Ducon Tech Director Discussions


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 Indias 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 Indias 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. Indias first ever Dual Alkali Scrubber for Sterlite Copper, Toothukudi, Tamil nadu is provided by Ducon

d. Indias 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 industrys 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 Indias 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 companys 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 Companys operations include change in government regulations, tax laws, increased competition, economic and political developments. The Companys 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 organizations 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 Companys 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 Companys 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

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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

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Board Resolution passed on 25 February, 2022 and Ordinary Resolution passed on 3 April, 2022 through Postal Ballot in the

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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

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NSE & BSE vide letter dated 12 April, 2022; 8 April, 2022 respectively and received Listing & Trading approval on 28 April,

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2022 & 21 April, 2022 from NSE & BSE respectively. Further information pertaining to Bonus Issue can be accessed on the

Companys 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 Companys operations in future:

No signicant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and

Companys 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

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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 Companys 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:

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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.

Boards 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.

Boards 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-

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The Secretarial Auditor Report of the Company for the financial year ended 31 March, 2023 has contains following

qualications , observations or adverse remarks:

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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

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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

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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

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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

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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

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September, 2017 and was reappointed for the second term of v e years at the AGM held on 30 September, 2022.

l Mr. Maruti Deores (DIN: 02780312), designation was changed from Non-Executive, Independent Director to Non-Executive,

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Non-Independent Director on 14 November, 2022.

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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

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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)

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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.

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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

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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 Companys 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 Companys core strength is its people. To bring in more business focus and total ownership, your Companys 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. Companys 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:

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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/-

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(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:

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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

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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

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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

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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

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NSE& BSE vide letter dated 12 April, 2022; 8 April, 2022 respectively and received Listing & Trading approval on 28 April, 2022 &

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21 April, 2022 from NSE & BSE respectively. Further information pertaining to Bonus Issue can be accessed on the Companys 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 Companys 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 Companys 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 Companys process and policies for determining risk tolerance and review managements 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 Companys 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:

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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 arms 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

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forming part of Directors Report for the year ended 31 March, 2023 is as under:

Conservation of Energy: The Companys 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

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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

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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 Companys 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 Companys consistent growth was made possible by their hard work, solidarity, cooperation and support.