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Ircon International Ltd.

BSE: 541956 Sector: Infrastructure
NSE: IRCON ISIN Code: INE962Y01013
BSE 00:00 | 19 Feb 365.95 -1.95






NSE 00:00 | 19 Feb 368.90 1.45






OPEN 368.90
52-Week high 470.00
52-Week low 338.00
P/E 6.06
Mkt Cap.(Rs cr) 3,442
Buy Price 363.55
Buy Qty 5.00
Sell Price 365.95
Sell Qty 37.00
OPEN 368.90
CLOSE 367.90
52-Week high 470.00
52-Week low 338.00
P/E 6.06
Mkt Cap.(Rs cr) 3,442
Buy Price 363.55
Buy Qty 5.00
Sell Price 365.95
Sell Qty 37.00

Ircon International Ltd. (IRCON) - Director Report

Company director report


The Directors of your Company have pleasure in presenting their 42 Report on theaffairs of the Company for the financial year 2017-18.


A. Financial Performance:

During the financial year 2017-18 your Company achieved a total operating income ofRs.3896.39 crore registering 28.84% increase over previous year's operating income ofRs.3024.23 crore (re-grouped). The operating turnover from international segmentincreased by Rs.274.18 crore i.e. from 326.95 crore to Rs.601.13 crore and the domesticsegment reports increase in operating turnover of Rs.627.41 crore i.e. from Rs.2667.85crore to Rs.3295.26 crore.

The profit before tax (PBT) has increased to Rs.533.31 crore as compared to Rs.531.54crore (including exceptional items of Rs.73.69 crore) in the last year. The PBT hasincreased mainly due to increase in total turnover from that in the previous year. Theprofit after tax has increased to Rs.390.86 crore over the previous year of Rs.368.85crore.

The earnings per share for the year 2017-18 have increased to Rs.40.01 as compared toRs.37.27 in the previous year. The increase has been on account of increase in profitafter tax and buy-back of shares done during the year.

On a consolidated basis your Company has recorded a turnover of Rs.4212.40 croreduring the financial year ended 31 March 2018 and achieved consolidated Net Profit ofRs.411.62 crore for the said financial year.

B. Financial Performance Indicators:

Some important indicators of financial performance of the Company for the year 2017-18vis-a-vis 2016- 17 are given below:

( crore)

Sl. No. Particulars 2017-18 2016-17 Increase / (Decrease) [in %]
1. Total income/ turnover 4123 3254 26.70
2. Total Operating income/turnover 3896 3024 28.84


( crore)
Sl. No. Particulars 2017-18 2016-17 Increase / (Decrease) [in %]
3. Operating income from Foreign Projects 601 327 83.83
4. Operating income from Indian Projects 3295 2668 23.52
5. Profit before tax 533 532 0.33
6. Profit after tax 391 369 5.97
7. Net worth 3752 3828 (1.99)
8. Dividend 192.40 192.40* --

*Includes final dividend of Rs. 97.25 crore for the year 2016-17 which was paid in theyear 2017-18 after approval by AGM as per IndAS.

C. Foreign Exchange Earnings and Outgo:

The Company has earned a foreign exchange of Rs.450 crore during 2017-18 as compared toRs.265 crore earned during 2016-17. The foreign exchange outgo stood at Rs.386 croreduring 2017-18 as compared to Rs.241 crore during 2016-17. Thus the net foreign exchangeearnings have increased by 167% i.e. from Rs.24 crore in 2016-17 to Rs.64 crore in 2017-18due to increase in operating turnover from foreign projects.

D. Dividend:

The Board of Directors (BoD) had declared an interim dividend of Rs. 95.15 crore(approx.) i.e. 101.16% on the paid-up share capital of Rs. 94.05 crore in March 2018. Thesaid interim dividend was paid to all the shareholders in March 2018. The BoD hasrecommended final dividend (over and above the interim dividend) of Rs. 97.25 crore(approx.) i.e. 103% on the paid-up share capital of Rs. 94.05 crore. With this the totaldividend for the year 2017-18 would sum up to Rs. 192.40 crore (approx.) i.e. 204% ofpaid-up share capital which works out to 49.22% of the post-tax profits for 2017-18 and5.13% of net worth as on 31 March 2018. After approval and payment of the proposeddividend the cumulative dividend to shareholders up to 2017-18 will stand at Rs.1492.31crore.

The dividend will be paid to the shareholders whose name appears in the Register ofMembers as on 31 August 2018.

E. Appropriations / Tax Provisions / Reserves:

1. Appropriations / Tax Provisions: ( crore)

Sl.No. Particulars 2017-18 2016-17
1 Interim Dividend (including additional interim dividend) declared and paid 95.15 95.15
2 Proposed Dividend 97.25* 97.25
3 Dividend Distribution Tax on Interim Dividend 19.37 19.37
4 Tax on proposed Dividend 19.99* 19.80
TOTAL 231.76 231.57

*Proposed Dividend Distribution Tax on proposed dividend of Rs.97.25 (to be declared atthe AGM) amounting to Rs.19.99 crore.

2. Capital Redemption Reserve:

During the year your Company has transferred Rs.4.93 crore to capital redemptionreserve account for buy-back of equity shares [detailed in para F (2) below] which isequal to nominal amount of equity shares so bought back and extinguished during 2017-2018.

F. Increase in Share capital:

1. Authorised Share Capital:

During the year the authorized share capital has been increased from Rs.100 crore toRs.400 crore in terms of approval by the shareholders at the Extra-ordinary GeneralMeeting held on 22 May 2017. This increase was already approved vide letter dated 3November 2016 by the President of India (through administrative ministry).

2. Paid-up Share capital after Buy-Back of equity shares:

The Inter Ministerial Group (IMG) Department of Investment and Public Asset Management(DIPAM) at its meeting held on 7 June 2017 on the basis of examination of financialaccounts of Ircon for the financial year 2016-17 and on financial criteria specified in"Guidelines on capital Re-structuring of CPSEs" issued by DIPAM on 25 May 2016suggested Ircon to consider buy-back of shares to the tune of 5% of aggregate paid-upequity and free reserves of the

Company as on 31 March 2017. Accordingly with the approval of the Board of Directors aproposal for buy-back by the Company of its fully paid-up equity shares of Rs.10/- eachnot exceeding 4941818 fully paid-up Equity Shares was sent to the existing shareholdersat a price of Rs.386.72/- per Equity Share payable in cash on a proportionate basis upto5% of the net worth (comprising paid-up share capital plus free reserves) i.e. Rs.3822.27crore as per the audited financial results of the Company for the year ended on 31 March2017.

Thus based on the acceptance of the offer by the Ministry of Railways (on behalf ofthe President of India) your Company had bought back 4928426 fully paid-up equityshares of Rs.10/- each utilizing Rs.234.57 crore (which includes tax of Rs.43.98 crore).Accordingly the paid-up share capital of the Company stood reduced from Rs.98.98 crore toRs.94.05 crore w.e.f. 26 December 2017.

3. Listing of Shares:

After the announcement of the listing of shares of Ircon in the budget for the 2017-18by the Government of India DIPAM Ministry of Finance has appointed Legal Advisors BookRunning Lead Managers (BRLM) and Registrars to the Issue for disinvestment of paid-upequity share capital of the Company through Initial Public Offering (IPO) of shares by thePromoters (i.e. Government of India). Accordingly for the proposed initial publicoffering of equity shares of Ircon M/s. Crawford Bayley & Co. along with theirInternational consortium partner M/s. Hogan Lovells are Legal Advisors; IDBI CapitalMarkets & Securities Limited SBI Capital Markets Limited and Axis Capital Limitedare BRLM; and M/s Karvy Computer Karvy Computershare Private Limited is providing servicesof Registrar.

Your Company has filed Draft Red Herring Prospectus (DRHP) with SEBI on 27 March 2018.Subsequently BSE and NSE have granted its in-principle approval of the Company's listingapplication and SEBI observations have been received on 12 July 2018. Subsequently theBoard of Directors at its meeting held on 31 August 2018 have approved the Red HerringProspectus (RHP) of the Company.

4. Dematerialization of Shares:

The details of dematerialization of shares is provided in the extract of Annual Reportplaced as Appendix-G in Para IV (Share holding Pattern).


The Company secured works worth Rs.6106 crore during the year 2017-18. The work loadas on 31 March 2018 stood at Rs.22407 crore (approx.) as compared to Rs.18878 (approx.)crore as on 31 March 2017. The work load as on 30 June 2018 is Rs.26469 crore (approx.).


A. Completed Foreign Projects:

Your Company has commissioned two projects in Bangladesh during the financial year2017-18.


1. The project for construction of 2 Bhairab Railway Bridge with Approach Rail Lines(Lot-A) -- being undertaken through unincorporated JV between your Company and AFCONS viz.IRCON-AFCONS JV for Bangladesh Railway at a revised value of Rs.265 crore (Ircon'sshare) has been completed in March 2017. The trial run of engine was carried out on 10April 2017. The bridge was inaugurated jointly by Hon'ble Prime Minister of India Mr.Narendra Modi and Hon'ble former Prime Minister of the People Republic of Bangladesh SeikhHasina Wazed by Video Conferencing on 9 November 2017.

2. Design Supply Installation Testing and Commissioning of Computer basedInterlocking Colour Light Signalling System on turnkey basis at 11 stations betweenIshurdi-Darsana section of Bangladesh for Bangladesh Railway at a value of Rs.60 crorehas been completed in September 2017.

B. On-going Foreign projects:

Your Company is executing the following three 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 2018 is 14%. The workwas commenced in March 2016 and is scheduled to be completed in February 2020. The projectis progressing slowly due to late handing over of encumbrance free land and issuance ofdrawings for alignment (L-section and X-section) bridges and buildings by theEngineer/Bangladesh Railway.


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 Alger-Oran section ofAlgerian Railways. The value of contract including additional works for realization ofdouble line has been revised to Algerian Dinar Cr. 3073 (Rs. 1784 crore converted). Theproject was awarded in 2008 and is likely to be completed in December 2019. The reasonsfor delay are significant increase in scope of works delay in payments due tonon-allocation of funds to the project excessive delay in approval of amendments delayin approval of drawings and removal of obstructions delay in resolving the discrepancy inmode of payments etc. The work of 67 kms new track has been handed over to the clientinspite of the cash flow problems which are hampering progress particularly structuralworks awarded to sub-contractors. Work on the existing line has also started in the firststretch of 13 kms 6 out of 7 station buildings are ready to be handed over and the bridgework has 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 and likely completion by December 2019.

South Africa

3. Procurement of Plant Design Supply and Installation of Overhead Track EquipmentsTraction Sub-stations Auxiliary Power Supplies Substations Bulk Power Supplies SwitchingStations and Signalling Systems for Majuba Rail Project South Africa for Eskom HoldingsSOC Limited at a value of Rs. 308 crore (Rand 663 million Rand 1 = 5.212). The work hasbeen secured in November 2015. During the operation of contract Foreign Currency issuearose which has been resolved. The physical work have been completed in March 2019 andcommissioning work are in progress.

C. Likely Foreign projects:

Concerted efforts are being made to secure contracts in

Bangladesh Thailand Nepal Turkey Ghana

Sri Lanka and Malaysia.

D. Project Completed in India:

During the financial year 2017-2018 following three projects got completed:

1. One RoB on State owned Road (other than NHs) in Bihar through its funds on 1 Km atManpur by-pass in Gaya District Bihar for Road Construction Department Government ofBihar at a value of Rs.60 Crore.

2. Carrying out topographical and Geotechnical survey; Preparation of Master PlanPlanning Designing and Construction of Boundary Wall and allied Preparatory works forthe National Institute of Technology Mizoram at a value of Rs.140 crore.

3. Construction of New Indoor Sports Complex at Gholsapur (Behala) on Sealdah Divisionfor Eastern Railway at a value of Rs.58 crore.

E. New Projects in India:

During 2017-18 your Company secured following projects in India of total valueRs.6106 crore:

1. Katni Grade Seperator / By pass line (21.50 Km) Project for West Central Railway atan estimated cost of Rs.582.13 crore.

2. Railway electrification work for Katni-Singrauli for West Central Railway at anestimated cost of Rs.258.33 crore.

3. Mathura-Kasganj-Kalyanpur Railway Electrification Project with Signalling for NorthEastern Railway at an estimated cost of Rs.401 crore

4. Visakhapatnam (Diesel Loco shed) Augmentation of shed for homing 100 HHPlocomotives for East Coast Railway at an estimated cost of Rs.61.75 crore.

5. Re-development of Safdarjung Railway Station for RLDA and Ministry of Railways atan estimated cost of Rs.261.72 crore.

6. Construction of Corridor-III of East-West Corridor between Gevra Road to Pendra Roadapproximately 135 km feasibility study of East-West Corridor between Gevra Road to PendraRoad in the State of Chhattisgarh for Chhattisgarh East-West Railway Limited (CEWRL) atan revised estimated project cost of Rs.3272.98 crore as per approved Detailed ProjectReport (DPR).

7. Construction of Corridor-I of East Corridor between Kharsia to Dharamjaygarh andSpur Line in the State of Chhattisgarh for Chhattisgarh East Railway Limited (CERL) at anestimated project cost of Rs.537.27.

8. Survey Feasibility study Detailed Design and Construction of various identifiedRail Coal Connectivity Project(s) for Mahanadi Coal Railway Limited (MCRL) at anestimated project cost of Rs.35.20 crore.

9. Akhaura Agartala Rail Link project for North Frontier Railway at an estimatedproject cost of Rs. 574 crore as per approved DPR out of which Rs.28.69 crore has beenconsidered for the year's order book.

10.Railway Tracks (In-plant) Package (Package No. 50) for 3.0 MTPA Integrated SteelPlant at Nagarnar for NMDC Limited at a value of Rs. 52.95 crore.

11.Further works in Katra-Qazigund section including Dharam- Qazigund section Km 73.00to 91.00 for Northern Railway at an estimated cost of Rs.613.72 crore.

G. Your Company has entered into a Memorandum of Understanding on 26 March 2018with the Rail Land Development Authority (RLDA) for transfer of lease hold rights to Irconfor commercial development on the land parcel admeasuring 4.3 (four point three) Hectareat Bandra East Mumbai Maharashtra against the payment of Upfront Lease Premium. Inconsideration of its roles and responsibilities Ircon shall be entitled to receive fromRLDA an amount equivalent to a total of 3% (three percent) of the Upfront Lease Premium.In order to pay upfront lease premium equivalent to guidance price as approved by RLDAGST Stamp Duty and Registration Charges a tripartite a loan agreement has been signedamongst Ircon RLDA and

Indian Railway Finance Corporation Limited (IRFC) on 28 March 2018. RLDA has agreed topay to Ircon such amounts as maybe required by Ircon to meet their debt servicingobligations as and when due under this Agreement. Further the Ministry of Railways alsohas agreed to provide corresponding amounts to RLDA.

H. On-going major Projects in India:

A list of major on-going projects in India is given at

Appendix A.

I. New Projects secured after the close of the year:

After the close of the year 2017-18 your Company secured following projects in India:

1. Construction of New BG Electrified Rail line between Dharamjaigarh to Korba (Urga)of Chhattisgarh East Railway Limited (CERL-II) at an estimated project cost Rs.260 croreas per approved DPR.

2. Construction of Corridor-III of East West Corridor between Gevra Road to Pendra Roadin the State of Chhattisgarh for CEWRL for additional value of Rs. 260 crore on account ofrevised contract value.

3. Survey Feasibility study Detailed Design and Construction of various identifiedRail Coal Connectivity Project(s) for Jharkhand Central Railway Limited (JCRL) at anestimated project cost 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 anestimated project cost of Rs. 1079 crore.

5. Execution of rail connectivity projects identified by Bastar Railway Private Limited(BRPL) at an estimated project cost 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 a value Rs.1865 crore.


A brief background on the subsidiaries (including the newly formed wholly-ownedsubsidiary --Ircon Vadodara Kim Expressway Limited incorporated on 16 May 2018) and jointventures companies of Ircon along with their financials and performance is given at

Appendix B.


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 four subsidiaries viz. IrconISL IrconPBTL IrconSGTL and IrconDHHL; and [as perequity method] with seven joint venture companies viz. IRSDC ISTPL CERL CEWRL MCRLJCRL and BRPL. The accounts of un-incorporated joint ventures have been included in thestandalone financial statements for the financial year 2017-18.

The Board of Directors of your Company has at its meeting held on 3 August 2018approved the Financial Statements for 2017-18 (Standalone and Consolidated). Your Companywould make available audited financial statements (standalone and consolidated) of Irconand accounts / financial statements of its subsidiaries (IrconISL IrconPBTL IrconSGTLand Ircon DHHL) at its website (

A statement containing the salient features of the financial statements of foursubsidiaries and seven joint venture companies in Form AOC-1 is attached with theFinancial Statements.


A. Presidential Directive:

During the year one presidential directive was received from Railway Board vide letterdated 24 November 2017 for implementation of pay revision of Board level and below Boardlevel executives and non-unionised supervisors of Ircon w.e.f. 1 January 2017. The samewas implemented during the year.

B. Official language:

The Company is undertaking various novel and encouraging initiatives for pervasive useof Hindi in the office. Some of them are: a) Pledge by all employees to work in Hindicompletely on every last Monday of the month. b) Rajbhasha Sanghosthi is being conductedon quarterly basis in Corporate Office. c) Birthday wishes to employees a thought and aword contributed by different departments on rotational basis poem by renowned poets etc.are being displayed in Hindi at the reception.

In addition regular quarterly meetings of Official Language Implementation Committeeand workshops 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. Bilingualfacility has been introduced for computer systems and mobile phones used by officials ofthe Company. Officers and staff are being encouraged through various incentive schemes forimplementation of the annual program of the Official Language Department. Bilingualformats have been made available at Ircon's internal website for use by the employees.

C. 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

Public Information Officer and State Level Public Information Officers and are postedon Ircon's website. Queries received have been replied within the stipulated time. Thequeries mostly related to service matters/recruitments finance contract and projects.The details of RTI cases have been forwarded to the Ministry of Railways for publicationon Central Information Commission (CIC) website on quarterly as well as annual basis.During the year 2017-18 185 applications and 30 first appeals were received and at thebeginning of the year 10 applications and 3 first appeals were under process. Out of this185 applications (including 3 appeals at the beginning of the year) were processed /disposed off. As on 31 March 2018 10 applications were under process for disposal withinthe allowable time limit.

D. 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 i.e. provides for facilitation of registrationof MSEs firms registered with any statutory bodies specified by Ministry of MSME andparticipation in e-tender by availing the benefits of exemption from payment of cost oftender fee and Earnest Money.

Your Company has requested Ministry of MSME (through Ministry of Railways) in terms ofletter dated 21 September 2017 for exemption from achieving mandatory target of 20% forthe financial year 2016-17.

The same was approved by the Ministry of MSME on 1 March 2018.

The achievement of procurement from MSEs in compliance to Public Procurement Policyduring the financial year 2017-18 is placed below:

Sl.No. Particulars 2017-18
1. Total annual procurement (in Rs. Crore) 263.11
2. Target %age of annual procurement 52.62
(20%) (in Rs. Crore)
3. Total value of goods and services procured from MSEs (including MSEs owned by SC/ST entrepreneurs) (in Rs. Crore) 35.34
4. Total value of goods and services procured from only MSEs owned by SC/ST entrepreneurs -
5. % age of procurement from MSEs (including MSEs owned by SC/ST entrepreneurs) out of total procurement 13.43%
6. % age of procurement from only MSEs owned by SC/ST entrepreneurs out of total procurement -

During the year 2017-18 your Company has conducted six

(06) Vendor Development Programmes for MSEs.


Your Company's Board is duly constituted and is in compliance with the requirements ofthe Companies Act 2013 and DPE Guidelines on Corporate Governance 2010. The followingDirectors & KMP were appointed during the year 2017-18:

1 Dr. C.B. Venkataraman w.e.f. 28.09.2017
Part-time (Non-Official) Director
2 Mr. Narinder Singh Raina w.e.f. 17.10.2017
Part-time (Non-Official) Director
3. Mr. Ved Pal w.e.f. 22.11.2017
Part-time (Official) Director
[DIN: 07902760]
4. Mr. Ashok Kumar Ganju w.e.f. 08.03.2018
Part-time (Non-Official) Director
[DIN: 07014589]
5. Ms. Iti Matta w.e.f. 01.11.2017
Company Secretary Compliance
Officer & KMP
6. Ms. Ritu Arora w.e.f. 04.01.2018
Company Secretary Compliance
Officer & KMP

The details of the aforesaid four directors appointed during the year 2017-18 andnoting / approval of their appointment at the ensuing Annual General Meeting (AGM) arecontained in the accompanying Notice convening the ensuing AGM of the Company.

The following Directors & KMP ceased to hold office during the year 2017-18:

1 Mr. S.C. Jain w.e.f. 17.11.2017 due to change in nomination by the Ministry of Railways.
Part-time (Official) Director
[DIN: 07564584]
2 Mr. Hitesh Khanna w.e.f. 28.03.2018 due to pre-mature termination of tenure by the Ministry of Railways on his own request.
Director Works
[DIN 02789681]
3. Ms. Sumita Sharma w.e.f. 27.10.2017 resigned from the post of Company Secretary
Company Secretary & KMP
4. Ms. Iti Matta w.e.f. 04.01.2018 relinquished charge of the post of Company Secretary
Company Secretary
Compliance Officer & KMP

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 ceased to hold office after the close of the year:

1 Mr. Sanjay Kumar Singh w.e.f. 02.07.2018 due to termination of tenure by the Ministry of Railways
Part-time (Non-Official)
Director [DIN: 00003695]


During April 2017 to March 2018 ten meetings of the Board of Directors and thirteenmeetings of the Audit Committee were held. The details of meetings of the Board ofDirectors Audit Committee and other Board level committees are given at para 3 of theCorporate Governance Report.


Details of the internal control system and risk management are provided in theManagement Discussion and Analysis Report.


During the year the Company has approved a revised Whistle Blower Policy under whichthere is a vigil mechanism in place for the Employees and Directors of the Company toreport to the Management concerns about unethical behavior actual or suspected fraud orviolation of the Company's code of conduct.


Cordial and harmonious industrial relations prevailed in the Company during the year.The total manpower strength as on 31 March 2018 stood at 1622 which included 1179regular employees 49 deputationists and 394 employees on contract (including servicecontract). 832 employees of the Company were technically and professionally qualified. Thetotal number of women employees was 63. There were a total of 205 scheduled caste /scheduled tribe employees as on 31 March 2018.

During the year the strength of total new employed personnel stood at 329 whichincluded 104 regular employees 14 deputationists and 211 employees on contract(including service contract). Out of these new recruits 112 employees are technically andprofessionally qualified 6 are women employees and 19 scheduled caste / scheduled tribeemployees. Your Company has been continuously taking steps for building capacity of itshuman resource 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. During the year 2017-18 a total 912 man-days training wasimparted to officials of Ircon through workshops seminars conferences in-housetrainings and training in external institutes etc. Your Company has various schemes forstaff welfare like educational scholarships one-time educational grant for admission toprofessional degrees and diploma courses educational awards to meritorious children ofemployees educational assistance to the wards of deceased employees assistance formarriage of daughters and dependent sisters of group ‘C' and ‘D' employees etc.facility of homeopathy and allopathy treatment at Corporate office. Other facilities likeimmediate financial assistance and guidance are being provided to employees and theirfamily members in case of any medical exigency lumpsum ex-gratia payment to familymembers in case of death of serving employee.

Your Company aims to provide congenial and safe working atmosphere to women employees.The Company has a complaints committee for prevention of sexual harassment at work place.Further provision pertaining to prohibition of sexual harassment has also beenincorporated in Ircon Conduct Disciplinary and Appeal Rules. No complaints relating tosexual harassment has been received by the Company during the year. On InternationalWomen's day the company organized a workshop exclusively for women employees by DelhiPolice at the Corporate office of the Company.

The 42 Annual Day of the Company was celebrated on 28 April 2018 with traditionalfervor and gaiety. On this occasion exemplary work done by employees in Indian as well asforeign projects and select projects were appreciated and rewarded. Educational awards tomeritorious children of the employees were also given on this occasion.



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 Company has developed the mobile phone / web basedvideo library for Personal Safety & safety in construction in 2D format. This mobile/ internet based application has been released in English and Hindi and is available onIrcon's internal website. During the year the Company has started an initiative to sharetechnical knowledge and technical papers based on IS/IRC/IRS/ASTM Standards StandardConstruction practices and experiences. The topics were CAR and PII & PLI Policies;Railway Doubling projects Work Procedure; Working Adjacent to Railway Track SafetyGuidelines; Comparison between IS: 383- 1970 versus IS: 383 - 2016; The Slings - Vital AndWeak Links in Lifting & Hoisting Operations; Bolt and Nuts - Engineering Aspects; HighStrength Concrete - Concrete with Mineral Additives.

Your Company established an Environment Management System (EMS) and wascertified for ISO 14001:2004 in October 2011. The latest re-certification audit for ISO14001-2015 has been conducted in March 2017 whereby the Company has been re-certified foranother three years i.e. up to May 2020. During the year QMS was updated in the month ofJune 2017 and EMS in the month of May 2017 quite before the last updation date ofSeptember 2018 which is an improvement over the past practices in the Company.

The Company nominates Environment officers at major Indian projects to monitor EMS attheir respective projects who complies with the environmental laws and monitor airquality. This is an ongoing process until completion of the project. Environmentalchecklists have been developed and maintained by all projects. In addition the Companyhas a fully operational environmental lab in Jammu for study of impact on environment bythe construction activities. Environmental friendly equipment such as solar panels havebeen installed and are being installed at various offices / projects. Waste water isrecycled at Corporate Office through Sewage Treatment Plant (STP) and the same is usedfor horticulture work. STPs are also being constructed at Noida Gurgaon and MFCbuildings. LED lights sensor lights and sensor taps are being used in Corporate Office toconserve electricity and water. Various environment friendly steps like use of fly ashbrick instead of clay brick rain water harvesting arrangements sensor controlled CromiumPlate (CP) fittings use of latest version of fecade glass (glass in building) to make thebuilding sustainable etc. are being taken up across various offices / projects of theCompany. Monitoring of water usage and waste water ambient air quality and noise qualityis also being carried out at various construction sites. The Company is emphasizing onproviding clean environment by initiating indoor air quality monitoring in the CorporateOffice building. Tree plantation is also undertaken by corporate office and projectoffices.

Your Company has also been certified for Occupational Health & Safety ManagementSystem (OHSAS BS 18001:2007) in December 2012 by TUV SUD South Asia. There-certification audit was conducted in October 2015 whereby the Company had beenre-certified for another three years i.e. up to December 2018.

Corporate Quality Council and Project Quality Council meetings were conducted quarterlyat Corporate Office and projects respectively to review the implementation of QMS EMSand OHSAS. The Quality objectives were measured and reviewed both at the Corporate and atthe 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 non-conformities encountered during the audit but also the salient featuresprogress positive points if any etc.



On energy conservation front your Company has completed work of Design SupplyInstallation Testing and Commissioning of grid connected solar power plant of 2MWcapacity with all the electrical and associated equipment including civil works at RailCoach Factory Rae Bareli (U.P.) at a value of Rs. 15.60 crore. The plant is fullyoperational and meets about 21% of electrical energy requirement for the factory. TheCompany has procured 1 MW additional Solar Power Plant at Rail Coach Factory Rae Bareliin addition to earlier installed 2 MW Solar Power Plant. Additional 10 KW Roof Top GridConnected Solar Power Plant has been made operational as a step to conserve energy. ThisSolar Power Plant is in addition to existing capacity of 80 KW and has been implementedafter energy audit contributing to environment through usage of Green Energy. Furtheradditional capacitor banks have been installed at Corporate Office building to improvepower factor which would further reduce the Electrical Energy consumption.

Technology absorption and upgradation

Supervisory Control and Data Acquisition System (SCADA) for energy management have beenmade operational at Rail Coach Factory Rae Bareli. Further the Company has constructedall sub-station buildings in DMRC with latest energy efficient and environmental friendlyguidelines which includes LED lights Rain Water harvesting. For the first time in IndianRailways Overhead Equipment (OHE) design for Railway Electrification Project is beingcarried out by using Drone camera for picking the coordinates through Differential GlobalPositioning System (DGPS). The OHE layout plans are then prepared with the help ofAutocad. Ircon has also planned for use of Drone Camera for Katni Singrauli Doublingproject.

During the year development of Circular OHE foundation in situ and Precast was done inMathura Kasganj Kalyanpur Section for Railway Electrification 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 Sub-station ofDMRC. The use of GIS reduces the requirement of space for sub-stations.

Uncommon technique of launching of girder by cantilever method was used at 2 BhairabBridge in Bangladesh by utilizing the benefit of river water. The barge of 250 tonnecapacity was used to mount the road crane as well as the members of the truss. The wholebarge was brought parallel to the working span and members were erected by the road cranewhen the barge was properly anchored. With this process of cantilever launching time cyclewas reduced from 45 days to 30 days for erection of truss bridge of 102.4 meter in length.This also economized the cost by saving the extra material to be welded on the bottomchord.

Further New Austria Tunnelling Method (NATM) is proposed to be adopted forconstruction of tunnels in Sivok Rangpo project. This method is very useful in complexdiversified geological condition where forecasting of the rock mass is difficult due torapidly changing geology.


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. During the year the Company has used drone technology fordevelopment of OHE layout plan of the value Rs. 55.10 lakhs for 339 RKMs.


With an objective to enable IT facility in all domain efforts were directed to enableIT in all domain. The Company has established SAP ECC 6.0 based Finance-Controlling moduleto incorporate additional functionalities like fixed asset accounting for calculation ofdepreciation as per Indian Income Tax Act Bank Reconciliation System FOREX reporting inFunctional currency local currency and reporting currency Implementation of IndASfunctionality (age analysis and discounting of Financial Asset and liability) reports forquarterly and annual financial statements as per schedule III of the Companies Act 2013.A new tool from SAP called Business Objects (SAP BO) has been introduced to automate thefinancial reporting of the organisation. This reporting tool takes the real-time data fromSAP ECC and prepares the publishable reports namely Balance Sheet Statement of Profit& Loss Statement of changes in equity Cash Flow etc. on demand basis. Thisautomation has led to drastic reduction in the time and effort required to prepare andfinalize the books at the end of the quarter / year. The Company has implementede-Recruitment system on SAAS model with functionalities like on-line submission ofapplication with payment gateway generation of admit card and communication through SMS /e-mail with the applicants conducting on-line written test instant publication ofresults etc. Video conferencing system is used for conducting review meetings with ProjectHeads training promotion interviews etc. SAP servers are hosted on cloud to ensure highavailability security and flexibility for capacity augmentation. During the year onlineAnnual Performance Appraisal System and Leave application CL/RH system has been developedand launched. The official website of the Company has been revamped to provided wellplanned information architecture mobile compatibility fast access browser consistencyand effective easy navigation. Enhancement of SAP ERP FI-CO module has been done forimproved transparency and financial control and maintaining books of accounts fixedassets MIS P&L for all projects. Visitor Management System has been upgraded toensure proper maintenance of visitor details and visitors convenience at corporate office.Besides this two mobile apps for CSR and Recruitment related information has beenlaunched and available on google play store. Three more mobile applications are underdevelopment. The Company has upgraded its Network Infrastructure at Corporate Office toensure state of art setup for digital transactions and projects connectivity. Keeping inview the need for Information and Cybersecurity the Company has nominated ChiefInformation Security Officer (CISO). To reduce paper usage and transparent working use ofIT has been enhanced in all the functional domains.


Vigilance Department plays an advisory role to the top management in matters pertainingto vigilance. It is headed by a full time Chief Vigilance Officer (CVO) appointed by theAppointments Committee of the Cabinet (ACC) in consultation with Central VigilanceCommission (CVC). The Vigilance Department ensures implementation of laid down guidelines/ procedures through preventive checks of tenders and contracts execution of works andother functions as well as carries out investigations into complaints. During the yearfive preventive inspections were carried out on high value tenders floated from CorporateOffice. Complaints raised against officials procedures etc. by various authorities (likeCVC Railway Board Vigilance) and received from other sources were investigated to theirlogical conclusion. A total of 21 complaints were received from 1 April 2017 till June2018. Out of these 21 complaints 1 complaint was forwarded by CVC for investigation &report and 11 complaints were disposed off (including CVC referred complaint). The natureof these complaints includes irregularities during tendering execution of contractanonymous and pseudo anonymous one and quality related issues. Based on the outcomethereon circulars on system improvements were issued in different spheres of workingrelated to tenders contracts finance etc. and also project management to avoidrecurrence of irregularities / procedural errors and to plug loopholes. In addition stepswere taken for closure of paras raised by the Chief Technical Examiner's Organisation(CTEO) and advice of CVC on disciplinary matters pertaining to delinquent employees.Scrutiny of immovable property returns of employees; creating awareness on rules/procedures/ common irregularities in execution through workshops/ trainings debatecompetitions etc. have been the prime activities of the Department.

As a step towards ‘leveraging technology' for better transparency submission ofonline Immovable Property Returns by the officers was started in 2012- 13 and the processis running successfully; online Vigilance Clearance started w.e.f. 1 April 2014 in theorganization through intranet portal; vigilance section / portal onwebsite with a facility for online receipt of complaints is in place sinceDecember 2012; e-procurement has already been started w.e.f. 1 July 2013 in theorganization in a comprehensive manner for achieving transparency for all value of thework. Vigilance department strives to achieve its objective of promoting an impartialfearless and transparent environment in functioning of the organisation by ensuringimplementation of laid down procedure / guidelines as framed and taking steps to preventunethical practices.

Your Company has implemented integrity pact as recommended by CVC a move aimed atmaintaining complete transparency integrity and accountability in all its majorprocurement and contracts.


Your Company had received following awards during the year 2017-18:

1. Dun & Bradstreet Infra Awards 2017 in the category of "Construction &Infrastructure Development (Railways)". The award was presented by Mr. Nitin GadkariHon'ble Minister of Road Transport & Highways Shipping and Water Resources RiverDevelopment and Ganga Rejuvenation and received by Mr. S.K. Chaudhary Chairman &Managing Director Ircon at a function held in Mumbai on 2 November 2017.

2. Governance Now 5 PSU Awards 2017 in the Financial category (Consistent Growth). Theaward was presented by Ms. Krishna Raj Hon'ble Union Minister of State of Agriculture& Farmers Welfare India and received by Mr. Yogesh Kumar Misra Chief General Manager(Business Development) Ircon at a function held in New Delhi on 27 February 2018.

3. Dainik Bhaskar India Pride Awards 2017-18 in the category of "Central PSU:Miniratna-Category-I". The award was presented by Mr. Shivraj Singh Chouhan Hon'bleChief Minister of Madhya Pradesh and Mr. Dharmendra Pradhan Hon'ble Minister forPetroleum & Natural Gas and Minister of Skill Development & Entrepreneurship andreceived by Mr. S.K. Chaudhary Chairman & Managing Director Ircon at a function heldin New Delhi on 28 March 2018.

4. CIDC Partners in progress Trophy 2018 from Construction Industry Development Council(CIDC) for achieving targets of "Mission Skilling India" under various CIDCinitiatives. The award was presented at a function held in New Delhi on 7 March 2018.

Your Company had received the following awards after the close of the year 2017-18:

1. Institute of Economic Studies Excellence Award to Ircon and Udyog Rattan Award toCMD Ircon. Both these awards were presented by Mr. B.P. Singh former Governor of Sikkimand Mr. Shekhar Dutt former Governor of Chhattisgarh and received by Mr. S.K. ChaudharyChairman & Managing Director Ircon at a function held in New Delhi on 14 April 2018.


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 2017-18 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:

As per provisions of section 197 of the Companies Act 2013 read with the Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the companyis required to disclose the details of the remuneration of the Directors etc. in theDirectors' Report. However as per Notification No. GSR 463(E) dated 5 June 2015 issued bythe Ministry of Corporate Affairs Government Companies are exempted from complying withprovisions of section 197 of the Companies Act 2013. Ircon being a government companysuch particulars are not included as part of Directors' Report.

C. Compliance with Secretarial Standards on Board

General Meeting and Dividend:

During the year the Company is generally in compliance with the Secretarial Standardson Meetings of the Board of Directors (SS-1) General Meetings (SS-2) and Dividend (SS-3)issued by the Institute of Company Secretaries of India except as otherwise stated in theSecretarial Audit Report.

D. Deposits:

Your Company did not accept any deposits from public during the year.

E. 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.

F. 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 Companyduring the financial year 2017-18.

G. Change in the nature of business:

There was no change in the nature of business of the Company during the financial year2017-18.

H. Qualification reservation or adverse remarks in the

Auditor's Reports Secretarial Auditor Report

The Management Response on qualification contained in the Auditors' Report 2017-18(Standalone and Consolidated) is placed as Appendix-I.

The Management Response on the qualification in the Secretarial Auditor Report 2017-18is placed below:

"The minutes of the 18 Nomination and Remuneration Committee (NRC) meeting dated21-12-2017 entered in the minutes book 27-02-2018 and noted at the 19 NRC meeting dated7-3-2018 and242 Board of Directors (BoD) meeting dated 7-3-2018. th

The minutes of the 19 Nomination and Remuneration Committee meeting dated 7-3-2018 andadjourned 19 NRC meeting dated 8-3-2017 have been entered in the minutes book on21-06-2018 and noted at the 21 NRC meeting held on 21-08-2018 and 244 BoD meeting held on3-8-2018."


The following reports / documents along with relevant annexures form an integral partof this report and have been placed as Appendices numbered herein.

1. "Report on CSR and Sustainability Activities" provides a briefoutline 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 anoverview of the affairs of the Company its legal status and autonomy businessenvironment vision and mission sectoral and segment-wise operational performancestrengths opportunities constraints strategy and risks and concerns as well as humanresource and internal control systems

[Appendix D].

3. The "Corporate Governance Report" highlights the philosophy ofCorporate Governance and Key Values of the Company composition of Board of Directors andits Committees their details including profile of directors who joined the Board during2017-18 attendance and remuneration of directors etc. other relevant disclosures CMD /DF Certification and general information for shareholders 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 2017-18 (placed at Annexure E1);

2. 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 E2); and

3. Certificate of compliance of Corporate Governance provisions signed by a practisingcompany secretary (placed at Annexure E3).

4. The Secretarial Audit Report from the secretarial auditor is at Appendix F.The Management Response on the qualification contained in the Secretarial audit Report2017-18 is placed at para 18H above.

5. The "Extract of Annual Return" in Form MGT-9 pursuant to section134(3)(a) of the Companies Act 2013 read with Rule 12(1) of the Companies (Management andAdministration) Rules 2014 placed at Appendix G.

6. The "Disclosure of Related Party Transactions" in Form AOC-2pursuant to Section 134(3) (h) of the Companies Act 2013 and Rule 8 (2) of the Companies(Accounts) Rules 2014 is at

Appendix H.

7. The Management Response on qualification contained in the Auditors' Report 2017-18(Standalone and Consolidated) is placed as Appendix I.


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 on31 March 2018 and of the profit of the Company for the financial year 2017-18; iii. thatproper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities; iv.that the financial statements have been prepared on a going concern basis; and v. thatproper systems had been devised to ensure compliances with the provisions of allapplicable 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 2017-18 are:-Statutory Auditors:

K.G. Somani & Co. For Company as a whole
Branch Auditors for projects in India:
Gupta Gupta & Associates All projects at Jammu & Srinagar Kashmir Region
KDS & Co. Mumbai All projects under Mumbai Region
K S Bothra & Co. Kolkata All projects under Eastern Region
Jindal & Co. New Delhi All projects under Northern Region
B. Gupta & Co. Patna All projects under Patna Region


Branch Auditors for projects Abroad:
Kerbal Athmane Algeria Algeria
Middel & Partners South Africa South Africa
Jaysinghe & Co. Chartered Accountants Sri Lanka Sri Lanka
Kumpulan Naga & Co. 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 2017-18 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 M/s. Vishal Agarwal & Associates PractisingCompany Secretary as Secretarial Auditor for conducting Secretarial Audit of your Companyfor the financial year 2017-18.

D. Internal Auditors:

The Board of Directors have appointed following Internal Auditors for 2017-18: InternalAuditors for Indian Projects

Baweja & Kaul 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

Internal Auditors for Foreign Projects

The Internal Audit for projects abroad viz. Bangladesh Algeria and South Africa wasundertaken in-house by the officials of the Company for the financial year 2017-18.


We record our appreciation and thanks to the Ministry of Railways Ministry of ExternalAffairs DIPAM and other Ministries; various banks Reserve Bank of India EXIM Bank;Export Credit and Guarantee Corporation; Embassies; Protector of Immigration; PassportAuthority; Doordarshan; and our esteemed clients both in India and abroad for theircontinued interest in and support to the Company.

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


(S.K. Chaudhary)
Date: 31 August 2018 Chairman & Managing Director
Place: New Delhi (DIN: 00515672)