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Gokaldas Exports Ltd.

BSE: 532630 Sector: Industrials
NSE: GOKEX ISIN Code: INE887G01027
BSE 10:53 | 28 Jan 402.75 11.50






NSE 10:44 | 28 Jan 403.70 13.55






OPEN 404.00
VOLUME 21145
52-Week high 417.55
52-Week low 73.05
P/E 33.15
Mkt Cap.(Rs cr) 2,375
Buy Price 402.75
Buy Qty 8.00
Sell Price 402.95
Sell Qty 51.00
OPEN 404.00
CLOSE 391.25
VOLUME 21145
52-Week high 417.55
52-Week low 73.05
P/E 33.15
Mkt Cap.(Rs cr) 2,375
Buy Price 402.75
Buy Qty 8.00
Sell Price 402.95
Sell Qty 51.00

Gokaldas Exports Ltd. (GOKEX) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the seventeenth annualreport on the business and operations of the Company ("Gokaldas Exports Limited"or "GEX" or "Company") together with the audited standalone andconsolidated financial statements for the financial year ended 31st March2020.


Your Company's financial highlights for the year ended 31stMarch 2020 are summarized below.

(Rs. Crores)

Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Revenue from operations 1362.20 1173.37 1365.24 1174.52
Other Income 34.83 21.59 34.91 21.68
Profit before interest tax and depreciation 123.25 77.08 122.03 77.21
Profit before tax 32.36 25.00 30.39 25.08


2019-20 was a remarkable year for your company wherein we recorded thehighest-ever revenue in our history. The business from key customers was at the forefrontof growth as we demonstrated once again our ability to capture sizeable opportunities inan agile and efficient manner. On a consolidated basis revenue for the year was Rs. 1400Crores a growth of 17.1%. The revenue growth has come across all product categories overall the seasons indicating a secular and sustainable performance. Revenue from operationincreased by 16% (from Rs. 1175 Crores in FY19 to Rs. 1365 Crores in FY20) due to bettertraction from key operating fundamentals as well as effective execution of capacityexpansion strategies. Factors that influenced such exceptional growth were higher revenuefrom newly acquired customers increased wallet shares from existing customers from adiversified product portfolio and consistency in product quality and customer servicedelivery. During the year India's apparel exports declined by 4.1%. There wascomplete withdrawal of 4% MEIS benefits retrospectively from 7th March 2019which the revenue and EBITDA by Rs. 41 Crores an upward revision of labor cost by 10% inOctober 2019 (retrospective effect from 1st April 2019). Despite suchchallenges your company's earnings before interest taxes and depreciationallowance (EBITDA) for FY20 was Rs. 102 Crores (before giving the effect of exceptionalitems) a growth of 23% and an EBITDA margin growth of 30 basis points. Yourcompany's PAT grew by 15% from 26 Crores in FY19 to Rs. 30 Crores in FY20.

Your Company has made a capital investment of Rs. 41 Crores during theyear on upgradation of machinery modernization of business infrastructure. Yourcompany's long-term strategic objective is to create value for its shareholdersemployees business partners through delivering quality products excellence in customerrelationship and satisfaction and will continue to remain focused on these initiatives forsustainable profit growth.


The Global and Indian textile industry has been affected by theoutbreak of COVID-19. The coronavirus has unleashed an unprecedented event which has beenso sudden and so extensive in its sweep that it has caught the world unprepared for theeconomic consequences. The spread of the virus has had serious business implications andcompanies felt the impact owing to uncertainty in demand raw material disruptions labouravailability and logistics constraints.

The pandemic after effects will be challenging for the businessenvironment. India's domestic textile and apparel market is estimated to shrink byabout 30% in the short term. Apparel export is anticipated to decline in 2020.

Currently textiles and apparel manufacturing industry is undergoingmajor structural changes. China a dominant player is now seeing its share in globaltrade falling due to rapidly increasing domestic consumption and rising wages. Theunprecedented changes propelled by the trade war and onset of COVID-19 are creating tradeopportunities for competing nations like India Bangladesh Vietnam and Ethiopia. Howevergiven India's large presence in the cotton value chain and the opportunities whichwill emerge post-pandemic it is expected that India would achieve a much higher share ofglobal exports. Apparel exports are estimated to reach US$ 70 billion by 2024 (Source:Textile Time April-May 2020 CITI). India has the potential to benefit significantly.


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


No amount is transferred to the Reserves.


Your Company has 3 subsidiary companies. The names of these companiesare as follows: i. All Colour Garments Private Limited ii. SNS Clothing Private Limitedand iii. Vignesh Apparels Private Limited.

Pursuant to provisions of Section 129(3) of the Companies Act 2013 astatement containing salient features of the financial statements of the SubsidiaryCompanies in Form AOC-1 is given in Annexure to this report In view of the above theAudited Financial Statements along with the reports of the Board of Directors and theAuditors pertaining to the above subsidiaries have not been attached to this Report. TheFinancial Statements of the said subsidiaries will be kept for inspection at theregistered office of your Company. Investors who want to have a copy of the above maywrite to the Company Secretary to the registered office.


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


Pursuant to the Companies (Indian Accounting Standards) Rules 2015your Company has to comply with Indian Accounting Standards (IndAS) from April 01 2017.Accordingly the financial statements of the Company for the financial year 2019-20 havebeen prepared as per IndAS.


The Company had issued 7708000 equity shares of Rs. 5/- each fullypaid at Rs. 90/- per share (including securities premium of Rs. 85/- per share) toqualified institutional buyers on May 3 2018 pursuant to Qualified InstitutionalPlacement (QIP) document dated April 27 2018 as per provision of Section 42 of CompaniesAct 2013 read with rule 14 of the Companies (Prospectus and Allotment of Securities)Rules 2014 and Chapter VIII of the Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations 2009 which have been listed in therespective stock Exchanges on May 4 2018.


Pursuant to Regulation 32 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Statement of Deviation or Variation reviewed by theAudit Committee at their meeting held on 29th July 2019as below.

a. Deviation in the use of proceeds from the objects stated in theoffer document or explanatory statement to the notice for the general meeting:

Status - There is no deviation observed in the use of proceedsfrom the objects stated in the explanatory statement to the notice for the general meeting

b. Category wise variation:

Status - The application money received towards allotment ofequity shares raised through qualified institutional placement of Rs.69.37 Crores. As ofthe balance sheet date 31-Mar-2019 the Company has utilized Rs.33.87 Crores towardsmodernization and automation of business infrastructures and the remaining Rs. 35.50Crores was utilized for working capital finance of the company.

The Company has completed the Utilisation of the funds raised.


The credit rating agency ICRA has retained the credit ratings of thecompany same as the previous year at BBB ( Outlook : Positive) for long term debt and A3+( A Three Plus) for short term borrowings as on date of this report.


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


During the year under review your Company has not invited or acceptedany deposits from the public under section 76 of the Companies Act 2013 and Rules madethere under.


Your Company has introduced the Employee Stock Option Scheme –2010 in accordance with the SEBI (Employees Stock Option Scheme and Employees StockPurchase Scheme) Guidelines 1999. During the year 10000 employee stock options wereconverted into equivalent number of equity shares. As required under SEBI (Share BasedEmployee Benefits Regulations 2014) a disclosure is annexed herewith.


At the General Meeting via Postal Ballot held on 27thAugust 2018 the shareholders approved the Restricted Stock Unit – 2018 Scheme(‘RSU'). Pursuant to the approval the Board has been authorized to offer issueand allot stock options to eligible employees of the Company and its subsidiary Companiesunder RSU 2018. The maximum number of shares under the RSU 2018 shall not exceed 2133040equity shares.

Out of this your company has granted 2133040 stock options to theemployees of Company under RSU 2018. The relevant disclosures pursuant to Rule 12(9) ofthe Companies (share Capital and Debentures) Rules 2014 and Regulation 14 of SEBI (ShareBased Employee Benefits) Regulations 2014 is forming part of Annual Report.


Consequent to conversion of stock options into equity shares yourCompany's Paid Up equity share capital has gone up to Rs. 214128315 as on 31stMarch 2020 from Rs. 214078315 as on 31st March 2019.


During the year Mr. Jitendra Kumar H Mehta Independent Directorresigned from Directorship with effect from July 18th 2019.

Mr. Arun K Thiagarajan resigned as Independent Director w.e.f 29thJuly 2019.

The Board places on record the immense contributions made by Mr.Jitendra Kumar H Mehta and Mr. Arun K Thiagarajan to the growth of your Company Pursuantto the provisions of Section 152 of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Gautham Madhavan (DIN: 02826558) Non-executive Directorretires by rotation at forthcoming Annual General Meeting and being eligible offershimself for re-appointment. The brief resume and other details as required under theListing Regulations are provided in the Notice of the 17th Annual GeneralMeeting of the Company.

In terms of Section 203 of the said Act the following were designatedas Key Managerial Personnel of your company by the Board:

• Mr. Sivaramakrishnan Ganapathi – Managing Director

• Mr. Sathyamurthy A – Chief Financial Officer

• Mr. Sameer Sudarshan R. V. – Company Secretary Ms. Ramya K– Company Secretary and Compliance Officer has resigned the office w.e.f. 14thJanuary 2019 and Mr. Sameer Sudarshan R. V. has been appointed as the Company Secretaryand Compliance Officer on 24th April 2019.

Mr. Sathyamurthy A – Chief Financial Officer of the Company wasacting as the Compliance Officer from 14th January 2019 until 24thApril 2019.


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


Pursuant to the provisions of the Companies Act 2013 and Regulations25 of the Listing Regulations the Board has carried out annual performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Audit Nomination & Remuneration and Stakeholders Relationship Committee. EachBoard member completed a questionnaire providing feedback on the functioning and overallengagement of the Board and its committees on various parameters such as compositionexecution of specific duties quality quantity and timeliness of flow of informationdeliberations at the meeting etc. The Directors were also asked to provide their valuablefeedback and suggestions about the over all functioning of the Board and its committees.


During the year Seven Board Meetings were held on 24thApril 2019 17th May 2019 29th July 2019 13thSeptember 2019 14th November 2019 4th February 2020 and 2ndMarch 2020. The Particulars of Directors & their attendance during the financial year2019-20 has been disclosed in the Corporate Governance Report forming part of this AnnualReport.

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


The Company has the following committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee The Composition of each ofthe above Committees their respective roles and responsibilities are as detailed in thereport on Corporate Governance.


Pursuant to the requirement under Section 134(5) of the Companies Act2013 with respect to the Directors' Responsibility Statement the Management statesthat:

I) In the preparation of the annual accounts for the year ended 31stMarch 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

II) They have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and of the profit of the Company for that period;

III) They have taken proper and sufficient care towards the maintenanceof adequate accounting records in accordance with the provisions of this Act to safeguardthe assets of the Company and to prevent and detect fraud and other irregularities; IV)They have laid down Internal Financial Controls to be followed by the Company and theAudit Committee of the Board of Directors shall ensure that the Internal Control isadequate and robust;

V) The annual accounts are prepared on a going concern basis

VI) They have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.


We as a responsible manufacturer are committed to take adequatemeasures related to environment employee health and safety in developing manufacturingstoring handling and distribution of our products. It is our responsibility to provide aworkplace free from accidents injuries and exposure to hazardous substances conservenatural resources and prevent pollution to protect the environment. Besides as aconstructive partner in the communities in which it operates the Company has been takingconcrete actions to realize its social responsibility objectives thereby building valuefor its various stakeholders. We respect human rights value our employees and invest ininnovative technologies. In the past the Company has supported innumerable social andcommunity initiatives and continues to do the same.

Some of the key initiatives taken by the company are:


1. Resource conservations activities like monitoring of waterconsumption control of water usage projects were implemented.

2. Successfully implemented ZLD project (Zero Liquid Discharge) whereinmore than 90% of waste water is recycled and reused for the laundry application

3. Revamped our water holding tanks into Rain water harvesting tanksand also increase the ground water recharge

4. Use of non-hazardous chemicals for laundry and printing processeswhich are approved or authorised by ZDHC team and sourced from suppliers who areregistered with ZDHC

5. Company has invested in upgrading the machineries which will enhanceour Productivity Quality and ultimately save more on Energy Water and chemicalconsumption

6. Increased the green belt area by sapling more than 2000 No's inand around of our factories in collaboration our customers

7. As an initiative towards Clean energy peripheral lighting offactories are powered using Solar Energy

Health & Safety:

1. Enhanced our internal audit protocols to ensure fire and buildingsafety is adhered at all times (LABS audit: Life And Building Safety)

2. Achieved Zero Reportable accidents at all our factories

3. Periodical training and awareness to employees on health &safety chapters Personal Hygiene Personal Protective Equipments (PPEs) etc.

4. Improved the ventilation at all factories to ensure good amount ofambient air is provided to achieve healthy working environment

5. Periodical Risk assessment is conducted and appropriatecountermeasures are implemented to minimise the Risk to employees

6. Periodical medical tests are conducted for the employees working atsensitive areas

7. Full time medical staff are available to address any medicalemergencies and health awareness is been provided by medical experts

8. Periodical disinfection of all factories are carried out to keepfactories away from pests virus etc.

9. MAH guidelines are being strictly followed to contain spread ofCOVID-19 at work places 10. COVID task force has been created in every factory to dealwith any emergencies 11. Enhanced the CCTV coverage area at all factories to strengthenour surveillance system

Employee Engagement:

1. HER projects like Health & Finance (HER – Health EnabledReturns) are being implemented at our factories to enhance employee knowledge on personalhealth and to manage financial conditions independently

2. Sakhi Program are driven across the units systematically to reducethe early attrition and absenteeism This has resulted commendable returns to the company

3. Skill enhancement programs are undertaken and Individual employeeskills are evaluated and enhanced to next level through continuous on job training andclassroom sessions

4. Workplace Co-operation Programme is being implemented at somefactories to enhance the cooperation and communication between employee and management


Your Company is committed to maintaining the highest standards ofCorporate Governance. Your Directors adhere to the standards set out by the Securities andExchange Board of India's (SEBI) Corporate Governance practices. Your Company'sCorporate Governance Compliance Certificate is in line with SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and is given along with the CorporateGovernance Report.


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


The equity shares of the Company are listed on the BSE Limited (BSE)and National Stock Exchange of India Limited (NSE). The Company has paid the listing feesto the respective stock exchanges till date. The Company's shares are tradablecompulsorily in the dematerialized form and the Company has entered into an agreement withNational Securities Depository Limited (NSDL) and Central Depository Services IndiaLimited (CDSL) for trading in electronic form.



Under Section 139 of the Companies Act 2013 and the Rules madethereunder it is mandatory to rotate the statutory auditors on completion of the maximumterm permitted under the said section. The Audit committee of the Company has proposed on8th August 2018 the Board of Directors of the

Company has recommended the appointment of MSKA & AssociatesChartered Accountants (ICAI Firm registration number: 105047W) as statutory auditors ofthe Company. MSKA & Associates Chartered Accountants (ICAI Firm registration number:105047W) will hold office for a period of five consecutive years from the conclusion of 15thAnnual General Meeting of the Company till the conclusion of 20th AnnualGeneral Meeting to be held in the year 2023 subject to the approval of shareholders ofthe Company.

Pursuant to the amendment to Section 139 of the Companies Act 2013effective from May 07 2018 ratification by shareholders every year for the appointmentof statutory Auditors is no longer required and accordingly the Notice of ensuing 17thAnnual General Meeting does not include the proposal for seeking Shareholders approval forratification of Statutory Auditors appointment. No qualification adverse remarks ordisclaimer made by the Statutory Auditors with regards to the financial statements for thefinancial year 2019-20. The statutory Auditors of the Company have not reported any fraudas specified under Section 143(12) of the Companies Act 2013.


Pursuant to the Provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Mr. Nagendra D Rao Practicing Company Secretary (CP NO:7731 FCS:5553) to undertake the secretarial audit of the Company. Your Company has complied withthe Secretarial Standards issued by the Institute of Company Secretaries of India on BoardMeetings and Annual General Meetings. The Secretarial Audit Report is given in Annexure tothis Report. The Report does not contain any qualification reservation or adverse remark.Also the Secretarial Audit Report issued under Regulation 24A of SEBI Listing Regulationsis given in Annexure to this Report.

As required under SEBI Listing Regulations your company has obtained acertificate from the Practising Company Secretary that none of the Directors of the Boardof the Company have been debarred or disqualified from being appointed or continuing asDirectors by MCA/Statutory Authorities. The said certificate is forming part of thisReport.


In pursuance of the Conservation of Energy Technology AbsorptionForeign Exchange Earnings in such manner as prescribed under Rule 8 (3) of the Companies(Accounts) Rules 2014 the particulars of the same are given below.


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



Not Applicable


Foreign Exchange earned: Rs. 105890.29 Lakhs Out go: Rs. 19964.44Lakhs


All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness. The Company presents a statement of all related party transactions before theAudit Committee. Prior omnibus approval of the Audit Committee has been obtained for thetransactions which are of foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted along with a statement giving details of allrelated party transactions is placed before the Audit Committee. Further there are nomaterially significant related party transactions during the year under review made by theCompany with promoters Directors Key Managerial Personnel or designated persons whichmay have a potential conflict of interest with the Company at a large.


In Terms of Section 134 of the Companies Act 2013 the particulars ofLoans Guarantees and Investments under Section 186 of the Companies Act 2013 is detailedin Notes to Accounts of the Financial Statements.


Your Company has in place a policy on prevention prohibition andRedressal of Sexual Harassment and Non-discrimination at work place in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. An Internal Complaints Committee (ICC) was set up to redresscomplaints received regarding sexual harassment and discrimination at work place.

During the year 11 complaints of sexual harassment were received andresolved.


Relevant extract of annual return in Form MGT-9 as required underSection 92(3) of the Act read with Rule 12 of Companies (Management and Administration)Rules 2014 (as amended) to be filed with the Registrar of Companies for the financialyear 2019-20 is given in Annexure to this Report. In terms of the requirements of Section134(3)(a) of the Act the complete Annual Return shall be made available on theCompany's website and can be accessed from the Website of the Company


The Company has adequate system of internal control to safeguard andprotect from loss unauthorized use or disposition of its assets. All the transactions areproperly authorized recorded and reported to the Management. Internal Audit is carriedout in a programmed way and follow up actions were taken for all audit observations.


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

The Corporate Social Responsibility Policy as formulated by theCorporate Social Responsibility Committee and approved by the Board of Directors isavailable on the website of the Company at http://


In terms of the provisions of Section 178(3) of the Act and Regulation19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theNomination & Remuneration Committee is responsible for formulating criteria fordetermining qualification positive attributes and independence of a Director. TheNomination & Remuneration Committee is also responsible for recommending to the Boarda policy relating to remuneration of Directors Key Managerial Personnel and other senioremployees.

In line with this Board has adopted Remuneration Policy for DirectorsKey Managerial Personnel and other senior employees of the Company. The copy of the policyis available on the company's website www.


Your Company has adopted a Risk Management Policy for addressing therequirements of risk identification risk assessment risk mitigation plans etc. of thecompany.

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


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


Your Company has a Vigil mechanism and has established a Whistle BlowerPolicy as per the requirement of the Companies Act 2013 and the Listing Obligations andDisclosure Requirements Regulations 2015 to enable all employees and the Directors toreport in good faith any violation of the policy. The Audit Committee of the Boardoversees the functioning of Whistle Blower Policy. Your Company has disclosed the detailsof revised Whistle Blower Policy on its website


Your Company has adopted a code of conduct for prevention of"insider Trading" as mandated by the SEBI and same is available on the websiteof the Company The said policy has been revised effective fromApril 1 2019 in line with SEBI (Prohibition of Insider Trading) (Amendment) Regulations2018.


Your Company has laid down a Code of Conduct Policy which can beaccessed on the Company's Website:


Your Directors take this opportunity to thank the customersshareholders suppliers bankers business partners and associates financial institutionsand the Central and State Governments for their consistent support and encouragement tothe Company. I am sure you will join our Directors in conveying our sincere appreciationto all employees of the Company for their hard work and commitment.