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Gokaldas Exports Ltd.

BSE: 532630 Sector: Industrials
NSE: GOKEX ISIN Code: INE887G01027
BSE LIVE 19:40 | 19 Oct 126.75 -1.80






NSE 19:43 | 19 Oct 126.65 -1.90






OPEN 127.90
VOLUME 32124
52-Week high 139.20
52-Week low 48.00
Mkt Cap.(Rs cr) 443
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 127.90
CLOSE 128.55
VOLUME 32124
52-Week high 139.20
52-Week low 48.00
Mkt Cap.(Rs cr) 443
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gokaldas Exports Ltd. (GOKEX) - Director Report

Company director report

We have pleasure in presenting Thirteenth Annual Report on the business and operationsof the Company together with the Audited Results for the financial year ended March 312016.

Financial Results (Standalone)

Your Company's performance during the year as compared with that during the previousyear is summarized below:

Particulars Year ended March 312016 Year ended March 31 2015
Revenue 115096.52 111629.63
EBITDA 6558.57 6755.45
Other Income 4541.81 4355.31
PBT 5107.72 3435.58

Review of Operations

Gokaldas Exports on a standalone basis has reported total revenue of Rs. 115097Lakhs which is 3.11% higher than that of previous year. There are positive indicators fromthe US markets as their economy is showing signs of improvement. Gokaldas Exports has beensteadily growing in European markets despite financial stress in few countries. There isalso focus on reviewing the product mix to give higher focus on products with highermargins.

The Company has maintained a positive performance and achieved higher PBT over the lastyear despite the competitive pricing and cost inflations.The Company has unlocked some ofits real estate assets to improve liquidity and reduce the borrowings during the financialyear.

Key Cost Metrics

In order to meet the challenges of competitive pricing from the internationalcustomers the company has taken the following initiatives during the year 2015-16:

1) Rejigged the customer portfolio to focus on profitable high volume and high growthcustomers

2) Discontinued non-profitable customer orders

3) Consolidated factories and optimized infrastructure

4) Rationalized cost structure across the value chain

These initiatives have resulted in improved key cost metrics as detailed below therebyleading to better performance.

FY16 Fy15
Raw Material Cost (Including inc/dec in Inventory) 51.73 48.93
Wage cost 10.58 11.35
Other Expenses 31.98 33.66
Depreciation and amortisation expense 1.78 2.68
Finance costs 3.43 4.19

Wage costs form a significant part of our costs which has seen increase in rates overthe years as follows. As can be seen from the chart below minimum wage in Karnataka hasgone up 3 times over the past 8 years Rising trend in wholesale price index (WPI) alsoreflects continuing inflationary pressure on operating costs.

Despite the inflation the company has reduced the manpower cost during the year.

The increase in material cost ratio is attributed to the product mix. Improvedliquidity on account of unlocking real estate assets coupled with interest subventionscheme announced by the Govt of India during the year has enabled the company to lowerthe finance cost.

We have undertaken substantive strategic measures to improve our performance viz:focus on increasing share of business with existing customers churn customer and productportfolio as required develop new customers and markets focus on high margin productbasket strengthen design capabilities improve manufacturing efficiencies and sustainfocus on tighter financial management. These initiatives will help us achieve enhancedresults in the coming years.


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

Transfer to Reserves

No amount is transferred to the Reserves.

List of Subsidiaries

Your Company has 12 subsidiary companies. The names of these companies are as follows:

i. All Colour Garments Private Limited

ii. Deejay Trading Private Limited

iii. Glamourwear Apparels Private Limited

iv. Madhin Trading Private Limited

v. Magenta Trading Private Limited

vi. Rafter Trading Private Limited

vii. Rajdin Apparels Private Limited

viii. Reflexion Trading Private Limited

ix. Rishikesh Apparels Private Limited

x. Seven Hills Clothing Private Limited

xi. SNS Clothing Private Limited and

xii. 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-1is given in Annexure to this report in view of the above the Audited Financial Statementsalong with the reports of the Board of Directors and the Auditors pertaining to the abovesubsidiaries have not been attached to this Report. The Financial Statements of the saidsubsidiaries 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 theregistered office.

Changes in Subsidiaries Joint Ventures and Associates:

Your Company is holding 99.94% stake in the subsidiaries Companies. All thesubsidiaries are wholly owned Subsidiary Companies.

Significant or Material Orders Passed by Regulators / Courts

During the year under review there were no significant or material orders passed bythe regulators or courts or tribunals impacting the going concern status and Company'soperations in future.


During the year under review your Company has not invited or accepted any depositsfrom 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 withthe SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines1999. During the year 194994 employee stock options were converted into equivalentnumber of equity shares. As required under SEBI (Share Based Employee BenefitsRegulations 2014) a disclosure is annexed herewith.

Share Capital

Consequent to conversion of stock options into equity shares your Company's Paid Upequity share capital has gone upto Rs. 173946630 as on March 31 2016 from 172971660as on March 312015.

Directors and Key Managerial Personnel

During the year 2015-16 Dr. Y S P Thorat Director resigned from Directorship witheffect from 1 st December 2015.

The Board of Directors Places on record its sincere appreciation to Dr. Y S P Thoratfor his invaluable contribution to the Company during his tenure as Independent Director.

Mr. Sumit Keshan Chief Financial Officer has resigned with effect from 15th November2015.

Mr. Sathyamurthy A Chief Financial Officer has been appointed with effect from 16thNovember 2015.

Mr. R Ramababu was appointed as Vice Chairman and Managing Director with effect from25th May 2015.

Mr. Gautam Chakravarti CEO and WTD has resigned with effect from 25th May 2015.

Mr. Mathew Cyriac Director retires by rotation at the forthcoming Annual GeneralMeeting and being eligible offers himself for re-appointment.

The brief resume/details relating to Director being re-appointed as stipulated underRegulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is furnished in the Notes forming part of Notice of the AGM.

Declaration by Independent Directors:

The Company has received necessary declaration from each Independent Directors underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149 (6) of the Companies Act 2013.

Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 astructured questionnaire was prepared after taking into consideration various aspects ofBoard's functioning composition of the Board and its Committees execution andperformance of specific duties obligations and governance.

The performance evaluation of Independent Directors has been carried out. Theperformance evaluation of the Non-Independent Directors was carried out by the IndependentDirectors. The Board of Directors expressed their satisfaction with the evaluationprocess.

Number of Meetings of the Board

During the year Six Board Meetings were held on May 25 2015 August 12 2015September 18 2015 November 9 2015 January 5 2016 and February 12 2016. TheParticulars of Directors & their attendance during the financial year 2015-16 has beendisclosed in the Corporate Governance Report forming part of this Annual Report.

Board Committee

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 andresponsibility are as detailed in the report on Corporate Governance.

Directors’ Responsibility Statement

Pursuant to the provisions contained in Section 134(3)(c) of the Companies Act 2013the Board to the best of its knowledge and belief and according to the information andexplanations obtained by it confirm that:

• in the preparation of the annual accounts for the financial year ended 31stMarch 2016 applicable accounting standards have been followed and no material departureshave been made for the same;

• the accounting policies mentioned in Note 2 of the Notes to the financialstatements have been selected and applied consistently and judgments and estimates thatare reasonable and prudent have been made so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit of theCompany for that period;

• proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company for preventing and detecting fraud and otherirregularities;

• the annual accounts have been prepared on a going concern basis;

• the internal financial controls to be followed by the Company have been laiddown and that such internal financial controls are adequate and operating effectively;

• proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Safety Health Environment

We as a responsible manufacturer are committed to take adequate measures related toenvironment employee health and safety in developing manufacturing storing handlingand distribution of our products. It is our responsibility to provide a workplace freefrom accidents injuries and exposure to hazardous substances conserve natural resourcesand prevent pollution to protect the environment.

Besides as a constructive partner in the communities in which it operates the Companyhas been taking concrete actions to realize its social responsibility objectives therebybuilding value for its various stakeholders. We respect human rights value our empbyeesand invest in innovative technologies. In the past the Company has supported innumerablesocial and community initiativesand continues to do the same.

Some of the key initiatives taken by the company are:

• Regular fire safety audits along with mock drills at all locations

• Identification and implementation for additional fire safety measures for highrising buildings

• Up-gradation of existing fire control and safety systems including training onfire prevention for employees

• Enhanced focus on product safety and safe working practices through trainingprograms

• Implementation of a Reverse Osmosis plant in Denim Laundry for recycling ofwaste water

Corporate Governance

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 ofIndia's (SEBI) Corporate Governance practices. Your Company's Corporate GovernanceCompliance Certificate is in line with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and is given along with the Corporate Governance Report.

Management Discussion and Analysis

Management Discussion and Analysis Report is given separately forming part of thisAnnual Report and is in accordance with the requirements laid out in SEBI(ListingObligations and Disclosure Requirements) Regulations 2015.


The equity shares of the Company are listed on the BSE Umited (BSE) and National StockExchange of India Limited (NSE). The Company has paid the listing fees to the respectivestock exchanges till date. The Company's shares are tradable compulsorily in thedematerialized form and the Company has entered into an agreement with National SecuritiesDepository Umited (NSDL) and Central Depository Services India Limited (CDSL) for tradingin electronic form.


a) Statutory Auditor

At the AGM held on 29th September 2014 the Members approved the appointment of M/s S RBatliboi & Associates LLR Chartered Accountants and M/s Girish Murthy & KumarChartered Accountants as the Joint Statutory Auditors for a period of three (3) years fromthe Eleventh AGM till the conclusion of the Fourteenth AGM subject to the approval of theAudit Committee and ratification by the Members every year. As recommended by the AuditCommittee the Board has proposed the re-appointment of M/s S R Batliboi & AssociatesLLR Chartered Accountants and M/s Girish Murthy & Kumar Chartered Accountants as JointStatutory Aud itors f or f iscal 2016 -17.

There are no Qualification reservation or adverse remark or disclaimer made by theauditors.

b) Secretarial Auditor

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 hasappointed Mr. Nagendra D Rao Practicing Company Secretary (CP NO:7731 FCS: 5553) toundertake the secretarial audit of the Company. The Secretarial Audit Report is given inAnnexure to this Report.

It has been observed that:

MR-1 in relation to appointment of Mr. P Ramababu Vice Chairman and Managing Directorhas been filed belatedly.

The Board of Directors has taken note of the same and will ensure filing in time infuture.

Particulars of Employees

The Statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with rule 5 (1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given in an annexure forming part of this AnnualReport.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

In pursuance of the Conservation of Energy Technology Absorption Foreign ExchangeEarnings in such manner as prescribed under Rule 8 (3) of the Companies (Accounts) Rules2014 the particulars of the same are given below.

A. Conservation of Energy

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

B. Technology absorption adaptations and innovation

Not Applicable

C. Foreign Exchange Earnings and Outgo

Foreign Exchange earned: Rs. 93302 lakhs

Out go :Rs. 25233 lakhs

Related Party Transactions

All related party transactions that were entered into during the financial year wereon an arm's length basis and were in the ordinary course of business. The Company presentsa statement of all related party transactions before the Audit Committee. Prior omnibusapproval of the Audit Committee has been obtained for the transactions which are offoreseen and repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted along with a statement giving details of all related partytransactions is placed before the Audit Committee. Further there are no materiallysignificant related party transactions during the year under review made by the Companywith promoters Directors Key Managerial Personnel or designated persons which may have apotential conflict of interest with the Company at a large.

Particulars of Loan Guarantees and Investment

In Terms of Section 134 of the Companies Act 2013 the particulars of LoansGuarantees and Investments under Section 186 of the Companies Act 2013 is detailed inNotes to Accounts of the Financial Statements.

Disclosure under the sexual harassment of women at workplace (prevention prohibition& redressal) Act 2013

Your Company has in place a policy on prevention prohibition and Redressal of SexualHarassment and Nondiscrimination at work place in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention Prohibition & 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 receivedregarding sexual harassment and discrimination at work place.

During the year ended March 31 2016 the ICC has received no complaints pertaining toSexual harassment /discrimination at work place.

Extract of the Annual Return

Relevant extract of annual return to be filed with the Registrar of Companies for thefinancial year 2015-16 in Form MGT- 9 is given as Annexure to this Report.

Corporate Social Responsibility (CSR)

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

The Corporate Social Responsibility Policy as formulated by the Corporate SocialResponsibility Committee and approved by the Board of Directors is available on thewebsite of the Company at

Remuneration Policy for the Directors Key Managerial Personnel and other Employees

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 determiningqualification positive attributes and independence of a Director. The Nomination &Remuneration Committee is also responsible for recommending to the Board a policy relatingto 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 employeesof the Company. The copy of policy is available on the company's

Development and implementation of a Risk Management Policy

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

Risk Management Policy

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board of Directors have formulated a policy on Risk Management which can be accessedfrom the Website of the Company at

Shifting of Registered Office

Your Directors wish to inform you that our registered office has been shifted from No.70 Mission Road Bengaluru - 27 to No. 16/2 Residency road Bengaluru - 25 with effectfrom 11 December 2015.Necessary intimation and filings have been made with the regulatoryauthorities.

Acknowledgements and Appreciation

Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners and associates financial institutions and the Central andState Governments for their consistent support and encouragement to the Company. I am sureyou will join our Directors in conveying our sincere appreciation to all employees of theCompany for their hard work and commitment.

On behalf of the Board of Directors
Richard B Saldanha
R Ramababu
(Vice Chairman and Managing Director)
9th August 2016


Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company is as follows:

1. Ratio of remuneration of each director to the median remuneration of the employeesof the Company for the financial year

Sl. No Name Designation Remuneration Paid FY 2015-16 (Rs lacs) Remuneration Paid FY 2014-15 (Rs lacs) Increase in remuneration over previous year(Rs lacs) Ratio/times per Median of employee remuneration
1 P. Ramababu * VC & MD 102.26 0 NA 48.93
2 Mr. Gautam Chakravarti** CEO & WTD 14.08 110 Nil 6.74

Includes fixed does not include ESOP/Bonus and Perquisite value

*Appointed wef May 25 2015

** resigned wef May 25 2015

2. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:

Mr. P. Ramababu - Vice Chairman and Managing Director - Nil

Mr. Sathyamurthy . A Chief Financial officer - Nil (Appointed w e f 16th November2015)

Ms. Ramya K Company Secretary - 8.00%

3) The percentage increase in the median remuneration of employees in the financialyear : 8%

4) The number of permanent employees on the rolls of Company as of 31 March 2016: 22337

5) The explanation on the relationship between average increase in remuneration andCompany performance: in line with Industry Practice

6) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company. During the year the Company has not done any fixedremuneration revision for the VC & MD and CFO.

7) Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the Current financial year and previous financial year:

Particulars March 312016 March 312015 % Change
Market Capitalization (Rs. Crores) 215 143 50.335
P/E Ratio 3.60 4.20 -14.28

8) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration : increasein non-managerial salaries were higher than the increase in managerial remuneration during2015-16

9) Comparison of remuneration of each of the Key Managerial personnel against theperformance of the Company (as % of revenue)

Mr. P . Ramababu VC & MD 0.090%
Mr. Sathyamurthy A CFO 0.040%
Ms. Ramya K CS 0.007%

10) Key parameters for any variable component of remuneration availed by the directors- revenue and operational profitability.

11) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but received remuneration in excess of the highest paid directorduring the year - None

12) Affirmation that the remuneration is as per the remuneration policy of the Company- The Company affirms that the remuneration is as per the remuneration policy of theCompany.

b) information as per Section 197(12) of the Companies Act 2013 read with Rule 5(2)and 5(3) Companies Appointment and remuneration of Managerial Personnel) Rules 2014forming part of the Directors' Report for the year ended March 31 2016.

Sl.No Name Age(yrs) Designation Date of Commencement of Employment Remunera tion Received (Rs. In Lakhs) Professional Qualifica tion Total Experience (Yrs) Last Employment and Designation Whether he is a relative of Director/ Manager % of equity shares held within Rule 5(2) & 5(3)
1 Mr. P. Ramababu 68 VC & MD 25th May 2015 102.26 PG in Social Work 44years Consultant No Nil
2 Mr. Sumit Keshan* 46 CFO 20th October 2010 87.35 CA CWA 23 years Deutsche Bank No 0.03

*Employed for a part of the year in receipt of remuneration aggregating Rs. 8.5 lakhsper month


Description ESOP Scheme- 2010
No. of Options available under ESOP Scheme-2010 1718800
A) No. of Options Granted during FY 2015-16 85000
B) The Pricing Formula The exercise price for the purposes of the grant of options as decided by the ESOP Compensation Committee is Rs.32.25 60.95 and 80.20 the price being not less than the Par value of the equity share of the Company and not more than the market price as on 20th May 2013 1st Feb 2014 and 13th Aug 2014 respectively being relevant date subject to the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999.
C) Options vested during FY 2015-16 323333
D) Options Exercised during FY 2015-16 194994
E) The total number of shares arising as a result of exercise of options 194994
F) Options lapsed FY 2015-16 533335
G) Variation Terms of Options Nil
H) Money Realized by exercise of options Rs.6479870
I) Total Number of Options in Force as on March 312016 941674
J) Employee-wise details of options granted to Details as under :
i) Senior Managerial Personnel Yes
ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year Nil
iii) Identified employees who were granted option during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Nil
K) Diluted Earnings Per share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 "Earnings Per Share" Rs. 17.18
L) i) the Method of calculation of Employee Compensation Cost Fair Value Method Black-Scholes-Merton
ii) Difference between the employee compensation cost so computed at (i) above and the employee Compensation Cost that shall have been recognized if it had used the fair value of options Nil
iii) The impact of the difference on profits and on EPS of the Company Nil
M) Weighted average exercise prices and weighted average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price Not Applicable - Since no options were granted during the year
N) A description of the method and significant assumptions used during the year to estimate the fair values of options including the following weighted average information : Not Applicable - Since no options were granted during the year
1) Risk-free interest rate
2) Expected life
3) Expected volatility
4) Expected dividends
5) Price of underlying share in market at the time of option grant



The Members

Gokaldas Exports Limited

No. 16/2 Residency Road

Bengaluru - 560 025.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.

4. Wherever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is responsibility of management. My examination was limited to theverification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the further viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

Nagendra D. Rao
Practising Company Secretary
Membership No. FCS - 5553
Certificate of Practice - 7731
543/A 7th Main
3rd Cross S.L. Byrappa Road
Place: Bengaluru Hanumanthnagar
Date: May 30 2016 Bengaluru - 560 019.