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Gagan Polycot India Ltd.

BSE: 531196 Sector: Others
NSE: N.A. ISIN Code: INE297L01011
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NSE 05:30 | 01 Jan Gagan Polycot India Ltd
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VOLUME 487
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Sell Price 2.24
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OPEN 2.24
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VOLUME 487
52-Week high 3.28
52-Week low 2.00
P/E
Mkt Cap.(Rs cr) 2
Buy Price 2.24
Buy Qty 19.00
Sell Price 2.24
Sell Qty 1.00

Gagan Polycot India Ltd. (GAGANPOLYCOT) - Director Report

Company director report

To

The Members

The Directors of the Company take pleasure in presenting their 31st Annual Reporttogether with the annual audited financial statements for the financial year ended March31 2019.

FINANCIAL RESULTS

The summary of the Company's financial performance for the financial year 2018-19 ascompared to the previous financial year 2017-18 is given below:

(Amt in lacs)
Particulars Year Ended 31/03/2019 Year Ended 31/03/2018
Income 1174.57 19084.25
Less: Expenses 1287.35 18938.35
Less: Depreciation (26.69) (31.07)
Exceptional Items - -
Profit after Depreciation & Interest (139.47) 114.81
Provision for Taxation - 37.95
Provision for Tax (deferred) 0.35 3.25
Profit after Tax (139.11) 73.59
Net profit / (Loss) (139.11) 73.59
Balance carried to Balance Sheet (139.11) 73.59

HIGHLIGHTS

During the year your Company has income of Rs. 1174.57 Lacs including other income ascompared to Rs. 19084.25 Lacs in the previous year. The Net Loss after tax was Rs. 139.11Lacs against the Net Profit of Rs. 73.59Lacs in the previous year.

GENERAL RESERVES

During the year the Company has not proposed to transfer any amount to the GeneralReserve of the Company.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

This MD & A provides analysis of the operating performance of the Company's twobusiness segments as well as a discussion of cash flows the impact of risks and outlookfor the business Additional information about the Company.

This discussion and analysis is the responsibility of management. The Board ofDirectors carries out its responsibilities for review of this disclosure principallythrough its Audit Committee comprised exclusively of independent Directors. The AuditCommittee has reviewed and approved this disclosure and it has also been approved by theBoard of Directors.

The management of the Company is presenting herein the overview opportunities andthreats initiatives by the Company and overall strategy of the Company and its outlookfor the future. This outlook is based on management's own assessment and it may vary dueto future economic and other future developments in the country.

SEGMENT-WISE PERFORMANCE

The Company operates in two reportable segments i.e. Textile Business and manufacturingbusiness. The Business Segments has been identified as separate segment in accordance withAccounting Standard 17 ‘Segment Reporting'.

RISK MANAGEMENT

The textile business like other businesses is susceptible to various risks. Theprimary risk factor is raw material prices which is the largest component of cost. Sincecotton is an agriculture produce it suffers from climatic volatility in the major cottonproducing countries. This in turn creates uncertainties for textile manufacturers.

Another important issue is the availability quality and price of power. Theavailability of good quality power at reasonable prices is critical for sustainability ofthe industry. However the cost of power has been continuously increasing adding to inputcost pressure in the industry. The non–availability of skilled manpower along withhigh labour cost prevailing in the country is growing concern area for textile industry.

We are making all efforts to cope up with the challenges through continuous costreduction process improvements diversification of products rationalization of coststraining the workforce on the continued basis improving efficiencies and creating astrong customer-oriented approach.

OPPORTUNITIES IN TEXTILE INDUSTRY

Company Prospectus: The Company deals in Indian Market. The purchasing power ofthe masses is increasing every year in our country. The Company hopes to increase itsprofit as higher sales are being achieved. Company is also trying to enter into jointventures with a view to diversify the production respect to the requirement of buyers.

The Manufacturing Unit is situated at Waliv Vasai Maharashtra focusing on theIndustrial & Automotive Packaging & Stationary Cosmetics Safety and customizedproducts. The Company has installed the state of the art machines to produce an aptproduct to its clients Domestic & Exports.

The Company has made the set-up of production of Plastic Molded products in thesurgical division. The Company is planning to implement it own brand in the Household andPharmaceutical Industry to suffice the never-ending demands simultaneously reduce theefforts on the trading Textile activity.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

We maintain adequate internal control systems commensurate with the nature of businesssize and complexity of its operations. We have well-established processes guidelines andprocedures to augment the internal controls. This coupled with adequate internalinformation systems ensures proper information flow for the decision-making process. Theinternal control system is designed to ensure maintenance of proper accounting controlsmonitoring of operations protection and conservation of assets and compliances withapplicable laws and regulations. These controls ensure that financial and other recordsare reliable for preparing financial statements and other information.

We also address any issues identified by regulatory inspection teams very diligentlyand report the same to the Board of Directors and the regulators.

HUMAN RESOURCES

During the year under review HR continued to undertake initiatives towardsdevelopment enhancement and retention of workforce. Your Company strongly believes thatemployees are central to the Company's transformation agenda and that it is important tobuild capabilities of employees to handle both current and future needs. During the yearthe Company worked extensively on identifying the needs of employees across all categoriesand level. The Company has built a young and vibrant team of qualified and competentprofessionals to meet the emerging business challenges and market competition.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company'sobjective projections and estimates are forward looking statements and progressivewithin the meaning of applicable security laws and regulations. Actual results may varyfrom those expressed or implied depending upon economic conditions Government Policesand other incidental/related factors.

REPORTING OF FRAUD

The Auditors have not reported any fraud as specified under Section 143(12) of theCompanies Act 2013 other than those which are reportable to the Central Government.

DIVIDEND

In order to conserve the resources your Directors are unable to declare any dividends.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The Provisions of Sec.125 (2) of the Companies Act 2013 do not apply as there was nodividend declared and paid last year.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

During the year under review there is no such change in the Company.

Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future

• There are no significant and material orders passed by the Regulators or courtsor tribunals impacting the going concern status and Company's operations in future.

• During the year Company hadmade certain addition in the main object clause byadding degradable bags biodegradable bags compostable bags zero-waste packagingmaterial etc in its main object.

• During the year under review there were no cases filed under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

DETAILS OF HOLDING / SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

The Company does not have any Holding/Subsidiary/Joint Ventures/ Associate as on March31 2019.HowevweCompany is Associate Company of Lien Trading Private Limited as on March31 2019.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Section 149 of the Companies Act 2013 the Board recommended theappointment of Mrs. Tejal Shah whose term expires on 30th September 2019 for a periodof 5 Years as an Independent Directors of the Company not liable to retire by rotationfrom the date of its 31stAnnual General Meeting subject to approval of the Members of theCompany. The Directors have given the declaration to the Board that they met the criteriaof independence as provided under Section 149(6) of the said Act and also confirmed thatthey will abide by the provisions as mentioned in Schedule IV of the Companies Act 2013.

The Board had recommended the re- appointment of Mr. Ketu Parikh Managing Director& Mr. Prajwal Patel Whole Time Director for another period of 3 years. The Boardrecommends the resolutions for approval of the above appointments.

Pursuant to the provisions of Section 203 of the Act the Key managerial personnel ofthe Company are- Mr. Ketu Parikh Chairman cum Managing Director&Chief FinancialOfficer Mr. Prajwal Patel- Whole-time Director and Ms. Pooja Gohel Company Secretary& Compliance officer of the Company.

AUDITORS

Statutory Auditors:

M/s. SSRV & Associates Chartered Accountants Mumbai have resigned as a StatutoryAuditor of the Company w.e.f 21st August 2019. As per the provisions of Companies Act2013 read with rules made thereunder a causal vacancy caused due to resignation ofStatutory Auditor needs to be approved by the members in a general meeting within threemonths. Accordingly the Board of Directors have recommended the appointment of M/s. PMPK& Company Chartered Accountants Mumbai to the members of the Company for theirapproval at the Annual General Meeting by way of passing an ordinary resolution to holdoffice from the conclusion of the ensuing Annual General Meeting till the conclusion ofthe Thirty Sixth Annual General Meeting .

M/s. PMPK & Company Chartered Accountants Mumbai have conveyed their consent tobe appointed as the Statutory Auditors of the Company along with the confirmation thattheir appointment if approved by the shareholders would be within the limits prescribedunder the Act.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed Mr. Brajesh Gupta Practicing Company Secretary Indore (Mem No.-33070 &COP No.21306) to undertake the Secretarial Audit of the Company for the financial year2018-2019. The Company has provided all the assistance and facilities to the SecretarialAuditor for conducting their audit. Report of Secretarial Auditor for the FY 2018-2019 inForm MR-3 is annexed to this report as Annexure I.

EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS MADE BYAUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

The Statutory Auditors' Report to the members on the Accounts of the Company forthe financial year ended 31st March 2019 containsbelow qualifications reservations oradverse remarks:

1. As per Section 138 of the Companies Act 2013 read with Rule 13 of the Companies(Accounts) Rules 2014 Company is required to appoint Internal Auditor however Companyhas not appointed Internal Auditor for the year ended March 2019.

Management Representation on Statutory Auditor's qualification:

• The Company is in process of searching a suitable candidate for the post ofInternal Auditor as required under Section 138 of Companies Act 2013.

The Secretarial Audit Report contain below qualifications reservation oradverse remark from Secretarial Auditor.

1. The Company has not appointed Internal Auditor as per Section 138(1) of CompaniesAct 2013;

2. The Whole Company Secretary of the Company has not signed/certified the AnnualReturn(MGT-7) of the Company for F.Y. 2017-18 as per Section 92 of Companies Act 2013;

3. The Company has not disseminated to the exchange the newspaper publications made bythe Company during the year as required under regulation 47(1) and (3) of SEBI (LODR)Regulation 2015.

Management Representation on Auditor's qualification:

• The Company is in process of searching a suitable candidate for the post ofInternal Auditor as required under Section 138 of Companies Act 2013.

• The Digital Signature Certificate of the Company Secretary was misplaced becauseof which she could not sign the Annual Return for the F.Y. 2017-18.The Management isensuring that due care will be taken to avoid such instances in future.

• The Company has published the result in the newspaper as required underRegulation 47 of the SEBI (LODR) Regulation 2015 within the prescribed time. Aslo theresult were uploaded on exchange within prescribed time. However the dissemination ofnewspaper publications to the exchange is not a mandatory requirement as per the LODRRegulation. Thus the Company has not violated the provision of SEBI (LODR) Regulation2015.

CORPORATE GOVERNANCE CERTIFICATE

The provisions of Regulation 17 to 27 Regulation 46 (2) (b) to (i) and Schedule V ParaC D and E of SEBI LODR Regulations 2015 is not applicable to the Company.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT

The Directors and members of Senior Management have affirmed compliance with the Codeof Conduct for Directors and Senior Management of the Company. The copies of Code ofConduct as applicable to the Executive Directors (including Senior Management of theCompany) and Non-Executive Directors are uploaded on the website of the Company –www.gaganpolycot.com.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Company familiarizes its Directors including independent directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company etc. through on variousprograms

PARTICULARS OF EMPLOYEES AND RELATED IN FORMATION

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting. If any Member is interestedin obtaining a copy thereof such Member may write to the Company Secretary in this regardand the same will be furnished on request.

Particulars of Employees pursuant to section 134(3)(q) of the Companies Act 2013 readwith rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules2014:

a) None of the employees was employed throughout the financial year who was in receiptof remuneration exceeding Rs. 10200000/- per annum or more. Therefore Rule 5(2)(i) ofthe captioned Rules is not applicable.

b) None of the employees was employed throughout the financial year who was in receiptof remuneration exceeding Rs. 850000/- per month. Therefore Rule 5(2)(ii) of thecaptioned Rules is not applicable.

c) No employee is a relative of any Director or Key Managerial personnel of theCompany.

Therefore Rule 5(2)(iii) of the captioned Rules is not applicable to any employee.

DOCUMENTS PLACED ON THE WEBSITE OF THE COMPANY

The following documents have been placed on the website in the compliance with the Act:

• Financial Statements of the Company

• Details of Vigil mechanism for Directors and employees to report genuineconcerns as per proviso to Section 177(10).

• Latest Announcements

• Annual Reports

• Shareholding Pattern

• Code of Conduct

• Corporate Governance

• Nomination and Remuneration Policy

• Policy on Related Party Transactions

• Policy on Material Subsidiary

SHARE CAPITAL

The authorized and paid-up equity share capital of the Company as on 31st March 2019was Rs. 100000000/- divided into 10000000 Equity Shares of Rs. 10/-.

SHARES

a. Buyback of Securities: The Company has not bought back any of the securities duringthe year under review.

b. Sweat Equity: The Company has not issued any sweat equity shares during the yearunder review.

c. Employee Stock Option Plan: The Company has not provided any stock options to theemployees.

DEPOSITS

Your Company has not accepted any deposits from the public falling within the ambit ofSection 73 and 74 of the Companies Act 2013 read together with the Companies (Acceptanceof Deposits) Rules 2014.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3) read with Section 134(5) of the Actwith respect to Directors' Responsibility Statement your Directors hereby confirm that:

a. In the preparation of the annual accounts the applicable accounting standards havebeen followed;

b. appropriate accounting policies have been selected and applied consistently andestimates and judgments made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

c. proper and sufficient care for maintenance of adequate accounting records inaccordance with the provisions of Act have been taken for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities;

d. the annual accounts have been prepared on a going concern basis; and

e. Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

CONSERVATION OF ENERGY TECHNOLOGY FOREIGN EXCHANGE EARNINGS AND OUTGO

In the view of nature of activities which are being carried on by the Company theparticulars as prescribed under Section134 (3) (m) of the Act read with Companies'(Accounts) Rules 2014 regarding Conservation of Energy and Technology Absorption andresearch and development are not applicable to the Company.

EVALUATION OF BOARD OF DIRECTORS

Pursuant to the provisions of the Act and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Nomination and Remuneration Committee of the Boardcarried out the annual evaluation of the performance of the Board as a whole theDirectors individually as well as of various Committees of the Board. The performanceevaluation of the Independent Directors was carried out by the Nomination and RemunerationCommittee and noted in turn by the Board.

BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on the Company's policiesand strategy apart from other Board matters. During the financial year 2018-19 TwelveBoard meetings were held on April 12 2018 May 30 2018 July 6 2018 July 31 2018October 4 2018 October 9 2018 October 15 2018 November 2 2018 January 20 2019February 112019 March 04 2019 and March 29 2019. The gap between the two Boardsmeetings did not exceeds 120 days.

DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS

All Independent Directors have submitted the declaration of Independence as requiredunder Section 149(7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013. Theseconfirmations have been placed before and noted by the Board.

POLICIES ON DIRECTORS' APPOINTMENT AND REMUNERATION

The policies of the Company on Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under sub-section (3) of Section 178 of the Companies Act2013.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company's well-defined organizational structure defined authority matrix andinternal financial controls ensure efficiency of operations protection of resources andcompliance with the applicable laws and regulations. Moreover the Company continuouslyupgrades its systems and undertakes review of policies. The internal financial control issupplemented by extensive internal audits regular reviews by management and standardpolicies and guidelines to ensure reliability of financial and all other records toprepare financial statements and other data. The Audit Committee of the Board reviewsinternal audit reports given along with management comments. The Audit Committee alsomonitors the implemented suggestions.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee comprises of Four members namely Mr. Ketu Parikh Mr. RupamChitalia Mrs. TejalShah & *Mr. Mukesh Bunker.

Note: *Mr. Mukesh Bunker (resigned w.e.f 6th July 2019)

VIGIL MECHANISM / WHISTLEBL OWER POLICY

The Company has established a Vigil Mechanism to provide appropriate avenues to theDirectors and employees to bring to the attention of the Management the concerns aboutbehavior of employees that raise concerns including fraud by using the mechanism providedin the Whistle Blower Policy. The Vigil Mechanism Policy has been uploaded on the websiteof the Company at www.gaganpolycot.com.

During the financial year 2018-19 no cases under this mechanism were reported in theCompany and any of its subsidiaries / Associates.

RISK MANAGEMENT POLICY

The Company has a well-defined risk management frame work in place. The details of therisks faced by the Company and the mitigation thereof are discussed in detail in theManagement Discussion and Analysis report that forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Since the Company does not have the net worth of Rs. 500 Crores or more or turnover ofRs. 1000 Crores or more a net profit of Rs. 5 Crores or more during the financial yearor Section 135 of the Companies Act 2013 relating to Corporate Social Responsibility isnot applicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.

EXTRACT OF ANNUAL RETURN

Pursuant to the requirement under section 92(3) and Section 134(3) of the Act read withRule 12 of Companies (management and administrative) Rules 2014 an extract of Annualreturn in prescribed Form MGT-9 is given in the report as Annexure II.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Companies Act 2013 and Listing Regulations theCompany has formulated a Policy on Related Party Transactions as approved by the Board ofDirectors which is also available on the Company's website and the same is considered forthe purpose of identification and monitoring Related Party transactions.

The particulars of contracts or arrangements entered into by the Company with relatedparties referred to in Section 188(1) of the Companies Act 2013 as prescribed in FormAOC-2 are appended as Annexure III.

BOARD COMMITTEES

Your Company has following Committees of Board viz

1.AuditCommittee

2.Stakeholders'RelationshipCommittee

3.NominationandRemunerationCommittee

Details of all the Committees along with their composition terms of reference andmeetings held during the year are provided on the website of the Company.

POLICIES ON DIRECTORS' APPOINTMENT AND REMUNERATION

The policies of the Company on Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under sub-section (3) of Section 178 of the Act is appended asAnnexure IV to this Report. The web address where the policy is uploaded iswww.gaganpolycot.com.

MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified by the CentralGovernment under Section 148(1) of the Companies Act 2013 and accordingly such accountsare not made and maintained by the Company.

LISTING OF SHARES OF THE COMPANY

The Equity Shares of your Company continue to remain listed on Bombay Stock ExchangeLtd. The Company has paid the listing fees as payable to the BSE Ltd. for the financialyear 2018-2019 on time.

ACKNOWLEDGEMENTS

The Directors express their sincere gratitude to the BSE Limited National StockExchange of India Limited Ministry of Finance Ministry of Corporate Affairs Registrarof Companies National Securities Depository Limited other government and regulatoryauthorities financial institutions and the bankers of the Company for their ongoingsupport.

The Directors also place on record their sincere appreciation for the continued supportextended by the Company's stakeholders and trust reposed by them in the Company. TheDirectors sincerely appreciate the commitment displayed by the employees of the Companyresulting in satisfactory performance during the year.

For and on behalf of the Board of Directors

Sd/-

Ketu Parikh

Chairman cum Managing Director

DIN – 00185343

Date: 21/08/2019

Place: Vasai

.