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Sarvamangal Mercantile Co. Ltd.

BSE: 506190 Sector: Others
NSE: N.A. ISIN Code: INE978L01016
BSE 05:30 | 01 Jan Sarvamangal Mercantile Co. Ltd
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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 SIXTH ANNUAL REPORT of theCompany together with the Audited Financial Statement(s) of the Company for the year endedMarch 312019.

1. Financial Summary:

(Rs. In Lakhs)
Particulars 2018-19 2017-18
Gross Profit/Loss 31.86 15.73
Deduction there from:
Finance Cost 53.39 49.78
Depreciation & amortization expenses 0.15 0.15
Profit (Loss) before tax (21.68) (34.20)
Taxation
Current Tax - -
MAT Credit Entitlement - 2.02
Income Tax for earlier years - -
Profit(Loss) after tax (21.68) (36.22)

2. Financial Performance

Sales and Other Income for the year ended March 312019 amounted to Rs. 364.02 Lakhs asagainst Rs. 39.97 lakhs in the previous Financial Year. Net loss for the year under reviewwas Rs. 21.68 lakhs as against loss of Rs. 36.22 lakhs in the previous Financial Year.

3. Dividend

Your Directors do not recommend any dividend for the Financial Year 2018-19.

4. Number of Board Meetings:

During the year March 312019 Five (5) Meeting of the Board were held on the followingdates:

(i) May 30 2018

(ii) August 14 2018

(iii) November 14 2018

(iv) November 29 2018

(v) February 14 2019

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 312019:

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 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 and etc.

During the year ended March 31 2019 Four Meetings of the Audit Committee were held onfollowing dates:

(i) May 30 2018

(ii) August 14 2018

(iii) November 14 2018

(iv) February 14 2019

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 2019:

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

During the year ended March 31 2019 one meeting of the Nomination and RemunerationCommittee was held on November 29 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 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 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 at Workplace.

The Company has in place adopted Policy on Prevention Prohibition and Redressal ofSexual Harassment. The policy aims to provide protection to employees at the workplace andprevent and redress complaints of sexual harassment and for matters connected orincidental thereto.

Further as there are only 3 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 2018-19.

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 February 14 2019 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 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.

Evaluation of Independent Directors was done by the Entire board except the Directorbeing evaluated.

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 and 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''notified under Rule 7 of the Companies (Accounts) Rules 2014 have been provided in Noteno. 25 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 2019the 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 2019 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 forming part ofthis 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.

Pursuant to the amended provisions of Section 92(3) and 134(3)(a) of the Companies Act2013 the Annual Return of the Company in Form mGT-7 is available on the Company's Websitewww.sarvamangalmercantile.com.

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.

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 34th Annual General Meeting of the Company to holdoffice for a term of 5 consecutive years until the conclusion of 39th Annual GeneralMeeting of the Company. The Auditors have confirmed that they are not disqualified fromcontinuing as 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 2018- 19. The Report of Secretarial Auditor for the Financial Year2018-19 is annexed to this report as Annexure IV.

The Board in its meeting held on 16th May 2019 has appointed Ms. Nirali Mehta CompanySecretary as the Secretarial Auditor for the financial year 2019-20.

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 Equity 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' respectivelyhave been duly 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: 12 August 2019