Your Directors have pleasure in presenting their sixty seventh report alongwith theaudited Financial Statements of the Company for the financial year ended March 31 2019.
|Financial Highlights || || |
| || ||(Rs crore) |
|Particulars ||2018-19 ||2017-18 |
|Net Sales Turnover ||2018.51 ||2274.88 |
|EBIDTA ||352.61 ||271.13 |
|Less:- Interest & Financial Charges ||68.61 ||69.47 |
|PBDT ||284.00 ||201.67 |
|Less:- Depreciation & Impairment ||80.20 ||53.79 |
|PBT ||203.80 ||147.87 |
|Less:- Tax || || |
|Current Tax ||43.63 ||31.52 |
|Deffered Tax ||(27.21) ||(17.75) |
|PAT ||187.38 ||134.10 |
|Add:- Surplus brought forward ||1117.39 ||1021.78 |
|Balance available for appropriation ||1304.77 ||1155.88 |
|Appropriations || || |
|Debenture Redemption Reserve (net) || || |
|Transferred to General Reserve ||- ||19.00 |
|Dividend ||- ||16.19 |
|Dividend Distribution Tax ||- ||3.30 |
|Balance carried Forward ||1304.77 ||1117.39 |
Operations and Business Performance
The Company has achieved the highest ever operational volumes in all segments of thebusiness with distillery segment being the major growth driver. It has also recorded thehighest ever sugar recovery in this year. Consequently despite the challenging businessenvironment the Company has reported excellent results during the financial year 2018-19.
Management Discussion and Analysis for the year under review as stipulated in theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI LODR Regulations") giving detailed analysis of theperformance of the Company during the financial year 2018-19 is presented in a separatesection forming part of this Report. Further the working results for key businesses areattached and marked as Annexure - 1 and forms part of this Report.
The Company continues to be engaged in the same business during the financial year2018-19. There have been no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year to whichthe Financial Statements relate and the date of this Report.
Your Directors are pleased to recommend a dividend of R 1.60 per equity share of facevalue of R 2/- (@80%) for the financial year 2018-19 amounting to R 15.62 Crore (inclusiveof dividend distribution tax of R 2.66 Crore) payable to those shareholders whose namesappear in the Register of Members as on the Book Closure / Record Date.
The Register of Members and Share Transfer books will remain closed from August 222019 to August 29 2019 (both days inclusive) for the purpose of payment of the dividendfor the financial year ended on March 31 2019 and the Annual General Meeting. The AnnualGeneral Meeting is scheduled to be held on August 29 2019.
Transfer to General Reserves
Your Directors do not propose to transfer any amount to the General Reserves for theyear under review.
Investor Education and Protection Fund
During the financial year under review the Company has transferred unpaid/unclaimeddividend of R 415110/- to the Investor Education & Protection Fund. Further 56465Equity Shares on which dividend had not been claimed for seven consecutive years havealso been transferred to the Demat account of Investor Education & Protection FundAuthority.
During the financial year 2018-19 ICRA has on November 30 2018 reaffirmed therating for long term and short term facilities of the Company at AA- and A1+respectively. Instruments with the said rating are considered to have high degree ofsafety regarding timely servicing of financial obligations.
Consolidated Financial Statements
In accordance with the provisions of the Companies Act 2013 read with the IndianAccounting Standards (Ind AS) the Consolidated Financial Statements of the Company andits subsidiary(ies) for the financial year 2018-19 have been prepared in accordance withapplicable accounting standards and form part of the Annual Report.
The Company has one wholly owned subsidiary as on March 31 2019 i.e. HimshikharInvestment Limited. There is no material unlisted subsidiary of the Company in terms ofSEBI LODR Regulations as amended from time to time and the Company's Policy fordetermining Material Subsidiary. The said Policy may be accessed at the Company's websiteat www.dalmiasugar.com/upload/policies/DBSIL-Material-Subsidiary-Policy-Board. pdf.
During the financial year 2018-19 Dalmia Bharat Sugar Venture Limited and Dalmia SolarPower Limited have ceased to be the subsidiaries of the Company with effect from May 312018. The Company has no Associates or Joint Ventures.
A statement containing the salient features of the Financial Statements of theCompany's subsidiary for the financial year ended on March 31 2019 in Form AOC 1 isattached and marked as Annexure - 2 and forms part of this Report.
The Financial Statements including Consolidated Financial Statements of the Companyincluding all other documents required to be attached thereto are placed on the Company'swebsite at www.dalmiasugar.com. These documents will also be available for inspection tillthe date of the Annual General Meeting on all working days during business hours at theregistered office of the Company and any member desirous of obtaining a copy of the samemay write to the Company Secretary in terms of Section 136 of the Companies Act 2013.
The Board of Directors of the Company met four times during the financial year 2018-19i.e. on May 28 2018 August 06 2018 November 13 2018 and February 14 2019 in duecompliance with and following the procedures prescribed in the Companies Act 2013 SEBILODR Regulations and applicable Secretarial Standards. Detailed information on themeetings of the Board of Directors is included in the report on Corporate Governance whichforms part of this Report.
Directors and Key Managerial Personnel
Shri Jai Hari Dalmia Vice Chairman and Managing Director Shri Gautam Dalmia ManagingDirector and Chief Executive Director and Shri Anil Kataria Chief Financial Officercontinue to hold their respective offices during the financial year 2018-19.
Shri Bharat Bhushan Mehta who was a Non Executive Director has been appointed as theWhole Time Director of the Company with effect from April 01 2019.
Smt. Isha Kalra has resigned as the Company Secretary of the Company due to personalreasons with effect from October 11 2018 and Smt. Sneha Sharma has been appointed asCompany Secretary of the Company with effect from November 13 2018.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company the office of Shri Bharat Bhushan Mehta as Director is liableto determine by retirement by rotation at the forthcoming Annual General Meeting. He beingeligible has offered himself for reappointment and has furnished the requisite declarationto the effect that he is qualified to be appointed as a Director of the Company.
Shri J.S. Baijal Shri M. Raghupathy and Shri P. Kannan being the IndependentDirectors have given their declaration of meeting the criteria of independence laid downin the Companies Act 2013 and SEBI LODR Regulations. The term of five years of theIndependent Directors would be completed at the forthcoming Annual General Meeting. ShriJ. S. Baijal and Shri M. Raghupathy have shown their unwillingness for re-appointment asDirector in view of the old age. Ms. Himmi Gupta has given resignation from the Board ofDirectors with effect from July 30 2019 due to personal reasons. The Board places onrecord its appreciation for the valuable services rendered by Shri J. S. Baijal Shri M.Raghupathy and Ms. Himmi Gupta.
Ms. Amita Misra has given consent to act as Director and declaration of meeting thecriteria of independence and is proposed to be appointed as an Independent Director at theforthcoming Annual General Meeting of the Company. Her resume and other details requiredas per SEBI LODR Regulations are provided in the explanatory statement in the notice ofAnnual General Meeting.
Committees of the Board
In terms of the Companies Act 2013 and SEBI LODR Regulations the Company hasfollowing Committees of the Board:
Stakeholders' Relationship Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
The details with respect to the compositions powers terms of reference etc. of theCommittees are given in detail in the Corporate Governance Report which forms part of thisReport. The Board has accepted the recommendations made by the Committees during thefinancial year 2018-19.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy of the Company lays down the constitution androle of the Nomination and Remuneration Committee. The Policy has been framed with theobjective
(a) to ensure that appointment of directors key managerial personnel and seniormanagerial personnel and their removals are in compliance with the applicable provisionsof the Companies Act 2013 and the SEBI LODR Regulations;
(b) to set out criteria for the evaluation of performance and remuneration ofdirectors key managerial personnel and senior managerial personnel;
(c) to recommend to the Board the remuneration payable to senior management;
(d) to adopt best practices to attract and retain talent by the Company; and
(e) to ensure diversity of the Board of the Company.
The Policy specifies the manner of effective evaluation of performance of Board itsCommittees and individual Directors to be carried out either by the Board by theNomination and Remuneration Committee or by an independent external agency and review itsimplementation and compliance. The Nomination and Remuneration Policy of the Company canbe accessed at www.dalmiasugar.com
The annual evaluation of the performance of the Board its Committees and individualDirectors was carried out by the Board the Nomination and Remuneration Committee andIndependent Directors in compliance with the Companies Act 2013 and SEBI LODR Regulationsduring financial year 2018-19.
An indicative criteria was circulated to the Directors to facilitate such evaluation.Based on the feedback of the Directors and on due deliberations of the views and counterviews the evaluation was carried out in terms of the Nomination and Remuneration Policyand such indicative criterion.
It was observed that the Board was well composed in as much as there was a mix of youthand maturity competencies and experience in the business of the Company as well as otherareas like finance compliance policy making etc. and that there was adequate gender andother diversity in the Board. The Board had met the high standards in relation toCorporate Governance as envisaged by the Companies Act 2013 as well as those provided inthe SEBI LODR Regulations and/or the other requirements of the SEBI. The Board functionedas a cohesive team and the decision making was based on due deliberations where views andcounter views were encouraged.
It was further observed that the mandate and composition of Committees was clearlydefined. The Committees performed their duties diligently and contributed effectively tothe decisions of the Board.
All the Directors were performing their role effectively and discharging theirresponsibilities and obligations efficaciously and had been meeting the high standards ofprofessing and ensuring best practices in relation to overall governance of the Company'saffairs.
Directors' Responsibility Statement
Your Directors state that:
(a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards have been followed and there are no material departuresfrom the same;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgements 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/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 the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities;
(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 are operatingeffectively; and
(f) the Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Particulars of Remuneration of Directors Key Managerial Personnel and Employees
The details relating to the ratio of the remuneration of each Director to the medianemployee's remuneration and other prescribed details in terms of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are attached and marked as Annexure 3 and formspart of this Report.
A statement showing the names of the top ten employees in terms of remuneration drawnand other employees drawing remuneration in excess of the limits set out in Rule 5(2) andother particulars in terms of Rule 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are attached and marked as Annexure - 4 and forms partof this Report.
Corporate Governance Report
Your Directors are committed to achieve the highest standards of ethical and corporategovernance and continue to comply with the Code of Conduct. The endeavour is to enhancethe reputation of the Company as a responsible and sustainable Company in order to attractas well as retain talents customers suppliers investors and to maintain fulfillingrelationships with the communities.
The strong corporate governance and a zeal to grow has helped the Company to deliverthe best value to the stakeholders. We have always been positively cautious about the nearterm and optimistic about the medium and long term in view of the improved macroindicators for the economy significant growth in public spending and focused executionplans.
The Corporate Governance Report for the financial year 2018-19 as required under SEBILODR Regulations of the Company is attached hereto and forms part of this Report. Thecertificate from the Secretarial Auditors of the Company confirming compliance with theconditions of Corporate Governance is attached to the Corporate Governance Report. Furthercertificate from the Secretarial Auditors is also attached confirming that none of theDirectors of the Company have been debarred or disqualified from being appointed orcontinuing as Directors of the Company by SEBI/Ministry of Corporate Affairs or any suchauthority.
In terms of the provisions of Section 92(3) of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 the the extract of the Annualreturn of your company of your Company is posted at the Company's websitewww.dalmiasugar.com.
Corporate Social Responsibility
The Company has been following the concept of giving back and sharing with the underprivileged sections of the society for more than eight decades. The Corporate SocialResponsibility of the Company is based on the principal of Gandhian Trusteeship. TheCompany has addressed the issues of health care and sanitation education ruraldevelopment women empowerment and other social development issues. The prime objective ofour Corporate Social Responsibility Policy is to hasten social economic and environmentalprogress. We remain focused on generating systematic and sustainable improvement for localcommunities surrounding our plants and project sites.
The Corporate Social Responsibility Policy of the Company may be accessed at theCompany's website at www.dalmiasugar. com/upload/policies/DBSIL-CSR-POLICY.pdf.
Pursuant to the said Policy the Company has made expenses aggregating to R2.92 Croretowards corporate social responsibility activities during the financial year 2018-19 whichare slightly more than 2% of average net profits of the Company made during threeimmediately preceding financial years. The annual report on corporate socialresponsibility activities is attached and marked as Annexure 5 and forms part ofthis Report.
Related Party Policy and Transactions
Your Company has formulated a policy on materiality of related party transactions anddealing with related party transactions duly approved by the Board of Directors and samemay be accessed at the Company's website at www.dalmiasugar.com/ upload/policies/DBSIL-RPT-Policy-Board.pdf.
Prior omnibus approval is obtained for related party transactions which are ofrepetitive nature and entered in the ordinary course of business and at an arms' lengthbasis. All related party transactions are placed before the Audit Committee for review andapproval.
All related party transactions entered during the financial year 2018-19 were inordinary course of the business and on an arms' length basis. During the financial year2018-19 there were no material contracts or arrangements entered into by the Company withthe related parties referred to in section 188(1) of the Companies Act 2013.
Your Company has formulated the Risk Management Policy that defines the adequate riskmanagement process and procedures which are based upon business environment operationalcontrols and compliance procedures. The major risks are assessed through a systematicprocedure of risk identification and classification. Risks are prioritized according tosignificance and likelihood. The purpose of risk management is not to eliminate the risksinherent to the business but to proactively address such risks. The Audit Committeeoversees the risk management plan and ensures its effectiveness.
Adequacy of Internal Financial Controls
Internal financial controls are an integrated part of the risk management process. YourCompany has in place adequate internal control systems commensurate with the size of itsoperations and the policies and procedures adopted by your Company ensures the orderly andefficient conduct of business the safeguarding of assets the prevention and detection offrauds and errors the adequacy and completeness of the accounting records and the timelypreparation of reliable financial information. The entire system is complemented byexternal auditing of selected functions such as the Secretarial functions.
The internal auditors of the Company conduct regular internal audits as per approvedplan and the Audit Committee reviews periodically the adequacy and effectiveness ofinternal control systems and takes steps for corrective measures whenever required. Thereare established Cause-Effect-Action (CEA) systems and escalation matrices to ensure thatall critical aspects are addressed well in time.
Whistle Blower Policy and Vigil Mechanism
The Company has in place the Whistle Blower Policy and Vigil Mechanism for Directorsemployees and other stakeholders which provides a platform to them for raising their voiceabout any breach of code of conduct financial irregularities health safetyenvironmental issues adequate safeguards against victimisation of stakeholders andprovide the direct access to the Chairperson of the Audit Committee in appropriate cases.The Policy can be accessed at the website of the Company athttp://www.dalmiasugar.com/upload/policies/DBSIL-Whistle-Blower-Policy-Vigil-Mechanism.pdf.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
Your Company is committed to ensuring that all are treated with dignity and respect.The Human Resource and the Legal Secretarial & Compliance department incollaboration with other functions ensure protection against sexual harassment of womenat workplace and for the prevention and redressal of complaint in this regard.
In line with the requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013 an Anti-Sexual Harassment Policy hasbeen put in place and Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. During the financial year 2018-19 nocomplaint has been received by ICC.
Loans Guarantees and Investments
Your Company has given loans and guarantees and made investments within the prescribedlimits with the necessary approvals and in terms and accordance with the provisions ofSection 186 of the Companies Act 2013.
The particulars of such loans and guarantees given and investments made are provided inthe Standalone Financial Statements at note no. 5.
Energy Conservation Technology Absorption and Foreign Exchange Transactions
A statement giving details of Energy Conservation Technology Absorption and ForeignExchange Transactions is given in Annexure 6 and forms part of this Report.
NSBP & Co Chartered Accountants (Firm Registration No. 001075N) StatutoryAuditors of the Company hold office till the conclusion of Seventieth Annual GeneralMeeting of the Company to be held in 2022.
There is no qualification reservation or adverse remark in their report on theFinancial Statements. The notes on Financial Statements referred to in the Auditors'Report are self-explanatory and do not call for any comments and explanation. The Auditorshave not reported any matter under Section 143 (12) of the Act during the year underreview.
HMVN & Associates Cost Accountants were appointed as the Cost Auditors of theCompany to conduct Cost Audit for the year ended March 31 2018 and they had submittedthe Cost Audit Report for the said year on August 06 2018.
R.J. Goel & co. Cost Accountants New Delhi was appointed as the Cost Auditors toconduct cost audit for the year ended March 31 2019 and they will be submitting theirreport in due course of time.
The Board of Directors of the Company has re-appointed R.J. Goel & Co. CostAccountants New Delhi as the Cost Auditors to conduct cost audit for the year endedMarch 31 2020 at a remuneration to be ratified by the shareholders at the forthcomingAnnual General Meeting.
Secretarial Auditor and Report thereon
The Board of Directors of the Company had appointed Harish Khurana & AssociatesPractising Company Secretaries as the Secretarial Auditor of the Company for theFinancial Year 2018-19.
The Secretarial Audit Report in Form MR - 3 for financial year 2018-19 is attached andmarked as Annexure 7 and forms part of this Report. There is no qualificationreservation or adverse remark in the Secretarial Audit Report.
Your Company is in compliance with all the Secretarial Standards issued by theInstitute of Company Secretaries of India and having become effective.
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 ortribunals 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 endeavour of the Company is to continue safe and healthy environment at all its units.
Towards this end regular training programmes are being conducted for all levels ofemployees. Towards greener environment the Company and employees have made it a habit toplant more and more trees.
The industrial relations during the year under review were harmonious and cordial.
The Board of Directors would like to express their sincere appreciation for theassistance and cooperation received from the financial institutions banks governmentauthorities customers vendors and stakeholders during the year under review. The Boardof Directors also wish to place on record its deep sense of appreciation for the committedservices by all the Company's executives staff and workers.
| ||For and on behalf of the Board |
| ||(J.S. Baijal) |
|Place: New Delhi ||Chairman |
|Dated: July 29 2019 ||DIN: 00049565 |