Dear Members,
Your Directors present the Thirty Eight Annual Report of your Company together with the
Audited Financial Statements of the Company for the Financial Year ended March 31, 2023.
1. Background
Your Company is registered with the Reserve Bank of India (RBI) as Non-Systemically
Important Non-Deposit taking Non-Banking Financial Companies (NBFC).
2. Financial Highlights
Particulars |
Financial Year ended |
| March 31, 2023 (In Lakhs) |
March 31, 2022 (In Lakhs) |
Total Income |
2646.73 |
2091.07 |
Total Expenditure |
1595.10 |
1272.57 |
Profit-(Loss) before tax |
1051.62 |
818.50 |
Profit-(Loss) after tax |
784.85 |
609.10 |
Paid-up Share Capital |
1473.85 |
1473.85 |
3. Operating Highlights
During the year under review, revenue from operations of the Company is Rs. 2638.81
Lakhs as compared to Rs. 2084.46 Lakhs in the previous year. The Company earned a profit
after tax of Rs. 784.85 lakhs as compared to Rs. 609.10 Lakhs in the previous year. Your
Directors are putting in their best efforts to improve the performance of the Company.
4. Companys Affairs
Your Company is engaged in the business of providing Secured and Unsecured Loans &
Advances and also to make investment in both quoted and unquoted securities. The Company
offers specialized solutions for meeting specific liquidity requirements with technical
insights into Capital Markets.
5. Dividend
To maintain the liquidity of funds, your Board of Directors does not recommend any
dividend for the Financial Year under review.
6. Share Capital
There is no change in the Share Capital of the Company during the Financial Year under
review.
7. Fixed Deposits
The Company has not accepted any fixed deposit during the year under review as per the
provision of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014.
8. Listing Agreement
Your Company is listed on BSE Limited and complied with all the requirements of Listing
Agreement. Also, your Company has paid listing fees for the Financial Year 2022-23 to the
BSE Limited. The Company is also listed on Delhi Stock Exchange (Inoperative Stock
Exchange).
9. Particulars of Loans, Guarantees or Investments Under Section 186
Your Company being a Non-Banking Financial Company (NBFC), the disclosure regarding
particulars of loans made, guarantees given and securities provided in the ordinary course
of its business is exempted as per the provisions of Section 186(11) of the Companies Act,
2013. Details of the investments made by the Company pursuant to the provisions of Section
186 of the Companies Act, 2013 are given in the Notes to accounts forming part of the
audited financial statements for the financial year ended March 31, 2023.
10. Adequacy of Internal Financial Controls
The Company has adequate system of internal control to safeguard and protect from loss,
unauthorized use for disposition of its assets. AH the transactions are probably
authorized, recorded and reported to the Management. The Company is following all
applicable Accounting Standards for properly maintaining the books of accounts and
reporting financial statements. The Internal Auditor of the company checks and verifies
internal control and monitors them in accordance with policy adopted by the Company. The
Company continues to ensure proper and adequate systems and procedures commensurate with
its size and nature of business.
11. Transfer to Reserves
The Company has transferred an amount of Rs. 156.97 Lakhs to the Special Reserve of the
RBI Act, 1934 out of current years profits.
12. Directors
Number of Meetings of the Board
During the year, 07 (Seven) Board Meetings were convened and held, details of which are
provided in the Corporate Governance Report. The intervening gap between the Meetings was
in compliance with the Companies Act, 2013.
Policy on Directors Appointment and Remuneration
The policy of the Company on Directors Appointment and Remuneration, including
criteria for determining qualifications, positive attributes, independence of a director
and other matters provided under Sub-section (3) of Section 178 of the companies Act,
2013, adopted by the Board, is placed on the website of the Company
i.e. www.sonalmercantile.in.
Declaration by Independent Directors
All Independent Directors have given declarations under section 149(7) of the Companies
Act, 2013 that, they meet the criteria of independence as laid down under section 149(6)
of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
Evaluation of the performance of the Board
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Board has carried out the Annual
Performance Evaluation of its own
performance, the Directors individually as well as the evaluation of the working of its
Committees. The criteria applied in the evaluation process are explained in the Corporate
Governance Report.
The Independent Directors in their separate meeting has evaluated performance of
Non-Independent Directors, performance of the Board as a whole and also performance of the
Chairman of the Company.
Familiarization Programme for Independent Directors
In compliance with the requirements of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Company has put in place a Familiarization Programme
for its Independent Directors to familiarize them with their roles, rights and
responsibilities as Directors, the working of the Company, nature of the industry in which
the Company operates, business model etc. The details of the Familiarization Programme are
explained in the Corporate Governance Report. The same is also available on the website of
the Company at www.sonalmercantile.in.
Appointment of KMP / Directors
No Directors has been appointed during the year.
Mr. Akshay Khare has been appointed as Company Secretary cum Compliance officer of the
Company w.e.f. 10.06.2022.
Retirement -Re-appointment
In terms of Section 152 of the Companies Act, 2013, Mr. Rajan Goyal (DIN: 02600825)
who retires by rotation at the ensuing AGM, being eligible offered himself for
reappointment. His Brief Resume is mentioned in the annexure attached to the Notice.
Resignation of KMP / Directors
No Directors has been resigned during the year.
However, Mrs. Prabhjeet kaur has been resigned from the post of Company Secretary cum
Compliance officer of the Company w.e.f. 27.04.2022.
Disclosure of Relationships Between Directors Inter-Se
Mr. Vikram Goyal and Mr. Rajan Goyal are directly related to each other. As they both
are Brothers.
Key Managerial Personnel
The details of Key Managerial Personnel (KMP) of the Company during the year are:
Name of Key Managerial Personnel |
Designation |
Appointment-Cessation |
1. Mr. Vikram Goyal |
Whole Time Director |
November 23, 2018 |
2. Mr. Rohit Saraogi |
Chief Financial Officer |
May 22, 2018 |
3. Mrs. Prabhjeet Kaur |
Company Secretary & Compliance Officer |
till April 27, 2022 |
4. Mr. Akshay Khare |
Company Secretary & Compliance Officer |
w.e.f 10th June, 2022 |
13. Committees of the Board
Your Company has a duly constituted Audit Committee, Nomination & Remuneration
Committee, Stakeholders Relationship Committee and Risk Management Committee, Corporate
Social Responsibility Committee as per the provisions of Section 177, 178, 135 of the
Companies Act, 2013 and provisions of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors has
constituted such committees to enable the Board to deal with specific areas-activities
that need a closer review and to have an appropriate structure to assist in the discharge
of its responsibilities.
A detailed note on the Board and its committees is provided under the Corporate
Governance report section in this Annual Report to avoid the repetetion.
14. Subsidiary Companies-Associate Companies-Joint Ventures
The Company has One Associate Company i.e. M/s Rudraveerya Developers Limited.
15. Code of Conduct
Your Company has already in place a well framed Code of Conduct for carrying its day to
day business operations of the Company. The Code lays down the standard procedure of
business conduct which is expected to be followed by the directors and the employees in
their business dealings and in particular on matters relating to integrity in the work
place, in business practices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliance
with the Code. The detailed Code of Conduct can be referred from the website of the
Company i.e. www.sonalmercantile.in.
16. Details of Establishment of Vigil Mechanism- Whistle Blower Policy For Directors
And Employees
The Company has already in place a well framed Vigil Mechanism- Whistle Blower Policy
for Directors and Employees. The purpose of this policy is to provide a framework to
promote responsible and secure whistle blowing. It protects employees willing to raise a
concern about irregularities within the Company. The Company has also provided adequate
safeguards against victimization of employees and Directors who express their concerns.
The Company has also provided direct access to the Chairman of the Audit Committee on
reporting issues concerning the interests of employees and the Company. This policy is
also placed on the website of the Company. i.e. www.sonalmercantile.in.
17. Business Risk Management Policy
Pursuant to section 134 of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the company has constituted a Risk Management
Committee. The details of the committee and its terms of reference are set out in the
corporate governance report forming part of the Annual report. The Company has implemented
Risk Management Policy and the Board of Directors has prepared a comprehensive framework
of risk management for assessment of risks and to determine the responses to these risks
so as to minimize their adverse impact on the organization.
The policy as approved by the Board of Directors is uploaded on Companys website i.e. www.sonalmercantile.in.
18. Prevention of Insider Trading
The Company has already adopted a Code of Conduct for Prevention of Insider Trading
with a view to regulate trading in securities by the Directors and certain designated
employees of the Company. All Board Directors and the designated employees have confirmed
compliance with the Code. The Code is uploaded on Companys website at i.e. www.sonalmercantile.in.
19. Auditors
Statutory Auditors
M/s. Ajay Rattan & Co. Chartered Accountants (Firm Reg No. 012063N), has appointed
as a Statutory Auditors of the Company for a period of 5 (five) years i.e. from the
conclusion of 37th Annual General Meeting till the conclusion of the 42nd
Annual General Meeting to be held in the year 2027. The Board has taken note and M/s. Ajay
Rattan & Co. Chartered Accountants have confirmed their eligibility under Section 141
of the Companies Act, 2013 and the Rules framed thereunder as Statutory Auditors of the
Company as required under Listing Regulations, the Auditors have also confirmed that they
hold a valid certificate issued by the Peer Review Board of the Institute of Chartered
Accountants of India.
Auditors Report
The observations and Comments made by the Statutory Auditor in their Report read
together with notes on the Financial Statements are self-explanatory and do not call for
any further comments under Section 134 of the Companies Act, 2013.
Secretarial Auditor
Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
had appointed Mr. Nitin Gupta (Practicing Company Secretary) to undertake the
Secretarial Audit of the Company for Financial Year 202223. There is one qualification,
reservation or adverse remark made in his Secretarial Audit Report. The Audit Report is
annexed herewith as “Annexure A”.
The observation as mentioned below:
The company was required to maintain Structured Digital Database (SDD) as per SEBI
(PIT) Regulations 2015, however, the Company did not maintain such database in suitable
software having time stamping feature. However, as per the information and explanation
given by the management, a software for the purpose of maintaining SDD is implemented by
the company w.e.f. July, 2023.
The Board of Directors has noted the observation and pleased to inform that Now,
Company has suitable SDD software that fulfills the regulatory requirements.
Reporting of frauds by Auditors
There were no frauds reported by Auditors as per Section 134(3) and Section 143 of the
Act.
Internal Auditor
The Company has re-appointed Ms. Surbhi Singhal as an Internal Auditor of the Company
for the financial year 2022-23.
20. Extract of Annual Return
In accordance with Section 92(3) of the Companies Act, 2013, the details forming part
of the extract of the Annual Return in Form MGT-9 is annexed herewith as “Annexure
B”.
The Web Address where Annual Return of the Company for the Financial Year 2022-23
referred in Section 92 has been placed is www.sonalmercantile.in.
21. Corporate Social Responsibility
Pursuant to provision of Section 135 of the Companies Act, 2013, your Company falls
within the criteria of CSR applicabilty, therefore, the Company has formed CSR Policy. The
CSR Policy & CSR Activity Report_is annexed herewith as “Annexure E”.
22. Prudential Norms & Directions of RBI for NBFCs
Your company has complied with all the requirements prescribed by the Reserve Bank of
India and has filed the required returns.
23. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
i. Conservation of Energy & Technology Absorption: The Company, being a Non-Banking
Finance Company (NBFC), does not have any manufacturing activity. The directors,
therefore, have nothing to report on ‘Conservation of Energy and Technology
Absorption.
ii. Foreign Exchange Earnings and Outgo: The foreign exchange earnings and outgo are
given below:
Particulars |
2022-23 (Rs.) |
2021-22 (Rs.) |
Foreign Exchange Earnings |
0 |
0 |
Foreign Exchange outgo |
0 |
0 |
24. Particulars of Employees
The information required pursuant to Section 197 of the Companies Act, 2013 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 and annexed herewith as
“Annexure C”.
25. Related Party Transactions
All the Related Party Transactions are entered into by the Company, at arms length
basis, in the ordinary course of business and are in compliance with the applicable
provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and the Companys Policy on Related Party Transactions. Accordingly, the
disclosure of Related Party Transactions as required under Section 134(3) (h) of the
Companies Act, 2013 is mentioned in Form AOC-2. (“Annexure D”)
The policy on Related Party Transactions is displayed on the website of the Company
i.e. www.sonalmercantile.in.
26. Sexual Harassment
The Company has in place a Prevention of Sexual Harassment Policy in line with the
requirements of the sexual harassment of women at workplace (Prevention, Prohibition and
Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are
covered under this policy.
During the Year 2022-23, no complaint was received/pending by the Company related to
sexual harassment.
27. Business Responsibility Report
Business Responsibility Report as stipulated under Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to the
Company.
28. Corporate Governance
The Company is committed to maintain the steady standards of corporate governance and
adhere to the corporate governance requirements set out by SEBI. A Report on Corporate
Governance regarding compliance with the conditions of Corporate Governance as stipulated
in Regulations 17 to 27, clauses (b) to (i) of subregulation (2) of Regulation 46 and
paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual
Report and also a Certificate from the Practicing Company Secretary of the Company
regarding compliance with the conditions of Corporate Governance forms a part of this
Report.
29. Managements Discussion and Analysis Report
Managements Discussion and Analysis Report (MDAR) for the year under review, as
stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is presented in a separate section forming part of the
Annual Report.
30. Disclosures under the Act
Significant and Material Orders
No significant and material order was passed against the Company by any regulator or
court or tribunal impacting going concern status and companys operations in future.
There was no application filed/proceedings done/pending related to the Insolvency and
Bankruptcy Code, 2016.
Material changes and commitments affecting the financial position of the Company after
the close of financial year
There are NO material changes and commitments affecting the financial position of the
Company, which has occurred between the end of the financial year of the Company i.e.
March 31, 2023 and the date of the Boards Report.
Change in the Nature of Business
There is no change in the nature of the Business of the Company during the Financial
Year.
31. Directors Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013, the directors would like to
state that:
i. In the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departure.
ii. The directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of
the profit or loss of the Company for the year under review.
iii. The directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. The directors have prepared the annual accounts on a going concern basis.
v. The directors had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and were operating
effectively.
vi. The directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such system were adequate and operating effectively.
32. Compliance with the provisions of Secretarial Standard-1 and Secretarial Standard-2
The Directors have devised proper systems to ensure compliance with the provisions of
all applicable Secretarial Standards issued by the Institute of Company Secretaries of
India (ICSI) and that such systems are adequate and operating effectively.
33. Dematerialisation of Shares:
The ISIN No. INE321M01017 has been allotted for the Company. Therefore, the matter
and/or investors may keep their shareholding in the electronic mode with their Depository
Participates. 99.38% of the Company were held in dematerialized form and 0.62% of the
issued share capital as on March 31, 2023.
34. Health, Safety And Environment Protection:
The Company has complied with all the applicable environmental law and labour laws. The
Company has been complying with the relevant laws and has been taking all necessary
measures to protect the environment and maximize worker protection and safety.
35. Human Resources
People remain the most valuable asset of your Company. Your Company follows a policy of
building strong teams of talented professionals. Your Company continues to build on its
capabilities in getting the right talent to support different products and geographies and
is taking effective steps to retain the talent. It has built an open, transparent and
meritocratic culture to nurture this asset. The Company recognizes people as its most
valuable asset and The Company has kept a sharp focus on Employee Engagement. The
Companys Human Resources is commensurate with the size, nature and operations of the
Company.
36. Maintenance Of Cost Records
Maintenance of Cost Audit Records as specified by the Central Government under
sub-section (1) of Section 148 of the Companies Act, 2013 is not applicable to the Company
and accordingly such accounts and records are not required to be made and maintained.
37. RBI Guidelines
The Company continues to fulfill all the norms and standards laid down by the Reserve
Bank of India for the Non-Banking Financial Company.
38. NBFC Registration
The company has registered with Reserve Bank of India as Non-Banking Finance Company
vide: B-14.02393 Dated 19/07/2002.
39. Credit Rating
The directors of the Company are pleased to report that the Company is registered with
all four RBI Authorized CICs Companies i.e. TransUnion CIBIL Limited (Formerly: Credit
Information Bureau (India) Limited). Credit Information Bureau (India) Limited (CIBIL),
Equifax Credit Information Services Private
SONAL MERCANTILE LIMITED
Limited (ECIS), Experian Credit Information Company of India Pvt. Ltd, CRIF High Mark
Credit Information Services Pvt. Ltd.
40. Acknowledgments and Appreciation
The Directors take this opportunity to thank the Companys customers, shareholders,
investors, suppliers, bankers, financial institutions and Central & State Governments
for their consistent support to the Company. The Directors also wish to place on record
their appreciation to employees at all levels for their hard work, dedication and
commitment.
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For and on Behalf of the Board |
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Sonal Mercantile Limited |
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Vikram Goyal |
Rajan Goyal |
Date: September 01st, 2023 |
Whole Time Director |
Director |
Place: New Delhi |
DIN:00381115 |
DIN: 02600825 |
+91-9892691696
