To
The Members,
Arvind Fashions Limited.
Your Directors are pleased to present the Directors' Report of the
Company together with the audited financial statements of the Company for the financial
year ended March 31,2024.
1. FINANCIAL HIGHLIGHTS
The Company's financial performances for the year under review along
with previous year's figures are given hereunder:
| Particulars |
Standalone |
Consolidated* |
|
2023-2024 |
2022-2023 |
2023-2024 |
2022-2023 |
| Revenue from operations (Net) |
609.09 |
740.57 |
4,259.12 |
4,069.49 |
| Profit/(Loss) Before Interest, Depreciation, Tax &
Exceptional Items |
74.87 |
40.18 |
544.27 |
473.35 |
| Less: Finance Cost |
19.50 |
15.52 |
144.18 |
120.97 |
| Profit/(Loss) Before Depreciation, Tax & Exceptional
Items |
55.37 |
24.66 |
400.09 |
352.38 |
| Less: Depreciation/Amortization |
12.76 |
14.56 |
230.08 |
203.07 |
| Profit/(Loss) before exceptional items & tax |
42.61 |
10.10 |
170.01 |
149.31 |
| Less: Exceptional items |
51.46 |
- |
6.17 |
- |
| Profit/(Loss) before tax |
(8.85) |
10.10 |
163.84 |
149.31 |
| Less: Current tax/Deferred tax |
2.49 |
0.24 |
57.25 |
40.06 |
| Profit/(Loss) after Tax from Continuing Operations |
(11.34) |
9.86 |
106.59 |
109.25 |
| Profit/(Loss) Before Tax for the period from Discontinuing
Operations |
- |
- |
30.73 |
(22.24) |
| Tax Expense/(Credit) on Discontinuing Operations |
- |
- |
0.21 |
0.05 |
| Profit/(Loss) after Tax from Discontinuing Operations |
- |
- |
30.52 |
(22.29) |
| Net Profit/(Loss) for the period from Continuing
Operations and Discontinuing Operations |
(11.34) |
9.86 |
137.11 |
86.96 |
| Add: Other Comprehensive Income |
(0.17) |
(0.44) |
(2.37) |
(0.76) |
| Profit/(Loss) after Tax and OCI |
(11.51) |
9.42 |
134.74 |
86.20 |
| Profit /(Loss) after tax carried over to Balance Sheet |
(11.51) |
9.42 |
134.74 |
86.20 |
2. PERFORMANCE REVIEW:
Despite muted market conditions, our Company has continued its journey
of profitable growth, reaffirming the strength of our brands and the effectiveness of our
business strategy. We remain focused on expanding the retail footprint across brands and
entering Tier II and III cities in India, where significant potential remains untapped,
while also accelerating growth in the online direct-to-consumer channel. Across our
brands, premiumization is a core theme. Expansion into adjacent categories such as women's
wear, kids' wear, innerwear, footwear, and accessories also provides multiple growth
levers for our brands.
FY 2024 has been a differentiated year for AFL and our sharper focus
and execution across channels, combined with product innovation and tighter control over
costs, continued to yield positive results.
Our revenue stood at Rs 4,259 Crores, reflecting a year-
on-year increase of ~5%. The share of retail channel grew by nearly 3%, with growth in the
early teens, while our online B2B channel saw a sharp decline as we strategically
de-stocked to ensure a healthy and controlled consumer experience, emphasizing tighter
control on discounting.
Even as we continued to make substantial investments in marketing to
keep our brands salient, our EBITDA reached '544 Crores, a 15% increase from the previous
year. This success is attributed to sourcing efficiency, high full-price sell-thru,
reduced discounting, and a favorable channel mix. EBITDA margins stood at 12.8%,
representing a 120 basis point improvement driven by higher gross margin and operational
cost efficiencies.
A significant achievement has been the robust improvement in our return
on capital employed, an increase of 400 basis points to over 16%. Over the past year, we
have implemented multiple strategic interventions and initiatives to enhance this metric.
We remain confident in our trajectory towards realizing even higher returns on capital
employed in the near term.
The Company continued to expand its retail footprint and accelerated
its store expansion strategy by opening 146 Exclusive Brand Outlets (EBOs), increasing our
total EBO count to 931 stores.
On Standalone basis
Revenue Growth - The Company showed a marginal decline in revenue
growth, with revenue from operations decreasing by 17.75% from Rs 740.57
Crores in FY 23 to Rs 609.09 Crores in FY 24.
Profit/(Loss) After Tax (PAT) - The Profit after tax showed a slight
decrease of 15.01 % from Rs 9.86 Crores in FY 23 to ' (11.34)
Crores in FY 24.
On Consolidated basis
Consolidated Performance - The Company's consolidated financial
performance across its operations also improved substantially. Consolidated revenue from
operations (Net) grew by 4.66% rising from Rs 4,069.49 Crores in FY 23 to Rs
4,259.12 Crores in FY 24.
Consolidated PAT - The consolidated profit after tax demonstrated
remarkable growth of 57.67% increasing from of Rs 86.96 Crores in FY 23 to
profit of Rs 137.11 Crores in FY 24.
3. MATERIAL EVENTS DURING THE YEAR UNDER REVIEW
Sale of Entire Equity stake in wholly owned subsidiary:
The Company had entered into a Share Purchase Agreement dated November
3, 2023 with Reliance Beauty & Personal Care Limited, a wholly owned subsidiary of
Reliance Retail Ventures Limited (the "Acquirer") to sell and transfer the
entire equity stake held by it in its wholly owned subsidiary "Arvind Beauty Brands
Retail Limited". The said wholly owned subsidiary of the Company was engaged in
marketing, distribution and retail of beauty products under the brand name
"Sephora" in India. Consequently, "Arvind Beauty Brands Retail
Limited" ceased to be the subsidiary of the Company.
4. DIVIDEND
Based on the Company's performance and in line with Dividend
Distribution Policy, the Board of Directors in its meeting held on May 21, 2024
recommended a final dividend at the rate of 31.25% on equity shares for the financial year
ended March 31, 2024. This will translate to Rs 1.25 per equity share of Rs
4 each. The dividend shall be subject to approval by the Members of the Company in
the ensuing Annual General Meeting.
Due to changes in the Income-tax Act, 1961, introduced by Finance Act,
2020, dividend distributed by the Company are now taxable in the hands of the
shareholders. The Company shall deduct applicable tax at source before paying out the
dividend.
The Register of Members and Share Transfer Books of the Company will
remain closed from August 10, 2024 to August 19, 2024 (both days inclusive) for the
purpose of payment of dividend for the financial year ended March 31, 2024.
The dividend, if declared by the members, would involve a cash outflow
of about Rs 16.65 Crores.
5. DIVIDEND DISTRIBUTION POLICY
In terms of the provisions of Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a
Dividend Distribution Policy and the same is available on the Company's Website at
https://www.arvindfashions.com/wp-content/uploads/2018/11 /
AFL-Dividend-Distribution-Policy.pdf.
6. BOARD MEETINGS HELD DURING THE YEAR
During the year under review, thirty-nine Board/ Committee meetings
were held including four Board meetings, five Audit Committee meetings, two Nomination and
Remuneration Committee meetings, two Stakeholders Relationship Committee meetings, two
Risk Management Committee meetings, one Corporate Social Responsibility Committee meeting,
one Independent Director meeting and twenty-two Committee of Directors meetings.
7. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors hereby make the following Responsibility Statement as
required by Section 134(3)(c) of the Companies Act, 2013:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures.
b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that 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 and of the profit and loss account of the company for that period.
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities.
d) The Directors have prepared the annual accounts on a going concern
basis.
e) They have laid down internal financial controls, which are adequate
and are operating effectively.
f) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
8. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE
REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR
REPORTS
There were no qualifications, reservations or adverse remarks made by
the Statutory Auditors or the Secretarial Auditor of the Company.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF
THE COMPANIES ACT, 2013
Details of loans, guarantees and investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the
financial statements.
10. RELATED PARTY TRANSACTIONS UNDER SECTION 188 OF THE COMPANIES ACT,
2013
All the related party transactions are entered on arm's length basis,
in the ordinary course of business and are in compliance with the applicable provisions of
the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. There are no materially significant related party transactions made by
the Company with Promoters, Directors or Key Managerial Personnels etc. which may have
potential conflict with the interest of the Company at large or which warrants the
approval of the shareholders. Accordingly, no transactions are being reported in Form
AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rules, 2014. However, the details of the transactions with Related Party are
provided in the Company's financial statements in accordance with the Accounting
Standards.
All Related Party Transactions are presented to the Audit Committee and
the Board. Omnibus approval is obtained for the transactions which are foreseen and
repetitive in nature. A statement of all related party transactions is presented before
the Audit Committee on a quarterly basis, specifying the nature, value and terms and
conditions of the transactions.
The Policy on Related Party Transactions as approved by the Board is
available on the Company's website at https://www.arvindfashions.com/wp-content/
uploads/2018/11/AFL-RPT-Policy.pdf
11. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return is
available on Company's website at https:// www.arvindfashions.com/corporate-governance/
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
OF THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31, 2024 AND MAY 21, 2024 (DATE OF THE
REPORT)
During March 31, 2024 and May 21, 2024 no material change and
commitments have taken place which may affect the financial position occurred in the
company.
13. INFORMATION ON CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
i) Conservation of Energy
The Company is making efforts to achieve energy efficiency and increase
the mix of renewable energy within the operations.
a) Energy Efficiency
The Company has a 'Combat Climate Change' as a
sustainability pillar, where the company has shifted from conventional lights to LED
lights in the stores and in the warehouses and the company has installed motion sensor LED
lights for energy management within its warehouse operations.
• Utilization of Solar Energy for Corporate office through PPA:
Our corporate office is utilizing 14lacs solar units every year through power purchase
agreement, leading to reduction of 1190 metric tonnes of GHG emissions through utilization
of renewable energy.
• Installation of IOTs in the warehouse: The Company has installed
IOTs in the warehouse lighting, where the lights will be turned off in no use condition,
leading to saving of 30% of electricity through consumption using motion sensors lights.
• Energy Efficiency: LED lights are proven to consume
significantly 50% less energy
than traditional tube lights, leading to immediate reductions in
electricity bills.
• Cost Savings: The longer lifespan and lower maintenance
requirements of LED lights result in reduced maintenance and replacement costs over time.
• Enhanced Lighting Quality: The switch to LED lighting has led to
improved lighting quality, offering better visibility and creating a more comfortable
environment for employees and visitors.
• Environmental Contribution: By reducing energy consumption and
minimizing the need for replacements, this project contributes to our sustainability goals
and reduces our carbon footprint.
The company has installed motion sensor LED lights for energy
management within its warehouse operations in FY 24 that indicated a reduction potential
of 5%-8% in the energy demand. The same is being evaluated and implemented for upcoming
new warehouses as well. Arvind Fashions state of the art warehouse facility at Hoskote,
Karnataka is currently undertaking the procedures of Green Building Certification that
further represents Arvind's commitment to contribute towards reducing Green House Gas
emission.
The company is also working on SOPs to achieve behavioural based energy
efficiency within the operations.
b) Renewable energy
We have signed an agreement with wheel solar power from an independent
power producer in FY 19 for a period of 9 years expected to cover 80-95% of the energy
demand at the corporate office. We have a potential of mitigating ~1,030 tons of carbon
dioxide on an annual basis.
Company is exploring the potential of shifting its warehouses to
renewable energy in the near future. The preliminary survey for the installation of
rooftop solar panels is conducted by the external agencies.
Company is also engaging with its vendor partners to enable their
transition to renewable energy thereby reducing the overall carbon footprint of its
products.
ii) Absorption of technology
The Company has not absorbed any technology.
iii) Foreign Exchange Earnings and Outgo
|
2023-24 |
2022 - 23 |
| Earning in Foreign Currency |
16.35 |
13.55 |
| Expenditure in Foreign Currency |
404.90 |
415.68 |
14. CREDIT RATING
Your Company is rated by CARE Ratings Limited on its various long term
and short term bank facilities availed from the banks.
On January 5, 2024 CARE Ratings Limited has upgraded and revised the
rating from CARE A-, Positive / CARE A2+ to CARE A, Stable / CARE A1.
15. NOMINATION & REMUNERATION POLICY OF THE COMPANY
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy for selection and appointment of Directors, Key Managerial
Personnel and Senior Management and their remuneration. The Remuneration Policy is
available on the Company's website at https://www.
arvindfashions.com/wp-content/uploads/2019/05/ Nomination-and-Remuneration-Policy.pdf
The policy includes, inter-alia, the criteria for
the appointment and remuneration of Directors, KMPs, Senior Management Personnel and other
employees of the Company.
16. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK
MANAGEMENT POLICY OF THE COMPANY
The Board has, framed a policy to identify, assess, monitor and
mitigate various identified risks associated with the key business objectives. Major risks
identified by the businesses and functions are systematically addressed through mitigating
actions on a continuing basis. The Risk Management Policy is available on the Company's
website at https://www. arvindfashions.com/wp-content/uploads/2019/03/
Risk-Management-Policy.pdf
The Board of Directors has formed a Risk Management Committee to
oversee the risk management plan. As on March 31, 2024, the Committee comprises of the
following Directors:
• Mr. Suresh Jayaraman, Chairperson
• Mr. Shailesh Chaturvedi,
• Mr. Nagesh Pinge,
• Mr. Nilesh Shah,
• Ms. Ananya Tripathi and
• Ms. Nithya Easwaran, Members
In the opinion of the Board, there are no risks that poses a threat to
the existence of the Company.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company's average net profits for the past three financial years
are negative, hence, the Company was not required to undertake any CSR programs / projects
for the financial year 2023-24. Your Company has a Corporate Social Responsibility Policy
which is uploaded on the website of the Company at
https://www.arvindfashions.com/wp-content/ uploads/2018/11/AFL-CSR-Policy.pdf
The Annual Report on CSR Activities for the year under review as
required under Sections 134 and 135 of the Companies Act, 2013 read with Rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies
(Accounts) Rules, 2014 in prescribed format is enclosed as an Annexure-A.
18. BOARD EVALUATION
Pursuant to the provisions of Section 134(3) (p) of the Companies Act,
2013 read with the rules framed thereunder and Regulation 17(10) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the
annual performance evaluation of its own performance and that of its Committees and
individual Directors. The manner in which the evaluation has been carried out is explained
in the Corporate Governance Report which forms part of the Annual Report.
Further, to comply with Regulation 25(4) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, Independent Directors have
also evaluated the performance of Non-Independent Directors, Chairman and Board as a whole
at a separate meeting of Independent Directors, which was held on March 26, 2024.
19. CHANGE IN THE NATURE OF THE BUSINESS
There was no change in the nature of the business during the year under
review.
20. DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors consists of 12 (Twelve) members, comprising of 1
(one) Managing Director, 5 (five) Non-Executive Directors and 6 (six) NonExecutive
Independent Directors.
As per the provisions of Section 152(6) of the Companies Act, 2013 and
in terms of the Article of Association of the Company, Mr. Punit Sanjay Lalbhai (DIN:
05125502) and Mr. Kulin Sanjay Lalbhai (DIN: 05206878), shall retire by rotation at the
ensuing Annual General Meeting and being eligible, shall offer themselves for
re-appointment as the Directors of the Company.
During the year under review, the Board of Director's, on the
recommendation of the Nomination and Remuneration Committee, through circular resolution
passed on October 9, 2023, approved and recommended to the shareholders for their approval
of the appointment of Mr. Govind Shridhar Shrikhande (DIN: 00029419) as an Independent
Director of the Company, not liable to retire by rotation, to hold office for a period of
5 (five) consecutive years with effect from October 09, 2023. The Company received the
approval of the Members of the Company on December 20, 2023 through Postal Ballot for his
appointment as an Independent Director of the Company effective from October 09, 2023.
Mr. Vallabh Roopchand Bhanshali (DIN: 00184775) upon completion of his
tenure, ceased to be an Independent Director of the Company with effect from October 09,
2023.
Further, the re-appointment of Mr. Nagesh Dinkar Pinge (DIN: 00062900)
and Mr. Achal Anil Bakeri (DIN: 00397573) as Independent Directors, not liable to retire
by rotation, to hold office for another term of 5 (Five) consecutive years with effect
from October 10, 2023 were approved by the Shareholders of your Company in the Annual
General Meeting held on September 12, 2023.
The Independent Directors have submitted their declaration confirming
that each of them meets the criteria for independence as provided in Section 149(6) of the
Companies Act, 2013 and Regulation 16(1 )(b) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and are in compliance with Rule 6 of the
Companies (Appointment and Qualification of Directors) Rules, 2014. Further, in accordance
with Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Independent Directors have confirmed that are not aware of any
circumstance or situation, which exists or may be reasonably anticipated, that could
impair or impact their ability to discharge their duties as Independent Directors of the
Company. The Independent Directors have also confirmed that they have complied with the
Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013 and
the Company's Policy of the Code of Conduct for Directors and Senior Management Personnel.
The Board is of the opinion that the Independent Directors of the
Company possess requisite qualifications, experience and expertise and they hold highest
standards of integrity (including the proficiency) and fulfils the conditions specified in
the Companies Act, 2013 read with Rules made thereunder and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and are eligible & independent of the
management.
None of the Directors of the Company are disqualified as per the
provisions of Section 164 of the Companies Act, 2013. The Directors of the Company have
made necessary disclosures under Section 184 and other relevant provisions of the
Companies Act, 2013
During the year under review, there were no changes in the Key
Managerial Personnel of the Company. Therefore, as per the provisions of Section 203 of
the Companies Act, 2013, Mr. Shailesh Shyam Chaturvedi as Managing Director & CEO, Mr.
Girdhar Kumar Chitlangia as Chief Financial Officer and Ms. Lipi Jha as Company Secretary
are the Key Managerial Personnel of the Company.
21. DISCLOSURE UNDER SECTION 67(3)(C) OF THE COMPANIES ACT, 2013
No disclosure is required under section 67(3)(c) of the Companies Act,
2013 read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014, in
respect of the voting rights not exercised directly by the employees of the Company, as
the provisions of the said section are not applicable.
22. AUDITORS Statutory Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants (ICAI Firm
Registration No. 117365W) were appointed as the Statutory Auditors of your Company for a
period of 5 (five) consecutive years at the Annual General Meeting held on August 23,
2021. The Report given by the Auditors on the financial statements of the Company is part
of the Annual Report.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules 2014, your Company engaged the services of M/s. N. V. Kathiria & Associates,
Company Secretary in Practice, Ahmedabad to conduct the Secretarial Audit of the Company
for the financial year ended March 31,2024. The Secretarial Audit Report (in Form MR-3) of
the Company and its material Subsidiary Company is enclosed as an Annexure-B to
this Report. The report of Secretarial Auditor is selfexplanatory and does not contain any
qualification, reservation, adverse remarks or disclaimer.
23. REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditor and Secretarial
Auditor of your Company have not reported any instances of fraud committed in your Company
by its officers or employees, to the Audit Committee under Section 143(12) of the
Companies Act, 2013 and therefore, no detail is required to be disclosed under Section 134
(3) (ca) of the Companies Act, 2013.
24. COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has complied with all the
applicable provisions of Secretarial Standard-1 and Secretarial Standard-2 issued by the
Institute of Company Secretaries of India.
25. SUBSIDIARIES / CONTROLLED ENTITIES / ASSOCIATES
As on March 31, 2024, the Company has following 3 subsidiary companies
and 1 Controlled Entity Jointly Owned with PVH BV.
Subsidiaries
• Arvind Lifestyle Brands Limited
• Arvind Youth Brands Private Limited
• Value Fashion Retail Limited
Controlled Entity Jointly Owned with PVH BV
• PVH Arvind Fashions Private Limited
During the year under review, Arvind Beauty Brands Retail Limited
ceased to be the wholly owned subsidiary of the Company on account of sale and transfer of
the entire equity stake held by the Company in Arvind Beauty Brands Retail Limited to
Reliance Beauty & Personal Care Limited, effective from November 3, 2023.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013
read with the Companies (Accounts) Rules, 2014, a statement containing salient features of
Financial Statements of Subsidiaries and controlled entities in Form AOC-1 is
attached to the Financial Statements. The separate audited financial statements in respect
of each of the subsidiary shall be kept open for inspection at the Registered Office of
the Company. The Company will also make available these documents upon request by any
Member of the Company interested in obtaining the same. The separate audited financial
statements in respect of each of the subsidiary are also available on the website of the
Company at www.arvindfashions.com.
The Company has framed a policy for determining material subsidiaries,
which has been uploaded on the Company's website at https://www.arvindfashions.
com/wp-content/uploads/2018/11/AFL-Policy-on- Material-Subsidiaries.pdf
26. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in
accordance with relevant Indian Accounting Standards issued by the Institute of Chartered
Accountants of India and forms part of this Annual Report.
27. DEPOSITS
During the year under review, your Company has neither accepted nor
renewed any deposits within the meaning of provisions of Chapter V - Acceptance of
Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014.
28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant and material orders passed by the Regulators
or Courts or Tribunals which would impact the going concern status of the Company.
29. INTERNAL FINANCIAL CONTROLS
The Company has in place an adequate internal financial controls with
reference to the financial statements and dedicated Internal Auditor to ensure its
adequacy. The scope and authority of the Internal Auditor is well defined in the
organisation. To maintain its objectivity and independence, the Internal Auditor reports
to the Chairman of the Audit Committee of the Board. The Internal Auditor monitors and
evaluates the efficacy and adequacy of internal control systems in the Company, its
compliance with operating systems, accounting procedures and policies of the Company.
Based on the report of the Internal Auditor, process owners undertake corrective action in
their respective areas and thereby strengthen the controls. Significant audit observations
and corrective actions suggested are presented to the Audit Committee of the Board.
The Statutory Auditor of the Company has also given an opinion that the
Internal Financial Controls over Financial Reporting are adequate and are operating
effectively at the end of the financial year.
30. COMMITTEES OF THE BOARD
The Company has constituted various Committees of the Board as required
under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 including composition, number of meetings held, attendance
of members, etc. of such Committees, are set out to the Corporate Governance Report which
forms a part of this Annual Report. The intervening gap between the meetings was within
the period prescribed under the provisions of Section 173 of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the year under review, the Stakeholders Relationship Committee
("SRC") was reconstituted by way of addition of Mr. Govind Shrikhande as Member
of the SRC.
Composition of Audit Committee:
The Audit Committee consists of the following Members;
i) Mr. Nagesh Pinge - Independent Director
ii) Mr. Nilesh Shah - Independent Director
iii) Ms. Ananya Tripathi - Independent Director
iv) Ms. Nithya Easwaran - Non-Executive Director
All the recommendations of the Audit Committee made during the year has
been accepted by the Board.
31. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION
FUND
Pursuant to the applicable provisions of the Companies Act, 2013 read
with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016 ("IEPF Rules"), all unpaid or unclaimed dividends are
required to be transferred by the Company to the Investor Education and Protection Fund
("IEPF" or "Fund") established by the Central Government, after
completion of 7 (seven) years from the date the dividend is transferred to
unpaid/unclaimed account. Further, according to the IEPF Rules, the shares in respect of
which dividend has not been paid or claimed by the shareholders for 7 (seven) consecutive
years or more shall also be transferred to the demat account of the IEPF Authority.
During the year, the Company is not obligated to transfer any unpaid or
unclaimed dividend amounts or shares for which the dividend has not been claimed or paid
for a continuous period of 7 (seven) years or more to the IEPF.
32. SHARE CAPITAL
As on March 31, 2024, the authorised capital of the Company stands at Rs
75,00,00,000 divided into 18,75,00,000 equity shares of Rs 4 each.
The paid-up equity share capital of the Company is Rs 53,18,39,084
consisting of 13,29,59,771 fully paid equity shares of Rs 4 each and Rs
49,378 consisting of 24,689 partly paid equity shares of Rs 2 each.
During the year under review, the Company has allotted 1,58,800 equity
shares under ESOP scheme of the company.
The Company has not issued any Equity Shares with differential rights
and Sweat Equity Shares during the year under review.
33. EMPLOYEE STOCK OPTION SCHEMES (ESOS)
The Company has instituted the Employees Stock Option Scheme (ESOS)
2016, 2018 and 2022 to grant equity-based incentives to certain eligible employees and
directors of the Company and its subsidiary companies, i.e. in compliance with the SEBI
(Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time
to time ("SEBI ESOP Regulations").
During the year under review, the Company has granted 1,99,000 stock
options to eligible employees under ESOS 2022. Disclosures in compliance with Section 62
of the Companies Act, 2013 and Rule 12 of Companies (Share Capital and Debentures) Rules,
2014 were complied at the time of grant. Disclosures with respect to stock options, as
required under Regulation 14 of the SEBI ESOP Regulations, are available on the Company's
website www. arvindfashions.com/overview and also set out in Annexure - C to this
report.
Certificate from the Secretarial Auditor of the Company, Mr. N. V.
Kathiria, has been obtained confirming that the implementation of Employee Stock Option
Scheme is in accordance with the SEBI ESOP Regulations and the resolutions has been
approved by the members regarding the Scheme.
34. VIGIL MECHANISM
Pursuant to the provisions of Section 177 of the Companies Act, 2013
and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has a vigil mechanism/Whistle Blower Policy to provide a
platform to the Directors and Employees of the Company to raise concerns with the
instances of unethical behaviour, actual or suspected fraud or violation of the Company's
Code of Conduct or ethics policy within the Company.
The details of the Whistle Blower Policy are explained in the Corporate
Governance Report and also posted on the website of the Company at https://www.
arvindfashions.com/wp-content/uploads/2019/04/ Whistleblower-Policy.pdf
35. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
I n compliance with the requirements of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Company has put in place a
familiarization programme for the Independent Directors to familiarize them with their
role, rights and responsibility as Directors, the working of the Company, nature of the
industry in which the Company operates, business model etc. The details of the
familiarization programme is explained in the Corporate Governance Report and is also
available on the Company's website at https://www.
arvindfashions.com/wp-content/uploads/2018/11/
AFL-Familiarisation-Programs-of-Independent- Directors.pdf
36. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION &
ANALYSIS REPORT
The Corporate Governance Report, together with the Certificate from the
auditors of the Company regarding compliance of conditions of Corporate Governance as
stipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 is included in the Annual Report.
A separate section on Management Discussion and Analysis Report (MDA)
is included in the Annual Report as required under Regulation 34(2)(e) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015
37. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Business Responsibility and Sustainability Report for the year
ended March 31, 2024 as stipulated under Regulation 34 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 is annexed which forms part of this Annual
Report.
38. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies
Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided
upon request.
Further, as per second proviso to Section 136(1) of the Companies Act,
2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Annual Report and Accounts are being sent to the members and
others entitled thereto, excluding the information on employees' particulars which is
available for inspection by the members at the Registered Office of the Company during
business hours on working days of the Company up to the date of the ensuing Annual General
Meeting. If any member is interested in obtaining a copy thereof, such member may write to
the Company Secretary in this regard at investor. relations@arvindfashions.com.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure - D to
this report.
39. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and
has adopted a policy against sexual harassment in line with the provisions of Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the
rules framed thereunder. The Company has also formed Internal Complaint Committee and the
Committee members are experts in handling the investigations and proceedings as defined in
the policy.
During the financial year 2023-24, no complaints were filed.
40. HUMAN RESOURCES
At Arvind Fashions, we believe that our people are our most important
asset. The Company employs over 6,445 individuals with an average age of 29 and a gender
diversity rate of 17%. This year, the Company focused on enhancing work quality and
business ease by building collaborative and progressive systems and processes.
Known for its quality work environment, autonomy, growth opportunities,
and support, the Company attracts top talent across the country. DEI (Diversity, Equity,
and Inclusion) initiatives are central to the Company's culture, promoting diverse
backgrounds, fair treatment, and a supportive environment for all.
Employee engagement is prioritized through initiatives like
"Arvind Voice" and exit surveys, fostering transparency and empowerment. Leaders
connect with employees via town halls and engagement programs to share achievements and
future plans. The Company recognizes outstanding performance with Retail, Value, and
Spotlight awards.
Arvind University, the Company's learning and development centre,
ensures continuous employee growth and skill enhancement, aligning programs with business
objectives to address skill gaps and stay agile in the evolving retail landscape.
Progressive policies like Flexi-time, Gender Neutral, Equal Employment
Opportunity, Paternity & Adoption, and Creche Services, along with professional
development and career mobility opportunities, foster an environment of empowerment and
engagement. Arvind Care, the Company's safety and wellness initiative, reflects a
commitment to employee health and happiness, offering free health check-ups,
Doctor-on-Call services, medical facilities, and a gym.
The Company remains dedicated to nurturing a workforce that thrives
both personally and professionally, driving the sustained success and growth of the
organization.
41. ACKNOWLEDGEMENT
The Directors wish to express their appreciation for the continued
support of bankers, financial institutions, customers, and various Government agencies.
The Directors also wish to thank all the employees for their contribution, support and
continued co-operation throughout the year.
|