Chairman’s Statement AT 130th AGM – 25th SEPTEMBER, 2020
On behalf of the Board of Directors and on my own behalf, I extend a very warm welcome to each one of you to the 130th Annual General Meeting of your Company. I thank you for your presence today through Video Conferencing (VC) and for your continued support.
I would like to brief you on the economic scenario and your Company’s Business performance during the year 2019-20.
As we meet, we are in the midst of some unprecedented times. The entire world and India is grappling with the Covid-19 pandemic and the huge challenges it has thrown ups. Governments across the globe are at a dilemma – on one hand about how much and how long to impose lockdown conditions to arrest the spread of the pandemic and on the other side, how to quickly restore the business conditions and jumpstart the wheels of the economy.
As I speak, the infection rate continues to rise in several parts of the country, but we are learning to live and work in the changed circumstances. There is hope that a vaccine will be available in the near future. I must salute the spirit of the Government authorities, healthcare workers, police, and the public, in fighting the pandemic.
The GDP growth rate during 2019-20 showed a declining trend in each quarter. Further the impact of COVID 19 has resulted in a substantial decline in economic activity. However, we are confident that with the recent reforms announced by the Central government, we shall be able to overcome these challenges and the growth will be back on track.
The return of daily life and manufacturing activity to near normalcy gives hope for a U-shaped economic recovery.
COMPANY’S BUSINESS PERFORMANCE
Let me now take you through the performance of different businesses of your Company during financial year 2019-20:
During the year, the Division achieved total dispatch of 15,271 MT (previous year 46,615 MT). The Engineering Division continued to make losses because of lower volume due to production constraints and high rejection primarily on account of situation of industrial unrest coupled with automobile recession, decline in margin because of increased input cost and under recovery of the fixed overheads.
In order to restructure the Engineering Business operation with rationalization of workforce and/or induction of strategic investor who will provide technology and investment, the Board of directors of the Company has approved a Composite Scheme of Arrangement which provides (1) Transfer of Engineering Business Undertaking into 100% subsidiary to facilitate the strategic partner(s) (2) Restructuring the outstanding loan, debts and liabilities pertaining to Engineering Business to improve the serviceability of such liabilities and revive the Business Undertaking.
The Company has received No Objection/observation for the said Scheme from stock exchanges enabling the Company to file the Scheme before NCLT for seeking their approval. The Company is taking necessary steps in this regard.
The Textile Business of the Company was demerged with and into DCM Nouvelle Limited on a going concern basis with effect from appointed date of April 1, 2019 as per NCLT order dated May 01, 2019 sanctioning the Scheme of Arrangement for the said demerger.
The Shareholders got 1(one) equity share as fully paid-up of Rs. 10/- each of DCM Nouvelle Limited for every 1 (one) equity share of Rs.10/- each, fully paid-up held in the Company.
To unlock the value of the IT Business undertaking namely DCM Data Systems, it was decided to run the Division as a separate entity focused on IT business and services and also to explore opportunities to attract private equity / strategic partner(s) to achieve desired growth in the said IT business.
Pursuant to the above, the IT Division of the Company was transferred/ vested with DCM Infotech Limited, a Wholly Owned Subsidiary of the Company, w.e.f September 16, 2019.
IT Business of the Company, presently held in 100% subsidiary, is a pure play service provider of managed IT services globally, specializing in Infrastructure services, networking, cloud, and digital technologies.
The management of the company has been focusing to develop and manage its real estate assets, so as to drive long term annuity value for the shareholders. This will help in expediting the monetization of these assets and to bridge the gap between intrinsic value and market capitalization of the Company.
Mr. K S Nagnyal, Nominee Director of Life Insurance Corporation of India (LIC) and Mr. Ravi Vira Gupta, Independent Director(s) of the Company have resigned from the directorship of the Company w.e.f August 17, 2020 and August 27, 2020 respectively subsequent to the date of issue of Directors’ Report.
The Board placed on record its sincere appreciation and thanks for the valuable contributions made by Mr. K S Nagnyal as Nominee Director of LIC and Mr. Ravi Vira Gupta as Independent Director of the Company.
On behalf of your Company’s Board, I want to thank all the stakeholders, business associates, employees, banks/financial institutions and the Central and State Governments who have extended the support to the Company.With their cooperation, we are confident to turnaround 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. Jitendra Tuli, Managing Director, at the 130th Annual General Meeting of DCM Limited held on Friday, the 25thday of September, 2020 through Video Conferencing (VC).