DCM Shriram Industries Ltd

The Directors have pleasure in presenting the Annual Report and the Audited Financial Statements of your Company for the year ended 31^st March 2025 together with the Reports of the Auditors and the Board of Directors thereon.

The Indian economy continues to be a global growth leader, demonstrating a steady upward trajectory. This expansion is underpinned by a confluence of factors, including resilient domestic demand, strategic government investments in infrastructure development, and a progressive recovery in international trade.

Leading financial institutions, such as the International Monetary Fund (IMF) and the Reserve Bank of India (RBI), project India's economic growth at approximately 6.3% for the fiscal year 2025-26. Although this represents a marginal moderation compared to the preceding year's estimates, India's growth rate is poised to substantially outperform projected global averages, which stand at 2.8% and 3.0% for the comparable periods.

Global trade uncertainties, initially heightened by US-initiated tariff escalations, are showing signs of easing. There is an increasing recognition among nations, including the United States, of the complex economic interdependencies and potential repercussions of widespread tariff measures. Recent policy adjustments by the USA may indicate a pragmatic shift in approach, acknowledging the potential domestic impacts of sustained trade protectionism.

While significant geopolitical conflicts persist in the Middle East and Eastern Europe, our recent flare-up against terrorism, instigated by a neighboring state, shows signs of de-escalation. It is heartening to see our military and economic resilience to withstand such events. Fostering and maintaining peace are critical, not only for global economic recovery and stability but also for addressing urgent humanitarian concerns.

The Company reported a turnover of Rs. 2052 crore, compared to Rs. 2082 crore in the previous year. Gross profit was Rs. 194.29 crore, a slight decrease from Rs. 210.72 crore, while net profit also saw a modest decline to Rs. 100.30 crore from Rs. 114.94 crore.

The Board of Directors had declared an interim dividend of Rs.2 (100%) per equity share of Rs. 2 for the year 2024-25 in the Board meeting held on 28.03.2025, which was paid in April,2025. Considering the uncertainties posed by the geo-political conflicts and the adverse effect it may have in overall trade and as a conservative measure, the Board of Directors did not recommend any final dividend for the year.

The closing balance of the retained earnings of the Company, after accounting for the dividend for the year 2024-25, amounting to Rs. 679.62 cr, was carried forward in the P & L Account which includes the net profit of Rs. 100.30 cr for the year 2024-25 .

The Dividend Distribution Policy of the Company, as approved by the Board, is available on the Company's website at the following web link: https://dcmsr.com/wp-content/uploads/2022/08/Dividend-Distribution-Policy.pdf

There are no qualifications, reservations, adverse remarks or disclaimer in the Auditors' Reports to the Members on the Annual Financial Statements for the year ended on 31.03.2025.

The Auditors have not reported any fraud pursuant to Section 143(12) of the Companies Act, 2013.

M/s. Chandrasekaran Associates, Company Secretaries, carried out the Secretarial Audit for the year 202425 pursuant to Section 204 of the Companies Act, 2013. A copy of their Report in Form MR-3 as per Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - 1. There is no qualification in the Report.

Global sugar consumption as projected by various agencies will be around 180.5 million MT in Sugar season (SS) 24-25 (Oct 2024 to Sept 2025) against production of 175.5 million MT, consequently the global deficit is expected in the range of 4-5 million MT for SS 24-25.

The global sugar market in 2025 is marked by both continuity and change, steady demand in emerging economies, mounting health concerns in mature markets, and the growing influence of regulatory policies and sustainability imperatives.

Net Sugar production in India is estimated at around 26.4 million MT in SS 24-25 against 31.96 million MT in SS 2023-24. Sugar diversion towards ethanol is expected to be around 3.50 million MT in SS 24-25 against 2.15 million MT in SS 23-24.

Domestic Sugar production during the 2024-25 season was primarily driven by a combination of factors, including the government's focus on ethanol production from sugarcane, sugarcane yield in key producing states, and weather-related phenomena affecting sugarcane growth.

Government allowed exports of 1 million tonnes of sugar for the SS 2024-25. This move came after restriction on sugar exports that had been in place since October 2023. The decision to allow exports helped the sugar mills to clear surplus stocks, stabilize domestic prices and paying the farmers' cane dues timely. Government's sugar import and export policies play a crucial role in balancing domestic supply and demand, stabilizing prices, and supporting the performance of the sugar industry.

The National Policy on Biofuels advanced the target of 20% blending of ethanol in petrol to Ethanol Supply Year (ESY) 2025-26 from ESY 2029-2030. During ESY 2024-25 the country already achieved the ethanol blending of 18% and is on track to achieve 20% in 2025-26. In addition, the government is planning to increase the ethanol blending target upto 30% by 2030. However, for going to 30% blending vehicle engines have to be modified, hence the matter is under study.

The National Policy on Biofuels permits use of surplus food grains for producing ethanol. This Policy also promotes and encourages use of feedstock such as corn, cassava, rotten potatoes, damaged food grains like broken rice, food grains unfit for human consumption, maize, sugarcane juice & molasses, agriculture residues etc. for producing ethanol.

The extent of utilization of individual feedstock for ethanol production will vary annually, influenced by factors such as availability, costs, economic feasibility, market demand, and policy incentives.

For SS 24-25, the Government increased the C heavy ethanol price for ESY 24-25 from Rs 56.58 per Ltr to Rs 57.97 per Ltr and kept the price of ethanol produced from B-heavy and Cane Juice/Syrup unchanged at Rs 60.73 per Ltr and Rs 65.61 per Ltr., respectively. The said increase assured sufficient availability of ethanol & sugar to meet the increased blending target and market demand for sugar.

The Central Government has announced the FRP for Sugarcane for the SS 2025-26 at Rs.355 per Qtl from existing price of Rs 340 per Qtl. State advised price applicable for U.P farmers remain unchanged at Rs 370 per Qtl for SS 24-25.

During FY 24-25, Daurala Sugar Works produced 21.16 lac Qtls of sugar by crushing 200.37 lac Qtls cane on C heavy basis. The sugar recovery at 10.56% in FY 24-25 is lower than 10.74% in FY 23-24, primarily attributed to cane diseases and weather conditions.

Daurala Sugar Works implemented a Bagasse saving project through process optimization during SS 24-25, resulting in more availability of in house bagasse and making the plant self-sufficient in agro fuel for captive consumption. The Unit has sufficient inventory of agro fuel in order to meet it's operational demand during off season.

Coming to Distillery operations, Daurala Sugar Works produced 23521 KL of alcohol during FY 2024-25 lower than 30650 KL of Alcohol produced in FY 2023-24. The fall in production is mainly due to crushing on C heavy basis from last two seasons keeping in view the better profitability on Sugar realization. The Company has also expanded the country liquor production capacity by installing another TETRA pack machine. It will also enable the Unit to captively consume maximum C heavy levy molasses in house and also improve the overall profitability.

The turnover showed a slight decline during the year due to global fall in automobile production, challenges posed by macro-economy and geopolitical environment. The most significant impact was in the last quarter of the financial year. Despite the lower volume, operating margins remained at reasonable level indicating the Unit's sustained operational strength.

Prices of raw materials and energy cost were higher during the year and are expected to go up from current levels during the current year. Efforts will be made to offset the impact through cost optimization, efficiency improvements and price adjustments wherever feasible.

The Unit also manufactures Nylon Chafer Fabric, which is mainly supplied to domestic tyre manufacturers, with a small portion exported to the international market. In addition, the Unit produces Carbon Disulphide (CS₂), which is used both for captive consumption and sold in the domestic market. Both product lines continue to be well received, maintaining presence and reputation among customers.

The Unit's efforts in using agrofuel to replace fossil fuel has succeeded. More energy conservation measures are being adopted considering the increase in the cost of agrofuel.

The Unit has received appreciation and awards in the past from various forums for its highest exports in the segment, business excellence, and recognition as a best employer. This year too, the Unit received the Best Employer Award and achieved a major milestone, marking a decade of success.

Shriram Rayons continued to adhere to highest standards in quality and in management systems for which it was recognised by international certification bodies viz. Quality (ISO-9001:2015), Environment (ISO- 14001:2015), Occupational Health and Safety Management Systems (ISO-45001-2018), International Quality in the automobile industry (IATF 16949:2016), Forest Stewardship Council's standards (FSC COC) and sustainability standard throughout the supply chain (ISCC PLUS). The Unit participated in assessment of sustainability by independent international bodies namely ECOVADIS and CDP (Carbon Disclosure Project).

The effluent and emission control facilities with real time monitoring are maintained and continuously upgraded to comply with the norms. All efforts are on to reduce, recycle and reuse the effluents.

Despite an overall slowdown in the Chemical Sector, mainly in the first two quarters, and continued headwinds in the Agrochemical Sector, the chemical business remained relatively stable.

Two new capacities of Chloro Toluenes, commissioned by two competitors, one in Q1 and the other towards the end of Q4, further created pressure on the Unit's business.

The Unit's focus was to protect its market share by optimizing product mix strategies, continued focus on cost optimization and new derivative capacity expansion.

Defence Equipment Manufacturing business has made further progress. We are now getting out of the R&D phase and manufacturing competent prototypes. The products are being appreciated for their technology and performance.

Light Bullet Proof Vehicles (LBPV), prototyping is complete on the new Ford Ranger platform and the vehicle has performed commendably in No Cost No Commitment trials of the Indian Army. Collaboration with Ford Motor Company, USA is working well. The Company is also collaborating with RMA, Thailand (Ford's Global Export Distributor) for sourcing of the spares and vehicles in SKD condition.

The investment and technology arrangement with Zyrone Dynamics, Turkiye (ZD) is on course. The Company has so far paid three tranches for subscription of 9797 shares representing 14.04% in ZD. On its part ZD commenced development of the Minimum Viable Product of Variable Volume Concept UAV Platform, which is in an advanced stage and is expected to be ready in a couple of months.

EPS has set up a full manufacturing and fabrication facility in Kota, Rajasthan. The facility is for manufacturing of Armoured Vehicles and Containers. The Kota facility is operational and has ISO 9001, ISO 14001, ISO 45001 and UL 142 Certifications. Western Global, USA use FCP range of fuel cubes (Containers) for safe storage of Flammable & Combustible fluids. We have received an order for seven loads of fuel cubes at Kota. Four loads have been dispatched. The team from Western Global has visited our facility and was impressed with our processes and quality.

The Company and Tadiran Telecom, Israel have signed an agreement to assemble IP Phones. The assembly of such phones has commenced.

The Company is continuously improving its products and aggressively pursuing sales in India and abroad. We have started supply of UAV components to the Defence organizations and to some educational institutions. We hope to continue participating in the tenders in the future.

No material changes or commitments have occurred between the end of the financial year to which the financial statements relate and the date of this Report, affecting the financial position of the Company.

The Company has three non-material wholly owned subsidiaries, viz. Daurala Foods & Beverages Pvt. Ltd., which is not carrying on any operations presently, DCM Shriram Fine Chemicals Limited (DSFCL), incorporated in September 2021 and DCM Shriram International Limited (DSIL), incorporated in September 2022, both of which are yet to commence business. DCM Hyundai Limited is an associate company. The required information regarding the performance and financial position of the subsidiaries and associate company are given in Form AOC - I as annexure to the Annual Financial Statements for the year ended 31.03.2025. There has been no change in relationship of subsidiaries/ associate company during the year.

The Board of Directors had approved a Composite Scheme of Arrangement which provides for the merger of Lily Commercial Private Limited, a Promoter Group investment company with the Company and transfer of two business verticals of the Company, viz. Chemicals and Rayons (including Engineering Projects Section) to DSFCL and DSIL, respectively. The draft Scheme, which has been cleared by BSE and NSE as required under listing Regulations, and also approved by the shareholders and unsecured creditors of the Company in Class meetings, is presently before the National Company Law Tribunal (NCLT) for approval as required under Section 230-232 of the Companies Act.

Upon merger of the investment companies of the Promoter Group into it, Lily Commercial Private Limited has become the Holding Company of DCM Shriram Industries Limited, effective from 08.03.2024.

A copy of Annual Return for the year 2023-24, is available on the Company's web link https://dcmsr.com/ wp-content/uploads/2024/08/Annual-Return.pdf . The Annual Return for the year 2024-25 will be uploaded after filing with the Registrar of Companies in due course.

During the year 2024-25 six board meetings were held. The dates of the meetings, attendance, etc., are given in the Corporate Governance Report annexed hereto.

All the Independent Directors (IDs) have given declarations u/s 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI Listing Regulations, confirming that they meet the criteria of independence as laid down under the said Section/ Regulation.

The Directors of the Company have also confirmed that they were not disqualified to be appointed as directors as per Section 164(2) of the Companies Act, 2013 and that they have not been debarred by SEBI or any other statutory authority to hold an office of director in a company.

The Board of Directors in its meeting held on 30.05.2016 had approved a Policy on Board Diversity, recommended by the Nomination & Remuneration Committee (NRC) as required under the SEBI Listing Regulations. A copy of the same has been posted on the Company's weblink - https://dcmsr.com/wp-content/uploads/2021/04/Policv-BoardDiversitv.pdf

Appointment of directors on the Board of the Company, except nominee director, is based on the recommendations of the Nomination & Remuneration Committee. NRC identifies and recommends to the Board, persons for appointment on the Board, after considering the necessary and desirable competencies. NRC also considers positive attributes like integrity, maturity, judgement, leadership position, time and willingness, financial acumen, management experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, etc.

Independent Directors should fulfill the obligations of independence as per the Act and Regulation 25 of the SEBI Listing Regulations, 2015 in addition to the general criteria stated above. All the Independent Directors of the Company are enrolled in the Databank of IDs maintained by Indian Institute of Corporate Affairs, an entity under the Ministry of Corporate Affairs. Their registrations are renewed when due. It is ensured that a person to be appointed as a director has not suffered any disqualification under the Companies Act 2013 or any other law to hold such an office.

The directors of the Company are paid remuneration as per the Remuneration Policy of the Company, the gist of which is given under the heading 'Remuneration Policy' as part of this Report. The details of remuneration paid to the directors during the year 2024-25 are given in the Corporate Governance Report forming part of this Report.

There has been no change in the composition of the Board of Directors or KMPs during the year except that the term of office of Mrs. V. Kavitha Dutt (DIN:00139274) as an Independent Director ended on 01.02.2025, after completion of two consecutive terms of 5 years each. Considering her long association and contribution to the Company and the desirability of ensuring that the Company continues to have the benefit of Mrs. V. Kavitha Dutt's experience, the Board has appointed her as Non-executive and Non-Independent director w.e.f. 02.02.2025. Smt. Meenakshi Behara (DiN: 00289641) was appointed as an Independent Director w.e.f 02.02.2025. Their appointments were approved by the shareholders through postal ballot/ e-voting.

Shri Manoj Kumar & Smt. Urvashi Tilakdhar, Directors, being longest in office, retire by rotation pursuant to Section 152(6) of the Companies Act, 2013 at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Items are accordingly being included in the Notice for the ensuing Annual General Meeting for consideration and approval of the shareholders.

As required under the Act and the SEBI Listing Regulations, 2015, evaluation of the performance of the Independent Directors, Non-Executive Directors, Board as a whole, Executive Directors, the Chairman and the Committees during the year 2024-25 was carried out by the Board of Directors, based on the criteria laid down by the NRC in the year 2017, in the meeting held on 28.03.2025. A copy of the 'criteria for evaluation' is annexed as Annexure 2 hereto.

Based on the criteria, the Board reviewed the performance of the Board as a whole, particularly structure, quality of deliberations in the meetings, functions, performance of the management and feedback etc. The Board also reviewed the performance of the Committees, Chairman and Directors. The Board's observations are as under:

- Appreciated the all-round performance and good results during the year 2024-25.

- The Board continued to adhere to highest standards in all areas, and the performance was constructive and met the test of objectivity in achieving the goals of the Company.

- The Committees carried out their functions according to the requirements mandated under the Companies Act/ SEBI Regulations, pursuant to which they were constituted, effectively. The Board particularly appreciated the Audit Committee which met regularly and acted as a watch dog in matters concerning finance, RPTs and internal financial controls.

- The directors individually including IDs have given very valuable inputs/ contribution in achieving the goals of the Company. It was noted that the Executive Directors continued to perform with utmost responsibility in achieving the operating targets and the IDs and other directors contributed by providing valuable inputs and guidance.

- The IDs individually and collectively functioned constructively in the best interest of and beneficial to the Company and the stakeholders.

- The IDs adhered to the Code of Independence as per Schedule IV of the Act and to the restriction regarding pecuniary relationship with the Company during the period under evaluation.

The IDs in a separate meeting held on the same day i.e, 28.03.2025 prior to the Board Meeting, reviewed and evaluated the performance of non-Independent Directors.

The IDs also reviewed the quality, quantity and timeliness of flow of information between the Company management and the Board, which are necessary for the Board to effectively and reasonably perform its duties.

The performance evaluation by the Board and the Independent Directors did not find any matter requiring follow up action except the delay in generating revenue by the Engineering Projects Section.

As required under Section 134(3)(c) of the Act, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

A comprehensive and effective internal financial control system is followed by the Company at all its establishments. This is further strengthened by an internal audit process under the overall supervision of the Audit Committee of the Board. Services for internal audit are outsourced. Qualified and experienced professionals are engaged to ensure effective and independent evaluation of, inter alia, the internal financial controls.

The Audit Committee lays down the schedule for internal audit. Internal audit reports are placed before the Committee with management comments. Suggestions are implemented and reported to the Audit Committee.

Apart from the above, an effective budgeting and monitoring system is also in place. Budgets are reviewed by Audit Committee and approved by the Board. The operating results are compared and monitored with the approved budgets periodically. An Executive Committee comprising of senior management team meets every month, reviews all aspects of operations and chalks out remedial measures and strategies, regularly. Monthly operations review reports comparing budgets with actual performances are placed before the Executive Committee for internal assessment and also before the Board on a quarterly basis.

An effective communication/ reporting system operates between the Units, Divisions and Corporate Office to keep various establishments abreast of regulatory changes and ensure compliances.

To further strengthen the Internal Financial Controls and business transformation through digitization, the Company has implemented an advanced SAP S/4 HANA in all business segments, which is working well.

The particulars of loans given by the Company are given in Note no. 15 of the Standalone Financial Statements for the year ended 31.03.2025.

The Company has not made any investment or provided any guarantee covered u/s 186 of the Companies Act, 2013, during the year except surplus funds placed in liquid funds of Mutual funds on short term basis and the funds advanced to wholly owned subsidiaries viz. DCM Shriram Fine Chemicals Limited and DCM Shriram International Limited.

During the year, the Company had advanced funds for the acquisition of two properties for use by the Company to DCM Shriram International Limited, a wholly owned subsidiary. The Company also provided a Corporate Guarantee to a Bank to secure term loans sanctioned to the said wholly owned subsidiary for part financing the cost of the properties. Particulars of the advances and guarantees are given in Note No. 15 of the Standalone Financial Statements for the year ended 31.03.2025.

There has been no materially significant related party transactions between the Company and the Directors, Key Management Personnel, the subsidiaries, or the relatives except for those disclosed in the financial statements - Note No.45 of Notes to Accounts, which are at arm's length basis and not material. Accordingly, Form AOC -2 does not form part of this Report.

The Board had framed a Policy on Related Party Transactions which is revised in line with the legal requirements. A copy of the same is placed on the Company's weblink: https://dcmsr.com/wp-content/uploads/2025/02/Policv-on-Related-Partv-Transactions.pdf

Pursuant to Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, an Annual Report on CSR activities in the prescribed proforma is annexed - Annexure 3. The Company was required to spent Rs.230.40 lakh, being 2% of the average net profits of the preceding 3 years during the year under review which has been fully utilized. The CFO has confirmed to the Board that funds mandated were spent as per approval of the CSR Committee and Board.

As the Company has become one of the top 1000 companies, based on market capitalization (993) as on 31.03.2022, the Company, inter alia, was required to constitute a Risk Management Committee, comprising of Directors and Senior Personnel. Accordingly, the Board constituted a Risk Management Committee in the meeting held on 30.05.2022 and also laid down a Risk Management Policy as required under Regulation 21 of SEBI Listing Regulations, on 08.08.2022. The Committee is required to oversee the implementation of risk management measures and report to the Board through Audit Committee. The Committee met twice during the year 2024-25.

The Board of Directors in its meeting held on 30.01.2006 undertook a comprehensive review of the risk assessment and minimization procedures/ policies followed by the Company at its various operations. While taking note of the same, the Board laid down that a half yearly status report of the risk assessment and steps taken to minimize the risks be placed before the Board. Such a report in respect of all the operations of the Company is now being placed before the Board through the Risk Management and the Audit Committees.

In view of the diversified business, there are no significant elements of risk, which in the opinion of the Board may threaten the existence of the Company.

The Board of Directors while reviewing the existing risk assessment procedures, laid down a Risk Management Policy.

Details relating to deposits, covered under Chapter V of the Companies Act 2013:

i) Accepted during the year: - Nil

ii) Remained unclaimed as at the end of the year: - Rs 29,98,000/- (There is no deposit claimed but not paid)

iii) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved-

a) At the beginning of the year

b) Maximum during the year Nil

c) At the end of the year

iv) The details of deposits which are not in compliance with the requirements of Chapter V of the Act: - Nil

No significant orders have been passed by any Regulators, Courts or Tribunals during the year impacting the going concern status and Company's operations in future.

The required information as per Rule 8 (3) A, B & C of Companies (Accounts) Rules, 2014 is annexed - Annexure 4 herreto.

The Board of Directors in its meeting held on 14.08.2014 had laid down a Remuneration Policy as recommended by the Nomination & Remuneration Committee (NRC) relating to remuneration of the Directors, Key Managerial Personnel (KMP), Sr. Management Personnel (SMP) and other employees of the Company. The Remuneration Policy is in accordance with Section 178 of the Companies Act 2013 and the Rules made there under. The Policy was revised by the Board in its meeting held on 12.02.2025 on recommendations of the NRC. The Remuneration Policy is posted on the Company's weblink. https://dcmsr.com/wp-content/uploads/2025/02/Remuneration-Policv.pdf

The salient features of the Policy are given below:

The guiding principle of the Policy is that the remuneration and other terms of employment should effectively help in attracting and retaining committed and competent personnel. The remuneration packages are designed keeping in view industry practices and cost of living.

Non-executive directors are paid remuneration in the form of sitting fees for attending Board/ Committee meetings as fixed by the Board from time to time subject to statutory provisions. Presently sitting fee is Rs.60,000 per Board meeting and Rs.30,000 per Committee meeting. In addition, Non-executive Directors are paid commission on profits of up to 1% of the net profit of the Company, computed in the manner laid down u/s 198 of the Companies Act, 2013, in such amount and proportion as may be decided by the Board of Directors.

Remuneration of Executive Directors (Whole-time Directors) including Managing Director(s) is fixed by the Board of Directors on the recommendation of the NRC, subject to the approval of the shareholders. The NRC, while recommending the remuneration, considers pay and employment conditions in the industry, merit and seniority of the person and paying capacity of the Company. The remuneration, which comprises of salary, perquisites, performance-based reward/profit-based commission and retirement benefits as per Company Rules, is subject to the limits laid down under the Companies Act, 2013.

Appointment, remuneration and cessation of service of Key Managerial Personnel are subject to the approval of the NRC and Board of Directors. Appointment and cessation of service of Sr. Management Personnel are approved by the Senior Managing Director on the recommendation of the concerned Executive Director, keeping in view the Remuneration Policy.

The remuneration of other employees is fixed from time to time by the Management as per the guiding principle laid down in the Remuneration Policy and considering industry standards and cost of living. In addition to salary, they are also provided perquisites and retirement benefits as per schemes of the Company and statutory requirements, where applicable.

The information required as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to remuneration of Directors, KMP and comparisons are annexed - Annexure 5 hereto. It is affirmed that the remuneration is as per the Remuneration Policy of the Company.

Statement of particulars of the top ten employees in terms of remuneration including employees who were in receipt of remuneration which was not less than Rs.102 lakh or more per annum in aggregate during the year 2024-25 is annexed as Annexure 6 hereto.

The Audit Committee presently comprises of four members, 3 IDs, one Non-Executive Director . Shri Harjeet Singh Chopra, (ID), is the Chairman and Shri Sanjay C. Kirloskar, Shri Suman Jyoti Khaitan, and Shri S.B. Mathur (non-ID) are Members. There was no instance of the Board not accepting the recommendation of the Audit Committee.

Pursuant to Section 177 of the Companies Act 2013 and Regulation 22 of SEBI Listing Regulations, the Board of Directors, on the recommendation of the Audit Committee, adopted a Vigil Mechanism (Whistle Blower Policy). The revised Policy has been circulated among the employees and also has been put on the weblink of the Company: https://dcmsr.com/wp-content/uploads/2021/04/whistleblower-policy.pdf

The Policy provides a channel to the employees to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policies. The mechanism provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases.

During the year, the Company has not issued any share capital with differential voting rights, sweat equity or ESOP nor provided any money to the employees or trusts for purchase of its own shares.

The Company has not made any public offer of shares during the year.

As per Section 139 of the Companies Act, 2013, a firm of auditors can be appointed as Statutory Auditors for two terms of five years each. Accordingly, the shareholders in their meeting held on 08.08.2022 had reappointed M/s. B S R & Co., LLP, Chartered Accountants, Gurugram (Firm Registration No.101248W/ W100022), whose first term of 5 years expired at the conclusion of the AGM in 2022, for another term of 5 years to hold office till the conclusion of the AGM in the year 2027.

M/s Ramanath Iyer & Co., Cost Accountants, (Regn No.13848), 808, Pearls Business Park, Netaji Subhash Place, Pitampura, Delhi - 110034, who were appointed as Cost Auditors of the Company for the year 202324, submitted the Cost Audit report, due for filing on or before 06.09.2024, to the Central Government on 21.08.2024. They have been re-appointed as Cost Auditors for the year 2024-25. A resolution for ratification of their remuneration for the year 2025-26, as required under the Companies Act, 2013, forms part of the Notice convening the ensuing AGM.

The Company maintains cost records as specified by the Central Govt. under sub- section (1) of Section 148 of the Companies Act, 2013.

The Board in its meeting held on 22.08.2017 had laid down a policy on Orderly Succession for Appointments to the Board and Senior Management . The policy can be accessed on the company website through https://dcmsr.com/wp-content/uploads/2021/04/PMS.pdf

Reports on Corporate Governance and Management Discussion & Analysis are annexed - Annexure 7.

The Business Responsibility & Sustainability Report for the year 2024-25 has been placed on the website of the Company as required under Regulation 34 of SEBI (LODR) Regulations, 2015. The link to the report is: https://dcmsr.com/wp-content/uploads/2025/07/BRSR-2024-25-1.pdf

Pursuant to the “Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”, the Company constituted Internal Complaints Committees at all its workplaces. There has not been any instance of complaint reported in this regard to any of the Committees during the year. The Committees were reconstituted effective from 01.07.2023 for 3 years.

The Company periodically review the policy and submit a status report annually to the Competent Authority under Section 22 of the said Act.

Neither any application was made, nor any proceedings were pending under the IBC Code during the year.

The Company has not entered into any one-time settlement of debt during the year under review.

Applicable Secretarial Standards i.e. SS-1 and SS-2 relating to ‘Meeting of the Board of Directors' and ‘General Meetings', respectively, have been duly followed by the Company.

The Directors acknowledge the continued co-operation and support received from the Banks and various government agencies, and all our business associates.

The Directors also place on record their appreciation of the contribution made by employees at all levels. Their conduct and support are of utmost importance in achieving the Company's objectives targets.