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

Directors Report of DCM Ltd.

Mar 31, 2016

DIRECTORS’ REPORT

The directors have pleasure in presenting this 126th Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2016.

ECONOMIC SCENARIO

The year was marked by an economic slow-down with demand continuing to be sluggish and the rural economy coming under stress due to a below-normal monsoon and unseasonal rains. The international market also faced headwinds in terms of sluggish economies, geo-political issues and currency volatility in some markets.

However, a decade-low slump in oil prices, a major drain on India’s import bill, gave the desired boost to the governments foreign exchange reserves. Inflation and current account deficit levels were maintained below the guidance targets. It provided the much required momentum to the key macro indicators of the Indian economy in the year 2015-16.

The government has taken several initiatives like ‘Ease of Doing Business’, fresh investments in the roads and railways sectors, revival of 50 airports, ‘Smart City’ development, urban development, encouraging startups and skill development etc. The impact of most of these measures can only be gauged over a period of time and may not get reflected in the economic numbers immediately and they must hence be interpreted more in terms of laying a foundation for future growth.

India is a bright spot in a depressed global landscape. The Indian economy is on a steady growth path. The consequent increase in private consumption is likely to continue through 2016, making it possible for India to sustain its leading position as the largest fast-growing economy.

FINANCIAL DATA Rs. / Crores

Financial Year ended March

31, 2016

Financial Year ended March 31, 2015

Profit before Interest, Depreciation, Tax and Exceptional Item

69.14

57.67

Less: - Finance Cost - Depreciation

32.56

36.40

20.10

24.86

Profit before Tax

0.18

12.71

Less -Provision for tax

(3.11)

(1.21)

Profit after tax

3.29

13.92

Add - Profit brought forward

151.56

146.76

Less - Adjustment of Depreciation

-

2.35

Less — Adjustment for amalgamation

7.96

-

Profit available for appropriation

146.89

158.33

Appropriations:

Interim Dividend on equity shares

2.61

2.61

Proposed Final Dividend on equity shares

-

2.61

Corporate Dividend Tax

0.53

1.05

General Reserves

-

0.50

Balance Profit carried forward

143.75

151.56

TRANSFER TO RESERVES

No amount is proposed to be transferred to the General Reserve out of the amount available for appropriation.

DIVIDEND

During the financial year ended March 31, 2016, 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 November 2015 and the same was paid in December 2015. Your directors do not recommend the final dividend for the financial year 2015-16. The interim dividend already paid will be considered as final dividend for the financial year 2015-16.

OPERATIONS OVERVIEW Textile Division

The Textile Division of the Company is located at Hisar in Haryana with a capacity of 114096 Spindles. During the year under review, the production of yarn increased by 13% (approx.) to 28490 MT from 25271 MT last year mainly due to the increase in production capacity and ongoing TQM activities on improvements etc. Lower global demand especially from China, increase in wages in the State and high volatility of local currency during the year restricted the Profit before Tax (PBT) to Rs. 6.65 Crores in the financial year 2015-16.

Engineering Division

Pursuant to sanction of Scheme of Amalgamation of DCM Engineering Ltd into & with DCM Ltd. by Hon’ble Delhi High Court vide its order dated May 16, 2016, the Engineering Business of erstwhile DCM Engineering Limited held under its Unit ‘DCM Engineering Products’ stood vested with the Company as going concern from the appointed date of April 1, 2014 and identified as ‘Engineering Division’ of the company.

The said Unit was set up as a Grey Iron Foundry in 1977 with a capacity of 17,000 MTPA (Metric Tons Per Annum). The capacity of this foundry was increased to 35,000 MPTA & 50,000 MTPA in 1994-95 & 2005-06 respectively. Recently, this capacity has been further increased to 72,000 MTPA, making it one of the leading foundries in India, in the segment of automotive castings.

The Engineering Division is supplying castings across all segments in the automotive market: car, multi-utility vehicle, tractor, light commercial vehicle, heavy commercial vehicle and earth moving equipment.

During the year, the Division made total dispatch of 40,544 MT (previous year 47,338 MT). The volume continued to remain low primarily due to lower supplies to the tractor industry which constitutes a major portion of the sales volume of the Division. It was due to low demand in tractor segment on account of poor monsoon in two consecutive years which affected the agri sector, both in terms of income and sentiment.

However, the volume growth in the tractor industry is likely to improve in financial year 2016-17 due to expected normal monsoon besides strong government support in budget for improvement in agricultural productivity and adoption of improved agricultural practices.

The losses during the year were due to continued lower volume, under-recovery of fixed overheads and reduction made in margins to retain market share due to intensive competition by new entrants supplying at lower rate(s).

The continued focus on process improvements and manufacturing techniques across all areas of operations has helped the Division to maintain cost effectiveness.

The sales volume of the Division is expected to increase in the medium and long-term with the commercial supplies of new development items as well as positive growth expected in auto industry on account of healthy economic outlook, finance penetration, investment in roads infrastructure and new launches by original equipment manufacturers.

IT Division

The IT Division of the Company is an established service provider for IT Infrastructure management, networking, Analytics and Cloud related services operating through its offices located in India and USA.

During the year under review, the sales and other income of the Division was Rs. 65.50 crores compared to Rs. 75.54 crores in the previous year. The Profit before Tax (PBT) was Rs. 5.73 crores compared to Rs. 6.44 crores in the previous year.

The said decrease in PBT of around 13% was mainly on account of reduction in the US operations precipitated by certain order closures. The export business however performed better and the Division was able to increase the customer base and build capabilities in newer technology areas.

Investments have been made in building sales bandwidth, acquiring tools for further expanding the export business and broadening the customer portfolio. This should help to insulate operations and provide the desired impetus to the business in future.

MATERIAL CHANGES AND COMMITMENTS

Pursuant to sanction of Scheme of Amalgamation of DCM Engineering Limited (‘Subsidiary company’/‘transferor company’) into & with DCM Limited (‘Holding company’/‘transferee company’) with effect from the appointed date of April 1, 2014 by Hon’ble Delhi High Court vide its order dated May 16, 2016 which has become effective from May 28, 2016 (i.e. effective date), DCM Engineering Limited ceased to exist from the said effective date. In terms of the Scheme the said Engineering Business of DCM Engineering Ltd held under its Unit namely ‘DCM Engineering Products’ is identified as ‘Engineering Division’ of the Company.

There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2016 and the date of this Report.

CHANGES IN SHARE CAPITAL

Pursuant to sanction of Scheme of Amalgamation (‘Scheme’) of DCM Engineering Limited (‘subsidiary company’/‘transferor company’) into and with your Company by Hon’ble Delhi High Court vide its order dated May 16, 2016, 1,50,49,988 equity shares held by the Company in erstwhile DCM Engineering Limited stand cancelled. In terms of said Scheme the Company has allotted 12,98,712 equity shares of Rs. 10/- each fully paid-up to other shareholders of DCM Engineering Limited on May 30, 2016, including allotment of 12,98,702 equity shares in aggregate to entities viz. M/s Aggressar Leasing and Finance Pvt. Ltd and M/s Midopa Holdings Pvt. Ltd., forming part of ‘Promoters and Promoter Group’ of the Company.

As a result the total shareholding of ‘Promoters and Promoters Group’ has increased to 90,66,584 equity shares of Rs. 10 each fully paid up representing 48.54% of the paid up equity capital of the Company.

Further, the issued and subscribed capital of the Company has increased to Rs. 18,67,77,490 and paid-up equity capital increased to Rs. 18,67,46,315 (excluding calls in arrears of Rs. 31,175).

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES

As on April 1, 2015, the Company had six (6) subsidiaries and one (1) associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively.

However, consequent to amalgamation of erstwhile DCM Engineering Limited (‘material subsidiary’) with the Company under a Scheme of Amalgamation as sanctioned by Hon’ble Delhi High Court vide its order dated May 16, 2016 and its becoming effective on May 28, 2016, at present, the Company has five (5) subsidiaries and one (1) associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively. There has been no material change in the nature of the business of the subsidiaries and associate company.

During the year under review, no other company has become or ceased to be Company’s subsidiary, joint venture or associate company.

Pursuant to provisions of Section 129(3) and other applicable provisions of the Companies Act, 2103 read with Rules made there under, a statement containing salient features of the financial statements, performance and financial position of each of the 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 Companies Act, 2103, 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

Mr. Arun Kumar Vedhera has resigned from the directorship of the Company with effect from May 29, 2016. Your Board placed on record its appreciation for the contributions made by him during his tenure as director of the Company.

Mr. Jitendra Tuli has resigned from the positions of Chairman & Managing Director of the Company and has been relieved from his duties by the Board of Directors of the Company with effect from January 29, 2016. Mr. Tuli however continues on the Board of the Company in his capacity as non-executive director of the Company.

As per recommendations of the Nomination and Remuneration Committee, the Board of Directors in their meeting held on January 29, 2016 have appointed Dr. Vinay Bharat Ram as an Additional Director on the Board with effect from January 29, 2016 and also as Managing Director of the Company subject to the approval of members and other necessary approval(s) w.e.f. January 30, 2016, on payment of remuneration and on other terms and conditions as approved by the Board, for a period of three years. Dr. Vinay Bharat Ram was also appointed as Chairman of the Board of Directors of the Company.

The members of the Company have also approved the appointment of Dr. Vinay Bharat Ram as Director as well as Managing Director of the Company through a recently conducted Postal Ballot.

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company, in their meeting held on May 30, 2016, have appointed :

i. Mr. L Lakshman, Dr. Raghupati Singhania and Mr. Chandra Mohan as Additional Directors on the Board of the Company with effect from May 30, 2016.

ii. Mr. L Lakshman, Dr. Raghupati Singhania and Mr. Chandra Mohan as Independent Directors of the Company, under Section 149 of the Companies Act, 2013, for a term of five consecutive years with effect from May 30, 2016 subject to the approval of the shareholders of the Company.

Necessary resolutions for seeking approval of members for their appointment as independent directors of the Company have been included in the Notice of forthcoming 126th Annual General Meeting of the Company.

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 126th Annual General Meeting of the Company for seeking approval of members for his appointment as a director of the Company.

All the Independent Directors of the Company have given declaration(s) and have confirmed that they meet the criteria of independence as provided in the 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 & Managing Director*

b. Dr. Vinay Bharat Ram - Chairman & Managing Director**

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. Yadvinder Goyal - Company Secretary

* Ceased to be Chairman & Managing Director of the Company w.e.f. January 29, 2016.

** He was designated as KMP in his capacity as CEO of the Company till 28.01.2016 and thereafter appointed as Chairman & Managing Director of the Company w.e.f. January 30, 2016.

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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 performance of the committees was 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 committee meetings etc.

The performance of the individual directors was reviewed on the basis of the criteria such as the 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 was 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. During the year, the Company has taken steps to review and document the adequacy and operating effectiveness of internal controls.

STATUTORY AUDITORS

M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W), were appointed as Statutory Auditors of the Company from the conclusion of 125th Annual General Meeting (AGM) till the conclusion of 130th Annual General Meeting of the Company, subject to ratification of their appointment by the members at every intermittent AGM of the Company.

Accordingly, a resolution for ratification of their appointment as Statutory Auditors of the Company has been included in the Notice of forthcoming 126th Annual General Meeting of the Company.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.

DIRECTORS’ VIEW ON AUDITORS’ OBSERVATIONS

Management response to the observations of the statutory 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. 3,368.46 lacs (Group’s share in advances of joint venture are Rs. 552.76 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

In terms of the Scheme of Restructuring 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, the Company has complied with its debt repayment obligation under SORA including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a ‘No Lien/Designated Account’ with scheduled banks.

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 of Debenture Certificates/Letter of Allotment/un-encashed payment warrants at the registered office of the Company.

FIXED DEPOSITS

In respect of deposits accepted by the Company in the past 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.

No disclosure or reporting is required in respect of deposits covered under Chapter V of the Companies Act, 2013, as the Company has not accepted any deposit after the commencement of the Companies Act, 2013.

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. Risks identified by the Company broadly fall in the category of operational risk, regulatory risk, financial & accounting risk and 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

At present, the Audit Committee of the Company consists of Mr. Bipin Maira, Chairman, Mr. Ravi Vira Gupta, Mr. L Lakshman, Prof. Sudhir Kumar Jain and Dr. Meenakshi Nayar, as members of the committee. The terms of reference of the Audit Committee are in line with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

At present, the CSR Committee of the Company consists of Dr. Vinay Bharat Ram, Chairman, Mr. Ravi Vira Gupta, Mr. Jitendra Tuli 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) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - I, and forms part of this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of 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. 12 & 14 of the standalone financial statements).

Pursuant to the approval given by the members, the Company in its capacity as title holder of land at Bara Hindu Rao / Kishanganj, Delhi (Project land), 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 in connection with development of real estate project on the said land by joint venture company and also by a body corporate who has been developing the real estate project along with the said joint venture company. The outstanding amount of loans, on which mortgage was created, as on 31.03.2016 was Rs. 193 crores (previous year Rs. 95 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.

The prescribed Form AOC-2 is enclosed as Annexure - III, and forms part of this Report. Your directors draw attention of members to Note No. 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 For Financial Year 2015-16

The Board of Directors had appointed M/s K C Kohli & Co., Cost Accountants (Firm Registration Number 100541), as Cost Auditors for financial year 2015-16 for audit of cost accounting records of ‘Cotton Textile’ manufactured by the Company at a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus service tax & out-of-pocket expenses, if any. Members of the Company have also approved their aforesaid remuneration.

However, consequent to sanction of Scheme of Amalgamation (i.e. ‘Scheme’) of DCM Engineering Limited into and with your Company by Hon’ble Delhi High Court, the Engineering business of DCM Engineering Ltd under its Unit namely ‘DCM Engineering Products’ stand vested with the Company as going concern form the appointed date of April 1, 2014 and identified as ‘Engineering Division’ of the Company. The said Cast Iron Unit namely ‘DCM Engineering Products’ is covered under ambit of Cost Audit as prescribed under of Section 148 of the Companies Act, 2013. Due to the same, the Board of Directors of the Company at its meeting held on May 30, 2016 have appointed:

i. M/s. V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Cost Auditors, for financial year 2015-16, for audit of Cost Accounts pertaining to Cast Iron Unit of the Company namely ‘DCM Engineering Products’ located at Ropar, Punjab at a remuneration of Rs. 1,25,000/- (Rupees one lac and twenty five thousand only) plus service tax & out-of-pocket expenses, if any; and

ii. M/s V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company, for financial year 2015-16, at a remuneration of Rs. 60,000/-(Rupees sixty thousand only) plus service tax & out-of-pocket expenses, if any.

For Financial Year 2016-17

The Board in its meeting held on May 30, 2016 has approved the following appointments:

i. M/s K C Kohli & Co., Cost Accountants (Firm Registration Number 100541), as Cost Auditors, for financial year 2016-17, for audit of cost accounting records of the ‘Cotton Textile’ manufactured by the Company at a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus service tax & out-of-pocket expenses, if any;

ii. M/s. V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Cost Auditors, for financial year 2016-17, for audit of Cost Accounts pertaining to Cast Iron Unit of the Company namely ‘DCM Engineering Products’ located at Ropar, Punjab at a remuneration of Rs. 1,25,000/- (Rupees one lac and twenty five thousand only) plus service tax & out-of-pocket expenses, if any; and

iii. M/s V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company, for financial year 2016-17, at a remuneration of Rs. 60,000/-(Rupees sixty thousand only) plus service tax & out-of-pocket expenses, if any.

In terms of Section 148 of the Companies Act, 2013 and rules made there under, remuneration of Cost Auditors as stated above is to be ratified by members of the Company. Accordingly, suitable resolutions have been included in the Notice of forthcoming 126th Annual General Meeting for ratification of remuneration payable to Cost Auditors, for financial years 2015-16 & 2016-17, by members of the Company.

SECRETARIAL AUDIT

The Board has appointed Mrs. Pragnya Parimita Pradhan, Companies Secretary in wholetime practice, Proprietor of M/s. Pragnya Pradhan & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year 2015-16 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

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 available on Company’s website www.dcm.in. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

For DCM Limited

Sd/-

Place : New Delhi Dr. Vinay Bharat Ram

Date : May 30, 2016 Chairman and Managing Director


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


Mar 31, 2011

The Directors have pleasure in presenting their 21st Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2011.

FINANCIAL DATA

Rs./Crores

Financial Year Financial Year ended March ended March 31.2011 31, 2010

Profit/(Loss) before Interest and 61.94 27.75 Depreciation and Tax (PBDIT)

Less: – Interest 13.73 7.72

– Depreciation 9.57 7.84

Exceptional Item - 46.66

Profit/(Loss) before tax 38.64 58.85

Less -Provision for tax 12.88 (6.85)

Profit/(Loss) after tax 25.76 65.70

Add –Profit/(Loss) brought forward 75.41 (14.57) Add –Debenture Redemption Reserve

Written Back 5.76 24.28

Profit/(Loss) available for appropriation 106.93 75.41 Appropriations

Proposed Dividend on equity shares 4.34 -

Corporate Dividend Tax 0.71 -

General Reserves 2.60 -

Balance Profit carried forward 99.28 75.41



OPERATIONS OVERVIEW Textile Division

The Textile Division of the company is located at Hisar in Haryana. It is an ISO9001 certified unit with a cotton yarn capacity of 74436 spindles. During the year under review, the turnover of the division has increased to Rs. 271.83 Crores from Rs. 202.25 Crores last year recording a growth of 34.4% (approx). The division has performed well because of strong cotton yarn prices, operational efficiency and control of operational cost during the financial year. The restrictions imposed by the Government of India on export of cotton yarn in the last quarter of the financial year, has hampered the volume growth of the division. Besides expanding its export market by introducing value added products the Division is also focusing to broaden the domestic customer base by developing direct customers. During the year, the division has initiated modernization projects of its plant to enhance efficiency and add further value to its products.

IT Division

The domestic operations have shown a healthy growth due to maturity of business associations and flow of recurring orders from large domestic IT players. The division is an established player in data center management business with specialization in managing different systems, storage devices and databases. This 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.

However, the Operating Profit of the division was adversely affected because the US onsite business of the division has underperformed during the year on account of extraordinary employee payouts, payment against past settlements, exceptional attritions and lower fresh order booking since order of major customers is put on hold.

DEBT REPAYMENT UNDER SCHEME OF RESTRUCTURING AND ARRANGEMENT (SORA)

As per the Scheme of Restructuring & Arrangement (SORA) approved by the Honble Delhi High Court vide its order dated October 29, 2003 under Section 391 - 394 of the Companies Act, 1956 and subsequent modification thereto vide 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).

REDEMPTION OF DEBENTURES

During the year, pursuant to the discharge of liability of 16% Partly Convertible Debentures (PCDs), IFCI Ltd., acting as Trustee for the said PCDs has released securities created in their favour. Any investor whose investment in said PCDs remained unclaimed /un-encashed may lodge their claim with the company by surrender of Debenture Certificates/ 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 as per provisions of the Scheme of Restructuring and Arrangements approved by Honble Delhi High Court 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 the Company on October 29, 2010 had reappointed Mr. Naresh Kumar Jain as Managing Director for a period of one year i.e. with effect from December 20, 2010 to December 19, 2011. His appointment shall be placed for the approval and ratification of shareholders at the Annual General Meeting to be held on July 15, 2011.

Prof. Joginder Singh Sodhi, 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 Annual General Meeting for the financial year 2010-11.

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 4(iv) of the Auditors Report

Due to non availability of financial statements of the joint venture company, for the year ended March 31, 2011 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, 2010. However, the Companys 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 Companys shareholding in Joint Venture as of March 31, 2011. (Note 17 of Notes to Accounts in Schedule 13 of Accounts 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 1 of Notes to Accounts in Schedule 13 of Consolidated Accounts annexed).

Reference para 4(vi) 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 12 of Notes to Accounts in Schedule 13 of Accounts 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 2010-11, 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 July 8, 2011.

After transfer of Rs 260 Lacs to Reserves the balance in Profit & Loss Account of Rs 9928 lacs is carried to the Balance Sheet

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 January 31, 2011, the Audited Statements of Accounts and the Auditors Reports thereon for the year ended March 31, 2011 along with the Reports of the Board of Directors of the Companys Subsidiaries have not been annexed. The Company will make available these documents upon request by any member of the Company interested in obtaining the same. These documents will also be made available in 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 and Dr. Surendra Nath Pandey.

AUDITORS

The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered Accountants, retire at the conclusion of 121st 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 Companys Textile division. The Board of directors had appointed Mr. Vipin Maini, Cost Accountant as Cost Auditors of the Company for the financial year 2010-11. The Central Government vide its letter dated July 5, 2010 had approved the appointment of Mr. Vipin Maini as the Cost Auditor of the Company. The cost audit report 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 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 recognised and affiliated to the Central Board of Secondary Education; there are 917 students on the roll in both the schools in different classes. 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 upto 10th standard in its campus at Hissar, Haryana. There are approx 600 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 companys 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 Surendra Nath Pandey Date:May 25, 2011 Chairman


Mar 31, 2010

The Directors have pleasure in presenting their 120th Annual Report alongwith Audited Accounts of the Company for the year ended March 31, 2010.

FINANCIAL DATA Rs./Crores

Financial Year Financial Year ended March ended March 31, 2010 31, 2009

Profit/(Loss) before Interest and Depreciation and Tax (PBDIT) 27.74 22.86

Less: - Interest 7.72 7.51

- Depreciation 7.84 8.22

Exceptional Item 46.66 -

Profit/(Loss) before tax 58.84 7.13

Less -Provision for tax (6.85) 1.06

Profit/(Loss) after tax 65.69 6.07

Add -Profit/(Loss) brought forward (14.57) (20.64) Add -Debenture Redemption Reserve

Written Back 24 28

Profit/(Loss) carried to the Balance Sheet 75.40 (14.57)

OPERATIONS OVERVIEW Textile Division

The Textile Division of the company is located at Hisar in Haryana. It is a ISO9001 certified unit with a cotton yarn capacity of 74436 spindles. During the year under review, the production of yarn increased to 15827 MT from 14888 MT last yeat recording a growth of 6.31% (approx) in volume. The Division earned profit before tax of Rs. 19.84 Crores as against Rs. 6.88 Crores in the previous year with a bottom line growth of 188%. The Profitability is increased because of operational efficiency and picking up of demand leading to strong yarn prices during the second half of the financial year. The division is now exporting its product to around 25 countries. Efforts are being made to expand the export market by introducing some value added products in the niche segment and penetrate more into domestic market by developing direct customers. During the year, the division has initiated modernization projects of its plant to enhance efficiency and add further value to its products.

IT Division

After the widespread economic volatility and uncertainty over the ptevious years, some semblance of stability returned in the corporate world towards the end of last year. The IT industty is expected to stabilize and return to growth from 2010 onwards. Despite the ptessure in the global markets, especially USA and Europe the division was able to grow its onsite operations and establish its India centric businesses. Operational Profitability of the division has improved despite pressure on rates & consequently margins. However, the net profit was affected advetsely due to advetse foreign exchange impact of Rs 68 Lacs during the year as against favorable impact of Rs 137 Lacs during the previous year.

The domestic IT Infrastructure setvices have shown a healthy growth during the year due to the Customet associations with most large IT Service providers have matuted now and regular orders are being received. The remote support facility is now fully opetational and caters to clients both in the USA and India.

The division has also established itself in data centet management business with specialization in managing different systems, storage devices and databases. This is expected to open future opportunities for the division in providing specialized data center services to the fast growing small and medium enterprises in India.

ONE TIME SETTLEMENT OF DUES OF UTI

During the year, DCM Ltd, DCM Engineering Ltd and 4 promoter group companies have agreed for One Time Settlement (OTS) of dues of UTI (now

succeeded by Specified undertaking of UTI (SUUTI) and UTI Mutual Fund (UTIMF)}. The Company has made full and final payment of said OTS dues of UTI and has been issued no dues certificate(s). Consequent to the said settlement interest liabilities of Rs. 46.66 Crores accrued in the books have been written back during the year and shown as an exceptional item in the books of accounts.

REDEMPTION OF DEBENTURES

The redemption/ repayments of 16% Partly Convertible Debentures (PCDs) ate being made in accordance with the provisions contained in the Scheme of Restructuring and Arrangement (SORA) approved by the Honble High Court of Delhi as may be modified. The outstanding dues of the$e PCD holders aggregating to Rs. 29.81 Crs (approx) comprising of principal and interest would be paid as per said SORA as may be modified by court, (tefet to note 3.4 of Notes to accounts in schedule 13 of Accounts annexed). Pursuant to redemption of dues of 19.5% Non Convertible Debentures during last financial year 2008-09, the unclaimed/un-encashed amount with respect of the said 19.5% Non Convertible Debentures were deposited in a separate no-lien Bank account opened in the name of State Bank of Patiala, being the Debenture Trustees. Any investor whose investment in 19.5% NCDs remained unclaimed /un-encashed may lodge their claim at the registered office of the Company and/or to the Debenture Trustees.

FIXED DEPOSITS

The Company Law Board (CLB) had passed an order dated September 10, 1998 rescheduling the repayments to fixed deposit holders, which now constitutes part of Scheme of Restructuring and Arrangement approved by Honble High Court. The Company has paid all the fixed deposit holders other than unclaimed/ legal cases aggregating to Rs. 15.96 lacs in tetms of the provisions of the Scheme of Restructuring and Arrangements approved by the Honble High Court of Delhi as may be modified, (refer to note 3.4 of Notes to accounts in schedule 13 of Accounts annexed).

The said 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 the Company on October 28, 2009 had reappointed Mr. Naresh Kumar Jain as Managing Director for a period of one year i.e. with effect from December 20, 2009 to Decembet 19, 2010. His appointment shall be placed for the approval and ratification of shareholders at the AGM to be held on July 30, 2010.

Dr. Surendra Nath Pandey, retires by rotation in the ensuing Annual General Meeting and, being eligible, offers himself for reappointment as Directot of the company. His re-appointment is placed before the shateholdets of the company at the Annual Genetal Meeting for the financial year 2009-10.

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 4(iv) of the Auditors Report

Due to non availability of financial statements of the joint venture company, for the year ended March 31, 2010 or within 6 months thereof, the disclosures required to be made in terms of Accounting Standatd (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, 2009. However, the Companys 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 Companys shareholding in Joint Venture as of March 31, 2010. (Note 17 of Notes to Accounts in Schedule 13 of Accounts annexed). Furrher, in absence of required information of joint venture Company, the same have not been considered for consolidation in the Consolidated Financial Statements (Note 1 of Notes to Accounts in Schedule 13 of Consolidated Accounts annexed).

Reference para 4(vi) 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 12 of Notes to Accounts in Schedule 13 of Accounts 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 Accountingrecords 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

The Directors did not propose any dividend for the year under report, keeping in view the requirement to plough back the funds for internal growth / closure of liabilities under SORA.

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. In terms of approval granted by the Central Government undet Section 212(8) of the Companies Act, 1956, the Audited Statements of Accounts and the Auditors Reports thereon for the year ended March 31, 2010 along with the Reports of the Board of Directors of the Companys Subsidiaries have not been annexed. The Company will make available these documents upon request by any member of the Company interested in obtaining the same. However, as 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. JitendraTuli, Chairman, Prof. Joginder Singh Sodhi and Dr. Surender Nath Pandey.

AUDITORS

The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered Accountants, retire at the conclusion of 120,h Annual General Meeting and are eligible for re-appointment. Your Board recommends their reappointment.

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 Senior Secondary and DCM Girls Senior Secondary Schools, which cater to the lower income strata of the society. The schools are recognised and affiliated to the Central Board of Secondary Education; there are 994 students on the rolls in both the schools in different classes. The Textiles Division of the Company is also running a school upto 10,h standard in the campus at Hissar. There are 550 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 companys employees at all levels and look forward to their continued support in the futute as well.

For and on behalf of the Board

Sd/-

Surender Nath Pandey

Chairman

Place: New Delhi

Date : May 28, 2010

Find IFSC