Your Directors present herewith the 5th Annual Report on the business & operationsof the Company together with the Audited Financial Statements for the year ended March 312019.
1. Financial Results
A summary of the standalone and consolidated financial performance of the Company forthe financial year ended March 31 2019 as compared to the previous year is as summarisedbelow:
| || || |
(Rs. in lakhs)
| ||Standalone ||Consolidated |
|Particulars ||Year ended March 31 2019 ||Year ended March 31 2018 ||Year ended March 31 2019 ||Year ended March 31 2018 |
|Revenue from Operations ||42.42 ||42.21 ||3057.14 ||3226.30 |
|Profit before Finance Costs Tax Depreciation and Amortization ||45.95 ||10.94 ||983.61 ||1328.48 |
|Less: Depreciation & Amortization Expenses ||2.76 ||4.01 ||118.26 ||124.99 |
|Less: Finance Costs ||- ||- ||- ||- |
|Profit/(Loss) Before Tax ||43.91 ||6.93 ||839.91 ||1121.53 |
|Less: Provision for Tax ||4.85 ||- ||128.85 ||198.93 |
|Profit/(Loss) After Tax ||38.34 ||6.93 ||711.06 ||922.60 |
2. Financial Performance and State of Affairs of the Company
During the Financial Year 2018-19 the standalone Gross Revenue from Operations wasRs. 42.42 Lakhs (Previous Year: Rs. 42.21 Lakhs). The Profit stood at Rs. 38.54 Lakhs(Previous Year: Rs. 6.93 Lakhs) registering a growth of over 400%.
The Consolidated Gross Revenue from operations for FY 2019 was Rs. 3057.14 Lakhs(Previous Year: Rs. 3226.30 Lakhs). The Consolidated profit stood at Rs. as 711.06 Lakhs(Previous Year: Rs. 922.60 Lakhs).
The Board of Directors has not recommended payment of dividend.
There is no change in the nature of business of the Company. There were no significantor material orders passed by any regulator court or tribunal impacting the Company'soperation in future.
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year i.e. March 31 2019 anddate of this report.
Details on the state of affairs of the Company are covered in the Management Discussionand Analysis Report attached to this Report and marked as Annexure A'.
3. Share Capital
During the year under review there were no changes in the Equity Share capital andthe Preference Share Capital of the Company. The paid up Equity Share Capital as on March31 2019 stood at Rs. 1000.37 lakhs and the paid up Preference Share Capital of theCompany stood at Rs. 150.00 lakhs on that date.
4. Subsidiary Associate and Joint Venture
During the year there was no change in the subsidiaries. The Company has twosubsidiaries viz. Cinnatolliah Tea Limited and Uttar Pradesh Trading Company Limited. TheCompany has formulated a policy for determining material subsidiaries in line with therequirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(Listing Regulations'). The said Policy is being disclosed on the Company's websiteat the web-link http://www.birla-sugar.com/Assets/Ganges/Ganges-Securities-Policy-on-Determination-of-Materiality.pdfAll subsidiaries of the Company are managed by their respective Board of Directors inthe best interest of those companies and their stakeholders.
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Indian Accounting Standards issued by the Institute of Chartered Accountants ofIndia and forms an integral part of this Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts)Rules 2014 a statement containing salient features of the financial statements ofSubsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1 which forms partof this Report and marked as Annexure - G'
Pursuant to Regulation 24A of the Listing Regulations the Secretarial Audit Reports ofthe material unlisted subsidiaries of the Company form part of this Report and are markedas Annexure- E2' & Annexure E3' Except the above noother body corporate has become or ceased to be a subsidiary joint venture or associatecompany during the year.
The Board of Directors comprises of 5 (five) Non-Executive Directors having experiencein varied fields and a Managing Director. Out of five Non-Executive Directors three areIndependent Directors. Mrs. Nandini Nopany is the Non-Executive Chairperson of theCompany. In accordance with the provisions of Section 152 of the Act and the Company'sArticles of Association Mrs. Nandini Nopany [DIN: 00051362] retires by rotation at theforthcoming Annual General Meeting and being eligible offers herself for re-appointment.The Board recommends her re-appointment for the consideration by the Members of theCompany at the forthcoming Annual General Meeting.
Mr. Nandanandan Mishra [DIN: 00031342] Independent Director has resigned from theBoard of Directors with effect from March 29 2019. The Board places on record its deepappreciation for the services rendered by Mr. N. Mishra during his tenure as Director andMember of various committees of the Board of Directors of the Company.
Further the Board of Directors on recommendation of the Nomination and RemunerationCommittee appointed Mr. Chhedi Lal Agarwal as an Additional Director with effect from May13 2019. In terms of Section 161 of the Act Mr. Chhedi Lal Agarwal holds office up tothe date of ensuing Annual General Meeting.
The Board recommends the resolution in relation to appointment of Mr. Chhedi LalAgarwal as a Non-executive Independent Director for the approval by the members of theCompany. Brief profile of Mr. Chhedi Lal Agarwal forms part of the Notice convening theAnnual General Meeting.
The Company has received necessary declarations from all the Independent Directors ofthe Company confirming that they meet the criteria of independence as laid down underSection 149(6) & (7) of the Companies Act 2013 and Regulation 25 of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 (Listing Regulations').
In pursuance of the provisions of the Companies Act 2013 and according to Regulationof 25(3) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Performance Evaluation Criteria has been laid downfor effective evaluation of performance of the Board of Directors the Committees thereofand individual Directors including the Chairperson of the Company. After detaileddiscussion at Board level as well as taking input from each Director Nomination andRemuneration Committee finalized the proformas / questionnaires containing variousparameters to evaluate the performance of Board and its committee(s) Individual Directorsand Chairperson of the Company. The performance evaluation parameters are based on theirroles and responsibilities contribution to the Company's goals decision making processflow of information and various other aspects. The evaluation of performance of the Boardas a whole Committees of the Board Individual Directors and Chairperson of the Companywas carried out for the Financial Year 2018-19. Nomination and Remuneration Committeeevaluated the performance of the individual Directors.
Further the Independent Directors at their separate meeting reviewed the performanceand role of non-independent directors and the Board as a whole and Chairman of theCompany. Further the IDs at their meeting have also assessed the quality quantity andtimeliness of flow of information between the Company management and the Board that wasnecessary for the Board to effectively and reasonably perform their duties.
Other information on the Director(s) including required particulars of Directorsretiring by rotation is provided in the Notice convening the Annual General Meeting.
6. Key Managerial Personnel
The following directors / executives of your Company are whole-time Key ManagerialPersonnel (KMPs) as on 31st March 2019 in accordance with the provisions of Section 203of the Companies Act 2013
a. Mr. Santosh Kumar Poddar - Managing Director
b. Mr. Vikash Goyal Chief Financial Officer
c. Ms. Vijaya Agarwala Company Secretary
During the year under review there was no change in the Key Managerial Personnel.
All Directors Key Managerial Personnel and Senior Management of the Company haveconfirmed compliance with the Code of Conduct applicable to Directors & employees ofthe Company and a declaration to the said effect by the Managing Director is made part ofCorporate Governance Report which forms part of this report. The Code is available on theCompany's website at the web link- http://birla-sugar.com/Assets/Ganges/Ganges-Securities-Code-of_Conduct.pdf. All Directors have confirmedcompliance with the provisions of Section 164 of the Companies Act 2013.
7. Familiarisation Programme
Periodic presentations are made at the Board Meetings with respect to businessperformance and updates on business strategy of the Company. The details of thefamiliarisation programme (other than through meeting of Board and its Committees)imparted to Independent Director are uploaded on the website of the Company and availableat the weblink- http://www.birla-sugar.com/Assets/Ganges/Familiarisation_Programme_for_Independent_Director-_Ganges_Securities_Limited.pdf
Further at the time of appointment of an Independent Director the Company issues aformal letter of appointment outlining his/ her role duties and responsibilities. Theformat of such letter of appointment is available at the website of the Company at http://www.birla-sugar.com/Assets/Ganges/Terms-and-conditions-of-appointment-of-Independent-Directors2.pdf
8. Policy on Directors' Appointment and Remuneration
The current policy of the Company is to have an appropriate mix of executivenon-executive and independent directors to maintain the independence of the Board andseparate its functions of governance and management.
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel (KMP) and Senior Management of theCompany. The Policy inter-alia includes the appointment criterion & qualificationrequirements process for appointment & removal retirement policy and remunerationstructure & components etc. of the Directors KMP and other senior managementpersonnel of the Company. As per the Remuneration Policy a person proposed to beappointed as Director KMP or other senior management personnel should be a person ofintegrity with high level of ethical standards.
We affirm that the remuneration paid to the directors is as per the terms laid out inthe Nomination and Remuneration Policy of the Company.
A calendar of Meeting is prepared and circulated in advance to the Directors. The Boardevaluates all the decisions on a collective consensus basis amongst the Directors. Theintervening gap between Meetings was within the period prescribed under the Companies Act2013. During the financial year ended March 31 2019 4 (four) Meetings of the Board ofDirectors of the Company were held. The details of the Board Meetings held during thefinancial year 2018-19 have been furnished in the Corporate Governance Report forming apart of this Annual Report.
The Company has complied with the applicable Secretarial Standards prescribed underSection 118(10) of the Companies Act 2013.
10. Committees of the Board
As on March 31 2019 the Board of Directors had constituted three Committees viz: asAudit Committee Nomination & Remuneration Committee and Stakeholders RelationshipCommittee. The details of the terms of reference number and dates of meetings heldattendance of the Directors and remuneration paid to them are separately provided in theCorporate Governance Report which forms an integral part of this Report.
11. Loans Guarantee and Investments
During the year under review the Company has not given any loans and corporateguarantees covered under the provisions of Section 186 of the Companies Act 2013.
Details on particulars relating to investments under Section 186 of the Companies Act2013 are provided in Note 10 to the financial statements.
12. Related Party Contracts / Arrangements
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 were nomaterially significant related party transactions entered into by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large.
Accordingly the disclosure of Related Party Transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable. The details ofrelated party transactions are set out in the notes to the financial statements.
The Company has developed a Related Party Transactions Policy for purpose ofidentification and monitoring of such transactions and accordingly all Related PartyTransactions are placed before the Audit Committee as also the Board for approval. TheRelated Party Transactions Policy is available on the Company's website at the weblink http://www.birla-sugar.com/Assets/Ganges/Ganges-Securities-Related-Party-Transaction-Policy.pdf
The Policy intends to ensure that proper reporting approval and disclosure processesare in place for all transactions between the Company and its Related Parties.
13. Public Deposits
The Company has not accepted any deposits from the public and as such there are nooutstanding deposits within the meaning of the provisions of the Non-Banking FinancialCompanies Acceptance of Public Deposits (Reserve Bank) Directions 2016 and the provisionsof Section 73 of the Companies Act 2013 read with Companies (Acceptance of Deposit) Rules2014.
14. Risk Management and Internal Financial Controls
Business Risk Evaluation and Management is an ongoing process within the organization.The Company's approach to addressing business risks is comprehensive and includes periodicreview of such risks and a framework for mitigating controls and reporting mechanism ofsuch risks The Company has a robust risk management framework to identify monitor andminimize risks as also identify business opportunities. The Company has in place adequateinternal financial controls with reference to the financial statements. During the yearsuch controls were reviewed and no reportable material weakness was observed.
The Audit Committee reviews the adequacy and effectiveness of the Company's internalcontrol environment and monitors the implementation of audit recommendations includingthose relating to strengthening of the Company's risk management policies and systems. Themain thrust of internal audit is to test and review controls appraisal of risks andbusiness processes besides benchmarking controls with best practices in the industry.
15. Whistle Blower / Vigil Mechanism
The Company has established a vigil mechanism and adopted whistle blower policypursuant to which whistle blowers can report concerns about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct policy.
During the year under review there has been change in this policy with respect to leakor suspected leak of Unpublished Price Sensitive Information so that whistle blowers canreport concerns. The mechanism provides adequate safeguards against victimisation ofpersons who use this mechanism. Brief detail about this mechanism may be accessed on theCompany's website at the weblink http://www.birla-sugar.com/Assets/Ganges/Ganges-Securities-Whistle-Blower-Policy.pdf.
During the year there was no instance of fraud which required the Statutory Auditorsto report to the Audit Committee and / or Board under Section 143(12) of Act and Rulesframed thereunder.
16. Corporate Governance & Annual Return
Your Directors strive to maintain highest standards of Corporate Governance. TheCorporate Governance Report for the Financial Year 2018-19 is attached asAnnexure B' to this Report. The declaration of the Managing Director confirmingcompliance with the Code of Conduct' of the Company Report and Auditor's Certificateconfirming compliance with the conditions of Corporate Governance are enclosed asAnnexure C' and Annexure D' to this Report respectively.
The extract of the Annual Return of the Company is attached as Annexure- F' tothis Report.
17. Auditors Audit Qualifications and Board's Explanations
a. Statutory Auditors
M/s. Agrawal Subodh & Co. Chartered Accountants having Firm Registration No.319260E were appointed as Statutory Auditors at the 2nd Annual General Meeting (AGM) ofthe Company to hold off ce for a term of 5 (3 ve) years from the conclusion of 2nd AGMtill the conclusion of the 7th consecutive AGM. They have confirmed that they are notdisqualified from continuing as Auditors of the Company.
The Report given by the Auditors on the financial statement of the Company is part ofthis Report. The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
b. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed Messrs Vinod Kothari & Co. Practising Company Secretaries to conductSecretarial Audit of the Company for the financial year 2018-19.
The Secretarial Audit Report is annexed herewith as Annexure E1' and selfexplanatory and does not call for any further comments.
c. Internal Auditor
Pursuant to the provisions of Section 138 of the Companies Act 2013 and The Companies(Accounts) Rules 2014 your Company has on the recommendation of the Audit Committeere-appointed Messrs M Parasrampuria & Co. Chartered Accountants to conduct InternalAudit of the Company for the financial year 2018-19.
18. Corporate Social Responsibility (CSR) Policy
The provisions of Section 135 of the Companies Act 2013 relating to Corporate SocialResponsibility are not applicable to the Company.
19. Investor Education and Protection Fund
The provisions pertaining to Investor Education and Protection Fund (Uploading ofInformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany are not applicable to your Company.
20. Energy Conservation Technology Absorption and Foreign Exchange Earnings &Outgo
The provisions of Section 134(3)(m) of the Companies Act 2013 do not apply to yourCompany as it does not have any activity requiring conservation of energy or technologyabsorption. There was no foreign exchange in flow or out flow during the year underreview.
21. Disclosures Under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
During the year under review no complaint / case was filed pursuant to SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
22. Particulars of Employees
During the year under review there was no employee in the Company who was in receiptof remuneration as required to be disclosed under Section 197 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
23. Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: a. that in the preparation of the annualfinancial statements for the year ended March 31 2019 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; b. that such accounting policies as mentioned in the Notes to theFinancial Statements have been selected and applied consistently and judgement andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2019 and of the loss of theCompany for the year ended on that date; c. that proper and sufficient care has been takenfor the maintenance of adequate accounting records in accordance with the provisions ofthe Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. that the annual financial statements havebeen prepared on a going concern basis; e. that proper internal financial controls were inplace and that the financial controls were adequate and were operating effectively. f.that systems to ensure compliance with the provisions of all applicable laws were in placeand were adequate and operating effectively.
24. CEO/CFO Certification
Mr. Santosh Kumar Poddar Managing Director and Mr. Vikash Goyal Chief FinancialOfficer have submitted certificates to the Board as contemplated under Regulation 17(8) ofthe SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
Your Directors take this opportunity of recording their appreciation of theshareholders financial institutions bankers suppliers and cane growers for extendingtheir support to the Company. The Board of Directors also convey its sincere appreciationof the commitment and dedication of the employees at all levels.
| ||For and on behalf of the Board |
| ||Chandra Shekhar Nopany |
|Place: Kolkata ||Co-Chairperson |
|Dated: 13th May 2019 ||DIN: 00014587 |
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/ joint ventures
[Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014]
Part "A" Subsidiaries
| || || ||Rs. in lakhs |
|Sl. No. ||1 ||2 || |
|Name of the subsidiary ||Cinnatolliah Tea Limited || |
Uttar Pradesh Trading Company Limited
|Reporting period for the subsidiary concerned ||March 31 2019 ||March 31 2019 || |
|Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries ||Indian Rupee ||Indian Rupee || |
|Share capital ||2617.54 ||1636.25 || |
|Reserves & surplus ||972.07 ||4566.89 || |
|Total assets ||4148.53 ||6214.95 || |
|Total Liabilities ||4148.53 ||6214.95 || |
|Investments ||Nil ||3195.29 || |
|Turnover ||2348.74 ||692.16 || |
|Profit before taxation ||163.77 ||659.11 || |
|Provision for taxation ||Nil ||60.50 || |
|Profit after taxation ||63.50 ||598.61 || |
|Proposed Dividend ||26.18 ||Nil || |
|% of shareholding ||100 ||100 || |
Part "B": Associates and Joint Ventures
The Company has no associates or joint ventures
| ||Chandra Shekhar Nopany ||Santosh Kumar Poddar |
| ||Director ||Managing Director |
| ||DIN: 00014587 ||DIN: 00055786 |
|Place: Kolkata ||Vikash Goyal ||Vijaya Agarwala |
|Date: 13.05.2019 ||Chief Financial Officer ||Company Secretary |