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DCM Shriram Ltd.

BSE: 523367 Sector: Others
NSE: DCMSHRIRAM ISIN Code: INE499A01024
BSE 13:44 | 02 Dec 983.10 -6.95
(-0.70%)
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996.40

HIGH

997.85

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980.65

NSE 13:34 | 02 Dec 983.60 -6.65
(-0.67%)
OPEN

999.85

HIGH

999.85

LOW

980.80

OPEN 996.40
PREVIOUS CLOSE 990.05
VOLUME 623
52-Week high 1249.95
52-Week low 370.30
P/E 19.41
Mkt Cap.(Rs cr) 15,331
Buy Price 983.35
Buy Qty 1.00
Sell Price 984.10
Sell Qty 1.00
OPEN 996.40
CLOSE 990.05
VOLUME 623
52-Week high 1249.95
52-Week low 370.30
P/E 19.41
Mkt Cap.(Rs cr) 15,331
Buy Price 983.35
Buy Qty 1.00
Sell Price 984.10
Sell Qty 1.00

DCM Shriram Ltd. (DCMSHRIRAM) - Director Report

Company director report

The Directors have pleasure in presenting the 32nd Annual Rep ort ofthe Company along with Audited Financial Statements both standalone and consolidated forthe year ended 31st March 2021.

Financial Highlights

The results for the year ended 31.3.2021 and 31.3.2020 are as under:

(Rs. in Crores)
Particulars Standalone Consolidated
31.3.2021 31.3.2020 31.3.2021 31.3.2020
Revenue from operations 8211.99 7671.96 8308.16 7767.13
Profit before finance cost 1227.42 1298.29 1244.28 1294.87
Profit before exceptional item and tax 875.77 923.30 889.17 912.01
Exceptional item 14.76
Profit after tax 662.48 743.67 672.26 719.42
Share of profit/(loss) of joint venture 1.73 2.78
Non-controlling interest (0.71) (5.49)
Other comprehensive income (after tax) 6.84 (10.42) 4.39 (11.98)
Total comprehensive income (after tax) 669.32 733.25 677.67 704.73
Basic/Diluted - EPS (Rs. per equity share) 42.48 47.69 43.17 45.96
Retained earnings- opening balance 4072.45 3517.72 3963.29 3436.17
Add/ (less):
Profit for the year 662.48 743.67 673.28 716.71
Dividends paid during the year (85.77) (184.24) (85.77) (184.24)
Others 6.53 (4.70) 9.12 (5.35)
Retained earnings - closing balance 4655.69 4072.45 4559.92 3963.29

State of Company s Affairs/Performance

The overall operating and financial performance of the Company wasstable in a year which had significant uncertainties driven by Covid -19 pandemic. Q1FY'21 earnings were low because of nationwide lockdowns however post easing of lockdownsthe overall business performance improved. The Agri and related businesses were notimpacted by lockdowns Sugar and Shriram Farm Solutions business delivered good growth ledby volumes and enhanced product portfolio. In Chloro-vinyl business Chemicals wasimpacted by lower realisations and volumes however the Vinyl (PVC & Carbide)witnessed strong realisations that helped mitigate the impact. Fenesta business witnessedde-growth as operations were impacted in Q1 but recovered well during H2 of FY'21.

The Company's total revenues from operation at a standalone level stoodat Rs.8212 Crores in FY21 vs. Rs.7672 Crores last year. Revenue of Sugar business was upby 34% lead by higher sugar domestic and export volumes and higher ethanol volumes. Vinylbusiness also registered a growth in revenue of about 32% driven by higher realizationsfor PVC. Shriram Farm Solutions also registered a 13% increase in revenue. Revenue ofChemicals business was down by 26% driven mainly by lower realizations and volumes.

Profit before depreciation interest and tax declined to Rs.1227Crores down ~5% over last year. The same was down ~4% on a consolidated basis. Thisdecline was led by ~48% decline in PBDIT of Chlor-Alkali business due to lowerrealizations and volumes. Plastics business recorded an increase of ~ 157% driven byhigher realizations. Sugar business recorded an increase of ~11% in PBDIT led by highervolumes of Sugar and Ethanol. Agri-input business of Shriram Farm Solutions recorded ~60%growth in PBDIT lead by better volumes and margins for value added business. BioseedFenesta Fertilizer and Cement businesses registered de-growth in PBDIT. Overall PBDITmargins declined to ~15% from ~17% last year mainly due to lower margins in Chlor-Alkalibusiness due to lower realizations and lower volumes.

Net Profit on standalone basis for FY21 was down by 11% to Rs.662Crores from Rs.743 Crores in FY20. It was lower by ~6% on a consolidated basis. Net Debtas on March 312021 stood at Rs. 180 Crores vis-a-vis Rs. 1623 Crores as on March 312020.Net Debt to equity stood at 0.04x as on March 312021 vs 0.40x as on March 312020.

The Company commissioned following projects in FY '21 at an investmentof ~ Rs. 35 Crores:

• Stable Bleaching Powder expansion project (43 TPD) at Kota wascommissioned in March'2021 at an expenditure of ~Rs. 10 Crores.

• Country Liquor project (6400 cases per day) was commissioned inMarch '21 at Hariawan Sugar unit at an expenditure of ~ Rs. 25 Crores.

New Projects - The following projects are currently underway (atBharuch Chemical Complex):

• 120 MW coal based new power plant is underway and is expected tobe commissioned in Q4 FY'22.

• Hydrogen Compressors with total capacity of 60398 NM3 per dayexpected to be commissioned in Q1 FY'22.

• During the year the Board has approved projects worth Rs. 1000Crores and are progressing as per plan. The projects include:

- Hydrogen Peroxide facility with a capacity of 52500 TPA

- Epichlorohydrine (ECH) facility with a capacity of 51000 TPA alongwith Glycerin purification facility

- Expansion of Anhydrous Aluminum Chloride capacity by 32850 TPA

- A multipurpose Product Research & Development Center.

• The decision on implementation of 700 TPD Caustic Soda plant and500 TPD flaker will be taken in due course.

Dividend

Your Directors are pleased to recommend a final dividend @ 190% i.e.Rs.3.80/- per equity share of Rs.2/- each for the year ended 31.3.2021 which if declaredby the Members the total dividend for the financial year 2020-21 will aggregate to 465%i.e. Rs.9.30/- per equity share of Rs.2/- each (including an interim dividend (@ 275% i.e.Rs.5.50 per equity share paid during the year).

Further as per the requirement of Regulation 43A of SEBI (ListingObligation and Disclosure Requirement) Regulations 2015 [SEBI Listing Regulations 2015]Dividend Distribution Policy of the Company approved by Board is attached as Annexure-1 tothis Board s Report.

Number of Meetings of the Board

The Board met 6 times during the financial year on 19.5.2020 3.6.202021.7.2020 22.7.2020 20.10.2020 & 19.1.2021.

Report on Performance and Financial Position of Subsidiaries Associateand JV Company

The details regarding the performance and financial position ofCompanys Subsidiaries Associate and JV are given in Annexure-2 of this Board s Report.

As on the date of this report:

(i) The liquidation of Shriram Bioseed (Thailand) Limited a step downsubsidiary of the Company and

(ii) The merger of Bioseeds Limited Mauritius into Shriram BioseedVentures Limited (both wholly owned subsidiaries of the Company) are under process.

Risk Management Framework

The Company has in place a Risk Management Framework which is updatedperiodically to make it more contemporary and suit the requirements of changing businessscenarios and regulations. The current Risk Management Framework was approved by the Boardon 23.7.2019 after it was reviewed and recommended by the Risk Management Committee andAudit Committee. The said framework includes risk identification assessment response andmonitoring system for mitigation of risk.

Company's Policy on Directors' Appointment and Remuneration

The criteria for Directors' appointment has been set up by theNomination Remuneration and Compensation Committee (NRCC) which inter-alia includescriteria for determining qualifications positive attributes independence of a Directorbasis/criteria of remuneration to Directors/KMPs and other matters provided underSub-section (3) of Section 178 of the Companies Act 2013.

The Company has a remune ration Policy in place which deals in theremuneration of the Directors Key Managerial Personnel (KMPs) Senior ManagementPersonnel (SMP s) and other employees of the Company. The remuneration policy of theCompany is available on the Company's website at the following web link :

https: //www.dcmshriram.com/sites /d efault/files/Remuneration%20Policy _0.pdf

Corporate Social Responsibility (CSR)

The details of the programs/activities undertaken as CSR Annual Report on CSR activities and the composition of CSR Committee are provided in separatesection which forms part of this Board s Report. The Company has a policy on CSR whichincludes the guidelines on the major area in which the Company engages itself with the CSRactivities/projects and the manner of implementation and monitoring the activities/projects. The composition of CSR Committee CSR policy and details ofactivities/projects approved by the Board are available on the Company's website at thefollowing web link:

https://www.dcmshriram.com/social-responsibility BusinessResponsibility Report

In compliance with SEBI Listing Regulations 2015 BusinessResponsibility Report (BRR) forms part of this Annual Report and is provided in a separatesection. The report inter-alia describes the initiatives taken by the Company fromenvironmental social and governance perspective.

Vigil Mechanism/Whistle Blower Policy

The Company has established a Vigil Mechanism/Whistle Blower Policy asper the requirement of the SEBI Listing Regulations 2015 and the Companies Act 2013which is available on the Company s website at the following web link:

https://www.dcmshriram.com/site5 /default/files/VIGIL%20MECHANISM%20-WHISTLE%20BLOWER%20POLICY-converted%20%281%29.pdf

Internal Complaint Committee on POSH

The Company has complied with the provisions relating to constitutionof Internal Complaint Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ("POSH").

One case was reported on sexual harassment during the year which hasbeen disposed off. There are no complaints pending at the end of financial year underreview.

Cost Records

The Company is required to maintain Cost Re cords as directed by theCentral Government pursuant to Section 148(1) of the Companies Act 2013 and accordinglysuch accounts and records are made and maintained by the Company.

Related Party Transactions

During the year there has been no materially significant related partyTransaction between the Company and its related parties which requires disclosure in FormAOC-2.

The Company has formulated a Policy on dealing with Related PartyTransactions which is available on the Companys website at the following web link:

https://www.dcmshriram.com/sites/default/files/Related%20Party%20Transaction%20Policy%20-%20FINAL 0.pdf

Material Subsidiary Policy

The Company has formulated a Policy for determining MaterialSubsidiaries 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.

Particulars of Loans Guarantees or Investments

The details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 and relevant rules thereunder aregiven in the notes to Financial Statements.

Fixed Deposits

1. The details relating to deposits covered under Chapter V of theCompanies Act 2013:

a) accepted including renewals during the year: Rs.80821821/-

b) remained unclaimed as at the end of the year : Rs.197248/-

c) there has been no default in repayment of deposits or payment ofinterest thereon during the financial year ended on 31st March 2021.

2. All the deposits are in the Compliance with the requirements ofChapter V of the Companies Act 2013.

Internal Financial Control with respect to Financial Statements

The Company has in place adequate Internal Financial Controls withrespect to financial statements. No material weakness in the design or operation of suchcontrols was observed during the year.

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 lateraligned in accordance with SEBI (Share Based Employee Benefits) Regulations 2014. DCMShriram ESPS provides for grants of equity shares through Tru st purchased from secondarymarket to the eligible Employees as may be decided by the Nomination Remuneration andCompensation Committee from time to time. DCM Shriram ESPS is a secondary market schemeand hence no fresh issue of shares was made. There are no voting rights exercised on theshares held by the Trust. Further there are no material changes in the DCM Shriram ESPSand it is in compliance with the applicable regulations. The details required as per SEBI(Share Based Employee Benefits) Regulations 2014 is available on the Company's website atthe following web link:

https://www.dcmshriram.com/sites/default/files/ESPS%20Disclosure%20-%202020-21.pdf

Directors and Key Managerial Personnel (KMP)

Mr. Ajit S. Shriram and Mr. K.K. Sharma Directors liable to retire byrotation at the ensuing Annual General Meeting (AGM) and being eligible offerthemselves for re-appointment.

Approval for re-appointment of Mr. K.K. Kaul Whole Time Director isbeing sought in the ensuing AGM of the members of the Company for a period of 2 yearsw.e.f. 2.7.2021 as recommended by NRCC and Board.

Approval for re-appointment of Justice (Retd.) Vikramajit Sen NonExecutive Independent Director is being sought in the ensuing AGM of the members of theCompany for second term of 5 consecutive years w.e.f. 9.8.2021 as recommended by NRCC andBoard. The existing term of Justice Sen is upto 8.8.2021.

Approval for re-appointment of Mr. Pravesh Sharma Non-ExecutiveIndependent Director is also being sought in the ensuing AGM of the members of theCompany for second term of 5 consecutive years w.e.f. 9.8.2021 as recommended by NRCC andBoard. The existing term of Mr. Sharma is upto 8.8.2021.

During the year Mr. Sharad Shrivastva Director nominated by LIC ofIndia (LIC) on the Board of the Company has retired from LIC and also resigned from thedirectorship of the Company w.e.f. 7.8.2020. Thereafter LIC had nominated Ms. Sarita Gargas its nominee on the Board of the Company. Ms. Garg was appointed by the Board on20.10.2020 as an Additional Director to hold office till the date of ensuing AGM. Theappointment of Ms. Sarita Garg as Director is being sought for the approval of Members inthe ensuing AGM.

The requisite details in connection with the appointment /re-appointment of Directors as above are provided in the Notice of said AGM.

The Company has received declaration from all the Independent Directorsconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the said Act and Regulation 16 of SEBI Listing Regulations 2015.

The details of familiarization programme for Independent Directors areavailable on the Company's website at the following web link:

https :// www. dcmshriram.com / sites / default/files/Familiarization-Programme-for-Independent-Director-2020-21.pdf

During the year Mr. Amit Agarwal was appointed as Chief FinancialOfficer (CFO) and Key Managerial Personnel (KMP) of the Company w.e.f. 1.11.2020 in placeof Mr. J.K. Jain who retired from the services of the Company from the close of 31.10.2020after a distinguished service of nearly 30 years.

Manner & Criteria of formal annual evaluation of Board sperformance and that of its Committees and Individual Directors

In compliance with requirements of the Companies Act 2013 and SEBIListing Regulations 2015 the formal annual performance evaluation of the Board itsCommittees and Individual Directors has been conducted as under:

A. Manner of evaluation as recommended to the Board by the NominationRemuneration and Compensation Committee ("NRCC")

1. The Chairman of the Board consulted each Director separately aboutthe performance of Board Committees and other Directors and sought inputs in relation tothe 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 Chairmanof NRCC collated the inputs from Directors about his performance as a Director and asChairman of the Board and the Member of the Board Committees and shared the same with theBoard.

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 bythe NRCC as follows:

Performance of Evaluation Criteria
(i) Board as a whole Structure of Board including Composition/Diversity
Fulfillment of functions of the Board (for instance and Listing Regulations);
Meetings of Board (Number/Manner of board meetings) 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 and the
Number of Committee meetings held during the year.
(iii) Individual Directs Fulfillment of responsibilities as a director as per the Companies 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
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 Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of Directors KMPs and other employees of the Companyare given in Annexure-3 of this Board s Report.

However in terms of Section 136(1) of the Act the Report and Accountsare being sent to the Members and others entitled thereto excluding the Statement ofParticulars of Employees as required under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended. The said statement isavailable for inspection by the Members at the Registered Office of the Company duringbusiness 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 4NonExecutive Independent Directors viz. Mr. Pradeep Dinodia as Chairman and Ms. RamniNirula Mr. Sunil Kant Munjal & Mr. Pravesh Sharma as Members.

Composition of other Committees

Details regarding Composition of other Committees of the Board arementioned in the Corporate Governance Report forming part of this Annual Report.

Annual Return

In terms of Section 92(3) of the Companies Act 2013 and Rule 12 of theCompanies (Management and Administration ) Rules 2014 the annual return of the Companyis available on the Company's website at the following web link:-

https://www.dcmshriram.com/annual~reports

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo.

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo are given in Annexure-4 of this Board sReport.

Secretarial Audit Report

The Board appointed M/s. Sanjay Grover & Associates CompanySecretaries to conduct the Secretarial Audit for the financial year 2020-21. TheSecretarial Audit Rep ort for the above financial year is attached as Annexure-5 to thisBoard s Report. The Secretarial Audit Report does not contain any qualification orreservation or adverse remark or disclaimer. Secretarial Standards

The Company is in Compliance with the Secretarial Standards issued bythe Institute of Company Secretaries of India (ICSI) on Meetings of the Board of Directors(SS-1) and General Meetings (SS-2).

Corporate Governance

The Company is committed to adhere to best corporate governancepractices. The separate sections on Management Discussion and Analysis CorporateGovernance and a certificate from the Statutory Auditors of the Company regardingcompliance of conditions of Corporate Governance as stipulated under SEBI ListingRegulations 2015 forms part of this Annual Report as a separate section.

Statutory Auditors

Pursuant to Section 139 of the Companies Act 2013 the Statutory

Auditors of the Company M/s. Price Waterhouse Chartered Accountants

LLP (FRN No.012754N/N500016) were appointed by the Members in its 28Annual General Meeting (AGM) held on 1.8.2017 for a period of five years i.e. from theconclusion of 28th AGM till the conclusion of 33rd AGM. The Re port given bythe Statutory Auditors on the financial statements of the Company is part of the AnnualReport. The report is unmodified and there are no qualification reservation adverseremark or disclaimer in the Report.

Directors' Responsibility Statement Your Directors state that:

a) in preparation of annual accounts for the year ended 31st March2021 the applicable accounting standards have been followed and there are no materialdepartures)

b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31" March2021 and of the profit of the Company for that period)

c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe 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 theCompany and that such internal financial controls are adequate and are operatingeffectively) and

f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

Significant and material orders

There are no significant and material orders passed by any regulatorsor courts or tribunals impacting the going concern status and the Companys operations infuture.

Industrial Relations

The Company continued to maintain harmonious and cordial relations withits workmen in all its divisions which enabled it to achieve this performance level onall fronts.

Acknowledgements

The Directors wish to thank Customers the Government AuthoritiesFinancial Institutions Bankers Other Business Associates/Stakeholders and Members forthe co-operation and encouragement extended to the Company. The Directors also place onrecord their deep appreciation for the contribution made by the employees at all levels.

.