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Sarvamangal Mercantile Co. Ltd.

BSE: 506190 Sector: Financials
NSE: N.A. ISIN Code: INE978L01016
BSE 05:30 | 01 Jan Sarvamangal Mercantile Co. Ltd
NSE 05:30 | 01 Jan Sarvamangal Mercantile Co. Ltd

Sarvamangal Mercantile Co. Ltd. (SARVAMANGALMERC) - Director Report

Company director report

To

The Members

Sarvamangal Mercantile Company Limited

Your Directors have pleasure in presenting the THIRTY FIFTH ANNUAL REPORT of theCompany together with the Audited Financial Statement(s) of the Company for the year endedMarch 31 2018.

1. Financial Summary:

Rs. In Lacs

Particulars 2017-18 2016-17
Gross Profit/Loss 15.73 (55.09)
Deduction there from:
Finance Cost 49.78 35.82
Depreciation & amortization expenses 0.15 0.15
Profit (Loss) before tax (34.20) (91.06)
Taxation
Current Tax - -
MAT Credit Entitlement 2.02 -
Income Tax for earlier years - -
Profit(Loss) after tax (36.22) (91.06)

2. Financial Performance

Sales and Other Income for the year ended March 31 2018 amounted to Rs. 0.40 crores asagainst Rs. 2.86 crores in the previous Financial Year. Net loss for the year under reviewwas Rs. 0.36 Crores as against loss of Rs. 0.91 crores in the previous FinancialYear.

3. Dividend

Your Directors do not recommend any dividend for the FinancialYear 2017-18.

4. Number of Board Meetings:

During the year March 31 2018 Four (4) Meeting of the Board were held on thefollowing dates:

(i) May 29 2017

(ii) September 14 2017

(iii) December 14 2017

(iv) February 14 2018

5. Details of Committees of the Board:

At present the Board has following two (2) Committees:

Audit Committee and

Nomination and Remuneration Committee.

a) Audit Committee

The constitution composition terms of reference role powers rights obligations ofAudit Committee are in conformity with the provisions of Section 177 and all otherapplicable provisions of the Companies Act 2013 read with the Companies (Meetings ofBoard and its Powers) Rules 2014.

The Audit Committee consists of the following Members as on March 31 2018:

Name Designation Non-Executive/Independent
Mr. B.K .Toshniwal Chairman Independent Director
Mr. Sanjay Jain Member Independent Director
Mr. Adarsh Somani Member Non-Executive Director

The Audit Committee has adequate powers and detailed terms of reference to play aneffective role as required under Section 177 of the Companies Act 2013 which interalia include overseeing financial reporting processes reviewing periodic financialresults financial statements and adequacy of internal control systems with theManagement approval of related party transactions recommendation of appointment andremuneration of Auditors of the Company and etc.

During the year ended March 31 2018 Four Meetings of the Audit Committee were held onfollowing dates:

(i) May 29 2017

(ii) September 14 2017

(iii) December 14 2017

(iv) February 14 2018

b) Nomination and Remuneration Committee.

The constitution composition terms of reference role powers rights obligations ofNomination and Remuneration Committee are in conformity with the provisions of Section 178and all other applicable provisions of the Companies Act 2013 read with the Companies(Meetings of Board and its Powers) Rules 2014.

The Nomination and Remuneration Committee consists of the following Members as on March31 2018:

Name Designation Non-Executive/Independent
Mr. B.K .Toshniwal Chairman Independent Director
Mr. Sanjay Jain Member Independent Director
Mr. Adarsh Somani Member Non-Executive Director

During the year ended March 31 2018 one meeting of the Nomination and RemunerationCommittee was held on February 14 2018.

The purpose of the Remuneration Committee of the Board of Directors shall be to reviewand to discharge the Board's responsibilities related to remuneration of the ManagingDirector Key Managerial Personnel and Senior Management. The Committee has the overallresponsibility for formulation of criteria of evaluation of Independent Directoridentifying persons who are qualified to become a Director and appointment of SeniorManagement Personnel.

6. Policy on Directors' Appointment and Remuneration:

The Nomination and Remuneration Committee is entrusted with the responsibility ofidentifying and ascertaining the integrity qualification expertise and experience of theperson for appointment as Directors KMP or at Senior Management level and recommendingtheir appointment for the consideration of the Board.

The Company has drawn up Nomination and Remuneration policy in line with therequirement of Section 178 of the Companies Act 2013. The Policy inter aliaprovides that a person should possess adequate qualification expertise and experience forthe position he / she is considered for appointment. The Committee has discretion todecide whether qualification expertise and experience possessed by a person is sufficient/ satisfactory for the concerned position.

7. Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism cum Whistle Blower Policy ('Vigil Mechanism') inplace. The Vigil Mechanism is a system for providing a tool to the employees of theCompany to report violation of personnel policies of the Company unethical behaviorsuspected or actual fraud violation of code of conduct. The Company is committed toprovide requisite safeguards for the protection of the persons who raise such concernsfrom reprisals or victimization.

The Policy provides for direct access to the Chairman of the Audit Committee inappropriate or exceptional cases. The Board of Directors affirm and confirm that noemployee of the Company has been denied access to the Committee.

Details of the Vigil Mechanism are available on the Company's websitewww.sarvamangalmercantile.com

8. Risk Management

Your Company has appropriate risk management system in place for identification ofrisks and assessment of risks measure to mitigate them and mechanism for their proper andtimely monitors and reports.

9. Policy on Prevention Prohibition and Redressal of Sexual Harassment atWorkplace.

Although the Company do not have large number of employees however to comply with thelegal requirement Company has in place adopted Policy on Prevention Prohibition andRedressal of Sexual Harassment. The policy aims to provide protection to employees at theworkplace and prevent and redress complaints of sexual harassment and for mattersconnected or incidental thereto.

Further as there are only 2 employees in the Company the Company is not required toconstitute Internal Complaints Committee under the provisions of Sexual harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.

The Company has not received any complaint of sexual harassment during the financialyear 2017-18.

10. Adequacy of Internal Financial Controls with reference to the Financial Statements.

The Company has devised appropriate systems and framework for adequate internalfinancial controls with reference to financial statements commensurate with the sizescale and complexity of its operations including proper delegation of authority policiesand procedures effective IT systems aligned to business requirements risk based internalaudit framework risk management framework.

The Audit Committee regularly reviews the internal control system to ensure that itremains effective and aligned with the business requirements. In case weaknesses areidentified as a result of the reviews new procedures are put in place to strengthencontrols.

Further the Board annually reviews the effectiveness of the Company's internal controlsystem. The Directors and Management confirm that the Internal Financial Controls (IFC)are adequate with respect to the operations of the Company.

A report of the Auditors pursuant to Section 143(3) (i) of the Companies Act 2013certifying the adequacy of Internal Financial Controls is annexed with the Auditors'Report.

11. Annual Evaluation of Board Performance

Pursuant to the provisions of the Companies Act 2013 the performance evaluation of theChairman and the Non Independent Directors was carried out by the Independent Directors intheir meeting held on March 28 2018 who also reviewed the performance of the Board aswhole.

The Nomination and Remuneration Committee has defined the evaluation criteriaprocedure for the performance evaluation of the Board of Directors.

The Board's functioning was evaluated on various aspects including inter aliadegree of fulfillment of key responsibilities Board Structure and Compositioneffectiveness of Board process information and functioning.

The Directors were evaluated on aspects such as attendance and contribution at Board /Committee Meeting and guidance / support to the management outside Board / CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement of allBoard Members.

Evaluation of Independent Directors was done by the Entire board.

12. Particulars of Loans Guarantees and Investments.

Particulars of Loans Guarantees and Investment as required under Section 186 of theCompanies Act 2013 read with the Companies (Meeting of Board and its Powers) Rules 2014are given in Notes no. 4 & 5 forming part of Financial Statements.

13. Particulars of contracts or arrangements with related parties.

The Company does not have any contract or arrangement or transaction with related partyin terms of Section 188 of the Companies Act 2013. Hence the disclosure required to beprovided under Section 134(3) (h) of the Companies Act 2013 in Form AOC 2 is notapplicable and need not to be furnished.

The Disclosures as required under IND AS - 24 ''Related Party Dislcosures'' notifiedunder Rule 7 of the Companies (Accounts) Rules 2014 have been provided in Note no. 25 ofthe Notes forming part of the Financial Statements.

14. Declaration of Independent Directors

The Independent Directors have submitted their disclosures/ declarations to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.

15. Directors Responsibility Statement

The Board of Directors of the Company confirm:

(i) that in the preparation of the annual accounts for the year ended 31 March 2018the applicable Accounting Standards have been followed.

(ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review.

(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the Provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) that the Directors have prepared the annual accounts for the year ended 31 March2018 on a 'going concern' basis.

(v) that the Directors have laid down internal financial control and that such internalfinancial control are adequate.

(vi) that the Directors have devised proper system to ensure compliance with theProvisions of all applicable laws.

16. Disclosures Relating to Remuneration of Directors Key Managerial Personnel AndParticulars of Employees.

The information required under Section 197 of the Companies Act 2013 read with Rule5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of Directors/ Employees of your Company is appended in Annexure I formingpart of this Report.

In accordance with provisions of Section 197 of the Companies Act 2013 read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are required to be given in Directors Report. In terms of provisions of Section 136(1) ofthe Companies Act 2013 this report is being sent to the members without this annexure.Members interested in obtaining copy of the annexure may write to the Company Secretaryand the same will be furnished on request. The said information is available also forinspection at the registered office of the Company during working hours.

17. Extract of Annual Return

In terms of Section 92 of the Companies Act 2013 read with the Companies (Managementand Administration) Rules 2014 details' forming the part of the extract of annual returnis enclosed in Annexure II forming part of this Report.

18. Disclosure of Particulars

Information's as per the provisions of Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 relating to Conservation ofEnergy Technology Absorption Foreign Exchange Earnings and Outgo is given in AnnexureIII forming part of this Report.

19. Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review as stipulatedunder the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formspart of this Annual Report.

20. Directors and Key Managerial Personnel

In accordance with the requirements of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Adarsh Somani Director of the Company retire at theforthcoming Annual General Meeting and being eligible offers himself for re-appointmentas Director liable to retire by rotation.

The Board of Directors at their meeting held on February 14 2018 has re-appointed Mrs.Nupur Somani as Managing Director of the Company for a period of 3 years commencing fromApril 01 2018 subject to approval of the members in the forthcoming Annual GeneralMeeting except this there was no change in office of Director/Key Managerial Personnelof the Company.

21. Auditors

a) Statutory Auditors

The Statutory Auditors of the Company M/s. R. Soni & Co. Chartered Accountants(FRN No. 130349W) were appointed at the 34 Annual General Meeting of the Company to holdoffice for a term of 5 consecutive years until the conclusion of 39 Annual General Meetingof the Company. The Auditors have confirmed that they are not disqualified from continuingas Auditors of the Company.

b) Secretarial Auditor and Secretarial Audit Report

The Board has appointed M/s. GMJ & Associates Practicing Company Secretaries tocarry out Secretarial Audit under the provisions of Section 204 of the Companies Act 2013for the Financial Year 2017- 18. The Report of Secretarial Auditor for the Financial Year2017-18 is annexed to this report as Annexure IV.

As per the Secretarial Audit report the Company has not appointed Whole Time CompanySecretary during the Financial Year 2017-18 and therefore not complied with the provisionsof Section 203 of the Companies Act 2013.

The Company is in process to find suitable candidate for appointment as a CompanySecretary of the Company.

22. Other Disclosures/Reporting:

Your Directors further state that during the year under review:

a) no amount is transferred to General Reserve;

b) there was no change in nature of Business;

c) there was no change in Share Capital of the Company;

d) the Company has not taken any deposits from Public or Shareholders of the Company;

e) there were no significant / material orders passed by the Regulators or Courts orTribunals impacting going concern status of your Company and its operations in future;

f) there were no other material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which this financial statements relate and the date of this Report and

g) there are no qualifications reservation or adverse remark or disclaimer made by theStatutory Auditors in their Report

23. Secretarial Standards

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto 'Meetings of the Board of Directors' and 'General Meeting' respectively have beenduly followed by the Company.

24. Personnel

Your Company continued to enjoy cordial relations with its employees at all locations.Your Directors take this opportunity to record their appreciation for the significantoutstanding contribution made by the employees at all levels.

25. Acknowledgement

Your Directors express their deep gratitude for the co-operation and support extendedto the Company by its Members Customers Suppliers Bankers and various Governmentagencies.

For and on behalf of the Board
Nupur Somani B. K. Toshniwal
Managing Director Director
(DIN: 00816788) (DIN: 00048019)
Sanjay Jain
Director
(DIN: 00047973)
Place: Mumbai
Date: August 14 2018

Annexure I

Information as required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

1. Ratio of remuneration of each Director to the median remuneration of all theemployees of the Company for the FinancialYear 2017-18 is as follows:

Name of the Director Total remuneration Ratio of remuneration of Director to the median remuneration
(In Rs.)
Adarsh Somani 0 0:1
Sanjay Jain 0 0:1
B. K. Toshniwal 0 0:1
Nupur Somani 0 0:1

Notes:

a) Mrs. Nupur Somani Managing Director of the Company do not draw any remunerationfrom the Company. Further no sitting fees is paid to the Other Directors for attendingthe Meetings of Board and Committees.

b) Median remuneration of the Company for all its employees was Rs. 365943/- for theFinancial Year 2017-18.

2. Details of percentage increase in the remuneration of each Director CFO andCompany Secretary in the FinancialYear 2017-18 are as follows:

Name Designation Remuneration (in Rs.) Increase (%)
2017-18 2016 -17
Adarsh Somani Director 0 0 0%
Sanjay Jain Director 0 0 0%
B. K. Toshniwal Director 0 0 0%
Nupur Somani Managing Director 0 0 0%
Shashikant Sharma CFO 610020 610020 0%

3. Percentage increase in the median remuneration of all employees in theFinancialYear 2017-18:

2017-18 (Rs.) 2016-17 (Rs.) Increase (%)
Median remuneration of all
employees per annum 365943 365310 0.17%

4. Number of permanent employees on the rolls of the Company as on March 31 2018:

Total Number of Employees on pay roll during the FinancialYear ended March 31 2018 is2.

5. Comparison of average percentage increase in salary of employees other than thekey managerial personnel and the percentage increase in the Key managerial remuneration:

Particulars 2017-18 2016-17 Increase%
Average salary of all employees 121866 120600 1.54%
( other than Key Managerial Personnel)
Average salary of Key Managerial Personnel 610020 610020 0%

6. Affirmation :

Pursuant to Rule 5(1) (xii) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 it is affirmed that the remuneration paid to theDirectors Key Managerial Personnel and Senior Management is as per the Remunerationpolicy of the Company.

For and on behalf of the Board
Nupur Somani B. K Toshniwal
Managing Director Director
(DIN- 00816788) (DIN-00048019)
Sanjay Jain
Director
(DIN- 00047973)
Place: Mumbai
Date: August 14 2018