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Garware Marine Industries Ltd.

BSE: 509563 Sector: Others
NSE: N.A. ISIN Code: INE925D01014
BSE 00:00 | 18 Oct 2.30 0.10
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NSE 05:30 | 01 Jan Garware Marine Industries Ltd
OPEN 2.30
PREVIOUS CLOSE 2.20
VOLUME 25
52-Week high 3.05
52-Week low 2.20
P/E 7.42
Mkt Cap.(Rs cr) 1
Buy Price 2.31
Buy Qty 275.00
Sell Price 2.30
Sell Qty 100.00
OPEN 2.30
CLOSE 2.20
VOLUME 25
52-Week high 3.05
52-Week low 2.20
P/E 7.42
Mkt Cap.(Rs cr) 1
Buy Price 2.31
Buy Qty 275.00
Sell Price 2.30
Sell Qty 100.00

Garware Marine Industries Ltd. (GARWAREMARINE) - Director Report

Company director report

To

The Members

Garware Marine Industries Limited

We present our report on the business and operations of the Company for the year ended31st March 2018.

Financial Summary:

Particulars Current Year 31/03/2018 Previous Year 31/03/2017
(Amt. in Rs.) (Amt. in Rs.)
Revenue from operations (Including other income) 11714094 8814211
Less: Expenses 9881824 14159553
Profit before Exceptional Items and Tax 1832270 (5345342)
Add: Exceptional Item 1200000 -
Profit before Tax 3032270 (5345342)
Less: Tax Expenses - -
Deferred tax/ charges 800000 800000
Prior Period Tax 1981983 -
Profit from continuing operations after tax 250287 (6145342)
Loss from discontinued operations - -
Tax on discontinued items - -
Loss from discontinued items after loss - -
Profit 1 Loss for the year 250287 (6145342)
Other comprehensive income for the year (31405018) (215634765)
Total comprehensive income for the year (31154731) (221780107)

Financial Highlights

Revenue from operations (including other income) for the year ended 31stMarch 2018 stood at Rs. 117 lakhs as against Rs. 88 lakhs for the previous year ended 31stMarch 2017.

The Profit for the year ended 31st March 2018 stood at Rs. 2.50 lakhs asagainst a loss of Rs. 61.45 lakhs for the previous year. The increase in Income fromOperations "coupled" with a reduction in Costs (compared to the Previous Year)contributed to the Company generating a Profit in the current year. Other ComprehensiveIncome - Loss (mainly as a result of restatement of investments) stood at Rs. 3.14 croresas against Rs. 21.56 crores.

During the Financial Year 2017-18 the Company has adopted Indian Accounting Standards(IND AS) as notified by the Ministry of Corporate Affairs with effect from 01stApril 2017 with a transition date of 01st April 2016. The adoption of IND AShas been carried out in accordance with IND AS - 101 i.e. First time adoption of IndianAccounting Standards. IND AS - 101 required that all IND AS standards and interpretationsthat are issued and effective for the first IND 50AS financial statements for the yearended 31st March 2018 have been applied retrospectively and consistently forall financial years presented therein.

Operations

During the year under review your Company's revenue was generated from vessel repairs.

Future Outlook

Since the operations of the Company are solely dependent on repair of vessels theCompany is greatly dependent on the fortunes of the Offshore and Shipping sector.Considering both these sectors have been going through difficult times with no recoveryexpected in the immediate future the Company too will face "trying" times inthe near future. Additionally there is growing competition from newly created repair"outfits" which have "mushroomed" as a result of loss of jobs in viewof the conditions in the industry.

Abysmally low charter rates and increased number of lay ups of Vessels have also had anadverse effect on the Company's ability to widen its Customer base and in turn improverevenues since most owners are being extremely conservative on repairs and maintenance asCharter rates prevalent do not cover the operating costs of the vessels in some cases.

The Company will continue to face difficult times. However all efforts to save oncosts and overheads continue and the same should help in negate the potential downsidethat the Company may face in the coming future. Dividend

In view of the insufficiant profit and in an attempt to conserve resources for thefuture your Directors have not recommended any dividend for the financial year ended 31stMarch 2018.

Subsidiary / Wholly Owned Subsidiary

The Company does not have any Subsidiary or Wholly- owned Subsidiary.

Loans Guarantees or Investments During the year under review the Company has notgranted any loan not made any investment nor has it given any guarantee u/s 186 ofCompanies Act 2013 and thus required details are not applicable.

Deposits

No Deposits covered under Chapter V of the Companies Act 2013 were invited by theCompany from public during the year under review.

Directors

The following persons make up the Board of Directors of the Company:

Sr. No. Name of Director Designation
1 Mr. Aditya A. Garware (DIN: 00019816) Chairman Non-Executive - Non-Independent Director
2 Mrs. Shefali S. Bajaj (DIN: 00149511) Non-Executive - NonIndependent Director
3 Mr. Rajiv S. Khanna (DIN: 02855080) Independent Director
4 Mr. Sanjay V. Chinai (DIN: 00245418) Independent Director
5 Mr. Vikas D. Sadarangani (DIN:07657018) Independent Director
6 Mr. Shyamsunder V. Atre (DIN: 01893024) Executive Director

In accordance with the Provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr. Aditya A. Garware Director retires byrotation at the forthcoming Annual General Meeting of the Company and being eligibleoffers himself for reappointment. The Board of Directors recommends his reappointment forthe consideration of the Members of the Company at the ensuing Annual General Meeting ofthe Company.

Mr. Rajiv S. Khanna was appointed as Independent Directors for a period of 5 years till31st March 2019. He being eligible for re-appointment as IndependentDirector is proposed to be re-appointed for a further period of 5 years (2ndterm) till 31st March 2024 subject to approval of members.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Number of Meetings of the Board

During the year under review 4 Board Meetings were duly convened and held on 11thMay 2017 02nd August 2017 14th November 2017 and 12thFebruary 2018. The details of the said Board Meetings form part of the CorporateGovernance Report.

Committees of the Board

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee\

4. Corporate Social Responsibility Committee

The details of the committees along with their composition and relevant details areprovided in the Corporate Governance Report.

Board Evaluation

Pursuant to Provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a structured customized questionnaire wasprepared after taking into consideration the various aspects of the Board's functioningcomposition of the Board and its Committees performance of duties obligations andgovernance. The performance evaluation of Chairman Non-independent Directors andIndependent Directors was carried out by all the Directors.

Familiarization Program for Independent Directors

The Board has informed from time to time all the Independent Directors about the statusof business and the responsibilities and commitments of the Independent Directors of theCompany. Further at the time of appointment of new Additional Director (IndependentCategory) the Board has explained him all the duties functions and responsibilities beingan Independent Director of the Company. The format of terms and conditions of appointmentof Independent Directors is available on the Company's website www.garwaremarine. com.

Key Managerial Personnel

The following are the Key Managerial Personnel of the Company:

Mr. Shyamsunder V. Atre Executive Director
Ms. Pallavi P. Shedge Company Secretary
Mrs. Vipulata S. Tandel Chief Financial Officer

Audit Committee

Pursuant to the Provision of Section 177(8) of the Companies Act 2013 the AuditCommittee has 3 members including 2 Independent Directors as follows:

Sr. No. Name of the Director & Category Chairman / Member
1 Mr. Sanjay V. Chinai Independent Director Chairman
2 Mr. Aditya A. Garware Non-Executive - Non-Independent Director Member
3 Mr. Vikas D. Sadarangani Independent Director Member

There were no instances where the Board had not accepted any recommendation of theAudit Committee.

Nomination & Remuneration Committee

Pursuant to Section 178 of the Companies Act 2013 the Board has set up a Nomination& Remuneration Committee and the details of the Committee are stated under CorporateGovernance Report Annexed to this Report.

Stakeholders Relationship Committee

Pursuant to Section 178 of the Companies Act 2013 the Board has set up a StakeholdersRelationship Committee and the details of the Committee are stated under CorporateGovernance Report Annexed to this Report. Policy on Appointment and Remuneration

The Board of Directors has framed a Policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This Policy also lays down the criteria for selection and appointment of Board Members.The details of the Policy are available on the Company's website www.garwaremarine.com.

Director's Responsibility Statement\

In accordance with the provisions of Section 134(3) of the Companies Act 2013 andbased on the information provided by the management your Directors' state that:

(a) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed and that no material departures (save and except as stated in thisDirectors' Report) have been made from the same;

(b) They have selected such Accounting Policies and applied them consistently and madejudgments and estimates that 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 loss ofthe Company for the year ended on that date;

(c) That they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) They have prepared the Annual Accounts on a going concern basis;

(e) They have laid down internal financial controls to be followed and that suchfinancial controls are adequate and are operating effectively;

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.

Statutory Auditors and their Report

The members have approved appointment of Messrs. D. Kothary & Co. CharteredAccountants (Firm Registration No. 105335W) as Statutory Auditors of the Company for aperiod of 5 years from the conclusion of 39th Annual General Meeting held on 28thSeptember 2017 till the conclusion of 44th Annual General Meeting.

There are no Qualifications in the Auditors' Report.

Personnel

In order to retain talent the remuneration salary / fee reduction was reinstatedfully in the case of CFO (KMP) and other employees/consultants and partly in case ofExecutive Director (KMP) and Company Secretary (KMP).

The Board appreciates the support and co-operation of all the employees.

Internal Financial Control

The Company has adequate internal financial control with respect to the preparation andpresentation of the financial statements. There is no material change(s) and comment(s)affecting the financial position of the Company which have occurred between the end of theFinancial Year of the Company to which the financial statements relates and the date ofthe Report.

Significant & Material Order passed by the Madras High Court Chennai

As reported in the past Integrated Finance Company Limited (IFCL) had filed a caseagainst the Company in Chennai. The Madras High Court without warning passed an orderagainst the Company for recovery of Rs. 1.69 Crores and the interest thereon and executionorder was placed before the Bombay High Court. The Company approached the Madras HighCourt requesting for condonation of delay as IFCL had "surreptitiously"procured the said order without allowing the Company to defend itself. After hearing thematter the Madras High Court on 04th April 2017 issued an Order allowingthe Company's application for condonation of delay subject to the Company depositingRs.30 Lakhs with the Court and paying cost of Rs.5000/- to IFCL. As per the Order ofHon'ble Madras High Court the Company has duly complied and submitted its "WrittenStatement" with all the facts of the matter and is now awaiting the next hearing.

The Company had also filed a counter suit against Integrated Finance Company Limitedfor loss of profit as a result of non-availability of a Machine to the tune of Rs. 1.93Crores together with further interest @ 18% p.a. The said suit though filed in Mumbai wassubsequently transferred to Chennai in the year 2013 and is pending before Madras HighCourt.

Risks and area of concern

Adequate measures have been taken to protect the Company from any potential risks whichmay affect the existence of the Company and the Board of Directors continuously strives totake utmost care to ensure preservation of interest of all its stakeholders.

Extract of Annual Return

The Details forming part of extract of the Annual Return in Form MGT-9 is enclosed asAnnexure A to this Report.

Corporate Governance and Management Discussion and Analysis Report

The Corporate Governance Report and Management Discussion and Analysis Report alongwith the Auditors' Statement of its compliances are given separately. Related PartyTransactions

The information for related party transactions as required under Rule 8(2) of theCompanies (Accounts) Rules 2014 in Form AOC-2 is enclosed as Annexure B to this Report.The Policy on Related Party Transactions is available on the Company's websitewww.garwaremarine.com. Secretarial Audit

Pursuant to the Provisions of Section 204 of the Companies Act 2013 and the Rules madethereunder Mr. Rajkumar R. Tiwari Practicing Company Secretary (CP No. 2400) has beenappointed as Secretarial Auditor to conduct Secretarial Audit for the Financial Year201718. The Secretarial Audit Report for the year ended 31st March 2018 isenclosed as Annexure C to this Report.

During the year under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

In view of the total shut down of all manufacturing activities Statement pursuant toprovisions of Section 134(3)(m) of the Companies Act 2013 and Companies (Accounts) Rules2014 for Conservation of Energy Technology absorption and Foreign Exchange Earnings andoutgo is is not applicable.

Human Resources

The relations with employees continue to be cordial. Your Directors wish to expresstheir appreciation of the services rendered by the devoted employees.

Details of Salary of Employees

The information required under Section 197 of the Companies Act 2013 read with Rule 5of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof employees of the Company and Directors is furnished in Annexure D.

Vigil Mechanism

Pursuant to Section 177(9) and (10) of the Companies Act 2013 and Regulation 22 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated its Vigil Mechanism under the Whistle Blower Policy for its Directors andemployees to report genuine concerns. The Whistle Blower Policy of the Company isdisclosed on the website of the Company www.garwaremarine.com

During the Financial Year ended 31st March 2018 no complaint has beenreceived by the Audit Committee from Director(s) or employee(s) of the Company.

Corporate Social Responsibility (CSR)

In view of the losses for the previous years the Company was not required to make anycontribution towards CSR and thus the required details are "Not Applicable".Prevention of Sexual Harassment Policy

The Company has constituted a Committee pursuant to the provisions of ‘The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal)' Act 2013 &Rules thereunder. This Committee has been set up to redress complaints under sexualharassment. All employees (permanent contract and temporary) are covered under thePolicy.

During the year under review no complaint was received by the Committee.

Acknowledgement

Your Directors express their sincere gratitude to the Employees of the Company who havestood by and supported the Company through these "trying" times".

For and on behalf of Board
Date: 31/07/2018 Aditya A. Garware
Place: Mumbai Chairman

ANNEXURE B

FORM NO. AOC 2

(Pursuant to Clause (h) of Section 134 of the Act and Rule 8(2) of the Companies(Account) Rules 2014.

Form for Disclosure of particulars of contracts/ arrangements entered into by theCompany with related parties to in Sub-section (1) of Section 188 of the Companies Act2013 including certain arms-length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arms-length basis:

Sr. No. Particulars Details
1 Name(s) of the related party and nature of relationship. Nil
2 Nature of contracts/ arrangements/ transaction. Nil
3 Duration of the contracts/ arrangements/ transaction. Nil
4 Salient terms of the contracts or arrangements or transactions including the value if any. Nil
5 Justification for entering into such contracts or arrangements or transactions. Nil
6 Date of approval by the Board. Nil
7 Amount paid as advances if any. Nil
8 Date on which the special resolution was passed in General Meeting as required underfirst proviso to Section 188. Nil

2. Details of contracts or arrangements or transactions at arms-length basis:

Sr. No. Particulars Details
1 Name(s) of the related party and nature of relationship. Global Offshore Services Limited
2 Nature of contracts/ arrangements/ transaction. Ship repair service
3 Duration of the contracts/ arrangements/ transaction. Ongoing
4 Salient terms of the contracts or arrangements or transactions including the value if any. As per Agreement
5 Date of approval by the Board. 29th October 1999

ANNEXURE-D

Information pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

i] The ratio ofthe remuneration of each Director to the median remuneration oftheemployees ofthe Company for the financial year 2017-2018:

Name of Directors Company Secretary & Chief Financial Officer Ratio of remuneration to median remuneration of Employees
Mr. Shyamsunder V. Atre - Executive Director 3.34:1
Ms. Pallavi P. Shedge - Company Secretary 1.60:1
Mrs. Vipulata S. Tandel - Chief Financial Officer 0.90:1

ii] The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year 2017-2018:

Name of Key Managerial Personnel: % increase in remuneration in the financial year 2017-18
Mr. Shyamsunder V. Atre - Executive Director 48.58%
Ms. Pallavi P. Shedge - Company Secretary 1.77%
Mrs. Vipulata S. Tandel - Chief Financial Officer 5.19%

iii] The percentage increase in the median remuneration of employees on an annualizedbasis in the financial year: 5%

iv] The number of permanent employees on the rolls of Company as on 31stMarch 2018: 9

v] Average percentile increase already made in the salaries of employees other than theManagerial personnel in the last financial year and its comparison with the percentileincrease in the Managerial remuneration and justification thereof and any exceptionalcircumstances if any for increase in the Managerial remuneration:

• Average increase in remuneration (on an annualized basis) of employees excludingKMPs: 10%

• Average increase in remuneration of KMPs: 18%

• KMP salary increases are decided based on the Company's performance individualperformance inflation prevailing industry trends and benchmarks: Nil*

• In order to retain talent during the F.Y. 2016-17 the remuneration salary /fee reduction was reinstated fully in the case of CFO (KMP) and other employees/consultants and partly in case of Executive Director (KMP) and Company Secretary (KMP).

vi] Affirmation:

The Company affirms remuneration is as per the Remuneration Policy of the Company.

vii] Details oftop ten employees in terms of remuneration (gross) drawn during thefinancial year 2017-18:

Sr. No. Name of Employee & Designation Designation Gross Remuneration / Salary per annum as on 31/03/2018 Remark
1. Mr. Shyamsunder V. Atre Executive Director - KMP 1285359 -
2. Ms. Pallavi P. Shedge Company Secretary - KMP 616036 -
3. Mrs. Vipulata S. Tandel Chief Financial Officer -KMP 346683 -
4. Mr. Akbar I. Sayyed Marine Hy. Fitter 495360 -
5. Mr.Murlidhar R. Sawant Marine Welder 507188 -
6. Mr. John B. Pariera Marine Welder 501913 -
7. Mr. Mayur S. Kochare Purchase Officer 379626 -
8. Mrs. Swati Y. Jangle Comp. Operator/ Assistant 326413 -
9. Mrs. Deepa D. Khot Accounts Assistant 317152 -

viii] Statement of particulars of employees pursuant to the provisions of Section197(12) of Companies Act 1956 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014: There is no employee whose salary exceeded Rs.8.50Lakhs per month or Rs.1.02 Crore p.a.