Gujarat Cotex Ltd Management Discussions

(a) Industry structure and developments:

Company is engaged in business of manufacturing, bleaching, weaving, printing and selling of cloths of all types and other like materials.

(b) Opportunities and Threats:

Opportunities:

1. Increase in consumption pattern across the country along with the rising demand for high quality premium fabrics.

2. Large and potential domestic and international market. Promising export potential. Threats:

1. Pricing pressure due to opening up of quotas.

2. Enhanced competition from other countries.

3. Rising production cost from increasing wages, power and interest cost.

(c) Product-wise performance:

Company operates in single segment of wholesale trading in fabrics and segment wise reporting is not applicable and further the performance is expected to improve.

(d) Outlook:

The Company shall continue to explore its policy of expansion based on availability of resources and opportunity.

(e) Risks and concerns:

Risk is an inherent part of any business. There are various types of risks, that threat the existence of a company like Strategic Risk, Business Risk, Finance Risk, Finance Risk, Environment Risk, Personnel risk, Operational Risk, Reputation Risk, Regulatory Risk, Technology Risk, Political Risk etc. Your company aims at enhancing and maximizing shareholders value by achieving appropriate trade -off between risk & returns.

Input costs including power and labour, are extraneous factors which make it difficult for the company to face competition.

(f) Internal control systems and their adequacy:

The company has adequate internal control systems and is in process of further strengthening the existing internal control systems. The financial statements are reviewed periodically by the management. The company has set up an internal Audit trail whereby deviations, if any, can be brought to the notice of the management quickly and remedial actions are initiated immediately.

(g) Discussion on financial performance with respect to operational performance:

Particulars	As on 31/03/2021	As on 31/03/2020
Turnover and other income	6,19,54,761.00	7,18,12,308.00
Gross profit/Loss (-) before Financial Charges & depreciation	31,38,153.00	(12,21,309.00)
Interest and Financial Charges	1,74,188.00	1,31,368.00
Profit/Loss(-) before depreciation	29,63,965.00	(13,52,677.00)
Depreciation	3,89,526.00	3,28,729.00
Profit /Loss(-) After Tax for the year	(17,35,365.00)	(17,21,372.00)

(h) Material developments in Human Resources / Industrial Relations front, including number of people employed:

The industrial relations remained cordial throughout the year. The employees of the company have extended a very productive co-operation in the efforts of the management to carry the company the greater heights. Continuous training down the line is a normal feature in the company to upgrade the skills and knowledge of the employees and workmen of the company.

(i) Details of Changes in key financial ratios:

(i) Debtors Turnover: For the year 2020-21,145.78 and the year 2019-20, 47.89.

(ii) Inventory Turnover: For the year 2020-21, 0.05 and the year 2019-20, 0.01.

(iii) Interest Coverage Ratio: For the year 2020-21, (8.96) and the year 2019-20, (12.16).

(iv) Current Ratio: For the year 2020-21,1.51 and the year 2019-20, 4.92.

(v) Debt Equity Ratio: For the year 2020-21,1.08 and the year 2019-20, 0.17.

(vi) Operating Profit Margin: For the year 2020-21, (2.52) and the year 2019-20, (2.23).

(vii) Net Profit Margin: For the year 2020-21, (2.80) and the year 2019-20, (2.40).

(viii) Return on Networth: For the year 2020-21, (2.95) and the year 2019-20, (2.85).

Disclosure of Accounting Treatment: Financial statements have been prepared in accordance with applicable accounting standards, hence Para B(2) of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the company.

C. Corporate Governance Report: Pursuant to Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provision of Para C of Schedule V of SEBI (LODR) relating to Corporate Governance Report is not applicable to the company.

D. Declaration signed by the chief executive officer stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management: Pursuant to Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provision of Para D of Schedule V of SEBI (LODR) relating to Declaration by CEO is not applicable to the company.

E. Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall be annexed with the directors report: Pursuant to Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provision of Para E of Schedule V of SEBI (LODR) relating to Compliance Certificate is not applicable to the company.

F. Disclosures with respect to demat suspense account/unclaimed suspense account: 181622 Shares of the company are lying in Suspense Account.

	For Gujarat Cotex Limited
	Sd/-	Sd/-
Place: Silvassa	Shaileshkumar Jayantkumar Parekh	Chetankumar Shaileshkumar Parekh
Date: 21/08/2021	Managing Director	Director and CFO
	[DIN:01246270)	(DIN:01246220)