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Garware Marine Industries Ltd.

BSE: 509563 Sector: Others
NSE: N.A. ISIN Code: INE925D01014
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NSE 05:30 | 01 Jan Garware Marine Industries Ltd
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VOLUME 2000
52-Week high 6.10
52-Week low 3.20
P/E 110.00
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.30
CLOSE 3.30
VOLUME 2000
52-Week high 6.10
52-Week low 3.20
P/E 110.00
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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 2017.

3 Financial Summary:

Particulars Current Year 31/03/2017 Previous Year 31/03/2016
(Amt in Rs.) (Amt in Rs.)
Income from operations(Including other income) 10249012 19954412
Less: Expenses 14017250 19131922
Profit before Interest (3768238) 822490
Depreciation and Tax
Less: Interest and 514703 561199
Finance charges
Profit before (4282941) 261291
Depreciation and Tax
Less: Depreciation and 16032 16032
Amortization
Provision for Tax - -
Deferred Tax 800000 800000
Tax for earlier years - (560000)
Profit / Loss for the year (5098973) 5259
Add: Balance and loss brought forward from previous year (43147046) (43152305)
Available for Appropriation (48246019) (43147046)
Less: Transferred to General Reserve - -
Balance carried forward to Profit and Loss Account (48246019) (43147046)

Financial Highlights

Income from operations (including other income) for the year ended 31stMarch 2017 stood at Rs.10249012/- as against Rs.19954412/- for the previous yearended 31st March 2016.

The Net Loss for the year ended 31st March 2017 stood at Rs. 5098973 asagainst a profit of Rs. 5259/- for the previous year. The loss mainly arose as a resultof steep reduction in income from operations.

Operations

During the year under review your Company's main source of revenue was generatedfrom vessel repairs.

Future Outlook

The fortunes of the Company are solely dependent on repair of vessels in the Offshoreand Shipping sector.

Considering both these sectors have been going through difficult times with norecovery expected in the immediate future. The Company too will in all likelihood facetrying times in the near future.

The Company's management continues to try to identify new customers to provide servicesand though this has yielded some positive results in the past customers are reluctant tospend vast sums of monies in repairs especially since these revenues have been slashed tolevels of operating costs or even below. Lay up of vessels which has become more commonrecently is also adversely affecting the Company's revenues. The Company hopes that thesituation will improve as the offshore and shipping sectors improve.

Dividend

In view of the current losses and in an attempt to conserve resources for thefuture your Directors have not recommended any dividend for the financial year ended 31stMarch 2017.

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 not granted any loan not made anyinvestment nor has it given any guarantee u/s 186 of Companies Act 2013 and thus requireddetails 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
3 Mrs. Shefali S. Bajaj (nee Garware) (DIN: 00149511) Non-Executive – Non- Independent Director
3 Mr. Shyamsunder V. Atre (DIN: 01893024) Executive Director
4 Late Bhupendra M. Saraiya* (DIN: 00035002) Independent Director
5 Mr. Rajiv S. Khanna (DIN: 02855080) Independent Director
6 Mr. Sanjay V. Chinai (DIN: 00245418) Independent Director
7 Mr. Vikas D. Sadarangani** (DIN:07657018) Independent Director

*Expired on 17th January 2017. **Appointed as Additional Director(Independent Director) w.e.f. 26th November 2016. In accordance with theProvisions of Section 152 of the Companies Act 2013 and the Articles of Association ofthe Company Mrs. Shefali S. Bajaj Director retires by rotation at the forthcoming AnnualGeneral Meeting of the Company and being eligible offers herself for re-appointment. TheBoard of Directors recommends her re-appointment for the consideration of the Members ofthe Company at the ensuing Annual General Meeting of the Company. Mr. Shyamsunder V. Atrewas appointed as Executive Director w.e.f. 31st October 2013 for a period ofthree years. On the recommendation of the Nomination and Remuneration Committee the Boardof Directors at its meeting held on 04th November 2016 approved hisreappointment subject to the approval of the members of the Company as ExecutiveDirector for a period of two years with effect from 31st October 2016.Further the Board of Directors on the recommendation of the Nomination and RemunerationCommittee at its meeting held on 02nd August 2017 also approved the revisionin remuneration payable to Mr. Shyamsunder V. Atre w.e.f. 01st July 2017subject to approval of members.

Mr. Vikas D. Sadarangani was appointed as Additional Director (Independent Category) ofthe Company w.e.f. 26th November 2016 to hold office upto the date offorthcoming Annual General Meeting. In terms of Provisions of Section 149 of the CompaniesAct 2013 it is proposed to appoint Mr. Vikas D. Sadarangani as an Independent Directorfor a period of five years. Your Company has received a notice in writing from a memberproposing the candidature of Mr. Vikas D. Sadarangani as Independent Director of theCompany at the ensuing Annual General Meeting.

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 5 Board Meetings were duly convened and held on 30thMay 2016 08th July 2016 04th November 2016 26thNovember 2016 and 09th February 2017. The details of the said Board Meetingsforms part of the Corporate Governance 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

During the year Mrs. Vipulata S. Tandel was appointed as Chief Financial Officer ofthe Company w.e.f. 01st February 2017.

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 Late. Bhupendra M. Saraiya** Independent Director Member
3 Mr. Aditya A. Garware Non-Executive – Non-Independent Director Member
4 Mr. Vikas D. Sadarangani*** Independent Director Member

*Appointed as Chairman of the Committee w.e.f. 26th November 2016. **Expired on17thJanuary 2017. He was the Chairman of the Committee till 25th November 2016.***Appointed as Member of the Committee w.e.f. 09th February 2017.

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 relationto remuneration of Directors Key Managerial Personnel and Senior Management of theCompany. This Policy also lays down the criteria for selection and appointment of BoardMembers. The details of the Policy are available on the Company's websitewww.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) Inthe preparation of the Annual Accounts the applicable accounting standards have beenfollowed and that no material departures (save and except as stated in this Directors'Report) have been made from the same; (b) They have selected such Accounting Policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the State of Affairs of the Company at the end ofthe financial year and of the loss of the Company for the year ended on that date; (c)That they have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with provisions of the Companies Act 2013 for safeguarding theassets 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 downinternal financial controls to be followed and that such financial controls are adequateand were operating effectively; (f) They have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems are adequate and areoperating effectively.

Appointment of Statutory Auditors and their Report

Messrs. Raman S. Shah & Associates Chartered Accountants were appointed asStatutory Auditors of the Company by the Shareholders at the last Annual General Meetingheld on 30th September 2016 till the conclusion of the ensuing Annual General Meeting.

In compliance with the provisions of Companies Act 2013 the Company will appoint anAuditor in the Annual General Meeting who shall hold office till the subsequent fiveAnnual General Meetings. A transition period of 3 years w.e.f. 01st April 2014 was givento listed Companies to change the Auditors.

Messrs. Raman S. Shah & Associates Chartered Accountants will retire at theensuing Annual General Meeting and new Auditors need to be appointed at the ensuing AnnualGeneral Meeting for a period of 5 years which can be extended for a further term of 5years. Though the appointment is for 5 years the same needs to be ratified at eachAnnual General Meeting.

After studying profile of some Audit Firms the Board upon the recommendation of theAudit Committee and subject to approval of members has chosen to appoint Messrs. D.Kothary & Co. Chartered Accountants (Firm Registration No. 105335W) from theconclusion of ensuing Annual General Meeting until the conclusion of the 44th AnnualGeneral Meeting of the Company and has received eligibility certificate under Sections139 and 141 of the Companies Act 2013 and the Rules made thereunder. The appointment willbe ratified at each Annual General Meeting.

There are no Qualifications in the Auditors' Report.

Personnel

During the year due to recession in the offshore and shipping industry there was avery low demand in ship repair services which has affected adversely on thefinancial position of the Company. In order to save the cost and sustain the operationsthe remuneration of Executive Director was reduced by 42.50% w.e.f. 01st July2016 and the salary of all other employees was reduced (as per the structured salary slab)from 5% and 15% w.e.f. 1st June 2016.

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 Regulatories As reported in thepast Integrated Finance Company Limited (IFCL) had filed a case against the Company inChennai and the Company had filed a counter suit against IFCL.

The Madras High Court without warning passed an order against the Company for recoveryof Rs. 1.69 Crores and the interest thereon and execution order was placed before theBombay High Court. The Company approached the Madras High Court requesting forcondonation of delay as IFCL had surreptitiously procured the said order without allowingthe Company to defend itself. After hearing the matter through the Application filed bythe Company the Madras High Court on 04th April 2017 issued an Order allowing theCompany's application for condonation of delay subject to the Company depositing Rs.30Lakhs with the Court and paying costs of Rs.5000/- to IFCL. The Company has duly compliedwith the Order of Hon'ble Madras High Court.

As indicated above the Company had also filed a counter suit against IntegratedFinance Company Limited for loss of production of Rs. 1.93 Crores together with furtherinterest @ 18% p.a. The said suit though filed in Mumbai was subsequently transferred toChennai in the year 2013 and is pending before Madras High Court.

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 Party Transactions

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 Year2016-17. The Secretarial Audit Report for the year ended 31st March 2017 isenclosed as Annexure C to this Report. During the year under review the Company hascomplied with the provisions of the Act Rules 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 Yearended 31st March 2017 no complaint has been received by the Audit Committee fromDirector(s) or employee(s) of the Company.

Corporate Social Responsibility (CSR)

In view of the losses for the current and previous years the Company was not requiredto make any contribution towards CSR and thus the required details are "NotApplicable".

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: 02/08/2017 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 under first 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 the 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] Theratio of the remuneration of each Director to the median remuneration of the employees ofthe Company for the financial year 2016-2017:

Name of Directors Company Secretary & Chief Financial Officer Ratio of remuneration to median remuneration of Employees
Mr. Shyamsunder V. Atre – Executive Director 2.39:1
Ms. Pallavi P. Shedge – Company Secretary 1.67:1
Mrs. Vipulata S. Tandel – Chief Financial Officer 0.91:1

ii] The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year 2016-2017:

Name of Key Managerial Personnel: % increase in remuneration in the financial year 2016-17
Mr. Shyamsunder V. Atre – Executive Director -31.61%
Ms. Pallavi P. Shedge – Company Secretary -5.24%
Mrs. Vipulata S. Tandel – Chief Financial Officer Not Applicable*

*Appointed as CFO w.e.f. 01st February 2017.

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 2017: 11

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: Nil

• Average decrease in remuneration of KMPs: 15%

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

vi] Affirmation: The Company affirms remuneration is as per the Remuneration Policyof the Company.

vii] Details of top ten employees in terms of remuneration drawn during the financialyear 2016-17:

Sr. No. Name of Employee & Designation. Designation Gross Remuneration /Salary per annum as on 31/03/2017 Remark
1. Mr. Shyamsunder V. Atre* Executive Director - KMP 865104 -
2. Ms. Pallavi P. Shedge Company Secretary - KMP 605332 -
3. Mrs. Vipulata S. Tandel** Chief Financial Officer -KMP 54928 -
4. Mr. Akbar I. Sayyed Marine Hy. Fitter 424390 -
5. Mr.Murlidhar R. Sawant Marine Welder 431012 -
6. Mr. John B. Pariera Marine Welder 433262 -
7. Mr. Mayur S. Kochare Purchase Officer 374867 -
8. Mrs. Swati Y. Jangle Comp. Operator/ Assistant 322336 -
9. Mrs. Deepa D. Khot Accounts Assistant 313192 -
10. Mr. Suyog A. Vaity Accounts Officer 227970 -

* During the year due to a severe downturn in the operations of the Company theremuneration of Executive Director and the salary of all other employees including CompanySecretary was revised (downward). **Appointed as Chief Financial Officer w.e.f.01.02.2017. Earlier she was working as Jr. Accounts Officer. There is no change in thesalary of Mrs. Tandel after her appointment as CFO. viii] Statement of particulars ofemployees pursuant to the provisions of Section 197(12) of Companies Act 1956 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014: There isno employee whose salary exceeded Rs.8.50 Lakhs per month or Rs.1.02 Crore p.a.