Corporate Merchant Bankers Ltd Directors Report.

To the Members,

We are pleased to present the 25th Annual Report on our business and operations for the year ended March 31, 2019, of Corporate Merchant Bankers Limited ("Company")along with the audited consolidated and standalone financial statements for the year ended March 31, 2019.

1. BACKGROUND:

Company was incorporated under Companies Act, 1956 on August, 26 1994. The Company is a Non Deposit Accepting Non-Banking Finance Company ("NBFC"), holding "Certificate of Registration no.: 14.00060 from the Reserve Bank of India ("RBI") dated February 24,1998. Equity Shares of the Company are listed on BSE Limited (BSE) and Metropolitan Stock Exchange of India Limited (MSEI) (formerly known as MCX Stock Exchange Limited)

2. FINANCIAL SUMMARY/HIGH LIGHTS/PERFORMANCE OF THE COMPANY (STANDALONE/CONSOLIDATED):

The Companys financial results are as under:

Description

Standalone

Consolidated

31.03.19 31.03.18 31.03.19 31.03.18
Total revenue 16,16,757 19,85,655 16,16,757 19,85,655
Expenses:
Employee Benefit Expenses 3,26,565 5,87,300 3,26,565 5,87,300
Other Expenses 6,96,361 7,46,477 7,12,750 7,75,207
Preliminary Expenses 5,72,500 5,72,500 5,82,500 5,82,500
Profit before tax 21,331 79,378 (5,058) 40,648
Tax Expenses:
Less: Current tax 8,172 23,119 8,172 40,648
Add: Deferred tax - - - -
Profit after tax 13,159 56,259 -13,230 17,529
Earnings Per Share (EPS)
Basic 0.00 0.02 0.00 0.01
Diluted 0.00 0.02 0.00 0.01

3. BUSINESS PERFORMANCE

The Company is a Non-Banking Financial Company registered with the Reserve Bank of India. There has been no change in the business of the Company, during the year under review.

The consolidated revenue of the Company for the year ended March 31, 2019 stood at 16,16,757/- as against Rs. 19,86,655/-for the previous year. The consolidated Net loss for the financial year ended March 31, 2019 stood at Rs. 13,230/- as against the previous years Net Profit of Rs.17,529/-. The Reserves and Surplus as of March 31, 2019 stood at Rs.5,85,722/- as against Rs. 5,98,952/- of the period as of March 31, 2018. The above figures are extracted from the financial statements as per Indian Generally Accepted Accounting Principles (GAAP).

The Standalone revenue of the Company for the year ended March 31, 2019 stood at 16,16,757/- as against Rs. 19,86,655/-for the previous year. The Standalone Net Profit for the financial year ended March 31, 2019 stood at Rs. 13,159/- as against the previous years Net Profit of Rs.56,259/-. The Reserves and Surplus as of March 31, 2019 stood at Rs.6,72,341/- as against Rs. 6,59,182/- of the period as of March 31, 2018. The above figures are extracted from the financial statements as per Indian Generally Accepted Accounting Principles (GAAP).

4. STATE OF THE COMPANYS AFFAIRS

Your Company continues to take effective steps in broad-basing its range of activities as the company is a NBFC and the main business of the Company is to make investment and to give loans & advances. The performance of the Company during the period under review has been satisfactory.

5. TRANSFER TO RESERVES

As per provisions of Section 45-IC of Reserve Bank of India Act, 1934, the NBFC Company is required to transfer sum not less than twenty percent of its net profit every year. Therefore, the Company has transferred Rs. 2,632/-, being twenty percent of net profits for the financial year to the Statutory Reserve.

6. DIVIDEND

In view of need to conserve the resources of the company for the future growth, your Companys Directors do not recommend any dividend to the shareholders of the Company for the Financial Year 2018-19

7. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

In the opinion of the Board, there has been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

8. SUBSIDIARIES

Details of Subsidiary Companies, Joint Ventures and Associate Companies, and their financial position.

Your Company has 1 (one) subsidiary company for the financial year ended on March 31, 2019. The information as required under the first proviso to sub-section (3) of Section 129 is given in Form AOC-1 in Annexure I.

9. SHARE CAPITAL

The paid up equity share capital as on March 31, 2019 was Rs. 3,30,00,000. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights, sweat equity shares nor has it granted any stock options.

10. FAMILIARIZATION PROGRAMME

The Company has formulated a Familiarization Programme for Independent Directors with an aim to familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc., to provide them with better understanding of the business and operations of the Company and so as to enable them to contribute significantly to the Company.

11. RISK MANAGEMENT POLICY

Risk Management Policy identifies, communicate and manage risks across the organization. The policy also ensures that responsibilities have been appropriately delegated for risk management. Key Risk and mitigation measures are provided in the Management Discussion and Analysis annexed to the Annual Report.

12. INTERNAL FINANCIAL CONTROL SYSTEM

The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

13. VIGIL MECHANISM

The Company believes in the conduct of its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The Company is committed to develop a culture in which every employee feels free to raise concerns about any poor or unacceptable practice and misconduct. In order to maintain the standards has adopted lays down this Whistle Blower Policy to provide a framework to promote responsible and secure whistle blowing. The Board of Directors of your Company has adopted the Vigil Mechanism and Whistle Blower Policy in compliance of Companies Act, 2013.

14. HUMAN RESOURCES

The Company seeks to nurture a mutually beneficial relationship with its employees. This relationship is characterized by the investment which the Company makes in its employees by providing challenging roles and assignments opportunities for personal growth, relevant and timely performance support, training and an enabling environment. The Company seeks to create a workplace which combines achievement orientation with care for employees. The Company lists people as one of its stated core values.

Your Company takes the pride in the Commitment, Competence and dedication shown by its employees in all areas of business. Various HR initiatives are taken to align the HR Policies to the growing requirements of the business.

15. COMPLIANCE

The Company has complied and continues to comply with all the applicable regulations, circulars and guidelines issued by the Ministry of Corporate Affairs (MCA), Stock Exchange(s), Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) etc.

The Company has complied with all applicable provisions of the Companies Act, 1956 and the Companies Act, 2013, Listing Agreement executed with the Stock Exchanges, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable rules/regulations/guidelines issued from time to time.

16. DEPOSITS

During the year under review, the Company has not accepted any deposits from the public under Section 73 of the Companies Act, 2013 and rules made thereunder. There is no unclaimed or unpaid deposit lying with the Company.

17. RBI GUIDELINES

As a Non Deposit taking Non-Banking Finance Company, your Company always aims to operate in compliance with applicable RBI laws and regulations and employs its best efforts towards achieving the same.

18. CHANGES IN DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Madhagiri Vijay Kumar, has resigned as Director of the Company w.e.f 28th Mar 2019 and Mr. Ramesh Chand Jain has resigned as Director of the Company w.e.f 28th Mar 2019.

RE-APPOINTMENT

As per Article 34(1) of the Articles of Association of the Company, one third of the Directors are liable to retire by rotation at the Annual General Meeting of the Company. Mr. Parne Venkateshwar Reddy, Director is liable to retire by rotation.

19. EVALUATION OF DIRECTORS, BOARD AND COMMITTEES

As required under the provisions of Section 134(3)(p), the Board has carried out an annual performance evaluation of its own performance, and the manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place and has been circulated to all the directors to seek their response on the evaluation of the entire Board and independent directors. The Nomination and Remuneration & Compensation Committee has carried out evaluation of directors performance.

The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors/ Committees of which he/she is a member/general meetings, participating constructively and actively in the meetings of the Board/committees of the Board etc.

20. PARTICULAR OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Directors Ratio to median remuneration*
Vandana Gupta NIL
Ramesh Chand Jain NIL
Venkateshwar Parne Reddy NIL
Satyanarayana Kaduri NIL
Naubahar Singh NIL
Madhagiri Kumar Vijay NIL

*the expression" median" mean the numerical value separating the higher half of a population from the lower half and the median of a finite list of numbers may be found by arranging all the observations from lowest value to highest value and picking the middle one.

ii) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year:

Nil

iii) The percentage increase in the median remuneration of employees in the financial year: NIL

iv) the number of Permanent employees on the rolls of the company : 3 (three)

v) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: There was no remuneration paid to employees. Hence, the comparison between the two cannot be made.

vi) the key parameters for any variable component of remuneration availed by the directors: Nil

vii) Affirmation that the remuneration is as per the remuneration policy of the company:

It is hereby affirmed that the remuneration paid during the year is as per the Remuneration Policy of the Company.

DISCLOSURE UNDER RULE 5 121 & 131 OF THE COMPANIES fAPPOINTMENT AND REMUNERATION OR MANAGERIAL PERSONNEL! RULES. 2014

There is no directors/employees in the Company for which disclosure have to be made under the provisions of Rule 5 (2) & (3) of the Companies (Appointment and Remuneration or Managerial Personnel) Rules, 2014.

A. Details of Top ten employees in terms of remuneration drawn:

Name & Designation Age Remunerat ion Nature of Emplo yment Qualiflcati on & Experience Date of commenceme nt of Employment Last Employ ment %of Equity Share held Whether related to Director or Manager
Satyanarayana Kaduri (CEO and Director) 40 NIL Whole Time B.Com, ICWA and 12 years appx. 02.02.2016 GRM Projects & Construe tions Pvt. Ltd. Nil No
Suresh Kumar Ciddam (CFO) 45 NIL Whole Time M.Sc (IT) and 10 years appx. 02.02.2016 RAM Informati cs Ltd. Nil No

B. Details of other employees under aforesaid Rules:

Nil

21. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys policy on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub section (3) of Section 178 of the Companies Act, 2013, as is adopted by the Board.

The Company has adopted a comprehensive policy on Nomination and Remuneration of Directors on the Board. As per such policy, candidates proposed to be appointed as Directors on the Board shall be first reviewed by the Nomination and Remuneration Committee in its duly convened Meeting. The Nomination and Remuneration Committee shall formulate the criteria for determining the qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the Remuneration for the Directors, Key Managerial Personnel and other employees. The Nomination and Remuneration Committee shall ensure that—

a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) Remuneration to directors and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals. During the year under review, none of the Directors of the company receive any remuneration.

22. INDEPENDENT DIRECTORS

The Board has received the declaration from all the Independent Directors as per the Section 149(7) of the Companies Act, 2013 and the Board is satisfied that all the Independent Directors meet the criterion of independence as mentioned in Section 149(6) of the Companies Act, 2013.

23. SEPARATE MEETING OF INDEPENDENT DIRECTORS

In due compliance with the provisions of the Companies Act, 2013 read with the rules made there under a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole was evaluated, taking into account the views of directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committees and individual directors was discussed.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE U/S 186

Corporate Merchant Bankers Limited is a registered NBFC and the main objects of the Company is to provide loan, guarantees and made investments. Hence, the Company does not fall under the purview of the provisions of Section 186 of the Companies Act, 2013 and rules made there under w.r.t its investment and lending activities. Details of Loans, Guarantees and Investments are given in the notes to the Financial Statements.

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Pursuant to the provisions of Section 188 of the Companies Act, 2013 read with the rules made there under and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report.

26. MEETINGS OF THE BAORD

The agenda and Notice for the Meetings is prepared and circulated in advance to the Directors. The Board of Directors of the Company met Six (06) times during the financial year 2018-19 on 30.05.2018, 01.08.2019, 14.08.2018, 04.09.2018, 14.11.2018 and 28.01.2019 Details of attendance of board meetings by directors are as follows:

Name of the Director Nos. of meetings attended
Ramesh Chand Jain 06
Parne Venkateshwar Reddy 06
Satyanarayana Kaduri 06
Vandana Gupta 06
Naubahar Singh 06
Madhagiri Kumar Vijay 06

The necessary quorum was present in all the meetings. The intervening gap between any two meetings was not more than one hundred and twenty days as prescribed by the Companies Act, 2013.

27. COMMITTEESOFTHE BOARD:

AUDIT COMMITTEE:

The Audit Committee comprises of three directors namely, Mr. Venkateshwar Parne Reddy - Chairman, Ms. Vandana Gupta, Mr. Naubahar Singh.

The Audit Committee met Four (4) times during the financial year 2018-19 on 30.05.2018, 14.08.2018, 14.11.2018 and 28.01.2019. Details of attendance of board meetings by directors are as follows:

Name of the Member Nos. of meetings attended
Parne Venkateshwar Reddy 4
Vandana Gupta 4
Naubahar Singh 4

During the year under review, the Board accepted all the recommendations made by the Audit Committee of the Board.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee comprises of three directors namely, Mr. Venkateshwar Parne Reddy - Member , Ms. Vandana Gupta-Member, Mr. Naubahar Singh- Chairman.

The Nomination and Remuneration Committee met two (2) times during the financial year 2018-19 on 04.09.2018 and 28.01.2019. Details of attendance of board meetings by directors are as follows:

Name of the Member Nos. of meetings attended
Venkateshwar Reddy Parne 02
Vandana Gupta 02
Naubahar Singh 02

STAKEHOLDER RELATIONSHIP COMMITTEE:

The Stakeholder Relationship Committee looks into the redressal of the shareholders complaints in respect of any matter including transfer of shares, non -receipt of annual report, non -receipt of declared dividend etc. As on date, this Committee comprises of three directors namely, Mr. Venkateshwar Parne Reddy- Chairman, Ms. Vandana Gupta-Member, Mr Naubahar Singh-Member.

The Stakeholder Relationship Committee meet two (2) times during the financial year 2018-19 on 04.09.2018 and 28.01.2019. Details of attendance of board meetings by directors are as follows:

Name of the Member Nos. of meetings attended
Venkateshwar Reddy Parne 02
Vandana Gupta 02
Naubahar Singh 02

RISK MANAGEMENT COMMITTEE:

The Company had re-constituted the Risk Management Committee. As on date, this Committee comprises of three directors namely, Mr. Venkateshwar Parne Reddy- Chairman, Ms. Vandana Gupta - Member, Mr.Naubahar Singh - Member.

Risk Management Committee not met during the financial year 2018-2019.

28. Auditors

STATUTORY AUDITORS

Mr. Mulraj D Gala, Chartered Accountants (Membership Number 041206) who are the Financial Auditors of the Company hold office as financial auditors until the conclusion of the 31st Annual General Meeting of the Company.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by M/s VCSR & Associates, Practicing Company Secretaries, and his report is annexed as Annexure II.

INTERNAL AUDITORS

M/s. ARR & Co., Chartered Accountants, had appointed by the Board of Directors of the Company to conduct the Internal Audit of the Company as per the provisions of the Companies Act, 2013 read with the Rules made there under.

29. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure III.

30. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company primarily being an investment company and not involved in any industrial or manufacturing activities, the Company has no particulars to report regarding conservation of energy and technology absorption as required under section 134 of the Companies Act, 2013 and Rules made there under. During the year under review, the Company does not have any Foreign Exchange Earnings and outgo.

31. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (5) OF THE COMPANIES ACT, 2013

Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 the Directors of your company confirm that:

a) In the preparation of the Annual Accounts for the financial year ended March 31, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgements 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 profit of the company for that period;

c) 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.

d) The Directors have prepared the Annual Accounts for the financial year ended March 31, 2018, on a "going concern basis".

e) The Board of 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.

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

g) The Board of Directors have adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

32. CORPORATE GOVERNANCE

Since, the paid- up capital of the Company is less than Rs. 10 Crores and Net worth is less than Rs. 25 Crores, the provisions of the Corporate Governance as stipulated under Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company. However, your Company has made every effort to comply with the provisions of the Corporate Governance and to see that the interest of the Shareholders and the Company are properly served. It has always been the Companys endeavor to excel through better Corporate Governance and fair & transparent practices,many of which have already been in place even before they were mandated by the law of land.

The management of Company believes that it will further enhance the level of Corporate Governance in the Company.

33. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to provisions of Section 135 of the Companies Act, 2013 read with the rules made there under, the criteria for companying with the CSR activity does not applicable to the Company throughout the year.

34. DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 read with Rules there under, the Company has not received any complaint of sexual harassment during the year under review.

35. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There has been no significant and material order passed by any regulator, courts or tribunals impacting the going concern status and operations of the Company in future.

36. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report has been appended separately, which forms part of this report and the Annual Report.

37. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under section 143(12) of the Companies Act, 2013.

38. ACKNOWLEDGEMENT

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, bankers, Regulatory and Government authorities, Stock Exchanges and business associates for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent all round operational performance at all levels.

By Order of Board
Corporate Merchant Bankers Limited
Date: September 05 2019 (SATYANARAYANAKADURI) (PARNE VENKATESHWAR REDDY)
Place: New Delhi Director Director
DIN:06806811 DIN:06446233