<dhhead>REPORT OF BOARD OF DIRECTORS </dhhead>
Your Directors are pleased to present the Annual Report and the Audited
Financial Statements of the Company for the year ended 31 March 2024.
1. REVIEW OF OPERATIONS
The financial results for the year ended 31 March 2024 have been
prepared in accordance with Indian Accounting Standards. During the financial year ended
31 March 2024, the company has made a loss of INR 79.39 lakhs(Previousyearprofitof INR
50.76 lakhs) before tax and exceptional items and a loss of INR 55.76 lakhs (Previous year
profit of INR 68.08 lakhs) after tax and exceptional items.
2. FINANCIAL RESULTS (Rs. In Lakhs)
Description |
2023-24 |
2022-23 |
Income from Operations |
6.32 |
6.32 |
Other Income |
0.34 |
39.68 |
Profit/(Loss)Before Depreciation |
(79.39) |
50.76 |
Depreciation |
- |
- |
Net Profit/(Loss) before Provision for Tax |
(79.39) |
50.76 |
Profit from discontinued operations |
- |
91.96 |
Net Profit/(Loss) before Provision for Tax |
(79.39) |
50.76 |
Deferred Tax (net) |
(23.63) |
(17.32) |
Profit after Tax |
(55.76) |
68.08 |
Other Comprehensive Income (Net of Tax) |
459.46 |
- |
Total Comprehensive Income |
403.70 |
68.08 |
3. DIVIDEND
Your Directors have not recommended any dividend.
4. SHARE CAPITAL
The paid up equity share capital of the company as on 31st March 2024
has been Rs. 90 lakhs comprising of 9 lakh equity shares of Rs.10/- each. The Company has
not issued any employee stock option, sweat equity shares and shares with differential
voting rights.
5. FIXED DEPOSIT
The Company has neither accepted nor renewed any deposits during the
year under review.
6. MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of
the Company have occurred between the period to which this financial statement relates on
the date of this report.
The Promoters of the Company entered into a Share Purchase Agreement
with Mercantile Ventures Limited (MVL) to sell their shareholding in the Company which
triggered an open offer. Accordingly an Open Offer was made by Mercantile
Ventures Limited (Acquirer) to acquire up to 2,34,000 (Two
Lakh Thirty Four Thousand only) fully paid Equity Shares of face value of 10/- each
representing 26% of the Voting Share Capital of the Company (Target Company) ,
for cash at a price of 6/- in compliance with Regulations 3(1) and 4 and other applicable
regulations of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011. 2920 equity shares were acquired by
MVL by open offer.
On completion of the open offer, Mercantile Ventures Limited (acquirer)
has completed the acquisition of 38.41% equity share capital and voting rights in the
Company on 8th July 2024, from the existing promoters of the Company, as per terms of the
SPA executed on 05th January 2024 and had become the promoter of the Company. The
application for reclassification of promoters was made to BSE on 18th July 2024 pursuant
to Section VI and Clause 23 of the Letter of Offer and 31A (10) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 and awaiting for approval.
7. CHANGE IN NATURE OF BUSINESS
There is no change in the nature of business.
8. HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Mercantile Ventures Limited is the holding company with effect from 06
September, 2019 pursuant to Section 47 (2) of the
Companies Act, 2013.
The Company has neither a subsidiary nor an associate company.
9. 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 2024; c) The directors had taken proper and sufficientcare for the
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 adopted by the company for
ensuring the orderly and efficient 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.
10. DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that the Secretarial Standards issued by the
Institute of Company Secretaries of India, have been complied with.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Companys Board comprises of the following directors at
present:-
Mr. T Govindarajan |
Independent Director |
Mr. B Narendran |
Independent Director |
Ms. Rita Chandrasekar |
Independent Director |
Mr. E N Rangaswami |
Whole Time Director |
The independent directors of the company were re-appointed in the 69th
Annual General Meeting held on 5 August, 2019 for a period of 5 years from 29 May 2020.
Mr. E N Rangaswami, Director is liable to retire by rotation in the ensuing Annual General
Meeting.
The Key Managerial personnel of the Company are:
Mr. E N Rangaswami |
Whole-Time Director |
Mr. V Padmanabha Sarma |
Chief Financial Officer (till 21 June 2024) |
Mr. N. Umashankar |
Chief Financial Officer (with effect from 22
June 2024) |
Mr. Oberoi Jangit M |
Company Secretary |
Mr. E N Rangaswami, Mr. N. Umasankar and Mr. Oberoi Jangit M are
holding the position of Whole Time Director, CFO and Company Secretary respectively of
Mercantile Ventures Limited, the holding Company and their appointments are pursuant to
Section 203 (3) of Companies Act, 2013.
The Independent Directors have submitted their disclosures to the Board
that they fulfil all the requirements as stipulated in
Section 149(6) of the Companies Act, 2013, so as to qualify themselves
for the continuance as Independent Directors under the provisions of the Companies Act,
2013 and the relevant rules.
12. COMMITTEES OF THE BOARD AND MEETINGS
Currently, the Board has three Committees:
Audit Committee
Nomination & Remuneration Committee
Stakeholders Relationship Committee
A detailed note on Board and its committees is provided in the
Corporate Governance Report.
During the financial year 2023-24, Six Board meetings were held and the
details of which are given in the Corporate
Governance Report. The intervening gap between the meetings is within
the period prescribed under the Companies Act, 2013. The details of constitution of the
Board and its Committees are given in the Corporate Governance Report.
13. CORPORATE GOVERNANACE
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 stipulated is annexed to the
Corporate Governance report.
14. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF
REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Companys 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 uploaded in the website of the company in the following link:
https://www.indiaradiators.com/wp-content/uploads/2021/02/REMUNERATION-POLICY.pdf The
Remuneration Policy also forms part of the Corporate Governance Report.
15. FAMILIARISATION PROGRAM
The Independent Directors attend a familiarisation program on being
inducted into the Board. The details of familiarisation program are provided in the
Corporate Governance Report and also available on the website of the Company https://www.
indiaradiators.com/wp-content/uploads/2024/05/IRL-Familiarization-programme-2023-24.pdf.
16. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the performance of the Board
and the Non-independent Directors were considered and evaluated by the independent
directors at their meeting held on 04-08-2024 without the participation of the
non-independent directors and key managerial personnel.
They also assessed the quality, quantity and flow of information
between the Companys Management and the Board that are necessary for the Board to
perform its duties effectively and reasonably.
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, the directors individually as
well as the working of its various committees.
17. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The 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 by a practicing
chartered accountant. The observations arising out of the audit are periodically reviewed
and compliance ensured. The summary of the internal audit observations and management
responses are submitted to the Board after review by the Audit Committee.
18. REPORTING OF FRAUDS
There was no instance of fraud during the financial year 2023-24, which
requires the Statutory Auditors to report to the Audit
Committee and / or Board under Section 143(12) of the Act and the rules
made there under.
19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The contracts or arrangements made with Related Parties as defined
under Section 188 of the Companies Act, 2013 are provided in Form No. AOC-2 attached with
this report.
The Company has adopted a Policy for dealing with Related Party
Transactions. The Policy as approved by the Board may be viewed on the Companys
website at the web link: https://www.indiaradiators.com/wp-content/uploads/2024/05/
IRL-RPT-Policy.pdf.
20. AUDITORS
STATUTORY AUDITORS
M/s. Venkatesh & Co, Chartered Accountants (Firm Registration No.
004636S) the statutory auditors will be completing their second term of 5 years at the
conclusion of the 74th AGM to be held on 20th September, 2024. M/s. DPV & Associates,
Chennai (Firm Registration No.011688S), who have expressed their willingness to be
appointed be and are hereby proposed as Statutory Auditors of the Company to hold office
from the conclusion of this Annual General Meeting ("AGM") till the conclusion
of the Seventy Nineth AGM to be held in the year 2029, at a remuneration of Rs.50,000/-
(Rupees Fifty
Thousand only) per annum subject to the approval of the shareholders.
They have confirmed their eligibility to the effect that their appointment, if made, would
be within the prescribed limits under the Act and that they are not disqualified for
appointment.
SECRETARIAL AUDITOR
M/s KRA & Associates, Practicing Company Secretaries, were
appointed as Secretarial Auditor by the Board of Directors. The report of the Secretarial
Auditor is annexed to this report.
COST AUDITOR AND MAINTAINENCE OF COST RECORDS
The business activity of the Company is not covered under rule 3 of The
Companies (Cost Records and Audit) Rules, 2014. Accordingly, the maintenance of cost
records under section 148(1) of the Companies Act, 2013 is not applicable.
21. RISK MANAGEMENT
The Company has not adopted any Risk Management Policy since it is not
applicable as per the regulation 21 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (LODR).
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has not given any loans, guarantees or made any investments
under Section 186 of the Companies Act, 2013 during the financial year ended 31 March
2024.
23. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL
HARASSMENT AT WORK PLACE
As the company has no woman employee and the total no of employees are
less than ten, it is not required to form an internal complaints committee as per section
6 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressed) Act, 2013. Accordingly, all the concerns shall be
reportedtoEveryDistrictofficer/snotified by the appropriate
Government.
24. AUDIT COMMITTEE AND WHISTLE BLOWER POLICY
Pursuant to section 177(8) of the Companies Act, 2013, the information
about composition of Audit Committee and other details are given in the corporate
Governance report, forming part of this report. The Board has accepted the recommendations
of the Audit Committee. The Audit Committee comprises of Ms. Rita Chandrasekar as
chairperson and Mr. T Govindarajan and Mr. B Narendran as members.
The Company has adopted Whistle blower policy to report genuine
concerns. The Policy as approved by the Board may be viewed on the Companys website
at the web link:
https://www.indiaradiators.com/wp-content/uploads/2024/04/Whistle-blower-policy.pdf
25. CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility are not applicable to
the Company for the financial year 2023-24.
26. ANNUAL RETURN
The annual return pursuant to the provisions of Section 92 of the
Companies Act, 2013 read with relevant rules is placed in the website of the Company in
the web link https://www.indiaradiators.com/wp-content/uploads/2024/06/IRL_Form_
MGT_7_31-03-23-final.pdf.
As per the Companies Amendment Act, 2017, the provisions regarding
extract of Annual Return in the form of MGT-9 has been dispensed with.
27. 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.
The statement containing information as required under the provisions
of Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report.
28. TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy and Technical Absorption:
The business of the Company is Renting of 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 is not applicable to the limited business operations of the Company.
Foreign Exchange Earnings: Foreign Exchange Inward NIL Foreign
Exchange Outward - NIL
29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant or material orders which were passed by the
Regulators or Courts or Tribunals which impact the going concern status and the
Companys Operations in future.
30. EXPLANATIONS ON QUALIFICATIONS MADE BY THE AUDITORS IN THEIR
REPORTS
There are no adverse remarks made by the Auditors of the Company.
31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT a) INDUSTRY STRUCTURE AND
DEVELOPMENT
The Indian real estate sector has shown considerable upswing and is
expected to reach US$ 1 Trillion in market size by 2030. The Indian real estate market is
set to continue its growth trajectory, supported by strong demand across various segments
and increasing investment inflows. This resilience positions of the market will navigate
macroeconomic challenges and emerge stronger in the financial year 2024-25. b)
OPPORTUNITIES AND THREATS
With a surge in demand, the commercial real estate market is poised to
see double digit growth in the office and residential segments. The growth momentum is
likely to continue in the year ahead with increasing absorption and diminishing vacancy in
office space. The Average property prices in Chennai are expected to rise by 5-7% during
the fiscal year.
The real estate sector is faced with threats like liquidity constraints
and high construction costs. The rental yields are relatively low compared to other
investment avenues. c) SEGMENT WISE REPORTING
The Company operates only in one segment Renting of properties.
d) FUTURE OUTLOOK AND STATE OF AFFAIRS
The Company has applied to the Archaeological Survey of India (ASI) to
remove the restrictions in fresh constructions for restarting its operations at Puzhal
factory. The Company is also looking at other options. In the meanwhile the company has
rented out a portion of its land. e) RISKS & CONCERNS
The Archaeological Survey of India (ASI) ban on new construction is
continuing at Puzhal and only repair work to the existing building is permitted. The
Company has requested for removal of restrictions with the ASI authorities.
f) INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
Company has adequate internal control system commensurate with its size
and operations. g) Discussion on financial performance with respect to operational
performance
A review for the financial performance is given under review of
operations. h) Material developments in Human Resources / Industrial Relations front,
including number of people employed. Nil I) SIGNIFICANT CHANGES IN FINANCIAL RATIOS
The significant changes in the financial ratios of the Company are as
follows:
Financial Ratios |
2023-24 |
2022-23 |
% Change |
Reasons |
a) Current Ratio |
0.25 |
0.18 |
37.43% |
Increase in Trade Receivables |
b) Return on Capital Employed |
(3.21) |
6.03 |
(153.18%) |
Due to inclusion of profit
from discontinued business in FY 2022-23. |
c) Net Profit Ratio |
(882.33) |
1077.19 |
(181.91%) |
Due to inclusion of profit
from discontinued business in FY 2022-23. |
d) Return on Investment |
(3.06) |
5.67 |
(153.97%) |
Due to inclusion of profit
from discontinued business in FY 2022-23. |
j) Any change in return of net worth as compared to the immediately
preceding financial year.
The details of return of net worth as compared to the immediately
preceding financial year are provided as given below: (Rs. In Lakhs)
No. Net Worth FY 2023-24 |
Net Worth FY 2022-23
(Previous Financial Year) |
Change |
Explanation |
1 47.90 |
(355.80) |
403.70 |
Due to Other Comprehensive
income during the year |
INFORMATION PURSUANT TO RULE 5 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 year
ended 31 March 2024. |
Mr. E N Rangaswami, Whole-time
Director |
NA |
The percentage increase in remuneration of
each Director, Chief Financial Officer, Company |
Mr. E.N.Rangaswami, Whole-time Director |
NIL |
Secretary in the year ended 31
March 2024. |
Mr. R Subbaraya Davey, |
6% |
Chief Financial Officer (upto 07th August
2023) |
|
Mr. V Padmanabha Sarma (from
08th August 2023 till 21st June 2024) |
NA |
Mr. N. Umasankar (from 22nd June 2024) |
NA |
Mr.Oberoi Jangit, Company Secretary |
NA |
The percentage decrease in the
median remuneration of employees in the financial year ended 31 March 2024 |
NA |
NA |
The number of permanent
employees on the rolls of Company as on 31 March 2024 |
THREE |
|
Average percentage increase
already made in the salaries of employees other than the managerial personnel in the last
financial year and its comparison with the percentile increase in the managerial
remuneration and justification thereof |
Other than KMP KMP |
NA 6% |
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 Qualification Experience Date of Age Last
(In Rs.) Joining Employment
E N Rangaswami Whole Time NIL* B.Sc., ACA 45 years 06-08-2020 67 Manali
petro Director chemicals Ltd, General Manager (Finance) R Subbaraya Davey CFO 1,69,109
B.Com 44 years 01-04-2015 67 Mercantile
(upto 07-08-2023) Ventures Limited V Padmanabha Sarma CFO NIL* B.Com.,
ACA 45 Years 08-08-2023 74 Mercantile
(from 08-08-2023) Ventures Limited N Umasankar CFO NIL* MBA- Finance 30
years 22-06-2024 56 I3 Securitiy (from 22-06-2024) & HR Private Limited Oberoi Jangit
M Company NIL* M.Com, ACS 8 Years 16-06-2024 32 Assistant Secretary Company Secretary in
Orient Green Power Company Limited Group.
1. The above appointments are contractual.
2. As per the disclosure available with the Company, none of the above
employees are related to any Director and they do not hold any shares in the Company.
* Mr. E N Rangaswami, V Padmanabha Sarma, Mr. N Umasankar and Mr.
Oberoi Jangit M are paid remuneration by Mercantile Ventures Limited, the Holding Company.
AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF
THE COMPANY.
Company is adopting remuneration guidelines for fixing the remuneration
as per the policies laid down by the Nomination and
Remuneration Committee.
ACKNOWLEDGEMENT
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.
E N Rangaswami |
B Narendran |
Whole Time Director |
Director |
DIN: 06463753 |
DIN: 01159394 |
Place : Chennai |
Date : 02-08-2024 |