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Avon Mercantile Ltd.

BSE: 512265 Sector: Financials
NSE: N.A. ISIN Code: INE471D01019
BSE 05:30 | 01 Jan Avon Mercantile Ltd
NSE 05:30 | 01 Jan Avon Mercantile Ltd

Avon Mercantile Ltd. (AVONMERCANTILE) - Director Report

Company director report

To

The Members

Avon Mercantile Limited

The Board of Directors of your Company have pleasure in placing before the Members the33rd Annual Report together with the Audited Statement of Accounts of theCompany for the year ended on 31st March 2018.

• FINANCIAL HIGHLIGHTS

The financial highlights of the Company during the year under review are as under:

Rs. (in Lakhs)

PARTICULARS 2017-18 2016-17
Total Income 571.93 386.20
Less : Total Expenses 535.59 360.39
Profit / (Loss) before exceptional and extraordinary items 36.34 25.81
and tax
Less: Prior Period Expenses - -
Less : Tax for current year 8.25 8.02
Less: Income Tax paid for earlier years - -
Profit After Tax 28.09 17.79

During the year under review the total revenue of the Company was Rs. 571.93 Lakhsconsisting of revenue from operations for Rs. 5 7 0.41 Lakhs and other Income for Rs. 1.52Lakhs as against the total revenue of the Company was Rs. 3 8 6.20 Lakhs consisting ofrevenue from operations for Rs. 364.17 Lakhs and other Income for Rs. 22.03 Lakh duringthe previous financial year 2016-17. The profit for the year under review is Rs. 28.09Lakhs as compared to profit of Rs. 17.79 Lakhs during the previous financial year 2016-17.

• STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

During the year under review the Company being a Non-Banking Financial Company hascarried out its main activity of lending funds. The Company intends to continue the sameline of business in future as well.

• CHANGE(S) IN THE NATURE OF BUSINESS

During this period there is no change in business of the Company or in thesubsidiaries' business or in the nature of business carried on by them.

• DIVIDEND

For the purpose of business growth and expansion the Board of Directors of the Companyhas not recommended any dividend for the Financial Year ending 31st March2018.

• TRANSFER TO RESERVES

During the year under review the Company has transferred Rs. 5.62 Lakhs to theReserves Fund from the profits of the Company in accordance with the provisions of Section45-IC of the Reserve Bank of India Act 1934.

• CHANGES IN SHARE CAPITAL

During the year under review there was no change in the Authorized and paid up sharecapital of the Company.

• EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of section 92 of the Companies Act 2013 ("Act")and Rule 12(1) of the Companies (Management and Administration) Rules 2014 the extract ofAnnual return in Form No. MGT-9 is annexed herewith as ANNEXURE-I and forms part of thisreport.

• NUMBER OF BOARD MEETINGS

During the year under review four meetings of the Board were held on 25/05/201714/08/201713/11/2017 and 08/02/2018 respectively.

• PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

• PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review the Company has not entered into any contract orarrangement with related parties under section 188 of the Act. The form AOC-2 is enclosedto this Report as ANNEXURE - II.

• MATERIALCHANGESAFFECTINGTHE FINANCIAL POSITION OFTHE COMPANY

There is no material change and commitment affecting the financial position of theCompany between the end of the Financial Year of the Company to which financial statementsrelate and the date of report.

• CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as ANNEXURE-III and formspart of this report.

• SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review no company has become or ceased to be its SubsidiaryJoint Venture or Associate Company.

• INTER-SE TRANSFER OF PROMOTERS' SHAREHOLDING

During the year under review there was no change in inter-se transfer of sharesbetween Promoter Group.

• RISK MANAGEMENT POLICY

The Company believes that managing risks goes hand-in-hand with maximum returns. Tothis effect there is a robust process in place to identify key risks and prioritise therelevant action plans to mitigate these risks. Risk management framework is reviewedperiodically like review of compliance and regulatory matters by the Board Members.

• DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of your Company is duly constituted with proper balance of Non-ExecutiveDirectors (including Woman Director) and Independent Directors. During the year underreview there was no change in the composition of the Board of Directors of the Company.

i) RE-APPOINTMENT OF RETIRING DIRECTOR

Mr. Rakesh Kumar Bhatnagar (DIN: 02922258) is liable to retire by rotation and beingeligible offers himself for re-appointment. The Directors recommend Mr. Rakesh KumarBhatnagar for re-appointment.

His brief resume and other details are furnished in the Notice for the Annual GeneralMeeting as ANNEXURE-A.

ii) INDEPENDENT DIRECTORS

The members in the Annual General Meeting of the Company held on 30inSeptember 2014 had approved the appointments of Mr. Ramesh Chandra Agarwal (DIN: 00037477)and Mr. Satish Kumar Gupta (DIN: 00030841) as Independent Directors to hold office for 5consecutive years w.e.f. 30in September 2014 who are not liable to retire byrotation.

Pursuant to Section 134(3)(d) read with Section 149(7) of the Companies Act 2013 boththe Independent Directors have given declarations for the Financial Year 2018-19 that theymeet the criteria of independence as laid down under Section 149(6) the Act and Regulation16(l)(b) of Securities Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

The Company has a policy to induct its Independent Directors upon their appointment toattend the orientation programme conducted by the Company so as to familiarize them withthe Company's policies strategies plans etc.

Further the Board advises and ensures that its Independent Directors attend programmes/seminars conducted by various organizations on the matters relating to finance taxationcorporate governance etc. so that they keep themselves updated with the variousdevelopments in the corporate/ legal world.

iii) Woman Director

Pursuant to the provisions of Sections 149 152 161(1) 184 and any other applicableprovisions of the Companies Act 2013 and rules made there under Ms. Rashi Adlakha whowas appointed as an Additional Director of the Company w.e.f. 8th February 2018and who holds office up to the date of this Annual General Meeting and in respect of whomthe Company has received a notice in writing from a member proposing her candidature forthe office of the Director of the Company be and is hereby elected and appointed asNon-Executive Director whose period of office shall be liable to determination byretirement of directors by rotation.

The brief resume and details of Directors who are to be appointed / re-appointed arefurnished in the Notice for the Annual General Meeting as ANNEXURE-B.

iv) Changes in the composition of the Board of Directors / Key Managerial Personnel.

As required under the provisions of Section 134(q) read with Rule 8(5)(iii) of theCompanies (Accounts) Rules 2014 the details of Directors or Key Managerial Personnel whowere appointed or have resigned during the year under review are as follows:

Name of Director/Key Managerial Person Designation Date of Appointment Date of Resignation
Mr. Vikas Kapoor Non-Executive Non Independent Director 22/04/2013 30/11/2017
Ms. Gunjan Arora Non-Executive Non Independent Director 25/03/2015 30/11/2017

• STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUBSECTION (6) OFSECTION 149

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

• STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADEBY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act SEBIListing Regulations and the Guidance Note on Board Evaluation issued by the Securities andExchange Board of India on January 5 2017.

The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. In a separate meeting of independent directorsperformance of non- independent directors the Chairman of the Company and the board as awhole was evaluated taking into account the views of executive directors and nonexecutivedirectors. The Board and the Nomination and Remuneration Committee reviewed theperformance of individual directors on the basis of criteria such as the contribution ofthe individual director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.

In the board meeting that followed the meeting of the independent directors and meetingof Nomination and Remuneration Committee the performance of the board its committeesand individual directors was also discussed. Performance evaluation of independentdirectors was done by the entire board excluding the independent director beingevaluated.

The performance of all the directors during the year was satisfactory and towards thegrowth prospects.

Personnel relations with all employees remained cordial and harmonious throughout theyear. Your Directors wish to place on record their sincere appreciation for the devotedservices of all employees of the Company.

• SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review no significant order has been passed by any regulators orcourts or tribunals.

• ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company maintains appropriate systems of internal control and monitoring proceduresto ensure that all assets are safeguarded against loss from unauthorized use ordisposition. It provides for adequate checks and balances and is meant to ensure that alltransactions are authorized recorded and reported correctly. The Internal financialcontrols with reference to the Financial Statements are adequate commensurate with thesize and nature of its business.

The Board had appointed M/s RBAS & Associates Chartered Accountants as InternalAuditor of the Company for the Financial Year 2017-18. The Internal Audit Report alongwith observations and recommendations contained therein was placed before the AuditCommittee in its meeting held on 30-5-2018 and was taken note of.

• DISCLOSURE ON EMPLOYEE STOCK OPTION/PURCHASE SCHEME

The Company has not provided any Employee Stock Option Scheme or Purchase Scheme to theemployees.

• DEPOSITS

During the year under review your Company has not accepted any deposits from thepublicand as such no amount of principal or interest thereon was outstanding as on 31March 2018.

• PARTICULARS OF EMPLOYEES

In terms of Section 197(12) read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 table containing the names and otherparticulars of employees is appended in ANNEXURE - IV.

Further in terms of Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 no employee

a) employed throughout the financial year was in receipt of remuneration of Rs. 60 lakhor more or

b) employed for part of the year and was in receipt of Rs. 5 lakh or more per monthand

c) was in receipt of remuneration in excess of that drawn by the manager and holds byhimself / herself or along with his / her spouse and dependent children not less than twopercent of the equity shares of the company.

• CORPORATE SOCIAL RESPONSIBILITY

The provisions contained in Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility) Rules 2014 are not applicable to the Company.

• AUDITORS AND AUDITORS' REPORT

M/s. Gupta Garg & Agarwal Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 29th September 2015 for aterm of five consecutive years subject to ratification by the members of the Company atevery Annual General Meeting. However vide notification dated 7th May 2018; the Ministryof Corporate Affairs has done away with the requirement of seeking ratification of membersfor appointment of auditors at every Annual General Meeting. Accordingly no resolution isbeing proposed for ratification of appointment of statutory auditors at the 9th AnnualGeneral Meeting.

The Auditors Report given by the Auditors on the financial statements of the Company ispart of the Annual Report. The Auditors' Report does not contain any qualificationreservation or adverse remark or disclaimer. There was no fraud reported by Auditors undersection 143(12) of the Companies Act 2013.

• DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:

(a) in the preparation of the annual accounts for the Financial Year 2016-17 theapplicable accounting standards had been followed along with proper explanation relatingto 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 trueandfair view of the state of affairs of the company as at 31st March 2017 andof the profit and loss of the company for that period;

(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 financial controls 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.

• COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Amendment Rules 2014 there is no requirement to appoint a cost auditor forthe company.

• SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration) Rules 2014 the Board had appointed M/s.K Rakesh & Co. Company Secretaries in Practice (C.P No 14700) to undertake theSecretarial Audit of the Company for the financial year 2017-18 and the report is annexedas ANNEXURE-V to this report.

• AUDIT COMMITTEE

The details pertaining to composition of Audit Committee and its terms of reference inaccordance with Sections 134(3) and 177(4) of the Act respectively are included in theCorporate Governance Report which forms part of this report.

There are no instances of the Board not accepting the recommendations of the AuditCommittee during the Financial Year 2017-18.

• NOMINATION AND REMUNERATION COMMITTEE

The details pertaining to composition of Nomination and Remuneration Committee and theCompany's policy on Directors Key Managerial Personnel and other Employees' appointmentand remuneration and other matters provided in Section 178(3) and (4) of the Act have beendisclosed in the Corporate Governance Report which forms part of this report.

• STAKEHOLDERS RELATIONSHIP COMMITTEE

The details pertaining to composition of Stakeholders Relationship Committee inaccordance with Section 178(5) of the Act are included in the Corporate Governance Reportwhich forms part of this report.

• BOARD EVALUATION

Pursuant to Section 134(q) of the Companies Act 2013 read with Rule 8(4) of theCompanies (Accounts) Rules 2014 and Regulation 17(10) of the Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out a formal annual evaluation of its own performance performance of theIndividual Directors (including Independent Directors) as well as the evaluation of theworking of its Committees.

The Nomination and Remuneration Committee has in terms of Section 178(2) and (3) of theCompanies Act 2013 and relevant regulations of the Securities Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 defined theevaluation criteria procedure and time schedule for the Performance Evaluation processfor the Board its Committees and Directors. The nomination and remuneration policy interalia giving details about the policy on directors' appointment and remuneration includingthe criteria for determining qualifications positive attributes independence and otherdetails are included in nomination and remuneration policy the details of which are givenin the Corporate Governance Report which forms part of this Report.

• CORPORATE GOVERNANCE & COMPLIANCE CERTIFICATE

The Company is committed to follow the standards of good Corporate Governance. Asrequired under Regulation 34(3) read with Schedule V of the Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 a detailedreport on Corporate Governance is annexed as ANNEXURE - Vital and forms integral part ofthis report.

Further the Company has received a certificate from M/s. K Rakesh & Co CompanySecretaries in Practice (C.P. No. 14700) regarding compliance with Corporate Governancenorms as stipulated in Part C of Schedule V of the Listing Regulations for the financialyear ended 31st March 2018. The certificate confirming compliance of theconditions of Corporate Governance is annexed as ANNEXURE - Vl(b) and form integral partof this report.

• MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Schedule V(B) of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion andAnalysis Report is presented in the separate section and is marked as ANNEXURE - VII andforms an integral part of this report.

• VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) and (10) of the Companies Act 2013 read with Rule 7 of theCompanies (Meetings of Board and its powers) Rules 2014 and Schedule V(B) of theSecurities Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has established a Vigil Mechanism to report genuineconcerns about actual or suspected frauds unethical behavior etc. and the same has beenposted on the official website of the Company.

• DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION &REDRESSAL) ACT 2013

During the Period no cases has been reported under Sexual Harassment of Women atWorkplace.

• LISTING AT STOCK EXCHANGE(s)

The Company continues to be listed at the Bombay Stock Exchange Ltd and Calcutta StockExchange Association Ltd.

• ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere thanks and appreciation for thecooperation and help provided by State Government and the Bankers to the Company.

Your Directors also acknowledge the continued trust and confidence that Shareholdershave placed in the Company.

By Order of the Board For Avon Mercantile Limited
Place : Noida Sd/- Sd/-
Date : 14th August 2018 (Rakesh Kumar Bhatnagar) (Rashi Adlakha)
Director Director
DIN No.: 02922258 DIN No.: 07742051