ANNUAL REPORT

Transcription

1 ANNUAL REPORT Mercantile Ventures Limited

2 Board of Directors AL Chandramouli Director (DIN: ) K.Gopalakrishnan Director (DIN: ) M.Rajamani Director (DIN: ) E N Rangaswami Whole-time Director (DIN: ) Auditors M/s. DPV & Associates Sri Ranga, First Floor, New No. 151, Mambalam High Road, T Nagar, Chennai Audit Committee AL Chandramouli M Rajamani K.Gopalakrishnan Chief Financial Officer V. Padmanabha Sarma Company Secretary S Aarthi Chairman Member Member Registrars and Share Transfer Agent Cameo Corporate Services Limited, Subramanian Building, 1, Club House Road, Chennai Registered Office New No.73, Old No.36-40, Armenian Street, Chennai CIN: L65191TN1985PLC admin@mercantileventures.co.in Website: Principal Office 88, Mount Road, Guindy, Chennai CONTENTS 1. Notice to Shareholders Directors Report and Management Discussion & Analysis Report Report on Corporate Governance Auditors Report on the Financial Statements Balance Sheet Statement of Profi t and Loss Cash Flow Statement Notes to Financial Statements Auditor s Report on consolidated Financial Statements Consolidated Financial Statements... 32

3 MERCANTILE VENTURES LIMITED Registered Offi ce: New No: 73, Old No: 36-40, Armenian Street, Chennai NOTICE OF THE ANNUAL GENERAL MEETING Notice is hereby given that the Thirteenth Annual General Meeting of MERCANTILE VENTURES LIMITED will be held on Monday the 22 nd day of September 2014 at 3 PM at Rajah Annamalai Mandram, 5, Esplanade Road (Near High Court), Chennai to transact the following businesses. ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31 March 2014, Profi t and Loss Account and the Cash Flow Statement for the year ended on that date and the Reports of Directors and Auditors thereon. 2. To appoint a Director in place of Mr M. Rajamani (DIN: ), who retires at this meeting and being eligible, offers himself for re-appointment. 3. To appoint Auditors: To consider and if thought fi t, to pass with or without modifi cation, the following resolution as an Ordinary Resolution: RESOLVED THAT the retiring Auditors of the Company, M/s. DPV & Associates, Chennai (Registration No S), being eligible for reappointment, be and are hereby reappointed as Auditors of the company, to hold offi ce till the conclusion of the 16 th Annual General Meeting of the company to be held in the year 2017, on such terms and conditions as to remuneration, out of pocket expenses, etc., as may be fi xed by the Board of Directors of the Company. SPECIAL BUSINESS 4. To Consider and if thought fi t, to pass with or without modifi cation the following resolution as an ordinary resolution. RESOLVED THAT pursuant to the provisions of the Companies Act, 2013 and the Companies (Appointment and Qualifi cation of Directors) Rules, 2014 (including any statutory modifcation(s) or re-enactment thereof for the time being in force) Mr. K Gopalakrishnan (DIN: ) who was appointed as an Additional Director with effect from 7 November 2013 and who holds offi ce up to the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing his candidature for the offi ce of Director, be and is hereby appointed as a Director of the Company. Place : Chennai Date : 13 August 2014 By Order of the Board For MERCANTILE VENTURES LIMITED E N RANGASWAMI Whole-time Director NOTES: 1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and such proxy need not be a member. A blank form of proxy is enclosed, which, if used, should be deposited at the Registered Office of the Company not less than 48 hours before the meeting. 2. The Register of Members and the Transfer Books will remain closed from 15 September 2014 to 22 September 2014 both days inclusive. 3. All the shareholders are requested to convert the physical shares to demat and to effect change of address, if any. 4. Members are requested to bring their copies of Annual Report. 5. Pursuant to the stipulations in Clause 35B of the Listing Agreement read with Section 108 of the Companies Act 2013, and the relevant Rules, the Company has entered into an arrangement with Central Depository Services Limited (CDSL) to facilitate the Members to exercise their right to vote at the Annual General Meeting by electronic means. The detailed process for participating in e-voting is furnished in the Annexure to the Notice in Page No 3. The Company has appointed Mr. R Kannan, Practising Company Secretary as the scrutinizer for E-voting 6. A person who has participated in e-voting is not debarred from participating in the meeting physically though he shall not be able to vote in the meeting again and his earlier vote cast electronically shall be treated as final. In terms of the provisions of Section 107 read with Section 109, there will be no voting by show of hands at the meeting and hence the provisions relating to demand for poll by the Members is irrelevant. The Chairman of the meeting will regulate the meeting and voting on the resolutions in accordance with the provisions of the Act and the applicable Rules. 1

4 7. The share holding of the Members will be reckoned as on the date of 22 August 2014 for the purpose of E-voting 8. As per SEBI directive, submission of self attested PAN copy of transferee/ legal heir including joint holders, if any is mandatory for registration of transfer/transmission/transposition of shares. Hence the respective transferee/ legal heir including joint holders are requested to attach their self attested PAN copy to Company/RTA while lodging the documents for registration 9. Members those who hold share(s) in physical form are requested to notify immediately any change in their address to the Company/ RTA and those who hold share(s) in demat to concerned depository participants. 10. Shareholders are aware that, the Ministry of Corporate Affairs has allowed Companies to send Notices for meetings and other shareholders correspondences in electronic form. Hence the Shareholders are requested to register their ID s with the Registrars of the Company by submitting EARF( address Registration Form). 11. The related Explanatory statement pursuant to sec 102 of the companies Act 2013, in respect of item No.4 is annexed hereto. ANNEXURE TO NOTICE Explanatory Statement required in pursuance of section 102 of the Companies Act ITEM No. 4 The Board of Directors of the Company appointed Mr.K Gopalakrishnan as an Additional Director of the Company with effect from 7 November 2013.In terms of the provisions of Section 161(1) of the Act, Mr.K Gopalakrishnan would hold offi ce up to the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member along with the deposit of requisite amount under Section 160 of the Act proposing the candidature of Mr.K Gopalakrishnan for the offi ce of Director of the Company. Mr.K Gopalakrishnan is not disqualifi ed from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director. Brief resume of Mr.K Gopalakrishnan, nature of his expertise in specifi c functional areas and names of companies in which he holds directorships as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is provided below: Mr. K. Gopalakrishnan, aged 48 years, is a Post-graduate in History with Diploma in Public Administration. He has about 25 years of experience in Real-Estate / Facilities Management and in liaisoning activities. Directorship in other Companies SPIC Offi cers and Staff Welfare Foundation : Director Express Carriers Limited : Director Aqua-vin Pipes Private Limited : Director Greenspace Manufacturing Industries Private Ltd : Director Tuticorin Water Company Private Limited : Director Oasis Ventures Private Limited : Director Renowned Engineers Private Limited : Director Twinshield Consultants Private Limited : Director Keeping in view his vast expertise and knowledge, it will be in the interest of the Company that Mr.K Gopalakrishnan be appointed as a Director. The Board recommends the Ordinary Resolution set out at Item No. 4 of the Notice for approval of the members as an Ordinary Resolution. Place : Chennai Date : 13 August 2014 By Order of the Board For MERCANTILE VENTURES LIMITED E N RANGASWAMI Whole-time Director 2

5 INSTRUCTIONS FOR EXERCISE OF VOTING RIGHT BY ELECTRONIC MEANS 1. The voting period begins on 15 September 2014 and ends on 17 September E-Voting system will be available at all time except between 00:00 hrs to 01:00 hrs. (IST). During this period shareholders of the Company to whom notice of the AGM have been despatched electronically or physically by registered post or courier, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter. 2. Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to register themselves as Corporates by logging on to A scanned copy of the Registration Form duly signed and seal affi xed should be ed to helpdesk.evoting@cdslindia.com. The login details will be sent by CDSL by reply mail. After receiving the login details they have to create a compliance user who would be able to link the account(s) which they wish to vote on. The list of accounts should be mailed to helpdesk.evoting@cdslindia.com and on approval of the accounts they can cast their vote. They should upload a scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, in PDF format in the system for the scrutinizer to verify the same. 3. The following are the instructions for participating in the e-voting on the resolutions contained in the notice of the Annual General Meeting. These apply to all the Members of the Company and who receive the notice either by or physical copy. a) Log on to the e-voting website during the voting period. b) Click on Shareholders tab. c) Select the COMPANY NAME from the drop down menu and click on SUBMIT d) Enter your User ID as shown below Members holding shares in demat form with CDSL Sixteen digits benefi ciary ID Members holding shares in demat form with NSDL Eight Character DP ID followed by eight digits client ID Members holding shares in physical form Folio No. e) Enter the image verifi cation as displayed and click on Login f) Enter the password: PAN - Members holding shares in Demat form and who have already exercised e-voting on an earlier occasion through www. evotingindia.com in respect of their holding in any other company shall use their existing password. If the password has been forgotten they will have to enter the User ID and Image Verifi cation Code and then click on Forgot Password to enter the details as prompted by the system for retrieving the password. - Password entry for Members who are holding shares in demat form and are exercising e-voting for the fi rst time and for Members holding shares in Physical form shall be as below: 10 digit PAN issued by the Income Tax Department, if the same has been registered with the DP or as the case may be with the Company. For Members who have not registered their PAN, the fi rst two letters of their name followed by the eight digits Serial Number printed on the address slip shall be entered in the PAN Field. *Date of Birth Date of Birth as registered with the DP or as the case may be with the Company in DD/MM/YYYY format. *Bank Details Enter the Bank details as recorded in your demat account are in the Company records for the said demat account are folio * Enter any one of the details in order to login. g) Click Submit for further processing. If the password entered is incorrect, system will not allow the login and you will have to repeat the process under (e) above until the proper password is entered. h) Members holding shares in physical form will be directed to the Company Selection menu. i) Members holding shares in demat form and participating in e-voting through for the fi rst time will be required mandatorily to create their own password to proceed with the e-voting process. The new password shall be used by them for any future e-voting on CDSL Platform. After completion of the new password creation, they will be directed to the Company Selection Menu. j) Click on the EVSN for Mercantile Ventures Limited and you will be directed to the E-Voting Screen. k) The Description of the Resolutions as set out in the Notice of the Meeting and the voting options YES/NO will be displayed for each of the resolutions on this Screen for voting. l) Click on the Resolutions File Link if you wish to view the full description of the resolutions. m) Select the option YES or NO for each of the item as desired by you. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution. n) After selection, click on SUBMIT and a confi rmation box will be displayed. If you wish to confi rm and complete the voting press OK, else press CANCEL to change your vote. o) Once you CONFIRM your vote on the resolution, you will not be allowed to modify your vote. 3

6 p) You can also take out print of the voting done by you by clicking on Click here to print option on the Voting page. 4. Voting through electronic means would be on the basis of proportion of shares held by the member viz., on one-share one-vote basis. 5. For any queries or issues regarding e-voting, please refer to the Frequently Asked Questions ( FAQs ) and e-voting manual available at under help section or write an to helpdesk.evoting@cdslindia.com DIRECTORS REPORT AND MANAGEMENT DISCUSSION & ANALYSIS REPORT Your Directors are pleased to present the Annual Report and the Audited Accounts of the Company for the year ended 31 March Review of operations During the year the company has reported a profi t after tax of Rs lakhs as against a loss of Rs lakhs in the previous year Financial Results (Rs. in lakhs) Description Profi t Before Interest & Depreciation (419.84) Depreciation Profi t Before Tax & Exceptional items (425.32) Exceptional items (508.03) Profi t Before Tax (121.37) Provision for Taxation: Current Tax Deferred tax (114.67) Profi t After Tax (281.74) Joint Development Agreement During the year the Company entered into a joint development agreement for development of freehold land belonging to the Company at Chennai. Pursuant to the agreement, the Company has transferred 75% of the Undivided Share to the developer and recognized the appropriate income thereon. Formation of subsidiary During the year the Company formed Oasis Ventures Private Limited, a wholly owned subsidiary on 4 November 2013 to do the business of facility management and other services. i3 Security Private Limited engaged in the business of security services became the subsidiary of Oasis Ventures Private Limited on 12 December 2013 Future Outlook The main business of the Company would be that of investing in properties for leasing. Due to current slowdown of market conditions in the real estate sector, revenue from these operations is expected to improve over a period of time. Dividend The Company has not declared any dividend for the year. Consolidated financial statements Consolidated fi nancial statements of Mercantile Ventures Limited, Oasis Ventures Private Limited and i3 Security Private Limited prepared in accordance with Accounting Standard AS 21, issued by the Institute of Chartered Accountants of India, and as required by the Listing Agreement are attached and forms part of the Annual Report and Accounts. Directors The Company s Board comprises of the following directors at present: Mr. AL Chandramouli Mr. K Gopalakrishanan Mr. M Rajamani Mr. E N Rangaswami Mr. K Gopalakrishanan was appointed as an Additional Director with effect from 7 November 2013 and is proposed to be re-appointed in the ensuing Annual General Meeting. Mr. S Kumar who was appointed as a Director in the Board on 15 November 2012 resigned from the Board with effect from 7 November The company places on record the invaluable contributions made by the outgoing Director. Mr. M. Rajamani, Director of the company retires by rotation at the ensuing Annual General Meeting of the company and being eligible offers himself for re-election. Auditors M/s. DPV & Associates, Chartered Accountants appointed as the Auditors of the Company at the 12th Annual General Meeting held on 30th September 2013 hold offi ce till the conclusion of 13th Annual General Meeting and are eligible for re-appointment. As per Section 139 of the new Act, they can hold offi ce from the conclusion of the 13 th AGM till the conclusion of the 16 th AGM. Their re-appointment will have to 4

7 be ratifi ed by the Members at every AGM. In compliance with the requirements of the new Act, it is proposed to appoint the retiring Auditors to hold offi ce till the conclusion of the 16 th AGM to be held in the year 2017, subject to ratifi cation at the next AGM. Fixed Deposits The Company has not invited or accepted any deposits during the year. Corporate Governance A Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. The requisite certifi cate from a Practising Company Secretary confi rming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is attached to this Report. Directors responsibility statement Pursuant to Sub-Section 2AA of section 217 of the Companies Act 1956, the Directors confirm that: 1. In the preparation of annual accounts, the applicable accounting standards have been followed. 2. Appropriate Accounting Policies have been selected and applied consistently by the company and that the judgments and the estimates made thereat are prudent and reasonable so as to give a true and fair view of the state of affairs of the company as at 31 March 2014 and of the profi t of the company for the year ended 31 March Proper and suffi cient care has been taken in maintaining adequate accounting records of the company in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities and 4. The Annual Accounts of the company as aforesaid have been prepared on a going concern basis. CEO /CFO Certification The Whole time Director and the Chief Financial Offi cer have submitted a certifi cate to the Board regarding the fi nancial statements and other matters as required under Clause 49 (V) of the Listing Agreement. Particulars of Employees: Details prescribed under Section 217(2A) of the Companies Act 1956, read with Companies (Particulars of Employees) Rules, 1975 are not applicable as no employee of the company was in receipt of remuneration exceeding the limits prescribed therein. Financial Statements of Subsidiary companies:- The statement pursuant to sub-section 3 of Section 212 of the Companies Act 1956 is given as annexure. Pursuant to the exemption granted by the department of Company Affairs, Government of India, the parent company is publishing the consolidated and standalone fi nancial statements of Mercantile Ventures and its subsidiaries viz. Oasis Ventures Private Limited and i3 Security Private Limited. The fi nancial statements and auditors report of the individual subsidiaries are available for inspection by the shareholders at the registered offi ce. The information in aggregate on capital, reserves, total assets, total liabilities, details of investments, turnover, profi t before taxation, provision for taxation, profi t after taxation and proposed dividend for each subsidiary are given as annexure. Internal control systems The company has adequate internal control procedures commensurate with the size and nature of its operations. The internal control systems were further strengthened by internal audit conducted by an internal auditor, appointed by the Company. The Audit Committee of the board addresses issues raised by the internal auditor and the statutory auditors. Reply to Auditor s observation The notes to the fi nancial statements have adequately addressed the Auditor s observation. The Company has initiated the process of review of the quantum of likely realizations and appropriate decisions will be taken in the current year Acknowledgement Your Directors express their grateful thanks for the assistance, co-operation and support extended to the Company by Promoters and the shareholders for their continued support. The Directors also place on record their appreciation of the good work put in by the employees of the company. For and on behalf of the Board Place : Chennai Date : 13 August 2014 M. Rajamani Director E.N. Rangaswami Whole-time Director 5

8 REPORT ON CORPORATE GOVERNANCE ( ) 1. Company s Philosophy Your Company strives to conduct business with sound Corporate Governance practices which refl ect fairness, integrity, accountability and transparency in our dealings with stakeholders and regulatory authorities The report covers the corporate governance aspects in your company relating to the year ended 31 March, Board of Directors a) Composition and membership in other Boards As on 31 March 2014, the board comprised of 4 Directors, as detailed below: S. No Name Category Membership in other Boards 1. Mr. AL. Chandramouli Non-Executive, Independent - 2. Mr. K Gopalakrishnan Non-Executive, Independent 8 3. Mr. M.Rajamani Non-Executive, Independent 7 4. Mr. E.N. Rangaswami Executive, Non-independent 3 b) Number of Board of Directors meetings and the dates on which held during the year ended 31 March, 2014 The Board of Directors met 5 times during the year ended 31 March 2014 viz., on 29 May 2013, 8 August 2013, 23 September 2013, 7 November 2013 & 12 February Attendance of Directors at the Board of Directors Meetings held during Name Period of office held during the period No. of meetings held during the period of office No. of meetings attended Mr.M.Rajamani *Mr.S.Kumar Mr.K Gopalakrishnan Mr. AL. Chandramouli Mr. E.N. Rangaswami *Mr. S Kumar resigned from the Board of Directors with effect from 7 November 2013 Committees of Board of Directors The Board has constituted various Committees to discuss, deal with the matters in detail and to monitor the activities falling within the terms of reference and discharge the roles and responsibilities as prescribed under Listing Agreement and/or the Companies Act, 1956 from time to time. 3. Audit Committee Terms of reference The role of the Audit Committee shall include the following: 1. Oversee the Company s fi nancial reporting process and review its fi nancial statements. 2. In addition to the normal overall review of the fi nancial performance, Audit Committee will also recommend the quarterly results, appointment of auditors, recommendation of dividend, application of Accounting Standards, discussion on fi nancial audit reports, etc. 3. Recommend the appointment, re-appointment and if required, the replacement or removal of the statutory auditors and fi xation of their fees. 4. Review of internal control and internal audit system. 5. Review of risk management policies and practices and also include the following: a) To investigate any activity within its terms of reference. b) To seek information from any employee, if needed. 6

9 c) To obtain outside legal or other professional advice. d) To secure attendance of outsiders with relevant expertise. Meetings held The Committee met 4 times during the year ended 31 March 2014 viz., on 29 May 2013, 8 August 2013, 7 November 2013 & 12 February Composition and Attendance: Committee Composition as on 31 March Mr. A L Chandramouli - Chairman 2. Mr. K Gopalakrishnan- Member 3. Mr. M.Rajamani Member Attendance of Committee members at the Meetings held during Name Period of office held during the period No. of meetings held during the period of office No. of meetings attended Mr.M.Rajamani *Mr.S.Kumar Mr.K Gopalakrishnan Mr. AL. Chandramouli *Mr. S Kumar resigned from the Board of Directors with effect from 7 November 2013 The composition of the Committee is in conformity with Clause 49 (II) (A) of the Listing Agreement. The Whole time Director, Statutory Auditors and Internal Auditor also attend the Audit Committee Meetings and the Company Secretary is Secretary to the Committee. 4. Remuneration Committee Terms of reference and composition The Remuneration committee shall recommend to the Board on matters relating to fi xation and payment of remuneration to the Directors and Key Managerial Personnel of the company. Meetings held Remuneration Committee meeting was held on 29 May 2013 during the year. Composition & Attendance Committee Composition as on 31 March Mr. M.Rajamani - Chairman 2. Mr. A L Chandramouli - Member 3. Mr. K Gopalakrishnan Member Attendance of Committee members at the Meetings held during Name Period of office held during the period No. of meetings held during the period of office No. of meetings attended Mr.M.Rajamani *Mr.S.Kumar Mr.K Gopalakrishnan Mr. AL. Chandramouli *Mr. S Kumar resigned from the Board of Directors with effect from 7 November

10 Details of remuneration paid a) Sitting fees to Non-executive Directors: S.No Name of the Director Sitting fee paid (in Rs.) 1 Mr. A L Chandramouli 35,000 2 Mr. S.Kumar 35,000 3 Mr. K. Gopalakrishnan 20,000 4 Mr. M. Rajamani 1,24,000 Total 2,14,000 b) Remuneration paid/payable to Whole-time Director of the Company during the year ended 31 March 2014, are as follows: (Rs. in lakhs) Name Salary Allowances & Perquisites Total Mr. E N Rangaswami Whole Time Director 5. Shareholders / Investors Grievance Committee Terms of reference The terms of reference to the Shareholders/Investors Grievance Committee are related to transfer, transmission, demat, remat, split/consolidation of shares and issue of duplicate share certifi cates, etc and also to oversee the redressal of investors complaints. During the year under report, three complaints were received from the shareholders including complaints received from shareholders through SEBI and other statutory bodies which were redressed. As on 31 March 2014, no documents were pending for transfer. Meetings held Investors Grievance Committee met 19 times during the year ended 31 March 2014 viz.. 30 April 2013, 29 May 2013, 27 June 2013, 24 July 2013, 12 August 2013, 30 August 2013, 16 September 2013, 21 September 2013, 8 October 2013, 22 October 2013, 7 November 2013, 22 November 2013, 9 December 2013, 24 December 2013, 10 January 2014, 23 January 2014, 12 February 2014, 12 March 2014, & 28 March 2014 Composition and Attendance: Name of Director No. of meetings held during the period No. of meetings attended Mr.M.Rajamani, Chairman * Mr. S. Kumar, Member 4 4 Mr.E.N Rangaswami, Member *Mr. S Kumar resigned from the Board of Directors with effect from 7 November Disclosures Disclosures on materially signifi cant related party transactions i.e. transactions of the Company of material nature, with its promoters, the directors, the subsidiaries or relatives, etc. that may have potential confl ict with interest of the Company at large:- a) There are no transactions with the related party viz. Promoters, Directors or the Management, their subsidiaries or relatives that may have potential confl ict with the interest of the Company at large. b) There are no pecuniary relationships or transactions with the Non-executive Directors of the Company except the payment of sitting fees made for attending the Board Meetings of the Company. c) The Company has complied with various rules and regulations prescribed by stock exchanges, SEBI or any other statutory authority relating to capital markets and no penalties or strictures have been imposed by them on the Company. 7. Communication with shareholders As stipulated under Clause 41 of the Listing Agreement, the quarterly results are published in one English national newspaper, and one Tamil newspaper within 48 hours of the conclusion of the Board Meeting at which the results are approved. The results are also been displayed in the website of the company viz. The information stipulated in Clause 54 of the Listing Agreement have also been made available in the website of the company. 8

11 8. General Shareholders information a) Ensuing AGM Date : 22 September 2014 b). Time : 3 PM Venue : Rajah Annamalai Mandram, 5, Esplanade Road, (Near High Court) Chennai Financial Calendar for (Tentative) The fi nancial year of the Company is April to March of every year and the tentative fi nancial calendar for publication of quarterly/annual results is as under st quarter ending 30 th June 2014 Before 15 th August, nd quarter ending 30 th September 2014 Before 15 th November, rd quarter ending 31 st December 2014 Before 15 th February, Last quarter & year ending 31 st March 2015 Before 30 th May 2015 c) Book Closure Date: 15th September 2014 to 22nd September 2014 d) Dividend Payment Date: Not Applicable e) Registrar and Share Transfer Agents (RTA) The Company has appointed M/s. Cameo Corporate Services Limited, as its Registrar and Share Transfer Agent both for electronic and physical transactions of the shares. The shareholders are therefore requested to send all documents, correspondences, queries, intimations on any matters relating to transfer/transmission/demat/remat of shares, issue of duplicate share certifi cates, change of address etc., to the following address. M/s.Cameo Corporate Services Limited Unit: Mercantile Ventures Limited No.:1, Club House Road, Subramanian Building, 5 th Floor Chennai Tel: Fax: cameo@cameoindia.com A separate ID cs@mercantileventures.co.in has been created by the Company for the purpose of registering the complaints by the investors. Company Secretary has been appointed as Compliance Offi cer of the Company for redressal of investors grievances. The shareholders may correspond to the above address for redressal of grievances if any. f) Share Transfer & Depository System The physical share transfers, transmissions, transpositions etc., are processed on number of requests received and the documents duly completed in all respects are registered within the time limit as specifi ed by the listing agreement. The ISIN number allotted to the Company by Central Depository Services (India) Ltd (CDSL) and National Securities Depositary Limited (NSDL) is INE Since trading in equity shares of the Company shall be permitted only in dematerialized form, the shareholders those who are holding shares in physical form, are advised to dematerialize their shares to avoid the risks associated with holding the share certifi cates in physical form. The shareholders may also kindly note that as directed by SEBI, the Company/RTA is in the process of sending reminders to the shareholders, those who are holding the shares in physical form and who have not claimed their share certifi cates from the Company so far, to retrieve their share certifi cates. g) Listing of Equity Shares on Stock Exchanges The equity shares of the Company are listed with Madras Stock Exchange. However, no trading activity took place as the Exchange was waiting for trading approval from SEBI. Now, Madras Stock Exchange has exited from trading platform. The Company has already applied to BSE for listing of its shares. 9

12 h) Distribution of shareholding as on 31 March 2014: Range of shares Holders Shares No. % No. % And Above Total (i) Shareholding Pattern as on 31 March 2014 Category No. of holders No. of shares held % of holding Promoters Holding Promoters & Associates Non-Promoters Holding (a) Institutional Investors Financial Institutions / Banks (b) Others Bodies Corporate NRIs & Foreign Nationals Public Total i) Dematerialisation of Equity Shares As on 31 March 2014, 0.04% of the paid up capital of the Company has been dematerialized. The Shareholders holding physical shares are advised to dematerialize the shares to avoid risks associated with holding the shares in physical form. j) Registered & Principal Office The Registered offi ce of the Company is located at New No: 73, Old No: 36-40, Armenian Street, Chennai The Principal Offi ce of the Company is located at 88, Mount Road, Guindy, Chennai k) Communication through electronic mode As per the earlier circular issued by the Ministry of Corporate Affairs, all the companies have been allowed / permitted to send their annual reports comprising of Notice, Directors Report, Auditors Report, Balance Sheet, Profi t & Loss account etc. by to their members after giving an advance opportunity to register their address with the Company or with the concerned depository. In order to implement the above practice, the shareholders are hereby requested to register their ID with the Company/RTA by submitting EARF ( Address Registration Form), a copy of which is available with the company. l) Nomination of physical shares Members holding shares in physical form are encouraged to nominate a person to whom the shares in the Company shall vest in the event of death. Nomination forms will be sent to the Members on request. m) CEO / CFO Certification As required by Clause 49 (V) of the Listing Agreement, certifi cate from CEO/CFO was submitted to the Board. n) Certificate on Corporate Governance The Company has obtained a certifi cate from a Practising Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement and the same has been annexed at the end of this report. 10

13 9. Insider Trading Pursuant to Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 1992, the Company has prescribed a Code of Conduct for Prevention of Insider Trading and a Code of Corporate Disclosure Practices. 10. Code of Conduct The Company has formulated a Code of Conduct for the Board members and Senior Management Personnel. Compliance Certificate on Corporate Governance Report Prasticing Company Secretary s Certifi cate (Under Clause 49 of the Listing Agreement) To The shareholders of Mercantile Ventures Limited We have examined the compliance of the conditions of Corporate Governance by Mercantile Ventures Limited for the year ended 31 March 2014 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges. The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the Conditions of Corporate Governance as stipulated in the Clause 49 of the Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the effi ciency or effectiveness with which the management has conducted the affairs of the Company. Place: Chennai Date : 13 August 2014 R.Kannan Practising Company Secretary C.P No: F3363 Declaration from CEO on Code of Conduct To The shareholders of Mercantile Ventures Limited, As provided under Clause 49 (D) of the Listing Agreement with the Stock Exchanges, the Board of Directors and the Senior Management Personnel have affi rmed compliance with the Company s Code of Conduct for the year ended 31 March For Mercantile Ventures Limited Place : Chennai Date : 13 August 2014 E N RANGASWAMI Whole-time Director 11

14 Independent Auditor s Report To the Members of Mercantile Ventures Limited Report on Financial Statements We have audited the accompanying fi nancial statements of Mercantile Ventures Limited (previously named as MCC Finance Limited) ( the Company ), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profi t and Loss and Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements The Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 ( the Act ) read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements. Attention of the members is drawn to the following:- Basis of Qualified Opinion:- The other non-current assets detailed in Note 12 includes the following relating to the NBFC business carried on by the Company prior to the appointment of Offi cial Liquidator (since permanently stayed) :- a. Lease Parties Balances Rs. Nil (Rs Lakhs) b. Hire Purchase dues Rs. Nil (Rs.2, Lakhs) c. Advances to Associate Investment Companies Rs.4, Lakhs (Rs.5, Lakhs) d. Other advances Rs.9, Lakhs (Rs.10, Lakhs) A comprehensive review of all the receivables relating to the old NBFC business was conducted to determine the quantum of possible realisation from these accounts, with the available records and documents. The company has written off a sum of Rs.6, lakhs to the profi t and loss account and a corresponding reduction from other non-current assets during the year. Qualified Opinion We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion. In our opinion and to the best of our information and according to the explanations given to us, the fi nancial statements give the information required by the Companies Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India and subject to Note 12: a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014; b) in the case of the Profi t and Loss Account, of the profi t for the year ended on that date; and c) in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date. 12

15 Report on Other Legal and Regulatory Requirements:- 1. As required by the Companies (Auditor s Report) Order, 2003 ( the Order ) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order. 2. As required by section 227(3) of the Act, we report that: a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books subject to the Note no.12 c) the Balance Sheet, Statement of Profi t and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account subject to Note no.12 d) in our opinion, the Balance Sheet, Statement of Profi t and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 subject to Note no.12 e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualifi ed as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, f) Since the Central Government has not issued any notifi cation as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. For DPV & Associates Chartered Accountants F.R.No S Place: Chennai Date: May CA Desikan G M.No Partner 13

16 Annexure to Independent Auditors Report (Referred to in paragraph 1 under the heading of Report on other Legal and Regulatory Requirements of our Report of even date) In terms of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: 1. a) The company has maintained records showing full particulars including quantitative details and situation of Fixed Assets. b) We are informed that the Management at reasonable intervals has physically verifi ed the Fixed Assets of the Company and that no material discrepancies were noticed on such verifi cation. c) No substantial part of fi xed assets has been disposed off during the year other than that specifi ed in Note 20 to the fi nancial statements. However this does not affect the going concern assumption. 2. The company does not hold movable stock and question of physical verifi cation and procedures does not arise 3. The Company has not granted any loans to parties covered in the register maintained under section 301 of the companies Act, 1956 during the year. Hence the repayment of interest and principal is not applicable. In respect of balances recoverable relating to the NBFC business carried on by the Company prior to appointment of Offi cial Liquidator, the same are classifi ed under Other Non Current Assets. A comprehensive review of the balances in Non-Current Assets relating to old NBFC business was made by the management. The balances considered irrecoverable amounting to Rs lakhs have been written off as detailed in note 20.2 to the accounts. 4. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of assets and with regard to the sale of Investments. No instances of continuing failure to correct major weaknesses in Internal Control were noticed. 5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:- In our opinion and according to the information and explanations given to us, there were no transactions during the current year with the parties listed in the register required to be maintained under Section 301 of the Companies Act, The company has not accepted any deposits from the public. The provisions of sections 58 A & 58 AA of the companies Act, 1956, and the Rules framed there under is not applicable. 7. In our opinion, the company has an internal audit system commensurate with the size and nature of its business. 8. The central government has not prescribed the maintenance of cost records u/s.209 (1) (d) of the Companies Act, 1956 to the company. 9. According to the records of the Company, the company is regular in depositing statutory dues relating to Income tax, service tax and other material statutory dues with the appropriate authorities. According to the information and explanation given to us disputed Income Tax amounting to Rs Lakhs is outstanding as at 31st March, 2014 out of which company had paid Rs lakhs under protest. For the balance amount the company has made an appeal with the CIT (appeals) which is pending disposal. 10. The Company has accumulated losses of Rs lakhs at the end of the fi nancial year (Previous year Accumulated loss of Rs Lakhs). The Company has not incurred cash losses in the fi nancial year under report (Previous year Cash loss of Rs lakhs). 11. The Company has not defaulted in repayment of dues to Banks during the year. 12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The Company is not a chit fund / nidhi / mutual benefi t fund / society 14. The company is not dealing in or trading in Shares, Securities, Debentures & other investments. 15. The Company has not given any guarantee for loans taken by others from Bank or fi nancial institutions. 16. The company has not obtained any term loans during the year. 17. As per the records of the company, no funds were raised on short term basis and used for long term investment and vice 14

17 versa. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the current year. 19. The Company has not issued any debentures, so creation of securities in respect of debentures does not arise. 20. The Company has not raised any money by public issues during the period covered by our audit report. 21. According to the information and explanations furnished to us, no material fraud on or by the Company has been noticed or reported during the year. For DPV & Associates Chartered Accountants F.R.No S Place: Chennai Date: May CA Desikan G M.No Partner 15

18 BALANCE SHEET AS AT 31 MARCH 2014 (Rs. in Lakhs) Particulars Note No. 31 March March 2013 EQUITY AND LIABILITIES Shareholders Funds (a) Share Capital 3 11, , (b) Reserves & Surplus 4 12, , , , Non-Current Liabilities (a) Long-Term Borrowings (b) Deferred Tax Liabilities Current Liabilities (a) Other Current Liabilities 7 2, (b) Short-Term Provisions , Total - Equity & Liabilities 27, , ASSETS Non-Current Assets (a) Fixed Assets - Tangible Assets 9 1, , (b) Non Current Investments 10 3, (c) Long Term Loans and Advances 11 4, , (d)other Non-Current Assets 12 13, , , , Current Assets (a) Current Investments 10A (b) Cash and cash equivalents (c) Other Loans and advances 14 3, (d) Other current assets , , Total - Assets 27, , See accompanying Notes forming part of the financial statements In terms of our report attached. For and on behalf of the Board of Directors For DPV & Associates Chartered Accountants G. Desikan Partner S. Aarthi Company Secretary M Rajamani Director AL. Chandramouli Director Place : Chennai Date : 28 May 2014 V. Padmanabha Sarma Chief Financial Offi cer K Gopalakrishnan Director E N Rangaswami Whole-time Director 16

19 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2014 Particulars Note No. Year ended 31 March 2014 (Rs. in lakhs) Period ended 31 March 2013 Revenue: Income from Operations Other Income Total Revenue (A) 1, Expenses: Employee Benefi t Expense Depreciation and Amortization Expense Other Expenses Total Expenses (B) Profi t before exceptional and extraordinary items and tax (A-B) (425.32) Exceptional items(net) 20 (508.03) Profi t before tax (121.37) Tax expense: Current Income Tax Deferred tax liability / (Asset) (114.67) Profi t/(loss) for the year (281.74) Earning per equity share: (a) Basic & diluted before Exceptional items (in Rs) 0.69 (0.52) (b) Basic & diluted after Exceptional items (in Rs) 0.23 (0.25) See accompanying Notes forming part of the financial statements In terms of our report attached. For and on behalf of the Board of Directors For DPV & Associates Chartered Accountants G. Desikan Partner S. Aarthi Company Secretary M Rajamani Director AL. Chandramouli Director Place : Chennai Date : 28 May 2014 V. Padmanabha Sarma Chief Financial Offi cer K Gopalakrishnan Director E N Rangaswami Whole-time Director 17