adarsh mercantile ltd Directors report

Dear Shareholders,

Your Directors take pleasure in presenting the Annual Report together with the Audited Annual Accounts of your Company for the year ended March 31, 2023.

(Amount in Rs. hundreds)

	Standalone		Consolidated
Financial Results	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Particulars	Amount	Amount	Amount	Amount
i. Total Revenue	54,337	1,01,720	54,337	1,01,720
ii. Earnings Before Interest, Depreciation, Taxation and Amortizati on (EBIDT A)	6,137	12,635	6,137	12,635
iii. Finance Cost	23,730	21,691	23,730	21,691
iv. Profit before Taxation (PBT)	(22,292)	(13,845)	(22,292)	(13,845)
v. Tax	-	26	-	26
vi. Income Tax for earlier years	(343)	10	(343)	10
vii. Profit after Taxation (PAT)	(34,055)	(13,881)	(34,055)	(13,881)
viii. Share of Profit/ (Loss) of Associate	-	-	6,513	18,451
ix. Profit for the period	(34,055)	(13,881)	(27,542)	4,570
x. Other Comprehensive Income (net of tax)	23,504	29,908	26,319	34,340
xi. Total Comprehensive Income	(10,557)	16,027	(1,222)	38,910
xii. Profit brought forward from previous year	1,56,300	1,56,168	2,02,731	1,84,147
xiii. Surplus/ (Deficit) in the Statement of Profit & Loss Account	(34,055)	(13,881)	(27,542)	4,570
xiv. Transfer to General Reserve	Nil	Nil	Nil	Nil
xv. Transfer from OCI Reserve	8,357	14,014	8,357	14,014
xvi. Balance Carried to Balance Sheet	1,30,602	1,56,300	1,83,545	2,02,731

STATE OF COMPANYS AFFAIRS AND OPERATIONS

The Company is engaged in the business of Trading of goods, shares and securities and investments in Mutual Funds, Shares & Securities andhas earned revenue ofRs. 54.38lakhscompared to Rs. 101.72lakhswhichislower by 46.54% than last year.

Your Company has incurred a net loss of Rs. 34.06 lakhs during the year compared to the net loss of Rs. 13.88 lakhs in the previous year. A detailed review of the operations, performance of the Company and its business is given in the Management Discussion & Analysis, which forms part of the Annual Report.

There is no change in the business of the Company during the financial year 2022-23.

PERFORMANCE & FINANCIAL POSITION OF ASSOCIATE ASSOCIATE - AVON CREDIT PVTLTD

The Company has reported total revenue of Rs. 90.98 lakhs during the year as compared to Rs. 98.24 lakhs in the previous year and has earned a Net Profit of Rs. 31.79lakhs as compared to a net profit of Rs. 56.49 lakhs in the previous year.

The Associate Company has not directly contributed to the Revenue and the profit earned since they have not passed on any profit to the Company earned by them.

OUTLOOK

Your Company is making all efforts to accelerate the growth of its business. In spite of the market risk faced by your Company, your Directors are optimistic about the future prospects of the Company.

DIVIDEND

In view of the loss incurred by Company, the Board is unable to declare any dividend on equity shares of the Company for the financial year ended 31st March, 2023.

ISSUE OF SHARES

The Company has not issued any shares during the financial year under review.

TRANSFER TO RESERVES

Since there is no profit during the year, the Board is unable to transfer any amount to the Reserves.

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 have been followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) TheDirectors have prepared the annual accounts on a going concern basis;

v) The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information related to conservation of energy, Research & Development, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies 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.

CORPORATE GOVERNANCE

Your Company has practiced sound Corporate Governance and taken necessary actions at appropriate times for enhancing and meeting stakeholders expectations while continuing to comply with the mandatory provisions of Corporate Governance. Your Company has complied with the requirements of applicable Regulations of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as issued by Securities and Exchange Board of India and as amended from time to time. Your Company has given its deliberations to provide all the information in the Directors Report and the Corporate Governance Report as per the requirements of Companies Act, 2013 and the Listing Agreement entered by the Company with the Stock Exchange, as a matter of prudence and good governance.

A Report on Corporate Governance along with a certificate from M/s N K S J & Associates, Chartered Accountants, Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance and certification by CEO & CFO are given in Annexure - ‘B, ‘C & ‘D respectively.

CODE OF CONDUCT

The Code of Conduct for Directors, KMPs and Senior Executive of the Company is already in force and the same has been placed on the Companys website: www.adarshmercantile.inand the declaration to this effect is given in Annexure - ‘E.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In terms of the SEBI (Prohibition of Insider Trading) Regulations, 2015, your Company has already adopted the Code of Conduct for prevention of Insider Trading and the same is also placed on the Companys website: www.adarshmercantile.in.Further, in accordance with the provisions of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors of the Company have adopted the code of practices and procedures for fair disclosure of Unpublished Price Sensitive Information and 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 the Companies 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, attached hereto.

COMPANYS WEBSITE

The website of your Company, www. adarshmercantile.in has been designed to present the Companys businesses up-front on the home page. The site carries a comprehensive database of information including the Financial Results of your Company, Shareholding pattern, Directors & Corporate Profile, details of Board Committees, Corporate Policies and business activities of your Company. All the mandatory information and disclosures as per the requirements of the Companies Act, 2013 and Companies Rules 2014 and as per the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 has been uploaded.

LISTING OF SECURITIES IN STOCK EXCHANGES

The shares of the Company are presently listed at BSE Limited. The Company is registered with both NSDL and CDSL for holding the shares in dematerialized form and open for trading. The Company has paid fees to the Depositories.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Retirement by Rotation

Mr. Aritra Basu (DIN :06779222), Director of the Company, pursuant to the provisions of Section 152(6) and other applicable provisions, of the Companies Act, 2013, retires by rotation at the ensuing Annual General Meeting and being eligible, offered himself for reappointment.

b) Appointment / re-appointment of Whole time Director & Key Managerial Personnel (KMP):

The present Whole-time Key Managerial Personnel of the Company as on 31st March, 2023 are as follows :-

i. Mrs. Suchita Chhawchharia - Executive Director

ii. Mr. Shiv Shankar Sharma - Chief Financial Officer

During the year under review, there was no change in the composition of the Board of Directors.

None of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013 and rules made thereunder or any other provisions of the Companies Act, 2013. The Directors have also made necessary disclosures to the extent as required under provisions of section 184(1) as applicable. In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act 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 affirmed compliance with the code of conduct of Board of Directors and Senior Management on an annual basis.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is not falling under the purview of section 135 of the Companies Act, 2013 and the relevant Rules made there under. Thus the Board is not required to constitute the CSR Committee and nor has to comply with any of the provisions thereof.

AUDITORS AND THEIR REPORTS

(i) Statutory Auditors:

The present Statutory Auditor, M/s NKSJ & Associates, (Firm Registration No. 329563E), Chartered Accountants, holds office upto the conclusion of the Annual General Meeting (AGM) to be held for the Financial Year 2024-25.

The observations made by the Statutory Auditors in their Auditors Report together with the notes to accounts, as append thereto areself-explanatory and hence does not call for any further explanation.

(ii) Internal Auditors:

The Company had appointed M/s NST & Associates, Chartered Accountants, as the Internal Auditors of the Company for the Financial Year 2022-23 and they have furnished their report. The Board has re-appointed them as Internal Auditors for the FY 2023-24.

(iii) Secretarial Auditor:

The Board had appointed Mr. Santosh Kumar Tibrewalla, Practicing Company Secretary, as the Secretarial Auditor of the Company to carry out the Secretarial Audit for the year 2022- 23under the provisions of section 204 of the Companies Act, 2013. The report of the Secretarial Auditor in Form MR 3 is enclosed as Annexure - ‘H to this Boards Report, which is self-explanatory and hence do not call for any further explanation.

Secretarial Compliance Report

Pursuant to Regulation 24A of the SEBI Listing Regulation and recent amendment on the same thereto, Every Listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex a secretarial Compliance Report given by a company secretary in practice, in such form as specified, with the annual report of the listed entity.

The Company during the year under review does not have any material unlisted subsidiary and herewith attached as Annexure -‘I. The Secretarial Compliance Report issued by Ms. Kalpana Tekriwal, Practicing Company Secretary (CP No. 22484) for the year ended on 31st March, 2023.

DISCLOSURES AS PER APPLICABLE ACT AND LISTING AGREEMENT

i) Related Party Transactions:

All transaction entered with related parties during the FY 2022-23 were on arms length 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 transactions with the Companys Promoters, Directors and others as defined in section 2(76) of the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 which may have potential conflict of interest with the Company at large.

The necessary disclosures regarding the related party transactions in accordance to the IND AS required in Form-AOC-2 are given in the notes to accounts. The Company has also formulated a policy on dealing with the Related Party Transactions and necessary approval of the Audit Committee and Board of Directors were taken wherever required in accordance with the Policy. The Company has not entered into any specific contract with related parties.

Since the Company has entered into transaction with its Associates, firms/ Companies in which Directors are interested disclosure as per Para A of Schedule V is provided in Notes to the Accounts under ‘Related Party Disclosures.

ii) Number of Board Meetings:

The Board of Directors met 4 (four) times in the year 2022-23. The Details of the Board meeting and attendance of the Directors are provided in the Corporate Governance Report, attached as Annexure to this Boards Report.

iii) Committees of the Board :

4 (Four)Committees of Directors are in force as on March 31, 2023 viz. the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee and the Share Transfer Committee. A detail note on the Committee is provided in the Corporate Governance Report section of this Annual Report.

iv) Composition of Audit Committee:

The Audit Committee comprises of three Non-Executive Directors including two Independent Directors as on March 31, 2023.

• Manish Khaitan - Non Executive Independent Director

• Sundar Lal Mohta - Non Executive Independent Director

• Aritra Basu - Non Executive Director

v) Extracts of Annual Return:

Pursuant to Section 134(3)(a) of the Companies Act, 2013 and amendments thereof, the Annual Return of the Company is placed on the website of the company at www. adarshmercantile. in.

This Annual Return is subject to such changes / alterations / modifications as may be required to carry out subsequent to the adoption of the Directors Report by the Shareholders at the Annual general Meeting and receipt of Certificate from Practising Company Secretary (PCS) which the Shareholders agree and empower the Board / Company and a copy of the final Annual Return as may be filed with the Ministry of Corporate Affairs would be furnished on the website of the Company.

vi) Risk Analysis:

The Board has developed and implemented a risk management policy identifying therein the elements of risk that may threaten the existence of the Company. The Company has a mechanism that helps the Board to keep an overall watch on the business risks and informs the Board members about the evaluation, and estimation of the levels of risks involved in a situation, their comparison against benchmarks or standards, and determination of an acceptable level of risk and mitigation plans and periodical reviews are undertaken to ensure 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 and efficient conduct of its business, including adherence to the Companys policy, safeguarding of its assets, the prevention and detection of fraud, error reporting mechanism, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The Company has in place adequate internal financial control as required under section 134(5) (e) of the Act and the same was evaluated by the Audit Committee. During the year such controls were tested with reference to financial statements and no material weakness in the formulation or operations were observed. The Statutory Auditors of the Company conducted audit on the Companys internal financial control over financial 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 funds in Securities and given loan which is within the overall limit and within the powers of the Board as applicable to the Company in terms of section 179 and 186 of the Companies Act, 2013. The particulars of all such loans, guarantees and investments are entered 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 the Company occurred since the end of the Financial Year 2022-23.Ms.Salu Agarwal was appointed as Company Secretary with effect from 21.04.2023.

x) Subsidiaries, Associates or Joint Ventures:

As on 31st March, 2023, Company has only one associate i.e. M/s. Avon Credit Pvt. Ltd. and there is no Company which has become or ceased to be the Companys subsidiary, 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) Rules, 2014 the statement in AOC-1 containing the salient features of the financial statement of the associate Company is given in Annexure -‘J.

The consolidated financial statement in this Annual Report is as per the Indian Accounting Standards specified under section 133 of the Companies Act, 2013 ("the Act"). In accordance with Section 136 of the Act, the audited financial statements, including the consolidated financial statements and related information will be available on our website.

These documents will also be available for inspection during business hours on all working days except Saturday at the Registered Office of the Company and also on the date of the AGM. The Company will also make available copy on specific request by any member of the Company, interested in obtaining the same.

In accordance to regulation 33 of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company opts to submit consolidated financial results only on Annual basis and the same has been intimated to the Stock exchange.

xi) Evaluation of the Boards Performance:

The Board has in place a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board in compliance with the Companies Act, 2013 and applicable Regulations of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.The evaluation was carried out through a structured evaluation process covering various 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 the performance of individual Directors including the Board, as a whole and the Chairman, who were evaluated on parameters such as their participation, contribution at the meetings and otherwise, independent judgments, safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors in their separate meeting. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors in their separate meeting.

The Directors were satisfied with the evaluation results, which reflected the overall engagement 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 laid down a Nomination, Remuneration and Evaluation Policy, in compliance with the provisions of the Companies Act, 2013 read with the Rules made therein and SEBI (LODR) Regulations, 2015 (as amended from time to time). This Policy is formulated to provide a framework and set standards in relation to the followings and details on the same are given in the website 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 a Director.

xiii) Vigil Mechanism (Whistle Blower Policy):

The Company has adopted a whistleblower mechanism for Directors, employees and other person to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct and ethics. The Audit Committee oversees the vigil mechanism and the persons who avail the mechanism are encouraged to escalate to the level of the Audit Committee for any issue of concerns impacting and compromising with the interest of the Company and its stakeholders in any way. This policy also allows the direct access to the Chairperson of the Audit Committee.

The Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of Directors and employees from reprisals or victimization, for whistle blowing in good faith.

Details of establishment of the Vigil Mechanism have been uploaded on the Companys website: www.adarshmercantile. in and also set out in the Corporate Governance Report attached as Annexure to this Boards Report.

xiv) Internal Complaint Committee:

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

xv) Secretarial Standards:

Secretarial Standards, i.e. SS-1,SS-2 and SS-3 relating to ‘Meetings of the Board of Directors ‘General Meetings and ‘Dividend, respectively, to the extent as applicable have been duly followed by the Company.

THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral. During the year under review, no complaints with allegations of sexual harassment were filed.

INDUSTRIAL RELATIONS

The industrial relation during the year 2022-23had been cordial. The Directors take on record the dedicated services and significant efforts made by the Officers, Staff and Workers towards the progress of the Company.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING 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.

APPRECIATION

Your Directors take this opportunity to place on record their gratitude to the Central and State Governments, Bankers and Investors for their continuous support, cooperation and their valuable guidance to the Company and for their trust reposed in the Companys management. The Directors also commend the continuing commitment and dedication of the employees at all levels and the Directors look forward to their continued support in future.

	On behalf of the Board of Directors
Place: Kolkata	For Adarsh Mercantile Limited
Date:10.08.2023
	Sd/-	Sd/-
	Suchita Chhawchharia	Aritra Basu
	Executive Director	Director
	(DIN: 00044063)	(DIN: 06779222)