To the Members,
The Directors are pleased to present the Annual Report along with the
Audited Financial Statements for the period from 1st April, 2011 to
31st March, 2012.
1. FINANCIAL RESULTS
Highlights of Financial Results for the year are as under:
Rs. in Crores
Turnover & Operating Income 3494.12 2683.26
Profit before Finance Costs, 637.05 438.19
Depreciation and Amortisation
Expenses, Extraordinary Items & Tax
Less : Finance costs 270.25 187.23
Profit before Depreciation and 366.80 250.96
Amortisation Expenses, Extraordinary
Items & Tax Expenses
Less : Depreciation and Amortisation 130.51 116.16
Profit before Extraordinary Items and 236.29 134.80
Add : Extraordinary Items 251.80 0.00
Profit Before Tax 488.09 134.80
Less : Current Tax 85.15 26.84
Add: MAT Credit Entitlement (31.29) (26.84)
Profit for the year 434.23 134.80
Balance of Profit brought forward 450.12 314.42
Add : Profit of Amalgamated Company 1.62 0.00
Less: Amount transferred to Statement of 56.31 0.00
Profit and Loss on account of Amalgamation
Add: Transfer from Debenture Redemption 0.00 0.90
Balance available for appropriation 829.66 450.12
Less : Appropriation :
Proposed Dividend on Equity Shares 25.80 0.00
Tax on Dividend 4.19 0.00
Closing Balance 799.67 450.12
The Financial year 2011-12 was extremely challenging year for our
company. The year was characterized by global slowdown, weak retail
demand at home, high volatility in cotton prices and foreign exchange
and higher interest cost. It is satisfying to note that in the backdrop
of such a challenging environment, our Company has closed the financial
year 2011-12 with 30% growth in sales and 28% growth in Operating
Earnings before Interest Depreciation and Taxes (Operating EBITDA). PAT
(excluding Exceptional Income) has shown a growth of 75% compared to
the previous year.
A detailed analysis of the financial results is given in the Management
Discussions and Analysis report which forms part of this report.
Your Directors are pleased to recommend a dividend of Rs. 1 per equity
share of Rs.10 each.
During the year, the Company has repaid the installments of Term Loans
amounting to Rs. 401 crores falling due during the current year. The
Company has also made fresh borrowings of Rs. 223 Crores for funding
capital expenditure and other requirements. Long Term Debt including
lease of the Company stands to Rs. 829 crores as on 31st March, 2012.
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 Rs.14.65 per option and
Rs.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.
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.
In view of the closure of business, the accounts of Arvind Overseas
(Mauritius) Limited and Arvind Spinning Limited have not been prepared
on the going on concern basis. Arvind Textile Mills Limited has not
commenced its business. Hence, the accounts of these subsidiary
companies have not been consolidated with accounts of the company as
per the provisions of the Accounting Standard 21 relating to
consolidation of accounts.
Export-Import Bank of India has nominated Mr. Prabhakar Dalal as its
Nominee Director on the Board of the Company in place of Mr. R. W.
Khanna with effect from 29th April, 2011. The Board places on record its
deep sense of appreciation for the valuable services rendered by Mr. R.
W. Khanna during his tenure as Director.
At the ensuing Annual General Meeting, Mr. Jayesh Shah and Mr. Munesh
Khanna, Directors of the Company, retire by rotation, but being
eligible, offer themselves for re-appointment.
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 certified 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 affairs of the Company at the end of the financial year ended on 31st
March, 2012 and of the profit of the Company for that period;
3. proper and sufficient 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 31st March, 2012
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 31st March, 2012.
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 Office
of the Company or write to the Secretary for a copy.
The Auditors, Sorab S. Engineer & Co., retire and offer 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 fix their remuneration.
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 and vendors and buyers
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 : 9th May, 2012 SANJAY S. LALBHAI
Place: Ahmedabad. CHAIRMAN & MANAGING DIRECTOR