Your Directors present the 27th Annual Report and the Audited Accounts for theFinancial Year ended 31st March 2016.
The Financial performance of the Company for the Financial Year ended 31st March 2016is summarized below:
|Particulars ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Total Revenue ||461.48 ||502.47 |
|Profit before Interest || || |
|Depreciation & Tax ||109.33 ||144.90 |
|Profit before Depreciation and Tax ||109.31 ||144.77 |
|Depreciation ||13.98 ||15.53 |
|Profit Before Tax ||95.33 ||129.24 |
|Extraordinary Income ||70.09 ||00.00 |
|Less: Provision for Tax (Net) ||33.86 ||12.94 |
|Profit After Tax ||131.56 ||116.30 |
|Add: Balance Brought Forward from the last year ||1083.64 ||1008.99 |
|Profit available for Appropriation ||1215.20 ||1125.29 |
|Appropriations: || || |
|Proposed Equity Dividend ||25.00 ||25.00 |
|Tax on Dividend ||5.08 ||5.00 |
|Transfer to General Reserve ||13.16 ||11.65 |
|Balance carried forward to Balance sheet ||1171.96 ||1083.64 |
|Total Appropriations ||1215.20 ||1125.29 |
The Companys Profit after Tax is Rs. 131.56 Lacs (Previous Year Rs. 116.30 Lacs).The Board recommends transfer of a sum of Rs. 13.16 Lacs (Previous Year Rs. 11.65 Lacs) toGeneral Reserve.
Your Directors are pleased to recommend the payment of dividend on equity shares @ Rs.0.50 per share for the financial year ending 31-03-2016. The total dividend together withtax and surcharge there on amount to Rs.30.08 Lacs (Previous year Rs. 30.00 Lacs).
The Financial Markets started the FY2016 on a firm footing as positive sentimentsspilled over from the previous year FY2015 but things started drifting apart sincethe onset of July-September quarter as global cues started affecting the Investorssentiments. The FII fraternity turned distinctly cautious on Emerging Markets as theChinese markets had a terrifyingly hard crash-landing resulting in wealth destruction ofunmanageable proportions. The Shanghai Index lost nearly
40% in a matter of weeks in June-August sending shock waves in the Financial Marketsacross the Asia-Pacific regions.
After a brief out-performance during the peak of Chinese crisis our markets started tofeel the heat and by late August joined the other faltering markets in the regiondestructing the Investor wealth & confidence quite alarmingly. In fact Monday the24th August witnessed one of the worst crashes ever last seen during the troubledLEHMAN days of 2008. The NIFTY lead Indices crashed almost 5% with NIFTY aloneshedding near 500 points & SENSEX slumping >1600 points in that single session.From that point onwards there was a new-found Fear-Factor that descanted uponthe D-Street & remained sentiment dampener for the remaining part of the FY2016.
Things improved on the margin towards the calendar year 2015 but the onset ofCY2016 witnessed a fresh & more vicious down-trend that sent the markets into anear tizzy. In fact the fall in just two months of Jan & Feb was such dramatic thatthe head-line Indices lost >14% in this phase while several popular Stocks gave-upvalues ranging up to 50-70% making it a most destructive phase over several years. Thiscatastrophic fall completely negated all the gains accrued in the aftermath of the NDAGovernments induction in May 2014 & making the FY2016 a destructive yearfor the Financial Markets. Notwithstanding the reasonably creditable recovery seen in themonth of March post the Union Budget presented on the Leap Day the 29th ofFebruary.
The thoroughly worked out Budget Document by the FM must be hailed as quitean inspirational work that put in place not only a reformist Economic agenda but quite apractical approach to managing the Fiscal health while pushing the growth agenda as well.The allocations made to the well identified Key Sectors particularly theAgriculture & the Infrastructure are well received by the markets while largeInstitutional Investors seemed quite satisfied that the government is seriously pursuingthe business priorities that will drive the Economy on the right path. Thus a FeelGood factor is appearing from the manner in which the things panned out at themarket place immediately after the event.
The strong Re-bound in Global Markets driven by a smart revival in Commoditiesespecially the Crude Oil basket also had coincided with the event of Union Budget &resulted in the pull-back process strengthening quite noticeably & helped pull themarkets out of troubled times when needed it the most. On the other hand the MacroEconomic data points from domestic shores particularly the Inflation data & the everso important data point with regard to the Current Account Deficit is encouraging. TheCore CPI Inflation point at sub- 6% consistently has been a source of great relief whilethe growth numbers reflected by the monthly IIP numbers have been somewhat sluggish yet.
Thus the combination of all these factors makes the overall outlook for the FinancialMarkets for the FY2017 quite optimistic. Incidentally the early round of Q4 Resultswas better than expected and with early predictions that the Monsoon is likely to be abovenormal have all been converging positive for the near term outlook. The relative stabilityin the Crude Oil basket holds the key for the markets outlook in the near term butthe risks of fresh bouts of volatility remains a key challenge. Also the monitorypolicies of Central Bankers around the Globe and the moves regarding the stated intentionof Rate tightening cycle by the US FED & its impact on global Portfolio Inflows remainchallenges to contend with.
During the Financial Year 2015-16 the share capital of the Company has remainedunchanged EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in format MGT -9 for theFinancial Year 2015-16 has been enclosed with this report.
NUMBER OF BOARD MEETINGS
The Details of the number of meetings of the Board held during the Financial Year2015-16 forms part of the Corporate Governance Report
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186
Details of Loans Guarantees and Investments covered under the provisions of section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of Section152 of the Companies Act 2013 Shri A K Inani and Smt Pramila Maheshwari retires byrotation at the ensuing Annual General Meeting and being eligible offer themselves forreappointment.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
(including criteria for determining qualification positive attributes independence ofa director policy relating to remuneration for Directors Key Managerial Personnel andother employees)
Policy on Directors Appointment
Policy on Directors appointment is to follow the criteria as laid down under theCompanies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations2015 and good corporate practices. Emphasis is given to persons from diverse fields orprofessions.
Policy on Remuneration
Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that -
Remuneration to Key Managerial Personnel Senior Executives Managers and staffis industry driven in which it is operating taking into account the performance leverageand factors such as to attract and retain quality talent.
For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The result of the evaluation issatisfactory and adequate and meets the requirement of the Company.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theIndependence stipulated in the aforesaid section
REMUNERATION RATIO OF THE DIRECTOS / KEY MANAGERIAL PERSONNEL
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration) Rules 2014 and Companies (Particulars of Employees) Rules1975 in respect of employees of the Company and Directors is furnished hereunder:
A) Ratio of remuneration of each Director to the median remuneration of all theemployees of your Company for the Financial Year 2015-16 as follows:
|S.No ||Name ||Remuneration Paid in the FY 2015-16 in Rs. ||Ratio / Times per Median of employee remuneration |
|1 ||Shri Krishna Kumar Maheshwari ||1504191 /- ||6.85 |
|2 ||Shri Piyush Modi ||600000/- ||2.73 |
|3 ||Shri Ashok Kumar Inani ||1028196/- ||4.68 |
The aforesaid details are calculated on the basis of remuneration for the financialyear 2015-16.
Median remuneration of the Company for all its employees is Rs 219444/- for theFinancial Year 2015-16.
B. Details of percentage increase in the remuneration of each Director and CFO andCompany Secretary in the Financial Year 2015-16 are as follows:
|Name ||Designation || |
Remuneration in Rs.
| || ||2015-16 ||2014-15 |
|Shri Krishna Kumar Maheshwari ||Managing Director ||1504191/- ||1397886 /- ||07.60 |
|Shri Piyush Modi ||Whole Time Director ||600000/- ||600000/- ||NA |
|Shri Ashok Kumar Inani ||Director Finance/ CFO ||1028196 ||942464/- ||9.09 |
|Shri Govind Toshniwal ||Company Secretary ||435098 ||67002/-* ||NA |
* For part of the previous year only
The remuneration to Directors is within the overall limits approved by theshareholders.
C. Percentage increase in the median remuneration of all employees in the financialyear 2015-16:
|Particulars ||2015-16 ||2014-15 ||Increase / (decrease)% |
|Median remuneration of all employees per annum ||Rs. 219444/- ||Rs. 220667/- ||(0.55) |
D. Number of permanent employees on the rolls of the Company as on 31st March 2016 are27 and as on 31st March 2015 are 26.
E. Explanation on the relationship between average increase in remuneration and Companyperformance:
The Increase in average remuneration of all employees in the financial year 2015-16 ascompared to the financial year 201415 was 9.10%.
The Key indices of Company's performance is as follows:
Amount in Lacs
|Particulars ||2015-16 ||2014-15 ||Growth % |
|Gross Revenue from operations ||460.50 ||502.18 ||(8.29) |
|Profit Before Tax and exceptional items ||95.33 ||129.24 ||(26.24) |
|Profit After Tax ||131.56 ||116.30 ||13.12 |
Your Company is committed in ensuring fair pay and a healthy work environment for allits employees. Your Company offers competitive compensation to its employees. The pay alsoincorporates external factors like cost of living to maintain concurrence with theenvironment. Internal equity is ensured by appropriate fitment at the time of the employeejoining a particular cadre and grade. The fixed pay for an employee depends on his/ herperformance against the objectives set for the year.
Thus there will be a positive correlation in the increase in remuneration of employeesand your Company's performance however a perfect correlation will not be visible giventhe dependency on the other factors.
F. Comparison of the remuneration of the Key Managerial Personnel against theperformance of your Company:
The remuneration of Key Managerial Personnel increased by around 6 % in 2015-16compared to 2014-15 whereas the Profit After Tax increased by 13.12% in 2015-16 comparedto 2014-15.
G. Details of Share price and market capitalization:
The details of variation in the market capitalization and price earnings ratio as atthe closing date of the current and previous financial years are as follows:
|Particulars ||As on 31st March 2016 ||As on 31st March 2015 ||Increase / Decrease % |
|Price Earnings ratio ||4.81 ||7.06 ||(31.87) |
|Market Capitalisation (in Crores) ||6.33 ||8.20 ||(22.80) |
Comparison of share price at the time of first public offer and market price of theshare of 31st March 2015:
|Market Price as on 31st March 2016 ||12.66 |
|Price at the time of initial public offer in 1995 ||10.00 |
|% increase of Market price over the prices || |
|at the time of initial public offer ||26.6 |
Closing share price on BSE has been used for the above tables.
H. Comparison of average percentage increase in salary of employees other than the keymanagerial personnel and the percentage increase in the key managerial remuneration:
|Particulars ||2015-16 ||2014-15 ||Increase /(Decrease) % |
|Average Salary of all the Employees (Other than KMP) ||286908/- ||311513 /- ||(7.89) |
|Salary of Key Managerial Personnel || || || |
|Managing Director ||1504191/- ||1397886/- ||07.60 |
|Whole Time Director ||600000/- ||600000/- ||00.00 |
|Director Finance / CFO ||1028196/- ||942464/- ||9.09 |
|Company Secretary ||435098/- ||67002/-* ||00.00 |
* For part of the previous year only
The increase in remunerations of employees other than the managerial personnel is inline with increase in remuneration of managerial personnel
I. Key parameters for the variable component of remuneration paid to the Directors:
The key parameters for the variable component of remuneration to the Directors aredecided by the Nomination and Remuneration Committee in accordance with the principleslaid down in the Nomination and Remuneration Policy.
J. There are no employees of the Company who receive remuneration in excess of thehighest paid Director of the Company.
Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 it is affirmed that the remuneration paid to the Directors KeyManagerial Personnel and senior management is as per the Remuneration Policy of theCompany.
The observations made in the Auditors Report read together with the relevantnotes thereon are self explanatory and hence do not call for any comments.
M/s. Ramkishore Jhawar & Associates Statutory Auditors of the Company holdoffice until the conclusion of 28th Annual General Meeting. The Company has received aletter from them to the effect that their appointment if made would be within theprescribed limits under Section 141(3)(g) of Companies Act 2013. Accordingly the saidAuditors can be reappointed as Statutory Auditors of the Company at the ensuing AnnualGeneral Meeting.
Raju and Prasad Chartered Accountants Hyderabad are the internal auditors of theCompany.
According to the provisions of section 204 of the Companies Act 2013 read with Rule 9of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014
the Secretarial Audit Report submitted by Company Secretary in Practice is enclosed asa part of this report
WHISTLE BLOWER / VIGIL MECHANISM POLICY
In pursuance to the provisions of section 177 of the Companies Act 2013 and SEBI(LODR)Regulations 2015 a Vigil Mechanism for Directors and Employees to report genuine concernshas been established. The Policy has been uploaded on the website of the Company.
RELATED PARTY TRANSACTIONS
Related Party transactions that were entered during the Financial Year were on anArms Length Basis and were in the Ordinary Course of Business. There were nomaterially significant related party transactions with the Companys PromotersDirectors Management and their relative which could have had a potential conflict withthe interests of the Company. Transactions with related parties entered by the Company inthe normal course of business are periodically placed before the Audit Committee for itsomnibus approval.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act. 2013 and rulesthereunder and the SEBI (LODR) Regulations 2015. This policy was considered and approvedby the Board and has been uploaded on the website of the Company.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
The Company has not given loans guarantee or provided securities. However particularsof investments made is provided in Notes to Financial Statements in Note no. 9.
The Companys shares are listed on BSE LIMITED.
The Company has paid up to date annual listing fee of the Stock Exchange
During the year under review the Company has not accepted any public deposits.
INTERNAL COMPLAINTS COMMITTEE
The Company has formed Internal Complaints Committee as per the provision of SexualHarassment Act (The Sexual
Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013wherein it mandates for every workplace and every employer in charge of a work place withmore than 10 workers to constitute an Internal Complaints Committee as prescribed underthe Act for receiving complaints of sexual harassment.
The Company has not received any complaints
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS :
Your Company has well established procedures for internal control across its variouslocations commensurate with its size and operations. The organization is adequatelystaffed with qualified and experienced personnel for implementing and monitoring theinternal control environment. The internal audit function is adequately resourcedcommensurate with the operations of the Company and reports to the Audit Committee of theBoard.
Adequate Insurance cover has been taken for properties of the Company includingBuildings Computers Office Equipments Vehicles etc.
Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo Information under Section 134(3)(m) of the Companies Act 2013.
The Company is not required to furnish information in Form A under the headConservation of Energy under Companies (Disclosure of Particulars in theReport of Board of Directors) Rules 1988.
The Company uses electric energy for its equipments such as air conditioners computerterminals lighting and utilities in the work premises. All possible measures have beentaken for economic consumption and to conserve the same. Technologically updated UPSSystems have also been installed for proper service support.
During the year under review the Company does not have any Foreign Exchange earningshowever the Company has foreign spending during the previous year and was fullyreimbursed. Hence is not impacting the Financials.
Managements Discussion And Analysis Report
Managements Discussion and Analysis Report for the year under review asstipulated under Regulation 34 of SEBI (LODR) Regulations 2015 is presented in a separatesection forming part of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors Responsibility Statement referred to in clause
(c) of sub-section (3) of Section 134 of the Companies Act 2013 shall statethat
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had 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 of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
214 Raghava Ratna Towers
Chirag Ali lane Abids
Place : Hyderabad
Date : 14.05.2016
The Company is committed to maintain the highest standards of Corporate Governance eventhough the same is not applicable to the Company.
The Report on Corporate Governance as stipulated under SEBI (LODR) Regulations 2015forms part of the Annual Report.
A Cash Flow Statement for the Financial Year 2015-16 of the Company is attached to theBalance Sheet.
The Companys shares are available for trading in depository systems of both theNational Securities Depository Limited (NSDL) and the Central Depository Services IndiaLimited (CDSL).
As on 13th May 2016 a total of 4862509 Equity shares of the Company which forms97.25% of the Share Capital of the Company stands dematerialized.
DEVELOPMENT AND IMPLEMENTAION OF RISK MANAGEMENT POLICY
The Company has been addressing various risks impacting the Company and the policy ofthe Company on risk management is provided in this report in Management discussions andAnalysis.
The Board of Directors wish to place on record its appreciation for the extendedco-operation and assistance rendered to the Company and acknowledge with gratitude thecontinued support and cooperation extended by the investors clients business associatesand bankers. The regulatory authorities have also put Indian Capital market on par withother international Markets. Your Directors also acknowledge the full fledged cooperationand dedicated efforts put in by the employees across all levels in the organization andplace on record its appreciation for the services rendered.
By Order of the Board of Directors of CIL SECURITIES LMITED
|K K Maheshwari ||A K Inani |
|Chairman & Managing Director ||Director Finance/CFO |
|DIN: 00223241 ||DIN: 00223069 |