Chairman’s Statement AT 132nd AGM – 30th SEPTEMBER, 2022
Very good morning
It gives me immense pleasure to extend a warm welcome to all of you at the 132nd AGM of DCM Limited, which happens to be the third consecutive one in the virtual mode.
I thank you for your presence today 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 2021-22.
We are going through an uncertain and challenging environment and COVID-19 pandemic has further added to fiscal imbalances and long -term economic impact globally. The war in Ukraine has dented the world economy and significantly resulted in slowdown of global growth in 2021-22. Fuel, commodity and food prices have increased rapidly. Indian economy is not decoupled from these impacts either.
However, India’s underlying economic fundamentals are strong and despite this turbulence, the impact on the long-term outlook appears to be marginal. The results of growth-enhancing policies and schemes and increased infrastructure spending will lead to a stronger multiplier effect on jobs and income, higher productivity and more efficiency. I have no doubt that India and the world will achieve faster progress, greater prosperity post the Covid and War crisis.
COMPANY’S BUSINESS PERFORMANCE
Let me now take you through the performance of your Company during financial year 2021-22:
Our businesses are broadly classified under three segments- ‘Real Estate, ‘IT-Infrastructure’ and ‘Engineering’.
In view of the positive sentiments in real estate market post-Covid-19, the Company has initiated the process of development of its land parcel admeasuring about 68.35 acres situated near Mela Ground, Hisar, Haryana. In this connection, the Company has entered into a ‘Joint Development Agreement’ with the Developer having significant presence for real estate development in many cities of State of Haryana, for development of its aforesaid land parcel under Deen Dayal Jan Awas Yojna. The said Joint Development Agreement is subject to receipt of certain government/regulatory approval(s) and compliance of certain terms and conditions by the said party. The said processes are being actively pursued.
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. 69 crores (previous year Rs 47 crores) and Profit before Tax (PBT) was Rs. 9 crores as compared to previous year (Rs 4 crores).
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.
The Engineering Division of the Company was manufacturing and supplying castings across all segments in the automotive market: cars, multi-utility vehicles, tractors, light commercial vehicles, heavy commercial vehicles and earth moving equipment.
Since 2016, the unit has faced a hostile environment in which production of good quality products in a cost-effective way could not be achieved primarily due to the unabated labour attitude. As a result, the Division continued to incur cash losses on account of lower volume and high rejections resulting in non-recovery of fixed cost and decline in margin.
Given the above, the Company was forced to declare lockout of the said Engineering Unit with effect from October 22, 2019. The said lockout of factory operations continues as on date. Presently, this matter is sub-judice before the labour authorities.
In order to post sustainable profitability and implement a sound operational model to revive the Engineering Business Undertaking, it is considered necessary to rationalize the workforce and induct strategic partner(s) in the said Business. The Company is in process of taking requisite steps in this direction.
Repayment of Secured Loans from bankers
The Company had received certain recovery notices and petitions from the creditors and the bankers who have provided credit facilities to the Engineering Division of the Company, due to default in their payment on account of lockout of Engineering Operations because of Industrial Unrest. The dues of all these bankers have been fully paid under one time settlement (OTS) as agreed with them.
The majority of dues of operational creditors pertaining to Engineering Division of the Company have also been repaid.
Further, most of the recovery suits, IBC proceedings and other legal proceedings initiated by said bankers and operational creditors have been withdrawn or are in the process of withdrawal.
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 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 132nd Annual General Meeting of DCM Limited held on Friday, the 30thday of September, 2022 through Video Conferencing (VC).