ircon intl Directors report

To the Members,

The Board of Directors of your Company take pleasure in presenting the 46^th Annual Report on the business and operations of the Company, along with summary of financial results and key highlights on the financial performance of your company for the year ended March 31, 2022.

						(in Crore)
PARTICULARS		STANDALONE		CONSOLIDATED
	FY2021-22	FY2020-21	%age CHANGE	FY2021-22	FY2020-21	%age CHANGE
Financial Results
Total Income / Turnover	7181	5200	38.09	7586	5506	37.78
Total Operating Income / Turnover	6910	4956	39.43	7380	5350	37.94
EBIDTA	648	614	5.54	853	693	23.09
Profit Before Tax	610	574	6.27	689	578	19.20
Profit After	544	405	34.32	592	391	51.41
Net Worth	4621	4406	4.88	4667	4403	6.00
Appropriations
Dividend (Final & Interim)*	235.13	221.02	6.38
Earnings per share (in ) #	5.79	4.30	34.65	6.30	4.16	51.44

 

Notes:

* Includes proposed final dividend (subject to the approval of shareholders at the ensuing AGM). # After issue of Bonus Shares in the ratio of 1:1, in May 2021.

FINANCIAL HIGHLIGHTS

Despite aggressive competition, volatile market conditions and impact of COVID-19 on the business scenario, your Companyhasachieveditshighestevertotalincomeof7181 Crore during FY2021-22 as compared to 5200 Crore in

FY2020-21, showing a quantum jump of approximately 38%.

The operating turnover of the Company for FY2021-22 has also shown a substantial increase of 39.43% and stood at 6910 Crore, as compared to 4956 Crore in FY

2020-21. With higher order book and faster execution of the projects there has been a significant turnover of the Company.

Profit Before Tax (PBT) for FY2021-22 stood at 610 Crore thereby showing an increase of 6.27% as compared to 574 Crore in FY2020-21. Profit After Tax (PAT) has registered a growth of 34.32% to 544 Crore in FY 2021-22, as against 405 Crore in FY 2020-21.

The Net Worth of your company has increased by 4.88% from 4406 Crore in FY 2020-21 to 4621 Crore in FY2021-22, and earnings per share in FY 2021-22 stood at

5.79pershare(afterissueofBonusSharesintheratioof1:1,in May 2021).

DIVIDEND

The Company is focused on enhancing shareholders value and has a track record of paying dividend consistently since its beginning phase.

During the FY 2021-22, the Board of Directors had declared and paid interim dividend thrice, totaling to 1.85 per equity share on the face value of 2/- per share amounting to 174 Crore (approx.) which is approximately 92.50% of the paid-up share capital of 188.10 Crore of the Company. All these interim dividends have been declared out of the profits of the per the unaudited financial results for the three quarters ending June, September and December 2021.

The Board has further recommended an additional dividend of 0.65 per equity share on the face value of 2/- each amounting to 61.13 Crore (i.e. 32.50% of the paid-up share capital of 188.10 Crore), out of profits the Company for the FY 2021-22, which is subject to the approval of the shareholders.

With this, the total dividend for the FY2021-22 would aggregate to 235.13 Crore (approx.) (i.e. 125% on the paid-up equity share capital of 188.10 Crore), which of FY2021- worksout to 43.20% of the post-tax profits 22 and 5.09% of net worth of the Company as on March 31, 2022. After approval and payment of the proposed dividend, the cumulative dividend paid to shareholders up to FY2021-22 will stand at 2374.47 Crore (approx.). The Dividend has been declared in line with the Dividend Distribution Policy which is framed in terms of Regulation

43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (‘Listing Regulations), and the guidelines on “Capital Restructuring of Central Public Sector Enterprises”

SHARE CAPITAL & DISINVESTMENT OF SHARES

As on March 31, 2022 the paid-up and subscribed equity share capital of the Company stood at 188.10 Crore comprising of 94,05,15,740 equity shares of face value 2/- each. During the year, the paid-up share capital of the Company was increased from 94.05 Crore to 188.10 Crore due to issuance of fully paid bonus shares in the ratio of 1:1 i.e. one (1) new fully paid-up equity share of 2/- each for every one (1) existing equity share of 2/- each, which was approved by the members of the Company through Postal Ballot. The record date for this purpose was May 21, 2021 and the shares were allotted on May 23, 2021. After receipt of in-principle approvals from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) on May 25, 2021, corporate action of credit of bonus shares was completed on June 1, 2021. The shareholding of the Promoter of the Company i.e. the

President of India stood at 73.18% of the total paid-up equity share capital of the Company, as on March 31, 2022. IRCON is compliant on the Minimum Public Shareholding (MPS) requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulations) Rules, 1957. Based on the market price of Ircon International Limited

(IRCON) as on March 31, 2022, it is placed in the top 1000 listed companies. As on March 31, 2022, the market capitalization of your Company stood at 3743.25 Crore.

The Government of India had disinvested 10.53% of the paid-up equity share capital of the Company in the FY 2017-18, by way of Initial Public Offering (IPO). Further, 16% of the paid-up equity share capital of the Company was disinvested in the FY 2020-21, by way of Offer For Sale (OFS) through Stock Exchange mechanism. The total proceeds from these two disinvestments to the Government of India was 1144 Crore.

DEMATERIALISATION OF SHARES

As on June 30, 2022, all the shares (except only 5607 shares in physical form) are held in dematerialised form and the details of the dematerialisation of shares are provided in the Corporate Governance Report.

TRANSFER TO RESERVES

Appropriations to retained earnings for the financial year ended March 31, 2022 were 214.54 Crore after proposed final dividend of61.13 Crore and Bonus issue of 1:1 amounting to 94.05 Crore

CAPEX AND LIQUIDITY

During the year under review, the Company on a standalone basis spent a sum of 4.86 Crore on capital projects across domestic and foreign projects; which includes for constructing a building of 0.07 Crore; for acquiring Plant & Machinery of 1.35 Crore and 3.44

Crore for acquiring other assets. The Companys liquidity position remains strong at 5340 Crore as on March 31, 2022, comprising of 1206 Crore in cash and cash equivalent and 4134 Crore in other bank balances which includes client fund of 3291 Crore and Project Fund of 1010 Crore.

The Company has also invested 212.84 Crore in the equity / quasi-equity of its subsidiaries and joint venture companies during the FY2021-22, which stood at 1421.68 Crore as on March 31, 2022.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned a foreign exchange of 521.26 Crore during FY2021-22 as compared to 561.03 Crore earned during FY2020-21. The foreign exchange outgo stood at 467.10 Crore during FY2021-22 as compared to 515.55 Crore during FY2020-21. Thus, the net foreign exchange earnings have increased by 19.09%, i.e. from 45.48 Crore in FY2020-21 to 54.16 Crore in FY2021- 22.

IRCON GROUP PERFORMANCE

During the year under review, IRCON along with its subsidiaries (‘the Group) on a consolidated basis has recorded highest ever total turnover of 7586 Crore (previous year: 5506 Crore). The Group has registered a quantum jump of 37.94% in operating turnover to 7380 Crore (previous year 5350 Crore). The Group reported a consolidated profit before tax of689 Crore (previous year 578 Crore) and profit after tax of 592 Crore (previous year: 391 Crore), both registering increase of

19.20% and 51.41%, respectively.

The Group EBITDA was 853 Crore (previous year: 693 Crore), an increase of 23.09% over the previous year. During the FY 2021-22, in terms of the financial performance, the Company has achieved and crossed the Turnover targets criteria of 6261 Crore (on Consolidated basis) set up by the Ministry of Railways in terms of the Memorandum of Understanding based on the DPE guidelines.

IMPACT OF COVID-19

The Company is continuously monitoring the material changes to future economic conditions.

The Company has initiated several measures to help its employees and their families, including establishing COVID care centers, vaccination centers, and providing them access to medical care facilities. The Company has also taken various initiatives towards implementation of all precautionary measures to deal with the pandemic. During the FY 2021-22 the Company had made a contribution of 1.14 Crore towards Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund).

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION

There are no material changes or commitments affecting the financial position of the Company during and after the close of the financial year up to the date of the report.

FINANCIAL STATEMENTS

(STANDALONE AND CONSOLIDATED)

The Board of Directors of the Company has, at its meeting held on May 27, 2022, had approved the Financial Statements for FY2021-22 (Standalone and Consolidated). In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Company has prepared its Consolidated Financial Statements a) as per line-byline method for its wholly-owned subsidiaries viz. Ircon

Infrastructure & Services Limited (IrconISL), Ircon PB Tollway Limited (IrconPBTL), Ircon Shivpuri Guna Tollway Limited (IrconSGTL), Ircon Davanagere Haveri Highway Limited (IrconDHHL), Ircon Vadodra Kim Expressway Limited (IrconVKEL), Ircon Gurgoan Rewari Highway Limited (IrconGRHL), Ircon Akloli-Shirsad Expressway Limited (IrconASEL), Ircon Ludhiana Rupnagar Highway Limited (IrconLRHL), Ircon Bhoj Morbe Expressway Limited (IrconBMEL), & Ircon Haridwar Bypass Limited (IrconHBL) and subsidiary company viz. Ircon Renewable Power Limited (IRPL); and b) as per equity method for seven joint venture companies viz. Ircon-Soma Tollway Private Limited (ISTPL), Indian Railway Stations Development Corporation Limited (IRSDC) [not on a going concern basis], Chhattisgarh East Railway Limited (CERL), Chhattisgarh East-West Railway Limited (CEWRL), Jharkhand Central Railway Limited (JCRL), Mahanadi Coal Railway Limited (MCRL) & Bastar Railway Private Limited (BRPL). The accounts of unincorporated joint ventures have been included in the standalone financial statements for the FY 2021-22.

IRSDC has received a letter from Ministry of Railway dated October 18, 2021 for closure of business and transfer / hand over of its business /assets. Accordingly, all assets and liabilities of IRSDC (other than its investment in its subsidiary companies viz., Gandhi Nagar Railway and Urban Development Corporation (GARUD) and Surat Integrated Transportation Development Corporation Limited (SITCO) as on March 31 2022, are to be transferred to Rail Land Development Authority (RLDA) / Ministry of Railways (MoR) on slump sale basis for a consideration not less than the book value. Till such time, the slump sale is approved by the competent authority (i.e. IRSDC/ RLDA/MoR), IRCON continues to apply equity method for consolidation purposes.

The Company would make available its audited financial statements (standalone and consolidated) / financial statements of its eight subsidiaries (IrconISL, IrconPBTL, IrconSGTL, IrconDHHL, IrconVKEL, IrconGRHL, IrconASEL & IrconLRHL) at its website (www.ircon.org). Other three subsidiary companies viz. IrconBMEL, IrconHBL & IRPL are incorporated after 31.12.2021 therefore, their first financial year will end on March 31, 2023; hence, the audited financial statements of these three subsidiary companies will be placed on the website of the Company from the FY 2022-23 onwards.

Further, a statement containing the salient features of the financial statements of eleven subsidiaries and seven joint venture companies in Form AOC-1 is attached to the Financial Statements.

In view of the ongoing COVID-19 pandemic, owing to the difficulties involved in dispatching of physical copies of the financial statements (including Notice of AGM, Boards report, Auditors report or other documents required to be attached therewith), the Ministry of Corporate Affairs (MCA) and Securities Exchange Board of India (SEBI) have prescribed that such statements shall be sent only through e-mails to the members whose emails are registered with the company or with the depository participant / depository, and to all other persons so entitled. These relaxations have been extended upto December 31, 2022, by MCA and SEBI vide their circulars dated May 05, 2022 and May 13, 2022, respectively.

In view of the above relaxation and as part of green initiatives, the electronic delivery of the notice of Annual General Meeting (AGM) and Annual Report is being made to those shareholders whose e-mail addresses are already registered with the respective depository participants and downloaded from the depositories, i.e. NSDL/ CDSL. These documents shall be made available on the website of the Company and to the stock exchanges viz. BSE and NSE.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, as required under Regulation 34 read with Schedule-V to the Listing Regulations and DPE Guidelines, is annexed to the report and is incorporated herein by reference and forms an integral part of this report. It provides an overview of Global and Indian economy, the industry and future outlook, the Company overview, its legal status and autonomy, business divisions / units, financial and operational performance, projects undertaken in FY 2022 and upcoming projects, strengths, scope and opportunities, key concern areas, response to COVID-19, business strategies, risk management, internal control systems and their adequacy as well as material developments in human resource.

EXTERNAL ENVIRONMENT MACROECONOMIC CONDITIONS

Spread of Coronavirus (COVID 2.0) and subsequently Omicron variant disrupted the economy, resulting in devastating effects on businesses, financial institutions, and industrial establishments worldwide, in the beginning of the FY2021-22. Further, global economic prospects have worsened significantly largely because of Russias invasion of Ukraine causing a tragic humanitarian crisis in Eastern Europe and the sanctions aimed at pressuring Russia to end hostilities. In addition to the war, frequent and wider-ranging lockdowns in China including in key manufacturing hubs have also slowed activity there and could cause new bottlenecks in global supply chains. Higher, broader, and more persistent price pressures also led to a tightening of monetary policy in many countries. Overall risks to economic prospects have risen sharply and policy tradeoffs have become ever more challenging.

On the fiscal side, policy space was already eroded in many countries by necessary COVID-related spending.

Debt levels have risen significantly, and extraordinary fiscal support was expected to be removed in 2022 23.

The war and the impending increase in global interest rates will further reduce fiscal space in many countries, especially oil- and food-importing emerging market and developing economies.

The war has also increased the risk of a more permanent fragmentation of the world economy into geopolitical blocks with distinct technology standards, cross-border payment systems, and reserve currencies. Such a tectonic shift would entail high adjustment costs and long-run efficiency losses as supply chains and production networks are reconfigured. It also represents a major challenge to the rules-based framework that has governed international and economic relations for the last 70 years.

Commodity prices surged during the first quarter of 2022, reflecting the effects of the war in Ukraine as well as continued growth in demand and various constraints on supply. Amid concerns about the wars disruptive effects on commodity supply, the increases in prices were particularly pronounced for commodities where Russia and Ukraine are large exporters, particularly energy, fertilizers, and some grains and metals. These developments have added to a broad-based rise in commodity prices that began in mid-2020 with a surge in demand driven by receding concerns about the COVID-19 pandemic. Demand for commodities rebounded as the global economy recovered, while commodity production increased more slowly, weighed down by several years of weak investment in new production capacity as well as various supply disruptions.

ECONOMIC OUTLOOK

International Monetary Fund (IMF) has reduced its GDP projections for India in World Economic Outlook (July 2022) to 7.4% in 2022 and 6.1% in 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than the forecast made in January, 2022 by IMF. The downgrade largely reflects the wars direct impacts on Russia and Ukraine and global spillovers. Beyond 2023, global growth is forecast to decline to about 3.3% over the medium term. With a few exceptions, employment and output will typically remain below pre-pandemic trends through 2026.

Inflation is expected to remain elevated for longer than in the previous forecast, driven by war-induced commodity price increases and broadening price pressures. For 2022, inflation is projected at 5.7% in advanced economies and 8.7% in emerging market and developing economies which is 1.8% and 2.8% points higher than the projected in January. Global growth is expected to slow significantly in 2022, largely as a consequence of the war.

According to the provisional estimates released by the National Statistical Office (NSO) on May 31, 2022, Indias real gross domestic product (GDP) growth in 2021-22 was 8.7%. This works out to 1.5% above the pre-pandemic level (2019-20). In Q42021-22, real GDP growth decelerated to 4.1% from 5.4% in Q3, dragged down mainly by weakness in private consumption on the back of the Omicron wave.

International Monetary Fund (IMF) has reduced its GDP projections for India in World Economic Outlook (April 2022) to 8.2% in 2022 and 6.9% in 2023, which is 0.8% and 0.2% lower as compared to projections made by the IMF in January, 2022.

ENGINEERING & CONSTRUCTION INDUSTRY

Infrastructure is the backbone of the economy of any country, which leads to overall economic growth. Infrastructure plays a huge role in propelling other industries and Indias overall development. The government, therefore, focuses on the development of infrastructure and construction services through focused policies such as open FDI norms, large budget allocation to the infrastructure sector, smart cities mission, etc.

Construction industry in India will remain buoyant due to increased demand from real estate and infrastructure projects. Indian Real Estate sector expected to reach a market size of USD 1 Tn by 2030. Smart Cities Mission launched by the Urban Outcomes Framework 2022, Artificial Intelligence Playbook for Cities & AMPLIFI - Assessment and Monitoring Platform for liveable, Inclusive and future-ready urban India to promote the use of data that addresses complex urban issues. The Smart Cities Mission and World Economic Forum have joined hands to setup a ‘virtual hub for collaboration on urban transformations. The hub will leverage emerging technologies and innovations to transform Indian cities into centres of sustainable, inclusive and resilient growth.

India will require investment worth 50 trillion (US$ 777.73 billion) across infrastructure by 2022 for a sustainable development in the country. In November 2021, India, the US, Israel and the UAE established a new quadrilateral economic forum to focus on infrastructure development projects in the region and strengthen bilateral cooperation. The initiative ‘Infrastructure for Resilient Island States (launched in November 2021) will give India a huge opportunity to contribute to the betterment of other vulnerable countries in the world.

FDI in the construction development sector (townships, housing, built up infrastructure and construction development projects) and construction (infrastructure) activities stood at $26.17 bn and $26.30 bn, respectively, between April 2000 and December 2021. In March 2021, the Parliament passed a bill to set up the National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in India.

INDUSTRY OUTLOOK

As a part of Government thrust on infrastructure and to give further impetus to the implementation of priority programmes of National Infrastructure Prioritization, National Monetization Pipeline and Gatishakti, there has been a renewed thrust on scaling up infrastructure-centric capacity among public officials. Budget 2022 also specified the importance of capacity building, wherein it stated “With technical support from the Capacity Building Commission, central ministries, state governments, and their infra-agencies will have their skills upgraded. This will ramp up capacity in planning, design, financing (including innovative ways), and implementation management of the PM GatiShakti infrastructure projects”.

The government has given a massive push to the infrastructure sector by allocating 10 lakh Crore (US$ 130.57 billion) to enhance the infrastructure sector in Union Budget 2022-23. The government expanded the ‘National Infrastructure Pipeline (NIP) to 9,335 projects. 217 projects worth 1.10 lakh Crore (US$ 15.09 billion) were completed as of 2020. With the goal of developing infrastructure to lower logistic costs and improve the economy, the Honble

Prime Minister has announced a 100 lakh Crore master plan for multi-modal connectivity in October 2021. Commodity price have increased due to war between Russia & Ukraine, which has adversely affected the industry. Commodity markets are facing an unprecedented array of pressures, lifting some prices to all-time highs, particularly for commodities where Russia or Ukraine is a key exporter.

Most commodity prices are expected to be sharply higher in 2022 than in 2021 and to remain elevated in 2023-24 compared to their levels over the past five years Energy and non-energy prices are forecast to rise by 50 and 20 percent in 2022, respectively, before pulling back somewhat in 2023. Infrastructure sector will improve once the commodity prices will come down.

ORDER BOOK

In the industry that the Company pertains to, an order book is considered an indicator of future performance since it represents a portion of anticipated future revenue. The 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.

Ministry of Railways have made a significant policy on allotting the projects to PSUs, and have ended the system of competitive bidding amongst the eligible PSUs, and introduced competitive bidding for execution of railway works. During FY2021-22, despite the change in the policy of MOR by elimination of competitive bidding amongst the eligible PSUs, your Company has secured new works of approx. 16180 Crore. The order book as on March 31, 2022, stood at 43758 Crore (approx.) as compared to 34,689 Crore (approx.) as on March 31, 2021. The major new works include railway electrification, highway project, metro track works, workshops, airports and renewable energy; also civil and track work in prestigious High Speed Railway Project is being implemented for the first time in India. The order book as on June 30, 2022 stood at 42,066 Crore (approx.). The order book consists of value of works for which execution has not started as yet.

DOMESTIC PROJECTS

Since incorporation, the Company has diversified into various infrastructure sectors and is now an established player in the field of railway and highway construction.

Moreover, it caters to customer needs in many other areas such as the construction of commercial and residential complexes, power transmission lines, industrial lighting, bridge and flyovers, tunnels, electrical and mechanical work, signalling and telecom, production units, station building, multi-function complex, and airports. The diversification of project portfolio across various sectors has helped the company in de-risking its construction business and reduce our dependence on any sector or type of project.

In the coming future, IRCON would be pursuing for projects of High-Speed Rail, NCRTC, NHAI, Indian Railways and other important and high value projects in India.

NEW INDIAN PROJECTS

During the FY 2021-22, your Company was awarded projects in India for a total value of 14400 Crore. The major projects secured in India through competitive bidding are as follows:

(in Crore)

S. No.	Project Details	Total Value
1.	Design, Supply and Construction of Track and Track related works including Testing and Commissioning on Design-Build Lump Sum Price basis for Double Line High Speed Railway between Zaroli Village at Maharashtra-Gujarat Border (MAHSR Km. 156.000) and Vadodara (MAHSR Km. 393.700) in the State of Gujarat and the Union Territory of Dadra and Nagar Haveli for the Project for Construction of Mumbai- Ahmedabad High Speed Rail (Package No. MAHSR T-2), for National High Speed Rail Corporation Limited (NHSRCL)	5,143
2.	Setting up of 500 MW Grid Connected Solar PV Power Projects in India (Tranche III) under Central Public Sector Undertaking (CPSU) Scheme Phase-II (Government Producer Scheme) for Indian Renewable Energy Development Agency Limited (IREDA)	1,960
3.	Design and Construction of Civil and Building Works including Testing and Commissioning on Design Build Lump Sum Price Basis for Double Line High Speed Railway involving Ahmedabad Station, Sabarmati Station, Viaduct & Bridges, Crossing Bridges (excluding fabrication and transportation of Steel truss girders) and Associated works between MAHSR Km. 489.467 and MAHSR Km. 507.599 in the State of Gujarat for the Project for Construction of Mumbai- Ahmedabad High Speed Rail (Package No. MAHSR C-7), for ‘NHSRCL	1,714
4.	Construction of Eight Lane Access Controlled Expressway from Km 69.800 to Km 79.783 (Bhoj to Morbe Section-SPUR of Vadodara Mumbai Expressway) in the State of Maharashtra on HAM under Bharatmala Pariyojana (Phase-II-Package- XVII), for National Highways Authority of India (NHAI)	1,436
5.	Construction of Eight Lane access- controlled Expressway from Km 3.000 to Km 20.200 (Shirsad to Akloli Section-SPUR of Vadodara Mumbai Expressway) in the State of Maharashtra on HAM under Bharatmala Pariyojana (Phase II-Package XIV) for NHAI	1,124
6.	Construction of Four/ Six lane Greenfield Ludhiana-Rupnagar National Highway no. NH-205K from junction with NE-5 village near Manewal (Ludhiana) to junction with NH-205 near Bheora Village (Rupnagar) including spur to Kharar with Ludhiana Bypass under Bharatmala Pariyojana in the State of Punjab on HAM: Package-3 (Design Ch. 66.440 to Design Ch. 90.500 and spur to Kharar Design Ch. 0.000 to Design Ch. 19.200, total length 43.26 km), for National Highways Authority of India (NHAI)	1,107
7.	Upgradation and Four Laning of Haridwar Bypass Package-1 From Km. 0+000 (Km 188+100 of NH-58) to Km. 15+100 (Km 5+100 of NH 74) in the State of Uttarakhand on Hybrid Annuity Mode (HAM), for NHAI	861
8.	Railway Elecrification works for Badarpur - Jiribam, Katakhal - Bhairabi and Badapur - Karimgang - Sabroom Incl Karimgang - Maishasan, Agartala - Akaura and Baraigram Dullabachera (590 RKM) for North East Frontier Railway (NRF)	659
9.	Supply, installation, testing and commissioning of track works of standard gauge including all associated works in underground and elevated section between Light House Station and POONAMALLE Bypass Station and Poonamalle Depot in Corridor-4 of Chennai Metro Rail Project Phase-2, for Chennai Metro Rail Limited.	337

ONGOING PROJECTS:

A list of ongoing major projects in India is given at

Appendix-A.

During the FY 2021-22 following were some of the achievements of on-going major projects in India:

1. In Udhampur-Srinagar-Baramula Rail Link (USBRL) project, your Company has completed excavation of Main Tunnel of longest tunnel T-49 of 12.76 Km on February 15, 2022. Also, excavation of about 11 Km in Main Tunnel of T15 was completed on January 18, 2022. Your Company has also achieved breakthrough blast in Tunnel No. 77D on March 03, 2022, which is 2.65 KM long and is located at Village Bankoot in Ramban District. Execution of Tunnel T77D was very challenging, due to low overburden, extremely poor geology conditions and social challenges as this tunnel crosses the residential area. With the completion of Tunnel T77D, the 15 Km Block section from Banihal to Arpinchala is through for further works.

2. In Sivok-Rangpo Rail Link project, your Company has completed 10.34 excavation of Main Tunnels during the year 2021-22. Your Company has also achieved breakthrough in tunnel no.14 on February 08, 2022 which is 1.96 Km long and is located at Rangpo in

Sikkim. The project has a peculiar geometry comprising of 14 tunnels with in between bridges. There is practically no open space on the entire alignment except 4 station yards. The project is of strategic importance with future connectivity to Gangtok and thereafter to Indo-China border (Nathula pass) and has a vital role in meeting the defense requirements.

3. In Hajipur-Bachwara Doubling project, CRS inspection (Commission of Railway Safety inspection) of Hajipur- Akshaywat Rai Nagar (11.5 km) was held on March 24, 2022 and the section was commissioned at a maximum speed of 80 KMPH. CRS inspection of Shahpur Patoree-Sahdei Buzurg (12.41 km) was held on January 07, 2022 and section got commissioned at maximum speed of 90 KMPH. The entire project is likely to be completed by July 2022.

4. In Corridor-I of East Corridor between Kharsia to

Dharamjaygarh project in the State of Chhattisgarh being executed through the JV Company, Chhattisgarh East Railway Limited, the Korichhapar to Dharamjaygarh Section of 30 Km was formally opened for operation of Goods train with Diesel traction with only one train system on June 21, 2021. This is the first coal connectivity project where 74 Km (Single Down Line) has been commissioned. Commencement of this section will help in evacuation of coal from North Chhattisgarh Area thereby helping in developing the entire nation.

This 74 Km is the first stretch being commissioned under the PPP model. Further, the Gharghoda to Bhalumuda section of 14 Km [Spur Line (Single Line)] also commissioned for Goods train on February 25, 2022.

Engine Rolling has also been done between Gurda- Korichhapar (Doubling); between Chhal Takeoff Point to Chhal Siding Holding Yard; and between Kharsia- Gurda (doubling) on June 24, 2021, March 31, 2022 and April 25, 2022.

5. In Katni-Singrauli doubling project, for the Katni-Singrauli section of 257 Km, in FY 2021-22, after CRS inspection, 43.33 Km has been successfully commissioned i.e. Deoragram Majhauli section of 8.30 km commissioned at a maximum speed of 90 KMPH on September 07, 2021; New Katni Jn.-Katangi Khurd section of 7.80 Km Commissioned on June 14, 2021;

Mahediya-Singrauli section of 5.90 km commissioned on February 11, 2022; and Salhana-Pipriya-Khanna

Banjari section of 21.33 km commissioned on February 13, 2022.

6. In the Dedicated Freight Corridor Project, CTP-12, IRCON has set the record of manufacturing and launching the largest precast PSC segmental twin shell box (measuring 18.47 meters in length, 15.8 meters in width and 9.73 meters in height) at Road Over Bridge (ROB) Valsad between Valsad and Pardi Railway Stations, Gujarat. The work started on June 3, 2021 and was completed on June 7, 2021. Your Company has also completed 200 km track linking out of 372 km stretch of this project between Vaitarna-Sachin sections by using imported New Track Construction machine.

7. After the close of the year, on May 30, 2022, the Honble

Minister of Railways inaugurated an international standard fully air-conditioned multi-purpose Indoor Stadium at Behala which was constructed by IRCON. This fully air-conditioned multi-purpose Indoor Stadium with state-of-the-art facilities was developed with a seating capacity of about 1,100 in a two-tier viewer gallery. The entire complex is housed in a unique shaped structure of 22 meters in height with a semicircular dome space frame roof structure having a dimension of 60M x 45M. This is equipped with a dedicated power backup arrangement and parking in the basement of the building besides service lifts and a cafeteria etc.

INTERNATIONAL PROJECTS

Contribution of international projects to the total revenue in FY 2021-22 stood at 480.43 Crore as compared to 582.13 Crore in the FY 2020-21, and has decreased by approximately 6.95%. In terms of operatingprofit,the contribution of foreign projects stood at 39.51 Crore as compared to 34.75 Crore and has increased by 11.65%.

The Company continues to actively participate in new projects in foreign countries, and has one ongoing project each in Bangladesh, Algeria, Sri Lanka, Nepal and Myanmar. By continuing to diversify its business and graphical focus, the Company strives to secure a broader range of projects to maximize business volume and profit margins. Efforts are being made to secure foreign projects through Line of Credit/ other project export funding arrangements of EXIM Bank of India and projects funded through Multilateral funding agency.

New Foreign Projects

The Company was awarded one foreign project in Myanmar i.e. Construction of Road from Paletwa (Myanmar) to

Zorinpuri (Mizoram) under Kaladan Multi Modal Transit Transport Project (KMMTTP) on EPC Mode, by Ministry of External Affairs, Government of India on nomination basis, of the total value of 1780 Crore.

ONGOING PROJECTS

The Company is executing the following projects in foreign countries:

i. Bangladesh

(a) Khulna-Mongla Port Rail Line project

The Company secured a project in Bangladesh for construction of Khulna-Mongla Port Rail Line for Bangladesh Railway, at US$ 147.78 million (equivalent to approx. 911 Crore), and the revised cost is expected to reach US$ 182.37 million (equivalent to approx. 1349.53 Crore). The project includes construction of embankment, tracks, all civil works, major and minor bridges (except Rupsha Bridge), culverts and implementation of EMP against Package WD1. While the Project was in full swing on all fronts it slowed down again due to COVID waves. Additional scope of work added in 2021 has further delayed Project Completion.

The completion tenure is extended upto December 2022, along with the additional scope of work and pending approval for variations.

(b) Agartala (India)-Akhaura project (Bangladesh portion)

The Company has also signed a contract for providing Technical Advisory Services (TAS) for Construction of New Railway Line from Agartala (India) -Akhaura (Bangladesh) and Project Management Consultancy (PMC) for Construction in Bangladesh Portion with Ministry of External Affairs (MEA), Government of India. The construction contractor for the project is appointed by Bangladesh Railways and contract value is BDT 240.9 Crore (equivalent to approx. 209.47 Crore). The completion period of the construction contractor is extended upto June 30, 2022 and further time extension upto December 2022 is under process. The overall progress of the project is approximately is 56%.

ii. Algeria

In Algeria, the Company secured a project for installing a double-track line of 93 km in June 2008. The project was awarded by ANESRIF, the National Agency for the Planning and Implementation of Railway Investments, Ministry of Transport, Government of Algeria, at a value of Algerian Dinar 1,628 Crore (equivalent to approx. 1,003 Crore) with completion date of November 2012. The project involves the construction of the second line and upgradation of an existing line, with a diversion of 10 km from Oued sly to Yellel in Algiers-Oran section of Algerian Railways. The value of the contract, including additional works for the realisation of the double line, has been revised to Algerian Dinar 3,268 Crore (equivalent to approx. 2,248 Crore).

The project is likely to be completed in December 2023, as per the revised scope of work.

The work of 78 km new track line has been made operational in spite of the cash flow problems of ANESRIF 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 50 km out of 77 km of the existing line, 6 out of 7 station buildings are ready to be handed over, and 8 major bridges have also been completed with the assurance of timely payments. The client has assured uninterrupted payments, which will improve the progress of work and is expected to get completed by December 2023.

iii. Sri Lanka

In Sri Lanka, the Company secured a project for Upgradation of Railway Line from Maho to Omanthai under Indian Line of Credit - Track Rehabilitation and ancillary works. The project is awarded by Sri Lankan Railways under the Ministry of Transport and Civil Aviation, Government of Sri Lanka at a value of US$ 91.27 Million (equivalent to approx. 637.22 Crore).

Scope of work includes Upgradation of single line Broad Gauge track from Maho-Omanthai of around 128 km length under Traffic Block. The project was awarded in April 2019 with completion period of 36 months (starting from date of receipt of advance payment).

The project is financed through EXIM Bank of India as per Indian line of credit. The date of completion of the project as per the contract is November 28, 2022.

The progress is severely hit by COVID-19 pandemic delay in granting traffic closure and prevailing Economic and fuel crisis in Sri Lanka, yet the overall progress of the project is approx. 50%.

iv. Nepal

In Nepal, the Company is executing the following two projects:

(a) Construction of BG line between Jogbani (India)-Biratnagar (Nepal) on Indo-Nepal border

The project involves construction of new BG rail line from Bathnaha (India), Ch. 0.00 Km to Biratnagr (Nepal), Ch. Km 18.60. The proposed alignment in Indian portion (5.45 Km) falls in Araria district of Bihar State under Katihar Division of North East Frontier Railways and on the Nepal side (13.15 Km), in Morang district.

The revised value of 395.94 Crore is under approval of the Ministry of External Affairs. The overall progress of the project is approximately 84%.

(b) Construction of BG Line by Gauge conversion Jayanagar (India) - Bijalpura (Nepal) with extension upto Bardibas on India Nepal Border

The Project involves construction of new BG rail line from Jaynagar (India), Ch. 0.00 Km to Bijalpura (Nepal) with extension upto Bardibas, Ch. Km 68.72. The proposed alignment in Indian portion (2.975 Km) falls in Madhubani district of Bihar State and on the Nepal side (65.745 Km) in Mahottari district.

The revised estimate of 783.83 Crore is under approval of the Ministry of External Affairs.

Your Company on behalf of the Government of India has handed over the newly commissioned cross border rail section (Section-1) from Jayanagar (Km. 0.00) to Kurtha (Km. 34.90) to Government of Nepal on October 22, 2021 which was inaugurated through virtual mode by the Honble Prime Minister of India and the Honble Prime Minister of Nepal on April phase of 34.9 Km Jaynagar 02, 2022. The first (India) - Kurtha (Nepal) section is part of 68.72 Km

Jaynagar-Bijalpura-Bardibas rail link being built under Government of India grant assistance of NPR 8.77 billion. This section was earlier a narrow-gauge rail link between Jayanagar and Bijalpura. There are 8 stations and halts on the Jaynagar-Kurtha section, which includes the historically important station of Janakpur.

Section-2 from Km 34.900 to km Km 52.34, Kurtha- Bijalpura have been completed. In Section-3 from Km 52.34 to Km 68.72, Bijalpura-Bardibas land has not yet been acquired by Government of Nepal. The overall progress of the project is approximately 73%.

v. Myanmar

During FY2021-22, the Company has secured a project in Myanmar in February 2022, for Balance work of Construction of Road from Paletwa (Myanmar) to Zorinpui (Mizoram) (Kaladan Road Project) under Kaladan Multi-Modal Transit Transport Project (KMMTT Project), from the Ministry of External Affairs, on EPC mode at a lump sum cost of 1780 Crore. With this project, it is intended to open up an alternate route to North-East Region and connect Mizoram with Chin State of Myanmar at Zorinpui. The project has two parts viz (i) Waterway portion from Kolkata to Sittwe by Bay of Bengal and Sittwe to Paltewa by Kaladan River (ii) Roadway Portion i.e. Kaladan Road Project from Paletwa to Zorinpui (109.20 km). KMMTT Project is being executed under grant-in-aid assistance from Government of India to Government of Myanmar. The agreement for the execution of this project has been executed on March 07, 2022 and is to be completed within 40 months from the date of the signing of the agreement.

REAL ESTATE SECTOR

In terms of the Corporate Plan, IRCON has identified Real Estate Sector for selective diversification, keeping in view the tremendous potential in this Sector. In the year 2014, your Company had acquired 8 plots in different sectors, on leasehold basis for 90 years, at NOIDA and construction activities at these plots have been completed. The buildings are in the process of partial/complete leasing out. The Company has also developed property on a plot located in Sector-32, Gurugram, Haryana, which was procured from Haryana Urban Development Authority (HUDA). The construction of this property also has been completed. This building is having the state-of-the-art 250 seats auditorium and training center equipped with latest equipment along with an accommodation facility, and has been registered with the trademark authorities in India as IRCON INTERNATIONAL TOWER. The building is in the process of being leased out.

The Company had entered into a Memorandum of Understanding (MOU) on March 26, 2018, with the Rail Land Development Authority (RLDA) for transfer of leasehold rights to IRCON for commercial development on the land parcel measuring 4.3 (four points three) Hectare at Bandra East, Mumbai, Maharashtra, for 99 years against the payment of Upfront Lease Premium. In consideration of its roles and responsibilities, IRCON is entitled to receive from RLDA, a fee for an amount equivalent to 3% (three percent) of the Upfront Lease Premium. The said MOU has expired on March 31, 2021 and is in the process of renewal.

COMPANIES, JOINT VENTURE COMPANIES AND ASSOCIATE COMPANIES

During the FY 2021-22, your company has incorporated four wholly-owned subsidiary companies viz. Ircon Akloli- Shirsad Expressway Limited (IrconASEL) on December 23, 2021; Ircon Ludhiana Rupnagar Highway Limited (IrconLRHL) on December 24, 2021; Ircon Bhoj Morbe Expressway Limited (IrconBMEL) on January 06, 2022 and Ircon Haridwar Bypass Limited on January 13, 2022. All these four wholly-owned subsidiary companies have been formed as Special Purpose Vehicles (SPVs) for domiciling the projects awarded on Hybrid Annuity Mode (HAM) by the National Highways Authority of India (NHAI).

Also, one subsidiary company viz. Ircon Renewable Power Limited (IRPL) has been incorporated as Joint Venture Company and SPV (JV-SPV) on January 13, 2022, with shareholding of 76% held by IRCON. The JV-SPV is undertaking the project of setting up of 500 MW Grid Connected Solar PV Power Project under Central Public Sector Undertaking (“CPSE”) Scheme Phase-II issued by Indian Renewable Energy Development Agency Limited (IREDA).

A brief background on the eleven subsidiary companies (including the new companies formed in the FY 2021-22) and seven joint ventures companies of IRCON along with their financials and performance is given atAppendix-B. In terms of the Companys Policy on the determining the “Material Subsidiary” and regulation 24A of the Listing Regulations, for the financial year ending March 31, 2022, none of the subsidiary company is a ‘material subsidiary i.e. whose total income or net worth exceeds 10% of consolidated income or net worth of IRCON in the immediately preceding financial year i.e. March 31, 2021.

COMPLIANCES OF PRESIDENTIAL DIRECTIVES

Presidential directives as issued from time to time on various matters like reservation policy for reserved category persons SC/ST roster in the employment, revision in pay scale 2017 etc. have been complied with.

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 a quarterly basis in Corporate Office. c. Birthday wishes to employees, a thought and a word, contributed by different departments on rotational basis, a poem by renowned poets etc. are being displayed in Hindi at the reception. d. Thought of the day and a word in Hindi is displayed at reception, which is contributed by departments daily on rotation basis.

Every third month a meeting is conducted by Hindi Department with any one department in the Corporate Office in order to resolve issues faced in working in Hindi. 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. The 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.

COMPLIANCE OF RIGHT TO INFORMATION ACT, 2005 , Kolkata Project on September 15, 2021. Office

As per the requirements of the Right to Information Act, 2005 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, CSR and projects.

The details of RTI cases have been published on Central Information Commission (CIC) website on quarterly as well as on annual basis, and a copy of the same is forwarded to the Ministry of Railways for information.

During the year 2021-22, 168 applications and 27 first appeals were received and at the beginning of the year, 06 applications and 02 appeals were under process for disposal within the allowable time limit (i.e. total 174 applications and 29 appeals during the year). Out of this, 173 applications (including opening balance of 6 applications) and 29 first appeals (including opening balance of 2 appeals) were processed/disposed off. As on March 31, 2022, only 01 application was under process for disposal within the allowable time limit.

COMPLIANCE OF MSME GUIDELINES FOR IMPLEMENTATION OF PURCHASE PREFERENCE POLICY

The 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 (Ministry of MSME) under section 11 of Micro, Small and Medium Enterprises Development Act, 2006. IRCON uses Central Public Procurement portal (CPPP) and Government e-Marketplace (GeM) portal for its procurement, which provides 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 the cost of tender fee and Earnest money. All tenders valuing upto 200 Crore are invited using national competitive bidding in compliance to Public Procurement (Preference to make in India), Order 2017.

During the FY 2021-22, the Company has procured items valuing 184.18 Crore from MSE vendor against expenditure valuing 601.33 Crore towards material, stores & service, thereby achieving 31% procurement from MSEs in compliance with the Procurement Policy. The Company has conducted two national level Special Vendor Development Programme at the Patna Project and Eastern

Region

In compliance with the Micro, Small and Medium Enterprise Development Act, 2006, the Company has on-boarded on the Trade Receivables Discounting System (TReDS) platform, w.e.f. January 25, 2018, to facilitate the financing of trade receivables of MSEs by discounting of their receivables and realisation of their payment before the due date.

HUMAN RESOURCE DEVELOPMENT

IRCON acknowledges that its employees are the primary pillar of its success and play a key role in protecting values and culture of the organization. The organization believes that its success depends on the alignment & performance of its people and in maintaining positive attitude in the workplace and committed to create a comfortable work environment that is collaborative, inclusive, performance oriented and fosters a culture of learning and growth. IRCONs Human Resource (HR) Philosophy is rooted in encouraging employee empowerment, growth and development of individuals by realizing their potential, encouraging innovative ideas and giving performance linked rewards. Its work culture is open and dynamic, enabling employees to take the initiative in jobs with the active support of the top management.

At IRCON, Human Resource Management (HRM) endeavour to employ, retain and develop the right people. HRM constantly work towards creating the best possible working environment that is inclusive, open, diverse, provides equal opportunities for all categories of employees. The Company has adopted and aligned its HR strategy vis-a-vis systems and procedures, taking into account the business objectives and competence building needed for the organisation. HR strategy acts as a motivating factor for the employees who contribute to the core competence of the organisation to create a match between the Companys future needs and the aspirations of individual employees.

During the COVID-19 pandemic, the Company has given its employees the flexibility and remote work option to ensure health, safety and security of all its employees and their families. Multiple initiatives were undertaken to tackle the dynamic situation pertaining to the pandemic and adequate support and medical help was provided to all concerned employees. The Company has a performance-oriented culture wherein the contribution of every employee to the organisation 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 merit at all levels and support the development of executives through a structured approach which is woven into the appraisal of the Company. The Company takes pride in its highly motivated and competent human resource and its contribution.

MANPOWER STRENGTH

The total manpower strength of IRCON as on March 31, 2022, stood at 1278, (previous year 1298) which included 954 regular employees, 28 employees on deputation, 293 on contract (including service contract) and 03 on fixed tenure basis. Out of the total 1278 employees of the Company, 1218 are posted on Indian projects and 60 on international projects. Among 1278 employees, 1029 are technically and professionally qualified. There was a total of 66 women employees as on March 31, 2022. The total manpower strength has reduced from the previous year, as the Company is looking for ways to optimize the costs. During the year, the total newly employed personnel stood at 181 which included 31 regular employees, 15 employees on deputation, and 135 on contract (including service contract).

RESERVATION IN EMPLOYMENT

The Company continues to give utmost importance to the implementation of the policies and directives of the Government of India in matters relating to reservations in the employment of candidates belonging to Scheduled Caste (SC) / Scheduled Tribe (ST) / other backward classes (OBC) and differently-abled categories. There was a total of 515 SC / ST / OBC and differently-abled employees as on March 31, 2022.

Further, during the FY 2021-22, out of the 31 employees inducted against regular posts, 03 belong to SC / ST / OBC and differently-abled categories. Similarly, out of the 111 employees recruited against the contractual positions, 52 belong to SC / ST / OBC and differently-abled categories.

During the FY 2021-22, training has been given to 252 employees, out of which 78 belong to SC/ST/OBC and differently-abled categories. To ensure the welfare of these employee categories, the Company has appointed Liasion Officers.

The infrastructure of the Company is well built catering to the needs of differently-abled employees.

TRAINING AND HUMAN RESOURCE DEVELOPMENT

IRCON puts a lot of emphasis on development and career progression of employees. Training programs are organised throughout the year. During the FY 2021-22, in-house training programmes across all levels of employees were organised. Professional programmes, workshops, health talks and seminars organised by reputed and prestigious institutes / agencies were carefully identified in line with business needs of IRCON, and suitable officers were nominated for such programmes.

The Company has been continuously taking steps for building capacity of its human resource through training in functional and general management areas, contract and arbitration, leadership, information technology, as well as soft skills. External faculty is arranged wherever required, and officials are nominated for carrying out workshops and seminars with reputed institutes. Employee Development has always been a priority for the Company, and various training and development plans have been initiated from time to time. During the FY 2021-22, a total 211 man-days training was imparted to officials of IRCON through workshops, seminars, conferences, in-house training and training in external institutes.

EMPLOYEE WELFARE

The Company has adequate and robust schemes in place for the welfare of the employees. These are health cover, medical scheme, post-retirement medical scheme, post-retirement pension scheme, periodic health check-ups at regular intervals, allowances, self-lease for residential accommodation, educational scholarships to the wards of employees, a 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, and resort facilities for employees and their family members on concessional rates through Dalmia and Sterling Resorts.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company aims to provide a congenial and safe working atmosphere for women employees. The Company has in place a comprehensive policy for Prevention, Prohibition and Redressal of Sexual Harassment at Workplace covering all the employees (on regular including deputationists, temporary, ad-hoc, contract / service contract or daily wages basis, either directly or through an agency, including a contractor, co-worker, a contract worker, probationer, trainee, apprentice etc.) of the Company and the same is available at the website of Company. The policy extends to wholly-owned subsidiary companies of IRCON formed as Special Purpose Vehicles.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has a five-member Internal Complaints Committee (ICC) for the prevention of sexual harassment at workplace comprising of four officials of the Company and one external member from NGO. Further, provision pertaining to the 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.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Your company is committed to address social, ethical and environmental concerns in which it operates and contribute to develop a sustainable society for future generation, while at the same time fulfilling the expectations of its stakeholders. Over the years, IRCON has identified Corporate Social Responsibility concern and implementing actions and initiatives that leads to positive impact in our Society and environment. The Corporate Social Responsibility & Sustainability Policy (CSR Policy), formulated in alignment with the vision of the company, lays down guidelines and mechanism to be adopted by the company in order to carry out CSR Projects. Our CSR activities extend into the areas of education, employment and skill development, environment sustainability, clean water & sanitization, sports, culture & heritage, rural transformation, and contribution to PM CARES fund setup by the Central Government.

DPE has issued guidelines for CSR expenditure vide O.M. dated December 10, 2018, and May 12, 2021, to CPSEs which inter-alia provide adoption of a theme-based approach for undertaking CSR activities, to spend minimum 60% of the annual CSR allocation for thematic programs and give preference to the Aspirational districts under their CSR. For the FY 2021-22, ‘Health & Nutrition and COVID related activities was selected as a common theme for undertaking CSR activities by the CPSEs for FY 2021-22. During the year under review, all the CSR activities undertaken were conceived and implemented through a focused approach towards target beneficiaries for generating maximum impact and carried out in partnership with credential implementing agencies. In FY 2021-22, as against the allocated budget of 10.50 Crore, the Company has spent 10.52 Crore on CSR activities. During FY 2021-22, the total funds donated to Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) is 1.14 Crore. The maximum amount of the CSR Budget has been spent on health sector including contribution to the PM CARES Fund. The Company has installed one Oxygen generating plant at Samastipur Railway Hospital and also provided a rain water harvesting system at Delhi Area.

The CSR Policy providing guidelines to conduct CSR activities of the Company is available on the website of the Company www.ircon.org. The Annual Report on CSR & Sustainability activities in terms of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 is annexed and forms part of this report.

QUALITY, HEALTH AND SAFETY QUALITY

IRCON is a precursor Public Sector Organization in adopting the Quality Management System Certification in the domestic as well as International Markets. Quality Management System (QMS) has been successfully sustained and continually improved since 1996 when the Company as a whole was firstcertified for ISO: 9002- 1994 by TUV SUD LED lamps Private Limited. also adds in Your Company an energyhas continued the certification and sustained the system as per the latest version of Quality Management Standards, i.e. ISO: 9001 - 2015 (by periodical re-certification audit after the expiry of every three years). Latest re-certification audit was conducted in January 2020, whereby the Company has been re-certified by TUV SUD South Asia Private Limited for a period of another three years, i.e. up to March 2023.

SAFETY HEALTH AND ENVIRONMENT MANAGEMENT (SHE)

The Company established an Environment Management System (EMS) and wascertifiedfor ISO: 14001-2004 in October 2011. The latest re-certification audit for ISO 14001-2015 was conducted in January 2020 whereby the Company has been re-certified for another three years, i.e. up to February 2023. IRCON is also certificated for ISO:45001-2018 which is valid upto December, 2024.

ENVIRONMENT MANAGEMENT

The Company established an Environment Management System (EMS) and was certified for October 2011. The latest re-certification audit for ISO 14001-2015 was conducted in January 2020 whereby the Company has been re-certified for another three years i.e. up to February 2023.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND UPGRADATION

IRCON is conscious of the limited nature of conventional sources and the importance of using our energy resources wisely. The Company has been consistently laying emphasis on utilizing energy efficient equipment in its office premises and in various projects so as to minimally effect on the ecology and environment. Towards conservation of energy, IRCON has taken following steps: a) IRCON has installed a total of 90 KW Roof Top Grid Connected Solar Power Plant at Corporate Office which is a step to conserve energy and 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.

b) 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. c) The internal lighting of Corporate Office building by energy-efficient saving of approx. 3,00,000 units or kWh per annum. d) Automatic Power Factor (APF) correction panels of 10.7 kVAR capacity have been designed and are being installed at the Receiving Substations (RSS) for Delhi-Ghaziabad-Meerut RRTS corridor of NCRTC project for RSS Energy Conservation. Moreover, the RSS Control Room Building is also constructed with highest rating of Indian Green Building Council (IGBC) standards to conserve energy. e) IRCON has also installed LED Lights for energy conservation which reduces energy consumption by upto 50% in various projects like Loco Shed at Bondamunda, Staff Quarters at Mathura-Kasganj-Kalyanpur RE Project, etc. and are also planned to be installed at USBRL E&M Tunnel Project. f) Capacitor Banks of 2400 kVAR capacity have also been installed at Baramulla TSS (J&K) for USBRL RE project to improve the power factor. More than 3000 units of electricity on a daily basis will be conserved on installing capacitor banks once electric traction is 14001-2004 in introduced in valley. Capacitor Banks are also planned to be installed at Qazigund and Budgam TSS for energy conservation.

STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATE SOURCES OF ENERGY:

The Company is utilising the following as an alternate source of energy: a) IRCON is also providing the features similar to the Green Buildings Constructions at Corporate Office, Gurugram building and its project offices, thereby reducing the environmental impacts on water, materials, waste, energy and carbon emission. IRCON has installed solar panels at various offices/projects; and LED lights, sensor lights & sensor taps are also being used in the Corporate & other offices to conserve electricity. b) IRCON has also installed Solar Power Photovoltaic Panels for its office Complex in Sangaldan (J&K) with a capacity of 110 kWp.

CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT:

IRCON being primarily an EPC company, has not made any significant capital investment on energy conservation equipment, during the year.

TECHNOLOGY ABSORPTION AND UPGRADATION EFFORTSMADETOWARDSTECHNOLOGYABSORPTION:

Towards technology upgradation, the Company had purchased a New Track Construction (NTC) machine for Dedicated Freight Corridor Project, CTP-12 (DFC project), which is successfully commissioned to improve productivity, safety, efficiency and quality in track laying at DFC Project.

At present, only two companies have this machine.

Moreover, use of e-Office has been started at the Corporate Office, and other project offices from January 2020 to enhance transparency, accountability, data integrity, promote greater collaboration in the workplace and effective knowledge management.

Also, the SAP S4 HANA has been implemented within the organization towards the digitization of the business processes for reduction in the use of papers, printers, cartridges and other associated resources. Your Company has secured a project for construction of Mumbai-Ahmedabad High Speed Railway (MAHSR)

Project on December 24, 2021, which has been designated as the first High Speed Railway networks planned to be constructed in India. For this network the Japanese system of the Shinkansen Bullet Train has been selected for its safety, performance and reliability record. After securing the project, IRCON has finalized the detail programme of High- Speed Track construction based on Shinkansen technology for overall total length of 237 Km between Vapi and Surat Railway Stations. This Shinkansen track would be capable of running bullet trains at maximum permissible speed of 350 Kmph. The Shinkansen technology will use RCC track bed, J Track slabs, Cement Asphalt Grout, Special fittings and JIS Rails instead of conventional ballast-less track being constructed in Metro network of Railways in India.

BENEFITS DERIVED LIKE PRODUCT IMPROVEMENT, COST REDUCTION, PRODUCT DEVELOPMENT OR IMPORT SUBSTITUTION

With the deployment of NTC machine, 260-meter-long rail panel can be laid with uniform sleeper spacing and minimum manual interface. This ensures a better quality of track laying and faster progress of track laying with 1.5 km completion per day.

IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST THREE YEARS RECKONED FROM THE BEGINNING OF THE FINANCIAL YEAR) a. Details of technology imported The Company has not imported any technology.

However, machine for laying long rail panels having length of 260-meter each, is being used by Dedicated

Freight Corridor Corporation of India Limited (DFCCIL) [one of the CPSE under the Ministry of Railways] for the first time in Indian Railways. IRCON also being a contractor of DFCCIL had purchased the machine i.e. New Track Machine (NTC) from M/s Harsco, USA along with imparting supervision in order to train our Indian team deployed in the project for obtaining efficient operators for handling of the technology in the long run, at companys other projects also.

b. Year of import - 2019

c. Whether the technology been fully absorbed;

At present, out of a total scope of 372 TKM, 213 TKM of track linking has been completed at DFCCIL CTP-12 Project.

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

At present, the NTC machine is being used at DFCCIL

CTP-12 Project of the Company. It can be utilized at other projects as per the requirement.

RESEARCH AND DEVELOPMENT

The Company being primarily an EPC 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 technical competence and efficiency.

INFORMATION TECHNOLOGY AND ERP

Information Technology (IT) in the Company is providing services related to Data Networks, Company-wide software application implementations, IT hardware equipment procurement, Implementation of Highway Traffic Management Systems (HTMS), Toll Management System (TMS) and Weigh-in-Motion on major highway projects executed and operated by IRCON and its Joint Venture companies as concessioners. IT is not just service provider but is also being used for productivity enhancement in IRCON. SAP ECC as Enterprise Resource Planning (ERP) application software for the operations of Finance, Controlling and Human Resource Management has had been used by IRCON.

It is leading to company wide information availability, transparency and has enabled faster decision making. SAP Business Objects (SAP BO) an analytical product of SAP was added to SAP implementation to automate on-demand financial reporting. This reporting tool fetches real-time data from SAP ECC and helps in preparation of Financial Statements of the Company. IRCON is in process of adopting latest upgradation with S4-HANA system in lieu of SAP ECC system. Employee Self Service Portal, Finance and HCM modules of SAP are under roll out process for entire organization and five pilot locations are under go live for full functionalities. The financial statements for the year ended March 31, 2022 were prepared from SAP S4-HANA and salaries of employees are also being processed through its payroll module of from April 2022 onwards. Fully functional SAP S4-HANA after implementation will cover end-to-end business processes of IRCON. S4-HANA ERP softwares server infrastructure is hosted on RailTel cloud on a MEITY empaneled Datacenters to ensure secured access in high availability environment where in there is scope for capacity augmentation without disruption of regular services.

E-Office system is deployed across IRCON for all domestic and foreign projects. It is a step towards paperless office initiative from Government of India for the approvals and and othermovement official documents. It is complete replacement of physical file system with loss less and undeletable data facility, and Digital Signature authentication features.

Implementation of S4-HANA as well as e-office will be in conjunction to each other, and will enable IRCON to march ahead with near paperless requirement in the entire organization.

Dedicated video conferencing facility on CISCO VC and Google Meet from official email ID hosted on https:// mail.ircon.org is being widely used for conducting review meetings with project offices, trainings, promotion interviews and contract management issues etc. Especially during period of COVID-19 pandemic, Google Meet solutions were extensively used by all the employees and was one of the most important tools for project review meetings and also the meetings of the Board of Directors, its Committee meetings and General Meeting of the Company.

CORPORATE GOVERNANCE

The Company ensures that it evolves and follows the corporate governance guidelines and best practices diligently, not just to boost long-term shareholder value but also to respect minority rights. It is the inherent responsibility of the Company to disclose timely and accurate information regarding the operations, performance, leadership and governance of the Company.

Pursuant to Regulation 34 of the Listing Regulations and DPE

Guidelines on Corporate Governance for Central Public Sector Enterprises issued in May 2010, the Corporate Governance Report along with compliance certificates of Corporate Governance norms under the said Listing Regulations and DPE Guidelines, are annexed and forms part of this report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2022, the Company had nine Directors of which three are whole-time Directors [Chairman & Managing Director, Director (Finance) and Director (Projects)], two Government Nominee Directors and four Independent Directors. The post of Director (Works) is vacant since September 04, 2021 and the additional charge to this post is held by CMD, in terms of order of Ministry of Railways.

The Company has requested the Ministry of Railways for appointment of requisite number of Independent Directors (including One Women Director) in order to comply with the statutory requirements. During the FY 2021-22, four Independent Directors (including woman independent director) were appointed by the Ministry of Railways, on Board of the Company. Now, there was two vacancies to the post of Independent Director; though, as per the actual strength of Board of Directors the vacant position of Independent Directors is one.

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors had declared Chairman & Managing Director (CMD) as deemed Chief Executive Officer (CEO) and all the Whole-time Directors and Company Secretary as Key Managerial Personnel (KMP) of the Company. The senior most finance official of the Company is as Chief Financial Officer (CFO) and KMP.

Board of Directors & Key Managerial Personnel (KMP) as on March 31, 2022

The Board of Directors of the Company as on March 31, 2022 were Executive (Functional) Directors viz. Shri Yogesh Kumar Misra (DIN: 07654014), Chairman & Managing Director & CEO with additional charge of the post of Director (Works), Shri Mohit Sinha (DIN: 00843548), Director (Finance), Shri Shyam Lal Gupta (DIN: 07598920), Director (Projects); Part-time (Official)

Directors viz. Shri Rajesh Argal (DIN: 09171980) and Shri Dhananjaya Singh (DIN: 08955500); being Government Nominee Directors and Independent Directors viz. Shri Ajay Kumar Chauhan (DIN: 09394953), Shri Dipendra Kumar Gupta (DIN: 09398271), Smt. Ranjana Upadhyay

(DIN: 07787711) (woman independent director) and Dr. Kartik Chandulal Bhadra (DIN: 09453387).

In addition to the CEO and whole-time directors, other KMP, as on March 31, 2022 were Shri Surajit Dutta, Executive Director (Finance) & CFO [upto March 31, 2022] and Ms. Ritu Arora, Company Secretary.

Appointments and cessation of the Directors and KMP during and after close of the FY 2021-22

Changes in the post of Chairman & Managing Director:

During the FY 2021-22, Shri S.K. Chaudhary (DIN: 00515672), ceased to be Chairman & Managing Director (CMD) and CEO, w.e.f. April 30, 2021, due to superannuation. Shri Mukesh Kumar Singh, Director

(Finance) (DIN: 06607392) was entrusted with additional charge of the post of CMD w.e.f. May 01, 2021 & also appointed as CEO w.e.f. June 11, 2021. Shri Yogesh Kumar Misra on selection by Public Enterprises Selection Board (PESB) was appointed as CMD & CEO of the Company w.e.f. September 04, 2021. Shri M.K. Singh relinquished the additional charge of the post of CMD & CEO on September 04, 2021 on appointment of Shri Yogesh Kumar Misra as CMD.

Changes in the post of Director (Finance):

Shri M.K. Singh ceased to be Director (Finance) on September 30, 2021, due to superannuation. Shri Mohit Sinha, Additional Member (Revenue), Railway Board was entrusted with additional charge of the post of Director (Finance) w.e.f. December 03, 2021. After the close of the FY 2021-22, Smt. Ragini Advani (DIN: 09575213) on selection by PESB has been appointed as Director (Finance) designated w.e.f. April 19, 2022 [Additional Director] and Shri Mohit

Sinha has relinquished the additional charge of the post of Director (Finance) of the Company w.e.f. April 19, 2022.

Changes in the post of Part-time (Official) Director / Government Nominee Director:

Further, Shri Rajesh Argal, Additional Member (Planning), Railway Board was appointed as Part-Time (Official) Director (Government Nominee Director) (Additional Director) of the Company w.e.f. May 13, 2021. Shri Rajesh Argal and Shri Dhananjaya Singh (DIN: 08955500), Part-time (Official) Directors appointed as Additional Directors were regularized at the last Annual General Meeting of the Company held on September 24, 2021. Appointment of Independent Directors:

During the FY 2021-22, Shri Ajay Kumar Chauhan w.e.f. November 11, 2021; Shri Dipendra Kumar Gupta w.e.f. November 16, 2021; Smt. Ranjana Upadhyay (Independent Women Director) w.e.f. November 16, 2021; and Dr. Kartik Chandulal Bhadra w.e.f. December 31, 2021 were appointed as Independent Directors (Additional Directors)

[Part-time (Non-Official) Directors] on the Board of the Company.

Change in the KMPs:

Consequent to appointment of Shri Mukesh Kumar Singh as CEO, Shri Surajit Dutta, former Executive Director (Finance) was appointed as CFO of the Company w.e.f. June 11, 2021. Shri Surajit Dutta ceased to be CFO & KMP of the Company on March 31, 2022 due to superannuation. After the close of the year, Shri Mugunthan Boju Gowda, Executive Director (Finance), was appointed as CFO & KMP w.e.f. April 26, 2022.

The complete details of appointment / relinquishment of post by the Directors and other related details are provided in the Corporate Governance report forming part of Annual Report.

INDEPENDENT DIRECTORS DECLARATION

The Company has received necessary declaration from all Independent Directors that he/she meets the criteria of independence as laid out in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) and 25(8) of the Listing Regulations. The declarations have been noted by the Board of Directors.

The Ministry of Corporate Affairs (MCA) has issued notifications in October 2019, relating to the creation and maintenance of the data bank for independent directors by Indian Institute of Corporate Affairs at Manesar, Haryana (IICA). Under Section 150(1) of the Companies Act, 2013, IICA conducts Online Proficiency Self-Assessment for Independent Directors. Accordingly, all the Independent Directors of the Company during FY 2021-22 have got their names registered on data bank of IICA.

APPOINTMENT / RE-APPOINTMENT OF DIRECTORS THROUGH POSTAL BALLOT

Pursuant to the provisions of Section 1 52(2) of the Companies act, 2013 every director of the Company has to be appointed in the general meeting of the Company. Further pursuant to SEBI Listing Regulations, every listed entity shall ensure that approval of shareholders for appointment of a person on the Board of Directors is taken at the next general meeting or within a time period of three months from the date of appointment. The appointment of Smt. Ragini Advani as Director (Finance) is required to be approved by the shareholders within a period of three months from the date of her appointment, i.e. latest by July 1 8, 2022. Thus, with the approval of the Board, the Postal Ballot Notice containing the Special Resolutions for regularization of appointment of four Independent Directors viz. Shri Ajay Kumar Chauhan, Shri Dipendra Kumar Gupta, Smt. Ranjana Upadhyay and Dr Kartik Chandulal Bhadra and one ordinary resolution for regularization of appointment of Smt. Ragini Advani as Director (Finance) on the Board of the Company was sent to the members of the Company and approved by the members on June 29, 2022.

RETIREMENT OF DIRECTORS BY ROTATION

In terms of Section 1 52 of the Companies Act, 201 3, the provisions in respect of retirement of Directors by rotation will not be applicable to the Independent Directors. In view of this, all directors (other than the Independent Directors) are considered for retirement by rotation. Accordingly, as per provisions of the Companies Act, 2013, Shri Shyam Lal Gupta, Director (Projects) and Shri Dhananjaya Singh, Parttime (Official) Director, are liable for retirement by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, offer themselves for re-appointment.

The details of such Director seeking re-appointment at the ensuing AGM are contained in the Notice convening ensuing AGM of the Company.

BOARD & COMMITTEE MEETINGS Board Meetings:

The Board met 9 times during the FY 2021-22, on April 05, 2021; June 11, 2021; June 30, 2021; August 12, 2021; August, 24, 2021; November 12, 2021; December 17, 2021; January 05, 2022; and February 14, 2022. The necessary quorum in terms of Listing Regulations was present for all the meetings except meetings held upto August 24, 2021 due to non-appointment of Independent Directors by the Ministry of Railways. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013, DPE Guidelines and the Listing Regulations.

During the FY 2021-22, all the meetings of the Board were held at the Companys Registered Office, in New Delhi, through Video Conferencing mode. One meeting of Project Progress Review Committee of the Board was held at Srinagar, Jammu & Kashmir, in compliance with the direction of the DPE for holding Board Meeting / Strategic meets of CPSEs at destinations which have potential for development of tourism sector in the country.

Committee meetings:

Your Companys Board has the following committees:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholders Relationship Committee

4. Risk Management Committee

5. Corporate Social Responsibility & Sustainability Committee

6. Project Progress Review Committee

During the FY 2021-22, the Audit Committee of the Board met ten times, the Nomination & Remuneration Committee met five times, Stakeholders Relationship Committee met one time; Risk Management Committee of the Board met two times; the Corporate Social Responsibility & Sustainability Committee met three times, and the Project Progress Review Committee met two times.

Details of constitution, terms of reference of the Committees, and attendance of Directors at meetings of the Committees are provided in the Corporate Governance report forming part of Annual Report.

Separate Meeting of Independent Directors

In compliance with the provisions of Regulation 25(3) of SEBI Listing Regulations, Schedule IV of the Companies Act, 2013 and DPE OM dated March 20, 2013, one separate meeting of Independent Directors was held on March 14, 2022 (which continued on March 15, 2022) at Mumbai, Maharashtra, without the presence of other Board Members.

SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA

IRCON being a Government Company, the appointment of directors on its Board is made by the President of India through the Administrative Ministry, Ministry of Railways. The key qualifications, skills, expertise and attributes of the Directors is included in the Corporate Governance Report.

PERFORMANCE EVALUATION

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 are system and procedure laid down by 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:

a) Performance of the Company under the MOU signed with the Ministry of Railways. Performance with respect to the targets fixed for the respective director.

b) 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).

c) 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 and finally by DPE.

REMUNERATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT

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 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 are placed on the website of the Company at the web address www. ircon.org (HRM and Career Sections). The remuneration policy of the Company and the procedure and policy for appointment of Senior Management are reviewed and recommended by the Nomination & Remuneration Committee before its approval by the Board of Directors.

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, 201 4, every listed company is required to disclose certain details of the remuneration of the Directors in the Boards Report. However, as per Notification No. GSR 463(E) dated June 5, 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 Boards Report. However, remuneration paid to directors during FY 202122 is disclosed in the Corporate Governance Report.

INTERNAL CONTROL SYSTEMS

The Company has in place adequate financial controls with reference to financial reporting in compliance with the provisions of the Companies Act, 2013 and such internal financial controls over financial reporting were operating effectively. The controls have been designed to provide assurance with respect of maintenance of proper accounting records, ensuring the orderly conduct of its business including adherence to the companys policies, safeguarding of its assets, prevention and detection of fraud and errors and ensuring the reliability of financial and operational information. The internal control system (including Internal Financial Controls over Financial Reporting) is reviewed on periodic, and necessary changes are carried out to align with the changing business requirements.

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

INTERNAL CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

Your Company has adopted an ‘Internal code of conduct for prevention of insider trading in dealing with securities of the Company (Code of Conduct), to regulate, monitor and report trading by designated persons and their immediate relatives and code for practices and procedures for fair disclosure of Unpublished Price Sensitive Information (UPSI) as per the requirement under SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code of Conduct aims that the insiders of the Company shall not derive any benefit or assist others to derive any benefit from the access to and possession of UPSI about the Company which is not in the public domain and thus constitutes insider information.

The Code of Conduct as approved by the Board has been posted on the website of the Company, i.e., www.ircon.org under the head Codes and Policies in the Investors section.

RISK MANAGEMENT

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

As per the Listing Regulations, the Company is having a Board level Risk Management Committee, which as on March 31, 2022 comprised of Director (Projects) as Chairman, and Shri Rajesh Argal, Part-time (Official) Director and Shri Dipendra Kumar Gupta, Independent Director as members. The Risk Management Policy of the Company has been revised and updated during the FY 2021-22.

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

WHISTLE BLOWER POLICY / VIGIL MECHANISM AND VIGILANCE ACTIVITIES

Being a Government Company, the Company has a separate Vigilance Department which 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. The Company has in place the necessary vigil mechanism for employees and directors to report to the Management concerns about unethical behavior, actual or suspected fraud violation of the Companys Code of Conduct or ethics policy and instances of a leak of unpublished price sensitive information. If one raises a concern under this Policy, the complainant will not be at risk of suffering any form of reprisal or retaliation (including discrimination, reprisal, harassment or vengeance) in any manner. No person has been denied access to the Chairman & Managing Director, IRCON or to Chairman of the Audit Committee.

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. During FY 2021-22, the Department has carried out 01 surprise inspection and 04 periodic inspections on high-value projects. Apart from surprise and periodic inspections department has carried out 08 preventive inspections on tenders floated from the corporate office. Chief Technical Examiners Organisation (CTEO) (Technical wing of Central Vigilance Commission) has also carried out extensive investigation of 01 project. Complaints raised against officials and procedures etc. by various Authorities (such as CVC/Railway Board Vigilance, CBI, Prime Ministers Office etc.) and received from other sources were investigated to their logical conclusion. During FY 2021-22, 01 complaint was received and along with 06 pending complaints of the previous FY, a total of 07 complaints were disposed off. The complaints were related to irregularities during tendering, execution of contract, anonymous and pseudonymous and quality related issues. Also, steps were taken for closure of paras raised by CTEO. In addition, scrutiny of immovable property returns of employees, creating awareness on rules / procedures / common irregularities in execution through workshops, training, debate, and competitions are the prime activities of the Department.

As a step towards ‘Leveraging of Technology for better transparency, Immovable Property Returns, are filed by the officer through online system since 2012-13, and the process is running successfully. Vigilance Clearance, filing of vigilance complaints are also done through online system since April 04, 2014. E-Procurement has already been started w.e.f July 1, 2013, in the organisation in a comprehensive manner for achieving transparency for all value of the work.

"IRCON Career" application has been provided in the public domain to ensure that the public at large receives alerts and updates over the mobile phone regarding recruitment activities at IRCON.

IRCON has adopted Integrity Pact (IP) as recommended by the Central Vigilance Commission (CVC) on June 24, 2014, for tenders/contract for works and supply with an estimated value of 5 Crore and above on all Indian Projects. The Integrity Pact is made a compulsory document in the conditions of model e-Procurement Documents for all works. Moreover, IRCON has an Integrity Pact tool which is developed by Transparency International India and it 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.

As per the provision of Integrity Pact and relevant guidelines of Central Vigilance Commission, Dr. T.M. Bhasin has been appointed as an Independent External Monitor (IEM) on November 27, 2020 and Shri Bimal Julka, Retired IAS has been appointed as second IEM 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 the functioning of the organisation by taking steps to prevent unethical practices.

RELATED PARTY TRANSACTIONS

Prior omnibus approval of the Audit Committee is obtained on yearly basis for all Related Party Transactions with the subsidiary and joint venture (JV) companies which are of unforeseen and repetitive nature valuing upto 1 Crore in a financial year. The transactions, if any, entered into with the subsidiary / JV Company in pursuant to the omnibus approval granted, are placed before the Audit Committee on a quarterly basis. Approval of specific related party transactions other than those covered under the Omnibus approval are also obtained from the Audit Committee/ Board in compliance with the requirement of the Companies Act and Listing Regulations.

In pursuance to Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the "Disclosure of particulars of contracts / arrangements entered by the Company with related parties including certain arms-length transactions" are disclosed in Form AOC-2 and is annexed to this Report. Further, the disclosure of all related party transactions including the transactions entered in terms of regulation 53(f) of the Listing Regulations forms part of the financial statements.

The Related Party Transaction Policy of the Company has been revised and approved by the Board during the year 2021-22 and is uploaded on the Companys website of the Company under the ‘Investors section at www.ircon. org.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

i) that in the preparation of 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 March 31, 2022, and of the profit of the Company for the FY 2021-22;

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, 201 3, 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 system has been devised to ensure compliances with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BUSINESS RESPONSIBILITY REPORT

The "Business Responsibility Report" in compliance with the provisions of regulation 34 of the Listing Regulations, in the format prescribed under SEBI Circular no. CIR/ CFD/ CMD/10/2015 dated November 4, 2015, forms part of the Report. The report describes the initiatives taken by IRCON from an environmental, social and governance perspective.

Further, the amendment to regulation 34(2)(f) of LODR Regulations issued vide Gazette notification no. SEBI/LAD- NRO/GN/2021/22 dated May 05, 2021 has introduced a new reporting requirement on ESG parameters called Business Responsibility and Sustainability Report (BRSR), which are mandatory for the top 1000 listed companies for the FY 2022-23 and for FY 2021-22, it is voluntary.

MOU RATING / AWARDS

In terms of the DPE guidelines, every year a Memorandum of Understanding (MOU) is entered into between Ministry of Railways and IRCON on selected parameters having targets normally decided before the start of new financial year. The achievements of these targets are evaluated after the end of the year to measure the performance of the Company. Based on the MOU parameters and performance for the year 2019-20 and 2020-21, the Company has been rated as ‘Excellent. The Company expects to achieve ‘Very Good rating for the year 202122.

The Company has received the following awards during the year 2021-22:

S. NO.	DATE OF RECEIPT OF AWARD	NAME OF THE AWARD	CATEGORY / PROJECT
1.	29.07.2021	Governance Now 8th PSU Award	In two categories viz. - CSR Commitment - CSR Leadership Award
2.	27.08.2021	National Awards for Excellence in PSU	In three categories viz. - Innovation Social Media Outreach - Increasing the Geo-Strategic Reach - Exemplary Leader Award
3.	07.03.2022	Greentech Foundation Safety Award	For Construction Safety

AUDITORS

STATUTORY AUDITORS

The Comptroller & Auditor General of India (C&AG) has appointed M/s HDSG & Associates, Chartered Accountants, New Delhi (Firm Registration No.002871N) as the single Statutory Auditors of the Company for FY 2021-22, except for the following foreign projects for which C&AG has appointed the following as statutory auditors:

M/s Ait MIMOUN Rafik	Algeria Project
M/s Edirisinghe & Co.	Sri Lanka Project
M/s UHY Syful Shamsul Alam & Co.	Bangladesh Project

COST AUDITORS

The Board of Directors has appointed M/s R.M. Bansal & Co., Cost Accountants, (having firm Registration No.000022) as Cost Auditor of the Company for the FY 2021- 22 for conducting the audit of cost records maintained by the Company as per the applicable Rules / Guidance Note, etc.

SECRETARIAL AUDITORS

In pursuant to the provisions of section 204 of the Companies Act, 2013 and Regulation 24A of the Listing Regulations, the Board of Directors has appointed M/s Kumar Naresh Sinha & Associates, Company Secretary in practice (Firm Registration No. S2015UP440500) as the Secretarial Auditor for conducting Secretarial Audit of the Company for the FY 2021-22.

INTERNAL AUDITORS

The Board of Directors have appointed following Internal

Auditors for the Indian Projects for the FY 2021-22; and the Internal Audit of the foreign projects are done internally by employees of the Company:

M/s Ravi Rajan & Co., Chartered Accountants, New Delhi	Corporate Office
M/s SPMR & Associates, Chartered Accountants, New Delhi	Northern Region
M/s Keshri & Associates, Chartered Accountants, Kolkata	Eastern Region
M/s Dinesh K Yadav & Associates, Chartered Accountants, Patna	Patna Region
M/s MKPS & Associates, Chartered Accountants, Mumbai	Mumbai Region
M/s Hem Sandeep & Co., Chartered Accountants, Jammu	J&K Region

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

IRCON is engaged in the business of providing infrastructure facilities and is exempted from compliance with all the provisions of Section 186 [except sub-section (1) to Section 186] in terms of Section 186(11)(a) read with Schedule VI of the Companies Act, 2013.

The details of investments made, loans granted, and guarantees extended by the Company to its subsidiary and joint venture companies during the FY 2021-22 forms part of the notes to the standalone financial statements provided in the Annual Report.

DEPOSITS

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

OTHER DISCLOSURES EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as at March 31, 2022 is placed on the website of the Company at www.ircon.org, under the Investors section.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has complied with the provisions relating to the Investor Education and Protection Fund (IEPF) under the Companies Act, 2013 and the rules made thereunder. Company Secretary is the nodal officer to deal with the IEPF Authorities and compliances related thereto.

No amount is due for transfer to IEPF and details of unclaimed dividend as on March 31,2022 are available on the website of the Company, and this is also disclosed in the Corporate Governance report. Further, the Company does not have shares in Demat Suspense Account/ Unclaimed Suspense Account/ Unclaimed dividend and has been disclosed in the Corporate Governance report.

SECRETARIAL STANDARDS

During the year, the Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

No order has been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future during the FY 2021- 22.

DETAILS OF APPLICATION MADE OR ANY PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

There are no proceedings initiated/pending against your company under the Insolvency and Bankruptcy Code, 2016 which will have material impact on the business of the company.

CHANGE IN THE NATURE OF BUSINESS

There was no material change in the nature of business of the Company during the FY 2021-22.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of Listing Regulations and the guidelines on "Capital Restructuring of Central Public Sector Enterprises" issued by the DIPAM, the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy. The said Policy is annexed to this report and is also available on Companys website www.ircon.org.

SECRETARIAL AUDIT REPORT AND MANAGEMENT RESPONSE THERETO

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 forms part of this report.

The Management Response on the qualification in the Secretarial Auditor Report and compliance of conditions of Corporate Governance for the FY 2021-22 forms part of this report.

STATUTORY AUDITORS REPORT AND C&AG COMMENTS

The reports of the Statutory Auditors on the Financial Statements for FY 2021-22 (both on standalone and consolidated financial statements) are attached separately as part of the Annual Report. There are no qualifications, reservations or adverse remarks made by HDSG & Associates, Statutory Auditors, in their report for the financial year ended on March 31,2022.

Comments of Comptroller & Auditor General (C&AG) of India on the Audited Financial Statements of your Company for the FY 2021-22 are attached.

ACKNOWLEDGEMENT

The Directors of the Company would like to express their appreciation and thanks for the assistance and co-operation received from to the Ministries of Railways, Ministry of Road Transport and Highways (MoRTH), External Affairs, Finance, Commerce, Urban Development and other ministries, departments and agencies, the office of Comptroller & Auditor General of India, Reserve Bank of India, Statutory, Branch, Cost, 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.

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 Director

Sd/-

(Yogesh Kumar Misra)

Chairman & Managing Director & CEO

(DIN: 07654014)

Date: August 23, 2022

Place: New Delhi