The Directors of your Company have pleasure in presenting their 43rd Report on theaffairs of the Company for the financial year 2018-19.
1. FINANCIAL PERFORMANCE / HIGHLIGHTS
A. The financial performance of the Company for the year 2018-19 vis--vis 2017-18 aregiven below:
(Rs. in crore)
|Sl. No. Particulars ||2018-19 ||2017-18 ||Increase / (Decrease) [in %] |
|Financial Results: || || || |
|1. Total income / turnover ||4680 ||4121 ||13.56 |
|2. Total Operating income / turnover ||4415 ||3891 ||13.47 |
|3. Operating income from Foreign Projects ||585 ||601 ||(2.50) |
|4. Operating income from Indian Projects ||3829 ||3290 ||16.38 |
|5. Profit before tax ||615 ||530 ||16.04 |
|6. Profit after tax ||445 ||388 ||14.69 |
|7. Net worth ||3950 ||3751 ||5.31 |
|Appropriations: || || || |
|8. Dividend (Final & Interim) ||202.63** ||192.40 ||5.32 |
|9. Dividend Distribution Tax ||41.66 ||39.36 ||5.84 |
|10. Transfer to Reserve Capital Redemption Reserve ||- ||4.93 * ||- |
|11. Earnings per share (Rs.) ||47.28 ||39.70 ||19.09 |
* Rs.4.93 crore transferred to capital redemption reserve account for buy-back ofequity shares which is equal to nominal amount of equity shares so bought back andextinguished during 2017-18.
** Includes interim dividend and final proposed dividend (subject to approval ofshareholders in ensuing AGM).
On a consolidated basis your Company has recorded an income of Rs.4989.61 crore duringthe financial year ended 31st March 2019 and achieved consolidated Net Profit of Rs.450.07crore for the said financial year.
B. Foreign Exchange Earnings and Outgo:
The Company has earned a foreign exchange of Rs.639.62 crore during 2018-19 as comparedto Rs.450 crore earned during 2017-18. The foreign exchange outgo stood at Rs.607.6 croreduring 2018-19 as compared to Rs.386 crore during 2017-18. Thus the net foreign exchangeearnings have decreased by 49.9% i.e. from Rs.64 crore in 2017-18 to Rs.32.01 crore in2018-19 due to decrease in operating turnover from foreign projects.
The Board of Directors had declared an interim dividend of Rs.10.72 per equity share(i.e. 107.20% on the paid-up equity share capital of Rs.94.05 crore) amounting toRs.100.82 crore (approx.) on the paid-up share capital of Rs.94.05 crore in February2019. The said interim dividend was paid to all the shareholders on 26th February 2019.
Further the Board of Directors in its meeting held on 28th May 2019 has recommended afinal dividend (over and above the interim dividend) of Rs.10.825 per equity share (i.e.108.25% on the paid-up equity share capital of Rs.94.05 crore) amounting to ?101.81crore out of profit for the year 2018-19 subject to approval of the shareholders. Withthis the total dividend for year 2018-19 would be aggregated to Rs.202.63 crore (i.e.215.45% on the paid-up equity share capital of Rs.94.05 crore) which works out to 45.57%of the post-tax profits for 2018-19. After approval and payment of the proposed dividendthe cumulative dividend to shareholders up to 2018-19 will stand at Rs.1694.94 crore.
The Company is committed to enhance shareholder value and has a track record of payingdividend without fail since 1980-81.
Consequent upon listing of shares at the stock exchanges and based on marketcapitalization your Company is among the top 500 companies listed on NSE & BSE. Inpursuance to the requirements of Regulation 43A of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015("LODR") your Company has in place a Dividend Distribution Policy which hasbeen approved by its Board of Directors. Dividend Distribution Policy is available on theCompany's website at www.ircon.org and also provided separately in the Annual Report.
D. Disinvestment through IPO
The Government of India announced the divestment in Company's shares in the financialyear 2017-18. Accordingly Department of Investment and Public Asset Management (DIPAM)Ministry of Finance appointed IDBI Capital Markets & Securities Limited Axis CapitalLimited SBI Capital Markets Limited as Book Running Lead Managers (BRLMs) and CrawfordBayley & Co. & Hogan Lovells International LLP as Legal Advisors for disinvestmentof 9905157 equity shares i.e. 10.53% of the paid up equity share capital of the Companythrough Initial Public Offering (IPO) of shares by the Promoters (i.e Government of India)to the public. The Company's public issue was subscribed more than 10 times and shares gotlisted on 28th September 2018 on BSE Limited and National Stock Exchange of IndiaLimited. Listing of equity shares will enhance the company visibility and brand image andprovide liquidity to the shareholders. Listing will also provide a public market for theequity shares in India.
Post IPO the President of India along with the nominees hold 83878417 equity sharesi.e. 89.18% of the paid up equity share capital of the Company.
Based on current market price of IRCON it is in the list of top 500 listed companiesas on 31st March 2019.
E. Share Capital / Dematerialization:
As on 31st March 2019 the Authorized share capital of the Company was Rs.400 croreconsisting of 40 crore equity shares of Rs.10/- each and the issued and paid-up sharecapital of the Company was Rs.94.05 crore consisting of 94051574 equity shares ofRs.10/- each. All the shares (except only 17 shares in physical form) are held indematerialized form.
The details of dematerialization of shares Demat Suspense Account / Unclaimed SuspenseAccount is provided in the Corporate Governance Report.
F. Material changes and commitments affecting the Financial Position
There are no material changes or commitments affecting the financial position of theCompany during the financial year and after the close of the financial year upto the dateof the report.
2. ORDER BOOK
In our industry an order book is considered an indicator of future performance sinceit represents a portion of anticipated future revenue. Your Company caters to bothdomestic as well as international markets and receives orders both on competitive biddingas well as through nomination by the Ministry of Railways.
During the year 2018-19 the Company secured works worth Rs.7635 crore. The order bookas on 31st March 2019 stood at Rs.33901 crore (approx.) as compared to Rs.22407 crore(approx.) as on 31st March 2018.
3. OPERATIONAL PERFORMANCE
I. Foreign Projects:
Contribution of foreign projects to total revenue has decreased from approximately14.58% in Fiscal Year 2018 to approximately 12.52% in Fiscal Year 2019. The drop inforeign project income is mainly due to completion of the foreign projects in SouthAfrica. Nevertheless this fall in revenue from projects in foreign countries has beenpartially offset by our performance in the domestic market and we continue to activelyparticipate in new projects in foreign countries including one ongoing project inBangladesh and one in Algeria. By continuing to diversify our business and geographicalfocus your Company strives to secure a broader range of projects to maximize businessvolume and profit margins.
A. Completed Foreign Projects:
Your Company has completed one project in South Africa during the financial year2018-19.
The project for procurement of Plant Design Supply and Installation of Overhead TrackEquipments Traction Substations Auxiliary Power Supplies Substations Bulk PowerSupplies Switching Stations and Signalling Systems for Majuba Rail Project South Africafor Eskom Holdings SOC Limited at a value of Rs.345 crore (Rand 663 million Rand 1 =5.212). The work was secured in November 2015 and has been completed in December 2018.
B. On-going Foreign projects:
Your Company is executing the following two projects in foreign countries:
1. Construction of Embankment Track all civil works major & minor bridges(Except Rupsha) & culverts and implementation of EMP against Package WD1 under theproject Construction of Khulna-Mongla Port Rail Line for Bangladesh Railway at a value ofRs.911 crore (USD 147.80 million). The physical progress up to March 2019 is 49.50%. Thework was commenced in March 2016 and is scheduled for completion in September 2020.
Initially the project progressed slowly due to late handing over of encumbrance freeland and issuance of drawings for alignment (L-section and X-section) bridges andbuildings by the Engineer/Bangladesh Railway. However now the project is in full swingand track linking between Phultana and Aranghata (Phase-I) is expected to start inSeptember 2019.
2. Installation of double track line (93 kms) in Algeria awarded by ANESRIF Ministryof Transport Government of Algeria initially awarded at a value of Algerian Dinar Cr.1628 (Rs.1003 crore converted) involving construction of second line and upgradation ofexisting line with diversion of 10 Kms from Ouedsly to Yellel in Algiers-Oran section ofAlgerian Railways. The value of contract including additional works for realization ofdouble line has been revised to Rs.1747 crore (converted). The project was awarded in 2008and is likely to be completed in June 2020. The reasons for delay are significant increasein scope of works delay in payments due to non-allocation of funds to the projectexcessive delay in approval of amendments delay in approval of drawings and removal ofobstructions and delay in resolving the discrepancy in mode of payments etc.
The work of 72 kms new track has been handed over to the client in spite of the cashflow problems which are hampering progress particularly the structural works awarded tosub-contractors. Work on the existing line has also started in the first stretch of 13kms 6 out of 7 station buildings are ready to be handed over and the bridge constructionwork has also picked up with assurance of timely payments. With the improvement ininternational oil prices the client has assured uninterrupted payments which will improvethe progress of works for likely completion by June 2020.
C. New Projects secured after the close of the year:
After the close of the year 2018-19 your Company secured one project in Sri Lanka viz.Up-gradation of Railway Line from Maho to Omanthai under Indian Line of Credit TrackRehabilitation and ancillary works awarded by Sri Lankan Railways under the Ministry ofTransport and Civil Aviation Government of Sri Lanka at a value of USD 91.27 Million(equivalent to approx. INR 635 crore). Under the project IRCON will upgrade single linebroad gauge track from Maho-Omanthai of around 128 km length including associatedinfrastructure works. The project was awarded at the end of April 2019 and is to becompleted within 36 months. The project is financed through EXIM Bank of India as perIndian lines of credit.
D. Likely Foreign projects:
Your Company endeavours to continue its strategy of diversifying across industrysegments and increase orders from foreign countries to capture better profit marginsaccorded by these projects as compared to domestic projects. Concerted efforts are beingmade to secure contracts in Bangladesh Thailand Turkey Ghana Sri Lanka MozambiqueRwanda UAE Malaysia Oman and Guinea.
II. Domestic Projects:
Since incorporation your Company has diversified into various infrastructure sectorsand is now an established player in the field of railways and highways construction. YourCompany also caters to customers' needs in many other areas such as construction ofcommercial and residential complexes power transmission lines industrial lightingbridge/fly-overs tunnels commercial residential and retail properties electrical andmechanical work signaling/telecom coach factory station building multi-functioncomplex and airports. The variety of project portfolio de-risks our construction businessand reduces our dependence on any one sector or type of project.
E. Project Completed in India:
During the financial year 2018-2019 following three projects in India got completed:
1. Widening and Strengthening of existing Bikaner-Phalodi section to Four-lane from Km.4.200 to Km. 55.250 and Two-Lane with paved shoulder from Km. 55.250 to Km. 163.500 ofNH-15 on BOT (Toll) basis in the State of Rajasthan for Ircon PB Tollway Limited(IrconPBTL) at a value of Rs.681 crore. Further the target as envisaged in MOU for theyear 2018-19 for excellent rating for commencement of Toll Operation for 75% length inrespect of Bikaner-Phalodi Highway Project has been completed.
2. Four-laning of Shivpuri to Guna from Km 236.00 to Km 332.100 (Package-I) in theState of Madhya Pradesh to be executed on BOT (Toll) on DBFOT pattern under NHDPPhase-IV) for Ircon Shivpuri Guna Tollway Limited (IrconSGTL) at a value of Rs.670 crore.
3. The work of system improvement strengthening and augmentation of distributionsystem to bring down AT&C losses and improve quality of consumer supply of Meerut townof Uttar Pradesh to be carried out under RAPDRP Part-B scheme on turnkey basis includingsupply of material for PVVNL at a value of Rs.329 crore.
F. New Projects in India:
During 2018-19 your Company took the following projects in India for a total valueRs.7635 crore in its order book:
1. Construction of New BG Electrified Rail Line between Dharamjaigarh to Korba (Urga)of Chhattisgarh East Railway Limited (CERL-II) at total value of Rs.1138 crore;
2. Construction of Corridor-III of East West Corridor between Gevra Road to Pendra Roadin the State of Chhattisgarh for Chhattisgarh East-West Railway Limited (CEWRL) at valueof Rs.260 crore;
3. Survey Feasibility study Detailed Design and Construction of various identifiedRail Coal Connectivity Project(s) for Jharkhand Central Railway Limited (JCRL) at valueof Rs.1139 crore as per approved DPR.
4. Survey Feasibility study Detailed Design and Construction of various identifiedRail Coal Connectivity Project(s) for Mahanadi Coal Railway Limited (MCRL) at value ofRs.1079 crore.
5. Execution of rail connectivity projects identified by Bastar Railway Private Limited(BRPL) at value of Rs.1513 crore.
6. Construction of Eight Lane Vadodara Kim Expressway from Km 323.00 to Km 355.00(Sanpa to Padra Section of Vadodara Mumbai Expressway) in the State of Gujarat under NHDPPhase-VI on Hybrid Annuity Mode (Phase IA-Package II) for Ircon Vadodara Kim ExpresswayLimited (IrconVKEL) at value of Rs.1378 crore.
7. Additional work under the Construction of Sivok-Rangpo New BG Rail Link Project forNorth-East Frontier Railway at a value of Rs.1128 crore.
G. Commercial Development of 4.3 Hectare Railway land at Western Express HighwayBandra East Mumbai for 99 years Your Company has entered into a Memorandum ofUnderstanding on 26th March 2018 with the Rail Land Development Authority (RLDA) fortransfer of lease hold rights to IRCON for commercial development on the land parcelmeasuring 4.3 (four point three) Hectare at Bandra East Mumbai Maharashtra against thepayment of Upfront Lease Premium. In consideration of its roles and responsibilitiesIRCON shall be entitled to receive from RLDA an amount equivalent to a total of 3% (threepercent) of the Upfront Lease Premium. In order to pay upfront lease premium equivalent toguidance price as approved by RLDA GST Stamp Duty and Registration Charges a tripartiteloan agreement has been signed amongst IRCON RLDA and Indian Railway Finance CorporationLimited (IRFC) on 28th March 2018. RLDA has agreed to pay to IRCON such amounts as may berequired by IRCON to meet their debt servicing obligations as and when due under thisAgreement. Further the Ministry of Railways also has agreed to provide correspondingamounts to RLDA. The servicing of loan to IRFC is the responsibility of RLDA / Ministry ofRailways.
H. On-going major Projects in India:
A list of major on-going projects in India is given at Appendix A.
4. SUBSIDIARY COMPANIES JOINT VENTURE COMPANIES AND ASSOCIATE COMPANIES
A brief background on the subsidiaries (including the new wholly-owned subsidiaryformed during the year -- Ircon Vadodara Kim Expressway Limited incorporated on 16th May2018) and joint ventures companies of IRCON along with their financials and performance isgiven at Appendix B.
5. FINANCIAL STATEMENTS (STANDALONE AND CONSOLIDATED) & GREEN INITIATIVES
The Board of Directors of your Company has at its meeting held on 28th May 2019approved the Financial Statements for 2018-19 (Standalone and Consolidated).
In accordance with the provisions of Section 129(3) of the Companies Act 2013 yourCompany has prepared its Consolidated Financial Statements [as per line by line method]with its five subsidiaries viz. IrconISL IrconPBTL IrconSGTL IrconDHHL and IrconVKEL(for the period from 16.05.2018 to 31.03.2019); and [as per equity method] with sevenjoint venture companies viz. IRSDC ISTPL CERL CEWRL MCRL JCRL and BRPL. The accountsof un-incorporated joint ventures have been included in the standalone financialstatements for the financial year 2018-19.
Your Company would make available its audited financial statements (standalone andconsolidated) of accounts / financial statements of its subsidiaries (IrconISL IrconPBTLIrconSGTL IrconDHHL and IrconVKEL) at its website (www.ircon.org). Further a statementcontaining the salient features of the financial statements of five subsidiaries and sevenjoint venture companies in Form AOC-1 is attached with the Financial Statements.
As part of green initiatives electronic delivery of notice of Annual General Meeting(AGM) and Annual Report is being done to those shareholders whose E-mail Ids are alreadyregistered with the respective Depository Participants (DPs) and downloaded from thedepositories i.e. NSDL / CDSL and who have not opted for receiving Annual Report inphysical form. Accordingly unless otherwise desired by the shareholders the Companysends all documents to the shareholders viz. Notice intimation for dividend AnnualReport etc. in electronic form to their registered e-mail addresses.
A. Presidential Directive:
Ministry of Railways has conveyed its decision of disinvestment of its shareholding inthe Company through Initial Public Offering. Accordingly Government of India hasdisinvested 10.53% (9505157 equity shares) of its shareholding by way of Initial PublicOffering and your Company was listed with BSE Limited (BSE) and National Stock Exchange ofIndia Limited (NSE) on 28th September 2018.
B. CPSE Conclave:
Hon'ble Prime Minister during his address at the CPSE Conclave held on 9th April 2018at Vigyan Bhawan New Delhi had given a number of action points for CPSEs including thesuggestion to hold Annual General / Board meetings of CPSEs at new tourist destinationsinstead of the well-known and established destinations as such a step will help to boosttourism sector in the country. Accordingly the Department of Public Enterprises (DPE)vide its OM dated 24th May 2018 and 18th July 2018 suggested destinations to hold suchmeetings. In compliance to these directions one meeting of the Company was held atBhopal Madhya Pradesh (Sanchi UNESCO World heritage site). The other compliances arebeing updated on monthly basis at DRISHTI Dashboard.
C. 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 Hindi completely on last Monday of every month.
b) Rajbhasha Sanghosthi is being conducted on quarterly basis in Corporate Office.
c) Birthday wishes to employees a thought and a word contributed by differentdepartments on rotational basis poem by renowned poets etc. are being displayed in Hindiat the reception.
In addition regular quarterly meetings of Official Language Implementation Committeeand quarterly workshops for effective use of the UNICODE system and official language arebeing conducted. Employees are being encouraged through various incentive schemes for theimplementation of the Annual Programme of the Official Language Department. Bilingualfacility has been introduced for computer systems and mobile phones used by officials ofthe Company. Bilingual formats have been made available at IRCON's internal website foruse by the employees.
In recognition of the efforts of the Company for effective implementation of OfficialLanguage during the year 2017-18 the Company was bestowed with the Award and Certificatefor outstanding Implementation of Official Language Policy in 2018-19. The details of theaward are mention herein below.
D. Right to Information Act 2005:
As per the requirements of the RTI Act necessary updated information including thenames of Appellate Authority Central Public Information Officer Assistant PublicInformation Officer and State Level Public Information Officers are posted on IRCON'swebsite. Queries received have been replied within the stipulated time. The queries mostlyrelated to service matters/recruitments finance contract and projects. The details ofRTI cases have been published in the Central Information Commission (CIC) website onquarterly as well as annual basis and a copy of the same is forwarded to the Ministry ofRailways for information.
During the year 2018-19 202 applications and 30 first appeals were received and at thebeginning of the year 10 applications were under process for disposal within the allowabletime limit. Out of this 208 applications (including opening balance of 10 applications)and 29 first appeals were processed / disposed off. As on 31st March 2019 04 applicationsand 01 appeal were under process for disposal within the allowable time limit.
E. Compliance of MSME Guidelines for implementation of Purchase Preference Policy:
Your 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 (MSME) undersection 11 of Micro Small and Medium Enterprises Development Act 2006. The e-procurementportal of IRCON provides for facilitation of registration of MSEs firms registered withany statutory bodies specified by Ministry of MSME and participation in e-tender byavailing the benefits of exemption from payment of cost of tender fee and Earnest Money.
During the financial year 2018-19 your Company has procured items valuing Rs.71.41crore from MSEs vendor against the expenditure valuing Rs.342.19 crore towards materialsand stores. Value of items beyond scope / capacity of MSE Vendors amounts to Rs.180.15crore. Therefore your Company has achieved 44% of total procurement from MSEs afterexcluding the value of items beyond the scope / capacity of MSEs in compliance toProcurement Policy during the Financial Year 2018-19.
During the year 2018-19 your Company has conducted a special national developmentProgramme at the Corporate Office for MSEs including SC/ST entrepreneurs on 27th February2019.
In exercise of powers conferred by section 9 of the Micro Small and Medium EnterpriseDevelopment Act 2006 (27 of 2006) the Central Government issued instructions that allcompanies registered under the Companies Act 2013 with a turnover of more than Rs.500crore and all CPSEs shall be required to get themselves on boarded on the TradeReceivables Discounting System (TReDS) platform set up as per the notification of theReserve Bank of India. The Registrar of Companies (RoC) in each State shall be thecompetent authority to monitor the compliance of such instructions by CPSEs and also theDepartment of Public Enterprises. Government of India shall be the competent authority tomonitor the compliance of such instructions by the CPSEs. In compliance to the aboveinstruction your Company has boarded on the TReDS platform w.e.f. 25th January 2018 tofacilitate financing of trade receivables of MSEs by discounting of their receivables andrealization of their payment before due date.
7. BOARD OF DIRECTORS KEY MANAGERIAL PERSONNEL AND DECLARATION OF INDEPENDENCE BY THEINDEPENDENT DIRECTORS
IRCON being a Government Company the appointment of directors on its Board is done bythe President of India through the Administrative Ministry Ministry of Railways. As on31st March 2019 Company has eleven Directors comprising of four Functional Directors twoGovernment Nominees Directors and five Independent Directors. With effect from 28thDecember 2018 the Company is not having prescribed number of the Independent Directors onthe Board of the Company. After the close of the year the tenure of two independentdirectors (including women director) got completed. Accordingly the Company has requestedMinistry of Railways for appointment of requisite number of Independent Directors(including women director) in order to comply with the requirements under SEBI (LODR)Regulations.
The Board of Directors of the Company has designated all the whole-time Directors andCompany Secretary as the Key Managerial Personnel (KMP) of the Company; and Chairman &Managing Director (CMD) and Director (Finance) have been designated as CEO and CFOrespectively.
During the year all the independent directors of the Company have declared that theymeet the criteria of Independence in terms of section 149(6) of the Companies Act 2013.
The following Directors & KMP were appointed during the year 2018-19:
|1 Shri S.C. Jain ||w.e.f. 24.10.2018 |
|Part-time (Official) Director || |
|[DIN: 07564584] || |
|2 Shri Piyush Agarwal ||w.e.f. 17.12.2018 |
|Part-time (Official) Director || |
|[DIN: 08305385] || |
|3. Shri Yogesh Kumar Misra ||w.e.f. 28.12.2018 |
|Director (Works) and KMP || |
|[DIN: 07654014] || |
The following Directors ceased to hold office during the year 2018-19:
|1 Shri Sanjay Kumar Singh ||upto 02.07.2018 due to termination of tenure by the Ministry of Railways. |
|Part-time (Non-Official) Director || |
|[DIN: 00003695] || |
|2 Shri Rajiv Chaudhry ||upto 20.09.2018 due to change in nomination by the Ministry of Railways. |
|Part-time (Official) Director || |
|[DIN: 03146422] || |
|3. Shri Ved Pal ||upto 30.09.2018 due to superannuation from the post of Additional Member (Planning) of the Ministry of Railways |
|Part-time (Official) Director || |
|[DIN: 07902760] || |
|4. Shri Avineesh Matta ||upto 31.03.2019 due to completion of tenure of appointment |
|Part-time (Non-Official) || |
|Director || |
|[DIN: 00011749] || |
|5. Prof.(Ms.) Vasudha V. Kamat ||upto 31.03.2019 due to completion of tenure of appointment |
|Part-time (Non-Official) || |
|Director || |
|[DIN: 07500096] || |
The following Directors ceased to hold office after the close of the year:
|1 Shri S.C. Jain ||Upto 08.05.2019 due to change in nomination by the Ministry of Railways |
|Part-time (Official) Director || |
|[DIN: 07564584] || |
The following Directors were appointed after the close of the year:
|1 Shri Hari Mohan Gupta ||w.e.f. 15.05.2019 |
|Part-time (Official) Director || |
|[DIN: 08453476] || |
|2 Shri Avineesh Matta ||w.e.f. 15.07.2019 |
|Part-time (Non-Official) ||(Re-appointed) |
|Director || |
|[DIN: 00011749] || |
|3 Prof. (Ms) Vasudha V. Kamat ||w.e.f. 15.07.2019 |
|Part-time (Non-Official) ||(Re-appointed) |
|Director || |
|[DIN: 07500096] || |
Shri Piyush Agarwal Shri Yogesh Kumar Misra Shri Hari Mohan Gupta Shri AvineeshMatta and Prof. (Ms.) Vasudha V. Kamat were appointed as Additional Directors of theCompany who shall hold the office upto the date of ensuing Annual General Meeting (AGM).The details of these directors to be regularized as Directors at the ensuing AGM arecontained in the Notice convening the ensuing AGM of the Company.
8. RETIREMENT OF DIRECTORS BY ROTATION
The Companies Act 2013 provides that the provisions in respect of retirement ofDirectors by rotation will not be applicable to Independent Directors. In view of this noIndependent Director is considered to be retiring by rotation however all otherdirectors are considered to be retiring by rotation. Accordingly as per provisions ofsection 152 of Companies Act 2013 one third among all other directors namely Mr. DeepakSabhlok Director (Projects) is liable to retire by rotation and being eligible offerhimself for re-appointment. The details of Director seeking re-appointment at the ensuingAGM are contained in the Notice convening the ensuing AGM of the Company.
9. MEETINGS OF THE BOARD OF DIRECTORS AND OTHER COMMITTEES OF THE BOARD AND THEIRCOMPOSITION
During April 2018 to March 2019 eight meetings of the Board of Directors six meetingsof the Audit Committee five meetings each of Nomination and Remuneration Committee andCSR & Sustainability Committee two meetings of Project Review Committee one meetingof Risk Management Committee and one separate meeting of the Independent Directors wereheld. The details of meetings composition etc. of the Board of Directors and Board levelcommittees are given in the Corporate Governance Report. Further there has been noinstance where the Board of Directors has not accepted the recommendation of AuditCommittee.
The meetings of the Board are normally held at the Company's Registered Office in NewDelhi. However one meeting of the Board of Directors was held at Bhopal Madhya Pradeshas per the Office Memorandum of DPE on this matter and in order to promote development oftourism sector in the country.
10. INTERNAL CONTROL SYSTEM
Your Company has adequate internal control mechanism and an Internal Audit Systemcommensurate with its size and nature of business. The Company has in place adequateinternal financial controls with reference to financial reporting and audit systems formaintaining efficiency of operations and compliances of applicable laws and regulations.The organization has well-structured policies and guidelines which are well-documentedwith predefined authorities. Regular and exhaustive internal audits are being conducted byexperienced firms of Chartered / Cost & Management Accountants appointed by the Boardon recommendation of Audit Committee and in-house internal audit team headed by aqualified and experienced professional.
Details of the internal control system are provided in the Management Discussion andAnalysis Report.
11. RISK MANAGEMENT
Your Company has an elaborate Enterprise Risk Management (ERM) framework includingrisk management policy in place for risk identification and its mitigation.
As per SEBI (LODR) Regulations 2015 requirement of Risk Management Committee isapplicable with effect from 01.04.2019. Your Company however is already having a Boardlevel Risk Management Committee comprising Director (Projects) Director (Finance) andDirector (Works). During the year one meeting of the Risk Management Committee was heldon 28th February 2019.
Details of the Risk Management System are provided in the Management Discussion andAnalysis Report and the Risk Management Committee are provided in Corporate GovernanceReport.
12. WHISTLE BLOWER POLICY / VIGIL MECHANISM
Being a Government Company the Company has separate Vigilance Department which dealswith fraud or suspected fraud involving employees/representatives of supplierscontractors 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.
13. HUMAN RESOURCE DEVELOPMENT
Being a progressive organization IRCON firmly believes in the strength of its mostvital asset i.e. Human Resource (HR). Human Resource Management (HRM) of IRCON isprimarily concerned with the management of people within the organization focusing onpolicies and systems. HRM in IRCON is designed to maximize employee performance to achievestrategic objectives. The Company has adopted and aligned its HR strategy vis-a-vissystems & procedures taking into account the business objectives and competencebuilding needed for the organization. HR strategy acts as a motivating factor for theemployees who contribute to the core competence of the organization to create a matchbetween the Company's future needs and the aspirations of individual employees.
IRCON's HR Philosophy is rooted in encouraging employee empowerment growth anddevelopment of individuals by realizing their potential encouraging innovative ideas andfair distribution of rewards. Its work culture is open and dynamic enabling employees totake initiative in jobs with active support of the top management. It is an employer ofchoice and attracts the best available talent with skill sets required for the growth anddevelopment of the organization.
Right placement and refinement of employees is the primary function after induction bywhich the Company maintains alignment of individual performance and goals with that ofIRCON's Goals. Adequate care is taken to provide working environment to the employeesconducive to their good health.
The Company has a performance oriented culture wherein contribution of every employeeto the organization is measured and suitably rewarded. IRCON has a sound and resultoriented Performance Management System (PMS). The system promotes the Company's philosophyof rewarding and recognizing meritocracy at all levels and support development ofexecutives through a structured approach woven into the appraisal of the Company.
A. Manpower Strength
The total manpower strength of IRCON as on 31st March 2019 stood at 1576 whichincluded 1192 regular employees 38 deputationists 342 employees on contract (includingservice contract) and 4 on fixed tenure basis. Out of the total 1576 employees of theCompany 1498 have been posted on Indian projects and 78 on projects abroad. Among 1576employees 1155 are technically and professionally qualified. The total number of womenemployees was 66.
During the year the strength of total new employed personnel stood at 171 whichincluded 102 regular employees 5 deputationists and 64 employees on contract (includingservice contract).
B. Reservation in Employment
The Company continues to give utmost importance to implementation of the policies anddirectives of the Government of India in matters relating to implementation of thepolicies and directives of the Government of India in matters relating to reservations inemployment of candidates belonging to Scheduled Caste (SC) / Scheduled Tribe (ST) / otherbackward classes (OBC) and differently abled categories. There were a total of 596SC/ST/OBC and differently abled employees as on 31st March 2019. Further during the year2018-19 102 employees were inducted against regular posts out of which 33 belong toSC/ST/OBC and differently abled categories. Similarly 64 employees were recruited againstthe contractual positions out of which 22 belong to SC/ST/OBC and differently abledcategories.
In the year 2018-19 training has been given to 988 employees out of which 355 belongto these categories. To ensure the welfare of these employee categories the Company hasappointed Liaison officers of SC/ST/OBC and differently abled employees.
The infrastructure of the Company is well built catering to the needs of differentlyabled employees.
C. Training and Human Resource Development
IRCON puts a lot of emphasis on the development and career progression of employees.Training programs are organized throughout the year. During the financial year 2018-19in-house training programmes across all levels of employees were organized. Professionalprogrammes workshops and seminars organized by reputed and prestigiousinstitutes/agencies were carefully identified in line with business needs of IRCON andsuitable officers were nominated for such programmes.
Your Company has been continuously taking steps for building capacity of its humanresource through training in functional and general management areas contract &arbitration leadership information technology as well as soft skills. External facultyis arranged wherever required and officials are nominated for workshops seminars etc.with reputed institutes. Employee Development has always been a priority for the Companyand various trainings and development plans have been initiated from time to time. Duringthe year 2018-19 a total 4046 man-days training was imparted to officials of IRCON throughworkshops seminars conferences in-house trainings and training in external institutesetc.
D. Employee Welfare
IRCON has adequate and robust schemes in place for welfare of the employees. Subsidizedcanteen facility health cover medical scheme Post-Retirement Medical SchemePost-Retirement Pension Scheme periodic health checkups at regular intervals allowancesprovision of company and self-lease for residential accommodation educational scholarshipsto the wards of employees one-time educational grant for admission to professionaldegrees and diploma courses educational awards to meritorious children of employeeseducational assistance to the wards of deceased employees assistance for marriage ofdaughters and dependent sisters of employees in non-executive categories facility of freehomeopathy and allopathy consultancy at Corporate office and resort facilities foremployees and their family members on concessional rates through Dalmia and SterlingResorts etc. are in place for betterment of the staff.
The Company organized one friendly Cricket Match in January 2019 amongst the officersand staff of the Company.
E. Safeguards of Women Employees at workplace
Your Company aims to provide congenial and safe working atmosphere to women employees.The Company has in place a comprehensive policy for Prevention of Sexual Harassment atWorkplace and the same is available at the website of Company. Further the Company has afive member complaints committee for prevention of sexual harassment at work placecomprising of four officials of the Company and one external member from NGO. Furtherprovision pertaining to prohibition of sexual harassment has also been incorporated inIrcon Conduct Disciplinary and Appeal Rules. No complaints relating to sexual harassmenthas been received by the Company during the year or pending from the previous year. OnInternational Women's day the Company organized a workshop exclusively for womenemployees by Oncologist and Dietician and on Gender Sensitization and prevention of sexualharassment at workplace at the Corporate office of the Company.
14. QUALITY ENVIRONMENT AND HEALTH & SAFETY MANAGEMENT
Quality Management System (QMS) has been successfully sustained and continuallyimproved since 1996 when the Company as a whole was first certified for ISO-9002-1994 byTUV SUD Private Limited. Your Company has continued the certification and sustained thesystem as per latest revised code ISO 9001:2015 (by periodical re-certification auditafter expiry of every three years). Latest re-certification audit has been conducted inMarch 2017 whereby the Company has been re-certified by TUV-SUD for a period of anotherthree years i.e. up to June 2020. The second Surveillance Audit for QMS by TVSDSouth Asia Private Limited has been successfully completed during the month of February2019.
During the year the Company continued the initiative of sharing technical knowledgestarted in last year. Accordingly to enhance the technical knowledge of the Company'sEngineers/ Managers regarding the latest versions of IS/ IRC/ IRS and other InternationalSpecs Codes papers were shared on the topics like High Strength Concrete - Concrete withMineral Additives Cement An Insight View NEAR-MISS IRCON's Mission SafetyPumpable Concrete and Risk Management in Construction Projects. Further various detailson "Environment Impact Assessment due to Construction Activities" and"Hazard Identification and Risk Assessment (HIRA)" for Construction Projectshave been made available on the internal website of the Company for knowledge sharing andhelping the projects to prepare the required documents at project levels. In addition tothis for ensuring standardization of documents across the Company Material TestingFormats' for testing of different construction materials have been provided on theinternal website of the Company.
As part of the Memorandum of Understanding entered with the Ministry of Railways forthe year 2018-19 ten departments at Corporate Office and two projects of the Company wereassessed in line with the Project Management Maturity Model (ProMMM) and was placed beforethe Board of Directors at its meeting held on 16th January 2019.
Your 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 March 2017 whereby the Company has been re-certified for another three yearsi.e. up to May 2020. During the year the second Surveillance Audit for EMS byTVSD South Asia Private Limited was successfully completed in February 2019.
The Company nominates Environment officers at major Indian projects to monitor EMS attheir respective projects who complies with the environmental laws. This is an ongoingprocess until completion of the project. Environmental checklists have been developed andmaintained by all projects.
Environmental friendly equipment such as solar panels have been installed and are beinginstalled at various offices / projects. Waste water is recycled at Corporate Officethrough Sewage Treatment Plant (STP) and the same is used for horticulture work. STPs arealso being constructed at Noida Gurgaon and MFC buildings. LED lights sensor lights andsensor taps are being used in Corporate Office to conserve electricity and water. Variousenvironment friendly steps like use of fly ash brick instead of clay brick rain waterharvesting arrangements sensor controlled Chromium Plate (CP) fittings use of latestversion of facade glass (glass in building) to make the building sustainable etc. arebeing taken up across various offices / projects of the Company. Monitoring of water usageand waste water ambient air quality and noise quality is also being carried out atvarious construction sites. The Company is emphasizing on providing clean environment byinitiating indoor air quality monitoring in the Corporate Office building. Tree plantationis also undertaken by corporate office and project offices.
Your Company has also been certified for Occupational Health & Safety ManagementSystem (OHSAS BS 18001:2007) in December 2012 by TUV SUD South Asia. Your Companyhas updated the Occupation Health and Safety System and got ISO:45001-2018 Certificatew.e.f. 28th December 2018 and this certificate is valid till December 2021.
Corporate Quality Council and Project Quality Council meetings were conducted quarterlyat Corporate Office and projects respectively to review the implementation of QMS EMSand OH&S. The Quality objectives were measured and reviewed both at the Corporate andat the Project levels. Internal Quality Audit as well as Quality Assurance Audit wereconducted in projects and corporate office. Reports of these audits not only containeddetails of nonconformities encountered during the audit but also the salient featuresprogress positive points if any etc.
15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND UPGRADATION
A) Conservation of Energy
(i) The steps taken or impact on conservation of energy
Your Company has completed work of Design Supply Installation Testing andCommissioning of grid connected solar power plant of 3MW capacity with all the electricaland associated equipment including civil works at Rail Coach Factory Rae Bareli (U.P.) ata value of Rs.22.49 crore. The plant is fully operational and meets about 36% ofelectrical energy requirement for the factory.
Your Company has procured the material for Design Supply Installation Testing andCommissioning of grid interactive roof top solar photovoltaic power generation plant of75KWp capacity with all the electrical and associated equipment including structure worksat IRCON International Tower Plot No. 16 Sector-32 Gurugram (Haryana) at a value ofRs.56.63 lakh. As per the circular issued by the Renewable Energy Department HaryanaGovernment minimum 2KWp or 5% of sanctioned load of 30 KW and above vide order dated19.12.2017 issued by renewable Energy Department Haryana Government shall be mandatory.The plant is under installation and meets about 5% of the estimated load i.e. 1500 KW.
Further additional capacitator banks have been installed at the following buildings toimprove power factor which would further reduce the Electrical Energy consumption toapprox. 12-15%.
(i) Office cum Commercial Complex Sector-01 Noida 320KVA x 2 sets.
(ii) Retail Mall Sector-43 Noida 1010KVA x 2 sets & 320KVA x 1 set.
(iii) Office cum Commercial Complex Sector-48 Noida 500 KVA x 1 set and 650KVAx 1 set.
Additional 10 KW Roof Top Grid Connected Solar Power Plant at Corporate Office has beenmade operational as a step to conserve energy. This Solar Power Plant is in addition toexisting capacity of 80 KW and has been implemented after energy audit contributing toenvironment through usage of Green Energy. Total energy produced by Solar Power plant is44853 units of kWh which is 3.1% of the energy being drawn from BSES i.e. 1427380 unitsor kWh. Hence total energy conservation per annum is 3.1%.
Capacitor banks have been installed at Corporate Office building to improve powerfactor which further reduces the Electrical Energy consumption. Total energy saved bycapacitor banks is 220903 units or kWh per annum.
The internal lighting of Corporate Office building has been replaced by energyefficient LED lamps. Total energy saving is approx. 300000 units or kWh per annum.
(ii) The steps taken by the Company for utilizing alternate sources of energy
a. DG Sets:
(i) Office cum Commercial Complex Sector-01 Noida 320KVA x 2 sets.
(ii) Retail Mall Sector-43 Noida 1010KVA x 2 sets & 320KVA x 1 set.
(iii) Office cum Commercial Complex Sector-48 Noida 500 KVA x 1 set and 650KVAx 1 set.
(iv) IRCON International Tower Sector-32 Gurugram 1010KVA x 2 sets & 320KVA x 1 set.
(i) IRCON International Tower Sector-32 Gurugram - 30KVA x 2 sets
(iii) the capital investment on energy conservation equipments
a. Solar photovoltaic power generation plant approx. Rs.56.63 lakhs.
b. Capacitor Bank approx. Rs.112.23 lakhs (in four buildings).
c. Replacement by LED approx. Rs.83.81 lakhs.
B) Technology Absorption and Upgradation
(i) The efforts made towards technology absorption
Supervisory Control and Data Acquisition System (SCADA) for energy management have beenmade operational at Rail Coach Factory Rae Bareli. Further the Company has constructedall substation buildings in DMRC with latest energy efficient and environmental friendlyguidelines which includes LED lights Rain Water harvesting.
For the first time in Indian Railways Overhead Equipment (OHE) design for RailwayElectrification Project is being carried out by using Drone camera for picking thecoordinates through Differential Global Positioning System (DGPS). The OHE layout plansare then prepared with the help of Autocad in Mathura-Kasganj-Kalyanpur RE project.
Like previous year development of Circular OHE foundation in situ and Precast was donein Mathura Kasganj Kalyanpur Section for Railway Electrification Project. Inaddition simultaneous stringing of catenary and contact wire is being done for the firsttime in Indian Railways. IRCON has also planned for use of Drone Camera for KatniSingrauli Doubling project.
Your Company has supplied and commissioned 66 KV High Voltage Cable first timedeveloped indigenously for Delhi Metro Rail Corporation (DMRC) Project. IRCON has alsoimported 25 KV Gas Insulated Switchgear (GIS) for Vinod Nagar Traction Substation of DMRC.The use of GIS reduces the requirement of space for sub-stations.
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution.
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)
(a) details of technology imported
(b) year of import
(c) Whether the technology been fully absorbed
(d) If not fully absorbed areas where absorption has not taken place and the reasonsthereof; and
(iv) The expenditure incurred on Research and Development.
16. RESEARCH & DEVELOPMENT (R&D)
Your Company does not undertake any pure research project but takes the help ofconsultants and firms to innovate and to develop methods and techniques to executeprojects in a cost effective manner with requisite quality to enhance the technologicalcompetence and efficiency.
17. INFORMATION TECHNOLOGY AND ERP
The Information Technology in the company is not only a service provider but is alsobeing used for productivity enhancement.
Your company has implemented SAP ECC based Enterprise Resource Planning (ERP)application in the areas of Finance Controlling and Human Resource Management to improveinformation availability transparency and decision making. SAP Business Objects (SAP BO)has also been implemented to automate the financial reporting of the organisation. Thisreporting tool takes the real-time data from SAP ECC and helps in preparation of BalanceSheet Statement of Profit & Loss Statement of changes in equity Cash Flow etc. ondemand basis. This automation has led to drastic reduction in time and effort required toprepare and finalize the books of accounts at the end of the quarter / year. SAP serversare hosted on cloud to ensure high availability security and flexibility for capacityaugmentation.
As a step towards paperless office various initiatives were taken during the year foremployees like enabling viewing of payslip PF Slip and attendance online. Three mobileapplications (apps) namely IRCON Careers IRCON CSR and IRCON tenders were launched duringthe year to provide online and timely information about IRCON activities to generalpublic. All three mobile apps are available on android play store as well as on apple appstore.
The Video conferencing facility is being widely used for conducting review meetingswith Project Heads training promotion interviews etc.
The Company has implemented Wi-Fi with proper security features at Corporate Office toenable mobiles and Bring your Own Devices (BYOD) of employees to be connected to Companynetwork.
The official website of the Company has been revamped to provided well plannedinformation architecture mobile compatibility fast access browser consistency andeffective easy navigation. Visitor Management System has been upgraded to ensure propermaintenance of visitor details and visitors convenience at corporate office.
In order to improve upon efficiency and bringing transparency in procurement process inthe organization the e-procurement platform is being shifted to NIC's GePNIC.
The Company has upgraded its Network Infrastructure at Corporate Office to ensure stateof art setup for digital transactions and projects connectivity. Keeping in view the needfor Information and Cybersecurity effective measures are being taken to deploy latestthreat management tools to prevent any cyber-attack or data theft.
18. VIGILANCE ACTIVITIES
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.
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. This year the department has carried out02 surprise inspections and 03 periodic inspections on high value projects. Apart fromsurprise and periodic inspections department has carried out 04 nos of preventiveinspections on high value tenders floated from corporate office. Chief TechnicalExaminer's Organisation (Technical wing of Central Vigilance Commission) has also carriedout extensive investigation of 02 projects. Complaints raised against officialsprocedures etc. by various Authorities (CVC/Railway Board Vigilance CBI Prime Minister'sOffice etc.) and received from other sources were investigated to their logicalconclusion. During 2018-19 the department has received a total of 21 nos. of complaints.Out of 21 nos. of complaints 17 nos. of complaints were disposed. Nature of complaintsincludes irregularities during tendering execution of contract anonymous &pseudonymous one and quality related issues. In addition steps were taken for closure ofParas raised by the Chief Technical Examiner's Organisation (CTEO). Scrutiny of immovableproperty returns of employees creating awareness on rules/procedures/ commonirregularities in execution through workshops/ trainings debate competitions etc. havebeen the prime activities of the Department.
As a step towards Leveraging of Technology' for better transparency submissionof Online Immovable Property Returns by the officer was started during 2012-13 and theprocess is running successfully. Online Vigilance Clearance started w.e.f 1st April 2014in the organization through our intranet portal. Vigilance section/portal on websitewww.ircon.org with a facility for online receipt of complaints is in place since December2012. E-procurement has already been started w.e.f 1st July 2013 in the organization in acomprehensive manner for achieving transparency for all value of the work.
As a new initiative IRCON has developed an App namely "IRCON Career". Thisapp has been provided in public domain to ensure that public at large gets alerts andupdates over the mobile phone regarding recruitment activities at IRCON. Apart from thisApp it has also developed another app namely "Tender Info". All tenders whichare hosted on IRCON's tender wizard portal can also be seen on this mobile app.
IRCON has implemented Integrity Pact which is a tool developed by TransparencyInternational which ensures that all activities and transactions between a Company orGovernment Departments and their Suppliers are handled in a fair transparent andcorruption free manner. Memorandum of Understanding ("MOU") was entered into on22nd April 2014 between Ircon International Limited and Transparency International Indiato implement Integrity Pact in IRCON.
Accordingly IRCON has adopted Integrity Pact (IP) as recommended by Central VigilanceCommission (CVC) on 24th June 2014 for tenders/contract for works and supply with anestimated value of Rs.5 Crore and above on all Indian Projects. The Integrity pact wasmade a compulsory document in the conditions of model e-Procurement Documents for allworks.
As per the provision of Integrity Pact and relevant guidelines of Central VigilanceCommission an Independent External Monitor (IEM) was also appointed to receive anycomplaints from the bidder and submit the investigation report.
Vigilance strives to achieve its objective of promoting an impartial fearless andtransparent environment in functioning of the organization by taking steps to preventunethical practices.
19. MOU RATING / AWARDS
A. Your Company has been rated as Excellent' on performance of Memorandum ofUnderstanding (MOU) signed with the Ministry of Railways for the year 2017-18. The MOUperformance for the year 2018-19 is under evaluation.
B. Your Company had received the following awards during the year 2018-19:
1. Construction Industry Development Council (CIDC) bestowed IRCON with CIDC Partnersin progress Trophy 2019 for achieving targets of "Mission Skilling India" undervarious CIDC initiatives; 11th CIDC Vishwakarma in the category of Best ConstructionProject for successfully completing Shivpuri-Guna project well before the scheduled time;11th CIDC Vishwakarma for Best Professionally Managed company having turnover of more thanRs.1000 crore; and 11th CIDC Vishwakarma for CSR practices in Raigarh (Chhattisgarh). Allthese awards were presented by Mr. Prabhakar Singh DG - CPWD and Mr. K.M. Singh FormerCMD - NHPC Ltd at a function held in New Delhi on 7th March 2019 and received by
Mr. S. K. Chaudhary CMD Mr. Deepak Sabhlok Director Projects Mr. M. K. SinghDirector Finance Mr. D. K. Sharma Chief General Manager Ircon Shivpuri Guna TollwayLimited Mr. Suresh P Yadappanavar JGM ISGTL.
2. ET Now Stars of the Industry Award for best corporate CSR practices.
3. Indian Building Congress (IBC) Award for Excellence in Built Environment for ModernCoach Factory Rae Bareli project.
4. Governance Now 6th PSU Awards 2018 in the Value Growth category for Mini Ratna-Icompanies.
5. Rail Analysis Award for Infrastructure Project Excellence in India and Abroad.
6. 8th EPC World Award for 2nd Bhairab Bridge Bangladesh.
7. The University of Engineering & Management (UEM) Jaipur and UEM Kolkatajointly presented Award of Excellence for best practices in the corporate sector.
8. Town Official Language Implementation Committee (TOLIC) (Undertaking-1) Delhifacilitated Ircon International Limited with Incentive Award and Certificate foroutstanding Implementation of Official Language Policy on 28.2.2019.
C. After close of the year 2018-19 your Company had received the award from theFederation of Indian Chambers of Commerce and Industry (FICCI). The Company is bestowedwith Certificate of Appreciation for Good Practices in Quality Systems at the 7th FICCIQuality Systems Excellence Awards for Industry 2019. This award was presented by Smt.Surina Rajan Director General BIS to Mr. S.P. Singh GM/Quality Management at a functionheld in New Delhi on 24th April 2019.
D. Further the following awards were presented to the Chairman & ManagingDirector IRCON:
1. Institute of Economic Studies Excellence Award to IRCON and Udyog Rattan Award toCMD IRCON.
2. Amity Excellence Award to CMD IRCON for best practices in the construction andinfrastructure sector.
20. OTHER DISCLOSURES
A. Particulars of Loans Guarantees or Investments:
The details of investments made loans granted and guarantees extended by your Companyin terms of section 186 of the Companies Act 2013 during the year 2018-19 forms part ofthe notes to the financial statements [note no. 40(c)] provided in the Annual Report.
B. Disclosure on remuneration of directors and employees:
IRCON being a Government Company the remuneration payable to its functional directorssenior management officials and all other employees is in accordance with the guidelinesissued by Department of Public Enterprises (DPE). As required in terms of section 178(4)of the Companies Act 2013 the salient features of the policy relating to theremuneration for the key managerial personnel and other employees is placed on the websiteof the company at the web address www.ircon.org (HRM and Career Sections).
Further as per provisions of section 197 of the Companies Act 2013 read with the Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014every listed company is required to disclose certain details of the remuneration of theDirectors in the Directors' Report. However as per Notification No. GSR 463(E) dated 5thJune 2015 issued by the Ministry of Corporate Affairs Government Companies are exemptedfrom complying with provisions of section 197 of the Companies Act 2013. AccordinglyIRCON being a Government Company such particulars are not included as part of theDirectors' Report. However remuneration paid to directors during FY 2018-19 are disclosedin the Corporate Governance Report
C. Disclosure on Evaluation of Directors etc.
IRCON is a Government Company under the administrative control of Ministry of Railways.The selection procedure for all the directors is also laid down by the Government of Indiaand all the directors of the Company have been appointed in accordance with the saidprocedure. The functional directors including Chairman and Managing Director (CMD) areselected on the recommendations of Public Enterprises Selection Board (PESB) in accordancewith the procedure and guidelines laid down by Government of India and there is system andprocedure laid down by Department of Public Enterprises (DPE) for evaluation of itsfunctional directors including CMD. The evaluation framework for assessing the performanceof functional directors comprises of the following key areas:
Performance of the Company under the MOU signed with Ministry of Railways.
Performance with respect to the targets fixed for the respective director.
The evaluation includes self-evaluation by the respective functional directorsand subsequent assessment by CMD and thereafter final evaluation by the Ministry ofRailways (the administrative ministry).
In respect of CMD the evaluation includes self-evaluation and final evaluationby the Ministry of Railways.
In respect of Government nominee directors their evaluation is done by the Ministry ofRailways as per the procedure laid down. Since independent directors are also appointedby the Government of India their evaluation is also done by the Ministry of Railways.
The remuneration policy of the Company and the procedure and policy for SeniorManagement and their remuneration are approved by the Nomination & RemunerationCommittee.
D. Compliance with Secretarial Standards:
During the year the Company is generally in compliance with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India except as otherwisestated in the Secretarial Audit Report.
E. Extracts of Annual Return
The Extracts of Annual Return of your Company for the year 2018-19 in Form MGT-9pursuant to section 134(3)(a) of the Companies Act 2013 read with section 92(3) of theCompany is available is placed as Appendix-G.
Your Company did not accept any deposits from public during the year.
G. Significant material orders passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future:
No order has passed by the Regulators or Courts or Tribunals impacting the goingconcern status of the Company and its operations in future during the financial year2018-19.
H. Material changes and commitments affecting the financial position between end of thefinancial year and the date of report
No material changes and commitments affecting the financial position of the Companyhave been noted after the end of financial year and the date of this report.
I. Change in the nature of business
There was no change in the nature of business of the Company during the financial year2018-19.
J. Qualification reservation or adverse remarks in the Secretarial Auditor Report andAuditor's Reports
The Management Response on the qualification in the Secretarial Auditor Report andcompliance of conditions of Corporate Governance for the year 2018-19 is placed asAppendix-I 1.
The Management Response on qualification contained in the Auditors' Report 2018-19(Standalone and Consolidated) is placed as Appendix-K.
21. INTEGRAL REPORTS
The following reports/documents along with relevant annexures form an integral part ofthis report and have been placed as Appendices numbered herein.
1. "Corporate Social Responsibility and Sustainability Report" provides abrief outline of the company's CSR and Sustainability policy the composition of CSR &Sustainability Committee average net profit of the Company for the last three financialyears prescribed CSR expenditure and details of CSR spent on the activities / projectsundertaken during the financial year etc. [Appendix C].
2. The "Management Discussion and Analysis Report" provides an overview ofthe affairs of the Company its legal status and autonomy outlook business environmentsectoral outlook financial and operational performance strengths opportunitiesconstraints strategy and risks and concerns internal control systems and their adequacyas well as material developments in human resource [Appendix D].
3. The "Corporate Governance Report" highlights the Company's philosophy onCorporate Governance and Key Values Board of Directors including their details detailsof Committee of the Board details of general body meetings means of communicationgeneral shareholders information other relevant disclosures etc. [Appendix E]. Itis supplemented by following compliance certificates:
1. Certificate signed by the Chairman & Managing Director affirming receipt ofcompliance with the Code of Conduct and Key Values from all Board members and SeniorManagement personnel during the year 2018-19 (placed at Annexure E1);
2. Certificate on non-disqualification of directors (placed at Annexure E2);
3. Certificate from Chairman & Managing Director and Director Finance with respectto the truth and fairness of the Financial Statements due compliances and financialreporting (placed at Annexure E3); and
4. Certificate of compliance of Corporate Governance provisions signed by practisingcompany secretary with respect to the conditions enumerated in SEBI (LODR) regulationsand DPE Guidelines on Corporate Governance (placed at Annexure E4).
4. The "Business Responsibility Report" in compliance with the provisions ofregulation 34 of SEBI (LODR) Regulations 2015 in the format prescribed under SEBICircular no. CIR/CFD/CMD/10/2015 dated 4th November 2015 is placed as Appendix-F. Thereport is mandated for the top 500 listed companies based on market capitalization anddescribes the initiatives taken by IRCON from an environmental social and governanceperspective.
5. The "Extracts of Annual Return" in Form MGT-9 pursuant to section134(3)(a) of the Companies Act 2013 read with section 92(3) of the Company is placed asAnnexure-G.
6. The "Disclosure of Related Party Transactions" in Form AOC-2 pursuant toSection 134(3)(h) of the Companies Act 2013 and Rule 8 (2) of the Companies (Accounts)Rules 2014 is at Appendix H. Further the disclosure in terms of regulation 53(f)of the SEBI (LODR) Regulations 2015 forms part of the financial statements.
7. The "Secretarial Audit Report" from the secretarial auditor in Form MR-3as required under section 204 of the Companies Act 2013 read with rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is at Appendix I. The Management Response on the qualification contained in the Secretarial Audit Reportand compliance of conditions of Corporate Governance for the year 2018-19 is placed asAppendix-I 1.
8. The "Dividend Distribution Policy" of the Company pursuant to requirementunder Regulation 43A of the SEBI (LODR) Regulations 2015 is placed as Appendix-J.
9. The Management Response on qualification contained in the Auditors' Report for thefinancial year 2018-19 (Standalone and Consolidated) is placed as Appendix K.
10. The NIL' comments of Comptroller & Auditor general (C&AG) of Indiadated 11.07.2019 on the Audited Financial Statements of your Company for the financialyear 2018-19 have been placed as part of the Annual Report.
22. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the financial statements the applicable accountingstandards had been followed except as otherwise stated in the annual financial statementsand there has been no material departure;
ii. that such accounting policies were selected and applied consistently and suchjudgments and estimates were made that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company for the financial year ended on 31stMarch 2019 and of the profit of the Company for the financial year 2018-19;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
iv. that the financial statements have been prepared on a going concern basis;
v. that internal financial controls were adequate and operating effectively; and
vi. that proper systems had been devised to ensure compliances with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
A. Statutory and Branch Auditors:
The Auditors of the Company appointed by the Comptroller & Auditor General of Indiafor the financial year 2018-19 are:-
|K.G. Somani & Co. ||For Company as a whole |
|Branch Auditors for projects in India: || |
|Gupta Gupta & Associates Srinagar ||All projects under Jammu & Kashmir Region |
|KDS & Co. Mumbai ||All projects under Mumbai Region |
|K S Bothra & Co. Kolkata ||All projects under Eastern Region |
|Prasad Azad & Co. New Delhi ||All projects under Northern Region |
|Todi Tulsyan & Co. Patna ||All projects under Patna Region |
Branch Auditors for projects abroad:
|Kerbal Athmane Algeria ||Algeria |
|Middel & Partners South Africa ||South Africa |
|Jayasinghe & Co. Sri Lanka ||Sri Lanka |
|Kumpulan Naga Malaysia ||Malaysia |
|Toha Khan Zaman & Co. Bangladesh ||Bangladesh |
B. Cost Auditor:
The Board of Directors have appointed M/s. Chandra Wadhwa & Co. Cost Accountantsas Cost Auditor of your Company for the financial year 2018-19 for conducting the audit ofcost records maintained by the Company as per the applicable Rules / Guidance Note etc.
C. Secretarial Auditor:
The Board of Directors have appointed Kumar Naresh Sinha & Associates PractisingCompany Secretary as Secretarial Auditor for conducting Secretarial Audit of your Companyfor the financial year 2018-19.
D. Internal Auditors:
The Board of Directors have appointed following Internal Auditors for 2018-19:
Internal Auditors for Indian Projects
|K.K. Goel & Associates Jammu ||J&K Region |
|J. Singh & Associates Mumbai ||Mumbai Region |
|A. R. & Co. New Delhi ||Northern Region |
|Gupta Sachdeva & Co. Patna ||Patna Region |
|SBA Associates Kolkata ||Eastern Region |
|Raj K. Sri & Co. New Delhi ||Corporate Office Region |
Internal Auditors for Foreign Projects at Bangladesh and Algeria:
The Internal Audit for projects abroad viz. Bangladesh and Algeria was undertakenin-house by the officials of the Company for the financial year 2018-19.
Your Directors would like to express their appreciation and thanks for the assistanceand co-operation received from to the Ministries of Railways Road Transport and HighwaysExternal Affairs Finance Commerce Urban Development and other ministries departmentsand agencies office of Comptroller & Auditor General Reserve Bank of IndiaStatutory Branch Secretarial & Internal Auditors Bankers of the Company IndianEmbassies & Missions abroad and Foreign Missions & Embassies in India EXIM BankExport Credit and Guarantee Corporation; Protector of Immigration; Passport Authority; andour esteemed clients both in India and abroad without whose active support theachievements of the Company during the year under review would not have been possible.
I would like to express my sincere and heartiest thanks to Department of Investment andPublic Asset Management (DIPAM) Securities and Exchange Board of India (SEBI) StockExchange i.e National Stock Exchange of India Limited and BSE Limited and Registrar ofCompanies (ROC) for their guidance and support throughout the IPO process.
We place on record our sincere appreciation for all the employees of the Company at alllevels for their untiring efforts dedication and sincerity of purpose in improving theperformance and profitability of the Company.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||(S.K. Chaudhary) |
|Date: 22nd July 2019 ||Chairman & Managing Director |
|Place: New Delhi ||(DIN: 00515672) |