Sarvamangal Mercantile Co. Ltd Directors Report.

To

The Members,

Sarvamangal Mercantile Company Limited

Your Directors have pleasure in presenting the THIRTY SIXTH ANNUAL REPORT of the Company together with the Audited Financial Statement(s) of the Company for the year ended March 31,2019.

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 31,2019 amounted to Rs. 364.02 Lakhs as against Rs. 39.97 lakhs in the previous Financial Year. Net loss for the year under review was 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 31,2019, Five (5) Meeting of the Board were held on the following dates:

(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 of Audit Committee are in conformity with the provisions of Section 177 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers) Rules, 2014.

The Audit Committee consists of the following Members as on March 31,2019:

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

The Audit Committee has adequate powers and detailed terms of reference to play an effective role as required under Section 177 of the Companies Act, 2013, which inter alia include overseeing financial reporting processes, reviewing periodic financial results, financial statements and adequacy of internal control systems with the Management, approval of related party transactions, recommendation of appointment and remuneration of Auditors of the Company and etc.

During the year ended March 31, 2019, Four Meetings of the Audit Committee were held on following 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 of Nomination and Remuneration Committee are in conformity with the provisions of Section 178 and 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 March 31, 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 Remuneration Committee was held on November 29, 2018.

The purpose of the Remuneration Committee of the Board of Directors shall be to review and to discharge the Boards responsibilities related to remuneration of the Managing Director, Key Managerial Personnel, and Senior Management. The Committee has the overall responsibility for formulation of criteria of evaluation of Independent Director, identifying persons who are qualified to become a Director and appointment of Senior Management Personnel.

6. Policy on Directors Appointment and Remuneration:

The Nomination and Remuneration Committee is entrusted with the responsibility of identifying and ascertaining the integrity, qualification, expertise and experience of the person for appointment as Directors, KMP or at Senior Management level and recommending their appointment for the consideration of the Board.

The Company has drawn up Nomination and Remuneration policy in line with the requirement of Section 178 of the Companies Act, 2013. The Policy inter alia provides that a person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.

7. Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism cum Whistle Blower Policy (‘Vigil Mechanism) in place. The Vigil Mechanism is a system for providing a tool to the employees of the Company to report violation of personnel policies of the Company, unethical behavior, suspected or actual fraud, violation of code of conduct. The Company is committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization.

The Policy provides for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Board of Directors affirm and confirm that no employee of the Company has been denied access to the Committee.

Details of the Vigil Mechanism are available on the Companys website www.sarvamangalmercantile.com

8. Risk Management

Your Company has appropriate risk management system in place for identification of risks and assessment of risks, measure to mitigate them and mechanism for their proper and timely 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 of Sexual Harassment. The policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto.

Further as there are only 3 employees in the Company, the Company is not required to constitute Internal Complaints Committee under the provisions of Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has not received any complaint of sexual harassment during the financial year 2018-19.

10. Adequacy of Internal Financial Controls with reference to the Financial Statements.

The Company has devised appropriate systems and framework for adequate internal financial controls with reference to financial statements commensurate with the size, scale and complexity of its operations including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management framework.

The Audit Committee regularly reviews the internal control system to ensure that it remains effective and aligned with the business requirements. In case weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls.

Further, the Board annually reviews the effectiveness of the Companys internal control system. 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, 2013 certifying 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 the Chairman and the Non Independent Directors was carried out by the Independent Directors in their meeting held on February 14, 2019 who also reviewed the performance of the Board as whole.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure for the performance evaluation of the Board of Directors.

The Boards functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board Structure and Composition, effectiveness of Board 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 / Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement of all Board Members.

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

12. Particulars of Loans, Guarantees and Investments.

Particulars of Loans, Guarantees and Investment as required under Section 186 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 are 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 party in terms of Section 188 of the Companies Act, 2013. Hence, the disclosure required to be provided under Section 134(3) (h) of the Companies Act, 2013, in Form AOC - 2 is not applicable 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 Note no. 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 Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions 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, 2019 the applicable Accounting Standards have been followed.

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review.

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the Provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the annual accounts for the year ended 31st March, 2019 on a ‘going concern basis.

(v) that the Directors have laid down internal financial control and that such internal financial control are adequate.

(vi) that the Directors have devised proper system to ensure compliance with the Provisions of all applicable laws.

16. Disclosures Relating to Remuneration of Directors, Key Managerial Personnel And Particulars of Employees.

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ Employees of your Company is appended in Annexure I forming part of this Report.

In accordance with provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are required to be given in Directors Report. In terms of provisions of Section 136(1) of the 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 Secretary and the same will be furnished on request. The said information is available also for inspection 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 (Management and Administration) Rules, 2014, details forming the part of the extract of annual return is 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 Act, 2013, the Annual Return of the Company in Form mGT-7 is available on the Companys Website www.sarvamangalmercantile.com.

18. Disclosure of Particulars

Informations as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy ,Technology Absorption, Foreign Exchange Earnings and Outgo is given in Annexure III forming part of this Report.

19. Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

20. Directors and Key Managerial Personnel

In accordance with the requirements of the Companies Act, 2013 and Articles of Association of the Company, Mr. Adarsh Somani, Director of the Company retire at the forthcoming Annual General Meeting and being eligible, offers himself, for re-appointment as 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 hold office for a term of 5 consecutive years until the conclusion of 39th Annual General Meeting of the Company. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

b) Secretarial Auditor and Secretarial Audit Report

The Board has appointed M/s. GMJ & Associates, Practicing Company Secretaries, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2018- 19. The Report of Secretarial Auditor for the Financial Year 2018-19 is annexed to this report as Annexure IV.

The Board in its meeting held on 16th May, 2019 has appointed Ms. Nirali Mehta, Company Secretary 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 or Tribunals impacting going concern status of your Company and its operations in future;

f) there were no other material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company 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 the Statutory Auditors in their Report

23. Secretarial Standards

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meeting, respectively, have 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 significant outstanding contribution made by the employees at all levels.

25. Acknowledgement

Your Directors express their deep gratitude for the co-operation and support extended to the Company by its Members, Customers, Suppliers, Bankers and various Government agencies.

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