FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018
TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Thirty Sixth (36th)Directors' Report of your Company along with the financial statements for the financialyear ended 31st March 2018.
1. Certain key aspects of your Company's performance during the financial year ended 31stMarch 2018 as compared to the previous financial year are summarized below:
| || || || ||(Rs. in Lakhs) |
|Particulars ||Standalone ||Consolidated |
| ||Year ended 31.03.2018 ||Year ended 31.03.2017 ||Year ended 31.03.2018 ||Year ended 31.03.2017 |
|Income for the year ||34436.21 ||4947.08 ||35557.16 ||6408.56 |
|Expense for the year ||33456.42 ||3842.73 ||34600.03 ||5141.58 |
|Profit before Tax and Interest ||979.79 ||1104.35 ||957.13 ||1266.98 |
|Current Tax ||213.89 ||222.87 ||213.89 ||254.53 |
|Provisions for Taxation/ Deferred Tax ||(1.17) ||(1.37) ||9.78 ||10.52 |
|Net Profit / (Loss) for the Current Year ||1166.27 ||882.85 ||1132.65 ||995.75 |
|Minority Interest & Profit from Associate Company ||- ||- ||(9.98) ||25.77 |
|Net Profit After Tax ||1166.27 ||882.85 ||1142.63 ||969.95 |
|Transfer to General Reserves || || || || |
|Balance carried to Balance Sheet ||1166.27 ||882.85 ||1142.63 ||969.95 |
2. DIVIDEND AND RESERVES:
Your Directors recommend for approval of the Members at the ensuing Annual GeneralMeeting (AGM) a dividend of 0.50 paisa (5%) per equity share of Rs. 10 each for thefinancial year ended 31st March 2018. The dividend will be paid in compliancewith the applicable rules and regulations.
No amount was transferred to General Reserve during the year
3. SHARE CAPITAL
During the year under review the Company vide special resolution dated 15th December2017 has issued 320000 (Three Lac Twenty Thousand only) Convertible Warrants("Warrants") on a preferential basis to Non-Promoter Individuals with a right toWarrant Holders to apply for and get allotted one equity share of face value of Rs.10/-(Rupees Ten Only) each (the "Equity Shares") for each Warrant within a periodof 18 (Eighteen) months from the date of allotment of Warrants and the Board of Directorof the Company vide resolution dated 05th February 2018 has allotted 284552equity shares to the warrant holder of the Company due to which the paid up share capitalof the Company has increased from Rs. 62250000 to Rs. 65095520 consisting of 6509552fully paid up equity shares of the Company.
The Company vide ordinary resolution dated 26th February 2018 passed by wayof postal ballot has increased the Authorised Share Capital from existingRs.75000000/-(Rupees Seven Crore Fifty Lacs only) divided into 7500000 (Seventy FiveLacs only) equity shares of Rs.10/-each to Rs.300000000/- (Rupees Thirty Crore only)divided into 30000000 (Three Crore only) equity shares of Rs.10/- each ranking paripasu with existing shares of the Company. In the same notice of postal ballot whichconsist of increase in Authorised share capital of the Company the Company also gotapproved the issue of Bonus Equity Shares to the Equity Shareholders of the Company in theratio of 2:1. The board of Director of the Company at its meeting held on 08thMarch 2018 has allotted 13019104 bonus equity shares to the Equity Shareholders of theCompany.
Hence the Paid up Capital of the Company which was stood at Rs. 62250000 on 31stMarch 2017 has increased to Rs. 195286560 consisting of 19528656 fully paid equityshares of the Company on 31st March 2018.
4. OVERVIEW OF OPERATIONS:
During the year under review on Standalone basis your Company recorded a total incomeof Rs. 34436.21 lakhs as compared to last year's total Income of Rs. 4947.08 lakhs andNet Profit of Rs. 1166.27 lakhs as compared to last year's net profit of Rs. 882.85 Lakhs.For further information kindly refer to Management Discussion and Analysis Report whichincludes the growth of the Company forming part of this Annual report.
5. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013("the Act") and as prescribed in Form No. MGT-9 of the Companies (Management andAdministration) Rules 2014 is appended as Annexure I to the Annual Report.
6. NUMBER OF MEETINGS OF THE BOARD
The Board met 9 (Nine) times in Financial Year 2017-18 (FY 2017-18) viz. on 01stApril 2017 30th May 2017 10th August 2017 14th November 201718th November 2017 24th January 2018 05th February2018 08th March 2018 and 27th March 2018.
The details of attendance of Director with respect to above meetings are as follows:
|Name of Director ||No. of Meeting eligible to Attend ||No. of Meeting Attended |
|Mr. Suresh Gaggar ||9 ||9 |
|Mr. Ramakant Gaggar ||9 ||9 |
|*Mr. Dinesh Nandwana ||3 ||1 |
|*Dr. Vidhu Kakkar ||7 ||7 |
|Mrs. Manju Maheshwari ||9 ||9 |
|Mr. Sharad Rathi ||9 ||9 |
* Dr. Vidhu Kakkar has appointed on 30th May 2017 and resigned w.e.f from26th March 2018/ Mr. Dinesh Nandwana has resigned from the Board w.e.f 10thAugust 2017
7. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for financial year ended 31stMarch 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures;
ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at 31st March 2018 and of theprofit of the Company for that period.
iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the Provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv. The Directors have prepared the annual accounts for financial year ended 31stMarch 2018 on a going concern' basis.
v. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and have been operatingefficiently.
vi. The Directors have devised proper systems to ensure compliance with provisions ofall applicable laws and that such systems were adequate and operating effectively.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independenceas required under Section 149(7) of the Act confirming that they meet the criteria ofindependence under Section 149(6) of the Act and Regulation 16 (1)(b) of the SecuritiesExchange board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations).
9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under sub-section (3) of Section 178 of the Act and Regulation 19 ofListing Regulations is appended as Annexure II to this Annual Report.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act read with Companies (Meeting of Board and Its Powers) Rules 2014as on 31st March 2018 are given in the notes to the Financial Statementsforming part of this Annual report.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2017-18 your Company has not entered into transactions withrelated parties as defined under section 2(76) of the Act read with the Companies(Specification and Definitions Details) Rules 2014 and Rules made thereunder andRegulation 23 of the Listing Regulations. All the transactions with the Related Partiesare at arm's length basis and these transactions are not of material in nature as perSection 188 of the Companies Act 2013 read with Rule 15 of the Companies (Meeting ofBoard and its Powers) Rules 2014. The related party transactions are placed before theAudit Committee as also the Board for approval. The Form AOC- 2 of the Companies(Accounts) Rules 2014 is set out as Annexure III to this Annual Report.
The details of party transactions as required under Accounting Standard-18 are set outin notes to accounts to the Financial Statements forming part of this Annual Report.
The Policy on Related Party Transaction may be accessed on the Company's website at thelink: http://garnetint.com/ mdocs-posts/related-party-transactions-policy/
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
13. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE
EARNINGS AND OUTGO
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act read with theCompanies (Accounts) Rules 2014 is given in Annexure IV to this Annual Report.
14. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee toframe implement and monitor the risk management plan for the Company.
The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage.
The business risk framework defines the risk identification and its management approachacross the enterprise at various levels including documentation and reporting. Theframework helps in identifying risks trend exposure and potential impact analysis on aCompany's business.
15. CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Act. Your Company's Annual Report on the CSR activitiesundertaken during the financial year ended 31st March 2018 in accordance withSection 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules 2014is annexed to this report as Annexure V.
16. VIGIL MECHANISM
The Company has adopted a Vigil Mechanism and Whistle Blower Policy for Directors andEmployees in compliance with the provisions of Section 177(10) of the Act and Regulation22 of the Listing Regulations to report genuine concerns and to provide for adequatesafeguards against victimization of persons who may use such mechanism. The said policy isalso available on the Company's website:http://garnetint.com/mdocs-posts/vigil-mechanisim-policy/
17. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulationsthe Board has carried out an annual evaluation of its own performance performance of theDirectors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria for theBoard its Committees and Directors.
The Board's functioning was evaluated on various aspects including inter alia degreeof fulfilment of key responsibilities Board structure and composition establishment anddelineation of responsibilities to various Committees effectiveness of Board processesinformation and functioning.
The Committees of the Board were evaluated after taking inputs from the Committeemembers on the basis of criteria such as degree of fulfilment of key responsibilitiesadequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on aspects such as attendance and contribution at Board/ CommitteeMeetings and guidance/support to the management outside Board/ Committee Meetings. Inaddition the Chairman was also evaluated on key aspects of his role including settingthe strategic agenda of the Board encouraging active engagement by all Board members.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole.
In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of executive directors and non-executivedirectors.
18. SUBSIDIARY COMPANIES
The Company is having one material Subsidiary i.e. Sukartik Clothing Private Limited.Further Company has also formulated policy for determining material subsidiary and thesame is available on Company's website and the same may be accessed at the link:http://garnetint.com/mdocs-posts/policy-for-determining-material-subsidiary/
Further during the year Garnet Valorem Capital Ventures Private Limited wasincorporated as subsidiary of the Company on 16th January 2018.
Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statement of the Subsidiary company in Form AOC-1 is attached tothe a part of this Report as Annexure- VI.
19. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT 2013
The Company has neither accepted nor renewed any deposits during the Financial Year2017-18 in terms of Chapter V of the Act.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
21. INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference tofinancial statements. The Company has adopted accounting policies which are in line withthe Accounting Standards prescribed in the Companies (Accounting Standards) Rules 2006that continue to apply under Section 133 and other applicable provisions if any of theAct read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions ofthe Act to the extent applicable. These are in accordance with generally acceptedaccounting principles in India.
The Company in preparing its financial statements makes judgments and estimates basedon sound policies and uses external agencies to verify/validate them as and whenappropriate. The basis of such judgments and estimates are also approved by the StatutoryAuditors and Audit Committee.
The Internal Auditor evaluates the efficacy and adequacy of internal control systemaccounting procedures and policies adopted by the Company for efficient conduct of itsbusiness adherence to Company's policies safeguarding of Company's assets preventionand detection of frauds and errors and timely preparation of reliable financialinformation etc. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Section 152(6)(e) of the Act Mr. SureshGaggar (DIN: 00599561) Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.
The Board of Directors at its meeting held on 30th May 2017 has appointedDr. Vidhu Kakkar as an Additional Independent Director. Further as per the declarationgiven by her she has been re-designated from Additional Non Executive Independent directorto Non-Executive Non Independent Director and she has resigned from the Board w.e.f. 26thMarch 2018. Mr. Dinesh Nandwana has also resigned as an Independent Director of theCompany w.e.f 10th August 2017.
Board places on record its appreciation for the assistance and guidance provided by Mr.Dinesh Nandwana and Dr. Vidhu Kakkar during his tenure as Director of the Company.
Further the Board of Director at its meeting held on 28th June 2018subject to approval of members the Board has appointed Mr. Suresh Gaggar as Chairman ofthe Company Mr. Ramakant Gaggar as Managing Director of the Company and Dr. JaswantsinghPatil as an Additional Independent Director of the Company. Mr. Ramakant Gaggar and Dr.Jaswantsingh Patil if appointment approved by the member will be appointed for theperiod of 05 years commencing from 28th June 2018.
1. Statutory Auditor
The members of the Company at its meeting held on 27th September 2017 hasappointed M/s. MVK Associates Chartered Accountants Mumbai (ICAI Registration No.120222W) as Statutory Auditor of the Company for second consecutive term of five yearsi.e. from the conclusion of 35th Annual General meeting of the Company till theConclusion of the 40th Annual General Meeting of the Company subject toratification by the shareholders of the Company at every annual general meeting of theCompany held thereafter or as may be necessitated by the Act from time to time.
M/s. MVK Associates Chartered Accountants Mumbai (ICAI Registration No. 120222W)have confirmed their eligibility and qualification required under Section 139 141 andother applicable provisions of the Act and rules issued thereunder (including allstatutory modification and amendment made from time to time).
Auditors report for the financial year ended 31st March 2018 forms part ofthis Annual Report. Following mentioned remarks are given by the Auditors of the Companyin their Audit Report for the year ended 31st March 2018: a. Company'sFinancial Assets constitutes more than 50% of total assets and income from financialassets constitutes more than 50% of the gross income in lieu of this Company has changedits Main Object clause and is also under process of registering itself with RBI under Sec.45IA.
b. In the case of one of the Subsidiary Company Provision for Employee benefits hasnot been done as per Accounting Standard 15 which deals with "EmployeeBenefits".
Further the Audit Committee and Board of Directors of the Company recommends to themembers of the Company for ratification of appointment of statutory auditor of the Companyfrom this ensuing Annual General Meeting till the conclusion of the 40th AnnualGeneral Meeting of the Company.
2. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed M/s Sidharth Sharma & Associates Practicing Company Secretaries toundertake the Secretarial Audit of the Company for the year ended 31st March2018. The Secretarial Audit Report is annexed as Annexure VII to this Annual Report.
Following are the observation given by the Secretarial Auditor of the Company:
a) The Company is required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934. In lieu of this Company has changed its main object clause and is alsounder process of registration itself with RBI under Section 45-IA.
b) The Company has generally complied with Section 135 of Companies Act 2013 exceptfor the amount lying unspent.
24. CORPORATE GOVERNANCE
Pursuant to Listing Regulations the Management Discussion & Analysis Report andCorporate Governance Report together with Certificate from Practicing Company Secretaryon compliance with the conditions of Corporate Governance as lay down forms a part ofthis Annual Report.
25. AUDIT COMMITTEE OF THE COMPANY:
The Company's Audit Committee comprises the following Directors:
1. Mr. Sharad Rathi (Chairman);
2. Mr. Ramakant Gaggar;
3. Mrs. Manju Maheshwari
The composition of the Audit Committee is in compliance with the requirements ofSection 177 of the Act and Regulation 18 of the Listing Regulations.
26. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits top 10 employees in terms of remuneration drawn and otherDisclosures pertaining to remuneration are provided in Annexure VIII to this AnnualReport.
Having regard to the provisions of the proviso to Section 136(1) of the Act and asadvised the Annual Report excluding the aforesaid information is being sent to themembers of the Company
The said information is available for inspection at the registered office of theCompany during working hours and any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished on request.
Your Directors express their sincere appreciation of the co-operation received fromshareholders bankers and other business constituents during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the commitmentdisplayed by all executives officers and staff resulting in the successful performanceof the Company during the year.
| ||For and on behalf of the Board of Directors |
| ||sd/- |
| ||Suresh Gaggar |
| ||Chairman |
| ||DIN: 00599561 |
|Mumbai 28th June 2018 || |
|Registered Office: || |
|901 Raheja Chambers Nariman Point Mumbai 400021 || |
|CIN : L74110MH1995PLC093448 || |
|Email ID: email@example.com || |
|Website : www.garnetint.com || |
|Tel No : 91-022-22820714 || |