To
Member's,
The Directors present their Forty-First (41th) Annual Report with the Audited Financial
Statements for the year ended 31st March, 2023.
1. FINANCIAL RESULTS (under Indian AS)
Financial Results are as under:
|
|
|
|
(Rs. in Lakhs) |
Particulars |
Standalone |
Consolidated |
|
Year ended 31.03.2023 |
Year ended 31.03.2022 |
Year ended 31.03.2023 |
Year ended 31.03.2022 |
Income for the year |
2161.57 |
1039.45 |
5933.09 |
4384.39 |
Expense for the year |
1975.96 |
1322.32 |
5551.43 |
4470.68 |
Profit before Tax and Interest |
185.62 |
(282.87) |
381.66 |
(86.29) |
Current Tax |
- |
- |
50.57 |
55.70 |
Provisions for Taxation/ Deferred Tax |
(0.04) |
0.39 |
4.81 |
(17.07) |
Net Profit/(Loss) for the Current Year |
185.66 |
(283.26) |
326.27 |
(124.92) |
Minority Interest & Profit from Associate Company |
- |
- |
42.04 |
47.34 |
Net Profit After Tax |
185.66 |
(283.26) |
284.23 |
(172.27) |
Transfer to General Reserves |
- |
- |
- |
- |
Balance carried to Balance Sheet |
185.66 |
(283.26) |
284.23 |
(172.27) |
2. OPERATIONS
The Standalone Operating Income of the Company is derived from a mix of dividend,
interest income, income from derivatives and other income. During the year under review,
on Standalone basis your Company recorded a total income of Rs. 2161.57 Lakhs as compared
to last year's total Income of Rs. 1039.45 Lakhs and Net Profit of Rs. 185.66 Lakhs as
compared to last year's net loss of Rs. 283.26 Lakhs.
3. DIVIDEND
Board of Directors has decided not to recommend any dividend for the year ended 31st
March 2023.
4. TRANSFER TO RESERVES
No amount was transferred to General Reserve during the year.
5. MANAGEMENT DISCUSSION AND ANALYSIS
Global Markets
Global economic growth is estimated to have slumped to 3.4% in 2022, due to tight
monetary policy by central banks globally to control the inflation caused by
Russia-Ukraine war, which has disrupted supply chain and led to steep surge in commodity
and fuel cost triggering energy crisis in Europe and hampered economic activity. Further
the rise of new omicron variant caused new lockdowns and travel restrictions in some
countries including China which imposed more frequent lockdown under its zero Covid policy
and along with stress in the real estate market, has weakened economic growth in China.
All these factors had a negative impact on economic growth, which slowed down to 3.4% in
2022 from 6.1% in 2021. According to IMF, global growth is projected to decelerate to 2.9%
in 2023 on the back of high and persistent inflation, diminishing policy support, and
elevated financial and geopolitical uncertainties.
Further aggressive monetary tightening by US Fed weighed on investment and economic
activity and led to decline in business confidence. Global trade remains largely subdued
due to global supply chain disruptions and bottlenecks in international freight movement
along with weakening external demand. Further, the turbulence in global financial markets
has ensued uncertainty in gold prices and has once again made it a safe heaven. With
growing demand for gold from central banks, gold prices are testing previous highs around
the level of USD 2,000/ounce. The "de-dollarization" strategy being adopted by
central banks has led to this incremental demand.
Indian Markets & Economy
Geopolitical conflict between Russia and Ukraine disrupted supply chain and resulted in
high food and energy prices. However, the Indian economy remained remarkably resilient to
external environment owing to ongoing policy reforms and prudent regulatory measures which
ensured strong macroeconomic fundamentals and helped the country navigate global and
domestic challenges. The services sector supported growth while manufacturing sector was
impacted due to elevated input prices and uneven demand recovery. Higher government
spending on infrastructure sector supported investment growth during the year. However,
monetary tightening by the RBI, widening of current account deficits and decline in growth
of exports capped economic growth prospects.
The growth in the Indian economy is expected to slightly decline to 6.1% in FY24 led by
decrease in consumer demand, confidence and business due to rising interest rates.
However, growth is expected to pick up in the second half of the fiscal year with revival
in manufacturing and trade activity and pick up in credit and investment cycle. The
government's initiatives such as PM Gati Shakti, the National Logistics Policy, and the
PLI scheme are expected to support economic growth. However, the government must address
challenges such as inflationary pressures and promote private investment and growth.
Overall, India's economic outlook remains positive, and the government's proactive
measures are expected to support growth in the coming years.
In India, corporate and the services sector has not been substantially negatively
impacted due to ongoing geo-political tensions. Even so, the year FY 2022-23 recorded a
lower earnings growth for the Nifty 50 companies than what was estimated by analysts at
the beginning of the financial year. The Nifty 50 recorded an approximate fall of 2.5%,
but showed impressive resilience given the global circumstances & food grain
distribution. The world remains behest with nations expressing differences which could
escalate further. In the month of April 2023, China initiated naval and air exercises
close to Taiwan. The year will be a test for the western world to manage political
tensions and economic disruptions. Another geo-political crisis or escalation of the
Russian-Ukraine war could be disastrous for the world at large.
Risks and Concerns
The very nature of the Company's business makes it subject to various kinds of risks.
The Company encounters credit risk and operational risks in its daily business operations.
Further the performance of the Company is dependent on the capital markets for its
returns. Even though it is envisaged that Indian stock market will continue to do well,
global concerns can result in sharp corrections.
Financial Performance and Operational Review
The paid up equity share capital of the Company as on March 31, 2023 stands at Rs.
19,63,50,000/- divided into 1,96,35,000 fully paid up equity shares of Rs. 10/- each.
Net W orth
The Net Worth of the Company stands at Rs. 2655.39 lakhs.
Total Income
During the year total income was reported at Rs. 2161.57 lakhs.
Credit Facilities
The Company has not availed any credit facility. It has consistently been able to meet
its financial needs through internal accruals.
Finance Cost
The finance cost of the Company stands at Nil
Tax Expense
The Company has incurred a tax expense of Nil in the current year.
6. FIXED DEPOSITS
The Company has not accepted any public deposits under the provisions of the Companies
Act, 2013 (Act').
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The provisions of section 186 of the Act pertaining to investment, guarantee and
lending activities are not applicable to the Company since the Company is a Non Banking
Financial Company ("NBFC") whose principal business is acquisition of
securities.
8. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company form part of the Annual Report.
The annual accounts of the subsidiary company and related detailed information are
available on the website of the Company and the same may be obtained by writing to the
Company Secretary at the Registered e-mail ID of the Company: secretarial@garnetint.com
The consolidated financial results reflect the operations of Sukartik Clothing Pvt.
Ltd. ("Sukartik") (Subsidiary). The Company has adopted a Policy for determining
Material Subsidiaries in terms of Regulation 16(1)(c) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations'').
The Company has adopted a Policy for determining Material Subsidiaries in terms of
Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations''). The Policy, as approved by the
Board, is available on the Company's website: www.garnetint.com.
9. SUBSIDIARY COMPANIES
The Company is having one material Subsidiary i.e. Sukartik Clothing Private Limited.
There are no associate or Joint Venture Companies within the meaning of Section 2(6) of
the Companies Act, 2013.
There has been no material change in the nature of business of the Subsidiaries.
In accordance with the General Circular issued by the Ministry of Corporate Affairs,
Government of India, the Balance Sheet, Statement of Profit & Loss and other documents
of the Subsidiary Companies are not being attached with the Balance Sheet of the Company.
However, the financial information of the Subsidiary Companies is disclosed in the Annual
Report in compliance with the said circular in Form AOC 1 as Annexure - A.
10. BOARD AND COMMITTEE MEETINGS
During the year under review, Five Board Meetings were held. The details of the
composition of the Board and its Committees and of the Meetings held and attendance of the
Directors at such Meetings are provided in the Corporate Governance Report. There have not
been any instances during the year when recommendations of the Audit Committee were not
accepted by the Board.
11. DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the internal, statutory and
secretarial auditors including audit of internal financial controls over financial
reporting by the statutory auditors and the reviews performed by Management and the
relevant Board Committees, including the Audit Committee, the Board is of the opinion that
the Company's internal financial controls were adequate and effective during the financial
year 2022-23.
Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the
Board of Directors, to the best of their knowledge and ability, confirm that: -
a. in the preparation of the annual accounts, the applicable accounting standards have
been followed and that there are no material departures;
b. they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent, so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the
profit of the Company for that period;
c. they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act, for safeguarding the
assets 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 down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and are operating effectively;
f. They have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
12. RISK MANAGEMENT
The Company has adopted a Risk Management Policy in accordance with the provisions of
the Act and Regulation 17(9) of the SEBI Listing Regulations. It establishes various
levels of risks with its varying levels of probability, the likely impact on the business
and its mitigation measures.
The Company has a robust Risk Management framework to identify, evaluate business risks
and opportunities. This framework seeks to create transparency, minimize adverse impact on
the business objectives and enhance the Company's competitive advantage.
13. INTERNAL CONTROL SYSTEMS
The Company maintains appropriate systems of internal controls, including monitoring
procedures, to ensure that all assets and investments are safeguarded against loss from
unauthorized use or disposition. Company policies, guidelines and procedures provide for
adequate checks and balances and are meant to ensure that all transactions are authorized,
recorded and reported correctly.
The Internal Auditors reviews the efficiency and effectiveness of these systems and
procedures. Added objectives include evaluating the reliability of financial and
operational information and ensuring compliances with applicable laws and regulations. The
Internal Auditors submit their Report periodically which is placed before and reviewed by
the Audit Committee.
14. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the
Directors and employees to report their concerns about unethical behavior, actual or
suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy
provides for adequate safeguards against victimization of employees who avail of the
mechanism and also provide for direct access to the Chairman of the Audit Committee. It is
affirmed that no personnel of the Company has been denied access to the Audit Committee
Chairman.
15. RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were on
an arm's length basis, in the ordinary course of business and were in compliance with the
applicable provisions of the Act and the Listing Regulations. There were no materially
significant Related Party Transactions made by the Company with Promoters, Directors, Key
Managerial Personnel which may have a potential conflict with the interest of the Company
at large.
All Related Party Transactions are placed before the Audit Committee for approval.
Prior omnibus approval of the Audit Committee is obtained for the transactions which are
repetitive in nature. A statement of all Related Party Transactions is placed before the
Audit Committee for its review on a quarterly basis, specifying the nature, value and
terms and conditions of the transactions, if any.
16. CORPORATE SOCIAL RESPONSIBILITY
In terms of section 135 and Schedule VII of the Act, the Board of Directors has
constituted a CSR Committee under the Chairmanship of Mr. Suresh Gaggar. Mrs. Sandhya
Lotlikar, Mr. Shyaam Taaparia and Mr. Ramakant Gaggar are the other members of the
Committee.
The Annual Report on CSR activities is annexed herewith as "Annexure B".
17. CHANGE IN NATURE OF BUSINESS
There has been no change in nature of business of the company during the F.Y.
2022-2023. Your company is engaged in other financial services i.e. Investment in
securities etc so there is only one segment reporting as per IND AS 108
18. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE
The Company has adopted a policy on Prevention, Prohibition and Redressal of Sexual
Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act 2013 and the Rules thereunder.
The Policy aims to provide protection to employees at the work place and prevent and
redress complaints of sexual harassment and for matters connected or incidental thereto,
with the objective of providing a safe working environment, where employees feel secure.
The Company has also constituted an Internal Complaints Committee, known as the Prevention
of Sexual Harassment ("POSH") Committee, to inquire into complaints of sexual
harassment and recommend appropriate action.
The Company had no complaints of sexual harassment at the beginning of the year and has
not received any complaints during the financial year. Accordingly, there are no
complaints pending at the end of the financial year 2022-2023.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which would
impact the going concern status of the Company and its future operations.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of the Act and the Company's Articles of Association, Mr.
Ramakant Gaggar (DIN 01019838), retires by rotation and, being eligible, offers himself
for re-appointment. A resolution seeking shareholder approval for his reappointment forms
part of the Notice.
Mr. Ramakant Gaggar was appointed as Managing Director of the Company, for a period of
five years and his terms was expired on 27th May, 2023. The Board of Directors
in their meeting held on 27th May, 2023 approved his re-appointment for a
further period of five years with effect from 28th May, 2023 to 27th
May, 2028 on the recommendations of Nomination and Remuneration Committee, subject to the
approval of the shareholders of the Company.
Ms. Shipra Rathi was appointed as Company Secretary & Compliance Officer of the
Company on October 11, 2022, in place of Ms. Kumkum Shah, who resigned effective October
10, 2022.
Pursuant to the provisions of Section 149 of the Act, the Independent Directors have
submitted declarations that each of them meets the criteria of independence as provided in
Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of
the SEBI Listing Regulations. In terms of Regulation 25(8) of SEBI Listing Regulations
there has been no change in the circumstances affecting their status as Independent
Directors of the Company. Further, the Non-Executive Directors of the Company had no
pecuniary relationship or transactions with the Company.
Pursuant to the provisions of Section 203 of the Act, Mr. Sanjay Raut, Chief Financial
Officer continued as Key Managerial Personnel of the Company as on 31st March, 2023.
Details pertaining to Director seeking re-appointment together with other directorships
and committee membership have been given in the annexure to the Notice of the AGM in
accordance with the requirements of the SEBI Listing Regulations and Secretarial
Standard-2 on General Meetings.
21. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF
INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Act and Listing Regulations, the Board has carried
out an annual evaluation of its own performance, performance of the Directors individually
as well as the evaluation of the working of its committees.
The Nomination and Remuneration Committee has defined the evaluation criteria,
procedure and time schedule for the Performance Evaluation process for the Board, its
Committees and individual Directors, including the Chairman of the Company. The above
criteria are broadly based on the Guidance Note on Board Evaluation issued by the
Securities and Exchange Board of India on 5th January, 2017.
For evaluating the Board as a whole, views were sought from the Directors on various
aspects of the Board's functioning such as degree of fulfilment of key responsibilities,
Board Structure and composition, establishment, delineation of responsibilities to various
committees, effectiveness of Board processes, information and functioning, Board culture
and dynamics, quality of relationship between the Board and the management.
Similarly, views from the Directors were also sought on performance of individual
Directors covering various aspects such as attendance and contribution at the
Board/Committee Meetings and guidance/support to the management outside Board/Committee
Meetings. In addition, the chairman was also evaluated on key aspects of his role,
including setting the strategic agenda of the Board, encouraging active engagement by all
Board members and promoting effective relationships and open communication, communicating
effectively with all stakeholders and motivating and providing guidance to the Executive
Director.
Areas on which the Committees of the Board were assessed included degree of fulfillment
of key responsibilities, adequacy of Committee composition, effectiveness of meetings,
Committee dynamics and quality of relationship of the Committee with the Board and the
Management.
The performance evaluation of the Independent Directors was carried out by the entire
Board. The performance evaluation of the Chairman and the Non-Independent Directors was
carried out by the Independent Directors who also reviewed the performance of the Board as
a whole. The Nomination and Remuneration Committee also reviewed the performance of the
Board, its Committees and of individual Directors.
22. REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee
framed a policy for selection and appointment of Directors, Senior Management and their
remuneration.
23. AUDITORS
(i) Statutory Auditors
M/s. B.M. Gattani & Co., Chartered Accountants, Mumbai, (ICAI Registration No.
113536W) have been appointed as an Auditor of the Company from 37th Annual General meeting
of the Company till the Conclusion of the 42th Annual General Meeting of the Company
pursuant to provisions of the section 139, 141 and other applicable provisions of the Act
and rules issued thereunder (including all statutory modification and amendment made from
time to time).
Auditors report for the financial year ended 31st March, 2023 forms part of this Annual
Report. Following mentioned remarks are given by the Auditors of the Company in their
Audit Report for the year ended 31st March, 2023:
a) The Holding Company has granted interest free unsecured loan to its subsidiary
company (parties covered under section 186 of the Companies Act, 2013), which is in non-
compliance of provisions of Section 186(7) of the Act.
b) The Holding Company has granted interest free unsecured Inter-Corporate loan
(parties covered under section 186 of the Companies Act, 2013) of Rs. 1,22,00,000/-, which
is in non- compliance of provisions of Section 186(7) of the Act.
c) The Holding Company has neither paid nor provided interest on its borrowings during
the financial year. Had such interest been recognised, the finance cost and interest
liability for the year ended March 31, 2023 would have been further increased to that
extent. Consequently, the reported Profit after Other Comprehensive Income by the Company
for the year would have been further reduced to that extent.
d) The Subsidiary company has not made provision for Employee benefits as per IND-AS19
which deals with "Employee Benefits".
e) The Subsidiary Company has neither paid nor provided interest on its borrowings
during the financial year. Had such interest been recognised, the finance cost and
interest liability for the year ended March 31, 2023 would have been further increased to
that extent. Consequently, the reported Profit after Other Comprehensive Income by the
Holding Company for the year would have been further reduced to that extent.
f) Due to technical error on the RBI Portal, the Holding Company was unable to
digitally sign all the mandatory RBI returns for the year ended 2022, already filed on the
portal.
g) Some of the balances of Trade Receivables, Deposits, Loans and Advances, Advance
received from customers and Trade payable are subject to confirmation from the respective
parties and consequential reconciliation/adjustment. The Consequential impact thereof on
the account is not ascertainable.
Management Reply for the Remark given by Statutory Auditor:
The Company is in talk with management of its material subsidiary so that adequate
provisions for the employee benefit shall be made. Company ensures to recover the interest
from subsidiary company in next financial year. The Company also ensure to take corrective
for other matters.
(ii) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s.
Siddharth Sharma & Associates, Practicing Company Secretaries to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed
herewith as "Annexure C"
Pursuant to the provisions of Section 204 of the Act and the Rules made thereunder, the
Board of Directors of Sukartik Clothing Private Limited (Sukartik), material subsidiary of
the Company, had appointed M/s. Siddharth Sharma & Associates, Practicing Company
Secretaries to undertake the Secretarial Audit of Sukartik for the year ended 31st March,
2023. The Secretarial Audit Report of Sukartik is given as "Annexure D".
(iii) Cost Records and Cost Auditors
The provisions of Cost Audit and Records as prescribed under Section 148 of the Act,
are not applicable to the Company.
24. SECRETARIAL STANDARDS OF ICSI
The Company is in compliance with the Secretarial Standards on Meetings of the Board of
Directors (SS - 1) and General Meetings (SS - 2) issued by the Institute of Company
Secretaries of India and approved by the Central Government.
25. CORPORATE GOVERNANCE
The Annual Report contains a separate section on the Company's corporate governance
practices, together with a certificate from the Company's Auditors confirming compliance,
as per SEBI Listing Regulations.
26. BUSINESS RESPONSIBILITY REPORTING
Regulation 34 (2) (f) of SEBI (LODR) Regulations related to Business Responsibility
Report is not applicable to the Company.
27. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return in
Form MGT-7 for FY 2022-23 will be uploaded on the Company's website: www.garnetint.com.
28. REPORTING FRAUD
During the year under review, the Statutory Auditor and Secretarial Auditor have not
reported any instances of frauds committed in the Company by its Officers or Employees, to
the Audit Committee under Section 143(12) of the Act details of which needs to be
mentioned in this Report.
29. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
Since the company is a Investment Company and has no manufacturing activity or other
operations. Therefore, the provisions of Section 134 (3) (m) of the Companies Act, 2013
read with Companies (Accounts) Rules, 2014 are not applicable. There were no foreign
exchange earnings or outgoing during the financial year ended 31st March, 2023.
30. PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required under Section 197(12) of the Act read with Rule 5(1) of The
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed
as "Annexure E".
Details required under the provisions of section 197(12) of the Act read with rule 5(2)
and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, will be made available to any member on request, as per provisions of section 136(1)
of the Act.
31. ACKNOWLEDGEMENTS
The Board wishes to place on record their sincere appreciation for the continued
support which the Company has received from all its stakeholders and above all, its
employees.
For and on behalf of the Board of Directors
Suresh Gaggar
Chairman
DIN: 00599561
Mumbai, 14th July, 2023.
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