The Directors have pleasure in presenting the 34th Annual
Report of the Company along with Audited Financial Statements, both standalone and
consolidated, for the financial year ended 31st March, 2023.
Financial Highlights
The results for the financial year ended 31.03.2023 and 31.03.2022 are
as under:
(Rs. in Crores)
Particulars |
Standalone |
Consolidated |
|
31.3.2023 31.3.2022 |
31.3.2023 31.3.2022 |
Revenue from operations |
11,811.51 |
9,676.55 |
12,079.51 |
9,849.41 |
Profit before finance cost,
depreciation and tax |
1,763.11 |
1,859.16 |
1,726.10 |
1,888.30 |
Profit before tax |
1,454.49 |
1,539.56 |
1,413.13 |
1,564.98 |
Profit after tax |
961.49 |
1,048.75 |
910.84 |
1,066.13 |
Share of profit/(loss) of
joint venture |
- |
|
- |
1.22 |
Non-controlling interest |
- |
|
- |
|
Other comprehensive income
(after tax) |
12.59 |
(8.41) |
12.75 |
(10.20) |
Total comprehensive income
(after tax) |
974.08 |
1,040.34 |
923.59 |
1,057.15 |
Basic/Diluted - EPS (Rs. per
equity share) |
61.66 |
67.25 |
58.41 |
68.45 |
Other equity |
6,237.18 |
5,494.74 |
6,162.40 |
5,470.45 |
State of Companys Affairs/Performance
During the financial year 2022-23, the Company witnessed an overall
strong operating and financial performance, despite the challenges arising from high
energy prices, inflationary pressures and supply chain disruptions. Russia-Ukraine
conflict added to uncertainties.
The Chlor-Alkali Business performed better supported by higher
realizations despite high energy costs. Vinyl business reported a decline in earnings
driven by higher energy prices and sharp reduction in PVC and Calcium Carbide prices from
their historic highs last year. Shriram Farm Solutions & Fenesta Building Systems
witnessed significant growth led by higher volumes and margins. Sugar business earnings
were lower since the increase in sugarcane prices last season were not fully compensated
by increase in sugar prices.
The Companys total revenues from operation at a standalone level stood
at Rs.11,812 Crores in financial year 2022-23 vs. Rs.9,677 Crores last year. Chloro-vinyl
business registered a growth in revenue of about 9% driven by higher realizations and
higher volumes for Chlor-alkali business partially mitigated by lower vinyl realization.
Revenue for sugar business increased by 21% due to higher domestic and export sales and
higher realization. Shriram Farm Solutions business registered a 9% growth in revenue,
Fenesta business registered a growth of 32% led by Volumes and prices, Fertilizer business
revenue witnessed a growth of ~ 50% led by higher gas prices which is a pass through, and
revenue for Bioseed business also grew by 19% led by volumes.
Profit before depreciation, interest and tax was at Rs.1,763 Crores,
down ~5% over last year. The same was down ~9% on a consolidated basis. The decline was
driven by ~84% decrease in PBDIT of Vinyl due to primarily by realizations which came off
their all-time highs, although the costs continued to remain firm led by energy and carbon
costs. Chlor Alkali business PBDIT recorded an increase of ~15% being driven mainly by a
substantial improvement in margins due to higher average realizations that outpaced the
increase in input rates especially the energy prices and salt. Sugar business recorded a
decline of 20% in PBDIT in current year, higher cost of production due to increase in
sugarcane cost in the last season that was not fully compensated by increase in sugar
prices. Volumes & realization were better than last year. Agri-input business of
Shriram Farm Solutions recorded ~37% growth in PBDIT led by better realization. Fenesta
business also recorded ~70% growth in PBDIT, led by higher volumes and better margins.
Fertilizer business recorded ~62% growth in PBDIT led by upward revision of energy norms
and better gas prices. Bioseed PBDIT also improved significantly. Cement businesses
registered de-growth in PBDIT.
Overall PBDIT margins declined to ~15% from ~19% last year.
Net Profit on standalone basis for financial year 2022-23 was lower by
8% to Rs.961 Crores from Rs.1,049 Crores in the financial year 2021-22. It was down by
~15% on a consolidated basis. Net Debt as on 31s March, 2023 stood at
Rs.681 Crores vis-a-vis Rs.4 Crores as on 31st March, 2023. Net Debt to equity
stood at 0.12x as on 31st March, 2023 vs 0.01x as on 31st March,
2022.
The Company commissioned following projects in the financial year
202223 at an investment of ~ Rs.591 Crores:
• 120 KLD multi-feed distillery with 260 KLD grain attachment at
Ajbapur
• 3000 TCD expansion at Ajbapur complex with full capacity
conversion to refined Sugar (13,500 TCD)
• 8000 TCD capacity conversion to refinery at Hariawan Sugar unit
• Expansion of Anhydrous Aluminum Chloride capacity by 32,850 TPA
The following projects are under implementation at our Bharuch Chemicals complex:
• The 850 TPD caustic soda plant along with 600 TPD flaker
expected to be commissioned by Q2 FY24
• Hydrogen Peroxide facility with a capacity of 56,100 TPA is
progressing as per schedule, expected to be completed by Q2 FY24
• Epichlorohydrine (ECH) facility with a capacity of 52,000 TPA
along with Glycerin purification facility is progressing as per schedule, expected to be
completed by Q3 FY24
• 120 MW coal based new power plant is underway and is expected to
be commissioned in Q1/Q2 FY24
• 50 MW Renewable (Solar+wind) power via SPV route (group captive)
is underway and is expected to be commissioned by Q1 /Q2FY24
• Hydrogen Compressors with total capacity of 0.8 Lakh NM3 per
day, implementation progressing as per schedule to be completed by Q1FY 24
• Anhydrous Sodium Sulphate System (AnSS) is progressing as per
schedule, to be completed by Q1 FY24
The following Projects in other business in the financial year 2022-23
are progressing as per schedule:
• Sugar: Manufacture of Sulphate of Potash (in a 100%
subsidiary) with a capacity of 4600 TPA is progressing as per schedule, expected to be
completed by Q1 FY24
• Fenesta Building Systems: Extrusion plant expansion at
Kota is progressing as per schedule, expected to be completed by Q2 FY24 and Fagade
fabrication plant will get commissioned by Q3 FY24
• SFS: Manufacturing of Water Soluble Fertilizer and Bio
products (in a 100% subsidiary) is progressing as per schedule, expected to be completed
by Q3 FY24
Dividend
Your Directors are pleased to recommend a final dividend @ 180% i.e.
Rs.3.60 per equity share of Rs.2 each for the year ended 31s March 2023,
which, if declared by the Members, the total dividend for the financial year 2022-23 will
aggregate to 700% i.e. Rs. 14 per equity share of Rs.2 each (including 1st
Interim Dividend @ 230% i.e. Rs.4.60 per equity share and 2nd Interim Dividend
@ 290% i.e. Rs.5.80 per equity share declared in October 2022 and January 2023,
respectively).
The Dividend Distribution Policy of the Company as approved by the
Board is available on the Companys website at the following web link:
https://www.dcmshriram.com/sites/default/files/Dividend%20Distribution%20Policv%20-%20Final%20-%20Website.pdf
Transfer to Reserve
During the financial year 2022-23, the Company transferred a total of
Rs.17.50 Crores to Reserves, namely, Rs.12.30 Crores to Cash Flow Hedging Reserve, Rs.5.01
Crores to General Reserve and Rs.0.19 Crores to Storage Fund for Molasses.
Number of Meetings of the Board
The Board met 6 times during the financial year 2022-23 on 5th
May 2022, 17th May 2022, 19th July 2022, 18th August
2022, 19th October 2022 and 20th January 2023.
Report on Performance and Financial Position of Subsidiaries, Associate
and JV Company
The details regarding the performance and financial position of the
Companys Subsidiaries and Associate, etc. are appearing in Form AOC-1 given at Annexure-1
of this Boards Report.
Key updates on subsidiaries/associate of the Company During the
year under review:
• The Company has subscribed and invested in the shares of DCM
Shriram Bio Enchem Limited, DCM Shriram Prochem Limited, DCM Shriram Ventures Limited and
Shriram Agsmart Limited (formerly known as DCM Shriram Agsmart Limited) consequent to
which these companies have become the wholly owned subsidiaries of the Company.
• ReNew Green (GJ Ten) 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 2021-22 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 October 19, 2021. The said framework includes
identification, assessment, response and monitoring system for mitigation of various
risks.
Companys Policy on Directors Appointment and Remuneration The
criteria for Directors appointment has 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 Companys website at the following web link:
http://www.dcmshriram.com/sites/default/files/Remuneration%20Policy0.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 Boards 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 CSR committee, CSR policy and details of
activities/projects approved by the Board are also available on the Companys 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 Companys website at the following web link:
https://www.acmshriram.com/sites/aeTault/Tiles/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 2022-23, 2 cases were reported on sexual harassment which stand resolved at the end
of the financial year.
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 2022-23, there has been no materially
significant related party transaction between the Company and 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 Companys website at the following web link:
https://www.dcmshriram.com/sites/default/files/RPT%20Policv.pdf Material
Subsidiary Policy
The Company has formulated a Policy for determining ‘Material
Subsidiaries, which is available on the Companys website at the following web link:
https://www.dcmshriram.com/sites/default/files/MATERIAL%20SUBSIDIARY%20POLICY%20-%20FINAL.pdf
As on 31s March, 2023, basis the above policy, there
was no "Material Subsidiary" of the Company.
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 2022-23,
covered under Chapter V of the Act is as under:
a) Accepted including renewals during the year: Rs. 4,48,48,498
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 2022-23
2. All the deposits are in compliance with the requirements of Chapter
V of the Act.
Internal Financial Control 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 2022-23.
DCM Shriram Employee Stock Purchase Scheme
The Company has an Employee Stock Purchase Scheme (DCM Shriram ESPS)
duly approved by Members, vide Special Resolution passed on August 13, 2013 and later
aligned in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014.
Thereafter, the Board of Directors at its meeting held on 2nd May 2023, has
recommended amendments in the Scheme to align the same with the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021, to the Members for approval through Postal
Ballot. DCM Shriram ESPS is a secondary market scheme. DCM Shriram ESPS 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.
There are no voting rights exercised on the shares held by the Trust.
The details required as per SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 are available on the Companys website at the following web link:
https://www.dcmshriram.com/DCM-Shriram-ESPS-Report Directors and Key
Managerial Personnel (KMP)
Mr. Ajit S. Shriram and Mr. K.K. Sharma, Directors liable to retire by
rotation at the ensuing Annual General Meeting (‘AGM), and being eligible, offer
themselves for re-appointment.
Approval of the Members is being sought in the ensuing AGM for
reappointment of Mr. Ajay S. Shriram as Chairman and Senior Managing Director and Mr.
Vikram S. Shriram as Vice Chairman and Managing Director of the Company, for a further
period of 5 years w.e.f. 1st November 2023 as recommended by Nomination,
Remuneration and Compensation Committee and Board of Directors.
The Board of Directors at its meeting held on 2nd May 2023,
on recommendation of Nomination, Remuneration and Compensation Committee has approved the
appointment of Mr. Aditya A. Shriram as an Additional Director, and also as Deputy
Managing Director of the Company w.e.f. 2nd July 2023, subject to approval of
the Members. The approval of the Members is being sought in the ensuing AGM for
appointment of Mr. Aditya A. Shriram as Director and also Deputy Managing Director of the
Company for a period of 5 years w.e.f. 2nd July 2023 as recommended by
Nomination, Remuneration and Compensation Committee and Board of Directors.
The requisite details as required to be disclosed in connection with
the appointment/re-appointment of Directors as above are mentioned in the Notice of AGM.
The Company has received declaration from all the Independent Directors
confirming that they meet the criteria of independence as prescribed under Section 149(6)
of the Act and Regulation 16 of SEBI Listing Regulations 2015.
The details of familiarization programme for Independent Directors are
available on the Companys website at the following web link:
https://www.dcmshriram.com/independent-directors
Manner & Criteria of formal annual evaluation of Boards
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 Companys governance practices etc., as per the Companies Act and
SEBI Listing Regulations); |
|
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 Boards 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
NonExecutive Independent Directors, viz., Mr. Pradeep Dinodia as Chairman and 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 Companys 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 Boards
Report.
Secretarial Audit Report
The Board appointed M/s Sanjay Grover & Associates, Company
Secretaries, to conduct the Secretarial Audit for the financial year 2022-23. The
Secretarial Audit Report for the said financial year is attached as Annexure-4 to this
Boards 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 the 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 the 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 the 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 33d 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 2022-23 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 2023, 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 2023 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 Companys 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 2022-23 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 the
valuation from the 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 Customers, 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 |
New Delhi |
AJAY S. SHRIRAM |
2nd May 2023 |
Chairman & Senior
Managing Director |
|
DIN: 00027137 |
+91-9892691696
