Your Directors have pleasure in presenting their 70th report on the operations and business performance of your Company along with the audited Financial Statements for the financial year 2021-22.
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Financial Highlights
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(H in Crore)
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Particulars
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FY 2021-22
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FY 2020-21
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Net Sales Turnover
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3018.25
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2685.57
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EBIDTA
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487.83
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525.92
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Less: Interest & Financial Charges
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34.82
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61.86
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PBDT
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453.01
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464.06
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Less: Depreciation & Impairement review impact
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72.92
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95.55
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PBT
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380.09
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368.51
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Less: Tax
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Current Tax
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98.33
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101.62
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Deffered Tax
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(13.49)
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(3.31)
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PAT from continuing operations (a)
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295.25
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270.20
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PAT from discontinued operations (b)
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(1.61)
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(0.70)
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PAT (a) (b)
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293.64
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269.50
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Add: Surplus brought forward
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1,737.16
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1,467.66
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Balance available for appropriation
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2,030.80
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1,737.15
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Appropriations
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Dividend
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48.55
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-
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Balance carried Forward
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1,982.25
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1,737.16
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Operational and Business Performance
During the year under review, your Company has doubled its distillery capacity (by way of increasing existing capacity and also by setting up new distillery at Ramgarh Unit) and increased its sugar capacity at Jawaharpur and Nigohi Units.
Your Company has successfully commissioned its brownfield
projects including expansion of capacity at its Jawaharpur and Nigohi Units to 9250 TCD and 9000 TCD, respectively along with refinery at Jawaharpur.
Also, Ramgarh Distillery of 140 KLPD has got commissioned and Jawaharpur and Kolhapur distilleries have expanded to 220 KLPD and 120 KLPD, respectively, during the year under review.
Management Discussion and Analysis Report
Management Discussion and Analysis of financial performance and results of operations of the Company for the year under review, as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations"), giving detailed analysis of the overall industry structure, economic developments, performance and state of affairs of your Company's business and material developments during the financial year 2021-2022 is provided in a separate section and forms part of the Annual Report.
The Company continued to be engaged in the same business during the financial year 2021-2022. There were no material changes and commitments affecting the financial position of the Company, which occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.
Dividend
The Board of Directors has, at its meeting held on May 24, 2022, recommended a final dividend of HI/- ( 50%) per equity share of the face value of H2/- for the FY 2021-22, having considered various financial and non-financial factors prevailed during the year, in terms of the Dividend Distribution Policy of the Company. The dividend shall be paid upon approval by the members at the Annual General Meeting to all the shareholders (with respect to shares held in physical form) / beneficial owners (with respect to shares held in Demat form) whose names appear in the Register of Members / Beneficial Owners as on the Record Date, i.e., July 13, 2022. In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividend shall be paid to the shareholders after deduction of applicable tax at source.
During the year under review, the Board of Directors of the Company had, at its meeting held on February 04, 2022, declared an Interim dividend of H3/- (150%) per equity share of the face value of H2/- for the FY 2021-22. The interim dividend was paid to the shareholders on February 25, 2022.
For the previous FY 2020-21, the Company had paid a dividend of H3/- (150%) to its shareholders as against H4/- (150% - interim dividend and 50% - recommended final dividend) for the year under review.
The Dividend Distribution Policy of the Company is available at the website of the Company at https://www.dalmiasugar.com/ wp-content/uploads/2021/06/Dividend-Distribution-Policy.pdf.
Transfer to General Reserves
Your Directors have not proposed transfer of any amount to the General Reserve for the year under review.
Consolidated Financial Statements
In accordance with the provisions of the Companies Act, 2013 read with the Indian Accounting Standards (Ind AS), the Consolidated Financial Statements of the Company and its subsidiary for the financial year 2021-22 have been prepared and form part of the Annual Report.
Subsidiaries, Associates and Joint Venture Companies
The Company has one wholly owned subsidiary as on March 31, 2022, i.e., Himshikhar Investment Limited and it is not a material unlisted subsidiary of the Company in terms of the SEBI Listing Regulations, as amended from time to time, and the Company's Policy for determining Material Subsidiary. The said Policy may be accessed at https://www.dalmiasugar.com/wp-content/themes/ Sugar/assets/policies/Policy-on-Material-Subsidiaries.pdf.
The Company has no Associates or Joint Venture companies. A statement containing the salient features of the Financial Statements of the Company's subsidiary for the financial year ended on March 31, 2022 in Form AOC 1 is attached and marked as Annexure - 2 and forms part of this report.
The Financial Statements of the Company prepared on standalone and consolidated basis including all other documents required to be attached thereto and the Financial Statements of
the Subsidiary Company are placed on the Company's website at www.dalmiasugar.com. Any member desirous of obtaining a copy of these documents may write to the Company Secretary in terms of Section 136 of the Companies Act, 2013.
Scheme of Amalgamation
The Scheme of Amalgamation involving amalgamation of the wholly owned subsidiary namely Himshikhar Investment Limited with the Company is pending for pronouncement of order by the Hon'ble National Company Law Tribunal, Chennai. Once Scheme is sanctioned and order is pronounced, the Scheme shall become effective with effect from the Appointed Date, i.e., April 01,2021.
Pursuant thereto, the Company shall surrender the NBFC registration of Himshikhar Investment Limited to the Reserve Bank of India and same would result in rationalization of the legal and regulatory compliances; administrative, compliance and other operational costs and integration of resources of both the companies.
Directors, Chief Executive Director and Key Managerial Personnel
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri Bharat Bhushan Mehta, Whole-time Director & Chief Executive Office (DIN:00006890), is liable to retire by rotation at the forthcoming Annual General Meeting of the Company and has offered himself for reappointment. The Board of Directors recommends his reappointment.
All the Independent Directors of the Company, namely Shri Rajeev Bakshi, Smt. Amita Misra and Shri P. Kannan have given declaration(s) that they meet the criteria of independence.
At the 69th Annual General Meeting of the Company held on September 21,2021, the appointment of following Directors was approved by the shareholders:
1. Shri Gautam Dalmia (DIN: 00009758) as the Managing Director of the Company for a period of five years with effect from January 16, 2022;
2. Shri Bharat Bhushan Mehta (DIN: 00006890) as the Whole Time Director and Chief Executive Officer of the Company for a period of five years with effect from April 01,2022; and
3. Shri Rajeev Bakshi (DIN 00044621) as an Independent Director of the Company for a period of five years with effect from February 05, 2021.
In terms of Section 203 of the Companies Act 2013, Shri Gautam Dalmia, Managing Director, Shri Bharat Bhushan Mehta, Whole Time Director and Chief Executive Officer, Shri Anil Kataria, Chief Financial Officer and Ms. Aashhima V Khanna continue to hold their positions as Key Managerial Personnel of the Company.
Board Meetings
During the year under review, the Board of Directors of the Company met six times, i.e., on May 24, 2021, July 30, 2021, October 29, 2021, December 29, 2021, February 04, 2022 and March 23, 2022. The Board meetings were conducted in due
compliance with; and following the procedures prescribed in the Companies Act, 2013, SEBI Listing Regulations and applicable Secretarial Standards. Detailed information on the meetings of the Board is included in the report on Corporate Governance which forms part of the Annual Report.
Committees of the Board
During the year under review, the Board ofDirectors was supported by six Board level Committees viz, Audit Committee, Stakeholders' Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee and Finance Committee.
The details with respect to the composition and number of meetings held during the financial year 2021-22 and attendance of the members, terms of reference and other related matters of the Committees are given in detail in the Corporate Governance Report, which forms part of the Annual Report. The recommendations made by the Committee(s) during the year under review have been accepted by the Board of Directors.
Annual Evaluation of Board Performance and Performance of its Committees and of Directors
During the year under review, the annual evaluation of performance of the Board, Committees and individual Directors was carried out by the Independent Directors, Nomination and Remuneration Committee and Board of Directors in compliance with the Companies Act, 2013 and SEBI Listing Regulations.
The Board's functioning was evaluated on various aspects, including inter-alia the structure of the Board, meetings of the Board, functions of the Board, effectiveness of Board processes, information and functioning.
The Committees of the Board were assessed inter-alia on the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The Directors were evaluated on various aspects such as attendance and contribution at Board/Committee meetings and guidance/support to the management outside Board/ Committee meetings.
The performance of Non-Independent Directors, Board as a whole and the Chairman was evaluated in a separate meeting of Independent Directors. Similar evaluation was also carried out by the Nomination and Remuneration Committee and the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
Based on the feedback of the Directors and on due deliberations of the views and counter views, the evaluation was carried out in terms of the Nomination and Remuneration Policy.
The evaluation confirmed that the Board and its Committees continued to operate effectively and the Directors had met the high standards professing and ensuring best practices in relation to corporate governance of the Company's affairs.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors, state that:
(a) In preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed and there are no material departures from the same;
(b) The Directors have 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 have 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 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 system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy of the Company lays down the constitution and role of the Nomination and Remuneration Committee. The policy has been framed with the following objectives:
(a) To ensure that appointment of directors, key managerial personnel and senior managerial personnel and their removals are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI Listing Regulations;
(b) To set out criteria for the evaluation of performance and remuneration of directors, 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, its Committees and individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance. The Nomination and Remuneration policy of the Company can be accessed at https://www.dalmiasugar.com/wp-content/themes/Sugar/ assets/policies/Nomination-and-Remuneration-Policy.pdf.
Particulars of remuneration of Directors, Key Managerial Personnel and Employees
The details relating to the ratio of the remuneration of each Director to the median employee's remuneration and other prescribed details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and marked as Annexure - 3 and forms part of this report.
None of the Directors or Managing Director or Whole Time Director and CEO of the Company, received any remuneration or commission from the Subsidiary Company of your Company.
A statement showing the names of the top ten employees in terms of remuneration drawn and other employees drawing remuneration in excess of the limits set out in Rules 5(2) and other particulars in terms of Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and marked as Annexure - 3A and forms part of this report.
Share Capital
During the year under review, there was no change in the Issued, Subscribed and Paid up equity share capital of the Company and it remained H16.19 Crore consisting of 8,09,39,303 equity shares of H2/- each.
Investor Education and Protection Fund
During the year under review, the Company has transferred H66,08,322 towards unclaimed dividend amount on the shares already transferred to Investor Education and Protection Fund. However, no shares were due and transferred to Investor Education and Protection Fund during the year under review.
Annual Return
In terms of Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed at www.dalmiasugar.com.
Corporate Governance Report
Your Directors are committed to achieve the highest standards of ethics, transparency, corporate governance and continue to comply with the Code of Conduct. The endeavour is to enhance the reputation as a responsible and sustainable Company to attract and retain talents, customers, suppliers, investors and to maintain fulfilling relationships with the communities.
The strong corporate governance and zeal to grow has helped us to deliver the best value to the stakeholders. We have always been positively cautious about the near term and optimistic about the medium and long term in view of the improved macro indicators for the economy, significant growth in public spending and focused execution plans.
The Corporate Governance Report of the Company for the financial year 2021-22 as per the SEBI Listing Regulations is attached hereto and forms part of the Annual Report.
Business Responsibility and Sustainability Report
Your Directors have voluntarily provided Business Responsibility and Sustainability Report for the FY 2021-22, which is mandatory for top 1000 companies by market capitalization only with effect from FY 2022-23 in terms of Regulation 34(2) of the Listing Regulations. Your Company is at 539 number by market capitalization as of March 31, 2022. The Business Responsibility and Sustainability Report on the following nine principles forms an integral part of the Annual Report:
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P1
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Businesses should conduct and govern themselves with integrity in a manner that is ethical, transparent and accountable
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P2
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Businesses should provide goods and services in a manner that is sustainable and safe
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P3
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Businesses should respect and promote the well-being of all employees, including those in their value chains
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P4
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Businesses should respect the interests of and be responsive towards all its stakeholders
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P5
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Businesses should respect and promote human rights
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P6
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Businesses should respect, protect and make efforts to restore the environment
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P7
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Businesses when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent
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P8
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Businesses should promote inclusive growth and equitable development
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P9
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Businesses should engage with and provide value to their consumers in a responsible manner
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Corporate Social Responsibility (CSR)
The Company, as part of the Dalmia Bharat Group, has been following the concept of giving back and sharing with under privileged sections for more than eight decades. The Corporate Social Responsibility of the Company is based on the principal of Gandhian Trusteeship. For over eight decades, the Group addressed the issues of health care and sanitation, education, rural development, women empowerment and other social development issues. The prime objective of our Corporate Social Responsibility policy is to hasten social, economic and environmental progress. We remain focused on generating systematic and sustainable improvement for local communities surrounding our plants and project sites.
During the Financial Year 2021-22 in view of various amendments brought out by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, Corporate Social Responsibility Policy was revised to incorporate the amendments. The Corporate Social Responsibility Policy of the Company can be accessed at https://www.dalmiasugar.com/wp-content/uploads/2021/07/ DBSIL-CSR-Policy-Revised-245.21.pdf.
Pursuant to the said Policy, the Company has spent H4.81 Crore towards corporate social responsibility activities including livelihood, climate action, social infrastructure and COVID19 relief during the financial year 2021-22 and H50 Lakh has been
transferred to Unspent Corporate Social Responsibility Account. The annual report on corporate social responsibility activities is attached and marked as Annexure - 4 and forms part of this report.
Related Party Transaction Policy and Transactions
All related party transactions entered during the year under review were on an arm's length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations.
All related party transactions were placed before the Audit Committee for prior approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were repetitive in nature except when the need for them could not be foreseen in advance.
The particulars of contracts/arrangement/transactions entered into by the Company with the related parties during the year under review are provided in Form AOC 2 which is attached and marked as Annexure - 5 and forms part of this report.
The Company has formulated a policy on materiality and on dealing with Related Party Transactions and same can be accessed at https://www.dalmiasugar.com/wp-content/themes/ Sugar/assets/policies/Policy-on-Related-Party-Transactions.pdf.
Risk Management
Your Company has a Risk Management Committee which monitors and reviews the risk management plan / process of your Company. The major risks are assessed through a systemic procedure of risk identification and classification. Risks are prioritized according to significance and likelihood.
The Risk Management Committee oversees the risk management processes with respect to all probable risks that the organization could face such as strategic, financial, liquidity, security including cyber security, regulatory, legal, reputational and other risks. The Committee ensures that there is a sound Risk Management Policy to address such risks. The purpose of risk management is not to eliminate risks but to proactively address them. There are no elements of risk which in the opinion of the Board may threaten the existence of the Company. The details of the Risk Management Committee are given in the Corporate Governance Report which forms integral part of this Annual Report.
Whistle Blower Policy and Vigil Mechanism
In Compliance with the provisions of section 177 of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations, the Company has in place the Whistle Blower Policy and Vigil Mechanism for Directors, employees and other stakeholders which provides a platform to them for raising their voice about any breach of code of conduct, financial irregularities, illegal or unethical practices, unethical behaviour, actual or suspected fraud, health, safety and environmental issues. Adequate safeguards are provided against victimization to those who use such mechanism and direct access to the Chairman of the Audit Committee in appropriate cases is provided. The Policy ensures that strict confidentiality is maintained whilst dealing
with concerns and also that no discrimination is made against any person for a genuinely raised concern. The Whistle Blower Policy and Vigil Mechanism can be accessed at https://www. dalmiasugar.com/wp-content/themes/Sugar/assets/policies/ Whistleblower-Policy-and-Vigil-Mechanism.pdf
Adequacy of Internal Financial Controls
Your Company has in place adequate internal financial control systems commensurate with the size of operations. The policies and procedures adopted by your Company ensures the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, adequacy and completeness of the accounting records and timely preparation of reliable financial information.
The internal auditors of the Company conduct regular internal audits as per approved plans; the Audit Committee reviews periodically the adequacy and effectiveness of internal control systems and takes steps for corrective measures whenever required. There are established Cause-Effect-Action (CEA) systems and escalation matrices to ensure that all critical aspects are addressed well in time.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company is committed to ensuring that all are treated with dignity and respect. The Human Resource and the Legal & Secretarial department in collaboration with other functions, ensure protection against sexual harassment of women at 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 has been put in place and Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the financial year 2021-22, one complaint was received by ICC, which was investigated upon and closed upon finding the same being false.
Loans, Guarantees, Security and Investments
Your Company has given loans and guarantees, provided security and made investments within the limits with the necessary approvals and in terms and accordance with the provisions of Section 186 of the Companies Act, 2013. The particulars of such loans and guarantees given, securities provided and investments made are provided in the 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 Foreign Exchange Transactions, is given in Annexure - 6 and forms part of this Report.
Statutory Auditor and their report
M/s NSBP & Co, Chartered Accountants (Firm Registration No.
001075N), Statutory Auditors of the Company hold office till the conclusion of forthcoming 70th Annual General Meeting of the Company. Since their performance as Statutory Auditors has been satisfactory and they have given consent for reappointment for the second term of five years as the Statutory Auditors of the Company and confirmation to the effect that they are eligible and independent for re-appointment, your Directors have recommended their reappointment for the second term of five consecutive years from conclusion of the forthcoming 70th Annual General Meeting till the conclusion of next sixth Annual General Meeting, i.e., 75th Annual General Meeting to be held in the year 2027.
There is no qualification, reservation or adverse remark in their report on Financial 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 Auditors have not reported any matter under Section 143 (12) of the Act during the year under review.
Cost Records and Auditor
Your Company maintains the cost records with respect to its sugar and power business in terms of section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. M/s R. J. Goel & Co., Cost Accountants, were appointed as the Cost Auditors of the Company to conduct Cost Audit for the financial year 2021-22. They had submitted the Cost Audit Report for the financial year 2020-21 on July 30, 2021.
Your Directors have re-appointed M/s R. J. Goel & Co., Cost Accountants, New Delhi, as the Cost Auditors to conduct a cost audit for the financial year ended 2021-2022 at remuneration to be ratified by the shareholders at the forthcoming Annual General Meeting.
Secretarial Auditor and their Report
The Board has, in its meeting held on May 24, 2021, appointed M/s Harish Khurana & Associates, Practicing Company Secretary, as the Secretarial Auditor of the Company for the financial year 2021-22.
As required under the Section 204 of the Companies Act, 2013 and SEBI Listing Regulations, the Secretarial Audit Report in Form MR-3 of the Company for the financial year 2021-22 is attached and marked as Annexure - 7 and forms part of this report. There is no qualification, reservation or adverse remark in the Secretarial Audit Report.
Compliance with Secretarial Standards
The Company has complied with all the applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries of India from time to time and approved by the Central Government.
Awards and Recognition
Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse as a thought leader in the industry. The Awards / recognitions received during the financial year 2021-22 include:
1. Dalmia Bharat Sugar and Industries Limited has received the Industry Excellence Award by The Sugar Technologist's Association of India at the 79th Annual Convention and International Sugar Expo 2021.
2. The Ramgarh Unit of the Company has been selected one of the best performing unit by the Cane Department of UP Government.
3. Dalmia Utsav has been awarded India's Most Trusted Brand Award 2021 by International Brand Consulting Corporation, USA.
Other Disclosures
1. The Company had not accepted any deposits as per Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
2. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operations in future.
3. There was no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016.
4. There was no one time settlement entered into with the Banks or Financial Institutions.
Acknowledgement & Appreciation
Your Directors express their sincere appreciation for the assistance and co-operation received from the Government authorities, financial institutions, banks, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers.
For and on behalf of the Board of Directors
Gautam Dalmia Bharat Bhushan Mehta
Managing Director Whole Time Director and CEO
Dated: May 24, 2022 Place: New Delhi
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