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Dhampur Sugar Mills Ltd.

BSE: 500119 Sector: Agri and agri inputs
NSE: DHAMPURSUG ISIN Code: INE041A01016
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VOLUME 33051
52-Week high 308.85
52-Week low 96.05
P/E 6.99
Mkt Cap.(Rs cr) 1,911
Buy Price 0.00
Buy Qty 0.00
Sell Price 287.20
Sell Qty 75.00
OPEN 292.60
CLOSE 292.60
VOLUME 33051
52-Week high 308.85
52-Week low 96.05
P/E 6.99
Mkt Cap.(Rs cr) 1,911
Buy Price 0.00
Buy Qty 0.00
Sell Price 287.20
Sell Qty 75.00

Dhampur Sugar Mills Ltd. (DHAMPURSUG) - Director Report

Company director report

To

The Members

Dhampur Sugar Mills Limited

The directors have pleasure in presenting their Annual Report of the company togetherwith the Audited accounts for the period ended on 31st March 2017.

Financial Results:

(Rs in Crore)

Consolidated Standalone
Particulars 31st March 2017 31st March 2016 31st March 2017 31st March 2016
Gross Income 2608.16 2257.71 2558.61 2207.44
Profit Before Interest and Depreciation 537.46 245.18 542.16 240.73
Finance Charges (167.02) (158.65) 167.02 158.63
Gross Profit 896.29 521.71 885.20 518.52
Provision for Depreciation (53.95) (55.14) 53.95 54.86
Net Profit Before Tax 315.99 31.39 312.19 37.46
Provision for Tax (78.16) (5.51) (78.15) (5.51)
Net Profit After Tax 236.70 25.88 243.04 31.95
Balance of Profit brought forward (62.96) (74.25) (51.30) (68.66)
Balance available for appropriation 173.74 (48.37) 191.74 (36.71)
Proposed Dividend on Equity Shares (23.24) 0.00 (23.24) 0.00
Tax on proposed Dividend (4.73) 0.00 (4.73) 0.00
Transfer to General Reserve (75.00) 0.00 (75.00) 0.00
Other Appropriations (44.01) (14.59) (44.29) (14.59)
Surplus carried to Balance Sheet 26.76 (62.96) 44.48 (51.30)

Operational performance:

The key operational data of sugar/co-generation/chemical units are as follows:

Sugar operations at a glance
31st March 2017 31st March 2016
Cane crushed (lac-qtls.) 541.87 483.05
Recovery (per cent) 10.94 10.53
Sugar Produced From Cane (lac-qtls.) 59.28 50.88
Co-generation operations at a glance
Power generated (M.W.) 642525 660233
Sale to UPPCL (M.W.) 393630 430691
Chemical operations at a glance
Production
RS/ENA/Ethanol ( in lacs BL) 683.59 710.25
Chemicals (net) (in lacs KG) 146.13 138.53

Subsidiaries Joint Ventures or Associate Companies

The financial statements of Dhampur International Pte Limited DETS Limited and EhaatLimited subsidiaries of the Company is annexed as Annexure 2 and forms an integral partof this report.

Material Changes and Commitments during the Year

There are no material changes and commitments affecting the financial position of thecompany which have occurred between 31st March 2017 and the date of the report asrequired under Section 134(3)(l) of the Companies Act 2013.

However the company has transferred its ‘Rural Distribution Business of ConsumerProducts' to its wholly owned subsidiary Ehaat Limited vide Slump Sale Agreement dated25th May 2017. The transaction is not material in terms of company law provisions andListing Regulations.

Change in the Nature of Business

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

Dividend

Your directors recommend dividend of Rs3.50 per equity share of Rs10 each for the yearending 31st March 2017. During the year Interim dividend of Rs2.50 per equity share ofRs10 each was also paid. So the total dividend for the year is Rs6.00 per equity share ofRs10 each.

Reserves & Surplus

The Company has earned a Net Profit after tax of Rs243.04 Crore which has been adjustedin the Surplus/(Deficit) under the head

Reserves & Surplus. The Reserves & Surplus now amounted to Rs890.72 Crores asat 31st March 2017.

Equity Share Capital

During the current financial year the Company has issued and allotted 6172655 equityshares of Rs10 each at a premium of Rs88.68 per equity share by way of QualifiedInstitutional Placement.

Directors

Shri Vijay Kumar Goel Shri Ashok Kumar Goel and Shri Gaurav Goel will retire at theensuing Annual General Meeting and being eligible have offered themselves for theirrespective re-appointment.

During the year Shri Anoop Kumar Wahi was appointed as Nominee Director of PunjabNational Bank in place of Shri D.L Mittal.

It has been proposed to change the Remuneration and terms of appointment of Shri V.KGoel Chairman Shri A.K Goel Vice Chairman Shri Gaurav Goel Shri Gautam Goel ManagingDirectors and Shri Sandeep Kumar Sharma Whole Time Director subject to approval ofshareholders in the ensuing annual general meeting of the Company.

Brief profile of Shri Vijay Kumar Goel Shri Ashok Kumar Goel Shri Gaurav Goel ShriGautam Goel and Shri Sandeep Sharma has been given in the Corporate Governance formingpart of the Annual Report.

Key Managerial Personnel

Shri Gaurav Goel and Shri Gautam Goel are the Managing Directors of the Company andShri Nalin K Gupta is Chief Financial Officer and Ms Aparna Goel is Company Secretary ofthe Company.

Deposits

1. Accepted during the year : Rs21.21 crores

2. Remained unpaid or unclaimed (excluding interest thereon) as at the end of the yearRs0.70 Crores

3. If there has been any default in repayment of deposits or payment of interestthereon 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 theyear. Nil

Deposits not in compliance with Chapter V of the Act

The Company has not accepted any deposit which is not in compliance with chapter V ofthe Act.

Particulars of Loans Guarantees or Investment

Details of Loans Guarantees and Investments covered under the provisions of section186 of the Companies Act 2013 are given in the notes to Financial Statements.

Related Party Transactions

All the transactions carried out with Related parties for the year under review were onarm's length basis and are in compliance with the applicable provisions of the Act andListing Regulations.

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

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

Your directors draw attention of the members to Note No. 33 of the Financial Statementwhich sets out related party disclosures.

Auditors and Auditors' Report

Pursuant to provisions of Section 139 (2) of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 Regulation 18 of SEBI (LODR) Regulations 2015and other applicable provisions (including any modification or re-enactment thereof ) ifany of the Companies Act 2013 the term of existing auditors i.e. M/s Mittal Gupta &Company Chartered Accountants Kanpur will conclude and they will retire at theconclusion of forthcoming Annual General Meeting of the Company.

The Board of Directors places on record its appreciation to the services rendered byMessrs Mittal Gupta & Company as the Statutory Auditors of Company.

SubjecttotheapprovaloftheMemberstheBoardhasrecommended appointment of 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 )as Joint Statutory Auditors of the Company .

Cost Auditor

As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time The Board of Directors on the recommendation of AuditCommittee has appointed Shri S.R. Kapur Cost Accountant Khatauli as Cost Auditor toaudit the cost accounts of the Company for the financial year 2017-18. As required underthe Companies Act 2013 a resolution seeking member's approval for the remunerationpayable to the Cost Auditor forms part of the Notice convening the Annual General Meetingfor their ratification.

Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act 2013 The Board ofDirectors on the recommendation of Audit Committee has appointed M/s D.C ChhajedChartered Accountants New Delhi as Internal Auditors of the Company for the financialyear 2017-18.

Internal Control Systems And Their Adequacy

The details in respect of Internal Control system and their adequacy are included inthe Management Discussion and analysis 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 thereunder the Company has appointed GSK & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company. The Secretarial Audit Reportis 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 asrequired under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isprovided in a separate section and forms an integral part of this Report.

Corporate Governance:

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate section on corporate governance practices followed by the Company together witha certificate from the Company's Auditors confirming compliance forms an integral part ofthis Report.

Directors Responsibility Statement:

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

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany and that such Internal Financial Controls are adequate and operating effectively;and

(f ) the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

Declaration by Independent Directors

The Company has received declaration from following Independent Directors in accordancewith the provisions of Section 149(6) of the Act:

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: 1. Audit Committee 2. Nominationand 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 andattendance at the meetings are provided in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and applicable Regulations of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out the performance evaluation of its own performance and of the Board Committeesviz. Audit Committee Nomination and Remuneration Committee CSR Committee andStakeholders' Relationship Committee as well as evaluation of performance of Directorsindividually. A structured questionnaire was prepared after taking into considerationinputs received from the Directors covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board cultureexecution and performance of specific duties obligations corporate governance practicesand stakeholders' interests etc. A separate exercise was carried out to evaluate theperformance of individual Directors including the Chairman of the Board who wereevaluated on parameters such as level of engagement and contribution independence ofjudgement meeting risk management and competition challenges compliance and duediligence financial control safeguarding the interest of the Company and its minorityshareholders etc.

The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors. The Nomination and Remuneration Committee alsocarried out evaluation of every director's performance. The Directors expressedsatisfaction with the evaluation process.

Nomination and Remuneration Policy:

The Board of Directors have framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The details of this policy are explained in the Corporate Governance which forms a part ofthis Report. The remuneration policy is in consonance with the existing policy of theCompany.

Risk Management Policy

The Company has Risk Management committee of Directors to have a system of RiskManagement inter alia to review it periodically. A detailed note on risk managementpolicy elements of risk and its mitigation is comprised in Management Discussions andAnalysis which forms part of this Report.

Vigil Mechanism/Whistle Blower Policy

The Company has formulated Vigil Mechanism /Whistle Blower Policy for employees andDirectors to keep high standards of ethical behaviour and provide safeguards to whistleblower.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

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

The following is a summary of sexual harassment complaints received and disposed offduring the year 2016-17

No. of complaints received Nil
No. of complaints disposed off Nil

Corporate Social Responsibility

The composition of CSR committee is as under :

1. Shri V.K Goel Chairman

2. Shri Gaurav Goel Member

3. Shri Ashwani K Gupta Member

The Annual Report on CSR initiatives is attached as per Annexure – 4

Conservation of energy technology absorption foreign exchange earnings and outgo

The details of conservation of energy techonology absorption foreign exchangeearnings and outgo pursuant to Section 134 (3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is annexed as Annexure-5 and forms anintegral part of this report.

Extract of Annual Return

According to the provisions of section 92(3) the prescribed Forms MGT-9 (Extract ofAnnual Return) is attached as per Annexure-6.

Details of Board Meetings held during the year

Details of the Compositions of the Board Meeting and the attendance at the meetingsheld during the financial year 2016-17 forms the part of the Corporate Governance Report.

Significant And Material Orders Passed By The Regulators Or Courts Or TribunalsImpacting The Going Concern Status And Company's Operations In Future

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

Statutory Information

The Disclosure required under Section 197(12) of the Companies Act 2013 read with theRule 5(1) of the Companies ( Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as Annexure 1 and forms an integral part of this report. A statementcomprising the names of Top Ten employees in terms of remuneration drawn and every personsemployed throughout the year who were in receipt of remuneration in terms of Rule 5(2) ofthe Companies ( Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed 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 ofthe Company in line with the provisions of Section 136 of the Companies Act 2013. Memberswho are interested in obtaining these particulars may write to the Company Secretary atthe Registered office of the Company twenty one days before and upto the date of theensuing 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 theCompany. None of the employees hold (by himself or alongwith his spouse and dependentchildren ) more than two percent of the Equity Shares of the Company.

Acknowledgements:

Your Directors place on record their acknowledgement and sincere appreciation to theshareholders for their confidence in the Management of the Company the CentralGovernment the State Government banks and financial institutions for their continuedsupport the cane growers for their efforts in ensuring timely cane supply the Company'sofficers and staff for their relentless and dedicated efforts resulting in the Company'sgrowth and look forward to a bright future.

For and on behalf of the Board
Place: New Delhi V. K. Goel
Dated: 25th May 2017 Chairman

Annexure - 1

Disclosure in Directors' Report pursuant to Section 197(12) of the Companies Act 2013read with the Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year

Name of the director Designation DIN Ratio
Shri Vijay Kumar Goel Promoter Chairman and Whole-time director 00075317 44.85:1
Shri Ashok Kumar Goel Promoter Vice Chairman and Whole-time director 00076553 38.15:1
Shri Gaurav Goel Promoter and Managing Director 00076111 38.15:1
Shri Gautam Goel Promoter and Managing Director 00076326 33.25:1
Shri Mahesh Prasad Mehrotra Independent Director 00016768 NA
Shri Priya Brat Independent Director 00041859 NA
Shri Ashwani Kumar Gupta Independent Director 00108678 NA
Shri Anoop Kumar Wahi Nominee Director 07542990 NA
Shri Harish Saluja Independent Director 01233800 NA
Shri Rahul Bedi Independent Director 02573535 NA
Shri Sandeep kumar Sharma Whole Time Director 06906510 6.56:1
Ms. Nandita Chaturvedi Independent Director 07015079 NA

2. Percentage increase in remuneration of each director and CEO in the financial year

Name of the director/CEO/CFO/CS Designation DIN/PAN Percentage increase
Shri Vijay Kumar Goel Promoter Chairman and Whole-time director 00075317 25.58%
Shri Ashok Kumar Goel Promoter Vice Chairman and Whole-time director 00076553 5.33%
Shri Gaurav Goel Promoter and Managing Director 00076111 5.31%
Shri Gautam Goel Promoter and Managing Director 00076326 (9.14%)
Shri Mahesh Prasad Mehrotra Independent Director 00016768 NA
Shri Priya Brat Independent Director 00041859 NA
Shri Ashwani Kumar Gupta Independent Director 00108678 NA
Shri Anoop Kumar Wahi Nominee Director 07542990 NA
Shri Harish Saluja Independent Director 01233800 NA
Shri Rahul Bedi Independent Director 02573535 NA
Shri Sandeep kumar Sharma Whole Time Director 06906510 NA
Ms. Nandita Chaturvedi Independent Director 07015079 NA
Shri Arhant Jain CFO and CS ADNPJ0729P -

3. Percentage increase in the median remuneration of employees in the financial year:7.02%

4. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: 17.4 : 8.14(Excluding commission on profits)

5. Number of permanent employees on the rolls of company: Permanent Employees–"2934"

6. The key parameters for any variable component of remuneration availed by thedirectors : Commission on Net Profits of the Company to be paid to Promoter Directors :Rs1938 Lacs

7. Affirmation that the remuneration is as per the remuneration policy of the Company :

The Company affirms that the remuneration is as per the remuneration policy of theCompany .

Annexure - 2

FORM NO. AOC.1

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

(Information in respect of each subsidiary to be presented with amounts in H in Crores)

1. Name of the subsidiary: Dhampur International PTE Limited Ehaat Limited and DETSLimited

2. Reporting period for the subsidiaries concerned: - 1st April 2016 to 31st March2017.

3. Reporting currency and Exchange rate as on the last date of the relevant Financialyear in the case of foreign subsidiaries:- USD (1 USD

= Rs64.83)

4. Other Information:-

Particulars Dhampur International PTE* Limited (Rs in Crores) DETS Limited** ( In Crores) Ehaat Limited*** ( In Crores)
Share capital 10.80 0.84 0.10
The date since when subsidiary was acquired 09.07.2009 03.10.2016 24.10.2016
(Since incorporation) (Since incorporation)
Shareholding (in Percentage) 100% 51% 100%
Reserves & surplus (17.49) 2.95 (0.25)
Total assets 24.20 5.66 0.07
Total Liabilities 30.89 2.22 0.22
Investments NIL 1.30 NIL
Turnover (Previous Year) 77.98 (194.37) 13.67 (NIL) NIL (NIL)
Profit/(Loss) before taxation (6.31) 0.87 (0.25)
Provision for taxation NIL 0.16 NIL
Profit after taxation (6.31) 0.71 (0.25)
Proposed Dividend NIL NIL NIL
% of shareholding 100% 51% 100%

i) Name of subsidiaries which are yet to commence operations: N.A ii) Name ofSubsidiaries which have been liquidated or sold during the year: N.A * Based at SingaporeTrading in Commodities.

** Manufacturing and fabricating plant and machineries equipments used in sugarindustry.

*** Trading in Consumer Products.

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures: The Company has no associate or joint venture.

Annexure - 5

THE DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSAND OUTGO ARE AS FOLLOWS:

A) Conservation of energy:

(i) the steps taken or impact on conservation of energy;

The Company is continuously working on conservation of energy through innovativemeasures. The Company is in process of installation of additional spent wash fired boilerat two of its unit at Dhampur and Asmoli. The boiler will use spent wash as fuel (apartfrom bagasse) which will result in less bagasse consumption in the boiler leading toadditional bagasse saving for the same steam generation.

(ii) the steps taken by the company for utilising alternate sources of energy;

The Company is producing renewable energy not only for its captive consumption but isalso exporting power to state.

(iii) the capital investment on energy conservation equipment's; Nil

Power and fuel consumption

31st March 2017

31st March 2016

1 Electricity
A Purchased:
Units (kwh)

6577928

4606385

Total Value (H)

56474427

34808185

Rate (H/Unit)

8.59

7.56

B Own generation :
i. Through diesel generator:
Units (Kwh)

146365

175365

Unit per liter of diesel

2.77

2.76

Cost/ unit

19.61

19.52

ii. Through steam turbine:
Units (Kwh)

173560787

166951800

Unit per liter of fuel /oil/gas : Steam produced mainly by use of own and purchased bagasse paddy husk and coal
2 Coal
Quantity (tonnes)

2259.32

891.33

Total cost (H in lac)

138.75

60.26

Average rate (H/ tonnes)

6141.00

6761

3 Furnace oil
Quantity (lts.)

-

-

Total cost (H)

-

-

Average rate

-

-

4 Other/ Internal generation:
Quantity (tonnes)

-

-

Total cost (H)

-

-

Average rate

-

-

II Consumption per unit of production
A Sugar (qtls.)

5924246

5190606
- Electricity (Kwh/ qtls.)

30.43

33.09
- Furnace oil

-

-
- Coal (tonnes)

-

-
B Chemical (qtls.)
- Electricity (Kwh/ qtls.)

24.44

27.17
- Furnace oil -
- Coal (tonnes) -

(B) Technology absorption:

(i) the efforts made towards technology absorption; N.A

(ii) the benefits derived like product improvement cost reduction product developmentor import substitution; N.A (iii) in case of imported technology (imported during the lastthree years reckoned from the beginning of the financial year)- (a) the details oftechnology imported; N.A

(b) the year of import; N.A

(c) whether the technology been fully absorbed; N.A

(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; N.A and

(iv) the expenditure incurred on Research and Development: Rs7.69 crore compared withprevious year's Rs7.12 crore.

(C) Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.

( Rs in Cr.)
Particulars Current Year Previous Year
Export and foreign exchange earnings 35.99 166.69
Imports and expenditure in foreign currency 23.90 137.86