Ganges Securities Ltd Directors Report.

Dear Members,

Your Directors present herewith the 5th Annual Report on the business & operations of the Company together with the Audited Financial Statements for the year ended March 31, 2019.

1. Financial Results

A summary of the standalone and consolidated financial performance of the Company for the financial year ended March 31, 2019, as compared to the previous year is as summarised below:

(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 was Rs. 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 significant or material orders passed by any regulator, court or tribunal impacting the Companys operation in future.

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year i.e. March 31, 2019 and date of this report.

Details on the state of affairs of the Company are covered in the Management Discussion and 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 and the Preference Share Capital of the Company. The paid up Equity Share Capital as on March 31, 2019 stood at Rs. 1000.37 lakhs and the paid up Preference Share Capital of the Company 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 two subsidiaries viz. Cinnatolliah Tea Limited and Uttar Pradesh Trading Company Limited. The Company has formulated a policy for determining material subsidiaries in line with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The said Policy is being disclosed on the Companys website at the web-link http://www.birla-sugar.com/Assets/Ganges/Ganges-Securities-Policy-on-Determination-of-Materiality.pdf All subsidiaries of the Company are managed by their respective Board of Directors in the best interest of those companies and their stakeholders.

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India 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 of Subsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1 which forms part of this Report and marked as Annexure - G

Pursuant to Regulation 24A of the Listing Regulations, the Secretarial Audit Reports of the material unlisted subsidiaries of the Company form part of this Report and are marked as Annexure- E2 & Annexure - E3 Except the above, no other body corporate has become or ceased to be a subsidiary, joint venture or associate company during the year.

5. Directors

The Board of Directors comprises of 5 (five) Non-Executive Directors having experience in varied fields and a Managing Director. Out of five Non-Executive Directors, three are Independent Directors. Mrs. Nandini Nopany is the Non-Executive Chairperson of the Company. In accordance with the provisions of Section 152 of the Act and the Companys Articles of Association, Mrs. Nandini Nopany [DIN: 00051362], retires by rotation at the forthcoming Annual General Meeting and, being eligible offers herself for re-appointment. The Board recommends her re-appointment for the consideration by the Members of the Company at the forthcoming Annual General Meeting.

Mr. Nandanandan Mishra [DIN: 00031342], Independent Director has resigned from the Board of Directors with effect from March 29, 2019. The Board places on record its deep appreciation for the services rendered by Mr. N. Mishra during his tenure as Director and Member of various committees of the Board of Directors of the Company.

Further, the Board of Directors on recommendation of the Nomination and Remuneration Committee appointed Mr. Chhedi Lal Agarwal as an Additional Director with effect from May 13, 2019. In terms of Section 161 of the Act, Mr. Chhedi Lal Agarwal holds office up to the date of ensuing Annual General Meeting.

The Board recommends the resolution in relation to appointment of Mr. Chhedi Lal Agarwal as a Non-executive Independent Director, for the approval by the members of the Company. Brief profile of Mr. Chhedi Lal Agarwal forms part of the Notice convening the Annual General Meeting.

The Company has received necessary declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under Section 149(6) & (7) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (Listing Regulations).

In pursuance of the provisions of the Companies Act, 2013 and according to Regulation of 25(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Performance Evaluation Criteria has been laid down for effective evaluation of performance of the Board of Directors, the Committees thereof and individual Directors including the Chairperson of the Company. After detailed discussion at Board level as well as taking input from each Director, Nomination and Remuneration Committee finalized the proformas / questionnaires containing various parameters to evaluate the performance of Board and its committee(s), Individual Directors and Chairperson of the Company. The performance evaluation parameters are based on their roles and responsibilities, contribution to the Companys goals, decision making process, flow of information and various other aspects. The evaluation of performance of the Board as a whole, Committees of the Board, Individual Directors and Chairperson of the Company was carried out for the Financial Year 2018-19. Nomination and Remuneration Committee evaluated the performance of the individual Directors.

Further, the Independent Directors at their separate meeting reviewed the performance and role of non-independent directors and the Board as a whole and Chairman of the Company. Further, the IDs at their meeting have also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Other information on the Director(s) including required particulars of Directors retiring 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 Managerial Personnel (KMPs) as on 31st March, 2019 in accordance with the provisions of Section 203 of 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 have confirmed compliance with the Code of Conduct applicable to Directors & employees of the Company and a declaration to the said effect by the Managing Director is made part of Corporate Governance Report which forms part of this report. The Code is available on the Companys website at the web link- http://birla-sugar.com/ Assets/Ganges/Ganges-Securities-Code-of_Conduct.pdf. All Directors have confirmed compliance 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 business performance and updates on business strategy of the Company. The details of the familiarisation programme (other than through meeting of Board and its Committees) imparted to Independent Director are uploaded on the website of the Company and available at 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 a formal letter of appointment outlining his/ her role, duties and responsibilities. The format 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 executive, non-executive and independent directors to maintain the independence of the Board and separate its functions of governance and management.

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management of the Company. The Policy, inter-alia, includes the appointment criterion & qualification requirements, process for appointment & removal, retirement policy and remuneration structure & components, etc. of the Directors, KMP and other senior management personnel of the Company. As per the Remuneration Policy, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards.

We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

9. Meetings

A calendar of Meeting is prepared and circulated in advance to the Directors. The Board evaluates all the decisions on a collective consensus basis amongst the Directors. The intervening gap between Meetings was within the period prescribed under the Companies Act, 2013. During the financial year ended March 31, 2019, 4 (four) Meetings of the Board of Directors of the Company were held. The details of the Board Meetings held during the financial year 2018-19 have been furnished in the Corporate Governance Report forming a part of this Annual Report.

The Company has complied with the applicable Secretarial Standards prescribed under Section 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: as Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee. The details of the terms of reference, number and dates of meetings held, attendance of the Directors and remuneration paid to them are separately provided in the Corporate 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 corporate guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

Details on particulars relating to investments under Section 186 of the Companies Act 2013 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 on an arms length basis and were in the ordinary course of business. There were no materially significant related party transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable. The details of related party transactions are set out in the notes to the financial statements.

The Company has developed a Related Party Transactions Policy for purpose of identification and monitoring of such transactions and accordingly all Related Party Transactions are placed before the Audit Committee as also the Board for approval. The Related Party Transactions Policy is available on the Companys 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 processes are 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 no outstanding deposits within the meaning of the provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and the provisions of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules 2014.

14. Risk Management and Internal Financial Controls

Business Risk Evaluation and Management is an ongoing process within the organization. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed.

The Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys risk management policies and systems. The main thrust of internal audit is to test and review controls, appraisal of risks and business 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 policy, pursuant to which whistle blowers can report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct policy.

During the year under review, there has been change in this policy with respect to leak or suspected leak of Unpublished Price Sensitive Information so that whistle blowers can report concerns. The mechanism provides adequate safeguards against victimisation of persons who use this mechanism. Brief detail about this mechanism may be accessed on the Companys 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 Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

16. Corporate Governance & Annual Return

Your Directors strive to maintain highest standards of Corporate Governance. The Corporate Governance Report for the Financial Year 2018-19 is attached as Annexure B to this Report. The declaration of the Managing Director confirming compliance with the Code of Conduct of the Company Report and Auditors Certificate confirming compliance with the conditions of Corporate Governance are enclosed as Annexure C and Annexure D to this Report respectively.

The extract of the Annual Return of the Company is attached as Annexure- F to this Report.

17. Auditors, Audit Qualifications and Boards 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) of the Company, to hold off ce for a term of 5 (3 ve) years from the conclusion of 2nd AGM till the conclusion of the 7th consecutive AGM. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Report given by the Auditors on the financial statement of the Company is part of this Report. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain 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 has appointed Messrs Vinod Kothari & Co., Practising Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2018-19.

The Secretarial Audit Report is annexed herewith as Annexure E1 and self explanatory 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 Committee re-appointed Messrs M Parasrampuria & Co., Chartered Accountants to conduct Internal Audit 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 Social Responsibility are not applicable to the Company.

19. Investor Education and Protection Fund

The provisions pertaining to Investor Education and Protection Fund (Uploading of Information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company 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 your Company as it does not have any activity requiring conservation of energy or technology absorption. There was no foreign exchange in flow or out flow during the year under review.

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 Sexual Harassment 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 receipt of remuneration as required to be disclosed under Section 197 read with Rule, 5 of the Companies (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 and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

 a. that in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the loss of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place 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 place and were adequate and operating effectively.

24. CEO/CFO Certification

Mr. Santosh Kumar Poddar, Managing Director and Mr. Vikash Goyal, Chief Financial Officer have submitted certificates to the Board as contemplated under Regulation 17(8) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

25. Acknowledgement

Your Directors take this opportunity of recording their appreciation of the shareholders, financial institutions, bankers, suppliers and cane growers for extending their support to the Company. The Board of Directors also convey its sincere appreciation of 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

Annexure G

Form AOC-1

Statement containing salient features of the financial statement of subsidiaries/associate companies/ joint ventures

[Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (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 2,617.54 1,636.25
Reserves & surplus 972.07 4,566.89
Total assets 4,148.53 6,214.95
Total Liabilities 4,148.53 6,214.95
Investments Nil 3,195.29
Turnover 2,348.74 692.16
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