(ii) Rights, Preferences and Restrictions attached to equity shares:
The Company has one class of shares having par value of ? 10 per share. Each shareholder is eligible for one vote per share held. The final 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.
(v) Shares reserved for issue under options and contracts:
Refer note 37 for details of shares to be issued under employee stock option Scheme (ESOS 2008 and ESOS 2021).
(vi) In the period of five years immediately preceding March 31, 2024:
i) The Company has not allotted any equity shares as fully paid up without payment being received in cash.
ii) The Company has not allotted any equity shares by way of bonus issue.
iii) The Company has not bought back any equity shares.
The description of the nature and purpose of each reserve within equity is as follows
(a) Capital reserve
Capital Reserve includes forfeiture of application money received on issue of share warrants and Capital Reserves on amalgamation/Business Combinations.
During the current year ended March 31, 2024, the Company has sold its investment in equity shares and Non Convertible Debentures of its subsidiaries to its another subsidiaries for a consideration of ? 85.72 crores. Resulting gain of ? 29.72 crores on such sale is accounted for in “Capital Reserve”, this being in the nature of common control business combination.
During the previous year ended March 31, 2023, the Company has sold its investment in equity shares of its subsidiary to its another subsidiary, for a consideration of ? 49.70 crores. Resulting loss of ? 51.30 crores on such sale is accounted for in “Capital Reserve”, this being in the nature of common control business combination.
(b) General reserve
General Reserve is a free reserve created by the Company by transfer from Retained earnings for appropriation purposes.
(c) Amalgamation reserve
The reserve was created pursuant to scheme of amalgamation in earlier years. Amalgamation Reserve is a reserve which arose pursuant to the scheme of amalgamation and shall not be considered to be a reserve created by the Company.
(d) Securities premium account
Securities premium reserve is created due to premium on issue of shares. This reserve is utilised in accordance with the provisions of the Companies Act.
(e) Capital redemption reserve
Capital Redemption Reserve is created for redemption of preference shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the preference shares redeemed. Capital Redemption Reserve may be applied by the Company in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares.
(f) Share based payment reserve
This reserve relates to share options granted by the Company to its employee stock option scheme. Further information about share-based payments to employees is set out in note 37.
(g) Equity instruments through OCI
The Company has elected to recognise changes in the fair value of certain investment in equity instrument in other comprehensive income. This amount will be reclassified to retained earnings on derecognition of equity instrument.
(h) Cash flow hedge reserve
The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on the changes of the fair value of the designated portion of the hedging instruments that are recognised and accumulated under the cash flow hedge reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.
Nature of security:
Term loan of ? 377.40 Crores
Loans and NCD amounting to ? 18.08 Crores (March 31, 2023 ? 208.69 Crores) are secured by (a) first pari passu charge on all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants and Garment Division at Bangalore; 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) Secured by second pari passu charge on all the Company’s Current Assets presently relating to the Textile Plants and Garment Division and all the current assets aquired by the Company at any time in future.
Loans amounting to ? 74.87 Crores (March 31, 2023 ? 124.69 Crores) are secured by (a) exclusive charge on some of the Immovable properties at Asarwa; (b) first pari passu charge on all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants and Garment Division at Bangalore; 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.
Loans amounting to ? 284.45 Crores (March 31, 2023 ? 241.28 Crores) are secured by (a) exclusive charge on Immovable properties of Ankur division; (b) first pari passu charge on all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants and Garment Division at Bangalore; 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; (c) Secured by second pari passu charge on all the Company’s Current Assets presently relating to the Textile Plants and Garment Division and all the current assets aquired by the Company at any time in future .
Loans amounting to ? NIL Crores (March 31, 2023 ? 47.06 Crores) are secured by (a) exclusive charge on some of the Immovable properties at Dholka; (b) first pari passu charge on all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants and Garment Division at Bangalore; and all Immovable Properties,
Note 14 : Financial liabilities14 (a) Borrowings (Contd.)
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; (c) Secured by second pari passu charge on all the Company’s Current Assets presently relating to the Textile Plants and Garment Division and all the current assets aquired by the Company at any time in future .
Nature of Security
Cash Credit and Other Facilities from Banks
(a) Secured by first pari passu charge on all the Company’s Current Assets presently relating to the Manufacturing Locations 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.
(b) Secured by a second pari passu charge over all the Immovable Properties relating to Textile Plants, Movable Properties presently relating to the Company and all the movable properties aquired by the Company at any time in future after execution of and during the continuance of the Indenture of Mortgage.
Rate of Interest
i. Working Capital Loans from banks carry interest rates ranging from 6.03% to 7.73% per annum.
(i) During the current financial year, w.e.f. October 1, 2023, the Company has re-assessed the useful life of certain Property, Plant & Equipment based upon the internal technical evaluation carried out. Change in useful life of the Property, Plant & Equipment is being applied prospectively in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. Accordingly, there is a decrease in depreciation amount by ' 9.25 crores for the period ended March 31, 2024 due to change in useful life.
(ii) The Company made a contribution to an electoral bond of ? NIL crores for the year ended March 31, 2024. For the year ended March 31, 2023, Company has made a contribution of ? 9.00 crores (through the purchase of electoral bonds, with the ultimate beneficiary being the "Bharatiya Janata Party"), which is included in Miscellaneous Expenses.
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.
The Company has unused tax capital losses amounting to ? 475.32 crores as at March 31, 2024 (March 31, 2023: ? 466.53 crores). Out of the same, tax credits on losses of ? 259.93 crores have not been recognised on the basis that recovery is not probable in the foreseeable future. Unrecognised tax capital losses will expire by March 31,2032, if unutilized, based on the year of origination.
The claims which are not acknowledged as debt are related to factory labour which are pending before Labour and Industrial Court.
Above disputed demand includes show cause notices received from various indirect tax department for various matters and in response of the same the Company has preferred appeals on these matters and the same are pending with various adjudicating authorities.
The management expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Company’s financial statements.
The Company has received various demands / show cause notices from income tax authorities aggregating to ' 5.31 crores. As the company has opted for new tax regime under section 115BAA of the Act in FY 2022-23, the company has written off MAT credit u/s. 115JAA of the Act amounting to ' 27.06 crore, which can be offset against above demands. If the above referred issues settles against the Company, there will not be any actual tax outflow or impact on profit and loss of the Company. Hence, no contingent liability is considered on above matters.
Note 32 : Foreign Exchange Derivatives and Exposures not hedged
The Company holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counter party for these contracts is generally a bank.
All derivative financial instruments are recognized as assets or liabilities on the balance sheet and measured at fair value. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation.
The fair values of all derivatives are separately recorded in the balance sheet within current and non-current assets and liabilities depending upon the maturity of the derivatives.
The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.
Cash Flow Hedges
The Company also enters into forward exchange contracts for hedging highly probable forecast transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognized in equity until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to the statement of profit or loss. These hedges have been effective for the year ended March 31, 2024 and March 31, 2023.
The Company uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions.
The cash flow hedges are taken out by the Company during the year for hedging the foreign exchange rate of highly probable forecast transactions.
The cash flows related to above are expected to occur during the year ended March 31, 2023 and consequently may impact the statement of profit or loss for that year depending upon the change in the foreign exchange rates movements.
Note 33 : Segment ReportingIdentification of Segments:
The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the company.
Operating Segments:
(a) Textiles : Fabrics, Garments and Fabric Retail.
(b) Advanced Material : Human Protection fabric & garments, Industrial Products, Advance Composites and Automotive fabrics.
(c) Others : E-commerce, Agriculture Produce, EPABX and One to Many Radio, Developing of Residential Units and Others.
Segment revenue and results:
Revenue and expenses directly attributable to segments are reported under each reportable segment. The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure (net of unallocable income). Unallocated expenditure consists of common expenditure incurred for all the segments and expenses incurred at corporate level.
Segment assets and Liabilities:
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade receivables, Inventories and other operating assets. Segment liabilities primarily includes trade payable and other liabilities excluding borrowings.
Common assets and liabilities which can not be allocated to any of the business segment are shown as unallocable assets / liabilities.
Inter Segment transfer:
Inter Segment revenues are recognised at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the company level.
The accounting policies of the reportable segments are the same as the Company’s accounting policies described in Note 3. The Company’s financing (including finance costs and finance income) and income taxes are reviewed on an overall basis and are not allocated to operating segments.
Geographical segment
Geographical segment is considered based on sales within India and rest of the world.
(a) Employees of the Company receive benefits from a provident fund, which is a defined contribution plan.The eligible employees and the company make monthly contributions to the provident fund plan equal to a specified percentage of the employees’ salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The remaining portion is contributed to the government-administered pension fund. The company has no further obligation to the plan beyond its monthly contributions. Such contributions are accounted for as defined contribution plans and are recognised as employee benefits expenses when they are due in the Statement of profit and loss.
(b) The Company’s Superannuation Fund was administered by approved Trust. The Company was required to contribute the specified amount to the Trust for the eligible employees and with effect from October 1, 2023, the company has discontinued the Superannuation Fund Scheme.
(c) The Company’s Employee State Insurance Fund, for all eligible employees, is administered by ESIC Corporation. The Company is required to contribute specified amount to ESIC Corporation and has no further obligations to the same beyond its contribution.
B. Defined benefit plans:
The Company has following post employment benefit plans which are in the nature of defined benefit plans:
(a) Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days (30 days for the employees joined before March 31, 2000 with the grade of M2 and above from the date they are in Grade M2 and above) salary multiplied for the number of years of service. The Gratuity plan is a Funded plan administered by a recognised Trust in India.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the Arvind Limited Employees' Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trusts and contributions are invested in a scheme as permitted by Indian law.
The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligations recognized in other comprehensive income.
(b) Compensatory Pension Scheme
The Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees who have joined before June 30, 1983 and who have rendered not less than 31 years of service before their retirement. The plan is unfunded. Employees do not contribute to the plan.
Liabilities with regard to the Compensatory Pension Scheme are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method.
The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods.
The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.
The Company does not have any contributions expected towards planned assets for the next year.
C. Other Long term employee benefit plans:
Leave encashment
The Company has a policy on leave encashment which are both accumulating and non-accumulating in nature. The expected cost of accumulating leave encashment is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.
Note 35 : Disclosure of Related Party Transactions in accordance with Ind AS 24 - Related Party Disclosures (Contd.)(e) Terms and conditions of transactions with related parties
(1) Outstanding balances other than loan given and taken and fair value of financial guarantee contract, at the year-end are unsecured and interest free and settlement occurs in cash.
(2) Loans in INR given to the related party carries interest rate of 8.00% (March 31, 2023: 8.00%). Loans in USD given to the related party carries an interest rate range from 6.20% to 6.80% (March 31, 2023 : 6.20%).
(3) Financial guarantee given to Bank on behalf of subsidiaries carries no charge and are unsecured.
(4) The company has granted the majority of the loans payable on demand.
(f) Commitments with related parties
The Company has provided commitment of ? 4.27 Crores to the related party as at March 31, 2024 (March 31, 2023: ? 1.89 Crores).
(g) Transactions with key management personnelNote 37 : Share based payments
A. The Company has instituted Employee Stock Option Scheme 2008 (ESOS 2008) and AL - Employee Stock Option Scheme 2021 (ESOS 2021), pursuant to the approval of the shareholders of the company at their extra ordinary general meeting held on October 23, 2007 and annual general meeting held on August 18, 2021 respectively. Under both the schemes, the Company has granted options convertible into equal number of equity shares of the face value of ? 10 each to its certain employees. The following table sets forth the particulars of the options outstanding as on March 31, 2024 under ESOS 2008 and ESOS 2021:
(c) Arvind Limited through its CSR policy aims to work for social, economic, educational, infrastructural, environmental, health, inner wellbeing and cultural advancement of the people and thereby positively impact their quality of life. The broad thematic areas are Educational Advancement, Rural Advancement, Environmental Advancement, Health Advancement and Cultural Advancement.
(d) Amount spent towards CSR activities includes amount contributed to related party during the year ended on March 31, 2024 was ? 0.94 Crores (March 31, 2023 : ? 3.30 Crores). This CSR initiatives are being carried out by company promoted organizations -Arvind Indigo Foundation, Arvind Foundation (AF).
The management assessed that the fair values of cash and cash equivalents, other bank balances, loans, trade receivables, other current financial assets, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values.
The fair value of borrowings is calculated by discounting future cash flows using rates currently available for debts on similar terms, credit risk and remaining maturities.
For financial assets and financial liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
(b) Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Company's assets and liabilities.
Fair value hierarchy
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
There are no transfer between level 1, 2 and 3 during the year.
The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
Note 42 : Financial instruments risk management objectives and policies
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.
The Company's risk management is carried out by a Treasury department under policies approved by the Board of directors. The Company's treasury identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The board provides written principles for overall risk.
(a) Market risk
Market risk refers to the possibility that changes in the market rates may have impact on the Company’s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates, interest rates, underlying equity prices, liquidity and other market changes.
Future specific market movements cannot be normally predicted with reasonable accuracy.
(a1) Interest rate risk
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate.
The Company is exposed to interest rate risk of short-term and long-term floating rate instruments. The Company’s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. These exposures are reviewed by appropriate levels of management at regular interval.
As at March 31, 2024, None of the Company's Borrowings are at fixed rate of interest (March 31, 2023 : approximately 5.53%).
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings as follows:
(a2) Foreign currency risk
The Company’s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions and foreign currency borrowings. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The major foreign currency exposures for the Company are denominated in USD and EURO.
Since a significant part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Exposures on foreign currency sales are managed through the Company’s hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance. The Company may use forward contracts and foreign exchange options towards hedging risk resulting from changes and fluctuations in foreign currency exchange rate. These foreign exchange contracts, carried at fair value, may have varying maturities varying depending upon the primary host contract requirements and risk management strategy of the company. Hedge effectiveness is assessed on a regular basis.
Foreign currency sensitivity
The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure in USD and EURO with a simultaneous parallel foreign exchange rates shift in the currencies by 2% against the functional currency of the respective entities. The company's exposure to foreign currency changes for all other currencies is not material.
The movement in the pre-tax effect is a result of a change in the fair value of financial instruments not designated in a hedge relationship. Although the financial instruments have not been designated in a hedge relationship, they act as an economic hedge and will offset the underlying transactions when they occur.
(b) Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables, investments and derivative financial instruments.
The Company is exposed to credit risk from its operating activities (primarily trade receivables and also from its investing activities including deposits with banks, forex transactions and other financial instruments) for receivables, cash and cash equivalents, financial guarantees and derivative financial instruments.
All trade receivables are subject to credit risk exposure. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The history of trade receivables shows a negligible provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of non-performance by any of the Company’s counterparties. The Company does not have significant concentration of credit risk related to trade receivables. No single third party customer contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of March 31, 2024 and March 31, 2023.
Trade receivables are non-interest bearing and are generally on 7 days to 180 days credit term.
With respect to derivatives, the Company’s forex management policy lays down guidelines with respect to exposure per counter party i.e. with banks with high credit rating, processes in terms of control and continuous monitoring. The fair value of the derivatives are credit adjusted at the period end.
(c) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short term line of credits from banks to ensure necessary liquidity. The Company closely monitors its liquidity position and deploys a robust cash management system.
During the year, the Company has been regular in repayment of principal and interest on borrowings on or before due dates. The Company did not have defaults of principal and interest as on reporting date.
The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects.
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:
Note 43 : Capital management:
For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions or its business requirements to optimise return to our shareholders through continuing growth. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The funding requirements are met through a mixture of equity, internal fund generation and other non-current borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings less cash and short-term deposits (including other bank balance). The Company is not subject to any externally imposed capital requirements.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any long term borrowing in the current period except for one loan. The Company has obtained letter from the lender before the date of adoption of financial statements for not accelerating the payment of this loan within one year from the balance sheet date subject to regularisation of the breach by end of March 31, 2025. Accordingly, the management has considered the classification of loan based upon the original repayment schedule.
No changes were made in the objectives, policies or processes for managing capital during the current period.
Note 45 : Additional Regulatory Disclosures As Per Schedule III Of Companies Act, 2013
Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the Financial Statements.
a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
b. The Company has Fund-based and Non-fund-based limits of Working Capital from Banks and Financial institutions. For the said facility, the revised submissions made by the Company to its lead bankers based on closure of books of accounts at the year end, the revised quarterly returns or statements comprising stock statements, book debt statements, credit monitoring arrangement reports, statements on ageing analysis of the debtors/other receivables, and other stipulated financial information filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company of the respective quarters and no material discrepancies have been observed.
c. The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved.
d. The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Company Act, 1956.
e. The Company has compiled with the number of layers prescribed under clause (87) of section 2 of the Companies Act 2013 read with Companies (Restrictions on number of Layers) Rules, 2017.
f. The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities(intermediaries), with the understanding that the intermediary shall;
i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
g. The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall;
i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries) or
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
h. The Company does not have any transactions which is not recorded in the books of accounts but has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
i. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Note 46 : Discontinued Operation
(A) The Company has entered into agreement on July 19, 2022 to sell its Omuni Undertaking to Bigfoot Retail Solutions Private Limited. In order to execute this transaction, the Company has transferred its Internet division to its wholly owned subsidiary company, Arvind Internet Limited with effective date of June 30, 2022 at a consideration of ? 152.30 crores. Hence, the Company has considered business of Arvind Internet Undertaking as “Discontinued Operations” in accordance with Ind AS 105 and accordingly, re-classified the financial results for various periods presented. Company has presented gain on this transaction as an exceptional item in the financial results.
The Company has sold net assets worth ? 0.24 crores and booked gain of ?. 152.06 crores on sale of Omuni undertaking. Post completion of all conditions subsequent to the transaction as on September 30, 2022, the Company has transferred its wholly owned subsidiary company Arvind Internet Limited to Bigfoot Retail Solutions Private Limited.
Note 47 : Code on Social Security, 2020
The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
Note 48 : New standards or amendments for the year ended March 31, 2024
The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended Companies (Indian Accounting Standards) Amendment Rules, 2023, as below, which are applicable from April 1, 2023.
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
Note 49 : Events occurring after the reporting period
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of financial statements to determine the necessity for recognition and/or reporting of subsequent events and transactions in the financial statements.
(A) The Board at its meeting dated May 6, 2024 has approved the Scheme of Arrangement (“Scheme”) for transfer and vesting of “Advanced materials division” of the company to Arvind Advanced Materials Limited, a wholly owned subsidiary of the company, on an ongoing basis by way of slump sale with effect from the appointed date i.e. April 1, 2024 at book value, under Sec 230 to 232 and other applicable provisions of the Companies Act, 2013. The Scheme is subject to requisite regulatory and other approvals, pending which no adjustments are required to be made in the Standalone Financial Statements for the year ended March 31, 2024.
(B) The Board of Directors recommended a final dividend of ? 3.75 per equity share and one-time special dividend of ? 1.00 per equity share, totalling to a dividend of ? 4.75 per equity share of face value of ? 10 each, for the financial year ended March 31, 2024, subject to approval of shareholders in the ensuing Annual General Meeting.
|