30 Apr 2017 | Livemint.com

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Duncan Engineering Ltd.

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Duncan Engineering Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE REPORT ON CORPORATE GOVERNANCE:

1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE

The company always acts as a good corporate citizen and recognizes that Corporate Governance is inherent to the culture of the Organization. The Company believes in the attainment of highest level of transparency, accountability and equity in all aspects of its operations. The Company firmly believes that these aspects as well as compliances of applicable legislations and timely disclosures enhance the image of the Company and long term values of all its shareholders and stakeholders. The Board of Directors of the Company has framed a Code of Conduct for its Directors and Senior Management. The Code of Conduct is available on the Website of the Company: www.schraderduncan.com

2. BOARD OF DIRECTORS

A. Composition and Category

The Company's policy is to maintain an optimum combination of Executive and Non- Executive Directors. The Board of Directors of the Company consists of eminent persons with considerable professional expertise and experience in business and industry. As on March 31, 2016, Board of Schrader Duncan comprises of seven Directors; a Whole Time Director; four Non Executive Independent Directors (NE - ID) and two Promoter Directors including the Chairman.

None of the Independent Directors has any material pecuniary relationship or transactions with the Company, its Promoters or with its management, which would affect the independence or judgment of the Directors. The Company has also not entered into any materially significant transactions with its Promoters, Directors or their relatives or with the Management etc. that may have potential conflict with the interest of the Company at large.

None of the Directors on the Board is a member of more than 10 committees and Chairman of more than five committees across all companies in which he is a Director.

Board of Directors of the Company has laid down Code of Business Conduct and Ethics for all Directors and members of the senior management. The Company follows the practice of obtaining annual affirmation of its compliance from them.

E. Disclosure of relationship of directors inter se.

Mr. J P Goenka, Chairman of the Company is the father of Mr. Arvind Goenka, Promoter Non-executive Director of the Company. None of the other Directors have any relationship inter se.

F. No. of shares and convertible instruments held by non executive directors

The Non-executive Directors do not hold any shares or convertible instruments in the Company.

G. Web link where details of familiarisation programmes imparted to independent directors is disclosed.

The details of the familiarization programmes have been hosted on the website of the Company and can be accessed on the link: www.schraderduncan.com under investor dropdown.

3. AUDIT COMMITTEE

A. Terms of Reference:

The Audit Committee reviews with Management, the statutory Auditors and the Internal Auditors all aspects of the financial results, effectiveness of internal audit processes, taxation matters and the Company's risk management strategy

B. Compositions

The Audit Committee comprises only Non-Executive Director ('NEDs') with majority being 'independent' and is chaired by Mr. O P Dubey and Mr. Arvind Goenka and Mr. B B Tandon are the member of the Committee. The Whole Time Director, Chief Financial Officer, Internal Auditors and Statutory Auditors are permanent invitees to the meetings of the Committee, with the Company Secretary acting as its Secretary. The members of the Committee are eminent professionals with necessary knowledge in financial, accounting and business matters. Any other person/ executive, when required, also attend the meetings of the Committee, Minutes of Audit Committee meetings are circulated to all the Board members.

4. NOMINATION AND REMUNERATION COMMITTEE:

The Committee has been constituted in Compliance with Section 178 of the Companies Act, 2013, and Rules made there under as well as SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

A. Terms of Reference

The primary purpose of the Committee, among other things, is to determine and propose the following for Board approval:-

i) Identify persons who are qualified to become Directors and who may be appointed in senior management positions in accordance with the criteria laid down and recommend to the Board their appointment and removal;

ii) carry out evaluation of every Director's performance along with the Board;

iii) formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy relating to the remuneration of the Directors;

iv) formulate the criteria for performance evaluation of Independent Directors and the Board;

v) devise a policy on Board diversity;

vi) the Members and Chairperson of Board Committees;

vii) Evaluate the level and compositions of remuneration to be reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company Successfully.

viii) Ensure the relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

B. Composition

The Audit Committee comprises of four Directors with majority being Non-Executive Independent Directors and is chaired by Mr. O P Dubey. Arvind Goenka, B B Tandon and Nitin Kaul are the members of the Committee.

D. Performance evaluation criteria for Independent Directors

The Committee meets on an annual basis and evaluate inter alia the performance of Independent Directors on the basis of their advice/ recommendation/suggestion to management on the various important matters.

5. REMUNERATION OF DIRECTORS

Whole Time Director and Management Team

The remuneration paid / payable to the managing Directors is in accordance with the limits fixed by the Remuneration Committee and Board and approved by the Shareholders. The total remuneration comprises fixed component consisting of salary and perquisites in accordance with the Company Policy and a performance Bonus linked to Company performance. The increase in fixed remuneration is dependent upon individual and Company performance and is assessed annually. The performance bonus is based on a set of stretch targets that reflect the overall financial performance of the Company each year

6. STAKEHOLDER'S RELATIONSHIP COMMITTEE

Terms of Reference

The Committee has been constituted in Compliance with Section 178 of the Companies Act, 2013, and Rules made there under as well as SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

The Committee focuses primarily on monitoring and ensuring that shareholder and investor services operate in an efficient manner and that shareholder and investor grievances/complaints including that of all other shareholder are addressed promptly with the result that all issues are resolved rapidly and efficiently.

9. GENERAL SHAREHOLDERS INFORMATION

a) Annual General Meeting

Date and Time : Thursday, 28th July, 2016 at 2:30 P.M.

Venue : Registered Office

b) Financial Calendar

First Quarter Results : July 2016

Second Quarter Results : October 2016

Third Quarter Results : January 2017

Financial Results for the Year ending March 31, 2017 : May 2017

c) Dividend Payment Date : Nil.

d) Listing on Stock Exchanges at : Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001, listing fees for 2016-17 paid

e) Stock Code : 504908

h) No securities of the Company were suspended from trading during the year 2015-16.

i) Registrar & Transfer Agents

The Company’s Registrar & Transfer Agents are:

Link Intime India Pvt Ltd Block No 202, 02nd Floor, Akshay Complex, Near Ganesh Temple, Off-Dhole Patil Road, Pune – 411001 Tel : 020-26161629\26160084, Fax : 020-26163503

j) Share Transfer System

Transfer of shares in the physical form can be lodged with Link Intime India Pvt Ltd at the above-mentioned address or sent to the Company which would be forwarded to Link Intime India Pvt Ltd.

The Transfers which are received in physical form are processed within 10-15 days from the date of receipt and the share certificates are returned duly transferred subject to the documentation being valid and complete in all respect.

The Board has delegated the authority for approving transfer, transmission etc of the Company's securities to Shareholders/ Investors Grievances Committee and the Company Secretary.

The Company obtains from Company Secretary in Practice certificate of compliance with share transfer formalities as required under Regulation 40(9) of SEBI (LODR) Regulations 2015 (Clause 47(c) of the Listing Agreement) on a half yearly basis and files a copy of the certificate with the Stock Exchange.

l. Dematerialisation of Shares and Liquidity

No. of Shares: Physical form : 140328

Demat form : 3555672

Demat ISIN in NDSL & CDSL for Company's Equity Shares : INE340F01011

The Company has entered into agreement with National Securities Depository Ltd (NSDL) as well as the Central Depository Services Ltd (CDSL) for demat facility. 96.21% of the Company's shares are dematerialized as on March 31, 2016.

Nomination:

Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares shall be transferable in case of death of all the registered shareholders. Nomination facility in respect of shares held in electronic form is also available with the depository participants as per the bye-laws and business rules applicable to NSDL and CDSL. Nomination forms can be obtained from the Company's Registrar and Transfer Agents.

m. Outstanding Global Depository Receipts or American Depository Receipts or warrants or any convertible instruments, conversion date and likely impact on equity:

The Company does not have any outstanding GDR/ADR/ Warrant or any convertible instruments as on date.

n. Commodity price risk or foreign exchange risk and hedging activities: There is a Foreign Exchange loss of Rs. 12.39 Lac which is 0.30% of material consumed. There are no hedging activities during the year.

o. Plant Location

Automotive Business Unit and Fluid Power & Automation - F-33 Ranjangaon MIDC,

Karegoan,Tal. Shirur, Dist Pune- 412 209

p. Address for correspondence

Investor Correspondence:

Link Intime India Pvt Ltd

Block No 202, 02nd Floor, Akshay Complex, Near Ganesh Temple, Off-Dhole Patil Road, Pune - 411001 Tel: 020-26161629\26160084 Fax: 020-26163503, Email: pune@linkintime.co.in

For query on Annual Report:

Mr. Rajib Kumar Gope

Company Secretary & Compliance Officer  Schrader Duncan Limited  F-33 Ranjangaon MIDC,  Karegoan, Tal, Shirur, Dist- Pune 412 209  Tel : (021) 38660066 Fax: (021) 38660067,  Email: complianceofficer@schraderduncan.com Website: www.schraderduncan.com

10. OTHER DISCLOSURES

a. Disclosure on materially significant Related Party Transactions that may have potential conflict with the interest of the listed entity at large.

All Related Party Transactions that were entered into during the financial year were on arms' length basis and were in the ordinary course of business. There are no materially significant Related Party Transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All Related Party Transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.

b. Details of non-compliance by the listed entity, penalties and strictures imposed on the listed entity by stock exchange or the Board (SEBI) or any statutory authority on any manner related to capital markets during the last three years.

The Company has complied with the requirements of the Regulatory Authorities on Capital Markets. Neither has there been any instances of non-compliance by the Company on any matters related to the capital markets, nor has any penalty or stricture been imposed on the Company by the stock exchanges, SEBI or any other statutory authority, on any matter related to capital markets, during the last three years.

c. Details of establishment of vigil mechanism, Whistle blower policy and affirmation that no personnel have been denied access to the Audit Committee

In line with the best Corporate Governance practices, Schrader Duncan Limited has put in place a system through which the Directors, employees and business associates may report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct & Ethics without fear of reprisal. The Company has put in place process by which employees and business associates have direct access to the Audit Committee Chairman, Managing Director, Chairman of the Board. The whistle blower policy is placed on the website of the Company.

d. Details of compliance with mandatory requirements and adoption of non-mandatory requirements

The Company has complied with the applicable mandatory requirements of SEBI (LODR) Regulations, 2015. The Company has adopted non-mandatory requirements to the extent specified in para 12 below.

e. Web link where policy for determining 'material' subsidiaries is disclosed The Company has no subsidiary as on date.

f. Web link where policy on dealing with related party transactions

The policy on dealing with related party transactions have been hosted on the website of the Company and can be accessed on the link: www.schraderduncan.com under investor dropdown.

g. Disclosure of commodity price risks and commodity hedging activities

No such activity during the year.

11. All the requirements of Corporate Governance Report of Sub-paras (2) to (10) above have been complied with.

12. EXTENT TO WHICH THE DISCRETIONARY REQUIREMENTS AS SPECIFIED IN PART E OF SCHEDULE II HAVE BEEN  COMPLIED.

Shareholder Rights:

Quarterly financial results are forwarded to the Stock Exchange and uploaded on the website of the Company.

Audit Qualifications:

During the year under review, there was no audit qualification in the Auditors' report on the Company's financial statements.

Separate post of Chairman and CEO:

The Chairman of the Company and the Managing Director/CEO are different persons. Reporting of Internal Auditor:

The Internal Auditor of the Company is a permanent invitee to the Audit Committee Meeting and regularly attends the Meeting for reporting their findings of the internal audit to the Audit Committee Members.

13. The Company has complied with corporate governance requirements as specified in regulation 17 to 27(Clause 49 of Listing Agreement). The Company has a functional website and it disseminate information as specified in clauses (b) to (i) of the sub-regulation (2) of the regulation 46.