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Garment Mantra Lifestyle Ltd.

BSE: 539216 Sector: Industrials
NSE: N.A. ISIN Code: INE653S01028
BSE 00:00 | 02 Dec 5.10 0.09
(1.80%)
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NSE 05:30 | 01 Jan Garment Mantra Lifestyle Ltd
OPEN 5.11
PREVIOUS CLOSE 5.01
VOLUME 116541
52-Week high 22.22
52-Week low 3.76
P/E
Mkt Cap.(Rs cr) 51
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.11
CLOSE 5.01
VOLUME 116541
52-Week high 22.22
52-Week low 3.76
P/E
Mkt Cap.(Rs cr) 51
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 10th Annual Report ofyour Company together with the Audited Financial Statement for the Financial Year ended31st March 2021.

1. FINANCIAL RESULTS:

(Amount in Rupees)

Standalone Consolidated
Particulars Current Year 2020-21 Previous Year 2019-20 Current Year 2020-21 Previous Year 2019-20
Income from Operations 1062968040 935551254 1677014476 1499935754
Gross Receipts (including other Income) 1064630137 936151254 1678870491 1501308470
Total Expenditure before Interest and Depreciation 969430068 882393013 1526627039 1405848893
Less: Interest and Financial Charges 17162381 17277179 35352940 31498084
Less: Depreciation and Amortization 2833723 2464906 7036314 6898659
Profit/(Loss) before taxation for the year 75203965 34016155 109854199 1444245636
Less: Current tax Expenses 20521510 9826716 31058855 16854099
Less: Deferred Tax Liability/Asset (229627) (269361) (531716) (586143)
Excess/(Shortfall) Prov. For Tax in P.Y. 254294 208279 818968 476705
Profit/(Loss) after taxation for the year 54657788 24250521 78508092 40318173
Other Comprehensive Income Items that will not be reclassified to Profit or Loss 11179860 ( 1001033) (1135490) (1001033)
Total Comprising Profit/loss and other Comprehensive Income for the period 65837648 23249488 77372602 39317140

2. PERFORMANCE OF THE COMPANY

During the year under review the Company has earned sales income ofRs. 1062968040/- (Previous year Rs. 935551254) and other income Rs. 1662097/-(Previous year Rs 600000 /-). After providing depreciation finance charges and taxthe Company has earned Net profit of Rs. 54657788/- (Previous year company earned Netprofit of Rs. 24250521 /-).

3. DIVIDEND:

In order to conserve the reserves for further expansion of business thedirectors do not recommend any dividend.

4. TRANSFER TO RESERVES:

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

5. BUSINESS REVIEW:

The company is making efforts to improve the business and yourDirectors are optimistic of better performance during the year.

The management broke down the organizational objectives into divisionalgoals which were further cascaded to the respective functions - providing complete clarityof what needs to be done to meet the aspirations of the organization. This helped identifyand plug gaps in the systems processes skill sets and products which have kept the companyready to take a plunge when evergreen shoots of revival show up.

The team worked throughout the year to improve its product offeringwith better features. It also streamlined its systems and processes to enhanceproductivity and optimize cost and time for manufacture.

6. SHARE CAPITAL:

The paid up share capital of the company was increased from Rs.26922700.00 to Rs. 100384050.00. During the year under review the company hasissued 3346135 Bonus Shares to the equity shareholders and warrant holders. In additionthe Share warrants issued by your company was converted into 4000000 equity shares ofRs.40 each (Including a premium of Rs.30) amounting to Rs. 160000000/- on 28.07.2020.

7. DIRECTORS:

As per the provision of the Companies Act 2013 Mrs. Shikha AggarwalPrem (DIN: 03373965) Director retires by rotation at the ensuring Annual General Meetingand being eligible seeks re- appointment. The Board recommends the appointment of Mrs.Shikha Aggarwal Prem (DIN: 03373965) Director as Whole Time Director of the Company.

8. AUDITORS:

(A) STATUTORY AUDITORS

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(B) SECRETARIAL AUDITOR

The Board of Directors have appointed M/s. GV and AssociatesPracticing Company Secretaries to conduct Secretarial Audit for the financial year2021-22.

The Secretarial Audit Report and Secretarial compliance report(pursuant to Regulation 24A of SEBI (Listing Obligation and Disclosure

Requirement) Regulations 2015) of Mr. G. Vasudevan Proprietor of M/sGV and Associates Practicing Company Secretaries for the financial year 2020-21 isannexed herewith as Annexure A.

(C) COST AUDITOR

The Board of Directors have appointed Mr. C. Sanjeevi (Membership No:26512) Practicing Cost & Management Accountants as Cost Auditors to conduct audit ofthe cost records maintained by the Company pertaining to fabrics and garments for thefinancial year 2021-22.

The Company has prepared and maintained the cost records as specifiedby the Central Government under Section 148(1) of the Act.

9. DEPOSIT:

Your directors have provided loan/advance to the company to the tune ofRs.7850000 /- within the meaning of the Rule 2(1)(viii) of the Companies Act 2013 as ondate. Your directors have provided a declaration that the amount being funded is not outof funds borrowed or by accepting loans or deposits from others.

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

10. ANNUAL RETURN:

The annual return pursuant to the sub-section (3) of Section 92 of theCompanies Act 2013 forms a part of Boards Report and the same shall be available on thewebsite of the company www.junctionfabrics.in.

11. MATERIAL SUBSIDIARY COMPANY

As of March 31 2021 your Company has two subsidiaries viz. Jannatfabrics and Apparels Private Limited and Twenty Twenty Trading LLP. The statement underSection 129(3) of the Companies Act 2013 in respect of the subsidiary in Form AOC-1 isattached as Annexure B

The Consolidated Accounts of the company are duly audited by theStatutory Auditors are presented as part of this Report.

The financial statements together with related information and otherreports of the subsidiary are available on the website of the company atwww.junctionfabrics.in

The Company's policy on material subsidiary is also available on thewebsite at www.junctionfabrics.in

12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the year 8 (Eight) Board Meetings 3 (Three) Audit Committeeand 1 (One) Nomination and Remuneration Committee meetings and 1(One) StakeholdersRelationship Committee meeting were held within the period prescribed under the CompaniesAct 2013 and SEBI (LODR) Regulations 2015 the details of which are given in theCorporate Governance Report

13. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:

All independent directors have given declarations that they meet thecriteria of Independence as laid down under the provisions of the Companies Act and theSEBI (Listing Obligations and Disclosure Requirements) Regulation 2015.

14. STATEMENT ON DECLARATION BY MANAGING DIRECTOR:

The Managing Director of the company has given declaration that membersof board of directors and senior management personnel have affirmed compliance with thecode of conduct of board of directors and senior management as laid down under theprovisions of the Companies Act and the SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015. The declaration is placed as Annexure C todirector's report.

15. CORPORATE GOVERNANCE REPORT AND CERTIFICATE:

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16. MANAGEMENT DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the SEBI (Listingobligations and Disclosures Requirements) Regulation 2015 the Management's discussionand analysis is set out below:

i. Textiles Industry Structure and Development

India's textiles sector is one of the oldest industries in Indianeconomy dating back several centuries. Even today textiles sector is one of the largestcontributors to India's exports with approximately 15 per cent of total exports. Thetextile industry is also labor intensive and is one of the largest employers. The textileindustry has two broad segments. First the unorganized sector consists of handloomhandicrafts and sericulture which are operated on a small scale and through traditionaltools and methods. The second is the organized sector consisting of spinning apparel andgarments. The textile industry employs about 105 million people directly and indirectly.The enormous potential of the sector has attracted investments from traditional textilegiants despite substantial gains India's contribution to global technical textileproduction in value terms is less than 5 percent. Furthermore India has been unable tomove up in the value chain - its exports largely comprise of commoditized products inconventional segments. The potential of the sector is being harnessed through measuressuch as tax breaks special financial packages and allowing 100 percent foreign directinvestment (FDI). Other initiatives include the establishment of dedicated centers ofexcellence for research in technical textiles reduction in custom duty rates from 5percent to 2.5 percent on select high-performance specialty fibers and a 15 percentsubsidy on capital investment subject to a ceiling of ' 300 million for entrepreneurs overa period of five years.

ii. Opportunities and Threats

India's technical textile industry continues to benefit from the growthimpetus created by a proactive policy framework the sector was identified as a sunrisesector 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 developmentof science-led high- quality and high- margin products.

• Investments: Strategic outlays in technology that enhance ourR&D edge.

• Integration: Integration of innovation and investments toresolve real-world problems across high-priority industries.

iii. Segment-Wise or Product-Wise Performance

The Company's primary business comprises of manufacturing of knittedgarments and trading of fabrics which contributes to 100% revenue

iv. Outlook

The future for the Indian textile industry looks promising buoyed byboth strong domestic consumption as well as export demand. With consumerism and disposableincome on the rise the retail sector has experienced a rapid growth in the past decadewith the entry of several international players like Marks & Spencer Guess and Nextinto the Indian market. High economic growth has resulted in higher disposable income.This has led to rise in demand for products creating a huge domestic market. The domesticmarket for apparel and lifestyle products currently estimated at US$ 85 billion isexpected to reach US$ 160 billion by 2025. The Indian cotton textile industry is expectedto showcase a stable growth in F.Y 2020-21 supported by stable input prices healthycapacity utilization and steady domestic. Over the last three years we have successfullyplugged in the gaps in our business strategy. Our efforts have laid the foundation for ourfuture as an innovation driven quality-focused organization. In the future we will focuson translating 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 infrastructure etc

v. Risks and Concerns:

Our business and results of operations are dependent on our ability toeffectively plan our manufacturing processes and on our ability to optimally utilize ourmanufacturing capacities for the various products we manufacture. Any disruption to ourmanufacturing process or the operation of our production facilities may result fromvarious factors beyond our control including among others the following:

• Utility supply disturbances particularly power supply;

• Forced close down or suspension of our manufacturing facilitiesdue to factors such as breakdown or failure of equipment performance below expectedlevels of output or efficiency facility obsolescence or disrepair labour disputes suchas strikes and work stoppages natural disasters and industrial accidents;

• Severe weather condition;

• Interruption of our information technology systems thatfacilitate the management of our manufacturing facilities; and

• Other production or distribution problems including limitationsto production capacity due to regulatory requirements changes in the types of productsproduced or physical limitations that could impact continuous supply.

vi. Internal control systems and their adequacy

The Company has adequate systems of internal control and procedurescovering all financial and operating functions commensurate with the size and nature ofoperations to ensure orderly and efficient conduct of business. All the major areas andprocesses are covered in the review plan drawn in consultation with the seniormanagement. Internal audit process verifies whether all systems and processes arecommensurate with the business size and structure. Adequate internal control systemssafeguard the assets of the company with timely identification and intervention to assuagerisks. The internal audit report is discussed with the senior management and members ofAudit Committee to keep a check on the existing systems and take corrective action tofurther enhance the control measures. The Company has proper and adequate systems ofinternal control to safeguard assets against loss from unauthorized use or disposition.This also ensures that all transactions are authorized recorded and reported correctly.Regular internal audits and checks are carried out to ensure the robustness of the system.The Management also reviews from time to time the internal control systems and proceduresto ensure their proper application. The emphasis on internal controls prevails acrossfunctions and processes covering the entire gamut of various activities. Effective andcomprehensive reviews by the Audit Committee of the Board further enhance the level andquality of internal controls within the organization.

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

During the year under review the Company has made investment in TwentyTwenty Trading LLP and Jannat Fabrics and Apparels Private Limited thereby making themmaterial subsidiary of the Company

The Company has not made any Loans Guarantees within the meaning ofthe provisions of Section 186 of the Companies Act 2013.

18. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS 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 2015has mandated that the Board shall monitor and review the Board evaluation framework.

The Companies Act 2013 also states that a formal annual evaluationneeds to be made by the Board on its own performance and that of its committees andindividual Directors. Schedule IV of the Companies Act 2013 states that the performanceevaluation shall be done by the entire Board of Directors excluding the Director beingevaluated

The evaluation of all the Directors and the Board as whole is conductedbased on the criteria and framework adopted by the Board.

20. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS ANDEMPLOYEES:

The company has formulated vigil mechanism for employees includingdirectors of the company to report genuine concerns. Till date the company has notreceived any complaints.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contract or arrangements entered into by the Companywith related parties referred to in sub-Section (1) of Section 188 of the Companies Act2013 in Form No. AOC -2 is furnished as Annexure F to this report.

22. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Company's policy on Director's appointment and remuneration andother matters provided in section 178 of the Companies Act 2013 has been in accordancewith Nomination and remuneration policy of the company which is placed in the website ofthe Company (www.junctionfabrics.in) under "Investor relations".

The salient features of the NRC Policy as under:

1) Setting out the objectives of the Policy

2) Definitions for the purposes of the Policy

3) Policy for appointment and removal of Director KMP and SeniorManagement

4) Policy relating to the Remuneration for the Managerial PersonnelKMP Senior Management Personnel & other employees

5) Remuneration to Non-Executive / Independent Director

23. RISK MANAGEMENT POLICY:

The Management has devised Risk Management Policy considering thenature of industry and associated risks pertaining to the industry. The Management isoverseeing the implementation of the Policy on regular basis.

24. INTERNAL FINANCIAL CONTROL:

The Company's internal control procedures which include internalfinancial controls ensure compliance with various policies practices and statutes andkeeping in view the organization's pace of growth and increasing complexity of operations.The internal auditors' team carries out extensive audits throughout the year across alllocations and across all functional areas and submits its reports to the Audit Committeeof the Board of Directors on quarterly basis.

25. CORPORATE SOCIAL RESPONSIBILITY:

As per the provisions of the Companies Act 2013 corporate socialresponsibility is applicable to the Company from the financial year 2021-22. The companyhas devised Corporate Social responsibility policy and has disseminated the same in itswebsite i.e. www.junctionfabrics.in

26. PREVENTION OF SEXUAL HARASSMENT AT THE WORK PLACE:

As per the requirements specified in the "The Sexual Harassment ofWomen at Workplace (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.

27. MATERIAL CHANGES:

In the financial Year 2021 the COVID-19 pandemic developed rapidlyinto a global crisis forcing governments to enforce lock-downs of all economic activity.For the Company the focus immediately shifted to ensuring the health and well-being ofall employees and on minimizing disruption to services for all our customers globally.The Company however made the best use of this lean market.

Apart from the unprecedented situation prevailing in the currentscenario there are no material changes and commitments occurring from the end of thefinancial year till the date of this report.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNAL:

There were no significant and material orders passed by the regulatorsor courts or tribunal which would impact the going concern status and the Company'soperations in future.

29. COMPLIANCE WITH SECRETARIAL STANDARDS:

The company has complied with applicable Secretarial standards asstipulated by Institute of Company Secretaries of India.

30. CLARIFICATION ON STATUTORY AUDITOR'S

REMARK IN THEIR REPORT:

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

31. CLARIFICATION ON SECRETARIAL AUDITOR'S

REMARK IN THEIR REPORT:

There were no adverse remarks/qualification in

Secretarial auditor's report and hence no clarification is required.

32. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:

I. in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

II. the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of profit of the company for that period;

III. the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

IV. the directors had prepared the annual accounts on a going concernbasis; and

V. the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

33. PARTICULARS OF EMPLOYEES:

There were no employees drawing remuneration in excess of limitspecified under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

The ratio of remuneration of each director to the median of employeesremuneration as per Section 197(12) of Companies Act 2013 read with Rule 5(1) ofCompanies Appointment and Remuneration of Managerial Personnel ) Rules 2014 forms part ofthe Board report Annexure G

34. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude andappreciation towards the Company's suppliers customers investors bankers Government ofIndia State Government and other regulatory authorities for their continued supportduring the year. Your Directors also acknowledge the commitment and the dedication of theemployees at all levels who have contributed to the growth of the Company.

Place: Tirupur For and on behalf of the Board
Date: 22.06.2021
-Sd- -Sd-
Prem Aggarwal Shikha Aggarwal Prem
(DIN:02050297) (DIN: 03373965)
Managing Director Wholetime Director

.