DIRECTORS' REPORT To The Members Your Directors have pleasure in presenting the THIRTY TWO ANNUAL REPORT of the Company together with the Audited Statement of Accounts for the year ended March 31, 2015. FINANCIAL PERFORMANCE; The Sales and other income for the year under review were Rs, 6.77 crores as against Rs 1.81 crores in the previous financial year. The Net Profit for the year under review is Rs 5,25 crores as against Rs. (1.56) crores in the previous financial year. DIVIDEND Your Directors do not recommend any dividend, for the year, under review. Since there was no dividend declared and paid during last year(s), the provisions of Section 125 of the Companies Act, 2013 i.e. Transfer of unpaid/ unclaimed dividend to the Investor Education and Protection Fund Account are not applicable to the Company. TRANSFER TO GENERAL RESERVE During the year under review, the Company does not propose to transfer any amount to the General Reserves and the full amount is carried to Surplus Account. FIXED DEPOSITS: During the year under review the Company has not accepted any deposit from the public. SUBSIDIARY COMPANIES The Company does not have any Subsidiary, Joint Venture or Associate Company. SHARE CAPITAL During the year under review: a. the Company has not bought back any of its securities during the year. b. the Company has not issued any Sweat Equity Shares during the year. c. No Bonus Shares were issued during the year. NO. OF BOARD MEETING During the year ended 31st March, 2015 five meetings of the Board were held on the following dates: (i)28th May, 2014 (ii)14th August, 2014 (iii)14th November, 2014 (iv)12th February, 2015 (v)31st March, 2015 FORMATION OF AUDIT COMMITTEE During the year, pursuant to the provisions of Section 177 of the Companies Act, 2013, the Company has formed an Audit Committee of the Board of Directors of the Company. The Audit Committee of the Company comprises of three Directors, of which majority are Independent, Non-Executive Directors, possessing knowledge of Corporate Finance, Accounts And Company Law. The Chairman of the Committee is an Independent NonExecutive Director. The Members of the Committee are: 1.Mr. B K Toshniwal - Chairman 2.Mr. Sanjay Jain - Member 3.Mr. Adarsh Somani - Member 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 and appointment of Auditors of the Company and etc. During the year ended March 31, 2015, a meeting of the Audit Committee was held on 31st March, 2015. FORMATION OF NOMINATION AND REMUNERATION COMMITTEE During the year, pursuant to the provisions of Section 178(1) of the Companies Act, 2013, Company has formulated Nomination and Remuneration Committee of the Board of Directors of the Company. The Committee has three Non - Executive Director, of which majority are Independent Directors as its members. The Members of the Committee are: 1.Mr. B K Toshniwal- Chairman 2.Mr. Sanjay Jain- Member 3.Mr. Adarsh Somani- Member During the year ended March 31, 2015, a meeting of the Nomination and Remuneration Committee was held on 31st March, 2015. The purpose of the Remuneration Committee of the Board of Directors shall be to review and to discharge the Board's 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. The Committee shall as and when needed will review and approve the remuneration payable to the Managing Director considering the profits of the Company. Nomination & Remuneration Policy a)The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, Key Managerial Personnel or at Senior Management level and recommend to the Board his / her appointment. b) 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. WHISTLE BLOWER POLICY With rapid expansion in compliances under various Acts, Laws and Regulations and liability of high penalty in default, the Audit Committee is committed to ensure fraud free work environment, the committee has laid down a whistle blower policy for its Directors, Employees and Business Associates to report the fraud, abuse of authority, breach of Company's code of conduct, employee misconduct, illegality and other reportable matters through any of the following manners: • E-mail : info@sarvamanqalmercantile.com • Phone No. : 022-24964656"60 • Written Communication : Chairman of Audit Committee, C/o Sarvamangal Mercantile Co. Limited, No. 2 Mohatta Bhavan Properties, off Dr E Moses Road, Worli, Mumbai-400018 This policy is applicable to all the Directors, Employees, and Business Associates of the Company. Adequate safeguards have been provided to prevent victimization of anyone under this policy by direct access to the Chairman of the Audit Committee in exceptional cases. The main objectives of the policy are as under: • To provide guidance to the Employees, Vendors and Business Associates on reporting any suspicious activity and handling critical information and evidence. • To provide healthy and fraud- free work culture. • To initiate disciplinary action against false allegations. PROHIBITION OF INSIDER TRADING CODE: As per SEBI (Prohibition of Insider Trading) Regulation, 2015 the Company has adopted a Code of Practices and Procedures for Fair Disclosures of Unpublished Price Sensitive Information and Code of Conduct to Regulate, Monitor and Report Trading by Insiders, All the Directors, Employees or Senior Management Personnel who could have access to the unpublished price sensitive information of the Company are governed by this code. The trading window will be closed during the time of declaration of results and occurrence of any material events as per the Code. The Company has appointed Mr. Adarsh Somani as the Compliance Officer of the Company. The Code of Practices and Procedures for Fair Disclosures of Unpublished Price Sensitive Information is also available on Company's website www.sarvamangalmercantile.com. 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, 2015 the applicable Accounting Standards has 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 or loss 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 CompaniesAct, 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, 2015 on a'going concern'basis. (V)that the Directors have laid down internal financial control and that such internal financial control are adequate. (IV) that the Directors have devised proper system to ensure compliance with the provisions of all applicable laws. 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. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE Although the Company do not have large number of employees however to comply with the legal requirement, 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. The Company has not received any complaint of sexual harassment during the financial year 2014-2015. INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK The Company has in place Internal Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Company has appointed Mr. Shashikant Sharma as Internal Auditors of the Company. The Audit Committee in consultation with the Internal Auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The Internal Auditor have expressed that the Internal Control System in the Company is effective commensurate with the size and it operations. ANNUAL EVALUATION OF BOARD PERFORMANCE During the year under review, no evaluation of Board performance is done by the Independent Director. The Nomination and Remuneration Committee formed at 31st March, 2015 and therefore it's in the process to finalise the terms for evaluation of the Board. The Evaluation of the Independent Directors and Board will be considered in the near future. LOANS AND INVESTMENTS The details of Loans, Guarantees and Investment under Section 186 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 are as follows: A) Details of Investments made by the Company as on 31st March, 2015 (including investments made in previous years) RELATED PARTY DISCLOSURE During the year under review, no related party transactions are entered by the Company. There are no materially significant related party transactions made by the Company with Promoters, Directors and Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. The Form AOC-2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure I to this report. LISTING/TRADING OF SHARES: Your Company Shares are listed with The Bombay Stock Exchange Limited, P.J Towers, Dalai Street, Mumbai - 400001. The Scrip Code of Shares of the Company is 506190. The Listing fee for the current year 2015-2016 has been paid. EXTRACT OF ANNUAL RETURN The detail of forming part of the extract of the annual return for the financial year 2014-2015 is enclosed in Annexure II. DECLARATION OF INDEPENDENT DIRECTORS The Independent Directors have submitted their disclosures to the Board, stating that they fulfil 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. 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 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ Employees of your Company is set out in Annexure III to this report. DISCLOSURE OF PARTICULARS Information's 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 are given in Annexure- IV forming part of this Report. CASH FLOW STATEMENT: In conformity with the provisions of Clause 32 of the Listing Agreement the Cash Flow Statement for the year ended 31st March 2015 is included in this annual report. DIRECTORS (i)Retirement by rotation Mr. Adarsh Somani, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible offer himself for reappointment as Director liable to retire by rotation. (ii)Appointment of Managing Director During the year, the Board of Directors at their meeting held on 31st March, 2015 has appointed Mrs. Nupur Somani as Managing Director for a period of three years w.e.f 1st April, 2015 to 31st March, 2018 subject to your approval at the forthcoming Annual General Meeting. A resolution for her appointment along with the explanatory statement is included in the notice convening 32nd Annual General Meeting of the Company. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT The Board had appointed M/s. GMJ & Associates, Company Secretaries in Whole Time Practice, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year ended 2014- 2015. The report of Secretarial Auditor is annexed to this report as Annexure V. As per the Secretarial Audit report, the Company has not appointed Whole Time Company Secretary of the Company during the financial year 2014-2015 and therefore not complied with the provisions of Section 203 of the Companies Act, 2015. The Company is in process to find suitable candidate for appointment as a Company Secretary of the Company. AUDITORS At the Annual General Meeting of the Company held on 30th August, 2014, M/s. S G Kabra & Co. Chartered Accountant (FRN No. 10450TW) were re-appointed as the Statutory Auditors of the Company for a period of 3 years which is subject to annual ratification by the Members of the Company in terms of Section 139 of the Companies Act, 2013 and rules made thereunder. The members ratify the appointment of M/s. S G Kabra & Co. Chartered Accountant (FRN No. 104507W) as the Statutory Auditors of the Company for the financial year 2015-2016. There are no qualifications or adverse remarks in the Statutory Auditors Report which require any explanation from the Board of Directors. SIGNIFICANT/ MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant / material orders passed by the Regulators or Courts or Tribunal impacting going concern status of your Company and its operations in future. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There is no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2014-15 and the date of this report. ACKNOWLEDGEMENT The Board of Directors thanks the Financial Institutions, Bankers and all the Stakeholders for their continued co-operation and support to the Company. For & on behalf of the Board Sd /-Mrs. Nupur Somani ‘ Managing Director (DIN-00816788) Sd/-Mr. B K Toshniwal Director (DIN -00048019) Sd/-Mr. Sanjay Jain Director (DIN - 00047973) Date : 29th May, 2015 Place : Mumbai |