Your Directors present the 28th Annual Report and the Audited Accounts for theFinancial Year ended 31st March 2017.
The Financial performance of the Company for the Financial Year ended 31st March 2017is summarized below:
| || ||(Rs. in Lakhs) |
|Particulars ||Year Ended 31.03.2017 ||Year Ended 31.03.2016 |
|Total Revenue ||934.69 ||461.48 |
|Profit before Interest Depreciation & Tax ||506.93 ||109.33 |
|Profit before Depreciation and Tax ||506.56 ||109.31 |
|Depreciation ||15.51 ||13.98 |
|Profit Before Tax ||491.05 ||95.33 |
|Extraordinary Income ||(433.87) ||70.09 |
|Less: Provision for Tax (Net) ||10.24 ||33.86 |
|Profit After Tax ||46.94 ||131.56 |
|Add: Balance Brought Forward from || || |
|the last year ||1171.96 ||1083.64 |
|Profit available for Appropriation ||1218.90 ||1215.20 |
|Appropriations: || || |
|Proposed Equity Dividend ||25.00 ||25.00 |
|Tax on Dividend ||5.09 ||5.08 |
|Transfer to General Reserve ||4.85 ||13.16 |
|Balance carried forward to || || |
|Balance sheet ||1183.96 ||1171.96 |
|Total Appropriations ||1218.90 ||1215.20 |
The Company's Profit after Tax is Rs. 46.94Lacs (Previous Year Rs. 131.56 Lacs). TheBoard recommends transfer of a sum of Rs. 4.85Lacs (Previous Year Rs. 13.16 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 31-03-2017. The total dividend together withtax and surcharge there on amount to Rs30.09 Lacs (Previous year Rs. 30.08 Lacs).
Indian stocks have risen to new highs this fiscal year despite a series of developmentsperceived to be negative to the markets. From the UK's referendum to leave the EuropeanUnion Donald Trump's victory in the US presidential election the US Federal Reserve'sdecision to hike interest rates and Prime Minister's demonetisation move the year wasaction-packed to say the least.
Despite global events impacting risk sentiments during the year the positives of thedomestic economy supported the market; which included a normal monsoon moderatinginflation and implementation of the seventh Pay Commission award all of which areexpected to boost consumption.
The watershed moment of the year came when the Prime Minister announced on November8th 2016 that on the stroke of midnight all 500 and 1000 rupee notes - 86% of thecurrency in circulation - would cease to become legal tender. On the back of this news theNIFTY crashed almost 7% as market participants tried to decipher the possible effect sucha move would have on a cash transaction reliant market such as India.
But the onset of calendar year 2017 have saw the Indian markets embark on a rallysupported by India's economic growth potential BJP's historic win in the Uttar Pradeshelections and a surge of liquidity funded by increase in SIPs which took the NIFTY to newhighs in the last days of the fiscal year as it broke the 9000 barrier gaining close to16% from the post demonetization lows.
The domestic equity indices ended FY 2017 with good gains amid volatility in thefrontline indices NIFTY gaining 19 per cent. The midcap index had a good year with 37 percent gain. Cyclical sectors outperformed defensives during the year. Metals (62 per cent)Oil & Gas (38 per cent) Auto (22 per cent) and Bank (33 per cent) stocks weresupported by a rally in global commodity prices and easing of the domestic money policy.Pharma (-5 per cent) and IT (3 per cent) were the under performers as they remained underpressure given the global scenario.
The momentum in the Indian markets will be carried into the next financial year as theyare expected to perform better than they did in FY17. Even after demonetization theIndian economy is expected to grow above 7.5% in the coming year as it will get a boostfrom the expectation of normal monsoon which would revive rural demand with increase inspending ability which in turn will push earnings growth of FMCG consumer durables agriinputs fertiliser and cement companies amongst others and give more room to the RBI tocut interest rates going forward.The implementation of GST and its impact on earnings dueto stock adjustment and implementation hurdles for next one or two quarters have to beseen. In the long run GST overall is likely to increase GDP by 2% per annum.
The equity market is getting support from domestic fund flows through mutual fundswhich are flush with funds due to sharp rise in the number of SIPs and rising flows fromNational Pension Scheme and the Employee Provident Fund Organisation (EPFO).Domestic moneyflow outstripped foreign fund flows in a cumulative two-year cycle in FY16-17 for thefirst time in seven years while a broad-based comparison of stock ownership suggestsfavourable tailwind for Indian funds and investors. The alternatives to equity investmentlike Gold have become too volatile and do not assure that value will grow consistently andwith government cracking down on benami properties and real estate transaction investorsare getting weary of property market. FDs and Bonds yields are just about sufficient tocover the risk of inflation. Under such circumstances only equity linked products remainas veritable investment options for wealth creation. This could be a key driver for Indianequities.
During the Financial Year 2016-17 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 2016-17 has been enclosed with this report.
NUMBER OF BOARD MEETINGS
The Details of the number of meetings of the Board held during the Financial Year2016-17 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 Section 152 of the Companies Act 2013 Shri K KMaheshwari and Shri Piyush Modi retires by rotation at the ensuing Annual General Meetingand being eligible offer themselves for reappointment.
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 2016-17 as follows:
|S.No Name ||Remuneration Paid in the FY 2016-17 in Rs. ||Ratio / Times per Median of employee remuneration |
|1 Shri Krishna Kumar Maheshwari ||1431579/- ||4.70 |
|2 Shri Piyush Modi ||600000/- ||1.97 |
|3 Shri Ashok Kumar Inani ||1170975/- ||3.84 |
The aforesaid details are calculated on the basis of remuneration for the financialyear 2016-17.
Median remuneration of the Company for all its employees is Rs304501/- for theFinancial Year 2016-17.
B. Details of percentage increase in the remuneration of each Director and CFO andCompany Secretary in the Financial Year 2016-17 are as follows:
|Name ||Designation ||Remuneration in Rs. ||Increase % |
| || ||2016-17 ||2015-16 || |
|Shri Krishna Kumar Maheshwari ||Managing Director ||1431579/- ||1504191/- ||-- |
|Shri Piyush Modi ||Whole Time Director ||600000/- ||600000/- ||NA |
|Shri Ashok Kumar Inani ||Director Finance/ CFO ||1170975 ||1028196 ||13.88 |
|Shri Govind Toshniwal ||Company Secretary ||545856 ||435098 ||25.46 |
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 2016-17:
|Particulars ||2016-17 ||2015-16 ||Increase / (decrease)% |
|Median remuneration of all employees per annum ||Rs.304501/- ||Rs. 219444/- ||38.76 |
D. Number of permanent employees on the rolls of the Company as on 31st March 2017 are34 and as on 31st March 2016 are 27.
E. Explanation on the relationship between average increase in remuneration and Companyperformance:
The Increase in average remuneration of all employees in the financial year 2016-17 ascompared to the financial year 2015-16 was 10%.
The Key indices of Company's performance is as follows:
| || || ||Amount in Lacs |
|Particulars ||2016-17 ||2015-16 ||Growth % |
|Gross Revenue from operations ||931.49 ||460.50 ||102.28 |
|Profit Before Tax and exceptional items ||491.05 ||95.33 ||415.10 |
|Profit After Tax ||46.94 ||131.56 ||(64.32) |
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 5.08% in FY 2016-17compared to FY 2015-16. The Profit After Tax decreased by 64.32% in FY 2016-17 comparedto 2015-16.
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 2017 ||As on 31st March 2016 ||Increase / Decrease % |
|Price Earnings ratio ||6.70 ||4.81 ||39.29 |
|Market Capitalisation (in Crores) ||10.90 ||6.33 ||72.20 |
Comparison of share price at the time of first public offer and market price of theshare of 31st March 2017:
|Market Price as on 31st March 2017 ||21.80 |
|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 ||118% |
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:
| || || ||(Amount in Rs.) |
|Particulars ||2016-17 ||2015-16 ||Increase /(Decrease) % |
|Average Salary of all the || || || |
|Employees (Other than KMP) ||299668/- ||286908/- ||4.44 |
|Salary of Key Managerial Personnel Managing Director ||1431579/- ||1504191/- ||(4.82) |
|Whole Time Director ||600000/- ||600000/- ||-- |
|Director Finance / CFO ||1170975/- ||1028196/- ||13.88 |
|Company Secretary ||545856/- ||435098/- ||25.46 |
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 Auditor's Report read together with the relevant notesthereon are self explanatory and hence do not call for any comments.
M/s. Ramkishore Jhawar & Associates Statutory Auditors of the Company hold officeuntil the conclusion of 28th Annual General Meeting.
Under Section 139 of Companies Act 2013 and rules made thereunder it is mandatory torotate the Statutory Auditors on Completion of a maximum term permitted under the saidsection. The Audit Committee of the Company has proposed and the Directors of the Companyrecommend the Appointment of M/s Sridhar Jhawar and Associates Chartered Accountants asthe Statutory Auditors of the Company. M/s Sridhar Jhawar and Associates will hold officefor a term of five consecutive years from the conclusion of the 28th Annual GeneralMeeting till the conclusion of the 33rd Annual General Meeting to be held in the FY2021-22.
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 theSecretarial Audit Report submitted by Company Secretary in Practice is enclosed as a partof 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 an Arm'sLength Basis and were in the Ordinary Course of Business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementand their relative which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its omnibus 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 Company's 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 andRedressal) Act 2013 wherein it mandates for every workplace and every employer in chargeof a work place with more than 10 workers to constitute an Internal Complaints Committeeas prescribed under the 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 head'Conservation of Energy' under Companies (Disclosure of Particulars in the Report of Boardof 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 earnings/outgo.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (LODR) Regulations 2015 is presented in a separate sectionforming part of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state that-
(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.
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 2016-17 of the Company is attached to theBalance Sheet.
The Company's shares are available for trading in depository systems of both theNational Securities Depository Limited (NSDL) and the Central Depository Services IndiaLimited (CDSL).
As on 19th May 2017 a total of 4864909 Equity Shares of the Company which forms97.30% 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 || |
|Registered office || || |
|214 Raghava Ratna Towers ||K K Maheshwari ||A K Inani |
|Chirag Ali lane Abids ||Chairman & Managing Director ||Director Finance/CFO |
|Hyderabad-500 001 ||DIN: 00223241 ||DIN: 00223069 |
|Place : Hyderabad || || |
|Date : 27.05.2017 || || |