Sonal Mercantile Ltd.
|BSE: 538943||Sector: Financials|
|NSE: N.A.||ISIN Code: INE321M01017|
|BSE 11:22 | 12 Jan||Sonal Mercantile Ltd|
|NSE 05:30 | 01 Jan||Sonal Mercantile Ltd|
|BSE: 538943||Sector: Financials|
|NSE: N.A.||ISIN Code: INE321M01017|
|BSE 11:22 | 12 Jan||Sonal Mercantile Ltd|
|NSE 05:30 | 01 Jan||Sonal Mercantile Ltd|
Your Directors present the 31st Annual Report of your Company together withthe Audited Annual Accounts for the Financial Year ended 31st March 2016.
During the year under review total revenue of the Company is Rs. 23327765 as againstRs. 23274126 in the previous year. The Company incurred a profit of Rs. 611313 aftertaxes as against Rs. 309523 in the previous year. Your Directors are putting in theirbest efforts to improve the performance of the Company.
The Company (registered with the Reserve Bank of India (RBI) as a Non-Banking FinancialCompany) engaged mainly in the business of providing Secured and Unsecured Loans &Advances and investing in securities both quoted and unquoted. The Company offersspecialized solutions for meeting specific liquidity requirements with technical insightsinto capital markets.
In view of marginal profits made by the Company your Directors regret their inabilityto recommend any dividend for the financial year 2015-16.
There is no change in the Equity Share Capital of the Company during the financial yearunder review.
The Company has not accepted any fixed deposit during the year under review fallingwithin the purview of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014. There are no deposits which are outstanding as on 31stMarch 2016.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI LODRRegulations") with the aim to consolidate and streamline the provisions of theListing Agreement for different segments of capital markets to ensure betterenforceability. The said regulations were effective 01st December 2015.Accordingly all listed entities were required to enter into the Listing Agreement withinsix months from the effective date. The Company entered into Listing Agreement with BSELimited. The Company has already paid listing fees for the financial year 2016-17 to theBSE Limited. The Company is also listed on Delhi Stock Exchange (Inoperative StockExchange).
Particulars of Loans Guarantees or Investments Under Section 186
Particulars of Loans and Guarantees are provided in the financial statements (pleaserefer the Note 14 to the financial Statements).
Adequacy of Internal Financial Controls
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use for disposition of its assets. All the transactions are probablyauthorized recorded and reported to the Management. The Company is following allapplicable accounting standards for properly maintaining the books of accounts andreporting financial statements. The Internal Auditor of the company checks and verifiesinternal control and monitors them in accordance with policy adopted by the company. TheCompany continues to ensure proper and adequate systems and procedures commensurate withits size and nature of business.
Transfer to Reserves
The Company has transferred an amount of Rs. 122263 to the General Reserve put ofcurrent years profits and the same is in compliance with the applicable provisionsprescribed under the Special reserves u/s 45-IC of the RBI Act1934.
During the year under review your Company enjoyed cordial relationship with employeesat all levels.
Number of Meetings of the Board
During the year Twenty Four Board Meetings were convened and held details of which areprovided in the Corporate Governance Report. The intervening gap between the Meetings wasin compliance with the Companies Act 2013.
Policy on Directors Appointment and Remuneration
The current policy is to have a appropriate mix of Executive and Independent directorsto maintain the independence of the board separate its function of Governance andManagement. As on 31st March 2016 the Board consists of 4 members one ofwhom executive whole time directors one is non executive director and other two areindependent Directors. The Board periodically evaluates the need for change in itscomposition and its size.
The policy of the company on directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Sub-section (3) of Section 178 of the companies Act2013 adopted by the Board is appended as "Annexure A" to theBoards Report. We affirm that remuneration paid to the directors is as per the termslaid out in the remuneration policy of the company.
Declaration by Independent Directors
All independent directors have given declarations under section 149(7) of the CompaniesAct 2013 that they meet the criteria of independence as laid down under section 149(6) ofthe Companies Act 2013 and the SEBI LODR Regulations.
Evaluation of the performance of the Board
Pursuant to the provisions of the Act and the SEBI LODR Regulations the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. The criteriaapplied in the evaluation process is explained in the Corporate Governance Report.
The Independent Directors at a separate meeting evaluated performance ofnon-independent directors performance of the Board as a whole and performance of theChairpersons of the Company.
Familiarization Programme For Independent Directors
In compliance with the requirements of SEBI LODR Regulations the Company has put inplace a familiarization programme for the Independent Directors to familiarize them withtheir roles rights and responsibilities as Directors the working of the Company natureof the industry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the Company at www.sonalmercantile.com.
During the year under review there has not been any appointment of new Director(s) inthe Board of the Company.
In terms of Section 152 of the Companies Act 2013 Mr. Deep Chand Singhal (DIN:00815681) who retires by rotation at the ensuing AGM offered himself forreappointment. His Brief Resume is given in Annexure attached to the Notice.
The Board recommends the reappointment of Mr. Sunil Kumar (DIN: 00243057) as a wholetime Director of the Company. His Brief Resume is given in Annexure attached to the Noticeand further the term and conditions of his appointment are mentioned in ExplanatoryStatement attached to the Notice.
None of Independent Directors will retire at the ensuing Annual General Meeting.
During the year under review Mr. Vishnu Mittal and Mr. Gopal Bansal resigned from theDirectorship of the Company w.e.f. 07th April 2015 and 08thSeptember 2015 respectively.
The Board hereby places on record their valuable contribution towards the growth anddevelopment of the company during their tenure as director of the Company.
Disclosure of Relationships Between Directors Inter-Se
Mr. Deep Chand Singhal and Mr. Sunil Kumar are directly related to each other. As theyboth are Brothers.
Key Managerial Personnel
Mr. Sunil Kumar Whole-Time Director Ms. Deepika Rathore Company Secretary and Ms.Anjali Aggarwal Chief Financial Officer of the Company are the Key Managerial Personnels("KMP") of the Company.
There are no changes in the KMP during the year under review.
Directors Responsibility Statement
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departure.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such system were adequate and operating effectively.
Subsidiary Companies/Associate Companies/Joint Ventures
The Company do not have any subsidiary joint venture or associate Company hence noneed to state anything about the same.
Committees of The Board
The Board has currently four committees names as Audit Committee Nomination andRemuneration Committee Risk Management Committee and Stakeholders Relationship Committee*(formerly known as Shareholders/Investors Grievance Committee")
During the year in accordance with provision of Companies Act 2013 the Board ofDirectors of the Company has renamed the existing committee viz. StakeholdersRelationship Committee (formerly known as Shareholders/Investors GrievanceCommittee")
A detailed note on the Board and its committees is provided under the CorporateGovernance report section in this annual report.
Code of Conduct
The Board of Directors has approved a Code of Conduct which is applicable to members ofthe Board and all employees in the course of day to day business operations of thecompany. The Code has been placed on the Companys website. The Code lays down thestandard procedure of business conduct which is expected to be followed by the directorsand the designated employees in their business dealings and in particular on mattersrelating to integrity in the work place in business practices and in dealing withstakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
Details of Establishment of Vigil Mechanism/ Whistle Blower Policy For Directors AndEmployees
In order to ensure that the activities of the company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behavior of the company has adopted a vigil mechanismpolicy. The aim of the policy is to provide adequate safeguards against victimization ofwhistle blower who avails of the mechanism and also provide direct access to the Chairmanof audit Committee in appropriate and exceptional cases.
Accordingly whistle Blower policy has been formulated with a view toprovide a mechanism for the Directors and employees of the Company to approach the EthicsCounselor or the Chairman of the audit Committee of the Company.
The purpose of this policy is to provide a framework to promote responsible and securewhistle blowing. It protects employees willing to raise a concern about irregularitieswithin the Company. This policy is also posted on the website of the company. The WhitsleBlower Policy as approved by the Board is displayed on the website of the Company athttp://www.sonalmercantile.com/images/Policy_for_Vigil_Machanism.pdf
Business Risk Management And Policy
Pursuant to section 134 (3) (n) of the Companies Act 2013 and SEBI LODR Regulationsthe company has constituted a risk management committee. The details of the committee andits terms of reference are set out in the corporate governance report forming part of theAnnual report.
The Company has implemented Risk Management Policy and the Board of Directors hasprepared a comprehensive framework of risk management for assessment of risks and todetermine the responses to these risks so as to minimize their adverse impact on theorganization. The policy as approved by the Board of Directors is uploaded onCompanys website at http://www.sonalmercantile.com/images/Policy_Risk_Management.pdf
Prevention of Insider Trading
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and certain designated employees of theCompany. The Code requires pre-clearance for dealing in the Companys shares andprohibits the purchase or sale of Company shares by the Directors and designated employeeswhile in possession of unpublished price sensitive information in relation to the Companyand during the period when the trading window is closed. The Board is responsible forimplementation of the Code. All Board Directors and the designated employees haveconfirmed compliance with the Code.
At the Thirtieth (30th) AGM held on 29th September 2015 theMembers approved the appointment of M/s V.N. Purohit Chartered Accountants (ICAIFirms 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. As recommended by the Audit Committeethe appointment of M/s V.N. Purohit Chartered Accountants as Statutory Auditors of theCompany until the conclusion of the Thirty Second (32nd) AGM proposal forratification is being included in the Notice of the ensuing AGM for your approval.
Comments made by the Statutory Auditors in the Auditors Report areself-explanatory and do not require any further clarification.
Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Ms. Rachna Bhasin Practicing Company Secretary in practice to undertake theSecretarial Audit of the Company for financial year 2015-16. The Secretarial Audit Reportis annexed herewith as "Annexure B".
The Board of Directors of your company has appointed Mr. Mukesh Kumar Gupta PracticingChartered Accountant as an internal auditor of the company and his report is reviewed bythe Audit Committee from time to time.
Extract of Annual Return
In accordance with Section 92(3) of the Companies Act 2013 the details forming partof the extract of the Annual Return in form MGT-9 is annexed herewith as "AnnexureC".
Corporate Social Responsibility
The provision of Section 135 of the Companies Act 2013 regarding Corporate SocialResponsibility shall not be applicable to companies having net worth not exceeding Rs. 500Cr or turnover not exceeding Rs. 1000 Cr or net profit not exceeding Rs. 5 Cr or moreduring any financial year as on the last date of previous financial year. In thisconnection we wish to inform you that in respect of our company as on the last auditedbalance sheet as at March 31 2016 neither the net worth exceeds Rs. 500 Cr nor turnoverexceeds Rs. 1000 Cr nor net profit exceeding Rs. 5 Cr. Hence the provisions of CompaniesAct 2013 regarding Corporate Social Responsibility would not be applicable.
Prudential Norms & Directions of RBI for NBFCs
Your company has complied with all the requirements prescribed by the Reserve Bank ofIndia and has filed the required returns.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
a. Conservation of Energy & Technology Absorption: The Company being anonbanking finance company
(NBFC) does not have any manufacturing activity. The directors therefore havenothing to report on conservation of energy and technology absorption.
b. Export Activities: There was no export activity in the Company during the yearunder review. The Company has no immediate plans for export in the near future as well.
c. Foreign Exchange Earnings and Outgo: There was no Foreign Exchange earnings andoutgo during the year under review.
Particulars of Employees
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company forms part of this report and annexed herewith as "AnnexureD". In terms of Section 136 of the Act the reports and accounts are being sentto the members and others entitled thereto including the information on employeesparticulars which is available for inspection by the members at the Registered office ofthe company at all working days except Saturdays between 11 A.M. to 01:00 P.M. up to thedate of Annual General Meeting. If any member is interested in inspecting the same suchmember may write to the company secretary in advance.
Related Party Transactions
All the Related Party Transactions are entered into by the Company at armslength basis in the ordinary course of business and are in compliance with the applicableprovisions of the Act and the SEBI LODR Regulations and the Companys Policy onRelated Party Transactions. During the financial year 2015-16 the Company did not enterinto any material related party transactions i.e. transactions exceeding ten percent ofthe consolidated turnover as per the last audited financial statements. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3) (h) of the Actin Form AOC 2 is not applicable however Form AOC-2 attached as "Annexure E"for details of rent paid to Director.
The policy on Related Party Transactions as approved by the Board is displayed on thewebsite of the Company athttp://www.sonalmercantile.com/images/Policy_for_Related_Party_Transactions.pdf
The Company has in place a Prevention of Sexual harassment policy in line with therequirements of the sexual harassment of Women at workplace ( Prevention Prohibition andRedressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy.
During the Year 2015-16 no complaints were received by the Company related to sexualharassment.
Business Responsibility Report
Clause 55 of the listing Agreement is not applicable to our Company. Since noinitiative with respect to environmental social etc has been taken.
The Company is committed to maintain the steady standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. A detailed report on thecorporate governance systems and practices of the Company is provided as a separatesection along with a certificate from the Practicing Company Secretary as stipulated underthe Schedule V (E) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 confirming the compliance by the Company with the conditions of Corporate Governanceand also certificate from CFO as stipulated under the Regulation 17(8) of the SEBI LODRRegulations forming part of this Report.
Managements Discussion and Analysis Report
Managements Discussion and Analysis Report for the year under review asstipulated under Regulation 34 of the SEBI LODR Regulations with the Stock Exchanges ispresented in a separate section forming part of the Annual Report.
DISCLOSURES UNDER THE ACT
Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting going concern status and companys operations in future.
Material changes and commitments affecting the financial position of the Companyafter the close of financial year
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. 31stMarch 2016 and the date of the Directors Report.
Change In The Nature of Business
There were no changes in the nature of the Business during the Financial Year ended 31stMarch 2016.
Reporting of Frauds by Auditors
There were no frauds reported by auditors as per Section 134(3) and Section 143(12) ofthe Act.
The statements forming part of the Boards Report may contain certain forwardlooking remarks within the meaning of applicable securities laws and regulations. Manyfactors could cause the actual results performances or achievements of the Company to bematerially different from any future results performances or achievements that may beexpressed or implied by such forward looking statements.
Acknowledgments and Appreciation
The Directors take this opportunity to thank the Companys customersshareholders investors suppliers bankers financial institutions and Central &State Governments for their consistent support to the Company. The Directors also wish toplace on record their appreciation to employees at all levels for their hard workdedication and commitment.