Mar 31, 2023
The Directors have pleasure in presenting the 34th Annual Report of the Company along with Audited Financial Statements, both standalone and consolidated, for the financial year ended 31st March, 2023.
Financial Highlights
The results for the financial year ended 31.03.2023 and 31.03.2022 are as under:
(Rs. in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
31.3.2023 |
31.3.2022 |
31.3.2023 |
31.3.2022 |
|
Revenue from operations |
11,811.51 |
9,676.55 |
12,079.51 |
9,849.41 |
Profit before finance cost, depreciation and tax |
1,763.11 |
1,859.16 |
1,726.10 |
1,888.30 |
Profit before tax |
1,454.49 |
1,539.56 |
1,413.13 |
1,564.98 |
Profit after tax |
961.49 |
1,048.75 |
910.84 |
1,066.13 |
Share of profit/(loss) of joint venture |
- |
- |
1.22 |
|
Non-controlling interest |
- |
- |
||
Other comprehensive income (after tax) |
12.59 |
(8.41) |
12.75 |
(10.20) |
Total comprehensive income (after tax) |
974.08 |
1,040.34 |
923.59 |
1,057.15 |
Basic/Diluted - EPS (Rs. per equity share) |
61.66 |
67.25 |
58.41 |
68.45 |
Other equity |
6,237.18 |
5,494.74 |
6,162.40 |
5,470.45 |
State of Company''s Affairs/Performance
During the financial year 2022-23, the Company witnessed an overall strong operating and financial performance, despite the challenges arising from high energy prices, inflationary pressures and supply chain disruptions. Russia-Ukraine conflict added to uncertainties.
The Chlor-Alkali Business performed better supported by higher realizations despite high energy costs. Vinyl business reported a decline in earnings driven by higher energy prices and sharp reduction in PVC and Calcium Carbide prices from their historic highs last year. Shriram Farm Solutions & Fenesta Building Systems witnessed significant growth led by higher volumes and margins. Sugar business earnings were lower since the increase in sugarcane prices last season were not fully compensated by increase in sugar prices.
The Company''s total revenues from operation at a standalone level stood at Rs.11,812 Crores in financial year 2022-23 vs. Rs.9,677 Crores last year. Chloro-vinyl business registered a growth in revenue of about 9% driven by higher realizations and higher volumes for Chlor-alkali business partially mitigated by lower vinyl realization. Revenue for sugar business increased by 21% due to higher domestic and export sales and higher realization. Shriram Farm Solutions business registered a 9% growth in revenue, Fenesta business registered a growth of 32% led by Volumes and prices, Fertilizer business revenue witnessed a growth of ~ 50% led by higher gas prices which is a pass through, and revenue for Bioseed business also grew by 19% led by volumes.
Profit before depreciation, interest and tax was at Rs.1,763 Crores, down ~5% over last year. The same was down ~9% on a consolidated basis. The decline was driven by ~84% decrease in PBDIT of Vinyl due to primarily by realizations which came off their all-time highs, although the costs continued to remain firm led by energy and carbon costs. Chlor Alkali
business'' PBDIT recorded an increase of ~15% being driven mainly by a substantial improvement in margins due to higher average realizations that outpaced the increase in input rates especially the energy prices and salt. Sugar business recorded a decline of 20% in PBDIT in current year, higher cost of production due to increase in sugarcane cost in the last season that was not fully compensated by increase in sugar prices. Volumes & realization were better than last year. Agri-input business of Shriram Farm Solutions recorded ~37% growth in PBDIT led by better realization. Fenesta business also recorded ~70% growth in PBDIT, led by higher volumes and better margins. Fertilizer business recorded ~62% growth in PBDIT led by upward revision of energy norms and better gas prices. Bioseed PBDIT also improved significantly. Cement businesses registered de-growth in PBDIT.
Overall PBDIT margins declined to ~15% from ~19% last year.
Net Profit on standalone basis for financial year 2022-23 was lower by 8% to Rs.961 Crores from Rs.1,049 Crores in the financial year 2021-22. It was down by ~15% on a consolidated basis. Net Debt as on 31sâ March, 2023 stood at Rs.681 Crores vis-a-vis Rs.4 Crores as on 31st March, 2023. Net Debt to equity stood at 0.12x as on 31st March, 2023 vs 0.01x as on 31st March, 2022.
The Company commissioned following projects in the financial year 202223 at an investment of ~ Rs.591 Crores:
⢠120 KLD multi-feed distillery with 260 KLD grain attachment at Ajbapur
⢠3000 TCD expansion at Ajbapur complex with full capacity conversion to refined Sugar (13,500 TCD)
⢠8000 TCD capacity conversion to refinery at Hariawan Sugar unit
⢠Expansion of Anhydrous Aluminum Chloride capacity by 32,850 TPA The following projects are under implementation at our Bharuch Chemicals complex:
⢠The 850 TPD caustic soda plant along with 600 TPD flaker expected to be commissioned by Q2 FY''24
⢠Hydrogen Peroxide facility with a capacity of 56,100 TPA is progressing as per schedule, expected to be completed by Q2 FY''24
⢠Epichlorohydrine (ECH) facility with a capacity of 52,000 TPA along with Glycerin purification facility is progressing as per schedule, expected to be completed by Q3 FY''24
⢠120 MW coal based new power plant is underway and is expected to be commissioned in Q1/Q2 FY''24
⢠50 MW Renewable (Solar wind) power via SPV route (group captive) is underway and is expected to be commissioned by Q1 /Q2''FY24
⢠Hydrogen Compressors with total capacity of 0.8 Lakh NM3 per day, implementation progressing as per schedule to be completed by Q1''FY 24
⢠Anhydrous Sodium Sulphate System (AnSS) is progressing as per schedule, to be completed by Q1 FY''24
The following Projects in other business in the financial year 2022-23 are progressing as per schedule:
⢠Sugar: Manufacture of Sulphate of Potash (in a 100% subsidiary) with a capacity of 4600 TPA is progressing as per schedule, expected to be completed by Q1 FY''24
⢠Fenesta Building Systems: Extrusion plant expansion at Kota is progressing as per schedule, expected to be completed by Q2 FY''24 and Fagade fabrication plant will get commissioned by Q3 FY''24
⢠SFS: Manufacturing of Water Soluble Fertilizer and Bio products (in a 100% subsidiary) is progressing as per schedule, expected to be completed by Q3 FY''24
Your Directors are pleased to recommend a final dividend @ 180% i.e. Rs.3.60 per equity share of Rs.2 each for the year ended 31sâ March 2023, which, if declared by the Members, the total dividend for the financial year 2022-23 will aggregate to 700% i.e. Rs. 14 per equity share of Rs.2 each (including 1st Interim Dividend @ 230% i.e. Rs.4.60 per equity share and 2nd Interim Dividend @ 290% i.e. Rs.5.80 per equity share declared in October 2022 and January 2023, respectively).
The Dividend Distribution Policy of the Company as approved by the Board is available on the Company''s website at the following web link:
https://www.dcmshriram.com/sites/default/files/Dividend%20Distribution
%20Policv%20-%20Final%20-%20Website.pdf
During the financial year 2022-23, the Company transferred a total of Rs.17.50 Crores to Reserves, namely, Rs.12.30 Crores to Cash Flow Hedging Reserve, Rs.5.01 Crores to General Reserve and Rs.0.19 Crores to Storage Fund for Molasses.
Number of Meetings of the Board
The Board met 6 times during the financial year 2022-23 on 5th May 2022, 17th May 2022, 19th July 2022, 18th August 2022, 19th October 2022 and 20th January 2023.
Report on Performance and Financial Position of Subsidiaries, Associate and JV Company
The details regarding the performance and financial position of the Company''s Subsidiaries and Associate, etc. are appearing in Form AOC-1 given at Annexure-1 of this Board''s Report.
Key updates on subsidiaries/associate of the Company During the year under review:
⢠The Company has subscribed and invested in the shares of DCM Shriram Bio Enchem Limited, DCM Shriram Prochem Limited, DCM Shriram Ventures Limited and Shriram Agsmart Limited (formerly known as DCM Shriram Agsmart Limited) consequent to which these companies have become the wholly owned subsidiaries of the Company.
⢠ReNew Green (GJ Ten) Private Limited has become Associate of the Company, as the Company has invested in its Equity Shares representing 31.20% of its paid-up share capital.
The contribution of subsidiaries and associates to the overall performance of the Company is outlined in Note No. 57 of the Consolidated Financial Statements.
Risk Management Framework
The Company has in place an effective Risk Management Framework. The Company has also formulated a Risk Management Policy and further updated the Risk Management Framework during the financial year 2021-22 to align the same with the amendments in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the âSEBI Listing Regulations 2015â) on Risk Management and also to make it more contemporary and suitable to the requirements of changing business scenarios. These were approved by the Board on October 19, 2021. The said framework includes identification, assessment, response and monitoring system for mitigation of various risks.
Companyâs Policy on Directorsâ Appointment and Remuneration The criteria for Directors'' appointment has been set up by the Nomination, Remuneration and Compensation Committee (NRCC), which, inter-alia, includes criteria for determining qualifications, positive attributes, independence of a Director, basis/criteria of remuneration to Directors/KMPs and other matters provided under Section 178 of the Companies Act, 2013 (the âAct'') and the SEBI Listing Regulations 2015.
The Company has a remuneration Policy in place which deals in the remuneration of the Directors, Key Managerial Personnel (KMPs), Senior Management Personnel (SMPs) and other employees of the Company. The said remuneration policy is available on the Company''s website at the following web link:
http://www.dcmshriram.com/sites/default/files/Remuneration%20P olicy
0.pdf
Corporate Social Responsibility (CSR)
The details of the programs/activities undertaken as CSR along with Annual Report on CSR activities and the composition of CSR Committee are provided in a separate section, which forms part of this Board''s Report. The Company has a policy on CSR which includes the guidelines on the major areas in which the Company engages itself with the CSR activities/projects and the manner of implementation and monitoring the activities/projects. The composition of CSR committee, CSR policy and details of activities/projects approved by the Board are also available on the Company''s website at the following web link: https://www.dcmshriram.com/social-responsibility Vigil Mechanism/Whistle Blower Policy
The Company has in place a Vigil Mechanism/Whistle Blower Policy which is available on the Company''s website at the following web link: https://www.acmshriram.com/sites/aeTault/Tiles/vigil%20Mechanism%20 Policy.pdf
Internal Complaints Committee on POSH
The Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (âPOSHâ). During the financial year 2022-23, 2 cases were reported on sexual harassment which stand resolved at the end of the financial year.
Cost Records
The Company is required to maintain Cost Records as directed by the Central Government pursuant to Section 148(1) of the Act and accordingly such accounts and records are prepared and maintained by the Company. Related Party Transactions
During the financial year 2022-23, there has been no materially significant related party transaction between the Company and its related parties which requires disclosure in Form AOC-2.
The Company has formulated a Policy on dealing with Related Party Transactions, which is available on the Company''s website at the following web link:
https://www.dcmshriram.com/sites/default/files/RPT%20Policv.pdf Material Subsidiary Policy
The Company has formulated a Policy for determining âMaterial'' Subsidiaries, which is available on the Company''s website at the following web link:
https://www.dcmshriram.com/sites/default/files/MATERIAL%20SUBSIDIA
RY%20POLICY%20-%20FINAL.pdf
As on 31sâ March, 2023, basis the above policy, there was no âMaterial Subsidiaryâ of the Company.
Particulars of Loans, Guarantees or Investments The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act and relevant rules thereunder are given in the Notes to the Financial Statements.
Fixed Deposits
1. The details relating to deposits for the financial year 2022-23, covered under Chapter V of the Act is as under:
a) Accepted including renewals during the year: Rs. 4,48,48,498
b) Remained unpaid/ unclaimed as at the end of the year: Nil
c) There has been no default in repayment of deposits or payment of interest thereon during the financial year 2022-23
2. All the deposits are in compliance with the requirements of Chapter V of the Act.
Internal Financial Control with respect to Financial Statements
The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation of such controls was observed during the financial year 2022-23.
DCM Shriram Employee Stock Purchase Scheme
The Company has an Employee Stock Purchase Scheme (DCM Shriram ESPS) duly approved by Members, vide Special Resolution passed on August 13, 2013 and later aligned in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014. Thereafter, the Board of Directors at its meeting held on 2nd May 2023, has recommended amendments in the Scheme to align the same with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, to the Members for approval through Postal Ballot. DCM Shriram ESPS is a secondary market scheme. DCM Shriram ESPS provides for grants of equity shares through Trust, purchased from secondary market, to the eligible Employees as may be decided by the Nomination, Remuneration and Compensation Committee from time to time.
There are no voting rights exercised on the shares held by the Trust. The details required as per SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available on the Company''s website at the following web link:
https://www.dcmshriram.com/DCM-Shriram-ESPS-Report Directors and Key Managerial Personnel (KMP)
Mr. Ajit S. Shriram and Mr. K.K. Sharma, Directors liable to retire by rotation at the ensuing Annual General Meeting (âAGM''), and being eligible, offer themselves for re-appointment.
Approval of the Members is being sought in the ensuing AGM for reappointment of Mr. Ajay S. Shriram as Chairman and Senior Managing Director and Mr. Vikram S. Shriram as Vice Chairman and Managing Director of the Company, for a further period of 5 years w.e.f. 1st November 2023 as recommended by Nomination, Remuneration and Compensation Committee and Board of Directors.
The Board of Directors at its meeting held on 2nd May 2023, on recommendation of Nomination, Remuneration and Compensation Committee has approved the appointment of Mr. Aditya A. Shriram as an Additional Director, and also as Deputy Managing Director of the Company w.e.f. 2nd July 2023, subject to approval of the Members. The approval of the Members is being sought in the ensuing AGM for appointment of Mr. Aditya A. Shriram as Director and also Deputy Managing Director of the Company for a period of 5 years w.e.f. 2nd July 2023 as recommended by Nomination, Remuneration and Compensation Committee and Board of Directors.
The requisite details as required to be disclosed in connection with the appointment/re-appointment of Directors as above are mentioned in the Notice of AGM.
The Company has received declaration from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16 of SEBI Listing Regulations 2015.
The details of familiarization programme for Independent Directors are available on the Company''s website at the following web link: https://www.dcmshriram.com/independent-directors
Manner & Criteria of formal annual evaluation of Boardâs performance and that of its Committees and Individual Directors
In compliance with requirements of the Act and the SEBI Listing Regulations 2015 the formal annual performance evaluation of the Board, its Committees and Individual Directors has been conducted as under:
A. Manner of evaluation as recommended to the Board by the Nomination, Remuneration and Compensation Committee (âNRCCâ)
1. The Chairman of the Board consulted each Director separately about the performance of Board, Committees and other Directors and sought inputs in relation to the above. The Chairman then collated all the inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman of the Board, the Chairman of NRCC collated the inputs from Directors about his performance as a Director and as Chairman of the Board/Company and as Chairman/Member of the Board Committees and shared the same with the Board.
The Board as a whole discussed the inputs on performance of Board/Committees/Individual Directors and performed the evaluation.
B. Criteria of evaluation as approved by the NRCC
The aforesaid evaluation was conducted as per the criteria laid down by the NRCC as follows:
Performance of |
Evaluation Criteria |
(I) Board as a whole |
Structure of Board including Composition/Diversity/ Process of appointment/qualifications/experience, etc; Fulfillment of functions of the Board (for instance guiding corporate strategy, risk policy, business plans, corporate performance, monitoring Company''s governance practices etc., as per the Companies Act and SEBI Listing Regulations); Meetings of Board (Number/Manner of board meetings) held during the year including quality/quantity/timing of circulation of agenda for Board Meetings, approval process/recording of minutes and timely dissemination of information to Board; and Professional Development and Training of Board of Directors as required. |
(ii) Board Committees |
Composition of Committee; Fulfillment of functions of the Committee with reference to its terms of reference, the Companies Act, 2013 and the SEBI Listing Regulations 2015; and Number of Committee meetings held during the year. |
(iii) Individual Directors |
Fulfillment of responsibilities as a director as per the Companies Act, 2013, the SEBI Listing Regulations 2015 and applicable Company policies and practices; In case of the concerned director being Independent Director, Executive Director, Chairperson of the Board or Chairperson or member of the Committees, with reference to such status and role; In case of Independent Directors, fulfillment of the independence criteria as specified under applicable Regulations and their independence from the management; Board and/or Committee meetings attended; and General meetings attended. |
Particulars of Employees and Managerial Remuneration
The details required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, KMPs and other employees of the Company, are given in Annexure-2 of this Board''s Report.
However, in terms of Section 136(1) of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the Statement of Particulars of Employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended. The said statement is available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting.
Composition of Audit Committee
As on the date of this report, the Audit Committee comprises of 4 NonExecutive Independent Directors, viz., Mr. Pradeep Dinodia as Chairman and Ms. Ramni Nirula, Mr. Sunil Kant Munjal and Mr. Pravesh Sharma as Members.
Composition of other Committees
Details regarding composition of other Committees of the Board are mentioned in the Corporate Governance Report forming part of this Annual Report.
Annual Return
In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the Company''s website at the following web link:-https://www.dcmshriram.com/annual reports
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-3 of this Board''s Report.
Secretarial Audit Report
The Board appointed M/s Sanjay Grover & Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the said financial year is attached as Annexure-4 to this Board''s Report. The Secretarial Audit Report does not contain any qualification or reservation or adverse remark or disclaimer. Secretarial Standards
The Company is in compliance with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
Management Discussion and Analysis
A separate section on the Management Discussion and Analysis on the operations of the Company forms part of this Annual Report.
Business Responsibility and Sustainability Report
A separate section on the Business Responsibility and Sustainability Report prepared pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations 2015 forms part of this Annual Report.
Corporate Governance
The Company is committed to adhere to the best Corporate Governance practices. A separate section on the Corporate Governance, along with a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the SEBI Listing Regulations 2015, forms part of this Annual Report. Statutory Auditors
Pursuant to Section 139 of the Act, M/s Deloitte Haskins & Sells, Delhi, a firm of Chartered Accountants (FRN No.015125N) were appointed as Statutory Auditors of the Company by the Members in its 33''d Annual General Meeting (AGM) held on 19th July 2022 for a period of five years i.e. from the conclusion of 33rd AGM till the conclusion of 38th AGM.
The Reports given by the Statutory Auditors on the financial statements (Standalone and Consolidated) of the Company for the financial year 2022-23 are forming part of this Annual Report. The said Reports are unmodified and there are no qualifications, reservation, adverse remark or disclaimer.
Directors'' Responsibility Statement Your Directors state that:
a) in preparation of annual accounts for the year ended 31st March 2023, the applicable accounting standards have been followed and there are no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2023 and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls as followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Significant and material orders
There are no significant and material orders passed by any regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with its workmen in all its divisions, which enabled it to achieve this performance level on all fronts.
Other Disclosures
(i) No material change or commitment has occurred after close of the financial year 2022-23 till the date of this Report, which affects the financial position of the Company.
(ii) There are no proceedings initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016 which impact the business of the Company.
(iii) There were no instances of one time settlement which require the valuation from the banks or financial institutions.
(iv) There were no instances of any fraud reported by the Auditors under Section 143(12) of the Act.
Acknowledgements
The Directors wish to thank Customers, the Government Authorities, Financial Institutions, Bankers, Other Business Associates/Stakeholders and Members for the co-operation and encouragement extended to the Company. The Directors also place on record their deep appreciation for the contribution made by the employees at all levels.
On behalf of the Board
New Delhi AJAY S. SHRIRAM
2nd May 2023 Chairman & Senior Managing Director
DIN: 00027137
Mar 31, 2022
The Directors have pleasure in presenting the 33rd Annual Report of the Company along with Audited Financial Statements, both standalone and consolidated, for the year ended 31st March, 2022.
Financial Highlights
The results for the year ended 31.03.2022 and 31.03.2021 are as under:
(Rs. in Crores) |
||||
Particulars |
Standalone |
Consolidated |
||
31.3.2022 |
31.3.2021 |
31.3.2022 |
31.3.2021 |
|
Revenue from operations |
9,676.55 |
8,211.99 |
9,849.41 |
8,308.16 |
Profit before finance cost, |
1,859.16 |
1,227.42 |
1,888.30 |
1,244.28 |
depreciation and tax |
||||
Profit before tax |
1,539.56 |
875.77 |
1,564.98 |
889.17 |
Profit after tax |
1,048.75 |
662.48 |
1,066.13 |
672.26 |
Share of profit/(loss) of joint venture |
- |
1.22 |
1.73 |
|
Non-controlling interest |
- |
- |
(0.71) |
|
Other comprehensive income (after tax) |
(8.41) |
6.84 |
(10.20) |
4.39 |
Total comprehensive income (after tax) |
1,040.34 |
669.32 |
1,057.15 |
677.67 |
Basic/Diluted - EPS (Rs. per equity share) |
67.25 |
42.48 |
68.45 |
43.17 |
Retained earnings- opening balance |
4,655.69 |
4,072.45 |
4,559.92 |
3,963.29 |
Add/(less): |
||||
Profit for the year |
1,048.75 |
662.48 |
1,067.35 |
673.28 |
Dividends paid during the year |
(212.08) |
(85.77) |
(212.08) |
(85.77) |
Others |
4.49 |
6.53 |
4.86 |
9.12 |
Retained earnings - closing balance |
5,496.85 |
4,655.69 |
5,420.05 |
4,559.92 |
State of Company''s Affairs/Performance
During FY''22, your Company witnessed strong operating and financial performance, despite the challenges arising from second and third waves of Covid-19, supply chain disruptions and high energy prices. Russia-Ukraine conflict is adding to uncertainties. The businesses have been resilient during these times.
The earnings were driven higher mainly by improvement in margins despite higher input rates as product prices rose substantially higher. The Chloro-vinyl business reported strong growth driven by higher realizations in line with international prices and volumes. Businesses viz. Shriram Farm Solutions and Fenesta also witnessed satisfactory growth led by higher volumes, benefiting from the improvement in overall economic scenario. The Sugar business, however witnessed lower earnings as both domestic and export volumes were lower, constraint of molasses availability during off season and higher costs of Sugar cane, lower production and lower sugar recovery.
Your Company''s total revenues from operation at a standalone level stood at Rs. 9,677 Crores in FY''22 vs. Rs. 8,212 Crores last year. Chloro-vinyl business registered a growth in revenue of about 79% driven by higher realizations for all products and higher volumes for chlor-alkali business. Revenue for sugar business declined by 27% due to lower export and domestic sugar volumes. Shriram Farm Solutions business registered an 11% growth in revenue, Fenesta business registered a growth of 47% led by volumes and prices, and Fertilizer business revenue also witnessed a growth of ~ 47% led by higher gas prices, while the revenue from Bioseed business declined by 13% led by volumes.
Profit before depreciation, interest and tax, improved to Rs. 1,859 Crores, up ~51% over last year. The same is up ~52% on a consolidated basis.
The improvement was driven by ~168% increase in PBDIT of chlor-alkali business due to both higher realizations and higher volumes. Vinyl business'' PBDIT recorded an increase of ~72% driven by higher realizations. Sugar business recorded a decline of 20% in PBDIT in current year as the volumes were lower along with higher costs in the current season. Agri-input business of Shriram Farm Solutions recorded ~24% growth in PBDIT led by higher volumes. Fenesta business also recorded ~95% growth in PBDIT, led by higher volumes and prices. Bioseed and Cement businesses registered de-growth in PBDIT. Overall PBDIT margins improved to ~19% from ~15% last year.
Net Profit on standalone basis for FY''22 is up by 58% to Rs. 1049 Crores from Rs. 662 Crores for FY''21. It is up by ~59% on a consolidated basis. Net Debt as on March 31,2022 stood at Rs. 4 crore vis-a-vis Rs. 135 crore as on March 31,2021. Net Debt to equity stood at 0.01x as on March 31, 2022 vs 0.04x as on March 31,2021.
The Company commissioned following project during FY''22 at an investment of ~ Rs. 39 Crores:
⢠Electrolysers cell units, cathode and anode replacement at Kota, commissioned in Q4''22.
The following projects are under implementation at the Bharuch complex:
⢠The 700 TPD caustic soda plant along with 500 TPD flaker has been re-calbirated and we will be expanding our caustic capacity at Bharuch by 850 TPD and Flakes capacity by 600 TPD, to be commissioned by Q4 FY 23 / Q1 FY 24.
⢠Hydrogen Peroxide facility with a capacity of 52500 TPA expected to be commissioned by Q4 FY 23 / Q1 FY 24.
⢠Epichlorohydrine (ECH) facility with a capacity of 51000 TPA along with Glycerin purification facility expected to be commissioned by Q4 FY''23 / Q1 FY''24.
⢠Expansion of Anhydrous Aluminum Chloride capacity by 32850 TPA to be commissioned in phases by Q4 FY''23.
⢠120 MW coal based new power plant is underway and is expected to be commissioned in Q2 FY''23.
⢠Hydrogen Compressors with total capacity of 60398 NM3 per day, implementation progressing as per schedule and expected to be commissioned by Q4 FY ''23/Q1 FY ''24.
The following Projects announced for sugar business in FY''22 are progressing as per schedule:
⢠120 KLD multi-feed distillery at Ajbapur expected to be commissioned by Q3 FY ''23.
⢠Crushing capacity Expansion at Ajbapur (3000 TCD) along with full conversion to Refined Sugar (13500 TCD) and Additional Grain Attachment (260 KLD), expected to be commissioned by Q3 FY ''23.
⢠Hariawan Refinery Expansion (8000 TCD), expected to be commissioned by Q3 FY ''23.
Your Directors are pleased to recommend a final dividend @ 245% i.e. Rs. 4.90/- per equity share of Rs. 2/- each for the year ended 31.03.2022, which if declared by the Members, the total dividend for the financial year 2021-22 will aggregate to 735% i.e. Rs. 14.70/- per equity share of Rs. 2/- each (including the interim dividends @ 490% i.e. Rs. 9.80 per equity share paid during the year).
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://www.dcmshriram.com/sites/default/files/Dividend%20Distribution %20Policv%20-%20Final%20-%20Website.pdf Number of Meetings of the Board
The Board met 6 times during the financial year FY''22 on 04.05.2021, 20.07.2021,13.09.2021,19.10.2021,08.11.2021 and 18.01.2022.
Report on Performance and Financial Position of Subsidiaries, Associate and JV Company
The details regarding the performance and financial position of Company''s Subsidiaries, Associate and JV are given in Annexure-1 of this Board''s Report.
⢠Key updates on subsidiaries of the Company
(i) The liquidation of Shriram Bioseed (Thailand) Limited, a step down subsidiary of the Company, is completed on 15th June 2021.
(ii) The Company acquired 1,732,500 equity shares of Shriram Polytech Ltd. (earlier known as Shriram Axiall Pvt. Ltd.) (a 50:50 JV between the Company and Axiall LLC, USA), from Axiall LLC being entire 50% of the paid-up share capital held by Axiall LLC in Shriram Polytech Ltd.. Post acquisition, it has become the wholly owned subsidiary of the Company.
⢠Key updates relating to subsidiaries of the Company since the end
of the Year and till the date of this Report
(i) The Scheme of Amalgamation for merger of Bioseeds Limited, Mauritius into Shriram Bioseed Ventures Limited (both wholly owned subsidiaries of the Company) has been approved by Hon''ble National Company Law Tribunal (NCLT) vide its order dated 29th March 2022 which became effective on 27th April 2022 on filing the certified copy of order of NCLT with Registrar of Companies.
Risk Management Framework
The Company has in place an effective Risk Management Framework. The Company has also formulated a Risk Management Policy and further updated the Risk Management Framework during the FY''22 to align the same with the recent amendments in SEBI Listing Regulations on Risk Management and also to make it more contemporary and suitable to the requirements of changing business scenarios. These were approved by the Board on October 19, 2021. The said framework includes identification, assessment, response and monitoring system for mitigation of various risks.
Company''s Policy on Directors'' Appointment and Remuneration
The criteria for Directors'' appointment has been set up by the Nomination, Remuneration and Compensation Committee (NRCC), which, inter-alia, includes criteria for determining qualifications, positive attributes, independence of a Director, basis/criteria of remuneration to Directors / KMPs and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013 (''the Act'').
The Company has a remuneration Policy in place which deals in the remuneration of the Directors, Key Managerial Personnel (KMPs), Senior Management Personnel (SMPs) and other employees of the Company. The said remuneration policy is available on the Company''s website at the following web link:
https://www.dcmshriram.com/sites/default/files/Remuneration%20Policy
0.pdf
Corporate Social Responsibility (CSR)
The details of the programs/activities undertaken as CSR along with Annual Report on CSR activities and the composition of CSR Committee are provided in a separate section, which forms part of this Board''s Report. The Company has a policy on CSR which includes the guidelines on the major area in which the Company engages itself with the CSR activities/ projects and the manner of implementation and monitoring the activities/ projects. The composition of CSR committee, CSR policy and details of activities/projects approved by the Board are available on the Company''s website at the following web link: https://www.dcmshriram.com/social-responsibility Vigil Mechanism/Whistle Blower Policy
The Company has in place a Vigil Mechanism/Whistle Blower Policy which is available on the Company''s website at the following web link: https://www.dcmshriram.com/sites/default/files/Vigil%20Mechanism%20 Policy.pdf
Internal Complaint Committee on POSH
The Company has complied with the provisions relating to constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (âPOSHâ). No case was reported on sexual harassment during the FY''22.
The Company is required to maintain Cost Records as directed by the Central Government pursuant to Section 148(1) of the Act and accordingly such accounts and records are prepared and maintained by the Company. Related Party Transactions
During the FY''22, there has been no materially significant related party transaction between the Company and its related parties which requires disclosure in Form AOC-2.
The Company has formulated a Policy on dealing with Related Party transactions, which is available on the Company''s website at the following web link:
https://www.dcmshriram.com/sites/default/files/RPT%20Policy.pdf
The Company has formulated a Policy for determining ''Material'' Subsidiaries, which is available on the Company''s website at the following web link:
https://www.dcmshriram.com/sites/default/files/MATERIAL%20SUBSIDIA
RY%P0PQIICY%P0-%P0FINAI pdf
Particulars of Loans, Guarantees or Investments
The details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act and relevant rules thereunder are given
in the notes to Financial Statements.
Fixed Deposits
1. The details relating to deposits for the FY''22, covered under Chapter V of the Act:
a) accepted including renewals during the year : Rs.25,59,94,055/-
b) remained unclaimed as at the end of the year : Rs.3,58,563/-
c) there has been no default in repayment of deposits or payment of interest thereon during the FY''22
2. All the deposits are in the Compliance with the requirements of Chapter V of the Companies Act, 2013.
Internal Financial Control with respect to Financial Statements
The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation of such controls was observed during the FY''22.
DCM Shriram Employee Stock Purchase Scheme The Company has an Employee Stock Purchase Scheme (DCM Shriram ESPS) duly approved by Members, vide Special Resolution passed on August 13, 2013 and later aligned in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014. DCM Shriram ESPS provides for grants of equity shares through Trust, purchased from secondary market, to the eligible Employees as may be decided by the Nomination, Remuneration and Compensation Committee from time to time. DCM Shriram ESPS is a secondary market scheme and hence no fresh issue of shares was made. There are no voting rights exercised on the shares held by the Trust. Further, there are no material changes in the DCM Shriram ESPS and 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 at the following web link:
https://www.dcmshriram.com/DCM-Shriram-ESPS-Report Directors and Key Managerial Personnel (KMP)
Mr. K.K Kaul and Ms. Sarita Garg, Directors liable to retire by rotation at the ensuing Annual General Meeting (AGM), and being eligible, offer themselves for re-appointment.
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 Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16 of SEBI Listing Regulations.
The details of familiarization programme for Independent Directors are
available on the Company''s website at the following web link:
https://www.dcmshriram.com/independent-directors
Manner & Criteria of formal annual evaluation of Board''s performance
and that of its Committees and Individual Directors
In compliance with requirements of the Act and SEBI Listing Regulations
the formal annual performance evaluation of the Board, its Committees
and Individual Directors has been conducted as under:
A. Manner of evaluation as recommended to the Board by the Nomination, Remuneration and Compensation Committee (âNRCCâ)
1. The Chairman of the Board consulted each Director separately about the performance of Board, Committees and other Directors and sought inputs in relation to the above. The Chairman then collated all the inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman of the Board, the Chairman of NRCC collated the inputs from Directors about their performance as a Director and as Chairman of the Board and the Member of the Board Committees and shared the same with the Board.
The Board as a whole discussed the inputs on performance of Board/Committees/Individual Directors and performed the evaluation.
B. Criteria of evaluation as approved by the NRCC
The aforesaid evaluation was conducted as per the criteria laid down by the NRCC as follows:
Performance of |
Evaluation Criteria |
(i) Board as a whole |
Structure of Board including Composition/Diversity /Process of appointment/qualifications/experience, etc; Fulfillment of functions of the Board (for instance guiding corporate strategy, risk policy, business plans, corporate performance, monitoring Company''s governance practices etc., as per the Companies 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; 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 Listing Regulations; and Number of Committee meetings held during the year. |
(iii) Individual Directors |
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 reference to such status and role; In case of Independent Directors fulfillment of the independence criteria as specified under applicable Regulations and their independence from the management; Board and/or Committee meetings attended; and General meetings attended. |
Particulars of Employees and Managerial Remuneration
The details required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, KMPs and other employees of the Company, are given in Annexure-2 of this Board''s Report.
However, in terms of Section 136(1) of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the Statement of Particulars of Employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended. The said statement is available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting.
Composition of Audit Committee
As on the date of this report, the Audit Committee comprises of 4 NonExecutive Independent Directors, viz., Mr. Pradeep Dinodia as Chairman and Ms. Ramni Nirula, Mr. Sunil Kant Munjal & Mr. Pravesh Sharma as Members.
Composition of other Committees
Details regarding Composition of other Committees of the Board are mentioned in the Corporate Governance Report forming part of this Annual Report.
Annual Return
In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company is available on the Company''s website at the following web link:-https://www.dcmshriram.com/annual reports
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-3 of this Board''s Report.
Secretarial Audit Report
The Board appointed M/s. Sanjay Grover & Associates, Company Secretaries, to conduct the Secretarial Audit for the FY''22. The Secretarial Audit Report for the said financial year is attached as Annexure-4 to this Board''s Report. The Secretarial Audit Report does not contain any qualification or reservation or adverse remark or disclaimer.
Secretarial Standards
The Company is in Compliance with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
Corporate Governance
The Company is committed to adhere to best corporate governance practices. The separate sections on Management Discussion and Analysis, Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI Listing Regulations forms part of this Annual Report as a separate section.
Statutory Auditors
Pursuant to Section 139 of the Act, the Statutory Auditors of the Company, M/s. Price Waterhouse Chartered Accountants LLP (FRN No.012754N/ N500016) were appointed by the Members in its 28th Annual General Meeting (AGM) held on 01.08.2017 for a period of five years i.e. from the conclusion of 28th AGM till the conclusion of 33rd AGM.
The Report given by the Statutory Auditors on the financial statements of the Company is part of the Annual Report. The report is unmodified and there are no qualifications, reservation, adverse remark or disclaimer in the Report.
Directors'' Responsibility Statement
Your Directors state that:
a) in preparation of annual accounts for the year ended 31st March, 2022, the applicable accounting standards have been followed and there are no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2022 and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls as followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Significant and material orders
There are no significant and material orders passed by any regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with its workmen in all its divisions, which enabled it to achieve this performance level on all fronts.
Acknowledgments
The Directors wish to thank Customers, the Government Authorities, Financial Institutions, Bankers, Other Business Associates/Stakeholders and Members for the co-operation and encouragement extended to the Company. The Directors also place on record their deep appreciation for the contribution made by the employees at all levels.
On behalf of the Board
New Delhi AJAY S. SHRIRAM
5.5.2022 Chairman & Senior Managing Director
DIN:00027137
Mar 31, 2018
Boardâs Report
The Directors have pleasure in presenting the 29 Annual Re port of the Company along with Audited Financial Statements, both standalone and consolidated, for the year ended 31â March, 2018.
The results for the year ended 31.3.2018 and 31.3.2017 are as under:
(Rs. in crores)
Particulars Standalone |
Consolidated |
|||
31.3.2018 |
31.3.2017 |
31.3.2018 |
31.3.2017 |
|
Revenue from operations |
6,912.99 |
6,060.94 |
7,006.56 |
6,117.19 |
Prom before finance cost, depreciation, tax and exceptional item |
1,105.53 |
860.09 |
1,091.04 |
817.86 |
Profit before exceptional |
885.46 |
676.13 |
867.34 |
632.70 |
Exceptional item : Provision for impairment of (Bioseed business) |
85.12 |
|||
Profit before tax |
885.46 |
591.01 |
867.34 |
632.70 |
Profit after tax |
688.44 |
522.07 |
668.66 |
552.33 |
Share of profit/(loss) of joint venture Non-controlling interest Other comprehensive income (after tax) |
(0.45) |
(7.47) |
0.04 0.86 0.24 |
0.03 (0.68) (3.58) |
Total comprehensive income (after tax) |
687.99 |
514.60 |
669.80 |
548.10 |
Basic/Diluted - EPS (Rs. per equity share) - Before exceptional item - After exceptional item |
42.39 42.39 |
37.06 32.14 |
41.22 41.22 |
33.97 33.97 |
Retained earnings - Add/(less): Profit for the year Dividends (including dividend tax) Others |
2,472.36 688.44 (160.30) (0.77) |
2,070.22 522.07 (113.37) (6.56) |
2,410.92 669.56 (160.30) (0.81) |
1,979.03 551.68 (113.37) (6.42) |
Retained earnings - |
2,999.73 |
2,472.36 |
2,919.37 |
2,410.92 |
State of Company''s Affairs/Performance
The Company recorded satisfactory performance for the year. Chlor- Al kali business has become stronger with economies of scale and substantial improvement in power efficiencies. Sugar business is experiencing difficult price situation with prices significantly below cost. Other businesses continue to perform reasonably.
The Companyâs total revenues from operations stood at Rs.7,007 Crores in FY18 vs. Rs.6,117 C rores last year. Revenue of chemicals business up by 57% driven by increased volumes due to full capacity utilization of expanded capacity at Bharuch and increase in realizations. Revenue of Sugar business up by 24% with higher volumes aided by higher cane crush.
EBITDA for FY18 stood at Rs.1,091 C rores, a significant improvement from Rs.818 C rores recorded last year. This improvement was lead by better volumes and margins in Chemicals business. Sugar business recorded low EBITDA d ue to write down of inventory by Rs.185 C rores for FY18 (valued at net realizations) and higher cost of production.
Our Agri-input businesses of Shriram farm solutions and Bioseed recorded some revival in FY18 aided by better monsoon and better liquidity after the effects of demonetization. Fenesta business continues to register good growth.
Overall EBIDTA margins improved to 16% from 13% last year.
Net Profit for FY18 was up by 21% to Rs.670 C rores from Rs.552 Crores in FY17.
Net Debt stood at Rs.653 Crores vs. Rs.928 C rores last year. Debt equity ratio stood at 0.21x vs 0.37x last year.
The Company commissioned 150 KLD distillery at its Sugar unit located at Hariawan at total investment of ~Rs.188 Crores. Distillery will start contributing to the earnings of the Company from the next year.
During the year the Company has announced new capital expenditure projects for expansion cum modernization at an investment of ~Rs.1125 Crores in Chlor- Vinyl and Sugar businesses. These projects are expected to be commissioned in phases in FY 2019 and FY 2020.
Dividend
Your Di rectors are pleased to recommend a final dividend @ 40% i.e. Re.0.80/- per equity share of Rs.2/- each for the year ended 31.3.2018, which if declared by the Members, the total dividend for the financial year
2017-18 will aggregate to 410% i.e. Rs.8.20/- per equity share of Rs.2/-each (including two interim dividends aggregating @ 370% i.e. Rs.7.40 per equity share).
Further, as per the requirement of Regulation 43A of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, Dividend Distribution Poli cy of the Company is attached as Annexureâ1.
Number of Meetings of the Board
The Board met 5 times during the financial year on 1.5.2017, 1.8.2017, 7.11.2017, 20.1.2018 & 23.2.2018.
Report on Performance and Financial Position of Subsidiaries, Associate and JV Company
The details regarding the performance and financial position of Company''s Subsidiaries, Associate and JV 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 Board on 28.1.2006 and was implemented w.e.f. 2.1.2007. T he said framework includes risk identification, 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 determining qualifications, positive attributes, independence of a Director and other matters provided under Sub-section (3) of Section 178 of Companies Act, 2013 (the Act). The Remuneration Policy is attached as Annexure-3 to this Board s Report.
Corporate Social Responsibility
The details about the Policy on Corporate Social Responsibility (CSR) including programmes/activities undertaken on CSR, Annual Report on
CSR activities and the composition of CSR Committee are provided in a separate section, which forms part of this Board''s Report.
Business Responsibility Report
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report (BRR) forms part of this Annual R eport. The report, inter-alia, describes the initiatives taken by the Company from environmental, social and governance perspective.
Vigil Mechanism
The Company has established a Vigil Mechanism/W histle Blower Policy as per the requirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013 which is also available on Company''s website at the following web link:
(http: //dcmshriram.com/sites /d efault/files/vigil-mechanism.pdf)
Related Party Transactions
During the year, there has been no materially significant related party transaction between the Company and its related parties which requires disclosure in Form AOC-2.
The Company has formulated a Policy on dealing with Related Party transactions, which is also available on Company''s website at the following web link: ss/default/file s/Rela te d %20Pa rty%20Tr nsaction%20%20-%20Final%20%28BM-12.11.2014%29.pdf)
Material Subsidiary Policy
The Company has formulated a Policy for determining Material Subsidiaries, which is also available on Company''s website at the following web link:
(https://www.dcmshriram.com/sites /default/files/MATERIAL%20SUBSIDI
ARY%20POLICY%20-%20FINAL.pdf)
Particulars of Loans, Guarantees or Investments
The details of Loans, Guarantees and Investments covered under the provisions of Section 186 o f the Act and relevant rules there under are given in the notes to Financial Statements.
Fixed Deposits
1. The details relating to deposits, covered under Chapter V of the Act:
a) accepted including renewals during the year : Rs.6,53,50,000/-
b) remained unclaimed as at the end of the year : Rs.1,54,398/-
c) there has been no default in repayment of deposits or payment of interest thereon during the financial year ended on 31â March, 2018.
2. There are no deposits, which are in non-compliance with the requirements of Chapter V of the Act.
3. Section 124 and other applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) as
amended from time to time, mandates that the matured deposits including interest that has remained unpaid/unclaimed for a period of seven years be transferred to the Investor Education and Protection
Fund (the Fund), established by the Central Government. According to the said Rules, during the year matured deposits including interest of Rs.61,565/- has been transferred to the Investor Education and Protection Fund (IEPF).
Details in respect of adequacy of Internal Financial Control with respect to Financial Statements
The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation in such controls was observed during the year.
DCM Shriram Employee Stock Purchase Scheme
The Company has an Employee Stock Purchase Scheme (DCM Shriram ESPS) d uly approved by Members, vide Special Resolution passed on August 13, 2013 and aligned in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014. DCM Shriram ESPS provides for grants of equity shares through Tru st, purchased from secondary market, to the eligible Employees as may be decided by the Nomination, Remuneration and Compensation Committee from time to time. DCM Shriram ESPS is a secondary market scheme and hence no fresh issue of shares was made. There are no voting rights exercised on the shares held by the Trust. F urther, there are no material changes in the DCM Shriram ESPS and it is in compliance with the applicable regulations. The details required as per SEBI (Share Based Employee Benefits ) Regulations, 2014 is available at the following web link of the Company:
(https://www.dcmshriram.com/sites/default/files/ESPS%20Disclosure%2
0-%202017-18.pdf)
Directors and Key Managerial Personnel (KMP)
Mr. K.K. Kaul and Mr. Sharad Shrivastva, Directors retire by rotation, and being eligible, offer themselves for re-appointment.
Re-appointment of Mr. Ajay S. Shriram, Chairman & Senior Managing Director and Mr. Vikram S. Shriram, Vice Chairman & Managing Director, are being sought in the ensuing Annual General Meeting (AGM) of the Company for a period of five years w.e.f. 1.11.2018 . The requisite details of the re-appointment are mentioned in the said AGM N otice.
During the year, Mr. K.K. Sharma was appointed as Additional Director by the Board. He was also appointed as Whole Time Direc :tor (EHS), w.e.f. 20.11.2017, s ubject to the approval of the Members which is being sought in the ensuing AGM.
Dr. N.J . Singh ceased to be Director of the Company w.e.f. 19.11.2017.
The Company has received declaration from all the Independent Directors of the Company under Section 149(7) o f the Act, co nfirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
The details of familiarization programme for Independent Directors are available on Company''s website at the following web link:
(https://www.dcmshriram.com/sites/default/files/Details %20of%20Fa mili
arization%20Programme%20for%20Independent%20Directors%202017-
18.pdf)
Manner & Criteria of formal annual evaluation of Board''s performance and that of its Committees and Individual Directors
In compliance with requirements of the Act and SEBI (Listing Obligations & Disclosu re Requi re ments) Regulations, 2015, the formal annual performance evaluation of the Board, its Committees and Individual Directors has been conducted as under:
A. Manner of evaluation as recommended to the Board by the
Nomination, Remuneration and Compensation Committee
("NRCC")
1. The Chairman of the Board consulted each Director separately about the performance of Board, Committees and other Directors and sought inputs in relation to the above. The Chairman then collated all the inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman and Vice Chairman of the Board, the Chairman of NRCC collated the inputs from Directors about their performance as Chairman /Vice Chairman and Director of the Board and/or the member of the Board Committees and shared the same with the Board.
The Board as a whole discussed the inputs on performance of Board/Committees/Individual Directors and performed the evaluation, 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 as follows:
(I) Board as a whole |
* Structure of Board including Composition/Diversity/ ⢠Fulfillment of functions of the Board (for instance guiding corporate strategy, risk policy, business plans, corporate performance, m onitoring 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 qu a lity/ quantity/timing of circulation of agenda for Board Meetings, approval process/recording of minutes and ⢠Professional Development and Training of Board of Directors as required. |
(II) Board Committees |
* Composition of Committee * Fulfillment of functions of the Committee with * 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 ⢠In case of the concerned director being Independent Director, Executive Director, Chairperson of the Board or Chairperson or member of the Committees, with ⢠Board and/or Committee meetings attended; and ⢠General meetings attended. |
Particulars of Employees
The details required under Section 197(12) of the Act re ad with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, in respect of Employees of the Company, are given in Annexure-4 of this Board s Report.
However, in terms of Section 136(1) of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the Statement of Particulars of Employees as required under Rule 5(2) o f the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended. The said statement is available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting.
Composition of Board Audit Committee
As on the date of this report, the Board Audit Committee comprises of 4 Non-Executive Independent D irectors, viz., Mr. Pradeep Dinodia as Chairman and Ms. Ramni Nirula, Mr. Sunil Kant Munjal & Mr. Pravesh Sharma as Members.
Extract of Annual Return
The Extract of Annual Return of the Company as on 31.3.2018 in Form MGT-9 is attached as Annexure-5 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, foreign exchange earnings and outgo are given in Annexure-6 of this Board s Report.
Secretarial Audit Report
The Board appointed M/s. Sanjay Grover & Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2017-18. The Secretarial Audit Rep ort for the financial year ended 31â March, 2018 is attached as Annexure-7 to this Board s Report. The Secretarial Audit Report does not contain any qualification or reservation or adverse remark or disclaimer.
Secretarial Standard
The Company is in Compliance with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
Unclaimed Shares Suspense Account
In terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 , the Company reports the following details in respect of equity shares lying in the unclaimed shares suspense account.
Balance as on 1.4.2017 |
No. of Members the Company for Suspense Account |
from |
Balance as on 31.3.2018 |
||
No. of |
No. of |
No. of |
No. of |
No. of |
No. of |
holders |
shares |
holders |
shares |
holders |
shares |
4515 |
664970 |
18 |
16650 |
4497 |
648320 |
The voting rights on the shares in the suspense account as on 31â March, 2018 will remai n frozen unless the rightful owners of such shares claim the
Corporate Governance
The Company is committed to adhere to best corporate governance practices. The separate sections on Management Discussion and
Analysis, Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Li sting Obligations & Disclosure Requirements) Regulations, 2015 , forms part of the Annual Report.
Statutory Auditors
Pursuant to Section 139 of the Companies Act, 2013 (the Act), appointment of the Statutory Auditors M/s. Price Waterhouse Chartered
Accountants LLP (FRN No.012754N/N500016) was made by the Members in their Annual General Meeting (AGM) held on 1.8.2017 for a period of five years i.e. from the conclus ion of 28- AGM till the consuls ion of 33â AGM.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
Directors'' Responsibility Statement Your Directors state that!
a) in preparation of annual accounts for the year ended 31â March, 2018, the applicable accounting standards have been followed and there are no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31â March, 2018 a nd of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls as followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with its workers in all its Divisions, which enabled it to achieve this performance level on all fronts.
Acknowledgements
The Directors wish to thank Customers, the Government Authorities, Financial Institutions, Bankers, Other Business Associates and Members for the co-operation and encouragement extended to the Company. The Directors also place on record their deep appreciation for the contribution made by the employees at all levels.
On behalf of the Board
New Delhi AJAY S. SHRIRAM
24.4. 2018 Chairman & Senior Managing Director
DIN:00027137
Mar 31, 2017
The Directors have pleasure in presenting the 28th Annual Report of the Company along with Audited Financial Statements, both standalone and consolidated, for the year ended 31st March, 2017.
Financial Highlights
The results for the year ended 31.3.2017 and 31.3.2016 are as under:
(Rs. in crores)
Particulars |
Standalone |
Consolidated |
||
31.03.2017 |
31.03.2016 |
31.03.2017 |
31.03.2016 |
|
Total revenue from operations |
6,060.94 |
5,984.91 |
6,117.19 |
6,030.23 |
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 : Provision for impairment of investment in foreign subsidiaries (Bioseed business) |
85.12 |
|||
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 - After exceptional item |
37.06 32.14 |
21.73 21.73 |
33.97 33.97 |
18.58 18.58 |
Retained earnings- opening balance |
2,070.22 |
1,773.08 |
1,979.03 |
1,733.26 |
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 |
2,472.36 |
2,070.22 |
2,410.92 |
1,979.03 |
State of Companyâs Affairs/Performance
The Company recorded a healthy financial performance in FY17 driven by Sugar and Chemicals Business. Other businesses witnessed stable performance.
The Companyâs total revenues from operations stood at Rs. 6,117 Crores in FY17 vs. Rs. 6,030 Crores last year. This was despite suspension of trading in imported bulk fertilisers (DAP/MOP) for FY17, which had a revenue of Rs. 688 Crores in FY16. Excluding this, the revenue increased by about 14.6% over last year.
EBITDA for FY17 stood at Rs. 817.9 Crores, a significant improvement from Rs. 545.6 Crores recorded last year. This improvement was lead by better volumes and margins in Sugar business and higher volumes in Chemicals business. Other businesses except Shriram Farm Solutions also recorded improvement in earnings.
Our Agri-input businesses of Shriram Farm Solutions and Bioseed were impacted by lower demand and change in sowing patterns towards lower value inputs, a result of two consecutive years of poor and erratic monsoons leading to weak farmer economics. Overall EBIDTA margins improved to 13% from 9% last year.
In the Standalone accounts (no impact on Consolidated financials), the Company has taken a write-down of Rs. 85.12 Crores in the value of investments in Bioseed International Business, keeping in view the longer gestation period and higher losses over last 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 stood at 0.37x vs 0.51x last year.
The Company completed capacity expansion projects for Chlor-Alkali (incl. captive power) 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 of the Company.
During the year, the Company has announced new capital expenditure projects at an investment of ~ Rs. 300 Crores aimed at setting up a Distillery in Sugar Business to manufacture ethanol, Increase Chemicals capacity at Kota and to increase the fabrication capacity at Fenesta Business. These projects are expected to be completed by Q4 FY18 and will start adding to Companyâs growth from FY19 onwards.
Dividend
Your Directors are pleased to recommend a final dividend @ 40% i.e. Rs. 0.80/- per equity share of Rs. 2/- each for the year ended 31.3.2017, which if declared by the Shareholders, 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 and Disclosure Requirements) Regulations, 2015, Dividend Distribution Policy of the Company is attached 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, 27.10.2016and 13.2.2017.
Subsidiary/Associate/Joint Venture Companies
During the year, a subsidiary of the Company namely Hariyali Services Limited was struck off from the Register of Companies w.e.f. 15th November, 2016.
Report on Performance and Financial Position of Subsidiaries, Associate and Joint Ventures Company
The details regarding the performance and financial position of Companyâs Subsidiaries, Associate and Joint Ventures are given in Annexure - 2 of this Boardâs Report.
Risk Management Framework
The Company has in place a Risk Management Framework, which was approved by the Board on 28.1.2006 and was implemented w.e.f. 2.1.2007. The said framework includes risk identification, assessment, response and monitoring system for mitigation of risk.
Companyâs Policy on Directorsâ Appointment and Remuneration The criteria for Directorsâ appointment has been set up by the Nomination,
Remuneration and Compensation Committee, which includes criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Sub-section (3) of Section 178 of Companies Act, 2013 (âthe Actâ). The Remuneration Policy is attached as Annexure - 3 to this Boardâs Report.
Corporate Social Responsibility
The details about the Policy on Corporate Social Responsibility (CSR) including programmes/activities undertaken on CSR, Annual Report on CSR activities and the composition of CSR Committee are provided in a separate section, which forms part of this Boardâs Report.
Business Responsibility Report
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report (BRR) forms part of this Annual Report. The report, inter-alia, describes the initiatives taken by the Company from environmental, social and governance perspective.
Vigil Mechanism
The Company has established a Vigil Mechanism/Whistle Blower Policy as per the requirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013. The same is also available on Companyâs website at the following web link: (http://dcmshriram.com/sites/default/files/vigil-mechanism.pdf)
Related Party Transactions
The Company has formulated a Policy on dealing with Related Party transactions, which is also available on Companyâs website at the following web link:
(http://dcmshriram.com/sites/default/files/Related%20Party%20Trnsaction%20%20-%20Final%20%28BM-12.11.2014%29.pdf)
Particulars of contracts or arrangements entered into with related parties as referred to 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 âMaterialâ Subsidiaries, which is also available on Companyâs website at the following web link:
(http://dcmshriram.com/sites/default/files/MATERIAL%20SUBSIDIARY%20PQUCY%20-%20FINAL.pdf)
Particulars of Loans, Guarantees or Investments
The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act and relevant rules thereunder are given in the notes to Financial Statements.
Fixed Deposits
1. The details relating to deposits, covered under Chapter V of the Act:
a) accepted during the year: Rs. 88,70,000/-
b) remained unpaid or unclaimed as at the end of the year : Rs. 1,45,873/
c) there has been no default in repayment of deposits or payment of interest thereon during the financial year ended on 31st March, 2017.
2. There are no deposits, which are in non-compliance with the requirements of Chapter V of the Act.
Details in respect of adequacy of Internal Financial Control with respect to Financial Statements
The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation in such controls 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 aligned in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014. DCM Shriram ESPS provides for grants of equity shares through Trust, purchased from Secondary Market, to the eligible Employees as may be decided by the Nomination, Remuneration and Compensation Committee from time to time. DCM Shriram ESPS is a secondary market scheme and hence no fresh issue of shares was made. There are no voting rights exercised on the shares held by the Trust. Further, there are no material changes in the DCM Shriram ESPS and it is in compliance with the applicable regulations. The details required as per SEBI (Share Based Employee Benefits) Regulations, 2014 is available at the following web link of the Company: (http://www.dcmshriram.com/DCM-Shriram-ESPS-Report)
Directors and Key Managerial Personnel (KMP)
Mr. Ajit S. Shriram and Dr. N.J. Singh, Directors retire by rotation, and being eligible, offer themselves for re-appointment.
During the year, Justice (Retd.) Vikramajit Sen and Mr. Pravesh Sharma were appointed as 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 in the ensuing Annual General Meeting (AGM).
Dr. S.S. Baijal, Mr. Arun Bharat Ram and Mr. D. Sengupta ceased to be Independent Directors of the Company on completion of their tenure on 9.8.2016.
The Company has received declaration from all the Independent Directors of the Company under Section 149(7) of the Act, confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
The details of familiarization programme for Independent Directors are available on Companyâs website at the following web link: (http://dcmshriram.com/sites/default/files/Details%20of%20 Familiarization%20 Programme%20for%20Independent%20Directors%202016-17.pdf) Manner & Criteria of formal annual evaluation of Boardâs performance and that of its Committees and Individual Directors In compliance with requirements of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the formal annual performance evaluation of the Board, its Committees and Individual Directors has been conducted as under:
A. Manner of evaluation as recommended to the Board by the Nomination, Remuneration and Compensation Committee (âNRCCâ)
1. The Chairman of the Board consulted each Director separately about the performance of Board, Committees and other Directors and sought inputs in relation to the above. The Chairman then collated all the inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman of the Board, the Chairman of the NRCC collated the inputs from Directors about Chairmanâs performance as a Chairman/Director of the Board and/or Chairman or the Member of the Board Committees and shared the same with the Board.
The Board as a whole discussed the inputs on performance of Board/Committees/Individual Directors and performed the evaluation, 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 as follows:
Performance of |
Evaluation Criteria |
(I) Board as a whole |
- Structure of Board including Composition/Diversity/ Process of appointment /qualifications/experience, etc; - Fulfillment of functions of the Board (for instance guiding corporate strategy, risk policy, business plans, corporate performance, monitoring Companyâs 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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, in respect of Employees of the Company, are given in Annexure - 5 of this Boardâs Report.
However, in terms of Section 136 (1) of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the Statement of Particulars of Employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended. The said statement is available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting.
Composition of Board Audit Committee
As on the date of this report, the Board Audit Committee comprised of 4 Non - Executive Independent 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 is attached as Annexure - 6 to this Boardâs Report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under the Companies (Account) Rules, 2014 are given in Annexure - 7 of this Boardâs Report.
Secretarial Audit Report
The Board appointed M/s. Sanjay Grover & Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended 31st March, 2017 is attached as Annexure - 8 to this Boardâs Report. The Secretarial Audit Report does not contain any qualification or reservation or adverse remark or disclaimer.
Unclaimed Shares Suspense Account
In terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company reports the following details in respect of equity shares lying in the suspense 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 |
No. of |
No. of |
No. of |
No. of |
No. of |
holders |
shares |
holders |
shares |
holders |
shares |
4525 |
667380 |
10* |
2410 |
4515 |
664970 |
* Approached -12; Pending -2.
The voting rights on the shares in the suspense account as on 31st March, 2017 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 separate sections on Management Discussion and Analysis, Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance 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 Statutory Auditors of the Company in the last Annual General Meeting of the Company held on 9.8.2016 to hold office till the conclusion of the ensuing Annual General Meeting. Pursuant to the provisions of the Companies Act, 2013, the term of M/s. Deloitte Haskins & Sells shall be completed at the conclusion of ensuing AGM and they are not eligible for re-appointment.
The Board has recommended for the approval of shareholders, the appointment of Price Waterhouse Chartered Accountants LLP, (FRN 012754N/N500016) as Statutory Auditors of the Company at the ensuing AGM for a term from the conclusion of ensuing AGM of the Company till the conclusion of 33âd AGM, subject to ratification at every AGM of the Company.
Cost Auditors
The Board appointed M/s. Bahadur Murao &Co., Cost Accountants, New Delhi (FRN 000008) and M/s. J. P Sarda & Associates, Cost Accountants, Kota (FRN 000289) as Cost Auditors for the financial year 2017-18 to audit the cost accounting records of the Company Directorsâ Responsibility Statement Your Directors state that:
a) in preparation of annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed and there are no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls as followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively
Industrial Relations
The Company continued to maintain harmonious and cordial relations with its workers in all its Divisions, which enabled it to achieve this performance level on all fronts.
Acknowledgements
The Directors wish to thank Customers, the Government Authorities, Financial Institutions, Bankers, Other Business Associates and Members for the co-operation and encouragement extended to the Company. The Directors also place on record their deep appreciation for the contribution made by the employees at all levels.
On behalf of the Board
New Delhi AJAYS. SHRIRAM
May 01,2017 Chairman &Sr. Managing Director
DIN:00027137
Mar 31, 2016
The Directors have pleasure in presenting the 27th Annual Report of the
Company along with Audited Financial Statements, both standalone and
consolidated, for the year ended 31st March, 2016.
Financial Highlights
The results for the year ended 31.3.2016 and 31.3.201 5 are as under:
(Rs. in Crores)
Particulars Standalone Consolidated
31.3.2016 31.3.2015 31.3.2016 31.3.2015
Total revenue 5,787.51 5,556.73 5,879.78 5,690.76
Profit before 591.95 473.39 543.60 450.31
depreciation, finance
cost and tax
Depreciation 94.90 107.00 98.64 110.20
Finance cost 85.15 109.30 85.83 111.75
Profit before tax 411.90 257.09 359.13 228.36
Provision for taxation 61.64 15.16 61.91 17.56
Profit after tax 350.26 241.93 297.22 210.80
Balance brought 951.34 762.48 878.67 721.71
forward from previous
year
A. Net profit available 1,301.60 993.49 1,175.89 920.82
for appropriation
Appropriations
- Proposed dividends 51.97 35.73 51.97 35.73
on equity shares
(including Interim
dividends)
- Corporate dividend 10.59 6.29 10.59 6.29
tax
- Storage fund for 0.17 0.13 0.17 0.13
molasses account
- General reserve - - - -
B. Total Appropriations 62.73 42.15 62.73 42.15
C. Balance carried 1,238.87 951.34 1,113.16 878.67
forward (C = A - B)
State of Company''s Affairs/Performance
The Company reported improved financial performance in FY 16 on account
of improvement in sugar business'' operating environment and robust
performance of the chemicals business.
The Company''s total revenues stood at Rs.5,880 Crores in FY 16 vs.
Rs.5,691 Crores last year.
FY 16 EBITDA improved significantly to Rs.544 Crores from Rs.450 Crores
last year. Improvement in earnings during the year was primarily due to
profits in sugar business vs. losses last year, which was a result of
better recoveries, cash cane subsidy for SS 2014-15 that was received
and accounted this year and lower inventory write downs vs. last year.
Earnings growth in Chemicals business improved on better realizations
and overall control on inputs costs.
Fenesta Business showed improvement in earnings as higher volumes led
to the business turning PBT positive for the year.
Performance of the Company''s Agri-input businesses - Shriram Farm
Solutions and Bioseed, was impacted by the challenging domestic Agri
scenario that led to lower volumes and margins during the year.
Fertilizer business'' earnings during the year declined due to the
tightening in energy norms under the New Urea Policy, which came into
effect from 1st June, 2015.
The Company''s finance costs for the year stood lower at Rs.86 Crores
vs. Rs. 112 Crores last year. Net Debt increased to Rs. 1,057 Crores
vs. Rs.688 Crores last year. The increase in Net Debt was due to the
ongoing expansion in Chlor Alkali and Sugar businesses and higher sugar
inventory and subsidy receivables.
Net Profit for FY 16 was up by 41 % to Rs.297 Crores from Rs.211 Crores
in FY 15.
The Company''s expansion projects in Chemicals and Sugar businesses are
proceeding as per plan with full commissioning expected by
September/October, 2016. In Q1 FY 17, a part of the new additional
capacity at Bharuch plant was commissioned. These expansion projects
would start contributing to the Company''s growth from the second half
of FY 17.
Sustained healthy performance by the Company led to upgrade in Q4 FY 1
6 in Long Term credit ratings to [ICRA] ''AA-'' from earlier [ICRA] ''A
''. Company''s Short Term rating was affirmed at [ICRA] ''A1 ''.
Dividend
Your Directors are pleased to recommend a final dividend @ 40% i.e.
Re.0.80 per equity share of Rs.2/- each for the year ended 31.3.2016.
The total dividend for the financial year 2015-16 aggregates to 160%
i.e. Rs.3.20 per equity share of Rs.2/- each (including two interim
dividends @ 60%, i.e. Rs. 1.20 per equity share each paid in November,
2015 and February, 2016 respectively).
Number of Meetings of the Board
The Board met 5 times during the financial year on 1.5.2015, 2.8.2015,
2.11.2015, 2.2.2016 and 5.2.2016.
Subsidiary/Associate/Joint Venture Companies
Details of Companies, which has become or ceased to be
Subsidiary/Associate/Joint Venture (JV) during the year, are as
follows:
The Scheme of Amalgamation of Shriram Bioseeds Limited, Mauritius
(SBLM) into Bioseeds Limited, Mauritius (BLM) was approved by the
Hon''ble Supreme Court of Mauritius vide its Order dated 25th May, 2015.
Consequently, SBLM merged into BLM w.e.f. 22nd April, 2015.
Hariyali Services Limited, a wholly owned subsidiary of the Company,
has made an application to the Registrar of Companies, NCT of Delhi and
Haryana for striking off its name which is under process.
Report on Performance and Financial Position of Subsidiaries, Associate
and JV Company
The details regarding the performance and financial position of
Company''s Subsidiaries, Associate and JV are given in Annexure - 1 of
this Board''s Report.
Risk Management Framework
The Company has in place a Risk Management Framework, which was
approved by the Board on 28.1.2006 and was implemented w.e.f. 2.1.2007.
The said framework includes risk identification, 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 determining qualifications, positive attributes,
independence of a Director and other matters provided under Sub-
section (3) of Section 178 of Companies Act, 2013 ("the Act"). The
Remuneration Policy is attached as Annexure - 2 to this Board''s Report.
Corporate Social Responsibility
The details about the Policy on Corporate Social Responsibility (CSR)
including programmes/activities undertaken on CSR, Annual Report on CSR
activities and the composition of CSR Committee are provided in a
separate section, which forms part of this Board''s Report.
Vigil Mechanism
The Company has established a Vigil Mechanism for Directors and
Employees of the Company to Report genuine concerns including unethical
behavior, actual or suspected frauds or violation of Company''s code of
conduct or ethics etc.
The Mechanism also provides for adequate safeguards against
victimization of Director(s)/Employee(s) who avail of the Mechanism and
also provides for direct access to the Chairman of the Audit Committee
in exceptional cases.
The Vigil Mechanism is also available on Company''s website at the
following web link:
(http://dcmshriram.com/sites/default/files/vigil- mechanism.pdf)
Related Party Transactions
The Company has formulated a policy on dealing with related party
transactions, which is also available on Company''s website at the
following web link:
(http://dcmshriram. com/sites/default/files/related- party-
transaction-policy.pdf)
During the year, there were no contracts or arrangements entered into
with related parties as referred to in Section 188(1) of the Act, the
particulars of which are required to be disclosed in Form AOC-2.
Material Subsidiary Policy
The Company has formulated a policy for determining ''Material''
Subsidiaries, which is also available on Company''s website at the
following web link:
(http://dcmshriram.com/sites/default/files/material-
subsidiary-policy.pdf)
Particulars of Loans, Guarantees or investments
The details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act and relevant rules thereunder, are
given in the notes to Financial Statements.
Fixed Deposits
1. The details relating to deposits, covered under Chapter V of the
Act:
a) accepted during the year : Rs. 16,64,24,033/-
b) remained unclaimed as at the end of the year: Rs. 10,52,372/-
c) there has been no default in repayment of deposits or payment of
interest thereon during the financial year ended on 31st March, 2016.
2. There are no deposits, which are in non-compliance with the
requirements of Chapter V of the Act.
Details in respect of adequacy of Internal Financial Control with
respect to Financial Statements
The Company has in place adequate Internal Financial Controls with
respect to financial statements. No material weakness in the design or
operation in such controls 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 aligned in accordance with SEBI (Share Based Employee
Benefits) Regulations, 2014. DCM Shriram ESPS provides for grants of
equity shares through Trust, purchased from Secondary Market, to the
eligible Employees as may be decided by the Nomination, Remuneration
and Compensation Committee from time to time. DCM Shriram ESPS is a
secondary market scheme and hence no fresh issue of shares was made.
There are no voting rights exercised on the shares held by the Trust.
Further, there are no material changes in the DCM Shriram ESPS and it
is in compliance with the applicable regulations. The details required
as per SEBI (Share Based Employee Benefits) Regulations, 2014 is
available at the following web link of the Company:
(http://www.dcmshriram.com/DCM-Shriram-ESPS- Report)
Directors and Key Managerial Personnel (KMP)
Shri K.K. Kaul and Shri Sharad Shrivastva, Directors retire by
rotation, and being eligible, offer themselves for re-appointment.
Shri Sameet Gambhir was appointed as Company Secretary and KMP of the
Company w.e.f. 1.4.201 5.
The Company has received declaration from all the Independent Directors
of the Company under Section 149(7) of the Act, confirming that they
meet the criteria of independence as prescribed under Section 149(6) of
the Act and SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015.
The details of familiarization programme for Independent Directors are
available on Company''s website at the following web link:
(http://dcmshriram.com/sites/default/files/
familiarisation-programme-re-independent-directors. Pdf)
Manner & Criteria of formal annual evaluation of Board''s performance
and that of its Committees and Individual Directors
In compliance with requirements of the Act and SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015, the formal
annual performance evaluation of the Board, its Committees and
Individual Directors has been conducted as under:
A. Manner of evaluation as recommended to the Board by the Nomination,
Remuneration and Compensation Committee ("NRCC")
1. The Chairman of the Board consulted each Director separately about
the performance of Board, Committees and other Directors and sought
inputs in relation to the above. The Chairman then collated all the
inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman of the Board, the Chairman
of the NRCC collated the inputs from Directors about Chairman''s
performance as a Director of the Board and/ or Chairman or the Member
of the Board Committees and shared the same with the Board.
The Board as a whole discussed the inputs on performance of
Board/Committees/Individual Directors and performed the evaluation,
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 as follows:
Performance of Evaluation Criteria
(i) Board as a - Fulfillment of functions of the whole Board (for
instance guiding corporate strategy, risk
policy, business plans, corporate performance,
monitoring Company''s governance practices etc.,
as per the Act and SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015,
- Number of Board Meetings held during the year.
(ii) Board - Fulfillment of functions of the Committees
Committee with reference to its terms of
reference, the Act and SEBI (Listing
Obligations & Disclosure Requirements)
Regulations, 2015,
- Number of Committee Meetings held during the
year.
(iii) Individual - Fulfillment of responsibilities as a Directors
Director as per the Act, the SEBI
(Listing Obligations & Disclosure Requirements)
Regulations, 2015, and applicable Company
policies and practices,
- In case of the concerned Director being
Independent Director, Executive Director,
Chairperson of the Board or Chairperson or
Member of the Committees, with reference to
such status and role,
- Board and/or Committee meetings attended,
* General Meetings attended.
Particulars of Employees
The details required under Section 197(12) of the Act read with Rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, in respect of Employees of the Company, are
given in Annexure - 3 of this Board''s Report.
However, in terms of Section 136(1) of the Act, this Report and
Financial Statements are being sent to the Members and others entitled
thereto, excluding the Statement of Particulars of Employees as
required under Rule 5(2) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014.
The said statement is available for inspection by the Members at the
Registered Office of the Company during business hours on working days
up to the date of the ensuing Annual General Meeting. If any Member is
interested in obtaining a copy thereof, the same is made available to
him on receiving a request.
Composition of Audit Committee
As on the date of this report, the Audit Committee comprised of 4
Independent-Non-Executive Directors, viz.. Dr. S.S. Baijal as Chairman,
and Shri Arun Bharat Ram, Shri Pradeep Dinodia and Shri D. Sengupta as
Members.
Extract of Annual Return
The Extract of Annual Return of the Company as on 31.3.2016 in Form
MGT-9 is attached as Annexure - 4 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, foreign exchange earnings and outgo are given in Annexure -
5 of this Board''s Report.
Secretarial Audit Report
The Board appointed M/s. Sanjay Grover & Associates, Company
Secretaries, to conduct the Secretarial Audit for the financial year
2015-16. The Secretarial Audit Report for the financial year ended 31st
March, 2016 is attached as Annexure - 6 to this Board''s Report. The
Secretarial Audit Report does not contain any qualification or
reservation or adverse remark or disclaimer.
Unclaimed Shares Suspense Account
In terms of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, the Company reports the following details in respect
of equity shares lying in the suspense account, which were issued in
physical form:
Balance as on No. of Members Balance as on
1.4.2015 who approached the 31.3.2016
Company for transfer
of shares and shares
transferred from
Suspense Account
during the year
No. of No. of No. of No. of No. of No. of
holders shares holders Shares Holders Shares
4,542 6,70,790 17 3,410 4,525 6,67,380
The voting rights on the shares in the suspense account as on 31st
March, 2016 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 separate sections on Management Discussion and Analysis,
Corporate Governance and a Certificate from the Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, forms part of the Annual Report.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, shall retire at
the forthcoming Annual General Meeting and are eligible for
re-appointment.
Cost Auditors
The Company appointed M/s. Bahadur Murao & Co., Cost Accountants, New
Delhi as Cost Auditors for the financial year 2016-17 to audit the cost
accounting records of its products namely. Fertilisers, Chemicals,
Cement, PVC, UPVC Articles, and of Power Plants (if applicable) at SFC
Kota and SAC Jhagadia.
The Company also appointed M/s. J.P. Sarda & Associates, Cost
Accountants, Kota as Cost Auditors for the financial year 2016-17 to
Audit its cost accounting records of its DSCL Sugar units including
Power selling plants.
Shifting of Registered Office of the Company
The Registered office of the Company has been shifted to 1st Floor,
Kanchenjunga Building, 18, Barakhamba Road, New Delhi - 110001 from 5th
Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi - 110001
w.e.f. 2.2.2016.
Directors'' Responsibility Statement
Your Directors state that:
a) in preparation of annual accounts for the year ended 31st March,
2016, the applicable accounting standards have been followed and there
are no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2016 and of the profit of the Company for
that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls as followed by the
Company and that such internal financial controls are adequate and are
operating effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate
and operating effectively.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank Customers, the Government Authorities,
Financial Institutions, Bankers, Other Business Associates and Members
for the co-operation and encouragement extended to the Company. The
Directors also place on record their deep appreciation for the
contribution made by the employees at all levels.
On behalf of the Board
New Delhi AJAY S. SHRIRAM
10 May, 2016 Chairman & Sr. Managing Director
DIN : 00027137
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 26th Annual Report of the
Company along with Audited Accounts for the year ended 31st March,
2015.
Financial Highlights
The results for the year ended 31.3.2015 and 31.3.2014 are as under:
(Rs. in crores)
Particulars Standalone Consolidated
31.3.2015 31.3.2014 31.3.2015 31.3.2014
Total revenue 5,556.73 6,133.01 5,690.76 6,231.97
Profit before 473.39 587.34 450.31 558.91
depreciation, finance cost
and tax
Depreciation 107.00 134.13 110.20 137.89
Finance cost 109.30 145.88 111.75 148.58
Profit before tax 257.09 307.33 228.36 272.44
Provision for taxation 15.16 32.67 17.56 30.06
Profit after tax 241.93 274.66 210.80 242.38
Balance brought 762.48 539.35 721.71 592.79
forward from previous year
Net profit available for 993.49 875.94 920.82 835.17
appropriation
Appropriations
- Proposed 35.73 32.76 35.73 32.76
dividends on
equity shares (Incl.
Interim dividend)
- Corporate 6.29 5.57 6.29 5.57
dividend tax
- Storage fund 0.13 0.13 0.13 0.13
for molasses
account
- General reserve - 75.00 - 75.00
Balance carried 951.34 762.48 878.67 721.71
forward
State of Company''s Affairs/Performance
The Company recorded a satisfactory performance despite challenging
second half of the year, which witnessed a sharp fall in realizations
of almost all its products in line with global trends.
The Company''s total revenues during the year declined by 8.7% to Rs.
5,691 Crores due to lower sales volumes of bulk Fertilisers and Sugar.
EBITDA in FY 15 stood at Rs.450 Crores vs. Rs.559 Crores last year.
This decline in the Company''s EBITDA was primarily on account of lower
earnings of the Company''s Sugar and Chloro-Vinyl businesses. The Sugar
business'' earnings was due to the steep fall in sugar realizations from
September, 2014 onwards. The Company had to write down the sugar
inventory by Rs.98 Crores in line with the prevailing prices. Sharp
fall in realizations of Company''s Chloro-Vinyl products and rise in key
input costs in second half of the year led to lower earnings during the
year.
The impact of lower earnings in Sugar and Chloro-Vinyl businesses was
partly moderated by improvement in earnings of Bioseed, Fertiliser and
Farm Solutions businesses. Earnings of the Company''s Bioseed business
were boosted by strong domestic operations and lower losses in
International business during the year. The Fertiliser and Farm
Solutions business'' earnings were positively impacted by increase in
reimbursement of conversion costs and higher margins in bulk
Fertilisers, respectively. The Fenesta business achieved operating
breakeven for the full year.
The Company''s finance costs for the year stood lower at Rs.112 Crores
vs. Rs.149 Crores last year. Net Debt stood at Rs.688 Crores vs. Rs.683
Crores last year.
Net Profit for FY 15 stood at Rs.211 Crores as compared to Rs.242
Crores in the previous period.
During the year, the Company announced capex projects totaling Rs.659
Crores aimed at expanding Chlor-Alkali capacity at the Bharuch plant
and for expansion and upgradation of Co-gen power capacity in the Sugar
business. These projects are expected to contribute to the Company''s
growth from the second half of FY 17.
Dividend
Your Directors are pleased to recommend dividend @ 20% i.e. Re.0.40 per
equity share of Rs.2/- each for the year ended 31.3.2015. The total
dividend for the financial year 2014-15 aggregate to 110% i.e. Rs.2.20
per equity share of Rs.2/- each (including interim dividend @ 90% i.e.
Rs. 1.80 per equity share of Rs. 2/- each paid in August, 2014).
Number of meetings of the Board
The Board met 8 times during the financial year on 28.4.2014,
15.5.2014, 2.7.2014, 29.7.2014, 12.8.2014, 4.10.2014, 12.11.2014 and
3.2.2015.
Subsidiary/Associate/Joint Venture Companies
Details of Companies, which have become or ceased to be
Subsidiaries/Associate/Joint Venture (JV) during the year:
- DCM Shriram Thermal Energy Limited, DCM Shriram Hydro Energy Limited,
DCM Shriram Energy & Infrastructure Limited and Hariyali
India Limited were struck off from the Register of Companies as these
were not carrying on any business activities;
- Zeus Investments Limited, Mauritius an overseas subsidiary Company
was Voluntarily Liquidated and dissolved on 21.7.2014 as published in
the Government Gazette of Mauritius;
- Consequent to the Joint Venture Agreement entered with M/s. Axiall,
LLC (subsidiary of Axiall Corporation, USA), Shriram Axiall Private
Limited became a 50:50 JV Company between Axiall, LLC and the Company
w.e.f. 10.4.2014.
Report on Performance and financial position of Subsidiaries, Associate
and JV Company
The details regarding the performance and financial position of
Company''s Subsidiaries, Associates and JV are given in Annexure - 1 of
this Board''s Report.
Risk Management Framework
The Company has in place a Risk Management Framework, which was
approved by the Board on 28.1.2006 and was implemented w.e.f. 2.1.2007.
The said framework includes risk identification, assessment, response
and monitoring system for mitigation of risk.
Company''s Policy on Directors'' Appointment & Remuneration
The criteria for Directors'' appointment is set up by Nomination,
Remuneration and Compensation Committee, which includes criteria for
determining qualifications, positive attributes, independence of a
Director and other matters provided under Sub- section (3) of Section
178 of Companies Act, 2013 ("the Act"). The Remuneration Policy is
attached as Annexure - 2 of this Board''s Report.
Corporate Social Responsibility
The details about the Policy on Corporate Social Responsibility (CSR)
including initiatives taken on CSR, annual report on CSR activities and
the composition of CSR Committee are provided in a separate section,
which forms part of this Board''s Report.
Vigil Mechanism
The Company has established a vigil mechanism for Directors and
employees of the Company to Report genuine concerns including unethical
behavior, actual or suspected, frauds or violation of Company''s code of
conduct or ethics etc.
The mechanism also provides for adequate safeguards against
victimization of Director(s)/ Employee(s) who avail of the mechanism
and also provides for direct access to the Chairman of the Audit
Committee in exceptional cases.
The Vigil Mechanism is also available on Company''s website at the
following web link:
(http://dcmshriram.com/images/downloads/company-
policies/vigil-mechanism.pdf)
Related Party Transactions
The Company has formulated a policy on dealing with related party
transactions, which is also available on Company''s website at the
following web link:
(http://dcmshriram.com/images/downloads/company-
policies/related-party-transaction-policy.pdf)
There are no contracts or arrangements with related parties under
Section 188(1) of the Act, the particulars of which are required to be
disclosed as per Section 134(3)(h) of the Act.
Material Subsidiary Policy
The Company has formulated a policy for determining ''Material''
Subsidiaries, which is also available on Company''s website at the
following web link:
(http://dcmshriram.com/images/downloads/company-
policies/material-subsidiary-policy.pdf)
Particulars of Loans, Guarantees or investments
The details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act are given in the notes to
Financial Statements.
Fixed Deposits
1. The details relating to deposits, covered under Chapter V of the
Act:
a) accepted during the year : Rs. 13,59,54,972/-
b) remained unclaimed as at the end of the year: Rs.1,31,874/-
c) there has been no default in repayment of deposits or payment of
interest thereon during the financial year ended on 31st March, 2015.
2. There are no deposits, which are in non-compliance with the
requirements of Chapter V of the Act.
Details in respect of adequacy of Internal Financial Control with
respect to Financial Statements
The Company has in place adequate Internal Financial Controls with
respect to financial statements. No material weakness in the design or
operation in such controls 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 Shareholders, vide Special Resolution passed on August
13, 2013 and aligned in accordance with SEBI (Shares Based Employee
Benefits) Regulations, 2014. The ESPS Scheme provides for grants of
equity shares through Trust, purchased from Secondary Market, to the
Eligible Employees as may be decided by Compensation Committee from
time to time. The Scheme is a secondary market scheme and no fresh
issue of shares is made. There are no voting rights exercised on the
shares held by the Trust.
Accordingly, the applicable disclosure as on 31st March, 2015 is as
follows:
Directors and Key Managerial Personnel
Shri K.K. Kaul, Whole Time Director and Shri Sharad Shrivastva (LIC
Nominee), were appointed the Additional Directors w.e.f. 2.7.2014 and
as Directors in the Annual General Meeting of the Company held on
12.8.2014.
Smt. Ramni Nirula was appointed an Additional Director of the Company
in the category of Independent Director, w.e.f. 3.2.2015, whose
appointment is being placed before the Shareholders in the ensuing
Annual General Meeting.
Shri Ajit S. Shriram, Director retires by rotation, and being eligible,
offers himself for re-appointment.
Shri Ajay S. Shriram, Chairman & Sr. Managing Director, Chief Executive
Officer, Shri J.K. Jain, Chief Financial Officer and Shri B.L.
Sachdeva, Company Secretary, were appointed as Key Managerial Personnel
(KMP) of the Company on the existing terms & conditions of their
appointment.
Shri Sameet Gambhir joined as Company Secretary and KMP of the Company
w.e.f. 1.4.2015.
Shri Rajesh Kandwal (LIC Nominee) has resigned from the Company w.e.f.
11.6.2014.
Shri B.L. Sachdeva, Company Secretary and KMP retired from the services
of the Company w.e.f. 31.3.2015.
The Company has received declaration from all the Independent Directors
of the Company under Section 149(7) of the Act, confirming that they
meet the criteria of independence as prescribed under Section 149(6) of
the Act and Clause 49 of the Listing Agreement.
The details of familiarization programme for Independent Directors are
available on Company''s website at the following web link:
http://dcmshriram.com/imaqes/downloads/company-
policies/familiarisation-programme-re-independent- directors.pdf
Manner & Criteria of formal annual evaluation of Board''s performance
and that of its Committees and Individual Directors
In compliance with requirements of the Act and the Listing Agreement,
the formal annual performance evaluation of the Board, its Committees
and Individual Directors has been conducted in the following manner:
A. Manner of evaluation recommended to the Board by Nomination,
Remuneration and Compensation Committee ("NRC")
1. The Chairman of the Board consulted each Director separately about
the performance of Board, Committees and other Directors and sought
inputs in relation to the above. The Chairman then collated all the
inputs and shared the same with the Board.
2. In respect of the evaluation of Chairman of the Board, the Chairman
of NRC collated the inputs from Directors about Chairman''s performance
as a Director of the Board and/or Chairman or the Member of the Board
Committees and shared the same with the Board.
The Board as a whole discussed the inputs on performance of
Board/Committees/Individual Directors and performed the evaluation,
excluding the Director being evaluated.
B. Criteria of evaluation as approved by NRC
1. The aforesaid evaluation was conducted as per the criteria laid down
by the NRC as follows:
Particulars of Employees
The details required under Section 197(12) of the Act read with Rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, in respect of employees of the Company, are
given in Annexure - 3 of this Board''s Report.
However, in terms of Section 136(1) of the Act, the Report and Accounts
are being sent to the Members and others entitled thereto, excluding
the Statement of Particulars of Employees as required under Rule 5(2)
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014. The said statement is available for inspection by the
Members at the Registered Office of the Company during business hours
on working days up to the date of the ensuing Annual General Meeting.
If any Member is interested in obtaining a copy thereof, such Member
may write to the Company Secretary.
Composition of Audit Committee
The Audit Committee comprises of four Independent- Non-Executive
Directors, viz., Dr. S.S. Bajal as Chairman, and Shri Arun Bharat Ram,
Shri Pradeep Dinodia and Shri D. Sengupta as Members.
Extract of Annual Return
Extract of Annual Return of the Company is attached as Annexure - 4 to
this Board''s Report.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings/Outgo
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo are given in Annexure -
5 of this Board''s Report.
Secretarial Audit Report
The Board has appointed M/s. Sanjay Grover & Associates, Company
Secretaries, to conduct the Secretarial Audit for the financial year
2014-15. The Secretarial Audit Report for the financial year ended 31st
March, 2015 is attached as Annexure - 6 of this Board''s Report. The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
Unclaimed Shares Suspense Account
In terms of Clause 5A of the Listing Agreement, the Company reports the
following details in respect of equity shares lying in the suspense
accounts, which were issued in physical form:
The voting rights on the shares in the suspense accounts as on 31st
March, 2015 shall remain frozen till the rightful owners of such shares
claim the shares.
Buy-back of Shares
During the year, the Company bought back 6,51,712 equity shares of
Rs.2/- each and extinguished 7,90,274 equity shares of Rs.2/- each (out
of which 1,38,562 equity shares extinguished were bought back during
2013-14). The total equity shares bought back and extinguished during
the buyback period (i.e. 5.3.2014 to 4.9.2014) is 34,87,183 equity
shares of Rs.2/- each.
Corporate Governance
The Company is committed to adherence to best corporate governance
practices. The separate sections on Management Discussion and Analysis,
Corporate Governance and a Certificate from the Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement(s) with the Stock
Exchange(s) form part of the Annual Report.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
Cost Auditors
The Company appointed M/s. Bahadur Murao & Co., Cost Accountants, New
Delhi as Cost Auditors for the financial year 2015-16, to audit the
cost accounting records for its products namely, Fertilisers,
Chemicals, Cement, PVC and UPVC Articles.
The Company appointed M/s. J.P. Sarda & Associates, Cost Accountants,
Kota as Cost Auditors for the financial year 2015-16 for its DSCL Sugar
units including Power selling plants.
Directors'' Responsibility Statement
Your Directors state that:
a) in preparation of annual accounts for the year ended 31st March,
2015, the applicable accounting standards have been followed and there
are no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2015 and of the profit of the Company for
that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and
are operating effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate
and operating effectively.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank Customers, the Government Authorities,
Financial Institutions, Bankers, other Business Associates and
Shareholders for the co-operation and encouragement extended to the
Company. The Directors also place on record their deep appreciation for
the contribution made by the employees at all levels.
On behalf of the Board
New Delhi AJAY S. SHRIRAM
May 1, 2015 Chairman & Sr. Managing Director
DIN : 00027137
Mar 31, 2014
Dear members,
The Directors have pleasure in presenting the 25th Annual Report of the
Company along with Audited Accounts for the year ended 31st March,
2014.
Financial Highlights
The results for the year ended 31.3.2014 and 31.3.2013 are as under:
(Rs. in crores)
Particulars Standalone Consolidated
31.3.2014 31.3.2013 31.3.2014 31.3.2013
Total Revenue 6,133.01 5,446.05 6,231.97 5572.87
Profit before
depreciation, finance 587.34 554.04 558.91 574.07
cost, tax and
exceptional item
Depreciation 134.13 143.82 137.89 146.79
Finance Cost 145.88 152.65 148.58 154.83
Profit before
exceptional items 307.33 257.57 272.44 272.45
and tax
Exceptional Items - (53.58) - (53.58)
Profit/ (Loss) before 307.33 203.99 272.44 218.87
Tax
Provision for Taxation 32.67 1 3.45 30.06 15.98
Profit/(Loss) after tax 274.66 190.54 242.38 202.89
Balance brought
forward from 539.35 453.80 592.79 494.89
previous year
Net Profit available
for appropriation 875.94* 644.34 835.17 697.78
Appropriations
* Proposed
Dividends on
Equity Shares 32.76 26.54 32.76 26.54
(Incl. Interim
dividend)
* Corporate 5.57 3.32 5.57 3.32
Dividend Tax
* Storage fund for
Molasses Account 0.13 0.13 0.13 0.13
* General Reserve 75.00 75.00 75.00 75.00
* Balance Carried
Forward 762.48 539.35 721.71 592.79
* Includes Rs 61.93 Crores on account of merger of Bioseed Research
India Ltd. during the year
Performance
DCM Shriram Ltd. continued to deliver strong overall financial
performance during FY 14. The Company's Net revenues during the year
were up by 12% to Rs.6,182 Crores on account of high growth in Shriram
Farm Solutions (up 37%) and Sugar businesses (up12%).
The Company's (consolidated) earnings, EBITDA during the year stood at
Rs.559 Crores as compared to Rs.574 Crores in the previous year. PAT
stood at Rs.242 Crores vis-a-vis Rs.203 Crores in FY 13.
Earnings were led by, strong performance of Chloro- vinyl driven by
cost rationalization and firm product prices, profits of Shriram Farm
Solutions business led by growth of 'Value added input' portfolio, good
growth in domestic Bioseed operations, sharp improvement in Fenesta
business over last year on account of increased retail revenues, and
Hariyali business losses have stopped post rationalization of its
operations.
The earnings were impacted by adverse swing in margins in the Sugar
business and lower profits in the Bioseed business on account of one
time impact on earnings in its overseas operations. Cement business was
also under pressure due to subdued prices and higher input costs.
The Company's (consolidated) finance costs were lower by 4% at Rs. 149
Crores due to lower Debt. Gross Debt stood at Rs. 1,178 Crores vs Rs.
1,557 Crores last year. Net debt stood at Rs. 683 Crores. Company's
policy to conserve the healthy cash flow generation has enabled to
reduce debt and strengthen the financial position.
The improved financial performance of the Company has led to upgrade in
its Credit ratings by ICRA. Short Term debt rating has moved up from
'A1' to 'A1+' and Long Term from 'A' to 'A + '.
Joint Venture
Shriram Axiall Private Limited (formerly Shriram Vinyl Polytech Pvt.
Ltd.), 100% subsidiary of the Company had taken over the business of
Shriram Polytech (division of the Company) w.e.f. 15th March, 2013.
The Company entered into the Joint Venture Agreement with M/s.Axiall,
LLC (subsidiary of Axiall Corporation, USA) for forming a 50 : 50 Joint
Venture for the Polymer Compounding business carried on by the
aforesaid subsidiary of the Company (JV Company). This arrangement
will enable the JV Company to launch latest generation Polymer
Compounds in India, offering more cost effective polymer solutions for
different applications in domestic market.
Dividend
Your Directors are pleased to recommend final dividend @ 60% i.e.
Rs.1.20 per Equity Share of Rs.2/- each for the year ended 31.3.2014.
The total dividend for the financial year 2013-2014 results to 100%
i.e. Rs.2/- per equity share of Rs.2/- each (including interim dividend
@ 40% paid in February, 2014).
Subsidiary Companies
Pursuant to General Circular No.2/2011 dated 8.2.2011 issued by
Ministry of Corporate Affairs, the Annual Accounts of the Subsidiaries
are not attached with Accounts of the Company. As per Accounting
Standard AS-21 issued by The Institute of Chartered Accountants of
India, Consolidated Financial Statements presented by the Company in
this Annual Report includes the financial information of its
subsidiaries. The Audited Annual Accounts of the Subsidiary Companies
and the related detailed information is available on the website of the
Company. The said financial information of the subsidiaries in hard
copy shall be made available to any Shareholder on request and will
also be kept open for inspection at the Registered Office of the
Company on all working days.
Unclaimed Shares Suspense Account
In terms of Clause 5A of the Listing Agreement, the Company reports the
following details in respect of equity shares lying in the suspense
accounts which were issued in physical form.
Balance As on No. of Shareholders Closing Balance
01/04/2013 who approached the as on 31/03/2014
Transfer of Company
for Shares and Shares
transferred from
Suspense Account
during the Year
No.of No. of No. of No. of No. of No. of
Holders Shares Holders Shares Holders Shares
4563 678210 11 5150 4552 673060
The voting rights on the shares in the suspense accounts as on March,
31, 2014 shall remain frozen till the rightful owners of such shares
claim the shares.
Corporate Governance
The Company is committed to adherence to best corporate governance
practices. A separate section on Management Discussion and Analysis,
Corporate Governance and a Certificate from the Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement(s) with the Stock
Exchange(s) form part of the Annual Report.
Directors
Dr. N.J. Singh, Director retires by rotation, and being eligible,
offers himself for re-appointment.
Shri Sharad Shrivastva, LIC Nominee, was appointed as a Director of the
Company to fill the casual vacancy caused by the resignation of Shri
Rajesh Kandwal, LIC Nominee, to hold office upto the forthcoming Annual
General Meeting of the Company.
The Directors place on record their sincere appreciation for the
contribution made by Shri Rajesh Kandwal, LIC Nominee, during his
tenure as a Director of the Company.
Shri K.K. Kaul was appointed as an Additional Director to hold office
upto the forthcoming Annual General Meeting of the Company.
Section 149 of the Companies Act, 2013 provides for the appointment of
Independent Directors, subject to the approval of Shareholders in the
General Meeting. The Nomination and Remuneration Committee and the
Board of Directors recommend the appointment of all the Independent
Directors as set out in the Notice of the forthcoming Annual General
Meeting for the approval of Shareholders.
The Company has received declaration from all the Independent Directors
of the Company confirming that they meet the criteria of independence
as prescribed under the Companies Act, 2013 and Clause 49 of the
Listing Agreement.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
Cost Auditors
The Company has appointed M/s. Bahadur Murao & Co., Cost Accountants,
New Delhi as Cost Auditors for the financial year 2014-15, to audit the
cost accounting records for its products namely, Fertilisers,
Chemicals, Cement, PVC, UPVC Articles, Textiles and Seeds.
The Company has appointed M/s. J.P. Sarda & Associates, Cost
Accountants, Kota as Cost Auditors for the financial year 2014-15 for
its DSCL Sugar units including Power selling plants.
Change in the name of the Company
The name of the Company was changed from DCM Shriram Consolidated
Limited to DCM Shriram Limited w.e.f. 21st February, 2014.
Buy-back of shares
During the year, the Company has bought back 28,35,471 equity shares of
Rs. 2/- each, upto 31st March, 2014, out of which 26,96,909 equity
shares of Rs.2/- each have been extinguished by 31st March 2014.
DCM Shriram Employee Stock Purchase Scheme
During the year, the Company had aligned its Employee Stock Purchase
Scheme (the "Scheme") in accordance with the Securities Exchange Board
of India (Employee Stock Option Scheme & Employee Stock Purchase
Scheme) Guidelines, 1999 read with Securities Exchange Board of India
circular CIR/CFD/ DIL/7/2013 dated May 13, 2013.
The aligned Scheme was approved by the shareholders of the Company, on
13th August, 2013, and made effective from September 1, 2013. The
Scheme provides for grant of Equity Shares through Trust, procured from
the secondary market to the eligible employees/Directors of the Company
("Eligible Participant"), as may be decided from time to time and
granted by the Compensation Committee at an exercise price of Rs. 2/-
each.
Disclosures in compliance with the Securities Exchange Board of India
(Employee Stock Option Scheme & Employee Stock Purchase Scheme)
Guidelines, 1999, as amended, in respect of grants made through Trust
under the aligned Scheme w.e.f., September 1, 2013 are detailed below.
The aligned Scheme is a secondary market scheme and no fresh issue of
shares is made. Accordingly, the applicable disclosures are as
follows:
Sl. Particulars Details
No.
a) The details of the Out of total shares procured from the
number of shares secondary market, only 15,000 equity
issued in ESPS. shares were granted through the Trust
during the said period.
b) The price at which Shares were granted to employees at
such shares are an exercise price Rs. 2/- per share.
issued.
c) Employee - wise No fresh shares were issued
details of the to the employees. Shares were granted
shares issued to: from those procured from secondary
market, accordingly, no fresh shares
were issued during the said period
and following are not applicable:
i) Senior Managerial N.A.
Personnel
ii) Any other employee N.A.
who is issued
shares in any one
year amounting to
5% or more of the
total shares
issued during that
year.
iii) Identified N.A.
employees who
were issued shares
during any one year
equal to or
exceeding 1 % of
the issued capital
of the Company at
the time of
issuance.
d) Diluted Earning As all shares granted are
Per Shareto (EPS) procured from secondary market,
pursuant issuance there is no dilution of EPS pursuant
of shares under to Scheme.
ESPS.
e) Consideration Rs. 2/- per share
received against
the grant of shares.
Personnel
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975
and amendments thereto, the names and other particulars of the
employees are required to be set out in the Annexure to the Directors'
Report. However, as per the provisions of Section 219(1 )(b)(iv) of the
Act, the Annual Report is being sent to all the Members excluding the
aforesaid particulars. Any Member interested in obtaining a copy of the
said statement may write to the Company Secretary of the Company.
Directors' Responsibility Statement
It is hereby affirmed that
1. in preparation of annual accounts, all applicable accounting
standards have been followed,
2. the accounting policies of the Company have been consistently
followed. Wherever circumstances demanded, estimates have been made
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,
3. proper and sufficient care has been taken for maintenance of
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding assets of the Company and proper internal
controls are in place for preventing and detecting frauds and other
irregularities, and
4. annual accounts have been prepared on a going concern basis.
Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings/Outgo
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
appended hereto and forms part of this report.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank customers, the Government authorities,
financial institutions, bankers, other business associates and
shareholders for the co-operation and encouragement extended to the
Company. The Directors also place on record their deep appreciation for
the contribution made by the employees at all levels.
On behalf of the Board
New Delhi (AJAY S. SHRIRAM)
2nd July, 2014 Chairman & Sr. Managing Director
Mar 31, 2013
The Directors have pleasure in presenting the 24th Annual Report of the
Company along with Audited Accounts for the year ended 31st March,
2013.
Financial Highlights
The results for the year ended 31.3.2013 and 31.3.2012 are as under:
(Rs. in crores)
Particulars Standalone Consolidated
31.3.2013 31.3.2012 31.3.2013 31.3.2012
Total Revenue 5446.05 4985.59 15572.87 5068.28
Profit before depreciation,
finance cost, tax and
exceptional item 554.04 332.04 574.07 364.78
Depreciation 143.82 154.07 146.79 156.88
Finance Cost 152.65 157.56 154.83 160.29
Profit before exceptional
item and tax 257.57 20.41 272.45 47.61
Exceptional Item (53.58) (38.06) (53.58) (38.06)
Profit/(loss)
before Tax 203.99 (17.65) 218.87 9.55
Provision for Taxation 13.45 (3.39) 15.98 (2.37)
Profit/(Loss) after tax 190.54 (14.26) 202.89 11.92
Balance brought forward
from previous year 453.80 475.91 494.89 494.53
Net Profit available
for appropriation 644.34 461.65 697.78 506.45
Appropriations
- Proposed Dividends on
Equity Shares (Incl. Interim
dividend) 26.54 6.64 26.54 6.64
- Corporate Dividend Tax 3.32 1.08 3.32 2.17
- Storage fund for
Molasses Account 0.13 0.13 0.13 0.13
- General Reserve 75.00 - 75.00 2.62
- Balance Carried Forward 539.35 453.80 592.79 494.89
Performance
The Company has delivered a healthy performance during the year. The
Net Revenues were up by 10% at Rs. 5539 Crores as against Net Revenue
of Rs. 5039 Crores in the previous year. The growth in revenues were
driven by growth in Sugar (up by 48%), Shriram
Farm Solutions (up by 20%) and Chloro-Vinyl (up by 15%) businesses.
On the earnings, EBITDA of the company recorded a growth of 57% at
Rs.574 Crores. PBIT (before exceptional items) grew by 106% at Rs.427
Crores. The key drivers of the growth for PBIT (before exceptional
items) during the year were higher earnings in the Chloro-Vinyl
business, driven by cost savings and better product prices, higher
earnings in the Sugar business along with lower losses from the
Hariyali business. Lower losses in the Hariyali business was result of
the implementation of restructuring and rationalization plan which
involved restricting activities to profitable ones only.
The Company, however, also faced challenges in businesses like Shriram
Farm Solutions and Bioseed due to adverse weather conditions in some
regions of operations. The Company also faced challenges in the
Government controlled businesses like Sugar and Fertilizers.
The Company, during the year had to account for an exceptional item of
Rs.53.6 Crores which is a charge on account of losses on sale of
surplus assets and expenses, consequent to company''s decision to
restructure and rationalize Hariyali Kisaan Bazaar''s operations to
restrict its activities to profitable lines only.
The Company''s finance costs were lower by 3% at Rs.155 Crores due to
lower Net Debt. Net Debt stood at Rs.1386 Crores as compared to Rs.1521
Crores. The debt could have been lower, however, higher subsidy
outstanding from the Government on account of Fertilizer subsidy and
higher Sugar stocks led to higher requirement of working capital.
Profit before tax (before exceptional item) was higher at Rs.272 Crores
in FY13 as compared to Rs.48 Crores in the previous year.
Net Profit for FY 13 was higher at Rs.203 Crores as compared to Net
profit of Rs.12 Crores in the previous period.
The improved financial performance of the company has led to Short term
debt rating being upgraded from A2 to A1 and Long term rating being
upgraded from A- to A. Both these ratings are from ICRA.
Dividend
Your Directors are pleased to recommend final dividend @ 40% i.e.
Re.0.80 per Equity Share of Rs.2/- each for the year ended 31.3.2013.
The total dividend for the financial year 2012-2013 results to 80% i.e.
Rs.1.60 per equity share of Rs.2/- each (including interim dividend
paid @ 40% in February, 2013).
Subsidiary Companies
In terms of Circular dated 8.2.2011, issued by the Ministry of
Corporate Affairs, general exemption has been granted from the
provisions of Section 212 of the Companies Act, 1956 to Companies in
relation to attaching accounts of its subsidiaries, subject to
fulfillment of the conditions mentioned in the circular and necessary
conditions as stipulated have been complied with by the Company. The
Company will make available these documents upon request by any Member
of the Company, interested in obtaining the same and shall also be kept
for inspection at the Registered Office of the Company. However, as
directed by the Central Government, the financial data of the
subsidiaries have been furnished under ''subsidiary companies
particulars'' forming part of the Annual Report. Further, pursuant to
Accounting Standard AS-21 issued by The Institute of Chartered
Accountants of India, Consolidated Financial Statements presented by
the Company in this Annual Report includes the financial information of
its subsidiaries.
Merger of Bioseed Research India Limited into the Company
The Directors in their meeting held on 17.12.2012, had approved in
principle, the proposal of merger of Bioseed Research India Ltd. (100%
subsidiary) into the Company to be effective from the appointed date
i.e.1st April, 2013.
Subsequently, the said Scheme of Arrangement has been approved by the
Hon''ble High Court of Delhi on 22.3.2013.
This Merger will enable the Company to strengthen its balance sheet and
leverage the cash flows of the Transferor Company for financing the
growth of bioseed business of the Company.
Fixed Deposits
As on 31st March, 2013, 30 deposits aggregating to Rs.6.83 lacs were
unclaimed. Since then, 30 deposits amounting to Rs.6.83 lacs have been
claimed/renewed.
Unclaimed Shares Suspense Account
Pursuant to complying with the requirement of Clause 5A of Listing
Agreement, the Company had transferred unclaimed shares into Unclaimed
Shares Suspense Account after sending three reminders to those
shareholders whose shares are lying as unclaimed.
As on 1st April, 2012, 4568 folios aggregating to 679510 shares of
Rs.2/- each were unclaimed. As on 31st March, 2013, 4563 folios
aggregating to 678210 shares of Rs.2/- each were unclaimed. Since then,
5 Shareholders holding 3850 shares of Rs.2/- each has approached and
out of which 2650 shares of Rs.2/- each have been transferred. The
voting rights on the shares lying in Unclaimed Shares Suspense Account
shall remain frozen till the rightful owner of such shares claims the
shares.
Corporate Governance
The Company is conscious of its responsibility as a good corporate
citizen and is committed to adherence to best corporate governance
practices. A separate section on Management Discussion and Analysis,
Corporate Governance and a Certificate from the Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement(s) with the Stock
Exchange(s) form part of the Annual Report.
Directors
Shri Ajit S. Shriram, Shri Pradeep Dinodia and Dr. N.J.Singh,
Directors, retire by rotation and are eligible for re-appointment.
Re-appointment of Shri Ajay S. Shriram as Chairman & Sr. Managing
Director and Shri Vikram S.Shriram as Vice Chairman & Managing
Director, is being sought in the ensuing Annual General Meeting (AGM)
of the Company for a period of five years w.e.f. 1.11.2013. The
requisite details of the re-appointments are mentioned in the said AGM
Notice.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
Cost Auditors
The Company has appointed M/s. Bahadur Murao & Co., Cost Accountants,
New Delhi as Cost Auditors for the financial year 2013-14, to audit the
cost accounting records for its products namely, Fertilisers,
Chemicals, Cement, PVC, UPVC Articles, Textiles and Seeds.
The Company has appointed M/s. J.P. Sarda & Associates, Cost
Accountants, Kota as Cost Auditors for the financial year 2013-14 for
Sugar and Power selling plants.
The Company has filed Cost Audit Reports for the financial year 2011-12
on 31.1.2013, for its various products, which were due to be filed by
28.2.2013. The due date of filing Cost Audit Reports for the financial
year 2012-13 is 27th September, 2013.
Personnel
In terms of the provisions of Section 217(2A) of the Companies Act, 1
956, read with the Companies (Particulars of Employees) Rules, 1 975
and amendments thereto, the names and other particulars of the
employees are required to be set out in the Annexure to the Directors''
Report. However, as per the provisions of Section 219(1)(b)(iv) of the
Act, the report and accounts are being sent to all the Members
excluding the aforesaid particulars. The complete Annual Report
including this statement shall be made available for inspection by any
Member during the working hours from 11.00 A.M. to 1.00 P.M. on all the
working days for a period of 21 days before the date of the Annual
General Meeting. Any Member interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office
of the Company.
Directors'' Responsibility Statement
It is hereby affirmed that
1. in preparation of annual accounts, all applicable accounting
standards have been followed,
2. the accounting policies of the Company have been consistently
followed. Wherever circumstances demanded, estimates have been made
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,
3. proper and sufficient care has been taken for maintenance of
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding assets of the Company and proper internal
controls are in place for preventing and detecting frauds and other
irregularities, and
4. annual accounts have been prepared on a going concern basis.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings/Outgo
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
appended hereto and forms part of this report.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank customers, the Government authorities,
financial institutions, bankers, other business associates and
shareholders for the co-operation and encouragement extended to the
Company. The Directors also place on record their deep appreciation for
the contribution made by the employees at all levels.
On behalf of the Board
New Delhi (AJAY S. SHRIRAM)
2nd May, 2013 Chairman & Sr. Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the 23rd Annual Report of the
Company along with Audited Accounts for the year ended 31st March,
2012.
Financial Highlights
The working results for the year ended 31.3.2012 and 31.3.2011 are as
under:
(Rs. in crores)
Particulars Standalone Consolidated
31.3.2012 31.3.2011 31.3.2012 31.3.2011
Total Income 4985.59 4098.71 5068.28 4167.83
Profit before
depreciation, finance
cost, tax and
exceptional item 332.04 208.09 364.78 231.91
Depreciation 154.07 157.59 156.88 159.98
Finance Cost 157.56 101.37 160. 29 103.92
Profit/(Loss) before
tax and exceptional
item 20.41 (50.87) 47.61 (31.99)
Exceptional Item (38.06) - (38.06) -
Profit/(Loss)
before Tax (17.65) (50.87) 9.55 (31.99)
Provision
for Taxation (3.39) (20.21) (2.37) (17.72)
Profi t/( Loss ) after tax (14.26) (30.66) 11.92 (14.27)
Balance brought
forward from
previous year 475.91 505.06 494.53 517.17
Net Profit available
for appropriation 461.65 484.27 506.45 502.90
Appropriations
- Proposed
Dividends on
Equity Shares
(Incl. Interim
dividend) 6.64 6.64 6.64 6.64
- Corporate
Dividend Tax 1.08 1.08 2.17 1.08
- Storage fund for
Molasses Account 0.13 0.64 0.13 0.64
- General Reserve à à 2.62
- Balance Carried
Forward 453.80 475.91 494.89 494.53
Performance
During the year, the Company recorded better performance as compared to
previous year. The net revenues were up by 21 % at Rs.5039 crores
driven by growth most businesses especially Sugar (up 48%), Bioseed (up
34%), Chloro-Vinyl (up by 25%) and Farm solutions (up by 18%).
PBIT (before exceptional item and tax) was up by 189% at Rs.208 crores.
Chloro-Vinyl, Bioseed, Farm solutions and Sugar businesses registered
major earnings growth. The Earnings growth was moderated by higher
losses in Hariyali business as the company incurred outlet shutdown
expenses, MTM Losses etc. The earnings were also moderated by dip in
earnings of Fertilizer, Cement and Textile businesses.
The company also had to account for an exceptional item of Rs. 38
crores as differential Cane price for Sugar season 2007-08.
The Finance costs for the year were up by 54% at Rs.160 crores driven
mainly by higher average borrowing costs.
The Company also during the year had to account for an exceptional item
of Rs.38.1 crores which represents the amount of differential cane
price for Sugar season 2007-08 pursuant to the Hon'ble Supreme Court's
Order dated 17th January, 2012.
PBT before exceptional item stood at Rs.47.6 crores as against a loss
of Rs.32 crores in the previous year.
Net profit for the year stood at Rs.11.9 crores as against a net loss
of Rs.14.3 crores.
Dividend
Your Directors are pleased to recommend dividend @ Re.0.40 per Equity
Share of Rs.2/- each for the year ended 31st March, 2012.
Subsidiary Companies
In terms of Circular dated 8.2.2011, issued by the Ministry of
Corporate Affairs, general exemption has been granted from the
provisions of Section 21 2 of the Companies Act, 1956 to Companies in
relation to attaching accounts of its subsidiaries, subject to
fulfillment of the conditions mentioned in the circular and necessary
conditions as stipulated has been complied with by the Company. The
Company will make available these documents upon request by any Member
of the Company, interested in obtaining the same and shall also be kept
for inspection at the Registered Office of the Company. However, as
directed by the Central Government, the financial data of the
subsidiaries have been furnished under 'subsidiary companies
particulars' forming part of the Annual Report. Further, pursuant
to Accounting Standard AS-21 issued by The Institute of Chartered
Accountants of India, Consolidated Financial Statements presented by
the Company in this Annual Report includes the financial information of
its subsidiaries.
Fixed Deposits
As on 31st March, 2012, 66 deposits aggregating to Rs.26.81 lacs were
unclaimed. Since then, 10 deposits amounting to Rs.2.48 lacs have been
claimed/renewed.
Unclaimed Shares Suspense Account
Pursuant to complying with the requirement of Clause 5A of Listing
Agreement, the Company had transferred unclaimed shares into Unclaimed
Suspense Account after sending three reminders to those shareholders
whose shares are lying as unclaimed.
As on 1st April, 2011, share certificates for 4621 folios aggregating
to 7,04,880 shares of Rs.2/- each were unclaimed. As on 31 st March,
2012, share certificates for 4568 folios aggregating to 679510 shares
of Rs.2/- each were unclaimed. Since then, one share holder holding 50
shares of Rs.2/- each has approached and the same has been transferred.
Corporate Governance
The Company is conscious of its responsibility as a good corporate
citizen and is committed to adherence to best corporate governance
practices. A separate section on Management Discussion and Analysis,
Corporate Governance and a Certificate from the Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement(s) with the Stock
Exchange(s) form part of the Annual Report.
Directors
Shri Vimal Bhandari, Shri Sunil Kant Munjal and Shri D. Sengupta,
Directors, retire by rotation and are eligible for re-appointment.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
Cost Auditors
The Company has appointed M/s. Bahadur Murao & Co., New Delhi as Cost
Auditors for the financial year 2012-13, to audit the cost accounting
records for its products namely, Fertilizers, Cement, Caustic Soda and
Textiles.
The Company has re-appointed M/s. J.P. Sarda & Associates, Cost
Accountants, Kota as Cost Auditors for Sugar and Power selling plants.
The Company has filed Cost Audit Reports for the financial year 2010-11
on 8th September and 10th September, 2011 for its various products,
which were due to be filed by 27th September, 2011. The due date of
filing Cost Audit Reports for the financial year 2011-12 is 27th
September, 2012.
Personnel
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975
and amendments thereto, the names and other particulars of the
employees are required to be set out in the Annexure to the Directors'
Report. However, as per the provisions of Section 219(1 )(b)(iv) of the
Act, the report and accounts are being sent to all the Members
excluding the aforesaid particulars. The complete Annual Report
including this statement shall be made available for inspection by any
Member during working hours for a period of 21 days before the date of
the Annual General Meeting. Any Member interested in obtaining a copy
of the said statement may write to the Company Secretary at the
Registered Office of the Company.
Directors' Responsibility Statement
It is hereby affirmed that
1. in preparation of annual accounts, all applicable accounting
standards have been followed,
2. the accounting policies of the Company have been consistently
followed. Wherever circumstances demanded, estimates have been made
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,
3. proper and sufficient care has been taken for maintenance of
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding assets of the Company and proper internal
controls are in place for preventing and detecting frauds and other
irregularities, and
4. annual accounts have been prepared on a going concern basis.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings/Outgo
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
appended hereto and forms part of this report.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank customers, the Government authorities,
financial institutions, bankers, other business associates and
shareholders for the co-operation and encouragement extended to the
Company. The Directors also place on record their deep appreciation for
the contribution made by the employees at all levels.
On behalf of the Board
New Delhi (AJAY S. SHRIRAM)
11th May, 2012 Chairman & Sr. Managing Director
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the 22nd Annual Report of the
Company along with Audited Accounts for the year ended 31st March,
2011.
Merger of Shriram Bioseed Genetics India Limited into the Company
The Company implemented a Scheme of Amalgamation approved by the
Hon'ble High Court of Delhi under Sections 391-394 of the Companies
Act, 1956 for amalgamation of its subsidiary Shriram Bioseed Genetics
India Limited into the Company w.e.f. 1st April, 2009. This Scheme has
been given effect to in the Annual Report and the Financial Statements
for the year ended 31st March, 2011 and therefore the data for the
current year is not comparable with that of the previous year.
The Scheme of Arrangement will strengthen and consolidate the position
of the Company in seeds business and will enable it to participate more
vigorously and profitably in an increasingly growing market.
Financial Highlights
The working results for the year ended 31.3.2011 and 31.3.2010 are as
under:
(Rs. in crores)
Particulars Standalone Consolidated
31.3.2011 31.3.2010 31.3.2011 31.3.2010
Total Income 4098.71 3448.69 4167.83 3570.45
Profit before
depreciation,
interest, tax and
exceptional item 170.49 342.62 194.31 367.57
Depreciation 157.59 159.68 159.98 162.96
Interest 63.77 86.03 66.32 88.56
Profit before tax (50.87) 103.83 (31.99) 122.53
Provision
for Taxation (20.21) 32.55 (17.72) 38.28
Profit after tax (30.66) 71.28 (14.27) 84.25
Balance brought
forward from
previous year 505.06 499.29 517.17 498.74
Net Profit available
for appropriation 484.27 570.57 502.90 582.99
Appropriations
- Proposed
Dividends on
Equity Shares
(Incl. Interim
dividend) 6.64 13.28 6.64 13.28
- Corporate
Dividend Tax 1.08 2.23 1.08 2.50
- Storage fund for
Molasses Account 0.64 Ã 0.64 Ã
- General Reserve à 50.00 à 50.00
- Balance Carried
Forward 475.91 505.06 494.53 517.17
Performance
During the year, the Company faced difficult operating environment with
most businesses witnessing margin pressure. Bioseed and Farm Solutions
businesses continued to witness growth in turnover and profits. The net
revenue of the Company stood at Rs.4082.3 Crores as compared to the
previous year's revenue of Rs.3423.5 Crores, an increase of 19.2%. Net
Loss for the year stood at Rs.30.7 Crores as against net profit of
Rs.71.3 Crores. On the consolidated basis, the net revenue of the
Company was higher by 17.1% at Rs.4151.9 Crores and net loss for the
year stood at Rs.14.3 Crores as against a net profit of Rs.84.3 Crores.
The Sugar business witnessed a very challenging year with the earnings
swung from positive PBIT of Rs.42.5 Crores to negative PBIT of Rs.7.1
Crores. The key reason was the decline in free sugar margins which
swung from Rs. 480/Quintal to Rs.(182)/Quintal in the current year
apart from witnessing lower volumes. The dip in the earnings was
partially mitigated by higher sale of Power due to longer crushing.
The earnings in the Chloro-Vinyl business dipped by almost 49% during
the year as in the previous year the Company had sold Power which had
higher net back per unit of Power. There was a significant dip in
Power realization since Q2FY11. Using the swing capability at our Kota
manufacturing facility, the Company then shifted to manufacture and
sale of the Chloro-Vinyl products. However, the net back from the sale
of Chloro-Vinyl products was lower than that from the sale of Power,
which the Company had done in the previous year. Further impacting the
margins were the cost of coal (imported and domestic) and other raw
material.
The earnings from the Cement business dipped by almost 56% to Rs.16.4
Crores on the back of drop in the realizations by ~12% and increase in
input price especially that of coal.
Hariyali Kisaan Bazaar witnessed higher losses for the year, however
losses at the operating level were lower as the Company incurred
onetime cost for rationalizing the operations. The Company has already
implemented the plan involving a focused price value proposition and
product offering for the rural population based on intensive customer
feedback.
The earnings of the Farm Solutions business increased by 148.2% to
Rs.41.4 Crores on the back of reintroduction of DAP and MOP during the
year and growth in the value added products.
The earnings of the Bioseed business increased by 33.1% to Rs.37.8
Crores especially driven by growth witnessed in India and Philippines
and strong demand across hybrids. The Bioseed business through 100%
subsidiaries continues to grow and is a value drive for the Company.
Fenesta continued to witness healthy order booking in both the retail
and institutional segment. We believe that longer order booking to
execution cycle will result in better performance in medium term.
The Company continues to conserve cash. However, the increase in the
interest rates consequent to hike in the interest rates by the RBI may
impact our interest costs in the coming year.
Dividend
Your Directors are pleased to recommend dividend @ Re.0.40 per Equity
Share of Rs.2/- each for the year ended 31st March, 2011.
Subsidiary Companies
As per the Scheme of Arrangement approved by the Hon'ble High Court of
Delhi on 19.8.2010 under Sections 391-394 of the Companies Act, 1956,
Shriram Bioseed Genetics India Limited (SBGIL) merged into your Company
w.e.f. 1st April, 2009 and accordingly SBGIL stands dissolved as from
that date.
In terms of Circular issued by the Ministry of Corporate Affairs,
general exemption has been granted from the provisions of Section 212
of the Companies Act, 1956 to Companies in relation to attaching
accounts of its subsidiaries subject to fulfillment of the conditions
mentioned in the circular, necessary conditions as stipulated has been
complied by the Company. The Company will make available these
documents upon request by any Member of the Company interested in
obtaining the same. However, as directed by the Central Government, the
financial data of the subsidiaries have been furnished under
'subsidiary companies particulars' forming part of the Annual Report.
Further, pursuant to Accounting Standard AS-21 issued by The Institute
of Chartered Accountants of India, Consolidated Financial Statements
presented by the Company in this Annual Report includes the financial
information of its subsidiaries.
Fixed Deposits
As on 31st March, 2011, 85 deposits aggregating to Rs.37.45 lacs were
unclaimed. Since then, 17 deposits amounting to Rs.9.79 lacs have been
claimed/renewed.
Unclaimed Shares Suspense Account
Clause 5A of Listing Agreement has been amended by SEBI. Pursuant to
this amendment, it has become mandatory for Companies to transfer
unclaimed shares issued in physical form to Unclaimed Suspense Account
after sending three reminders to those shareholders whose shares are
lying unclaimed. The Company has already sent 2 reminders to those
shareholders. The Unclaimed Suspense Account will be opened only after
completing the whole process.
As on 31st March, 2011, share certificates for 4,621 folios aggregating
to 7,04,880 shares of Rs.2/- each were unclaimed. Since then 11 folios
aggregating to 520 shares of Rs.2/- each have been claimed.
Corporate Governance
The Company is conscious of its responsibility as a good corporate
citizen and is committed to adherence to best corporate governance
practices. A separate section on Corporate Governance and a Certificate
from the Auditors of the Company regarding compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement(s) with the Stock Exchange(s) form part of the Annual Report.
Directors
During the year, Shri S.C. Bhargava, resigned from the Board of the
Company and in his place Shri Rajesh Kandwal, LIC Nominee, has been
co-opted as a Director of the Company.
The Directors place on record their sincere appreciation for
the contribution made by Shri S.C. Bhargava during his tenure as a
Director of the Company.
Shri Rajiv Sinha, Dr. S.S. Baijal and Shri Arun Bharat Ram, Directors,
retire by rotation and are eligible for re-appointment.
Shri Rajesh Kandwal, a nominee of Life Insurance Corporation of India,
was co-opted by the Board w.e.f. 1.2.2011 to fill the casual vacancy
caused by the resignation of Shri S.C. Bhargava, who was liable to
retire by rotation at the ensuing Annual General Meeting. A notice has
been received from a Member for appointment of Shri Rajesh Kandwal as a
Director.
Further, Shri Rajiv Sinha and Shri Ajit S. Shriram have been
re-designated as Joint Managing Director and Deputy Managing Director,
respectively.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
Personnel
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of the employees are required to be set
out in the Annexure to the Directors' Report. However, as per the
provisions of Section 219(1)(b)(iv) of the Act, the report and accounts
are being sent to all the Members excluding the aforesaid particulars.
The complete Annual Report including this statement shall be made
available for inspection by any Member during working hours for a
period of 21 days before the date of the Annual General Meeting. Any
Member interested in obtaining a copy of the said statement may write
to the Company Secretary at the Registered Office of the Company.
Directors' Responsibility Statement
It is hereby affirmed that
1. in preparation of annual accounts, all applicable accounting
standards have been followed,
2. the accounting policies of the Company have been consistently
followed. Wherever circumstances demanded, estimates have been made
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,
3. proper and sufficient care has been taken for maintenance of
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding assets of the Company and proper internal
controls are in place for preventing and detecting frauds and other
irregularities, and
4. annual accounts have been prepared on a going concern basis.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings/Outgo
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
appended hereto and forms part of this report.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank customers, the Government authorities,
financial institutions, bankers, other business associates and
shareholders for the cooperation and
encouragement extended to the Company. The Directors also place on
record their deep appreciation for the contribution made by the
employees at all levels.
On behalf of the Board
New Delhi (AJAY S. SHRIRAM)
6th May, 2011 Chairman & Sr. Managing Director
Mar 31, 2010
The Directors have pleasure in presenting the 21st Annual Report of the
Company along with Audited Accounts for the year ended 31st March,
2010,
Financial Highlights
The working results for the year ended 31.3.2010 and 31.3.2009 are as
under:
Particulars 31.3.2010 31.3.2009
(Rs. in crores (Rs. in crores)
Gross Sales 3512.96 3571.34
Net Revenues 3448.69 3439,21
Profit before depreciation, interest,
tax and exceptional item 342,62 369.23
Depreciation 159.68 146.41
Interest 89.03 146.41
Profit before.tax and exceptional item 96.91 78.02
Exceptional Item 6.92 -
Profit before tax 103.83 76.02
Provision for.Taxation 32.55 (25.77)
Net Profit.(before exceptional item) 64,36 101.79
Transfer from Debenture Redemption
Reserve - 1.50
Balance brought forward from
previous year 499.29 461.53
Net .Profit ayailable for apprppriatipn 570.57 564.82
Appropriations
- Proposed Dividends on Equity Shares
(Including Interim .dividend} 13.28 13.27
- Corporate Dividend Tax 2.23 2.26
- General Reserve 50.00 50.00
- Balance Carried Forward 505.06 499.29
Performance
During the year, the Company witnessed a stable performance in a
challenging operating environment. The net revenue of the Company stood
at Rs.3448.69 crores as compared to Rs.3439.21 crores in the previous
year, in Fertilizer, the use of Natural Gas instead of Naptha as
feedstock, reduced the turnover by Rs.317 crores in the current year.
The Profit before tax stood at Rs. 103.83 crores as compared to
Rs.76.02 crores in the previous year, an increase of 37%. Net profit of
the Company stood at Rs.71.28 crores as against Rs. 101.79 crores last
year, which included one time tax credit. On consolidated basis, the
net revenue of the Company stood at Rs.3570.45 crores as compared to
Rs.3558.07 crores in the previous year. The Profit before tax stood at
Rs. 122.53 crores as compared to Rs. 101.13 crores in the previous
year. Net profit of the Company stood at Rs.84.25 crores as against Rs.
122.61 crores last year.
The Agri Input and Solutions Businesses of the Company comprise of
Fertiliser, Agri Inputs and Bioseed. The fertilizer business performed
better buoyed by efficiencies arising from change in feedstock from
Naptha to Natural Gas, and notification of NPS III. Agri inputs
business witnessed marginal decline primarily due to lower monsoon and
drop in subsidy price of SSP. The Bioseed business through 100%
subsidiaries witnessed good growth in Revenues. This business continues
to be a focus area and a value driver for the Company, going forward.
Sugar Business witnessed a volatile year in terms of input as well as
output prices. The higher quota for levy sugar impacted the profits.
Chloro-Viny businesses comprise of Chlor-Alkali, Plastics and Power.
The integrated operations enable flexible production which in turn
enables the Company to optimize returns from this business. The
Chemicals and Plastics delivered lower volumes due to lower
realizations and enabled higher sale of power on merchant basis giving
stability to the segment results.
Hariyali Kisaan Bazaar, the Rural Business Centres witnessed higher
losses, resultant to lower than expected sales and the carryover impact
of high outlet additions in FY09. The Company is taking focused steps
to strengthen the business model and make it a better value proposition
for customers to increase sales.
Fenesta with its focus on retail as well as institutional segment is
poised for growth and should deliver higher returns going forward.
The earnings were buoyed by substantial reduction in Interest costs, an
outcome of lower debt and interest rates.
During the year, the Company sold its Energy Services Company, a 100%
subsidiary, at the valuation of Rs. 10.6 crores, in all cash deal.
The detailed performance of various businesses has been stated in
Management Discussion and Analysis which appears as a separate
section in the Annual Report.
Dividend
Your Directors are pleased to recommend dividend @ Re.0.80 per Equity
Share (including interim dividend @ Re.0.40 per Equity Share paid in
November, 2009) of Rs.2/- each for the year ended 31st March, 2010.
Merger of Shriram Bioseed Genetics India Limited into the Company
The Directors in their meeting held on 20.1.2010, had approved in
principle, the proposal of Merger of Shriram Bioseed Genetics India
Limited (100% subsidiary) into the Company w.&f. 1st April, 2009.
The Scheme of Arrangement in this connection has been approved by the
Members, Secured and Unsecured Creditors of the Company in their
respective meetings held on 20.4.2010.
This Merger will strengthen and consolidate the position of the Company
in seeds business and will enable it to participate more vigorously and
profitably in an increasingly
competitive and liberalized market.
Subsidiary Companies
During the period under review, Shridhar Shriram Foundation became
subsidiary of your Company.
During the year DSCL Energy Services Company Limited (DESCO) ceased to
be subsidiary of your Company consequent upon sale of the entire
shareholding by the Company along with its wholly owned subsidiary DCM
Shriram Credit and Investments Limited.
A statement pursuant to Section 21 2 of the Companies Act, 1956
relating to subsidiary companies is attached to the accounts.
In terms of approval granted by the Centra! Government under Section
212(8) of the Companies Act, 1956, the Audited Statements of Accounts
and the Auditors Reports thereon for the year ended 31st March, 2010
along with the Reports of the Board of Directors of the Companys
subsidiaries have not been annexed. The Company will make available
these documents upon request by any Member of the Company interested in
obtaining the same. However, as directed by the Central Government, the
financial data of the subsidiaries have been furnished under
subsidiary companies particulars forming part of the Annual Report.
Further, pursuant to Accounting Standard AS-21 issued by The Institute
of Chartered Accountants of India, Consolidated Financial Statements
presented by the Company in this Annual Report includes the financial
information of its subsidiaries.
Fixed Deposits
As on 31st March, 2010, 100 deposits aggregating to Rs.36.02 lacs were
unclaimed. Since then, 16 deposits amounting to Rs.4.80 lacs have been
claimed/renewed. Corporate Governance
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreementfs)
with the Stock Exchange(s) form part of the Annual Report.
Directors
Shri Ajit S. Shriram, Shri Pradeep Dinodia and Dr. N.J. Singh,
Directors, retire by rotation and are eligible for re-appointment.
Auditors
M/s. Deloitte Haskins and Sells, Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
Personnel
In terms of the provisions of Section 217!2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the name and other particulars of the employees are required to be set
out in the Annexure to the Directors Report. However, as per the
provisions of Section 219(1 )(b)(iv) of the Act, the report and
accounts are being sent to all the Members excluding the aforesaid
particulars. The complete Annual Report including this statement shall
be made available for inspection by any Member during working hours for
a period of 21 days before the date of the Annual General Meeting. Any
Member interested in obtaining a copy of the said statement may write
to the Company Secretary at the Registered Office of the Company.
Directors Responsibility Statement
it is hereby affirmed that
1. in preparation of annual accounts, all applicable accounting
standards have been followed,
2. the accounting policies of the Company have been consistently
followed. Wherever circumstances demanded, estimates have been made
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,
3. proper and sufficient care has been taken for maintenance of
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding assets of the Company and proper internal
controls are in place for preventing and detecting frauds and other
irregularities, and
4. annual accounts have been prepared on a going concern basis.
Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings/Outgo
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 with respect to these matters is
appended hereto and forms part of this report.
Industrial Relations
The Company continued to maintain harmonious and cordial relations with
its workers in all its Divisions, which enabled it to achieve this
performance level on all fronts.
Acknowledgements
The Directors wish to thank customers, the Government authorities,
financial institutions, bankers, other business associates and
shareholders for the cooperation and encouragement extended to the
Company. The Directors also place on record their deep appreciation for
the contribution made by the employees at all levels.
On behalf of the Board
New Delhi (AJAY S. SHRIRAM)
5th May, 2010 Chairman & Sr. Managing Director