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 world's 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 year's 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 Company's 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 COMPANY'S 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, DSW's 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 Unit's 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.
Unit's 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 Company's 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 (Ford's 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 ZD's 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 Company's 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 Company's 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
Company's 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
arm's 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 Company's 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 Company's 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 Company's 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 Company's objectives targets.
For and on behalf of the Board