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Duncan Engineering Ltd.

BSE: 504908 Sector: Auto
NSE: N.A. ISIN Code: INE340F01011
BSE 00:00 | 12 May 170.05 -10.10
(-5.61%)
OPEN

190.00

HIGH

196.00

LOW

166.15

NSE 05:30 | 01 Jan Duncan Engineering Ltd
OPEN 190.00
PREVIOUS CLOSE 180.15
VOLUME 16984
52-Week high 196.00
52-Week low 77.00
P/E 7.88
Mkt Cap.(Rs cr) 63
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 190.00
CLOSE 180.15
VOLUME 16984
52-Week high 196.00
52-Week low 77.00
P/E 7.88
Mkt Cap.(Rs cr) 63
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Duncan Engineering Ltd. (DUNCANENGG) - Director Report

Company director report

To

The Members

Duncan Engineering Limited

Your Directors have pleasure in presenting the Fifty Ninth Annual Report of the Companyon the business and operations of the Company together with the Audited FinancialStatements for the year ended March 312020.

Financial Results

The Company's performance during the financial year ended March 31 2020 as compared tothe previous financial year is summarized below:

(Rupees in Lacs)

Particulars 2019-20 2018-19
Total Revenue 4438.98 4512.24
Total Expenses -4116.94 -4209.57
Pr of it/(Loss) before Tax 322.04 302.67
Pr of it/(Loss) from continuing operations before Tax 322.04 302.67
Tax Expenses (Current Tax) - 32.17
Tax Expenses (earlier year) 4.01 -
Pr of it/(Loss) from continuing operations after Tax 318.03 270.50
Pr of it/(Loss) from discontinuing operations before Tax - -
Tax Expenses (Current Tax) - -
Pr of it/(Loss) from discontinuing operations after Tax - -
Pr of it/(loss) for the year 318.03 270.50

Dividend

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.318.03 Lacs to General Reserve.

Performance

The overall performance of your Company during the year under review is satisfactoryconsidering most of the industries to which we supply went through a lean phase due to theeconomic slow down. The Sales forthe year have not improved much compared to FY 2018-19.The main reason behind the same is poor performance of the of f the Road (OTR) segment.The slowdown in the automobile sector hit hard to OTR. The OTR Sales were down by 58% ofthe projected Sales forthe year. In the year 2019-20 your company has registered a totalrevenue of Rs. 4438.98 Lacs with a pr of it of Rs.318.03 Lacs. A major debt recovery hasadded Rs. 1 Crore to Net Pr of it.

The impact of COVID-19 will be felt in the first quarter of 2020-21 as the plant wasclosed for 44 days due to nationwide lockdown declared by the Government. The demand inthe market during the year remained stagnant and hope to improve in the upcoming quarters.

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 under investor dropdown.

Internal Financial Controls

Your Company has an internal control system commensurate with the size scale andcomplexity of its operations. Internal Audit is conducted throughout the organization byqualified outside Internal Auditors. Findings of the internal Audit Report are reviewed bythe top Management and by the Audit Committee of the Board and proper follow up actionsare ensured wherever required. M/s Pipalia Singhal &Associates are the InternalAuditor 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.

Public Deposits

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 I nvestments made and loantaken by company is mentioned in the Notes to the financial statements.

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.

AUDITORS AND THEIR REPORTS

The matters related auditors and their reports are as under:

Statutory Auditor's appointment

Messrs Singhi & Co. Chartered Accountants were appointed as Auditors of theCompany for tenure of three years i.e. from the conclusion of 57th AnnualGeneral Meeting till the conclusion of the 59th Annual General Meeting of theCompany.

Pursuantto Sec 139 of Companies Act 2013 Messrs Singhi & Co are not eligible forreappointment as Statutory Auditors of the Company.

M/s SS Kothari Mehta & Co has given its consent to be appointed as StatutoryAuditor of the Company with effect from Financial Year 2020-21. The Board of Directors hasevaluated the same and found them suitable and recommend that they may be appointed asStatutory Auditors of the Company for five years as perterms of the Companies Act 2013.

However this appointment is subject to approval by members at the 59thAnnual General Meeting to be held on 29th July 2020. The Auditors haveconfirmed their eligibility and qualification under Section 141 of Companies Act 2013.

Observations of Statutory Auditors on Financial Statements for the year ended March312020

As regards the comments in the Auditors' Report if any the relevant notes in theAccounts are self-explanatory and may be treated as information/explanation submitted bythe Board as contemplated under provisions of the Companies Act 2013.

Explanation & Comment by the Board on the qualifications or adverse remarks made bythe auditors

There were no qualifications reservations or adverse remarks or claims made by theauditors.

Secretarial Audit

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 2020. 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 fortheir pr of essional obligation.

MATTERS RELATED TO 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. KRaghu Raman Chief Financial of ficer

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 Arvind Goenka (holding DIN00135653) is liable to retire by rotation and being eligible for re-appointment of ferhimself 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 149150152178 and any other applicable provisions of theCompanies Act 2013 and the rules made thereunder (including any statutory modification(s)or re-enactment there of 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(1 A) and other applicable provisions of SEBI (Listing Obligationsand Disclosure Requirements) (Amendment) Regulations 2018 your Director Mrs. Arti Kantaged about 71 years seeking reappointment as Independent Directors for a 2ndtermof five consecutive years up to 5thAugust 2025. The details of herre-appointment is mentioned in Explanatory Statement annexed to the Notice of the AnnualGeneral Meeting. The first term of Mrs. Arti Kant was quite beneficial to the Company. Hervast experience and exposure makes herthe automatic choice for her re-appointment.

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 forthe yearended March 2020 are given in extract of the Annual Return.

Compliance of Code of Conduct for Directors and Senior Management Personnel.

Declaration on compliance of Code of Conduct is received from Directors and SeniorManagement Personnel.

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. 16.58 Lacs from Duncan Engineering Limited in theyear 2019-20. In addition to the remuneration from Duncan Engineering Limited he alsoreceived a remuneration of Rs. 23364220 PA. from Oriental Carbon & ChemicalsLimited in 2019-20.

The details Remuneration drawn by Mr. Akshat Goenka from Oriental Carbon &Chemicals Limited as follows:

(Amount in Rs.)

Name Salary Commission Contribution to PF & SAF Perq. And other allowances Total
Mr. Akshat Goenka 6600000 8432000 1782000 6550220 23364220

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 and have complied with the Code for Independent Directorsprescribed in Schedule IV to the Act.

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 the Board was evaluated by the Board of Directors after seekinginputs from all the Directors. The performance of the Committees was evaluated by theBoard after seeking inputs from the Committee members. The Board focused on criteria likestrategy effectiveness Board Structure and Committees Board Meetings and Procedureswhile evaluating its own performance and that its committees. The Policy on PerformanceEvaluation is also available on the website of the Company i.e. www.duncanengg.com.

Forthe purpose of evaluation the Directors have been classified into three categories:Independent Directors Non-Executive Directors and Executive Directors. Independent &Non- Executive Directors were evaluated on the basis of Engagement Adherence to Code ofConduct Strategic Planning Team Spirit Consensus Building leadership and domainknowledge. Whereas Executive Director is evaluated on Management qualities Team workabilities Result/Achievements Domain Knowledge Understanding & Awareness etc.

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 forthe year ended March31 2020 the applicable Accounting Standard (Ind AS) have been followed along with properexplanation relating to material departures ifany;

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 thepr of it and loss of the Company forthat 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.

DISCLOSURE RELATED TO BOARD. COMMITTEES 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 28 2020 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 FY2019-20on May 62019; July 172019; October182019 and January 282020.

Audit Committee

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 of ficer 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 Company has a Nomination & Remuneration Committee as perthe requirementsprescribed under Section 178 (1) of the Companies Act 2013. The Nomination andRemuneration Committee has Mr. O P Dubey as Chairman Mr. B B Tandon Mr. Arvind Goenkaand Mr. Nitin Kaul as Members. The Company has a policy on Directors appointment &remuneration which is posted on the website of the Company. The details terms of referenceof the committee has been given in the Corporate Governance Report.

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.

Company's Policy on Directors' appointment and remuneration

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 enhanced performance.Remuneration of executive directors are linked to increase in stakeholder's wealth targetachievement in term of sales margin new initiatives taken optimum utilization ofresources people Management risk Mitigation qualification experience and merits etc.Remuneration should be reasonable and sufficient to attract and retain employees.Independent Directors receive remuneration by way of sitting fees for attending meetingsof Board and Committees (where they are members). The Remuneration Policy of the Companyis 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. Avigil (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

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 in theopinion of the Board may threaten the existence of the Company. However risks like unevendemand-supply labour unrest' high employee turnover ratio etc.may adversely affect theperformance of the Company in the upcoming financial year.

Fraud Reporting

During the year under review no instances of fraud were reported by the StatutoryAuditors of the Company.

Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition&Redressal) Act 2013

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.

OTHER DISCLOSURES

Corporate Governance

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.

Compliance of Secretarial Standards

The Company has complied the applicable Secretarial Standards issued by the Instituteof Company Secretaries of India.

InsiderTrading Regulations

Based on the requirements under the SEBI (Prohibition of InsiderTrading) Regulations2015 as amended from time to time the Code of Conduct for prevention of insider tradingis in force in your Company. The Board of Directors of the Company has adopted the revisedCode of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation in compliance with Chapter IV of the said Regulations and the same has beenuploaded on the Company's website www.duncanengg.com.

Conservation of Energy Technology Absorption Exports and Foreign Exchange Earningsand Outgo

A statement giving details of conservation of energy technology absorption exportsand foreign exchange earnings and outgo pursuantto 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 underthe 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.

Investor Education & Protection Fund

The Company has last declared dividend in 2009-10 hence no amount is liable to betransferred to the Investor Education and Protection Fund (IEPF) under sub-section (2) ofsection 125 of the Actand the IEPF (Accounting Audit Transfer and Refund) Rules 2016.Similarly no shares are due for transfer to the IEPF.

The Company has appointed Mr. Rajib Kumar Gope Company Secretary as Nodal office runderthe provisions of IEPF Rules. The details of the Nodal office r is available in thewebsite of the Companywww.duncanengg.com under Investor dropdown.

Related Party Transactions

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 (Refer Note No. 36) All Related Party transactions are placed before theAudit Committee. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of foreseen and repetitive nature. The approved Policy on RelatedParty transactions is also available on the website of thecompanywww.duncanengg.com underinvestor dropdown.

Accounting Treatment

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.

Credit Rating

Your Company has obtained Credit Rating from ICRA Ltd. The Credit Rating was obtainedon July 2019. Last Credit Rating was {ICRA} AA-(SO) (Stable).

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 to which the financial statement relates and date of thisreport.

Disclosure of Orders passed by Regulators or Courts or Tribunal

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.

Pollution Control

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 lastthree years.

Acknowledgements

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.

On behalf of the Board of Directors

Akshat Goenka Arvind Goenka
Place: Noida Managing Director Director
Date: 03.06.2020 DIN:07131982 DIN:00135653

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