GRM Overseas Ltd Directors Report.

TO,

THE MEMBERS,

GRM OVERSES LIMITED

Your Directors have great pleasure in presenting their 25th Annual Report together with the Audited Accounts

of the Company for the Year ended March 31, 2019.

Standalone Consolidated
Particular As at the end of current reporting period As at the end of previous reporting period As at the end of current reporting period As at the end of previous reporting period
Revenue from 10,70,63,06,673 9,24,96,03,328 11,09,05,02,975 9,44,15,30,171
Operations
Other Income 1,45,06,142 Nil 1,45,06,142 7,15,464
Total Income 10,72,08,12,815 9,24,96,03,328 11,10,50,09,117 9,44,22,45,635
Operating Expenditure 10,28,96,47,072 8,90,09,98,032 10,74,42,29,981 9,09,15,38,493
Earnings before
Interest, Tax, Depreciation and Amortization (EBITDA) 43,11,65,743 34,86,05,295 36,07,79,135 35,07,07,142
Depreciation and 2,15,43,424 2,02,60,505 2,15,85,054 2,02,88,503
Amortization Expenses
Finance Costs 15,84,68,063 14,73,84,780 15,98,69,456 14,75,51,767
Profit before
Exceptional Items and Tax 25,11,54,256 18,09,60,010 17,93,24,626 18,28,66,871
Exceptional Items Nil Nil Nil Nil
Tax expense
Current Year 8,94,36,859 6,35,33,795 8,93,23,281 6,36,32,291
Deferred Tax Credit (7,37,089) 6,71,942 (7,37,089) 6,87,902
Mat Credit Entitlement Nil Nil Nil Nil
Profit After Tax (PAT) 16,24,54,486 11,67,54,273 9,07,38,433 11,85,46,678
Other Comprehensive Income Nil Nil Nil Nil
Total Comprehensive Income for the year 16,24,54,486 11,67,54,273 9,07,38,433 11,85,46,678
Balance as per the last Financial Statements 57,03,95,268 40,79,40,782 47,80,68,715 40,96,92,291
Financial Statements Appropriations
1. Dividends + Tax 2,22,39,438 Nil 2,22,39,438 Nil
2. Transfer to General Nil Nil Nil Nil
Reserve Nil Nil Nil Nil
3. Prior period Items Nil Nil Nil
Retained Earnings 54,81,55,830 40,79,40,782 47,80,68,715 40,96,92,291
Earning per equity share
1 Basic 44.03 31.65 24.59 32.13
2. Diluted 44.03 31.65 24.59 32.13

CURRENT YEAR WORKING:

Your Directors hereby inform you that in the current year the overall performance of the company are good as compare to the last financial year. During the current year the Company would make all efforts to accelerate its pace of growth and overall performance.

DIVIDEND:

Based on Companys performance in the current year, the Board of Directors of the Company has recommended a final dividend of Rs. 5 per equity share of face value of Rs. 10/- each, for the year ended March 31, 2019. The same shall be paid subject to the approval of shareholders in the ensuing Annual General Meeting of the Company.

TRANSFER TO RESERVES

The Company has not transferred any amount to reserves.

Changes in the nature of business, if any

There is no change in the nature of business of your company during the year under review.

SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has One subsidiary viz., GRM International Holdings Ltd. and one step down subsidiary viz., GRM Fine Foods Inc. which is yet to commence operations. There are no associate companies within the meaning of Section2(6) of the Companies Act, 2013 ("Act"). Further there has been no material change in the nature of business of the subsidiaries during the financial year 2018-19.

The Consolidated Financial Statements of your Company for the financial year 2018-19 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, applicable Indian Accounting Standards (Ind As) and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations"). The consolidated financial statements have been prepared by consolidating audited financial statements of your Company and its subsidiaries, as approved by the respective Board of Directors. Further, pursuant to the proviso of sub section (3) of section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 a separate statement containing the salient features of the financial statements of Subsidiaries of the Company in the prescribed form AOC-1 is given in the Consolidated Financial Statements, forming part of this Annual report as Annexure 5

Consolidated Turnover is 11,09,05,02,975/- Rupees as compared to 9,44,15,30,171/- Rupees in the same period previous year. Consolidated Net Profit after Tax is 9,07,38,433/- Rupees as compared to Rs 11,85,46,678/- Rupees in the previous year.

The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Sunday and holiday upto the date of the Annual General Meeting(‘AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office / Corporate Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents shall also be available on Companys website www.grmrice.com in downloadable format.

SHARE CAPITAL:

The paid up equity capital as on March 31, 2019 was Rs. 3,68,95,000/-.There has been no change in the Equity Share Capital of the Company during the year. The Company has no other type of securities except equity shares forming part of paid up capital.

TRANSFER OF AMOUNTS AND SHARES TO INVESTOR EDUCATION & PROTECTION FUND

Pursuant to the provisions of Section 124 of the, Audit, Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting Transfer and Refund) Amendment Rules, 2017, read with all relevant notifications as issued by the Ministry of Corporate Affairs from time to time all shares in respect of which dividend has remained unpaid or unclaimed for a period of seven years have been transferred by the Company, within the stipulated due date, to the Investor Education and Protection Fund (IEPF).

Your Company during the year 2018-19 has transferred a total amount aggregating to Rs.1,93,820/- as Unpaid Final Dividend for FY 2010-11to the Investor Education and Protection Fund. This amount was lying unclaimed/ unpaid with the Company for a period of seven years after Declaration of Dividend for the financial year 2010-11.

A list of shareholders along with their folio number or DP. ID. & Client ID., who have not claimed their dividends for the last seven consecutive years i.e. 2011-12 to 2017-18 and whose shares are therefore liable for transfer to the IEPF Demat account, has been displayed on the website of the Company at www.grmrice.com.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, 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

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relates and till the date of this Report.

SEGMENT REPORTING

Your company is engaged and focused on single activity of ‘Rice Sheller to provide better results and to be leader in its core activity.

BOARD OF DIRECTORS

As on March 31, 2019, your Companys Board has a strength of 08 (Eight) Directors including 1 (One) Woman Director. The Chairman of the Board is an Executive Director.

The composition of the Board is as below:

Category Number of Directors % to Total Number of Directors
Executive Directors 2 25.00
Non Executive, Non Independent Director 2 25.00
Independent Non-Executive Directors 4 50.00

AUDIT COMMITTEE

As on March 31, 2019, the Audit Committee of GRM Overseas Limited comprises of following 3 (Three) Members, all are Independent Non-Executive Directors:

Name Designation
Mr. Raj Kumar Garg Chairman
Mr. Pardeep Kumar Singal Member
Ms. Kiran Dua Member

All the recommendation made by the Audit Committee was accepted by the Board of Directors. The Powers and role of the Audit Committee are included in report on Corporate Governance forming part of this Annual Report.

KEY MANAGERIAL PERSONNEL:

The following employees were designated as whole-time key managerial personnel by the Board of Directors during the year under review:

(i) Mr. Rohit Garg, Managing Director (ii) Mr. Atul Garg Joint Managing Director (iii) Mr. Rattan Lal Mittal, Chief Financial Officer

(v) Mr. Gourav Kumar- Company Secretary

REMUNERATION POLICY

The Board has, on the recommendation of the Appointment & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2018-19, 5 (Five) Board meetings were held. For details thereof kindly refer to the section ‘Board Meeting and Procedures - Details of Board Meetings held and attended by the directors during the financial year 2018-19, in the report of Corporate Governance forming part of this Annual Report.

STATEMENT ON ANNUAL EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

The Board has laid down the manner and criteria of evaluation of the Board of its own, Committees and Individual Directors in which annual evaluation of the Board, Committees of the Board and Individual Directors would be evaluated. The said criteria are aligned with the SEBI circular dated 5th January 2017 on ‘Guidance Note on Board Evaluation. The evaluation includes various criteria including performance, knowledge, roles and responsibilities etc.

The Board of Directors has evaluated its Committees, Individual Directors (i.e. Executive and Non-executive Director) and the Board itself. After evaluation, the Board found their performances upto the mark and satisfactory. The Nomination and Remuneration Committee has also evaluated the individual performance of each Director and found it satisfactory.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, the Directors confirm:

i) that in the preparation of the Annual Accounts for the year ended March 31, 2019, the applicable Indian Accounting standards (Ind AS) have been followed and that there are no material departures;

ii) that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs as at March 31, 2019 and of the profit of the Company for the Financial year ended March 31, 2019;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts for the year ended March 31,2019 have been prepared on a going concern basis;

v) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY

All Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with SEBI Listing Regulations, so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and SEBI Listing Regulations.

OPERATIONS, PERFORMANCE AND FUTURE OUTLOOK OF THE COMPANY

A detailed review of operations and performance and future outlook of the Company is given separately under the head ‘Management Discussion & Analysis pursuant to Regulation 34 read with Part B of Schedule V of SEBI Listing Regulations, and the same is annexed and forms part of this Annual Report.

PARTICULARS OF REMUNERATION OF DIRECTORS AND KMPs

A statement containing the details of the Remuneration of Directors and KMPs as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as part of this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is attached as

‘Annexure 1 which forms part of this Report.

WEB ADDRESS FOR ANNUAL RETURN www.grmrice.com

AUDITORS AND AUDITORS REPORT

i ) STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013, and rules framed their under the tenure of current auditors M/s VinodKumar & Associates., Chartered Accountants, (FRN-002304N) shall come to an end at the conclusion of forthcoming AGM.

Further, subject to the approval of shareholders of the Company in the ensuing annual general meeting M/s. Vinod Kumar & Associates., Chartered Accountants, (Firm Registration No. 002304N) was recommended for reappointment by the Audit Committee and approved by the Board as Statutory Auditors of the Company to hold office from the conclusion of the 25th Annual General Meeting till the conclusion of 27th Annual General Meeting of the Company to be held in the year 2021, at such remuneration as may be mutually agreed between the Board of Directors of the Company in consultation with statutory auditors.

The Company has also received a certificate from the Auditors to the effect, interalia, that their appointment, if made, would be within the limits laid down by the Act and they are not disqualified for such appointment under the provisions of applicable laws.

The present Statutory Auditors- M/sVinodKumar & Associates., Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2018-19, which forms part of the Annual Report 2018-19. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of Companies Act, 2013 read with rules framed thereunder, either to the Company or to the Central Government.

ii) SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Devesh Arora & Associates, Company Secretaries, having their office at, Plot no 71-72 second floor D-16 sector-7Rohini -110085 to undertake the Secretarial Audit functions of the Company.

The Secretarial Audit Report submitted by M/s Devesh Arora & Associates, in the prescribed form MR- 3 is attached as ‘Annexure 2 which forms part of this Report. The Secretarial Auditors Report does not contain any qualification, reservation or adverse remark.

EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

There is no other qualification, reservation or adverse remark or disclaimer made by the auditor in his report; and the company secretary in practice in his secretarial audit report.

CORPORATE GOVERNANCE

The Corporate Governance report which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Listing Obligation and Disclosure Requirements) 2015. (Annexure 7)

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The company has duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of the company.

The Annual Report on CSR activities is annexed herewith as: Annexure 3

ENERGY CONSERVATION, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of activities in the nature of Energy Conservation, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as ‘Annexure 4 which forms part of this Report

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. 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 recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

APPOINTMENT OF INTERNAL AUDITOR:

The Company has appointed CA Mohit Arya as an Internal Auditor of the Company. During the period under review Ms. Heena Aggarwal, was internal auditor of the company. She placed the internal audit report to the Company which is self explanatory and need no comments.

*Ms. Heena Aggarwal Resigned from the post of internal Auditor after the closure of financial year.

DISCLOSURE ON DEPOSITS UNDER CHAPTER V

The Company has neither accepted nor renewed any deposits during the Financial Year 2018-19 in terms of Chapter V of the Companies Act, 2013. Further, the Company is not having any Unpaid or Unclaimed Deposits at the end of the Financial Year.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Board of Directors of the Company has laid down a policy on prevention of sexual harassment at the workplace. A Complaint Committee has also been formed by the Board of Directors to look into the complaints received, if any. During the year, the Company did not receive any complaint under the said policy.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

During the year under review there was no Change in Capital Structure and Listing of Shares. The Companys shares are listed and actively traded on the Bombay Stock Exchange.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.The details of the investments made by company is given in the notes to the financial statements.

RELATED PARTY TRANSACTIONS:

During the year under review, the Board has adopted a policy to regulate the transactions of the Company with its related parties. As per policy, all the related party transactions required prior approval of Audit Committee and Board of Directors of the Company. Prior approval of shareholders of the Company is also required for certain related party transactions as prescribed under Companies Act, 2013 and listing agreement. The said policy is available at the company website viz. http/www.grmrice.com.

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the 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.(AOC-2 Annexure 6)

DISCLOSURE ON VIGIL MECHANISM (WHISTLE BLOWER POLICY)

Pursuant to Regulation 22 of SEBI Listing Regulations, your Company has established a mechanism calledVigil Mechanism (Whistle Blower Policy) for directors and employees to report to the appropriate authoritiesof unethical behaviour, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy and provides safeguards against victimization of employees who avail the mechanism. The policy permits all the directors and employees to report their concerns directly to the Chairman of the Audit Committee of the Company.

‘The Vigil Mechanism (Whistle Blower Policy) as approved by the Board, is uploaded on the Companys website.

MATERIAL ORDERS BY GOVERNING AUTHORITIES

There were no significant or material orders passed by any governing authority of the Company including regulators, courts or tribunals, which could affect the going concern status and the Companys operations in future.

FINANCE:

Cash and cash equivalents as at March 31, 2019 was Rs.11,987,284/-. The company continues to focus on judicious management of its working capital, Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

INDUSTRIAL RELATIONS:

During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

DIRECTORS:

In accordance with the Section 152 of the Companies Act, 2013 & Articles of Association of the Company, Mr. Nipun Jain, Director of the Company, retire by rotation at the ensuing Annual General Meeting & being eligible offers herself for re-appointment and the Board of Directors recommends for his re-appointment.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and applicable provisions of the SEBI(LODR) Regulations, 2015 the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

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 Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Companys website www.grmrice.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. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with the Code.

PARTICULARS OF EMPLOYEES:

PARTICULARS PURSUANT TO SECTION 197(12) READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

• The ratio of the remuneration of each director to the median employees remuneration for the financial year and such other details as prescribed is as given below:

Name of Director Ratio
Shri Atul Garg- (Whole-Time-Director) 58.34
Shri Rohit Garg- (Whole-Time-Director) 58.34

• The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:-

S.No. Name Designation % Change
1. Mr. Rohit Garg Chairman & Managing Director 58.33
2. Mr. Atul Garg Whole-Time-Director 58.33
3. Mr. Hukam Chand Garg Director Nil
4. Mr. Gourav Kumar Company Secretary NA
5. Mr. Rattan Lal Mittal Chief Financial Officer Nil

• The percentage increase in the median remuneration of employees in the financial year:- Nil

• The number of permanent employees on the rolls of company:-108

• The explanation on the relationship between average increase in remuneration and company performance:-

Year ended 2018 Year ended 2019 % increase
Employee benefit expenses 2,93,60,956.00 3,34,64,370 13.97
Sales 9,24,96,03,328 10,70,63,06,673 15.74
Profit 11,67,54,273 16,24,54,486 39.14
EPS 31.65 44.03 39.11

• Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and there are any exceptional circumstances for increase in the managerial remuneration:-N.A

• The key parameters for any variable component of remuneration availed by the directors:-N.A

• The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:-N.A

• Affirmation that the remuneration is as per the remuneration policy of the company. YES

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required by Regulation 34 read with Para B of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 {‘SEBI (LODR) Regulations, 2015}, a detailed ‘Management Discussion and Analysis Report (MDA) is attached as a separate section forming part of the Annual Report. More details on operations and a view on the outlook for the current year are also given in the ‘Management Discussion and Analysis Report.

HEALTH, SAFETY AND ENVIRONMENT PROTECTION:

The Company has complied with all the applicable environmental law and labour laws. The Company has been complying with the relevant laws and has been taking all necessary measures to protect the environment and maximize worker protection and safety.

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 co-operationand assistance.

Sd/- Sd/-
Atul Garg HUKAM CHAND GARG
Place : Delhi Managing Director Chairman Director
Date : 31-08-2019 DIN : 02380612 DIN : 00673276