GKB Ophthalmics , a leading manufacturer of ophthalmic lenses, has announced significant operational changes at its Goa plant due to market challenges, while simultaneously receiving recognition for its export performance.

Production Cutback and Workforce Reduction

GKB Ophthalmics has implemented a 50% reduction in production at its plant located in Tivim Industrial Estate, Mapusa, Goa. The company attributes this decision to two primary factors:

1. Sluggish market demand
2. Complete cessation of export orders from its US subsidiary

The company cited heavy tariff impositions as the reason for the halt in US export orders. In response to these challenges, GKB Ophthalmics is also taking steps to optimize its workforce:

• Gradually releasing temporary workers
• Aiming to reduce labor costs

Export Excellence Recognition

Despite the current market headwinds, GKB Ophthalmics has received notable recognition for its past export performance. The Plastic Export Promotion Council, under the Department of Commerce, Government of India, has selected the company for an Export Excellence Award in the "Hard Resilent Lenses" category.

This award acknowledges GKB Ophthalmics' exceptional export performance, highlighting the company's strong presence in international markets prior to the recent challenges.

Looking Ahead

GKB Ophthalmics has stated that it will continue to monitor the situation in the coming months and adjust its business operations accordingly. The company's ability to navigate these challenges while maintaining its export quality will be crucial for its future performance.

As global market dynamics continue to evolve, particularly with respect to international trade policies and tariffs, companies like GKB Ophthalmics will need to demonstrate agility in their operational strategies to maintain their competitive edge in the ophthalmic lens industry.

GKB Ophthalmics Limited, a prominent player in the ophthalmics industry, has announced a significant corporate restructuring move involving its material subsidiary, GSV Ophthalmics Private Limited (GSV). The company's Board of Directors has approved a proposal to initiate voluntary liquidation of GSV under the Insolvency and Bankruptcy Code, 2016.

Key Highlights of the Decision

• Proposal Approval: GKB Ophthalmics' Board of Directors reviewed and approved the proposal for voluntary liquidation of GSV Ophthalmics.
• Subsidiary Status: GSV, despite being a material subsidiary, has had no business operations since its inception. Its primary function has been to earn passive income through interest on fixed deposits and loans advanced to GKB Ophthalmics.
• Financial Impact: As of March 31, GSV held Rs. 5.00 crores in unsecured loans to GKB Ophthalmics. It contributed Rs. 1.16 crores to the total income (1.05% of consolidated income) and Rs. 16.21 crores to the net worth (28.72% of consolidated net worth).

Implications of the Liquidation

1. Consolidated Financials: The primary impact on GKB Ophthalmics' consolidated financials will be through reduced other income, specifically from interest on fixed deposits.
2. Loan Repayment: GKB Ophthalmics will repay the unsecured loan of Rs. 5.00 crores to GSV during the liquidation process, in accordance with applicable laws.
3. Investment Recovery: GKB Ophthalmics expects to recover its 79.54% equity investment in GSV after deducting liquidation costs.

Next Steps

1. Shareholder Approval: GKB Ophthalmics will seek shareholder approval through a postal ballot, with a cut-off date of September 26.
2. Regulatory Compliance: The company is complying with SEBI LODR regulations by seeking prior approval from shareholders through postal ballot under Regulation 24(5).
3. Postal Ballot Process: A postal ballot notice and explanatory statement will be issued to shareholders whose e-mail addresses are registered with the company or depositories as of the cut-off date.

Management Commentary

The Board of Directors noted that the proposed voluntary liquidation of GSV Ophthalmics Private Limited does not constitute a sale, lease, or disposal of GKB Ophthalmics Limited's undertaking outside a Scheme of Arrangement. Therefore, the provisions of Regulation 37A of SEBI LODR are not affected.

This strategic move by GKB Ophthalmics to liquidate its non-operational subsidiary appears to be aimed at streamlining its corporate structure and potentially improving overall financial efficiency. Shareholders and market observers will be keenly watching the outcome of the postal ballot and the subsequent liquidation process.