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Notes to Accounts of DCM Ltd.

Mar 31, 2016

(ii) The Company has issued one class of equity shares having at par value of Rs. 10 each per share. Each holder of equity shares is entitled to one vote per share with a right to receive per share dividend declared by the Company. In the event of liquidation of the Company, holder of equity shares will be entitle to receive remaining assets of the Company after distribution of all preferential amount. The distribution will be in proportion to the number of shares held by shareholder.

* Term loans from banks include:

- Term loans aggregating Rs. 9,810.23 lacs (Previous year: Rs. 11,302.48 lacs) are secured by first charge along with the charge created for availing cash credit, overdraft and working capital demand loan facilities described in note 7, on existing as well as future block of movable assets and an equitable mortgage by deposit of title deeds of land admeasuring 129.47 acres and all the immovable assets, both present and future, pertaining to the Textile Division at Hissar. The term loan carries a floating interest rate ranging between 6.10%-9.10% (net of TUF subsidy) per annum. Rs. 84.98 lacs repayable in 4 quarterly installments, Rs. 620.25 lacs repayable in 11 quarterly installments, Rs. 410.00 lacs repayable in 12 quarterly installments and Rs. 8,695.00 lacs repayable in 28 quarterly installments.

- Rs. 1,142.20 lacs secured by way of first pari passu charge on the fixed assets of the Company’s Engineering division, both present and future, including equitable mortgage of Engineering division’s factory land and building measuring 71 Acre- 07K-18M and second pari passu charge on the entire current assets A of the Company, both present and future. The term loan carries a floating interest rate ranging between 11.85%-12.50% per annum and is repayable in 55 equal monthly installments of Rs. 58.30 lacs each and 1 installment of Rs. 35.25 lacs commencing from April 2013.

- Rs. 1,687.00 lacs secured by way of first pari passu charge on the fixed assets of the Company’s Engineering division, both present and future, including equitable mortgage of Engineering division’s factory land and building measuring 71 Acre- 07K-18M and second pari passu charge on the entire current assets A of the Company, both present and future. The term loan carries a floating interest rate ranging between 12.05%-12.65% per annum and is repayable in 63 monthly installments commencing from January 2015.

- Rs. 86.55 lacs (Previous year: Rs. 49.39 lacs) relate to assets purchased under hire purchase/financing arrangements with banks and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. The loans carry an interest rate ranging between 9.50%-13.50% per annum.

A Current assets has a meaning as per the terms of the related agreement and without considering the changes in definition of “current” included in Schedule III of the Companies Act, 2013.

** Rs. 35.00 lacs (Previous year: Rs. 53.22 lacs) relate to assets purchased under hire purchase/financing arrangements and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. The loans carry an interest rate ranging between 9.50%-13.50% per annum.

*** Rs. 2,000.00 lacs secured by way of extensions of pledge of 100% equity shares of Teak Farms Private Limited (TFPC) and 100% equity shares of Juhi Developers Private Limited (enterprises over which Key Managerial Personnel have significant influence). The term loan carriers a floating interest rate ranging between 13.20%-13.50% per annum and is repayable in two equal installments of Rs. 1,000 lacs each, payable at the end of 18 months and 24 months respectively from the date of first disbursement on 4 March 2015.

There is no continuing default as on the balance sheet date in repayment of loans and interest thereon.

* Loans repayable on demand from banks include

- Cash credit/overdraft and working capital demand loan facilities relating to Textile Division at Hissar aggregating Rs. 12,495.13 lacs (Previous year : Rs. 11,919.10 lacs) and other non-fund based facilities from a bank, are secured by way of hypothecation of stocks / stores and book debts, both present and future. These are further secured by equitable mortgage of land admeasuring 129.47 acres and all immovable assets, both present and future, and first charge, ranking pari-passu with the charge created for availing term loans as described in note 4, by way of hypothecation of existing as well as future block of movable assets pertaining to the Division.

- Cash credit facilities relating to IT Division, aggregating Rs. 183.58 lacs (Previous year :Rs. 42.80 lacs) and other non-fund based facilities from a bank, are secured by way of first charge/hypothecation of inventories, book debts and other assets of the Division (both present and future), and by way of first charge on office property at Hyderabad. The above facility is further secured by way of first charge created / to be created on other fixed assets of the Division.

- Cash credit/ overdraft and working capital demand loans facilities relating to the Company’s Engineering division aggregating to Rs. 6,483.93 lacs secured by first pari passu charge by way of hypothecation of entire stocks of raw material, work in process, semi-finished goods and finished goods, consumable stores and spares and such other movables including book debts, bills, whether documentary or clean, both present and future and second pari passu charge on all fixed assets, both present and future, including mortgage of factory’s land and building located at village Asron, Hadbast No. 418, Tehsil Balachaur District Hoshiarpur, Punjab, measuring 71 Acre- 07K-18M together with all buildings, plant and machinery, erections, godowns and constructions of every description which are standing, erected or attached or shall at any time hereafter during the continuance of the security hereby constituted be erected or attached and standing or attached thereto.

- Overdraft facility of Rs. 991.21 lacs relating to the Company’s Engineering division is secured by land and building located in Kodukanthangal Village and Serkadu Village, Katpadi Sub-Registration District, Vellore Registration District, Vellore District, Tamil Nadu measuring 39.02 acres and land and building located in Rail Mazra Village, Tehsil Balachaur, Distt Shaheed Bhagat Singh Nagar, Punjab measuring 4.02 acres.

1. Amalgamation of companies

a) Nature of business: DCM Engineering Limited was engaged in the business of supplying castings across all segments in automotive market. The Company had 75.06% of the voting power of DCM Engineering Limited.

b) DCM Engineering Limited (also referred to as Transferor company or “DEL”) has been amalgamated with the Company with effect from appointed date i.e. April 1, 2014 in terms of the scheme of amalgamation (“the Scheme”) sanctioned by the Hon’ble High Court of Delhi vide their order dated May 16, 2016 and pursuant thereto all assets, liabilities, duties and obligations of DEL, have been transferred to and vested in the Company retrospectively with effect from April 1, 2014. The Scheme has become effective on May 28, 2016 (“Effective Date”) on filing of the certified copy of the said Order with the Registrar of Companies, New Delhi.

Pursuant to the Scheme coming into effect, all the equity shares held by the Company in DCM Engineering Limited shall stand automatically cancelled and remaining shareholders of DCM Engineering Limited holding fully paid equity shares shall be allotted 20 fully paid up shares of Rs. 10 each in the Company for every 77 fully paid up shares of Rs. 10 each held in the share capital of DCM Engineering Limited. The resultant shares to be issued have been disclosed as “share capital pending allotment” in the Standalone Balance Sheet as at March 31, 2016.

Further, the impact of profit for the year ended March 31, 2015, pertaining to erstwhile DCM Engineering Limited has been included by way of an adjustment to opening balance of Reserves and surplus of the Company for the year ended March 31, 2016.

c) The amalgamation has been accounted for under the “pooling of interests” method as prescribed by Accounting Standard (AS-14) specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Accordingly, the assets, liabilities and reserves of DEL as at April 1, 2014 have been taken over at their book values and in the same form.

Difference between the amounts recorded as investments of the Company and the amount of share capital of the DEL has been adjusted in the General reserve and Surplus in statement of profit and loss.

Accordingly, the amalgamation has resulted in transfer of assets, liabilities and reserves in accordance with the terms of the Scheme at the following summarized values:

Defined benefit plans

Gratuity: These are unfunded schemes, the present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognize each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

2. In terms of the Scheme of Restructuring and Arrangement approved by the Delhi High Court vide its order dated October 29, 2003 under section 391-394 of the Companies Act, 1956 (Act) and subsequent modification thereto vide Delhi High Court order dated April 28, 2011 (hereinafter referred to as SORA), the Company as envisaged there under has:

a) entered into definitive agreement on February 16, 2004 with Purearth Infrastructure Limited (PIL), a co-promoted company, for sale of development rights in freehold and leasehold land at Bara Hindu Rao/Kishanganj for a total consideration of Rs. 28,820 lacs (includes Rs. 3,400 lacs on account of leasehold land out of which Rs. 2,400 lacs is subject to certain minimum profits being earned by PIL from the leasehold land). The status of these agreements is as under:

- In terms of the Freehold Definitive Agreement dated February 16, 2004, the Company had, during the year 2003-04, recognized the sale of development rights to PIL in freehold land at Bara Hindu Rao for a consideration of Rs.14,449.92 lacs (excluding the outstanding of Rs.10,962.08 lacs against the sale of rights aggregating Rs. 39,567 lacs in the Previous years).

- In terms of the “Leasehold Definitive Agreement” (“LDA”) dated February 16, 2004, during the previous year, the Company had recognized proportionate revenue from sale of development rights in leasehold land with respect to area of leases restored/converted pursuant to substantially completion of its obligation to get the leases restored/converted from leasehold to freehold and PIL has agreed to release the consideration in terms of said Agreement and also relinquish the condition of minimum profit being earned by PIL from the Leasehold land. During the current year, for the remaining lease(s), the Company has completed its obligation for restoration/conversion and/or relieved from such obligation and accordingly, the Company has recognized proportionate income of Rs. 1,289.52 lacs (Previous year Rs. 2,110.51 lacs) from sale of development rights in the said land with respect to area of leases restored/converted and/or where the company has been relieved from such condition of restoration/conversion in the current year and corresponding costs of Rs. 379.26 lacs (Previous year Rs. 620.74 lacs) has been charged to the Statement of Profit and Loss and reflected under “Change in inventories of finished goods, work-in-progress and land (for development)” in note 23.b.

Pursuant to the above, in terms of the SORA and the definitive agreements referred to as above, all rights and obligations with respect to development of freehold land and leasehold land have been vested with PIL including the obligation towards advances received by the Company in the previous years against sale of flats on installment payment basis.

b) The Company has in the previous years accounted for the impact of financial restructuring, resulting in rescheduling/ waiver of interest/ principal, including the modification of security terms, if any, with regard to partly convertible debentures, non-convertible debentures, loans from Financial Institutions and certain inter corporate deposits as envisaged in the SORA.

After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations 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. Aggregate of amount so deposited as at the year-end is Rs. 91.83 lacs (Previous year: Rs.213.02 lacs).

3. Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for in the financial statements aggregate Rs. 195.00 lacs (Previous year: Rs. 4.78 lacs).

4. During the financial period 1992-93, the Company revalued the lands pertaining to the Company’s unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was re-organized, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited to the revaluation reserve, already adjusted in previous years.

5. Capital advances includes Rs. 870.00 lacs (Previous year: Rs. 870.00 lacs) to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

6. In the previous years, the Company’s claim for the refund of an Inter Corporate Deposit amounting to Rs.100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs.100 each to the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in preference shares of the body corporate is good and fully recoverable.

7. The Company’s significant operating lease arrangements are in respect of premises (residential, office, stores, godown, etc.). These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as rent aggregate Rs. 158.42 lacs (Previous year Rs. 83.73 lacs) under note 27.

* During the year ended March 31, 2016, the company is eligible to claim weighted tax deductions on eligible research and development expenditure from June 1, 2015 based on the approval received from Department of Scientific and Industrial Research (DSIR) w.e.f. May 28, 2015. The Company is eligible to claim the weighted tax deduction on eligible research and development expenditure u/s 35(2AB) of the Income Tax Act, 1961 which is equal to 200% of such expenditure incurred and will be claimed by the Company in its income tax computation for the assessment year 2016-17.

8. Additions in capital work-in-progress includes Rs. Nil (Previous year Rs. 82.56 lacs) on account of borrowing costs capitalized during the year.

9. Segment Reporting:

a) The business segments comprise the following:

Textiles - Yarn manufacturing

IT Services - IT Infrastructure services

Real Estate - Development at the Company’s real estate site at Bara Hindu Rao / Kishan Ganj, Delhi.

Grey Iron casting Grey iron casting manufacturing

b) Business segments have been identified based on the nature and class of products and services, their customers and assessment of the differential risks and returns and financial reporting system within the Company.

c) The geographical segments considered for disclosure are based on location of customers, broadly as under:

- within India

- outside India

d) Segment accounting policies;

In addition to the significant accounting policies, applicable to the business as set out in note 1 ‘Notes to the financial statements’, the accounting policies in relation to segment accounting are as under:

(i) Segment assets and liabilities:

All segment assets and liabilities have been allocated to the various segments on the basis of specific identification. Segment assets consist principally of fixed assets, capital work in progress, inventories, trade receivables, other current assets and loans and advances. Segment assets do not include unallocated corporate fixed assets, investments, cash and bank balances, advance tax and other assets not specifically identifiable with any segment. Segment liabilities include all operating liabilities and consist principally of trade payables and accrued liabilities. Segment liabilities do not include borrowings and those related to income taxes.

(ii) Segment revenue and expenses:

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specific identification. Segment revenue does not include interest income and other incomes in respect of non-segmental activities. Segment expenses do not include depreciation on unallocated corporate fixed assets, interest expense, tax expense and other expense in respect of non-segmental activities.

(iii) Inter segment sales:

Inter-segment sales are accounted for at cost and are eliminated in consolidation.

For the above purposes, statutory dues payable in India have been considered. Further, the demands raised and already set off by the Income-tax Authorities against the carried forward losses of the Company or the refunds due to the Company, being no longer due for payment, have not been considered.

(b) The following matters which have been excluded from the above table have been decided in favour of the Company, although the concerned regulatory authority has preferred appeal at a higher level:

(c) The Company has been regular in transferring amounts to the Investor Education and Protection Fund after considering SORA, pursuant to which certain past dues have been rescheduled for repayment, in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under within time.

(d) The Company is also involved in certain other lawsuits, claims and proceedings, either initiated by or against the Company, whether asserted or not. However, based on facts currently available, the management believes that these matters both individually and in aggregate will not have a material effect on the financial statements of the Company.

10. The Company has paid / provided managerial remuneration to the Chairman and Managing Director of the Company for the year ended March 31, 2016 over and above the limits specified under Schedule V of the Companies Act, 2013 by Rs. 5.83 lacs. The Company has taken approval from the shareholders of the Company in respect of the aforesaid remuneration through postal ballot. Further, the Company is in the process of getting necessary approvals from the Central Government for approving of the amounts of maximum remuneration payable, which includes the excess amounts already paid/ provided and has also taken an undertaking from the director for refund of remuneration in the absence of requisite approval of central government.

11. The Company has written back liability of Rs. 1,813.46 lacs during the year ended March 31, 2016 payable to a body corporate in terms of Memorandum of Understanding dated March 31, 2016 reached by jointly controlled entity with the said body corporate and the Company.

12. Previous period(s) figures includes Rs. 352.01 lacs reclassified from “other long term liabilities” to “short term provisions”, which was inadvertently included under other long term liabilities in previous years and has now been written back under “tax expense” being excess provision of previous years.

13. Previous year figures have been regrouped/ recast wherever considered necessary to make them comparable with those of the current year including advance tax amounting to Rs. 763.34 lacs has been regrouped from “Short-term loans and advances” to “Long-term loans and advances” and short-term provision for tax amounting to Rs. 327.35 lacs has been netted off with the above advance tax.

14. Previous year’s financial statements were audited by another firm of Chartered Accountants.


Mar 31, 2015

1. Exceptional item of Rs. Nil (Previous year : Rs. 1,550.00 lacs) represent compensation receivable from the developer of real estate project, pursuant to a settlement reached in relation to the residential project.

2. Disclosures required under Accounting Standard - 15 "Employee Benefits" are given below:

Defined contribution plans

Contributions to defined contribution plans charged off for the year are as under :

Defined benefit plans

(a) Gratuity

(b) Compensated absences — Earned / Sick leaves

These are unfunded schemes, the present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognise each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Rs./Lacs

3. In terms of the Scheme of Restructuring and Arrangement approved by the Delhi High Court vide its order dated October 29, 2003 under section 391-394 of the Companies Act, 1956 (Act) and subsequent modification thereto vide Delhi High Court order dated April 28, 2011(hereinafter referred to as SORA), the Company as envisaged thereunder has:

a) with effect from April 1, 2001, spun off Engineering business into a subsidiary i.e. DCM Engineering Limited and merged a wholly owned subsidiary into the Company with effect from April 1, 1999.

b) entered into definitive agreement on February 16, 2004 with Purearth Infrastructure Limited (PIL), a co-promoted company, for sale of development rights in freehold and leasehold land at Bara Hindu Rao/Kishanganj for a total consideration of Rs. 28,820 lacs includes Rs. 3,400 lacs on account of leasehold land out of which Rs. 2,400 lacs is subject to certain minimum profits being earned by PIL from the leasehold land. The status of these agreements is as under:

— In terms of the Freehold Definitive Agreement dated February 16, 2004, the Company had, during the year 2003-04, recognised the sale of development rights to PIL in freehold land at Bara Hindu Rao for a consideration ofRs.14,449.92 lacs (excluding the outstanding of Rs.10,962.08 lacs against the sale of rights aggregating Rs. 39,567 lacs in the Previous years).

— In terms of the "Leasehold Definitive Agreement" ("LDA") dated February 16, 2004, the Company had not recognized the revenue pending completion of certain conditions by both PIL and the company as envisaged in the LDA. During the current year, the Company has substantially completed its obligation to get the leases restored/converted from leasehold to freehold and PIL has agreed to release the consideration in terms of said Agreement and also relinquish the condition of minimum profit being earned by PIL from the Leasehold land. As such, the Company has recognized proportionate income of Rs. 2,110.51 lacs from sale of leasehold development rights in the said land with respect to area of leases restored / converted and corresponding costs of Rs. 620.74 lacs has been charged to the Statement ofProfit and loss and reflected under "Change in inventories of finished goods, work in progress and land for development" in Note 23.b and the remaining amount ofRs. 379.26 lacs has been carried forward in "Land (for development)" under the head inventories in Note 16.

Pursuant to the above, in terms of the SORA and the definitive agreements referred to as above, all rights and obligations with respect to development of freehold land and leasehold land have been vested with PIL including the obligation towards advances received by the Company in the previous years against sale of flats on installment payment basis.

c) The Company has in the previous years accounted for the impact of financial restructuring, resulting in rescheduling/ waiver of interest/ principal, including the modification of security terms, if any, with regard to partly convertible debentures, non convertible debentures, loans from Financial Institutions and certain inter corporate deposits as envisaged in the SORA.

After considering the effect ofDelhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations 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. Aggregate of amount so deposited as at the year end is Rs. 213.02 lacs (Previous year: Rs.331.86 lacs).

4. Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for in the financial statements aggregate Rs. 4.78 lacs (Previous year: Rs. 1,718.63 lacs).

5. Contingent liabilities not provided for:

Particulars Current year Previous year Rs./Lacs Rs./Lacs

Claims not acknowledged as debts: *

— Income-tax matters 203.61 122.11

— Customs duty 12.55 12.55

— Employees' claims 15.04 39.32 (to the extent ascertained)

— Property tax 283.67 283.67

— Others 374.76 262.78

* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of management, have a material effect on the results of operations or financial position of the Company.

6. During the financial period 1992-93, the Company revalued the lands pertaining to the Company's unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was re-organised, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited to the revaluation reserve, already adjusted in previous years.

7. Capital advances includes Rs. 870.00 lacs (Previous year: Rs. 870.00 lacs) to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

8. In the previous years, the Company's claim for the refund of an Inter Corporate Deposit amounting to Rs.100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs.100 each to the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in preference shares of the body corporate is good and fully recoverable.

9. The Company's significant operating lease arrangements are in respect of premises (residential, office, stores, godown, etc.). These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as rent aggregate Rs. 83.73 lacs (Previous year: Rs. 86.24 lacs) under note 27.

10. Details of loans and advances in the nature of loans, as per clause 32 of Listing Agreement where there is no repayment schedule are i) Bahubali Services Limited Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs) {(Maximum amount outstanding Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs )}, ii) Jaya Rapid Rollers Limited Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs) {(Maximum amount outstanding Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs)}, iii) LKP Merchant Financing Limited Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs) {(Maximum amount outstanding Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs)} and iv) DCM Employees Welfare Trust Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs) {(Maximum amount outstanding Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs)}.

11. SEGMENT REPORTING

a) The business segments comprise the following:

Textiles — Yarn manufacturing.

IT Services — IT Infrastructure services and software development.

Real Estate — Development at the Company's real estate site at Bara Hindu Rao / Kishan Ganj, Delhi.

b) Business segments have been identified based on the nature and class of products and services, their customers and assessment of the differential risks and returns and financial reporting system within the Company.

c) The geographical segments considered for disclosure are based on location of customers, broadly as under:

— within India

— outside India

d) Segment accounting policies;

In addition to the significant accounting policies, applicable to the business as set out in note 1 'Notes to the financial statements', the accounting policies in relation to segment accounting are as under:

(i) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two or more segments are allocated to the segments on reasonable basis.

(ii) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

(iii) Inter segment sales:

Inter-segment sales are accounted for at cost and are eliminated in consolidation.

12. Related party disclosures under Accounting Standard (AS) 18

A. Names of related party and nature of related party relationship:

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

f. DCM Data Systems Limited (DDSL)

II. Joint venture: Purearth Infrastructure Limited (PIL)

III. Key management personnel and/or Individuals having direct or indirect control or significant influence, and their relatives:

a. Mr. Jitendra Tuli - Chairman and Managing Director.

b. Dr. Vinay Bharat Ram - Chief Executive Officer

c. Mr. Hemant Bharat Ram - President - Textiles

d. Mr. Sumant Bharat Ram - Chief Operating & Finance Officer

e. Mr. Rahil Bharat Ram - Son of Mr. Sumant Bharat Ram

f. Mr. Yuv Bharat Ram - Son of Mr. Sumant Bharat Ram

g. Dr. Uma Tuli (Wife of Mr. Jitendra Tuli)

Enterprises where key management personnel have significant influence

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

f. Lotte Trading and Allied Services Private Limited. (LTASPL)

g. Juhi Developers Private Limited (JDPL)

h. Teak Farms Private Limited (TFPL)

Does not include provision for leave salary and contribution / provision towards gratuity, since the provision / contribution is made for the Company as a whole on actuarial basis.

*amount as per demand orders including interest and penalty wherever indicated in the demand.

For the above purposes, statutory dues payable in India have been considered. Further, the demands raised and already set off by the Income-tax Authorities against the carried forward losses of the Company or the refunds due to the Company, being no longer due for payment, have not been considered.

(b) The following matters which have been excluded from the above table have been decided in favour of the Company, although the concerned regulatory authority has preferred appeal at a higher level:

(c) The Company has been regular in transferring amounts to the Investor Education and Protection Fund after considering SORA, pursuant to which certain past dues have been rescheduled for repayment, in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under within time.

13. Quantitative data about Derivative Instruments

Foreign currency exposures of the Company that are not hedged by derivative instruments or otherwise are as follows:-

14. Pursuant to Companies Act, 2013 ('the Act') being effective from April 1, 2014, the Company has revised depreciation rates on fixed assets as per the useful life specified in Part 'C' of Schedule II of the Act. As a result of this change, the depreciation charge for the year ended March 31, 2015 is higher by Rs. 651.70 lacs. In respect of assets whose useful life is already exhausted as at 1 April 2014, depreciation of Rs. 235.78 lacs (net of tax impact of Rs. 124.78 lacs) has been adjusted in Reserves and Surplus in accordance with the requirements of Schedule II of the Act.

15. The Company did not have any long term contracts including contracts for which there were any material foreseeable losses.

16. As per Section 135 of the Companies Act, 2013 Company is required to spend Rs. 61.26 lacs on corporate social responsibility. During the year Company has spent Rs. 16.02 lacs towards the CSR activities in the area of promoting education by contributing for running of school upto class 10 in the factory premises of the Textile Division of the Company at Hisar in the state of Haryana.

17. The Board ofDirectors of the Company in their meeting held on December 08, 2014 have approved the merger of DCM Engineering Limited (subsidiary company) into and with the Company under a Scheme of Amalgamation ('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 dated (April 01, 2014) all assets and liabilities and the entire business of DCM Engineering Limited shall be transferred to and vested in the Company as a going concern. The said Scheme is pending approvals from the concerned regulatory/statutory authorities as at March 31, 2015.

18. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2014

1. In terms of the Scheme of Restructuring and Arrangement approved by the Delhi High Court vide its order dated October 29, 2003 under section 391-394 of the Companies Act, 1956 (Act) and subsequent modification thereto vide Delhi High Court order dated April 28, 2011(hereinafter referred to as SORA), the Company as envisaged thereunder has:

a) with effect from April 1, 2001, spun off Engineering business into a subsidiary i.e. DCM Engineering Limited and merged a wholly owned subsidiary into the Company with effect from April 1, 1999.

b) entered into definitive agreement on February 16, 2004 with Purearth Infrastructure Limited (PIL), a co-promoted company, for sale of development rights in freehold and leasehold land at Bara Hindu Rao/Kishanganj for a total consideration of Rs. 28,820 lacs includes Rs. 3,400 lacs on account of leasehold land out of which Rs. 2,400 lacs is subject to certain minimum profits being earned by PIL from the leasehold land. The status of these agreements is as under:

– In terms of the Freehold Definitive Agreement dated February 16, 2004, the Company had, during the year 2003-04, recognised the sale of development rights to PIL in freehold land at Bara Hindu Rao for a consideration of Rs.14,449.92 lacs (excluding the outstanding of Rs.10,962.08 lacs against the sale of rights aggregating Rs. 39,567 lacs in the Previous years).

– The "Leasehold Definitive Agreement" dated February 16, 2004 has technically not come into effect as the conditions to make the agreement effective are yet to be complied with. As a result, the Company has considered prudent not to recognize the sale of development rights in leasehold land and has carried forward the same at its estimated net realisable value as " Land (for development)" under the head inventories in Note 16.

Consequent to the above, in terms of the SORA and the definitive agreements referred to as above, all rights and obligations with respect to development of freehold land have been taken over by PIL including the obligation towards advances received by the Company in the previous years against sale of flats on installment payment basis. Further, the provision for contingencies aggregating Rs. 501.74 lacs carried forward from the previous years to cover the expenses to be incurred in relation to the above project has been utilized/ adjusted during the previous year.

c) Since, in terms of para 43 of the SORA, it cannot be implemented partially as, by its very nature, it would be implemented as a whole and in totality and that in the event any part of the SORA, either in part or in whole, is not capable of implementation, the whole SORA will have no effect. The management has confirmed to the auditors that the conditions contained in the leasehold definitive agreement (See (b) above) 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.

d) The Company has in the previous years accounted for the impact of financial restructuring, resulting in rescheduling/ waiver of interest/ principal, including the modification of security terms, if any, with regard to partly convertible debentures, non convertible debentures, loans from Financial Institutions and certain inter corporate deposits as envisaged in the SORA.

e) After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations 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. Aggregate of amount so deposited as at the year end is Rs. 331.86 lacs (Previous year: Rs.655.42 lacs).

2. Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for in the financial statements aggregate Rs. 1,718.63 lacs (Previous year: Rs. 1,178.30 lacs).

3. Contingent liabilities not provided for:

Particulars Current year Previous year Rs./Lacs Rs./Lacs

Claims not acknowledged as debts: *

- Income-tax matters 122.11 96.36

- Customs duty 12.55 12.55

- Employees'' claims (to the extent ascertained) 39.32 39.32

- Property tax 283.67 391.56

- Others 262.78 262.78

* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of management, have a material effect on the results of operations or financial position of the Company.

4. During the financial period 1992-93, the Company revalued the lands pertaining to the Company''s unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was re-organised, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited to the revaluation reserve, already adjusted in previous years.

5. Capital advances includes Rs. 870 lacs (Previous year: Rs. 295 lacs) to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

6. In the previous years, the Company''s claim for the refund of an Inter Corporate Deposit amounting to Rs.100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs.100 each to the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in preference shares of the body corporate is good and fully recoverable.

7. The Company''s significant operating lease arrangements are in respect of premises (residential, office, stores, godown, etc.). These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as rent aggregate Rs. 86.24 lacs (Previous year: Rs. 80.34 lacs) under note 27.

8. Details of loans and advances in the nature of loans, as per clause 32 of Listing Agreement where there is no repayment schedule are i) Bahubali Services Limited Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs) {(Maximum amount outstanding Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs)}, ii) Jaya Rapid Rollers Limited Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs) {(Maximum amount outstanding Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs)}, iii) LKP Merchant Financing Limited Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs) {(Maximum amount outstanding Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs)} and iv) DCM Employees Welfare Trust Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs) {(Maximum amount outstanding Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs)}.

9. SEGMENT REPORTING

a) The business segments comprise the following:

Textiles – Yarn manufacturing

IT Services – IT Infrastructure services and software development.

Real Estate – Development at the Company''s real estate site at Bara Hindu Rao / Kishan Ganj, Delhi.

b) Business segments have been identified based on the nature and class of products and services, their customers and assessment of the differential risks and returns and financial reporting system within the Company.

c) The geographical segments considered for disclosure are based on location of customers, broadly as under: – within India

– outside India d) Segment accounting policies;

In addition to the significant accounting policies, applicable to the business as set out in note 1 ''Notes to the financial statements'', the accounting policies in relation to segment accounting are as under:

(i) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two or more segments are allocated to the segments on reasonable basis.

(ii) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments. (iii) Inter segment sales:

Inter-segment sales are accounted for at cost and are eliminated in consolidation.

10. Related party disclosures under Accounting Standard (AS) 18

A. Names of related party and nature of related party relationship:

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

f. DCM Data Systems Limited (DDSL)

II. Joint venture: Purearth Infrastructure Limited (PIL)

III. Key management personnel and/or Individuals having direct or indirect control or significant influence, and their relatives:

a. Mr. Jitendra Tuli - Chairman and Managing Director (w.e.f. December 20, 2012)

b. Dr. Vinay Bharat Ram - Chief Executive Officer

c. Mr. Hemant Bharat Ram - President - Textiles

d. Mr. Sumant Bharat Ram - Chief Operating and Financial Officer

e. Mr. Rahil Bharat Ram - Son of Mr. Sumant Bharat Ram

f. Mr. Yuv Bharat Ram - Son of Mr. Sumant Bharat Ram

g. Dr. Uma Tuli (Wife of Mr. Jitendra Tuli) h. Mr. Vivek Tuli (Son of Mr. Jitendra Tuli)

Enterprises where key management personnel have significant influence

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

f. Lotte Trading and Allied Services Private Limited. (LTASPL)

g. Juhi Developers Private Limited (JDPL) h. Teak Farms Private Limited (TFPL)

B. Transactions with related parties referred to in A above.

* Does not include provision for leave salary and contribution / provision towards gratuity, since the provision / contribution is made for the Company as a whole on actuarial basis.

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) are as under:

11. There are no undisputed dues of wealth tax, excise duty, service tax, sales tax and cess, which have not been deposited by the Company. The details of disputed dues as of March 31, 2014 in respect of customs duty and income tax that have not been deposited by the Company, are as follows:

* Amount as per demand orders including interest and penalty wherever indicated in the demand.

For the above purposes, statutory dues payable in India have been considered. Further, the demands raised and already set off by the Income-tax Authorities against the carried forward losses of the Company or the refunds due to the Company, being no longer due for payment, have not been considered.

The following matters which have been excluded from the above table have been decided in favour of the Company, although the concerned regulatory authority has preferred appeal at a higher level:

Note:

The Company will make available the annual accounts and related detailed information of the subsidiary companies upon request by the shareholders of the holding and the subsidiary companies. These shall also be kept for inspection at the Registered Office of the Company and the subsidiary companies and also available on the website.


Mar 31, 2013

In case of forward exchange contracts, the premium or discount, arising at the inception of such contracts, is amortised as income or expense over the life of the contract and the exchange difference on such contracts, i.e., difference between the exchange rate at the reporting / settlement date and the exchange rate on the date of inception of contract / the last reporting date, is recognised as income / expense for the period except for exchange differences arising during construction period on restatement of foreign currency liabilities incurred in relation to the project which are adjusted in cost of fixed assets. Derivatives not covered in AS -11 are marked to market at balance sheet date and resulting loss, if any, is recognized in the statement of profit and loss in view of the principle of prudence.

(ii) In respect of financial statements of integral foreign operations of foreign branches, fixed assets are recorded at cost, based on the exchange rate prevailing on the date of transactions. Current assets and current liabilities are reported using the exchange rates on the date of the balance sheet. Incomes and expenses are translated at the average of monthly closing rates of exchange. The resultant exchange gains / losses are recognised in the statement of profit and loss.

* Term loans from banks include :

– Term loans aggregating Rs. 3,804.84 lacs (Previous year: Rs. 3,996.75 lacs) are secured by first charge by way of hypothecation, ranking pari- passu with the charge created for availing cash credit, overdraft and working capital demand loan facilities described in note 8, on existing as well as future block of movable assets and an equitable mortgage, by deposit of title deeds, of all the immovable assets, both present and future, pertaining to the Textile Division at Hissar. Due within one year Rs. 1,001.25 lacs (Previous year: Rs. 902.00 lacs).

Rs. 1,625.00 lacs repayable in 9 quarterly installments, Rs. 325.00 lacs repayable in 16 quarterly installments, Rs. 1,144.75 lacs repayable in 23 quarterly installments and Rs. 710.09 lacs repayable in 21 quarterly installments.

– Corporate loan of Rs. 616.82 lacs (Previous year: Rs. 1,943.82 lacs) secured by first charge by way of hypothecation, ranking pari-passu with the charge created for availing cash credit, overdraft and working capital demand loan facilities and term loans described in note 8, on existing as well as future block of movable assets and an equitable mortgage, by deposit of title deeds, of all the immovable assets, both present and future, pertaining to the Textile Division at Hissar. Due within one year Rs. 616.82 lacs (Previous year: Rs. 1327.00 lacs). Rs. 616.82 lacs repayable in 2 quarterly installments.

– Rs. 16.41 lacs (Previous year: Rs. 24.57 lacs) relate to assets purchased under hire purchase/financing arrangements with banks and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. Due within one year Rs. 9.89 lacs (Previous year Rs. 11.63 lacs). ** Rs. 63.45 lacs (Previous year: Rs. 14.44 lacs) relate to assets purchased under hire purchase/financing arrangements with finance companies and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. Due within one year Rs. 13.75 lacs (Previous year: Rs. 5.12 lacs). *** Term loan aggregating to Rs. 71.35 lacs (Previous year Rs. 1071.35 lacs) includes Rs. Nil (Previous year: Rs. 1,000.00 lacs) secured by registered mortgage of farm house land situated at Rajokri, New Delhi, admeasuring 2.50 acres, owned by a promoter group company. Due within one year Rs. Nil (Previous year: Rs. 1,000.00 lacs)

# Refer note 10.

1. In the previous year exceptional item of Rs. 1,800.00 lacs represent compensation receivable from the developer of real estate project , pursuant to a settlement reached in relation to the flatted factory complex of the said project.

2. Disclosures required under Accounting Standard – 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules, 2006, are given below: Defined contribution plans

Contributions to defined contribution plans charged off for the year are as under :

3. In terms of the Scheme of Restructuring and Arrangement approved by the Delhi High Court vide its order dated October 29, 2003 under section 391-394 of the Companies Act, 1956 (Act) and subsequent modification thereto vide Delhi High Court order dated April 28, 2011(hereinafter referred to as SORA), the Company as envisaged thereunder has:

a) with effect from April 1, 2001, spun off Engineering business into a subsidiary i.e. DCM Engineering Limited and merged a wholly owned subsidiary into the Company with effect from April 1, 1999.

b) entered into definitive agreement on February 16, 2004 with Purearth Infrastructure Limited (PIL), a co-promoted company, for sale of development rights in freehold and leasehold land at Bara Hindu Rao/Kishanganj for a total consideration of Rs. 28,820 lacs includes Rs. 3,400 lacs on account of leasehold land out of which Rs. 2,400 lacs is subject to certain minimum profits being earned by PIL from the leasehold land. The status of these agreements is as under

– In terms of the Freehold Definitive Agreement dated February 16, 2004, the Company had, during the year 2003-04, recognised the sale of development rights to PIL in freehold land at Bara Hindu Rao for a consideration of Rs.14,449.92 lacs (excluding the outstanding of Rs.10,962.08 lacs against the sale of rights aggregating Rs. 39,567 lacs in the Previous years).

– the "Leasehold Definitive Agreement" dated February 16, 2004 has technically not come into effect as the conditions to make the agreement effective are yet to be complied with. As a result, the Company has considered prudent not to recognize the sale of development rights in leasehold land and has carried forward the same at its estimated net realisable value as " Land (for development)" under the head inventories in Note 16.

Consequent to the above, in terms of the SORA and the definitive agreements referred to as above, all rights and obligations with respect to development of freehold land have been taken over by PIL including the obligation towards advances received by the Company in the previous years against sale of flats on installment payment basis. Further, the provision for contingencies aggregating Rs. 501.74 lacs carried forward from the previous years to cover the expenses to be incurred in relation to the above project has been utilized/ adjusted during the previous year.

c) Since, in terms of para 43 of the SORA, it cannot be implemented partially as, by its very nature, it would be implemented as a whole and in totality and that in the event any part of the SORA, either in part or in whole, is not capable of implementation, the whole SORA will have no effect. The management has confirmed to the auditors that the conditions contained in the leasehold definitive agreement (See (b) above) 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.

d) The Company has in the previous years accounted for the impact of financial restructuring, resulting in rescheduling/ waiver of interest/ principal, including the modification of security terms, if any, with regard to partly convertible debentures, non convertible debentures, loans from Financial Institutions and certain inter corporate deposits as envisaged in the SORA.

e) After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations 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. Aggregate of amount so deposited as at the year end is Rs. 655.42 lacs (Previous year: Rs.823.16 lacs)

4. Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for in the financial statements aggregate Rs. 1,178.30 lacs (Previous year: Rs. 355.72 lacs).

5. Contingent liabilities not provided for:

Particulars Current year Previous year Rs./Lacs Rs./Lacs

Claims not acknowledged as debts: *

– Income-tax matters 96.36 27.93

– Customs duty 12.55 12.55

– Employees'' claims (to the extent ascertained) 39.32 39.32

– Property tax 391.56 800.62

– Others 262.78 249.82

6. During the financial period 1992-93, the Company revalued the lands pertaining to the Company''s unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was re-organised, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited to the revaluation reserve, already adjusted in previous years.

7. The Collector, Hisar in the year 1989-90 had ordered resumption of 250 acres of land of the closed unit at Hisar and had served a notice on the Company to start textile operations on the remaining 129.5 acres of land at Hisar within a specified period failing which that land would also be resumed. The Company has since setup a spinning mill at this location and had filed a writ petition in the Hon''ble Punjab and Haryana High Court ( referred as ''Court'') challenging the order and the notice. The said writ petition of the Company was decided by Single Bench of the Court in favour of the Company on 29.6.2010 setting aside the said order of resumption. An appeal filed by State of Haryana against the said order of Single Bench before Divisional Bench of Hon''ble Punjab & Haryana High Court was dismissed during the year on 4.10.2012. A further Special Leave Petition (SLP) filed by Haryana Urban Development Authority (HUDA) one of the parties in the matter against the order of said Divisional Bench was dismissed by Hon''ble Supreme Court on 22.3.2013. In view of these orders, this matter has attained finality in favour of the Company.

8. Capital advances includes Rs. 295 lacs (Previous year: Rs. 295 lacs) paid during the previous years to a party to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

9. In the previous years, the Company''s claim for the refund of an Inter Corporate Deposit amounting to Rs.100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs.100 each to the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in preference shares of the body corporate is good and fully recoverable.

10. The Company''s significant operating lease arrangements, entered into subsequent to March 31, 2001, are in respect of premises (residential, office, stores, godown, etc.). These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as rent aggregate Rs. 80.34 lacs (Previous year: Rs. 74.93 lacs) under note 27.

11. The business of the Company was reorganised 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 the units of the Company existing at that time were re-organised 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 reorganisation arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

The demands aggregating Rs 451 lacs raised by the Income-tax Authorities during the year 1994-95, in relation to the above matters, have either been decided in favour of the Company or have been adjusted against the carried forward losses. However, the matters are disputed by the Income- tax Authorities in appeal.

12. Details of loans and advances in the nature of loans, as per clause 32 of Listing Agreement where there is no repayment schedule are i) Bahubali Services Limited Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs) {(Maximum amount outstanding Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs)}, ii) Jaya Rapid Rollers Limited Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs) {(Maximum amount outstanding Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs)}, iii) LKP Merchant Financing Limited Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs) {(Maximum amount outstanding Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs)} and iv) DCM Employees Welfare Trust Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs) {(Maximum amount outstanding Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs)}.

13. SEGMENT REPORTING

a) The business segments comprise the following: Textiles – Yarn manufacturing

IT Services – IT Infrastructure services and software development.

Real Estate – Development at the Company''s real estate site at Bara Hindu Rao / Kishan Ganj, Delhi.

b) Business segments have been identified based on the nature and class of products and services, their customers and assessment of the differential risks and returns and financial reporting system within the Company.

c) The geographical segments considered for disclosure are based on location of customers, broadly as under: – within India

– outside India

d) Segment accounting policies;

In addition to the significant accounting policies, applicable to the business as set out in note 1 ''Notes to the financial statements'', the accounting policies in relation to segment accounting are as under:

(i) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two or more segments are allocated to the segments on reasonable basis.

(ii) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments. (iii) Inter segment sales:

Inter-segment sales are accounted for at cost and are eliminated in consolidation.

e) (i) Primary Segment information (Business Segments) for the year ended March 31, 2013.

14. Related party disclosures under Accounting Standard (AS) 18

A. Names of related party and nature of related party relationship

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

f. DCM Data Systems Limited (DDSL)

II. Joint venture: Purearth Infrastructure Limited (PIL)

III. Key management personnel and/or Individuals having direct or indirect control or significant influence, and their relatives:

a. Mr. Naresh Kumar Jain - Managing Director (Upto December 19, 2012).

b. Mr. Jitendra Tuli - Chairman and Managing Director (w.e.f. December 20, 2012).

c. Dr. Vinay Bharat Ram - Chief Executive Officer

d. Mr. Hemant Bharat Ram - President - Textiles

e. Mr. Sumant Bharat Ram - Chief Operating and Financial Officer

f. Mr. Rahil Bharat Ram - Son of Mr. Sumant Bharat Ram

g. Mr. Yuv Bharat Ram - Son of Mr. Sumant Bharat Ram

Enterprises where key management personnel have significant influence:

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

f. Lotte Trading and Allied Services Private Limited. (LTASPL)

15. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

* The Company has issued one class of equity shares having at par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share with a right to receive per share dividend declared by the Company.

** There is no change in issued, subscribed and paid up share capital during the current year and corresponding previous year.

* Term loans from banks include :

- Term loans aggregating Rs. 3,996.75 lacs (Previous year: Rs. 4,557.85 lacs) are secured by first charge by way of hypothecation, ranking pari-passu with the charge created for availing cash credit, overdraft and working capital demand loan facilities described in note 8, on existing as well as future block of movable assets and an equitable mortgage, by deposit of title deeds, of all the immovable assets, both present and future, pertaining to the Textile Division at Hissar. Due within one year Rs. 902,00 lacs (Previous year: Rs. 834.75 lacs).

Rs. 2,312.50 lacs repayable in 13 quarterly installments, Rs. 397.00 iacs repayable in 20 quarterly installments and Rs. 1,287.25 lacs repayable in 27 quarterly installments.

- Corporate loan of Rs. 1,943.82 lacs (Previous year: Rs. 2,288.82 lacs) secured by first charge by way of hypothecation, ranking pari-passu with the charge created for availing cash credit, overdraft and working capital demand loan facilities and term loans described in note 8, on existing as well as future block of movable assets and an equitable mortgage, by deposit of title deeds, of all the immovable assets, both present and future, pertaining to the Textile Division at Hissar. Due within one year Rs, 1,327.00 lacs (Previous year: Rs. 836.00 lacs). Rs. 1,243.82 lacs repayable in 5 quarterly installments and Rs. 700 lacs repayable in 4 equal quarterly installments.

- Rs. 24.57 iacs (Previous year: Rs. 38.98 lacs) relate to assets purchased under hire purchase/financing arrangements with banks and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. Due within one year Rs. 11,63 lacs (Previous year: Rs. 14.55 lacs).

** Rs. 14.44 lacs (Previous year: Rs. 24.13 lacs) relate to assets purchased under hire purchase/financing arrangements with finance companies and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. Due within one year Rs. 5.12 lacs (Previous year: Rs. 9.68 lacs).

*** Term loan aggregating to Rs. 1,071.35 lacs includes Rs. 1,000.00 lacs (Previous year: Rs. 1,000.00 lacs) secured by registered mortgage of farm house land situated at Rajokri, New Delhi, admeasuring 2.50 acres, owned by a promoter group company. Due within one year Rs. 1,000.00 lacs (Previous year: Rs.1,000.00 lacs).

* Loans repayable on demand from banks include

- cash credit/overdraft and working capital demand loan facilities aggregating Rs. 8,161.17 lacs (Previous year: Rs. 12,001.76 lacs) and other non-fund based facilities from a bank, are secured by way of hypothecation of stocks / stores and book debts, both present and future. These are further secured by equitable mortgage of immovable assets, both present and future, and first charge, ranking pari-passu with the charge created for availing term loans as described in note 4, by way of hypothecation of existing as well as future block of movable assets pertaining to the Textile Division at Hissar.

- working capital demand loans aggregating Rs. Nil (Previous year: Rs. 4,750.00 lacs) from banks are secured by way of pledge of cotton stocks, pertaining to the Textile Division at Hissar.

- cash credit facilities relating to IT Division, aggregating Rs. 410.57 lacs (Previous year: Rs. 457.78 lacs) and other non-fund based facilities from a bank, are secured by way of first charge/hypothecation of raw materials, stock-in-progress, finished goods, stores, spares, book debts and other assets of the Division (both present and future), and by way of first charge on office property at Hyderabad. The above facility is further secured by way of first charge created / to be created on other fixed assets of the Division.

** Other loans and advances include.

- Rs. 250.00 lacs (Previous year: Rs. 1,000.00 lacs) secured by pledge of 1,100,000 (Previous year: 2,000,000) equity shares of DCM Engineering Limited on a margin of 100% over the outstanding loan amount.

@ In terms of SORA, the Company will not dispose of its shareholding in Purearth Infrastructure Limited until the completion of the land development project at Bara Hindu Rao/ Kishan Ganj.

* 11,00,000 (Previous year: 2,000,000) fully paid up equity shares of Rs. 10 each of DCM Engineering Limited have been pledged with a body corporate. ** 59,584 (Previous year: 59,584) fully paid equity shares of Rs. 10 each of Daewoo Motors (India) Limited have been pledged with one of the financial institution are pending for release.

*** Refer note 38.

1. Exceptional item of Rs. 1,800.00 iacs represent compensation receivable from the developer of real estate project, pursuant to a settlement reached in relation to the flatted factory complex of the said project.

2. In terms of the Scheme of Restructuring and Arrangement approved by the Delhi High Court vide its order dated October 29, 2003 under section 391-394 of the Companies Act, 1956 (Act) and subsequent modification thereto vide Delhi High Court order dated April 28, 2011 (hereinafter referred to as SORA), the Company as envisaged there under has :

a) with effect from April 1, 2001, spun off Engineering business into a subsidiary i.e. DCM Engineering Limited and merged a wholly owned subsidiary into the Company with effect from April 1, 1999.

b) entered into definitive agreement on February 16, 2004 with Purearth Infrastructure Limited (PIL), a co-promoted company, for sale of development rights in freehold and leasehold land at Bara Hindu Rao/Kisangani for a total consideration of Rs. 28,820 Iacs includes Rs. 3400 Iacs on account of leasehold land out of which Rs. 2,400 lacs is subject to certain minimum profits being earned by PIL from the leasehold land. The status of these agreements is as under :

- In terms of the Freehold Definitive Agreement dated February 16, 2004, the Company had, during the year 2003-04, recognized the sale of development rights to PIL in freehold land at Bara Hindu Rao for a consideration of Rs. 14,449.92 lacs (excluding the outstanding of Rs. 10,962.08 lacs against the sale of rights aggregating Rs. 39,567 lacs in the previous years).

- the "Leasehold Definitive Agreement dated February 16, 2004 has technically not come into effect as the conditions to make the agreement effective are yet to be complied with. As a result, the Company has considered prudent not to recognize the sale of development rights in leasehold land and has carried forward the same at its estimated net realizable value as Land (for development) under the head inventories in Note 16.

Consequent to the above, in terms of the SORA and the definitive agreements referred to as above, all rights and obligations with respect to development of freehold land have been taken over by PIL including the obligation towards advances received by the Company in the previous years against sale of flats on installment payment basis. Further, the provision for contingencies aggregating Rs. 501.74 lacs carried forward from the previous year to cover the expenses to be incurred in relation to the above project has been utilized/ adjusted during the year.

c) Since, in terms of Para 43 of the SORA, it cannot be implemented partially as, by its very nature, it would be implemented as a whole and in totality and that in the event any part of the SORA, either in part or in whole, is not capable of implementation, the whole SORA will have no effect. The management has confirmed to the auditors that the conditions contained in the leasehold definitive agreement (See (b) above) 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.

d) The Company has in the previous year's accounted for the impact of financial restructuring, resulting in rescheduling/ waiver of interest/ principal, including the modification of security terms, if any, with regard to partly convertible debentures, non convertible debentures, loans from Financial Institutions and certain inter corporate deposits as envisaged in the SORA.

e) After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations 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. Aggregate of amount so deposited as at the year end is Rs. 823-16 lacs (Previous year: Rs. 829.71 lacs).

3. Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for in the financial statements aggregate Rs. 355.72 Iacs (Previous year: Rs. 183.14 lacs).

4. Contingent liabilities not provided for :

Particulars % Current Year Previous Year Rs. Lacs Rs. Lacs

Claims not acknowledged as debts : *

- Income-tax matters 27.93 41,22

- Service tax - 4.84

- Customs duty 12.55 12.55

- Employees claims (to the extent ascertained) 39.32 44.52

- Property tax 800.62 800.62

- Others 249.82 236.86

s* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of management, have a material effect on the results of operations or financial position of the Company

5. During the financial period 1992-93, the Company revalued the lands pertaining to the Company's unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was re-organized, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited ro the revaluation reserve, already adjusted in previous years.

6. The Collector, Hissar in the year 1989-90 had ordered resumption of 250 acres of land of the closed unit at Hissar and had served a notice on the Company to start textile operations on the remaining 129.5 acres of land at Hissar within a specified period failing which that land would also be resumed. The Company has since setup a spinning mill at this location and had filed a writ petition in the Punjab and Haryana High Court challenging the order and the notice. In previous year, the Company's writ petition has been decided in favour of the Company. During the year, an appeal has been filed by the State of Haryana in the matter which is pending before the High Court.

7. Capital advances includes Rs. 295 lacs (Previous year: Rs. 295 lacs) paid during the previous years to a party to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

8. In the previous years, the Company's claim for the refund of an Inter Corporate Deposit amounting to Rs. 100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs.100 each ro the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in preference shares of the body corporate is good and fully recoverable.

9. The Company's significant operating lease arrangements, entered into subsequent to March 31, 2001, are in respect of premises (residential, office, stores, go down, etc.). These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as rent aggregate Rs. 74.93 lacs (Previous year: Rs. 78.79 lacs) under note 27.

10. The business of the Company was reorganized 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 the 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 reorganization arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

The demands aggregating Rs 451 lacs raised by the Income-tax Authority during the year 1994-95, in relation to the above matters, have either been decided in favour of the Company or have been adjusted against the carried forward losses. However, the matters are disputed by che Income-tax Authorities in appeal.

11. Details of loans and advances in the nature of loans, as per clause 32 of Listing Agreement where there is no repayment schedule are i) Bahubali Services Limited Rs. 155.46 lacs (Previous year: Rs. 155.46 lacs) {(Maximum amount outstanding Rs. 155.46 lacs (Previous year: Rs. 155 46 lacs)}, ii) Jaya Rapid Rollers Limited Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs) |(Maximum amount outstanding Rs. 22.22 lacs (Previous year: Rs. 22.22 lacs)}, iii) LKP Merchant Financing Limited Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs) {(Maximum amount outstanding Rs. 84.25 lacs (Previous year: Rs. 84.25 lacs)} and iv) DCM Employees Welfare Trust Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs) {(Maximum amount outstanding Rs. 279.90 lacs (Previous year: Rs. 279.90 lacs)}.

d) Segment accounting policies;

In addition to the significant accounting policies, applicable to the business as set out in note 1 Notes to the Financial Statements, the accounting policies in relation to segment accounting are as under :

(i) Segment assets and liabilities :

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two or more segments are allocated to the segments on reasonable basis.

(ii) Segment revenue and expenses :

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

(iii) Inter segment sales ;

Inter-segment sales are accounted for at cost and are eliminated in consolidation.

12. Related party disclosures under Accounting Standard (AS) 18

A. Names of related party and nature of related party relationship

I. Subsidiaries (enterprises where control exists) :

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment &C Consulting Limited (DRICL)

II. Joint venture :

Purearth Infrastructure Limited (PIL)

III. Key management personnel and/or Individuals having direct or indirect control or significant influence, and their relatives:

a. Mr. Naresh Kumar Jain - Managing Director

b. Dr. Vinay Bharat Ram - Chief Executive Officer

c. Mr. Hemant Bharat Ram — President — Textiles

d. Mr. Sumant Bharat Ram - Chief Operating and Financial Officer

IV. Enterprises where key management personnel have significant influence

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

f. Lotte Trading and Allied Services Private Limited. (LTASPL)

13. The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure.


Mar 31, 2011

1. Contingent liabilities not provided for:

Current Year Previous Year Rs.lacs Rs.lacs Claims not acknowledged as debts: *

– Income–tax matters 41.22 59.04

– Sales tax matters – 49.13

– Service tax 4.84 –

– Customs duty 12.55 12.55

– Employees claims (to the extent ascertained) 44.52 44.52

– Property tax 800.62 800.62

– Others 236.86 224.96

– Uncalled liability on shares partly paid – 219.82 * All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of management, have a material effect on the results of operations or financial position of the Company.

6. Earnings per share: Current Year Previous Year

(a) Profit after taxation as per profit and loss account (Rs./lacs) 2,576.28 6,569.60

(b) Number of equity shares (face value of Rs. 10 per share) 173,79,037 173,79,037

(c) Basic and diluted earning per share (Rs. Per share) 14.82 37.81

7. During the financial period 1992–93, the Company revalued the lands pertaining to the Companys unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was re–organised, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited to the revaluation reserve, already adjusted in previous years.

8. The Collector, Hissar in the year 1989–90 had ordered resumption of 250 acres of land of the closed unit at Hissar and had served a notice on the Company to start textile operations on the remaining 129.5 acres of land at Hissar within a specified period failing which that land would also be resumed. The Company has since setup a spinning mill at this location and had filed a writ petition in the Punjab and Haryana High Court challenging the order and the notice. During the year, the Companys writ petition has been decided in favour of the Company.

9. Capital work in progress includes unsecured advances, considered good, Rs. 295 lacs (Previous year Rs. 295 lacs) paid during the previous years to a party to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

10. In the previous years, the Companys claim for the refund of an Inter Corporate Deposit amounting to Rs.100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non–cumulative, non–voting, redeemable preference shares of Rs.100 each to the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in preference shares of the body corporate is good and fully recoverable.

11. The Companys significant operating lease arrangements, entered into subsequent to March 31, 2001, are in respect of premises (residential, office, stores, godown, etc.). These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as rent aggregate Rs. 78.79 lacs (Previous year Rs. 97.93 lacs) under schedule 10.

12. The business of the Company was reorganised 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 the units of the Company existing at that time were re–organised 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 reorganisation arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

The demands aggregating Rs 451 lacs raised by the Income–tax Authority during the year 1994–95, in relation to the above matters, have either been decided in favour of the Company or have been adjusted against the carried forward losses. However, the matters are disputed by the Income–tax Authorities in appeal.

13. Details of loans and advances in the nature of loans, as per clause 32 of Listing Agreement where there is no repayment schedule are i) Bahubali Services Limited Rs. 155.46 lacs (Previous year Rs. 155.46 lacs) {(Maximum amount outstanding Rs. 155.46 lacs (Previous year Rs. 155.46 lacs )}, ii) Jaya Rapid Rollers Limited Rs. 22.22 lacs (Previous year Rs. 22.22 lacs) {(Maximum amount outstanding Rs. 22.22 lacs (Previous year Rs. 22.22 lacs)}, iii) LKP Merchant Financing Limited Rs. 84.25 lacs (Previous year Rs. 84.25 lacs) {(Maximum amount outstanding Rs. 84.25 lacs (Previous year Rs. 84.25 lacs)} and iv) DCM Employees Welfare Trust Rs. 279.90 lacs (Previous year Rs. 279.90 lacs) {(Maximum amount outstanding Rs. 279.90 lacs (Previous year Rs. 279.90 lacs)}.

14. Based upon the information available with the Company, the balance due to the Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006 is Rs. 310 (Previous year Rs. 0.04 lac). Further, no interest has been paid or payable during the year under the terms of the MSMED Act, 2006.

15. SEGMENT REPORTING

a) The business segments comprise the following: Textiles – Yarn manufacturing

IT Services – IT Infrastructure services and software development.

Real Estate – Development at the Companys real estate site at Bara Hindu Rao / Kishan Ganj, Delhi.

b) Business segments have been identified based on the nature and class of products and services, their customers and assessment of the differential risks and returns and financial reporting system within the Company.

c) The geographical segments considered for disclosure are based on location of customers, broadly as under:

– within India

– outside India

d) Segment accounting policies; In addition to the significant accounting policies, applicable to the business as set out in note 1 above, the accounting policies in relation to segment accounting are as under:

(i) Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two or more segments are allocated to the segments on reasonable basis.

(ii) Segment revenue and expenses: Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

(iii) Inter segment sales: Inter–segment sales are accounted for at cost and are eliminated in consolidation.

16. Related party disclosures under Accounting Standard (AS) 18

A. Names of related party and nature of related party relationship

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

II. Joint venture:

Purearth Infrastructure Limited (PIL)

III. Key management personnel and/or Individuals having direct or indirectcontrol or significant influence, and their relatives:

a. Mr. Naresh Kumar Jain – Managing Director

b. Dr. Vinay Bharat Ram – Chief Executive Officer

c. Mr. Hemant Bharat Ram – President – Textiles

d. Mr. Sumant Bharat Ram – Chief Operating and Financial Officer

The Companys investment in the above joint venture is shown as Long Term Investment – Trade, under Schedule – 5. Due to non availability of financial statements of the aforesaid joint venture for 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 ‘standalone 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.

21. The figures of the previous year have been regrouped / recast to conform to the current years classification.

22. Schedules one to thirteen form an integral part of the balance sheet, profit and loss account and cash flow statement.

1. Basis of Consolidation

The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS) – "Consolidated Financial Statements", notified in the Companies (Accounting Standard) Rules, 2006.

i. The subsidiaries (which along with DCM Limited, the parent, constitute the group) considered in preparation of these consolidated financial statements are:

ii. As per SORA, DCM Limited was to sell 49% out of its 75% equity shareholding in DEL. As the investment was held with a view to its subsequent disposal in the near future, control was intended to be temporary and hence the accounts of DEL was not consolidated in the Companys consolidated financial statements upto the year ended March 31, 2010. In the current year, pursuant to the payment/ settlement of dues of all the creditors under SORA, the Board of Directors of the Company has decided w.e.f. April 01, 2010 not to sell its investment in DEL. Hence, in the current year DEL accounts have been considered for consolidation in these financial statements. Consequent thereto, the assets and liabilities as at March 31, 2010 and the Companys share in accumulated profits upto March 31, 2010 DELs audited financial statements under the Companies Act, 1956 for the year ended March 31, 2010 has been incorporated in these accounts. Accordingly, an amount of Rs. 2,038.90 lacs (net of minority interest amounting to Rs. 677.38 lacs) representing the Companys share in the accompanying profits of DEL as at March 31, 2010 has been credited to profit and loss account.

iii. The group has a joint venture entity Purearth Infrastructure Limited (PIL). Since "fit for consolidation" accounts of PIL could not be made available, the same have not been considered for consolidation by the Company in these consolidated financial statements although required in terms of Accounting Standard (AS) – 27 "Financial Reporting of interests in Joint Ventures".


Mar 31, 2010

1. Scheme of Restructuring and Arrangement (SORA):

1.1 The Companys Scheme of Restructuring and Arrangement (SORA), under sections 391 and 394, sanctioned by the Delhi High Court vide its Order dated October 29, 2003, became effective on January 2, 2004 on filing of the certified copy of the Order of the High Court in the office of the Registrar of Companies. The SORA, inter-alia, focussed on financial restructuring and debt reduction of the Company by divestment/ sale of certain business/assets of the Company and merger of a fully owned subsidiary with the Company, undet a separate Scheme, and application of the proceeds thereof towards repayments of borrowings, in the manner and as per the terms and conditions indicated in the SORA.

Consequent to the effectuation of the SORA, Engineering Business was spun off with effect from April 1, 2001 and accounted for during the year ended March 31, 2002.

1.2 a) SORA, sanctioned by the Delhi High Court, envisages that -

i) The Company would convey to Putearth Infrastructure Limited (PIL), a Company co-promoted by it, all development rights in freehold and leasehold land at Bara Hindu Rao / Kishan Ganj, and PIL would undertake the development of the entire project and would be responsible for the construction and completion of the project. All rights and obligations, undet sale agreements enteted into by the Company and the builders with purchasers, would also be assigned to PIL.

ii) The total approximate consideration payable by PIL to the Company for the above would be Rs. 28,820 lacs, including Rs. 3,400 lacs on account of leasehold land out of which Rs. 2,400 lacs would be subject to certain minimum profits being earned by PIL from such leasehold land.

iii) The total consideration of Rs. 28,820 lacs has been determined by including the outstanding of Rs. 10,962.08 lacs against the sales in the previous years and the expenses to be incurred to get the project started, estimated to be approximately Rs. 8,020 lacs. Any difference between actual expenses and the estimated amount would be to the Companys account.

iv) The consideration shall be receivable in installments, as per an agreed schedule, as envisaged in the SORA.

v) The above arrangements are subject to the definitive agreements, which have been entered into between the Company and PIL on February 16, 2004. The starus of the above arrangements, in accordance with the terms of the definitive agreements, is as under:

— In tetms of the Freehold Definitive Agreement dated February 16, 2004, the Company had, during the year 2003-04, recognised the sale of development rights to PIL in freehold land at Bara Hindu Rao for a consideration of Rs.14,449.92 lacs (excluding the outstanding of Rs. 10,962.08 lacs against the sale of rights aggregating Rs. 39,567 lacs in the previous years).

- the "Leasehold Definitive Agreement" dated February 16, 2004 has technically not come into effect as the conditions to make the agreement effective are yet to be complied with. As a result, the Company has considered prudent not to recognize the sale of development rights in leasehold land and has carried forward rhe same at its estimated net realisable value as " Land (for development)" under the head inventories in Schedule 7.

Consequent to the above, in terms of the SORA and the definitive agreements referred to as above, all rights;and obligations with respect to development of freehold land have been taken over by PIL including the obligation towards advances aggregating Rs. 460.55 lacs received by the Company in the previous years against sale of flats on instalment payment basis, which have been written back during the year 2003-04, as no longer payable. Further, the provisions for contingencies aggregating Rs.402.34 lacs (Previous Year Rs. 502.95 lacs) to cover the expenses to be incurred in relation to the above project have been carried forward as "Contingencies" under the head Provisions in Schedule 8. Amounts aggregating Rs.100.61 lacs (Previous Year Rs. 320.38 lacs) have been utilized / adjusted during rhe year out of the above provision for contingencies.

b) the outstanding as at March 31, 2010 from PIL on account of sale of development rights aggregate Rs. 9,672.39 lacs (Previous Year Rs. 15,374.89 lacs), against which the Company holds a security deposit of Rs.300 lacs (Previous Year Rs.300 lacs). The above outstandings would be tecovered in installments, as per the schedule in terms of the SORA/ definitive agreements. However, the amounts aggregating Rs. 9,672.39 lacs (Previous Year Rs. 14,874.89 lacs), which became due till the year end have not been realised due to circumstances stated in para 3.4 below.

Since, in terms of para 43 of the SORA, it can not be implemented partially as, by its very nature, it would be implemented as a whole and in totality and that in the event any patt of the SORA, either in part or in whole, is not capable of implementation, the whole SORA will become null and void and of no effect. The management has confirmed to the auditors that the conditions contained in the leasehold definitive agreement (Refer note 3.2(a)(v) above) would be complied and would not result in to any adverse impact on the financials of the Company or on the successful implementation of the SORA.

1.3 In the previous years, the Company considered the impact of financial restructuring, resulting in rescheduling/ waiver of interest/ principal, including the modification of security terms, if any, with regard to partly convertible debentures, non convertible debentures, loans from Financial Institutions and certain inter corporate deposits with effect from January 1, 1999, as envisaged in the SORA approved by the High Court of Delhi.

1.4 As per the terms of SORA, repayment obligations of the Company were linked with encashment of respective assets and are subject to certain conditions including withdrawal/ non-pursuance of legal action by the lenders against the Company and modification/vacation of charges on the assets of the Company. However, prior to approval of SORA, some of the financial institutions/ banks who had provided the loan facilities to a company, who is responsible to develop and sell the real estate project, took recourse to recover their dues independent of SORA and obtained stay orders. Furthet, subsequent to the approval of SORA, certain financial institutions delayed modification/ vacation of charges, which was vital precondition and integral part of SORA. Another financial institution filed modification applications/ proceedings in Debt Recovety Tribunal after approval of SORA and had also taken stay orders. These acts and omissions on the part of said financial institutions/ banks prevented and/ or delayed the realization/ disposal of specified assets and also prevented the promoters to arrange the scheduled amount in terms of the SORA and consequently prevented the Company from discharging its obligations. However, in order to avoid any litigation at various forums/ courts, the Company was forced to file an application under section 392 of the Companies Act, 1956 in the Delhi High Court requesting for revision in the schedule of payment.

In view of the above facts in relation to the delays in encashment of specified assets and the difference in time periods for repayment of debts linked with the disposal of said assets and as legally advised, the Company has complied with the debts repayment obligations including in respect of debentures, deposits, loans and related interest.

1.5 Duting the year, the Company has entered into a One Time Settlement with a financial institution, pursuant to which liabilities aggregating Rs. 4,666.31 lacs has been written back under the head exceptional item in profit and loss account. Consequent to such settlement, the Company has settled liability with the financial institutions and banks referred to in 3.4 above.

1.6 In view of 3.4 above, certain amount, as envisaged in SORA comprising of Rs. Nil (Previous Year Rs. 777.65 lacs) due since March 2, 2004 towards a financial institution and Rs. 126.29 lacs (Previous Year Rs. 525-19 lacs) due since January 2, 2005, Rs. 38.89 lacs (Previous Year Rs. 878.52 lacs) due since January 2, 2006, Rs. 59.93 lacs (Previous Year Rs. 1,920.67 lacs) due since January 2, 2007, Rs. 8.04 lacs (Previous Year Rs. 3,493.04 lacs) due since January 2, 2008, Rs. 870.79 lacs (Previous Year Rs. 2,238.88 lacs) due since January 2, 2009 and Rs. 337.13 lacs due since January 2, 2010 towards holders of Part-B of non-convertible potion of 16% Secured Partly Convertible Debentures are pending for payment.

In respect of 19.5% Secured Non-Convertible Debentures aggregating Rs. 186.89 lacs (Previous Year Rs. 203.53 lacs) (including interest Rs. 34.36 lacs; previous year Rs. 45.14 lacs), an amount equivalent thereto has been deposited in a No lien account / Fixed deposit account pledged with a scheduled bank, the Trustee for these debentures, in terms of the Trust Deed.

2. Contingent liabilities not provided for:

Current Year Previous Year Rs.lacs Rs.lacs

Claims not acknowledged as debts: *

- Income-tax matters 59.04 97.41

Sales tax matters 49.13 49.49

Customs duty 12.55 12.55

Employees claims (to the extent ascertained) 44.52 -

Property tax 800.62 -

Others 224.96 204.92

- Uncalled liability on shares partly paid 219.82 -

* All the above matters (other than Uncalled liability on shares partly paid) are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of management, have a material effect on the results of operations or financial position of the Company.

3. During the financial period 1992-93, the Company revalued the lands pertaining to the Companys unit Hissar Textile Mills, Hissar, as of April 1, 1990, the date when the Company was te-organised, on the basis of valuation carried out by an approved valuer. This revaluation resulted in a surplus of Rs. 969 lacs, which was credited to the revaluation reserve, already adjusted in previous years.

4. The Collector, Hissar in the year 1989-90 had ordered resumption of 250 acres of land of the closed unit at Hissar and had served a notice on the Company to start textile operations on the remaining 129.5 acres of land at Hissar within a specified period failing which that land would also be resumed. The Company has filed a writ petition in the Punjab and Haryana High Court challenging the order and the notice.

Pending final decision, the High Court has ordered status quo regarding the land, which continues to be in the possession of the Company. The Company has since setup a spinning mill at this location.

5. Capital work in progress includes unsecured advances, considered good, Rs. 295 lacs (Previous Year Rs. 295 lacs) paid during the previous years to a party to acquite certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the buildef to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

6. In the previous years, the Companys claim for the refund of an Inter Corporate Deposit amounting to Rs.100 lacs against a body corporate was settled by the body corporare by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs.100 each to the Company, redeemable within 20 years. The management is confident that the investment acquired by the Company in pteference shares of the body corporare is good and fully recoverable.

(iii) The Company, during the earlier years, had given one of its rented ptemises on sub-lease under a non-cancellable operating lease. The related lease income of Rs. Nil (Previous Year Rs. 12.00 lacs) has been recognised in the profit and loss account. Future minimum lease payments receivables:

Not later than one year - Rs. Nil (Previous Year Rs. 19.00 lacs)

Later than one yeat and not later than five yeats - Rs. Nil (Previous Year Rs. Nil)

7. The business of the Company was reorganised 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 the units of the Company existing at that time were re-organised under four separate companies, including this Company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars Limited (formerly known as Siel Limited). There are various issues relating to sales tax, income-tax, etc., arising/arisen out of the reorganisation arrangement, which will be settled and accounted fot in tetms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

The demands aggregating Rs 451 lacs raised by the Income-tax Authority during the year 1994-95, in relation to the above matters, have either been decided in favour of the Company ot have been adjusted against the carried forward losses. However, the matters are disputed by the Income-tax Authorities in appeal.

8. Details of loans and advances in the nature of loans, as pet clause 32 of Listing Agteement whete thete is no repayment schedule are i) Bahubali Services Limited Rs. 155.46 lacs (Previous Year Rs. 155.46 lacs) {(Maximum amount outstanding Rs. 155.46 lacs (Previous ,Year Rs. 155.46 lacs)(, ii) Jaya Rapid Rollers Limited Rs. 22.22 lacs (Previous Year Rs. 22.22 lacs) ((Maximum amount outstanding Rs, 22.^2 lacs {Previous Year Rs. 22.22 lacs)}, iii) LKP Merchant Financing Limited Rs. 84.25 lacs (Previous Year Rs. 84.25 lacs) {(Maximum amount outstanding Rs. 84.25 lacs (Previous Year Rs. 84.25 lacs)i and iv) DCM Employees Welfare Trust Rs. 279.90 lacs (Ptevious Year Rs. 279.90 lacs) {(Maximum amount outstanding Rs. 279.90 lacs (Previous Year Rs. 279.90 lacs)}.

9. Based upon the information available with the Company, the balance due to the Micto, Small and Medium Enterprises as defined under the MSMED Act, 2006 is Rs. 0.04 lac (Previous Year Rs. 0.40 lac). Further, no interest has been paid or payable during the year under the terms of the MSMED Act, 2006.

10. SEGMENT REPORTING

a) The business segments comprise the following: Textiles - Yarn manufacturing

IT Services — IT Infrastructure services and softwate development.

Real Estate - Development at the Companys real estate site at Bara Hindu Rao / Kishan Ganj, Delhi.

b) Business segments have been identified based on the nature and class of products and services, their customers and assessment of the differential risks and retutns and financial reporting system within the Company.

c) The geographical segments considered for disclosure are based on location of customets, broadly as under:

— within India

— outside India

d) Segment accounting policies:

In addition to the significant accounting policies, applicable to the business as set out in note 1 of Schedule 13 Notes to the Accounts1, the accounting policies in relation to segment accounting are as undet:

(i) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all opetating liabilities and consist principally of creditots and accrued liabilities. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two of more segments ate allocated to the segments on reasonable basis.

(ii) Segment revenue and expenses:

Joint tevenue and expenses of segments are allocated amongst them on a reasonable basis. All othet segment revenue and expenses are directly attributable to the segments.

(iii) Inter segment sales:

Inter-segment sales are accounted for at cost and are eliminated in consolidation.

11. Related party disclosures under Accounting Standard (AS) 18

A. Names of related party and nature of related party relationship I. Subsidiaries (enterprises where conrrol exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

II. Joint venture:

Purearth Infrastructure Limited (PIL)

III. Key management personnel and/or Individuals having direct or indirect control or significant influence, and their relatives:

a. Mr. Naresh Kumar Jain - Managing Director

b. Dr. Vinay Bharat Ram - Chief Executive Officet

c. Mr. Hemant Bharat Ram - Chief Operating and Financial Officer

d. Mr. Sumant Bharat Ram - President - Corporate Affairs

12 .The figures of the previous year have been regrouped /recast to conform to the current years classification.

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