Fexm gokaldas exports CONTRIBUTION

STUDY ON THE FUNCTIONING AND CONTRIBUTION IN EXPORT
1 | P a g e N A T I O N A L I N S T I T U T E O F F A S H I O N T E C H N O L O G Y H Y D E R A B A D
( M I D – T E R M S U B M I S S I O N )
CONTENTS
COMPANY OVERVIEW ............................................................................................................................................3
COMPANY HISTORY ................................................................................................................................................4
ORGANIZATIONAL CHART...................................................................................................................................5
THE JOURNEY......................................................................................................................................................6
LEAN....................................................................................................................................................................6
PRODUCTS ..............................................................................................................................................................8
DENIMS...............................................................................................................................................................8
OUTERWEAR.......................................................................................................................................................8
MEN’S BOTTOMS................................................................................................................................................9
MEN’S SHIRTS/T-SHIRTS .....................................................................................................................................9
WOMEN’S WEAR ................................................................................................................................................9
KIDSWEAR...........................................................................................................................................................9
SPORTS WEAR.....................................................................................................................................................9
FORMAL WEAR .................................................................................................................................................10
MANUFACTURING ................................................................................................................................................10
FACTORY MANUFACTURING PROCESSES .........................................................................................................10
LAYING..........................................................................................................................................................12
CUTTING .......................................................................................................................................................12
SEWING LINES...............................................................................................................................................12
CHECKING .....................................................................................................................................................13
IRONING........................................................................................................................................................13
FINISHING .....................................................................................................................................................13
EMBROIDERY ................................................................................................................................................14
QUILTING ......................................................................................................................................................14
POLYFILL MANUFACTURE .............................................................................................................................14
LASER ETCHING.............................................................................................................................................15
PRINTING ......................................................................................................................................................15
WASHING......................................................................................................................................................15
CUSTOMERS..........................................................................................................................................................16
PUMA................................................................................................................................................................16
RAYMOND.........................................................................................................................................................16
O’NEILL..............................................................................................................................................................16
GAP ...................................................................................................................................................................16
MEXX.................................................................................................................................................................17

DIESEL ...............................................................................................................................................................17
DIVIDED ............................................................................................................................................................17
ADIDAS..............................................................................................................................................................18
M&S..................................................................................................................................................................18
LEVI’S ................................................................................................................................................................18
COLUMBIA – SPORTSWEAR COMPANY ............................................................................................................19
GUESS ...............................................................................................................................................................19
DOCKERS...........................................................................................................................................................19
NIKE ..................................................................................................................................................................20
HOLLISTER.........................................................................................................................................................20
HURLEY .............................................................................................................................................................20
REEBOK .............................................................................................................................................................21
REID & TAYLOR .................................................................................................................................................21
ABERCROMBIE & FITCH ....................................................................................................................................22
OLD NAVY .........................................................................................................................................................22
H&M .................................................................................................................................................................22
BANANA REPUBLIC ...........................................................................................................................................22
UNITED COLORS OF BENETTON........................................................................................................................22
ANNUAL REPORT ANALYSIS..................................................................................................................................23
REVIEW OF OPERATIONS..................................................................................................................................23
KEY COSTS AND THEIR IMPACT ON PROFITABILITY..........................................................................................24
SHAREHOLDER INFORMATION .........................................................................................................................31
LISTING..............................................................................................................................................................31
MANAGEMENT DECISION AND ANALYSIS ............................................................................................................34
INDUSTRY SCENARIO ........................................................................................................................................35
FINANCIAL STATEMENT....................................................................................................................................36
SALES VALUE CONTRIBUTED BY PRODUCT MIX ...............................................................................................38
OPPORTUNITIES AND CHALLENGES..................................................................................................................38
KEY FOCUS AREAS.............................................................................................................................................41
RISKS AND CONCERNS ......................................................................................................................................41
COMPARISONS WITH COMPETITORS ...................................................................................................................42
PEER COMPARISON ..........................................................................................................................................42
CONCLUSION ........................................................................................................................................................46
REFERENCES..........................................................................................................................................................47

COMPANY OVERVIEW
Gokaldas Exports was a family-owned business founded in 1979 that had grown into India’s
largest apparel exporter by the mid-2000s.Its founder, Jhamandas H. Hinduja, had bequeathed
control of the company to three sons, each of whom brought in his own son. By the end of
2004, Gokaldas had 43 factories with 258 production lines scattered in and around the southern
India city of Bangalore. It had more than 35,000 workers, which was nearly double the number
it employed in 1999- 2000, and its total sales had increased at an annual compounded growth
rate of 19.67 percent over this period. The company was valued at approximately $215 million
and exported nearly 90 percent of its production. However, to maintain its already slim margins
in an increasingly competitive environment, Gokaldas needed to become more efficient.
Company leaders hoped to improve profits by 10-15 percent without adding resources and
Gaurav Hinduja, COO of the sportswear division and a third generation family member,
became convinced that Lean would be the best means to make this happen.
To implement major changes in a successful, closely-held family business would not be easy.
Gokaldas prided itself as a one-stop-shop able to produce virtually any type garment required
by its clients. To ensure customer satisfaction, it adhered to a business philosophy of
“punctuality, quality, reliability, speed, transparency and flexibility.” It emphasized continuous
innovation and escalating productivity while striving to control every aspect of its supply chain,
from “design to delivery,” even holding equity in a shipping yard at the port. Over the years,
Gokaldas had won many of the top export awards given to garment manufacturers in India
including, in 2004, the coveted “Highest Exporter Award” from the Confederation of Indian
Apparel Exporters. Its clients read like an A-list of the world’s top apparel retailers: Nike, Gap,
Old Navy, banana republic and Abercrombie & Fitch. However, by the mid-2000s, pricing
pressure was on the rise while productivity was declining and quality slipping. Overtime was
increasingly required to meet deadlines – in 2003-2004; several orders had even been partly
rejected due to delayed delivery. Gokaldas executives worried about the demands that the
company’s recent rapid growth might place on management and resources. Moreover, the
global apparel export environment was about to change when the Multi-Fiber Arrangement
(MFA), which had governed trade in textiles and apparel since 1974, ended on January 1, 2005.
This was exposing Gokaldas to relentless competition from Chines producers. But when

Gaurav Hinduja suggested Lean as a means for addressing these problems, his fellow
executives – who were also his father, uncles, and cousins – were unconvinced.
COMPANY HISTORY
Gokaldas Exports was founded by the late Jhamandas Hinduja in Bangalore in 1979.5 Hinduja
had moved to Bangalore from Pakistan prior to the 1947 partition of India and established a
business that manufactured silk scarves and stoles. On a trip to Copenhagen in 1971, he had
his flash of inspiration that started his success story. One of his business contacts asked him to
copy two shirts, a request, it turned out that was incredibly fortuitous as the market for silk
scarves was increasingly saturated. Hinduja was in need of a new business model and shirts
appeared to be the way forward. “Those two cheesecloth shirts became the cornerstone of our
business,” said Hinduja’s third son, Dinesh, who joined Gokaldas at its founding and would go
on to run the company with his brothers, Madanlal and Rajendra.6
Manufacturing conditions in the early years were rudimentary.
“I entered the industry in 1979, with $5,000 (Rs 50,000 then) and 40 leg machines in a 1,000
square foot rented space,” Dinesh Hinduja explained. “We worked in shifts, making garments
in the morning and packing them towards the evening in the same area.”
The company targeted export markets – primarily the United States and Europe – and began to
expand through partnership arrangements, the most conducive approach to growth in the
regulatory environment of the time, which favoured small-scale industry. In 1981-1982, the
Apparel Export Promotion Council of India’s Ministry of Textiles awarded Gokaldas its “Top
Exporter Award,” one of dozens such accolades the company would receive in coming years.
As volume grew, technology was introduced, starting with an HCL Workhorse, India’s first
desktop computer. The screen glowed green, it had a five-inch floppy and a heavy putty-grey
keyboard.
Hinduja senior did not trust it and insisted that manual accounting records be kept in the event
of a computer breakdown. Gradually, however, the factory floors were transformed as the
second generation of Hindujas introduced increasingly advanced, computer-controlled
machines to replace those run on leg power.

“Everybody thinks garment manufacturing is a dignified tailoring shop,” said Hinduja. “But,
you’d be amazed at the kind of IT that goes into a manufacturing setup of our size. We are
more like Toyota's assembly line - we have the systems they have.”
Gokaldas factories were fully integrated, meaning they also made labels, tags, elastics, cords,
cartons and packing materials – everything needed for any garment produced. The 70 or 80
manual patternmakers – once a source of numerous problems – had been replaced by five to
six CAD systems. Huge industrial washing machines churned denim garments to give them the
look of the hour – stonewashed, acid-washed, bleached – while other garments were manually
spray painted, sand-blasted or laser-engraved. Massive multi-head embroidery machines
emblazoned shirts and jackets with appliqués, badges, and embroidery. Gokaldas was able to
provide its
clients with “any kind of garment right from ultra-formal to ultra-casual across men’s, women’s
and children’s wear.”7 Eventually, it specialized in outerwear, like coats and jackets; active
wear, like warm-ups and swimsuits; bottoms, like trousers and shorts; and casual wear,
including shirts, blouses and dresses.
ORGANIZATIONAL CHART

THE JOURNEY
12/2006 -Nike lean vendor summit
03/2007 -tbm assessment
05/2007 -first kaizen event at plant
08/2007 -executive exchange at Portugal
09/2007 -ceo boot camp
03/2008 -policy deployment
04/2008 -first lean certification for 12 people
05/2008 -break open to 4 new plants
09/2008 -first business process kaizen
10/2008 -gex supervisor training
12/2008 -100th kaizen event
03/2009 -2nd sml
LEAN
Lean is a management philosophy that began at Toyota, where it is also known as the Toyota
Production System (TPS).3 The TPS pursues efficiency by aiming for “the complete
elimination of all waste” in its production processes. TPS is based on two basic concepts. The
first is jidoka, which is generally translated as “automation with a human touch” and means
that equipment is stopped the moment a problem is discovered so defective products are not
made. The second is “Just-in-Time,” which means that each process makes only what is
immediately needed for the next in one continuous flow. Continuous improvement and the
elimination of muda (Japanese for waste) are the hallmarks of Lean which has been extended
from auto production to other parts of manufacturing and, more recently, to services like retail
and healthcare. But Lean was alien to the garment industry in India and, with the time and
considerable consulting fees it entailed, was an expensive undertaking. The Hindujas had been
running Gokaldas successfully for nearly three decades – most family members saw little need

to rock the boat. Why bring in expensive consultants to fix a firm that had grown to become
the largest and most successful apparel firm in India?
The challenges facing Gokaldas mirrored those of the wider Indian economy. The country had
enjoyed tremendous growth since the dismantling of the License Raj4 in the 1980s and the
liberalization of the 1990s. But by the end of the 2000s productivity levels lagged behind other
emerging economies like China. Average management quality scored poorly in Indian
manufacturing relative to other countries [see Exhibit 1]. This low average score was caused
by a “long tail” of very poorly managed firms compared to more developed countries like the
US
[Exhibit 2]. What could be done to bring the mediocre to the best and to make the best in India
-Like Gokaldas - even better?

PRODUCTS
DENIMS
OUTERWEAR

MEN’S BOTTOMS
MEN’S SHIRTS/T-SHIRTS
WOMEN’S WEAR
KIDSWEAR
SPORTS WEAR

FORMAL WEAR
MANUFACTURING
Gokaldas Exports has four decades of partnering the world's most trusted fashion labels, 30
state-of-the-art factories and 32000 employees. We have led the Indian readymade garment
industry, year after year, earning customer loyalty, winning industry awards and growing our
reputation for reliability. We've done it by orienting ourselves to fashion trends and customer
needs, investing in the latest technology, relentlessly training our highly-skilled workforce
and setting the highest standards for ourselves in both the production process and the end-
product.
FACTORY MANUFACTURING PROCESSES
Ready to wear apparel or garment manufacturing involves many processing steps, beginning
with the idea or design concept and ending with a finished product. Apparel manufacturing
process involves Product Design, Fabric Selection and Inspection, Patternmaking, Grading,
Marking, Spreading, Cutting, Bundling, Sewing, Pressing or Folding, Finishing and
Detailing, Dyeing and Washing, QC etc.

LAYING
CUTTING
SEWING LINES

CHECKING
IRONING
FINISHING

EMBROIDERY
QUILTING
POLYFILL MANUFACTURE

LASER ETCHING
PRINTING
WASHING

CUSTOMERS
PUMA
PUMA is one of the world’s leading Sports Brands, designing, developing, selling and
marketing footwear, apparel and accessories. PUMA offers performance and sport-inspired
lifestyle products in categories such as Football, Running, Training and Fitness, Golf, and
Motorsports.
RAYMOND
Raymond is one of the largest players in fabrics, designer wear, denim, cosmetics & toiletries,
engineering files & tools, prophylactics and air charter services in national and international
markets. All our plants are ISO certified, leveraging on cutting-edge technology that adheres
to the highest quality parameters while also being environment friendly.
O’NEILL
O’Neill, the original Californian surf, snow and lifestyle brand which deals with Apparel,
sporting goods, Swimwear, Surf wear. O’Neill will always be committed to progressing that
evolution and growing its reputation as one of the world’s leading youth lifestyle brands.
GAP

A leading global specialty retailer offering clothing, accessories and personal care products for
men, women, children and babies. With more than 136,000 employees and more than 3,100
company-operated stores and 375 franchise stores, our presence is felt around the world.
MEXX
Mexx international – the world is our home. Mexx has been setting fashion trends around the
world since 1986. Collections and accessories are sold in famous department stores, chain
stores, specialist stores, nearly 300 franchise stores and over 100 wholly-owned branch stores.
And all the products, from business suits to baby romper suits.
DIESEL
Diesel S.p.A. is an Italian design company. It is best known for high end prêt-à-porter clothing
aimed at the young adult market. The company has a major intimates and beachwear division
for men and women that is carried in the retail and department stores.
DIVIDED

ADIDAS
Adidas AG is a German multinational corporation that designs and manufactures sports
clothing and accessories. Adidas also produces other products such as bags, shirts, watches,
eyewear, and other sports- and clothing-related goods. Adidas is the largest sportswear
manufacturer in Germany and Europe and the second biggest sportswear manufacturer in the
world.
M&S
As one of the UK's leading retailers, we sell stylish, high quality, great value clothing and home
products, as well as outstanding quality food, responsibly sourced from around 2,000 suppliers
globally. Product line of M&S is Women swear, Personal (women's) fit, summer classics,
Classic collection, Seasonal classics, Beachwear, Sportswear, The Indigo collection, Lingerie
and hosiery, Shoes, Children swear, menswear.
LEVI’S

Created in 1873, Levi's jeans are the original, authentic jeans. They are the most successful,
widely recognized and often imitated clothing products in the history of apparel. Over
successive generations, Levi's® jeans have captured the attention, imagination and loyalty of
diverse individuals.
As the inventor of the category, the Levi's brand continues to define Jeanswear with the widest
range of products available, from quintessential classics such as the famous Levi's 501 Original
jean, to favorite fits and styles in the Red Tab™ and premium collections.
COLUMBIA – SPORTSWEAR COMPANY
Columbia Sportswear Company is a United States company that manufactures and distributes
outerwear and sportswear. It was founded in 1938 by Paul Landform, father of present
chairperson Gert Boyle. The company is headquartered in Washington County, Oregon, in an
unincorporated part of the Portland metropolitan area near Beaverton. Columbia Sportswear
also produces footwear, headgear, camping equipment, skiwear, and outerwear accessories. In
2001, it was the largest American seller of ski apparel.
GUESS
Guess (styled as GUESS or Guess?) is an American upscale clothing line brand. Guess also
markets other fashion accessories besides clothes, such as watches, jewelry and perfumes.
DOCKERS

NIKE
Nike is an American multinational corporation that is engaged in the design, development,
manufacturing and worldwide marketing and selling of footwear, apparel, equipment,
accessories and services... It is one of the world's largest suppliers of athletic shoes and apparel
and a major manufacturer of sports equipment.
HOLLISTER
Hollister Co., often advertised as Hollister or HCo., is an American lifestyle brand by
Abercrombie & Fitch Co. The concept was originally designed to attract consumers aged 14–
18, at a lower price point than the parent brand through its SoCal-inspired image and casual
wear. Stores and merchandise are categorized within the divisions named "Dudes" (men) and
"Bettys" (women). Clothing offerings by Hollister Co. include but is not limited to "graphic"
and "crew & tee" shirts, polo, Henley’s, cardigans, shirts, pullovers, outerwear, rinse or wash
slim jeans, flip-flops, cologne or perfume, boxers, accessories, and so on.
HURLEY

Hurley is a clothing company located in Costa Mesa, California founded by Bob Hurley. The
company puts emphasis on Sportswear and Sports Equipment skateboarding, surfing, music,
and "fun". Since 2002, Hurley has been owned by Nike, Inc.
REEBOK
Reebok International, Ltd. designs, markets, and distributes sports, fitness and casual footwear,
apparel, and equipment. Its product line includes footwear and apparel products for football,
baseball, soccer, track and field, and other sports, as well as women’s category products. The
company offers its products to a range of customers from professional athletes to recreational
runners and kids on the playground. It serves customers through its retail stores and other sports
retailers in the United States and internationally.
REID & TAYLOR
Reid & Taylor was launched by SKNL in India in 1998 with the inauguration of a state-of-the-
art fabric plant at Mysore. The discerning consumers in India now can experience international-
quality garments in their own cities and towns. Today, Reid & Taylor has emerged as a leading
brand in the worsted suiting segment.
Reid & Taylor is the first brand in India to offer both fabrics and apparel under one label. The
fine quality of garments and sharp styling has created a space for itself in the customer’s mind.

ABERCROMBIE & FITCH
Abercrombie & Fitch, also known as A&F, is an American retailer that focuses on casual wear
for consumers aged 18 to 22.
OLD NAVY
Old navy provides the latest fashions at great prices for the whole family. It offers Men’s,
Women's and Kids'; departments, Women Plus, and clothing for baby.
H&M
H & M is a Swedish multinational retail-clothing company, known for its fast-fashion clothing
for men, women, teenagers and children.
BANANA REPUBLIC
Banana republic offers Modern Apparel, Handbags, Shoes, and Accessories. A perfectly
tailored work suit, refined dress shirts, a premium handbag.
UNITED COLORS OF BENETTON

Benetton is a global clothing brand, based in Treviso, Italy. The name comes from the four
members of the Benetton family namely Luciano, Giuliana, Gilberto and Carlo Benetton. Its
core business is clothing, a group with strong Italian character whose style, quality and passion
are seen in its brands.
ANNUAL REPORT ANALYSIS
Particulars Year ended march 31st 2013
(in lakhs)
Year ended march 31st 2012
(in lakhs)
Revenue
Profit before tax
Profit after tax
98979
(10813)
(10944)
103020
(13162)
(13237)
REVIEW OF OPERATIONS
Gokaldas Exports, on a consolidated basis, has reported total sales of Rs. 98,979 Lakhs
representing a decline of 3.9% over 2011-12. From a merchandise sales point of view, FY2012-
13 has shown a growth of 1% over the previous year. On a macroeconomic environment basis,
India’s apparel industry has declined by 5% to $ 12.9 billion in 2012-13. This is mainly due to
sluggish demand in western markets. The US and Europe, which together account for the bulk
of the country’s apparel exports, faced a weak economic scenario, which has hurt the prospects
of garment manufacturers globally. In this challenging environment, the Company has focused
its efforts towards the export market and achieved a growth of 1.5% in the year 2012-13.
Consequently export sales as percentage of total sales has shown a growth of 2.3%.

KEY COSTS AND THEIR IMPACT ON PROFITABILITY
From a cost point of view, there has been a decrease in total expenses in FY13 by 5.5%.This
has been achieved through various cost control measures taken during the year. While the year
has been impacted by increase in wage costs and general inflation, this has been offset by lower
raw material costs, finance costs and other manufacturing & admin costs.

For the year 2013-14, we have undertaken necessary measures to improve our performance.
Some of these are – focus on increasing share with existing customers, selectively develop new
customers and build on them, bring in product diversity, improving manufacturing efficiencies
and sustaining the focus on tighter financial management. These initiatives along with
improved productivity measures will help us achieve better results in the coming year.
In compliance with the Corporate Governance reporting requirements as per the format
prescribed by the
Securities Exchange Board of India and incorporated in clause 49 of the Listing Agreements
with the Stock
Exchanges, the Company’s policies on Corporate Governance and compliance thereof, for the
year ended
March 31, 2013 is enumerated below for information of the shareholders and investors of the
Company.
Company’s philosophy on Corporate Governance
Corporate Governance is a set of systems and practices to ensure that the affairs of the
Company are being managed in a way which ensures accountability, transparency, and fairness
in all its transactions in the widest sense and meet its stakeholder’s aspirations and societal
expectations. In keeping with its commitment to the principles of good corporate governance,

which it has always believed leads to efficiency and excellence in the operations of a company,
your Company has been upholding fair and ethical business and corporate practices and
transparency in its dealings. The Company continuously endeavours to review, strengthen and
upgrade its systems and processes so as to bring in transparency and efficiency in its various
business segments.
Good Corporate Governance leads to long-term shareholder value and enhances interests of
other stakeholders. It brings into focus the fiduciary and trusteeship role of the Board to align
and direct the actions of the organization towards creating wealth and shareholder value.
Your Company is in compliance with the requirements of the guidelines on Corporate
Governance stipulated under Clause 49 of the Listing Agreement existing as of March 31, 2013
and presents the following Corporate
Governance Report for the year 2012-13, based on the said disclosure requirements.
Board of Directors
The Board is headed by a Non-Executive Chairman, Mar. Richard B. Saldanha, and is
composed of eminent persons with considerable professional experience in diverse fields viz,
manufacturing, marketing, finance, banking, legal, management and commercial
administration and comprises a majority of Non-Executive
Directors. The Gokaldas Exports Board is a balanced Board, comprising of Executive and Non-
Executive Directors. As on March 31, 2013, over two thirds of the Board consists of Non-
Executive Directors and of these, the majority are independent Directors. As on March 31,
2013, of the Seven Directors, Six (i.e. 85.71%) are Non-Executive Directors and Four (i.e.
57.14%) are Independent Directors.
The composition of the Board and category of Directors as on March 31, 2013 is as follows:

Terms of Reference of the Audit Committee
• Chairman of the Audit Committee shall be an Independent Director.
• The Audit Committee may invite such executives of the Company as it considers appropriate
(and particularly the head of the finance function) to be present at the meetings of the
Committee. The Chief Financial Officer,
Head of Internal Audit and representative of the statutory auditor may be present as invitees
for the meetings of the Audit Committee.
• The Company Secretary shall act as Secretary of the Audit Committee.
• The Audit Committee shall meet at least four times in a year and not more than four months
shall elapse between two meetings.
• The quorum shall be either two members or one-third of the members of the Audit Committee,
whichever is higher but there shall be a minimum of two independent members present.
Role of Audit Committee

The role of the Audit Committee shall include the following:
• Overview of the Company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statements are correct, sufficient and credible.
• Recommending to the Board, the appointment, re-appointment and, if required, the
replacement or removal of the Statutory Auditors and the fixation of audit fees.
• Approval of payment to Statutory Auditors for any other services rendered by them.
• Reviewing, with the management, the annual financial statements before submission to the
Board for
Approval, with particular reference to:
- Matters required to be included in the Directors’ Responsibility Statement to be included in
the Board’s Report in terms of clause (2AA) of Section 217 of the Companies Act, 1956.
- Changes, if any, in accounting policies and practices and reasons for the same.
- Major accounting entries involving estimates based on the exercise of judgment by
Management.
- Significant adjustments made in the financial statements arising out of audit findings.
- Compliance with listing and other legal requirements relating to financial statements.
- Disclosure of any related party transactions.
- Qualifications, if any, in the draft limited review audit report and audit report.
• Reviewing, with the Management, the quarterly financial statements before submission to the
Board for approval.
• Reviewing, with the Management, performance of Statutory and Internal Auditors, adequacy
of the internal control systems.
• Reviewing the adequacy of internal audit function.

• Reviewing the findings of any internal investigations by the Internal Auditors into matters
where there is suspected fraud or irregularity or a failure of internal control systems of a
material nature and reporting the matter to the Board.
• To look into the reasons for substantial defaults in the payment to the depositors, debenture
holders shareholders (in case of non-payment of declared dividends) and creditors.
• Carrying out any other function as is mentioned in the terms of reference of the Audit
Committee.
Powers of the Audit Committee
The Audit Committee has the following powers:
• To investigate any activity within its terms of reference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure the attendance of outsiders with relevant expertise, if it considers necessary.
CORPORATE GOVERNANCE REPORT capital with National Securities Depository Limited
(NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed
capital. The audit confirms that the total issued/paid up capital is in agreement with the total
number of shares held in physical form and the total number of dematerialized shares held with
NSDL and CDSL. This audit is carried out every quarter and the report thereon is submitted to
the stock exchanges and is also placed before the Board of Directors.
3. Remuneration Committee
The Company had constituted a remuneration committee on April 01, 2009 to carry on
functions relating to determination of the remuneration payable to the Directors,
recommendation for appointment/ reappointment of the Managing Directors/Whole-Time
Directors, revision in remuneration of the existing Directors of the Company from time to time.
As on March 31, 2013, the Remuneration Committee comprises of Mr. J H Mehta (Chairman),
Mr Arun K Thiagarajan as member.

There was no Remuneration Committee Meeting held during the year 2012 -13.
4. Compensation Committee
As required under Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock
Purchase Scheme) Guidelines, 1999, Compensation Committee is to be constituted to oversee
Employee Stock
Option’s (ESOP) granted by the Company.
GEL ESOP Scheme 2010 was approved by the members at the Annual General Meeting held
on September 17,
2010. Compensation Committee was constituted on August 2, 2010.
As on March 31, 2013, the members of the Compensation Committee are:
1. Mr J. H. Mehta, Chairman
2. Mr. Arun K. Thiagarajan
3. Mr. Gautam Chakravarti
ESOPs are yet to be granted. No Compensation Committee meeting was held during the year.
Means of Communication
The annual audited financial results, the quarterly / half yearly unaudited financial results are
generally published in, the
Financial Express and Samyukta Karnataka (a regional daily published from Bangalore).
Investor Grievances and Share Transfer
The Company has a Board level Investor Grievances Committee to examine and redress
shareholders’ and investors’ complaints. The status on complaints and share transfers is
reported to the Board. For matters like dividends, change of address, refunds, de-mat, re-mat
of shares etc., the shareholders/investors should communicate with Karvy Computershare

Private Limited, Registrar and Share Transfer Agent of the company. Their address is given in
the section on General
SHAREHOLDER INFORMATION
LISTING
The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE)
and National Stock Exchange of India of India Limited (NSE). The Company has paid the
listing fees to the respective stock exchanges till date. The Company’s shares are tradable
compulsorily in the dematerialized form and the Company has entered into an agreement with
National Securities Depository Limited (NSDL) and Central Depository Services India Limited
(CDSL) for trading in electronic form

MANAGEMENT DECISION AND ANALYSIS
GEL has a diversified product portfolio across various categories of garments for men, women
and children. GEL’s expertise lies in manufacturing outerwear which very few manufacturers
in India can match. Below chart depicts various categories catered to by GEX:
The following graph shows the product mix of past two years. There has been a shift towards
the jackets and outerwear products in FY 2012-13 signifying move towards value added
products. Also, below exhibit illustrates the wide range of products to meet our customer needs
and continuously build upon capabilities to cater to the changing market requirements.

INDUSTRY SCENARIO
Growth in global apparel trade market with Asia increasingly becoming the hub of global
production.
The global apparel trade market is USD 350bn and is expected to grow in single digit going
forward. Low cost Asian countries continue to increase their share of business in terms of
export volumes.
Their key markets continue to be USA and Europe, with increase in share from Asia. At the
same time, share of business from domestic market is on a rise too. It presents opportunity for
us as the Indian retail market continues reshaping itself from unorganized to organized
structure.
Their revenue share from various geographical locations in 2010-11, 2011-12 and 2012-13 is
given below-
There is a shift in geography wise revenue share in FY 13 over FY12 and FY11 due to increased
demand from Asian economies.
Overall there has not been any upward movement in global demand for our sector; in fact some
of the key countries have shown sharp reduction. This has led to volume and pricing pressures
starting at retail outlet level and impacting entire supply chain with perhaps the largest impact

being felt by the manufacturers Coupled with this, inflation in India has hurt us significantly.
In addition, intensity of competition from countries like Bangladesh, Vietnam and
Indonesia continued to be felt in this fiscal.
FINANCIAL STATEMENT
The surplus has decreased from 22774.50 to 12214.93 in the year 2013 Moreover, the
liabilities have also increased from 59540.40 to 62190.63. The assets have decreased from
26768.89 (March 31, 2012) to 23517.89 (March 31, 2013)

The total income as on March 31, 2012 was 100627.72 while it decreased to 97287.78 on
March 31, 2013. However, the expenses also reduced from 113962.54 to 108475.08 in the year
2013. The net loss reduced from 13276.13 as on March 31, 2012 to 11188.04 on March 31,
2013.

Price movement: Significant price movement has been observed in Gokaldas Exports Ltd... ,
in order to ensure that investors have latest relevant information about the company and to
inform the market place so that the interest of the investors is safeguarded, had written to the
company. Gokaldas Exports Ltd. has vide its letter inter-alia stated, "We hereby inform you
that the company does not have any information / announcement to be made that can have any
bearing on the operation / performance of the company including any price sensitive
information".
SALES VALUE CONTRIBUTED BY PRODUCT MIX
OPPORTUNITIES AND CHALLENGES
India has distinctive competitive advantage over many other competing countries, if provided
with a level playing field, it has the potential to grow rapidly as India’s market share is less
than 4% in the global apparel trade. India could credibly challenge the dominance of China in
apparel exports, which is currently producing USD 120 bn in apparel exports
• India has a large fibre base; it is the 3rd largest cotton producing country in the world (second
only to US and China).
• The country has developed a large spinning and weaving industry, it is the 2nd largest cotton
yarn exporter
• The country has a large pool of skilled labour
• The industry has developed design and product development capabilities

• The country has developed an integrated and efficient supply chain
• The country has higher compliance standards as compared to some of the Asian counterparts.
• Unlike its competition in Asia, India has a stable political and social environment, which is
attractive to buyers in North America and Europe
• The growing domestic demand is a big opportunity which can be capitalized by the industry.
Macroeconomic scenario:
• Rising wage costs in China (Salary inflation of 15% over the last 4 years) - Wage rates in
South China are 400
USD and North China are 250 USD. In comparison, wage rates in India are 150 USD (40% to
60% of wage levels in China)
• Growing opportunities in North China is leading to migration of workers and business to the
North. This is making it more expensive to transport goods from inland China to the coast
• With growing domestic demand, China has started focusing on meeting this rising demand
• Bangladesh Exports in June 2013 were USD 2.7 Billion which showed a growth of 16% on
YOY basis.
• Bangladesh exports continue to enjoy duty benefits for imports in certain European countries.
• High inflation in most of the South Asian apparel export countries except China.
Domestic Apparel Market (USD bn)
Growth in Domestic Apparel market:
• The Domestic apparel market is 40 bn dollars and is expected to grow at a CAGR of 9%
• An increasing number of international brands across formats are foraying into India to
leverage the potential in the country.

However above opportunities are not without the challenges stemming from macroeconomic
forces, a few of these challenges that apparel industry continue to face are-
- Sluggish global demand due to weak western economies
- Continuing pricing pressures due to uncertain consumer sentiment and ripple effect across
the value chain
- Wage and cost inflation- wage costs continue to rise on account of increased minimum wages
and availability of skilled labour at competitive prices
- Diminishing policy support by the government –market share shifting to Southeast Asian
countries/Bangladesh.
- Uncertain raw material prices due to heavy dependency on weather.
It can be seen from the below table, Exports to USA from India has come down by 4% over
FY12.This also indicates increase in market share for countries like Bangladesh, Vietnam,
Indonesia and China

KEY FOCUS AREAS
The company has formulated its strategies and identified key focus areas to improve
performance in the current environment.
1. Top line growth – Strong focus on growing the top line by increasing share of business with
existing customers
2. Strengthen presence in new product categories such as swim wear, work wear, sleeping bags
3. Increase share of domestic market and tap into its aggressive growth
4. Target capturing share of China business in the back drop of current challenges in China
5. Improvement in operational efficiencies through lean initiatives
6. Sustained focus on financial management and profitability improvement
RISKS AND CONCERNS
As an export driven enterprise with 80% revenues being denominated in USD/EURO, we are
exposed to currency fluctuation risks. Forex related risks are being mitigated through robust
foreign currency risk management practices.
Rise in wage costs and inflationary conditions in the country may have an adverse impact on
the profitability of the company. Additionally customers may expect better prices from us in
the current macroeconomic scenario
Any change in government policies which adversely impacts us may hurt our competitiveness
– e.g., adverse GST rules, changes in exports incentives, increase in service tax etc.
Similarly, change in government policies of competitive countries favouring the respective
country's industry may affect the competitiveness of the Indian apparel industry.

COMPARISONS WITH COMPETITORS
PEER COMPARISON
Company Market
Cap
(Rs. in Cr.)
P/E
(TTM)
(x)
P/BV
(TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
Page Industries 7,133.66 50.14 33.41 20.10 59.3 57.2 0.47
Trent 3,389.79 44.68 2.21 30.25 3.1 3.9 0.16
Shoppers St. 3,149.54 70.76 4.54 25.65 5.8 9.5 0.44
Bombay Rayon 2,691.33 0.00 0.86 8.39 6.1 8.6 1.21
Future Retail 1,914.92 0.00 0.58 8.87 1.3 5.8 0.89
Rupa & Co 1,797.10 28.72 7.68 12.80 29.1 26.7 0.90
Raymond 1,754.24 49.19 1.70 13.29 -3.4 5.1 1.24
Kewal
Kir.Cloth.
1,363.76 21.71 5.37 9.87 22.3 30.8 0.06
Welspun India 996.48 0.00 0.94 4.55 17.2 13.2 1.71
Mandhana
Indus
765.40 17.30 1.62 8.38 14.7 13.9 1.75
Lovable
Lingerie
548.86 22.41 3.16 14.92 9.4 12.5 0.04
Trident 468.19 2.34 0.66 4.22 7.3 10.8 3.33
K P R Mill Ltd 440.48 3.85 0.66 2.27 15.9 15.9 0.92
Kitex Garments 427.50 9.71 3.49 4.45 26.7 26.8 0.92
Zodiac Cloth.
Co
382.95 31.15 2.26 14.76 6.6 9.0 0.27
Apparel Export Promotion Council organised Export Excellence Award and Lifetime
Achievement Award, in New Delhi on 22nd
February evening. Shri Anand Sharma, Hon’ble
Minister for Commerce, Industry & Textiles, and Government of India was the Chief Guest.
Awards for the year 2011-12

FY 2011-12
S
NO
Category Award Awardee Who will
Receive the
Award
Remarks
1 Highest
Exports By
Woman
Entrepreneur
Citation MRS. SARLA AHUJA
SHAHI EXPORT
PRIVATE LIMITED,
On behalf of
Mrs. Sarla
Ahuja,
Mr. Harish
Ahuja
Managing
Director & her
son will receive
the award.
With an
export
turnover
of Rs.
1769
crores in
the year
2011-
2012
2 Highest
Exports By
Young
Entrepreneur
Citation MR. ARNAV PODDAR
CHEER SAGAR
Mr. Arnav
Poddar,
Director
Attaining
an export
turnover
of Rs. 37
crore at
an age of
22 years
3 Highest Unit
Value
Exporter
Citation SILVER SPARK
APPAREL LTD,
BANGALORE
Mr. Ashish
Grover,
Vice President
With a
unit value
of Rs.
4672
4 Highest
Exports in
MMF
Garment
Citation RAMA KRISHNA
KNITTERS PVT. LTD.,
LUDHIANA
Mr. Naresh
Kumar Gupta
Director
With an
export
turnover
of Rs. 249
crores

5 Highest
Exports In
Cotton
Garment
Citation EASTMAN EXPORTS
GLOBAL CLOTHING (P)
LTD.,
TIRUPUR
Mr. Cibi Karthic
Chandran
Director
With an
export
turnover
of Rs. 608
crores
6 Highest
Exports In
Woven
Garment
Citation PEARL GLOBAL
INDUSTRIES LIMITED,
GURGAON
Mr. Rajkumar
Chawla,
Chief Finance
Office &
Mr. Ashish
Garg,
Vice President
With an
export
turnover
of Rs. 237
crores
7 Highest
Exports in
Knitted
Garment
GLOBAL CLOTHING (P)
LTD.,
TIRUPUR
Mr. Cibi Karthic
Chandran
Director
With an
export
turnover
of Rs. 720
crores
8 Highest
Exports By
Merchant
Exporter
Citation KORATH GULF LINKS
IMPEX PVT.LTD.,
MUMBAI
Ms. Roja
Kannan
CEO & MD
With an
export
turnover
of Rs. 59
crores
9 Highest
Exports In
Woolen
Garment
Citation SILVER SPARK
APPAREL LTD,
BANGALORE
Mr. Ashish
Grover
Vice President
With an
export
turnover
of Rs. 67
crores
10 Highest
Exports By
GLOBAL CLOTHING (P)
LTD.,
Mr. Cibi Karthic
Chandran,
Director
With an
export
turnover

Manufacturer
Exporter
TIRUPUR of Rs. 720
crores
11
Highest
Group
Employment
Provider
Bronze
Trophy
&
Citation
ORIENT CRAFT
LIMITED,
GURGAON
Mr. Anoop
Thatai,
Joint CMD
With
employee
strength of
29,300
12 Silver
Trophy
&
Citation
GOKALDAS EXPORTS
LTD.,
BANGALORE
Mr. Rajendra J.
Hinduja
With
employee
strength of
30,341
13 Gold
Trophy
&
Citation
SHAHI EXPORT
PRIVATE LIMITED,
FARIDABAD
Mr. Raghavan
Chief Operating
Officer (M&B)
With
employee
strength of
70,828
14
Highest
Exports In
Focus
Countries
Bronze
Trophy
&
Citation
GOKALDAS IMAGES
PVT. LTD.,
BANGALORE
Mr Jagadish
Hinduja
Chairman
With an
export
turnover
of Rs. 392
crores
15 Silver
Trophy
&
Citation
GOKALDAS EXPORTS
LTD.,
BANGALORE
Mr. Rajendra J.
Hinduja
With an
export
turnover
of Rs. 529
crores
16 Gold
Trophy
&
Citation
SHAHI EXPORT
PRIVATE LIMITED,
FARIDABAD
Mr. Subhash
Tiwari
Director
With an
export
turnover
of Rs.
1624
crores

17
Highest
Global
Exports
Bronze
Trophy
&
Citation
GOKALDAS EXPORTS
LTD.,
BANGALORE
Mr. Rajendra J.
Hinduja
With an
export
turnover
of Rs.
732.67
crores
18 Silver
Trophy
&
Citation
ORIENT CRAFT
LIMITED,
GURGAON
Mr. Sudhir
Dhingra, CMD
&
Mr. Anoop
Thatai, Joint
CMD
With an
export
turnover
of Rs.
958.75
crores
19 Gold
Trophy
&
Citation
SHAHI EXPORT
PRIVATE LIMITED,
FARIDABAD
Mr. Subhash
Tiwari
Director
With an
export
turnover
of Rs.
1769.04
crores
The above table clearly indicates that Gokaldas is a pioneer in export industry and with these
awards; it has proved its excellence.
CONCLUSION
Gokaldas Exports is India’s largest apparel manufacturer & exporter producing sports, casual
and formal apparels. Customers include leading US and European brands such as GAP, Nike,
Levis, Adidas, Abercrombie & Fitch, H&M, Debenhams and Zara.
With aggressive growth plans for servicing both global buyers and the Indian retail sector,
Gokaldas Exports have selected Fast React Systems to assist them to develop and implement
best practises in production planning and control.

"Gokaldas Exports selected Fast React as it wanted a world-class planning system tailored to
the specific requirements of apparel industry. Fast React will ensure that we adopt a
disciplined and systematic approach to production planning which is a complex activity in the
apparel industry."
Dinesh J. Hinduja, Executive Director Marketing and Production
Fast React complements existing systems by extracting order information to a highly flexible
and graphical production plan, thereby enabling the business to make more effective planning
decisions, improve production efficiency and maximise on-time deliveries.
REFERENCES
http://www.fastreact.com/images/content/news/Fast%20React_Evolve_Press%20Release_Go
kaldas%20.pdf
http://www.fastreact.com/news/industry_giant_gokaldas_exports_selects_fast_react_s_world
_class_system
http://www.moneycontrol.com/company-article/gokaldasexports/news/GE05
http://www.gokaldasexports.com/
http://economictimes.indiatimes.com/gokaldas-exports-ltd/stocks/companyid-13003.cms
http://www.fastreact.com/news.php?id=168
http://economictimes.indiatimes.com/gokaldas-exports-ltd/stocknews/companyid-13003,cn-
gokaldas-exports-ltd.cms
http://www.moneycontrol.com/financials/gokaldasexport/consolidated-balance-sheet/GE05
http://www.stanford.edu/~nbloom/GEX.pdf
http://www.gokaldasexports.com/pdf/annual_report/Annual%20Report%202012-2013.pdf

Fexm gokaldas exports CONTRIBUTION

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