STAKEHOLDERS EMPOWERMENT SERVICES … EMPOWERMENT SERVICES 1 | P A G E ECTOR: TEXTILES STREPORTING DATE 31 MAY, 2016 Gangotri Textiles Ltd Gangotri Textiles Ltd 31st TABLE 1 May, 2016

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: TEXTILES REPORTING DATE: 31ST MAY, 2016

Gangotri Textiles Ltd www.gangotritextiles.com

Gangotri Textiles Ltd 31st May, 2016 TABLE 1 - MARKET DATA (STANDALONE) (As on 27th May, 2016)

NSE Code - GANGOTRI NSE Market Price (₹) 1.30 NSE Market Cap. (₹ Cr.) 4.24

Sector - Textiles Face Value (₹) 5.00 Equity (₹ Cr.) 16.31

52-week High/Low (₹) 1.95/0.80 Net worth (₹ Cr.) -196.60

Business Group - Indian Private TTM P/E N.A. Traded Volume (Shares) 200

Year of Incorporation - 1989 TTM P/BV N.A. Traded Volume (lacs) 0.00

Source - Capitaline

Corporate Office: COMPANY BACKGROUND

25, 25 A Venkatachalam Co-op

Colony, Gangotri Textiles Ltd is a vertically integrated textile unit. The company is engaged in

recycling of waste, open-end spinning, ring spinning, weaving, processing and

garments manufacturing. The company have world class in - house facilities from

processing yarn to manufacture of finished garments. The company's production

facilities are located at Coimbatore, Maharashtra, Dindigul and Erode. The company's

products include cotton yarn, elastic yarn and specialty yarn, fabric and readymade

garments for men. Their garments are marketed under the brands Tibre, Fugo and E

Gen. Gangotri Textiles Ltd was incorporated on July 26, 1989 as a private limited

company with the name Gangotri Textiles Pvt Ltd. The company was promoted by the

Manoj Kumar Tibrewal. Initially, the company started their business as waste-cotton

re-cycler and trader in the late 1980s in Kolkata. In the year 1989, the company was

formally incorporated. In January 1993, the company was converted into public limited

company and the name was changed to Gangotri Textiles Ltd.

R. S. Puram,

Coimbatore – 641 002, Tamil Nadu

Company Website:

www.gangotritextiles.com

TABLE 2 - PRICE PERFORMANCE

27th May,

2016

25th May,

2015

29th May,

2014

% Change CAGR for

2 years 2016 vs 2015 2015 vs 2014

Price (₹) 1.30 1.25 0.85 4.00% 47.06% 23.67%

Trading Volume (Shares)

(yearly avg.) 1,800 2,336 1,078 -22.93% 116.77% -

NSE Market Cap. (in ₹ Cr.) 4.24 4.08 2.77 3.92% 47.29% 23.72%

Source - Money Control

SEBI ORDER IN THE MATTER OF GANGOTRI TEXTILES LTD.

SEBI has passed on order dated 13th April, 2016 restraining the following entities from accessing the securities market:

Sl. No. Entity PAN Period

1 Mr. Purshottam Khandelwal ADZPK9831B 5 years

2 Ms. Sunita Gupta AAHPG4700E 3 years

3 Cosmo Corporate Services Ltd. AAACC3529P 5 years

4 Master Finlease Ltd AAACM6050D 5 years

5 Avisha Credit Capital Ltd. AAACA5715D 1 year

6 Vishvas Projects Ltd. AAACM2047A 1 year

http://www.gangotritextiles.com/


http://www.sebi.gov.in/cms/sebi_data/attachdocs/1460553861487.pdf



2 | P A G E



TABLE 3 - FINANCIALS

(₹ Cr.) 2015 2014 2013 % Change CAGR for

2 years 2015 vs 2014 2014 vs 2013

Turnover 74.35 80.84 86.63 -8.03% -6.68% -7.36%

Net Worth -196.60 -132.41 -77.50 N.A. N.A. N.A.

Current Assets 14.56 25.26 41.91 -42.36% -39.73% -41.06%

Non-Current Assets 177.47 231.80 255.94 -23.44% -9.43% -16.73%

Total Assets 192.03 257.06 297.86 -25.30% -13.70% -19.71%

Investments 15.29 19.52 19.56 -21.67% -0.20% -11.59%

Finance Cost 29.32 27.93 31.35 4.98% -10.91% -3.29%

Long Term Liabilities 18.35 18.27 31.98 0.44% -42.87% -24.25%

Current Liabilities 370.28 371.20 343.38 -0.25% 8.10% 3.84%

Profit After Tax (PAT, ₹ Cr.) -45.93 -54.73 -108.45 N.A. N.A. N.A.

EPS (₹) -16.00 -19.00 -35.00 N.A. N.A. N.A.

P/E Ratio 74.35 80.84 86.63 N.A. N.A. N.A.

Source - Money Control/Annual Report

Discussion as per Company: The Company mentioned in Annual Report for FY 2014-15 that, the company has effected Yarn

turnover of ₹ 43.16 crores as against a turnover of ₹ 45.93 crores previous year. Similarly, the Company has effected Garments

turnover of ₹ 23.04 crores as against a turnover of ₹ 19.22 crores previous year. During the year under review, the performance

of the company was below possible level due to insufficient Working Capital facility and the overall recession prevailed in the

Textile Industry. With the limited resources available, the company found it extremely difficult to run all the units. At the same

time, it was felt not advisable to close one or more Units and the assets are to be maintained in a good condition at least to get a

good price for that matter.

The total outstanding dues to the consortium of Lenders as on 31st March, 2015 including interest accrued is ₹ 3,651.70 crores.

During the previous year the company has requested the Lenders to defer the sale of remaining two Wind Mills since the

disposal of Windmills would directly affect the operations of the remaining units including the garment production. This would

result in loss of production as well as underutilization of manpower. Sale of Windmill should not be seen in isolation and instead

it should be seen as a facilitator of for running the other units. However, the Lenders have sold the remaining two Wind Mills on

6th November, 2014 for a total consideration of ₹ 136.30 crores. This will have serious impact on the working of the company

and the full impact will be felt in the coming years.




3 | P A G E



AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have made similar qualification in last 3 years.

The Auditors on the basis for Qualified Opinion have mentioned that:

In our opinion, there prevails material uncertainty related to events /conditions which individually/ collectively

cast significant doubts on going concern assumption.

The Debtors and Loans & Advances are Subject to confirmation. As at advance of ₹ 4.23 crores continues to be

doubtful of recovery, the same has been provided for in the accounts of the company during year ended 31st March,

2014. However, repeated reminders are being received from lenders for the recovery or the same.

The interest provisions for all loans from Banks have been worked based on the than prevailing CDR Package and

not on the original sanction/revised floating rates. Consequent to the company's non-compliance with CDR package

and reverting back to the original sanction, the differentials Interest that ought to have been provided for in the

accounts is estimated at ₹ 103.00 Crores (from 01st July, 2008 to 31st March, 2015) cumulatively for the above periods.

The estimated loss due to the above is understated to the extent or ₹ 18.00 crores for the year Ended 31st March,

2015.

On examination or the books of accounts and the Information and explanations given to us, the Internal control

system continue to be not commensurate considering the nature of company's business.

The Company has been adopting the method of Accounting for also NETTING of balance when transactions are made

with the same party. For the year ended 31st March, 2015 the company has NETTED the debit and credit balances of

the same party. Hence, Debtors and Creditors have got reduced by ₹ 37.59 Crores each as on 31st March, 2015.

The State Bank or India vide its letter dated the 24th April, 2015 has declared company as wilful defaulters and has

given an opportunity to the company to submit Its representation nature of company's business.

The balances shown under Secured Loans and Balances with bank, confirmation of balance Is yet to be given

by the Bankers. Hence, the balances reflected under these two heads are as par the books of account of the

company.

Management explanation: The Company has mention in the AR for FY 2014-15 that the qualification/observation by Statutory

Auditors are self-explanatory.

As a good governance practice, the Company should explain/comment on each qualification.

Response Comment

Frequency of Qualifications - The above mentioned qualifications have been raised in last three years’

annual reports.

Have the auditors made any

adverse remark in last 3 years? No -




4 | P A G E



TABLE 4: BOARD PROFILE (As on 31st March, 2015)

Regulatory norms Company

% of Independent Directors on the Board 50% 22%

% of Promoter Directors on the Board - 22%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Not Disclosed

Is the post of Chairman and MD/CEO held by the same person? - -

Average attendance of Directors in the Board meetings (%) - 91.30%

Source - Money Control/Annual Report

Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Company has not disclosed the Chairman of the Board. The Company as on 31st March, 2015 has

22% of Independent Directors and hence, does not meet the regulatory requirement.

Board Diversity: The Company has 9 directors out of which 8 are male and 1 is female as on 31st March, 2015. The Company is

compliant with the Listing Regulations, 2015 regarding the requirement of at least one-woman director.

TABLE 5 - FINANCIAL RATIOS

Ratios 2015 2014 2013

% Change

2015 vs

2014

2014 vs

2013

Turn

ove

r

Rat

ios

Inventory Turnover 8.59 6.50 7.10 32.01% -8.34%

Debtors Turnover 19.41 10.57 3.74 83.70% 182.63%

Fixed asset Turnover 0.42 0.35 0.34 20.13% 3.03%

Current Asset Turnover 5.11 3.20 2.07 59.56% 54.83%

Ret

urn

Rat

ios Operating Profit Margin -66.56% -55.32% -62.46% N.A. N.A.

Net Profit Margin -61.78% -67.70% -125.19% N.A. N.A.

Return on Assets (ROA) -23.92% -21.29% -36.41% N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 0.04 0.07 0.12 -42.22% -44.25%

Quick Ratio 0.02 0.03 0.09 -53.90% -60.04%

Cash Ratio 0.01 0.01 0.02 -59.94% -26.62%

Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio N.A. N.A. N.A. N.A. N.A.

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.06 0.05 0.05 8.73% 7.16%

Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A.

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA 29.16 27.77 N.A. 4.99% N.A.

Trading Volume (shares) (avg. of 1 year) 1,705 2,306 1,141 -26.04% 102.15%

Trading Volume (shares) (high in 1 year) 20,000 51,000 12,150 -60.78% 319.75%

Trading Volume (shares) (low in 1 year) 1.00 2.00 1.00 -50.00% 100.00%

Ratio - High/low trading volume 20,000.00 25,500.00 12,150.00 -21.57% 109.88%

Ratio - High/average trading volume 11.73 22.12 10.65 -46.98% 107.65%

Source - Money Control






5 | P A G E



TABLE 6(A): OWNERSHIP & MANAGEMENT RISKS

Dec' 2015 Dec' 2014 Sep' 2013 Comments

Shar

eho

ldin

g

Promoter shareholding 24.53% 24.53% 24.52% No new equity shares were issued

during the period from Sep 2013

to Dec 2015. No major change was

observed in the shareholding

pattern during the said period.

The promoters have pledged

74.84 % of their shareholding.

Public - Institutional

shareholding 8.03% 8.03% 8.59%

Public - Others

shareholding 67.44% 67.44% 66.88%

Non Promoter Non Public

Shareholding 0.00% 0.00% 0.00%

TABLE 6 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares from Sept’ 14 to Dec’ 15

Preferential issue to promoters No preferential issue of shares was made to the promoters in last three years

Preferential issue to others No preferential issue of shares was made to shareholders other than the promoters during

last three years

GDRs issued by the Company The Company did not issue and GDRs during last three years.

Issue of ESOPs/Issue of shares

other than Preferential allotment

The Company does not have any ESOP Scheme. The Company did not issue any shares to

the employees under its ESOP Scheme in last three years.




6 | P A G E



Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the

future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over

a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets




7 | P A G E



Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover

Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a

Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp



8 | P A G E



Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated

by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by

the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year


https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



9 | P A G E



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Contact Information

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Tel +91 22 4022 0322

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[email protected]

www.sesgovernance.com.

Research Analyst: Sumit Tank


mailto:[email protected]

mailto:[email protected]

http://www.sesgovernance.com/