|BSE: 502820||Sector: Industrials|
|NSE: DCM||ISIN Code: INE498A01018|
|BSE LIVE 15:44 | 07 Dec||104.55||
|NSE LIVE 15:51 | 07 Dec||104.50||
|Mkt Cap.(Rs cr)||195.30|
|Mkt Cap.(Rs cr)||195.30|
DCM Ltd. (DCM) - Director Report
Company director report
Your directors have pleasure in presenting this 126th Annual Report togetherwith the Audited Financial Statements of your Company for the year ended March 31 2016.
The year was marked by an economic slow-down with demand continuing to be sluggish andthe rural economy coming under stress due to a below-normal monsoon and unseasonal rains.The international market also faced headwinds in terms of sluggish economiesgeo-political issues and currency volatility in some markets.
However a decade-low slump in oil prices a major drain on Indias import billgave the desired boost to the governments foreign exchange reserves. Inflation and currentaccount deficit levels were maintained below the guidance targets. It provided the muchrequired momentum to the key macro indicators of the Indian economy in the year 2015-16.
The government has taken several initiatives like Ease of Doing Businessfresh investments in the roads and railways sectors revival of 50 airports SmartCity development urban development encouraging startups and skill development etc.The impact of most of these measures can only be gauged over a period of time and may notget reflected in the economic numbers immediately and they must hence be interpreted morein terms of laying a foundation for future growth.
India is a bright spot in a depressed global landscape. The Indian economy is on asteady growth path. The consequent increase in private consumption is likely to continuethrough 2016 making it possible for India to sustain its leading position as the largestfast-growing economy.
Rs. / Crores
TRANSFER TO RESERVES
No amount is proposed to be transferred to the General Reserve out of the amounavailable for appropriation.
During the financial year ended March 31 2016 your Company has declared an interimdividend of Rs. 1.50 (Rupee one and fifty paisa only) per equity share of Rs. 10 each outof accumulated profits of past years in November 2015 and the same was paid in December2015. Your directors do not recommend the final dividend for the financial year 2015-16.The interim dividend already paid will be considered as final dividend for the financialyear 2015-16.
OPERATIONS OVERVIEW Textile Division
The Textile Division of the Company is located at Hisar in Haryana with a capacity of114096 Spindles. During the year under review the production of yarn increased by 13%(approx.) to 28490 MT from 25271 MT last year mainly due to the increase in productioncapacity and ongoing TQM activities on improvements etc. Lower global demand especiallyfrom China increase in wages in the State and high volatility of local currency duringthe year restricted the Profit before Tax (PBT) to Rs. 6.65 Crores in the financial year2015-16.
Pursuant to sanction of Scheme of Amalgamation of DCM Engineering Ltd into & withDCM Ltd. by Honble Delhi High Court vide its order dated May 16 2016 theEngineering Business of erstwhile DCM Engineering Limited held under its Unit DCMEngineering Products stood vested with the Company as going concern from theappointed date of April 1 2014 and identified as Engineering Division of thecompany.
The said Unit was set up as a Grey Iron Foundry in 1977 with a capacity of 17000 MTPA(Metric Tons Per Annum). The capacity of this foundry was increased to 35000 MPTA &50000 MTPA in 1994-95 & 2005-06 respectively. Recently this capacity has beenfurther increased to 72000 MTPA making it one of the leading foundries in India in thesegment of automotive castings.
The Engineering Division is supplying castings across all segments in the automotivemarket: car multi-utility vehicle tractor light commercial vehicle heavy commercialvehicle and earth moving equipment.
During the year the Division made total dispatch of 40544 MT (previous year 47338MT). The volume continued to remain low primarily due to lower supplies to the tractorindustry which constitutes a major portion of the sales volume of the Division. It was dueto low demand in tractor segment on account of poor monsoon in two consecutive years whichaffected the agri sector both in terms of income and sentiment.
However the volume growth in the tractor industry is likely to improve in financialyear 2016-17 due to expected normal monsoon besides strong government support in budgetfor improvement in agricultural productivity and adoption of improved agriculturalpractices.
The losses during the year were due to continued lower volume under-recovery of fixedoverheads and reduction made in margins to retain market share due to intensivecompetition by new entrants supplying at lower rate(s).
The continued focus on process improvements and manufacturing techniques across allareas of operations has helped the Division to maintain cost effectiveness.
The sales volume of the Division is expected to increase in the medium and long-termwith the commercial supplies of new development items as well as positive growth expectedin auto industry on account of healthy economic outlook finance penetration investmentin roads infrastructure and new launches by original equipment manufacturers.
The IT Division of the Company is an established service provider for IT Infrastructuremanagement networking Analytics and Cloud related services operating through its officeslocated in India and USA.
During the year under review the sales and other income of the Division was Rs. 65.50crores compared to Rs. 75.54 crores in the previous year. The Profit before Tax (PBT) wasRs. 5.73 crores compared to Rs. 6.44 crores in the previous year.
The said decrease in PBT of around 13% was mainly on account of reduction in the USoperations precipitated by certain order closures. The export business however performedbetter and the Division was able to increase the customer base and build capabilities innewer technology areas.
Investments have been made in building sales bandwidth acquiring tools for furtherexpanding the export business and broadening the customer portfolio. This should help toinsulate operations and provide the desired impetus to the business in future.
MATERIAL CHANGES AND COMMITMENTS
Pursuant to sanction of Scheme of Amalgamation of DCM Engineering Limited(Subsidiary company/transferor company) into & with DCMLimited (Holding company/transferee company) with effect from theappointed date of April 1 2014 by Honble Delhi High Court vide its order dated May16 2016 which has become effective from May 28 2016 (i.e. effective date) DCMEngineering Limited ceased to exist from the said effective date. In terms of the Schemethe said Engineering Business of DCM Engineering Ltd held under its Unit namely DCMEngineering Products is identified as Engineering Division of theCompany.
There were no material changes and commitments affecting the financial position of theCompany occurring between March 31 2016 and the date of this Report.
CHANGES IN SHARE CAPITAL
Pursuant to sanction of Scheme of Amalgamation (Scheme) of DCM EngineeringLimited (subsidiary company/transferor company) into and with yourCompany by Honble Delhi High Court vide its order dated May 16 2016 15049988equity shares held by the Company in erstwhile DCM Engineering Limited stand cancelled. Interms of said Scheme the Company has allotted 1298712 equity shares of Rs. 10/- eachfully paid-up to other shareholders of DCM Engineering Limited on May 30 2016 includingallotment of 1298702 equity shares in aggregate to entities viz. M/s Aggressar Leasingand Finance Pvt. Ltd and M/s Midopa Holdings Pvt. Ltd. forming part of Promotersand Promoter Group of the Company.
As a result the total shareholding of Promoters and Promoters Group hasincreased to 9066584 equity shares of Rs. 10 each fully paid up representing 48.54% ofthe paid up equity capital of the Company.
Further the issued and subscribed capital of the Company has increased to Rs.186777490 and paid-up equity capital increased to Rs. 186746315 (excluding calls inarrears of Rs. 31175).
SUBSIDIARIES JOINT VENTURE AND ASSOCIATE COMPANIES
As on April 1 2015 the Company had six (6) subsidiaries and one (1) associate companywithin the meaning of Section 2(87) and 2(6) of the Companies Act 2013 respectively.
However consequent to amalgamation of erstwhile DCM Engineering Limited(material subsidiary) with the Company under a Scheme of Amalgamation assanctioned by Honble Delhi High Court vide its order dated May 16 2016 and itsbecoming effective on May 28 2016 at present the Company has five (5) subsidiaries andone (1) associate company within the meaning of Section 2(87) and 2(6) of the CompaniesAct 2013 respectively. There has been no material change in the nature of the business ofthe subsidiaries and associate company.
During the year under review no other company has become or ceased to beCompanys subsidiary joint venture or associate company.
Pursuant to provisions of Section 129(3) and other applicable provisions of theCompanies Act 2103 read with Rules made thereunder a statement containing salientfeatures of the financial statements performance and financial position of each of thesubsidiaries associates and joint venture companies in Form AOC-1 is enclosed as Annexure- A to the standalone financial statements of the Company and hence not repeated here forthe sake of brevity.
Pursuant to the provisions of Section 136 of the Companies Act 2103 the financialstatements consolidated financial statements of the Company along with relevant documentsand separate audited accounts in respect of subsidiaries are available on the website ofthe Company.
The Consolidated Financial Statements of the Company are prepared in accordance withprovisions of the Companies Act 2013 and relevant Accounting Standards issued by theInstitute of Chartered Accountants of India and form part of this Annual Report.
Mr. Arun Kumar Vedhera has resigned from the directorship of the Company with effectfrom May 29 2016. Your Board placed on record its appreciation for the contributions madeby him during his tenure as director of the Company.
Mr. Jitendra Tuli has resigned from the positions of Chairman & Managing Directorof the Company and has been relieved from his duties by the Board of Directors of theCompany with effect from January 29 2016. Mr. Tuli however continues on the Board of theCompany in his capacity as non-executive director of the Company.
As per recommendations of the Nomination and Remuneration Committee the Board ofDirectors in their meeting held on January 29 2016 have appointed Dr. Vinay Bharat Ram asan Additional Director on the Board with effect from January 29 2016 and also as ManagingDirector of the Company subject to the approval of members and other necessary approval(s)w.e.f. January 30 2016 on payment of remuneration and on other terms and conditions asapproved by the Board for a period of three years. Dr. Vinay Bharat Ram was alsoappointed as Chairman of the Board of Directors of the Company.
The members of the Company have also approved the appointment of Dr. Vinay Bharat Ramas Director as well as Managing Director of the Company through a recently conductedPostal Ballot.
Based on the recommendations of the Nomination and Remuneration Committee the Board ofDirectors of the Company in their meeting held on May 30 2016 have appointed :
i. Mr. L Lakshman Dr. Raghupati Singhania and Mr. Chandra Mohan as AdditionalDirectors on the Board of the Company with effect from May 30 2016.
ii. Mr. L Lakshman Dr. Raghupati Singhania and Mr. Chandra Mohan as IndependentDirectors of the Company under Section 149 of the Companies Act 2013 for a term of fiveconsecutive years with effect from May 30 2016 subject to the approval of theshareholders of the Company.
Necessary resolutions for seeking approval of members for their appointment asindependent directors of the Company have been included in the Notice of forthcoming 126thAnnual General Meeting of the Company.
Mr. Jitendra Tuli retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment as a director of the Company. Accordingly aresolution is included in the Notice of forthcoming 126th Annual GeneralMeeting of the Company for seeking approval of members for his appointment as a directorof the Company.
All the Independent Directors of the Company have given declaration(s) and haveconfirmed that they meet the criteria of independence as provided in the Section 149(6) ofthe Companies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) read with Section 134(5) of the Companies Act 2013your directors state that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The following persons are Whole-Time Key Managerial Personnel (KMP) of the
Company in terms of provisions of Section 203 of the Companies Act 2013:
* Ceased to be Chairman & Managing Director of the Company w.e.f. January 29 2016.
** He was designated as KMP in his capacity as CEO of the Company till 28.01.2016 andthereafter appointed as Chairman & Managing Director of the Company w.e.f. January 302016.
NUMBER OF BOARD MEETINGS
Six meetings of the Board of Directors of your Company were held during the year underreview.
EVALUATION OF BOARD PERFORMANCE
Pursuant to the provisions of the Companies Act 2013 and the corporate governancerequirements as prescribed by SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board of Directors has carried out an annual evaluation of its ownperformance Board committees and individual directors.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the diversity of the Boardeffectiveness of the board processes information and functioning etc.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeesand effectiveness of committee meetings etc.
The performance of the individual directors was reviewed on the basis of the criteriasuch as the contribution of the individual director to the Board and committee meetingslike preparedness on the issues to be discussed meaningful and constructive contributionand inputs in meetings etc.
The performances of non-independent directors Board as a whole and of the Chairman wasevaluated in a separate meeting of Independent Directors after taking into account theviews of executive directors and non-executive directors.
INTERNAL FINANCIAL CONTROL
The Company has in place an established internal control system to ensure properrecording of financial & operational information compliance of various internalcontrols and other regulatory/statutory compliances. All Internal Audit findings andcontrol systems are periodically reviewed by the Audit Committee of the Board ofDirectors which provides strategic guidance on Internal Controls. During the year theCompany has taken steps to review and document the adequacy and operating effectiveness ofinternal controls.
M/s B S R & Co. LLP Chartered Accountants (Registration No. 101248W) wereappointed as Statutory Auditors of the Company from the conclusion of 125thAnnual General Meeting (AGM) till the conclusion of 130th Annual GeneralMeeting of the Company subject to ratification of their appointment by the members atevery intermittent AGM of the Company.
Accordingly a resolution for ratification of their appointment as Statutory Auditorsof the Company has been included in the Notice of forthcoming 126th AnnualGeneral Meeting of the Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT
The Statutory Auditors Cost Auditors or Secretarial Auditors of the Company have notreported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Companies Act 2013 including rules made thereunder.
DIRECTORS VIEW ON AUDITORS OBSERVATIONS
Management response to the observations of the statutory auditors even though explainedwherever necessary through appropriate notes to the Accounts is reproduced hereunder incompliance with the relevant legal provisions.
Refer Basis for Qualified Opinion in Auditors Report on ConsolidatedFinancial Statements
Purearth Infrastructure Limited a joint venture company has received advances Rs.3368.46 lacs (Groups share in advances of joint venture are Rs. 552.76 lacs) forcertain bookings of units in its Plaza 4 of Central Square Project (referred as saidProject). The said advances have been shown as Advances from customersunder Other Current Liabilities. The management of the joint venture companyis yet to draw up construction plans for said Project. Further the revenue includingprice escalations and other recoveries in terms of the Scheme of Restructuring andunderstanding arrived with the booking holders of the said Project cannot be determined atthis stage. Thus the management of Joint Venture could not be able to estimate the likelylosses for such bookings under the Plaza 4 of Central Square Project and hencehave not been provided in the financial statement of the joint venture company. (Refernote 40 to the consolidated financial statements annexed.)
In terms of the Scheme of Restructuring and Arrangement (SORA) approved by theHonble Delhi High Court vide its order dated October 29 2003 under sections 391 -394 of the Companies Act 1956 and subsequent modification thereto vide Honble DelhiHigh Court order dated April 28 2011 the Company has complied with its debt repaymentobligation under SORA including in respect of debentures deposits loans and relatedinterest and where such amount has not been claimed by the concerned party deposited anequivalent amount into a No Lien/Designated Account with scheduled banks.
In case an invested amount remains unclaimed and un-encashed for a period of sevenyears from the date it becomes due for payment the same has been /will be transferred tothe Investor Education and Protection Fund established by the Central Govt. (the relevantdetails of the same are uploaded on the Companys website
The investors whose investment has remained unclaimed /un-encashed and in respect ofwhom a period of seven years has not lapsed from the due date as per SORA are required tolodge their claim with the Company by surrender of Debenture Certificates/Letter ofAllotment/un-encashed payment warrants at the registered office of the Company.
In respect of deposits accepted by the Company in the past under the Companies Act1956 the Company has paid the fixed deposit holders in all claimed cases in terms of theprovisions of SORA. The amount of unclaimed / legal cases has been deposited in a separatebank account to earmark the funds for the payment of these unclaimed / legal cases. Incase a deposit remained unclaimed and un-encashed for a period of seven years from thedate it became due for payment the same has been/will be transferred to the InvestorEducation and Protection Fund established by the Central Govt.
No disclosure or reporting is required in respect of deposits covered under Chapter Vof the Companies Act 2013 as the Company has not accepted any deposit after thecommencement of the Companies Act 2013.
There is a continuous process of identifying / managing risks through a Risk ManagementProcess. The measures used in managing the risks are also reviewed. Risks identified bythe Company broadly fall in the category of operational risk regulatory risk financial& accounting risk and foreign currency related risks. The risk management processconsists of risk identification risk assessment risk monitoring & risk mitigation.During the year measures were taken for minimization of risks and the Board was informedfrom time to time. In the opinion of the Board none of the said risks which have beenidentified may threaten the existence of the Company.
At present the Audit Committee of the Company consists of Mr. Bipin Maira ChairmanMr. Ravi Vira Gupta Mr. L Lakshman Prof. Sudhir Kumar Jain and Dr. Meenakshi Nayar asmembers of the committee. The terms of reference of the Audit Committee are in line withthe requirements of Section 177 of the Companies Act 2013 and Regulation 18 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
At present the CSR Committee of the Company consists of Dr. Vinay Bharat RamChairman Mr. Ravi Vira Gupta Mr. Jitendra Tuli and Dr. Meenakshi Nayar as members ofthe Committee.
This Committee is responsible for formulating and monitoring the CSR Policy of theCompany. The Companys CSR Policy is available on the Companys website
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is enclosed as Annexure -I and forms part of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of provisions of Section 197(12) of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules is enclosed as Annexure -II and forms part of this report.
A statement showing details pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed as Annexure- IIA and forms part of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186
Particulars of investment made and loans given are provided in the standalone financialstatements. (Please refer to Note Nos. 12 & 14 of the standalone financialstatements).
Pursuant to the approval given by the members the Company in its capacity as titleholder of land at Bara Hindu Rao / Kishanganj Delhi (Project land) in respect of whichthe development rights were vested with joint venture company in terms of SORA hasmortgaged the said land for loans availed in connection with development of real estateproject on the said land by joint venture company and also by a body corporate who hasbeen developing the real estate project along with the said joint venture company. Theoutstanding amount of loans on which mortgage was created as on 31.03.2016 was Rs. 193crores (previous year Rs. 95 crores)
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arms lengthbasis.
The prescribed Form AOC-2 is enclosed as Annexure - III and forms part of this Report.Your directors draw attention of members to Note No. 41 to the standalone financialstatements which sets out related party disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of Extract of Annual Return in prescribed form MGT-9 isenclosed as Annexure- IV and forms part of this Report.
For Financial Year 2015-16
The Board of Directors had appointed M/s K C Kohli & Co. Cost Accountants (FirmRegistration Number 100541) as Cost Auditors for financial year 2015-16 for audit of costaccounting records of Cotton Textile manufactured by the Company at aremuneration of Rs. 50000/- (Rupees fifty thousand only) plus service tax &out-of-pocket expenses if any. Members of the Company have also approved their aforesaidremuneration.
However consequent to sanction of Scheme of Amalgamation (i.e. Scheme) ofDCM Engineering Limited into and with your Company by Honble Delhi High Court theEngineering business of DCM Engineering Ltd under its Unit namely DCM EngineeringProducts stand vested with the Company as going concern form the appointed date ofApril 1 2014 and identified as Engineering Division of the Comnpany. The saidCast Iron Unit namely DCM Engineering Products is covered under ambit of CostAudit as prescribed under of Section 148 of the Companies Act 2013. Due to the same theBoard of Directors of the Company at its meeting held on May 30 2016 have appointed:
i. M/s. V Kumar & Associates Cost Accountants (Firm Registration Number 100137)as Cost Auditors for financial year 2015-16 for audit of Cost Accounts pertaining toCast Iron Unit of the Company namely DCM Engineering Products located atRopar Punjab at a remuneration of Rs. 125000/- (Rupees one lac and twenty five thousandonly) plus service tax & out-of-pocket expenses if any; and
ii. M/s V Kumar & Associates Cost Accountants (Firm Registration Number 100137)as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company forfinancial year 2015-16 at a remuneration of Rs. 60000/- (Rupees sixty thousand only)plus service tax & out-of-pocket expenses if any.
For Financial Year 2016-17
The Board in its meeting held on May 30 2016 has approved the following appointments:
i. M/s K C Kohli & Co. Cost Accountants (Firm Registration Number 100541) as CostAuditors for financial year 2016-17 for audit of cost accounting records of theCotton Textile manufactured by the Company at a remuneration of Rs. 50000/-(Rupees fifty thousand only) plus service tax & out-of-pocket expenses if any;
ii. M/s. V Kumar & Associates Cost Accountants (Firm Registration Number 100137)as Cost Auditors for financial year 2016-17 for audit of Cost Accounts pertaining toCast Iron Unit of the Company namely DCM Engineering Products located atRopar Punjab at a remuneration of Rs. 125000/- (Rupees one lac and twenty five thousandonly) plus service tax & out-of-pocket expenses if any; and
iii. M/s V Kumar & Associates Cost Accountants (Firm Registration Number 100137)as Lead Cost Auditors for consolidation of the Cost Audit Report etc. of the Company forfinancial year 2016-17 at a remuneration of Rs. 60000/- (Rupees sixty thousand only)plus service tax & out-of-pocket expenses if any.
In terms of Section 148 of the Companies Act 2013 and rules made there underremuneration of Cost Auditors as stated above is to be ratified by members of the Company.Accordingly suitable resolutions have been included in the Notice of forthcoming 126thAnnual General Meeting for ratification of remuneration payable to Cost Auditorsfor financial years 2015-16 & 2016-17 by members of the Company.
The Board has appointed Mrs. Pragnya Parimita Pradhan Companies Secretary in wholetimepractice Proprietor of M/s. Pragnya Pradhan & Associates Company Secretaries toconduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report forthe financial year 2015-16 is enclosed herewith as Annexure - V and forms part of thisReport. The Secretarial Audit Report does not contain any qualifications reservation oradverse remark.
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Corporate Governance Report along with Auditors certificate thereon and ManagementDiscussion and Analysis Report are enclosed and form part of this report.
1. Details of the familiarization programme of the independent directors are availableon the website of the Company at weblink: http://www.dcm.in/pdf/Familirisation-program-for%20independe-t%20directors.pdf.
2. Policy for determining material subsidiaries of the Company is available on thewebsite of the Company at weblink:
3. Policy on materiality of related party transactions and dealing with related partytransactions is available on the website of the Company at weblink: http://www.dcm.in/pdf/Policy-on-related-party-transactions.pdf
4. The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concernswhich is available on Companys website www.dcm.in.The provisions of this policy are in line with the provisions of Section 177(9) of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
5. The Companys Remuneration Policy is enclosed as Annexure - VI and forms partof this Report.
6. Annual Report on CSR Activities is enclosed as Annexure - VII and forms part of thisReport.
7. There were no significant or material orders passed by the Regulators or Courts orTribunals which impact the going concern status and Companys operations in future.
8. During the year under review there were no cases reported under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Directors wish to acknowledge and thank the Central and State Governments and allregulatory bodies for their continued support and guidance. The Directors thank theshareholders customers business associates Financial Institutions and Banks for thefaith reposed in the Company and its management.
The Directors place on record their deep appreciation of the dedication and commitmentof your Companys employees at all levels and look forward to their continued supportin the future as well.
ANNEXURES TO THE DIRECTORS REPORT
ANNEXURE - I
Information as per Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 and forming part of the Directors Report for the year endedMarch 31 2016 (A) CONSERVATION OF ENERGY
(i) the steps taken or impact on conservation of energy Textile Division:
The Textile mill is continuously endeavoring to develop the most energy efficientprocess as and to upgrade to latest energy-efficient devices. The division has installedcyclic timer identified and reduced the motor running time. The conventional tubes/bulbsare being replaced with LED light. Engineering Division:
The Division has taken various steps by process improvement on conservation of energyincluding
- Vertical oven (Diesel fired) for core drying replaced with new Thermic oven with LPGin plant -1.
- Small box electrical ovens were eliminated and process was streamlined for coredrying.
- Yield improvement was done resulting in savings of energy.
- Casting weight reduction was done resulting in savings in energy
- Water jacket core converted to cold box technology from electrical heating
- Insulation of LPG pipe to reduce the losses in peak winter season IT Division:
The operations involve low energy consumption. Wherever possible energy conservationmeasures have been implemented. Efforts to conserve and optimise the use of energy is acontinuous process.
(ii) the steps taken by the company for utilising alternate sources of energy
(iii) the capital investment on energy conservation equipments
(B) TECHNOLOGY ABSORPTION
(i) the efforts made towards technology absorption
During the year the Division has established the Loramendi Sand Mixer and LPG TunnelOven.
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution
Benefits of the above are reduction in cost and quality improvement.
IT Division - NA
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)
Textile Division - Nil
(a) the details of technology imported - N.A.
(b) the year of import - N.A.
(c) whether the technology been fully absorbed - N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof - N.A.
(a) the details of technology imported:
Loramendi Core Cell
CNC Milling Machine (Deckel DMF 180)
Loramendi Sand Mixer
(b) the year of import:
Loramendi Core Cell- FY 2012-13 & FY 2014-15
CNC Milling Machine (Deckel DMF 180) FY 2014-15
Loramendi Sand Mixer FY 2015-16
(c) Whether the technology been fully absorbed:
(d) If not fully absorbed areas where absorption has not taken place and the reasonsthereof:
IT Division - Nil
(a) the details of technology imported - N.A.
(b) the year of import - N.A.
(c) whether the technology been fully absorbed - N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof - N.A.
(iv) the expenditure incurred on Research and Development
Textile Division - Nil
The Division has got approval from Department of Scientific & Industrial ResearchMinistry of Science and Technology Delhi on 22nd June 2015 for Recognition ofIn house R&D Unit. The approval is for the period from 28.05.2015 to 31.03.2018.
In pursuit of R & D endeavors the Division is regularly incurring the expenditureon R&D. The expenditure incurred on Research and Development during the year:
Rs. In Lacs
R&D activities has resulted in new product development continuous improvement ofexisting products for enhanced durability & performance upgradation of products tothe new requirements reduced operation cost and new business opportunities because ofcost quality and latest technology.
(C) FOREIGN EXCHANGE EARNINGS & OUTGO
The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.
Rs. In Lacs
ANNEXURE - II
Information as per Section 134(3)(q) read with Rule 5(2)&5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from timeto time and forming part of the Directors Report
i. Employed throughout the year under review and who are in receipt of remuneration forthat year which in aggregate was not less than Rs. 60.00 lacs per annum:
ii. Employed for a part of the year under review and who are in receipt of remunerationfor any part of that year at a rate which in aggregate was not less than Rs. 5.00 Lacsper month
* Prior to his appointment in his capacity as Chairman & Managing Director of theCompany he has drawn remuneration of Rs. 118.41 Lacs for the period 01.04.2015 to29.01.2016 in his capacity as Whole-Time Director designated as Executive Chairman of theDCM Engineering Ltd (Subsidiary of the Company). His said term in DCM Engineering wascompleted on January 29 2016. The said Subsidiary Company has been amalgamated with theCompany uder a Scheme of Amalgamation as sanctioned by Honble Delhi High Court videits order dated May 16 2016 and its becoming effective on May 28 2016.
# Remunation paid in his capacity as Managing Director of the Company.
1. The employments are contractual. 2. Remuneration include basic salary contributionto provident and superannuation funds allowances and taxable value of perquisites. 3.Pursuant to proviso to Rule 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the particulars of employees posted and working in acountry outside India not being directors or their relatives drawing more than sixtylakh rupees per financial year or five lakh rupees per month have not been included inthis statement.
ANNEXURE - IIA
Statement of Particulars as required under Section 197 of the Companies Act 2013 readwith rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
# All the Non-Executive Directors of the Company were not paid any remuneration andwere paid only sitting fee for attending meetings of the Board/Committees of directors.Therefore the said ratio of remuneration of each director to median remuneration of theemployees of the company is not applicable.
* Remained in employment in his capacity as Managing Director of the Company for partof the year. Therefore the said ratio of remuneration of each director to medianremuneration of the employees of the company is not applicable.
(ii) The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year Directors
# All the Non-Executive Directors of the company were not paid any remuneration andwere paid only sitting fee for attending meetings of the Board/Committees of Directors.Therefore the said percentage increase in remuneration of Directors is not applicable.
* Drawn Remuneration and remained in employment in his capacity as Managing Director ofthe Company for part of the year. Therefore the said percentage increase in hisremuneration is not applicable.
Chief Executive Officer Chief Financial Officer and Company Secretary
* Remained in employment in his capacity as Chief Executive Officer of the Company forpart of the financial year 2015-16. Further no remuneration was paid to him in hiscapacity as Chief Executive Officer in the financial years 2014-15 and 2015-16. Thereforethe said percentage increase in his remuneration is not applicable.
** Remained in employment in his capacity as Company Secretary of the Company for partof the financial year 2014-15. Therefore the said percentage increase in his remunerationis not applicable.
(iii) The percentage increase in the median remuneration of employees in the financialyear: 13.91%
(iv) The number of permanent employees on the rolls of Company: 5073
(v) The explanation on the relationship between average increase in remuneration andCompany performance
On an average employees received an annual increase of 9.568%.The remuneration issubject to review on the basis of individual and/or business performance andinflation/market trends. The performance of employees is reviewed based on competencyassessment and key results delivered.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
(vii) (a) Variations in the market capitalization of the Company price earnings ratioas at the closing date of the current financial year and previous financial year
(vii) (b) Percentage increase over decrease in the market quotations of the shares ofthe Company in comparison to the rate at which the Company came out with the last publicoffer
* As per last public offer the Company had allotted equity shares at price of Rs. 45per shares on conversion of Part-A of its Right Issue of Partly Convertible Debentures(PCD) on 31.07.1993.
(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average annual increase in the salaries of employees other than the managerialpersonnel during the FY 2015-16 over FY 2014-15 was around 9.568%. The directors of thecompany were not paid any managerial remuneration in the financial year 2014-15. Howeverin financial year 2015-16 Dr. Vinay Bharat Ram was paid remuneration for part of the yearin his capacity as Managing Director of the Company. Therefore the said comparison ofaverage percentile increase in the salaries of employees other than the managerialpersonnel with the percentile increase in the managerial remuneration is not applicable.
(ix) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company
* Prior to his appointment as Chairman and Managing Director of the Company he wasacting as Chief Executive Officer of the Company till 28.01.2016 and was not drawing anyremunation from the Company.
# Remained in employment in his capacity as Managing Director of the Company for thepart of the year. Therefore the above percentage is not annualised.
(x) The key parameters for any variable component of remuneration availed by thedirectors: NIL
(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year
The directors of the company were not paid any managerial remuneration in the financialyear 2014-15. However in financial year 2015-16 Dr. Vinay Bharat Ram was paidremuneration for part of the year in his capacity as Managing Director of the Company.Therefore the said ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year is not applicable.
(xii) Affirmation that the remuneration is as per the remuneration policy of theCompany
The Company affirms that remuneration is as per the remuneration policy of the Company.