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Dhampur Sugar Mills Ltd.

BSE: 500119 Sector: Agri and agri inputs
NSE: DHAMPURSUG ISIN Code: INE041A01016
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OPEN 255.70
PREVIOUS CLOSE 253.35
VOLUME 87815
52-Week high 289.45
52-Week low 96.05
P/E 6.01
Mkt Cap.(Rs cr) 1,645
Buy Price 247.85
Buy Qty 40.00
Sell Price 0.00
Sell Qty 0.00
OPEN 255.70
CLOSE 253.35
VOLUME 87815
52-Week high 289.45
52-Week low 96.05
P/E 6.01
Mkt Cap.(Rs cr) 1,645
Buy Price 247.85
Buy Qty 40.00
Sell Price 0.00
Sell Qty 0.00

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 2016.

Financial Results: (Rs in Cr.)
Particulars Current Year for the Previous Year for the
Period 2015-16 Period 2014-15*
Total Income 2275.41 1841.92
Less-Expenditure during the year 2024.46 1688.80
Profit/(Loss) before Depreciation Interest & tax 250.95 153.12
Less- Depreciation 54.86 55.15
Less- Interest 158.63 149.66
Less- Provision For Tax & Adjustments 5.51 (41.33)
Net Profit/(Loss) 31.95 (10.36)

*Figures have been re-grouped wherever considered necessary.

Operational performance:

Sugar units:

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

Sugar operations at a glance
31st March 2016 31st March 2015
Cane crushed (lac-qtls.) 483.05 458.22
Recovery (per cent) 10.53 9.51
Sugar Produced From Cane (lac-qtls.) 50.88 43.57

 

Co-generation operations at a glance
31st March 2016 31st March 2015
Power generated (M.W.) 660233 570576
Sale to UPPCL (M.W.) 430691 373076

 

Chemical operations at a glance
31st March 2016 31st March 2015
RS/ENA/Ethanol ( in lacs BL) 710.25 371.94
Chemicals (net) (in lacs KG) 138.53 245.35

Subsidiaries Joint Ventures or Associate Companies

The financial statement of Dhampur International Pte Limited subsidiary of the Companyis annexed as Annexure 1 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 thecompany which have occurred between 31.03.2016 and the date of the report as requiredunder Section 134(3)(l) of the Companies Act 2013.

Change in the Nature of Business

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

Dividend

Your directors do not recommend any dividend for the year ending 31st March 2016 due toaccumulated losses.

Reserves & Surplus

The Company has earned a Net Profit after tax of Rs31.95 Crore which has been adjustedin Profit and Loss Account under the head Reserves & Surplus. The Reserves &Surplus now amounted to Rs647.05 Crores as at 31st March 2016.

Equity Share Capital

During the financial year 1500000 Equity shares of Rs 10/- each at a premium of Rs23/-per share have been allotted on conversion of 1500000 equity share warrants.

Directors

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

During the year Shri D.L Mittal was appointed as Nominee Director of Punjab NationalBank in place of Shri S.K Wadhwa.

Brief profile of Shri Gaurav Goel Shri Gautam Goel and Shri Sandeep

Kumar Sharma has been given in the Corporate Governance forming part of the AnnualReport.

Key Managerial Personnel

Shri Gaurav Goel and Shri Gautam Goel are the Managing Directors of the Company andShri Arhant Jain is Chief Financial Officer and Company Secretary of the Company.

Deposits

1. Accepted during the financial year 2015-16: Rs 13.67 crores

2. Remained unpaid or unclaimed as at the end of the year Rs0.16 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 the year. 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 Actand Listing Agreement.

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. 34 of the Financial Statementwhich sets out related party disclosures.

Auditors and Auditors’ Report

M/s Mittal Gupta & Co. Chartered Accountants Kanpur the auditors of your Companywill retire at the ensuing Annual General Meeting and being eligible are proposed to bere-appointed.

The observations of the Auditors in their report read with the accounts areself-explanatory.

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 2 and forms an integral part of this report.

There is no secretarial audit qualification for the year under review.

Corporate Governance:

In compliance with Regulation 17 to 27 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a detailed Corporate Governance Report has been givenelsewhere in this report along with the Management discussion and analysis report whichform an integral part of the Annual Report.

A certificate from GSK & Associates a firm of Company Secretaries in Practiceconfirming compliance by the Company with the conditions of Corporate Governance asstipulated under part E of Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 is attached to this 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 Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with the new/revised standard operating procedures.

(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 all independent directors in accordance withthe provisions of Section 149(6) of the Act whose names are as under:

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

Audit Committee

Details of the composition of the Audit Committee and the attendance at the meetingsheld during the financial year 2015-16 forms part of the Corporate Governance Report.

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.

Vigil Mechanism/Whistle Blower Policy

The Company has formulated a Vigil Mechanism /Whistle Blower Policy for employees andDirectors to ensure high standards of ethical behavior and to provide safeguards towhistle blower.

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 the 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 etc.) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2015-16

No. of complaints received Nil
No. of complaints disposed of 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 intiatives is attached as per Annexure - 3

Conservation of energy technology absorption foreign exchange earnings and outgo

The details of conservation of energy techonology abosorption foreign exchangeearnings and outgo are given in the Annexure-4 attached to 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-5.

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 2015-16 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.

Managerial Remuneration

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year 2015-16 is given below:

Name of the director Designation DIN Ratio
Shri Vijay Kumar Goel Promoter Chairman and Whole-time director 00075317 39.73:1
Shri Ashok Kumar Goel Promoter Vice Chairman and Whole-time director 00076553 39.73:1
Shri Gaurav Goel Promoter and Managing Director 00076111 40.03:1
Shri Gautam Goel Promoter and Managing Director 00076326 40.03:1
Shri Mahesh Prasad Mehrotra Independent Director 00016768 NA
Shri Priya Brat Independent Director 00041859 NA
Shri Ashwani Kumar Gupta Independent Director 00108678 NA
Shri Sudarshan Kumar Wadhwa* Nominee Director 05327641 NA
Shri Harish Saluja Independent Director 01233800 NA
Shri Rahul Bedi Independent Director 02573535 NA
Shri Sandeep kumar Sharma Whole Time Director 06906510 7.94:1
Ms. Nandita Chaturvedi Independent Director 07015079 NA
Shri D. L. Mittal (appointed w.e.f 07.11.2015) Nominee Director 06469972 NA

*(ceased w.e.f 07.11.2015)

2. Percentage increase in remuneration of each director and CEO/CFO/CS in the financialyear

Name of the director/CEO/CFO/CS Designation DIN/PAN Percentage increase
Shri Vijay Kumar Goel Promoter Chairman and Whole-time director 00075317 64.98%
Shri Ashok Kumar Goel Promoter Vice Chairman and Whole-time director 00076553 64.98%
Shri Gaurav Goel Promoter and Managing Director 00076111 63.23%
Shri Gautam Goel Promoter and Managing Director 00076326 63.23%
Shri Mahesh Prasad Mehrotra Independent Director 00016768 NA
Shri Priya Brat Independent Director 00041859 NA
Shri Ashwani Kumar Gupta Independent Director 00108678 NA
Shri Sudarshan Kumar Wadhwa* Nominee Director 05327641 NA
Shri Harish Saluja Independent Director 01233800 NA
Shri Rahul Bedi Independent Director 02573535 NA
Shri Sandeep kumar Sharma Whole Time Director 06906510 3.50%
Ms. Nandita Chaturvedi Independent Director 07015079 NA
Shri D. L. Mittal (appointed w.e.f 07.11.2015) Nominee Director 06469972 NA
Shri Arhant Jain CFO and CS ADNPJ0729P 4.96%

*(ceased w.e.f 07.11.2015)

3. Percentage increase in the median remuneration of employees in the financial year :5.07%

4. Number of permanent employees on the rolls of company Permanent Employees : 2596

5. Explanation on the relationship between average increase in remuneration and companyperformance: The Company is giving statutory increment to its employees and workerswhenever applicable and as per HR practice of the Company irrespective of the performanceof the Company.

The whole Time Directors Shri. Vijay Kumar Goel Shri Ashok Kumar Goel Shri GauravGoel are also being paid commission linked to Company’s profit computed in terms ofSection 198 of the Companies Act 2013 and rules made there under.

Comparison of the remuneration of the Key Managerial Personnel against the performanceof the company: The Remuneration being paid to Managing Directors is within the limits ofSchedule V to the Companies Act 2013. Remuneration of Shri Gaurav Goel also comprisescommission which is linked to profits of the Company in terms of Section 198 of theCompanies Act 2013.

The Remuneration of Mr. Arhant Jain is revised as per normal HR policy of the Company

6. The key parameters for any variable component of remuneration availed by thedirectors : Commission on Net Profits of the Company to be paid to them: Rs42 Lacs

7. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year : NA

8. There was no employee of the company who was in receipt of remuneration in excess ofRs60 Lakhs and holding 2% or more of equity share capital of the company except ShriGaurav Goel and Shri Gautam Goel Managing Directors 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 theCompany’s officers and staff for their relentless and dedicated efforts resulting inthe Company’s growth and look forward to a bright future.

For and on behalf of the Board
Place: New Delhi V. K. Goel
Dated:10.05.2016 Chairman

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SECRETARIAL AUDIT REPORT

FOR THE YEAR ENDED 31ST MARCH 2016

[Pursuant to section 204(1) of the Companies Act 2013 and Rule no. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Dhampur Sugar Mills Limited

Distt. Bijnor Dhampur – 246761 Uttar Pradesh

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practice by DHAMPUR SUGAR MILLS LIMITED(CIN: L15249UP1933PLC000511) (hereinafter called the company). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the year ended on 31st March 2016 complied with the statutory provisions listedhereunder and also that the Company has proper Board-processes and compliance-mechanism inplace to the extent in the manner and subject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the year ended on 31stMarch 2016 according to theprovisions of:

• The Companies Act 2013 (the Act) and the rules made thereunder.

• The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder.

• The Depositories Act 1996 and the Regulations and bye-laws framed thereunder.

• Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings.

The following Regulations and Guidelines prescribed under the Securities and ExchangeBoard of India Act 1992 (‘SEBI Act’):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011 as amended from time to time;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;

c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

d. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 and The Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 notified on 28th October 2014(Not applicable to the company during the audit period);

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not applicable to the company during the audit period);

f. The Securities and Exchange Board of India (Registrar to an Issue and Share TransferAgents) Regulations 1993 regarding the Companies Act and dealing with client.

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not applicable to the company during the audit period); and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998(Not applicable to the company during the audit period).

i. The Securities and Exchange Board of India (Listing Obligation and DisclosureRequirements) Regulations 2015; as amended from time to time

II. Sugar Cess Act 1982

Levy Sugar Price Equalisation Fund Act 1976 Food Safety and Standards Act 2006Essential Commodities Act 1955 Sugar Development Fund Act 1982 Export (Quality Controland Inspection) Act 1963

Agricultural and Processed Food Products Export Act 1986 (Not applicable to theCompany)

During the year under review the Company has made all compliances under Sectorspecific laws mentioned above.

III.

The Air (Prevention & Control of Pollution) Act 1981 [Read with the Air(Prevention & Control of Pollution) Rules 1982] The Environment (Protection) Act1986 [Read with the Environment (Protection) Rules 1986] The Water (Prevention &Control of Pollution) Act 1974 [Read with the Water (Prevention & Control ofPollution) Rules 1975 The Hazardous Waste (Management Handling And TransboundryMovement) Rules 2008 The Factories Act 1948 The Industrial Disputes Act 1947 ThePayment of Wages Act 1936 The Minimum Wages Act 1948 The Employees’ Provident Fundand Miscellaneous Provisions Act 1952 The Payment of Bonus Act 1965 The Payment ofGratuity Act 1972 The Contract Labour (Regulation and Abolition) Act 1970 The MaternityBenefit Act 1961 The Child Labour(Prohibition and Regulation) Act 1986 The IndustrialEmployment (Standing Orders) Act 1946 The Employees’ Compensation Act 1923 (earlierknown as Workmen’s Compensation Act 1923 The Apprentices Act 1961 The EmploymentExchange (Compulsory Notification of Vacancies) Act 1956

During the year under review the Company has filed periodical return and has notreceived any show cause notice and has generally complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.

We have relied on the representation made by the Company and its officers on systemsand mechanism formed by the Company for compliance under other Act Laws and Regulationsto the Company.

We have also examined compliance with the applicable clauses of the following:-

a. Secretarial Standards issued by The Institute of Company Secretaries of India andnotified by Central Government.

b. The Listing Agreements entered into by the Company with Stock Exchanges.

During the year under review the Company has complied with the provisions of the ActRules Regulations etc. mentioned above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the year under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while there has been no member dissenting from thedecisions arrived.

There are adequate systems and processes in the company commensurate with the size andoperations of the company to monitor and ensure compliance with applicable laws rulesregulations and guidelines.

We further report that the company has passed special resolution at its Annual GeneralMeeting held on 11th September 2015 under Section 180(1)(c) authorizing the Board ofDirectors to borrow money.

We further report that the company had issued 3000000 equity warrants each having anoption to convert such warrants into equity shares of Rs 10 each at a premium of Rs23each during the financial year 2013-14. Holders of 1500000 equity warrants have exercisedthe conversion option during the year and consequently the equity shares were allotted.

Annexure - 4

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 has installed spentwash fired boiler at its Dhampur Unit. The boiler willuse spent wash as fuel ( apart from bagasse) which will result in less bagasse consumptionin the boiler leading to additional 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;

Power and fuel consumption 31st March 2016 31st March 2015
1 Electricity
A Purchased:
Units (kwh) 4606385 6030003
Total Value (H) 34808185 44147955
Rate (H/Unit) 7.56 7.32
B Own generation :
i. Through diesel generator:
Units (Kwh) 175365 214728
Unit per liter of diesel 2.76 2.96
Cost/ unit 19.52 20.13
ii. Through steam turbine:
Units (Kwh) 166951800 151529728
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) 891.33 805.00
Total cost (H in lac) 60.26 54.43
Average rate (H/ tonnes) 6761 6761
3 Furnace oil
Quantity (lts.) - -
Total cost (H) - -
Average rate - -
4 Other/ Internal generation:
Quantity (tonnes) - -
Total cost (H) - -
Average rate - -

 

Power and fuel consumption 31st March 2016 31st March 2015
II Consumption per unit of production
A Sugar (qtls.) 5190606 4401135
- Electricity (Kwh/ qtls.) 33.09 35.84
- Furnace oil - -
- Coal (tonnes) - -
B Chemical (qtls.)
- Electricity (Kwh/ qtls.) 27.17 25.98
- 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) i n case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-

(a) the details of technology 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: Rs7.12 crore compared withprevious year’s Rs7.27 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.

b) Total foreign exchange used and earned:

Sugar operations at a glance (Rs in Cr.)
Current Year Previous Year
Export and foreign exchange earnings 16669 179.24
Imports and expenditure in foreign currency 137.85 82.52

 

For GSK & Associates
(Company Secretaries)
Saket Sharma
Partner
Date: 10.05.2016 (Membership No.: F4229)
Place: New Delhi (CP No.: 2565)

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