Gaekwar Mills Ltd Directors Report.

To, The Members

Your Directors are pleased to present the Ninetieth Annual Report on the business and operations of the Company and the audited accounts for the year ended on March 31st, 2019.

FINANCIAL HIGHLIGHTS:

Particulars For the Year ended on 31.03.2019 For the Year ended on 31.03.2018
Total Income 28,45,018 37,07,202
Total Expenditure 4,18,71,487 4,26,77,425
Profit/(Loss) before taxation (3,90,26,460) (3,89,70,223)
Provision for Tax - -
Profit / (Loss) after tax (A) (3,90,26,460) (3,89,70,223)
Other Comprehensive Income - -
Profit / (Loss) after Other Comprehensive Income (B) - -
Profit / (Loss) for the period (A+B) (3,90,26,460) (3,89,70,223)

RESERVES:

The Company has not transferred any amount in the General Reserves during the period under review.

YEAR IN REVIEW:

The Company incurred loss of Rs. 3,90,26,460 during the year. This is essentially on account of pro-rata write off of premium on redemption of Secured Debentures of Rs. 30.00 crores.

The company had to defend frivolous litigation at various levels all initiated by un-recognized association / trade union of workers which has delayed the implementation of the project.

FUTURE PROSPECTS:

The Company is ready with its plans for developing an ultra-modern township on 60% of the land at Bilimora. The Company has awarded contracts for reconstruction and repair of compound wall as per new boundaries, which is being approved by Bilimora Nagarpalika. However the company is in process of taking all possible legal steps for removal of encroachments from the land of the company and fighting the cases filed against the company by various persons.

CHANGE IN TERMS AND CONDITION OF DEBENTURES

The Management of the Company has changed the terms and condition of the Non-Convertible Debentures issued under the Scheme of Compromise/Arrangement sanctioned by the Honble Bombay High Court passed in 2009. The approval of the Debenture holders is received on 30th May, 2017.Thecompany has provided for the provision of premium on redemption of debentures in the Balance Sheet for the year ended 31st March, 2017.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

The pending Litigation against the company are:

a. Appeal No. 455 of 2015 before the Hon. Division bench of Bombay High Court which has been admitted without any interim / ad-interim orders.

b. Appeal no 212 of 2017 is also pending before the Hon. Division bench of Bombay High Court which and is yet to admitted A notice of motion has also been filed in the said appeal for grant of interim / ad-interim reliefs the same is also pending for admission.

c. A Special Civil Application has also been filed before the Hon. Gujarat high Court against the Company and the same is also pending for admission.

Other than the above matters, no significant or material orders have been passed by any regulators or courts or tribunals against the Company during the year 2018-19.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material changes and commitments have occurred subsequent to the close of FY 2018-19 till date of this report.

DIVIDEND:

The Directors do not recommend any dividend for the financial year 2018-19, in view of the accumulated loss.

DIVIDEND DISTRIBUTION POLICY:

Pursuant to Regulation 43A of LODR Regulation 2015, the regulations related to Dividend Distribution Policy are not applicable to the Company.

DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

SHARE CAPITAL:

Upto the end of the Financial Year 2018-19, the Authorised, Issued and Paid up Share Capital of the Company was Rs. 2,00,00,000 (Rupees Two Crores) divided into 2,00,000 (Two Lakh) Equity Shares of Rs. 100/- each.

On 1st June 2018 the par value of the share was sub-divided from Rs 100/- to Rs 10/- and accordingly, the revised authorised, issued and paid up capital of the Company is Rs. 2,00,00,000 (Rupees Two Crore) divided into 20,00,000 (Twenty Lakh) Equity Shares of Rs 10/- each.

CORPORATE GOVERNANCE:

In terms of Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, compliance relating to Corporate Governance, is not applicable for the Listed Company having paid up equity share capital not exceeding Rs. 10 crores and net worth not exceeding Rs. 25 crores on the last day of the previous financial year.

As your Companys paid up equity share capital is not exceeding Rs. 10 crores and net worth not exceeding Rs. 25 crores, Regulation 17 to 27 and Clauses (b) to (i) of sub-regulation (2) of regulation 46 are not applicable and do not form a part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis forms a part of this Annual Report and is annexed to this as "Annexure C"

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Provision of Section 135 and Schedule VII of the Companies Act, 2013 in respect to Corporate Social Responsibility (CSR) is not applicable on the Company.

SUBSIDIARY COMPANIES:

During the year under review, no Company has become or ceased to be a Subsidiary/Joint Venture/ Associate Company of your Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has given Inter Corporate Deposit to its associate company M/s Platinum Square Pvt. Ltd. The details of Loans to Associate Company are provided in Note 20of the notes to accounts.

DEPOSITORY

The Company has sub-divided the face value of Equity Shares from Rs. 100/- to Rs. 10/- each approved on 1st June 2018. The new ISIN No. of the Company is INE837X01027.

Shareholders who wish to apply for dematerialization of their physical shares can contact the Registrar and Transfer Agent at below address:

M/s. Link Intime India Pvt. Ltd

Address:C 101, 247 Park, L B S Marg, Vikhroli West, Mumbai 400 083.

Email: rnt.helpdesk@linkintime.co.in

Contact No.: +91 22 49186000 Fax: +91 22 49186060

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:

A. Conservation of Energy, Technology Absorption

The particulars as required under the provisions of Section 134(3)(m) of the Companies Act,2013 in respect of Conservation of Energy and Technology Absorption have not been furnished as the same is not applicable to the Company during the year under review.

B. (a) Conservation of Energy measures taken: - N.A.

(b) Technology Absorption measures: - N.A.

C. Foreign Exchange Earnings And Outgo

There were no foreign exchange earnings and outgo during the year under review.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding remuneration of Directors, Key Managerial Personnel and other related disclosures are as below

1. The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Operating Officer, Company Secretary and ratio of the remuneration of each Director to the Median remuneration of the employees of the Company for the financial year 2018-19:

Name of Director/KMP Percentage increase in remuneration Ratio of remuneration of each Director / KMP to Median remuneration of employees
RatanKaranjia N.A. N.A.
Girish Shah N.A. N.A.
Shweta Dhruv Shah N.A. N.A.
Vaishali Rathod N.A. N.A.

2. The percentage increase in the median remuneration of employees in the financial year ended March 31, 2019: 0%

3. The number of permanent employees on the rolls of the Company: 1

4. Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof:-

Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2018-19 was 0%, whereas the increase in the managerial remuneration for the same financial year was Nil%.

The increment given to each individual employee is based on the employees potential, experience as also their performance and contribution to the Companys progress over a period of time and also as per the market trend.

5. Affirmation that the remuneration is as per the remuneration policy of the Company:

Remuneration to Directors, Key Managerial Personnel and other employees is as per the remuneration policy of the Company.

Information required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 viz Details of Top Ten Employees of the Company in terms of remuneration drawn during 2018-19 is not applicable as none of the employee is drawing remuneration in excess of the limits specified in the said Rule 5(2).

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company does not have employees more than 10, hence the declaration required under Sexual Harassment of Women at Work (Prevention, Prohibition and Redressal) Act does not apply.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

There were no contracts or arrangements entered into by the company in accordance with provisions of section 188 of the Companies Act, 2013.

There were no materially significant transactions with Related Parties during the financial year 2018-19 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in the Note 20 to the financial statements.

RISK MANAGEMENT POLICY:

The Company has formulated Risk Management Policy. The Board takes all necessary steps to identify and evaluate business risks and opportunities and take corrective steps.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an adequate system of internal controls commensurate with the size and the limited nature of its business activities.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review.

iii. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The directors have prepared the annual accounts on a going concern basis.

v. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

DIRECTORS:

During the year under review Mr. Rajen Doshi has resigned from the post of directorship w.e.f 19th March, 2019.

In accordance with the provisions of the Companies Act, 2013, Ms. Shweta Dhruv Shah (DIN: 03287393) retires by rotation at the ensuing AGM and being eligible offers herself for reappointment.

Mr. Girishbhai Champaklal Shah (DIN 03009213) and Mr. Ratan Noshir Karanjia (DIN 00033108) were appointed as Independent Director and their terms were expired on 31st March, 2019. They were also attending the age of 75 years during the period. The Company has reappointed them in the Extra Ordinary General Meeting held on 30th March, 2019 as an Independent Director on the Board of the Company, not liable to retire by rotation for a second term of 5 consecutive years from April 1, 2019 till March 31, 2024 as well as to continue to hold the position of Non-Executive Independent Director beyond 75 years of age.

DECLARATION BYINDEPENDENT DIRECTORS:

The Company has received declaration by all Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.

MEETINGS:

During the year under review,5 Board meetings were held. The dates of the meetings are 25th May, 2018, 14th August, 2018,14thNovember, 2018, 14thFebruary, 2019 and 5th March 2019.

The maximum interval between any two consecutive Board Meetings did notexceed 120 days.

Attendance of Directors at the Board Meeting is as under:

Sr. No. Name of Director Category No. of Meetings during FY 2018-19
Held Attended
1 Mr. Ratan Karanjia Independent 4 4
2 Mr. Girish Shah Independent 4 1
3 Ms. Shweta Dhruv Shah Non-executive Director 4 4
4 Mr. Rajen Doshi* Non-executive Director 4 4

*Mr. Rajen Doshi resigned w.e.f. 19th March, 2019.

COMMITTEES OF BOARD

AUDIT COMMITTEE

The audit committee of the Company is constituted in accordance with Section 177 of the Companies Act 2013 and Regulation 18 of SEBI (LODR) Regulations, 2015.

The Audit Committee acts as a link among the Management, the Statutory Auditors, and the Board of Directors to oversee the financial reporting process of the Company. The Committees purpose is to oversee the quality and integrity of accounting, auditing and financial reporting process including review of the internal audit reports and action taken report.

Composition of Audit Committee and attendance record of members for 2018-19.

Sr. No. Name of Directorship Chairman/ Member Category No. of Meetings during FY 2018-19
Held Attended
1 Ratan Karanjia Chairman Independent 4 4
2 Girish Shah Member Independent 4 1
3 Rajen Doshi* Member Non-executive Director 4 4

*Mr. Rajen Doshi resigned w.e.f. 19th March, 2019.

During the Financial Year 2018-19, 4 Meetings were held on 25th May, 2018, 14thAugust 2018, 14thNovember, 2018 and 14thFebruary, 2019.

The necessary quorum was present for all the meetings.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination & Remuneration Committee of the Company is constituted in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015.

Composition of Nomination & Remuneration Committee and the attendance record of members for 2018-19 is below:

Sr. No. Name of Directorship Chairman/ Member Category No. of Meetings during FY 2018-19
Held Attended
1 Ratan Karanjia Chairman Independent 1 1
2 Girish Shah Member Independent 1 1
3 Shweta Dhruv Shah Member Non-executive Director 1 1
4 Rajen Doshi* Member Non-executive Director 1 1

During the year 2018-19 1 meeting was held on 25th May 2018.The necessary quorum was present.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee of the Company is constituted in accordance with Section 178 of the Companies Act, 2013.

Composition of Stakeholders Relationship Committee and the attendance record of members for 2018 -19is below:

Sr. No. Name of Directorship Chairman/ Member Category No. of Meetings during FY 2017-18
Held Attended
1 Ratan Karanjia Chairman Independent 4 4
2 Girish Shah Member Independent 4 1
3 Shweta Dhruv Shah Member Non-executive Director 4 4
4 Rajen Doshi* Member Non-executive 4 4

*Mr. Rajen Doshi resigned w.e.f. 19th March, 2019.

During the Financial Year 2018-19, 4 Meetings were held on 25th May, 2018, 14th August 2018, 14th November, 2018 and 14th February, 2019.

The necessary quorum was present for all the meetings

BOARD EVALUATION:

Pursuant to the provision of the Companies Act, 2013 and the Listing regulations, the Board of Directors has made the formal annual evaluation of its own performance and that of its committees and individual directors and found it to be satisfactory.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KMP AND REMUNERATION POLICY:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of directors and recommends to the Board policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

TERMS OF APPOINTMENT & REMUNERATION CFO & MANAGING DIRECTOR:

During the year the company has not paid any remuneration to any of the non-executive directors.

KEY MANAGERIAL PERSONNEL:

The current Board of Directors comprises of Non-Executive and Independent Directors only. As the Company has not commenced any activity and has very limited resources, it has not been possible to employ Managing Director, Chief Financial Officer. The Board will take steps to recruit these personnel at the time of commencement of commercial activity.

VIGIL MECHANISM:

The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism policy are made available on the Companys website www.gaekwarmills.com

AUDITORS:

Pursuant to the provisions of Section 139(2), and Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, Mayur Mahesh Shah & Co., Chartered Accountants (Firm Registration No. 117604W) was appointed as a Statutory Auditor of the Company in the Annual General Meeting held on 26th September, 2017 for a term of five (5) consecutive years to hold office from the conclusion of the Annual General Meeting held for the financial year 2016-2017 till the conclusion of the 93rd Annual General Meeting of the Company to be held for the financial year 2022. The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed for the financial year 31.3.2020.The Ministry of Corporate Affairs vide its Notification dated 7thMay 2018, has dispensed with the requirement of ratification of Auditors appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditors appointment is not included in the Notice of the ensuing Annual General Meeting.

STATUTORY AUDITORS OBSERVATIONS:

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s Mayur Mahesh Shah & Co, Statutory Auditors, in their report

SECRETARIAL AUDITORS:

In terms of the provisions of section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board had appointed M/s. Anish Gupta& Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting Secretarial Audit of your Company for the financial year 31.3.2019. The report of the Secretarial Auditor is annexed herewith as "Annexure [A]"

SECRETARIAL AUDITORS OBSERVATIONS& COMMENTS FROM BOARD:

REMARKS OF THE SECRETARIAL AUDITOR

1. The company has not appointed Key Managerial Personnel as required under section 203 of Companies Act, 2013 and rules made thereunder during the year 2018-19 in respect of appointment of Managing Director or CEO or Manager or Whole Time Director and Chief Financial Officer.

2. The company has not complied with the regulation 31(2) of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 according to which 100% shareholding of promoters shall be in Dematerialized Form.

3. The Company is required to update its the website in respect of the information and documents as required to be updated under the various provisions of the Companies Act and Regulation 30(8) and 46 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015.

4. The Company has not filed form 22A - Active as required under Rule 25A of the Companies (Incorporation) Rules, 2014 and the status of the company on the MCA Portal is showing ACTIVE-not compliant.

5. Financial results in XBRL mode under regulation 33 of SEBI (LODR) for September, 2018 quarter is not submitted.

COMMENTS FROM THE MANAGEMENT

1. As the Company has not commenced any activity and has very limited resources, it has not been possible to employ KMP as required under section 203 of the Companies Act, 2013 and rules made thereunder. The Board will take steps to recruit these personnel at the time of commencement of commercial activity.

2. The Company is in process to dematerialize the 100% shareholding of Promoters.

3. The Company regularly update its website but due to some issue with the website developer current information and documents are not updated. The Directors have taken the note of the same and will do the compliance at the earliest.

4. As the Company has not commenced any activity and has very limited resources, it has not been possible to appoint Managing Director or other KMPs as required under section 203 of the Companies Act, 2013 and rules made thereunder. The Board will take steps to recruit these personnel at the time of commencement of commercial activity.

5. Company will do necessary compliances.

EXTRACT OF ANNUAL RETURN:

In terms of the provisions of Section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31stMarch, 2019 is given in Annexure [B]

OTHER DISCLOSURES:

• There were no material changes and commitments affecting the financial position of your Company between end of the financial year and the date of this report.

• Your Company has not issued any shares with differential voting.

• There was no revision in the financial statements.

• Your Company has not issued any sweat equity shares.

• During the year your Company has not received any complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

PREVENTION OF INSIDER TRADING:

The Company has ensured the compliance of Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Company has adopted the Code of Conduct for prevention of Insider Trading.

APPRECIATION:

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company and other interested parties at all levels for their continuous co-operation and assistance.

By Order of the Board of Directors
For Gaekwar Mills Limited
Shweta Dhruv Shah Ratan Karanjia
Place: Mumbai Director Director
Date: 14.08.2019 (DIN No: 03287393) (DIN No: 00033108)