Gangotri Textiles Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENT

During the year under review, the company has effected zero turnover. During the year, the Company has partly reversed the provision made for Generator Tax payable to the extent of Rs 5.59 lakhs which has been shown as other Income. Since, the Lenders have already sold all the nine units under SARFAESI Act, the Company is not in a position to pay the Generator Tax now or in future

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 31-3-2022 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.

FINANCIAL PERFORMANCE AND ANALYSIS

Particulars 2021 -22 2020 -21 Change Percentage
Increase (+)
Decrease(-)
Turnover 0 0 0 0
Other Income 5,59,125 5,00,000 59,125 0.11
Gross Revenue 5,59,125 5,00,000 59,125 0.11
Profit before Exceptional Items (2,74,698) (3,27,115) (52,417) 0.16
and Tax
Exceptional Items 0 0 0 0
Interest 0 0 0 0
Profit before Tax (2,74,698) (3,27,115) (52,417) 0.16
Depreciation 3,629 3,629 0 0
Tax relating to earlier years 0 0 0 0
Net Profit /Loss for the period (2,78,327) (3,30,744) (52,417) 0.16

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 has brought a Special Resolution to voluntarily wind-up the affairs of the Company before the share holders in the Annual General Meeting held on 27.9.2019 and the same was approved by the majority of the shareholders.

FINANCE

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

OPPORTUNITIES AND THREAT

There are no opportunities as of now for our company for revival . Only, threats are more due to the loan outstanding to the banks as well as Notices / demands received by the company from various departments as shown below.

S.No Demand Received from Amount in Rs. Reason
1 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.
2 Assistant Commissioner of Customs, Chennai 1,53,77,000 Non-fulfillment of Export Obligation in respect of 6 Licenses issued to the company.
3 Assistant Commissioner of Income Tax, Corporate Circle -2. 7,30,48,152 Penalty levied u/s Section 271(1) ( c ) of the Income Tax relating to the Assessment Year 2012-13.
The Commissioner of Income Tax, Appeal has vide his Order dated 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 Hon’ble Madras High Court.
The High Court of Judicature at Madras vide its Order dated 25-8- 2020 dismissed the Appeal. Against this, the Company has preferred an Appeal in the Hon’ble Supreme Court of India, New Delhi. The Hon’ble Supreme Court of India did not admit Special Leave Petition (SLP). The company is considering filing review petition in the Hon’ble Supreme Court of India. Hence this amount has not been provided in the books of account.
To that extent the loss is understated. The Asst. Commissioner, Corporate Circle-2, Coimbatore has also filed a Criminal Case against the company in the Coimbatore Court as punishment for non payment of demand for Rs 7,30,48,153. Against this, the company has preferred an Appeal in the Hon’ble Madras High Court.
4 The Assistant Commissioner of Commercial Taxes, Mettupalayam Road Circle, Coimbatore 20,06,535 Short levy of AST for the Assessment year 1999-2000
5 Income Tax Department 5,85,000 The 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
6 Income Tax Department 1,25,000 The Department have filed an Appeal before the Hon’ble High Court , Chennai against Company’s stand regarding sec 80 (1A)
7 Maharashtra Sales Tax Department 32,46,000 Issues representing reversal of Input Vat Credit relating to the Assessment Year 2005-06 and 2006-07
8 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
9 National Stock Exchange of India Limited, Mumbai 34,73,073 Due to belated submission of un-audited Financial Results forthe quarter ended 30-9-2015. The Appellate Authority have confirmed the penalty of Rs 34,73,073.
10 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. The Appellate Authority have confirmed the penalty at 6,68,073.
11 National Stock Exchange of India Limited, Mumbai 4,18,900 Due to non-compliance of Regulation 17(1) of the SEBI (LODR) Regulations, 2015
12 Bombay Stock Exchange Ltd, Mumbai 4,18,900 Due to non-compliance of Regulation 17(1) of the SEBI (LODR) Regulations, 2015
13 National Stock Exchange of India Limited, Mumbai 17,22,800 Arrears of Annual Listing Fee
14 Bombay Stock Exchange Ltd, Mumbai 17,22,800 Arrears 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, due to pending criminal case against the company, filing of Winding-up Petition under Indian Bankruptcy Code (IBC) is being delayed. Once all the conditions are fulfilled, the Company will promptly file the Winding-up Petition under IBC in the appropriate court.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY.

The Company has appointed M/s K.N.Swamy& 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
Place : Coimbatore
Date : 14-05-2022 MOHANLAL TIBREWAL
Executive Director