Mar 31, 2018
The directors have pleasure in presenting this 128th Annual Report together with the Audited Financial Statements of your Company for the financial year ended March 31, 2018.
ECONOMIC SCENARIO
Global economy picked up on the cyclical recovery that started in late 2016 and experienced broad based growth in 2017-18. In particular, economic activity gained momentum in the US and Europe. Global manufacturing activity continued to grow on account of favourable financing conditions, accommodative policies, rising investor confidence and increase in commodity prices.
Indiaâs economy picked up some pace in FY 2017-18 and the gross domestic product growth was better than FY 2016-17. In terms of economic performance in the year under consideration, India stood tall amongst its global peers and continues to maintain prospect of significant growth. With an improving business ecosystem, stable macroeconomic indicators and a liberal FDI regime, foreign capital inflow has provided impetus to the domestic economy.
Currently, India is witnessing remarkable transformation. Ease of doing business, mega tax reforms, financial inclusion, universal health insurance, mass digitalisation, infrastructure development and the growth of manufacturing and service sectors are some of the change enablers. More so, the country currently enjoys prudent fiscal conditions, stable inflation, growing trade and steady employment creation to support sustainable GDP growth. Not surprisingly, the country is in the spotlight globally.
There were several structural reforms implemented in the country including the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code amongst others, during the year under review. These structural initiatives are important for enhancing the countryâs future competitiveness.
Though increasing oil prices remains a major risk to the countryâs external balance, we are optimistic about the future. Indian economy is expected to grow at 7.4% in FY2018-19 on the back of higher private consumption & investment, improved global demand, better monsoon, credit uptick and continued reforms undertaken by the Government.
FINANCIAL DATA Rs. / Crores
Financial Year |
Financial Year |
|
ended March |
ended March |
|
31, 2018 |
31, 2017 |
|
Profit before Interest, Depreciation and Tax |
26.82 |
64.18 |
Less: -Finance Cost |
26.13 |
30.18 |
-Depreciation |
36.24 |
36.37 |
Profit before Tax |
(35.55) |
(2.37) |
Less -Provision for tax |
(0.01) |
0.14 |
Profit after tax |
(35.54) |
(2.51) |
Other Compressive income |
0.46 |
(1.72) |
Total Compressive income |
(35.08) |
(4.23) |
Add - Profit brought forward |
133.49 |
137.72 |
Profit available for appropriation |
98.41 |
133.49 |
Appropriations: |
||
Interim Dividend on equity shares |
- |
- |
Proposed Final Dividend on equity shares |
- |
- |
Corporate Dividend Tax |
- |
- |
General Reserves |
- |
- |
Balance Profit carried forward |
98.41 |
133.49 |
The Company has adopted Indian Accounting Standard (Ind AS) with effect from 1st April, 2017. Accordingly, financial statements for the year ended 31st March 2018 have been prepared in accordance with Indian Accounting Standard (Ind AS) as per the Companies (Indian Accounting Standard) Rules, 2015 notified under section 133 of the Companies Act, 2013. Accordingly, financial statement for the year ended 31st March, 2017 have been restated as per Ind AS Rules to make them comparable.
TRANSFER TO RESERVES
No amount is proposed to be transferred to the General Reserve out of the amount available for appropriation.
DIVIDEND
Your directors do not recommend any dividend for the financial year 2017-18.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with provisions of the Companies Act, 2013 and relevant Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.
OPERATIONS OVERVIEW
Textile Division
The Textile Division of the Company is located at Hisar in Haryana with a capacity of 1,14,096 Spindles. During the year under review, the Profit Before Tax (PBT) decreased to Rs. 15.51 crores in financial Year 2017-18 as compared to Rs. 31.21 crores in the previous financial year 2016-17. During the year, the profitability of the Textile Division was lower primarily due to decrease in margin in the first half of the year on account of reduction in yarn prices, lower market demand, rupee appreciation etc. However, in the 2nd half with the arrival of new crop in India, cotton prices fell, thereby improving margins.
Engineering Division
The Engineering Division is supplying castings across all segments in the automotive market: cars, multi-utility vehicles, tractors, light commercial vehicles, heavy commercial vehicles and earth moving equipment.
During the year, the Division achieved total dispatch of 40,957 MT (previous year 44,970 MT). The Engineering Division continued to make losses because of lower volume due to production constraints primarily on account of IR issues, decline in margin because of higher rejection, increased input cost and under recovery of the fixed overheads. The interaction with the workmen by officials of Division at different level have been increased to maintain cordial relations with them and to improve their morale,
The Division is continuously focusing to achieve improved quality standard, skill set improvement and enhancement of manpower and machine efficiencies for better productivity and cost effectiveness across all areas of operations.
IT Division
The IT Division of the Company is an established service provider for managed IT Services globally. The Division has over a decadeâs experience in IT Infrastructure services specializing in networking, analytics, cloud, and digital technologies.
During the year under review, the sales and other income of the Division was Rs. 44.98 crores (previous year Rs. 60.11 crores) and Profit before Tax (PBT) was Rs 1.63 crores (Previous year Rs. 5.98 crores).
The performance of the Division was adversely affected due to IT budget cut backs of primary customers and slow offtake in the US market. The business operations have now been aligned to cater to the newer opportunities in cloud, automation, and digital services in the overseas market, and special thrust on Smart Cities in India. This should help the Division to grow faster in future.
MATERIAL CHANGES AND COMMITMENTS
There was no change in the nature of the business of the Company. There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2018 and the date of this Report.
SCHEMES OF ARRANGEMENT/AMALGMATION
1. The Board of Directors of the Company in its meeting held on October 15, 2016, approved a composite scheme of arrangement, which was further amended by the Board in its subsequent meetings held on February 13, 2017 and May 30, 2018 for the:-
a. Amalgamation of Tiara Investment Holdings Limited into Purearth Infrastructure Limited, a joint venture company with effect from December 31, 2016;
b. Demerger of the Real Estate Undertaking of DCM Limited into DCM Realty and Infrastructure Limited, on a going concern basis with effect from January 1, 2017; and
c. Following the amalgamation as referred to in (a) and demerger as referred to in (b) above, amalgamation of the Amalgamated Purearth into the Resulting DCM Realty leading to Amalgamated DCM Realty, with effect from January 1, 2017.
The above composite scheme is subject to approval from concerned regulatory authorities and sanction of Honâble National Company Law Tribunal, New Delhi.
2. The Board of Directors of the Company in its meeting held on October 15, 2016, approved a Scheme of Arrangement between DCM Limited and DCM Nouvelle Limited, a wholly owned subsidiary of DCM Limited, for the demerger of the cotton textile business undertaking of DCM Limited and vesting of the same with DCM Nouvelle Limited, on a going concern basis with effect from appointed date of January 1, 2017.
3. The Board of Directors of the Company, in its meeting held on March 31, 2017, approved a scheme of amalgamation of Crescita Enterprises Private Limited (âTransferor Companyâ) with the Company with effect from appointed date of March 31, 2017 for the purpose of restructuring of shareholding of âPromoters and Promoter groupâ of the Company.
The Company has received No Objection letter(s) from both BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) in respect of schemes mentioned at 2 & 3 above. Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company have approved both of these schemes in their respective meetings convened & held on Saturday, July 14, 2018, at New Delhi, as per directions of Honâble National Company Law Tribunal, Principal Bench, New Delhi (âNCLTâ). Both of these schemes are subject to sanction of NCLT.
SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES
As on April 1, 2017, the Company had seven subsidiaries and one associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively.
During the year under review, no company has become or ceased to be Companyâs subsidiary, joint venture or associate company.
At present also, the Company has seven subsidiaries and one associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively. There has been no material change in the nature of the business of the subsidiaries and associate company.
Pursuant to provisions of Section 129(3) and other applicable provisions of the Companies Act, 2013 read with Rules made there under, a statement containing salient features of the financial statements, performance and financial position of each of the subsidiaries, associates and joint venture companies in Form AOC-1 is provided as part of the standalone financial statements of the Company at page no. 113 and hence not repeated here for the sake of brevity.
Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements, consolidated financial statements of the Company along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
DIRECTORS
Mr. Jitendra Tuli, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment as a director of the Company. Accordingly, a resolution is included in the Notice of forthcoming 128th Annual General Meeting of the Company for seeking approval of members for his appointment as a director of the Company.
During the year under review, Mr. Dinesh Dhiman was appointed as Executive Director (Engineering Operation) of the Company for a period of 3 years with effect from December 13, 2017 and Mr. Sushil Kapoor was appointed as Executive Director (Engineering Business) of the Company for a period of 1 year with effect from January 15, 2018. Their appointments are subject to approval of shareholders of the Company.
Further Dr. Vinay Bharat Ram has been re-appointed as Managing Director of the company for a period of 3 years with effect from January 30, 2019, subject to approval of shareholders of the Company.
Mr. Chandra Mohan, Non-Executive Independent Director of the Company has resigned from the directorship of the Company with effect from August 7, 2018. Your Board placed on record its appreciation for the contributions made by him during his tenure as Non-Executive Independent Director of the Company.
Mr. Ravi Vira Gupta, Mr. Bipin Maira, Mr. Jitendra Tuli and Dr. Vinay Bharat Ram are more than 75 years of age. Pursuant to Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, necessary resolution(s) for continuation of remaining term of appointments of following directors of the Company w.e.f. April 1, 2019, have been included in the Notice of forthcoming 128th Annual General Meeting of the Company for their continuation as Non-Executive Directors of the Company with effect from 1st April, 2019, for seeking approval of members of the Company:
i. Mr. Ravi Vira Gupta and Mr. Bipin Maira as Non-Executive Independent Directors of the Company; and
ii. Mr. Jitendra Tuli and Dr. Vinay Bharat Ram in their capacity as directors of the Company, liable to retire by rotation.
All the Independent Directors of the Company have given declaration(s) and have confirmed that they meet the criteria of independence as provided in the Section 149(6) of the Companies Act, 2013.
DIRECTORSâ RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, your directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The following persons are Whole-Time Key Managerial Personnel (âKMPâ) of the Company in terms of provisions of Section 203 of the Companies Act, 2013:
a. Dr. Vinay Bharat Ram - Chairman & Managing Director
b. Mr. Sushil Kapoor - Executive Director (Engineering Business) (w.e.f. January 15, 2018
c. Mr. Dinesh Dhiman- Executive Director (Engineering Operation) (w.e.f. December 13, 2018
d. Mr. Hemant Bharat Ram - President (Textiles)
e. Mr. Sumant Bharat Ram - Chief Executive & Financial Officer
f. Mr. Rakesh Kumar Goel - CEO, Textile Division
g. Mr. Varun Sarin - Chief of Operations & Finance, IT Division
h. Mr. Yadvinder Goyal â Company Secretary NUMBER OF BOARD MEETINGS
Eight meetings of the Board of Directors of your Company were held during the year under review (for further details please refer to the Corporate Governance Report, forming part of this Annual Report).
EVALUATION OF BOARD PERFORMANCE
Pursuant to applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, (hereinafter referred as âListing Regulationsâ.), the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors, including Independent Directors. The framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee, based on need and new compliance requirements.
Evaluation of the Board and its Committees is based on various aspects of their functioning, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the meetings, processes followed at the meeting, Board''s focus, regulatory compliances and Corporate Governance, etc. Similarly, for evaluation of individual Directorâs performance, various parameters like Director''s profile, contribution in Board and Committee meetings, regulatory compliances and governance etc., are considered.
Further, the performance of Chairman, Executive Directors and Independent Directors are evaluated on certain additional parameters depending upon their roles and responsibilities.
For the Chairman the criteria includes leadership, relationship with stakeholders etc., for the Executive Directors the criteria includes execution of business plans, risk Management, achievement of business targets, development of plans and policies aligned to the vision and mission of the Company, etc. Similarly, criteria for evaluation of Independent Directors include effective deployment of knowledge and expertise, commitment to his/her role towards the Company and various stakeholders, adherence to applicable codes and policies, effective participation during meetings, etc.
Accordingly, the annual performance evaluation of the Board, its Committees and each Director was carried out for the financial year 2017-18.
The Independent Directors had met separately on February, 8, 2018 without the presence of Non-Independent Directors and the Members of Management and discussed, inter-alia, the performance of Non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non-Executive Directors of the Company.
The Nomination and Remuneration Committee has also carried out evaluation of every Director''s performance.
The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it determines whether to extend or continue their term of appointment, whenever their respective term expires.
The Directors expressed their satisfaction with the evaluation process.
INTERNAL FINANCIAL CONTROL
The Company has a well placed, proper and adequate IFC system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Companyâs IFC system also comprises due compliances with Company''s policies and Standard Operating Procedures (SOP''s) and supported by internal audit from reputed audit firms.
The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board.
All Internal Audit findings and control systems are periodically reviewed by the Audit Committee of the Board of Directors, which provides strategic guidance on Internal Controls.
STATUTORY AUDITORS
M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W/ W-100022), were appointed as Statutory Auditors of the Company for a term of 5 years to hold office from the conclusion of 125th Annual General Meeting (AGM) held on August 18, 2015 till the conclusion of 130th Annual General Meeting of the Company, subject to annual ratification of their appointment by the members at every intermittent AGM of the Company, on such remuneration as may be decided by the Audit Committee of the Board.
Pursuant to recent amendment to Section 139 of the Companies Act, 2013, which became effective from May 7, 2018, the annual ratification of statutory auditors is no longer required. Accordingly the Notice of ensuing Annual General Meeting does not include the proposal for seeking shareholdersâ approval for ratification of appointment of Statutory Auditors of the company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
DIRECTORSâ VIEW ON AUDITORSâ OBSERVATIONS
Management response to the observations of the statutory auditors even though explained wherever necessary through appropriate notes to the Accounts is reproduced hereunder in compliance with the relevant requirements.
Refer ''Basis for Qualified Opinionâ in Auditorsâ Report on Consolidated Financial Statements
Purearth Infrastructure Limited (PIL), a joint venture company, has received advances Rs. 3,196.19 lacs (share of the Group in these advances of joint venture are amounting Rs. 529.29 lacs) for sale bookings of units in Plaza 4 of Central Square project. These advances have been presented as âadvances from customersâ under âother current liabilitiesâ shown as share of joint venture under other current liabilities. The management of PIL is yet to draw up construction plans for Plaza 4 of Central Square project. Further, the revenue including price escalations and other recoveries in terms of the Scheme of Restructuring and understanding arrived with the booking holders of the project cannot be determined at this stage. Thus, the management of PIL could not be able to estimate the likely losses for such bookings under the Plaza 4 of Central Square project and hence has not provided such losses in its financial statements. Therefore, DCM Limited is also not able to provide for its shares of such losses in these consolidated financial statements. (Refer note 57(c) to the consolidated financial statements annexed.)
FIXED DEPOSIT / DEBT REPAYMENT
In terms of the Scheme of Restructuring and Arrangement (SORA) approved by the Honâble Delhi High Court vide its order dated October 29, 2003 under sections 391 â 394 of the Companies Act, 1956 and subsequent modification thereto vide Honâble Delhi High Court order dated April 28, 2011, the Company has complied with its debt repayment obligation under SORA including in respect of fixed deposits, debentures, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a âNo Lien/Designated Accountâ with scheduled banks.
In case an invested amount remains unclaimed and un-encashed for a period of seven years from the date it becomes due for payment, the same has been /will be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Govt.
Your Company has uploaded the relevant details of amount lying unclaimed /un-encashed, as on the date of last Annual General Meeting, on account of matured Fixed Deposits and Debentures on the website of Ministry of Corporate Affairs (MCA) as well as on its website www.dcm.in. Deposit-holders/Debenture-holders may kindly check the said information and if any amount on account of matured deposits, matured debentures, or interest thereon is appearing as unclaimed / un-encashed against their name, they may lodge their claim, duly supported by relevant documents to the Company.
Any person whose unclaimed/un-encashed matured fixed deposits, matured debentures, or interest thereon, have been transferred to the IEPF, can apply for refund, as the case may be, by following the prescribed procedure. Therefore, it is in the interest of deposit-holders/debenture-holders to claim the unclaimed / un-encashed amount of matured fixed deposits, matured debentures or interest thereon with in scheduled time.
No disclosure or reporting is required in respect of deposits covered under Chapter V of the Companies Act, 2013, as the Company has not accepted any deposit after the commencement of the Companies Act, 2013.
RISK MANAGEMENT
The Company has in place Risk Management Process for identifying / managing risks. The Companyâs Risk Management Framework helps in identifying risks and opportunities that may have a bearing on the organizationâs objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. The risk management process consists of risk identification, risk assessment, risk monitoring & risk mitigation. During the year, the Board was informed about measures taken for minimization of risks. The Board provides oversight and reviews the Risk Management framework. In the opinion of the Board there has been no identification of elements of risk that may threaten the existence of the Company.
AUDIT COMMITTEE
At present, the Audit Committee of the Company consists of Mr. Bipin Maira, Chairman, Mr. Ravi Vira Gupta, Mr. L Lakshman, Prof. Sudhir Kumar Jain and Dr. Meenakshi Nayar, as members of the committee. The terms of reference of the Audit Committee are in line with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
At present, the CSR Committee of the Company consists of Dr. Vinay Bharat Ram, Chairman, Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Dr. Meenakshi Nayar, as members of the Committee.
This Committee is responsible for formulating and monitoring the CSR Policy of the Company. The Companyâs CSR Policy is available on the Companyâs website www.dcm.in
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure â I, and forms part of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a statement showing the names and other particulars of the top ten employee and employees drawing remuneration in excess of the limits set out in the said rules is enclosed as Annexure - II and forms part of this report.
A statement showing details pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - IIA and forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186
Particulars of investments made and loans given are provided in the standalone financial statements. (Please refer to Note Nos. 5,6,9,14 & 16 of the standalone financial statements).
Further, pursuant to the approval given by the members of the Company, in its capacity as title holder of land at Bara Hindu Rao / Kishanganj, Delhi (Project land), in respect of which the development rights were vested with joint venture company in terms of SORA, has mortgaged the said land for loans availed in connection with development of real estate project on the said land by joint venture company and also by a body corporate who has been developing the real estate project along with the said joint venture company. The outstanding amount of loans, on which mortgage was created, as on 31.03.2018 was Rs. 334.62 crores (previous year Rs. 213.41 crores).
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis.
The prescribed Form AOC-2 is enclosed as Annexure - III, and forms part of this Report. Your directors draw attention of members of the Company to Note No. 49 to the standalone financial statements which sets out related party disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of Extract of Annual Return in prescribed form MGT-9 is enclosed as Annexure- IV and forms part of this Report and also available on website of the Company i.e. www.dcm.in.
COST AUDIT
The Company is required to maintain cost records as specified by Central Government under section 148(1) of the Companies Act, 2013 in respect of âCotton Textilesâ and Cast Iron Unit of the Company namely âDCM Engineering Productsâ located at Shaheed Bhagat Singh Nagar, Punjab. Accordingly such accounts and records are maintained.
The Board of Directors in its meeting held on August 10, 2018 had approved the following appointments:
i. M/s K G Goyal & Associates, Cost Accountants (Firm Registration Number 000024), as Cost Auditors, for financial year 2018-19, for audit of cost accounting records of the âCotton Textilesâ manufactured by the Company at a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus GST & out-of-pocket expenses, if any;
ii. M/s. V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Cost Auditors, for financial year 2018-19, for audit of Cost Accounts pertaining to Cast Iron Unit of the Company namely âDCM Engineering Productsâ located at Shaheed Bhagat Singh Nagar, Punjab at a remuneration of Rs. 1,25,000/- (Rupees one lac and twenty five thousand only) plus GST & out-of-pocket expenses, if any; and
iii. M/s V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company, for financial year 2018-19, at a remuneration of Rs. 60,000/- (Rupees sixty thousand only) plus GST & out-of-pocket expenses, if any.
In terms of Section 148 of the Companies Act, 2013 and rules made thereunder, remuneration of Cost Auditors as stated above is to be ratified by members of the Company. Accordingly, suitable resolution has been included in the Notice of forthcoming 128th Annual General Meeting for ratification of remuneration payable to Cost Auditors, for financial years 2018-19, by members of the Company.
SECRETARIAL AUDIT
The Board has appointed Mrs. Pragnya Parimita Pradhan, Company Secretary in whole time practice, Proprietor of M/s. Pragnya Pradhan & Associates, Company Secretaries, to conduct Secretarial Audit for financial year 2017-18.
The Secretarial Audit Report for the financial year 2017-18 is enclosed herewith as Annexure - V and forms part of this Report. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark.
CORPORATE GOVERNANCE
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report along with Auditorsâ certificate thereon and Management Discussion and Analysis Report are enclosed, and form part of this report.
DISCLOSURE REQUIREMENTS
1. Details of the familiarization programme of the independent directors are available on the website of the Company at weblink: http://dcm.in/ wp-content/uploads/2016/10/Familirisation-Program-for-Independent-Directors.pdf
2. Policy for determining material subsidiaries of the Company is available on the website of the Company at weblink: http://dcm.in/wp-content/ uploads/2016/10/Material-subsidiary-policy.pdf
3. Policy on materiality of related party transactions and dealing with related party transactions is available on the website of the Company at weblink http://dcm.in/wp-content/uploads/2016/10/DCM-Ltd.-Policy-on-Determination-of-Materiality.pdf
4. The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns, which is available on Companyâs website www.dcm.in. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
5. The Companyâs Remuneration Policy is enclosed as Annexure - VI and forms part of this Report.
6. Annual Report on CSR Activities is enclosed as Annexure - VII and forms part of this Report.
7. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
8. The Company has constituted Internal Complaints Committee(s) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, there were no cases reported under the said Act.
9. During the year under review, the Company has complied with applicable Secretarial Standards issued by Institute of Company Secretaries of India (ICSI).
ACKNOWLEDGEMENT
The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the Company and its management. The Directors place on record their deep appreciation of the dedication and commitment of your Companyâs employees at all levels and look forward to their continued support in the future as well.
For and on behalf of the Board of Directors
For DCM Limited
Sd/-
Place : New Delhi Dr. Vinay Bharat Ram
Date : August 10, 2018 Chairman and Managing Director
Mar 31, 2016
DIRECTORSâ REPORT
The directors have pleasure in presenting this 126th Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2016.
ECONOMIC SCENARIO
The year was marked by an economic slow-down with demand continuing to be sluggish and the rural economy coming under stress due to a below-normal monsoon and unseasonal rains. The international market also faced headwinds in terms of sluggish economies, geo-political issues and currency volatility in some markets.
However, a decade-low slump in oil prices, a major drain on Indiaâs import bill, gave the desired boost to the governments foreign exchange reserves. Inflation and current account deficit levels were maintained below the guidance targets. It provided the much required momentum to the key macro indicators of the Indian economy in the year 2015-16.
The government has taken several initiatives like âEase of Doing Businessâ, fresh investments in the roads and railways sectors, revival of 50 airports, âSmart Cityâ development, urban development, encouraging startups and skill development etc. The impact of most of these measures can only be gauged over a period of time and may not get reflected in the economic numbers immediately and they must hence be interpreted more in terms of laying a foundation for future growth.
India is a bright spot in a depressed global landscape. The Indian economy is on a steady growth path. The consequent increase in private consumption is likely to continue through 2016, making it possible for India to sustain its leading position as the largest fast-growing economy.
FINANCIAL DATA Rs. / Crores
|
Financial Year ended March 31, 2016 |
Financial Year ended March 31, 2015 |
Profit before Interest, Depreciation, Tax and Exceptional Item |
69.14 |
57.67 |
Less: - Finance Cost - Depreciation |
32.56 36.40 |
20.10 24.86 |
Profit before Tax |
0.18 |
12.71 |
Less -Provision for tax |
(3.11) |
(1.21) |
Profit after tax |
3.29 |
13.92 |
Add - Profit brought forward |
151.56 |
146.76 |
Less - Adjustment of Depreciation |
- |
2.35 |
Less â Adjustment for amalgamation |
7.96 |
- |
Profit available for appropriation |
146.89 |
158.33 |
Appropriations: |
|
|
Interim Dividend on equity shares |
2.61 |
2.61 |
Proposed Final Dividend on equity shares |
- |
2.61 |
Corporate Dividend Tax |
0.53 |
1.05 |
General Reserves |
- |
0.50 |
Balance Profit carried forward |
143.75 |
151.56 |
TRANSFER TO RESERVES
No amount is proposed to be transferred to the General Reserve out of the amount available for appropriation.
DIVIDEND
During the financial year ended March 31, 2016, your Company has declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each, out of accumulated profits of past years, in November 2015 and the same was paid in December 2015. Your directors do not recommend the final dividend for the financial year 2015-16. The interim dividend already paid will be considered as final dividend for the financial year 2015-16.
OPERATIONS OVERVIEW Textile Division
The Textile Division of the Company is located at Hisar in Haryana with a capacity of 114096 Spindles. During the year under review, the production of yarn increased by 13% (approx.) to 28490 MT from 25271 MT last year mainly due to the increase in production capacity and ongoing TQM activities on improvements etc. Lower global demand especially from China, increase in wages in the State and high volatility of local currency during the year restricted the Profit before Tax (PBT) to Rs. 6.65 Crores in the financial year 2015-16.
Engineering Division
Pursuant to sanction of Scheme of Amalgamation of DCM Engineering Ltd into & with DCM Ltd. by Honâble Delhi High Court vide its order dated May 16, 2016, the Engineering Business of erstwhile DCM Engineering Limited held under its Unit âDCM Engineering Productsâ stood vested with the Company as going concern from the appointed date of April 1, 2014 and identified as âEngineering Divisionâ of the company.
The said Unit was set up as a Grey Iron Foundry in 1977 with a capacity of 17,000 MTPA (Metric Tons Per Annum). The capacity of this foundry was increased to 35,000 MPTA & 50,000 MTPA in 1994-95 & 2005-06 respectively. Recently, this capacity has been further increased to 72,000 MTPA, making it one of the leading foundries in India, in the segment of automotive castings.
The Engineering Division is supplying castings across all segments in the automotive market: car, multi-utility vehicle, tractor, light commercial vehicle, heavy commercial vehicle and earth moving equipment.
During the year, the Division made total dispatch of 40,544 MT (previous year 47,338 MT). The volume continued to remain low primarily due to lower supplies to the tractor industry which constitutes a major portion of the sales volume of the Division. It was due to low demand in tractor segment on account of poor monsoon in two consecutive years which affected the agri sector, both in terms of income and sentiment.
However, the volume growth in the tractor industry is likely to improve in financial year 2016-17 due to expected normal monsoon besides strong government support in budget for improvement in agricultural productivity and adoption of improved agricultural practices.
The losses during the year were due to continued lower volume, under-recovery of fixed overheads and reduction made in margins to retain market share due to intensive competition by new entrants supplying at lower rate(s).
The continued focus on process improvements and manufacturing techniques across all areas of operations has helped the Division to maintain cost effectiveness.
The sales volume of the Division is expected to increase in the medium and long-term with the commercial supplies of new development items as well as positive growth expected in auto industry on account of healthy economic outlook, finance penetration, investment in roads infrastructure and new launches by original equipment manufacturers.
IT Division
The IT Division of the Company is an established service provider for IT Infrastructure management, networking, Analytics and Cloud related services operating through its offices located in India and USA.
During the year under review, the sales and other income of the Division was Rs. 65.50 crores compared to Rs. 75.54 crores in the previous year. The Profit before Tax (PBT) was Rs. 5.73 crores compared to Rs. 6.44 crores in the previous year.
The said decrease in PBT of around 13% was mainly on account of reduction in the US operations precipitated by certain order closures. The export business however performed better and the Division was able to increase the customer base and build capabilities in newer technology areas.
Investments have been made in building sales bandwidth, acquiring tools for further expanding the export business and broadening the customer portfolio. This should help to insulate operations and provide the desired impetus to the business in future.
MATERIAL CHANGES AND COMMITMENTS
Pursuant to sanction of Scheme of Amalgamation of DCM Engineering Limited (âSubsidiary companyâ/âtransferor companyâ) into & with DCM Limited (âHolding companyâ/âtransferee companyâ) with effect from the appointed date of April 1, 2014 by Honâble Delhi High Court vide its order dated May 16, 2016 which has become effective from May 28, 2016 (i.e. effective date), DCM Engineering Limited ceased to exist from the said effective date. In terms of the Scheme the said Engineering Business of DCM Engineering Ltd held under its Unit namely âDCM Engineering Productsâ is identified as âEngineering Divisionâ of the Company.
There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2016 and the date of this Report.
CHANGES IN SHARE CAPITAL
Pursuant to sanction of Scheme of Amalgamation (âSchemeâ) of DCM Engineering Limited (âsubsidiary companyâ/âtransferor companyâ) into and with your Company by Honâble Delhi High Court vide its order dated May 16, 2016, 1,50,49,988 equity shares held by the Company in erstwhile DCM Engineering Limited stand cancelled. In terms of said Scheme the Company has allotted 12,98,712 equity shares of Rs. 10/- each fully paid-up to other shareholders of DCM Engineering Limited on May 30, 2016, including allotment of 12,98,702 equity shares in aggregate to entities viz. M/s Aggressar Leasing and Finance Pvt. Ltd and M/s Midopa Holdings Pvt. Ltd., forming part of âPromoters and Promoter Groupâ of the Company.
As a result the total shareholding of âPromoters and Promoters Groupâ has increased to 90,66,584 equity shares of Rs. 10 each fully paid up representing 48.54% of the paid up equity capital of the Company.
Further, the issued and subscribed capital of the Company has increased to Rs. 18,67,77,490 and paid-up equity capital increased to Rs. 18,67,46,315 (excluding calls in arrears of Rs. 31,175).
SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES
As on April 1, 2015, the Company had six (6) subsidiaries and one (1) associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively.
However, consequent to amalgamation of erstwhile DCM Engineering Limited (âmaterial subsidiaryâ) with the Company under a Scheme of Amalgamation as sanctioned by Honâble Delhi High Court vide its order dated May 16, 2016 and its becoming effective on May 28, 2016, at present, the Company has five (5) subsidiaries and one (1) associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively. There has been no material change in the nature of the business of the subsidiaries and associate company.
During the year under review, no other company has become or ceased to be Companyâs subsidiary, joint venture or associate company.
Pursuant to provisions of Section 129(3) and other applicable provisions of the Companies Act, 2103 read with Rules made there under, a statement containing salient features of the financial statements, performance and financial position of each of the subsidiaries, associates and joint venture companies in Form AOC-1 is enclosed as Annexure - A to the standalone financial statements of the Company and hence not repeated here for the sake of brevity.
Pursuant to the provisions of Section 136 of the Companies Act, 2103, the financial statements, consolidated financial statements of the Company along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of the Company are prepared in accordance with provisions of the Companies Act, 2013 and relevant Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.
DIRECTORS
Mr. Arun Kumar Vedhera has resigned from the directorship of the Company with effect from May 29, 2016. Your Board placed on record its appreciation for the contributions made by him during his tenure as director of the Company.
Mr. Jitendra Tuli has resigned from the positions of Chairman & Managing Director of the Company and has been relieved from his duties by the Board of Directors of the Company with effect from January 29, 2016. Mr. Tuli however continues on the Board of the Company in his capacity as non-executive director of the Company.
As per recommendations of the Nomination and Remuneration Committee, the Board of Directors in their meeting held on January 29, 2016 have appointed Dr. Vinay Bharat Ram as an Additional Director on the Board with effect from January 29, 2016 and also as Managing Director of the Company subject to the approval of members and other necessary approval(s) w.e.f. January 30, 2016, on payment of remuneration and on other terms and conditions as approved by the Board, for a period of three years. Dr. Vinay Bharat Ram was also appointed as Chairman of the Board of Directors of the Company.
The members of the Company have also approved the appointment of Dr. Vinay Bharat Ram as Director as well as Managing Director of the Company through a recently conducted Postal Ballot.
Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company, in their meeting held on May 30, 2016, have appointed :
i. Mr. L Lakshman, Dr. Raghupati Singhania and Mr. Chandra Mohan as Additional Directors on the Board of the Company with effect from May 30, 2016.
ii. Mr. L Lakshman, Dr. Raghupati Singhania and Mr. Chandra Mohan as Independent Directors of the Company, under Section 149 of the Companies Act, 2013, for a term of five consecutive years with effect from May 30, 2016 subject to the approval of the shareholders of the Company.
Necessary resolutions for seeking approval of members for their appointment as independent directors of the Company have been included in the Notice of forthcoming 126th Annual General Meeting of the Company.
Mr. Jitendra Tuli retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment as a director of the Company. Accordingly, a resolution is included in the Notice of forthcoming 126th Annual General Meeting of the Company for seeking approval of members for his appointment as a director of the Company.
All the Independent Directors of the Company have given declaration(s) and have confirmed that they meet the criteria of independence as provided in the Section 149(6) of the Companies Act, 2013.
DIRECTORSâ RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, your directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The following persons are Whole-Time Key Managerial Personnel (âKMPâ) of the Company in terms of provisions of Section 203 of the Companies Act, 2013:
a. Mr. Jitendra Tuli - Chairman & Managing Director*
b. Dr. Vinay Bharat Ram - Chairman & Managing Director**
c. Mr. Sumant Bharat Ram - Chief Operating & Finance Officer
d. Mr. Hemant Bharat Ram - President (Textiles)
e. Mr. Rakesh Kumar Goel - CEO, Textile Division
f. Mr. Varun Sarin - Chief of Operations & Finance, IT Division
g. Mr. Yadvinder Goyal - Company Secretary
* Ceased to be Chairman & Managing Director of the Company w.e.f. January 29, 2016.
** He was designated as KMP in his capacity as CEO of the Company till 28.01.2016 and thereafter appointed as Chairman & Managing Director of the Company w.e.f. January 30, 2016.
NUMBER OF BOARD MEETINGS
Six meetings of the Board of Directors of your Company were held during the year under review.
EVALUATION OF BOARD PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the diversity of the Board, effectiveness of the board processes, information and functioning etc.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees and effectiveness of committee meetings etc.
The performance of the individual directors was reviewed on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.
The performances of non-independent directors, Board as a whole and of the Chairman was evaluated in a separate meeting of Independent Directors after taking into account the views of executive directors and non-executive directors.
INTERNAL FINANCIAL CONTROL
The Company has in place an established internal control system to ensure proper recording of financial & operational information, compliance of various internal controls and other regulatory/statutory compliances. All Internal Audit findings and control systems are periodically reviewed by the Audit Committee of the Board of Directors, which provides strategic guidance on Internal Controls. During the year, the Company has taken steps to review and document the adequacy and operating effectiveness of internal controls.
STATUTORY AUDITORS
M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W), were appointed as Statutory Auditors of the Company from the conclusion of 125th Annual General Meeting (AGM) till the conclusion of 130th Annual General Meeting of the Company, subject to ratification of their appointment by the members at every intermittent AGM of the Company.
Accordingly, a resolution for ratification of their appointment as Statutory Auditors of the Company has been included in the Notice of forthcoming 126th Annual General Meeting of the Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.
DIRECTORSâ VIEW ON AUDITORSâ OBSERVATIONS
Management response to the observations of the statutory auditors even though explained wherever necessary through appropriate notes to the Accounts is reproduced hereunder in compliance with the relevant legal provisions.
Refer âBasis for Qualified Opinionâ in Auditorsâ Report on Consolidated Financial Statements
Purearth Infrastructure Limited, a joint venture company, has received advances Rs. 3,368.46 lacs (Groupâs share in advances of joint venture are Rs. 552.76 lacs) for certain bookings of units in its Plaza 4 of Central Square Project (referred as âsaid Projectâ). The said advances have been shown as âAdvances from customersâ under âOther Current Liabilitiesâ. The management of the joint venture company is yet to draw up construction plans for said Project. Further, the revenue including price escalations and other recoveries in terms of the Scheme of Restructuring and understanding arrived with the booking holders of the said Project cannot be determined at this stage. Thus, the management of Joint Venture could not be able to estimate the likely losses for such bookings under the âPlaza 4 of Central Square Projectâ and hence have not been provided in the financial statement of the joint venture company. (Refer note 40 to the consolidated financial statements annexed.)
DEBT REPAYMENT
In terms of the Scheme of Restructuring and Arrangement (SORA) approved by the Honâble Delhi High Court vide its order dated October 29, 2003 under sections 391 - 394 of the Companies Act, 1956 and subsequent modification thereto vide Honâble Delhi High Court order dated April 28, 2011, the Company has complied with its debt repayment obligation under SORA including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a âNo Lien/Designated Accountâ with scheduled banks.
In case an invested amount remains unclaimed and un-encashed for a period of seven years from the date it becomes due for payment, the same has been /will be transferred to the Investor Education and Protection Fund established by the Central Govt. (the relevant details of the same are uploaded on the Companyâs website www.dcm.in)
The investors, whose investment has remained unclaimed /un-encashed and in respect of whom a period of seven years has not lapsed from the due date as per SORA, are required to lodge their claim with the Company by surrender of Debenture Certificates/Letter of Allotment/un-encashed payment warrants at the registered office of the Company.
FIXED DEPOSITS
In respect of deposits accepted by the Company in the past under the Companies Act, 1956, the Company has paid the fixed deposit holders in all claimed cases in terms of the provisions of SORA. The amount of unclaimed / legal cases has been deposited in a separate bank account to earmark the funds for the payment of these unclaimed / legal cases. In case a deposit remained unclaimed and un-encashed for a period of seven years from the date it became due for payment, the same has been/will be transferred to the Investor Education and Protection Fund established by the Central Govt.
No disclosure or reporting is required in respect of deposits covered under Chapter V of the Companies Act, 2013, as the Company has not accepted any deposit after the commencement of the Companies Act, 2013.
RISK MANAGEMENT
There is a continuous process of identifying / managing risks through a Risk Management Process. The measures used in managing the risks are also reviewed. Risks identified by the Company broadly fall in the category of operational risk, regulatory risk, financial & accounting risk and foreign currency related risks. The risk management process consists of risk identification, risk assessment, risk monitoring & risk mitigation. During the year, measures were taken for minimization of risks and the Board was informed from time to time. In the opinion of the Board, none of the said risks which have been identified may threaten the existence of the Company.
AUDIT COMMITTEE
At present, the Audit Committee of the Company consists of Mr. Bipin Maira, Chairman, Mr. Ravi Vira Gupta, Mr. L Lakshman, Prof. Sudhir Kumar Jain and Dr. Meenakshi Nayar, as members of the committee. The terms of reference of the Audit Committee are in line with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
At present, the CSR Committee of the Company consists of Dr. Vinay Bharat Ram, Chairman, Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Dr. Meenakshi Nayar, as members of the Committee.
This Committee is responsible for formulating and monitoring the CSR Policy of the Company. The Companyâs CSR Policy is available on the Companyâs website www.dcm.in
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - I, and forms part of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is enclosed as Annexure - II and forms part of this report.
A statement showing details pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - IIA and forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186
Particulars of investment made and loans given are provided in the standalone financial statements. (Please refer to Note Nos. 12 & 14 of the standalone financial statements).
Pursuant to the approval given by the members, the Company in its capacity as title holder of land at Bara Hindu Rao / Kishanganj, Delhi (Project land), in respect of which the development rights were vested with joint venture company in terms of SORA, has mortgaged the said land for loans availed in connection with development of real estate project on the said land by joint venture company and also by a body corporate who has been developing the real estate project along with the said joint venture company. The outstanding amount of loans, on which mortgage was created, as on 31.03.2016 was Rs. 193 crores (previous year Rs. 95 crores)
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis.
The prescribed Form AOC-2 is enclosed as Annexure - III, and forms part of this Report. Your directors draw attention of members to Note No. 41 to the standalone financial statements which sets out related party disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of Extract of Annual Return in prescribed form MGT-9 is enclosed as Annexure- IV and forms part of this Report.
COST AUDIT For Financial Year 2015-16
The Board of Directors had appointed M/s K C Kohli & Co., Cost Accountants (Firm Registration Number 100541), as Cost Auditors for financial year 2015-16 for audit of cost accounting records of âCotton Textileâ manufactured by the Company at a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus service tax & out-of-pocket expenses, if any. Members of the Company have also approved their aforesaid remuneration.
However, consequent to sanction of Scheme of Amalgamation (i.e. âSchemeâ) of DCM Engineering Limited into and with your Company by Honâble Delhi High Court, the Engineering business of DCM Engineering Ltd under its Unit namely âDCM Engineering Productsâ stand vested with the Company as going concern form the appointed date of April 1, 2014 and identified as âEngineering Divisionâ of the Company. The said Cast Iron Unit namely âDCM Engineering Productsâ is covered under ambit of Cost Audit as prescribed under of Section 148 of the Companies Act, 2013. Due to the same, the Board of Directors of the Company at its meeting held on May 30, 2016 have appointed:
i. M/s. V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Cost Auditors, for financial year 2015-16, for audit of Cost Accounts pertaining to Cast Iron Unit of the Company namely âDCM Engineering Productsâ located at Ropar, Punjab at a remuneration of Rs. 1,25,000/- (Rupees one lac and twenty five thousand only) plus service tax & out-of-pocket expenses, if any; and
ii. M/s V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company, for financial year 2015-16, at a remuneration of Rs. 60,000/-(Rupees sixty thousand only) plus service tax & out-of-pocket expenses, if any.
For Financial Year 2016-17
The Board in its meeting held on May 30, 2016 has approved the following appointments:
i. M/s K C Kohli & Co., Cost Accountants (Firm Registration Number 100541), as Cost Auditors, for financial year 2016-17, for audit of cost accounting records of the âCotton Textileâ manufactured by the Company at a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus service tax & out-of-pocket expenses, if any;
ii. M/s. V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Cost Auditors, for financial year 2016-17, for audit of Cost Accounts pertaining to Cast Iron Unit of the Company namely âDCM Engineering Productsâ located at Ropar, Punjab at a remuneration of Rs. 1,25,000/- (Rupees one lac and twenty five thousand only) plus service tax & out-of-pocket expenses, if any; and
iii. M/s V Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company, for financial year 2016-17, at a remuneration of Rs. 60,000/-(Rupees sixty thousand only) plus service tax & out-of-pocket expenses, if any.
In terms of Section 148 of the Companies Act, 2013 and rules made there under, remuneration of Cost Auditors as stated above is to be ratified by members of the Company. Accordingly, suitable resolutions have been included in the Notice of forthcoming 126th Annual General Meeting for ratification of remuneration payable to Cost Auditors, for financial years 2015-16 & 2016-17, by members of the Company.
SECRETARIAL AUDIT
The Board has appointed Mrs. Pragnya Parimita Pradhan, Companies Secretary in wholetime practice, Proprietor of M/s. Pragnya Pradhan & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year 2015-16 is enclosed herewith as Annexure - V and forms part of this Report. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark.
CORPORATE GOVERNANCE
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report along with Auditorsâ certificate thereon and Management Discussion and Analysis Report are enclosed, and form part of this report.
DISCLOSURE REQUIREMENTS
1. Details of the familiarization programme of the independent directors are available on the website of the Company at weblink: http://www.dcm.in/pdf/ Familirisation-program-for%20independe-t%20directors.pdf.
2. Policy for determining material subsidiaries of the Company is available on the website of the Company at weblink: http://www.dcm.in/pdf/Material-subsidiary-policy.pdf
3. Policy on materiality of related party transactions and dealing with related party transactions is available on the website of the Company at weblink: http://www. dcm.in/pdf/Policy-on-related-party-transactions.pdf
4. The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns, which is available on Companyâs website www.dcm.in. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
5. The Companyâs Remuneration Policy is enclosed as Annexure - VI and forms part of this Report.
6. Annual Report on CSR Activities is enclosed as Annexure - VII and forms part of this Report.
7. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
8. During the year under review, there were no cases reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the Company and its management.
The Directors place on record their deep appreciation of the dedication and commitment of your Companyâs employees at all levels and look forward to their continued support in the future as well.
For and on behalf of the Board
For DCM Limited
Sd/-
Place : New Delhi Dr. Vinay Bharat Ram
Date : May 30, 2016 Chairman and Managing Director
Mar 31, 2015
Dear Members,
The directors have pleasure in presenting this 125th Annual Report
together with the Audited Financial Statements of your Company for the
year ended March 31, 2015.
ECONOMIC SCENARIO
The global economic environment in recent years has been challenging
which coupled with slowing growth in some of the leading global
economies has impacted currencies all over the world. However, despite
unpredictable headwinds, the global economic recovery seems to be
gaining momentum. Specifically, the recovery in the United States was
stronger than expected, which provided momentum for the global economic
recovery.
After a tepid start by India's economy in FY 2014-15, there was a
shift to positive sentiments led by commitments from the newly elected
Government at the Centre. FY 2014-15 was indeed a year of
transformation and optimism for the Indian economy.
The new government has ushered in an era of hope and development, and a
vision to create a robust economy for India. An initiative that has
particularly galvanized the entire country is 'Make in India' led
byour Hon'ble Prime Minister. This campaign is designed to transform
India into a global manufacturing hub.
India's economy is in the midst of recovery with lower fiscal and
current account deficit and structural reforms to boost investments.
The Indian economy is expected to grow @ 7.5% in 2015-16 (as per the
World Bank) and is expected to reach around 8% by 2017. While the
various steps are being taken to de-clog the growth, it is expected
that the government's reform agenda will spur economic growth and
increase business sentiment this fiscal year.
FINANCIAL DATA Rs./Crores
Financial Year Financial Year
ended March ended March
31,2015 31,2014
Profit before Interest,
Depreciation, Tax and
Exceptional Item 57.67 63.85
Less: Â Finance Cost 20.10 12.43
 Depreciation 24.86 11.53
Profit before Tax & Exceptional
Item 12.71 39.89
Exceptional Item # - 15.50
Profit before tax 12.71 55.39
Less -Provision for tax (1.21) 19.19
Profit after tax 13.92 36.20
Add -Profit brought forward 146.76 120.41
Less- Adjustment of Depreciation 2.35 Â
Profit available for
appropriation 158.33 156.61
Appropriations:
Interim Dividend on equity
shares 2.61 2.61
ProposedFinalDividendonequityshares 2.61 2.61
Corporate Dividend Tax 1.05 0.88
General Reserves 0.50 3.75
Balance Profit carried
forward 151.56 146.76
# Compensation receivable from developer of real estate project
pursuant to settlement reached in relation to residential complex of
the said project.
TRANSFER TO RESERVES
Your Company proposes to transfer Rs. 0.50 crore to the General Reserve
out of the amount available for appropriation. After the said transfer,
an amount of Rs. 151.56 crores is proposed to be retained in the Profit
and Loss account.
DIVIDEND
During the financial year ended March 31, 2015, your Company has
declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa
only) per equity share of Rs. 10 each, out of accumulated profits of
past years, in the month of
November 2014 and the same was paid in the month of December 2014. In
addition, your directors recommend a final dividend of Rs. 1.50 (Rupee
one and fifty paisa only) per equity share of Rs. 10 each for the
financial year 2014-15. If approved, the total dividend (interim and
final dividend) for the financial year 2014-15 will be Rs. 3.00 (Rupees
three only) per equity share aggregating to Rs. 626.57 lacs (including
Corporate Dividend Tax).
OPERATIONS OVERVIEW Textile Division
The Textile Division of the Company is located at Hisar in Haryana with
a capacity of114096 Spindles. During the year under review, the
production ofyarn increased by32% (approx.) to 25271 MT from 19095 MT
lastyear mainly due to the successful execution of expansion project
through an addition of 39168 spindles at Hisar entailing capital cost
of about Rs. 105 Crores. Lower global demand especially from China,
higher depreciation cost due to expansion and increase in power cost
during the year resulted in lower Profit before Tax (PBT) of Rs. 3.97
Crores as against Rs. 45.25 Crores in the previous year.
IT Division
The IT Division of the Company is an established service provider for
IT Infrastructure Services and Analytics operating through various
offices located in India and USA.
During the year under review, the sales and other income of the
Division increased to Rs. 75.54 Crores from Rs. 64.79 Crores in the
last year. The Division earned Profit before Tax (PBT) of Rs. 6.44
Crores compared to Rs. 4.39 Crores in the previous year.
The increase in volumes both in India & overseas business, better
margins on exports and favorable exchange rates, contributed to the
improved overall performance of the Division. In addition, efforts were
made to broaden the customer base and build capabilities in newer
technology areas. Exports of Infrastructure services showed good growth
during the year.
Investments have been made in building sales bandwidth and acquiring
tools for further expanding the export services business. This should
help to provide the desired impetus to the business in future.
MATERIAL CHANGES AND COMMITMENTS
There was no change in the nature of the business of the Company. There
were no material changes and commitments affecting the financial
position of the Company occurring between March 31, 2015 and the date
of this Report. SCHEME OF AMALGAMATION OF DCM ENGINEERING LIMITED INTO
AND WITH DCM LIMITED
During the year under review, the Board of Directors of your Company on
December 8, 2014 approved the merger of DCM Engineering Limited
('Subsidiary Company') into and with your Company under a Scheme of
Amalgamation (i.e. 'Scheme') under Sections 391 to 394 and other
applicable provisions of the Companies Act, 1956.
The Scheme envisages that upon it becoming effective and with effect
from the appointed date i.e. April 1, 2014, all assets and liabilities
and the entire business of DCM Engineering Ltd. shall be transferred to
and vested in the Company as a going concern. The Scheme is subject to
and would become effective on receipt of all regulatory/statutory
approvals. The said Scheme has been pending approvals from the
concerned regulatory/statutory authorities as at March 31, 2015.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company has
six (6) subsidiaries and one (1) associate company within the meaning
of Section 2(87) and 2(6) of the Companies Act, 2013 ("Act")
respectively, as on March 31, 2015. There has been no material change
in the nature of the business of the subsidiaries and associate
companies. During the year under review, no company has become or
ceased to be Company's subsidiaries, joint ventures or associate
companies.
Pursuant to provisions of Section 129(3) and other applicable
provisions of the Act read with Rules made thereunder, a statement
containing salient features of the financial statements, performance
and financial position of each ofthe subsidiaries, associates and joint
venture companies in Form AOC-1 is enclosed as Annexure - A to the
standalone financial statements of the Company and hence not repeated
here for the sake of brevity.
Pursuant to the provisions of Section 136 of the Act, the financial
statements, consolidated financial statements of the Company along with
relevant documents and separate audited accounts in respect of
subsidiaries, are available on the website of the Company.
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of the Company are prepared in
accordance with provisions of the Companies Act, 2013 and relevant
Accounting Standards issued by the Institute of Chartered Accountants
of India and form part of this Annual Report.
DIRECTORS
Dr. Surendra Nath Pandey, director of the Company passed away on
December 23, 2014. He was 84 years old. He was Chairman of the Board of
Directors of the Company from December 20, 2005 to December 19, 2011.
Your Board placed on record its deep condolences on his sad demise.
Prof. Joginder Singh Sodhi has resigned from directorship of the
Company with effect from February 13, 2015. Your Board placed on record
its appreciation for the contributions made by Prof. Joginder Singh
Sodhi during his tenure as director of the Company.
Mr. Arun Kumar Vedhera was appointed as an Additional Director with
effect from June 20, 2015 and holds office upto date offorthcoming
Annual General Meeting of the Company. The Company has received a
notice under Section 160 of the Companies Act, 2013 along with the
requisite deposit from a member proposing the appointment of Mr. Arun
Kumar Vedhera as a Director of the Company, liable to retire by
rotation. Accordingly, a resolution is included in the Notice of the
forthcoming 125th Annual General Meeting of the Company for seeking
approval of members for his appointment as a Director of the Company,
liable to retire by rotation.
Mr. Jitendra Tuli retires by rotation at the ensuing Annual General
Meeting and being eligible offers himself for re-appointment as a
director of the Company. Accordingly, a resolution is included in the
Notice of forthcoming 125th Annual General Meeting of the Company for
seeking approval of members for his appointment as a Director of the
Company.
The Board of Directors of the Company in their meeting held on November
14, 2014 had appointed Mr. Jitendra Tuli as Chairman and Managing
Director of the Company for a period of one year i.e. with effect from
December 20, 2014 to December 19, 2015. Accordingly, a resolution is
included in the Notice of the forthcoming 125th Annual General Meeting
of the Company for seeking approval of members for his appointment as
Managing Director of the Company. The members of the Company at 124th
Annual General Meeting of the Company held on August 04, 2014 had
appointed Mr. Bipin Maira, Mr. Ravi Vira Gupta, Prof. Sudhir Kumar
Jain & Dr. Meenakshi Nayar, existing directors as Independent Directors
of the Company to hold office for a term upto five consecutive years
commencing from August 4, 2014. The aforesaid Independent Directors
have submitted their Declaration of Independence, as required pursuant
to Section 149(7) of the Companies Act, 2013 stating that they continue
to meet the criteria of Independence as provided in Section 149(6) of
the Companies Act, 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) read with Section 134(5) of the
Companies Act, 2013, your directors state that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities;
(d) the directors had prepared the annual accounts on a going concern
basis;
(e) the directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The following persons are Whole-Time Key Managerial Personnel
('KMP') of the Company in terms of provisions of Section 203 of the
Companies Act, 2013:
a. Mr. Jitendra Tuli  Chairman and Managing Director
b. Dr. Vinay Bharat Ram  Chief Executive Officer
c. Mr. Sumant Bharat Ram  Chief Operating & Finance Officer
d. Mr. Hemant Bharat Ram  President (Textiles)
e. Mr. Rakesh Kumar Goel  CEO, Textile Division
f. Mr. Varun Sarin  Chief of Operations & Finance,
IT Division
g. Mr. Mukesh Sharma  Company Secretary*
h. Mr. Yadvinder Goyal  Company Secretary**
*Ceased to be Company Secretary w.e.f. November 14, 2014.
**Appointed as Company Secretary w.e.f. November 15, 2014.
NUMBER OF BOARD MEETINGS
Six meetings of the Board of Directors of your Company were held during
the year under review.
EVALUATION OF BOARD PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and the corporate
governance requirements as prescribed by Securities and Exchange Board
of India ("SEBI") under Clause 49 of the Listing Agreements
("Clause 49"), the Board of Directors has carried out an annual
evaluation of its own performance, Board committees and individual
directors.
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
diversity of the Board, effectiveness of the board processes,
information and functioning etc. The performances of the committees
were evaluated by the Board after seeking inputs from the committee
members on the basis of the criteria such as the composition of
committees and effectiveness of the committee meetings etc. The
performance of the individual directors was reviewed on the basis of
the criteria such as contribution of the individual director to the
Board and committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in
meetings etc.
The performances of non-independent directors, Board as a whole and of
the Chairman were evaluated in a separate meeting of Independent
Directors after taking into account the views of executive directors
and non-executive directors. INTERNAL FINANCIAL CONTROL
The Company has in place an established internal control system to
ensure proper recording of financial &operational information,
compliance of various internal controls and other regulatory/statutory
compliances. All Internal Audit findings and control systems are
periodically reviewed by the Audit Committee of the Board of Directors,
which provides strategic guidance on Internal Controls.
STATUTORY AUDITORS
The term of office of M/s A.F. Ferguson & Co., Chartered Accountants,
as Statutory Auditors of the Company will expire with the conclusion of
forthcoming Annual General Meeting of the Company. As on commencement
ofthe Companies Act, 2013, M/s A.F. Ferguson & Co., Chartered
Accountants, have completed more than 10 years as Statutory Auditors of
the Company.
A resolution proposing appointment of M/s BSR & Co. LLP, Chartered
Accountants, the Statutory Auditors of the Company in place of M/s A.F.
Ferguson & Co., Chartered Accountants pursuant to Section 139 of the
Companies Act, 2013, forms part of the Notice of the forthcoming 125th
Annual General Meeting of the Company.
The Board place on record its appreciation for the services rendered by
M/s A.F. Ferguson & Co., Chartered Accountants, as the Statutory
Auditors of the Company.
DIRECTORS' VIEW ON AUDITORS' OBSERVATIONS Management response to
the observations of the auditors even though explained wherever
necessary through appropriate notes to the Accounts is reproduced
hereunder in compliance with the relevant legal provisions.
Refer 'Basis for Qualified Opinion' in Auditors' Report on
Consolidated Financial Statements
Purearth Infrastructure Limited, a joint venture company, has received
advances Rs. 3,431.98 lacs (Group's share in advances of joint
venture are Rs. 563.35 lacs) for certain bookings of units in its Plaza
4 of Central Square Project (referred as 'said Project'). The said
advances have been shown as 'Advances from customers' under
'Other Current Liabilities'. The management of the joint venture
company is yet to draw up construction plans for said Project. Further,
the revenue including price escalations and other recoveries in terms
of the Scheme of Restructuring and understanding arrived with the
booking holders of the said Project cannot be determined at this stage.
Thus, the management of Joint Venture could not be able to estimate the
likely losses for such bookings under the 'Plaza 4 of Central Square
Project' and hence have not been provided in the financial Statement
of the joint venture company. (Refer note 40 to the consolidated
financial statements annexed.)
DEBT REPAYMENT
The Company has complied with its debt repayment obligation under the
Scheme ofRestructuring and Arrangement (SORA) approved by the Hon'ble
Delhi High Court vide its order dated October 29, 2003 under sections
391 Â 394 of the Companies Act, 1956 and subsequent modification
thereto vide Hon'ble Delhi High Court order dated April 28, 2011.
Where such amount has not been claimed by the creditors, the same has
been deposited in separate designated Bank Account(s) in scheduled
bank(s).
In case an invested amount remains unclaimed and un-encashed for a
period of seven years from the date it becomes due for payment, the
same has been / will be transferred to the Investor Education and
Protection Fund established by the Central Govt. (the relevant details
of the same are uploaded on the Company's website www.dcm.in)
The investors, whose investment has remained unclaimed /un-encashed and
in respect of whom a period of seven years has not lapsed from the due
date as per SORA, are required to lodge their claim with the Company by
surrender ofDebenture Certificates/Letter ofAllotment/un-encashed
payment warrants at the registered office of the Company.
FIXED DEPOSITS
No disclosure or reporting is required in respect of deposits covered
under Chapter V of the Companies Act, 2013, as there were no
transactions in respect of the same during the year under review.
However in respect of deposits accepted by the Company under the
Companies Act, 1956, the Company has paid the fixed deposit holders in
all claimed cases in terms of the provisions of SORA. The amount of
unclaimed / legal cases has been deposited in a separate bank account
to earmark the funds for the payment of these unclaimed / legal cases.
In case a deposit remained unclaimed and un-encashed for a period of
seven years from the date it became due for payment, the same has
been/will be transferred to the Investor Education and Protection Fund
established by the Central Govt.
RISK MANAGEMENT
There is a continuous process of identifying / managing risks through a
Risk Management Process. The measures used in managing the risks are
also reviewed. The risks identified by the Company broadly fall in the
category of operational risk, regulatory risk, financial & accounting
risk & foreign currency related risks. The risk management process
consists of risk identification, risk assessment, risk monitoring &
risk mitigation. During the year, measures were taken for minimization
of risks and the Board was informed from time to time. In the opinion
of the Board, none of the said risks which have been identified may
threaten the existence of the Company.
AUDIT COMMITTEE
The Audit Committee of the Company consists of Mr. Bipin Maira,
Chairman, Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Prof. Sudhir Kumar
Jain. The Board of Directors of your Company has revised its terms of
reference to make it in line with the requirements of Section 177 of
the Companies Act, 2013 and clause 49 of the listing agreement.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors of your Company has constituted a CSR Committee
comprising of Mr. Ravi Vira Gupta, Chairman, Prof. Joginder Singh Sodhi
and Dr. Meenakshi Nayar, as members of the committee. Pursuant to
resignation of Prof. Joginder Singh Sodhi from directorship of the
Company, the Board of Directors of your Company in their meeting held
on February 14, 2015 has reconstituted the CSRCommittee with Mr. Ravi
Vira Gupta, Chairman,
Mr. Bipin Maira and Dr. Meenakshi Nayar, as members of the Committee.
This Committee is responsible for formulating and monitoring the CSR
Policy of the Company. The Company's CSR Policy is available on the
Company's website www.dcm.in.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, as required under
Section 134(3)(m) ofthe Companies Act, 2013 read with Rule 8(3) ofthe
Companies (Accounts) Rules, 2014 is enclosed as Annexure  I, and
forms part of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the
provisions of Section 197(12) of the Companies Act, 2013 read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other particulars of the employees drawing remuneration in excess of
the limits set out in the said rules is enclosed as Annexure II and
forms part of this report.
A statement showing details pertaining to remuneration and other
details as required under Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is enclosed as Annexure - IIA and
forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 Particulars of
investment made and loans given are provided in the standalone
financial statements. (Please refer to Note Nos. 13 & 14 of the
standalone financial statements).
The Company, in its capacity as title holder of land at Bara Hindu Rao
/ Kishanganj, Delhi, in respect of which the development rights were
vested with joint venture company in terms of SORA, has mortgaged the
said land for loans availed by joint venture company in connection with
development of real estate project on the said land. The outstanding
amount of loans, on which mortgage was created, as on 31.03.2015 was
Rs. 95 crores (previous year Rs. 80.75 crores)
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts /
arrangements / transactions entered by the Company during the financial
year with related parties were in the ordinary course of business and
on arm's length basis. During the year, the Company has not entered
into any contracts / arrangements / transactions with related parties
which could be considered material in accordance with the policy of the
Company on materiality of related party transactions.
The prescribed Form AOC-2 is enclosed as Annexure - III, and forms part
of this Report. Your directors draw attention of members to Note 41 to
the standalone financial statements which sets out related party
disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of Extract of Annual Return in prescribed form
MGT-9 is enclosed as Annexure- IV and forms part of this Report.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 and rules made
thereunder, the Board of Directors have appointed M/s K C Kohli & Co.,
Cost Accountants, as the Cost Auditors to conduct the audit of the cost
accounting records of the 'cotton textile' manufactured by the
Company for the Financial Year 2015-16 at a remuneration of Rs.
50,000/- (Rupees fifty thousand only) plus Service tax and out of
pocket expenses, if any. In terms of said Section 148 and rules made
there under, remuneration of Cost Auditors is to be ratified by members
of the Company. Accordingly, a resolution is included in the Notice of
forthcoming Annual General Meeting for ratification of their
remuneration by members of the Company.
SECRETARIAL AUDIT
The Board has appointed M/s Pragnya Pradhan & Associates, Company
Secretaries, to conduct Secretarial Audit for the financial year
2014-15. The Secretarial Audit Report for the financial year 2014-15 is
enclosed herewith as Annexure - V and forms part of this Report. The
Secretarial Audit Report does not contain any qualifications,
reservation or adverse remark.
CORPORATE GOVERNANCE
As per Clause 49 of the listing agreements entered into with the stock
exchanges, Corporate Governance Report along with Auditors'
certificate thereon and Management Discussion and Analysis Report are
enclosed, and form part of this report.
DISCLOSURE REQUIREMENTS
1. Details of the familiarization programme of the independent
directors are available on the website of the Company at weblink:
http://www.dcm.in/
pdf/Familirisation-program-for%20independe-t%20directors.pdf.
2. Policy for determining material subsidiaries of the Company is
available on the website of the Company at weblink:
http://www.dcm.in/pdf/ Material-subsidiary-policy.pdf
3. Policy on materiality of related party transactions and dealing with
related party transactions is available on the website of the Company
at weblink:
http://www.dcm.in/pdf/Policy-on-related-party-transactions.pdf
4. The Company has formulated and published a Whistle Blower Policy to
provide Vigil Mechanism for employees including directors of the
Company to report genuine concerns, which is avaliable on Company's
website www.dcm.in. The provisions of this policy are in line with the
provisions ofSection 177(9) of the Companies Act, 2013 and the revised
Clause 49 of the Listing Agreements with stock exchanges.
5. The Company's Remuneration Policy is enclosed as Annexure - VI and
forms part of this Report.
6. Annual Report on CSR Activities is enclosed as Annexure - VII and
forms part of this report.
7. There were no significant or material orders passed by the
Regulators or Courts or Tribunals which impact the going concern status
and Company's operations in future.
8. During the year under review, there were no cases reported under the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
ACKNOWLEDGEMENT
The Directors wish to acknowledge and thank the Central and State
Governments and all regulatory bodies for their continued support and
guidance. The Directors thank the shareholders, customers, business
associates, Financial Institutions and Banks for the faith reposed in
the Company and its management.
The Directors place on record their deep appreciation of the dedication
and commitment of your Company's employees at all levels and look
forward to their continued support in the future as well.
For and on behalf of the Board
Sd/-
Place: New Delhi Jitendra Tuli
Date : June 20, 2015 Chairman and Managing Director
Mar 31, 2014
Dear Members,
The directors have pleasure in presenting this 124 Annual Report
together with the Audited Financial Statements of your Company for the
year ended March 31, 2014.
ECONOMIC AND INDUSTRY SCENARIO
The Indian economy, with vast potential, faces many challenges. The
economic landscape in 2013 continued to be under pressure with year-on-
year growth in gross domestic product declining to below 5 percent,
primarily accounted from agriculture and services. On the contrary,
industry growth through the year remained flat. High interest rates,
low policy visibility, delayed environmental clearances, issues around
land acquisitions and fuel linkages, along with increasing inflation
continued to impact global investor confidence in India.
During the year, the rupee depreciated to an all-time low. Towards the
end of the year, certain focused measures by the government and central
bank, helped to bring in some positive trends as the rupee stabilized,
exports increased, current account deficit declined and project
clearances were fast-tracked.
The slow GDP growth appears to have bottomed out and with the formation
of new government, economic growth is expected to accelerate in the
next fiscal 2014-15.
Rating agency, CRISIL has forecasted a 6% GDP growth for financial year
2014-15 compared with an expected 4.8% for financial year 2013-14. This
forecast is premised on normal monsoons, continuation of the recent
reform process and widely anticipated global recovery. On the downside,
growth could weigh in below 5% yet again if the above assumptions do
not play out.
In view of the above, the Company remains cautiously optimistic in its
outlook.
FINANCIAL DATA Rs./Crores
Financial Year Financial Year
ended March ended March
31, 2014 31, 2013
Profit before Interest, 63.85 66.05
Depreciation, Tax and Exceptional Item
Less: ÂFinance Cost 12.43 14.98
 Depreciation 11.53 10.20
Profit before Ta x & Exceptional Item 39.89 40.87
Exceptional Item # 15.50 -
Profit before tax 55.39 40.87
Less -Provision for tax 19.19 11.86
Profit after tax 36.20 29.01
Add -Profit brought forward 120.41 99.78
Add- Reversal of Corporate Dividend Tax - 0.71
Profit available for appropriation 156.61 129.50
Appropriations:
Interim Dividend on equity shares 2.61 2.61
Proposed Final Dividend on equity shares 2.61 2.61
Corporate Dividend Tax 0.88 0.87
General Reserves 3.75 3.00
Balance Profit carried forward 146.76 120.41
Balance Profit carried forward 146.76 120.41
# Compensation receivable from developer of real estate project
pursuant to settlement reached in relation to residential complex of
the said project.
OPERATIONS OVERVIEW
Textile Division
The Textile Division of the Company is located at Hisar in Haryana with
a capacity of 75880 Spindles. During the year under review, the
production of yarn increased by 9% (approx.) to 19095 MT from 17483 MT
last year.
The Division earned Profit Before Tax (PBT) of Rs. 45.12 Crores as
against Rs. 43.02 Crores in the previous year. Good global demand and
rupee depreciation during the year contributed to higher profits.
We are pleased to inform that the expansion project of the Division
through an addition of 39168 spindles at Hisar entailing capital cost
of about Rs. 105 Crores is now in its final phase of completion. The
Division has successfully executed the expansion project without any
cost or time overrun, raising the total capacity of the Division to
115048 spindles. The expansion is with higher level of automation with
latest machineries.
Besides, the TQM drive is going on apace with very good participation
of employees at all levels.
IT Division
The IT Division of the Company is an established service provider for
Managed IT Services operating though various offices located in India
and in USA. During the year under review the sales and other income of
the Division increased to Rs 64.79 Crores from Rs 45.00 Crores in the
last year. The Division earned Profit before Tax (PBT) of Rs 4.39
Crores compared to Rs 1.51 Crores in the previous year. This was
possible on account of increase in volumes both in India & overseas
business, better margins on export business, and favourable exchange
rate. On the domestic front, efforts were made to build capabilities
as a result of which some new customers were added including Government
department(s) and PSUs. Exports of Infrastructure services showed good
growth during the year. Investments have been made in building sales
bandwidth and acquiring tools for further expanding the export services
business. This should help to provide the desired impetus to the
offshore business in future.
DEBT REPAYMENT
The Company has complied with its debt repayment obligation under the
Scheme of Restructuring and Arrangement (SORA) approved by the Hon''ble
Delhi High Court vide its order dated October 29, 2003 under section
391 - 394 of the Companies Act, 1956 and subsequent modification
thereto vide Hon''ble Delhi High Court order dated April 28, 2011. Where
such amount has not been claimed by the creditors, the same has been
deposited in separate designated Bank Account(s) in scheduled bank(s).
In case an invested amount remains unclaimed and un-encashed for a
period of seven years from the date it becomes due for payment, the
same has been / will be transferred to the Investor Education and
Protection Fund established by the Central Govt. (the relevant details
of the same are uploaded on the Company''s website www.dcm.in)
The investor whose investment has remained unclaimed /un-encashed and
which became due for payment in July 2007 and onwards is required to
lodge their claim with the Company by surrender of Debenture
Certificates/Letter of Allotment/ un-encashed payment warrants at the
registered office of the Company.
FIXED DEPOSITS
The Company has paid the fixed deposit holders in all claimed cases in
terms of the provisions of SORA. The amount of unclaimed / legal cases
has been deposited in a separate bank account to earmark the funds for
the payment of these unclaimed / legal cases. In case a deposit amount
has remained unclaimed and un-encashed for a period of seven years from
the date it became due for payment, the same has been/will be
transferred to the Investor Education and Protection Fund established
by the Central Govt.
DIRECTORS
The Board of directors of the Company on November 13, 2013 had
appointed Mr. Jitendra Tuli as Managing Director for a period of one
year i.e. with effect from December 20, 2013 to December 19, 2014. His
appointment is placed for the approval and ratification of shareholders
at the Annual General Meeting scheduled to be held on August 4, 2014.
Sh. Naresh Kumar Jain, director of the Company passed away on December
8, 2013. He was 78 years old and had worked as Managing Director of
the Company for more than one decade. Your Board placed on record its
deep condolences on his sad demise. Prof. Joginder Singh Sodhi retires
by rotation at the ensuing Annual General Meeting and being eligible
offers himself for re-appointment as a director of the Company. His
re-appointment is placed before the shareholders of the Company at the
ensuing Annual General Meeting.
Fur ther, in terms of Sections 149 & 161 of the Companies Act, 2013,
Dr. M eenakshi Nayar has been appointed as an additional director of
the Company by the Board in its meeting held on May 28, 2014, and holds
office up to date of ensuing Annual General Meeting. A resolution is
proposed for her appointment as director of the Company at the ensuing
Annual General Meeting. Pursuant to Section 149 of the Companies Act,
2013, your directors are seeking appointments of Mr. Bipin Maira, Mr.
Ravi Vira Gupta, Prof. Sudhir Kumar Jain & Dr. Meenakshi Nayar as
Independent Directors of the Company for a term of 5 y e a r s .
CONSOLIDATED ACCOUNTS
The Consolidated Financial Statements of the Company are prepared in
accordance with relevant Accounting Standards issued by the Institute
of Chartered Accountants of India and forms part of this Annual Report.
DIRECTORS'' VIEW ON AUDITORS'' OBSERVATIONS Management response to the
observations of the auditors even though explained wherever necessary
through appropriate notes to the Accounts is reproduced hereunder in
compliance with the relevant legal provisions. Reference para Emphasis
of Matter in Auditors'' Report on Standalone Annual Financial Statement
The "Scheme of Restructuring and Arrangement", sanctioned by the High
Court of Delhi as further modified vide its Order dated April 28, 2011
(hereinafter referred to as SORA) provides that it is required to be
implemented as a whole and in totality. The effect of the financial and
business restructuring, as envisaged in the above Scheme, has already
been considered in preparing the accounts by the Company during the
previous years except for the "leasehold definitive agreement" has not
become effective pending compliance with certain conditions contained
therein and therefore, the corresponding transaction has not been
effected in the accounts. The management has confirmed to the Auditors
that the conditions contained in the "leasehold definitive agreement"
would be complied with and would not result in any adverse impact on
the financials of the Company or on the successful implementation of
the SORA. The Auditors'' opinion is not qualified in respect of this
matter (refer note 30 of notes to Standalone Financial Statements
annexed). Refer ÂBasis for Qualified Opinion'' in Auditors'' Report on
Consolidated Financial Statements
Purearth Infrastructure Limited, a joint venture company, has received
advances Rs. 3,730.08 lacs (Group''s share in advances of joint venture
are Rs. 612.26 lacs) for sale bookings of units in its Plaza 4 of
Central Square Project (referred as Âsaid Project''). The said advances
have been shown as Âadvances from customers'' under other current
liabilities. The management of the joint venture company is yet to draw
up construction plans for said Project. Further, the revenue including
price escalations and other recoveries in terms of the Scheme of
Restructuring and understanding arrived with the booking holders of the
said Project cannot be determined at this stage. Thus, the likely
losses for such bookings under the ÂPlaza 4 of Central Square Project''
could not be estimated and hence have not been provided in the
financial Statement of the joint venture company. (Refer note 40 to the
consolidated financial statements annexed.)
DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 As required under
Section 217(2AA) of the Companies Act, 1956, your Directors state that:
- While preparing Annual Accounts, the applicable Accounting Standards
have been followed along with proper explanation relating to material
departures;
- The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent which gives a true and fair view of affairs of the Company and
of the profit or loss of the Company;
- The Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
- The Directors have prepared accounts on a going concern basis.
DIVIDEND
During the financial year ended March 31, 2014, your Company has
declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa
only) per equity share of Rs. 10 each in the month of November 2013 and
it was paid in the month of December 2013. In addition, your directors
recommend a final dividend of Rs.1.50 (Rupee one and fifty paisa only)
per equity share of Rs 10 each for the financial year 2013-14. If
approved, the total dividend (interim and final dividend) for the
financial year 2013-14 will be Rs.3.00 (Rupees three only) per equity
share aggregating to Rs. 6.10 crores (including Dividend Distribution
Tax). Dividend paid for the previous Financial Year 2012-13 was Rs.
3.00 (Rupees Three only) per equity share of Rs. 10 each.
TRANSFER TO RESERVES
Your Company proposes to transfer Rs.3.75 crores to the General Reserve
out of the amount available for appropriation. An amount of Rs 146.76
crores is proposed to be retained in the Profit and Loss account.
PERSONNEL
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees) Rules,
1975, and forming part of the Report is annexed hereto.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS & OUTGO
The details as required under the Companies (Disclosure of Particulars in
Report of Board of Directors) Rules 1988 are annexed.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956 relating
to Subsidiary Companies is attached to the accounts. The Central Govt.
has issued a General Circular No: 2/2011 dated February 8, 2011
directing that the provision of section 212 shall not apply in relation
to subsidiaries of those companies which comply with certain disclosure
requirements. In terms of the said general exemption granted by the
Central Government under Section 212(8) of the Companies Act, 1956 and
as per resolution passed by the Board of Directors at their meeting
held on February 12, 2014, the Audited Statements of Accounts and the
Auditors'' Reports thereon for the year ended March 31, 2014 along with
the Reports of the Board of Directors of the Company''s Subsidiaries
have not been annexed. The Company will make available these documents
upon request by any member of the Company interested in obtaining the
same. These documents are also made available on the website of the
Company www.dcm.in.
However, as per the requirement of Accounting Standard AS-21 notified
in the Companies (Accounting Standards) Rules, 2006, Consolidated
Financial Statements presented by the Company include the financial
information of its subsidiaries.
AUDIT COMMITTEE
The Audit Committee of the Company consists of Mr. Bipin Maira,
Chairman,Mr. Ravi Vira Gupta, Mr. Jitendra Tuli and Prof. Sudhir Kumar
Jain. The Boardof Directors of your Company has revised its terms of
reference to make it in linewith the requirements of Section 177 of the
Companies Act, 2013 and clause 49of the listing agreement.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR
COMMITTEE)
In terms of requirements of Section 135 of the Companies Act, 2013 and
rules issued there under, the Board of Directors of your Company has
constituted a CSR Committee comprising of Mr. Ravi Vira Gupta, Chairman,
Prof. Joginder Singh Sodhi and Dr. Meenakshi Nayar, as members of the
committee. This Committee is responsible for formulating and monitoring
the CSR Policy of the Company.
NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of your Company has renamed and reconstituted
itsexisting ''Compensation Committee'' as ''Nomination and Remuneration
Committee'' and have also revised its terms of reference to make it in
line withthe requirements of Section 178 of the Companies Act, 2013 and
clause 49 ofthe listing agreement. At present, the ''Nomination and
Remuneration Committee'' comprised of Mr. Bipin Maira, Chairman, Prof.
Sudhir Kumar Jain and Mr. Ravi Vira Gupta, as members of the Committee.
This Committee is entrusted with the power and responsibility by the
Boardof identifying and recommending to the Board appointment & removal
of Directors, Key Managerial Personnel and Senior Management Personnel
of the Company and to formulate and monitor their Remuneration Policy.
Company Secretary of the Company acts as Secretary to all these
Committees.
AUDITORS
The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered
Accountants,
th
retire at the conclusion of the ensuing 124 Annual General Meeting and
have confirmed their eligibility & willingness to accept office, if
re-appointed. Your Board recommends their re-appointment as statutory
Auditors of the Company from the conclusion of 124th Annual General
Meeting to the conclusion of the 125th Annual General Meeting of the
Company.
COST AUDIT
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed cost audit for cotton textile manufactured by
the Company. Now, as required under Section 148 of the Companies Act,
2013, the Board of Directors have re- appointed M/s K C Kohli & Co.,
Cost Accountants, as the Cost Auditors for cotton textile manufactured
by the Company for the Financial Year 2014-15 at a remuneration of Rs.
50,000/-(Rupees fifty thousand only). In terms of said Section 148 and
rules issued there under, remuneration of Cost Auditors is to be
ratified by members of the Company. Accordingly, a resolution is
included in the Notice of ensuing Annual General Meeting for
ratification of their remuneration by members of the Company. The Cost
Audit report for the financial year 2013-14 will be filed with the
Central Government as per statutory timeline. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges,
Corporate Governance Report, Management Discussion & Analysis and
Auditors'' certificate regarding compliance of Corporate Governance are
made part of the Annual Report.
SOCIAL RESPONSIBILITY STATEMENT
The Textile Division of the Company is running a School upto 10th
standard in its campus at Hisar, Haryana. There are approx 450 students
on the rolls in different classes.
ACKNOWLEDGEMENTS
The Directors wish to acknowledge and thank the Central and State
Governments and all regulatory bodies for their continued support and
guidance. The Directors thank the shareholders, customers, business
associates, Financial Institutions and Banks for the faith reposed in
the Company and its management. The Directors place on record their
deep appreciation of the dedication and commitment of your Company''s
employees at all levels and look forward to their continued support in
the future as well.
For and on behalf of the Board
Sd/-
Jitendra Tuli
Chairman and Managing Director
Place: New Delhi
Date : May 28, 2014
Mar 31, 2013
The directors have pleasure in presenting their 123rd Annual Report
alongwith Audited Financial Statements of the Company for the year
ended March 31, 2013
FINANCIAL DATA Rs./Crores
Financial
Year Financial
Year
ended March ended March
31, 2013 31, 2012
Profit/(Loss) before Interest, 66.05 16.20
Depreciation, Tax and
Exceptional Item
Less: ÂFinance Cost 14.98 19.76
 Depreciation 10.20 9.90
Profit/(Loss) before Tax &
Exceptional Item 40.87 (13.46)
Exceptional Item # 18.00
Profit/(Loss) before tax 40.87 4.54
Less -Provision for tax 11.86 (0.91)
Profit/(Loss) after tax 29.01 5.44
Add  Profit/(Loss) brought forward 99.78 99.28
Add Reversal of Corporate Dividend Tax 0.71 0.71
Profit available for appropriation 129.50 105.43
Appropriations:
Interim Dividend on equity shares 2.61
Proposed Final Dividend on equity shares 2.61 4.34
Corporate Dividend Tax 0.87 0.71
General Reserves 3.00 0.60
Balance Profit carried forward 120.41 99.78
# Compensation receivable from developer of real estate project
pursuant to settlement
reached in relation to flatted factory complex of the said project.
OPERATIONS OVERVIEW Textile Division
The Textile Division of the Company is located at Hisar in Haryana. It
is an ISO9001 certified unit. During the year under review, the sales
and other income of the division has increased to Rs. 345.97 Crore from
Rs. 293.34 Crores last year recording a growth of 17.94%. This year
there is Profit before Tax of Rs. 43.02 Crores as compared to loss of
Rs. 28.41 Crores in previous year. The said loss in the previous year
was due to margins turning negative on account of steep fall in cotton
yarn prices and high cost of cotton inventory procured in cotton season
during 2010-11. The division has performed well during the year because
of strong cotton yarn prices in export market, operational efficiency
and control of operational costs during the financial year.
The division has decided to expand its production capacity by addition
of 39168 spindles at Hisar with capital cost of about Rs. 105 Crs.
Total capacity of the division after the said expansion will be 115416
spindles. The Project is proposed to commence production from February
2014 and full production by September 2014. The said expansion will be
with higher automation with latest machineries. The proposed project
would help to increase efficiency/ productivity and quality.
Besides expanding its export market by introducing value added
products, the Division is also focusing to broaden the domestic
customer base by developing new customers.
A Special Leave Petition (SLP) filed by the Haryana Urban Development
Authority (HUDA) against the order of Division Bench of Hon''ble Punjab
and Haryana High Court passed in favour of the Company on the
resumption of 250 acres of the Company''s land by the State of Haryana,
was dismissed by the Hon''ble Supreme Court on March 22, 2013. In view
of this dismissal order, this matter has attained finality in favour of
the Company.
IT Division
The IT division of the Company is an established service provider for
Managed IT Services globally. The Division has over a decade''s
expertise in Systems and Storage Administration and has been supporting
customers to optimize their IT investments through its highly skilled
and certified pool of engineers and cost-effective remote management
capabilities, backed by robust processes. The Division has enlarged
its product portfolio by adding the services in the area of
Virtualization, Messaging, Networking etc.
During the year under review the sales and other income of the IT
Division increased to Rs 45.00 Crores from Rs 40.17 Crores last year,
with Profits before Ta x of Rs 1.51 Crores compared to Rs 0.38 Crores
in the previous year. This was possible mainly on account of increase
in export volume and better margins. On the domestic front, efforts
were made to build capabilities as a result of which some new customers
were added including Government department(s) and PSUs. Exports of
Infrastructure services showed good growth during the year. Investments
have been made in building sales bandwidth and acquiring tools for
further growing the export services business. This should help to
provide the desired impetus to the offshore business in future.
DEBT REPAYMENT UNDER SCHEME OF RESTRUCTURING AND ARRANGEMENT (SORA)
The Company has complied with its debt repayment obligation under the
Scheme of Restructuring & Arrangement (SORA) approved by the Hon''ble
Delhi High Court vide its order dated October 29, 2003 under section
391 - 394 of the Companies Act, 1956 and subsequent modification
thereto vide Hon''ble Delhi High Court order dated April 28, 2011. Where
such amount has not been claimed by the creditors, the same have been
deposited in separate designated Bank Account (s) in scheduled bank(s).
In case, an invested amount remained unclaimed and un-encashed for a
period of seven years from the date they became due for payment, the
same have been/will be transferred to the Investor Education and
Protection Fund established by the Central Govt.
The investor whose investment remained unclaimed /un-encashed and
became due for payment during the month of June 2006 and onwards are
required to lodge their claim with the Company by surrender of
Debenture Certificates/ letter of allotment /un-encashed payment
warrants at the registered office of the Company.
FIXED DEPOSITS
The Company has paid the fixed deposit holders in all claimed cases in
terms of the provisions of the Scheme of Restructuring and Arrangements
approved by the Hon''ble High Court of Delhi and as modified vide order
dated April 28, 2011. The amount of unclaimed / legal cases has been
deposited in a separate bank account to earmark the funds for the
payment of these unclaimed / legal cases. In case, a deposit amount
remained unclaimed and un-encashed for a period of seven years from the
date they became due for payment, the same have been/will be
transferred to the Investor Education and Protection Fund established
by the Central Govt.
DIRECTORS
The Board of directors of the Company on November 9, 2012 had appointed
Mr. Jitendra Tuli as Managing Director for a period of one year i.e.
with effect from December 20, 2012 to December 19, 2013. His
appointment is placed for the approval and ratification of shareholders
at the Annual General Meeting scheduled to be held on July 19, 2013.
Mr. Naresh Kumar Jain retires by rotation in the ensuing Annual General
Meeting and being eligible, offers himself for reappointment as
director of the Company. His re-appointment is placed before the
shareholders of the Company at the ensuing Annual General Meeting.
Prof Sudhir Kumar Jain, who has been appointed as additional director
of the Company by the Board in its meeting dated November 9, 2012 under
section 260 of the Companies Act, 1956, holds office upto the ensuing
Annual General Meeting. The Company has received a notice from a member
of the Company under section 257 of the Companies Act, 1956 signifying
his intention to propose him as a candidate for the office of director,
and accordingly a resolution is proposed for his re-appointment as
director of the Company, liable to retire by rotation in the ensuing
Annual General Meeting.
Mr. Ravi Vira Gupta, who has also been appointed as additional director
of the Company by the Board in its meeting dated May 27, 2013 under
section 260 of the Companies Act, 1956, holds office upto the ensuing
Annual General Meeting. The Company has received a notice from a member
of the Company under section 257 of the Companies Act, 1956 signifying
his intention to propose him as a candidate for the office of director,
and accordingly a resolution is proposed for his re-appointment as
director of the Company, liable to retire by rotation in the ensuing
Annual General Meeting.
DIRECTORS'' VIEW ON AUDITORS'' OBSERVATIONS Management response to the
observations of the auditors even though explained wherever necessary
through appropriate notes to the financial statements is reproduced
hereunder in compliance with the relevant legal provisions. Reference
para (i) of Basis for Qualified Opinion in the Auditors'' Report The
business of the Company was re-organized under a Scheme of Arrangement
sanctioned by the High Court of Delhi, New Delhi vide its order dated
April 16, 1990, effective from April 1, 1990 under the provisions of
Sections 391- 394 of the Companies Act, 1956 and all units of the
Company existing at that time were re-organized under four separate
companies, including this company, namely, DCM Limited, DCM Shriram
Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars
Limited. There are various issues relating to sales tax, income tax,
etc., arising/arisen out of the re-organization arrangement, which will
be settled and accounted for in terms of the Scheme of Arrangement and
Memorandum of Understanding between the companies involved, when the
liabilities/benefits are finally determined. The final liability, when
determined, would in case of the Company, be limited only to one third
of the total liability (note 40 to the notes to Financial Statements
annexed). Reference para (ii) of Basis for Qualified Opinion in the
Auditors'' Report Due to non availability of financial statements of the
joint venture company, for the year ended March 31, 2013 or within 6
months thereof, the disclosures required to be made in terms of
Accounting Standard (AS) - 27 "Financial Reporting of interest in joint
venture" for the current year have been made on the basis of joint
venture''s latest available financial statements for the year ended
March 31, 2012. However, the Company''s share of Assets, Liabilities,
Income and Expenses, etc. (without elimination of the effect of
transactions between the Company and the joint venture) has been
determined on the basis of Company''s shareholding in Joint Venture as
of March 31, 2013. (note 44 of notes to Financial Statements annexed).
Further, in absence of required information of joint venture company,
the same have not been considered for consolidation in the Consolidated
Financial Statements (note 44 of notes to Consolidated Financial
Statements annexed). Reference para Emphasis of Matter in the
Auditors'' Report The "Scheme of Restructuring and Arrangement",
sanctioned by the High Court of Delhi as further modified vide its
Order dated April 28, 2011 (hereinafter referred to as SORA) provides
that it is required to be implemented as a whole and in totality. The
effect of the financial and business restructuring, as envisaged in the
above Scheme, has already been considered in preparing the accounts by
the Company during the previous years except for the "Leasehold
Definitive Agreement" has not become effective pending compliance with
certain conditions contained therein and therefore, the corresponding
transaction has not been effected in the accounts. The management has
confirmed to the Auditors that the conditions contained in the
"Leasehold Definitive Agreement" would be complied and would not result
into any adverse impact on the financials of the Company or on the
successful implementation of the SORA. The Auditors'' opinion is not
qualified in respect of this matter (refer note 30 of notes to
Financial Statements annexed)
DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 As required under
Section 217(2AA) of the Companies Act, 1956, your Directors state that:
- While preparing Annual Accounts, the applicable Accounting Standards
have been followed along with proper explanation relating to material
departures;
- The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent which gives true and fair view of affairs of the Company and of
the profit or loss of the Company;
- The Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
- The Directors have prepared accounts on a going concern basis.
DIVIDEND
During the financial year ended March 31, 2013, your company has
declared an interim dividend of Rs. 1.50 (Rupee one and fifty paisa
only) per equity share of Rs. 10 each in the month of November 2012 and
it was paid in the month of December 2012. In addition, your directors
recommend a final dividend of Rs. 1.50 (Rupee one and fifty paisa only)
per equity share of Rs. 10 each for the financial year 2012-13. If
approved, the total dividend (interim and final dividend) for the
financial year 2012-13 will be Rs. 3.00 (Rupees three only) per equity
share aggregating to Rs. 6.08 Crores (including Dividend Distribution
Tax). Dividend paid for the previous Financial Year 2011-12 was Rs.
2.50 (Rupees Tw o and fifty paisa only) per equity share of Rs. 10
each.
TRANSFER TO RESERVES
Your Company proposes to transfer Rs 3.00 Crores to the General Reserve
out of the amount available for appropriation. An amount of Rs 120.41
crores is proposed to be retained in the Statement of Profit and Loss.
PERSONNEL
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, and forming part of the Report is annexed hereto.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The details as required under the Companies (Disclosure of Particulars
in Report of Board of Directors) Rules 1988 are annexed.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956 relating
to Subsidiary Companies is attached to the financial statements. The
Central Govt. has issued a General Circular No: 2/2011 dated February
8, 2011 directing that the provision of section 212 shall not apply in
relation to subsidiaries of those companies which comply with certain
disclosure requirements. In terms of the said general exemption
granted by the Central Government under Section 212(8) of the Companies
Act, 1956 and as per resolution passed by the Board of Directors at
their meeting held on February 14, 2013, the Audited Statements of
Accounts and the Auditors'' Reports thereon for the year ended March 31,
2013 along with the Reports of the Board of Directors of the Company''s
Subsidiaries have not been annexed. The Company will make available
these documents upon request by any member of the Company interested in
obtaining the same. These documents are also made available on the
website of the Company www.dcm.in.
However, as per the requirement of Accounting Standard AS-21 notified
in the Companies (Accounting Standards) Rules, 2006, Consolidated
Financial S tatements presented by the Company includes the financial
information of its subsidiaries.
AUDIT COMMITTEE
The Audit Committee of the Company consists of Mr. Bipin Maira,
Chairman,
Prof. Sudhir Kumar Jain, Dr. Surendra Nath Pandey and Mr. Jitendra
Tuli.
AUDITORS
The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered
Accountants, retire at the conclusion of 123rd Annual General Meeting
and are eligible for re-appointment. Your Board recommends their
reappointment.
COST AUDIT
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed cost audit of the Company''s Textile division.
The Board of Directors had appointed M/s. K. C. Kohli & Co, Cost
Accountants as Cost Auditors of the Company for the financial year
2012-13. The Central Government had approved the appointment of M/s. K.
C. Kohli & Co as the Cost Auditors of the Company. The Cost Audit
report would be filed with the Central Government as per statutory
timeline.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges,
Corporate Governance Report, Management Discussion & Analysis and
Auditors'' certificate regarding compliance of Corporate G overnance are
made part of the Annual R eport.
SOCIAL RESPONSIBILITY STATEMENT
The Textile Division of the Company is r unning a School upto 10th
standard in its campus at Hissar, Haryana. There are approx 435
students on the roll in different classes.
ACKNOWLEDGEMENTS
The Directors wish to acknowledge and thank the Central and State
Governments and all regulatory bodies for their continued support and
guidance. The Directors thank the shareholders, customers, business
associates, Financial Institutions and Banks for the faith reposed in
the Company and its management. The Directors place on record their
deep appreciation of the dedication and commitment of your company''s
employees at all levels and look forward to their continued support in
the future as well.
For and on behalf of the Board
Sd/-
Place:New Delhi Jitendra Tuli
Date : May 27, 2013 Chairman and Managing Director
Mar 31, 2012
The Directors have pleasure in presenting their 12th Annual Report
along with Audited Financial Statements of the Company for the .year
ended March 31, 2012.
FINANCIAL DATA Rs./Crores
Financial Year Financial Year
ended ended
March 31, 2012 March 31, 2011
Profit/(Loss) before
Interest and 16.20 62.50
Depreciation and Tax(PBDIT)
Less: - Finance Cost 19.76 14.29
- Depreciation 9.90 9.57
Profit/(Loss) before
Tax & Exceptional (13.46) 38.64
Item
Exceptional Item* 18.00 -
Profit/(Loss) before tax 4.54 38.64
Less - Provision for tax (0.91) 12.88
Profit/(Loss) after tax 5.44 25.76
Add-Profit/(Loss) brought
forward 99.28 75.41
Add - Debenture Redemption - 5.76
Reserve Written Back
Add - Reversal of Corporate
Dividend Tax 0.71 -
Profit available for
appropriation 105.43 106.93
Appropriations:
Proposed Dividend on
equity shares 4.34 4.34
Corporate Dividend Tax 0.71 0.71
General Reserves 0.60 2.60
Balance Profit carried forward 99.78 99.28
#Compensation receivable from developer of real estate project pursuant
to settlement reached in relation to fixated factory complex of the said
project.
OPERATIONS OVERVIEW Textile Division
The Textile Division of the Company is located at Hisar in Haryana. It
is an IS09001 certified unit. During the year under review, the
turnover of the Division has increased to Rs. 293.34 Crores from Rs.
271.64 Crores last year. However, the Division has incurred a loss of
28.27 Crores during the year due to margins turning negative on account
of steep fall in cotton yarn prices and high cost of cotton inventory
procured during last year cotton season. The Textile Industry as a
whole witnessed an unexpected downturn in demand during the year,
resulting in reduction of cotton and yarn prices.
The volatility of the market has increased considerably in the recent
past and both domestic and international market scenario has been
evolving day by day. In order to cope with this dynamic market, the
Textile Division has been adopting market focused approach and has been
constancy enhancing its internal skill sets to position itself, so that
it can grab the opportunities and face the market challenges.
During the year the cotton yam capacity of the Division was increased
to 78660 Spindles from 74436 spindles. The Division is also upgrading
and modernizing its machineries and equipments to enhance efficiency
and reduce costs. Many old machineries have been replaced during the
past two years. This process will be continued in next year also.
Besides expanding its export market by introducing value added products
the Division is also focusing to broaden the domestic customer base by
developing new customers. IT Division IT Division of the Company is an
established player in data center management business with
specialization in managing different systems, storage devices and
databases. The Division provides highly qualified Unix, VMware,
messaging & storage skills and data center management capability at
competitive price. It caters primarily to organizations with a high IT
dependency and large Unix & Virtualization based systems. The Data
Centre Management Business is expected to open future opportunities for
the division in providing specialized data center services to the fast
growing small and medium enterprises in domestic market.
The domestic operations have continued to grow at par with the previous
year, in spite of some reversal trend in the third quarter linked with
some order terminations. The turnover of the division was adversely
affected because the US onsite business of the division has
underperformed during the year on account of sluggish market
conditions, especially in the latter half of the year.
During the year, the Division made a breakthrough with an export order
which should help reorient the future offshore business thrust and
supplement the onsite business also.
DEBT REPAYMENT UNDER SCHEME OF RESTRUCTURING AND ARRANGEMENT (SORA)
As per the Scheme of Restructuring & Arrangement (SORA) approved by the
Hon'ble Delhi High Court vide its order dated October 29, 2003 under
Section 391 - 394 of the Companies Act, 1956 and subsequent
modification thereto vide Honble Delhi High Court order dated April 28,
2011, the Company has complied with its debt repayment obligation and
where such amount has not been claimed by the creditors, the same have
been deposited in separate designated Bank Account (s) in scheduled
bank(s).
Any investor whose investment is remained unclaimed /tin-encased may
lodge their claim with the company by surrender of Debenture
Certificates/ un-encased payment warrants at the registered office of
the Company.
FIXED DEPOSITS
The Company has paid the fixed deposit holders in all claimed cases in
terms of the provisions of the Scheme of Restructuring and Arrangements
approved by the Hon'ble High Court of Delhi and as modified vide
order dated April 28, 2011 The amount of unclaimed / legal cases has
been deposited in a separate bank account to earmark the funds for the
payment of these unclaimed / legal cases.
DIRECTORS
The Board of directors of the Company on November 9, 2011 had
reappointed Mr. Naresh Kumar Jain as Managing Director for a period of
one year i.e. with effect from December 20, 2011 to December 19, 2012.
His appointment is placed for the approval and ratification of
shareholders at the Annual General Meeting to be held on July 14, 2012.
Mr. Jitendra Tuli, retires by rotation in the ensuing Annual General
Meeting and, being eligible, offers himself for reappointment as
Director of the Company. His re-appointment is placed before the
shareholders of the Company at the ensuing Annual General Meeting.
Mr. Bipin Maira, who has been appointed as additional director of the
Company by the Board in its meeting dated November 9, 2011 under
section 260 of the Companies Act, 1956, holds office up to the ensuing
Annual General Meeting. The Company has received a notice from a
member of the Company under section 257 of the Companies Act, 1956
signifying his intention to propose him as a candidate for the office
of Director, and accordingly a resolution is proposed for his
reappointment as Director of the Company, liable to retire by rotation.
DIRECTORS' VIEW ON AUDITORS' OBSERVATIONS
Management response to the observations of the auditors even though
explained wherever necessary through appropriate notes to the Accounts
is reproduced hereunder in compliance with the relevant legal
provisions.
Reference Para 5(iv) of the Auditors Report
Due to non availability of financial statements of the joint venture
company, for the year ended March 31, 2012 or within 6 months thereof,
the disclosures required to be made in terms of Accounting Standard
(AS) - 27 "Financial Reporting of interest in joint venture" for
the current year have been made on the basis of joint ventures latest
available financial statements for the year ended March 31, 2011.
However, the Company's share of Assets, Liabilities, Income and
Expenses, etc. (without elimination of the effect of transactions
between the Company and the joint venture) has been determined on the
basis of Company's shareholding in Joint Venture as of March 31,
2012. (note 44 of notes to Financial Statements annexed). Further, in
absence of required information of joint venture Company, the same have
not been considered for consolidation in the Consolidated Financial
Statements (note 44 of notes to Consolidated Financial Statements
annexed).
Reference Para 5(v) of the Auditors Report
The business of the Company was re-organized under a Scheme of
Arrangement sanctioned by the High Court of Delhi, New Delhi vide its
order dated April 16, 1990, effective from April 1, 1990 under the
provisions of Sections 391-394 of the Companies Act, 1956 and all units
of the company existing at that time were re-organized under four
separate companies, including this company, namely, DCM Limited, DCM
Shriram Industries Limited, DCM Shriram Consolidated Limited and Siel
Limited.
There are various issues relating to sales tax, income tax, etc.,
arising/arisen out of the re-organization arrangement, which will be
settled and accounted for in terms of the Scheme of Arrangement and
Memorandum of Understanding between the companies involved, when the
liabilities/benefits are finally determined. The final liability, when
determined, would in case of the Company, be limited only to one third
of the total liability (note 40 of notes to Financial Statements
annexed).
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217
As required under Section 217(2AA) of the Companies Act, 1956 your
Directors state that;
- While preparing Annual Accounts, the applicable Accounting
Standards have been followed along with proper explanation relating to
material departures;
- The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent which gives true and fair view of affairs of the Company
and of the profit or loss of the Company;
- The Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
- The Directors have prepared accounts on a going concern basis.
DIVIDEND
Your directors are pleased to recommend a dividend of Rs. 2.50 (25%)
per equity shares of Rs 10 each aggregating to Rs. 4.34 Crores on paid
up equity capital of the company for the financial year 2011-12, which
if approved at the ensuing Annual General Meeting, will be paid to all
those member (s) whose name appear in the register of members or
beneficial owner(s) as provided by the depositories as on June 29,
2012.
PERSONNEL
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, and forming part of the Report is annexed hereto.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The details as required under the Companies (Disclosure of Particulars
in Report of Board of Directors) Rules 1988 are annexed.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956 relating
to Subsidiary Companies is attached to the accounts. The Central Govt,
has issued a General Circular No: 2/2011 dated 8-02-2011 directing that
the provision of section 212 shall not apply in relation to
subsidiaries of those companies which comply with certain disclosure
requirements.
In terms of the said general exemption granted by the Central
Government under Section 212(8) of the Companies Act, 1956 and as per
resolution passed by the Board of Directors at their meeting held on
February 11, 2012, the Audited Statements of Accounts and the
Auditors' Reports thereon for the year ended March 31, 2012 along
with the Reports of the Board of Directors of the Company's
Subsidiaries have not been annexed. The Company will make available
these documents upon request by any member of the Company interested in
obtaining the same. These documents are also made available on the
website of the Company www.dcm.in.
However, as per the requirement of Accounting Standard AS-21 notified
in the Companies {Accounting Standards) Rules, 2006, Consolidated
Financial Statements presented by the Company includes the financial
information of its subsidiaries.
AUDIT COMMITTEE
The Audit Committee of the Company consists of Mr. Jitendra Tuli,
Chairman, Prof. Joginder Singh Sodhi, Dr. Surendra Nath Pandey and Mr.
Bipin Maira.
AUDITORS
The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered
Accountants, retire at the conclusion of 122nd Annual General Meeting
and are eligible for re-appointment. Your Board recommends their
reappointment.
COST AUDIT
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed cost audit of the Company's Textile
division. The Board of directors had appointed M/s. K. C. Kohli & Co,
Cost Accountants as Cost Auditors of the Company for the financial year
2011-12. The Central Government had approved the appointment of M/s. K.
C. Kohli & Co as the Cost Auditors of the Company. The Cost Audit
report would be filed with the Central Government as per statutory
timeline.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges,
Corporate Governance Report, Management Discussion & Analysis and
Auditors' certificate regarding compliance of Corporate Governance
are made part of the Annual Report.
SOCIAL RESPONSIBILITY STATEMENT
The Company is running two Educational Institutions viz DCM Boys Sr.
Sec. School and DCM Girls Sr. Sec. School. Both Schools cater to the
lower income strata of the society. The Schools are recognized and
affiliated to the Central Board of Secondary Education. There are
approximately 900 students on the roll in both the schools in different
classes. Last year these Schools have been shifted in New School
Building which is futuristic in nature with all modern facilities. The
Textile Division of the Company is also running a School up to 10th
standard in its campus at Hissar, Haryana. There are approx 425
students on the roll in different classes. Last year 16 students of
10th Standard were placed in the merit list of Haryana Board of School
Education (HBSE).
ACKNOWLEDGEMENTS
The Directors wish to acknowledge and thank the Central and State
Governments and all regulatory bodies for their continued support and
guidance. The Directors thank the shareholders, customers, business
associates, Financial Institutions and Banks for the faith reposed in
the company and its management.
The Directors place on record their deep appreciation of the dedication
and commitment of your company's employees at all levels and look
forward to their continued support in the future as well.
For and on behalf of the Board
Sd/-
Place : New Delhi JITENDRA TULI
Date : May 28, 2012 Chairman
Mar 31, 2011
The Directors have pleasure in presenting their 21st Annual Report
alongwith Audited Accounts of the Company for the year ended March 31,
2011.
FINANCIAL DATA
Rs./Crores
Financial Year Financial Year
ended March ended March
31.2011 31, 2010
Profit/(Loss) before Interest and 61.94 27.75
Depreciation and Tax
(PBDIT)
Less: Ã Interest 13.73 7.72
à Depreciation 9.57 7.84
Exceptional Item - 46.66
Profit/(Loss) before tax 38.64 58.85
Less -Provision for tax 12.88 (6.85)
Profit/(Loss) after tax 25.76 65.70
Add ÃProfit/(Loss) brought forward 75.41 (14.57)
Add ÃDebenture
Redemption Reserve
Written Back 5.76 24.28
Profit/(Loss) available for
appropriation 106.93 75.41
Appropriations
Proposed Dividend on equity shares 4.34 -
Corporate Dividend Tax 0.71 -
General Reserves 2.60 -
Balance Profit carried forward 99.28 75.41
OPERATIONS OVERVIEW Textile Division
The Textile Division of the company is located at Hisar in Haryana. It
is an ISO9001 certified unit with a cotton yarn capacity of 74436
spindles. During the year under review, the turnover of the division
has increased to Rs. 271.83 Crores from Rs. 202.25 Crores last year
recording a growth of 34.4% (approx). The division has performed well
because of strong cotton yarn prices, operational efficiency and
control of operational cost during the financial year. The
restrictions imposed by the Government of India on export of cotton
yarn in the last quarter of the financial year, has hampered the volume
growth of the division. Besides expanding its export market by
introducing value added products the Division is also focusing to
broaden the domestic customer base by developing direct customers.
During the year, the division has initiated modernization projects of
its plant to enhance efficiency and add further value to its products.
IT Division
The domestic operations have shown a healthy growth due to maturity of
business associations and flow of recurring orders from large domestic
IT players. The division is an established player in data center
management business with specialization in managing different systems,
storage devices and databases. This is expected to open future
opportunities for the division in providing specialized data center
services to the fast growing small and medium enterprises in domestic
market.
However, the Operating Profit of the division was adversely affected because
the US onsite business of the division has underperformed during the year on
account of extraordinary employee payouts, payment against past settlements,
exceptional attritions and lower fresh order booking since order of major
customers is put on hold.
DEBT REPAYMENT UNDER SCHEME OF RESTRUCTURING AND
ARRANGEMENT (SORA)
As per the Scheme of Restructuring & Arrangement (SORA) approved by the
Honble Delhi High Court vide its order dated October 29, 2003 under Section
391 - 394 of the Companies Act, 1956 and subsequent modification thereto
vide Delhi High Court order dated April 28, 2011, the company has complied
with its debt repayment obligation and where such amount has not been
claimed by the creditors, the same have been deposited in separate designated
Bank Account (s) in scheduled bank(s).
REDEMPTION OF DEBENTURES
During the year, pursuant to the discharge of liability of 16% Partly
Convertible Debentures (PCDs), IFCI Ltd., acting as Trustee for the
said PCDs has released securities created in their favour. Any investor
whose investment in said PCDs remained unclaimed /un-encashed may lodge
their claim with the company by surrender of Debenture Certificates/
un-encashed payment warrants at the registered office of the company.
FIXED DEPOSITS
The Company has paid the fixed deposit holders in all claimed cases as per
provisions of the Scheme of Restructuring and Arrangements approved by
Honble Delhi High Court and as modified vide order dated April 28, 2011.
The amount of unclaimed / legal cases has been deposited in a separate bank
account to earmark the funds for the payment of these unclaimed / legal cases.
DIRECTORS
The Board of the Company on October 29, 2010 had reappointed Mr. Naresh
Kumar Jain as Managing Director for a period of one year i.e. with
effect from December 20, 2010 to December 19, 2011. His appointment
shall be placed for the approval and ratification of shareholders at
the Annual General Meeting to be held on July 15, 2011.
Prof. Joginder Singh Sodhi, retires by rotation in the ensuing Annual General
Meeting and, being eligible, offers himself for reappointment as Director of
the company. His re-appointment is placed before the shareholders of the
company at the Annual General Meeting for the financial year 2010-11.
DIRECTORS VIEW ON AUDITORS OBSERVATIONS
Management response to the observations of the auditors even though explained
wherever necessary through appropriate notes to the Accounts is reproduced
hereunder in compliance with the relevant legal provisions.
Reference para 4(iv) of the Auditors Report
Due to non availability of financial statements of the joint venture
company, for the year ended March 31, 2011 or within 6 months thereof,
the disclosures required to be made in terms of Accounting Standard
(AS) Ã 27 "Financial Reporting of interest in joint venture" for the
current year have been made on the basis of joint ventures latest
available financial statements for the year ended March 31, 2010.
However, the Companys share of Assets, Liabilities, Income and
Expenses, etc. (without elimination of the effect of transactions
between the Company and the joint venture) has been determined on the
basis of Companys shareholding in Joint Venture as of March 31, 2011.
(Note 17 of Notes to Accounts in Schedule 13 of Accounts annexed).
Further, in absence of required information of joint venture Company,
the same have not been considered for consolidation in the Consolidated
Financial Statements (Note 1 of Notes to Accounts in Schedule 13 of
Consolidated Accounts annexed).
Reference para 4(vi) of the Auditors Report
The business of the company was re-organized under a Scheme of Arrangement
sanctioned by the High Court of Delhi, New Delhi vide its order dated April
16, 1990, effective from April 1, 1990 under the provisions of Sections 391-
394 of the Companies Act, 1956 and all units of the company existing at that
time were re-organized under four separate companies, including this company,
namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram
Consolidated Limited and Siel Limited.
There are various issues relating to sales tax, income tax, etc.,
arising/arisen out of the re-organization arrangement, which will be
settled and accounted for in terms of the Scheme of Arrangement and
Memorandum of Understanding between the companies involved, when the
liabilities/benefits are finally determined. The final liability, when
determined, would in case of
the Company, be limited only to one third of the total liability (Note 12 of
Notes to Accounts in Schedule 13 of Accounts annexed).
DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 217
As required under Section 217(2AA) of the Companies Act, 1956 your
Directors state that:
- While preparing Annual Accounts, the applicable Accounting Standards
have been followed along with proper explanation relating to material
departures;
- The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent which gives true and fair view of affairs of the Company and of
the profit or loss of the Company;
- The Directors have taken proper and sufficient care for the
maintenance of adequate Accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
- The Directors have prepared accounts on a going concern basis.
DIVIDEND
Your directors are pleased to recommend a dividend of Rs. 2.50 (25%)
per equity shares of Rs 10 each aggregating to Rs.4.34 Crores on paid
up equity capital of the company for the financial year 2010-11, which
if approved at the ensuing Annual general Meeting, will be paid to all
those member (s) whose name appear in the register of members or
beneficial owner(s) as provided by the depositories as on July 8, 2011.
After transfer of Rs 260 Lacs to Reserves the balance in Profit & Loss
Account of Rs 9928 lacs is carried to the Balance Sheet
PERSONNEL
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees) Rules,
1975, and forming part of the Report is annexed hereto.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS & OUTGO
The details as required under the Companies (Disclosure of Particulars in
Report of Board of Directors) Rules 1988 are annexed.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956 relating
to Subsidiary Companies is attached to the accounts. The Central Govt.
has issued a General Circular No: 2/2011 dated 8-02-2011 directing that
the provision of section 212 shall not apply in relation to
subsidiaries of those companies which comply with certain disclosure
requirements. In terms of the said general exemption granted by the
Central Government under Section 212(8) of the Companies Act, 1956 and
as per resolution passed by the board of directors at their meeting
held on January 31, 2011, the Audited Statements of Accounts and the
Auditors Reports thereon for the year ended March 31, 2011 along with
the Reports of the Board of Directors of the Companys Subsidiaries
have not been annexed. The Company will make available these documents
upon request by any member of the Company interested in obtaining the
same. These documents will also be made available in the website of the
Company www.dcm.in.
However, as per the requirement of Accounting Standard AS-21 notified
in the Companies (Accounting Standards) Rules, 2006, Consolidated
Financial Statements presented by the Company includes the financial
information of its subsidiaries.
AUDIT COMMITTEE
The Audit Committee of the company consists of Mr. Jitendra Tuli,
Chairman, Prof Joginder Singh Sodhi and Dr. Surendra Nath Pandey.
AUDITORS
The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered
Accountants, retire at the conclusion of 121st Annual General Meeting
and are eligible for re-appointment. Your Board recommends their
reappointment.
COST AUDIT
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed cost audit of the Companys Textile division.
The Board of directors had appointed Mr. Vipin Maini, Cost Accountant
as Cost Auditors of the Company for the financial year 2010-11. The
Central Government vide its letter dated July 5, 2010 had approved the
appointment of Mr. Vipin Maini as the Cost Auditor of the Company. The
cost audit report will be filed with the Central Government as per
statutory timeline.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges,
Corporate Governance Report, Management Discussion & Analysis and
Auditors certificate regarding compliance of Corporate Governance are
made part of the Annual Report.
SOCIAL RESPONSIBILITY STATEMENT
The company is running two Educational Institutions viz DCM Boys Sr.
Sec. School and DCM Girls Sr. Sec. School. Both Schools cater to the
lower income strata of the society. The Schools are recognised and
affiliated to the Central Board of Secondary Education; there are 917
students on the roll in both the schools in different classes. These
Schools have been shifted in New School Building which is futuristic in
nature with all modern facilities. The Textile Division of the Company
is also running a School upto 10th standard in its campus at Hissar,
Haryana. There are approx 600 students on the roll in different
classes.
ACKNOWLEDGEMENTS
The Directors wish to acknowledge and thank the Central and State
Governments and all regulatory bodies for their continued support and
guidance. The Directors thank the shareholders, customers, business
associates, Financial Institutions and Banks for the faith reposed in
the company and its management.
The Directors place on record their deep appreciation of the dedication and
commitment of your companys employees at all levels and look forward to
their continued support in the future as well.
For and on behalf of the Board
Sd/-
Place : New Delhi Surendra Nath Pandey
Date:May 25, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting their 120th Annual Report
alongwith Audited Accounts of the Company for the year ended March 31,
2010.
FINANCIAL DATA Rs./Crores
Financial Year Financial Year
ended March ended March
31, 2010 31, 2009
Profit/(Loss) before Interest and
Depreciation and Tax (PBDIT) 27.74 22.86
Less: - Interest 7.72 7.51
- Depreciation 7.84 8.22
Exceptional Item 46.66 -
Profit/(Loss) before tax 58.84 7.13
Less -Provision for tax (6.85) 1.06
Profit/(Loss) after tax 65.69 6.07
Add -Profit/(Loss) brought
forward (14.57) (20.64)
Add -Debenture
Redemption Reserve
Written Back 24 28
Profit/(Loss) carried to the
Balance Sheet 75.40 (14.57)
OPERATIONS OVERVIEW Textile Division
The Textile Division of the company is located at Hisar in Haryana. It
is a ISO9001 certified unit with a cotton yarn capacity of 74436
spindles. During the year under review, the production of yarn
increased to 15827 MT from 14888 MT last yeat recording a growth of
6.31% (approx) in volume. The Division earned profit before tax of Rs.
19.84 Crores as against Rs. 6.88 Crores in the previous year with a
bottom line growth of 188%. The Profitability is increased because of
operational efficiency and picking up of demand leading to strong yarn
prices during the second half of the financial year. The division is
now exporting its product to around 25 countries. Efforts are being
made to expand the export market by introducing some value added
products in the niche segment and penetrate more into domestic market
by developing direct customers. During the year, the division has
initiated modernization projects of its plant to enhance efficiency and
add further value to its products.
IT Division
After the widespread economic volatility and uncertainty over the
ptevious years, some semblance of stability returned in the corporate
world towards the end of last year. The IT industty is expected to
stabilize and return to growth from 2010 onwards. Despite the ptessure
in the global markets, especially USA and Europe the division was able
to grow its onsite operations and establish its India centric
businesses. Operational Profitability of the division has improved
despite pressure on rates & consequently margins. However, the net
profit was affected advetsely due to advetse foreign exchange impact of
Rs 68 Lacs during the year as against favorable impact of Rs 137 Lacs
during the previous year.
The domestic IT Infrastructure setvices have shown a healthy growth
during the year due to the Customet associations with most large IT
Service providers have matuted now and regular orders are being
received. The remote support facility is now fully opetational and
caters to clients both in the USA and India.
The division has also established itself in data centet management
business with specialization in managing different systems, storage
devices and databases. This is expected to open future opportunities
for the division in providing specialized data center services to the
fast growing small and medium enterprises in India.
ONE TIME SETTLEMENT OF DUES OF UTI
During the year, DCM Ltd, DCM Engineering Ltd and 4 promoter group
companies have agreed for One Time Settlement (OTS) of dues of UTI (now
succeeded by Specified undertaking of UTI (SUUTI) and UTI Mutual Fund
(UTIMF)}. The Company has made full and final payment of said OTS dues
of UTI and has been issued no dues certificate(s). Consequent to the
said settlement interest liabilities of Rs. 46.66 Crores accrued in the
books have been written back during the year and shown as an
exceptional item in the books of accounts.
REDEMPTION OF DEBENTURES
The redemption/ repayments of 16% Partly Convertible Debentures (PCDs)
ate being made in accordance with the provisions contained in the
Scheme of Restructuring and Arrangement (SORA) approved by the Honble
High Court of Delhi as may be modified. The outstanding dues of the$e
PCD holders aggregating to Rs. 29.81 Crs (approx) comprising of
principal and interest would be paid as per said SORA as may be
modified by court, (tefet to note 3.4 of Notes to accounts in schedule
13 of Accounts annexed). Pursuant to redemption of dues of 19.5% Non
Convertible Debentures during last financial year 2008-09, the
unclaimed/un-encashed amount with respect of the said 19.5% Non
Convertible Debentures were deposited in a separate no-lien Bank
account opened in the name of State Bank of Patiala, being the
Debenture Trustees. Any investor whose investment in 19.5% NCDs
remained unclaimed /un-encashed may lodge their claim at the registered
office of the Company and/or to the Debenture Trustees.
FIXED DEPOSITS
The Company Law Board (CLB) had passed an order dated September 10,
1998 rescheduling the repayments to fixed deposit holders, which now
constitutes part of Scheme of Restructuring and Arrangement approved by
Honble High Court. The Company has paid all the fixed deposit holders
other than unclaimed/ legal cases aggregating to Rs. 15.96 lacs in
tetms of the provisions of the Scheme of Restructuring and Arrangements
approved by the Honble High Court of Delhi as may be modified, (refer
to note 3.4 of Notes to accounts in schedule 13 of Accounts annexed).
The said amount of unclaimed / legal cases has been deposited in a
separate bank account to earmark the funds for the payment of these
unclaimed / legal cases.
DIRECTORS
The Board of the Company on October 28, 2009 had reappointed Mr. Naresh
Kumar Jain as Managing Director for a period of one year i.e. with
effect from December 20, 2009 to Decembet 19, 2010. His appointment
shall be placed for the approval and ratification of shareholders at
the AGM to be held on July 30, 2010.
Dr. Surendra Nath Pandey, retires by rotation in the ensuing Annual
General Meeting and, being eligible, offers himself for reappointment
as Directot of the company. His re-appointment is placed before the
shateholdets of the company at the Annual Genetal Meeting for the
financial year 2009-10.
DIRECTORS VIEW ON AUDITORS OBSERVATIONS
Management response to the observations of the auditors even though
explained wherever necessary through appropriate notes to the Accounts
is reproduced hereunder in compliance with the relevant legal
provisions.
Reference para 4(iv) of the Auditors Report
Due to non availability of financial statements of the joint venture
company, for the year ended March 31, 2010 or within 6 months thereof,
the disclosures required to be made in terms of Accounting Standatd
(AS) - 27 "Financial Reporting of interest in joint venture" for the
current year have been made on the basis of joint ventures latest
available financial statements for the year ended March 31, 2009.
However, the Companys share of Assets, Liabilities, Income and
Expenses, etc. (without elimination of the effect of transactions
between the Company and the joint venture) has been determined on the
basis of Companys shareholding in Joint Venture as of March 31, 2010.
(Note 17 of Notes to Accounts in Schedule 13 of Accounts annexed).
Furrher, in absence of required information of joint venture Company,
the same have not been considered for consolidation in the Consolidated
Financial Statements (Note 1 of Notes to Accounts in Schedule 13 of
Consolidated Accounts annexed).
Reference para 4(vi) of the Auditors Report
The business of the company was re-organized under a Scheme of
Arrangement sanctioned by the High Court of Delhi, New Delhi vide its
order dated April 16, 1990, effective from April 1, 1990 under the
provisions of Sections 391/ 394 of the Companies Act, 1956 and all
units of the company existing at that time were re-organized under four
separate companies, including this company, namely, DCM Limited, DCM
Shriram Industries Limited, DCM Shriram Consolidated Limited and Siel
Limited.
There are various issues relating to sales tax, income tax, etc.,
arising/arisen out of the re-organization arrangement, which will be
settled and accounted for in terms of the Scheme of Arrangement and
Memorandum of Understanding between the companies involved, when the
liabilities/benefits are finally determined. The final liability, when
determined, would in case of the Company, be limited only to one third
of the total liability (Note 12 of Notes to Accounts in Schedule 13 of
Accounts annexed).
DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 217
As required under Section 217(2AA) of the Companies Act, 1956 your
Directors state that:
à While preparing Annual Accounts, the applicable Accounting Standards
have been followed along with proper explanation relating to material
departures;
à The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent which gives true and fair view of affairs of the Company and of
the profit or loss of the Company;
à The Directors have taken proper and sufficient care for the
maintenance of adequate Accountingrecords in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
à The Directors have prepared accounts on a going concern basis.
DIVIDEND
The Directors did not propose any dividend for the year under report,
keeping in view the requirement to plough back the funds for internal
growth / closure of liabilities under SORA.
PERSONNEL
The information required under the provisions of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, and forming part of the Report is annexed hereto.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The details as required under the Companies (Disclosure of Particulars
in Report of Board of Directors) Rules 1988 are annexed.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956 relating
to Subsidiary Companies is attached to the accounts. In terms of
approval granted by the Central Government undet Section 212(8) of the
Companies Act, 1956, the Audited Statements of Accounts and the
Auditors Reports thereon for the year ended March 31, 2010 along with
the Reports of the Board of Directors of the Companys Subsidiaries
have not been annexed. The Company will make available these documents
upon request by any member of the Company interested in obtaining the
same. However, as per the requirement of Accounting Standard AS-21
notified in the Companies (Accounting Standards) Rules, 2006,
Consolidated Financial Statements presented by the Company includes the
financial information of its subsidiaries.
AUDIT COMMITTEE
The Audit Committee of the company consists of Mr. JitendraTuli,
Chairman, Prof. Joginder Singh Sodhi and Dr. Surender Nath Pandey.
AUDITORS
The Auditors of the Company, M/s A.F. Ferguson & Co., Chartered
Accountants, retire at the conclusion of 120,h Annual General Meeting
and are eligible for re-appointment. Your Board recommends their
reappointment.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges,
Corporate Governance Report, Management Discussion & Analysis and
Auditors certificate regarding compliance of Corporate Governance are
made part of the Annual Report.
SOCIAL RESPONSIBILITY STATEMENT
The Company is running two Educational Institutions viz. DCM Boys
Senior Secondary and DCM Girls Senior Secondary Schools, which cater to
the lower income strata of the society. The schools are recognised and
affiliated to the Central Board of Secondary Education; there are 994
students on the rolls in both the schools in different classes. The
Textiles Division of the Company is also running a school upto 10,h
standard in the campus at Hissar. There are 550 students on the rolls
in different classes.
ACKNOWLEDGEMENTS
The Directors wish to acknowledge and thank the Central and State
Governments and all regulatory bodies for their continued support and
guidance. The Directors thank the shareholders, customers, business
associates, Financial Institutions and Banks for the faith reposed in
the company and its management.
The Directors place on record their deep appreciation of the dedication
and commitment of your companys employees at all levels and look
forward to their continued support in the futute as well.
For and on behalf of the Board
Sd/-
Surender Nath Pandey
Chairman
Place: New Delhi
Date : May 28, 2010