DIRECTOR'S REPORT To, THE MEMBERS, 1. Your Directors have pleasure in submitting their 29th Annual Report of the Company together with the Audited Statements of Accounts of the Company for the year ended on 31st March, 2015. 2. DIVIDEND Since the Company has not earned Sufficient Profits in the Financial Year ended 31/03/2015, hence no dividend was declared and paid by the company. 3. DEPOSITS The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable. 4. Draft Scheme of Capital Reconstruction: The Board of Directors of the Company proposed the draft scheme of Capital Reconstruction under Section 100 to 104 of the Companies Act, 1956 whereby the paid-up share capital of the Mercury Metals Ltd. shall be reduced from Rs.6,95,28,080/- divided into 69,52,808 equity shares of Rs.10/- each fully paid-up to Rs.69,52,808/-divided into 69,52,808 equity shares of Re.1/- each fully paid-up and that such reduction be effected by cancelling the capital which has lost or is unrepresented by available tangible assets, to the extent of Rs.9/- per share upon each of the 69,52,808 equity shares which have been issued by reducing the paid-up value of all the shares in the capital of the Company from Rs.10/- per share to Re.1/- per share The Shareholders of the Company in their Extra Ordinary General Meeting (EGM) held on 14/02/2015, approved the said scheme subject to confirmation by the Hon'ble High Court of the Judicature at Ahmedabad in the state of Gujarat. The Company has already filed necessary Petition No.186 of 2015 before the Hon'ble High Court of Gujarat and the said petition is scheduled for final hearing on 17th August, 2015. 5. TRANSFER TO RESERVES The Board of Directors has not recommended transfer of any amount of profit to reserves during the period under review. Hence, the entire amount of profit has been carried forward to the Statement of Profit and Loss. 6. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS During the period under review your Company has made a profit of Rs. 2,59,162/- before making provision for income tax amounting to Rs. 52,000/- for the current year, thus a net credit balance of Rs. 2,07,162/- has been transferred to Reserve & Surplus A/c for the current period. 7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report. 8. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. 9. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal. 10. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING ANDOUTGO: A. CONSUMPTION OF ENERGY & TECHNOLOGY ABSORPTION: The details as required under Section 134 (3) (m) of the Companies Act, 2013, in respect of Conservation of Energy, Technology Absorption are not applicable. B. FOREIGN EXCHANGE EARNING & OUTGO : Foreign Exchange Earning : NIL Foreign Exchange Outgo : NIL 11. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. 12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. 13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES During the year no contracts or arrangements were made with related parties falling under the purview of Section 188 of the Companies Act, 2013. 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. 14. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this report as 'Annexure A'. However, as permitted in terms of Section 136 of the Act, this Annual Report is being sent to all the members and others entitled thereto, excluding the said annexure. Members who are interested in obtaining these particulars may write to the Compliance Officer at the Registered Office of the Company. The aforesaid annexure is also available for inspection by members at the Registered Office of the Company, 21 days before the 29th Annual General Meeting and upto the date of Annual General Meeting during business hours on working days. 15. DIRECTORS AND KEY MANAGERIAL PERSONNEL i. Retirement by rotation In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Mr. RAMPRAKASH LALURAM KABRA [DIN- 00006664] will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board recommends his reappointment. ii. Cessation Mr. BHUPENDRA SINGH RAJPUT [DIN- 00853722], Director of the Company has resigned with effect from 13/ 11/2014. The Board places on record its appreciation for contributions and guidance provided by Mr. BHUPENDRA SINGH RAJPUT during their respective tenure as a Director of the Company iii. Independent Directors Mr. MAHENDRA G. PRAJAPATI (DIN: 03270133) is the existing Independent Director. The Company proposes to appoint him as Independent Director under Section 149 of the Companies Act, 2013, for a period of five consecutive years from the date of this Annual General Meeting. In accordance with the provisions of the Act, none of the Independent Director are liable to retire by rotation. Further, the Board also proposes to appoint Mr. Pankhil Desai (DIN: 02908540) and Mrs. Bharti Bavishi (DIN: 07188858) as Independent Directors under Section 149 of the Companies Act, 2013, for a period of five consecutive years from the date of this Annual General Meeting. In accordance with the provisions of the Act, none of the Independent Directors are liable to retire by rotation. The Independent Director has submitted his disclosures to the Board that he fulfills all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify himself to be appointed as an Independent Director under the provisions of the Companies Act, 2013 and the relevant rules. iv. Regularization of Additional Directors: Mr. Pankhil Dineshbhai Desai (DIN: 02908540) and Mrs. Bharti Bavishi(DIN: 07188858) were appointed as an Additional Directors of the Company respectively to hold office upto the date of ensuing Annual General Meeting. The Company has received notice from them along with requisite deposits proposing their respective candidature for appointment as Directors at the ensuing Annual General Meeting. The Board proposes to appoint Mr. Pankhil Desai and Mrs. Bharti Bavishi as Independent Directors under Section 149 of the Companies Act, 2013, for a period of five consecutive years from the date of this Annual General Meeting. v. Number of Board Meetings During the year under review, the Board duly met Eight times on 22/05/2014, 31/07/2014, 12/08/2014, 04/09/2014 and 13/11/2014, 09/01/2015, 12/02/2015, 16/03/2015. vi. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 16. 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 financial statements for the year ended on 31st March, 2015, applicable accounting standards have been followed along with proper explanation relating to material departures, if any, b) such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2015 and of the profit of the company for the year ended on that date, c) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities, d) the annual financial statements are prepared on a going concern basis e) proper internal financial controls are in place and that the financial controls are adequate and are operating effectively and f) the systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively. 17. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE: The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee of Company was reconstituted with effect from 13.11.2014 and as on the date of this Report, the Audit Committee comprises:- a) Mr. Pankhil D. Desai Chairman b) Mr. Mahendra G. Prajapati Member c) Mr. Ramprakash L. Kabra Member The above composition of the Audit Committee consists of independent Directors viz., Mr. Pankhil D. Desai and Mr. Mahendra G. Prajapati who form the majority. The scope and terms of reference of the Audit Committee have been amended in accordance with the Act and the Listing Agreement entered into with the Stock Exchanges. During the period under review, the Board of Directors of the Company had accepted all the recommendations of the Committee. 18. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES: The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Company's Code of Conduct or Ethics Policy. Whistle Blower Policy is disclosed on the website of the Company at www.mercurymetals.in 19. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Company's Policy 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 is furnished in Corporate Governance Report forming part of the Annual Report.. 20. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial Controls with reference to Financial Statements. During the year, such Controls were tested and no reportable material weakness was observed. 21. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. 22. AUDITORS i. STATUTORY AUDITORS M/S. AMBALAL PATEL & CO., Chartered Accountants, was appointed as Statutory Auditors for a period of 4 year(s) in the Annual General Meeting held on 29th September, 2014. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Board of Directors of your Company would like to explain on the matter shown as Emphasis of Matter in their audit report that the shares held as inventories are stated at the cost of acquisitions. No provision has been made for diminution in the value of shares held as inventories. The Board of the Company finds that such diminution in the value of shares is temporary, therefore no provisions has been made. Further it is to be noted that the auditor has clearly stated that their opinion is not qualified in this matter. ii. SECRETARIAL AUDITOR Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s Khandelwal Devesh & Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the period ended on 31st March 2015. Secretarial Audit Report issued by M/s Khandelwal Devesh & Associates, Company Secretaries in Form MR-3, attached and marked as Annexure "B", for the period under review forms part of this report. The said report contains observation or qualification relating to the appointment of Company Secretary and CFO. The Board of Directors of your Company would like to explain on the said observation that your Company took all reasonable steps to do such appointments, but as your Company is not doing well in its present line of business activity, it failed to attract right candidates for such post. The Board of your Company has appointed Mr. RASIKBHAI AMBALAL RANA as its CFO w.e.f. 30/05/2015 and continues its efforts to search right candidate for the post of Company Secretary and will appoint the Company Secretary as soon as possible. iii. COST AUDITORS The Company has not appointed the Cost Auditor as pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit is not applicable to the Company 23. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure "C" and is attached to this Report. 24. CORPORATE GOVERNANCE: The Company has complied with the Corporate Governance requirements under the Act and as stipulated under clause 49 of the Listing Agreement. A separate section on detailed report on the Corporate Governance practices followed by the Company under the Listing Agreement along with a certificate from M/s. AMBALAL PATEL & CO, Chartered Accountant, confirming the compliance, is part of the Annual Report. 25. ACKNOWLEDGEMENTS Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. FOR AND ON BEHALF OF THE BOARD Govindram L. Kabra Chairman cum Whole time Director (DIN: 00006621) Date : 14/08/2015 Place : Ahmedabad |