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GKW Ltd.

BSE: 504704 Sector: Others
NSE: GKWLIMITED ISIN Code: INE528A01020
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GKW Ltd. (GKWLIMITED) - Director Report

Company director report

TO THE SHAREHOLDERS

1. The Directors have pleasure in presenting their Annual Report together with theaudited statement of accounts of the Company for the year ended 31March 2021.

2. FINANCIAL RESULTS

The results for the year under review are given below :

Rs. in lakhs

Particulars 2020-2021 2019-2020
Total Income 4060.14 1146.21
Profit before depreciation and finance cost 3276.08 282.78
Depreciation and Amortization Expense 102.50 109.29
Finance Cost 9.24 19.77
Profit before Tax 3164.34 153.72
Tax Expenses 437.29 108.19
Profit after tax and before Other
Comprehensive Income 2727.05 261.91
Other Comprehensive Income (net of tax) for the year 15402.03 (12855.66)
Total Comprehensive Income for the year 18129.08 (12593.75)

During the year under review total income increased to Rs. 4060.14 lakhs as againstRs. 1146.21 lakhs in the previous year. Profit before tax at Rs. 3164.34 lakhs was higheras compared to the previous year mainly on account of profit on sale of mutual funds ofRs. 1470.97 lakhs Rs. 999.03 lakhs due to mark to market valuation of investments inmutual funds and bonds and interest income of Rs. 291.33 lakhs. However these gains werepartially offset by decrease in dividend income from equity and mutual funds

A significant rise in the value of investment held by the company as long terminvestment resulted in unrealized valuation gain of Rs. 15390 lakhs reflected in Other

Comprehensive Income compared to a loss of Rs. 12786 lakhs in the previous year.

3. TRANSFER TO RESERVES

No amount has been proposed to be transferred to the reserves for the year underreview.

4. DIVIDEND

No dividend has been recommended for the year under review.

5. MANAGEMENT DISCUSSION AND ANALYSIS

5.1 Industry Structure and Developments & Segment-wise Performance

(a) Warehousing business:

During the year under review the Company's principal business activity viz.warehousing business experienced slowdown in growth due to sluggishness in the country'soverall economic environment in the year under review. Although new leases resulted inlease rentals of Rs. 33.34 lakhs vacation of space by certain lessees during the yearunder review and expiration of a major lease in the previous year led to net reduction ofRs. 130.21 lakhs. In order to facilitate the implementation of new leases entered intoduring the year the Company incurred capital expenditure of Rs. 66.29 lakhs forrefurbishing/re-construction of covered sheds. The Indian economic activities have shownresilience again` slowdown in demand of almost all the sectors of industries particularlyin small and medium enterprises due to COVID -19 outbreak and has started recovering fromthe second half of the fiscal year with swift introduction of comprehensive economicpackages and the implementation of nationwide vaccination programe to combat the pandemic.However the second wave of the pandemic with new variants has already made serious healthemergency issues across the country and again put the economic activities into a newchallenge due to partial shutdown. The demand for warehousing activities will depend to alarge extent on how quickly the Government control the second wave of COVID pandemic.

(b) Investment and Treasury :

Investment and Treasury segment includes profit on sale of mutual funds of Rs. 1470.97lakhs dividend and interest income of Rs. 560.75 lakhs and re measurement of mutualfunds/bonds at fair value in accordance with Ind AS of Rs. 999.03 lakhs generated duringthe year under review. As stated above there was a decrease in dividend income fromequity investment amounting to Rs. 1480 lakhs.

Despite the impact of COVID-19 pandemic on the economy in February – March 2020the Indian Stock Market staged a recovery hitting record highs multiple times during theyear under review. With the timely introduction of relief packages by the IndianGovernment with lesser restriction and significant progress in development of indigenousfacilities in manufacturing of the coronavirus vaccine the sign of recovery of IndianEconomy was visible from the second half of the year under review.

However the unabated rise in coronavirus with new variants across the world iscreating a possibility of partial lock down which may slowdown the rate of recovery ofeconomy. Stock market remains extremely volatile. With the commencement of the successfulvaccination programs and well preparedness learnt from the previous outbreak it is hopedthat the pandemic of second wave can be overcome gradually.

(c) Other Comprehensive Income:

As already stated above substantial fluctuation in Other Comprehensive Income due tofavorable fluctuation in market price of equity shares which resulted in further notionalgain of Rs. 15390 lakhs as compared to notional loss of Rs. 12786 lakhs in the previousyear.

5.2 Discussions on Financial Performance with respect to Operational Performance

a) Total income was higher by Rs. 2913.93 lakhs compared to the previous year mainly onaccount of increase in profit on sale of mutual funds of Rs. 1473.82 lakhs notional gainof Rs. 3103.41 lakhs arising on re-measurement as explained above increase in interestincome of Rs. 111.24 lakhs and other income of Rs. 97.27 lakhs including profit on sale ofland at Pune of Rs. 36.12 lakhs which was offset by lower rental income /power connectionfees from warehousing operation of Rs. 141.46 lakhs and dividend income from investmentsof Rs. 1730.35 lakhs.

b) Depreciation and amortization expenses and finance cost include amortization chargeon right of use assets of Rs. 102.50 lakhs and interest on lease liability as mandated byInd AS 116 Lease /Other liabilities Rs. 9.24 lakhs.

c) As in the previous year the Company had no borrowings as on 31 March 2021.

d) During the year under review your Company invested a sum of Rs. 5059.39 lakhsmainly by redeploying Rs. 4816.91 lakhs on redemption of mutual funds and Rs. 242.48 lakhsfrom operating cash flows.

e) Capital Expenditure for the year amounted to Rs. 232.13 lakhs (2019-20 - Rs. 375lakhs) and value of assets put into use during the year amounted to Rs. 178.36 lakhs(2019-20 - Rs. 237 lakhs).

5.3 Opportunities and Threats

Warehousing business provides opportunities for a sustainable growth-oriented businessmodel for the Company. Your Company has actively pursued all opportunities in this segmentand will continue to do so.

However the unprecedented COVID 19 pandemics has created a major upheaval in theeconomy and all businesses including the Company's warehousing business are trying to copewith this phenomenon both in the short and medium term.

5.4 Outlook

This pandemic has made the future outlook somewhat uncertain both for the warehousingand Investment segments of the Company in the short term. We can only hope that themeasures taken by the government and the entrepreneurial talent in our country will beable to overcome this challenge in the shortest possible time.

5.5 Risks and Concerns

Your Directors recognize that there are uncertainties and risks attached to anybusiness. The risks could be external internal or a combination of both. External riskscan be intensification of competition technological obsolescence changes in Governmentpolicy with regard to taxes and levies or economic slowdown adversely impacting demand andprofitability. In an increasingly globalised economy world economic trends would alsoimpact business of the Company.

Such risks will be continuously monitored and appropriate action will be taken by theCompany to minimize the same. Internal risks comprise operating risks financial risks andbusiness risk. The Company will take effective steps to deal with such risks. Eachbusiness segment has been informed to identify and report quarterly to the next higherreporting level on any major risks as perceived by them whether they be internal orexternal risks and simultaneously take immediate steps to minimize the impact thereof. Allaspects of the warehousing and treasury operations are being closely monitored to identifypotential risks at an early stage in order to ensure that appropriate risk mitigationmeasures are put in place

5.6 Internal Control Systems and Their Adequacy

The Company has adequate internal control system to ensure protection of assets againstloss from unauthorized use or disposal proper maintenance of accounting records andadherence to Company's policies and procedures. The Company has appointed an InternalAuditor to conduct independent audits and submit periodical reports. An Audit Committee ofthe Board of Directors reviews the Internal Audit reports annual financial statements andinternal control systems to ensure their effectiveness and adequacy. The Committee alsointeracts with the Internal/ Statutory Auditors from time to time. Apart from this auditreports and follow-up actions are periodically reviewed by the top management and remedialactions taken.

5.7 Material Developments in Human Resources/Industrial Relation Front includingNumber of People Employed

During the year under review industrial relations within the Company continued to bestable. The total number of permanent employees was 10 as on 31 March 2021.

6. SUBSIDIARY COMPANY

The Company does not have any subsidiary.

7. INFORMATION PURSUANT TO SECTION 134

7.1 Annual Return in Form MGT 9 shall be available on the website of the Company at www.gkwltd.com.

7.2 All the Independent Directors have submitted a statement under Sub-section (6) ofSection 149 of the Companies Act 2013

7.3 Particulars as prescribed under Section 197(12) and Rule 5(1) (2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedhereto as Annexure I.

7.4 There are no qualifications in the Auditor's Report and the Secretarial AuditReport calling for any comments or explanations by the Board.

7.5 No frauds have been reported during the financial year under review by the Auditorsof the Company.

7.6. The particulars of Investments under section 186 of the Companies Act 2013 as at31 March 2021 are provided in Note no. 6 and 10 to the Financial Statements.

7.7. The Company had contracts or arrangements with related parties during the yearunder review and are appended hereto as Annexure II. All Related Party Transactionsentered into during FY 2020-21 were on arm's length basis and also in the ordinary courseof business. Please also refer to Note no. 41 of the Financial Statements.

7.8 Conservation of Energy

The Company is engaged in warehousing activity and is making judicious use of energyefficient devices wherever possible.

7.9 Research & Development and Technology Absorption and Innovation The nature ofbusiness activity viz. warehousing business and investment & treasury operationscarried on by the Company does not have scope for any Research Development TechnologyAbsorption and Innovation. However latest developments in materials and processespertaining to warehousing activity are constantly monitored.

7.10 Foreign Exchange Earnings and Outgo

Earnings in foreign exchange during the year NIL (2019-2020 - NIL) and out-go was NIL(2019-2020 – NIL).

7.11. Evaluation of Board and Directors' Performance Formal annual evaluation has beenmade by the Board of its own performance and that of its Committee Members individualdirectors and Chairman on the basis of criteria approved by the Nomination andRemuneration Committee (NRC)/Board. Each Independent Director being evaluated did notparticipate in the meeting during the discussions on his/her evaluation.

8 DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134(5) of the Companies Act 2013 the Directorshereby state that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had 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 the end of the financial year and ofthe profit and loss of the company for that

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financialcontrols to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively;

9 FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors were fully briefed and familiarized with the operations ofthe Company its business mode and steps envisaged to insulate the Company from the impactof business cycles.

10. DIRECTORS

a) Mr. Krishna Kumar Bangur Mr. Kishor Shah Mr. Mohit Bhuteria and Mr. Shiva Balanwere appointed as Additional Directors on the Board of the Company on 23 September 2020and hold office up to the date of the ensuing Annual General Meeting. Further Mr. KishorShah and Mr. Mohit Bhuteria were appointed as Independent Directors on the Board of theCompany on 23 September 2020 for a period of 5 (Five) consecutive years by the Board ofDirectors subject to the approval of the shareholders in 91st Annual GeneralMeeting.

b) Mr. Jemi Dorabji Curravala Non-Executive Chairman of the Company retired on 23September 2020. Subsequently Mr. Krishna Kumar Bangur was designated as Chairman(Non-Executive) of the Company.

c) Mr. Gopal Srinivasan Non-Executive Director of the Company ceased to be theDirector of the Company upon the conclusion of the Annual General Meeting held on 23September 2020.

d) Mr. P. S. Lodha and Mr. M. L. Lahoti Independent Directors had resigned from theBoard of Directors on 23 September 2020 due to advanced age.

e) Ms. Kusum Dadoo Independent Director had resigned from the Board of Directors on 10February 2021 due to preoccupation and work pressure.

f) Ms. Rusha Mitra has been appointed as an Additional Director on the Board of theCompany on 11 February 2021 and hold office up to the date of ensuing Annual GeneralMeeting. Further Ms. Rusha Mitra has been appointed as Independent Directors on the Boardof the Company on 11 February 2021 for a period of 5(Five) consecutive years by the Boardof Directors subject to the approval of the shareholders in 91st Annual General Meeting.

g) Mr. N. K. Navalakha Independent Director had resigned from the Board of Directorson 31 March 2021 due to preoccupation and health issues.

h) The Board on the recommendation of Nomination and Remuneration Committee appointedMr. Amitabha Chakrabarti Manager of the Company as

(a) an Additional Director of the company to hold office from 1 April 2021 up to thedate of the ensuing Annual General Meeting

(b) ‘Whole-time Director' of the Company for a period of one year from 1 April2021 to 31 March 2022 pursuant to the provision of Sections 196197198 203(1) andSchedule V of the Companies Act 2013 subject to the approval of the members in theensuing Annual General Meeting.

11. INDEPENDENT DIRECTORS

As on 31 March 2021 following are the Independent Directors on the Board of yourCompany: 1 Mr. Kishor Shah 2 Mr. Mohit Bhuteria 3 Ms. Rusha Mitra

12. STATEMENT OF THE BOARD REGARDING

INDEPENDENT DIRECTORS

In compliance with the Rule 8 in sub rule 5(iiia) of the Companies (Accounts)Rules 2014 the Board of Directors opined that the Independent Directors appointed duringthe year possess the integrity expertise and experience including their proficiency onthe Board.

13. KEY MANAGERIAL PERSONNEL

Mr. Amitabha Chakrabarti has been appointed as Whole-time Director (designated asExecutive Director) w.e.f. 1 April 2021. He continues to act as the Chief FinancialOfficer of the Company. Mr. Chakrabarti was Manager of the Company up to 31 March 2021.Mr. J. N. Ghosh had resigned from the Company Secretary of the Company w.e.f. 23 December2020 and Mr. Sudhir Kumar Banthiya has been appointed as Company Secretary of the Companyw.e.f. 1 January 2021.

14. AUDITORS

In the 87th Annual General Meeting held on 2 August 2017 M/S Haribhakti& Co. LLP Chartered Accountants was appointed as Statutory Auditors of the Companyfor a period of 5 (five) yearsth Annual General Meeting until the conclusion of92nd Annual General Meeting. The said auditors continue to be eligible asStatutory Auditors of the Company.

15. AUDIT COMMITTEE

The composition of the Audit Committee meets the requirements as per Section 177 of theCompanies Act 2013 and as is detailed in the Corporate Governance Report forming part ofthis Annual Report.

All recommendations made by the Audit Committee during the FY 2020-21 were accepted bythe Board of Directors of the Company.

16. SECRETARIAL AUDIT AND APPOINTMENT OF THE SECRETARIAL AUDITOR

The Board of Directors had appointed CS Arup Kumar Roy Practicing Company Secretary toconduct Secretarial Audit. The Secretarial Audit Report for the year under review isappended hereto as Annexure III. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark

17. APPLICABILITY OF SECRETARIAL STANDARDS

The Company has complied with applicable Secretarial Standards of the Institute ofCompany Secretaries of India

18. PLACING OF ANNUAL RETURN ON THE WEBSITE OF THE COMPANY

The Company has placed its Annual Return on the Website of the Company at www.gkwltd.com.

19. COST AUDITORS

Provisions with regard to the Cost Audit are not applicable to the Company.

20. FIXED DEPOSITS

The Company has not accepted any deposits from the public and as such there are nooutstanding deposits in terms of the Companies (Acceptance of Deposits) Rules 2014.

21. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Mr. J. N. Ghosh ceases to be the Nodal Officer and Company Secretary of the Companyw.e.f. 23 December 2020 and Mr. Sudhir Kumar Banthiya has been appointed as NodalOfficer of the Company w.e.f. 1 January 2021. The details of Nodal Officer of the

Company are also available on the website at www. gkwltd.com

22. CORPORATE GOVERNANCE

The Company has taken adequate steps to ensure compliance of the mandatory provisionsof Corporate Governance as issued by Securities and Exchange theconclusionof87 Board ofIndia from time to time.

A report on Corporate Governance is appended hereto.

23. VARIOUS POLICIES OF THE COMPANY

23.1 Policy on Related Party Transactions

The Company has implemented Policy on Related Party Transactions. The policy isavailable on the website of the Company (www.gkwltd.com).

23.2 Policy on Directors' Remuneration and KMP

In terms of the requirement of Section 178 of the Companies Act 2013 on therecommendation of the Nomination and Remuneration Committee the Board has approved theNomination and Remuneration Policy (hereinafter referred to as ‘Policy') of theCompany. The policy is available on the website of the Company ( www.gkwltd.com ).

The salient features of the policy are as below:

to lay down criteria for identifying persons who are qualified to become Directors andwho may be appointed in Senior Management cadre as KMP of the Company.

to lay down the terms and conditions in relation to the appointment of DirectorsSenior Management Personnel or KMP and recommend to the Board the appointment and removalof Directors Senior Management Personnel or KMP;

to lay down criteria to carry out evaluation of every

Director's performance;

to formulate criteria for determining qualification positive attributes andIndependence of a Director;

to determine the composition and level of remuneration including reward linked withthe performance which is reasonable and sufficient to attract retain and motivate

Directors KMP and Senior Management Personnel to work towards the long-term growth andsuccess of the Company;

to devise a policy on the diversity of the Board; to assist the Board with developing asuccession plan for the Board.

23.3 Corporate Social Responsibility Policy

Due to carried forward losses as computed under Section 198 of the Companies Act 2013the CSR provisions are not currently applicable to your Company. The CSR Policy isavailable on the website of the Company (www.gkwltd.com).

23.4 Vigil Mechanism

The Company has a Vigil Mechanism / Whistle

Blower Policy to deal with instances of fraud and mismanagement if any. The policyprovides for adequate safeguards against victimization of employees and / or Directors andalso provides for direct access to the Chairman of the Audit Committee. The Policy isuploaded on the website of the Company at www.gkwltd.com.

24. PARTICULARS AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

Your Directors state that during the year under review there were no reported casesfalling within the purview of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Company has complied with provisions relating tothe constitution of Internal Compliant Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

ACKNOWLEDGEMENT

The Board of Directors would like to thank the Company's customers employeesshareholders bankers financial advisors suppliers and all others associated with theCompany for their continued support.

For and on behalf of the Board
K K Bangur
29 June 2021 Chairman

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