Your directors have pleasure in presenting this 129th Annual Report togetherwith the Audited Financial Statements of your Company for the financial year ended March31 2019.
One year ago economic activity was accelerating in almost all regions of the world andthe global economy was projected to grow at 3.9 percent in 2018 and 2019. One year latermuch has changed: the escalation of USChina trade tensions disruptions to the autosector in Germany and financial tightening alongside the normalization of monetary policyin the larger advanced economies have all contributed to a significantly weakened globalexpansion especially in the second half of 2018. While 2019 started out on a weakfooting a pickup is expected in the second half of the year with the support ofsignificant policy accommodation by major economies.
India has emerged as the fastest growing major economy in the world and is expected tobe one of the top three economic powers of the world over the next 10-15 years backed byits strong democracy and partnerships.
Indian Economy started the 3scal year 2018-19 with a healthy 8.2 percent growth in the3rst quarter. Growth eased to 7.3 percent in the subsequent quarters. 3e country wasconfronted with the cumulative impact of a strengthening US Dollar and rising crude oilprices. 3is resulted in a sharp adjustment in Rupee amidst volatile trading in emergingmarket currencies. Further recovery in some advanced economies also caused fasterinvestment outflows.
The interim Union Budget for 2019-20 announced by the Government of India on February01 2019 focused on supporting the needy farmers economically less privileged workers inthe unorganised sector and salaried employees while continuing the Government of India'spush towards better physical and social infrastructure.
Building on the interim Budget the finance minister presented the final Budget for FY2019-20. The Budget can be seen as an inclusive and pragmatic approach to help the nationmove from the current $2.7 trillion economy to a $5 trillion one over the next 5 years.
The Finance Minister unleashed a pro-development budget which aims at inclusivedevelopment in economy infrastructure environment education affordable housingelectric vehicles with focus on revitalizing Micro Small & Medium Enterprises (MSME)startup ecosystem and rural India to provide ease of living improve inclusive growthreduce income inequality build digital ecosystem create a cashless economy and bringabout a transparent and honest regime.
|Particulars ||Financial Year ended ||Financial Year ended |
| ||March 31 2019 ||March 31 2018 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Profit before Interest ||6479.20 ||2682.35 |
|Depreciation and Tax || || |
|Less: -Finance Cost ||2755.20 ||2613.03 |
|-Depreciation ||3443.82 ||3624.32 |
|Profit before Tax ||280.18 ||(3555.00) |
|Less -Provision for tax ||80.55 ||(0.074) |
|Profit after tax ||199.63 ||(3554.26) |
|Other Compressive income ||28.16 ||46.76 |
|Total Compressive income ||227.79 ||3507.50 |
|Particulars ||Financial Year ended ||Financial Year ended |
| ||March 31 2019 ||March 31 2018 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Add - Profit brought forward ||9841.97 ||13349.47 |
|Add - Transferred from ||0.07 ||- |
|Crescita Enterprises Pvt. Ltd. as Amalgamation || || |
|Profit available for appropriation ||10069.69 ||9841.97 |
|Appropriations: || || |
|Interim Dividend on equity shares ||- ||- |
|Proposed Final Dividend on equity shares ||- ||- |
|Corporate Dividend Tax ||- ||- |
|General Reserves ||- ||- |
|Balance Profit carried forward ||10069.69 ||9841.97 |
The Company has adopted Indian Accounting Standard (Ind AS) with effect from 1stApril 2017. Accordingly financial statements for the year ended 31st March2019 have been prepared in accordance with Indian Accounting Standard (Ind AS) as per theCompanies (Indian Accounting Standard) Rules 2015 noti3ed under section 133 of theCompanies Act 2013.
TRANSFER TO RESERVES
No amount is proposed to be transferred to the General Reserve out of the amountavailable for appropriation.
Your directors do not recommend any dividend for the financial year 2018-19.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance withprovisions of the Ind AS as per the Companies (Indian Accounting Standard) Rules 2015noti3ed under section 133 of the Companies Act 2013 and form part of this Annual Report.
OPERATIONS OVERVIEW Textile Division
The Textile Division of the Company is located at Hisar in Haryana with a capacity of114096 Spindles. During the year under review the Profit Before Tax (PBT) increased toRs. 38.66 crores in financial Year 2018-19 as compared to Rs. 15.51 crores in the previousfinancial year 2017-18. During the year the profitability of the Textile Division washigher primarily due to increase in margin on account of increase in yarn prices higherexport market demand and rupee depreciation etc. The said Textile Division of the Companyhas been demerged as going concern with effect from appointed date of April 1 2019 intoDCM Nouvelle Limited. (Please refer below para on Schemes of Arrangements/Amalgamations and Slump Sale' for further details).
The Engineering Division is supplying castings across all segments in the automotivemarket: cars multi-utility vehicles tractors light commercial vehicles heavycommercial vehicles and earth moving equipment.
During the year the Division achieved total dispatch of 46615 MT (previous year40957 MT). The Engineering Division continued to make losses because of lower volume dueto production constraints primarily on account of IR issues besides low demand in thelast quarter of the year and decline in margin because of higher rejection increasedinput cost and under recovery of the fixed overheads. The increased level of interactionby officers at di3erent levels have resulted in improved morale of workmen and cordialrelations with them. The Division continue to focus for cost optimization and betterproductivity across all areas of operations.
The IT Division of the Company is an established service provider for managed ITServices globally. The Division has over a decade's experience in IT Infrastructureservices specializing in networking analytics cloud and digital technologies. Duringthe year under review the sales and other income of the Division was Rs. 44.27 crores(previous year Rs. 44.98 crores) and Profit before Tax (PBT) was Rs 2.25 crores (Previousyear Rs. 1.63 crores).
During the year the operations were stable after the cut backs by some of Division'sprimary customers in the previous year pursuant to downturn in their business. The fullimpact of order cancellations and drop in volumes was absorbed during the current year.The Division expect the position to improve next year with stabilization of the onsitebusiness and new export order booking in the managed services business. Fresh investmentshave been made in building sales bandwidth and acquiring tools for further growing theservices business. 3is should help to provide the desired impetus especially to theo3shore business in future.
SCHEMES OF ARRANGEMENT/AMALGMATION AND SLUMP SALE
1. The Board of Directors of the Company in its meeting held on February 11 2019 haswithdrawn the following composite scheme of Arrangement for the: a. Amalgamation of TiaraInvestment Holdings Limited into Purearth Infrastructure Limited a joint venture companywith effect from December 31 2016; b. Demerger of the Real Estate Undertaking of DCMLimited into DCM Realty and Infrastructure Limited on a going concern basis with effectfrom January 1 2017; and c. Following the amalgamation as referred to in (a) and demergeras referred to in (b) above amalgamation of the Amalgamated Purearth into the ResultingDCM Realty leading to Amalgamated DCM Realty with effect from January 1 2017.
2. NCLT vide its Order dated May 01 2019 has sanctioned the Scheme of Arrangementbetween the Company and DCM Nouvelle Limited a wholly owned subsidiary of the Company('Resulting Company') and their respective shareholders and creditors under sections230-232 read with section 66 and other applicable provisions of the Companies Act 2013for the demerger of the cotton textile business undertaking of the Company and vesting ofthe same with Resulting Company on a going concern basis with effect from appointed dateof April 1 2019. The said scheme has become effective on May 13 2019. Further pursuantto the said scheme becoming effective 50000 (100%) equity shares held by the Company andits nominees in the Resulting Company stand cancelled with effect from May 13 2019.
The Resulting Company has issued and allotted its 18677749 equity shares of Rs.10/-each fully paid-up to the shareholders of Demerged Company whose names appears in theRegister of Members and in the statement of beneficial position furnished by thedepositories as at close of business hours on Friday May 31 2019 in terms of thefollowing Shares Entitlement Ratio stated in the Scheme of Arrangement:
"1(one) equity share of Rs.10/- each of Resulting Company credited as fullypaid-up for every 1 (one) equity share of Rs.10/- each fully paid-up held in theDemerged Company." In terms of said Scheme of Arrangement the aforesaid equityshares of Resulting Company have been listed at BSE Limited (BSE) and National StockExchange of India Limited (NSE) under securities code 542729 (BSE) and DCMNVL (NSE).
3. NCLT vide its Order dated January 8 2019 has sanctioned the Scheme of Amalgamationof Crescita Enterprises Private Limited (Transferor Company') into & with theCompany and their respective shareholders and creditors under sections 230-232 otherapplicable provisions of the Companies Act 2013 with effect from appointed date of March31 2017 for the purpose of restructuring of shareholding of Promoters and Promotergroup' of the Company. The said scheme has become effective on January 30 2019.Transferor Company ceased to exist from the said effective date and the entire business ofthe Transferor Company has got vested/transferred with the Company as a going concernalong with all assets and liabilities from the appointed dated of 31.03.2017 in terms ofaforesaid scheme of amalgamation.
Further pursuant to the aforesaid scheme of amalgamation becoming effective 9030495(48.35%) equity shares held by the Transferor Company in the DCM Limited stand cancelledwith effect from effective date of January 30 2019. 3ereafter in terms of the aforesaidScheme of Amalgamation the Company has issued and allotted 9030495 equity shares to theshareholders of the Transferor Company in proportion to the equity shares held by them inthe Transferor Company.
4. The Board of Directors in its meeting held on May 29 2019 have decided subject toapproval of shareholders and Financial Institution/ Banks wherever necessary for slumpsale of the Engineering Business Undertaking (i.e. DCM Engineering Products) into DCMTools & Dyes Limited a wholly owned subsidiary of the Company at such value and witheffect from such date as may be decided by the Board of Directors of the Company afterseeking approvals of Shareholders Banks and Financial Institutions. A resolution in thisrespect has been included in the Notice of forthcoming 129th AGM of the Companyfor seeking approval of members of the Company.
MATERIAL CHANGES AND COMMITMENTS
The cotton textile business undertaking of the Company stand transferred and vested inthe DCM Nouvelle Limited with effect from Appointed date of April 1 2019 under Scheme ofArrangement between the Company and DCM Nouvelle Limited (Resulting Company')sanctioned by Hon'ble National Company Law Tribunal Principal Bench New Delhi (NCLT)vide its order dated May 1 2019 and its becoming effective from May 13 2019.
Except as stated above there was no change in the nature of the business of theCompany. Further there were no other material changes and commitments affecting thefinancial position of the Company occurring between March 31 2019 and the date of thisReport except as stated above.
CHANGES IN SHARE CAPITAL
Crescita Enterprises Private Limited was holding 9030495 equity shares of the Companyas a part of Promoters and Promoter group' of the Company. Pursuant to the Scheme ofAmalgamation of Crescita Enterprises Private Limited (Transferor Company') into andwith DCM Limited (Transferee Company/ Company) becoming effective 9030495 (48.35%)equity shares held by the Transferor Company in the Company stand cancelled and samenumber of equity shares (i.e. 9030495) were issued and allotted by the Company to theshareholders of the Transferor Company (i.e. 9028689 numbers of equity shares to Dr.Vinay Bharat Ram and 1806 equity shares to Mr. Sumant Bharat Ram) in proportion to theshares held by them in the Transferor Company. Dr. Vinay Bharat Ram and Mr. Sumant BharatRam forms part of Promoters and Promoter Group' of the Company.
As a result the pre and post scheme shareholding of Promoters and PromotersGroup' as well as issued and subscribed capital of the Company remained the same. Furtherthe Company has adjusted the amount of calls in arrear amounting to Rs. 31175/- witheffect from appointed date of April 1 2019 in the reserves and surplus as provided in theScheme of Arrangement between the Company and DCM Nouvelle Limited ('Resulting Company')for the demerger of the cotton textile business undertaking of the Company sanctioned byNCLT vide its order dated May 1 2019.
SUBSIDIARIES JOINT VENTURE AND ASSOCIATE COMPANIES
As on April 1 2018 the Company had seven subsidiaries and one associate companywithin the meaning of Section 2(87) and 2(6) of the Companies Act 2013 respectively.
During the year under review no company has become or ceased to be Company'ssubsidiary joint venture or associate company. However pursuant to the Scheme ofArrangement between Company and DCM Nouvelle Limited ('Resulting Company') becomingeffective on May 13 2019 50000 (100%) equity shares held by the Company and itsnominees in the Resulting Company stand cancelled with effect from May 13 2019.Accordingly DCM Nouvelle Limited ceased to be wholly owned subsidiary of the Company witheffect from May 13 2019.
At present the Company has six subsidiaries and one associate company within themeaning of Section 2(87) and 2(6) of the Companies Act 2013 respectively. 3ere has beenno material change in the nature of the business of the subsidiaries and associatecompany.
Pursuant to provisions of Section 129(3) and other applicable provisions of theCompanies Act 2013 read with Rules made there under 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 provided as part ofthe standalone financial statements of the Company at page no. 170 and hence not repeatedhere for the sake of brevity.
Pursuant to the provisions of Section 136 of the Companies Act 2013 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.
Dr. Vinay Bharat Ram retires by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment as a director of the Company.Accordingly a resolution is included in the Notice of forthcoming 129th AnnualGeneral Meeting (AGM) of the Company for seeking approval of members for his appointmentas a director of the Company.
Further Dr. Vinay Bharat Ram is more than 75 years of age. Pursuant to Regulation17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended from time to time (hereinafter referred to as SEBI Listing Regulations')suitable resolution for continuation of appointment of Dr. Vinay Bharat Ram in hiscapacity as director of the Company liable to retire by rotation w.e.f. date of 129thAGM has also been included in the Notice of forthcoming 129th AGM of theCompany for seeking approval of members of the Company by special resolution.
During the year under review Mr. Sushil Kapoor was re-appointed as Whole -TimeDirector and designated as Executive Director (Engineering Business) of the Company for afurther period of 3 year with effect from January 15 2019 to January 14 2022. Hisre-appointment is subject to approval of members of the Company. Accordingly a suitableresolution for seeking approval of members of the Company for his re-appointment as Whole-Time Director designated as Executive Director (Engineering Business) of the Company hasbeen included in the Notice of ensuing 129th AGM of the Company.
Mr. Sumant Bharat Ram Chief Executive & Financial Officer (CE&FO) of theCompany has resigned and ceased to be CE&FO of the Company with effect from March 312019. The Board of Directors of the Company have appointed him as an additional directorof the Company with effect from April 1 2019 and as such he holds office upto the date ofensuing 129th AGM of the Company. Accordingly a resolution for his appointmentas director of the Company liable to retire by rotation has been included in the Noticeof ensuing 129th AGM of the Company for seeking approval of members of theCompany.
Due to the old age and di3culties to travel outside Chandigarh Mr. Chandra MohanIndependent Director of the Company has resigned from the Board of Directors of theCompany on August 07 2018 before the expiry of his term as Independent Director of thecompany. Requirement as specified under SEBI Listing Regulations in respect of providingnecessary confirmation that there is no other material reasons for his resignation otherthan those provided was not applicable at the time of resignation of Mr. Chandra Mohan.
Mr. Narendra Pal Chawla Nominee Director of Life Insurance Corporation of India (LIC)has resigned from the directorship of the Company with effect from December 11 2018.Further Mr. K S Nangyal has been nominated as its Nominee Director by LIC on the Board ofthe Company w.e.f. January 11 2019.
Due to his various other professional obligations and arduous travelling requirementsMr. L Lakshman Independent Director of the Company has resigned on June 29 2019 from theBoard of Directors of the Company before the expiry of his term as Independent Director ofthe company. In terms of SEBI Listing Regulations Mr. L Lakshman has provided necessaryconfirmation that there is no other material reasons for his resignation other than thoseprovided. Due to his increasing other commitements Dr. Raghupati Singhania IndependentDirector of the Company has resigned on July 10 2019 from the Board of Directors of theCompany before the expiry of his term as Independent Director of the company. In terms ofSEBI Listing Regulations Dr. Raghupati Singhania has also provided necessary confirmationthat there is no other material reasons for his resignation other than those provided.
The Board placed on record its sincere appreciation and thanks for the valuablecontributions made by Mr. Narendra Pal Chawla as Nominee Director and Mr. Chandra MohanMr. L Lakshman and Dr. Raghupati Singhania as Independent Directors of the Company.
Mr. Jitendra Tuli Non-Executive Director of the Company has been appointed asIndependent Director of the Company for a period of five (5) years with effect from August12 2019 upto August 11 2024 subject to approval of shareholders of the Company. Mr.Jitendra Tuli is more than 75 years of age accordingly in terms of regulation 17(1A) ofSEBI Listing Regulations approval of members is required by way of Special Resolution.3erefore suitable resolution for approval of shareholders of the Company for appointmentof Mr. Jitendra Tuli as Independent Director has been included in the notice of ensuing129th Annual General Meeting of the Company.
Mr. Ravi Vira Gupta Mr. Bipin Maira Prof. Sudhir Kumar Jain and Dr. Meenakshi Nayarwere appointed as an independent director(s) of the Company for a period of five (5) yearswith effect from August 4 2014 upto August 3 2019. The Board of Directors of the Companyin their meeting held on May 29 2019 have re-appointed them as independent directors ofthe Company for a second term of five (5) years with effect from August 4 2019 subject toapproval of shareholders of the Company by special resolution. Accordingly suitableresolution(s) for seeking approval of shareholders of the Company for re-appointments ofMr. Ravi Vira Gupta Mr. Bipin Maira Prof. Sudhir Kumar Jain and Dr. Meenakshi Nayar asIndependent Directors of the Company by special resolution have been included in theNotice of ensuing 129th AGM of the Company. Further Mr. Ravi Vira Gupta and Mr.Bipin Maira are more than 75 years of age therefor approval of members by specialresolution is also being taken under regulation 17(1A) of the SEBI Listing Regulations forre-appointment of Mr. Ravi Vira Gupta and Mr. Bipin Maira as Independent Directors of theCompany. However due to pre occupation with other professional activities related tonot-for-profit venture Dr. Meenakshi Nayar Independent Director of the Company hasresigned on August 6 2019 from the Board of the Directors of the Company before theexpiry of her term as Independent Director of the Company. In terms of SEBI ListingRegulations Dr. Meenakshi Nayar. has provided necessary confirmation that there is noother material reasons for her resignation other than those provided. Accordingly membersapproval is sought for re-appointment of Dr. Meenakshi Nayar as Independent Director ofCompany for the period from August 4 2019 to August 6 2019.
The Board placed on record its sincere appreciation and thanks for the valuablecontributions made by Dr. Meenakshi Nayar as Independent Director of the Company.
Pursuant to the provisions of Section 149 of the Companies Act 2013 the independentdirectors have submitted declarations that each of them meet the criteria of independenceas provided in Section 149(6) of the Companies Act 2013 along with Rules framedthereunder and Regulation 16(1)(b) of the SEBI Listing Regulations and there has been nochange in the circumstances affecting their status as independent directors of theCompany. In terms of regulation 25(8) of SEBI Listing Regulations they have alsoconfirmed that they are not aware of any circumstance or situation which exists or may bereasonably anticipated that could impair or impact their ability to their duties.
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 applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; (b) the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period; (c) thedirectors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities; (d)the directors had prepared the annual accounts on a going concern basis (Please refer tothe auditor's opinion in their report on standalone and consolidated financial statementsof the Company with regard to material uncertainty related to going concern.); (e) thedirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and (f) thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
Pursuant to sanction of Scheme of Arrangement between the Company and DCM NouvelleLimited (Resulting Company') by NCLT and its becoming effective from May 13 2019the Textile Division of the Company stand transferred and vested in the Resulting Company.Pursuant to same Mr. Hemant Bharat Ram President (Textiles) and Mr. Rakesh Goel CEOTextile Division ceased to be employees of Company and were deemed to become employees ofResulting Company with effect from appointed date of April 1 2019. Mr. Sumant Bharat RamChief Executive & Financial Officer (CE&FO) of the Company has resigned and ceasedto be CE&FO of the Company with effect from March 31 2019. Mr. Ashwani Kumar SinghalExecutive Vice President (Finance & Accounts) of the Company has been appointed asChief Financial Officer (CFO) of the Company w.e.f. April 01 2019.
Accordingly as on date the following persons are Whole-Time Key Managerial Personnel(KMP') of the Company in terms of provisions of Section 203 of the Companies Act2013: a. Dr. Vinay Bharat Ram Chairman & Managing Director b. Mr. Sushil Kapoor- Executive Director (Engineering Business) c. Mr. Dinesh Dhiman- Executive Director(Engineering Operation) d. Mr. Varun Sarin Chief of Operations & Finance ITDivision e. Mr. Ashwani Singhal - Chief Financial Officer f. Mr. Yadvinder Goyal Company Secretary
NUMBER OF BOARD MEETINGS
(Six) meetings of the Board of Directors of your Company were held during the yearunder review (for further details please refer to the Corporate Governance Report formingpart of this Annual Report).
EVALUATION OF BOARD PERFORMANCE
The Board of Directors has carried out an Annual Performance Evaluation of its ownBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allDirectors on the basis of the criteria such as Board composition and structureseffectiveness of Board processes information and functioning etc. The performance of theCommittees was evaluated by the Board after seeking inputs from the Committee members onthe basis of the criteria such as the composition of Committees effectiveness ofCommittee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual Directors on the basis of the criteria such as qualification experienceknowledge competency availability attendance commitment and contribution of theIndividual Director to the Board and Committee meetings. Further performance ofIndependent directors evaluated on additional criteria such as fulfillment of independencecriteria by them and their independence from the management. The performance evaluation ofIndependent Directors was done by the entire Board of Directors and in the evaluation thedirectors who are subject to evaluation had not participated. Also in a separate meetingof Independent Directors performance of Non-Independent Directors Board as a whole andthe Chairman were evaluated taking into account the views of Executive Directors andNon-Executive Directors.
The Directors expressed their satisfaction with the evaluation process
INTERNAL FINANCIAL CONTROL
The Company has a well-placed proper and adequate Internal Financial Control (IFC)system which ensures that all assets are safeguarded and protected and that thetransactions are authorised recorded and reported correctly. The Company's IFC systemalso comprises due compliances with Company`s policies and Standard Operating Procedures(SOP`s) and supported by internal audit from reputed audit firms.
The Internal Auditors independently evaluate the adequacy of internal controls andconcurrently audit the majority of the transactions in value terms. Independence of theaudit and compliance is ensured by direct reporting of Internal Auditors to the AuditCommittee of the Board.
All Internal Audit 3ndings and control systems are periodically reviewed by the AuditCommittee of the Board of Directors which provides strategic guidance on InternalControls.
M/s B S R & Co. LLP Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed as Statutory Auditors of the Company for a term of 5 years tohold office from the conclusion of 125th Annual General Meeting (AGM) held onAugust 18 2015 till the conclusion of 130th Annual General Meeting of theCompany subject to annual rati3cation of their appointment by the members at everyintermittent AGM of the Company on such remuneration as may be decided by the AuditCommittee of the Board.
Pursuant to amendment to Section 139 of the Companies Act 2013 which became effectivefrom May 7 2018 the annual rati3cation of statutory auditors is no longer required.Accordingly the Notice of ensuing Annual General Meeting does not include the proposal forseeking shareholders' approval for rati3cation of appointment of Statutory Auditors of thecompany.
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/OPINION
Management response to the observations / opinion of the statutory auditors even thoughexplained wherever necessary through appropriate notes to the Accounts is reproducedhereunder in compliance with the relevant requirements.
Refer Material Uncertainty Related to Going concern' in auditors report onstandalone and consolidated financial statements.
The management believes that the Company will be able to continue its operations on agoing concern basis by infusing liquidity in the system by monetizing other surplusassets and also focusing on the business strategy and future operating plans of theexisting businesses including proposal of strategic partnership for "capital andtechnology" which would help sustain the business operations and its growth.
Refer Basis for Qualified Opinion' in Auditors report on consolidated financialstatement
Purearth Infrastructure Limited a jointly controlled entity (PIL) has receivedadvances Rs. 2110.83 lacs (31 March 2018: Rs. 3196.19 lacs) for sale bookings of unitsin Plaza 4 of Central Square project. 3ese advances have been presented as Contractliabilities-advances from customers' under other current liabilities in the financialstatements of PIL (share of Group in these advances of joint venture are amounting to Rs.349.55 lacs (31 March 2018: Rs. 529.29 lacs)). During the current year PIL based on itsbest estimates of the cost to compete and revenue to be earned has made a provision of Rs342.15 lacs (31 March 2018: Nil) towards foreseeable losses for such bookings in Plaza 4(share of Group in this provision of foreseeable losses of joint venture is Rs. 56.66 lacs(31 March 2018: Rs. Nil)). The estimates involve certain assumptions and significantjudgement and hence may undergo a change based on further execution of the project theeffects of which if any would be accounted for as change in estimates in the year ofchange. (Refer Note 56(c) of the consolidated financial statement annexed)
FIXED DEPOSIT / DEBT REPAYMENT
The Company has complied with its debt repayment obligation under Scheme ofRestructuring and Arrangement (SORA) approved by the Hon'ble Delhi High Court vide itsorder dated October 29 2003 under sections 391 394 of the Companies Act 1956 andsubsequently modified vide Hon'ble Delhi High Court order dated April 28 2011 includingin respect of fixed deposits debentures loans and related interest and where such amounthas not been claimed by the concerned party deposited an equivalent amount into aNo 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 (IEPF) established by the Central Govt.
Your Company has uploaded the relevant details of amount lying unclaimed /unencashedas on the date of last Annual General Meeting on account of matured Fixed Deposits andDebentures on the website of Ministry of Corporate Affairs (MCA) as well as on its websitewww.dcm.in. Deposit-holders/Debenture-holders may kindly check the said information and ifany amount on account of matured deposits matured debentures or interest thereon isappearing as unclaimed / un-encashed against their name they may lodge their claim dulysupported by relevant documents to the Company.
Any person whose unclaimed/un-encashed matured fixed deposits matured debentures orinterest thereon have been transferred to the IEPF can apply for refund as the case maybe by making an application to the IEPF Authority in Form No. IEPF-5 available onwww.iepf.gov.in. The Deposit-holders/ Debenture-holders can 3le only one consolidatedclaim in a financial year as per the IEPF Rules. 3erefore it is in the interest ofdeposit-holders/debenture-holders to claim the unclaimed / un-encashed amount of maturedfixed deposits matured debentures or interest thereon with in scheduled time.
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.
TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS AND RELEVANT EQUITY SHARES TO THE INVESTOREDUCATION AND PROTECTION FUND
Pursuant to Sections 124 and 125 of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 ("IEPF Rules") dividend if not claimed for a consecutive period of 7years from the date of transfer to Unpaid Dividend Account of the Company are liable tobe transferred to the Investor Education and Protection Fund ("IEPF").
Further all the shares in respect of which dividend has remained unclaimed for sevenconsecutive years or more from the date of transfer to unpaid dividend account shall alsorequire to be transferred to IEPF Authority. The said requirement does not apply to sharesin respect of which there is a specific order of Court Tribunal or Statutory Authorityrestraining any transfer of the shares.
The details of unclaimed dividends and shareholders whose shares are liable to betransferred to the IEPF Authority are available on the Company's website (www.dcm.in).
Accordingly during the year the Company has transferred the unclaimed final dividendamount of Rs. 1316915.50/- for FY 2010-11 which was outstanding for 7 consecutiveyears. Further 232621 equity shares of the Company in respect of which dividend hasnot been claimed for 7 consecutive years or more from the date of transfer to unpaiddividend account have also been transferred by the Company to the demat account of IEPFAuthority.
Any shareholder whose shares unclaimed/un-encashed dividend have been transferred tothe IEPFA can claim back the shares or apply for refund from IEPFA as the case may beby making an application to the IEPFA in Form No. IEPF-5 available on www.iepf.gov.in.The Members/Claimants can 3le only one consolidated claim in a financial year as per theIEPF Rules. 3erefore it is in the interest of shareholders to claim the unclaimed amountof dividend with in scheduled time.
The following tables give information relating to total amount lying in the UnpaidDividend Accounts of the company in respect of the last seven years and when suchunclaimed Dividend is due for transfer to the IEPF :
|Sr. ||Financial Year ||Type of Dividend ||Due date of transfer to IEPF ||Amount Outstanding as on 31.03.2019 (Rs. in Lakhs) |
|1 ||2011-12 ||Final Dividend ||19.09.2019 ||14.21 |
|2 ||2012-13 ||Interim Dividend ||15.01.2020 ||9.34 |
|3 ||2012-13 ||Final Dividend ||24.09.2020 ||8.87 |
|4 ||2013-14 ||Interim Dividend ||19.01.2021 ||9.71 |
|5 ||2013-14 ||Final Dividend ||10.10.2021 ||9.04 |
|6 ||2014-15 ||Interim Dividend ||20.01.2022 ||9.68 |
|7 ||2014-15 ||Final Dividend ||24.10.2022 ||9.55 |
|8 ||2015-16 ||Interim Dividend ||15.01.2023 ||9.37 |
|3 ||Total || || ||79.77 |
The Company has in place Risk Management Process for identifying / managing risks. TheCompany's Risk Management Framework helps in identifying risks and opportunities that mayhave a bearing on the organization's objectives assessing them in terms of likelihood andmagnitude of impact and determining a response strategy. The risk management processconsists of risk identification risk assessment risk monitoring & risk mitigation.During the year the Board was informed about measures taken for minimization of risks.The Board provides oversight and reviews the Risk Management framework. In the opinion ofthe Board there has been no identification of elements of risk that may threaten theexistence of the Company.
As on March 31 2019 the Audit Committee of the Company consist of Mr. Bipin MairaChairman Mr. Ravi Vira Gupta Prof. Sudhir Kumar Jain Mr. L Lakshman and Dr. MeenakshiNayar as members of the Audit Commitee.
At present the Audit Committee of the Company consists of Mr. Bipin Maira ChairmanMr. Ravi Vira Gupta and Prof. Sudhir Kumar Jain as members of the Audit Committee. Theterms of reference of the Audit Committee are in line with the requirements of Section 177of the Companies Act 2013 and Regulation 18 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As on March 31 2019 the CSR Committee of the Company consists of Dr. Vinay BharatRam Chairman Mr. Ravi Vira Gupta Mr. Jitendra Tuli and Dr. Meenakshi Nayar as membersof the CSR Committee.
At present the CSR Committee of the Company consists of Dr. Vinay Bharat RamChairman Mr. Ravi Vira Gupta and Mr. Jitendra Tuli as members of the Committee.
3is Committee is responsible for formulating and monitoring the CSR Policy of theCompany. The Company's CSR Policy is available on the Company's website www.dcm.in
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy technology absorption and 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 as amended from time to time a statement showing the names and otherparticulars of the top ten employees and employees drawing remuneration in excess of thelimits set out in the said rules is enclosed as Annexure - II and forms part of thisreport.
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 as amended from timeto time is enclosed as Annexure - IIA and forms part of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186
Particulars of investments made and loans given are provided in the standalonefinancial statements. (Please refer to Note Nos. 5 6 9 14 and 16 of the standalonefinancial statements).
Further pursuant to the approval given by the members the Company in its capacity astitle holder of land at Bara Hindu Rao / Kishanganj Delhi (Project land) in respect ofwhich the 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 31.03.2019 was Rs.354.21 crores (previous year Rs. 334.62 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 arm's lengthbasis.
The prescribed Form AOC-2 is enclosed as Annexure - III and forms part of this Report.Your directors draw attention of members of the Company to Note No. 49 to the standalonefinancial statements which sets out related party disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of Extract of Annual Return in prescribed form MGT-9 isenclosed as Annexure- IV and forms part of this Report and also available on website ofthe Company i.e. www.dcm.in
The Annual Return of the Company has been placed on the website of the company and canbe accessed at www.dcm.in
The Board has appointed Mrs. Pragnya Parimita Pradhan (M.No. A32778 and CP No.12030)Company Secretary in whole time practice Proprietor of M/s. Pragnya Pradhan &Associates Company Secretaries to conduct Secretarial Audit for financial year 2018-19.
The Secretarial Audit Report for the financial year 2018-19 under the Companies Act2013 read with Rules made thereunder and Regulation 24A of the SEBI Listing Regulationsis enclosed herewith as Annexure - V and forms part of this Report.
The Secretarial Compliance Report for the financial year ended 31st March2019 in relation to compliance of all applicable SEBI Regulations and circulars /guidelines issued thereunder pursuant to requirement of Regulation 24A of SEBI ListingRegulations read with SEBI Circular CIR/CFD/CMD1/27/2019 dated February 8 2019 isenclosed herewith as Annexure - V-1 and forms part of this Report. The SecretarialCompliance Report has been voluntarily enclosed as part of Annual Report as gooddisclosure practice.
The Secretarial Audit Report and Secretarial Compliance Report does not contain anyqualifications reservation or adverse remark.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy was approved by the Board of Directors of theCompany. The main objective of the said policy is to ensure that the level and compositionof remuneration is reasonable and sufficient to attract retain and motivate theDirectors KMP and Senior Management employees. The remuneration involves a balancebetween fixed and incentive pay reflecting short and long-term performance objectivesappropriate to the working of the company and its goals. The salient features ofNomination and Remuneration Policy are as stated below:
Appointment Criteria and Qualifications
The Committee shall identify and ascertain the integrity qualification expertise andexperience of the person for appointment as Director KMP or at Senior Management leveland recommend to the Board his/ her appointment.
A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.
Remuneration to Managing Director(s)/Whole Time Director(s)
The Remuneration to Executive Directors will be approved by the Board of Directorsbased on the recommendations of the Committee subject to the approval of shareholders andsuch other authorities as may be applicable. The concerned Executive Director will notparticipate in such discussions of the Board/Committee.
The compliance of the relevant provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as amended to from time totime regarding the limits of remuneration will be ensured.
The remuneration to include basic salary commission/variable component if anyperquisites and allowances contribution to provident superannuation fund and gratuityetc.
In the event the remuneration payable to Managing Director/Whole-Time Director exceedthe limits laid down under Section 197 and 198 read with Schedule V of the Companies Act2013 the same shall be subject to such approvals as may be necessary.
Remuneration to Non Executive and Independent Directors
The Non- Executive and Independent Directors would be paid remuneration by way ofsitting fees for attending meetings of Board or Committee thereof and profit relatedcommission as may be recommended by the Committee and approved by the Board of Directorsand Shareholders of the Company. The amount of such fees and commissions shall be subjectto ceiling/limits as provided under the Companies Act 2013 and rules made thereunder orany other enactment for the time being in force.
Key Managerial Personnel (KMP)/Senior Management Personnel/ other Officers and Sta3
The Remuneration to be paid to KMP's/ Senior Management Personnel/ other officers &sta3 is based on the role and responsibilities in the Company the experiencequalification skills and competencies of the related personnel / employees the markettrends practices and benchmarks. The positioning strategy is to see that the compensationprovides adequate opportunity to attract the required talent and retain the same to beable to meet the requirements of the job and business.
The remuneration is subject to review on the basis of individual and businessperformance and inflation/market trends. The performance of employees is reviewed based oncompetency assessment and key results delivered. The performance assessment morespecifically is used as an input to determine merit/special increments performancebonus rewards incentives (short term and long term) and other recognitions/promotions.The objective is to ensure that the compensation engage the employees to give their bestperformance.
The Nomination and Remuneration Policy is enclosed herewith as Annexure
- VI which form part of this Report and is also available on website of the company atweblink http://dcm.in/wp-content/uploads/2016/10/DCM-Limited-Remuneration-Policy.pdfDuring the year changes were made in the said Nomination and Remuneration Policy to makeit align with the amendments to the Companies Act 2013 and the SEBI Listing Regulations.
During the financial year 2018-19 the Company was required to maintain cost records asspecified by Central Government under section 148(1) of the Companies Act 2013 in respectof Cotton Textiles' at Textile Division of Company at Hissar; and for CastIron Unit' of the Company namely DCM Engineering Products' located at Shaheed BhagatSingh Nagar Punjab. Accordingly such accounts and records are maintained.
After the demerger of Textile division of the Company with effect from appointed dateof April 1 2019 the Company is required to maintain cost records as specified by CentralGovernment under section 148(1) of the Companies Act 2013 only in respect of Cast IronUnit of the Company namely DCM Engineering Products' located at Shaheed Bhagat SinghNagar Punjab. Accordingly such accounts and records are maintained.
Accordingly the Board of Directors in its meeting held on August 12 2019 haveapproved the appointment of M/s. V Kumar & Associates Cost Accountants (FirmRegistration Number 100137) as Cost Auditors for financial year 2019-20 for audit ofCost Accounts pertaining to Cast Iron Unit of the Company namely DCM EngineeringProducts' located at Shaheed Bhagat Singh Nagar Punjab at a remuneration of Rs.125000/- (Rupees one lac and twenty five thousand only) plus GST & out-of-pocketexpenses if any.
In terms of Section 148 of the Companies Act 2013 and rules made thereunderremuneration of Cost Auditor as stated above is to be rati3ed by members of the Company.Accordingly suitable resolution has been included in the Notice of forthcoming 129thAnnual General Meeting for rati3cation of remuneration payable to Cost Auditor forfinancial years 2019-20 by members of the Company.
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015as amended from time to time Corporate Governance Report along with Auditors' certificatethereon and Management Discussion and Analysis Report are enclosed and form part of thisreport.
1. Details of the familiarization programme of the independent directors are availableon the website of the Company at weblink: http://dcm.in/wp-content/uploads/2016/10/Familirisation-Program-for-Independent-Directors.pdf
2. Policy for determining material subsidiaries of the Company is available on thewebsite of the Company at weblink: http://dcm.in/wp-content/uploads/2016/10/DCM-Limited-Policy-for-determining-Material-Subsidiaries.pdf
3. Policy on materiality of related party transactions and dealing with related partytransactions is available on the website of the Company at weblink:http://dcm.in/wp-content/uploads/2016/10/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 Company's website www.dcm.in. The provisions of this policy are inline with the provisions of Section 177(9) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as amended from time to time.
5. Annual Report on CSR Activities is enclosed as Annexure - VII and forms part of thisReport.
6. 3ere were no significant or material orders passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
7. The Company has constituted Internal Complaints Committee(s) under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Duringthe year there were no cases reported under the said Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
8. During the year under review the Company has complied with mandatory applicableSecretarial Standards issued by Institute of Company Secretaries of India (ICSI).
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 deepappreciation of the dedication and commitment of your Company's employees at all levelsand look forward to their continued support in the future as well.
| ||For and on behalf of the Board of Directors |
| ||For DCM Limited |
| ||Sd/- |
|Place : New Delhi ||Dr. Vinay Bharat Ram |
|Date : August 12 2019 ||Chairman and Managing Director |