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FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2018
TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Thirty Sixth (36th) Directors Report of your Company along with the financial statements for the financial year ended 31st March, 2018.
1. Certain key aspects of your Companys performance during the financial year ended 31st March, 2018, as compared to the previous financial year are summarized below:
|(Rs. in Lakhs)|
|Year ended 31.03.2018||Year ended 31.03.2017||Year ended 31.03.2018||Year ended 31.03.2017|
|Income for the year||34436.21||4947.08||35557.16||6408.56|
|Expense for the year||33456.42||3842.73||34600.03||5141.58|
|Profit before Tax and Interest||979.79||1104.35||957.13||1266.98|
|Provisions for Taxation/ Deferred Tax||(1.17)||(1.37)||9.78||10.52|
|Net Profit / (Loss) for the Current Year||1166.27||882.85||1132.65||995.75|
|Minority Interest & Profit from Associate Company||-||-||(9.98)||25.77|
|Net Profit After Tax||1166.27||882.85||1142.63||969.95|
|Transfer to General Reserves|
|Balance carried to Balance Sheet||1166.27||882.85||1142.63||969.95|
2. DIVIDEND AND RESERVES:
Your Directors recommend for approval of the Members at the ensuing Annual General Meeting (AGM), a dividend of 0.50 paisa (5%) per equity share of Rs. 10 each, for the financial year ended 31st March, 2018. The dividend will be paid in compliance with the applicable rules and regulations.
No amount was transferred to General Reserve during the year
3. SHARE CAPITAL
During the year under review, the Company vide special resolution dated 15th December, 2017 has issued 3,20,000 (Three Lac Twenty Thousand only) Convertible Warrants ("Warrants") on a preferential basis to Non-Promoter Individuals with a right to Warrant Holders to apply for and get allotted one equity share of face value of Rs.10/- (Rupees Ten Only) each (the "Equity Shares") for each Warrant, within a period of 18 (Eighteen) months from the date of allotment of Warrants and the Board of Director of the Company vide resolution dated 05th February, 2018 has allotted 2,84,552 equity shares to the warrant holder of the Company, due to which the paid up share capital of the Company has increased from Rs. 6,22,50,000 to Rs. 65,095,520 consisting of 6509552 fully paid up equity shares of the Company.
The Company vide ordinary resolution dated 26th February, 2018 passed by way of postal ballot has increased the Authorised Share Capital from existing Rs.7,50,00,000/-(Rupees Seven Crore Fifty Lacs only) divided into 75,00,000 (Seventy Five Lacs only) equity shares of Rs.10/-each to Rs.30,00,00,000/- (Rupees Thirty Crore only) divided into 3,00,00,000 (Three Crore only) equity shares of Rs.10/- each ranking pari pasu with existing shares of the Company. In the same notice of postal ballot which consist of increase in Authorised share capital of the Company, the Company also got approved the issue of Bonus Equity Shares to the Equity Shareholders of the Company in the ratio of 2:1. The board of Director of the Company at its meeting held on 08th March, 2018 has allotted 13019104 bonus equity shares to the Equity Shareholders of the Company.
Hence the Paid up Capital of the Company which was stood at Rs. 6,22,50,000 on 31st March, 2017 has increased to Rs. 19,52,86,560 consisting of 1,95,28,656 fully paid equity shares of the Company on 31st March, 2018.
4. OVERVIEW OF OPERATIONS:
During the year under review, on Standalone basis your Company recorded a total income of Rs. 34,436.21 lakhs as compared to last years total Income of Rs. 4,947.08 lakhs and Net Profit of Rs. 1166.27 lakhs as compared to last years net profit of Rs. 882.85 Lakhs. For further information, kindly refer to Management Discussion and Analysis Report which includes the growth of the Company, forming part of this Annual report.
5. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 ("the Act") and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure I to the Annual Report.
6. NUMBER OF MEETINGS OF THE BOARD
The Board met 9 (Nine) times in Financial Year 2017-18 (FY 2017-18) viz., on 01st April, 2017, 30th May, 2017, 10th August, 2017, 14th November, 2017, 18th November, 2017, 24th January, 2018, 05th February, 2018, 08th March, 2018 and 27th March, 2018.
The details of attendance of Director with respect to above meetings are as follows:
|Name of Director||No. of Meeting eligible to Attend||No. of Meeting Attended|
|Mr. Suresh Gaggar||9||9|
|Mr. Ramakant Gaggar||9||9|
|*Mr. Dinesh Nandwana||3||1|
|*Dr. Vidhu Kakkar||7||7|
|Mrs. Manju Maheshwari||9||9|
|Mr. Sharad Rathi||9||9|
* Dr. Vidhu Kakkar has appointed on 30th May, 2017 and resigned w.e.f from 26th March, 2018/ Mr. Dinesh Nandwana has resigned from the Board w.e.f 10th August, 2017
7. DIRECTORS RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. 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, 2018 and of the profit of the Company for that period.
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 for financial year ended 31st March, 2018 on a going concern basis.
v. 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.
vi. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149(7) of the Act, confirming that they meet the criteria of independence under Section 149(6) of the Act, and Regulation 16 (1)(b) of the Securities Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
9. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act and Regulation 19 of Listing Regulations, is appended as Annexure II to this Annual Report.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
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, 2018 are given in the notes to the Financial Statements forming part of this Annual report.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2017-18, your Company has not entered into transactions with related parties as defined under section 2(76) of the Act, read with the Companies (Specification and Definitions Details), Rules, 2014 and Rules made thereunder and Regulation 23 of the Listing Regulations. All the transactions with the Related Parties are at arms length basis and these transactions are not of material in nature as per Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of Board and its Powers) Rules, 2014. The related party transactions are placed before the Audit Committee as also the Board for approval. The Form AOC- 2 of the Companies (Accounts) Rules, 2014 is set out as Annexure III to this Annual Report.
The details of party transactions as required under Accounting Standard-18 are set out in notes to accounts to the Financial Statements forming part of this Annual Report.
The Policy on Related Party Transaction may be accessed on the Companys website at the link: http://garnetint.com/ mdocs-posts/related-party-transactions-policy/
12. 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.
13. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 is given in Annexure IV to this Annual Report.
14. 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.
15. 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, 2018, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this report as Annexure V.
16. VIGIL MECHANISM
The Company has adopted a Vigil Mechanism and Whistle Blower Policy for Directors and Employees in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. The said policy is also available on the Companys website: http://garnetint.com/mdocs-posts/vigil-mechanisim-policy/
17. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act, and Regulation 17 of the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria for the Board, its Committees and Directors.
The Boards functioning was evaluated on various aspects, including inter alia degree of fulfilment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.
The Committees of the Board were evaluated after taking inputs from the Committee members on the basis of criteria such as degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members.
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.
18. SUBSIDIARY COMPANIES
The Company is having one material Subsidiary i.e. Sukartik Clothing Private Limited. Further, Company has also formulated policy for determining material subsidiary and the same is available on Companys website and the same may be accessed at the link: http://garnetint.com/mdocs-posts/policy-for-determining-material-subsidiary/
Further during the year Garnet Valorem Capital Ventures Private Limited was incorporated as subsidiary of the Company on 16th January, 2018.
Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statement of the Subsidiary company in Form AOC-1 is attached to the a part of this Report as Annexure- VI.
19. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE COMPANIES ACT 2013
The Company has neither accepted nor renewed any deposits during the Financial Year 2017-18 in terms of Chapter V of the Act.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
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.
21. INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to financial statements. 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 Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.
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.
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Section 152(6)(e) of the Act, Mr. Suresh Gaggar (DIN: 00599561), Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The Board of Directors, at its meeting held on 30th May, 2017 has appointed Dr. Vidhu Kakkar as an Additional Independent Director. Further as per the declaration given by her she has been re-designated from Additional Non Executive Independent director to Non-Executive Non Independent Director and she has resigned from the Board w.e.f. 26th March, 2018. Mr. Dinesh Nandwana has also resigned as an Independent Director of the Company w.e.f 10th August, 2017.
Board places on record its appreciation for the assistance and guidance provided by Mr. Dinesh Nandwana and Dr. Vidhu Kakkar during his tenure as Director of the Company.
Further the Board of Director at its meeting held on 28th June, 2018, subject to approval of members, the Board has appointed Mr. Suresh Gaggar as Chairman of the Company, Mr. Ramakant Gaggar as Managing Director of the Company and Dr. Jaswantsingh Patil as an Additional Independent Director of the Company. Mr. Ramakant Gaggar and Dr. Jaswantsingh Patil, if appointment approved by the member, will be appointed for the period of 05 years commencing from 28th June, 2018.
1. Statutory Auditor
The members of the Company at its meeting held on 27th September, 2017 has appointed M/s. MVK Associates, Chartered Accountants, Mumbai, (ICAI Registration No. 120222W) as Statutory Auditor of the Company for second consecutive term of five years i.e. from the conclusion of 35th Annual General meeting of the Company till the Conclusion of the 40th Annual General Meeting of the Company subject to ratification by the shareholders of the Company at every annual general meeting of the Company held thereafter or as may be necessitated by the Act from time to time.
M/s. MVK Associates, Chartered Accountants, Mumbai, (ICAI Registration No. 120222W) have confirmed their eligibility and qualification required under 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, 2018 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, 2018: a. Companys Financial Assets constitutes more than 50% of total assets and income from financial assets constitutes more than 50% of the gross income, in lieu of this, Company has changed its Main Object clause and is also under process of registering itself with RBI under Sec. 45IA.
b. In the case of one of the Subsidiary Company, Provision for Employee benefits has not been done as per Accounting Standard 15 which deals with "Employee Benefits".
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 40th Annual General Meeting of the Company.
2. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Sidharth Sharma & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the year ended 31st March, 2018. The Secretarial Audit Report is annexed as Annexure VII to this Annual Report.
Following are the observation given by the Secretarial Auditor of the Company:
a) The Company is required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. In lieu of this, Company has changed its main object clause and is also under process of registration itself with RBI under Section 45-IA.
b) The Company has generally complied with Section 135 of Companies Act, 2013, except for the amount lying unspent.
24. CORPORATE GOVERNANCE
Pursuant to Listing Regulations, the Management Discussion & Analysis Report and Corporate Governance Report together with Certificate from Practicing Company Secretary, on compliance with the conditions of Corporate Governance as lay down, forms a part of this Annual Report.
25. AUDIT COMMITTEE OF THE COMPANY:
The Companys Audit Committee comprises the following Directors:
1. Mr. Sharad Rathi (Chairman);
2. Mr. Ramakant Gaggar;
3. Mrs. Manju Maheshwari
The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations.
26. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits, top 10 employees in terms of remuneration drawn and other Disclosures pertaining to remuneration are provided in Annexure VIII to this Annual Report.
Having regard to the provisions of the proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company
The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
Your Directors express their sincere appreciation of the co-operation received from shareholders, bankers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.
|For and on behalf of the Board of Directors|
|Mumbai, 28th June, 2018|
|901, Raheja Chambers, Nariman Point, Mumbai 400021|
|CIN : L74110MH1995PLC093448|
|Email ID: email@example.com|
|Website : www.garnetint.com|
|Tel No : 91-022-22820714|