Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Replaced 36W Tube bulbs with energy-efficient LED tubes (18W), resulting in a total power saving of 2300 units/day.
• Availed open access power through PTC from Dec 2016 to March 2017 and saved ` 91.3 lakhs in energy cost.
• Invested ` 20 lakhs to replace the CT/PT of EHT Substation for availing open access power and got the ROI in two months.

Social Achievements

• Announced a VRS scheme to bring down the overall wage bill.
• Maintained cordial and satisfactory industrial relations (except for a lockout).

Governance Achievements

• Complied with the conditions of Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulation, 2015.
• Held a separate meeting of Independent Directors.
• Established a Vigil Mechanism for Directors and Employees.

Climate Goals & Targets

Environmental Challenges

• Lockout from May 2nd, 2016 to July 3rd, 2016, reducing capacity utilization to 72% from 95%.
• Sluggish international and domestic markets.
• Competition from spinning mills with high incentives and concessions.
• Abnormally higher salaries and wages cost at Aluva Unit compared to industry standards.
• Volatility in foreign currency exchange rates.
• Rapid expansion of spinning capacity without commensurate increase in downstream sectors.
• Demonetization and GST implementation causing market slowdown and finished goods accumulation.

Mitigation Strategies

• Various cost-cutting measures and product mix changes.
• Efficient inventory management system and procurement strategy (mix of spot and long-term contracts).
• Judicious mix of markets for sales and thrust on specialty products.
• Strengthening Management Information Systems to minimize exchange rate risks.
• Ongoing risk assessment and effective internal control and management reporting system.
• Advocating for restoration of export benefits (interest subvention and MEIS).

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SEBI (LODR) Regulations, 2015, Companies Act, 2013

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Replaced 36W fluorescent tubes with 18W LED lights in production departments; reduced number of overhead traveller cleaning units in spinning department; reduced power consumption of humidification plants; installed centralised duct system in compact ring frames; reduced energy loss in variator drive system; arrested air leakages in Autoconer and Preparatory Departments.

Social Achievements

• Not disclosed

Governance Achievements

• Established a Vigil Mechanism/Whistle Blower Policy; implemented an anti-sexual harassment policy; carried out Board performance evaluation; framed a Nomination & Remuneration Policy.

Climate Goals & Targets

Environmental Challenges

• Turbulence in the textile industry due to GST rollout; significant fall in cotton yarn exports due to reduced imports by China; substantial rise in cotton prices without commensurate rise in yarn prices; pressure on operating margins due to lower price realization and higher raw material costs; reduction in revenue from export incentives; continued stress in liquidity position.

Mitigation Strategies

• Approved a proposal to monetize non-core assets (surplus land) to reduce debt, modernize plant, upgrade technology, and shore up working capital.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Indian Accounting Standards (Ind AS)

Certifications: Null

Third-party Assurance: L.U. Krishnan & Co.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Better Cotton Initiative (BCI), Supima yarns and Giza yarns

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Conservation of Energy
• Corporate Social Responsibility (CSR)
• Human Rights
• Supply Chain Management
• Board Diversity

Environmental Achievements

• Replaced 36W fluorescent tubes with 18W LED lights in production departments.
• Reduced power consumption of humidification plants.
• Reduced area of humidification in Ring frames resulting in energy savings.
• Increased autoconers resulting in energy savings.
• Installed Centralized Duct System (CDS) in compact ring frames for energy savings.
• Reduced energy loss in variator drive system by replacing with inverter drives.
• Arrested air leakages in Autoconer and Preparatory Depts resulting in energy savings.

Social Achievements

• Cordial and satisfactory industrial relations.
• Human Resources Development through training and employee welfare activities.
• No complaints received under the anti-sexual harassment policy.

Governance Achievements

• Formal mechanism for evaluating Board, Committees, and individual Directors' performance.
• Familiarization program for Directors.
• Compliance with the Code of Conduct for all Board Members and Senior Management Personnel.
• Separate meeting of Independent Directors.

Climate Goals & Targets

Environmental Challenges

• Fluctuating cotton prices.
• Demand constraints.
• Tight liquidity conditions.
• Volatility in foreign currency exchange rates.
• Dependence on vagaries of monsoon for raw cotton supply.

Mitigation Strategies

• Efficient inventory management system.
• Judicious mix of markets for sales.
• Thrust on specialty products (BCI, Supima, Giza yarns).
• Management Information Systems to manage export/import exposures.
• Import of cotton is freely allowed, mitigating availability risk.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Ind AS

Third-party Assurance: L.U.Krishnan & Co. Chartered Accountants

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Lower demand for yarn resulting in reduced price realizations and severely affected the performance of the Spinning industry.
• Impact of Covid-19 pandemic outbreak worldwide since January 2020, leading to substantial drop in production and dispatches.
• Lockdown and lower consumer spends adversely impacted the Indian textile and apparel industry.
• Liquidity and cost pressure due to the COVID-19 pandemic.
• Company under stress with insufficient cash flow to meet repayment needs.

Mitigation Strategies

• Approached lenders to restructure outstanding debts under RBI's Prudential Framework for Resolution of Stressed Assets.
• Resumed manufacturing activities gradually as per government guidelines.
• Strengthening liquidity position and initiating cost restructuring exercises.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Fluctuating cotton prices
• Demand constraints
• Tight liquidity conditions
• Impact of Covid-19 pandemic
• Lower consumer spends
• Liquidity and cost pressure due to COVID-19

Mitigation Strategies

• Raising long-term funds through the issue of Non-Cumulative Non-Convertible Non-Participating Redeemable Preference Shares (NCRPS)
• Closely monitoring business and economic conditions and exploring all possibilities to resume operations
• Efficient inventory management system and a well-crafted strategy of procuring raw materials through a mix of spot and long-term contracts
• Maintaining a judicious mix of markets for its sales and thrust on specialty products

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Environmental Achievements

• In GEL A, Spg H Plant Exhaust fan angle reduction made and achieved a saving of 6480 Units per year. In GEL A Prep H Plant 5.5 KW Pump motor replaced with 3.7 KW open well pump and achieved a saving of 3240 Units per year. Total saving in the above 2 conservation efforts is 28 units per day and `168 per day and `0.60 lacs per year at ` 6 per unit of power

Climate Goals & Targets

Environmental Challenges

• Sudden outbreak of COVID-19 Pandemic and resultant nationwide lockdown significantly affected normal working. Manufacturing operations suspended since March 24, 2020. Post-resumption, capacity utilization was low due to lower demand, labor shortage, and liquidity stress.

Mitigation Strategies

• Obtained Emergency Credit Line Facility Guaranteed by Central Government to tide over business stress and restart operations. Decided not to pursue debt restructuring and instead sought renewal of working capital limits with reduced interest rates and margins.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Environmental Challenges

• Liquidity stress and working capital constraints.
• Fluctuating cotton prices, demand constraints, and tight liquidity conditions.
• Covid-19 pandemic.
• Accounts classified as NPA due to default in debt servicing.

Mitigation Strategies

• Submitted Resolution Plans (RPs) to restructure debts and sell the Tamil Nadu plant.
• Revised RP to repay term debt and convert working capital dues into a term loan.
• Lead bank approved the revised RP.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility (CSR)

Environmental Achievements

• GEL – B Carding Licker in waste suction converted to intermittent suction and stopped one no of 37 KW motor with a net energy saving of 207000 Units per Annum
• Provided nylon blended Aluminum fan for Humidification plant, saving 241560 Units per Annum.
• GEL – A Carding 11 Nos waste suction made continuously Using 2 Nos of Suction fan and stopped individual carding suction fans of 11 Nos with a net energy saving of 16920 units per Annum.

Social Achievements

• Maintained cordial industrial relations; no employee-related disclosures required under Section 134(3)(q).

Governance Achievements

• Established a Vigil Mechanism / Whistle Blower Policy; posted on company website.
• Implemented a CSR Policy in compliance with Schedule VII of the Companies Act 2013.
• Spent Rs.5.95 lakhs with “Cankids KidsCan” for childhood cancer.

Climate Goals & Targets

Environmental Challenges

• Global economic slowdown and decline in global trade demand due to geopolitical situation.
• Decrease in India’s exports due to governmental policy changes and competition.
• Higher finance cost due to increased interest rates on working capital.

Mitigation Strategies

• Focused approach and cost rationalization to improve revenues.
• Requested working capital lenders to reduce interest rates due to improved performance and investment grade rating.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• VRS and Gratuity payment of Rs 7.20 crores to high cost permanent workers of remaining Kanjikode, Kerala Unit to reduce labour cost

Climate Goals & Targets

Environmental Challenges

• Continued liquidity stress, delayed implementation of Restructuring / Resolution Plan (RP) by the Lenders and challenging marketing conditions worldwide on account of geo political situation
• prolonged Ukraine war which impacted major Textiles markets ( EU and USA)
• higher inflation
• slow-down of global economy and de-stocking by all the retailers
• higher raw material prices, however Finished Goods price increase was not in tandem with increase in Raw materials prices
• Rising interest rates have caused unprecedented demand challenges and significant drop / erosion in margins, of Indian Textiles sector, especially spinning segment

Mitigation Strategies

• Company’s revised restructuring / resolution proposal pursuant to RBI Prudential Framework for Resolution of Stressed Assets circular of 7th June 2019, was approved and implemented by the lenders
• Company’s plant at Ponneri, Tamil Nadu was sold for a net sale consideration of Rs. 105 crores on slump sale basis
• VRS and Gratuity payment of Rs 7.20 crores to high cost permanent workers of remaining Kanjikode, Kerala Unit to reduce labour cost

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Geopolitical situation (Ukraine War, Red Sea issue), higher inflation, slowdown of global economy, higher raw material (raw cotton) prices, and rising interest rates impacted operations.
• Liquidity stress due to delayed implementation of the Restructuring/Resolution Plan by lenders and challenging market conditions.

Mitigation Strategies

• Requested lenders to restructure outstanding debt with moratorium on interest and installment payments, interest rate reduction, and increased working capital.
• Promoters assured necessary support for debt restructuring.
• Plans to resume own manufacturing operations post-restructuring, leveraging reduced debt, rationalized labor costs, and lower cotton prices.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Unsustainable wages, paucity of working capital, and steep increase in cotton prices resulted in lower capacity utilization and made cotton yarn manufacturing operations unviable.

Mitigation Strategies

• Discontinued cotton yarn manufacturing operations; selling assets to repay dues; exploring outsourcing of cotton yarn manufacturing/trading in cotton yarn or other permitted businesses.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities