Sonal Mercantile Ltd Directors Report.
Your Directors present the Thirty Fourth Annual Report of your Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2019.
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
Financial Year ended
|March 31, 2019 (In Lakh)||March 31, 2018 (In Lakh)|
|Profit/(Loss) before tax||94.17||19.43|
|Profit/(Loss) after tax||69.71||13.94|
|Paid-up Share Capital||1473.85||1473.85|
|Reserves and Surplus||816.94||762.61|
3. Operating Highlights
During the year under review, revenue from operation of the Company is Rs. 421.03 Lakh as compared to Rs. 279.57 Lakh in the previous year. The Company earned a profit of Rs. 69.71 Lakh net of taxes as compared to Rs. 13.94 Lakh 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.
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 already paid listing fees for the Financial Year 2019-20 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, 2019.
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. All 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. 13.94 Lakh to the Special Reserve u/s 45-IC of the RBI Act, 1934 out of current years profits.
Number of Meetings of the Board
During the year, 14 (Fourteen) 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. The web link of the policy is http://www.sonalmercantile.in/investors-information.php.
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 NonIndependent 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.
During the Financial Year 2018-2019, Mr. Rajan Goyal and Ms. Tanisha Bhagat have been appointed on the Board with effect from November 23, 2018 as Additional Directors, who were regularized as Director in the Extra Ordinary General Meeting held on 15-03-2019. Mr. Vikram Goyal has been appointed as Whole time director w.e.f. 23.11.2018. Mr. Deepak has been appointed on the Board with effect from March 26, 2019 as Additional director.
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.
During the year under review, Ms. Anu Aggarwal resigned w.e.f 18.09.2018, Mr. Deep Chand Singhal and Mr. Sunil Kumar w.e.f. 23.11.2018, Mr. Naresh Poddar w.e.f. 19.01.2019 and Mr. Vikram Sharma w.e.f 25.03.2019.
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 are:
|S. No.||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|
13. Committees of the Board
Your Company has a duly constituted Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee as per the provisions of Section 177, 178 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.
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 and the web link is http://www.sonalmercantile.in/investors-information.php.
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.
The link of the Vigil Mechanism is http://www.sonalmercantile.in/investors-information.php.
17. Business Risk Management Policy
Pursuant to section 134(3)(n) 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 at http://www.sonalmercantile.in/investors-information.php.
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 http://www.sonalmercantile.in/investors- information.php.
The shareholders of the Company had appointed M/s V.N. Purohit & Co., Chartered Accountants, (ICAI Firms Registration No. 304040E) as Statutory Auditors for a period of three (3) years commencing from the Thirtieth AGM till the conclusion of the Thirty Third (33rd) AGM, subject to ratification by Members every year to conduct the Statutory Audit of the company.
M/s V. N. Purohit & Co. (Chartered Accountants) is doing the Statutory Audit of the Company from last Six (6) years and left with a term of four (4) years as per the applicable provisions of Companies Act, 2013, therefore, based on the recommendation of the Audit Committee, the Board of Directors have decided to recommend to the members of the Company for their approval the appointment of M/s V. N. Purohit & Co. again as the Statutory Auditor of the Company for a term of 4 years.
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.
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 2018-19. There is no qualification, reservation or adverse remark made in his Secretarial Audit Report. The Audit Report is annexed herewith as "Annexure A".
Reporting of frauds by Auditors
There were no frauds reported by Auditors as per Section 134(3) and Section 143(12) of the Act.
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".
21. Corporate Social Responsibility
Pursuant to provision of Section 135 of the Companies Act, 2013, your Company does not fall within the criteria of turnover and/or/ profit and/or net worth, therefore, the Company has neither formed CSR Committee nor CSR Policy.
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:
|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 and the web link is http://www.sonalmercantile.in/investors-information.php.
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 2018-19, no complaint was received 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 sub-regulation (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.
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, 2019 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. 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.
|For and on Behalf of the Board|
|Sonal Mercantile Limited|
|Vikram Goyal||Rajan Goyal|
|Date: June 12, 2019||Whole Time Director||Director|
|Place: New Delhi||DIN: 00381115||DIN: 02600825|