01 May 2017 | Livemint.com

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Last Updated: Mar 31, 03:56 PM
Dhampur Sugar Mills Ltd.

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  • 217.05 -3.05 (-1.39%)
  • Vol: 56176
  • BSE Code: 500119
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  • Vol: 336739
  • NSE Code: DHAMPURSUG
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Dhampur Sugar Mills Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

Company's Philosophy on Corporate Governance:

The Company possesses an ethical mindset about the values of good Corporate Governance, that involves support from diversified categories of people and agencies. The following attributes are significant for good Corporate Governance:

a) Transparency in policies and action.

b) Independence to develop and maintain a healthy work culture.

c) Accountability for performance.

d) Responsibility towards the society and for its core values.

e) Growth for stakeholders.

The Company makes an honest endeavour to uphold these attributes in all its operational aspects.

Board of Directors:

The Company's Board of Directors comprises promoters, executives, non-executives, nominee(s) and Independent Directors. There are 12 Directors on the Board as on 31st March, 2015, of whom five are whole-time Directors, including Chairman and Vice Chairman.

During the period from 1st April, 2014 to 31st March, 2015, four Board meetings were held on:

1) 21st May, 2014

2) 9th August, 2014

3) 12th November,2014

4) 10th February, 2015

Brief resume of the Directors being reappointed, nature of their expertise in specific functional areas and names of companies in which they hold directorship and the membership of committees of the Board are furnished here under:

a) Shri V. K. Goel: Chairman of the Company . He is well known Sugar Technologist and Entrepreneur with vast experience of around 54 years. He is the source of inspiration for every innovation and R&D and has placed the Company among the global leaders in sugarcane technology. He has been the President of Indian Sugar Mills Association (ISMA), an apex body of sugar manufacturers of India. An avid sportsperson, he is also the Founder President of Delhi Squash Association.

He has been associated with the Company as a promoter Director since 1960.

Age : 74 Years

Qualification : Chemical Engineer

Experience : 54 years

Directorship in other companies: 1) Goel Investments Limited, 2) Delton Cables Limited 3) Saraswati Properties Limited, 4) Khandelwal Laboratories Private Limited

Committee/Executive position held in other Companies: None

b) Shri A. K. Goel: Vice Chairman of the Company, has vast experience of over 45 years in the Sugar and Paper Industry. He has been President of Indian Sugar Mills Association (ISMA) and also the President of U.P. Sugar Mills Association (UPSMA). He is also the Founder President of Indian Agro Paper Mills Association (IAPMA). He is a dedicated bridge player and Founder President of Contract Bridge Association. He has represented India at the Bridge Olympiad and the Bermuda Bowl. He has been associated with the Company as a promoter Director since 1969.

Age : 69 Years

Qualification : Commerce Graduate

Experience : 45 years.

Directorship in other companies: 1) Goel Investments Limited Committee/Executive position held in other Companies: None

c) Shri Gaurav Goel, Managing Director of the Company, having more than a decade, Sugar Industry experience. He is currently the director of Indian Sugar Exim Corporation Limited and the member of a committee of Indian Sugar Mills Association and The Associated Chambers of Commerce and Industry of India (ASSOCHAM) He was also the President for the year 2006-07 of the Young Entrepreneurs Organization, Delhi Chapter.

He is a Business Management Graduate from United Kingdom and has been associated with the Company since 1994. He is responsible for the overall management of Financial aspects. He takes avid interest in Tennis, Bridge and Reading.

Age : 42 Years

Qualification : Bachelor in Business Management

Experience : 18 years

Directorship in other companies: 1) Goel Investments Limited 2) Shudh Edible Products Ltd. 3) Mangalam Cement Limited 4) Decon Mercantile Pvt. Ltd. 5) Francis Klein and Company Bombay Private Limited 6) Star Metal Refinery Pvt. Ltd. 7) YPO (Delhi Chapter) U/s 25 8) Dhampur International Pte. Ltd. (Singapore), 9) Venus India Asset-Finance Private Limited, 10) Dhampur Global Pte Ltd. (Singapore), 11) Venus India Structured Finance (Offshore) Fund Limited , Tortola 12) Venus India Structured Finance Master Fund Limited, Tortola 13) Indian Sugar Exim Corporation Limited

Committee/Executive position held in other Companies: 3

d) Shri Gautam Goel, Managing Director of the Company, having more than a decade, Sugar Industry experience.

He has been the President of Indian Sugar Mills Association from 2011-12. He has been associated with the Company since 1994 and is responsible for the technical and working aspect of operations. He is a dedicated Sports person with special interest in squash and has represented Delhi in National Tournaments.

Age : 41 Years

Qualification : Graduate

Experience : 18 years .

Directorship in other companies: 1) Goel Investments Limited 2) Shudh Edible Products Ltd. 3) Saraswati Properties Ltd 4) Sonitron Ltd. 5) Dhampur International Pte Ltd. (Singapore) 6) Dhampur Global Pte Ltd. (Singapore)

Committee/Executive position held in other Companies: Nil

e) Smt. Nandita Chaturvedi, Independent Director is graduate from Indore University. She is working as Horticulture Consultant for Indian Airforce at Race Course, Delhi, The Laburnum Condominium Project at Sushant Lok, Gurgaon, Santushti Complex, which is under Airforce and Landscaped Airhouse at the Airchief's residence at Akbar Road, Delhi. She is also attached to Miele at Jasola Business Centre, Delhi.

Audit Committee:

The powers, role and terms of reference of the Audit Committee covers the areas as contemplated under Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013 and such other functions as may be specifically delegated to the Committee by the Board from time to time. The powers include investigating any activity within its terms of reference; seeking information from any employee; obtaining outside legal or other professional advice; and securing attendance of outsiders with relevant expertise, if it considers necessary. The role includes oversight of Company's financial reporting process and disclosure of financial information to ensure that the financial statement is correct, sufficient and credible; recommending the appointment, re-appointment, if required, replacement or removal of statutory auditors, fixation of audit fees and approval of payment for any other services, as permitted; reviewing the adequacy of internal audit function; discussing with internal auditors any significant findings and follow-up thereon; reviewing with the management annual and quarterly financial statements before submission to the Board for approval; approval or any subsequent modification of any transactions of the Company with related parties; review and monitor the auditors independence and performance and effectiveness of audit process; scrutiny of inter corporate loans and investments, if any; evaluation of internal financial controls and risk management system; and reviewing the functioning of the Whistle blower mechanism.

The constitution of the Audit Committee also meets with the requirements under Section 177 of the Companies Act, 2013. The members of the Audit Committee comprise three Independent Non-Executive Directors and the Managing Director.

Shri Arhant Jain, Executive President (Finance)-cum Company Secretary also acts as the Secretary to the Committee.

During the period from 1st April, 2014 to 31st March, 2015, four committee meetings were held on:

1) 21st May, 2014

2) 9th August, 2014

3) 12th November,2014

4) 10th February, 2015

The Committee, inter-alia, reviewed the financial statements including Auditors' Reports for the year ended 31st March, 2015 and recommended its adoption, records of related party transactions, reports related to compliance of laws and risk management.

Nomination and Remuneration Committee

The powers, role and terms of reference of the Nomination and Remuneration Committee covers the areas as contemplated under Clause 49 of the Listing Agreement and Section 178 of the Companies Act, 2013, besides other terms as may be referred by the Board of Directors. The role includes formulation of criteria for determining qualifications, positive attributes and independence of a director and recommending to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees; formulation of criteria for evaluation of Independent Directors and the Board; devising a policy on Board diversity; and identification of persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

Remuneration Policy

The objective and broad framework of the Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, for potential, and for growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the longer term interests of the Company and its shareholders, promoting a culture of meritocracy and creating a linkage to corporate and individual performance, and emphasising on line expertise and market competitiveness so as to attract the best talent. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results. The Nomination and Remuneration Committee recommends the remuneration of Directors and Key Managerial Personnel, which is approved by the Board of Directors, subject to the approval of shareholders, where necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the directors, key managerial personnel and other employees of the quality required to run the Company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. The remuneration to directors, key managerial personnel and senior management personnel should also involve a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company.

During the period from 1st April, 2014 to 31st March, 2015, three committee meetings were held on:

1) 21st May, 2014

2) 9th August, 2014

3) 12th November,2014

Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the performance evaluation of its own performance and of the Board Committees, viz. Audit Committee, Nomination and Remuneration Committee, CSR Committee and Stakeholders' Relationship Committee as well as evaluation of performance of Directors individually. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, corporate governance practices and stakeholders' interests, etc. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, meeting risk management & competition challenges, compliance & due diligence, financial control, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Nomination & Remuneration Committee also carried out evaluation of every director's performance. The Directors expressed their satisfaction with the evaluation process.

Policy on Board diversity

The Board of Directors shall have the optimum combination of Directors from the different areas / fields like production, Management, Quality Assurance, Finance, Sales and Marketing, Supply chain, Research and Development , Human Resources etc or as may be considered appropriate.

Stakeholder's Relationship Committee

The " Stakeholder's Relationship Committee comprises of Shri A. K. Gupta, Chairman; Shri Priya Brat; and Shri Harish Saluja.

The Committee, inter-alia, reviews issue of duplicate certificates and oversees and reviews all matters connected with the Company's transfers of securities. It looks into redressal of shareholders'/ investors' complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends, among others.

It oversees the performance of the Company's Registrar and Transfer Agent, and recommends measures for overall improvement in the quality of investor services. Besides, it monitors implementation and compliance of the Company's Code of Conduct for Prohibition of Insider Trading in pursuance of SEBI (Prohibition of Insider Trading) Regulations, 1992. The Board delegated the power of approving transfer of securities to Shri Gaurav Goel, the Company's Managing Director.

Besides the committee shall have such terms of reference, role, responsibility and powers as specified in Section 178 of the Companies Act, 2013 and as specified in the listing agreement, as amended from time to time."

During the period from 1st April, 2014 to 31st March, 2015, four Committee meetings were held on:

1) 21st May, 2014

2) 9th August, 2014

3) 12th November,2014

4) 10th February, 2015

Familiarisation Programme For Directors

The Company has put in place a system to familarise the Independent Directors about the Company, its products, business and the on-going events relating to the Company.

The newly appointed director is explained his/her role, duties, function and responsibilities expected of him while acting as Director of the Company.

The directors have been explained the compliance required from them under Companies Act, 2013 and Clause 49 of the Listing Agreement entered in to with Stock Exchanges.

Subsidiary

The Company does not have any material subsidiary as defined under clause 49 of the Listing Agreement. However Policy for Determining Material subsidiaries has been formulated and uploaded on the website of the Company i.e www.dhampur.com .

Status of Investors' Grievances

The total number of correspondence/complaints received is 213 and all of them have been dealt with to the satisfaction of shareholders during the year ended 31st March, 2015 and no demat request/transfer was pending as on that date.

Compliance Officer

Shri Arhant Jain, Executive President (Finance) & Company Secretary, is the Compliance Officer of the Company.

The Company has made separate e-mail id i.e. investordesk@ dhampur.com for the purpose of investors which is also given at the website of the Company.

Corporate Social Responsibility

As per the requirement of Companies Act, 2013, The Committee named as Corporate Social Responsibility Committee (CSR Committee) was constituted on 21st May, 2014 which comprises of three directors Shri VK Goel, Chairman, Shri Gaurav Goel, Managing Director and Shri Ashwani K Gupta, Independent Director.

The committee's responsibility is to assist the board in discharging its social responsibilities by way of formulating and monitoring implementation of the framework of Corporate Social Responsibility policy as specified in Schedule VI of the Companies Act, 2013.

The Company formulated CSR policy, which is uploaded on the website of the Company (weblink <http://dhampur.com/Policies.aspx>)

The CSR committee met one time during the year on 23rd May, 2014.

Independent Directors Meeting

During the year under review, The Independent Directors met on 10th February, 2015, interalia, to:

1. Review the performance of Non-Independent directors and the Board as a whole;

2. Review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors;

3. Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Disclosures and Affirmation

I. Compliance with Mandatory Requirements:

The Company is in compliance with all mandatory requirements under clause 49 of the Listing Agreement.

II. Related Party Transactions

All transactions entered into with related parties during the financial year were in the ordinary course of business and on arm's length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant related party transactions during the year.

Related Party transactions have been disclosed in the notes to accounts forming part of financial statements.A statement in summary form of transactions with related parties in the ordinary course of business and on arm's length basis is palced before the Audit Committee periodically for its review.

Pursuant to the requirement of Clause 49 of the Listing Agreement, The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website at http:// www.dhampur.com

None of the transactions of the Company with related parties were in conflict with the interest of the Company.

III. Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI, or any statutory authority, on any matter related to capital markets, during the last three years During the last three years:

There were no penalties, strictures imposed on the Company by Stock Exchange or SEBI, or any statutory authority, on any matter related to capital markets, during the last three years.

IV. Whistle Blower policy

The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. The reportable matters may be disclosed to the Whistle Blower Committee made for the purpose. Employees may also report to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee.

V. The Company has followed the Accounting standards referred to in section 133 of Companies Act, 2013 and other applicable laws and regulations for the preparation of financial Statements. The Significant accounting policies applied have been set out in the notes to the financial statements.

VI. The Company has laid down procedures for Risk Assessment and Minimization, and the same is periodically reviewed by the Board. The Company has adequate internal control systems to identify risk and ensuring their effective control.

VII. There was no public issue or rights issue during the year. However, the Company had issued 30,00,000 equity warrants each having an option to convert into equity shares of C10 each at a premium of C 23 each, during the previous year. Holder of 15,00,000 equity warrants has exercised this conversion option during the year and consequently, the 15,00,000 equity shares were allotted.

Means of Communication

I. The Company's Quarterly results in the proforma prescribed by the Stock Exchanges pursuant to clause 41 of the Listing Agreement are approved and taken on record by the Board of Directors and submitted to the stock exchanges.

II. The results are normally published in Business Standard/ Financial Express/Economics Times (in English) and Jan Satta/ Amar Ujala/Veer Arjun (in Hindi).

III. The Company's financial results and official press releases are displayed on Company's website (www.dhampur.com ) within the time prescribed in this regard.

IV. The Company's website also displays Presentations, if any made to the media, analysts, institutional investors, fund managers, etc. from time to time.

V. The quarterly results, shareholding patterns, periodical compliances and all other corporate communications to the Stock Exchanges viz. National stock Exchange of India Limited and BSE Limited are filed electronically to them through NEAPS portal on NSE and BSE listing Centre with BSE.

General Shareholder Information

80th Annual General Meeting:

Date: 11th September, 2015

Time: 2 p.m.

Venue: Registered office at Dhampur, Dist.Bijnor (U.P.)

Tentative financial calendar

Board meeting to approve quarterly financial results: Period quarter ending Proposed Board meeting dates

30th June, 2015 End July, 2015

30th September, 2015 End October, 2015

31st December, 2015 End January, 2016

31st March, 2016 End May, 2016

Date of Book Closure

04.09.2015 to 11.09.2015

Listing on stock exchanges

- BSE Limited (BSE)

- The National Stock Exchange of India Limited (NSE)

The annual listing fees for the year 2015-16 have been duly paid to all the above stock exchanges.

Stock exchanges Stock code

- The Bombay Stock Exchange Limited (BSE): 500119

- The National Stock Exchange of India Limited (NSE) :Dhampursug

The equity shares available for dematerialization are as follows ISIN No.INE041A01016 with NSDL and CDSL.

Registrars & Share Transfer Agents

M/s Alankit Assignments Limited,

Alankit House,

2E/21 Jhandewalan Extension, New Delhi 110 055

Ph: 011-42541953, Fax:011-42541201 E-mail : rta@alankit.com

Share Transfer System

At present, the share transfers which are received in physical form are processed and the share certificates returned within the stipulated period from the date of receipt, subject to the documents being valid and complete in all respects.

As per the SEBI circular, it has become mandatory for transferee(s) to furnish a copy of his/her/their PANCARD for registration of transfer of shares in Physical form.

Dematerialisation of shares

Over 99.15% of the outstanding shares have been dematerialized up to 31st March, 2015. Trading in equity shares of the Company is permitted only in dematerialised form w.e.f October/November, 2000 as per notification issued by the Securities and Exchange Board of India (SEBI).

Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity:

The Company had issued 30,00,000 Equity Warrants having conversion option in to Equity Shares in previous year. The option has been exercised for 15,00,000 Equity Warrants as a result 15,00,000 Equity Shares were allotted.

The remaining 15,00,000 warrants are due for conversion in September, 15 on exercise of option by the warrants holders.

Code of Conduct

The Company has adopted a code of conduct for its Board of Directors and Senior Management Personnel and the same has been posted on the Company's website.

Non Mandatory Requirements

The Board: The Company has an Executive Chairman.

Shareholders Rights: The quarterly/half-yearly results are published in the newspapers and hosted on the Company's website www.dhampur.com <http://www.dhampur.com> and are filed to the Stock Exchanges electronically through NEAPS portal on NSE and BSE listing Centre with BSE Limited . The same are not sent to shareholders individually.

Audit Qualifications: The Company is always striving towards ensuring the unqualified financial statements.

Separate posts of Chairman and Managing Director /CEO:

The Company has different persons for the post of Chairman and Managing Director/CEO.

Plant Locations:

Sugar units:

Dhampur, Dist. Bijnor (U.P.) Asmoli, Dist. Sambhal (U.P.) Mansurpur, Dist. Muzaffarnagar (U.P.) Rajpura, Dist. Sambhal (U.P.) Meerganj, Dist. Bareilly (U.P)

Distillery/Chemical units:

Dhampur, Dist. Bijnor (U.P.) Asmoli , Dist. Sambhal (U.P)

Co-generation units:

Dhampur, Dist. Bijnor (U.P.) Asmoli, Dist. Sambhal (U.P.) Mansurpur, Dist. Muzaffarnagar (U.P.) Rajpura, Dist. Sambhal (U.P.) Meerganj, Dist. Bareilly (U.P)

Address for Correspondence:

Dhampur Sugar Mills Limited,

241 Okhla Industrial Estate, Phase - III, New Delhi 110 020

Ph: 011-30659400, Fax: 011-26935697 E

-mail: investordesk@dhampur.com  CIN: L15249UP1933PLC000511

Declaration on the Code of Conduct

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, I, Arhant Jain, Executive President (Finance) & Company Secretary of Dhampur Sugar Mills Limited, declare that all the Board Members and Senior Executives of the Company have affirmed their compliance with the Code of Conduct during the year ended 31st March, 2015.