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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 FOURTH ANNUAL REPORT ofthe Company together with the Audited Financial Statement(s) of the Company for the yearended March 31 2017.

Financial Summary:
Rs. In Lacs
Particulars 2016-17 2015-16
Gross Profit/Loss (55.09) 7.98
Deduction there from:
Finance Cost 35.82 32.52
Depreciation & amortization expenses 0.15 0.15
Profit (Loss) before tax (91.06) (24.69)
Taxation
Current Tax - -
Income Tax for earlier years - 0.78
Profit(Loss) after tax (91.06) (25.47)
Profit b/f from last year 885.58 911.06
Balance carried to Balance sheet 794.53 885.58

2. Financial Performance

Sales and other Income for the year ended March 31 2017 amounted to Rs. 2.86 crores asagainst Rs. 0.87 crores in the previous Financial Year. Net loss for the year under reviewwas Rs. 0.91 crores as against loss of Rs. 0.25 crores in the previous FinancialYear.

3. Dividend

Your Directors do not recommend any dividend for the FinancialYear 2016-17.

4. Number of Board Meetings:

During the year March 31 2017 Four (4) Meeting of the Board were held on thefollowing dates: (i) May 25 2016 (ii) August 10 2016 (iii) November 12 2016 (iv)February 14 2017

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 2017:

Name Designation Non-Executive/Independent
Mr. B.K .Toshniwal Chairperson 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 inter aliainclude overseeing financial reporting processes reviewing periodic financial resultsfinancial statements and adequacy of internal control systems with the Managementapproval of related party transactions recommendation of appointment and remuneration ofAuditors of the Company etc.

During the year ended March 31 2017 Four Meetings of the Audit Committee were held onfollowing dates: i. May 25 2016 ii. August 10 2016 iii. November 12 2016 iv. February14 2017.

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 2017:

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

During the year March 31 2017 no meeting of the Nomination and RemunerationCommittee was held.

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 alia provides thata person should possess adequate qualification expertise and experience for the positionhe / she is considered for appointment. The Committee has discretion to decide whetherqualification expertise and experience possessed by a person is sufficient / satisfactoryfor 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 Chairperson 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 HarassmentatWorkplace.

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.

The Company has not received any complaint of sexual harassment during the financialyear 2016-17.

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 separate meeting who also reviewed the performance of the Board as whole.

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 alia degreeof fulfillment of key responsibilities Board Structure and Composition effectiveness ofBoard 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.

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. 8 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 Accounting Standard – 18 (AS-18) ‘'RelatedParty Dislcosures'' notified under Rule 7 of the Companies (Accounts) Rules 2014 havebeen provided in Note No. 17 of the 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 31st March 2017the 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 31stMarch 2017 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 set out in the annexure to this 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

A report in the form of Management Discussion and Analysis Report is annexed hereto as AnnexureIV and forms part of this 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 offer himself for re-appointmentas Director liable to retire by rotation.

During the year under review there was no change in the office of Director and KeyManagerial Personnel of the Company.

21. Auditors

a) Statutory Auditors

Pursuant to Section 139(2) of the Companies Act 2013 read with rule 6 of Companies(Audit and Auditors) Rules 2014 M/s. S.G. Kabra & Co. Chartered Accountants retireat the conclusion of the 34th Annual General Meeting.

Pursuant to the provisions of the Companies Act 2013 (‘'the Act ‘')and theRules framed there under it is proposed to appoint M/s. R. Soni & Co. CharteredAccountants as Statutory Auditors of the Company for a period of 5 years i.e. to holdoffice from the conclusion of the 34th Annual General Meeting until the conclusion of the39th Annual General Meeting of the Company to be held in the Year 2022 (subject toratification of their appointment by the Members at every Annual General Meeting heldafter the forthcoming Annual General Meeting). As required under the provisions of Section139(1) of the Act the Company has received a written consent and Certificate from M/s. R.Soni & Co. Chartered Accountants to the effect that their appointment if madewould be in accordance with the provisions of the Companies Act 2013 and the Rules framedthere under and that they satisfy the criteria provided in Section 141 of the Act.

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 2016- 17. The Report of Secretarial Auditor is annexed to thisreport as Annexure V forming part of this Report.

For and on behalf of the Board
Nupur Somani B. K.Toshniwal
Managing Director Director
(DIN: 00816788) (DIN: 00048019)
Sanjay Jain
Director
(DIN: 00047973)
Date: May 29 2017
Place: Mumbai