Garnet International Ltd Directors Report.

Your Directors have pleasure in presenting the Thirty Ninth (39th) Directors Report of your Company along with the Financial Statements for the Financial Year ended 31st March, 2021

FINANCIAL RESULTS (under Indian AS):

Financial Results are as under:

Particulars

Standalone

Consolidated

Year ended 31.03.2021 Year ended 31.03.2020 Year ended 31.03.2021 Year ended 31.03.2020
Income for the year 129.06 233.80 1778.06 1753.32
Expense for the year 416.52 1452.98 2015.87 2850.54
Profit before Tax and Interest (287.47) (1219.18) (237.81) (1097.22)
Current Tax - - (9.13) 23.24
Provisions for Taxation/ Deferred Tax 127.22 (63.02) 126.16 (58.38)
Net Profit / (Loss) for the Current Year (414.69) (1156.16) (354.84) (1062.08)
Minority Interest & Profit from - - 17.89 28.13
Associate Company
Net Profit After Tax (414.69) (1156.16) (372.73) (1090.21)
Transfer to General Reserves - - - -
Balance carried to Balance Sheet (414.69) (1156.16) (372.73) (1090.21)

PERFORMANCE REVIEW

The year under review has been one of the most challenging years for your Company. The COVID-19 pandemic outbreak which began in the middle of March 2020 continued to impact the economy throughout the financial year 2020-21. The year was full of uncertainties with slowdown in activities on the ground. The Company is taking all necessary measures in terms of mitigating the impact of the challenges being faced in the business. It is focused on controlling costs, maintaining liquidity and closely monitoring to the operations. The Company carries shares and securities in its books. The effects of mark to market profit / losses thereon have been taken into account in the Statement of Profit and Loss for the year. The Company believes that it has taken into account the impact of known events arising out of COVID 19 pandemic in the preparation of financial results resulting out of fair valuation of the investments.

The year 2020-2021 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. 129.06 Lakhs as compared to last years total Income of Rs. 233.800 Lakhs and Net Loss of Rs. 414.69 Lakhs as compared to last years net loss of Rs. 1156.16 Lakhs.

The stock exchanges were permitted to function uninterruptedly during the lockdown and as such investment and related operations of the Company were not affected substantially. Based on current indicators of future economic conditions, the Company expects to recover the carrying amount of financial and non financial assets held by the Company. Consequent to significant opening up of the economic activity in the country, the demand for the Subsidiary companys products has improved compared to that during the initial phases of Covid-19 including the lock down period. All the business segments of the Subsidiary Company have substantially recovered as at year end. In preparation of these financial statements, the Group has taken into account both the current situation and likely future developments.

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 2021. No amount was transferred to General Reserve during the year.

FIXED DEPOSITS

The Company has no public deposits as of date and will not accept any deposits without prior approval of the Statutory Authorities concerned.

SHARE CAPITAL

During the year under review, there is no change in the Share capital of the Company. During the year under review, the Company has not issued any sweat equity shares or bonus shares or equity shares with differential rights.

CHANGE IN NATURE OF BUSINESS

There has been no change in nature of business of the company during the F.Y. 2020-2021. 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

During the year Seven Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

KEY MANAGERIAL PERSONNEL

During the year under review Ms. Kumkum Shah has been appointed as the Company Secretary with effect from October 15, 2020. There is no change among the Key Managerial Personnel during the year under review.

DIRECTORS

To comply with the requirement of minimum number of Directors on the Board of the Company pursuant to the regulation 17 (1)(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Board of Directors on March 27, 2021 appointed Mr. Shyaam Taaparia (DIN:07369692) as an Additional Director on the Board. He holds his Office as Director till ensuing Annual General Meeting and being eligible offer himself for re-appointment.

In terms of Section 152 of the Act, Mr. Ramakant Gaggar is liable to retire by rotation at the forthcoming Annual General Meeting ("AGM") and being eligible, offers himself for re-appointment.

The Company has received necessary disclosure and confirmation from concerned Director(s) in connection with their appointment / re-appointment. Additional information on appointment / reappointment of Directors as required under Regulation 36 of SEBI Listing Regulations, is given in the

Notice convening the ensuing AGM. The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Act that they meet the criteria of independence laid down in Section 149(6) of the Act and Regulation 25 of SEBI Listing Regulations.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the Directors individually. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were inter-alia evaluated on parameters such as level of engagement, contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board except the Director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

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.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Companys policy is to have an appropriate mix of Executive, Non-Executive and Independent directors to maintain the independence of the Board, and separate its functions of governance and management.

As on March 31, 2021, the Board had six members out of which three are Independent Directors including a Women Independent Director, two Board Members are Executive Directors and one Board Member is a Non-Executive Non Independent Director.

The Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of this Annual Report.

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.

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.

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, 2021 are given in the notes to the Financial Statements forming part of this Annual report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual return in Form MGT-9 is annexed herewith as Annexure – A.

SECRETARIAL STANDARDS

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

INDIAN ACCOUNTING STANDARD (IND AS)

The Company has adopted Indian Accounting Standards ("IND AS") from April 01, 2019 with a transition date of April 01, 2018. Accordingly, the financial statement for the year 2020-21 have been prepared in accordance with IND AS, prescribed under Section 133 of the Act, read with the relevant rules issued thereunder and the other recognized accounting practices and policies to the extent applicable.

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, 2021, 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, 2021 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, 2021 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, 2021 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, 2021:

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 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.

Secretarial Auditor

Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s Siddharth Sharma & Associates, a Peer Reviewed firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit reports of Garnet International Limited along with its material subsidiary is annexed herewith as Annexure "B" & "G".

The Secretarial Audit Report has a qualifications regarding the composition of the board not in compliance as per Regulation 17(1) of SEBI Listing Regulations from 24th August 2020 to 26th March 2021, to which the management states that due to continuous lockdown announced initially by Central Government & then by State Government in order to control spread of COVID-19 pandemic in the country, it was challenging for the company to find a suitable candidate to fit in the position of Director of a listed entity. The non-compliance was made good by appointment of Mr. Shyaam Taaparia, as Additional (Non-Independent & Non-Executive) Director on March 27, 2021. However, Bombay Stock Exchange levied fine of Rs. 5,24,000, in response of which Company filed ‘Waiver Application, which is still pending with BSE.

Further there were non compliance under Regulation 33 and 6 (1) of SEBI Listing Regulations with regard to delay in submission of financial results to Bombay Stock Exchange for financial year ended March 2020 & quarter ended June 2020 and delay in appointment of compliance officer respectively, to which management states that in light of the restriction in physical movement due the second wave of COVID 19 pandemic, company office was closed most of time which resulted in minor delay in submission of results to Stock Exchanges, further it was challenging for company to find suitable candidate, in such situation, as Compliance Officer. Non Compliance was made good by appointment of Ms. Kumkum Shah as Compliance Officer with effect from October 15, 2020. BSE had levied penalties which were paid by the Company.

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, 2021, 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:

The information required under Section 197(12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as "Annexure F".

Details required under the provisions of section 197(12) of the Act read with rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be made available to any member on request, as per provisions of section 136(1) of the Act.

VIGIL MECHANISM

The Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has established a vigil mechanism to be known as the Whistle Blower Policy for its Directors and employees, to report instances of unethical behavior, actual or suspected, fraud or violation of the Companys Code of Conduct. The aim of the policy is to provide adequate safeguards against victimization of whistle blower who avails of the mechanism and also provide direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.

Accordingly, ‘Whistle Blower Policy has been formulated with a view to provide a mechanism for the Directors and employees of the Company to approach the Chairman of the Audit Committee of the Company. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise a concern about serious irregularities within the Company.

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 Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code has been placed on the Companys website www.garnetint.com

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

DISCLOSURES

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

During the year under review, the Company has not issued any Debentures.

The Chairman and the Managing Director, as per the terms of their appointments, does not draw any commission or remuneration from subsidiary company. Therefore, no disclosure is required under Section 197(14) of the Act.

Maintenance of cost records and requirement of cost Audit as prescribed under the provisions of Section 148(1) of the Act are not applicable to the business activities carried out by the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed-off during the year 2020-21.

Number of complaints received: Nil Number of complaints disposed off: Nil Number of complaints pending: Nil

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, 2021.

CORPORATE GOVERNANCE

The Annual Report contains a separate section on the Companys corporate governance practices, together with a certificate from the Companys Auditors confirming compliance, as per SEBI Listing Regulations.

ACKNOWLEDGMENT

Your Directors would like to place on record their sincere appreciation to Shareholders, Bankers, Institutions and Employees for their cooperation and support.

For and on behalf of the Board of Directors
Suresh Gaggar
Chairman
DIN: 00599561
Mumbai, 14th August, 2021