Cil Securities Director Discussions


Dear Members,

The Board of Directors is pleased to present the companys 34th Annual Report along with the Audited financial statements, for the financial year ended on 31st March, 2023.

FINANCIAL HIGHLIGHTS

The summary of the Companys financial results for the financial year ended on 31st March, 2023 is furnished below:

(Rs. in Lakhs)

Particulars Year Ended Year Ended
31.03.2023 31.03.2022
Revenue from operation 972.36 828.42
Other Income 4.14 1.69
Total Income 976.50 830.11
Total Expenses 657.11 539.83
Profit Before Tax 319.40 290.28
Less:
Current Tax 79.38 79.31
Previous Tax (19.34) (15.46)
Deferred Tax (0.22) (0.11)
Profit After Tax 259.58 226.54
EPS:Basic 5.19 4.53
Diluted 5.19 4.53

DIVIDEND

With a view to conserve the resources of the Company, your Directors do not recommend dividend for the financial year ended on 31st March, 2023.

AMOUNT TRANSFERRED TO RESERVES:

Your Directors proposed to transfer amount of Rs. 25.96 Lakhs to General Reserve for the Financial Year ended March 31, 2023. An amount of Rs. 233.62 Lakhs is retained in the retained earnings.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company and the date of this report.

STATE OF THE COMPANYS AFFAIRS

Financial Year 2022-23 turned out to be an extremely topsy-turvy one for almost all the different segments under the purview of ‘Financial Markets bracket. Be it the currency markets, various commodities market, crude oil, energy, bullion, base metals, agri segments & above all the equity markets. This phenomenon of widespread moves played out across the global demographics & irrespective of the size, internal dynamics or any other contours of each market segments. Despite the immense relief from the much dreaded covid pandemic of the preceding two years, financial year 2022-23 turned out to be a general disappointment for almost all the asset classes.

FY23 started well enough in April 2022 for the Markets, which did a smart recoup from the huge disruption caused by the Russia-Ukraine war in Feb-March 22 but soon the after effects of the war started showing up with several commodity prices shooting up & Inflation started spiking up vertically across the developed markets. By mid-May the real time Inflation had zoomed to unheard levels with the most followed Global Data point of CPI Inflation in US hitting 40-year High levels of almost double-digits. Not surprisingly the US Federal Reserve Board went into a panic mode & hiked the Interest rates at a frenzied pace & in less than 10 months spiked it by 500 bps.

However, our own markets started showing smart resilience & the recovery process kicked in from early July Second half of the year 2022 demonstrated a noticeable level of out-performance compared to the Developed Markets & demonstrated a strong "DeCoupling" theory & won many accolades. However, the extent of wealth destruction in equity portfolios, in the Jan-March period, went down as a phase of unmatched pain & will be remembered long for the hard lessons of unforeseen risks in the Equity Markets.

Fortunately, though, the onset of the new FY 2023-24 is already giving enough positive signals & suggesting that the extreme painful phase seen in the second fortnight of March was the resultant of the technical re-grouping of fund flows & not due to fundamental reasons, which means no more overhang of the issues of the past. As such, the broader output from local macro data points, have all been coming up on the positive side & the "On Ground" feeling is once again fairly optimistic & suggests better times ahead.

BUSINESS OUTLOOK FOR THE YEAR 2023-24

So with a start already in the positive territory, the outlook for the near future looks quite exciting. As such, with a staggering phase of Meltdown in the recent past, it appears that several over-hangs like Expensive Asset Valuations have clearly made way for attractive valuations re-appearing once again & presenting themselves as good opportunities. In fact, the PE Ratios of the Nifty basket itself, after spiking to levels of 22 times has now corrected to historical average levels once again while the scope of decent medium term growth rates for the right business entities is appearing as good as it comes.

The macro data points locally have all been generally in the expected range, quite consistently. The huge concerns of the global inflation worries, especially in times when the crude oil prices had surged to as high as $130 a barrel have been very well negotiated through some very prudent policies by the energy ministry. The decision to procure oil from Russia during the troubled times turned out to be a master stroke & helped our cause perfectly. Through the entire choppy times of FY 2022-23 our Balance of Payments position remained in the comfort zone as did our Forex Reserves & CPI Inflation, which remained range bound in the 6% - 7.5% band with the current number at the lower end of this range. The Finance Ministry mostly remained conscious of the Market Need & remained focused on growth objective while the RBI supported that cause too, by limiting the rate tightening cycle to moderate levels with REPO Rates pegged currently @ 6.5%.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Companys state of affairs and various business aspects including market conditions, business opportunities, challenges etc. contained in the Management Discussion and Analysis Report, which forms integral part of this Annual Report.

SHARE CAPITAL

The paid-up share capital of the company as on 31st March, 2023 is Rs 500 Lakhs. During the Financial Year 2022-23, the Share Capital of the Company has remained unchanged.

ANNUAL RETURN

Annual Return in Form MGT-7 is available on the Companys website, the web link for the same is www.cilsecurities.com.

NUMBER OF BOARD MEETINGS

During the financial year, five board meetings were convened and held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. Details of meetings held during the year are as follows:

Sl. No. Date of Meeting
1 April 28, 2022
2 August 10, 2022
3 October 21, 2022
4 January 21, 2023
5 March 21, 2023

CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL DURING THE YEAR 2022-23

A) RETIREMENT OF DIRECTORS BY ROTATION:

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Krishna Kumar Maheshwari and Mr. Piyush Modi, retires by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

B) CHANGE IN KEY MANAGERIAL PERSONNEL:

The Board at its meeting held on 21st October, 2022 pursuant to the provisions Regulation 17(1)(b) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 appointed Mr. Budhi Prakash Toshniwal (DIN: 00147869), Non-Executive Independent Director of the Company as Chairman of the Board of Directors and General Meeting with effect from 21st October, 2022.

Mrs. Trishila Agrahari, Company Secretary of the Company resigned with effect from 28th January, 2023.

The Board at its meeting held on March 21, 2023 appointed Ms. Purva Singh Thakur as the Company Secretary and Compliance Officer of the Company.

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

NOMINATION, REMUNERATION AND EVALUATION POLICY

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

i) determining qualifications, positive attributes required for appointment of Directors, Key Managerial Personnel and Senior Management and also the criteria for determining the independence of a Director;

ii) appointment, tenure, removal/retirement of Directors, Key Managerial Personnel and Senior Management;

iii) determining remuneration (fixed and performance linked) payable to the Directors, Key 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 its website on www.cilsecurities.com.

Performance Evaluation of Board, Committees and Directors

The annual performance evaluation of the Independent Directors, Non-Independent Directors, Chairman and the Board as a whole (including its Committees) was carried out on January 21, 2023, 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 the Non-Independent Directors and the Board as a whole (including its Committees); and

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

The Nomination and Remuneration Committee reviewed the results of the annual performance evaluation carried out in the financial year 2022-23 and expressed overall satisfaction on the performance of the Independent Directors, Non Independent Directors, Chairman and the Board as a whole (including its Committees). Accordingly, no corrective action 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 of Section 197(12) of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in Annexures I to this Report.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Mr. Budhi Prakash Toshniwal and Mr. Feroz Russi Bhote, Independent Directors of the Company have furnished respective declaration stating that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) of SEBI(LODR) Regulations.

AUDITORS

i) Statutory Auditors Report

During the year under review, the Auditors have not made any qualification, reservation or adverse remark or disclaimer in their Report on the financial statements of the Company and a declaration to this has been attached with this report. There was no instance of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

ii) Statutory Auditors

At the 33rd Annual General Meeting (‘AGM) held on 17th June, 2022, M/s. Ramkishore Jhawar and Associates, Chartered Accountants (FRN: 003016S), was appointed as the Auditors of the Company for a period of five years from the conclusion of the said AGM. M/s. Ramkishore Jhawar and Associates will complete his present term on conclusion of this 38th AGM. Ratification of their appointment by members in every Annual General Meeting (AGM) is done away by Companies Amendment Act, 2017. Hence, no resolution to this effect is proposed in the Notice calling AGM.

iii) Internal Auditors

Based on the recommendation of Audit Committee, the Board of Directors at their meeting held on April 25, 2023 reappointed M/ s. Niranjan & Narayan, Chartered Accountants (FRN: 005899S) as the Internal Auditors of the Company for the financial year 2023-24.

iv) Secretarial Auditors

Pursuant to the provisions of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors at their meeting held on 25th April, 2023 reappointed Mr. Dwaraka Prasad Asawa, Practicing Company Secretary as Secretarial Auditors for the financial year 2023-24.

A) Secretarial Audit Report

The Secretarial Audit Report in the prescribed form MR-3 for the financial year ended 31st March, 2023 is set out in Annexure II to this Report.

B) Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year ended 31st March, 2023 for all applicable compliances as per the Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report issued by Mr. Dwarka Prasad Asawa, Practicing Company Secretary has been submitted to the Stock Exchange within 60 days of the end of the Financial Year and same is set out in Annexure III 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 during the financial year 2022-23. The particulars of Investments made during the financial year ended 2022-23 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) Rules 2014, during the Financial Year 2022-23. Further, there are no deposits which are not in compliance 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 Arms Length Basis and were in the Ordinary Course of Business. There were no materially significant related party transactions with the Companys Promoters, Directors, Management and their relative, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its approval.

The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company and the web link is 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 concerns has been established. The Policy has been uploaded on the website of the Company at www.cilsecurities.com.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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

The Company has not received any complaint of sexual harassment during the financial year 2022-23.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has well established procedures for Internal Financial Control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The Internal Audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board.

INSURANCE

Adequate Insurance cover has been taken for properties of the Company including Buildings, Computers, Office Equipments, Vehicles, etc.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS 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 of Energy as required under The Companies (Accounts) Rules, 2014.

The Company uses electric energy for its equipments such as air conditioners, computer terminals, lighting and utilities in the work premises. All possible measures have been taken for economic consumption and to conserve the same. Technologically updated UPS Systems have also been installed for proper service support.

During the financial year 2022-23, expenditure of the Company in foreign currency was Rs. 1.11 Lakhs as Foreign Exchange earnings /outgo.

DIRECTORS RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts, the applicable accounting standards had been followed;

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) that the Directors have prepared the annual accounts on a going concern basis;

e) that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE REPORT

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

DEPOSITORY SYSTEM

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

As on March 31, 2023, a total of 49,38,564 Equity shares of the Company, which forms 98.77% 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 of the Company on risk management is provided in this report in Management discussions and Analysis 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, 2013, dividend lying unclaimed in the unpaid dividend account for a period of 7 (Seven) years is required to be transferred by the Company to the Investor Education & Protection Fund ("IEPF"). Accordingly, an amount of Rs. 50,047/- (Rupees Fifty Thousand and Forty-Seven Only) being dividend for the financial year 2014-15 lying unclaimed for a period of 7 years was transferred by the Company during the financial year 2022-23 to the IEPF.

Pursuant to Section 124(6) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), the Company is, also, required to transfer all shares in respect of which dividend has not been claimed for 7 (Seven) consecutive years or more to the

IEPF Authority. Accordingly, 5,752 (Five Thousand Five Hundred and Fifty-Two) shares relating to financial year 2014-15 have been transferred by the Company during the financial year 2022-23 to the IEPF Authority.

Accordingly, the Members are hereby informed that the 7 Years period for payment of the dividend pertaining to Financial Year 2015-2016 will expire on 30th October, 2023 and thereafter the 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 dates for the transfer of Dividends to Investor Education and Protection Fund (IEPF) pertaining to previous financial years are given below in Table 1:

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 1,000 Crore or more, or a net profit of Rs.5 Crore or more during the financial year 2022-23. Hence, Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and the Company need not adopt any Corporate Social Responsibility Policy.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During the period under review, there were no significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future.

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading

Table 1

Sr.No. Financial Year Date of Declaration Last Date of Claiming
of Dividend Dividend
1 2015-16 30.09.2016 05.11.2023
2 2016-17 28.09.2017 03.11.2024
3 2017-18 29.09.2018 04.11.2025
4 2018-19 30.09.2019 05.01.2026
5 2019-20

No Dividend

6 2020-21

No Dividend

7 2021-22

No Dividend

Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 and the applicable Securities laws. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing in shares of the Company, as well as the consequences of violation.

The policy has been formulated to regulate, monitor and ensure reporting of deals by employees 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 for fair disclosure of unpublished price sensitive information and code of conduct for the prevention 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 Institute of Company Secretaries of India.

LISTING ARRANGEMENTS

The Companys shares are listed on BSE LIMITED. The Company has paid the annual listing fees for the financial year 2023-24 to the abovementioned Stock Exchange in the prescribed timelines.

THE DETAILS OF APPLICATIONS MADE OR ANY PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

No application has been made or proceeding pending under the Insolvency and Bankruptcy Code, 2016 in respect of the company.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASON THEREOF:

This clause is not applicable to the Company for the year 2022-23.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record its appreciation for the extended co-operation and assistance rendered to the Company and acknowledge with gratitude the continued support and cooperation extended by the investors, clients, business associates and bankers. The regulatory authorities have also put Indian Capital market on par with other international Markets. Your Directors also acknowledge the full-fledged cooperation and dedicated efforts put in by the employees across all levels in the organization and place on record its appreciation for the services rendered.