Garware Synthetics Ltd Directors Report.

To

The Members,

Garware Synthetics Limited

Your Directors have pleasure in presenting their 50th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2019.

FINANCIAL RESULTS:

(Amount in Rupees)

PARTICULARS 2018-2019 2017-2018
Revenue from operation 10,64,09,176 9,60,17,171
Other Income 33,06,394 24,724
Profit/ (Loss) for the year before providing Depreciation & Financial Charges 10,97,15,570 9,60,41,895
Less: Depreciation 2,63,053 2,22,550
Financial Charges 19,70,528 8,57,477
Profit/(Loss) Before Exceptional Items and Tax 13,66,386 38,48,820
Exceptional Items and Extraordinary Item 1,51,14,517 -
Profit Before Tax (1,37,48,131) 38,48,820
Current Tax - -
Current tax relating to prior years - 2,89,961
Deferred Tax - 1,13,460
Profit After Tax (1,37,48,131) 34,45,399

BUSINESS REVIEW:

The Company achieved the Revenue from Operations of Rs. 10,64,09,176/- during the financial year ended on 31st March, 2019 as against Rs. 9,60,17,171/- achieved during the previous year ended on 31st March, 2018.

During the year Company incurred Net Loss of Rs. 1,37,48,131/- as against Net Profit of Rs. 34,45,399/- during the previous year ended on 31st March, 2018.

DIVIDEND:

With a view to strengthen the financial position of the Company and for the future growth of the Company your Directors did not recommend any dividend for its shareholders.

TRANSFER TO RESERVES:

During the year under review, the Company has not transferred any amount to Reserves.

DEPOSITS:

During the year under review, your Company has not accepted deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint Venture or Associate Company as per the provisions of Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The particulars of loans, guarantees and investments made / given by the Company in the year 2018 - 2019 as per section 186 of the Companies Act, 2013 has been disclosed in the note to accounts of Financial Statements.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

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

PARTICULAR OF CONTARCTS OR ARRANGEMENT WITH RELATED PARTY TRANSACTION:

The Particular of contracts and arrangements entered into by the Company with related parties as referred in section 188 of companies Act, 2013 and Rules made thereunder, are on arms lengths basis and are mentioned in "ANNEXURE-I" to Directors report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has proper and adequate internal control systems commensurate with the nature of its business, and size and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and all assets and resources are acquired economically, used efficiently and adequately protected.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as" ANNEXURE-II"

DIRECTORS:

Appointment:

Mrs. Shilpa Sagar Parab has been appointed as Independent Women with effect from 31.01.2019.

Cessation:

Mrs. Kavita Pawar Independent Director ceased to be Director w.e.f from 31.01.2019.

Retirement by rotation:

Pursuant to section 152 and other applicable provision, if any, of the Companies Act, 2013, the article of association of the Company Mr. Santosh Bhalchandra Borkar, Executive Director is liable to retire by rotation at the ensuing AGM. Being eligible Mr. Santosh Bhalchandra Borkar has offered himself for reappointment. Appropriate resolution for his re-appointment is being placed for the approval of the shareholders of the Company at the ensuing AGM.

None of the Directors are disqualified from being appointed as specified in Section 164 of the Companies Act, 2013 as amended.

Declaration by an Independent Director(s) and Re- Appointment:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of Companies Act, 2013 read with Rules and Regulation 16(1)(b) of SEBI (Listing Obligation and disclosure requirements) Regulation, 2015 with the Stock Exchanges.

Formal Annual Evaluation:

In terms of the provisions of the Act, the Board has carried out annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee (NRC).

Remuneration Policy:

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

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

As the Company does not fall under the Class of Companies as prescribed under Section 135 of Companies Act, 2013 and Rules made thereunder, therefore the provisions related to Corporate Social Responsibility is not applicable to the Company.

PERFOMANCE EVALUATION:

Pursuant to the provision of the Companies Act, 2013 read with rules thereunder, regulation 17(10) of the listing regulations and circular issued by SEBI dated 5th January, 2017 with respect to guidance note on board evaluation, the evaluation of the annual performance of the Director/board/Committees was carried out for the Financial year 2018-2019.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors met 11 times during the year and the gap between two Board meetings did not exceed one hundred and twenty days as follows:.

30.05.2018 05.07.2018 14.08.2018 01.10.2018 13.11.2018 07.12.2018
31.01.2019 14.02.2019 15.02.2019 29.03.2019 30.03.2019

Details of the changes in composition and attendance of Members of the Board during the year 2019 are as follows:

Sr. No. Name of Director Designation Category

No. of Meetings

Held Attended
1. Mr. Sunder Moolya Chairman Whole time Director 11 11
2. Mr. Santosh Borkar Director Executive Director 11 11
3. Mr. Kirtikumar Bhailal Doshi Independent Director Non- Executive Director 11 11
4. Mrs. Kavita Pawar (Ceased w.e.f 31.01.2019) Independent Woman Director Non Executive Director 7 7
5. Mr. Ramesh G Chandorkar Independent Director Non- Executive Director 11 11
6. Mrs. Shilpa Parab (Appointed w.e.f. 31.01.2019) Independent Director Non Executive Independent Director 4 4

AUDIT COMMITTEE:

The Company has an Independent Audit Committee which has been formed in pursuance of Regulation 18 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 and Section 177 of the Companies Act, 2013.

The Primary objective of the committee is to monitor and provide effective supervision of the managements financial reporting process to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting.

Details of the changes in composition and attendance of Members of the Audit Committee during the year 2019 are as follows:

Four Audit Committee Meetings were held during the year as below:

30.05.2018 14.08.2018 13.11.2018 14.02.2019

The Following are the members of the Audit Committee:

Sr. No. Name of Director Designation Category

No. of Meetings

Held Attended
1. Mr. Kirtikumar Bhailal Doshi Chairman Non- Executive Independent Director 4 4
2. Mrs. Kavita Pawar (Ceased w.e.f 31.01.2019) Member Non Executive Independent Director 3 3
3. Mr. Ramesh G Chandorkar Member Non- Executive Independent Director 4 4
4. Mrs. Shilpa Parab (Appointed w.e.f. 31.01.2019) Member Non Executive Independent Director 1 1

NOMINATION AND REMUNERATION COMMITTEE:

The purpose of this committee of the Board of Directors (‘the Board) shall be to discharge the Boards responsibilities related to nomination and remuneration of the Companys Directors and Key managerial personnel.

The Committee has the overall responsibility of approving and evaluating the nomination and remuneration plans, policies and programs for Directors and Key managerial personnel.

Details of the changes in composition and attendance of Members of the Audit Committee during the year 2019 are as follows:

Three Nomination and Remuneration Committee Meetings were held during the year as below:

14.08.2018 31.01.2019 30.03.2019

The Following are the members of the Nomination and Remuneration Committee:

Sr. No. Name of Director Designation Category

No. of Meetings

Held Attended
1. Mr. Kirtikumar Bhailal Doshi Chairman Non- Executive Independent Director 3 3
2. Mrs. Kavita Pawar (Ceased w.e.f 31.01.2019) Member Non Executive Independent Director 2 2
3. Mr. Ramesh G Chandorkar Member Non- Executive Independent Director 3 3
4. Mrs. Shilpa Parab (Appointed w.e.f. 31.01.2019) Member Non Executive Independent Director 1 1

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The committee reviews shareholders complaints and resolution thereof. The Committee expresses satisfaction with the Companys performance in dealing with investor grievances and its share transfer system.

Details of the changes in composition and attendance of Members of the Stakeholder relationship Committee during the year 2019 are as follows:

Four Stakeholder relationship Committee Meetings were held during the year as below:

30.05.2018 14.08.2018 13.11.2018 14.02.2019

The Following are the members of the Stakeholder relationship Committee:

Sr. No. Name of Director Designation Category

No. of Meetings

Held Attended
1. Mr. Kirtikumar Bhailal Doshi Chairman Non- Executive Independent Director 4 4
2. Mrs. Kavita Pawar (Ceased w.e.f 31.01.2019) Member Non Executive Independent Director 3 3
3. Mr. Ramesh G Chandorkar Member Non- Executive Independent Director 4 4
4. Mrs. Shilpa Parab (Appointed w.e.f. 31.01.2019) Member Non Executive Independent Director 1 1

INDEPENDENT DIRECTORS:

Independent Directors play an important role in the governance processes of the Board. They bring to bear their expertise and experience on the deliberations of the Board. This enriches the decision making process at the Board with different points of view and experiences and prevents conflict of interest in the decision making process.

None of the Independent Directors serves as "Independent Directors" in more than seven listed companies. No person has been appointed or continuing as an Alternate Director for an Independent Director of the Company.

Based on the disclosures received from all the Independent Directors and also in the opinion of the Board, the Independent Directors fulfills the conditions specified in SEBI (LODR) Regulations, 2015 and are independent of the management.

During the year under review, the Independent Directors met on February14, 2019 interalia:

• To review the performance of the Non-Independent Directors (Executive Directors);

• To review the performance of the Board of the Company as a whole;

• To review the performance of Chairman of the Company taking into account the views of Executive Directors on the same;

• To assess the quality, quantity and timeliness of flow of information between the Company management and the Board.

They expressed satisfaction at the robustness of the evaluation process, the Boards freedom to express views on the business transacted at the Meetings and the openness with which the Management discussed various subject matters on the agenda of meetings.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed that:

1. in preparation of the annual accounts for the financial year ended March 31, 2019 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. they 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 the end of the financial year and of the profit and loss of the Company for that period;

3. they have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. they have prepared the accounts for the financial year on a going concern basis and are very much hopeful that the Companys performance will improve in the forth coming financial years;

5. they have laid down internal financial controls, which are adequate and are operating effectively;

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

SHARE CAPITAL:

The Authorized Share Capital of the Company is Rs. 10,00,00,000 (Rupees Ten Crores Only) divided into Equity share capital of 99,50,000 (Ninety Nine Lakhs Fifty Thousand Only) aggregating to Rs. 9,95,00,000 (Rupees Nine Crores Ninety five lakhs only) and 5,000 (Five Thousand) 13.5% Non-Cumulative Redeemable Preference share of Rs. 100 (Rupees One Hundred) aggregating to Rs. 5,00,000 (Rupees Five Lakhs Only).

The paid up capital of the Company is Rs. 5,80,89,000 (Rupees Five Crores Eighty Lakhs Eighty Nine Thousand Only) Divided into 58,08,900 (Fifty Eight Lakhs Eight thousand Nine Hundred) Equity Shares of Rs. 10 (Rupees Ten) each.

During the year 2018 - 2019 there was no change in Share capital and the Company has not made any issue of equity shares with differential voting Rights, Sweat Equity Shares and Employee Stock Option.

DISCLOSURE RELATING TO EMPLOYEES RELATION AND REMUNERATION OF DIRECTORS & KMP

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) is as follows:

Name of the Director Amount of remuneration to Directors Percentage increase in the remuneration Ratio of remuneration of each Director / to median remuneration of employees
Mr. Sunder Moolya 5,30,000 7.29 2.68
Mr. Santosh Borkar 3,88,500 7.92 1.96

1. The Independent Directors do not receive any remuneration except sitting fees.

2. There was change in the remuneration of Directors.

3. The percentage increase in the median remuneration of the employees in the financial Year was 54 %

4. As on 31st March 2019 there were a total of 79 employees on the roll of the Company.

5. It is affirmed that the remuneration is as per the remuneration policy of the company.

6. None of the employee of the Company was in receipt of the remuneration (throughout the financial year or part thereof) as per Rule 5(2) of the Companies (Appointment of Managerial Personnel) 2014.

The Company does not have any Holding or Subsidiary Company and Associate Company as per Companies Act, 2013 and Rules made thereunder.

WHISTLE BLOWER POLICY:

The Company has a vigil mechanism named Fraud and Risk Management Policy to deal with instance of fraud and mismanagement, if any.

The Company has a Fraud Risk and Management Policy to deal with instances of fraud and mismanagement, if any. The FRM Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.

CODE FOR PREVENTION OF INSIDER TRADING:

During the year, the Company has amended the Code of Conduct for Prohibition of Insider Trading and Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and also formulated Policy on procedures to be followed while conducting an inquiry in the event of leak or suspected leak of Unpublished Price Sensitive Information in line with the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018. The amended codes viz. "Code of Conduct for Prohibition of Insider Trading" and the "Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information" allows the formulation of a trading plan subject to certain conditions and requires pre-clearance for dealing in the Companys shares. It also prohibits the purchase or sale of Companys shares by the Designated Persons, while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.

AUDITORS:

M/s. Krunal H. Shah & Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company for period of 5 years i.e. from conclusion of the 49th Annual General Meeting until the conclusion of 54th Annual general meeting of the Company.

Pursuant to the amendments made to Section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017 effective from May 7, 2018 the requirement of seeking ratification of the Members for the appointment of the Statutory Auditors has been withdrawn from the Statute. In view of the above, ratification by the Members for continuance of their appointment at this AGM is not being sought. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

STATUTORY AUDIT REPORT:

The Report of the statutory Auditors along with the notes to schedule is enclosed to this report.

SECRETARIAL AUDIT:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board of Directors of the company has appointed M/s. S. G and Associates, Practicing Company Secretaries (Mumbai) to undertake the Secretarial Audit of the Company for the Financial Year 2018-2019. The Secretarial Audit report i.e. Form MR-3 is "ANNEXURE III" to this report. The secretarial audit report contained following observations and remarks:

The observations made in the Secretarial Audit Report (MR-3) are as follows:

1. We further report that Company had failed to appoint Company Secretary as per the 6(1) of SEBI (LODR) Regulation, 2015 for which BSE Limited has imposed penalty.

2. We further report that the Company has not appointed Internal Auditor as required under Section 138 of the Companies Act, 2013 and Rules made thereunder.

3. We further report that the Company has not updated its Website as per Regulation 46 of SEBI (LODR) Regulation, 2015.

4. The Public Shareholding of the Company is not held in Dematerialized mode pursuant to notification of SEBI.

The Boards Comments on the observation are as follows:

1. The Company has appointed Mrs. Vrunda Mehta as a Company Secretary and Compliance Officer with effect from 31st January, 2019.

2. The Company is in process of Appointing Internal Auditor.

3. The Company is in process of updating the website.

4. The Company is regularly sending reminders to the Shareholders for getting their shares Dematerialized.

EXTRACT OF ANNUAL RETURN:

The Extract of Annual Return i.e. Form MGT-9 is forming the part of this Annual Report and is "ANNEXURE IV" to Directors report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report for the year on the operations of the Company, as required under SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 is provided as "ANNEXURE V" to the Annual Report.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.

During the financial year 2018-19, the Company has received 0 (zero) complaint on sexual harassment.

CORPORATE GOVERNANCE REPORT:

Pursuant to Regulation 27 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 a Report on Corporate Governance Report is not applicable to the Company as it does not fall under the criteria of Paid up Share Capital of Rs. 10 Crore and Turnover of Rs. 25 Crores.

LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2018-19 to BSE where the Companys shares are listed.

ACKNOWLEDGEMENTS:

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.

For and on behalf of the Board
For Garware Synthetics Limited,
Sd/- Sd/-
Date: 22nd August, 2019 Sunder. K. Moolya Santosh Borkar
Place: Mumbai Whole Time Director Director
DIN: 02926064 DIN: 03134348