Home  »  Company  »  Gokaldas Exports  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Gokaldas Exports Ltd.

Mar 31, 2015

Dear Members,

We have pleasure in presenting Twelfth Annual Report on the business and operations of the Company together with Audited Results for the financial year ended March 31, 2015.

Financial Results (Consolidated)

Your Company's performance during the year as compared with that during the previous year is summarized /^s |n j^s) below: Particulars Year ended Year ended March 31, 2015 March 31, 2014

Revenue 113,749 114,709

EBIDTA 7,206 5,473

Other Income 4,355 883

PBT 3,552 (373)

Review of Operations

Gokaldas Exports, on a consolidated basis, has reported total revenue of Rs.113,749 Lakhs which is constant over previous year 2013-14. There are positive indicators from the US markets as their economy is showing signs of improvement, while European markets are looking weak with Greece imbroglio and similar stress in few other countries like France and UK. The company has successfully adopted its strategy of expanding geo-footprint to countries like Latin America and doing development work in few other countries. There is focus on reviewing product mix for higher thrust on products with higher margins.

On the profitability front, the company has shown positive performance with growth in operational profits as well as at the PBT level. Profits from operations has grown in excess of 30% in 2014-15 over 2013-14, through proactive measures towards cost & waste reduction, cost containment & margin improvement. This has helped the company post an EBIDTA of Rs.7,206 Lakhs in 2014- 15 as against Rs. 5,473 Lakhs in 2013-14. PBT for 2014-15 has also seen improvement to Rs.3,552 Crin 2014-15 as against a small loss in 2013-14 aided by one time income.

Key Cost Metrics

In the year 2014-15, there has been reduction in the key costs ratios as compared to previous year. The company had taken various measures towards creating an environment of effective cost management in the organization to keep the costs from spiraling as well as keep ourselves competitive in the market place. Among the key cost items, raw material costs to sales have reduced from 50% in 2013-2014 to48% in 2014-15, and overhead costs from 15.7% to 13.5%. There has been increase in depreciation charge due to change in accounting standard. Interest subvention was not renewed by Ministry of Commerce for the year 2014-15 leading to hike in interest costs & resultant hit to the P&L.

FY15 FY14

Raw Material Cost (Including inc/dec in Inventory) 48.0 50.0

Wage cost 33.0 29.4

Other Expenses 13.5 15.7

Depreciation and amortisation expense 3.0 2.4

Finance costs 4.0 3.5

Our strategy of cost management measures continues, which coupled with productivity enhancement initiatives would drive the overall performance improvement strategy in the coming years.

Wage costs form a significant part of our costs, which has seen increase in rates over the years as follows.As can be seen from the chart below, minimum wage in Karnataka has gone up 3 times over the past 8 years.Rising trend in wholesale price index (WPI) also reflects continuing inflationary pressure on operating costs.

We have undertaken substantive strategic measures to improve our performance, viz: focus on increasing share of business with existing customers, bring churn in customer set, develop new customers and markets, focus on high margin product basket, strengthen design capabilities, improve manufacturing efficiencies, and sustain focus on tighter financial management. These initiatives will help us achieve enhanced results in the coming years.

Dividend

No dividend has been recommended by the Directors for the year Transfer to Reserves

No amount is transferred to the Reserves. List of Subsidiaries

Your Company has 13 subsidiary companies. The names of these companies are as follows: All Colour Garments Private Limited, Deejay Trading Private Limited, Glamourwear Apparels Private Limited, Madhin Trading Private Limited, Magenta Trading Private Limited, Rafter Trading Private Limited, Rajdin Apparels Private Limited, Reflexion Trading Private Limited, Rishikesh Apparels Private Limited, Seven Hills Clothing Private Limited, SNS Clothing Private Limited, Vignesh Apparels Private Limited and RobotSystems Private Limited.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 a statement containing salient features of the financial statements of the Subsidiary Companies in Form AOC-1 is given in Annexure to this report, the Audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

Deposits

During the year under review, your Company has not invited or accepted any deposits from the public under section 76 of the Companies Act, 2013 and Rules made there under.

ESOP-2010

Your Company has introduced the Employee Stock Option Scheme - 2010 in accordance with the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999. During the year 2,18,332 employee stock options were converted into equivalent number of equity shares. As required under SEBI (Share Based Employee Benefits Regulations, 2014), a disclosure is annexed herewith.

SHARE CAPITAL

Consequent to conversion of stock options into equity shares, your Company's Paid Up equity share capital has gone upto Rs. 172,971,660 as on March 31, 2015 from 171,880,000 as on March 31,2014.

Directors

During the year 2015-16, Mr. Gautam Chakravarti, Director, resigned from Directorship with effect from 25th May, 2015 and Mr.R Ramababu has been appointed as Vice Chairman and Managing Director of the Company with effect from 25th May, 2015.

The Board of Directors places on record sincere appreciation to Mr. Gautam Chakravarti for his invaluable contribution to the Company during his tenure as Whole-time Director.

Mr. Richard B Saldanha, Director, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

The brief resume/details relating to Director being re-appointed as stipulated under Clause 49 of the Listing Agreement is furnished in the Report on Corporate Governance.

At the Board Meeting of the Company held on September 29th, 2014 the Company had appointed Mrs. Smita Aggarwal (DIN: 01478327), a woman Director as Independent Director under the Companies Act, 2013, for 5 years.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration various aspects of

Board's functioning, composition of the Board and its Committees, execution and performance of specific duties, obligations and governance.

The performance evaluation of Independent Directors has been carried out. The performance evaluation of the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

NUMBER OF MEETINGS OF THE BOARD

During the year, five Board Meetings were held on May 10, 2014, August 13, 2014, September 29, 2014, November 14, 2014 and February 14, 2015. The Particulars of Directors &their attendance during the financial year 2014-2015 has been disclosed in the Corporate Governance Report forming part of this Annual Report.

BOARD COMMITTEE

The Company has the following committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. CSR Committee

The Composition of each of the above Committees, their respective roles and responsibility are as detailed in the report on Corporate Governance.

The Company's last Annual General Meeting was held on 29th September, 2014.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, the Management states that:

I) In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II) They 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 and of its profits / losses for the year ended March 31,2015;

III) They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

IV) They have laid down Internal Financial Controls to be followed by the Company and the Audit Committee of the Board of Directors shall ensure that the Internal Control is adequate and robust;

V) They have prepared the financial statements for the year ended March 31,2015 on a going concern basis;

VI) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Safety, Health, Environment

We, as a responsible manufacturer, are committed to take adequate measures related to environment, employee health and safety in developing, manufacturing, storing, handling and distribution of our products. It is our responsibility to provide a workplace free from accidents, injuries and exposure to hazardous substances, conserve natural resources and prevent pollution to protect the environment.

Besides, as a constructive partner in the communities in which it operates, the Company has been taking concrete actions to realize its social responsibility objectives, thereby building value for its various stakeholders. We respect human rights, value our employees, and invest in innovative technologies. In the past the Company has supported innumerable social and community initiatives and continues to do the same.

Some of the key initiatives taken by the company are:

- Regular fire safety audits along with mock drills at all locations

- Identification and implementation for

additional fire safety measures for high rising buildings

- Up-gradation of existing fire control and safety systems including training on fire prevention for employees

- Enhanced focus on product safety and safe working practices through training programs

- Implementation of a Reverse Osmosis plant in Denim Laundry for recycling of wastewater

Corporate Governance

Your Company is committed to maintaining the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of India's (SEBI) Corporate Governance practices. Your Company's Corporate Governance Compliance Certificate is in line with Clause 49 of the Stock Exchange Listing Agreement and is given along with the Corporate Governance Report.

Management Discussion and Analysis

Management Discussion and Analysis Report is given separately, forming part of this Annual Report and is in accordance with the requirements laid out in Clause 49 of the Listing Agreement with Stock Exchanges.

Listing

The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company has paid the listing fees to the respective stock exchanges till date. The Company's shares are tradable compulsorily in the dematerialized form and the Company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL) fortradingin electronic form.

Auditors

a) Statutory Auditor

At the AGM held on 29th September, 2014 the members approved the appointment of M/s S R Batliboi & Associates LLR Chartered Accountants and M/s Girish Murthy & Kumar Chartered Accountants as Joint Statutory Auditors for a period of three (3) years from the eleventh AGM till the conclusion

of the thirteen AGM subject to the approval of the Audit Committee and ratification by the Members every year. As recommended by the Audit Committee, the Board has proposed the re-appointment of M/s S R Batliboi & Associates LLR Chartered Accountants and M/s Girish Murthy & Kumar Chartered Accountants as Joint Statutory Auditors for fiscal 2015-16.

b) Secretarial Auditor

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Nagendra D Rao, Practicing Company Secretary (CP No :7731, ACS No & 5553) to undertake the secretarial audit of the Company. The Secretarial Audit Report is given in Annexure to this Report.

Particulars of Employees

The Statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in an annexure forming part of this Annual Report

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

In pursuance of the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings in such manner as prescribed under Rule 8 (3) of the Companies (Accounts) Rules, 2014, the particulars of the same are given below.

A. Conservation of Energy

The operations of the Company are not energy intensive. However, the Company takes continuous initiatives to curtail consumption of energy on an ongoing basis.

B. Technology absorption, adaptations and innovation Not Applicable

C. Foreign Exchange Earnings and Outgo Foreign Exchange earned : Rs. 82,664 lakhs Out go: Rs. 21,755 lakhs

RELATED PARTY TRANSACTIONS

All related party transactions, that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. The Company presents a statement of all related party transactions before the Audit Committee. Prior omnibus approval of the Audit Committee has been obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all related party transactions is placed before the Audit Committee. Further there are no materially significant related party transactions during the year under review made by the Company with promoters, Directors, Key Managerial Personnel or designated persons which may have a potential conflict of interest with the Company at a large.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENT

In terms of Section 134 of the Companies Act, 2013 the particulars of Loan, Guarantees and Investment given by the Company under Section 186 of the Companies Act, 2013 is detailed in notes to accounts of the financial statements.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a policy on prevention, prohibition and Redressal of Sexual Harassment and Non- discrimination at work place in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual temporary, trainees) are covered under this policy.

An Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment and discrimination at work place.

During the year ended March 31,2015, the ICC has received no complaints pertaining to Sexual harassment/discrimination at work place.

EXTRACT OF THE ANNUAL RETURN

Relevant extract of annual return to be filed with the Registrar of Companies for the financial year 2014-15 is given as Annexure to this Report.

INTERNAL CONTROL SYSTEMS

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. Internal Audit is carried out in a programmed way and follow up actions were taken for all audit observations.

CORPORATE SOCIAL RESPONSIBILITY

(CSR)

In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company has constituted a CSR Committee.

REMUNERATION POLICY FOR THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Clause 49(IV)(B)(1) of the Listing Agreement, the NRC is responsible for formulating criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to remuneration of Directors, Key Managerial Personnel and other senior employees.

In line with this, Board has adopted

Remuneration Policy for Directors, Key Managerial Personnel and other senior employees of the Company. The copy of policy is available on the company's website www.gokaldasexports.com

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

Your Company has adopted a Risk Management Policy for addressing the requirements of risk identification, risk assessment, risk mitigation plans etc of the company.

RISK MANAGEMENT POLICY

In terms of Clause 49 of the listing agreement, the Board of Directors have formulated policy on risk management which can be accessed from the website of the Company atwww.gokaldasexports.com

Acknowledgements and Appreciation

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners and associates, financial institutions and the Central and State Governments for their consistent support and encouragement to the Company. I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company for their hard work and commitment.

On behalf of the Board of Directors

Richard B Saldanha (Chairman) R Ramababu (VC and MD)

Bangalore 12th August, 2015


Mar 31, 2014

Dear Members,

The Directors present herewith the Eleventh Annual Report and the Audited Accounts for the year ended March 31, 2014.

Financial Results (Consolidated) (Rs.Lakhs)

Particulars Year ended Year ended March 31, 2014 March 31, 2013

Revenue 114,709 98,979

Profit Before Tax (373) (10,813)

Review of Operations

Gokaldas Exports, on a consolidated basis, has reported total revenue of Rs. 114,709 Lakhs representing an increase of 15.9% over 2012-13. This growth reflects improvement in revenues from both exports as well as domestic business. The Company''s growth for the year has been in line with the growth in Indian apparel exports of 16%, (sourceAEPCforthe period April 2013-Feb 2014).

There is a positive traction seen in the US economy as well as in certain European countries. This has helped the Company in achieving its growth, in add it ion to its strategy of expanding geo -foot print to countries like LatAm and Russia.

On the profitability front, the company has shown a positive swing of INR. 104 Cr. for the year as compared to previous year, through rigorous cost management measures in addition to its strategy of revenue enhancement. While it has ended the year with a small loss of IN R 3.7 Cr, it is pertinent to note that the company has posted cash profit in excess of INR. 20 Cr. on a consolidated basis and has reported positive PBT in Q2,Q3 as well as Q4 of 2013-14.

Key Cost Metrics

There has been reduction in all the key costs ratios in the year as compared to previous year indicative of the efforts of the management to make the business structure more competitive. Among these cost items, wage costs have reduced considerably from 35.7% of sales in FY13to 29.4% in FY14, thereby improving profitability in FY14over FY13. This has been achieved, despite increase in wage rates, through higher productivity.

(% to Sales) FY14 FY13

Raw Mate rial Cost (Including inc/dec in Inventory) 50.0 50.7

Wage cost 29.4 35.7

OtherExpenses 15.7 16.3

Depreciation and amortisation expense 2.4 3.4

Finance costs 3.5 3.8

With continued cost management initiatives, coupled with productivity enhancement, the company is well placed for improved performance in the coming years.

Some of the significant cost elements have shown upward trend in the past and in the current year. Wage costs form a significant part of our costs, which has seen increase in rates over the years as follows.

For the year 2013-14, we have undertaken substantive strategic measures to improve our performance, viz, focus on increasing share of business with existing customers, selectively develop new high-potential customers and markets and build on them, bring in product diversity and strengthen design capabilities, improve manufacturing efficiencies, and sustain focus on tighter financial management. These initiatives will help us achieve enhanced results in thecomingyearstoo.

Safety, Health, Environment and Corporate social responsibility-

We, as a responsible manufacturer, are committed to take adequate measures related to environment, employee health and safety in developing, manufacturing, storing, handling and distribution of our products. It is our responsibility to provide a workplace free from accidents, injuries and exposure to hazardous substances, conserve natural resources and prevent pollution to protect the environment.

Besides, as a constructive partner in the communities in which it operates, the Company has been taking concrete actions to realize its social responsibility objectives, thereby building value for its various stakeholders. We respect human rights, value our employees, and invest in innovative technologies. In the past the Company has supported innumerable social and community initiatives and continues to do the same.

Some of the key initiatives taken by the company a re-

Regular fire safety audits along with mock drills at all locations Identification and implementation for additional fire safety measures forhigh rising buildings Up-gradation of existing fire control and safety systems including training on fire prevention for employees Enhanced focus on product safety and safe working practices through training programs Implementation of a Reverse Osmosis plant in Denim Laundryfor recycling of wash water

Dividend

No dividend has been recommended by the Directorsforthe year.

Transfer to Reserves

DuetothelosssustainedbytheCompany no amount is transfer red to the Reserves.

List of Subsidiaries

Your Company has 13 subsidiary companies. The name of these companies is as follows: All Colour Garments Private Limited, Deejay Trading Private Limited, Glamourwear Apparels Private Limited, Madhin Trading Private Limited, Magenta Trading Private Limited, Rafter Trading Private Limited, Rajdin Apparels Private Limited, Reflexion Trading Private Limited, Rishikesh Apparels Private Limited, Seven Hills Clothing Private Limited, SNS Clothing Private Limited, Vignesh Apparels Private Limited and

Robot Systems Private Limited.

In terms of the specific approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, and in terms of the general permission granted by the Centra I Government to all companies vide General Circular No. 3/2011 dated February 21, 2011, the Audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

Fixed Deposits

During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Sections 58A a nd58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of India''s (SEBI) Corporate Governance practices and accordingly have implemented all the major stipulations prescribed. Your Company''s Corporate Governance.

Compliance Certificate in line with Clause 49 of the Stock Exchange Listing Agreement is given along with the Corporate Governance Report.

Management Discussion and Analysis

Management Discussion and Analysis Report is given separately, forming part of this Annual Report and is in accordance with the requirements laid out in Clause 49 of the Listing Agreement with Stock Exchanges.

Employee Stock Options Scheme

GEL Employee Stock Options Scheme 2010 has been approved by the shareholders. The Compensation Committee of the Board met on May 20th, 2013 and February 1st, 2014 and granted the stock options to identified employees.

Listing

The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company has paid the listing fees to the respective stock exchanges till date. The Company''s shares are tradable compulsorily in the dematerialized form and the Company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL) fortrading in electronic form.

Directors

During the year 2013-14 the Composition of the Board remains same. Mr. Gautam Chakravarti, Director retires by rotation at the forthcoming Annual General Meeting, and being eligible offers himselfforre- appointment.

In terms of Sections 149,152 and other applicable and related provisions of the Companies Act, 2013 read with Rules made thereunder, retirement by rotation shall not applyto Independent Directors. In order to comply with the statutory requirements, the Independent Directors Mr. Arun. K. Thiagarajan, Mr. Jitendrakumar H. Mehta and Dr. Yashwant S.Thorat are being recommended for appointment for a term upto five consecutive years, on a non-rotational basis.

Details of the proposals of appointment

or re-appointment as applicable are mentioned in the Explanatory Statement under Section 102 of the Companies Act 2013 in the Notice to the 11th Annual General Meeting. Necessary resolutions are being placed before the shareholders forapproval.

Auditors

The Company''s Joint Auditors, M/s S.R. Batliboi & Associates LLP Chartered Accountants and M/s Girish Murthy & Kumar Chartered Accountants hold office upto the conclusion of the ensuing Annual General Meeting. The Company has received the requisite certificate from them pursuant to Sect ion 141 (3)(g) of the Companies Act, 2013. The Audit Committee of the Board has recommended their re-appointment for a period of 3(three) years from the conclusion of this Annual General Meeting till 2017 AGM. The necessary resolution is being placed before the share holders for approval.

Particulars of Employees

In accordance with the provisions of Section 217(2A) read with Companies (Particulars of Employees), Rules, 1975, the names and other particulars of employees are set out in the Annexureto the Directors''Report.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA)of the Companies Act, 1956 with respect to the Directors'' Responsibility Statement, the Management statesthat:

I) In the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed along with proper explanation relating to materialdepartures, if any,

II) They 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 and of its profits / losses for the year ended March 31, 2014,

III) They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities,

IV) They have prepared the financial statements for the year ended March 31, 2014 on a going concern basis.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo In pursuance of the provisions of 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given below.

A. Conservationof Energy

The operations of the Company are not energy intensive. However, wherever possible the Company strives to curtail the consumption of energy on a continuous basis.

B. Technology absorption, adoptions and innovation

Not Applicable

C. Foreign Exchange Earnings and Outgo

Foreign Exchange earned : Rs. 88,425 lakhs

Outgo :Rs. 20,188 lakhs

Acknowledgements and Appreciation

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners and associates, financial institutions and the Central and State Governments for their consistent support and encouragement to the Company I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company for their hard work and commitment.

On behalf of the Board of Directors

Richard B Saldanha (Chairman) Gautam Chakravarti (CEO)

Bangalore 13th August, 2014


Mar 31, 2013

The Directors present herewith the Tenth Annual Report and the Audited Accounts for the year ended March 31, 2013.

(Rs In lakhs)

Particulars Year ended Year ended March 31, 2013 March 31, 2012

Revenue 98,979 1,03,020

Profit Before Tax (10,813) (13,162)

Profit after Tax (10,944) (13,237)

Review of Operations

Gokaldas Exports, on a consolidated basis, has reported total sales of Rs. 98,979 Lakhs representing a decline of 3.9% over 2011- 12. From a merchandise sales point of view, FY2012-13 has shown a growth of 1% over the previous year.

On a macroeconomic environment basis, India''s apparel industry has declined by 5% to $ 12.9 billion in 2012-13. This is mainly due to sluggish demand in western markets. The US and Europe, which together account for the bulk of the country''s apparel exports, faced a weak economic scenario, which has hurt the prospects of garment manufacturers globally.

In this challenging environment, the Company has focused its efforts towards the export market and achieved a growth of 1.5% in the year 2012-13. Consequently export sales as percentage of total sales has shown a growth of 2.3%.

Growth Metrics (In INR lakhs) FY12 FY13 Gr %

Merchandise Sales 73,951 75,082 1.5%

Export as % of total sales 79.3% 81.6% 2.3%

Key Costs and their impact on profitability

From a cost point of view, there has been a decrease in total expenses in FY13 by 5.5%.This has been achieved through various cost control measures taken during the year. While the year has been impacted by increase in wage costs and general inflation, this has been offset by lower raw material costs, finance costs and other manufacturing & admin costs.

(Rs. In lakhs)

Key Costs FY12 FY13 % change

Raw Material Cost(Including increase /decrease in Inventory) 57,662 50,630 -12.2%

Wage cost 33,245 35,672 7.3%

Other Expenses 17,631 16,319 -7.4%

Depreciation and amortisation expense 3,696 3,409 -7.8%

Finance costs 3,949 3,761 -4.8%

Total Expenses 1,16,183 1,09,792 -5.5%

The upward trends in Wage costs and inflation are evident from exhibits given below:

The trend in wholesale price index (WPI)indicates significant inflationary pressure on operating costs.

However due to decline in revenues and pricing pressure from customers, the company has not been able to absorb the total cost resulting in PBT of Rs. (10,813)Lakhs for FY13, which is lower by 18% as compared to previous year PBT of Rs. (13,162) Lakhs.

For the year 2013-14, we have undertaken necessary measures to improve our performance. Some of these are - focus on increasing share with existing customers, selectively develop new customers and build on them, bring in product diversity, improving manufacturing efficiencies and sustaining the focus on tighter financial management. These initiatives along with improved productivity measures will help us achieve better results in the coming year.

Safety, Health, Environment and Corporate social responsibility-

We, as a responsible manufacturer, are committed to take adequate measures related to environment, employee health and safety in developing, manufacturing, storing, handling and distribution of our products. It is our responsibility to provide a workplace free from accidents, injuries and exposure to hazardous substances, conserve natural resources and prevent pollution to protect the environment.

Besides, as a constructive partner in the communities in which it operates, the Company has been taking concrete actions to realize its social responsibility objectives, thereby building value for its various stakeholders. We respect human rights, value our employees, and invest in innovative technologies. In the past four decades, the Company has supported innumerable social and community initiatives.

Some of the key initiatives taken by the company are-

- Regular fire safety audits along with mock drills at all locations

- Identification and implementation for additional fire safety measures for high rising buildings

- Up gradation of existing fire control and safety systems

- Continuous training on fire prevention and control to employees

- Enhanced focus on product safety and safe working practices through training programs

Dividend

No dividend has been recommended by the Directors for the year.

Transfer to Reserves

Due to the loss sustained by the Company no amount is transferred to the Reserves.

List of Subsidiaries

Your Company has 13 subsidiary companies. The name of these companies is as follows: All Colour Garments Private Limited, Deejay Trading Private Limited, Glamourwear Apparels Private Limited, Madhin Trading Private Limited, Magenta Trading Private Limited, Rafter Trading Private Limited, Rajdin Apparels Private Limited, Reflexion Trading Private Limited, Rishikesh Apparels Private Limited, Seven Hills Clothing Private Limited, SNS Clothing Private Limited, Vignesh Apparels Private Limited and Robot Systems Private Limited.

In terms of the specific approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, and in terms of the general permission granted by the Central Government to all companies vide General Circular No. 3/2011 dated February 21, 2011, the Audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

Fixed Deposits

During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

Corporate Governance

Your Company is committed to maintaining the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of India''s (SEBI) Corporate Governance practices and accordingly have implemented all the major stipulations prescribed. Your Company''s Corporate Governance Compliance Certificate dated July 27, 2011 in line with Clause 49 of the Stock Exchange Listing Agreement is given along with the Corporate Governance Report.

Management Discussion and Analysis

Management Discussion and Analysis Report is given separately, forming part of this Annual Report and is in accordance with the requirements laid out in Clause 49 of the Listing Agreement with Stock Exchanges.

ESOPs

GEL ESOP Scheme 2010 has been approved by the shareholders. Stock options are yet to be granted.

Listing

The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India of India Limited (NSE). The Company has paid the listing fees to the respective stock exchanges till date. The Company''s shares are tradable compulsorily in the dematerialized form and the Company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL) for trading in electronic form.

Directors

In the current fiscal 2013-14 Mr. N. Rangachary tendered his resignation to the Board of Directors due to hisother commitments. The Board of Directors at their meeting held on May 4, 2013 has accepted his resignation. During theyear under review, Mr. Prince Asirvatham, Mr. Partha Sarkar and Mr. Akhilesh K Gupta, had tendered their resignation to the Board of Directors. The Board of Directors at their meeting held on July 27, 2012 accepted their resignation.

The Board would like to take this opportunity to thank the outgoing directors for their invaluable contribution and guidance to steer through these challenging times.

During the year under review, Mr. Richard Saldanha and Mr. J. H. Mehta, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The detailed profile of the Directors seeking reappointment is mentioned in the notice of the ensuing Annual General Meeting.

Auditors

The Company''s Joint Auditors, M/s S.R. Batliboi & Co. LLP Chartered Accountants and M/s Girish Murthy & Kumar Chartered Accountants hold office upto the conclusion of the ensuing Annual General Meeting. The Company has received the requisite certificate from them pursuant to Section 224(1B) of the Companies Act, 1956, confirming their eligibility for re-appointment as Auditors of the Company.

Particulars of Employees

In accordance with the provisions of Section 217(2A) read with Companies (Particulars of Employees), Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors'' Report.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, the Whole- time Management state that:

I) In the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II) They 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 and of its profits for the year ended March 31, 2013;

III) They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

IV) They have prepared the financial statements for the year ended March 31, 2013 on a going concern basis.

Due to the loss sustained by the Company no amount is transferred to the Reserves. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

In pursuance of the provisions of 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is given below.

A. Conservation of Energy

The operations of the Company are not energy intensive. However, wherever possible the Company strives to curtail the o f energy on continued basis.

B. Technology absorption, adaptations and innovation

Not Applicable

C. Foreign Exchange Earnings and Outgo

Foreign Exchange earned: :Rs.78,131.77 lakhs Out go : Rs. 22,129.89 lakhs Acknowledgements and Appreciation

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company for their hard work and commitment.

On behalf of the Board of Directors

Richard B Saldanha

(Chairman)

Bangalore Gautam Chakravarti

July 31, 2013 (CEO)


Mar 31, 2012

The Directors present herewith the Ninth Annual Report and the Audited Accounts for the year ended March 31,2012

Financial Results (Consolidated) (Rs, in Lakhs)

Particulars Year ended Year ended March 31,2012 March 31,2011

Sales 1,03,020 1,16,101

Profit Before Tax (13,162) (8,812)

Less: Provision for Tax 75 336

Extraordinary Items - (531)

Profit after Tax (13,237) (9,007)

Review of Operations

Gokaldas Exports, on a consolidated basis, has reported total sales of Rs. 1,03,020 Lakhs in 2011-12 as against Rs 1,16,101 Lakhs in 2010-11 representing a de-growth of 11.2% over 2010-11.

The demand situation in the global apparel industry has not shown any improvement during the year. Economic Conditions across our major markets particularly in Europe has was sender, affecting consumer confidence. Many of the global apparel brands are experiencing demand contraction which has led to lower buying clearly indicating sluggishness in the market.

The Company has been able to show growth in EBITDA in these unfavorable conditions. The EBITDA before forex gain/loss has improved from a loss of Rs. (2,930) lakhs in 2010-11 to a profit Rs. 1,190 laksh in 2011-12.

EBIDTA (In INR lakhs) FY 11 FY 12

EBITDA before forex gain / loss -2,930 1,190

In this challenging environment, the company has focused its efforts towards the domestic market and achieved a growth of 35% in the year 2011-12.

Growth in domestic business (in INR lakhs) FY11 FY12 Gr% Domestic Sales 11,310 15,370 35%

Key Costs and their impact on profitability

This year has seen increase in overall costs driven by increase in wage costs and high general inflation. These trends are evident from exhibits given below.

The bend in wholesale price index (WPI) indicates significant infilation any pressure on operating costs.

Notwithstanding the above, the company has been able to shop substantial reduction in costs by focusing on various cost optimization measures for manufacturing as well as non-manufacturing expenses this is reflected in the following table.

(Rs in Lakhs)

Key Costs FY11 FY12 % Change

Raw Material Cost 62,330 57,150 -8.3%

Wage Cost 34,410 33,240 -3.4%

Consumption of Consumables, Stores and spares 1,605 1,100 -31.5%

Power and fule 2,295 2,062 -10.0%

Other Manufacturing expenses 1,360 716 -47.4%

The company has also got adversely impacted by a decline in its export incentives in 2011-12 mainly due to reduction in export incentives rates specified by the government of India.

(Rs.In lakhs)

Exports Incentive FY11 FY12

Total Merchant Sales 1,16,100 1,03,020

Export Incentive 5,620 3,340

% of revenue 4.8% 3.2%

As a industry, representations have been made to the government for providing support to our industry which will help in meeting the twin goals of boosting country's exports and creating employment.

Profitablity in FY 12 has been materially impacted due to a one-time change of Rs. 4,660 lakhs, on account of the revised estimate of carrying value of old inventory in Q4 FY12. This resulted in a PBT of Rs. (13,100 lakhs for FY12, as compared to PBT of Rs.(9,300) lakhs last fiscal. However, these charges are non-recurring in nature.

Reduction in Net borrowings

Our efforts on cash flow management have been fruitful during the year. The net borrowings have come down significantly by 28% from Rs.26,413 lakhs as of April 2011 to Rs. 19,000 lakhs as of March 2012. This has been achieved through profitability improvement as well as better working capital management. Quarterly brend of the net borrowings can be seen in the chart below:-

Through these efforts the Company has been able to reduce the Interest Costs for the Year bye 28% over previous year. This trust will continue during the coming years.

(Rs in lakshs)

Interest Cost Savings FY11 FY12

Interest Cost 3,639 2,602

For the year 2012-13, we have undertaken certain key measures to improve our performance. Some of these are-focus on increasing share with existing customers, develop now customers and build on them, bring in product diversity, improving manufacturing efficiencies and sustaining the focus on tighter financial management. These initiatives along with improved productivity measures will help us achieve better results in the coming year.

Safety, Health, Environment and Corporate social responsibility-

We, as a responsible manufacture, are committed to take adequate measures related to environment, employees health and safety in developing, Manufacturing, storing, handing and distribution of our products. it is our responsibly to provide a workplace free from accidents, injuries and exposure to hazardous substances, conserve natural resources and prevent pollution to protect the environment.

Besides as constructive partner in the communities in which it operates, the Company has been taking concrete actions to realize its social responsibility objectives, thereby bulking value for its various stakeholders. We respect human rights, value our employees, and invest in innovative technologies. In the past four decades, the Company has supported Innu merable social and community initiatives.

Some of the Key initiatives that Company took in this year are-

- Natural resources conservation in our manufacturing facilities, eg, use of solar power for peripheral lighting, LED lights in selected applications.

- Rein forcemeat of fire safety arrangements

- Free medical checkup / vaccination programs for the employees

- Training and seminars on various health and wellness topics.

- Projects such as HER (Health Enable Returns) carried our in co-ordination with the team of Doctors form St Johns Medical College Bangalore.

- Awareness programs for Women employees on various topics viz. Such as Nutritional food, Ergonomics, Domestic Violence, Reproductive health, Child & Mother health care, and HIV & AIDS.

- Summer camps organized for chicken of our factory employees

- Scholarship programm for employees chicken as an education support initiative.

Dividend

No dividend has been recommended by the Directors for the year.

Transfer to Reserves

Due to the loss sustained by the Company no amount is transferred to the Reserves.

List of Subsidiaries

Your Company has 13 subsidiary companies. The name of these companies is as under: All colour Garments private Limited, Deejay Trading Private Limited, Glamourwear Apparels private Limited, Madhin Trading Private Limited, Magenta Trading Private Limited, Ratter Trading Private Limited, Rajdin Apparels Private Limited, Reflexion Trading Private Limited, Rishikesh Apparels Private Limited, Seven Hills Clothing Private Limited, SNS Clothing Private Limited, Vignesh Apparels Private Limited sand Robot Systems Private Limited.

In terms of the Specific approval granted by the Central Government under section 212(8) of the Companies Act, 1956 and in terms of the general permission granted by the Central Government to all companies vide General Circular No. 3/2011 dated February 21,2011, the Audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any Investor at the registered office of your company and that of the subsidiary companies. Investors who want to have a copy of the above my write to the Compliance Officer at the registered office.

Fixed Deposits

During the year under review, the company has neither accepted nor renewed any deposits from public within the meaning of sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

Corporate Governance

Your Company is committed to maintaining the highest standards of Corporate Governance. Your Directors adhere to the standards set our by the securities and Exchange Board of India's (SEBI) Corporate Governance Practices and accordingly have implemented all the major stipulations prescribed. Your Company's Corporate Governance Compliance Certificate dated July 27, 2011 in line with clause 49 of the stock Exchange Listing Agreement is given along with the Corporate Governance Report.

Management Discussion and Analysis

Management Discussion and Analysis Report is given separately, forming part of this Annual Report and is in accordance with the requirements laid out in Clause 49 of the Listing Agreement with Stock Exchanges.

ESOP's

GEL ESOP Scheme 2010 was approved by the shareholders all the previous annual general meeting. Stock Options are yet to be granted.

Listing

The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (BSE) and National Stock Exchange of India Limited (NSE). The company has paid the listing fees to the respective stock exchanges till date. The Company's shares are tradable compubority in the dematerialized form and the company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository services India Limited (CDSL) for trading in electronic form.

Directors

During the year under review, there are no changes in the composition of the Board of Directors of the Company.

During the current fiscal 2012-13, Mr Prince Asivartham, Mr partha Sarkar and Mr Akhilesh K Gupta, have tendered there resignation to the Board of Directors, due to preoccupation. The Board of Directors at their meeting held on July 27,2012 has accepted their resignation.

The Board would like to take this opportunity to thank outgoing Director Mr. Prince Asirvatham. He brought unique focus on governance during Audit Committee and Board Meetings, and provided valuable while helping management efforts in turning around the business. He has helped us steer the company through some turbulent times towards a path of sustainable growth.

The Board would also like to place on record our almost appreciation of the contribution made by Mr Partha Sarkar during his tenure as Director of the Company. He has been an active participant at the Board Meetings of the Company, provided alternate views on some of the critical aspects of managing the Company, helped bring cash flow focus as well as provided deep insights into better process management on key issues. His governance focus has helped us in our efforts towards change management particularly over the past 18 months.

Finally, the Board would like to thank Mr. Akhilesh K Gupta for devoting his valuabe time to help the company focus on key deliverables, build organisation capability and good governance, and particularly, his unstimted support during difficult times.

During the year under review, Mr Arun K Thiagarajan and Mr N Rangachary, Directors retire by rotation at the ensuring Annual General Meeting and being eligible offer themselves for re-appointment. The detailed profile of the Directors seeking reappointment is mentioned in the notice of the ensuing Annual General Meeting.

Auditors

The Company's Joint Auditors, M/s S.R. ballibai & Co., Chartered Accountants and M/s Girish Murthy & Kumar Chartered Accountants hold office upto the coaclusion of the ensuing Annual General Meeting. The Company has received the requisite certificate from them pursuant to section 224(1B) of the Companies Act, 1956 confirming their eligibility for re-appointment as Auditors of the Company.

Particulars of Employees

In accordance with the provisions of section 217 (2A) read with companies (Particulars of Employees), Rules, 1975, the name and other particulars of employees are set our in the Annexure to the Director's Report.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, the Whole-time Management State that:

I) In the preparation of the annual accounts for the year ended March 31,2012, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any:

II) They 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 and of its profits for the year ended March 31,2012;

III) They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provision of this Act, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

IV) They have prepared the financial statements for the year ended March 31,2012 on a going concern basis.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

In Pursuance of the provisions of 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 the Particulars Relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is given below

A. Conservation of Energy

The operations of the company are not energy intensive. However, wherever possible the Company strives to curtail the consumption of energy on continued basis.

B. Technology absorption, adaptations and innovation

Not Applicable

C. Foreign Exchange Earnings and Outgo

Foreign Exchange earned : Rs 74,819.93 lakhs

Out go : Rs 16,939.50 lakhs

Acknowledgements and Appreciation

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners / associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. we are sure you will join our Directors in Conveying our sincere appreciation to all employees of the Company for their hard work and commitment.

On behalf of the Board of Directors

Richard B Saldanha

(Chairman)

July 27,2012 Gautam Chakravarti

Bangalore (CEO)


Mar 31, 2010

The Directors are pleased to present their Seventh Annual Report on the business and operations of your company for the year ended 31st March, 2010.

Financial Results (Rs. In lakhs)

Particulars Year ended Year ended

March 31,2010 March 31, 2009

Sales 1,06,874.26 1,09,213.30

Profit Before Tax (453.23) 345.00

Less: Provision for Tax: 260.00 8.53

Prof it after Tax (193.23) 336.47

Balance brought forward from last Year 18,087.55 17,751.08

Amount available for appropriation 17,894.32 18,087.55

Appropriations:

Proposed dividend - -

Corporate dividend tax - -

General Reserve - -

Balance carried forward 17,894.32 18,087.55

The company reported turnover of Rs 1,06,874.26 lakhs ( Standalone) for the year ending March 31, 2010 and loss after tax Rs 193.23 Lakhs, the reasons for the same were explained under Operations Review in details.

Operations Review

The global textile and clothing trade has undergone a sea-change in recent times. The economic recession in major importing countries last year and the gradual revival of the business optimism in the first few months of the current year have paved the way for consolidation in major producing countries like China and India and relatively new entrants like Vietnam.

There is no doubt that a number of macro issues are ailing the apparel export industry today, like,

a) Escalating cotton fabric prices which are more than 40% higher than a few months ago.

b) Appreciating currency against both USD and the Euro, which have seen 4.2% and 10% hardening respectively, since January 1, 2010. See Graphs F & G.

c) Rising wage rates.

d) Shortage of labour as NREGA scheme takes a toll.

e) Government apathy, with no relief or support directly to the industry.

Combined together, these immediate concerns have affected the competitiveness of the industry by around 25%.

Material Cost & its Impact on the Profitability

Rs. In Crores

FY 2010 FY 2009

Export Sale of Garments 929.93 991.21

Domestic Sale of Garments 70.64 72.13

Sale of Raw Materials 64.86 24.05

Total Sales 1,065.43 1,087.39

Material Cost 654.78 581.43

Material Cost % 61% 53%

Increase in Material Cost is 8%

S.No Product FY 2010

Qty. UVR Amount %

1 Outerwear 41.92 722.47 30,285.03 30%

2 Active wear 3.06 614.33 1,879.91 2%

3 Bottom wear 148.88 323.90 48,223.71 48%

4 Casual wear 80.56 208.75 16,817.18 17%

5 Babies Garments 11.53 247.09 2,848.51 3%

6 Others 0.14 17.21 2.49 0%

286.10 349.73 100,056.82

S.No Prduct FY 2009

Qty. UVR Amount %

1 Outer Wear 35.92 800.10 28,739.23 29%

2 Active wear 5.15 280.99 1,445.74 1%

3 Bottom wear 156.25 365.27 57,074.97 57%

4 Casual wear 34.22 275.23 9,417.24 9%

5 Babies Garments 9.68 251.71 2,436.38 2%

6 Others 23.19 311.35 7,221.37 7%

S264.41 402.16 106,334.94

Drop in unit value realisations is 13%

Ironically, at this point of time the industry is not short of business. In fact, predictions are that by October, 2010, India will run out of capacity. The challenge, of course, is meeting the price points.

Even with orders pouring in from the major export markets (the U.S. and E.U.) the Indian apparel exporters are not able to cash in on the opportunity due to the unprecedented rise in cotton prices.

Wage hike, labour shortage because of alternative opportunities elsewhere,

and skilling the unskilled are the new constraints of the garment industry.

Added to the above,

1. Recessionary trends,

2. Low prices,

3. Hardening Rupee

4. Reducing incentive.

There has been significant learning from the market upheavals of the last 2 years.

Focus on Cost Reduction, Increasing Productivity and Working Capital Improvement are higher than ever before with significant improvements in sight.

The company is now in a cautious ramping up of resources so as to leverage from the sharp market recovery expected in the next few months. The company has adequate internal control systems as part of the Management Information System in place. Regular productivity audits are being conducted in all fronts and we feel confident that in the latter part of 2010-11 markets will take a turn for the better and the company will swing to better performance.

Fire at Yeshwanthpur Fabric Godown

In the early hours on April 16, 2010 a fire broke out in our Yeshwanthpur Fabric godown. An electric short circuit is suspected to have caused the fire. This grew into a big fire and about 70% of the godown was gutted. About 40 lakhs meters of fabric has been burnt. About 20 fire tenders were put into service & with their dedicated efforts the fire was brought under control and extinguished by 10 AM in the morning.

The godown was insured and the necessary insurance claim has been filed. As a consequence of this fire we lost 3 weeks of production time, as we had to wait for the supply of the fresh fabric.

Dividend

Despite the recovery trends, the profitability achieved during the year has been less than that of the previous year. Our Directors felt it appropriate to conserve the cash reserves and therefore do not recommend any dividend for this year.

Subsidiary companies

In line with the requirements of Accounting Standard AS - 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its subsidiaries.

In terms of the Central Government approval under Section 212(8) of the Companies Act, 1956, the audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report.

The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

List of the Subsidiaries

1 All Colour Garments Private Limited

2 Deejay Trading Private Limited

3 Glamourwear Apparels Private Limited

4 Madhin Trading Private Limited

5 Magenta Trading Private Limited

6 Rafter Trading Private Limited

7 Rajdin Apparels Private Limited

8 Reflexion Trading Private Limited

9 Rishikesh Apparels Private Limited

10 Seven Hills Clothing Private Limited

11 SNS Clothing Private Limited

12 Vignesh Apparels Private Limited

13 Robot Systems Private Limited

Listing

The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India of India Limited (NSE). The company has paid the listing fees to the respective stock exchanges upto date. The Companys shares are tradable compulsorily in the dematerialized form and the Company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL) for trading in electronic form.

Directors

During the year Shri Ranjan Pant resigned form the Board w.e.f. May 5, 2009 and Shri N Rangachary and Shri Partha Sarkar were appointed as Directors w.e.f. effect from July 13, 2009.

The profile of the Directors appointed during the year is mentioned below:

Shri N Rangachary

Shri N Rangachary is Fellow member of Institute of Chartered Accountants of India (FCA), Fellow Member of Institute of Company Secretaries of India (FCS) and Fellow member of Institute of Cost & Works Accountants of India (ACWA) & Honorable Fellow Actuarial Society of India

Mr. N Rangachary was selected as Indian Revenue Service Officer in 1960 and retired in July 1996 as Chairman, Central Board of Direct Taxes. Besides, he served as

(i) Additional Secretary in the Department of Space,

(ii) Financial Advisor to the United India Insurance Company Ltd.,

(iii) Chairman, Insurance Regulatory and Development Authority of India from August 1996 to June 2003.

(iv) The Controller of Insurance, Government of India,

(v) Chairman Tariff Adivisory Committee.

(vi) Advisor to the Government of Andhra Pradesh on Finance, Risk

Management and Insurance from October 2003 to November 2008.

In recognition of Shri N Rangacharys contribution to the insurance reforms in India, the International Insurance Council USA, honored him with International Insurance Award for the year 1999-2000.

Shri N Rangachary also holds directorship in the following Companies as on March 31, 2010:

(i) MAX India Limited

(ii) RT Exports Limited

(iii) Shriram EPC Limited

(iv) Take Solutions Limited

(v) Shriram properties Limited

(vi) AIG Trustee Co (India) Pvt Limited

(vii) Cecilia Healthcare Services Pvt Ltd

(viii) Tiger Warehouse Cold Chain Pvt Ltd

(ix) Equitas Micro Finance (India) Pvt Ltd

(x) MTAR Technologies Pvt Ltd

(xi) Root Multiclean Ltd

Shri N Rangachary is also a member of Max India Limited and AIG Trustee Co (India) Pvt Ltd Audit Committees.

Shri N Rangachary does not hold any shares in the Company.

Shri Partha Sarkar

Shri Partha Sarkar holds a Bachelor Degree in Technology and an MBA from the Indian Institute of Management, Ahmedabad.

He is having 34 years of experience in business with 21 years with the well- known Tata Group of companies in diverse industries.

Shri Partha Sarkar worked for Hindustan Unilever Ltd. He joined Tata Administrative Services in the year 1975 and worked with the Tata Group till 1996 under various capacities. He was Group Strategic Planning Manager in Tata Group. He worked with Escorts Limited as CEO & Managing Director from 2000 - 2008.

Presently, Shri Partha Sarkar is running own management consulting business, focusing on acquisitions and financial restructuring of companies.

Shri Partha Sarkar presently is a director of Elixir Asset Preconstruction (India) Ltd.

He does not hold any shares in the Company.

Corporate Governance

Your Company believes that Corporate Governance is a voluntary code of self- discipline. In line with this philosophy, it follows healthy Corporate Governance practices and reports to the shareholders the progress made on the various measures undertaken. Your Directors have reported the initiatives on Corporate Governance adopted by your Company in the section Corporate Governance in the Annual Report. The Auditors Certificate confirming the compliance of the Corporate Governance requirements by the company is attached to the Report on Corporate Governance.

Management Discussion and Analysis Report

A detailed review of operations, performance and future outlook of the company is given separately under the head "Management Discussion and Analysis"

Auditors

M/s S.R. Batliboi & Co, Chartered Accountants and M/s Girish Murthy & Kumar, Chartered Accountants appointed by the Shareholders in the last Annual General Meeting held on September 22, 2009, as Joint Auditors, will retire at the forthcoming Annual General Meeting and, confirmed their eligibility for reappointment.

Particulars of Employees

Information as per section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per provisions of section 219(1 )(b)(iv) of the Companies Act, 1956, this Report and accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees under section 217 (2A) of the Companies Act 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary of the Company and same will be sent by post.

Deposits

Your Company has neither accepted nor renewed any deposits during the year. As such, no amount of principal and / or interest is outstanding as on the balance sheet date.

Directors Responsibility Statement

As stipulated in Section 217(2AA) of the Companies Act 1956, your Directors subscribe to the "Directors Responsibility Statement" and confirm that:

. In the preparation of the annual accounts, the applicable accounting standards have been followed by the company.

. 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 or loss of the Company for that period.

. The Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

. The Directors have prepared the annual accounts on a going concern basis.

Conservation of Energy, Research & Development, Technology Absorption, Foreign Exchange Earnings and Outgo

In pursuance of the provisions of 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is given below

A. Conservation of Energy

The operations of the Company are not energy intensive. However, wherever possible the Company

strives to curtail the consumption of energy on continued basis.

B. Technology absorption, adaptations and innovation

Not Applicable

C. Foreign Exchange Earnings and Outgo

Foreign Exchange

earned : Rs 95,416.49 lakhs Outgo: Rs 16,552.17 lakhs

Acknowledgements

Your Directors place on record their appreciation of co-operation and support extended by customers, shareholders, vendors, bankers and all governmental and statutory agencies. Your Directors thank the employees for their valuable contribution during the year and look forward to their continued support.

For and on behalf of the Board of Directors

Bangalore Madanlal J Hinduja

August 2, 2010 Chairman.

 
Subscribe now to get personal finance updates in your inbox!