Your Directors present the 31st Annual Report and the Audited Accounts forthe Financial Year ended 31st March 2020.
The Financial performance of the Company for the Financial Year ended 31stMarch 2020 is summarized below:
| || ||(Rs in Lacs) |
|Particulars ||Year Ended 31.03.2020 ||Year Ended 31.03.2019 |
|Total Revenue ||413.67 ||428.44 |
|Profit before Interest Depreciation & Tax ||16.28 ||38.66 |
|Profit before Depreciation and Tax ||16.28 ||38.66 |
|Depreciation ||10.75 ||12.14 |
|Profit Before Tax ||5.53 ||26.52 |
|Less: Provision for Tax (Net) ||4.03 ||4.83 |
|Profit After Tax ||1.50 ||21.69 |
|Add: Balance Brought Forward from the last year ||1280.05 ||1290.61 |
|Profit available for Appropriation ||1281.55 ||1312.3 |
The Company's Profit after Tax is Rs. 1.50 Lakhs (Previous Year Rs. 21.69 Lakhs). TheBoard recommends transfer of a sum of Rs. 0.15 Lakhs(Previous Year Rs. 2.16 Lakhs) toGeneral Reserve.
Your Directors do not recommend any dividend for the Financial Year ending 31-03-2020with 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.
MARKET REVIEW FOR FY 2019 20
FY 2019-20 has been action packed filled with news-based volatility.
During the year numerous changes were made in the Income Tax Act in the Union Budget most criticised ones were increase in Surcharge changes in capital gains tax for the FPIswhich lead to a selloff in the markets.
FY 2019-20 has been a year of abundant liquidity. US FED easing coupled with numerousrate cuts by RBI led to a liquidity driven rally in Global Markets including IndianMarkets . which reached its all-time highs in January. Nifty50 made an all-time high of12430.
The following months the spread on COVID-19 intensified and all most all countries wentinto a complete lockdown. This had a very severe impact on the global economy and Indianstock markets witnessed a 40% selloff from its January highs and closed the FY downalmost 25% YoY.
MARKET OUTLOOK FOR FY 2020-21
With a view to balance economic disruption and to boost the liquidity and Governmentannounced a 20 Lakh crore package covering many aspects. All the measures taken areexpected to provide a temporary relief. The economic disruption is expected to have animpact on almost all the sectors and businesses will have a negative impact on thefinancial position of companies and can lead to job losses in the time to come. GDPgrowth numbers for the FY 2020-21 is expected to be below expectations. The coming monthstoo are expected to be volatile.
Precious Metals like Gold and Silver prices have shot up to multi year highs asinvestors are looking for safe bets.
The following factors will play a crucial role in revival of the economy in the FY20-21:
1. Vaccine for COVID-19
2. Reopening of the economy/businesses which is expected to take more time to get backto its normal functioning.
3. Rural based demand now will play an important role as the urban demand is expectedto tepid for this FY. Hence Two-Wheeler Tractor Agriculture/Farm based fertilisermining company shares should be in focus of long-term investors.
4. Long Term based Structural Changes in Policy both Monetary and Economic will berequired for the economy to come out of the covid-19 shock.
One thing we can learn from history is the mankind has always emerged stronger from allvirus outbreaks that have happened in the past. Its just a matter of time before weovercome COVID-19 too.
During the Financial Year 2019-20 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 2019-20 has been enclosed with this report.
The same is also placed on the website of the Company www.cilsecurities.com
NUMBER OF BOARD MEETINGS
Four Board Meetings were held during the Financial Year 2019-20 which are as follows:
25.05.2019 10.08.2019 08.11.2019 and 08.02.2020
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Shri A KInani and Smt Pramila Maheshwari retires by rotation at the ensuing Annual GeneralMeeting and being eligible offer themselves for reappointment.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
(Including criteria for determining qualification positive attributesindependence of a director policy relating to remuneration for Directors Key ManagerialPersonnel and other 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)Regulations 2015 and good corporate practices. Emphasis is given to persons from diversefields or professions.
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 2019-20 as follows:
|S.No Name ||Remuneration Paid in the FY 2019-20 in Rs. ||Ratio / Times per Median of employee remuneration |
|1 Shri Krishna Kumar Maheshwari ||1374462/- ||3.84 |
|2 Shri Piyush Modi ||600000/- ||1.68 |
|3 Shri Ashok Kumar Inani ||1405837/- ||3.93 |
The aforesaid details are calculated on the basis of remuneration for the financialyear 2019-20.
Median remuneration of the Company for all its employees is Rs 357289/- for theFinancial Year 2019-20.
B. Details of percentage increase in the remuneration of each Director and CFO andCompany Secretary in the Financial Year 2019-20 are as follows:
|Name ||Designation ||Remuneration in Rs. ||Increase % |
| || ||2019-20 ||2018-19 || |
|Shri Krishna Kumar Maheshwari ||Managing Director ||1374462/- ||1441496/- ||(4.65) |
|Shri Piyush Modi ||Whole Time Director ||600000/- ||600000/- ||0.00 |
|Shri Ashok Kumar Inani ||Director Finance/ CFO ||1405837/- ||1337342/- ||5.12 |
|Shri Govind Toshniwal ||Company Secretary ||726743/- ||667011/- ||8.95 |
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 2019-20:
| || || ||(Amount In Rs.) |
|Particulars ||2019-20 ||2018-19 ||Increase/ (decrease)% |
|Median remuneration of all employees per annum ||357289/- ||Rs.313398/- ||14.00 |
D. Number of permanent employees on the rolls of the Company as on 31stMarch 2020 are 25 and as on 31st March 2019 are 29.
E. 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 ||2019-20 ||2018-19 ||Increase /(Decrease)% |
|Average Salary of all the Employees (Other than KMP) ||305695/- ||356282/- ||(14.19) |
|Salary of Key || || || |
|Managerial Personnel || || || |
|Managing Director ||1374462/- ||1441496/- ||(4.65) |
|Whole Time Director ||600000/- ||600000/- ||0.00 |
|Director Finance / CFO ||1405837/- ||1337342/- ||5.12 |
|Company Secretary ||726743/- ||667011/- ||8.95 |
The increase in remunerations of employees other than the managerial personnel is inline with increase in remuneration of managerial personnel
F. 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. Sridhar Jhawar & Associates Statutory Auditors of the Company hold officeuntil the conclusion of 33rd Annual General Meeting.
The Members in their Annual General Meeting held on 28.09.2017 have appointed M/sSridhar Jhawar and Associates Chartered Accountants as Statutory Auditors of the Companyto hold office for a period of 5 years until the conclusion of the Annual General Meetingto be held in the calendar year 2022. Ratification of their appointment by the members inevery Annual General Meeting (AGM) is done away by Companies Amendment Act 2017. Henceno resolution to this effect is proposed in the Notice calling AGM.
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. TheBoard of Directors of the Company has on the recommendation of the Audit Committeeadopted a policy to regulate transactions between the Company and its Related Parties incompliance with the applicable provisions of the Companies Act. 2013 and rules thereunderand the SEBI (LODR) Regulations 2015. This policy was considered and approved by theBoard 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 aparticular of investments made is provided in Notes to Financial Statements in Note no. 2and 4.
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 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 in Form A under the headConservation of Energy' under Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules 1988.
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 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 Section 134 of the CompaniesAct 2013 shall state that-
(a) In the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period;
(c) The directors had 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;
(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 bythe company and that such internal financial controls are adequate and were operatingeffectively.
(f) The directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The Company is committed to maintain the highest standards of Corporate Governance eventhough the same is not applicable to the Company.
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 12th June 2020 a total of 4917764 Equity shares of the Companywhich forms 98.35% 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.
INVESTOR EDUCTION AND PROTECTION FUND (IEPF):
In terms of the provisions of the Companies Act the Company is obliged to transferdividends which remain unpaid or unclaimed for a period of seven years from the date ofdeclaration to the credit of the Investor education and Protection Fund established by theCentral Government.
Accordingly the Members are hereby informed that the 7 years period for payment of thedividend pertaining to Financial Year 2012-2013 will expire on 05.11.2020 and thereafterthe amount standing to the credit in the said account will be transferred to the"Investor Education and Protection 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 ||Due date for transfer to Investor Education and Protection Fund (IEPF) |
|1 ||2012-13 ||30.09.2013 ||05.11.2020 ||04.12.2020 |
|2 ||2013-14 ||28.07.2014 ||02.09.2021 ||02.10.2021 |
|3 ||2014-15 ||15.09.2015 ||21.10.2022 ||20.11.2020 |
|4 ||2015-16 ||30.09.2016 ||05.11.2023 ||04.11.2023 |
|5 ||2016-17 ||28.09.2017 ||03.11.2024 ||02.12.2024 |
|6 ||2017-18 ||29.09.2018 ||04.11.2025 ||03.12.2025 |
|7 ||2018-19 ||30.09.2019 ||05.11.2026 ||04.12.2026 |
COMPOSITION OF CSR COMMITTEE AND CONTENTS OF CSR POLICY
Since the Company does not have the net worth of Rs. 500 Crore or more or turnover ofRs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the Financial Yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There have been no frauds reported by the auditors u/s 143(12).
DETAILS RELATING TO DEPOSITS COVERING THE FOLLOWING
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 under review. Further there are no deposits which are notin compliance with the requirements of Chapter V of the Companies Act 2013.
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 with 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 (www.cilsecurities.com)
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.