Home  »  Company  »  DCM Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of DCM Ltd.

Mar 31, 2018

1. Company overview and basis of preparation and presentation

1.1. Company overview

DCM Limited (the ‘Company’) is a public limited company incorporated in India in the name and style of Delhi Cloth & General Mills Co. Limited with registered office at Vikrant Tower, 4, Rajendra Place, New Delhi, India (CIN number L74899DL1889PLC000004). The Company is listed on two stock exchanges in India namely National Stock Exchange and Bombay Stock Exchange. The Company is engaged in the business of Textiles, Grey iron casting, IT Infrastructure Services and Real Estate.

1.2. Basis of preparation and presentation

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The Company’s standalone financial statements up to and for the year ended March 31, 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first standalone financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, Firsttime Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 55.

The standalone financial statements were authorised for issue by the Company’s Board of Directors on May 30, 2018.

Details of the Company’s accounting policies are included in Note 2.

a. Functional and presentation currency

These standalone financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

b. Basis of measurement

The standalone financial statements have been prepared on the historical cost basis except for the following items:

c. Use of estimates and judgements

In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual result may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes:

Note 2 (l) - leases: whether an arrangement contains a lease

Note 2 (l) - lease classification

Note 2 (f) - classification of financial assets: assessment of business model within which the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending March 31, 2019 is included in the following notes:

Note 2 (i) - measurement of defined benefit obligations: key actuarial assumptions

Note 2 (c) - measurement of useful lives and residual values to property, plant and equipment

Note 2 (d) - measurement of useful lives of intangible assets

Note 2 (f) - fair value measurement of financial instruments

Note 2 (j) - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of outflow of resources

Note 2 (m) - recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used

From banks:

(a) Term loans aggregating Rs. 7,291.75 lacs (March 31, 2017: Rs. 8,401.00 lacs, April 1, 2016: Rs. 9,810.23 lacs) are secured by first charge alongwith the charge created for availing cash credit, overdraft and working capital demand loan facilities described in note 22, on existing as well as future block of movable assets and an equitable mortgage by deposit of title deeds of land admeasuring 129.47 acres and all the immovable assets, both present and future, pertaining to the Textile Division at Hisar. The term loan carries a floating interest rate ranging between 8.35%-10.65% per annum. Rs. 173.75 lacs repayable in 3 quarterly installments, Rs. 138.00 lacs repayable in 4 quarterly installments, Rs. 6,655.00 lacs repayable in 20 quarterly installments and Rs. 325.00 lacs repayable in 32 quarterly installments.

(b) Rs. 847.00 lacs (March 31, 2017: Rs. 1,706.90 lacs, April 1, 2016: Rs. 2,829.20 lacs) secured by way of first pari passu charge on the fixed assets of the Company’s Engineering division, both present and future, including equitable mortgage of Engineering division’s factory land and building measuring 71 Acre- 07K-18M and second pari passu charge on the entire current assets of the Company, both present and future. The term loan carries a floating interest rate ranging between 11.85%- 12.65% per annum. Rs. 847.00 lacs is repayable in 22 monthly installments.

(c) Rs. 1300.00 lacs (March 31, 2017: Rs. 1500.00 lacs, April 1, 2016: Rs. Nil) secured by way of first pari passu charge on the fixed assets of the Company’s Engineering division, both present and future, including equitable mortgage of Engineering division’s factory land and building measuring 71 Acre-07K-18M and second pari passu charge on the entire current assets of the Company, both present and future. The term loan carries a floating interest rate 11.75% per annum and is repayable in 8 quarterly installments.

(d) Rs. 402.66 lacs (March 31, 2017: Rs. Nil, April 1, 2016: Rs. Nil) secured by way of first pari passu charge on the fixed assets (including immovable assets) of the Company’s Engineering Division and second pari passu charge on the entire stock of raw material, work-in-progress, semi-finished and finished goods, consumable stores & spares and such other movables including book debts, bills, whether documentary or clean, both present & future. The term loan carries a floating interest rate @ 11.80% per annum and is repayable in 41 monthly instalments.

(e) Rs. 148.64 lacs (March 31, 2017: Rs. 186.76 lacs, April 1, 2016: Rs. 86.55 lacs) relate to assets purchased under hire purchase/financing arrangements with banks and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. The loans carry an interest rate ranging between 9.50%-13.50% per annum.

From others:

Secured :

(a) Rs. 6.13 lacs (March 31, 2017: Rs. 15.67 lacs, April 1, 2016: Rs. 35.00 lacs) relate to assets purchased under hire purchase/financing arrangements and are secured by way of hypothecation of the specified assets. Repayable in equal monthly installments. The loans carry an interest rate ranging between 9.50%-13.50% per annum.

From others:

Unsecured :

(a) Rs. Nil (March 31, 2017: Rs. Nil , April 1, 2016: Rs. 2,000.00 lacs) secured by way of extensions of pledge of 100% equity shares of Teak Farms Private Limited (TFPL) and 100% equity shares of Juhi Developers Private Limited (enterprises over which Key Managerial Personnel have significant influence). The term loan carries a floating interest rate ranging between 13.20%-13.50% per annum.

(b) Rs. 2,000.00 lacs (March 31, 2017: Rs. 2,000.00 lacs, April 1, 2016: Rs. Nil) secured by way of extensions of pledge of 100% equity shares of Teak Farms Private Limited (TFPL) and 100% equity shares of Juhi Developers Private Limited and pledge of 14.30 lacs equity shares of DCM Limited held by Crescita Enterprises Private Limited (enterprises over which Key Managerial Personnel have significant influence). The Loan is further secured by personal guarantee of Mr. Sumant Bharat Ram (Chief executive and financial officer). The term loan carries a floating interest rate of 12.50% per annum and is repayable in 8 equal quarteraly installments of Rs. 250.00 lacs each, commencing from June 2019.

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

Security against loans repayable on demand

i) Cash credit/overdraft and working capital demand loan facilities aggregating to Rs. 12,876.00 lacs (March 31, 2017: Rs. 16,257.76 lacs, April 1, 2016: Rs. 12,495.13 lacs) relating to Textile Division at Hisar are secured by way of:

- hypothecation of stocks / stores and book debts, both present and future.

- further secured by equitable mortgage of land admeasuring 129.47 acres and all immovable assets, both present and future, and first charge, ranking pari-passu with the charge created for availing term loans as described in note 19, by way of hypothecation of existing as well as future block of movable assets pertaining to the Division.

ii) Cash credit facilities aggregating to Rs. 12.86 lacs (March 31, 2017: Rs. 199.60 lacs, April 1, 2016: Rs. 183.58 lacs) relating to IT Division from a bank are secured by way of:

- first charge/hypothecation of inventories, book debts and other assets of the Division (both present and future), and by way of first charge on office property at Hyderabad.

iii) Cash credit and working capital demand loans facilities aggregating to Rs. 3,191.82 lacs (March 31, 2017: Rs. 4,944.27 lacs, April 1, 2016: Rs. 6,483.93 lacs) relating to the Company’s Engineering division from banks are secured by way of:

- hypothecation of entire stocks of raw material, work in process, semi-finished goods and finished goods, consumable stores and spares and such other movables including book debts, bills, whether documentary or clean, both present and future

- charge on all fixed assets, both present and future, including mortgage of factory’s land and building located at village Asron, Hadbast No. 418, Tehsil Balachaur District Hoshiarpur, Punjab, measuring 71 Acre- 07K-18M together with all buildings, plant and machinery, erections, godowns and constructions of every description which are standing, erected or attached or shall at any time hereafter during the continuance of the security hereby constituted be erected or attached and standing or attached thereto.

iv) Overdraft facility of Rs. 898.13 lacs (March 31, 2017: Rs. 896.90 lacs, April 1, 2016: Rs. 991.21 lacs) relating to the Company’s Engineering division from a bank are secured by way of:

- land and building located in Kodukanthangal Village and Serkadu Village, Katpadi Sub-Registration District, Vellore Registration District, Vellore District,

Tamil Nadu measuring 39.02 acres and land and building located in Rail Mazra Village, Tehsil Balachaur, District Shaheed Bhagat Singh Nagar, Punjab measuring 4.02 acres.

The Company’s exposure to currency and liquidity risks related to trade payables is disclosed in Note 53.

* The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Based on the information presently available with the management, the disclosures required under Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”) are given below:

(c) As at March 31, 2018, the Group has unabsorbed depreciation and business losses under the provisions of the Income-tax Act, 1961. Consequent to the provisions of Ind AS 12 - “Income Taxes”, in the absence of reasonable certainty of taxable profits in future years, deferred tax assets have been recognised only to the extent of deferred tax liability. The Company reassess the unrecognised deferred tax assets at each reporting period and recognise the deferred tax assets over its deferred tax liability when it has become probable that future taxable profits will allow the deferred tax assets to be recovered.

3. Leases

Operating leases

The Company’s significant operating lease arrangements are in respect of premises for residential use of employees, office, stores, godown, etc. for a period of ranging from 1-5 years. These leasing arrangements, which are cancellable, are renewable at mutually agreeable terms. The lease rentals charged as employee benefits expense aggregate Rs. 113.47 lacs (March 31, 2017: Rs. 111.25 lacs) under note 32 and lease rentals charged as rent aggregate Rs. 120.22 lacs (March 31, 2017: Rs. 114.02 lacs) under note 35.

Finance leases A. Leases as a lessor

The company has classified the arrangement with the customers wherein the patterns/tooling/moulds are lease out in the nature of lease based on the principles enunciated in Appendix C of Ind AS 17 ‘Leases’ and accounted for as finance lease in accordance with those principles.

The agreement with the customers is for a period of 15 years.

4. Restructuring

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

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

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

- In terms of the “Leasehold Definitive Agreement” (“LDA”) dated February 16, 2004, pursuant to completion of its obligation to get the leases restored/converted from leasehold to freehold , the Company had recognized the entire revenue of Rs. 3,400 lacs from sale of development rights in leasehold land in the year 2014-15 and 2015-16.

- The outstanding receivable from for the said sale of development rights in freehold and leasehold land is amounting to Rs. Nil (March 31, 2017: Rs. Nil, April 1, 2016: Rs 1,850.00 lacs) as at year end.

b) After considering the effect of Delhi High Court order dated April 28, 2011, the Company had complied with the debt repayment obligations including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a ‘No Lien /Designated Account’ with scheduled banks. Aggregate of amount so deposited as at the year-end is Rs. 10.84 lacs (March 31, 2017: Rs. 19.52 lacs, April 1, 2016: 91.83 lacs).

5. Amalgamation and demerger

i. The Board of Directors of the Company, in its meeting held on October 15, 2016, approved a Scheme of Arrangement (‘the Scheme’) between DCM Ltd and DCM Nouvelle Limited, a wholly owned subsidiary of DCM Limited for the demerger of the Textile business of DCM Limited as per the scheme and vesting of the same with DCM Nouvelle Limited, on a going concern basis with effect from January 1, 2017, i.e the appointed date.

Further the Board of Directors of the Company, in its meeting held on October 15, 2016, approved a Composite scheme of arrangement (‘the Composite Scheme’) which was further amended in its subsequent meeting held on February 13, 2017 for the:-

(a) Amalgamation of Tiara Investment Holdings Limited into Purearth Infrastructure Limited, a jointly controlled entity (‘the Amalgamated Company’), with effect from December 31, 2016;

(b) Demerger of the Real Estate business of DCM Limited, as defined in the Composite Scheme, into DCM Realty and Infrastructure Limited (‘the Resulting Company’), 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 Company, i.e. Purearth Infrastructure Limited with the Resulting Company, i.e. DCM Realty and Infrastructure Limited, with effect from January 1, 2017.

The aforesaid schemes are subject to approval from the concerned regulatory authorities which is not perfunctory and considered to be substantive. Accordingly, the aforesaid schemes of arrangement cannot be considered as highly probable unless the regulatory approvals are obtained and hence do not meet the criteria for held for sale/ discontinued operations. Accordingly, the proposed demerger of Textile business and Real Estate business has not been considered as Discontinued Operations in these financial statements.

ii. The Board of Directors of the Company, in its meeting held on 31 March 2017, approved a scheme ofAmalgamation of Crescita Enterprises Private Limited (‘the Transferor Company’) into & with the Company with effect from 31 March 2017 (i.e. the appointed date). After the above said amalgamation, 48.35% shares of the Company which are presently held by the Transferor Company would be cancelled and the Company would issue same number of equity share to the shareholder of the Transferor Company in proportion to the shares held by them in Transferor Company at record date. The aforesaid scheme is subject to approval from the concerned regulatory authorities.

6. The Company has set up a solar power plant at its textile division at Hisar with a cost of Rs. 471.60 lacs during the year ended March 31, 2017. A term loan of Rs. 325 lacs (out of sanctioned term loan of Rs. 330 lacs) is taken for this purpose. Total power units generated during the year are 15.31 lacs KWH (March 2017 : 1.47 lacs KWH). The company is eligible for tax holiday under section 80IA up to 2030-31 (to claim deduction in any 10 consecutive assessment year out of 15 year starting from the year in which operation begins).

7. Capital advances includes Rs. 870.00 lacs (March 31, 2017: Rs. 870.00 lacs, April 1, 2016: 870.00 lacs) to acquire certain property under construction at New Delhi. The construction was a matter of litigation between the builder and the local authorities. The High Court of Delhi has allowed the builder to construct the property subject to certain conditions. The management is confident that the advance paid to acquire the property is good and fully recoverable.

8. In the previous years, the Company’s claim for the refund of an Inter Corporate Deposit amounting to Rs. 100 lacs against a body corporate was settled by the body corporate by issuing, in terms of an arbitration award, 0% non-cumulative, non-voting, redeemable preference shares of Rs. 100 each to the Company, redeemable within 20 years. The management is confident that the investment of Rs. 100.00 lacs (fare value Rs.76.32 lacs, March 31, 2017 : Rs. 68.03 lacs, April 1, 2016 : Rs. 61.00 lacs) acquired by the Company in preference shares of the body corporate is good and fully recoverable.

9. Disclosure of Specified Bank Notes (SBNs) (as defined in the notification of Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E) dated 08 November 2016) during the period November 08, 2016 to December 30, 2016, as required by Notification No. G.S.R 308(E) dated March 30, 2017 issued by the Ministry of Company Affairs:

10. Operating segments

A. Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the Chief operating decision maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.

In accordance with Ind AS 108 ‘Segment Reporting’ as specified in section 133 of the Companies act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014, the Company has identified four reportable segments, as described below, which are the Company’s strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the business units, the Chief operating decision maker (CODM) reviews internal management reports on a periodic basis.

The following summary describes the operations in each of the Company’s reportable segments:

B. Information about reportable segments

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), as included in the internal management reports that are reviewed by the Company’s Board of Directors. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm’s length basis.

C. Geographical information

The geographical information analyses the Company’s revenues and non-current assets by the Company’s country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on the geographic location of customers and segment assets which have been based on the geographical location of the assets.

*Non current assets exclude financial instrument, deferred tax assets and post employment benefit assets.

D. Major customers

There is no single customer who contributed 10% or more of the Companies revenue during the year ended March 31, 2018 and March 31, 2017.

11. Employee benefits

A Defined contribution plans

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

B Defined benefit plans

The Company operates the following post-employment defined benefit plans:-

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days of total basic salary last drawn for each completed year of service. Gratuity is payable to all eligible employees of the Company on retirement, separation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act.

Liability with regards to Gratuity is accrued based on actuarial valuation at the balance sheet date, carried out by independent actuary. For details about the related employee benefits plan, refer accounting policies on employee benefits.

12. Related party disclosures:

In accordance with the requirements of Ind AS 24 on Related Party Disclosures, the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are:

A. Name and description of relationship of the related party Entity having significant control over the Company Crescita Enterprises Private Limited (w.e.f. March 09, 2017)

Related parties where control exists Subsidiaries

DCM Finance & Leasing Limited

DCM Textiles Limited

DCM Realty and Infrastructure Limited

DCM Tools & Dies Limited

DCM Realty Investment & Consulting Limited

DCM Data Systems Limited

DCM Nouvelle Limited

Other related parties with whom transaction have taken place during the year Joint venture

Purearth Infrastructure Limited

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

Dr. Vinay Bharat Ram — Chairman and Managing Director Mr. Hemant Bharat Ram — President (Textiles division)

Mr. Sumant Bharat Ram — Chief Executive and Financial Officer

Mr. Sushil Kapoor Executive Director (Business) - Engineering Division (with effect from January 15, 2018)

Mr. Dinesh Dhiman - Executive Director (Operations)- Engineering Division (with effect from December 13, 2017)

Mr. Varun Sarin - Chief of Operation and Finance (IT Division)

Mr. Rakesh Kumar Goel - CEO (Textile Division)

Mr. Yadvinder Goyal - Company Secretary

Mr. Rahil Bharat Ram — Son of Mr. Sumant Bharat Ram

Mr. Yuv Bharat Ram — Son of Mr. Sumant Bharat Ram

Entities where key management personnel have significant influence

Juhi Developers Private Limited Teak Farms Private Limited Crescita Enterprises Private Limited

Society

DCM Engineering Products Educational Society

13. Research and development expenditure

Company has claimed weighted tax deductions on eligible research and development expenditure u/s 35(2AB) of the Income Tax Act, 1961 equivalent to 200% of such expenditure based on the approval received from Department of Scientific and Industrial Research (DSIR) w.e.f. May 28, 2015. The details of such expenditure are as follows:

14. Assets held for sale

The Board of Directors of the Company, in its meeting held on February 8, 2018, approved the sale of land and building held at Tamil Nadu and Punjab for such consideration and on such terms and conditions as may be deemed fit in the best interest of the Company.

- The Company’s borrowings have been contracted at floating rates of interest. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.

- The carrying amounts of trade receivables, trade payables, cash and cash equivalents, bank balances other than cash and cash equivalents and other financial assets and liabilities, approximates the fair values, due to their short-term nature. The loans, investments and other non-current financial assets represents finance lease receivable and bank deposits (due for maturity after twelve months from the reporting date), and other non-current financial liabilities, the carrying value of which approximates the fair values as on the reporting date.

There have been no transfers between Level 1, Level 2 and Level 3 for the years ended March 31, 2018, March 31, 2017 and April 1, 2016. Valuation technique used to determine fair value

Specific valuation techniques used to value non-current financial assets and liabilities for whom the fair values have been determined based on present values and the appropriate discount rates of the Company at each balance sheet date. The discount rate is based on the weighted average cost of borrowings of the Company at each balance sheet date.

b. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk

Risk management framework

There is a continuous process of identifying/ managing risk through a Risk Management Process. The measures used in managing the risk are also reviewed. Financial Risk identified by the Company broadly fall in the category of Credit risk, Liquidity risk and Market risk.

The Company’s risk management process consists of risk identification, risk assessment, risk monitoring and risk mitigation. Risk management process are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables are generally unsecured and are derived from revenue earned from customers primarily located in India and China. The Company continuously monitors the economic environment in which it operates. The Company manages its Credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.

The average credit period on sales of goods and services (other than moulds) within India is 30 to 60 days, sale of moulds is 180 days and sales of goods and services outside India is 30 to 90 days.

Majority of trade receivables are from customers, which are fragmented and are not concentrated to individual customers. Trade receivables are generally realised within the credit period.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company believes that its liquidity position, including total cash and cash equivalent and bank balances other than cash and cash equivalent of Rs. 1,213.21 lacs as at March 31, 2018 (March 31, 2017 Rs. 1624.51 lacs, April 1, 2016 Rs. 2476.84 lacs), anticipated future internally generated funds from operations, and its fully available, revolving undrawn credit facility will enable it to meet its future known obligations in the ordinary course of business. However, if a liquidity needs were to arise, the Company believes it has access to financing arrangements, value of unencumbered assets, which should enable it to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Company’s liquidity management process as monitored by management, includes the following:

- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Company’s liquidity position on the basis of expected cash flows.

- Maintaining diversified credit lines.

iii. Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating, investing and financing activities.

Exposure to currency risk

The summary of quantitative data about the Company’s exposure to currency risk, as expressed in Indian Rupees, as at March 31, 2018, March 31, 2017 and April 1, 2016 are as below:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies at March 31, 2018 (previous year ended as on March 31, 2017) would have affected the measurement of financial instruments denominated in functional currency and affected equity and profit or loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

Exposure to interest rate risk

The Company’s interest rate risk arises majorly from the term loans from banks carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows

15 Capital management

For the purpose of the Company’s capital management, capital includes issued equity share capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the management of the Company’s capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may return capital to shareholders, raise new debt or issue new shares.

16. Transition to Ind AS

As mentioned in note 1.2 (A), these financial statements for the year ended March 31, 2018, are the first financial statements of the Company prepared in accordance with the Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with “previous GAAP”, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended).

Accordingly, the Company has prepared financial statements which comply with Ind-AS applicable for periods ended on or after March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 1, 2016, the Company’s date of transition to Ind-AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

In preparing its Ind AS financial statements as at April 1, 2016 and in presenting the comparative information for the year ended March 31, 2016, the company has adjusted amounts reported previously in the financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

Transition elections

Explanation of the Ind AS 101 exceptions and exemptions to the full retrospective application of Ind AS applied by the Company.

In the Ind AS opening Balance Sheet as at April 1, 2016, the carrying amounts of assets and liabilities from the Previous GAAP as at March 31, 2016 are generally recognized and measured according to Ind AS in effect for the financial year ended as on March 31, 2018. For certain individual cases, however, Ind AS 101 provides for optional exemptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions in preparing its Ind AS opening Balance Sheet.

A.1 Ind AS optional exemptions

(i) Property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

(ii) Business combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

(iii) Determining whether an arrangement contains a lease

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirement in Appendix C of Ind AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition ( rather than at the inception of the arrangement). The Company has elected to avail of the above exemption.

A.2 Ind AS mandatory exceptions Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS:

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from Previous GAAP to Ind AS.

Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2017

There were no material differences between the statement of cash flows presented under Ind AS and the Previous GAAP except due to various reclassification adjustments recorded under Ind AS and difference in the definition of cash and cash equivalents under these two GAAPs.

Notes to the reconciliation:

a. Fair valuation of investments

Under previous GAAP, investments in preference shares were carried at cost. Under Ind AS, these investments are required to be measured at fair value. The investment in preference shares of subsidiary are measured at amortised cost and there is no impact of fair value change on total equity. The investment in preference shares of Combine Overseas Limited are measured at fair value through profit and loss, resulting fair value changes of these investments amounting to Rs. 39.00 lacs have been recognised in total equity as at the date of transition (i.e. April 1, 2016). The loss for the year ended March 31, 2017 has decreased and total equity has increased by Rs. 7.03 lacs due to the fair value changes.

b. Measurement of borrowings as per effective interest rate method

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowings as part of the interest expense by applying the effective interest rate method. However, under previous GAAP, these transaction costs were capitalising/charging to the statement of profit and loss. Accordingly, under Ind AS borrowings as at March 31, 2017 have been reduced by Rs. 48.51 lacs (April 1, 2016 Rs. 27.27 lacs) and property, plant and equipment have been reduced by Rs. 30.84 lacs as on March 31, 2017 (April 1, 2016 Rs. 36.64 lacs), net adjustment to retained earnings is Rs. 9.37 lacs. The loss for the year ended March 31, 2017 has been decreased by Rs. 31.85 lacs as a result of reversal of interest expense and by Rs. 5.80 lacs as a result of reversal of depreciation.

c. Recognition of security deposits at amortised cost

Under Previous Indian GAAP, interest free security deposits (that are refundable in cash on completion of the term) are recorded at their transaction value. Under Ind AS, such financial assets are required to be recognised initially at their fair value and subsequently at amortised cost. Difference between the fair value and transaction value of the security deposit has been recognised as deferred rent. Consequent to this change the amount of security deposit as on March 31, 2017 has decreased by Rs. 8.08 lacs (April 1, 2016 : Rs. 12.17 lacs) with a creation of deferred rent (included in other non-current and current assets) of Rs. 6.89 lacs (April 1, 2016 : Rs. 10.65 lacs). The total equity decreased by Rs. 1.52 lacs as at April 1, 2016. The unwinding of security deposit happens by recognition of a notional interest income in Statement of Profit and Loss at effective interest rate. The deferred rent gets amortised on a straight line basis over the term of the security deposits. The loss for the year ended March 31, 2017 increased and total equity for the year ended March 31, 2017 decreased by Rs. 5.27 lacs due to amortisation of deferred rent and increase in notional interest income of Rs. 5.61 lacs recognised on security deposits (included in other income).

d. Employee benefits: Remeasurement of post employment benefit plans

Under Ind AS, remeasurements i.e. actuarial gains and losses on the defined benefit liability are recognised in other comprehensive income instead of statement of profit and loss. Under previous GAAP, these were forming part of the statement of profit and loss for the year. As a result, loss for the year ended March 31, 2017 is decreased by Rs. 149.27 lacs and is reclassified to other comprehensive income. There is no impact on the total equity as at March 31, 2017.

e. Loss allowance for trade receivable

On transition to Ind AS, the company has recognised impairment loss on trade receivables based on the expected credit loss models required by Ind AS 109. Consequently, trade receivable have been reduced by Rs. 22.87 lacs (April 1, 2016: Rs. 56.25 lacs) with a corresponding decrease in retained earnings on the date of transition and there has been an incremental provision for the year ended March 31, 2017.

f. Capitalisation of tooling income and lease of

Under previous GAAP, arrangements that did not take the legal form of lease were accounted for based on the legal form of such arrangements. Under Ind AS, any arrangement (even if not legally structured as lease) which conveys a right to use an asset in return for a payment or series of payments are identified to be as leases provided certain conditions are met. In case such arrangements are determined to be in the nature of leases, such arrangements are required to be classified into finance or operating leases as per requirement of Ind AS 17, Leases. On the date of transition (i.e. April 1, 2016), the carrying value of property, plant and equipment has been reduced by Rs. 562.34 lacs (March 31, 2017: Rs. 437.25 lacs), with corresponding increase in other non-current financial assets (finance lease receivable) by Rs. 482.44 lacs (March 31, 2017: Rs. 345.85 lacs) and other current asset by Rs. 131.11 lacs (March 31, 2017: Rs. 136.60 lacs). Further an amount of Rs. 51.21 lacs (March 31, 2017: Rs. 45.21 lacs) has been transferred from deferred revenue to retained earnings.

g. Other comprehensive income

Under previous GAAP, there was no requirement to disclose any item of statement of profit and loss in other comprehensive income. However as per requirement of Ind AS certain items of statement of profit and loss are to be reclassified to other comprehensive income. Consequent to this, the Company has reclassified remeasurement of defined benefit plans and translation difference on foreign operation from the statement of profit and loss to other comprehensive income.

h. Reversal of dereffer tax assets

Under Previous GAAP, the Company has recorded the amount of deferred tax. However, on transition to Ind AS, the Company has reversed the deferred tax assets amounting to Rs. 548.48 lacs as at 1 April 2016 pursuant to rectification of error in the estimate of recoverability.

i. Fair valuation of forward contracts

Under previous GAAP, forward contracts were revalued at each reporting date and the amount being recognised in the statement of profit and loss, but recognition was restricted only to the extent it represents any losses. Under Ind AS, such instruments needs to be fair valued on the balance sheet date /every reporting date and both fair value gains and losses needs to be recognised in statement of profit and loss, unless hedge accounting is followed in which the same needs to be recorded through OCI. As a result, loss for the year ended March 31, 2017 has decreased by Rs. 111.15 lacs. j. Translation difference on foreign operation

Under Ind AS, translation difference on arising on foreign operation are recognised in other comprehensive income instead of statement of profit and loss. Under previous GAAP, these were forming part of the statement of profit and loss for the year. As a result, loss for the year ended March 31, 2017 is decreased by Rs. 22.82 lacs and is reclassified to other comprehensive income. There is no impact on the total equity as at March 31, 2017. k. Excise Duty on sales

Under the previous GAAP, excise duty on sale of goods was reduced from sales to present the revenue from operations. Whereas, under Ind AS, this excise duty is included in the revenue from operations and the corresponding expense is included is part of total expenses. The change does not affect total equity as at April 1, 2016 and March 31, 2017, loss before tax or total loss for the year ended March 31, 2017.

l. Cash discounts on sales

Under the previous GAAP, only trade discount and volume rebates were netted off from the revenue. Whereas, under Ind AS, cash discounts and other sales incentives are also required to be factored in calculation of transaction price. The change does not affect total equity as at April 1, 2016 and March 31, 2017, loss before tax or total loss for the year ended March 31, 2017. m. Revenue grants

Under the previous GAAP, revenue grants from government were recognised as a deduction from the expenses to which they were intended to compensate. Whereas, under Ind AS, the Company has elected to present such grants within other income. The change does not affect total equity as at April 1, 2016 and March 31, 2017, loss before tax or total loss for the year ended March 31, 2017. n. Exceptional items

Under the previous GAAP, recovery of an amount of Rs. 775.00 lacs during the year ended March 31, 2017 from a jointly controlled entity pursuant to the settlement reached by the Company is shown as exceptional items. Whereas, under Ind AS, the Company has elected to present such items as normal revenue/ expenses. The change does not affect total equity as at March 31, 2017, loss before tax or total loss for the year ended March 31, 2017. The accompanying notes are an integral part of these standalone financial statements


Mar 31, 2016

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

* Term loans from banks include:

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

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

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

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

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

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

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

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

* Loans repayable on demand from banks include

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

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

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

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

1. Amalgamation of companies

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

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

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

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

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

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

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

Defined benefit plans

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

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

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

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

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

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

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

After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a ‘No Lien /Designated Account’ with scheduled banks. Aggregate of amount so deposited as at the year-end is Rs. 91.83 lacs (Previous year: Rs.213.02 lacs).

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

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

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

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

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

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

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

9. Segment Reporting:

a) The business segments comprise the following:

Textiles - Yarn manufacturing

IT Services - IT Infrastructure services

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

Grey Iron casting Grey iron casting manufacturing

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

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

- within India

- outside India

d) Segment accounting policies;

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

(i) Segment assets and liabilities:

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

(ii) Segment revenue and expenses:

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

(iii) Inter segment sales:

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

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

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

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

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

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

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

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

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

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


Mar 31, 2015

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

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

Defined contribution plans

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

Defined benefit plans

(a) Gratuity

(b) Compensated absences — Earned / Sick leaves

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

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

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

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

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

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

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

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

After considering the effect ofDelhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a 'No Lien /Designated Account' with scheduled banks. Aggregate of amount so deposited as at the year end is Rs. 213.02 lacs (Previous year: Rs.331.86 lacs).

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

5. Contingent liabilities not provided for:

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

Claims not acknowledged as debts: *

— Income-tax matters 203.61 122.11

— Customs duty 12.55 12.55

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

— Property tax 283.67 283.67

— Others 374.76 262.78

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

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

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

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

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

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

11. SEGMENT REPORTING

a) The business segments comprise the following:

Textiles — Yarn manufacturing.

IT Services — IT Infrastructure services and software development.

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

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

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

— within India

— outside India

d) Segment accounting policies;

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

(i) Segment assets and liabilities:

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

(ii) Segment revenue and expenses:

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

(iii) Inter segment sales:

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

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

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

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

f. DCM Data Systems Limited (DDSL)

II. Joint venture: Purearth Infrastructure Limited (PIL)

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

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

b. Dr. Vinay Bharat Ram - Chief Executive Officer

c. Mr. Hemant Bharat Ram - President - Textiles

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

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

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

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

Enterprises where key management personnel have significant influence

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

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

g. Juhi Developers Private Limited (JDPL)

h. Teak Farms Private Limited (TFPL)

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

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

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

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

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

13. Quantitative data about Derivative Instruments

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

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

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

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

17. The Board ofDirectors of the Company in their meeting held on December 08, 2014 have approved the merger of DCM Engineering Limited (subsidiary company) into and with the Company under a Scheme of Amalgamation ('Scheme') under sections 391 to 394 and other applicable provisions of the Companies Act, 1956. The scheme envisages that upon it becoming effective and with effect from the appointed dated (April 01, 2014) all assets and liabilities and the entire business of DCM Engineering Limited shall be transferred to and vested in the Company as a going concern. The said Scheme is pending approvals from the concerned regulatory/statutory authorities as at March 31, 2015.

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


Mar 31, 2014

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

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

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

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

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

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

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

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

e) After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a ''No Lien /Designated Account'' with scheduled banks. Aggregate of amount so deposited as at the year end is Rs. 331.86 lacs (Previous year: Rs.655.42 lacs).

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

3. Contingent liabilities not provided for:

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

Claims not acknowledged as debts: *

- Income-tax matters 122.11 96.36

- Customs duty 12.55 12.55

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

- Property tax 283.67 391.56

- Others 262.78 262.78

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

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

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

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

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

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

9. SEGMENT REPORTING

a) The business segments comprise the following:

Textiles – Yarn manufacturing

IT Services – IT Infrastructure services and software development.

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

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

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

– outside India d) Segment accounting policies;

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

(i) Segment assets and liabilities:

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

(ii) Segment revenue and expenses:

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

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

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

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

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

f. DCM Data Systems Limited (DDSL)

II. Joint venture: Purearth Infrastructure Limited (PIL)

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

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

b. Dr. Vinay Bharat Ram - Chief Executive Officer

c. Mr. Hemant Bharat Ram - President - Textiles

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

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

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

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

Enterprises where key management personnel have significant influence

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

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

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

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

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

The Company''s share of Assets, Liabilities, Income and Expenses, etc. (without elimination of the effect of transactions between the Company and the joint venture) are as under:

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

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

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

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

Note:

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


Mar 31, 2013

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

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

* Term loans from banks include :

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

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

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

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

# Refer note 10.

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

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

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

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

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

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

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

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

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

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

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

e) After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a ''No Lien /Designated Account'' with scheduled banks. Aggregate of amount so deposited as at the year end is Rs. 655.42 lacs (Previous year: Rs.823.16 lacs)

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

5. Contingent liabilities not provided for:

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

Claims not acknowledged as debts: *

– Income-tax matters 96.36 27.93

– Customs duty 12.55 12.55

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

– Property tax 391.56 800.62

– Others 262.78 249.82

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

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

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

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

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

11. The business of the Company was reorganised under a Scheme of Arrangement sanctioned by the High Court of Delhi, New Delhi vide its order dated April 16, 1990, effective from April 1, 1990 under the provisions of sections 391/394 of the Companies Act, 1956 and all the units of the Company existing at that time were re-organised under four separate companies, including this Company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars Limited. There are various issues relating to sales tax, income-tax, etc., arising/arisen out of the reorganisation arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

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

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

13. SEGMENT REPORTING

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

IT Services – IT Infrastructure services and software development.

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

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

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

– outside India

d) Segment accounting policies;

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

(i) Segment assets and liabilities:

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

(ii) Segment revenue and expenses:

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

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

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

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

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

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

f. DCM Data Systems Limited (DDSL)

II. Joint venture: Purearth Infrastructure Limited (PIL)

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

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

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

c. Dr. Vinay Bharat Ram - Chief Executive Officer

d. Mr. Hemant Bharat Ram - President - Textiles

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

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

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

Enterprises where key management personnel have significant influence:

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

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

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


Mar 31, 2012

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

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

* Term loans from banks include :

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

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

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

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

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

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

* Loans repayable on demand from banks include

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

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

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

** Other loans and advances include.

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

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

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

*** Refer note 38.

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

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

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

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

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

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

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

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

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

e) After considering the effect of Delhi High Court order dated April 28, 2011, the Company, has complied with the debt repayment obligations including in respect of debentures, deposits, loans and related interest and where such amount has not been claimed by the concerned party, deposited an equivalent amount into a 'No Lien /Designated Account' with scheduled banks. Aggregate of amount so deposited as at the year end is Rs. 823-16 lacs (Previous year: Rs. 829.71 lacs).

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

4. Contingent liabilities not provided for :

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

Claims not acknowledged as debts : *

- Income-tax matters 27.93 41,22

- Service tax - 4.84

- Customs duty 12.55 12.55

- Employees claims (to the extent ascertained) 39.32 44.52

- Property tax 800.62 800.62

- Others 249.82 236.86

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

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

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

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

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

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

10. The business of the Company was reorganized under a Scheme of Arrangement sanctioned by the High Court of Delhi, New Delhi vide its order dated April 16, 1990, effective from April 1, 1990 under the provisions of sections 391-394 of the Companies Act, 1956 and all the units of the Company existing at that time were re-organized under four separate companies, including this Company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars Limited. There are various issues relating to sales tax, income-tax, etc., arising/arisen out of the reorganization arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

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

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

d) Segment accounting policies;

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

(i) Segment assets and liabilities :

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

(ii) Segment revenue and expenses :

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

(iii) Inter segment sales ;

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

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

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

I. Subsidiaries (enterprises where control exists) :

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

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

II. Joint venture :

Purearth Infrastructure Limited (PIL)

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

a. Mr. Naresh Kumar Jain - Managing Director

b. Dr. Vinay Bharat Ram - Chief Executive Officer

c. Mr. Hemant Bharat Ram — President — Textiles

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

IV. Enterprises where key management personnel have significant influence

a. Aggresar Leasing and Finance Private Limited (ALFPL)

b. Betterways Finance and leasing Private Limited (BFLPL)

c. Xonix Enterprises Private Limited (XEPL)

d. Lotus Finance & Investments Private Limited (LFIPL)

e. Midopa Holdings Private Limited (MHPL)

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

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


Mar 31, 2011

1. Contingent liabilities not provided for:

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

– Income–tax matters 41.22 59.04

– Sales tax matters – 49.13

– Service tax 4.84 –

– Customs duty 12.55 12.55

– Employees claims (to the extent ascertained) 44.52 44.52

– Property tax 800.62 800.62

– Others 236.86 224.96

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

6. Earnings per share: Current Year Previous Year

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

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

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

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

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

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

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

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

12. The business of the Company was reorganised under a Scheme of Arrangement sanctioned by the High Court of Delhi, New Delhi vide its order dated April 16, 1990, effective from April 1, 1990 under the provisions of sections 391/394 of the Companies Act, 1956 and all the units of the Company existing at that time were re–organised under four separate companies, including this Company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars Limited. There are various issues relating to sales tax, income–tax, etc., arising/arisen out of the reorganisation arrangement, which will be settled and accounted for in terms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

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

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

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

15. SEGMENT REPORTING

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

IT Services – IT Infrastructure services and software development.

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

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

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

– within India

– outside India

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

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

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

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

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

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

I. Subsidiaries (enterprises where control exists):

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

II. Joint venture:

Purearth Infrastructure Limited (PIL)

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

a. Mr. Naresh Kumar Jain – Managing Director

b. Dr. Vinay Bharat Ram – Chief Executive Officer

c. Mr. Hemant Bharat Ram – President – Textiles

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

The Companys investment in the above joint venture is shown as Long Term Investment – Trade, under Schedule – 5. Due to non availability of financial statements of the aforesaid joint venture for year ended March 31, 2011 or within 6 months thereof, the disclosures required to be made in

terms of Accounting Standard (AS) –27 "Financial Reporting of interest in Joint Venture" for the current year have been made on the basis of Joint Ventures latest available ‘standalone financial statements for the year ended March 31, 2010. However, the Companys share of Assets, Liabilities, Income and Expenses, etc. (without elimination of the effect of transactions between the Company and the joint venture) has been determined on the basis of Companys shareholding in Joint Venture as of March 31, 2011.

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

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

1. Basis of Consolidation

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

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

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

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


Mar 31, 2010

1. Scheme of Restructuring and Arrangement (SORA):

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2. Contingent liabilities not provided for:

Current Year Previous Year Rs.lacs Rs.lacs

Claims not acknowledged as debts: *

- Income-tax matters 59.04 97.41

Sales tax matters 49.13 49.49

Customs duty 12.55 12.55

Employees claims (to the extent ascertained) 44.52 -

Property tax 800.62 -

Others 224.96 204.92

- Uncalled liability on shares partly paid 219.82 -

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

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

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

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

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

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

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

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

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

7. The business of the Company was reorganised under a Scheme of Arrangement sanctioned by the High Court of Delhi, New Delhi vide its order dated April 16, 1990, effective from April 1,1990 under the provisions of sections 391/394 of the Companies Act, 1956 and all the units of the Company existing at that time were re-organised under four separate companies, including this Company, namely, DCM Limited, DCM Shriram Industries Limited, DCM Shriram Consolidated Limited and Mawana Sugars Limited (formerly known as Siel Limited). There are various issues relating to sales tax, income-tax, etc., arising/arisen out of the reorganisation arrangement, which will be settled and accounted fot in tetms of the Scheme of Arrangement and memorandum of understanding between the companies as and when the liabilities/benefits are fully determined.

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

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

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

10. SEGMENT REPORTING

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

IT Services — IT Infrastructure services and softwate development.

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

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

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

— within India

— outside India

d) Segment accounting policies:

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

(i) Segment assets and liabilities:

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

(ii) Segment revenue and expenses:

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

(iii) Inter segment sales:

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

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

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

a. DCM Finance & Leasing Limited (DFL)

b. DCM Textiles Limited (DTL)

c. DCM Engineering Limited (DEL)

d. DCM Tools & Dies Limited (DTDL)

e. DCM Realty Investment & Consulting Limited (DRICL)

II. Joint venture:

Purearth Infrastructure Limited (PIL)

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

a. Mr. Naresh Kumar Jain - Managing Director

b. Dr. Vinay Bharat Ram - Chief Executive Officet

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

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

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

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X