Gangotri Textiles Ltd Management Discussions.

INDUSTRYSTRUCTUREANDDEVELOPMENT

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 31-3-2021 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 obtained 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 2020 -21 2019 -20 Change Increase (+) Decrease(-) Percentage
Turnover 0 0 0 0
Other Income 5,00,000 22,05,194 (17,05,194) (77.32)
Gross Revenue 5,00,000 22,05,194 (17,05,194) (77.32)
Profit before Exceptional Items and Tax (3,30,744) (1,61,297) (4,92,041) (305.05)
Exceptional Items 0 0 0 0
Interest 0 0 0 0
Profit before Tax (3,30,744) (1,61,297) (4,92,041) (305.05)
Depreciation 3,629 3629 0 0
Tax relating to earlier years 0 0 0 0
Net Profit /Loss for the period (3,30,744) (1,61,297) (4,92,041) (305.05)

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. As the company is having huge negative Net Worth and no source of Income, the company is considering Voluntary Winding-up. The present situation of the Company is like a dead body waiting for final rites.

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

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 company has already become a non going concern and is waiting for voluntary winding process and the company is in such a special situation where there is no possibility of revival. 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.

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 censes 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 Honble Madras High Court and the matter is sub-judice. The High Court of Judicature at Madras vide its Order dated 25-8-2020 dismissed the Appeal. Against this, the Company is preferring an Appeal in the Honble Supreme Court of India, New Delhi 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. The matter is sub-judice.
4 Deputy Commissioner of Income Tax, TDS Circle 45,69,649 TDS Default
5 The Assistant Commissioner of Com- mercial Taxes, Mettupalayam Road Circle, Coimbatore 20,06,535 Short levy of AST for the Assessment year 1999-2000
6 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
7 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)
8 Maharashtra Sales Tax Department 32,46,000 Issues representing reversal of Input Vat Credit relating to the Assessment Year 2005-06 and 2006-07
10 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.
11 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.
12 National Stock Exchange of India Limited, Mumbai 4,18,900 Due to non-compliance of Regulation 17(1) of the SEBI (LODR) Regulations, 2015
13 Bombay Stock Exchange Ltd, Mumbai 4,18,900 Due to non-compliance of Regulation 17(1) of the SEBI (LODR) Regulations, 2015
14 National Stock Exchange of India Limited, Mumbai 9,18,210 Arrears of Annual Listing Fee
15 Bombay Stock Exchange Ltd, Mumbai 9,18,210 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. Due to Covid restrictions and pending IT cases the progress on filing for voluntary winding up under IBC is slowed down. Once the normality is returned the IT case reach finality fast action will be taken for winding up of the company. However, as per new Rule, no application can be filed for one year. Hence, the Company is waiting for the time wether 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 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

MOHANLAL TIBREWAL

Executive Director

Place : Coimbatore

Date : 29-04-2021