BOARD'S REPORT Dear Shareholders, Your Directors take pleasure in presenting the 30th Annual Report together with the Audited Annual Accounts of your Company for the year ended March 31, 2015. OPERATIONS: Your company has earned a net profit of Rs. 92,893 during the year compared to Rs. 2,95,948 in the previous year which is lower than last year. Further, the revenue from operations is Rs. 1,28,99,223 during the year as compared to Rs. 32,52,300 during 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. 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. LISTING OF EQUITY SHARES: Your Directors take immense pleasure to announce that your Company got listed for trading in its equity shares with effect from 18th July, 2014 with the Bombay Stock Exchange Limited (BSE). DIVIDEND: In order to conserve resources of the Company to meet working capital requirements, your Board did not recommended any dividend on equity shares of the Company for the financial year ended 31st March, 2015. TRANSFER TO RESERVES The Company has not transferred any amount to any reserve. 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 profit and 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) The Directors 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 revised Clause 49 of the Listing Agreement 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 Exchanges, as a matter of prudence and good governance. A Report on Corporate Governance along with a certificate from Mr. Santosh Kumar Tibrewalla, Practicing Company Secretary regarding compliance of conditions of Corporate Governance and certification by CEO & CFO are given in Annexure - 'B', 'C' & 'D'. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT A report on Management Discussion &Analysis is given in the Annexure - 'E' to this report. PERSONNEL The particulars and information of the employees as required under 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 - 'F' to this Report, attached hereto. COMPANY'S WEBSITE The website of your Company, www. adarshmercantile.in <http://www.adarshmercantile.in>, has been designed to present the Company's businesses up-front on the home page. The site carries a comprehensive database of information including the Financial Results of your Company, Shareholding pattern, Director's & 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 Listing agreement has been uploaded. DIRECTORS AND KEY MANAGERIAL PERSONNEL: i) Appointments / re-appointment : a) Mr. Sundar Lal Mohta (DIN 05122250) has been appointed as an Additional Director (Non Executive-Independent Director) of the Company with effect from 31st March, 2015 pursuant to Section 149, 152 & 161 of the Companies Act, 2013 and other applicable provisions of the said Act and as per the requirements of clause 49 of the Listing agreement. He has provided declaration of his independence as per Section 149(6) of the Companies Act, 2013. Pursuant to the provisions of Section 161 of the Companies Act, 2013 and rules made thereunder, the aforesaid Director would hold the office of Directors upto the date of ensuing Annual General Meeting of the Company unless appointed as a Director of the Company by the Shareholders. Amongst other terms, Mr. Sundar Lal Mohta, when confirmed by the Shareholders would no longer be required to retire by rotation in view of Section 149(13) of the Companies Act, 2013 and can hold the office for a consecutive period of five years as per Section 149(10) of the said Act and hence his appointment has been proposed accordingly. b) Mrs. Suchita Chhawchharia (DIN 00044063) was appointed as an Executive Director of the Company for a period of 3(three) years with effect from 1stApril, 2015 by the Board of Directors of the Company in its meeting held on 31st March, 2015 on such terms and conditions as recommended by the Nomination & Remuneration Committee pursuant to the provisions of sections 196, 197, 198, 203 read with Schedule V and/or any other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 subject to shareholders' approval by means of a special resolution in the ensuing Annual General meeting of the Company. Her re-appointment as an Executive Director has been proposed accordingly. c) Mr. Narayanan Pothera (DIN 01245854) was appointed as a Non-Executive- Independent Director with effect from 31st March, 2015 for a period of 5 years upto 30th March, 2020 by the Board of Directors of the Company in its meeting held on 31st March, 2015 pursuant to the provisions of sections 149 and Clause 49 of the Listing Agreement subject to the approval of the shareholders in the ensuing Annual General meeting of the Company. He has provided declaration of his independence as per Section 149(6) of the Companies Act, 2013 and his office will not be liable to retire by rotation in view of Section 149(13) of the Companies Act, 2013 ii) Retirement by Rotation: Mrs. Suchita Chhawchharia (DIN 00044063), 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 herself for re-appointment. iii) Appointment of Whole time- Key Managerial Personnel (KMP): Pursuant to the provisions of Section 203 and other applicable provisions of the Companies Act, 2013,the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Rule 8(5)(iii) of Companies (Accounts) Rules, 2014 the Board has appointed the following personnel as the designated Whole time Key Managerial Personnel of the Company within the meaning of the said section : a) Mrs. Suchita Chhawchharia- Executive Director. b) Ms. KalpanaTekchandani- Company Secretary & Compliance Officer. c) Mr. Sourabh Rungta- Chief Financial Officer. There is no change in the Key Managerial Personnel during the year. However, Mrs. Suchita Chhawchharia, Executive Director was appointed as KMP w.e.f. 1st April, 2015, Mr. Sourabh Rungta has been appointed as KMP with effect from 1st April, 2015 and Ms. Kalpana Tekchandani has been appointed as KMP with effect from 6th April, 2014. None of the Directors of the Company as mentioned in item nos. (i), (ii) & (iii) are disqualified as per section 164(2) of the Companies Act, 2013. The Directors have also made necessary disclosures to the extent as required under provisions of section 184(1) & 149(6) of the Companies Act, 2013, as applicable. 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 is not applicable for the time being . 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 Auditor: The Statutory Auditor M/s Ray & Co., Chartered Accountants, holds office upto the conclusion of the Annual General Meeting (AGM) to be held for the financial year 2016-17, subject to ratification by the shareholders in every AGM. Accordingly, the Board on recommendation of Audit committee has proposed for ratification of their appointment in the office of Statutory Auditors of the Company for the financial year 2015-16. The Notes to Accounts, as referred in the Auditors Report are self-explanatory and hence does not call for any further explanation. ii) Secretarial Auditor: The Board has appointed Mr. Santosh Kumar Tibrewalla, Practising Company Secretary, as the Secretarial Auditor of the Company to carry out the Secretarial Audit for the year 2014-15 under the provisions of section 204 of the Companies Act, 2013. The report of the Secretarial Auditor in MR 3 is enclosed as Annexure - 'G' to this Board's Report, which is self-explanatory and hence do not call for any further explanation. 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 Company's website: www. adarshmercantile. inand the declaration to this effect is given in Annexure -'H' CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING: In terms of the SEBI (Prohibition of Insider Trading) Regulations, 1992, your Company has already adopted the Code of Conduct for prevention of Insider Trading and the same is also placed on the Company's website: www. adarshmercantile.in <http://www.adarshmercantile.in>. Further, in accordance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors of the Company at their meeting held on 29 th May, 2015 have approved and adopted the code of practices and procedure for fair disclosure of Unpublished Price Sensitive Information and formulated the code of conduct of the Company. DISCLOSURES AS PER APPLICABLE ACTAND LISTING AGREEMENT: i) Related Party Transactions: All transaction entered with related parties during the FY 2014-15 were on arm's 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 Company's Promoters, Directors and others as defined in section 2(76) of the Companies Act, 2013 and the listing agreement which may have potential conflict of interest with the Company at large. Accordingly, disclosure in Form AOC 2 is not required. The necessary disclosures regarding the transactions 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. ii) Number of Board Meetings: The Board of Directors met 6 (six) times in the year 2014-15. The Details of the Board meeting and attendance of the Directors are provided in the Corporate Governance Report, attached as Annexure to this Board's Report. iii) Composition of Audit Committee: The Board has constituted the Audit Committee under the Chairmanship of Mr. Narayanan Pothera. Complete details of the Committee are given in the Corporate Governance Report, attached as Annexure to this Board's Report. iv) Extracts of Annual Return: The details forming part of the extract of the Annual Return in MGT-9 as provided under section 92(3) of the Companies Act, 2013 is enclosed as Annexure - 'I'. v) Risk Analysis: The Company has in place a mechanism to inform the Board members about the Risk assessment and mitigation plans and periodical reviews to ensure that the critical risks are controlled by the executive management. vi) Internal Financial Control : The Company has in place adequate internal financial control as required under section 134(5)(e) of the Act. During the year such controls were tested with reference to financial statements and no reportable material weakness in the formulation or operations were observed. vii) Loans, Guarantees and Investments: The particulars of loans, guarantees and investments made are provided in Notes 9, 10 & 11 of the Balance Sheet. viii) 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 2014-15. ix) Subsidiaries, Associates or Joint Ventures: Your Company does not have any subsidiaries, joint ventures but it has 1 (one) associate M/s. Avon Credit Pvt. Ltd., 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'. x) Evaluation of the Board's Performance: During the year under review, the Board, in compliance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, has adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise 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. xi) 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 the Listing Agreement with the stock exchanges (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 Corporate Governance Report, attached as Annexure to this Board's Report: a. Criteria for appointment and removal of Directors, Key Managerial Personnel (KMP) and 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. xii) Vigil Mechanism (Whistle Blower Policy): Your Company has formulated a Whistle Blower Policy and employees of the Company are encouraged to escalate to the level of the Audit Committee any issue of concerns impacting and compromising with the interest of the Company and its stakeholders in any way. 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 employees from reprisals or victimization, for whistle blowing in good faith. Details of establishment of the Vigil Mechanism have been uploaded on the Company's website: www. adarshmercantile. in and also set out in the Corporate Governance Report attached as Annexure to this Board's Report. SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATOR OR COURTS OR TRIBUNALS IMPACTING GOING CONCERN STATUS AND COMPANIES OPERATIONS IN FUTURE There have been no significant & material orders passed by regulator / courts / tribunals impacting going concern status and Companies 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 Company's 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. For and on behalf of the Board of Directors For Adarsh Mercantile Limited Suchita Chhawchharia Executive Director (DIN:00044063) Gautam Agarwala Director (DIN: 00791678) Place :Kolkata Date :14.08.2015 |