Home  »  Company  »  DCM Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of DCM Ltd.

Mar 31, 2015

Dear Members,

The directors have pleasure in presenting this 125th Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2015.

ECONOMIC SCENARIO

The global economic environment in recent years has been challenging which coupled with slowing growth in some of the leading global economies has impacted currencies all over the world. However, despite unpredictable headwinds, the global economic recovery seems to be gaining momentum. Specifically, the recovery in the United States was stronger than expected, which provided momentum for the global economic recovery.

After a tepid start by India's economy in FY 2014-15, there was a shift to positive sentiments led by commitments from the newly elected Government at the Centre. FY 2014-15 was indeed a year of transformation and optimism for the Indian economy.

The new government has ushered in an era of hope and development, and a vision to create a robust economy for India. An initiative that has particularly galvanized the entire country is 'Make in India' led byour Hon'ble Prime Minister. This campaign is designed to transform India into a global manufacturing hub.

India's economy is in the midst of recovery with lower fiscal and current account deficit and structural reforms to boost investments. The Indian economy is expected to grow @ 7.5% in 2015-16 (as per the World Bank) and is expected to reach around 8% by 2017. While the various steps are being taken to de-clog the growth, it is expected that the government's reform agenda will spur economic growth and increase business sentiment this fiscal year.

FINANCIAL DATA Rs./Crores

Financial Year Financial Year ended March ended March 31,2015 31,2014

Profit before Interest,

Depreciation, Tax and Exceptional Item 57.67 63.85

Less: — Finance Cost 20.10 12.43

— Depreciation 24.86 11.53

Profit before Tax & Exceptional Item 12.71 39.89

Exceptional Item # - 15.50

Profit before tax 12.71 55.39

Less -Provision for tax (1.21) 19.19

Profit after tax 13.92 36.20

Add -Profit brought forward 146.76 120.41

Less- Adjustment of Depreciation 2.35 —

Profit available for appropriation 158.33 156.61

Appropriations:

Interim Dividend on equity shares 2.61 2.61

ProposedFinalDividendonequityshares 2.61 2.61

Corporate Dividend Tax 1.05 0.88

General Reserves 0.50 3.75

Balance Profit carried forward 151.56 146.76

# Compensation receivable from developer of real estate project pursuant to settlement reached in relation to residential complex of the said project.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 0.50 crore to the General Reserve out of the amount available for appropriation. After the said transfer, an amount of Rs. 151.56 crores is proposed to be retained in the Profit and Loss account.

DIVIDEND

During the financial year ended March 31, 2015, your Company has declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each, out of accumulated profits of past years, in the month of

November 2014 and the same was paid in the month of December 2014. In addition, your directors recommend a final dividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each for the financial year 2014-15. If approved, the total dividend (interim and final dividend) for the financial year 2014-15 will be Rs. 3.00 (Rupees three only) per equity share aggregating to Rs. 626.57 lacs (including Corporate Dividend Tax).

OPERATIONS OVERVIEW Textile Division

The Textile Division of the Company is located at Hisar in Haryana with a capacity of114096 Spindles. During the year under review, the production ofyarn increased by32% (approx.) to 25271 MT from 19095 MT lastyear mainly due to the successful execution of expansion project through an addition of 39168 spindles at Hisar entailing capital cost of about Rs. 105 Crores. Lower global demand especially from China, higher depreciation cost due to expansion and increase in power cost during the year resulted in lower Profit before Tax (PBT) of Rs. 3.97 Crores as against Rs. 45.25 Crores in the previous year.

IT Division

The IT Division of the Company is an established service provider for IT Infrastructure Services and Analytics operating through various offices located in India and USA.

During the year under review, the sales and other income of the Division increased to Rs. 75.54 Crores from Rs. 64.79 Crores in the last year. The Division earned Profit before Tax (PBT) of Rs. 6.44 Crores compared to Rs. 4.39 Crores in the previous year.

The increase in volumes both in India & overseas business, better margins on exports and favorable exchange rates, contributed to the improved overall performance of the Division. In addition, efforts were made to broaden the customer base and build capabilities in newer technology areas. Exports of Infrastructure services showed good growth during the year.

Investments have been made in building sales bandwidth and acquiring tools for further expanding the export services business. This should help to provide the desired impetus to the business in future.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of the business of the Company. There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2015 and the date of this Report. SCHEME OF AMALGAMATION OF DCM ENGINEERING LIMITED INTO AND WITH DCM LIMITED

During the year under review, the Board of Directors of your Company on December 8, 2014 approved the merger of DCM Engineering Limited ('Subsidiary Company') into and with your Company under a Scheme of Amalgamation (i.e. 'Scheme') under Sections 391 to 394 and other applicable provisions of the Companies Act, 1956.

The Scheme envisages that upon it becoming effective and with effect from the appointed date i.e. April 1, 2014, all assets and liabilities and the entire business of DCM Engineering Ltd. shall be transferred to and vested in the Company as a going concern. The Scheme is subject to and would become effective on receipt of all regulatory/statutory approvals. The said Scheme has been pending approvals from the concerned regulatory/statutory authorities as at March 31, 2015.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company has six (6) subsidiaries and one (1) associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 ("Act") respectively, as on March 31, 2015. There has been no material change in the nature of the business of the subsidiaries and associate companies. During the year under review, no company has become or ceased to be Company's subsidiaries, joint ventures or associate companies.

Pursuant to provisions of Section 129(3) and other applicable provisions of the Act read with Rules made thereunder, a statement containing salient features of the financial statements, performance and financial position of each ofthe subsidiaries, associates and joint venture companies in Form AOC-1 is enclosed as Annexure - A to the standalone financial statements of the Company and hence not repeated here for the sake of brevity.

Pursuant to the provisions of Section 136 of the Act, the financial statements, consolidated financial statements of the Company along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in accordance with provisions of the Companies Act, 2013 and relevant Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.

DIRECTORS

Dr. Surendra Nath Pandey, director of the Company passed away on December 23, 2014. He was 84 years old. He was Chairman of the Board of Directors of the Company from December 20, 2005 to December 19, 2011. Your Board placed on record its deep condolences on his sad demise.

Prof. Joginder Singh Sodhi has resigned from directorship of the Company with effect from February 13, 2015. Your Board placed on record its appreciation for the contributions made by Prof. Joginder Singh Sodhi during his tenure as director of the Company.

Mr. Arun Kumar Vedhera was appointed as an Additional Director with effect from June 20, 2015 and holds office upto date offorthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Companies Act, 2013 along with the requisite deposit from a member proposing the appointment of Mr. Arun Kumar Vedhera as a Director of the Company, liable to retire by rotation. Accordingly, a resolution is included in the Notice of the forthcoming 125th Annual General Meeting of the Company for seeking approval of members for his appointment as a Director of the Company, liable to retire by rotation.

Mr. Jitendra Tuli retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment as a director of the Company. Accordingly, a resolution is included in the Notice of forthcoming 125th Annual General Meeting of the Company for seeking approval of members for his appointment as a Director of the Company.

The Board of Directors of the Company in their meeting held on November 14, 2014 had appointed Mr. Jitendra Tuli as Chairman and Managing Director of the Company for a period of one year i.e. with effect from December 20, 2014 to December 19, 2015. Accordingly, a resolution is included in the Notice of the forthcoming 125th Annual General Meeting of the Company for seeking approval of members for his appointment as Managing Director of the Company. The members of the Company at 124th Annual General Meeting of the Company held on August 04, 2014 had appointed Mr. Bipin Maira, Mr. Ravi Vira Gupta, Prof. Sudhir Kumar Jain & Dr. Meenakshi Nayar, existing directors as Independent Directors of the Company to hold office for a term upto five consecutive years commencing from August 4, 2014. The aforesaid Independent Directors have submitted their Declaration of Independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they continue to meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

As required by Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, 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 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 at the end of the financial year and of the profit and 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 the Companies Act, 2013 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.

KEY MANAGERIAL PERSONNEL

The following persons are Whole-Time Key Managerial Personnel ('KMP') of the Company in terms of provisions of Section 203 of the Companies Act, 2013:

a. Mr. Jitendra Tuli — Chairman and Managing Director

b. Dr. Vinay Bharat Ram — Chief Executive Officer

c. Mr. Sumant Bharat Ram — Chief Operating & Finance Officer

d. Mr. Hemant Bharat Ram — President (Textiles)

e. Mr. Rakesh Kumar Goel — CEO, Textile Division

f. Mr. Varun Sarin — Chief of Operations & Finance,

IT Division

g. Mr. Mukesh Sharma — Company Secretary*

h. Mr. Yadvinder Goyal — Company Secretary**

*Ceased to be Company Secretary w.e.f. November 14, 2014.

**Appointed as Company Secretary w.e.f. November 15, 2014.

NUMBER OF BOARD MEETINGS

Six meetings of the Board of Directors of your Company were held during the year under review.

EVALUATION OF BOARD PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"), the Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the diversity of the Board, effectiveness of the board processes, information and functioning etc. The performances of the committees were evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees and effectiveness of the committee meetings etc. The performance of the individual directors was reviewed on the basis of the criteria such as contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

The performances of non-independent directors, Board as a whole and of the Chairman were evaluated in a separate meeting of Independent Directors after taking into account the views of executive directors and non-executive directors. INTERNAL FINANCIAL CONTROL

The Company has in place an established internal control system to ensure proper recording of financial &operational information, compliance of various internal controls and other regulatory/statutory compliances. All Internal Audit findings and control systems are periodically reviewed by the Audit Committee of the Board of Directors, which provides strategic guidance on Internal Controls.

STATUTORY AUDITORS

The term of office of M/s A.F. Ferguson & Co., Chartered Accountants, as Statutory Auditors of the Company will expire with the conclusion of forthcoming Annual General Meeting of the Company. As on commencement ofthe Companies Act, 2013, M/s A.F. Ferguson & Co., Chartered Accountants, have completed more than 10 years as Statutory Auditors of the Company.

A resolution proposing appointment of M/s BSR & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company in place of M/s A.F. Ferguson & Co., Chartered Accountants pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice of the forthcoming 125th Annual General Meeting of the Company.

The Board place on record its appreciation for the services rendered by M/s A.F. Ferguson & Co., Chartered Accountants, as the Statutory Auditors of the Company.

DIRECTORS' VIEW ON AUDITORS' OBSERVATIONS Management response to the observations of the auditors even though explained wherever necessary through appropriate notes to the Accounts is reproduced hereunder in compliance with the relevant legal provisions.

Refer 'Basis for Qualified Opinion' in Auditors' Report on Consolidated Financial Statements

Purearth Infrastructure Limited, a joint venture company, has received advances Rs. 3,431.98 lacs (Group's share in advances of joint venture are Rs. 563.35 lacs) for certain bookings of units in its Plaza 4 of Central Square Project (referred as 'said Project'). The said advances have been shown as 'Advances from customers' under 'Other Current Liabilities'. The management of the joint venture company is yet to draw up construction plans for said Project. Further, the revenue including price escalations and other recoveries in terms of the Scheme of Restructuring and understanding arrived with the booking holders of the said Project cannot be determined at this stage. Thus, the management of Joint Venture could not be able to estimate the likely losses for such bookings under the 'Plaza 4 of Central Square Project' and hence have not been provided in the financial Statement of the joint venture company. (Refer note 40 to the consolidated financial statements annexed.)

DEBT REPAYMENT

The Company has complied with its debt repayment obligation under the Scheme ofRestructuring and Arrangement (SORA) approved by the Hon'ble Delhi High Court vide its order dated October 29, 2003 under sections 391 — 394 of the Companies Act, 1956 and subsequent modification thereto vide Hon'ble Delhi High Court order dated April 28, 2011. Where such amount has not been claimed by the creditors, the same has been deposited in separate designated Bank Account(s) in scheduled bank(s).

In case an invested amount remains unclaimed and un-encashed for a period of seven years from the date it becomes due for payment, the same has been / will be transferred to the Investor Education and Protection Fund established by the Central Govt. (the relevant details of the same are uploaded on the Company's website www.dcm.in)

The investors, whose investment has remained unclaimed /un-encashed and in respect of whom a period of seven years has not lapsed from the due date as per SORA, are required to lodge their claim with the Company by surrender ofDebenture Certificates/Letter ofAllotment/un-encashed payment warrants at the registered office of the Company.

FIXED DEPOSITS

No disclosure or reporting is required in respect of deposits covered under Chapter V of the Companies Act, 2013, as there were no transactions in respect of the same during the year under review. However in respect of deposits accepted by the Company under the Companies Act, 1956, the Company has paid the fixed deposit holders in all claimed cases in terms of the provisions of SORA. The amount of unclaimed / legal cases has been deposited in a separate bank account to earmark the funds for the payment of these unclaimed / legal cases. In case a deposit remained unclaimed and un-encashed for a period of seven years from the date it became due for payment, the same has been/will be transferred to the Investor Education and Protection Fund established by the Central Govt.

RISK MANAGEMENT

There is a continuous process of identifying / managing risks through a Risk Management Process. The measures used in managing the risks are also reviewed. The risks identified by the Company broadly fall in the category of operational risk, regulatory risk, financial & accounting risk & foreign currency related risks. The risk management process consists of risk identification, risk assessment, risk monitoring & risk mitigation. During the year, measures were taken for minimization of risks and the Board was informed from time to time. In the opinion of the Board, none of the said risks which have been identified may threaten the existence of the Company.

AUDIT COMMITTEE

The Audit Committee of the Company consists of Mr. Bipin Maira, Chairman, Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Prof. Sudhir Kumar Jain. The Board of Directors of your Company has revised its terms of reference to make it in line with the requirements of Section 177 of the Companies Act, 2013 and clause 49 of the listing agreement.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of Directors of your Company has constituted a CSR Committee comprising of Mr. Ravi Vira Gupta, Chairman, Prof. Joginder Singh Sodhi and Dr. Meenakshi Nayar, as members of the committee. Pursuant to resignation of Prof. Joginder Singh Sodhi from directorship of the Company, the Board of Directors of your Company in their meeting held on February 14, 2015 has reconstituted the CSRCommittee with Mr. Ravi Vira Gupta, Chairman,

Mr. Bipin Maira and Dr. Meenakshi Nayar, as members of the Committee. This Committee is responsible for formulating and monitoring the CSR Policy of the Company. The Company's CSR Policy is available on the Company's website www.dcm.in.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) ofthe Companies Act, 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules, 2014 is enclosed as Annexure — I, and forms part of this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is enclosed as Annexure II and forms part of this report.

A statement showing details pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - IIA and forms part of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 Particulars of investment made and loans given are provided in the standalone financial statements. (Please refer to Note Nos. 13 & 14 of the standalone financial statements).

The Company, in its capacity as title holder of land at Bara Hindu Rao / Kishanganj, Delhi, in respect of which the development rights were vested with joint venture company in terms of SORA, has mortgaged the said land for loans availed by joint venture company in connection with development of real estate project on the said land. The outstanding amount of loans, on which mortgage was created, as on 31.03.2015 was Rs. 95 crores (previous year Rs. 80.75 crores)

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis. During the year, the Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The prescribed Form AOC-2 is enclosed as Annexure - III, and forms part of this Report. Your directors draw attention of members to Note 41 to the standalone financial statements which sets out related party disclosures.

EXTRACT OF ANNUAL RETURN

The details forming part of Extract of Annual Return in prescribed form MGT-9 is enclosed as Annexure- IV and forms part of this Report.

COST AUDIT

Pursuant to Section 148 of the Companies Act, 2013 and rules made thereunder, the Board of Directors have appointed M/s K C Kohli & Co., Cost Accountants, as the Cost Auditors to conduct the audit of the cost accounting records of the 'cotton textile' manufactured by the Company for the Financial Year 2015-16 at a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus Service tax and out of pocket expenses, if any. In terms of said Section 148 and rules made there under, remuneration of Cost Auditors is to be ratified by members of the Company. Accordingly, a resolution is included in the Notice of forthcoming Annual General Meeting for ratification of their remuneration by members of the Company.

SECRETARIAL AUDIT

The Board has appointed M/s Pragnya Pradhan & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year 2014-15 is enclosed herewith as Annexure - V and forms part of this Report. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark.

CORPORATE GOVERNANCE

As per Clause 49 of the listing agreements entered into with the stock exchanges, Corporate Governance Report along with Auditors' certificate thereon and Management Discussion and Analysis Report are enclosed, and form part of this report.

DISCLOSURE REQUIREMENTS

1. Details of the familiarization programme of the independent directors are available on the website of the Company at weblink: http://www.dcm.in/ pdf/Familirisation-program-for%20independe-t%20directors.pdf.

2. Policy for determining material subsidiaries of the Company is available on the website of the Company at weblink: http://www.dcm.in/pdf/ Material-subsidiary-policy.pdf

3. Policy on materiality of related party transactions and dealing with related party transactions is available on the website of the Company at weblink: http://www.dcm.in/pdf/Policy-on-related-party-transactions.pdf

4. The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns, which is avaliable on Company's website www.dcm.in. The provisions of this policy are in line with the provisions ofSection 177(9) of the Companies Act, 2013 and the revised Clause 49 of the Listing Agreements with stock exchanges.

5. The Company's Remuneration Policy is enclosed as Annexure - VI and forms part of this Report.

6. Annual Report on CSR Activities is enclosed as Annexure - VII and forms part of this report.

7. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

8. During the year under review, there were no cases reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the Company and its management.

The Directors place on record their deep appreciation of the dedication and commitment of your Company's employees at all levels and look forward to their continued support in the future as well.

For and on behalf of the Board

Sd/- Place: New Delhi Jitendra Tuli Date : June 20, 2015 Chairman and Managing Director


Mar 31, 2014

Dear Members,

The directors have pleasure in presenting this 124 Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2014.

ECONOMIC AND INDUSTRY SCENARIO

The Indian economy, with vast potential, faces many challenges. The economic landscape in 2013 continued to be under pressure with year-on- year growth in gross domestic product declining to below 5 percent, primarily accounted from agriculture and services. On the contrary, industry growth through the year remained flat. High interest rates, low policy visibility, delayed environmental clearances, issues around land acquisitions and fuel linkages, along with increasing inflation continued to impact global investor confidence in India.

During the year, the rupee depreciated to an all-time low. Towards the end of the year, certain focused measures by the government and central bank, helped to bring in some positive trends as the rupee stabilized, exports increased, current account deficit declined and project clearances were fast-tracked.

The slow GDP growth appears to have bottomed out and with the formation of new government, economic growth is expected to accelerate in the next fiscal 2014-15.

Rating agency, CRISIL has forecasted a 6% GDP growth for financial year 2014-15 compared with an expected 4.8% for financial year 2013-14. This forecast is premised on normal monsoons, continuation of the recent reform process and widely anticipated global recovery. On the downside, growth could weigh in below 5% yet again if the above assumptions do not play out.

In view of the above, the Company remains cautiously optimistic in its outlook.

FINANCIAL DATA Rs./Crores

Financial Year Financial Year ended March ended March 31, 2014 31, 2013

Profit before Interest, 63.85 66.05

Depreciation, Tax and Exceptional Item

Less: –Finance Cost 12.43 14.98

– Depreciation 11.53 10.20

Profit before Ta x & Exceptional Item 39.89 40.87

Exceptional Item # 15.50 -

Profit before tax 55.39 40.87

Less -Provision for tax 19.19 11.86

Profit after tax 36.20 29.01

Add -Profit brought forward 120.41 99.78

Add- Reversal of Corporate Dividend Tax - 0.71

Profit available for appropriation 156.61 129.50 Appropriations:

Interim Dividend on equity shares 2.61 2.61

Proposed Final Dividend on equity shares 2.61 2.61

Corporate Dividend Tax 0.88 0.87

General Reserves 3.75 3.00

Balance Profit carried forward 146.76 120.41

Balance Profit carried forward 146.76 120.41

# Compensation receivable from developer of real estate project pursuant to settlement reached in relation to residential complex of the said project.

OPERATIONS OVERVIEW

Textile Division

The Textile Division of the Company is located at Hisar in Haryana with a capacity of 75880 Spindles. During the year under review, the production of yarn increased by 9% (approx.) to 19095 MT from 17483 MT last year.

The Division earned Profit Before Tax (PBT) of Rs. 45.12 Crores as against Rs. 43.02 Crores in the previous year. Good global demand and rupee depreciation during the year contributed to higher profits.

We are pleased to inform that the expansion project of the Division through an addition of 39168 spindles at Hisar entailing capital cost of about Rs. 105 Crores is now in its final phase of completion. The Division has successfully executed the expansion project without any cost or time overrun, raising the total capacity of the Division to 115048 spindles. The expansion is with higher level of automation with latest machineries.

Besides, the TQM drive is going on apace with very good participation of employees at all levels.

IT Division

The IT Division of the Company is an established service provider for Managed IT Services operating though various offices located in India and in USA. During the year under review the sales and other income of the Division increased to Rs 64.79 Crores from Rs 45.00 Crores in the last year. The Division earned Profit before Tax (PBT) of Rs 4.39 Crores compared to Rs 1.51 Crores in the previous year. This was possible on account of increase in volumes both in India & overseas business, better margins on export business, and favourable exchange rate. On the domestic front, efforts were made to build capabilities as a result of which some new customers were added including Government department(s) and PSUs. Exports of Infrastructure services showed good growth during the year. Investments have been made in building sales bandwidth and acquiring tools for further expanding the export services business. This should help to provide the desired impetus to the offshore business in future.

DEBT REPAYMENT

The Company has complied with its debt repayment obligation under the Scheme of Restructuring and Arrangement (SORA) approved by the Hon''ble Delhi High Court vide its order dated October 29, 2003 under section 391 - 394 of the Companies Act, 1956 and subsequent modification thereto vide Hon''ble Delhi High Court order dated April 28, 2011. Where such amount has not been claimed by the creditors, the same has been deposited in separate designated Bank Account(s) in scheduled bank(s).

In case an invested amount remains unclaimed and un-encashed for a period of seven years from the date it becomes due for payment, the same has been / will be transferred to the Investor Education and Protection Fund established by the Central Govt. (the relevant details of the same are uploaded on the Company''s website www.dcm.in)

The investor whose investment has remained unclaimed /un-encashed and which became due for payment in July 2007 and onwards is required to lodge their claim with the Company by surrender of Debenture Certificates/Letter of Allotment/ un-encashed payment warrants at the registered office of the Company.

FIXED DEPOSITS

The Company has paid the fixed deposit holders in all claimed cases in terms of the provisions of SORA. The amount of unclaimed / legal cases has been deposited in a separate bank account to earmark the funds for the payment of these unclaimed / legal cases. In case a deposit amount has remained unclaimed and un-encashed for a period of seven years from the date it became due for payment, the same has been/will be transferred to the Investor Education and Protection Fund established by the Central Govt.

DIRECTORS

The Board of directors of the Company on November 13, 2013 had appointed Mr. Jitendra Tuli as Managing Director for a period of one year i.e. with effect from December 20, 2013 to December 19, 2014. His appointment is placed for the approval and ratification of shareholders at the Annual General Meeting scheduled to be held on August 4, 2014.

Sh. Naresh Kumar Jain, director of the Company passed away on December 8, 2013. He was 78 years old and had worked as Managing Director of the Company for more than one decade. Your Board placed on record its deep condolences on his sad demise. Prof. Joginder Singh Sodhi retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment as a director of the Company. His re-appointment is placed before the shareholders of the Company at the ensuing Annual General Meeting.

Fur ther, in terms of Sections 149 & 161 of the Companies Act, 2013, Dr. M eenakshi Nayar has been appointed as an additional director of the Company by the Board in its meeting held on May 28, 2014, and holds office up to date of ensuing Annual General Meeting. A resolution is proposed for her appointment as director of the Company at the ensuing Annual General Meeting. Pursuant to Section 149 of the Companies Act, 2013, your directors are seeking appointments of Mr. Bipin Maira, Mr. Ravi Vira Gupta, Prof. Sudhir Kumar Jain & Dr. Meenakshi Nayar as Independent Directors of the Company for a term of 5 y e a r s .

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India and forms part of this Annual Report.

DIRECTORS'' VIEW ON AUDITORS'' OBSERVATIONS Management response to the observations of the auditors even though explained wherever necessary through appropriate notes to the Accounts is reproduced hereunder in compliance with the relevant legal provisions. Reference para Emphasis of Matter in Auditors'' Report on Standalone Annual Financial Statement

The "Scheme of Restructuring and Arrangement", sanctioned by the High Court of Delhi as further modified vide its Order dated April 28, 2011 (hereinafter referred to as SORA) provides that it is required to be implemented as a whole and in totality. The effect of the financial and business restructuring, as envisaged in the above Scheme, has already been considered in preparing the accounts by the Company during the previous years except for the "leasehold definitive agreement" has not become effective pending compliance with certain conditions contained therein and therefore, the corresponding transaction has not been effected in the accounts. The management has confirmed to the Auditors that the conditions contained in the "leasehold definitive agreement" would be complied with and would not result in any adverse impact on the financials of the Company or on the successful implementation of the SORA. The Auditors'' opinion is not qualified in respect of this matter (refer note 30 of notes to Standalone Financial Statements annexed). Refer ‘Basis for Qualified Opinion'' in Auditors'' Report on Consolidated Financial Statements

Purearth Infrastructure Limited, a joint venture company, has received advances Rs. 3,730.08 lacs (Group''s share in advances of joint venture are Rs. 612.26 lacs) for sale bookings of units in its Plaza 4 of Central Square Project (referred as ‘said Project''). The said advances have been shown as ‘advances from customers'' under other current liabilities. The management of the joint venture company is yet to draw up construction plans for said Project. Further, the revenue including price escalations and other recoveries in terms of the Scheme of Restructuring and understanding arrived with the booking holders of the said Project cannot be determined at this stage. Thus, the likely losses for such bookings under the ‘Plaza 4 of Central Square Project'' could not be estimated and hence have not been provided in the financial Statement of the joint venture company. (Refer note 40 to the consolidated financial statements annexed.)

DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 As required under Section 217(2AA) of the Companies Act, 1956, your Directors state that:

- While preparing Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent which gives a true and fair view of affairs of the Company and of the profit or loss of the Company;

- The Directors 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;

- The Directors have prepared accounts on a going concern basis.

DIVIDEND

During the financial year ended March 31, 2014, your Company has declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each in the month of November 2013 and it was paid in the month of December 2013. In addition, your directors recommend a final dividend of Rs.1.50 (Rupee one and fifty paisa only) per equity share of Rs 10 each for the financial year 2013-14. If approved, the total dividend (interim and final dividend) for the financial year 2013-14 will be Rs.3.00 (Rupees three only) per equity share aggregating to Rs. 6.10 crores (including Dividend Distribution Tax). Dividend paid for the previous Financial Year 2012-13 was Rs. 3.00 (Rupees Three only) per equity share of Rs. 10 each.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs.3.75 crores to the General Reserve out of the amount available for appropriation. An amount of Rs 146.76 crores is proposed to be retained in the Profit and Loss account.

PERSONNEL

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, and forming part of the Report is annexed hereto.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The details as required under the Companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988 are annexed.

SUBSIDIARY COMPANIES

A statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies is attached to the accounts. The Central Govt. has issued a General Circular No: 2/2011 dated February 8, 2011 directing that the provision of section 212 shall not apply in relation to subsidiaries of those companies which comply with certain disclosure requirements. In terms of the said general exemption granted by the Central Government under Section 212(8) of the Companies Act, 1956 and as per resolution passed by the Board of Directors at their meeting held on February 12, 2014, the Audited Statements of Accounts and the Auditors'' Reports thereon for the year ended March 31, 2014 along with the Reports of the Board of Directors of the Company''s 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. These documents are also made available on the website of the Company www.dcm.in.

However, as per the requirement of Accounting Standard AS-21 notified in the Companies (Accounting Standards) Rules, 2006, Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries.

AUDIT COMMITTEE

The Audit Committee of the Company consists of Mr. Bipin Maira, Chairman,Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Prof. Sudhir Kumar Jain. The Boardof Directors of your Company has revised its terms of reference to make it in linewith the requirements of Section 177 of the Companies Act, 2013 and clause 49of the listing agreement.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR

COMMITTEE)

In terms of requirements of Section 135 of the Companies Act, 2013 and rules issued there under, the Board of Directors of your Company has constituted a CSR Committee comprising of Mr. Ravi Vira Gupta, Chairman, Prof. Joginder Singh Sodhi and Dr. Meenakshi Nayar, as members of the committee. This Committee is responsible for formulating and monitoring the CSR Policy of the Company.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors of your Company has renamed and reconstituted itsexisting ''Compensation Committee'' as ''Nomination and Remuneration Committee'' and have also revised its terms of reference to make it in line withthe requirements of Section 178 of the Companies Act, 2013 and clause 49 ofthe listing agreement. At present, the ''Nomination and Remuneration Committee'' comprised of Mr. Bipin Maira, Chairman, Prof. Sudhir Kumar Jain and Mr. Ravi Vira Gupta, as members of the Committee. This Committee is entrusted with the power and responsibility by the Boardof identifying and recommending to the Board appointment & removal of Directors, Key Managerial Personnel and Senior Management Personnel of the Company and to formulate and monitor their Remuneration Policy. Company Secretary of the Company acts as Secretary to all these Committees.

AUDITORS

The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered Accountants,

th

retire at the conclusion of the ensuing 124 Annual General Meeting and have confirmed their eligibility & willingness to accept office, if re-appointed. Your Board recommends their re-appointment as statutory Auditors of the Company from the conclusion of 124th Annual General Meeting to the conclusion of the 125th Annual General Meeting of the Company.

COST AUDIT

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed cost audit for cotton textile manufactured by the Company. Now, as required under Section 148 of the Companies Act, 2013, the Board of Directors have re- appointed M/s K C Kohli & Co., Cost Accountants, as the Cost Auditors for cotton textile manufactured by the Company for the Financial Year 2014-15 at a remuneration of Rs. 50,000/-(Rupees fifty thousand only). In terms of said Section 148 and rules issued there under, remuneration of Cost Auditors is to be ratified by members of the Company. Accordingly, a resolution is included in the Notice of ensuing Annual General Meeting for ratification of their remuneration by members of the Company. The Cost Audit report for the financial year 2013-14 will be filed with the Central Government as per statutory timeline. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Corporate Governance Report, Management Discussion & Analysis and Auditors'' certificate regarding compliance of Corporate Governance are made part of the Annual Report.

SOCIAL RESPONSIBILITY STATEMENT

The Textile Division of the Company is running a School upto 10th standard in its campus at Hisar, Haryana. There are approx 450 students on the rolls in different classes.

ACKNOWLEDGEMENTS

The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the Company and its management. The Directors place on record their deep appreciation of the dedication and commitment of your Company''s employees at all levels and look forward to their continued support in the future as well.

For and on behalf of the Board Sd/- Jitendra Tuli Chairman and Managing Director

Place: New Delhi Date : May 28, 2014


Mar 31, 2013

The directors have pleasure in presenting their 123rd Annual Report alongwith Audited Financial Statements of the Company for the year ended March 31, 2013

FINANCIAL DATA Rs./Crores Financial Year Financial Year ended March ended March 31, 2013 31, 2012

Profit/(Loss) before Interest, 66.05 16.20

Depreciation, Tax and Exceptional Item Less: –Finance Cost 14.98 19.76

– Depreciation 10.20 9.90

Profit/(Loss) before Tax & Exceptional Item 40.87 (13.46)

Exceptional Item # 18.00

Profit/(Loss) before tax 40.87 4.54

Less -Provision for tax 11.86 (0.91)

Profit/(Loss) after tax 29.01 5.44

Add – Profit/(Loss) brought forward 99.78 99.28

Add– Reversal of Corporate Dividend Tax 0.71 0.71

Profit available for appropriation 129.50 105.43

Appropriations:

Interim Dividend on equity shares 2.61

Proposed Final Dividend on equity shares 2.61 4.34

Corporate Dividend Tax 0.87 0.71

General Reserves 3.00 0.60

Balance Profit carried forward 120.41 99.78

# Compensation receivable from developer of real estate project pursuant to settlement

reached in relation to flatted factory complex of the said project.

OPERATIONS OVERVIEW Textile Division

The Textile Division of the Company is located at Hisar in Haryana. It is an ISO9001 certified unit. During the year under review, the sales and other income of the division has increased to Rs. 345.97 Crore from Rs. 293.34 Crores last year recording a growth of 17.94%. This year there is Profit before Tax of Rs. 43.02 Crores as compared to loss of Rs. 28.41 Crores in previous year. The said loss in the previous year was due to margins turning negative on account of steep fall in cotton yarn prices and high cost of cotton inventory procured in cotton season during 2010-11. The division has performed well during the year because of strong cotton yarn prices in export market, operational efficiency and control of operational costs during the financial year.

The division has decided to expand its production capacity by addition of 39168 spindles at Hisar with capital cost of about Rs. 105 Crs. Total capacity of the division after the said expansion will be 115416 spindles. The Project is proposed to commence production from February 2014 and full production by September 2014. The said expansion will be with higher automation with latest machineries. The proposed project would help to increase efficiency/ productivity and quality.

Besides expanding its export market by introducing value added products, the Division is also focusing to broaden the domestic customer base by developing new customers.

A Special Leave Petition (SLP) filed by the Haryana Urban Development Authority (HUDA) against the order of Division Bench of Hon''ble Punjab and Haryana High Court passed in favour of the Company on the resumption of 250 acres of the Company''s land by the State of Haryana, was dismissed by the Hon''ble Supreme Court on March 22, 2013. In view of this dismissal order, this matter has attained finality in favour of the Company.

IT Division

The IT division of the Company is an established service provider for Managed IT Services globally. The Division has over a decade''s expertise in Systems and Storage Administration and has been supporting customers to optimize their IT investments through its highly skilled and certified pool of engineers and cost-effective remote management capabilities, backed by robust processes. The Division has enlarged its product portfolio by adding the services in the area of Virtualization, Messaging, Networking etc.

During the year under review the sales and other income of the IT Division increased to Rs 45.00 Crores from Rs 40.17 Crores last year, with Profits before Ta x of Rs 1.51 Crores compared to Rs 0.38 Crores in the previous year. This was possible mainly on account of increase in export volume and better margins. On the domestic front, efforts were made to build capabilities as a result of which some new customers were added including Government department(s) and PSUs. Exports of Infrastructure services showed good growth during the year. Investments have been made in building sales bandwidth and acquiring tools for further growing the export services business. This should help to provide the desired impetus to the offshore business in future.

DEBT REPAYMENT UNDER SCHEME OF RESTRUCTURING AND ARRANGEMENT (SORA)

The Company has complied with its debt repayment obligation under the Scheme of Restructuring & Arrangement (SORA) approved by the Hon''ble Delhi High Court vide its order dated October 29, 2003 under section 391 - 394 of the Companies Act, 1956 and subsequent modification thereto vide Hon''ble Delhi High Court order dated April 28, 2011. Where such amount has not been claimed by the creditors, the same have been deposited in separate designated Bank Account (s) in scheduled bank(s).

In case, an invested amount remained unclaimed and un-encashed for a period of seven years from the date they became due for payment, the same have been/will be transferred to the Investor Education and Protection Fund established by the Central Govt.

The investor whose investment remained unclaimed /un-encashed and became due for payment during the month of June 2006 and onwards are required to lodge their claim with the Company by surrender of Debenture Certificates/ letter of allotment /un-encashed payment warrants at the registered office of the Company.

FIXED DEPOSITS

The Company has paid the fixed deposit holders in all claimed cases in terms of the provisions of the Scheme of Restructuring and Arrangements approved by the Hon''ble High Court of Delhi and as modified vide order dated April 28, 2011. The amount of unclaimed / legal cases has been deposited in a separate bank account to earmark the funds for the payment of these unclaimed / legal cases. In case, a deposit amount remained unclaimed and un-encashed for a period of seven years from the date they became due for payment, the same have been/will be transferred to the Investor Education and Protection Fund established by the Central Govt.

DIRECTORS

The Board of directors of the Company on November 9, 2012 had appointed Mr. Jitendra Tuli as Managing Director for a period of one year i.e. with effect from December 20, 2012 to December 19, 2013. His appointment is placed for the approval and ratification of shareholders at the Annual General Meeting scheduled to be held on July 19, 2013.

Mr. Naresh Kumar Jain retires by rotation in the ensuing Annual General Meeting and being eligible, offers himself for reappointment as director of the Company. His re-appointment is placed before the shareholders of the Company at the ensuing Annual General Meeting.

Prof Sudhir Kumar Jain, who has been appointed as additional director of the Company by the Board in its meeting dated November 9, 2012 under section 260 of the Companies Act, 1956, holds office upto the ensuing Annual General Meeting. The Company has received a notice from a member of the Company under section 257 of the Companies Act, 1956 signifying his intention to propose him as a candidate for the office of director, and accordingly a resolution is proposed for his re-appointment as director of the Company, liable to retire by rotation in the ensuing Annual General Meeting.

Mr. Ravi Vira Gupta, who has also been appointed as additional director of the Company by the Board in its meeting dated May 27, 2013 under section 260 of the Companies Act, 1956, holds office upto the ensuing Annual General Meeting. The Company has received a notice from a member of the Company under section 257 of the Companies Act, 1956 signifying his intention to propose him as a candidate for the office of director, and accordingly a resolution is proposed for his re-appointment as director of the Company, liable to retire by rotation in the ensuing Annual General Meeting.

DIRECTORS'' VIEW ON AUDITORS'' OBSERVATIONS Management response to the observations of the auditors even though explained wherever necessary through appropriate notes to the financial statements is reproduced hereunder in compliance with the relevant legal provisions. Reference para (i) of Basis for Qualified Opinion in the Auditors'' Report The business of the Company was re-organized under a Scheme of Arrangement sanctioned by the High Court of Delhi, New Delhi vide its order dated April 16, 1990, effective from April 1, 1990 under the provisions of Sections 391- 394 of the Companies Act, 1956 and all units of the Company existing at that time were re-organized under four separate companies, including this company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars Limited. There are various issues relating to sales tax, income tax, etc., arising/arisen out of the re-organization arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and Memorandum of Understanding between the companies involved, when the liabilities/benefits are finally determined. The final liability, when determined, would in case of the Company, be limited only to one third of the total liability (note 40 to the notes to Financial Statements annexed). Reference para (ii) of Basis for Qualified Opinion in the Auditors'' Report Due to non availability of financial statements of the joint venture company, for the year ended March 31, 2013 or within 6 months thereof, the disclosures required to be made in terms of Accounting Standard (AS) - 27 "Financial Reporting of interest in joint venture" for the current year have been made on the basis of joint venture''s latest available financial statements for the year ended March 31, 2012. However, the Company''s share of Assets, Liabilities, Income and Expenses, etc. (without elimination of the effect of transactions between the Company and the joint venture) has been determined on the basis of Company''s shareholding in Joint Venture as of March 31, 2013. (note 44 of notes to Financial Statements annexed). Further, in absence of required information of joint venture company, the same have not been considered for consolidation in the Consolidated Financial Statements (note 44 of notes to Consolidated Financial Statements annexed). Reference para Emphasis of Matter in the Auditors'' Report The "Scheme of Restructuring and Arrangement", sanctioned by the High Court of Delhi as further modified vide its Order dated April 28, 2011 (hereinafter referred to as SORA) provides that it is required to be implemented as a whole and in totality. The effect of the financial and business restructuring, as envisaged in the above Scheme, has already been considered in preparing the accounts by the Company during the previous years except for the "Leasehold Definitive Agreement" has not become effective pending compliance with certain conditions contained therein and therefore, the corresponding transaction has not been effected in the accounts. The management has confirmed to the Auditors that the conditions contained in the "Leasehold Definitive Agreement" would be complied and would not result into any adverse impact on the financials of the Company or on the successful implementation of the SORA. The Auditors'' opinion is not qualified in respect of this matter (refer note 30 of notes to Financial Statements annexed)

DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 As required under Section 217(2AA) of the Companies Act, 1956, your Directors state that:

- While preparing Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent which gives true and fair view of affairs of the Company and of the profit or loss of the Company;

- The Directors 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;

- The Directors have prepared accounts on a going concern basis.

DIVIDEND

During the financial year ended March 31, 2013, your company has declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each in the month of November 2012 and it was paid in the month of December 2012. In addition, your directors recommend a final dividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each for the financial year 2012-13. If approved, the total dividend (interim and final dividend) for the financial year 2012-13 will be Rs. 3.00 (Rupees three only) per equity share aggregating to Rs. 6.08 Crores (including Dividend Distribution Tax). Dividend paid for the previous Financial Year 2011-12 was Rs. 2.50 (Rupees Tw o and fifty paisa only) per equity share of Rs. 10 each.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs 3.00 Crores to the General Reserve out of the amount available for appropriation. An amount of Rs 120.41 crores is proposed to be retained in the Statement of Profit and Loss.

PERSONNEL

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, and forming part of the Report is annexed hereto.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The details as required under the Companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988 are annexed.

SUBSIDIARY COMPANIES

A statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies is attached to the financial statements. The Central Govt. has issued a General Circular No: 2/2011 dated February 8, 2011 directing that the provision of section 212 shall not apply in relation to subsidiaries of those companies which comply with certain disclosure requirements. In terms of the said general exemption granted by the Central Government under Section 212(8) of the Companies Act, 1956 and as per resolution passed by the Board of Directors at their meeting held on February 14, 2013, the Audited Statements of Accounts and the Auditors'' Reports thereon for the year ended March 31, 2013 along with the Reports of the Board of Directors of the Company''s 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. These documents are also made available on the website of the Company www.dcm.in.

However, as per the requirement of Accounting Standard AS-21 notified in the Companies (Accounting Standards) Rules, 2006, Consolidated Financial S tatements presented by the Company includes the financial information of its subsidiaries.

AUDIT COMMITTEE

The Audit Committee of the Company consists of Mr. Bipin Maira, Chairman,

Prof. Sudhir Kumar Jain, Dr. Surendra Nath Pandey and Mr. Jitendra Tuli.

AUDITORS

The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered

Accountants, retire at the conclusion of 123rd Annual General Meeting and are eligible for re-appointment. Your Board recommends their reappointment.

COST AUDIT

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed cost audit of the Company''s Textile division. The Board of Directors had appointed M/s. K. C. Kohli & Co, Cost Accountants as Cost Auditors of the Company for the financial year 2012-13. The Central Government had approved the appointment of M/s. K. C. Kohli & Co as the Cost Auditors of the Company. The Cost Audit report would be filed with the Central Government as per statutory timeline.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Corporate Governance Report, Management Discussion & Analysis and Auditors'' certificate regarding compliance of Corporate G overnance are made part of the Annual R eport.

SOCIAL RESPONSIBILITY STATEMENT

The Textile Division of the Company is r unning a School upto 10th standard in its campus at Hissar, Haryana. There are approx 435 students on the roll in different classes.

ACKNOWLEDGEMENTS

The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the Company and its management. The Directors place on record their deep appreciation of the dedication and commitment of your company''s employees at all levels and look forward to their continued support in the future as well.

For and on behalf of the Board

Sd/-

Place:New Delhi Jitendra Tuli

Date : May 27, 2013 Chairman and Managing Director


Mar 31, 2012

The Directors have pleasure in presenting their 12th Annual Report along with Audited Financial Statements of the Company for the .year ended March 31, 2012.

FINANCIAL DATA Rs./Crores

Financial Year Financial Year

ended ended

March 31, 2012 March 31, 2011

Profit/(Loss) before Interest and 16.20 62.50 Depreciation and Tax(PBDIT)

Less: - Finance Cost 19.76 14.29

- Depreciation 9.90 9.57

Profit/(Loss) before Tax & Exceptional (13.46) 38.64 Item

Exceptional Item* 18.00 -

Profit/(Loss) before tax 4.54 38.64

Less - Provision for tax (0.91) 12.88

Profit/(Loss) after tax 5.44 25.76

Add-Profit/(Loss) brought forward 99.28 75.41

Add - Debenture Redemption - 5.76 Reserve Written Back

Add - Reversal of Corporate Dividend Tax 0.71 -

Profit available for appropriation 105.43 106.93 Appropriations:

Proposed Dividend on equity shares 4.34 4.34

Corporate Dividend Tax 0.71 0.71

General Reserves 0.60 2.60

Balance Profit carried forward 99.78 99.28

#Compensation receivable from developer of real estate project pursuant to settlement reached in relation to fixated factory complex of the said project.

OPERATIONS OVERVIEW Textile Division

The Textile Division of the Company is located at Hisar in Haryana. It is an IS09001 certified unit. During the year under review, the turnover of the Division has increased to Rs. 293.34 Crores from Rs. 271.64 Crores last year. However, the Division has incurred a loss of 28.27 Crores during the year due to margins turning negative on account of steep fall in cotton yarn prices and high cost of cotton inventory procured during last year cotton season. The Textile Industry as a whole witnessed an unexpected downturn in demand during the year, resulting in reduction of cotton and yarn prices.

The volatility of the market has increased considerably in the recent past and both domestic and international market scenario has been evolving day by day. In order to cope with this dynamic market, the Textile Division has been adopting market focused approach and has been constancy enhancing its internal skill sets to position itself, so that it can grab the opportunities and face the market challenges.

During the year the cotton yam capacity of the Division was increased to 78660 Spindles from 74436 spindles. The Division is also upgrading and modernizing its machineries and equipments to enhance efficiency and reduce costs. Many old machineries have been replaced during the past two years. This process will be continued in next year also.

Besides expanding its export market by introducing value added products the Division is also focusing to broaden the domestic customer base by developing new customers. IT Division IT Division of the Company is an established player in data center management business with specialization in managing different systems, storage devices and databases. The Division provides highly qualified Unix, VMware, messaging & storage skills and data center management capability at competitive price. It caters primarily to organizations with a high IT dependency and large Unix & Virtualization based systems. The Data Centre Management Business is expected to open future opportunities for the division in providing specialized data center services to the fast growing small and medium enterprises in domestic market.

The domestic operations have continued to grow at par with the previous year, in spite of some reversal trend in the third quarter linked with some order terminations. The turnover of the division was adversely affected because the US onsite business of the division has underperformed during the year on account of sluggish market conditions, especially in the latter half of the year.

During the year, the Division made a breakthrough with an export order which should help reorient the future offshore business thrust and supplement the onsite business also.

DEBT REPAYMENT UNDER SCHEME OF RESTRUCTURING AND ARRANGEMENT (SORA)

As per the Scheme of Restructuring & Arrangement (SORA) approved by the Hon'ble Delhi High Court vide its order dated October 29, 2003 under Section 391 - 394 of the Companies Act, 1956 and subsequent modification thereto vide Honble Delhi High Court order dated April 28, 2011, the Company has complied with its debt repayment obligation and where such amount has not been claimed by the creditors, the same have been deposited in separate designated Bank Account (s) in scheduled bank(s).

Any investor whose investment is remained unclaimed /tin-encased may lodge their claim with the company by surrender of Debenture Certificates/ un-encased payment warrants at the registered office of the Company.

FIXED DEPOSITS

The Company has paid the fixed deposit holders in all claimed cases in terms of the provisions of the Scheme of Restructuring and Arrangements approved by the Hon'ble High Court of Delhi and as modified vide order dated April 28, 2011 The amount of unclaimed / legal cases has been deposited in a separate bank account to earmark the funds for the payment of these unclaimed / legal cases.

DIRECTORS

The Board of directors of the Company on November 9, 2011 had reappointed Mr. Naresh Kumar Jain as Managing Director for a period of one year i.e. with effect from December 20, 2011 to December 19, 2012. His appointment is placed for the approval and ratification of shareholders at the Annual General Meeting to be held on July 14, 2012.

Mr. Jitendra Tuli, retires by rotation in the ensuing Annual General Meeting and, being eligible, offers himself for reappointment as Director of the Company. His re-appointment is placed before the shareholders of the Company at the ensuing Annual General Meeting.

Mr. Bipin Maira, who has been appointed as additional director of the Company by the Board in its meeting dated November 9, 2011 under section 260 of the Companies Act, 1956, holds office up to the ensuing Annual General Meeting. The Company has received a notice from a member of the Company under section 257 of the Companies Act, 1956 signifying his intention to propose him as a candidate for the office of Director, and accordingly a resolution is proposed for his reappointment as Director of the Company, liable to retire by rotation.

DIRECTORS' VIEW ON AUDITORS' OBSERVATIONS

Management response to the observations of the auditors even though explained wherever necessary through appropriate notes to the Accounts is reproduced hereunder in compliance with the relevant legal provisions.

Reference Para 5(iv) of the Auditors Report

Due to non availability of financial statements of the joint venture company, for the year ended March 31, 2012 or within 6 months thereof, the disclosures required to be made in terms of Accounting Standard (AS) - 27 "Financial Reporting of interest in joint venture" for the current year have been made on the basis of joint ventures latest available financial statements for the year ended March 31, 2011. However, the Company's share of Assets, Liabilities, Income and Expenses, etc. (without elimination of the effect of transactions between the Company and the joint venture) has been determined on the basis of Company's shareholding in Joint Venture as of March 31, 2012. (note 44 of notes to Financial Statements annexed). Further, in absence of required information of joint venture Company, the same have not been considered for consolidation in the Consolidated Financial Statements (note 44 of notes to Consolidated Financial Statements annexed).

Reference Para 5(v) of the Auditors Report

The business of the Company was re-organized under a Scheme of Arrangement sanctioned by the High Court of Delhi, New Delhi vide its order dated April 16, 1990, effective from April 1, 1990 under the provisions of Sections 391-394 of the Companies Act, 1956 and all units of the company existing at that time were re-organized under four separate companies, including this company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Siel Limited.

There are various issues relating to sales tax, income tax, etc., arising/arisen out of the re-organization arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and Memorandum of Understanding between the companies involved, when the liabilities/benefits are finally determined. The final liability, when determined, would in case of the Company, be limited only to one third of the total liability (note 40 of notes to Financial Statements annexed).

DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217

As required under Section 217(2AA) of the Companies Act, 1956 your Directors state that;

- While preparing Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent which gives true and fair view of affairs of the Company and of the profit or loss of the Company;

- The Directors 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;

- The Directors have prepared accounts on a going concern basis.

DIVIDEND

Your directors are pleased to recommend a dividend of Rs. 2.50 (25%) per equity shares of Rs 10 each aggregating to Rs. 4.34 Crores on paid up equity capital of the company for the financial year 2011-12, which if approved at the ensuing Annual General Meeting, will be paid to all those member (s) whose name appear in the register of members or beneficial owner(s) as provided by the depositories as on June 29, 2012.

PERSONNEL

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, and forming part of the Report is annexed hereto.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The details as required under the Companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988 are annexed.

SUBSIDIARY COMPANIES

A statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies is attached to the accounts. The Central Govt, has issued a General Circular No: 2/2011 dated 8-02-2011 directing that the provision of section 212 shall not apply in relation to subsidiaries of those companies which comply with certain disclosure requirements.

In terms of the said general exemption granted by the Central Government under Section 212(8) of the Companies Act, 1956 and as per resolution passed by the Board of Directors at their meeting held on February 11, 2012, the Audited Statements of Accounts and the Auditors' Reports thereon for the year ended March 31, 2012 along with the Reports of the Board of Directors of the Company's 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. These documents are also made available on the website of the Company www.dcm.in.

However, as per the requirement of Accounting Standard AS-21 notified in the Companies {Accounting Standards) Rules, 2006, Consolidated Financial Statements presented by the Company includes the financial information of its subsidiaries.

AUDIT COMMITTEE

The Audit Committee of the Company consists of Mr. Jitendra Tuli, Chairman, Prof. Joginder Singh Sodhi, Dr. Surendra Nath Pandey and Mr. Bipin Maira.

AUDITORS

The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered Accountants, retire at the conclusion of 122nd Annual General Meeting and are eligible for re-appointment. Your Board recommends their reappointment.

COST AUDIT

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed cost audit of the Company's Textile division. The Board of directors had appointed M/s. K. C. Kohli & Co, Cost Accountants as Cost Auditors of the Company for the financial year 2011-12. The Central Government had approved the appointment of M/s. K. C. Kohli & Co as the Cost Auditors of the Company. The Cost Audit report would be filed with the Central Government as per statutory timeline.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Corporate Governance Report, Management Discussion & Analysis and Auditors' certificate regarding compliance of Corporate Governance are made part of the Annual Report.

SOCIAL RESPONSIBILITY STATEMENT

The Company is running two Educational Institutions viz DCM Boys Sr. Sec. School and DCM Girls Sr. Sec. School. Both Schools cater to the lower income strata of the society. The Schools are recognized and affiliated to the Central Board of Secondary Education. There are approximately 900 students on the roll in both the schools in different classes. Last year these Schools have been shifted in New School Building which is futuristic in nature with all modern facilities. The Textile Division of the Company is also running a School up to 10th standard in its campus at Hissar, Haryana. There are approx 425 students on the roll in different classes. Last year 16 students of 10th Standard were placed in the merit list of Haryana Board of School Education (HBSE).

ACKNOWLEDGEMENTS

The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the company and its management.

The Directors place on record their deep appreciation of the dedication and commitment of your company's employees at all levels and look forward to their continued support in the future as well.

For and on behalf of the Board

Sd/-

Place : New Delhi JITENDRA TULI

Date : May 28, 2012 Chairman

 
Subscribe now to get personal finance updates in your inbox!