DIRECTORS' REPORT For the year ended 31st March, 2015 The Directors have pleasure in submitting the Annual Report and Audited Financial Statement of the Company for the year ended 31st March, 2015. OPERATIONS AND BUSINESS PERFORMANCE Please refer to the chapter on Management Discussion and Analysis for a detailed analysis of the performance of the Company during 2014-15. In addition, working results for key businesses have been provided as an annexure to this report vide Annexure - 1. DIVIDEND Keeping in view the performance of the Company your Directors have decided not to recommend payment of dividend for the year under review. CHANGES IN BUSINESS There have been no changes in business carried on by the Company. CORPORATE GOVERNANCE REPORT The Company's Corporate Governance practices have been detailed in a separate chapter and is attached separately to this Report together with the Auditor's certificate thereon. SUBSIDIARIES The report on the financial position of the Company's Subsidiaries, Himshikhar Investment Limited, Dalmia Solar Power Limited and Dalmia Sugar Ventures Limited, for the year ended 31-3-2015 is attached in Form AOC -1 and forms part of this report as Annexure - 2. The detailed Annual Reports of these subsidiaries are not being enclosed with this Annual Report. Any Member desiring to inspect the detailed Annual Reports of any of the aforementioned subsidiaries may inspect the same at the Head Office of the Company and that of the subsidiaries concerned. In event a member desires to obtain a copy of the Annual Report of any of the aforementioned subsidiaries, he may write to the Registered Office of the Company specifying the name of the subsidiary whose Annual Report is required. The Company shall supply a copy of such Annual Report to such Member. The Annual Report of the aforementioned subsidiaries are available at the Company's website www.dalmiasugar.com During the said financial year no company ceased to be a subsidiary of the Company or its Subsidiary. The Company has no Associates and Joint Ventures. The policy for determining material subsidiaries may be accessed in the Company's website at <http://www.dalmiasugar>. com/upload/policies/DBSIL-Material-Subisdiary-Policy.pdf CONSOLIDATED FINANCIAL STATEMENTS As required under section 129(3) of the Companies Act, 2013 read with clause 41 of the listing agreement and Accounting Standard - 21, this Annual Report also includes Consolidated Financial Statements for the financial year 2014-15. EXTRACT OF ANNUAL RETURN In compliance with sub-section (3) of section 92 of the Companies Act, 2013, the extract of the annual return is attached in Form MGT-9 and forms part of this report as Annexure - 3. DIRECTORS AND KEY MANAGERIAL PERSONNEL The independent Directors namely, Shri J.S. Baijal, Shri M. Raghupathy and Shri P. Kannan have given their respective declaration of independence under Section 149 of the Companies Act, 2013. A meeting of the Independent Directors excluding all Directors and Officials of the Company was held as mandated by provisions of Rule 8 of Schedule IV to the Companies Act, 2013 wherein they apprised the performance of the Executive Directors. The details of familiarisation programs for independent Directors of the Company can be accessed at the website of the Company at <http://www.dalmiasugar.com/upload/policies/> DBSIL-IDF-Policy.pdf. Shri B.B. Mehta, Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. He has furnished requisite declaration in Form DIR -8 pursuant to Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 to the effect that he is not disqualified from being reappointed as a Director of the Company. Smt. Himmi Gupta was appointed as a Director on the Board of the Company, effective 26-3-2015 and continues to hold office till the conclusion of the ensuing Annual General Meeting. The Company has received a notice from a Shareholder pursuant to the provisions of section 160(1) of the Companies Act, 2013, proposing the name of Smt. Himmi Gupta for being appointed as a Director of the Company whose office is liable to retirement by rotation. Smt. Himmi Gupta has furnished requisite declaration in Form DIR-8 pursuant to Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 to the effect that she is not disqualified from being reappointed as a Director of the Company. The Key Managerial Personnels, namely, Shri Jai H. Dalmia and Shri Gautam Dalmia, Managing Directors, Shri Anil Kataria, Chief Financial Officer and Shri K.V. Mohan, Company Secretary continue to hold their respective offices during the year under review. The Nomination and Remuneration Policy of the Company on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided in section 178(3) of the Companies Act, 2013 has been approved by the Board of Directors on the recommendation of the Nomination and Remuneration Committee. The Nomination and Remuneration Policy is attached as Annexure - 4 to this Report. The Board of Directors have conducted a formal evaluation of its own performance and of the performance of its Committees and individual Directors in accordance with norms laid down in the Nomination and Remuneration Policy aforesaid. BOARD OF DIRECTORS, COMMITTEES AND MEETINGS Reference is invited to the attached Corporate Governance Report for the details thereof. The Board has accepted all recommendations made by the Audit Committee. CORPORATE SOCIAL RESPONSIBILITY The Company has constituted the CSR Committee which has approved the CSR Policy and decided to expend an amount of X 0.50 Crore (which is 2% of average net profits of the Company made during three immediately preceding Financial Years) on CSR activities covering eradication of extreme hunger and poverty, promotion of education including special education, ensuring environmental sustainability and ecological balance, etc., health, and sanitation of which X 0.06 Crore is lying unspent. The said amount is expected to be spent in the current financial year on executions of certain projects under contemplation. The CSR policy is available on the website of the Company at <http://www.dalmiasugar.com/upload/policies/DBSIL-CSR->POLICY.pdf. The Annual Report of CSR activities, in terms of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014, is attached as Annexure - 5 and forms part of this Report. RISK MANAGEMENT A Risk Management Committee has been formed by the Board during the year in order to assist the Board to frame, implement and monitor the Risk Management Plan of the Company. The Committee has engaged professionals to assist them in framing a comprehensive risk management policy document and it is expected to be in place by the end of the current financial year. RELATED PARTY POLICY AND TRANSACTIONS The policy on related party transactions may be accessed on the Company's website at <http://www.dalmiasugar.com/> upload/ policies/DBSIL-Related-Party-Policy.pdf. During the year there were no material contracts or arrangements with the related parties referred to in section 188(1) of the Companies Act, 2013. Hence, Form AOC 2 is not being attached to this Report. INVESTMENTS, LOANS AND GUARANTEES The particulars of investments made by the Company and the details of loans given and guarantees furnished by the Company are furnished in Note No. 13 and Note No. 46 of the attached Standalone Financial Statements for the year ended 31-3-2015 ADEQUACY OF INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to the financial statements. The said financial controls have been tested and no reportable material weakness in the design and operations were observed. WHISTLE BLOWER POLICY AND VIGIL MECHANISM The Company has in place the Whistle Blower Policy and Vigil Mechanism with a view to provide for adequate safeguards against victimisation of persons who use such mechanism and provide for direct access to the Chairperson of the Audit Committee in appropriate cases. The policy can be accessed at the web site of the Company at <http://www.dalmiasugar.com/upload/policies/> DBSIL-Whistle-Blower-Policy-Vigil-Mechanism.pdf. DIRECTORS' RESPONSIBILITY STATEMENT In terms of the provisions of Section 134(3)(c) of the Companies Act, 2013 your Directors declare that: (a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; (b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; (d) the Directors had prepared the annual accounts on a going concern basis; (e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. EMPLOYEES' STOCK OPTION SCHEME The Company has not granted any employee stock options. STATUTORY AUDITORS M/s. S.S. Kothari Mehta & Co., Chartered Accountants the Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting. The Board has decided to recommend their appointment for a further period of one year in terms of section 139 of the Companies Act, 2013. The Company has obtained from them a certificate to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the section 141 of the Companies Act, 2013. COST AUDITOR M/s. R.J. Goel & Co., Cost Accountants, were appointed as the Cost Auditors of the Company to conduct cost audit for the year ended 31-3-2014, and they have submitted the Cost Audit Reports for the said year on 20-8-2014. Their appointment for the year ended 31-3-2015 continues and they will be submitting their report in due course of time. The Directors have decided to appoint M/s. HMVN & Associates, Cost Auditors, New Delhi, as the Cost Auditors to conduct cost audit for the year ended 31-3-2016 and the remuneration payable to them for conduct of Cost Audit will be coming up for approval before the Shareholders at the ensuing Annual General Meeting. SECRETARIAL AUDITOR AND REPORT THEREON The Board of Directors of the Company appointed M/s Harish Khurana & Associates, Practising Company Secretaries, as the Secretarial Auditor to conduct the Secretarial Audit in terms of section 204 of the Companies Act, 2013. The Report of the Secretarial Audit is attached in Form MR - 3 and forms part of this report as Annexure - 6. COMMENTS ON AUDITORS' OBSERVATIONS The Reports submitted by the Secretarial Auditor and Statutory Auditor of the Company do not contain any qualification, reservation or adverse remark. LISTING OF SHARES Consequent upon Madras Stock Exchange voluntarily surrender of its registration as a recognised Stock Exchange, the shares of the Company were delisted from dealings on that Exchange. The Company's shares continue to be listed on the National Stock Exchange and Bombay Stock Exchange and the listing fees for the year 2015-16 has been paid to both exchanges. UNCLAIMED SUSPENSE ACCOUNT In terms of clause 5A of the Listing Agreement, the Company has opened a demat account. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE TRANSACTIONS A statement giving details of Conservation of Energy, Technology Absorption and Foreign Exchange transactions, in accordance with Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, forms a part of this report as Annexure - 7. PARTICULARS OF DIRECTORS' AND EMPLOYEES' REMUNERATION The particulars of remuneration to Directors and Key Managerial Personnels and other particulars in terms of Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure - 8 to this Report A statement showing the names and other particulars of the employee drawing remuneration in excess of the limits set out in Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure - 9 to this Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the printed copy of the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is also available on the Company's website. PUBLIC DEPOSITS The Company has not accepted any deposits from public till date. ORDERS PASSED BY REGULATORS No orders have been passed by the regulators or courts or tribunals impacting the status of the Company. 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 the Workplace (Prevention, Prohibition & 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. No such Complaints have been received by the said committee during the financial year 2014-15. HEALTH, SAFETY AND ENVIRONMENT Health and Safety of employees and clean environment receive utmost priority at all locations of your Company. It has already implemented EHS System and provided safe working environment at its plants and mines. Use of personal protective equipment by employees have become compulsory and training programs on Health, Safety and Occupational Health are being conducted on a continuous basis. Your Company has launched the new Safety and Housekeeping programme during the current year which has substantially improved the plant housekeeping. Our endeavour is to make all our plants safe and keep all its employees healthy. Your Company has a philosophy that 'Clean & Green' is more profitable. INDUSTRIAL RELATIONS The industrial relations during the year under review remained harmonious and cordial. ACKNOWLEDGEMENT The Directors wish to place on record their appreciation for the excellent cooperation received from all employees at various units of the Company and other stakeholders. For and on behalf of the Board (J.S. Baijal) CHAIRMAN Dated: 14th May, 2015 Place: New Delhi |