Duncan Engineering Ltd.
|BSE: 504908||Sector: Auto|
|NSE: N.A.||ISIN Code: INE340F01011|
|BSE 00:00 | 22 May||98.70||
|NSE 05:30 | 01 Jan||Duncan Engineering Ltd|
Duncan Engineering Ltd. (DUNCANENGG) - Director Report
Company director report
Duncan Engineering Limited
Your Directors have pleasure in presenting the Fifty Eighth Annual Report of theCompany on the business and operations of the Company together with the Audited FinancialStatements for the year ended March 312019.
The Company's performance during the financial year ended March 312019 as compared tothe previous financial year is summarized below:
The Board of Directors have not recommended to declare any dividend in order toconserve the fund for the growth of the Company.
Transfer to Reserves
Your Board of Directors propose to transfer Rs. 270.50 Lacs to General Reserve.
The overall performance of the Company is satisfactory in the year 2018-19. Majorrestructuring initiatives undertaken by the Board of Directors in last 2-3 years yieldedpositive results improving overall performance of the Company. Your company has registereda total revenue of Rs. 4512.24 Lacs with a profit/ (loss)for the year Rs. 270.50 Lacs.TheCompany has registered a growth of 10% (Rs. 415 Lacs) in comparison to the total revenueof FY 2017-18.
The focus during the year was on streamlining the working capital of the Company whichhas yielded positive results.
The demand in the market continues to be stable and the Company is hopeful of encasingthe growth opportunities available in the coming years.
Your Company has registered a growth of 10% (Rs. 415 Lacs) in comparison to the totalrevenue from 2017-18.This was achieved in spite of initiative to correct the workingcapital cycle and cost reduction initiatives.
Report on performance and financial position of subsidiaries associates and jointventure companies
During the year under review your Company did not have any subsidiary associate andjoint venture.
Internal Financial Controls
The Company has an internal control system commensurate with the size scale andcomplexity of its operations. The Scope and authority of the Internal Audit (IA) is as perthe works assigned to them by the management. To maintain its objectivity andindependence Internal Audit function reports to the chairman of the Audit Committee ofthe Board. M/s Pipalia Singhal & Associates are the Internal Auditor of the Company.
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Statutory Auditors and the InternalAuditors of the Company on the inefficiency or inadequacy of such controls.
The Company has not accepted any fixed deposits from the public or shareholders fallingwithin the ambit of Section 73 of the Companies Act 2013 and The Companies (Acceptance ofDeposits) Rules 2014.
Particulars of loans/advances/investments outstanding during the financial year
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.
The details of the Investments made and loan taken by company is mentioned in the Notesto the financial statements.
AUDITORS ANDTHEIR REPORTS
The matters related auditors and their reports are as under:
Statutory Auditor's appointment
At the Annual General Meeting held on August 3rd 2017 the Members haveapproved the appointment of M/s Singhi & Co. Chartered Accountants Mumbai as aStatutory Auditor of the Company for a period of three consecutive years i.e. for a termup to the conclusion of 59th Annual General Meeting to be held in the calendar year 2020.
The Company has received a certificate from the said Auditors that they are eligible tohold office as the Auditors of the Company and are not disqualified for being soappointed.
Observations of Statutory Auditors on Financial Statements for the year ended March312019
The observation made in the Auditors Report read together with the relevant notesthereon are self-explanatory and hence does not call for any comments.
As required under the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s ShaswatiVaishnav & Associates Company Secretary in Practice has undertaken the SecretarialAudit of the Company for the year ended 31st March 2019. The Secretarial AuditReport is annexed herewith in Form No. MR-3. There are no qualifications reservation oradverse remarks or disclaimer made by the auditor in the report save and except disclaimermade by them in discharge for their professional obligation.
MATTERS RELATEDTO DIRECTORS AND KEY MANAERGIAL PERSONNEL
Board of Directors and Key Managerial Personnel (KMP)
The following three persons were formally appointed as Key Managerial Personnel of theCompany as per the provisions of Sec 203 of the Companies Act 2013.
a) Mr. Akshat Goenka Managing Director
b) Mr. K Raghu Raman Chief Financial Officer
c) Mr. Rajib Kumar Gope Company Secretary
In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company Mr J P Goenka (holding DIN00136782) is liable to retire by rotation and being eligible for re-appointment offerhimself for re-appointment. Your Directors have proposed his re-appointment as set out inthe notice of AGM.
Based on the recommendation of the Nomination and Remuneration Committee and pursuantto the provisions of Sections 149 150 152178 and any other applicable provisions of theCompanies Act 2013 and the rules made thereunder (including any statutory modification(s)or re-enactment thereof for the time being in force) read with Schedule IV to theCompanies Act 2013 the Companies (Appointment and Qualification of Directors) Rules2014 and Regulation 17(1A) and other applicable provisions of SEBI (Listing Obligationsand Disclosure Requirements) (Amendment) Regulations 2018 your Directors Mr. Brij BehariTandonaged about 78 years Mr. Om Prakash Dubey aged about 78 years and Mr. Nitin Kaulaged about 46 years seeking reappointment as Independent Directors for a 2ndterm of five consecutive years up to the conclusion of 63rdAnnual GeneralMeeting of the Company to be held in the calendar year 2024.The details of theirre-appointment is mentioned in Explanatory Statement annexed to the Notice of the AnnualGeneral Meeting.
Pursuant to Regulation 17 (1A) of the SEBI Listing Obligation & DisclosureRequirements) (Amendment) Regulations 2018 notified on 9th May 2018 no Listed entityshall appoint a person or continue the directorship of any person as a non-executivedirector who has attained the age of seventy-five years unless a special resolution ispassed to that effect passed by the Members of the Company.
The information required pursuant to Section 134(3)(q) and 197 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theRemuneration and other details of Key Managerial Personnel and other Employees for theyear ended March 2019 are given in extract of the Annual Return.
Managing Director's Remuneration:
Mr. Akshat Goenka is the Managing Director of the Company. The remuneration detail ofMr. Akshat Goenka is disclosed in Corporate Governance Report. Mr. Akshat Goenka is alsoJt. Managing Director in Oriental Carbon Chemicals Limited Holding Company. He received aSalary of Rs.12000 and Commission Rs.19.75 Lacs from Duncan Engineering Limited. Inaddition to the remuneration from Duncan Engineering Limited he also received aremuneration of Rs. 24641974/- p.a. from Oriental Carbon & Chemicals Limited.
The details Remuneration drawn by Mr. Akshat Goenka from Oriental Carbon &Chemicals Limited as follows:
Commission to Non-Executive Directors
The Board of Directors of the Company have recommended (on the recommendation of theNomination and Remuneration Committee) for the approval of the members of the Company topay a sum not exceeding one percent per annum of the Net Profits of the Company ascommission calculated in accordance with the provisions of Section 198 of the CompaniesAct 2013 be paid to and distributed amongst the Directors other than the ManagingDirector of the Company in such amounts or proportions and in such manner and in allrespects as may be decided and directed by the Board of Directors.
The details of the of the above is mentioned in AGM Notice and Explanatory Statementthereto.
Declaration by Independent Directors
Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act2013 the Company has received individual declarations from all the Independent Directorsconfirming that they fulfill the criteria of independence as specified in Section 149(6)of the Companies Act 2013.
Annual Performance Evaluation
As per Section 134(3)(p) of the Companies Act 2013 read with sub-rule (4) of Rule 8 ofthe Companies (Accounts) Rules 2014 and SEBI(LODR) Regulation 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of the other Committees. The performance of theBoard was evaluated by the Board of Directors after seeking inputs from all the Directors.The performance of the Committees was
evaluated by the Board after seeking inputs from the Committee members. The Boardfocused on criteria like strategy effectiveness Board Structure and Committees BoardMeetings and Procedures while evaluating its own performance and that its committees. ThePolicy on Performance Evaluation is also available on the website of the Company i.e.www.duncanengg.com
For the purpose of evaluation the Directors have been classified into threecategories: Independent Directors Non-Executive Directors and Executive Directors.Independent & Non- Executive Directors were evaluated on the basis of EngagementAdherence to Code of Conduct Strategic Planning Team Spirit Consensus Buildingleadership and domain knowledge. Whereas Executive Director is evaluated on Managementqualities Team work abilities Result/Achievements Domain Knowledge Understanding &Awareness etc.
DISCLOSURE RELATEDTO BOARD COMMITTES AND POLICIES
Board and Committee Meetings
The Company holds Meetings as per Companies Act 2013 and the Listing Agreement signedwith the Stock Exchange. During the year four Board Meetings and four Audit Committeemeetings were convened and held. The details of which are given in the CorporateGovernance Report. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013 and SEBI (Listing Obligations DisclosureRequirements) Amendment Regulations 2018. Additionally on January 24 2019 theIndependent Directors held a separate meeting in compliance with the requirements ofSchedule IV of the Companies Act 2013.
There were four Board Meetings held in FY 2018-19 on May 25 2018; August 2 2018;October 25 2018 and January 24 2019.
Director's Responsibility Statement
To the best of your Director's knowledge and belief and according to the informationand explanations obtained your Directors make the following statements in terms of section134 (3) (c) of the Companies Act 2013:
i) that in the preparation of the annual financial statements for the year ended March312019 the applicable Accounting Standard (Ind AS) have been followed along with properexplanation relating to material departures if any;
ii) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and theprofit and loss of the Company for that period.
iii) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing the detecting fraud and otherirregularities;
iv) that the annual financial statements have been prepared on a going concern basis;
v) that proper financial controls were in place and that the financial controls wereadequate and were operating effectively.
vi) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
The Audit Committee comprises four Non-Executive and Independent Directors namely Mr.O P Dubey (Chairman) Mr. B B. Tandon (Member) Mr. Nitin Kaul (Member) and Mrs. Arti Kant(Member). All the recommendations made by the Audit Committee during the year wereaccepted by the Board. Chief Financial Officer and Auditors are permanent invitees to thecommittee meetings. The detail of terms of reference of Audit Committee number and datesof meetings held attendance of the directors and remunerations paid to them are givenseparately in the Corporate Governance Report.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee has Mr. O P Dubey as Chairman Mr. B BTandon Mr. Arvind Goenka and Mr. Nitin Kaul as Members. The Company has a policy onDirectors appointment & remuneration which is posted on the website of the Company.The details terms of reference of the committee has been given in the Corporate GovernanceReport.
The Stakeholder's Relationship Committee:
The Company has a Stakeholder's Relationship Committee for reviewingshareholder/investors complaints. The present members of this committee are Mr. J P Goenka(Chairman) Mr. O P Dubey (Member) and Mrs. Arti Kant (Member). The detail terms ofreference of the committee has been given in the Corporate Governance Report.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy to ensure that Company's Directors Key Managerial Personnel and othersenior management employees are sufficiently incentivised for enhancedperformance.Remuneration should be reasonable and sufficient to attract and retainemployees. Independent Directors receive remuneration by way of sitting fees for attendingmeetings of Board and Board Committees (where they are members). The Remuneration Policyof the Company is also available on the website of the Company which iswww.duncanengg.com.
Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism named Whistle Blower Policy to deal with instances offraud and mismanagement if any. A vigil (Whistle Blower) mechanism provides a channel tothe employees and Directors to report to the Management concerns about unethicalbehaviour actual or suspected fraud or violation of the Codes of Conduct or Policy. Themechanism provides for adequate safeguards against victimization of employees andDirectors to avail of the mechanism and also provide for direct access to the ManagingDirector / Chairman of the Audit Committee in exceptional cases. The details of theWhistle Blower Policy are explained in the Corporate Governance Report as well and alsoposted on the Company's website i.e. www.duncanengg.com.
Risk Management Policy
The Board of Directors of the Company look into the element of risk associated with theCompany. At present the company has not identified any element of risk which may threatenthe existence of the Company.
Corporate Social Responsibility (CSR)
CSR provisions are not applicable to the Company as it falls outside the criteriarecommended under Companies Act 2013 and the Rules made there under.
During the year under review no instances of fraud were reported by the StatutoryAuditors of the Company.
Sexual Harassment at workplace
The Company has in place an Anti-Sexual Harassment Policy line with the requirements ofThe Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. An internal committee has been set up to redress complaints received regardingsexual harassment. No complaint received during the year under review.
Extract of the Annual Return
Pursuant to Section 134(3)(a)and Section 92(3) of the Companies Act 2013 read withCompanies( Amendment) Act 2017 an extract of Annual Return (eForm MGT-9)is available onthe website of the company www.duncanengg.com underinvestor dropdown.
As per Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a section on Corporate Governance and Management Discussion andAnalysis is annexed to this report.
A certificate from M/s Vaishnav Associates Pune (ACS 8675 C.P. No. 11392) confirmingcompliance of Corporate Governance is also annexed.
Conservation of EnergyTechnology Absorption Exports and Foreign Exchange Earnings andOutgo
A statement giving details of conservation of energy technology absorption exportsand foreign exchange earnings and outgo pursuant to Section 134(3) (m) read with Companies(Accounts) Rules 2014 is annexed to Board's Report.
Particulars of Employees and Remuneration
The information as required under the provisions of Section 197(12) of the CompaniesAct 2013 and Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out in Annexure attached herewith and which forms part ofthis report.
Transfer of shares to Investor Education & Protection Fund
Pursuant to second proviso to Rule 6 of Investor Education & Protection FundAuthority (Accounting Audit Transfer & Refund) Rules 2016 read with GeneralCircular No. 12/ 2017 dated 11.06.2017- IEPF wherein the seven years' period provided insub section (5) of Section 124 is completed for unpaid / unclaimed dividends duringSeptember16 2016 to October 312017 the due date of transfer of dividend is October312017. As per the provision unpaid/ unclaimed dividend for 2009-10 fall within aboverange of date hence the shares were transferred to IEPF. Consequently your Company hasduly followed the procedure of transferring the shares pertaining to unclaimed dividendfor the year 2009-2010 and transferred 13276 shares to IEPF through Corporate action.
Reorganisation of Distinctive Numbers
SEBI vide its circular mandated all listed companies to upload the distinctive numberdata of the listed shares in the depository systems along with the mode (physical/demat)of holding. Accordingly the Board of Directors of the Company approved reorganisation ofdistinctive numbers and issue of new certificates along with rearranged distinctive numberin place of the old certificates to the shareholders holding the shares in physical form.
All related party transactions that were entered into during the financial year were onarms' length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of Company at large. All Related Party transactions form part to the Notes tothe Balance Sheet. All Related Party transactions are placed before the Audit Committee.Prior omnibus approval of the Audit Committee is obtained for the transactions which areof foreseen and repetitive nature. The approved Policy on Related Party transactions isalso available on the website of the company www.duncanengg.com under investor dropdown.
The Accounts for the year have been prepared as per Indian Accounting Standards (IndAS) and all the current year and previous year figures have been re-stated accordingly. Notreatment different from that prescribed in Accounting Standards (Ind AS) has beenfollowed by the Company.
Research and Development
Research & Development is fundamental to the Company's efforts to maintain thetechnical and quality edge. New products are continuously being developed to meetcustomers varied requirements. Research in the areas of reducing utilities cost andprocess parameters improvement is also being done.
Disclosures under Section 134(3)(l) of the Companies Act 2013
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
Disclosure of Orders passed by Regulators or Courts orTribunal
No significant and material orders have been passed by any Regulator or Court orTribunal which can have impact on the going concern status and the Company's operations infuture.
Disclosure relating to equity shares with differential rights
The Company has not issued any equity shares with differential rights during the yearunder review and hence no information as per provisions of Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
Disclosure relating to sweat equity shares
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Rule 8(13) of the Companies (Share Capital andDebenture) Rules 2014 is furnished.
Disclosure relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme
The Company does not have any Employee Stock Option Scheme or Employee Stock PurchaseScheme. Hence no information as per the provisions of Rule 12(9) of the Companies (ShareCapital and Debenture) Rules 2014 has been furnished.
Disclosures in respect of voting rights not directly exercised by employees
There are no shares held by trustees for the benefit of employees and hence nodisclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules 2014has been furnished.
Your Company's Plant has the requisite consent to operate from Maharashtra PollutionControl Board and meets all the desired and statutory norms in this regard.
Statutory Compliance Strictures and Penalties:
The Company has complied with rules and regulations prescribed by the Bombay StockExchange Securities Exchange Board of India and any other statutory authority relating tocapital market.
No penalties and/or strictures have been imposed on the Company by Stock Exchange orSEBI or any statutory authority during the last three years.
Your Directors would like to thank to the employees customers suppliers bankersbusiness partners other regulatory agencies and wish to acknowledge and place on recordtheir sincere appreciation for the excellent support given by them to the Company andtheir confidence in its Management.Your Directors would also like to thank the members ofthe Company for reposing their confidence and faith in the Company and its Management.