The Directors have pleasure in presenting the Second Annual Report and Audited Accountsof CESC Ventures Limited for the year ended 31 March 2019. The Company was incorporatedon 7 February 2017 and its shares got listed with stock exchanges during the financialyear 2018-19.
| || ||र in Crores |
|Item ||2018-19 ||2017-18 (07.02.2017 to 31.03.2018) |
|Revenue from operations ||62.60 ||25.10 |
|Other Income ||61.90 ||2.23 |
|Total Income ||124.50 ||27.33 |
|Profit before Taxation ||74.18 ||4.38 |
|Tax Expenses ||8.41 ||2.08 |
|Profit after tax ||65.77 ||2.30 |
|Other Comprehensive Income ||(0.79) ||0.15 |
|Total Comprehensive Income ||64.98 ||2.45 |
During the year under review the Company's revenue from operations was र 62.60crore. Total income (including other income) grew from र 27.33 crore in 2017-18 to र124.50 crore in 2018-19. Profit after tax (PAT) for 2018-19 stands at र 65.77 croreagainst र 2.30 crore in 2017-18. Total comprehensive income was at र 64.98 crore.Retained earnings at the end of the year under report stood at र 68.50 crore (Previousyear र 3.52 crore) after adjustments for miscellaneous items.
A detailed review of the operations for the year ended 31 March 2019 is given in theManagement Discussion & Analysis which forms a part of this Report.
The Board considers it prudent to conserve resources for the Company's growth andexpansion and accordingly does not recommend payment of any dividend on its Equity sharesfor the year ended on 31 March 2019.
A Scheme of Arrangement under Sections 230 to 232 and other applicable provisions ofthe Companies Act 2013 ("Scheme'') amongst the Company CESC Limited (its erstwhileholding company) ("CESC") and some other CESC subsidiaries was approved byNational Company Law Tribunal Kolkata Bench ("NCLT") subject to the terms andconditions mentioned therein.
In terms of the said Scheme with effect from 1 October 2017 IT business of CESC hasbeen demerged to the Company. The Company now has amongst its subsidiaries FirstsourceSolutions Limited Quest Properties India Limited Guiltfree Industries Limited andBowlopedia Restaurants India Limited.
As consideration for demerger of CESC's IT business CESC shareholders have beenallotted without any payment additional equity shares of the Company in the ratio of 2fully paid-up equity shares of र 10 each against every 10 CESC shares held on 31October 2018 the Record Date. 26511409 equity shares of र 10 each allotted by theCompany have subsequently been listed with National Stock Exchange of India Limited (NSE)BSE Limited (BSE) and The Calcutta Stock Exchange Limited (CSE).
The Board believes that the above restructuring will unlock value for the investorsgive a focussed management attention to the businesses involving the Company and itssubsidiaries to persue respective growth plan and allow the Company to take advantage ofthe market value for FMCG Real Estate and IT businesses.
As stated earlier the Company issued and allotted 26511409 fully paid equity sharesof the face value of र 10/- each on 14 November 2018 to the shareholders of CESCLimited in the ratio of 2 equity shares of the Company for every 10 equity shares held bythem in CESC Limited on 31 October 2018 in terms of the aforesaid Scheme. The said shareshave been listed with BSE NSE and CSE.
As on 31 March 2019 the Company had twenty three subsidiaries. Broad details ofoperations of the said subsidiaries are given in the Management Discussion & Analysissection which forms a part of this report.
In accordance with the Companies Act 2013 ('the Act') consolidated financialstatements of the Company and of all its subsidiaries for the year 2018-19 have beenprepared and duly audited by
M/s. Batliboi Purohit & Darbari Auditors in compliance with the applicableaccounting standards and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ('SEBI Regulations'). The said consolidated financial statements form apart of the annual report and accounts and shall be laid before the Annual General Meetingof the Company while laying its financial statements as required under the Act. A separatestatement containing the salient features of the financial statements of its subsidiariesis attached. The Company has a policy on material subsidiaries pursuant to Regulation16(1)(c) of the SEBI Regulations. The same is available on website of the Company www.cescventures.com
Neither maintenance of cost records nor audit of cost records as required under Section148 of the Act read with relevant rules made thereunder is applicable to the Company.
Directors and Key Managerial Personnel
Mr. Sanjiv Goenka Mr. Shashwat Goenka Mr. Kalaikuruchi Jairaj Ms. Grace ElizabethKoshie Mr. Arjun Kumar and Mr. Suhail Sameer were appointed by the Board as AdditionalDirectors from 14 November 2018 and shall hold office as such upto the date of theforthcoming Annual General Meeting. The Company has received requisite notices frommembers proposing the candidatures of Mr. Sanjiv Goenka Mr. Shashwat Goenka Mr.Kalaikuruchi Jairaj Ms. Grace Elizabeth Koshie Mr. Arjun Kumar and Mr. Suhail Sameer tothe office of Directors under the applicable provisions of the Act.
Mr. Kalaikuruchi Jairaj Ms. Grace Elizabeth Koshie and Mr. Arjun Kumar have beenappointed as Independent Directors for a period of 5 years each from 14 November 2018.
Mr. Suhail Sameer was appointed as the Whole-time Director of the Company for a periodof 3 years from 14 November 2018 subject to necessary approvals.
Notice for the forthcoming Annual General Meeting of the Company includes appropriateResolutions seeking shareholders' approval in respect of all the above matteर
The requisite disclosures regarding the above appointments have been made in theCorporate Governance section which forms a part of this Report.
Mr. Rajendra Jha and Mr. Utpal Bhattacharyya first Directors of the Company resignedwith effect from 14 November 2018. Mr. Subhasis Mitra another Director resigned witheffect from 27 November 2018.
The Independent Directors of the Company have confirmed that they meet the criteria ofindependence as prescribed under the Act and SEBI Regulations.
The details on all matters related to the Directors' appointments and remunerationincluding criteria for determining qualifications positive attributes independence ofDirector and also remuneration for Key Managerial Personnel and other employees form partof Corporate Governance Report included in this Annual Report. During the yearperformance evalution of Independent Directors and other board members as well as thecommittees of the board were done in terms of the Act and SEBI Regulations.
Seven meetings of the Board of Directors were held during the year on 19 May 2018 10September 2018 12 October 2018 25 October 2018 5 November 2018 14 November 2018and 11 February 2019. The Company has complied with the Secretarial Standards issued bythe Institute of Company Secretaries of India on Board Meetings and Annual GeneralMeetings.
The equity shares of the Company got listed at the BSE NSE and CSE. The trading of theshares commenced from 25 January 2019. The Company has paid the requisite listing fee tothe said Stock Exchanges up to the financial year 2019-20.
Directors' Responsibility Statement
Pursuant to Section 134 of the Act your Directors hereby state and confirm that:
i) in the preparation of the accounts for the financial year ended 31 March 2019 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
ii) the Directors have 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;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the Directors have prepared the annual accounts on a going concern basis;
v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
A report on Management Discussion and Analysis is attached herewith (Annexure 'A'). Aseparate Report on Corporate Governance (Annexure 'B') along with Additional ShareholderInformation (Annexure 'C') as prescribed under the SEBI Regulations are annexed as a partof this Report along with the Auditor's Certificate thereon.
Corporate Social Responsibility
In accordance with Section 135 of the Act and the rules made thereunder the Companyhas formulated a Corporate Social Responsibility Policy a brief outline of which alongwith the required disclosures are annexed (Annexure 'D') as a part of this Report.
Whistle Blower Policy
Pursuant to Section 177 of the Act the rules made thereunder and the SEBI Regulationsthe Company has a Whistle Blower Policy (Vigil Mechanism) in place for reporting genuineconcerns over happening of instances of any irregularity unethical practice and/ormisconduct for directors employees and stakeholdeर The details of the said policy havebeen disclosed in the Company's websitehttps://www.cescventures.com/uploads/policies/BPS_Whistle.pdf
Related Party Transactions
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There was no materiallysignificant related party transaction that had a potential conflict with the interests ofthe Company. Transactions with related parties entered into in the normal course ofbusiness are periodically placed before the Audit Committee of the Board for its approval.
Risks and Concerns
The Company has in place a Risk Management Policy which can be accessed athttps://www.cescventures.com/uploads/policies/ RISK_MANAGEMENT_POLICY_BPS.pdf. Details ofvarious risks faced by the compnay are provided in the Management Discussion and Analysis(Annexure 'A').
Particulars of Loans Guarantees or Investments
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in Notes 4 and 29 to the standalone financialstatements of the Company.
The Company during the year has not accepted any deposits and as such no amount ofprincipal or interest was outstanding as on the date of the Balance Sheet.
At the First Annual General Meeting of the Company the members had appointed MessरBatliboi Purohit & Darbari Chartered Accountants (Firm Registration No. 303086E) asstatutory auditors for a term of five consecutive years holding office until theconclusion of the Sixth Annual General Meeting.
The Auditors' Report annexed to the financial statements for the year under review doesnot contain any qualification.
The Auditors have not reported any instance of fraud referred to in Section 134(3)(ca)of the Act.
Secretarial audit of secretarial and related records of the Company was conductedduring the year by M/s. S.M. Gupta & Co. Company Secretaries and a copy of thesecretarial audit report is annexed which forms a part of this report (Annexure 'E').
Conservation of Energy Research & Development Technology Absorption ForeignExchange Earnings and Outgo
The information relating to conservation of energy research & developmenttechnology absorption and foreign exchange earnings and outgo as required under Section134 of Act read with the Companies (Accounts) Rules 2014 is given in Annexure forming apart of this Report (Annexure 'F').
An extract of the Annual Return as required is annexed and forms a part of this report(Annexure 'G'). The annual return of the Company as required under the Act will beavailable on the website of the Company at www.cescventures.com/annual_return.php
Particulars of Employees
The information required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attachedas Annexure - H. Details of employee remuneration as required under provisions of Section197 of the Act and Rule 5(2) and 5(3) of the aforesaid Rules are provided in the Annexureforming part of this Report. However the Report and Accounts are being sent to theMembers excluding the aforesaid Annexure. Any member interested in obtaining the same maywrite to the Company Secretary at the Registered Office of the Company.
The Company has in place a Remuneration Policy for Directors Key Managerial Personneland other employees duly recommended by the Nomination & Remuneration Committee andapproved by the Board. Other details relating to remuneration paid during the year todirectors and key managerial personnel are furnished in the Report on Corporate Governancewhich forms a part of this report.
Employee relations in the Company during the year continued to be cordial.
The Board wishes to place on record its sincere appreciation for the continuedassistance and support extended to your Company by its customers banks vendorsGovernment authorities and employees.
Your Directors are also grateful for your continued encouragement and support.
On behalf of the Board of Directors
| ||Sanjiv Goenka |
| ||Chairman |
|Kolkata 17 May 2019 ||DIN:00074796 |