Chairman’s Statement AT 133rd AGM – 28th SEPTEMBER, 2023
Very Good Afternoon
It gives me immense pleasure to extend a warm welcome to all of you at the 133rd AGM of DCM Limited, which happens to be the fourth 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 2022-23.
The global economy faced many challenges during the financial year 2022-23. These were primarily COVID-19 related disruptions, the Russian-Ukraine conflict and its adverse impact along with disruption in supply chain, mainly of food, fuel and fertilizer. The Central Banks across several economies led by the Federal Reserve responding with rate hikes to curb inflation, led to an appreciation of the US Dollar and the widening of the Current Account Deficit (CAD) in net importing economies.
India too like the rest of the world, faced this extraordinary set of challenges but withstood them better than most economies staging a better recovery ahead of many nations. As per the Economic Survey 2022-23, India is expected to witness GDP Growth of 6.0% to 6.8% in the financial year 2023-24, depending on the economic and political developments globally.
There are enough reasons to be optimistic about India’s economic outlook in the year 2023-24. The growth in 2023-24 is expected due to solid domestic demand on account of the large and rising share of the upper middle–income population and the Government’s thrust on infrastructure spending.
COMPANY’S BUSINESS PERFORMANCE
Let me now take you through the performance of your Company during financial year 2022-23:
Our businesses are broadly classified under three segments- ‘Real Estate, ‘IT-Infrastructure’ and ‘Engineering’.
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 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 18-04- 2023 suspended the said Licence till further orders, taking a note that an enquiry has been initiated against the Company by Deputy Commissioner, Hisar in respect of Company’s said Hisar land.
The Company is taking appropriate steps in the matter for revocation of said suspension order. As per the legal advice, the Company has merits in the matter and thus holds the view that the said suspension order is likely to be revoked soon.
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 about Rs. 71 crores as compared to Rs 69.55 crores in previous year and Profit before Tax was Rs. 10 crores as compared to Rs 9 crores in previous year.
Based on market conditions and the growth prospects both in India and the USA, DCM Infotech Limited is consistently investing to build capabilities in new areas in the IT services and related software domain.
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 w.e.f. 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.
However on payment of dues by the Company of all the creditors including the banks, the 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 Board has also decided to formulate a fresh proposal for restructuring of its Engineering Business in consultation with legal and tax consultants
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. With their cooperation, we are confident to turn around the current Business operation(s) of the Company with the ongoing restructuring exercise and will be able to progress on our growth path.
Let me express our deepest gratitude to each one of you, our shareholders. I look forward to your ongoing support.
Speech by Mr. Bipin Maira, Chairman, at the 133rd Annual General Meeting of DCM Limited held on Thursday, the 28th day of September, 2023 through Video Conferencing (VC).