To The Members Duncan Engineering Limited
Your Directors have pleasure in presenting the Sixty- first Annual Report of theCompany on the business and operations of the Company together with the Audited financialStatements for the year ended March 31 2022.s
Summary of financial Results
The Company's performance during the Financial year ended March 31 2022 as compared tothe previous Financial year is summarized below:
| || ||(INR. in Lakhs) |
|Particulars ||2021-22 ||2020-21 |
|Total Revenue ||5637.74 ||4199.78 |
|Total Expenses ||-4785.99 ||-3822.01 |
|Profit/(Loss) before Tax ||851.75 ||377.77 |
|Tax Expenses (Current Tax) || || |
|Tax Expenses (earlier year)- Deferred Tax ||223.00 ||-423.80 |
|Profit/(Loss) after Tax ||628.75 ||801.57 |
|Profit/(loss) for the year ||628.75 ||801.57 |
The Board of Directors have not recommended to declare any dividend in order toconserve the fund for the growth of the Company and also Company has carry forward losseswhich are yet to be fully recovered.
The subscribed and issued share Capital of the Company is 3696000 equity shares ofRs.10 each. There was no issue of securities during the year.
financial performance and state of the Company's a airs
The Financial year 2021-22 begun with outbreak of 2 wave of the pandemic. But theCompany did well not to allow the pandemic to break the momentum gathered towards thesecond half of FY 2020-21. Unlike 1 wave of pandemic the plant was not closed during 2wave of pandemic. The staff whose physical presence in plant was not mandatory wereallowed "Work from Home".
On the operational front the Company faced challenges such as manpower shortage rawmaterial scarcity etc. for most part of the first and second quarter. However theproduction & sales didn't suffer much as restriction on mobility for industry was farless stringent compared to the first wave. The Sales and Production picked up from 2quarter onwards and the Company broke the Rs. 50 crore barrier in sales as well as inproduction.
The overall performance of the Company during the year under review is veryencouraging. In spite of 2 wave of COVID-19 and other challenges the company did well toachieve an annual turnover of Rs.5576.81 lacs with major contribution from Power and steelsector. The revenue from operations for the year increased by 34.44% compared to F.Y2020-21. The Profit before Tax (PBT) increased by126.01% vis a vis previous year.
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 bytop Management and also by the Audit Committee of the Board. Proper follow up actions areensured wherever required. M/s Pipalia Singhal & Associates are the Internal Auditorof 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 xed 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 given/taken by company is mentioned in theNotes 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.
Corporate Social Responsibility(CSR)
The CSR provisions as prescribed in Section 135 read with CSR Rules made thereunder areapplicable to the Company since its Net Profit for the FY 2021-22(i.e. immediatelypreceding Financial year) exceeded Rs. 5 Crores.
Generally on applicability of CSR provisions the Company shall constitute a CorporateSocial Responsibility Committee of the Board. However a new sub-section (9) inserted inSection 135 by Companies (Amendment) Act 2020 provides that where the amount to be spentby a company does not exceed fty lakh rupees the requirement under sub-section (1) forconstitution of the Corporate Social Responsibility Committee shall not be applicable andthe functions of such Committee shall be discharged by the Board of Directors of suchcompany.
The average Net Profits of the Company for the last three Financial years is Rs.516.68Lacs and accordingly the prescribed CSR expenditure during the year 2022-23 shall not beless than Rs 10.33 Lacs (i.e. 2% of the Average Net Profits of the Company for the lastthree Financial years). Therefore Rs 10.33 Lacs will be spent on CSR activities andprojects to be undertaken during FY 2022-23. Hence there is no need to constitute a CSRCommittee by the Board.
The Board of Directors has formulated a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company. The CSR Policy may beaccessed on the Company's website at www.duncanengg.com. The CSR Policy includesactivities prescribed as CSR activity as per the Rules of Companies Act 2013.The mainFocus areas taken in the policy are Education Health care and family welfare Environmentand Safety contribution to any relief fund setup by the Government of India and any StateGovernment.
AUDITORS AND THEIR REPORTS
The matters related auditors and their reports are as under:
Statutory Auditor's appointment
At the Annual General Meeting held on July 29 2020 the members have approved theappointment of M/s SS Kothari Mehta & Co. Chartered Accountants (RegistrationNo.000756N) as a Statutory Auditor of the Company for a period of ve consecutive yearsi.e. for a term up to the conclusion of 64 Annual General Meeting to be held in thecalendar year 2025.
The requirement to place the matter relating to appointment of auditors for rati cationby Members at every AGM has been done away by the Companies (Amendment) Act 2017 witheffect from May 7 2018. Accordingly no resolution is being proposed for rati cation ofappointment of statutory auditors at the ensuing AGM.
The Company has received a certificate from the said Auditors that they are eligible tohold officeas the Auditors of the Company and are not disqualified for being so appointed.
Observations of Statutory Auditors on financial Statements for the year ended March 312022
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.
As required under the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors appointed M/s Shaswati Vaishnav & Associates Company Secretary in Practiceto conduct Secretarial Audit of the Company for the year ended 31st March 2022. TheSecretarial Audit Report is annexed herewith in Form No. MR-3.There are no qualificationsreservation or adverse remarks or disclaimer made by the auditor in the report save andexcept disclaimer made by them in discharge for their professional obligation.
MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
Board of Directors and Key Managerial Personnel (KMP)
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 offerhimself for re-appointment. Your Directors have proposed his re-appointment as set out inthe notice of AGM.
In accordance with the Sections 196 197 203 and other applicable provisions if anyof the Companies Act 2013 ("the Act") (including any statutory modi cation orre-enactment thereof for the time being in force) read with Schedule V to the Act and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boarddirectors approved reappointment of Mr. Akshat Goenka as Managing Director of the Companyfor a period of ve years w.e.f. 9th February 2022. The shareholders had approved hisre-appointment in the AGM held on 23rd July 2021.
As on 31st March 2022 the following three persons were formally appointed as KeyManagerial Personnel of the Company as per the provisions of Sec 203 of the Companies Act2013.
a) Mr. Akshat Goenka Managing Director b) Mr. K Raghu Raman Chief financial Officerc) Mr. Rajib Kumar Gope Company Secretary
Mr. K Raghu Raman Chief financial Officer(CFO) decided to resign from the services ofthe Company. Hence his resignation as CFO came into effect from 17th May 2022. Mr. KamalSaria who joined the Company in February 2022 will be designated as Chief financialOfficer w.e.f. 18th May 2022. The Board of Directors approved appointment of Mr. Saria asCFO at their meeting held on 17th May 2022 on the recommendation of Nomination &Remuneration Committee & Audit Committee.
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 of Rs. 4463000 from Duncan Engineering Limited inthe year 2021-22. In addition to the remuneration from Duncan Engineering Limited he alsoreceived a remuneration of Rs.22080920.P.A. from Oriental Carbon & ChemicalsLimited in 2021-22.
The components of the 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 ||7056000 ||6449000 ||846720 ||7729200 ||22080920 |
Declaration by Independent Directors
In terms of Section 149 of the Act and the SEBI Listing Regulations Mr. O P Dubey Mr.B B. Tandon Mr. Nitin Kaul and Mrs. Arti Kant are the Independent Directors of theCompany as on date of this report.
All Independent Directors of the Company have given declarations under Section 149(7)of the Act that they meet the criteria of independence as laid down under Section 149(6)of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulation25(8) of the SEBI Listing Regulations the Independent Directors have con rmed that theyare not aware of any circumstance or situation which exists or may be reasonablyanticipated that could impair or impact their ability to discharge their duties with anobjective independent judgement and without any external in uence. The Company hasreceived confirmation from all the existing Independent Directors of their registration onthe Independent Directors Database maintained by the Institute of Corporate A airspursuant to Rule 6 of the Companies (Appointment and Qualification of Directors) Rules2014.
In the opinion of the Board the Independent Directors possess the requisite expertiseand experience and are persons of high integrity and repute. They fulfill the conditionsspecified in Act as well as the Rules made thereunder and are independent of themanagement.
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 focussed 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
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.
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 Financialstatements for the year ended March 31 2022 the applicable Accounting Standard (Ind AS)have been followed along with proper explanation 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 a airs 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.
DISCLOSURE RELATED TO BOARD COMMITTEES AND POLICIES
Board and Committee Meetings
The Company holds Meetings as per Companies Act 2013 and the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015. During the year four Board Meetingsfour Audit Committee meetings four Stakeholder's Relationship Committee meetings and oneNomination and Remuneration meeting were convened and held. The details of which are givenin the Corporate Governance Report. The intervening gap between the Meetings was withinthe period prescribed under the Companies Act 2013 and SEBI (Listing ObligationsDisclosure Requirements) Amendment Regulations 2018. Additionally on January 25 2022the Independent Directors held a separate meeting in compliance with the requirements ofSchedule IV of the Companies Act 2013.
The Board of Directors met four times in FY 2021-22 on May 7 2021; July 26 2021;October 21 2021 and January 25 2022.
The Audit Committee comprises four Non-Executive-Independent Directors namely Mr. O PDubey Chairman Mr. B B Tandon Mr. Nitin Kaul and Mrs. Arti Kant are the Members of theCommittee. All the recommendations made by the Audit Committee during the year wereaccepted by the Board. The Chief financial Officer and Auditors are permanent invitees tothe committee meetings. The detail of terms of reference of Audit Committee number anddates of meetings held attendance of the directors and remunerations paid to them aregiven separately in the Corporate Governance Report. The Audit Committee met four times inFY 2021-22 i.e. on May 7 2021; July 26 2021; October 21 2021 and January 25 2022.
Nomination and Remuneration Committee
The Board of Directors has a Nomination & Remuneration Committee as per therequirements prescribed under Section 178 (1) of the Companies Act 2013. The Nominationand Remuneration Committee has Mr. O P Dubey as Chairman Mr. B B Tandon Mr. ArvindGoenka and 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 ofreference of the committee has been given in the Corporate Governance Report. TheNomination & Remuneration Committee met only once in FY 2021-22 i.e. on May 7 2021.
The Stakeholder's Relationship Committee:
The Board of Directors has a Stakeholder's Relationship Committee for reviewingshareholder/investors complaints and grievances. Presently the Committee is led by Mr. OP Dubey (Chairman) Mr. Akshat Goenka and Mrs. Arti Kant are the other two members of theCommittee. The detail terms of reference of the committee has been given in the CorporateGovernance Report. There were four meetings of Stakeholder's Relationship Committee wereheld in FY 2021-22 i.e. on May 7 2021; July 26 2021; October 21 2021 and January 252022.
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 i.e. www.duncanengg.com.
Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism namely Whistle Blower Policy to deal with instancesof fraud and mismanagement if any. A vigil (Whistle Blower) mechanism provides a channelto the 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.
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.
During the year under review no instances of fraud were reported by the StatutoryAuditors of the Company.
Prevention of Sexual Harassment
The Company has adopted a Policy on Prevention Prohibition and Redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and rules framed thereunder.Internal Committee is in place to redress complaints received regarding sexual harassment.No complaint received during the year under review.
Safety & Health
In last two Financial years the Company rose through various challenges posed byCOVID-19 pandemic. The Company initiated a response to safeguard employees at its plantand o ce. Social distancing and sanitization norms were established as per governmentguidelines. The management stayed in touch with its employees through virtual meetings.Rapid Antigen Test were carried out within Company's Plant premises. The Companycollaborated with a private hospital through MIDC to provide COVID-19 vaccine free of costto all its eligible employees including third party contract employees.
Pursuant to Section 92(3) of the Act and Rule 12 of the Companies(Management andAdministration) Rules 2014 the Annual Return for FY 2021-22 is available on Company'swebsite at www.duncanengg.comunder investor drop down.
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 (ACS8675 C.P. No. 11392) confirming compliance 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.
Insider Trading Regulations
Based on the requirements under the SEBI (Prohibition of Insider Trading) Regulations2015 as amended from time to time the Code of Conduct for prevention of Insider Tradingis inforce 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 i.e. 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 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.
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 Act and 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 Officerunder the provisions of IEPF Rules. The details of the Nodal Officer is available in thewebsite of the Company i.e. www.duncanengg.com under Investor dropdown.
No pending proceeding under Insolvency and Bankruptcy Code 2016
Your Board con rms that there is no proceeding pending under the Insolvency andBankruptcy Code 2016 and that there is no instance of onetime settlement with any Bank orfinancial Institution during the year under review.
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. During the FY 2021-22 the Non-executive Directors ofthe Company had no pecuniary relationship or transactions with the Company other thansitting fees. All Related Party transactions form part to the Notes to the Balance Sheet(Refer Note No 33.)All Related Party transactions are placed before the Audit Committee.Prior omnibus approval of the Audit Committee is obtained for transactions which are offoreseen and repetitive nature. Given that the Company does not have any RPTs to reportpursuant to Sections 134(3)(h) and 188 of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 in Form AOC-2 the same is not provided. The approved Policy onRelated Party transactions is also available on the website of the company i.e.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 gures have been re-stated accordingly. Notreatment different from that prescribed in Accounting Standards (Ind AS) has beenfollowed by the Company.
Your Company has obtained Credit Rating from ICRA Ltd. The Credit Rating was obtainedon 01.10.2021. Latest available Credit Rating was [ICRA] A-(Stable)/[ICRA]A2+.
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
This is regarding workmen related case of 2014. The Company had lost the case in the 2Labour Court Pune in January 2020 and accordingly the estimated wage liability ofRs.175.58 Lakhs was provided in that quarter. The disclosure of the same was given by wayof Note to financial result for the quarter and year ended 31 March 2020. The Company hadappealed before the Hon'ble Bombay High Court against the Judgment of aforementionedLabour Court. The Hon'ble Bombay High Court in their judgement dated 21.06.2021 dismissedCompany's appeal on the ground of non-compliance of the provision under Section 33(2)(b)of the Industrial Disputes Act. Company has paid back wages of 64.20 Laces (includingGratuity Leave encashment PF etc.) from the date of dismissal up to the closure of ABUdivision i.e. Aug 2016. However the case is right now pending in 2nd Labour court asper the complaint made by these terminated employees to pay back the settlement up todate.
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.
As part of our endeavor to protect environment the Company is making efforts toincrease the green cover through sapling plantation on one hand and enhancing theenvironmental awareness levels amongst employees on the other hand. We planted saplings ofindigenous varieties in barren land within the factory premises and ensured theirsurvival.
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. During COVID 19 there was a delay of seven days in ling of Related PartyTransaction Statement for the half year ended 31 March 2021 as prescribed under Regulation23(9) of SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015.Hence Company had to pay a ne as prescribed by law.
The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to ght thispandemic. Your Directors would like to thank to the employees customers suppliersbankers business partners other regulatory agencies and wish to acknowledge and place onrecord their sincere appreciation for the excellent support given by them to the Companyand their con dence in its Management. Your Directors would also like to thank the membersof the Company for reposing their con dence 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: 17.05.2022 ||DIN: 07131982 ||DIN: 00135653 |