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GI Engineering Solutions Ltd.

BSE: 533048 Sector: IT
NSE: GISOLUTION ISIN Code: INE065J01016
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OPEN 6.17
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VOLUME 921
52-Week high 6.17
52-Week low 2.69
P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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GI Engineering Solutions Ltd. (GISOLUTION) - Director Report

Company director report

Dear Shareholders

The Directors present the Fifteenth Annual Report together with the Audited Statementof Accounts for the financial year ended March 31 2021.

1. FINANCIAL RESULTS

Summary of the Standalone performance of your Company for the year under review istabulated below:

(Rs. in Lakhs)

Standalone
Particulars March 31 2021 March 31 2020
Income 20.22 11.74
Operating Profit/ (Loss) before Depreciation Interest and Taxes (19.88) (3.61)
Profit/(Loss) before tax (244.19) (3.59)
Less: Current Tax -
Tax adjustment of earlier years 8.00
Profit (Loss) After Tax (252.19) (3.59)

2. TRANSFER TO RESERVE

The Company has not transferred any amount to General Reserve.

3. DIVIDEND

Your Directors have not recommended any dividend for the financial year under review.

4. SHARE CAPITAL

During the financial year 2020-21 the Authorised Share

Capital of the Company remains unchanged. During the financial year the Company hasnot issued any shares or equity shares with differential rights as to dividend voting orotherwise sweat equity shares or any equity shares under Employee Stock Option Scheme orother securities during the year under review.

The issued subscribed and paid-up equity share capital as on March 31 2021 was Rs.86118780/- divided into 8611878 equity shares of Rs. 10/- each.

The equity shares of the Company are listed on Bombay Stock Exchange (BSE) and NationalStock Exchange (NSE).

5. OPERATIONS

The Company continues to be engaged in the activities pertaining to InformationTechnology based Engineering Services and other related services. There is no change ofnature of business of the Company during the financial year 2020-21.

During the year under review your Company achieved a total income of Rs. 20.22 Lakhsas compared to Rs. 11.74 Lakhs in the previous financial year. The Company incurred lossafter tax of Rs. 252.19 Lakhs for the year compared to the loss after tax of Rs. 3.59Lakhs for the previous year.

Management is evaluating various propositions to improve the financial situation and ishopeful of arriving at some conclusion soon.

6. DEPOSITS

Your Company has neither invited nor accepted any deposits within the meaning ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014.

7. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Details of Loans Guarantees and Investments have been disclosed in the notes tofinancial statements.

8. SUBSIDIARY & ASSOCIATES COMPANY

During the year under review your Company did not have any subsidiary associate andjoint venture company.

9. WEB ADDRESS FOR ANNUAL RETURN

Pursuant to Section 92(3) Section 134 (3) (a) of the Companies Act 2013 the Companyhas placed copy of Annual Return as on 31st March 2021 as prescribed in FormMGT-7 of the Companies (Management and Administration) Rules 2014 on its website at http://www.giesl.in/investors.html.By virtue of amendment to Section 92(3) of the Companies Act 2013 the Company is notrequired to provide extract of Annual Return (Form MGT-9) as part of the Board's report.

10. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of the financial conditions future outlook andresults of the operations of the Company for the year under the review as stipulatedunder Regulation 34(2)(e) of SEBI (LODR) Regulations 2015 is given under separate sectionof this Annual Report and forms part of the Directors' Report.

11. CORPORATE GOVERNANCE

As per regulation 15(2) of the Listing Regulation the Compliance with the CorporateGovernance provisions shall not apply to listed entity having paid up equity share capitalnot exceeding rupees ten crore and net worth not exceeding rupees twenty five crore as onthe last day of the previous financial year. Therefore the provisions of CorporateGovernance as specified in Regulations 17 17[A] 18 19 20 21 22 23 2424[A] 2526 27 and clauses (b) to (i) and (t) of sub-regulation (2) of regulation 46 and para C Dand E of Schedule V of SEBI (LODR) Regulation 2015 are not applicable to the Company forthe financial year ended March 31 2021. However your Company has complied with therelevant provision of the Companies Act 2013 and rules thereunder with regards toformation of committees.

12. WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has a Whistleblower Policy and has the necessary vigil mechanism to dealwith unethical behavior. This Policy is available on the Company's website onhttps://www.giesl . in /investors.html

13. DIRECTORS & KEY MANAGERIAL PERSONNEL DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act 2013 andArticles of Association of the Company Mrs. Saroja Malik Director of the Company retiresby rotation and being eligible offers herself for reappointment at the ensuing AnnualGeneral Meeting. Pursuant to Regulation 36(3) of SEBI (LODR) Regulations 2015 briefresume of Mrs. Saroja Malik nature of her expertise in specific functional area and namesof Companies in which she is a Director and Member/Chairperson of Committees of Board areprovided in the Notice forming part of the Annual Report.

Declarations by Independent Directors

Pursuant to provisions of Section 149 of the Act and Regulation 25 of the ListingRegulations the Company has received declarations from each of the Independent Directorsconfirming that they meet with the criteria of independence as laid down in Section 149(6)of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the ListingRegulations and have also complied with the Code for Independent Directors as prescribedin Schedule IV of the Act. There has been no change in the circumstances affecting theirstatus as Independent Directors of the Company.

None of the Directors disqualifies for appointment/reappointment under Section 164 ofthe Companies Act 2013.

There has been no change other than above in the Directors and the Key ManagerialPersonnel during the financial year 2020-21.

Appointment and Resignation of Key Managerial Personnel

Ms. Astrid Lobo was appointed as the Company Secretary and was designated as the KeyManagerial Personnel with effect from February 12 2020 and further she was designated asChief Financial Officer with effect from February 03 2021. She resigned from the closureof business hours of May 31 2021 Ms. Pranjali Joshi was appointed as the CompanySecretary and Compliance officer and was designated as the Key Managerial Personnel of theCompany with effect from July 30 2021.

14. PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the performance evaluation of the Boardand Committees was carried out by the Board and Nomination & Remuneration Committee inaccordance with the Board Performance Evaluation Policy of the Company through astructured evaluation process covering various aspects of the Boards functioning such asdiversity in composition of the Board & Committees its roles & responsibilitiesexperience & competencies performance of specific/ general duties & obligationsetc.

The performance evaluation of the Chairman was carried on the grounds of EffectivenessLeadership Knowledge Competency and on the basis of performance of the Company. TheIndependent Directors were evaluated on additional criteria of independence andapplicability of independent views and judgment in the decision-making process of allmatters considered important.

The performance evaluation of Non-Independent Directors was carried out by IndependentDirectors at a separately convened meeting.

15. AUDITORS

a) STATUTORY AUDITORS

Sachin Phadke & Associates Chartered Accountants Mumbai (Firm Registration No.133898W) were appointed as the Statutory Auditor of the Company for a period of 5consecutive years at the 11th Annual General Meeting held on 28thSeptember 2017 until the conclusion of 16th Annual General Meeting tobe held in FY 2022. The Company has received written consent and certificate ofeligibility from the Statutory Auditors of the Company under Section 139(1) of the Act andrules framed thereunder.

b) AUDITORS' REPORT

The statutory auditors' report and secretarial auditors' report for the financial year2020-21 do not contain any qualifications reservations or adverse remarks. The auditors'report is attached to the financial statements and secretarial auditors' report as ‘AnnexureA'. There are no frauds reported by the auditors of the Company under sub section 12of section 143 of the Companies Act 2013 during the financial year under review.

Provisions of Section 148 of the Companies Act 2013 regarding maintenance of costrecords and audit thereof is not applicable to your Company.

c) INTERNAL CONTROLS SYSTEM AND THEIR ADEQUACY

The Board is responsible for establishing and maintaining adequate internal financialcontrol as per Section 134 of the Act. Your Company's internal control systems andprocesses commensurate with scale of operations of the Business.

Periodical reviews are carried out by the Internal Auditors and are subject toassessment and trial to provide reasonable assurance as to reliable information &compliance. The Internal Audit Report submitted by the Internal Auditors M/s. AkshayTambe & Co. Chartered Accountants Mumbai (Firm Registration No. 139942W) for the yearunder review is apprised by the Audit Committee and noted by the Board.

16. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is been annexed to this report as ‘AnnexureB'.

None of the employees of the Company are being paid remuneration exceeding theprescribed limit under the said provisions and rules.

17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information on technology absorption and foreign exchange earnings and outgo asrequired pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed to this Report as ‘Annexure C'.

18. MEETINGS

A. BOARD MEETINGS

The meetings of the Board of Directors are scheduled well in advance and generally heldat the registered office of the Company. MCA vide its General Circular no. 11/2020 datedMarch 24 2020 provided a one time relaxation with respect to the gap between twoconsecutive meetings of the Board extended to 180 days till the quarter ended 30thSeptember 2020 instead of 120 days as required in the Act. The Board meets at least oncea quarter to review the quarterly results and other items of the Agenda. During thefinancial year ended on March 31 2021 five (5) Board

Meetings were held. The dates on which the Board Meetings were held are as follows:

1. June 29 2020

2. July 31 2020

3. August 28 2020

4. November 13 2020

5. February 03 2021

The number of Board Meetings and the attendance of Directors as well as theirattendance at the last AGM held on September 28 2020 are as mentioned below :-

Name of Directors Designation No. of Board Meetings attended out of five Meetings held Attendance at last AGM
Mr. Sajid Malik Managing Director 5 Yes
Mrs. Saroja Malik Non-Executive Director 5 Yes
Mr. Ganesh Acharya Non-Executive Independent Director 4 Yes
Mr. Manish Patel Non-Executive Independent Director 5 Yes

B. DISCLOSURE OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS:

I. AUDIT COMMITTEE

The Company has constituted a well qualified and

Independent Audit Committee as required under Section 177 of the Companies Act 2013 asalso in fulfillment of the requirements of Regulations 18 of the SEBI (LODR) Regulations2015. The primary objective of the Audit Committee is to monitor and provide effectivesupervision of the management's financial reporting process with a view to ensureaccurate timely and proper disclosure and transparency integrity and quality offinancial reporting.

Mr. Ganesh Acharya Chairman of the audit committee is a professional and an industryexpert with experience of over two and half decades in financial matters.

The terms of reference of the Audit Committee are broadly as under:

Oversight of the company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statements are correct sufficient andcredible.

Recommending appointment or removal of the Auditors fixation of audit fees approvalof payment for any other services rendered by the Auditors.

Reviewing with the management the quarterly half-yearly and annual financialstatements before submission to the Board for approval with particular reference to:

a) Matters required to be included in the Director's Responsibility Statement and theBoard's report in terms of section 134(3)(c) of the Companies Act 2013.

b) Changes if any in accounting policies and practices and reasons for the same.

c) Major accounting entries involving estimates based on the exercise of judgment bymanagement.

d) Significant adjustments made if any in the financial statements arising out ofaudit findings.

e) Compliance with the Companies Act 2013 SEBI (LODR) Regulations 2015 and otherlegal requirements relating to financial statements.

f) Disclosure of related party transactions if any.

g) Qualifications if any in the draft audit report

Reviewing with the management quarterly financial statements before its submission tothe board for approval.

Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document / prospectus /notice and the report submitted by the monitoring agency monitoring the utilisation ofproceeds of a public or rights issue and making appropriate recommendations to the boardto take up steps in this matter;

Review and monitor the Auditors' independence and performance and effectiveness ofaudit processes. modification Approval or any subsequent of transactions of the companywith related parties.

Scrutiny of inter-corporate loans and investment if any.

Valuation of undertakings or assets of the company wherever it is necessary.

Evaluation of internal financial controls and risk management system.

Reviewing with the management performance of

Statutory and Internal Auditors adequacy of the internal control system.

Reviewing the adequacy of internal audit function including the staffing and seniorityof the official heading the department reporting structure coverage and frequency ofinternal audit.

Discussing with Internal Auditors any significant findings and follow up there on.

Reviewing the findings of any internal investigations by the Internal Auditors intomatters where there is suspected fraud or irregularity if any or a failure of internalcontrol systems of a material nature and reporting the matter to the Board.

Discussing with Statutory Auditors about the nature and scope of audit and ascertainpost audit any area of concern.

Reviewing reasons for defaults in the payment to the shareholders (in case ofnon-payment of declared dividends) and creditors if any.

Reviewing the functioning of the Whistle Blower mechanism.

Reviewing the utilization of loans and/ or advances from/investment by the holdingcompany in the subsidiary exceeding rupees 100 crore or 10% of the asset size of thesubsidiary whichever is lower including existing loans / advances / investments.

Consider and comment on rationale cost-benefits and impact of schemes involvingmerger demerger amalgamation etc. on the listed entity and its shareholders

Review the following:

a) Management discussion and analysis of financial condition and results of operations;

b) Statement of significant related party transactions;

c) Management letters / letters of internal control weaknesses if any issued by theStatutory Auditors;

d) Internal Audit reports relating to internal control weaknesses if any;

e) The appointment removal and terms of remuneration of the Internal Auditor

f) Statement of deviations:

i) quarterly statement of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1) of SEBI (LODR)Regulations 2015.

ii) annual statement of funds utilized for purposes other than those stated in theoffer document/prospectus/notice in terms of Regulation 32(7) of SEBI (LODR) Regulations2015.

Approval of appointment of CFO or any other person heading the finance function ordischarging that function after assessing the qualifications experience and backgroundetc. of the candidate.

Such other functions as may be assigned by the

Board of Directors from time to time or as may be stipulated under any law rule orregulation including the Listing Regulations and the Companies Act 2013.

During the year under review four (4) Audit Committee Meetings were held. The dates onwhich the Audit Committee Meetings were held are as follows:

1. June 29 2020

2. July 31 2020

3. November 13 2020

4. February 03 2021

The composition of Audit Committee and details of meetings attended by the Membersthereof are as follows:

Name of Directors Status No. of Meetings Attended
Mr. Ganesh Acharya Chairman 4
Mrs. Saroja Malik Member 4
Mr. Manish Patel Member 4

The Company Secretary acts as the Secretary to the Committee. The Chief FinancialOfficer and representative of Statutory Auditor of the Company were invitees for all theaudit committee meetings. The Chairman of the Audit Committee Mr. Ganesh Acharya waspresent at the Fourteenth Annual General Meeting held on September 28 2020 to answer theshareholders' queries.

II. STAKEHOLDERS' RELATIONSHIP COMMITTEE

The composition of the Stakeholders Relationship Committee is in compliance with theprovisions of Section 178(5) of the Companies Act 2013 and Regulation 20 of the SEBI(LODR) Regulations 2015. The terms of reference of the Stakeholders Relations Committeeare broadly as under:

Resolving the grievances of the security holders of the listed entity includingcomplaints related to transfer/transmission of shares non-receipt of annual reportnon-receipt of declared dividends issue of new/duplicate certificates general meetingsetc.

Review of measures taken for effective exercise of voting rights by shareholders.

Review of adherence to the service standards adopted by the listed entity in respect ofvarious services being rendered by the Registrar & Share Transfer Agent.

Review of the various measures and initiatives taken by the listed entity for reducingthe quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annualreports/statutory notices by the shareholders of the company.

The Committee also reviews matters relating to unclaimed equity shares and dividendtransferred to Investor Education and Protection Fund (IEPF) pursuant to the IEPF Rules.

To redress investor grievances the Company has a dedicated E-mail IDinvestors@giesl.in to which shareholders may send complaints/grievances. Details of theinvestor's complaints received and redressed during the year 2020-21 are as follows:

No. of Complaints received during the year No. of Complaints solved to the satisfaction of investors No. of pending complaints
Nil Nil Nil

During the financial year 2020-21 four (4) meetings of the said committee were heldare as follows:

1. June 29 2020

2. July 31 2020

3. November 13 2020

4. February 03 2021

The composition of the Stakeholders' Relationship Committee and details of meetingsattended by the members thereof in 2020-21 were as follows:

Name of Directors Status No. of Meetings Attended
Mrs. Saroja Malik Chairperson 4
Mr. Ganesh Acharya Member 4
Mr. Manish Patel Member 4

The Chairperson of the Stakeholders' Relationship Committee Mrs. Saroja Malik waspresent at the Fourteenth Annual General Meeting of the Company held on September 282020.

III. NOMINATION & REMUNERATION COMMITTEE

The Nomination & Remuneration Committee comprises of three members namely Mr.Ganesh Acharya as a Chairman Mrs. Saroja Malik and Mr. Manish Patel as members of theCommittee. The Committee comprises of majority of Independent Directors including itsChairman. The Composition and Role of the Committee is in conformity with provisions ofSection 178 of the Act and Regulation 19 of the SEBI Listing Regulations Major Terms ofreference:

To review and recommend the structure size and composition of the Board of Directorsand Committees;

To formulate criterias for determining Qualification positive attribute andindependence of a Director and recommend to the Board a policy relating to theremuneration of the directors key managerial personnel (KMP) and other employees;

Formulation of criteria for performance evaluation of Independent Directors and theBoard;

Devising a policy on Board diversity;

Identifying persons who are qualified to become directors and who may be appointed insenior management in accordance with the criteria laid down and recommend to the Boardtheir appointment and removal;

To specify the manner for effective evaluation of performance of Board its committeesand individual directors to be carried out either by the Board set appropriateperformance benchmarks;

To decide whether to extend or continue the term of appointment of the independentdirector on the basis of the report of performance evaluation of independent directors

Recommend to the board all remuneration in whatever form payable to seniormanagement;

To ensure that the level and composition of remuneration is reasonable and sufficientto attract retain and motivate directors;

Any other related activities as the Committee or the

Board deems necessary or appropriate.

During the year under review two (2) meetings were held on: August 28 2020 andFebruary 03 2021 The Composition of Nomination & Remuneration Committee and detailsof meeting attended by the Members thereof are as follows:

Name of Directors Status No. of Meetings Attended
Mr. Ganesh Acharya Chairman 2
Mrs. Saroja Malik Member 2
Mr. Manish Patel Member 2

The Chairman of the Nomination & Remuneration Committee Mr. Ganesh Acharya waspresent at the Fourteenth Annual General Meeting of the Company held on September 282020.

19. NOMINATION AND REMUNERATION POLICY

The Board has in accordance with the provisions of subsection (3) of Section 178 of theCompanies Act 2013 and as per the Listing regulations formulated the policy setting outthe criteria for determining qualifications positive attributes independence of aDirector and policy relating to remuneration for Directors Key Managerial Personnel andother employees which is also available on the Company's website at www.giesl .in.

20. CORPORATE SOCIAL RESPONSIBILITY

Provisions of Section 135 of the Companies Act 2013 read with applicable Rules notapplicable during the year under review.

21. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

22. DISCLOSURE REGARDING INTERNAL COMPLAINTS COMMITTEE

Your company is not required to constitute Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013as there are less than 10 employees in the company.

23. RISK MANAGEMENT

Internal financial control system and timely review of external operational and otherrisks enables the Board of your company towards identification and mitigation of therisks.. The Company's approach to mitigate business risks is through periodic review andreporting mechanism to the Audit Committee and the Board and thereby maximizing returnsand minimizing risks

24. MATERIAL CHANGES IF ANY AFFECTING THE COMPANY:

There have been no material changes and commitments which affect the financialposition of the Company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report.

25. SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATORS/COURTS IF ANY

There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of your Company and its future operations.

26. RELATED PARTY TRANSACTIONS

All related party transactions during the year under review were on arm's length basisin the ordinary course of business and in compliance with the Policy on Related PartyTransactions of the Company. During the year the Company has not entered into anycontracts / arrangements / transactions with related parties which could be consideredmaterial in accordance with the policy of the Company on materiality of related partytransactions.

The provisions of Section 188 of the Companies Act 2013 and/or Regulation 23 of theSEBI (LODR) Regulations 2015 were duly complied. The Related Party Transactions areplaced before the Audit Committee and the Board for their approval on quarterly basis.

The disclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC - 2 is not applicable to your Company. The policy onRelated Party Transactions as approved by the Board is uploaded on the Company's websitewww.giesl.in. The disclosure on Related Party Transactions is made in the Notes toFinancial Statement of the Company.

27. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Companies Act 2013:

a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there have are no material departures;

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 as at 31st March 2021 and of the profitor loss of the Company for that period;

c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the 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 by the Company andthat such internal financial controls are adequate and were operating effectively; and

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

28. ACKNOWLEDGEMENT

Your Directors acknowledges the efforts of its employees at all levels for theircontinued hardwork dedication and commitment towards the growth of the Company.

The Directors also places on record continued support of its investors clientsvendors bankers and financial institutions during the year under review and look forwardfor the same in the years to come.

The Company also expresses its sincere gratitude to the Stock Exchanges RegulatoryAuthorities SEEPZ (SEZ) Authorities and all the government agencies for the continuedsupport extended during the year 2020-21.

For and on behalf of the Board of Directors
SAJID MALIK
MANAGING DIRECTOR
(DIN: 00400366)
Place : Mumbai
Dated : September 01 2021

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