Your Directors are pleased to present the Fourteenth Annual Report on
the business and operations of your Company for the period ended March 31, 2023.
1. Financial Highlights
(Rs. In lakhs)
Particulars |
Year ended 31/03/2023 |
Year ended 31/03/2022 |
Gross Income |
31,242.75 |
12,488.64 |
Prot Bef ore Interest and Depreciation |
1,525.97 |
1,084.35 |
Finance Charges |
988.69 |
953.85 |
Prot bef ore Depreciation |
537.28 |
130.50 |
Provision for Depreciation |
6.25 |
9.37 |
Net Prot Bef ore Tax |
531.03 |
121.13 |
Provision for Tax |
143.03 |
38.27 |
Net Prot A fter Tax |
387.99 |
82.86 |
Other Comprehensive Income |
(0.64) |
0.04 |
Total Comprehensive Income after Tax |
387.35 |
82.90 |
Balance of Prot br ought forward |
2,070.81 |
1,987.91 |
Income Tax Earlier Year |
- |
- |
Balance available for appropriation |
3,469.39 |
2,070.81 |
2. Management Analysis and Discussions:
Discussion on financial performance with respect to operational
performance:
The total income of standalone for the financial year under review was
Rs. 31,242.75 Lacs as against Rs.12,488.64 Lacs during the previous year. The Operating
Prot (earnings before depreciation and interest and tax) recorded a increase of 40.73% at
Rs. 1,525.96 Lacs as against Rs. 1,084.35 Lacs in the previous year. The prot before tax
stood at Rs. 531.03 Lacs as compared to Rs. 121.13 Lacs in the previous year. The Company
has made a provision of tax totaling to Rs.143.03 Lacs and the prot af ter tax stood at
Rs. 387.99 Lacs for the current year.
The total income on consolidated basis for the financial year under
review was Rs. 39,613.58 Lacs as against Rs.38,476.54 Lacs during the previous year. The
Operating Prot (earnings before depreciation and interest and tax) on consolidated basis
is Rs.1,671.66 Lacs as against Rs. 1,694.99 Lacs in the previous year. The Consolidated
prot before tax stood at Rs. 564.50 Lacs as compared to Rs. 627.65 Lacs in the previous
year The Company has made a provision of tax totaling to Rs. 154.66Lacs and the
consolidated prot after tax stood at Rs. 409.85 Lacs.
Overall your Company recorded growth both in terms of revenue and prot.
Your Company continues with its rigorous cost restructuring exercises and efficiency
improvements which have resulted in signicant savings, thereby enabling the Company to
maintain protable growth in the current economic scenario. Continuing to order booking
spree, the company booked one more FGD order during this period. The company continuing to
bid many projects both in FGD & Bulk material handling systems and hopes to book some
more projects in the immediate future.
ENGINEERING, PROCUREMENT AND CONSTRUCTION EPC
AIR POLLUTION CONTROL SYSTEMS FGD
Flue-gas desulfurization (FGD) is a set of technologies used to remove
sulfur dioxide (SO ) from exhaust ue gases of fossil-fuel power plants, and from the
emissions of other sulfur oxide emitting processes. This process is carried out during
combustion in fossil fuel power plants such as coal and oil r ed combustion units. When
coal or oil is burned to produce energy, about 95 percent or more of the sulfur is
generally converted to sulfur dioxide (SO ) under standard temperature conditions.
The Technology
FGD can be characterized into wet & spray dry scrubbing, wet
sulfuric acid process, SNOX ue gas desulfurization and dry sorbent
injection system based on methods of desulfurization. Most FGD systems
employ two stages: one for y ash removal and the other
for SO removal. In wet scrubbing systems, the ue gas normally passes
first through a y ash removal device, either an electrostatic
2 precipitator or a baghouse, and then into the SO -absorber. However,
in dry injection or spray drying operations, the SO is first reacted with the lime, and
then the ue gas passes through a particulate control device. Another important design
consideration associated with wet FGD systems is that the ue gas exiting the absorber is
saturated with water and still contains some SO . These gases are highly corrosive to any
downstream equipment such as fans, ducts, and stacks. Two methods that may minimize
corrosion are: (1) reheating the gases to above their dew point, or (2) using materials of
construction and designs that allow equipment to withstand the corrosive conditions. Both
alternatives are expensive. Engineers determine which method to use on a site-by-site
basis. Wet FGD systems are widely used in comparison to dry FGD and are expected to
maintain dominance over the forecast period owing to high efficiency and low maintenance.
Applications
Application segments of ue gas desulfurization market include new FGD
systems and reagents & replacements. Increasing electricity demand in emerging
economies such as China and India owing to rapid industrialization and urbanization is
expected to increase the number of coal-r ed power plants. This, in addition to increasing
prevalence of airborne diseases, implementation of environmental laws and regulations, and
growing concerns over environmental pollution is expected to boost the demand for new FGD
systems in the market. The demand for reagents & replacements was primarily for repair
of parts such as pump impellers, nozzles, valves and lt er belts among others in
established FGD systems. The increasing use of reagents such as limestone, dibasic acid,
and sodium hydroxide is further expected to boost the growth of reagents &
replacements application segment in the market. Increasing demand for FGD systems from
chemicals, power generation, cement manufacturing, iron & steel, and many other
industries is also expected to fuel the FGD market, globally
Geography
Flue gas desulfurization market has witnessed a signicant growth in
recent years due to stringent government policies relating to emissions of harmful gases
in the environment. The global ue gas desulphurization (FGD) market is forecast to grow
from $9.6 billion in 2018 to $12 billion by 2024, exhibiting a CAGR of over 4% during
2019-2024, owing to the enforcement of various federal laws and regulations that mandate
SOx emitting industries to install air quality control equipment in their plants.
Regionally, Asia-Pacic is expected to exhibit the fastest growth in the
global ue gas desulphurization market during the forecast period, on the back of the
increasing demand for FGD systems from the growing industrial sectors such as cement and
metal smelting in countries like China and India. Moreover, alarming pollution levels and
stringent laws introduced by the governments to curb pollution in the region are also
anticipated to aid the Asia-Pacic FGD market growth in coming years.
Key Players
Some of the major companies in global ue gas desulfurization market
include Alstom S.A., Babcock & Wilcox, Siemens Energy, Thermax, Ducon Technologies
Inc., Hamon Research-Cottrell, Mitsubishi Heavy Industries, and Marsulex Environmental
Technologies. Other companies include China Boqi, Chiyoda Corporation, Hitachi Power
Systems America Ltd., Marsulex Environmental Technologies and Lonjing Environment
Technology Co. Ltd.
FGD in India
India satises most of her power requirement through thermal power.
Thermal power generation constitutes about 56.5 per cent of the total installed capacity
followed by renewable energy which is 21.2 per cent. Going forward, around 30 GW of
coal-based capacity is expected to be added over the next v e years largely led by
under-construction projects of state and central entities according to a Research by
CRISIL.
Indian coal is high in ash, but is low in sulphur. Indian coal contains
sulphur in the range of 0.25 per cent to 0.5 per cent. This range of sulphur content coal
produces SO in the range of 1,500-2,000 microgram per cubic metre of ue gas (mg/Nm_).
However, coal is also imported from Indonesia, Australia and South Africa for fuelling
thermal power plants. This imported coal is high in sulphur content while being low in
ash.
The government has focused on reduction of emissions from coal-based
thermal power plants in accordance with the Intended Nationally Determined Contributions
(INDCs) submitted to the United Nations Framework Convention on Climate Change (UNFCCC)
that has committed to curb emission intensity of its economy by 30-35 per cent from the
2005 level by 2030. Accordingly, the Ministry of Environment, Forest and Climate Change
(MoEFCC), has issued notication no: S.O.3305(E) titled 'Environmental
(Protection) Amendment rules, 2015 dated 7.12.2015 with the objective
of reducing emissions of suspended particulate matter (SPM), SOx, NOx and mercury at
thermal power plants (TPPs). With the MoEFCC order, it has become compulsory to install
Flue Gas Desulphurisation (FGD) system in the existing and upcoming thermal power plants
to curb SOx emissions.
The Ministry of Environment, Forest and Climate Change (MoEFCC), has
issued notication no: G.S.R. 682 (E ) titled 'Environmental (Protection) Second Amendment
Rules, 2022 dated 5th September 2022 with the objective of reducing emissions of SO at
thermal power plants (TPPs). This Notication has categorised the Thermal Power Plants into
Three groups based on the Location /Area and x ed timelines for compliance for SO emission
as Dec 2024, Dec 2025 and Dec 2026 respectively. The non-complying units have to be
retired. Until then the Non-compliant units have to pay Environmental Compensation ranging
from 0.20 paise to 0.40 paise per unit.
The above Notication has left the power industry no other option but to
go for Air Pollution Control Systems (FGD), which is the
core technology of Ducon.
Ducon and FGD
Globally, Ducon has supplied wet FGD systems on over 20,000 MW of
combined power plant capacity. Ducon FGD systems can achieve over 99% sulfur dioxide
removal efficiency. Ducon Flue Gas Desulfurization systems can also recover up to 90% of
oxidized mercury in the ue gas. Ducon caters to the industry with its multiple FGD
technologies like Wet Lime, Sea Water, Dry etc.
Depending upon the reagent utilized, Ducon can select a packed tower, a
spray tower or a Ventri-Rod Absorber (VRA ) (a proprietary Environeering unit) for the wet
FGD application. For Dry Flue Gas Desulfurization systems, Ducon uses its proprietary
two-uid nozzle DRX-25 to atomize feed slurry in the spray reactor. Ducon can also provide
a Circulating Reactor Dry FGD System suitable for applications of upto 3% sulfur coal and
by utilizing dry lime, it can provide upto 97% SO removal efficiency. Ducon provides
either bag house lt er or Electrostatic Precipitator for duct collection downstream. Ducon
works with reputable vendors to provide Gas-to-Gas heat exchangers, fans, controls, and
reagent handling & feeding systems.
DUCON, being pioneers of FGD in India, is better placed than anybody
else to grab the opportunities in the current scenario. Considering the massive inux of
FGD t enders, DUCON has decided to capitalize on the maximum FGD project opportunities by
either sole bidding on smaller & medium sized projects or joint bidding with another
reputable EPC company on large FGD projects. With this strategy, DUCON has been bidding on
extensive number of FGD projects both small and medium size projects independently and
large projects via joint bidding.
Ducon has the capability to provide a complete global turnkey
installations including e uent treatment systems. Milestone Projects With many rsts in its
stride, Ducon is rightly regarded as the pioneers of FGD in India.
a. Ducon has installed India's first Sea water FGD system with 100% of
ue gas, for 2 X 250 MW Dahanu Thermal Power Station for Reliance Energy Ltd. This unit
consistently ranks among the cleanest as well as the most reliable power generating
station in India. This project also disproved the notion that energy production and
environmental protection are mutually exclusive.
b. Ducon is also credited with providing India's first Wet limestone
FGD system on coal r ed power plant with production of saleable Gypsum for 2 x 600 MW
Udupi Thermal Power Station, Karnataka. Today this unit has become benchmark installation
for those desirous of installing FGD systems in India.
c. India's first ever Dual Alkali Scrubber for Sterlite Copper,
Toothukudi, Tamil nadu is provided by Ducon
d. India's first ever FGD system for Glass Furnace at Saint Gobain
Glass, Sriperumbudur, Tamil nadu is installed by Ducon.
DRY BULK MATERIAL HANDLING SYSTEM
The correct storage, extraction and the selection of suitable
transportation systems is becoming increasingly important for power plant owners. This is
particularly of great signicanc e wherever a high service life, few to no interruptions,
high through puts and the lowest possible power consumptions are in demand.
Ducon with its technology specializes in the Design, supply,
installation of complete turnkey facilities for Bulk Material Handling and Pneumatic
Conveying Systems. Ducon supplies systems to unload, store, reclaim, weigh and sometimes
process materials of all kinds of Power, Cement, Steel, Alumina, Chemical and
Petrochemical industries. Where there is a product to move, Ducon has the product to move
it.
· Pneumatic Conveying Systems (Lean and Dense Phase)
· Mechanical conveying systems
· Discharge systems for Silos and Hoppers
· Process of Bulk materials (Crushing and Grinding)
· Big bag lling and discharge systems
· Transhipment systems (Rail Wagon and Tanker Loading and
Unloading system)
Ash handling systems for Power Generation Industry
The industry's main applications are the removal of ash from boiler and
lt er systems. Course ash / Fly ash collected at Economizer / Air Pre Heater / Duct
Hoppers / ESP hoppers is pneumatically conveyed to intermediate silos and to remote silos.
Ducon has the capability and technology to design the most efficient dense phase conveying
system with capacity as high as 300 TPH and conveying distance in excess of 1500m.
DU-PUMP system
Ducon offers pressure pneumatic conveying system for conveying of
various powdery material like Cement, Clinker dust, Sand, Coal, Alumina, Bentonite, Fly
ash etc. DU-PUMP systems can operate at higher air to solid rations and it has many
advantages like positive pressure system, low velocity, less erosion of pipes and bends.
DU-SLIDE conveyors
DU-SLIDE Conveyors are used to convey the material from one point to
another via air. It is ideal for materials such as Fly Ash, Cement, Hydrated Lime,
Alumina, Barites and Flour etc. The aeration of the material causes it to act like a uid
and gently slide along the gradual slope of the slide.
DU-SILO Fluidizer
Ducon provides material extraction systems for at button and conical
bottom silos for using reverse udiz ed cones and open- top-slide conveyors. The centre
cone is udiz ed constantly whereas the radial side conveyors on silo bottom are operated
sequentially for systematic extraction of material from silo.
As an EPC company, Ducon has executed multiple Dry Bulk Material
Handling systems over the last One decade. Ducon is also credited with India's Largest
Material Handling system in an Aluminium Smelter at Hindalco Industries Limited, Aditya
Aluminium Unit, Lapanga, Orissa.
RURAL AND URBAN ELECTRIFICATION PROJECTS
In December 2014, the Ministry of Power launched the Deen Dayal Gram
Jyoti Yojana (DDGJY) which subsumed RGGVY. The main object of the scheme was to ensure
100% rural electrication in a targeted manner. It also involved improving sub-transmission
and distribution infrastructure in rural areas.
In 2015, the Central Government launched the Integrated Power
Distribution Scheme (IPDS) with the objective to provide 24/7 power for all. One of the
agship programmes of the Ministry of Power, IPDS aims at strengthening of sub-transmission
network, and also the metering, IT application, Customer care services and the completion
of the ongoing works of Restructured Accelerated Power Development and completion of the
Reforms Program (RAPDRP).
The new Saubhagya Scheme (Pradhan Mantri Sahaj Bijli Har Ghar Yojana)
seeks to ensure universal household electrication, that
is, in both rural and urban areas. Under this scheme, the identied poor
households will get free electricity connections.
Ducon is executing Rural Electrication under DDGJY scheme and Urban
Electrication under IPDS scheme. This is the new segment which Ducon has diversied int o.
The projects involve, Construction of new 33 / 11KVA sub-stations, Augmentation of
33/11KVA sub-stations, New 33 KV lines, New 11 KV lines, Metering, etc. Your company plans
to expand the volume of this segment in future.
Strengths
The strengths have enabled your Company to successfully articulate its
various differentiated value propositions in the markets in
which it operates. The inherent strength of your Company derives from
its absolute belief in sound, sustainable business practices and an ability to
continuously address the diverse needs of its customers. The strategic objective of the
company is to build a sustainable organization that remains relevant to the agenda of the
clients, while generating protable growth for the investors. In order to do this, the
company will apply the priorities of 'renew' and 'new' to our own business and cascade it
to everything we do.
The Company provides complete solutions in its EPC segments. The
strength of your Company is its core technology FGD, for which it is known and of course
the EPC segment of Bulk Material Handling. With many successful installations in place,
your company has the requisite expertise, dedicated group of talented Engineers and other
professionals who drive its business and relationships with its business partners and
manage its support functions. Having catered to the needs of the large corporates in
India, your company has been receiving repeat orders over the years and expects it only to
move upwards. The Company expands existing client relationships by providing them with a
broad set of end-to-end service offerings and increases the size, nature and number of
projects they do with them. The strategy is to engage with these clients on a regular
basis.
Further, using the Lean strategies, your company has been able to
identify the areas of improvements, re-design the worko ws, and eliminate the unnecessary
elements. The impact is seen in the operational efficiency and reec ted in the nancials of
your company. We believe our strong brand, robust quality process and our access to
skilled talent base at lower costs of providing services to places us in a unique position
to take advantage of the opportunities available.
Quality
Your company continues to strive towards operational and delivery
excellences with a renewed focus on the path of business excellence. Customer Satisfaction
and excellence in quality are key elements for succeeding in this competitive market. Your
company has a full-edged QA / QC department headed by an Engineering professional with the
rank of Assistant General Manager. Pre-dened SOPs are followed in every stage of execution
of projects. In order to be able to respond quickly to the customers, your Company
continues with various internal initiatives to implement result-oriented quality
management models, compete effectively, improve organizational exibilit y and efficiency,
streamline internal processes across all its entities globally and institutionalize a
culture of continuous improvement.
A strong emphasis is based on quality in every aspect of the company's
activities. Several initiatives have been taken to implement result oriented quality
management models. In line with this philosophy we have designed our quality management
program and have dened several key parameters for measurement of quality levels to ensure
improvement in the quality of the deliverables.
In order to be able to respond quickly to the customers, your Company
continues with various internal initiatives to compete effectively, improve organizational
exibilit y and efficiency, streamline internal processes and institutionalize a culture of
continuous improvement. The system comprises well dened organization structure,
pre-identied authority levels and documented policy guidelines and manuals for delegation
of authority.
Review of key business processes like business planning, reporting and
communication has been done to make them more effective in meeting business objectives.
Moving forward, your company shall continue to further strengthen its processes by
adopting best-in-class standards.
Opportunities and threats
Opportunities:
Our diversication strategy continues to provide us with new growth
opportunities. With our experience and expertise, we believe that we are strategically
placed in our business segments. Similarly the management decision of having suitable
business tie up will help us to capture maximum opportunities in the recently revived FGD
segment. Looking towards the future, your Company will remain focused on agility,
innovation and operational excellence. Focusing on strategic verticals and geographies
will also lead to an increase in the list of potential customer base.
Threats:
Competition is the main threat to most EPC companies, considering the
aggressive pricing by the new entrants, changes in technology and markets. Changes in
government policy or regulations / legislation etc also brings challenges and treats to
the smooth functioning of the Company. As companies recognize the critical role of
technology as an enabler to their business, the number of in-house technology centers of
large enterprises as well as the number of new entrants in the market increases.
Since the EPC sector is exposed to high attrition rate due to more
opportunities available in market for the employee, retaining existing talent pool and
attracting new talented manpower is a major risk to the Company. The Company has initiated
various measures to enhance the retention of employees during the year which includes,
employee engagement surveys, transparent Performance Management System, ESOP etc to
maintain employee-friendly culture in the organization.
Risks and Concerns
Important factors that could inuenc e the Company's operations include
change in government regulations, tax laws, increased competition, economic and political
developments. The Company's objectives and expectations may be forward looking within the
meaning of applicable laws and regulations. The competition from large international and
Indian companies is increasing in the domestic market space. Actual results may differ
materially from those expressed.
The productive life of resources is shrinking and the regulatory
requirement in the areas of Air Pollution Control is tightening, thereby increasing the
level of investment needed to meet the market requirements. These, while provide huge
growth opportunities to your Company, also exposes it to increased competition. In the EPC
industry, the ability to execute projects, build and maintain client partnerships and to
achieve forecasted operating and financial results are signicantly inuenc ed by the
organization's success in hiring, training and retaining highly skilled Engineering
professionals. The market continues to be highly competitive for attracting and retaining
Engineering professionals &this is compounded by the ever changing constraints around
talent mobility primarily on account of regulatory requirements and also the evolving
value propositions for a range of clients across geographies.
Internal control systems and their adequacy
The Company's well-dened organizational structure, documented policy
guidelines, dened authority matrix and internal controls ensure efficiency of operations,
compliance with internal policies and applicable laws and regulations as well as
protection of resources.
Your Company has an effective internal control and risk mitigation
system, which are constantly assessed and strengthened with new/revised standards
operating procedures. The Company has the robust Management Information System, which is
an integral part of the control mechanism. The Company has a well-dened delegation of
power with authority limits for approving revenue as well as expenditure and processing
payments. The Company's internal control system is commensurate with its size, scale and
complexities of its operations. The Company has made the employees responsible for
establishing expectations and seeking feedback at every role that is assigned. The
employees have been enabled to inuenc e their network of peers to co-own goals. This has
helped enable cross functional collaboration and interlock. Employees can give and receive
help on their goals by making them public and also express their likelihood of reaching
their goals. The company has put in place adequate systems of internal control
commensurate with its size and the nature of its business. These systems provide a
reasonable assurance in respect of financial and operational information, compliance with
both applicable statutes, & corporate policies and safeguarding of the assets of the
company.
Ducon Infratechonologies Limited has an audit committee, the details of
which have been provided in the corporate governance report. The Audit Committee of the
Board of Directors actively reviews the adequacy and effectiveness of the internal control
systems and suggest improvements to strengthen the same.
3. Dividend:
With a view to plough back the prots of the Company and keeping in mind
the expansion of business activities, the Board of
Directors considers it prudent and recommends not declaring any
dividend for the year ended March 31, 2023.
4. Transfer of Unclaimed Dividend to Investor Education and Protection
Fund:
The Provisions of Section 125 (2) of the Companies Act, 2013 do not
apply as there was no dividend declared and paid last year.
5. Transfer to reserves:
The Company has not transferred any amount to reserves.
6. Material changes and commitments, if any, affecting the financial
position of the Company which have occurred between the end of the financial year of the
Company to which the financial statements relate and the date of the report:
There were no material changes and commitments, affecting the financial
position of the Company which has occurred between the end of the financial year of the
Company and the date of the Directors' report. However, the following changes took place
during the financial year under review:
1. The Company had converted and allotted balance 3,06,34,400 Warrants
into Equity shares having face value Rs. 1/- each at an
st
issue price of Rs. 5/- each (including a premium of Rs. 4/- each) on 1
April, 2022 to Mr. Arun Govil (DIN: 01914619), Managing Director and Promoter of the
Company, on preferential basis. The object of Preferential issue was to convert the
unsecured loan into Warrants convertible into Equity Shares and thereby to reduce the
amount of outstanding liabilities of the Company and to increase the Equity amount of the
Company. There is no deviation/variation in utilization of funds for which it was raised.
2. The Company had also issued 2,36,30,952 Equity Shares of Rs. 1/-
(Rupee One) each on account of Bonus issue approved vide
th rd
Board Resolution passed on 25 February, 2022 and Ordinary Resolution
passed on 3 April, 2022 through Postal Ballot in the
th
ratio of 1:10 i.e. One Bonus Equity share for every Ten Equity shares
held in the Company as on record date of 19 April, 2022.
The Company had made an application for seeking in-principal, listing
and trading approvals for the above bonus issue to the
National Stock Exchange of India Limited (NSE) & BSE Limited (BSE)
and the Company received the in-principle approval from
th th th
NSE & BSE vide letter dated 12 April, 2022; 8 April, 2022
respectively and received Listing & Trading approval on 28 April,
st
2022 & 21 April, 2022 from NSE & BSE respectively. Further
information pertaining to Bonus Issue can be accessed on the
Company's website at https://duconinfra.co.in/investors/
7. Details of signican t and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Company's operations in
future:
No signicant and material orders were passed by the regulators or
courts or tribunals impacting the going concern status and
Company's operations in future.
8. Change in nature of Business Activity of the Company:
There was no change in the nature of business activity of the Company.
9. Details of Holding/Subsidiary/Joint Ventures/Associate Companies:
The Company has a Wholly-owned Unlisted Material Subsidiary at USA
named "Ducon Combustion Equipment Inc." as on
th
31.03.2023. The same was incorporated on 4 December, 2017 at New York,
USA with the objects to sell diversied combustion and
power products.
The Policy for determining Material Subsidiaries as formulated in line
with the requirements of the Act and the Listing Regulations,
and the same can be accessed on the Company's website at
https://duconinfra.co.in/investors
Pursuant to Section 129 of the Act read with Rule 5 to the Companies
(Accounts) Rules, 2014, the statement containing salient
features of the nancials of Subsidiary Company in Form AOC - 1 is
annexed herewith this Report as Annexure-I.
10. Explanation or comments on Qualica tions, reservations or adverse
remarks made by Auditors and the Practicing
Company Secretary in their Reports:
st
A. The Auditors' Report to the members on the Accounts of the Company
for the financial year ended 31 March, 2023 does not contain any qualications ,
reservations or adverse remarks. However, the Standalone and Consolidated Audit Report
contains the following emphasis of matters:
i) The Company has made investments in equity shares of a private
limited company aggregating to Rs. 500.00 lakhs as on March 31, 2023 reported under
Investments in Non-Current Assets. The investments are to be measured at fair value in the
statement of financial position as per requirements of Indian Accounting Standard109.
However, keeping in view their long term business synergy and potential, the management
has been decided to value such investments at cost for the
year ended March 31, 2023.
Board's Response: The management is of the opinion, keeping in view
their long term business synergy and potential, it
has been decided to value such investments at cost for the year ended
March 31, 2023.
ii) The overseas sales and overseas purchases of the Company transacted
during the year, are in the nature of "out and out supply" of goods which are
exempted from GST asper the applicable provisions and therefore the same is not disclosed
in the monthly GST returns led by the Company, however the same is disclosed in Annual GST
Return (GSTR-9 / 9C) led by the Company.
Board's Response: The management states that it will be ling the GST
Annual Returns for FY 2022-23 as per the relevant
provisions of GST laws and the disclosure, if any, will be done by the
Company in compliance with the said statute.
B. The Secretarial Audit Report, contains the following observation
from Secretarial Auditor-
st
The Secretarial Auditor Report of the Company for the financial year
ended 31 March, 2023 has contains following
qualications , observations or adverse remarks:
th
i. The Company had received letters from National Stock Exchange of
India Limited and BSE Limited on 27 April, 2022
regarding levitation of ne of Rs. 80,000/- (including GST) per exchange
pertaining to Regulation 295 of SEBI (ICDR)
Regulations, 2018 for delay of 4 day in completion of Bonus Issue. The
Company had paid Rs. 80,000/- (plus GST) on
th th
25 April, 2022 and 27 April, 2022. The Company has led for waiver
application to both the exchange and are awaiting for their reply.
l Clarication sought by NSE under Regulation 17(1) of SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 relating to Composition of Board of Directors
l Clarication sought by NSE with regards to mis-match in details of
pledge holding of the Promoter provided by
depositories
l Discrepancies observed by BSE that (i) Post Event holding of
encumbered shares not tallying; and Promoter holding already encumbered are exceeded total
holding in the disclosure under Regulation 31 of SEBI (SAST) Regulations, 2011 submitted
by the listed entity.
Board Response: Management has taken accurate decision and has provided
resolution to the aforesaid clarication(s) and submit the revised disclosures as required
within the stipulated time frame with the Stock Exchanges viz; BSE & NSE respectively.
11. Directors and Key Managerial Personnel:
The Board of the Company is comprised of eminent persons with proven
competence and integrity. Besides the experience, strong financial acumen, strategic
astuteness, and leadership qualities, they have a signicant degree of commitment towards
the Company and devote adequate time to the meetings and preparation.
The Board composition changed during the year on account of following:
l Mr. Arun Govil (DIN-01914619), was re-appointed as Managing Directors
of the Company for a further period of 3 years at the
th
Annual General meeting held on 30 September, 2022.
l Mr. Harish Shetty (DIN: 07144684) was appointed as the Executive
Whole Time Director and Chief Financial Officer of the
th
Company for a period of 3 years through Special Resolution passed at
the Annual General meeting held on 30 September,
2022.
l Mr. Chandrasekhar Ganesan (DIN-07144708) was appointed as the
Executive Whole Time Director of the Company for a period
th
of 3 years through Special Resolution passed at the Annual General
meeting held on 30 September, 2022 th
l Ms. Ratna Jhaveri (DIN-07732263) was appointed as an Independent
Director for a first term of 5 years at the AGM held on 29
th
September, 2017 and was reappointed for the second term of v e years at
the AGM held on 30 September, 2022.
l Mr. Maruti Deore's (DIN: 02780312), designation was changed from
Non-Executive, Independent Director to Non-Executive,
th
Non-Independent Director on 14 November, 2022.
st
l Ms. Reema Shah (DIN:09487913), resigned from the Post of
Non-Executive, Independent Director with effect from 1 December, 2022 and simultaneously
from the membership of Nomination & Remuneration Committee, Corporate Social
Responsibility Committee and from the Chairmanship of Audit Committee, Stakeholders
Relationship Committee and Risk Management Committee.
l Mr. Sanjay Vasaikar (DIN:03213340) was appointed as an Additional
Director (Non-Executive, Independent) of the Company
th
w.e.f. 28 February, 2023 and simultaneously as a member of Audit
Committee, Stakeholder and Relationship Committee and
Nomination & Remuneration Committee and he resigned from the post
of Additional Director (Non-Executive, Independent)
th
of the Company with effect from 20 April, 2023 and simultaneously from
the membership of Audit Committee, Stakeholder &
Relationship Committee and Nomination & Remuneration Committee.
l Ms. Apeksha Agiwal (DIN: 10083559) appointed as an Additional
Director (Non-Executive, Independent) of the Company w.e.f.
th
17 July, 2023 and simultaneously as a member of Audit Committee,
Stakeholder and Relationship Committee, Nomination & Remuneration Committee and
Corporate Social Responsibility Committee of the Company.
In the opinion of the Board, all the directors, as well as the
directors appointed / re-appointed during the year possess the
requisite qualications , experience and expertise and hold high
standards of integrity.
The above appointments by the Board of Directors are based on the
recommendation of the Nomination and Remuneration Committee. The Company has received Form
DIR-8 and Form DIR-2 from above Directors, wherever required. Further, all the Directors
are eligible for appointment/ re-appointment as the case may be.
Pursuant to the provisions of Section 203 of the Act, there has been no
change in the key managerial personnel during the year.
12. Auditors:
Statutory Auditor: Pursuant to the provisions of Section 139 of the Act
and the rules framed thereunder, M/s. Hitesh Shah & Associates, Chartered Accountants,
(ICAI Firm Registration No. 107416W) had been appointed as the statutory auditors of the
Company, for a term of v e consecutive years, at the AGM held in the year 2022. The
Companies (Amendment) Act, 2017, has waived the requirement for ratication of the
appointment of auditor by the shareholders at every Annual General Meeting with
e ect from May 07, 2018. Hence, the approval of the members is not
being sought for the re-appointment of the Auditors in line
th th
with the resolution passed for their appointment at the 13 AGM held on
September 30 , 2022.
Auditors have conrmed that they are not disqualied to act as Auditors
and are eligible to hold officeas Auditors of your Company.
They have also conrmed that they hold a valid peer review certicat e as
prescribed under Listing Regulations.
Secretarial auditor: GMS & Co., Company Secretaries in Practice
(ACS: 32581, CP: 11953), are appointed as Secretarial Auditor of the
Company for financial year 2023-2024, as required under Section 204 of
the Companies Act, 2013 and Rules thereunder.
13. Corporate Governance:
Your Company has always practiced sound corporate governance and takes
necessary actions at appropriate times for meeting stakeholders' expectations while
continuing to comply with the mandatory provisions of corporate governance. As required
under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the report
on Management Discussion and Analysis, Corporate Governance as well as the Statutory
Auditors' Certicat e regarding compliance of conditions of Corporate Governance forms part
of the Annual Report.
14. Board policies:
The details of the policies approved and adopted by the Board as
required under the Companies Act, 2013 and Securities and
Exchange Board of India (SEBI) regulations are available at Company's
website at https://duconinfra.co.in/investors/
15. Code of Conduct for Directors and Senior Management:
The Directors and members of Senior Management have a rmed compliance
with the Code of Conduct for Directors and Senior Management of the Company. The copies of
Code of Conduct as applicable to the Executive Directors (including Senior Management of
the Company) and Non-Executive Directors are uploaded on the website of the Company
www.duconinfra.co.in.
16. Familiarization Program for Independent Directors:
The Company has a practice of conducting familiarization program of the
independent directors as detailed in the Corporate
Governance Report which forms part of the Annual Report.
17. Particulars of the Employees:
The information as required under Section 197 of the Act and rule 5(2)
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 made
there-under is not applicable as none of the employees are in receipt of remuneration
which exceeds the limits specied under the said rules.
18. Documents Placed on the Website:
The following documents have been placed on the website in compliance
with the Act and SEBI Regulations and further details &
information available at https://duconinfra.co.in/investors/
l Financial statements of the Company along with relevant documents. l
Details of Vigil mechanism for directors and employees to report genuine concerns as per
proviso to Section 177(10). l The terms and conditions of appointment of independent
directors as per Schedule IV to the act. l Latest Corporate Announcements l Annual Reports
l Shareholding Pattern l Code of Conduct l Corporate Governance l Nomination and
Remuneration Policy l Materiality Policy under Regulation 30 of SEBI (LODR) Regulations,
2015 l Credit Rating
19. Human Resource Management (Material developments in Human
resources/Industrial Relations front, including
number of people employed):
Your Company has HR policy that elaborates on each aspect of human
resource management including recruitment, employee development & training, sta
welfare, administration services & recreation events. The Company offers a growth
environment along with monetary benets in line with industry standards. The Company has a
number of employee initiatives to attract, retain and develop talent in the organization.
Your Company's core strength is its people. To bring in more business focus and total
ownership, your Company's business organizational structure has been redesigned. This is
expected to allow better growth and reward opportunities for talent, while simultaneously
delivering better value to shareholders. Your Company encourages regular training and
development program. Continuous training is imparted in advanced technologies, managerial
and soft skills for the employees to enhance their skill-sets in alignment with their
respective roles. The major thrust continues in the e ort to bring about measurable change
in training coverage and effectiveness, increasing the Leadership and Development
opportunities for every sta member.
Employee Retention is a key focus area. The Company has initiated
various measures to enhance the retention of employees during the year which includes,
employee engagement surveys, transparent Performance Management System, and connect to
maintain employee-friendly culture in the organization. Company's people centric focus
providing an open work environment fostering continuous improvement and development helped
several employees realize their career aspirations during the year.
Ducon has continually adopted structures that help attract best
external talent and promote internal talent to higher roles and
responsibilities.
20. Fixed Deposits:
Your Company has not accepted any x ed deposits and, as such, no amount
of principal or interest was outstanding as on the
date of the Balance Sheet.
21. Directors Responsibility Statement:
Pursuant to the provisions of clause (c) of sub-section (3) of Section
134 of the Companies Act, 2013 the Directors based on the
information and representations received from the operating management
conrm that:
a. In the preparation of the annual accounts, the applicable accounting
standards had been followed along with no material
departures;
b. The Directors had 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 a airs of the Company at the end of the
financial year and of the prot of the Company for that period;
c. The Directors had taken proper and sufficient care, to the best of
their knowledge and ability, for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities;
d. The Directors had prepared the annual accounts on a going concern
basis; and
e. The directors had laid down internal financial controls to be
followed by the Company and that such internal nancial
controls are adequate and were operating effectively.
f. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such
systems were adequate and operating effectively.
22. Share Capital:
st
The paid up Equity Share Capital as on 31 March, 2023 is Rs.
25,99,40,469/- divided into 25,99,40,469 Equity shares of Rs.1/- each.
During the year, the Authorised Share Capital of the Company has been
increased from Rs. 25,00,00,000/- divided into
25,00,00,000 Equity Shares of Rs. 1/- (Rupee One) each to Rs.
30,00,00,000/- divided into 30,00,00,000 Equity Shares of Rs. 1/-
rd
(Rupee One) each vide Special Resolution passed on 3 April, 2022
through Postal Ballot.
23. Shares: a. Buyback of Securities: The Company has not brought back
any of the securities during the year under review. b. Sweat Equity: The Company has not
issued any sweat equity shares during the year under review.
c. Employee Stock Option Plan: The Company had passed Resolution for
providing Stock Options to the employees of the Company through postal ballot. However the
same is yet to be implemented for which necessary approvals have been taken from
regulatory authorities and Exchanges.
d. Preferential allotment & Bonus Issue made during the financial
year under review:
i. Preferential Allotment:
st
The Company had allotted 3,06,34,400 Equity shares of face value Rs.
1/- each on 1 April, 2022 on account of
conversion of Balance 3,06,34,400 Warrants allotted to Mr. Arun Govil
(DIN: 01914619), Managing Director and
st
Promoter of the Company, on preferential basis, on 1 February, 2022, by
way of conversion of outstanding unsecured
loan.
ii. Bonus Issue:
The Company had issued 23630952 Equity Shares of Rs. 1/- (Rupee One)
each on account of Bonus issue approved
th rd
vide Board Resolution passed on 25 February, 2022 and Ordinary
Resolution passed on 3 April, 2022 through Postal
Ballot in the ratio of 1:10 i.e. One Bonus Equity share for every Ten
Equity shares held in the Company as on record date
th
of 19 April, 2022.
The Company had made an application for seeking in-principal, listing
and trading approvals for the above bonus issue to the
National Stock Exchange of India Limited (NSE) & BSE Limited (BSE)
and the Company received the in-principle approval from
th th th
NSE& BSE vide letter dated 12 April, 2022; 8 April, 2022
respectively and received Listing & Trading approval on 28 April, 2022 &
st
21 April, 2022 from NSE & BSE respectively. Further information
pertaining to Bonus Issue can be accessed on the Company's website at
https://duconinfra.co.in/investors/
24. Board 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 Committee.
25. Number of Meetings of the Board:
During the year Seven Board Meetings were held. The details of the
Board and various Committee meetings are given in the
Corporate Governance Report.
26. Declaration by an Independent Director(s):
A declaration has been received by an Independent Director(s) that they
meet the criteria of independence as provided in subsection (6) of Section 149 of the
Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirements)
Regulations, 2015. Further, there has been no change in the circumstances which may affect
their status as independent director during the year.
27. Remuneration Policy:
The Board has on the recommendation of the Nomination &
Remuneration Committee framed a policy for selection and
appointment of Directors, Senior Management and their remuneration.
Nomination remuneration and compensation committee policy (NRC
Committee):
The NRC Committee of the Company shall be formed by the Board of
Directors of the Company out of its Board members. The NRC
Committee shall consist of minimum three non-executive directors out of
which two shall be independent directors. The Chairperson of the Company may be appointed
as a member of the NRC Committee but shall not chair the NRC Committee. The Chairman of
the NRC Committee shall be an independent director. No member of the NRC Committee shall
have a relationship that may interfere with his independence from management and the
Company or with the exercise of his duties as a NRC committee member. The NRC Committee
may invite such of the executives of the Company, as it considers appropriate (and
particularly the Managing Director) to be present at the meetings of the NRC committee,
but on occasions it may also meet without the presence of any executives of the Company.
The Company Secretary shall act as the secretary to the NRC Committee.
28. Committees of Board:
With an objective to strengthen the governance standards and to comply
with the applicable statutory provisions, the Board has constituted various committees.
Details of such Committees constituted by the Board are given in the Corporate Governance
Report, which forms part of this Annual Report.
29. Risk Management:
Risks are events, situations or circumstances which may lead to
negative consequences on the Company's businesses. Risk management is a structured
approach to manage uncertainty. As a formal roll-out, all business divisions and corporate
functions will embrace Risk Management Policy and Guidelines and make use of these in
their decision making. Key business risks and their mitigation are considered in the
annual/strategic business plans and in periodic management reviews. The risk management
process in our multi-business, multi-site operations, over the period of time will become
embedded into the Company's business
systems and processes, such that our responses to risks remain current
and dynamic.
The Risk Management is overseen by the Audit Committee of the Company
on a continuous basis. The Committee oversees Company's process and policies for
determining risk tolerance and review management's measurement and comparison of overall
risk tolerance to established levels. Major risks identied by the businesses and functions
are systematically addressed through mitigating actions on a continuous basis. For
details, please refer to the Management Discussion and Analysis report which form part of
the Board Report.
30 Vigil Mechanism:
Your Company has established a mechanism called 'Vigil Mechanism' for
Directors and employees to report the unethical behavior, actual or suspected, fraud or
violation of the Company's code of conduct or ethics policy and provides safeguards
against victimization of employees who avail the mechanism. The Vigil Mechanism Policy has
been uploaded on the website of the Company at www.duconinfra.co.in.
31. Corporate Social Responsibility:
st
The Company was required to spend towards CSR as per Audited gur es as
on 31 March, 2023 and hence the Report on CSR is
attached herewith as Annexure-II.
32. Credit Rating:
Your Directors have pleasure to inform that Acuite had carried out a
credit rating assessment of the Company both for short term and long term bank facilities
in compliance with norms implemented by Reserve Bank of India for all banking facilities
which enables the Company to access banking services at low costs. Acuite Ratings has
assigned BB; Stable rea rmed rating to our Company for Long Term Bank facilities for a
total amount of Rs 57.00 Crore and Acquite A4+ rea rmed rating has also assigned for the
Short term bank facilities of the Company up to Rs. 55.00 Crore.
33. Particulars of Remuneration:
The information required under Section 197 of the Act and the Rules
made there-under, in respect of employees of the Company,
is given under Annexure-III.
34. Internal Audit & Controls:
The Company has in place proper and adequate internal control systems
commensurate with the nature of its business, and size and complexity of its operations.
Internal Auditors findings are discussed with the process owners and suitable corrective
actions taken as per the directions of Audit Committee on an ongoing basis to improve
efficiency in operations. During the year, the Company continued to implement their
suggestions and recommendations to improve the control environment. Their scope of work
includes review of processes for safeguarding the assets of the Company, review of
operational efficiency, effectiveness of systems and processes, and assessing the internal
control strengths in all areas.
35. Extract of Annual Return:
The Annual Return as prepared under Section 92(3) of the Companies Act,
2013 and rule 12(1) of the Companies (Management
and Administration) Rules, 2014, is placed on website of the Company
i.e., www.duconinfra.co.in.
36. Secretarial Audit Report:
Pursuant to Section 204 of the Companies Act, 2013, the Company had
appointed Mr. Gaurang Shah, Practicing Company Secretary as its Secretarial Auditor to
conduct the Secretarial Audit of the Company for the F.Y 2022-2023. The Company provides
all the assistance and facilities to the Secretarial Auditor for conducting their audit.
Report of Secretarial Auditors for the F.Y 2022-2023 in Form MR-3 is annexed to this
report as Annexure-IV.
37. Particulars of Loans, Guarantees or Investments:
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given
in the notes to the Financial Statements.
38. Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered into by the
Company with related parties referred to in sub-section (1) of Section 188 of the
Companies Act, 2013 including certain arm's length transactions under third proviso
thereto have been disclosed in Form No. AOC-2 as Annexure-V.
39. Obligation of Company under the Sexual harassment of women at
workplace (Prevention, Prohibition and Redressal)
Act, 2013:
In order to prevent sexual harassment of women at work place, a new act
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013 has been notied . Your Company has adopted a policy for prevention of Sexual
Harassment of Women at workplace and has set up Committee for implementation of said
policy. During the year, the Company has not received any complaint of harassment.
40. Conservation of Energy, Technology Absorption, Research &
Development and Foreign Exchange Earnings and Outgo:
Information pursuant to Section 134(3)(m) of the Companies Act 2013
read with Rule 8(3) the Companies (Accounts) Rules, 2014
st
forming part of Directors' Report for the year ended 31 March, 2023 is
as under:
Conservation of Energy: The Company's operations involve low energy
consumption. However efforts to conserve and
optimize the use of energy through improved operational methods and
other means will continue.
Technology Absorption: The Technology available and utilized is
continuously being upgraded to improve overall performance
and productivity.
Research & Development: Your Company believes that research &
development is a continuous process for sustained corporate excellence. Our research &
development activities help us in product and service improvement, effective time
management and are focused to provide unique benets to our customers. Such methods do not
involve any specic cost burden to the Company.
Foreign Exchange Earnings : Rs. Nil (previous year Nil)
Foreign Exchange Outgo : Rs. Nil (previous year Nil)
41. Maintenance of cost records:
The Company was not required to maintain cost records under Section 148
of the Companies Act, 2013.
42. Compliance with Secretarial standards:
During the year under review, your Company has complied with the
applicable provisions of Secretarial Standard-1 and
Secretarial Standard-2 issued by the Institute of Company Secretaries
of India.
43. Report on frauds reported by Auditors under Section 143(12) of the
Companies Act, 2013:
The Auditors have not reported any frauds as required to be mentioned
under Section 143(12) of the Companies Act, 2013.
44. Details of applications, approved or pending under Insolvency and
Bankruptcy Code, 2016:
The Company, in the capacity of Financial Creditor, has not led any
applications with National Company Law Tribunal under the Insolvency and Bankruptcy Code,
2016 during the financial year 2022-23 for recovery of outstanding loans against any
customer being Corporate Debtor. Further, no application has been led with National
Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 against the Company
for recovery of any debt during the year under review.
45. Di erence in valuation done for One time settlement and valuation
done while taking a loan from Banks or other
nancial institutions:
The above clause is not applicable as no valuation was done during the
reporting period.
46. Consolidated Financial Statements:
There was no entity which became or ceased to be Subsidiary, Joint
Venture or Associate Company of the Company during the
st
nancial year ended 31 March, 2023. However, Ducon Combustion Equipment
Inc, Wholly Owned Subsidiary of the Company provides fuel gas distribution services and
clean technology. It is located in USA. As per the audited financial statements of Ducon
st
Combustion Equipment Inc. for the year ended 31 March, 2023, its total
income from operations and Net Prot was Rs. 8370.83 lakhs and Rs. 21.86 lakhs
respectively, on consolidated basis. Pursuant to Section 129 of the Act read with Rule 5
to the Companies (Accounts) Rules, 2014, the statement containing salient features of the
financial statement of Subsidiary Company in Form AOC - 1 forms part of this Annual
Report. The consolidated financial statements forming part of this Annual Report are
prepared in compliance with the applicable Indian Accounting Standards and Listing
Regulations. Pursuant to the provisions of Section 136 of the Act, this Annual Report is
available on the website of the Company https://www.ducon.co.in.
47. Acknowledgements:
Your Directors thank the Company's Investors, Clients, Vendors,
Bankers, Business and various governmental as well as regulatory
agencies for their continued support and condenc e in the management.
Your Directors wish to place on record their deep sense of appreciation
of the dedicated and sincere services rendered by employees at all levels during the year.
Your Company's consistent growth was made possible by their hard work, solidarity,
cooperation and support.
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