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Garnet International Ltd.

BSE: 512493 Sector: Financials
NSE: N.A. ISIN Code: INE590B01010
BSE 00:00 | 31 Jan 71.95 -2.05






NSE 05:30 | 01 Jan Garnet International Ltd
OPEN 70.40
52-Week high 118.05
52-Week low 31.60
P/E 121.95
Mkt Cap.(Rs cr) 141
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 70.40
CLOSE 74.00
52-Week high 118.05
52-Week low 31.60
P/E 121.95
Mkt Cap.(Rs cr) 141
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Garnet International Ltd. (GARNETINTL) - Director Report

Company director report



The Directors present their Fortieth (40th) Annual Report with theAudited Financial Statements for the year ended 31st March 2022.

1. FINANCIAL RESULTS (under Indian AS)

Financial Results are as under:

(Rs. in Lakhs)




Year ended 31.03.2022 Year ended 31.03.2021 Year ended 31.03.2022 Year ended 31.03.2021
Income for the year 1039.45 129.06 4384.39 1778.06
Expense for the year 1322.32 416.52 4470.68 2015.87
Profit before Tax and Interest (282.87) (287.47) (86.29) (237.81)
Current Tax - - 55.70 (9.13)
Provisions for Taxation/ Deferred Tax 0.39 127.22 (17.07) 126.16
Net Profit / (Loss) for the Current Year (283.26) (414.69) (124.92) (354.84)
Minority Interest & Profit from Associate Company - - 47.34 17.89
Net Profit After Tax (283.26) (414.69) (172.27) (372.73)
Transfer to General Reserves - - - -
Balance carried to Balance Sheet (283.26) (414.69) (172.27) (372.73)


The Standalone Operating Income of the Company is derived from a mix ofdividend interest income income from derivatives and other income. During the year underreview on Standalone basis your Company recorded a total income of Rs.1039.45 Lakhs ascompared to last year's total Income of Rs. 129.06 Lakhs and Net Loss of Rs.283.26Lakhs as compared to last year's net loss of Rs. 414.69 Lakhs.


Board of Directors has decided not to recommend any dividend for theyear ended 31st March 2022.


No amount was transferred to General Reserve during the year.


The world today is stupefied with supply chain disruptions which hasresulted in high rate of inflation which was not experienced by the world for manydecades. Our Neighbor China has chosen to continue with its Zero covid policy which hasresulted in shutting down of most of its business activities including ports productionfacilities even cities. Most of activities related to exports has been halted due to ZeroCovid Policy adopted by China. On other hand we have Europe which is rattled by Ukrainewar. This has disrupted oil gas and agricultural supplies including staple products usedby households namely palm oil

and sunflower oil - indispensable in many households and used in thefood services industry. Record-high food inflation is tightening its grip on the globaleconomy most critically in developing nations where financial distress is alsocontributing to increased political instability. Even if inflation starts declining fromcurrent levels as forecasted by many research firms central banks shall keep on doingrate hikes significantly to align rates with long-term inflation.

Indian Economy & Corporate Earnings

The Indian economy for the quarter ended March 2022 showed tremendousresilience to the global macro disruption. The Centre's gross tax revenue for FY22exceeded the budget estimate by almost ?5 lakh crore adding up to ?27.07 lakh crore forthe year against an estimated ?22.17 lakh crore. The sharp rise in the collections liftedthe tax-GDP ratio to the highest ever 11.7% - 6.1% for direct taxes and 5.6% for indirecttaxes. The gross corporate taxes for FY22 were ?8.6 lakh crore up 56% from a year agowhile personal income taxes rose slightly less by 43% to ?7.48 lakh crore.

The value of goods exported from India witnessed 40 per cent growthduring the financial year 2021-22 hitting a record $417.8 billion surpassing the targetset by the government by almost 5 per cent. India exported $250 billion worth of servicesin 2021-22 aggregating the total exports go goods and services from India at almost $670billion in 2021-22.

On the other hand merchandise imports increased significantly to$615-617 billion respectively. As a result the merchandise trade deficit is projected tonearly double to around $194-196 billion in FY22 from $102.2 billion in FY21. The servicestrade surplus is likely to rise by around 18% to $106-108 billion in FY22 which hashelped contain the Current account deficit.

Inflation remains the biggest concern both due to its impact on demandand due to its impact on margins and profitability. Supply concerns and surge in inputcosts can force India Inc's hand on prices which would impact affordability andtherefore demand which would not be ideal as private consumption accounts for around 60%of the gross domestic product. While headline inflation stands at a 17-month high of6.95% the food price inflation in rural areas has more than doubled from 3.94% in March2021 to 8.04% in March 2022.

A silver lining may emerge from IMD's recent forecast of a normalsouthwest monsoon which could help boost food grain output. The disruption of global foodsupply chains resulting in higher agricultural commodity prices has resulted in openingup the potential for exports could lift rural income. The rural economy contributesnearly half the nation's overall GDP and employs 350 million people (68% of the totalworkforce) as per Bain & Company. Agriculture is the largest sub-sector in the ruraleconomy contributing approximately 37% of total rural GDP.

Thus the equity markets which recorded an unprecedented appreciationover the last 18 months may not be as buoyant in the next fiscal. Going forward theperformance will be dependent on how global factors the economy and corporate earningsshape up over the second half of the year.

Your Company will continue to look for opportunities to invest incompanies which have consistent growth prospects with high quality earnings. Managementwill evaluate and select investments based on high quality governance long termsustainability and strength of the investee company's balance sheets.

Risks and Concerns

The very nature of the Company's business makes it subject tovarious kinds of risks. The Company encounters credit risk and operational risks in itsdaily business operations. Further the performance of the Company is dependent on thecapital markets for its returns. Even though it is envisaged that Indian stock market willcontinue to do well global concerns can result in sharp corrections.

Financial Performance and Operational Review

The paid up equity share capital of the Company as on March 31 2022stands at Rs. 196350000/- divided into 19635000 fully paid up equity shares of Rs.10/- each.

Net Worth

The Net W orth of the Company stands at Rs. 2469.53 lakhs.

Total Income

During the year total income was reported at Rs. 1039.45 lakhs.

Credit Facilities

The Company has not availed any credit facility. It has consistentlybeen able to meet its financial needs through internal accruals.

Finance Cost

The finance cost of the Company stands at Nil Tax Expense

The Company has incurred a tax expense of Nil in the current year.


The Company has not accepted any public deposits under the provisionsof the Companies Act 2013 (‘Act'>


The provisions of section 186 of the Act pertaining to investmentguarantee and lending activities are not applicable to the Company since the Company is aNon Banking Financial Company ("NBFC") whose principal business is acquisitionof securities.


The Consolidated Financial Statements of the Company form part of theAnnual Report. The annual accounts of the subsidiary company and related detailedinformation are available on the website of the Company and the same may be obtained bywriting to the Company Secretary at the Registered e-mail ID of the

The consolidated financial results reflect the operations of SukartikClothing Pvt. Ltd. ("Sukartik") (Subsidiary). The Company has adopted a Policyfor determining Material Subsidiaries in terms of Regulation 16(1)(c) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations'').


The Company is having one material Subsidiary i.e. Sukartik ClothingPrivate Limited. There are no associate or Joint Venture Companies within the meaning ofSection 2(6) of the Companies Act 2013. There has been no material change in the natureof business of the Subsidiaries.

In accordance with the General Circular issued by the Ministry ofCorporate Affairs Government of India the Balance Sheet Statement of Profit & Lossand other documents of the Subsidiary Companies are not being attached with the BalanceSheet of the Company. However the financial information of the Subsidiary Companies isdisclosed in the Annual Report in compliance with the said circular in Form AOC 1 asAnnexure - A.


During the year under review Five Board Meetings were held. Thedetails of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. There have not been any instances during the year when recommendations of theAudit Committee were not accepted by the Board.


Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors including audit of internal financial controls overfinancial reporting by the statutory auditors and the reviews performed by Management andthe relevant Board Committees including the Audit Committee the Board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2021-22.

Accordingly pursuant to Section 134(3)(c) and 134(5) of the CompaniesAct 2013 the Board of Directors to the best of their knowledge and ability confirmthat: -

a. in the preparation of the annual accounts the applicable accountingstandards have been followed and that there are no material departures;

b. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

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

e. they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively;

f. They have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.


The Company has adopted a Risk Management Policy in accordance with theprovisions of the Act and Regulation 17(9) of the SEBI Listing Regulations. It establishesvarious levels of risks with its varying levels of probability the likely impact on thebusiness and its mitigation measures.

The Company has a robust Risk Management framework to identifyevaluate business risks and opportunities. This framework seeks to create transparencyminimize adverse impact on the business objectives and enhance the Company'scompetitive advantage.


The Company maintains appropriate systems of internal controlsincluding monitoring procedures to ensure that all assets and investments are safeguardedagainst loss from unauthorized use or disposition. Company policies guidelines andprocedures provide for adequate checks and balances and are meant to ensure that alltransactions are authorized recorded and reported correctly.

The Internal Auditors reviews the efficiency and effectiveness of thesesystems and procedures. Added objectives include evaluating the reliability of financialand operational information and ensuring compliances with applicable laws and regulations.The Internal Auditors submit their Report periodically which is placed before and reviewedby the Audit Committee.


The Company has adopted a Whistle Blower Policy to provide a formalmechanism to the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct orethics policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provide for direct access to the Chairman ofthe Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee Chairman.


All Related Party Transactions that were entered into during thefinancial year were on an arm's length basis in the ordinary course of business andwere in compliance with the applicable provisions of the Act and the Listing Regulations.There were no materially significant Related Party Transactions made by the Company withPromoters Directors Key Managerial Personnel which may have a potential conflict withthe interest of the Company at large.

All Related Party Transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are repetitive in nature. A statement of all Related Party Transactionsis placed before the Audit Committee for its review on a quarterly basis specifying thenature value and terms and conditions of the transactions if any.


In terms of section 135 and Schedule VII of the Act the Board ofDirectors has constituted a CSR Committee under the Chairmanship of Mr. Suresh Gaggar.Mrs. Sandhya Lotlikar Mr. Shyaam Taaparia and Mr. Ramakant Gaggar are the other membersof the Committee.

The Annual Report on CSR activities is annexed herewith as"Annexure B".


There has been no change in nature of business of the company duringthe F.Y. 2021-2022. Your company is engaged in other financial services i.e. Investment insecurities etc so there is only one segment reporting as per IND AS 108


The Company has adopted a policy on Prevention Prohibition andRedressal of Sexual Harassment at the Workplace in line with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and theRules thereunder. The Policy aims to provide protection to employees at the work place andprevent and redress complaints of sexual harassment and for matters connected orincidental thereto with the objective of providing a safe working environment whereemployees feel secure. The Company has also constituted an Internal Complaints Committeeknown as the Prevention of Sexual Harassment ("POSH") Committee to inquire intocomplaints of sexual harassment and recommend appropriate action.

The Company had no complaints of sexual harassment at the beginning ofthe year and has not received any complaints during the financial year. Accordingly thereare no complaints pending at the end of the financial year 2021-2022.


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


Pursuant to the provisions of the Act and the Company's Articlesof Association Mr. Suresh Gaggar (DIN 00599561) retires by rotation and being eligibleoffers himself for re-appointment. A resolution seeking shareholder approval for hisreappointment forms part of the Notice.

During the year under review Mr. Jaswantsingh Patil (DIN 02894705)ceased to be the Director of the Company w.e.f 12th Oct. 2021. The Board ofDirectors places on record its appreciation of her valuable support and guidance to theBoard during her tenure. In order to fulfill the requirement of minimum number ofDirectors prescribed under SEBI LODR Regulations 2015 the Board of Directors on12.10.2021 appointed Mr. Navratan Gaggar (DIN: 01655621) as an Additional Director on theBoard. He holds his Office as Director till ensuing Annual General Meeting and beingeligible offer himself for re-appointment.

During the year under review the Company appointed Mr. Shyaam Taaparia(DIN: 07369692) as an Independent Director w.e.f. 12 th Oct. 2021 for 5 years.Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe SEBI Listing Regulations.

In terms of Regulation 25(8) of SEBI Listing Regulations there has beenno change in the circumstances affecting their status as Independent Directors of theCompany.

During the year under review the Non-Executive Directors of theCompany had no pecuniary relationship or transactions with the Company.

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on 31st March 2022 are Mr. Sanjay Raut as ChiefFinancial Officer and Mrs. Kumkum Shah as Company Secretary.

Details pertaining to Director seeking re-appointment together withother directorships and committee membership have been given in the annexure to the Noticeof the AGM in accordance with the requirements of the SEBI Listing Regulations andSecretarial Standard-2 on General Meetings.


Pursuant to the provisions of the Act and Listing Regulations theBoard has carried out an annual evaluation of its own performance performance of theDirectors individually as well as the evaluation of the working of its committees.

The Nomination and Remuneration Committee has defined the evaluationcriteria procedure and time schedule for the Performance Evaluation process for theBoard its Committees and individual Directors including the Chairman of the Company. Theabove criteria are broadly based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on 5th January 2017.

For evaluating the Board as a whole views were sought from theDirectors on various aspects of the Board's functioning such as degree of fulfilmentof key responsibilities Board Structure and composition establishment delineation ofresponsibilities to various committees effectiveness of Board processes information andfunctioning Board culture and dynamics quality of relationship between the Board and themanagement.

Similarly views from the Directors were also sought on performance ofindividual Directors covering various aspects such as attendance and contribution at theBoard/Committee Meetings and guidance/support to the management outside Board/CommitteeMeetings. In addition the chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members and promoting effective relationships and open communication communicatingeffectively with all stakeholders and motivating and providing guidance to the ExecutiveDirector.

Areas on which the Committees of the Board were assessed includeddegree of fulfillment of key responsibilities adequacy of Committee compositioneffectiveness of meetings Committee dynamics and quality of relationship of the Committeewith the Board and the Management.

The performance evaluation of the Independent Directors was carried outby the entire Board. The performance evaluation of the Chairman and the Non-IndependentDirectors was carried out by the Independent Directors who also reviewed the performanceof the Board as a whole. The Nomination and Remuneration Committee also reviewed theperformance of the Board its Committees and of individual Directors.


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


(i) Statutory Auditors

M/s. B.M. Gattani & Co. Chartered Accountants Mumbai (ICAIRegistration No. 113536W) have been appointed as an Auditor of the Company from 37thAnnual General meeting of the Company till the Conclusion of the 42th Annual GeneralMeeting of the Company pursuant to provisions of the section 139 141 and other applicableprovisions of the Act and rules issued thereunder (including all statutory modificationand amendment made from time to time).

Auditors report for the financial year ended 31st March 2022 formspart of this Annual Report. Following mentioned remarks are given by the Auditors of theCompany in their Audit Report for the year ended 31st March 2022:

a) Subsidiary of the Company has not made provision for employeebenefit as per Accounting Standard 15 which deals with "Employee Benefits".

b) The Company has granted interest free loans to its SubsidiaryCompany in violation of Section 186 (7) of Companies Act 2013.

Management Reply for the Remark given by Statutory Auditor:

The Company is in talk with management of its material subsidiary sothat adequate provisions for the employee benefit shall be made. Company ensures torecover the interest from subsidiary company in next financial year.

(ii) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Siddharth Sharma & Associates Practicing Company Secretaries toundertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor isannexed herewith as "Annexure C"

Pursuant to the provisions of Section 204 of the Act and the Rules madethereunder the Board of Directors of Sukartik Clothing Private Limited (Sukartik)material subsidiary of the Company had appointed M/s. Siddharth Sharma & AssociatesPracticing Company Secretaries to undertake the Secretarial Audit of Sukartik for the yearended 31st March 2022. The Secretarial Audit Report of Sukratik is given as"Annexure D".

(iii) Cost Records And Cost Auditors

The provisions of Cost Audit and Records as prescribed under Section148 of the Act are not applicable to the Company.


The Company is in compliance with the Secretarial Standards on Meetingsof the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by the Instituteof Company Secretaries of India and approved by the Central Government.


The Annual Report contains a separate section on the Company'scorporate governance practices together with a certificate from the Company'sAuditors confirming compliance as per SEBI Listing Regulations.


Regulation 34 (2) (f) of SEBI (LODR) Regulations related to BusinessResponsibility Report is not applicable to the Company.


Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return in Form MGT-7 fpr FY 2021-22 will be uploaded on the Company's


During the year under review the Statutory Auditor and SecretarialAuditor have not reported any instances of frauds committed in the Company by its Officersor Employees to the Audit Committee under Section 143(12) of the Act details of whichneeds to be mentioned in this Report.


Since the company is a Investment Company and has no manufacturingactivity or other operations. Therefore the provisions of Section 134 (3) (m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are not applicable. Therewere no foreign exchange earnings or outgoing during the financial year ended 31st March2022.


The information required under Section 197(12) of the Act read withRule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as "Annexure E".

Details required under the provisions of section 197(12) of the Actread with rule 5(2) and (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 will be made available to any member on request as per provisionsof section 136(1) of the Act.


The Board wishes to place on record their sincere appreciation for thecontinued support which the Company has received from all its stakeholders and above allits employees.

For and on behalf of the Board of Directors

Suresh Gaggar

Chairman DIN: 00599561

Mumbai 25 th July 2022