Ircon International Ltd Directors Report.


The Directors of your Company have pleasure in presenting their 43rd Report on the affairs of the Company for the financial year 2018-19.


A. The financial performance of the Company for the year 2018-19 vis--vis 2017-18 are given 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
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 of equity shares, which is equal to nominal amount of equity shares so bought back and extinguished during 2017-18.

** Includes interim dividend and final proposed dividend (subject to approval of shareholders in ensuing AGM).

On a consolidated basis, your Company has recorded an income of Rs.4989.61 crore during the financial year ended 31st March 2019 and achieved consolidated Net Profit of Rs.450.07 crore 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 compared to Rs.450 crore earned during 2017-18. The foreign exchange outgo stood at Rs.607.6 crore during 2018-19 as compared to Rs.386 crore during 2017-18. Thus, the net foreign exchange earnings have decreased by 49.9% i.e. from Rs.64 crore in 2017-18 to Rs.32.01 crore in 2018-19 due to decrease in operating turnover from foreign projects.

C. Dividend:

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 to Rs.100.82 crore (approx.) on the paid-up share capital of Rs.94.05 crore, in February 2019. 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, a final 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 ?101.81 crore, out of profit for the year 2018-19, subject to approval of the shareholders. With this, 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 dividend, the 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 paying dividend without fail since 1980-81.

Consequent upon listing of shares at the stock exchanges and based on market capitalization, your Company is among the top 500 companies listed on NSE & BSE. In pursuance to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"), your Company has in place a Dividend Distribution Policy which has been approved by its Board of Directors. Dividend Distribution Policy is available on the Companys website at and also provided separately in the Annual Report.

D. Disinvestment through IPO

The Government of India announced the divestment in Companys shares in the financial year 2017-18. Accordingly, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, appointed IDBI Capital Markets & Securities Limited, Axis Capital Limited, SBI Capital Markets Limited as Book Running Lead Managers (BRLMs) and Crawford Bayley & Co. & Hogan Lovells International LLP as Legal Advisors for disinvestment of 99,05,157 equity shares i.e. 10.53% of the paid up equity share capital of the Company through Initial Public Offering (IPO) of shares by the Promoters (i.e Government of India) to the public. The Companys public issue was subscribed more than 10 times and shares got listed on 28th September, 2018 on BSE Limited and National Stock Exchange of India Limited. Listing of equity shares will enhance the company visibility and brand image and provide liquidity to the shareholders. Listing will also provide a public market for the equity shares in India.

Post IPO, the President of India along with the nominees hold 8,38,78,417 equity shares i.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 companies as on 31st March 2019.

E. Share Capital / Dematerialization:

As on 31st March 2019, the Authorized share capital of the Company was Rs.400 crore consisting of 40 crore equity shares of Rs.10/- each and the issued and paid-up share capital of the Company was Rs.94.05 crore consisting of 9,40,51,574 equity shares of Rs.10/- each. All the shares (except only 17 shares in physical form) are held in dematerialized form.

The details of dematerialization of shares, Demat Suspense Account / Unclaimed Suspense Account 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 the Company during the financial year and after the close of the financial year upto the date of the report.


In our industry, an order book is considered an indicator of future performance since it represents a portion of anticipated future revenue. Your Company caters to both domestic as well as international markets and receives orders both on competitive bidding as well as through nomination by the Ministry of Railways.

During the year 2018-19, the Company secured works worth Rs.7635 crore. The order book as on 31st March 2019 stood at Rs.33,901 crore (approx.) as compared to Rs.22,407 crore (approx.) as on 31st March 2018.


I. Foreign Projects:

Contribution of foreign projects to total revenue has decreased from approximately 14.58% in Fiscal Year 2018 to approximately 12.52% in Fiscal Year 2019. The drop in foreign project income is mainly due to completion of the foreign projects in South Africa. Nevertheless, this fall in revenue from projects in foreign countries has been partially offset by our performance in the domestic market, and we continue to actively participate in new projects in foreign countries, including one ongoing project in Bangladesh and one in Algeria. By continuing to diversify our business and geographical focus, your Company strives to secure a broader range of projects to maximize business volume and profit margins.

A. Completed Foreign Projects:

Your Company has completed one project in South Africa during the financial year 2018-19.

South Africa

The project for procurement of Plant Design, Supply and Installation of Overhead Track Equipments, Traction Substations, Auxiliary Power Supplies Substations, Bulk Power Supplies Switching Stations and Signalling Systems for Majuba Rail Project, South Africa, for 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 the project Construction of Khulna-Mongla Port Rail Line for Bangladesh Railway, at a value of Rs.911 crore (USD 147.80 million). The physical progress up to March 2019 is 49.50%. The work 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 free land and issuance of drawings for alignment (L-section and X-section), bridges and buildings by the Engineer/Bangladesh Railway. However, now the project is in full swing and track linking between Phultana and Aranghata (Phase-I) is expected to start in September 2019.


2. Installation of double track line (93 kms) in Algeria awarded by ANESRIF, Ministry of 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 of existing line, with diversion of 10 Kms from Ouedsly to Yellel in Algiers-Oran section of Algerian Railways. The value of contract including additional works for realization of double line has been revised to Rs.1747 crore (converted). The project was awarded in 2008 and is likely to be completed in June 2020. The reasons for delay are significant increase in scope of works, delay in payments due to non-allocation of funds to the project, excessive delay in approval of amendments, delay in approval of drawings and removal of obstructions 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 cash flow problems which are hampering progress particularly the structural works awarded to sub-contractors. Work on the existing line has also started in the first stretch of 13 kms, 6 out of 7 station buildings are ready to be handed over and the bridge construction work has also picked up with assurance of timely payments. With the improvement in international oil prices, the client has assured uninterrupted payments which will improve the 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, Track Rehabilitation and ancillary works awarded by Sri Lankan Railways under the Ministry of Transport 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 line broad gauge track from Maho-Omanthai of around 128 km length including associated infrastructure works. The project was awarded at the end of April 2019 and is to be completed within 36 months. The project is financed through EXIM Bank of India as per Indian lines of credit.

D. Likely Foreign projects:

Your Company endeavours to continue its strategy of diversifying across industry segments and increase orders from foreign countries to capture better profit margins accorded by these projects as compared to domestic projects. Concerted efforts are being made to secure contracts in Bangladesh, Thailand, Turkey, Ghana, Sri Lanka, Mozambique, Rwanda, UAE, Malaysia, Oman and Guinea.

II. Domestic Projects:

Since incorporation, your Company has diversified into various infrastructure sectors and is now an established player in the field of railways and highways construction. Your Company also caters to customers needs in many other areas such as construction of commercial and residential complexes, power transmission lines, industrial lighting, bridge/fly-overs, tunnels, commercial, residential and retail properties, electrical and mechanical work, signaling/telecom, coach factory, station building, multi-function complex, and airports. The variety of project portfolio de-risks our construction business and 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 of NH-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 the year 2018-19 for excellent rating for commencement of Toll Operation for 75% length in respect 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 the State of Madhya Pradesh to be executed on BOT (Toll) on DBFOT pattern under NHDP Phase-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 distribution system to bring down AT&C losses and improve quality of consumer supply of Meerut town of Uttar Pradesh, to be carried out under RAPDRP Part-B scheme on turnkey basis including supply 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 value Rs.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 Road in the State of Chhattisgarh for Chhattisgarh East-West Railway Limited (CEWRL) at value of Rs.260 crore;

3. Survey, Feasibility study, Detailed Design and Construction of various identified Rail Coal Connectivity Project(s), for Jharkhand Central Railway Limited (JCRL), at value of Rs.1139 crore as per approved DPR.

4. Survey, Feasibility study, Detailed Design and Construction of various identified Rail Coal Connectivity Project(s), for Mahanadi Coal Railway Limited (MCRL), at value of Rs.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 NHDP Phase-VI on Hybrid Annuity Mode (Phase IA-Package II), for Ircon Vadodara Kim Expressway Limited (IrconVKEL) at value of Rs.1378 crore.

7. Additional work under the Construction of Sivok-Rangpo New BG Rail Link Project, for North-East Frontier Railway at a value of Rs.1128 crore.

G. Commercial Development of 4.3 Hectare Railway land at Western Express Highway, Bandra East, Mumbai for 99 years Your Company has entered into a Memorandum of Understanding on 26th March 2018 with the Rail Land Development Authority (RLDA) for transfer of lease hold rights to IRCON for commercial development on the land parcel measuring 4.3 (four point three) Hectare at Bandra East, Mumbai, Maharashtra, against the payment of Upfront Lease Premium. In consideration of its roles and responsibilities, IRCON shall be entitled to receive from RLDA, 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 RLDA, GST, Stamp Duty and Registration Charges a tripartite loan agreement has been signed amongst IRCON, RLDA and Indian Railway Finance Corporation Limited (IRFC) on 28th March 2018. RLDA has agreed to pay to IRCON such amounts as may be required by IRCON to meet their debt servicing obligations as and when due under this Agreement. Further the Ministry of Railways also has agreed to provide corresponding amounts to RLDA. The servicing of loan to IRFC is the responsibility of RLDA / Ministry of Railways.

H. On-going major Projects in India:

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


A brief background on the subsidiaries (including the new wholly-owned subsidiary formed during the year -- Ircon Vadodara Kim Expressway Limited incorporated on 16th May 2018) and joint ventures companies of IRCON along with their financials and performance is given at Appendix – B.


The Board of Directors of your Company has, at its meeting held on 28th May 2019, approved the Financial Statements for 2018-19 (Standalone and Consolidated).

In accordance with the provisions of Section 129(3) of the Companies Act, 2013, your Company 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 seven joint venture companies viz. IRSDC, ISTPL, CERL, CEWRL, MCRL, JCRL, and BRPL. The accounts of un-incorporated joint ventures have been included in the standalone financial statements for the financial year 2018-19.

Your Company would make available its audited financial statements (standalone and consolidated) of accounts / financial statements of its subsidiaries (IrconISL, IrconPBTL, IrconSGTL, IrconDHHL and IrconVKEL) at its website ( Further, a statement containing the salient features of the financial statements of five subsidiaries and seven joint 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 already registered with the respective Depository Participants (DPs) and downloaded from the depositories i.e. NSDL / CDSL and who have not opted for receiving Annual Report in physical form. Accordingly, unless otherwise desired by the shareholders, the Company sends all documents to the shareholders viz. Notice, intimation for dividend, Annual Report 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 in the Company through Initial Public Offering. Accordingly, Government of India has disinvested 10.53% (95,05,157 equity shares) of its shareholding by way of Initial Public Offering and your Company was listed with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) on 28th September 2018.

B. CPSE Conclave:

Honble Prime Minister during his address at the CPSE Conclave held on 9th April 2018 at Vigyan Bhawan, New Delhi had given a number of action points for CPSEs including the suggestion to hold Annual General / Board meetings of CPSEs at new tourist destinations instead of the well-known and established destinations, as such a step will help to boost tourism 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 such meetings. In compliance to these directions, one meeting of the Company was held at Bhopal, Madhya Pradesh (Sanchi, UNESCO World heritage site). The other compliances are being updated on monthly basis at DRISHTI Dashboard.

C. Official language:

The Company is undertaking various novel and encouraging initiatives for extensive use of 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 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 Committee and quarterly workshops for effective use of the UNICODE system and official language are being conducted. Employees are being encouraged through various incentive schemes for the implementation of the Annual Programme of the Official Language Department. Bilingual facility has been introduced for computer systems and mobile phones used by officials of the Company. Bilingual formats have been made available at IRCONs internal website for use by the employees.

In recognition of the efforts of the Company for effective implementation of Official Language during the year 2017-18, the Company was bestowed with the Award and Certificate for outstanding Implementation of Official Language Policy in 2018-19. The details of the award are mention herein below.

D. Right to Information Act, 2005:

As per the requirements of the RTI Act, necessary updated information including the names of Appellate Authority, Central Public Information Officer, Assistant Public Information Officer and State Level Public Information Officers are posted on IRCONs website. Queries received have been replied within the stipulated time. The queries mostly related to service matters/recruitments, finance, contract, and projects. The details of RTI cases have been published in the Central Information Commission (CIC) website on quarterly as well as annual basis and a copy of the same is forwarded to the Ministry of Railways for information.

During the year 2018-19, 202 applications and 30 first appeals were received and at the beginning of the year 10 applications were under process for disposal within the allowable time 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 applications and 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 2012 which 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) under section 11 of Micro, Small and Medium Enterprises Development Act, 2006. The e-procurement portal of IRCON provides for facilitation of registration of MSEs firms registered with any statutory bodies specified by Ministry of MSME, and participation in e-tender by availing 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.71.41 crore from MSEs vendor against the expenditure valuing Rs.342.19 crore towards materials and stores. Value of items beyond scope / capacity of MSE Vendors amounts to Rs.180.15 crore. Therefore, your Company has achieved 44% of total procurement from MSEs after excluding the value of items beyond the scope / capacity of MSEs in compliance to Procurement Policy during the Financial Year 2018-19.

During the year 2018-19, your Company has conducted a special national development Programme at the Corporate Office for MSEs including SC/ST entrepreneurs on 27th February 2019.

In exercise of powers conferred by section 9 of the Micro, Small and Medium Enterprise Development Act, 2006 (27 of 2006), the Central Government issued instructions that all companies registered under the Companies Act, 2013 with a turnover of more than Rs.500 crore and all CPSEs shall be required to get themselves on boarded on the Trade Receivables Discounting System (TReDS) platform, set up as per the notification of the Reserve Bank of India. The Registrar of Companies (RoC) in each State shall be the competent authority to monitor the compliance of such instructions by CPSEs and also the Department of Public Enterprises. Government of India shall be the competent authority to monitor the compliance of such instructions by the CPSEs. In compliance to the above instruction, your Company has boarded on the TReDS platform w.e.f. 25th January 2018 to facilitate financing of trade receivables of MSEs by discounting of their receivables and realization of their payment before due date.


IRCON being a Government Company, the appointment of directors on its Board is done by the President of India through the Administrative Ministry, Ministry of Railways. As on 31st March 2019, Company has eleven Directors comprising of four Functional Directors, two Government Nominees Directors and five Independent Directors. With effect from 28th December 2018, the Company is not having prescribed number of the Independent Directors on the Board of the Company. After the close of the year, the tenure of two independent directors (including women director) got completed. Accordingly, the Company has requested Ministry 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 and Company Secretary as the Key Managerial Personnel (KMP) of the Company; and Chairman & Managing Director (CMD) and Director (Finance) have been designated as CEO and CFO, respectively.

During the year, all the independent directors of the Company have declared that they meet 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)
[DIN: 00011749]
5. Prof.(Ms.) Vasudha V. Kamat upto 31.03.2019 due to completion of tenure of appointment
Part-time (Non-Official)
[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)
[DIN: 00011749]
3 Prof. (Ms) Vasudha V. Kamat w.e.f. 15.07.2019
Part-time (Non-Official) (Re-appointed)
[DIN: 07500096]

Shri Piyush Agarwal, Shri Yogesh Kumar Misra, Shri Hari Mohan Gupta, Shri Avineesh Matta and Prof. (Ms.) Vasudha V. Kamat were appointed as Additional Directors of the Company 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, are contained in the Notice convening the ensuing AGM of the Company.


The Companies Act, 2013 provides that the provisions in respect of retirement of Directors by rotation will not be applicable to Independent Directors. In view of this, no Independent Director is considered to be retiring by rotation, however, all other directors are considered to be retiring by rotation. Accordingly, as per provisions of section 152 of Companies Act, 2013, one third among all other directors namely Mr. Deepak Sabhlok, Director (Projects) is liable to retire by rotation and being eligible, offer himself for re-appointment. The details of Director seeking re-appointment at the ensuing AGM are contained in the Notice convening the ensuing AGM of the Company.


During April 2018 to March 2019, eight meetings of the Board of Directors, six meetings of the Audit Committee, five meetings each of Nomination and Remuneration Committee and CSR & Sustainability Committee, two meetings of Project Review Committee, one meeting of Risk Management Committee and one separate meeting of the Independent Directors were held. The details of meetings, composition, etc. of the Board of Directors and Board level committees are given in the Corporate Governance Report. Further, there has been no instance where the Board of Directors has not accepted the recommendation of Audit Committee.

The meetings of the Board are normally held at the Companys Registered Office in New Delhi. However, one meeting of the Board of Directors was held at Bhopal, Madhya Pradesh, as per the Office Memorandum of DPE on this matter and in order to promote development of tourism sector in the country.


Your Company has adequate internal control mechanism and an Internal Audit System commensurate with its size and nature of business. The Company has in place adequate internal financial controls with reference to financial reporting and audit systems for maintaining efficiency of operations and compliances of applicable laws and regulations. The organization has well-structured policies and guidelines which are well-documented with predefined authorities. Regular and exhaustive internal audits are being conducted by experienced firms of Chartered / Cost & Management Accountants, appointed by the Board on recommendation of Audit Committee and in-house internal audit team headed by a qualified and experienced professional.

Details of the internal control system are provided in the Management Discussion and Analysis Report.


Your Company has an elaborate Enterprise Risk Management (ERM) framework, including risk management policy in place for risk identification and its mitigation.

As per SEBI (LODR) Regulations 2015, requirement of Risk Management Committee is applicable with effect from 01.04.2019. Your Company, however, is already having a Board level Risk Management Committee comprising Director (Projects), Director (Finance) and Director (Works). During the year, one meeting of the Risk Management Committee was held on 28th February, 2019.

Details of the Risk Management System are provided in the Management Discussion and Analysis Report and the Risk Management Committee are provided in Corporate Governance Report.


Being a Government Company, the Company has separate Vigilance Department which deals with fraud or suspected fraud involving employees/representatives of suppliers, contractors, consultants, service provider or any other party doing business with the Company. Whistle Blower and Fraud Prevention and Detection Policies have been approved by the Board of Directors and are available on the website of the Company.


Being a progressive organization, IRCON firmly believes in the strength of its most vital asset i.e. Human Resource (HR). Human Resource Management (HRM) of IRCON is primarily concerned with the management of people within the organization, focusing on policies and systems. HRM in IRCON is designed to maximize employee performance to achieve strategic objectives. The Company has adopted and aligned its HR strategy vis-a-vis systems & procedures taking into account the business objectives and competence building needed for the organization. HR strategy acts as a motivating factor for the employees who contribute to the core competence of the organization to create a match between the Companys future needs and the aspirations of individual employees.

IRCONs HR Philosophy is rooted in encouraging employee empowerment, growth and development of individuals by realizing their potential, encouraging innovative ideas and fair distribution of rewards. Its work culture is open and dynamic enabling employees to take initiative in jobs with active support of the top management. It is an employer of choice and attracts the best available talent with skill sets required for the growth and development of the organization.

Right placement and refinement of employees is the primary function after induction by which the Company maintains alignment of individual performance and goals with that of IRCONs Goals. Adequate care is taken to provide working environment to the employees conducive to their good health.

The Company has a performance oriented culture wherein contribution of every employee to the organization is measured and suitably rewarded. IRCON has a sound and result oriented Performance Management System (PMS). The system promotes the Companys philosophy of rewarding and recognizing meritocracy at all levels and support development of executives 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, which included 1192 regular employees, 38 deputationists, 342 employees on contract (including service contract) and 4 on fixed tenure basis. Out of the total 1576 employees of the Company, 1498 have been posted on Indian projects and 78 on projects abroad. Among 1576 employees, 1155 are technically and professionally qualified. The total number of women employees was 66.

During the year, the strength of total new employed personnel stood at 171, which included 102 regular employees, 5 deputationists, and 64 employees on contract (including service contract).

B. Reservation in Employment

The Company continues to give utmost importance to implementation of the policies and directives of the Government of India in matters relating to implementation of the policies and directives of the Government of India in matters relating to reservations in employment of candidates belonging to Scheduled Caste (SC) / Scheduled Tribe (ST) / other backward classes (OBC) and differently abled categories. There were a total of 596 SC/ST/OBC and differently abled employees as on 31st March 2019. Further, during the year 2018-19, 102 employees were inducted against regular posts, out of which 33 belong to SC/ST/OBC and differently abled categories. Similarly, 64 employees were recruited against the contractual positions, out of which 22 belong to SC/ST/OBC and differently abled categories.

In the year 2018-19, training has been given to 988 employees, out of which 355 belong to these categories. To ensure the welfare of these employee categories, the Company has appointed Liaison officers of SC/ST/OBC and differently abled employees.

The infrastructure of the Company is well built catering to the needs of differently abled 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 2018-19, in-house training programmes across all levels of employees were organized. Professional programmes, workshops and seminars organized by reputed and prestigious institutes/agencies were carefully identified in line with business needs of IRCON and suitable officers were nominated for such programmes.

Your Company has been continuously taking steps for building capacity of its human resource through training in functional and general management areas, contract & arbitration, leadership, information technology, as well as soft skills. External faculty is arranged wherever required and officials are nominated for workshops, seminars, etc. with reputed institutes. Employee Development has always been a priority for the Company and various trainings and development plans have been initiated from time to time. During the year 2018-19 a total 4046 man-days training was imparted to officials of IRCON through workshops, seminars, conferences, in-house trainings and training in external institutes, etc.

D. Employee Welfare

IRCON has adequate and robust schemes in place for welfare of the employees. Subsidized canteen facility, health cover, medical scheme, Post-Retirement Medical Scheme, Post-Retirement Pension Scheme, periodic health checkups at regular intervals, allowances, provision of company and self-lease for residential accommodation educational scholarships to the wards of employees, one-time educational grant for admission to professional degrees and diploma courses, educational awards to meritorious children of employees, educational assistance to the wards of deceased employees, assistance for marriage of daughters and dependent sisters of employees in non-executive categories, facility of free homeopathy and allopathy consultancy at Corporate office, and resort facilities for employees and their family members on concessional rates through Dalmia and Sterling Resorts etc. are in place for betterment of the staff.

The Company organized one friendly Cricket Match in January 2019 amongst the officers and 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 at Workplace and the same is available at the website of Company. Further, the Company has a five member complaints committee for prevention of sexual harassment at work place comprising of four officials of the Company and one external member from NGO. Further, provision pertaining to prohibition of sexual harassment has also been incorporated in Ircon Conduct, Disciplinary, and Appeal Rules. No complaints relating to sexual harassment has been received by the Company during the year or pending from the previous year. On International Womens day, the Company organized a workshop exclusively for women employees by Oncologist and Dietician and on Gender Sensitization and prevention of sexual harassment at workplace, at the Corporate office of the Company.


Quality Management System (QMS) has been successfully sustained and continually improved since 1996 when the Company as a whole was first certified for ISO-9002-1994 by TUV SUD Private Limited. Your Company has continued the certification and sustained the system as per latest revised code ISO 9001:2015 (by periodical re-certification audit after expiry of every three years). Latest re-certification audit has been conducted in March 2017, whereby the Company has been re-certified by TUV-SUD for a period of another three years i.e. up to June 2020. The second Surveillance Audit for QMS by TV–SD South Asia Private Limited has been successfully completed during the month of February 2019.

During the year, the Company continued the initiative of sharing technical knowledge started in last year. Accordingly, to enhance the technical knowledge of the Companys Engineers/ Managers regarding the latest versions of IS/ IRC/ IRS and other International Specs, Codes, papers were shared on the topics like High Strength Concrete - Concrete with Mineral Additives, Cement – An Insight View, NEAR-MISS IRCONs Mission Safety, Pumpable Concrete, and Risk Management in Construction Projects. Further, various details on "Environment Impact Assessment due to Construction Activities", and "Hazard Identification and Risk Assessment (HIRA)" for Construction Projects have been made available on the internal website of the Company for knowledge sharing and helping the projects to prepare the required documents at project levels. In addition to this, for ensuring standardization of documents across the Company, ‘Material Testing Formats for testing of different construction materials have been provided on the internal website of the Company.

As part of the Memorandum of Understanding entered with the Ministry of Railways for the year 2018-19, ten departments at Corporate Office and two projects of the Company were assessed in line with the Project Management Maturity Model (ProMMM) and was placed before the Board of Directors at its meeting held on 16th January 2019.

Your Company established an Environment Management System (EMS), and was certified for ISO 14001:2004 in October 2011. The latest re-certification audit for ISO 14001-2015 was conducted in March 2017 whereby the Company has been re-certified for another three years i.e. up to May 2020. During the year, the second Surveillance Audit for EMS by TV–SD South Asia Private Limited was successfully completed in February 2019.

The Company nominates Environment officers at major Indian projects to monitor EMS at their respective projects who complies with the environmental laws. This is an ongoing process until completion of the project. Environmental checklists have been developed and maintained by all projects.

Environmental friendly equipment such as solar panels have been installed and are being installed at various offices / projects. Waste water is recycled at Corporate Office through Sewage Treatment Plant (STP), and the same is used for horticulture work. STPs are also being constructed at Noida, Gurgaon, and MFC buildings. LED lights, sensor lights and sensor taps are being used in Corporate Office to conserve electricity and water. Various environment friendly steps like use of fly ash brick instead of clay brick, rain water harvesting arrangements, sensor controlled Chromium Plate (CP) fittings, use of latest version of facade glass (glass in building) to make the building sustainable etc. are being taken up across various offices / projects of the Company. Monitoring of water usage and waste water, ambient air quality and noise quality is also being carried out at various construction sites. The Company is emphasizing on providing clean environment by initiating indoor air quality monitoring in the Corporate Office building. Tree plantation is also undertaken by corporate office and project offices.

Your Company has also been certified for Occupational Health & Safety Management System (OHSAS – BS 18001:2007) in December 2012 by TUV SUD South Asia. Your Company has updated the Occupation Health and Safety System and got ISO:45001-2018 Certificate w.e.f. 28th December 2018, and this certificate is valid till December 2021.

Corporate Quality Council and Project Quality Council meetings were conducted quarterly at Corporate Office and projects respectively to review the implementation of QMS, EMS, and OH&S. The Quality objectives were measured and reviewed both at the Corporate and at the Project levels. Internal Quality Audit as well as Quality Assurance Audit were conducted in projects and corporate office. Reports of these audits not only contained details of nonconformities encountered during the audit but also the salient features, progress, positive points, if any, etc.


A) Conservation of Energy

(i) The steps taken or impact on conservation of energy

Your Company has completed work of Design, Supply, Installation, Testing and Commissioning of grid connected solar power plant of 3MW capacity with all the electrical and associated equipment including civil works at Rail Coach Factory, Rae Bareli (U.P.) at a value of Rs.22.49 crore. The plant is fully operational, and meets about 36% of electrical energy requirement for the factory.

Your Company has procured the material for Design, Supply, Installation, Testing and Commissioning of grid interactive roof top solar photovoltaic power generation plant of 75KWp capacity with all the electrical and associated equipment including structure works at IRCON International Tower, Plot No. 16, Sector-32, Gurugram (Haryana) at a value of Rs.56.63 lakh. As per the circular issued by the Renewable Energy Department, Haryana Government, minimum 2KWp or 5% of sanctioned load of 30 KW and above, vide order dated 19.12.2017 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 to improve power factor which would further reduce the Electrical Energy consumption to approx. 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 650KVA x 1 set.

Additional 10 KW Roof Top Grid Connected Solar Power Plant at Corporate Office has been made operational as a step to conserve energy. This Solar Power Plant is in addition to existing capacity of 80 KW, and has been implemented after energy audit contributing to environment through usage of Green Energy. Total energy produced by Solar Power plant is 44,853 units of kWh which is 3.1% of the energy being drawn from BSES i.e. 14,27,380 units or kWh. Hence, total energy conservation per annum is 3.1%.

Capacitor banks have been installed at Corporate Office building to improve power factor which further reduces the Electrical Energy consumption. Total energy saved by capacitor banks is 2,20,903 units or kWh per annum.

The internal lighting of Corporate Office building has been replaced by energy efficient LED lamps. Total energy saving is approx. 3,00,000 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 650KVA x 1 set.

(iv) IRCON International Tower, Sector-32, Gurugram – 1010KVA x 2 sets & 320 KVA x 1 set.

b. UPS:

(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 been made operational at Rail Coach Factory, Rae Bareli. Further, the Company has constructed all substation buildings in DMRC with latest energy efficient and environmental friendly guidelines which includes LED lights, Rain Water harvesting.

For the first time in Indian Railways, Overhead Equipment (OHE) design for Railway Electrification Project is being carried out by using Drone camera for picking the coordinates through Differential Global Positioning System (DGPS). The OHE layout plans are 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 done in Mathura – Kasganj – Kalyanpur Section for Railway Electrification Project. In addition, simultaneous stringing of catenary and contact wire is being done for the first time in Indian Railways. IRCON has also planned for use of Drone Camera for Katni Singrauli Doubling project.

Your Company has supplied and commissioned 66 KV High Voltage Cable first time developed indigenously for Delhi Metro Rail Corporation (DMRC) Project. IRCON has also imported 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 development or import substitution.

Not Applicable

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

(a) details of technology imported


(b) year of import

Not Applicable

(c) Whether the technology been fully absorbed

Not Applicable

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

Not Applicable

(iv) The expenditure incurred on Research and Development.



Your Company does not undertake any pure research project but takes the help of consultants and firms to innovate and to develop methods and techniques to execute projects in a cost effective manner, with requisite quality, to enhance the technological competence and efficiency.


The Information Technology in the company is not only a service provider but is also being 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 improve information availability, transparency and decision making. SAP Business Objects (SAP BO) has also been implemented to automate the financial reporting of the organisation. This reporting tool takes the real-time data from SAP ECC and helps in preparation of Balance Sheet, Statement of Profit & Loss, Statement of changes in equity, Cash Flow etc. on demand basis. This automation has led to drastic reduction in time and effort required to prepare and finalize the books of accounts at the end of the quarter / year. SAP servers are hosted on cloud to ensure high availability security and flexibility for capacity augmentation.

As a step towards paperless office various initiatives were taken during the year for employees like enabling viewing of payslip, PF Slip and attendance online. Three mobile applications (apps) namely IRCON Careers, IRCON CSR and IRCON tenders were launched during the year to provide online and timely information about IRCON activities to general public. All three mobile apps are available on android play store as well as on apple app store.

The Video conferencing facility is being widely used for conducting review meetings with Project Heads, training, promotion interviews etc.

The Company has implemented Wi-Fi with proper security features at Corporate Office to enable mobiles and Bring your Own Devices (BYOD) of employees to be connected to Company network.

The official website of the Company has been revamped to provided well planned information architecture, mobile compatibility, fast access, browser consistency and effective, easy navigation. Visitor Management System has been upgraded to ensure proper maintenance of visitor details and visitors convenience at corporate office.

In order to improve upon efficiency and bringing transparency in procurement process in the organization, the e-procurement platform is being shifted to NICs GePNIC.

The Company has upgraded its Network Infrastructure at Corporate Office to ensure state of art setup for digital transactions and projects connectivity. Keeping in view the need for Information and Cybersecurity, effective measures are being taken to deploy latest threat management tools to prevent any cyber-attack or data theft.


The Vigilance Department plays an advisory role to the top management in matters pertaining 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 Central Vigilance Commission.

The Department ensures implementation of laid down guidelines/procedures through preventive checks of tenders and contracts, execution of works, and other functions as well as carry out investigations into complaints. This year the department has carried out 02 surprise inspections and 03 periodic inspections on high value projects. Apart from surprise and periodic inspections department has carried out 04 nos of preventive inspections on high value tenders floated from corporate office. Chief Technical Examiners Organisation (Technical wing of Central Vigilance Commission) has also carried out extensive investigation of 02 projects. Complaints raised against officials, procedures etc. by various Authorities (CVC/Railway Board Vigilance, CBI, Prime Ministers Office etc.) and received from other sources were investigated to their logical conclusion. 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 complaints includes irregularities during tendering, execution of contract, anonymous & pseudonymous one and quality related issues. In addition, steps were taken for closure of Paras raised by the Chief Technical Examiners Organisation (CTEO). Scrutiny of immovable property returns of employees, creating awareness on rules/procedures/ common irregularities in execution through workshops/ trainings, debate, competitions, etc. have been the prime activities of the Department.

As a step towards ‘Leveraging of Technology for better transparency, submission of Online Immovable Property Returns by the officer was started during 2012-13 and the process is running successfully. Online Vigilance Clearance started w.e.f 1st April, 2014 in the organization through our intranet portal. Vigilance section/portal on website with a facility for online receipt of complaints is in place since December 2012. E-procurement has already been started w.e.f 1st July 2013 in the organization in a comprehensive manner for achieving transparency for all value of the work.

As a new initiative, IRCON has developed an App namely "IRCON Career". This app has been provided in public domain to ensure that public at large gets alerts and updates over the mobile phone regarding recruitment activities at IRCON. Apart from this App, it has also developed another app namely "Tender Info". All tenders which are hosted on IRCONs tender wizard portal can also be seen on this mobile app.

IRCON has implemented Integrity Pact which is a tool developed by Transparency International, which ensures that all activities and transactions between a Company or Government Departments and their Suppliers are handled in a fair, transparent and corruption free manner. Memorandum of Understanding ("MOU") was entered into on 22nd April, 2014 between Ircon International Limited and Transparency International India to implement Integrity Pact in IRCON.

Accordingly, IRCON has adopted Integrity Pact (IP) as recommended by Central Vigilance Commission (CVC) on 24th June, 2014 for tenders/contract for works and supply with an estimated value of Rs.5 Crore and above on all Indian Projects. The Integrity pact was made a compulsory document in the conditions of model e-Procurement Documents for all works.

As per the provision of Integrity Pact and relevant guidelines of Central Vigilance Commission an Independent External Monitor (IEM) was also appointed to receive any complaints from the bidder and submit the investigation report.

Vigilance strives to achieve its objective of promoting an impartial, fearless, and transparent environment in functioning of the organization by taking steps to prevent unethical practices.


A. Your Company has been rated as ‘Excellent on performance of Memorandum of Understanding (MOU) signed with the Ministry of Railways for the year 2017-18. The MOU performance 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 Partners in progress Trophy 2019 for achieving targets of "Mission Skilling India" under various CIDC initiatives; 11th CIDC Vishwakarma in the category of Best Construction Project for successfully completing Shivpuri-Guna project, well before the scheduled time; 11th CIDC Vishwakarma for Best Professionally Managed company having turnover of more than Rs.1000 crore; and 11th CIDC Vishwakarma for CSR practices in Raigarh (Chhattisgarh). All these awards were presented by Mr. Prabhakar Singh, DG - CPWD and Mr. K.M. Singh, Former CMD - 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. Singh, Director, Finance, Mr. D. K. Sharma, Chief General Manager, Ircon Shivpuri Guna Tollway Limited, 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 Modern Coach Factory, Rae Bareli project.

4. Governance Now 6th PSU Awards 2018 in the Value Growth category for Mini Ratna-I companies.

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, Kolkata jointly presented Award of Excellence for best practices in the corporate sector.

8. Town Official Language Implementation Committee (TOLIC) (Undertaking-1), Delhi facilitated Ircon International Limited with Incentive Award and Certificate for outstanding Implementation of Official Language Policy on 28.2.2019.

C. After close of the year 2018-19, your Company had received the award from the Federation of Indian Chambers of Commerce and Industry (FICCI). The Company is bestowed with Certificate of Appreciation for Good Practices in Quality Systems at the 7th FICCI Quality 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 function held in New Delhi on 24th April 2019.

D. Further, the following awards were presented to the Chairman & Managing Director, IRCON:

1. Institute of Economic Studies Excellence Award to IRCON and Udyog Rattan Award to CMD, IRCON.

2. Amity Excellence Award to CMD, IRCON for best practices in the construction and infrastructure sector.


A. Particulars of Loans, Guarantees or Investments:

The details of investments made, loans granted, and guarantees extended by your Company in terms of section 186 of the Companies Act, 2013 during the year 2018-19 forms part of the 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 directors, senior management officials and all other employees is in accordance with the guidelines issued 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 the remuneration for the key managerial personnel and other employees is placed on the website of the company at the web address (HRM and Career Sections).

Further, as per provisions of section 197 of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose certain details of the remuneration of the Directors in the Directors Report. However as per Notification No. GSR 463(E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of section 197 of the Companies Act, 2013. Accordingly, IRCON being a Government Company such particulars are not included as part of the Directors Report. However, remuneration paid to directors during FY 2018-19 are disclosed in 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 India and all the directors of the Company have been appointed in accordance with the said procedure. The functional directors including Chairman and Managing Director (CMD) are selected on the recommendations of Public Enterprises Selection Board (PESB) in accordance with the procedure and guidelines laid down by Government of India and there is system and procedure laid down by Department of Public Enterprises (DPE) for evaluation of its functional directors including CMD. The evaluation framework for assessing the performance of 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 directors and subsequent assessment by CMD, and thereafter final evaluation by the Ministry of Railways (the administrative ministry).

• In respect of CMD the evaluation includes self-evaluation and final evaluation by the Ministry of Railways.

In respect of Government nominee directors, their evaluation is done by the Ministry of Railways as per the procedure laid down. Since, independent directors are also appointed by 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 Senior Management and their remuneration are approved by the Nomination & Remuneration Committee.

D. Compliance with Secretarial Standards:

During the year, the Company is generally in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, except as otherwise stated 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-9, pursuant to section 134(3)(a) of the Companies Act, 2013 read with section 92(3) of the Company is available is placed as Appendix-G.

F. Deposits

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

G. Significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future:

No order has passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future during the financial year 2018-19.

H. Material changes and commitments affecting the financial position between end of the financial year and the date of report

No material changes and commitments affecting the financial position of the Company have 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 year 2018-19.

J. Qualification, reservation or adverse remarks in the Secretarial Auditor Report and Auditors Reports

The Management Response on the qualification in the Secretarial Auditor Report and compliance of conditions of Corporate Governance for the year 2018-19 is placed as Appendix-I 1.

The Management Response on qualification contained in the Auditors Report 2018-19 (Standalone and Consolidated) is placed as Appendix-K.


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

1. "Corporate Social Responsibility and Sustainability Report" provides a brief outline of the companys CSR and Sustainability policy, the composition of CSR & Sustainability Committee, average net profit of the Company for the last three financial years, prescribed CSR expenditure, and details of CSR spent on the activities / projects undertaken during the financial year etc. [Appendix – C].

2. The "Management Discussion and Analysis Report" provides an overview of the affairs of the Company, its legal status and autonomy, outlook, business environment, sectoral outlook, financial and operational performance, strengths, opportunities, constraints, strategy and risks and concerns, internal control systems and their adequacy as well as material developments in human resource [Appendix – D].

3. The "Corporate Governance Report" highlights the Companys philosophy on Corporate Governance and Key Values, Board of Directors including their details, details of Committee of the Board, details of general body meetings, means of communication, general shareholders information other relevant disclosures, etc. [Appendix – E]. It is supplemented by following compliance certificates:

1. Certificate signed by the Chairman & Managing Director affirming receipt of compliance with the Code of Conduct and Key Values from all Board members and Senior Management 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 respect to the truth and fairness of the Financial Statements, due compliances, and financial reporting (placed at Annexure – E3); and

4. Certificate of compliance of Corporate Governance provisions signed by practising company secretary, with respect to the conditions enumerated in SEBI (LODR) regulations and DPE Guidelines on Corporate Governance (placed at Annexure – E4).

4. The "Business Responsibility Report" in compliance with the provisions of regulation 34 of SEBI (LODR) Regulations 2015, in the format prescribed under SEBI Circular no. CIR/CFD/CMD/10/2015 dated 4th November 2015 is placed as Appendix-F. The report is mandated for the top 500 listed companies based on market capitalization and describes the initiatives taken by IRCON from an environmental, social and governance perspective.

5. The "Extracts of Annual Return" in Form MGT-9, pursuant to section 134(3)(a) of the Companies Act, 2013 read with section 92(3) of the Company is placed as Annexure-G.

6. The "Disclosure of Related Party Transactions" in Form AOC-2, pursuant to Section 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-3 as 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 Report and compliance of conditions of Corporate Governance for the year 2018-19 is placed as Appendix-I 1.

8. The "Dividend Distribution Policy" of the Company, pursuant to requirement under 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 the financial year 2018-19 (Standalone and Consolidated) is placed as Appendix – K.

10. The ‘NIL comments of Comptroller & Auditor general (C&AG) of India dated 11.07.2019 on the Audited Financial Statements of your Company for the financial year 2018-19 have been placed as part of the Annual Report.


The Board of Directors of the Company confirms:

i. that in the preparation of the financial statements, the applicable accounting standards had been followed except as otherwise stated in the annual financial statements and there has been no material departure;

ii. that such accounting policies were selected and applied consistently and such judgments and estimates were made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company for the financial year ended on 31st March 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 adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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 of all 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 India for the financial year 2018-19 are:-

Statutory Auditors:

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 Accountants, as Cost Auditor of your Company for the financial year 2018-19 for conducting the audit of cost 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, Practising Company Secretary as Secretarial Auditor for conducting Secretarial Audit of your Company for 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 undertaken in-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 assistance and co-operation received from to the Ministries of Railways, Road Transport and Highways, External Affairs, Finance, Commerce, Urban Development, and other ministries, departments and agencies, office of Comptroller & Auditor General, Reserve Bank of India, Statutory, Branch, Secretarial & Internal Auditors, Bankers of the Company, Indian Embassies & Missions abroad and Foreign Missions & Embassies in India, EXIM Bank, Export Credit and Guarantee Corporation; Protector of Immigration; Passport Authority; and our esteemed clients both in India and abroad without whose active support the achievements 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 and Public Asset Management (DIPAM), Securities and Exchange Board of India (SEBI), Stock Exchange i.e National Stock Exchange of India Limited and BSE Limited and Registrar of Companies (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 all levels for their untiring efforts, dedication, and sincerity of purpose in improving the performance and profitability of the Company.

For and on behalf of the Board of Directors
(S.K. Chaudhary)
Date: 22nd July 2019 Chairman & Managing Director
Place: New Delhi (DIN: 00515672)