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Your Directors are pleased to present the Annual Report and the Audited Financial Statements of the Company for the year ended 31 March 2018.
REVIEW OF OPERATIONS
The financial results for the year ended 31 March 2018 have been prepared in accordance with Indian Accounting Standards for the first time and the previous year figures have also been restatedas per Indian Accounting Standards.
During the year the company has reported a profit before tax and exceptional items of Rs.660.28 lakhs (previous year Rs. 328.93 lakhs) and total comprehensive income of Rs.715.59 lakhs (previous year Rs. (2323.78) lakhs).
|Profit/(Loss) Before Interest & Depreciation||835.48||632.08|
|Profit/(Loss) Before Tax & Exceptional items||660.28||328.93|
|Profit/(Loss) Before Tax||562.02||(2752.50)|
|provision for taxation|
|Profit/(Loss) After Tax||77.33||(2862.80)|
|other Comprehensive Income||638.26||539.02|
|total Comprehensive Income for the year||715.59||(2323.78)|
The Board of Directors has not recommended any dividend for the year as the profits are conserved to fund the future plans of the Company.
the Company has neither accepted nor renewed any deposits during the year under review.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant and material orders passed by the regulators or courts or tribunals which would impact the going concern status of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility are not applicable to the Company for the current financial year.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS the particulars of Loans, guarantees and investments covered under section 186 of the Companies Act 2013 are provided in the notes to the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All transactions entered by the Company with related parties were in the ordinary course of business and at arms length pricing basis. There were no materially significant transactions with related parties during the financial year 2017-18 which were in conflict with the interests of the Company. the Board has approved the policy on related party transactions. the policy has been uploaded on the Companys website, under the web link: http://mercantileventures.co.in/files/Related%20Party.pdf
QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There were no qualifications, reservations or adverse remarks in the reports of M/s Mr. R. Kannan, Secretarial Auditor.
COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Companys Policies relating to appointment of directors, payment of managerial remuneration, directors qualifications, positive attributes, independence of directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 are uploaded in the website of the Company in the links http://mercantileventures.co.in/files/CRITERIA%20FOR%20APPOINTMENT%20OF%20INDEPENDENT%20DIRECTORS.pdf http://mercantileventures.co.in/files/Remuneration%20Policy.pdf the Remuneration policy also forms part of the Corporate Governance Report
The Company had six board meetings during the financial year under review. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Details of the same are given in the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry Scenario the real estate market continues to be sluggish during the year. this trend is expected to improve in the ensuing years also.
Future Outlook the main business of the Company is investment in properties for leasing. the revenue stream from the operations is expected to remain flat in the immediate future.
Opportunities and Threats
Market instability in the real estate industry may get balanced due to introduction of Real estate regulation and thus the economic outlook is likely to stimulate growth in real estate and create a positive environment in attracting further investments into the real estate sector.
Risks & Concerns
As per the SeBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Risk Management Committee has to be set up by top 100 listed entities, determined on the basis of market capitalisation, as at the end of the immediate previous financial year. As per this regulation the Company need not constitute a Risk Management Committee. The Company however has constituted a Risk Management Committee to constantly review the technical and commercial risks the company has to face so that the interests of the shareholders are protected. the Risk Management Committee has been formed comprising Ms. Sashikala Srikanth, Director as Chairperson of the committee and the other members are Mr. e n Rangaswami, Whole-time Director and Mr. Padmanabha Sarma, Chief Financial officer. Risk Management Committee ensures that the Company has an appropriate and effective risk management system which carries out risk assessment and ensures that risk mitigation plans are in place by validating the same at regular intervals. the Committee met periodically to study the risks, threats & concerns and submitted reports to the Board of Directors.
Internal Control Systems & their adequacy
Companys Internal Control System has been designed to provide for:
Accurate recording of transactions with internal checks and prompt reporting.
Adherence to applicable accounting standards and policies.
Compliance with applicable statutes, management policies and procedures.
Effective use of resources and safeguarding of assets. the Internal audit was carried out periodically through a practicing chartered accountant. the observations arising out of the audit were periodically reviewed and compliance ensured. the summary of the internal audit observations and management responses were submitted to the Board after review by the Audit Committee.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(5) of the Companies Act, 2013 the Board hereby submits its Responsibility Statement:- (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 profit and loss of the company for the year ended 31 March
(c) The directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis;
(e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively. Internal financial control means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business including adherence to 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 information and
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
SUBSIDIARIES the Company monitors the performance of subsidiary companies inter-alia, by the following means: a) the Company has two material unlisted Indian subsidiaries, and hence, compliance requirements as SeBI (LoDR) Regulations, 2015 has been ensured. b) The Audit Committee reviews the financial statements, in particular, the investments made by the unlisted subsidiary companies. c) our Company formulated a policy on material subsidiary as required, uploaded in the website of the Company in the link http://www.mercantileventures.co.in/files/Material%20Subsidaries-%20Policy.pdf
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements were prepared in accordance with section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies [Accounts] Rules, 2014.Also a separate financial statements of containingthesalientfeatureofthe the subsidiaries and associate is attached to the financial statements.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARIES AND ASSOCIATES
The financial highlights of the subsidiaries and associate company as on 31 March 2018 are given below: (Rs.lakhs)
|Particulars||Oasis Ventures Pvt Ltd||i3 Security Services Pvt Ltd||Rayce Electronic Intelligence India Pvt Ltd||National Trust Housing Finance Ltd|
|% of shareholding held by||100.00% Mercantile Ventures Ltd||100.00% Oasis Ventures Pvt Ltd||100.00% Oasis Ventures Pvt Ltd||40.00% Mercantile Ventures Ltd|
|Profit before tax||55.44||36.80||(16.92)||623.58|
|provision for taxation||17.48||8.80||(0.16)||185.32|
The financial highlights of National Trust Housing Finance Ltd (NATRUST), associate are based on the unaudited financial statements submitted by the company.
|The companys board comprises of the following directors:|
|Mr. Al chandramouli|
|Mr. B Narendran|
|Ms. Sashikala srikanth|
|Mr. En Rangaswami|
|Key managerial personnel|
|The key managerial personnel of the company are:|
|Mr. E N Rangaswami- Whole-Time Director|
|Mr. V Padmanabha Sarma- Chief Financial Officer|
|Mr. N Prasanna Varadan- Company Secretary|
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for the continuance / appointment as independent directors under the provisions of the Companies Act, 2013 and the relevant rules.
BOARD EVALUATION pursuant to the provisions of the Companies Act, 2013 and SeBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Boards performance and performance of the non-independent Director were considered/evaluated by the independent directors at their meeting without the participation of the non-independent director and key managerial personnel.
They also assessed the quality, quantity and timeliness of flow of information between the Companys Management and the Board that are necessary for the Board to effectively and reasonably perform its duties. pursuant to the provisions of the Companies act, 2013 and Regulation 17 of SeBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various committees.
M/s. DpV & Associates, Chartered Accountants appointed as the auditors of the company at the 16th Annual General Meeting to hold office till the conclusion of the 21st AGM to be held in the year 2022 as per Section 139 of the Companies Act, 2013.
SECRETARIAL AUDIT REPORT the Company has appointed Mr. R Kannan, Company Secretary in practice to undertake the Secretarial Audit of the Company. the Report of the Secretarial Auditor is annexed to this report.
EXPLANATION TO SECRETARIAL AUDIT REPORT the Company shall initiate the process for transfer of unclaimed shares to unclaimed Suspense Account as per the requirements of Regulation 39(4) read with Schedule VI of SeBI LoDR, 2015 during the FY 2018-19.
A report on Corporate Governance as stipulated under Schedule V and Regulation 34(3) of the SeBI (Listing obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The requisite certificate from a practicing company secretary confirming compliance with the conditions of . corporate governance as stipulatedis annexedtothis Report
AUDIT COMMITTEE AND WHISTLE BLOWER POLICY the Audit Committee consists of three independent directors. Mr. AL Chandramouli Mr. B narendran Ms. Sashikala Srikanth
As required under Section 177 of the Companies Act 2013, the Company has established Whistle Blower policy and the same has been uploaded in the following web link http://mercantileventures.co.in/files/Whistle%20blower%20policy.pdf
SHARES the Company has not bought back any of its shares during the year under review. the Company also has not issued any sweat equity shares, bonus shares or stock option scheme during the year under review.
ANNUALRETURN the extracts of annual return in Form MGt 9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed to this report.
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy and Technical Absorption: the business of the Company is leasing of immovable properties. the particulars prescribed under Section 134 of the Companies Act, 2013 read with rule 8 (3) of the Companies (Accounts) Rules, 2014, relating to conservation of energy and technology absorption are not applicable to the business operations of the Company.
Foreign Exchange Earnings and Outgo:
(a) Foreign Exchange Inflow: Nil (b) Foreign Exchange Outflow: Nil
PARTICULARS OF EMPLOYEES the Company has no employee whose salary exceeds the limits as prescribed under Rule(5)(2) of Companies (Appointment and Remuneration of Key Managerial personnel) Rules, 2014
INFORMATION PURSUANT TO RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
|The ratio of the remuneration of each director to the Median remuneration of the employees of the company for the financial year 2017-18||Mr. E N Rangaswami, Whole-Time Director||6.07|
|The percentage increase in remuneration of each Director, Chief Financial Officer, Company Secretary In the financial year 2017-18.||Mr. E N Rangaswami, Whole-Time Director||11.11|
|Mr. V padmanabha sarma, chief financial officer||13.05|
|Mr. N prasanna varadan, company secretary||43.94|
|The percentage increase in the median remuneration Of employees in the financial Year 2017-18.||12.71|
|The number of permanent employees on the rolls of Company as on 31.03.2018||2|
|The explanation on the relationship between average||Total comprehensive income (after tax) (rs. In lakhs)||715.59|
|Increase in remuneration and Company performance.||Average increase in remuneration||13.69%|
|Comparison of the remuneration of the Key managerial||Total Comprehensive Income (after tax) (Rs. In lakhs)||715.59|
|Personnel against the performance of the Company||Remuneration of key managerial personnel (Rs. In lakhs)||58.52|
|Variations in the market capitalisation of the company, Price earnings ratio as at the closing date of the current Financial year and percentage increase/ decrease in||Month share price (rs.)||Market Capitalisation (rs. In lakhs)|
|The market quotations of the shares of the company||Mar. 18 10.45||11695.45|
|Price earnings Ratio||20.27|
|Average percentage increase already made in the||Average percentage increase already made in the salaries|
|Salaries of employees other than the managerial||Of employees other than the key managerial personnel|
|Personnel in the last financial year and its comparison||In the fy 2017-18|
|With the percentage increase in the managerial Remuneration and justification thereof||Average percentage increase already made in the salaries Of the key managerial personnel in the fy 2017-18||14.48%|
INFORMATION PURSUANT TO RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014: DETAILS OF EMPLOYEES IN TERMS OF REMUNERATION RECEIVED DURING THE YEAR
|Name||Designation||Remuneration (Rs. in Lakhs)||Qualification||Experience||Date of Joining||Last Employment|
|E N RANGASWAMI||Whole-time Director||40.00||B.Sc., ACA||39 Years||05/12/2012||Manali petrochemicals Ltd, General Manager (Finance)|
|V PADMANABHA SARMA||Chief Financial Officer||11.87||B.Com., ACA||42 Years||01/12/2012||MCC Finance Ltd, Senior Vice president|
|N PRASANNA VARADAN||Company Secretary||6.65||B.Com., MBA, ACS||6 Years||13/07/2015||S V Global Ltd, Secretarial executive|
|V M ARUNCAHALAM||Assistant Manager (Accounts)||6.52||B.Com.,||30 Years||12/06/2013||SpIC SMo, Accounts manager|
|L S VENKATARAMAN||executive (Co-ordination)||4.56||BA.,||41 Years||09/11/2012||Manali petrochemicals Ltd, executive|
AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY
Company is adopting remuneration guidelines for fixing the remuneration as per the Remuneration policy.
Your directors express their grateful thanks for the assistance, co-operation and support extended to the Company by promoters, shareholders and the bankers for their continued support. the Directors also place on record their appreciation of the good work put in by the employees of the company.
|By order of the Board|
|For Mercantile Ventures Limited|
|place: Chennai||E N Rangaswami (DIn: 06463753)|
|Date: 18 May 2018||Whole-time Director|