The Directors have pleasure in presenting the 35th Annual Report of the Company along
with the Audited Financial Statements, both standalone and consolidated, for the financial
year ended 31st March 2024.
Financial Highlights
The results for the financial year ended 31st March, 2024 and 31st March, 2023 are as
under:
(Rs. in Crores)
Particulars |
Standalone |
Consolidated |
|
31-Mar-24 |
31-Mar-23 |
31-Mar-24 |
31-Mar-23 |
Revenue from operations |
11,170.89 |
11,811.51 |
11,431.29 |
12,079.51 |
Profit before finance cost, depreciation and tax |
1,055.38 |
1,763.11 |
1,089.22 |
1,726.10 |
Profit before tax |
671.10 |
1,454.49 |
698.74 |
1,413.13 |
Profit after tax |
426.25 |
961.49 |
447.10 |
910.84 |
Share of profit/(loss) of joint venture |
- |
- |
- |
- |
Non-controlling interest |
- |
- |
- |
- |
Other comprehensive income (after tax) |
(7.16) |
12.59 |
(7.71) |
12.75 |
Total comprehensive income (after tax) |
419.09 |
974.08 |
439.39 |
923.59 |
Basic/Diluted - EPS (Rs. per equity share) |
27.33 |
61.66 |
28.67 |
58.41 |
Other equity |
6,545.23 |
6,237.18 |
6,490.75 |
6,162.40 |
State of Company's Affairs/Performance
During the financial year 2023-24, the Company witnessed a decline in its financial
performance, primarily led by drop in product prices in Chloro-Vinyl segment, this was an
industry-wide global scenario. Sugar including Ethanol, Fenesta Building Systems and
Shriram Farm Solutions segments have performed well along with witnessing growth. The
Chlor-Vinyl segment reported a decline in earnings due to sharp reduction in product
prices partially mitigated by lower input costs. Sugar and Ethanol business was stable
despite few regulatory challenges. Fenesta Building Systems & Shriram Farm Solutions
continued to grow with higher volumes and margins. The Company's total revenue from
operations at a standalone level stood at Rs.11,171 Crores in financial year 2023-24 vs.
Rs.11,812 Crores last year. Chloro-vinyl business reported a decline in revenue of about
31% driven by lower product prices and lower volumes. Sugar and Ethanol business increased
by 24% due to higher volumes and higher product prices of Sugar. Fenesta business
registered a growth of 18% led by volumes, Shriram Farm Solutions business registered a
15% growth and Bioseed business registered a 22% growth in revenue. Fertilizer business
witnessed a decline of ~ 24% led by lower gas prices which is a pass through.
Profit before depreciation, interest and tax stood at Rs.1,055 Crores, down ~40% over
last year. The same was down ~37% on a consolidated basis. The decline was mainly on
account of ~82% decrease in PBDIT of Chloro Vinyl primarily due to product prices,
although the costs have declined led by energy costs but it was not commensurate with
decline in product prices, leading to pressure on margins. Other three major businesses
recorded an increase in PBDIT driven by higher volumes, improved product prices and better
margins. Sugar up by 64%, Shriram Farm Solutions up by ~21% and Fenesta up by ~20%.
Bioseed PBDIT improved significantly driven by higher volumes especially in India
business. Fertiliser business recorded a decline of ~53% in PBDIT led by reduction in
energy norms and lower gas prices. Cement businesses also registered an improvement in
PBDIT. Overall PBDIT margins declined to ~10% from ~15% last year.
Net Profit on standalone basis for financial year 2023-24 was lower by 56% to Rs.426
Crores from Rs.961 Crores in financial year 2022-23. It was down by ~51% on a consolidated
basis. Net Debt (consolidated) as on 31st March 2024 stood at Rs.1,434 Crores vis-?-vis
Rs.681 Crores as on 31st March 2023 led by surplus funds being utilized for project capex.
Net Debt to equity stood at 0.23x as on 31st March 2024 vs 0.12x as on 31st March 2023.
The Company commissioned following projects in the financial year 2023-24 at an
investment of ~ Rs.182 Crores:
44 MW (Peak) Renewable (Solar+Wind) power via SPV route (group captive) is
commissioned for meeting the power requirements at Bharuch, Gujarat Unit.
46,00 TPA Manufacture of Sulphate of Potash (in a 100% subsidiary) plant at
Hariawan Sugar complex.
Extrusion plant expansion at Kota and Fa?ade fabrication plant at Hyderabad
w.r.t. Fenesta Business.
Water Soluble Fertiliser and Bio products (plant nutrients) manufacturing (in a
100% subsidiary) at Kota. The following projects are under implementation:
Bharuch
850 TPD caustic soda plant to be commissioned by Q1 FY'25. 600 TPD Caustic soda
Flaker in Q2 FY'25.
56,100 TPA Hydrogen Peroxide facility expected to be completed by Q1/Q2 FY'25.
52,000 TPA Epichlorohydrine (ECH) facility with Glycerin purification facility
is expected to be completed by Q1/Q2 FY'25.
120 MW coal based new power plant is underway and is expected to be commissioned
in June / July'24.
Anhydrous Sodium Sulphate System (AnSS) is expected to be completed by Q2 FY'25.
Sugar
12 TPD Integrated Compressed Biogas Project at Ajbapur Sugar complex is expected
to be completed by Q4 FY'25.
2,100 TCD expansion at Loni complex is expected to be completed by Q3 FY'25.
Dividend
Your Directors are pleased to recommend a Final Dividend @ 130% i.e. Rs.2.60/- per
equity share of Rs.2/- each for the year ended 31st March 2024, subject to approval of the
Members at the ensuing Annual General Meeting ('AGM'). During the year, the Board had also
declared an Interim Dividend @ 200% i.e. Rs.4/- per equity share of Rs.2/- each in
February 2024. Therefore, subject to approval of Final Dividend by the shareholders, the
total dividend for financial year 2023-24 will aggregate to 330% i.e. Rs.6.60/- per equity
share of Rs.2/- each. The Dividend Distribution Policy of the Company as approved by the
Board is available on the Company's website at the following web link:
https://www.dcmshriram.com/sites/default/files/Dividend%20Distribution
%20Policy%20-%20Final%20-%20Website.pdf
Transfer to Reserves
During the financial year 2023-24, the Company transferred a total of Rs.6.13 Crores to
Reserves, namely, Rs.5.97 Crores to General Reserve and Rs.0.16 Crores to Storage Fund for
Molasses.
Status of borrowings by way of issuance of debt securities
The Company was identified as a Large Corporate, pursuant to the erstwhile criteria
prescribed by SEBI, as on 31st March 2021, 31st March 2022 and 31st March 2023. Pursuant
to the same, the Company was required to raise 25% of its incremental borrowings by way of
issuance of debt securities till the financial year 2023-24. However, the Company did not
raise the required amount, as the Company borrows funds after exploring various
products/options in the market and decides based on most optimal cost of funds.
Number of Meetings of the Board
The Board met 5 times during the financial year 2023-24 i.e. on 2nd May 2023, 24th July
2023, 30th October 2023, 31st January 2024 and 27th February 2024.
Report on Performance and Financial Position of Subsidiaries, Associates and JV Company
The details regarding the performance and financial position of Company's Subsidiaries,
Associates, etc. are appearing in Form AOC-1 given at Annexure-1 of this Board's Report.
Key updates on subsidiaries / associates of the Company
During the year under review, ReNew Green (GJ Nine) Private Limited has become
Associate of the Company, as the Company has invested in its equity shares representing
31.20% of its paid-up share capital. The contribution of subsidiaries and associates to
the overall performance of the Company is outlined in Note No. 57 of the Consolidated
Financial Statements.
Risk Management Framework
The Company has in place an effective Risk Management Framework. The Company has also
formulated a Risk Management Policy and further updated the Risk Management Framework
during the financial year 2023-24 to align the same with the amendments in the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "SEBI
Listing Regulations 2015") on Risk Management and also to make it more contemporary
and suitable to the requirements of changing business scenarios. These were approved by
the Board on 31st January 2024. The said framework includes identification, assessment,
response and monitoring system for mitigation of various risks.
Company's Policy on Directors' Appointment and Remuneration
The criteria for Directors' appointment have been set up by the Nomination,
Remuneration and Compensation Committee (NRCC), which, inter-alia, includes criteria for
determining qualifications, positive attributes, independence of a Director,
basis/criteria of remuneration to Directors/KMPs and other matters provided under Section
178 of the Companies Act, 2013 ('the Act') and the SEBI Listing Regulations 2015. The
Company has a Remuneration Policy in place which deals in the remuneration of the
Directors, Key Managerial Personnel (KMPs), Senior Management Personnel (SMPs) and other
employees of the Company. The said remuneration policy is available on the Company's
website at the following web link:
http://www.dcmshriram.com/sites/default/files/Remuneration%20Policy_0.pdf
Corporate Social Responsibility (CSR)
The details of the programs/activities undertaken as CSR along with Annual Report on
CSR activities and the composition of CSR Committee are provided in a separate section,
which forms part of this Board's Report. The Company has a policy on CSR which includes
the guidelines on the major areas in which the Company engages itself with the CSR
activities/projects and the manner of implementation and monitoring the
activities/projects. The composition of the CSR committee, CSR Policy, details of
activities/projects approved by the Board and details of impact assessment, are also
available on the Company's website at the following web link:
https://www.dcmshriram.com/social-responsibility
Vigil Mechanism/Whistle Blower Policy
The Company has in place a Vigil Mechanism/Whistle Blower Policy which is available on
the Company's website at the following web link:
https://www.dcmshriram.com/sites/default/files/Vigil%20Mechanism%20 Policy.pdf
Internal Complaints Committee on POSH
The Company has complied with the provisions relating to constitution of Internal
Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 ("POSH"). During the financial year
2023-24, 1 case was reported on sexual harassment which stands resolved at the end of the
financial year. The Company has a zero tolerance stand on sexual harassment, and is
committed to raise awareness and ensure compliance on this subject.
Cost Records
The Company is required to maintain Cost Records as directed by the Central Government
pursuant to Section 148(1) of the Act and accordingly such accounts and records are
prepared and maintained by the Company.
Related Party Transactions
During the financial year 2023-24, there has been no materially significant Related
Party Transaction between the Company and/or its related parties which requires disclosure
in Form AOC-2.
The Company has formulated a Policy on dealing with Related Party transactions, which
is available on the Company's website at the following web link:
https://www.dcmshriram.com/sites/default/files/RPT%20Policy.pdf
Material Subsidiary Policy
The Company has formulated a Policy for determining Material Subsidiaries, which is
available on the Company's website at the following web link. As on 31st March 2024, basis
the above policy, there was no "Material Subsidiary" of the Company.
https://www.dcmshriram.com/sites/default/files/MATERIAL%20SUBSIDIA
RY%20POLICY%20-%20FINAL.pdf
Particulars of Loans, Guarantees or Investments
The details of Loans, Guarantees and Investments covered under the provisions of
Section 186 of the Act and relevant rules thereunder are given in the Notes to the
Financial Statements.
Fixed Deposits
1. The details relating to deposits for the financial year 2023-24, covered under
Chapter V of the Act are as under:
a) Accepted including renewals during the year: Rs.24,08,74,399
b) Remained unpaid/ unclaimed as at the end of the year: Nil
c) There has been no default in repayment of deposits or payment of interest thereon
during the financial year 2023-24.
2. All the deposits are in the compliance with the requirements of Chapter V of the
Act.
Internal Financial Controls with respect to Financial Statements
The Company has in place adequate Internal Financial Controls with respect to financial
statements. No material weakness in the design or operation of such controls was observed
during the financial year 2023-24.
DCM Shriram Employee Stock Purchase Scheme
The Company has an Employee Stock Purchase Scheme ("DCM Shriram ESPS") duly
approved by Members, which has been aligned with the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021. DCM Shriram ESPS is a secondary market scheme and
provides for grants of equity shares through Trust, purchased from secondary market, to
the eligible employees, as may be decided by the Nomination, Remuneration and Compensation
Committee, from time to time. The shareholders, vide Special Resolution passed on 4th June
2023 through postal ballot, have approved further acquisition of equity shares from the
secondary market, upto 2% of the paid-up equity share capital, for the purpose of the
scheme. There are no voting rights exercised on the shares held by the Trust. The details
required as per the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,
2021 are available on the Company's website at the following web link:
https://www.dcmshriram.com/DCM-Shriram-ESPS-Report
Directors and Key Managerial Personnel (KMP)
During the year, Mr. Ajay S. Shriram was re-appointed as Chairman & Senior Managing
Director, and Mr. Vikram S. Shriram was re-appointed as Vice Chairman & Managing
Director, for a period of 5 years w.e.f. 1st November 2023, which has been approved by the
shareholders.
Mr. Aditya A. Shriram was appointed as a Director on the Board, liable to retire by
rotation, and also as the Deputy Managing Director of the Company, for a period of 5 years
w.e.f. 2nd July 2023, which has been approved by the shareholders. Mr. Ajit S. Shriram and
Mr. Aditya A. Shriram, Directors liable to retire by rotation, retire at the ensuing AGM,
and being eligible, offer themselves for re-appointment.
During the year under review, Mr. K.K. Kaul ceased to be a Whole-time Director and as
Director, due to completion of his tenure on 1st July 2023.
Based on change of nomination received from Life Insurance Corporation of India (LIC),
Ms. Sarita Garg, Nominee Director of LIC upto 31st October 2023, ceased office from the
said date. In her place, Mr. Rabinarayan Mishra was appointed as the Nominee Director of
LIC on the Board w.e.f. 1st November 2023, liable to retire by rotation, which has been
approved by the shareholders.
The 2nd term of Independent Directors, namely, Mr. Pradeep Dinodia, Mr. Sunil Kant
Munjal and Mr. Vimal Bhandari, will be ending at the ensuing AGM. The Board places on
record deep appreciation for their valuable advice and exceptional guidance. Based on the
recommendation of Nomination, Remuneration & Compensation Committee (NRCC), the Board
has recommended the appointment of Mr. Pranam Wahi, Ms. Seema Bahuguna, Dr. Simrit Kaur
and Mr. Vipin Sondhi as Independent Directors of the Company, for a period of 5 years from
the conclusion of the ensuing 35th AGM i.e., 16th July 2024, for approval of the
Shareholders at the ensuing AGM. Based on recommendation of NRCC, the Board has
recommended the appointment of Mr. Pradeep Dinodia as Non-Executive Non-Independent
Director of the Company, liable to retire by rotation, effective from the conclusion of
the ensuing 35th AGM of the Company, for approval of the Shareholders at the ensuing AGM.
The said persons are eligible for appointment/re-appointment in the respective capacity
and the Company has received their consent(s) and requisite disclosure(s), etc. All the
details required to be disclosed in connection with the appointment/re-appointment of
Directors as above, are appearing in the Notice of AGM.
The Company has received declaration from all the existing and proposed Independent
Directors confirming that they meet the criteria of independence as prescribed under
Section 149 of the Act and Regulation 16 of SEBI Listing Regulations 2015. In the opinion
of the Board, the said Directors possess the integrity, expertise and experience including
proficiency required for their appointment as Independent Director in the Company.
Mr. Sameet Gambhir, Company Secretary & Compliance Officer, has resigned from the
Company to pursue some other opportunities. His resignation has been accepted in the Board
Meeting held on 6th May 2024 and will be effective from a mutually agreed date. The Board
has appointed Ms. Swati Patil Lahiri, General Manager (Corporate Laws), as the Acting
Company Secretary & Compliance Officer effective from the cessation of office of Mr.
Sameet Gambhir.
The details of familiarization programme for Independent Directors are available on the
Company's website at the following web link:
https://www.dcmshriram.com/independent-directors
Manner & Criteria of formal annual evaluation of Board's performance and that of
its Committees and Individual Directors
In compliance with requirements of the Act and the SEBI Listing Regulations 2015, the
formal annual performance evaluation of the Board, its Committees and Individual Directors
has been conducted as under:
A. Manner of evaluation as recommended to the Board by the Nomination, Remuneration and
Compensation Committee ("NRCC")
1. The Chairman of the Board consulted each Director separately about the performance
of Board, Committees and other Directors and sought inputs in relation to the above. The
Chairman then collated all the inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman of the Board, the Chairman of NRCC collated
the inputs from Directors about his performance as a Director and as Chairman of the
Board/Company and as Chairman/Member of the Board Committees and shared the same with the
Board.
The Board as a whole discussed the inputs on performance of Board/Committees/Individual
Directors and performed the evaluation.
B. Criteria of evaluation as approved by the NRCC
The aforesaid evaluation was conducted as per the criteria laid down by the NRCC as
follows :
Performance of |
Evaluation Criteria |
(i) Board as a whole |
Structure of Board including Composition/ Diversity/ Process of appointment/
qualifications/ experience, etc.; |
|
Fulfillment of functions of the Board (for instance guiding corporate strategy, risk
policy, business plans, corporate performance, monitoring Company's governance practices
etc., as per the Companies Act, 2013 and SEBI Listing Regulations 2015); |
|
Meetings of Board (Number/Manner of board meetings) held during the year including
quality/quantity/timing of circulation of agenda for Board Meetings, approval
process/recording of minutes and timely dissemination of information to Board; and |
|
Professional Development and Training of Board of Directors as required. |
(ii) Board Committees |
Composition of Committee; |
|
Fulfillment of functions of the Committee with reference to its terms of reference,
the Companies Act, 2013 and the SEBI Listing Regulations 2015; and |
|
Number of Committee meetings held during the year. |
(iii) Individual Directors |
Fulfillment of responsibilities as a director as per the Companies Act, 2013, the SEBI
Listing Regulations 2015 and applicable Company policies and practices; |
|
In case of the concerned director being Independent Director, Executive Director,
Chairperson of the Board or Chairperson or member of the Committees, with reference to
such status and role; |
|
In case of Independent Directors, fulfillment of the independence criteria as
specified under applicable Regulations and their independence from the management; |
|
Board and/or Committee meetings attended; and General meetings attended. |
Particulars of Employees and Managerial Remuneration
The details required under Section 197(12) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect
of Directors, KMPs and other employees of the Company, are given in Annexure-2 of this
Board's Report. However, in terms of Section 136(1) of the Act, the Report and Financial
Statements are being sent to the Members and others entitled thereto, excluding the
Statement of Particulars of Employees as required under Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended. The said
statement is available for inspection by the Members at the Registered Office of the
Company during business hours on working days up to the date of the ensuing Annual General
Meeting.
Composition of Audit Committee
As on the date of this report, the Audit Committee comprises of 4 Non-Executive
Independent Directors, viz., Mr. Pradeep Dinodia as Chairman Ms. Ramni Nirula, Mr. Sunil
Kant Munjal and Mr. Pravesh Sharma as Members.
Composition of other Committees
Details regarding composition of other Committees of the Board are mentioned in the
Corporate Governance Report forming part of this Annual Report.
Annual Return
In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and
Administration) Rules, 2014, the Annual Return of the Company is available on the
Company's website at the following web link: https://www.dcmshriram.com/annual_reports
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo are given in Annexure-3 of this Board's Report.
Secretarial Audit Report
The Board had appointed M/s RMG & Associates, Company Secretaries, New Delhi (Firm
Registration no. P2001DE016100) as Secretarial Auditors of the Company for the financial
year 2023-24. The Secretarial Audit Report for the financial year 2023-24 received from
the Secretarial Auditors, is attached as Annexure-4 to this Board's Report. The
Secretarial Audit Report does not contain any qualification or reservation or adverse
remark or disclaimer.
Secretarial Standards
The Company is in compliance with the Secretarial Standards issued by the Institute of
Company Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) and
General Meetings (SS-2).
Management Discussion and Analysis
A separate section on Management Discussion and Analysis on the operations of the
Company forms part of this Annual Report.
Business Responsibility and Sustainability Report
A separate section on Business Responsibility and Sustainability Report prepared
pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations 2015 forms part of this
Annual Report.
Corporate Governance
The Company is committed to adhere to the best Corporate Governance practices. A
separate section on Corporate Governance, along with a certificate from the Statutory
Auditors of the Company regarding compliance of conditions of Corporate Governance as
stipulated under the SEBI Listing Regulations 2015, forms part of this Annual Report.
Statutory Auditors
Pursuant to Section 139 of the Act, M/s Deloitte Haskins & Sells, Delhi, a firm of
Chartered Accountants (FRN No.015125N) were appointed as Statutory Auditors of the Company
by the Members in its 33rd Annual General Meeting (AGM) held on 19th July 2022 for a
period of five years i.e. from the conclusion of 33rd AGM till the conclusion of 38th AGM.
The Reports given by the Statutory Auditors on the financial statements (Standalone and
Consolidated) of the Company for the financial year 2023-24 are forming part of this
Annual Report. The said Reports are unmodified and there are no qualifications,
reservation, adverse remark or disclaimer.
Directors' Responsibility Statement
Your Directors state that:
a) In preparation of annual accounts for the year ended 31st March 2024, the applicable
accounting standards have been followed and there are no material departures;
b) They have 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 as at 31st March 2024 and of the profit of the
Company for that period;
c) They 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 fraud and other irregularities;
d) They have prepared the annual accounts on a going concern basis;
e) They have laid down internal financial controls as followed by the Company and that
such internal financial controls are adequate and are operating effectively; and
f) They have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
Significant and material orders
There are no significant and material orders passed by any regulators or courts or
tribunals impacting the going concern status and the Company's operations in future.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with its workmen in
all its divisions, which enabled it to achieve this performance level on all fronts.
Other Disclosures
(i) No material change or commitment has occurred after close of the financial year
2023-24 till the date of this Report, which affects the financial position of the Company.
(ii) There are no proceedings initiated / pending against the Company under the
Insolvency and Bankruptcy Code, 2016 which impact the business of the Company.
(iii) There were no instances of one time settlement which require valuation from Banks
or Financial institutions.
(iv) There were no instances of any fraud reported by the Auditors under Section
143(12) of the Act.
Acknowledgements
The Directors wish to thank all Customers, Suppliers, the Government Authorities,
Financial Institutions, Bankers, Other Business Associates, Stakeholders and Members for
the co-operation and encouragement extended to the Company. The Directors also place on
record their deep appreciation for the contribution made by the employees at all levels.
|
On behalf of the Board |
|
AJAY S. SHRIRAM |
New Delhi |
Chairman & Senior Managing Director |
6th May 2024 |
DIN: 00027137 |