gokak textiles ltd Management discussions

Dear Members,

The Board of Directors (hereinafter referred to as "the Board") hereby submits the report of the business and operations of the Company along with the Audited Financial Statements of the Company for the Financial Year (FY) ended March 31, 2023. The consolidated performance of the Company and its subsidiary has been referred to wherever required.

Financial Results and Highlights of Performance

The Company?€™s performance, as per Indian Accounting Standards (IND AS), during the Financial Year under review is summarized as follows: ( in Lakhs)

Particulars	Standalone		Consolidated
	FY 22-23	FY 21-22	FY 22-23	FY 21-22
Revenue From Operations and Other Income	8,264.67	12,411.53	8,790.15	13,017.28
(Total Revenue)
Exceptional Income (Insurance Claim and full waiver	3,091.06	0	3,303.42	0
of interest on ICD)
Earnings before Interest, Depreciation Exceptional/	(1,779.75)	(1,265.64)	(1,069.75)	(351.94)
Extraordinary items and Taxation (EBIDT)
Profit / (Loss) after Interest and before Depreciation	(2,228.74)	(2,717.89)	(2,069.09)	(2,503.05)
Exceptional/Extraordinary items and Tax
Depreciation	503.50	540.74	608.36	645.32
Profit Before Tax (PBT)	358.82	(3,258.63)	625.97	(3,148.37)
Profit aftertax	358.82	(3,258.63)	543.18	(2,884.30)
Profit aftertax	-	-	82.79	(264.07)
Other Comprehensive Income	66.60	27.71	64.69	33.70
Total Comprehensive income attributable to owners	425.42	(3,230.92)	608.81	(2,853.54)
of the Company
Total Comprehensive income attributable to Non-	-	-	81.85	(261.13)
Controlling Interest

Note : The above figures are extracted from Standalone and Consolidated Financial Statements as per Indian Accounting Standard ("IND AS") and are prepared in accordance with the principles stated therein as prescribed by the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013 ("Act") read with relevant rules issued therein.

Management Discussion & Analysis of Financial Conditions, Results of Operations and State of Company Affairs

General Performance and Outlook

The financial year 2022-23 opened with a firm belief that the pandemic was rapidly on the wane and that India was poised grow at a fast pace and quickly ascend to the pre-pandemic growth path. The economy was expected to grow at 6.5 to 7% for FY23 despite pandemic recovery and the Russia-Ukraine war. India?€™s economic growth in FY23 has been principally led by private consumption and capital formation.

Global growth has been projected to decline in 2023 and is expected to remain generally subdued in the following years as well. Outlook: 2023-24.

The consumers in US, Europe and other major markets have cut spending on clothing following a surge in inflation after the

Ukraine war.

However, the overall Indian economy is relatively strong and is outperforming major economies; the textile sector is a notable exception. Exports which constituted 22% of industry have fallen significantly. Domestic market is flooded with cheap imported garments that have disrupted the local manufacturers.

India?€™s recovery from the pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment. The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. India has a 4% share of the global trade in textiles and apparels.

In 2022, the overall size of the home textiles & furnishing industry, including the unorganized sector, was about $18-19 billion, of which $8.2 billion was exported and remaining $10 billion was domestic consumption. About 40% of domestic consumption in home textiles was for the bed & bath category alone. Still, over 95% of domestic demand is met by the unorganized and MSME sectors. Wider definition of furnishing will also include furniture and home decor accessories and these numbers would get better.

Even though India?€™s?€™ outlook is positive for the upcoming financial are weighed down on account of a combination of a unique set of challenges expected to impart a few downside risks. This would have an impact on the export market for textile industry which has been tepid for most part of H2 of FY23. However, the inclusive and higher expected domestic consumption would compensate for the reduced exports.

Mills Division -

After the historical rise in cotton prices in the last cotton season, the new season cotton prices have reduced and remained at around INR 60-62K/candy. At the same time the yarn prices reduced disproportionately in comparison to yarn prices. On account of higher cotton prices, export of yarn, fabric and garment sector was hit badly. This has reduced in overall demand in textiles and has also affected the textile value chain.

Many of the manufacturers in textile industry have operated their facility at partial loads for the last year. The Company also had to operate the facility at partial loads incurring huge costs. Further, the quantum of job-work basis being undertaken at our facility was reduced on account of financial inviability as a result of lower yarn prices.

Knitwear Unit -

Garment unit in the mill at Gokak is running with production of various Bamboo products like towels, shawls, blankets, Cotton bed sheets, bottom wear and Canvas bags etc. Further Bamboo inner wear production has also started as new products and it is planned to start school uniforms for CBSE school for coming academic year. Company?€™s e-commerce business for online garment sale through website https://gokaktrends.com/ is getting good response for various knit and woven garments and home textile products.

Status of the Scheme of Arrangement

The Board of Directors at their meeting held on November 12, 2021 have, inter alia, approved the Scheme of Arrangement ("Scheme") under section 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules and regulations made thereunder.

The Scheme inter alia provides for Reduction of share capital and re-organization of reserves of Gokak Textiles Limited and Amalgamation (by way of absorption) of Suryoday One Energy Private Limited with and into Gokak Textiles Limited.

Upon the Scheme becoming effective, will enable the Transferee Company, i.e. Gokak Textiles Limited to consolidate the ownership of the power business and also provide reliable source of power for its textile division.

The Company had received the observation letter from BSE Limited regarding the Scheme in the month of February 2022 after that the Scheme application was filed before the Hon?€™ble NCLT, Bengaluru Bench. The matter was listed before the Hon?€™ble NCLT, Bengaluru Bench. The Hon?€™ble NCLT, Bengaluru Bench passed the order to convene the meeting of Equity Shareholders of the Company. The meeting of Equity Shareholders of the Company was held on December 26, 2022 and the Shareholders / Members gave approval to the Scheme of Arrangement.

The Scheme Petition is filed with Hon?€™ble NCLT, Bengaluru Bench and the final hearing is listed on July 18, 2023 before the Hon?€™ble NCLT, Bengaluru Bench.

The Appointed date is April 01, 2021.

The Scheme as approved by the Board and Members is available on the website of the Company at www.gokaktextiles.com

Risks and Concerns:

Risk management process includes identification of risks, its underlying dynamics, mitigation mechanism, prioritization of risk, measurement of key indicators and establishing a monitoring system. A Company-wide awareness of risk management policies and practices are being inculcated to minimize the adverse effect of risks on the operating results and the subject of management of risks is being approached in a planned and coordinated manner. Elucidation of role clarity, understanding of level of authority and reporting system is expected to help this process significantly.

The Company has identified key risks such as Market risks, Regulatory risks, Human resource risks, Commodity price risks. Key Risks include fluctuation in raw materials prices, increased global and local competition, sales channel disruption. Retaining the existing talent pool and attracting new talent. Regulatory Risks include changes in taxation regime, government policies with respect to textiles, pollution control, Industrial Relation issues & regulatory compliances.

Details of Subsidiary/Joint Ventures/Associate Subsidiary Company Gokak Power & Energy Limited (GPEL)

GPEL is engaged in generation, transmission, distribution, trading of hydro power and other renewal and non-renewal sources of energy. The significant portion of power generation is used for captive consumption of Gokak Textiles Limited, the Holding

Company.

During the year under review, GPEL has recorded gross income of Rs. 961.79 lakhs (previous year Rs. 1,255.11 lakhs) and net profit for the year ofRs. 14.50 lakhs (previous year Rs. (134.55) lakhs).

During the year under review GPEL generated 23.8 Million Units of electricity (previous year 27.2 Million Units were generated).

Details of GPEL is set out in the statement in form AOC-I, pursuant to section 129 of the Companies Act, 2013 and is attached herewith as Annexure I to this Report.

Financial Performance

The Consolidated Financial Statements of the Company and its subsidiary are prepared in accordance with Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Companies Act, 2013. The Notes to Consolidated Financial Statements are disclosed and forms part of the Consolidated Financial Statements.

Key Financial performance, Operational Information and Ratio Analysis

Key Ratio / Indicators	Standalone		Explanation for change of
	FY 2022-2023	FY 2021-2022	25% or more
Debtors Turnover (in days)	30.99	29.22	-
Inventory Turnover * (times)	4.99	6.99	Due to decrease on cost of goods sold on account of reduction in turnover without corresponding decrease in average inventory levels.
Interest Coverage Ratio	Since EBIT (before exceptional items) is negative, ratio can?€™t be set on	Since EBIT is negative, ratio can?€™t be set on	-
Current Ratio	0.57	0.81	Current liabilities increased mainly due to increase in trade creditors.
Debt Equity Ratio	Since Networth is negative (before perpetual loans), ratio can?€™t be set on	Since Networth is negative, ratio can?€™t be set on	-
Operating Profit Margin %	-28.89%	-15.04%	Due to decrease in operating turnover on account of bearish condition of textile market during the year.
Net Profit Margin % Return on Net Worth	4.27% Since Return (before exceptional items) & Net Worth (before perpetual loans) both are negative, ratio can?€™t be set on	-26.25% Since Return & Net Worth both are negative , ratio can?€™t be set on	Due to increase in the Exceptional income -

Key Ratio / Indicators	Consolidated		Explanation for change of
	FY 2022-2023	FY 2021-2022	25% or more
Interest Coverage Ratio	Since EBIT (before exceptional items) is negative, ratio can?€™t be set on	Since EBIT is negative, ratio can?€™t be set on	-
Debt Equity Ratio	Since Networth is negative (before perpetual loans), ratio can?€™t be set on	Since Networth is negative, ratio can?€™t be set on	-
Operating Profit Margin %	-19.92%	-7.92%	Due to decrease in operating turnover on account of bearish condition of textile market during the year.
Net Profit Margin % Return on Net Worth	7.12% Since Return (before exceptional items ) & Net Worth (before perpetual loans) both are negative, ratio can?€™t be set on	-24.19% Since Return & Net Worth both are negative, ratio can?€™t be set on	Due to increase in the Exceptional income -

Revenue

During the year, standalone revenue was Rs. 8,264.67 Lakhs (previous year Rs. 12,411.53 Lakhs), Consolidated revenue was Rs. 8,790.15 Lakhs (previous year Rs. 13,017.28 Lakhs).

During the year, standalone exceptional income was Rs. 3,091.06 Lakhs (previous year Rs. NIL), Consolidated exceptional income was Rs. 3,303.42 Lakhs (previous year Rs. NIL). Refer Note no. 30.1 of the Standalone Financial Statements.

During the year, standalone EBIDTA profit/(Loss) before exceptional items is Rs.(1779.75) Lakhs), previous year Rs.(1,265.64) Lakhs). Consolidated EBIDTA profit/(Loss) before exceptional items isRs.(1069.75) Lakhs), previous year Rs. (352.14) Lakhs).

Profit Before Tax ("PBT")

During the year, standalone PBT is Rs. 358.82 Lakhs (previous year Rs. (3,258.63) Lakhs). Consolidated PBT is Rs.625.97 Lakhs (previous year Rs. (3,148.37) Lakhs).

Profit/(Loss)

During the year, Standalone Net Profit is Rs. 425.42 Lakhs (previous year Rs. (3,230.92) Lakhs). Consolidated Net Profit is Rs. 690.66 Lakhs (previous year Rs. (3,114.67) Lakhs).

Fixed Assets

The standalone year-end Gross Block decreased to Rs. 29,994.50 Lakhs (previous year Rs. 30,418.41 Lakhs) mainly due to sale of plant & machinery, vehicle etc. The consolidated year-end Gross Block decreased to Rs.42,807.10 Lakhs (previous year Rs. Rs.43,220.89 Lakhs) mainly due to sale of plant & machinery, vehicles etc.

Current Liabilities

The standalone current liabilities decreased to Rs. 3,645.12 Lakhs (previous year Rs.2,853.10 Lakhs) primarily due to increase in borrowings & "trade payables". The consolidated current liabilities decreased to Rs.10,388.99 Lakhs (previous year Rs. 10,911.38 Lakhs) primarily due to decrease in "Borrowings".

Loan Funds (Secured)

During the year, standalone secured loan fund was NIL (previous year NIL). The consolidated secured loan funds decreased to Rs. NIL (previous year Rs. 1,234.90 Lakhs) primarily due to repayment of ICICI Term Loan in full during the year.

Loan Funds (Unsecured)

During the year, standalone unsecured loan funds decreased to Rs.350.00 lakhs (previous year Rs. 13,313.33 Lakhs) primarily on account of (i) the Principal amount of Rs. 10,222.27 lakhs converted into the Perpetual Loan and (ii) full waiver of Interest amount of Rs. 3,091.06 lakhs approved by ‘the Lender?€™. The consolidated unsecured loan funds increased to Rs. 7,573.48 Lakhs (previous year Rs. 20,249.11 Lakhs) primarily on account of (i) the Principal amount of Rs. 10,222.27 lakhs converted into the Perpetual Loan and (ii) full waiver of Interest amount of Rs. 3,091.06 lakhs approved by ‘the Lender?€™.

Instruments entirely equity in nature (Perpetual Loan)

During the year, standalone perpetual loan funds increased to Rs.10,922.27 lakhs (previous year Rs. NIL) primarily on account of the Principal amount of unsecured loans Rs. 10,222.28 lakhs converted into the Perpetual Loan as approved by ‘the Lender?€™ and additional Rs. 700 lakhs perpetual loan was taken during the year. The consolidated perpetual loan funds increased to Rs.

11,002.27 Lakhs (previous year Rs. NIL) primarily on account of the Principal amount of unsecured loans Rs. 10,222.28 lakhs converted into the Perpetual Loan as approved by ‘the Lender?€™ and additional Rs. 780 lakhs perpetual loan was taken during the year.

The Company entered in to an agreement where unsecured loan of Rs. 8,457.00 lakhs taken by the Company from Shapoorji Pallonji and Company Private Limited and Rs. 1,765.27 lakhs from Evangelos Ventures Private Limited has been converted into unsecured perpetual loan. The unsecured perpetual loan has no maturity or repayment date and is repayable only at the option of the Company. The distribution on this loan is non-cumulative and at the discretion of the Company, having interest rate of 11.5% for Shapoorji Pallonji and Company Private Limited and 8% for Evangelos Ventures Private Limited. As the Company does not have any repayment obligation due to the perpetual nature of the loan and distribution on this loan is discretionary, these loans have been classified as instruments entirely equity in nature and for all purposes equity. The perpetual loan will be ranked senior to only equity shares of the Company and subordinate to all the other debt. Additional perpetual loan of Rs. 700 lakhs was taken during the year from Evangelos Ventures Private Limited.

Share Capital and Preference Shares

The paid-up Equity Share Capital of the Company as on March 31, 2023 was Rs. 18,149.93 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights or ‘sweat equity shares?€™ and has not granted any stock options. As on March 31, 2023 none of the Directors of the Company hold shares or convertible instruments of the Company.

Dividend and Transfer to Reserves

In view of the losses during the current year, the Board of Directors regrets their inability to declare dividend. No amount was transferred to the reserves during the year.

Material changes and commitments

There were no material changes and commitments affecting the financial position of the Company which have occurred, between the end of the financial year of the Company to which the financial statements relate and the date of the

Legal and Regulatory

Compliance with laws and regulations is an essential part of your Company?€™s business operations. We are subject to laws and regulations in diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.

Systems and Information

Your Company?€™s operations are increasingly dependent on IT systems and the management of information. Increasing digital interactions with customers, suppliers and consumers place even greater emphasis on the need for secure and reliable IT systems and infrastructure, and careful management of the information that is in our possession.

The cyber-attack threat of unauthorised access and misuse of sensitive information or disruption to operations continues to increase. To reduce the impact of external cyber-attacks impacting our business, we have including firewalls and threat monitoring systems in place, complete with immediate response capabilities to mitigate identified threats. Our employees are trained to understand these requirements.

Internal Control Systems and their adequacy:

The Company has an Internal Control systems, which ensures that all transactions are satisfactorily recorded and reported and all assets are protected against loss from an unauthorized use or otherwise. The internal control systems are supplemented by an internal audit system carried out by independent firmsof Chartered Accountants and a periodical review by the management. The findings of such Internal Audits are addressed through suitable corrective measures. The Audit Committee of the Board meets at a regular interval and advises on significant issues raised by, both, the Internal Auditors and the Statutory Auditors. The process of internal control, systems, statutory compliance, risk analysis, information technology and its management are woven together to provide a meaningful support to the management of the business.

Batliboi & Purohit, Chartered Accountants, the statutory auditors of the Company have audited the financial statements included in this annual report and have issued report, inter alia, on the internal financial controls over financial reporting as defined under section 143 of the Companies Act, 2013.

Deposits

During the year under review, the Company has not accepted any deposits from public falling within the meaning of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

Particulars of loans, guarantees or investments

Particulars of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Directors and Key Managerial Personnel

As per the provisions of Section 152(6) of the Companies Act, 2013, Ms. Tripti Navani is due to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board of Directors recommends her re-appointment as Director of the Company.

The Shareholders of the Company at the their Annual General Meeting held on September 29, 2022 approved re-appointment ofMr.RameshR.PatilasChiefExecutiveOfficer Director for a further term of two years commencing from July 18, 2022.

Key Managerial Personnel of the Company as on March 31, 2023 were Mr. Ramesh R Patil, Chief Executive Officer & Managing Director, Mr. Rakesh M. Nanwani, Company Secretary and Mr. Vipan Kumar Sharma, Chief Financial Officer.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015 and there has been no change in the circumstances which may affect their status as Independent Directors during the year.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for attending meetings of Board/ Committee of the Company.

Independent Directors are familiarized with their roles, rights and responsibilities in the Company through presentation made to them from time to time. The details of familiarization programes conducted have been hosted on the website of the Company and can be accessed at www.gokaktextiles.com

Audit Committee of the Board of Directors

The details pertaining to the composition of the Audit Committee of the Board of Directors are included in the Corporate Governance Report which forms part of this report.

Meetings of the Board

The Board met at least once in each quarter and 4 (five) meetings of Board were held during the year and the maximum time gap between two Board meetings did not exceed the time limit prescribed under the Companies Act, 2013. The details have been provided in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR), 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as, the evaluation of the working of its

Committee(s).

The performance of the Board was evaluated by the Board on the basis of the process laid in the Charter for Performance Evaluation, the structured questionnaires for performance evaluation, parameters/criteria, such as, degree of fulfillment of key responsibility by the Board, Board Structures and Composition, establishment and delineation of responsibilities to the Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics and quality of relationship between the Board and the Management.

The performance of the committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility was evaluated by the Board on the basis of parameters/criteria such as degree of fulfillment of key responsibilities, adequacy of committee composition, effectiveness of meetings, committee dynamics and, quality of relationship of the committee with the Board and the Management.

The Board reviewed the performance of the individual Directors (without the concerned director being present).

In a separate meeting of Independent Directors, the performance of Non-Independent Directors of the Board as a whole and the performance of the Chairman were evaluated.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed and adopted a policy for selection and appointment of Director, Senior Management and their remuneration. Remuneration Policy of the Company acts as a guideline for determining, interalia,qualifications,positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal, and evaluation of the performance of the Directors, Key Managerial Personnel and Senior Managerial personnel.

Nomination & Remuneration Policy is annexed as Annexure II to this Report.

Disclosure as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure III to this Report.

Auditors and Audit Report

Statutory Auditors

Pursuant to the provisions of section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Batliboi & Purohit, Chartered Accountants (ICAI Firm Registration no. 101048W) were appointed as the Statutory of the 11 Auditors of the Company foraterm office 5(five) yearstohold th Annual General Meeting of the Company till the conclusion of the 16th Annual General Meeting of the Company.

Pursuant to the provisions of section 139 (2), M/s Batliboi & Purohit, Chartered Accountants, were eligible to be re-appointed as statutory auditors of the Company for another term of five years.

The shareholders of the Company at their 16th Annual General Meeting held (AGM) held on September 29, 2022 have appointed Batliboi & Purohit, Chartered Accountants as Statutory Auditors of the Company until the Conclusion of the 21st Annual General Meeting of the Company to be held in the year 2027 and authorized the Board to fix the remuneration.

The Audit Report of the Statutory Auditors forms part of the Annual Report. The Auditors?€™ Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory.

Cost Auditors

As per the requirements of section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Rules, 2014, the cost accounts of the Company are required to be audited by a Cost Accountant. The Board of Directors of the Company on the recommendation of the Audit Committee, appointed Mr. Mukesh R. Dekhtawala, Cost Accountant as Cost Auditor for the financial Rs. 1.50 lakhs plus out of pocket expenses. As required under year2023 2024onaremunerationof the

Companies Act, 2013 necessary resolution seeking Shareholders ratification for the remuneration to Cost Auditor is included in the Notice convening the 17th Annual General Meeting of the Company.

Secretarial Audit

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 KDSH & Associates LLP, Company Secretaries, to conduct

Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure IV to this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or

The Secretarial Audit of Gokak Power & Energy Limited, (Material Subsidiary) for the FY 2022-23 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Report of the Secretarial Auditor of Gokak Power & Energy Limited does not contain any qualification, reservation or adverse remark or disclaimer.

Corporate Social Responsibility

The provisions of the Companies Act, 2013 relating to Corporate Social Responsibility were not applicable to the Company for the FY 2022-23. The Board of Directors of the Company has, however, voluntarily constituted a Corporate Social Responsibility

Committee in compliance with Section 135 of the Act.

The Company is committed to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical.

Vigil Mechanism / Whistle Blower Policy

The Company has Whistle Blower Policy/Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The policy is also available on the website of the Company.

Extract of Annual Return

Pursuant to Section 92(3) read with Section 134 (3)(a) of the Companies Act, 2013, the Annual Return as on March 31, 2023 is available on website of the Company viz., www.gokaktextiles.com

Related Party Transactions

All related party transactions that were entered into during the financial year were on arm?€™s length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with the Promoter, Directors, Key Managerial Personnel or the designated persons which may have a potential conflict with the interest of Company at large except power purchase from the subsidiary company for captive consumption and Purchase of Solar Power from Suryoday One Energy Private Limited.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of a foreseen and repetitive nature. The transactions entered pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis.

Form AOC-2 is annexed as Annexure V to this report, pursuant to section 188 of the Companies Act, 2013. The policy on Related Party Transactions as approved by the Board is uploaded on the Company?€™s website.

Corporate Governance and Management Discussion and Analysis

The guiding principle of the Code of Corporate Governance is ‘harmony?€™ i.e balancing the need for transparency with need to protect the interest of the Company, balancing the need for empowerment at all levels with the need for accountability. A detailed report on Corporate Governance is annexed as a part of this Annual Report and the Management Discussion and

Analysis report forms part of this report.

A Certificate on compliance of conditions of Corporate Governance issued by Mr. Kiran B. Desai, Designated Partner, KDSH & Associates LLP, Company Secretaries is annexed to the Report on Corporate Governance.

A certificate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority is annexed to the Report on Corporate Governance.

Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern and Company?€™s operations in future.

Statutory Compliances

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace as per with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Internal Complaints & Committee (ICC) has been setup to redress complaints received regarding sexual harassment as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the ICC includes external member. During FY 2022-23, no complaints on sexual harassment were received.

Directors?€™ Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) and 134 (5) of the Companies Act, 2013 and based on the representations received from the operating management, the Directors hereby confirm that :

a. in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b. 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 at the end of year and of the profit or loss of the Company for that period;

c. they have taken proper and sufficient care to the best of their accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the

Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

to be.followed by the Company and that such internalfinancialcontrols are theyhavelaiddowninternalfinancial adequate and were operating effectively; and

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

Human Resources / Industrial Relations

Developments in Human Resources / Industrial Relations front:

The Company has developed a strong human resource base which helped the company to retain the employees for a very long time in view of learning opportunity, comfortable housing, very good educational facilities at minimum educational fees for the children of the Employees. The organization also has good HR Policies for employees in place.

In view of low attrition of the employees Management is encouraging employees to undertake higher responsibilities in the ladder of hierarchy so that the fresh talent hiring at the bottom of the organizational pyramid provides continuity of development at each level. The Company provides skill building trainings to employees internally. The hiring of experienced employees from outside is the last priority and first opportunity is provided to employees in line function or cross function as well.

The company has different HR processes for development of human resource which includes performance management system for appraisal of employee performance, skill development and believes in the fundamentals of Train, Retrain & Retain employees by way giving three R, Rewards, Recognition & Respect to employees.

The Management has developed very good cordial Industrial relations and has been able to carry out operations successfully despite continued challenges of market down turn, fierce competition having high input cost by achieving flexibility suitable to the requirements of business.

Change in the Nature of Business, If Any:

There is no change in the Nature of Business of the Company.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund:

Since no dividend has been declared by the Company, there was no unpaid/unclaimed dividend and accordingly the provisions of Section 125 of the Companies Act, 2013 do not apply.

Details of application made or any proceeding pending under the insolvency and bankruptcy code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year: NIL

The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof:

The Company has not undergone for valuation during the year.

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

a. The information required pursuant to Section 197 of the Act read with Rule 5 of The Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members, excluding the information on employees?€™ particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

b. Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as Annexure VI to this report.

Cautionary Statement:

Statements in the Board?€™s Report and Management Discussion & Analysis describing the Company?€™s objectives, estimates, expectations or projections, outlook etc., may be ‘forward looking statements?€™ within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to factors beyond control. Important factors that could make a difference to the Company?€™s operations include economic conditions affecting supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the government regulations, tax laws and other statutes and other factors such as litigation and industrial relations.

Acknowledgements

Your Directors acknowledge and thank all stakeholders of the Company viz. customers, members, employees, dealers, vendors, banks and other business partners for their valuable sustained support and encouragement. Your Directors look forward to receiving similar support and encouragement from all stakeholders in the years ahead.

Place : Mumbai,	For and on behalf of the Board of Directors
Date : May 26, 2023
	Ramesh R. Patil	Vinod Bhandawat
	Chief Executive Officer & Managing Director Chairman
	DIN : 07568951	DIN: 02873571

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