Your Directors present the Thirty Fourth Annual Report of your Company togetherwith the Audited Financial Statements of the Company for the Financial Year ended March31 2019.
Your Company is registered with the Reserve Bank of India (RBI) as Non-SystemicallyImportant Non-Deposit taking Non-Banking Financial Companies (NBFC).
2. Financial Highlights
|Particulars || |
Financial Year ended
| ||March 31 2019 (In Lakh) ||March 31 2018 (In Lakh) |
|Total Income ||421.03 ||279.57 |
|Total Expenditure ||326.85 ||260.14 |
|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 Lakhas 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 Directorsare putting in their best efforts to improve the performance of the Company.
4. Company's 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 Companyoffers specialized solutions for meeting specific liquidity requirements with technicalinsights into Capital Markets.
To maintain the liquidity of funds your Board of Directors does not recommend anydividend for the Financial Year under review.
6. Share Capital
There is no change in the Share Capital of the Company during the Financial Year underreview.
7. Fixed Deposits
The Company has not accepted any fixed deposit during the year under review as per theprovision of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
8. Listing Agreement
Your Company is listed on BSE Limited and complied with all the requirements of ListingAgreement. Also your Company has already paid listing fees for the Financial Year 2019-20to the BSE Limited. The Company is also listed on Delhi Stock Exchange (Inoperative StockExchange).
9. Particulars of Loans Guarantees or Investments Under Section 186
Your Company being a Non-Banking Financial Company (NBFC) the disclosure regardingparticulars of loans made guarantees given and securities provided in the ordinary courseof its business is exempted as per the provisions of Section 186(11) of the Companies Act2013. Details of the investments made by the Company pursuant to the provisions of Section186 of the Companies Act 2013 are given in the Notes to accounts forming part of theaudited 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 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.
11. Transfer to Reserves
The Company has transferred an amount of Rs. 13.94 Lakh to the Special Reserve u/s45-IC of the RBI Act 1934 out of current year's profits.
Number of Meetings of the Board
During the year 14 (Fourteen) Board Meetings were convened and held details of whichare provided in the Corporate Governance Report. The intervening gap between the Meetingswas in compliance with the Companies Act 2013.
Policy on Directors' Appointment and Remuneration
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 placed on the website of the Company i.e.www.sonalmercantile.in. The web link of the policy ishttp://www.sonalmercantile.in/investors-information.php.
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)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 Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out the AnnualPerformance Evaluation of its own performance the Directors individually as well as theevaluation of the working of its Committees. The criteria applied in the evaluationprocess are explained in the Corporate Governance Report.
The Independent Directors in their separate meeting has evaluated performance ofNonIndependent Directors performance of the Board as a whole and also performance of theChairman of the Company.
Familiarization Programme for Independent Directors
In compliance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a Familiarization Programmefor its Independent Directors to familiarize them with their roles rights andresponsibilities as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The details of the Familiarization Programme areexplained in the Corporate Governance Report. The same is also available on the website ofthe Company at www.sonalmercantile.in.
During the Financial Year 2018-2019 Mr. Rajan Goyal and Ms. Tanisha Bhagat have beenappointed on the Board with effect from November 23 2018 as Additional Directors whowere 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 hasbeen 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) whoretires 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. DeepChand Singhal and Mr. Sunil Kumar w.e.f. 23.11.2018 Mr. Naresh Poddar w.e.f. 19.01.2019and 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 bothare 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 & RemunerationCommittee Stakeholders Relationship Committee and Risk Management Committee as per theprovisions of Section 177 178 of the Companies Act 2013 and provisions of the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. The Board of Directors has constituted such committees to enable the Board to dealwith specific areas/activities that need a closer review and to have an appropriatestructure to assist in the discharge of its responsibilities.
A detailed note on the Board and its committees is provided under the CorporateGovernance 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 today business operations of the Company. The Code lays down the standard procedure ofbusiness conduct which is expected to be followed by the directors and the employees intheir business dealings and in particular on matters relating to integrity in the workplace in business practices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. The detailed Code of Conduct can be referred from the website of theCompany and the web link is http://www.sonalmercantile.in/investors-information.php.
16. Details of Establishment of Vigil Mechanism/ Whistle Blower Policy For DirectorsAnd Employees
The Company has already in place a well framed Vigil Mechanism/ Whistle Blower Policyfor Directors and Employees. The purpose of this policy is to provide a framework topromote responsible and secure whistle blowing. It protects employees willing to raise aconcern about irregularities within the Company. The Company has also provided adequatesafeguards against victimization of employees and Directors who express their concerns.The Company has also provided direct access to the Chairman of the Audit Committee onreporting issues concerning the interests of employees and the Company. This policy isalso placed on the website of the Company.
The link of the Vigil Mechanism ishttp://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 Obligationsand Disclosure Requirements) Regulations 2015 the company has constituted a RiskManagement Committee. The details of the committee and its terms of reference are set outin the corporate governance report forming part of the Annual report. The Company hasimplemented Risk Management Policy and the Board of Directors has prepared a comprehensiveframework of risk management for assessment of risks and to determine the responses tothese risks so as to minimize their adverse impact on the organization.
The policy as approved by the Board of Directors is uploaded on Company's website athttp://www.sonalmercantile.in/investors-information.php.
18. Prevention of Insider Trading
The Company has already adopted a Code of Conduct for Prevention of Insider Tradingwith a view to regulate trading in securities by the Directors and certain designatedemployees of the Company. All Board Directors and the designated employees have confirmedcompliance with the Code. The Code is uploaded on Company's website athttp://www.sonalmercantile.in/investors- information.php.
The shareholders of the Company had appointed M/s V.N. Purohit & Co. CharteredAccountants (ICAI Firm's Registration No. 304040E) as Statutory Auditors for a period ofthree (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 theStatutory Audit of the company.
M/s V. N. Purohit & Co. (Chartered Accountants) is doing the Statutory Audit of theCompany from last Six (6) years and left with a term of four (4) years as per theapplicable provisions of Companies Act 2013 therefore based on the recommendation ofthe Audit Committee the Board of Directors have decided to recommend to the members ofthe Company for their approval the appointment of M/s V. N. Purohit & Co. again as theStatutory Auditor of the Company for a term of 4 years.
The observations and Comments made by the Statutory Auditor in their Report readtogether with notes on the Financial Statements are self-explanatory and do not call forany 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 Directorshad appointed Mr. Nitin Gupta (Practicing Company Secretary) to undertake the SecretarialAudit of the Company for Financial Year 2018-19. There is no qualification reservation oradverse remark made in his Secretarial Audit Report. The Audit Report is annexed herewithas "Annexure A".
Reporting of frauds by Auditors
There were no frauds reported by Auditors as per Section 134(3) and Section 143(12) ofthe Act.
20. 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 "AnnexureB".
21. Corporate Social Responsibility
Pursuant to provision of Section 135 of the Companies Act 2013 your Company does notfall within the criteria of turnover and/or/ profit and/or net worth therefore theCompany 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 ofIndia 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 anymanufacturing activity. The directors therefore have nothing to report onConservation of Energy and Technology Absorption'.
ii. Foreign Exchange Earnings and Outgo: The foreign exchange earnings and outgoare given below:
|Particulars ||2018-19 ||2017-18 |
| ||(Rs.) ||(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 withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in 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 arm's lengthbasis in the ordinary course of business and are in compliance with the applicableprovisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and the Company's Policy on Related Party Transactions. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3) (h) of theCompanies Act 2013 is mentioned in Form AOC-2. ("Annexure D")
The policy on Related Party Transactions is displayed on the website of the Company andthe 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 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 2018-19 no complaint was received by the Company related to sexualharassment.
27. Business Responsibility Report
Business Responsibility Report as stipulated under Regulation 34 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is not applicable to theCompany.
28. Corporate Governance
The Company is committed to maintain the steady standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. A Report on CorporateGovernance regarding compliance with the conditions of Corporate Governance as stipulatedin Regulations 17 to 27 clauses (b) to (i) of sub-regulation (2) of Regulation 46 andparagraphs C D and E of Schedule V of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport and also a Certificate from the Practicing Company Secretary of the Companyregarding compliance with the conditions of Corporate Governance forms a part of thisReport.
29. Management's Discussion and Analysis Report
Management's Discussion and Analysis Report (MDAR) for the year under review asstipulated under Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented in a separate section forming part of theAnnual Report.
30. Disclosures under the Act
Significant and Material Orders
No significant and material order was passed against the Company by any regulator orcourt or tribunal impacting going concern status and company's 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.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 FinancialYear.
31. Director's 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.
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 ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia (ICSI) and that such systems are adequate and operating effectively.
33. Acknowledgments and Appreciation
The Directors take this opportunity to thank the Company's customers shareholdersinvestors suppliers bankers financial institutions and Central & State Governmentsfor their consistent support to the Company. The Directors also wish to place on recordtheir appreciation to employees at all levels for their hard work dedication andcommitment.
| || ||For and on Behalf of the Board |
| || ||Sonal Mercantile Limited |
| ||Sd/- ||Sd/- |
| ||Vikram Goyal ||Rajan Goyal |
|Date: June 12 2019 ||Whole Time Director ||Director |
|Place: New Delhi ||DIN: 00381115 ||DIN: 02600825 |