Garnet International Ltd Directors Report.

Your Directors have pleasure in presenting the Thirty Eighth (38th) Directors Report of your Company along with the Financial Statements for the Financial Year ended 31st March, 2020.

RESULTS OF OUR OPERATIONS AND STATE OF AFFAIRS

Financial Results are as under:

Particulars

Standalone

Consolidated

Year ended Year ended Year ended Year ended
31.03.2020 31.03.2019 31.03.2020 31.03.2019
Income for the year 233.80 6884.90 1753.32 8309.77
Expense for the year 1452.98 12869.27 2850.54 14304.00
Profit before Tax and Interest (1219.18) (5984.38) (1097.22) (5994.23)
Current Tax - - 23.24 -
Provisions for Taxation/ Deferred Tax (63.02) (221.13) (58.38) (219.65)
Net Profit / (Loss) for the Current Year (1156.16) (5763.25) (1062.08) (5774.59)
Minority Interest & Profit from Associate Company - - 28.13 (3.39)
Net Profit After Tax (1156.16) (5763.25) (1090.21) (5771.20)
Transfer to General Reserves - - - -
Balance carried to Balance Sheet (1156.16) (5763.25) (1090.21) (5771.20)

Accounts for the year ended 31st March 2020 have been prepared in conformity with Indian Accounting Standards (Ind AS) notified under section 133 of Companies Act, 2013 (”the Act”) read with Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) Rules, 2016 from 1st April, 2019, leading to major changes in the Accounting policies.

COMPANYS PERFORMANCE

The year 2019-2020 has proven to be a tough year in the Global economy. The word economic slowdown has deeply impacted the business cycle all across the country. Your company has taken pandemic as opportunity to learn to focus on being prudent and building robust model. Your company has adopted solid business model for the coming years to calibrate the overall market dynamic and approaching with new strategies for business profitability.

The year 2019-2020 was not a good year for the company in terms of revenue and profit. During the year under review, on Standalone basis your Company recorded a total income of Rs. 233.80 Lakhs as compared to last years total Income of Rs. 6884.90 Lakhs and Net Loss of Rs. 1156.16 Lakhs as compared to last years net loss of Rs. 5763.25 Lakhs.

Management Discussion and Analysis (MDA) as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report. It provides details about the overall industry structure, global and domestic economic scenarios, developments in business operations/ performance of the Companys various businesses viz., decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2019-20.

IMPACT OF COVID-19 PANDEMIC

Since the first quarter of year 2020, the Covid-19 pandemic has impacted most of the countries, including India. Owing to the outbreak of COVID-19 and the related directives received from the Central & State governments, lockdown was announced with adoption of quarantine measures. This has largely affected the economic activity. The Indian economy has been impacted by this pandemic with contraction in industrial and services industries.

Your company immediately took measures for the safety and well being of the employees and adopted “work from home “policy for all employee providing them proper infrastructure and other requirements, so that there would be very little or minimal disruption. As of March 31, 2020, work from home was enabled to employees to work remotely and securely. The Registered office of the company was closed since initial lockdown was announced i.e. 24.03.2020.

SEBI vide its various circulars has granted relaxation in compliance requirements for reporting by listed entities to exchanges as required under SEBI (LODR) Regulation due to COVID 19 Pandemic. Further SEBI vide its circular issued dated 20.05.2020 on “Advisory on disclosure of material impact of CoVID-19 pandemic on listed entities under SEBI(LODR) Regulation 2015, noted that due to such a lockdown and disruption is unforeseen and beyond the control of the entities, such events can lead to distortions in the market due to the gap in information available about the operations of a listed entity. So, all listed entities were required to ensure that all available information about the impact of COVID 19 & Lockdown on the company and its operations to be communicated in a timely and cogent manner to its investors and stakeholders.

DIVIDEND

Your company has incurred loss during the year under review and so Board of Directors has decided not to recommend any dividend for the year ended 31st March 2020. No amount was transferred to General Reserve during the year.

INVESTOR EDUCATION AND PROTECTION FUND

In accordance with the applicable provisions of Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund ) Rules, 2016 (“IEPF Rules”), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years.

Further, according to IEPF Rules, the shares on which dividend have not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the Demat account of the IEPF Authority. The details relating to amount of dividend transferred to the IEPF and corresponding shares on which dividends were unclaimed for seven (7) consecutive years, are provided on the website of the Company www.garnetint.com.

CHANGE IN NATURE OF BUSINESS

There has been no change in nature of business of the company during the F.Y. 2019-2020. Your company is engaged in other financial services i.e. Investment in securities etc so there is only one segment reporting as per IND AS 108

MEETINGS OF BOARD

Regular Meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. Only in case of special and urgent business, if the need arises, the Boards/Committees approval is taken by passing resolutions through circulation or by calling Board/Board Committee meetings at short notice, as permitted by law.

The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed to enable the Directors to take an informed decision.

During the year under review six meetings of the Board were held. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of the Companies Act, 2013, Mr. Suresh Gaggar, Director, retires by rotation and being eligible, offers himself for re-appointment. Based on the performance evaluation and recommendation of the nomination and remuneration committee, the Board recommends his reappointment. A resolution seeking shareholders approval for her re-appointment forms part of the notice. During the year under review Mrs. Deepika Pandey, resigned from the post of Company Secretary w.e.f closure of business hours of 19.02.2020. There is no change among the Key Managerial Personnel during the year under review.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with rules made thereunder, Regulation 17(10) of the SEBI Listing Regulations and the Guidance note on Board evaluation issued by SEBI vide its circular dated January 5, 2017, the Company has carried out evaluation of the annual performance of its Directors, Chairman, the Board as a whole, as well as the evaluation of the working of its Audit, Nomination & Remuneration, Stakeholders Relationship and Corporate Social Relationship Committees and also for the Directors individually through self-assessment and peer assessment.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors

COMMITTEES OF THE BOARD

The Company has constituted mandatory Board-level committees with Executive and Non-Executive Directors in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholders Relationship Committee

d) Corporate Social Responsibility Committee

The details of mandatory Board committees with respect to the composition, terms of reference, number of meetings held, etc. are included in the Report on Corporate Governance, which forms part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT 2013

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, read with Companies (Meeting of Board and Its Powers) Rules, 2014 as on 31st March, 2020 are given in the notes to the Financial Statements forming part of this Annual report.

SHARE CAPITAL

The Company had allotted 320000 Convertible Equity Warrants in Financial Year 2017-18, out of which 2,84,552 warrants were converted into equivalent number of equity shares in Financial Year 2017-18.

During the financial year 2019-20, company had allotted the balance equity shares on conversion of 35,448 warrants on June 26, 2019. Company has also allotted the corresponding Bonus Shares on 35,448 Converted Warrants, earlier kept in abeyance on June 26, 2019.

As on March 31, 2020 the Paid up Share Capital of the Company stood at Rs. 19,63,50,000 consisting of 1,96,35,000 fully paid equity shares. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

DEPOSITS

The Company has not accepted any deposit from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

ANNUAL RETURN

The details forming part of the extract of the Annual return in Form MGT-9 as required under Section 92 of the Companies Act, 2013, is marked as Annexure - A which is annexed hereto and forms part of the Directors Report.

SECRETARIAL STANDARDS

The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

DIRECTORS RESPONSIBILITY STATEMENT

As stipulated in Section 134(3) (C) of the Companies Act, 2013, your Directors subscribe to the "Directors Responsibility Statement” and confirm that:

a) In the preparation of the annual accounts for financial year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2020 and of the loss of the Company for that period.

c) 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.

d) The Directors have prepared the annual accounts for financial year ended 31st March, 2020 on a ‘going concern basis

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently.

f) The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITOR

Statutory Auditor

M/s. B.M. Gattani & Co., Chartered Accountants, Mumbai, (ICAI Registration No. 113536W) have been appointed as an Auditor of the Company from 37th Annual General meeting of the Company till the Conclusion of the 42th Annual General Meeting of the Company pursuant to provisions of the section 139, 141 and other applicable provisions of the Act and rules issued thereunder (including all statutory modification and amendment made from time to time).

Auditors report for the financial year ended 31st March, 2020 forms part of this Annual Report. Following mentioned remarks are given by the Auditors of the Company in their Audit Report for the year ended 31st March, 2020:

a) Subsidiary of the Company has not made provision for employee benefit as per Accounting Standard 15 which deals with “Employee Benefits”.

b) The Company has granted interest free loans to its Subsidiary Company in violation of Section 186 (7) of Companies Act, 2013.

Management Reply for the Remark given by Statutory Auditor:

The Management has already started making CSR expenses. Further the Company is in talk with management of its material subsidiary so that adequate provisions for the employee benefit shall be made. Company ensures to recover the interest from subsidiary company in next financial year.

Further, the Audit Committee and Board of Directors of the Company recommends to the members of the Company for ratification of appointment of statutory auditor of the Company from this ensuing Annual General Meeting till the conclusion of the 42th Annual General Meeting of the Company

Secretarial Auditor

In terms of Section 204 of the Act and Rules made there under, M/s. Siddharth Sharma & Associates, Company Secretary in Practice, has been appointed as Secretarial Auditor of the Company. The Secretarial Audit Report for the financial year ended 31st March, 2020 under Companies Act, 2013, read with Rules made thereunder and Regulation 24A of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in the as Annexure - B to this Report.

Further, the Company has received certificate of Non- Disqualification of Directors from M/s. Siddharth Sharma & Associates, Company Secretary in Practice. The same is enclosed as Annexure - C to this report.

CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act. Your Companys Annual Report on the CSR activities undertaken during the financial year ended 31st March, 2020, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this report as Annexure - D.

SUBSIDIARY COMPANIES

The Company is having one material Subsidiary i.e. Sukartik Clothing Private Limited. There are no associate or Joint Venture Companies within the meaning of Section 2(6) of the Companies Act, 2013. There has been no material change in the nature of business of the Subsidiaries.

In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached with the Balance Sheet of the Company. However, the financial information of the Subsidiary Companies is disclosed in the Annual Report in compliance with the said circular in Form AOC 1 as Annexure - E.

The consolidated financial statements presented by the Company include financial results of its Subsidiary Company, i.e. Sukartik Clothing Private Limited and is available on the website of the Company www.garnetint.com.

BUSINESS RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Companys business.

PARTICULARS OF EMPLOYEES:

During the year, the Company paid an aggregate sum of Rs. 08.53 Lakhs to Key Managerial Personnel, Mr. Sanjay Raut, Chief Financial Officer and Mrs. Deepika Pandey, Company Secretary.

VIGIL MECHANISM

Pursuant to the provisions of revised Regulation 22 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Section 166 (9) & (10) of the Companies Act, 2013, the Company had established a Vigil Mechanism for Directors and Employees to report concerns of unethical behavior,

actual or suspected fraud or violation of the Companys Code of Conduct. The said policy is also available on the Companys website: https://garnetint.com/mdocs-posts/vigil-mechanisim-policy/

COMPLIANCE WITH SECRETARIAL STANDARDS OF ICSI

The Board of Directors affirms that the Company has duly complied with the applicable Secretarial Standards (SS) relating to Meetings of the Board (SS-1) and General Meetings (SS-2) issued by the Institute of Companies Secretaries of India which have mandatory application during the year under review.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size and scale of its operations. The Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act, to the extent applicable. These are in accordance with generally accepted accounting principles in India.

The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Companys policies, safeguarding of Companys assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

CODE OF CONDUCT

The Company has formulated a Code of Business Conduct and Ethics for Board of Directors and Senior Managerial Personnel. The confirmation of compliance of the same is obtained from all concerned on an annual basis. All Board Members and Senior Managerial Personnel have given their confirmation of compliance. A declaration duly signed by Managing Director and CFO is given under Corporate Governance Report as a separate section in this Annual Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were in the ordinary course of business. None of the Directors has any direct pecuniary relationships or transactions vis-a-vis the Company.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Your Company is an equal employment opportunity company and is committed to creating a healthy working environment that enables employees to work without fear of prejudice and gender bias. Your Company provides a work environment which ensures that every woman employee is treated with dignity, respect and equality. There is zero-tolerance towards sexual harassment and any act of sexual harassment invites serious disciplinary action.

The Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter referred to as “Prevention of Sexual Harassment Act”). Internal Complaints Committees have also been set up to redress any such complaints received. The Policy is meant to sensitize the employees about their fundamental right to have safe and healthy environment at workplace

Your Company affirms that during the year under review adequate access was provided to any complainant who wished to register a complaint under the Policy. During the year under review, your Company has not received any complaints on sexual harassment from any of its employees.

PERSONNEL

Your Directors wish to place on record their appreciation for the services rendered by the employees of the Company during the year.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the company is a Investment Company and has no manufacturing activity or other operations. Therefore, the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are not applicable. There were no foreign exchange earnings or outgoing during the financial year ended 31st March, 2020.

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

During the year under review, there are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

CORPORATE GOVERNANCE

Pursuant to Listing Regulations, the Management Discussion & Analysis Report and Corporate Governance Report together with Certificate from Practicing Chartered Accountant, on compliance with the conditions of Corporate Governance as lay down, forms a part of this Annual Report.

ACKNOWLEDGMENT

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Reserve Bank of India, Ministry of Corporate Affairs, the Securities and Exchange Board of India, and other Regulatory Authorities, Stock Exchange, other statutory bodies, companies bankers, members and employees of the Company for the cooperation and encouragement and continued support extended to the Company.

For and on behalf of the Board of Directors
Suresh Gaggar
Chairman
DIN:00599561
Mumbai, 24th August, 2020