The Directors are pleased to present the Forty-secondAnnual Report on the business and operationsof the Company along with the
Audited Financial Statements for the year ended31 March 2020.
|Particulars ||2019-2020 ||18-19 |
|Revenue from operations ||7836 ||7754 |
|Other Income ||146 ||165 |
|Total Income ||7982 ||7919 |
|Profit before regulatory Income and Tax ||587 ||624 |
|Regulatory Income ||532 ||559 |
|Profit before tax ||1119 ||1183 |
|Taxation ||(201) ||(246) |
|or the year f Profit ||918 ||937 |
|Other comprehensive income ||(33) ||(34) |
|Total Comprehensive Income ||885 ||903 |
During the year total income was Rs. 7982crore as against Rs. 7919 crore for thepreviousyear.Profit of the subsidiaries of the Companyare given crore during the year (Previousyear Rs.1183 crore). Profit tax (PAT) for2019-20 stands at Rs. 918 crore (Previousyear Rs.937 crore). Total Comprehensive Income forthe year was Rs. 885 crore.
Retained earnings at the end of the yearunder report stood at Rs. 9620 crore (Previousyear Rs. 9365 crore) after adjustments fordividend unforeseen exigencies and miscellaneous items.
During the year your Company had paid aninterim dividend of 200% i.e. Rs.20 per equityshare involving an outgo of Rs. 319.60 yearRs.279.66 croreincludingDividend cr). The above dividendis the highest in the Company's history andwas declared in terms of the Dividend DistributionPolicy approved by the Board of Directorsof the Company at its meeting held on
14 September 2016 and available on the Company'swebsite at https://www.cesc.co.in/wp-content/uploads/policies/Dividend_Policy.pdf. The Notice convening the ensuing AnnualGeneral Meeting ("AGM") of the Membersof the Company includes an item for confirmationof the said interim dividend.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for theyear under review as stipulated under theSecurities and Exchange Board of Requirements) RegulationsIndia(ListingObligations 2015 ("Listing Regulations")is presented in a separate section forminga part of this report (Annexure A').
As reported last year the Composite Schemeof Arrangement under Sections230 to 232 andother applicableprovisionsofthe 102 152 of the Actand
Companies Act 2013 (the Act') involving theCompany some of its erstwhile andpresentsubsidiariesandtheirrespectiveshareholders ("Scheme") as previously approvedby the Hon'ble National
Company Law Tribunal Kolkata bench ("NCLT")subject to the terms and conditions mentionedin NCLT's Order dated 28 March 2018 wasimplemented and CESC's non-power investments weredemerged into two entities retail and otherbusiness ventures. These two entities have sincebeen listed with the stock exchanges.
However it was later considered prudent andin the best interest of the Company itsshareholders and other stakeholders to no longerpursue the other parts of the Scheme involvingthe proposed transfer and vestingofCESC'sGenerationUndertakinginto Haldia Energy Limited ("HEL") a wholly-ownedCESC subsidiary and matters related thereto. Accordinglycertain parts of the Scheme dealing with theaforesaid transfer and the other connected mattershave become null and void and Generation Undertakingcontinuesto be a part of the Company andHEL a wholly owned CESC subsidiary.
As on 31 March 2020 the Company hadeighteen subsidiaries including EminentElectricityDistributionLimitedwhich became a subsidiary of the Company duringthe year under review. Broad details of operationsbeforetaxwasRs. 1119 in Management Discussion &Analysis Report which forms a partafter ofthis report.
A separate statement containing salient features ofthe financial statements of subsidiary companiesas perSection129(3) of the Act is attachedto the consolidated financial statement.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the provisions of the Actapplicable accounting standards and the Listing Regulationsconsolidated financial statements of the Companywith all its subsidiaries for the year
2019-20 audited by Messrs S. R. Batliboi &Co. LLP the Company's auditors form a partof the annual report and accounts and shallbe laid before the ensuing Annual GeneralMeeting (AGM) of the Company as required underthe Act.
The audited financial statements including the consolidatedfinancial statements of the Company and allother documents required to be attached theretohave been posted on the Company's websiteand can be accessed at https://www.cesc.co.in/wp-content/uploads/annreport/CESC_AR_2019.pdf. The financialstatements of the subsidiariesas required are put up on the Company'swebsite and can be accessed at https://www.cesc.co.in/?cat=25.The Company has formulated a Policy for determiningMaterial Subsidiaries. The Policy is put upon the Company's website and can be accessedat https://www. cesc.co.in/wp-content/uploads/policies/POLICY_ON_MATERIAL_SUBSIDIARIES.pdf.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Intermsoftheprovisionsof of the Articles of Associationof the Company Dr. Sanjiv Goenka retiresas a Director of the Company at theforthcoming AGM and being eligible offers himselffor re-appointment as a Director.
The Board of Directors on recommendation ofthe Nomination and Remuneration Committee at itsmeeting held on 14 November 2019 appointed:a i. Mr. Shashwat Goenka as an additionaldirector in the category of non-executive non-independentdirector designated as
Vice-Chairman of the Board of Directors; and
ii. Mr. Sunil Mitra as an additional directorin the category of non-executive independent directorfor a period of five years.
Both the directorswouldholdofficeassuchtillthe date of ensuingAGM of the Company.
The Company has received requisite notices frommembers proposing the candidatures of Mr. ShashwatGoenka and Mr. Sunil Mitra to the officeofDirectors of the Company in accordance withthe relevant provisions of the Act.
It is also proposed to seek shareholders' approvalby means of a Special Resolution for continuationof the appointment Mr. Pradip Kumar Khaitanas a non-executive non-independent director of theCompany in accordance with the requirement ofR. Regulation 17(1A) oftheListing
Noticefor the forthcoming AGM includes appropriateResolutions seeking shareholders' approvals in respect ofall the above appointments.
The requisite disclosures regarding the above ofthe Company for reappointments / appointments havebeen made in the Corporate Governance section whichforms a part of this Report.
The details on Directors' appointments records inaccordance and remuneration including criteria for determiningqualifications positive es independence of Director andalso remuneration attribut Key Managerial Personnel andother employees forms a part of Corporate GovernanceReport of this Annual Report. During theyear performance evaluationof independent directors andother board members as well as committees ofthe Board was done in . termsoftheActandtheListingRegulations the Independent TheCompany has received declarationsthe criteria of DirectorsoftheCompany independence prescribedunder the Act and the Listing Regulations
Five meetings of the Board of Directors wereheld during the year on 17 May 2019 19July 2019 14 August 2019 14 November 2019and 11 February 2020. The Company has compliedwith the Secretarial Standards issued by the Instituteof Company Secretaries of India on Board Meetingand General Meeting.
During the year under report the Company hasbeen compliant with the applicable provisions relatingto its Key Managerial Personnel.
EQUITY CAPITAL AND DEBT STRUCTURE
There was no change in the equity sharecapital of the Company during the year. 14
The equity shares of the Companycontinueto belisted at the BSE Limited (BSE)NationalStock Exchangeof India Ltd (NSE) and Exchange Ltd (CSE).The Company has paid the the requisite listingfees to the Stock Exchanges up to thefinancialyear
During the year the Company issued and allottedsecured non-convertibleredeemable debentures (NCDs') aggregatingto Rs. 170 crore and since close ofthe year further NCDs aggregating Rs. 300crore for cash at par on private placementbasis in compliance with the applicable regulationsof Securities and Exchange Board of Indiaon issue of debt securities by certain largecompanies. The Notice of the forthcoming AGMincludes an appropriate resolution for creation ofsecurity in respect of the aforesaid NCDs.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors hereby state and confirm that:
March2020theapplicableaccountingstandards have been followed alongwithproper explanation i) in the preparation of the accountsfor the financial year ended 31 relating tothe material departures if any;
ii) the Directors have selected such accounting policiesand applied them consistently and made judgmentsand estimates that are reasonable and prudent soas to give a true and fair view ofthe state of affairs of the Company atthe end of the financial year and of theprofit period;
iii) the Directors have taken proper and sufficientcare for the maintenance of adequate accountingwith the provisions of the Act for safeguardingthe assets of the Company preventingand detecting fraudand for other irregularities;
iv) the Directors have prepared the annual accountson a going concern basis;
v) the Directors have laid down internal financialcontrols to be followed by the Company andthat such internal financial controls are adequateand are operating
vi) the Directors have devised proper systems toensure compliance with the provisions of all applicablelaws and that such systems are adequate andoperating effectively
The Company is committed to maintain the higheststandards of corporate governance and adhere tothe related requirements set out in the ListingRegulations. The report on Corporate Governance (AnnexureB') with Additional Shareholder Information(AnnexureC') as stipulated Regulations forms part ofthis Report alongwith the Auditors' Certificate thereon.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Actand the rules made thereunder the Companyhas formulated a Corporate Social ResponsibilityPolicy a brief outline of which along withthe required disclosures are annexed as apart of this Report. The CSR Policy isput up on the Company's website and canbe accessed at https://www.cesc.co.in/wp-content/uploads/policies/CSR_Policy.pdf.Adetailedsectionontheactivities in this behalf duringthe year under review is disclosed in AnnexureD' which forms a part of this report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations theBusiness Responsibility Report describing the initiativestaken by the Company from an environmentalsocial and governance perspective is attached asa part of the Annual Report (AnnexureE').
RELATED PARTY TRANSACTIONS
All contracts / arrangements / transactions enteredinto by the Company during the financial yearwith related parties were in its ordinarycourse of business and on an arm's lengthbasis.
There was no materially significant related partytransaction that had a potential conflict withthe The Policy on Materiality of Related PartyTransactions on dealing with Related Party Transactionsthe Board is put up on the Company'swebsite and can be accessed at https://www.cesc.co.in/wp-content/uploads/policies/RELATED_PARTIES_POLICY.pdf.
Transactions with related parties entered into inthe normal course of business are periodicallyplacedbeforetheAuditCommittee of the Board for itsapproval. Members may please refer to Note42 to the Standalone Financial Statement forrequisite disclosure in respect of related partiesand transactions entered into during the year.
The Company has an elaborate Risk ManagementFramework which is designed to enable risksto be identified assessed and mitigated appropriately.
Risk Management Policy is aimed for identificationassessment and mitigation of various risks facedby the Company. Detailed discussion on riskmanagement is covered in Management's Discussionand Analysis (Annexure A') and Report onCorporate Governance (Annexure B') which formsa part of the Annual Report. Internal FinancialControl are an integral part of the riskmanagement process and the Board is of theopinion that it has been working effectively.In view of its importance the Company makesefforts on an ongoing basis to strengthenthe internal financial control system.
Messrs S R Batliboi & Co. LLP CharteredAccountants (Firm Registration No.301003E/E300005) wereappointed as Auditors of the Company for aterm of five ninth AGM of the Company.
The Auditors' Report annexed to the financialstatements for the year under review doesnot contain any qualification reservation adverseremark or disclaimer. The Auditors have notreported any instance of fraud referred toin Section134(3)(ca) of the Act.
The Board had re-appointed Messrs Shome &Banerjee Cost
Accountants as Cost Auditors for conducting therecords of the Company for the financial yearSection 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014.Messrs Shome & Benerjee have since beenappointed as Cost Auditors for the financialyear 2020-21 and the Notice of the forthcomingAGM includes an appropriate resolution for ratificationof their remuneration.
The Company is required to maintain cost recordsas specified by the Central Government underSection 148(1) of the Act and such interestoftheCompany.accounts are made and maintained accordingly. AndSECRETARIAL AUDITOR as approved by
The Board had appointed Messrs S.M. Gupta &Co. Company Secretaries as the Secretarial Auditorof the Company to conduct the secretarialaudit for the year under review.
The Secretarial Audit Report for the financialyear ended 31 March
2020 is annexed (Annexure F') forming apart of this Report.
The Secretarial Audit Report does not containany qualification withthem reservation adverse remarkor disclaimer.
The Company has established a robust VigilMechanism and a
Whistle-blower policy in accordance with provisionsof the Act and Listing Regulations for reportinggenuine concerns over happening of instances ofany irregularity unethical practice and/or misconductfor directors employees and stakeholders. The detailsof the said policy have been disclosed onthe Company's website www.cesc.co.in.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
In terms of the provisions of the Section186 (11) of the Act the provisions ofSection 186 (4) requiring disclosure in thefinancial statements of the full particulars madeor guarantee given or security provided andthe purpose for which such loan or guaranteeor security is proposed to be utilised bythe recipient of the loan or guarantee orsecurity not applicable Committee and approved bythe to the Company. & Remuneration to
The Company during the year has not acceptedany deposits and as such no amount ofprincipal or interest was outstanding as onthe date of the Balance Sheet.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The information relating to conservation of energyresearch & development technology absorption andforeign exchange earnings and outgo as requiredunder Section 134 of Act read with theCompanies (Accounts) Rules 2014 is given inAnnexure forming a part of this Report (AnnexureG').
As required under Section 134(3)(a)of the Actthe Annual Return is put up on theCompany's website and can be accessed at www.cesc.co.in.An extract of the Annual Return as requiredto be attached is annexed and forms apart of this report (Annexure H').
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The informationrequired under Section 197(12) of theAct read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel)Rules 2014 is attached as Annexure - Detailsof employee remuneration as required under provisionsof Section 197 of the Act and Rule5(2) and 5(3) of the aforesaid Rules areprovided in the said Annexure-J. However theReports and Accounts are being mailed to themembers excluding the aforesaid Annexure - J.Any member interested in obtaining the samemay write to the Company Secretary at firstname.lastname@example.org.None of the employees listed in the saidAnnexure-J are related to any Director ofthe Company.
The Company has in place a Remuneration Policyfor Directors key managerial personnel and otheremployees duly recommended by the Nomination Board.Otherdetailsrelatingpaid during the year to directors and keymanagerial personnel are furnished in the Reporton Corporate Governance which forms a partof this report.
Industrial relations in the Company during theyear continued be cordial. A detailed sectionon the Company's Human Resource initiatives isforming part of the Management Discussion &Analysis forming a part of this Report.
PANDEMIC AND SUPER CYCLONE
Reports on challenges during the COVID-19 relatedongoing lockdown and the unprecedented recent furycaused by the super cyclone "Amphan" thatsoon followed alongwith measures taken by theCompany to meet the consequential disruptions appearin the attached Management Discussion and AnalysisReport.
The Board of Directors wishes to place onrecord its deep sense of appreciation forthe committed services by all the employeesof the
Company. They have displayed commendable sincerityin rallying together as a great team whilemeeting the recent challenges of an unprecedentedscale. The Board of Directors would also liketo express its sincere appreciation for theassistance and co-operation received financialinstitutionsbanks Government from the authorities consumersand vendors during the year under review.
Your Directors are also grateful for your continuedencouragement and support.
|On behalf of the Board of Directors || |
|Dr. Sanjiv Goenka || |
|Chairman || |
|DIN: 00074796 ||Kolkata 29 June 2020 |