Your Directors have pleasure in presenting the 19th Annual Report
together with the Audited Accounts of the Company for the financial
year ended 31st March, 2002.
1. FINANCIAL RESULTS
Rs. in Lacs
Particulars 2001-02 2000-01
Sale of Products and other Income 29,572 117,745
EBIDT (Earnings before Interest Depreciation &
Tax) (10,125) 13,353
Interest 13,221 13,004
Provision for Depreciation 9,173 19,998
Previous year adjustment - (7)
(loss) after tax for the year (32,519) (19,642)
Balance brought forward from the
previous years (39,053) (19,411)
Balance carried forward (71,572) (39,053)
The year under review was very difficult year for the Company. During
the year Company produced 7668 cars and sold 8231 cars with the total
turnover of Rs. 29,572 Lacs. Loss for the year was Rs. 32,519 Lacs The
Company is presently observing non-production schedule.
General Motors Company, USA, while finalising the takeover Agreement
with Daewoo, Korea, has not included the Company in its buying list,
though it has agreed to reserve the right of first refusal. To ensure
the continuous flow of the Spare Parts and Services, your company has
entered into an agreement, with newly formed GM Daewoo Auto &
Technology Co. Korea on 02/10/02, which is yet to be approved by the
After the recall of the loan in April 2002, Financial Institutions have
filed recovery suits against the Company. DRT, Mumbai, has appointed
the Receiver on the assets of the Company. Further, pursuant to the
order dated 8/8/2002 of Honble DRAT, Mumbai, in the case of ICICI Ltd.
v/s DMIL & others, DRT Receiver has initiated the process of sale of
assets of the Company and a public notice initiating the bids has been
published in newspapers 22/11/02.
Director General of Foreign Trade (DGFT) has also revoked on 22/05/02
the extension of period granted to the Company for fulfillment of the
Export obligation Special leave petition of the Company is pending
before the Honble Supreme Court of India and Honble Supreme Court has
granted an ad-interim order in favour of the Company directing not to
encash Bank Guarantees in respect of the license of more than Rs. 100
In view of minimum operational level, critical situation of the Company
and also in view of sale of the companys assets under the direction of
DRT-Mumbai, there appear to be no alternative for the company but to
resort to the closure of the plant and reduction of manpower.
Mr. M. Sudhendranath, Mr. Anand Gore and Mr. Rajeev Arora have been
nominated by ICICI Bank Ltd. w. e. f. 25.04.02, Mr. O. P. Singal, Mr.
S. K. Gautam, Mr. K. L. Garg, Mr. K. P. S. Dagur have been nominated by
IDBI w. e. f. 06.05.02 and Mrs. H. S. Advani and Mr. N. E. Ookabhoy
have been nominated by Exim Bank Ltd. w. e. f. 07.05.02 as Directors
on the Board of the Company.
Mr. Y. T. Cho resigned as Managing Director & CEO w. e. f. 30.06.2002
and from the directorship w. e. f 18.09.02, Wg. Cdr (Retd) H. D.
Talwani, Director resigned from 01.01.02 and Mr. Vivek Khanna,
Director, resigned w. e. f. 28.09.02 from directorship of the Company.
The Board has placed on record its deep appreciation for the valuable
contribution made by them. Mr. D. W. Kim has been appointed as
Managing Director & CEO w. e. f 1.10.2002 and Mr. Y. J. Kim, Mr. M. H.
Jung and Mr. K. Y. Song were appointed as additional directors w. e. f
25.04.02 and being eligible, offer themselves, for reappointment.
4. LISTING REQUIREMENT
The Companys shares are listed at New Delhi, Mumbai, Chennai and
Calcutta Stock Exchanges. The Company has paid the listing fees to the
Sock Exchanges. As per Clause 32 of the Listing Agreement, Cash Flow
Statement is appended with the annual accounts of the Company.
5. FIXED DEPOSITS
The Company has neither invited nor accepted any fixed deposit during
the year within the meaning of Section 58A of the Companies Act, 1956
and the rules made thereunder. There were no deposits for which
payments were claimed but not paid. In compliance of Section 205C of
the Companies Act, 1956, the Company has deposited Rs. 7.28 lacs
unclaimed maturity amount lying with the Company for more than 7 years,
with the Investor Education and Protection Fund.
6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
A statement giving details of conservation of energy, technology
absorption and foreign exchange earnings and outgo is given at Annexure
`A to the Report.
7. INDUSTRIAL RELATIONS
During the year, industrial relations of the Company continued to be
cordial. With a view to reduce the cost, the Company has also entered
into an agreement with Workers Union for the purpose of informal lay
off during non-production days. The Agreement would be valid uptill
January 2003. As per said Agreement, workers will sacrifice 39% of
their remuneration for the non working days and will be paid the full
remuneration for the working days
The particulars of employees as per Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975, are forming part of the Directors Report for the year ended 31st
March, 2002, and annexed as Annexure `B of the report.
8. DIRECTORS RESPONSIBILITY
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
the Directors confirm that:
1) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanations relating to
2) Accounting policies have consistently been applied and disclosed
alongwith the material departures and adjustments and estimation have
been made with rational and prudence, so as to give a true and fair
view of the state of affairs of the Company at the end of the financial
year and of the loss of the Company for the year under review which is
subject to contingency as explained in the addendum to the Directors
Report attached as annexure - C with this report.
3) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities. However, worn
out & depleted LCV - Machinery & Equipment which was lying for many
years, was partialy disposed off by the Company under the Management
Sanction. As the same was not taken up with Fl(s) and the Board of
Directors, it is placed before this AGM for Shareholders approvals.
4) The Directors have arranged preparation of the accounts for the
financial year 31st March, 2002, on the going concern basis.
9. AUDITORS & THEIR REPORT
Your Board of Directors recommend the re-appointment of M/s V. Malik &
Associates, Chartered Accountants, who have expressed their willingness
and eligibility, as Statutory Auditors at the ensuing Annual General
M/s. K. L. Jaisingh & Co., Cost Accountants, have been appointed as
Cost Auditors of the Company for the year 2002-03.
The Auditors observations are suitably replied and explained in the
addendum to the Directors Report, annexed as Annexure `C.
10. CORPORATE GOVERNANCE
Report on status of the compliance with the Corporate Governance under
the Listing Agreement with the Stock Exchanges is enclosed as Annexure
During this crucial time, your Directors wish to place on record their
sincere appreciation for the support and co-operation received from the
Central Government, State Government of U. P., District Administration,
Customers, Shareholders, Bankers, Financial Institutions and Vendors of
The Directors also thank the employees at all levels for their
co-operation, dedication and sincere efforts.
ANNEXURE TO THE DIRECTORS REPORT
Information in accordance with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, and forming part of
the Directors Report for the year ended March 31st, 2002.
A. ENERGY CONSERVATION
Energy Saving Activities were taken up on continuous basis all through
the year. Following activities were completed during this period.
a) Power supply source changed from Power Plant Diesel Generator to Car
Plant Diesel Generator set resulting in an expected cost saving of
approx. Rs. 30 to Rs. 35 lacs p. m.
b) Twin lights of all offices and other areas reduced to single light.
c) One out of four street lights have been activated, only emergency
lights made operational during non production hours.
d) Operation of airconditioner have been monitored and controlled to
reduce energy cost.
e) Close Energy Audit has been conducted to curb any excess energy unit
B. TECHNOLOGY ABSORPTION RESEARCH & DEVELOPMENT
1. SPECIFIC AREAS IN WHICH R&D ACTIVITY WAS CARRIED OUT
* Development of Matiz-LPG variant with the Italian kit to provide
alternate fuel option to customer. Testing of car on Indian roads and
at ARAI, Pune have been completed. Final CMVR certificate is awaited.
* Development of Matiz CNG has been undertaken during the period.
* Continuous value engineering and increased localization to improve
a) Awards and recognitions
* DMIL R&D is re-recognized by Department of Science & Technology under
Ministry of Industry for its in-house R&D activities.
* Rectification of the quality systems laid by DMIL for continuously
meeting customer and product requirements by external agency TUV
Suddeutschland is under process.
b) Activities to ensure meeting vehicle regulations released by
Ministry of Surface Transport, for example
* Development of rear seat belt is under testing with ARAI Pune.
* Development of new warning triangle and spare headlamp bulbs.
* Development of auto dipper, however this regulation was dropped by
Ministry of Surface Transport.
c) Development of gasoline tank of five liters capacity for Cielo -
2. TECHNOLOGY TRANSFER, ABSORPTION, ADAPTION AND INNOVATION
a) Development of Matiz-l I with more appealing changes in the Body
enhanced braking and improvement in the emission performance.
b) Regular updation of Matiz design with the support of Daewoo Motor
3. BENEFITS DERIVED AS A RESULT OF ABOVE R&D ACTIVITIES
Above R&D activities have helped us in fulfilling environmental,
technological advancement and product economies responsibilities by:
a) Increased product competitiveness in the market.
b) Introduction in near future of Matiz with alternate fuels.
c) Timely meeting of the government regulation applicable from time to
4. FUTURE PLAN OF ACTION
Close coordination with supplier for development and implementation of
high security futuristic registration plate.
EXPENDITURE INCURRED ON R & D
- Capital: Nil
- Revenue: Rs. 27,032,398
- R&D expenditure as percentage to turnover: 0.916%
TECHNOLOGY TRANSFER, ABSORPTION, ADAPTATION & INNOVATION
* Technical data, drawings and documentation received from Daewoo
Motors Co. Ltd., have been provided to vendors and production for
transfer and adaptation, on going basis.
* Modification of the technology to suit the domestic and exports
market is a continuous process.
* Indigenisation of various components to reduce of all segments.
* Modification in the Companys product to suit the need of the
domestic and export market, with minimum cost escalation.
* Faciliating development of components/system for meeting regulatory
FOREIGN EXCHANGE EARNINGS AND OUT GO:
1. Activities relating to exports, initiatives to increase exports,
development of new export markets for products, services and export
Special emphasis has been given to export. Continuous efforts for
exploration and development of new markets are on.
2. Total foreign exchange used and earned:
Rs. in Lacs
a. Earnings in foreign Currencies 540.32
b. Expenditures in foreign Currencies
i) import of goods 3429.32
ii) Interest, Travelling & Ors. 202.68
For and on behalf of the Board
New Delhi M. H. JUNG D. W. KIM
25.11.02 Director MD & CEO