To the Members,
Your Directors' present the 18th (Eighteenth) Board's Report
together with the Audited Statement of Accounts (Standalone & Consolidated) for the
year ended 31st March 2023.
1. FINANCIAL RESULTS
The Standalone and Consolidated financial highlights of your Company
for the year ended 31st March 2023 are summarized as follows:
(Rs. In Crores)
Financial Results |
Standalone |
Consolidated |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
Revenue from Operations / Other Income |
10.01 |
83.61 |
10.01 |
83.61 |
EBITDA |
(0.89) |
(0.56) |
(0.89) |
(0.56) |
Finance cost |
2.43 |
10.95 |
2.43 |
10.95 |
Depreciation |
0.71 |
2.98 |
0.71 |
2.98 |
Profit / (Loss) / before Tax |
(4.03) |
(14.49) |
(4.03) |
(14.49) |
Exceptional Item -Expense (VRS to workmen) |
- |
0.75 |
- |
0.75 |
Profit/(Loss) after Exceptional item |
(4.03) |
(15.24) |
(4.03) |
(15.24) |
Tax expense / (Credit) - including Deferred tax |
(3.49) |
(1.19) |
(3.49) |
(1.19) |
Profit / (Loss) for the year |
(0.54) |
(14.05) |
(0.54) |
(14.05) |
Profit / (Loss) for the year from discontinued operations |
(17.42) |
|
(17.42) |
|
Other Comprehensive Income (net of Tax) |
(1.17) |
0.20 |
(1.17) |
0.20 |
Total Comprehensive loss for the year |
(19.13) |
(13.85) |
(19.13) |
(13.85) |
2. FINANCIAL PERFORMANCE
Company's cotton yarn manufacturing operations from its Aluva, Kerala
Plant was stopped wef. 13.6.2022 on account of unsustainable wages, paucity of working
capital and steep increase in cotton prices, which resulted in lower capacity utilisation
and making the operations unviable. Pursuant to this, company has executed a Memorandum of
Settlement with workmen and employees for severance compensation payable.
Consequently, Revenue from operations till its permanent stoppage
during 1st Quarter of Fy 2022-23 was only of Rs 10.01 crores as against Rs
83.61 crores achieved during previous year from full year of operations. Loss at EBITDA
level during the 1st quarter of current financial year was of Rs 0.89 crores as
against Rs 0.56 crores Loss of EBITDA during the previous financial year. Loss for the
year before Tax was at Rs 21.46 crores (including Loss post discontinuance of operations
of Rs 17.43 crores) as against the Loss of Rs 15.24 crores incurred in the previous year.
Total Loss post tax for FY 2022-23 was Rs 19.13 crores as compared to the Loss after tax
of Rs 13.85 crores in FY 2021-22.
3. STATUS OF DISPOSAL OF PROPERTY PLANT AND EQUIPMENT
As mentioned in the previous report Lenders have classified accounts of
your company as NPA as at 31.3.2021 due to default in debt servicing and your Board has
taken effective steps to sell its assets for settlement of Bank dues, workers settlement
and other creditors.
Pursuant to Shareholders approval in the General Meeting held on 30th
September 2022 authorising Board of Directors to sell, lease, or otherwise dispose of the
whole or substantially whole of the undertaking including disposal of land, building,
plant and machinery of the company either together or in piece meal and as per NOC issued
by company's Bankers, part of Property, Plant and Machinery were sold during year and the
sale proceeds of Rs. 32 crores were utilised to repay dues to Bankers to that extent.
Your Board had identified potential buyer(s) and signed a Memorandum of
Understanding (MOU), subject to successful completion of legal and technical due
diligence, for sale of entire factory Land of 28.13 acres (after demolition of building
thereon) for a Sale consideration of Rs. 92 crores,. As per the terms of MOU, the
potential buyer had successfully completed "Title search / Legal Scrutiny" and
is carrying out technical due diligence. Sale is expected to be completed by 30th
September 2023. From the sale proceeds, after paying balance dues of Bankers, Terminal
dues / settlement to the workmen and employees, and payment to Trade creditors and other
liabilities, company expects surplus funds. Going forward, with debt free status and
estimated surplus funds from sale of assets, Company intends to carry on outsourcing of
cotton yarn manufacturing / trading in cotton yarn or any other business as permitted in
Object Clause
in the Memorandum of Association for better prospects and the best
interest of the company.
4. DIVIDEND
In view of the losses for the financial year ended 31st March
2023, the Board of Directors regret their inability to recommend any dividend for the year
2022-23.
5. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements, prepared in accordance with the
applicable Indian Accounting Standards issued by the Institute of Chartered Accountants of
India and Regulation 33 of the SEBI (LODR) Regulations, 2015 together with Auditors
Report. The Auditors report on the consolidated financial statements also attached. The
same is with unmodified opinion (unqualified).
6. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANY
The Company did not have any Subsidiary or Joint Venture during the
financial year. The Company has one Associate Company, Patspin India Limited.
7. EXTENSION OF PLEDGING OF SHARES
During the year under review, Patspin India Limited (PIL) has gone for
a Resolution Plan pursuant to RBI Prudential Framework for Resolution of Stressed Assets
circular of 7th June 2019 and the Lenders have approved the same. As per the
approved terms of Resolution Plan, balance working capital facilities of Rs. 66.68 crores
has been converted into working capital term loan (WCTL) with continuation of pledge 51%
of its holdings in PIL, being 72,86,405 equity shares of Rs. 10 each in favour of PIL
Lenders. Accordingly, your company has extended pledge on 07.07.2023 with the Lead Bank,
M/s. Central Bank of India.
8. MANAGEMENT DISCUSSION AND ANALYSIS
As mentioned in the Financial Performance above, the manufacturing
operations of the company has been suspended with effect from 13.6.2022 and the company
now intends to carry on outsourcing of cotton yarn manufacturing / trading in cotton yarn
or any other business as permitted in Object Clause in the Memorandum of Association.
Normal Business challenges are expected to remain as the Company operates in a competitive
sector. The Company has adequate systems of Internal Controls commensurate with its size
and operations to ensure orderly and efficient conduct of business. These controls ensure
reduction and detection of fraud and error, adequacy and completeness of the accounting
records and timely preparation of reliable financial information.
With the reasons above, the Management Discussion and Analysis Report
on the operations of the Company, as required under the SEBI (LODR) Regulations, 2015 is
not separately attached.
9. PUBLIC DEPOSITS
The Company does not have "Deposits" as contemplated under
Clause V of the Companies Act 2013. Further, the company has not accepted any such
deposits during the year ended 31st March 2023.
10. CORPORATE GOVERNANCE
The Company has taken the requisite steps to comply with the
recommendations concerning Corporate Governance.
A separate statement on Corporate Governance together with a
certificate from the Practicing Company Secretary of the Company regarding compliance of
conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
11. DIRECTORS AND KEY MANAGERIAL PERSONS During the year under
review there is no change in the composition of the Board of Directors and the Key
Managerial Personnel.
Pursuant to the requirements of the Companies Act, 2013, Shri. Umang
Patodia (DIN 00003588), retires by rotation at the ensuing Annual General Meeting and,
being eligible, offers himself for re-appointment. The Board recommends the appointment /
re-appointment of the above Director for approval. The brief details of the Director
proposed to be appointed / re-appointed, as required under Regulation 36 of SEBI Listing
Regulations, are provided in the Notice of Annual General Meeting.
12. KEY MANAGERIAL PERSONNEL
Shri B.K. Patodia, Managing Director, Shri. Arun S Mohan, Chief
Financial Officer and Shri E.K.Balakrishnan, Company Secretary were the Key Managerial
Personnel of your Company, in accordance with the provisions of Section 203 of the
Companies Act 2013 during the year under review.
Shri. Arun S Mohan, Chief Financial Officer have resigned from the
services of the company w.e.f. 31.5.2023 and in his place Shri. M Achuthan was appointed
as Chief Financial Officer w.e.f. 1.6.2023
13. NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 5 (Five) times during the financial year
2022-23. The details of the meetings of the Board of Directors of the Company convened and
attended by the Directors during the financial year 2022- 23 are given in the Corporate
Governance Report which forms part of this Annual Report.
14. MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met once during the Financial Year under
review. The Meeting was conducted without the presence of the Non-Independent Directors
and members of management.
15. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuing
compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the
Companies Act, 2013 in the preparation of Annual Accounts for the year ended on 31st
March, 2023 and state that:
1. in the preparation of the Annual Accounts, the applicable Indian
Accounting Standards have been followed and there are no material departures from the same
2. 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 your company as at 31st March 2023
and of the profit or loss of the company for that period;
3. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of your company and for preventing and
detecting fraud and other irregularities;
4. 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 that such internal financial controls are adequate and are
operating effectively; and
6. the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
16. BOARD EVALUATION
Pursuant to the provisions of Companies Act and Listing Regulations,
annual evaluation of the Board, the Directors individually as well as working of its
constituted committees has been carried out from time to time.
17. FAMILIARISATION PROGRAMME FOR DIRECTORS At the time of
appointing a Director, a formal letter of appointment is given, which inter alia explains
the role, function, duties and responsibilities expected as a Director of the Company.
This is to provide insights into the Company to enable the Independent Directors to
understand its business in depth, to familiarize them with the process, business and
functionaries of the Company and to assist them in performing their role as Independent
Directors of the Company. The Director is also explained in detail the Compliance required
under the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and other relevant
regulations and affirmation taken with respect to the same.
The Chairman and the Management has also one to one discussion with the
Directors to familiarize with the company's operations.
18. AUDITORS
M/s. L.U.Krishnan & Co. (Regn.No.001527S) Chartered Accountants,
Chennai were appointed as the Auditors of the Company for second term of 5 years at the 17th
Annual General Meeting (AGM) held on 30th September, 2022 to hold office
till the conclusion of the 22nd AGM of the Company to be held in the year 2027.
The Auditors' Report for FY 2022-23 does not contain any qualifications, reservations or
adverse remarks.
19. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules made there under, the Company has appointed Shri. MRL Narasimha (C.P No. 799),
Practicing Company Secretary to undertake the Secretarial Audit of the Company.
Secretarial Audit Report issued by Shri. MRL Narasimha, Practicing
Company Secretary in Form MR-3 forms part to this report Annexure I. The said report does
not contain any observation or qualification requiring explanation or adverse remark
20. COST AUDITORS
Pursuant to Section 148 of the Act read with Rule 14 of the Companies
(Cost Records and Audit) Amendment Rules, 2014, the cost audit records of the Company are
required to be audited. The Directors, on the recommendation of the Audit Committee,
appointed M/s. Hareesh K.N and Associates, Cost Accountants (Firm Reg. No. 101974), to
audit the cost accounts of the Company for the FY ended 31st March, 2023, on a
remuneration as mentioned in the Notice convening the 17th Annual General Meeting for
conducting the audit of the cost records maintained by the company.
In terms of the Companies (Cost Records and Audit) Amendment Rules,
2014 published vide GSR No. 01(E) on 31st December 2014 issued by the Central
Government in terms of the powers conferred by Section 148 of the Companies Act, 2013, due
to the reduction of the turnover from the auditable product as per the previous audited
financial statement and also there is no manufacturing operations being held in the
company, the cost audit is not mandatory during the next financial year 2023-24. Hence
Board has not recommended the appointment of Cost Auditor for the next FY 2023-24.
21. EXTRACT OF ANNUAL RETURN
Pursuant to provisions of Section 134(3)(a) and Section 92(3) of the
Companies Act, 2013, read with Rule 12 of the Companies( Management and Administration)
Rules, 2014, the draft of the Annual Return of the company for the Financial Year 31st
March 2023 is uploaded on the website of the company and can be accessed at the
www.gtntextiles.com
22. RELATED PARTY TRANSACTIONS
All transactions entered with related parties were on arm's length
basis and in the ordinary course of business.
There were no materially significant transactions with the related
parties during the financial year and were not in conflict with the interest of the
company. Thus, a disclosure in Form AOC -2 in terms of Section 134 of the Companies Act
2013 is not required. All related party transactions are placed before the Audit Committee
as also before the Board for approval.
The Board of Directors, as recommended by the Audit Committee, adopted
a policy to regulate transactions between the Company and its Related Parties, in
compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder
and the Listing Regulations. This Policy has been uploaded on the website of the Company.
23. LOANS & INVESTMENTS
Details of loans, guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial
Statements forming part of this report.
24. CREDIT RATING
Lenders have classified account as sub-standard w.e.f. 31.3.2021 due to
default in debt servicing and have accepted company's proposal to sell the assets and
repay their entire dues and close the account by 30.9.2023. In view of this, there is no
change in Company's external Long term and Short-term credit ratings during the FY
2022-23.
25. RISK MANAGEMENT
The company has laid down a well-defined risk management mechanism
covering the risk mapping and trend analysis, risk exposure, potential impact and risk
mitigation process. A detailed exercise is being carried out to identify, evaluate, manage
and monitor business risks. The Audit Committee and the Board periodically review the
risks and suggest steps to be taken to manage/ mitigate the same through a properly
defined framework.
During the year, a risk analysis and assessment was conducted, and no
major risks were noticed, which may threaten the existence of the company.
26. VIGIL MECHANISM / WHISTE BLOWER POLICY
The company has a Vigil Mechanism / Whistle Blower Policy to report
genuine concerns or grievances. The Vigil Mechanism (Whistle Blower Policy) has been
posted on the company's website (www.gtntextiles.com).
27. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Even though the provisions of Section 135 (5) of Companies Act, 2013
regarding Corporate Social
Responsibility are not yet attracted, the company has been, over the
years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily
which goes much beyond mere philanthropic gestures and integrates interest, welfare and
aspirations of the community with those of the Company itself in an environment of
partnership for inclusive development.
28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under section 134 (3) (m) of the Companies Act,
2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is as follows:
a) Conservation of Energy
The manufacturing operations of the company has been suspended with
effect from 13.6.2022 and the company now intends to carry on outsourcing of cotton yarn
manufacturing / trading in cotton yarn or any other business as permitted in Object Clause
in the Memorandum of Association, and hence it does not consume heavy electricity
b) Technology absorption
The Company propose to introduce various measures to help the above
activities.
c) Foreign Exchange Earnings and Outgo Foreign Exchange Earnings - NIL
Foreign Exchange Outgo - NIL
29. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an effective internal control and risk mitigation
system designed to effectively control the operations at its Head Office, Plants and
Depots. The internal control systems are designed to ensure that the financial and other
records are reliable for the preparation of financial statements and for maintaining
assets. The Company has well designed Standard Operating
Procedures. Independent Internal Auditors conduct audit covering a wide
range of operational matters and ensure compliance with specified standards. Planned
periodic reviews are carried out by Internal Audit. The findings of Internal Audit are
reviewed by the top management and by the Audit Committee of the Board of Directors.
Based on the deliberations with Statutory Auditors to ascertain their
views on the financial statements including the Financial Reporting System and Compliance
to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy
and effectiveness of the Internal Controls and Systems followed by the company.
30. NOMINATION & REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework
in relation to remuneration of Directors, Key Managerial Personnel and Senior Management
of the Company. This policy also lays down criteria for selection and appointment of Board
Members. More details on the same are given in the Corporate Governance Report.
31. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
In accordance with the applicable provisions of Companies Act, 2013
(hereinafter referred to as "the Act") read with Investor Education and
Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred
to as the "IEPF Rules"), all unclaimed dividends are required to be transferred
by the Company to the IEPF, after completion of seven (7) years. Further, according to
IEPF Rules, the shares on which dividend has not been claimed by the shareholders for
seven (7) consecutive years or more shall be transferred to the demat account of the IEPF
Authority. The details relating to shares on which dividends were unclaimed are provided
in the General Shareholders Information section of Corporate Governance report forming
part of this Annual Report.
32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with
the requirements of the sexual harassment of women at the workplace (Prevention,
Prohibition and Redressal) Act, 2013. Internal Compliance Committee (ICC) is already been
functioned for redressing complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary, trainees) are covered under this policy.
The Company has not received any complaints under this policy during
the year ended 31st March, 2023.
33. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE
COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUENRATION OF
MANAGERIAL PERSONNEL) RULES, 2014
The information required pursuant to section 134 (3) (q) of the
Companies Act, 2013 read with Rule 5(1) 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 and others entitled thereto, excluding the information on employees'
particulars which is available for inspection by the Members at the Registered office of
the company during business hours on working days of the company up to the date of the
ensuing Annual General meeting. If any Member is interested in obtaining a copy thereof,
such member may write to the company in this regard.
34. PERSONNEL & INDUSTRIAL RELATIONS Industrial Relations were
cordial and satisfactory. There were no employees whose particulars are to be given in
terms of Section 134(3)(q) of the Companies Act,2013 read with Rule 5(2) and 5(3) of the
companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant and material orders passed by the Regulators
or Courts or Tribunals that would impact the going concern status of your Company and its
future operations.
36. GENERAL
a) There was no issue of equity shares with differential rights as to
dividend, voting or otherwise: and;
b) There was no issue of shares (including sweat equity shares) to the
employees of the company under any scheme.
37. ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of
India, State Bank of India and the concerned Departments of the State and Central
Government, valuable customer, Employees and Shareholders for their assistance, support
and co-operation to the Com- pany.
|
For and on behalf of the Board of Directors |
|
B K PATODIA |
Place: Mumbai |
Chairman |
Date: 14.08.2023 |
(DIN:00003516) |