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Dalmia Bharat Sugar and Industries Ltd.

BSE: 500097 | NSE: DALMIASUG |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE495A01022 | SECTOR: Sugar

BSE Live

Aug 06, 13:21
126.50 1.55 (1.24%)
Volume
AVERAGE VOLUME
5-Day
31,946
10-Day
24,483
30-Day
22,899
5,196
  • Prev. Close

    124.95

  • Open Price

    126.05

  • Bid Price (Qty.)

    126.50 (63)

  • Offer Price (Qty.)

    126.60 (58)

NSE Live

Aug 06, 13:21
126.55 1.60 (1.28%)
Volume
AVERAGE VOLUME
5-Day
433,527
10-Day
305,040
30-Day
269,328
169,246
  • Prev. Close

    124.95

  • Open Price

    125.70

  • Bid Price (Qty.)

    126.50 (9)

  • Offer Price (Qty.)

    126.55 (590)

Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

The Directors have pleasure in submitting their sixty sixth report on the audited financial statements of the Company for the financial year ended March 31, 2018.

Financial Highlights

(Rs. crore)

Particulars

2017-18

2016-17*

Net Sales Turnover

2270.79

1764.10

Earnings Before Interest, Depreciation, Taxes and Amortization

271.02

402.16

Less: Interest & Financial Charges

69.46

102.49

Profit Before Depreciation and Tax

201.57

299.67

Less: Depreciation

53.69

55.58

Profit Before Tax

147.87

244.09

Less:- Tax

Current Tax

31.52

50.85

Deferred Tax

(17.75)

6.47

Profit After Tax

134.10

186.77

Add:- Surplus brought forward

1,021.78

835.01

Balance available for appropriation

1,155.88

1,021.78

Appropriations

Transferred to General Reserve

19.00

-

Dividend

16.19

-

Dividend Distribution Tax

3.30

-

Balance carried Forward

1,117.39

1,021.78

*Previous financial year figures have been restated as per IND AS.

Operations and Business Performance

The Company has achieved the highest ever turnover however profitability got impacted on account of fall in sugar prices especially in last quarter of the financial year.

During the year under review, the gross revenue of the Company for the financial year 2017-18 has increased by 29% which is RS.2271 Crore as compared to RS.1764 Crore in the previous financial year and the profit before tax for the financial year 2017-18 stood at RS.148 crore as against RS.244 Crore in the previous financial year.

Please refer to the chapter on Management Discussion and Analysis for a detailed analysis of the performance of the Company during the financial year 2017-18. In addition, working results for key businesses have been provided which forms part of this report as Annexure - 1.

The Company continues to be engaged in the same business during the financial year 2017-18. There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

Transfer to Reserves

A sum of RS.19 Crore is proposed to be transferred to the General Reserve of the Company which is an appropriation out of profits of the Company. This reaffirms the inherent financial strength of your Company.

Dividend

Keeping in view the financial outlook and plough back the profits, your Directors have decided not to recommend payment of dividend for the year under review.

Credit Rating

During the financial year 2017-18, ICRA has upgraded the rating for long term facilities of the Company to AA- from A which signifies the high degree of safety regarding timely servicing of financial obligations. ICRA has also reaffirmed the rating for short term facilities of the Company at A1 which is the highest rating in the rating scale of ICRA, signifying very strong degree of safety regarding timely payment of financial obligations.

Board of Directors and its Committees’ Meetings

During the financial year 2017-18, four Board meetings were held. Reference is invited to the Corporate Governance Report, which forms part of this Report, for the details of Board of Directors, its committees and their meetings.

Directors and Key Managerial Personnel

Smt Himmi Gupta, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for reappointment. She has furnished requisite declaration to the effect that she is qualified to be appointed as a Director of the Company.

The Key Managerial Personnel, namely, Shri Jai Hari Dalmia, Vice chairman and Managing Director, Shri Gautam Dalmia, Managing Director and Chief Executive Officer, Shri Anil Kataria, Chief Financial Officer and Smt. Isha Kalra, Company Secretary continue to hold their respective offices during the current financial year.

The independent Directors namely, Shri J.S. Baijal, Shri M. Raghupathy and Shri P. Kannan have given their respective declaration of independence under Section 149 of the Companies Act, 2013. Pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 your Directors proposed to the shareholders in the notice of Annual General Meeting for continuation of the appointment of Shri J. S. Baijal and Shri M. Raghupathy, who has attained the age of 86 years and 81 years respectively, till the term of their original appointment.

A meeting of the Independent Directors excluding all Non Independent Directors and members on the management of the Company was held as mandated by provisions of Part VIII of Schedule IV to the Companies Act, 2013 wherein they inter-alia reviewed the performance of the Non Independent Directors, Chairman and Board as a whole.

The Board members are provided with necessary documents, updates and policies to enable them to familiarise with the Company’s procedures and practices. Periodic presentations on industry, business segments, legal updates and related responsibilities of Directors, are made at the Board meetings of the Company. The details of familiarisation programs for Independent Directors of the Company can be accessed at www.dalmiasugar. com/upload/pdf/Familiarisation-Programme-For-Independent-Directors-2017-18.pdf.

In terms of the requirement of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”), your Board has formulated the Nomination and Remuneration Policy of the Company on Director’s appointment evaluation and remuneration of directors, key managerial personnel and senior managerial personnel of the Company.

The policy provides for the constitution of Nomination and Remuneration committee, role of committee, minimum criteria for appointment and removal of Directors/KMP/SMP, evaluation criteria and remuneration of Director/KMP / SMP

During the year under review the Company has reviewed and revised the said policy in order to streamline the same with the Companies Act, 2013.The Nomination and Remuneration policy of the Company can be accessed at www.dalmiasugar.com/upload/ policies/DBSIL-N&R-Policy.pdf

Annual evaluation of performance of the Board, its Committees and individual Directors

Annual evaluation of performance of the Board, its Committees and individual Directors was carried out by the Board, Nomination and Remuneration Committee and Independent Directors in accordance with the Companies Act, 2013 and the SEBI LODR Regulations. An indicative criteria was circulated to the members of the Board to facilitate such evaluation and same was carried out in terms of the Nomination and Remuneration Policy and such indicative criterion.

It was observed that the Board was well composed in as much as there was a mix of youth and maturity, competencies and experience in the business of the Company as well as other areas like finance, legal, compliance, policy making, etc. and that there was adequate gender and other diversity in the Board. The Board had met the high standards in relation to Corporate Governance as envisaged by the Companies Act, 2013 as well as those provided in the SEBI LODR Regulations and/or the other requirements of the SEBI. The Board functioned as a cohesive team and the decision making was based on due deliberations where views and counter views were encouraged.

It was further observed that the mandate and composition of Committees was clearly defined. The Committees performed their duties diligently and contributed effectively to the decisions of the Board.

All the Directors were performing their role effectively and discharging their responsibilities and obligations efficaciously and had been meeting the high standards of professing and ensuring best practices in relation to overall governance of the Company’s affairs.

Directors’ Responsibility Statement

Your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements 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;

(c) 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 frauds and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Particulars of Remuneration of Directors’, Key Managerial Personnel and Employees’

The particulars of remuneration to Directors and Key Managerial Personnel and other particulars attached as Annexure - 2 and forms part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits is attached as Annexure - 2A and forms part of this report.

Employees’ Stock Option Scheme

The Company has not granted any employee stock options.

Subsidiaries

The report on the financial position of the Company’s Subsidiaries, Himshikhar Investment Limited, Dalmia Solar Power Limited and Dalmia Sugar Ventures Limited, for the year ended March 31, 2018 is attached in Form AOC -1 and forms part of this report as Annexure -3.

The detailed Annual Reports of these subsidiaries are not being enclosed with this Annual Report. Any Member desiring to inspect the detailed Annual Reports of any of the aforementioned subsidiaries may inspect the same at the Registered Office of the Company and that of the subsidiaries concerned. In event a member desires to obtain a copy of the Annual Report of any of the aforementioned subsidiaries, he may write to Company at its Registered Office specifying the name of the subsidiary whose Annual Report is required. The Company shall supply a copy of such Annual Report to such Member. The Annual Report of the aforementioned subsidiaries are available at the Company’s website www.dalmiasugar.com.

During the said financial year no company ceased to be a subsidiary of the Company or its subsidiary. The Company has no Associates or Joint Ventures.

The policy for determining material subsidiaries may be accessed on the Company’s website at www.dalmiasugar.com/upload/policies/ DBSIL-Material-Subsidiary-Policy-Board.pdf.

Consolidated Financial Statements

As required under section 129(3) of the Companies Act, 2013 read with Regulation 33 of the SEBI LODR Regulations and Accounting Standard - 21, this Annual Report also includes Consolidated Financial Statements for the financial year ended March 31, 2018.

Corporate Governance Report

Your Directors believe that corporate governance is an ethically driven business process that is committed to values aimed at enhancing the growth for the Company. Your Company’s corporate governance practices are driven by effective and strong Board oversight, timely disclosures, transparent accounting policies and high levels of integrity in decision making. The Company’s corporate governance practices have been detailed in the Corporate Governance Report and same is attached hereto together with the Auditors’ certificate thereon and forms part of this Report.

Extract of Annual Return

The extract of the annual return is attached in Form MGT-9 giving inter-alia details of shareholding pattern, indebtedness and managerial remuneration and forms part of this Report as Annexure -4.

Corporate Social Responsibility

Your Directors have constituted a Corporate Social Responsibility (“CSR”) Committee responsible to identify, monitor and review CSR activities of the Company and provide strategic direction for implementation of the corporate social responsibility policy of the Company which can be accessed at www.dalmiasugar.com/ upload/policies/DBSIL-CSR-POLICY.pdf.

The Committee decided to expend an amount of RS.1.89 crore on CSR activities covering eradication of extreme hunger and poverty, promotion of education including special education, ensuring environmental sustainability and ecological balance, etc. health, sanitation, education and environment sustainability.

Pursuant to the said policy, the Company has made expenses aggregating to RS.1.98 Crore towards CSR during the financial year 2017-18, which is more than 2% of average net profits of the Company made during three immediately preceding financial years. The annual report on CSR activities is attached as Annexure - 5 and forms part of this Report.

Related Party Policy and Transactions

The Company’s policy on Related Party Transactions may be accessed at the Company’s website at www.dalmiasugar.com/ upload/policies/ DBSIL-RPT-Policy-Board.pdf

During the year under review there was no material contracts or arrangements entered into by the Company with the related parties referred to in section 188(1) of the Companies Act, 2013. Hence, Form AOC-2 is not being attached to this Report.

Risk Management

Your Company has formulated the Risk Management policy that defines the adequate risk management process and procedures, which are based upon business environment, operational controls and compliance procedures. The major risks are assessed through a systematic procedure of risk identification and classification. Risks are prioritized according to significance and likelihood. The purpose of risk management is not to eliminate the risks inherent to the business but to proactively address such risks. The Audit Committee oversees the risk management plan and ensuring its effectiveness.

Whistle Blower Policy and Vigil Mechanism

The Company has in place the whistle blower policy and vigil mechanism for directors, employees and other stakeholders with a view to provide for adequate safeguards against victimisation of stakeholders and provide for direct access to the Chairperson of the Audit Committee in appropriate cases.

The policy can be accessed at the website of the Company at http:// www.dalmiasugar.com/upload/policies/DBSIL-Whistle-Blower-Policy-Vigil-Mechanism.pdf.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

During the year under review, your Company did not receive any complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Investments, Loans and Guarantees

The particulars of investments made by the Company and details of loans given and guarantees given by the Company are furnished in Note Nos. 5(i) and 9(v) of the Standalone Financial Statements of the Company.

Adequacy of Internal Financial Controls

Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has requisite policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control systems are subject to regular reviews, selfassessments and audits and based on such reviews, we believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

Conservation ofEnergy,Technology Absorption and Foreign Exchange Earnings and Outgo

A statement giving details of conservation of energy, technology absorption and foreign exchange earnings and outgo, is given in Annexure - 6 and the same forms part of this Report.

Compliance of Laws and Secretarial standards

The Company is in compliance with the Secretarial Standards on meeting of Board of Directors (SS1) and General Meeting (SS- 2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

Auditors

Statutory Auditors

Your Company at its Sixty Fifth Annual General Meeting held on August 31, 2017 had appointed NSBP & Co, Chartered Accountants (Firm Registration No. 001075N) as Statutory Auditors of the Company up to the conclusion of the Seventieth Annual General Meeting at a remuneration as may be fixed by the Board of Directors on the recommendation of the Audit Committee.

Cost Auditors

HMVN & Associates, Cost Accountants, were appointed as the Cost Auditors of the Company to conduct Cost Audit for the year ended March 31, 2017, and they had submitted the Cost Audit Report for the said year on August 23, 2017.

HMVN & Associates, Cost Accountants, New Delhi, were reappointed as the Cost Auditors to conduct cost audit for the year ended March 31, 2018 and they will be submitting their report in due course of time.

In order to rotate the auditors, the Board of Directors of the Company has appointed R.J. Goel & Co., Cost Accountants, New Delhi, as the Cost Auditors to conduct cost audit for the year ended March 31, 2019 and the remuneration payable to them for conduct of cost audit will be coming up for approval before the Shareholders at the ensuing Annual General Meeting.

Secretarial Auditor and Report Thereon

The Board of Directors of the Company appointed Harish Khurana & Associates, Practising Company Secretaries, as the Secretarial Auditor to conduct the Secretarial Audit for the financial year 2017-18. The Report of the Secretarial Audit is attached in Form MR - 3 and forms part of this report as Annexure - 7.

Comments on Auditors’ Observations

The notes on financial statements referred to in the Auditors’ Report are self-explanatory and do not call for any comments and explanation. During the year under review, the Statutory Auditors have not reported any matter under Section 143 (12) of the Act.

There is no qualification, reservation or adverse remark or disclaimer made by Statutory Auditors/Secretarial Auditors/Cost Auditors in their respective reports.

Public Deposits

The Company has not accepted any deposits from public during the year under review.

Orders Passed By Regulators

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

Health, Safety and Environment

Safety and health of employees and clean environment is the core value of the Company. The world class EHS Management System has already been implemented at all the operations. The endeavour of the Company is to continue safe and healthy environment at all its plants.

Towards this end, regular training programmes are being conducted for all levels of employees. Health and Safety audit was conducted by external auditors during the year. Towards greener environment, the Company and employees have made it a habit to plant more and more trees.

Industrial Relations

The industrial relations during the year under review were harmonious and cordial.

Acknowledgement

Your Directors wish to place on record their appreciation for the assistance and cooperation received from the financial institutions, banks, government authorities, customers, vendors and stakeholders during the year under review. The Directors also wish to place their deep appreciation for the committed services by all the employees of the Company.

For and on behalf of the Board

(J.S. Baijal)

Place: New Delhi Chairman

Dated: May 28, 2018 DIN: 00049565

Director’s Report