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Cil Securities Ltd.

BSE: 530829 Sector: Financials
NSE: N.A. ISIN Code: INE830A01012
BSE 12:28 | 12 Aug 24.20 0.50
(2.11%)
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NSE 05:30 | 01 Jan Cil Securities Ltd
OPEN 25.00
PREVIOUS CLOSE 23.70
VOLUME 235
52-Week high 36.50
52-Week low 15.60
P/E 5.26
Mkt Cap.(Rs cr) 12
Buy Price 24.20
Buy Qty 2.00
Sell Price 24.55
Sell Qty 23.00
OPEN 25.00
CLOSE 23.70
VOLUME 235
52-Week high 36.50
52-Week low 15.60
P/E 5.26
Mkt Cap.(Rs cr) 12
Buy Price 24.20
Buy Qty 2.00
Sell Price 24.55
Sell Qty 23.00

Cil Securities Ltd. (CILSECURITIES) - Director Report

Company director report

Dear Members

The Directors hereby present the 33rd Annual Report along with the audited financialstatement for the financial year ended March 31 2022.

FINANCIAL HIGHLIGHTS

The summary of the Company's financial results for the financial year ended March 312022 is furnished below:

(Rs. in Lakhs)

Particulars Year Ended 31.03.2022 Year Ended 31.03.2021
Total Revenue 830.11 569.23
Profit before Interest Depreciation & Tax 298.23 109.85
Profit before Depreciation and Tax 298.23 109.85
Depreciation 7.94 8.97
Profit Before Tax 290.29 100.88
Less: Provision for Tax (Net) 63.74 25.41
Profit After Tax 226.54 75.47
Add: Balance brought forward from the last year 1318.94 1251.26
Profit available for Appropriation 1545.48 1326.73

The Company's Profit after Tax is Rs.226.54 Lakhs (Previous Year Rs. 75.47 Lakhs). TheBoard recommends transfer of a sum of Rs.22.60 Lakhs (Previous Year Rs. 7.80 Lakhs) toGeneral Reserve.

DIVIDEND

Your Directors do not recommend any dividend for the financial year ended March 312022 with a view to conserve the resources of the Company.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements related and the date of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Various business aspects including market conditions business opportunitieschallenges etc. have been discussed at length in the Management Discussion and AnalysisReport (MD&A) which forms part of this Annual Report.

MARKET REVIEW FOR FY 2021 - 22

Calendar Year 2021 was a year of demand recovery supply constraints and risinginflation. Post Covid demand spike coupled with supply debottlenecking led to higher-than-expected revenue numbers for most of the companies. This sudden demand spike led toincrease in almost all commodities prices. After better-than-expected Q1FY22 results thestock market took a real take-off and intensified after the Q2 results and during themonth of October 2021 the Nifty and Sensex made an all-time high of 18604.45 and 62245.43respectively from where the markets corrected more than 10% due to selling by ForeignPortfolio Investors. Nifty50 Index closed the calendar year of 2021 with a gain of 3373points up 24.12% at 17354.

During the year Consumer price inflation (CPI) breached the upper band of the ReserveBank of India's (RBI's) comfort zone (of 4%+2%) and grew by 6% in January 2022 as against5.7% in the previous month. Wholesale price inflation also jumped to a decadal high of12.96% (figure 2). Prices rose primarily because of logistics and supply chain disruptionas the number of infections increased and regional lockdowns were imposed. Prices of foodcommodities—led by vegetables edible oils and poultry products—witnessed sharpincreases.

Union Budget 2022:

There were a host of measures for a number of sectors aimed at boosting growth amidhigh & rising inflation and continuing Covid uncertainties. Capex target expanded by35.4% from Rs. 5.54 lakh crore to Rs 7.50 lakh crore. FY23 effective capex seen at Rs 10.7lakh crore.

There however were remarkably few changes to the personal income tax structure in ayear that had seen demands from various quarters for some sort of relief or another intimes of a pandemic.

Government's flagship Productivity-linked incentive (PLI) schemes in 14 sectors havereceived excellent response.

Market Outlook for FY 2022-23

Right when the global economy seemed to be on the road to recovery after leaving theworst of the COVID-19 pandemic behind the Russia-Ukraine crisis escalated. Consequentlyprices of crude oil and gas food grains such as wheat and corn and several othercommodities have shot up. The conflict has also brought in severe financial sanctions andpolitical pressure on Russia from the rest of the world primarily the Western powers. Itis obvious that these will likely have unpredictable and undesired implications on theglobal financial system and economy. Global investors for instance are parking theirmoney into safer-haven assets such as gold and US Treasuries while emerging marketswitnessed capital outflows.

It is therefore no surprise that the war in Ukraine and its potential economic impacthave forced several economic forecasters to go back to their drawing boards and revisetheir growth projections for this year—most now point to less-than-expected growth in2022.

Understandably the crisis has impacted India's growth outlook as well. Crude oilprices are lingering above US$100 per barrel wheat has gone up by 50% in European marketand edible oil prices are up 20% all of which are critical imports from the two warringnations.

RBI in its Monetary Policy Committee (MPC) meet for the month of April'22 kept bothrepo rates and reverse repo rates unchanged at 4% and 3.35% respectively. The RBI MPC alsokept bank rates unchanged at 4.25%.

But RBI has cut growth projections for India for FY23 to 7.2% lower than earlierprojection of 7.8%.

The inflation projections too have been revised upwards to 5.7% 120 basis pointshigher than previous projections. For FY23 inflation is now projected in Q1 at 6.3 percent; Q2 at 5.8 per cent; Q3 at 5.4 per cent; and Q4 at 5.1 per cent.

RBI's MPC also decided to stick with an accommodative stance but also reiterated thatthey would shift focus now to control inflation.

It's not just India but almost all emerging economies are reeling under these externalshocks. Countries like Sri Lanka defaulted on all its $51 Billion external debt and thereare many other countries where protests are currently going on against the risinginflation.

We however believe that India's underlying economic fundamentals are strong anddespite the short-term turbulence the impact on the long-term outlook will be marginal.

What lies ahead?

These factors would decide where the global economy is headed in the months to come.

1. Interest Rate Decision by US Federal Reserve:

US Fed has already hiked the interest rates during the FOMC meet for the month ofmarch rates have been hiked by 25 basis points. It is expected that they would be raisingthe rates by 50 bps during the next meet scheduled in May. A hawkish stance by US FED isgenerally considered bad for the stock markets as liquidity gets dried up.

2. Russia-Ukraine issue: A solution to this problem at the earliest wouldprovide some relief to the global economy as critical supply lines have been choked as aresult of this war. Markets would also be wary of other countries getting involved in thiswar.

3. Inflation: All the commodities Metals Agro commodities etc are at multimonths highs. A high inflation environment does not augur well for the markets as lessdisposable income in the hands of consumer would mean less discretionary expenditure andconsequently less savings and investments and hence low growth.

4. Oil and Gas price: Brent Crude price currently at $105/ barrel and NaturalGas at $6.716/mmbtu are at multiyear high. High Oil and Gas prices would translate to highinput costs for the companies and consequently have an impact on the margins. PetrolDiesel and CNG prices are at an all-time high and this would translate to excess burdenfor the common man.

5. Credit Growth: Among all the short-term challenges there are some greenshoots that are visible in Indian Economy. The pace of bank credit growth hit 9.6% inFY22 up from 5.61% in FY21 even as deposits growth slowed to 8.9% last fiscal from 11.4%in the year-ago period. A Rs.1.8 Lakh-crore surge in lending in mid March helped banks addRs. 10.4 Lakh crore to their loan books in FY22. This is almost double the Rs.5.8Lakh-crore growth registered in FY21. Going ahead the corporate credit growth revival hasto be monitored closely.

To sum it up we expect this year to be volatile one. In our view high inflation ishere to stay. The central banks are expected to respond to this high inflation scenario byincreasing the rates as soon as next meet onwards. A total four repo rates hike of 25basis points each is expected in the current financial year.

We are bullish on the commodity space. Metals and Mining Banking Oil & Gassectors are expected to outperform the markets while IT and FMCG are expected to underperform.

On the Indices front we expect Indexes to stay range bound.

SHARE CAPITAL

During the Financial Year 2021-22 the Share Capital of the Company has remainedunchanged.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 theAnnual Return as on March 31

2022 is available on the Company's website on www.cilsecurities.com.

NUMBER OF BOARD MEETINGS

Four Board Meetings were held during the Financial Year 2021-22 which are as follows:

June 18 2021 July 17 2021 October 28 2021 and January 28 2022.

The Company has held at least one Board Meeting in every quarter and the maximum timegap between any two meetings was not more than 120 days

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.AshokKumar Inani and Mrs. Pramila Maheshwari retires by rotation at the ensuing Annual GeneralMeeting and being eligible offer themselves for reappointment.

Mr. Piyush Modi was relieved from the position of Executive Director of the Companywith effect from November 1 2021. However he is continuing to act as a Non-ExecutiveDirector of the Company.

The Board in its meeting held on April 28 2022 has approved the re-appointment of Mr.Ashok Kumar Inani as Director- Finance/CFO for a period of Two years effective fromNovember 3 2022. The said appointment is subject to the approval of members in theensuing Annual General Meeting through item no.5.

There was no change in the Key Managerial Personnel during the financial year 2021-22except Mr. Piyush Modi who was relieved from the position of Executive Director of theCompany with effect from November 1 2021.

During the year under review there is no change in the composition of the Board.

NOMINATION REMUNERATION AND EVALUATION POLICY

The Nomination Remuneration and Evaluation Policy of the Company adopted by the Boardin accordance with the provisions of Section 178(3) of the Act based on therecommendations made by the Nomination and Remuneration Committee lays down criteria for:

i. determining qualifications positive attributes required for appointment ofDirectors Key Managerial Personnel and Senior Management and also the criteria fordetermining the independence of a Director;

ii. appointment tenure removal/retirement of Directors Key Managerial Personnel andSenior Management;

iii. determining remuneration (fixed and performance linked) payable to the DirectorsKey Managerial Personnel and Senior Management; and

iv. evaluation of the performance of the Board and its constituents.

The Company has uploaded the Nomination Remuneration and Evaluation Policy on itswebsite on www.cilsecurities.com.

Performance Evaluation of Board Committees and Directors

The annual performance evaluation of the Independent Directors Non-IndependentDirectors Chairman and the Board as a whole (including its Committees) was carried out onJanuary 28 2022 in the manner given below:

i. Performance evaluation of the Independent Directors was done by the entire Board(excluding the Director being evaluated);

ii. Independent Directors in their separate meeting reviewed the performance of theNon-Independent Directors and the Board as a whole (including its Committees); and

iii. Independent Directors in their separate meeting also reviewed the performance ofthe Chairman after taking into account the views of all the Directors.

The Nomination and Remuneration Committee reviewed the results of the annualperformance evaluation carried out in the financial year 2021-22 and expressed overallsatisfaction on the performance of the Independent Directors Non Independent DirectorsChairman and the Board as a whole (including its Committees). Accordingly no correctiveaction was proposed to be taken pursuant to such evaluation results.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Particulars of employees and related disclosures as required under the provisions ofSection 197(12) of the Companies Act 2013 read with Rules 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are set out in Annexures I to thisReport.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Mr. Budhi Prakash Toshniwal and Mr. F.R. Bhote Independent Directors of the Companyhave furnished respective declaration stating that they meet the criteria of independenceas laid down in Section 149(6) of the Companies Act 2013 read with Regulation 16(1 )(b)of SEBI (LODR) Regulations.

AUDITORS

i. Statutory Auditor's Report

During the year under review the Auditors have not made any qualification reservationor adverse remark

or disclaimer in their Report on the financial statements of the Company and there wasno instance of fraud reported by the auditors under Section 143(12) of the Companies Act2013.

ii. Statutory Auditors

At the 28th Annual General Meeting (‘AGM') held on September 28 2017M/s. SridharJhawar and Associates Chartered Accountants (FRN: 016921S) was appointed as the Auditorsof the Company for a period of five years from the conclusion of the said AGM. M/s.Sridhar Jhawar and Associates will complete his present term on conclusion of this 33rdAGM.

The Board of Directors of the Company on the recommendation of the Audit Committeerecommended for the approval of the Members at the ensuing Annual General Meeting theappointment of M/s. Ramkishore Jhawar and Associates Chartered Accountants (FRN:003016S)as the Auditors of the Company for a period of five years from the conclusion of the 33rdAGM till the conclusion of the 38th AGM at such remuneration as may be decided by theBoard of Directors.

M/s. Ramkishore Jhawar and Associates has given its consent to act as the Auditors ofthe Company and have confirmed that the said appointment if made will be in accordancewith the conditions prescribed under Sections 139 and 141 of the Companies Act 2013.

iii. Internal Auditors

Based on the recommendation of Audit Committee the Board of Directors at their meetingheld on April 28 2022 reappointed M/s. Niranjan & Narayan Chartered Accountants(FRN: 005899S)as the Internal Auditors of the Company for the financial year 2022-23.

iv. Secretarial Auditors and Secretarial Audit Report

Pursuant 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 theBoard of Directors at their meeting held on April 28 2022 reappointed Mr.Dwaraka PrasadAsawa Practicing Company Secretary as Secretarial Auditors for the financial year2022-23.

The Secretarial Audit Report for the financial year ended March 31 2022 in theprescribed form MR-3 is set out in Annexure II to this Report.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED

The Company has not given any loan or given any guarantee or provided securities duringthe financial year 2021-22. The particulars of Investments made during the financial yearended 2021-22 is provided in Notes to Financial Statements in Note no. 2 and 4.

DETAILS RELATING TO DEPOSITS

Your Company has not accepted any deposits falling within the meaning of Sec.73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the Financial Year 2021-22. Further there are no deposits which are not incompliance with the requirements of Chapter V of the Companies Act 2013.

RELATED PARTY TRANSACTIONS

Related Party transactions that were entered during the financial year were on 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 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 at www.cilsecurities.com.

WHISTLE BLOWER / VIGIL MECHANISM POLICY

Pursuant to the provisions of section 177 of the Companies Act 2013 and SEBI(LODR)Regulations 2015 Vigil Mechanism for Directors and Employees to report genuine concernshas been established. The Policy has been uploaded on the website of the Company atwww.cilsecurities.com.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The Company is committed to provide a healthy environment to all its employees and haszero tolerance for sexual harassment at workplace. In order to prohibit prevent andredress complaints of sexual harassment at workplace it has complied with the provisionsrelating to the constitution of the Internal Complaints Committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

The Company has not received any complaint of sexual harassment during the financialyear 2021-22.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has well established procedures for Internal Financial Control across itsvarious locations commensurate with its size and operations. The organization isadequately staffed with qualified and experienced personnel for implementing andmonitoring the internal control environment. The Internal Audit function is adequatelyresourced commensurate with the operations of the Company and reports to the AuditCommittee of the Board.

INSURANCE

Adequate Insurance cover has been taken for properties of the Company includingBuildings Computers Office Equipment's 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 under the head ‘Conservation ofEnergy' as required under The Companies (Accounts) Rules 2014.

The Company uses electric energy for its equipment's 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 financial year 2021-22 the Company does not have any Foreign Exchangeearnings /outgo.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitof the company for that period;

c. they have 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. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and

f. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34(3) of the Listing Regulations Corporate Governance Reportcontaining the details as required under Schedule (V)(C) of the said Regulations isannexed hereto and forms an integral part of this Report.

DEPOSITORY SYSTEM

The Company's shares are available for trading in both the depository systems viz.National Securities Depository Limited (NSDL) and the Central Depository Services IndiaLimited (CDSL).

As on April15 2022 a total of 4929264 Equity shares of the Company which forms98.59%of the Share Capital of the Company stands dematerialized.

DEVELOPMENT AND IMPLEMENTATION 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 section.

TRANSFER OF DIVIDEND/SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the provisions of Section 124(5) of the Companies Act 2013dividend lying unclaimed in the unpaid dividend account for a period of 7 (Seven) years isrequired to be transferred by the Company to the Investor Education & Protection Fund("IEPF").Accordingly an amount of ' Rs.59415/- (Rupees Fifty Nine ThousandFour Hundred and Fifteen Only) being dividend for the financial year 2013-14 lyingunclaimed for a period of 7 years was transferred by the Company during the financial year2021-22 to the IEPF.

Pursuant to Section 124(6) of the Act read with Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 ("the IEPFRules") the Company is also required to transfer all shares in respect of whichdividend has not been claimed for 7 (Seven) consecutive years or more to the IEPFAuthority. Accordingly 4850 (Four Thousand Eight Hundred Fifty) shares relating tofinancial year 2013-14 have been transferred by the Company during the financial year2021-22 to the IEPF Authority.

Accordingly the Members are hereby informed that the 7 Years period for payment of thedividend pertaining to Financial

Year 2014-2015 will expire on October 16 2022 and thereafter the amount standing tothe credit in the said account will be transferred to the "Investor Education andProtection Fund" of the Central Government.

The Due date for the transfer of Dividends to Investor Education and Protection Fund(IEPF) pertaining to previous Financial Years is given below:

S.No Financial Year Date of Declaration of Dividend Last Date of Claiming Dividend
1 2014-15 15.09.2015 16.10.2022
2 2015-16 30.09.2016 05.11.2023
3 2016-17 28.09.2017 03.11.2024
4 2017-18 29.09.2018 04.11.2025
5 2018-19 30.09.2019 05.11.2026
6 2019-20 No Dividend
7 2020-21 No Dividend

COMPOSITION OF CSR COMMITTEE AND CONTENTS OF CSR POLICY

The Company does not have the net worth of Rs.500 Crore or more or turnover of 1000Crore or more or a net profit of Rs.5 Crore or more during the financial year2021-22.Hence Section 135 of the Companies Act 2013 relating to Corporate SocialResponsibility is not applicable and the Company need not adopt any Corporate SocialResponsibility Policy.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During the period under review there were no significant and material orders passed bythe regulators or Courts or Tribunals impacting the going concern status and the company'soperations in future.

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and theapplicable Securities laws. The Insider Trading Policy of the Company lays down guidelinesand procedures to be followed and disclosures to be made while dealing in shares of theCompany as well as the consequences of violation.

The policy has been formulated to regulate monitor and ensure reporting of deals byemployees and to maintain the highest ethical standards of dealing in Company securities.The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our website i.e. www.cilsecurities.com.

SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Instituteof Company Secretaries of India.

LISTING ARRANGEMENTS

The Company's shares are listed on BSE LIMITED. The Company has paid the annual listingfees for the financial year 2022-23 to the above mentioned Stock Exchange in theprescribed timelines.

ACKNOWLEDGEMENT

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 LIMITED
K K M aheshwari A K Inani
Chairman & Managing Director Director Finance/CFO
DIN: 00223241 DIN:00223069
Place : Hyderabad
Date : April 28 2022

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