Gangotri Textiles Ltd Directors Report.

TO SHAREHOLDERS

Ladies and Gentlemen,

Your Directors present the 31st Annual Report of the Company along with the audited statement of accounts for the year ended 31st March, 2020.

FINANCIAL RESULTS ( in Rs )

PARTICULARS 31.03.2020 31.03.2019
Sales Turnover 0 0
Profit/Loss before interest, depreciation and tax (1,57,666) (18,23,082)
Less: Interest Depreciation 3,629 3,629
Net Profit / Loss for the Period (1,61,295) (18,26,711)

PERFORMANCE

During the year under review, the Company has effected zero Turnover. Practically, the company is now a non-going concern. The company is facing severe financial crisis. The day-today expenses are being met by borrowing funds from the Promoters. Even the Directors are not paid their salary from April 2018. As already stated , the Lenders have sold the entire Assets of the Company and adjusted the proceeds against the loan due from the company. Even after adjusting the entire sale proceeds against the loan , there remains huge amount to be settled by the company. The company has requested the Lenders to let the company wind-up as it is not possible to meet all legal compliances and Statutory expenses. The Company could not pay even the Annual Listing Fee to the Stock Exchanges.

LEGAL

The Legal issues against the Company were elaborately disclosed in our previous years Annual Report. The statues quo remains the same.

DIVIDEND

No dividend has been recommended for the Financial Year ended 31st March, 2020.

FINANCE

The total outstanding dues to the consortium of Lenders as on 31-3-2020 is more than Rs 200 crores including interest accrued but not paid. As stated earlier, the Lenders have realized a sum of Rs 191.05 crores by selling the entire Assets of the Company through e-auction. The Lenders have adjusted the sale proceeds against loan due from the company. Even after adjusting the said amount, the company owes huge sum to the Banks and the company is not having any assets to pay the balance dues.

DEPOSIT

NIL

CORPORATE GOVERNANCE

A separate Report on the Corporate Governance is enclosed as part of this Annual Report. The Auditors of the Company have also given their certificate relating to compliance of Corporate Governance and this report is annexed to the report of Corporate Governance as is required by the Listing Agreement.

LISTINGS

The companys shares are listed in National Stock Exchange of India Ltd , Mumbai Stock Exchange Ltd and The Calcutta Stock Exchange Ltd. The company has not paid listing fee to the above Exchanges. The company has already applied for de-listing of its equity shares to Calcutta Stock Exchange Ltd and the Orders are awaited. However, Listing Fees to NSE and BSE are in arrears.

EXTRACT OF THE ANNUAL RETURN

As per the requirements of provisions of the Companies Act, 2013, the extract of the Annual Return in the prescribed Form MGT-9 is annexed hereto as Annexure 1 forming part of this report.

NUMBER OF MEETINGS OF THE BOARD.

Details of number of meetings of Board of Directors and Committees thereof and the attendance of the Directors in such meetings are provided in the Corporate Governance Report attached elsewhere in the Annual Report.

DIRECTORS RESPONSIBILTY STATEMENT.

In terms of the requirement of Section 134 (3) (c) of the Companies Act, 2013, the Directors hereby confirm:

1) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures

2) that 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 accounting year namely March 31, 2020 and of the profit / loss of the Company for that period.

3) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4) that the Directors have prepared the Annual Accounts on a going concern basis.

5) the Directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate 6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and are operating effectively.

NOMINATION AND REMUNERATION COMMITTEE AND POLICY.

As per the requirements of the provisions of the Companies Act, 2013, a Nomination & Remuneration Committee was formed by the Board of Directors consisting of

1. Sri. N. Venkatesan-Chairman(Non-Executive-Independent)

2.Smt. M.V.Suryaprabha-Member(Non-Executive -Independent)

3. Sri. R.P.Joshua - Member ( Non-Executive-Independent)

7.The said committee has been empowered and authorized to exercise the power as entrusted under the provisions of Section 178 of the Companies Act, 2013. The Company has a policy on Directors appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013 .

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 (6 ) of the Companies Act, 2013 so as to qualify themselves to be appointed / continued as Independent Directors under the provisions of the Companies Act, 2013 and the relevant Rules there under.

EXPLANATION & COMMENDS

The reports of Statutory Auditors appearing elsewhere in the Annual Report and that of the Secretarial Auditors ( annexed hereto ) are self-explanatory having no adverse comments.

PARTICULARS OF LOANS / GUARANTEE / INVESTMENTS

Details as per the provisions of Section 186 of the Companies Act, 2013 is given under Notes to Financial Statements.

PARTICULARS OF CONTRACT WITH RELATED PARTY

All the transactions of the company with related parties are at arms length and have taken place in the ordinary course of business. Provisions of Section 188 of the Companies Act, 2013 is not applicable.

MATERIAL CHANGES

There is no material changes or commitments after closure of the financial year till the date of this report.AUDITORS

a) Statutory Auditors

M/s. M. Gangadaran & Co , Chartered Accountants, the present Auditors of the Company are completing their tenure of five years and retires at the ensuing 31st Annual General Meeting of the company. In the vacancy arising out of their retirement at the ensuing 31st Annual General Meeting, the Company has to appoint another Statutory Auditors to carry out the audit on and from the Financial Year 2020-21 and the said appointment should be approved by the Shareholders.

To fill the vacancy, arising out of the retirement of M/s M.Gangadharan, the Company has identified Mr. K.Narayanasamy, Chartered Accountant ( Membership No 018956), the Proprietor of K.N.Samy & Co ( Firm Registration No 0043215) having their office at 6-B, N.R.R.Lay-out, Singanallur, Coimbatore - 641 005 and he has agreed to be appointed as Statutory Auditors of the Company. He has given his consent for the appointment as Statutory Auditors of the Company vide his letter dated 13-6-2020. They have given necessary certificate in terms of Section 139 of the Companies Act, 2013. They are entitled to be re-appointed. They have consented and confirmed their eligibility and desire to continue as Statutory Auditors of the Company. Their appointment as recommended by the Audit Committee was approved by the Board of Directors in their meeting held on 29-6-2020.

b) Cost Auditor

Not Applicable

c) Secretarial Auditor.

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies ( Appointment and Remuneration of Managerial Personnel ) Rules, 2014 , the Company has appointed Mrs. V.M.Vennila , a Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2019-20

13. AUDIT COMMITTEE

In pursuance of the applicable provisions of Section 177 of the Companies Act, 2013 a committee of Directors consisting of three Directors has been constituted as Audit Committee. The Directors who are the members of this committee are 1) Sri. N.Venkatesan - Independent Director 2) Sri. R.P.Joshua - Nominee Director 3) Smt .M.V Suryaprabha - Independent Director The Company Secretary shall act as the Secretary of the Audit Committee as well.

The Board has accepted the recommendations of the committee and there were no incidences of deviation from such recommendations during the financial year under review. The company has devised a Vigil Mechanism in the form of a Whistle Blower Policy in pursuance of the provisions of Section 177 ( 10) of the Companies Act, 2013 . During the year under review, there were no complaints received under this mechanism.

STAKEHOLDERS RELATIONSHIP COMMITTEE

In pursuance of the applicable provisions of Section 178 (5) of the Companies Act, 2013 a committee of Directors consisting of three Directors has been constituted as Stakeholders Relationship Committee. The Directors who are the members of this committee are 1) Sri. N.Venkatesan - Independent Director 2) Sri. Manoj Kumar Tibrewal - Managing Director 3) Sri. Mohanlal Tibrewal - Executive Director

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In terms of the provisions of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility Committee is to be constituted for the purpose of implementing the Corporate Social Responsibility. As on date, the Company does not come under the category of Companies who have to implement this scheme.

INDUSTRIAL RELATIONS

Not Applicable

ENERGY CONSUMPTION

Not Applicable

By Order of the Board For GANGOTRI TEXTILES LIMITED

MANOJ KUMAR TIBREWAL
MANAGING DIRECTOR
MOHANLAL TIBREWAL
EXECUTIVE DIRECTOR
Place : Coimbatore
8 Date : 29.06.2020

MANAGEMENT DISCUSSION AND ANALYSIS

IINDUSTRY STRUCTURE AND DEVELOPMENT :

The company has effected zero turnover

OPERATION OF UNITS :

Since the Lenders have sold the entire assets of the company for the non-payment of loan , there was no manufacturing operation taking place in the company during the year under review. Even after the sale proceeds of the entire assets have been adjusted by the lenders against the loan due , still the company owes more than Rs 200.00 crores as on 31-3-2020 including interest accrued but not paid. The company has no assets on hand. to sell and make the payment for the balance loan amount.

As the company is unable to meet day-to-day expenses like rent, electricity, salary , Listing Fees etc, the company has already obtain permission for liquidation after following due process.

Till then, the company is liable to function just to comply with the statutory obligations with the Registrar of Companies, Stock Exchanges etc. Hence, the company has engaged few staffs to carry out the above work.

OUTLOOK

Entire manufacturing activities have been suspended due to sale of all the units of the company by the Lenders There is no source of Income and the company is struggling for meeting day-to-day expenses and compliances. However, as the company is having huge negative Net Worth and no source of Income, the company is considering Voluntary Winding-up.

FINANCE

The Report about finance is elaborately given in the Directors Report to the Shareholders which is appended in the Annual Report

OPPORTUNITIES AND THREATS

The unexpected pandemic spread of Corona virus all over the World has affected the entire Industrial scenario and its end is unknown and uncertain , the revival of the Industry is a question mark. Since there are no opportunities as of now for our company which is in a special situation. Only, threats are more due to the loan outstanding to the banks as well as Notices received by the company from various departments as shown below.

The Audit Committee of the Board of Directors periodically review the financial positions, audit plans, internal audit reports adequacy of internal controls and risk management.

FINANCIAL PERFORMANCE AND ANALYSIS

Particulars 2019 -20 2018 -19 Change Increase (+) Decrease(-) %
Turnover 0 0
Other Income 22,00,000 7,48,665 14,51,335 193.85
Gross Revenue 22,00,000 7,48,665 14,51,335 193.85
Profit before Exceptional (1,57,666) (18,23,082) (16,65,416) (91.35)
Items and Tax
Exceptional Items 0 0 0 0
Interest 0 0 0 0
Profit before Tax (1,57,666) (18,23,082) (16,65,416) (91.35)
Depreciation 3,629 3,629 0 0
Tax relating to earlier years 0 0 0 0
Net Profit /Loss for the period (1,61,295) (18,26,711) (16,65,416) (91.17)
Joint Director General of Foreign Trade, Coimbatore 55,90,28,760 Non-fulfillment of Export Obligation in respect of 45 Licenses issued to the company
Assistant Commissioner of Customs, Chennai 1,53,77,000 Non-fulfillment of Export Obligation in respect of 6 censes issued to the company
Assistant Commissioner of Income Tax, Corporate Circle -2. The Commissioner of Income Tax, Appeal has vide his 7,30,48,152 Penalty levied u/s Section 271(1) ( c ) of the Income Tax relating to the Assessment Year 2012-13.
Orderdated 28-9-2016 upheld the Penalty. Against this,
the Company has preferred Appeal before the Tribunal,
Chennai. The Tribunal has sismissed the Appeal vide
its Order dated 26-5-2017. The Company has preferred
an Appeal before the Honble Madras High Court and
the matter is sub-judice. The Asst. Commissioner,
Corporate Circle-2 , Coimbatore has also filed a Criminal
Case against the company in the Coimbatore Courtfor
the recovery of the demand for The matter is sub-judice Rs 7,30,48,153.
The Assistant Commissioner of Commercial 20,06,535 Short levy of AST for the Assessment year 1999-2000
Taxes, Mettupalayam Road Circle, Coimbatore Income Tax Department 5,85,000 Department have preferred Appeal before I.T.A.T, Chennai against the order of C.I.T Appeal relating to the Assessment Year 2004-05
Income Tax Department 1,25,000 The Department have filed an Appeal before the Honble High Court , Chennai against Companys stand regarding sec 80 (1A)
Maharashtra Sales Tax Department 32,46,000

Issues representing reversal of Input Vat Credit relating to the

Assessment Year 2005-06 and 2006-07
M/s Think Capital 93,86,000 Winding up petition filed by them for non-compliance of certain
commitments.
M/s Vijay Fabrics 1,18,000 M/s Vijay Fabrics , Erode have obtained Decree against the company
and filed Execution Petition before the Sub-Court, Perundurai
National Stock Exchange of India Limited Mumbai 34,68,073 Due to belated submission of un-audited Financial Results for the quater ended 30.9.2015
National Stock Exchange of India Limited Mumbai 8,03,073 Due to belated submission of Financial Results under Reg. 33 relating to the year ended 31.3.2015
National Stock Exchange of India Limited Mumbai 4,18,900 Due to non - compliance of Regulation 17(1) of the SEBI (LODR) Regulations, 2015
Bombay Stock Exchange of India Limited Mumbai 4,18,900 Due to non - compliance of Regulation 17(1) of the SEBI (LODR) Regulations, 2015
National Stock Exchange of India Limited, Mumbai 9,18,210 Arrerars of Annual Listing Fee
Bombay Stock Exchange of India Limited, Mumbai 9,18,210 Arrerars of Annual Listing Fee

Since all the Units of the Company have been sold by the Lenders, presently, the Company does not own any assets / source of Income. Therefore, the Management is finding it very difficult to meet out the day-to-day expenses and also comply with various Statutory Obligations and compliances to Stock Exchanges and Registrar of Companies.

The Company has already approached the Lenders for their approval for de-listing of the shares which is pending with the Lenders . The company has already passed Special Resolution to enable it to go for Voluntary Winding-up under IBC. However, as per new Rule, no application can be filed for one year. Hence, the Company is waiting for the time when these restriction are lifted. The Management will consider Voluntary Winding-up seriously subject to necessary compliance of Rules and Procedures in this regard.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY.

The Company has appointed M/s M.Gangadharan & Co as Statutory Auditors of the Company and they audit the adequacy and the effectiveness of the internal controls prescribed by the Management and wherever necessary suggests improvements.

The Audit Committee of the Board of Directors periodically review the financial positions, audit plans, internal audit reports adequacy of internal controls and risk management.

INDUSTRIAL RELATIONS

The Industrial Relation continued to be harmonious with the available few staffs.

By Order of the Board For GANGOTRI TEXTILES LIMITED

MANOJ KUMAR TIBREWAL
MANAGING DIRECTOR
MOHANLAL TIBREWAL
EXECUTIVE DIRECTOR
Place : Coimbatore
Date : 29.06.2020