raised 25 interest rates and food and energy prices have come down, underlyingprice pressures are proving sticky, with labor markets tight in a number of economies.
More than a year after Russias invasion of Ukraine and the outbreak of more contagiousCOVID-19 variants, many economies are still absorbing the shocks. The recent tightening inglobal financial conditions is also hampering the recovery. As a result, many economiesare likely to experience slower growth in incomes in 2023, amid rising joblessness.Moreover, even with central banks having driven up interest rates to reduce inflation, theroad back to price stability could be long. Over the medium term, the prospects for growthnow seem dimmer than in decades.
Global economic activity remains resilient amidst the persistence of inflation atelevated levels, turmoil in the banking system in some advanced economies (AEs), tightfinancial conditions and lingering geopolitical hostilities. As per RBI Monetary Policy(April 2023), economic activity remained resilient in Q4FY23. The index of industrialproduction (IIP) expanded by 5.2% in January while the output of eight core industriesrose even faster by 8.9% in January and 6.0% in February, indicative of the strength ofindustrial activity. In the services sector, domestic air passenger traffic, port freighttraffic, e-way bills and toll collections posted healthy growth in Q4, while railwayfreight traffic registered a modest growth. Purchasing managers indices (PMIs) pointedtowards sustained expansion in both manufacturing and services in March 2023. The RBIsSurvey of Professional Forecasters conducted in March 2023 provides a median forecast ofGDP at 6.0% for 2023–24.
According to the provisional estimates released by the National Statistical Office(NSO) on May 31, 2023, Indias real gross domestic product (GDP) growth in 2022–23was 7.2% as compared to 9.1% in 2021–22. GDP at Constant (2011–12) Prices in Q42022–23 is estimated at Rs. 3.62 lakh crore, as against Rs. 1.12 lakh crore in Q42021–22, showing a growth of 6.1%. GDP at Current Prices in Q4 2022–23 isestimated at Rs. 1.82 lakh crore, as against Rs. 5.05 lakh crore in Q4 2021–22,showing a growth of 10.4%.
As per RBI report, Foreign Exchange Reserves increased from USD 532.66 billion as atend-September 2022 to USD 578.45 billion as at end-March 2023. Foreign exchange reservesin nominal terms (including valuation effects) decreased by US$ 44.6 billion duringApril-December 2022 as compared with increase of US$ 56.6 billion in the correspondingperiod of the preceding year.
The construction Industry in India is expected to reach $1.4 Tn by 2025. Under NationalInfrastructure Pipeline (NIP), India has an investment budget of $1.4 Tn oninfrastructure, which includes 24% on renewable energy, 18% on roads & highways, 17%on urban infrastructure, and 12% on railways. 35 Multimodal Logistics Parks (MMLPs) to bedeveloped at a total capital cost of $ 6.1 Bn, will cater to 50% of the freight movement.
In Budget 2023–24, capital investment outlay for infrastructure is being increasedby 33% to Rs. 0 lakh crore (US$ 122 billion), which would be 3.3% of GDP. The Indiangovernment has introduced various formats in order to attract private investments,especially in roads and highways, airports, industrial parks and higher education andskill development sectors. The ‘Green Energy Project is an initiative to make IndianRailways environment friendly by focusing on renewable sources of energy. In February2023, the network planning group (NPG) under the PM Gati Shakti initiative has approvedthree railway projects related to doubling of lines between Aurangabad and Ankai inMaharashtra. International Monetary Fund (IMF) in its World Economic Outlook (April 2023),estimated the Indian GDP growth of 5.9% in 2023 and 6.3% in 2024, which is well above theglobal GDP growth of 2.8% and 3.0% respectively.
Infrastructure plays a huge role in propelling other industries and Indias overalldevelopment. The government, therefore, focuses on the development of infrastructure andconstruction services through focused policies such as open FDI norms, large budgetallocation to the infrastructure sector, smart cities mission, etc. PM launches GatiShakti Master Plan to integrate different modes of transportation and increase the speedof infrastructure development in India. India is committed to build modern infrastructurefor the 21st century. The logistics cost in India is 13% to the GDP as compared 8% in therest of the world, making it difficult for Indian exports to compete globally. Thegovernment is working to bring down logistics cost to GDP to 7.5% from the current 13%.Investments valued at USD 965.5 mn will be required by the infrastructure sector by 2040.100% FDI through the automatic route is permitted in Construction of roads or bridges andConstruction of city and regional level infrastructure projects. Indian Railways hasprepared National Railway Plan (NRP) to create a ‘future ready Railway system by2030. Indian Railways estimated CAPEX of Rs. 5.02 Lakh Crore excluding Rolling Stock ofRs. 3.18 Lakh Crore under NRP 2021–2051. The NRP is aimed to formulate strategiesbased on both operational capacities and commercial policy initiatives to increase modalshare of the Railways in freight to 45% from 27%. In NRP, new Dedicated Freight Corridorsand High-Speed Rail Corridors have been identified.
With the objective to bring down logistics costs below the national average by 2028 tomake exports globally competitive, the Government has made a plan of Rs. 00 lakh croreinvestment in infrastructure with some mega projects such as the doubling of railwaylines, their widening, dedicated freight corridors from Mumbai to Delhi and Amritsar toKolkata besides 11 other industrial corridors.
In the Budget 2023, a capital outlay of Rs. .40 lakh crore has been provided for theRailways for 2023–24. This highest ever outlay is about 9 times the outlay made in2013–14. One hundred critical transport infrastructure projects, for last and firstmile connectivity for ports, coal, steel, fertilizer, and food grains sectors have beenidentified. In the Budget, allocation for Roads and Highways has raised to Rs. .7 lakhcrore for 2023–24. The Government is working towards the development of a nationalhighway network of 2 lakh kilometres by 2025.
A capital outlay of Rs. .40 lakh crore (US$ 29 billion) has been provided for theRailways in budget 2023, which is the highest ever outlay. Indian Railways is alsoexploring a new public-private partnership (PPP) model to attract private investment toredevelop railway stations. Under this model, investors would receive up to 40% of thetotal project cost as viability-gap funding (VGF) and be allowed to use the space aboveplatforms and tracks commercially. Under the hybrid PPP model, bids will be chosen basedon the quantum of VGF support required by the private investor. The private developer willbe allowed to develop air space to generate additional revenue through commercialactivities, including the lease of office space, development of entertainment andrecreational facilities, hospitality services, malls and even healthcare facilities.
The government announced 5,000 km of Metro rail network by 2047 in 100 cities. OneStation One Product scheme aims to provide opportunities for enhanced livelihood throughskill development through provision of sale outlets at railway stations across India.Station redevelopment project will boost the passenger experience, generate new employmentopportunities and have a multiplier effect on Indias economy. Taking cognizance of itssignificance in overall infrastructural development, the NIP envisages the investment inIndian Railways worth Rs. 1.43 lakh crore till 2024–25. 2,000 km of network will bebrought under Kavach, the indigenous technology for safety and capacity augmentation.‘One Station-One Product concept will be popularized to help local businesses andsupply chains. Indian Railways has planned to install 1000 MW of solar power plants andabout 200 MW of wind plants. Out of this, about 204.82 MW (101.42 MW solar and 103.4MWwind power) renewable power has already been set up.
India has the second-largest road network in the world, spanning over 6.3 million kms.Over 64.5% of all goods in the country are transported through roads, while 90% of thetotal passenger traffic uses road network to commute. Historically, investments in thetransport sector have been made by the Government. However, in order to encourage privatesector participation, the Ministry has laid down comprehensive policy guidelines forprivate sector participation in the development of National Highways. 100% Foreign DirectInvestment (FDI) is allowed under the automatic route in the road and highways sector,subject to applicable laws and regulation. The government has forecasted an investment ofUS$ 350 billion towards road infrastructure in the North-East region of India during2020–25. The Indian government launched Gati Shakti National Master Plan, which willhelp lead a holistic and integrated development of infrastructure generating immenseemployment opportunities in the country. The aim of the plan is to create a digitalplatform that would enable 16 ministries to collaborate on integrated planning andcoordinated implementation of projects. The plan will also bring together departments suchas railways, roads & highways and others and implementation will be done with the helpof geo-satellite imaging and Big Data, land and logistics. Indias Gati Shakti program hasconsolidated a list of 81 high impact projects, out of which road infrastructure projectswere the top priority. The main aim of this program is a faster approval process which canbe done through the Gati shakti portal and digitized the approval process completely.
A total length of 24,800 kms in road projects have been proposed to be constructed withan estimated outlay of _ 5.35 trillion (US$ 74.15 billion) under Bharatmala PariyojanaPhase-I. NHAI will consider only those projects that require minimal land acquisitionworth Rs. trillion (US$ 42.92 billion) under Bharatmala Pariyojana scheme. A total of65,000 kms of roads and highways are to be constructed under Bharatmala Pariyojana. In2023–24, NHAI is allocated Rs. .62 lakh crore (US$ 20 billion), all of which isbudgetary support.
The Government is also concerned with the formulation of broad policies relating toregulation of road transport in the country, besides making arrangements for movement ofvehicular traffic with the neighboring countries. Improving the road safety scenario inthe country is one of the most important and challenging activities of the Road TransportWing. The arterial roads of the country for inter-state movements of goods and passengers.They traverse the length and width of the country connecting the National and Statecapitals, major ports and rail junctions and link up with border roads and foreignhighways. In Budget 2023–24, the Government of India has allocated Rs. .7 lakh crore(US$ 33 billion) to the Ministry of Road Transport and Highways. The Government of Indiahas allocated Rs. 11 lakh crore (US$ 13.14 billion) under the National InfrastructurePipeline for FY 2019–25. The Roads sector is expected to account for 18% capitalexpenditure over FY 2019–25. In December 2022, NHAI raised Rs. 0,200 crore (US$ 1.23billion) from foreign and Indian institutional investors to meet ever-growing budgetarysupport. The government also aims to construct 23 new national highways by 2025.
India has low conventional energy resources compared to its required energy needsdriven by a huge population and a rapidly increasing economy. However, India can harnessthe huge potential of solar energy as it receives sunshine for most of the year. It alsohas vast potential in the hydro power sector which is being explored across states,especially in the northeast.
As of February 2023, Renewable energy sources, including large hydropower, have acombined installed capacity of 174.53 GW. India is the only country among the G20countries who is on track to achieve its targets under the Paris Agreement. ICRA expectsrenewable energy capacity addition of 12.5 GW in FY22 and 16 GW in FY23.
India has set a target to reduce the carbon intensity of the nations economy by lessthan 45% by the end of the decade, achieve 50 percent cumulative electric power installedby 2030 from renewables, and achieve net-zero carbon emissions by 2070. The non-hydrorenewable energy capacity addition stood at 4.2 GW for the first three months of FY23against 2.6 GW for the first three months of FY22.
Power generation from solar and wind projects are likely to be cost-competitiverelative to thermal power generation in India in 2025–2030. Investment in renewableenergy in India reached a record US$ 14.5 billion in FY22, an increase of 125% over FY21.
On November 9, 2022, Ms. Nirmala Sitharaman, Minister for Finance & CorporateAffairs, approved the final Sovereign Green Bonds framework of India. The ParisAgreements Nationally Determined Contribution (NDC) targets will be further strengthenedby this approval, which will also aid in attracting foreign and domestic capital to greenprojects.
The country plans to reach 450 GW of installed renewable energy capacity by 2030, with280 GW (over 60%) expected from solar power. The ambitious target of 450 GW will provideinvestment opportunities worth US$ 221 billion by 2030.
In Budget 2023–24, Green Growth identified is one of the nodes in the SAPTARISHI(seven priorities). Budget 2022-23 announced the issuance of sovereign green bonds, aswell as conferring infrastructure status to energy storage systems, including grid-scalebattery systems. The government allocated Rs. 9,500 crore (US$ 2.57 billion) for a PLIscheme to boost manufacturing of high-efficiency solar modules. In the Union Budget2022–23, the allocation for the Solar Energy Corporation of India (SECI), which iscurrently responsible for the development of the entire renewable energy sector, stood atRs. ,000 crores (US$ 132 million).
Indias liberal foreign investment policy permits 100% FDI in the renewable energysector. It has been estimated that renewables will comprise 49% of Indias powergeneration by 2040.
Ircon International Limited (IRCON), an integrated engineering and construction companyhaving expertise in major infrastructure sectors including railways, highways, bridges,flyovers, tunnels, metro, railway electrification, EHV sub-stations, electrical andmechanical works, commercial and residential buildings, railway production units, amongstothers. It offers Engineering Procurement and Construction (EPC)
services on a lumpsum turnkey, EPC and item-rate basis for 29 variousinfrastructure projects. To boost_coal_evacuation from states like Odisha, Jharkhand &Chhattisgarh, IRCON is executing coal connectivity projects in joint venture with otherCPSEs under the Ministry of Coal. In addition to this, IRCON executes projects on Build,Operate and Transfer (BOT) mode and Hybrid Annuity Mode (HAM) by leveraging the financialstrength of the Company to build long term wealth.
IRCON, a prominent public sector construction company in the country, has establisheditself as a leader in Transportation Infrastructure, particularly in the execution ofRailway Projects. The Company is renowned for its high-quality solutions, unwaveringcommitment, and consistent performance.
Over the past 47 years, IRCON has successfully completed numerous significantconstruction projects, both domestically and internationally. The Company has activelypursued a strategy of diversification, expanding its presence in various sectors andgeographical locations. While IRCON ventured into the field of Solar Power Developmentrecently, its primary focus and core strength have always remained firmly rooted in therailway sector.
The Company has consistently paid dividends to the government, highlighting itsfinancial stability and success and is amongst the few construction companies in thepublic sector to have earned substantial foreign exchange for the country.
Overtheyears,IRCONhasexpandeditsbusinessfootprints in different geographies such asAlgeria, Afghanistan, Bangladesh, Bhutan, Brazil, Indonesia, Iran, Iraq, Liberia,Malaysia, Mozambique, Myanmar, Nepal, Nigeria, Saudi Arabia, South Africa, Sri Lanka,Turkey, UK, and Zambia. So far, the Company has completed over 128 projects in 25countries across the globe, and more than 400 projects in India. In the domestic market,it specializes in working in difficult terrains and disturbed regions. Furthermore, it isan active participant in prestigious nation-building projects.
While IRCON has its presence in many states in India, it intends to further expand itsdomestic operations across the nation as part of its business growth model.
LEGAL STATUS AND AUTONOMY
IRCON is a Schedule ‘A, and a Mini Ratna-Category-I public sector listed company.It is a legal entity separate from the Government, and is a lawfully, functionally, andfinancially autonomous Company that operates under the corporate laws as an independentcommercial enterprise. The Company does not receive any budgetary or financial supportfrom the Government and is not dependent on the Government for any aid or assistance.However, the
Government of India through the Ministry of Railways and the Department of PublicEnterprises under the Ministry of Finance monitors the Companys performance through asystem of Memorandum of Understanding (MOU). It reviews the targets to be achieved everyyear as part of accountability to the Parliament in respect of all government companies.The Government issues guidelines from time to time to regulate and bring about someuniform pattern in the functioning of the Company as a public sector enterprise. ThePromoter of your Company i.e. the President of India holds 73.18% of the total paid-upequity share capital of the Company, as on March 31, 2023. The Government of India (GOI)had disinvested 10.53% paid-up equity share capital through Initial Public Offer (IPO) inSeptember 2018. Further, in March 2021, through Offer for Sale (OFS) GOI divested 16%paid-up equity share capital, the Company is compliant with the Minimum PublicShareholding (MPS) requirements specified in Rule 19(2) and Rule 19A of the SecuritiesContracts (Regulation) Rules, 1957. As per 2022 edition of USAs Engineering News Record(ENR), IRCON is the only Indian PSU to make it to the list of top 250 InternationalContractors as well as under top 250 Global Construction Contractors. Further in theBusiness Standard BS 1000 Annual Magazine released in March 2023, IRCON has been ranked164 in 2022 by total revenue, and ranked 7 in terms of sector performance under the‘Construction and Infrastructure Sector. IRCON is also ranked 226th in2022 in the list of fortune India 500.
BUSINESS UNITS / DIVISIONS
Major business units / divisions of IRCON are as follows:
1. Civil Engineering Department
IRCON has established itself as a prominent construction organization in the country,with the Civil Engineering Department serving as the backbone of the Company andgenerating a significant portion of its revenue. It plays a pivotal role and providesleadership in the successful execution of large-scale composite projects. The departmentinput and leadership are essential for the smooth implementation of the numerous projectsawarded to IRCON.
This department is led by a highly experienced senior management team, consisting ofprofessionals from renowned Engineering and Business Schools. They are supported by alarge group of motivated and skilled Civil Engineers who have graduated from prestigiousinstitutes
like IITs and NITs. As on March 31, 2023, there are 690 Civil Engineers in thedepartment, accounting for approx. 50% of the total staff strength.
IRCON is committed to incorporate the latest technology in project execution to ensuretimely and cost-effective delivery. With its highly qualified and experienced
workforce, the Company has significantly enhanced its competitiveness in theconstruction industry. It has an impressive track record of growth and expansion invarious construction domains, including Railways, Highways, Bridges, Flyovers, Airports,Commercial & Industrial Buildings, Tunnels, Water treatment Plants, ResidentialQuarters, and more. IRCONs Civil Engineers are adept at working in remote areas, both inIndia and abroad, utilizing advanced Project Management Tools such as Primavera, TILOS,and MS Project. They are also trained in the latest surveying techniques, including GPSSurveying, Aerial LIDAR Surveying with Drones, and Total Station Surveying.
The department has successfully completed numerous mega projects, demonstrating itscompetency in delivering projects such as the High-Speed Railway
Line in IRAQ , Jamuna Bridge Rail Link-II in Bangladesh, the Double track projectbetween Seremban & Gemas in Malaysia, the Upgradation of Railway Lines in the NorthernProvince of Sri Lanka, the completion of the Qazigund – Baramulla New BG Railway Linein J&K, and the completion of the 11.2 km Pir Panjal Tunnel, the longesttransportation tunnel in India, in J&K. IRCON is the only public sector undertaking(PSU) to connect the rail network in the J&K States valley region.
The department has developed expertise in tunneling in the Himalayas, utilizingadvanced technologies such as NATM. It takes great pride in having more than 200 trainedtunnel Engineers and successfully completing over 100 km of tunnel mining in thechallenging geology of the Himalayas. Another significant tunnel, the 12.75 km long tunnelon USBRL Project, is nearing completion, which will be the longest transportation tunnelin the country.
With its extensive pool of experienced Civil Engineers and its accomplishments intunneling through the challenging geology of the lower Himalayas (such as the USBRL inJ&K State and Sivok Rangpo in West Bengal & Sikkim), IRCON has emerged as apioneer in the field of tunneling in India.
2. Design and Development Cell
IRCONs Design and Development Cell (D.D. Cell) is dedicated to develop in-house civildesigns & review designs submitted by consultants duly addressing safety, durabilityetc. as per all the relevant CODAL provisions, value engineering, optimisation of design,estimation of quantities for bidding for various big-ticket national & internationalprojects and other civil engineering solutions to most of IRCONs projects. Sophisticateddesign softwares such as Bentley Open Rail/Open Roads (for Alignment Design), STAAD Pro& MIDAS (For Structural design and Bridge Design), IITPAVE & KGPBACK (Pavement& Overlay Design), SLIDE (For Slope Stability Analysis of Soil) besides others arebeing used for developing design and corresponding drawings are developed with the help ofefficient CAD Engineers.
The in-house design team has extensive experience in various areas including AlignmentDesign, Bridge Design, RCC/Steel Structures Design, Buildings Design, Highway PavementDesign, Geo. Technical Solutions and Hydrological Studies etc. The in-house design teamcomprises highly experienced Civil Engineers who have graduated from top rankingEngineering Colleges of India such as IITs, NITs and other reputed colleges. The team isably supported by other departments viz. civil engineering, electrical and signaling asand when required.
Through DDC, IRCON is member in the following code/ standard committees and shares theknowledge and contributes in developing/modifying codes/standards:
• IS Codal Committee CED54: concrete reinforcement sectional committee:Standardization in the field of reinforcement for concrete including pre-stressing steel
• Standardization of Bridge Girders: Designing Long Span Steel based road bridges,convened by Ministry of Steel, Government of India.
IRCON Design Team has been extensively involved in finalizing designs of variousdomestic projects as well as international projects viz. Mokama Viaduct Project, MahanadiCoal Rail Linked project, ROBs at Shalimar & Santragachi project, Shivpir-KathautiaRail line project, Agartala- Akhaura (India Portion) Railway Viaduct Project,Chhattisgargh East West Rail project Gevra-Pendra Section, Sivok Rangpo Railway lineproject, Maho-Omanthai railway line project in Sri-Lanka, Gurgaon-Rewari Highway Project,DFCCIL CTP-12, CERL Dharamjaigarh-Kharsia section including spur line and feeder line.Some of the noteworthy projects done earlier wherein DD Cell has been involved inproviding design solutions are: 2-tier Road cum Railway Bridge across River Ganges inBihar at Digha Ghat, Bikaner-Phaloudi Road Project, Buildings of RAPDRP, Jammu, Railwaylink in Northern province of
Sri Lanka, Railway Bridges of Jaynagar Bardibas Railway Project (India and Nepal),Seremban-Gemas Electrified double track Railway Project (SGEDT) in Malaysia, Beira RailProject in Mozambique including Dona Ana Bridge across the mighty River Zambezi etc.
The team has also played an important role in quantity estimation while bidding forvarious major rail/road projects viz 4-Laning of NH in districts of Darjeeling &Jalpaiguri, Maldives Harbor Project, Sudhmahadev – Dranga Tunnel of approx. length4.5 Km and its approach roads on Chenani Sudhmahadev-Goha road portion, Vailoo Tunnel ofapprox. length 10.00 Km under Sinthan Pass and its approach roads on Goha – Khellani– Khanabal road portion, HRIDC C-4, C23 Project, High-Speed Rail Project C4, C5, C6& C7 Packages, Gurgaon-Rewari Highway Project, DFCCIL CTP 1, 2, 3, 3A, 11, 12Packages, Vadodara-Kim Expressway Pkg-ll, Davanagere-Haveri in Karanataka, Shivpuri-GunaHighway Project, Etihad Rail in UAE, various projects in Bangladesh, Maldives, Iran,Ethiopia, Oman etc.
3. Electrical Department
As leading turnkey project execution Company in Railway Sector, Railway Electrificationwing supports the project in end-to-end solution. The Electrical Department providesexpertise in 25 kV Railway Electrification Works, HT Grid & Traction Sub-station ofvoltage classes up to 400 kV, EHT Transmission line, EHV cabling work, IndustrialElectrification of mega industrial plants & Loco Sheds, Power supply distributionnetwork for Cities, Metro Railways (AC & DC Systems) and Airports, Tunnels PowerSupply and Ventilation System, Electrification including Power Supply sub-stations inMetro Railways and Renewable Solar Energy works.
IRCON undertook its first major Railway Electrification Project of Delhi – Ring– Railway in 1980 and offered environment friendly electric traction services topassenger in Asian Games organized in 1982. Thereafter, in its journey of 4 decades, thecompany has executed more than 8000 TKM of Railway Electrification work in India &abroad and established itself as leader in the market.
IRCON has also entered into Renewable Energy business and is executing ‘Setting upof 500 MW Grid Connected Solar Power Plant under the Central Public Sector Undertaking(CPSU) Scheme Phase-II (Government Producer Scheme) through new technologyMonocrystalline Passivated Emitter and Rear Cell (PERC) Bi-facial Solar Photo Voltaic(SPV) Modules with Tracker and will supply approximately 1076 million Units per year toRailways.
IRCON has executed many H.T. sub-station works up to 400 kV in India and abroad.Majority of sub-station works in all three phases of DMRC are executed by IRCON. IRCON hasalso acquired capability to execute Gas Insulated Sub-station (GIS) and Transmission Lineprojects up to 220 kV.
Tunnel Ventilation and its power supply in long Rail Tunnel is highly technical andchallenging work which was successfully executed by IRCON in Pir-Panjal Rail Tunnel,J&K (11.2 km T80 – longest railway tunnel in Asia) wherein successfulcommissioning was done by IRCON for tunnel ventilation and safety (Electro Mechanical)works. Further, ongoing works include about 54 km of Electro Mechanical works in railwaytunnels T77/74R, T49/50, T48, T14, T15 connecting Kashmir valley to India. Completeturnkey E&M work includes design, planning, project management, testing,commissioning, operation, and maintenance facility for Electrical Works (complete HT andLT works), Tunnel Ventilation System (TVS), Fire Fighting Systems, Operational Managementand Control System (SCADA). Furthermore, about 38.6km of Electro Mechanical works inrailway tunnels T1 to T14 connecting Sikkim to India is also under planning stage. IRCONhas the experience of executing railway electrification work at high altitude as well(1650m above msl) which is being implemented in Indian Railways for the first time forUSBRL Project at J&K between Baramulla to Banihal including tunnel T80 with FlexibleOverhead catenary system. Moreover, IRCON is also executing about 38km of Rigid OverheadCatenary system (ROCS) works in J&K which is also being implemented for the first timein Indian Railways. With the experience and expertise of the Company in the Electricalfield, it has also entered into a new field of Indias first Semi-High Speed Rapid TransitSystem, and is executing electrical works in Delhi-Meerut Section for National CapitalRegion Transport Corporation (NCRTC). For the Delhi-Meerut Section of NCRTC, a total ofapprox. 10 kms of 220 kV power transmission line, 34 kms of 33 kV & 1.2 kms of 25 kVCabling have been done along with energization of 02 Nos. Receiving Sub-Stations (RSS) of220/33/25 kV at Ghaziabad & Muradnagar including 05 Nos. of Auxiliary Sub-Stations(ASS) of 33/0.415 kV at Ghaziabad, Guldhar, Sahibabad, Duhai Station & Duhai Depot.Furthermore, Overhead Equipment (OHE) of 17 kms with a design speed of 180 kmph has alsobeen commissioned from Sahibabad-Duhai including Duhai Depot. For the prestigious‘Mission Railway Electrification of the Ministry of Railways (Government of India),IRCON is executing more than 2900 RKM and 32 sub-station works in various RailwayElectrification works, wherein more than 900 RKM & 06 Nos. Traction Sub-Stations (TSS)have been commissioned.
4. Mechanical Engineering Department
Mechanical Engineering Department is a team of proficient, experienced as well asyoung, dynamic and energetic mechanical engineers. It has the capability to design,install and commissioning of new rolling stock production unit, workshop or diesel shedapart from re-engineering the existing units with the objective of increased production /out- turn in an efficient and economical ways by having the optimum utilization ofresources as per the requirement of the end use customer from domestic as well as foreignmarket. Team is also capable for handling operations and maintenance of Rolling assets.
Our team delivers the projects in time even with crashed target as per the customerrequirement by utilizing the latest project management tools such as MS Project, Sixsigma, Primavera etc. along with the mobilizing of physical resources across the globe.
Recently, IRCON has bagged a prestigious High Speed Rail project i.e. MAHSR-T2 projectfrom NHSRCL. This High Speed Rail Project is being executed by Govt. of India under theexpert guidance of Japanese Consultant from Shinkansen Bullet trains. As per themethodology adopted by the Japanese consultant all the track machineries to be deployed inthe construction of Track & Track related works are either Japanese machineries ormachines developed by Japanese Engineers/ manufacturers for track related works. IRCON,Mechanical team has developed these critical machineries in-house under Make-in-Indiaprogram by guiding Indian Manufacturers on the technical design and specific functionalrequirement of the track machines. In this endeavor, IRCON has not only developed Indianmanufacturers at par with Japanese design but also saved a significant cost to IRCON bygetting these track machineries manufactured in India instead of procuring these machinesfrom Japan. Some of these track machineries are Rail Feeder cum drawer Car, Track MotorCar, Trolley/ Wagons
& Flash Butt Welding machines. These machines are specially developed in the sameline as that of Japanese technological requirements. This department has not onlysetup the Modern and State-of-the-Art Stainless Steel Coach Production units at Rai-Bareliin a record time and beating the targets by a leap, but also upgraded the diesel sheds sothat it can simultaneously home Diesel as well as Electric Locomotives.
Coach production facility at Rai-Bareli is an engineering marvel and an integrated unithaving all the facilities for turning out a finished coach from the basic raw materialssuch as rolled steel sheets. This facility has Coach/Shell fabrication Line, Robotizedwelding equipped Bogie Fabrication Shop, furnishing, finishing shop, Wheel Shop, State ofthe art Paint Shop along with all the subsidiary systems such as Material auto storage andretrieval system etc., Power Substation along with one of the largest Solar park of 3 MWin the area, residential colony for working personnel as well as for top management alongwith 100 bedded hospital, cricket stadium, athletic track, FIH certified Hockey stadiumand 18 hole golf course apart from other facilities. This makes the unit as self-sustainingunit.
Exporting of locomotives, freight wagons and passenger cars along with leasing andmaintenance of locomotives, track machines are other key capabilities of the department.Thus our mechanical department is having expertise in all domain areas of Rolling Stockasset management i.e. right from areas of construction of facilities to maintenance ofassets along with Business Process Re-engineering of existing facilities. This experiencehas been gained by implementing large projects not only in India but also at abroad forvarious government and/or multilateral funding agencies & other organizations.
Apart from above, projects undertaken by the department includes Detachment free rakeexamination facilities at Exchange Yard of Bondamunda (SER), Setting up of Wheel Shop atRail Coach Factory, Kapurthala; Augmentation of Diesel Loco Shed, Vishakhapatnam; Supplyof 10 (Ten) units YDM4 (Meter Gauge) Locomotives to Royal Railways, Cambodia; Supply of 6(Six) units 2300HP AC/ DC (Broad Gauge) Locomotives with Co-Co bogies to Sri LankanRailways, Sri Lanka; Leasing and Maintenance of Diesel Loco to KTMB, Malaysia where inmore than 85% availability of rolling assets has been obtained for a span of more than twodecade, this itself reflects exceptional capability of IRCON for maintaining rollingassets.
5. Signal & Telecom Department
Since its inception in 1976, IRCON has been providing turnkey Signal & Telecom(S&T) solutions for Railways in India and abroad; IRCON has unique distinction ofexecuting Signaling & Telecom (S&T) projects in various countries as per theirlocal codes, manuals and standards. With in-house design, construction and projectmanagement capabilities, all projects have been delivered satisfactorily on agreedtimelines. IRCON has been executing number of state-of-the-art S&T projects, startingfrom Relay Interlocking to Electronic Interlocking (EI), Automatic Train Protection (ATP),Centralized Traffic Control (CTC) systems, Integrated Tunnel Communication System(ITC). Inthe year 2022-23, IRCON commissioned Signalling Works at 60 Stations of Indian Railways aspart of Doubling, New Line, RE Modifications, Replacement works. IRCON has been at theforefront of technology in execution of telecom works, and executed Telecom Projects ofSynchronous Digital Hierarchy (SDH), Multi Protocol Label Switching (MPLS) Technologies inSri Lanka, Bangladesh, Nepal, Malaysia and India. IRCON has also executed IP-EPABX,IP-CCTV, PA system and Integrated Passenger Information System (IPIS) Works.
6. Business Development Department
IRCONs Business Development Department has a dedicated team to drive order books,develop and evaluate bidding strategies as well as to identify new business opportunitiesto generate and nurture future business of the Company in the fast-paced competitiveenvironment.
In the past years, Business Development Department of IRCON has secured projects inrailway, highway, tunnel, metro, solar, electrical & mechanical, signaling &telecommunication, buildings etc. both in competition and nomination basis. The RailwayBoard has changed its policy and works are now being awarded through open bidding process.Accordingly, IRCON through its Business Development department competes with the otherplayers including private players and participates in tenders of various railways andsecures works on the basis of competitive bidding.
In the year 2022–23, the Business Development Department of IRCON has secured 4Projects. This includes development of two New Industrial Estates in Union Territory ofJammu and Kashmir, the work for Signaling and Telecommunication System from Maho Junction(Including) to Anuradhapura (Excluding) in Sri Lanka under Indian Line of Credit worth Rs.21.75 Crore, Establishment of Railway Siding along with Railway Station contagious to MineLease Boundary of Gare Pelma Sector-III Coal Mine worth Rs. 5 Crore and DetailedEngineering
& Project Management Consultancy (PMC) Services for "Development of RailInfrastructure for proposed 02 nos. RLS (20 MTY) for Ananta OCP of Jagannath Area, MCL atmodified route at Talcher worth Rs. 4.21 Crore. The Department is also engaged in theprocess of formation of Strategic MOUs and alliances to explore new business opportunitiesand to frame and review the Corporate Plan of the Company.
The department is aggressively pursuing infrastructure projects in countries such asBangladesh, Maldives,
Malaysia, Myanmar, Nepal, Sri Lanka, Middle East and African Countries which will helpin fostering future growth of IRCON.
7. Estate Management Department
Over the years, from diversification into entire spectrum of infrastructure yourCompanys nature of business has also changed from a construction company to a projectdevelopment and operation company including, real estate and commercial operations amongother activities. With the objective of growth in the Real Estate Business in medium andlong terms viz., development of the plots, construction of buildings, leasing and / orsell out of the immovable properties and other matter related to the properties like taxand legal matters, IRCON has set up the Estate Management Department. This department isprofessionally managed and constituted to manage IRCONs existing real estate andundertake real estate development projects including property tax matters. Among realestate projects, IRCON has constructed many commercial buildings, institutional buildings,railway stations and townships etc. in India such as multi-storied commercial complexesfor CIDCO in Navi Mumbai, 500 bedded Hospital in Bhopal, Veterinary Science AnimalHusbandry college campus in Aizwal, three major residential townships at Jhansi, Bhopaland Allahabad for Ministry of Defense, projects connected to Pusa University, BanarasHindu University, CIFE, Mumbai, Vashi Railway Station, Multi-Functional Complexes (MFCs),Rail Coach Factory at Kapurthala as well as at Raebareli etc. IRCON has developed its owncorporate office which is a modern and smart office featuring all elements of GreenBuilding. Foreseeing the growth in Real Estate Sector, IRCON has accumulated a largeportfolio of real estate properties and assets in metropolitan cities such as Mumbai,Chennai, Kolkata, Bangalore, Noida and Gurugram etc. for commercial development. YourCompany had acquired 8 plots in different sectors, on leasehold basis for 90 years, atNOIDA and has successfully Leased out 22,023 Sq. mt. of built – up space forCommercial and Office use. The Company has also developed property in Sector 32, Gurugram,Haryana and this property is registered with the trademark authorities in India as‘IRCON INTERNATIONAL TOWER. About 2079Sq. mt. carpet Area of this property has beenLeased Out to government agencies and balance available space is in the process of leasingout. Apart from the Office Spaces, IRCON International Tower, Sector-32, Gurugram,accommodates state-of-the-art 250 seats auditorium and training center equipped withlatest equipment along with an accommodation facility.
FINANCIAL PERFORMANCE
During FY 2022–23, highest ever total income of the Company was achieved Rs. 0262Crore as against Rs. 181 Crore in the previous financial year, thus showing an increase of42.90%. More than 96.68% of the Companys total income i.e. Rs. 921 Crore has beenrecorded from operations which is 43.57% higher as compared to the operating turnover ofRs. 910 Crore of FY2022. Out of the total amount of operations, 4.15%, that is Rs. 11.84Crore has been achieved through international projects. The Profit Before Tax (PBT) andProfit After Tax (PAT) have increased by 44.75% and 42.83%, respectively and it stood atRs. 83 Crore and Rs. 77 Crore, respectively.
The details of interim dividend declared and paid and proposed final dividend for FY2022–23 for consideration and declaration by the shareholders, over and above theinterim dividend at the forthcoming AGM are mentioned in the Directors Report under‘Financial Highlights. Further, the details of significant changes (that is, changeof 25% or more as compared to FY 2021–22 in the key financial ratios) along withdetailed explanations thereof forms part of the Financial Statement.
Key Financial Ratios
The details of significant changes (that is change of 25% or more as compared to FY2022in the key financial ratios) along with detailed explanations thereto is placedbelow:
| S. N. | Name of Ratio | Formula | Unit | FY 2023 | FY 2022 | % Change | Reason for change more than 25% |
| 1. | Debtors Turnover Ratio | Net Credit Sales/ Average Trade Receivable | In times | 12.58 | 11.39 | 10.45 | - |
| 2. | Inventory turnover Ratio | Cost of Goods Sold/ Average Inventory | In times | 37.73 | 32.02 | 17.86 | - |
| 3. | Current Ratio | Current Assets / Current Liabilities | In Times | 1.49 | 1.40 | 5.96 | - |
| 4. | Debt-Equity Ratio | Debt / Total Shareholders Equity | Percentage | 0.00 | 0.00 | 0.00 | - |
| 5. | Operating Profit Margin | (PBIT-Other Income) / Turnover | Percentage | 5.50 | 4.96 | 10.88 | - |
| 6. | Net Profit Margin | Net Profit / Total Income | Percentage | 7.57 | 7.58 | -0.13 | - |
| 7. | Return on Net Worth | Net Profit / Average Net Worth | Percentage | 15.88 | 12.07 | 31.66 | The movement is primarily on account of incremental income generated in the current year being higher vis-?-vis the increase in net-worth. |
During FY 2022–23, the Company has complied with the guidelines prescribed by theAccounting Standards while preparing the financial statements (standalone andconsolidated), and no deviation has been made in the reporting of the financialinformation.
The movement is primarily on account of incremental income generated in the currentyear being higher vis-?-vis the increase in net-worth.
OPERATIONAL PERFORMANCE
SECTORAL PERFORMANCE
During FY2022–23, around 93.87% of the revenue earned by IRCON is contributed bythe Railway sector. The main focus business area for IRCON is Railways, however, theCompany is also concentrating on Highways business, which generates approximately 5.88%revenue and remaining from other areas such as electrical and building works.
SECTOR WISE PERFORMANCE:
(_ in Crore)
| _ Sectors | FY2023 Operating Income | % | FY2022 Operating Income | % | FY2021 Operating Income | % |
| Railways | 9313.47 | 93.87 | 6387.72 | 92.44 | 4215.21 | 85.05 |
| Highways | 583.23 | 5.88 | 496.92 | 7.19 | 718.56 | 14.50 |
| Others | 24.50 | 0.25 | 25.51 | 0.37 | 22.16 | 0.45 |
| Total | 9921.20 | 100 | 6910.15 | 100 | 4955.93 | 100 |
SEGMENT WISE PERFORMANCE:
(_ In Crore)
| Sectors | FY2023 Total Income | % | FY2022 Total Income | % | FY2021 Total Income | % |
| Foreign | 411.84 | 4.15 | 480.43 | 6.95 | 582.13 | 11.75 |
| Domestic | 9509.36 | 95.85 | 6429.72 | 93.05 | 4373.80 | 88.25 |
| Total | 9921.2 | 100 | 6910.15 | 100 | 4955.93 | 100 |
ORDER BOOK POSITION
Ministry of Railways had earlier changed its policy of awarding work on nominationbasis to railway PSUs, the Railway works were being awarded by bidding process amongrailway PSUs. Later, in October 2021, the Ministry of Railways has revoked this policy ofcompetition amongst the PSUs and open tendering has been introduced for awarding Railwayworks.
IRCONs order book, as on March 31, 2023, stood at Rs. 5195 Crore (approx.) with Rs.6243 Crore value of work in Railways sector and Rs. 985 Crore value of work in Highwaysector.
Out of the total order book, Rs. 8470 Crore value of work secured through competitivebidding and Rs. 6725 Crore value of work secured through nomination basis.
During the year, your Company completed 02 projects in India, the details of which havebeen mentioned in the Directors Report.
RESPONSE TO COVID 19
The coronavirus (COVID-19) has created the biggest global crisis, sending shock wavesthrough health systems, economies, and societies around the world. It continues to impactkey geographies that we operate in, with almost all countries are reporting second wave ofinfections.
The Company is following the guidelines issued by the government for prevention ofspread of COVID-19, sanitizers are available at all offices / projects of the Company,social distancing, wearing of mask etc. are also followed up. Further, the Companyinitiated several measures to help its employees and their families, includingestablishing COVID care centers, vaccination centers, and providing them access to medicalcare facilities.
The actual impact of COVID-19 pandemic may be different from that which has beenestimated, as the COVID-19 situation evolves in India and globally. The Company willcontinue to closely monitor any material changes to future economic conditions.
SWOT ANALYSIS
Strengths
1. Strong Order Book:
The company has outstanding executable order book of more than Rs. 5,000 crore as on31.03.2023. This order book gives revenue visibility of more than 3–4 years, whichshows great stability of the business.
2. Debt Free Company:
IRCON is technically debt free company. It had borrowing of Rs. 15 crore as on31.03.2023, which was actually a pass-through entry and ultimate liability lying withMinistry of Railways including interest payable. After closure of the
financial year the whole amount has been repaid and now company is a debt free companyon standalone basis.
3. Sturdy Cash Position:
IRCON has cash and bank balance of Rs. 785 crore as on 31.03.2023, out of which almost18% is its own cash. The cash and bank balance of the company constitute almost 35% of thetotal assets, which is very rare in infrastructure sector.
4. Experienced Manpower:
Technical manpower is highly skilled and experienced in their respective fields. Topand middle management of the company is majorly from Ministry of Railways and hasexpertise on project executions.
5. Diversified Business Segments:
The company is working in diversified sectors such as railways, highways, electricals,renewable energy etc. This diversity in business reduces the industry risk and businesscyclical risk.
6. Wide Geographical Presence:
IRCON has its wide presence domestically as well as internationally. Currently, thecompany is operating in 20 states in India and has its presence in Algeria, Sri Lanka,Myanmar, Nepal and Bangladesh.
7. One Stop Solution (C2C):
The company provides one stop solution to its clients. It undertakes projects fromconcept to commissioning.
8. Execution of Work:
The Company generally execute the works with its own experienced man power and plant& machinery available with the Company.
WEAKNESSES
1. Inherent constraint of being a PSU:
Being a government company, it has to follow several guidelines, which are not meantfor private sector companies. Private sector companies are more flexible and takes fasterdecision due to less stringent procedures.
2. Exposure to geo political risk due to geographical presence:
IRCON is working in five foreign countries, which gives it exposure to geo politicalconditions of that country. Further, it is also exposed to diplomatic relations with thecountries its operates.
OPPORTUNITIES
1. Government thrust on Infrastructure:
Government is committed to develop infrastructure and coming with various polices.There is huge potential in infrastructure sector. Being one of the major players ininfrastructure sector, there is great opportunities available in the sector.
2. Governments emphasis on renewable energy:
In the recent time, we have witnessed energy scarcity. Government is encouraging greenenergy and coming up with various schemes. IRCON has diversified its business into growingsegment of green energy with incorporation of its subsidiary company. Governmentsemphasis on renewable energy gives immense opportunity to IRCON.
3. National Infrastructure Pipelines (NIP):
Government has launched National Infrastructure Pipeline (NIP) for FY 2019–25 toprovide world-class infrastructure to citizens. The transport sector in India is expectedto grow at a CAGR of 5.9 percent thereby becoming the fastest growing area of Indiasinfrastructure sector. There are 4676 opportunities available in 9 sectors under NIP.
4. National Rail Plan (NRP):
Indian Railways has prepared National Railway Plan to create a ‘future readyRailway system by 2030. The NRP is aimed to formulate strategies based on both operationalcapacities and commercial policy initiatives to increase modal share of the Railways infreight to 45% from 27%. Government has identified new dedicated freight corridor andhigh-speed corridors. The government has CAPEX plan of Rs. 5.02 Lakh Crore excludingRolling Stock of Rs. 3.18 Lakh Crore under NRP 2021–2051.
THREATS
1. Withdrawal of Government policy regarding allocation of work on nomination basis:
Earlier, the company was also securing the orders on nomination basis from the Ministryof Railways. However, recently, government has changed its policy and now IRCON has tocompete with other PSUs as well as private companies to secure the orders. However, thecompany has been scuring many projects through competitive bidding.
2. High volatility in Commodity Prices:
Due to geo political reasons and war situation arisen in Russia and Ukraine, we haveobserved high volatility and sharp increase in commodity prices such as oil, ferrous andnon-ferrous metals, cement etc. which may impact profitability of the company in the shortto medium term. However, the Company takes necessary steps like incorporating the priceescalation clause in contract agreement to mitigate the price fluctuation.
3. Expectation of Global Slowdown:
In the recent time, inflation is going up and in some of the countries it is on multidecade high. To cope up with high inflation, central banks of all over the world aretaking aggressive steps. In this inflationary environment, there is menace of globalslowdown, which may negatively impact to infrastructure sector. However, as per IMFReport, despite of global slow down in Europe and UK, India is expected to grow. Though,IRCON is pursuing to get more international projects, most of its projects are underexecution in India.
4. Increase in competition in the sector due to small players:
Increase in competition in a sector due to the presence of regional small players. Itled cut throat price competition in the industry, which may lead margin pressure on thecompany. However, small players generally execute small size of projects whereasconsidering IRCONs expertise in niche area of tunneling, high speed, metro etc, itexecutes EPC contracts, thus may have least impact.
FUTURE OUTLOOK
IRCON has a long-standing reputation as one of the industry leaders in transportationinfrastructure with proven expertise in railway projects. To uphold our reputation in theindustry and to get improved profit margins, we intend to capitalize our advantageousposition in the market both in terms of our expertise and financial strength. As we moveahead, we plan to build on our strategy of diversifying across industry segments throughnew engines of growth. We endeavour to enhance our portfolio with projects in theinternational markets to achieve healthy profit margins offered by these projects.Although, we continue to focus on the railway sector, through portfolio diversification weaim to hedge against risks in specific areas or projects and guard the Company againstmarket variations resulting from business concentration in particular industry sectors andlimited geographical regions.
We are confident that various infrastructure initiatives decreed by the Government ofIndia will help us in fostering our future growth. We believe that we are well positionedto execute projects under these modes due to our strong technological capabilities andsound financial position. With sound experience and solid performance, we expect to seesteady growth in our business with a rise in the number of projects that we undertake andimproved profitability margins from these projects, for which our strategies are asfollows:
Expanding Geographical Footprints in Domestic and International Markets: IRCON hasactively concentrated on becoming a diversified infrastructure player, both in terms ofsector and geographical coverage and has extended its expertise into transportationengineering, civil and industrial construction, renewable power and other infrastructureprojects. Currently, the Company is executing the projects in twenty states domesticallyand five countries internationally. With the established presence in the Indian market,IRCON further intends to cover the unexplored areas within the country. IRCON believesthat this will help in enhancing its portfolio with projects proposed by the Government ofIndia would further consolidate its position in the infrastructure sector. IRCON plans tobuild its strategy of diversifying across industry segments through new engines of growth.Also, while it continues to focus its efforts in the railways sector, through portfoliodiversification, it hopes to hedge against risks in specific areas or projects, andprotect itself from market variations resulting from business concentration in particularindustry sectors and / or limited geographical areas. IRCON endeavors to enhance itsportfolio with projects in the international markets to achieve healthy profit marginsoffered by these projects. With sound expertise and solid performance, increasingexperience and success, the Company expects to see a steady growth in its business with arate of expansion comparable to or better than the best in the construction industry.
The Company aims to persist its strategy of diversifying across industry segments andincrease orders from international markets to capture healthier profit margins as comparedto domestic projects.
Diversification in Renewable Energy Sector: IRCON is exploring new emerging areasfor business diversification. As part of its diversification strategy, the company hasentered into renewable power sector to establish 500 Mwh solar power plant with jointventure partner. With the government thrust on renewable power sector, there are immenseopportunities in this sector and company is very hopeful to do well in this sector.Renewable power sector will ensure regular revenue and will also strengthen itsprofitability.
PPP Modes of Revenue Generation: IRCON is gradually moving from generating incomeonly through individual projects to regularly generating revenue and profits through itsSubsidiaries and Joint Venture companies (JVs). The Subsidiaries and JVs of IRCON arelikely to generate revenue and profits on a sustained basis because of the continuedoperation of existing projects and new projects. The Companys goal is to move ahead frombeing a construction company to a diversified company having a portfolio of BOT, DBFOT,EPC and other contracts as well as project development and operation through Subsidiariesand JVs.
Active Focus of New Projects: IRCONs business growth is attributed principally toan increased bidding activity to procure large projects. With the Companys longstandingreputation, in-house capability and expertise, the Company bids for new projects in itsniche areas of railway projects on a turnkey basis, tunnels, bridges, Dedicated FreightCorridor, Metro, High Speed Rail, Bullet Train track etc. Additionally, IRCON aims tocapitalize on its advantageous position over its competitors, both in terms of proficiencyand financial position to undertake large-high-quality projects driven by the growth ofthe Indian economy. The various initiatives promulgated by the Government of India willhelp in continuing the growth momentum for the Company. The Company is also endeavoring toincrease its share in international market through EPC and PPP execution mode. The Companyalso endeavors to formulate strategic alliances both in the domestic and foreign marketswith other major private players and participate in bids aggressively to further expandits horizon of business opportunities.
Favorable Financial Risk Profile: IRCONs financial profile indicates positiveprofitability margins and comfortable liquidity position, which has contributed to itsoperational performance. The Company intends to sustain its positive capital structurewith minimum debt to enhance its turnover and profitability.
Sectoral Initiatives Undertaken by the Government:
Over the years, the Government of India has issued various macro-level and sectorialinitiatives to improve the economy. The infrastructure sector has been one of the top-mostpriorities of the Government, particularly the Railway & Road sector. Union Budget oflast few years also has focused its concern on infrastructure development and a largeamount is reserved for capex in railway and road sectors. In the recent years, governmentis emphasizing to boost renewable power and we have seen considerable CAPEX in thissector. With the increased interventions of the Government to develop infrastructure,IRCON has been able to receive multiple opportunities for its business. The Company aimsto capitalize on these opportunities by leveraging its established track record anddiversifying its infrastructure know-how into transportation engineering, civil andindustrial construction, renewable power and other infrastructure projects.
Attract and Retain Talent Pool: IRCON recognizes the importance of its talentedemployees and the role they play in the Companys success. It relies on them to operatethe modern construction equipment, complete various tasks on its complex constructionprojects, and deliver quality performance to its clients on a demanding timeline. With anefficient human resource system, IRCON continues to focus on improving health, safety, andenvironment for its employees. It intends to further strengthen its workforce throughregular on-job skill development and training programs. Additionally, IRCON aims toprovide a congenial and safe working atmosphere to its women employees. In addition tothese efforts, IRCON also intends to maintain a relatively low employee attrition rate andretain more of its skilled workers for its future expansion. This is done by providingbetter overall benefit packages and a safer and healthier working environment.
STRATEGIC MOUs AND ALLIANCES
Your Company from time to time enters into various strategic MOU to explore newbusiness opportunities. In the FY 2022–23, IRCON entered into a JV with CochinPort Authority for bidding for a proposed Harbour in a neighbouring country. CochinPort Authority is a Corporate body under Major Ports Authority Act 2021 under Ministry ofPorts, Shipping and Waterways.
Project Models: There are several high-value projects expected in the Highwaysector on EPC, DBFOT, HAM and Annuity basis. IRCON has founded nine wholly-ownedsubsidiaries last year as SPVs for the execution of projects on BOT, DBFOT, and HAM basisand hold a strategic share in joint venture companies formed for coal connectivityprojects in three states of India. The Company is geared up to undertake turnkey projectsunder several project execution models including EPC, HAM and Annuity basis.
Technological Advancements: The Company adopts advanced technology and constructionmethodology that ensure edge over competitors. It further improves operational efficiency,establishes credibility, enhances order book value and drive customer satisfaction.Furthermore, IRCON aims to accordingly train its employees to get familiar with trendingtechnologies and is also exploring infrastructure projects that require the latesttechnology.
With the vision to venture in a new business area, IRCON participated in a bid for thedevelopment of a proposed harbour in a neighbouring country of India, for integratedfacility to cater for docking/berthing facilities along with repair facilities forboats/vessels. The facilities broadly include a Berthing wharf (300m), Break water ofabout 1700 m, Slipway of 500T capacity with transfer bay, Repair work shops,Administrative Building/Maritime School, Storage shed, Helipad, Residential blocks forofficers, Medical Inspection Room, Sports facilities along with other utilities.
RISK MANAGEMENT
IRCON acknowledges that operating in the construction sector exposes the Company toinherent uncertainties and risks. The volatility of this sector introduces variousexternal and internal risks that can impact both the financial and non-financial outcomes.Recognizing the importance of an integrated approach to risk management, IRCON hasestablished a comprehensive Enterprise Risk Management (ERM) framework.
IRCON has had a Risk Management System in place since 2007, with the Risk ManagementPolicy (RMP) initially formulated in 2013. Over time, the RMP has been amended to alignwith the changing business environment and regulatory requirements. The latest revision ofthe RMP was approved by the Board in December 2021, with the aim of fostering a higherlevel of risk awareness across the organization, encouraging broader participation, andcultivating a sustainable risk-aware culture.
In accordance with the ERM framework and SEBI (Listing Obligations & DisclosureRequirements) Regulations, 2015, IRCON has established a Board Level Risk ManagementCommittee (RMC). This committee reports to the Board providing insights into risk elementsand mitigation plans, among other responsibilities.
The RMCs primary functions include identifying key risk-bearing activities, assessingthe gaps in risk potential compared to best business practices, identifying deficienciesin current business processes that may leave potential threats uncovered, establishingrisk assessment control systems, reviewing risk assessment reports compiled by the RapidAction Group (RAG), providing directions for improvements, and ensuring IRCONspreparedness for potential risks. The RMC is also responsible for formulating andreviewing the RMP, including the framework for identifying internal and external risksspecific to the company, developing measures for risk mitigation and internal controlsystems, and monitoring implementation.
To ensure effective implementation of the Risk Management Policy, IRCON has establisheda Rapid Action Group at the Executive Director and Chief General Manager levels, alongwith business groups and internal audit teams. The Risk Management Policy, Risk ManagementProcesses, and MIS report formats, including reports on Risk Management, have beendeveloped in accordance with the ERM framework. Reports from the Rapid Action Group aresubmitted to the RMC for review. In line with the updated Risk Management Policy, theidentification of critical risks, monitoring, review, mitigation plans, and correctiveactions are now carried out through an Online Web-Based Risk Management IT Tool, which isreviewed by the RMC via the RAG for the Organizational Risk Repository.
In the Indian context, IRCON faces significant challenges in project execution, such asthe non-availability of encumbrance-free land and delays in obtaining approvals fordrawings and estimates. These factors pose risks of time and cost overruns, which areoften uncompensated by the client. Additionally, the Company faces uncertainties inpredicting project revenues, as they can vary due to various factors.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
A well-designed and consistently enforced system of operational and financial controlplays a crucial role in protecting the Companys resources, ensuring the reliability offinancial reports, and ensuring compliance with laws and regulations. It also helps inminimizing the possibility of significant errors and irregularities and facilitates theirtimely detection when they occur. IRCON has implemented an internal control mechanism andan Internal Audit Function that are appropriate for its size and business nature, aimed atenhancing operational efficiency and ensuring compliance with applicable laws, rules, andregulations. The Company has established policies and guidelines that optimize thedelegation of authority to facilitate business processes.
To further strengthen the internal control system, the following measures have beenimplemented:
Internal Financial Control (IFC)
The Company maintains adequate Internal Control over Financial Reporting (ICFR) inaccordance with the provisions of the Companies Act, 2013, which are effectivelyimplemented. The controls are designed to ensure proper maintenance of accounting records,orderly conduct of business operations in accordance with company policies, protection ofassets, prevention and detection of fraud and errors, and reliability of financial andoperational information.
The internal financial control system, including ICFR, undergoes periodic reviews toensure its alignment with evolving business needs. Any necessary changes are implementedto enhance its effectiveness. The management provides transparent disclosure of allfinancial information required for a comprehensive understanding of the Companysfinancial position and operations.
Internal Audit
The Company appoints experienced professional firms for conducting the Internal Auditof the Company and frequency of the Internal Audit is linked with the turnover andpercentage of completion of each project.
The Company has developed and approved its own Internal Audit Framework, which outlinesthe scope of the audits. This framework covers various aspects, including financialaccounting, financial reporting, tender and allied matters, project execution,procurement, subcontracting, statutory compliance, and more. Both the management and theAudit Committee periodically review the internal control and audit systems, takingcorrective action as needed to ensure continuous improvement.
Furthermore, IRCON has an organizational chart in place, along with a system fordelegation of power that is regularly updated. The Company also has a structured FraudPrevention, Detection, and Control Policy (FPDC Policy) and a Whistleblower Policy, bothapproved by the Board of Directors. These policies provide a mechanism for makingconfidential e-complaints and help maintain a culture of integrity within theorganization.
QUALITY, SAFETY, HEALTH AND ENVIRONMENT STANDARDS
IRCONisanISOcertifiedCompanyforQuality,Environment and Occupational Health & SafetyManagement Systems. The Company has implemented a Quality Management System in accordancewith ISO 9001:2015. It has also implemented an Environmental Management System inaccordance with ISO 14001:2015 and Occupational Health and Safety Management System inaccordance with IS0 45001:2018.
QUALITY
IRCON is a pioneer Public Sector Organization in adopting the Quality Management SystemCertification in the domestic as well as International Markets. Quality Management System(QMS) has been successfully sustained and continually improved since 1996 when the Companyas a whole was first certified for ISO 9002:1994 by TUV SUD Private Limited. We havecontinued the certification and sustained the system as per the latest version of QualityManagement Standards, i.e. ISO 9001:2015 (by periodical re-certification audit after theexpiry of every three years). Latest re-certification audit was conducted in September2022, whereby the Company has been re-certified by TUV SUD South Asia Private Limited fora period of another three years, i.e. up to March 2026.
To overcome the COVID-19 impacts, IRCON adopted the latest technologies & digitalsolutions for the containment of COVID -19 & emerged as the Quality centricorganization by ensuring the needs & expectations of their customers. In view ofCOVID-19 pandemic, the Company continued the initiative of sharing technical knowledge byadopting digital platform (i.e. Google Meet, Microsoft Teams etc.) on the topics like LoadTest using Crown Anchor Reaction Method, EV2 Test procedures & interpretation, CostSaving High Rise Retaining Walls, Application of Geosynthetics, Digital ManagementTechniques using Laser Scan, Geo Composite Cementitious Matt BIM
Solutions, Water Proofing solutions and many more technical as well as technologicalsolutions prevailing in the core competence of the organization i.e. railways, highways,tunneling & other infrastructure projects. In addition to this, new initiative forattracting the participation from each & every employee within the organization,conducted the quality circle meeting with project professionals for ensuring betterproduct delivery as well as quality. RACI matrix has been defined & implemented at ourproject sites for maintaining the Quality of Works. Standardization of Project ProcedureManual (PPM) along with the material testing plan and formats have been made available onthe internal website of the Company for knowledge sharing and helping the projects toprepare the required documents at project levels. Despite of the complex & diversifiednature of projects, IRCON initiative for the standardization of quality procedures are theway forward towards attaining the complete integration within the organizationalframework.
The Company nominates Quality Officers for major Indian projects to monitor QMS attheir respective projects, and the same is also incorporated in General Conditions ofContract (GCC) of the Company for implementation of Quality Management Standards by theContractor while carrying out the work.
Corporate Quality Council and Project Quality Council meetings are being conducted atCorporate Office and at projects site to review the implementation of Quality ManagementSystem (QMS). The Quality objectives are being measured and reviewed both at the CorporateOffice and at the Project levels. Internal Quality Audit, as well as Quality AssuranceAudit, were conducted in coordination with the project and Corporate Office. Reports ofthese audits provide not only details of non- conformities encountered during the auditbut also the salient features of the project, including progress, positive points if anyand areas requiring improvements.
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM
The Company established an Occupational Health & Safety Management System and wascertified for ISO 45001:2004 in October, 2011. The latest surveillance audit for ISO45001:2018 was conducted in August 2022, whereby the Company has been re-certified foranother two years, i.e. up to December, 2024.
During COVID-19 Pandemic, the Company follows the Precautionary measure/ Guidelineissued by the Government from time to time. Also taking fast initiative to prevent thespread of COVID-19 in work space by implementing monitoring equipment like thermalscanners, Arogyasetu app, automatic sanitization machine, paper disinfection machines etc.The Company has also initiated a vigilant vaccination drive for their employees and otherstakeholders for maintaining the highest standards of Occupational Health and Safety. TheCompany nominates SHE Officers for major Indian projects to monitor SHE compliance of thestatutory laws at their respective projects, and the same is also incorporated in GeneralConditions of Contract (GCC) of the Company for implementation of SHE Management Standardsby the Contractor while carrying out the work. In addition to this, document like Safetyand Environmental checklists are also provided at IRCON intranet.
ENVIRONMENTAL MANAGEMENT SYSTEM (EMS)
The Company established an Environment Management System (EMS) and was certified forISO 14001:2004 in October 2011. The latest re-certification audit for ISO 14001:2015 wasconducted in November 2022 whereby the Company has been re-certified for another threeyears, i.e. up to February 2026. The Company nominates Environment Officers for majorIndian projects to monitor EMS and compliance of the environmental laws at theirrespective projects and the same is also incorporated in General Conditions of Contract(GCC) of the Company for implementation of Environmental Management Standards by theContractor while carrying out the work. Environmental checklists have been developed andmaintained by all projects. Further, environmentally friendly equipment such as solarpanels have been installed and are being installed at various offices/projects. Wastewateris recycled at Corporate Office through Sewage Treatment Plant (STP), and the same is usedfor horticulture work. STPs are also being constructed at IRCONs buildings at Noida andGurugram.
To conserve electricity and water, LED lights, sensor lights and sensor taps are usedin Corporate Offices. Moreover, various environment-friendly steps are taken up acrossoffices/projects of the Company, such as use of fly ash brick instead of clay brick,rainwater harvesting arrangements, sensor-controlled Chromium Plate (CP) fittings, and useof the latest version of facade glass (glass in the building) to make the buildingsustainable. At construction sites, regular monitoring of water usage and wastewater,ambient air quality and noise quality are being carried out.
Being the environment friendly organization, IRCON actively participates in thenational & international events (i.e. world environment day) through competitions& display of banners in order to inculcate the awareness towards the protection ofenvironment among its stakeholders.
IRCON received an award for Outstanding Achievements in Environment Protection inAugust, 2022 from Greentech Foundation.
HUMAN RESOURCES
IRCON recognizes that its employees are fundamental to its success and are instrumentalin upholding the organizations values and culture. The Company is committed to achievingits organizational goals by investing in the development of its human resources, ensuringthat they possess the necessary skills and competencies to effectively contribute to theCompanys business objectives. IRCONs efforts in human resources development are in linewith industry standards, ensuring that its workforce remains equipped with the requiredknowledge and expertise. The Company places great importance on fostering a positiveworkplace environment and consistently works towards maintaining it. IRCON strives tocreate a motivating and satisfying atmosphere where employees are encouraged to makevaluable contributions to the companys growth and success.
The Company takes pride in its highly motivated and competent human resource and itscontribution. The total employee strength of our company stood at 1341 as on March 31,2023 which included 933 regular employees, 35 employees on deputation, 302 on contractual,67 consultants / advisors and 04 on fixed tenure basis. The attrition rate during FY2022–23 stood at 9.06% in comparison to 6.84% during last year.
EMPLOYEE PRODUCTIVITY
There has been a steady growth in the employee productivity over the past 5 years. Thetotal income of the Company for FY2022–23 is Rs. 0262 Crore. The overall income peremployee for FY 2022–23 stood at Rs. .65 Crore as compared to Rs. .62 Crore inFY2021–22.
Recruitment
To maintain its competitive edge, the Company is committed to attracting and onboardingtop talent at all levels. This is achieved through various means, including recruitingfresh graduate engineers, professionals, and management trainees. The Company also bringsin experienced personnel from the open market, through deputation or absorption from othergovernment departments and railways, as well as by hiring retired staff and utilizingthird-party payroll services. The Company follows best recruitment practices to ensureequal opportunities and a harmonious working environment for the advancement of employeesfrom diverse backgrounds, including SC, ST, OBC, minorities, and women. These policiesreflect the inclusive and forward-thinking mindset of the management, with a strongemphasis on being an "Equal Opportunity Employer". The Company continuouslyreviews and refines its recruitment strategies to align them with its broader goals andobjectives.
During FY 2022–23, 69 employees were recruited on a full-time basis while 188 wererecruited on contractual basis including service contract, as a policy of inclusiveemployment, 119 of those inducted belong to the SC/ ST/ OBC/EWS category. The Company hasalso implemented EWS reservation with 14 EWS category employees being inducted. Aselection process for tenure-based appointments has also been initiated. In addition tothe open market recruitment, campus recruitment was also done from premier institutes likeICAI and ICMAI.
Deputation
To meet its continuous need for trained and experienced manpower, especially in view ofproject requirements, experienced and trained manpower is inducted from Indian Railwaysand other Government departments on deputation on a fixed tenure basis. During the year, 9personnel were inducted on deputation, bringing the total manpower on deputation to 35.
Training and Development
IRCON is moving towards a competency-based framework with the aim of buildingcompetency pool of the employees at all levels. As an outcome of competency mapping,individual development plans are prepared for senior and middle-level management. Based onthis, training needs are identified and customised training programs are conducted.
Considering the Training and Development as a high focus area, employees are beingtrained in various domains such as Contract Management, Arbitration, Project Management,Managerial Effectiveness, Negotiations, Business Development and Strategy, Risk Managementetc. During the year, 816 man-days of training was imparted, which covered around 437employees, which included Training Programme on usage of GEM Portal & E-Procurement,Project Quality Council, Gender Equality and Women Empowerment, Management DevelopmentProgramme, Workshop on RTI Act, Conference on use of Smart Contract in public Procurement& Supply Chain, virtual Training Programmes and many other behavioral, technical,non-technical internal and external training, seminars, workshops were imparted.Strengthening our human capital is, therefore, core to our operations. IRCON runs multipleinitiatives to help employees grow in their careers. Progressive policies such as amentoring and skill development programmes for junior employees, and special leadershipdevelopment programs for senior employees, have gone toward making the workplace moreemployee-friendly.
Career Progression
The Companys promotion policy is well-established and proven effective over time. Itensures that deserving employees have ample opportunities for career advancement andfacilitates succession planning. Promotions are based on merit, suitability, performance,and professional accomplishments that align with the organizations business requirements.In the Departmental Promotion Committee (DPC) of 2021, a total of 135 promotions weregranted in the executive category, while 09 promotions were awarded in the non-executivecategory.
Performance Management System
The Company has implemented an IT-enabled Performance Management System that is linkedwith a Performance Related Pay (PRP) system. This PRP system effectively captures variousaspects of employee performance, including company performance, team performance, andindividual contributions towards achieving the Companys annual objectives. The emphasison team performance promotes a collaborative and cohesive work environment, whereemployees are motivated to work together synergistically to achieve team objectives. Thisapproach facilitates the attainment of the Companys long-term goals, such as maintainingminimum wages and other benefits.
Furthermore, the Company has incorporated additional benefits in its policies tosupport employee well-being. These include provisions for personal healthcare, such asregular medical check-ups and reimbursem*nt of prolonged treatment expenses. Theavailability of Allopathic, Homeopathic doctors, and alternative therapy options is alsoprovided. Additionally, recreational activities such as gym facilities and the provisionof free tea/coffee through vending machines contribute to employee satisfaction and meritrecognition.
Use of Information Technology Tools
To maintain business continuity and enable the staff to work from home, the ITDepartment has taken a leap forward to keeping records in digitized format andimplementing e-office for day-to-day operations. HR functions such as Employee Records,Leave Records, Performance Management System (PMS), Annual Property Returns, EmployeeEngagement, etc. have been put in an e-format, thereby reducing paper use, bringingtransparency and efficiency, and improving quality. The policies and programmes arecommunicated to employees through the Employee Self-Service portal and various socialmedia modes.
Motivation, Awards and Recognition
To recognize the exceptional performance, periodic awards and recognition are given toemployees. The meritorious employee delivering the exceptional performance in a financialyear is awarded with CMD Award. In addition, various individual and group awards are givento employees for their exceptional performance during the year.
Employee Welfare
During the employment, employees are provided with generous perks, allowances, andfacilities, encompassing both monetary and non-monetary benefits. These includetransportation assistance, housing options, leased accommodation, subsidized food, andmedical facilities. The Companys main objective is to enhance the quality of life for itsemployees, and as such, it has implemented various schemes to improve their overallwelfare. In addition to statutory benefits such as Maternity
& Adoption Leave, First Aid Facility, and payment of scholarship cash awards foreducation and higher education of employees wards, the Company offers several EmployeeAssistance Programs. These programs encompass training, advances, a house lease policy toprovide better living conditions, and support for employees suffering from prolongedillnesses or terminal diseases. Periodic gifts, such as superannuation gifts, marriagegifts, birthday gifts, diwali gifts, and Annual Day gifts, are granted to foster a senseof belongingness among employees and create a positive work environment. The Companyprovides liberal superannuation benefits, including Provident Fund, Gratuity, Pension, andPost-Retirement Medical Scheme, which serve as retention tools and offer social securityto employees. Funeral expenses are provided in case of unfortunate employee or dependentdeath, and ex-gratia payments are made to the dependent family members in the event of anemployees death or permanent disablement. To provide additional social security, theCompany has taken insurance coverage for employees, including personal accident insurancepolicies, term plans, and savings-linked insurance. This ensures financial protection forunforeseen circ*mstances.
Furthermore, a 24X7 helpline service has been established to support employees in caseof any emergencies. Dedicated mobile numbers are available based on geographical areas toprovide immediate assistance when needed.
Women Development
The Company has implemented best practices to ensure equal opportunities and aharmonious working environment for the growth and advancement of women employees. Variousprograms on gender issues, sexual harassment, and conducive working conditions areconducted to address these concerns. Women employees are provided with opportunities toparticipate in meetings, project work, and committees, promoting equal opportunity withoutgender bias. The management has always been at the forefront of adopting practices thatcreate an environment where women feel empowered, confident, and able to make decisions.To ensure a safe and secure working atmosphere for women employees, a committee for thePrevention of Sexual Harassment at the Workplace (POSH) has been established. Thiscommittee aims to provide a supportive framework and address any instances of sexualharassment.
Grievance Redressal
To promptly address and resolve employee grievance fairly and equitably grievanceredressal system is present in the Company wherein employee can submit their grievance toappropriate authority for redressal. In addition, online grievances can be made to theMinistry of Railways through the Centralized Public Grievance Redress & MonitoringSystem (CPGRAMS) portal.
Whistle Blower Policy
IRCON has a separate and well-structured Vigilance Department, which deals with fraudsor suspected malpractices involving employees, contractors, suppliers, consultants,service providers or those doing business with the Company. Besides, a whistle blower andfraud prevention policy are also in place to monitor unethical activities.
CONTRIBUTION TO GOVT. OF INDIA INITIATIVES
The Company has always been proactively supporting initiatives of the Government ofIndia such as Skill India, Swachh Bharat Mission, Start-up India, Make in India, includingMSMEs, Digital India, promotion of Solar Ecosystem by formulating its business orgovernance objectives in line with the government plans.
PROMOTING MSMEs
Being a CPSE, the Companys procurement policy and practices are guided by theGovernment policies and practices, including CVC Guidelines. These are based ontransparent procurement mechanism, which also promotes procurement from local and smallproducers and suppliers. IRCON is procuring goods and services as per Public ProcurementPolicy, 2012 from MSEs. Accordingly, purchase preference is given to those small producersquoting their price within the price
of Rs. .20 per equity share on the face value of Rs. /- each, totaling Rs. 12.86 Crore(60% of the paid-up share capital of Rs. 88.10 Crore). This final dividend is subject toapproval from the shareholders at the ensuing AGM and is based on the Companys profitsfor FY 2022–23.
Considering these dividends, the total dividend for FY 2022–23 would amount toapproximately Rs. 82.15 Crore (150% of the paid-up equity share capital of Rs. 88.10Crore). This represents 36.31% of the post-tax profits for FY 2022–23 and 5.45% ofthe net worth of the Company as of March 31, 2023. Upon approval and payment of theproposed final dividend, the cumulative dividend paid to shareholders until FY2022–23 will stand approximately Rs. ,656.62 Crore.
The declaration of dividends aligns with the Dividend Distribution Policy, whichcomplies with Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), asamended, and the guidelines on "Capital Restructuring of Central Public SectorEnterprises."
SHARE CAPITAL
As on March 31, 2023, the paid-up equity share capital of the Company stood at Rs.88.10 Crore comprising of 94,05,15,740 equity shares of face value of Rs. /- each. Theshareholding of the Promoter of the Company i.e. the President of India stood at 73.18% ofthe total paid- up equity share capital of the Company, as on March 31, 2023. IRCON iscompliant on the Minimum Public Shareholding (MPS) requirements specified in Rule 19(2)and Rule 19A of the Securities Contracts (Regulation) Rules, 1957.
Based on the market price of Ircon International Limited (IRCON) as on March 31, 2023,it is placed in the top 500 listed companies. As on March 31, 2023, the marketcapitalization of your Company stood at Rs. 266.89 Crore.
DEMATERIALISATION OF SHARES
All the shares, except only 5407 shares as on March 31, 2023 and 2407 shares as on June30, 2023 in physical form, are held in dematerialised form and the details of thedematerialisation of shares are provided in the Corporate Governance Report.
TRANSFER TO RETAINED EARNINGS
Appropriations to retained earnings for the financial year ended March 31, 2023 wereRs. 94.85 Crore after considering the total dividend of Rs. 82.15 Crore.
CAPEX AND LIQUIDITY
During the year, the Company on a standalone basis spent a sum of Rs. 48.96 Crore oncapital projects across domestic and foreign projects; which includes Rs. 0.56 Croretowards construction of a building; Rs. .52 Crore for acquiring Plant & Machinery; Rs..49 Crore for acquiring other assets; and Rs. 23.39 Crore towards investments in SPVs.
The Companys liquidity position remains strong at Rs. 785.32 Crore as on March 31,2023, comprising of Rs. 168.41 Crore in cash and cash equivalent and Rs. 616.91 Crore inother bank balances. Out of Rs. 785.32 Crore, client/ project funds amount to Rs. 942.09Crore.
The Company has also invested Rs. 23.39 Crore in the equity / quasi-equity of itssubsidiaries and joint venture companies during the FY 2022–23, which stood at Rs.912.4 Crore as on March 31, 2023.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has earned a foreign exchange of Rs. 9080 Crore cumulatively till date.During FY 2022–23, the Company has earned a foreign exchange of Rs. 32.99 Crore ascompared to Rs. 21.26 Crore in FY 2021–22. The foreign exchange outgo stood at Rs.06.83 Crore during FY 2022–23 as compared to Rs. 67.10 Crore during FY2021–22. Thus, the net foreign exchange earnings amount to Rs. 6.16 Crore in FY 2022-23.
IRCON GROUP PERFORMANCE
During the year under review, IRCON along with its subsidiaries (‘the Group) on aconsolidated basis has recorded highest ever total turnover of Rs. 0750 Crore (previousyear: Rs. 586 Crore). The Group has registered a quantum jump of 40.49% in operatingturnover to Rs. 0368 Crore (previous year Rs. 380 Crore). The Group reported aconsolidated profit before tax of Rs. 91 Crore (previous year Rs. 89 Crore) and profitafter tax of Rs. 65 Crore (previous year: Rs. 92 Crore), both registering increase of29.31% and 29.22%, respectively.
The Group EBITDA was Rs. 117 Crore (previous year: Rs. 46 Crore), an increase of 32.03%over the previous year. During the FY 2022–23, in terms of the financial performance,the Company has achieved and crossed the Turnover targets criteria of Rs. 875 Crore (onConsolidated basis) set up by the Ministry of Railways in terms of the Memorandum ofUnderstanding based on the DPE guidelines.
IMPACT OF COVID-19
The Company is continuously monitoring the material changes to future economicconditions.
The Company has initiated several measures to help its employees and their families,including establishing COVID care centers, vaccination centers, and providing them accessto medical care facilities. The Company has also taken various initiatives towardsimplementation of all precautionary measures to deal with the pandemic.
During the FY 2022–23 the Company had made a contribution of Rs. .53 Crore towardsPrime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARESFund).
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
There are no material changes or commitments affecting the financial position of theCompany during and after the close of the financial year up to the date of the report.
FINANCIAL STATEMENTS (STANDALONE AND CONSOLIDATED)
The Board of Directors of the Company has, at its meeting held on May 24, 2023, hadapproved the Financial Statements for FY 2022–23 (Standalone and Consolidated). Inaccordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Companyhas prepared its Consolidated Financial Statements a) as per line-by- line methodfor its wholly-owned subsidiaries viz. Ircon Infrastructure & Services Limited(IrconISL), Ircon PB Tollway Limited (IrconPBTL), Ircon Shivpuri Guna Tollway Limited(IrconSGTL), Ircon Davanagere Haveri Highway Limited (IrconDHHL), Ircon Vadodara KimExpressway Limited (IrconVKEL), Ircon Gurgaon Rewari Highway Limited (IrconGRHL), IrconAkloli-Shirsad Expressway Limited (IrconASEL), Ircon Ludhiana Rupnagar Highway Limited(IrconLRHL), Ircon Bhoj Morbe Expressway Limited (IrconBMEL), & Ircon Haridwar BypassLimited (IrconHBL) and subsidiary company viz. Ircon Renewable Power Limited (IRPL); and b)as per equity method, for seven joint venture companies viz. Ircon-Soma Tollway PrivateLimited (ISTPL), Indian Railway Stations Development Corporation Limited (IRSDC) [not on agoing concern basis], Chhattisgarh East Railway Limited (CERL), Chhattisgarh East-WestRailway Limited (CEWRL), Jharkhand Central Railway Limited (JCRL), Mahanadi Coal RailwayLimited (MCRL) & Bastar Railway Private Limited (BRPL). The accounts of unincorporatedjoint ventures have been included in the standalone financial statements for the FY2022–23.
Pursuant to letter dated October 18, 2021 of Ministry of Railway, the closure ofbusiness and transfer / hand over of business /assets of IRSDC is under process.Accordingly, as part of the closure activities, all assets and liabilities of IRSDC [otherthan its investment in its subsidiary companies viz., Gandhi Nagar Railway and UrbanDevelopment Corporation (GARUD) and Surat Integrated Transportation DevelopmentCorporation Limited (SITCO)] are to be transferred to Rail Land Development Authority(RLDA)/ MoR on slump sale basis for a consideration not less than the book value as on thecutoff date to be mutually agreed upon as approved in the BoD meeting of IRSDC. Closurerelated activities initiated in FY 2021–22 are yet to be completed. The liquidationprocess shall commence on completion of these activities and handing over of assets andliabilities to RLDA/ MoR. Financial statement of IRSDC has been prepared on liquidationbasis. The Company does not foresee any impairment in the value of its investment as theCompanys share in the reported Net Worth of IRSDC is Rs. 8.50 Crore i.e.26% of Rs. 25Crore vis-a-vis our shareholding of Rs. 2 Crore.
The Company would make available its audited financial statements (standalone andconsolidated) for the FY 2022–23 and financial statements of its eleven subsidiaries(IrconISL, IrconPBTL, IrconSGTL, IrconDHHL, IrconVKEL, IrconGRHL, IrconASEL, IrconLRHL,IrconBMEL, IrconHBL
& IRPL) at its website (www.ircon.org).
Further, a statement containing the salient features of the financial statements ofeleven subsidiaries and seven joint venture companies in Form AOC-1 is attached to theFinancial Statements.
Considering the COVID-19 pandemic and the challenges associated with dispatchingphysical copies of financial statements, including the Notice of AGM, Boards Report,Auditors Report, and other related documents, the Ministry of Corporate Affairs (MCA)and Securities and Exchange Board of India (SEBI) have issued guidelines.Accordingly, such statements & documents can be sent exclusively via e-mail to memberswho have registered their email addresses with the company or with the depositoryparticipant/depository, as well as to other eligible persons. These relaxations have beenextended until September 30, 2023, as per circulars dated December 28, 2022 and January 5,2023 issued by MCA and SEBI respectively .
Taking into account these relaxations and as part of our commitment to environmentalsustainability, the Notice of AGM and Annual Report will be electronically delivered toshareholders who have already registered their email addresses with the respectivedepository participants. These documents will be accessible on the Companys website andwill also be provided to the stock exchanges, namely BSE Limited (BSE) and NationalStock Exchange of India Limited (NSE).
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA) Report, as mandated by Regulation34 read with Schedule-V to the LODR Regulations and DPE Guidelines, has been included asan annexure to this report. It is hereby incorporated by reference and serves as anintegral component of this report. The MDA Report provides a comprehensive review ofvarious aspects including the global and Indian economy, industry analysis, futureoutlook, Company overview, legal status and autonomy, business divisions/ units, financialand operational performance, projects executed during FY 2022–23, upcoming projects,strengths, scope and opportunities, key concerns, business strategies, risk management,adequacy of internal control systems, and significant developments in human resources.
EXTERNAL ENVIORNMENT MACROECONOMIC CONDITIONS
International Monetary Fund (IMF) in its World Economic Outlook (April 2023), predictedglobal growth of 2.8% in 2023, with a slight improvement to 3.0% in 2024. Despite ofglobal headwinds, Indias economy is expected to grow at a faster pace than the globalaverage and it is expected to grow at 5.9% in 2023 and 6.3% in 2024. The slowdown isconcentrated in advanced economies, especially the euro area and the United Kingdom.
Global headline inflation is set to fall from 8.7% in 2022 to 7.0% in 2023 on the backof lower commodity prices, but underlying (core) inflation is likely to decline moreslowly. Inflations return to target is unlikely before 2025 in most cases. Once inflationrates are back to targets, deeper structural drivers will likely reduce interest ratestoward their pre-pandemic levels. Indias GDP growth for FY 2023–24 anticipated bythe RBI is 6.5% in its monetary policy (April 2023). However the key concern on the growthfront in the immediate future is the drag caused by the weak external demand conditionsand the impact of any adverse weather conditions on Indian agriculture provides additionaldownside risk to the growth trajectory.
INFRASTRUCTURE & CONSTRUCTION INDUSTRY – GOVERNMENT INITIATIVES & INDUSTRYOUTLOOK
Infrastructure plays a huge role in propelling other industries and Indias overalldevelopment. The government, therefore, focuses on the development of infrastructure andconstruction services through focused policies such as open FDI norms, large budgetallocation to the infrastructure sector, smart cities mission, etc. PM launches GatiShakti Master Plan to integrate different modes of transportation and increase the speedof infrastructure development in India.
The construction Industry in India is expected to reach $1.4 Tn by 2025. Under NationalInfrastructure Pipeline (NIP), India has an investment budget of $1.4 Tn on infrastructure24% on renewable energy, 18% on roads & highways, 17% on urban infrastructure, and 12%on railways. Government thrust for developing 35 Multimodal Logistics Parks (MMLPs) at atotal capital cost of $ 6.1 Bn, will cater to 50% of the freight movement and furtherboost infrastructure development in the country. Indian Railways have prepared a NationalRail Plan (NRP) for India – 2030 to create a ‘future ready Railway system by2030. The NRP is aimed to formulate strategies based on both operational capacities andcommercial policy initiatives to increase modal share of the Railways in freight to 45%.The objective of the Plan is to create capacity ahead of demand, which in turn would alsocater to future growth in demand right up to 2050 and also increase the modal share ofRailways to 45% in freight traffic and to continue to sustain it.
The government announced 5,000 km of Metro rail network by 2047 in 100 cities. OneStation One Product scheme aims to provide opportunities for enhanced livelihood throughskill development through provision of sale outlets at railway stations across India.Station redevelopment project will boost the passenger experience, generate new employmentopportunities and have a multiplier effect on Indias economy. Taking cognizance of itssignificance in overall infrastructural development, the NIP envisages the investment inIndian Railways worth Rs. 1.43 lakh crore (US$ 138 billion) till FY 2024–25.
With the objective to bring down logistics costs below the national average by 2028 tomake exports globally competitive, the Government has made a plan of Rs. 00 lakh croreinvestment in infrastructure with some mega projects such as the doubling of railwaylines, their widening, dedicated freight corridors from Mumbai to Delhi and Amritsar toKolkata besides 11 other industrial corridors.
Vision 2024 has been envisaged to achieve targets of 2024 MT freight loading by 2024.Government is working towards the development of a national highway network of 2 lakhkilometers by 2025. Indian Railways has planned to install 1000 MW of solar power plantsand about 200 MW of wind plants by 2022–23. Out of this, about 204.82 MW (101.42 MWsolar and 103.4MW wind power) renewable power has already been set up.
In Budget 2023–24, capital investment outlay for infrastructure is being increasedby 33% to Rs. 0 lakh crore (US$ 122 billion), which would be 3.3% of GDP. A network of 35Multimodal Logistics Parks is planned to be developed as part of Bharatmala Pariyojana,with a total investment of about Rs. 6,000 crore (US$ 5.5 billion), which onceoperational, shall be able to handle around 700 million metric tonnes of cargo. Of this,MMLPs at 15 prioritized locations will be developed with a total investment of about Rs.2,000 crore (US$ 2.6 billion). A capital outlay of Rs. .40 lakh crore (US$ 29billion) has been provided for the Railways, which is the highest ever outlay and about 9times the outlay made in 2013- 14. 100 critical transport infrastructure projects, forlast and first mile connectivity for ports, coal, steel, fertilizer, and food grainssectors have been identified and will be taken up on priority with investment of Rs. 5,000crore (US$ 9 billion), including Rs. 5,000 crore (US$ 1.8 billion) from private sources.50 additional airports, heliports, water aerodromes and advance landing grounds will berevived for improving regional air connectivity.
A total length of 24,800 kms in road projects have been proposed to be constructed withan estimated outlay of Rs. .35 trillion (US$ 74.15 billion) under Bharatmala PariyojanaPhase-I. NHAI will consider only those projects that require minimal land acquisitionworth Rs. trillion (US$ 42.92 billion) under Bharatmala Pariyojana scheme. A total of65,000 kms of roads and highways are to be constructed under Bharatmala Pariyojana. In2023–24, NHAI is allocated Rs. .62 lakh crore (US$ 20 billion), all of which isbudgetary support.
In Budget 2023–24, the Government of India has allocated Rs. .7 lakh Crore (US$ 33billion) to the Ministry of Road Transport and Highways. The Roads sector is expected toaccount for 18% capital expenditure over FY 2019–25. The government also aims toconstruct 23 new national highways by 2025.
These budget allocations are aimed at improving existing infrastructure, building newprojects, and addressing the infrastructure gaps across the country.
ORDER BOOK
In the industry that the Company pertains to, an order book is considered an indicatorof future performance since it represents a portion of anticipated future revenue. TheCompany caters to both domestic as well as international markets and receives orders bothon competitive bidding as well as through nomination by the Ministry of Railways. Ministryof Railways have made a significant change in their policy on allotting the projects toPSUs, and have ended the system of competitive bidding amongst the eligible PSUs, andintroduced competitive bidding for execution of railway works.
The order book as on March 31, 2023, is Rs. 5195 Crore as compared to Rs. 3758 Crore ason March 31, 2022. The major new orders are from railway electrification, highway project,metro track works, workshops, airports and renewable energy; also civil and track work inprestigious High Speed Railway Project. The order book as on June 30, 2023 stood at _32,486 Crore.
DOMESTIC PROJECTS
Since incorporation, the Company has diversified into various infrastructure sectorsand is now an established player in the field of railway and highway construction.Moreover, it has diversified in many other areas such as power transmission lines,sub-stations industrial complex, bridge and flyovers, tunnels, electrical and mechanicalwork, signaling and telecom, production units, station building, multi-function complex,and construction of commercial, residential complexes, and airports. The diversificationof project portfolio across various sectors has helped the company in de-risking itsconstruction business and reduce our dependence on any sector or type of project. In thecoming future, IRCON shall continue to pursue projects of High-Speed Rail, NationalCapital Region Transport Corporation (NCRTC), National Highways Authority of India (NHAI),Indian Railways and other important and high value projects in India.
During the FY 2022–23, your Company was awarded the projects in India viz.,establishment of Railway Sidings along with Railway Station contagious to Mine LeaseBoundary of Gere Pelma Sector-III Coal Mine, PMC services for Signaling &Telecommunication system; and development of Rail Infrastructure for proposed 02 nos. RLS(20 MTY) for Ananta OCP of Jagannath Area, at Talcher. IRCON has also been engaged forCentral Public Sector Undertaking (CPSUs) for development of New Industrial Estates inUnion Territory of Jammu and Kashmir. During FY 2022–23 the following two projectshave included in the completed projects category. With this, IRCON has completed more than400 completed domestic projects.
a Construction of Eight lane Vadodara Kim Expressway from Km. 323.000 to 355.000 (Sanpato Padra Section of Vadodara Mumbai Expressway) in the State of Gujarat under NHDP Phase– VI on Hybrid Annuity Mode (Phase IA-Package II).
a ECR – Doubling between Hazipur – Bachwara with electrification project(72km) including planning, design and construction of all service and residentialbuildings, circulating area, parking, platforms, subways, shelters and other alliedstructures of all stations, including Electrical, Signal & Telecommunication works andany other works.
ONGOING PROJECTS:
A list of ongoing major projects in India is given at
Appendix-A.
In FY 22–23, the focus of your Company has been execution, faster deliveries andmeeting stringent timelines for overall optimal contribution to the much neededinfrastructure growth._ This is in line with the vision of our Honble Prime Minister andHonble Minister of Railways. During the FY 2022–23 following were some of theachievements of on-going major projects in India:
1. Udhampur Srinagar Baramulla Rail Link Project (USBRL) in J&K (cost plus contractawarded by Northern Railways having revised estimated cost of Rs. 3557.47 Crore):Milestone of 23.4 Km of tunnel lining has been completed in the FY 2022–23 and atotal of 94.162 km length [Comprising Main Tunnel (MT) + Escape Tunnel (ET) & CrossPassage (CP)] has been completed in the section between Katra to Banihal. Further,breakthrough of 13.18 Km of MT and 32.34 Km of ET were also achieved. Project has alsoachieved its highest ever expenditure booking of about Rs. 899.40 Crores. The execution ofproject is in advanced stage and is targeted for commissioning in FY 2023–24.
2. Sivok Rangpo New BG Rail Line Project (cost plus contract awarded by NortheastFrontier Railways having revised estimated cost of Rs. 248 Crore): Total Tunnel Mining andLining completed in the FY 22-23 is 11.60Km & 2.28Km respectively. Mining in sixtunnels have been completed. Milestone of second breakthrough of Tunnel T-5 achieved on18.06.2022, third breakthrough of Tunnel T-9 on 19.10.2022, fourth breakthrough of TunnelT-2 (896 m.) on 23.11.2022, Fifth breakthrough of Tunnel T-12 (1404 m.) on 24.12.2022,sixth breakthrough of Tunnel T-11 (3232 m.) on 23.01.2023 and longest Adit tunnel of thisproject i.e. Adit-1 (1144m) of Tunnel T-10 on 19th Feb, 2023._Work is inprogress in all the 14 tunnels, 13 major bridges and 4 yards. Overall progress of projectis 50%. The project is of strategic importance with future connectivity to Gangtok andthereafter to Indo-China border (Nathula pass) and has a vital role in meeting the defenserequirements.
3. Dedicated Freight Corridor Project (Vaitarana
- Sachin Section of Western Dedicated Freight Corridor Phase-2), Civil, Building andTrack Works, Package -CTP-12: EPC Contract awarded by Dedicated Freight CorridorCorporation of India Limited (DFCCIL): Revised estimated cost of work shall be Rs. 353Cr._ Works completed and trial run done in Sachin – Gholvad section, 110 Route km outof 186 Rkm. Balance works in Gholvad – Vaitarana section are progressing well.
4. Rampur Dumra-Tal-Rajendrapul (cost plus project awarded by East Central Railwayhaving revised estimated cost of Rs. 701 Crore) : The Project comprises_ Design &construction of Main Bridge having total length of 1874m with 17 spans, Rail Viaduct of3.2km, 2 nos._ROBs, 3 nos. RORs, one RUB, Embankment of around 11.3 km, 8 nos. Minorbridges and track linking works including electrification. Casting of 15 and sinking of 11out of 18 wells, one abutment and seven pier cap have been cast. Erection of 6 nos. openweb girder also launched. Formation work on north side along with flood protection workshave been completed and on south side of river 25.98 lac cubic meter against the scope of28.36 lac cubic meter earth work is completed. Seven out of eight minor bridge, one RUBand substructure for two ROBs also completed. Piling works on the all 3 RORs completed andpile cap casting is in progress (50% works completed). All the structural steel forimportant bridge, ROBs and RORs procured. Work on 3.6 Km long via duct is also progressingwell and till date 927 nos. of piles out of 1000 nos., 61 pier caps and 12 pier shaft outof 101 nos. piers have been completed. The balance work is progressing well.
5. Katni-Singrauli Doubling Project (cost plus project awarded by Western CentralRailways having revised estimated cost of Rs. 445 Crore) : Total 78.29 Km sections wascommissioned during FY 2022–23. During FY 2023–24, total 49.21 Km has beentargeted. CRS (Commissioner of Railway Safety inspection) has inspected 19.13 Km sectionof Mahroi – Vijaysota on 27.06.2023. Another section of 30.11 Km is planned inDecember 2023 and 7.51 Km during FY 2024–25, total 180.5 Km out of 257 Km has beencommissioned so far.
6. Katni-Singrauli Doubling Project (Railway Electrification Work): Railwayelectrification work commissioned in Katni-Singrauli Doubling project during FY2022–23 is 78 RKM. Total 180.5 Km electrification completed with doubling.
7. Kiul-Gaya Doubling Project (cost plus project awarded by East Central Railwayshaving revised estimated cost of Rs. 200 Crore) : CRS inspection (Commissioner of RailwaySafety inspection) of Wazirganj-Tilaiya section (18.01 Km) was conducted on 02.09.2022 andthe section was commissioned at a permissible speed of 100 kmph; and, the entireLakhisarai -Sheikhpura section (25.32 Km) was commissioned with 100 kmph on 21.02.2023.Total 61.48 Km has been commissioned so far. Rest 61.64 Km has been planned during FY2023–24. During FY 2023–24, 1.405 Km of Kashichak yard commissioned on31.05.2023.
8. Sports Complex at Gholsapur, Behala Stadium, Eastern Railway Kolkata (the revisedestimate of Rs. 0.82 Cr.): An international standard fully air-conditioned multi-purposeIndoor Stadium with state-of-the-art facilities at Behala was inaugurated on May 30, 2022.
9. NCRTC Project (Revised Estimated Cost of Rs. 23 Crore): IRCON has secured theprestigious ADB (Asian Development Bank) funded OHE & Power Supply Work ofDelhi-Ghaziabad-Meerut RRTS Corridor of NCRTC through International Competitive Bidding.It marks a significant milestone as the first-ever semi-high-speed Rapid Rail Project inIndia to achieve the design speed of 180kmph and operation speed of 160kmph.
Major achievements are as follows:
a Introducing Spring type ATD of 3000 kgf tension, Glass Fibre Tension Insulator atinsulated overlap, Retractable Catenary System, which have been used for the first time inIndia for design speed of 180 kmph;
a Commissioning of 220 kV, 33 kV & 25 kV Gas Insulated Sub-stations (GIS), whichare compact in size, low in maintenance and reduce the requirement of space;
a Commissioning of overhead equipment (OHE) of priority section of the project fromSahibabad to Duhai including Duhai Depot, covering a distance of 17 RKM, in record time;
a Delivering results by initiating the trial run on 5th January ‘23;
a Commissioning of 2 nos. of 220kV Receiving Sub Stations (Ghaziabad RSS & MuradNagar RSS), associated 220 kV EHV Cabling from GSS to RSS and 5 nos. of 33 kV AuxiliarySub Stations (ASS);
a Civil works at the RSS locations have been executed in compliance to achieve highestrating of IGBC;
a Achieved ISO 45001:2018 (Occupational Health & Safety Management System) and ISO14001:2015 (Environmental Management System) certification for NCRTC Project;
INTERNATIONAL PROJECTS
In FY 2022–23, the contribution of international projects to the total revenueamounted to Rs. 11.84 Crore, which accounted for 4.15% of the operating turnover. This isin comparison to Rs. 80.43 Crore in FY 2021–22, representing 6.95% of the operatingturnover. Regarding PBIT, the contribution from foreign projects reached Rs. 00.41 Crore,indicating an increase of 96.67% compared to Rs. 1.03 Crore in the previous year. TheCompany continues to actively participate in new projects in foreign countries, and hasone ongoing project each in Bangladesh, Algeria, Sri Lanka, Nepal and Myanmar. Bycontinuing to diversify its business and geographical focus, the Company strives to securea broader range of projects to maximize business volume and profit margins. Efforts arebeing made to secure foreign projects through Line of Credit/ other project export fundingarrangements of EXIM Bank of India and projects funded through Multilateral fundingagencies.
During the year 2022–23, your Company has secured the order of Procurement ofDesign, Installation, Testing, Commissioning and Certifying of Signaling andTelecommunication System from Maho Junction (Including) to Anuradhapura (Excluding) in SriLanka under Indian Line of Credit.
ONGOING PROJECTS
The Company is executing the following projects in foreign countries: i. Bangladesh(a) Khulna-Mongla Port Rail Line project
The Company secured a project in Bangladesh for construction of Khulna-Mongla Port RailLine for Bangladesh Railway, at US$ 147.78 million (equivalent to approx. Rs. 11 Crore)and after approval of VO-2 at cost of US$ 185.73 million. The project includesconstruction of embankment, tracks, all civil works, major and minor bridges (exceptRupsha Bridge), culverts and implementation of EMP against Package WD1. Additional scopeof work was added in 2021. The completion tenure is extended upto September 2023, alongwith the additional scope of work including rehabilitation of 5 major bridges and 16 nos.of culverts and pending approval for variation VO-3.
(b) Agartala (India)-Akhaura project (Bangladesh portion)
The Company has also signed a contract for providing Technical Advisory Services (TAS)for Construction of New Railway Line from Agartala (India) -Akhaura (Bangladesh) andProject Management Consultancy (PMC) for Construction in Bangladesh Portion with Ministryof External Affairs (MEA), Government of India. The construction contractor for theproject is appointed by Bangladesh Railways and contract value is BDT 240.9 Crore(equivalent to approx. Rs. 09.47 Crore). The completion period of the constructioncontractor was extended up to June 30 2023, however the trial run of loco is planned by22.08.2023. The overall progress of the project is approximately 88.24 %. ii. Algeria
The project was awarded by ANESRIF, the National Agency for the Planning andImplementation of Railway Investments, Ministry of Transport, Government of Algeria, at avalue of Algerian Dinar 1,628 Crore (equivalent to approx. Rs. ,003 Crore) with completiondate on November 2012. The project involves the construction of the second line andupgradation of an existing line, with a diversion of 10 km from Oued sly to Yellel inAlgiers-Oran section of Algerian Railways. The value of the contract, including additionalworks for the construction of the double line, has been revised to Algerian Dinar 3,268Crore (equivalent to approx. Rs. ,342 Crore).
The project is likely to be completed in December 2023, as per the revised scope ofwork.
The work of 82 km new track line has been made operational in spite of the cash flowproblems of ANESRIF which is hampering progress, particularly the structural works awardedto sub-contractors. Work on the existing line has also started and a total_ stretch of71.5 km out of 74 km of the existing line, 6 out of 7 station buildings are ready to behanded over, and 8 major bridges have also been completed with the assurance of timelypayments. The client has assured uninterrupted payments, which will improve the progressof work and is expected to get completed by December 2023. iii. Sri Lanka (a)Upgradation of Railway Line from Maho_ Omanthai under Indian Line of Credit – TrackRehabilitation and ancillary works._
In Sri Lanka, the Company secured a project for
Upgradation of Railway Line from Maho_ Omanthai under Indian Line of Credit –Track Rehabilitation and ancillary works. The project is awarded by Sri Lankan Railwaysunder the Ministry of Transport and Civil Aviation, Government of Sri Lanka at a value ofUS$ 91.27 Million (equivalent to approx. Rs. 37.22 Crore) through competitive bidding.
Scope of work is_ rehabilitation of existing single line Broad Gauge track fromMaho-Omanthai of around 128 km length in Two Phases under Traffic Block of 5 Months and 6Months. The project was awarded on 29th April 2019 with completion period of 36 months(starting from date of receipt of advance payment, 29th Nov,2019). The projectis financed through EXIM Bank of India as per Indian line of credit. The date ofcompletion of the project as per the contract is November 28, 2022. The project is delayeddue to CoVid-19 pandemic restrictions and subsequent economic and fuel crisis in SriLanka.
The first phase of the Mega Traffic Block from Anuradhapura and Vavuniya (48.5KM) hasbeen commissioned in July, 2023. Further, granting 2nd Phase Traffic Block forrehabilitation of the remaining section from Maho to Anuradhapura (65 KM) is underdiscussion and not yet concluded. Likely date of completion of the Project will be June30, 2024.
The overall progress of the project is approx. 62%.
(b) Procurement of design, installation. Testing, commissioning, and certifying ofSignaling and Telecommunication system from Maho Junction (Including) to Anuradhapura(Excluding) under Indian Line of Credit:
Your Company also secured a project for "Procurement of design, installation, Testing,commissioning, and certifying of Signaling and Telecommunication system from Maho Junction(Including) to Anuradhapura (Excluding) under Indian Line of Credit"._ The projectwas awarded on December 04, 2022 by Sri Lankan Railways under the Ministry of Transportand Civil Aviation, Government of Sri Lanka at a value of US$ 14.90 Million (equivalent toapprox. Rs. 21.25 Crore) through competitive bidding. Completion period is 12 Months fromthe date of receipt of mobilization advance._ The project is financed through EXIM Bank ofIndia under Indian line of credit. Contract Agreement is not yet signed due to prevailingeconomic conditions in Sri Lanka. As such, the project is yet to start. iv. Nepal
In Nepal, the Company is executing the following two projects:
(a) Construction of BG line between Jogbani (India)- Biratnagar (Nepal) onIndo-Nepal border
The project involves construction of new BG rail line from Bathnaha (India), Ch. 0.00Km to Biratnagr (Nepal), Ch. Km 18.60. The proposed alignment in Indian portion (5.45 Km)falls in Araria district of Bihar State under Katihar Division of North East FrontierRailways and on the Nepal side (13.15 Km), in Morang district.
The revised value of contract of Rs. 01.65 Crore is under approval of the Ministry ofExternal Affairs. The section from Bathnaha (India) Ch. 0.00 Km to Nepal Custom Yard(Nepal) Ch. 6.70 Km has been completed and ready for commissioning. The work is inprogress in the remaining portion. Progress is hampering due to obstructions being createdby local land owners.
The overall progress of the project is approximately 86%.
(b) Construction of BG Line by Gauge conversion Jayanagar (India) –Bijalpura (Nepal) with extension upto Bardibas on India Nepal Border
The Project involves construction of a new BG rail line from Jaynagar (India), Ch. 0.00Km to Bijalpura (Nepal) Km.52.336 with extension up to Bardibas,
Ch. Km 68.72. The proposed alignment in the Indian portion (2.975 Km) falls inMadhubani district of Bihar State and on the Nepal side (65.745 Km) in Mahottari district.
The revised estimate of Rs. 83.83 Crore is under approval of the Ministry of ExternalAffairs.
Your Company on behalf of the Government of India has handed over the newlycommissioned cross border rail section (Section-1) from Jayanagar (Km. 0.00) to Kurtha(Km. 34.90) to Government of Nepal on October 22, 2021 which was inaugurated throughvirtual mode by the Honble Prime Minister of India and the Honble Prime Minister ofNepal on April 02, 2022. The first phase of 34.9 Km Jaynagar (India) – Kurtha (Nepal)section is part of 68.72 Km Jaynagar-Bijalpura-Bardibas rail link being built underGovernment of India grant assistance of NPR 8.77 billion. Section-2 from Km 34.900 to km52.34, Kurtha- Bijalpura has also been completed. In Section-3 from Km 52.34 to Km 68.72,Bijalpura-Bardibas land has not yet been acquired by the Government of Nepal. Theoverall progress of the project is approximately 73%. v. Myanmar
During FY 2022–23, the Company has secured a project in Myanmar, for Balance workof Construction of Road from Paletwa (Myanmar) to Zorinpui (Mizoram) (Kaladan RoadProject) under Kaladan Multi-Modal Transit Transport Project (KMMTT Project), from theMinistry of External Affairs, on EPC mode at a lump sum cost of Rs. 780 Crore. With thisproject, it is intended to open up an alternate route to North-East Region and connectMizoram with Chin State of Myanmar at Zorinpui. The agreement for the execution of thisproject has been signed on March 07, 2022 and the project is to be completed within 40months from the date of the signing of the agreement.
At present, in 50 Km stretch, work has commenced in 40 Km from Paletwa end (Myanmar)& 10 Km from Zorinpui end (India-Myanmar Border). Work in the remaining 50.90 Kmstretch is expected to start after Oct2023 once the monsoon season is over.
REAL ESTATE SECTOR
IRCON has identified Real Estate Sector as one of the sectors for diversification,keeping in view the tremendous potential in this Sector. Your Company had acquired 8 plotsin different sectors, on leasehold basis for 90 years, at NOIDA and has successfullyLeased out 22,023 Sq. mt. of built – up space for Commercial and Office use. TheCompany has also developed property in Sector 32, Gurugram, Haryana and this property isregistered with the trademark authorities in India as ‘IRCON INTERNATIONAL TOWER.About 2079Sq. mt. carpet Area of this property has been Leased Out to government agenciesand balance available space is in the process of leasing out.
IRCON Retail Mall at Sector – 43, NOIDA, Uttar Pradesh and Commercial cum OfficeBuilding at Sector -48, NOIDA, Uttar Pradesh has been leased out completely. The Companyhad entered into a Memorandum of Understanding (MOU) on March 26, 2018, with the Rail LandDevelopment Authority (RLDA) for transfer of leasehold rights to IRCON for commercialdevelopment on the land parcel measuring 4.3 (four points three) Hectare at Bandra East,Mumbai, Maharashtra, for 99 years against the payment of Upfront Lease Premium. Since MoUhas expired and the work being unable to commence on account of non-finalization ofa*greement between Mumbai Metropolitan Region Development Authority (MMRDA) and RLDA / MoR,the land has been returned back to RLDA and consultancy contracts for commercialdevelopment of the plot have also been novated to RLDA.
COMPANIES, JOINT VENTURE COMPANIES AND ASSOCIATE COMPANIES
A brief background on the eleven subsidiary companies and seven joint venturescompanies of IRCON along with their financials and performance is given at Appendix-B. Interms of the Companys Policy on the determining the "Material Subsidiary" andRegulation 24A of the LODR Regulations, for the financial year ending March 31, 2023, noneof the subsidiary company is a ‘material subsidiary i.e. whose total income or networth exceeds 10% of consolidated income or net worth of IRCON in the immediatelypreceding financial year i.e. March 31, 2022.
COMPLIANCES OF PRESIDENTIAL DIRECTIVES
Presidential directives as issued from time to time on various matters like reservationpolicy for reserved category persons, SC/ST roster in the employment, revision in payscale 2017 etc. have been complied with.
OFFICIAL LANGUAGE
The Company is undertaking various novel and encouraging initiatives for extensive useof Hindi in the office. Some of them are: a. Pledge by all employees to work in Hindicompletely on last Monday of every month. b. Rajbhasha Sanghosthi is being conducted on aquarterly basis in Corporate Office. c. Birthday wishes to employees, a thought and aword, contributed by different departments on rotational basis, a poem by renowned poetsetc. are being displayed in Hindi at the reception. d. Thought of the day and a word inHindi is displayed at reception, which is contributed by departments daily on rotationbasis.
Every third month a meeting is conducted by Hindi Department with any one department inthe Corporate Office in order to resolve issues faced in working in Hindi. In addition,regular quarterly meetings of Official Language Implementation Committee and quarterlyworkshops for effective use of the UNICODE system and official language are beingconducted. Employees are being encouraged through various incentive schemes for theimplementation of the Annual Programme of the Official Language Department. The bilingualfacility has been introduced for computer systems and mobile phones used by officials ofthe Company. Bilingual formats have been made available at IRCONs internal website foruse by the employees.
COMPLIANCE OF RIGHT TO INFORMATION ACT, 2005
In accordance with the provisions of the Right to Information Act, 2005, IRCON hasensured the availability of updated information, including the names of the AppellateAuthority, Central Public Information Officer, Assistant Public Information Officer, andState Level Public Information Officers on our website. We have promptly responded to thequeries received within the specified time frame. These queries primarily pertained toservice matters, recruitments, finance, contracts, corporate social responsibility (CSR),and projects. The details of RTI cases have been regularly published on the website of theCentral Information Commission (CIC) on a quarterly and annual basis. Additionally,a copy of the same is forwarded to the Ministry of Railways for information.
During the year 2022–23, 204 applications and 38 first appeals were received andat the beginning of the year 01 application was under process for disposal within theallowable time limit (i.e., total 205 applications and 38 appeals during the year). Out ofwhich, 193 applications (including opening balance of 1 application) and 38 First Appealswere disposed of. As on March 31, 2023 12 applications and 02 appeals were under processfor disposal within the allowable time limit.
COMPLIANCE OF IMPLEMENTATION OF PUBLIC PROCUREMENT POLICIES FOR MSEs AND PREFERENCE TOMAKE IN INDIA.
The Company has in place a comprehensive Purchase Preference Policy since June 2012which is in line with the Public Procurement Policy for Micro and Small Enterprises
(MSEs) Order, 2012 notified by the Ministry of Micro, Small and Medium Enterprises(Ministry of MSME) under section 11 of Micro, Small and Medium Enterprises DevelopmentAct, 2006. IRCON uses Central Public Procurement portal (CPPP) and Governmente-Marketplace (GeM) portal for its procurement, which provides facilitation ofregistration of MSEs firms registered with any statutory bodies specified by Ministry ofMSME.
The Company has always encouraged local suppliers to participate in its tenderingprocess and also promote them through training and hand holding programs. Our continuedpursuit in this direction has seen improved participation of small local players andsocio-economic development of communities in and around operational locations.IRCONhastakenseveralstepsforeffectiveimplementation of MSE policy. The benefits of waiverof cost of tender documents and deposit of earnest money and purchase preferenceprescribed under the Policy, are incorporated in the tenders for procurement of goods andservices. The company has been extensively following the guidelines of Government onprocurement through GeM and provisions are also made in tenders to promote "Make inIndia" directives of the Government of India. Tenders valuing upto Rs. 00 Crore wereinvited during FY 2022-23 using national competitive bidding in compliance to PublicProcurement (Preference to make in India), Order 2017.
During the FY 2022–23, the Company has procured items valuingRs.4.52CrorefromMSEvendorsagainstexpenditure valuing Rs. 02.39 Crore (excluding theprocurement of items which are beyond the scope of MSEs) towards material, stores &service, thereby achieving 43.48% procurement from MSEs in compliance with the ProcurementPolicy. The Company has conducted one national level Special Vendor Development Program atthe Corporate Office, Delhi on December 16, 2022.
In compliance with the Micro, Small and Medium Enterprise Development Act, 2006, theCompany has onboarded on the Trade Receivables Discounting System (TReDS) platform, w.e.f.January 25, 2018, to facilitate the financing of trade receivables of MSEs by discountingof their receivables and realisation of their payment before the due date. A clause inGeneral Conditions of Contract is incorporated for MSEs vendors willing to avail thefacility.
HUMAN RESOURCE DEVELOPMENT
IRCON recognizes that its employees are fundamental to its success and play a crucialrole in safeguarding the organizations values and culture. The organization firmlybelieves that its achievements rely on the alignment and performance of its workforce, aswell as maintaining a positive work environment. It is committed to establishing acollaborative, inclusive, and performance-driven atmosphere that fosters learning, growth,and overall employee well-being.
IRCONs Human Resource (HR) Philosophy revolves around empowering and nurturingemployees, allowing them to reach their full potential, encouraging innovative ideas, andproviding rewards based on performance. The companys work culture is characterized byopenness and dynamism, empowering employees to take initiative in their roles with fullsupport from top management. At IRCON, the Human Resource Management (HRM) team isdedicated to recruiting, retaining, and developing the right people. They continuouslystrive to create an optimal work environment that is inclusive, open, diverse, andprovides equal opportunities for all employees. The company has aligned its HR strategy,systems, and procedures with its business objectives, focusing on building competenciesnecessary for organizational success. This strategy serves as a motivating force foremployees, bridging the gap between the companys future needs and individual aspirations.
IRCON maintains a performance-oriented culture where the contributions of everyemployee are measured and appropriately recognized. The Company has implemented a robustPerformance Management System (PMS) that aligns with its philosophy of rewarding andacknowledging merit at all levels. This system supports the professional development ofexecutives through a structured approach integrated into the companys performanceappraisal process. IRCON takes pride in its highly motivated and competent human resourcesand acknowledges their significant contributions.
MANPOWER STRENGTH
The total manpower strength of IRCON as on March 31, 2023, stood at 1341, (previousyear 1278) which included 933 regular employees, 35 employees on deputation, 369 oncontract (including service contract) and 04 on fixed tenure basis. Out of the total 1341employees of the Company, 1284 are posted on Indian projects and 57 on internationalprojects. Among 1341 employees, 900 are technically and professionally qualified. Therewas a total of 65 women employees as on March 31, 2023. The overall income per employeefor FY 2022–23 stood at Rs. .65 Crore as compare to Rs. .62 Crore in FY 2021–22.During the year, the total newly employed personnel stood at 266 which included 69 regularemployees, 9 employees on deputation, and 188 on contract (including service contract).
RESERVATION IN EMPLOYMENT
The Company continues to give utmost importance to the implementation of the policiesand directives of the Government of India in matters relating to reservations in theemployment of candidates belonging to Scheduled Caste (SC) / Scheduled Tribe (ST) / otherbackward classes (OBC) and differently-abled categories. There was a total of 521 SC / ST/ OBC and differently-abled employees as on March 31, 2023.
Further, during the FY 2022–23, out of the 66 employees inducted against regularposts, 29 belong to SC / ST / OBC and differently-abled categories. Similarly, out of the164 employees recruited against the contractual positions, 84 belong to SC / ST / OBC anddifferently- abled categories.
During the FY 2022–23, training has been given to 437 employees, out of which 171belong to SC/ST/OBC and differently-abled categories. To ensure the welfare of theseemployee categories, the Company has appointed Liasion Officers.
The infrastructure of the Company is well built catering to the needs ofdifferently-abled employees.
TRAINING AND HUMAN RESOURCE DEVELOPMENT
IRCON puts a lot of emphasis on development and career progression of employees.Training programs are organised throughout the year. During the FY 2022–23, in- housetraining programmes across all levels of employees were organised. Professionalprogrammes, workshops, and seminars organised by reputed and prestigious institutes /agencies were carefully identified in line with business needs of IRCON, and suitableofficers were nominated for such programmes.
The Company has been continuously taking steps for building capacity of its humanresource through training in functional and general management areas, contract andarbitration, leadership, information technology, as well as soft skills. External facultyis arranged wherever required, and officials are nominated for carrying out workshops andseminars with reputed institutes. Employee Development has always been a priority for theCompany, and various training and development plans have been initiated from time to time.During the FY 2022–23 a total 816 man- days training was imparted to officials ofIRCON through workshops, seminars, conferences, in-house training and training in externalinstitutes.
EMPLOYEE WELFARE
The Company has adequate and robust schemes in place for the welfare of the employees.These are health cover, medical scheme, post-retirement medical scheme, post- retirementpension scheme, periodic health check-ups at regular intervals, allowances, self-lease forresidential accommodation, educational scholarships to the wards of employees, a one-timeeducational grant for admission to professional degrees and diploma courses, educationalawards to meritorious children of employees, educational assistance to the wards ofdeceased employees, assistance for marriage of daughters and dependent sisters ofemployees in non-executive categories, and resort facilities for employees and theirfamily members on concessional rates through Dalmia and Sterling Resorts.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITIONAND REDRESSAL) ACT, 2013
Your Company is dedicated to creating a supportive and secure working environment forits women employees. The Company has implemented a comprehensive policy for thePrevention, Prohibition, and Redressal of Sexual Harassment at the Workplace, whichapplies to all employees, including regular employees, deputationists, temporary workers,ad-hoc employees, contract workers, daily wage workers, and individuals employed throughagencies or contractors. This policy, along with its details, can be accessed on theCompanys website. Furthermore, this policy extends to wholly-owned subsidiary companiesof IRCON that are formed as Special Purpose Vehicles.
Your Company has ensured compliance with the provisions concerning the formation of theInternal Committee (IC) as mandated by the Sexual Harassment of Women at Workplace(Prevention, Prohibition, and Redressal) Act, 2013. The IC comprises five members,including four Company officials and one external member from an NGO. Additionally,provisions related to the prohibition of sexual harassment have been incorporated into theIRCONs Conduct, Disciplinary, and Appeal Rules. At the beginning of the year, nocomplaint was pending. During the year, one complaint of sexual harassment was receivedand it was appropriately addressed within the stipulated time frame. As of the end of theyear, no complaint was pending.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
Your Company is deeply committed to addressing social, ethical, and environmentalconcerns within the areas where it operates. We strive to contribute to the development ofa sustainable society for future generations while meeting the expectations of ourstakeholders. Throughout the years, IRCON has identified various Corporate SocialResponsibility (CSR) concerns and implemented actions and initiatives that have hada positive impact on society and the environment. Our CSR activities cover a wide range ofareas, including health, education, employment and skill development, environmentalsustainability, clean water and sanitation, sports, culture and heritage, ruraltransformation, and contributions to the PM CARES Fund.
To guide our CSR efforts, we have the Corporate Social Responsibility &Sustainability Policy (CSR Policy) in alignment with our Companys vision. This policylays down guidelines and mechanisms that the Company must adhere to when carrying out CSRprojects. In accordance with the guidelines issued by the Department of Public Enterprises(DPE) through their Office Memorandum dated December 10, 2018, along with the update onMay 12, 2021, CPSEs (Central Public Sector Enterprises) are required to follow atheme-based approach for their CSR activities. The Company allocates a minimum of 60% oftheir annual CSR budget for thematic programs and give preference to the Aspirationaldistricts in their CSR initiatives. For the fiscal year 2022–23, the common themechosen by DPE for CSR activities of CPSEs is "Health & Nutrition." Byadhering to these guidelines and embracing the chosen theme, we are actively workingtowards making a positive difference in society and contributing to the well-being of ourcommunities. During the past year, our company took a focused approach to conceive andimplement CSR activities with the aim of generating maximum impact for the targetbeneficiaries. These initiatives were carried out in collaboration with reputableimplementing agencies. In the fiscal year 2022–23, the actual expenditure on CSRactivities amounted to Rs. 0.12 Crore, surpassing the allocated budget of Rs. 0.10 Crore.Within this budget, a significant portion was dedicated to the health sector, including acontribution of Rs. .53 Crore to the PM CARES Fund.
The CSR Policy, which provides comprehensive guidelines for conducting CSR activities,is available on our Companys website: www.ircon.org. Furthermore, the Annual Report onCSR & Sustainability activities, in compliance with Section 135 of the Companies Act,2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended,is appended to this report, forming an integral part of it.
QUALITY, HEALTH AND SAFETY QUALITY MANAGEMENT SYSTEM
IRCON is a precursor Public Sector Organization in adopting the Quality ManagementSystem Certification in the domestic as well as International Markets. Quality ManagementSystem (QMS) has been successfully sustained and continually improved since 1996 when theCompany as a whole was first certified for ISO 9002:1994 by TUV SUD Private Limited. IRCONhas continued the certification and sustained the system as per the latest version ofQuality Management Standards, i.e. ISO 9001:2015 (by periodical re-certification auditafter the expiry of every three years). Latest re- certification audit was conducted inSeptember, 2022, whereby the Company has been re-certified by TUV SUD South Asia PrivateLimited for a period of another three years, i.e. up to March 2026.
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM
The Company established an Occupational Health & Safety Management System and wascertified for ISO 45001:2004 in October, 2011. The latest surveillance audit for ISO45001:2018 was conducted in August 2022, whereby the Company has been re-certified foranother two years, i.e. up to December, 2024.
ENVIRONMENT MANAGEMENT
The Company established an Environment Management System (EMS) and was certified forISO 14001:2004 in October 2011. The latest re-certification audit for ISO 14001:2015 wasconducted in November 2022 whereby the Company has been re-certified for another threeyears, i.e. up to February 2026.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND UPGRADATION
IRCON is conscious of the limited nature of conventional sources and the importance ofusing energy resources wisely. The Company has been consistently laying emphasis onutilizing energy efficient equipment in its office premises and in various projects so asto minimally effect on the ecology and environment. Towards conservation of energy, IRCONhas taken following steps during previous years: a) IRCON has installed a total of 90 kWRoof Top Grid Connected Solar Power Plant at Corporate Office which is a step to conserveenergy and contributing to environment through usage of Green Energy. Total energyproduced by Solar Power plant is 44,853 units of kWh which is 3.1% of the energy beingdrawn from BSES. IRCON has also installed a total of 75 kW Roof Top Grid Connected SolarPower Plant at its Gurgaon office building. b) Capacitor banks have been installed atCorporate Office building to improve power factor, which further reduces the ElectricalEnergy consumption. c) The internal lighting of Corporate Office building byenergy-efficient LED lamps also adds in an energy saving of approx. 3,00,000 units of kWhper annum when compared with normal lights. d) Automatic / Dynamic Reactive Power Factor(APF) correction / compensation panels of Insulated
Gate Bipolar Transistors (IGBT) technology of 10.7 MVAR capacity have been designed andare being installed at the Receiving Substations (RSS) for Delhi-Ghaziabad-Meerut RRTScorridor of NCRTC project for RSS Energy Conservation. Moreover, the RSS Control RoomBuilding is also constructed with highest rating of Indian Green Building Council (IGBC)standards to conserve energy. e) IRCON has also installed LED Lights for energyconservation which reduces energy consumption by upto 50% in various projects like LocoShed at Bondamunda, Staff Quarters at Mathura-Kasganj- Kalyanpur RE Project,Katni-Singrauli RE Project, etc. and are also planned to be installed at USBRL E&MTunnel Project. f) Capacitor Banks of 2400 kVAR capacity each have also been installed atBaramulla, Qazigund & Budgam TSS (J&K) for USBRL RE project and 04 Nos. TractionSub-Stations (TSS) of Katni-Singrauli Project to improve the power factor. Further,Capacitor Banks of 5500 kVAR capacity each have been installed in Lalkuan & KashipurTSS of Moradabad-Kashipur RE Project of Izzatnagar division. More than 34,750 units ofelectricity on a daily basis will be conserved on installing capacitor banks once electrictrains are in operation. Moreover, for Tunnel Substations a total of 16 MVAR capacitorbanks are being installed to regulate the reactive power generation due to jet fans,thereby reducing energy consumption.
STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATE SOURCES OF ENERGY:
The Company is utilising the following as an alternate source of energy: a) IRCON isalso providing the features similar to the Green Buildings Constructions at CorporateOffice, Gurugram building and its project offices, thereby reducing the environmentalimpacts on water, materials, waste, energy and carbon emission. IRCON has installed solarpanels at various offices/projects; and LED lights, sensor lights & sensor taps arealso being used in the Corporate & other offices to conserve electricity. b) IRCON hasalso installed Solar Power Photovoltaic Panels for its office Complex in Sangaldan(J&K) with a capacity of 110 kWp.
CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT:
IRCON has planned to invest Rs. .2 Cr. approximately for replacing the existingHeating, Ventilation & Air Condition (HVAC) System at Corporate office with newtechnology Energy Efficient Inverter Type Air Conditioning System which will reduce theenergy consumption by 20–30%.
Further, the old refrigerant of R-22 shall be replaced by the new technologyrefrigerant R-410A which is environment friendly and reduces the carbon emissions helpfulin sustainable development.
TECHNOLOGY ABSORPTION AND UPGRADATION EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION:
Towards technology upgradation, the Company had purchased a New Track Construction(NTC) machine in 2019 for Dedicated Freight Corridor Project, CTP-12 (DFC project), whichis successfully commissioned to improve productivity, safety, efficiency and quality intrack laying at DFC Project. Your Company has secured a project for construction ofMumbai-Ahmedabad High Speed Railway (MAHSR) Project on December 24, 2021, which has beendesignated as the first High Speed Railway networks planned to be constructed in India.For this network the Japanese system of the Shinkansen Bullet Train has been selected forits safety, performance and reliability record. After securing the project, IRCON hasfinalized the detail programme of High- Speed Track construction based on Shinkansentechnology for overall total length of 237 Km between Vapi and Surat Railway Stations.This Shinkansen track would be capable of running bullet trains at maximum permissiblespeed of 350 Kmph. The company has procured rail welding machine under Make In Indiascheme and is in the process of commissioning. The Shinkansen technology will use RCCtrack bed, J Track slabs, Cement Asphalt Grout, Special fittings and JIS Rails instead ofconventional ballast-less track being constructed in Metro network of Railways in India.
BENEFITS DERIVED LIKE PRODUCT IMPROVEMENT, COST REDUCTION, PRODUCT DEVELOPMENT ORIMPORT SUBSTITUTION
With the deployment of NTC machine, 260-meter-long rail panel can be laid with uniformsleeper spacing and minimum manual interface. This ensures a better quality of tracklaying and faster progress of track laying with 1.5 km completion per day.
IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST THREE YEARS RECKONED FROM THEBEGINNING OF THE FINANCIAL YEAR) – N.A. RESEARCH AND DEVELOPMENT
The Company being primarily an EPC company does not undertake any pure research projectbut takes the help of consultants and firms to innovate and to develop methods andtechniques to execute projects in a cost-effective manner, with requisite quality, toenhance the technical competence and efficiency.
INFORMATION TECHNOLOGY AND ERP
The Companys Information Technology (IT) department offers a range of servicesencompassing Data Networks, implementation of company-wide software applications,procurement of IT hardware equipment, as well as the implementation of Highway TrafficManagement Systems (HTMS), Toll Management Systems (TMS), and Weigh-in-Motion systems formajor highway projects undertaken and operated by IRCON and its Joint Venture companies asconcessioners. IT serves not only as a service provider but also plays a vital role inenhancing productivity within IRCON.
IRCON has recently upgraded to SAP S/4 Hana as Enterprise Resource Planning (ERP)application software for the operations of Finance, Controlling and Human ResourceManagement. It is leading to company wide information availability, transparency and hasenabled faster decision making. SAP Business Objects (SAP BO) an analytical product of SAPwas added to SAP implementation to automate on-demand financial reporting. This reportingtool fetches real-time data from SAP and helps in preparation of Financial Statements ofthe Company. Employee Self Service Portal, Finance and HCM modules of SAP have been rolledout for entire organization and five pilot locations are under go live for fullfunctionalities. The financial statements for the year ended March 31, 2023 were preparedfrom SAP S4-HANA and salaries of employees are also being processed through its payrollmodule from April 2022 onwards. Fully functional SAP S4-HANA after implementation willcover end-to-end business processes of IRCON. S4-HANA ERP softwares server infrastructureis hosted on RailTel cloud on a MEITY empaneled Datacenters to ensure secured access inhigh availability environment where in there is scope for capacity augmentation withoutdisruption of regular services.
E-Office system is deployed across IRCON for all domestic and foreign projects. It is astep towards paperless office initiative from Government of India for the approvals andmovement of files, note sheets and other official documents. It is complete replacement ofphysical file system with loss less and undeletable data facility, and Digital Signatureauthentication features.
Implementation of S4-HANA as well as e-office will be in conjunction to each other, andhas helped IRCON to march ahead with near paperless requirement in the entireorganization.
Dedicated video conferencing facility based on cutting edge AI based online meeting isbeing widely used for conducting review meetings with project offices, trainings,promotion interviews and contract management issues etc.
Cyber and Social Engineering attacks are a big concern now a days for organizationsinformation security. IRCON has made efforts in this area and has formulated a CyberSecurity Management Plan. Incidents of Cyber-attack are reported to CERT-IN for record andfurther guidance. Steps are being taken to ensure that proper Cyber security audits aredone as per industry practice and norms.
CORPORATE GOVERNANCE
The Company places great emphasis on adhering to corporate governance guidelines andbest practices, recognizing their significance in enhancing long-term shareholder valueand upholding minority rights. It considers it a fundamental obligation to provide timelyand accurate information regarding the Companys operations, performance, leadership, andgovernance. In compliance with Regulation 34 of the LODR Regulations and DPE Guidelines onCorporate Governance for Central Public Sector Enterprises issued in May 2010, theCorporate Governance Report, along with the compliance certificates of CorporateGovernance norms under the aforementioned LODR Regulations and DPE Guidelines, is attachedand constitutes an integral part of this report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 31, 2023, the Company has ten directors of which four are whole-timedirectors [Chairman & Managing Director, Director (Finance), Director (Works) andDirector (Projects) (additional charge)], two Government Nominee Directors and fourIndependent Directors.
The Company has requested the Ministry of Railways for appointmentof requisitenumberofIndependentDirectors in order to comply with the statutory requirements. There were twovacancies to the post of Independent Directors. Pursuant to Section 203 of the CompaniesAct, 2013, the Board of Directors had declared Chairman & Managing Director (CMD) asdeemed Chief Executive Officer (CEO) and all the Whole-time Directors and CompanySecretary as Key Managerial Personnel (KMP) of the Company. The senior most financeofficial of the Company is designated as Chief Financial Officer (CFO) and KMP.
Board of Directors & Key Managerial Personnel (KMP) as on March 31, 2023
The Board of Directors of the Company as on March 31, 2023 were Executive (Functional)Directors viz.– Shri Yogesh Kumar Misra (DIN: 07654014), Chairman
& Managing Director & CEO, Smt. Ragini Advani, (DIN: 09575213), Director(Finance), Shri Parag Verma, (DIN: 05272169) Director (Works), Shri Sandeep Jain (DIN:
09435375) Director (Projects) (Additional Charge); Part-time (Official) Directors viz.Shri Brijesh Kumar Gupta (DIN: 10092756) and Shri Dhananjaya Singh (DIN: 08955500); beingGovernment Nominee Directors and Independent Directors viz. Shri Ajay Kumar Chauhan (DIN:09394953), Shri Dipendra Kumar Gupta (DIN: 09398271), Smt. Ranjana Upadhyay (DIN:07787711) (woman independent director) and Dr. Kartik Chandulal Bhadra (DIN: 09453387).
In addition to the CEO and whole-time directors, other KMP, as on March 31, 2023 wereShri B Mugunthan, Executive Director (Finance) & CFO and Ms. Ritu Arora, CompanySecretary.
Appointments and cessation of the Directors and KMP during and after close of the FY2022–23
Changes in the post of Chairman & Managing Director: After close of the financialyear 2022–23, pursuant to Railway Board letter dated April 29, 2023, with effect fromApril 29, 2023 Shri Yogesh Kumar Misra (DIN: 07654014) relinquished the charge of the postof Chairman & Managing Director and Shri Brijesh Kumar Gupta (DIN: 10092756) assumedthe additional charge of the post of Chairman & Managing Director. Shri Gupta isproposed to be regularized as Chairman & Managing Director (Additional Charge) of theCompany at the ensuing AGM of the Company. Changes in the post of Functional DirectorsSmt. Ragini Advani (DIN: 09575213) was appointed as Director (Finance) (AdditionalDirector) of the Company w.e.f. April 19, 2022 and regularized as Director (Finance) onJune 29, 2022 through Postal Ballot.
Shri Parag Verma (DIN: 05272169) was appointed as Director (Works) (AdditionalDirector) of the Company w.e.f. September 21, 2022. He was regularized as Director (Works)on December 14, 2022 through Postal Ballot. Shri Shyam Lal Gupta (DIN: 07598920) ceased tobe Director (Projects) on December 31, 2022, due to superannuation. Shri Sandeep Jain,IRSE, Executive Director Planning (Civil & PSU) – Railway Board, entrusted withthe additional charge of Director (Projects) (Additional Director) w.e.f. January 12, 2023and ceased to be Director (Projects) (additional charge) on July 07, 2023, due torelinquishment of charge on appointment of regular incumbent to the post of Director(Projects). Shri Anand Kumar Singh (DIN: 07918656), IRSE on selection by PESB has beenappointed as Director (Projects) (Additional Director) w.e.f. July 07, 2023. Shri Singh isproposed to be regularized as Director (Projects) of the Company at the ensuing AGM of theCompany.
Shri Mohit Sinha (DIN: 00843548), Additional Member (Revenue), Railway Boardrelinquished the additional charge of the post of Director (Finance) of the Company w.e.f.April 19, 2022.
Changes in the post of Part-time (Official) Director / Government Nominee Director:Shri Brijesh Kumar Gupta (DIN: 10092756), Additional Member (CE), Railway Board wasappointed as Part-Time (Official) Director (Government Nominee Director) (AdditionalDirector) of the Company w.e.f. March 29, 2023 who then assumed the additional charge ofthe post of Chairman & Managing Director w.e.f April 29, 2023. Shri Rajesh Argal,former Additional Member (Planning), Railway Board ceased to be Part-Time (Official)Director (Government Nominee Director) of the Company w.e.f. July 31, 2022 on attainingthe age of superannuation. Shri Ram Prakash, Additional Member (Planning) (L/A) (DIN:09746225) was appointed as Part-Time (Official) Director (Government Nominee Director)(Additional Director) of the Company w.e.f. September 23, 2022. He was regularized onDecember 14, 2022 through Postal Ballot and he ceased to be Director on January 31, 2023on attaining the age of superannuation.
Regularization of Independent Directors:
Shri Ajay Kumar Chauhan, Shri Dipendra Kumar Gupta, Smt. Ranjana Upadhyay (WomenIndependent Director) and Dr. Kartik Chandulal Bhadra who were appointed as IndependentDirectors (Additional Directors) during FY 2021–22 were regularized as IndependentDirectors on the Board of the Company on June 29, 2022 through Postal Ballot.
Change in the KMPs:
Shri B Mugunthan, Executive Director (Finance), was appointed as CFO & KMP w.e.f.April 26, 2022.
The complete details of appointment / relinquishment of post by the Directors and otherrelated details are provided in the Corporate Governance report forming part of AnnualReport.
INDEPENDENT DIRECTORS DECLARATION
The Company has received necessary declaration from all Independent Directors thathe/she meets the criteria of independence as laid out in Section 149(6) of the CompaniesAct, 2013 and Regulations 16(1)(b) and 25(8) of the LODR Regulations. The declarationshave been noted by the Board of Directors.
The Ministry of Corporate Affairs (MCA) has issued notifications in October2019, relating to the creation and maintenance of the data bank for independent directorsby Indian Institute of Corporate Affairs at Manesar, Haryana (IICA). Under Section150(1) of the Companies Act, 2013, IICA conducts Online Proficiency Self-Assessment for
Independent Directors. Accordingly, all the Independent Directors of the Company areregistered with data bank of IICA.
APPOINTMENT / RE-APPOINTMENT OF DIRECTORS THROUGH POSTAL BALLOT
Pursuant to the provisions of Section 152(2) of the Companies Act, 2013 every directorof the Company has to be appointed in the general meeting of the Company. Further pursuantto LODR Regulations, every listed entity shall ensure that approval of shareholders forappointment of a person on the Board of Directors is taken at the next general meeting orwithin a time period of three months from the date of appointment. However, CPSEs areallowed that the approval of the shareholders for appointment or re-appointment of aperson on the Board of Directors or as a Manager is taken at the next general meeting.
RETIREMENT OF DIRECTORS BY ROTATION
In terms of Section 152 of the Companies Act, 2013, the provisions in respect ofretirement of Directors by rotation will not be applicable to the Independent Directors.In view of this, all directors (other than the Independent Directors) are considered forretirement by rotation. Accordingly, as per provisions of the Companies Act, 2013, Smt.Ragini Advani, Director (Finance) is liable for retirement by rotation at the ensuingAnnual General Meeting (AGM) of the Company and being eligible, offer herself forre-appointment.
The details of such Director seeking re-appointment / appointment at the ensuing AGMare contained in the Notice convening ensuing AGM of the Company.
BOARD & COMMITTEE MEETINGS
Board Meetings:
The Board met eight (8) times during the FY 2022–23, on April 26, 2022; May 27,2022; July 22, 2022; August 08, 2022; September 23, 2022; November 11, 2022; December 31,2022; and February 08, 2023. The necessary quorum in terms of LODR Regulations was presentfor all the meetings. The intervening gap between the meetings was within the periodprescribed under the Companies Act, 2013, DPE Guidelines and LODR Regulations.
During the FY 2022–23, all the meetings (except one) of the Board were held at theCompanys Registered Office, in New Delhi, through physical and Video Conferencing mode.One Board Meeting was held at Shillong, Meghalaya in compliance with the direction of theDPE for holding Board Meeting / Strategic meets of CPSEs at destinations which havepotential for development of tourism sector in the country.
Committee meetings:
Your Companys Board has the following committees:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. Risk Management Committee
5. Corporate Social Responsibility & Sustainability Committee
6. Project Progress Review Committee
During the FY 2022–23, the Audit Committee of the Board met eight (8) times, theNomination & Remuneration Committee met five (5) times, Stakeholders RelationshipCommittee met one ( 1 ) time; Risk Management Committee of the Board met two (2) times;the Corporate Social Responsibility & Sustainability Committee met six (6) times, andthe Project Progress Review Committee met one (1) time.
Details of constitution, terms of reference of the Committees, and attendance ofDirectors at meetings of the Committees are provided in the Corporate Governance Reportforming part of Annual Report.
Separate Meeting of Independent Directors
In compliance with the provisions of Regulation 25(3) of LODR Regulations, Schedule IVof the Companies Act, 2013 and DPE OM dated March 20, 2013, one separate meeting ofIndependent Directors was held on March 16, 2023 (which continued on March 17, 2023)without the presence of other Board Members.
SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA
IRCON being a Government Company, the appointment of directors on its Board is made bythe President of India through the Administrative Ministry, Ministry of Railways. The keyqualifications, skills, expertise and attributes of the Directors is included in theCorporate Governance Report.
PERFORMANCE EVALUATION
IRCON is a Government Company that operates under the administrative control of theMinistry of Railways. The appointment procedure for all directors is prescribed by theGovernment of India, and the directors of the Company have been appointed in accordancewith this procedure. The selection of functional directors, including the Chairman andManaging Director (CMD), follows the recommendations of the Public Enterprises SelectionBoard (PESB) in line with the procedure and guidelines set by the Government of India. TheDepartment of Public Enterprises (DPE) has also established a system and procedure forevaluating the performance of functional directors, including the CMD.
The evaluation framework for assessing the performance of functional directorsencompasses several key areas: a) The performance of the Company under the Memorandum ofUnderstanding (MOU) signed with the Ministry of Railways, including the achievement oftargets set for each respective director. b) The evaluation process involvesself-assessment by the functional directors themselves, followed by an assessment by theCMD, and finally, a comprehensive evaluation by the Ministry of Railways (theAdministrative Ministry). c) For the CMD, the evaluation includes self-assessment and afinal evaluation conducted by the Ministry of Railways.
Regarding Government Nominee Directors, their evaluation is carried out by the Ministryof Railways in accordance with the prescribed procedure. Independent Directors, who arealso appointed by the Government of India, undergo evaluation by the Ministry of Railwaysand, ultimately, by the DPE.
REMUNERATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT
As a Government Company, IRCON follows the guidelines issued by the Department ofPublic Enterprises (DPE) for determining the remuneration of its functional directors,senior management officials, and other employees. The Company has placed the salientfeatures of its remuneration policy for key managerial personnel and employees on itswebsite (www.ircon.org) under the HRM and Career Sections, as required by Section 178(4)of the Companies Act, 2013.
The remuneration policy of the Company, as well as the procedures and policies for theappointment of Senior Management, are reviewed and recommended by the Nomination &Remuneration Committee before being approved by the Board of Directors.
Furthermore, under Section 197 of the Companies Act, 2013, and Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014, listed companies arerequired to disclose specific details of directors remuneration in the Boards Report.However, Government Companies, including IRCON, are exempted from complying with thisprovision as per Notification No. GSR 463(E) dated June 5, 2015, issued by the Ministry ofCorporate Affairs.
Therefore, such details are not included in the Boards Report of IRCON. However, theremuneration paid to directors during FY 2022–23 is disclosed in the CorporateGovernance Report.
INTERNAL CONTROL SYSTEMS
The Company has implemented robust financial controls in accordance with the provisionsof the Companies Act, 2013. These internal financial controls over financial reporting arefunctioning effectively. The controls are designed to ensure the maintenance of accurateaccounting records, promote the orderly conduct of business operations in compliance withcompany policies, safeguard company assets, prevent and detect fraud and errors, andensure the reliability of financial and operational information. The internal controlsystem, which includes Internal Financial Controls over Financial Reporting, undergoesperiodic reviews, and necessary adjustments are made to align with evolving businessneeds.
Further information about the internal control system can be found in the ManagementDiscussion and Analysis Report.
INTERNAL CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
Your Company has adopted an ‘Internal code of conduct for prevention of insidertrading in dealing with securities of the Company (Code of Conduct), to regulate, monitorand report trading by designated persons and their immediate relatives and code forpractices and procedures for fair disclosure of Unpublished Price Sensitive Information(UPSI) as per the requirement under SEBI (Prohibition of Insider Trading) Regulations,2015. The Code of Conduct aims that the insiders of the Company shall not derive anybenefit or assist others to derive any benefit from the access to and possession of UPSIabout the Company which is not in the public domain and thus constitutes insiderinformation.
The Code of Conduct as approved by the Board has been posted on the website of theCompany, i.e., www.ircon. org under the head Codes and Policies in the Investors section.
RISK MANAGEMENT
The Company has an elaborate Enterprise Risk Management (ERM) framework,including risk management policy for risk identification and its mitigation.
As per the LODR Regulations, the Company is having a Board level Risk ManagementCommittee, which as on March 31, 2023 comprised of Director (Works) as Chairman, Director(Finance), Director (Projects), and Dr. Kartik Chandulal Bhadra, Independent Director asmembers. Details of the Risk Management System are provided in the Management Discussionand Analysis Report and the Risk
Management Committee are provided in the Corporate Governance Report.
WHISTLE BLOWER POLICY / VIGIL MECHANISM AND VIGILANCE ACTIVITIES
Being a Government Company, the Company has a separate Vigilance Department which dealswith fraud or suspected fraud involving employees/ representatives of suppliers,contractors, consultants, service provider or any other party doing business with theCompany. Whistle Blower and Fraud Prevention and Detection Policies have been approved bythe Board of Directors and are available on the website of the Company. The Company has inplace the necessary vigil mechanism for employees and directors to report to theManagement concerns about unethical behavior, actual or suspected fraud, violation of theCompanys Code of Conduct or ethics policy and instances of a leak of unpublished pricesensitive information. If one raises a concern under this Policy, the complainant will notbe at risk of suffering any form of reprisal or retaliation (including discrimination,reprisal, harassment or vengeance) in any manner. No person has been denied access to theChairman & Managing Director, IRCON or to Chairman of the Audit Committee.
The Vigilance Department plays an advisory role to the top management in matterspertaining to vigilance. It is headed by a full-time Chief Vigilance Officer (CVO)appointed by the Appointments Committee of the Cabinet (ACC) in consultation with CentralVigilance Commission (CVC).
The Department ensures implementation of laid down guidelines/procedures throughpreventive checks of tenders and contracts, execution of works, and other functions aswell as carry out investigations into complaints. During FY 2022–23, the Departmenthas carried out 01 surprise inspection and 06 periodic inspections on high-value projects.Apart from surprise and periodic inspections department has carried out 04 preventiveinspections on tenders floated from the corporate office. Chief Technical ExaminersOrganisation (Technical wing of Central Vigilance Commission) has also carried outextensive investigation of 01 Project. Complaints raised against officials and procedures,etc., by various Authorities (such as CVC/Railway Board Vigilance, CBI, Prime MinistersOffice, etc.,) and received from other sources were investigated to their logicalconclusion. During FY 2022–23, the Department has received a total of 12 nos.complaints and total 11 nos. complaints were disposed off including that of previousyears. Nature of Complaints includes irregularities during tendering, execution ofcontract, anonymous & pseudonymous and quality related issues. Also steps were takenfor closure of Paras raised by the Chief Technical Examiners Organisation (CTEO). Inaddition, scrutiny of immovable property returns of employees, creating awareness onrules/procedures/common irregularities in execution through workshops, training, debate,competitions, etc., have been the prime activities of the Department. As a step towards‘Leveraging of Technology for better transparency, online services are efficientlyrunning since years viz, submission of immovable Property Returns since 2012–13;online Vigilance Clearance since April 1, 2014 through the intranet portal; and filing ofvigilance complaints since December 2012.Further, E-Procurement has already been startedw.e.f July 1, 2013 in the organisation in a comprehensive manner for achievingtransparency for all value of the work.
IRCON has adopted Integrity Pact (IP) as recommended by the Central VigilanceCommission (CVC) on June 24, 2014, for tenders/contract for works and supply with anestimated value of Rs. Crore and above on all Indian Projects. The Integrity Pact is madea compulsory document in the conditions of model e-Procurement Documents for all works.IRCON has implemented this Integrity Pact which is a tool developed by TransparencyInternational and it ensures that all activities and transactions between a Company orGovernment Departments and their Suppliers are handled in a fair, transparent andcorruption-free manner.
As per the provision of Integrity Pact and relevant guidelines of Central VigilanceCommission, Dr. T.M. Bhasin, Ex. Central Vigilance Commissioner, has been appointed as anIndependent External Monitor (IEM) on November 18, 2020 as per earlier SOP and Shri BimalJulka, Retired IAS, has been appointed on November 30, 2021 as 2nd IEM as per revised SOPto receive any complaints from the bidders and submit the investigation report. Vigilancestrives to achieve its objective of promoting an impartial, fearless, and transparentenvironment in the functioning of the organization by taking steps to prevent unethicalpractices.
RELATED PARTY TRANSACTIONS
Pursuant to the provisions of Section 177 and 188 of the Companies Act 2013 (the Act)and LODR Regulations, prior approval of the related party transactions wherever applicableare taken from the Audit Committee / Board as applicable. Prior omnibus approval of theAudit Committee is also obtained on yearly basis for various Related Party Transactionsbetween IRCON or any of its subsidiaries on one hand and a related party of the IRCON orany of its subsidiaries on the other hand in the ordinary course of business valuing notexceeding Rs. Crore for each contract / agreement / transaction in a financial year. Thetransactions, if any, entered into pursuant to the omnibus approval granted, are placedbefore the Audit Committee on a quarterly basis. Approval of specific related partytransactions other than those covered under the Omnibus approval are also obtained fromthe Audit Committee/ Board in compliance with the requirement of the Companies Act 2013and LODR Regulations. In pursuance to Section 134(3)(h) of the Companies Act, 2013 andRule 8(2) of the Companies (Accounts) Rules, 2014, the "Disclosure of particulars ofcontracts / arrangements entered by the Company with related parties including certainarms-length transactions" are disclosed in Form AOC-2 and is annexed to this Report.The Related Party Transaction Policy of the Company has been revised and approved by theBoard during the year 2022–23 and is uploaded on the Companys website under the‘Investors section at www.ircon.org.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms: i) that in the preparation of thefinancial statements, the applicable accounting standards had been followed except asotherwise stated in the annual financial statements and there has been no materialdeparture; ii) that such accounting policies were selected and applied consistently andsuch judgments and estimates were made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company for the financial year ended onMarch 31, 2023, and of the profit of the Company for the FY 2022–23; iii) that properand sufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 2013, for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities; iv) that thefinancial statements have been prepared on a going concern basis; v) that internalfinancial controls were adequate and operating effectively; and vi) that proper system hasbeen devised to ensure compliances with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The "Business Responsibility and Sustainability Report"
(BRSR) in compliance with the provisions of Regulation 34 of the LODR Regulations, inthe format prescribed under SEBI Circular May 05, 2021 forms part of the Report. Thereport describes the initiatives taken by IRCON from an environmental, social andgovernance perspective.
MOU RATING / AWARDS
As per the DPE guidelines, the Ministry of Railways and IRCON enter into a Memorandumof Understanding (MOU) annually, outlining selected parameters and targets for eachfinancial year. The Companys performance is evaluated at the end of the year based on theachievement of these targets. According to the MOU parameters and the Companysperformance in the fiscal year 2021–22, it has received a rating of ‘Very Good.IRCON has been awarded several prestigious awards. Some of the significant awards andaccolades won so far during the year 2022–23 are mentioned below:
a Greentech Environment Award for Environment Protection
a ENR – Construction World Global Award
a Dun & Bradstreet PSU & Government Summit_- Aatma Nirbhar Bharat Initiatives
AUDITORS
STATUTORY AUDITORS
The Comptroller & Auditor General of India (C&AG) has appointed M/s HDSG& Associates, Chartered Accountants, New Delhi (Firm Registration No.002871N) as thesingle Statutory Auditors of the Company for FY 2022–23, except for the followingforeign projects for which C&AG has approved the appointment of the following asstatutory auditors:
| BRANCH AUDITORS FOR INTERNATIONAL PROJECTS | |
| M/s Ait MIMOUN Rafik | Algeria Project |
| M/s Edirisinghe & Co. | Sri Lanka Project |
| M/s Toha Khan Zaman & Co. | Bangladesh Project |
COST AUDITORS
In pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules madethereunder, the Company has maintained the cost records of the Company. The Board ofDirectors has appointed M/s R.M. Bansal & Co., Cost Accountants, (having firmRegistration No.000022) as Cost Auditor of the Company for the FY 2022–23 forconducting the audit of cost records
SECRETARIAL AUDITORS
In pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation24A of the LODR Regulations, the Board of Directors has appointed M/s Kumar Naresh Sinha& Associates, Company Secretary in practice (Firm Registration No. S2015UP440500) asthe Secretarial Auditor for conducting Secretarial Audit of the Company for the FY2022–23.
INTERNAL AUDITORS
The Board of Directors have appointed following Internal Auditors for the Indian &F o r e i g n Projects for the FY 2022–23:
| Sl. No. | Region / Audit Circles | Internal Auditors |
| 1. | Corporate Office Region (including Foreign Project viz. Algeria Project) | M/s A.M.A.A. & Associates, Chartered Accountants |
| 2. | Northern Region | M/s A.M.A.A. & Associates, Chartered Accountants |
| 3. | Eastern Region (including foreign projects viz. Myanmar Road Project, Khulna Mongla Bangladesh, Ishrudi Darsana Bangladesh S&T, and Bhairab Railway Bridge (JV) Project Bangladesh) | M/s SEN & RAY, Chartered Accountants |
| 4. | Mumbai Region (including Foreign Project viz. Upgradation of Railway Line, Maho to Omanthai, Sri Lanka) | M/s J. Singh & Associates, Chartered Accountants |
| 5. | Patna Region | M/s Gupta Sachdeva & Co., Chartered Accountants |
| 6. | J & K Region | M/s Baweja & Kaul, Chartered Accountants |
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
IRCON is engaged in the business of providing infrastructure facilities and is exemptedfrom compliance with all the provisions of Section 186 [except sub-section (1) to Section186] in terms of Section 186(11)(a) read with Schedule VI of the Companies Act, 2013.
The details of investments made, loans granted, and guarantees extended by the Companyto its subsidiary and joint venture companies during the FY 2022–23 forms part of thenotes to the standalone financial statements provided in the Annual Report.
DEPOSITS
The Company did not accept any deposits from the public during the financial year.
OTHER DISCLOSURES
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Returnof the Company as at March 31, 2023 is placed on the website of the Company at www.ircon.org, under the Investors section.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The Company has complied with the provisions relating to the Investor Education andProtection Fund (IEPF) under the Companies Act, 2013 and the rules made thereunder.Company Secretary is the nodal officer to deal with the IEPF Authorities and compliancesrelated thereto.
No amount is due for transfer to IEPF and details of unclaimed dividend as on March 31,2023 are available on the website of the Company, and this is also disclosed in theCorporate Governance report. Further, the Company does not have shares in Demat SuspenseAccount/ Unclaimed Suspense Account/ Unclaimed Dividend Account and the same has beendisclosed in the Corporate Governance report.
SECRETARIAL STANDARDS
During the financial year, the Company is in compliance with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India (ICSI).
SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTINGTHE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
No order has been passed by the Regulators or Courts or Tribunals impacting the goingconcern status of the Company and its operations in future during the FY 2022–23.
DETAILS OF APPLICATION MADE OR ANY PROCEEDINGS PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THEFINANCIAL YEAR.
There are no proceedings initiated/pending against your Company under the Insolvencyand Bankruptcy Code, 2016 which will have material impact on the business of the Company.
CHANGE IN THE NATURE OF BUSINESS
There was no material change in the nature of business of the Company during the FY2022–23.
DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of LODR Regulations and the guidelines on "CapitalRestructuring of Central Public Sector Enterprises" issued by the DIPAM, the Board ofDirectors of the Company has formulated and adopted the Dividend Distribution Policy. ThePolicy is hosted on the Website of the Company at https://ircon.org/images/file/cosecy/Dividend%20Distribution%20Policy. pdf.
SECRETARIAL AUDIT REPORT AND MANAGEMENT RESPONSE THERETO
The "Secretarial Audit Report" from the secretarial auditor in Form MR-3 asrequired under Section 204 of the Companies Act, 2013 read with rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of thisreport.
The Management Response on the qualification in the Secretarial Auditor Report andcompliance of conditions of Corporate Governance for the FY 2022–23 forms part ofthis report.
STATUTORY AUDITORS REPORT AND C&AG COMMENTS
The reports of the Statutory Auditors on the Financial Statements for FY 2022–23(both on standalone and consolidatedfinancialstatements)areattachedseparately as part ofthe Annual Report. There are no qualifications, reservations or adverse remarks made byM/s HDSG & Associates, Statutory Auditors, in their report for the financial yearended on March 31, 2023.
Comments of C&AG on the Audited Financial Statements of your Company for the FY2022–23 are attached.
ACKNOWLEDGEMENT
The Directors of the Company would like to extend their heartfelt gratitude andacknowledgement for the invaluable assistance and cooperation received from variousMinistries such as Railways, Road Transport and Highways (MoRTH), External Affairs,Finance, Commerce, Urban Development, as well as other ministries, departments, andagencies. We are also grateful for the support received from the office of Comptroller& Auditor General of India, Reserve Bank of India, Bankers, Statutory, Branch, Cost,Secretarial & Internal Auditors, of the Company, Indian Embassies & Missionsabroad, Foreign Missions & Embassies in India, EXIM Bank, ECGC Limited, Protector ofImmigration, Passport Authority, and our esteemed clients both within India and overseasas without their active support, the Company would not have achieved its milestones duringthe year under review.
We would like to express our sincere appreciation to all the dedicated employees of theCompany at every level. Their unwavering efforts, dedication, sincerity and commitmenthave significantly contributed to achieving the highest ever performance of the Company.
| For and on behalf of the Board of Directors |
| Sd/- |
| (Brijesh Kumar Gupta) |
| Chairman & Managing Director (L/A) & CEO |
| (DIN:10092756) |
| Date: August 11, 2023 |
| Place: New Delhi |
