Gautam Gems Ltd Directors Report.

To,

The Members,

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

1. FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY (STANDALONE)

The Boards Report is prepared based on the stand alone financial statements of the company.

(Amount in Rs
PARTICULAR 201819 2017-18
Total Income for the year was 43,72,82,468 28,66,48,645
Operating & Administrative expenses 43,42,46,188 28,48,93,029
Profit/(Loss) Before Depreciation And Taxes 30,36,280 17,55,616
Less: Depreciation 5,56,460 5,49,214
Net Profit/(Loss) Before Tax 24,79,820 12,06,402
Less: Provision For Tax 5,10,000 3,10,000
Deferred Tax 1,60,560 98,881
Profit/(Loss) After Tax 18,09,260 7,97,521
EPS 0.33 0.15

2. OPERATION & REVIEW

To receive, consider and adopt the audited Balance Sheet as at 31st March, 2019 and Statement of Profit & Loss together with Notes forming part thereto (“Financial Statement”) for the year ended on 31st March, 2019 and Report of the Board of Directors and Auditors thereon.

Total Revenue from operation of the company is Rs. 43,72,82,468/- And the net Profit after tax is Rs. 18,09,260/- For the Financial year 2018-19.

3. DIVIDEND

The Board of directors of your company has not recommended any dividend for the financial year ended on 31st March, 2019.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed dividend, the provisions of Section 125 of the Companies Act, 2013 do not apply.

5. TRANSFER TO RESERVES

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

6. CHANGE IN THE NATURE OF THE BUSINESS

During the year, there is no change in the nature of the business of the Company.

7. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board composition of the Company shall be as follows:

Sr. No. Name of Directors/KMPs Designation
1 Gautam Pravinchandra Sheth Managing Director
2 Nidhi Gautam Sheth Whole time Director
3 Kanchanben Pravinbhai Sheth Executive Director
4 Pravin Manilal Parekh Non-Executive Professional Director
5 Prakash Nanalal Mehta Non-Executive Independent Director
6 Harshit Hasmukhbhai Vadecha* Non-Executive Independent Director
7 Sandip Vinodbhai Makwana Chief Financial Officer

• Mr. Gautam Pravinchandra Sheth is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer herself for re- appointment.

• During the year under the review Mrs. Preeti Jain has resigned from the post of Company Secretary w.e.f. 14.05.2018.

• The board of directors of the company has appointed Mr. Harshit Hasmukhbhai Vadecha as an Additional Independent Director of the company w.e.f. 30.05.2019 and shall be regularised in ensuing annual general meeting.*

• Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received necessary declaration from each Independent Director confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Further there was no change in the Board of Director of the Company except above changes.

8. NUMBER OF BOARD MEETINGS

During the Year under the review the Board of Directors met 5 (Five) times, Details of the

Meetings are as under.

Board Meetings held during the Year

Date on which the Board Meetings were held Total Strength of the Board No of directors present
14th May 2018 5 5
30th May 2018 5 5
01st September 2018 5 5
14th November 2018 5 5
25th February 2018 5 5

Attendance of Directors at Board Meetings and Annual General Meeting

Date on which the Board Meetings were held Category of Directors

Attendance

Directorsh ip in other Public Companies

Committees Position

Board Last AGM Chairman Member
Gautam Pravinchandra Sheth Managing Director 5 Yes 1 0 0
Nidhi Gautam Sheth Whole time Director 5 Yes 0 1 1
Kanchanben Pravinbhai Sheth Executive Director 5 Yes 0 0 1
Pravin Manilal Parekh Non-Executive Professional Director 5 Yes 0 0 4
Prakash Nanalal Mehta Non-Executive Independent Director 5 Yes 0 3 4
Harshit Hasmukhbhai Vadecha* Non-Executive Independent Director NA NA 0 0 3

*Mr. Harshit Hasmukhbhai Vadecha has appointed as an Additional Independent Director of the company w.e.f. 30.05.2019.

In respect of said meetings proper notices were given and proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

9. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulation, 2015 The Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee. The evaluation covered functioning and composition of the Board and its committees, understanding of the roles and responsibilities, experience, competencies, participation at the Board and Committee meetings, corporate governance practices etc.

Evaluation of the Board and its compositions was carried out through a defined process covering the areas of the Boards functioning viz. composition of the Board and Committees, understanding of roles and responsibilities, experience and competencies, contribution at the meetings etc.

10. 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:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with 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 the end of the financial year and of the profit/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 on a going concern basis; and

(e) The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

11. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial Controls with reference to Financial Statements. The Board has inter alia reviewed the adequacy and effectiveness of the Companys internal financial controls relating to its financial statements.

During the year, such Controls were tested and no reportable material weakness was observed

12. CHANGE IN CAPITAL SRUCTURE OF COMPANY

During the year under review, The Company has not made any changes in the Capital Structure of the Company.

13. MATERIAL CHANGES AND COMMITMENTS, IF ANY

• During the year under the review there are No other material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which this financial statements relate on the date of this report.

14. EXTRACT OF THE ANNUAL RETURN

The Extract of Annual Return as required under section 134(3)(a) read with Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9, is annexed herewith as "Annexure - A"

15. AUDITORS AND THEIR REPORT

• STATUTORY AUDITOR

The Company has appointed M/s. PARTH SHAH AND ASSOCIATES Chartered Accountant, Ahmedabad (FRN: 144251W) as a Statutory Auditor of the Company as per the Provision of Section 139 of Companies Act 2013 for the Period of Five Years till the 10th AGM to be held in 2023 with no further need for ratification at every Annual General Meeting to be held during the said period.

The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.

The Auditors Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

• COST AUDITOR

The Company has not appointed the Cost Auditor as pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit is not applicable to the Company.

• SECRETARIAL AUDITOR

In terms of Section 204 of the Act and Rules made there, Practicing Company Secretary have been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed to this report as "Annexure - B". The report is self-explanatory.

16. DEPOSITS

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 (“the Act”) read with the Companies

(Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable.

17. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

18. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of rule (9) of the Companies (Accounts) Rules, 2014 The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT. 2013

During the year, the Company has not given any loan, guarantee or provided security in connection with the loan to any other body corporate or person or made any investments hence no particulars of the loans, guarantees or investments falling under the provisions of Section 186 of the Companies Act, 2013 are provided by the Board.

20. RELATED PARTY TRANSACTIONS

During the year under review, contracts or arrangements entered into with the related party, as defined under section 188 of the companies Act, 2013 were in ordinary course of business and on arms length basis. Details of the transactions pursuant to compliance of section 134(3)(h) of the companies act, 2013 and rule 8(2) of the companies (Accounts) Rule, 2014 are annexed herewith as per “Annexure - C".

However, 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.

21. SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There is no significant and material order was passed by regulators or courts or tribunals impacting the going concern status and companys operations in future.

22. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY:

I. the steps taken or impact on conservation of energy : Nil

II. the steps taken by the company for utilising alternate sources of energy : None

III. the capital investment on energy conservation equipments : Nil

B. TECHNOLOGY ABSORPTION:

I. the efforts made towards technology absorption : None

II. The benefits derived like product improvement, cost reduction, product development or import substitution: None

III. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

a) The details of technology imported: None

b) The year of import: N.A.

c) Whether the technology been fully absorbed: N.A.

d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: N.A.

e) The expenditure incurred on Research and Development: Nil

C. There was no foreign exchange inflow or Outflow during the year under review

23. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS RELATIONSHIP COMMITTEE / SEXUAL HARASSMENT COMMITTEE

• Audit Committee

Constitution. & Composition, of Audit Committee:

Our Company has formed the Audit Committee vide resolution passed in the meeting of Board of Directors held on 30.05.2019 and further amended as per the applicable provisions of the Section 177 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended) and also to comply with Regulation 18 of SEBI Listing Regulations (applicable upon listing of Companys Equity Shares).

The composition of the Audit Committee and details of meetings attended by the members of the Audit Committee are given below:

Name Designation Category

No. of Meetings held during the Period

Held Attended
Prakash N. Mehta Chairman Non-Executive- Independent Director 2 2
Pravin M. Parekh Member Non-Executive- Director 2 2
Mrs. Nidhi G. Sheth Member Wholetime Director 2 2
Mr. Harshit Hasmukhbhai Vadecha* Member Non-Executive- Independent Director NA NA

*Mr. Harshit Hasmukhbhai Vadecha appointed as a member of the committee w.e.f. 30.05.2019

• Nomination, and Remuneration Committee:

Constitution & Composition of Remuneration. Committee:

Our Company has formed the Nomination and Remuneration Committee as per Section 178 and other applicable provisions of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended) and also to comply with Regulation 19 of SEBI Listing Regulations (applicable upon listing of Companys Equity Shares). The Nomination and Remuneration Committee comprises the following members:

Name Designation Category

No. of Meetings held during the Period

Held Attended
Prakash N Mehta Chairman Non-Executive- 2 2
Independent Director
Pravin M Parekh Member Non-Executive- Director 2 2
Mr. Harshit Hasmukhbhai Vadecha* Member Non-Executive- Independent Director NA NA

*Mr. Harshit Hasmukhbhai Vadecha appointed as member of the committee w.e.f. 30.05.2019

The Policy of nomination and Remuneration committee has been place on the website of the company at www.gautamgems.com and the salient features of the same has been disclosed under "Annexure - D"

• Stakeholders Relationship Committee:

Constitution & Composition of Stakeholders Relationship Committee:

Our Company has formed the Stakeholders Relationship Committee as per Section 178 and other applicable provisions of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended) and also to comply with Regulation 20 of SEBI Listing Regulations (applicable upon listing of Companys equity shares)vide board resolution dated 30.05.2019.

The constituted Stakeholders Relationship Committee comprises the following members:

Name Designation Category

No. of Meetings held during the Period

Held Attended
Mr. Prakash N Mehta Chairman Non-Executive- Independent Director 2 2
Mr. Harshit Hasmukhbhai Vadecha* Member Non-Executive- Independent Director NA NA
Mrs. Nidhi G Sheth Member Executive Director 2 2

*Mr. Harshit Hasmukhbhai Vadecha appointed as member of the committee w.e.f.

30.05.2019

• Sexual Harassment Committee

Name Designation

Category

No. of Meetings held during the Period

Held

Attended
Nidhi G Sheth Chairman

Wholetime Director

1

1
Pravin M Parekh Member

Non Executive Director

1

1
Prakash N Mehta Member

Non-Executive-

1

1
Independent Director
Kanchanben Pravinbhai Sheth Member Director

1

1

Constitution & Composition of Sexual Harassment Committee:

The Sexual Harassment Committee was constituted by the Board of Directors at the meeting held on November 27, 2017 in compliance with the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act, 2013.

24. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and analysis Report as Required under Regulation 34 and Schedule V of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report, and provides the companies current working and future outlook of as per "Annexure - E”

25. CORPORATE GOVERNANCE

Since the Companys Securities are not listed during the year under review, Regulation 15(2) of SEBI (Listing Obligation and Disclosures requirement) Regulation, 2015, Report on Corporate Governance is not applicable to Our Company; hence Company has not obtained a Certificate from a Practicing Company Secretaries certifying the same.

26. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continuous support received from the Members, customers, suppliers, bankers, various statutory bodies of the Government of India and the Companys employees at all levels.

For and on behalf of Board
DATE: 02/09/2019 SD/- SD/-
PLACE: AHMEDABAD Gautam P Sheth Nidhi G Sheth
Managing Director Whole-time Director