You are here » Home » Companies » Company Overview » DCM Shriram Ltd

DCM Shriram Ltd.

BSE: 523367 Sector: Others
NSE: DCMSHRIRAM ISIN Code: INE499A01024
BSE LIVE 15:48 | 20 Sep 462.50 13.10
(2.91%)
OPEN

458.50

HIGH

467.85

LOW

458.15

NSE 15:55 | 20 Sep 462.35 12.10
(2.69%)
OPEN

461.05

HIGH

466.95

LOW

459.05

OPEN 458.50
PREVIOUS CLOSE 449.40
VOLUME 29021
52-Week high 467.85
52-Week low 195.85
P/E 11.57
Mkt Cap.(Rs cr) 7,511
Buy Price 462.50
Buy Qty 48.00
Sell Price 0.00
Sell Qty 0.00
OPEN 458.50
CLOSE 449.40
VOLUME 29021
52-Week high 467.85
52-Week low 195.85
P/E 11.57
Mkt Cap.(Rs cr) 7,511
Buy Price 462.50
Buy Qty 48.00
Sell Price 0.00
Sell Qty 0.00

DCM Shriram Ltd. (DCMSHRIRAM) - Director Report

Company director report

The Directors have pleasure in presenting the 28th Annual Report of theCompany along with Audited Financial Statements both standalone and consolidated fortheyear ended 31st March 2017.

Financial Highlights

The results forthe year ended 31.3.2017 and 31.3.2016 are as under:

Particulars

Standalone

Consolidated

31.03.2017 31.03.2016 31.03.2017 31.03.2016
Total revenue from operations 6060.94 5984.91 6117.19 6030.23
Profit before finance cost depreciation tax and exceptional item 860.09 594.85 817.86 545.64
Profit before exceptional item and tax 676.13 415.08 632.70 362.28
Exceptional item : 85.12 -
Provision for impairment of investment in foreign subsidiaries (Bioseed business)
Profit before tax 591.01 415.08 632.70 362.28
Profit after tax 522.07 352.99 552.33 300.43
Share of profit/(loss) of joint venture - 0.03 0.71
Non-controlling interest - (0.68) 0.61
Other comprehensive income (after tax) (7.47) (2.36) (3.58) (0.73)
Total comprehensive income (after tax) 514.60 350.63 548.10 301.02
Basic/Diluted - EPS (Rs. Per equity share)
- Before exceptional item 37.06 21.73 33.97 18.58
- After exceptional item 32.14 21.73 33.97 18.58
Retained earnings- opening balance 2070.22 1773.08 1979.03 1733.26
Add/(less):
Profit for the year 522.07 352.99 551.68 301.75
Dividends (including dividend tax) paid during the year (113.37) (54.74) (113.37) (54.74)
Others (6.56) (1.11) (6.42) (1.24)
Retained earnings - closing balance 2472.36 2070.22 2410.92 1979.03

State of Company's Affairs/Performance

The Company recorded a healthy financial performance in FY17 driven by Sugar andChemicals Business. Other businesses witnessed stable performance.

The Company's total revenues from operations stood at Rs. 6117 Crores in FY17 vs. Rs.6030 Crores last year. This was despite suspension of trading in imported bulkfertilisers (DAP/MOP) for FY17 which had a revenue of Rs. 688 Crores in FY16. Excludingthis the revenue increased by about 14.6% over last year.

EBITDA for FY17 stood at Rs. 817.9 Crores asignificant improvement from Rs. 545.6Crores recorded last year. This improvement was lead by better volumes and margins inSugar business and higher volumes in Chemicals business. Other businesses except ShriramFarm Solutions also recorded improvement in earnings.

Our Agri-input businesses of Shriram Farm Solutions and Bioseed were impacted by lowerdemand and change in sowing patterns towards lower value inputs a result of twoconsecutive years of poor and erratic monsoons leading to weak farmer economics. OverallEBIDTA margins improved to 13% from 9% last year.

In the Standalone accounts (no impact on Consolidated financials) the Company hastaken a write-down of Rs. 85.12 Crores in the value of investments in BioseedInternational Business keeping in view the longer gestation period and higher losses overlast few years due to one time inventory write offs.

Net Profit for FY17 was up by 83% to Rs. 552 Crores from Rs. 302 Crores in FY16.

Net Debt stood at Rs. 928 Crores vs. Rs. 1057 Crores last year. Debt equity ratio stoodat 0.37x vs 0.51x last year.

The Company completed capacity expansion projects for Chlor-Alkali (incl. captivepower) at Bharuch & Power Cogeneration at Sugar business at total investments of ~Rs.700 Crores. These plants have stabilised and have started contributing to the earnings ofthe Company.

During the year the Company has announced new capital expenditure projects at aninvestment of ~ Rs. 300 Crores aimed at setting up a Distillery in Sugar Business tomanufacture ethanol Increase Chemicals capacity at Kota and to increase the fabricationcapacity at Fenesta Business. These projects are expected to be completed by Q4 FY18 andwill start adding to Company's growth from FY19 onwards.

Dividend

Your Directors are pleased to recommend a final dividend @ 40% i.e. Rs. 0.80/- perequity share of Rs. 2/- each for the year ended 31.3.2017 which if declared by theShareholders the total dividend for the financial year 2016-17 will aggregate to 290 %i.e. Rs. 5.80/- per equity share of Rs. 2/-each (including two interim dividends @ 110%i.e. Rs. 2.20 per equity share paid on 15th November 2016 and @ 140% i.e. Rs.2.80 per equity share paid on 3rd March 2017).

Further as per the requirement of Regulation 43A of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Dividend Distribution Policy of the Company isattached as Annexure-1.

Number of Meetings of the Board

The Board met 4 times during the financial year on 10.5.2016 9.8.2016 27.10.2016and13.2.2017.

Subsidiary/Associate/Joint Venture Companies

During the year a subsidiary of the Company namely Hariyali Services Limited wasstruck off from the Register of Companies w.e.f. 15th November 2016.

Report on Performance and Financial Position of Subsidiaries Associate and JointVentures Company

The details regarding the performance and financial position of Company's SubsidiariesAssociate and Joint Ventures are given in Annexure - 2 of this Board's Report.

Risk Management Framework

The Company has in place a Risk Management Framework which was approved by the Boardon 28.1.2006 and was implemented w.e.f. 2.1.2007. The said framework includes riskidentification assessment response and monitoring system for mitigation of risk.

Company's Policy on Directors' Appointment and Remuneration The criteria for Directors'appointment has been set up by the Nomination

Remuneration and Compensation Committee which includes criteria for determiningqualifications positive attributes independence of a Director and other matters providedunder Sub-section (3) of Section 178 of Companies Act 2013 ("the Act"). TheRemuneration Policy is attached as Annexure - 3 to this Board's Report.

Corporate Social Responsibility

The details about the Policy on Corporate Social Responsibility (CSR) includingprogrammes/activities undertaken on CSR Annual Report on CSR activities and thecomposition of CSR Committee are provided in a separate section which forms part of thisBoard's Report.

Business Responsibility Report

In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 Business Responsibility Report (BRR) forms part of this Annual Report. The reportinter-alia describes the initiatives taken by the Company from environmental social andgovernance perspective.

Vigil Mechanism

The Company has established a Vigil Mechanism/Whistle Blower Policy as per therequirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and the Companies Act 2013. The same is also available on Company's website at thefollowing web link: (http://dcmshriram.com/sites/default/files/vigil-mechanism.pdf)

Related PartyTransactions

The Company has formulated a Policy on dealing with Related Party transactions whichis also available on Company's website at the following weblink:(http://dcmshriram.com/sites/default/files/Related%20Partv%20Trnsaction%20%20-%20Final%20%28BM-12.11.2014%29.pdf)

Particulars of contracts or arrangements entered into with related parties as referredto in Section 188(1) of the Act are disclosed in Form AOC-2 attached as Annexure-4.

Material Subsidiary Policy

The Company has formulated a Policy for determining 'Material' Subsidiaries which isalso available on Company's website at the following weblink:(http://dcmshriram.com/sites/default/files/MATERIAL%20SUBSIDIARY%20POLICY%20-%20FINAL.pdf)

Particulars of Loans Guarantees or Investments

The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act and relevant rules thereunder are given in the notes to FinancialStatements.

Fixed Deposits

1. The details relating to deposits covered under Chapter V of the Act:

a) accepted during the year: Rs. 8870000/-

b) remained unpaid or unclaimed as at the end of the year : Rs. 145873/-

c) there has been no default in repayment of deposits or payment of interest thereonduring the financial year ended on 31st March 2017.

2. There are no deposits which are in non-compliance with the requirements of ChapterV of the Act.

Details in respect of adequacy of Internal Financial Control with respect to FinancialStatements

The Company has in place adequate Internal Financial Controls with respect to financialstatements. No material weakness in the design or operation in such controls was observedduring the year.

DCM Shriram Employee Stock Purchase Scheme The Company has an Employee Stock PurchaseScheme (DCM Shriram ESPS) duly approved by Members vide Special Resolution passed onAugust 13 2013 and aligned in accordance with SEBI (Share Based Employee Benefits)Regulations 2014. DCM Shriram ESPS provides for grants of equity shares through Trustpurchased from Secondary Market to the eligible Employees as may be decided by theNomination Remuneration and Compensation Committee from time to time. DCM Shriram ESPS isa secondary market scheme and hence no fresh issue of shares was made. There are no votingrights exercised on the shares held by the Trust. Further there are no material changesin the DCM Shriram ESPS and it is in compliance with the applicable regulations. Thedetails required as per SEBI (Share Based Employee Benefits) Regulations 2014 isavailable at the following web link of the Company:(http://www.dcmshriram.com/DCM-Shriram-ESPS-Report)

Directors and Key Managerial Personnel (KMP)

Mr. AjitS. Shriram and Dr. N.J. Singh Directors retire by rotation and beingeligible offer themselves for re-appointment.

During the year Justice (Retd.) Vikramajit Sen and Mr. Pravesh Sharma were appointedas Additional Directors of the Company in the category of Independent Director w.e.f.9.8.2016 whose appointments are being placed for the approval before the Shareholders inthe ensuing Annual General Meeting (AGM).

Dr. S.S. Baijal Mr. Arun Bharat Ram and Mr. D. Sengupta ceased to be IndependentDirectors of the Company on completion of their tenure on 9.8.2016.

The Company has received declaration from all the Independent Directors of the Companyunder Section 149(7) of the Act confirming that they meet the criteria of independence asprescribed under Section 149(6) oftheAct and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.

The details of familiarization programme for Independent Directors are available onCompany's website atthe following web link:(http://dcmshriram.com/sites/default/files/Details%20of%20Familiarization%20Programme%20for%20Independent%20Directors%202016-17.pdf) Manner & Criteria offormal annual evaluation of Board's performance and that of its Committees and IndividualDirectors In compliance with requirements of the Act and SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 the formal annual performance evaluation ofthe Board its Committees and Individual

Directors has been conducted as under:

A. Manner of evaluation as recommended to the Board by the Nomination Remuneration andCompensation Committee ("NRCC")

1. The Chairman of the Board consulted each Director separately about the performanceof Board Committees and other Directors and sought inputs in relation to the above. TheChairman 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 the NRCCcollated the inputs from Directors about Chairman's performance as a Chairman/Director ofthe Board and/or Chairman or the Member of the Board Committees and shared the same withthe Board.

The Board as a whole discussed the inputs on performance of Board/Committees/IndividualDirectors and performed the evaluation excluding the Director being evaluated.

B. Criteria of evaluation as approved by the NRCC

The aforesaid evaluation was conducted as per the criteria laid down by the NRCC asfollows:

Performance of Evaluation Criteria
(I) Board as a whole Structure of Board including Composition/Diversity/ Process of appointment /qualifications/experience etc;
Fulfillment of functions of the Board (for instance guiding corporate strategy risk policy business plans corporate performance monitoring Company's governance practices etc. as per the Act and 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.
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 Act and the Listing Regulations.
Number of committee meetings held during the year.
(III) Individual Directors Fulfillment of responsibilities as a director as per the Act the Listing Regulations 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;
Board and/or Committee meetings attended; and General meetings attended.

Particulars of Employees

The details required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedin respect of Employees of the Company are given in Annexure - 5 of this Board's Report.

However in terms of Section 136 (1) of the Act the Report and Accounts are being sentto the Members and others entitled thereto excluding the Statement of Particulars ofEmployees as required under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel)Rules 2014 as amended. The said statement is available forinspection by the Members at the Registered Office of the Company during business hours onworking days up to the date of the ensuing Annual General Meeting.

Composition of Board Audit Committee

As on the date of this report the Board Audit Committee comprised of 4 Non - ExecutiveIndependent Directors viz. Mr. Pradeep Dinodia as Chairman and Mrs. Ramni Nirula Mr.Sunil Kant Munjal & Mr. Pravesh Sharmaas Members.

Extract of Annual Return

The Extract of Annual Return of the Company as on 31.3.2017 in Form No MGT-9 isattached as Annexure - 6 to this Board's Report.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required under the Companies (Account) Rules 2014 aregiven in Annexure - 7 of this Board's Report. Secretarial Audit Report

The Board appointed M/s. Sanjay Grover & Associates Company Secretaries toconduct the Secretarial Audit for the financial year 2016-17. The Secretarial Audit Reportfor the financial year ended 31st March 2017 is attached as Annexure - 8 tothis Board's Report. The Secretarial Audit Report does not contain any qualification orreservation or adverse remark or disclaimer.

Unclaimed Shares Suspense Account

In terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015the Company reports the following details in respect of equity shares lying in thesuspense account which were issued in physical form:

Balance as on 1.4.2016

No. of Members who approached the Company for transfer of shares and shares transferred from Suspense Account during the year

Balance as on 31.3.2017

No. of holders No. of shares No. of holders No. of shares No. of holders No. of shares
4525 667380 10* 2410 4515 664970

* Approached -12; Pending -2.

The voting rights on the shares in the suspense account as on 31st March2017 will remain frozen unless the rightful owners of such shares claim the shares.

Corporate Governance

The Company is committed to adhere to best corporate governance practices. The separatesections on Management Discussion and Analysis Corporate Governance and a Certificatefrom the Auditors of the Company regarding compliance of conditions of CorporateGovernance as stipulated under SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 forms part of the Annual Report.

Auditors

M/s. Deloitte Haskins & Sells Chartered Accountants were appointed as StatutoryAuditors of the Company in the last Annual General Meeting of the Company held on 9.8.2016to hold office till the conclusion of the ensuing Annual General Meeting. Pursuant to theprovisions of the Companies Act 2013 the term of M/s. Deloitte Haskins & Sells shallbe completed at the conclusion of ensuing AGM and they are not eligible forre-appointment.

The Board has recommended for the approval of shareholders the appointment of PriceWaterhouse Chartered Accountants LLP (FRN 012754N/N500016) as Statutory Auditors of theCompany at the ensuing AGM for a term from the conclusion of ensuing AGM of the Companytill the conclusion of 33rd AGM subject to ratification at every AGM of theCompany.

Cost Auditors

The Board appointed M/s. Bahadur Murao &Co. Cost Accountants New Delhi (FRN000008) and M/s. J. P Sarda & Associates Cost Accountants Kota (FRN 000289) as CostAuditors for the financial year 2017-18 to audit the cost accounting records of theCompany.

Directors' Responsibility Statement Your Directors state that:

a) in preparation of annual accounts for the year ended 31st March 2017the applicable accounting standards have been followed and there are no materialdepartures;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2017 and of the profitof the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and forpreventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on agoing concern basis;

e) they have laid down internal financial controls as followed by the Company and thatsuch internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Industrial Relations

The Company continued to maintain harmonious and cordial relations with its workers inall its Divisions which enabled it to achieve this performance level on all fronts.

Acknowledgements

The Directors wish to thank Customers the Government Authorities FinancialInstitutions Bankers Other Business Associates and Members for the co-operation andencouragement extended to the Company. The Directors also place on record their deepappreciation for the contribution made by the employees at all levels.

On behalf of the Board
NewDelhi AJAYS. SHRIRAM
May 012017 Chairman &Sr. Managing Director
DIN: 00027137

Annexure - 1

Dividend Distribution Policy

In terms of Regulation 43Aof the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015("Listing Regulations") DCM Shriram Limited ("theCompany") is disclosing its Dividend Distribution Policy ("Policy")

At present the Company has only one class of shares Viz. Equity Shares.

The Company strives for sustained and consistent growth strong financial structure andstable dividend payout. In considering dividend matters the Board keeps in forefrontbalancing the needs for creation of long term value & growth and the need for aperiodic & stable return through dividend. The Board considers the feasibility ofdividend both annually as well as during the yearfor feasibility of any interimdeclaration.

While recommending/declaring the dividend the Board evaluates diverse financial andstrategic parameters including planned investments and expenditure expansion plansretained earnings & profit for the year prevailing cost of funds company's cashflow borrowings taxation & statutory requirements and prevailing market & macroeconomic conditions in general and the interests of all stakeholders besides shareholders.

This document only outlines the policy and factors the Board keeps in view and is notintended to be a commitment or guarantee of dividend payment by the Company eitherannually or otherwise.

Annexure - 2

Performance and financial position of Company's Subsidiaries. Associate and JointVentures AOC -1 - Part "A": Subsidiaries

Name of the subsidiary DCM Shriram Credit and Investments Ltd. DCM Shriram Foundation Hariyaii Rural Ventures Ltd. Shriram Bioseed Ventures Ltd. Bioseed India Ltd. DCM Shriram Infrastructure Ltd. DCM Shriram Aqua Foods Ltd. Fenesta India Ltd. Shri Ganpati Fertilizers Ltd. Shridhar Shriram Foundation PT Shriram Seed Indonesia Shriram Bioseed (Thailand) Ltd. Bioseed Research USA INC. Bioseed Holdings Pte. Ltd. Bioseed Research Philippines INC Bioseed Vietnam Ltd. Bioseeds Ltd. PT Shriram Genetics Indonesia
The Date since when the subsidiary was acquired. 12-05-1993 30-11-2007 18-12-2007 30-06-2007 20-07-2000 12-12-2003 12-06-1995 18-12-2008 27-03-2008 09-02-2010 04-02-2011 16-06-2006 12-07-2012 31-01-2009 16-07-2002 20-03-2008 16-07-2002 25-09-2012
Reporting period for the subsidiary concerned if different from the holding Company's reporting period N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A
Reporting currency and Exchange rale as on the last date of the relevant Financial year in the case of foreign subsidiaries N.A N.A N.A N.A N.A N.A N.A N.A N.A N.A USD RS. 64.855/ USD USD RS. 64.855/ USD USD RS. 64.855/ USD USD RS. 64.855/ USD USD RS. 64.855/ USD USD RS. 64.855/ USD USD RS. 64.855/ USD USD RS. 64.855/ USD
Share capital 9.00 0.01 1.00 4.05 0.05 0.05 8.35 0.05 2.15 0.05 34.70 28.99 0.0016 46.30 12.46 69.37 14.94 1.95
Other Equity 0.86 -0.017 -1.85 17.51 -0.05 6.85 -5.18 0.24 -24.20 -0.014 -23.78 -28.53 0.08 -9.76 -51.88 -54.51 105.33 -5.40
Total assets 12.37 0.016 7.77 157.61 0.004 31.13 3.18 18.66 10.27 0.037 23.24 0.57 0.09 209.41 27.60 32.25 207.87 7.06
Total Liabilities 2.51 0.023 8.62 136.05 0.004 24.23 0.01 18.37 32.32 0.001 12.32 0.11 0.01 172.87 67.02 17.39 87.60 10.51
Investments 9.04 57.05 142.39 11.64
Turnover 0.97 0.78 7.62 0.001 0.14 71.92 33.51 10.54 1.34 4.76 46.38 4.76 7.22 9.46
Profit before taxation 0.08 -0.004 -0.54 -2.27 -0.01 -2.19 0.06 0.14 3.60 -0.002 -10.26 0.09 -0.012 -5.82 -15.73 -19.22 1.58 -0.60
Provision for taxation 0.09 0.56 0.04 0.04 -1.13 0.17 3.23 0.05
Profit after taxation -0.01 -0.004 -1.10 -2.27 -0.01 -2.19 0.02 0.10 3.60 -0.002 -9.13 0.09 -0.012 -5.82 -15.90 -22.45 1.53 -0.60
Other Comprenshive income 2.22 -0.003 -0.001
Total Comprehensive income 2.21 -1.10 -2.27 -0.01 -2.19 0.02 0.10 3.60 -0.002 -9.13 0.09 -0.01 -5.82 -15.90 -22.45 1.53 -0.60
Proposed Dividend
% of shareholding 100% 100% 100% 100% 100% 100% 100% 100% 81.41 % 100% 95% 99.99% 100% 100% 100% 100% 100% 49%

Notes:

1. In case of foreign subsidiaries the assets and liabilities have been translatedinto Indian Rupees at the closing exchange rate at the year end and whereas statement ofprofit and loss numbers have been translated into Indian Rupees at average exchange ratefor the year.

2. Names of subsidiaries which are yet to commence operations : Nil

3. Names of subsidiaries which have been struck off/liquidated during the year:Hariyaii Services Limited

AOC -1 - Part "B": Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures Name of Associates/Joint Ventures:

Name of Joint Venture Company Shriram Axiall Pvt. Ltd.
Latest audited Balance Sheet date 31.3.2017
Date on which the Associate or Joint Venture was associated or acquired 10-04-2014
No. of Shares of Joint Ventures held by the Company at the year end 1732500
Amount of Investment in Joint Venture Rs.3.42Crores
Extent of Holding % 50%
Description of how there is significant influence Joint Venture having 50% control of the total paid-up share capital of the Company
Reasons why the joint venture is not consolidated N.A.
Networth attributable to Shareholding as per latest audited Balance Sheet Rs. 19.95 Crores
Profit/(Loss) for the year -
i. Considered in Consolidation Rs. (0.09) Crore
ii. Not Considered in Consolidation Nil

Notes:

1. Names of associates or jointventures which are yettocommence operations : Nil

2. Names of associates or joint ventures which have been liquidated or sold during theyear: Nil

Annexure - 3

REMUNERATION POLICY

1. PREAMBLE

This Policy is in compliance with Section 178 of the Companies Act 2013 read alongwith the applicable rules thereto and Regulation 19 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 [SEBI Listing Regulations]. On therecommendation of Nomination Remuneration and Compensation Committee this policy hasbeen approved by the Board of Directors.

2. OBJECTIVE

The Policy relates to designing the remuneration for the Directors Key ManagerialPersonnel (KMPs) Senior Management Personnel (SMPs) and otheremployees of the Company.

3. DEFINITIONS

a) "Board":-Board means Board of Directors of the Company.

b) "Directory-Directors means Directors of the Company.

c) "Committee":-Committee means Nomination Remuneration and CompensationCommittee of the Company as constituted or reconstituted by the Board from time to time.

d) "Company":- Company means DCM Shriram Limited.

e) "Independent Director":- As provided under SEBI Listing Regulations and/orunder the Companies Act 2013 and relevant rules thereto.

f) "Key Managerial Personnel":- Key Managerial Personnel (KMP) means-

(I) the Chairman and Senior Managing Director;

(ii) the Company Secretary;

(iii) the Chief Financial Officer; and

(iv) such other officer as may be prescribed under the applicable statutoryprovisions/regulations and approved by Board from timeto time.

g) "Senior Management Personnel":- shall mean the personnel of the Companywho are members of its Core Management team excluding the Board of Directors comprisingall members of management that are one level below the Executive Directors including thefunctional heads.

Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.

4. KEYPRINCIPLES

The following principles guide the design of remuneration under this Policy:

(i) Attract retain and motivate the right talent including the Directors andEmployees as required to meet the goals of the Company

(ii) Remuneration to the Directors KMPs and SMPs is aligned with the shortterm andlongterm goals and performance of the Company.

(iii) Promote the culture of meritocracy performance and accountability. Giveappropriate weightage to individual business and overall Company's performance.

(iv) Reflect market trends and practices competitive positions to attract the requiredtalent.

5. REMUNERATION PAID TO EXECUTIVE DIRECTORS/MANAGING DIRECTORS

(i) The Remuneration to Executive Directors will be approved by the Board of Directorsbased on the recommendations of the Committee subject to the approval of shareholders andsuch other authorities as may be applicable. The concerned Executive Director will notparticipate in such discussions of the Board/Committee.

(ii) The compliance of the relevant provisions of the Companies Act 2013 and SEBIListing Regulations regarding the limits of remuneration will beensured.

(iii) The remuneration will include the following components:

a) Basic Salary

- Provides for a fixed per month base level remuneration to reflect the scale anddynamics of business to be competitive in the external market.

- Will be subject to an annual increase as per the recommendations of the Committee andthe approval of the Board of Directors.

b) Commission

- Executive Directors will be allowed remuneration by way of commission in addition tothe Basic Salary Perquisites and any other Allowances benefits and amenities.

- The total amount of remuneration along with Commission paid to all ExecutiveDirectors shall not exceed the limits laid down in Sections 197 and 198 of the CompaniesAct 2013.

- The amount of commission shall be paid subject to recommendation of the committee andapproval of the Board of Directors.

c) Perquisites and Allowances

- Perquisites and Allowances commensurate to the position of Executive Directors.

d) Contribution to Provident Superannuation fund and

Gratuity payments

e) Minimum Remuneration

- In the event of absence or inadequacy of profits in any financial year theremuneration approved by the shareholders excluding commission is paid to ExecutiveDirectors as a minimum remuneration subject to necessary approvals if any.

6. REMUNERATION PAID TO NON-EXECUTIVE AND INDEPENDENT DIRECTORS

The Non-Executive and Independent Directors would be paid remuneration by way ofsitting fees for attending meetings of Board or

Committee thereof and profit related commissions as approved by Board and Shareholders.The amount of such fees and commissions shall be subject to ceiling/limits as providedunder the Companies Act 2013 and Rules made thereunder or any other enactment for thetime being in force.

7. KMPS/SENIOR MANAGEMENT PERSONNEL/OTHER OFFICERS &STAFF

The Remuneration to be paid to KMPs/Senior Management Personnel/other officers &staff is based on the grade role and position in the Company the experiencequalification skills and competencies of the related personnel/employees the markettrends practices and benchmarks. The positioning strategy is to see that the compensationprovides adequate opportunity to attract the required talent and retain the same to beable to meet the requirements of the job and business. The remuneration is subject toreview on the basis of individual and business performance. The performance of employeesis reviewed based on competency assessment and key results delivered along with using aforced distribution method/bell curve. The performance assessment more specifically isused as an input to determine merit/special increments performance bonus rewardsincentives (shortterm and longterm) and other recognitions/promotions.

The remuneration includes salary allowances perquisites awards loans/advances asper Company's scheme retirement benefits benefits under welfare schemes subsidies etc.

The objective is to ensure that the compensation engage the employees to give theirbest performance.

8. WORKMEN COMPENSATION

Workmen are paid wages in accordance to the settlement with the recognized union of theworkers as per best industry practice as applicable. Where there is no union workmenwages are as per the best industry practice and applicable law. All our remunerationcomponents will be in accordance with applicable statutory compliance.

The remuneration includes salary allowances perquisites awards loans/advances asper Company's scheme retirement benefits benefits under welfare schemes subsidies etc.

9. DIRECTORS' AND OFFICERS' INSURANCE

Where any insurance is taken by the Company on behalf of its Directors KMPs/SeniorManagement Personnel etc. for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel.

10. AMENDMENTS

Notwithstanding the above the applicable provisions and amendments if any under theCompanies Act 2013 and/or SEBI Listing Regulations in respect of this policy and relatedmatters shall be implemented by the Company. The Committee may recommend amendments tothis Policy from time to time as it deems appropriate.

11. DISCLOSURE

The Policy shall be disclosed as required under the Companies Act 2013 and SEBIListing Regulations and in the Annual Report as prescribed.

Annexure - 4

FORM NO. AOC - 2

(Pursuant to clause (h) of Sub-Section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Disclosure of particulars of contracts/arrangementsentered into by the Company with related parties referred to in Sub-Section (1) of Section188 of the Companies Act 2013 including certain arms length transactions under thirdproviso thereto

1. Details of contracts or arrangements or transactions not at arm's length basis :-

NIL

2. Details of material contracts or arrangement or transactions at arm's length basis:-

NIL

Annexure - 5

Information as per Rule 5 (1) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014

(I) (a) The percentage increase in remuneration of each Director during the financialyear 2016-17 ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17:

S. No. Name of Director/KMP and Designation % increase in Remuneration in the financial year 2016-17 Ratio of remuneration of each Director/to median remuneration ofemployees
1. Mr. AjayS. Shriram 28.81 155:1
Chairman & Sr. Managing Director & KMP
2. Mr.VikramS. Shriram 28.28 151:1
Vice Chairman & Managing Director
3. Mr. AjitS. Shriram 33.70 133:1
Joint Managing Director
4. Mr.K.K. Kaul 13.71 48:1
Whole Time Director
5. Dr. N.J. Singh 7.96 19:1
Whole Time Director
6. Mr. Pradeep Dinodia 38.20 10:1
Non-Executive Director
7. Mr. Vimal Bhandari 25.00 4:1
Non-Executive Director
8. Mr. Sunil KantMunjal 27.45 5:1
Non-Executive Director
9. Mrs. Ramni Nirula 34.48 5:1
Non-Executive Director
10. Mr. Sharad Shrivastva* 36.79 3:1
Nominee Director (LIC)
11. Justice (Retd.) VikramajitSen## N.A. 3:1
Non-Executive Director
12. Mr. Pravesh Sharma## N.A. 4:1
Non-Executive Director
13. Dr.S.S. Baijal# -58.90 4:1
Non-Executive Director
14. Mr. Arun Bharat Ram# -73.63 1:1
Non-Executive Director
15. Mr. D.Sengupta# -57.97 3:1
Non-Executive Director

*Remuneration in case of LIC Nominee Directors was paid to LIC of India.

# Ceased w.e.f. 9.8.2016 ##Appointed w.e.f. 9.8.2016

(b) The percentage increase in remuneration of each Chief Financial Officer and CompanySecretary during the financial year 2016-17.

S. No. Name of KMP and Designation % increase in Remuneration in the financial year 2016-17
1. Mr. J.K. Jain 9.81
Chief Financial Officer & KMP
2. Mr. Sameet Gambhir -11.25
Company Secretary & KMP

(II) In the financial year 2016-17 there was an increase of 12.69 % in the medianremuneration of employees.

(III) There were 5088 permanent employees on the rolls of the Company as on 31stMarch 2017

(IV) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year was 12.96% whereas the increase inmanagerial remuneration for the same financial year was 24.78%. Increase in ManagerialRemuneration was recommended by Nomination Remuneration and Compensation Committee andapproved by Board of Director keeping view of the performance of the Company andManagerial Personnel and the remuneration received by Chief Executives in comparablebodies corporate.

(V) Affirmation: It is hereby affirmed thatthe remuneration paid is as pertheRemuneration Policy of the Company.

Annexure - 7

Particulars of Conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo as required under the Companies (Accounts) Rules 2014.

A) Conservation of Energy

(i) the steps taken and/or impact on conservation of energy;

SFC Complex-Kota Power

+ Recycling of 40MW boiler economizer and air-heater fly ash back into the furnace haslead to reduction of the un-burnt carbon loss by 1% resulting into an energy saving of764.5 MTOEperyear.

+ Automation of 40MW combustion control thus maintaining main steam pressure andtemperature near the design value resulting in an energy saving of 231 MTOE per year.

Cement

+ Installation of new DCS in Cement Plant leading to better controlled operation ofplants optimal operation of burners and energy audit of all equipments with better loadmanagement resulting:

- Reduction of coal consumption by 1268 MT/year equivalent to 713.5 MTOEperyear.

- Reduction of power consumption by ~3200 Kwh/Day equivalent to 360.4 MTOE.

SAC - Bharuch Chemical plant

Particulars Kwh/Day Savings on account of measures taken savings- Rs. lakhs/p.a. Impact on cost of production Rs/MT Prod @228525 MT
1 Conversion of Electrolyzer G into energy efficient Zero gap electrolyzer. 26280 298 130
2 Conversion of Electrolyzer H into energy efficient Zero gap electrolyzer. 26280 298 130
3 Power Plant lighting panel day/night timer installation to avoid light ON in day time. 228 3 1
4 Reduced Energy consumption by Replacing conventional lights with LED in different area like boiler turbine floor security gate. 238 3 1
TOTAL 600 263

Sugar Plants - U.P.

Steam:

+ Replacement of 75 TPH & 60 TPH Low pressure Boiler (45 kg/cm2 with one 135 TPHhigh pressure Boiler (110 kg/cm2) and Installation of 2 new evaporator bodies.

Power:

+ Replacement of 3.0 MW X 3 & 1.5 MW X1 inefficient back pressure turbine with newefficient 26.9 MW condensing turbine.

+ Replacement of 7.5 MW inefficient turbine with new efficient turbine.

+ Replacement of conventional street light with LED light.

(ii) the steps taken by the Company for utilising alternate sources of energy;

SFC Complex - Kota

+ Optimal utilization of hydrogen (which was earlier being dissipated) in caustic sodaflaker plant as fuel substituting furnace oil.

SAC - Bharuch

+ Installation of solar lighting system substituting conventional lighting in plant.

(iii) the capital investment on energy conservation equipments;Major investments onenergy conservation equipment are asunder:

Particulars Investment
Power - SFC Kota
Procurement and installation of new auto recirculation valve (ARC) in 40 MW 0.10
Automation of 40 MW boiler combustion control 0.05
Total (Power - SFC Kota) 0.15
Chemicals - SAC Bharuch
Modification in ELECTROLYSER-G (asset no.8719288-91) 4.9
Modification in ELECTROLYSER-G (asset no 8719292-95) 4.9
Lighting 2.3
Total (Chemicals-SAC Bharuch) 12.5

B) Technology Absorption

(i) the efforts made towards technology absorption;

Sugar Plants - U.P.

i. Varieties evaluation based on adaptability in our area

ii. Water conservation technologies trials + Press Mud/FYM application

+ Land Leveling + Trash mulching + Furrow irrigation + Skip furrow irrigation

iii. Bio control Measures for control of Borers and Diseases

a) Production of Trichogramma Tetrastichus Beauveria bassiana & Metarhiziumanisopliae Trichoderma Azotobacter and Phosphorus Solubilizing Bacteria (PSB).

iv. Soil nutrient Analysis through soil testing lab.

v. Bagasse moisture reduction in last mill by vacuum.

vi. Chemical treatment of Spraypond water.

(ii) the benefits derived like product improvement cost reduction product developmentor import substitution;

Sugar Plants - U.P.

i. Varieties evaluation based on adaptability in our area:

+ Gain in recovery

+ Gain in yield to maximize cane availability.

ii. Water conservation activities:

+ Press Mud/FYM application-Water saving by 27 % Approx.

+ Land leveling-Water saving by 28 % Approx.

+ Trash Mulching-Water saving by 24 % Approx.

+ Furrow Irrigation-Water saving by 17 % Approx.

+ Skip Furrow Irrigation-Water saving by 40 % Approx.

iii. Bio Control Measures:

+Use of TrichogrammaTetrastichus Beauveria bassiana &MetarhiziumanisopliaeTrichoderma Azotobacter and Phosphorus Solubilizing Bacteria areeco-friendly and do not cause any health hazards.

+These measures reduces cost of controlling pests and diseases by Approx. 60%.

+ Improvement in Soil Health.

iv. Soil Test Based fertilizer Application in Crop:

+ Balance dose of fertilizer will help in maintaining fertility status of soil.

+ Improvement in yield and juice quality.

+ Increase in cost-benefit ratio.

(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year);

SFC Complex - Kota

Fertiliser

a) Technology Imported Yes Benfield Low-heat process
b) Year of Import 2015-16
c) Whether technology has been fully absorbed Yes
d) If technology not fully absorbed reason for same and future plan of action N.A.

 

Chemical
a) Technology Imported Installation of new zero gap cells in Electrolyser # E. Installation of NCH type cell in Electrolyser # D after their zero gap conversion.
b) Year of Import 2015-16
c) Whether technology has been fully absorbed Yes
d) If technology not fully absorbed reason for same and future plan of action N.A.
Carbide
a) Technology Imported New Circular Conveyor Assembly Imported from M/S DHHI China
b) Year of Import 2015-16
c) Whether technology has been fully absorbed Yes
d) If technology not fully absorbed reason for same & future plan of action N.A.
Chemical (SAC - Bharuch)
a) Technology Imported Component Spare Part Capital Goods and Technology Consultancy
b) Year of Import 2016-172015-16 2014-15
c) Whether technology has been fully absorbed Yes
d) If technology not fully absorbed reason for the same & future plan of action N.A.

(iv) the expenditure incurred on Research and Development :

Capital Rs. 0.52 Crores
Revenue Rs. 42.80 Crores

C) Foreign Exchange Earnings and Outgo Total foreign exchange used and earned:

Rs. in Crores
2016-17
- Total foreign exchange used 266.38
- Total foreign exchange earned 17.40