Duke Offshore Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting the 34th Annual Report together with the Audited Statement of Accounts and the Auditors Report of your company for the financial year ended, 31st March, 2020

FINANCIAL HIGHLIGHTS:

Particulars 2019-20 2018-19
Revenue From Operation 42,558,739 92,503,961
Other Income 1,730,863 658,785
Total Income 44,289,602 93,162,746
Profit/Loss before Tax and Exceptional / Extraordinary Item - 39,820,786 7,048,223
Exceptional Items - -
Profit/Loss For the year before Tax - 39,820,786 7,048,223
Provision for Taxation
Current Tax 483,605 956,000
Deferred Tax -13,438,488 1,377,250
MAT Credit Entitlement - (956,000)
Profit/ Loss After Tax -26,865,903 5,670,973
Profit brought forward from Previous Year 51,382,350 94,997,377
Profit/Loss available for Appropriation -26,865,903 100,668,350
Less: Appropriations
Issue of Bonus Shares - (49,286,000)
Profit/Loss Carried to Balance Sheet 24,516,447 51,382,350

STATE OF COMPANY AFFAIRS:

Our company is now essentially a debt free company.

The COVID-19 pandemic has disrupted demand and supply chains across industries, negatively impacting the business of companies and driving the global economy towards a recession. Governments in several countries have imposed stringent lockdown in a bid to contain the spread of the disease. This in turn has forced companies to reconfigure how their employees work and how their core business processes are supported and delivered. These events could cause companies to pause and reprioritize their spending on technology and business process outsourcing. New projects of several oil and gas majors have been put on hold or postponed. However your company has managed to sustain its self in these testing conditions.

This is a true testament to the professional approach of the management and the flexibility of our company to juggle between near shore work and our contacts in the offshore oil and gas industry.

Being in the niche business and specializing in the marine security business your company continues to plan and expand its fleet in the coming financial year.

The company is also on the brink of getting several prestigious contracts and will continue to strive towards positive growth as we have regularly being doing.

CHANGE OF BUSINESS IF ANY:

Your company continues to dominate the marine security business in India and is working with several new clients as well. The company is also providing vessels for crew transfer and marine survey hence broadening our customer base. Benefiting from our engineering background, strong financial base and good business acumen the company now plans to diversify into shore based infrastructure projects not limited to oil, gas and water. This will further increase our customer base and unlimite the companies capabilities.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:

Since Section 205A of the Companies Act, 1956 as amended from time to time and/or relevant corresponding provisions of the Companies Act, 2013 once notified, mandates that companies transfer dividend that has been unclaimed for a period of seven years from unpaid dividend account to the Investor Education and Protection Fund (IEPF). In accordance with the provisions company will transfer the amount of unpaid dividend to IEPF timely.

MATERIAL CHANGES AND COMMITMENTS:

The particulars as required under the provisions of Section 134(3)(l), no changes have occurred which have affected the financial position of the company occurred between 31st March 2020 and the date of Boards Report.

EXTRACT OF ANNUAL RETURN:

The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed herewith for your kind perusal and information.

MEETINGS OF THE BOARD OF DIRECTORS:

During the Financial Year 2019-20, the Company held 4 board meetings of the Board of Directors as per Section 173 of Companies Act, 2013 which is summarized below. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings.

Date of Meeting Board Strength No. of Directors Present
1 30th May, 2019 5 5
2 05th August, 2019 5 5
3 12th November, 2019 5 5
4 11th February, 2020 5 5

DIRECTORS RESPONSIBILITY STATEMENT:

a. Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent 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 profit and loss of the company for that period.

c. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. The directors have prepared the annual accounts on a going concern basis; and

e. The directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

AUDITORS

M/s. S C M K & CO LLP, Chartered Accountants proposed to be appointed as Statutory Auditors from the F.Y 2020-21 to 2024-25 in the Annual General Meeting held on Wednesday, 30th December, 2020 and their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting.

Note: Above details may be suitably modified based on the following event.

1. Information about change of Auditor, if any during the year may be included.

2. Information about the proposal of the shareholders for appointment of new Auditors.

3. Rotation of Auditors in respect of certain classes of Companies.

There are no qualifications or adverse remarks in the Auditors Report which require any clarification/explanation. The Notes on financial statements are self-explanatory, and needs no further explanation. Further the Auditors Report for the financial year ended, 31st March, 2020 is annexed herewith for your kind perusal and information.

LOANS, GUARANTEES AND INVESTMENTS:

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable

RELATED PARTY TRANSACTIONS:

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 the Company.

DIRECTORS& KMP: Remuneration to the Key Management Personnel (KMP)

Name Designation Year Ended 31st March 2020 (In Rs.) Year Ended 31st March 2019 (In Rs.)
1. Avik George Duke Chairman & Managing Director 48,00,000 48,00,000
2. Shaival Trivedi Chief Financial Officer 21,00,000 21,00,000

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) Conservation of energy and Technology absorption

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review.

(a) Conservation of energy:

Steps taken / impact on conservation of energy, with special reference to the following:

(i) Steps taken by the company for utilizing alternate sources of energy including waste generated our company has put into affect a fuel saving scheme on all vessels. This minimizes our carbon foot print and helps protect our environment. Your company has also made efforts to recycle waste on board all vessels.

(ii) Capital investment on energy conservation equipment- There has been no capital investment for the same.

(b) Technology absorption:

1. Your company has been actively involved in new technology absorption and is gearing up to meet global standards.

2. Benefits derived as a result of the above efforts, has been considerable fuel savings which have benefitted our clients and the environment.

(c) Foreign exchange Earnings and Outgo: (Amount in Rs.)

Type of Income 31st March, 2020 31st March, 2019
Marine & Offshore Income 26,987,866 65,984,858
Total 26,987,866 65,984,858

 

Type of Expenses 31st March, 2020 31st March, 2019
Foreign Travelling 17,400 212,849
Spares 7,098,832 2,433,197
Other Payments 235,087 373,545
Total 7,351,319 3,019,591

RISK MANAGEMENT:

The price of crude oil declined significantly this year. Forecasts predict an upward trend in the coming years. To mitigate this risk your company continues to concentrate on near shore and harbor activity to offset the slowdown in the oil and gas industry.

With an increase in fleet strength mechanical failures can hinder income. Your company continues to improve its maintenance ability and focus on a NIL downtime performance as it has done last year.

DEPOSITS/PUBLIC DEPOSITS:

The company has not accepted any deposits during the year.

CORPORATE SOCIAL RESPONSIBILITY

As per Section 135(5) of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and schedule VII of the Companies Act, 2013, the company has duly constituted CSR Committee. The committee has decided the activities to be undertaken by the company and the expenditures to be incurred on the same and recommended the same to the board therefore the board approved the CSR policy.

ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department.

INDEPENDENT DIRECTORS & DECLARATION

The Board of Directors of the Company hereby confirms that all the Independent directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013.

Name Designation Date of appointment Resignation Date
1. Mr. Sujay Nitin Kantawala Independent Director 25/09/2014 N.A
2. Ms. Harshika S. Katariya Independent Woman Director 23/03/2015 N.A
3. Mr. Pranay Mehta Independent Director 18/01/2019 N.A

REMUNERATION POLICY - Remuneration to Executive Directors:

The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in Board meeting, subject to the subsequent approval of the shareholders at the General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company.

Any director who is in receipt of any commission from the company and who is a managing director or whole time director of the company shall not be disqualified from receiving any remuneration or commission from any holding company or subsidiary company of such company. (Section 197 (14))

Remuneration to Non Executive Directors:

No remuneration has been paid to Non-executive Directors of the company during the year. The company shall disclose the number of shares and convertible instruments held by non-executive Directors.

VIGIL MECHANISM :

As per Section 177(9) and (10) of the Companies Act, 2013, and as per the Clause 49 of the Listing Agreement, the company has established Vigil Mechanism for directors and employees to report genuine concerns and made provisions for direct access to the chairperson of the Audit Committee. Company has formulated the present policy for establishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders, Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has a well-established framework of internal operational and financial controls, including suitable monitoring procedures systems which are adequate for the nature of its business and size of the operations.

CORPORATE GOVERNANCE REPORT:

Your Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Report on corporate governance as stipulated under clause 49 of the Listing Agreement forms the part of the Annual Report. The requisite certificate from the Practicing Company Secretary confirming the completion of condition on Corporate Governance.

MANAGEMENTS DISCUSSIONS AND ANALYSIS:

1. Industry Trends and Developments:

The year 2018-19 has been a mixed year for global offshore market. The price of oil and the global dependency on it is being reduced. There is a requirement for specialized offshore vessels globally for surveillance for transportation of men and materials through water ways and for vessels for security purpose and this trend will continue to grow.

2. The year in perspective:

Your Company has made remarkable progress with ongoing projects in chartering the Fast Interceptors Crafts/Vessels for guarding the offshore boarders and for transportation of men and materials through water ways and is planning to expand the same by entering into contract with other Companies apart from Government for provided support service vessels for patrolling.

3. Future Prospects & Outlook:

The Management of the Company are cautiously optimistic about future growth prospects and working towards new project, facilities expansion and most importantly, understanding the changing customers preference and demands and fostering long term profitable relationship with Customer.

4. Business Risks and Managements assessments:

Availability of financial resources: The Company expects a substantial increase in revenue by way of additional contracts. However these contracts will require heavy investment for procurement of vessels and offshore assets and have tenure for fixed period.

5. Human Resources and Industrial Relations:

The Board wishes to express its deep appreciation to all employees in your Company for their contributions to your Company during the year. Harmonious relations continued to prevail in the organization, strengthening the well-established traditions of fairness in dealings and commitment to the future growth of employees through sustained growth of your company.

6. Financial Condition and Operational Performance 6.1 Share Capital

The Company has at present only one class of shares. The authorized share capital is 3,00,00,000

Equity shares of Rs. 10/- each, constituting to Rs. 30,00,00,000/- and The paid up capital is Rs. 98,572,000 (9,857,200 Equity shares of Rs. 10/- each) during the year under review. Out-standing at the year end to 9,857,200 Equity shares of Rs.10/- each

6.2. Fixed Asset

During the year 2019-2020 the Company has gross block of assets of Rs. 157,622,360/-

6.3. Net Worth

The Net Worth for the year ended March 31,2020 is Rs. 123,585,447/- compared to the Net worth of Rs. 150,451,350/- for the same period last year. The Net Worth has been decreased by 17.86 % compared to previous year on account of Loss of Rs. 26,865,903/- for the Financial year ended 31.03.2020.

6.4. Revenues

In the year under review the total revenue of the Company was Rs. 44,289,602/- compared to Rs. 93,162,746/- for the same period in the previous year. The revenue has been decreased by 52% as compared to previous year.

6.5. Operating Profit (EBITDA)

The Company reported EBITDA Loss for Rs. 12,961,587/- for F.Y ended on 31.03.2020 against Positive EBITDA of Rs. 38,113,913/- for the F.Y. ended on 31.03.2019 as a result of drop in revenue while the expenses remained as at previous year level.

6.6 Internal Control Systems and their adequacy

The Company has adequate internal control systems in place. With a view to monitor the Companys performance as well as to make sure that internal checks and controls are operating properly, the Company has system of checking the adequacy of its internal control.

7. Acknowledgement

Your Directors wish to express their grateful appreciation to the continued co-operation received from the Banks, Government Authorities, Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service of the Executives, Staff and Workers of the Company.

By the order of the Board
For DUKE OFFSHORE LIMITED
Sd/- Avik George Duke
Place : Mumbai Managing Director
Date : 31/07/2020 DIN: 02613056