Premco Global Ltd Directors Report.

To the Members of PREMCO GLOBAL LIMITED your Directors have pleasure in presenting their Thirty Fifth Premco Global Limited Annual Report together with the Audited Accounts for the year ended 31st March, 2019.

1. FINANCIAL SUMMARY HIGHLIGHTS

The FINANCIAL Performance for fiscal 2018-2019 is summarized in the following table:

Rs. in Lakhs

PARTICULARS Standalone Consolidated
March 2019 March 2018 March 2019 March 2018
Revenue from Operations 5323.39 6567.42 7,212.41 8,136.64
Expenses 4985.15 5609.82 6409.93 7044.55
Profit Before Finance Cost, Depreciation & Amortization Exp 338.24 957.6 802.48 1092.09
Finance Cost 79.62 83.41 150.17 100.36
Depreciation & Amortization Exp. 171.81 191.44 271.84 273.90
Profit before Exceptional Items 86.81 682.75 380.47 717.81
Extra Ordinary Items (106.56) - (106.56) -
Profit before Taxation (19.75) 682.75 273.91 717.81
Less : Provision for current Taxation 19.16 234.49 19.16 234.49
Deferred Taxation adjustment (54.78) (57.56) (54.78) (57.56)
Profit After Taxation 15.87 505.82 309.53 540.88
Minority Interest - - (48.82) (14.41)
Other Comprehensive Income (Net of Tax) 79.17 1.65 79.17 1.65
TOTAL Comprehensive Income 95.04 507.47 339.88 528.12
Paid up Equity Share Capital 330.48 330.48 330.48 330.48
Earnings Per Share (Rs.) 2.88 15.36 10.28 15.98

FINANCIAL PERFORMANCE, OPERATIONS AND STATE OF THE COMPANYS AFFAIRS STANDALONE ANALYSIS

During the year under review, Companys revenue from operations stood at Rs. 5323.39 Lacs as against Rs.6567.42 Lacs in the previous year, The Company has earned a Net profit after Tax of Rs. 15.87 Lacs as compared to the Net Profit after Tax of Rs. 505.82 Lacs during the previous accounting year.

The Companys EBDIT for the year on STANDALONE basis was at Rs 338.24 Lacs as against Rs. 957.6 Lacs.

The STANDALONE

Profit after Tax of the Company Stood at Rs 15.87 as against Rs. 505.82 Lacs.

Extraordinary item includes expenditure of Rs. 106.56 Lakhs booked towards reversal of GST credit on inventory held as on date of implementation of GST law i.e. Rs. 82.25 for Trans 1 credit (01.07.2017) & Rs. 24.31 for in-advert credit ( 01.08.2018). On the STANDALONE basis, Companys other operating revenue was lower by 67.02 % (Rs. 145.77 Lacs) due to lower duty drawback incentives post GST era w.e.f. 01.10.2017. Company has since revised the export prices to cover the cost. Other income was higher by 6.33% (Rs. 23.70 Lacs) as compared to previous year.

Domestic sales were lower by 10% (Rs. 295.98 Lacs) as compared to previous year. The decline was mainly on account of Lower domestic demand due to floods in Central &Southern part of India.

The Company exports were lower by 23% i.e. (Rs. 713.94 Lacs). This was on account of lower trading activity with companys own subsidiary & lower sales to one of our large customers.

PGVL Vietnam was able to develop and &procure supplies locally , thereby reducing the Raw Material sourcing from India.

The Company was able to pass on the lower duty drawback effect due to reduction in Rates to export customers, thereby improving the RM Consumption to Sales ratio by 3.36 %.

There is an increase in RM Cost of Rs. 61.56 Lacs due to increase in RM Prices The Company has incurred expenses (other than RM Cost) of Rs. 2496.59 Lacs in current year as compared to previous year of Rs. 2435.03 Lacs. Also Employee cost increased by Rs 25.15 Lacs as compared to previous year, which was on account of new recruitment in the Marketing division , which would strongly focus on new Markets , and building business with big brands Internationally and in India .

There has been decline in finance cost of Rs. 3.79 Lacs and Depreciation by Rs. 19.63 Lacs during the FINANCIAL year.

The Companys manufacturing expenses were higher by Rs. 59.83 Lacs due to revision in Contract / Piece rate & high electricity rates / cost. This was also partly due to higher production volumes

CONSOLIDATED ANALYSIS

During the year under review, On Consolidated basis, revenue from operations stood at Rs. 7,212.41 Lacs as against Rs. 8,136.64 Lacs in the previous year and Net

Profit after Tax stood at 309.53Lacs as compared to the Net Profit after Tax of Rs. 540.88Lacs during the previous accounting year.

The Companys Consolidated EBDIT for the year stood at Rs. 802.48Lacs as against Rs. 1092.09Lacs, The Consolidated Profit after Tax of the Company Stood at Rs. 309.53Lacs as against Rs. 540.88Lacs.

On the Consolidated basis, Companys other operating revenue was lower by 67.02 % (Rs. 145.77 Lacs) due to lower duty drawback incentives post GST era w.e.f. 01.10.2017. Company has since revised the export prices to cover the cost. Other income was increased by 4.90 % (Rs. 14.66 Lacs) as compared to previous year.

The Company exports were lower by 8.23% i.e. (Rs. 388.01 Lacs). This was on account of lower sales to one of our large customers , as well as depressed market for all textile products due to poor retail sales globally. Companys GrossMargins (Sales minus RM Cost on products improved substantially from 46.54% to 53.80% ensuring net saving of Rs. 503.71 Lacs.

The Company has incurred expenses (Other than RM Cost) of Rs. 3632.59 Lacs in current year as compared to previous year of Rs. 3350.04 Lacs. There is a slight increase in expenses of Rs. 282.54 Lacs on account of increase in cost of Raw Material and growing competition in market. The rise in cost was partly also due to different Product Mix.

Also Employee cost increased by Rs 173.20 Lacs as compared to previous year, which was on account of new recruitment in the Marketing division , which would strongly focus on new Markets , and building business with big brands Internationally and in India .Also Vietnam Plant was run at Higher Capacity as compared to previous year resulting in Higher Employee cost incurred at Vietnam.

There has been increase in finance cost of Rs. 49.81 Lacs due to higher working Capital and Exchange Loss. Further there was a slight decline in Depreciation by Rs. 2.06 Lacs during the FINANCIAL year.

The Companys manufacturing expenses were higher by Rs. 61.59 Lacs due to revision in Contract / Piece rate & high electricity rates / cost. This was also partly due to higher production rates.

2. SHARE CAPITAL

The issued, subscribed and paid up share capital of the Company as on 31st March, 2019 was at Rs. 330.48 lakh divided into 33,04,800 Equity Shares of Rs. 10 each. During the year under review, the Company has not issued any shares with differential voting rights, employee stock options and sweat equity shares.

3. DIVIDEND your Directors are pleased to recommend to the Members, for their approval, a dividend of 2/- per Equity Share of Rs. 10/- each in the Company for the year ended 31st March,

2019. The TOTAL outflow on account of payment of Dividend is Rs. 66.10 Lacs and Tax on Dividend shall be Rs. 13.58 Lacs.

4. RESERVES

The Company proposes to transfer Rs. 1.59 Lacs to the general reserve out of the amount available for appropriation

5. CHANGE IN NATURE OF BUSINESS

The Company is engaged in the business of manufacturing Woven & Knitted Elastic Tapes. There was no change in nature of business activity during the year.

6. MATERIAL CHANGES AND COMMITMENTS

The Directors further states that there are no material changes have taken place affecting the FINANCIAL position of the Company from the date of closure of FINANCIAL year till the signing of Accounts.

7. DEPOSITS

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of BALANCE sheet.

8. LOANS, GUARANTEE & INVESTMENTS

Details of Loans, Guarantee and Investment covered under the provision of Section 186 of the Companies Act, 2013 are given in the notes to the FINANCIAL Statements.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board in conjunction with its committees ensures transparency, responsibility and accountability with an aim to create long-term sustainable growth. All Directors are astute professionals coming from varied backgrounds possessing rich experience and expertise. The Board of Directors (the Board) holds a fiduciary position to promote the success of the Company for the benefit of its members. They are entrusted to direct, monitor and guide the Management towards building of such goals and objectives that guarantees effectiveness and enhancement of shareholder value and fulfils their aspirations.

COMPOSITION OF THE BOARD AS ON 31ST MARCH, 2019.

Sr. No. Name of the Director Category
1 Ashok B. Harjani Chairman & Managing Director
2 Nisha P. Harjani CFO & Director
3 Lokesh P. Harjani Executive Director
4 Sonia A. Harjani Director
5 Sonu A. Chowdhary Non-Executive - Independent Director
6 Rajesh M. Mahtani Non-Executive - Independent Director
7 Prem I. Gidwani Non-Executive - Independent Director

* Mr. Devendra Shah vacated the office of Director w.e.f. 18th March, 2019.

CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL

During the year 2018-19 under review, there was a change in the composition of the Board of Directors and other Key Managerial Personnel.

The Companies Act, 2013 read with relevant Rules made there under, facilitates the participation of Director in Board / Committee meetings through video conferencing or other audio visual mode. Accordingly, the option to participate in the meeting was made available for the Directors except in respect of such meetings and/or items which are not permitted to be transacted through video conferencing.

Board Meetings held and attendance of Directors during the year 2018-19.

Sr. No. Date of Board Meeting TOTAL No. of Directors TOTAL No. of Directors Present
1 29th May, 2018 8 7
2 14th August, 2018 8 5
3 13th November, 2018 8 8
4 12th February, 2019 8 7

None of the Directors on the Board is a member in more than 10 Committees and Chairman in more than 5 committees, as specified in Regulation 26(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [the "SEBI (LODR) Regulations, 2015"], across all Companies in which he/she is a Director. The necessary disclosures regarding Committee positions have been made by the Directors.

RETIREMENT BY ROTATION

In accordance with the provision of Companies Act, 2013 and the Articles of Association of the Company, Mr. Lokesh Harjani retires by rotation and is eligible for the reappointment. Necessary information for Directors liable to retire by rotation has been included in the notice convening the ensuing Annual General Meeting and requisite details have been provided in the explanatory statement of the notice. your directors recommend the said appointment.

Resignation of Director

During the year under review, Mr. Devendra Shah having (DIN 01254611) had been disqualified as the director of the company as per section 164(2) read with section 167 of the Companies Act, 2013 due to non-filing of FINANCIAL results and annual returns of the company for the consecutive period of 3 years. Due to which DIN number of the director was deactivated and company was unable to file its FINANCIAL results and annual returns.

In view of the same Mr. Devendra Shah vacated the office of Director w.e.f. 18th March, 2019.

The Board places on record its heartiest gratitude and appreciation for the valuable advices and continuous guidance received from Mr. Devendra Shah and the advices on strategic issues and feel that their prolonged stewardship to the Board shall go a long way for the overall growth of the Company.

Appointment of Director

The Board of Directors at its Meeting held on 28th May, 2019, appointed Mr. Lalit Daulat Advani (DIN-00308138) as Additional Director with the status of Non-Executive Independent Director with effect from 28th May, 2019, subject to approval of the Members at the ensuing Annual General Meeting pursuant to Sec. 150 (2) and other applicable provisions of the Companies Act, 2013. Mr. Lalit D. Advani is not related to any Directors. Further Mr. Rajesh Mathani (DIN 007360941) and Mr. Prem Gidwani (DIN 01220570) were appointed as an Independent Director of the Company for a period of five years up to 31st March, 2019. The Nomination and Remuneration Committee and the Board at their meetings held on 28th May 2019 have recommended the re-appointment of Mr. Rajesh Mathani (DIN 007360941) and Mr. Prem Gidwani (DIN 01220570), as Independent Directors of the Company for a second consecutive term from 1st April 2019 till 31st March 2024 at the forth coming Annual General Meeting of the Company Further Mr. Lalit Daulat Advani (DIN-00308138), Mr. Mr. Rajesh Mathani (DIN 007360941) and Mr. Prem Gidwani

(DIN 01220570) are not disqualified to act as Director under the provisions of Companies Act, 2013 and rules made thereunder. Their appointment is subject to approval by Members in forthcoming Annual General Meeting.

The term of Mr. Lokesh Prem Harjani (DIN 01496181), Executive Director and Mr. Ashok B. Harjani (DIN 00725890), Managing Director of the Company had expired on 31st March, 2019, the Nomination and Remuneration Committee and the Board at their meetings held on 28th May 2019 have recommended the re-appointment of Mr. Lokesh Prem Harjani (DIN 01496181), as Executive Director and Mr. Ashok B. Harjani (DIN 00725890), as Managing Director of the Company for a further period of 5 years w.e.f 01st April, 2019 at the forth coming Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL

The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013: a) Mr. Ashok B. Harjani –Managing Director b) Mrs. Nisha P. Harjani – Director - Chief FINANCIAL Officer c) *Ms. Pooja Shekhawat – Company Secretary Since Resigned with effect from 30th April, 2019.

Remuneration and other details of the Key Managerial Personnel for the FINANCIAL year ended 31st March, 2019 are mentioned in the Extracts of the Annual Return in Form MGT-9 which is enclosed as Annexure – 3 and forms part of this Report.

INDEPENDENT DIRECTOR your Company appointed Independent Directors who are renowned people having expertise / experience in their respective field/profession. In compliance with Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations, all Independent Directors have given a declaration that they meet the criteria of independence as provided under law. None of the Independent Directors are promoters or related to Promoters. The Non-executive Independent Directors have no pecuniary relationship or transactions with the Company in their personal capacity except for sitting fees drawn by them for attending the meeting of the Board and Committee(s) thereof and further do not hold two percent or more of the TOTAL voting power of the Company.

During the year, meeting of Independent Directors was held on 12th February, 2019 to review the performance of the Board as a whole on parameters of effectiveness and to assess the quality, quantity and timeliness ofFLOW of information between the management and the Board. The Independent Directors discussed, among other matters, the performance of the Company and risk faced by it, theFLOW of information to the Board, competition, strategy, leadership strengths and weaknesses, governance, compliance, Board movements, human resources matters and performance of executive directors including Chairman. The Declarations required under Section 149(7) of the Companies Act, 2013 from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013, was duly received by the Company.

10. AUDIT COMMITTEE

The Audit Committee which acts as a link between the management, external and internal auditors and the Board of Directors of the Company is responsible for overseeing the Companys FINANCIAL reporting process by providing direction to audit function and monitoring the scope and quality of internal and statutory audits.

The composition of the Committee is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 SEBI (LODR) Regulations, 2015. The Chairperson of the Committee is a Non-Executive Independent Director.

COMPOSITION OF AUDIT COMMITTEE OF THE COMPANY:

Sr. No. Name of the Director Category Designation
1. *Devendra Shah Non-Executive - Independent Director Chairman
2. Ashok B. Harjani Chairman & Managing Director Member
3. Rajesh M. Mahtani Non-Executive - Independent Director Member
4. **Prem I. Gidwani Non-Executive - Independent Director Chairman
5. ***Nisha P. Harjani Executive Director Member

*has resigned w.e.f. 18th March, 2019.

** was appointed as the Chairman of the Committee w.e.f. 28th May, 2019

*** was appointed as the Committee Member w.e.f. 28th may, 2019

The Audit Committee also meets the Companys Statutory Auditors to ascertain their views on the FINANCIAL statement.

The Committee members meet regularly and make their recommendations in accordance with the terms of reference specified by the Board. Such recommendations are thoroughly discussed in Board meetings and by and large accepted for implementation.

AUDIT COMMITTEE MEETINGS HELD AND ATTENDANCE OF DIRECTORS DURING THE YEAR 2018-19

Sr. No. Date of Board Meeting TOTAL No. of Directors TOTAL No. of Directors Present
1 29th May, 2018 4 3
2 14th August, 2018 4 4
3 13th November, 2018 4 4
4 12th February, 2019 4 4

The Audit Committee acts in accordance with the broad terms of reference specified by the Board of Directors in adherence to Section 177 of the Companies Act, 2013 (the ‘Act). The scope of activities of the Audit Committee includes the areas laid out in Section 177 of the Act and Part C of Schedule II of SEBI (LODR) Regulations, 2015.

11. STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition of the Committee is in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 20 SEBI (LODR) Regulations, 2015. The Chairman of the Committee is a Non-Executive Independent Director.

COMPOSITION OF STAKEHOLDERS RELATIONSHIP COMMITTEE OF THE COMPANY:

Sr. No. Name of the Director Category Designation
1. Rajesh M. Mahtani Non-Executive - Independent Director Chairman
2. Ashok B. Harjani Chairman & Managing Director Member
3. *Devendra Shah Non-Executive - Independent Director Member
4. **Sonu A. Chowdhary Non-Executive - Independent Director Member

* has resigned w.e.f. 18th March, 2019

** was appointed as the Committee Member w.e.f. 28th May, 2019 Ms. Snehal Tondwalkar, had been appointed as the Company Secretary & Compliance Officer for complying with the requirements of the Listing Regulations and requirements of securities laws, including SEBI (Prohibition of Insider Trading) Regulations, 2015 in place of Ms. Pooja Shekhawat. The role of Stakeholders Relationship Committee includes as specified in Part D of the Schedule

II of the SEBI (LODR) Regulations, 2015.

STAKEHOLDERS RELATIONSHIP COMMITTEE MEETINGS HELD AND ATTENDANCE OF DIRECTORS DURING THE YEAR 2017-18

Sr. No. Date of Board Meeting TOTAL No. of Directors TOTAL No. of Directors Present
1 29th May, 2018 3 3
2 14th August, 2018 3 3
3 13th November, 2018 3 3
4 12th February, 2019 3 3

M/s. Big Shares Services Pvt. Ltd. is the Registrar and Share Transfer Agent of the Company. The delegated authority is taking measures so that the share transfer formalities are attended to atleast once in a fortnight. The Company Secretary is also authorized by the Board to do all the acts, deeds and matters and sign all the documents that may be required in the matter relating to shares from time to time. No complaint was remained unattended and pending to be resolved as on March 31, 2019.

STATUS OF INVESTOR COMPLAINTS /OTHER CORRESPONDENCE

Subject matter of Correspondence Pending as on 31st March, 2018 Received & resolved during the year Pending as on 31st March, 2019
Non-receipt of Share - 2 -
Non-receipt of Dividend - - -
Non-receipt of Annual Report - - -
Query -Transfer of shares - - -

12. NOMINATION AND REMUNERATION COMMITTEE

The composition of the Committee is in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the of the SEBI (LODR) Regulations, 2015. The Chairperson of the Committee is a Non-Executive Independent Director.

COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE OF THE COMPANY:

Sr. No. Name of the Director Category Designation
1. *Devendra Shah Non-Executive - Independent Director Chairman
2. **Ashok B. Harjani Chairman & Managing Director Member
3. Rajesh M. Mahtani Non-Executive - Independent Director Member
4. Prem I. Gidwani Non-Executive - Independent Director Chairman
5. Sonu A.Chowdhary Non-Executive - Independent Director Member

* has resigned w.e.f. 18th March, 2019

** has ceased to be a member of the committee w.e.f. 13th November, 2018 The role of NRC includes the areas laid out in Section 178 of the Act and Part D of Schedule II of the SEBI (LODR) Regulations, 2015. The Board of Directors on recommendation of the NRC has adopted a policy for evaluation of the Board, its Committees. The details of remuneration paid to all Directors are provided under the head "Disclosures" in this Report. Nomination & Remuneration Policy has been framed, adopted and implemented by the Nomination and Remuneration Committee, with broad objectives, for determining and recommending the remuneration of the Directors, KMP and Senior Management to the Board. The NRC meeting held on 13th November, 2018 during the year 2018-19.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and read with Rule 5(1) and (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2017 are forming part of this Annual Report.

13. AUDITORS

STATUTORY AUDITORS

M/s. Sanjay Raja jain & Co, Chartered Accountants, Mumbai (ICAI Firm Registration No. 112364W) were appointed as Statutory Auditors of the Company pursuant to the provisions of Section 139(8) and other applicable provisions, if any, of the Companies Act, 2013 as amended from time to time or any other law for the time being in force (including any statutory modification or amendment thereto or re-enactment thereof for the time being in force), till the conclusion of the 39th Annual General Meeting of the Company to be held in the year 2023, at such remuneration plus applicable Tax, out of Pocket Expenses in connection with the audit as the Board of Directors of the Company may fix in this behalf in consultation with the Auditors. And as per the Companies (Amendment) Act, 2017, enforced on May 7, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified by the Members at every Annual General Meeting.

SECRETARIAL AUDITORS

During the year, Secretarial Audit was carried out by M/s. Sanjay Dholakia & Associates (Membership No. F2655), a firm of Company Secretaries in Practice, the Secretarial Auditor of the Company for the FINANCIAL year 2018-19, Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The observations of the Secretarial Auditor are self-explanatory. The detailed report on the Secretarial Audit is attached as forming part of this Annual Report.

14. COMPLIANCES UNDER COMPANIES ACT, 2013 SHARE CAPITAL

The Issued, subscribed and Paid-up Equity Share Capital of Company has remained unchanged during the year. During the year under review the Company has not issued any securities, convertible Warrants/Bonds and/or other debt securities, which has likely impact on the Equity of the Company.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Form MGT - 9 is forming part of the Annual Report.

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

Details Loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to FINANCIAL statements.

INSURANCE your Company has taken appropriate insurance for all assets against foreseeable perils.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors Report for the year ended 31st March, 2018 is given in a separate Annexure to this Report.

The above Annexure is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these PARTICULARS may write to the Company Secretary at the Registered Office of the Company.

The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company before the 24th Annual General Meeting and upto the date of the ensuing Annual General Meeting during the business hours on working days.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

15. RELATED PARTY TRANSACTIONS

The Company has formulated a policy on dealing with Related Party Transaction. The policy is placed on the website of the Company. All the transactions entered into with Related Parties as defined under the Companies Act 2013, Regulation 2(1)(zc) and Regulation 23 of SEBI (LODR) Regulations, 2015 during the FINANCIAL year were in the ordinary course of business and on an arms length basis and do no attract the provisions of Section 188 of the Companies Act, 2013. During the year, the Company has not entered into any contract / arrangement / transactions with related parties which can be considered material in nature. The Related Party Transactions are disclosed in the notes of FINANCIAL statements for the FINANCIAL year 2018-19 and the same is furnished in Form AOC-2 and is forming part of Annual Report.

16. DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Act:

i. that in the preparation of the Annual Accounts for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. the directors had 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 as at March 31, 2019 and of the profit of the Company for the year ended on that date;

iii. at the Directors have taken proper and sufficient care 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. the annual accounts have been prepared on a going concern basis;

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

Based on the framework of Internal FINANCIAL controls and compliance systems established and maintained by the company, work performed by the internal, statutory and secretarial auditors and external consultants including audit of internal FINANCIAL controls over FINANCIAL reporting by statutory auditors, and the reviews performed by management and the relevant board committees, including the Audit committee, the board is of the opinion that companys internal FINANCIAL controls were adequate and effective during the Fy 2018-19.

17. RISK MANAGEMENT POLICY AND FRAMEWORK

The Companys risk management policy and framework is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with industry best practices. The Board of Directors has oversight on all the risks assumed by the Company. The Board reviews the level and direction of major risks pertaining to market, liquidity, operational, compliance, and capital at risk as part of risk profile overview.

The Audit Committee of the Board provides direction to and monitors the quality of the internal audit function and also monitors compliance with inspection and audit reports of statutory and internal auditors of the Company.

18. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance and that its statutory committee and that of the individual directors. Independent Directors at their meeting without the participation of the Non-independent Directors and Management considered / evaluated the Boards performance, Performance of the Chairman and other Non-independent Directors. The Board has undergone a formal review which comprised Board effectiveness and review of materials.

The Board of Directors expressed their satisfaction with the evaluation process.

COMPANYS CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In accordance with the requirements of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has also in place a comprehensive code of conduct for prevention of insider trading.

19. CORPORATE GOVERNANCE

The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and as stipulated under Regulations 17 to 27 of the SEBI Listing Regulations) read with schedule II thereof. A separate report on Corporate Governance forms part of this Report along with the Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance.

20. CORPORATE SOCIAL RESPONSIBILITY

The Company has a Policy on Corporate Social responsibility (CSR) duly approved by the Board and the same has been hosted on Companys website at www. premcoglobal.com. The CSR budget for the FINANCIAL year 2018-2019 was prepared in accordance with the provisions of Section 135 (5) of the Companies Act, 2013 read with the Companys CSR Policy. The amount so budgeted was fully spent on or before 31st March, 2019, the detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2 which forms part of this Report. (Annexure 4)

21. ANNUAL RETURN & EXTRACTS OF ANNUAL RETURN

In compliance with Section 134 (3)(a) of the Companies Act, 2013, the Annual Return of the Company shall be made available on the website of the Company at www. premcoglobal.com . Extract of Annual Return enclosed as Annexure 3.

22. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) read with Regulation 22 of the SEBI Listing Regulations, your Company has duly established Vigil Mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of companys code of conducts or ethics policy. Audit Committee of the Board monitors and oversee the vigil mechanism.

The detailed policy related to this vigil mechanism is available in the Companys website at www.premcoglobal. com.

23. RISK MANAGEMENT POLICY

The Companys business faces various risks - strategic as well as operational in respect of all its Divisions. The Company has an adequate risk management system, which takes care of identification, assessment and review of risks as well as their mitigation plans put in place by the respective risk owners. The risks which were being addressed by the Company during the year under review included risks relating to market conditions, environmental, information technology etc. The Company has developed and implemented the Risk Management Policy with an objective to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that growth and earnings targets as well as strategic objectives are met. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms the part of this report.

The Audit Committee of the Board reviews the risk assessment and minimization procedure in the light of the Risk Management Policy of the Company.

In the opinion of the Board, there is no such element of risk which may threaten the present existence of the Company.

24. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has been employing women employees in various cadres. There were no instances taken place in the Company during the year which are required to be reported under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

25. Quality Policy your Company strive for ‘excellence by providing customized solutions, products & services that best satisfies the requirements of our Customers and continuously improve quality, reliability & service with the help of an effective Quality Management System, encompassing all statutory, regulatory, health, safety & environment requirements at our work place.

26. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

Independent Directors are familiarized with their roles, rights and responsibilities in the Company as well as with the nature of industry and business model of the Company through induction programmers at the time of their appointment as Directors and through presentations on economy & industry overview, key regulatory developments, strategy and performance which are made to the Directors from time to time.

27. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES:

The Company does not have joint Ventures/Associate Companies. The Company has incorporated foreign subsidiary in Vietnam viz. Premco Global Vietnam Company Limited in which it holds 85%.

28. HUMAN RESOURCE

Company treats its "human resources" as one of the most important assets. The Management of the Company lays continuous focus on human resources, who are trained and updated on various issues from time to time to attain the required standards. The correct recruitment practices are in place to attract the best technical manpower to ensure that the Company maintains its competitive position with respect to execution. your Company continuously invests in attraction, retention and development of talent on an ongoing basis.

29. INTERNAL CONTROL AND ITS ADEQUACY

The Company has adequate internal controls and processes in place with respect to its FINANCIAL statements which provide reasonable assurance regarding the reliability of FINANCIAL reporting and the preparation of FINANCIAL statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically. The Company has a mechanism of testing the controls at regular intervals for their operating effectiveness to ascertain the reliability and authenticity of FINANCIAL information.

30. Transfer of Unclaimed Dividend and Shares to Investor Education and Protection Fund (IEPF)

In compliance with the provisions of Section 124 (5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, a sum of Rs. 1,87,215 being the dividend lying unclaimed out of the dividend declared by the Company for the FINANCIAL year 2010-2011 were transferred to IEPF. The details of the said unclaimed dividend transferred is available at the website of the Company at https://www. premcoglobal.com/investors Similarly, During the period under review 22,490 Equity Shares pertaining to FINANCIAL year 2009-2010 have been transferred to IEPF dated 19.07.2019 Authorities vide Corporate Action in compliance with the provisions of Section 124 of the Companies Act, 2013 and Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 after sending letters to those Shareholders and also making an advertisement in the newspapers in this regard. Details of these shares transferred to IEPF are available on the website of the Company at https://www.premcoglobal.com/ investors

31. SIGNIFICANT AND MATERIAL ORDERS:

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

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:-

The information as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings is given below:

A. Conservation of energy:

I. The steps taken or impact on conservation of energy

The Company has replaced the 36w/40w tube lights with 16w LED tube lights which consumes 50% less energy.

II. The steps taken by the company for utilising alternate sources of energy

The Companys present outlay does not recommend for alternate source of energy. The Company intends to replacing high capacity motors in covering dept. with energy efficient new motors which should give a huge saving.

III. The capital investment on energy conservation equipments

As explained in point No.(ii) above the Company do not propose any major capital investment on energy conservation equipments because the existing arrangement are sufficient to cater the company need and are cost effective.

B. Technology absorption:

I. The efforts made towards technology absorption.

The Company has replaced some of the machines with high speed / upgraded version. The Company is also working on its super soft yarn technology which will help the Company to improve the quality of products.

II. The benefits derived like product improvement, cost reduction, product development or import substitution

The improved efficiency in production has resulted in substantial cost reduction due to lower wastages. The Company is endeavor to deliver best quality products at a lower cost.

III. The details of technology imported

Last year, the company had imported higher hook j/Q machines to weave wider j/Q designs. The Company is also foraying into innovative and niche products with printing and value added finishes.

C. Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgoes during the year are:

(Rs. In Lacs)

PARTICULARS 2018-19 2017-18
Foreign Exchange Earning 2354.62 3068.55
Foreign Exchange Outgo
-Raw Materials & Spares 1.18 22.26
-Capital Goods 52.13 16.38
-Travelling 76.05 62.57
-Expenses for Export 7.96 22.65
-Insurance Charges 0.53 0.96
-Professional Fees 9.22 -

33. MANAGERIAL REMUNERATION

A) Details of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014

Name of the Director Designation Ratio of remuneration to median remuneration to all employees
Ashok B. Harjani Chairman & Managing Director 25.46
Lokesh P. Harjani Executive Director 17.84
Nisha P. Harjani CFO & Director 11.46
Sonia A. Harjani Director 1.03

B) The percentage increase in remuneration of each

Director, Chief FINANCIAL Officer, Chief Executive Officer, Company Secretary.

PARTICULARS % increase in remuneration
Ashok B. Harjani, Managing -
Director
Lokesh P. Harjani, Executive -
Director
Nisha P. Harjani, CFO & Director -
Sonia A. Harjani, Director -
Shantanu Dey Ex-CEO -
R.C. Panwar, CEO -
Snehal Tondwalkar, Company -
Secretary

-Independent Directors are given only sitting fees which is same as last year.

C) Percentage increase in the median remuneration of employees in FINANCIAL year 6%.

D) The number of permanent employees as on 31st March, 2019 was 170.

E) Explanation on relationship between average increase in remuneration and Company performance:

- The increase in remuneration is in line with market trends and also with Companys Performance

- Comparison of remuneration of key managerial personnel against performance of the company

(Rs. In Lacs)
Aggregate Remuneration of Key Managerial Personnel (KMP) 163.92
Revenue 5323.39
Remuneration of KMPs (as % of revenue) 3.02 %
Profit Before Tax Remuneration of KMP( as % of PBT) (19.75)

F) Variation in Market Capitalization of the Company

Price Earnings ratio of current FINANCIAL year and previous FINANCIAL year:

(Rs. In Lacs)
PARTICULARS March 31, 2019 March 31, 2018 % change
Market Capitalization 4659.76 10586.92 (-) 55.98 %
Price Earnings Ratio 48.96 20.89 (-) 134.37%

G) Company has not made any public offer in the recent previous and accordingly the comparison of public offer price and current market price would not be relevant.

H) Average percentile increase already made in the salaries of employees other than the managerial personnel in last FINANCIAL year and its comparison with the percentile increase in managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial.

I) It can be seen that increase in managerial remuneration is quite minimal as compared to last year, whereas the employees remuneration has been increased as per market trends. There have been no exceptional circumstances for increase in managerial remuneration.

j) Comparison of each remuneration of the key managerial personnel against the performance of the Company:

(Rs. In Lacs)
Ashok B. Harjani Lokesh P. Harjani Nisha P. Harjani Shantanu Dey Ramesh Chandra Panwar Pooja Shekhawat
Managing Director Executive Director Chief Financial officer Chief Executive Officer (upto june, 2018) Chief Executive Officer (from March, 2019) Company Secretary (from feb18)
Remuneration in Fy 19 69.60 47.98 31.00 9.08 0.59 2.91
Revenue 53 23.39
Remuneration as % of revenue 1.31 0.90 0.58 0.17 0.01 0.05
Profit Before Tax (PBT) (19.75)
Remuneration as % of PBT - - - - - -

K) The key parameters for the variable component of remuneration availed by the Directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive in excess of the highest paid director during the year: None

L) Affirmation that the remuneration is as per the remuneration policy of the Company.

M) No employees remuneration throughout the year 2018-2019 exceeded remuneration aggregating Rs. 60 Lacs or more per annum.

N) No employees remuneration for the year 2018-2019 exceeded the remuneration of any Directors.

O) No employee employed for a part of the year is in receipt of remuneration aggregating Rs. 5 Lacs or more per month.

P) No employees remuneration was in excess of the remuneration drawn by the managing director or whole-time director or manager and does not holds by himself or along with his spouse and dependent children, any equity shares more than 2% of the of the company.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In terms of the provisions of Regulation 34 of the Listing regulations, the Managements discussion and analysis is set out in this Annual Report as Annexure.

35. ACKNOWLEDGEMENT: your Directors wish to place on record their appreciation for the co-operation extended by all the employees, Bankers, FINANCIAL Institutions, various State and Central Government authorities and stakeholders.

For Premco Global Limited

Ashok B. Harjani

Chairman & Managing Director

DIN-00725890

Place: Mumbai

Date: 28th May 2019

ANNEXURE 1 Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the FINANCIAL statement ofventures subsidiaries/associate companies/joint

Part "A": Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in Rs. in Lacs)

Sl. No. PARTICULARS Details
1. Name of the subsidiary Premco Global Vietnam Company Limited
2. Reporting period for the subsidiary concerned, if different from the holding companys reporting period January 1, 2018 to December 31, 2018
3. Reporting currency and Exchange rate as on the last date of the relevant VND
Financial year in the case of foreign subsidiaries 1RS.=331.20 VND
4. Share capital 540.23
5. Reserves & surplus 240.67
6. Minority Interest 132.94
7. TOTAL assets 3172.97
8. TOTAL Liabilities 3172.97
9. Investments -
10. Turnover 3657.35
11. Profit before taxation 325.44
12. Provision for taxation -
13. Profit after taxation 325.44
14. Proposed Dividend -
15. % of shareholding 85%
16. Country Vietnam

Note: Indian rupee equivalent to the given foreign currencies in the account of subsidiary company is based on exchange rate as on March 31, 2019.

For Premco Global Limited

Ashok B. Harjani

Chairman & Managing Director 00725890

Date: 28th May, 2019

Place: Mumbai

ANNEXURE 2

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. Details of contracts or arrangements or transactions not at arms length basis: Premco Global Limited (the Company) has not entered into any contract/arrangement/transaction with its related parties which are not in ordinary course of business during Fy 2018-19.

2. Details of material contracts or arrangement or transactions at arms length basis: (in Lacs)

Name(s) of the related party Premco Industries Ashok B. Harjani Lokesh P. Harjani Nisha P. Harjani Sonia A. Harjani
Nature of relationship Associate Company Managing Director Whole time Director Director Director
Nature of contracts / arrangements / transactions 1.Rent paid 1. Tour Advance 1. Tour Advance 1. Tour Advance 1. Loan Taken
2.Reimbursement of Expenses 2.Reimbursement of Expenses 2.Reimbursement of Expenses 2.Interest paid
3.Advance Given 3. Loan Taken 3.Advance Given
4. Loan Taken 4.Interest paid 4.Interest paid
5.Interest paid 5.Imprest 5.Imprest
Duration of the contracts / arrangements / transactions 12 Months 12 Months 12 Months 12 Months 12 Months
Salient terms of the contracts or arrangements or transactions including the value, if any (in Lacs) VALUE: VALUE: VALUE: VALUE: VALUE:
1) 62.29 1) 34.90 1) 58.58 1) 53.2 1) -
2) - 2) - 2) – 2) -
3) 20.00 3) - 3) 67
4) 315.30 4) - 4) -
5) 18.03 5) 18.3 5) 20.73
Date(s) of approval by the Board, if any 28.05.2019 28.05.2019 28.05.2019 28.05.2019 28.05.2019
Amount paid as advances, if any NA NA NA NA NA