dcm shriram industries ltd share price Directors report


The Directors have pleasure in presenting the Annual Report and the Audited Financial Statements of your Company for the year ended 31st March 2023 together with the Reports of the Auditors and the Board of Directors thereon.

Economic scenario

As the pandemic receded a war broke out in Europe in February 2022. As a result, prices of food, fuel and fertilizer rose sharply due to the impact on supply chains. Inflation rates accelerated, central banks of advanced countries struggled to respond with monetary policy tightening to address the situation. In the second half of 2022, commodity prices, which had peaked, declined giving relief from the acute pressure situation. As 2023 rolled in, China, which has a huge influence on world economy, opened up swiftly reversing its zero covid policy. These augured well for the world economy. However, an earthquake of severe magnitude struck Turkiye and Syria on 6th February, 2023 inflicting unimaginable devastation and misery on those two countries particularly on Turkey. Over 50,000 people lost their lives. This also had an adverse impact on the economy which was in the path of recovery. The comity of nations stepped in, in unison to extend relief to the affected people. Despite the adversities, India has stood out as a beacon of hope for the world. Buoyancy in GST and other revenue streams are indicators of a robust recovery in most of the sectors. Emphasis given to capital expenditure in the previous budgets have started yielding results. The year was special for India, which celebrated 75th year of its Independence. The Country became the worlds 5th largest economy measured in Dollars. In fiscal year 2023 India has seen growth at 7%, making it the fastest growing large economy. India achieved a GDP growth of 6.9% in the year 2022-23 as per World Bank, slightly lower than the projections. The momentum is encouraging. It is another jewel in the crown of the Country that it has been named the President of the G-20 nations. The Group represents 75% of the world GDP and 66% of the world population. The Country has an enormous responsibility and stellar role in channelizing the members of the Group to address issues facing the world particularly that of climate change, health and world peace. MSMEs and startups are a thrust area for the governments at Central and State levels. The potential of the sector to generate employment and to contribute to GDP is extremely high. The level of digitalization achieved by the Country, particularly in monetary transactions, is a matter of envy for any of the so-called developed countries. In this year India attained one more distinction as it has become the most populous country in the world, overtaking China. 68% of the population, according to reports comprises of working group of 15-64 years. While higher population can be a constraint factor on resources it can also be a blessing in disguise if channelized appropriately to contribute to the growth story. It is a matter of satisfaction that despite the slowdown post covid, geopolitical conflicts and the devastating earthquake in Turkey and Syria, the Company maintained its performance at satisfactory levels.

Financial Summary

The Company achieved a turnover of Rs.2367 cr against Rs.2146 cr. in the previous year. The gross profit at Rs.126.19 cr against is in line with the previous years Rs.124.75 cr. Net profit was Rs.60.26 cr compared to Rs.65.74 cr. in the previous year.

Appropriation and Dividend

The Board of Directors had recommended an interim dividend of Re.1.00 (50%) per equity share of Rs.2 for the year 2022-23 in the Board meeting held on 14.02.2023, which was paid in March 2023. Interest rates are going up and the economy may decelerate. Considering this, need for conserving resources for debt servicing and possible expansion / modernization of operations, as a conservative measure, the Board of Directors did not recommend any final dividend for the year. The closing balance of the retained earnings of the Company, after accounting for the interim dividend for the year 2022-23, amounting to Rs.498.97 cr, was carried forward in the P & L Account which includes the net profit of Rs. 60.26 cr. for the year 2022-23. The Dividend Distribution Policy of the Company as approved by the Board is available on the Companys website at the following web link: https://dcmsr.com/wp-content/uploads/2022/08/Dividend-Distribution-Policy.pdf

Auditors Report

There are no qualifications, reservation, or adverse remarks or disclaimer in the Auditors Reports to the Members on the Annual Financial Statements for the year ended on 31.03.2023.

The Auditors have not reported any fraud pursuant to Section 143(12) of the Companies Act, 2013.

Secretarial Audit Report

M/s. Chandrasekaran Associates, Company Secretaries, carried out the Secretarial Audit for the year 2022-23 pursuant to Section 204 of the Companies Act, 2013. A copy of their Report in Form MR-3 as per Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure – 1. There is no qualification in the Report.

THE STATE OF COMPANYS AFFAIRS

Sugar

The global sugar market attained a consumption volume of about 178.52 million tons in 2022. The market is expected to reach 189.50 million tons by 2028, at a growth rate (CAGR) of 1% during 2023-28. Currently, with the abatement of Covid, the food and beverages sector has again become major driver of sugar consumption and is expected to create a positive impact on global sugar Industry.

Although the sugar market remains saturated in developed economies, such as North America and Western

Europe, it is showing promising growth in the emerging regions. Driven by rising disposable income, urbanization, and changing food habits the demand for sugar-based products in developing markets such as India, China and Middle East is showing strong growth. As per the latest estimates India is expected to produce 33 million tons of sugar in the current season (October 2022 September 2023) after accounting for reduction of 4.0 million tons of sugar diverted towards ethanol, as against 27.5 million tons of estimated domestic consumption of sugar.

As a measure to balance the price stability of sugar in the Country and the financial position of sugar mills, Government of India has allowed export of 6 million tones Sugar in the season (October 22- September 23) against 11 million tons in the previous season. In the Sugar Export Policy for Sugar Season 2022-23 Government has announced sugar mill-wise export quota for all sugar mills in the Country, based on average production of sugar mills in last three years and average production of sugar in the Country in last three years.

By allowing sugar exports, Government has protected the interest of cane farmers and sugar mills, since mills will be able to take benefit of favourable international sugar price scenario, which will help in timely payment of cane dues of farmers in current sugar season 2022-23. This will also reduce working capital costs of mills due to reduction in sugar stocks.

Another focus area is production of ethanol in the Country, which is a priority area to reduce dependence on fuel imports and support green and renewable energy movement. Higher ethanol prices encouraged sugar factories to divert more sugar towards ethanol. Diversion of sugar towards ethanol production during Ethanol Supply Year (ESY) 2022-23 is expected to be 4.5 million tones.

The Government is encouraging sugar mills and distilleries to enhance their distillation capacities and is supporting them to avail loans from banks. For such loans, interest subvention at 6% or 50% of the interest charged by the banks, whichever is less, is subsidized by the Government.

In the last 6 years, the Central Government has taken multiple and timely initiatives in sugar sector, enabling sugar mills to stand on their own and become a self-sustaining sector. During Sugar Season 2022-23, sugar mills were not given any subsidy for sugar production/marketing and even in the current season, sugar sector is expected to perform well even without any financial support from Government of India in the form of subsidy.

Facilitating diversion of sugar to ethanol production and export of surplus sugar as per availability, Government of India has taken care of interest of about 5 crore sugarcane farmer families as well as 5 lakh sugar mill workers along with a whole ecosystem of sugar sector, including ethanol distilleries, taking the industry on a growth trajectory.

Daurala Sugar works successfully Exported Sugar Quota of 43798 ton allocated to it for the sugar season 22-23 till March 2023. Probability of Government allowing further exports beyond 6 million tons is quite remote. Till April 2023 the international sugar prices were continuously showing an upward trend and hovering around USD 670 per MT for white London Sugar#5.

Last year, DSW has changed its process from Sulphitation to Defco Remelt Phosphatation. This year, the

Unit has carried out some jobs to further stabilize the process and for energy conservation. The new process is running stably.

During FY 22-23, DSW produced 2.178 lakh MT of sugar by crushing 23.18 lakh MT cane. The sugar recovery is 9.40% after diversion of around 4 lakh Qtl. of sugar to B-Heavy molasses. The recovery is lower as compared to last year, mainly due to weather conditions and unexpected disease of top borer in cane.

Measures are being taken to address this problem in the next year crop.

We have exported the entire export quota allocated to us at a reasonably high price as our sugar is meeting all the international standards. The export realization was significantly better than domestic market price during the year 2022-23. As the Distillery capacity has been increased last year, DSWs Ethanol production capacity has also been increased and the Unit has produced 36359 KL of alcohol during FY 2022-23. The Central Government has laid down a target of 20% blending of Ethanol with petrol by 2025, which will give further fillip to the sector.

Around 50% of levy molasses, will be used in the Units country liquor plant and remaining molasses will be converted to ENA and sold to country liquor bottlers.

This season, we have diverted 100% B-Heavy Molasses as against last year 63%. It will increase the Ethanol production and better profitability of Distillery.

Rayon

Shriram Rayons achieved highest ever sales turnover and profits during the year with increase in sales realisation and various cost reduction measures. The export volumes suffered in the second and third quarter of FY 2022-23. Reduction in production by European customers due to energy constraint during ongoing Russia Ukraine War resulted in a low offtake during the above said period and posed recessionary trend in the market. Units volumes were also in downward trend in FY 2020-21 and 2021-22 due to recessionary economic conditions followed by Covid-19 pandemic. Adverse global demand supply situation affected the prices of raw materials, chemicals etc.in upward trajectory. But the Unit was able to off-set rise in cost of inputs with improved sales realisation.

The Unit implemented a project for capacity expansion of Rayon in a phased manner. Although the Project was delayed due to poor market conditions, lockdowns and restrictions on movement due to the spread of Covid-19, it is now nearly completed.

The Unit also manufactures Nylon Chafer fabric which is sold mainly to domestic tyre companies and Carbon Disulphide for captive consumption and sale in domestic market. The Unit achieved higher sales in these products during the year. The operating margins were also improved with increase in sales realisation despite increase in input prices for Carbon Disulphide. Unit is exploring options to add new customers for business. Maximising agro fuel usage and moving towards zero fossil fuel consumption helped the Unit in controlling the energy cost up to a certain extent. More energy conservation measures are being adopted considering future challenges of increase of agro fuel cost.

The Unit continued receiving appreciations and awards from various forums for its productivity, highest export in the segment, top performance in Technical Textiles, energy conservation, PAT Cycle-II, best employer & safety etc.

Shriram Rayons continues to maintain quality and standards of its management systems and was recognised for the same, viz. Quality (ISO-9001:2015), Environment (ISO-14001:2015) and Occupational Health and Safety Management Systems (ISO-45001-2018). The Unit participated in assessment of CSR and sustainability by independent international bodies namely ECOVADIS and CDP (Carbon Disclosure Project).

The effluent and emission control facilities with real time monitoringa re maintained and continuously upgraded to comply with the norms.

Chemicals

The buoyancy in the Chemicals Businesses continued because of logistic constraints in China due to Covid restrictions and other reasons.

The Companys focus has been on optimizing sales realization by aggressive marketing/ dispatch of products with high margin.

In spite of higher inputs prices due to hardening of energy prices all over the world, the limit could restrict its impact by better realization on our products. Parallelly, we have been focused on cost reduction through process improvements resulting in lower energy consumption, improved process efficiencies and operational cost control. Investment made in previous year have started yielding results in the form of better plant operation efficiencies.

Engineering Projects

DSIL is slowly establishing its name in the Defence Equipment Manufacturing industry. Our products are being tried and appreciated by the defence and police forces.

The Armoured Vehicle project which had slowed down due to the exit of Ford India is back on track. DSIL has now gone into collaboration with Ford Motor Company, USA. The basic documentation formalities have been completed. The MoU and collaboration Agreement are in final stages with Ford USA. We have also received an informal confirmation that Ford, USA has got a go ahead for our collaboration after the internal due diligence. Ford will be supporting the Company from Thailand. The Company has also collaborated with RMA, Thailand (Fords Global Export Distributor). Two stripped down Ford Ranger vehicles have been bought and received in India for prototyping. The designing of the vehicles with help from GAIA Automotives, Israel is in its final stages. Concurrently, we have also started the process of registering our new vehicle with ARAI, Pune for Type Certification. The equity investment in Zyrone Dynamics, Turkiye is progressing well. The First, Second and Third tranches were transferred to Zyrone Dynamics in September 2021, January 2022 and October 2022. As per the Share Subscription and Shareholders Agreement, the Company will get 30% of the share capital in Zyrone Dynamics for a total value of US $ 1.05 million in five tranches. Zyrone Dynamics has completed all the formalities for the first three tranches. It has now commenced the development of the Minimum Viable Product (MVP) of

Variable Volume Concept UAV Platform, the main requirement to pay the fourth tranche. The development is in advanced stage and the MVP is likely to be ready soon for our inspection and assessment. The total holding of class A shares by the Company presently is 9,797 constituting 14.04% of ZDs paid up capital. DSIL and Skylock, Israel have signed a MOU for partnership to make Counter Drone Systems in India. DSIL will have the exclusive rights for manufacturing and marketing their systems in India. All existing inquiries for the Counter Drone Systems will also be routed through the Company. A Counter Drone System has also been bought to showcase the counter drone capability to the Defence and Police Forces around the Country. A definitive agreement is in process. DCM Shriram Industries Limited has now viable products in all three verticals to showcase to our customers. We are aggressively pursuing sales in India and abroad and hope to make breakthrough in the leads we are following in this financial year.

Material changes and commitments

No material changes or commitments have occurred between the end of the financial year to which the financial statements relate and the date of this Report, affecting the financial position of the Company.

Subsidiary/Associate Companies

The Company has three non-material wholly owned subsidiaries, Daurala Foods & Beverages Pvt. Ltd., which is not carrying on any operations presently, DCM Shriram Fine Chemicals Limited, incorporated in September 2021 and DCM Shriram International Limited, incorporated in September 2022, both of which are yet to commence business. DCM Hyundai Limited is an associate company. The required information regarding the performance and financial position of the subsidiaries and associate company are annexed in

Form AOC - I as annexure to the Annual Financial Statements for the year ended 31.03.2023. There has been no change in relationship of subsidiaries/ associate company during the year.

Annual Return

A copy of Annual Return for the year 2021-22, is available on the Companys web link https://dcmsr.com/ wp-content/uploads/2022/09/Annual-Return.pdf. The Annual Return for the year 2022-23 will be uploaded after filing with the Registrar of Companies in due course.

BOARD MEETINGS AND DIRECTORS Meetings of the Board

During the year 2022-23 five board meetings were held. The dates of the meetings, attendance, etc., are given in the Corporate Governance Report annexed hereto.

Declaration u/s 149(6) of the Act

All the Independent Directors (IDs) have given declarations u/s 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, confirming that they meet the criteria of independence as laid down under the said Section/ Regulation. The Directors of the Company have also confirmed that they were not disqualified to be appointed as directors as per Section 164(2) of the Companies Act, 2013 and that they have not been debarred by SEBI or any other statutory authority to hold an office of director in a company.

Familiarization Programme for Independent Directors

As part of the familiarization programme for directors, a visit of the Board of Directors was arranged on 29.03.2023 to Shriram Rayons, Kota. The directors visited various plants and other establishments at

Shriram Rayons Complex, Kota, accompanied by senior technical officers, who explained the operations to the directors. The directors also visited the Dr. Bansi Dhar School and other processes at the Complex.

The directors interacted with the workers representatives and senior officers. On the occasion the directors also witnessed a live demonstration of ZEBU, the Light Bullet Proof Vehicle and a Drone, both developed by the Engineering Projects Section of the Company. The directors appreciated the maintenance, hygienic conditions and safety measures adopted by the Unit at the plants and in the complex as a whole. A Familiarization Programme for IDs, laid down by the Board has been posted on the Companys weblink – https://dcmsr.com/wp-content/uploads/2023/05/Familiarization-Programme-for-Independent-Directors.pdf

Policy on Board Diversity

The Board of Directors in its meeting held on 30.05.2016 had approved a Policy on Board Diversity, recommended by the Nomination & Remuneration Committee (NRC) as required under the SEBI (LODR) Regulations, 2015. A copy of the same has been posted on the Companys weblink - https://dcmsr.com/ wp-content/uploads/2021/04/Policy-BoardDiversity.pdf

Directors Appointment and Remuneration

Appointment of directors on the Board of the Company, except nominee director, is based on the recommendations of the Nomination & Remuneration Committee. NRC identifies and recommends to the

Board, persons for appointment on the Board, after considering the necessary and desirable competencies. NRC also considers positive attributes like integrity, maturity, judgement, leadership position, time and willingness, financial acumen, management experience and knowledge in one or more fields of finance, management, sales, marketing, administration, research, etc.

Independent Directors should fulfill the obligations of independence as per the Act and Regulation 25 of the SEBI (LODR) Regulations, 2015 in addition to the general criteria stated above. All the Independent Directors of the Company are enrolled in the Databank of IDs maintained by Indian Institute of Corporate Affairs, an entity under the Ministry of Corporate Affairs. Their registrations are renewed when due. It is ensured that a person to be appointed as a director has not suffered any disqualification under the Act or any other law to hold such an office.

The directors of the Company are paid remuneration as per the Remuneration Policy of the Company, the gist of which is given under the heading Remuneration Policy as part of this Report. The details of remuneration paid to the directors during the year 2022-23 are given in the Corporate Governance Report forming part of this Report.

Changes in Directors or KMP

There has been no change in the composition of the Board of Directors or KMPs during the year.

Shri Madhav B. Shriram, Managing Director, retires by rotation pursuant to Section 152(6) of the Companies Act, 2013 at the ensuing Annual General Meeting and being eligible offers himself for reappointment. An item has accordingly been included in the Notice for the ensuing Annual General Meeting.

The present term of Shri Sanjay C. Kirloskar, Independent Director, concludes on 31.08.2023. As per section 149(10) of the Companies Act, 2013, an independent director can hold office for two terms of five consecutive years on the board of a company. Accordingly, the Board of Directors on recommendation of the Nomination & Remuneration Committee has proposed reappointment of Shri Sanjay C. Kirloskar as an

Independent director for another term of five years from 01.09.2023 to the shareholders for approval. An item has accordingly been included in the Notice for the ensuing Annual General Meeting.

The present term of Shri Alok B. Shriram, Sr. Managing Director & CEO, and Shri Madhav B. Shriram, Managing Director, concludes on 30.09.2023. The Board, considering their performance and on recommendation of the

Nomination & Remuneration Committee reappointed them for another term of 5 years w.e.f. 01.10.2023 on present terms, subject to approval of the shareholders at the ensuing Annual General Meeting. Items have accordingly been included in the Notice for the ensuing Annual General Meeting.

Annual evaluation of Board and Directors

As required under the Act and the SEBI (LODR) Regulations, 2015, evaluation of the performance of the Independent Directors, other non-executive directors, Board as a whole, Executive Directors, the Chairman and the Committees during the year 2022-23 was carried out by the Board of Directors, based on the criteria laid down by the NRC in the year 2017, in the meeting held on 29.03.2023. A copy of the criteria for evaluation is annexed as Annexure 2 hereto.

Based on the criteria, the Board reviewed the performance of the Board as a whole, particularly structure, quality of deliberations in the meetings, functions, performance of the management and feedback etc. The

Board also reviewed the performance of the Committees, Chairman and Directors and observed: - that despite the downward trend in economic conditions due to post Covid impact and the turbulence in certain parts of the world, the Company has performed well. - that the Board continued to adhere to highest standards in all above areas, and the performance was constructive and met the test of objectivity in achieving the goals of the Company.

- that the Committees carried out their functions according to the requirements mandated under the Companies Act/ SEBI Regulations, pursuant to which they were constituted, effectively. The Board particularly appreciated the Audit Committee which met regularly and acted as a watch dog in matters concerning finance, RPTs and internal financial controls.

- that all the directors including IDs have given very valuable inputs/contribution in achieving the goals of the Company. It was noted that the Executive Directors continued to perform with utmost responsibility in achieving the operating targets and the IDs and other directors contributed by providing valuable inputs and guidance.

- that the Independent Directors individually and collectively functioned constructively in the best interest of and beneficial to the Company and the stakeholders.

- that the IDs adhered to the Code of Independence as per Schedule IV of the Act and to the restriction regarding pecuniary relationship with the Company during the period under evaluation.

The IDs in a separate meeting held on the same day prior to the Board Meeting, reviewed and evaluated the performance of non-Independent Directors.

The IDs also reviewed the quality, quantity and timeliness of flow of information between the Company management and the Board, which are necessary for the Board to effectively and reasonably perform its duties.

The performance evaluation by the Board and the Independent Directors did not find any matter requiring follow up action.

Directors Responsibility Statement

As required under Section 134

(3)(c) of the Act, your Directors 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 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 or 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;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal Financial Controls

A comprehensive and effective internal financial control system is followed by the Company at all its establishments. This is further strengthened by an internal audit process under the overall supervision of the Audit Committee of the Board. Services for internal audit are outsourced. Qualified and experienced professionals are engaged to ensure effective and independent evaluation of, inter alia, the internal financial controls.

The Audit Committee lays down the schedule for internal audit. Internal audit reports are placed before the Committee with management comments. Suggestions are implemented and reported to the Audit Committee. Apart from the above, an effective budgeting and monitoring system is also in place. Budgets are reviewed by Audit Committee and approved by the Board. The operating results are compared and monitored with the approved budgets periodically. An Executive Committee comprising of senior management team meets every month, reviews all aspects of operations and chalks out remedial measures and strategies, regularly. Monthly operations review reports comparing budgets with actual performances are placed before the Executive Committee for internal assessment and also before the Board on a quarterly basis.

An effective communication/ reporting system operates between the Units, Divisions and Corporate Office to keep various establishments abreast of regulatory changes and ensure compliances.

To further strengthen the Internal Financial Controls and business transformation through digitization, the Company has implemented an advanced SAP S/4 HANA in all business segments.

Loans, Guarantees and Investments

The particulars of loans given by the Company are given in Note no. 15 of the Standalone Financial Statements for the year ended 31.03.2023. The Company has not made any investment or provided any guarantee covered u/s 186 of the Companies Act, 2013, during the year except surplus funds placed in liquid funds of Mutual funds on short term basis and the funds provided to DCM Shriram Fine Chemicals Limited, a wholly owned subsidiary, incorporated to explore and set up a fine chemicals plant at Dahej, Gujarat.

Related Party transactions

There has been no materially significant related party transaction between the Company and the Directors, Key Management Personnel, the subsidiary, or the relatives except for those disclosed in the financial statements Note No.45 of Notes to Accounts, which are at arms length basis and not material. Accordingly, Form AOC -2 does not form part of this Report.

The Board had framed a Policy on Related Party Transactions which is revised in line with the legal requirements. A copy of the same is placed on the Companys weblink: https://dcmsr.com/wp-content/ uploads/2022/02/Policy-on-Related-Party-Transactions.pdf

CSR Activities

Pursuant to Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules,2014, as amended from time to time, an Annual Report on CSR activities in the prescribed proforma is annexed – Annexure 3. The Company was required to spent Rs.187.22 lakh, being 2% of the average net profits of the preceding 3 years during the year under review which have been fully utilized. The CFO has confirmed to the Board that funds mandated were spent as per approval of the CSR Committee and Board.

Risk Management

As the Company has become one of the top 1000 companies, based on market capitalization (993) as on 31.03.2022, the Company inter alia was required to constitute a Risk Management Committee, comprising of Directors and Senior Personnel. Accordingly, the Board constituted a Risk Management Committee in the meeting held on 30.05.2022 and also laid down a Risk Management Policy as required under Regulation 17 of SEBI (LODR) Regulations, 2015 on 08.08.2022. The Committee is required to oversee the implementation of risk management measures and report to the Board through Audit Committee. The Committee met twice during the year 2022-23.

The Board of Directors in its meeting held on 30.01.2006 undertook a comprehensive review of the risk assessment and minimization procedures/ policies followed by the Company at its various operations. While taking note of the same, the Board laid down that a half yearly status report of the risk assessment and steps taken to minimize the risks be placed before the Board. Such a report in respect of all the operations of the

Company is now being placed before the Board through the Risk Management and the Audit Committees. In view of the diversified business, there are no significant elements of risk, which in the opinion of the Board may threaten the existence of the Company.

The Board of Directors while reviewing the existing risk assessment procedures, laid down a Risk Management Policy.

Public Deposits

Details relating to deposits, covered under Chapter V of the Act:

i) Accepted during the year: - Rs. 5.00 Lakh. ii) Remained unclaimed as at the end of the year: - Nil (There is no deposit claimed but not paid) iii) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved-

a) At the beginning of the year b) Maximum during the year Nil c) At the end of the year

iv) The details of deposits which are not in compliance with the requirements of Chapter V of the Act: - Nil

Significant Material Orders Passed by Regulators or Courts or Tribunals

No significant orders have been passed by any Regulators, Courts or Tribunals during the year impacting the going concern status and Companys operations in future.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The required information as per Rule 8 (3) A, B & C of Companies (Accounts) Rules, 2014 is annexed

Annexure 4.

ReMuneRAtIOn POLICY

The Board of Directors in its meeting held on 14.08.2014 had laid down a Remuneration Policy as recommended by the Nomination & Remuneration Committee (NRC) relating to remuneration of the Directors, Key Managerial Personnel (KMP), Sr. Management Personnel (SMP) and other employees of the Company. The Remuneration Policy is in accordance with Section 178 of the Act and the Rules made there under. The Policy was revised by the Board in its meeting held on 29.10.2019 on recommendations of the NRC. The Remuneration Policy is posted on the Companys weblink. https://dcmsr.com/wp-content/ uploads/2021/04/remuneration-policy.pdf

The salient features of the Policy are given below:

i. Guiding principle

The guiding principle of the Policy is that the remuneration and other terms of employment should effectively help in attracting and retaining committed and competent personnel. The remuneration packages are designed keeping in view industry practices and cost of living.

ii. Directors

Non-executive directors are paid remuneration in the form of sitting fees for attending Board/ Committee meetings as fixed by the Board from time to time subject to statutory provisions. Presently sitting fee is Rs.60,000 per Board meeting and Rs.30,000 per Committee meeting. In addition, Non-executive

Directors are to be paid commission on profits of up to 1% of the net profit of the Company, computed in the manner laid down u/s 198 of the Companies Act, 2013, in such amount and proportion as may be decided by the Board of Directors.

Remuneration of Executive Directors (Whole-time Directors) including Managing Director(s) is fixed by the Board of Directors on the recommendation of the NRC, subject to the approval of the shareholders.

The NRC, while recommending the remuneration, considers pay and employment conditions in the industry, merit and seniority of the person and paying capacity of the Company. The remuneration, which comprises of salary, perquisites, performance-based reward/profit-based commission and retirement benefits as per Company Rules, is subject to the limits laid down under the Companies Act, 2013.

iii. Key Managerial Personnel and Sr. Management Personnel

Appointment, remuneration and cessation of service of Key Managerial Personnel are subject to the approval of the NRC and Board of Directors. Appointment and cessation of service of Sr. Management Personnel are approved by the Senior Managing Director on the recommendation of the concerned

Executive Director, keeping in view the Remuneration Policy.

iv. Other employees

The remuneration of other employees is fixed from time to time by the Management as per the guiding principle laid down in the Remuneration Policy and considering industry standards and cost of living. In addition to salary, they are also provided perquisites and retirement benefits as per schemes of the Company and statutory requirements, where applicable.

Managerial Remuneration

The information required as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to remuneration of Directors, KMP and comparisons are annexed Annexure 5. It is affirmed that the remuneration is as per the Remuneration Policy of the Company.

Statement of particulars of the top ten employees in terms of remuneration including employees who were in receipt of remuneration which was not less than Rs.102 lakh or more per annum in aggregate during the year 2022-23 is annexed

Annexure 6.

Audit Committee

The Audit Committee presently comprises of six members including four IDs, one Non-Executive Director and one Executive Director. Shri P.R. Khanna is the Chairman and Shri S.B. Mathur, Shri S.C. Kumar, Mrs. V. Kavitha Dutt, all of them IDs, Shri Manoj Kumar, Non-Executive Director and Shri Madhav B. Shriram, Managing Director are Members. There was no instance of the Board not accepting the recommendation of the Audit Committee.

Vigil Mechanism

Pursuant to Section 177 of the Act and Regulation 22 of SEBI (LODR) Regulations, 2015, the Board of Directors, on the recommendation of the Audit Committee, adopted a Vigil Mechanism (Whistle Blower Policy).

The Policy has been revised by the Board in its meeting held on 27.06.2020. The revised Policy has been circulated among the employees and also has been put on the weblink of the Company: https://dcmsr.com/ wp-content/uploads/2021/04/whistleblower-policy.pdf The Policy provides a channel to the employees to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policies. The mechanism 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 in exceptional cases.

Share Capital

During the year, the Company has not issued any share capital with differential voting rights, sweat equity or ESOP nor provided any money to the employees or trusts for purchase of its own shares.

The Company has not made any public offer of shares during the year. Statutory Auditors

As per Section 139 of the Companies Act, 2013, a firm of auditors can be appointed as Statutory Auditors for two terms of five year each. Accordingly, the shareholders in their meeting held on 08.08.2022 had reappointed M/s B S R & Co., LLP, Chartered Accountants Gurugram (Firm Registration No.101248W/W100022), whose first term of 5 years expired at the conclusion of the last AGM, for another term of 5 years from the conclusion of the last AGM to hold office till the conclusion of the AGM in the year 2027.

Cost Auditors

M/s Ramanath Iyer & Co., Cost Accountants, (Regn No.13848), 808, Pearls Business Park, Netaji Subhash Place, Pitampura, Delhi 110034, who were appointed as Cost Auditors of the Company for the year 2021-22, submitted the Cost Audit report, due for filing on or before 07.09.2022, to the Central Government on 29.08.2022. They have been reappointed as Cost Auditors for the year 2023-24. A resolution for ratification of their remuneration for the year 2023-24, as required under the Companies Act, 2013, forms part of the Notice convening the ensuing AGM.

The Company maintains cost records as specified by the Central Govt. under sub- section (1) of Section 148 of the Companies Act, 2013.

Corporate Governance

Reports on Corporate Governance and Management Discussion & Analysis are annexed Annexure 7.

Anti-Sexual Harassment Policy

Pursuant to the "Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013", the Company constituted Internal Complaints Committees at all its workplaces. There has not been any instance of complaint reported in this regard to any of the Committees during the year. The Committees were reconstituted effective from 01.07.2020 for 3 years.

The Company periodically review the policy and submit a status report annually to the Competent Authority under Section 22 of the said Act.

Applicability of IBC Code

Neither any application was made nor any proceedings were pending under the IBC Code during the year.

One time Settlements

The Company has not entered into any one time settlement of debt during the year under review.

DISCLOSuRe unDeR SeCRetARIAL StAnDARDS

Applicable Secretarial Standards i.e. SS-1 and SS-2 relating to ‘Meeting of the Board of Directors and ‘General Meetings, respectively, have been duly followed by the Company.

Acknowledgment

The Directors acknowledge the continued co-operation and support received from the banks and various government agencies, and all our business associates. The Directors also place on record their appreciation of the contribution made by employees at all levels. Their conduct and support are of utmost in achieving the Companys objectives targets.

For and on behalf of the Board

(Madhav B. Shriram) (Alok B. Shriram)
Place: New Delhi, DIN: 00203521 DIN: 00203808

Date: 25th May, 2023

Managing Director Sr. Managing Director