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Dhampur Sugar Mills

BSE: 500119|NSE: DHAMPURSUG|ISIN: INE041A01016|SECTOR: Sugar
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Directors Report Year End : Mar '18    Mar 17

To,

The Members,

Dhampur Sugar Mills Limited

The Directors have pleasure in presenting their Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2018.

Financial Results: (Rs. in Crore)

Particulars

Consolidated

Standalone

31st March, 2018

31st March, 2017

31st March, 2018

31st March, 2017

Revenue from operations

3,423.14

2,740.73

3,347.49

2,691.15

Profit before finance costs, tax, depreciation and amortisation, exceptional items and other comprehensive income

381.83

541.14

388.68

545.82

Less: Finance costs

121.52

167.2

121.3

167.02

Less: Depreciation and amortisation expense

57.73

54.27

56.69

53.95

Profit Before Tax

202.58

319.67

210.69

324.85

Provision for Tax

51.32

90.14

53.53

89.98

Profit for the year

151.26

229.53

157.16

234.87

Other comprehensive income (net of tax)

(0.71)

(1.5)

(0.43)

(1.47)

Total comprehensive income for the year

150.55

228.03

156.73

233.40

Operational performance:

The key operational data of the Company is as under: Sugar operations at a glance

31st March, 2018

31st March, 2017

Cane crushed (in lac quintals)

662.01

541.87

Recovery (%)

11.28

10.94

Sugar Produced From Cane ( in lac quintals)

74.82

59.28

Co-generation operations at a glance

31st March, 2018

31st March, 2017

Power generated (M.W.)

734616

642525

Sale to UPPCL (M.W.)

432766

393630

Chemical operations at a glance

Poduction

31st March, 2018

31st March, 2017

RS/ENA/Ethanol ( in lacs BL)

600.40

683.59

Chemicals (net) (in lacs KG)

140.70

146.13

Company’s Performance during FY 2018

Revenue of the Company during the year 2017-18 has improved to RS.3347.49 crores as compared to RS.2691.15 crores during the year 2016 17, witnessing increase of 24.4% mainly due to improved sugar sale volume. Total comprehensive income, earned by the Company during the year is RS.156.73 crores as compared to RS.233.40 crores in previous year due to reduction in sugar sale prices.

The Company crushed 66.20 lakh tonnes of sugarcane during the financial year ended 31st March 2018 as compared to 54.19 lakh tonnes last year. The Sugar Recovery improved to 11.28% during the year from 10.94% in previous year. The Company sold 7.7 lakh tonnes of sugar at an average realisation of RS.35.1/kg as against 5.3 lakh tonnes sugar sold at an average realisation of RS.35.9/kg last year. The Company is working closely with farmers to improve sugar cane yield and cane quality and imparting training on modern agricultural practices. The Company expects improvement in supply of quality of cane due to cane development initiatives, thereby reduction in cost of production of sugar.

The Company generated 73.46 crores units of Power during the financial year 2018 as compared to 64.25 crores units in the previous year. Power exported 43.28 crores units during the financial year ended 31st March 2018 to Uttar Pradesh grid as against 39.36 crores units in previous year. The power realisation stood at RS.5/unit as against RS.5.1/unit last year. Revenues from power segment are expected to improve further due to higher availability of bagasse owing to higher cane crushed.

The Company performed satisfactorily. The Company sold 6.67 crores bulk litres of alcohol during the financial year ended 31st March 2018 as against 6.78 crores bulk litres in previous year. The average realisation stood during the financial year ended 31st March 2018 RS.38.40/bulk litre as against 41.40/ bulk litre in the previous year. The Company has installed incinerator boilers successfully at distilleries in order to achieve zero liquid discharge and generate 11.5 MW power out of effluent resulting in higher asset utilisation. The Company expects to improve its performance further due to higher molasses availability and thrust of the Central Government on the Ethanol Blending Programme.

Performance of Subsidiaries

DIPL (Wholly Owned Subsidiary Overseas)

DIPL (Dhampur International Pte. Ltd.) achieved turnover of RS.91.34 crores for the year ended 31st March 2018 as compared to RS.77.33 crores last year with profit after tax of RS.0.76 crores as compared to Loss of RS.6.30 crores last year. DSML infused fresh capital of USD 4 million in DIPL during the year.

Ehaat Ltd (Wholly Owned Subsidiary)

Ehaat Ltd achieved turnover of RS.5.36 crores for the year ended 31st March 2018 as compared to H NIL last year with loss of RS.5.36 crores as compared to Loss of RS.0.25 crores last year. DSML transferred business of rural distribution of consumer products to Ehaat Ltd on a slump sale basis in consideration of RS.1.67 crores and Ehaat Ltd allotted equity share capital for the same. DSML further invested RS.2.00 crores in equity share capital of Ehaat Ltd during the year.

DETS Ltd (Subsidiary)

DETS Ltd achieved turnover of RS.3.69 crores for the year ended 31st March 2018 as compared to RS.14.13 crores last year with loss of RS.0.91 crores as compared to Profit of RS.0.74 crores last year.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance with the 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 Companies Act, 2013 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 as Annexure-2 and forms an integral part of this Report.

Material Changes and Commitments during the Year

There are no material changes and commitments affecting the financial position of the Company which have occurred between 31st March, 2018 and at the date of the Report, as required under Section 134(3)(l) of the Companies Act, 2013.

However, the Company has transferred its Rural Distribution Business of Consumer Products to its wholly owned subsidiary Ehaat Limited vide Slump Sale Agreement dated 25th May, 2017. The transaction is not material in terms of Company Law Provisions and Listing Regulations.

Change in the Nature of Business

During the year, there was no material change in the nature of business of the Company.

Dividend

The Board of Directors (at its meeting held on 31st January, 2018), had declared interim dividend at 30% i.e. RS.3.00 per Equity Share of RS.10 each.

The Interim Dividend declared by the Board of Directors is proposed to be confirmed as final by Shareholders in the ensuing Annual General Meeting.

Reserves & Surplus

The Company has earned a Net Profit after tax of 157.16 Crores which has been adjusted as per the head Reserve and Surplus and is given in the notes to Financial Statements forming part of this Report.

Directors

Shri Gautam Goel and Shri Sandeep Kumar Sharma shall retire at the ensuing Annual General Meeting and being eligible have offered themselves for their respective re-appointment.

Independent Directors Shri M.P Mehrotra, Shri Priya Brat and Shri Harish Saluja are more than 75 years of age. In terms of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 dated 9th May, 2018 (effective from 01st April, 2019), their continuation as Independent Directors need approval of Shareholders. Accordingly the special resolutions have been placed for approval by shareholders in the ensuing Annual General Meeting.

Profile and other information regarding the directors seeking appointment/reappointment or continuation of term in case of attaining age of more than 75 years as required under Listing Regulations( as amended from time to time) and Secretarial Standards have been given in the Notice convening the Annual General Meeting of the Company.

Key Managerial Personnel

Mr. Arhant Jain retired as Chief financial Officer (CFO) and Company Secretary (CS) of the Company w.e.f. 3rd April, 2017. The Board appreciates his valuable contribution to the Company.

Mr. Nalin Kumar Gupta was appointed as Chief Financial Officer of the Company w.e.f. 25.05.2017.

Ms. Aparna Goel, a member of The Institute of Company Secretaries of India, has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. 25.05.2017.

Deposits

1. Accepted during the year: RS.7.95 crores

2. Remained unpaid or unclaimed (excluding interest thereon) as at the end of the year RS.0.70 Crores

3. If there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved:

a. At the beginning of the year; NIL

b. Maximum during the year; NIL

c. At the end of the year. NIL

Deposits not in compliance with Chapter V of the Act

The Company has not accepted any deposit, not in compliance with Chapter V of the Act.

Particulars of Loans, Guarantees or Investment

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements forming part of this annual report.

Related Party Transactions

All the transactions carried out with Related parties for the year under review were on arm’s length basis and are in compliance with the applicable provisions of the Act and Listing Regulations.

There are no material significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company’s website at http://www.dhampur.com

Your Directors draw attention of the members to Note No. 44 of the Financial Statement which sets out related party disclosures.

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 and Rules made there under are not attracted. Thus disclosure in Form AOC 2 in terms of Section 134 of Companies Act, 2013 is not required.

Credit Rating:

CARE Ratings, a Credit Rating Agency vide its letter dated 23rd August, 2017 has revised and upgraded the Credit Rating of the Company from Care BBB (Triple B Plus)” with Stable Outlook to Care A- (Single A Minus;) with Stable Outlook for Long Term/Short Term Credit Facilities from banks and Fixed Deposits accepted by the Company respectively.

Auditors :-

Statutory Auditors and their Audit Report:

M/s. TR Chadha & Co., Chartered Accountants (ICAI Firm Registration number 006711N/N500028) and M/s. Atul Garg & Associates, Chartered Accountants, (ICAI Firm Registration number 01544C) are Joint Statutory Auditors of the Company and shall continue to be Statutory Auditors till the conclusion of Eighty Seventh Annual General Meeting to be held in the year 2022. The report given by the Auditors on the Standalone and Consolidated Financial Statements of the Company for the year ended 31st March, 2018 forms part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their reports.

The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Companies Act, 2013 and therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Companies Act, 2013.

Cost Auditors

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, The Board of Directors, on the recommendation of Audit Committee, has re-appointed Shri S.R. Kapur, Cost Accountant, Khatauli as Cost Auditor to audit the cost accounts of the Company for the Financial Year 2018-19. As required under Companies Act, 2013 the remuneration payable to Cost Auditor is required to be placed before the members in Annual General Meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to Shri. S. R. Kapur, Cost Auditor is included in the Notice convening Annual General Meeting.

Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013, The Board of Directors, on the recommendation of Audit Committee has re-appointed M/s D.C Chhajed, Chartered Accountants, New Delhi as Internal Auditors of the Company for the Financial Year 2018-19.

Internal Control Systems And Their Adequacy

The details in respect of Internal Control system and their adequacy are included in the Management Discussion and analysis, report which is a part of this report.

Secretarial Auditors and Secretarial Audit Report

Pursuant to the provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company has appointed M/s. GSK & Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure 3 and forms an integral part of this report.

There is no secretarial audit qualification for the year under review. Management Discussion and Analysis

The Management Discussion and Analysis Report on the operations of the Company, as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.

Corporate Governance

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Section on Corporate Governance practices followed by the Company, together with a certificate from M/s. GSK & Associates, a firm of Company Secretaries in Practice, confirming compliance forms an integral part of this Report.

Compliance with Secretarial Standards

The Institute of Company Secretaries of India, a Statutory Body, has issued Secretarial Standards on various aspects of corporate law and practices. The Company has complied with each one of them.

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 your directors state that:

(a) In the preparation of the annual accounts, the Company has adopted Ind AS notified under Companies (Indian Accounting Standard) Rule, 2015. The adoption of Ind AS was carried out in accordance with Ind AS using April 01,2016 as the transition date. Restatement of previous year figures presented in the Financial Statements in accordance with the notification dated 16th February, 2015, issued by the Ministry of Corporate Affairs,. Accordingly, the Financial Statements, forming part of the Annual Report, have been prepared in accordance with Ind AS prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016. The Company has adopted all the applicable Ind AS and the adoption was carried out in accordance with Ind AS 101 (First time adoption of Indian Accounting Standards).

(b) 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 and Loss (including other comprehensive income) 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud 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 operating effectively; and

(f) 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.

Declaration by Independent Directors

The Company has received declaration from all Independent Directors as under in accordance with the provisions of Section 149(6) of Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

1. Shri M.P Mehrotra

2. Shri Priya Brat

3. Shri Ashwani K Gupta

4. Shri Harish Saluja

5. Shri Rahul Bedi

6. Smt Nandita Chaturvedi

Committees of the Board

The Board of Directors has the following Committees:

Mandatory Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders’ Relationship Committee

4. Corporate Social Responsibility Committee (CSR Committee)

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report forming part of this report.

Non Mandatory Committees:

1. The Company has also constituted a committee named Finance Sub Committee, in order to carry out routine functions of the Company. The Committee met 11 (eleven) times during the year 2017-18.

2. The Company has also formed Risk Management Committee for the purpose of Risk Management by the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and applicable Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the evaluation of its own performance and that of the Board Committees, viz. Audit Committee, Nomination and Remuneration Committee, CSR Committee and Stakeholders’ Relationship Committee as well as evaluation of the performance of Directors individually. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, corporate governance practices and stakeholders’ interests, etc. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, meeting risk management and competition challenges, compliance and due diligence, financial control, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of all the Directors including Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. The Nomination and Remuneration Committee also carried out evaluation of every Director’s performance, after laying down criteria for evaluation by way of the aforesaid structured questionnaire. The Directors expressed satisfaction with the evaluation process and results thereof.

Nomination and Remuneration Policy:

The Board of Directors have framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. Details of this policy are set out in the Corporate Governance Report which forms a part of this Report. The remuneration policy is in consonance with the existing policy of the Company.

Risk Management Policy

Risk Management Policy of the Company is in place for Risk assessment and mitigation. Risk procedures are periodically reviewd to ensure control on Risk through properly defined framework. The Companies Risk Management strategy is integrated with its overall business strategies and is communicated throughout the organisation. The Policy facilitates in identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks.

Vigil Mechanism/Whistle Blower Policy

The Company has formulated Vigil Mechanism /Whistle Blower Policy for employees and Directors in order to keep high standards of ethical behaviour and provide safeguards to whistle blower.

The Vigil Mechanism/Whistle Blower Policy as approved by the Board is uploaded on the Company’s website at http://www.dhampur.com

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

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed during the year 2017-18.

No. of complaints received Nil

No. of complaints disposed Nil

Corporate Social Responsibility (CSR)

The composition of CSR committee is as under:

1. Shri V.K Goel, Chairman

2. Shri Gaurav Goel, Member

3. Shri M.P. Mehrotra, Member

The Annual Report on CSR activities is attached as per Annexure - 4

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Details of conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134 (3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure-5 and forms an integral part of this Report.

Extract of Annual Return

According to the provisions of Section 92(3) of the Companies Act, 2013 the prescribed Form MGT-9 (Extract of Annual Return) is attached as per Annexure-6.

Details of Board Meetings held during the year

The Board of Directors met four times during the Financial Year 2017-18. Details of the Board Meetings and attendance at the meetings held during the Financial Year 2017-18 forms part of the Corporate Governance Report.

Significant and Material Orders Passed By The Regulators Or Courts Or Tribunals Impacting The Going Concern Status And Company’s Operations In Future

There was no such order passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

Statutory Information

The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 1 and forms an integral part of this Report. A statement furnishing the names ofTop Ten employees in terms of remuneration drawn and persons employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure -7 and forms an integral part of this Report.

The above annexure is not being sent along with this Annual Report to the Members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered office of the Company, twenty one days before and upto the date of the ensuing Annual General Meeting during the business hours on working days.

None of the employees listed in the said annexure is a relative of any Director of the Company. None of the employees hold (by himself or alongwith his spouse and dependent children) more than two percent of the Equity Shares of the Company.

Acknowledgements:

Your Directors place on record their acknowledgement and sincere appreciation to the shareholders for their confidence in the Management of the Company, the Central Government, the State Government, banks and financial institutions for their continued support, the cane growers for their efforts in ensuring timely cane supply, the Company’s officers and staff for their relentless and dedicated efforts, resulting in the Company’s growth and look forward to a bright future.

For and on behalf of the Board

Place: New Delhi V. K. Goel

Dated: 9th May, 2018 Chairman

(DIN:-00075317)

Source : Dion Global Solutions Limited
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