Chairman’s Statement at 134th AGM – 30th September, 2024
Dear Shareholders,
It gives me immense pleasure to extend a warm welcome to all of you at the 134th AGM of DCM Limited, which happens to be the fifth consecutive one in the virtual mode.
I thank you for your presence through Video Conferencing and for your continued support.
I would like to brief you on the economic scenario and your Company’s Business performance during the year 2023-24.
ECONOMIC SCENARIO
Over the course of the last decade, India has showcased a robust and resilient growth story. In the face of unprecedented challenges such as the Covid pandemic and geopolitical conflicts, the Indian economy has demonstrated a remarkable ability to bounce back and convert challenges into opportunities while striving to achieve strong, sustainable, balanced and inclusive growth
The Indian economy is better placed than ever to take on challenges because of the policies adopted and implemented in the last decade. The Union government has built infrastructure at a historically unprecedented rate. The total length of highways, freight corridors, number of airports, metro rail networks or the trans- sea link, the ramp-up of physical and digital infrastructure in the last ten years is real, tangible and transformative.
In the last 10 years, India has moved from being the 10th largest to the 5th largest economy of the world. It is now seen as a country with immense potential which is backed by impressive performance.
By all estimates, India’s growth is expected to remain strong, supported by macroeconomic and financial stability. Reforms undertaken over the last ten years by the Union government have formed the foundation of a resilient, partnership-based governance ecosystem and have restored the ability of the economy to grow Stronger. India is poised for sustained, brisk growth in the coming years.
COMPANY’S BUSINESS PERFORMANCE
Let me now take you through the performance of your Company during financial year 2023-24:
Our businesses are broadly classified under three segments- ‘Real Estate, ‘IT-Infrastructure’ and ‘Engineering’.
Real Estate
The Company has initiated the process of development of its land parcel admeasuring about 68.35 acres situated near Mela Ground, Hisar, Haryana under a joint development agreement with a party. The Director Town and Country Planning, Haryana, granted license for setting up of affordable residential plotted colony in an area of 67.275 acres under Deen Dayal Jan Awas Yojana-2016 on the Company’s said Hisar land.
The Haryana Real Estate Authority, Panchkula has also registered the Company’s said Hisar land project.
However, the Director Town and Country Planning, Haryana vide its order dated 18th April, 2023 suspended the said Licence till further orders, taking note that an enquiry has been initiated against the Company by Deputy Commissioner, Hisar in respect of Company’s said Hisar land.
The Company along with the Developer is making earnest efforts to take up the matter of revocation of said suspension order with the concerned authorities. However, the said matter remains pending as on date. The Company as well as the Developer are hopeful that the requested revocation of the suspension order of licence will be acceded to by the authorities and that the development work on the land shall start soon thereafter.
IT Infrastructure
The Company is engaged in the business of providing IT Infrastructure services specializing in networking, analytics, cloud and digital technologies through its wholly owned subsidiary namely, DCM Infotech Limited.
During the year under review, the sales and other income of DCM Infotech Limited was Rs. 68.89 crores (previous year Rs 71.03 crores) and Profit before Tax (PBT) was Rs. 9.56 crores as compared to previous year (Rs 10.66 crores).
Over the last 12 months DCM Infotech Limited has been working aggressively on picking up additional managed services business from its existing customers. This has created a large backlog of revenue that will accrue to it in the coming 3-4 years.
The entry barriers in IT, in India are very low and therefore there are competitors who are willing to pick up orders at low values. So, while this does put pricing pressure on DCM Infotech Limited, it also makes it more aggressive in building its own capabilities to deliver at the pricing which the market will absorb.
DCM Infotech Limited believes the automation market has “many more legs to grow”, both in the US and India and it is expanding both its solution offerings and partnerships to move forward in the coming years. DCM Infotech Limited believes that there are immense opportunities to grow its services offerings and also related product sales, both in the US and in India and is therefore investing in the sales and marketing activities continuously.
Engineering
Since 2016, The Engineering Division of the Company has faced a challenging environment in which production of good quality products in a cost-effective way could not be achieved due to the continued situation of labour unrest. As a result, the Company was forced to declare lockout of the said Engineering Unit with effect from 22nd October, 2019, which continues as on date.
The Scheme of Arrangement approved by the Board in its meeting held on 28th November, 2019, to revive and post sustainable profitability in the said Engineering business and restructuring of outstanding loan and liabilities pertaining to the said business, could not be filed with Hon’ble National Company Law Tribunal for seeking their approval, awaiting in principle approval of banks due to default in payment of their dues.
Due to payment of dues of all the creditors including the banks by the Company, section II of the said Scheme relating to restructuring of outstanding loans and liabilities, has become infructuous.
Therefore, the said Scheme was withdrawn by the Board of Directors of the Company in their meeting held on 29th May, 2023.
The Company is evaluating and pursuing various options concerning its Engineering business/ operations. As and when anything is finalized, it shall seek requisite approvals from the Board and other stakeholders. In the interim, the Company is continuing with its endeavors to upkeep the factory and rationalize the workmen force.
ACKNOWLEDGEMENT
On behalf of your Company’s Board, I want to thank all the stakeholders, business associates, employees, banks and the Central and State Governments, who have extended their support to the Company. We are confident that with the ongoing restructuring exercise and your co-operation, the Company will be able to turnaround the current business operations and will progress on its growth path.
Thank you.
Speech by Mr. Jitendra Tuli, Chairman, at the 134th Annual General Meeting of DCM Limited held on Monday, the 30th day of September, 2024 through Video Conferencing (VC).