Garware Marine shareholders raise Section 185 transaction limit to Rs 50 crore for GOSL dealings

Garware Marine Industries Limited has received shareholder approval to raise the ceiling for transactions covered under Section 185 of the Companies Act to Rs 50 crore from Rs 40 crore, widening the framework for its financial arrangements with the related entity Garware Offshore Services Limited, or GOSL.

The two special resolutions were approved at the company’s Extraordinary General Meeting held on October 7, 2026. The second resolution specifically cleared material related-party transaction arrangements with GOSL in connection with the revised Section 185 limit, including the charging of guarantee commission on corporate guarantees extended to GOSL.

The approvals are material because GOSL is not only an entity under the common control of a director or promoter, but also Garware Marine’s principal customer. In FY2025-26, Garware Marine reported ship-repair income of Rs 108.36 lakh from GOSL, which represented its entire revenue from operations for the year.

The Rs 50 crore ceiling is an approval limit rather than a disclosure of fresh transaction flows or a new guarantee being issued. However, it substantially exceeds the company’s FY2025-26 operating revenue of Rs 1.08 crore, underlining the importance of the GOSL relationship to Garware Marine’s operating and financial profile.

The company’s annual report had disclosed that it provided a corporate guarantee of Rs 10 crore on behalf of GOSL during FY2025-26. It also received Rs 4.16 lakh as corporate guarantee commission during the year. The earlier shareholder-approved related-party transaction limit for corporate guarantees was up to Rs 40 crore.

At the EGM, Chairman and Non-Executive Director Aditya A. Garware stated that he was interested in both agenda items because of common directors and promoters involved in the transactions. He requested Piyush V. Patel, an Independent Director, to chair the proceedings for the two resolutions. Garware resumed chairing the meeting after the resolutions were passed.

The meeting was conducted through videoconference under Ministry of Corporate Affairs provisions, with 111 members present to form the quorum. Of 10 registered shareholder speakers, five expressed appreciation for the board and employees, while one shareholder query was answered by the Chairman, according to the company.

The expanded approval framework comes against a backdrop of high customer concentration and receivable exposure. As of March 31, 2026, Garware Marine had Rs 153.20 lakh outstanding from GOSL towards income from operations, exceeding its FY2025-26 revenue from operations. Total trade receivables stood at Rs 508.84 lakh at the year-end.

Garware Marine’s revenue from operations declined 9.8 per cent year-on-year in FY2025-26, while net profit fell to Rs 14.72 lakh from Rs 43.14 lakh in the preceding year. Management attributed the revenue decline to lower repair requirements from its principal customer and has said it is pursuing customer-base diversification to reduce dependence on a single client.

As of 3:33 pm on October 7, 2026, Garware Marine shares were trading at Rs 18.06. The stock was down 3.27 per cent from its previous close of Rs 18.67 and stood about 45.5 per cent below its 52-week high of Rs 33.12, while remaining around 2.3 per cent above its 52-week low of Rs 17.66.

Over the past year, the stock has declined 32.77 per cent, compared with a 4.54 per cent fall in the BSE 500, indicating an underperformance of about 28.23 percentage points. The company is yet to publish the consolidated voting results and scrutiniser’s report, which it said would be uploaded on its website and communicated to BSE.

Disclaimer: The article is for informational purposes only and not investment advice.