Gokak Textiles Ltd

Dear Members,

The Board of Directors (hereinafter referred to as "the Board") hereby submits the report of the business and operations of the Company along with the Audited Financial Statements of the Company for the Financial Year (FY) ended March 31, 2024. The consolidated performance of the Company and its subsidiary has been referred to wherever required.

The Company's performance, as per Indian Accounting Standards (IND AS), during the Financial Year under review is summarized as follows:

(Rs in Lakhs)

Note : The above figures are extracted from Standalone and Consolidated Financial Statements as per Indian Accounting Standard ("IND AS") and are prepared in accordance with the principles stated therein as prescribed by the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013 ("Act") read with relevant rules issued therein. Previous financial year's figures have been restated on account of approval of Scheme of Arrangement.

The financial year 2022-23 trade data showed an annual fall in exports of textiles. The export of readymade garments fell to $13.05 bn, compared to $14.73 bn the previous year. The yarn shipments declined to $4.23 bn from $4.47 bn. The IMF expected India to grow by 5.9% in FY23-24 despite geopolitical crises, supply chain reorientations, global inflation.

Global growth was projected to decline in 2023 with World Bank even predicting a global recession in 2023.

The IMF predicts global growth rate in 2024 and 2025 will hold steady at 3.2%. The Indian economy is predicted to grow by 6.6 percent in fiscal 2025.

Exports shall continue to see slack on account of geopolitical challenges like the Red Sea crises will continue to disrupt global value chain. The surge in the shipping cost, by about (40-60 percent) and insurance (15-20 percent), also have impact on reduced exports. Major industries which are low margin and high volume, that includes Textiles shall be affected.

However, India's economy looks steady and on an upward trend. Projections indicate that India will be the world's third largest economy by 2027, surpassing US$5 trillion in GDP.

The India Home Textile Market size is estimated at USD 9.60 billion in 2024, and is expected to reach USD 15.36 billion by 2029, growing at a CAGR of 9.84% during the forecast period (2024-2029) Technical Textiles is another sector that is receiving a huge push from Govt. of India. National Technical Textile Mission (NTTM) that was launched in 2020 with the objective of increasing penetration level of technical textiles for 5-10% as compared to 30-70% in the developed market. With a "India 2047- Vision and strategic roadmap for technical textiles" the Govt. of India has expressed its ambitious plans and programmes to develop India as one of the leading hubs of Technical Textiles globally and set up a robust manufacturing base in India.

The cotton prices have almost stayed at values of 62KRs64k/Candy at the beginning of the fiscal year 24 before dropping to 54K/ candy at the end of June-23. The cotton prices further saw a rollercoaster ride with prices surging to 62K/candy in Sept-23 and stabilising at 58K/candy during the new cotton season in October-23.The stability was short lived with prices dropping to 54k/ Candy before surging to 63K/Candy in end of February-24. The prices dropped to 59K/Candy in late March-24 before surging to 63K/Candy level at the end of the fiscal 24.

The uncertainty in cotton prices had an impact on the spinning industry as purchase orders were withheld by the end users. Uncertainty in cotton prices coupled with various macro economics factors has an effect on the Textile value chain. Many spinning industry were forced to operate at partial utilisation or closed.

The company also had to operate under reduced utilisation for the year thus undertaking jobs at higher cost. The uncertainty in the market was to an extent that some of the job-work at our facility was withdrawn.

However, the company is developing new products in woven and knit garments of fibres other than cotton. Products such as school uniforms, shirts, trousers and shorts are being manufactured. New and unique products are being considered to be launched under brand CAMPBELL which is registered.

Garment unit within the premises at Gokak Falls is manufacturing various products of Bamboo and cotton fibers i.e. towels, shawls, blankets, bedsheet etc. Both Knit and woven products are sold over e-commerce platform of the company i.e. https://gokaktrends. com/ Advertisements over social websites to promote new products are also undertaken. Conventional sale of products to increase the presence of the brand is also under progress.

The Solar unit has an installed capacity of 40MW within the premises. The unit has generated about 85.99MUs for this fiscal against budgeted 85.89MUs with a capacity utilisation factor (CUF) of 24.62%. The plant availability was also greater than 95% for the year. Most of the production is sold to other customers within the state of Karnataka. The unit has power purchase agreements with seven clients drawing power under various Discoms across the state. The unit is also registered under the Verified Carbon Standard (VCS) mechanism.

During the year under review the Solar unit has recorded gross income of Rs 4163.11 Lakhs.

The Board of Directors at their meeting held on November 12, 2021 had, inter alia, approved the Scheme of Arrangement ("Scheme") under section 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules and regulations made thereunder.

The Scheme inter alia provides for Reduction of share capital and re-organization of reserves of Gokak Textiles Limited and Amalgamation (by way of absorption) of Suryoday One Energy Private Limited with and into Gokak Textiles Limited.

Upon the Scheme becoming effective, will enable the Transferee Company, i.e. Gokak Textiles Limited to consolidate the ownership of the power business and also provide reliable source of power for its textile division.

The Company had received the observation letter from BSE Limited regarding the Scheme in the month of February 2022 after that the Scheme application was filed before the Hon'ble NCLT, Bengaluru Bench. The matter was listed before the Hon'ble NCLT, Bengaluru Bench. The Hon'ble NCLT, Bengaluru Bench passed the order to convene the meeting of Equity Shareholders of the Company. The meeting of Equity Shareholders of the Company was held on December 26, 2022 and the Shareholders / Members gave approval to the Scheme of Arrangement.

The Scheme Petition was filed with Hon'ble NCLT, Bengaluru Bench and the order approving the Scheme was passed by the Hon'ble NCLT, Bengaluru Bench on April 24, 2024.

The Appointed date is April 01, 2022. Effective date of the Scheme is May 24, 2024.

The Scheme as approved by the Board and Members is available on the website of the Company at www.gokaktextiles.com

GPEL is engaged in generation of hydro-electric power and other renewable and non-renewable sources of energy. Significant portion of power generated is utilised for captive consumption of Gokak Textiles Limited, the holding company.

During the year under review, GPEL has recorded gross income of Rs 686.85 lakhs (previous year Rs 961.79 lakhs) and net loss for the year of Rs (436.18) lakhs (previous year net profit Rs 14.50 lakhs).

During the year under review GPEL generated 15.25 Million Units of electricity (previous year 23.8 Million Units were generated). Details of GPEL is set out in the statement in form AOC-I, pursuant to section 129 of the Companies Act, 2013 and is attached herewith as Annexure I to this Report.

The Consolidated Financial Statements of the Company and its subsidiary are prepared in accordance with Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Companies Act, 2013. The Notes to Consolidated Financial Statements are disclosed and forms part of the Consolidated Financial Statements.

(Rs in Lakhs)

(Rs in Lakhs)

During the year, standalone revenue was Rs 13462.33 Lakhs (previous year Rs 11449.88 Lakhs), Consolidated revenue was Rs 13401.41 Lakhs (previous year Rs 11975.35 Lakhs).

During the year, standalone exceptional income was Rs 938.95 Lakhs (previous year NIL), Consolidated exceptional income was Rs 938.95 Lakhs (previous year Rs 212.35).

During the year, standalone EBIDTA profit before exceptional items is Rs 1774.49 Lakhs, (previous year Rs 1186.72 Lakhs). Consolidated EBIDTA profit before exceptional items is Rs 1751.27 Lakhs), (previous year Rs 1896.70 Lakhs).

During the year, standalone Profit/(Loss) Before Tax is Rs (1756.70) Lakhs (previous year Rs (3233.87) Lakhs). Consolidated Profit/ (Loss) Before Tax is Rs (1943.41)Lakhs (previous year Rs (2966.74) Lakhs).

During the year, Standalone Net Profit/(Loss) is Rs (1680.76) Lakhs (previous year Rs (3167.27) Lakhs). Consolidated Net Profit/ (Loss) is Rs (1867.61) Lakhs (previous year Rs (2902.05) Lakhs).

The standalone year-end Gross Block decreased to Rs 56097.44 Lakhs (previous year Rs 58331.33 Lakhs) mainly due to sale/ held for sale of plant & machinery, furniture & fixtures, etc. The consolidated year-end Gross Block decreased to Rs 68912.58 Lakhs (previous year Rs 71143.93 Lakhs) mainly due to sale/ held for sale of plant & machinery, furniture & fixtures, etc.

The standalone current liabilities marginally increased to Rs 9141.98 Lakhs (previous year Rs 9139.84 Lakhs) the current liabilities for current year and previous year are almost comparable. The consolidated current liabilities decreased to Rs 9187.35 Lakhs (previous year Rs 15883.73 Lakhs) primarily due to decrease in Borrowings being converted into perpetual loan and captured as instrument entirely equity in nature in current Financial Year.

During the year, standalone secured loan fund was Rs 15157.78 Lakhs (previous year Rs 15108.66 Lakhs). The consolidated secured loan funds was Rs 15157.78 Lakhs (previous year Rs 15108.66 Lakhs) primarily due to further working capital term loan taken.

During the year, standalone unsecured loan funds increased to Rs 10781.33 lakhs (previous year Rs 9949.90 Lakhs) on account of accrued interest for the year. The consolidated unsecured loan funds increased to Rs 11627.91 Lakhs (previous year Rs 9949.90 Lakhs) on account of accrued interest for the year.

During the year, standalone perpetual loan funds increased to Rs 13892.58 lakhs (previous year Rs 7465.27 Lakhs) on account of novation of loan amounting to Rs 6427.30 lakhs (including accrued interest) taken by subsidiary Company from Shapoorji Pallonji And Company Private Limited (Holding Company of the Company) and simultaneously this amount was converted to perpetual loan.

The consolidated perpetual loan funds increased to Rs 13972.58 Lakhs (previous year Rs 7545.27) on account of novation of loan amounting to Rs 6427.30 lakhs (including accrued interest) taken by subsidiary Company from Shapoorji Pallonji And Company Private Limited (Holding Company of the Company) and simultaneously this amount was converted to perpetual loan.

The paid-up Equity Share Capital and preference share capital of the Company as on March 31, 2024 was Rs 649.93 Lakhs and NIL respectively. During the year under review, the Company has not issued any shares with differential voting rights or ‘sweat equity shares' and has not granted any stock options. As on March 31, 2024 none of the Directors of the Company hold shares or convertible instruments of the Company.

In view of the losses during the current year, the Board of Directors regrets their inability to declare dividend. No amount was transferred to the reserves during the year.

There were no material changes and commitments affecting the financial position of the Company which have occurred, between the end of the financial year of the Company to which the financial statements relate and the date of the Report.

Our success as an organization depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the opportunities and key risks, anticipated impact on the Company and mitigation strategy is as follows:

Risk management process includes identification of risks, its underlying dynamics, mitigation mechanism, prioritization of risk, measurement of key indicators and establishing a monitoring system. A Company-wide awareness of risk management policies and practices are being inculcated to minimize the adverse effect of risks on the operating results and the subject of management of risks is being approached in a planned and coordinated manner. Elucidation of role clarity, understanding of level of authority and reporting system is expected to help this process significantly.

The Company has identified key risks such as Market risks, Regulatory risks, Human resource risks, Commodity price risks. Key Risks include fluctuation in raw materials prices, increased global and local competition, sales channel disruption. Retaining the existing talent pool and attracting new talent. Regulatory Risks include changes in taxation regime, government policies with respect to textiles, pollution control, Industrial Relation issues & regulatory compliances.

Compliance with laws and regulations is an essential part of your Company's business operations. We are subject to laws and regulations in diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.

Your Company's operations are increasingly dependent on IT systems and the management of information. Increasing digital interactions with customers, suppliers and consumers place even greater emphasis on the need for secure and reliable IT systems and infrastructure, and careful management of the information that is in our possession.

The cyber-attack threat of unauthorised access and misuse of sensitive information or disruption to operations continues to increase. To reduce the impact of external cyber-attacks impacting our business, we have sufficient security measures including firewalls and threat monitoring systems in place, complete with immediate response capabilities to mitigate identified threats. Our employees are trained to understand these requirements.

The Company has an Internal Control systems, which ensures that all transactions are satisfactorily recorded and reported and all assets are protected against loss from an unauthorized use or otherwise. The internal control systems are supplemented by an internal audit system carried out by independent firms of Chartered Accountants and a periodical review by the management. The findings of such Internal Audits are addressed through suitable corrective measures. The Audit Committee of the Board meets at a regular interval and advises on significant issues raised by, both, the Internal Auditors and the Statutory Auditors. The process of internal control, systems, statutory compliance, risk analysis, information technology and its management are woven together to provide a meaningful support to the management of the business.

Batliboi & Purohit, Chartered Accountants, the statutory auditors of the Company have audited the financial statements included in this annual report and have issued report, inter alia, on the internal financial controls over financial reporting as defined under section 143 of the Companies Act, 2013.

During the year under review, the Company has not accepted any deposits from public falling within the meaning of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

As per the provisions of Section 152(6) of the Companies Act, 2013, Mr. Vinod Bhandawat is due to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board of Directors recommends his re-appointment as Director of the Company.

Mr. Ramesh R. Patil, Chief Executive Officer & Managing Director, resigned w.e.f close of business hours of January 06, 2024. Ms. Tripti J. Navani, Non-Executive Non-Independent Director of the Company, resigned w.e.f close of business hours of February 14, 2024.

The Board places on record its appreciation for the invaluable services and guidance rendered by Mr. Ramesh R. Patil and Ms. Tripti J. Navani to the Board and the Company during their tenure as Member of the Board/Committees of the Board.

Based on the recommendation of Nomination and Remuneration Committee and subject to approval of the Shareholders of the Company, the Board appointed Mr. Gautam V. Kumtakar as Managing Director & Chief Executive Officer for a term of three years commencing from January 08, 2024.

The Shareholders of the Company by way of postal ballot, results of which were declared on April 05, 2024 approved appointment of Mr. Gautam V. Kumtakar as Managing Director & Chief Executive Officer for a term of three years commencing from January 08, 2024.

Key Managerial Personnel of the Company as on March 31, 2024 were Mr. Gautam V. Kumtakar, Managing Director & Chief Executive Officer, Mr. Rakesh M. Nanwani, Company Secretary and Mr. Vipan Kumar Sharma, Chief Financial Officer.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015 and there has been no change in the circumstances which may affect their status as Independent Directors during the year.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for attending meetings of Board/ Committee of the Company.

Independent Directors are familiarized with their roles, rights and responsibilities in the Company through presentation made to them from time to time. The details of familiarization programes conducted have been hosted on the website of the Company and can be accessed at www.gokaktextiles.com

The details pertaining to the composition of the Audit Committee of the Board of Directors are included in the Corporate Governance Report which forms part of this report.

The Board met at least once in each quarter and 4 (four) meetings of Board were held during the year and the maximum time gap between two Board meetings did not exceed the time limit prescribed under the Companies Act, 2013. The details have been provided in the Corporate Governance Report.

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR), 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as, the evaluation of the working of its Committee(s).

The performance of the Board was evaluated by the Board on the basis of the process laid in the Charter for Performance Evaluation, the structured questionnaires for performance evaluation, parameters/criteria, such as, degree of fulfillment of key responsibility by the Board, Board Structures and Composition, establishment and delineation of responsibilities to the Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics and quality of relationship between the Board and the Management.

The performance of the committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility was evaluated by the Board on the basis of parameters/criteria such as degree of fulfillment of key responsibilities, adequacy of committee composition, effectiveness of meetings, committee dynamics and, quality of relationship of the committee with the Board and the Management.

The Board reviewed the performance of the individual Directors (without the concerned director being present).

In a separate meeting of Independent Directors, the performance of Non-Independent Directors of the Board as a whole and the performance of the Chairman were evaluated.

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed and adopted a policy for selection and appointment of Director, Senior Management and their remuneration. Remuneration Policy of the Company acts as a guideline for determining, inter alia, qualifications, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal, and evaluation of the performance of the Directors, Key Managerial Personnel and Senior Managerial personnel.

Nomination & Remuneration Policy is annexed as Annexure II to this Report.

Disclosure as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure III to this Report.

Pursuant to the provisions of section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Batliboi & Purohit, Chartered Accountants (ICAI Firm Registration no. 101048W) were appointed as the Statutory Auditors of the Company for a term of 5 (five) years to hold office from the conclusion of the 11^th Annual General Meeting of the Company till the conclusion of the 16^th Annual General Meeting of the Company.

Pursuant to the provisions of section 139 (2), M/s Batliboi & Purohit, Chartered Accountants, were eligible to be re-appointed as statutory auditors of the Company for another term of five years.

The shareholders of the Company at their 16^th Annual General Meeting held (AGM) held on September 29, 2022 have appointed Batliboi & Purohit, Chartered Accountants as Statutory Auditors of the Company until the Conclusion of the 21^st Annual General Meeting of the Company to be held in the year 2027 and authorized the Board to fix the remuneration.

The Audit Report of the Statutory Auditors forms part of the Annual Report. The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory.

As per the requirements of section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Rules, 2014, the cost accounts of the Company are required to be audited by a Cost Accountant. The Board of Directors of the Company on the recommendation of the Audit Committee, appointed Mr. Mukesh R. Dekhtawala, Cost Accountant as Cost Auditor for the financial year 2024 – 2025 on a remuneration of Rs1.50 lakhs plus out of pocket expenses. As required under the Companies Act, 2013 necessary resolution seeking Shareholders ratification for the remuneration to Cost Auditor is included in the Notice convening the 18^th Annual General Meeting of the Company.

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 has appointed KDSH & Associates LLP, Company Secretaries, to conduct Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

The Secretarial Audit of Gokak Power & Energy Limited, (Material Subsidiary) for the FY 2023-24 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Report of the Secretarial Auditor of Gokak Power & Energy Limited does not contain any qualification, reservation or adverse remark or disclaimer.

The provisions of the Companies Act, 2013 relating to Corporate Social Responsibility were not applicable to the Company for the FY 2023-24. The Board of Directors of the Company has, however, voluntarily constituted a Corporate Social Responsibility Committee in compliance with Section 135 of the Act.

The Company is committed to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical.

The Company has Whistle Blower Policy/Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The policy is also available on the website of the Company.

Pursuant to Section 92(3) read with Section 134 (3)(a) of the Companies Act, 2013, the Annual Return as on March 31, 2024 is available on website of the Company viz., www.gokaktextiles.com

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with the Promoter, Directors, Key Managerial Personnel or the designated persons which may have a potential conflict with the interest of Company at large except power purchase from the subsidiary company for captive consumption.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of a foreseen and repetitive nature. The transactions entered pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis.

Form AOC-2 is annexed as Annexure V to this report, pursuant to section 188 of the Companies Act, 2013. The policy on Related Party Transactions as approved by the Board is is available on website of the Company viz., www.gokaktextiles.com.

The guiding principle of the Code of Corporate Governance is ‘harmony' i.e balancing the need for transparency with need to protect the interest of the Company, balancing the need for empowerment at all levels with the need for accountability. A detailed report on Corporate Governance is annexed as a part of this Annual Report and the Management Discussion and Analysis report forms part of this report.

A Certificate on compliance of conditions of Corporate Governance issued by Mr. Kiran B. Desai, Designated Partner, KDSH & Associates LLP, Company Secretaries is annexed to the Report on Corporate Governance.

A certificate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority is annexed to the Report on Corporate Governance.

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status and Company's operations in future.

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace as per with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Internal Complaints & Committee (ICC) has been setup to redress complaints received regarding sexual harassment as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the ICC includes external member. During FY 2023-24, no complaints on sexual harassment were received.

Pursuant to the provisions of Section 134(3)(c) and 134 (5) of the Companies Act, 2013 and based on the representations received from the operating management, the Directors hereby confirm that :a. in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures; b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; c. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. they have prepared the annual accounts on a going concern basis; e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Company has developed a strong human resource base which helped the company to retain the employees for a very long time in view of learning opportunity, comfortable housing, very good educational facilities at minimum educational fees for the children of the Employees. The organization also has good HR Policies for employees in place.

In view of low attrition of the employees Management is encouraging employees to undertake higher responsibilities in the ladder of hierarchy so that the fresh talent hiring at the bottom of the organizational pyramid provides continuity of development at each level. The Company provides skill building trainings to employees internally. The hiring of experienced employees from outside is the last priority and first opportunity is provided to employees in line function or cross function as well.

The company has different HR processes for development of human resource which includes performance management system for appraisal of employee performance, skill development and believes in the fundamentals of Train, Retrain & Retain employees by way giving three R, Rewards, Recognition & Respect to employees.

The Management has developed very good cordial Industrial relations and has been able to carry out operations successfully despite continued challenges of market down turn, fierce competition having high input cost by achieving flexibility in operations suitable to the requirements of business.

The Hon'ble NCLT, Bengaluru Bench has passed the order on April 24, 2024 approving the Scheme of Arrangement amongst Suryoday One Energy Private Limited (SOEPL) and Gokak Textiles Limited (GTL) and their respective shareholders.

The Scheme inter alia provides for Reduction of share capital and re-organization of reserves of Gokak Textiles Limited and Amalgamation (by way of absorption) of Suryoday One Energy Private Limited with and into Gokak Textiles Limited.

Upon the Scheme becoming effective, the Solar Power Generation business of SOEPL is merged with GTL and the new segment "Power" has been augmented.

The installed capacity of Solar Unit is 40MW.

Since no dividend has been declared by the Company, there was no unpaid/unclaimed dividend and accordingly the provisions of Section 125 of the Companies Act, 2013 do not apply.

The Company has not undergone for valuation during the year.

Particulars of Employees and Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo a. The information required pursuant to Section 197 of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company. b. Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as Annexure VI to this report.

Statements in the Board's Report and Management Discussion & Analysis describing the Company's objectives, estimates, expectations or projections, outlook etc., may be ‘forward looking statements' within the meaning of the applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to factors beyond control. Important factors that could make a difference to the Company's operations include economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the government regulations, tax laws and other statutes and other factors such as litigation and industrial relations.

Your Directors acknowledge and thank all stakeholders of the Company viz. customers, members, employees, dealers, vendors, banks and other business partners for their valuable sustained support and encouragement. Your Directors look forward to receiving similar support and encouragement from all stakeholders in the years ahead.