growth brands in
the portfolio (including those acquired recently) like Gant, Nautica, Elle,
Billabong, Ed Hardy, Hanes and Wonderbra, the Arvind approach would be
to gradually make these brands the next set of ‘Power brands’, providing
signifcant topline growth as well as healthy bottomlines. While menswear
market, being the largest and most attractive branded apparel space,
would continue to be dominant in the Arvind portfolio, other important
and attractive segments like women, kids and innerwear are also being
emphasized to grow their share of the business portfolio and align it with
the market growth trends.
Your company operates in the retail space through its MegaMart brand of
stores that have undergone a major transformation in business model over
the last year to be repositioned as a value format and the strategy has also
started to deliver the expected results in terms of improved proftability.
The company has also launched its own brand of ‘Arvind Stores’ to target
the attractive domestic market for fabric retail and custom clothing.
With continued improvements in the existing formats and the addition of
specialty store formats like Debenhams and Next, Arvind will be looking
to become a leading apparel retail player in India and also strive to bring
newer formats to the Indian consumer and ofer them diferentiated
products and retail experience.
RESULT REVIEW
The macroeconomic environment posed many challenges for the
company during the year under review. On domestic front, stagnant
economy, high infation and higher interest rates dampened the consumer
sentiments. On global from Euro zone continued to be in turmoil. On the
top of challenging macroeconomic scenario, our company witnessed
unprecedented event of strike at its Naroda plant in the month of June
2012 leading to loss of production. It is heartening to note that despite
such a challenging environment, our Company has closed the fnancial
year 2012-13 with 8% growth in sales and 7% growth in Operating Earnings
before Interest Depreciation and Taxes. (Operating EBITDA). PAT
(excluding Exceptional Income) has shown a growth of 11% compared to
the previous year.
21
The Standalone Financials of the company is as under:
(` In Crores)
For Year Ended on
Particulars March 31, 2013 March 31, 2012
Amount
% of
Sales Amount
% of
Sales
Revenue from operations
(Net) 3,780 3,494
Other Income 93 136
Total Revenue 3,874 3,630
Cost of materials &
accessories consumed 1,641 43% 1,569 45%
Purchases of Stock in Trade 84 2% 37 1%
Project Expenses 28 1% 14 0%
Changes in inventories of
fnished goods, work-in-
progress and stock-in-trade (166) -4% 4 0%
Employee benefts expense 442 12% 361 10%
Other expenses 1,164 31% 1,009 29%
Total Expenses 3,194 84% 2,993 86%
EBITDA 680 18% 637 18%
Depreciation and
amortization expense 150 4% 131 4%
Finance costs 268 7% 270 8%
Proft before extraordinary
items and tax 261 7% 236 7%
Extraordinary Items - 252
Proft before Tax 261 7% 488 14%
Tax expense: - 54
Proft After Tax 261 7% 434 12%
Revenue, Sales and Operating Income
Total Revenue of the Company under review increased by 7% compared
to previous year. Sales and operating income also increased by 8%. The
Revenue from Denim went down by 4% as a result of Workmen Strike in
the month of June, 2012 which resulted in loss of production. As a result
of expansion in capacity, the Woven Business registered a growth of 26%
in Revenue. Other income aggregating to ` 93 Crs. is mainly consisting of
Proft on Sale of Land and other Fixed Assets, Scrap Income & Interest
Income.
Raw Materials
The raw material cost in absolute terms has increased by around 5%
compared to the previous year. But the raw material cost, as a percentage
to sales, reduced by 2% during the year consequent to cotton prices being
lower in the year 2012-13 compared to the previous year. The average
purchase price for cotton was for the year 2012-13 was lower by 19%
compared to the previous year. Following chart shows the movement
of cotton prices from April, 2012 to March, 2013 domestically as well as
globally:
Cotton Price movement on ICE, USA - $/Lbs
Weekly QCTc1 30-03-2012 - 07-06-2013 (MDS)
End, QCTc1, TradePrice
07-05-2013, 86.52, 87.12, 85.00, 86.86
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
Price
USc
Lbs
84
80
76
72
66
.12
88
86.86
Cotton Price movement on MCX, India – Rs / bale
25000
20000
15000
10000
5000
0
3
0
-0
4
-...
3
1
-0
5
-...
3
0
-0
6
-...
3
1
-0
7
-...
3
1
-0
8
-...
3
0
-0
9
-...
3
1
-1
0
-...
3
0
-1
1
-...
3
1
-1
2
-...
3
1
-0
1
-...
2
8
-0
2
-...
3
1
-0
3
-...
Direct Materials
The direct materials largely include Dyes & Chemicals & Spare parts which
were marginally higher than previous year at ` 307 Crores, showing an
increase by 22% in absolute terms and as a percentage of Sales, it stands at
8% as against 7% in the previous year.
Power & Fuel
Power & Fuel cost this year has gone up by 16% in absolute value. As a
percentage of Sales, it stands at 11% as against 10% in the previous year. On
account of non-availability of Gas, Company is now consuming Grid Power
and also buying the power through Open Access mechanism.
Manpower Cost
The Manpower cost for the year is higher by 23% in absolute value; however,
as a percentage to Sales, it was at 12% compared to 10% in the previous
year. On account of larger volume consequent to addition of new capacity
and several other initiatives being taken by the Company, Manpower Cost
in proportion to Sales is expected to reduce in the coming years.
Other Costs
The other costs have gone up by 15% in absolute terms in tandem with
revenue growth. However as a percentage to sales, it has remained more
or less constant at 31% of Sales as compared to 29% in the previous year.
Operating Margins (Proft)
During the year under review, company’s EBITDA margin has remained
constant at 18%. However, EBIDTA (excluding Other Income) has increased
to 16% for the year as compared to 14% in the previous year. EBIDTA margin
22
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
has improved mainly on account of revenue growth and improved product
& customer mix.
Finance Costs
The fnance cost for the current fnancial year is ` 268 Crores as against
`270 Crores for the previous fnancial year thus remaining at the same
level in absolute terms. The foreign exchange Loss on account of FX rate
changes was ` 15 Crores for the year compared to Loss of ` 18 Crores in the
previous year. Finance Cost as a percentage to Sales decreased by 63 bps
at 7.1%. During the year Company succeeded in negotiating reduction in
Interest Rates as a result of improved Financial and Liquidity Position.
Since around 41% of your Company’s revenue is dollar denominated, it
hedges its position in the foreign exchange market. Hence, for all decision
making purposes, the dollar rate is frozen. The accounting standard
requires restatement of all assets and liabilities at the exchange rate
prevailing at the end of the quarter. Therefore, realized proft or loss on
dollar denominated working capital borrowings are booked in the fnancial
statements.
Depreciation
Depreciation as a percentage to sales has been constant at 4% during the
current year.
Proft before Tax (PBT)
Proft before tax for the year was ` 261 Crores compared to ` 236 Crores in
the previous year, refecting 11% rise during the year consequent to higher
operating proft.
Net Proft (PAT)
Proft after tax stood at ` 261 Crores in the current fnancial year compared
to ` 236 Crores (excluding exceptional item of Proft of ` 252 Crores on sale
of stake in VF Arvind Brands Private Limited) in the previous year marking
Growth of 11%.
Debt
The total debt (including due within one year) of the Company as on 31st
March, 2013 stood at ` 2119 Crores against ` 1770 Crores as on 31st March,
2012. The increase in Total Debt is as a result of additional borrowing during
the year for fnancing Capital Expenditure. Further, the company has raised
this debt under TUFS which entitles Interest Rate Subsidy to the extent of
4% to 5%.
Working Capital & Liquidity
The Current Assets during the year has gone up by 23% in absolute terms &
Current Liabilities has gone up by 7% in absolute terms.
Strike
During the year, Company’s operations were impacted on account of
unforeseen event of strike by its workmen at two of its manufacturing
plants in the month of June, 2012. On account of the strike, there was
loss of production of 6.1 million meters of fabric which resulted in loss
of revenue of ` 95 Crores and loss of EBIDTA of ` 35 Crores. The workers
had gone on strike to press their demand for higher wages. The select
group of workers had gone on strike despite the fact that Textile Labour
Association (TLA) which is the representative union had fled a case in the
Industrial Court demanding higher wages against Ahmedabad Textile Mills’
Association (ATMA), which represents several textile mills including Arvind
Limited. The matter was being heard by full bench of the Industrial Court.
Unfortunately, disregarding the TLA and the sub-judice legal case, the
workers demanded a separate settlement which was neither practically
possible nor legally tenable which compelled the company to take strict
disciplinary action on few workers. After remaining on strike for a little less
than a month, the workers called of the strike unconditionally. The dispute
with the workers has since been amicably resolved with Company agreeing
to hike the wages by about 16%.
BUSINESS REVIEW & DEVELOPMENTS
Denim
The performance of Denim Division was impacted on account of Strike
by the workmen. Due to Strike, there was a loss of Production of 4.3 Mn
Mtrs which resulted into 7% reduction in volume for the year. It is highly
satisfying to note that Denim Division could maintain proftability despite
there being addition in Denim Capacities by about 250 Mn Mtrs in India
which made the markets highly competitive. Denim Business continues
with its strategy of improving Product and Customer Mix so as to achieve
higher Contribution per meter.
Denim Volume:
110.0
90.0
70.0
50.0
11-12 12-13
Mn Mtrs
95.9
-7%
89.2
Woven Fabrics
During the Year, Company expanded the Capacity of Woven Fabrics by
12 Mn Mtrs. On account of this expansion, the Woven Business has seen
growth of 28% in volume and 29% in revenue. It is heartening to note that
there is signifcant increase in businesses with the large global as well as
local customers like GAP, Levis etc. Further, the Operational Excellence
Drive to improve the productivity has resulted into higher Operating
Margins for Woven business.
Woven Fabrics Volume:
11-12 12-13
Mn Mtrs
90.0
70.0
50.0
67.7
28%
86.9
Exchange Rate
The exchange rate of INR against USD, which was 50.8 in April, 2012 reached
to 55.1 in June, 2012 and remained around that level till September, 2012. INR
saw sudden appreciation in October, 2012 and reached to 52.4. It remained
volatile at 53.9, 54.3, 54.1 and 53.2 during November, 2012, December, 2012,
23
January, 2013 & February, 2013 respectively. At the year end, it was 51.1. The
Company had taken forward cover on net dollar exposure and the average
exchange rate for the entire year was in range of INR 49.0 to a US dollar.
SUBSIDIARIES
Amalgamation of Arvind Retail Limited with Arvind Lifestyle
Brands Limited:
You are aware that your Company has been operating its Brands Business
primarily through the subsidiary company Arvind Lifestyle Brands Limited
(ALBL) and Retail Business through another subsidiary company Arvind
Retail Limited (ARL). ARL has now been amalgamated with ALBL, vide the
Order dated 18th April, 2013 passed by the Hon’ble High Court of Gujarat at
Ahmedabad. ARL has been operating under the brand name “MegaMart”,
and had been a pioneer in the Value Retail market ofering many of its own
private brands as well as a wide range of international brands. ALBL is one of
the dominant players in the organized branded apparel market in India, with
portfolio of several large international apparel brands. Both the companies
belong to the same group of management and are engaged in similar
commercial activities. It was therefore thought ft to amalgamate these two
companies with a view to consolidate the commercial activities and thereby
achieve synergistic benefts. It is envisaged that the amalgamation would
facilitate optimal utilization of resources and exercise efcient management
control. The amalgamation will result in reduction of administrative and
operational costs and thus be benefcial to all the concerned parties, viz. the
shareholders, creditors, employees and investors of these companies.
Overview of performance of Arvind Lifestyle Brands Limited:
The subsidiary revenues have grown by 13% during the year compared to
the previous year.
2011-2012 2012-2013
1500
1000
500
1137
1285
This 13% growth comprises of 25% growth of Brands and 2% growth of
MegaMart. There is 21% growth without considering newly acquired
Brands. While Brands registered Like-to-Like growth of 1.7%, MegaMart
registered negative Like-to-Like Growth of 3.8%. This year was extremely
challenging for MagaMart business as there was severe pressure on
operating margins on account of twin factors i.e. Incidence of excise duty
on branded apparels and higher purchased cost of fnished goods as a
result of higher cotton prices. The Company had to take several corrective
steps to restore the operating margins; the major being repositioning
MagaMart from “Discount Store” to “Value Retail” with higher proportion
of private labels, with the value proposition covering the entire range of
men, women & kids segments. These initiatives have yielded the desired
results and the proftability of MegaMart is restored back to yesteryears.
During the year 1.73 lakh sq ft of retail space was added for the Brands
Business and 0.18 lakh sq ft of retail space was added for the MagaMart
Business. With this addition, the distribution strength of the Brands &
Retail businesses stands at 487 Stores with 5 lakh sq ft of retail space for
Brands and 197 Stores with 7.1 lakh sq ft of retail space for MegaMart.
During the year ALBL acquired the India operating licenses for two
international apparel brands – Billabong & Nautica, two international retail
stores brands – Debenhams & Next and one international innerwear brand
– Hanes.
Anup Engineering Limited:
Anup Engineering Limited is engaged in engineering and fabrication
business listed on Ahmedabad Stock Exchange. The Company registered
after tax proft of ` 4.94 Crores during the year.
OUTLOOK
The Company is witnessing strong demand in the international markets
especially for Wovens. However domestic retail market is sluggish which
is likely to keep growth in the Brands and Retail business slow. The sluggish
retail demand may afect the growth of MegaMart. At the same time the
brands like Arrow, US Polo and Tommy Hilfger continue to show lot of
promise for growth. The newer brands added during the last year are also
expected to grow strongly, though on a smaller base, and would provide
additional growth to the business.
Under the above scenario, the Company is expecting overall revenue
growth of over 20% for FY2013-14, on account of volume growth in both
Textiles and Brands & Retail. The Textiles business may achieve growth in
the 12-15% range, whereas Brands & Retail business is expected to grow
strongly at 25%+.
The company expects that the overall margins for the coming year will be
maintained. Margins for the Textiles businesses may improve marginally
due to improved pricing and greater scale and operational efciency,
while margins for the Brands & Retail businesses may fall slightly due to
higher investments in marketing and distribution for the newly acquired
brands.
24
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
The Strategic Help Alliance for Relief to Distressed Area (SHARDA)
Trust and Narottam Lalbhai Rural Development Fund (NLRDF) are the
company’s arms for carrying out the CSR Programmes. SHARDA & NLRDF
have been active in improving the quality of life of the urban poor & rural
poor. During 2012-13, a defnitive step has been taken by launching a study
for collecting information of the workforce and their family members to
design programmes for them.
SHARDA Trust’s Programmes
Arvind Ltd. established SHARDA (Strategic Help Alliance for Relief to
Distressed Areas) Trust in 1995 with a purpose of helping the urban poor
by upgrading their quality of life. Besides improving infrastructure facilities
in distressed areas, providing healthcare facilities and helping the people
upgrade their skills to get well paying jobs, SHARDA trust is now focussing
on providing quality education to students studying in Municipal Schools
since 2006. These educational facilities are being provided by means of
an association with local Government, the Ahmedabad Municipal School
Board.
SHARDA Trust is working with about 1000 students from class V-XII
through ‘Gyanda Education Programme’. Education programme includes
organised academic support as well as grooming students on social,
cultural and personal aspects. Year 2012-13 was especially important for
Trust as the frst batch is completing class XII. These students will now
be going for higher and professional education and subsequently start
earning which will ensure that it is the last generation in poverty for them,
a cherished dream that the Trust and the students have shared together.
Most encouraging incidents are of those few parents whose one child (all
girls) is studying with us in Municipal School and the other child (all boys)
is in private school. After noticing the progress of their girls, the parents
decided to withdraw their children from private school and got them
admitted in Municipal School to be part of Gyanda Education programme.
We consider this as huge recognition of Trust’s eforts for bringing a small
but strong social change. Gyanda’s total enrolment is poised to reach about
1500 students by 2015-16 as our conversion from primary to secondary has
improved. The Trust does plans to initiate new Gyanda Centres.
Beside school education, Trust conducted Basic Computer Familiarization
Programme for 250 children, housewives, working women and working
and non-working men. In addition, about 100 youth were trained for
Basic English Programme. The Trust organised two ‘Yoga Shibirs’ for the
wellbeing of people in community around our Naroda premises during
2012-13. This was conducted by Swami Adhyatmanandji of the Sivananda
Ashram, Ahmedabad. Both the camps were attended by about 300 people
in each camp.
Towards end of 2012, the Trust initiated ambitious plan to collect
comprehensive information about Arvind’s workers and their family
members related to education, health, housing and contact information
and thereby plan welfare and capacity building initiatives to enhance
quality of life. For doing so, a Workers’ Information System was designed
with provisions for generating intended reports. All the information
was collected online. As of March 2013, frst set of study with over 7000
workers has been completed in Ahmedabad region and based on the
Strategy and Programmes for “Corporate Social
Responsibility”2012-13
fndings suggested initiatives were presented to the top management.
2013-14 will witness initiation of activities in Ahmedabad region and
expanding the scope of study to Santej and Bangalore regions to cover
complete workforce.
These activities and programmes have opened up avenues for expansion
of the Trust’s initiatives and for undertaking newer initiatives.
NLRDF’s Programmes
Established in 1978 as Public Charitable Trust, NLRDF is the rural CSR arm
of Arvind Limited. NLRDF directly intervenes at the village level with the
strategy of linking the government programmes with the rural poor and
thereby increasing the efciency and the efectiveness of the delivery
process.
The year under review mainly witnessed programmes for skill upgrading
for livelihood promotion, economic empowerment of widows and
programme for HIV/AIDS awareness and prevention.
Specifcally, 75 youngsters from BPL families received training for mason
work and tool kit for same was given to them to ensure earnings. NLRDF
trained 144 Female Sex Workers and their family members in diferent skill
up-gradation initiatives. Out of which, 111 women received a two months
training for Cutting and Tailoring. They got sewing machines at token cost
to ensure earnings. Other 33 women were trained for applying Mehandi.
NLRDF’s entrepreneurship programmes for widows have its operations
in 20 districts of Gujarat. It has trained about 11000 widows in last 6 years.
During 2012-13, more than 3000 widows were trained. Each one of them
received a kit of their choice worth about ` 5000 for their livelihood. Newly
acquired confdence to step out of their houses which they could not think
of earlier is the noticeable outcome from this programme. Few selected
needy and working widow entrepreneurs are being fnancially supported
for the expansion of their current business.
Another programme worth mentioning is on HIV/AIDs control.
Intervention includes providing services like Behaviour Change
Communication, Counseling, STD treatment and creating enabling
environment and referral and linkages to core population. This has
brought signifcant change in their practice and behaviour. A workshop
on ‘Awareness on HIV/AIDS-prevention and control’ was also organized
for industrial workers in Ahmedabad which was attended by about 500
people.
Under Mamta Taruni Programme, 860 non-school going adolescent girls
from 18 villages were identifed. They are trained for nutrition awareness,
personal hygiene, health care etc.
A state level programme on the occasion of International Women Day 2013
was celebrated on 8
th
March 2013 at Khedbrahma. Around 2500 women
from surrounding villages participated in this one day event and experts
shared with them information on their legal rights, education etc.
Arvind Limited, through SHARDA & NLRDF aspires to help the poor
in urban and rural settings through its programmes and believes that
programmes of social renewal with a business approach will bring lasting
change in society.
25
Report on the Financial Statements
We have audited the accompanying fnancial statements of ARVIND
LIMITED (“the Company”), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for
the year then ended, and a summary of signifcant accounting policies and
other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position, fnancial
performance and cash fows of the Company in accordance with the
Accounting Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 (“the Act”). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the fnancial statements that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these fnancial statements
based on our audit. We conducted our audit in accordance with the
Standards on Auditing issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the fnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the fnancial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company’s preparation and
fair presentation of the fnancial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the fnancial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the fnancial statements give the information
required by the Act in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of afairs of the Company
as at March 31, 2013;
(b) in the case of the Statement of Proft and Loss, of the proft for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows for the year
ended on that date.
Emphasis of Matter
As mentioned in Note No. 43 in respect of early adoption of Accounting
Standard (AS) – 30 on ‘Financial Instruments: Recognition and
Measurement’ issued by the Institute of Chartered Accountants of India
and the clarifcation issued on Application of AS 30, the Company has
measured all its Financial Assets and Liabilities at their respective Fair
Values or at Amortised Cost except for those items whose accounting
treatment is covered by the existing accounting standards notifed by
Companies (Accounting Standard) Rules, 2006. Accordingly, the carrying
amount of Long Term Borrowings would have been higher by ` 4.20 Crores
and carrying value of Hedge Reserve would have been higher by ` 23.64
Crores. Our opinion is not qualifed in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2003 (“the
Order”) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specifed in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which
to the best of our knowledge and belief were necessary for the
purpose of our audit;
b. in our opinion proper books of account as required by law
have been kept by the Company so far as appears from our
examination of those books and proper returns adequate for
the purposes of our audit have been received from branches
not visited by us;
c. the Balance Sheet, Statement of Proft and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the
books of account and with the returns received from branches
not visited by us;
d. in our opinion, the Balance Sheet, Statement of Proft and
Loss, and Cash Flow Statement comply with the Accounting
Standards referred to in subsection (3C) of section 211 of the
Companies Act, 1956 and Accounting Standards (AS) – 30 on
‘Financial Instruments: Recognition and Measurement’ issued
by the Institute of Chartered Accountants of India (ICAI);
e. on the basis of written representations received from the
directors as on March 31, 2013, and taken on record by the
Board of Directors, none of the directors is disqualifed as on
March 31, 2013, from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the Companies
Act, 1956.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N. D. Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
AUDITORS’ REPORT TO THE MEMBERS OF ARVIND LIMITED
26
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
ANNEXURE TO THE AUDITORS’ REPORT
Re: ARVIND LIMITED
Referred to in Paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date,
(i) (a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of its fxed assets.
(b) As explained to us, the fxed assets have been physically verifed by the management during the year in accordance with a phased programme
of verifcation, which in our opinion provides for physical verifcation of all the fxed assets at reasonable intervals. We are informed that no
material discrepancies were noticed on such verifcation.
(c) In our opinion and as per the information and explanations given to us, the Company has not made any substantial disposal of fxed assets
during the year and going concern status of the Company is not afected.
(ii) (a) As explained to us, the inventory has been physically verifed during the year by the management. In our opinion, the frequency of verifcation
is reasonable.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventory followed by
the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on verifcation between the physical
stocks and the book records were not material having regard to the size of the Company, and the same have been properly dealt with.
(iii) The Company has not granted/taken any loans secured or unsecured to/from Companies, frms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Consequently, requirement of clauses (iii,b), (iii,c), (iii,d), (iii,e), (iii,f) and (iii,g) of paragraph 4 of the
order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with
the size of the Company and the nature of its business with regard to purchase of inventory, fxed assets and with regard to the sale of goods and
services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.
(v) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that there were
no contracts or arrangements that need to be entered in the Register maintained under section 301 of the Companies Act, 1956. Consequently,
requirement of clauses (v,a) and (v,b) of paragraph 4 of the order are not applicable.
(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and
58AA or any other relevant provisions of the Act and rules framed thereunder. No order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) The Company has an internal audit system, which in our opinion, is commensurate with the size of the Company and the nature of its business.
(viii) We have broadly reviewed the books of accounts relating to materials, labour and other items of cost maintained by the Company pursuant to the
Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the
opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination
of these records with a view to determine whether they are accurate and complete.
(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
and other material statutory dues applicable to it.
(b) There are no undisputed amounts outstanding as at March 31, 2013 for a period of more than six months from the date they became payable.
(c) Following amounts have not been deposited as on March 31, 2013 on account of any dispute :
Nature of Statute Nature of the dues ` in Crores Period to which the amount relates Forum where matter is pending
Sales Tax Act Sales Tax 11.51 1998-1999, 2002-2003, 2003-2004,
2004-2005, 2005-2006, 2007-2008
High Court
0.05 2002-2003, 2003-2004 Appellate Tribunal
2.23 2006-2007 Joint Commissioner Commercial
Tax (Appeal )
0.90 2006-2007 Joint Commissioner Commercial
Tax (Appeal )
Central Excise Act Excise Duty 9.91 2000-2001, 2001-2002 High Court
3.05 2000-2001, 2001-2002, 2002-2003,
2003-2004, 2005-2006, 2008-2009,
2009-2010
CESTAT
9.18 1999-2000, 2000-2001 Supreme Court
5.47 2000-2001, 2001-2002, 2002-2003 Tribunal
27
Nature of Statute Nature of the dues ` in Crores Period to which the amount relates Forum where matter is pending
Customs Act Custom Duty 0.05 2005-2006, 2006-2007, 2007-08 Joint Commissioner
0.72 1998-1999 to 2006-2007 CESTAT
Finance Act Service Tax 0.61 2004-2005, 2005-2006, 2006-2007,
2007-2008
Additional Commissioner
0.05 2005-2006, 2006-2007 Assistant Commissioner
0.12 2005-2006 CESTAT(Appeal)
0.04 2004-2005, 2005-2006, 2006-2007,
2007-2008
Commissioner
Income Tax Act Fringe Beneft Tax 0.21 2005-2006 ITAT
Income Tax 13.97 2003-2004, 2004-2005, 2005-2006 CIT Appeal
(x) The Company has neither any accumulated losses nor has incurred any cash losses during the fnancial year covered by our audit and in the
immediately preceding fnancial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fnancial
institutions, banks or debenture holders.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/mutual beneft fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the order are not
applicable.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause
(xiv) of paragraph 4 of the order are not applicable.
(xv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the terms and conditions
on which the Company has given guarantees for loans taken by others from banks or fnancial Institutions are not prejudicial to the interest of the
Company.
(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans obtained
during the year were, prima facie, applied by the Company for the purpose for which they were obtained, other than temporary deployment
pending application.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds
raised on short-term basis have not prima facie, been used during the year for long-term investments.
(xviii) During the year, the Company has not made any preferential allotment of shares to persons covered in the register maintained under section 301 of
the Act.
(xix) According to the information and explanations given to us and the records examined by us, the Company has not issued any Secured Debentures
during the year.
(xx) The Company has not raised any money by public issue during the year.
(xxi) Based upon the audit procedure performed by us and as per the information and explanations given to us, we report that no fraud on or by the
Company has been noticed or reported during the course of our audit.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N. D. Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
28
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Note As at
March 31, 2013
As at
March 31, 2012
Equity and Liabilities
Shareholders’ funds
Share Capital 3 258.04 258.04
Reserves and Surplus 4 2,041.47 1,757.96
Non-current liabilities
Long Term Borrowings 5 947.10 707.35
Deferred Tax Liabilities (Net) 6 12.82 12.82
Long Term Provisions 7 11.98 49.51
Current liabilities
Short Term Borrowings 8 1,015.54 895.95
Trade Payables 9 664.48 598.32
Other Current Liabilities 10 245.33 246.26
Short Term Provisions 7 86.96 94.57
Total 5,283.72 4,620.78
Assets
Non-current assets
Fixed Assets
Tangible Assets 11 2,334.07 2,262.61
Intangible Assets 12 5.59 6.45
Capital Work-in-progress 200.32 179.10
Non-current Investments 13 492.86 337.11
Long Term Loans and Advances 14 235.93 189.21
Other Non-current Assets 15 0.54 2.04
Current assets
Inventories 16 877.96 728.42
Trade Receivables 17 442.42 405.55
Cash and Bank Balances 18 150.60 39.37
Short Term Loans and Advances 14 250.24 214.75
Other Current Assets 15 293.19 256.17
Total 5,283.72 4,620.78
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Balance Sheet as at 31st March, 2013
29
` in Crores
Note Year ended
March 31, 2013
Year ended
March 31, 2012
Revenue from operations (Gross) 21 3,795.14 3,511.87
Less : Excise Duty 14.85 17.75
Revenue from operations (Net) 3,780.29 3,494.12
Other Income 22 93.46 135.81
Total Revenue 3,873.75 3,629.93
Expenses:
Cost of materials and accessories consumed 23 1,641.22 1,568.76
Purchases of Stock in Trade 24 84.44 37.40
Project Expenses 28.07 13.60
Changes in inventories of fnished goods, work-in-progress and
stock-in-trade 25 (166.01) 3.57
Employee benefts expense 26 442.22 360.51
Finance costs 27 268.44 270.25
Depreciation and amortization expense 28 150.49 130.51
Other expenses 29 1,163.66 1,009.04
Total Expenses 3,612.53 3,393.64
Proft before exceptional and extraordinary items and tax 261.22 236.29
Exceptional items - -
Proft before extraordinary items and tax 261.22 236.29
Extraordinary Items 30 - 251.80
Proft before Tax 261.22 488.09
Tax expense:
Current Tax (MAT) 53.79 85.15
MAT Credit Entitlement (53.79) (31.29)
Proft for the year 261.22 434.23
Earnings per equity share 35
(Nominal Value per Share ` 10/- (Previous year ` 10/-):
Before Extraordinary Items
Basic & Diluted 10.12 9.16
After Extraordinary Items
Basic & Diluted 10.12 16.83
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Statement of Proft and Loss for the year ended on 31st March, 2013
30
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
A CASH FLOW FROM OPERATING ACTIVITIES
Proft Before taxation 261.22 488.09
Adjustments for:
Depreciation /Amortization 150.49 130.51
Interest Income (24.26) (15.56)
Interest Expenses 244.39 245.77
Dividend Income (0.35) (0.56)
Share of Proft in LLP (0.58) (1.45)
Bad Debts Written Of 0.03 0.32
Provision for Dimunition in value of Investments - 6.48
Provision for Bad Debts 0.23 -
Provision for Retirement Benefts 5.36 4.24
Provision for Wealth Tax 0.20 0.20
Sundry Debit Written of 0.49 1.19
Sundry Credit Balances Appropriated (1.20) (2.83)
Foreign Exchange Diference 0.41 (0.16)
Fixed Assets written of 0.51 2.01
Proft on Sale of Land held for sale (16.12) (67.40)
Proft on Sale of Tangible/Intangible assets (26.13) (24.53)
Loss on sale of Investments 0.02 1.57
Extra Ordinary Item - 333.49 (251.80) 28.00
Operating Proft before Working Capital Changes 594.71 516.09
Working Capital Changes:
Changes in Inventories (149.54) 106.78
Changes in trade payables 67.36 (260.10)
Changes in other current liabilities 10.16 19.07
Changes in provisions 1.56 (1.83)
Changes in loans and advances 5.47 (46.67)
Changes in trade receivables (37.13) 208.90
Changes in other current assets (39.95) (84.75)
Changes in Other Bank Balances 4.28 (6.80)
Net Changes in Working Capital (137.79) (65.40)
Cash Generated from Operations 456.92 450.69
Direct Taxes paid (Net of Income Tax refund) (49.80) (73.11)
Net Cash from Operating Activities 407.12 377.58
B Cash Flow from Investing Activities
Purchase of tangible/intangible assets (263.66) (333.93)
Sale of tangible assets 71.42 126.48
Sale of Land held for sale 16.18 98.78
Changes in Capital Advances 8.79 (13.60)
Share Application Money (65.98) (7.62)
Change in Long Term Investments (90.01) (69.95)
Changes in Loans given (43.17) 11.33
Dividend Income 0.35 0.56
Share of Proft in LLP 0.58 1.45
Interest Income 24.41 15.07
Net cash fow before Extra Ordinary Item (341.09) (171.43)
Proceeds from Sale of Investments in Joint Venture - 257.27
Net cash fow from Investing Activities (341.09) 85.84
Cash Flow Statement for the year ended on 31st March, 2013
31
Cash Flow Statement for the year ended on 31st March, 2013 (Contd.)
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
C Cash Flow from Financing Activities
Issue of Share Capital - 0.23
Dividend Paid (25.64) -
Dividend Distribution Tax Paid (4.19) -
Securities Premium received - 0.11
Changes in long term Borrowings 224.57 (216.23)
Changes in short term borrowings 117.69 0.93
Interest Paid (264.47) (259.18)
Net Cash fow from Financing Activities 47.96 (474.14)
Net Increase/(Decrease) in cash & cash equivalents 113.99 (10.72)
Cash & Cash equivalent at the beginning of the period 26.81 23.32
Add : Adjustment on Amalgamation - 14.21
26.81 37.53
Cash & Cash equivalent at the end of the period 140.80 26.81
a. Particulars As at As at
March 31, 2013 March 31, 2012
Cash and cash equivalents comprise of: (Note 18)
Cash on Hand 0.77 1.02
Cheques on Hand (` 10,000/-) (` 15,000/-)
Balances with Banks* 140.04 25.78
Cash and cash equivalents 140.81 26.80
Efect of Exchange Rate Changes 0.01 (0.01)
Cash and cash equivalents as restated 140.80 26.81
* Includes the following balance which is not available for use by the Company
Unpaid dividend account 0.49 0.33
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
32
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
1. COMPANY BACKGROUND
Arvind Limited is one of the India’s leading vertically integrated
textile companies with the presence of almost eight decades in this
industry. It is among the largest denim manufacturers in the world.
It also manufactures a range of cotton shirting, denim, knits and
bottom weights (Khakis) fabrics and Jeans and Shirts Garments.
Arvind, through its subsidiary company Arvind Lifestyle Brands
Limited, is marketing in India the branded apparel under various
brands and is also licensee in India for various international brands.
The brands portfolio of the company includes International brands
like Arrow, US Polo, Izod, Elle, Cherokee etc. It also operates apparel
Value Retail stores MEGAMART. It also operates the specialty retail
stores under the licensing arrangement with international brands
of Debanhams & Next. Arvind also has the presence in Telecom
business directly and through joint venture companies. Recently
Arvind has made foray in to Technical Textiles on its own and in joint
venture with leading global players.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PREPARATION
The Company follows the accrual method of accounting. The
fnancial statements have been prepared in accordance with
the historical cost convention (except so far as they relate to
(a) revaluation of fxed assets and providing for depreciation
on revalued amounts and (b) items covered under ‘Accounting
Standard (AS) – 30’ on ‘Financial Instruments: Recognition and
Measurement” which have been measured at their fair value),
accounting principles generally accepted in India. The Financial
Statements comply with the requirements of the accounting
standards notifed under Section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and other relevant provisions
of the Companies Act, 1956.
The preparation of fnancial Statements requires the management
to make estimates and assumptions in the reported amounts
of assets and liabilities (including contingent liabilities) as of the
date of the fnancial statements and the reported income and
expenses during the reporting period. Management believes that
the estimates used in preparation of the fnancial statements are
prudent and reasonable. Future results could difer from these
estimates.
All assets and liabilities have been classifed as current or non-
current as per the Company’s normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition
of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current – non current classifcation of
assets and liabilities.
(B) INFLATION
Assets and liabilities are recorded at historical cost to the Company
(except so far as they relate to (a) revaluation of fxed assets and
providing for depreciation on revalued amounts and (b) items
covered under ‘Accounting Standard (AS) – 30’ on ‘Financial
Instruments: Recognition and Measurement” which have been
measured at their fair value). These costs are not adjusted to refect
the changing value in the purchasing power of money.
(C) REVENUE RECOGNITION
(C.1) Sales and operating income includes sale of products, by-
products and waste, income from job work services and gain
or loss on forward contracts. Sales are recognized based
on passage of title to goods which generally coincides with
dispatch. Revenue from export sales are recognized on
shipment basis. Sales are stated net of returns, excise duty
& Sales Tax/VAT. Export incentives are accounted on accrual
basis at the time of export of goods, if the entitlement can
be estimated with reasonable accuracy and conditions
precedent to claim are fulflled.
(C.2) Revenue from job work services is recognized based on the
services rendered in accordance with the terms of contracts.
(C.3) Revenue in respect of projects for Construction of Plants
and Systems, execution of which is spread over diferent
accounting periods, is recognised on the basis of percentage
of completion method in accordance with Accounting
Standard 7 – Accounting for Construction Contracts.
Percentage of completion is determined by the proportion
that contract costs incurred for work done till date bears to
the estimated total contract cost.
Diference between costs incurred plus recognised proft/
less recognised losses and the amount invoiced is treated as
contract in progress.
Determination of revenues under the percentage of
completion method necessarily involves making estimates by
the Company, some of which are of a technical nature, relating
to the percentage of completion, costs to completion,
expected revenue from the contract and the foreseeable
losses to completion.
(C.4) Claims receivable on account of Insurance are accounted
for to the extent the Company is reasonably certain of their
ultimate collection.
(D) VALUATION OF INVENTORY
(D.1) The stock of Work-in-progress and fnished goods of the Yarn,
Fabric and Branded Garment has been valued at the lower of
cost and net realizable value. The cost has been measured on
the standard cost basis and includes cost of materials and
cost of conversion.
(D.2) All other inventories of stores, consumables, raw materials
(Electronics Division), project material at site are valued at
cost. The stock of waste is valued at market price. The other
raw materials, fnished goods and stock at branches are valued
at lower of cost and net realizable value. Cost is measured
on actual average for the whole year. Excise duty wherever
applicable is provided on fnished goods lying within the
factory and bonded warehouse at the end of the year.
(E) FIXED ASSETS & DEPRECIATION
Tangible Assets
(E.1) Fixed assets are stated at their original cost of acquisition/
revalued cost wherever applicable less accumulated
depreciation and impairment losses. Cost comprises of
all costs incurred to bring the assets to their location and
working condition.
(E.2) Items of fxed assets that have been retired from active use
and are held for disposal are stated at the lower of their net
book value and net realisable value and are shown separately
in the fnancial statements. Any expected loss is recognised
Notes to fnancial statements
33
immediately in the Statement of Proft and Loss.
(E.3) Exchange rate gain or loss on foreign currency loans related
to acquisition of depreciable assets are being capitalized as
per the notifcation dated 31
st
March, 2009 as amended from
time to time issued by Ministry of Corporate Afairs, New
Delhi.
(E.4) Depreciation on Revalued Fixed Assets is calculated on
the residual life of the assets or as per rates specifed in the
Schedule XIV to the Companies Act, 1956 whichever is higher.
(E.5) Additions to fxed assets after 1st October 2006 have been
stated at cost net of CENVAT wherever applicable.
(E.6) Directly identifable preoperative expenses of new projects
of capital nature under implementation are carried forward
under capital work-in-progress, pending capitalization.
(E.7) Depreciation on Fixed Assets is provided, pro rata for the
period of use, on Straight Line Method (SLM), as per rates
specifed in the Schedule XIV to the Companies Act, 1956
except for the following which are based on management’s
estimate of useful lives of the fxed assets:
Car Vehicles: 20%; Leasehold Improvements: 10%
(E.8) Depreciation on impaired asset is provided on the asset’s
revised carrying amount, over its remaining useful life.
(E.9) Depreciation on exchange rate diference capitalized
is provided over the balance life of the assets as per the
notifcation dated 31
st
March, 2009 as amended from time to
time issued by the Ministry of Corporate Afairs.
(E.10) Individual assets costing less than ` 5,000/- have been fully
depreciated in the year of purchase on prorata basis.
(E.11) Revaluation Reserve on Assets sold is transferred to General
Reserve.
Intangible Assets
(E.12) Intangible assets are stated at their cost of acquisition,
less accumulated amortization and impairment losses. An
intangible asset is recognised, where it is probable that the
future economic benefts attributable to the asset will fow
to the enterprise and where its value/cost can be reliably
measured.
(E.13) The Company capitalizes software and related
implementation costs where it is reasonably estimated that
the software has an enduring useful life.
(E.14) Software is depreciated over management estimate of its
useful life of 5 years and Patent/Knowhow is depreciated over
its useful validity period.
(F) IMPAIRMENT OF ASSETS
An asset is considered as impaired in accordance with Accounting
Standard 28 on Impairment of Assets when at balance sheet date
there are indications of impairment and the carrying amount of
the asset, or where applicable the cash generating unit to which the
asset belongs, exceeds its recoverable amount (i.e. the higher of the
asset’s net selling price and value in use). The carrying amount is
reduced to the recoverable amount and the reduction is recognized
as an impairment loss in the Statement of Proft and Loss
Assessment is also done at each Balance Sheet date as to whether
there is any indication that an impairment loss recognised for an
asset in prior accounting periods may no longer exist or may have
decreased.
(G) INVESTMENTS
(G.1) Investments are classifed as Long Term Investments and
Current Investments. Long term investments are stated
at cost less permanent diminution in value, if any. Current
Investments are stated at lower of cost and net realizable value.
(G.2) Investments in subsidiaries are valued at cost less any
provision for impairment. Investments are reviewed for
impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable.
(G.3) Investment property: Investment in buildings that are
not intended to be occupied substantially for use by, or in
the operations of, the Company, have been classifed as
investment property. Investment properties are carried at
cost less accumulated depreciation.
(H) FOREIGN CURRENCY TRANSACTIONS
(H.1) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(H.2) Monetary items denominated in foreign currencies at the
year end are restated at year end rates.
(H.3) Non-monetary foreign currency items are carried at cost.
(H.4) The Company has opted to avail the choice provided under
paragraph 46A of AS 11: The Efects of Changes in Foreign
Exchange Rates inserted vide Notifcation dated December
29, 2011. Consequently, All long term foreign currency
monetary items consisting of loans which relate to acquisition
of depreciable capital assets at the end of the year have been
restated at the rate prevailing at the balance sheet date. The
diference arising as a result has been added to or deducted
from the cost of the assets. Exchange rate diference on
other long term foreign currency loans is carried to ‘Foreign
Currency Monetary Item Translation Diference Account’ to
be amortized up to the period of loan or up to March 31, 2020
whichever is earlier.
(H.5) Any income or expense on account of exchange diference
either on settlement or on translation other than as
mentioned in (H.4) above is recognised in the Statement of
Proft and Loss.
(H.6) Expenses of overseas ofces are translated and accounted at
the monthly average rate.
(I) DERIVATIVES & COMMODITY HEDGING TRANSACTIONS
(I.1) In order to hedge its exposure to foreign exchange, interest
rate and commodity price risks, the Company enters into
forward, option, swap contracts and other derivative
fnancial instruments. The Company neither holds nor issues
any derivative fnancial instruments for speculative purposes.
(I.2) Derivative fnancial instruments are initially recorded at their
fair value on the date of the derivative transaction and are
re-measured at their fair value at subsequent balance sheet
dates.
(I.3) Changes in the fair value of derivatives that are designated
and qualify as cash fow hedges and are determined to be an
efective hedge are recorded in hedging reserve account.
To designate a forward contract or option as an efective
hedge, management objectively evaluates and evidences
with appropriate supporting documents at the inception of
Notes to fnancial statements
34
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
each contract whether the contract is efective in achieving
ofsetting cash fows attributable to hedged risk. Any
cumulative gain or loss on the hedging instrument recognised
in hedging reserve is kept in hedging reserve until the forecast
transaction occurs or the hedged accounting is discontinued.
Amounts deferred to hedging reserve are recycled in the
Statement of Proft and Loss in the periods when the hedged
item is recognised in the Statement of Proft and Loss or
when the portion of the gain or loss is determined to be an
inefective hedge.
(I.4) Derivative fnancial instruments that do not qualify for hedge
accounting are marked to market at the balance sheet date
and gains or losses are recognised in the Statement of Proft
and Loss immediately.
(I.5) Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated or exercised, or no
longer qualifes for hedge accounting. If a hedged transaction
is no longer expected to occur, the net cumulative gain or loss
recognised in hedging reserve is transferred to proft or loss
for the year.
(J) EMPLOYEE BENEFITS
(J.1) The Company has Defned Contribution Plans for post
employment benefts namely Provident Fund and
Superannuation Fund which are recognized by the Income Tax
Authorities. These funds are administered through trustees
and the Company’s contributions thereto are charged
to revenue every year. The Company also pays insurance
premiums to fund a post-employment medical assistance
scheme, a Defned Contribution Plan administered by ICICI
Lombard General Insurance Company Limited which is
charged to revenue every year. The Company’s Contribution
to State Plans namely Employee’s State Insurance Fund and
Employee’s Pension Scheme are charged to revenue every
year.
(J.2) The Company has Defned Beneft Plans namely leave
encashment / compensated absences and Gratuity for all the
employees, the liability for which is determined on the basis
of an actuarial valuation at the year end and incremental
liability, if any, is provided for in the books. The actuarial
valuation is done based on Projected Unit Credit Method.
Gratuity scheme is administered through trust recognised
by the Income Tax Authorities and / or by Life Insurance
Corporation of India.
(J.3) Actuarial Gains and Losses comprise of experience
adjustments and the efects of changes in actuarial
assumptions and are recognised immediately in the
Statement of Proft and Loss as income or expense.
(K) BORROWING COST
Borrowing costs include interest, fees and other charges incurred
in connection with the borrowing of funds. It is calculated on the
basis of efective interest rate in accordance with Accounting
Standard (AS) -30 and considered as revenue expenditure and
charged to Statement of Proft and Loss for the year in which it is
incurred except for borrowing costs either generally or specifcally
attributed directly to the acquisition/improvement of qualifying
assets up to the date when such assets are ready for intended use
which are capitalised as a part of the cost of such asset.
(L) LEASE ACCOUNTING
(L.1) Assets acquired under Finance Lease are segregated from
the assets owned and recognized as asset at an amount equal
to the fair value of the leased assets at the inception of the
lease or the present value of the minimum lease payments
whichever is lower with corresponding outstanding liability.
(L.2) Lease rental payable on such fnance lease has been
apportioned between fnance charge and the reduction
in the outstanding liability. The fnance charge has been
allocated to periods during the lease term so as to produce
constant periodic rate of interest on the remaining balance
of liability for each period.
(L.3) Lease Rentals for assets acquired under operating lease are
recognised as an expense in Statement of Proft & Loss on a
straight line basis over the lease term.
(M) TAXES ON INCOME
(M.1) Tax expense consists of both current as well as deferred
tax. Current tax represents amount of income tax payable
including the tax payable u/s 115JB, if any, in respect of taxable
income for the year.
(M.2) Minimum Alternate Tax Credit is recognised as an asset only
when and to the extent there is convincing evidence that the
Company will pay normal income tax within the specifed
period.
(M.3) Deferred tax is recognised on timing diference between the
accounting income and the taxable income for the year that
originates in one period and are capable of reversal in one
or more subsequent periods. Such deferred tax is quantifed
using the tax rates and laws enacted or substantively enacted
as on the Balance Sheet date.
(M.4) Deferred tax asset is recognised and carried forward to
the extent that there is a virtual certainty supported by
convincing evidence that sufcient future taxable income
will be available against which such deferred tax asset can be
realized.
(N) EARNING PER SHARE
The Company reports basic and diluted Earnings Per Share (EPS)
in accordance with Accounting Standard 20 on Earnings Per Share.
Basic EPS is computed by dividing the net proft or loss for the year
by the weighted average number of Equity shares outstanding
during the year. Diluted EPS is computed by dividing the net proft
or loss for the year by the weighted average number of equity shares
outstanding during the year as adjusted for the efects of all dilutive
potential equity shares, except where the results are anti-dilutive.
(O) PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS
Provisions involving a substantial degree of estimation in
measurement are recognized when there is a present obligation
as a result of past events and it is probable that there will be an
outfow of resources. Contingent liabilities are not recognized but
are disclosed in the accounts by way of a note. Contingent assets are
neither recognized nor disclosed in the fnancial statements.
(P) CAPITAL ISSUE EXPENSES
Expenses on issue of Shares, Debentures and GDRs are being
adjusted against Securities Premium Account as permitted by
section 78 of the Companies Act.
Notes to fnancial statements
35
Notes to fnancial statements
` in Crores
3 Share Capital As at
March 31, 2013
As at
March 31, 2012
Authorised
Equity Shares
565,000,000 Shares (Previous Year 565,000,000) 565.00 565.00
Par Value of ` 10/- per share
Preference Shares
10,000,000 Shares (Previous Year 10,000,000) 100.00 100.00
Par Value of ` 100/- per share
665.00 665.00
Issued
Equity Shares
258,043,969 Shares (Previous Year 254,633,441) 258.04 254.63
Par Value of ` 10/- per share
258.04 254.63
Subscribed and fully paid up
Equity Shares
258,043,069 Shares (Previous Year 254,632,541) 258.04 254.63
Par Value of ` 10/- per share fully paid up
Forfeited Shares
900 Shares (Previous Year 900)
(` 4,500/- originally paid up (Previous Year ` 4,500/-)
Equity Shares Suspense Account - 3.41
Total 258.04 258.04
a Reconciliation of Number of Equity Shares
Particulars
As At March 31,2013 As At March 31,2012
No. of Shares ` in Crores No. of Shares ` in Crores
Balance at the beginning of the year 254,632,541 254.63 254,400,041 254.40
Add :
Shares alloted persuant to exercise of Employee Stock Option Plan - - 232,500 0.23
Shares alloted to the shareholders of Amalgamated Company 3,410,528 3.41 - -
Balance at the end of the year 258,043,069 258.04 254,632,541 254.63
b Rights, Preferences and Restrictions attached to Shares
Equity Shares:
The Company has one class of shares referred to as equity shares having a par value of ` 10 each. Each shareholder is entitled to one vote per share
held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except
in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their shareholding.
c Details of Shares held by Shareholders holding more than 5% of the aggregate shares in the Company
Particulars
As At
March 31,2013
As At
March 31,2012
Aura Securities Private Limited 9,57,90,590 8,57,38,882
37.12% 33.67%
Life Insurance Corporation of India 1,65,85,134 1,65,58,953
6.43% 6.50%
d Shares reserved for issue under options
Refer note 36 for details of shares to be issued under options
e Shares allotted as fully paid up pursuant to contract without payment being received in cash (during 5 years immediately preceding
March 31, 2013)
34,10,528 Equity Shares of ` 10 each were issued during the year to the erstwhile shareholders of Arvind Products Limited pursuant to the Scheme of
Amalgamation without payment being received in cash.
f Proposed Dividend
The fnal dividend proposed for the year is as follows:
Particulars
As At
March 31,2013
As At
March 31,2012
On Equity Shares of ` 10/- each
Dividend per Equity Share (` ) 1.65 1
Percentage of Dividend Proposed 16.50% 10%
36
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
` in Crores
4 Reserves and Surplus As at
March 31, 2013
As at
March 31, 2012
Captial Reserve
Balance as per last fnancial statements 26.71 26.71
General Reserve
Balance as per last fnancial statements 26.16 5.79
Add: Amount transferred from Revaluation Reserve 5.24 20.37
Add: Amount transferred from Surplus in Statement of Proft & Loss 20.00 -
Balance at the end of the year 51.40 26.16
Securities Premium Account
Balance as per last fnancial statements 653.54 653.43
Add: Addition during the year - 0.11
Balance at the end of the year 653.54 653.54
Captial Redemption Reserve
Balance as per last fnancial statements 69.50 69.50
Revaluation Reserve
Balance as per last fnancial statements 284.82 305.86
Add: Addition during the year (Note 11c) 8.34 -
293.16 305.86
Less: Amount transferred to General Reserve 5.24 20.37
Less: Loss on Compulsory Acquisition adjusted 10.13 0.67
Balance at the end of the year 277.79 284.82
Hedge Reserve (Note 43)
Balance as per last fnancial statements (98.25) 31.89
Add: Adjustment during the year (Net) 74.61 (130.14)
Balance at the end of the year (23.64) (98.25)
Foreign Currency Monetary Item Translation Diference Account
Balance as per last fnancial statements (4.19) 0.75
Add: Adjustment during the year (Net) (0.71) (4.94)
Balance at the end of the year (4.90) (4.19)
Investment Revaluation Reserve
Balance as per last fnancial statements - (2.19)
Add: Adjustment during the year (Net) - 2.19
Balance at the end of the year - -
Surplus in Statement of Proft and Loss
Balance as per last fnancial statements 799.67 450.12
Add/(Less): Adjustments on Amalgamation
Proft of Amalgamated Company - 1.62
Amount transferred to Statement of Proft and Loss on account of Amalgamation - (56.31)
799.67 395.43
Add: Proft for the year 261.22 434.23
1,060.89 829.66
Less : Appropriation
Transfer to General Reserve 20.00 -
Proposed dividend on Equity Shares for the year 42.58 25.80
Dividend distribution tax on Proposed dividend on Equity Shares 7.24 4.19
Balance at the end of the year 991.07 799.67
Total 2,041.47 1,757.96
37
` in Crores
5 Long Term Borrowings Non- Current portion Current Maturities
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Secured:
Term Loans :
From Banks 785.02 603.46 130.46 136.35
From Financial Institutions and Others 159.50 101.31 22.90 17.93
Unsecured:
From Financial Institutions 2.58 2.58 - -
Deferred Electricity Duty - - 3.12 12.69
947.10 707.35 156.48 166.97
Amount disclosed under the head “Other Current Liabilities” (Note 10) - - 156.48 166.97
Total 947.10 707.35 - -
a Borrowings As At
March 31, 2013
As At
March 31, 2012
At Amortized Cost 1,103.58 874.32
At Original Cost 1,107.78 873.32
b Nature of Security:
Term Loans of ` 1097.88 Crores
i Loans amounting to ` 1061.27 Crores are secured by (a) frst charge on all the Immovable Properties, Movable Properties, Intangible
Properties and General Assets of the Company presently relating to the Textile Plants and all Immovable Properties, Movable Properties,
Intangible Properties and General Assets acquired by the Company at any time after execution of and during the continuance of the Indenture
of Mortgage; (b) additional charge by way of mortgage on Immovable Properties at villages Jethlaj, Karoli, Vadsar, Moti Bhoyan, Santej and
Khatrej; (c) charge on the Company’s Trademarks and (d) Secured by second charge on all the Company’s Current Assets both present and
future relating to the Textile Plants. Out of these ` 837.47 Crores are additionally secured by frst charge on Movable Fixed Assets of Jeans and
Shirts Garment divisions at Bangalore. The Company is in the process of creating security in respect of loans amounting to ` 72.76 Crores.
ii Loans amounting to ` 34.22 Crores are secured by frst charge on all the Fixed Assets of Intex, Cotspin, Bottom Weight and Ankur divisions of
the Company and second charge on the entire Current Assets both present and future relating these divisions.
iii Loan of ` 1.34 Crores is secured by frst charge on Company’s Immovable Property situated at Ramnagar, Bangalore.
iv Loans of ` 1.05 Crores are secured by hypothecation of related vehicles.
“Textile Plants” means all immovable properties, and all movable properties of the Company, including movable machinery, machinery
spares, tools and accessories, but excluding Investments and excluding current assets charged in favour of the Working Capital Lenders, at
the following textile plants of the Company:
a) Naroda Road, District Ahmedabad
b) Village Santej at Taluka Kalol, District Mehsana
c) Village Khatrej at Taluka Kalol, District Mehsana
d) Asoka Spintex Division at Naroda Road, District Ahmedabad
c Rate of Interest and Terms of Repayment
Particulars ` in Crores Range of Interest (%) Terms of Repayment from Balance sheet date
From Banks
Rupee Loans 856.91 11% to 13% Repayable in quarterly instalments ranging between
8 to 24 with moratorium period in some of the loans
Foreign Currency Loans 58.56 LIBOR+3.40% Repayable in 8 equal half yearly instalments starting
from September 2015
From Financial Institutions and Others
Rupee Loans 157.39 11% to 12.30% Repayable in equal quarterly instalments ranging
between 12 to 24
Rupee Loans 1.34 15.25% Repayable in 25 monthly instalments
Foreign Currency Loans 22.63 LIBOR+ 3.75% Repayable in 14 equal quarterly instalments
Kotak Mahindra Prime Limited - Hire
Purchase Loan
1.05 8% to 10% Monthly payment of Equated Monthly Instalments
beginning from the month subsequent to taking the
loans
Notes to fnancial statements
38
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
6 Deferred Tax
In terms of the provisions of the Accounting Standard – 22 “Accounting for Taxes on Income” notifed by Companies (Accounting Standards) Rules,
2006, there is a net deferred tax asset on account of accumulated business losses and unabsorbed depreciation.
In compliance with provisions of Accounting Standard and based on General Prudence, the Company has not recognised the deferred tax asset
nor written back excess deferred tax liability, while preparing the accounts of the year under review.
` in Crores
Long Term Short Term
7 Provisions As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Provision for Employee Benefts 10.83 8.11 11.32 7.14
Provision for Losses on Derivative 1.15 41.40 17.40 53.23
Contracts
Proposed Dividend - - 42.58 25.80
Dividend Distribution Tax - - 7.24 4.19
Provision for Income Tax - - 7.17 3.18
(Net of Advance Tax of ` 198.88
Crores, Previous Year ` 149.08 Crores)
Provision for Wealth tax - - 1.23 1.03
Provision for Loyalty Program Reward
Points (Note a) - - 0.02 -
Total 11.98 49.51 86.96 94.57
a Provision for Loyalty Program Reward Points
The Company has made provision for customer loyalty program reward points. The movement in provision for those reward points are given
below:
` in Crores
Particulars As at
March 31, 2013
As at
March 31, 2012
Balance as per last fnancial statements - -
Add : Provision made during the year 0.02 -
Balance at the end of the year 0.02 -
8 Short Term Borrowings As at
March 31, 2013
As at
March 31, 2012
Secured:
Working Capital Loans repayable on demand from Banks 963.55 855.96
963.55 855.96
Unsecured:
Under Buyer’s Credit Arrangement 49.87 38.07
Intercorporate Deposits
From Related Parties 0.26 0.42
From Others 1.86 1.50
51.99 39.99
Total 1,015.54 895.95
Notes to fnancial statements
39
a Nature of Security
Cash Credit and Other Facilities from Banks
Secured by frst charge on all the Company’s Current Assets presently relating to the Textile Plants and all the Current Assets acquired by the
Company at any time after the execution of and during the continuance of the Indenture of Mortgage. They are also secured by a second charge over
all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants
and all Immovable Properties, Movable Properties, Intangible Properties and General Assets acquired by the Company at any time after execution
of and during the continuance of the Indenture of Mortgage. Some of the facilities are additionally secured by second charge on movable Plant and
Machinery of the Jeans and Shirts Garment divisions at Bangalore.
“Textile Plants” means all immovable properties, and all movable properties of the Company, including movable machinery, machinery spares, tools
and accessories, but excluding Investments and excluding current assets charged in favour of the Working Capital Lenders, at the following textile
plants of the Company.
a) Naroda Road, District Ahmedabad
b) Village Santej at Taluka Kalol, District Mehsana
c) Village Khatrej at Taluka Kalol, District Mehsana
d) Asoka Spintex Division at Naroda Road, District Ahmedabad
b Rate of Interest
i. Working Capital Loans from banks carry interest rates ranging from 9.70% to 15.25% per annum.
ii. Inter Corporate Deposits carry interest rates 12% and 12.25% per annum.
` in Crores
9 Trade Payables
As at
March 31, 2013
As at
March 31, 2012
Creditors in respect of Goods and Services (Note a) 472.69 503.85
Acceptances 191.79 94.47
Total 664.48 598.32
a The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development
(MSMED) Act, 2006 and hence disclosures as required under Section 22 of The Micro, Small and Medium Enterprise Development (MSMED) Act,
2006 regarding:
(a) Amount due and outstanding to suppliers as at the end of accounting year;
(b) Interest paid during the year;
(c) Interest payable at the end of the accounting year; and
(d) Interest accrued and unpaid at the end of the accounting year have not been given.
The Company is making eforts to get the confrmations from the suppliers as regard to their status under the said Act.
` in Crores
10 Other Current Liabilities
As at
March 31, 2013
As at
March 31, 2012
Current maturities of long-term borrowings (Note 5) 156.48 166.97
Interest accrued but not due on borrowings 4.57 5.33
Income received in advance 1.00 2.38
Advances from Customers 14.48 15.93
Payable to employees 44.59 33.35
Statutory dues including Provident Fund and Tax
deducted at Source 7.23 5.90
Security Deposits 6.85 3.81
Investor Education and Protection Fund shall be credited by the following amount namely :
Unpaid dividend (Note a) 0.49 0.33
Book Overdraft 0.44 1.49
Others 9.20 10.77
Total 245.33 246.26
a There are no amounts due for payment to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end.
Notes to fnancial statements
40
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
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41
Notes to fnancial statements
12 Intangible Assets
` inCrores
Particulars
Gross Block Amortization Net Block
As on
01.04.2012
Acquistion
through
Amalgamation
Additions Disposals Other
Adjustments
As on
31.03.2013
As on
01.04.2012
For the year Deductions As on
31.03.2013
As on
31.03.2013
As on
31.03.2012
Own Assets
Patent and Technical
Knowhow
0.33 - 0.14 - - 0.47 0.20 0.07 - 0.27 0.20 0.13
Computer Software 24.60 - 0.87 - 0.01 25.48 18.28 1.81 - 20.09 5.39 6.32
Total 24.93 - 1.01 - 0.01 25.95 18.48 1.88 - 20.36 5.59 6.45
Previous Year 24.65 0.01 1.23 0.96 - 24.93 17.48 1.92 0.92 18.48 6.45 7.17
a Dtails of Borrowing Cost and Exchange Diferences:
` in Crores
Particulars
Other Adjustements
For the year
2012-2013 2011-2012
Borrowing Cost 0.01 -
Total 0.01 -
13 Non Current Investments ` in Crores
Particulars
Face Value Per
Share (`)
No of Shares As at
March 31, 2013
As at
March 31, 2012
Investment Property (at cost less accumulated depreciation)
Cost of Ofce Building given on Operating Lease 13.70 13.70
Less: Accumulated Depreciation 3.35 3.13
10.35 10.57
Trade Investments (Valued at Cost unless stated otherwise)
Investments in Government Trust Securities
National Saving Certifcates (` 23,000/-) (` 23,000/-)
(Lodged with Sales Tax and Government Authorities)
Investments in Fully Paid Equity Shares
In Subsidiaries
Quoted
Anup Engineering Limited** 100 300,000 3.50 3.50
Unquoted
Arvind Brands and Retail Limited 2 52,000,000 249.10 189.10
(2,000,000 Shares purchased during the year)
Asman Investments Limited 10 65,500 0.07 0.07
(At cost less provision for other than temporary diminution of
` 6.48 Crores, Previous Year ` 6.48 Crores)
Syntel Telecom Limited 10 50,000 0.05 0.05
Arvind Accel Limited 10 50,000 0.05 0.05
Arvind Infrastructure Limited 10 1,050,000 10.05 0.05
(1,000,000 Shares purchased during the year)
Arvind Worldwide Inc., Delaware* (Share without par value) 500 0.07 0.07
Arvind Textile Mills Limited 10 Taka 320,000 1.53 1.53
Arvind Spinning Park Private Limited 10 10,000 0.01 -
(Shares acquired during the year)
42
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
13 Non Current Investments ` in Crores
Particulars
Face Value Per
Share (`)
No of Shares As at
March 31, 2013
As at
March 31, 2012
Arvind Processing Park Private Limited 10 10,000 0.01 -
(Shares acquired during the year)
In Joint ventures (Unquoted)
Arudrama Developments Private Limited 100 50,000 22.00 22.00
Tommy Hilfger Arvind Fashions Private Limited 10 11,461,839 31.55 13.50
(2,482,406 shares purchased during the year)
Arya Omnitalk Wireless Solutions Private Limited 10 1,000,000 1.00 1.00
Arya Omnitalk Radio Trunking Services Private Limited 10 1,005,000 6.01 6.01
In Joint ventures Subsidiaries (Unquoted)
Arvind Goodhill Suit Manufacturing Private Limted 10 10,200 0.01 -
(Shares acquired during the year)
Arvind OG Nonwowen Private Limited 10 10,000 0.01 -
(Shares acquired during the year)
Arvind PD Composites Private Limited 10 58,650 4.85 3.12
(17,340 Shares acquired during the year)
Arvind Niloy Exports Private Limited 100 Taka 28,000 0.19 -
(Shares acquired during the year)
In Limited Liability Partnership (Unquoted)
Arvind and Smart Value Homes LLP 61.95 61.15
Others
Ahmedabad Cotton Merchants’ Co-operative Shops and 10 10 (` 2,500/-) (` 5,000/-)
Warehouses Society Limited
(10 shares sold during the year)
Gujarat Cloth Dealers Co-operative Shops and Warehouses 10 10 (` 1,000/-) (` 1,000/-)
Society Limited
Amazon Textile Private Limited 10 50,000 0.87 1.69
(50,000 shares sold during the year)
Other Investments (Valued at Cost)
In Quoted Equity Shares
Atul Limited 10 773,641 10.41 10.41
Amol Decalite Limited** 10 16,500 0.06 0.06
403.35 313.36
Share Application Money 79.16 13.18
Total 492.86 337.11
* Revalued and adjusted in 2001-2002 as per the scheme of arrangement and the direction of High Court.
a Aggregate amount of quoted investments 13.97 13.97
Market value of quoted investments 26.72 18.37
Aggregate amount of unquoted investments 389.38 299.39
Value of investment property 10.35 10.57
Aggregate provision for diminution in value of investments 6.48 6.48
** Listed but not quoted and book value is taken as market value.
b Disclosure as per AS 13 - Accounting for Investments
Long Term Investments 403.35 313.36
Current Investments - -
Total 403.35 313.36
(Contd.)
43
Notes to fnancial statements
` in Crores
Long Term Short Term
14 Loans and Advances
(Unsecured, Considered good unless otherwise stated)
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Capital Advances 66.31 75.10 - -
Security Deposits 24.07 21.93 3.79 -
Loans:
To Related Parties - - 82.48 39.30
To Employees 4.61 5.16 1.74 1.66
To Others - - 23.00 22.54
MAT Credit Entitlement 140.71 86.92 - -
Advances recoverable in cash or in kind or for value to be received - - 111.48 129.60
Prepaid Expenses 0.23 0.10 8.80 4.01
Balances with Government Authorities - - 0.10 0.13
CENVAT/Custom Duty Receivable - - 18.85 17.51
Total 235.93 189.21 250.24 214.75
` in Crores
Non Current Current
15 Other Assets
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Non Current Bank Balances (Note 18) 0.54 2.04 - -
Land held for Sale - - 99.43 102.21
Interest Accrued - - 0.68 0.83
Unbilled Revenue - - - 4.37
Income Receivable - - 11.54 15.65
Receivable other than trade - - 122.05 80.00
Export Incentive Receivable - - 59.49 53.11
Total 0.54 2.04 293.19 256.17
` in Crores
16 Inventories
As at
March 31,
2013
As at
March 31,
2012
Raw Materials and Accessories 219.70 246.68
In Transit - 0.01
Fuel 2.63 2.56
Stores and Spares 49.86 40.20
Work-in-Progress 347.00 322.43
Finished Goods 225.05 101.09
Finished Goods in Transit 0.62 0.31
By Product 0.50 -
Stock in Trade 25.83 9.73
Project Work in Progress 5.21 3.45
Waste 1.56 1.96
Total 877.96 728.42
` in Crores
16
a
Inventories (Contd.)
Details of Inventory
As at
March 31,
2013
As at
March 31,
2012
Raw Material and Accesories
Cotton 150.86 198.52
Yarn 48.38 32.96
Fibre 7.03 2.58
Fabric 6.49 6.63
Accessories 5.98 5.21
Electronics 0.96 0.78
Total 219.70 246.68
Work-in-Progress
Fabric including Grey 197.32 180.87
Sizing/Yarn/Fibre 115.87 108.65
Electronics 1.00 0.54
Garments 32.81 32.37
Total 347.00 322.43
44
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
` in Crores
16 Inventories (Contd.)
As at
March 31,
2013
As at
March 31,
2012
Finished Goods
Fabric 205.30 80.00
Garments 14.51 17.86
Yarn/Fibre 5.16 3.07
Electronics 0.08 0.16
Total 225.05 101.09
Stock in Trade
Fabric 14.99 3.45
Garments 5.71 1.63
Accessories - 0.08
Electronics 4.08 4.23
Agri Products 1.05 0.34
Total 25.83 9.73
` in Crores
As at
March 31,
2013
As at
March 31,
2012
17 Trade Receivables
(Unsecured, considered good unless
otherwise stated)
Outstanding for a period exceeding six
months from the date they are due for
payment
Considered Good 58.50 28.32
Considered doubtful 0.27 0.04
Less: Provision for Doubtful Debts (0.27) (0.04)
58.50 28.32
Others 383.92 377.23
Total 442.42 405.55
` in Crores
Non Current Current
18 Cash and Bank Balances
As At
March 31, 2013
As At
March 31, 2012
As At
March 31, 2013
As At
March 31, 2012
Cash and Cash Equivalents:
Cash on Hand - - 0.77 1.02
Cheques on Hand - - (` 10,000/-) (` 15,000/-)
Balances with Banks
In Current Accounts - - 11.65 16.70
In Unpaid Dividend Accounts - - 0.49 0.33
In Exchange Earners Foreign Currency Account - - - 0.19
In Cash Credit Account - - 123.00 8.56
In Saving Accounts - - (` 45,808/-) (` 45,808/-)
In Deposit Account with original maturity upto 3 months - - 4.90 -
- - 140.81 26.80
Other Bank Balances:
In Deposits Accounts
With original maturity more than 3 months but less than
12 months - - 4.74 4.23
With original maturity more than 12 months 0.43 1.65 - 4.72
Held as Margin Money
(Under lien with bank as Security for Guarantee Facility) 0.11 0.39 5.05 3.62
Lodged with Sales Tax Department - (` 20,000/-) (` 20,000/-)
0.54 2.04 9.79 12.57
Amount disclosed under the head “Other Non Current
Assets” (Note 15)
0.54 2.04 - -
Total - - 150.60 39.37
45
Notes to fnancial statements
` in Crores
19 Contingent Liabilities
As at
March 31,
2013
As at
March 31,
2012
(to the extent not provided for)
Bills Discounted 117.59 111.40
Claims against the Company not
acknowledged as debts
7.82 8.55
Guarantees given by the Banks on
behalf of the Company
69.48 59.00
Guarantees given by the Company to
Banks on behalf of Subsidiaries/Joint
Ventures
398.99 355.83
Disputed Demands in respect of
Excise/Custom Duty 28.85 30.83
Sales Tax 20.37 20.37
Income Tax 19.04 18.11
Service Tax 0.84 1.19
a It is not practicable for the Company to estimate the timings of cash
outfows, if any, in respect of the above pending resolution of the
respective proceedings.
20 Capital and Other Commitments
Capital Commitments
Estimated amount of contracts
remaining to be executed on capital
account and not provided for
80.77 52.39
Other Commitments - -
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
21 Revenue from Operations
Sale of Products
Finished Goods and Stock-in-Trade 3,690.09 3,315.89
Less : Excise Duty 14.85 17.75
3,675.24 3,298.14
Sale of Services 4.04 8.90
Other Operating Revenues
Gain/(Loss) on Forward Contracts (95.47) (1.26)
Export Incentives 102.58 109.78
Waste Sale 69.07 55.68
Others 24.83 22.88
Total 3,780.29 3,494.12
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
a Details of Sales and Services
Sale of Products (Net of Excise Duty)
Fabric 3,084.32 2,803.21
Garments 489.08 438.35
Grey Fabric 7.46 4.83
Yarn 42.78 14.21
Glass Fabric 0.82 -
Electronics Items 38.57 36.86
Agri Products 12.03 0.62
Accessories 0.18 0.06
3,675.24 3,298.14
Sale of Services
Processing Income 4.04 8.90
4.04 8.90
Total 3,679.28 3,307.04
22 Other Income
Interest Income 24.26 15.56
Dividend Income on:
Investments in Subsidiaries - 0.30
Long Term Investments 0.35 0.26
Share of Proft from Arvind and Smart
Value Homes LLP
0.58 1.45
Rent 1.42 0.61
Sundry Credit Balances Appropriated 1.20 2.83
Proft on Sale of Fixed Assets (Net) 26.13 24.53
Proft on Sale of Land held for Sale 16.12 67.40
Provision no longer required - 3.14
Scrap Income 12.02 10.46
Miscellaneous Income 11.38 7.45
Prior Period Item - 1.82
Total 93.46 135.81
23 Cost of Materials and Accessories
Consumed
Stock at the beginning of the year 246.68 294.28
Purchases 1,614.24 1,521.16
1,860.92 1,815.44
Less: Stock at the end of the year 219.70 246.68
Total 1,641.22 1,568.76
46
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
a Materials and Accessories
Consumed
Cotton 666.77 760.17
Yarn 660.55 555.59
Fibre 24.19 22.35
Grey Cloth/Fabric 224.92 160.04
EPABX 11.04 8.97
Accessories 53.75 61.64
Total 1,641.22 1,568.76
b Value of imported and indigenous
materials consumed
Raw Materials and Accessories
Imported 280.01 133.86
17.06% 8.53%
Indigenous 1,361.21 1,434.90
82.94% 91.47%
Total 1,641.22 1,568.76
24 Purchase of Stock In Trade
Cloth 47.13 18.26
Garments 15.00 6.10
Electronic Items 12.23 12.21
Accessories 0.19 0.17
Agri Products 9.89 0.66
Total 84.44 37.40
25 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade
(Increase)/Decrease in stocks
Stock at the end of the year
Finished Goods 225.05 101.09
Stock-in-trade 25.83 9.73
Work-in-Progress 347.00 322.43
Project Work-in-Progress 5.21 3.45
Waste 1.56 1.96
604.65 438.66
Stock at the beginning of the year
Finished Goods 101.09 112.24
Stock-in-trade 9.73 8.09
Work-in-Progress 322.43 245.98
Project Work-in-Progress 3.45 2.74
Waste 1.96 1.30
438.66 370.35
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
25 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade (Contd.)
Add : Adjusted on account of
Amalgamation
Finished Goods - 22.21
Work-in-Progress - 48.38
Waste - 1.15
438.66 442.09
Excise Duty in Value of Stock -
Increase / (Decrease)
(0.02) 0.14
(Increase)/Decrease in stocks (166.01) 3.57
26 Employee Benefts Expense
Salaries and Wages 387.67 318.69
Contribution to Provident Fund and
Other Funds
46.84 34.68
Staf Welfare Expenses 7.71 7.14
Total 442.22 360.51
27 Finance Costs
Interest
On Term Loans 87.27 92.67
On working capital loans 82.22 81.62
Others 49.86 37.12
Interest on shortfall of advance tax - 0.44
Exchange Diference to the extent
considered as an adjustment to
Borrowing Costs
25.04 33.92
Other Borrowing Costs 0.10 1.91
Bank Charges 23.95 22.57
Total 268.44 270.25
28 Depreciation / Amortization
Expense
Depreciation of Tangible Assets 148.39 128.24
Amortization of Intangible Assets 1.88 1.92
Depreciation of Investment Property 0.22 0.35
Total 150.49 130.51
29 Other Expenses
Power and fuel 406.13 349.24
Stores Consumed 307.32 251.01
Insurance 2.91 3.12
Processing Charges 73.75 51.65
Printing, Stationery & Communication 7.47 7.45
Rent 56.70 51.78
47
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
29 Other Expenses (Contd.)
Commission, Brokerage and Discounts 35.91 32.08
Rates and taxes 11.18 5.15
Repairs:
To Buildings 1.40 0.97
To Machineries 89.04 91.47
To others 4.29 4.68
Freight, Insurance and Clearing
Charges
30.26 23.24
Excise Duty borne by Company 0.21 0.39
Legal and Professional Fees 17.62 14.02
Conveyance and Travelling Expenses 15.48 12.22
Advertisement and Publicity 12.99 12.48
Directors’ sitting fees 0.02 0.05
Miscellaneous Labour Charges 21.83 25.30
Provision for Doubtful Debts 0.23 -
Bad Debts written of 0.03 0.32
Sundry Debits written of 0.49 1.19
Fixed Assets Written of 0.51 2.01
Provision for Diminution in Value of
Investment in Subsidiary
- 6.48
Payments to the auditor as
(a) Auditor 0.63 0.63
(b) For tax audit matters 0.14 0.14
(c) For taxation matters 0.04 0.04
(d) For Company law matters 0.24 0.24
(e) For Other Certifcation work 0.46 0.41
(f) For reimbursement of expenses 0.05 0.04
Exchange Diference (Net) 14.52 18.17
Loans to Subsidiaries Written Of - 7.91
Less : Adjusted against Provision for
doubtful Loans - (7.91)
- -
Loss on Sale of Investments 0.02 34.96
Less : Adjusted against Provision for
diminution in value of Investments - (33.39)
0.02 1.57
Goodwill on Amalgamation Written Of - 45.49
Charge on account of alignment of
accounting policies of Amalgamated
Company with the Company - 10.82
- 56.31
Less : Amount Transferred from
Opening balance of Surplus in
Statement of Proft and Loss - (56.31)
- -
Miscellaneous Expenses 51.79 41.50
Total 1,163.66 1,009.04
Notes to fnancial statements
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
a Value of imported and indigenous
Spare Parts consumed
Imported 21.31 17.10
23.93% 18.69%
Indigenous 67.73 74.37
76.07% 81.31%
Total 89.04 91.47
30 Extraordinary Item
Proft on Sale of Investment in Joint
Venture
- 251.80
Total - 251.80
31 CIF Value of Imports
Capital Goods 92.91 157.72
Raw Materials & Accessories 287.05 123.37
Dyes & Chemicals, Stores and Spares
Parts
73.87 61.27
32 Expenditure in Foreign Currency
Interest 17.59 14.64
Commission 5.70 7.11
Professional and Consultation Fees 4.11 3.07
Other Matters 25.58 28.59
Total 52.98 53.41
33 Earning in Foreign Currency
Export of goods calculated on F.O.B.
basis
1,444.94 1,487.10
Better Cotton Grant 2.52 2.45
34 Amount remitted during the year
in foreign currency on account of
dividend :
i) Amount remitted (` 2,350/-) -
ii) Number of shares held of ` 10
each
2350 -
iii) Number of Non-resident
Shareholders
7 -
iv) Year to which dividend relates 2011-2012 -
48
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
35 Earning Per Share (EPS) :
` in Crores, unless otherwise stated
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Proft after Tax before Extra
Ordinary Item
261.22 236.29
Add : Extra Ordinary Item (Net of Tax
of ` 53.86 Crores)
- 197.94
Proft after Extra Ordinary Item
available to equity shareholders
261.22 434.23
Weighted average no. of Equity Shares
For Basic EPS Nos. 258,043,069 257,983,329
For Diluted EPS Nos. 258,048,828 257,983,329
Nominal value of Equity Shares ` 10.00 10.00
Basic Earning Per Share
Before Extra Ordinary Item ` 10.12 9.16
After Extra Ordinary Item ` 10.12 16.83
Diluted Earning Per Share
Before Extra Ordinary Item ` 10.12 9.16
After Extra Ordinary Item ` 10.12 16.83
Weighted average number of Equity Shares
No. of Shares for Basic EPS 258,043,069 257,983,329
Dilutive Efect of ESOS 5,759 -
Weighted average number of shares
considered for calculating Diluted
EPS
258,048,828 257,983,329
36 Employee Share Based Payment:
i The Company has formulated Employee Stock Option Scheme (ESOS
2008), the features of which are as follows :
Scheme ESOS 2008 Tranche - II
Date of Grant April 21, 2011
Number of options granted 200,000
Exercise Price per option ` 73.70
Date of vesting The vesting will be as under :
33.33% on April 30, 2012
33.33% on April 30, 2013
33.33% on April 30, 2014
Exercise Period Within 3 years from the date of
respective vesting.
Method of settlement Through allotment of one Equity
Share for each option granted.
ii Intrinsic Value Method has been used to account for the employee share
based payment plans. The intrinsic value of each stock option granted
under the ESOS 2008 plan is ` Nil since the market price of the underlying
share at the grant date was same as the exercise price and consequently
the accounting value of the option (compensation cost) is ` Nil.
iii Further details of the stock option plans ESOS 2008 is as follows :
Particulars
ESOS 2008
Tranche-II
2012-2013 2011-2012
Options
Outstanding at the beginning of year 200,000 -
Granted During the year - 200,000
Lapsed during the year - -
Exercised during the year - -
Vested but not exercised at the end of year 66,660 -
Not vested at the end of year 133,340 200,000
Weighted Average Exercise Price per
Option
` 73.70 ` 73.70
iv The Black-Scholes-Mertons Option Pricing Model have been used
to derive the estimated value of stock option granted if the fair value
method to account for the employee share based payment plans
were to be used. The estimated value of each stock options and the
parameters used for deriving the estimated value of Stock Option
granted under Black-Scholes-Mertons Option Pricing Model is as
follows:
Particulars
ESOS 2008
Tranche-II
Vesting on April 30,
2012 2013 2014
Estimated Value of Stock
Options (`)
32.45 39.47 42.63
Share Price at Grant Date (`) 73.70 73.70 73.70
Exercise Price (`) 73.70 73.70 73.70
Expected Volatility (%) 62.46% 65.93% 62.19%
Dividend Yield Rate (%) 0.00% 0.00% 0.00%
Expected Life of Options
(in years)
2.53 3.53 4.53
Risk Free Rate of Interest (%) 7.57% 7.61% 7.65%
v Had the compensation cost for the stock options granted under
ESOS 2008 been determined on fair value approach, the Company’s
net proft and earning per share would have been as per pro forma
amounts indicated below:
Particulars
Year
ended
March 31,
2013
Year
ended
March 31,
2012
Proft before Extra Ordinary Item available
to equity shareholders
261.22 236.29
Less : Amortization of Compensation Cost
(pro forma)
0.23 0.43
Proft before Extra Ordinary Item available
to equity shareholders
260.99 235.86
Add : Extra Ordinary Item - 197.94
49
Notes to fnancial statements
Contd.
Particulars
Year
ended
March 31,
2013
Year
ended
March 31,
2012
Proft after Extra Ordinary Item and
amortization of Compensation
Cost (pro forma)
260.99 433.80
Earning Per Share - (Basic)
Proft before Extra Ordinary Item
- as reported 10.12 9.16
- pro forma 10.11 9.14
Proft after Extra Ordinary Item
- as reported 10.12 16.83
- pro forma 10.11 16.82
Earning Per Share - (Diluted)
Proft before Extra Ordinary Item
- as reported 10.12 9.16
- pro forma 10.11 9.14
Proft after Extra Ordinary Item
- as reported 10.12 16.83
- pro forma 10.11 16.82
37 Employee Benefts
Consequent to the adoption of Accounting Standard on Employee
Benefts (AS 15 Revised 2005) notifed by Companies (Accounting
Standards) Rules, 2006, the following disclosures have been made as
required by the Standard:
(i) Defned Contribution Plans
The Company has recognised the following amounts in the Statement
of Proft and Loss for Defned Contribution Plans:
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Provident Fund 16.68 14.35
Contributory Pension Scheme 0.35 -
Superannuation Fund 2.21 2.56
The Company’s Provident Fund is administered by the Trust. The Rules
of the Company’s Provident Fund administered by a Trust require
that if the Board of the Trustees are unable to pay interest at the rate
declared for Employees’ Provident Fund by the Government under
Para 60 of the Employees’ Provident Fund Scheme, 1952 for the reason
that the return on investment is less or for any other reason, then the
defciency shall be made good by the Company. Having regard to the
assets of the fund and the return on the investments, the Company
does not expect any defciency in the foreseeable future.
(ii) State Plans
The Company has recognised the following amounts in the Statement
of Proft and Loss for Contribution to State Plans:
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Employee’s State Insurance 7.22 6.35
Employee’s Pension Scheme 9.97 8.63
(iii) Defned Beneft Plans
(a) Leave Encashment/Compensated Absences
Salaries, Wages and Bonus include ` 5.36 Crores (` 4.24 Crores)
towards provision made as per actuarial valuation in respect of
accumulated leave encashment/compensated absences.
(b) Contribution to Gratuity Funds
The details of the Company’s Gratuity Fund for its employees including
Managing Director are given below which is certifed by the actuary
and relied upon by the auditors:
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Change in the Beneft Obligations :
Liability at the beginning of the year 64.51 43.31
Add : Adjustment on amalgamation - 14.16
Liability at the beginning of the year
after amalgamation
64.51 57.47
Interest Cost 4.05 4.95
Current Service Cost 4.73 4.80
Benefts Paid (5.64) (4.16)
Actuarial Loss/(Gain) 10.21 1.67
Other Adjustment - (0.22)
Liability at the end of the year 77.86 64.51
Fair Value of Plan Assets :
Fair Value of Plan Assets at the
beginning of the year
61.24 41.47
Add : Adjustment on amalgamation - 13.62
Fair Value of Plan Assets at the
beginning of the year after
amalgamation
61.24 55.09
Expected Return on Plan Assets 3.69 4.70
Contributions 8.91 6.08
Benefts Paid (5.64) (4.16)
Actuarial gain/(loss) on Plan Assets 2.31 (0.14)
Other Adjustment - (0.33)
Fair Value on Plan Assets at the end of
the year
70.51 61.24
Total Actuarial(Loss) /Gain to be
recognized
(7.90) (1.81)
Actual Return on Plan Assets :
Expected Return on Plan Assets 3.69 4.70
Actuarial gain/(loss) on Plan Assets 2.31 (0.14)
Actual Return on Plan Assets 6.00 4.56
Amount Recognized in the Balance Sheet :
Liability at the end of the year 77.86 64.51
Fair Value of Plan Assets at the end of
the year
70.51 61.24
Amount recognized in the Balance
Sheet under “ Provision for Employee
Benefts ”
7.35 3.27
50
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
(b) Contribution to Gratuity Funds (Contd.) ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Expense Recognized in the Statement of Proft and Loss:
Interest Cost 4.05 4.95
Current Service Cost 4.73 4.80
Expected Return on Plan Assets (3.69) (4.70)
Net Actuarial loss/(gain) to be
recognized
7.90 1.81
Expense recognized in the Statement
of Proft and Loss under “Employee
Benefts Expense”
12.99 6.86
Reconciliation of the Liability Recognized in the Balance
Sheet :
Opening Net Liability 3.27 2.38
Expense Recognized 12.99 6.86
Contribution by the Company (8.91) (6.08)
Other Adjustment - 0.11
Amount recognized in the Balance
Sheet under “ Provision for Employee
Benefts ”
7.35 3.27
Based on the above allocation and the prevailing yields on these assets,
the long-term estimate of the expected rate of return on fund assets
has been arrived at.
Principal Assumptions:
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Discount Rate (%) 8.25 8.50
Return on Plan Assets (%) 8.00 8.00
Investment Pattern:
Particulars
% Invested
in Current
Year
% Invested
in Previous
Year
Central Government Securities 0.36 0.67
State Government Securities/
Securities guaranteed by
State/Central Government
0.43 0.47
Public Sector/Financial Institutional
Bonds
8.01 9.55
Portfolio with Mutual Fund 90.53 88.64
Others (including bank balances) 0.67 0.67
Total 100.00 100.00
38 SEGMENT REPORTING
(A) Primary Segment (Business Segment)
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Segment Revenue
a) Textiles 3713.35 3426.59
b) Brands and Retail 25.19 19.91
c) Others 63.17 52.88
d) Unallocable - -
Total Sales 3801.71 3499.38
Less :Inter Segment Revenue 21.42 5.26
Net Sales 3780.29 3494.12
Segment Results
Segment Results before Interest & Finance Cost
a) Textiles 529.56 532.30
b) Brands and Retail (10.52) (7.44)
c) Others (3.26) 0.06
d) Unallocable 13.88 (18.38)
Total Segment Results 529.66 506.54
Less : Interest & Finance Cost 268.44 270.25
Proft from Ordinary Activities 261.22 236.29
Extra Ordinary Items (Net) - 251.80
Proft before Tax 261.22 488.09
Other Information
Segment Assets
a) Textiles 3660.27 3312.45
b) Brands and Retail 47.75 21.15
c) Others 64.27 60.17
d) Unallocable 1511.43 1227.01
Total Assets 5283.72 4620.78
Segment Liabilities
a) Textiles 660.24 695.25
b) Brands and Retail 13.06 4.17
c) Others 22.68 17.96
d) Unallocable 169.11 117.13
Total Liabilities 865.09 834.51
Segment Depreciation/Impairment
a) Textiles 142.82 123.52
b) Brands and Retail 0.77 0.40
c) Others 0.67 0.45
d) Unallocable 6.23 6.14
Total Depreciation/Impairment 150.49 130.51
51
Notes to fnancial statements
(A) Primary Segment (Business Segment) (Contd.) ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Capital Expenditure
a) Textiles 280.98 338.37
b) Brands and Retail 5.37 9.21
c) Others - 1.92
d) Unallocable 0.61 13.40
Total Capital Expenditure 286.96 362.90
Non cash expenses other than Depreciation
a) Textiles 1.04 3.38
b) Brands and Retail 0.10 0.00
c) Others - 0.00
d) Unallocable 0.12 14.53
Total Non cash expenses
other than Depreciation
1.26 17.91
(B) Secondary Segment (Geographical by Customers)
Segment Revenue
a) In India 2335.35 2007.02
b) Outside India 1444.94 1487.10
Total Sales 3780.29 3494.12
Carrying Cost of Assets by location of Assets
a) In India 5166.37 4474.91
b) Outside India 117.35 145.87
Total 5283.72 4620.78
Addition to Assets
a) In India 286.96 362.90
b) Outside India - -
Total 286.96 362.90
Notes:
1. The Company has considered business segment as the primary
reporting segment. Segments have been identifed taking into
account the nature of the products and services, diferential risks and
returns, the Organizational structure and internal reporting system.
Consequently, the geographical segment has been considered as a
secondary segment.
2. The business segment comprise of the following:
Textiles : Fabric, Yarn and Garments
Brands and Retail : Branded Garments and Apparels
Others : EPABX Systems (Electronics), Construction and Project
Activity
3. Geographical segment is considered based on sales within India and
outside India.
4. Intersegment Revenues are recognised at sales price.
39 Related Party Disclosures :
As per the Accounting Standard on “Related Party Disclosures” (AS
18) notifed by Companies (Accounting Standards) Rules, 2006, the
related parties of the Company are as follows :
a Name of Related Parties and Nature of Relationship :
Asman Investment Limited Subsidiary Company
The Anup Engineering Limited Subsidiary Company
Arvind Lifestyle Brands Limited Subsidiary Company
Arvind Accel Limited Subsidiary Company
Syntel Telecom Limited Subsidiary Company
Arvind Infrastructure Limited Subsidiary Company
Arvind Brands and Retail Limited Subsidiary Company
Arvind Envisol Private Limited Subsidiary Company
Arvind Worldwide Inc., USA Subsidiary Company
Arvind Worldwide (M) Inc., Mauritius Subsidiary Company
Arvind Overseas (M) Limited,
Mauritius
Subsidiary Company
Arvind Spinning Limited, Mauritius Subsidiary Company
Arvind Textile Mills Limited,
Bangladesh
Subsidiary Company
Arvind Spinning Park Private Limited Subsidiary Company
Arvind Processing Park Private
Limited
Subsidiary Company
Arvind Hebbal Homes Private Limited Subsidiary Company
Arya Omnitalk Wireless Solutions
Private Limited
Joint Venture
Tommy Hilfger Arvind Fashions
Private Limited
Joint Venture
Arya Omnitalk Radio Trunking
Services Private Limited
Joint Venture
Arudrama Developers Private Limited Joint Venture
Arvind PD Composites Private
Limited
Joint Venture Subsidiary
Company
Arvind Goodhill Suit Manufacturing
Private Limited
Joint Venture Subsidiary
Company
Arvind Niloy Exports Private Limited,
Bangladesh
Joint Venture Subsidiary
Company
Arvind OG Nonwovens Private
Limited
Joint Venture Subsidiary
Company
Arvind Bsafal Homes LLP Limited Liability Partnership
Ahmedabad East Infrastructure LLP Limited Liability Partnership
Arvind & Smart Value Homes LLP Limited Liability Partnership
Aura Securities Private Limited Company under the control
of Key Managerial Personnel
Amplus Capital Advisors Private
Limited
Company under the control
of Key Managerial Personnel
Shri Sanjay S. Lalbhai, Chairman and
Managing Director
Key Management Personnel
Shri Jayesh K. Shah, Director & Chief
Financial Ofcer
Key Management Personnel
Shri Punit S. Lalbhai Key Management Personnel
Shri Kulin S. Lalbhai Key Management Personnel
Shri Darshil J. Shah, Son of Director &
Chief Financial Ofcer
Relative of Key Management
Personnel
Note: Related party relationship is as identifed by the Company and
relied upon by the Auditors.
52
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
b Transactions and Balances : ` in Crores
Particulars
Subsidiary
Companies
Key Management
Personnel and
relatives
Joint Venture/
Limited Liability
Partnership
Company under the
control of Key
Managerial Personnel
Year ended Year ended Year ended Year ended
March
31, 2013
March
31, 2012
March
31, 2013
March
31, 2012
March
31, 2013
March
31, 2012
March
31, 2013
March
31, 2012
Transactions
Purchase of Goods and Materials 8.50 4.93
Purchase of Fixed Assets 11.80 4.07
Sales of Goods and Materials 30.33 122.86 11.88 7.10
Sale of Fixed Assets 7.39 - - 41.24
Rendering of Services 0.32 0.21 3.24 1.96
Remuneration 8.98 5.40
Receiving of Services 8.91 7.78
Interest Expense 0.45 0.63
Other Expenses 1.10 0.60 0.04 0.20
Debit Balance Written of - 0.02
Loan Written of - 7.91
Interest Income 19.92 10.14 0.42 0.44
Other Income 0.63 - - 0.01 0.02 -
Loan Given/(Repaid) (Net) 40.33 (6.53) (0.16) (0.06)
Adjustment due to Scheme of Arrangement - (132.10) - 22.00
Share Application Money Given 44.05 5.18 - 8.00
Diminuation in value of Shares - 6.48 - -
Investments (Net) 71.97 (34.81) 18.85 61.90
Balances as at year end
Trade and Other Receivable 92.64 83.54 4.95 3.45 (` 22,795) -
Receivable/(Payable) in respect of Loans 82.48 39.30 (0.26) 0.42
Trade and Other Payable 15.43 9.47 0.54 -
c Disclosure in respect of Related Party Transactions :
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Purchase of Goods and Materials
Arvind Lifestyle Brands Limited 8.34 4.34
Asman Investment Limited 0.02 -
Arvind Accel Limited 0.14 0.59
Purchase of Fixed Assets
The Anup Engineering Limited 0.16 0.05
Arvind Accel Limited 1.26 4.02
Arvind Envisol Private Limited 10.38 -
Sales of Goods and Materials
Asman Investment Limited 0.52 88.10
Arvind Lifestyle Brands Limited 29.65 34.70
Arvind PD Composites Private Limited 0.12 -
The Anup Engineering Limited 0.04 0.06
Arya Omnitalk Wireless Solutions
Private Limited
8.24 5.94
Tommy Hilfger Arvind Fashions Private
Limited
3.64 1.16
Sale of Fixed Assets
Arvind Infrastructure Limited 6.04 -
Arvind PD Composites Private Limited 1.35 -
Arvind & Smart Value Homes LLP - 41.24
c Disclosure in respect of Related Party Transactions : (Contd.)
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Rendering of Services
Arya Omnitalk Wireless Solutions
Private Limited
1.26 1.68
Arya Omnitalk Radio Trunking Services
Private Limited
1.98 -
Arvind Bsafal Homes LLP - 0.20
VF Arvind Brands Private Limited 0.00 0.10
Arvind Lifestyle Brands Limited 0.32 0.21
Remuneration
Shri Sanjay S. Lalbhai, Chairman and
Managing Director
4.70 2.90
Shri Jayesh K. Shah, Director & Chief
Financial Ofcer
3.03 2.24
Shri Punit S. Lalbhai 0.57 0.24
Shri Kulin S. Lalbhai 0.58 -
Shri Darshil J. Shah, Son of Director &
Chief Financial Ofcer
0.10 0.02
Receiving of Services
Arvind Worldwide Inc., USA 8.91 7.78
53
d Disclosures pursuant to the clause 32 of the Equity Listing Agreement
Loans and Advances in the nature of loans to subsidiaries ` in Crores
Name of Subsidiary
Closing Balance Maximum Outstanding
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Asman Investments Limited 2.14 2.14 2.14 158.33
Arvind Worldwide (M) Inc. 5.25 4.93 5.42 5.14
Arvind Worldwide Inc. USA 2.44 2.29 2.52 2.39
Arvind Accel Limited 4.53 2.50 22.98 19.74
Arvind Infrastructure Limited 0.45 - 106.67 -
The Anup Engineering Limited 0.10 0.10 10.10 0.10
Arvind Lifestyle Brands Limited 68.34 19.50 134.50 119.70
Arvind Envisol Private Limited 0.41 - 0.41 -
Arvind Retail Limited - 7.89 - 13.30
Syntel Telecom Limited 0.12 0.12 0.12 0.12
Arvind Textile Mills Limited, Bangladesh - 0.01 0.01 0.01
Arvind Brands and Retail Limited - 1.11 1.25 1.25
Arvind PD Composite Private Limited - 0.03 0.03 0.03
Total 83.78 40.62 286.15 320.11
Note : No repayment schedule has been fxed in case of above mentioned Loans & Advances in the nature of loans given to Subsidiary Companies and
some of them are interest free and repayable on demand.
Notes to fnancial statements
c Disclosure in respect of Related Party Transactions : (Contd.)
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Interest Expense
Aura Securities Private Limited 0.45 0.63
Other Expenses
Asman Investment Limited 0.80 0.60
Arvind Lifestyle Brands Limited 0.30 -
Arya Omnitalk Wireless Solutions
Private Limited
0.04 0.19
Syntel Telecom Limited - 0.01
Debit Balance Written of
Asman Investment Limited - 0.02
Loan Written of
Arvind Overseas (M) Limited, Mauritius - 7.91
Interest Income
The Anup Engineering Limited 0.20 0.54
Arvind Lifestyle Brands Limited 11.17 8.32
Arvind Accel Limited 2.40 1.09
Arvind Envisol Private Limited 0.01 -
Arvind Infrastructure Limited 6.14 0.19
Tommy Hilfger Arvind Fashions Private
Limited
- 0.24
Arvind & Smart Value Homes LLP 0.42 0.20
Other Income
Arvind Lifestyle Brands Limited 0.10 -
Arvind PD Composites Private Limited 0.53 -
Amplus Capital Advisors Private Limited 0.02 -
Arvind & Smart Value Homes LLP 0.00 0.01
Loan Given/(Repaid) (Net)
Asman Investment Limited - (24.09)
Arvind Lifestyle Brands Limited 40.95 15.54
Arvind Accel Limited 2.03 0.88
Arvind Envisol Private Limited 0.41 -
Arvind Infrastructure Limited (1.92) -
Arvind PD Composites Private Limited (0.03) 0.03
c Disclosure in respect of Related Party Transactions : (Contd.)
` in Crores
Nature of Transactions
Year ended
March 31,
2013
Year ended
March 31,
2012
Arvind Brands and Retail Limited (1.11) 1.11
Aura Securities Private Limited (0.16) (0.06)
Adjustment due to Scheme of Arrangement
Asman Investment Limited - (132.10)
Arudrama Developers Private Limited - 22.00
Share Application Money
Arvind Textile Mills Limited, Bangladesh 7.45 5.18
Arvind PD Composites Private Limited 1.40 -
Arvind Brands and Retail Limited 35.00 -
Arvind OG Nonwovens Private Limited 0.20 -
Tommy Hilfger Arvind Fashions Private
Limited
- 8.00
Diminuation in value of Shares
Asman Investment Limited - 6.48
Investments (Net)
Arvind Infrastructure Limited 10.00 -
Arvind PD Composites Private Limited 1.73 -
Arvind Brands and Retail Limited 60.00 -
Arvind Goodhill Suit Manufacturing
Private Limited
0.01 -
Arvind Spinning Park Private Limited 0.01 -
Arvind Processing Park Private Limited 0.01 -
Arvind OG Nonwovens Private Limited 0.01 -
Arvind Niloy Exports Private Limited,
Bangladesh
0.20 -
Tommy Hilfger Arvind Fashions Private
Limited
18.05 0.75
Arvind & Smart Value Homes LLP 0.80 61.15
Asman Investment Limited - (1.10)
Arvind Overseas (M) Limited, Mauritius - (28.32)
Arvind Spinning Limited, Mauritius - (5.39)
54
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
40 Lease Rent
Operating Lease
(A) Land is taken on lease period of 30 years with no option of renewal, no
sub lease of the land and having an escalation clause for increase in
lease rental by 5% after block of every 2 years.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
4.12 4.22
Not later than one year 0.11 0.10
Later than one year and not later than fve years 0.44 0.43
Later than fve years 3.57 3.69
Lease Payment recognised in Statement of
Proft and Loss
0.11 0.11
(B) Factory Building is taken on lease period of 18 to 20 years with no
option of renewal, no sub lease of the building and having an escalation
clause for increase in lease rental by 15% after every 3 years
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
79.59 72.51
Not later than one year 7.43 7.18
Later than one year and not later than fve years 31.50 23.54
Later than fve years 40.66 41.79
Lease Payment recognised in Statement of
Proft and Loss
7.24 7.09
(C) Plant & Machineries are taken on operating lease for a period of 5 to 8
years with the option of renewal
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
135.68 183.90
Not later than one year 30.53 35.40
Later than one year and not later than fve years 93.64 111.39
Later than fve years 11.51 37.12
Lease Payment recognised in Statement of
Proft and Loss
37.00 37.55
(D) Rent expense includes lease rental payments towards ofce premises,
showrooms and other facilities. Such leases are generally for a period
of 11 to 108 months with the option of renewal against increased rent.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
71.08 18.09
Not later than one year 9.27 2.56
Later than one year and not later than fve years 36.24 9.93
Later than fve years 25.57 5.61
Lease Payment recognised in Statement of
Proft and Loss
6.48 1.68
(E) Rent Income includes Lease Rental received towards Plant &
Machineries. Such operating lease is generally for a period of 5 years
with the option of renewal on mutual consent and premature
termination of agreement through agreed notice period.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments under
non-cancellable operating leases:
15.71 -
Not later than one year 1.36 -
Later than one year and not later than fve years 5.42 -
Later than fve years 8.93 -
Lease income recognised in Statement of Proft
and Loss
0.57 0.11
(F) Rent Income also includes Lease Rental received towards Building.
Such operating lease is generally for a period upto 36 months.
The particulars of these leases are as follows: ` in Crores
Particulars
Year
ended
March
31, 2013
Year
ended
March
31, 2012
Future Minimum lease payments under
non-cancellable operating leases:
0.81 0.29
Not later than one year 0.51 0.12
Later than one year and not later than fve years 0.30 0.18
Later than fve years - -
Lease income recognised in Statement of Proft
and Loss
0.71 0.43
41 Disclosures in respect of Joint Venture
(a) List of Joint Ventures:
Sr.
No
Name of Joint Venture Description of Interest
Proportion of
ownership interest
Country of
Incorporation Residence
1 Arya Omnitalk Wireless Solutions Pvt. Limited Jointly Controlled Entity 50% India India
2 Tommy Hilfger Arvind Fashions Private Limited Jointly Controlled Entity 50% India India
3 Arya Omnitalk Radio Turnking Services Private Limited Jointly Controlled Entity 50% India India
4 Arudrama Developers Private Limited Jointly Controlled Entity 50% India India
5 Arvind BSAFAL Homes LLP Limited Liability Partnership 50% India India
6 Arvind and Smart Value Homes LLP Limited Liability Partnership 50% India India
7 Ahmedabad East Infrastructure LLP Limited Liability Partnership 50% India India
55
b) Financial interest in Jointly Controlled Entities: ` in Crores
Sr.
No
Name of Joint Venture
Company’s share in
Assets As at Liabilities As at
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
1 Arya Omnitalk Wireless Solutions Pvt. Limited 21.77 18.03 13.83 11.62
2 Tommy Hilfger Arvind Fashions Private Limited 61.37 55.33 28.64 41.99
3 Arya Omnitalk Radio Trunking Services Private Limited 10.97 10.04 3.69 3.26
4 Arudrama Developers Private Limited 2.37 2.37 0.32 0.32
5 Arvind BSAFAL Homes LLP 45.23 46.14 38.82 26.69
6 Arvind and Smart Value Homes LLP 68.09 67.15 66.05 6.20
7 Ahmedabad East Infrastructure LLP 21.72 - 21.73 -
` in Crores
Sr.
No
Name of Joint Venture
Company’s share in
Income Year ended Expenses Year ended
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
1 Arya Omnitalk Wireless Solutions Pvt. Limited 26.72 27.19 24.10 25.03
2 Tommy Hilfger Arvind Fashions Private Limited 94.61 70.11 90.60 66.48
3 Arya Omnitalk Radio Trunking Services Private Limited 7.68 6.01 6.93 5.42
4 Arvind BSAFAL Homes LLP 15.08 24.70 12.27 18.03
5 Arvind and Smart Value Homes LLP 17.33 21.56 16.20 19.38
` in Crores
Sr.
No
Company’s share in:
Year ended
March 31, 2013 March 31, 2012
1 Contingent Liability in respect of guarantee given by Bank 2.21 2.80
2 Disputed Demand in respect of :
Income Tax 0.05 -
Sales Tax 0.08 0.02
Service Tax 0.44 0.44
3 Capital commitments
Estimated amount of contracts remaining to be executed on
capital account and not provided for
0.03 0.18
4 Claims against the Company not acknowledged as debts 0.61 -
Note : The above fgures are considered based on unaudited fnancial statements of the respective Jointly Controlled Entities.
Notes to fnancial statements
42 Impairment of Fixed Assets
In accordance with the Accounting Standard (AS -28) on ‘Impairment of Assets’ notifed by Companies (Accounting Standards) Rules, 2006, the
Company has reassessed its fxed assets and is of the view that no further impairment/reversal is considered to be necessary in view of its expected
realisable value.
43 Early adoption of AS 30, Financial Instruments :Recognition and Measurement
(a) Consequent to the Announcement of the Institute of Chartered Accountants of India (ICAI), the Company had chosen to early adopt
‘Accounting Standard – 30, Financial Instruments: Recognition and Measurement’ in its entirety, read with the clarifcation issued on
application of AS -30. Accordingly, the Company has changed the designation and measurement of all its signifcant fnancial assets and
liabilities. All the fnancial assets and fnancial liabilities and derivatives have been remeasured at their respective fair values or at amortized
cost as against cost except for those items whose accounting treatment is covered by the existing standards notifed by Companies
(Accounting Standards) Rules, 2006.
(b) As a result, as on Balance Sheet date, Long Term Borrowings are lower by ` 4.20 Crores, (Previous year higher by ` 1 Crores) and Hedge
Reserve account is debited by ` 23.64 Crores (Previous year ` 98.25 Crores) on account of fair valuation of outstanding derivatives.
44 Foreign Exchange Diferences
As per the notifcation issued by the Ministry of Corporate Afairs dated 31st March, 2009 as amended from time to time, the Company had already
exercised the option for accounting of exchange rate diferences with efect from April 1, 2007.
Consequent to the adoption of that option:
(a) Exchange rate diferences of long-term foreign currency loans which are related to acquisition of depreciable fxed
assets have been added to or deducted from the cost of the assets and depreciated over the balance life of the assets
and;
(b) Exchange rate diferences on other long-term foreign currency loans have been transferred to ‘Foreign Currency Monetary Item Translation
Diference Account’ to be amortized over the balance period of loans or up to 31st March, 2020 whichever is earlier.
As a result:
(a) An amount of ` 3.75 Crores being the exchange rate loss for the year (Previous year ` 0.30 Crores) has been adjusted against the fxed assets.
(b) An amount of ` 4.90 Crores being the exchange rate loss for the year (Previous year ` 4.19 Crores) remains to be amortized as at the balance
sheet date.
56
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to fnancial statements
45 Category-wise Quantitative data about derivative instruments outstanding:
Particulars Currency
As at 31st March, 2013 As at 31st March, 2012
In Mn Avg. Ex. Rate ` in Crores In Mn Avg. Ex. Rate ` in Crores
Forward Sales USD 60.71 52.3898 318.06 206.87 49.1051 1,015.84
EUR 0.81 72.7398 5.88 1.25 70.3030 8.78
Forward Purchase USD 10.08 55.4186 55.86 34.03 51.1847 174.21
JPY 193.98 0.6141 11.91 - - -
Interest Swap USD 10.00 56.7325 56.73 - - -
Option Deals USD - - - 66.00 50.6136 334.05
The Company has borrowed long term as well as short term Loans in Foreign currency but as the Company is a net foreign currency surplus
Company, there is no unhedged exposure in foreign currency.
46 Disclosure in respect of Construction/Job work Contracts
` in Crores
Particulars
Year ended
March 31, 2013
Year ended
March 31, 2012
Amount of Contract Revenue recognized 24.59 16.02
Disclosure in respect of contracts in progress at the reporting date
Contract cost incurred and recognised profts less recognised losses up to the reporting date 24.59 16.02
Advance received from customers 6.03 5.84
Due from customers 3.19 2.15
47 Expenditure on Research and Development:
The Company has separate In-House Research & Development Centre at Naroda and Santej locations. Centre at Naroda location is duly recognised
and approved by Department of Scientifc and Industrial Research, Ministry of Science and Technology, Government of India while the company is
in the process of applying to Department of Scientifc and Industrial Reserach, Ministry of Science and Technology, Government of India, for
recognition of Centre at Santej Centre. Both the Centres are involved into new product development, new process development etc. The details of
Capital and Revenue Expenditure incurred on Research and Development by both the Centres are as under:
` in Crores
Particulars
Year ended
March 31, 2013
Year ended
March 31, 2012
Naroda Centre
Captial Expenditure 9.21 0.18
Revenue Expenditure 2.67 4.06
Total Expenditure at Naroda Centre 11.88 4.24
Santej Centre
Capital Expenditure 0.61 0.62
Revenue Expenditure 7.25 0.56
Total Expenditure at Santej Centre 7.86 1.18
48 Figures less than ` 50,000/- which are required to be shown seperately, have been shown as actual in brackets.
49 In the opinion of the Board, all assets other than fxed assets have a value on realization in the ordinary course of business at least equal to the amount
at which they are stated except for reconciliation adjustments in respect of some of the payables and receivables.
50 Previous year fgures have been regrouped or recast wherever necessary to make them comparable with those of the current year.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
57
We have audited the accompanying consolidated fnancial statements of
Arvind Limited (“the Company”) and its subsidiaries, which comprise
the consolidated Balance Sheet as at March 31, 2013, and the consolidated
Statement of Proft and Loss and consolidated Cash Flow Statement for
the year then ended, and a summary of signifcant accounting policies and
other explanatory information.
Management’s Responsibility for the Consolidated Financial
Statements
Management is responsible for the preparation of these consolidated
fnancial statements that give a true and fair view of the consolidated
fnancial position, consolidated fnancial performance and consolidated
cash fows of the Company in accordance with accounting principles
generally accepted in India; this includes the design, implementation
and maintenance of internal control relevant to the preparation and
presentation of the consolidated fnancial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated fnancial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the consolidated fnancial statements.
The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated
fnancial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the
Company’s preparation and presentation of the consolidated fnancial
statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation of the consolidated fnancial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us and based on the consideration of the reports of
the other auditors on the fnancial statements of the subsidiaries as noted
below, the consolidated fnancial statements give a true and fair view in
conformity with the accounting principles generally accepted in India:
INDEPENDENT AUDITOR’S REPORT To the Board of Directors
of Arvind Limited
(a) in the case of the consolidated Balance Sheet, of the state of afairs of
the Company as at March 31, 2013;
(b) in the case of the consolidated Statement of Proft and Loss, of the
proft for the year ended on that date; and
(c) in the case of the consolidated Cash Flow Statement, of the cash
fows for the year ended on that date.
Emphasis of Matter
As mentioned in Note No. 37 in respect of early adoption of Accounting
Standard (AS) – 30 on ‘Financial Instruments: Recognition and
Measurement’ issued by the Institute of Chartered Accountants of India
and the clarifcation issued on Application of AS 30, the Company has
measured all its Financial Assets and Liabilities at their respective Fair
Values or at Amortized Cost except for those items whose accounting
treatment is covered by the existing accounting standards notifed by
Companies (Accounting Standard) Rules, 2006. Accordingly, the carrying
amount of Long Term Borrowings would have been higher by ` 4.20 Crores
and carrying value of Hedge Reserve would have been higher by ` 23.64
Crores.
Other Matter
We did not audit the fnancial statements of certain subsidiaries and limited
liability partnership entities whose fnancial statements refect (before
giving efect to the consolidation adjustments) total assets of ` 312.62
Crores as at 31st March 2013 and total revenue of ` 79.91 Crores for the
year then ended. These Financial Statements have been audited by other
auditors whose reports have been furnished to us by the Management and
our opinion is based solely on the report of the other auditors.
We did not audit the fnancial statements of joint venture entities and
one limited liability partnership entity whose fnancial statements refect
(before giving efect to the consolidation adjustments) total assets of
` 163.05 Crores as at 31st March 2013 and total revenue of ` 146.33 Crores
for the year then ended which were prepared by the management. The
same has been considered for the purpose of consolidation and accepted
as correct by us. Any adjustment to their balances on completion of audit
could have consequential efect on the attached Consolidated Financial
Statements.
Our opinion is not qualifed in respect of these matters.
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants
CA. N D Anklesaria
Ahmedabad Partner
May 16, 2013 Membership No. 10250
58
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Note As at
March 31, 2013
As at
March 31, 2012
Equity and Liablities
Shareholders’ funds
Share Capital 3 258.04 258.04
Reserves and Surplus 4 1,995.94 1,769.56
Minority Interest 10.80 9.13
Non-current liabilities
Long Term Borrowings 5 1,005.12 777.04
Deferred Tax Liabilities (Net) 6 5.77 18.88
Other Long Term Liabilities 7 10.30 8.84
Long Term Provisions 8 13.22 50.45
Current liabilities
Short Term Borrowings 9 1,280.62 1,174.94
Trade Payables 10 1,097.80 893.39
Other Current Liabilities 7 466.72 344.25
Short Term Provisions 8 89.06 100.64
Total 6,233.39 5,405.16
Assets
Non-current assets
Fixed Assets
Tangible Assets 11 2,560.37 2,463.60
Intangible Assets 12 134.10 128.60
Capital Work-in-progress 207.64 180.34
Intangible Assets under development - 12.42
Non-current Investments 13 56.82 41.70
Long Term Loans and Advances 14 388.48 279.91
Other Non-current Assets 15 1.48 2.36
Current assets
Current Investments 13 10.98 -
Inventories 16 1,412.89 1,126.12
Trade Receivables 17 754.65 642.20
Cash and Bank Balances 18 185.58 70.85
Short Term Loans and Advances 14 216.92 197.16
Other Current Assets 15 303.48 259.90
Total 6,233.39 5,405.16
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Consolidated Balance Sheet as at 31st March, 2013
59
Consolidated Statement of Proft and Loss for the year ended on 31st March, 2013
` in Crores
Note Year ended
March 31, 2013
Year ended
March 31, 2012
Revenue from operations (Gross) 21 5,365.33 4,995.91
Less : Excise Duty 72.81 70.79
Revenue from operations (Net) 5,292.52 4,925.12
Other Income 22 80.56 118.50
Total Revenue 5,373.08 5,043.62
Expenses:
Cost of materials and accessories consumed 23 1,748.76 1,622.19
Purchases of Stock in Trade 763.09 727.24
Project Expense 109.77 100.40
Changes in inventories of fnished goods, work-in-progress and
stock-in-trade 24 (284.68) (55.12)
Employee benefts expense 25 565.63 451.40
Finance costs 26 315.34 309.10
Depreciation and amortization expense 27 204.30 161.39
Other expenses 28 1,702.54 1,476.77
Total Expenses 5,124.75 4,793.37
Proft before exceptional and extraordinary items and tax 248.33 250.25
Exceptional items - -
Proft before extraordinary items and tax 248.33 250.25
Extraordinary Items 29 - 245.04
Proft before Tax 248.33 495.29
Tax expense:
Current Tax 59.58 94.54
Deferred tax (5.57) (2.76)
MAT Credit Entitlement (53.75) (32.37)
Proft for the year before adjustment for Minority Interest 248.07 435.88
Share of Proft/(Loss) transferred to Minority Interest (0.34) 0.01
Net Proft for the year after adjustment for Minority Interest 248.41 435.87
Earnings per equity share 31
(Nominal Value per Share ` 10/- (Previous year ` 10/-):
Basic and Diluted
Before Extraordinary Items 9.63 9.48
After Extraordinary Items 9.63 16.90
Signifcant Accounting Policies 2
The accompanying notes are an integral part of the fnancial statements.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
60
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
A CASH FLOW FROM OPERATING ACTIVITIES
Proft Before taxation 248.33 495.29
Adjustments for:
Depreciation /Amortization 204.30 161.39
Impairment Reversal (0.05)
Interest Income (9.57) (7.35)
Interest Expenses 282.59 278.63
Dividend Income (0.35) (0.26)
Bad Debts Written Of (Including Provision) 0.75 2.67
Wealth Tax Provision 0.20 0.20
Sundry Debit Written of 1.57 1.38
Sundry Credit Balances Appropriated (1.40) (2.83)
Foreign Exchange Diference 0.41 (0.16)
Fixed Assets written of 0.58 2.02
Proft on Sale of Land held for sale (14.80) (67.40)
Proft on Sale of Tangible/Intangible assets (23.26) (13.52)
(Proft)/Loss on sale of Investment (0.11) 1.54
Extra Ordinary Item - (245.04)
440.86 111.27
Operating Proft before Working Capital Changes 689.19 606.56
Working Capital Changes:
Changes in Inventories (312.10) 64.81
Changes in trade payables 205.81 (9.19)
Changes in other current liabilities 124.53 40.66
Changes in provisions 9.47 3.34
Changes in loans and advances (46.36) (58.03)
Changes in trade receivables (113.08) (143.12)
Changes in Other assets (44.88) (78.69)
Changes in Other Bank Balances 6.66 (7.22)
Net Changes in Working Capital (169.95) (187.44)
Cash Generated from Operations 519.24 419.12
Direct Taxes paid (Net of Income Tax refund) (61.96) (83.92)
Net Cash Flow from Operating Activities 457.28 335.20
B Cash Flow from Investing Activities
Purchase of tangible/intangible assets (368.32) (449.25)
Sale of tangible assets 66.53 118.12
Sale of Land held for sale 20.30 98.78
Changes in Investments (28.06) 13.55
Capital Advances 12.47 (14.50)
Changes in Loans given (42.23) 14.42
Dividend Income 0.35 0.26
Interest Income 8.12 7.07
Net cash fow before Extra Ordinary Item (330.84) (211.55)
Proceeds from Sale of Investment in Joint Venture - 245.04
Net cash fow from Investing Activites (330.84) 33.49
Consolidated Cash Flow Statement for the year ended on 31st March, 2013
61
` in Crores
Year ended March 31, 2013 Year ended March 31, 2012
C Cash Flow from Financing Activities
Issue of Share Capital - 0.23
Securities Premium received - 0.11
Dividend Paid (25.64) -
Dividend Distribution Tax Paid (4.19) -
Changes in long term Borrowings 221.54 (169.18)
Changes in short term borrowings 103.78 102.02
Interest Paid (301.41) (294.71)
Net Cash fow from Financing Activities (5.92) (361.53)
Net Increase/(Decrease) in cash & cash equivalents 120.52 7.16
Cash & Cash equivalents at the beginning of the period 40.86 33.70
Cash & Cash equivalents at the end of the period 161.38 40.86
a Particulars As at
March 31, 2013
As at
March 31, 2012
Cash and cash equivalents comprise of: (Note 18)
Cash on Hand 1.47 1.75
Cheques on Hand 0.04 (` 15,000/-)
Balances with Banks* 159.88 39.10
Cash and cash equivalents 161.39 40.85
Efect of Exchange Rate Changes 0.01 (0.01)
Cash and cash equivalents as restated 161.38 40.86
* Includes the following balance which is not available for use by the Company
Unpaid dividend account 0.49 0.33
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
Consolidated Cash Flow Statement for the year ended on 31st March, 2013 (Contd.)
62
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
1. BASIS OF CONSOLIDATION
Basis
(i) The Consolidated Financial Statements have been prepared in accordance with Accounting Standard - 21 on “Consolidated Financial
Statements” notifed by Companies (Accounting Standards) Rules, 2006 and relevant clarifcations issued by the Institute of Chartered
Accountants of India. The Consolidated Financial Statements comprise the fnancial statements of Arvind Limited and its subsidiaries
and its Joint Venture entities. Reference in these notes to Arvind Limited, Company, Parent Company, Companies or Group shall mean to
include Arvind Limited or any of its subsidiaries and its Joint Venture entities consolidated in the fnancial statements, unless otherwise
stated.
(ii) The Notes and Signifcant Accounting Policies to the Consolidated Financial Statements are intended to serve as a guide for better
understanding of the Group’s position. In this respect, the Company has disclosed such notes and policies, which represent the needed
disclosure.
Principles
(i) The fnancial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together like
items of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions and unrealised profts or losses are
fully eliminated.
(ii) The diference between cost to the Company of its investments in the subsidiary companies and its share of the equity of the subsidiary
companies, at the dates on which the investments in the subsidiary companies are made, is recognised as Goodwill or Capital Reserve as
the case may be.
(iii) Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders
at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the
equity subsequent to the dates of investments.
(iv) In case of Foreign Subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All assets and Liabilities
are converted at rates prevailing at the end of the year. Any exchange diference arising on translation is accumulated in a “Reserve on
Exchange Rate Fluctuation” in the Balance Sheet.
(v) The Company’s interest in the Joint Venture has been consolidated on line to line basis by adding together the value of assets, liabilities,
income and expenses, after eliminating the unrealised profts/losses of intra group transactions. Joint Venture accounts have been
included in segment to which they relate.
a. The List of Subsidiaries included in the Consolidated Financial Statements are as under :
Sr.
No.
Name of Subsidiary
Country of
incorporation
Proportion of ownership
as on 31st March 2013
1 Asman Investments Limited India 81.88%
2 The Anup Engineering Limited India 88.24%
3 Arvind Worldwide Inc. USA 100%
4 Arvind Worldwide (M) Inc. Mauritius 100%
5 Arvind Accel Limited India 100%
6 Syntel Telecom Limited India 100%
7 Arvind Infrastructure Limited India 100%
8 Arvind Brands & Retail Limited India 99.52%
9 Arvind Lifestyle Brands Limited India 99.76%
10 Arvind Envisol Private Limited India 100%
11 Arvind PD Composites Private Limited India 51%
12 Arvind Overseas (Mauritius) Limited Mauritius 100%
13 Arvind Spinning Limited Mauritius 100%
14 Arvind Textile Mills Limited Bangladesh 100%
15 Arvind Goodhill Suit Manufacturing Private Limited India 51%
16 Arvind Niloy Exports Private Limited Bangladesh 70%
17 Arvind Spinning Park Private Limited India 100%
18 Arvind Processing Park Private Limited India 100%
19 Arvind Hebbal Homes Private Limited India 100%
20 Arvind OG Nonwovens Private Limited India 74%
Notes to consolidated fnancial statement:
63
b. The following Joint Venture entities and Limited Liability Partnerships have been included in the Consolidated Financial Statements :
Sr.
No.
Name of the Entity
Country of
incorporation
Proportion of ownership as
on 31st March 2013
1 Arya Omnitalk Wireless Solutions Private Limited India 50%
2 Arya Omnitalk Radio Trunking Services Private Limited India 50%
3 Tommy Hilfger Arvind Fashions Private Limited India 50%
4 Arvind B SAFAL Homes LLP India 50%
5 Arvind Smart Value Homes LLP India 50%
6 Arudrama Developers Private Limited India 50%
7 Ahmedabad East Infrastructure LLP India 50%
2. SIGNIFICANT ACCOUNTING POLICIES
The Company follows the accrual method of accounting. The fnancial statements have been prepared in accordance with the historical
cost convention (except so far as they relate to (a) revaluation of fxed assets and providing for depreciation on revalued amounts and
(b) items covered under ‘Accounting Standard (AS) – 30’ on ‘Financial Instruments: Recognition and Measurement” which have been
measured at their fair value) and accounting principles generally accepted in India.
The Accounts of the fo reign subsidiaries have been prepared in accordance with local laws and applicable accounting standards / generally
accepted accounting principles.
(A) REVENUE RECOGNITION
(A.1) Sales and operating income includes sale of products, by-products and waste, income from job work services and gain or
loss on forward contracts. Sales are recognised based on passage of title to goods which generally coincides with dispatch.
Revenue from export sales are recognised on shipment basis. Sales are stated net of returns, excise duty & Sales Tax/VAT.
Export incentives are accounted on accrual basis at the time of export of goods, if the entitlement can be estimated with
reasonable accuracy and conditions precedent to claim are fulflled.
(A.2) Retail sales and revenues are recognised on delivery of the merchandise to the customer, when the property in the goods
is transferred for a price, when signifcant risks and rewards have been transferred and no efective ownership control is
retained. Sales are net of discount. Sales tax and VAT are reduced from Retail Turnover.
(A.3) The property in the merchandise of third party consignment stock does not pass to the Company. Since, however, the sale
of such stock forms a part of the activities of the Company’s departmental stores, the gross sales values and cost of the
merchandise are displayed separately in the Statement of Proft and Loss.
(A.4) In respect of gift vouchers and point award schemes operated by the Company, sales are recognised when the gift vouchers
or points are redeemed and the merchandise is sold to the customer.
(A.5) Revenue from store displays and sponsorships are recognised based on the period for which the products or the sponsors’
advertisements are promoted/ displayed. Facility management fees are recognised pro-rata over the period of the contract.
(A.6) Revenue from job work services and Rental Income are recognised based on the services rendered in accordance with the
terms of contracts.
(A.7) Revenue in respect of projects for Construction of Plants and Systems, execution of which is spread over diferent
accounting periods, is recognised on the basis of percentage of completion method in accordance with Accounting
Standard 7 – Accounting for Construction Contracts.
Percentage of completion is determined by the proportion that contract costs incurred for work done till date bears to the
estimated total contract cost.
Diference between costs incurred plus recognised proft / less recognised losses and the amount invoiced is treated as
contract in progress. Determination of revenues under the percentage of completion method necessarily involves making
estimates by the Company, some of which are of a technical nature, relating to the percentage of completion, costs to
completion, and the expected revenue from the contract and the foreseeable losses to completion.
(A.8) Claims receivable on account of Insurance are accounted for to the extent the Company is reasonably certain of their
ultimate collection.
(A.9) Dividend is accounted for as and when it is received.
(B) VALUATION OF INVENTORY
(B.1) The stock of Work-in-progress and Finished goods has been valued at the lower of cost and net realisable value. The cost
has been measured on the standard cost/moving average/FIFO basis as applicable and includes cost of materials and cost
of conversion.
(B.2) Merchandise received under consignment and concessionaire arrangements belong to the consignors/concessionaires
and are therefore excluded from the Company’s inventories.
Notes to consolidated fnancial statement:
64
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
(B.3) All other inventories of stores, consumables, raw materials (Electronics Division) are valued at cost. The stock of waste is
valued at market price. The other raw materials, fnished goods and stock at branches are valued at lower of cost and market
value. Cost is measured on actual average for the whole year. Excise duty wherever applicable is provided on fnished goods
lying within the factory and bonded warehouse at the end of the year.
(C) FIXED ASSETS & DEPRECIATION
Tangible Assets
(C.1) Fixed assets are stated at their original cost of acquisition or construction / revalued cost wherever applicable less
accumulated depreciation and impairment losses. Cost comprises of all costs incurred to bring the assets to their location
and working condition and includes all expenses incurred up to the date of launching new stores to the extent they are
attributable to the new store.
(C.2) Items of fxed assets that have been retired from active use and are held for disposal are stated at the lower of their net
book value and net realisable value and are shown separately in the fnancial statements. Any expected loss is recognised
immediately in the Statement of Proft and Loss.
(C.3) Exchange rate gain or loss on foreign currency loans related to acquisition of depreciable assets are being capitalized as per
the notifcation dated 31st March, 2009 as amended from time to time issued by Ministry of Corporate Afairs, New Delhi.
(C.4) Depreciation on Revalued Fixed Assets is calculated on the residual life of the assets or as per rates specifed in the Schedule
XIV to the Companies Act, 1956 whichever is higher.
(C.5) Additions to fxed assets have been stated at cost net of CENVAT wherever applicable.
(C.6) Directly identifable preoperative expenses of new projects of capital nature under implementation are carried forward
under capital work-in-progress, pending capitalization.
(C.7) Depreciation on additions to Fixed Assets has been provided on straight-line method at the rates specifed in Schedule XIV
to the Companies Act, 1956, as existing at the time of capitalization except for motor vehicles where depreciation has been
provided at 20/25% and on leasehold improvements at 10%.
(C.8) In Arvind Lifestyle Brands Limited, depreciation on addition to Fixed Assets is provided, pro rata for the period of use, by the
straight line method (SLM), as per the rates prescribed in Schedule XIV to the Act except for the following which are based
on management’s estimate of useful lives of the fxed assets:
Leasehold Improvements, Plant & Equipments,
Ofce Equipments and Furniture & Fixtures 15%
(C.9) Depreciation on impaired asset is provided on the asset’s revised carrying amount, over its remaining useful life.
(C.10) Depreciation on exchange rate diference capitalized is provided over the balance life of the assets as per the notifcation
dated 31st March, 2009 as amended from time to time issued by the Ministry of Corporate Afairs.
(C.11) Individual assets costing less than ` 5,000/- have been fully depreciated in the year of purchase on prorata basis.
(C.12) In the case of foreign subsidiaries, depreciation has been provided as per the rates permitted under the local laws/ at such
rate so as to write of the assets over its useful life.
(C.13) Premium on Leasehold Land is amortized over the period of Lease.
(C.14) Revaluation Reserve on Assets sold is transferred to General Reserve.
Intangible Assets
(C.15) Intangible assets are stated at their cost of acquisition and / or fair value, less accumulated amortisation and impairment
losses. An intangible asset is recognised, where it is probable that the future economic benefts attributable to the asset will
fow to the enterprise and where its value/cost can be reliably measured.
(C.16) The Company capitalizes software and related implementation costs where it is reasonably estimated that the software has
an enduring useful life.
(C.17) Job Workers’ Network Value, Vendors’ Network Value and Distribution Network Value have been amortized on Straight
Line basis over the period of fve years. Value of License Brands and Brand Value have been amortized in the ratio of revenue
expected to be generated from these brands over the period of ten years.
(C.18) Software is depreciated over management estimate of its useful life of 5 years.
(C.19) Patent/Knowhow is depreciated over its useful validity period.
(D) INVESTMENTS
(D.1) Investments are classifed as Long Term Investments and Current Investments. Long term investments are stated at cost
less permanent diminution in value, if any. Current Investments are stated at lower of cost and net realizable value.
(D.2) Investment property: Investment in buildings that are not intended to be occupied substantially for use by, or in the
operations of, the Company, have been classifed as investment property. Investment properties are carried at cost less
accumulated depreciation.
Notes to consolidated fnancial statement:
65
Notes to consolidated fnancial statement:
(E) IMPAIRMENT OF ASSETS
An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date
there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the
asset belongs, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value in use). The carrying amount
is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Proft and Loss.
Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an
asset in prior accounting periods may no longer exist or may have decreased.
(F) FOREIGN CURRENCY TRANSACTIONS
(F.1) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the
transaction.
(F.2) Monetary items denominated in foreign currencies at the year end are restated at year end rates.
(F.3) Non-monetary foreign currency items are carried at cost.
(F.4) The Company has opted to avail the choice provided under paragraph 46A of AS 11: The Efects of Changes in Foreign
Exchange Rates inserted vide Notifcation dated December 29, 2011. Consequently, All long term foreign currency monetary
items consisting of loans which relate to acquisition of depreciable capital assets at the end of the year have been restated at
the rate prevailing at the balance sheet date. The diference arising as a result has been added to or deducted from the cost
of the assets. Exchange rate diference on other long term foreign currency loans is carried to ‘Foreign Currency Monetary
Item Translation Diference Account’ to be amortized up to the period of loan or up to March 31, 2020 whichever is earlier.
(F.5) Any income or expense on account of exchange diference either on settlement or on translation other than as mentioned in
(F.4) above is recognised in the Statement of Proft and Loss.
(F.6) Expenses of overseas ofces are translated and accounted at the monthly average rate.
(G) DERIVATIVES & COMMODITY HEDGING TRANSACTIONS
(G.1) In order to hedge its exposure to foreign exchange, interest rate and commodity price risks, the Company enters into
forward, option, swap contracts and other derivative fnancial instruments. The Company neither holds nor issues any
derivative fnancial instruments for speculative purposes.
(G.2) Derivative fnancial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-
measured at their fair value at subsequent balance sheet dates.
(G.3) Changes in the fair value of derivatives that are designated and qualify as cash fow hedges and are determined to be an
efective hedge are recorded in hedging reserve account. To designate a forward contract or option as an efective hedge,
management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract
whether the contract is efective in achieving ofsetting cash fows attributable to hedged risk. Any cumulative gain or loss
on the hedging instrument recognised in hedging reserve is kept in hedging reserve until the forecast transaction occurs or
the hedged accounting is discontinued. Amounts deferred to hedging reserve are recycled in the Statement of Proft and
Loss in the periods when the hedged
item is recognised in the Statement of Proft and Loss or when the portion of the gain or loss is determined to be an
inefective hedge.
(G.4) Derivative fnancial instruments that do not qualify for hedge accounting are marked to market at the balance sheet date
and gains or losses are recognised in the Statement of Proft and Loss immediately.
(G.5) Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer
qualifes for hedge accounting. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in hedging reserve is transferred to proft or loss for the year.
(H) EMPLOYEE BENEFITS
(H.1) The Company has Defned Contribution Plans for post employment benefts namely Provident Fund and Superannuation
Fund which are recognised by the Income Tax Authorities. These funds are administered through trustees and the
Company’s contributions thereto are charged to revenue every year. The Company also pays insurance premiums to
fund a post-employment medical assistance scheme, a Defned Contribution Plan administered by ICICI Lombard General
Insurance Company Limited which is charged to revenue every year. The Company’s Contribution to State Plans namely
Employee’s State Insurance Fund and Employee’s Pension Scheme are charged to revenue every year.
(H.2) The Company has Defned Beneft Plans namely leave encashment/ compensated absences and Gratuity for all the
employees, the liability for which is determined on the basis of an actuarial valuation at the year end and incremental liability,
if any, is provided for in the books. The actuarial valuation is done based on Projected Unit Credit Method. Gratuity scheme
is administered through trust recognised by the Income Tax Authorities and / or by LIC.
(H.3) Actuarial Gains and Losses comprise of experience adjustments and the efects of changes in actuarial assumptions and are
recognised immediately in the Statement of Proft and Loss as income or expense.
66
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
(I) BORROWING COST
For Arvind Limited
Borrowing costs include interest, fees and other charges incurred in connection with the borrowing of funds. It is calculated on
the basis of efective interest rate in accordance with Accounting Standard (AS) -30 and considered as revenue expenditure and
charged to Statement of Proft and Loss for the year in which it is incurred except for borrowing costs either generally or specifcally
attributed directly to the acquisition/improvement of qualifying assets up to the date when such assets are ready for intended use
which are capitalised as a part of the cost of such asset.
For Subsidiaries and Joint Ventures
Borrowing costs includes interest, fees and other charges incurred in connection with the borrowing of funds and is considered as
revenue expenditure for the year in which it is incurred except for borrowing costs attributed to the acquisitions/improvement of
qualifying capital asset and incurred till the commencement of commercial use of the asset and which is capitalised as cost of that
asset.
(J) LEASE ACCOUNTING
(J.1) Assets acquired under Finance Lease are segregated from the assets owned and recognised as asset at an amount equal
to the fair value of the leased assets at the inception of the lease or the present value of the minimum lease payments
whichever is lower with corresponding outstanding liability.
(J.2) Lease rental payable on such fnance lease has been apportioned between fnance charge and the reduction in the
outstanding liability. The fnance charge has been allocated to periods during the lease term so as to produce constant
periodic rate of interest on the remaining balance of liability for each period.
(J.3) Lease Rentals for assets acquired under operating lease are recognised as an expense in the Statement of Proft & Loss on a
straight line basis over the lease term.
(K) TAXES ON INCOME
(K.1) Tax expense consists of both current as well as deferred tax liability. Current tax represents amount of income tax payable
including the tax payable u/s 115JB, if any, in respect of taxable income for the year.
(K.2) Minimum Alternate Tax Credit is recognised as an asset only when and to the extent there is convincing evidence that the
Company will pay normal income tax within the specifed period.
(K.3) Deferred tax is recognised on timing diference between the accounting income and the taxable income for the year that
originates in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantifed
using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
(K.4) Deferred tax assets are recognised and carried forward to the extent that there is a virtual certainty supported by convincing
evidence that sufcient future taxable income will be available against which such deferred tax assets can be realized.
(L) EARNING PER SHARE
The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per
Share. Basic EPS is computed by dividing the net proft or loss for the year by the weighted average number of Equity shares
outstanding during the year. Diluted EPS is computed by dividing the net proft or loss for the year by the weighted average number
of equity shares outstanding during the year as adjusted for the efects of all dilutive potential equity shares, except where the
results are anti-dilutive.
(M) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT
ASSETS
Provisions involving a substantial degree of estimation in measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outfow of resources. Contingent liabilities are not recognised but are
disclosed in the accounts by way of a note. Contingent assets are neither recognised nor disclosed in the fnancial statements.
(N) CAPITAL ISSUE EXPENSES
Expenses on issue of Shares, Debentures and GDRs are being adjusted against Share Premium Account as permitted by section 78
of the Companies Act.
(O) ACCOUNTING FOR JOINT VENTURE
Accounting for Joint Venture has been done as follows:
Type of Joint Venture Accounting Treatment
Jointly Controlled Entity Company’s share of proft or loss is accounted on determination of proft or loss by the Joint Ventures.
Joint Venture interests accounted as above have been included in segments to which it relates.
Notes to consolidated fnancial statement:
67
Notes to consolidated fnancial statement:
` in Crores
3 Share Capital As at
March 31, 2013
As at
March 31, 2012
Authorised
Equity Shares
565,000,000 Shares (Previous Year 565,000,000) 565.00 565.00
Par Value of ` 10/- per share
Preference Shares
10,000,000 Shares (Previous Year 10,000,000) 100.00 100.00
Par Value of ` 100/- per share
665.00 665.00
Issued
Equity Shares
258,043,969 Shares (Previous Year 254,633,441) 258.04 254.63
Par Value of ` 10/- per share
258.04 254.63
Subscribed and fully paid up
Equity Shares
258,043,069 Shares (Previous Year 254,632,541) 258.04 254.63
Par Value of ` 10/- per share fully paid up
Forfeited Shares
900 Shares (Previous Year 900)
(` 4,500/- originally paid up (Previous Year ` 4,500/-)
Equity Shares Suspense Account - 3.41
Total 258.04 258.04
a Reconciliation of Number of Equity Shares
Particulars
As At March 31, 2013 As At March 31, 2012
No. of Shares ` in Crores No. of Shares ` in Crores
Balance at the beginning of the year 254,632,541 254.63 254,400,041 254.40
Add :
Shares alloted pursuant to exercise of Employee Stock
Option Plan
- - 232,500 0.23
Shares alloted to the shareholders of Amalgamated Company 3,410,528 3.41 - -
Balance at the end of the year 258,043,069 258.04 254,632,541 254.63
b Rights, Preferences and Restrictions attached to Shares
Equity Shares:
The Company has one class of shares referred to as equity shares having a par value of ` 10 each. Each shareholder is entitled to one vote per share
held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In
the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
c Details of Shares held by Shareholders holding more than 5% of the aggregate shares in the Company
Particulars
As At
March 31, 2013
As At
March 31, 2012
Aura Securities Private Limited 9,57,90,590 8,57,38,882
37.12% 33.67%
Life Insurance Corporation of India 1,65,85,134 1,65,58,953
6.43% 6.50%
d Shares reserved for issue under options
Refer note 32 for details of shares to be issued under options
e Shares allotted as fully paid up pursuant to contract without payment being received in cash (during 5 years immediately
preceding March 31, 2013)
34,10,528 Equity Shares of ` 10 each were issued during the year to the erstwhile shareholders of Arvind Products Limited pursuant to the Scheme
of Amalgamation without payment being received in cash.
f Proposed Dividend
The fnal dividend proposed for the year is as follows:
Particulars
As At
March 31, 2013
As At
March 31, 2012
On Equity Shares of ` 10/- each
Dividend per Equity Share (` ) 1.65 1
Percentage of Dividend Proposed 16.50% 10%
68
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
4 Reserves and Surplus As at
March 31, 2013
As at
March 31, 2012
Captial Reserve
Balance as per last fnancial statements 28.53 29.97
Less: Adjustment on Amalgamation - (1.44)
Add: Addition during the year 0.38 -
Balance at the end of the year 28.91 28.53
Capital Reserve on Consolidation (Note 41)
Balance as per last fnancial statements 28.35 28.35
Add: Addition during the year 56.66 -
Balance at the end of the year 85.01 28.35
Special Reserve
Balance as per last fnancial statements 0.40 0.20
Add: Addition during the year 0.11 0.20
Balance at the end of the year 0.51 0.40
Reserve on Exchange Rate Fluctuation
Balance as per last fnancial statements (0.73) (0.47)
Add: Addition during the year (0.23) (0.26)
Balance at the end of the year (0.96) (0.73)
General Reserve
Balance as per last fnancial statements 26.16 5.79
Add: Amount transferred from Revaluation Reserve 5.24 20.37
Add: Amount transferred from Surplus in Statement of Profit & Loss 20.00 -
Balance at the end of the year 51.40 26.16
Securities Premium Account
Balance as per last fnancial statements 653.54 711.42
Less: Adjustment on Consolidation - (57.99)
Add: Addition during the year - 0.11
Balance at the end of the year 653.54 653.54
Captial Redemption Reserve
Balance as per last fnancial statements 69.50 69.50
Revaluation Reserve (Note 11c)
Balance as per last fnancial statements 284.82 305.86
Add: Addition during the year 8.34 -
293.16 305.86
Less: Amount transferred to General Reserve 5.24 20.37
Less: Loss on Compulsory Acquisition adjusted 10.13 0.67
Balance at the end of the year 277.79 284.82
Hedge Reserve (Note 37)
Balance as per last fnancial statements (98.25) 31.89
Add: Adjustment during the year (Net) 74.61 (130.14)
Balance at the end of the year (23.64) (98.25)
Foreign Currency Monetary Item Translation Diference Account
Balance as per last fnancial statements (4.19) 0.75
Add: Adjustment during the year (Net) (0.71) (4.94)
Balance at the end of the year (4.90) (4.19)
Investment Revaluation Reserve
Balance as per last fnancial statements - 3.29
Less: Adjustment on Amalgamation - (5.48)
Add: Adjustment during the year (Net) - 2.19
Balance at the end of the year - -
Surplus in Statement of Proft and Loss
Balance as per last fnancial statements 781.43 254.64
Add/(Less): Adjustment on Consolidation (101.13) 177.42
680.30 432.06
Less : Amount transferred to Statement of Proft and Loss on account of Amalgamation - (56.31)
680.30 375.75
Add : Proft for the year 248.41 435.87
928.71 811.62
Less: Appropriations
Transfer to General Reserve 20.00 -
Proposed dividend on Equity Shares for the year 42.58 25.80
Dividend distribution tax on Proposed dividend on Equity Shares 7.24 4.19
Transfer to Special Reserve 0.11 0.20
Balance at the end of the year 858.78 781.43
Total 1,995.94 1,769.56
Notes to consolidated fnancial statement:
69
Notes to consolidated fnancial statement:
` in Crores
5 Long Term Borrowings Non- Current portion Current Maturities
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Secured:
Term Loans :
From Banks 842.09 672.31 148.33 145.26
From Financial Institutions and Others 160.45 102.15 23.59 18.35
Unsecured:
From Financial Institutions and Others 2.58 2.58 - -
Deferred Electricity Duty - - 3.12 12.69
1,005.12 777.04 175.04 176.30
Amount disclosed under the head “Other Current
Liabilities” (Note 7)
- - 175.04 176.30
Total 1,005.12 777.04 - -
a Borrowings As At
March 31, 2013
As At
March 31, 2012
At Amortized Cost 1,180.16 953.34
At Original Cost 1,184.36 952.34
6 Deferred Tax
In terms of the provisions of the Accounting Standard – 22 “Accounting for Taxes on Income” notifed by Companies (Accounting Standards) Rules,
2006, there is a net deferred tax asset on account of accumulated business losses and unabsorbed depreciation.
In compliance with provisions of Accounting Standard and based on General Prudence, the Company has not recognised the deferred tax asset
nor written back excess deferred tax liability, while preparing the accounts of the year under review.
` in Crores
7 Other Liabilities Non- Current Current
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Current maturities of long-term borrowings (Note 5) - - 175.04 176.30
Interest accrued but not due on borrowings - - 4.65 6.14
Interest accrued and due - - 1.99 -
Income received in advance 0.02 0.03 3.59 4.47
Advances from Customers - - 54.17 49.86
Statutory dues including Provident Fund and Tax
deducted at Source
- - 23.02 22.78
Security Deposits 10.05 8.81 7.30 4.71
Investor Education and Protection Fund shall be credited
by the following amount namely :
Unpaid dividend (Note a) - - 0.50 0.34
Book Overdraft - - 123.31 1.81
Payable to employees - - 46.20 33.35
Others 0.23 - 26.95 44.49
Total
10.30 8.84 466.72 344.25
a There are no amounts due for payment to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at the year end.
` in Crores
8 Provisions Long Term Short Term
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Provision for Employee Benefts 12.07 9.05 17.66 11.24
Provision for Losses on Derivative Contracts 1.15 41.40 17.40 53.23
Proposed Dividend - - 42.58 25.80
Dividend Distribution Tax - - 7.24 4.19
Provision for Income Tax (Net of Advance Tax) - - - 2.23
Provision for Wealth tax - - 1.23 1.03
Provision for Loyalty Points - - 0.14 0.11
Provision for Litigation /Disputed Matters - - 2.81 2.81
Total 13.22 50.45 89.06 100.64
70
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
a Provision for Customer Loyalty Program Reward Points
The Company has made provision for customer loyalty program reward points. The movement in provision for those reward points are given
below:
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Balance as per last fnancial statements 0.11 0.20
Net Provision/(Reversal) made during the year 0.03 (0.09)
Balance at the end of the year 0.14 0.11
b Provision for Litigation/Disputed Matters
The Company has made provisions for pending disputed matters in respect of Indirect Taxes like Sales Tax, Excise Duty and Custom Duty, the liability
which may arise in the future, the quantum whereof will be determined as and when the matters are disposed of. The movement in the provision
account is as under:
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Balance as per last fnancial statements 2.81 2.81
Balance at the end of the year 2.81 2.81
` in Crores
9 Short Term Borrowings
As at
March 31, 2013
As at
March 31, 2012
Secured:
Working Capital Loans repayable on demand
From Banks 1,193.51 1,060.16
From Financial Institutions and Others - 8.26
1,193.51 1,068.42
Unsecured:
Under Buyer’s Credit Arrangement from Banks 66.31 38.07
Loans repayable on demand from Banks - 0.95
Intercorporate Deposits
From Related Parties 0.31 1.42
From Others 20.49 66.08
87.11 106.52
Total 1,280.62 1,174.94
` in Crores
10 Trade Payables
As at
March 31, 2013
As at
March 31, 2012
Creditors in respect of Goods and Services (Note a) 830.38 728.84
Acceptances 267.42 164.55
Total 1,097.80 893.39
a The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development
(MSMED) Act, 2006 and hence disclosures as required under Section 22 of The Micro, Small and Medium Enterprise Development (MSMED) Act,
2006 regarding:
(a) Amount due and outstanding to suppliers as at the end of accounting year;
(b) Interest paid during the year;
(c) Interest payable at the end of the accounting year; and
(d) Interest accrued and unpaid at the end of the accounting year have not been given. The Company is making eforts to get the confrmations
from the suppliers as regard to their status under the said Act.
Notes to consolidated fnancial statement:
71
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72
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
12 Intangible Assets
` in Crores
Particulars
Gross Block Amortization Net Block
As on
01.04.2012
Adjustment on
Consolidation/
Amalgamation
Additions Disposals Other
Adjustments
As on
31.03.2013
As on
01.04.2012
Adjustment on
Consolidation/
Amalgamation
For the
year
Deductions As on
31.03.2013
As on
31.03.2013
As on
31.03.2012
Own Assets
Goodwill onConsolidation 22.04 - - - - 22.04 - - - - - 22.04 22.04
Patent andTechnical Knowhow 0.33 - 12.77 - - 13.10 0.20 - 1.32 - 1.52 11.58 0.13
Computer Software 37.41 (2.49) 4.02 - 0.01 38.95 23.87 (2.49) 4.48 - 25.86 13.09 13.54
BrandValue&LicenceBrands 102.02 (1.36) 0.60 - - 101.26 12.33 (1.36) 8.31 - 19.28 81.98 89.69
DistributionNetwork - - 4.31 - - 4.31 - - 0.50 - 0.50 3.81 -
Vendors’ Network 6.27 - - - - 6.27 3.75 - 1.25 - 5.00 1.27 2.52
Jobworkers’ Network 1.73 - - - - 1.73 1.05 - 0.35 - 1.40 0.33 0.68
Total 169.80 (3.85) 21.70 - 0.01 187.66 41.20 (3.85) 16.21 - 53.56 134.10 128.60
Previous Year 176.17 (48.70) 43.29 0.96 - 169.80 30.33 - 11.82 0.95 41.20 128.60 145.84
a Details of Borrowing Cost and Exchange Diferences:
` in Crores
Particulars
Other Adjustements
For the year
2012-2013 2011-2012
Borrowing Cost 0.01 -
Total 0.01 -
` in Crores
13 Investments Non-Current Current
As at As at
Particulars March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Investment Property (at cost less accumulated depreciation)
Cost of Ofce Building given on Operating Lease 13.70 13.70 - -
Less: Accumulated Depreciation 3.35 3.13 - -
10.35 10.57 - -
Trade Investments (Valued at Cost unless stated otherwise)
Investments in Government Trust Securities 0.02 0.02 - -
Investments in Fully Paid Equity Shares (Unquoted)
In Subsidiaries - 1.85 - -
Others 0.87 1.69 - -
In Partnership Firm* - 1.65 - -
Other Investments
Quoted
In Equity Shares 10.47 10.47 - -
Unquoted
In Equity Shares - - 1.06 -
In Mutual Funds - 2.27 9.92 -
11.36 17.95 10.98 -
Share Application Money 35.11 13.18 - -
Total 56.82 41.70 10.98 -
* The fnancial statements of partnership frm are under compilation and therefore the balance of capital account disclosed above is subject to change.
` in Crores
a Disclosure as per AS 13 - Accounting for Investments As at
March 31, 2013
As at
March 31, 2012
Long Term Investments 11.36 17.95
Current Investments 10.98 -
Notes to consolidated fnancial statement:
73
Notes to consolidated fnancial statement:
` in Crores
14 Loans and Advances Long Term Short Term
(Unsecured, Considered good unless otherwise stated) As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Capital Advances 71.23 83.82 - -
Considered doubtful 0.12 - - -
Less: Provision 0.12 - - -
71.23 83.82 - -
Security Deposits 123.22 93.51 4.34 1.20
Advance tax paid (Net of Provision) 0.11 - - -
Loans:
To Related Parties - Director of Joint Venture 0.10 - - -
To Employees 4.65 5.18 2.07 1.99
To Others 40.72 - 24.88 23.02
MAT Credit Entitlement 146.34 92.55 - -
Advances recoverable in cash or in kind or for value to be received 0.03 4.75 144.69 137.07
Prepaid Expenses 0.23 0.10 19.63 13.66
Balances with Government Authorities 1.85 - 1.65 2.11
CENVAT/Custom Duty Receivable - - 19.66 18.11
Total 388.48 279.91 216.92 197.16
` in Crores
15 Other Assets
Non Current Current
As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Non Current Bank Balances (Note 18) 1.48 2.33 - -
Preliminary Expenses - 0.03 0.02 0.01
Land held for Sale - - 99.43 102.21
Interest Accrued - - 2.46 1.01
Unbilled Revenue - - 7.08 7.12
Income Receivable - - 11.76 15.66
Receivable other than trade - - 122.05 80.00
Export Incentive Receivable - - 60.68 53.89
Total 1.48 2.36 303.48 259.90
` in Crores
16 Inventories
As at
March 31, 2013
As at
March 31, 2012
Raw Materials and Accessories 234.07 265.42
In Transit 0.83 0.82
Fuel 2.63 2.56
Stores and Spares 50.44 43.08
In Transit - 0.02
Work-in-Progress 354.37 330.20
Finished Goods 233.90 151.78
In Transit 0.62 0.31
By Product 0.50 -
Stock in Trade 349.48 248.83
In Transit 5.61 5.55
Waste 1.56 1.96
Packing Material 8.10 1.85
In Transit - 0.01
Material at Site 3.04 0.39
Project work-in-progress 165.61 71.21
Unsold plots of land 2.13 2.13
Total 1,412.89 1,126.12
` in Crores
17 Trade Receivables
As at
March 31, 2013
As at
March 31, 2012
(Unsecured, considered good
unless otherwise stated)
Outstanding for a period
exceeding six months from the
date they are due for payment
Secured 7.06 5.16
Considered Good 95.54 44.55
Considered doubtful 1.33 1.19
Less: Provision for Doubtful Debts 1.33 1.19
102.60 49.71
Others
Unsecured 652.05 592.49
Total 754.65 642.20
74
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Non Current Current
18 Cash and Bank Balances As At As At
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Cash and Cash Equivalents:
Cash on Hand - - 1.47 1.75
Cheques on Hand - - 0.04 (` 15,000/-)
Balances with Banks
In Current Accounts - - 30.09 30.01
In Unpaid Dividend Accounts - - 0.50 0.34
In Exchange Earners Foreign Currency A/c - - - 0.19
In Cash Credit Account - - 123.00 8.56
In Saving Accounts - - (` 45,808/-) (` 45,808/-)
In Deposit Account (with original maturity upto 3 months) - - 6.29 -
- - 161.39 40.85
Other Bank Balances:
In Deposits Accounts
With original maturity more than 3 months but less than 12 months - - 5.39 12.80
With original maturity more than 12 months 0.43 1.65 1.13 4.72
Held as Margin Money
(Under lien with bank as Security for Guarantee Facility) 1.04 0.68 17.67 12.48
Lodged with Sales Tax Department 0.01 - (` 20,000/-) (` 20,000/-)
1.48 2.33 24.19 30.00
Amount disclosed under the head “Other Non Current
Assets” (Note 15)
1.48 2.33 - -
Total - - 185.58 70.85
19 Contingent Liabilities
(to the extent not provided for)
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Bills Discounted 117.59 111.40
Claims against the Company not acknowledged as debts 9.27 31.24
Guarantees given by the Banks on behalf of the Company 103.17 91.37
Guarantees given by the Company to Banks on behalf of Joint Ventures 13.23 16.91
Guarantees given by the Company to Banks on behalf of Other Companies 95.61 124.41
Disputed Demands in respect of
Excise/Custom Duty 29.33 31.25
Sales Tax 22.81 22.00
Income Tax 19.11 18.13
Service Tax 1.28 1.63
Textile Committee Cess 0.11 0.11
a It is not practicable for the Company to estimate the timings of cash outfows, if any, in respect of the above pending resolution of the respective
proceedings.
20 Capital and Other Commitments
` in Crores
Particulars
As at
March 31, 2013
As at
March 31, 2012
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for 86.76 67.98
Other Commitments - -
Notes to consolidated fnancial statement:
75
Notes to consolidated fnancial statement:
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
21 Revenue from Operations
Sale of Products
Finished Goods and Stock in Trade 5,216.01 4,755.08
Less : Excise Duty/ VAT 72.81 70.79
5,143.20 4,684.29
Sale of Services 29.73 35.59
Other Operating Revenues
Export Incentives 103.58 109.78
Waste Sales 72.49 55.68
Commission Income 10.22 6.85
Gain / (Loss) on Forward Contracts (95.47) (1.26)
Other Operating Income 28.77 34.19
Total 5,292.52 4,925.12
22 Other Income
Interest Income 9.57 7.35
Dividend Income on Long Term
Investments
0.35 0.26
Rent 0.88 0.58
Sundry Credit Balances Appropriated 1.40 2.83
Proft on Sale of Fixed Assets (Net) 23.26 13.52
Proft on Sale of Investments (Net) 0.11 -
Proft on Sale of Land held for Sale 14.80 67.40
Provision no longer required 2.77 3.20
Other non-operating income 27.42 21.54
Prior Period Item - 1.82
Total 80.56 118.50
23 Cost of Materials and Accessories
Consumed
Stock at the beginning of the year 265.42 373.03
Purchases 1,717.41 1,514.58
1,982.83 1,887.61
Less: Stock at the end of the year 234.07 265.42
Total 1,748.76 1,622.19
24 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade
(Increase)/Decrease in stocks
Stock at the end of the year
Finished Goods 233.90 151.78
Stock-in-trade 349.48 248.83
Work-in-Progress 354.37 330.20
Project Work-in-Progress 165.61 71.21
Unsold Plot of Lands 2.13 2.13
Waste 1.56 1.96
1,107.05 806.11
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
24 Changes in Inventories of Finished
Goods, Work-in-progress and
Stock in Trade (Contd.)
Stock at the beginning of the year
Finished Goods 151.78 179.96
Stock-in-trade 248.83 220.08
Work-in-Progress 330.20 346.04
Project Work-in-Progress 71.21 47.73
Unsold Plot of Lands 2.13 -
Waste 1.96 2.45
806.11 796.26
Less : Adjusted on account of
Consolidation/Amalgamation
(25.33) (45.32)
780.78 750.94
Add : Transferred from Capital Work in
Progress
0.14 -
780.92 750.94
Adjustment on Consolidation 41.36 (0.09)
Excise Duty in Value of Stock - Increase
/ (Decrease)
0.09 0.14
(Increase)/Decrease in stocks (284.68) (55.12)
25 Employee Benefts Expense
Salaries and Wages 497.76 399.66
Contribution to Provident Fund and
Other Funds
54.02 39.58
Staf Welfare Expenses 13.85 12.16
Total 565.63 451.40
26 Finance Costs
Interest
On Term Loans 97.29 102.42
On working capital loans 104.46 91.69
Others 55.50 50.16
Interest on shortfall of advance tax - 0.44
Exchange Diference to the extent
considered as an adjustment to
Borrowing Costs
25.34 33.92
Other Borrowing Costs 7.75 2.02
Bank Charges 25.00 28.45
Total 315.34 309.10
27 Depreciation / Amortization
Expense
Depreciation of Tangible Assets 187.87 149.22
Amortization of Intangible Assets 16.21 11.82
Depreciation of Investment Property 0.22 0.35
Total 204.30 161.39
76
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
` in Crores
Year ended
March 31,
2013
Year ended
March 31,
2012
28 Other Expenses
Power and fuel 429.78 366.25
Stores Consumed 311.35 251.31
Jobwork and Processing Charges 82.98 70.63
Insurance 4.64 4.61
Printing, Stationery & Communication 13.89 12.83
Rent 165.01 129.95
Commission, Brokerage and Discounts 98.33 90.01
Rates and taxes 20.28 14.76
Repairs:
To Buildings 3.19 2.66
To Machineries 90.35 92.97
To Others 27.73 20.07
Freight, Insurance and Clearing
Charges
51.59 36.68
Excise Duty borne by Company 50.79 50.91
Legal and Professional Fees 24.94 19.17
Conveyance and Travelling Expenses 30.31 24.01
Advertisement and Publicity 80.70 73.70
Directors’ sitting fees 0.02 0.05
Miscellaneous Labour Charges 58.33 59.37
Royalty on Sales 33.83 -
Provision for Doubtful Debts 0.72 0.91
Bad Debts written of 0.03 1.76
Sundry Debits written of 1.57 1.38
Fixed Assets Written of 0.58 2.02
Payments to the auditor as
(a) Auditor 1.14 1.07
(b) For tax audit matters 0.16 0.14
(c) For taxation matters 0.10 0.10
(d) For Company law matters 0.24 0.24
(e) For Other Certifcation work 0.48 0.42
(f) For reimbursement of expenses 0.07 0.06
Exchange Diference (Net) 15.49 18.91
Loss on Sale of Investments (Net) - 1.54
Loans to Subsidiaries Written Of - 7.91
Less : Adjusted against Provision for
doubtful Loans
- (7.91)
Goodwill on Amalgamation Written Of 45.49
Charge on account of alignment of
accounting policies of Amalgamated
Company with the Company - 10.82
- 56.31
Less : Amount Transferred from
Opening balance of Surplus in
Statement of Proft and Loss - (56.31)
- -
Miscellaneous Expenses 103.92 128.28
Total 1,702.54 1,476.77
29 Extraordinary Item
Proft on Sale of Investment in Joint
Venture
- 245.04
Total - 245.04
30 Scheme of Arrangement
i A Composite Scheme of Arrangement (“the Scheme”) between
Arvind Lifestyle Brands Limited (“ALBL”) and Arvind Retail Limited
(“ARL”) under Sections 391 to 394 of the Companies Act, 1956 for
amalgamation of ARL with ALBL has been sanctioned by the High
Court of Gujarat at Ahmedabad on 18th April 2013. The Scheme has
become efective from the appointed date 1st April, 2011 .
31 Earning Per Share (EPS) ` in Crores, unless otherwise stated
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Proft after Tax before Extra
Ordinary Item
248.41 244.69
Add : Extra Ordinary Item (Net of Tax
of ` 53.86 Crores) - 191.18
Proft after Extra Ordinary Item
available to equity shareholders
248.41 435.87
Weighted average no. of Equity Shares
For Basic EPS Nos. 258,043,069 257,983,329
For Diluted EPS Nos. 258,048,828 257,983,329
Nominal value of Equity
Shares
` 10.00 10.00
Basic Earning Per Share
Before Extra Ordinary Item ` 9.63 9.48
After Extra Ordinary Item ` 9.63 16.90
Diluted Earning Per Share
Before Extra Ordinary Item ` 9.63 9.48
After Extra Ordinary Item ` 9.63 16.90
Weighted average number of Equity Shares
No. of Shares for Basic EPS 258,043,069 257,983,329
Dilutive Efect of ESOS 5,759 -
No. of Shares for Diluted EPS after
considering dilute efect of
outstanding stock
258,048,828 257,983,329
32 Employee Share Based Payment
i The Company has formulated Employee Stock Option Scheme (ESOS
2008), the features of which are as follows :
Scheme ESOS 2008 Tranche - II
Date of Grant April 21, 2011
Number of options granted 200,000
Exercise Price per option ` 73.70
Date of vesting The vesting will be as under :
33.33% on April 30, 2012
33.33% on April 30, 2013
33.33% on April 30, 2014
Exercise Period Within 3 years from the date of
respective vesting.
Method of settlement Through allotment of one
Equity Share for each option
granted.
ii Intrinsic Value Method has been used to account for the employee
share based payment plans. The intrinsic value of each stock option
granted under the ESOS 2008 plan is ` Nil since the market price of
the underlying share at the grant date was same as the exercise price
and consequently the accounting value of the option (compensation
cost) is ` Nil.
ii Pursuant to the Scheme:
a. ARL has been amalgamated with ALBL with efect from 1st
April 2011, (the appointed date).
b. The amalgamation has been accounted for under the
“purchase method”. Accordingly, as on appointed date, all the
assets of ARL have been taken at their fair value and all the
liabilities including the contingent liabilities have been
accounted for on the basis of accrual and certainty as decided
by the management.
77
Notes to Consolidated Financial Statements
iii Further details of the stock option plans ESOS 2008 is as follows :
Particulars
ESOS 2008
Tranche-II
2012-13 2011-12
Options
Outstanding at the beginning of year 200,000 -
Granted During the year - 200,000
Lapsed during the year - -
Exercised during the year - -
Vested but not exercised at the end of year 66,660 -
Not vested at the end of year 133,340 200,000
Weighted Average Exercise Price per
Option
` 73.70 ` 73.70
iv The Black-Scholes-Mertons Option Pricing Model have been used to
derive the estimated value of stock option granted if the fair value method
to account for the employee share based payment plans were to be used.
The estimated value of each stock options and the parameters used for
deriving the estimated value of Stock Option granted under Black-
Scholes-Mertons Option Pricing Model is as follows:
Particulars
ESOS 2008
Tranche-II
Vesting on April 30,
2012 2013 2014
Estimated Value of Stock Options (`) 32.45 39.47 42.63
Share Price at Grant Date (`) 73.70 73.70 73.70
Exercise Price (`) 73.70 73.70 73.70
Expected Volatility (%) 62.46% 65.93% 62.19%
Dividend Yield Rate (%) 0.00% 0.00% 0.00%
Expected Life of Options(in years) 2.53 3.53 4.53
Risk Free Rate of Interest (%) 7.57% 7.61% 7.65%
v Had the compensation cost for the stock options granted under ESOS
2008 been determined on fair value approach, the Company’s net
proft and earning per share would have been as per pro forma
amounts indicated below:
Particulars
Year
ended
March
31, 2013
Year
ended
March 31,
2012
Proft before Extra Ordinary Item available to
equity shareholders
248.41 244.69
Less : Amortization of Compensation Cost
(pro forma)
0.23 0.43
Proft before Extra Ordinary Item available to
equity shareholders
248.18 244.26
Add : Extra Ordinary Item - 191.18
Proft after Extra Ordinary Item and amorti-
zation of Compensation Cost (pro forma)
248.18 435.44
Earning Per Share - Basic and Diluted
Proft before Extra Ordinary Item
- as reported 9.63 9.48
- pro forma 9.62 9.47
Proft after Extra Ordinary Item
- as reported 9.63 16.90
- pro forma 9.62 16.88
33 Segment Reporting
(A) Primary Segment (Business Segment) ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Segment Revenue
a) Textiles 3713.35 3422.63
b) Brands and Retail 1404.07 1323.51
c) Others 240.32 224.11
d) Unallocable - -
Total Sales 5357.74 4970.25
Less :Inter Segment Revenue 65.22 45.13
Net Sales 5292.52 4925.12
Segment Results
Segment Results before Interest & Finance Cost
a) Textiles 521.52 527.72
b) Brands and Retail 25.71 41.93
c) Others 22.58 18.44
d) Unallocable (6.14) (28.74)
Total Segment Results 563.67 559.35
Less : Interest & Finance Cost 315.34 309.10
Proft from Ordinary
Activities
248.33 250.25
Extra Ordinary Items (Net) - 245.04
Proft before Tax 248.33 495.29
Other Information
Segment Assets
a) Textiles 3652.29 3267.37
b) Brands and Retail 1195.04 943.23
c) Others 457.31 310.72
d) Unallocable 928.75 883.84
Total Assets 6233.39 5405.16
Segment Liabilities
a) Textiles 643.69 686.02
b) Brands and Retail 451.31 360.44
c) Others 240.07 76.56
d) Unallocable 172.76 117.13
Total Liabilities 1507.83 1240.15
Segment Depreciation/Impairment
a) Textiles 143.36 120.14
b) Brands and Retail 49.13 31.87
c) Others 5.58 3.24
d) Unallocable 6.23 6.14
Total Depreciation/Impairment 204.30 161.39
Capital Expenditure
a) Textiles 294.32 338.43
b) Brands and Retail 86.24 83.84
c) Others 23.85 6.51
d) Unallocable 0.61 13.40
Total Capital Expenditure 405.02 442.18
Non cash expenses other than Depreciation
a) Textiles 1.04 3.37
b) Brands and Retail 0.20 1.87
c) Others 1.58 0.69
d) Unallocable 0.12 14.53
Total Non cash expenses
other than Depreciation
2.94 20.46
78
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to Consolidated Financial Statements
34 Related Party Disclosures
As per the Accounting Standard on “Related Party Disclosures” (AS 18) notifed by Companies (Accounting Standards) Rules, 2006, the related
parties of the Company are as follows :
a Name of Related Parties and Nature of Relationship :
Shri Sanjay S. Lalbhai, Chairman and Managing Director Key Management Personnel
Shri Jayesh K. Shah, Director & Chief Financial Ofcer Key Management Personnel
Shri Punit S. Lalbhai Key Management Personnel
Shri Kulin S. Lalbhai Key Management Personnel
Shri Darshil J. Shah, Son of Director & Chief Financial Ofcer Relative of Key Management Personnel
Aura Securities Private Limited Company under the control of Key Managerial Personnel
Amplus Capital Advisors Private Limited Company under the control of Key Managerial Personnel
Note: Related party relationship is as identifed by the Company and relied upon by the Auditors.
b Transactions and Balances : ` in Crores
Nature of Transactions
Key Management Personnel
and relatives
Company under the control
of Key Managerial Personnel
Year ended Year ended
March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012
Transactions
Sales of Goods and Materials 7.00 9.65
Remuneration 8.98 5.40
Other Income 0.02 -
Interest Expense 1.22 1.49
Loan Received/(Repaid) (Net) (13.96) 17.06
Balances as at year end
Trade and other payable 2.75 3.65
Payable in respect of loans 0.26 25.69
c Disclosure in respect of Related Party Transactions : ` in Crores
Nature of Transactions
Year ended
March 31, 2013 March 31, 2012
Sales of Goods and Materials
Aura Securities Private Limited 7.00 9.65
Remuneration
Shri Sanjay S. Lalbhai, Chairman and Managing Director 4.70 2.90
Shri Jayesh K. Shah, Director & Chief Financial Ofcer 3.03 2.24
Shri Punit S. Lalbhai 0.57 0.24
Shri Kulin S. Lalbhai 0.58 0.00
Shri Darshil J. Shah, Son of Director & Chief Financial Ofcer 0.10 0.02
Other Income
Amplus Capital Advisors Private Limited 0.02 -
Interest Expense
Aura Securities Private Limited 1.22 1.49
Loan Received/(Repaid) (Net)
Aura Securities Private Limited (13.96) 17.06
Trade and other payable
Aura Securities Private Limited 2.75 3.65
Payable in respect of Loans
Aura Securities Private Limited 0.26 25.69
(B) Secondary Segment (Geographical by Customers)
` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Segment Revenue
a) In India 3820.22 3404.46
b) Outside India 1472.30 1520.66
Total Sales 5292.52 4925.12
Carrying Cost of Assets by location of Assets
a) In India 6120.05 5259.29
b) Outside India 113.34 145.87
Total 6233.39 5405.16
Addition to Assets
a) In India 402.54 442.18
b) Outside India 2.48 -
Total 405.02 442.18
Notes:
1. The Company has considered business segment as the primary
reporting segment. Segments have been identifed taking into
account the nature of the products and services, diferential
risks and returns, the Organizational structure and internal
reporting system. Consequently, the geographical segment
has been considered as a secondary segment.
2. The business sgement comprise of the following:
Textiles : Fabric, Yarn and Garments
Brands and Retail : Branded Garments and Apparels
Others : EPABX Systems (Electronics), Construction and
Project Activity
3. Geographical segment is considered based on sales within
India and outside India.
4. Intersegment Revenues are recognised at sales price.
79
Notes to Consolidated Financial Statements
35 Lease Rent
Operating Lease:
(A) Land is taken on lease period of 30 years with no option of renewal, no sub
lease of the land and having an escalation clause for increase in lease
rental by 5% after block of every 2 years.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
4.12 4.22
Not later than one year 0.11 0.10
Later than one year and not later than fve years 0.44 0.43
Later than fve years 3.57 3.69
Lease Payment recognised in Statement of
Proft and Loss
0.11 0.11
(B) Factory Building is taken on lease period of 18 to 20 years with no option of
renewal, no sub lease of the building and having an escalation clause for
increase in lease rental by 15% after every 3 years
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
89.44 72.51
Not later than one year 9.76 7.18
Later than one year and not later than fve years 36.70 23.54
Later than fve years 42.98 41.79
Lease Payment recognised in Statement of
Proft and Loss
8.94 7.50
(C) Plant & Machineries are taken on operating lease for a period of 5 to 8
years with the option of renewal
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
135.68 183.91
Not later than one year 30.53 35.40
Later than one year and not later than fve years 93.64 111.39
Later than fve years 11.51 37.12
Lease Payment recognised in Statement of
Proft and Loss
37.00 37.55
(D) Rent expense includes lease rental payments towards ofce premises,
showrooms and other facilities. Such leases are generally for a period of
11 to 108 months with the option of renewal against increased rent.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments obligation on
non-cancellable operating leases:
128.05 100.20
Not later than one year 40.47 38.05
Later than one year and not later than fve years 62.01 53.09
Later than fve years 25.57 9.06
Lease Payment recognised in Statement of
Proft and Loss
112.97 78.28
(E) Rent Income includes Lease Rental received towards Plant & Machineries.
Such operating lease is generally for a period of 5 years with the option of
renewal on mutual consent and premature termination of agreement
through agreed notice period.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments under
non-cancellable operating leases:
15.71 -
Not later than one year 1.36 -
Later than one year and not later than fve years 5.42 -
Later than fve years 8.93 -
Lease income recognised in Statement of
Proft and Loss
0.57 0.11
(F) Rent Income also includes Lease Rental received towards Building. Such
operating lease is generally for a period upto 36 months.
The particulars of these leases are as follows: ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Future Minimum lease payments under
non-cancellable operating leases:
0.29 0.30
Not later than one year 0.14 0.12
Later than one year and not later than fve years 0.15 0.18
Later than fve years - -
Lease income recognised in Statement of
Proft and Loss
0.51 0.43
36 Impairment of Fixed Assets
In accordance with the Accounting Standard (AS -28) on ‘Impairment of
Assets’ notifed by Companies (Accounting Standards) Rules, 2006, the
Company has reassessed its fxed assets and is of the view that no further
impairment/reversal is considered to be necessary in view of its expected
realisable value.
37 Early adoption of AS 30, Financial Instruments :Recognition and
Measurement
(a) Consequent to the Announcement of the Institute of Chartered
Accountants of India (ICAI), the Company had chosen to early adopt
‘Accounting Standard – 30, Financial Instruments: Recognition and
Measurement’ in its entirety, read with the clarifcation issued on
application of AS -30. Accordingly, the Company has changed the
designation and measurement of all its signifcant fnancial assets and
liabilities. All the fnancial assets and fnancial liabilities and derivatives
have been remeasured at their respective fair values or at amortized
cost as against cost except for those items whose accounting
treatment is covered by the existing standards notifed by Companies
(Accounting Standards) Rules, 2006.
(b) As a result, as on Balance Sheet date, Long Term Borrowings are lower
by ` 4.20 Crores, (Previous year higher by ` 1 Crores) and Hedge
Reserve account is debited by ` 23.64 Crores (Previous year ` 98.25
Crores) on account of fair valuation of outstanding derivatives.
38 Foreign Exchange Diferences
As per the notifcation issued by the Ministry of Corporate Afairs dated
31st March, 2009 as amended from time to time, the Company had already
exercised the option for accounting of exchange rate diferences with
efect from April 1, 2007.
Consequent to the adoption of that option:
(a) Exchange rate diferences of long-term foreign currency loans which
are related to acquisition of depreciable fxed assets have been
added to or deducted from the cost of the assets and depreciated
over the balance life of the assets and;
(b) Exchange rate diferences on other long-term foreign currency
loans have been transferred to ‘Foreign Currency Monetary Item
Translation Diference Account’ to be amortized over the balance
period of loans or up to 31st March, 2020 whichever is earlier.
As a result:
(a) An amount of ` 3.75 Crores being the exchange rate loss for the year
(Previous year ` 0.30 Crores) has been adjusted against the fxed assets.
(b) An amount of ` 4.90 Crores being the exchange rate loss for the year
(Previous year ` 4.19 Crores) remains to be amortized as at the balance
sheet date.
80
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Notes to Consolidated Financial Statements
39 Disclosure in respect of Derivative Instruments and Unhedged Foreign Currency Transactions
a Category-wise Quantitative data about derivative instruments outstanding:
Particulars Currency
As at 31st March, 2013 As at 31st March, 2012
In Mn Avg. Ex.
Rate
` in Crores In Mn Avg. Ex.
Rate
` in Crores
Forward Sales USD 60.71 52.3898 318.06 206.87 49.1051 1,015.84
EUR 0.81 72.7398 5.88 1.25 70.3030 8.78
Forward Purchase USD 10.08 55.4186 55.86 34.03 51.1847 174.21
JPY 193.98 0.6141 11.91 - - -
Interest Swap USD 10.00 56.7325 56.73 - - -
Option Deals USD - - - 66.00 50.6136 334.05
b Unhedged Foreign Currency Transactions:
Particulars Currency
As at 31st March, 2013 As at 31st March, 2012
In Mn ` in Crores In Mn ` in Crores
Payable towards royalty USD 1.45 7.89 1.03 6.05
SEK 0.29 0.24 0.36 0.32
EUR 0.02 0.12 - -
Payable for purchase of goods USD 17.17 90.87 0.59 3.01
GBP 0.25 2.09 - -
EUR 0.39 2.73 0.16 1.10
Receivable on sale of goods USD 0.83 4.51 0.84 4.28
Payable towards Foreign Currency Loans USD 3.65 19.80 1.05 5.33
GBP 0.09 0.72 - -
40 Disclosure in respect of Construction/Job work Contracts ` in Crores
Particulars
Year ended
March 31,
2013
Year ended
March 31,
2012
Amount of Contract Revenue recognized 29.89 41.33
Disclosure in respect of contracts in progress at the reporting date
Contract cost incurred and recognised profts less recognised losses up to the reporting date 29.89 41.33
Advance received from customers 6.03 19.50
Due from customers 1.61 5.97
Due to customers - 0.08
41 Capital Reserve on Consolidation
Capital Reserve on Consolidation includes the losses in the value of the investments in subsidiary companies provided by the Arvind Limited
(Holding Company) in accordance with the scheme of arrangement sanctioned in earlier years.
42 Figures less than ` 50,000/- which are required to be shown seperately, have been shown as actual in brackets.
43 Previous year fgures have been regrouped or recast wherever necessary to make them comparable with those of the current year.
As per our report of even date attached
For Sorab S. Engineer & Co.
Firm Registration No. 110417W
Chartered Accountants SANJAY S. LALBHAI Chairman & Managing Director
CA. N. D. Anklesaria
Partner JAYESH K. SHAH Director & Chief Financial Ofcer
Membership No.10250
Ahmedabad R. V. BHIMANI Company Secretary
May 16, 2013
81
NOTE UNDER SUB-SECTION (1) OF SECTION 212
The Ministry of Corporate Afairs has, vide its General Circular No. 2/2011 (No:5/12/2007-CL-III) dated 8th February,2011,granted a general exemption to
the Companies under Section 212(8) of Companies Act,1956, relating to the statements to be attached in respect of the subsidiary companies,with the
fnancial statements of the Companies. As required, the information in aggregate for each of the subsidiary Company is furnished as under.
Shareholders interested in obtaining the statements of Company’s interest in the subsidiaries or stand-alone fnancial statements of the subsidiaries
may obtain it by writing it to the Company.
The information in aggregate for each subsidiary including subsidiaries of subsidiaries in terms of direction
u/s 212 (8) of the Companies Act,1956 :
` in crores
Sr.
no.
Name of Subsidiary Capital Reserves
Total
Assets
Total
Liabilities
Details of
Investment
Turnover
Proft/
(Loss)
before
Taxation
Provision
for
Taxation
Proft/
(Loss)
after
Taxation
Proposed
Dividend
(a) (b) (c) (d) (e) (f) (g) (h) (I) (j)
1 Asman Investments Limited 0.08 (20.98) 4.39 25.29 [1] 7.20 0.89 0.30 0.59 Nil
2 The Anup Engineering Limited 3.40 33.83 66.39 29.16 [2] 73.45 7.00 2.06 4.94 Nil
3 Arvind Lifestyle Brands Limited 27.34 221.61 1089.74 840.79 [3] 1285.47 (19.22) (6.13) (13.09) Nil
4 Arvind Accel Limited 0.05 (12.74) 18.42 31.11 [2] 4.85 (7.85) (0.04) (7.81) Nil
5 Syntel Telecom Limited 0.05 (1.41) 0.31 1.67 [2] 0.02 (0.03) 0.00 (0.03) Nil
6 Arvind Infrastructure Limited 1.05 15.03 165.81 149.73 [4] 18.78 3.21 (0.03) 3.24 Nil
7 Arvind Brands and Retail Limited 10.45 239.79 285.69 35.45 [2] 0.00 0.19 0.00 0.19 Nil
8 Arvind PD Composites Private Limited 0.12 8.61 25.04 16.31 [2] 2.67 (1.57) 0.00 (1.57) Nil
9 Arvind Envisol Pvt. Ltd. 0.01 0.96 7.25 6.28 [2] 17.20 1.43 0.46 0.97 Nil
10 Arvind Goodhill Suit Manufacturing
Private Limited
0.02 (0.06) 2.34 2.38 [2] 0.00 (0.07) 0.00 (0.07) Nil
11 Arvind Spinning Park Pvt. Ltd. 0.01 0.00 0.01 0.00 [2] 0.00 0.00 0.00 -0.00 Nil
12 Arvind Processing Park Pvt. Ltd. 0.01 0.00 0.01 0.00 [2] 0.00 0.00 0.00 -0.00 Nil
13 Arvind OG Nonwovens Pvt. Limited 0.01 (0.20) 0.01 0.20 [2] 0.00 (0.20) 0.00 (0.20) Nil
14 Arvind Hebbal Homes Private Limited 0.01 0.39 39.92 39.52 [2] 0.00 0.01 0.00 0.01 Nil
15 Arvind Worldwide Inc. USA 2.19 0.51 4.70 2.00 [2] 8.60 0.36 0.01 0.35 Nil
16 Arvind Worldwide (M) Inc. Mauritius 23.87 (28.29) 1.66 6.08 [2] 0.00 (0.04) 0.00 (0.04) Nil
17 Arvind Overseas (M) Limited, Mauritius 42.35 (42.17) 0.30 0.12 [2] 0.00 0.00 0.00 0.00 Nil
18 Arvind Spinning Limited, Mauritius 14.63 (14.53) 0.10 0.00 [2] 0.00 0.00 0.00 0.00 Nil
19 Arvind Textile Mills Limited, Bangladesh 0.20 (5.65) 2.50 7.95 [2] 0.00 (1.67) 0.00 (1.67) Nil
20 Arvind Niloy Exports Pvt. Ltd.,
Bangladesh
0.25 (0.13) 0.28 0.16 [2] 0.00 (0.19) 0.00 (0.19) Nil
` in crores
[1] Not applicable being Investment Subsidiary
[2] These Companies have no Investments.
[3] Investment in Govt. Securities 0.02
[4] Investment in Partnership Firm 26.00
82
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
Location & Sites
Lifestyle Fabrics – Denim
Arvind Limited
Naroda Road
Ahmedabad – 380 025
Gujarat, India
Tel : +91-79-30138000 / 30138181
Fax : +91-79-30138671
E-mail : [email protected]
Lifestyle Fabrics – Voiles
Ankur Textiles
Outside Raipur Gate,
Ahmedabad – 380 022
Gujarat, India
Tel : +91-79-30137200 / 30137231
Fax : +91-79-30137350
E-mail : [email protected]
Lifestyle Fabrics – Shirting, Khakis and
Knitwear
Arvind Limited
PO Khatrej, Taluka Kalol
Dist. Gandhinagar – 382 721
Gujarat, India
Tel : +91-2764-395000
Fax : +91-2764-395040
E-mail : [email protected]
Lifestyle Apparel – Knits
Arvind Limited
PO Khatrej, Taluka Kalol
Dist. Gandhinagar – 382 721
Gujarat, India
Tel : +91-2764-395410
E-mail : [email protected]
Lifestyle Apparel – Jeans
Arvind Limited
#26/2 ,27/2, Kenchenahalli
Mysore Road
Near Bangalore University
Bangalore – 560 059
Tel : +91-80-33719000
E-mail : [email protected]
Lifestyle Apparel – Shirts
Arvind Limited
No.23/1, Sonnenahalli Village
Sitarampalya Cross
ITPL Road, Brookfeld, Mahadevpura Post
Bangalore - 560048, Karnataka, India
Tel : +91-80-33717000
E-mail : [email protected]
Subsidiaries & Joint Ventures
Arvind Lifestyle Brands Limited
8th Floor, Du Park Trinity
17, M. G. Road, Bangalore - 560 001
Tel : +91-80-41550650
Fax : +91-80-41550651
E-mail : [email protected]
Arvind Goodhill Suit Manufacturing Private
Limited
Plot No.50 B1 & 50 C1, Survey No. 299,
Bommasandra Industrial Area,
Bangalore - 560099
E-mail : [email protected]
The Anup Engineering Limited
Behind 66KV Electric Sub Station
Odhav Road, Ahmedabad-382415
Gujarat, India
Tel : +91-79-22870622-23
Fax : +91-79-22870642
E-mail : [email protected]
Arvind Infrastructure Limited
24, Govt. Servant’s Society
Adj. Municipal Market
C. G. Road, Ahmedabad-380 009
Tel : +91-79-30137000
Fax:+91-79-30137021
E-mail : [email protected]
Arvind PD Composites Pvt. Limited
Village: Moti Bhoyan Ta: Kalol
Dist: Gandhinagar, Gujarat –382721
Tel :02764 396223-02764 395000
Fax: 02764-395043
E-mail : [email protected]
Arvind Envisol Private Limited
Arvind Mill Premises, Naroda Road,
Ahmedabad – 380 025
Tel: 079-3013456 / 8454
Fax: 079-30138677
E-mail : [email protected]
Arvind and Smart Value Homes LLP
1008-1009 Venus Atlantis,
Opp. Safal Pegasus,
100 ft. Ring Road, Prahladnagar,
Ahmedabad - 380015
Tel : +91-79-30137000
Fax:+91-79-30137021
E-mail : corporateinfo@smartvaluehomes.
in
Tommy Hillfger Arvind Fashion
Private Limited
4, Brunton First Cross Road
Bangalore - 560 025
Tel : +91-80-49363100
Fax : +91-80-41124092
Arya Omnitalk Wireless Solutions Private
Limited
3rd Floor, Ling Field Plaza
S.No.66/67, Salunke Vihar Road,
Wanowrie, Pune – 411 040
Tel : +91-20-26851072, 40118100
Fax : +91-20-26851077
E-mail:[email protected]
Overseas Ofces
Arvind Worldwide Inc.
130, West, 42nd Street,
Suite 603, 6th Floor,
New York, NY 10036, USA
Tel +(212)768-4815X104
E-mail : [email protected]
Arvind Limited
Plot No.221
Bir Uttam Mir Shawkat Road
(Gulshan – Tejgaon Link Road)
Tejgaon I/A, Dhaka – 1208
Bangladesh
Tel : +880-2-9887123 / 124
E-mail : [email protected]
Arvind Limited
Unit 1705, 17th Floor, Trendy Centre
682-684 Castle Peak Road
Cheung Sha Wan
Kowloon, Hongkong
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83
FORM OF PROXY
ARVIND LIMITED
NARODA ROAD, AHMEDABAD - 380 025
I/We of
in the District of
being a member / members of the above named Company hereby appoint of
in the District of or failing him
of in the District of
or failing him of
in the District of as my / our
proxy to vote for me / us on my / our behalf at the Annual General Meeting of the Company to be held on Monday, the 29
th
July, 2013 and
at any adjournment thereof.
Signed this day of 2013
Signature
L.F.No.
* Depository : NSDL/CDSL
* DP.ID:
* Client ID :
* For Shares held in Electronic Form
No. of Share(s) held
Notes :
(1) A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself.
(2) A proxy need not be a member.
(3) The completed form should be deposited at the Registered Ofce of the Company, Naroda Road, Ahmedabad – 380 025 not less than
48 hours before the time for holding the meeting.
ARVIND LIMITED
Naroda Road, Ahmedabad – 380 025.
ATTENDANCE SLIP
I hereby record my presence at the Annual General Meeting held at Thakorebhai Desai Hall, Near Law Garden, Ellisbridge,
Ahmedabad – 380 006 on Monday, the 29
th
July, 2013 at 9.30 a. m.
1. L.F.NO.
2. * DePOSITORy : NSDL/CDSL
3. * D.P.ID
4. * CLIENT ID
* FOR SHARES HELD IN ELECTRONIC FORM
5. FULL NAMe OF THe SHAReHOLDeR :
(IN BLOCK LETTERS)
6. NO. OF eQUITy SHAReS HeLD :
7. SIGNATURE OF THE SHAREHOLDER
OR PROXy ATTeNDING :
(PLEASE GIVE FULL NAME OF THE 1ST JOINT HOLDER)
MR./MRS./MISS
(TO BE USED ONLY WHEN FIRST NAMED SHAREHOLDER IS NOT ATTENDING)
NOTe : PLeASe FILL IN THIS ATTeNDANCe SLIP AND HAND IT OVER AT THE ENTRANCE OF THE HALL.
AFFIX
15 Paise
REVENUE
STAMP
84
A R V I N D L I M I T E D 82
nd
ANNUAL REPORT 2012-13
doc_910850463.pdf