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Garment Mantra Lifestyle Ltd.

BSE: 539216 Sector: Industrials
NSE: N.A. ISIN Code: INE653S01010
BSE 00:00 | 17 Sep 162.45 3.90
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NSE 05:30 | 01 Jan Garment Mantra Lifestyle Ltd
OPEN 162.50
PREVIOUS CLOSE 158.55
VOLUME 6601
52-Week high 227.00
52-Week low 42.00
P/E 27.91
Mkt Cap.(Rs cr) 163
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 162.50
CLOSE 158.55
VOLUME 6601
52-Week high 227.00
52-Week low 42.00
P/E 27.91
Mkt Cap.(Rs cr) 163
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Garment Mantra Lifestyle Ltd. (GARMENTMANTRA) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 9th Annual Report of your Companytogether with the Audited Financial Statement for the Financial Year ended 31st March2020.

1. FINANCIAL RESULTS:

(Amount in Rupees)

Particulars Current Year Previous Year
2019-20 2018-19
Income from Operations 935551254 840924611
Gross Receipts (including other Income) 936151254 841192690
Total Expenditure before Interest and Depreciation 883394046 809847081
Less: Interest and Financial Charges 17277179 14249349
Less: Depreciation and Amortization 2464906 2056677
Profit/(Loss) before taxation for the year 33015122 15039583
Less: Current tax Expenses 9826716 4478011
Less: Deferred Tax Liability/Asset (269361) (99685)
Excess/(Shortfall) Prov. For Tax in P.Y. 208279 262311
Profit/(Loss) after taxation for the year 23249488 10398946

2. IMPACT OF THE COVID-19 PANDEMIC ON THEBUSINESS

Since the first quarter of Current Year 2020 the COVID-19 pandemic has impacted mostof the countries including India. Owing to the outbreak of COVID-19 and the relateddirectives received from the Central & State governments lockdown was announced withadoption of quarantine measures. This has largely affected the economic activity. TheIndian economy has been impacted by this pandemic with contraction in industrial andservices industries. Your company immediately took measures for the safety and well beingof the employees and adopted "work from home "policy for all employee providingthem proper infrastructure and other requirements so that there would be very little orminimal disruption of services to the clients.

For the financial year ended 31.03.2020 there was minimal / no impact on theprofitability of the company as the lock down commenced from the last week of March and weended up making profit for the last financial year. For a month there was no clarity forproduction. Labour issue was the main issue to handle. We had commenced our operationssince 10th May 2020. New business opportunity of mask and PPE Kits emerged. The Companyhas started production of Face Masks along with Cotton PPE Kit to cover full body to helpthe country fight against this pandemic and restrict the damage from the deadly virus. Thecompany is expecting to ramp up the production of masks upto 100000 pcs per day in thenear term. As on today the business is comfortable and since the company deals withaffordable item the company is able to sustain. Since the uncertainty has no timeline thisis become part of business.

3. CHANGE IN NAME OF COMPANY

We would like to inform our shareholders that the name of the company was changed fromJunction Fabrics and Apparels Limited to Garment Mantra Lifestyle Limited with theapproval of the Ministry of Corporate Affairs and BSE India Limited. The revisedCertificate of Incorporation was granted by Ministry of Corporate affairs on 16.03.2020.

4. PERFORMANCE OF THE COMPANY:

During the year under review the Company has earned sales income of Rs. 935551254/-(Previous year Rs. 840924611/-) and other income Rs.600000/-(Previous year Rs.268079/-). After providing depreciation finance charges and tax the Company has earnedNet profit Rs. 23249488/- (Previous year company earned Net profit Rs. 10398946/-).

5. DIVIDEND:

In order to conserve the reserves for further expansion of business the directors donot recommend any dividend.

6. TRANSFER TO RESERVES:

The Company has not transferred any amount to reserves during the year under review.

7. BUSINESS REVIEW:

The company is making efforts to improve the business and your Directors are optimisticof better performance during the year.

8. SHARE CAPITAL:

During the current year the Authorized share capital of the company was increased fromRs. 40000000 to Rs. 110000000 with the approval of Board and Registrar of CompaniesCoimbatore. The paid up share capital of the company stood at Rs. 26922700. The companyhas issued 4000000 share warrant at Rs.40 each during the year under review. Pursuant tothe special resolution passed at the Extra - Ordinary General Meeting of the shareholdersheld on Saturday the 4th day of January 2020 your company allotted 4000000 number ofwarrants on 30th day of January 2020 to both Promoter group and Non-Promoter group onpreferential basis at a price of Rs.40.00 per Warrant including a premium of Rs.30 each.The warrants so issued are convertible into one equity share each within a period of 18months from the date of allotment (the subscription period of 3 months was altered to 18months with the approval of the Board dated 25th April 2020). The company has received25% of the issue price of the Warrants at the time of subscription. The Warrants can beexercised at anytime within a period of 18 months of allotment of the Warrants. Thesubscription price paid for the Warrants will be adjusted against the exercise pricepayable. In the event that any Warrant is not exercised within 18 months of allotment thesubscription price paid shall be forfeited.

In addition the company had also issued bonus shares to the existing shareholders andhas reserved portion of bonus shares to subscribers of Preferential share warrantspursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 in theration 1:2 (i.e. One equity share for every two equity shares held). The bonus shareswill be allotted post conversion of warrants in to shares. The current paid up capital ofthe company stands at Rs.26922700.00

9. DIRECTORS:

As per the provision of the Companies Act 2013 Mrs. Ashmita Agarwal (DIN: 07332067)Director retires by rotation at the ensuing Annual General Meeting and being eligibleseeks re- appointment. The Board recommends the appointment of Mrs. Ashmita Agarwal asDirector of the Company. Mr. Prem Aggarwal (DIN: 02050297) was re-appointed as a ManagingDirector of the Company for a period of 5 years with effect from 23.03.2020 to 22.03.2025in the Board Meeting held on 23.03.2020 during the year. Mrs. Shikha Aggarwal(DIN:03373965) was re-appointed as a Whole time Director of the Company for a period of 5years with effect from 23.03.2020 to 22.03.2025 in the Board Meeting held on 23.03.2020during the year.

Mr. Anil Kumar Goyal (DIN: 00022844) Mr. Senthil Rajagopal (DIN: 06520260) and Mr.Thirumugan (DIN: 03107366) were appointed as an additional Director (Non-Executive &Independent) of the Company with effect from 03.04.2020 in the Board Meeting held on03.04.2020 during the year and the said appointments are to be regularized in the ensuingAnnual General Meeting.

10. STATUTORY AUDITORS:

M/s. A Biyani & Co Chartered accountants (Firm Registration No: 140489W) Mumbaithe Statutory Auditors of the Company hold office up to the ensuing Annual General Meetingof the Company and being eligible offer themselves for re-appointment.

11. DEPOSIT:

Your directors have provided loan/advance to the company to the tune of Rs.6580000/-within the meaning of the Rule 2(1)(viii) of the Companies Act 2013 as ondate. Your directors have provided declaration that the amount being funded is not out offunds borrowed or by accepting loans or deposits from others.

Your company has not accepted any deposits as defined under Companies (Acceptance ofDeposits) Rules 2014

12. EXTRACT OF THE ANNUAL RETURN:

An extract of the Annual Return as of 31st March 2020 pursuant to the sub-section (3)of Section 92 of the Companies Act 2013 in Form MGT 9 is furnished as Annexure A tothis report.

13. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the year 11 (Eleven) Board Meetings 4 (Four) Audit Committee and 3 (Three)Nomination and Remuneration Committee meetings were held as per the details providedbelow:

S. No Date of Board Meetings Date of Audit Committee Meetings Date of Nomination and Remuneration Committee Meetings
1 14.05.2019 14.05.2019 27.05.2019
2 27.05.2019 27.05.2019 27.08.2019
3. 20.06.2019 27.08.2019 20.03.2020
4. 05.07.2019 14.11.2019
5. 27.08.2019
6. 14.11.2019
7. 12.12.2019
8. 08.01.2020
9. 30.01.2020
10. 17.02.2020
11. 20.03.2020

14. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:

All independent Directors have given declarations that they meet the criteria ofIndependence as laid down under the provisions of the Companies Act and the SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.

15. STATEMENT ON DECLARATION BY MANAGING DIRECTOR:

The Managing Director of the company has given declaration that members of board ofdirectors and senior management personnel have affirmed compliance with the code ofconduct of board of directors and senior management as laid down under the provisions ofthe Companies Act and the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015. The declaration is placed as Annexure B to director's report.

16. MANAGEMENT DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the SEBI (Listing obligations andDisclosures Requirements) Regulation 2015 the Management's discussion and analysis isset out below:

I. TEXTILES INDUSTRY STRUCTURE AND DEVELOPMENT

India's textiles sector is one of the oldest industries in Indian economy dating backseveral centuries. Even today textiles sector is one of the largest contributors toIndia's exports with approximately 15 per cent of total exports. The textile industry isalso labor intensive and is one of the largest employers. The textile industry has twobroad segments. First the unorganized sector consists of handloom handicrafts andsericulture which are operated on a small scale and through traditional tools andmethods. The second is the organized sector consisting of spinning apparel and garments.The textile industry employs about 105 million people directly and indirectly. Theenormous potential of the sector has attracted investments from traditional textile giantsdespite substantial gains India's contribution to global technical textile production invalue terms is less than 5 percent. Furthermore India has been unable to move up in thevalue chain – its exports largely comprise of commoditized products in conventionalsegments. The potential of the sector is being harnessed through measures such as taxbreaks special financial packages and allowing 100 percent foreign direct investment(FDI). Other initiatives include the establishment of dedicated centers of excellence forresearch in technical textiles reduction in custom duty rates from 5 percent to 2.5percent on select high-performance specialty fibres and a 15 percent subsidy on capitalinvestment subject to a ceiling of `300 million for entrepreneurs over a period of fiveyears.

II. OPPORTUNITIES AND THREATS

India's technical textile industry continues to benefit from the growth impetus createdby a proactive policy framework the sector was identified as a sunrise sector in the‘Make in India' policy – with an estimated value of USD 17 billion. Thegovernment set up 12 incubation centres to harness the potential of the sector bygenerating employment and fostering growth opportunities. At Alps we aim to optimize theopportunities offered by the increasing focus on the technical textile segment byfollowing a three-pronged approach:

Innovation: Changing the focus from manufacturing to development of science-led high-quality and high- margin products.

Investments: Strategic outlays in technology that enhance our R&D edge.

Integration: Integration of innovation and investments to resolve real-worldproblemsacross high-priority industries.

III. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company's primary business comprises of manufacturing of knitted garments andtrading of fabrics which contributes to 100% revenue.

IV. OUTLOOK

The future for the Indian textile industry looks promising buoyed by both strongdomestic consumption as well as export demand. With consumerism and disposable income onthe rise the retail sector has experienced a rapid growth in the past decade with theentry of several international players like Marks & Spencer Guess and Next into theIndian market. High economic growth has resulted in higher disposable income. This has ledto rise in demand for products creating a huge domestic market. The domestic market forapparel and lifestyle products currently estimated at US$ 85 billion is expected toreach US$ 160 billion by 2025. The Indian cotton textile industry is expected to showcasea stable growth in F.Y 2020-21 supported by stable input prices healthy capacityutilization and steady domestic. Over the last three years we have successfully pluggedin the gaps in our business strategy. Our efforts have laid the foundation for our futureas an innovation driven quality-focused organization. In the future we will focus ontranslating these efforts into high margins for the Company. Our efforts will also beaided by the momentum created by government-led awareness and subsequent demand creationfor the sector. We are now better equipped to make a sustainable foray into segments suchas defence housing infrastructureetc.

V. RISKS AND CONCERNS

Our business and results of operations are dependent on our ability to effectively planour manufacturing processes and on our ability to optimally utilize our manufacturingcapacities for the various products we manufacture. Any disruption to our manufacturingprocess or the operation of our production facilities may result from various factorsbeyond our control including among others the following:

Utility supply disturbances particularly power supply;

Forced close down or suspension of our manufacturing facilities due to factors such asbreakdown or failure of equipment performance below expected levels of output orefficiency facility obsolescence or disrepair labour disputes such as strikes and workstoppages natural disasters and industrial accidents;

Severe weather condition;

Interruption of our information technology systems that facilitate the management ofour manufacturing facilities; and

Other production or distribution problems including limitations to production capacitydue to regulatory requirements changes in the types of products produced or physicallimitations that could impact continuous supply.

VI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate systems of internal control and procedures covering allfinancial and operating functions commensurate with the size and nature of operations toensure orderly and efficient conduct of business. All the major areas and processes arecovered in the review plan drawn in consultation with the senior management. Internalaudit process verifies whether all systems and processes are commensurate with thebusiness size and structure. Adequate internal control systems safeguard the assets of thecompany with timely identification and intervention to assuage risks. The internal auditreport is discussed with the senior management and members of Audit Committee to keep acheck on the existing systems and take corrective action to further enhance the controlmeasures. The Company has proper and adequate systems of internal control to safeguardassets against loss from unauthorized use or disposition. This also ensures that alltransactions are authorized recorded and reported correctly. Regular internal audits andchecks are carried out to ensure the robustness of the system. The Management also reviewsfrom time to time the internal control systems and procedures to ensure their properapplication. The emphasis on internal controls prevails across functions and processescovering the entire gamut of various activities. Effective and comprehensive reviews bythe Audit Committee of the Board further enhance the level and quality of internalcontrols within the organization.

17. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:

During the year under review the Company has not made any Loans Guarantees orInvestments within the meaning of the provisions of Section 186 of the Companies Act2013.

18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO:

A) Conservation of energy:
(i) The steps taken or impact on conservation of energy: Nil
(ii) The steps taken by the company for utilising alternate sources of energy: Nil
(iii) The capital investment on energy conservation equipment: Nil
B) Technology absorption:
(i) The efforts made towards technology absorption: Nil
(ii) The benefits derived like product improvement cost reduction product development or import substitution: Nil
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): Nil
(iv) The expenditure incurred on Research and Development: Nil

C) Foreign exchange earnings and Outgo:

Foreign exchange earnings : NIL Foreign exchange outgo : NIL

19. PERFORMANCE EVALUATION:

SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 mandated thatthe Board shall monitor and review the Board evaluation framework.

The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard on its own performance and that of its committees and individual Directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation shall be done by theentire Board of Directors excluding the Director being evaluated The evaluation of allthe Directors and the Board as whole was conducted based on the criteria and frameworkadopted by the Board.

20. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:

The company has formulated vigil mechanism for employees including directors of thecompany to report genuine concerns. Till date the company has not received any complaints.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contract or arrangements entered into by the Company with relatedparties referred to in sub-Section (1) of Section 188 of the Companies Act 2013 in FormNo. AOC -2 is furnished as Annexure C to this report.

22. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Company's policy on Director's appointment and remuneration and other mattersprovided in section 178 of the Companies Act 2013 has been in accordance with Nominationand remuneration policy of the company which is placed in the website of the Company under"Investor relations".

23. COST AUDITOR:

Not applicable to the Company as per the provisions of the Companies Act 2013. Howeverthe company has maintained cost records as required under the Companies (Cost Records andAudit) Rules 2014.

24. RISK MANAGEMENTPOLICY:

The Management has devised Risk Management Policy considering the nature of industryand associated risks pertaining to the industry. The Management is overseeing theimplementation of the Policy on regular basis.

25. INTERNAL FINANCIALCONTROL:

The company has adequate financial control with reference to financial statements. Ourauditors have provided separate statement on adequacy of financial controls in their auditreport.

26. SECRETARIAL AUDITREPORT:

As per the provisions of the Companies Act 2013 the Secretarial Audit for the year2019-20 has been carried out by Mr. G. Vasudevan Practicing Company Secretary andaccordingly his report is appended to Directors' Report as Annexure D.

27. CORPORATE SOCIAL RESPONSIBILITY:

Not applicable to the Company as per the provisions of the Companies Act 2013.

28. PREVENTION OF SEXUAL HARASSMENT AT THE WORK PLACE:

As per the requirements specified in the "The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013" the Company hasconstituted an Internal Complaints Committee and is committed to provide a workenvironment that is free from sexual harassment.

29. MATERIAL CHANGES:

Material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year as on 31.03.2020 and the date of thisReport.

30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

There were no significant and material orders passed by the regulators or courts ortribunal which would impact the going concern status and the Company's operations infuture.

31. CLARIFICATION ON STATUTORY AUDITOR'S REMARK IN THEIR REPORT:

There were no remarks in the Auditor's report and hence no clarification is required

32. CLARIFICAITON ON SECRETARIAL AUDITOR'S REMARK IN THEIR REPORT:

The company was in search of suitable candidature for the post of Chief financialofficer since November 2019. However the company could not find the suitable candidatureand the spurt of Covid-19 has also imposed difficulties in finding the suitablecandidature.

33. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

ii. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofprofit of the company for that period;

iii. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

iv. the directors had prepared the annual accounts on a going concern basis; and

v. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

34. PARTICULARS OF EMPLOYEES:

There were no employees drawing remuneration in excess of limit specified under Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

The ratio of remuneration of each director to the median of employees remuneration asper Section 197(12) of Companies Act 2013 read with Rule 5(1) of Companies Appointmentand Remuneration of Managerial Personnel ) Rules 2014 forms part of the Board report (AnnexureE).

35. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude and appreciation towardsthe Company's suppliers customers investors bankers Government of India StateGovernment and other regulatory authorities for their continued support during the year.Your Directors also acknowledge the commitment and the dedication of the employees at alllevels who have contributed to the growth of the Company.

Date: 28.07.2020 For and on behalf of the Board
Place: Tirupur -Sd- -Sd-
Prem Dinanath Aggarwal Shikha Aggarwal Prem
Managing Director Whole time Director
DIN No: 02050297 DIN No: 03373965

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