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Directors Report of Dhampure Specialty Sugars Ltd.

Mar 31, 2015

The Directors present the 23rd Annual Report and the Audited Accounts for the year ended March 31, 2015.

1. FINANCIAL RESULTS

Standalone

FINANCIAL RESULTS 2014-15 2013-14

Net Sales 34,62,71,418.00 38,19,36,044.00

Other income 35,27,678.00 10,61,340.00 Profit before interest, depreciation and tax

Finance Cost (including Interest) 6,64,130.00 4,54,029.00

Depreciation 44,00,916.00 20,19,397.00

Exceptional Item 0.00 0.00

Profit before Tax 70,44,169.00 1,06,41,248.00 Provision for

- Current Tax 29,59,656.00 33,97,157.00

- Deferred tax (6,24,017.00) (20,643.00)

Profit after Tax 45,94,235.00 70,46,741.00

Extraordinary Item 0.00 0.00

Profit after tax including extraordinary item 45,94,235.00 70,46,741.00

APPROPRIATIONS

Less:

Dividend-Equity shares 0.00 5728960.00

Dividend Tax 0.00 929381.00

General Reserve 12,18,47,708.00 11,05,95,132

2. OPERATIONS

During the year under review total income of the Company was Rs. 34,62,71,418 as against Rs. 38,29,97,384 in the previous year. The Company was able to earn a marginal profit for the year of Rs. 45,94,235 against a profit of Rs. 3,88,400. Your Directors are putting in their best efforts to improve the performance of the Company.

3. STATEMENT OF AFFAIRS OF THE COMPANY

Dhampure Speciality Sugars Ltd is incorporated under the Companies Act, 1956 having registered office at Villageteh Pallawala Tehsil Dhampur Bijnor, Uttar Pradesh-246761. The Company is listed at Bombay Stock Exchange. During the year Company earned a profit of Rs. 45,94,235. Export sales of the company during the year is Rs. 6162289.

4. CHANGE IN NATURE OF BUSINESS OF THE COMPANY

There has been no change in the nature of business of the Company.

5. MATERIAL CHANGES ETC.

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company-31st March, 2015 and the date of this Report.

6. DIVIDEND

The Board of Directors of your Company has decided to retain and plough back the profits into the business of the Company, thus no dividend is being recommended for this year.

7. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 7,16,12,000. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

8. EXPORTS

During the year under review total export sale of the Company was Rs. 6162289 as against Rs. 6707048 in the previous year. Your Directors are putting in their best efforts to improve the performance of the Company.

9. RESEARCH AND DEVELOPMENT

Continuous efforts on R & D and Application Development activities are being made to expand the domestic and export markets particularly in Sugar Industry.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

11. DEPOSITS

The Company has not accepted deposit from the public within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

12. DETAILS OF SUBSIDIARY COMPANIES

During the year S.T. Foods Private Limited was the wholly owned subsidiary company of the company and on 25th December, 2014 the Company sell all the shares. As on 31st March, 2015 the Company has no Subsidiary Company.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to provisions of Section 134 of the Companies Act,2013 read with Rule 8(3) of the Companies (Accounts) Rules,2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as 'ANNEXURE 1'which forms part of this report.

14. LISTING

At present, the equity shares of the Company are listed at BSE Ltd. The annual listing fees for the financial year 2015-16 to BSE has been paid.

15. CORPORATE GOVERNANCE

The Company has complied with the provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. A Certificate from Company Secretary in Practice on compliance of Clause 49 of the Listing Agreement.

Certificate of the CEO/CFO, inter-alia, confirming the correctness of the financial statements, compliance with Company's Code of Conduct, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance Report and forms part of this Report as ANNEXURE 2.

16. DIRECTORS

Pursuant to Section 149(1) of the Companies Act, 2013 the Board of Directors of the Company had on 31st March, 2015 appointed a Women Director Mrs. Praveen Singh as Additional Director. Mrs. Praveen Singh shall hold office upto the date of the ensuing AGM of the Company and, being eligible, offer herself for re-appointment. The Company has also received a notice in writing from a member proposing her candidature for the office of Director along with a deposit of Rupees one lakh. She will be subject to retirement by rotation.

The brief resume of the Directors being appointed/ reappointed, the nature of their expertise in specific functional areas, names of companies in which they have held Directorships, Committee Memberships/ Chairmanships, their shareholding etc., are provided in the report on Corporate Governance forming part of the Annual Report.

Further as per Section 149(5) of the Companies Act, 2013 the Company is required to appoint Independent Directors under Section 149(4) within a period of one year from 1st April, 2014 i.e. the date of commencement of the said Section and Rules made thereunder. Since the Company had already appointed Mr Murli Manohar and Mr Deshraj Singh as Non-Executive Independent Directors subject to retirement by rotation in the past, in terms of Companies Act, 1956 and the Listing Agreement. The Board of Directors in their meeting held on August 13, 2015 after consideration has recommended to reappoint all the aforesaid Directors as Non-Executive Independent Directors within the meaning of Section 149 and 152 [including Section 149(10)] of the new Companies Act, 2013 read with Schedule IV attached thereto and Rules made there under, not subject to retirement by rotation, for a term of 5 (five) consecutive years.

'Mr. Narendra Kumar Gupta, Director liable to retire by rotation and being eligible offer himself for reappointment at the ensuing Annual General Meeting.

Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Act, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6).

17. KEY MANAGERIAL PERSONNEL'S

Name Designation

Mr. Sorabh Gupta Managing Director

Mr. Ilyas Ahmed 1 Chief Financial Officer

Mr. Ziaul Hasan Khan 2 Company Secretary

Ms. Neha Bansal 3 Company Secretary

1. Mr. Ilyas Ahmed resigned w.e.f. 30/05/2015

2. Mr. Ziaul Hasan Khan Resigned w.e.f 31/05/2015

3. Ms. Neha Bansal appointed w.e.f. 18/07/2015

18. POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION

Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached which forms part of this report.

19. PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/EMPLOYEES

There are no employees who are in receipt of remuneration in excess of the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached which forms part of this report.

20. MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 9 (nine) Board Meetings and 4 (four) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013.

21. BOARD EVALUATION

Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors.

A structured questionnaire has been prepared, covering various aspects of the functioning of the Board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board's focus, regulatory compliances and Corporate Governance, etc. Similarly, for evaluation of Individual Director's performance, the questionnaire covers various aspects like his/her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc.

Board members had submitted their response on a scale of 5(excellent) - 1 (poor) for evaluating the entire Board, respective Committees of which they are members and of their peer Board members, including Chairman of the Board.

The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors.

The Nomination and Remuneration Committee has also carried out evaluation of every Director's performance. The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires. The Directors expressed their satisfaction with the evaluation process.

22. COMPOSITION OF AUDIT COMMITTEE

As on 31st March, 2015, the Audit Committee of the Company comprises the following directors: Chairman : Mr. Murli Manohar (Independent Director) Members : Mr. Deshraj Singh (Independent Director) Mr. Narendra Kumar Gupta (Non Executive Director)

23. AUDITORS

STATUTORY AUDIT:

The Auditors, S. Prasad Agarwal & Co, Chartered Accountants, were appointed with your approval at the 22nd AGM to hold such office till the conclusion of the 24th AGM. The Board, in terms of Section 139 of the Act, on the recommendation of the Audit Committee, has recommended for the ratification of the Members the appointment of S. Prasad Agarwal & Co, from the conclusion of the ensuing AGM till the conclusion of the 24th AGM.

The Board, in terms of Section 142 of the Act, on the recommendation of the Audit Committee, has also recommended for the approval of the Members the remuneration of S. Prasad Agarwal & Co, for the financial year 2015-16.

There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditor's Report are self-explanatory.

24. SECRETARIAL AUDITORS

Your Board, during the year, appointed M/s Anjani Kumar & Associates, to conduct secretarial audit of the Company for the financial year ended 31st March, 2015. The Report of M/s Anjani Kumar & Associates in terms of Section 204 of the Act is provided in the "ANNEXURE 3' forming part of this Report. The observations of the (including any qualification, reservation, adverse remark or disclaimer) are self- explanatory except the following:

1. The Company has borrowed the amount of Rs. 702901 from Punjab national bank but in this regards no board resolution has been passed and it also attaract the provision of chapter VI relating to registration of charges and the Company has not filled the CHG-1 for the same.

2. The company has made loan and advances of Rs.142396059 which would attract the provision of section 186(2) of the companies act,2013 but in this regards no approval of shareholders has been obtain by way of postal ballot (Special Resolution) reads with the Rule 22 of companies(Management and Administration)Rules,2014

3. Independent director & Managing Director continuing the office even after expiry of his tenure. Approval of the Board & shareholders vide necessary resolution was obtained.

25. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of section 134 (3) (c) of the Companies Act, 2013, your Directors state that:

(i) In the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanation relating to material departures.

(ii) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates are made so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2015 and of the profits of the Company for the year ended on that date.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The annual accounts of the Company have been prepared on a going concern basis.

(v) Proper Internal Financial Controls were in place and that the Financial Controls were adequate and were operating effectively.

(vi) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

26. CORPORATE SOCIAL RESPONSIBILITY COMMITTEES

The Company is not falling under the Section 135 of the Companies Act. 2013 So the applicability of Corporate Social Responsibility is not applicable on the Company.

27. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.

28. RISK MANAGEMENT POLICY

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Through this programme, each Function and Unit addresses opportunities and risks through a comprehensive approach aligned to the Company's objectives. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

Sustainability is embedded in the Corporate Enterprise Risk Management programme, which gives an opportunity to increase the effectiveness of risk management practices and for improving business efficiency. The Company's social and environmental policies correlate strongly with the risk management strategy and ultimately the financial performance.

This risk management process, which is facilitated by internal audit, covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies. The current risk slate and the comprehensive risk policy have been further redefined during the year. The major risks forming part of the Enterprise Risk Management process are linked to the audit universe and are covered as part of the annual risk based audit plan.

29. VIGIL MECHANISM POLICY

The Company has adopted a Vigil Mechanism Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

30. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as

ANNEXURE 4.

31. RELATED PARTY TRANSACTIONS

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract or arrangement with related parties which could be considered 'material' according to the policy of the Company on Materiality of Related Party Transactions.

Your attention is drawn to the Related Party disclosures set out in Note no. 32 of the Financial Statements

32. STATUTORY STATEMENTS

As per the requirements of the Companies Act, 2013, the following information is given in separate statements annexed hereto, which form part of this report:

a) Energy conservation, technology absorption and foreign exchange inflow/outgo pursuant to section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Account) Rules, 2014. Annexure 1

b) Corporate Governance report Annexure 2

c) Secretarial Audit Report (Form MR 3). Annexure 3

d) Extract of Annual Return pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014. Annexure 4.

33. PREVENTION OF SEXUAL HARRASMENT

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. Its redressal is placed on the intranet for the benefit of its employees. During the year under review, no complaints were reported to the Board.

34. APPRECIATION

Your Directors wish to place on record their appreciation of continued support extended by the dealers, distributors, suppliers, investors, bankers, financial institutions. Your Directors also express their appreciation for the committed services by the employees of the Company.

On behalf of the Board

Sorabh Gupta Murli Manohar

Managing Director Director

DIN: 00227776 DIN: 01173857

Place: New Delhi

Date : 13th August, 2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 22nd Annual Report together with the Audited Accounts of the Company for the accounting year ended on 31st March,2014.

FINANCIAL RESULTS

The working results of the Company are briefly given below :

(Rupees) (Rupees) Current Year Previous Year

Sales & other income 382997384 456676495

Operating Profit before Depreciation & tax 12660645 13514567

Less : Depreciation 2019397 2006162

Profit before tax 10641248 11508405

Less: a) Proposed Dividend 5728960 5728960

b) Provision for Tax

(i) Current Tax 3397157 3676323

(ii) Deferred Tax (20643) (24445)

(iii) Income Tax paid for Previous Year 217993 115385

(iv) Dividend tax 929381 929381

Profit after Tax 388400 1082801

REVIEW AND PROSPECTS

Company produced 993 MT of Invert Sugar during the year as against 952 MT in the previous year. Speciality Sugar produced 595MT during the year against 404 in the previous year.

The Company has achieved a turnover of Rs. 382997384/- doing value addition of speciality sugars and chemicals during the year as against Rs. 456676495/- in the previous year. The overall performance of the company resulting profit during the year. This was achieved by leveraging the brand value of the company, using strategic relationship with the customers and utilization of the logistics infrastructure of the company.

The company has taken major strides in becoming leader in supplying speciality sugar products not only in India but also internationally. The company is focusing to increase the base in domestic market for invert sugar and Speciality Sugars.

At present, we are moving in the directions developing wider product range of Speciality sugar by acquiring technical expertise or by using in house Research & Development, some of these are sugar cane juice, fancy sugar cubes etc.

PUBLIC DEPOSIT

The Company has not accepted any deposits from the public during the financial year.

DIVIDEND

Your Directors recommended a dividend of 8% (Rs.0.80) per equity Share of face value Rs.10- each for your approval.

DIRECTORS

In term of Section 152(6) of the Companies Act, 2013 and articles of Association of the company, Mr. Narendra Kumar Gupta is retiring by rotation but being eligible, has offered himself for reappointment.

DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134 (5) OF THE COMPANIES ACT, 2013

T he Directors'' Responsibility Statement referred to in clause (c) of sub-section (3) shall state that-

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments 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 and loss 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 this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

CORPORATE GOVERNANCE

We are making best efforts to implement the norms, which are promulgated by legislation, or any of the statutory bodies. In line with that, a report on Corporate Governance, along with a certificate from the Statutory Auditors, has been included in the Annual Report, detailing the compliances of corporate governance norms as enumerated in Clause 49 of the Listing Agreements with the Stock Exchanges.

AUDITORS

M/s S. Prasad Agarwal & Co., Chartered Accountants, the retiring statutory Auditors, being eligible, offers themselves for reappointment. They have confirmed that their reappointment if made would be within the limits in accordance with section 141 of the Companies Act, 2013.

THE PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956.

During the year ended March 31, 2014, no employee is drawing remuneration in excess of the amount prescribed under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Rules, 1975.

LISTING OF THE SHARES

Company''s shares are listed at BSE Ltd. And the listing fee for the year 2013-14 has been paid to the BSE Ltd.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required to be included in terms of Section 217 (1)(e) of the Companies Act,1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure.

EMPLOYEE RELATIONS

Employee relations remained cordial during the year under review.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the timely assistance and help extended by the Banks and Financial Institutions. The Board also wish to place on record the valuable contribution of all the officers, staff and workers in ensuring the smooth operations of the company.

On behalf of the Board of Director Dhampure Speciality Sugars Ltd.

Place : New Delhi Murli Manohar Sorabh Gupta Date : 30.08.2014 Director Managing Director (DIN: 01173857) (DIN: 00227776)

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