Adarsh Mercantile Ltd.
|BSE: 538563||Sector: Financials|
|NSE: N.A.||ISIN Code: INE673E01018|
|BSE 15:14 | 15 Mar||5.36||
|NSE 05:30 | 01 Jan||Adarsh Mercantile Ltd|
Adarsh Mercantile Ltd. (ADARSHMERCANTIL) - Director Report
Company director report
Your Directors take pleasure in presenting the Annual Report together with the AuditedAnnual Accounts of your Company for the year ended March 31 2017.
(Amount in Rs.)
STATE OF COMPANYS AFFAIRS AND OPERATIONS
The Company is engaged in the business of Commodity Trading & Distribution andinvestments in Mutual Funds Shares & Securities etc. and has earned revenue of Rs.57.06 Lakhs compared to Rs. 35.01 Lakhs which is higher by 62.98% than last year.
Your Company has earned a net profit of Rs. 6.57 Lakhs during the year compared to Rs.0.31 Lakhs in the previous year. A detailed review of the operations performance of theCompany and its business is given in the Management Discussion & Analysis which formspart of the Annual Report.
There is no change in the business of the Company during the financial year 2016-17.
PERFORMANCE & FINANCIAL POSITION OF ASSOCIATE ASSOCIATE - AVON CREDIT PVT. LTD.
The Company has reported total revenue of Rs. 19.48 lakhs during the year as comparedto Rs. 16.94 lakhs in the previous year and has earned a Net Profit of Rs. 4.42 lakhs ascompared to a loss of Rs. 0.79 lakhs in the previous year.
The Associate Company has not directly contributed to the Revenue and the profit earnedsince they have not passed on any profit to the Company earned by them.
Your Company is making all efforts to accelerate the growth of its business. In spiteof the market risk faced by your Company your Directors are optimistic about the futureprospects of the Company.
In order to conserve resources of the Company to meet working capital requirementsyour Board did not recommended any dividend on equity shares of the Company for thefinancial year ended 31st March 2017.
ISSUE OF SHARES
The Company has not issued any shares during the financial year under review.
TRANSFER TO RESERVES
The Company has not transferred any amount to any reserve during the year under review.DEPOSITS
The Company has not accepted any deposit during the year under review.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the Directors Responsibility Statement as referred to in section 134(3)(c)and 134(5) of the Companies Act 2013 your Directors hereby confirm that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
ii) The Directors have 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 of the Company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis;
v) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION. FOREIGNEXCHANGE EARNINGS AND OUTGO
Information related to conservation of energy Research & Development technologyabsorption foreign exchange earnings and outgo as required under section 134(3)(m) of theCompanies Act 2013 and Rule 8(3) of Companies (Accounts) Rules 2014 are given in the Annexure- A as attached hereto and forming part of this Report.
Your Company has practiced sound Corporate Governance and taken necessary actions atappropriate times for enhancing and meeting stakeholders expectations whilecontinuing to comply with the mandatory provisions of Corporate Governance. Your Companyhas complied with the requirements of applicable Regulations of Securities & ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 asissued by Securities and Exchange Board of India and as amended from time to time. YourCompany has given its deliberations to provide all the information in the Directors Reportand the Corporate Governance Report as per the requirements of Companies Act 2013 and theListing Agreement entered by the Company with the Stock Exchange as a matter of prudenceand good governance.
A Report on Corporate Governance along with a certificate from Mr. Santosh KumarTibrewalla Practicing Company Secretary regarding compliance of conditions of CorporateGovernance and certification by CEO & CFO are given in Annexure - BC & D.
CODE OF CONDUCT
The Code of Conduct for Directors KMPs and Senior Executive of the Company is alreadyin force and the same has been placed on the Companys website:
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
In terms of the SEBI (Prohibition of Insider Trading) Regulations 2015 your Companyhas already adopted the Code of Conduct for prevention of Insider Trading and the same isalso placed on the Companys website: www.adarshmercantile.inFurther in accordance with the provisions of Regulation 8 of SEBI (Prohibition of InsiderTrading) Regulations 2015 the Board of Directors of the Company have adopted the code ofpractices and procedures for fair disclosure of Unpublished Price Sensitive Informationand formulated the code of conduct of the Company.
MANAGEMENT DISCUSSIONS & ANALYSIS REPORT
A report on Management Discussion &Analysis is given in the Annexure -F to this report. PERSONNEL
The ratio of the remuneration of each Executive Director and Key Managerial Personnel(KMP) to the median employees remunerations as per Section 197(12) of theCompanies Act 2013 read
with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 has been set out as Annexure - G to this Report attachedhereto.
The website of your Company www.adarshmercantile.inhas been designed to present the Companys businesses up-front on the home page. Thesite carries a comprehensive database of information including the Financial Results ofyour Company Shareholding pattern Directors & Corporate Profile details ofBoard Committees Corporate Policies and business activities of your Company. All themandatory information and disclosures as per the requirements of the Companies Act 2013and Companies Rules 2014 and as per the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 has been uploaded.
LISTING OF SECURITIES IN STOCK EXCHANGES
The shares of the Company are presently listed at BSE Limited. The Company isregistered with both NSDL and CDSL for holding the shares in dematerialized form and openfor trading. The Company has paid fees to the Depositories.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Retirement by Rotation
Mr. Aritra Basu (DIN : 06779222) Non-Executive Director of the Company pursuant tothe provisions of Section 152(6) and other applicable provisions of the Companies Act2013 retires by rotation at the ensuing Annual General Meeting and being eligibleoffered himself for re-appointment.
b) Re-appointment of Executive Director
The present term of appointment of Mrs. Suchita Chhawchharia (DIN : 00044063) as anExecutive Director would expire on 31st March 2018. The Board of Directors atits meeting held on 19th August 2017 has re-appointed Mrs. SuchitaChhawchharia as an Executive Director pursuant to the provisions of sections 196 197198 203 read with Schedule V and/or any other applicable provisions of the Companies Act2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014subject to the approval of members by a special resolution in the ensuing Annual GeneralMeeting of the Company for a further period of 3 (Three) years commencing from 1stApril 2018 on such terms and conditions as recommended by the Nomination and RemunerationCommittee.
c) Appointment of Whole time- Key Managerial Personnel (KMP):
The present Whole-time Key Managerial Personnel of the Company as on 31stMarch 2017 are as follows :-
i. Mrs. Suchita Chhawchharia - Executive Director
ii. Mr. Shiv Shankar Sharma - Chief Financial Officer
iii. Ms. Arpita Dey - Company Secretary
i) Mr. Shiv Shankar Sharma has been appointed as the Chief Financial Officer(designated as the Whole-time Key Managerial Personnel) of the Company by the Board in itsmeeting held on June 30 2016 with effect from July 1 2017 as recommended by the AuditCommittee and Nomination & Remuneration Committee of the Company pursuant to theprovisions of Section 203 and other applicable provisions of the Companies Act 2013 andthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(including any statutory modification(s) or re-enactment thereof for the time being inforce).
ii) Ms. Arpita Dey has been appointed as the Company Secretary & Compliance Officer(designated as the Whole-time Key Managerial Personnel) of the Company by the Board in itsmeeting held on January 16 2017 with immediate effect as recommended by the Nomination& Remuneration Committee of the Company pursuant to the provisions of Section 203 andother applicable provisions of the Companies Act 2013 the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
iii) Mr. Sourabh Rungta Company Secretary and Compliance Officer of the Company hadresigned with effect from June 30 2016.
During the year under review there was no change in the composition of the Board ofDirectors.
None of the Directors of the Company are disqualified as per section 164(2) of theCompanies Act 2013 and rules made thereunder or any other provisions of the CompaniesAct 2013. The Directors have also made necessary disclosures to the extent as requiredunder provisions of section 184(1) as applicable. In accordance with Section 149(7) of theAct each Independent Director has given a written declaration to the Company confirmingthat he/she meets the criteria of independence as mentioned under Section 149(6) of theAct and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
All members of the Board of Directors and senior management personnel affirmedcompliance with the code of conduct of Board of Directors and Senior Management on anannual basis.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company is not falling under the purview of section 135 of the Companies Act 2013and the relevant Rules made there under. Thus the Board is not required to constitute theCSR Committee and nor has to comply with any of the provisions thereof.
AUDITORS AND THEIR REPORTS
(i) Statutory Auditors:
The present Statutory Auditors of the Company M/s. Ray & Co. CharteredAccountants holds office upto the conclusion of the Annual General Meeting (AGM) to beheld for the financial year 2016-17.
As per the provisions of Section 139(2) of the Companies Act 2013 and rules madethereunder an Auditor firm shall hold office of Statutory Auditors for a maximum term oftwo terms of five consecutive years.
Accordingly based on the recommendation of Audit Committee the Board of Directors hasre-appointed of M/s. Ray & Co. Chartered Accountants (Registration No. 313124E) asStatutory Auditors of the Company to holds office of the Auditors from the conclusion ofthe Annual General Meeting of the Company to be held for the financial year 2016-17 tillthe Annual General Meeting of the Company to be held for the financial year 2019-20subject to the approval of the Shareholders in the Annual General Meeting and ratificationin each of the subsequent AGMs. Requisite letter and certificate pursuant to Section 139and 141 of the Companies Act 2013 from M/s. Ray & Co. Chartered Accountants abouttheir consent and eligibility for appointment as the Statutory Auditors of the Company hasbeen received by the Company.
The Notes to Accounts as referred in the Auditors Report are self-explanatory andhence does not call for any further explanation.
(ii) Secretarial Auditor:
The Board has re-appointed Mr. Santosh Kumar Tibrewalla Practicing Company Secretaryas the Secretarial Auditor of the Company to carry out the Secretarial Audit for the year201617 under the provisions of section 204 of the Companies Act 2013. The report of theSecretarial Auditor in Form MR 3 is enclosed as Annexure - H to thisBoards Report which is self-explanatory and hence do not call for any furtherexplanation.
DISCLOSURES AS PER APPLICABLE ACT AND LISTING AGREEMENT
i) Related Party Transactions:
All transaction entered with related parties during the F.Y. 2016-17 were on armslength basis and were in the ordinary course of business and provisions of Section 188(1)are not attracted. There have been no materially significant related party transactionswith the Companys Promoters Directors and others as defined in section 2(76) of theCompanies Act 2013 and Regulation 23 of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 which may have potential conflict of interest with theCompany at large.
The necessary disclosures regarding the transactions as required in Form-AOC-2 aregiven in the notes to accounts. The Company has also formulated a policy on dealing withthe Related Party Transactions and necessary approval of the Audit Committee and Board ofDirectors were taken wherever required in accordance with the Policy. The Company has notentered into any specific contract with related parties.
Since the Company has entered into transaction with its Associates firms/ Companies inwhich Directors are interested disclosure as per Para A of Schedule V is provided in Notesto the Accounts under Related Party Disclosures.
ii) Number of Board Meetings:
The Board of Directors met 7 (seven) times in the year 2016-17. The Details of theBoard meeting and attendance of the Directors are provided in the Corporate GovernanceReport attached as Annexure to this Boards Report.
iii) Committees of the Board :
As on March 31 2017 the Board had four Committees: the Audit Committee the Nominationand Remuneration Committee the Stakeholders Relationship Committee and the ShareTransfer Committee. A detail note on the Committee is provided in the Corporate GovernanceReport section of this Annual Report.
iv) Composition of Audit Committee:
The Audit Committee comprises of three Non-Executive Directors including twoIndependent Directors as on March 31 2017 :-
Manish Khaitan - Non Executive Independent Director
Sundar Lal Mohta - Non Executive Independent Director
Aritra Basu- Non Executive Director
The Audit Committee was re-constituted w.e.f. 1st April 2016 by the Boardof Directors in its meeting held on 31st March 2016 and Mr. Manish Khaitan wasappointed as the Chairman of the Audit Committee and Mr. Aritra Basu as member of theCommittee due to the resignation of Mr. Narayan Pothera and Mr.Gautam Agarwala. Thecomplete details of the Committee are given in the Corporate Governance Report attachedas Annexure to this Boards Report.
v) Extracts of Annual Return:
The details forming part of the extract of the Annual Return in Form MGT-9 asprovided under section 92(3) of the Companies Act 2013 and Rule 12 of the Companies(Management and Administration) Rules 2014 is enclosed as Annexure - I.
vi) Risk Analysis:
The Board has developed and implemented a risk management policy identifying thereinthe elements of risk that may threaten the existence of the Company. The Company has amechanism that helps the Board to keep an overall watch on the business risks and informsthe Board members about the evaluation and estimation of the levels of risks involved ina situation their comparison against benchmarks or standards and determination of anacceptable level of risk and mitigation plans and periodical reviews are undertaken toensure that the critical risks are controlled by the executive management.
vii) Internal Financial Control :
The Company has in place adequate internal financial control to ensure the orderly andefficient conduct of its business including adherence to the Companys policysafeguarding of its assets the prevention and detection of fraud error reportingmechanism the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
The Company has in place adequate internal financial control as required under section134(5)(e) of the Act and the same was evaluated by the Audit Committee. During the yearsuch controls were tested with reference to financial statements and no reportablematerial weakness in the formulation or operations were observed. The Statutory Auditorsof the Company conducted audit on the Companys internal financial control overfinancial reporting and the report of the same is annexed with Auditors Report.
viii) Loans Guarantees and Investments:
During the year under review your Company has invested and deployed its surplus fundsin Securities and given loan which is within the overall limit of the amount and withinthe powers of the Board as applicable to the Company in terms of section 179 and 186 ofthe Companies Act 2013. The particulars of all such loans guarantees and investments areentered in the register maintained by the Company for the purpose.
ix) Post Balance Sheet events:
There is no material changes in commitments affecting the financial position of theCompany occurred since the end of the financial year 2016-17.
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazettedated February 16 2015 notified the Indian Accounting Standards (Ind AS) applicable tocertain classes of companies. The Ind AS has replaced the existing Indian GAAP prescribedunder section 133 of the Companies Act 2013 read with rule 7 of the Companies (Accounts)Rules 2014. Thus Ind AS is applicable to your Company w.e.f. 1st April 2017.
x) Subsidiaries Associates or Joint Ventures:
As on 31st March 2017 Company has only one associate i.e. M/s. Avon CreditPvt. Ltd. and there is no Company which has become or ceased to be the Companyssubsidiary joint venture or associate Company during the year under review.
As per the provision of Section 129(3) and rule 5 of the Companies (Accounts) Rules2014 the statement in AOC-1 containing the salient features of the financialstatement of the associate Company is given in Annexure -J.
The consolidated financial statement in this Annual Report is as per the AccountingStandards as laid down by the Institute of Chartered Accountants of India. In accordancewith Section 136 of the Companies Act 2013 the audited financial statements includingthe consolidated financial statements and related information will be available on ourwebsite. These documents will also be available for inspection during business hours onall working days except Saturday at the Registered office of the Company and also on thedate of the
AGM. The Company will also make available copy on specific request by any member of theCompany interested in obtaining the same.
In accordance to regulation 33 of Securities & Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company opts to submitconsolidated financial results only on Annual basis and the same has been intimated to theStock exchange.
xi) Evaluation of the Boards Performance:
The Board has in place a formal mechanism for evaluating its performance and as well asthat of its Committees and individual Directors including the Chairman of the Board incompliance with the Companies Act 2013 and applicable Regulations of Securities &Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.The evaluation was carried out through a structured evaluation process coveringvarious aspects of the Boards functioning such as composition of the Board &Committees experience & competencies performance of specific duties &obligations governance issues etc. Separate exercise was carried out to evaluate theperformance of individual Directors including the Board as a whole and the Chairman whowere evaluated on parameters such as their participation contribution at the meetings andotherwise independent judgments safeguarding of minority shareholders interest etc.
The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors in their separate meeting. The Directors were satisfied with the evaluationresults which reflected the overall engagement of the Board and its Committees with theCompany.
The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors in their separate meeting.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.
xii) Nomination Remuneration and Evaluation Policy:
The Company on recommendation of its Nomination & Remuneration Committee has laiddown a Nomination Remuneration and Evaluation Policy in compliance with the provisionsof the Companies Act 2013 read with the Rules made therein and SEBI (LODR) Regulations2015 (as amended from time to time). This Policy is formulated to provide a framework andset standards in relation to the followings and details on the same are given in thewebsite of your Company www.adarshmercantile.in:
a. Criteria for appointment and removal of Directors Key Managerial Personnel (KMP)Senior Management Executives of the Company.
b. Remuneration payable to the Directors KMPs and Senior Management Executives.
c. Evaluation of the performance of the Directors.
d. Criteria for determining qualifications positive attributes and independence of aDirector.
xiii) Vigil Mechanism (Whistle Blower Policy):
The Company has adopted a whistleblower mechanism for Directors employees and otherperson to report concerns about unethical behaviour actual or suspected fraud orviolation of the Companys code of conduct and ethics. The Audit committee overseesthe vigil mechanism and the persons who avail the mechanism are encouraged to escalate tothe level of the Audit Committee for any issue of concerns impacting and compromising withthe interest of the Company and its stakeholders in any way. This policy also allows thedirect access to the Chairperson of the Audit Committee
The Company is committed to adhere to highest possible standards of ethical moral andlegal business conduct and to open communication and to provide necessary safeguards forprotection of Directors and employees from reprisals or victimization for whistle blowingin good faith.
Details of establishment of the Vigil Mechanism have been uploaded on theCompanys website: www.adarshmercantile. in and also set out in the CorporateGovernance Report attached as Annexure to this Boards Report.
The industrial relation during the year 2016-17 had been cordial. The Directors take onrecord the dedicated services and significant efforts made by the Officers Staff andWorkers towards the progress of the Company.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There have been no significant & material orders passed by regulators / courts/ tribunals impacting going concern status and Companys operations in future.
Your Directors take this opportunity to place on record their gratitude to the Centraland State Governments Bankers and Investors for their continuous support cooperation andtheir valuable guidance to the Company and for their trust reposed in the Companysmanagement. The Directors also commend the continuing commitment and dedication of theemployees at all levels and the Directors look forward to their continued support infuture.
ANNEXURE - A TO THE DIRECTORS' REPORT
Particulars pursuant to the provisions of Section 134 (3) (m) of the Companies Act2013 and rule
8(3) of the Companies (Accounts) Rules 2014:
A) Conservation of Energy -
(i) Steps taken or impact on conservation of energy
Your Company not being a Manufacturing Company the provisions relating to measures forconservation of energy and reduction of energy consumption are not applicable.
(ii) Steps taken by the Company for utilizing alternate sources of energy
(iii) Capital investment on energy conservation equipments
B) Technology Absorption -
(i) Efforts made towards technology absorption : N.A
(ii) Benefits derived like product improvement cost reduction : N.A. productdevelopment or import substitution.
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-
C) FOREIGN EXCHANGE EARNINGS AND OUTGO
There have been no foreign exchange earnings in terms of actual inflows and foreignexchange outgo during the year in terms of actual outflows.