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Updated:22 May, 2019, 10:04 AM IST

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Updated:22 May, 2019, 10:17 AM IST

Directors' Report

The Directors have pleasure in presenting the Annual Report and Audited Accounts of CESC Limited for the year ended 31 March 2016.

Performance Overview

During the year under review, the Company's revenue from operations increased by 4.92% over last year to reach Rs. 6493.07 crore. Total income (including other income) grew by 5.46% from Rs. 6273.60 crore in 2014–15 to Rs. 6616.18 crore in 2015–16. Profit before depreciation and taxation (PBDT) grew by 3.46% to Rs. 1268.21 crore during the year. After providing for depreciation of Rs. 369.20 crore and taxation of Rs. 192.00 crore, the profit after taxes (PAT) for 2015­16 stands at Rs. 707.01 crore, which reflects an 1.33% increase over Rs. 697.81 crore during 2015–16.

A detailed review of the operations for the year ended 31 March 2016 is given in the Management Discussion & Analysis (Annexure 'A'), which forms a part of this Report.

Dividend

The Board of Directors of the Company in its meeting held on 11 March, 2016 declared an interim dividend of Rs. 10 per equity share. The above dividend has been paid during the financial year 2015–16.

Subsidiaries

As on 31 March 2016, CESC had thirty–five subsidiaries. Omnipresent Retail India Private Limited and New Rising Promoters Private Limited became subsidiaries of the Company during the year. Relevant details of operations of the subsidiaries are given in the section 'New Projects and Initiatives' and the section 'Other Businesses' in the Management Discussion & Analysis.

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013 ('the Act') the Company has prepared a consolidated financial statement of the Company and of all the subsidiaries in the same form and manner as that of its own, duly audited by M/s. Lovelock & Lewes, the auditors, in compliance with the applicable accounting standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Regulations'). The consolidated financial statements for the year 2015–16, which form a part of the annual report and accounts shall be laid before the Annual General Meeting of the Company while laying its financial statements under sub–section (2) of the said section. A separate statement containing the salient features of the financial statements of its subsidiaries is attached to the financial statements of the Company.

Distribution Franchisee

CESC has emerged as the winner of two separate bids floated by Jaipur Vidyut Vitran Nigam Limited for appointment of distribution franchisees in the cities of Kota and Bharatpur in Rajasthan.

Projects

Details of the Company's projects have been provided in the relevant sections of the Management Discussion & Analysis, which is annexed as a part of this report.

Directors

Mr. S. K. Pai ceased to be a Director of the Company with effect from 21 May, 2015 pursuant to his retirement from IDBI Bank Limited.

In terms of the provisions of Section 152 of the Act and Article 102 of the Articles of Association of the Company, Mr. Sanjiv Goenka, Director, retires at the forthcoming Annual General Meeting and, being eligible, offers himselffor re–appointment.

The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribed under Section 149(6) of the Act and the SEBI Regulations.

Corporate Governance Report, which forms a part of this report, includes details on Nomination and Remuneration Committee and Remuneration Policy of the Company which deals with appointment and remuneration of Directors and Key Managerial Personnel and their performance evaluation criteria.

Five meetings of the Board of Directors were held during the year.

Key Managerial Personnel

During the year there was no change in the Key Managerial Personnel of your Company.

Listing

The equity shares of the Company continue to be listed at the BSE Limited (BSE), the National Stock Exchange of India Ltd (NSE) and the Calcutta Stock Exchange Ltd (CSE). During February, 2016, the Company entered into Listing Agreement with BSE, NSE and CSE in terms of SEBI Regulations. The Company has paid the requisite listing fee to the Stock Exchanges up to the financial year 2016–17.

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, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) 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;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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 the Company and that such internal financial controls are adequate and are operating effectively; and

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

Corporate Governance

A separate Report on Corporate Governance (Annexure 'B') along with Additional Shareholder Information (Annexure 'C') as prescribed under the SEBI Regulations, are annexed as a part of this Report along with the Auditor's Certificate.

Corporate Social Responsibility

In accordance with Section 135 of the Act and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy, a brief outline of which along with the required disclosures and details of activities undertaken during the year are disclosed in Annexure 'D' which forms part a of this report.

Whistle Blower Policy

Pursuant to Section 177 of the Act, the rules made thereunder and the SEBI Regulations, the Company has a Whistle Blower Policy (Vigil Mechanism) in place for reporting genuine concerns over happening of instances of any irregularity, unethical practice and/or misconduct for directors, employees and stakeholders. The Company's website (www.cesc.co.in ) confirms establishment of the said policy.

Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There was no materially significant related party transaction that had a potential conflict with the interests of the Company. Transactions with related parties entered into in the normal course of business are periodically placed before the Audit Committee of the Board for its approval.

Particulars of Loans, Guarantees or Investments

In terms of the provisions of the Section 186 (11) of the Act, the provisions of Section 186 (4) requiring disclosure in the financial statements of the full particulars of the loan given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security is not applicable to the Company.

Fixed Deposits

The Company, during the year, has not accepted any deposits and, as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet.

Auditors

Messrs. Lovelock & Lewes, Chartered Accountants, Statutory Auditors of the Company were reappointed Auditors to hold office from the conclusion of the Thirty–sixth Annual General Meeting (AGM) held on 30 July 2014 till the conclusion of the Thirty–ninth AGM subject to ratification by the members at the Thirty–eighth AGM of the Company. Accordingly, the notice convening the ensuing Thirty–eighth AGM includes a resolution seeking such ratification by the members of the said re–appointment of the Auditors.

The Company has received a letter from the Statutory Auditors to the effect that the ratification of their re–appointment, if made at the forthcoming Annual General Meeting, would be within the limits prescribed under Section 141(3)(g) of the Act.

Cost Audit

Messrs. Shome & Banerjee, Cost Accountants, were re–appointed to conduct the audit of the cost accounting records of the Company for the year under review.

Secretarial Audit

Secretarial audit of secretarial and related records of the Company was conducted during the year by S.M. Gupta & Co., Company Secretaries and a copy of the secretarial audit report is annexed which forms a part of this report (Annexure 'E').

Conservation of Energy, Research & Development, Technology Absorption, Foreign Exchange Earnings and Outgo

The information relating to conservation of energy, research & development, technology absorption and foreign exchange earnings and outgo, as required under Section 134 of Act read with the Companies (Accounts) Rules, 2014 is given in Annexure, forming a part of this Report (Annexure 'F').

Extract of Annual Return

An extract of the Annual Return as required to be attached is annexed and forms a part ofthis report. (Annexure 'G').

Particulars of Employees

Details pertaining to remuneration as required under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed forming a part of this Report (Annexure – 'H').

Further the information, as required in accordance with Rule 5 (2) of the said rules, also forms a part of this Report. However, as per the provisions of first proviso to Section 136(1) of the Act, the Report and the Accounts are being sent to all the Shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company. The said information is also available for inspection at the Registered Office during working hours up to the date of the AGM.

The Company has in place a Remuneration Policy for Directors, key managerial personnel and other employees duly recommended by the Nomination & Remuneration Committee and approved by the Board. Other details relating to remuneration paid during the year to directors and key managerial personnel are furnished in the Report on Corporate Governance which forms a part of this report.

Details of the Anti Sexual Harassment Policy of the Company is stated in the report of the Corporate Governance forming a part of this report.

Industrial Relations

Industrial relations in the Company, during the year, continued to be cordial. A detailed section on the Company's Human Resource initiatives is a part of the Management Discussion & Analysis forming a part of this Report.

Acknowledgement

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to your Company by its consumers, bankers, vendors, Government authorities and employees.

Your Directors are also grateful for your continued encouragement and support.

For and on behalf of the Board of Directors

Sanjiv Goenka

Chairman

Kolkata,

19 May2016

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