Gokaldas Exports Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the Eighteenth Annual Report on the business and operations of the Company ("Gokaldas Exports Limited" or "GEX" or "Company"), together with the audited standalone and consolidated financial statements for the Financial Year ended March 31, 2021.


Your Companys financial highlights for the year ended March 31, 2021 are summarized below: , . .

(Rs in crores)




2020-21 2019-20 2020-21 2019-20
Revenue from operations 1,209.32 1,367.91 1,210.73 1,370.95
Other Income 12.08 16.20 12.21 16.28
Profit before interest, tax and depreciation 112.70 123.25 113.70 122.03
Profit before tax 26.30 32.36 26.62 30.39


The year 2020-21 was challenging, yet quite eventful. The impact of the COVID-19 was being felt by all businesses around the world and the year passed by with the Company addressing a broad range of interrelated issues spanning from customer relationship management to employee safety, shoring-up cash, liquidity and reorienting operations. Your Company was severely tested by COVID-19 when closures of stores in major markets and enforced factory shutdowns in India and other producing countries resulting in a volatile order flow, disrupted supply chain claiming a toll on the financial health of most companies. As we exited FY2020-21, we also witnessed the second wave of pandemic and its acute impact on thousands of lives and the businesses.

On the business front, your Company weathered the pandemic well amid persisting challenges starting from order cancellations and realignments to payment deferral and operations closure. Added to this, there was pricing pressure as global orders were far lower than global supply. In response, we managed to cut costs significantly, rationalized our capacity, streamlined operations through sheer agility and ramped up our order book.

On a consolidated basis, revenue for the year was Rs 1223 crores, down by 11.8% over the previous year. Despite the impact of COVID-19 on the business, your Company contained YoY exports revenue decline to 8.8%, In contrast, Indias apparel exports registered a decline of 17.4% in FY2020-21 compared to FY2019-20.

During this pandemic impacted year, your Company streamlined its operations to become more efficient, reduced unproductive costs and ensured better utilization of available capacity. Due to COVID-19 impact on its customers, the Company had to provide for an expected credit loss of Rs 8.1 crores. Your Company generated EBITDA of Rs 114 crores compared to Rs 102 crores in FY2019-20 (excluding exceptional items), giving a YoY growth of 11%.

Your Company has delivered an EBITDA margin of 9.3% compared to 7.4% in the FY2019-20. It has delivered a net profit after tax of Rs 26 crores and on a like-for-like basis, it has grown by 154% compared to the FY2019-20 as the net profit excluding exceptional items was Rs 10.4 crores in FY2019-20. This was certainly a creditable performance considering the continuing COVID-19 challenges.

Your Company has given a better return on capital employed through a superior working capital management and also managed to reduce the net debt by Rs 38 crores during the year keeping the net debt at Rs 166 crores compared to Rs 204 crores as of March 31,2020. The net debt to equity is 0.57 in FY2020-21 compared to 0.90 in FY2019-20. Your Companys long-term strategic objective is to create value for its shareholders, employees, business partners by delivering quality products, excellence in the customer relationship and will continue to remain focused on these initiatives for sustainable and profitable growth.


It is one year since the COVID-19 was declared as a global pandemic. The impact of COVID-19 and its effect is far from over and is still being felt across the world. The Global textile industry is witnessing a significant change and is adapting to this new reality. On the consumer front, in-store spending was depressed over the year and a clear shift of preference towards online purchases was evident. The fashion brand/ retailers were forced to make key business model decisions centered on adapting digital capabilities to improve their Omni-channel presence.

Indian textile industry was also impacted due to the COVID-19 pandemic. The industry faced a range of issues from complete manufacturing shutdown, cancellation of orders and logistical disruptions. However Indian textile industry is poised to benefit from the structural changes both on the global and domestic front. On the global front, increased attention on forced labour in Xinjiang province of China by the major countries like US & others and restriction on imports of the cotton products using the raw material originated from this region can hugely benefit Indian cotton value chain. In addition, steps like the recent German Supply Chain Due Diligence Act, effective January 1, 2023 and the potential Supply chain legislation at the EU level will only enhance the focus of sourcing towards large compliant companies. On the domestic front, the stable policy regime like the recent announcement by the Central Government to continue the Rebate of State and Central Taxes and Levies (RoSCTL) up to the year 2024, the upcoming centres textile PLI scheme for the MMF & Synthetics and the incentives offered by the various Indian states to attract the textile investment will kick start the virtuous cycle of growth.


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


No amount is transferred to the Reserves.


Your Company has 3 subsidiary companies. The names of these companies are as follows:

i. All Colour Garments Private Limited

ii. SNS Clothing Private Limited

iii. Vignesh Apparels 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 as Annexure I to this report, In view of the above 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 at the registered office of your Company. Investors who want to have a copy of the above may write to the Company Secretary to the registered office.


No Material Changes or commitments have occurred between the end of the Financial Year and the date of this Report which affects the financial statements of the Company in respect to the reporting year.


Pursuant to the Companies (Indian Accounting Standards) Rules, 2015, your Company has to comply with Indian Accounting Standards (IndAS) from April 01, 2017. Accordingly, the financial statements of the Company for the Financial Year 2020-21 have been prepared as per IndAS.


The credit rating agency ICRA has assigned the credit rating as BBB (Outlook: Stable reaffirmed) for long term debt and A3+ (A Three Plus) for short term borrowings as on date of this report.


Your Company is holding 99.97% stake in the Subsidiary Companies. All the subsidiaries are wholly owned Subsidiary Companies


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.


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 no employee stock options were converted into equivalent number of equity shares. As required under SEBI (Share Based Employee Benefits Regulations, 2014), a disclosure is given as Annexure II to this report.


At the General Meeting via Postal Ballot held on August 26, 2018, the shareholders approved the Restricted Stock Unit - 2018 Scheme (RSU). Pursuant to the approval, the Board has been authorized to offer, issue and allot stock options to eligible employees of the Company and its subsidiary Companies under RSU 2018. The maximum number of shares under the RSU 2018 shall not exceed 21,33,040 equity shares.

Out of this, your Company has granted 21,33,040 stock options to the employees of the Company under RSU. During the year 70,000 restricted stock options were converted into equivalent number of equity shares.

The relevant disclosures pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 is given as Annexure II to this report.


Consequent to conversion of stock options into equity shares, your Companys Paid Up equity share capital has gone up to Rs 21,44,78,315 as on March 31, 2021 from Rs 21,41,28,315 as on March 31,2020.


The members of the Company at the 17th Annual General Meeting approved the re-appointment of Mr. Sivaramakrishnan Vilayur Ganapathi (holding DIN 07954560) as the Managing Director of the Company for a period of three years effective from October 3, 2020 to October 2, 2023.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company Mr. Mathew Cyriac (DIN: 01903606), Non-executive Director retires by rotation at forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The brief resume and other details as required under the Listing Regulations are provided in the Notice of the 18th Annual General Meeting of the Company.

In terms of Section 203 of the said Act, the following were designated as Key Managerial Personnel of your Company by the Board:

• Mr. Sivaramakrishnan Ganapathi - Managing Director

• Mr. Prabhat Kumar Singh - Whole time Director

• Mr. Sathyamurthy A - Chief Financial Officer

• Ms. Shrithee M S - Company Secretary

Mr. Sameer Sudarshan R. V. - Company Secretary and Compliance Officer has resigned the office with effect from close of business hours on November 10, 2020 and Ms. Shrithee M S has been appointed as the Company Secretary and Compliance Officer on November 11, 2020.


All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(7) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).


Pursuant to the provisions of the Companies Act, 2013 and Regulations 25 of the Listing Regulations, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committee. Each Board member completed a questionnaire providing feedback on the functioning and overall engagement of the Board and its committees on various parameters such as composition, execution of specific duties, quality, quantity and timeliness of flow of information, deliberations at the meeting etc. The Directors were also asked to provide their valuable feedback and suggestions about the over all functioning of the Board and its committees.


During the year, Seven Board Meetings were held on May 6, 2020; June 26, 2020; July 15, 2020; July 29, 2020; September 25, 2020; October 22, 2020 and January 29, 2021. The Particulars of Directors & their attendance during the financial year 2020-21 has been disclosed in the Corporate Governance Report forming part of this Annual Report.

For details of the Committees of the Board, please refer to the Corporate Governance Report.


The Company has the following committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

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


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, 2021, the applicable Indian 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 as at March 31, 2021 and of the profit of the Company for that period;

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 shall ensure that the Internal Control is adequate and robust;

V) The annual accounts are prepared 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.


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: Environment:

1. HIGG FEM 3.0 certification and validation by third party completed in a phased manner for all our units. The Higg Index measures environmental (energy/ greenhouse gas emissions; water; wastewater/effluent; air emissions; waste; and chemicals management) and social impacts across the life cycle of an apparel product. This will lead to consistent monitoring and reduction of environmental impact across units.

2. ZLD project (Zero Liquid Discharge) running successfully, wherein more than 90% of waste water is recycled and reused for the laundry application.

3. Change over to Low liquor ratio (1:5) laundry machines and E-Flow machines to reduce water & chemical consumption.

4. Rain water harvesting tanks have been augmented to increase ground water recharge.

5. We use only approved or authorised ZDHC nonhazardous chemicals for laundry and printing processes, which are sourced from suppliers who are registered with ZDHC.

6. Company has invested in upgrading the machineries that will enhance our Productivity, Quality and ultimately save more on energy, water and chemical consumption.

7. Installed roof top solar panel at one of our units and achieved CO2 offset of 385 tonnes/annum.

8. Replaced florescent lights across factories with LED lights for reducing energy consumption, leading to carbon footprint reduction. Health & Safety:

COVID-19 Management

1. Employee health at workplace was continuously monitored and self-declaration on health obtained from employees, as per Government guidelines.

2. Distributed PPE Kits to Government departments & face mask to employees and family members.

3. Social distancing, temperature screening, awareness creation on hygiene and hand sanitizing done for employees at all units.

4. Disinfection of all common areas and wet mopping of factory floor done at regular intervals.

5. Realigned workstation to maintain adequate space between workers.

6. COVID-19 Task Force constituted at every unit to monitor preventive action, report instances, undertake remedial action including attending to medical emergencies.

7. Factories and Offices are disinfected every weekend. There is an established protocol for contact tracing, in the event of a positive case.

8. Provided medical care in the form of Oxygen Concentrators, Ambulance Service & Hospital admission support to employees and their family during the second wave.

9. In our onsite vaccination camps we have vaccinated more than 64% of our employees by actively partnering with Govt. of Karnataka and local Public Health Centre.

Other Health & Safety Initiatives

1. Achieved Zero Reportable accidents at all our factories.

2. Conducted periodical training and awareness to employees on Health & Safety, Personal Hygiene.

3. Improved ventilation at all factories to enhance ambient air for promoting healthy working environment.

4. Enhanced ergonomic standards for workstation to reduce Musculo Skeletal Disorders among workmen.

5. Enhanced CCTV coverage area at all factories to strengthen our surveillance system.

6. Upgraded Fire Hydrant with sprinkler system and Centralised Fire Control Panel to enhance fire safety.

7. Augmentation of existing STP, Installation and commissioning of new STPs to ensure water is scientifically treated and reused in order to reduce environmental impact.

Employee Engagement:

1. HER (Health Enabled Returns) projects - Health & Finance implemented at some of our factories to enhance employee awareness on personal health and personal finance.

2. PACE (Personal Advancement and Career Enhancement) implemented across 10 units for women employees.

3. WCP (Workplace Co-operation Program) is being implemented at factories to enhance cooperation and communication between employees and management.

4. To empower women, Women Supervisor Development Program started in factories. This program aims to identify, train and handhold potential women workers for taking up supervisory role, thereby promoting gender equity among supervisory staff.

5. Existing supervisors have been trained on latest technical trends and behavioural requirements for the role through an integrated program. This will enhance productivity and improve harmony at workplace.

6. Skill enhancement programs are undertaken and individual employee skills are evaluated and enhanced to next level, through continuous on the job training and classroom sessions.

7. A unique gamified program titled "Sankalpa" driven across factories where employees are identified and rewarded for exhibiting right behaviours at workplace. This has resulted in increased overall productivity and improved employee morale.

8. The organisational social policy and process has been upgraded in alignment with SLCP (Social & Labour Convergence Program) to improve employee wellbeing and social equity.


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 (SEBI) Corporate Governance practices. Your Companys Corporate Governance Compliance Certificate is in line with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is given along with the Corporate Governance Report.


In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on the Business Responsibility Report, describing the initiatives taken by the Company from an environmental, social and governance perspective, during the year under review, forms part of this Annual Report.


Management Discussion and Analysis Report is given separately, forming part of this Annual Report and is in accordance with the requirements laid out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015


The equity shares of the Company are listed on the BSE 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 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.



Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the said section. The Audit committee of the Company has proposed on August 8, 2018, the Board of Directors of the Company has recommended the appointment of MSKA & Associates, Chartered Accountants (ICAI Firm registration number: 105047W) as statutory auditors of the Company. MSKA & Associates, Chartered Accountants (ICAI Firm registration number: 105047W) will hold office for a period of five consecutive years from the conclusion of 15th Annual General Meeting of the Company till the conclusion of 20th Annual General Meeting to be held in the year 2023, subject to the approval of shareholders of the Company.

Pursuant to the amendment to Section 139 of the Companies Act, 2013 effective from May 07, 2018, ratification by shareholders every year for the appointment of Statutory Auditors is no longer required and accordingly, the Notice of ensuing 18th Annual General Meeting does not include the proposal for seeking Shareholders approval for ratification of Statutory Auditors appointment.

No qualification, adverse remarks or disclaimer made by the Statutory Auditors with regards to the financial statements for the Financial Year 2020-21.

The statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.


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, FCS: 5553) to undertake the secretarial audit of the Company. Your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

The Secretarial Audit Report is given as Annexure III to this Report. The Report does not contain any qualification, reservation or adverse remark.

Also the Secretarial Audit Report issued under Regulation 24A of SEBI Listing Regulations is given in Annexure to this Report.

As required under SEBI Listing Regulations, your Company has obtained a certificate from the Practicing Company Secretary that none of the Directors of the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors by MCA/Statutory Authorities. The said certificate is forming part of this Report.


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.


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


Not Applicable


Foreign Exchange earned : Rs 90,280.39 Lakhs

Foreign Exchange outgo : Rs 18,240.32 Lakhs


All related party transactions, that were entered into during the Financial Year were on an arms 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 large.


In terms of Section 134 of the Companies Act, 2013, the particulars of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013 is detailed in Notes to Accounts of the Financial Statements.


Your Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment and Nondiscrimination at work place in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and 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, 1 complaint of sexual harassment was received and closed.


Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Company has placed a copy of the Annual Return as at March 31, 2021 on its website at www.gokaldasexports.com. By virtue of amendment to Section 92(3) of the Companies Act, 2013, the Company is not required to provide extract of Annual Return (Form MGT-9) as part of the Boards report.


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.


In terms of the provisions of Section 178(3) of the Act and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination & Remuneration Committee is responsible for formulating criteria for determining qualification, positive attributes and independence of a Director. The Nomination & Remuneration Committee 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 the policy is available on the Companys website www.gokaldasexports. com.


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

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have formulated a policy on Risk Management which can be accessed from the website of the Company at www. gokaldasexports.com.


Information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure IV to this report.

The information required pursuant to Section 136(1) of the Companies Act, 2013, the Report of the Board of Directors is being sent to all the shareholders of the Company excluding statement prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Statement is available for inspection by the shareholders at the registered office of the Company.


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

The Corporate Social Responsibility Policy, as formulated by the Corporate Social Responsibility Committee and approved by the Board of Directors is available on the website of the Company at www.gokaldasexports.com

During the year under review, the Company has spent Rs 9.05 lakhs (2%) of the average qualifying net profits of last three Financial Years on CSR activities as per Section 135 of the Act, duly approved by the CSR Committee of the Board.

The annual report on Corporate Social Responsibility (CSR) activities for the FY2020-21 as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided as Annexure V attached to this Report.


Your Company has a Vigil mechanism and has established a Whistle Blower Policy, as per the requirement of the Companies Act, 2013 and the Listing Obligations and Disclosure Requirements Regulations, 2015, to enable all employees and the Directors to report in good faith any violation of the policy. The Audit Committee of the Board oversees the functioning of Whistle Blower Policy. Your Company has disclosed the details of revised Whistle Blower Policy on its website www. gokaldasexports.com


Your Company has adopted a code of conduct for prevention of "insider Trading" as mandated by the SEBI and same is available on the website of the Company www. gokaldasexports.com.


Your Company has laid down a Code of Conduct Policy which can be accessed on the Companys website: www. gokaldasexports.com


a) Your Company has complied with the applicable Secretarial Standards relating to Meeting of the Board of Directors and General Meetings during the year.

b) There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

c) There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.


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
For Gokaldas Exports Limited
Place: Bengaluru Sd/-
Date: July 30, 2021 Richard B. Saldanha