Directors Report of Ircon International Ltd.

Mar 31, 2025

The Board of Directors of your Company are pleased to present the 49^th Annual Report of your company for the
financial year ended March 31, 2025. This report provides a comprehensive overview of the Company''s performance,
including a summary of financial results and key highlights concerning the financial performance for the period ended
March 31, 2025.

FINANCIAL RESULTS

	STANDALONE			CONSOLIDATED
PARTICULARS	FY 2024-25	FY 2023-24	%age CHANGE	FY 2024-25	FY 2023-24	%age CHANGE
Total Income /Turnover	10,677.45	12,387.85	(13.81%)	11,131.03	12,870.52	(13.52%)
Total Operating Income / Turnover	10,193.14	11,950.40	(14.70%)	10,759.58	12,513.65	(14.02%)
EBITDA	963.47	1,201.36	(19.80%)	1,276.03	1,509.96	(15.49%)
Profit Before Tax	917.81	1,155.54	(20.57%)	939.02	1,261.13	(25.54%)
Profit After Tax	737.59	862.90	(14.52%)	727.83	929.51	(21.70%)
Net Worth	6,237.43	5,771.76	8.07%	6,326.35	5,870.92	7.76%
Appropriations
Dividend (Final & Interim)*	249.24	291.56	(14.52%)
EPS	7.84	9.17	(14.50%)	7.73	9.88	(21.76%)

Notes: * Includes proposed final dividend [subject to the approval of shareholders at the ensuing Annual General
Meeting (AGM)].

FINANCIAL HIGHLIGHTS

The Company has recorded a total income of ?10,677.45
Crore during FY 2024-25. While this reflects a moderation
from ?12,387.85 Crore in FY 2023-24. The operating
turnover for FY 2024-25 is ?10,193.14 Crore, compared
to ?11,950.40 Crore in the previous year. This change is
mainly because of the successful completion of some
of the major projects in the current financial year. The
company is actively working to secure more projects and
grow its order book.

Profit Before Tax (PBT) stood at ?917.81 Crore (?1,155.54
Crores in FY 2023-24), and Profit After Tax (PAT) at ?737.59
Crore (?862.90 Crores in FY 2023-24), reflecting the
impact of reduced turnover and provisioning in ongoing
projects.

During the year, the Company''s Net Worth stands at
?6,237.43 Crore in FY 2024-25 showing an increase from
?5,771.76 Crore in FY 2023-24. The Earnings Per Share
(EPS) for the year ended March 31, 2025, is ?7.84 per
equity share (face value ?2), compared to ?9.17 in the
previous year.

DIVIDEND

The Company''s primary focus is on enhancing shareholder
value. The Company has a consistent track record of
paying dividends since its inception. In FY 2024-25, the
Board of Directors declared and disbursed an interim
dividend of ?1.65 per equity share of a face value of ?2/-
per share. This amounted to approximately ?155.18 Crore,
(calculated at 82.50% of the paid-up share capital of

?188.10 Crore). The interim dividend was declared based
on the Company''s unaudited financial results for the
quarter ended December 2024.

Furthermore, the Board has recommended a final dividend
of ?1.00 per equity share on the face value of ?2/- each,
aggregating to ?94.05 Crore (50% of the paid-up share
capital of ?188.10 Crore). This final dividend is subject to
approval from the shareholders at the ensuing AGM and is
based on the Company''s profits for FY 2024-25.

Considering these dividends, the total dividend for FY
2024-25 would amount to approximately ?249.24 Crore
(?2.65 per share). This represents 33.79% of the postÂ¬
tax profits for FY 2024-25 and 4.01% of the net worth of
the Company as of March 31, 2025. Upon approval and
payment of the proposed final dividend, the cumulative
dividend paid to shareholders until FY 2024-25 will stand
approximately ?3,197.42 Crore.

The declaration of dividends aligns with the Dividend
Distribution Policy, which complies with Regulation 43A
of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (LODR Regulations), as amended, and the guidelines
on "Capital Restructuring of Central Public Sector
Enterprises".

SHARE CAPITAL

As on March 31, 2025, the paid-up equity share capital
of the Company stood at ?188.10 Crore comprising of
94,05,15,740 equity shares of face value of ?2/- each. The
shareholding of the Promoter of the Company i.e. the
President of India stood at 65.17% of the total paid- up
equity share capital of the Company, as on March 31, 2025.
IRCON is compliant on the Minimum Public Shareholding
(MPS) requirements specified in Rule 19(2) and Rule 19A of
the Securities Contracts (Regulation) Rules, 1957.

Pursuant to the amendment in SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, IRCON
is amongst the top 500 listed companies based on the
average market capitalization as on 31^st December, 2024.
As on 31^st December, 2024, the market capitalization of
your Company stood at ?22,737.83 Crore.

DEMATERIALISATION OF SHARES

As on March 31, 2025, all the shares, except 1074 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 RETAINED EARNINGS

Appropriations to retained earnings for the financial
year ended March 31, 2025 were ?488.35 Crore after
considering the total dividend of ?249.24 Crore.

;n

CAPEX AND LIQUIDITY

During the year, the Company on a standalone basis
spent a sum of ?378.94 Crore on capital projects across
domestic and foreign projects; which includes ?15.06
Crore towards construction of a building; ?59.92 Crore for
acquiring Plant & Machinery; ?12.34 Crore for acquiring
other assets (i.e. computer, furniture, software and
others); and ?291.62 Crore towards investments in SPVs.

The Company''s liquidity position stood at ?4,123.91 Crore
as on March 31, 2025, comprising of ?1,977.85 Crore in
cash and cash equivalent and ?2,146.06 Crore in other
bank balances. Out of ?4,123.91 Crore, client/ project
funds amount to ?3,268.95 Crore.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned a foreign exchange of ?20,535
Crore cumulatively till date. During FY 2024-25, the
Company has earned a foreign exchange of ?831.06
Crore as compared to ?622.66 Crore in FY 2023-24. The
foreign exchange outgo stood at ?660.42 Crore during FY
2024-25 as compared to ?553.23 Crore during FY 2023Â¬
24. Thus, the net foreign exchange earnings amount to
?170.64 Crore in FY 2024-25.

IRCON GROUP PERFORMANCE

During the year, IRCON and its subsidiaries (the Group)
recorded a total consolidated turnover of ?11,131.03
crore (?12,870.52 Crore in FY 2023-24), and an operating
turnover of ?10,759.58 crore (?12,513.65 Crore in FY 2023Â¬
24). While this reflects a slight reduction compared to the
previous year, the Group still maintained strong financial
performance, recording a profit before tax of ?939.02
crore (?1,261.13 Crore in FY 2023-24), and a profit after tax
of ?727.83 crore (?929.51 Crore in FY 2023-24).

Importantly, IRCON has been awarded an "Excellent"
rating for FY 2023-24 by the Department of Public
Enterprises (DPE), recognizing the Group''s performance
as per the MoU targets.

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 21, 2025, had approved the
Financial Statements for FY 2024-25 (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-byÂ¬
line 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 Vadodara Kim Expressway
Limited (IrconVKEL), Ircon Gurgaon 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 2024-25.

CLOSURE OF PROJECTS

1. IRSDC:- The Ministry of Railways (MoR), via letter
dated 18.10.2021, had granted in-principle approval
for the closure of Indian Railway Station Development
Corporation Limited (IRSDC) and the transfer of its
business to RLDA. In FY 2024-25, with consent from
JV partners (IRCON, RITES, and RLDA), IRSDC''s assets
and liabilities (excluding investments in SITCO and
GARUD/SFM) were transferred to RLDA on a slump
sale basis. A Business Transfer Agreement was signed
on 9 April 2025, and ?39.89 crore was received on
11 April 2025.

Earlier, RLDA paid ?6.30 crore for SITCO in FY 2023-24
and acquired IRSDC''s share in GARUD for ?12.49 crore
in June 2025. As of 31 March 2025, closure activities
are near completion, and the company''s financials
are prepared on a liquidation basis. Appointment
of a Liquidator under IBC is in progress. The Group
continues to monitor developments and sees no
impairment risk, with its share in IRSDC''s net worth
(?61.76 crore, 26% of ?237.52 crore) remaining intact.

2. MCRL:- It has been decided to handover Phase- I
(Angul - Balram, 14 KM already operational) and
Phase- II (Balram-Putgadia-Tentuloi, 54 KM under
construction) of MCRL Project to the Ministry of
Railways (MoR). The legal formalities, pricing and
related modalities are in process and the Company

does not foresee any impairment in the value of
investment at this stage.

3. BRPL:- The Ministry of Railway (MoR) has granted inÂ¬
principle approval for closure of Bastar Railway Private
Limited, a joint venture company and transfer of its
assets and liabilities to MoR. The legal formalities,
pricing and related modalities are in process and the
Company does not foresee any impairment in the
value of investment at this stage.

The Company would make available its audited financial
statements (standalone and consolidated) for the FY
2024-25 and financial statements of its eleven subsidiaries
(IrconISL, IrconPBTL, IrconSGTL, IrconDHHL, IrconVKEL,
IrconGRHL, IrconASEL, IrconLRHL, IrconBMEL, IrconHBL &
IRPL) at its website (www.ircon.org).

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

The Ministry of Corporate Affairs and the Securities and
Exchange Board of India (SEBI) had allowed companies
to send financial statements, including the Notice of
AGM, Board''s Report, Auditor''s Report, and other related
documents, exclusively via e-mail to members who have
registered their email addresses with the company or
with the depository participant/depository, as well as
to other eligible persons. These relaxations have been
extended until September 30, 2025, as per circulars
dated September 19, 2024 and October 3, 2024 issued by
MCA and SEBI respectively.

Taking into account these relaxations and as part of our
commitment to environmental sustainability, the Notice
of AGM and Annual Report will be electronically delivered
to shareholders who have already registered their email
addresses with the respective depository participants.
These documents will be accessible on the Company''s
website and will also be provided to the stock exchanges,
namely BSE Limited (BSE) and National Stock Exchange of
India Limited (NSE).

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) Report,
as mandated by Regulation 34 read with Schedule-V to the
LODR Regulations and DPE Guidelines, has been included
as an annexure to this report. It is hereby incorporated
by reference and serves as an integral component of
this report. The MDA Report provides a comprehensive
review of various key aspects including the global and
Indian economy, industry analysis and future outlook,
Company overview, legal status and autonomy, business
divisions/ units, financial and operational performance,

order book position, strengths, scope and opportunities, key concerns, business strategies, risk management,
adequacy of internal control systems, quality, safety, health and environment standards, significant developments in
human resources, Environmental Management System and Renewable Energy Sector.

Further, details of Conservation of Energy, Technology Absorption and Upgradation, Foreign Exchange Earnings and
Outgo and Corporate Social Responsibility, are provided in the Board''s Report.

Memorandum of Understanding

IRCON has secured "Excellent" rating for FY 2023-24 from Department of Public Enterprises (DPE) based on performance
parameters laid down in MoU.

DPE will assess the performance of the company against the MoU targets set in the MoU 2024-25. Based on selfÂ¬
evaluation, IRCON has achieved followings against MoU targets set by DPE.

S. No.	Name of Parameter	Target (2024-25)	Achievement (2024-25)
1	Revenue from Operations (? crore)	14,386	10,759.58
2	CAPEX (? crore)	608	1,906.03
3	Export/ Income from Overseas (? crore)	582	339.10
4	EBITDA as a percentage of Revenue (%)	12.43%	11.46%
5	Return on Capital Employed (%)	15.30%	11.03%
6	Asset Turnover Ratio (%)	73.78%	57.02%
7	Acceptance/ Rejection of Invoices of Goods & Services through TReDS Portal within specified time:
i.	Onboarding of CPSE on all operating TReDS portals (Nos.)	-	4.00
ii.	Integration of CPSE''s Enterprise Resource Planning (ERP) or vendor invoice management (VIM) system with GeM portal (Yes/No)	Yes	No
iii.	Timely payment to MSE vendors within 45 days from the appointed day (Yes/No)	Yes	Yes
8	Procurement from GeM as per approved Procurement Plan	100%	138.95%
9	Trade Receivables as no. of days of Revenue from Operations	45	45.06

Final MoU performance evaluation will be done by DPE based on the DPE guidelines and pending as on date.

EXTERNAL ENVIORNMENT

MACROECONOMIC CONDITIONS

According to the International Monetary Fund (IMF) in its
World Economic Outlook (April 2025), global growth is
projected to drop to 2.8% in 2025 and 3% in 2026 much
below the historical (2000-19) average of 3.7%.

In emerging market and developing economies, growth
is expected to slow down to 3.7% in 2025 and 3.9%
in 2026, with significant downgrades for countries
affected most by recent trade measures. After a marked
slowdown in 2024, growth in emerging and developing
Asia is expected to decline further to 4.5% in 2025 and
4.6% in 2026.

For India, the growth outlook is relatively more stable
at 6.2% in 2025, supported by private consumption,
particularly in rural areas, but this rate is 0.3% point
lower than that in the January 2025, IMFs WEO Update
on account of higher levels of trade tensions and global
uncertainty. According to the International Monetary
Fund (IMF) in its Fiscal Monitor (April 2025), Indian fiscal
deficit reduced to 7.4% in 2024 from 7.9% in 2023, which
is further expected to go down 6.9% in 2026.

INFRASTRUCTURE & CONSTRUCTION INDUSTRY -
GOVERNMENT INITIATIVES & INDUSTRY OUTLOOK

Infrastructure is a foundational engine for India''s industrial
growth and national progress. In recognition of this, the
government has prioritized strengthening infrastructure

and construction through targeted policies like open FDI
norms, major budget allocations, and the Smart Cities
Mission. The Prime Minister has also launched the Gati
Shakti Master Plan, which aims to accelerate national
infrastructure by integrating various modes of transport.

India''s logistics market is estimated to be US$ 317.26
billion in 2024 and is expected to reach US$ 484.43 billion
by 2029, growing at a CAGR of 8.8%. The Ministry of
Commerce and Industry, states that the logistics sector
accounts for 5% of India''s GDP and provides jobs for
nearly 2.2 crore Indians. FDI rules have been significantly
liberalized in India and can provide foreign investors with
options aligned with their business goals. As per a report
of Morgan Stanley India''s infrastructure investment to
steadily increase from 5.3% of GDP in FY24 to 6.5% of
GDP by FY29.

In the Union Budget 2025-26, capital investment
outlay for infrastructure has been increased to ?11.21
lakh crore (US$ 128.64 billion), which would be 3.1% of
GDP. Infrastructure Finance Secretariat is established
to enhance opportunities for private investment in
infrastructure that will assist all stakeholders for more
private investment in infrastructure.

National Highways play a very important role in the
economic and social development of the country by
enabling efficient movement of freight and passengers
and improving access to the market. India has the second
largest road network in the world and its National Highways
expanded from 65,569 km in 2004 to a total length of
1,46,145 km in 2024, forming the primary arterial network
of the country. The Government of India has undertaken
several initiatives to enhance and strengthen the National
Highways network through flagship programmes such as
the Bharatmala Pariyojana which includes the subsumed
National Highway Development Project (NHDP), the
Special Accelerated Road Development Programme for
the North Eastern Region (SARDP-NE), and many more
ongoing projects.

In the Union Budget 2025-26, the government allocated
?2.87 lakh crore (US$ 32.94 billion) towards the Ministry
of Road with a target of ?35,000 crore (US$ 4.02 billion)
in private sector investment. A network of 35 Multimodal
Logistics Parks is planned to be developed as part of
Bharatmala Pariyojana, with a total investment of about
?46,000 crore (US$ 5.5 billion), which once operational,
shall be able to handle around 700 million metric tonnes
of cargo. Of this, MMLPs at 15 prioritized locations will
be developed with a total investment of about ?22,000
Crore (US$ 2.6 billion).

The Indian Railways have developed a comprehensive
National Rail Plan (NRP) for India - 2030 with the goal
of transforming the railway system into a ''future-ready''

infrastructure by the year 2030. The NRP is aimed to
formulate strategies based on both operational capacities
and commercial policy initiatives to increase modal share
of the Railways in freight to 45%. The objective of the
Plan is to create capacity ahead of demand, which in turn
would also cater to future growth in demand right up to
2050.

Indian Railways is exploring a new public-private
partnership (PPP) model to attract private investment to
re-develop railway stations. Under this model, investors
would receive up to 40% of the total project cost as
viability-gap funding (VGF) and be allowed to use the
space above platforms and tracks commercially. The
government announced 5,000 km of Metro rail network
by 2047 in 100 cities. The Government of India aims to
transform Indian Railways into a net-zero emitter as part
of its broader energy goals by 2030.

Under the Union Budget 2025-26, the government has
allocated record CAPEX of ?2,65,200 crore (US$ 31.43
billion) for Railways. Indian Railways will achieve 100%
electrification by FY26, with over 97% already completed,
and is rapidly adopting renewable energy.

Union Minister of Finance, Ms. Nirmala Sitharaman
announced plans to connect 120 new airports over
the next 10 years, benefiting four crore additional
passengers. In India, 158 Airports are operational and
with construction of 84 airports over the last decade,
India''s aviation network is rapidly evolving and over 1.36
crore people have already travelled till March 13, 2024.

India is surpassing climate targets with 100 Gigawatts
of solar, 47% non-fossil fuel power, and a 36% reduction
in emissions intensity. The country has immense growth
potential in renewable energy, especially in solar and
wind power, as it aims to achieve 500 gigawatts of
renewable energy capacity by 2030.

Ministry of New and Renewable Energy targets 500 GW
non-fossil fuel-based electricity generation by 2030, as
per the Prime Minister''s COP26 announcement. Power
generation from solar and wind projects are likely to be
cost-competitive relative to thermal power generation in
India in 2025-2030. India surpasses the global average
in setting and reducing carbon emission targets, ranking
among the top three countries worldwide for emission
reporting and reduction efforts. It has been estimated
that renewables will comprise 49% of India''s power
generation by 2040.

These efforts are crucial for boosting economic
growth, improving connectivity, and enhancing overall
development across various sectors. The integration
of different modes of transportation can certainly
lead to more efficient logistics and quicker project
implementation.

ORDER BOOK

The order book as on March 31, 2025, is ?20,346.65 Crore
as compared to ?27,208 Crore as on March 31, 2024. The
company has been facing some challenge in securing
new order due to stiff competition and margins. However,
given the growth in transportation Infrastructure Sector,
we expect the order book to grow going forward.

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.

ONGOING PROJECTS

A list of ongoing major projects in India is given at
Appendix-A.

In FY 2024-25, the focus of your Company has been
execution, faster deliveries and meeting stringent
timelines for overall optimal contribution to the much-
needed infrastructure growth. This is in line with the vision
of our Hon''ble Prime Minister and Hon''ble Minister of
Railways. During the FY 2024-25, IRCON has successfully
commissioned following domestic projects:

â¢ Dedicated Freight Corridor Project (Vaitarna-Sachin
Section of Western Dedicated Freight Corridor
Phase-2), Civil, Building and Track Works, Package-
CTP 12 in the state of Maharashtra & Gujarat, Route
Length-186 Km, NTC Track Laying-386 TKM- ?3,500
Crore.

â¢ In Kiul Gaya Doubling Project, in FY 2024-25 Waris
Aliganj- Nawada section (19.5 Km) commissioned
on 02.07.2024 and Nawada- Tilaiyya section (17 Km)
commissioned on 05.02.2025, with this Kiul Gaya
Doubling Project (122.80 Km) has been successfully
commissioned.

â¢ Replacement of Mechanical Signalling by EI at 20
stations of Moradabad Division of Northern Railway-
?241.34 Crore.

â¢ Railway Track (In-Plant) Package No. 50) for 3.0 MTPA
integrated steel plant at Nagarnar- ?52.95 Crore

Following were some of the achievements of on-going
major projects in India:

1. In connection with Mahanadi Coal Railway Limited,
Phase- I (Angul-Balaram section-14 Km) project, the
4 S&T work at Balaram yard has been commissioned on

07.09.2024 and handed over to East Coast Railway
for operation.

2. In Railway Electrification Projects, IRCON has
successfully completed 911 RKM including 12 Traction
Sub-stations along with 132 KV Transmission line
spanning 97 Km.

3. Signalling works of New Electronic Interlocking (EI)/
Alterations in EI or Route Relay Interlocking (RRI)
commissioned at 81 stations.

4. In Katni-Singrauli Doubling Project, Vijaysota -
Beohari section (30 Km) successfully commissioned
on 22.04.2024 and Joba-Marwasgram section (8 Km)
successfully commissioned on 07.10.2024.

5. In Katni Grade Separator Bypass Project, trial run
on Katni UP Grade Seperator between New Katangi
Khurd Station to New Majhgawan Phatak (16 Km)
successfully conducted on 31.03.2025.

6. In Akhaura-Agartala Rail Link Project, Nischintpur
Yard-Agartala section (4 Km) new line successfully
commissioned on 04.06.2024. With this
commissioning entire Indian portion of 5.50 Km
trans Bangladesh connectivity had been completed.
Integration of newly developed Nischintpur Yard near
Agartala Station in to the Indian Railway Network
successfully completed on 24.03.2025.

7. In USBRL Project, Basindadhar-Sangaldan section
(17 Km) new line successfully commissioned on
27.06.2024. With this commissioning entire scope
of IRCON in USBRL New Line project has been
completed.

8. Integrated Tunnel Communication works & VHF
Tunnel Radio Communication System commissioned
over 54 RKM & 108 Tunnel Km in USBRL Project, the
largest such Network over Indian Railway.

9. In Coal Rail Connectivity Project, Jharkhand,
Khurhagoda-Katkamsandi section (2.6 Km) new line
successfully commissioned on 25.03.2025

10. In Bhoj Morbe Expressway Project Package-XVII
of Vadodara Mumbai Expressway (VME) Project
breakthrough of the LHS Tube of the 4.16 Km long
twin-tube tunnel proposed in the project achieved
successfully. This achievement, completed in just 485
days, marks the fastest tunnel breakthrough within
the VME Projects.

11. In Mumbai Ahmedabad High Speed Rail, Package
MAHSR C-7 08 number Via duct crossings approx.
18.20 Km of total Via Duct''s length (One third of total)
has been successfully completed.

12. In Sivok-Rangpo New Rail Line project, breakthrough
of Tunnel T6 (3943 m) and Tunnel T4 (3948 m)
successfully achieved.

13. In Sivok-Rangpo New Rail Line project, launching of
2X69 Open Web Girder of Bridge No.6 successfully
completed. With this Girder launching of 7 out of
13 Major Bridges have been completed. Launching
of 3X76.20 m Open Web Girders having combined
weight of 985 MT, above 24 m from Ground level
on Trestles. With this launching, Girder erection
assembling of 8 Major Bridges completed in the
project.

14. In Solar Project, 150 MW Solar Power commissioned
(out of 500 MW Solar Power Plant) at Pavagada,
Karnataka.

15. In Chennai Metro Rail Project, successful trial run of
the priority section of Phase-II of the project had
been conducted between Poonamallee depot and
Mulliathotam station.

INTERNATIONAL PROJECTS

In FY 2024-25, the contribution of international projects
to the total revenue amounted to ?339.10 Crore, which
accounts for 3.33 % of the operating turnover. This is
in comparison to ?574.82 Crore in FY 2023-24, which
represented 4.81% of the operating turnover.

ONGOING PROJECTS

The Company is executing the following projects in
foreign countries:

i. Bangladesh

The Company had signed an Agreement with
Ministry of External Affairs (MEA), Government of
India 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. The construction contractor for
the project is appointed by Bangladesh Railways for
a contract value of BDT 240.9 Crore (equivalent to
approx. ?209.47 Crore). The work stands completed
as on 30^th June 2024 and is currently under DLP upto
30^th June 2025. The Trial run was conducted on 30^thOctober, 2023 and Project was inaugurated by Prime
Ministers of both countries on 1^st November, 2023.

ii. Algeria

The project was awarded by ANESRIF, the National
Agency for the Planning and Implementation of
Railway Investments, Ministry of public works and
investments, 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 the existing lines,
with a diversion of 10 km for the Relizane city, from
the station Oued sly to the station Yellel in Algiers-

Oran section of Algerian Railways. The value of
the contract, including additional works for the
construction of the double line, has been revised
to Algerian Dinar 3,241 Crore (equivalent to approx.
?2,395 Crore).

Installation of 214 Km of track (out of the total 218
Km) has been completed.Balance 4 km is pending on
account of hindrances to be cleared by the client ..
Work on the existing line has also been started and
a total stretch of 74.8 km out of 75 km of the existing
line, 6 out of 7 station buildings are completed in
all respects, and all the 10 major rail bridges in the
project have also been completed. The project is
expected to be completed by December 2025.

iii. Sri Lanka

(a) Upgradation of Railway Line from Maho Omanthai
under Indian Line of Credit - Track Rehabilitation
and ancillary works.

The Project was awarded on 29^th April 2019 by Sri
Lankan Railways, under the Ministry of Transport
and Civil Aviation, Government of Sri Lanka, with
a project value of US$ 91.27 million (approximately
?637.22 Crore) through competitive bidding with a
completion period of 36 months, starting from the
receipt of the advance payment on 29^th November
2019. The project is financed by Exim Bank of
India under the Indian Line of Credit. The contract
completion date is set for 28^th November 2022.
However, the project experienced delays due to the
Covid-19 pandemic, subsequent economic crises,
political unrest, and protests in Sri Lanka.

The Project involves Upgradation of 128 Km BG
railway line, in a Mega Traffic block in two phases,
provided by the Sri Lanka Railways.

In the first phase, Upgradation of Anuradhapura to
Omanthai section (63.0 KM) commenced in January
2023, and was completed and commissioned in July

2023. In the second phase, Upgradation of Maho to
Anuradhapura (65 Km) began in January, 2024, and
was completed and commissioned in September

2024. Finishing works are in progress.

Despite numerous challenges, including economic
and fuel crises in Sri Lanka and unusual rainfall,
IRCON successfully completed and commissioned
the railway line from Maho to Omanthai within the
allotted traffic blocks, maintaining exceptional
quality and safety standards.

The upgradation will provide a safer, more
comfortable, and reliable journey. The upgraded
track will contribute to the modernization of Sri
Lanka Railways, reduce travel time, boost tourism,
and strengthen Indo-Sri Lankan relations.

The Maho-Omanthai Railway Line was ceremonially
inaugurated on 6^th April 2025 by Hon''ble Prime
Minister of India Shri Narendra Modi, and His
Excellency Shri Anura Kumara Dissanayake, President
of the Democratic Socialist Republic of Sri Lanka.

(b) Procurement of Design, Installation. Testing,
commissioning, and certifying of Signaling and
Telecommunication system from Maho Junction
(Including) to Anuradhapura (Excluding) under
Indian Line of Credit:

This project was awarded on 4^th December 2022 by
Sri Lankan Railways, under the Ministry of Transport
and Civil Aviation, Government of Sri Lanka, with a
project value of US$ 14.90 million (approximately
?121.25 Crore) through competitive bidding. The
contract agreement was signed on 21^st September
2023. The completion period is 12 months from the
receipt of the mobilization advance, with a defect
liability period of 12 months and a warranty period
of 36 months. The project will be implemented with
grant assistance from India.

The scope of work includes the supply, installation,
and commissioning of an electronic interlocking
system at seven stations, along with singleÂ¬
line automatic block signaling for the Maho to
Anuradhapura railway line. Additionally, it includes
the construction of equipment rooms at seven
stations and gate hut buildings at 20 locations.

The new advanced signaling system will enhance
safety, reliability, line capacity, and simultaneous
reception, minimizing train delays and reducing
travel time.

The project was ceremonially launched on 6^thApril 2025 by Hon''ble Prime Minister of India Shri
Narendra Modi, and His Excellency Shri Anura Kumara
Dissanayake, President of the Democratic Socialist
Republic of Sri Lanka.

iv. Nepal

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

(a) Construction of Broad Gauge (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 Biratnagar
(Nepal), Ch. 18.60 Km. 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 proposed alignment in Nepal portion
(13.15 Km) falls in Morang district of Nepal.

The revised value of contract of ?484.59 Crore is
under approval of the Ministry of External Affairs.

The section from Bathnaha (India) Ch. 0.00 Km to
Nepal Custom Yard (Nepal) Ch. 6.70 Km has been
commissioned for freight traffic on 1^st June, 2023. The
work is in progress in the remaining portion.

The overall progress of the project is approximately
86%.

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

The project involves construction of a new BG rail
line from Jaynagar (India), Ch. 0.00 Km to Bijalpura
(Nepal) Ch. Km 52.336 with extension up to Bardibas,
Ch. Km 68.72. Out of the total proposed alignment,
2.975 Km falls in Madhubani district of Bihar state
in India and 65.745 Km falls in Mahottari district of
Nepal.

The revised estimate of ?907.59 Crore is under
approval of the Ministry of External Affairs.

Section-2 from Km 34.900 to km 52.34, Kurtha-
Bijalpura has also been completed and commissioned
on 16^th July 2023. In Section-3 from Km 52.34 to Km
68.72, Bijalpura-Bardibas, hindrance free land yet to
be handed over by the Government of Nepal. The
overall progress of the project is approximately 74%.

v. Myanmar

The Company has secured a project in Myanmar
in FY 2022-23, 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 ?1,780 Crore. Construction of this
project is intended to open up an alternate route to
the North-East Region and connect Mizoram with
Chin State of Myanmar at Zorinpui. The agreement
for the execution of this project has been signed on
7^th March, 2022 and the project is to be completed
within 40 months from the date of the signing of the
agreement.

During FY 2024-25, work recommenced on a 90 Km
stretch (50 Km from Paletwa end (Myanmar) & 40 Km
from Zorinpui end (India-Myanmar Border).

Due to ongoing armed conflicts between Myanmar
Army and Insurgent groups,the whole alignment
is controlled by one of the insurgent groups. The
progress of work is adversely affected. At present,
there is no permission to work from GOM and
transportation of construction materials such as
cement, steel, cement etc. and machinery from
GOM. The work is being progressed from Zorinpui
side through proper liaisoning with all the stake
holders. The entire stretch of 109 km length has been
connected with a single lane pathway/carriageway
passing through dense forest.

Inspite of adversity, Ircon has shown great resilience
and commitment to continue with the work. Overall
progress of the project is 15%.

COMPANIES, JOINT VENTURE COMPANIES AND
ASSOCIATE COMPANIES

A brief background on the eleven subsidiary companies
and seven joint ventures companies of IRCON along with
their financials and performance is given at Appendix-B.

In terms of the Company''s Policy on the determining the
"Material Subsidiary" and provisions of LODR Regulations,
for the financial year ending March 31, 2025, none of the
subsidiary company is a ''material subsidiary'' i.e. whose
turnover or net worth exceeds 10% of consolidated
turnover or net worth respectively, of IRCON and its
subsidiaries in the immediately preceding financial year
i.e. March 31, 2024.

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: Pledge by all employees to
work in Hindi completely on last Monday of every month.

A. Rajbhasha Sanghosthi, Hindi Pakhwada is being
conducted on a yearly basis in Corporate Office.

B. Birthdays of employees are displayed on the
plasma screen at the reception area as a gesture of
appreciation and encouragement.

Regular quarterly meetings of Official Language
Implementation Committee and quarterly workshops for
effective use of the Hindi Technical system and official

language are being conducted. Under the auspices of
NARAKAS, competitions are organized by IRCON every
year. Every year, the IRCON corporate office organizes
Hindi competitions for the children and family members
of the employees. 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 IRCON''s internal website for use
by the employees.

COMPLIANCE OF RIGHT TO INFORMATION ACT, 2005

In accordance with the provisions of the Right to
Information Act, 2005, IRCON has ensured the availability
of updated information, including the names of the
Appellate Authority, Central Public Information Officer,
Assistant Public Information Officer and Zonal Public
Information Officers on our website. We have promptly
responded to the queries received within the specified
time frame. These queries primarily pertained to service
matters, recruitments, finance, contract, corporate social
responsibility (CSR) and projects. The details of RTI
cases have been regularly published on website of the
Central Information Commission (CIC) on quarterly and
annual basis.

During the year 2024-25, 143 applications and 29 first
appeals were received and at the beginning of the year
08 applications and 05 appeals were under process for
disposal within the allowable time limit (i.e. total 151
applications and 34 appeals during the year). Out of
which, 142 applications (including opening balance of
08 applications) and 26 First Appeals were disposed
of. As on 31.03.2025, 09 applications and 03 appeals
were under process for disposal within the allowable
time limit.

COMPLIANCE OF IMPLEMENTATION OF PUBLIC
PROCUREMENT POLICIES FOR MSEs AND PREFERENCE
TO MAKE IN INDIA

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) Amendment Order, 2022 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.

The Company has always encouraged local suppliers to
participate in its tendering process and also promote
them through training and hand holding programs. Our

continued pursuit in this direction has seen improved
participation of small local players and socio-economic
development of communities in and around operational
locations.

IRCON has taken several steps for effective implementation
of MSE policy in the tender documents for procurement
of goods & services. The benefits include waiver of tender
document fee and earnest money deposit and also
includes the purchase preference policy as prescribed
under the Public Procurement Policy for Micro and Small
Enterprises (MSEs) Amendment Order, 2022.

The Company has been extensively following the
guidelines of Government on procurement through
Government e-Market place (GeM) and provisions are also
made in tenders to promote "Make in India" directives
of the Government of India by giving preference to the
Class-I Local suppliers & calling of tenders upto ?200
Crore through National Competitive Bidding in line with
the Public Procurement (Preference to Make in India),
Order 2017.

During the FY 2024-25, the Company has procured items
valuing ?31.34 Crore from MSE vendors against expenditure
valuing ?118.01 Crore (excluding the procurement of items
which are beyond the scope of MSEs) towards material,
stores & service, thereby achieving 26.56% procurement
from MSEs against the compliance requirement of 25% as
per the procurement policy.

The Company has conducted four Vendor Development
Programs during FY 2024-25. Details are as under-

1. "National Level - Special Vendor Development

Program" for Micro and Small Enterprises especially
owned by SC/ST and Women entrepreneurs

organized in IRCON Corporate Office on 12.12.2024.

2. National Level Special Vendor Development Program
(VDP) in association with EEPC India on 21.06.2024
through online VC mode.

3. National Level - Special Vendor Development

Program" for Micro and Small Enterprises especially
owned by SC/ST and Women entrepreneurs

organized in IRCON Corporate Office on 11.03.2025.

4. Two days Vendor Development Programme cum
industrial Exhibition at Lloyd Institute of Engineering,
Greater Noida, Uttar Pradesh on 19^th and 20^th March
2025 organised by Ministry of MSME, MSME D.F.O,
Okhla, New Delhi in association with IRCON.

In compliance with the Micro, Small and Medium
Enterprise Development Act, 2006, the Company has on-
boarded with all the 4 nos. Trade Receivables Discounting
System (TReDS) platform authorized by RBI, w.e.f. January
25, 2018, to facilitate the financing of trade receivables of
MSEs by discounting of their receivables and realization
O

of their payment before the due date. A clause in General
Conditions of Contract is incorporated for MSEs vendors
willing to avail the facility.

HUMAN RESOURCE DEVELOPMENT

IRCON recognizes that its employees are fundamental
to its success and play a crucial role in safeguarding the
organization''s values and culture. The organization firmly
believes that its achievements rely on the alignment and
performance of its workforce, as well as maintaining a
positive work environment. It is committed to establishing
a collaborative, inclusive, and performance-driven
atmosphere that fosters learning, growth, and overall
employee well-being.

IRCON''s Human Resource (HR) Philosophy revolves
around empowering and nurturing employees, allowing
them to reach their full potential, encouraging innovative
ideas, and providing rewards based on performance. The
company''s work culture is characterized by openness
and dynamism, empowering employees to take initiative
in their roles with full support from top management.

At IRCON, the Human Resource Management (HRM) team
is dedicated to recruiting, retaining, and developing
the right people. They continuously strive to create an
optimal work environment that is inclusive, open, diverse,
and provides equal opportunities for all employees.
The company has aligned its HR strategy, systems, and
procedures with its business objectives, focusing on
building competencies necessary for organizational
success. This strategy serves as a motivating force for
employees, bridging the gap between the company''s
future needs and individual aspirations.

IRCON maintains a performance-oriented culture where
the contributions of every employee are measured
and appropriately recognized. The Company has
implemented a robust Performance Management System
(PMS) that aligns with its philosophy of rewarding and
acknowledging merit at all levels. This system supports
the professional development of executives through
a structured approach integrated into the company''s
performance appraisal process. IRCON takes pride in its
highly motivated and competent human resources and
acknowledges their significant contributions.

MANPOWER STRENGTH

The total manpower strength of IRCON as on March 31,
2025, stood at 1182, (previous year 1270) which included
834 regular employees, 27 employees on deputation,
317 on contract (including service contract) and 04
on fixed tenure basis. Out of the total employees of
the Company, 1140 are posted on Indian projects and
42 on international projects. Among 1182 employees,
1017 are technically and professionally qualified.

There was a total of 55 women employees as on
March 31, 2025.

The overall income per employee for FY 2024-25
stood at ?9.03 Crore as compare to ?9.75 Crore in
FY 2023-24.

During the year, the total newly employed personnel
stood at 109 which included 42 regular employees, 4
employees on deputation, and 63 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 492 SC / ST / OBC and differently- abled
employees as on March 31, 2025.

Further, during the FY 2024-25, out of the 42 employees
inducted against regular posts, 24 belong to SC / ST /
OBC/ EWS. Similarly, out of the 63 employees recruited
against the contractual positions (including service
contract), 19 belong to SC / ST / OBC / EWS (excluding
service contract).

During the FY 2024-25, training has been given to 595
employees, out of which 238 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 2024Â¬
25, in-house training programmes across all levels of
employees were organised. Professional programmes,
workshops, 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.

development plans have been initiated from time to time.
During the FY 2024-25, a total 1998 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, postÂ¬
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. IRCON is complying with provisions relating to
the Maternity Benefit Act, 1961.

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

Your Company is dedicated to creating a supportive and
secure working environment for its women employees.
The Company has implemented a comprehensive policy
for the Prevention, Prohibition, and Redressal of Sexual
Harassment at the Workplace, which applies to all
employees, including regular employees, deputationists,
temporary workers, ad-hoc employees, contract
workers, daily wage workers, and individuals employed
through agencies or contractors. This policy, along with
its details, can be accessed on the Company''s website.
Furthermore, this policy extends to wholly-owned
subsidiary companies of IRCON that are formed as Special
Purpose Vehicles.

IRCON has complied with provisions relating to the
constitution of Internal Complaints Committee under the
Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013. Further, the desired
details are as follows:

(a) number of complaints of sexual

harassment received in the year - 0

(b) number of complaints disposed

off during the year - 0

than ninety days - 0

CORPORATE SOCIAL RESPONSIBILITY AND
SUSTAINABILITY

In accordance with Section 135 of the Companies Act,
2013 and The Companies (Corporate Social Responsibility
Policy) Amendment Rules 2021, IRCON has updated its
CSR Policy duly approved by the Board of Directors
of IRCON. CSR is essentially a way of conducting
business responsibly and IRCON shall endeavor to
conduct its business operations and activities in a
socially responsible and sustainable manner at all times.
IRCON will strive to contribute to inclusive growth and
sustainable development with emphasis on development
of weaker sections of society and in the Aspirational
Districts of the country. As per broad objectives of
the Policy, CSR activities are being implemented in
project/ program mode, in areas or subjects specified in
Schedule VII of the Act, on thrust areas of education and
health care, in the periphery of project areas of IRCON
(local area).

In accordance with the guidelines issued by the
Department of Public Enterprises (DPE) through their
Office Memorandum dated December 10, 2018, along
with the update on March 15, 2024, CPSEs (Central Public
Sector Enterprises) are required to follow a theme-based
approach for their CSR activities. The Company allocates
a minimum of 60% of their annual CSR budget for thematic
programs and give preference to the Aspirational districts
in their CSR initiatives. For the FY 2024-25, by adhering
to these guidelines and embracing the chosen theme, we
are actively working towards making a positive difference
in society and contributing to the well-being of our
communities.

Throughout the year, we implemented numerous CSR
projects across 15 aspirational districts as listed by
NITI Aayog. These initiatives included the provision of
ambulances at the village level, the installation of drinking
water machines and solar power plants in schools and
other community spaces, and the execution of a TechnoÂ¬
Entrepreneurship Training Program for underprivileged
students. Furthermore, we supported organic farming,
provided skill development training in areas such as web
designing, digital marketing, and beauty and wellness to
underprivileged girls, contributed to awareness about

cleanliness of the Yamuna River, and offered self-defense
training and wheelchair distribution.

In the FY 2024-25, Company has spent ?14.15 Crore
against the Allocated CSR Budget of ?14.13 Crore. During
the year, the Company provided nutritional supplements
for the development of Anganwadi centers, conducted
cervical cancer screenings and nutritional and eye checkÂ¬
up camps with the distribution of spectacles, offered
OPD services and free cataract surgeries, and organized
numerous medical camps.

The CSR Policy, which provides comprehensive
guidelines for conducting CSR activities, is available on
our Company''s website: www.ircon.org. Furthermore,
the Annual Report on CSR & Sustainability activities, in
compliance with Section 135 of the Companies Act, 2013,
and the Companies (Corporate Social Responsibility
Policy) Rules, 2014 is appended to this report, forming an
integral part of it.

QUALITY, HEALTH AND SAFETY

QUALITY MANAGEMENT SYSTEM

IRCON is a precursor Public Sector Organization in
adopting the Quality 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 first certified for ISO 9002:1994
by TUV SUD Private Limited. IRCON has 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 surveillance audit was
conducted by TUV SUD South Asia Private Limited in the
month of January, 2025, and the validity of the certificate
is up to March, 2026.

OCCUPATIONAL HEALTH AND SAFETY
MANAGEMENT SYSTEM

The Company established an Occupational Health &
Safety Management System and was certified for ISO
45001:2004 in October, 2011. The latest Re-certification
audit for ISO 45001:2018 was conducted by TUV SUD
South Asia Private Limited in the month of October, 2024
and the validity of the certificate is up to December, 2027.

ENVIRONMENT MANAGEMENT

The Company established an Environment Management
System (EMS) and was certified for ISO 14001:2004
in October, 2011. The latest surveillance audit for ISO
14001:2015 was conducted by TUV SUD South Asia Private
Limited in the month of October 2024, and validity of the
certificate is up to February 2026.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND UPGRADATION

IRCON is conscious of the limited nature of conventional
sources and the importance of using 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 affect the ecology and environment. Towards
conservation of energy, IRCON has taken the following
steps:

a) IRCON has a total of 200 kW Grid Connected roof
top Solar Power Plant installed at Corporate Office
which is a considerable step to conserve energy and
contributing to environment through usage of Green
Energy. The total energy produced by this Solar
Power plant shall be approximately 3,00,000 units
annually which is ~25% of the energy being drawn
from the electrical grid. IRCON has also installed a
total of 75 kW Roof top Off Grid Solar Power Plant
at its IRCON Tower, Gurugram thereby reducing
energy consumption. Also, capacitor banks of 600
kVAR capacity have been installed at Corporate
Office building and 1600 kVAR at IRCON''s Gurugram
Building to improve the power factor, which further
reduces the Electrical Energy consumption by more
than 10%.

b) Furthermore, energy-efficient Light Emitting Diodes
(LED) lights have been used for the internal lighting
of Corporate Office building which also adds in
considerable energy saving when compared with
normal lights.

c) Automatic / Dynamic Reactive Power Factor (APF)
correction / compensation panels with Insulated
Gate Bipolar Transistors (IGBT) technology of ~10.7
MVAR capacity have been designed and 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. Further, Static Var
Generators (SVGs) of~135 MVAR capacities are also
being installed in 500 MW Solar Project at Karnataka
to provide dynamic reactive power compensation,
thereby maintaining power factor & system stability
and improving power quality injection into grid.

d) IRCON has installed more than 20,000 LED lights
at USBRL E&M Tunnel Projects which have reduced
the energy consumption considerably. Moreover,
IRCON has also installed energy efficient LED lights
for energy conservation in various projects like Loco
Shed at Bondamunda, Katni-Singrauli RE Project, etc.
for reducing energy consumption.

e) Capacitor Banks of 2400 kVAR capacity each have
been installed at Baramulla, Qazigund & Budgam TSS
(J&K) for USBRL RE project. Further, Capacitor Banks
of 5500 kVAR capacity each have been installed in 12
Nos. TSS of various Railway Electrification projects.
Moreover, for Tunnel Substations a total of 16 MVAR
capacitor banks have also been installed to regulate
the reactive power generation due to jet fans,
thereby reducing energy consumption.

STEPS TAKEN BY THE COMPANY FOR UTILISING
ALTERNATE SOURCES OF ENERGY

The Company is utilizing the following as an alternate
source of energy:

a) Apart from installation of 200kW Roof top Solar Plant
at IRCON''s Corporate office, IRCON is also executing
a major project for utilizing alternate sources of
energy by Setting up a 500 MW Solar Photovoltaic
Power Plant at Pavagada, Karnataka by using latest
technology Monocrystalline Passivated Emitter and
Rear Cell (PERC) Bi-facial Solar Photo Voltaic (SPV)
Modules with Tracker technology & state-of-the art
Robotic Cleaning which shall supply approximately
1,076 million Units per year to Railways.

b) IRCON is also providing features similar to Green
Buildings Constructions at Corporate Office,
Gurugram building and its project offices thereby
reducing the environmental impacts on water,
materials, waste, energy and carbon emissions.
IRCON has installed solar panels at various offices/
projects; along with sensor lights & sensor taps to
conserve electricity.

c) 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 has invested approximately ?4.00 Crore for
replacing the existing Heating, Ventilation & Air Condition
(HVAC) System at Corporate office with new technology
Energy Efficient Inverter Type Air Conditioning System
which shall reduce the energy consumption by 25-30%.

Further, the old refrigerant of R-22 is replaced by the
new technology refrigerant R-410A which is environment
friendly and reduces the carbon emissions helpful in
sustainable development.

TECHNOLOGY ABSORPTION AND UPGRADATION
EFFORTS MADE TOWARDS TECHNOLOGY
ABSORPTION

The company has developed critical machineries,
required for National High Speed Rail Project from

Ahmadabad to Mumbai, under Make-in-India program by
guiding Indian Manufacturer''s on the technical design and
specific functional requirement of the track machines.
These machines include Rail Feeder Car, Track Slab Laying
Car, CAM Injection Car, Track motor Car, Trolley Wagons,
Flash Butt Welding Machine, etc. These machines are
specially developed in the same line as that of Japanese
technological requirements.

In addition to above, State of the Art Factory for
manufacturing J-slabs for ballastless track has also been
set up for High-Speed Railway Track, being executed with
Shinkansen Technology. Regression analysis of Reference
PIN survey is being done indigenously which was earlier
planned to be done by Japanese firm M/s Kaneko. Many
components for the High Speed Track, such as, Reference
PIN, CAM bags, Synthetic Resin Pads, adjustable pads,
Insert C & D for J-slabs, have been developed indigenously
reducing dependence on imported component and
saving in foreign exchange.

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

In this endeavor, IRCON has not only developed Indian
manufacturers at par with Japanese design but also saved
a significant cost to IRCON (more than ?100 Crore) by
getting these track machineries manufactured in India
instead of procuring these machines from Japan. Apart
from this, regression analysis of reference pin survey by
Indian firm will also approx. ?30 Crore.

IN CASE OF IMPORTED TECHNOLOGY (IMPORTED
DURING THE LAST THREE YEARS RECKONED FROM
THE BEGINNING OF THE FINANCIAL YEAR) - N.A.

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, ERP &
CYBERSECURITY

IRCON''s Information Technology (IT) department serves
as a cornerstone for both operational efficiency and
strategic growth. Acting as a key enabler, the IT function
significantly boosts employee productivity across the
organization. In addition to managing data networks,
enterprise software, and IT infrastructure procurement,
the team plays a pivotal role in driving enterprise-wide
initiativesâsuch as the implementation of SAP S/4HANA,

Toll Management Systems, and Project Management
platforms etc.

A key highlight of our digital journey is the adoption
of SAP S/4HANA as our Enterprise Resource Planning
(ERP) backbone. This robust system streamlines our
Finance, Controlling, and Human Resource Management
operations, leading to company-wide information
availability, increased transparency, and faster decisionÂ¬
making. We''ve further enhanced our financial reporting
with SAP Business Objects (SAP BO), an analytical tool
that provides automated, on-demand reports by fetching
real-time data from SAP, which is crucial for preparing
the Company''s financial statements. The Employee SelfÂ¬
Service Portal, Finance, and HCM modules have been
successfully rolled out across the entire organization,
with Project Systems currently under implementation at
various locations.

In a significant move towards a paperless environment,
we''ve fully embraced the e-Office system. This initiative
aligns with the Government of India''s vision, digitizing
approvals, file movements, and official documents,
thereby replacing physical file systems with enhanced
efficiency and security.

The IT team oversees the implementation, operation, and
management of Highway Traffic Management Systems
(HTMS), Toll Management Systems (TMS), and Weigh-in-
Motion systems across our major highway projects. These
systems are critical to ensuring the seamless operation of
our highway infrastructure.

To ensure our core enterprise applications like e-Office
run seamlessly, we''ve recently upgraded our data
center infrastructure, incorporating cutting-edge HCI
(Hyper-Converged Infrastructure) systems. This not only
guarantees faster, more efficient, and secure use of these
applications but also optimizes connectivity throughout
our corporate office and project sites, maximizing our
in-house IT talent. We''ve also installed AI face-reader-
based biometric attendance systems and are integrating
them with SAP for more accurate pur reporting. For
enhanced efficiency and transparency in procurement,
e-Procurement through the Government e-Market Place
(GeM) and Central Public Procurement (CPP) Portal has
been adopted across the organization.

Recognizing the evolving threat landscape, Cybersecurity
remains a top priority. We''ve implemented a cloud-
based Web Application Firewall (WAF) system to secure
our company websites and web applications against
potential cyber-attacks. We also regularly conduct
employee training in AI, Cybersecurity, and core
business domains to keep our workforce informed
and skilled.

Our dedicated Al-based video conferencing facility
is extensively used for critical operations like review
meetings with project offices, training sessions,
promotion interviews, and managing contract issues,
ensuring effective remote collaboration.

CORPORATE GOVERNANCE

The Company places great emphasis on adhering to
corporate governance guidelines and best practices,
recognizing their significance in enhancing long-term
shareholder value and upholding minority rights. It
considers it a fundamental obligation to provide timely
and accurate information regarding the Company''s
operations, performance, leadership, and governance.

In compliance with Regulation 34 of the LODR Regulations
and DPE Guidelines on Corporate Governance for
Central Public Sector Enterprises issued in May 2010, the
Corporate Governance Report, along with the compliance
certificates of Corporate Governance norms under the
aforementioned LODR Regulations and DPE Guidelines,
is attached and constitutes an integral part of this report.

BOARD OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL

As on March 31, 2025, the Company had six directors
out of which four are whole-time directors [Chairman &
Managing Director, Director (Finance), Director (Works)
and Director (Projects)] and two are Government
Nominee Directors.

The Company has requested the Ministry of Railways for
appointment of requisite number of Independent Directors
in order to comply with the statutory requirements.
Pursuant to Section 203 of the Companies Act, 2013, the
Board of Directors had designated Chairman & Managing
Director (CMD) as 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 designated as
Chief Financial Officer (CFO) and KMP.

Board Of Directors & Key Managerial Personnel
(KMP) as on March 31, 2025

The Board of Directors of the Company as on March 31,
2025 were Executive (Functional) Directors viz.- Shri Hari
Mohan Gupta (DIN: 08453476), Chairman & Managing
Director & CEO, Smt. Ragini Advani (DIN: 09575213),
Director (Finance), Shri Parag Verma (DIN: 05272169),
Director (Works), Shri Anand Kumar Singh (DIN: 07918656),
Director (Projects); Part- time (Official) Directors viz. Shri
Anand Bhatia (DIN: 10937265) and Shri Anupum Singh,
(DIN: 10637375), being Government Nominee Directors.

In addition to the CEO and whole-time directors, other

KMPs, as on March 31, 2025 were Shri Alin Roy Choudhury,
Chief General Manager (Finance) & CFO and Smt. Pratibha
Aggarwal, Company Secretary.

Appointments and cessation of the Directors and
KMPs during and after close of the FY 2024-25

CHANGES IN THE POST OF CHAIRMAN & MANAGING
DIRECTOR

In terms of order no. 2023/E(O)II/40/15 dated 1^st July,
2024 of the Ministry of Railways, Shri Hari Mohan Gupta
(DIN: 08453476) was appointed as the Chairman and
Managing Director (Additional Director) of the Company
from the date of his assumption of charge of the post
and till the date of his superannuation i.e. 30.06.2026 or
until further orders, whichever is earliest. Shri Hari Mohan
Gupta has assumed the charge of the post of CMD with
effect from 1^st July 2024. Further, Shri Hari Mohan Gupta
was regularised as the Chairman and Managing Director
at the last Annual General Meeting of the Company held
on 12^th September 2024.

In terms of order No. 2020/E(O)II//40/2 dated 26^th April,

2024 of the Ministry of Railways, Shri Ashish Bansal, IRSE,
PED/Tr. (M&MC), Railway Board [DIN: 10328174] has
been entrusted with the additional charge of the post
of Chairman & Managing Director, IRCON in addition to
his own duties w.e.f. 29^th April, 2024, till the appointment
of regular incumbent to the post or until further
orders, whichever is earlier. Consequently, Shri Brijesh
Kumar Gupta, Additional Member (CE), Railway Board
[DIN: 10092756] has relinquished the additional charge of
the post of Chairman & Managing Director, IRCON w.e.f.
29^th April, 2024 and pursuant to Order No.2022/PL/57/10
dated 16^th March, 2023 of the Ministry of Railways, Shri
Brijesh Kumar Gupta, Additional Member (CE), Railway
Board [DIN:10092756] has been re-designated as
Government Nominee (Part-Time Official) Director of the
Company, w.e.f. 29^th April, 2024.

CHANGES IN THE POSTOF FUNCTIONAL DIRECTORS

Shri Parag Verma (DIN: 05272169), ceased to be Director
(Works) with effect from 30^th April 2025, upon attaining
the age of superannuation.

In terms of order no. 2021/E(O)II/40/23 dated 7^th May,

2025 of the Ministry of Railways, Shri Naresh Chandra
Karmali (DIN: 09103211), IRSE, PED/GS, Railway Board,
entrusted with the additional charge of the post of
Director (Works) (Additional Director), IRCON, in addition
to his own, with effect from the date of assumption of
charge and until further orders. Further, Shri Karmali
has assumed the charge of the post of Director (Works)
with effect from 9^th May, 2025. Accordingly, as per
further order of Ministry of Railways no. 2024/E(O)

11/40/4 dated 15^th May 2025, Shri Naresh Chandra
Karmali, has relinquished the additional charge of
the post of Director (Works), IRCON with effect from
15^th May 2025.

In terms of order no. 2024/E(O)ll/40/4 dated 15^th May
2025 of Ministry of Railways, Shri Ajit Kumar Mishra (DIN:
11108237), has been appointed to the post of Director
(Works) (Additional Director) for a period of 5 years
from the date of assumption of charge of the post or
until further orders, whichever is earlier. Shri Mishra has
assumed the charge of the post of Director (Works)
with effect from 15^th May 2025. Shri Ajit Kumar Mishra is
proposed to be regularized as Director (Works) of the
Company at the ensuing Annual General Meeting of
the Company.

CHANGES IN THE POST OF PART-TIME (OFFICIAL)
DIRECTOR/GOVERNMENT NOMINEE DIRECTOR

In terms of order no. 2022/PL/57/10 dated 6^th November,
2024 of Ministry of Railways, Shri Anupum Singh
(DIN: 10637375), ED CE (B&S)-II, Railway Board, has been
appointed as Government Nominee (Part-Time Official)
Director (Additional Director) of the Company with effect
from 6^th November, 2024, till he hold the post of ED CE
(B&S)-II, Railway Board or further orders, whichever is
earlier. Shri Anupum Singh is proposed to be regularized
at the ensuing Annual General Meeting of the Company.

Shri Dhananjaya Singh (DIN: 08955500), ED/GS (Civil)-II,
Railway Board, ceased to be Government Nominee (PartÂ¬
Time Official) Director of the Company with effect from 6^thNovember 2024, in terms of order of Ministry of Railways.

Shri Brijesh Kumar Gupta (DIN: 10092756), Additional
Member (CE), Railway Board ceased to be Government
Nominee (Part-Time Official) Director of the Company
with effect from 31^st December 2024, upon attaining the
age of superannuation.

In terms of order no. 2022/PL/51/10 dated 28^thJanuary, 2025 of Ministry of Railways, Shri Anand Bhatia
[DIN: 10937265], Addl. Member (CE), Railway Board has
been appointed as Government Nominee (Part-Time
Official) Director (Additional Director) of the Company
with effect from 4^th February, 2025 till he holds the post
of Addl. Member (CE), Railway Board or further orders,
whichever is earlier. Shri Anand Bhatia is proposed to be
regularized at the ensuing Annual General Meeting of the
Company.

CHANGES IN INDEPENDENT DIRECTORS

Shri Dipendra Kumar Gupta [DIN: 09398271], Shri Ajay
Kumar Chauhan [DIN: 09394953] and Smt. Ranjana
Upadhyay [DIN: 07787711], were ceased to be Independent
[Part-time (Non-official)] Directors of the Company upon

on December 28, 2024.

In terms of order no. 2024/PL/57/38 Pt-1 dated 13^th May,
2025 of Ministry of Railways, Shri Thangavel Varadharajan
(DIN: 08556664) has been appointed as an Independent
[Part-time (Non-official)] Director (Additional Director) on
the Board of the Company for a period of three (3) years
with immediate effect or until further orders, whichever is
earlier. The appointment of Shri Thangavel Varadharajan is
effective from 15.05.2025 i.e. date of registration of name
to the Data Bank of Independent Directors maintained
with Indian Institute of Corporate Affairs (IICA). Shri
Thangavel Varadharajan, is proposed to be regularized at
the ensuing Annual General Meeting of the Company.

CHANGES IN THE KMPs

During the financial year 2024-25, Shri Mugunthan Boju
Gowda, Chief Financial Officer & KMP, IRCON, ceased to
be a Chief Financial Officer and Key Managerial Personnel
of the Company w.e.f. December 31, 2024, due to his
repatriation to the Ministry of Railways. The Board of
Directors of the Company had appointed Shri Alin Roy
Choudhury, Chief General Manager (Finance) as Chief
Financial Officer and Key Managerial Personnel of IRCON
w.e.f. January 01, 2025.

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 Independent Directors that they meet 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 LODR Regulations and that they have registered
themselves with the databank of Independent Directors
maintained by the Indian Institute of Corporate Affairs
under the Ministry of Corporate Affairs as per Rule 6 of
Companies (Appointment and Qualification of Directors)
Rules, 2014. The declarations have been noted by the
Board of Directors.

RETIREMENT OF DIRECTORS BY ROTATION

2013, Shri Anand Kumar Singh, Director (Projects), is liable
for retirement by rotation at the ensuing Annual General
Meeting (AGM) of the Company and being eligible, offer
himself for re-appointment.

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

BOARD & COMMITTEE MEETINGS

Board Meetings:

The Board met nine (9) times during the FY 2024-25, on
April 19, 2024; May 21, 2024; July 18, 2024; August 08,
2024; September 20, 2024; November 7, 2024; December
18, 2024; February 11, 2025; and March 26, 2025. The
intervening gap between the meetings was within the
period prescribed under the Companies Act, 2013, DPE
Guidelines and LODR Regulations.

During the FY 2024-25, all the meetings of the Board
were held at the Company''s Registered Office, in New
Delhi, through physical and Video Conferencing mode.

Committee meetings:

Your Company''s 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 2024-25, the Audit Committee of the Board
met seven (7) times, the Nomination & Remuneration
Committee met six (6) times, Stakeholders'' Relationship
Committee met one (1) time; Risk Management
Committee of the Board met two (2) times; the Corporate
Social Responsibility & Sustainability Committee met four
(4) times, and the Project Progress Review Committee
met one (1) time.

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 LODR Regulations, Schedule IV of the Companies
Act, 2013 and guidelines issued by DPE, one separate
meeting of Independent Directors was held on
November 08, 2024 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 Hon''ble 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

The Ministry of Corporate Affairs (MCA) has, vide its
notification dated June 05, 2015, notified the exemptions
to Government Companies from certain provisions of
the Companies Act, 2013 which inter-alia provides that
Section 134(3)(p) regarding a statement indicating the
manner of formal annual evaluation of Board, shall not
apply to Government Companies in case the Directors
are evaluated by the Ministry which is administratively
in charge of the Company as per its evaluation
methodology. Further, the aforesaid circular issued by
the MCA has also exempted sub-section (2), (3) & (4) of
Section 178 of the Companies Act, 2013 regarding the
appointment, performance evaluation and remuneration
for Government Companies.

Further, MCA vide its notification dated July 05, 2017
has made an amendment in the Schedule IV of the act,
whereby it has exempted Government Companies
from complying with the requirement of performance
evaluation by the Independent Directors of NonÂ¬
Independent Directors and Chairman and performance
evaluation of the Independent Director by the Board if
the concerned department or ministries have specified
the requirements.

In this regard, the DPE has already laid down a mechanism
for performance appraisal of all Functional Directors. The
performance evaluation of Functional Directors is done
through a system of Annual Performance Appraisal Report
(APAR) by MoR. Further, the performance evaluation
of the Company is done through the evaluation of the
Memorandum of Understanding (MoU) entered with MoR,
and the said evaluation is submitted to DPE through the
Administrative Ministry. The MoU targets are cascaded
down and form an integral part of the performance
appraisal of the individuals and the team. The internal
MoU covers various parameters including financial, nonÂ¬
financials and compliances of government guidelines etc.

In respect of Government Nominee Directors, their
evaluation is done by the MoR 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 the Department
of Public Enterprises.

REMUNERATION POLICY FOR THE BOARD AND
SENIOR MANAGEMENT

As a Government Company, IRCON follows the guidelines
issued by the Department of Public Enterprises (DPE) for
determining the remuneration of its functional directors,
senior management officials, and other employees.
The Company has placed the salient features of its
remuneration policy for key managerial personnel and
employees on its website (www.ircon.org) under the
HRM and Career Sections, as required by Section 178(4)
of the Companies Act, 2013.

The remuneration policy of the Company, as well as the
procedures and policies for the appointment of Senior
Management, are reviewed and recommended by the
Nomination & Remuneration Committee before being
approved by the Board of Directors.

Furthermore, under Section 197 of the Companies Act,
2013, and Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, listed
companies are required to disclose specific details of
directors'' remuneration in the Board''s Report. However,
Government Companies, including IRCON, are exempted
from complying with this provision as per Notification No.
GSR 463(E) dated June 5, 2015, issued by the Ministry of
Corporate Affairs.

Therefore, such details are not included in the Board''s
Report of IRCON. However, the remuneration paid to
directors during FY 2024-25 is disclosed in the Corporate
Governance Report.

INTERNAL CONTROL SYSTEMS

The Company has implemented robust financial controls
in accordance with the provisions of the Companies
Act, 2013. These internal financial controls over financial
reporting are functioning effectively. The controls
are designed to ensure the maintenance of accurate
accounting records, promote the orderly conduct
of business operations in compliance with company
policies, safeguard company assets, prevent and detect
fraud and errors, and ensure the reliability of financial
and operational information. The internal control system,
which includes Internal Financial Controls over Financial
Reporting, undergoes periodic reviews, and necessary
adjustments are made to align with evolving business
needs.

Further, information about the internal control system
can be found 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
Investor Relations section.

RISK MANAGEMENT

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

As per the LODR Regulations, the Company is having
a Board level Risk Management Committee, which, as
on March 31, 2025, comprised of Director (Works) as
Chairman, Director (Finance), Director (Projects), and Shri
Anupum Singh, Government Nominee (Part-time Official)
Director as members. Details of the Risk Management
Committee are provided in the Corporate Governance
Report.

The Details of the Risk Management System are provided
in the Management Discussion and Analysis 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 Company''s 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 (CVC).

Complaints raised against officials and procedures,
etc., by various Authorities (such as CVC/Railway Board
Vigilance, CBI, Prime Minister''s Office, etc.,) and received
from other sources were investigated to their logical
conclusion.

During FY 2024-25, the Department has received a total
of 24 Nos. complaints and 2 complaints were of previous
year. Total 22 Nos. complaints were disposed off in the
year 2024-25 including that of previous years. Nature
of Complaints includes irregularities during tendering,
execution of contract, anonymous & pseudonymous
and quality related issues. Also steps were taken for
closure of Paras raised by the Chief Technical Examiner''s
Organization (CTEO). In addition, scrutiny of immovable
property returns of employees, creating awareness on
rules/procedures/common irregularities in execution
through workshops, training, debate, competitions, etc.,
have been the prime activities of the Department.

As a step towards ''Leveraging of Technology'' for better
transparency, online services are efficiently running since
years viz, submission of immovable Property Returns
since 2012-13; online Vigilance Clearance since April 1,
2014 through the intranet portal; and filing of vigilance
complaints since December 2012. Further, E-Procurement
has already been started w.e.f. July 1, 2013 in the
organization in a comprehensive manner for achieving
transparency for all value of the work.

Projects. The Integrity Pact is made a compulsory
document in the conditions of model e-Procurement
Documents for all works. IRCON has implemented this
Integrity Pact which is a tool developed by Transparency
International 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, Shri Virendra
Kumar Saksena, retired IRS, has been appointed on
December 24, 2024 as an Independent External Monitor
(IEM-3) as per revised SOP. Lt. General Harsha Gupta has
been appointed as an Independent External Monitor
(IEM-2) on July 04, 2024 for 3 years and Shri Madhusudan
Prasad, retired IAS-1981 has been appointed on 18.11.2023
as Independent External Monitor (IEM-1) to receive any
complaints from the bidders and submit the investigation
report.

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

RELATED PARTY TRANSACTIONS

Pursuant to the provisions of Section 177 and 188 of the
Companies Act, 2013 (the Act) and LODR Regulations,
prior approval of the related party transactions wherever
applicable are taken from the Audit Committee / Board
as applicable. Prior omnibus approval of the Audit
Committee is also obtained on yearly basis for various
Related Party Transactions between IRCON or any of its
subsidiaries on one hand and a related party of the IRCON
or any of its subsidiaries on the other hand in the ordinary
course of business valuing not exceeding ?1 Crore for
each contract / agreement / transaction in a financial
year. The transactions, if any, entered into 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, 2013 and LODR 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.

The Related Party Transaction Policy of the Company as
approved by the Board is uploaded on the website of the
Company, i.e., www.ircon.org under the head Codes and
Policies in the Investor Relations section.

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, 2025, and of the profit of the Company
for the FY 2024-25;

iii) that proper and sufficient care has been taken for
the maintenance of adequate accounting records
in accordance with the provisions of the Companies
Act, 2013, for safeguarding the assets of the company
and for preventing and detecting fraud and other
irregularities;

iv) that the financial statements have been prepared on
a going concern basis;

v) that internal financial controls were adequate and
operating effectively; and

vi) that proper 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 AND SUSTAINABILITY
REPORT

The "Business Responsibility and Sustainability Report"
(BRSR) in compliance with the provisions of Regulation
34 of the LODR Regulations, in the format prescribed by
SEBI forms part of the Report. The report describes the
initiatives taken by IRCON from an environmental, social
and governance perspective.

MOU RATING / AWARDS

In line with the Department of Public Enterprises
(DPE) guidelines, the Ministry of Railways and IRCON
International Limited (IRCON) annually sign a Memorandum
of Understanding (MoU). This MoU specifies selected
parameters and targets for the respective financial year.
The performance of IRCON is subsequently assessed at
the year''s end based on the achievement of these targets.

For the financial year 2023-24, IRCON received an
''Excellent'' rating based on its performance evaluation
against the MoU parameters.

As per 2024 edition of USA''s Engineering News Record
68 (ENR), IRCON is the only Indian PSU to make it to the list

of top 250 International Contractors as well as top 250
Global Contractors. Further in the Business Standard BS
1000 Annual Magazine released in March 2025, IRCON has
been ranked 132 in 2024 by total revenue, and stands at
8^th position under the ''Construction and Infrastructure''
Sector. IRCON is also ranked 192^nd in 2024 in the list of
fortune India 500.

IRCON has been awarded several prestigious awards.
Some of the significant awards and accolades won during
the year 2024-25 are mentioned below:

â¢ 15^th CIDC Viswakarma Award 2024 for Mokama Rail
Bridge Project for Category Construction Health,
Safety & Environment.

â¢ Dun & Bradstreet award for ''Contract & Construction
and Tech. Consultancy Services (Central PSU)''
Category.

â¢ 232^th rank in the list of Top 250 International
Contractors published by ENR Survey 2024.

â¢ 207^th rank in the list of Top 250 Global Contractors
published by ENR Survey 2024.

AUDITORS

STATUTORY AUDITORS

The Comptroller & Auditor General of India (C&AG) has
appointed M/s Ramesh C. Agrawal & Co., Chartered
Accountants, New Delhi (Firm Registration No.001770C)
as the single Statutory Auditors of the Company, for
FY 2024-25, except for the following foreign projects
for which C&AG has approved the appointment of the
following as statutory auditors:

BRANCH AUDITORS FOR INTERNATIONAL PROJECTS
Mr. Kerbal Athmane	Algeria Project
M/s Jayasinghe & Co.	Sri Lanka Project
M/s Toha Khan Zaman & Co.	Bangladesh Project
My Asia Consulting Co. Ltd.	Myanmar Project

COST AUDITORS

In pursuant to the provisions of Section 148 of the
Companies Act, 2013 and rules made thereunder,
the Company has maintained the cost records of the
Company. The Board of Directors has appointed M/s
Bandyopadhyaya Bhaumik & Co., Cost Accountants,
(having firm Registration No. 00041) as Cost Auditor of
the Company for the FY 2024-25 for conducting the audit
of cost records.

SECRETARIAL AUDITORS

In pursuant to the provisions of Section 204 of the
Companies Act, 2013 and Regulation 24A of the LODR
Regulations, the Board of Directors has appointed M/s
VAP & Associates, Company Secretaries in practice
(Certificate of Practice No. 13901) as the Secretarial
Auditors for conducting Secretarial Audit of the Company
for the FY 2024-25.

INTERNAL AUDITORS

The Board of Directors have appointed following
Internal Auditors for the Indian & Foreign Projects for the
FY 2024-25:

Sl. No.	Region / Audit Circles	Internal Auditors
1.	Corporate Office Region	M/s A.M.A.A.
	(including Foreign Project viz.	& Associates,
	Algeria Project)	Chartered Accountants
2.	Northern Region	M/s A.M.A.A. & Associates, Chartered Accountants
3.	Eastern Region (including	M/s Sen & Ray,
	foreign projects viz. Myanmar	Chartered
	Road Project, Khulna Mongla Bangladesh, Ishrudi Darsana Bangladesh S&T, and Bhairab Railway Bridge (JV) Project Bangladesh)	Accountants
4.	Mumbai Region (including	M/s J. Singh
	Foreign Project viz.	& Associates,
	Upgradation of Railway Line,	Chartered
	Maho to Omanthai, Sri Lanka)	Accountants
5.	Patna Region	M/s Gupta Sachdeva & Associates, Chartered Accountants
6.	J & K Region	M/s Baweja & Kaul, Chartered Accountants

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

IRCON is engaged in the business of providing

infrastructure facilities and is 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 2024-25 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 financial 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, 2025 is placed on the website of the Company at
www.ircon.org, under the Investor Relations 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, 2025 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 Account and the same has been disclosed in the
Corporate Governance report.

SECRETARIAL STANDARDS

During the financial 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
COMPANY''S 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 2024-25.

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 during the FY 2024-25 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 2024-25.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of LODR 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 Policy is hosted on
the website of the Company, i.e., www.ircon.org under
the head Codes and Policies in the Investor Relations
section.

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 2024-25 forms part
of this report.

STATUTORY AUDITORS'' REPORT AND C&AG
COMMENTS

The reports of the Statutory Auditors on the Financial
Statements for FY 2024-25 (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 M/s Ramesh C. Agrawal, Chartered Accountants,
Statutory Auditors, in their report for the financial year
ended on March 31, 2025.

C&AG has given NIL comments on the Audited Financial
Statements of your Company for the FY 2024-25 and the
same are attached.

ACKNOWLEDGEMENT

The Directors of the Company would like to extend
their heartfelt gratitude and acknowledgement for the
invaluable assistance and cooperation received from
various Ministries such as Railways, Road Transport and
Highways (MoRTH), External Affairs, Finance, Commerce,
Urban Development, as well as other ministries,
departments, and agencies. We are also grateful for
the support received from the office of Comptroller &
Auditor General of India, Reserve Bank of India, Bankers,
Statutory, Branch, Cost, Secretarial & Internal Auditors,
of the Company, Indian Embassies & Missions abroad,
Foreign Missions & Embassies in India, EXIM Bank, ECGC
Limited, Protector of Immigration, Passport Authority,
and our esteemed clients both within India and overseas
as without their active support, the Company would
not have achieved its milestones during the year under
review.

We would like to express our sincere appreciation to
all the dedicated employees of the Company at every
level. Their unwavering efforts, dedication, sincerity and
commitment have significantly contributed to achieving
the highest ever performance of the Company.

For and on behalf of the Board of Directors

Sd/-

(Hari Mohan Gupta)

Chairman & Managing Director & CEO
(DIN: 08453476)

Date: August 21, 2025
Place: New Delhi

Mar 31, 2024

The Board of Directors of your Company are pleased to present the 48th Annual Report of your company for the financial year ended March 31, 2024. This report provides a comprehensive overview of the Company''s performance, including a summary of financial results and key highlights concerning the financial performance for the period ended March 31, 2024.

FINANCIAL RESULTS

('' in crore)

PARTICULARS	STANDALONE				CONSOLIDATED
PARTICULARS	FY 2023-24	FY 2022-23	%age CHANGE	FY 2023-24	FY 2022-23	%age CHANGE
Total Income /Turnover	12,387.85	10,261.63	20.72%	12,870.52	10,749.89	19.73%
Total Operating Income / Turnover	11,950.40	9,921.20	20.45%	12,330.91	10,367.93	18.93%
EBITDA	1,201.36	923.72	30.06%	1,509.96	1,116.54	35.24%
Profit Before Tax	1,155.54	883.19	30.84%	1,261.13	891.00	41.54%
Profit After Tax	862.90	776.83	11.08%	929.51	765.23	21.47%
Net Worth	5,771.76	5,178.48	11.46%	5,870.92	5,211.49	12.65%
Appropriations
Dividend (Final & Interim)	291.56	282.16	3.33%
EPS	9.17	8.26	11.02%	9.88	8.14	21.38%

Notes: * Includes proposed final dividend [subject to the approval of shareholders at the ensuing Annual General Meeting (AGM)].

FINANCIAL HIGHLIGHTS

Your Company has achieved highest ever total income of '' 12,387.85 Crore during FY 2023-24, compared to '' 10,261.63 Crore in FY 2022- 23, representing an increase of approximately 20.72%.

Furthermore, the operating turnover of the Company for FY 2023-24 has a rise of 20.45%, reaching '' 11,950.40 Crore, compared to '' 9,921.20 Crore in FY 2022-23. [This growth can be attributed to a healthy order book and efficient execution of projects].

Profit Before Tax (PBT) for FY 2023-24 reached ? 1,155.54 Crore, with an increase of 30.84% compared to '' 883.19 Crore in FY 2022-23. Similarly, the Profit After Tax (PAT) has reached to '' 862.90 Crore in FY 2023-24, shown a growth of 11.08% from '' 776.83 Crore in FY 2022-23.

The Net Worth of your company has increased from '' 5,178.48 Crore in FY 2022-23 to '' 5,771.76 Crore in FY 2023-24. Additionally, the earnings per share as of March 31, 2024, stood at '' 9.17 per share, compared to '' 8.26 per share as of March 31, 2023 on a face value of '' 2 per equity share.

DIVIDEND

The Company''s primary focus is on enhancing shareholder value. The Company has a consistent track record of paying dividends since its inception. In FY 2023-24, the Board of Directors declared and disbursed an interim dividend of '' 1.80 per equity share of a face value of '' 2/- per share. This amounted to approximately '' 169.29 Crore, (calculated at 90% of the paid-up share capital of '' 188.10 Crore). The interim dividend was declared based on the Company''s unaudited financial results for the quarter ended December 2023.

Furthermore, the Board has recommended a final dividend of '' 1.30 per equity share on the face value of '' 2/- each, totalling '' 122.27 Crore (65% of the paid-up share capital of '' 188.10 Crore). This final dividend is subject to approval from the shareholders at the ensuing AGM and is based on the Company''s profits for FY 2023-24.

Considering these dividends, the total dividend for FY 2023-24 would amount to approximately '' 291.56 Crore

(155% of the paid-up equity share capital of '' 188.10 Crore). This represents 33.79% of the post-tax profits for FY 2023-24 and 5.05% of the net worth of the Company as of March 31, 2024. Upon approval and payment of the proposed final dividend, the cumulative dividend paid to shareholders until FY 2023-24 will stand approximately '' 2,948.18 Crore.

The declaration of dividends aligns with the Dividend Distribution Policy, which complies with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), as amended, and the guidelines on âCapital Restructuring of Central Public Sector Enterprises."

SHARE CAPITAL & DISINVESTMENT OF SHARES

As on March 31, 2024, the paid-up equity share capital of the Company stood at ?188.10 Crore comprising of 94,05,15,740 equity shares of face value of '' 2/- each. The shareholding of the Promoter of the Company i.e. the President of India stood at 65.17% of the total paid- up equity share capital of the Company, as on March 31, 2024. IRCON is compliant on the Minimum Public Shareholding (MPS) requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957.

During FY 2023-24, the Government of India had disinvested 8.01% of the total paid up equity share capital of the Company by way of Offer for Sale (OFS) through Stock Exchange mechanism , including 8% of the total fully paid up equity shares of the Company as on 30.09.2023

i.e. 94,05,15,740 through Offer for Sale Mechanism from 07.12.2023 to 08.12.2023 and 0.014% of the total fully paid up equity shares of the Company to eligible employees of the Company on 22.12.2023 through Employee Offer for Sale.

Pursuant to the above OFS, the stake of the Government of India has been reduced from 73.18% to 65.17%.

Based on the market price of Ircon International Limited (IRCON) as on March 31, 2024, it is placed in the top 500 listed companies. As on March 31, 2024, the market capitalization of your Company stood at and '' 20658.43 Crore at National Stock Exchange of India Ltd.

DEMATERIALISATION OF SHARES

All the shares, except 1887 shares as on March 31, 2024 are 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 RETAINED EARNINGS

Appropriations to retained earnings for the financial year ended March 31, 2024 were '' 571.34 Crore after considering the total dividend of '' 291.56 Crore.

CAPEX AND LIQUIDITY

During the year, the Company on a standalone basis spent a sum of '' 283.38 Crore on capital projects across

domestic and foreign projects; which includes '' 2.90 Crore towards construction of a building; '' 23.62 Crore for acquiring Plant & Machinery; Rs.14.47 Crore for acquiring other assets; and '' 242.39 Crore towards investments in SPVs.

The Company''s liquidity position remains strong at '' 4429.13 Crore as on March 31, 2024, comprising of '' 1828.88 Crore in cash and cash equivalent and '' 2600.25 Crore in other bank balances. Out of '' 4429.13 Crore, client/ project funds amount to '' 3614.60 Crore.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned a foreign exchange of ?19704 Crore cumulatively till date. During FY 2023-24, the Company has earned a foreign exchange of '' 622.66 Crore as compared to '' 432.99 Crore in FY 2022-23. The foreign exchange outgo stood at ?553.23 Crore during FY 2023-24 as compared to '' 406.83 Crore during FY 202223. Thus, the net foreign exchange earnings amount to '' 69.43 Crore in FY 2023-24.

IRCON GROUP PERFORMANCE

During the year under review, IRCON along with its subsidiaries (âthe Group'') on a consolidated basis has recorded highest ever total turnover of '' 12870.52 Crore (previous year: '' 10749.89 Crore). The Group has registered a quantum jump of 18.93% in operating turnover to ? 12330.91 Crore (previous year '' 10367.93 Crore). The Group reported a consolidated profit before tax of '' 1261.13 Crore (previous year '' 891 Crore) and profit after tax of '' 929.51 Crore (previous year: '' 765.23 Crore), both registering increase of 41.54% and 21.47%, respectively.

The Group EBITDA was ?1509.96 Crore (previous year: '' 1116.54 Crore), an increase of 35.24% over the previous year.

During the FY 2023-24, in terms of the financial performance, the Company has achieved and crossed the Turnover targets criteria of '' 10650 Crore (on Consolidated basis) set up by the Ministry of Railways in terms of the Memorandum of Understanding based on the DPE guidelines.

GRANT OF âNAVRATNA" STATUS

DPE vide its letter dated October 12, 2023 has granted the âNavratna" Status to the Company. Now, IRCON is the 15^th Navratna CPSE amongst the CPSEs, which got listed on September 28, 2018 and has established a sound framework of Corporate Governance.

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 21, 2024, had approved the Financial Statements for FY 2023-24 (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 Vadodara Kim Expressway Limited (IrconVKEL), Ircon Gurgaon 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 2023-24.

Pursuant to letter dated October 18, 2021 of Ministry of Railway, the closure of business and transfer / hand over of business /assets of IRSDC is under process. Accordingly, as part of the closure activities, all assets and liabilities of IRSDC [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)] are to be transferred to Rail Land Development Authority (RLDA)/ MoR on slump sale basis for a consideration not less than the book value as on the cutoff date to be mutually agreed upon as approved in the BoD meeting of IRSDC. Closure related activities initiated in FY 2021-22 are yet to be completed. The liquidation process shall commence on completion of these activities and handing over of assets and liabilities to RLDA/ MoR. Financial statement of IRSDC has been prepared on liquidation basis. The Company does not foresee any impairment in the value of its investment as the Company''s share in the reported Net Worth of IRSDC is '' 60.29 Crore i.e.26% of '' 231.89 Crore vis-a-vis our shareholding of '' 52 Crore.

It has been decided to handover Phase- I (Angul - Balram, 14 KM already operational) and Phase- II (Balram-Putgadia-Tentuloi,54 KM under construction)of MCRL Project to the Ministry of Railways (MoR). The legal formalities, pricing and related modalities are in process and the Company does not foresee any impairment in the value of investment at this stage.

The Ministry of Railway (MoR) has granted in-principle approval for closure of Bastar Railway Private Limited,

a joint venture company and transfer of its assets and liabilities to MoR. The legal formalities, pricing and related modalities are in process and the Company does not foresee any impairment in the value of investment at this stage.

The Company would make available its audited financial statements (standalone and consolidated) for the FY 2023-24 and financial statements of its eleven subsidiaries (IrconISL, IrconPBTL, IrconSGTL, IrconDHHL, IrconVKEL, IrconGRHL, IrconASEL, IrconLRHL, IrconBMEL, IrconHBL & IRPL) at its website (www.ircon.org).

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

The Ministry of Corporate Affairs and the Securities and Exchange Board of India (SEBI) had allowed companies to send financial statements, including the Notice of AGM, Board''s Report, Auditor''s Report, and other related documents, exclusively via e-mail to members who have registered their email addresses with the company or with the depository participant/depository, as well as to other eligible persons. These relaxations have been extended until September 30, 2024, as per circulars dated September 25, 2023 and October 7, 2023 issued by MCA and SEBI respectively.

Taking into account these relaxations and as part of our commitment to environmental sustainability, the Notice of AGM and Annual Report will be electronically delivered to shareholders who have already registered their email addresses with the respective depository participants. These documents will be accessible on the Company''s website and will also be provided to the stock exchanges, namely BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) Report, as mandated by Regulation 34 read with Schedule-V to the LODR Regulations and DPE Guidelines, has been included as an annexure to this report. It is hereby incorporated by reference and serves as an integral component of this report. The MDA Report provides a comprehensive review of various aspects including the global and Indian economy, industry analysis, future outlook, Company overview, legal status and autonomy, business divisions/ units, financial and operational performance, projects executed during FY 2023-24, upcoming projects, strengths, scope and opportunities, key concerns, business strategies, risk management, adequacy of internal control systems, and significant developments in human resources.

EXTERNAL ENVIORNMENT

MACROECONOMIC CONDITIONS

According to the International Monetary Fund (IMF) in its World Economic Outlook (April 2024), global growth, estimated at 3.2% in 2023, is projected to maintain the same pace in 2024 and 2025. The forecast for 2024 has been revised upward by 0.1% from the January 2024 World Economic Outlook Update and by 0.3% from

the October 2023 WEO. In contrast, India''s growth is projected to remain strong, with rates of 6.8% in 2024 and 6.5% in 2025. This robust growth is attributed to sustained domestic demand and an increasing working-age population.

Global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. The forecast for nonfuel commodity prices is broadly stable in 2024, with prices for base metals expected to fall by 1.8%, on account of weaker industrial activity in Europe and China.

According to the provisional estimates released by the National Statistical Office (NSO) on May 31, 2024, real GDP growth for 2023-24 was placed at 8.2%. On the supply side, real gross value added (GVA) rose by 6.3% in Q4:2023-24. Real GVA recorded a growth of 7.2% in 2023-24. Real GDP growth for 2024-25 is projected at 7.2% with Q1 at 7.3%; Q2 at 7.2%; Q3 at 7.3%; and Q4 at 7.2%.

INFRASTRUCTURE & CONSTRUCTION INDUSTRY -GOVERNMENT INITIATIVES & INDUSTRY OUTLOOK

Infrastructure is a crucial driver for the growth of other industries and the overall development of India. Recognizing this, the government has prioritized the enhancement of infrastructure and construction services through targeted policies. These initiatives include open FDI norms, substantial budget allocations to the infrastructure sector, and the Smart Cities Mission. Additionally, the Prime Minister has launched the Gati Shakti Master Plan, aimed at integrating various modes of transportation to accelerate infrastructure development across the country.

In Budget 2024-25, capital investment outlay for infrastructure has been increased by 11.1% to Rs.11.11 lakh crore (US$ 133.86 billion), which would be 3.4% of GDP. The Indian government has introduced various formats in order to attract private investments, especially in roads and highways, airports, industrial parks and higher education and skill development sectors. Private Equity-Venture Capital Arms invested US$ 3.5 billion (across 71 deals) in Indian companies in May 2023.

National Highways play a very important role in the economic and social development of the country by enabling efficient movement of freight and passengers and improving access to the market. MoRTH and its implementing agencies have implemented multiple initiatives in the last 8 years to augment the capacity of the National Highway infrastructure in India. Roads & Highways account for the highest share, followed by Railways and Urban Public Transport. The government has set ambitious targets for the transport sector, including development of 2 lakh-km national highway network by 2025 and expanding airports to 220. Additionally, plans include operationalizing 23 waterways by 2030 and developing 35 Multi-Modal Logistics Parks (MMLPs). The total budgetary outlay for infrastructure-related ministries increased from around Rs.3.7 lakh crore in FY23 to Rs.5 lakh crore in FY24, offering investment prospects for the private sector across various transport sub-segments.

Under the Budget 2024-25, the Government of India allocated Rs. 2.72 lakh crore (US$ 33.46 billion) to the Ministry of Road Transport and Highways. In February 2024, NHAI raised highest over Rs.15,624 crore (US$ 1.88 billion) through InviT mode. FDI inflows in construction development stood at US$ 26.54 billion between April 2000 - December 2023. The Government aims to construct 65,000 kms of national highways at a cost of Rs. 5.35 lakh crore (US$ 741.51 billion).

The Indian Railways have developed a comprehensive National Rail Plan (NRP) for India - 2030 with the goal of transforming the railway system into a âfuture-ready'' infrastructure by the year 2030. The NRP is aimed to formulate strategies based on both operational capacities and commercial policy initiatives to increase modal share of the Railways in freight to 45%. The objective of the Plan is to create capacity ahead of demand, which in turn would also cater to future growth in demand right up to 2050 and also increase the modal share of Railways to 45% in freight traffic and to continue to sustain it.

Under the Budget 2024-25, the government allocated US$ 30.3 billion (Rs. 2.52 lakh crore) to the Ministry of Railways. In 2024-25 Indian railways is planning to Create three important railway routes for moving energy, minerals, and cement efficiently; connecting ports better; and improving busy traffic routes.

These efforts are crucial for boosting economic growth, improving connectivity, and enhancing overall development across various sectors. The integration of different modes of transportation can certainly lead to more efficient logistics and quicker project implementation.

ORDER BOOK

Ministry of Railways have made a significant change in their 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. The Company has also taken up PPP project in roads & highway under Toll/HAM Model.

The order book as on March 31, 2024, is ?27208 Crore as compared to ?35195 Crore as on March 31, 2023. The major new orders are from railway electrification, highway project, metro track works, workshops, airports and renewable energy; also civil and track work in prestigious High Speed Railway Project.

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 has diversified in many other areas such as power transmission lines, sub-stations industrial complex, bridge and flyovers, tunnels, electrical and mechanical work, signaling and telecom, production units, station building, multi-function complex, construction of commercial, residential complexes, solar power 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 shall continue to pursue projects of High-Speed Rail, National Capital Region Transport Corporation (NCRTC), National Highways Authority of India (NHAI), Indian Railways and other important and high value infrastructure projects in India.

During the FY 2023-24, your Company was awarded the five projects in India viz.,

1. Supply, installation, testing and commissioning of Integrated Tunnel Communication Systems, OFC based industrial grade network system in Jiribam Khongsang section of Jiribam - Imphal new Railway Line Project,

2. Procurement of Goods including Machinery, Plant & Equipment up to the stage of successful installation, commissioning, training, FAC, etc.,

3. Composite works (Civil, Electrical and Mechanical) involving construction of Industrial shops with PreEngineered Building (PEB), water supply system drainage system, Electrification and illumination works, associated telecom works and supplying & commissioning of specified Mechanical Machineries (EOT Cranes etc.) in connection with Detachment free rake examination facilities (Ph-II) at Exchange Yard of Bondamunda, South Eastern Railway.

4. Engagement of Nodal Agency for establishment of Technology Centres across India under the scheme âEstablishment of New Technology centre/ Extension Centres".

5. Construction of Twin Tube Uni-directional Aizawl Bypass Tunnel of 2.5 km and its approaches of 2.1 km from km 10.600 to km 15.200 (Package-2) on Sairang - Phaibawk section of NH-6 in the State of Mizoram on EPC Mode.

ONGOING PROJECTS:

A list of ongoing major projects in India is given at Appendix-A.

In FY 2023-24, the focus of your Company has been execution, faster deliveries and meeting stringent timelines for overall optimal contribution to the much-needed infrastructure growth. This is in line with the vision of our Hon''ble Prime Minister and Hon''ble Minister of Railways. During the FY 2023-24, following were some of the achievements of on-going major projects in India:

1. IRCON has successfully commissioned a total of 128.45 Km of rail lines out of which 54 Km is New Line and 74.45 Km is Doubling for the targeted rail sections.

2. IRCON has successfully commissioned 1152 RKM (Route Kilometer) of Railway Electrification (RE) works in new line/double line/NCRTC and RE Projects etc. Which is the highest electrification work ever in a year. Further, in RE projects, 7 nos. 132/25KV traction substations and 38 Km - 132 KV transmission line have been commissioned.

3. IRCON has commissioned highest ever Signaling works of 104 stations in the year 2023-24.

4. In USBRL Project - J&K, Banihal - Sangaldan section (38.618 Km) has been commissioned and opened in February-2024. Further, 38.6 Km Rigid Overhead Catenary (ROC) system in Tunnels of USBRL Project has also been commissioned. This ROC system was implemented for the 1st time in Indian Railways. Over Head Equipment (OHE) works of 200 TKM at high altitude (650 meter above MSL) between Banihal to Baramulla including Tunnel T-80 (11.2 Km) has been successfully commissioned. ElectroMechanical & Safety ventilation (E&M) works consisting of electrical works with complete HT & LT, Tunnel Ventilation System, Fire Fighting system & SCADA system of 38 Km has been successfully commissioned.

5. In connection with Katni - Singrauli doubling project of East Central Railway, one section from Mahroi to Vijaysota (19.13 Km) has been successfully commissioned on 27th June, 2023.

6. In connection with Kiul-Gaya doubling project of East Central Railway, the Section from Sheikhpura to Kashichak (15.4 Km) has been completed in August-2023 and commissioned on 1st September, 2023 with a speed of 90 Kmph. Further, section from Kashichak to Warisaliganj has been commissioned on 23rd January, 2024.

7. In Agartala - Akhaura New Rail Line project, Nischintapur (India) to Gangasagar (Bangladesh) section has been inaugurated by Hon''ble Prime Ministers of both the countries on 1st November, 2023 for Goods & Services.

8. In connection with Khulna - Mongla Port Rail Line project - Package No. WD1, Hon''ble Prime Ministers of India and Bangladesh inaugurated the rail line on 1st November, 2023 for Goods & Services. The project is completed and inspected by General Inspector Bangladesh Railway (GIBR) on 30th April, 2024. Now, passenger trains have started operations from 1st June 2024.

9. 345 RKM/440 TKM of OHE is commissioned under Lumding Division of Northeast Frontier Railway (NFR) in FY 2023-24.

INTERNATIONAL PROJECTS

In FY 2023-24, the contribution of international projects

to the total revenue amounted to '' 574.82 Crore, which

accounts for 4.81% of the operating turnover. This is

in comparison to ?411.84 Crore in FY 2022-23, which represented 4.15% of the operating turnover.

The Company continues to actively participate in new projects in foreign countries, and has ongoing projects in Bangladesh, Algeria, Sri Lanka, Nepal and Myanmar. By continuing to diversify its business and geographical 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 agencies.

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 of project after approval of variation order is US$ 211.77 million. 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. Additional scope of work was added in 2021. Project stands completed on 31st March, 2024 and General Inspector Bangladesh railway (GIBR) Inspection was conducted on 30th April, 2024. Subsequent to GIBR approval for running of passenger trains, trains have started operations from 1st June, 2024.

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

The Company had 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 for a contract value of BDT 240.9 Crore (equivalent to approx. ?209.47 Crore). The completion period of the construction contractor has been extended up to 30th June 2024. The overall progress of the Project is approximately 96% and now, only building and platform works are pending. However, the Trial run was done on 30th October, 2023 and project was inaugurated by Prime Ministers of both countries on 1st November, 2023.

ii. Algeria

The project was awarded by ANESRIF, the National Agency for the Planning and Implementation of Railway Investments, Ministry of public works and investments, 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 the existing lines, with a diversion of 10 km for the Relizane city, from the station Oued sly to the station Yellel in Algiers-Oran section of Algerian Railways. The value of the contract, including additional works for the construction of the double line, has been revised to Algerian Dinar 3,268 Crore (equivalent to approx. ?2,342 Crore).

Installing of 210 Km of track (out of the total 218 Km) has been completed. Out of this, 82 km of new track line has been made operational. Work on the existing line has also been started and a total stretch of 71.5 km out of 74 km of the existing line, 6 out of 7 station buildings are ready to be handed over, and 9 major bridges (out of 10 Nos) have also been completed. The project is expected to get completed by December 2024.

iii. Sri Lanka

(a) Upgradation of Railway Line from Maho Omanthai under Indian Line of Credit - Track Rehabilitation and ancillary works.

In Sri Lanka, the Company had secured a project for âUpgradation of Railway Line from Maho Omanthai under Indian Line of Credit -Track Rehabilitation and ancillary works". The project was 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) through competitive bidding.

The project was awarded on 29th April 2019 with completion period of 36 months (starting from date of receipt of advance payment, 29th November,2019). 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 28th November, 2022. The project was delayed due to Covid-19 pandemic restrictions and subsequent

economic and fuel crisis in Sri Lanka.

The first phase of Upgradation from Anuradhapura and Vavuniya Section (48.5KM) during the mega traffic block has been completed and commissioned in July, 2023.

Further, 2nd Phase Mega Traffic Block for upgradation of the remaining section from Maho to Anuradhapura (65 Km) has

been arranged from 7th January, 2024 and upgradation of this section is in progress. Likely date of completion of the Project is 31st August, 2024 considering the inclement weather and heavy rains in the project corridor.

The overall progress of the project is approx. 70%.

(b) Procurement of Design, Installation. Testing, commissioning, and certifying of Signaling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) under Indian Line of Credit:

The work for âProcurement of design, installation, Testing, commissioning, and certifying of Signaling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding)" was awarded to your company through Exim Bank of India under Indian Line of Credit.

The project was awarded on 4th December, 2022 by Sri Lankan Railways under the Ministry of Transport and Civil Aviation, Government of Sri Lanka at a value of US$ 14.90 Million (equivalent to approx. ?121.25 Crore) through competitive bidding. Scheduled completion period was 12 Months from the date of receipt of mobilization advance.

Contract Agreement has been signed on 21st September,2023. Contract Inclusion is yet to be approved by Exim Bank of India. Project is yet to start.

iv. Nepal

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

(a) Construction of Broad Gauge (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 Biratnagar (Nepal), Ch. 18.60 Km. 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 proposed alignment in Nepal portion (13.15 Km) falls in Morang district of Nepal.

The revised value of contract of ? 401.65 Crore is under approval of the Ministry of External Affairs.

The section from Bathnaha (India) Ch. 0.00 Km to Nepal Custom Yard (Nepal) Ch. 6.70 Km has been commissioned for freight traffic on 1st June, 2023. The work is in progress in the remaining portion.

The overall progress of the project is approximately 86%.

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

The project involves construction of a new BG rail line from Jaynagar (India), Ch. 0.00 Km to Bijalpura (Nepal) Ch. Km 52.336 with extension up to Bardibas, Ch. Km 68.72. Out of the total proposed alignment, 2.975 Km falls in Madhubani district of Bihar state in India and 65.745 Km falls in Mahottari district of Nepal. 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 22nd October, 2021 which was inaugurated through virtual mode by the Hon''ble Prime Minister of India and the Hon''ble Prime Minister of Nepal on 2nd April, 2022. The first phase of 34.9 Km Jaynagar (India) - Kurtha (Nepal) section is part of 68.72 Km Jaynagar-Bijalpura-Bardibas rail link being built under Government of India grant assistance of Nepalese Rupee 8.77 billion. Section-2 from Km 34.900 to km 52.34, Kurtha- Bijalpura has also been completed and commissioned on 16th July 2023. In Section-3 from Km 52.34 to Km 68.72, Bijalpura-Bardibas, land was handed over on 7th November, 2023 by the Government of Nepal. The overall progress of the project is approximately 74%.

v. Myanmar

The Company has secured a project in Myanmar in FY 2022-23, 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. Construction of this project is intended to open up an alternate route to North-East Region and connect Mizoram with Chin State of Myanmar at Zorinpui. The agreement for the execution of this project has been signed on 7th March, 2022 and the project is to be completed within 40 months from the date of the signing of the agreement.

During FY 2023-24, work commenced on a 50 Km stretch (40 Km from Paletwa end (Myanmar) & 10 Km from Zorinpui end (India-Myanmar Border).

Due to ongoing armed conflicts between Myanmar Army and Insurgent groups the progress of work is adversely affected.

However, Ircon has shown great resilience and commitment to progress the work. Overall progress of the project is 10%.

REAL ESTATE SECTOR

IRCON has identified Real Estate Sector as one of the sectors for diversification, keeping in view the tremendous potential in this Sector. Your Company had acquired 8 plots in different sectors, on leasehold basis for 90 years, at NOIDA and has successfully Leased out 22,023 Sq. mt. of built - up space for Commercial and Office use. The Company has also developed property in Sector 32, Gurugram, Haryana and this property is registered with the trademark authorities in India as âIRCON INTERNATIONAL TOWER''. Entire leasable spare has been leased out to different government agencies.

IRCON Retail Mall at Sector - 43, NOIDA, Uttar Pradesh and Commercial cum Office Building at Sector -48, NOIDA, Uttar Pradesh has been leased out completely.

COMPANIES, JOINT VENTURE COMPANIES AND ASSOCIATE COMPANIES

A brief background on the eleven subsidiary companies and seven joint ventures companies of IRCON along with their financials and performance is given at Appendix-B.

In terms of the Company''s Policy on the determining the âMaterial Subsidiary" and Regulation 24A of the LODR Regulations, for the financial year ending March 31, 2024, none of the subsidiary company is a âmaterial 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, 2023.

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.

Regular quarterly meetings of Official Language Implementation Committee and quarterly workshops for effective use of the Hindi Technical system and official language are being conducted. Under the auspices of NARAKAS, competitions are organized by IRCON every year. Every year, the IRCON corporate office organizes Hindi competitions for the children and family members

of the employees. 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 IRCON''s internal website for use by the employees.

COMPLIANCE OF RIGHT TO INFORMATION ACT, 2005

In accordance with the provisions of the Right to Information Act-2005, IRCON has ensured the availability of updated information, including the names of the Appellate Authority, Central Public Information Officer, Assistant Public Information Officer and State Level Public Information Officers on our website. We have promptly responded to the queries received within the specified time frame. These queries primarily pertained to service matters, recruitments, finance, contract, corporate social responsibility (CSR) and projects. The details of RTI cases have been regularly published on website of the Central Information Commission (CIC) on quarterly and annual basis.

During the year 2023-24, 168 applications and 36 first appeals were received and at the beginning of the year 12 applications and 02 appeals were under process for disposal within the allowable time limit (i.e. total 180 applications and 38 appeals during the year). Out of which, 169 applications (including opening balance of 12 applications) and 36 First Appeals were disposed of. As on 31.03.2024, 11 applications and 02 appeals were under process for disposal within the allowable time limit. COMPLIANCE OF IMPLEMENTATION OF PUBLIC PROCUREMENT POLICIES FOR MSEs AND PREFERENCE TO MAKE IN INDIA

The Company has always encouraged local suppliers to participate in its tendering process and also promote them through training and hand holding programs. Our continued pursuit in this direction has seen improved participation of small local players and socio-economic development of communities in and around operational locations.

IRCON has taken several steps for effective implementation of MSE policy. The benefits of waiver of cost of tender documents and deposit of earnest money and purchase preference prescribed under the Policy, are incorporated in the tenders for procurement of goods and services.

The company has been extensively following the guidelines of Government on procurement through GeM and provisions are also made in tenders to promote âMake in India" directives of the Government of India.

Tenders valuing upto Rs.200 Crore are invited using national competitive bidding in compliance to Public Procurement (Preference to make in India), Order 2017.

During the FY 2023-24, the Company has procured items valuing Rs 80.52 Crore from MSE vendors against expenditure valuing Rs 135.58 Crore (excluding the procurement of items which are beyond the scope of MSEs) towards material, stores & service, thereby achieving 59.39% procurement from MSEs against the compliance requirement of 25% as per the procurement policy. The Company has conducted one national level Special Vendor Development Program at the Corporate Office, Delhi on December 22, 2023 and Govt. of India, Ministry of MSME ,MSME DFO,Okhla ,New Delhi in association with Ircon International Ltd (a CPSE under Ministry of Railways),NSIC ,Govt E-Marketplace (GeM) and other CPSUs and local MSME associations organized two days vender development program cum industrial exhibition at GL Bajaj Institute of Management & Technology Knowledge Park-II, Greater Noida , Distt. Gautam Budh Nagar on 6th and 7th March 2024.

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. A clause in General Conditions of Contract is incorporated for MSEs vendors willing to avail the facility.

HUMAN RESOURCE DEVELOPMENT

IRCON recognizes that its employees are fundamental to its success and play a crucial role in safeguarding the organization''s values and culture. The organization firmly believes that its achievements rely on the alignment and performance of its workforce, as well as maintaining a positive work environment. It is committed to establishing a collaborative, inclusive, and performance-driven atmosphere that fosters learning, growth, and overall employee well-being.

IRCON''s Human Resource (HR) Philosophy revolves around empowering and nurturing employees, allowing them to reach their full potential, encouraging innovative ideas, and providing rewards based on performance. The company''s work culture is characterized by openness and dynamism, empowering employees to take initiative in their roles with full support from top management.

At IRCON, the Human Resource Management (HRM) team is dedicated to recruiting, retaining, and developing the right people. They continuously strive to create an optimal work environment that is inclusive, open, diverse, and provides equal opportunities for all employees. The company has aligned its HR strategy, systems, and procedures with its business objectives, focusing on building competencies necessary for organizational success. This strategy serves as a motivating force for employees, bridging the gap between the company''s future needs and individual aspirations.

IRCON maintains a performance-oriented culture where the contributions of every employee are measured

and appropriately recognized. The Company has implemented a robust Performance Management System (PMS) that aligns with its philosophy of rewarding and acknowledging merit at all levels. This system supports the professional development of executives through a structured approach integrated into the company''s performance appraisal process. IRCON takes pride in its highly motivated and competent human resources and acknowledges their significant contributions.

MANPOWER STRENGTH

The total manpower strength of IRCON as on March 31, 2024, stood at 1270, (previous year 1341) which included 857 regular employees, 32 employees on deputation, 377 on contract (including service contract) and 04 on fixed tenure basis. Out of the total employees of the Company, 1220 are posted on Indian projects and 50 on international projects. Among 1270 employees, 899 are technically and professionally qualified. There was a total of 60 women employees as on March 31, 2024.

The overall income per employee for FY 2023-24 stood at ?9.75 Crore as compare to ? 7.65 Crore in FY 2022-23.

During the year, the total newly employed personnel stood at 155 which included 10 regular employees, 4 employees on deputation, and 141 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 526 SC / ST / OBC and differently- abled employees as on March 31, 2024.

Further, during the FY 2023-24, out of the 10 employees inducted against regular posts, 3 belong to SC / ST / OBC and differently-abled categories. Similarly, out of the 108 employees recruited against the contractual positions, 44 belong to SC / ST / OBC / EWS and differently- abled categories.

During the FY 2023-24 training has been given to 1015 employees, out of which 451 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 2023-24, inhouse training programmes across all levels of employees were organised. Professional programmes, workshops, 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 2023-24 a total 1032 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, postretirement 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

Your Company is dedicated to creating a supportive and secure working environment for its women employees. The Company has implemented a comprehensive policy for the Prevention, Prohibition, and Redressal of Sexual Harassment at the Workplace, which applies to all employees, including regular employees, deputationists, temporary workers, ad-hoc employees, contract workers, daily wage workers, and individuals employed through agencies or contractors. This policy, along with its details, can be accessed on the Company''s website. Furthermore, this policy extends to wholly-owned subsidiary companies of IRCON that are formed as Special Purpose Vehicles.

Your Company has ensured compliance with the provisions concerning the formation of the Internal Committee (IC) as mandated by the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The IC comprises five members, including four Company officials and one external member from an NGO. Additionally, provisions related to the prohibition of sexual harassment have been incorporated into the IRCON''s Conduct, Disciplinary, and Appeal Rules. At the beginning of the year, no complaint was pending. No complaint of sexual harassment was received during the year.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

In accordance with Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility Policy) Amendment Rules 2021, IRCON has updated its CSR Policy duly approved by the Board of Directors of IRCON. CSR is essentially a way of conducting business responsibly and IRCON shall endeavor to conduct its business operations and activities in a socially responsible and sustainable manner at all times. IRCON will strive to contribute to inclusive growth and sustainable development with emphasis on development of weaker sections of society and in the Aspirational Districts of the country. As per broad objectives of the Policy, CSR activities are being implemented in project/ program mode, in areas or subjects specified in Schedule VII of the Act, on thrust areas of education and health care, in the periphery of project areas of IRCON (local area).

In accordance with the guidelines issued by the Department of Public Enterprises (DPE) through their Office Memorandum dated December 10, 2018, along with the update on April 24, 2023, CPSEs (Central Public Sector Enterprises) are required to follow a theme-based approach for their CSR activities. The Company allocates a minimum of 60% of their annual CSR budget for thematic programs and give preference to the Aspirational districts in their CSR initiatives. For the FY 2023-24, By adhering to these guidelines and embracing the chosen theme, we are actively working towards making a positive difference in society and contributing to the well-being of our communities.

During the year, our company took a focused approach to conceive and implement CSR activities with the aim of generating maximum impact for the target beneficiaries. These initiatives were carried out in collaboration with reputable implementing agencies. In the FY 202324 Company has Spent 11.65 Cr against the Allocated CSR Budget of Rs.11.64 Cr. During the Year Company Implemented 72 Projects in Pan India Within this budget, a significant portion was dedicated to the health sector, including a contribution of ?0.67 Crore to the PM CARES Fund. During the Year Company Covered 14 Aspirational districts by Conducting Health Camps, provided nutritional foods to pregnant women''s and children''s, conducted sports activities for girls, provided astronomy labs and furniture''s in government schools.

The CSR Policy, which provides comprehensive guidelines for conducting CSR activities, is available on our Company''s website: www.ircon.org. Furthermore, the Annual Report on CSR & Sustainability activities, in compliance with Section 135 of the Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021, is appended to this report, forming an integral part of it.

QUALITY, HEALTH AND SAFETY QUALITY MANAGEMENT SYSTEM

Company as a whole was first certified for ISO 9002:1994 by TUV SUD Private Limited. IRCON has 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 surveillance audit was conducted by TUV SUD South Asia Private Limited in the month of November 2023, and the validity of the certificate is up to March 2026.

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM

The Company established an Occupational Health & Safety Management System and was certified for ISO 45001:2004 in October, 2011. The latest surveillance audit for ISO 45001:2018 was conducted by TUV SUD South Asia Private Limited in the month of October, 2023 and the validity of the certificate is up to December, 2024.

ENVIRONMENT MANAGEMENT

The Company established an Environment Management System (EMS) and was certified for ISO 14001:2004 in October, 2011. The latest surveillance audit for ISO 14001:2015 was conducted by TUV SUD South Asia Private Limited in the month of November, 2023 and validity of the certificate is up to February 2026.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND UPGRADATION

IRCON is conscious of the limited nature of conventional sources and the importance of using 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 affect the ecology and environment. Towards conservation of energy, IRCON has taken the following steps:

a) IRCON has a total of 90 kW Grid Connected roof top Solar Power Plant installed at Corporate Office which is a considerable step to conserve energy and contributing to environment through usage of Green Energy. The total energy produced by Solar Power plant is approximately 89,471 units annually which is 9.08% of the energy being drawn from the electrical grid. Further, the Rooftop Solar Capacity of 90 kW is being upgraded to 200 kW along with installation of Battery Energy Storage System for more optimization. IRCON has also installed a total of 75 kW Roof top Off Grid Solar Power Plant at its IRCON Tower, Gurugram thereby reducing energy consumption. Also, capacitor banks of 600 kVAR capacity have been installed at Corporate Office building and 1600 kVAR at IRCON''s Gurugram Building to improve the power factor, which further reduces the Electrical Energy consumption by more than 10%.

b) Furthermore, energy-efficient LED lights are used for the internal lighting of Corporate Office building which also adds in considerable energy saving when compared with normal lights.

c) Automatic / Dynamic Reactive Power Factor (APF) correction / compensation panels with Insulated Gate Bipolar Transistors (IGBT) technology of 10.7 MVAR capacity have been designed and 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.

d) IRCON has installed more than 20,000 LED lights at USBRL E&M Tunnel Projects which have reduced the energy consumption considerably. Moreover, IRCON has also installed energy efficient LED lights for energy conservation in various projects like Loco Shed at Bondamunda, Katni-Singrauli RE Project, etc. for reducing energy consumption.

e) Capacitor Banks of 2400 kVAR capacity each have been installed at Baramulla, Qazigund & Budgam TSS (J&K) for USBRL RE project and 04 Nos. Traction Sub-Stations (TSS) of Katni-Singrauli Project to improve the power factor. Further, Capacitor Banks of 5500 kVAR capacity each have been installed in 08 Nos. TSS of various Railway Electrification projects. Furthermore, for Tunnel Substations a total of 16 MVAR capacitor banks have been installed to regulate the reactive power generation due to jet fans, thereby reducing energy consumption.

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

The Company is utilising the following as an alternate source of energy:

a) Apart from installation of Roof top Solar Plant at IRCON''s Corporate office, IRCON is also executing a major project for utilizing alternate sources of energy by Setting up a 500 MW Solar Photovoltaic Power Plant at Pavagada, Karnataka by using latest technology Monocrystalline Passivated Emitter and Rear Cell (PERC) Bi-facial Solar Photo Voltaic (SPV) Modules with Tracker technology which shall supply approximately 1076 million Units per year to Railways.

b) IRCON is also providing features similar to Green Buildings Constructions at Corporate Office, Gurugram building and its project offices thereby reducing the environmental impacts on water, materials, waste, energy and carbon emissions. IRCON has installed solar panels at various offices/ projects; along with sensor lights & sensor taps to conserve electricity.

c) 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 has invested approximately ? 4.00 Cr. for replacing the existing Heating, Ventilation & Air Condition (HVAC) System at Corporate office with new technology Energy Efficient Inverter Type Air Conditioning System which shall reduce the energy consumption by 20-30%.

Further, the old refrigerant of R-22 is replaced by the new technology refrigerant R-410A which is environment friendly and reduces the carbon emissions helpful in sustainable development.

TECHNOLOGY ABSORPTION AND UPGRADATION EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION:

Your company has developed critical machineries, required for National High Speed Rail Project from Ahmadabad to Mumbai, under Make-in-India program by guiding Indian Manufacturer''s on the technical design and specific functional requirement of the track machines. These machines include Rail Feeder Car, Track Slab Laying Car, Track motor Car, Trolley Wagons, Flash Butt Welding Machine, etc. These machines are specially developed in the same line as that of Japanese technological requirements.

In addition to above, State of the Art Factory for manufacturing J-slabs for balastless track has also been set up for High Speed Railway Track, being executed with Shinkansen Technology. Many components for the High Speed Track, such as, CAM bags, Synthetic Resin Pads, adjustable pads, Insert C& D for J-slabs, have been developed indigenously reducing dependence on imported component and saving in foreign exchange.

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

In this endeavour, IRCON has not only developed Indian manufacturers at par with Japanese design but also saved a significant cost to IRCON (more than Rs. 100 Cr.) by getting these track machineries manufactured in India instead of procuring these machines from Japan.

IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST THREE YEARS RECKONED FROM THE BEGINNING OF THE FINANCIAL YEAR) - N.A.

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

The Company''s Information Technology (IT) department offers a range of services encompassing Data Networks, implementation of company-wide software applications, procurement of IT hardware equipment, as well as the implementation of Highway Traffic Management Systems (HTMS), Toll Management Systems (TMS), and Weigh-in-Motion systems for major highway projects undertaken and operated by IRCON and its Joint Venture companies as concessioners. IT serves not only as a service provider but also plays a vital role in enhancing employee productivity within IRCON.

IRCON has recently upgraded to SAP S/4 Hana as Enterprise Resource Planning (ERP) application software for the operations of Finance, Controlling and Human Resource Management. 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 and helps in preparation of Financial Statements of the Company. Employee Self Service Portal, Finance and HCM modules of SAP have been rolled out for entire organization and Project systems are under implementation at various locations. The financial statements for the year ended March 31, 2024 were prepared from SAP S4-HANA and salaries of employees are also being processed through its payroll module from April 2022 onwards. Fully functional SAP S4-HANA after implementation will cover end-to-end business processes of IRCON. S4-HANA ERP software''s 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 movement of files, note sheets and other 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 has helped IRCON to march ahead with near paperless requirement in the entire organization.

Dedicated video conferencing facility based on the cutting edge AI based online meeting is being widely used for conducting review meetings with project offices, trainings, promotion interviews and contract management issues etc.

Cyber and Social Engineering attacks are a big concern now a days for organizations information security. IRCON has made efforts in this area and has formulated a Cyber Crisis Management Plan. Incidents of Cyber-attacks are reported to CERT-IN for record and further guidance. Steps are being taken to ensure that proper Cyber security audits of IT applications and IT infrastructure are done as per industry practice and norms. Employee awareness programs/trainings are being conducted on regular basis.

For efficient and transparency eProcurement through GeM (Government E-Market Place) and CPP Portal (Central Public Procurement Portal) have been adopted organization wide. Online collaboration tools are used by employees for information sharing and business communication.

CORPORATE GOVERNANCE

The Company places great emphasis on adhering to corporate governance guidelines and best practices, recognizing their significance in enhancing long-term shareholder value and upholding minority rights. It considers it a fundamental obligation to provide timely

and accurate information regarding the Company''s operations, performance, leadership, and governance.

In compliance with Regulation 34 of the LODR Regulations and DPE Guidelines on Corporate Governance for Central Public Sector Enterprises issued in May 2010, the Corporate Governance Report, along with the compliance certificates of Corporate Governance norms under the aforementioned LODR Regulations and DPE Guidelines, is attached and constitutes an integral part of this report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2024, the Company had nine directors of which four are whole-time directors [Chairman & Managing Director, Director (Finance), Director (Works) and Director (Projects)], one Government Nominee Director and four Independent Directors.

The Company has requested the Ministry of Railways for appointment of requisite number of Independent Directors in order to comply with the statutory requirements. Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors had designated Chairman & Managing Director (CMD) as 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 designated as Chief Financial Officer (CFO) and KMP.

Board Of Directors & Key Managerial Personnel (KMP) as on March 31, 2024

The Board of Directors of the Company as on March 31, 2024 were Executive (Functional) Directors viz.-Shri Brijesh Kumar Gupta (DIN: 10092756), Chairman & Managing Director & CEO, Smt. Ragini Advani, (DIN: 09575213), Director (Finance), Shri Parag Verma, (DIN: 05272169) Director (Works), Shri Anand Kumar Singh (DIN:07918656) Director (Projects); Part- time (Official) Director viz. Shri Dhananjaya Singh (DIN: 08955500); being Government Nominee Director 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 KMPs, as on March 31, 2024 were Shri B Mugunthan, Executive Director (Finance) & CFO and Smt. Pooja Gurwala, Company Secretary.

Appointments and cessation of the Directors and KMP during and after close of the FY 2023-24

CHANGES IN THE POST OF CHAIRMAN & MANAGING DIRECTOR

Shri Brijesh Kumar Gupta (DIN:10092756), Additional Member (CE), Railway Board and Government Nominee (Part-Time Official) Director, IRCON assumed the additional charge of Chairman & Managing Director and CEO, IRCON in addition to his own duties on April 29, 2023 until further orders of Ministry of Railways and was regularised at the last Annual General Meeting of the Company held on 12th September 2023. Further, pursuant to Order of the Ministry of Railways, Shri Brijesh Kumar Gupta relinquished the additional charge of the post of Chairman & Managing Director and CEO w.e.f. April 29, 2024 and re-designated as Government Nominee (Part

Time Official) Director of the Company, w.e.f. April 29, 2024.

Shri Ashish Bansal (DIN: 10328174), IRSE, PED/Tr. (M&MC), Railway Board [DIN:10328174] has been entrusted with the additional charge of the post of Chairman & Managing Director and CEO, IRCON in addition to his own duties w.e.f. April 29, 2024.

Further, Railway Board vide its order letter no. 2023/E(O) ll/40/15 dated 1st July, 2024, has appointed Shri Hari Mohan Gupta, (DIN: 08453476), to the post of CMD, IRCON, from the date of his assumption of charge of the post and till the date of his superannuation i.e. 30.06.2026 or until further orders, whichever is earliest. Shri Hari Mohan Gupta has assumed the charge of the post of CMD and has been designated as CEO (Key Managerial Personnel) of the Company w.e.f. 1st July, 2024 (AN). Accordingly, Shri Ashish Bansal has relinquished the additional charge of the post of CMD and ceased to be Key Managerial Personnel (CEO) of the Company w.e.f. 01.07.2024 (FN), pursuant to the appointment of regular CMD. Shri Hari Mohan Gupta, CMD is proposed to be regularized as CMD of the Company at the ensuing AGM of the Company. CHANGES IN THE POST OF FUNCTIONAL DIRECTOR Shri Anand Kumar Singh (DIN: 07918656), appointed as an Additional Director/Director (Projects) w.e.f. 7th July 2023, was regularized at the last Annual General Meeting of the Company held on 12th September 2023.

CHANGE IN THE KMP

During the financial year 2023-24, Ms. Ritu Arora ceased to be Company Secretary and Whole time Key Managerial Personnel of the Company w.e.f. 16.11.2023 and the Board of Directors of the Company, w.e.f. 28.11.2023, had appointed Ms. Pooja Gurwala, JGM/Company Affairs as Company Secretary and Key Managerial Personnel of the Company, till such time a candidate is selected and appointed at a higher level. Also, Shri Ankit Jain, Manager (Company Affairs), has been appointed as Compliance Officer of the Company under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Later on, after closure of the financial year 202324, following the Ircon''s recruitment and selection procedure, Smt. Pratibha Aggarwal has been selected as General Manager for the post of Company Secretary in IRCON and was appointed as Company Secretary and Whole time Key Managerial Personnel of the Company w.e.f. 21.05.2024 vice Smt. Pooja Gurwala.

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 LODR 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 are registered with data bank of IICA.

APPOINTMENT / RE-APPOINTMENT OF DIRECTORS THROUGH POSTAL BALLOT

Pursuant to the provisions of Section 152(2) of the Companies Act, 2013, every director of the Company has to be appointed in the general meeting of the Company. Further pursuant to LODR Regulations, every listed entity shall ensure that approval of shareholders for appointment/re-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, whichever is earlier. However, CPSEs are allowed that the approval of the shareholders for appointment or re-appointment of a person on the Board of Directors or as a Manager is taken at the next general meeting.

RETIREMENT OF DIRECTORS BY ROTATION

In terms of Section 152 of the Companies Act, 2013, the provisions in respect 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 Parag Verma, Director (Works) and Shri Dhananjaya Singh Government Nominee 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 Directors seeking re-appointment / appointment at the ensuing AGM are contained in the Notice convening ensuing AGM of the Company.

BOARD & COMMITTEE MEETINGS Board Meetings:

The Board met nine (9) times during the FY 2023-24, on April 6, 2023; May 11, 2023; May 24, 2023; July 20, 2023; August 08, 2023; October 17, 2023; November 9, 2023; November 28, 2023; and February 08, 2024. The necessary quorum in terms of LODR Regulations was present for all the meetings. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013, DPE Guidelines and LODR Regulations.

During the FY 2023-24, all the meetings of the Board were held at the Company''s Registered Office, in New Delhi, through physical and Video Conferencing mode.

Committee meetings:

Your Company''s 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 2023-24, the Audit Committee of the Board met seven (7) times, the Nomination & Remuneration Committee met six (6) times, Stakeholders'' Relationship Committee met one (1) time; Risk Management Committee of the Board met two (2) times; the Corporate Social Responsibility & Sustainability Committee met three (3) times, and the Project Progress Review Committee met one (1) time.

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 LODR Regulations, Schedule IV of the Companies Act, 2013 and guidelines issued by DPE, one separate meeting of Independent Directors was held on March 11, 2024 (which continued on March 12, 2024) 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 that operates under the administrative control of the Ministry of Railways. The appointment procedure for all directors is prescribed by the Government of India, and the directors of the Company have been appointed in accordance with this procedure. The selection of functional directors, including the Chairman and Managing Director (CMD), follows the recommendations of the Public Enterprises Selection Board (PESB) in line with the procedure and guidelines set by the Government of India. The Department of Public Enterprises (DPE) has also established a system and procedure for evaluating the performance of functional directors, including the CMD.

The evaluation framework for assessing the performance of functional directors encompasses several key areas:

a) The performance of the Company under the Memorandum of Understanding (MOU) signed with the Ministry of Railways, including the achievement of targets set for each respective director.

b) The evaluation process involves self-assessment by the functional directors themselves, followed by an assessment by the CMD, and finally, a comprehensive evaluation by the Ministry of Railways (the Administrative Ministry).

c) For the CMD, the evaluation includes self-assessment and a final evaluation conducted by the Ministry of Railways.

Regarding Government Nominee Directors, their

evaluation is carried out by the Ministry of Railways in accordance with the prescribed procedure. Independent Directors, who are also appointed by the Government of India, undergo evaluation by the Ministry of Railways and, ultimately, by the DPE.

REMUNERATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT

As a Government Company, IRCON follows the guidelines issued by the Department of Public Enterprises (DPE) for determining the remuneration of its functional directors, senior management officials, and other employees. The Company has placed the salient features of its remuneration policy for key managerial personnel and employees on its website (www.ircon.org) under the HRM and Career Sections, as required by Section 178(4) of the Companies Act, 2013.

The remuneration policy of the Company, as well as the procedures and policies for the appointment of Senior Management, are reviewed and recommended by the Nomination & Remuneration Committee before being approved by the Board of Directors.

Furthermore, under Section 197 of the Companies Act, 2013, and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, listed companies are required to disclose specific details of directors'' remuneration in the Board''s Report. However, Government Companies, including IRCON, are exempted from complying with this provision as per Notification No. GSR 463(E) dated June 5, 2015, issued by the Ministry of Corporate Affairs.

Therefore, such details are not included in the Board''s Report of IRCON. However, the remuneration paid to directors during FY 2023-24 is disclosed in the Corporate Governance Report.

INTERNAL CONTROL SYSTEMS

The Company has implemented robust financial controls in accordance with the provisions of the Companies Act, 2013. These internal financial controls over financial reporting are functioning effectively. The controls are designed to ensure the maintenance of accurate accounting records, promote the orderly conduct of business operations in compliance with company policies, safeguard company assets, prevent and detect fraud and errors, and ensure the reliability of financial and operational information. The internal control system, which includes Internal Financial Controls over Financial Reporting, undergoes periodic reviews, and necessary adjustments are made to align with evolving business needs.

Further information about the internal control system can be found in the Management Discussion and Analysis Report.

INTERNAL CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

Your Company has adopted an âInternal 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 LODR Regulations, the Company is having a Board level Risk Management Committee, which as on March 31, 2024 comprised of Director (Works) as Chairman, Director (Finance), Director (Projects), and Dr. Kartik Chandulal Bhadra, Independent Director as members.

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 Company''s 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 (CVC).

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 2023-24, the Department has carried out 01 surprise inspection and 05 periodic inspections on high-value projects. Apart from surprise and periodic inspections department has carried out 03 preventive inspections on tenders floated from the corporate office. Chief Technical Examiner''s Organisation (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 Minister''s Office, etc.,) and received from other sources were investigated to their logical conclusion.

During FY 2023-24, the Department has received a total of 22 nos. complaints and total 20 nos. complaints were disposed off including that of previous years. Nature of Complaints includes irregularities during tendering, execution of contract, anonymous & pseudonymous and quality related issues. Also steps were taken for closure of Paras raised by the Chief Technical Examiner''s Organisation (CTEO). In addition, scrutiny of immovable property returns of employees, creating awareness on rules/procedures/common irregularities in execution through workshops, training, debate, competitions, etc., have been the prime activities of the Department.

As a step towards âLeveraging of Technology'' for better transparency, online services are efficiently running since years viz, submission of immovable Property Returns since 2012-13; online Vigilance Clearance since April 1, 2014 through the intranet portal; and fling of vigilance complaints since December 2012.Further, 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 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. IRCON has implemented this Integrity Pact which is a tool developed by Transparency International 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, Shri Bimal Julka, Retired IAS, has been appointed on November 30, 2021 as an Independent External Monitor (IEM) as per revised SOP. Dr. T.M.Bhasin, Ex. Central Vigilance Commissioner, has been appointed as an Independent External Monitor (IEM) on November 18, 2020 as per earlier SOP till 17.11.2023 for 3 years subsequent to which Shri Madhusudan Prasad has been appointed on 18.11.2023 as per revised SOP dated 14.06.2023 (2nd IEM) and to receive any complaints from the bidders and submit the investigation report.

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

RELATED PARTY TRANSACTIONS

Pursuant to the provisions of Section 177 and 188 of the Companies Act 2013 (the Act) and LODR Regulations, prior approval of the related party transactions wherever applicable are taken from the Audit Committee / Board as applicable. Prior omnibus approval of the Audit Committee is also obtained on yearly basis for various Related Party Transactions between IRCON or any of its subsidiaries on one hand and a related party of the IRCON or any of its subsidiaries on the other hand in the ordinary course of business valuing not exceeding ?1 Crore for each contract / agreement / transaction in a financial year. The transactions, if any, entered into 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 2013 and LODR Regulations.

The Related Party Transaction Policy of the Company as approved by the Board is uploaded on the Company''s website under the âInvestors'' 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, 2024, and of the profit of the Company for the FY 2023-24;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) that the financial statements have been prepared on a going concern basis;

v) that internal financial controls were adequate and operating effectively; and

vi) that proper 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 AND SUSTAINABILITY REPORT

The âBusiness Responsibility and Sustainability Report" (BRSR) in compliance with the provisions of Regulation 34 of the LODR Regulations, in the format prescribed under SEBI Circular July 12, 2023 forms part of the Report. The report describes the initiatives taken by IRCON from an environmental, social and governance perspective.

MOU RATING / AWARDS

In line with the Department of Public Enterprises (DPE) guidelines, the Ministry of Railways and IRCON International Limited (IRCON) annually sign a Memorandum of Understanding (MoU). This MoU specifies selected parameters and targets for the respective financial year. The performance of IRCON is subsequently assessed at the year''s end based on the achievement of these targets.

For the financial year 2022-23, IRCON received an âExcellent'' rating based on its performance evaluation against the MoU parameters.

IRCON has been awarded several prestigious awards. Some of the significant awards and accolades won during the year 2023-24 are mentioned below:

â¢ CE&CR Annual award for âOutstanding Tunnel Structure" for the project âUdhampur- Srinagar -Baramulla New BG Rail line - Construction of Tunnel T-49 on Dharam - Qazigund Section".

â¢ Governance Now 10th PSU Award - CSR Commitment

â¢ Governance Now 10th PSU Award - Nation Building

â¢ Dun & Bradstreet award - ESG Champions of India 2024 in the Engineering & Construction services sector

â¢ Excellence in Civil Engineering, Testing and Commissioning of Rail Projects by Rail Analysis India

â¢ Top Challenger 2022-23 award by Construction World

â¢ Safety Innovation Award 2023 for implementing Innovative Safety Management Systems.

â¢ IRCON has secured 238th rank in the list of Top 250 International Contractors and 229th rank in the list of Top 250 Global Contractors published by ENR Survey 2023.

AUDITORS

STATUTORY AUDITORS

The Comptroller & Auditor General of India (C&AG) has appointed M/s Ramesh C. Agrawal & Co., Chartered Accountants, New Delhi (Firm Registration No.001770C) as the single Statutory Auditors of the Company, for FY 2023-24, except for the following foreign projects for which C&AG has approved the appointment of the following as statutory auditors:

BRANCH AUDITORS FOR INTERNATIONAL PROJECTS
Mr. AIT MIMOUN Rafik	Algeria Project
M/s Jayasinghe & Co.	Sri Lanka Project
M/s Toha Khan Zaman & Co.	Bangladesh Project
My Asia Consulting Co. Ltd.	Myanmar Project

COST AUDITORS

In pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Company has maintained the cost records of the Company. 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 2023-24 for conducting the audit of cost records.

SECRETARIAL AUDITORS

In pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the LODR Regulations, the Board of Directors has appointed M/s VAP & Associates, Company Secretaries in practice (Certificate of Practice No. 13901) as the Secretarial Auditors for conducting Secretarial Audit of the Company for the FY 2023-24.

INTERNAL AUDITORS

The Board of Directors have appointed following Internal Auditors for the Indian & Foreign Projects for the FY 2023-24:

Sl. No.	Region / Audit Circles	Internal Auditors
1.	Corporate Office Region (including Foreign Project viz. Algeria Project)	M/s A.M.A.A. & Associates, Chartered Accountants
2.	Northern Region	M/s A.M.A.A. & Associates, Chartered Accountants
3.	Eastern Region (including foreign projects viz. Myanmar Road Project, Khulna Mongla Bangladesh, Ishrudi Darsana Bangladesh S&T, and Bhairab Railway Bridge (JV) Project Bangladesh)	M/s SEN & RAY, Chartered Accountants
4.	Mumbai Region (including Foreign Project viz. Upgradation of Railway Line, Maho to Omanthai, Sri Lanka)	M/s J. Singh & Associates, Chartered Accountants
5.	Patna Region	M/s Gupta Sachdeva & Co., Chartered Accountants
6.	J & K Region	M/s Baweja & Kaul, Chartered Accountants

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

IRCON is engaged in the business of providing infrastructure facilities and is 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 2023-24 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 financial 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, 2024 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, 2024 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 Account and the same has been disclosed in the Corporate Governance report.

SECRETARIAL STANDARDS

During the financial 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 COMPANY''S 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 2023-24.

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 2023-24.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of LODR Regulations and the guidelines on âCapital 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 Policy is hosted on the Website of the Company at https://ircon.org/ images/file/cosecy/Dividend%20Distribution%20Policy. pdf.

SECRETARIAL AUDIT REPORT AND MANAGEMENT RESPONSE THERETO

The âSecretarial 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 2023-24 forms part of this report.

STATUTORY AUDITORS'' REPORT AND C&AG COMMENTS

The reports of the Statutory Auditors on the Financial Statements for FY 2023-24 (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 M/s Ramesh C. Agrawal, Chartered Accountant, Statutory Auditors, in their report for the financial year ended on March 31, 2024.

C&AG has given NIL comments on the Audited Financial Statements of your Company for the FY 2023-24 and the same are attached.

ACKNOWLEDGEMENT

The Directors of the Company would like to extend their heartfelt gratitude and acknowledgement for the invaluable assistance and cooperation received from various Ministries such as Railways, Road Transport and Highways (MoRTH), External Affairs, Finance, Commerce, Urban Development, as well as other ministries, departments, and agencies. We are also grateful for the support received from the office of Comptroller & Auditor General of India, Reserve Bank of India, Bankers, Statutory, Branch, Cost, Secretarial & Internal Auditors, of the Company, Indian Embassies & Missions abroad, Foreign Missions & Embassies in India, EXIM Bank, ECGC Limited, Protector of Immigration, Passport Authority, and our esteemed clients both within India and overseas as without their active support, the Company would not have achieved its milestones during the year under review.

We would like to express our sincere appreciation to all the dedicated employees of the Company at every level. Their unwavering efforts, dedication, sincerity and commitment have significantly contributed to achieving the highest ever performance of the Company.

For and on behalf of the Board of Directors

Sd/-

(Hari Mohan Gupta)

Chairman & Managing Director & CEO (DIN: 08453476)

Date: August 13, 2024 Place: New Delhi

Mar 31, 2023

The Board of Directors of your Company takes pride in presenting the 47^th Annual Report ofyour company for the financial year ended March 31, 2023. This report provides a comprehensive overview of the Company''s performance, including a summary of financial results and key highlights concerning the financial performance for the period ending on March 31, 2023.

FINANCIAL RESULTS

							(? in crore)
		STANDALONE			CONSOLIDATED
	PARTICULARS	FY 2022-23	FY 2021-22	%age CHANGE	FY 2022-23	FY 2021-22	%age CHANGE
Total Income / Turnover		10262	7181	42.90	10750	7586	41.71
Total Operating Income / Turnover		9921	6910	43.57	10368	7380	40.49
EBIDTA		924	641	44.15	1117	846	32.03
Profit Before Tax		883	610	44.75	891	689	29.32
Profit After Tax		777	544	42.83	765	592	29.22
Net Worth		5178	4621	12.05	5225	4667	11.96
Appropriations
Dividend (Final & Interim)*		282.15	235.13	20.00	-	-	-
Earnings per share (in ?) (Face value of ?2 each)		8.26	5.79	42.66	8.14	6.3	29.21
Notes: * Includes proposed final dividend [subject to the approval of shareholders at the ensuing Annual General Meeting (AGM)].

The Net Worth of your company has increased from ?4,621 Crore in FY 2021-22 to ?5,178 Crore in FY 2022-23. Additionally, the earnings per share as of March 31, 2023, stood at ?8.26 per share, compared to ?5.79 per share as of March 31, 2022 on a face value of ?2 per equity share.

DIVIDEND

The Company''s primary focus is on enhancing shareholder value. The Company has a consistent track record of paying dividends since its inception. In FY 2022-23, the Board of Directors declared and disbursed an interim dividend of ?1.80 per equity share of a face value of ?2/-per share. This amounted to approximately ?169.29 Crore, (calculated at 90% of the paid-up share capital of ?188.10 Crore). The interim dividend was declared based on the Company''s unaudited financial results for the quarter ending December 2022.

Furthermore, the Board has recommended a final dividend

FINANCIAL HIGHLIGHTS

We are delighted to announce that your Company has achieved highest ever total income of ?10,262 Crore during FY 2022-23, compared to ?7,181 Crore in FY 2021-22, representing a remarkable increase of approximately 42.90%.

Furthermore, the operating turnover of the Company for FY 2022-23 has a significant rise of 43.57%, reaching ?9,921 Crore, compared to ?6,910 Crore in FY 2021-22. This growth can be attributed to a healthy order book and efficient execution of projects.

In terms of profitability, the Profit Before Tax pBT) for FY 2022-23 reached ?883 Crore, an impressive increase of 44.75% compared to ?610 Crore in FY 2021-22. Similarly, the Profit After Tax pAT) has shown substantial growth, reaching ?777 Crore in FY 2022-23, a growth of 42.83% from ?544 Crore in FY 2021-22.

of ?1.20 per equity share on the face value of ?2/- each, totaling ?112.86 Crore (60% of the paid-up share capital of ?188.10 Crore). This final dividend is subject to approval from the shareholders at the ensuing AGM and is based on the Company''s profits for FY 2022-23.

Considering these dividends, the total dividend for FY 2022-23 would amount to approximately ?282.15 Crore (150% of the paid-up equity share capital of ?188.10 Crore). This represents 36.31% of the post-tax profits for FY 2022-23 and 5.45% of the net worth of the Company as of March 31, 2023. Upon approval and payment of the proposed final dividend, the cumulative dividend paid to shareholders until FY 2022-23 will stand approximately ?2,656.62 Crore.

The declaration of dividends aligns with the Dividend Distribution Policy, which complies with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), as amended, and the guidelines on "Capital Restructuring of Central Public Sector Enterprises."

SHARE CAPITAL

As on March 31, 2023, the paid-up equity share capital of the Company stood at ?188.10 Crore comprising of 94,05,15,740 equity shares of face value of ?2/- each. 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, 2023. IRCON is compliant on the Minimum Public Shareholding (MPS) requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957.

Based on the market price of Ircon International Limited (IRCON) as on March 31, 2023, it is placed in the top 500 listed companies. As on March 31, 2023, the market capitalization of your Company stood at ?5266.89 Crore.

DEMATERIALISATION OF SHARES

All the shares, except only 5407 shares as on March 31, 2023 and 2407 shares as on June 30, 2023 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 RETAINED EARNINGS

Appropriations to retained earnings for the financial year ended March 31, 2023 were ?494.85 Crore after considering the total dividend of ?282.15 Crore.

CAPEX AND LIQUIDITY

During the year, the Company on a standalone basis spent a sum of ?448.96 Crore on capital projects across domestic and foreign projects; which includes ?10.56 Crore towards

construction of a building; ?9.52 Crore for acquiring Plant & Machinery; ?5.49 Crore for acquiring other assets; and ?423.39 Crore towards investments in SPVs.

The Company''s liquidity position remains strong at ?4785.32 Crore as on March 31, 2023, comprising of ?2168.41 Crore in cash and cash equivalent and ?2616.91 Crore in other bank balances. Out of ?4785.32 Crore, client/ project funds amount to ?3942.09 Crore.

The Company has also invested ?423.39 Crore in the equity / quasi-equity of its subsidiaries and joint venture companies during the FY 2022-23, which stood at ?1912.4 Crore as on March 31, 2023.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned a foreign exchange of ?19080 Crore cumulatively till date. During FY 2022-23, the Company has earned a foreign exchange of ?432.99 Crore as compared to ?521.26 Crore in FY 2021-22. The foreign exchange outgo stood at ?406.83 Crore during FY 2022-23 as compared to ?467.10 Crore during FY 2021-22. Thus, the net foreign exchange earnings amount to ?26.16 Crore in FY 2022- 23.

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 ?10750 Crore (previous year: ?7586 Crore). The Group has registered a quantum jump of 40.49% in operating turnover to ?10368 Crore (previous year ?7380 Crore). The Group reported a consolidated profit before tax of ?891 Crore (previous year ?689 Crore) and profit after tax of ?765 Crore (previous year: ?592 Crore), both registering increase of 29.31% and 29.22%, respectively.

The Group EBITDA was ?1117 Crore (previous year: ?846 Crore), an increase of 32.03% over the previous year.

During the FY 2022-23, in terms of the financial performance, the Company has achieved and crossed the Turnover targets criteria of ?8875 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.

During the FY 2022-23 the Company had made a contribution of ?1.53 Crore towards Prime Minister''s 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 24, 2023, had approved the Financial Statements for FY 2022-23 (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-by- line 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 Vadodara Kim Expressway Limited (IrconVKEL), Ircon Gurgaon 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 2022-23.

initiated in FY 2021-22 are yet to be completed. The liquidation process shall commence on completion of these activities and handing over of assets and liabilities to RLDA/ MoR. Financial statement of IRSDC has been prepared on liquidation basis. The Company does not foresee any impairment in the value of its investment as the Company''s share in the reported Net Worth of IRSDC is ?58.50 Crore i.e.26% of ?225 Crore vis-a-vis our shareholding of ?52 Crore.

The Company would make available its audited financial statements (standalone and consolidated) for the FY 2022-23 and financial statements of its eleven subsidiaries (IrconISL, IrconPBTL, IrconSGTL, IrconDHHL, IrconVKEL, IrconGRHL, IrconASEL, IrconLRHL, IrconBMEL, IrconHBL & IRPL) at its website (www.ircon.org).

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

Considering the COVID-19 pandemic and the challenges associated with dispatching physical copies of financial statements, including the Notice of AGM, Board''s Report, Auditor''s Report, and other related documents, the Ministry of Corporate Affairs (MCA) and Securities and Exchange Board of India (SEBI) have issued guidelines. Accordingly, such statements & documents can be sent exclusively via e-mail to members who have registered their email addresses with the company or with the depository participant/depository, as well as to other eligible persons. These relaxations have been extended until September 30, 2023, as per circulars dated December 28, 2022 and January 5, 2023 issued by MCA and SEBI respectively .

Taking into account these relaxations and as part of our commitment to environmental sustainability, the Notice of AGM and Annual Report will be electronically delivered to shareholders who have already registered their email addresses with the respective depository participants. These documents will be accessible on the Company''s website and will also be provided to the stock exchanges, namely BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

MANAGEMENT DISCUSSION AND ANALYSIS

units, financial and operational performance, projects executed during FY 2022-23, upcoming projects, strengths, scope and opportunities, key concerns, business strategies, risk management, adequacy of internal control systems, and significant developments in human resources.

EXTERNAL ENVIORNMENT

MACROECONOMIC CONDITIONS

International Monetary Fund (IMF) in its World Economic Outlook (April 2023), predicted global growth of 2.8% in 2023, with a slight improvement to 3.0% in 2024. Despite of global headwinds, India''s economy is expected to grow at a faster pace than the global average and it is expected to grow at 5.9% in 2023 and 6.3% in 2024. The slowdown is concentrated in advanced economies, especially the euro area and the United Kingdom.

Global headline inflation is set to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices, but underlying (core) inflation is likely to decline more slowly. Inflation''s return to target is unlikely before 2025 in most cases. Once inflation rates are back to targets, deeper structural drivers will likely reduce interest rates toward their pre-pandemic levels.

India''s GDP growth for FY 2023-24 anticipated by the RBI is 6.5% in its monetary policy (April 2023). However the key concern on the growth front in the immediate future is the drag caused by the weak external demand conditions and the impact of any adverse weather conditions on Indian agriculture provides additional downside risk to the growth trajectory.

INFRASTRUCTURE & CONSTRUCTION INDUSTRY -GOVERNMENT INITIATIVES & INDUSTRY OUTLOOK

Infrastructure plays a huge role in propelling other industries and India''s 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. PM launches Gati Shakti Master Plan to integrate different modes of transportation and increase the speed of infrastructure development in India.

The construction Industry in India is expected to reach $1.4 Tn by 2025. Under National Infrastructure Pipeline (NIP), India has an investment budget of $1.4 Tn on infrastructure 24% on renewable energy, 18% on roads & highways, 17% on urban infrastructure, and 12% on railways. Government thrust for developing 35 Multimodal Logistics Parks (MMLPs) at a total capital cost of $ 6.1 Bn,

will cater to 50% of the freight movement and further boost infrastructure development in the country.

Indian Railways have prepared a National Rail Plan (NRP) for India - 2030 to create a ''future ready'' Railway system by 2030. The NRP is aimed to formulate strategies based on both operational capacities and commercial policy initiatives to increase modal share of the Railways in freight to 45%. The objective of the Plan is to create capacity ahead of demand, which in turn would also cater to future growth in demand right up to 2050 and also increase the modal share of Railways to 45% in freight traffic and to continue to sustain it.

The government announced 5,000 km of Metro rail network by 2047 in 100 cities. One Station One Product scheme aims to provide opportunities for enhanced livelihood through skill development through provision of sale outlets at railway stations across India. Station redevelopment project will boost the passenger experience, generate new employment opportunities and have a multiplier effect on India''s economy. Taking cognizance of its significance in overall infrastructural development, the NIP envisages the investment in Indian Railways worth ?11.43 lakh crore (US$ 138 billion) till FY 2024-25.

With the objective to bring down logistics costs below the national average by 2028 to make exports globally competitive, the Government has made a plan of ?100 lakh crore investment in infrastructure with some mega projects such as the doubling of railway lines, their widening, dedicated freight corridors from Mumbai to Delhi and Amritsar to Kolkata besides 11 other industrial corridors.

Vision 2024 has been envisaged to achieve targets of 2024 MT freight loading by 2024. Government is working towards the development of a national highway network of 2 lakh kilometers by 2025. Indian Railways has planned to install 1000 MW of solar power plants and about 200 MW of wind plants by 2022-23. Out of this, about 204.82 MW (101.42 MW solar and 103.4MW wind power) renewable power has already been set up.

In Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to ?10 lakh crore (US$ 122 billion), which would be 3.3% of GDP. A network of 35 Multimodal Logistics Parks is planned to be developed as part of Bharatmala Pariyojana, with a total investment of about ?46,000 crore (US$ 5.5 billion), which once operational, shall be able to handle around 700 million metric tonnes of cargo. Of this, MMLPs at 15 prioritized locations will be developed with a total investment of about ?22,000 crore (US$ 2.6 billion).

A capital outlay of ?2.40 lakh crore (US$ 29 billion) has

been provided for the Railways, which is the highest ever outlay and about 9 times the outlay made in 2013- 14. 100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified and will be taken up on priority with investment of ?75,000 crore (US$ 9 billion), including ?15,000 crore (US$ 1.8 billion) from private sources. 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.

A total length of 24,800 kms in road projects have been proposed to be constructed with an estimated outlay of ?5.35 trillion (US$ 74.15 billion) under Bharatmala Pariyojana Phase-I. NHAI will consider only those projects that require minimal land acquisition worth ?3 trillion (US$ 42.92 billion) under Bharatmala Pariyojana scheme. A total of 65,000 kms of roads and highways are to be constructed under Bharatmala Pariyojana. In 2023-24, NHAI is allocated ?1.62 lakh crore (US$ 20 billion), all of which is budgetary support.

In Budget 2023-24, the Government of India has allocated ?2.7 lakh Crore (US$ 33 billion) to the Ministry of Road Transport and Highways. The Roads sector is expected to account for 18% capital expenditure over FY 2019-25. The government also aims to construct 23 new national highways by 2025.

These budget allocations are aimed at improving existing infrastructure, building new projects, and addressing the infrastructure gaps across the country.

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 change in their 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.

The order book as on March 31, 2023, is ?35195 Crore as compared to ?43758 Crore as on March 31, 2022. The major new orders are from railway electrification, highway project, metro track works, workshops, airports and renewable energy; also civil and track work in prestigious High Speed Railway Project. The order book as on June 30, 2023 stood at ? 32,486 Crore.

DOMESTIC PROJECTS

Since incorporation, the Company has diversified into

various infrastructure sectors and is now an established player in the field of railway and highway construction. Moreover, it has diversified in many other areas such as power transmission lines, sub-stations industrial complex, bridge and flyovers, tunnels, electrical and mechanical work, signaling and telecom, production units, station building, multi-function complex, and construction of commercial, residential complexes, 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.

During the FY 2022-23, your Company was awarded the projects in India viz., establishment of Railway Sidings along with Railway Station contagious to Mine Lease Boundary of Gere Pelma Sector-III Coal Mine, PMC services for Signaling & Telecommunication system; and development of Rail Infrastructure for proposed 02 nos. RLS (20 MTY) for Ananta OCP of Jagannath Area, at Talcher. IRCON has also been engaged for Central Public Sector Undertaking (CPSUs) for development of New Industrial Estates in Union Territory of Jammu and Kashmir.

During FY 2022-23 the following two projects have included in the completed projects category. With this, IRCON has completed more than 400 completed domestic projects.

â¢ Construction of Eight lane Vadodara Kim Expressway from Km. 323.000 to 355.000 (Sanpa to Padra Section of Vadodara Mumbai Expressway) in the State of Gujarat under NHDP Phase - VI on Hybrid Annuity Mode (Phase IA-Package II).

â¢ ECR - Doubling between Hazipur - Bachwara with electrification project (72km) including planning, design and construction of all service and residential buildings, circulating area, parking, platforms, subways, shelters and other allied structures of all stations, including Electrical, Signal & Telecommunication works and any other works.

ONGOING PROJECTS:

A list of ongoing major projects in India is given at Appendix-A.

In FY 22-23, the focus of your Company has been execution, faster deliveries and meeting stringent timelines for overall optimal contribution to the much needed infrastructure growth. This is in line with the vision of our Hon''ble Prime Minister and Hon''ble Minister of Railways. During the FY 2022-23 following were some

of the achievements of on-going major projects in India:

1. Udhampur Srinagar Baramulla Rail Link Project (USBRL) in J&K (cost plus contract awarded by Northern Railways having revised estimated cost of ?13557.47 Crore): Milestone of 23.4 Km of tunnel lining has been completed in the FY 2022-23 and a total of 94.162 km length [Comprising Main Tunnel (MT) Escape Tunnel (ET) & Cross Passage (CP)] has been completed in the section between Katra to Banihal. Further, breakthrough of 13.18 Km of MT and 32.34 Km of ET were also achieved. Project has also achieved its highest ever expenditure booking of about ?2899.40 Crores. The execution of project is in advanced stage and is targeted for commissioning in FY 2023-24.

2. Sivok Rangpo New BG Rail Line Project (cost plus contract awarded by Northeast Frontier Railways having revised estimated cost of ?8248 Crore): Total Tunnel Mining and Lining completed in the FY 2223 is 11.60Km & 2.28Km respectively. Mining in six tunnels have been completed. Milestone of second breakthrough of Tunnel T-5 achieved on 18.06.2022, third breakthrough of Tunnel T-9 on 19.10.2022, fourth breakthrough of Tunnel T-2 (896 m.) on 23.11.2022, Fifth breakthrough of Tunnel T-12 (1404 m.) on 24.12.2022, sixth breakthrough of Tunnel T-11 (3232 m.) on 23.01.2023 and longest Adit tunnel of this project i.e. Adit-1 (1144m) of Tunnel T-10 on 19^thFeb, 2023. Work is in progress in all the 14 tunnels, 13 major bridges and 4 yards. Overall progress of project is 50%. 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. Dedicated Freight Corridor Project (Vaitarana - Sachin Section of Western Dedicated Freight Corridor Phase-2), Civil, Building and Track Works, Package -CTP-12: EPC Contract awarded by Dedicated Freight Corridor Corporation of India Limited (DFCCIL): Revised estimated cost of work shall be ?3353 Cr. Works completed and trial run done in Sachin - Gholvad section, 110 Route km out of 186 Rkm. Balance works in Gholvad - Vaitarana section are progressing well.

4. Rampur Dumra-Tal-Rajendrapul (cost plus project awarded by East Central Railway having revised estimated cost of ?1701 Crore) : The Project comprises Design & construction of Main Bridge having total length of 1874m with 17 spans, Rail Viaduct of 3.2km, 2 nos. ROBs, 3 nos. RORs, one RUB, Embankment of around 11.3 km, 8 nos. Minor bridges and track linking works including electrification. Casting of 15 and sinking of 11 out of 18 wells, one abutment and seven pier cap have been cast. Erection of 6 nos. open web girder also launched. Formation

marks a significant milestone as the first-ever semihigh-speed Rapid Rail Project in India to achieve the

design speed of 180kmph and operation speed of

160kmph.

Major achievements are as follows:

â¢ Introducing Spring type ATD of 3000 kgf tension, Glass Fibre Tension Insulator at insulated overlap, Retractable Catenary System, which have been used for the first time in India for design speed of 180 kmph;

â¢ Commissioning of 220 kV, 33 kV & 25 kV Gas Insulated Sub-stations (GIS), which are compact in size, low in maintenance and reduce the requirement of space;

â¢ Commissioning of overhead equipment (OHE) of priority section of the project from Sahibabad to Duhai including Duhai Depot, covering a distance of 17 RKM, in record time;

â¢ Delivering results by initiating the trial run on 5th January ''23;

â¢ Commissioning of 2 nos. of 220kV Receiving Sub Stations (Ghaziabad RSS & Murad Nagar RSS), associated 220 kV EHV Cabling from GSS to RSS and 5 nos. of 33 kV Auxiliary Sub Stations (ASS);

â¢ Civil works at the RSS locations have been executed in compliance to achieve highest rating of IGBC;

â¢ Achieved ISO 45001:2018 (Occupational Health & Safety Management System) and ISO 14001:2015 (Environmental Management System) certification for NCRTC Project;

INTERNATIONAL PROJECTS

In FY 2022-23, the contribution of international projects to the total revenue amounted to ?411.84 Crore, which accounted for 4.15% of the operating turnover. This is in comparison to ?480.43 Crore in FY 2021-22, representing 6.95% of the operating turnover. Regarding PBIT, the contribution from foreign projects reached ?100.41 Crore, indicating an increase of 96.67% compared to ?51.03 Crore in the previous year.

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 geographical 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 agencies.

work on north side along with flood protection works have been completed and on south side of river 25.98 lac cubic meter against the scope of 28.36 lac cubic meter earth work is completed. Seven out of eight minor bridge, one RUB and substructure for two ROBs also completed. Piling works on the all 3 RORs completed and pile cap casting is in progress (50% works completed). All the structural steel for important bridge, ROBs and RORs procured. Work on 3.6 Km long via duct is also progressing well and till date 927 nos. of piles out of 1000 nos., 61 pier caps and 12 pier shaft out of 101 nos. piers have been completed. The balance work is progressing well.

5. Katni-Singrauli Doubling Project (cost plus project awarded by Western Central Railways having revised estimated cost of ?2445 Crore) : Total 78.29 Km sections was commissioned during FY 2022-23. During FY 2023-24, total 49.21 Km has been targeted. CRS (Commissioner of Railway Safety inspection) has inspected 19.13 Km section of Mahroi - Vijaysota on 27.06.2023. Another section of 30.11 Km is planned in December 2023 and 7.51 Km during FY 2024-25, total 180.5 Km out of 257 Km has been commissioned so far.

6. Katni-Singrauli Doubling Project (Railway Electrification Work): Railway electrification work commissioned in Katni-Singrauli Doubling project during FY 2022-23 is 78 RKM. Total 180.5 Km electrification completed with doubling.

7. Kiul-Gaya Doubling Project (cost plus project awarded by East Central Railways having revised estimated cost of ?1200 Crore) : CRS inspection (Commissioner of Railway Safety inspection) of Wazirganj-Tilaiya section (18.01 Km) was conducted on 02.09.2022 and the section was commissioned at a permissible speed of 100 kmph; and, the entire Lakhisarai -Sheikhpura section (25.32 Km) was commissioned with 100 kmph on 21.02.2023. Total 61.48 Km has been commissioned so far. Rest 61.64 Km has been planned during FY 2023-24. During FY 2023-24, 1.405 Km of Kashichak yard commissioned on 31.05.2023.

8. Sports Complex at Gholsapur, Behala Stadium, Eastern Railway Kolkata (the revised estimate of ?80.82 Cr.): An international standard fully air-conditioned multi-purpose Indoor Stadium with state-of-the-art facilities at Behala was inaugurated on May 30, 2022.

9. NCRTC Project (Revised Estimated Cost of ?723 Crore): IRCON has secured the prestigious ADB (Asian Development Bank) funded OHE & Power Supply Work of Delhi-Ghaziabad-Meerut RRTS Corridor of NCRTC through International Competitive Bidding. It

During the year 2022-23, your Company has secured the order of Procurement of Design, Installation, Testing, Commissioning and Certifying of Signaling and Telecommunication System from Maho Junction (Including) to Anuradhapura (Excluding) in Sri Lanka under Indian Line of Credit.

ONGOING PROJECTS

The Company is executing the following projects in foreign countries:

i. Bangladesh

(a) Khulna-Mongla Port Rail Line project

The Company secured a project in Bangladesh for construction of Khulna-Mongla Port Rail Line for Bangladesh Railway, at US$ 147.78 million (equivalent to approx. ?911 Crore) and after approval of VO-2 at cost of US$ 185.73 million. 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. Additional scope of work was added in 2021. The completion tenure is extended upto September 2023, along with the additional scope of work including rehabilitation of 5 major bridges and 16 nos. of culverts and pending approval for variation VO-3.

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

The Company has also signed a contract for providing Technical Advisory Services (TAS) for Construction of New Railway Line from Agartala (India) -Akhaura (Bangladesh) 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 was extended up to June 30 2023, however the trial run of loco is planned by 22.08.2023. The overall progress of the project is approximately 88.24 %.

ii. Algeria

The project was awarded by ANESRIF, the National Agency for the Planning 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 on 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 construction of the double line, has been revised to Algerian Dinar 3,268 Crore (equivalent to approx. ?2,342 Crore).

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

The work of 82 km new track line has been made operational in spite of the cash flow problems of ANESRIF which is hampering progress, particularly the structural works awarded to sub-contractors. Work on the existing line has also started and a total stretch of 71.5 km out of 74 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

(a) Upgradation of Railway Line from Maho Omanthai under Indian Line of Credit - Track Rehabilitation and ancillary works.

In Sri Lanka, the Company secured a project for Upgradation of Railway Line from Maho Omanthai under Indian Line of Credit - Track Rehabilitation and ancillary works. The project is awarded by Sri Lankan 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) through competitive bidding.

Scope of work is rehabilitation of existing single line Broad Gauge track from Maho-Omanthai of around 128 km length in Two Phases under Traffic Block of 5 Months and 6 Months. The project was awarded on 29th April 2019 with completion period of 36 months (starting from date of receipt of advance payment, 29^th Nov,2019). 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 project is delayed due to CoVid-19 pandemic restrictions and subsequent economic and fuel crisis in Sri Lanka.

The first phase of the Mega Traffic Block from Anuradhapura and Vavuniya (48.5KM) has been commissioned in July, 2023.

Further, granting 2^nd Phase Traffic Block for rehabilitation of the remaining section from Maho to Anuradhapura (65 KM) is under discussion and not yet concluded. Likely date of completion of the Project will be June 30, 2024.

The overall progress of the project is approx. 62%.

Ch. Km 68.72. The proposed alignment in the 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.

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

v. Myanmar

During FY 2022-23, the Company has secured a project in Myanmar, 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 agreement for the execution of this project has been signed on March 07, 2022 and the project is to be completed within 40 months from the date of the signing of the agreement.

At present, in 50 Km stretch, work has commenced in 40 Km from Paletwa end (Myanmar) & 10 Km from Zorinpui end (India-Myanmar Border). Work in the remaining 50.90 Km stretch is expected to start after Oct''2023 once the monsoon season is over.

REAL ESTATE SECTOR

(b) Procurement of design, installation. Testing, commissioning, and certifying of Signaling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) under Indian Line of Credit:

Your Company also secured a project for "Procurement of design, installation, Testing, commissioning, and certifying of Signaling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) under Indian Line of Credit".

The project was awarded on December 04, 2022 by Sri Lankan Railways under the Ministry of Transport and Civil Aviation, Government of Sri Lanka at a value of US$ 14.90 Million (equivalent to approx. ?121.25 Crore) through competitive bidding. Completion period is 12 Months from the date of receipt of mobilization advance.

The project is financed through EXIM Bank of India under Indian line of credit. Contract Agreement is not yet signed due to prevailing economic conditions in Sri Lanka. As such, the project is yet to start.

iv. Nepal

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

(a) Construction of BG line between Jogbani (India)-Biratnagar (Nepal) 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 contract of ?401.65 Crore is under approval of the Ministry of External Affairs.

The section from Bathnaha (India) Ch. 0.00 Km to Nepal Custom Yard (Nepal) Ch. 6.70 Km has been completed and ready for commissioning. The work is in progress in the remaining portion. Progress is hampering due to obstructions being created by local land owners.

The overall progress of the project is approximately 86%.

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

The Project involves construction of a new BG rail line from Jaynagar (India), Ch. 0.00 Km to Bijalpura (Nepal) Km.52.336 with extension up to Bardibas,

in Sector 32, Gurugram, Haryana and this property is registered with the trademark authorities in India as ''IRCON INTERNATIONAL TOWER''. About 2079Sq. mt. carpet Area of this property has been Leased Out to government agencies and balance available space is in the process of leasing out.

IRCON Retail Mall at Sector - 43, NOIDA, Uttar Pradesh and Commercial cum Office Building at Sector -48, NOIDA, Uttar Pradesh has been leased out completely.

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. Since MoU has expired and the work being unable to commence on account of non-finalization of agreement between Mumbai Metropolitan Region Development Authority (MMRDA) and RLDA / MoR, the land has been returned back to RLDA and consultancy contracts for commercial development of the plot have also been novated to RLDA.

COMPANIES, JOINT VENTURE COMPANIES AND ASSOCIATE COMPANIES

A brief background on the eleven subsidiary companies and seven joint ventures companies of IRCON along with their financials and performance is given at Appendix-B.

In terms of the Company''s Policy on the determining the "Material Subsidiary" and Regulation 24A of the LODR Regulations, for the financial year ending March 31, 2023, 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, 2022.

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 IRCON''s internal website for use by the employees.

COMPLIANCE OF RIGHT TO INFORMATION ACT, 2005

In accordance with the provisions of the Right to Information Act, 2005, IRCON has ensured the availability of updated information, including the names of the Appellate Authority, Central Public Information Officer, Assistant Public Information Officer, and State Level Public Information Officers on our website. We have promptly responded to the queries received within the specified time frame. These queries primarily pertained to service matters, recruitments, finance, contracts, corporate social responsibility (CSR), and projects. The details of RTI cases have been regularly published on the website of the Central Information Commission (CIC) on a quarterly and annual basis. Additionally, a copy of the same is forwarded to the Ministry of Railways for information.

During the year 2022-23, 204 applications and 38 first appeals were received and at the beginning of the year 01 application was under process for disposal within the allowable time limit (i.e., total 205 applications and 38 appeals during the year). Out of which, 193 applications (including opening balance of 1 application) and 38 First Appeals were disposed of. As on March 31, 2023 12 applications and 02 appeals were under process for disposal within the allowable time limit.

COMPLIANCE OF IMPLEMENTATION OF PUBLIC PROCUREMENT POLICIES FOR MSEs AND PREFERENCE TO MAKE IN INDIA.

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

performance of its workforce, as well as maintaining a positive work environment. It is committed to establishing a collaborative, inclusive, and performance-driven atmosphere that fosters learning, growth, and overall employee well-being.

IRCON''s Human Resource (HR) Philosophy revolves around empowering and nurturing employees, allowing them to reach their full potential, encouraging innovative ideas, and providing rewards based on performance. The company''s work culture is characterized by openness and dynamism, empowering employees to take initiative in their roles with full support from top management.

At IRCON, the Human Resource Management (HRM) team is dedicated to recruiting, retaining, and developing the right people. They continuously strive to create an optimal work environment that is inclusive, open, diverse, and provides equal opportunities for all employees. The company has aligned its HR strategy, systems, and procedures with its business objectives, focusing on building competencies necessary for organizational success. This strategy serves as a motivating force for employees, bridging the gap between the company''s future needs and individual aspirations.

IRCON maintains a performance-oriented culture where the contributions of every employee are measured and appropriately recognized. The Company has implemented a robust Performance Management System (PMS) that aligns with its philosophy of rewarding and acknowledging merit at all levels. This system supports the professional development of executives through a structured approach integrated into the company''s performance appraisal process. IRCON takes pride in its highly motivated and competent human resources and acknowledges their significant contributions.

MANPOWER STRENGTH

The total manpower strength of IRCON as on March 31, 2023, stood at 1341, (previous year 1278) which included 933 regular employees, 35 employees on deputation, 369 on contract (including service contract) and 04 on fixed tenure basis. Out of the total 1341 employees of the Company, 1284 are posted on Indian projects and 57 on international projects. Among 1341 employees, 900 are technically and professionally qualified. There was a total of 65 women employees as on March 31, 2023.

The overall income per employee for FY 2022-23 stood at ?7.65 Crore as compare to ?5.62 Crore in FY 2021-22.

During the year, the total newly employed personnel stood at 266 which included 69 regular employees, 9 employees on deputation, and 188 on contract (including service contract).

(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.

The company has been extensively following the guidelines of Government on procurement through GeM and provisions are also made in tenders to promote "Make in India" directives of the Government of India. Tenders valuing upto ?200 Crore were invited during FY 202223 using national competitive bidding in compliance to Public Procurement (Preference to make in India), Order 2017.

During the FY 2022-23, the Company has procured items valuing ?44.52 Crore from MSE vendors against expenditure valuing ?102.39 Crore (excluding the procurement of items which are beyond the scope of MSEs) towards material, stores & service, thereby achieving 43.48% procurement from MSEs in compliance with the Procurement Policy. The Company has conducted one national level Special Vendor Development Program at the Corporate Office, Delhi on December 16, 2022.

HUMAN RESOURCE DEVELOPMENT

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 521 SC / ST / OBC and differently-abled employees as on March 31, 2023.

Further, during the FY 2022-23, out of the 66 employees inducted against regular posts, 29 belong to SC / ST / OBC and differently-abled categories. Similarly, out of the 164 employees recruited against the contractual positions, 84 belong to SC / ST / OBC and differently-abled categories.

During the FY 2022-23, training has been given to 437 employees, out of which 171 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 2022-23, inhouse training programmes across all levels of employees were organised. Professional programmes, workshops, 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 -2022-23 a total 816 man-days training was imparted to officials of IRCON through workshops, seminars, conferences, in-house training and training in external institutes.

EMPLOYEE WELFARE

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

Your Company is dedicated to creating a supportive and secure working environment for its women employees. The Company has implemented a comprehensive policy for the Prevention, Prohibition, and Redressal of Sexual Harassment at the Workplace, which applies to all employees, including regular employees, deputationists, temporary workers, ad-hoc employees, contract workers, daily wage workers, and individuals employed through agencies or contractors. This policy, along with its details, can be accessed on the Company''s website. Furthermore, this policy extends to wholly-owned subsidiary companies of IRCON that are formed as Special Purpose Vehicles.

Your Company has ensured compliance with the provisions concerning the formation of the Internal Committee (IC) as mandated by the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The IC comprises five members, including four Company officials and one external member from an NGO. Additionally, provisions related to the prohibition of sexual harassment have been incorporated into the IRCON''s Conduct, Disciplinary, and Appeal Rules. At the beginning of the year, no complaint was pending. During the year, one complaint of sexual harassment was received and it was appropriately addressed within the stipulated time frame. As of the end of the year, no complaint was pending.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Your Company is deeply committed to addressing social, ethical, and environmental concerns within the areas where it operates. We strive to contribute to the development of a sustainable society for future generations while meeting the expectations of our stakeholders. Throughout the years, IRCON has identified various Corporate Social Responsibility (CSR) concerns and implemented actions and initiatives that have had a positive impact on society and the environment. Our CSR activities cover a wide range of areas, including health, education, employment and skill development,

environmental sustainability, clean water and sanitation, sports, culture and heritage, rural transformation, and contributions to the PM CARES Fund.

To guide our CSR efforts, we have the Corporate Social Responsibility & Sustainability Policy (CSR Policy) in alignment with our Company''s vision. This policy lays down guidelines and mechanisms that the Company must adhere to when carrying out CSR projects. In accordance with the guidelines issued by the Department of Public Enterprises (DPE) through their Office Memorandum dated December 10, 2018, along with the update on May 12, 2021, CPSEs (Central Public Sector Enterprises) are required to follow a theme-based approach for their CSR activities. The Company allocates a minimum of 60% of their annual CSR budget for thematic programs and give preference to the Aspirational districts in their CSR initiatives. For the fiscal year 2022-23, the common theme chosen by DPE for CSR activities of CPSEs is "Health & Nutrition." By adhering to these guidelines and embracing the chosen theme, we are actively working towards making a positive difference in society and contributing to the well-being of our communities.

During the past year, our company took a focused approach to conceive and implement CSR activities with the aim of generating maximum impact for the target beneficiaries. These initiatives were carried out in collaboration with reputable implementing agencies. In the fiscal year 2022-23, the actual expenditure on CSR activities amounted to ?10.12 Crore, surpassing the allocated budget of ?10.10 Crore. Within this budget, a significant portion was dedicated to the health sector, including a contribution of ?1.53 Crore to the PM CARES Fund.

The CSR Policy, which provides comprehensive guidelines for conducting CSR activities, is available on our Company''s website: www.ircon.org. Furthermore, the Annual Report on CSR & Sustainability activities, in compliance with Section 135 of the Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is appended to this report, forming an integral part of it.

QUALITY, HEALTH AND SAFETY

QUALITY MANAGEMENT SYSTEM

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 September, 2022, 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 2026.

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM

The Company established an Occupational Health & Safety Management System and was certified for ISO 45001:2004 in October, 2011. The latest surveillance audit for ISO 45001:2018 was conducted in August 2022, whereby the Company has been re-certified for another two years, i.e. up to December, 2024.

ENVIRONMENT MANAGEMENT

The Company established an Environment Management System (EMS) and was certified for ISO 14001:2004 in October 2011. The latest re-certification audit for ISO 14001:2015 was conducted in November 2022 whereby the Company has been re-certified for another three years, i.e. up to February 2026.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND UPGRADATION

IRCON is conscious of the limited nature of conventional sources and the importance of using 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 during previous years:

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. IRCON has also installed a total of 75 kW Roof Top Grid Connected Solar Power Plant at its Gurgaon office building.

b) Capacitor banks have been installed at Corporate Office building to improve power factor, which further reduces the Electrical Energy consumption.

c) The internal lighting of Corporate Office building by energy-efficient LED lamps also adds in an energy saving of approx. 3,00,000 units of kWh per annum when compared with normal lights.

d) Automatic / Dynamic Reactive Power Factor (APF) correction / compensation panels of Insulated

Gate Bipolar Transistors (IGBT) technology of 10.7 MVAR capacity have been designed and are being instal l ed at the Receiving Su bstations (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, Katni-Singrauli RE Project, etc. and are also planned to be installed at USBRL E&M Tunnel Project.

f) Capacitor Banks of 2400 kVAR capacity each have also been installed at Baramulla, Qazigund & Budgam TSS (J&K) for USBRL RE project and 04 Nos. Traction Sub-Stations (TSS) of Katni-Singrauli Project to improve the power factor. Further, Capacitor Banks of 5500 kVAR capacity each have been installed in Lalkuan & Kashipur TSS of Moradabad-Kashipur RE Project of Izzatnagar division. More than 34,750 units of electricity on a daily basis will be conserved on installing capacitor banks once electric trains are in operation. Moreover, for Tunnel Substations a total of 16 MVAR capacitor banks are being installed to regulate the reactive power generation due to jet fans, thereby reducing energy consumption.

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

The Company is utilising the following as an alternate source of energy:

a) IRCON 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 has planned to invest ?4.2 Cr. approximately for replacing the existing Heating, Ventilation & Air Condition (HVAC) System at Corporate office with new technology Energy Efficient Inverter Type Air Conditioning System which will reduce the energy consumption by 20-30%.

Further, the old refrigerant of R-22 shall be replaced by the new technology refrigerant R-410A which is environment friendly and reduces the carbon emissions helpful in sustainable development.

TECHNOLOGY ABSORPTION AND UPGRADATION EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION:

Towards technology upgradation, the Company had purchased a New Track Construction (NTC) machine in 2019 for Dedicated Freight Corridor Project, CTP-12 (DFC project), which is successfully commissioned to improve productivity, safety, efficiency and quality in track laying at DFC Project.

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 company has procured rail welding machine under Make In India scheme and is in the process of commissioning. 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) - N.A.

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

IRCON has recently upgraded to SAP S/4 Hana as Enterprise Resource Planning (ERP) application software for the operations of Finance, Controlling and Human Resource Management. 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 and helps in preparation of Financial Statements of the Company. Employee Self Service Portal, Finance and HCM modules of SAP have been rolled out for entire organization and five pilot locations are under go live for full functionalities. The financial statements for the year ended March 31, 2023 were prepared from SAP S4-HANA and salaries of employees are also being processed through its payroll module from April 2022 onwards. Fully functional SAP S4-HANA after implementation will cover end-to-end business processes of IRCON. S4-HANA ERP software''s 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.

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

Dedicated video conferencing facility based on cutting edge AI based online meeting is being widely used for conducting review meetings with project offices, trainings, promotion interviews and contract management issues etc.

Cyber and Social Engineering attacks are a big concern now a days for organizations information security. IRCON has made efforts in this area and has formulated a Cyber Security Management Plan. Incidents of Cyber-attack are reported to CERT-IN for record and further guidance. Steps are being taken to ensure that proper Cyber security audits are done as per industry practice and norms.

CORPORATE GOVERNANCE

The Company places great emphasis on adhering to corporate governance guidelines and best practices, recognizing their significance in enhancing long-term shareholder value and upholding minority rights. It considers it a fundamental obligation to provide timely and accurate information regarding the Company''s operations, performance, leadership, and governance.

In compliance with Regulation 34 of the LODR Regulations and DPE Guidelines on Corporate Governance for Central Public Sector Enterprises issued in May 2010, the Corporate Governance Report, along with the compliance certificates of Corporate Governance norms under the aforementioned LODR Regulations and DPE Guidelines, is attached and constitutes an integral part of this report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2023, the Company has ten directors of which four are whole-time directors [Chairman & Managing Director, Director (Finance), Director (Works) and Director (Projects) (additional charge)], two Government Nominee Directors and four Independent Directors.

The Company has requested the Ministry of Railways for appointment of requisite number of Independent Directors in order to comply with the statutory requirements. There were two vacancies to the post of Independent Directors. 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 designated as Chief Financial Officer (CFO) and KMP.

Board of Directors & Key Managerial Personnel (KMP) as on March 31, 2023

The Board of Directors of the Company as on March 31, 2023 were Executive (Functional) Directors viz.-Shri Yogesh Kumar Misra (DIN: 07654014), Chairman & Managing Director & CEO, Smt. Ragini Advani, (DIN: 09575213), Director (Finance), Shri Parag Verma, (DIN: 05272169) Director (Works), Shri Sandeep Jain (DIN:

09435375) Director (Projects) (Additional Charge); Parttime (Official) Directors viz. Shri Brijesh Kumar Gupta (DIN: 10092756) 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, 2023 were Shri B Mugunthan, Executive Director (Finance) & CFO and Ms. Ritu Arora, Company Secretary.

Appointments and cessation of the Directors and KMP during and after close of the FY 2022-23

Changes in the post of Chairman & Managing Director:

After close of the financial year 2022-23, pursuant to Railway Board letter dated April 29, 2023, with effect from April 29, 2023 Shri Yogesh Kumar Misra (DIN: 07654014) relinquished the charge of the post of Chairman & Managing Director and Shri Brijesh Kumar Gupta (DIN: 10092756) assumed the additional charge of the post of Chairman & Managing Director. Shri Gupta is proposed to be regularized as Chairman & Managing Director (Additional Charge) of the Company at the ensuing AGM of the Company.

Changes in the post of Functional Directors

Smt. Ragini Advani (DIN: 09575213) was appointed as Director (Finance) (Additional Director) of the Company w.e.f. April 19, 2022 and regularized as Director (Finance) on June 29, 2022 through Postal Ballot.

Shri Parag Verma (DIN: 05272169) was appointed as Director (Works) (Additional Director) of the Company w.e.f. September 21, 2022. He was regularized as Director (Works) on December 14, 2022 through Postal Ballot.

Shri Shyam Lal Gupta (DIN: 07598920) ceased to be Director (Projects) on December 31, 2022, due to superannuation. Shri Sandeep Jain, IRSE, Executive Director Planning (Civil & PSU) - Railway Board, entrusted with the additional charge of Director (Projects) (Additional Director) w.e.f. January 12, 2023 and ceased to be Director (Projects) (additional charge) on July 07, 2023, due to relinquishment of charge on appointment of regular incumbent to the post of Director (Projects).

Shri Anand Kumar Singh (DIN: 07918656), IRSE on selection by PESB has been appointed as Director (Projects) (Additional Director) w.e.f. July 07, 2023. Shri Singh is proposed to be regularized as Director (Projects) of the Company at the ensuing AGM of the Company.

Shri Mohit Sinha (DIN: 00843548), Additional Member (Revenue), Railway Board 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:

Shri Brijesh Kumar Gupta (DIN: 10092756), Additional Member (CE), Railway Board was appointed as PartTime (Official) Director (Government Nominee Director) (Additional Director) of the Company w.e.f. March 29, 2023 who then assumed the additional charge of the post of Chairman & Managing Director w.e.f April 29, 2023.

Shri Rajesh Argal, former Additional Member (Planning), Railway Board ceased to be Part-Time (Official) Director (Government Nominee Director) of the Company w.e.f. July 31, 2022 on attaining the age of superannuation.

Shri Ram Prakash, Additional Member (Planning) (L/A) (DIN: 09746225) was appointed as Part-Time (Official) Director (Government Nominee Director) (Additional Director) of the Company w.e.f. September 23, 2022. He was regularized on December 14, 2022 through Postal Ballot and he ceased to be Director on January 31, 2023 on attaining the age of superannuation.

Regularization of Independent Directors:

Shri Ajay Kumar Chauhan, Shri Dipendra Kumar Gupta, Smt. Ranjana Upadhyay (Women Independent Director) and Dr. Kartik Chandulal Bhadra who were appointed as Independent Directors (Additional Directors) during FY 2021-22 were regularized as Independent Directors on the Board of the Company on June 29, 2022 through Postal Ballot.

Change in the KMPs:

Shri B Mugunthan, Executive Director (Finance), was appointed as CFO & KMP w.e.f. April 26, 2022.

The complete details of appointment / relinquishment of post by the Directors and 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 LODR Regulations. The declarations have been noted by the Board of Directors.

Independent Directors. Accordingly, all the Independent Directors of the Company are registered with data bank of IICA.

APPOINTMENT / RE-APPOINTMENT OF DIRECTORS THROUGH POSTAL BALLOT

Pursuant to the provisions of Section 152(2) of the Companies Act, 2013 every director of the Company has to be appointed in the general meeting of the Company. Further pursuant to LODR 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. However, CPSEs are allowed that the approval of the shareholders for appointment or re-appointment of a person on the Board of Directors or as a Manager is taken at the next general meeting.

RETIREMENT OF DIRECTORS BY ROTATION

In terms of Section 152 of the Companies Act, 2013, the provisions in respect 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, Smt. Ragini Advani, Director (Finance) is liable for retirement by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, offer herself for re-appointment.

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

BOARD & COMMITTEE MEETINGS

Board Meetings:

The Board met eight (8) times during the FY 2022-23, on April 26, 2022; May 27, 2022; July 22, 2022; August 08, 2022; September 23, 2022; November 11, 2022; December 31, 2022; and February 08, 2023. The necessary quorum in terms of LODR Regulations was present for all the meetings. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013, DPE Guidelines and LODR Regulations.

During the FY 2022-23, all the meetings (except one) of the Board were held at the Company''s Registered Office, in New Delhi, through physical and Video Conferencing mode. One Board Meeting was held at Shillong, Meghalaya in compliance with the direction of 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 Company''s Board has the following committees:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholders'' Relationship Committee

4. Risk Management Committee

5. Corporate Social Responsibility & Sustainability Committee

6. Project Progress Review Committee

During the FY 2022-23, the Audit Committee of the Board met eight (8) times, the Nomination & Remuneration Committee met five (5) times, Stakeholders'' Relationship Committee met one (1) time; Risk Management Committee of the Board met two (2) times; the Corporate Social Responsibility & Sustainability Committee met six (6) times, and the Project Progress Review Committee met one (1) time.

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 LODR 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 16, 2023 (which continued on March 17, 2023) without the presence of other Board Members.

SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA

PERFORMANCE EVALUATION

directors, including the CMD.

The evaluation framework for assessing the performance of functional directors encompasses several key areas:

a) The performance of the Company under the Memorandum of Understanding (MOU) signed with the Ministry of Railways, including the achievement of targets set for each respective director.

c) For the CMD, the evaluation includes self-assessment and a final evaluation conducted by the Ministry of Railways.

Regarding Government Nominee Directors, their evaluation is carried out by the Ministry of Railways in accordance with the prescribed procedure. Independent Directors, who are also appointed by the Government of India, undergo evaluation by the Ministry of Railways and, ultimately, by the DPE.

REMUNERATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT

As a Government Company, IRCON follows the guidelines issued by the Department of Public Enterprises (DPE) for determining the remuneration of its functional directors, senior management officials, and other employees. The Company has placed the salient features of its remuneration policy for key managerial personnel and employees on its website (www.ircon.org) under the HRM and Career Sections, as required by Section 178(4) of the Companies Act, 2013.

The remuneration policy of the Company, as well as the procedures and policies for the appointment of Senior Management, are reviewed and recommended by the Nomination & Remuneration Committee before being approved by the Board of Directors.

Furthermore, under Section 197 of the Companies Act, 2013, and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, listed companies are required to disclose specific details of directors'' remuneration in the Board''s Report. However, Government Companies, including IRCON, are exempted from complying with this provision as per Notification No. GSR 463(E) dated June 5, 2015, issued by the Ministry of Corporate Affairs.

Therefore, such details are not included in the Board''s Report of IRCON. However, the remuneration paid to directors during FY 2022-23 is disclosed in the Corporate Governance Report.

and quality related issues. Also steps were taken for closure of Paras raised by the Chief Technical Examiner''s Organisation (CTEO). In addition, scrutiny of immovable property returns of employees, creating awareness on rules/procedures/common irregularities in execution through workshops, training, debate, competitions, etc., have been the prime activities of the Department.

As a step towards ''Leveraging of Technology'' for better transparency, online services are efficiently running since years viz, submission of immovable Property Returns since 2012-13; online Vigilance Clearance since April 1, 2014 through the intranet portal; and filing of vigilance complaints since December 2012.Further, 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.

As per the provision of Integrity Pact and relevant guidelines of Central Vigilance Commission, Dr. T.M. Bhasin, Ex. Central Vigilance Commissioner, has been appointed as an Independent External Monitor (IEM) on November 18, 2020 as per earlier SOP and Shri Bimal Julka, Retired IAS, has been appointed on November 30, 2021 as 2nd IEM as per revised SOP to receive any complaints from the bidders and submit the investigation report.

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

RELATED PARTY TRANSACTIONS

INTERNAL CONTROL SYSTEMS

The Company has implemented robust financial controls in accordance with the provisions of the Companies Act, 2013. These internal financial controls over financial reporting are functioning effectively. The controls are designed to ensure the maintenance of accurate accounting records, promote the orderly conduct of business operations in compliance with company policies, safeguard company assets, prevent and detect fraud and errors, and ensure the reliability of financial and operational information. The internal control system, which includes Internal Financial Controls over Financial Reporting, undergoes periodic reviews, and necessary adjustments are made to align with evolving business needs.

Further information about the internal control system can be found 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 LODR Regulations, the Company is having a Board level Risk Management Committee, which as on March 31, 2023 comprised of Director (Works) as Chairman, Director (Finance), Director (Projects), and Dr. Kartik Chandulal Bhadra, Independent Director as members.

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 Company''s 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 (CVC).

Complaints raised against officials and procedures, etc., by various Authorities (such as CVC/Railway Board Vigilance, CBI, Prime Minister''s Office, etc.,) and received from other sources were investigated to their logical conclusion.

During FY 2022-23, the Department has received a total of 12 nos. complaints and total 11 nos. complaints were disposed off including that of previous years. Nature of Complaints includes irregularities during tendering, execution of contract, anonymous & pseudonymous

each contract / agreement / transaction in a financial year. The transactions, if any, entered into 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 2013 and LODR 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.

The Related Party Transaction Policy of the Company has been revised and approved by the Board during the year 2022-23 and is uploaded on the Company''s website under the ''Investors'' section at www.ircon.org.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

i) that in the preparation of 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, 2023, and of the profit of the Company for the FY 2022-23;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) that the financial statements have been prepared on a going concern basis;

v) that internal financial controls were adequate and operating effectively; and

vi) that proper 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 AND SUSTAINABILITY REPORT

The "Business Responsibility and Sustainability Report"

(BRSR) in compliance with the provisions of Regulation 34 of the LODR Regulations, in the format prescribed under SEBI Circular May 05, 2021 forms part of the Report. The report describes the initiatives taken by IRCON from an environmental, social and governance perspective.

MOU RATING / AWARDS

As per the DPE guidelines, the Ministry of Railways and IRCON enter into a Memorandum of Understanding (MOU) annually, outlining selected parameters and targets for each financial year. The Company''s performance is evaluated at the end of the year based on the achievement of these targets. According to the MOU parameters and the Company''s performance in the fiscal year 2021-22, it has received a rating of ''Very Good''.

IRCON has been awarded several prestigious awards. Some of the significant awards and accolades won so far during the year 2022-23 are mentioned below:

â¢ Greentech Environment Award for Environment Protection

â¢ ENR - Construction World Global Award

â¢ Dun & Bradstreet PSU & Government Summit - Aatma Nirbhar Bharat Initiatives

AUDITORS

STATUTORY AUDITORS

The Comptroller & Auditor General of India (C&AG) has appointed M/s HDSG & Associates, Chartered Accountants, New Delhi (Firm Registration No.002871N) as the single Statutory Auditors of the Company for FY 2022-23, except for the following foreign projects for which C&AG has approved the appointment of the following as statutory auditors:

BRANCH AUDITORS FOR INTERNATIONAL PROJECTS
M/s Ait MIMOUN Rafik	Algeria Project
M/s Edirisinghe & Co.	Sri Lanka Project
M/s Toha Khan Zaman & Co.	Bangladesh Project

COST AUDITORS

In pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Company has maintained the cost records of the Company. 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 2022-23 for conducting the audit of cost records

SECRETARIAL AUDITORS

In pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the LODR 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 2022-23.

INTERNAL AUDITORS

The Board of Directors have appointed following Internal Auditors for the Indian & Foreign Projects for the FY 2022-23:

Sl. No.	Region / Audit Circles	Internal Auditors
1.	Corporate Office Region (including Foreign Project viz. Algeria Project)	M/s A.M.A.A. & Associates, Chartered Accountants
2.	Northern Region	M/s A.M.A.A. & Associates, Chartered Accountants
3.	Eastern Region (including foreign projects viz. Myanmar Road Project, Khulna Mongla Bangladesh, Ishrudi Darsana Bangladesh S&T, and Bhairab Railway Bridge (JV) Project Bangladesh)	M/s SEN & RAY, Chartered Accountants
4.	Mumbai Region (including Foreign Project viz. Upgradation of Railway Line, Maho to Omanthai, Sri Lanka)	M/s J. Singh & Associates, Chartered Accountants
5.	Patna Region	M/s Gupta Sachdeva & Co., Chartered Accountants
6.	J & K Region	M/s Baweja & Kaul, Chartered Accountants

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of investments made, loans granted, and guarantees extended by the Company to its subsidiary and joint venture companies during the FY 2022-23 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 financial 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, 2023 is placed on the website of the Company at www.ircon.org, under the Investors section.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has complied with the provisions relating to the Investor Education 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, 2023 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 Account and the same has been disclosed in the Corporate Governance report.

SECRETARIAL STANDARDS

During the financial 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 COMPANY''S 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 2022-23.

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 2022-23.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of LODR 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 Policy is hosted on the Website of the Company at https://ircon.org/ images/file/cosecy/Dividend%20Distribution%20Policy. pdf.

SECRETARIAL AUDIT REPORT AND MANAGEMENT RESPONSE THERETO

The "Secretarial Audit Report" from the secretarial auditor in Form MR-3 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 2022-23 forms part of this report.

STATUTORY AUDITORS'' REPORTAND C&AG COMMENTS

The reports of the Statutory Auditors on the Financial Statements for FY 2022-23 (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 M/s HDSG & Associates, Statutory Auditors, in their report for the financial year ended on March 31, 2023.

Comments of C&AG on the Audited Financial Statements of your Company for the FY 2022-23 are attached.

ACKNOWLEDGEMENT

The Directors of the Company would like to extend their heartfelt gratitude and acknowledgement for the invaluable assistance and cooperation received from various Ministries such as Railways, Road Transport and Highways (MoRTH), External Affairs, Finance, Commerce, Urban Development, as well as other ministries, departments, and agencies. We are also grateful for the support received from the office of Comptroller & Auditor General of India, Reserve Bank of India, Bankers, Statutory, Branch, Cost, Secretarial & Internal Auditors, of the Company, Indian Embassies & Missions abroad, Foreign Missions & Embassies in India, EXIM Bank, ECGC Limited, Protector of Immigration, Passport Authority, and our esteemed clients both within India and overseas as without their active support, the Company would not have achieved its milestones during the year under review.

We would like to express our sincere appreciation to all the dedicated employees of the Company at every level. Their unwavering efforts, dedication, sincerity and commitment have significantly contributed to achieving the highest ever performance of the Company.

Mar 31, 2022

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.

FINANCIAL RESULTS

(''in Crore)
PARTICULARS		STANDALONE		CONSOLIDATE!		5
	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 Tax	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 Company has achieved its highest ever total income of ''7181 Crore during FY2021-22 as compared to '' 5200 Crore in FY2020-21,showing a quantum j ump of approximately38%.

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 increase in the 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 '' 5.79 pershare (after issue of Bonus Sharesin the ratio of 1:1 ,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 Company as 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 of 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 works out to 43.20% of the post-tax profits of FY2021-22 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 (âListing Regulationsâ), and the guidelines on âCapital Restructuring of Central Public Sector Enterprisesâ

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 1 9A 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 of ''61.13 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 Companyâs 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 (âthe Groupâ) 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 of '' 689 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 Ministerâs 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).

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, Boardâs report, Auditorâs 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 ENVIRONMENTMACROECONOMIC 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 Russiaâs 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 warâs 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 warâs 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, Indiaâs 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 Indiaâs 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 âvirtual 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 âInfrastructure for Resilient Island Statesâ (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 infrastructurecentric capacity among public officials. Budget 2022 also specified the importance of capacity building, wherein it stated âWith 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 projectsâ.

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 âNational Infrastructure Pipeline (NIP)â 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 Honâble 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

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

S. No.	Project Details	Total Value
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 Honâble 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 operating profit, 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$ 1 47.78 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)

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 201 9 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 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.

and the Honâble Prime Minister of Nepal on April 02, 2022. The first phase of 34.9 Km Jaynagar (India) - Kurtha (Nepal) section is part of 68.72 Km Jaynagar-Bijalpura-Bardibas rail link being built 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 201 4, 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 TOWERâ. 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 (âCPSEâ) 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 at Appendix-B.

In terms of the Companyâs Policy on the determining the âMaterial Subsidiaryâ and regulation 24A of the Listing Regulations, for the financial year ending March 31, 2022, none of the subsidiary company is a âmaterial subsidiaryâ 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.

COMPLIANCE OF RIGHT TO INFORMATION ACT, 2005

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 IRCONâs 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 Office, Kolkata Project on September 15, 2021.

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. IRCONâs 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 Companyâs 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 Companyâs 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 1 278 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 1 81 which included 31 regular employees, 1 5 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 1 1 1 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, inhouse 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

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, âHealth & Nutritionâ 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 '' 1 0.50 Crore, the Company has spent '' 10.52 Crore on CSR activities. During FY 2021-22, the total funds donated to Prime Ministerâs

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 SAFETYQUALITY

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 first certified for ISO: 90021994 by TUV SUD Private Limited. Your Company has 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 recertification 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 was certified for 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

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 LED lamps also adds in an energy 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 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 Constructionsâ 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 EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION:

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.

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

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 companyâs 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 softwareâs 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.

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 201 0, 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 designated 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 1 1, 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) 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), Parttime (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 1 1, 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 DIRECTORSâ DECLARATION

The Company has received necessary declaration from all Independent Directors that he/she meets the criteria of independence as laid out in Section 1 49(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 Companyâs 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 Companyâs Board has the following committees:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholdersâ 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, Stakeholdersâ 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

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 Boardâs 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 Boardâs 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 companyâs 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 âInternal code of conduct for prevention of insider trading in dealing with securities of the Companyâ (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 Companyâs 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 Examinerâs 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 Ministerâs 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 âLeveraging of Technologyâ 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.

âIRCON Careerâ 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

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 âBusiness Responsibility Reportâ 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 âExcellentâ. The Company expects to achieve âVery Goodâ rating for the year 202122.

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 âDisclosure of particulars of contracts / arrangements entered by the Company with related parties including certain arms-length transactionsâ 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 Companyâs website of the Company under the âInvestorsâ section at www.ircon. org.

DIRECTORSâ 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;

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 8^th 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

AUDITORSSTATUTORY 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:

BRANCH AUDITORS FOR INTERNATIONAL PROJECTS
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:

INTERNAL AUDITORS FOR INDIAN PROJECTS
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

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 COMPANYâS 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 âCapital Restructuring of Central Public Sector Enterprisesâ 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 Companyâs website www.ircon.org.

SECRETARIAL AUDIT REPORT AND MANAGEMENT RESPONSE THERETO

The âSecretarial Audit Reportâ 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 AUDITORSâ 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

Mar 31, 2018

DISTINGUISHED SHAREHOLDERS

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

1. FINANCIAL PERFORMANCE / HIGHLIGHTS

A. Financial Performance:

During the financial year 2017-18, your Company achieved a total operating income of Rs.3,896.39 crore, registering 28.84% increase over previous yearâs operating income of Rs.3,024.23 crore (re-grouped). The operating turnover from international segment increased by Rs.274.18 crore i.e. from 326.95 crore to Rs.601.13 crore and the domestic segment reports increase in operating turnover of Rs.627.41 crore i.e. from Rs.2,667.85 crore to Rs.3,295.26 crore.

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

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

On a consolidated basis, your Company has recorded a turnover of Rs.4,212.40 crore during the financial year ended 31^st March 2018 and achieved consolidated Net Profit of Rs.411.62 crore for the said financial year.

B. Financial Performance Indicators:

Some important indicators of financial performance of the Company for the year 2017-18 vis-a-vis 201617 are given below:

(Rs.in crore)

Sl. No.	Particulars	2017-18	2016-17	Increase / (Decrease) [in %]
1.	Total income/ turnover	4,123	3,254	26.70
2.	Total Operating income/turnover	3,896	3,024	28.84

3.	Operating income from Foreign Projects	601	327	83.83
4.	Operating income from Indian Projects	3,295	2,668	23.52
5.	Profit before tax	533	532	0.33
6.	Profit after tax	391	369	5.97
7.	Net worth	3,752	3,828	(1.99)
8.	Dividend	192.40	192.40*	--

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

C. Foreign Exchange Earnings and Outgo:

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

D. Dividend:

The Board of Directors (BoD) had declared an interim dividend of Rs. 95.15 crore (approx.) i.e. 101.16% on the paid-up share capital of Rs. 94.05 crore in March 2018. The said interim dividend was paid to all the shareholders in March 2018.

The BoD has recommended final dividend (over and above the interim dividend) of Rs. 97.25 crore (approx.) i.e. 103% on the paid-up share capital of Rs. 94.05 crore.

With this, the total dividend for the year 2017-18 would sum up to Rs. 192.40 crore (approx.) i.e. 204% of paid-up share capital which works out to 49.22% of the post-tax profits for 2017-18 and 5.13% of net worth as on 31^st March 2018. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2017-18 will stand at Rs.1,492.31 crore.

The dividend will be paid to the shareholders whose name appears in the Register of Members as on 31^st August 2018.

E. Appropriations / Tax Provisions / Reserves:

1. Appropriations / Tax Provisions: (Rs. in crore)

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

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

2. Capital Redemption Reserve:

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

F. Increase in Share capital:

1. Authorised Share Capital:

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

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

The Inter Ministerial Group (IMG), Department of Investment and Public Asset Management (DIPAM) at its meeting held on 7^th June 2017 on the basis of examination of financial accounts of Ircon for the financial year 2016-17 and on financial criteria specified in âGuidelines on capital Re-structuring of CPSEsâ issued by DIPAM on 25^th May 2016, suggested Ircon to consider buy-back of shares to the tune of 5% of aggregate paid-up equity and free reserves of the Company as on 31^st March 2017. Accordingly, with the approval of the Board of Directors a proposal for buyback by the Company of its fully paid-up equity shares of Rs.10/- each not exceeding 49,41,818 fully paid-up Equity Shares was sent to the existing shareholders at a price of Rs.386.72/- per Equity Share payable in cash on a proportionate basis upto 5% of the net worth (comprising paid-up share capital plus free reserves) i.e. Rs.3,822.27 crore as per the audited financial results of the Company for the year ended on 31^st March 2017.

Thus, based on the acceptance of the offer by the Ministry of Railways (on behalf of the President of India), your Company had bought back 49,28,426 fully paid-up equity shares of Rs.10/- each utilizing Rs.234.57 crore (which includes tax of Rs.43.98 crore). Accordingly, the paid-up share capital of the Company stood reduced from Rs.98.98 crore to Rs.94.05 crore w.e.f. 26^th December 2017.

3. Listing of Shares:

After the announcement of the listing of shares of Ircon in the budget for the 2017-18 by the Government of India, DIPAM, Ministry of Finance has appointed Legal Advisors, Book Running Lead Managers (BRLM) and Registrars to the Issue for disinvestment of paid-up equity share capital of the Company through Initial Public Offering (IPO) of shares by the Promoters (i.e. Government of India).

Accordingly, for the proposed initial public offering of equity shares of Ircon, M/s. Crawford Bayley & Co. along with their International consortium partner M/s. Hogan Lovells are Legal Advisors; IDBI Capital Markets & Securities Limited, SBI Capital Markets Limited, and Axis Capital Limited are BRLM; and M/s Karvy Computer Karvy Computershare Private Limited is providing services of Registrar.

Your Company has filed Draft Red Herring Prospectus (DRHP) with SEBI on 27^th March 2018. Subsequently, BSE and NSE have granted its in-principle approval of the Companyâs listing application and SEBI observations have been received on 12^th July 2018. Subsequently, the Board of Directors at its meeting held on 31^st August 2018 have approved the Red Herring Prospectus (RHP) of the Company.

4. Dematerialization of Shares:

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

2. ORDER BOOK

The Company secured works worth Rs.6,106 crore during the year 2017-18. The work load as on 31^st March 2018 stood at Rs.22,407 crore (approx.) as compared to Rs.18,878 (approx.) crore as on 31^st March 2017. The work load as on 30^th June 2018 is Rs.26,469 crore (approx.).

3. OPERATIONAL PERFORMANCE

A. Completed Foreign Projects:

Your Company has commissioned two projects in Bangladesh during the financial year 2017-18.

Bangladesh

1. The project for construction of 2^nd Bhairab Railway Bridge with Approach Rail Lines (Lot-A) -- being undertaken through unincorporated JV between your Company and AFCONS viz. IRCON-AFCONS JV for Bangladesh Railway, at a revised value of Rs.265 crore (Irconâs share), has been completed in March 2017. The trial run of engine was carried out on 10^th April 2017.

The bridge was inaugurated jointly by Honâble Prime Minister of India Mr. Narendra Modi and Honâble former Prime Minister of the People Republic of Bangladesh Seikh Hasina Wazed by Video Conferencing on 9^th November 2017.

2. Design, Supply, Installation, Testing, and Commissioning of Computer based Interlocking Colour Light Signalling System on turnkey basis at 11 stations between Ishurdi-Darsana section of Bangladesh for Bangladesh Railway, at a value of Rs.60 crore has been completed in September 2017.

B. On-going Foreign projects:

Your Company is executing the following three projects in foreign countries:

Bangladesh

1. Construction of Embankment, Track, all civil works, major & minor bridges (Except Rupsha) & culverts and implementation of EMP against Package WD1 under the project Construction of Khulna-Mongla Port Rail Line for Bangladesh Railway, at a value of Rs.911 crore (USD 147.80 million). The physical progress up to March 2018 is 14%. The work was commenced in March 2016 and is scheduled to be completed in February 2020.

The project is progressing slowly due to late handing over of encumbrance free land and issuance of drawings for alignment (L-section and X-section), bridges and buildings by the Engineer/Bangladesh Railway.

Algeria

2. Installation of double track line (93 kms) in Algeria awarded by ANESRIF, Ministry of Transport, Government of Algeria, initially awarded at a value of Algerian Dinar Cr. 1,628 (Rs.1,003 crore converted) involving construction of second line and upgradation of existing line, with diversion of 10 Kms from Ouedsly to Yellel in Alger-Oran section of Algerian Railways. The value of contract including additional works for realization of double line has been revised to Algerian Dinar Cr. 3,073 (Rs. 1,784 crore converted). The project was awarded in 2008 and is likely to be completed in December 2019. The reasons for delay are significant increase in scope of works, delay in payments due to non-allocation of funds to the project, excessive delay in approval of amendments, delay in approval of drawings and removal of obstructions, delay in resolving the discrepancy in mode of payments etc.

The work of 67 kms new track has been handed over to the client inspite of the cash flow problems which are hampering progress particularly structural works awarded to sub-contractors. Work on the existing line has also started in the first stretch of 13 kms, 6 out of 7 station buildings are ready to be handed over and the bridge work has picked up with assurance of timely payments. With the improvement in international oil prices the client has assured uninterrupted payments which will improve the progress of works and likely completion by December 2019.

South Africa

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

C. Likely Foreign projects:

Concerted efforts are being made to secure contracts in Bangladesh, Thailand, Nepal, Turkey, Ghana, Sri Lanka, and Malaysia.

D. Project Completed in India:

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

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

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

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

E. New Projects in India:

During 2017-18, your Company secured following projects in India of total value Rs.6,106 crore:

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

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

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

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

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

6. Construction of Corridor-III of East-West Corridor between Gevra Road to Pendra Road approximately 135 km, feasibility study of East-West Corridor between Gevra Road to Pendra Road in the State of Chhattisgarh, for Chhattisgarh East-West Railway Limited (CEWRL) at an revised estimated project cost of Rs.3,272.98 crore as per approved Detailed Project Report (DPR).

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

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

9. Akhaura - Agartala Rail Link project, for North Frontier Railway, at an estimated project cost of Rs. 574 crore as per approved DPR, out of which Rs.28.69 crore has been considered for the yearâs order book.

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

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

G. Your Company has entered into a Memorandum of Understanding on 26^th March 2018 with the Rail Land Development Authority (RLDA) for transfer of lease hold rights to Ircon for commercial development on the land parcel admeasuring 4.3 (four point three) Hectare at Bandra East, Mumbai, Maharashtra, against the payment of Upfront Lease Premium. In consideration of its roles and responsibilities, Ircon shall be entitled to receive from RLDA, an amount equivalent to a total of 3% (three percent) of the Upfront Lease Premium. In order to pay upfront lease premium equivalent to guidance price as approved by RLDA, GST, Stamp Duty and Registration Charges a tripartite a loan agreement has been signed amongst Ircon, RLDA and Indian Railway Finance Corporation Limited (IRFC) on 28^th March 2018. RLDA has agreed to pay to Ircon such amounts as maybe required by Ircon to meet their debt servicing obligations as and when due under this Agreement. Further the Ministry of Railways also has agreed to provide corresponding amounts to RLDA.

H. On-going major Projects in India:

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

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

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

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

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

3. Survey, Feasibility study, Detailed Design and Construction of various identified Rail Coal Connectivity Project(s), for Jharkhand Central Railway Limited (JCRL), at an estimated project cost Rs. 1,139 crore as per approved DPR.

4. Survey, Feasibility study, Detailed Design and Construction of various identified Rail Coal Connectivity Project(s), for Mahanadi Coal Railway Limited (MCRL), at an estimated project cost of Rs. 1,079 crore.

5. Execution of rail connectivity projects identified by Bastar Railway Private Limited (BRPL), at an estimated project cost of Rs. 1,513 crore.

6. Construction of Eight Lane Vadodara Kim Expressway from Km 323.00 to Km 355.00 (Sanpa to Padra Section of Vadodara Mumbai Expressway) in the State of Gujarat under NHDP Phase-VI on Hybrid Annuity Mode (Phase IA-Package II), for Ircon Vadodara Kim Expressway Limited (IrconVKEL) at a value Rs.1,865 crore.

4. SUBSIDIARY COMPANIES, JOINT VENTURE COMPANIES, AND ASSOCIATE COMPANIES

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

5. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129(3) of the Companies Act, 2013, your Company has prepared its Consolidated Financial Statements [as per line by line method] with its four subsidiaries viz. IrconISL, IrconPBTL, IrconSGTL, and IrconDHHL; and [as per equity method] with seven joint venture companies viz. IRSDC, ISTPL, CERL, CEWRL, MCRL, JCRL, and BRPL. The accounts of un-incorporated joint ventures have been included in the standalone financial statements for the financial year 2017-18.

The Board of Directors of your Company has, at its meeting held on 3^rd August 2018, approved the Financial Statements for 2017-18 (Standalone and Consolidated).

Your Company would make available audited financial statements (standalone and consolidated) of Ircon and accounts / financial statements of its subsidiaries (IrconISL, IrconPBTL, IrconSGTL and Ircon DHHL) at its website (www.ircon.org).

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

6. COMPLIANCES

A. Presidential Directive:

During the year, one presidential directive was received from Railway Board vide letter dated 24^th November 2017, for implementation of pay revision of Board level and below Board level executives and non-unionised supervisors of Ircon w.e.f. 1^st January 2017. The same was implemented during the year.

B. Official language:

The Company is undertaking various novel and encouraging initiatives for pervasive use of Hindi in the office. Some of them are:

a) Pledge by all employees to work in Hindi completely on every last Monday of the month.

b) Rajbhasha Sanghosthi is being conducted on quarterly basis in Corporate Office.

c) Birthday wishes to employees, a thought and a word contributed by different departments on rotational basis, poem by renowned poets etc. are being displayed in Hindi at the reception.

In addition, regular quarterly meetings of Official Language Implementation Committee and workshops for effective use of the unicode system and official language are being conducted. Employees are being encouraged through various incentive schemes for the implementation of the Annual Programme of the Official Language Department. Bilingual facility has been introduced for computer systems and mobile phones used by officials of the Company. Officers and staff are being encouraged through various incentive schemes for implementation of the annual program of the Official Language Department. Bilingual formats have been made available at Irconâs internal website for use by the employees.

C. Right to Information Act, 2005:

As per the requirements of the RTI Act, necessary updated information including the names of Appellate Authority, Central Public Information Officer, Assistant

Public Information Officer and State Level Public Information Officers and are posted on Irconâs website. Queries received have been replied within the stipulated time. The queries mostly related to service matters/recruitments, finance, contract, and projects. The details of RTI cases have been forwarded to the Ministry of Railways for publication on Central Information Commission (CIC) website on quarterly as well as annual basis.

During the year 2017-18, 185 applications and 30 first appeals were received and at the beginning of the year 10 applications and 3 first appeals were under process. Out of this, 185 applications (including 3 appeals at the beginning of the year) were processed / disposed off. As on 31^st March 2018, 10 applications were under process for disposal within the allowable time limit.

D. Compliance of MSME Guidelines for implementation of Purchase Preference Policy:

Your Company has in place a comprehensive Purchase Preference Policy since June 2012 which is in line with the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 notified by the Ministry of Micro, Small and Medium Enterprises (MSME) under section 11 of Micro, Small and Medium Enterprises Development Act, 2006. The e-procurement portal of Ircon i.e. www.tenderwizard.com/IRCON provides for facilitation of registration of MSEs firms registered with any statutory bodies specified by Ministry of MSME, and participation in e-tender by availing the benefits of exemption from payment of cost of tender fee and Earnest Money.

Your Company has requested Ministry of MSME (through Ministry of Railways) in terms of letter dated 21^st September 2017 for exemption from achieving mandatory target of 20% for the financial year 2016-17. The same was approved by the Ministry of MSME on 1^st March 2018.

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

Sl.No.	Particulars	2017-18
1.	Total annual procurement (in Rs. Crore)	263.11
2.	Target %age of annual procurement (20%) (in Rs. Crore)	52.62

3.	Total value of goods and services procured from MSEs (including MSEs owned by SC/ST entrepreneurs) (in Rs. Crore)	35.34
4.	Total value of goods and services procured from only MSEs owned by SC/ST entrepreneurs	-
5.	% age of procurement from MSEs (including MSEs owned by SC/ST entrepreneurs) out of total procurement	13.43%
6.	% age of procurement from only MSEs owned by SC/ST entrepreneurs out of total procurement	^-

During the year 2017-18, your Company has conducted six (06) Vendor Development Programmes for MSEs.

7. BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Your Companyâs Board is duly constituted and is in compliance with the requirements of the Companies Act, 2013 and DPE Guidelines on Corporate Governance, 2010.

The following Directors & KMP were appointed during the year 2017-18:

1	Dr. C.B. Venkataraman Part-time (Non-Official) Director [DIN:03179171]	w.e.f. 28.09.2017
2	Mr. Narinder Singh Raina Part-time (Non-Official) Director [DIN:07968391]	w.e.f. 17.10.2017
3.	Mr. Ved Pal Part-time (Official) Director [DIN:07902760]	w.e.f. 22.11.2017
4.	Mr. Ashok Kumar Ganju Part-time (Non-Official) Director [DIN:07014589]	w.e.f. 08.03.2018
5.	Ms. Iti Matta Company Secretary, Compliance Officer & KMP	w.e.f. 01.11.2017
6.	Ms. Ritu Arora Company Secretary, Compliance Officer & KMP	w.e.f. 04.01.2018

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

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

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

During the year, all the independent directors of the Company have declared that they meet the criteria of Independence in terms of section 149(6) of the Companies Act, 2013.

The following Directors ceased to hold office after the close of the year:

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

8. MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE

During April 2017 to March 2018, ten meetings of the Board of Directors and thirteen meetings of the Audit Committee were held.

The details of meetings of the Board of Directors, Audit Committee, and other Board level committees are given at para 3 of the Corporate Governance Report.

9. INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT

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

10. WHISTLE BLOWER POLICY / VIGIL MECHANISM

During the year, the Company has approved a revised Whistle Blower Policy under which there is a vigil mechanism in place for the Employees and Directors of the Company to report to the Management, concerns about unethical behavior, actual or suspected fraud, or violation of the Companyâs code of conduct.

11. PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company during the year. The total manpower strength as on 31^st March 2018 stood at 1,622, which included 1,179 regular employees, 49 deputationists, and 394 employees on contract (including service contract). 832 employees of the Company were technically and professionally qualified. The total number of women employees was 63. There were a total of 205 scheduled caste / scheduled tribe employees as on 31^st March 2018.

During the year, the strength of total new employed personnel stood at 329, which included 104 regular employees, 14 deputationists, and 211 employees on contract (including service contract). Out of these new recruits, 112 employees are technically and professionally qualified, 6 are women employees, and 19 scheduled caste / scheduled tribe employees.

Your Company has been continuously taking steps for building capacity of its human resource through training in functional and general management areas, contract & arbitration, leadership, information technology, as well as soft skills. External faculty is arranged wherever required and officials are nominated for workshops, seminars, etc. with reputed institutes. During the year 2017-18, a total 912 man-days training was imparted to officials of Ircon through workshops, seminars, conferences, in-house trainings and training in external institutes, etc.

Your Company has various schemes for staff welfare like educational scholarships, 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 group âCâ and âDâ employees, etc. facility of homeopathy and allopathy treatment at Corporate office. Other facilities like immediate financial assistance and guidance are being provided to employees and their family members in case of any medical exigency, lumpsum ex-gratia payment to family members in case of death of serving employee.

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

The 42^nd Annual Day of the Company was celebrated on 28^th April 2018 with traditional fervor and gaiety. On this occasion, exemplary work done by employees in Indian as well as foreign projects and select projects were appreciated and rewarded. Educational awards to meritorious children of the employees were also given on this occasion.

12. QUALITY, ENVIRONMENT, AND HEALTH & SAFETY MANAGEMENT

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

The Company has developed the mobile phone / web based video library, for Personal Safety & safety in construction in 2D format. This mobile / internet based application has been released in English and Hindi and is available on Irconâs internal website.

During the year, the Company has started an initiative to share technical knowledge and technical papers based on IS/IRC/IRS/ASTM Standards, Standard Construction practices and experiences. The topics were, CAR and PII & PLI Policies; Railway Doubling projects - Work Procedure; Working Adjacent to Railway Track - Safety Guidelines; Comparison between IS: 383- 1970 versus IS: 383 - 2016; The Slings - Vital And Weak Links in Lifting & Hoisting Operations; Bolt and Nuts - Engineering Aspects; High Strength Concrete - Concrete with Mineral Additives.

Your Company established an Environment Management System (EMS), and was certified for ISO 14001:2004 in October 2011. The latest re-certification audit for ISO 14001-2015 has been conducted in March 2017 whereby the Company has been re-certified for another three years i.e. up to May 2020.

During the year, QMS was updated in the month of June 2017 and EMS in the month of May 2017, quite before the last updation date of September 2018, which is an improvement over the past practices in the Company.

The Company nominates Environment officers at major Indian projects to monitor EMS at their respective projects who complies with the environmental laws and monitor air quality. This is an ongoing process until completion of the project. Environmental checklists have been developed and maintained by all projects. In addition, the Company has a fully operational environmental lab in Jammu for study of impact on environment by the construction activities.

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

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

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

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND UPGRADATION

On energy conservation front, your Company has completed work of Design, Supply, Installation, Testing and Commissioning of grid connected solar power plant of 2MW capacity with all the electrical and associated equipment including civil works at Rail Coach Factory, Rae Bareli (U.P.), at a value of Rs. 15.60 crore. The plant is fully operational, and meets about 21% of electrical energy requirement for the factory. The Company has procured 1 MW additional Solar Power Plant at Rail Coach Factory, Rae Bareli in addition to earlier installed 2 MW Solar Power Plant.

Additional 10 KW Roof Top Grid Connected Solar Power Plant has been made operational as a step to conserve energy. This Solar Power Plant is in addition to existing capacity of 80 KW, and has been implemented after energy audit contributing to environment through usage of Green Energy.

Further, additional capacitor banks have been installed at Corporate Office building to improve power factor which would further reduce the Electrical Energy consumption.

Technology absorption and upgradation

Supervisory Control and Data Acquisition System (SCADA) for energy management have been made operational at Rail Coach Factory, Rae Bareli. Further, the Company has constructed all sub-station buildings in DMRC with latest energy efficient and environmental friendly guidelines which includes LED lights, Rain Water harvesting.

For the first time in Indian Railways, Overhead Equipment (OHE) design for Railway Electrification Project is being carried out by using Drone camera for picking the coordinates through Differential Global Positioning System (DGPS). The OHE layout plans are then prepared with the help of Autocad. Ircon has also planned for use of Drone Camera for Katni Singrauli Doubling project.

During the year, development of Circular OHE foundation in situ and Precast was done in Mathura -Kasganj - Kalyanpur Section for Railway Electrification Project.

Your Company has supplied and commissioned 66 KV High Voltage Cable first time developed indigenously for Delhi Metro Rail Corporation (DMRC) Project. Ircon has also imported 25 KV Gas Insulated Switchgear (GIS) for Vinod Nagar Traction Sub-station of DMRC. The use of GIS reduces the requirement of space for sub-stations.

Uncommon technique of launching of girder by cantilever method was used at 2^nd Bhairab Bridge in Bangladesh by utilizing the benefit of river water. The barge of 250 tonne capacity was used to mount the road crane as well as the members of the truss. The whole barge was brought parallel to the working span and members were erected by the road crane when the barge was properly anchored. With this process of cantilever launching time cycle was reduced from 45 days to 30 days for erection of truss bridge of 102.4 meter in length. This also economized the cost by saving the extra material to be welded on the bottom chord.

Further, New Austria Tunnelling Method (NATM) is proposed to be adopted for construction of tunnels in Sivok-Rangpo project. This method is very useful in complex diversified geological condition where forecasting of the rock mass is difficult due to rapidly changing geology.

14. RESEARCH & DEVELOPMENT (R&D)

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

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

15. INFORMATION TECHNOLOGY AND DEVELOPMENT OF ERP

With an objective to enable IT facility in all domain, efforts were directed to enable IT in all domain.

The Company has established SAP ECC 6.0 based Finance-Controlling module to incorporate additional functionalities like fixed asset accounting for calculation of depreciation as per Indian Income Tax Act, Bank Reconciliation System, FOREX reporting in Functional currency, local currency and reporting currency, Implementation of IndAS functionality (age analysis and discounting of Financial Asset and liability), reports for quarterly and annual financial statements as per schedule III of the Companies Act, 2013. A new tool from SAP called Business Objects (SAP BO) has been introduced to automate the financial reporting of the organisation. This reporting tool takes the real-time data from SAP ECC and prepares the publishable reports namely Balance Sheet, Statement of Profit & Loss, Statement of changes in equity, Cash Flow etc. on demand basis. This automation has led to drastic reduction in the time and effort required to prepare and finalize the books at the end of the quarter / year. The Company has implemented e-Recruitment system on SAAS model with functionalities like on-line submission of application with payment gateway, generation of admit card and communication through SMS / e-mail with the applicants, conducting on-line written test, instant publication of results etc. Video conferencing system is used for conducting review meetings with Project Heads, training, promotion interviews etc. SAP servers are hosted on cloud to ensure high availability security and flexibility for capacity augmentation.

During the year online Annual Performance Appraisal System and Leave application CL/RH system has been developed and launched. The official website of the Company has been revamped to provided well planned information architecture, mobile compatibility, fast access, browser consistency and effective, easy navigation. Enhancement of SAP ERP FI-CO module has been done for improved transparency and financial control and maintaining books of accounts fixed assets, MIS, P&L for all projects. Visitor Management System has been upgraded to ensure proper maintenance of visitor details and visitors convenience at corporate office. Besides this, two mobile apps for CSR and Recruitment related information has been launched and available on google play store. Three more mobile applications are under development. The Company has upgraded its Network Infrastructure at Corporate Office to ensure state of art setup for digital transactions and projects connectivity. Keeping in view the need for Information and Cybersecurity, the Company has nominated Chief Information Security Officer (CISO).

To reduce paper usage and transparent working, use of IT has been enhanced in all the functional domains.

16. VIGILANCE ACTIVITIES

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 (CVC).

The Vigilance Department ensures implementation of laid down guidelines / procedures through preventive checks of tenders and contracts, execution of works, and other functions as well as carries out investigations into complaints. During the year, five preventive inspections were carried out on high value tenders floated from Corporate Office. Complaints raised against officials, procedures etc. by various authorities (like CVC, Railway Board Vigilance), and received from other sources were investigated to their logical conclusion. A total of 21 complaints were received from 1^st April 2017 till June 2018. Out of these 21 complaints, 1 complaint was forwarded by CVC for investigation & report and 11 complaints were disposed off (including CVC referred complaint). The nature of these complaints includes irregularities during tendering, execution of contract, anonymous and pseudo anonymous one and quality related issues. Based on the outcome thereon, circulars on system improvements were issued in different spheres of working related to tenders, contracts, finance, etc. and also project management to avoid recurrence of irregularities / procedural errors and to plug loopholes. In addition, steps were taken for closure of paras raised by the Chief Technical Examinerâs Organisation (CTEO) and advice of CVC on disciplinary matters pertaining to delinquent employees. Scrutiny of immovable property returns of employees; creating awareness on rules/ procedures/ common irregularities in execution through workshops/ trainings, debate, competitions, etc. have been the prime activities of the Department.

As a step towards âleveraging technologyâ for better transparency, submission of online Immovable Property Returns by the officers was started in 201213 and the process is running successfully; online Vigilance Clearance started w.e.f. 1^st April 2014 in the organization through intranet portal www.irconnet.com; vigilance section / portal on website www.ircon.org with a facility for online receipt of complaints is in place since December 2012; e-procurement has already been started w.e.f. 1^st July 2013 in the organization in a comprehensive manner for achieving transparency for all value of the work.

Vigilance department strives to achieve its objective of promoting an impartial, fearless, and transparent environment in functioning of the organisation by ensuring implementation of laid down procedure / guidelines as framed and taking steps to prevent unethical practices.

Your Company has implemented integrity pact as recommended by CVC, a move aimed at maintaining complete transparency, integrity and accountability in all its major procurement and contracts.

17. AWARDS

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

1. Dun & Bradstreet Infra Awards 2017, in the category of âConstruction & Infrastructure Development (Railways)â. The award was presented by Mr. Nitin Gadkari, Honâble Minister of Road Transport & Highways, Shipping and Water Resources, River Development and Ganga Rejuvenation and received by Mr. S.K. Chaudhary Chairman & Managing Director, Ircon at a function held in Mumbai on 2^nd November 2017.

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

3. Dainik Bhaskar India Pride Awards 2017-18 in the category of âCentral PSU: Miniratna-Category-Iâ. The award was presented by Mr. Shivraj Singh Chouhan, Honâble Chief Minister of Madhya Pradesh and Mr. Dharmendra Pradhan, Honâble Minister for Petroleum & Natural Gas and Minister of Skill Development & Entrepreneurship and received by Mr. S.K. Chaudhary Chairman & Managing Director, Ircon at a function held in New Delhi on 28^th March 2018.

4. CIDC Partners in progress Trophy 2018 from Construction Industry Development Council (CIDC) for achieving targets of âMission Skilling Indiaâ under various CIDC initiatives. The award was presented at a function held in New Delhi on 7^th March 2018.

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

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

18. OTHER DISCLOSURES

A. Particulars of Loans, Guarantees or Investments:

The details of investments made, loans granted, and guarantees extended by your Company in terms of section 186 of the Companies Act, 2013 during the year 2017-18 forms part of the notes to the financial statements [note no. 40(c)] provided in the Annual Report.

B. Disclosure on remuneration of directors and employees:

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

C. Compliance with Secretarial Standards on Board, General Meeting and Dividend:

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

D. Deposits:

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

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

No order has passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

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

No material changes and commitments affecting the financial position of the Company during the financial year 2017-18.

G. Change in the nature of business:

There was no change in the nature of business of the Company during the financial year 2017-18.

H. Qualification, reservation or adverse remarks in the Auditorâs Reports, Secretarial Auditor Report

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

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

âThe minutes of the 18^th Nomination and Remuneration Committee (NRC) meeting dated 21-12-2017 entered in the minutes book 27-02-2018 and noted at the 19^th NRC meeting dated 7-3-2018 and 242^nd Board of Directors (BoD) meeting dated 7-3-2018.

The minutes of the 19^th Nomination and Remuneration Committee meeting dated 7-3-2018 and adjourned 19^th NRC meeting dated 8-3-2017 have been entered in the minutes book on 21-06-2018 and noted at the 21^st NRC meeting held on 21-08-2018 and 244^th BoD meeting held on 3-8-2018.â

19. INTEGRAL REPORTS

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

1. âReport on CSR and Sustainability Activitiesâ provides a brief outline of the companyâs CSR and Sustainability policy, the composition of CSR & Sustainability Committee, average net profit of the Company for the last three financial years, prescribed CSR expenditure, and details of CSR spent on the activities / projects undertaken during the financial year etc. [Appendix - C].

2. The âManagement Discussion and Analysis Reportâ provides an overview of the affairs of the Company, its legal status and autonomy, business environment, vision and mission, sectoral and segment-wise operational performance, strengths, opportunities, constraints, strategy and risks and concerns, as well as human resource and internal control systems [Appendix - D].

3. The âCorporate Governance Reportâ highlights the philosophy of Corporate Governance and Key Values of the Company, composition of Board of Directors and its Committees, their details including profile of directors who joined the Board during 2017-18, attendance and remuneration of directors etc., other relevant disclosures, CMD / DF Certification, and general information for shareholders, etc. [Appendix-E]. It is supplemented by following compliance certificates:

1. Certificate signed by the Chairman & Managing Director affirming receipt of compliance with the Code of Conduct and Key Values from all Board members and Senior Management personnel during the year 2017-18 (placed at Annexure - E1);

2. Certificate from Chairman & Managing Director and Director Finance with respect to the truth and fairness of the Financial Statements, due compliances, and financial reporting (placed at Annexure - E2); and

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

4. The Secretarial Audit Report from the secretarial auditor is at Appendix - F. The Management Response on the qualification contained in the Secretarial audit Report 2017-18 is placed at para 18H above.

5. The âExtract of Annual Returnâ in Form MGT-9, pursuant to section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, placed at Appendix - G.

6. The âDisclosure of Related Party Transactionsâ in Form AOC-2, pursuant to Section 134(3) (h) of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014, is at Appendix - H.

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

20. DIRECTORSâ 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 31^st March 2018 and of the profit of the Company for the financial year 2017-18;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. that the financial statements have been prepared on a going concern basis; and

v. that proper systems had been devised to ensure compliances with the provisions of all applicable laws and that such systems were adequate and operating effectively.

21. AUDITORS

A. Statutory and Branch Auditors:

The Auditors of the Company appointed by the Comptroller & Auditor General of India for 2017-18 are:-

Statutory Auditors:

K.G. Somani & Co. For Company as a whole

Branch Auditors for projects in India:

Gupta Gupta & Associates, All projects at Jammu & Srinagar Kashmir Region

KDS & Co., Mumbai All projects under Mumbai Region

K S Bothra & Co., Kolkata All projects under Eastern Region

Jindal & Co., New Delhi All projects under Northern Region

B. Gupta & Co., Patna All projects under Patna Region

Branch Auditors for projects Abroad:

Kerbal Athmane, Algeria Algeria

Middel & Partners South Africa, South Africa

Jaysinghe & Co., Chartered Sri Lanka Accountants, Sri Lanka

Kumpulan Naga & Co., Malaysia Malaysia

Toha Khan Zaman & Co., Bangladesh Bangladesh

B. Cost Auditor:

The Board of Directors have appointed M/s. Chandra Wadhwa & Co., Cost Accountants, as Cost Auditor of your Company for the financial year 2017-18 for conducting the audit of cost records maintained by the Company as per the applicable Rules / Guidance Note, etc.

C. Secretarial Auditor:

The Board of Directors have appointed M/s. Vishal Agarwal & Associates, Practising Company Secretary as Secretarial Auditor for conducting Secretarial Audit of your Company for the financial year 2017-18.

D. Internal Auditors:

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

Internal Auditors for Indian Projects

Baweja & Kaul, Jammu J&K Region

J. Singh & Associates, Mumbai Mumbai Region

A. R. & Co., New Delhi Northern Region

Gupta Sachdeva & Co., Patna Patna Region

SBA Associates, Kolkata Eastern Region

Raj K. Sri & Co., New Delhi Corporate Office Region

Internal Auditors for Foreign Projects

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

ACKNOWLEDGEMENT

We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs, DIPAM and other Ministries; various banks, Reserve Bank of India, EXIM Bank; Export Credit and Guarantee Corporation; Embassies; Protector of Immigration; Passport Authority; Doordarshan; and our esteemed clients both in India and abroad for their continued interest in and support to the Company.

For and on behalf of the Board of Directors

Sd/-

(S.K. Chaudhary)

Date: 31^st August 2018 Chairman & Managing Director

Place: New Delhi (DIN: 00515672)

Mar 31, 2011

Distinguished shareholders of ircon,

The Directors of your Company have pleasure in presenting their 35th Report on the affairs of the Company for the financial year 2010-11.

PERFORMANCE HIGHLIGHTS

Your Company has achieved its highest ever turnover of Rs 3254 crores. Further, your Company has been able to achieve a quanium jump of more than 51% in profit before tax from Rs 264 crores in 2009-10 to Rs 40l crores in 2010-11. The profit after tax has also increased by 32%

Most of the targets under the Memorandum of Understanding between your Company and Ministry of Railways have been achieved/ surpassed which would keep the Company under "Excellent MoU rating." Total dividend for 2010-11, including the proposed dividend Rs 23.76 crores, will amount to Rs 49.49 crores.

FINANCIAL HIGHLIGHTS

Some important indicators of financial performance of the Company for the year 2010-11 vis-a-vis 2009-10 are given below:

Financial Performance Indicators. (Rs in million)

2010-11 2009-10 %age increase

1. Total income/Gross sales 3254 3217 1.15

2. Total Operating income * 3175 3153 0.70

3. Operating income from 1577 1196 31.86 Foreign Projects

4. Profit before tax 401 264 51.89

5. Profit after tax 240 182 31.86

6. Gross margin 440 305 44.26

7. Net worth 1382 1199 15.26

8. Earnings per share (Rs) 242.99 184.06 32.02

9. Total Foreign Exchange 1545 1261 22.52 Earnings

10. To Foreign Exchange Outgo 1118 997 12.14

11. Net Foreign Exchange 427 264 61.74 Earnings

12. Dividend 49.49 36.62 35.14

* Includes unallocable operating income of Rs 3.37 crores in 2010-11 and Rs 4.38 crores in 2009-10 (Refer para 7 of Notes to Accounts in Schedule ''R'')

On domestic front, the Operating income has decreased by nearly 20% from Rs 1952 crores in 2009-10 to Rs 1595 crores in 2010-11. The ratio of net profit to net worth has improved to 17.40% from 15.19%, and the ratio of PBT to turnover has also improved to 12.33% from 8.21%.

Foreign Exchange Earnings

Net Foreign Exchange earnings have also increased substantially by 62% from Rs 264 Crores in 2009-10 to Rs 427 crores in 2010-11.

Dividend

The Board of Directors had declared in February 2011 an interim dividend of Rs 25.73 crores @Rs 26 per share i.e. 260% on the paid-up share capital of Rs 9.898 crores which was paid in February 2011 to the shareholders. The BoD has recommended a dividend @Rs 24 per share i.e. 240% on the paid-up share capital for declaration by the shareholders, which would amount to Rs 23.76 crores. With this, the total dividend for the year 2010-11 would amount to Rs 49.49 crocres @Rs 50 for everyR s 10 share which works out to about 20.58% of the post-tax profits of Rs 240.51 crores. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2010-11 will then stand at Rs 332.51 crores approximately.

Appropriations / Tax Provisions/ Reserves (Rs in crores)

2010-11 2009-10

1. Interim Dividend 25.73 20.98

2. Proposed Final Dividend 23.76 15.64

3. Tax on Interim Dividend 4.28 3.56

4. Tax on proposed final dividend 3.85 2.66

5. Transfer from Housing projects Reserve 4.80 0.15

6. Transfer from foreign projects Reserve 2.90 25.00

7. Transfer to General Reserve 190.65 164.49

ORDER BOOK

The Company secured works worth Rs 3579.53 crores during the year 2010-11.out of which Rs 1082.51 crores pertain to projects secured abroad. The work load as on 31.3.2011 is about Rs 13017 Crores.

OPERATIONAL PERFORMANCE

A. Foreign Projects Completed:

Your Company completed four projects abroad during 2010-11 - two projects in Mozambique, namely, Rehabilitation of 670 Km Cape Gauge Railway Track in central Mozambique, valued at Rs 179.72 crores and supply of stone Ballast for sena line of Beira Railway corridor, valued at Rs 31.4 crores; one in Sri Lanka, namely, Upgradation of colombo-matara coastal railway line phase I (Galle-Matara Section). Valued at USD 36.24 million; and one in Ethiopia, namely, construction of Dera - Mechara road upgrading contract - I, valued at Rs 106.68 crores.

B. New / On-going Foreign projects:

Nine projects, including the new ones secured, are in progress- two in Malaysia , four in Sri Lanka, and one each in Ethiopia, Afghanistan, and Algeria.

Malaysia

1. Your company continued to operate 25 meter gauge diesel locomotives on Malaysian Railway System (KTMB) as per the lease and maintenance contract which has been extended up to 31st December 2011.

2. The Company was awarded a double tracking project (about 103 km length between Seremban and Gemas on design and build basis including all electrification, signaling and communication works) in Malaysia in December 2007 by Ministry of Transport, Government of Malaysia, at a value of Rs 4084 crores (about 1 billion USD). Phase I of the project from seremban to sungai gadut at a value of USD 156 million has been completed on 30th April 2011 and commuter train operations inaugurated and commenced from 24th may 2011. Overall physical progress up to March 2011 is 67.72% While there have been some delays at isolated locations for want of possession of site, the work is likely to be completed by the year 2012.

Sri Lanka

3. Your company had entered into a contract with Ministry of Transport, Sri Lanka, for upgradation of Colombo-Matara coastal railway line, at a value of USD 78 million, funded by Indian line of credit. The work is being executed in two phases. Phase-I of the project (Galle - Matara Section) value of USD 36.24 million has been completed in February 2011. Passenger traffic has commenced on this section from 16th February 2011. Loan agreement for Phase-II at a value of USD 41.76 Million was signed on 11.03.2010 between EXIM Bank of India and Government of Sri Lanka after sanction of further line of credit. On payment of advances, the above contract has come into operation in October 2010 and presently the work on the same is in progress which is scheduled to be completed by May 2012.

4. The Company has also signed an agreement with Ministry of Transport, Sri Lanka, for restoration of Railway Line from Omanthai to Pallai (USD 185.36 million); Madhu Road to Talai Mannar (USD 149.74 Million); and Medawachchiya to Madhu Road (USD 81.31 million), in Northern Province of Sri Lanka, to be funded by Indian Line of Credit. with the signing of loan agreement between EXIM Bank of India and Government of Sri Lank and payment of advances to the company, these projects have come into operation in March 2011. These contracts are scheduled to be completed within a period of 24 to 30 months (i.e during march 2013 to September 2013).

Ethiopia

5. Your company had secured a project in August 2008 for procurement of sub-station equipment and to supervise testing and commissioning of substation for Ethiopian Electric Power Corporation (EEPCO), at a value of Rs 66.3 crores. The Company has completed the work of design and supply of equipment in March 2010. Out of total nine substations, erection work by EEPCO on some Sub-stations is still continuing. Your company is supervising the testing and commissioning.

Afghanistan

6. Your company had secured a project from Ministry of Energy & Water, Afghanistan, on 28th December 2008, for supply and installation of 220/20 kv new Aybak sub-station and bay expansion work at an existing Mazar-e-Sharif sub-station in Afghanistan. The progress of project suffered a setback on account of late approval of drawings/ designs by consultant. Physical work has commenced after these approvals in April 2010. Civil work at Mazar- e- sharif has been completed whereas Civil work at Aybak has been 95% completed. Erection work at both the places is in progress. The project now valued at Rs 40.8 crores is likely to be completed by March 2011.

Algeria

7. Your company was awarded a contract for installation of a double line (93 km) between Oued sly and yellel in Algeria by Aniserif, Government of Algeria, at a value of USD 230 million. The contract involves construction of second line and upgradation of existing line from Oued sly to yellel in Algier- Oran Section of Algerian railways. Project is expected to be completed by March 2013.

C. Likely Foreign projects

Concerted efforts are being made to secure contracts in Bangladesh, Sri Lanka, Middle East Countries, Myanmar, Nepal, and African Countries.

D. Projects Completed in India

During the year five projects were completed in India. These are:

a. Six laning of Km 66.000 to Km 86.000 of Panchi Gujran to Panipat section of NH-I, Haryana, for National Highway Authority of India (NHAI);

b. Married Accommodation Project at Jhansi for Ministry of Defence, Government of India;

c. Gauge conversion including electrical works on Rewari-Ajmer section of North Western Railway;

d. Expansion of Rail Coach Factory, Kapurthala.

e. Setting up of wheel shop at Rail Coach Factory, Kapurthala;

f. Cargo road execution work at ONGC Managlore Petrochemicals Limited, Mangalore, Karnataka;

g. Upgradation of Roads from Nagapattinam to Kattumavadi and New bypass at Nagapattinam, Tituthuraipundi and Muthupet (TNRSP-02) (in JV with SMJ, Indonesia) in Tamil Nadu;

h. Supply, installation, testing and commissioning of track work of Phase-II corridor (Central Secretariat to Gurgaon) (Contract BT-2);

i. Supply, erection, testing and commissioning of traction and auxiliary sub-stations in Tolygunj- Garia Section;

j. Four laning of pimpalgaon-Dhule section of NH-3 from Km 380 to Km 265 in Maharashtra for National Highways Authority of India (NHAI).

Three projects got completed after 31st March 2011. These are:

a. Construction of Road Over Bridges (ROBs) in Northern Region (J&K and Punjab) for National Highways Authority of India (NHAI).

b. Construction of road over bridges in Madurai-Kanyakumari section of NH-7 including approaches and culverts in the state of Tamil Nadu for National Highways Authority of India(NHAI).

C. Delhi MRTS project phase-II project(Contract BE-8)-Supply, installation, testing, commissioning of receiving cum traction cum auxiliary main substations at Jahangirpuri, Mundka, Ambedkar colony [Japan Bank for International Co-operation (JBIC) funded], and Botanical Garden (Noida) and Sushant Lok (Gurgaon) (Non JBIC funded).

E. New Indian Projects:

During 2010-11 your Company secured Six new projects in India, including additional works. These are:

(a) Construction of New Indoor Sports complex at Gholsapur (Behala) on Sealdah Division of Eastern Railway, at a Value of Rs 56 crores.

(b) Construction of 592 meter long cable stayed major permanent bridge over river Ravi at Basoli (Km 14.74) on road Dunera-Durban-Basoki- Bhadarwah in the state of J&K under project samapark [through unincorporated JV between your company and S.P.Singla Constructions Private Limited (SPSCPL), at a value of Rs 72.72 crores.

(c) Setting up of New Rail Coach Factory at Rae Bareilly, at a value of Rs 344 crores.

(d) Construction of Rail Link between jogbani (Bihar) to Biratnagar (Nepal), at a value of Rs 238 crores.

(e) Sivok-Rango New Rail Line project, additional work of Rs 1339.5 crores.

(f) Construction of Broad Gauge line by Gauge conversion jayanagar (India)- Bijalpura (Nepal) with extension up to Bardibas on India-Nepal border, at a value of Rs 446.72 crores.

Soon after the close of the year, the company has secured one project in April 2011, for construction of (26Nos.) Road over bridges (ROBs) in Rajasthan, at a value of Rs 624 crores.

F. Projects through joint venture companies

Mozambique

Your company has completed various works under the Beira Rail Concession Project in Mozambique awarded by Ministry of Transports (CFM), Government of Mozambique, on BOT basis to companhia Dos Cominhos De Ferro Da Beira (CCFB), a Joint venture company in Mozambique, in which your company has 25% equity stake, RITES has 26% and CFM, a railway undertaking of Mozambique, has 49%.

Investment in this JVC is comprised of:

Total Investment as on date (USD Million)

Equity 1.250

Shareholders'' Loans 16.685

Total 17.935

Interest due on the above loan amounting to USD 4.396 million not included in the above has been converted into loan.

CCFB was issued a notice for termination of the concession by the conceding Authority (Ministry of Transports & Communications, Government of Mozambique) due to alleged delay in completion of rehabilitation works which has since been contested and replied by CCFB. The matter for amicable settlement between conceding authority, under discussion. The company does not envisage any loss on selling its stake.

Inida

A joint venture company (JVC) called "Ircon-Soma Tollway private Limited" (ISTPL) was incorporated on 19th April 2005, with 50% equity participation by both Ircon and Soma Enterprise Limited (a construction company), for executing a BOT project for four laning of pimpalgaon-Dhule section of NH-3 from Km 380 to Km 265 in Maharashtra for National Highways Authority of India (NHAI).

Investment in ISTPL is comprised of:

Total Disbursement as on date (Rs Crores)

Equity (proportionate to Ircons 63.87 50% share in the equity of ISTPL)

Unsecured Loans 10.00

Corporate Guarantee (committed 30.00 up to Rs 200 crores)

Total 103.87

Your company has pledged its present shareholding and has committed pledging of future shareholding in ISTPL in connection with a term loan of Rs 450 crores taken by ISTPL from 8 banks, State Bank of India being the lead bank lender. ISTPL had also raised a short term loan (for a period of one year) of Rs 60 crores from Axis Bank to meet its payment commitment to EPC contractors in respect of which Ircon has extended a Corporate Guarantee for Rs 30 crores, (being 50% of the loan amount) as 50% equity partner in ISTPL.

The project has since been completed successfully and ISTPL is earning toll on the entire stretch of the road. Presently the entire stretch of 118.158km is generating toll collection on an average of Rs 38 lakhs approx. per day.

G. Subsidiary Company

Your company had formed a wholly owned subsidiary company by the name "Ircon Infrastructure & Services Limited" (Ircon ISL) on 30th September 2009. Ircon ISL had obtained a certificate for commencement of Business on 10th November 2009. The authorised share capital of Ircon ISL is Rs 10 crores, and its paid-up share capital is Rs 4.9 crores.

The main objects of Ircon ISL are to undertake infrastructure projects; to carry on infrastructure construction work on Build-operate- Transfer(BOT), Build-Own-Operate-Transfer (BOOT), Build- Lease-Transfer (BLT), etc. or otherwise or any other scheme or project found suitable in and related field of infrastructure projects and other ancillary fields; planning, designing, development, improvement, etc. in the field of construction of infrastructure of Multi-Functional complexes (MFCs), etc, to provide facilities and amenities to users of Indian Railway system; and all matters in the field of real estates and allied areas.

Ircon ISL has taken up development of Multi Functional Complexes (MFCs) at 23 identified station premises of Railways for providing facilities to rail users.

The work has been completed at 7 stations, and Ircon ISl is in the process of leasing of 7 MFCs. work on balance 14 stations is in an advanced stage of completion. Construction could not be started at 2 stations for want of clearances by local authorities which is expected to be received soon.

Ministry of External Affairs (MEA), Government of india, has appointed Ircon ISL as Design Consultant for "Providing Technical services fro preparation of Detailed project Report for a road project in chin state of Myanmar" at a total cost of Rs 7.2 crores. The detailed project report has been submitted on 15th July 2011 to MEA.

Your company will make available the balance sheet, profit & loss account, directors'' report, auditors'' report of Ircon ISL upon request by any member. These documents will also be made available on the website of the company (ww.ircon.org), and will also be available for inspection by any member of the company at the registered office of the company. The company''s consolidated financial statements, included in this Annual Report, incorporate the accounts of its subsidiary also. A summary of Key financials of your company''s subsidiary is given in para 9(d) of Notes to Accounts in schedule ''s'' of the consolidated financial statements.

H. Disclosure of Accounting Treatment -- Outstanding dues of closed Iraq project.

Interest accrued on deferred Iraqi dues and provision for interest to sub-contractors on back-to-back basis have been translated at the last settlement rate (i.e. 1 USD =Rs 35.802) with the Government of India, based on prudence, as in previous year, instead of rates on the date of balance sheet as required under the provisions of AS-11. Had the AS-11 been followed, "Profit before Tax" for the year would have been higher by Rs 3.95 crores. The details are given in para 12 of Notes to Accounts in Schedule R.

TECHNOLOGY UPGRADATION, ABSORPTION, AND R&D

Your company has an "Engineering Control and Audit Cell" to constantly upgrade technology and construction techniques, and to look into the aspects of appropriate designing and value engineering. The cell reviews the design and drawings for various projects and provides engineering solution, including standardization of design data to help in marketing efforts and conceptualisation of new projects with technical back up in alignment design, geo-technical analysis, etc. The Company is using latest technology and state of the art equipments in execution of infrastructure projects.

During the year, Your company has prepared a medium term R&D plan to meet the needs of technological advancements. Your company does not undertake any pure research project but takes the help of consultants and firms to develop various methods and techniques to execute the various projects in a cost effective manner with requisite quality. These methods and designs are designed to enhance the technological competence, efficiency, economy, and innovativeness in performance of various functions.

DE-LISTING

Railway Ministry has communicated, vide letter of 19.05.2010, that your company should get its shares de-listed formalities under the SEZBI (De- listing of Equity shares) Regulations, 2009, and the companies Act, 1956, as regards approval by the Board of Directors, special resolution through postal ballot, declaration based on scrutinizer''s report at the AGM, etc., had been concluded by 22nd September 2010. In principle approval from Bombay Stock Exchange and Delhi Stock Exchange had also been received vide their letters dated 29.12.2010 and 16.02.2011 respectively in response to Ircon''s application after fulfillment of formalities required by the stock Exchanges. Thereafter, Ministry of Railways sent individual letters of invitation on 15th July 2011 to both the public shareholders for obtaining their consent for delisting and to continue to remain holders of equity shares even after delisting; or to sell their equity shares at the price offered by the Ministry of Railways based on exit price computed by Merchant Bankers. Promoter''s undertaking along with acceptance and consent letter from both the public Shareholders for delisting and to continue to remain holders of equity shares even after delisting was received by the company on 10th August 2011. Final application for delisting would be made before 31st August 2011 to both the stock exchanges soon after obtaining Merchant Banker''s Certificates.

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company. Your company has been continuously taking steps for human resource capacity building through training in functional and general management areas, information technology, as well as soft skills. Fresh recruits are given induction training. External faculty is arranged wherever required. In addition, officials are nominated for workships, seminars, etc. with reputed institutes.

Due to increase in activities in infrastructure development, there is attrition in the experienced manpower. During the year the Company recruited 64 technically and professionally qualified employees, though 100 such qualified employees have left the Company.

The total manpower strength as on 31st March 2011 stands at 1678 which includes 128 deputationists, majority of whom (94) are deployed on foreign projects. 1408 are regular employees out of which 1239 are employed on Indian projects. The total number of women employees is 85, out of which 43 are executives. 786 (46.95%) employees of the Company are engineers.

Your company has various schemes of staff welfare in place like educational scholarships, one time educational grant for admission to professional degrees and diploma courses, educational awards, etc. to meritorious children of employees, educational assistance to the wards of deceased employees, marriage assistance for daughters and dependant sisters of group C and D employees, etc. Free consultancy and medicines in Homeopathy is provided to employees in corporate office. Yoga classes were also held in corporate office for both men and women. The Company has a tie-up with resorts to provide resort facilities to employees at concessional rates.

Your company aims to provide congenial and safe working atmosphere to women employees. The Company has a complaints committee for prevention of sexual harassment at work place which immediately attends to any complaint, even informal, so that problems are nipped in the bud. On the occasion of centenary year of women''s day, Your company celebrated women''s Day focusing on problems faced by women employees, their needs, and solutions envisaged. Brief self defence training for women employees was also organized with the help of Delhi police.

Women employees of Ircon are also awarded through Railway Women Welfare Organisation for taking interest in social activities and sports.

The 35th Annual Day was celebrated on 28th April 2011 with traditional fervor and gaiety. On this occasion, excellent work done by employees and select projects was appreciated and rewarded. Educational awards to meritorious children of the employees were also given on this occasion.

COMPLIANCES

Presidential Directive

No presidential directive was received during the year 2010-11.

Official language

Orders regarding use of Hindi are being implemented, Company''s bilingual website is being regularly updated. All the computers have bilingual facility. Unicode compliant software and fonts are being used to facilitate access to common templates in Hindi language. Hindi keyboard Training/ Practice is being given to employees (Stenographers and Assistants) in Unicode system. The quarterly meetings of Official Language Implementation Committee, workshops etc. are being held regularly. Progressive use of Hindi is encouraged through various incentive schemes.

Right to Information Act, 2005

As per the requirements of the Act, necessary updated information including names of Central Public Information Officer and Assistant Public Information Officer as well as State Level Public Information Officer in each of the four Regional offices of the Company are posted on the website. Queries received are replied within the stipulated time. The queries are usually in the nature of service matters and details of, and work related to, contractors and vendors.

Particulars of employees

No employee has drawn a remuneration of Rs 60 lakhs or more per annum or Rs 5 Lakhs or more per month during the year 2010-11 (Section 217(2A) of the companies Act, 1956 read with the companies (Particulars of Employees) Rules, 1975, as amended vide notification dated 31st March 2011).

Corporate Social Responsibility

Your company has in place a CSR Policy & Structure in tune with CSR Guidelines issued by the Ministry of Corporate Affairs. During 2010-11 the company has prepared a long term CSR plan matching with its long term business plan.

The Board of Directors has allocated 0.5% of net profits of the Company per annum towards CSR activities for each of the years 2009-10 and 2010-11 with provision for carrying forward the unused budget every year to the next year. All the four CSR projects earmarked under an MoU signed between the company and Ministry of Railways for the year 2010-11 have been completed in time.

The Board of Directors has allocated 2% of net profit (of 2010-11), subject to a minimum of Rs 3 crores, towards CSR Budget for 2011-12. CSR initiative of your company committed under the Memorandum of Understanding for 2011-12 with fund allocation of Rs 3 crores would focus on the following five areas in select locations in the vicinity of projects, after a base-line survey, viz. development of infrastructure and other logistics at ITI Dholpur adopted by the company; disbursement of books, bag, fee etc. to identified schools in select stations; solar lights; primary health centre/ ambulance; and plantation/ maintenance of park/ relief during disaster.

Conservation of Energy and environmental concerns, and sustainable Development

Various state of the art systems have been installed and environment friendly technology has been adopted in the Corporate Office building to conserve energy.

MoU targets for 2010-11, namely, energy audit of identified offices and workshop buildings of the company and implementation of suggestions have been fully achieved. The company has also incorporated green building features in design/ drawing of 18 Multi Functional complexes.

Your company has a safety, Health, and Environment policy in place. During the year corporate safety, Health, and Environment Manual has also been formulated and issued. Regular training programmes have been organized on safety, Health and Environment Management System.

Awareness about conservation of energy among employees has resulted in steady reduction in energy among employees has resulted in steady reduction in energy consumption at corporate office. Projects have also contributed in saving environment through plantation of trees and control of air and water pollution.

VIGIILAGNCE ACTIVITIES

Vigilance Department is headed by a full time Chief Vigilance Officer (CVO) on deputation from the Government. CVO heads the vigilance. The Vigilance Department oversees both preventive as well as punitive vigilance which includes steps to prevent improper practices/ Misconduct, etc., and suggesting necessary system improvement to plug in the loop holes.

Briefly vigilance activities during the year 2010-11 included investigation and settlement of complaints raised by public, public representatives, working agencies, etc., as well as internal complaints; regular/ surprise preventive inspections at work sites as per Annual Action plan; closure of paras raised by chief Technical Examiner (CTE); scrutiny of immovable property returns of employees; settlement fo punitive vigilance cases; and creating awareness on vigilance related matters among employees through training/ workshops which has revealed notable improvement in the level of awareness and alertness amongst employees.

Development of vigilance portal is under progress. This portal will facilitate online submission of complaints. As a step towards transparency, the company is developing E-tendering/ E-procurement under ''leveraging of technology''.

Various steps like standardized procedure regarding fixing responsibility on custody of tender documents, standardization of formats for vigilance clearance and their uploading on intranet for employees, etc. have been taken for systemic improvements.

QUALITY MANAGEMENT

Quality Management System (QMS) has been successfully sustained and continually improved since 1996 when the Company as a whole was first certified for ISO-9002-1994 by TUV Suddeutschland Private Limited (TUV). Your company was being re-certified by TUV in 2009-10 after an audit, as per latest revised code ISO-9001-2008. Next round of re-certification audit is due in August 2011 for which existing systems and procedures pertaining to QMS are being reviewed for improvement and upgradation.

Quality Management department is in the process of implementing Environment Management system, as per ISO 14001:2004, by going for certification for the same. For this purpose first stage of audit has been conducted in April 2011, and second stage audit will be conducted soon.

Corporate Quality council and project Quality council meetings are conducted quarterly at corporate office and projects respectively to review the implementation of QMS.

INFORMATION TECHNOLOGY AND DEVELOPMENT OF ERP

The Company is maintaining state of the art data center facilities with dedicated leased line circuits for data communication between projects and corporate office. Data center is equipped with network and internet security appliances for secured high speed LAN and WAN connectivity. Environment friendly Linux based thin-client solution is also being used centrally in a secured manner for effective management of users data.

Core applications including project Management with Online progress Reporting (OPR) system, computer aided Drawing and Designs of International Standard, and effective communication facility like video conferencing are being used by the company to support its core business activities.

AWARDS

The Company received "Silver Trophy " under ''India Pride Awards'' instituted by Dainik Bhaskar and Daily News & Analysis (DNA) for Excellence in Central PSUs in Transport for 2010. The award was presented by Mr. Pranab Mukherjee, Finance Minister, to Mr. Mohan Tiwari, Managing Director, Ircon, at a function held in New Delhi on 13th September 2010.

INTEGRAL REPORTS

A "Management Discussion and Analysis Report" and a "Corporate Governance Report" form an integral part of this Directors Report as per the requirement of clause 49 of listing agreement and have been placed as its Annexure "A" & "B" respectively.

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, mission & objectives, outlook, operational performance, its resources & systems, strengths, opportunities, constraints, risks & concerns, strategies, prospects, etc.

The Corporate Governance Report highlights the philosophy of Corporate Governance and Key Values of the Company, composition of Board of Directors and its Committees, their details including profile of directors who joined the Board during 2010-11 and thereafter, attendance and remuneration of directors etc., other relevant disclosures, CEO/CFO Certification, and general information for shareholders. It is supplemented by following compliance certificates:

(i) Certificate signed by the Managing Director affirming receipt of compliance with the Code of Conduct from all Board members and Senior Management personnel during the year 2009-10 (placed at Annexure "C-1") as per clause 49 (I) (D) (ii) of the Listing Agreement;

(ii) Certificate from Managing Director and Director Finance about due compliance of sub-clauses (a) to (d) of clause 49 (V) of the Listing Agreement (placed at Annexure "B-2"); and

(iii) Certificate of compliance of Corporate Governance provisions of clause 49 signed by a practising company secretary (placed at Annexure "B-3") as per clause 49 (VII) of the Listing Agreement.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure except as otherwise stated in the annual accounts.

ii) that such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on 31st March 2011 and of the profit of the Company for year 2010-11.

iii) that proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2010 to March 2011, eight meetings of the Board of Directors were held with two meetings in ended of the four quarter i.e. quarters ended June 2010, September 2010, December 2010 and March 2011.

The following Directors ceased to hold office during 2010-11:-

1 Mr. S.S.Khurana Ceased to be Director due to superannuation on Director Finance 31.05.2010 (AN). Held office from 06.03.2009 (FN) to 31.05.2010 (AN).

2 Mr. R. Subramanian Ceased to be Director on completion of 3 year Part-time Director (non-official) tenure on 28.06.2010 (AN). Held office from 29.06.2007 (FN) to 28.06.2010(AN).

3 Mr. A. k Tiwari Ceased to be Director due to superannuation on 31.08,2010 Part-time Director (official) (AN). Held office from 19.01.2009 (FN) to 31.08.2010 (AN)

4 Mr. Rakesh Chopra Ceased to be Director due to superannuation on 30.09.2010 Part-time chairman (official) (AN). Held office from 11.06.2010 (FN) to 30.09-2010 (AN).

5 Mr. N. Parthasarathy Ceased to be Director on completion of 3 year tenure on 30-09.2010 (AN). Held office from 01.10-2007 (FN) to Part-time Director(non- official) 30.09.2010 (AN).

6 Mr. Madan Lal Ceased to be Director due to superannuation on 31.12.2010 Director Works (AN). Held office from 23.04.2007(FN) to 31.12.2010 (AN).

The following Directors are holding office as on date:-

1 Mr.A.P.Mishra From 27.10.2010(FN) onwards. part-time Chairman (Official)

2 Mr. Mohan Tiwari From 01.02.2009 (FN) onwards. Managing Director

3 Mr. K.K. Garg From 03.11.2009 (FN) onwards. Director Finance

4 Mr. Deepak Sabhlok From 16.04.2010 (FN) onwards. Director Projects

5 Mr.Hitesh Khanna From 07.03.2011(FN) onwards. Director works

6 Dr.G.V.Rao From 08.10.2010(FN) onwards. part-time Director (non-official)

7 Mr.B.N.Rajasekhar From 25.10.2010(FN) onwards. Part-time Director (official)

AUDITORS

The auditors of the Company appointed by the Comptroller & Auditor General of India for 2010-11 are:

Statutory Auditors :

Wahi & Gupta, New Delhi

For Company as a whole

Branch Auditors for projects in India:

Sit Raviverma & Co,. New Delhi

All projects under Northern Region

Gupta Gupta a Associates, Jammu, (Jammu & Kashmir)

All projects in Jammu & Kashmir and Punjab, RCF Kapurthala, Ludhiana sub-station (Designated as Srinagar Region)

Prakash & Santosh, Kanpur (Uttar Pradesh)

UP-01, UP-04, UP-05, Allahabad Projects, Gwalior, MAP Jhansi, Lucknow. Mughalsarai, etc, (Designated as Kanpur Region)

A.N Chatterjee & Co., Kolkata (West Bengal)

All projects under Eastern Region

Pathak HD & Associates, Mumbai (Maharashtra)

All projects under Western Region

A. R. Viswanathan & Co., Bengaluru (Karnataka)

All projects under Southern Region

Branch Auditors for projects Abroad:

Wahi & Gupta, New Delhi

All projects in Malaysia

Menbene Leul & Co,, Ethiopia

Ethiopia

Audicontas, Lda, Beira

Mozambique

S.N.Nanda & Co, Afghanistan

Afghanistan

FIDUCIAIRE D'' EXPERTISE COMPTABLE F1DEXA. Algeria

Algeria

Jayasinghe & Co., Colombo, Sri Lanka

Sri Lanka

ACKNOWLEDGMENT

We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs and other Ministries, Reserve Bank of India, EXIM Bank, State Bank of India. Export Credit and Guarantee Corporation, various banks. Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio, and our esteemed clients both in India and abroad for their continued interest in and support to the Company, We place our appreciation on record for all our predecessors for their invaluable contribution to the growth of the Company.

We take this opportunity to reaffirm our trust in the competence and sincerity of purpose of the employees of this Company and record Our grateful thanks to them for their tireless work to achieve the cherished goals of the Company and their dedication to quality.

For and on behalf of the Board of Directors

Place: New Delhi K.K. GARG MOHAN TIWARI

Dated. 10.08.2011 Director Finance Managing Director

Mar 31, 2010

The Directors of your Company have pleasure in presenting their 34th Report on the affairs of the Company for the financial year 2009-10.

PERFORMANCE HIGHLIGHTS

Your Company crossed theRs 30000 million mark in terms of total income during 2009-10 by registering its highest ever turnover ofRs 32169 million, 17.43% increase over previous years turnover ofRs 27395 million. Further, your Company has been able to achieve a quantum jump of more than 40% in profit before tax fromRs 1877 million in 2008-09 to Rs 2640 million in 2009-10. The profit after tax has also increased by nearly 30%.

Most of the targets under the Memorandum of Understanding between your Company and Ministry of Railways have been achieved/ surpassed which would keep the Company under "Excellent MoU rating." Total dividend for 2009-10, including the proposed dividendRs 156.39 million, will amount toRs 366.23 million, out of which your Company has already paidRs 209.84 million by way of interim dividend.

FINANCIAL HIGHLIGHTS

Some important indicators of financial performance of the Company for the year 2009-10 vis-a-vis 2008-09 are given below:

Financial Performance Indicators.

(Rs in million)

2009-10 2008-09 %age increase

1. Total income/Gross sales 32169 27395 17.43

2. Total Operating income * 31529 26543 18.78

3. Operating income from 11962 8027 49.00

Foreign Projects

4. Profit before tax 2640 1877 40.65

5. Profit after tax 1821 1402 29.96

6. Gross margin 3053 2319 31.65

7. Net worth 11994 10747 11.60

8. Earnings per share (Rs) 184.06 141.63 29.96

9. Total Foreign Exchange 12610 8083 56

Earnings

10. To Foreign Exchange Outgo 9969 7127 39.88

11. Net Foreign Exchange 2641 956 176.26

Earnings

12. Dividend 366.23 296.94 23.33

* Includes unallocable operating income ofRs 44 million in 2009-10 and Rs 39 million in 2008-09 (Refer para 7 of Notes to Accounts in Schedule R)

Operating income from domestic projects improved by 5.6% fromRs 18477 million in 2008-09 toRs 19522 million in 2009-10. On the international front, operating income increased by 49%. The ratio of net profit to net worth has improved to 15.19% from 13.05%, and the ratio of PBT to turnover has also improved to 8.21% from 6.85%.

Foreign Exchange Earnings

Net Foreign Exchange earnings have also increased substantially by 176% fromRs 956 million in 2008-09 toRs 2641 million in 2009-10.

Dividend

The Board of Directors had declared in January 2010 an interim dividend ofRs 209.84 million @Rs 21.20 per share i.e. 212% on the paid-up share capital ofRs 98.98 million which was paid in February 2010 to the shareholders. The BoD has recommended a dividend @Rs 15.80 per share i.e. 158% on the paid-up share capital for declaration by the shareholders, which would amount toRs 156.39 million. With this, the total dividend for the year 2009-10 would amount toRs 366.23 million @ ? 37 for everyRs 10 share which works out to about 20.10% of the post-tax profits ofRs 1822 million. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2009-10 will then stand atRs 2830.23 million approximately.

Appropriations / Tax Provisions/ Reserves

1. An amount ofRs 250 million has been re-appropriated to the Profit & Loss Account for the year ended 31st March 2010, in terms of section 80HHB of the Income-tax Act, 1961, taking the closing balance in Foreign Projects Reserve toRs 29 million.

2. An amount ofRs 1.5 million has been re-appropriated to the Profit & Loss Account for the year ended 31st March 2010, in terms of section 80HHBA of the Income-tax Act, 1961, taking the closing balance in Housing Projects Reserve toRs 48 million.

3. Due to change in the accounting treatment referred to in para 22 of Notes to Accounts in Schedule R, balance in Foreign Exchange Fluctuation Reserve amounting toRs 203.70 million has been transferred to Foreign Exchange Gain Account, and General Reserve Account.

4. As per sub section (1) of section 115-0 of the Income-tax Act, 1961, a tax provision ofRs 26.58 million has been made on the proposed dividend. The tax paid on the interim dividend disbursed during the year amounts toRs 35.66 million.

5. After the aforementioned appropriations, an amount ofRs 1644.86 million has been transferred to General Reserve from the profits of the Company, taking the General Reserve as on 31st March 2010 toRs 11817.61 million.

ORDER BOOK

The Company secured works worthRs 26901 million during the year 2009-10. The work load as on 31.3.2010 is aboutRs 100000 million.

OPERATIONAL PERFORMANCE

A. Foreign Projects Completed:

Your Company completed four projects abroad during 2009-10 - two projects in Mozambique, namely, Study, design and Rehabilitation of Dona Ana Bridge, valued at USD 6.64 million (? 312 million) and Supply of Prestressed Monoblock Concrete Sleepers for Cape Gauge, valued at USD 21.97 million (? 1032 million); one signalling & telecommunication project for WS Atkins operating team for which was based at Sharjah for providing design support for re-signalling of railway system on West Coast main line of British Railways; and one road project for pavement strengthening of about 130 Km length on East-West Highway from Belbari to Chauharawa in Nepal, at a completion cost ofRs 567.30 million, although this project got delayed due to law and order problem in the Tarai region for a long time.

After the close of the year, your company completed a road project for construction of Dera-Mechara Road Upgrading Contract-I (Dera-Manga) in Ethiopia, valued atRs 1066.81 million. The Company has preferred claims on account of considerable losses suffered in this project.

B. New/ On-going Foreign projects:

Eight projects, including the new ones secured, are in progressÂ two each in Malaysia and Sri Lanka, and one each in Ethiopia, Mozambique, Afghanistan, and Algeria.

Malaysia

1. Your company continued to operate 25 meter gauge diesel locomotives on Malaysian Railway System (KTMB) during 2009-10 as per the lease and maintenance contract for an annual value ofRs 259 million. KTMB has extended the lease-cum-maintenance contract up to 31st December 2010, the value of which is?201.01 million.

2. The Company was awarded a double tracking project (about 103 km length between Seremban and Gemas on design and build basis including all electrification, signaling and communication works) in Malaysia in December 2007 by Ministry of Railways, Government of Malaysia, at a value ofRs 40840 million (about 1 billion USD). Physical works had started after detailed design in July 2008 as per schedule. Physical progress up to June 2010 is 47%. Though some initial delays took place due to non-availability of encumbrance free land at some locations, the work is likely to be completed by the target date of August 2012.

Sri Lanka

3. Your company had entered into a contract with Ministry of Transport, Sri Lanka, for upgradation of Colombo-Matara coastal railway line, at a value of USD 78 million on Indian line of credit. The work is being executed in two phases. Phase-I of the project with a value of USD 36.24 million has been taken up in July 2009 and is scheduled to be completed by December 2010. On sanction of further line of credit, the loan agreement for Phase-ll at a value of USD 41.76 million has been signed on 11.03.2010 between EXIM Bank of India and Government of Sri Lanka. The work of Phase II is being taken up and is scheduled to be completed by May 2011.

4. The Company signed an agreement in January 2010 with Ministry of Transport, Sri Lanka, for restoration of Railway Line from Omanthai to Pallai in Sri Lanka, valued at USD 185.36 million (? 8426 million). The contract will come into operation only after signing of loan agreement between Government of Sri Lanka and EXIM Bank of India.

After the close of the year, your company has signed in June 2010 a contract agreement with Government of Sri Lanka for Restoration of railway line from Madhu Road to Talai Mannar, at a total value of USD 149.74 million. The contract will come into operation only after signing of loan agreement between EXIM Bank of India and Government of Sri Lanka.

Ethiopia

5. Your company had secured a project in August 2008 for procurement of substation equipment and to supervise testing and commissioning of substation for Ethiopian Electric Power Corporation (EEPCO), at a value ofRs 663 million. The Company has completed the work of design and supply of equipment in March 2010, and is supervising the testing and commissioning.

Mozambique

6. Your company has been executing various works under the Beira Rail Concession Project in Mozambique awarded by Ministry of Transport (CFM), Government of Mozambique, to Companhia Dos Caminhos De Ferro Da Beira (CCFB), a joint venture company in Mozambique, in which your company has 25% equity stake, RITES has 26%, and CFM, a railway undertaking of Mozambique, has 49%.

The concession project has made substantial progress despite constraints. Track rehabilitation of 670 km Cape Gauge Railway Track in Central Mozambique has since been substantially completed.

Investment in this JVC is comprised of:

Total investment as on date (USD million)

Equity 1.25

Shareholders Loans 16.685

Total 17.935

Afghanistan

7. Your company had secured a project from Ministry of Energy & Water, Afghanistan, on 28th December 2008, for supply and installation of 220/20 kv new Aybak sub-station and bay expansion work at an existing Mazar-e-Sharif substation in Afghanistan. The progress of project suffered a setback on account of late approval of drawings/ designs by consultant. Physical work has commenced after these approvals in April 2010. The project now valued atRs 408 million is likely to be completed by March 2011.

Algeria

8. Ircon-Aska had secured a double tracking project worth USD 230 million in Algeria in June 2008 from National Company for Railway Transport (SNTF), Infrastructure Section, Algeria. Your companys share of work was 70% valued atRs 7805 million. The work involved laying of double track of about of 93 km between OUEDSLY and YELLELL on Algiers - Oran line by October 2010. After the issue of order to start the work by client, mobilisation for the project was completed. Meanwhile, as per instructions from the client, the Companys consortium partner was removed from the consortium and your company had to take up the full work. Survey and design work had been almost completed, part consignment of rails had been procured, and physical work at site had also started. However, suddenly client had issued order to stop the work followed by a communication to close the contract. Subsequently, the client has revoked the contract cancellation order and issued an order on 23rd May 2010 awarding the entire work to your company. Mobilisation is in progress.

C. Likely Foreign projects

Concerted efforts are being made to secure contracts in Iran, Sri Lanka, Middle East Countries, Bangladesh, Myanmar, Nepal, Vietnam, and African Countries.

D. Projects Completed in India

During the year five projects were completed in India, two Married Accomodation Projects at Bhopal and Allahabad for Ministry of Defence, Government of India; one project for setting up of concrete sleeper plant at Chak Sikander for East Central Railway, Hajipur; one project DMRC Phase II Tunnel (through JV) Qutub Minar Corridor for Delhi Metro Rail Corporation (Contract BC-18), and Commissioning of Qazigund-Baramulla Rail line in the state of J&K.

Four projects got completed after 31st March 2010, these are:

a. Six laning of Km 66.000 to Km 86.000 of Panchi Gujran to Panipat section of NH-I, Haryana, for National Highway Authority of India;

b. Married Accomodation Project at Jhansi for Ministry of Defence, Government of India;

c. Gauge conversion including electrical works on Rewari-Ajmer section of North Western Railway;

d. Expansion of Rail Coach Factory, Kapurthala.

E. New Indian Projects:

During 2009-10 your Company secured nine new projects in India, including additional works. These are:

(a) Planning, Designing and Construction of College of Veterinary Sciences and Animal Husbandry at Selesih, Aizwal, Mizoram;

(b) Cargo road execution work at ONGC Mangalore Petrochemicals Limited, Mangalore, Kamataka;

(c) Design Engineering, Manufacturing, Supply to site, Construction, Installation, Commissioning of railway siding at Kalisindh power project, Stage-I, Jhalawar, Rajasthan;

(d) Construction of Multifunctional Complexes for Indian Railways at designated stations;

(e) Construction of Indoor Stadium at Behala, Kolkata;

(f) Additional works in Qazigund-Srinagar-Baramulla New BG Rail Line, J &K;

(g) Works in Dharam-Laole section in addition to ongoing Laole-Qazigund section, J&K;

(h) Additional work for Implementation of PMGSY in Bihar;

(i) Construction of Road Over Bridges (ROBs) falling on State Roads in Bihar

Some new/ on-going projects in India are given at Annexure-"A".

BOT project through JVC

A joint venture company (JVC) called "Ircon-Soma Tollway Private Limited" (ISTPL) incorporated on 19th April 2005, with 50% equity participation of both ircon and Soma Enterprise Limited (a construction company), is executing a BOT project for four laning of Pimpalgaon-Dhule section of NH-3 from km 380 to km 265 in Maharashtra for National Highways Authority of India (NHAI). Toll plaza located at Chandwad became operational and toll collection started for 99 km stretch on 25th October 2009. The balance stretch of 19.158 km has also been provisionally declared complete on 3rd March 2010 and toll collection at Dhule plaza has commenced from April 2010.

Investment in ISTPL is comprised of:

Total Disbursement as on date (Rs Million)

Equity (proportionate to Ircons 638.70 50% share in the equity of ISTPL)

Unsecured Loans 100.00

Corporate Guarantee (committed - up to Rs 2000 million)

Total 738.70

Your company has pledged its present shareholding and has committed pledging of future shareholding in ISTPL in connection with a term loan ofRs 4500 million taken by ISTPL from 8 banks, State Bank of India being the lead bank lender.

Soon after the close of the year, the Company has secured two projects in April 2010, one for Construction of New Indoor Sports Complex at Gholsapur (Behala) on Sealdah Division of Eastern Railway, at a value ofRs 561 million and another one for Setting up of Rail Coach Factory at Rae Bareilly, at a value ofRs 20000 million.

F. Disclosure of Accounting Treatment -- Outstanding dues of closed Iraq project.

Interest accrued on deferred Iraqi dues and provision for interest to sub-contractors on back-to-back basis have been translated at the last settlement rate (i.e. 1 USD =Rs 35.802) with the Government of India, based on prudence, as in previous year, instead of rates on the date of balance sheet as required under the provisions of AS-11. Had the AS-11 been followed, "Profit before Tax" for the year would have been higher byRs 42.65 million. The details are given in para 12 of Notes to Accounts in Schedule R.

TECHNOLOGY UPGRADATION, ABSORPTION, AND R&D

Your company has an "Engineering Control and Audit Cell" to constantly upgrade technology and construction techniques, and to look into the aspects of appropriate designing and value engineering. The cell reviews the design and drawings for various projects and provides engineering solution, including standardization of design data to help in marketing efforts and conceptualisation of new projects with technical back up in alignment design, geo-technical analysis, etc. The Company is using latest technology and state of the art equipments in execution of infrastructure projects.

During the year, Alignment Review of Katra-Dharam-Qazigund section was carried out by extensive use of Satellite Imagery data, Ground Topography modelling using photogrammetry and LiDAR (Light Detection and Ranging, using Laser Technology for ground data pickup), Seismic Refraction and Electro Resistivity for ground Tomography, Satellite aided Differential Global Positioning System techniques for alignment setting out, and MX-Rail software. These techniques have led to development of an optimal alignment taking into account the geological conditions in a very efficient manner in short time span.

DE-LISTING

Railway Ministry has communicated, vide letter No. 2009/PL/64/3 (IRCON) dated 19.05.2010, that your company should get its shares de-listed. The Board of Directors has approved the proposal of delisting at the instance of the promoter. Formalities as required under the SEBI (De-listing of Equity Shares) Regulations, 2009, are in process.

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company. Your company has been continuously tuning its training programmes to meet the organisational needs - present and future - through a systematic training need analysis. Due to increase in activities in infrastructure development, there is attrition in the experienced manpower. During the year the Company recruited 57 technically and professionally qualified employees, though 93 professionals have left the Company.

The total manpower strength as on 31st March 2010 stands at 1751 which includes 148 deputationists, majority of whom (107) are deployed on foreign projects. 1494 are regular employees out of which 1367 are employed on Indian projects. The total number of women employees is 85, out of which 39 are executives. 940 (53.68%) employees of the Company are engineers.

Your company has various schemes of staff welfare in place like educational scholarships, one time educational grant for admission to professional degrees and diploma courses, educational awards, etc. to meritorious children of employees, educational assistance to the wards of deceased employees, marriage assistance for daughters and dependant sisters of group C and D employees, etc. Free consultancy and medicines in Homeopathy is provided to employees in corporate office. Yoga classes were also held in corporate office for about six months in batches for both men and women. The Company has a tie-up with resorts to provide resort facilities to employees at concessional rates.

Your company aims to provide congenial and safe working atmosphere to women employees. The Company has a complaints committee for prevention of sexual harassment at work place which immediately attends to any complaint, even informal, so that problems are nipped in the bud.

The 34th Annual Day was celebrated on 28th April 2010 with traditional fervor and gaiety. On this occasion, excellent work done by employees and select projects was appreciated and rewarded.

COMPLIANCES

Presidential Directive

Presidential directive received during the year 2008-09 regarding revision of pay scales and DA under both CDA and IDA pay patterns w.e.f. 1st January 2006 and 1st January 2007 respectively has been implemented during the year 2009-10.

Official language

Orders regarding use of Hindi are being implemented, Companys bilingual website is being regularly updated. All the computers have bilingual facility. Unicode compliant software and fonts are being used to facilitate access to common templates in Hindi language. The quarterly meetings of Official Language Implementation Committee, workshops etc. are being held regularly. Progressive use of Hindi is encouraged through various incentive schemes.

Right to Information Act, 2005

As per the requirements of the Act, necessary updated information including names of Central Public Information Officer and Assistant Public Information Officer as well as State Level Public Information Officer in each of the four Regional offices of the Company are posted on the website. Queries received are replied within the stipulated time.

Particulars of employees

Information in accordance with the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, regarding employees who have drawn a remuneration ofRs 24 lakhs or more per annum orRs 2 lakhs or more per month during the year 2009-10 is attached as Annexure A-1.

Corporate Social Responsibility

Your company has in place a CSR Policy & Structure in tune with CSR Guidelines issued by the Ministry of Corporate Affairs. The Board of Directors has allocated 0.5% of net profits of the Company per annum towards CSR activities. Four CSR projects have been earmarked under an MoU signed between the Company and Ministry of Railways for the year 2010-11. One of the CSR projects involving construction of a compact unit of 16 kennels with an operation theatre and sanitary unit has been

constructed for the Society for Prevention of Cruelty to Animals (SPCA), Noida. The Company would be fine-tuning its CSR policy & structure keeping in view the recent CSR guidelines issued by the Department of Public Enterprises.

Conservation of Energy and environmental concerns

Various state of the art systems have been installed and environment friendly technology has been adopted in the Corporate Office building to conserve energy.

Safety, Health, and Environment policy has been reviewed, revised, and re-issued during the year. Regular training and awareness programmes are conducted on Safety, Health, and Environment Management System. Awareness about conservation of energy among employees has resulted in steady reduction in energy consumption at Corporate Office.

Vigilance activities

Vigilance Department is headed by a full time Chief Vigilance Officer (CVO) on deputation from the Government. The Vigilance Department oversees both preventive as well as punitive vigilance.

Briefly vigilance activities during the year 2009-10 included investigation and settlement of complaints raised by public, public representatives, working agencies, etc., as well as internal complaints; issue of various circulars based on guidelines issued by CVC and Railway Board for system improvement and compliance from vigilance angle; settlement of punitive vigilance cases; accelerating the process of preventive vigilance; vigilance training for executives as well as for employees working at projects for creating awareness in vigilance related matters. The vigilance set up in the organization has been suitably strengthened to discharge the above functions effectively. Measures initiated in respect of identified thrust areas like "Leveraging of technology for improving vigilance administration" are being monitored regularly for ensuring transparency in functioning. As a result of concerted efforts in the sphere of preventive vigilance, the number of punitive cases has been minimized.

During the year the Company formulated a "Complaint Handling Policy" and "Guidelines on revival of terminated contracts".

Quality Management

Quality Management System (QMS) has been successfully sustained and continually improved since 1996 when the Company as a whole was first certified for ISO-9002-1994 by TUV Suddeutschland Private Limited (TUV). Your company was being recertified by TUV as per revised code ISO-9001-2000 once in every three years after an audit. During 2009-10 the Company has been recertified as per latest revised code ISO-9001-2008. Moll targets for 2009-10, namely, establishment of laboratory and undertaking quality assurance drives at projects of value aboveRs 1000 million have been fully achieved.

A new initiative of Ircon Knowledge Blog has been launched during the year to share and disseminate knowledge on Quality Management System, Environment, Continual improvement, etc.

Subsidiary Company

Your Company has formed a wholly owned subsidiary company by the name "Ircon Infrastructure & Services Limited" (IrconlSL) on 30th September 2009. IrconlSL has obtained a Certificate for Commencement of Business on 10th November 2009 from the office of Registrar of Companies. The authorised share capital of IrconlSL isRs 100 million. Its paid-up share capital which stood atRs 4 million on 31st March 2010, now stands increased toRs 49 million.

An MoU has been signed between your company and Rail Land Development Authority (RLDA) on 21st August 2009 for construction of Multi Functional Complexes (MFCs) at identified station premises of Railway system for providing facilities to rail users as envisaged in the Railway Budget of Honble Minister for Railways.

The main objects of IrconlSL as enshrined in its registered charter are to undertake infrastructure projects; to carry on infrastructure construction work on Build-Operate-Transfer (BOT), Build-Own-Operate-Transfer (BOOT), Build-Lease-Transfer (BLT), etc. or otherwise or any other scheme or project found suitable in and related field of infrastructure projects and other ancillary fields; planning, designing, development, improvement, etc. in the field of construction of infrastructure of Multi-Functional

Complexes (MFCs), etc. to provide facilities and amenities to users of Indian Railway System; and all matters in the field of real estates and allied areas.

So far RLDA has entrusted 24 MFCs to the Company. The construction of all the MFCs has been assigned to your company.

Information Technology and Development of ERP

The Company is maintaining state of the art data center facilities with dedicated leased line circuits for data communication between projects and corporate office. Data center is equipped with network and internet security appliances for secured high speed LAN and WAN connectivity. Environment friendly Linux based thin-client solution is also being used centrally in a secured manner for effective management of users data.

Project Management Information System is being used to monitor plans and progress of projects, including periodic review with Online Progress Reporting (OPR) System. Specialized software is being used for creation of drawing and designs of International Standards. The Company is in the process of setting up a video conferencing facility. The Company is also implementing ERP based integrated information system under SAP/ Oracle platform.

Your company has improved communication infrastructure for its employees by implementing CUG mobile network facility which is a part of CUG network of Indian Railways and its undertakings. This facility covers employees of corporate office as well as of projects, and reduces expenditure on communication.

AWARDS

Engineering Export Promotion Council

(i) The Company received "Gold Trophy for Top Exporters" in the category of "Top Exporters as Merchant Exporter" from EEPC INDIA (formerly Engineering Export Promotion Council), Northern Region, in recognition of outstanding contribution to Engineering Exports during the year 2007-08.

(ii) The Company has also been selected for "All India Export Award" in the category of "Awards for Special Contribution: Highest Growth in Exports - Large

Enterprise" from EEPC INDIA (formerly Engineering Export Promotion Council) in recognition of outstanding export performance during 2008-09.

INTEGRAL REPORTS

A "Management Discussion and Analysis Report" and a "Corporate Governance Report" form an integral part of this Directors Report as per the requirement of clause 49 of listing agreement and have been placed as its Annexures "B" & "C" respectively.

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, mission & objectives, outlook, operational performance, its resources & systems, strengths, opportunities, constraints, risks & concerns, strategies, prospects, etc.

The Corporate Governance Report highlights the philosophy of Corporate Governance and Key Values of the Company, composition of Board of Directors and its Committees, their details including profile of directors who joined the Board during 2009-10 and thereafter, attendance and remuneration of directors etc., other relevant disclosures, CEO/CFO Certification, and general information for shareholders. It is supplemented by following compliance certificates:

(i) Certificate signed by the Managing Director affirming receipt of compliance with the Code of Conduct from all Board members and Senior Management personnel during the year 2009-10 (placed at Annexure "C-1") as per clause 49 (I) (D) (ii) of the Listing Agreement;

(ii) Certificate from Managing Director and Director Finance about due compliance of sub-clauses (a) to (d) of clause 49 (V) of the Listing Agreement (placed at Annexure "C-2"); and

(iii) Certificate of compliance of Corporate Governance provisions of clause 49 signed by a practising company secretary (placed at Annexure "C-3") as per clause 49 (VII) of the Listing Agreement.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure except as otherwise stated in the annual accounts.

ii) that such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on 31st March 2010 and of the profit of the Company for year 2009-10.

iii) that proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2009 to March 2010, seven meetings of the Board of Directors were held with three meetings in the quarter ended September 2009, two meetings in the quarter ended June 2009, and one meeting each in the quarters ended December 2009 and March 2010.

The following Directors ceased to hold office during 2009-10:-

1 Mr. Sudhir Mathur Ceased to be Director due to superannuation on Director Finance 30.06.2009 (AN). Held office from 01.11.2005 (FN) to 30.06.2009 (AN).

The following Director ceased to hold office after 31st March 2010:-

1 Mr. S.S. Khurana Ceased to be Director due to superannuation Part-time Chairman (official) on 31.05.2010 (AN). Held office from 16.03.2009 (FN) to 31.05.2010 (AN).

2 Mr. R. Subramanian Ceased to be Director on completion of 3 year Part-time Director (non-official) tenure on 28.06.2010 (AN). Held office from 29.06.2007 (FN) to 28.06.2010(AN).

The following Directors are holding office as on date:-

1 Mr. Rakesh Chopra From 11.06.2010 (FN) onwards Part-time Chairman (official)

2 Mr. Mohan Tiwari From 01.02.2009 (FN) assumed the charge of Managing Director the post of Managing Director.

3 Mr. Madan Lai From 23.04.2007(FN) onwards Director Works

4 Mr. K.K. Garg From 03.11.2009 (FN) onwards Director Finance

5 Mr. Deepak Sabhlok From 16.04.2010 (FN) onwards Director Projects

6 Mr. N.Parthasarathy From 01.10.2007 (FN) onwards Part-time Director (non-official)

7 Mr. A. K. Tiwari From 19.01.2009 (FN) onwards Part-time Director (official)

AUDITORS

The auditors of the Company appointed by the Comptroller & Auditor General of India for 2009-1 Oare:-

Statutory Auditors:

Wahi & Gupta, New Delhi For Company as a whole

Branch Auditors for projects in India:

Sri Raviverma & Co., New Delhi All projects under Northern Region

Gupta Gupta & Associates, Jammu (Jammu & All projects in Jammu & Kashmir and Kashmir) Punjab (Designated as Srinagar Region)

Prakash & Santosh, Kanpur (Uttar Pradesh) UP-01, UP-04, UP-05, Allahabad Projects, Gwalior, MAP Jhansi, Lucknow, Mughalsarai, etc. (Designated as Kanpur Region)

A.N Chatterjee & Co., Kolkata (West Bengal) All projects under Eastern Region

Mittal & Associates, Mumbai (Maharashtra) All projects under Western Region

A.R. Viswanathan & Co., Bengaluru All projects under Southern Region (Karnataka)

Branch Auditors for projects Abroad:

Wahi & Gupta, New Delhi All projects in Malaysia

Menbere Leul & Co., Ethiopia Ethiopia

Audicontas, Lda, Beira Mozambique

S. N. Nanda & Co., Afghanistan Afghanistan

FIDUCIAIRE D EXPERTISE COMPTABLE Algeria

FIDEXA, Algeria

Jayasinghe & Co., Colombo, Sri Lanka Sri Lanka

ACKNOWLEDGEMENT

We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs and other Ministries, Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks, Embassies, Immigration authorities, Passport Authority, Doordarshan, All India Radio, and our esteemed clients both in India and abroad for their continued interest in and support to the Company. We place our appreciation on record for all our predecessors for their invaluable contribution to the growth of the Company.

We take this opportunity to reaffirm our trust in the competence and sincerity of purpose of the employees of the Company, who are the pillars of strength of the Company, for their invaluable contribution to the growth and prosperity of the Company.

For and on behalf of the Board of Directors

Sd/- Sd/- (K.K. Garg) (Mohan Tiwari) Director Finance Managing Director

New Delhi

Dated: 06.08.2010

Mar 31, 2009

The Directors of your Company have pleasure in presenting their 33rd Report of the Company for the financial year 2008-09.

PERFORMANCE HIGHLIGHTS

Your Company has recorded an all around improvement in the performance with its highest turnover of Rs. 27876 million and a gross margin of Rs. 2319 million during 2008-09. Though there is still some pressure on the margins due to execution of some low margin nation building projects and provision on account of arrears of pay, your Company has been able to earn Rs. 1877 million as profit before tax, 17% more compared to 2007-08.

The Company has registered an operating income of Rs. 26543 million. This is attributable to expeditious execution of projects on the domestic front, as well as significant income earned from foreign projects in 2008-09.

Most of the targets under the Memorandum of Understanding between Ircon and Ministry of Railways have been achieved which would bring your Company under "Excellent MoU rating." The total dividend to the shareholders for 2008-09 works out to Rs.30 for every Rs. 10 share and amounts to Rs. 296.94 million.

Your Company completed a major portion (101 Kms of Anantnag-Rajwansher-Baramulla Section out of 119 Kms) of Qazigund- Baramulla section of Udhampur- Srinagar- Baramulla Rail Link Project in J&K which was opened for passenger train services in the valley of J&K. The balance 18 Km stretch on Qazigund - Anantnag section has also been completed. Out of 50 infrastructure development companies, Ircon was recently (March 2009) declared by CNBC -TV18 as a winner of Infrastructure Excellence Award in Railway category for execution of Qazigund-Baramulla Rail Link Project in J&K and its impact on the Economy.

FINANCIAL HIGHLIGHTS

Some important indicators of financial performance of the Company forthe year 2008-09 vis-a-vis 2007-08 are given below: Financial Performance Indicators

(Rupees million) 2008-09 2007-08 % age increase

1. Total income/Gross sales 27876 20931 33% 2. Total Operating income* 26543 19682 35% 3. Operating income from Foreign Projects 8027 2331 244% 4. Profit before tax 1877 1605 17% 5. PBT from Foreign Projects 1021 (15.27) Turn around from losses 6. Grossmargin 2319 2016 15% 7. Net worth 10747 9489 13% 8. Earnings per share (in Rupees) 141.63 114.97 23% 9. Total Foreign Exchange Earnings 8083 2215 265% 10. Foreign Exchange Outgo 7127 1841 287% 11. Net Foreign Exchange Earnings 956 374 156%

* Includes unallocable operating income of Rs. 39 million in 2008-09 and Rs. Nil in 2007-08 (Refer para 7 of Notes to Accounts in Schedule R)

The performance of the Company on domestic front has improved in terms of operating income by 6% from Rs.17351 million in 2007-08 to Rs. 18477 million in 2008-09, but profit before tax from domestic projects has however decreased by 7% from Rs. 1596 million in 2007-08 to Rs. 1488 million in 2008-09. On the international front, performance of the Company has improved substantially both in terms of operating income and profit before tax as the figures specified above reveal. Overall, the ratio of net profit to net worth has improved to 13.04% from 11.99%, though the ratio of PBT to turnover has declined to 6.73% from 7.67% in 2007-08. The margins are expected to improve in the forthcoming years.

Foreign Exchange Earnings

There is substantial increase in Net Foreign Exchange earnings due to good progress of Malaysia project.

Dividend

The Company had paid an interim dividend of Rs. 200.93 million @ Rs. 20.30 per share i.e. 203% on the paid-up share capital of Rs. 98.98 million in February 2009 to the shareholders, with the approval of the Board of Directors. The Board of Directors has now recommended a final dividend @ Rs. 9.70 per share i.e. 97% on the paid-up share capital which would amount to Rs. 96.01 million for consideration by the shareholders. The total dividend for the year 2008-09 is the same as last year at the same rate of Rs.30 per Rs.10 share which works out to about 21.18% of the post-tax profits of Rs. 1401.82 million for the year 2008-09. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2008-09 will then stand at Rs. 2464 million approximately.

Appropriations / Tax Provisions/ Reserves

1. An amount of Rs. 25 million has been re-appropriated to the Profit & Loss Account for the year ended 31 st March 2009, in terms of section 80HHB of the Income-taxAct, 1961, taking the closing balance in Foreign Projects Reserve to Rs. 279 million.

2. An amount of Rs. 5 million has been re-appropriated to the Profit & Loss Account for the year ended 31st March 2009, in terms of section 80HHBAof the Income-taxAct, 1961, taking the closing balance in Housing Projects Reserve to Rs.49.50 million.

3. As per Accounting Standard-11, a Foreign Exchange Fluctuation Reserve had been created to reflect the exchange difference arising from translation of financial statements of non-integral foreign operation. During the year 2008-09, due to depreciation of rupee vis-a-vis USD there is a gain of Rs. 203.70 million resulting in a positive balance of Rs. 203.70 million in the said reserve.

4. As per sub section (1) of section 115-0 of the Income-taxAct, 1961, a tax provision of Rs. 16.32 million has been made on the proposed dividend. The tax paid on the interim dividend disbursed during the year amounts to Rs. 34.15 million.

5. After the aforementioned appropriations, an amount of Rs. 1084.41 million has been transferred to General Reserve from the profits of the Company, taking the General Reserve as on 31 st March 2009 to Rs. 10116.24 million.

OPERATIONAL PERFORMANCE

The Company secured works worth Rs. 27021 million during the year 2008-09 and works worth Rs. 280 million thereafter. The work load as on 31.3.2009 is Rs. 84551 million which excludes Algeria project secured in June 2008 but now directed by the client to be closed.

A. Foreign Projects Completed:

Your Company completed three projects abroad during 2008-09, two projects in Malaysia, namely, rehabilitation of about 128 km track in five sections of Malaysian Railway (KTMB), valued at around Rs. 650 million, in association with four Malaysian local contractors, and Supply and maintenance of 27 locomotives valued at Rs. 174 million; and one project for supply and erection of equipment and material at Kabul International Airport in Afghanistan, valued at USD 5.97 million (Rs. 260 million approx.).

After the close of the year, Ircon completed a road project for pavement strengthening of about 130 Km length on East-West Highway from Belbari to Chauharawa in Nepal, originally valued at Rs. 609 million against all odds. It was scheduled to be completed by June 2007, but due to serious law and order problems, strikes, insurgency and civil commotion as well as acute shortage of diesel in the project region of Nepal, completion of the project got delayed. Accordingly Ircon preferred claims with the Government of Nepal. Finally, in order to prevent erosion of profit already achieved, to ensure safety of Ircons employees, and as advised by Indian Embassy, Ircon had applied for foreclosure of contract. The Government of Nepal agreed for reduction in the scope of work to approx. Rs. 495 million in view of the problems being faced by Ircon. Ircon has completed the project on 30th June 2009 and handed it over to the client.

B. New/ On-going Foreign projects:

Eight projects, including the new ones secured, are in progress -- two in Ethiopia, two in Malaysia, and one each in Mozambique, Afghanistan, Sharjah, and Sri Lanka.

Ethiopia

1. A100 km Dera-Mechara road upgrading project funded by World Bank valued at Rs. 679 million has been substantially completed (95.61 %) on 10th July 2009 and handed over to the client, Ethiopian Roads Authority. The remaining works will be completed well before the expiry of defect liability period of 12 months.

2. Ircon secured a project, in August 2008, for procurement of sub-station equipment for Ethiopian Electric Power Corporation (EEPCO), to be completed within a scheduled period of 18 months, at a value of Rs. 663 million, which is in progress.

Malaysia

3. Ircon continued to operate 20 meter gauge diesel locomotives on Malaysian Railway System (KTMB) during 2008-09 as per the lease and maintenance contract.

4. Ircon was awarded a double tracking project (about 94 km length between Seremban and Gemas on design and build basis including all electrification, signaling and communication works) in Malaysia by KTMB, (Ministry of Railways), Government of Malaysia, at a value of Rs. 40840 million (1 billion USD). The work is scheduled to be completed by January 2012. Physical works have started after detailed design in July 2008 as per schedule. Overall financial progress up to March 2009 was RM 680 million (i.e. 20% of the contract value), though some initial delays took place due to non-availability of encumbrance free land at some locations.

Mozambique

5. Ircon is executing works worth USD 68 million under the Beira Rail Concession Project in Mozambique awarded by Ministry of Transport (CFM), Government of Mozambique, to Companhia Dos Caminhos De Ferro Da Beira (CCFB), a joint venture company in Mozambique, in which Ircon has 25% equity stake, RITES has 26%, and CFM, a railway undertaking of Mozambique, has 49%.

The concession project has made substantial progress despite constraints. The track rehabilitation work on Dondo-lnhamitanga- Marromeu section was completed on 30th September 2008. The newly rehabilitated section from Dondo to Inhamitanga and Branch line from Inhamitanga to Marromeu was opened to traffic from 29th November 2008 with the flagging off of the first passenger train at Marromeu by the President of Mozambique. Regular passenger trains between Marromeu and Beira have started running on weekends along with some goods trains carrying lime stone from Muanza to Dondo cement factory. The people of this area have seen a passenger train running between Marromeu and Beira aftera gap of 25 years. The balance works are likely to be completed by November2009.

Financial Commitment of Ircon in this JVC is comprised of:

Total Commitment (USD million)

Equity 1.25 ShareholdersLoans 26.75 Total 28.00

An amount of USD 1.25 million towards equity and USD 18.185 million towards shareholders loan has already been paid. All the aforesaid commitments and payments have been made after they were approved by the Board of Directors unanimously as required by section 372Aof the Companies Act, 1956.

6. Ircon has secured a project on 28th December 2008 for supply and installation of 220/20 KV new Aybak sub-station, and bay expansion work at an existing Mazar-e-Sharifsub-station(220/20KV) in Afghanistan from Ministry of Energy & Water, Afghanistan, to be completed within 18 months, at a value of Rs. 456 million, which is in progress.

Sharjah

7. Ircon had entered into an agreement in 2000-01 with WS Atkins for providing them design support for re-signalling of railway system on West Coast main line of British Railways for a year. The operating team for this project is based at Sharjah. Considering the good quality of work done by Ircons personnel, the contract has been further extended up to December 2010.

Sri Lanka

8. Ircon has been awarded a contract by Ministry of Transport, Sri Lanka, for upgradation of Colombo-Matara coastal railway line, under Indian Line of Credit, at a value of USD 78 million (Rs. 3367 million). Out of the total work, work of USD 36.24 million has been taken up for execution in Phase I. The work is expected to be completed in July 2010.

Algeria

9. Ircon had secured as a consortium (Ircon-Aska) a double tracking project in Algeria in June 2008 from National Company for Railway Transport (SNTF), Infrastructure Section, Algeria. Ircons share of work was 70% valued at Rs.7805 million. The work involved laying of double track of about of 93 km between OUEDSLY and YELLELL on Algiers- Oran line by October 2010. After the issue of order to start the work by client, mobilisation for the project was completed. Meanwhile, as per instructions from the client, Ircons consortium partner was removed from the consortium and Ircon took up the work on its own. Survey and design work has also been almost completed and part consignment of rails have been procured. Physical work at site was also started. However, suddenly now client has issued order to stop the work followed by a recent communication to close the contract.

C. Likely Foreign projects

Concerted efforts are being made to secure contracts in Middle East Countries, Bangladesh, and African Countries.

D. Projects Completed in India

During the year seven projects were completed in India, three projects pertained to construction of sub-stations for Power Grid Corporation of India Limited (PGCIL); two were upgradation of roads -- Bhognipur-Choudgra Road (UPSRP-04) and Katra-Bilhaur Road (UPSRP-01), one was construction of additional works for College of Veterinary Science and Animal Husbandry at Mizoram, and one project was for Metro Railway Kolkata.

E. New/On-going Indian Projects:

During 2008-09 your Company secured four projects in India, namely, Ganga Bridge (railway works), Construction of RoBs in Tamil Nadu (road/ highway projects), Track work of Phase-ll corridor (contract BT-2) (Delhi Metro Track works) and New University Complex of Central Institute of Fisheries Education (CIFE), Versova, Mumbai, (Phase III) (Building Works). Some new/ on-going projects in India are given at Annexure-"A".

BOT project through JVC

A joint venture company (JVC) called "Ircon-Soma Tollway Private Limited" (ISTPL) incorporated on 19th April 2005, with 50% equity participation of both Ircon and Soma Enterprise Limited (a construction company) is executing a BOT project for four laning of Pimpalgaon- Dhule section of NH-3 from km 380 to km 265 in Maharashtra for National Highways Authority of India (NHAI). It is expected toll operation for Phase-I may commence in August 2009 and for the remaining portion of the road by December2009.

Ircon has committed an amount of Rs. 640 million (its 50% share in the equity of ISTPL) by way of equity, Rs. 100 million as unsecured loan, and a corporate guarantee, if required, for an amount not exceeding Rs. 2000 million in ISTPL. So far Ircon has invested Rs. 638.70 million by way of equity in ISTPL but no corporate guarantee has been extended. However, Ircon has pledged its present shareholding and has committed pledging of future shareholding in ISTPL in connection with a term loan of Rs. 4500 million being taken by ISTPL from 8 banks, State Bank of India being the lead bank lender. All the commitments have been made after they were approved by the Board of Directors unanimously as required by section 372Aof the Companies Act, 1956.

Soon afterthe close of the year, the Company secured a project, in April 2009, for planning, design, and construction of College of Veterinary Sciences and Animal Husbandry at Selesih.Aizwal, in Mizoram for Central Agricultural University, Imphal, at a value of Rs. 280 million.

F. Status of settlemen to foutstanding dues of closed foreign project, Iraq.

The Company had executed four projects in Iraq before 1990 out of which three projects (Samawa rail and signaling and Al-muthana) were covered under Deferred Payment Agreement (DPA) protocol and one project named Baiji project awarded to Ircon in 1989 was not covered underthesaid DPA protocol.

Due to gulf war when payments from clients were not forthcoming, Government of India (GOI) had bailed out project exporters in Iraq including Ircon underthe DPAprotocol.

The outstanding dues, under DPA protocol, as certified by Central Bank of Iraq (CBI) to Exim Bank up to September 1995, were settled by GOI by issuing bonds in two phases. Subsequent to 2nd phase, CBI had further certified (confirmed by Exim Bank in May 2000) the balance amount of USD 8.89 million (equivalent to Rs. 318.21 million converted at the last settlement rate of 1 USD = Rs. 35.802) to Exim Bank, still awaiting settlement by GOI, for which Company had conveyed its consent to Ministry of Railways vide its letter dated 26.05.2005. Corresponding to these dues, interest payable to sub-contractors on back-to-back basis amounting to USD 4.20 million (equivalent to Rs. 150.37 million converted at the last settlement rate of 1USD= Rs 35.802) had been provided in the books of account which is still continuing.

Out of the dues (including claims) under Non-DPA protocol for USD 5.55 million, the Company has received an amount of Rs 227.20 million in 2008-09 which includes full amount towards outstanding principal of USD 3.356 million (Rs. 160.6 million @1 USD = Rs. 47.86) and interest thereon Rs 66.6 million in respect of the said Baiji Project. The balance claim of USD 2.19 million is being pursued. However, the same has not been accounted for in the books of accounts in terms of Accounting Policy No. 21 (b), which will be done as and when the amount is received.

The accrued interest on DPA dues and provision for interest to sub-contractors on back-to-back basis have been translated at the last settlement rate with the Government of India, based on prudence as in previous year. Had the dues been translated at the closing exchange rate as on 31.03.2009 as per AS-11, "Other Current Assets" would have increased by Rs.130.90 million and stood at Rs.839.05 million, "Provisions" would have increased by Rs 61.86 million and stood at Rs. 4254.89 million, and "Profit before Tax" would have increased by Rs. 69.04 million and stood at Rs. 1945.70 million. (Refer para 14of Notes to Accounts in Schedule R).

TECHNOLOGYUPGRADATION, ABSORPTION, AND R&D

The Company has an "Engineering Control and Audit Cell" to constantly upgrade technology and construction techniques, and to look into the aspects of appropriate designing and value engineering. The cell reviews the design and drawings for various projects and provides engineering solution, including standardization of design data to help in marketing efforts and conceptualisation of new projects with technical back up in alignment design, geo-technical analysis, etc. Ircon is using latest technology and state of the art equipments in execution of infrastructure projects.

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company. The Company has been continuously tuning its training programmes to meet the organisational needs - present and future - through a systematic training need analysis. Due to boom in infrastructure development, there is a serious threat of poaching and a numberof officers are leaving.

The total manpower strength as on 31st March 2009 stands at 1964 which includes 187 deputationists, majority of whom (128) are deployed on foreign projects. Out of 1575 regular employees, 1458 are employed on Indian projects. The total number of women employees is 89, out of which 40 are executives. 60% of the employees of the Company areengineers.

The Company has various schemes of staff welfare in place like educational scholarships, one time educational grants for admission to professional degrees and diploma courses, educational awards, etc. to meritorious children of employees, marriage assistance for daughters and dependant sisters of group C and D employees, etc. Educational assistance is also given to the wards of deceased employees. The Company has a tie-up with resorts to provide resort facilities to employees at concessional rates.

The Company has been taking up various welfare measures at its project sites both in India and abroad, like running an HIV awareness campaign in the vicinity of the project site in Ethiopia with the help of a local NGO including testing facilities for employees, workers etc. on the site.

The Company aims to provide congenial and safe working atmosphere to women employees. The Company has a complaint committee for prevention of sexual harassment at work place which immediately attends to any complaint, even informal, so that problems are nipped in the bud. The Company encourages its women employees to tap their potential by participating in various forums like Women in Public Sector (WIPS) under the aegis of SCOPE for development of women, self defense training for women organized by Delhi Police, etc.

The Company has been encouraging sports amongst its employees. Ircon Cricket team participated in DDCA(Delhi and District Cricket Association) league matches. The 33rd Annual Day was celebrated on 28th April 2009 with traditional gaiety. On this occasion, excellent work done by Ircon employees and select projects was appreciated and rewarded.

COMPLIANCES

Presidential Directive

Presidential approval was received during the year for implementation of revised pay scales and DA under both CDA and IDA pay patterns w.e.f. 1st January 2006 and January 2007 respectively.

Official language

Ircons office has been notified under Rule 10(4) of the Official Language Rules 1976 as its staff have acquired a working knowledge of Hindi. The documents specified in section 3(3) of the Official Language Act, 1963, are being issued bilingually. Companys bilingual website is being regularly updated. All the computers have bilingual facility. All the quarterly meetings of Official Language Implementation Committee, workshops, etc. are being held regularly. Progressive use of Hindi is encouraged through various incentive schemes.

Right to Information Act, 2005

As per the requirements of the Act, necessary updated information including names of Central Public Information Officer and Assistant Public Information Officer as well as State Level Public Information Officer in each of the four Regional offices of Ircon are posted on the website of the Company. Queries received are replied within the stipulated time.

Particulars of employees

No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakhs or more per month during the year 2008-09.

Conservation of Energy and environmental concerns

The Company has an Environmental and Health Policy since April 2006. This Policy of the Company envisages establishment and maintenance of environmental system in all construction activities. It seeks to follow best environmental management practices in addition to compliance with the relevant environmental laws. Regular internal training and awareness programmes on Environmental Management System are conducted at project sites and offices of the Company. The Company is making a study with an intention to introduce Environmental Management System as per ISO- 14001.

Within the scope available for saving energy in construction contracts, every effort is being made for conserving energy and reducing its consumption. All the Plants have pollution control and dust mitigation systems. The camp sites, workshops, etc. have necessary devices like oil traps and other measures so that air and water bodies are not contaminated. Environment Management Plan has been implemented in World Bankfunded road and other projects.

Various state of the art systems have been installed and environment friendly technology has been adopted in the Corporate Office building to conserve energy.

Vigilance activities

Vigilance cell of Ircon is headed by a full time Chief Vigilance Officer (CVO) on deputation from the Government. The CVO oversees both preventive as well as punitive vigilance.

Briefly the vigilance activities included settlement of various complaint cases; issue of various circulars based on guidelines issued by CVC and Railway Board for system improvement and compliance from vigilance angle; time-bound settlement of punitive vigilance cases; accelerating the process of preventive vigilance; enforcement of rotational transfers, specially sensitive posts; induction of better transparency in tenders/ contracts; circulation of Dos & Donts for all works and also for officers working in projects; vigilance training for executives and putting in place the complaint handling & grievance redressal system etc. The vigilance set up in the organization has been suitably strengthened and trained to discharge the above functions effectively. Anumberof measures has been initiated in respect of thrust areas identified forfocused attention such as "Leveraging of technology for improving vigilance administration"; system improvement and e-tendering/payment etc. As a result of concerted efforts made by the vigilance set up in the sphere of preventive vigilance, the number of punitive cases has been minimized.

QUALITY MANAGEMENT

Quality Management System (QMS) has been successfully sustained and continually improved since 1996 when the Company as a whole was first certified for ISO-9002 by TUV Suddeutschland Private Limited (TUV). Ircon has also been re-certified by TUV as per latest revised code ISO-9001 - 2000 in 2003, which has been revalidated after every three years. During August-September 2008, recertification audit was conducted wherein the certification was validated fora further period of 3 years up to 28.09.2011.

INFORMATION TECHNOLOGY AND DEVELOPMENTOF ERP

Ircon is maintaining state of the art data center facilities with dedicated leased line circuits for data communication between projects and corporate office. Data center is equipped with network and internet security appliances for secured high speed LAN and WAN connectivity. Ircon is using environment friendly Linux based thin-client solution for effective management of users data centrally, and in a secured manner.

Primavera based Project Management Information System is being used to monitor plans and progress of projects in Malaysia and Jammu and Kashmir. Specialized softwares for creation of designs of International Standard, Online Progress Reporting (OPR) System for monitoring the progress of projects periodically, and Knowledge Management Portal for maintaining organization wide knowledge are also being used.

SAP ERP based Integrated Information System (IIS) is in use for effective management of Finance and Human Resources. ERP modules developed Â¦ so far are being used on stand alone mode. The process of implementation of ERP in Ircon has been adversely affected as these modules could not be integrated and customized so far to suit the requirements of the Company. The ERP system developed in Ircon has been audited by the principal software vendor, and further options are being evaluated.

AWARDS

The Company secured an award titled "one of Indias most admired construction companies" from Construction World, a construction business magazine, which was presented by Mr. Anil Deshmukh, the then Minister for Public Works, Government of Maharashtra, to Mr. Ankush Krishan, the then Managing Director, Ircon, atafunction held in Mumbai on 24th October2008.

Ircon received Infrastructure Excellence Award in Railway Category on 25th March 2009 for execution of Qazigund - Baramulla Rail Link Project and its impact on the economy from Essar Steel and E-18 in association with CNBC - TV18.

INTEGRALREPORTS

A "Management Discussion and Analysis Report" and a "Corporate Governance Report" form an integral part of this Directors Report as per the requirement of clause 49 of listing agreement and have been placed as its Annexures "B" & "C" respectively.

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, mission & objectives, outlook, operational performance, its resources & systems, strengths, opportunities, constraints, risks & concerns, strategies, prospects, etc.

The Corporate Governance Report highlights the philosophy of Corporate Governance and Key Values of the Company, composition of Board of Directors and its Committees, their details including profile of directors who joined the Board during 2008-09 and thereafter, attendance and remuneration of directors etc., other relevant disclosures, CEO/ CFO Certification, and general information for shareholders. It is supplemented by following compliance certificates:

(i) Certificate signed by the Managing Director affirming receipt of compliance with the Code of Conduct from all Board members and Senior Management personnel during the year 2008-09 (placed at Annexure "C-1") as per clause 49 (I) (D) (ii) of the Listing Agreement;

(ii) Certificate from Managing Director and Director Finance about due compliance of sub-clauses (a) to (d) of clause 49 (V) of the Listing Agreement (placed at Annexure "C-2"); and

(iii) Certificate of compliance of Corporate Governance provisions of clause 49 signed by a practising company secretary (placed at Annexure "C-3") as per clause49 (VII) of the Listing Agreement.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure except as otherwise stated in the annual accounts.

ii) that such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on 31 st March 2009 and of the profit of the Companyfortheyear2008-09.

iii) that proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) thatthe annual accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2008 to March 2009, six meetings of the Board of Directors were held with three meetings in the quarter ended September 2008, one meeting each in the quarters ended June 2008, December 2008, and March 2009.

The following Directors ceased to hold office during 2008-09:-

1 Mr. K.C. Jena

Part-time Chairman (official)

Ceased to be Director due to superannuation on 31.01.2009 (AN). Held office from 19.09.2007 (FN) to 31.01.2009 (AN).

2 Mr. Ankush Krishan Managing Director

Ceased to be Director due to superannuation on 31.01.2009 (AN). Held office from 01.09.2006 (FN) to 31.01.2009 (AN).

3 Mr. Mohan Tiwari Director Projects

Relinquished the post of Director Projects, on 01.02.2009 (FN), due to appointment as Managing Director.

Held office from 08.08.2003 (AN) to 01.02.2009 (FN).

4 Mr. R.K. Goyal

Part-time (official) Director

Ceased to be Director due to superannuation on 30.11.2008 (AN). Held office from 10.04.2008 (FN) to 30.11.2008 (AN)

The following Director ceased to hold office after 31 st March 2009:-

1 Mr. Sudhir Mathur Director Finance

Ceased to be Director due to superannuation on 30.06.2009 (AN). Held office from 01.11.2005 (FN) to 30.06.2009 (AN).

The following Directors are holding office as on date:-

1 Mr. S.S. Khurana, Part-time Chairman (official) From 16.03.2009 (FN) onwards 2 Mr. Mohan Tiwari, Managing Director From 01.02.2009 (FN) assumed the charge of the post of Managing Director. Earlier he was working as Director Projects 3 Mr. Madan Lai, Director Works From 23.04.2007 (FN) onwards 4 Mr. R. Subramanian, Part-time Director (non-official) From 29.06.2007 (FN) onwards 5 Mr. N. Parthasarathy, Part-time Director (non-official) From 01.10.2007 (FN) onwards 6 Mr. A. K. Tiwari, Part-time Director (official) From 19.01.2009 (FN) onwards

AUDITORS

The auditors of the Company appointed by the Government of India for 2008-09 are:-

Statutory Auditors:

Gianender & Associates, New Delhi For Company as a whole

Branch Auditors for projects in India:

Gianender & Associates, New Delhi All projects under Northern Region Prem Gupta & Co., New Delhi All projects in Jammu & Kashmir and Punjab (Designated as Srinagar Region) Prakash & Santosh, Kanpur (Uttar Pradesh) UP-01, UP-04, UP-05, Allahabad Projects, Gwalior, MAP Jhansi, Lucknow, Mughalsarai, etc. (Designated as Kanpur Region) A. Kayes & Co., Kolkata (West Bengal) All projects under Eastern Region Mittal & Associates, Mumbai (Maharashtra) All projects under Western Region A.R. Viswanathan & Co., Bengaluru (Karnataka) All projects under Southern Region

Branch Auditors for projects Abroad:

Gianender & Associates, New Delhi All projects in Malaysia N. Krishnaswamy & Co., Nepal Nepal HST& Co., Ethiopia Ethiopia SCA Consultores, Mozambique Mozambique S. N. Nanda & Co., Afghanistan Afghanistan Fiduciaire Dexpertise Comptable Fidexa Algeria

ACKNOWLEDGEMENT

We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs and other Ministries, Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks, Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio, and our esteemed clients both in India and abroad for their continued interest in and support to the Company. We place our appreciation on record for all our predecessors for their invaluable contribution to the growth of the Company.

We take this opportunity to reaffirm our trust in the competence and sincerity of purpose of the employees of this Company and record our grateful thanks to them for their tireless work to achieve the cherished goals of the Company and their dedication to quality which keeps the flag of Ircon high and strong at all times.

For and on behalf of the Board of Directors

S.S.Khurana Chairman

New Delhi Dated: 30.07.2009

Mar 31, 2008

The Directors of your Company have pleasure in presenting their 32nd Report of the Company for the financial year 2007-08.

INTEGRAL REPORTS

A "Corporate Governance Report" and a "Management Discussion and Analysis Report" form an integral part of this Directors Report as per the requirement of clause 49 of listing agreement and have been placed as its Annexures "A" & "B" respectively.

The Corporate Governance Report highlights the philosophy of Corporate Governance and Key Values of the Company, composition of Board of Directors and its Committees, their details including profile of directors who joined the Board during 2007-08 and thereafter, attendance and remuneration of directors etc., other relevant disclosures, CEO/ CFO Certification, and general information for shareholders. It is supplemented by following compliance certificates:

(i) Certificate signed by the Managing Director affirming receipt of compliance with the Code of Conduct from all Board members and Senior Management personnel during the year 2007-08 (placed at Annexure "A-1") as per clause 49 (I) (D) (ii) of the Listing Agreement;

(ii) Certificate from Managing Director and Director Finance about due compliance of sub-clauses (a) to (d) of clause 49 (V) of the Listing Agreement (placed at Annexure "A-2"); and

(iii) Certificate of compliance of Corporate Governance provisions of clause 49 signed by a practising company secretary (placed at Annexure "A-3") as per clause 49 (VII) of the Listing Agreement.

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, mission & objectives, outlook, operational performance, its resources & systems, strengths, opportunities, constraints, risks & concerns, strategies, prospects, etc.

PERFORMANCE

Your Company has recorded an all time high turnover of Rs. 20931 million (as compared to a turnover of Rs. 15432 million during 2006-07) and a profit before tax of Rs. 1605 million (as compared to Rs. 1110 million during 2006-07) during the year. There has been a quantum jump by nearly 36% in turnover and 45% in Profit before tax (PBT) over the previous year.

The Company has secured works worth Rs. 51147 million during the year 2007-08 and works worth Rs. 23523 million thereafter. The work load as on 31.3.2008 is Rs. 88748 million. Most of the targets under the Memorandum of Understanding between Ircon and Ministry of Railways for 2007-08 has been exceeded which would bring your Company under "Excellent" MOU Rating.

FINANCIAL HIGHLIGHTS

Some important indicators of financial performance of the Company for the year 2007-08 vis-a-vis 2006-07 are given below:

A. Financial Performance Indicators. Rupees in million 2007-08 2006-07 %age increase

1. Total income/Gross sales 20931 15432 36% 2. Operating income 19682 14748 33% 3. Profit before tax 1605 1110 45% 4. Gross margin 2016 1352 49% 5. Net worth 9489 8745 8.5%

B Operational Performance

The performance of the Company on domestic front has improved with an increase in Operating Income by 29% from Rs. 13443 million in 2006-07 to Rs. 17351 million in 2007-08. The profit before tax from domestic projects has also increased by 86.45% from Rs. 856 million in 2006-07 to Rs. 1596 million in 2007-08. On the international front, though performance of the Company has improved in terms of operating income during 2007-08 vis-a-vis 2006-07, but profit before tax has decreased. The Operating Income from international projects has increased by 91.22% from Rs. 1219 million in 2006-07 to Rs. 2331 million in 2007-08. The profit before tax from foreign projects has however decreased from Rs. 221 million in 2006-07 to Rs. (-15.27) million in 2007-08 mainly on account of heavy losses from Ethiopia project.

Profit before tax from domestic projects has improved during 2007-08, inspite of low margin nation building projects like Pradhan Mantri Gram Sadak Yojana (PMGSY), Rashtriya Sam Vikas Yojana (RSVY) and Married Accommodation Projects (MAP) of Ministry of Defence being executed by the Company.

The position is expected to improve in the forthcoming years. The order book has been filled up, particularly with foreign projects, which is our thrust area. The share of turnover from foreign projects, BOT, and other high margin projects is expected to significantly improve in the near future, impacting favourably on the margins.

Foreign Exchange Earnings

The total foreign exchange earnings during 2007-08 was Rs. 2215 million in comparison to Rs. 1597 million in 2006-07 due to increase in work receipts, other interest and foreign exchange fluctuation gain in 2007-08. The foreign exchange outgo was more during 2007-08 at Rs. 1841 million as against foreign exchange outgo of Rs. 1086 million in 2006-07 due to tremendous increase in operating and other expenses in Ethiopia during 2007-08 resulting in heavy losses there. The net foreign exchange earnings during 2007-08 is thus only Rs. 374 million, as against net foreign exchange earnings of Rs. 511 million in 2006-07.

Dividend

Expecting that the MOU turnover target of Rs. 16000 million under "Excellent" category will be exceeded and there will be adequate profits in 2007-08, the Company paid an interim dividend of Rs. 200.93 million @ 203% on the paid-up share capital of Rs. 98.98 million in February 2008 to the shareholders, with the approval of the Board of Directors. The Board of Directors has now recommended a final dividend @ 97% on the paid-up share capital which would amount to Rs. 96.01 million for consideration by the shareholders. The total dividend paid for 2006- 07 was Rs. 257.35 million @ 260% on the paid-up share capital of the Company. The total dividend for the year 2007-08 works out to Rs. 296.94 million, @ 300% on the paid-up share capital, which is nearly 26.09% of the post-tax profits of Rs. 1137.98 million for the year 2007-08. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2007-08 will then stand at Rs. 2167 million approximately.

Appropriations/Reserves

1. Foreign Projects Reserve

Section 80HHB of Income-tax Act allowed specified percentage of profits earned from foreign projects which were not covered under Double Taxation Avoidance Agreements to be set aside and transferred to a separate Reserve account called Foreign Projects Reserve till 2003-04. No deduction is allowed in respect of "Foreign Projects Reserve" account under this section from 2004-05. This Reserve has to be utilized only for the purpose of business, other than distribution by way of dividends or profits, within a period of five years. The amount standing in this Reserve account is to be written back to Profit & Loss Account on the expiry of five years. Accordingly, an amount of Rs. 27 million has been re-appropriated to the Profit & Loss Account for the year ended 31st March 2008, taking the closing balance in this reserve to Rs. 304 million.

2. Housing Projects Reserve

Similarly, section 80HHBA of Income-tax Act allowed till 2003-04 specified percentage of profits earned from execution of housing project aided by World Bank to be set aside and transferred to a separate Reserve account called Housing Projects Reserve. No deduction is allowed in respect of "Housing Projects Reserve" account from 2004-05. This Reserve has to be utilized only for the purpose of business, other than distribution by way of dividends or profits, within a period of five years. The amount standing in this

Reserve account is to be written back to Profit & Loss Account on the expiry of five years. Accordingly, an amount of Rs. 17 million been re-appropriated to the Profit & Loss Account for the year ended 31st March 2008, taking the closing balance in this reserve to Rs. 54.5 million.

3. Foreign Exchange Fluctuation Reserve

Accounting Standard-11 issued by the Institute of Chartered Accountants of India deals with the effect of changes in foreign exchange rates. As per this Standard exchange difference arising from translation of financial statements of non-integral foreign operation (through a JV company) should be accumulated in a Foreign Exchange Fluctuation Reserve. Accordingly, Foreign Exchange Fluctuation Reserve had been created from 2004-05. During the year 2007-08, due to appreciation of rupee vis-a-vis USD there is a loss of Rs. 46.08 million resulting in a negative balance of Rs. 46.08 million in the said reserve which has been appropriated from Profit & Loss Appropriation Account.

4. Income-tax on Dividend

As per sub section (1) of section 115-0 of the Income-tax Act, 1961, inserted by the Finance Act of 2003 w.e.f. 1.4.2003, any amount declared/distributed/paid by way of dividend shall be chargeable to additional income-tax. Hence, a tax provision of Rs. 16.32 million has been made on the proposed dividend. The tax paid on the interim dividend disbursed during the year amounts to Rs. 34.15 million.

5. General Reserve

After the aforementioned appropriations, an amount of Rs. 788.49 million has been transferred to General Reserve from the profits of the Company, taking the General Reserve as on 31st March 2008 to Rs. 9031.83 million.

OPERATIONAL PERFORMANCE

A. Foreign Projects Completed:

Your Company completed three projects abroad during 2007-08, one each in Afghanistan, Bangladesh and Malaysia, and one project for providing services in U.K. after the close of the year 2007-08. They are detailed below:-

1. A turnkey electrical project for construction of 220 kv sub-station at Naibabad near Mazar-e-Sharif in Northern Afghanistan, valued at USD 5.2 million (Rs. 224.2 million approx.) for Ministry of Energy and Water, Afghanistan, secured in October 2005, was completed in August 2007. This was the first project of Ircon in Afghanistan. The project was funded by Asian Development Bank.

2. A turnkey signalling project, for design, supply, installation, testing, commissioning and maintenance of modern signalling and interlocking system at 12 stations on Akhaura - Sylhet section of East Zone of Bangladesh Railway, valued at USD 7.04 million plus 29.53 million BD Taka (equivalent to Rs. 329 million) secured in March 2005, was completed in March 2008. Two year maintenance period is in progress with effect from 26.03.2008.

3. Contract for leasing and maintenance of meter gauge diesel locomotives on Malaysian Railway System (KTMB), valued at Rs. 152 million secured in January 2007, was completed in December 2007.

4. The work under an agreement signed with Balfour Beatty Rail Projects Limited (BBRPL) for provision of Permanent Way (P-Way) supervisors for undertaking P-Way rehabilitation works in U.K was completed in June 2008. The total income including other income from the projects during 2007-08 is Rs. 3.57 million.

B. New/On-going Foreign projects:

Some new/on-going projects in various countries, namely, Ethiopia, Malaysia, Mozambique, Nepal, Afghanistan, Iran and U.K. are:-

Ethiopia

1. Ircon had secured a World Bank funded road project in August 2004, called Dera-Mechara Road Upgrading (120 Km length) Contract-1 (DERA-MANGA) from Ethiopian Roads Authority, at a value of Rs. 1413 million. In December 2006, a length of 20 Km (Chole-Magna section) had been omitted from the scope of work as the client/consultant carried out a design review and reached a conclusion that it is not possible to construct road in that section. As a result, the contract value has got reduced to Rs.767.6 million. Whole work is being done departmentally and now it is expected that the work will be completed by March 2009.

Malaysia

2. Ircon continued to operate meter gauge diesel locomotives on Malaysian Railway System (KTMB) during 2007-08 as per the lease and maintenance contract. The cumulative income from leasing of locomotives since the inception of the project has been USD 103.15 million (Rs. 4123.86 million). KTMB has extended the lease-cum-maintenance contract up to 31st December 2008, the value of which is Rs. 137 million.

Ircon has secured in June 2008, lease and maintenance contract of 5 additional meter gauge diesel locomotives for KTMB, Malaysia, valued at RM 2.8 million (Rs. 30.8 million). This contract is valid up to 31.12.2008.

3. Ircon is an associate of four Malaysian local contractors namely Lion Pacific, IBSUL Holdings, Loh & Loh Constructions, and Aman Selama for track rehabilitation project in Malaysia secured during 2006 for various sections at a total value of approx. Rs. 775 million, which now stands revised to Rs. 650 million due to reduction in scope of work as per site requirements of the client. The project consists of rehabilitation of about 128 km track in five sections, namely, Taiping - Bukit Merah, Pedang Rengus-Sungai Siput, Sungai Siput- Ipoh, Bukit Merah-Parit Buntar and Parit Buntar-Bukit Mertajam of Malaysian Railway (KTMB). The work is scheduled to be completed by December 2008.

4. Ircon has been awarded a double tracking project in Malaysia in December 2007 by KTMB, (Ministry of Railway), Government of Malaysia, at a value of Rs. 40840 million. The work requires laying of new double track of about 94 km length between Seremban and Gemas on design and build basis including all electrification, signaling and communication works. The work is scheduled to be completed by January 2012.

Mozambique

5. Ircon is executing some railway rehabilitation and supply works worth USD 68 million under the Beira Rail Concession Project in Mozambique awarded by Ministry of Transport (CFM), Government of Mozambique, to Companhia Dos Caminhos De Ferro Da Beira (CCFB), a joint venture company in Mozambique, in which Ircon has 25% equity stake. The details of Joint Venture arrangement are given under the head "Joint Venture Companies" in this report.

Nepal

6. Ircon had been awarded in February 2005 a road project in Nepal at a value of Rs. 609 million. The work consists of pavement strengthening of about 130 Km length of East-West Highway from Belbari to Chauharawa. The work commenced on 14th April 2005 and was scheduled to be completed by June 2007. Due to law and order situation, strike, insurgency and civil commotion in the Tarai region of Nepal, there has been frequent disruption of works. The Consultant has granted extension of time for completion up to October 2008. The revised value of the work now is Rs. 450 million due to reduction in scope of work.

Afghanistan

7. Ircon has been awarded a contract in December 2006 by Ministry of Transport and Civil Aviation, Afghanistan, for supply and erection of equipment and material for Kabul International Airport valued at USD 5.97 million (Rs. 260 million approx.). The work is scheduled to be completed by September 2008.

Iran

8. Ircon has secured a contract for supply of spare parts on 1st August 2007 at a value of EURO 0.694 million from Iranian Islamic Republic Railway (IIRR). The first consignment amounting to EURO 0.605 million has already been shipped in June 2008.

United Kingdom

9. Ircon had entered into an agreement in 2000-01 with WS Atkins for providing them design support for re- signalling of railway system on West Coast main line of British Railways for a year. The operating teams for this project were based in Sharjah and U.K. The team based at U.K. had been demobilized in April 2005, whereas team based at Sharjah is continuing. Considering the good quality of work done by Ircons personnel, the contract has been further extended up to December 2008. The total income including other income from the projects during 2007-08 is Rs.55.71 million.

C. Status of settlement of outstanding dues of closed foreign project, Iraq.

The Company had executed four projects in Iraq before 1990 out of which three projects were covered under deferred payment agreement and one project named Baiji project was not covered under Deferred Payment Agreement (DPA) protocol.

The dues of DPA projects outstanding as on date are USD 8.89 million (equivalent to Rs. 318.21 million @ Rs. 35.802). Government of India (GOI) had earlier paid in two tranches the entire principal dues and part interest certified by Iraqi bank up to 30.9.1995. The balance interest of USD 8.89 million is outstanding based on the dues certified subsequent to 30.9.1995. The credit of this amount was certified by Rafidian Bank and confirmed by EXIM Bank. The dues are proposed to be settled by GOI in the third phase of settlement for which the Company had given its consent to the Railway Board in May 2005 for issue of bonds.

As regards dues of Baiji project not covered under DPA protocol, the Company had outstanding dues of USD 6.09 million (USD 3.356 million equivalent to Rs. 120.15 million as per books of account confirmed by client to Rafidian bank and the balance USD 2.734 million receivable from client as claims). After lifting of UN sanctions, the Company has again taken up the matter with Rafidian Bank and the client and also through Indian Embassy in Iraq and Iraq Embassy in India. However, response from Rafidian Bank/client is still awaited. Meanwhile, Ministry of Finance has been approached to consider issue of bonds on the basis of client certification. The Government has now agreed to consider the dues of USD 3.356 million as conveyed by Railway Board vide letters dated 28th March and 11th April 2008 to the effect that the dues will be paid in 2008-09 after finalization of necessary modalities.

D. After the close of the year, the Company secured following two foreign projects, one in Algeria and another in Sri Lanka:

Algeria

1. Ircon has secured as a consortium (Ircon-Aska) a double tracking project in Algeria in June 2008 from National Company for Railway Transport (SNTF), Infrastructure Section, Algeria. Ircons share of work is 70% valued at Rs. 7981 million. The other two consortium partners are ASKA INSAAT (a Turkish company) and SARL TP ASKA (an Algerian company), each having 15% share of work. The work involves laying of double track of about 93 km between OUEDSLY and YELLELL on Algiers - Oran line. The work is scheduled to be completed by October 2010.

Sri Lanka

2. Ircon has been awarded a contract in July 2008 by Ministry of Transport, Sri Lanka for upgradation of Colombo-Matara coastal railway line, at a value of USD 78 million (Rs. 3367 million). The work is expected to be completed in two years.

E. Likely Foreign projects

Concerted efforts are being made to secure contracts in Ethiopia, Sudan, Saudi Arabia, Afghanistan, Bangladesh, Algeria, and Argentina.

F. Projects Completed in India

During the year the Company completed five projects in India namely; construction of concrete sleeper plant at Madhepur for East Central Railway, Hazipur; Construction of cable stayed road over bridge at Chiraiya Tand, Patna; Distribution Management System for Panjim town at Goa for Power Grid Corporation of India Limited (PGCIL); Extension of Secondary Runway at NSCBI Airport, Kolkata for Airport Authority of India, and Setting up of New Zonal Head Quarter office at Hubli for South Western Railway.

Four projects got completed after 31st March 2008, two of which were construction of sub-stations for Power Grid Corporation of India Limited (PGCIL); one was upgradation of Bhognipur-Choudgra Road (UPSRP-04); and one was construction of additional works for College of Veterinary Science and Animal Husbandry at Mizoram.

G. Projects secured in India during 2007-08:

During the year the Company has secured following important works in India:- NHAI Projects

(i) Construction of road over bridges in Madurai - Kanyakumari section of NH-7 including approaches and culverts in the state of Tamil Nadu for National Highways Authority of India at a value of Rs. 1428 million.

Electrical Works

(ii) Railway electrification and associated civil and S&T works for Mughalsarai-Utaratia section (Gr. 136 and 137 under RE Project Lucknow) for Central Organization for Railway Electrification (CORE), Allahabad, at a value of Rs. 3272 million.

H. On-going major projects in India:

Railway works:

(i) Qazigund-Srinagar-Baramulla and Laole-Qazigund New BG Rail Link Project in J&K, valued at Rs. 35350 million in all including the variation orders.

(ii) Construction of Road Over Bridges in the state of Bihar for East Central/ Eastern / North Eastern and Northeast Frontier Railway. The total value of the project is Rs. 3610 million.

(iii) Enhancement of coach production capacity and setting up a wheel shop at Rail coach Factory, Kapurthala, at a value of Rs. 912 million.

(iv) Pre-stressed Concrete sleeper plant at Chak Sikander for East Central Railway, Hajipur, valued at Rs. 99 million.

Road/Highway projects:

(v) Upgradation of Katra-Bilhaur Road (UPSRP-01), at a value of Rs. 1973 million.

(vi) Implementation of Pradhan Mantri Gram Sadak Yojana (PMGSY) for taking up execution of rural roads in 8 districts in the state of Bihar pursuant to an agreement signed on 31st August 2004 with Ministry of Rural Development, Govt. of India, Bihar. The total value of the project is presently Rs. 9150 million approx. and is likely to increase.

(vii) Upgradation of Roads from Nagapattinam to Kattumavadi and New bypass at Nagapattinam, Tituthuraipundi and Muthupet (TNRSP-02) (in JV with SMJ, Indonesia) in Tamil Nadu for Highways Department, Tamil Nadu. Ircons share is valued at Rs. 1137 million.

(viii) Four laning of Pimpalgaon-Dhule section of NH-3- BOT Project in Maharashtra for National Highways Authority of India (NHAI) awarded to Ircon by "Ircon-Soma Tollway Private Limited" (ISTPL), a JV Company between Ircon and Soma Enterprise Limited (Soma), at a value of Rs. 2194 million. Details of this JV are given under the head "Joint Venture Companies".

(ix) Development of State Highways in five districts of Darbhanga, Madhubani, Vaishali, Muzaffarpur and Samastipur under Rashtriya Sam Vikas Yojana (RSVY) in Bihar for Road Construction Department, Govt. of Bihar and Ministry of Shipping, Road Transport and Highway, Govt. of India, at a value of Rs. 6500 million.

(x) Rehabilitation and upgradation of NH-25 (Km. 170.00 to Km. 220.00) to 4-lane configuration on the East- West Corridor in Uttar Pradesh, at a value of Rs. 3030 million.

(xi) New Mangalore Port Road Connectivity Project - four laning and strengthening of NH-17, NH-48 and Managalore Bypass in Karnataka, at a value of Rs. 1708 million.

(xii) Widening and Strengthening of existing NH-31 from 2-lane to 4-lane (Km 526.00 to Km 507.00 of Siliguri- Islampur section and Islampur Bypass of 10.31 Km length in West Bengal) on the East-West Corridor under Phase II Programme of NHDP, at a value of Rs. 2111 million.

(xiii) Construction of Road Over Bridges in Northern Region (Punjab and Jammu & Kashmir), at a value of Rs. 756 million.

(xiv) Six-laning of National Highway (NH-1) in the State of Haryana (Km. 66.000 to Km. 86.000 of Panchi Gujran to Panipat section), at a value of Rs. 1216 million.

Building Projects:

(xv) Three Married Accommodation Projects (MAP) in Allahabad, Bhopal, and Jhansi, at a value of Rs. 3694 million.

Metro Rail works:

(xvi) Construction of super structure with pre-stressed concrete box girders over the already completed sub- structures from Tollygunge to Garia for Metro Railway Kolkata, at a value of Rs.175 million.

(xvii) Delhi MRTS Project Phase-ll (Contract BC-18) for Delhi Metro Rail Corporation. This contract was awarded to a consortium (called "Metro Tunneling Group"(MTG)), of five companies namely, (a) Dywidag (29%); (b) L&T (26%); (c) Samsung (26%); (d) Ircon (9.5%); and (e) Shimizu (9.5%). The value of the contract representing Ircons participating interest of 9.5% is Rs. 489 million.

(xviii) Delhi MRTS Project Phase-ll Project (Contract BE-8)-Supply, installation, testing, commissioning of receiving cum traction cum auxiliary main substations at Jahangirpuri, Mundka, Ambedkar colony (Japan Bank for International Co-operation (JBIC) funded), and Botanical garden (Noida) and Sushant Lok (Gurgaon) (Non JBIC funded) for Delhi Metro Rail Corporation, at a value of Rs. 1250 million.

(xix) Supply, erection, testing and commissioning of traction and auxiliary sub-stations in Tollygunj-Garia section for Kolkata Metro Rail Corporation, at a value of Rs. 475 million.

PGCIL works

(xx) Supply, erection, testing, and commissioning of 400/220 KV Ludhiana sub-station (new) and extension of 400 KV Jallandharand Malerkotla sub-station associated with Northern Region Strengthening Scheme-Ill for Power Grid Corporation of India Limited (PGCIL), at a value of Rs. 567 million.

RVNL works

(xxi) Gauge conversion including electrical works on Rewari-Ajmer section of North Western Railway for Rail Vikas Nigam Limited, at a value of Rs. 1577 million.

(xxii) Construction of roadbed, bridges, facilities, installation of track and electrification in connection with provision of 3rd line of Aligargh-Ghaziabad section (106 Kms.) in the State of Uttar Pradesh (in JV with Gannon Dunkerley & Co. Ltd.). Ircons share is valued at Rs. 1245 million.

Other works

(xxiii) Design, supply, erection, testing and commissioning of 220 KV sub-station and double circuit line at Cuncolim, for Government of Goa, at a total value of Rs. 740 million.

(xxiv) 11 KV distribution network of Kerala State Electricity Board at Thiruvananthapuram city and Kochi city, at a total value of Rs. 1996 million.

I. Works secured in India after 31st March 2008:

(i) Construction of steel superstructure and other ancillary works of Rail cum Road bridge across river Ganga at Patna, for East Central Railway, at a total value of Rs. 11913 million.

(ii) Construction of six ROBs in bypasses of Polur, Tirvannamalai, Vridhachalam and Ariyalur (TNRSP-01) in Tamil Nadu for Highways Department, Government of Tamil Nadu, at a value of Rs. 231 million.

Joint Venture Companies:

A. In Mozambique

Ircon (along with RITES) is working in Mozambique for implementation of a rail concession project there. The Concession is being implemented by an SPV called Companhia Dos Caminhos De Ferro Da Beira (CCFB), a joint venture company, in which Ircon has 25% equity stake, RITES has 26%, and CFM, a railway undertaking of Mozambique, has 49%. The scope of Concession includes rehabilitation of two rail lines and operation and maintenance thereof for a period of 25 years.

Ircon and RITES have formed a consortium called RICON to secure and execute the works awarded by CCFB.

The work of providing Project Management Services to CCFB has been obtained by RICON. Two works awarded to RICON by CCFB for execution by Ircon are (i) Study, design and rehabilitation of Dona Ana Bridge, and (ii) Rehabilitation of 670 kms of rail track on Sena Line. The cost of these two works is approx. USD 42.3 million.

A consortium has also been formed by RICON with a local Mozambican construction company, CETA, to (i) Manufacture PSC (Pre-stressed Concrete) sleepers; and (ii) Produce ballast for the track, the cost of these two works being USD 31 million.

The above works are in progress and are to be completed by September 2009.

Financial Commitments of Ircon in this JVC

Total Commitment (USD million)

Equity 1.25 Shareholders Loans 16.75 Total 18.00

An amount of USD 1.25 million towards equity and USD 16.685 million towards shareholders loan has already been paid. All the aforesaid commitments and payments have been made after they were approved by the Board of Directors unanimously as required by section 372A of the Companies Act, 1956.

B. In India

Ircon, along with Soma Enterprise Limited (Soma), a construction company, had, as a consortium, secured a BOT project (Four laning of Pimpalgaon-Dhule section of NH-3) in Maharashtra for National Highways Authority of India (NHAI). A joint venture company (JVC) called "Ircon-Soma Tollway Private Limited" (ISTPL) is executing this project. The equity participation of both Ircon and Soma in this JVC is 50% each.

Execution of main work started as per schedule and is likely to be completed ahead of scheduled date of completion of 26th March 2009.

Financial Commitment of Ircon in this JVC

Ircon has committed an amount of Rs. 640 million (its 50% share in the equity of ISTPL) by way of equity and a corporate guarantee, if required, for an amount not exceeding Rs. 2000 million in ISTPL. So far Ircon has invested Rs. 608 million by way of equity in ISTPL but no corporate guarantee has been extended. However, Ircon has pledged its present shareholding and has committed pledging of future shareholding in ISTPL in connection with a term loan of Rs. 4500 million being taken by ISTPL from 8 banks, State Bank of India being the lead bank lender. All the commitments have been made after they were approved by the Board of Directors unanimously as required by section 372A of the Companies Act, 1956.

TECHNOLOGY ABSORPTION AND R&D

The Company has an "Engineering Control and Audit Cell" to constantly upgrade the technology and construction techniques. This looks into the aspects of appropriate designing and value engineering and is being tuned to be a repository of knowledge and its dissemination. This also reviews the design and drawings for various projects related to different types of structures and provides engineering solution including standardization of design data to help in marketing efforts and conceptualisations of new projects with technical back up in alignment design, geo-technical analysis etc.

Ircon is using latest technology and state of the art equipments in execution of infrastructure projects.

NEW CORPORATE OFFICE

The Company constructed a state of the art building for its corporate office at a cost of Rs. 440 million approx., on a plot of land measuring 3020 sq.m purchased in an auction held by Delhi Development Authority (DDA) on 7th August 2002 at a total cost of Rs. 313.6 million at C-4, District Centre, Saket, New Delhi. After all the essential clearances, the Company has occupied its own corporate office now which is its new registered office too from 21st May 2007.

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company. The Company has been continuously tuning its training programmes to meet the organisational needs - present and future - through a systematic training need analysis. A training matrix has been evolved with a classification under three broad heads, namely, (i) Mandatory (ii) Specialization and (iii) Value addition. This is expected to work as a scientific and effective tool for training need analysis in the Company. Comprehensive training data base covering all the employees and the training undergone by them has been prepared. Due to boom in infrastructure development, there is a serious threat of poaching and a number of officers are leaving. In spite of this, steps have been taken to recreate workforce by giving intensive training in IRICEN and other institutes, interaction and personal intervention. Steps have also been initiated to evaluate the effectiveness of training.

It also includes induction courses to the new entrants and development programmes for employees at different levels which are held in Ircons Training Centre at Gurgaon. 29 training courses and 26 seminars/workshops were conducted during 2007-08 which were attended by 663 employees covering the entire spectrum of Ircons field and activities.

The total manpower strength as on 31st March 2008 stands at 1978 which includes 192 deputationists, majority of whom are deployed on Railway projects. The total number of women employees is 89, out of which 29 are executives.

The Company has been encouraging sports amongst its employees. During 2007-08, Ircon Golf Team participated in the All India Railway Golf Tournament. Ircon Cricket team participated in DDCA (Delhi and District Cricket Association) league matches.

The 32nd Annual Day was celebrated on 28th April 2008 with traditional gaiety. On this occasion, excellent work done by Ircon in both national and international arena was appreciated, and Ministers awards were given to four officials for their outstanding contribution during 2007.

COMPLIANCES

Presidential Directive

No Presidential directive was received during the year.

Official language

Presidential orders issued on the report of the Committee of Parliament on official language and Constitutional provisions regarding Hindi are being complied within Ircon in letter and spirit. Progressive use of Hindi is encouraged through various incentive schemes. Hindi training under Hindi Teaching Scheme has also been completed. Hindi Typing/ Shorthand training, workshops, meetings etc. are being held regularly. Information technology aids are also being used to promote the use of Hindi. Contract documents, telephone directory, annual reports, etc. are bilingual. Bilingual computers are used in the Company and Ircons website also disseminates information about the Company in both English and Hindi.

Right to Information Act, 2005

The Right to Information Act, 2005, seeks to provide a right to information for citizens through a process of access to information under the control of public authorities. The purpose is to promote transparency and accountability in the working of every public authority.

The Company has, in the capacity of a Government Company and in deference to the spirit behind the law, appointed a Central Public Information Officer and an Assistant Public Information Officer as well as one State Level Public Information Officer in each of the four Regional offices of Ircon. Their names have been posted on the website of the Company. All the necessary information for public consumption has been put on the website of the Company.

Particulars of employees

No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakhs or more per month during the year.

Conservation of Energy and environmental concerns

Within the scope available for saving energy in construction contracts, every effort is being made for conserving energy and reducing its consumption.

Ircon has taken care to adopt environment friendly technology in its own Corporate Office building in Saket in the form of energy efficient air conditioning system, fluorescent lamps, sensors for operation of light fixtures and on water taps for conservation of electricity and water, stone fixed on external facade by dry cladding technique to ensure thermal insulation, provision of DG sets with close water cycle remote radiators which conserve water as cooling towers are not required.

The Company has an Environmental and Health Policy in place with effect from 10th April 2006. This Policy of the Company envisages establishment and maintenance of environmental system in all construction activities. It seeks to not only comply with the relevant environmental laws but also to follow best environmental management practices.

The Company has undertaken Environmental Impact Assessment (including impact on land, water, air, noise and ecological environment) in projects at Jammu & Kashmir.

Vigilance activities

The vigilance cell of Ircon is being headed by a full time Chief Vigilance Officer (CVO) on deputation from the Government. The present CVO who assumed duty on 2nd February 2006, has been granted a status equivalent to that of a whole-time director as outlined by the Department of Public Enterprises Office Memoranda and Chief Vigilance Commission circulars in this respect for discharging the functions of a CVO. The CVO oversees both preventive and punitive vigilance. Fresh initiatives were taken towards preventive vigilance in almost all sensitive areas including marketing, vigilance, finance, foreign postings, and contract and tender management. Preventive inspections including joint inspections with quality team, periodical review and close monitoring of cases were also done to reduce pendency of DAR cases and CTE paras. A vigilance compendium brought out earlier was disseminated for wider knowledge among project authorities, and vigilance workshops were organised. System improvement in projects was facilitated through tender watch of the website.

Quality Management

Quality Management System (QMS) has been successfully sustained and improved since 1996 when the Company as a whole was first certified for ISO-9001-9002 by TUV Suddeutschland Private Limited (TUV). Ircon has also been re-certified by TUV as per latest revised code ISO-9001-2000 in 2003-04, which has been revalidated for a further period of three years up to 28th September 2008, based on a repeat certification audit conducted in May 2005. TUV have conducted surveillance audit in the month of September/ October 2007 wherein no non-conformity was noticed and only few observations and hints for improvement were reported.

MOU parameters assigned for quality management department were achieved with excellent rating. Regular training programmes on Quality Management System, Safety, Health & Environment are conducted at Ircons Training Centre at Gurgaon, and at projects to improve awareness among the employees.

Quality objectives are measured at Corporate level as well as Project level. Corporate Quality Council (CQC) and Project Quality Council (PQC) meet every quarter at Corporate Office and projects to review the implementation of Quality Management System and quality objectives.

Quality Assurance Audits along with internal quality audits were conducted, and had good impact on the quality of work of the projects. Testing laboratories, quality plans, test records as well as awareness about quality have improved.

Information Technology and Development of ERP

A state of the art data centre has been built at the new Corporate Office in Saket.

Datacenter facilities have been augmented with two dedicated lease lines for better Data Communication between projects and Corporate Office.

During the year, SAP based Integrated Information System has been made functional for effective management of Finance & Control , Materials, Plant & Machinery, Human Capital and Projects. Rollout plans are underway to bring all the projects under the ambit of ERP System. E-Recruitment and E-Tendering system has been deployed to bring further effectiveness and transparency.

Ircon is pioneer in using Linux based thin-client solution for effective management of users data centrally, and in a secured manner. Ircon has achieved higher Return on Investment (ROI) by replacing Desktop Computing with Thin- Client solution.

Primavera based Project Management Information System is being used to monitor plans and progress of the J&K Project. High end specialized software like STADD, MX Rail, Auto Plotter, RM2006 are being used for the creation of world class engineering designs. Online Progress Reporting (OPR) System is being used to monitor monthly progress of projects. A Knowledge Management Portal is being used as a repository for sharing knowledge on Companys policies, circulars, drawings and photographs of projects, etc.

AWARDS

(a) Project Exports Promotion Council of India --Award

The Company received export award from Project Exports Promotion Council of India (PEPC) for its performance during 2006-07, for being second best in the category of maximum foreign exchange earned and repatriated to India from overseas construction and engineering projects.

The award was presented by Mr. Kamal Nath, Union Minister of Commerce and Industry, at a function held in Delhi on 11th December 2007.

(b) Engineering Export Promotion Council --Award

(i) The Company received "Silver Trophy for Top Exporters" in the category of "Trophy for Top Exporters as Medium Enterprises" from Engineering Export Promotion Council (EEPC) (Northern Region) in recognition of outstanding contribution to Engineering Exports during 2005-06.

The award was presented by Mr. Manoranjan Kalia, Minister of Industry and Commerce, Punjab, at a function held in Ludhiana on 14th June 2008.

(ii) The Company received the "All India Trophy for Top Exporter" in the category of "Trophy for Top Exporters Â Merchants" from Engineering Export Promotion Council (EEPC) in recognition of outstanding export performance during 2006-07.

This award was presented by Mr. Pranab Mukherjee, Union Minister of External Affairs, at a function held in Kolkata on 9th August 2008.

The Company has so far received 45 awards in the last 22 successive years since 1984-85 from PEPC [formerly known as Overseas Construction Council of India (OCCI)] and 22 awards from EEPC.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure except as otherwise stated in the annual accounts.

ii) that such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on 31st March 2008.

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, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2007 to March 2008, five meetings of the Board of Directors were held with two meetings in the quarter ended September 2007, one meeting each in the quarters ended June 2007, December 2007 and March 2008.

The following Directors ceased to hold office during 2007-08:-

1 Mr. J.P. Batra Part-time Chairman (official)

Ceased to be Director due to superannuation on 31.07.2007 (AN). Held office from 03.08.2006 (FN) to 31.07.2007 (AN).

2 Ms. Sabita Gopal Part-time (official) Director

Ceased to be Director consequent upon her elevation as General Manager, Integral Coach Factory, Indian Railways, Chennai. Held office from 06.01.2006 (FN) to 29.06.2007 (AN)

3 Ms. Sushma Pande Part-time (official) Director

Ceased to be Director due to voluntary retirement from Indian Railways on 01.02.2008 (FN).

Held office from 20.08.2007 (FN) to 01.02.2008 (FN).

The following Directors are holding offices as on date:-

1 Mr. K.C.Jena From 19.09.2007 (FN) onwards Part-time Chairman (official) 2 Mr. Ankush Krishan From 01.09.2006 (FN) onwards Managing Director 3 Mr. Mohan Tiwari From 08.08.2003 (AN) onwards Director Projects 4 Mr. Sudhir Mathur From 01.11.2005 (FN) onwards Director Finance 5 Mr. Madan Lal From 23.04.2007(FN) onwards Director Works 6 Mr. R. Subramanian From 29.06.2007 (FN) onwards Part-time Director (non-official) 7 Mr. N. Parthasarathy From 01.10.2007 (FN) onwards Part-time Director (non-official) 8 Mr. R.K. Goyal From 10.04.2008 (FN) onwards Part-time Director (official)

AUDITORS

The auditors of the Company appointed by the Government of India for 2007-08 are:-

Statutory Auditors

Gianender & Associates, New Delhi : For Company as a whole

Branch Auditors in India:

Gianender & Associates, New Delhi : Northern Region

Gianender & Associates, New Delhi : Jammu & Kashmir Region (including Punjab)

Prakash & Santosh, Kanpur : Kanpur Region (covering U.P. and M.P)

N. Chaudhuri & Co., Kolkata : Eastern Region

Shah Gupta & Co., Mumbai : Western Region

A.R. Viswanathan & Co., Bengaluru : Southern Region

Branch Auditors Abroad :

Azad Zamir & Co., Bangladesh : Bangladesh

N. Krishnaswamy & Co., Nepal : Nepal

HST & Co., Ethiopia : Ethiopia

SCA Consultores, Beira, Mozambique : Mozambique

S.N. Nanda & Co., Afghanistan : Afghanistan

ACKNOWLEDGEMENT

We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs and other ministries, Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks, Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio, and our esteemed clients both in India and abroad for their continued interest in and support to the Company. We place our appreciation on record for all our predecessors for their invaluable contribution to the growth of the Company.

We also take this opportunity to congratulate and whole-heartedly appreciate the employees of the Company at all levels on their continuing successful performance which has enabled the Company to grow from strength to strength and establish landmarks. It is the dedication, relentless efforts, sincerity of purpose, and unstinted support of the employees that have enhanced the productivity and prestige of the Company.

For and on behalf of the Board of Directors

New Delhi Sudhir Mathur Ankush Krishan Dated : 22.08.2008 Director Finance Managing Director

Mar 31, 2006

ANNUAL REPORT 2005-2006

DIRECTORS' REPORT

Distinguished Shareholders of IRCON,

The Directors of your Company have pleasure in presenting their 30th Report of the Company for the financial year 2005-06.

OVERALL PERFORMANCE HIGHLIGHTS

Upgraded as a Schedule "A" Company

2006 has been an eventful year. We are very glad to convey that your company has been upgraded by the Government of India as a Schedule `A' Company with effect from 15th May 2006. This has been possible only due to the consistent growth oriented performance shown by the Company over the years. The Company is all set to make a quantum jump in the current year 2006-07.

Record Order Book Position

As on date, the Company has a record order book position of more than Rs.50000 million for the first time. The Corporate Plan of the Company for 2006-11 envisages that based on market share scenario your Company should have a workload target of more than Rs. 86000 million in the beginning of 2010-11 with a turnover target of Rs. 24000 million for 2010-11.

PERFORMANCE DURING 2005-06

Progressing on the path of growth and excellence, your Company has achieved a turnover of Rs. 11128 million and a profit before tax of Rs.1109 million during the year as compared to a turnover of Rs. 10144 million and profit before tax of Rs. 1078 million during the previous year 2004-05. Most of the targets under the Memorandum of Understanding between IRCON and Ministry of Railways for 2005-06 have been exceeded which brings your Company under "Excellent" MOU Rating.

INTEGRAL REPORTS

A "Corporate Governance Report" and a "Management Discussion and Analysis Report" form an integral part of this Directors' Report as per the requirement of clause 49 of listing agreement and have been placed as its Annexures "A" & "B" respectively.

The Corporate Governance Report highlights the philosophy of Corporate Governance, discloses the Code of Conduct and Key Values of the Company (at Annexures A1 to A3), composition of Board of Directors and Audit Committee, their details, functions, attendance and remuneration of directors etc., and general information for shareholders. It is supplemented by two compliance certificates:

(i) Certificate signed by the Managing Director affirming compliance with the Code of Conduct by all Board members and Senior Management personnel during the year 2005-06 (placed at Annexure "A-4") as per clause 49 (I) (D) (ii) of the Listing Agreement; and

(ii) Certificate of compliance of Corporate Governance provisions of clause 49 signed by a practising company secretary (placed at Annexure "C") as per clause 49 (VII) of the Listing Agreement.

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, mission & objectives, outlook, operational performance, its resources & systems, strengths, opportunities, constraints, risks & concerns, strategies, prospects, etc.

FINANCIAL HIGHLIGHTS

Some important indicators of financial performance of the Company for the year 2005-06 vis-a-vis 2004-05 are given below which would also reveal an increase in the volume of domestic projects and their profitability.

A. Financial Performance Indicators.

Rupees in million

2005-06 2004-05 %age increase

1. Total income/Gross sales 11128 10144 10%

2. Operating income 10581 9725 9%*

3. Profit before tax 1109 1078 3%

4. Profit after tax 807 888 9% ** decrease

5. Gross margin 1309 1219 7%

6. Net worth 8293 7777 7%

* The 9% increase in the operating income has been primarily due to higher contribution from Indian projects.

** This is mainly because excess provision for tax made in earlier years was written back to the tune of Rs. 103.58 million in 2004-05 as compared to only Rs. 9.01 million written back during 2005-06.

B. Performance in Domestic Sector

The performance in the domestic sector has improved during 2005-06 vis-a-vis 2004-05 in terms of both operating income and profit before tax. The Operating Income from domestic projects has increased by 10% from Rs.8721 million in 2004-05 to Rs. 9599 million in 2005-06. The Profit Before Tax from domestic projects has increased by 52% from Rs. 648 million in 2004-05 to Rs. 987 million in 2005-06. The ratio of profit before tax to the operating income has recorded a significant improvement from 7.43% in 2004-05 to 10.28% in 2005-06.

Foreign Exchange Earnings

Performance in terms of volume of work and profitability has improved considerably on the domestic front; however income from works abroad has declined. The total foreign exchange earnings during 2005-06 was Rs. 1103 million in comparison to Rs. 1601 million in 2004-05. The decrease has been due to lower turnover from foreign projects. The foreign exchange outgo during 2005-06 has been Rs. 544 million resulting in a net foreign exchange earning of Rs. 559 million as against foreign exchange outgo of Rs. 873 million and net foreign exchange earnings of Rs. 728 million in 2004-05. Efforts are on to improve it in the current financial year.

Dividend

Expecting that the MOU turnover target of Rs. 10500 million will be exceeded and there will be adequate profits in 2005-06, the Company paid an interim dividend of Rs. 252.40 million @ 255% on the enhanced paid-up share capital of Rs. 98.98 million in February 2006 to the shareholders, with the approval of the Board of Directors. The Board of Directors has now recommended a dividend @ 5% on the paid-up share capital of Rs. 98.98 million for consideration by the shareholders. The total dividend for the year 2005-06 thus works out to Rs. 257.35 million, @ 260% on the paid-up share capital, which is nearly 32% of the post-tax profits of Rs. 807 million for the year 2005-06. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2005-06 will then stand at Rs. 1612.72 million approximately.

Appropriations/Reserves

1. Foreign Projects Reserve

Section 80HHB allowed specified percentage of profits earned from foreign projects which were not covered under Double Taxation Avoidance Agreements to be set aside and transferred to a separate Reserve account called Foreign Projects Reserve till 2003-04. No deduction is allowed in respect of "Foreign Projects Reserve" account under this section from 2004-05. This Reserve has to be utilized only for the purpose of business, other than distribution by way of dividends or profits, within a period of five years. The amount standing in this Reserve account is to be written back to Profit & Loss Account on the expiry of five years. Accordingly, an amount of Rs. 2 million has been re-appropriated to the Profit & Loss Account for the year ended 31st March 2006.

2. Housing Projects Reserve

Similarly, section 80HHBA allowed till 2003-04 specified percentage of profits earned from execution of housing project aided by World Bank to be set aside and transferred to a separate Reserve account called Housing Projects Reserve. No deduction is allowed in respect of "Housing Projects Reserve" account from 2004-05. This Reserve has to be utilized only for the purpose of business, other than distribution by way of dividends or profits, within a period of five years. The amount standing in this Reserve account is to be written back to Profit & Loss Account on the expiry of five years.

3. Foreign Exchange Fluctuation Reserve

Revised Accounting Standard-11 issued by the Institute of Chartered Accountants of India deals with the effect of changes in foreign exchange rates. As per this Standard exchange difference arising from translation of financial statements of non-integral foreign operation (through a JV company) should be accumulated in a Foreign Exchange Fluctuation Reserve. Accordingly, Foreign Exchange Fluctuation Reserve had been created during the year 2004-05 and Rs 3.07 million had been transferred to the said reserve in respect of a JV company called CCFB, incorporated in Mozambique for securing and executing Beira Rail concession project in Mozambique, in which IRCON has 25% equity participation. Addition during 2005-06 to this Reserve is to the tune of Rs. 2.61 million.

4. Additional Income Tax on Dividend

As per sub section (1) of section 115-O of the Income-tax Act, 1961, inserted by the Finance Act of 2003 w.e.f. 1.4.2003, any amount declared/distributed/paid by way of dividend shall be chargeable to additional income-tax at the rate of 14.025% including surcharge and cess. Hence, a tax provision of Rs. 0.69 million has been made on the proposed dividend. The tax paid on the interim dividend disbursed during the year amounts to Rs. 35.40 million.

5. General Reserve

An amount of Rs. 49.49 million has been transferred from General Reserve to Share Capital Account on account of issue of 4.949 million equity shares of Rs 10/- each to the shareholders as bonus shares in the ratio of 1:1 on 1st April 2005. After the aforementioned appropriations, an amount of Rs.515.18 million has been transferred to General Reserve from the profits of the Company. Consequently, Reserves and Surplus account stands increased from Rs. 7727.70 million in 2004-05 to Rs. 8194 million in the financial year 2005-06.

OPERATIONAL PERFORMANCE

A. Foreign Projects Completed:

Your Company completed during 2005-06 three road projects, two in Bangladesh and one in Indonesia, and three projects for providing services, namely, one project for providing engineering services in Brazil, one project for survey work and preparation of study report in Liberia and one service contract in UK and Ireland.

They are detailed below:-

Road Projects in Bangladesh

1. The work of rehabilitation of Dhaka - Sylhet Road project, from Auskandi junction to Sylhet rail over bridge, for Roads and Highway Department of Bangladesh, secured in joint venture with a local company in June 2001, at a value of BD TK 1639 million (Rs. 1436 million), was completed in June 2005. IRCON's portion of work was 50% valued at BD Taka 819 million (equivalent to Rs. 718 million).

2. A new two-lane road of 6 Km length for Sylhet bye-pass road secured in June 2003, at a value of BD Taka 300 million (Rs. 249 million), funded by Kuwait Fund, has been completed on 31St December 2005.

Road Project in Indonesia

3. Work of CIKAMPEK - PADALARANG Highway Development Package IV.4 (Toll road project), for the client, PT Jasa Marga Indonesia, secured in April 2004, was completed as scheduled in April 2005.

Service contracts completed:

4. IRCON was awarded a contract in December 2004 for rendering Engineering Services to a company called Ferrovia Centro Atlantica (FCA), a concessionaire for railway network in Brazil, at a value of Rs. 4.6 million. The work consisted of formulating a rolling plan for implementation on FCA line and to work out a comprehensive framework for rehabilitation and upgradation of FCA rail network over the next eight years taking into account their existing fleet and resources. The work was completed in February 2006.

5. IRCON was awarded in March 2006 a contract for survey work and preparation of study report by Mittal Steel, Liberia, for rehabilitation of railway line from Buchanan to Yekepa in Liberia at a value of Rs. 19.08 million. The work was completed in June 2006.

6. IRCON had entered into a contract in October 2001 with Balfour Beatty Rail Projects Limited (BBRPL), for provision of services of Planning Engineers for their prestigious West Coast Route Modernization Project in UK and Ireland. The work has been completed on 31st January 2006.

B. New/On-going Foreign projects:

Some new/on-going projects in various countries, namely, Bangladesh, Ethiopia, Malaysia, Mozambique, Nepal, Afghanistan, and U.K. are:-

Bangladesh

1. IRCON had secured in March 2005 a turnkey signaling project, valued at USD 7.04 million plus 29.53 million BD Taka (equivalent to Rs. 328 million), for design, supply, installation, testing, commissioning and maintenance of modern signaling and interlocking system at 12 stations on Akhaura - Sylhet section of East Zone of Bangladesh Railway. The project is expected to be completed by December 2006. This is the 23rd contract secured by the Company in Bangladesh in the last two decades.

Ethiopia

2. IRCON had secured a World Bank funded road project in August 2004, called Dera-Mechara Road Upgrading Contract-1 (DERA-MANGA) from Ethiopian Roads Authority, at a value of Rs. 1410 million. The work is in progress and scheduled time of completion is February 2008.

3. IRCON had signed a contract agreement on 5th March 2005 for construction of 9 high voltage (66/33 kv) electrical sub-stations at a cost of US $6.18 million (Rs. 265 million approx.) for Ethiopian Electric Power Corporation (EEPCO). The contract is funded by African Development Bank. The project is expected to be completed in October 2006.

Malaysia

4. IRCON continued to operate meter gauge diesel locomotives on Malaysian Railway System (KTMB) during 2005-06 as per the lease and maintenance contract, The cumulative income from leasing of locomotives since the inception of the project has been USD 82.65 million (Rs. 3674.10 million). KTMB has extended the lease-cum-maintenance contract up to 31st December 2006.

5. IRCON has been engaged as an associate of Malaysian local contractor namely Lion Pacific and IBSUL Holdings for track rehabilitation project in Malaysia, The project consists of rehabilitation of about 80 km track in three sections, namely, Taiping - Bukit Merah, Pedang Rengus - Sungai Siput, and Sungai Siput - Ipoh of Malaysian Railway (KTMB) at a total cost of approx. Rs. 612 million. The work is scheduled to be completed by May 2008.

Mozambique

6. IRCON is executing some railway rehabilitation and supply works worth USD 68 million under the Beira Rail Concession Project in Mozambique awarded by Mozambican Railways to Companhia Dos Caminhos De Ferro Da Beira (CCFB), a joint venture company in Mozambique, in which IRCON has 25% equity stake. The details of Joint Venture arrangement are given under the head "Joint Venture Companies" in this report.

Nepal

7. IRCON has been awarded in February 2005 a road project in Nepal at a value of Rs. 609 million. The work consists of pavement strengthening of about 130 Km length of East-West Highway from Belbari to Chauharawa. The work which commenced on 14th April 2005 is now scheduled to be completed by June 2007. So far IRCON has executed seven projects in Nepal in the areas of highway, transmission line, and buildings.

Afghanistan

8. IRCON was awarded a turnkey project for construction of 220 kv substation at Naibabad near Mazar-e-Sharif in Northern Afghanistan on 12th October 2005. This is the first project of IRCON in Afghanistan. The value of the project is USD 5.2 million (Rs. 235.2 million) and is funded by Asian Development Bank. Civil works on the project are in progress. The project is scheduled to be completed by February 2007.

United Kingdom

9. The work under an agreement signed with Balfour Beatty Rail Projects Limited (BBRPL) for provision of Permanent Way (P-Way) supervisors for undertaking P-Way rehabilitation works in U.K. is continuing. Further, efforts are being made to explore the market in U.K. for undertaking execution of P-Way contracts in future.

10. IRCON had entered into an agreement in 2000-01 with WS Atkins for providing them design support for re-signaling of railway system on West Coast main line of British Railways for a year. The operating teams for this project were based in Sharjah and U.K. The team based at U.K. has been demobilized in April 2005, whereas team based at Sharjah is continuing. Considering the good quality of work done by IRCON's personnel, the contract has been further extended up to November 2007. The total income including other income from the projects during 2005-06 is GBP 0.957 million approx. (equivalent to Rs. 76.28 million approx.).

C. Likely Foreign projects

1. A letter of intent (LOI) had been issued to IRCON on 21st June 2004 by the Government of Sudan for constructing new railway lines/ rehabilitation of existing track between Haiya to Port Sudan, on design, financing and build basis. IRCON has submitted a Detailed Technical Report in March 2005 to Government of Sudan. The value of the project is USD 252.52 million. The financing of the project is being arranged by IRCON through Government of India by way of line of credit (LOC) to the tune of USD 150 million and other sources for balance amount.

2. Efforts are on to secure contracts in Brazil, Malaysia, Venezuela, Saudi Arabia, Afghanistan, Syria, Dubai, Bangladesh, Sri Lanka, Kenya, Ethiopia, Liberia, Argentina and Iran.

D. Projects Completed in India

During the year the Company completed 9 projects in India out of which the major ones with a value of over Rs. 100 million each are:

(i) MC-1B project for underground metro corridor for Delhi Metro Rail Corporation. This was awarded to a consortium called "International Metro Civil Contractors" (IMCC), of five companies with participating interests, namely, (a) Dyckerhoff & Widmann Aktiengesellschaft (Dywidag) of Germany (as a lead party) 29%; (b) Larsen & Toubro Ltd. (L&T) 26%; (c) Samsung Corporation (Samsung) of Korea 26%; (d) Ircon International Ltd. (IRCON) 9.5%; and (e) Shimizu Corporation (Shimizu) of Japan (9.5%). The work has been substantially completed and opened for public use in June 2005, more than eight months ahead of schedule. The total value of the contract awarded to IMCC on 23rd February 2001 was around Rs. 16500 million. The revised value of the contract representing IRCON's participating interest of 9.5% is Rs. 1843 million.

(ii) Superstructure box girder between Dum Dum Cant and NSCBI Airport for Metro Railway Kolkata, at a value of Rs. 121.70 million.

(iii) Doubling of MGR track for TSTPP Stage-II Talchar Orissa, for NTPC Talcher, at a value of Rs. 402.89 million.

(iv) Mansi-Saharsa Railway Bridge Project, for East Central Railway, at a value of Rs. 325.0 million.

(v) Extension of 400 kv sub-station at Kishenpur and Wagoora in Jammu & Kashmir for Power Grid Corporation of India Limited, at a value of Rs.124.80 million.

(vi) OFC works in South Central Railway, South Western Railway and Eastern Railway for RailTel Corporation of India Limited, at a value of Rs. 129 million.

Projects completed in India after 31St March 2006:-

(i) Four laning of Allahabad-Khaga Road Project for National Highway Authority of India, at a value of Rs.1890.00 million.

(ii) Delhi Metro Rail Corporation - SYS2 Project (Electrification), valued at Rs. 1230.10 million. This project has been declared as the best project of the year by IRCON and a group incentive has been awarded to the project team.

E. Projects secured in India during 2005-06:

Important railway and highway projects secured in India during the year are:-

Highway Projects for National Highways Authority of India (NHAI)

(i) Rehabilitation and upgradation of NH-25 (Km. 170.00 to Km. 220.00) to 4-lane configuration on the East-West Corridor in Uttar Pradesh, at a value of Rs. 3029.70 million.

(ii) New Mangalore Port Road Connectivity Project - four laning and strengthening of NH-17, NH-48 and Managalore Bypass in Karnataka, at a value of Rs. 1682.18 million.

(iii) Widening and Strengthening of existing NH-31 from 2-lane to 4-lane (Km 526.00 to Km 507.00 of Siliguri-Islampur section and Islampur Bypass of 10.31 Km length in West Bengal) on the East-West Corridor under Phase II Programme of NHDP, at a value of Rs. 2110.73 million.

(iv) Construction of Road Over Bridges in Northern Region (Punjab and Jammu & Kashmir), at a value of Rs. 756 million.

Railway works:

(v) Gauge conversion including electrical works on Rewari-Ajmer section of North Western Railway for Rail Vikas Nigam Limited, at a value of Rs.1577.08 million.

PGCIL work:

(vi) Supply, erection, testing, and commissioning of 400/220 KV Ludhiana sub-station (new) and extension of 400 KV Jalandhar and Malerkotla substation associated with Northern Region Strengthening Scheme-III for Power Grid Corporation of India Limited (PGCIL), at a value of Rs. 566.70 million.

F. On-going major projects in India:

Railway works:

(i) Qazigund-Srinagar-Baramulla and Laole-Qazigund New BG Rail Link Project in J&K, valued at Rs. 33510 million in all including the variation orders.

(ii) Civil Engineering works up to formation level (including bridges) for Cuttak-Barang (Doubling), and Rajatgarh - Barang (Doubling) for Rail Vikas Nigam Limited, valued at Rs. 670 million in all.

(iii) Construction of cable stayed road over bridge at Chiraiya Tand, Patna, at a value of Rs. 137.6 million.

(iv) Setting up of new zonal headquarter office at Hubli for South Western Railway, at a value of Rs. 180.7 million.

(v) Construction of Road Over Bridges in the state of Bihar for East Central/ Eastern Railway, at a value of Rs. 1507.10 million.

Road/Highway projects:

(vi) Two UP State Road Projects --Upgradation of Bhognipur-Choudgra Road (UPSRP-04), at a value of Rs. 933.6 million and Upgradation of Katra- Bilhaur Road (UPSRP-01), at a value of Rs. 2335 million.

(vii) Strengthening of State Highway-5 from Godhra to Shamalaji (GSHP-7), at a value of Rs. 1528 million.

(viii) Implementation of Pradhan Mantri Gram Sadak Yojana (PMGSY) for taking up execution of rural roads. An agreement was signed on 31St August 2004 with Ministry of Rural Development, Govt. of India, Bihar, under the Pradhan Mantri Gram Sadak Yojana (PMGSY) for taking up execution of rural roads. The value of the project presently undertaken is Rs. 1837.38 million.

(ix) Upgradation of Roads from Nagapattinam to Kattumavadi and New bypass at Nagapattinam, Tituthuraipundi and Muttupet (in JV with SMJ, Indonesia) in Tamil Nadu for Highways Department, Tamil Nadu. IRCON's share is valued at Rs. 1192.64 million.

(x) Four laving of Pimpalgaon-Dhule section of NH-3 -- BOT Project in Maharashtra for National Highways Authority of India (NHAI) awarded to IRCON by "Ircon-Soma Tollway Private Limited" (ISTPL), a JV Company between IRCON and Soma Enterprise Limited (Soma), at a value of Rs. 2040 million. Details of this JV are given under the head "Joint Venture Companies".

(xi) Development of State Highways in districts of Darbhanga, Madhubani, Vaishali, Muzaffarpur and Samastipur under Rashtriya Sam Vikas Yojana (RSVY) in Bihar for Road Construction Department, Govt. of Bihar and Ministry of Shipping, Road Transport and Highway, Govt. of India, at a value of Rs. 1268.43 million. Presently, IRCON has been awarded an initial work for preparation of Detailed Technical Report at a value of Rs. 11.60 million.

Building Projects:

(xii) Three Married Accommodation Projects (MAP) in Allahabad, Bhopal, and Jhansi, at a value of Rs. 3467 million, Construction of additional works (buildings of area 3800 sqm.) for College of Veterinary Science and Animal Husbandry at Selesih, Aizwal, Mizoram, at a value of Rs. 288.8 million.

Metro Rail works:

(xiv) Supply, Installation, Testing & Commissioning of Track work Line - 3 corridor of 50 Kms (Barakhamba road - Connaught Place - Dwarka), Najafgarh Depot & workshop contract - 3T -01, awarded by Delhi Metro Rail Corporation in June 2004 at a value of Rs. 844.5 million. The total value of this project, including the variation order worth Rs. 187.2 million secured in April 2005 extending the contract line to Dwarka sub-city involving the laying of 18 kms track including a track of 1.9 kms inside the tunnel, would now be Rs. 1031.7 million.

(xv) Construction of super structure with pre-stressed concrete box girders over the already completed sub-structures from Tollygunge to Garia for Metro Railway Kolkata, at a value of Rs.175.64 million.

PGCIL works

(xvi) Distribution Management System for Panjim town at Goa for Power Grid Corporation of India Limited (PGCIL), at a value of Rs. 292.8 million.

(xvii) Construction of 400/220 kv sub-station at Gwalior for Power Grid Corporation of India Limited (PGCIL), at a value of Rs. 387 million.

G. Important works secured in India after 31St March 2006:

1. RVNL work

Construction of roadbed, bridges, facilities, installation of track and electrification in connection with provision of 3rd line of Aligargh- Ghaziabad section (106 Kms.) (in JV with Gannon Dunkerley & Co. Ltd.) in Uttar Pradesh. IRCON's share is valued at Rs. 1244.60 million.

2. NHAI Project

Six-laning of National Highway (NH-1) in the State of Haryana (Km. 66.000 to Km. 86.000 of Panchi Gujran to Panipat section), at a value of Rs.1216.40 million.

Joint Venture Companies:

A. In Mozambique

IRCON (along with RITES) is working in Mozambique for implementation of a rail concession project there. The Concession is being implemented by an SPV called Companhia Dos Camninhos De Ferro Da Beira (CCFB), a joint venture company, in which IRCON has 25% equity stake, RITES has 26%, and CFM, a railway undertaking of Mozambique, has 49%. The scope of Concession includes rehabilitation of two rail lines and operation and maintenance thereof for a period of 25 years.

IRCON and RITES have formed a consortium called RICON to secure and execute the works awarded by CCFB.

The work of providing Project Management Services to CCFB has been obtained by RICON. Two works awarded to RICON by CCFB for execution by IRCON are (i) Study, design and rehabilitation of Dona Ana Bridge, and (ii) Rehabilitation of 670 kms of rail track on Sena Line. The cost of these two works is approx. USD 42 million.

A consortium has also been formed by RICON with a local Mozambican construction company, CETA, to (i) Manufacture PSC (Pre-stressed Concrete) sleepers; and (ii) Produce ballast for the track, the cost of these two works being USD 26 million.

Financial Commitments of IRCON in this JVC

Total Commitments

USD (million) Equivalent Rupees (million)

Equity 1.250 57.38 Shareholders' Loans 16.685 747.66 Total 17.935 805.04

An amount of USD 1.250 million (Rs. 57.38 million) towards equity and USD 4.685 Ation (Rs. 206.36 million) towards shareholders' loan has already been paid. All the aforesaid commitments and payments have been made after they were approved by the Board of Directors unanimously as required by section 372A of the Companies Act, 1956.

B. In India

IRCON, along with Soma Enterprise Limited (Soma), a construction company, had, as a consortium, secured a BOT project (Four laning of Pimpalgaon- Dhule section of NH-3) in Maharashtra for National Highways Authority of India (NHAI). As per bid condition, a joint venture company (JVC) called "Ircon-Soma Tollway Private Limited" (ISTPL) was incorporated on 19th April 2005 to execute this project. The equity participation of both IRCON and Soma in this JVC is 50% each.

The Concession Agreement for this project between NHAI (client) and ISTPL was signed on 28th September 2005. The appointed date from which the concession period will commence is 26th March 2006 which is 180 days from the date of signing of Concession Agreement. The construction period is three years from the appointed date -- 27th March 2006 to 26th March 2009. Execution of main work has started from 27th March 2006 as per schedule.

Financial Commitment of IRCON in this JVC

IRCON has committed an amount of Rs. 380 million by way of equity and a corporate guarantee, if required, for an amount not exceeding Rs. 2000 million in ISTPL. So far IRCON has invested Rs. 253.50 million by way of equity in ISTPL but no corporate guarantee has been extended. However, IRCON has pledged its shareholding of 38 million equity shares in ISTPL in connection with a term loan of Rs. 4500 million being taken by ISTPL from 8 banks, State Bank of India being the lead bank lender. All the commitments have been made after they were approved by the Board of Directors unanimously as required by section 372A of the Companies Act, 1956.

It is likely that the present authorized share capital of Rs. 800 million of ISTPL will be increased to Rs. 1300 million in the near future and ISTPL may call upon IRCON to subscribe for further shares making its equity contribution as Rs. 650 million representing IRCON's share of 50% in the equity of ISTPL.

TECHNOLOGY ABSORPTION AND R & D

A design control audit cell has been created in the Company to constantly upgrade the technology and construction techniques. This will not only look into the aspects of appropriate designing and value engineering but also be a repository of knowledge and its dissemination.

One of the technologies applied in Garia-Metro Project, Kolkata, was mechanised auto launching of 200 MT PSC box girder, which led to savings in terms of cost and time,

CORPORATE PLAN

The Corporate Plan of the Company for 2006-2011, evolved in-house, during the year, projects the Objectives of the Company in line with IRCON's Mission, Key values, and Code of Corporate Governance. It also reflects the present status and profile of the Company, its core competence areas, as well as the capability opportunity matrix, based on a SCOT (Strengths, Constraints, Opportunities, & Threats) Analysis. The Plan lays down the corporate plan projections based on natural progression as well as market scenario, overall strategies, as well as sector-wise business strategies and identifies the thrust areas. It also envisages a Corporate Planning Cell for preparation of an Implementation Plan, including its monitoring, annual review, and mid term corrections.

NEW CORPORATE OFFICE

The Company is expected to have its own abode in Delhi during 2006-07. The Company had purchased a plot of land measuring 3020 sq.m in an auction held by Delhi Development Authority (DDA) on 7th August 2002 at a total cost of Rs. 313.6 million at C-4, District Center, Saket, New Delhi. The Company is constructing a state of the art building on this plot for its corporate office. The estimated capital expenditure approved by Board of Directors for constructing the proposed office is Rs. 442.6 million. The construction is likely to be completed and ready for occupation by 31St December 2006. As on 31st March 2006, the value of contract awarded but remaining to be executed is Rs. 201.76 million.

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company. The Company has been continuously tuning its training programmes to meet the organisational needs - present and future - through a systematic training need analysis. A training calendar is then designed under three broad heads, namely, (i) Technical/Functional areas (ii) IT (iii) Conceptual and Managerial skills. It also includes induction courses to the new entrants and development programmes for employees at different levels which are held in IRCON's Training Centre at Gurgaon. 57 courses were conducted during 2005-06 covering entire spectrum of IRCON's field and activities.

The total manpower strength as on 31St March 2006 stands at 1723 which includes 166 deputationists, majority of whom are deployed on projects abroad, and 72 women out of which 17 are executives.

The Company has been actively encouraging sports amongst its employees. During 2005-06, IRCON Golf Team participated in the All India Railway Golf Tournament at Kapurthala (Punjab). Inter-departmental and inter-project sports tournaments were organized in October 2005. IRCON Cricket team played thirteen DDCA (Delhi and District Cricket Association) league matches. The Company organized a trekking expedition from Ghangeriya to Govindghat encompassing visits to, Badrinath, Valley of Flowers, and Hemkunt Saheb in July 2006 and the team consisted of twenty enthusiastic men and women of IRCON.

The 30th Annual Day was celebrated on 28th April 2006 with traditional gaiety. The Chairman, Railway Board, Mr. J.P.Batra, was the chief guest. The function was also graced by other dignitaries from the Ministry of Railways, public sector undertakings, embassies, clients, etc. On this occasion, excellent work done by IRCON in both national and international arena was appreciated, and Minister's award was given to an official for his outstanding contribution during 2005.

COMPLIANCES

Presidential Directive

No Presidential directive was received during the year.

Official language

Presidential orders issued on the report of the Committee of Parliament on official language and Constitutional provisions regarding Hindi are being complied with in IRCON in letter and spirit. Progressive use of Hindi is encouraged through various incentive schemes. Hindi training under Hindi Teaching Scheme has also been completed. Hindi Typing/Shorthand training, workshops, meetings etc., are being held regularly. Information technology aids are also being used to promote the use of Hindi. Bilingual computers are in use in the Company and IRCON's website also disseminates information about the Company in both English and Hindi.

Right to Information Act, 2005

The Right to Information Act, 2005 came into force with effect from 21st June 2006. The Act seeks to provide a right to information for citizens through a process of access to information under the control of public authorities. The purpose is to promote transparency and accountability in the working of every public authority.

The Company has, in the capacity of a Government Company and in deference to the spirit behind the law, appointed a Central Public Information Officer and an Assistant Public Information Officer as well as one State Level Public Information Officer in each of the four Regional offices of IRCON. Their names have been posted on the website of the Company. All the necessary information for public consumption has been put on the website of the Company.

Particulars of employees

No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakhs or more per month during the year.

Compliances under MCA 21

Pursuant to the Government's vision of National e-governance in the Country and better governance norms to meet the expectations arising from globalization, the Ministry of Company Affairs launched in 2006 an e- governance initiative, called MCA 21, under which all statutory documents to be filed with the various offices of the Ministry of Company Affairs including the office of the Registrar of Companies (ROC) have to be online in prescribed formats. MCA 21 aims at moving from a paper based atmosphere to a near paperless environment in the Ministry of Company Affairs & its offices. The MCA 21 project was launched in Delhi by the Prime Minister of India on 18th March 2006. It had been first launched on 18th February 2006 in Coimbatore by commencing the process of efiling of company documents with the Office of the Registrar of Companies (ROC), Coimbatore.

As per the guidelines issued by the Ministry of Company Affairs under this initiative, the Company has been allotted a Corporate Identity Number (CIN) - L 45203DL 1976 PLC 008171. Every document to be filed with the ROC must bear the Corporate Identity Number.

Under MCA 21 every director of a company is required to obtain an Unique Identification Number called Director Identification Number (DIN) by filing an application online. This Unique Identification Number is individual to a director and will remain with the individual only irrespective of any change in his/her directorship in any company or ceasing to be a director. All the Directors of the Company have applied for and have been allotted this Unique Identification Number (DIN) as required.

Further, under MCA 21 all signatories of a company including Managing Director, other Directors and Company Secretary who are authorized to sign the various forms to be filed with the Registrar of Companies (ROC), Regional Director or Ministry of Company Affairs, are required to obtain their Digital Signature Certificates (DSC). The Company has applied for the Digital Signature Certificates for its whole-time directors and Company Secretary.

Conservation of energy

Within the limited scope available for saving energy in construction contracts, every effort is being made for conserving energy and reducing its consumption.

Environmental concerns

The Company has evolved and adopted an 'Environmental and Health Policy' with effect from 10th April 2006. This Policy of the Company envisages establishment and maintenance of environmental system in all construction activities. It seeks to not only comply with the relevant environmental laws but also to follow best environmental management practices.

The Company has undertaken Environmental Impact Assessment (including impact on land, water, air, noise and ecological environment) in projects at Jammu & Kashmir.

Vigilance activities

The vigilance cell of IRCON is being headed by a full time Chief Vigilance Officer (CVO) on deputation since 2000. The CVO oversees both preventive and punitive vigilance. Initiatives taken in 2003-04 towards preventive vigilance in five sensitive areas, namely, marketing, vigilance, finance, foreign postings, and contract and tender management were pursued and monitored during 2005-06. Preventive inspections including joint inspections with quality team, periodical review and monitoring of cases were also done to reduce pendency of DAR cases. A vigilance compendium was brought out, immovable property return system was computerised, and vigilance workshops were organised. System improvement in projects was facilitated through tender watch of the website.

The tenure of the previous CVO ended on 3rd June 2005 and pending appointment of a new CVO, the functions were being tentatively discharged by General Manager (HRM) of the Company till January 2006. A new full-time CVO who is on deputation from Ministry of Petroleum and Natural Gas has assumed duty on 2nd February 2006. He has been granted the status equivalent to that of a whole-time director as outlined by the Department of Public Enterprises Office Memoranda and Chief Vigilance Commission circulars in this respect for discharging the functions of a CVO.

Quality Management

Quality Management System (QMS) has been successfully sustained and improved for the last more than ten years since the Company was first certified for ISO - 9002 by TUV Suddeutschland Private Limited (TUV) in February 1996. IRCON has also been certified by TUV as per latest revised code ISO-9001-2000 in 2003-04, which has been revalidated for a further period of three years up to 28th September 2008, based on a repeat certification audit conducted in May 2005.

A Policy and a Manual on "Safety, Health & Environment" has been formulated and issued to the projects and departments. A Manual on "Testing Procedure of Quality Control of Roads" has also been issued to the projects and functional departments for guidance. Training sessions were conducted on Quality Management System, Safety, Health & Environment System for project personnel and also for Internal Quality Auditors. Awareness programmes on Total Quality Management focussing on customer satisfaction and continual improvement were arranged in projects, regional offices, and corporate office. Quality manuals, procedures and processes were reviewed and modified/upgraded. Quality wings have been formed at projects with a value of Rs. 500 million and above where Quality Assurance checks were also conducted.

System Development through IT

The Company had taken initiatives during 2002-03 for undertaking a comprehensive computerization of all aspects of working of the Company and its project locations to achieve an Integrated Information System (IIS) with the help of Tata Consultancy Services (TCS), Management Consultants. Based on the report of TCS recommending a state of the art ERP (Enterprise Resource Planning) based system in corporate applications to improve and re-engineer the business processes, a multi functional core team had been constituted, mobilised, and imparted orientation training. After other ground work and choosing IBM as an integration partner in 2004-05, the Company took steps for implementing the ERP (SAP Version ECC 5.0) based Integrated Information System in 2005-06 by planning the following three stages:

(a) Implementation in two projects in pilot stage. (b) Implementation in the Corporate Office and four regional offices (c) Roll out of the System in other important project offices

The System has been implemented in two pilot offices namely UPSRP-04 and UPSRP-01 as per the MOU target for the year 2005-06 for excellent rating. The project is likely to go live in the Corporate Office and Regional Offices during 2006-07 so as to complete the first two stages after which the system would be rolled out to the important project offices as per the priority of the Company.

On successful implementation, the project would entail standardization of the business processes and systems with state of the art technology and would result into operation efficiency besides bringing best practices in different areas of business. The ERP project implementation would equip the organization to leap frog into the next generation capabilities for managing more complex and large projects.

This apart, the Company has already separately implemented a Primavera based Project Management Information System during 2004-05, for monitoring, planning, and scheduling of J & K Projects.

AWARDS

(a) Project Exports Promotion Council of India --Award

The Company received export award from Project Exports Promotion Council of India (PEPC) for its performance during 2004-05, as the second highest in the category of maximum foreign exchange earned and repatriated to India from overseas construction contracts.

The award was presented by Mr. E.V.K.S. Elangovan, Minister of State for Commerce and Industry, at a function held in Delhi on 12th December 2005.

(b) Engineering Export Promotion Council -- Awards

(i) The Company received the "All India Trophy for Top Exporter" in the category of "Trophy for Top Exporters -- Merchants" from Engineering Export Promotion Council (EEPC) in recognition of outstanding export performance during 2003-04.

This award was presented by Mr. Kamal Nath, Union Minister of Commerce and Industry, at a function held in Mumbai on 13th January 2006.

(ii) The Company received "All India Shield for Star Performer as Large Enterprise" in the product group of Project Exports/ Consultancy Services from Engineering Export Promotion Council (EEPC) in recognition of outstanding contribution to engineering exports during 2004-05.

This award was presented by Mr. Kamal Nath, Union Minister of Commerce and Industry, at a function held in Chennai on 10th August 2006.

The Company has so far received 43 awards in the last 20 successive years since 1984-85 from PEPC [formerly known as Overseas Construction Council of India (OCCI)] and 20 awards from EEPC.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure except as otherwise stated in the annual accounts.

ii) that such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on 31St March 2006.

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, 1956, as stated in the annual accounts, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2005 to March 2006, seven meetings of the Board of Directors were held with one meeting in the quarter ended June 2005, two meetings each in the quarters ended September 2005, December 2005 and March 2006.

The following Directors ceased to hold office during 2005-06:-

Mr. K.B.Verma Ceased to be Director due to Director Finance superannuation on 31.5.2005 (AN). Held office from 14.7.2000 (AN) to 31.5.2005 (AN).

Mr. R.K. Singh Ceased to be Director due to Part-time Chairman (official) superannuation on 31.7.2005 (AN). Held office from 4.9.2003 (FN) to 31.7.2005 (AN).

Mr. Harbhajan Singh Ceased to be Director due to Part time Director (non - official) completion of tenure on 6.9.2005 (AN). Held office from 7.9.2002 (FN) to 6.9.2005 (AN).

Mr. Sudhir Mathur Ceased to be part-time (official) Part-time Director (official) Director due to resignation from Railways w.e.f. 31.10.2005 (AN) consequent upon his appointment as Director Finance in IRCON. Held office as part-time Director from 2.11.1999 FN to 31.10.2005 (AN).

Mr. J.P.Batra Ceased to be Director on 5.12.2005 Part-time Chairman (official) (FN) due to change in the incumbent. Held office from 18.8.2005 (FN) to 5.12.2005 FN.

The following Directors ceased to hold office after close of the financial year 2005-06:-

Mr. R.S.Varshneya Ceased to be Director due to Part time Chairman (official) superannuation on 31.7.2006 (AN). Held office from 5.12.2005 (FN) to 31.7.2006 (AN).

The following Directors are holding offices as on date:-

Mr. J.P. Batra Re-appointed from 3.8.2006 Part time Chairman (official) (FN) onwards

Mr. B.S. Kapur From 1.2.2(702 (FN) onwards Managing Director

Mr. Ankush Krishan From 25.6.2002 (AN) onwards Director Works

Mr. Mohan Tiwari From 8.8.2003 (AN) onwards Director Projects

Mr. Sudhir Mathur From 1.11.2005 (FN) onwards Director Finance

Ms. Sabita Gopal From 6.1.2006 (FN) onwards Part-time Director official

AUDITORS

The auditors of the Company appointed by the Government of India for 2005-06 are:-

Gupta & Gupta, New Delhi ] Statutory Auditors

Branch Auditors in India:

Shah Gupta & Co., Mumbai ] Western Region R.K. Kumar & Co., Chennai ] Southern Region N Chaudhuri & Co, Kolkata ] Eastern Region Gianender & Associates, New Delhi ] Northern Region

Branch Auditors Abroad:

Toha Khan Zaman & Co., ] Bangladesh Bangladesh ] N.Krishnaswamy & Co., Nepal ] Nepal HST, Ethiopia ] Ethiopia SCA Consultores, Beira, Mozambique ] Mozambique

Interest in and support to the Company. We place our appreciation on record for all our predecessors for their invaluable contribution to the growth of the Company.

We take this opportunity to record our sincere appreciation for the untiring efforts put in by the employees of the Company at all levels due to which IRCON has occupied a place of pride in the construction arena and has earned the status of Schedule "A" public sector company. We earnestly call upon the members of IRCON fraternity to continue to lead the Company to greater heights and set more landmarks to cherish.

For and on behalf of the Board of Directors

Sd/- Sd/- (Sudhir Mathur) (B.S. Kapur) Director Finance Managing Director

New Delhi Dated: 29.8.2006

Annexure - "B"

Mar 31, 2004

It is a great privilege and pleasure for the Directors to present this 28th report of the Company for the financial year 2003-04. This Report also includes a report each on Corporate Governance and Management Discussion and Analysis as Annexures "A" and "B" respectively. The Corporate Governance Report highlights the Company's philosophy on Corporate Governance, composition of Board of Directors and Audit Committee and disclosures relating to their functions and general information for shareholders. It is supplemented by a certificate of compliance from auditors as per clause 49 of listing agreement, at Annexure "C". The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, strengths and strategies, prospects, etc. This Directors' Report also has an Addendum comprising Management replies to comments made by the auditors in their report. FINANCIAL PERFORMANCE The performance of the Company in the last three years is given below:- Rs. in Million

2001-02 2002-03 2003-04 Income/Turnover 9235 8094 7922 Profit before tax 1272 1158 787 Dividend 173 188 188 Net worth 6062 6720 7123 Number of employees 1797 1553 1809 The operating income for 2003-04 is Rs. 7480 million as against Rs. 7850 million in the previous year. The decrease is primarily due to completion of major projects abroad before the commencement of financial year 2003-04 and corresponding low order book position in the earlier years 2000-01 and 2001-02 Further, some of the projects awarded in the domestic sector could not be commenced due to problems on the part of client. The decline in operating income has been offset to some extent by astute fund management resulting in an increase in other income from Rs. 244 million in 2002-03 to Rs. 443 million in 2003-04. During the year, Indian projects accounted for 78% of the total turnover of the Company which is an increase by 30% compared to last year. Because of lesser revenue in 2003-04 from foreign projects where the margins are higher as compared to the domestic projects, the profit before tax has declined to 10.53% of the operating turnover as compared to 14.75% last year although profits from domestic sector have increased from 2.79% to 5.41%. Some of the financial ratios which have shown an improvement in the last one year are: (a) Increase in the ratio of other income to operating income from 3.29% in 2002-03 to 6.32% during 2003-04. (b) Decrease in the ratio of sundry debtors to operating income from 31.31 lacs in the previous year to 20.47% in 2003-04. (c) Decrease in the ratio of inventories to operating income from 8.98% in 2002-03 to 8.41% in 2003-04 Foreign exchange earnings The total direct foreign exchange earnings and outgo during the year were Rs. 2242 million and Rs. 1105 million respectively resulting in net foreign exchange earnings of Rs. 1137 million as compared to net foreign exchange earnings of Rs. 1899 million in the previous year. The fall is on account of reduction in foreign works. Dividend Though there has been a marginal decline in the turnover of 2003-04, and the profit before tax is Rs. 787 million, as against Rs. 1158 million in 2002-03, the Board of Directors felt that this is a temporary phase and will be made up in 2004-05, and has recommended the same percentage of dividend as last year @ 380% of the paid-up share capital for your consideration. For this purpose a provision of Rs. 188.06 million has been made in the Accounts of the Company. If approved, the cumulative dividend paid up to 2003-04 will stand at Rs. 1152.46 million approximately. Reserves To obtain tax benefits under the Income-tax Act, 1961, in respect of profits from projects outside India not covered under double taxation avoidance agreements, it is proposed to transfer Rs 250 00 million from Profit and Loss Account to Foreign Projects Reserve and write back Rs. 280.00 million reducing the balance under Foreign Projects Reserve for Rs. 505.75 million In tile previous year to Rs. 575.75 million in the current year. Similarly, to obtain tax benefits under section 80 HHBA of the Income-tax Act on the domestic profits and gains derived from the World Bank aided projects of the Company, which is available from assessment year 2002-03, an amount of Rs 1.50 million is proposed to be transferred from Profit and Loss account to the Housing Projects Reserve Account created in 2001-02 increasing its balance from Rs. 22 million in the previous year to Rs. 23.50 million in the current year. As per sub section (1) of section 115-O of the Income-tax Act, 1961, inserted by the Finance Act of 2003 w.e.f. 1.4.2003, any amount declared/distributed/paid by way of dividend shall be chargeable to additional income-tax at the rate of 12.5% plus surcharge. Hence, a provision of Rs. 24.58 million has been made for payment of corporate tax on dividend. After payment of dividend, and corporate tax on dividend; and transfers to Foreign Projects Reserve and Housing Projects Reserve, an amount of Rs. 431.91 million is proposed to be transferred to genera! reserves from the profits of the Company, thereby increasing the Reserves and Surplus from Rs. 6670.42 million in the previous year to Rs. 7073.83 million in the current year. With this the Net worth of the Company will stand at Rs. 7123.32 million as against Rs. 6719.91 million last year. OPERATIONAL PERFORMANCE

A. Projects abroad a. Completed Projects: In Bangladesh a railway civil work and an electrical sub-station work were completed during 2003-04 and a road improvement work was completed in April 2004 as detailed below. i. Bangabandhu (Jamuna) Bridge Railway Link Project in Bangladesh, secured in October 1999 at a value of BD Taka 2730 million (Rs. 2417.4 million) for complete rehabilitation and conversion of 245 route Km. B.G. railway line to dual gauge, including supply of all materials except rails, was completed in October 2003 and handed over in December 2003. The defect liability period will be over in December 2004. 2. The USD 2.418 million plus BD Taka 24.298 million work for supply and installation of six 33/11 KV sub-stations for Greater Dhaka Power Distribution Project Phase-IV, which is the first electrical project in Bangladesh, secured in June 2001, has been completed in November 2003. The revised value of the contract is equivalent to Rs. 156.40 million approx. The defect liability period (DLP) of this project is already over for 4 sub-stations and for the balance two, the DLP will be over in November 2004. 3. Improvement of 11 road intersections in the city of Dhaka under Dhaka Urban Transport Project (DUTPI secured in August 2002 valued at BD TK 210.50 million (Rs. 176 million), has been completed in April 2004 and the defect liability period is in progress. b. On-going projects: The Company has in all seven on-going projects in Malaysia, Bangladesh and U.K. which comprise leasing of meter gauge diesel locomotives to Malaysia; two road rehabilitation/improvement projects in Bangladesh, and supply of manpower services to U.K. for rehabilitation of P-Way and electrification works and design support for re-signalizing of railway system These are :- I. Malaysia 1. IRCON continued to operate 30 meter gauge diesel locomotives on Malaysian Railway System (KTMB) up to 31st December 2003 and 20 locomotives thereafter as per the lease and maintenance contract. But with effect from 11st February 2004 it was increased to 23 locomotives till the end of 2003-04. The turnover during 2003-04 was USD 6.985 million. The cumulative turnover from leasing of motives since the inception of the project has been Rs. 3544.20 million. KTMB has extended the lease-cum-maintenance contract for 20 locomotives up to 25th May 2005, which is expected to yield a turnover of approximately USD 4.5 million (Rs. 212 million) during the financial year 2004-05. II. Bangladesh 2. The work of rehabilitation of Dhaka-Sylhet Road, from Auskandi junction to Sylhet rail over bridge for Roads and Highways Department of Bangladesh, valued at BD Taka 1639 million (equivalent to Rs. 1436 million) secured in joint venture with a local company in June 2001, is in progress. IRCON's potion of work is 50 % valued at BD Taka 819 million (equivalent to Rs. 718 million). The project is likely to be completed by December 2004. 3. IRCON secured a contract from Road and Highways Department of Bangladesh in June 2003, worth BD Taka 300 million (Rs. 249 million) funded by Kuwait, by way of a variation order to the Sylhet-Tambii-Jafiong Road Improvement (STJRI) project [secured in August 1999 and completed in March 2002 valued at BD Taka 407 million (Rs. 346.92 million approx.)]. This work includes a Bye-pass road to Sylhet city in continuation of the earlier STJRI Project. The work is to be competed in 24 months and is in full swing now. III. United Kingdom 4. The work under an agreement signed with Balfour Beatty Rail Projects Limited (BBRPL) for provision of Permanent Way (P-Way) supervisors for undertaking P-Way rehabilitation works in U.K is continuing. IRCON's six P-way engineers and one P-Way-coordinator had worked with BBRPL during the year 2003-04. The turnover including other income in foreign currency earned from supply of manpower for this project during 2003-004 is GBP 0.11 million approx. (equivalent to Rs 8.07 million) after adjustment of other income and foreign exchange gain/loss. Further, efforts are being made to explore the market in UK for independently undertaking execution of P-Way contracts in future. 5. IRCON had entered into a Contract in 2000-01 with Balfour Beatty Rail Projects Limited (BBRPL), UK for providing services of technical operatives for their project involving rehabilitation of electrification works at Leeds Railway station in U.K. which was completed in October 2001 Based on the performance on this project, BBRPL has engaged iRCON s technicians/ supervisors/engineers for their railway electrification projects in U. K. under three different contracts for provision of project services. The turnover from these electrical projects during 2003-04 is GBP 0.61 million approx. (equivalent to Rs. 52.06 million) after adjustment of other income and foreign exchange gain/loss. 6. IRCON has entered into a contract with BBRPL, Germany, for providing technical operatives for their electrification project in Ireland in December 2003 which is progressing satisfactorily and is expected to be completed in December 2004. The turnover from this project achieved in 2003-04 is Euro 0.147 million approx. (equivalent to Rs. 8.74 million) are adjustment of other income and foreign exchange gain/loss. 7. IRCON had entered into an agreement in 2000-01 with WS Atkins for providing them design support for re-signaling of railway system on West Coast main line of British Railways for a year. The operating teams for this project are based in Sharjah and U.K. Considering the good quality of work done by IRCON's personnel, the contract had been extended up to November 2004. The total turnover from the projects during 2003-04 is GBP 0.677 approx. (equivalent to Rs. 165 million approx.) after adjustment of other income and foreign exchange gain/loss. c. New projects 1. Ethiopia IRCON has secured a World Bank funded project valued at USD 31.3 million (Rs.1400 million approx.) for Ethiopia Road Sector Development Support Phase ; known as Dera-Mechara Road Upgrading Contract1: Dera-Magna, for the client Ethiopian Roads Authority, the Federal Democratic Republic of Ethiopia, for which a contract has been signed on 10th August 2004. The project consists of 120 Km. construction of road within a period of 42 months. Steps have been initiated for mobilisation of manpower, and procurement of plant and equipments 2. Indonesia: IRCON has been awarded in April 2004 a road project of approx. 10 million USD (Rs. 450 million approx.) in Indonesia namely CIKAMPEK PADALARANG Highway Development Package IV.4 (Toll road project), for the client, PT Jasa Marga Indonesia. IRCON's participation in the project is 49% and consists of constructing 4 over pass bridges and rigid pavements by April 2005. The target turnover for 2004-05 from this project is around Rs. 80 million. d. Likely projects 1. Mozambique IRCON - RITES Consortium has been jointly declared preferred bidder for Beira Rail Concession Project in Mozambique for its rehabilitation, operation, and maintenance for a period of 25 years. A joint venture company (JVC) has been incorporated in Mozambique on 29th July 2004 for executing this project. The process for signing of concession agreement and takeover of the railway system has started. IRCON's share in the equity of the JVC is 25% while that of RITES is 26%. The Mozambiqnan Railways will hold 33% of the equity capital and balance 160/o is expected to be held by a local Mozambican company/individuals to be identitied by the Govt. of Mozambique. The estimated value of this project is USD 152.46 mill!on Funds to finance the project would be met from shareholders equity. commercial debt and concessional funds from International Development Association (IDA). The present estimated commitment from IRCON towards this project both in terms of equity investment and loan is expected to be USD 18 million. 2. Sudan: A letter of intent (LOI) has been issued to IRCON on 21st June 2004 by the Government of Sudan for constructing new railway lines/rehabilitation of existing track between Haiya to Port Sudan, on design, financing and build basis. The cost of the project is estimated to be USD 352 million approx. Preliminary survey of the work has been done and a Report has been submitted to the Govt. of Sudan. Letter of Award is expected after the report is accepted by the Sudanese Authorities. B. Projects in India a. Completed Projects: During the year the Company completed six projects in India out of which completed works with a value of over Rs. 100 million each are: (i) Construction of Ballastless Track for MTP (Railways) at Chennai, valued at Rs. 253.90 million. (MRTS Phase II - Tirumallai to Velacheri - Construction of Ballastless Track including supply of fittings, between Tirumailai and Taramani - I Stations in the elevated portion), a month ahead of schedule. (ii) New University Complex (Phase-II) for Central institute of Fisheries Education (CIFE), Versova, Mumbai, valued at Rs. 205 million. (iii) DMRC-RC3 contract involving construction of ballast less track from Tis Hazari to Trinagar was completed three months ahead of schedule. This was opened to traffic on 3rd October 2003 by the then Hon'ble Prime Minister Mr. Atal Bihari Vajpayee. IRCON had secured this contract valued at Rs. 1646.7 million through stiff international competition and had formed a consortium with MVM Rail Pty., Australia. This contract also entailed construction of ballasted track for Shastri Park Depot and workshop. (iv) EHV sub-station involving turnkey work of 4 new sub-stations and extension of 19 existing sub-stations for GRIDCO, Bhubaneshwar, Orissa, valued at Rs. 326.80 million. The other two projects with a value of less than Rs 100 million completed during the year were for Irrigation and Waterways Directorate and Calcutta Metropolitan Development Authority. Work of over Rs. 100 million completed after the close of the year is Noida-Greater Noida : Expressway project valued at Rs. 202 million in April 2004. This apart two railway siding works for SECL and MPSEB have also been completed. b. Projects secured in India during the year: Important railway and highway projects secured in India during the year and those in progress are around 30 in number and include - - Fencing work in Meghalaya sector on indo-Bangladesh Border for Ministry of Home Affairs, valued at Rs. 1200 million. - Civil Engineering works up to formation level (including bridges) for Cuttak-Barang (Doubling), and Rajatgarh - Barang (Doubling) for Rail Vikas Nigam Limited, valued at Rs. 1020 million in all. - Construction of Elevated structure in connection with extension of circular Railway from Dum Dum cantonment to NSC Bose Airport for Metro Railway, Kolkata, valued at Rs. 133.90 million. - Setting up of new zonal headquarters office at Hubli for South Western Railway, valued at Rs. 278.45 million. - Construction of married accommodation for defence personnel at Allahabad, Bhopal and Jhansi for Ministry of Defence; valued at Rs. 3368.90 million. - Two projects for extension of 400 KV sub-stations for Power Grid Corporation of India, valued at Rs. 199 million in all. - Construction of additional works (buildings of area 3800 sqm.) for College of Veterinary Science and Animal Husbandry at Selesih, Aizwal, Mizoram, valued at Rs. 206 million. c. Important works secured after the end of financial year 2003-04: - Variation order for new BG Rail link (Qaziqund-Srinagar-Baramulla) project for Northern Railway, valued at Rs. 4276 million. - Variation order for Laole-Q,.laziqund new BG Rail line project for Northern Railway, valued at Rs. 7630 million:. - Two projects for construction of approach major bridge and cable stayed road over bridge for East Central Railway, at a total value of Rs. 126 million. - Supply, installation, testing and commissioning of track work of line - 3 commodore (Barakhamba Road-Con caught Place-Dwarka), Najafgarh Depot and workshop - Contract 3T-01 for Delhi Metro Rail Corporation, valued at Rs. 844.50 million. - Construction of road over bridges in Bihar State (EC Railway) including approaches for Ministry of Railways, valued at Rs. 4624.70 million. - OFC works for sections in SC Railway, SW Railway. EC Railway and Eastern Railway for Retail Corporation of India Limited, valued at Rs. 177.60 million. BUSINESS DEVELOPMENT As part of business development the Company participate. in four engineering and infrastructure exhibitions - three abroad in Sri Lanka, Malaysia, Bangladesh and one in India. In these exhibitions the Company also projected its profile and achievements and showed its presence globally in the field of infrastructure. The value of new orders received so far during the year 2004-05 is around RS. 7993 million in India and abroad. The Company expects that it will secure further works worth Rs. 5000 million in India by the end of the financial year in the field of Infrastructure. TECHNOLOGY ABSORPTION AND R & D IRCON has successfully pioneered the design and engineering of dual gauge (DG) track circuit in 3-rail configuration for the purpose of gauge detection by designing and providing track insulation in twelve different types of DG turnouts required for truck bonding plan in Bangladesh Railways. IRCON has also pioneered in designing and engineering about 140 dual gauge mechanically interlocked hand points at 25 stations. This system consists of a hand plunger key lock (HPKL) assembly, a split stretcher bar for three switches, and a unit detector to suit independent detection of three switches i.e broad gauge switch, metre gauge switch, and a common switch. Also for the first time in Bangladesh, IRCON has designed and provided two types of ground connections for dual gauge electric operated point machine. One for SIEMENS type to be used at 3 new stations and the other for modifications in existing ERICSSON signaling at 3 stations where ERICSSON type point machines were in use. PERSONNEL DEVELOPMENT Cordial and harmonious industrial relations prevailed in the Company. The Company has been continuously tuning its training programmes to meet organisational needs which includes induction courses to the new entrants and development programmes for employees at different levels. Special training programmes and workshops are held in IRCON's modern training centre at Gurgaon for IRCON's employees. Against the targeted 1285 man days the Company achieved 1364 training man days which covered the fields of civil, and electrical construction, finance, vigilance; project management, information technology, labour laws, tax and art of living. The Company has a liberal VRS which was availed by 19 surplus staff during the year. The total manpower strength as on 31st March 2004 stands at 1609 which includes 240 deputationlists majority of whom are deployed on projects abroad and 61 women out of which 10 are executives. The Company has been encouraging sports amongst its employees. During 2003-04, IRCON Cricket Team participated in Delhi and District Cricket Association in A-II Division league. Also one trekking expedition from Gangotri to Gomukh was organised by the Company in July-August 2003. This is the first time female employees of the Company enthusiastically participated in such an adventure. The 28th Annual Day was celebrated on 28th April 2004 with great enthusiasm. The function was graced by Mr. R.K.Singh, Chairman Railway Board, and Chairman, IRCON, who lit the inaugural lamp to mark the celebrations. Other dignitaries from the Ministry of Railways, public sector undertakings, embassies, etc. also graced the occasion. COMPLIANCES Presidential Directive A directive was received vide Railway Board's letter No. 99/PU69/1/Pt dated 30th September 2003 regarding the methodology of accounts of allowances to be followed by employees on return from tour abroad based on guidelines issued by the Department of Public Enterprises. The process of compliance has been initiated. Official language Constitutional provisions regarding Official Language are being complied with in letter and spirit. Various incentive schemes of Department of Official Language (Ministry of Home Affairs) have also been implemented to promote progressive use of Hindi. Bilingual computers are in use in the Company and IRCON's website also disseminates information about the Company in both English and Particulars of employees No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 Lakhs or more per month during the year. Conservation of energy Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption. Increased use of Compact Fluorescent Lamp (CFL) is being made as energy conservation measure. Vigilance activities The vigilance cell of IRCON is headed by a full time Chief Vigilance Officer (CVO) of IAS cadre (on reputation) and oversees both preventive and punitive vigilance. As part of the initiatives towards preventive vigilance during the year, five sensitive areas (marketing, vigilance, finance, foreign postings and contract and tender management) have been identified with suggestions for codification and standardization in calling tenders etc. Measures have also been taken in this direction in the form of preventive checks, information through web site, training programme, vigilance compendium, periodical bulletins, etc. Further, periodical review and monitoring of cases are being done to reduce tendency of DAR cases. Quality management Quality Management System (QMS) has been successfully sustained and improved for the last more than eight years since the Company was first certified for ISO - 9002 by TUV Suddeutschland Private Limited (TUV) in February 1996. IRCON has also been certified by TUV as per latest revised code ISO-9001-2000 in 2003-04. Training/Awareness programmes on ISO-9001-2000 focusing on customer satisfaction and continual improvement were arranged in projects, regional offices and corporate office. Positive customer feedback is being received from almost all the projects. Also proposals for continual improvement are being received from projects as well as individual employees which are examined by a Committee and if found suitable for QMS, they are recommended for approval and implementation. A Surveillance Audit was conducted in May 2004 in three projects and Corporate Office and IRCON's efforts towards continual improvement and customer feedback were appreciated. System Development through IT The Company had taken initiatives during 2002-03 for undertaking a comprehensive computerization of all aspects of working of the Company and its project locations to achieve an Integrated Information System with the help of Tata Consultancy Services (TCS), Management Consultants. Based on the report submitted by TCS recommending state of the art ERP(Enterprise Resource Planning) based system in corporate applications to improve and reengineer the business processes, a multi functional core team has been constituted, mobilised, and has been imparted orientation training. The ERP based Integrated Information System will have six major modules covering project management, contract management, human resource management, functional management, assets management and e-tendering and 4 other modules covering marketing, quality, vigilance and administration, and management dashboard. The system is expected to be implemented in two stages, namely first pilot stage covering Corporate Office, four regional offices and three project offices, two in India and one abroad; and the second stage covering all the other offices and projects of the organisation. Steps have been taken so that the said ERP system is implemented by the end of 2005-06. In addition, the Company is also separately implementing a Primavera based Project Management Information System; initially in J&K project, which is likely to be completed by the end of 2004-05. The Company has already implemented a web enabled integrated centralised pay roll system whereby a comprehensive employees' master data base has been developed and pay of all employees irrespective of their location has been centrally processed bringing uniformity in the implementation of the pay related policies. EXCELLENCE AND AWARDS Excellent MOU rating The Company secured "Excellent" rating in 2002-03 under the Memorandum of Understanding between IRCON and Ministry of Railways for meeting its targets for the fourth consecutive year. Export Awards The Company received the following two export awards from Overseas Construction Council of India (OCCI) {now known as Project Exports Promotion Council of India (PEPC) } for is performance during 2002-03 in terms of (i) Maximum foreign exchange earned and repatriated to India from overseas service contracts. (ii) Second highest in the category of Maximum Foreign Exchange Earned and Repatriated to India from Overseas Construction Projects. The awards were presented by Mr. S.B. Mookherjee, the then Minister of State for Commerce and Industry, at a function held on 12th November 2003 The Company also received the "All India Trophy for Top Exporters in the category of Merchant Exporters" from Engineering Export Promotion Council (FFPC) for the year 2000-01. This award was presented on 26th September 2003 by Mr. Arun Jaitely, the then Union Minister of Commerce and Industry and Law and Justice, So far since 1984-85 the Company has received 40 awards in the last 18 successive years from OCCI/PEPC and 17 awards from EEPC. DIRECTORS' RESPONSIBILITY STATEMENT The Board of Directors of the Company confirms i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure. ii) that such accounting policies were selected and applied consistently and such judgements and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended on 31st March 2004. 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, 1956, as stated in the annual accounts, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the annual accounts have been prepared on a going concern basis. BOARD OF DIRECTORS During April 2003 to March 2004, seven meetings of the Board of Directors were held with one meeting each in the quarters ended June 2003, December 2003, and March 2004 and four meetings in quarter ended September 2003. The following Directors ceased to hold office during 2003-04 :- 1. Mr. B. S. Sudhir Chandra Superannuated on 31.08.2003 Part-time Chairman (official)

2. Mr. S. C. Nagpal Superannuated on 30.04.2003 Partime Director (official)

3. Mr . O. P. Agarwal Superannuated on 31.10.2003 Part-time Director (official) The following Directors are holding offices as on the date of the report :- 1. Mr. R. K. Singh From 04.09.2003 (FN) onwards Part-time Chairman (official) 2. Mr. B.S. Kapur From 1.2.2002 (FN) onwards Managing Director 3. Mr. K.B.Verma From 14.7.2000 (AN) onward Director (Finance) 4. Mr. Ankush Krishan From 25.6.2002 AN onwards Director (Works) 5. Mr. Mohan Tiwari From 8.8.2003 (AN) onwards Director (Projects) 6. Mr. Sudhir Mathur From 2.11.1999 (FN) onwards Part-time Director (official) 7. Mr. P.K.Choudhury From 8.3.1999 (FN) onwards Part-time Director (non-official) 8. Mr. S.S. Shroff From 8.3.1999 (FN) onwards Part-time Director (non-official) 9 Mr. M. Ravindra From 26.3.2002 (FN) onwards Part-time Director (non-official) 10. Mr. Narbhajan Singh From 7.9.2002 (FN) onwards Part-time Director (non-official)

AUDITORS The auditors of the Company appointed by the Government of India for 2003-04 are :- Kishore & Kishore, New Delhi. Statutory Auditors Branch Auditors for Kumar Chopra & Associates, New Delhi Northern Region U G Devi & Co., Mumbai Western Region SBA Associates, Kolkata Eastern Region R.K. Kumar & Co., Chennai Southern Region Toha Khan Zaman & Co., Bangladesh Bangladesh. ACKNOWLEDGEMENT We record our appreciation and thanks to Ministry of Railways, Ministry of External Affairs and other ministries, Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks, Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio; and esteemed clients both in India and abroad for their continued interest in and support to the Company. We also on this occasion humbly pay our homage to our illustrious predecessors and place our appreciation for all on record. We take this opportunity to reaffirm our trust in the competence and sincerity of purpose of the employees of this Company and record our grateful thanks to them for their relentless hard work even in tough situations to meet challenges and maintain quality performance. For and on behalf of the Board of Directors Sd/- Sd/- (K.B.Verma) (B.S. Kapur) Director (Finance) Managing Director New Delhi Dated : 28th August 2004

Mar 31, 2003

It is a great privilege and pleasure for the Directors to present this 27th report of the Company for the financial year 2002-03.

This Report also encompasses within its fold a report each on Corporate Governance and Management Discussion and Analysis as Annexures "A" and "B" respectively.

The Corporate Governance Report highlights the Company's philosophy on Corporate Governance, composition of Board of Directors and Audit Committee and disclosures relating to their functions and general information for shareholders. It is supplemented by a certificate of compliance from auditors as per clause 49 of listing agreement, at Annexure "C".

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, strengths and strategies, prospects, etc.

This Directors' Report also has an Addendum comprising Management replies to comments made by the auditors in their report.

FINANCIAL PERFORMANCE

The performance of the Company in the last three years is given below:-

(Rs. in Million)

2000-01 2001-02 2002-03

Income/Turnover 8111 9235 8002 Profit before tax 1001 1272 1158 Dividend 148 173 188 Net worth 4950 6062 6720 Number of employees 1808 1797 1553

Turnover includes operating income of Rs. 7758 million as against Rs. 8821 million in the previous year. The decline in the operating income is due to completion of projects in Malaysia and low order book position in earlier years. Other incomes decreased from Rs. 414 million to Rs. 244 million in the current financial year as the investment in UTI G Sec Income Scheme was disposed off in June 2002 and channelised in UTI G Sec Growth Fund.

During the year under consideration, railways and highways continued to be the main sources of earning. The operating income from Railways has decreased by 12% over last year's operating income as compared to 10% decline in income from highways and 15% decrease in income from other operations.

(Rs. in Million)

2000-01 2001-02 2002-03

Operating % Operating % Operating % Income Income Income

Railways 4627 60 5791 66 5099 66 Highways 2104 27 1768 20 1586 20 Other operations 961 13 1262 14 1073 14

Total 7692 8821 7758

This is in accordance with the corporate plan of the Company to focus on areas of core competence, namely. Railways and Highways, and development of competencies in upcoming areas like Metro and entering into new market areas wherever feasible through synergy by joining hands with leaders in specialized areas.

There was also a perceptible movement in the business profile towards Indian projects during the year as compared to the scenario in the previous year. During the year, Indian projects accounted for more than sixty per cent of the total turnover of the Company which is an increase of 49% over last year's Indian turnover. A comparative position for the last three years is given below.

Foreign Exchange Earnings

The total direct foreign exchange earnings and outgo during the year were Rs. 3631.94 million and Rs. 1733.11 million respectively resulting in net foreign exchange earnings of Rs. 1898.83 million as compared to net foreign exchange earnings of Rs. 2840.03 million in the previous year. The fall is on account of reduction in foreign works.

Dividend

In consideration of profits recorded during the year to the tune of Rs. 1158.31 million, the Board of Directors have recommended a dividend of 380% of the paid up share capital for your consideration as against 350% last year. For this purpose, a provision of Rs. 188.06 million has been made in the Accounts of the Company against Rs.173.22 million in the previous year. If approved, the cumulative dividend paid up to 2002-03 will stand at Rs. 964.40 million approximately.

Reserves

To obtain tax benefits under the Income-tax Act, 1961, in respect of profits from projects outside India not covered under double taxation avoidance agreements, it is proposed to transfer Rs. 25.00 million from Profit and Loss Account to Foreign Projects Reserve and write back Rs. 85.00 million reducing the balance under Foreign Projects Reserve from Rs. 665.75 million in the previous year to Rs. 605.75 million in the current year. Similarly, to obtain tax benefits under section 80 HHBA of the Income-tax Act on the domestic profits and gains derived from the World Bank aided projects of the Company, which is available from assessment year 2002-03, an amount of Rs. 5.00 million is proposed to be transferred from Profit and Loss account to the Housing Projects Reserve Account created in 2001-02 increasing its balance from Rs. 17 million in the previous year to Rs. 22 million in the current year.

As per sub section (1) of section 115-O of the Income-tax Act, 1961, inserted by the Finance Act of 2003 w.e.f. 1.4.2003, any amount declared/distributed/paid by way of dividend shall be chargeable to additional income-tax at the rate of 12.5% plus surcharge. Hence, a provision of Rs. 24.10 million has been made for payment of corporate tax on dividend. After payment of dividend, and corporate tax on dividend, and transfers to Foreign Projects Reserve and Housing Projects Reserve, an amount of Rs. 713.39 million is proposed to be transferred to general reserves from the profits of the Company, thereby increasing the Reserves and Surplus from Rs. 6012.03 million in the previous year to Rs. 6670.42 million in the current year. With this the Net worth of the Company will stand at Rs. 6719.91 million as against Rs. 6061.52 million last year.

OPERATIONAL PERFORMANCE

A. Projects Abroad

IRCON completed a project during the year for supply of equipment for one 66/20 KV sub-station at Lattakia, Syria, at a value of US$ 1.07 million which was secured in January 2002.

On-going projects

Malaysia

IRCON continued to operate 30 meter-gauge diesel locomotives on Malaysian Railway system (KTMB), against lease and maintenance contract. KTMB has now expressed its desire to extend the contract beyond May 2003 for one year i.e. till 2004. However, the contract will be partially modified so as to provide 30 loco operation till 31.12.2003 and 20 loco operation w.e.f. 1.1.2004.

Bangladesh

The work on Jamuna bridge Railway Link project contract-2 (secured in October 1999) which was scheduled to be completed in March 2003, is likely to be completed by 31st August, 2003. The delay is on client's account due to belated supply of rails.

The work of rehabilitation of Dhaka-Sylhet road project from Auskandi Junction to Sylhet rail over bridge for Roads and Highways Department of Bangladesh valued at BD Taka 1639 million (equivalent to Rs.1436 million) in joint venture with a local company secured in June 2001 is in progress though there was a brief set back due to longer monsoon period in 2002. IRCON's portion of work which is 50% valued at BD Taka 819 million (equivalent to Rs. 718 million) is now likely to be completed as per revised schedule.

The work for supply and installation of six 33/11 KV sub-stations for Greater Dhaka Power Distribution Project, Phase-IV, the first electrical project in Bangladesh, is progressing as per schedule and is expected to be completed by August 2003. The revised value of the contract is equivalent to Rs. 144.70 million approximately.

IRCON secured during the year (in August 2002) a project for improvement of eleven road intersections in Dhaka city under Dhaka Urban Transport Project (DUTP) valued at BD Taka 210.5 million (equivalent to Rs. 175.5 million) which is likely to be completed by December 2003.

United Kingdom

The work under an agreement signed with Balfour Beatty Rail Projects Ltd. (BBRPL) for provision of Permanent Way (P-Way) supervisors for undertaking P-way rehabilitation works in U.K. is continuing. Further, efforts are being made to explore the market in UK for independently undertaking execution of P-Way contracts in future.

The total turnover from electrical projects in U.K. during 2002-03 is around 0.62 sterling pound (equivalent to Rs. 46.10 million approx.). Three more electrical contracts have been entered into with BBRPL for provision of project services through technicians/supervisors/engineers.

IRCON had entered into an agreement in 2000-01 with WS Atkins for providing them design support for re-signalling of railway system on West Coast main line of British Railways for a year. Considering the good quality of work done by IRCON's personnel, the contract has been extended up to November 2004. The total turnover from the projects during 2002-03 is GBP 1.91 million approximately (equivalent to Rs. 141.34 million approx.).

B. Projects in India

During the year, the Company completed 14 projects in India comprising construction of rail cum road bridge, road over bridges, cable stayed bridge, buildings, RCC box, sub-stations, flyover, land development, etc. About 30 other projects are under various

stages of execution such as Noida-Greater Noida Expressway, Qazigund-Srinagar-Baramulla new broad gauge rail link, Delhi Metro Rail Corporation projects, Khaga-Allahabad road project, Piparwar railway siding phase-I and II, EHV sub-stations for Grid Corporation of Orissa (GRIDCO), etc.

Ten works completed in India with a value of over Rs. 100 million each during the year are :

(i) Road over bridges (Phase-I and II) over railway lines for Maharashtra State Road Development Corporation, valued at Rs. 900 million and Rs. 850 million respectively.

(ii) Rail-cum-road bridge over river Gandak for N.E.Railway, valued at Rs. 102 million.

(iii) Mechanised coal handling facilities at Paradip Port for Paradip Port Trust, valued at Rs. 335 million.

(iv) Construction of outer ring road between Magadi Road and Tumkur Road at Bangalore for Bangalore Development Authority; valued at Rs.246 million.

(v) National Agricultural Science Centre Complex at Indian Agricultural Research Institute (IARI), Pusa, New Delhi for Indian Council of Agricultural Research (ICAR), valued at Rs. 520 million.

(vi) Fatua-Islampur BG Railway line Project for Eastern Railway; valued at Rs. 344 million.

(vii) Construction of cable stayed bridge and approaches at Bangalore for Southern Railway; valued at Rs. 397 million.

(viii) Land development work at New Town/Rajarhat (Contract-I) for West Bengal Housing Infrastructure Development Corporation Limited; valued at Rs. 457 million.

(ix) 400 KV grid sub-station at Mapusa, Goa, for Power Grid Corporation of India Limited; valued at Rs. 332 million.

The other 4 projects with a value of less than Rs. 100 million completed during the year were for Eastern Railway, Chennai Port Trust, Government of West Bengal and Bangalore Development Authority (BDA).

Work completed after the close of the year:

- Construction of ballast less track including supply of fittings between Tirumalai and Taramani-I section in elevated portion (MRTS Phase-II) for MTP (Railway); valued at Rs. 254 million.

PROJECTS SECURED IN INDIA DURING THE YEAR

Important railway and highway projects secured in India during the year and in progress include -

- Katra-Udhampur-Qazigund New Railway Project for Northern Railway; valued at Rs. 7500 million.

- Supply and laying of optical fibre and 4 quard cable in Jaipur-Ahmedabad section for RailTel Corporation of India Limited, valued at Rs. 116 million.

- Traction electrification, power supply, power distribution and SCADA for Trinagar-Rithala section (Contract RC-7B) for Delhi Metro Rail Corporation; valued at Rs. 303 million.

- Strengthening of State Highway-5 (SH-5) from Godhra to Shamlaji and paving of shoulders (Km 379/900 to Km 501/400), Contract No. GSHP-7 (Gujarat State Highway Project-7) for Government of Gujarat; valued at Rs. 1528 million.

- Upgradation of Katra to Bilgram and Mallawan to Bilhaur plus major maintenance of portion between Bilgram to Mallawan of State Highway No. 38 (148.435 Km Upgradation and 23 Km major maintenance) package UPSRP/01 for Uttar Pradesh Public Works Department; valued at Rs. 1500 million.

- Upgradation of Bhognipur-Ghatampur-Chaudaghra State Highway No. 46 (82.296 Km) package UPSRP/04 for Uttar Pradesh Public Works Department; valued at Rs. 700 million.

MARKETING AND FUTURE WORKS

During 2002-03, IRCON participated in the 4th SAARC Trade Fair held in October 2002 in Kathmandu, Nepal, which was inaugurated by the Prime Minister of Nepal and aimed at boosting intra-regional trade investment and other economic activities in the South Asian Region. In India, the Company participated in Construtech 2002 exhibition held at Mumbai in October 2002 organised by the Economic Times and also participated in Indian Infrastructure Show in February 2003 at New Delhi organised by Confederation of Indian Industries (CII).

During 2003-04, the focus would be on securing Railway projects in Algeria, Dominican Republic and Iran where strategic alliances have been planned. IRCON stands a good chance of securing the mega project in Malaysia during 2003-04.

In India the area of focus will continue to be on national and state highway projects funded by multilateral funding agencies and on BOT and annuity basis.

Some of the works likely to be awarded to IRCON in the near future with their approximate cost are Rail Vikas Nigam works of Rs.3500 million. Defence Housing Projects worth Rs.2900 million, and works in Muzaffarpur for CRPF worth Rs. 850 million. The Company is also exploring power house projects on BOT basis. Certain low value cost effective railway projects are also in the pipeline, such as, Rs.180 million work for Kolkata Metro and Rs.120 million work of constructing a cable stayed bridge in Patna.

The Company has received orders for works worth Rs. 1900 million after the close of the year including Rs. 1200 million work of fencing on Indo-Bangladesh border in Meghalaya region awarded in August 2003.

TECHNOLOGY ABSORPTION AND R & D

IRCON has always been keen to apply and absorb latest technology in its operations.

IRCON has executed a 4-lane cable stayed bridge across railway tracks at K.R.Puram in Bangalore with design support being provided by BBR of Switzerland. This is one of the three cable stayed bridges so far constructed in India. The bridge deck is held in position by DINA stay cables using state of the art technology which was constructed without obstructing or stopping the running train traffic underneath the bridge.

IRCON has completed two out of the three phases of ballast-less track for the Delhi Metro Rail Corporation in engineering collaboration with MVM of Australia. Based on expertise so obtained, IRCON had been awarded another similar ballast-less track by the Indian Railways for Chennai Metro Project which has been done without any technical collaboration with foreign firms. This is the first time in India such a work has been done indigenously.

IRCON is also working on electrification of Delhi Metro's underground rail corridor, using rigid catenary system for the first time in the country.

IRCON has for the first time in India provided and programmed on two stations at Simhadri NTPC project. Solid State Interlocking (SSI) with latest Research Design and Standards Organisation (RDSO) specification using state of the art technology of Microlok II equipment manufactured by M/s Union Switch and Signals, USA. This technology has also been applied by IRCON on 3 stations in KTMB project in Malaysia and on 4 stations in JBRL project in Bangladesh.

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company. The Company has been continuously tuning its training programmes to meet organisational needs which includes induction courses to the new entrants and development programmes for employees at different levels. Stress management has also been given importance and included in the training programme for 2003-04. Special training programmes and workshops are held in IRCON's modem training centre at Gurgaon for IRCON's employees.

Welfare and Incentives - During the year, the Company introduced a scheme of Multipurpose Advance for the employees to meet expenses for domestic contingencies or of emergent nature. It has also liberalised its Medical Rules during the year providing for periodical preventive medical check ups for the employees and their spouses.

To encourage the employees to put in their best, the Company is introducing a Performance Linked Incentive Scheme.

The Company has a liberal VRS which was availed by 254 surplus staff during the year. The total manpower strength as on 26th August 2003 stands at 1599 which includes 272 deputationists, majority of whom are deployed on projects abroad, and 60 women out of which 9 are executives.

The Company has been encouraging sports including trekking, and also socialising amongst the employees for their overall development. One expedition from Ranikhet to Sitlakhet and Bajol took place in May 2002 and another in July-August 2003 from Gangotri to Gomukh. This is the first time female employees of the Company have enthusiastically participated in such an adventure. IRCON also celebrated Women's Day in March 2003.

The 27th Annual Day was celebrated on 28th April 2003 with the characteristic zest and enthusiasm. The Minister for Railways Mr. Nitish Kumar, Minister of State for Railways Mr. Bandaru Dattatraya and Mr. A.K.Moorthy and other dignitaries from the Ministry of Railways, Public Sector Undertakings and clients graced the function.

COMPLIANCES

Official Language

Follow up action has been taken on the assurances given to second sub-committee of the Committee of Parliament on Official Language which inspected IRCON on 17th September 2002.

In order to promote official language in IRCON, workshops, competitions, etc. are being organised from time to time in the Company. An hour of Hindi training has been included in each training programme being held at IRCON's Training Centre at Gurgaon. IRCON's website provides information about the Company in both Hindi and English.

Particulars of Employees

No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakh or more per month during the year.

Conservation of Energy

Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption. Increased use of compact fluorescent lamp (CFL) is being made as energy conservation measure.

Vigilance Activities

A vigilance cell headed by a full time Chief Vigilance Officer (CVO) of IAS cadre (on deputation) is functioning in the Company. The vigilance activities comprise: preventive/surprise checks, investigation into complaints, replying to the objections raised by Chief Technical Examiner (CTE); vigilance clearances, spreading vigilance awareness among the officers and staff of IRCON by conducting seminars/workshops and training, issuing circulars and compendiums, a close liaison with various enforcement agencies like CBI, CAG, etc.

As per the guidelines of Central Vigilance Commission (CVC), Vigilance awareness was observed and seminars and workshops were organised in New Delhi, Kolkata, Chennai, Mumbai and Bhubaneswar with both in-house and outside faculties to strengthen preventive vigilance.

Vigilance Bulletins are released regularly to enhance awareness about vigilance and to prevent corruption.

Quality Management

Quality Management System has been successfully sustained and continually improved for more than seven years since the Company was first certified for ISO-9002 by M/s TUV in February 1996. Re-certification Audit was also conducted recently in May 2002 by M/s TUV resulting in a positive and good report about the implementation of Quality Management System in IRCON. Concerted action has been taken in accordance with the new ISO Standards for certification before December 2003.

As a part of the action plan, awareness training programmes were conducted in Delhi, Bangalore, Mumbai and Kolkata for all the functional/zonal heads, project heads, departmental/project management representatives and quality auditors, totalling about 100 in all. In addition, 2 days' in-house training programme for the internal quality auditors as per ISO-9000-2000 was arranged through M/s TUV. All the Quality Manuals have been revised as per the new standard and issued. IRCON also has a standing committee to review continual improvement measures in the Company.

Computerized Integrated Information System

The Company has taken initiatives during the year for undertaking comprehensive computerisation of all aspects of the working of the Company and its project locations to achieve an integrated information system with the help of Tata Consultancy Services (TCS), Management Consultants. The consultants have submitted their report recommending state of the art ERP based system in corporate applications such as Human Resources, Financial and Marketing Management, implementation of off the shelf project management system, development of work flow management system, and development of decision support system for the Top Management.

Necessary actions for implementation are being taken and the system is likely to be in place by the financial year 2005-06.

EXCELLENCE AND AWARDS

Excellent MOU rating

For the third consecutive year the Company secured "Excellent" rating in 2001-02 under the Memorandum of Understanding between IRCON and Ministry of Railways for meeting its targets. For the year 2002-03 also, for which formal evaluation is yet to be done by the Department of Public Enterprises, the Company has achieved the targets required for Excellent rating.

Export Awards

The Company received the following three export awards from Overseas Construction Council of India (OCCI) for its performance during 2001-02:-

(i) Maximum turnover from overseas construction contracts.

(ii) Maximum foreign exchange earned and repatriated from overseas construction contracts.

(iii) Maximum foreign business attempted.

The awards were presented by Mr. Rajiv Pratap Rudy, the then Minister of State for Commerce and Industry, at a function held on 23rd November 2002.

So far the Company has received 38 awards in the last 17 successive years from OCCI since 1984-85 and 16 awards from EEPC.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, all the applicable accounting standards have been followed and there has been no material departure.

ii) that such accounting policies were selected and applied consistently and such judgements 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 year ended on 31st March 2003.

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, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Annual Accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2002 to March 2003, eight meetings of the Board of Directors were held with two meetings each in the quarters ended June 2002, September 2002, December 2002, and March 2003.

The Directors who ceased to hold office during 2002-03 are:-

1. Dr. S.A.Dave - Held office from 8.3.1999 (FN) Part-time Director (non-official) to 6.9.2002 (AN)

2. Mr. A.K.Tandon - Held office from 3.11.1997 (FN) Director (Projects) to 31.1.2003 (AN)

The Directors who ceased to hold office after the close of the year are:-

1. Mr. S.C.Nagpal - Held office from 31.1.2002 (FN) Part-time Director (official) to 30.4.2003 (AN)

The following Directors are holding offices as on the date of the report:-

1. Mr. B.S.Sudhir Chandra - From 27.3.2002 (FN) Part-time Chairman (official) onwards

2. Mr. B.S.Kapur - From 1.2.2002 (FN) Managing Director onwards

3. Mr. K.B.Verma - From 14.7.2000 (AN) Director (Finance) onwards

4. Mr. Ankush Krishan - From 25.6.2002(AN) Director (Works) onwards.

5. Mr. Mohan Tiwari - From 8.8.2003 (AN) Director (Projects) onwards

6. Mr. Sudhir Mathur - From 2.11.1999 (FN) Part-time Director (official) onwards

7. Mr. O.P.Agarwal - From 4.8.2003 (FN) Part-time Director (official) onwards

8. Mr. P.K.Choudhury - From 8.3.1999 (FN) Part-time Director (non-official) onwards

9. Mr. S.S.Shroff - From 8.3.1999 (FN) Part-time Director (non-official) onwards

10.Mr. M.Ravindra - From 26.3.2002 (FN) Part-time Director (non-official) onwards

11.Mr. Harbhajan Singh - From 7.9.2002 (FN) Part-time Director (non-official) onwards

AUDITORS

The auditors of the Company appointed by the Government of India are:-

N.K.Bhargava & Co., New Delhi. Statutory Auditors

Kumar Chopra & Associates, New Delhi U G Devi & Co., Mumbai SBA Associates, Kolkata Price Patt & Co., Chennai Statutory Branch Auditors

Azad Zamir & Co., Statutory Branch Auditors in Bangladesh. Bangladesh.

ACKNOWLEDGEMENT

We record our appreciation and thanks to Ministry of Railways, Ministry of External Affairs and other ministries. Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks. Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio; and esteemed clients both in India and abroad for their continued interest in and support to the Company. We also on this occasion humbly pay our homage to our illustrious predecessors and place our appreciation for all on record.

We also take this opportunity to congratulate the employees of the Company at all levels, who are the pillars of strength of IRCON, for their invaluable contribution to the growth and prosperity of the Company.

For and on behalf of the Board of Directors

(K.B.Verma) (B.S.Kapur) Director (Finance) Managing Director New Delhi Dated: 26th August, 2003

Mar 31, 2002

Distinguished Shareholders,

The Directors of the Company have pleasure in presenting this 26th report of the Company covering the financial year 2001-02. A Management Discussion and Analysis Report is included which is a part of this Report. It provides an overview of the affairs of the Company, its business environment, strengths and strategies, future business prospects etc.

FINANCIAL PERFORMANCE

Salient landmarks of the year vis-a-vis the performance of last three years are given below:-

Rs. in million 1999-00 2000-01 2001-02

Income/Turnover 5373 8111 9071

Profit before tax 605 1001 1272

Dividend 114 148 173

Net worth 4457 4950 6062

Number of employees 1785 1808* 1797

* marginal increase is due to increase in personnel on deputation from Ministry of Railways.

Turnover includes operating income of Rs. 8656 million as against Rs.7692 million in the previous year. Other incomes decreased from Rs. 418 million to Rs. 414 million in the current financial year.

During the year under consideration, railways and highways continued to be the main sources of earning. The operating income from railways has increased by 22% over last years operating income as compared to 16% decline in income from highways and 31% increase in income from other operations, (Rs. in million) 1999-00 2000-01 2001-02 Operating % Operating % Operating % Income Income Income

Railways 1740 35 4627 60 5626 65

Highways 2080 41 2104 27 1768 20

Other operations 1213 24 961 13 1262 15

Total 5033 7692 8656

This is in accordance with planned focus areas of the company.

There was also a perceptible movement in the business profile towards foreign projects. Foreign projects account for more than sixty per cent of the total turnover of the Company which is an increase of 45% over last years foreign turnover. A comparative position for the last three years is given below.

(Rs. in million) 1999-00 2000-01 2001-02 Turnover % Turnover % Turnover %

Foreign 1067 20 3923 48 5693 63

Domestic 4051 75 3976 49 3103 34

Unallocated 255 52 12 - 3275 3

Total 5373 8111 9071

Foreign exchange earnings

The total foreign exchange earnings and outgo during the year were Rs. 5902 million and Rs. 3062 million respectively resulting in net foreign exchange earnings of Rs. 2840 million as compared to net foreign exchange earnings of Rs. 1539 million in the previous year.

Dividend

In consideration of record profits of the Company, the Board of Directors have recommended a dividend of 350% of the paid up share capital for your consideration as against 300% last year. For this purpose a provision of Rs. 173.22 million has been made in the Accounts of the Company. If approved, the cumulative dividend paid up to 2001-02 will stand at Rs. 776-33 million approximately.

Reserves

To obtain tax benefits under the Income-tax Act, 1961, in respect of profits from projects outside India not covered under double taxation avoidance agreements, it is proposed to transfer Rs. 27.00 million from Profit and Loss Account to Foreign Projects Reserve and write back Rs. 871.00 million reducing the balance under Foreign Projects Reserve from Rs. 1509.75 million in the previous year to Rs. 665.75 million in the current year. Similarly, to obtain tax benefits under section 80 HHBA of the Income-tax Act on the profits and gains derived from the World Bank aided projects of the Company, which is available from assessment year 2002-03, a Housing Projects Reserve has been created to which an amount of Rs. 17 million is proposed to be transferred from profit and loss account.

As per section 115-0 read with section 10(33) of the Income-tax Act, 1961, inserted by the Finance Act of 2002, tax on dividend is now the liability of the recipient and any dividend distributed or paid by a company by way of dividends after 31st March 2002 shall not be charged to tax in the hands of the Company. Hence unlike last year, no provision has been made for payment of tax on dividend. After payment of dividend and transfer to Foreign Projects Reserve and Housing Projects Reserve, an amount of Rs. 1690.75 million is proposed to be transferred to general reserves from the profits of the Company, thereby increasing the Reserves and Surplus from Rs. 4900.29 million in the previous year to Rs. 6012.03 million in the current year. With this the Net worth of the Company will stand at Rs. 6061.52 million as against Rs. 4949.78 million last year.

Some of the changes after the financial year 2001-02 which have financial implications have been disclosed in Notes 6 and 15 of Notes forming part of the Accounts given in Schedule "U" of the Annual Accounts and in a footnote to Schedule `C. A material change, dealing with part recovery of cost incurred in Delhi-Mumbai OFC project which has been abandoned, is given below:-

The Company had invested around rupees one hundred sixty two million for laying telecom facilities on Ahmedabad-Vadodara route by creating an infrastructure division within IRCON as a pilot project. This was done on the basis of a contractual agreement and award of a "right-of-way" to IRCON by Indian Railways for laying optical fibre along the railway track on Delhi-Mumbai and Ahmedabad-Gandhinagar sections of Western Railway. Later on, due to change in Government policy and formation of RailTel Corporation under the Ministry of Railways and receipt of a directive from the Ministry to abandon the project, the OFC assets created by IRCON were transferred to RailTel with the approval of the Board of Directors subject to compensation being given to IRCON for the expenditure incurred by it in executing the project. Against a claim of Rs. 162.6 million made by the Company to Railways in this regard, an amount of Rs. 104.6 million has been received from RailTel in June 2002. A private limited company in the name of Ircon Telenet Private Limited which was arranged to be incorporated in October 1999 for execution of this project has also been dissolved, a notification for which has also been received from the Registrar of Companies, NCT of Delhi and Haryana, on 19.6.2002.

OPERATIONAL PERFORMANCE

A. Projects abroad

Five projects in all were completed during the year in Malaysia, Bangladesh, Syria, and Iran:

In Malaysia US$ 121 million (Rs. 5868.50 million approx.) Rail link project from Pelabuhan Tanjung Pelepas to Johor Baru (PTP project) which was secured in July 1999 was completed in January 2002, ahead of schedule. Also the work of installation of track and other infrastructure facilities at the proposed Kuala Lumpur centra! station has been completed during the year.

In Bangladesh the Sylhet-Tambil-Jaflong road improvement project from Sylhet town to Haripur secured in August 1999 for a value of BD Taka 407 million (Rs. 346.92 million approx.) has been completed to the satisfaction of the client in February 2002 one week ahead of schedule.

In Syria the design, supply, supervision of installation and commissioning of five 66/20 KV and 66/6.3 KV sub stations for Ministry of Electricity, Syrian Arab Republic, valued at US$ 9.01 million (Rs. 436.98 million approx.), has been substantially completed.

In Iran IRCON successfully completed all the design and supplies for the 25 million US$ (Rs. 1212.50 million approx.) Railway signalling project on Shahrud-Mashad section which comprises 98% of the value of the project. Currently, installation is being done by the client, for which supervision team of IRCON is in place.

Malaysia

IRCON continues to operate diesel loco leasing and maintenance contract with KTM Malaysia. At present, there are 30 Indian Railway released metre gauge diesel locos operating on the KTM Railway system under a lease agreement. Maintenance includes supply of spare parts and manpower by IRCON. This contract will continue up to May 2003 and is likely to be extended.

Bangladesh

Bangabandhu (Jamuna) bridge railway link project contract-2 which was scheduled to be completed in March 2002, is likely to be completed in March 2003, primarily due to delay in part supply of rails to be arranged by the client, which has resulted in delay in linking of the track as well as manufacture of the turnouts and installation of third rail. The balance rails are expected to be available in August 2002.

Two new contracts have been secured in Bangladesh-one road works and one electrical project for grid sub-stations. These are;

- Rehabilitation of Dhaka-Sylhet road project from Auskandi Junction to Sylhet rail over bridge for Roads and Highways Department of Bangladesh valued at BD Taka 1639 million (equivalent to Rs.1436 million) in joint venture with a local company. IRCON will execute 50% of the work, the value of which will be BD Taka 819 million (equivalent to Rs. 718 million).

- Supply and installation of six 33/11 KV sub-stations for Greater Dhaka Power Distribution Project, Phase-IV, for Dhaka Electric Supply Authority (DESA), Bangladesh, valued at US$ 2.418 million plus BD Taka 24.298 million (equivalent to Rs. 134 million approx.). This is the first electrical project secured by IRCON in Bangladesh.

Syria

IRCON secured during the year a project for supply of equipment for one 66/20 KV sub-station at Lattakia, Syria, valued at US$ 1.069 million (equivalent to Rs. 51.3 million), for an Arabian company for a rolling mill project, which has been completed after the close of the financial year.

United Kingdom

IRCON has been successful in completing the electrical sub-contract for Balfour Beatty secured in 2000-2001 for the first time in UK. IRCONs performance has earned another similar contract with Balfour Beatty for undertaking works in connection with "modification of catenary works" on the prestigious West Coast main line project in U.K. for a period of 13 months. The total turnover from this electrical project during 2001-02 is around Rs. 34.31 million. An agreement has also been signed with Balfour Beatty in June 2002 for provision of Permanent Way (P-Way) supervisors for undertaking P-way rehabilitation works in U.K. IRCON has already deputed four P-way inspectors. This will also help IRCON to explore market in UK for independently undertaking execution of P-Way contracts at a later date.

IRCON had entered into an agreement in 2000-01 with WS Atkins for providing them design support for re-signalling of railway system on West Coast main line of British Railways for a year. Considering the good quality of work done by IRCONs personnel, this has been extended for another year. Several design and testing engineers have been posted for this project at their Sharjah design office and U.K. respectively.

B. Projects in India

During the year, the Company completed 16 projects in India comprising construction of expressway, bridges (including road-over-bridges), OFC. MGR, buildings, runway, sector development, electrification etc. About 37 other projects are under various stages of execution such as Noida-Greater Noida Expressway, Qazigund-Srinagar-Baramulla new broad gauge rail link, Delhi Metro Rail Corporation RC-3 and MC-1 B projects, Khaga-Allahabad road project, Piparwar railway siding phase-l and II, EHV sub-stations for Grid Corporation of Orissa (GRIDCO), a 400 KV grid sub-station at Mapusa, Goa, for Power Grid Corporation, cable stayed bridge in Bangalore, and construction of outer ring road in Bangalore, etc.

The completed works in India during the year with value of over Rs. 100 million each are:

(i) Merry-go-round (MGR) for Mejia Thermal Power project at Durisvpur for Damodar Valley Corporation, valued at Rs. 1080 million.

(ii) Sector Development Project, Noida, valued at Rs. 275 million.

(iii) Construction of veterinary science and animal husbandry college campus at Salesih, Aizawal in Mizoram, valued at Rs. 250 million.

(iv) Construction/reconstruction of four bridges on turnkey basis in Cuddalore for Tamil Nadu Agricultural Development, Govt. of Tamil Nadu, valued at Rs.189 million

(v) Execution of superstructure with pre-stressed concrete (PSC) box girders over already completed substructure for section `G, `H & J for MRTS Phase II - Tirumalai (Luz) - Velacheri, valued at Rs. 150 million.

Apart from these, the clients for whom the balance 11 projects were completed by the Company are - Eastern and Southern Railway, Calcutta Metropolitan Development Authority, Central Organisation for Railway Electrification (CORE) Allahabad, Airport Authority of India, Indian Agricultural Research institute, Pusa, etc.

Indian projects completed after the close of the year are:

i) Road over bridges over railway lines for Maharashtra State Road Development Corporation, valued at Rs. 900 million.

ii) Rail-cum-road bridge over river Gandak for N.E.Railway, valued at Rs. 102 million.

PROJECTS SECURED IN INDIA DURING THE YEAR

Important projects in India secured during the year and in progress include:-

* Design, supply, installation, testing and commissioning of metro corridor, traction power, power supply and power distribution and supervisory control and data acquisition (SCADA) system and rail corridor and metro corridor, lifts and escalators(Contract No. SYS-2) for Delhi Metro Rail Corporation. This project is being executed by IRCON in consortium with two Spanish partners namely, COBRA and ELIOP-IRCONs participating interest in the consortium being 53.7%. IRCONs share is valued at Rs. 1380 million out of the total value of the project which is Rs. 2567 million.

Construction of proposed expressway road to connect Norca toil bridge to Noida-Greater Noida expressway for New Okhia Industrial Development Authority; valued at Rs. 540 million. Construction of MGR Phase II at super thermal power plant (STPP), Talcher, for National Thermal Power Corporation (NTPC valued at Rs. 300 million.

Land development of additional 100 hectare at New Town Rajarhat for West Bengal Housing & Infrastructure Development Corporation; valued at Rs. 300 million.

Construction of bridges between Koparia and Mansi station of Mansi-Saharsa section in connection with gauge conversion work (Package I and II) for North Eastern Railway, Gorakhpur, valued at Rs. 208 million. Construction of 4 MGD semi-underground reservoir with booster pumping station at Kalighat park, Kolkata for Calcutta Municipal Corporation; valued at Rs. 200 million.

Road under bridge by box pushing near Dumdum station for Calcutta Metropolitan Development Authority; valued at Rs. 150 million. Construction of academic building for Central Institute of Fisheries at Versova, Mumbai; valued at Rs. 154 million.

- Two contracts for permanent way and station buildings on Fatuha- Islampur section for Eastern Railway; valued at Rs. 153 million.

MARKETING AND FUTURE WORKS

During 2001-02 the Company participated in prestigious international trade fair in Baghdad organised by India Trade Promotion Organisation (ITPO) and also participated in signalling and telecommunication exhibition in May 2002 at Tehran (Iran) organised by Iranian Islamic Republic Railways (IIRR).

During the year 2002-03 the focus would be on the forthcoming railway projects in Malaysia. Indonesia, Saudi Arabia and Algeria.

Malaysia

During the previous year the Company had been selected for a very prestigious mega new railway line project for double tracking of Ipoh - Padang Besar section on Malaysian Railways by the Malaysian Government for which a letter of intent was received during this year. The estimated value of this project is over US$ 1.5 billion. A "Statement of Need" (detailed tender documents) has been recently received from the Malaysian Government based on which IRCON will be submitting its technical and financial offer, during September 2002.

Indonesia

The Company has signed an MOU on 3rd April 2002 with Government of Indonesia for taking up a new project in South Sumatera province of Indonesia, for design development and construction of major infrastructure and port development work including construction of a new railway line. Total cost is likely to be about US$ 260 million to be met with by part barter of coal, timber, crude oil, etc. and part financing by other multilateral agencies. The barter trade will be handed by MMTC. The MOU was signed in the presence of Her Excellency Madam Megawati Sokarnoputri, President of Republic of Indonesia by IRCON, MMTC, Governor of Sumatera and President Director of Bukit Asam, owner of coal mines in the province.

Others

In highways the focus would be on World Bank/ADB funded projects for State highways and national highways in India and abroad. IRCON would also be expanding its operation for mega housing projects to be undertaken for Ministry of Defence in India for which an MOU has been signed recently for taking up works to the tune of Rs. 2900 million.

TECHNOLOGY ABSORPTION AND R & D

IRCON has always been keen to apply and absorb latest technology in its operations.

IRCON is currently executing a 4-lane cable stayed bridge across railway tracks at K.R.Puram in Bangalore with design support being provided by BBR of Switzerland. This is one of the three cable stayed bridges so far constructed in India and its completion will give IRCON necessary competence profile to bid for similar new projects coming up in the country and abroad. Similarly, IRCON is constructing ballast-less track for the Delhi Metro Rail Corporation in engineering collaboration with MVM of Australia. The work is progressing satisfactorily. IRCON is also being awarded another similar ballastless track by the Indian Railways on the elevated metro corridor of Chennai. These works will also give IRCON an opportunity for building up necessary competence profile and the requisite experience to handle similar projects abroad.

IRCON is also working on electrification of Delhi Metros underground rail corridor, using rigid catenary system for the first time in the Country.

PERSONNEL

Cordial and harmonious industrial relations prevailed in the Company. The Company has been continuously tuning its training programmes to meet organisational needs which includes induction courses to the new entrants and development programmes for employees at different levels. IRCONs modern training centre built by the Company at a cost of Rs. 60 million on a plot of 2 acres at Gurgaon was inaugurated by Mr. I.I.M.S.Rana, Chairman, Railway Board and former Chairman, IRCON on 27.2.2002. The building has eco friendly features viz, use of solar water heaters and conservation of water by rain water harvesting. Special training programmes are held in this centre for IRCONs employees on contract management, advanced computerised project management systems, etc. Efforts are also on to market the facilities so created and work it as a profit centre.

The Company also has a liberal VRS which was availed by 54 surplus staff during the year. During the year the total number of employees have been decreased from 1808 to 1797, after allowing for some intake of deputationists. As on 31.3.2002, IRCON has 1797 employees out of which 290 personnel are on deputation from Railways majority of whom are deployed on projects abroad. The total employee strength includes 58 women including 6 officers.

The 26th Annual Day was celebrated on 28th April 2002 with its characteristic zest and enthusiasm. The then Minister of State for Railways Mr. Digvijay Singh, and other dignitaries from the Ministry of Railways, Public Sector Undertakings and clients graced the function. The Minister presented awards to outstanding personnel of the Company, which was followed by mellifluous Gazal concert by the famous musicians, Bhupinder and Mithali. IRCON also celebrated Womens Day on 8th March 2002 which was presided over by the Managing Director Mr. Kapur who honoured the three longest serving women employees of IRCON.

Sports:

The Company has also been encouraging active sports amongst employees. Some of the activities and achievements include a successful adventure trekking by an expedition of IRCON employees from Delhi-Narkanda-Baghi-Thanedar-Delhi in May 2001, and participation in cricket matches by IRCON cricket team.

COMPLIANCES

Corporate governance

A report on the Corporate Governance disclosures including a Management Discussion and Analysis Report, as required by the listing agreement with stock exchanges is placed as Annexure-A and B respectively. A certificate from the auditors of the Company regarding compliance of conditions of corporate governance is placed as Annexure-C.

Official language

In order to promote official language in IRCON, workshops, competitions, etc. are being organised from time to time in the Company. In addition to bilingual publications IRCONs web site provides information about the Company in both Hindi and English. E-mail facility is also being made available in Hindi. The templates of circular, office order, etc. have been prepared in Hindi to promote the usage of Hindi.

Particulars of employees

No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakh or more per month during the year.

Conservation of energy

Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption.

Vigilance activities

A vigilance cell headed by a full time Chief Vigilance Officer of IAS cadre (on deputation) is functioning in the Company. The vigilance activities comprise:

preventive/surprise checks, investigation into complaints, replying to the objections raised by Chief Technical Examiner; vigilance clearances, induction training to new recruits and updating for other staff and officers, issuing circulars and compendiums, a close liaison with various enforcement agencies, etc.

Vigilance awareness week was observed in Corporate Office and zonal project offices of the Company, as per schedule set by CVC in October-November 2001. The following activities were undertaken during the week:-

(i) seminars/lectures arranged in association with in-house and outside faculty, and.

(ii) displaying banners/posters at prime locations. IRCONs first ever vigilance bulletin to enhance awareness about vigilance and to combat corruption was released by Mr. R.R.Jaruhar, Adviser Vigilance, Railway Board on 24th April 2002.

Quality management

Quality Management System has been successfully sustained for more than six years since the company was first certified for ISO-9002 by M/s TUV in February 1996.

Action has been taken to upgrade the quality systems in the Company in accordance with the new ISO 9000 standards to be implemented before December 2003. As part of the action plan, awareness training programmes were conducted in Delhi, Bangalore, Mumbai and Kolkata for all the functional/zonal heads, project heads, department/project management representatives and quality auditors, totalling 100 in all.

Particulars of employees

No employee has drawn a remuneration of Rs. 24 lakhs or more per annum or Rs. 2 lakh or more per month during the year.

Conservation of energy

Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption-Vigilance activities

A vigilance cell headed by a full time Chief Vigilance Officer of IAS cadre (on deputation) is functioning in the Company. The vigilance activities comprise:

preventive/surprise checks, investigation into complaints, replying to the objections raised by Chief Technical Examiner; vigilance clearances, induction training to new recruits and updating for other staff and officers, issuing circulars and compendiums, a close liaison with various enforcement agencies, etc. Vigilance awareness week was observed in Corporate Office and zonal project offices of the Company, as per schedule set by CVC in October-November 2001. The following activities were undertaken during the week:-

(i) seminars/lectures arranged in association with in-house and outside faculty, and.

(ii) displaying banners/posters at prime locations. IRCONs first ever vigilance bulletin to enhance awareness about vigilance and to combat corruption was released by Mr. R.R.Jaruhar, Adviser Vigilance, Railway Board on 24th April 2002.

Quality management

Quality Management System has been successfully sustained for more than six years since the company was first certified for ISO-9002 by M/s TUV in February 1996.

Action has been taken to upgrade the quality systems in the Company in accordance with the new ISO 9000 standards to be implemented before December 2003. As part of the action plan, awareness training programmes were conducted in Delhi, Bangalore, Mumbai and Kolkata tor all the functional/zonal heads, project heads, department/project management representatives and quality auditors, totalling 100 in all.

Computerisation

Standardisation of computerised accounting system with revision in chart of account has been made for effective internal and management information system. To minimise paper flow and availability of up-to-date information for day-to-day use, quality system manual, guidelines, rules, etc. are available on intranet system. For promotion of official language all computers have bi-lingual facility for preparation of office documents. For learning of popular software like Microsoft Word, Excel, Power point, etc. Hindi Version of multi media CDs have been provided to facilitate individual learning at their convenience and pace.

EXCELLENCE AND AWARDS

Excellent MOU rating

For the third consecutive year the Company secured "Excellent" rating in 2000-01 under the Memorandum of Understanding between IRCON and Ministry of Railways for meeting its targets. For the year 2001-02 also, for which formal evaluation is yet to be done by the Department of Public Enterprises, the Company has achieved the targets required for Excellent rating.

Export Awards

(a) Overseas Construction Council of India-Award The Company received the following four export awards from Overseas Construction Council of India (OCCI) for its performance during 2000-01:-

(i) Maximum turnover in overseas construction contracts.

(ii) Second best in the category of maximum foreign exchange earned and repatriated from overseas construction contracts.

(iii) Maximum foreign works secured in new areas.

(iv) Maximum foreign exchange earned and repatriated from overseas service contracts.

The awards were presented by Mr. Rajiv Pratap Rudy, Minister of State for Commerce and Industry, at a function held on 16th October 2001. The Company has been receiving OCCI awards for the last 15 years in succession since 1984-85 and has in all received 35 awards from OCCI.

(b) Engineering Export Promotion Council-Award

The Company received All India (EEPC) - trophy for top exporters in the category of merchant exporter, project exporters (civil construction works connected with industrial project) in recognition of outstanding contribution to engineering export for 1999-2000. The award was presented by Mr. Rajiv Pratap Rudy, Minister of State for Commerce and Industry, at a function held on 9th, January, 2002.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure except that there has been a deviation from Accounting Standard No. 11 in respect of conversion of deferred dues from Iraq into rupees which has been done at the last settlement rate with Government of India as against closing telegraphic transfer (TT) buying rate due to uncertainty of the timing of realization and exchange rate as explained in note 3 of Schedule `U of Annual Accounts.

ii) that the selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company for the year ended on that date;

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, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Annual Accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2001 to March 2002, nine meetings of the Board of Directors were held with two meetings each in the quarters ended June 2001. September 2001 and December 2001, and three meetings in the quarter ended March 2002.

The Directors who ceased to hold office during 2001-02 are:-

1. Mr. R.N.Malhotra - Held office from 27.6.2000 (FN) to Part-time Chairman (official) 31.8.2001 (AN)

2. Mr. I.I.M.S.Rana - Held office from 20.9.2001 (FN) to Part-time Chairman (official) 27.3.2002 (FN)

3. Mr.P.K.Wahi - Held office from 2.8.2000 (FN) to Part-time Director (official) 23.4.2001 (AN) and from 1.8-2001 (FN) to 30.9.2001 (AN)

4. Mr. Kanwarjit Singh - Held office from 24.4.2001 (FN) to Part-time Director (official) 1.8.2001 (FN) and from 19.10.2001 (FN) to 12.1.2002 (FN)

5. Mr. Arun Prasada - Held office from 16.5.1997 (FN) to Managing Director 31.1.2002 (AN)

6. Mr. B.S.Kapur - Held office as Director Works from Director (Works) 17.6.1998 (FN) to 31.1.2002 (AN)

The following Directors are holding offices as on the date of the report:-

1. Mr. B.S.Sudhir Chandra - From 27.3.2002 (FN) Part-time Chairman (official) onwards

2. Mr. B.S.Kapur - From 1.2.2002 (FN) Managing Director onwards

3. Mr. A.K.Tandon - From 3.11.1997 (FN) Director (Projects) onwards

4. Mr. K.B.Verma - From 14.7.2000 (AN) Director (Finance) onwards

5. Mr. Ankush Krishan - From 25.6.2002(AN) Director (Works)

6. Mr. Sudhir Mathur - From 2-11.1999 (FN) Part-time Director (official) onwards

7. Mr. S.C.Nagpal - From 31.1.2002 (FN) Part-time Director (official) onwards

8. Dr. S.A.Dave - From 8.3.1999 (FN) Part-time Director (non-official) onwards

9. Mr. P.K.Choudhury - From 8.3 1999 (FN) Part-time Director (non-official) onwards

10. Mr. S.S. Shroff - From 8.3.1999 (FN) Part-time Director (non-official) onwards

11. Mr. M.Ravindra - From 26.3.2002 (FN) Part-time Director (non-official) onwards

Auditors

The auditors of the Company appointed by the Government of India are:-

N.K.Bhargava & Co., New Delhi. Statutory Auditors

Kumar Chopra & Associates, New Delhi

U G Devi & Co., Mumbai

SBA Associates, Kolkata

Price Patt & Co., Chennai Statutory Branch Auditors

Azad Zamir & Co., Statutory Branch Auditors in Bangladesh. Bangladesh.

ACKNOWLEDGEMENT

We record our appreciation and thanks to Ministry of Railways, Ministry of External Affairs and other ministries, Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks, Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio; and esteemed clients both in India and abroad for their continued interest in and support to the Company. We also on this occasion humbly pay our homage to our illustrious predecessors and place our appreciation for all on record.

We also take this opportunity to congratulate and whole-heartedly appreciate the employees of the Company at all levels on their continuing successful performance which has enabled the Company to grow from strength to strength and establish landmarks. It is the dedication, relentless efforts, sincerity of purpose, and unstinted support of the employees that have enhanced the productivity and prestige of the Company and made it possible for it to perform and progress commendably.

For and on behalf of the Board of Directors Sd/- Sd/- (K.B.Verma) (B.S.Kapur) Director Finance Managing Director New Delhi Dated: 17.7.2002.

Mar 31, 2001

An overview of the affairs of your company is contained in the Management Discussion and Analysis Report.

The Directors of the company have great pleasure in presenting to you the report for the current financial year 2000-2001.

This has been an eventful year. Your company completed 25 years of incorporation on 28.4.2001. And as befitting the occasion, for the first time IRCON crossed Rs. 8000 million mark of turnover and Rs. 1000 million mark of Profit Before Tax.

EXCELLENT MOU RATING

The company received "Excellent" rating in the previous year under the Memorandum of Understanding between IRCON and Ministry of Railways for meeting its targets. For the year 2000-01 also, for which the evaluation is to be done, the company has achieved the targets required for Excellent rating.

FINANCIAL PERFORMANCE

Some important indices for the last two years are given below

(Rs. in Million) 1999-2000 2000-2001

Turnover 5373 8111

Profit Before Tax 605 1001

Dividend 114 148

Net worth 4457 4950

Number of employees 1785 1808

Turnover includes Operating income of Rs. 7738 million as against Rs. 5033 million in the previous year. Similarly Other Incomes also increased from Rs. 338 million to Rs. 372 million in the current financial year.

During the year under consideration, railways and highways continued to be the main sources of earning.

(Rs. in Million) 1999-00 2000-01 Operating Income % Operating Income %

Railways 1740 35 4627 60 Highways 2080 41 2104 27 Others 1213 24 1007 13

This is in accordance with planned focus areas of the company.

There was also a perceptible movement in the business profile towards foreign projects. Foreign projects accounted for almost half the total turnover of the Company. A comparative position for the last two years is given below.

(Rs. in millions) 1999-00 2000-01 Turnover % Turnover %

Foreign 1067 20 3923 48

Domestic 4306 80 4188 52

Foreign exchange earnings

The total foreign exchange earnings and outgo during the year were Rs.3952 million, and Rs. 2413 million respectively resulting in net foreign exchange earnings of Rs. 1539 million as compared to net foreign exchange earnings of Rs. 467 million in the previous year.

Dividend

In consideration of this being the Silver Anniversary year and record profits of the company, the Board of Directors have recommended a dividend of 300% of the paid up share capital for your consideration as against 230% last year. For this purpose a provision of Rs. 148.47 million has been made in the Accounts of the company. If approved, the cumulative dividend paid up to 2000-2001 will stand at Rs. 603.12 million approximately.

Reserves

To obtain tax benefits under the Income-tax Act, 1961, in respect of profits from projects outside India, it is proposed to transfer Rs. 111.75 million from Profit and Loss Account. to Foreign Projects Reserves and write back Rs. 160.0 million reducing the balance under Foreign Projects Reserves from Rs. 1558.0 million in the previous year to Rs. 1509.75 million in the current year.

After payment of dividend and tax thereon and transfer to Foreign Project Reserve, an amount of Rs. 540.78 million is proposed to be transferred to General Reserves from the profits of the company, thereby increasing the Reserves and Surpluses from Rs. 4407.86 million in the previous year to Rs. 4900.39 million in the current year. With this the Net worth of the Company will stand at Rs. 4949.88 million as against Rs. 4457.35 million last year.

OPERATING PERFORMANCE

Projects abroad

Malaysia

Malaysia continued to be the largest client country. The progress of US$ 121 million rail link project from Pelabuhan Tanjung Pelepas to Johor which was secured in July 1999 is very good and the project is expected to be completed on schedule in January 2002.

As a result of highly satisfactory performance of the locos supplied by IRCON to Malaysian Railways and the availability of locos surpassing the contractual targets, the Malaysian Railways have increased the number of locos on wet lease from 25 to 30 during the year.

The work of installation of track and other infrastructure facilities at the proposed Kuala Lumpur Central Station is likely to be completed in October 2001, one year behind schedule due to delay in civil construction work being executed by the client himself.

Bangladesh

The highway project in Bangladesh viz. Flood restoration work of road between Nawabganj and Sonamasjid was completed to the entire satisfaction of the client.

There was marginal setback in Jamuna Bridge Rail Link project in Bangladesh scheduled to be completed in March 2002, primarily due to delay in approval of drawing, handing over of site, law and order disturbances, and problem in supply of concrete sleepers. These are now in control and the progress has picked up.

The work in Sylhet-Tambil-Jaflong Road Improvement Project from Sylhet Town to Haripur in Bangladesh secured in August 1999 for a value of BD Taka 407 million is progressing as per schedule and is likely to be completed well before the schedule date of completion of February 2002.

Iran

Progress in Shahrud-Mashad railway signalling supply contract in Iran is good and the supplies are expected to be completed in September 2001.

Syria

The project secured in Syria during the year covers design, supply supervision of installation and commissioning of five 66/6.3 KV sub-stations, valued at Rs. 392 million is in progress.

United Kingdom

For the first time the company obtained electrical sub-contracts for Betfour Beatty in UK for Rs. 15.9 million and signalling for WS Atkins in Shariah for Rs. 47.6 million for projects in UK.

Due to heavy investment proposed in the railways in UK more such contracts may be expected in future.

Projects in India

During the year four highway projects were completed viz. - a 17.15 km BOT highway construction project between Vadodara and Halo), two state highway construction projects in Andhra Pradesh totalling 180 Kms. and a 13.5 km Bypass project near Jaipur. All were completed in time.

The company completed 12 other projects in India comprising construction of railway siding, buildings, roads, flyovers, electrification etc. About 40 other projects are under various stages of execution such as Noida Expressway, railway bridge on river Gandak, land development work at Rajarhat near Koikata, MRTS project in Chennai, Cable stayed bridge in Bangalore, fly-over works in Bangalore and at various places in Maharashtra, etc.

PROJECTS SECURED DURING THE YEAR

important projects secured during the year and on which work is in progress include -

Supply, installation, testing and commissioning of track work in the rail corridor from Shastri Park Depot and-workshop for Delhi Metro Rail Corporation valued at Rs. 1646.7 million.

Four laning and strengthening of Khaga-Alfahabad section from Km 115.000 to Km 158.000 of NH-2 for National Highways Authority of india valued at Rs. 1798.5 million. This project is a part of the Prime Minister's highway development program.

Construction of ring road between Magadi Road and Tumkur Road (Km, 56.70 to 62.20) for Bangalore Development Authority valued at, Rs. 254 million.

Sub-station package associated with Kolhaur-Mapusa Transmission System for Power Grid Corporation of India Ltd. valued at Rs. 330 million.

MRTS Phase-1 Tunnel Project for Delhi Metro Rail Corporation being done as a joint venture partner with four other international construction companies. The work involves underground tunneling and the value of the total project is Rs. 16500 million, IRCON's share being 9.5%.

During the year, your company has been selected for a very prestigious work for double tracking of Ipoh - Padang Besar section on Malaysian Railways by the Malaysian Government. The Letter of Intent for this work has been received after the close of the financial year. The actual alignment is still to be finalised, costing to be done and negotiation to be conducted with the Malaysian Railways, the value of which is expected to be between USD 1.5 to USD 1.8 billion. The project is likely to commence by December 2001 and be completed in five to six years. The project will be financed through counter trade in Palm Oil Products.

PROJECTS SECURED AFTER THE CLOSE OF THE YEAR

Apart from the aforesaid Malaysian project, the following major projects have been secured after the close of the financial year.

Design, supply, installation, testing and commissioning of traction power, power supply and distribution and SCADA system including lifts and escalators for Delhi Metro Rail Corporation valued at Rs. 1440 million.

Rehabilitation of Dhaka-Syihet road project from Auskandi Junction to Sylhet rail over bridge for Roads and Highways Department of Bangladesh valued at Rs. 1436 million in joint venture with a local company. IRCON will execute 50% of the work, the value of which will be Rs. 718 million.

Supply and installation of 33/11 KV sub-station for Greater Dhaka Power Distribution Project, Phase-IV for Dhaka Electric Supply Authority (DESA), Bangladesh valued at Rs. 135 million approx.

MARKETING AND FUTURE WORKS

During 2000-2001 the Company participated in two prestigious international trade fairs in Nepal and Baghdad organised by India Trade Promotion Organisation (ITPO).

During the year 2001-2002, the focus would be on forthcoming major Railway projects in Malaysia and Iraq and also on NHAI's Highway Development programme for projects of Rs. 2000 million and above.

TECHNOLOGY ABSORPTION AND R & D

IRCON has always been keen to apply and absorb latest technology in its operations. The more significant such technologies adopted during the year are

- Use of dual gauge mono-block concrete sleepers for Jamuna Bridge Railway Link Project in Bangladesh based on design developed by RDSO, Lucknow. Such extensive use of these sleepers has not been made anywhere in the world in the past.

- Construction of reinforced earth retaining walls ranging in height from 6 m to 11 m for the construction of approaches to ROBs in Jaipur Bypass.

- For the first time, extensive use has been made of flyash instead of earth in the construction of 23 Km long six lane Noida - Greater Noida Expressway Project. Flyash is not only a much cheaper alternative but is also easily available and environment friendly.

- IRCON is to execute the work of ballast less track in the Delhi Metro in association with an Australian Company M/S MVM Rail Pty. Ltd. It is being executed at such a large scale for the first time in the country

In view of the increased emphasis on export of rolling stock IRCON has taken initiative in product development for the international market.

- IRCON is financing development of high horse power Meter Gauge dieset locomotive for the export market in association with RITES. The actual work of development is being done by Diesel Locomotive Works in association with RDSO. This loco is expected to have a good market abroad. On similar lines, the company is contemplating development of standard gauge diesel locomotive also for the export market.

- Efforts are being made to achieve in-house capabilities for complete design of Voltage Class 400 KV Grid Station for which a customized software has been developed.

- Efforts are also being made for development of software for SNCF(French Railway) based Railway Electrification design for open route sections.

PERSONNEL

Cordial and harmonious industrial relations prevailed in the company. The company has been continuously tuning its training programmes to meet organisational needs which includes intensive induction courses to the new entrants and development programmes for employees at different levels.

The company also has a liberal VRS which was availed by 35 surplus staff during the year. During the year there was marginal increase in the total number of employees due to recruitment in higher categories to meet the requirement of projects. As on 31.3.2001, IRCON has 1808 employees out of which 58 are women including 6 officers.

The Annual Day to mark the Silver Jubilee was celebrated on 28th April 2001 with great zest and enthusiasm. The Minister of State for Railways Mr. Digvijay Singh, and other dignitaries from the Ministry of Railways, Public Sector Undertakings and clients graced the function. The Minister presented awards to outstanding personnel of the Company, which was followed by a cultural programme.

IRCON has constituted a Medical Trust for the benefit of employees after their superannuation from IRCON and to provide financial assistance in the event of death of an employee while in service.

COMPLIANCES

Corporate governance

A report on the Corporate Governance disclosures including a Management Discussion and Analysis Report, as required by the listing agreement with stock exchanges is placed as Annexure-A and B respectively.

Official language

IRCON has been able to implement section 3(3) of the Official Language Act almost cent percent. Hindi workshops were organised regularly. Usage of official language on computers is also consistently growing with the use of Leap Office 2000, Indica 2000 and Akshar and other such software. IRCON has developed its web site in Hindi and sends its reports to the Government through e-mail in Hindi. Steps have also been taken for bi-lingual use of computers. IRCON's publications are bilingual.

Particulars of employees

No employee employed throughout the financial year has drawn a remuneration of Rs. 12 lakhs or more per annum or Rs. 1 lakh or more per month respectively.

Conservation of energy

Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption.

Vigilance activities

A vigilance cell headed by a Chief Vigilance Officer is functioning in the company. The vigilance activities comprise: preventive/surprise checks, investigation into complaints, replying to the objections raised by Chief Technical Examiner; vigilance clearances, induction training to new recruits and updating for other staff and officers, issuing circulars and compendiums, a close liaison with various enforcement agencies, etc.

On the instructions of CVC, vigilance awareness week was observed in Corporate Office and zonal project offices of the Company, as per schedule set by CVC in October-November 2000

(i) displaying banners/posters at prime locations,

(ii) seminars/lectures arranged in association with in-house and outside faculty.

Quality management

Quality Management System has been successfully sustained for more than five years since the company first received the ISO Certification. M/s TUV conducted surveillance audit during 2000-01 and appreciated the overall performance of the Organisation in sustaining and improving the Quality Management System.

AWARDS

The Company received the following three Export Awards from Overseas Construction Council of India (OCCI) for its performance during 1999-2000

(I) Maximum overseas construction projects secured in terms of value.

(i) Maximum foreign exchange earned and repatriated from overseas service contracts.

(iii) Second best performance in the category of maximum turnover in overseas construction projects.

The awards were presented by Mr. Arun Jaitley, Union Minister of Law, Justice and Company Affairs and Shipping, at a function held on 16th November 2000. The Company has been receiving OCCI awards for the last 15 years in succession since 1984-85 and has in all received 31 awards from OCCI.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii) that the selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company for the year ended on that date;

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, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis.

BOARD OF DIRECTORS

During April 2000 to March 2001, eight meetings of the Board of Directors were held with one meeting in the quarter ended June 2000, three meetings in the quarter ended September 2000 and two meetings each in the quarters ended December 2000 and March 2001.

The Directors who ceased to hold office during 2000-01 are :-

1. Mr. V.K.Agnihotri - From 31.5.2000 (AN) Part-time Chairman (official)

2. Mr. S.Suryanarayanan - From 30.6-2000 (AN) Part-time Director (official)

3. Prof. N.C.Nigam - From 6.2.2001 (FN) Part-time Director (non-official)

4. Ms. Ksnthi Tnpathi - From 13.2.2001 (FN) Part-time Director (official)

After the financial year, the following Directors held office/ceased to hofd office fora brief period:-

1. Mr. Kanwarjit Singh - Held office from 24.4.2001 (FN) Part-time Director (official) to 1.8.2001 (FN)

2. Mr. P.K.Wahi - Held office from 2.8.2000 (FN) to Part-time Director (official) 23.4.2001 (AN) and ceased to hold office during 24.4.2001 (FN) to 31.7.2001(AN)

The following Directors are holding offices as on the date of the report :-

1. Mr. R.N.Malhotra - From 27.6.2000 (FN) Part-time Chairman (official) onwards

2. Mr. Arm Prasada - From 16.5.1997 (FN) Managing Director onwards

3. Mr. A.K.Tandon - From 3.11.1997 (FN) Director (Projects) onwards

4. Mr. B.S.Kapur - From 17.6.1998 (FN) Director (Works) onwards

5. Mr. K.B.Verma - From 14.7.2000 (AN) Director (Finance) onwards

6. Mr. K.Wahi - From 1.8.2001 (FN) Part-time Director (official) onwards

7. Mr. Sudhir Mathur - From 2.11.1999 (FN) Part-time Director (official) onwards

8. Dr. S.A. Dave - From 8.3.1999 (FN) Part-time Director (non-official) onwards

9. Mr. P.K.Choudhury - From 8.3.1999 (FN) Part-time Director (non-official) onwards

10. Mr. S.S. Shroff - From 8.3.1999 (FN) Part-time Director(non-official) onwards

Auditors

The auditors of the Company appointed by the Government of India are:-

N.K.Bhargava & Co., New Delhi. ] Statutory Auditors U.G.Devi & Co., Mumbai ] ] SBA Associates, Kolkata ] ] A Bafna & Co., Jaipur ] ] Price Patt & Co., Chennai ] ]

Chatterjee & Chatterjee, Varanasi ] Statutory Branch Auditors Azad Zamjr & Co., ] Statutory Branch Auditors in Bangladesh. ] Bangladesh.

ACKNOWLEDGEMENT

We record our appreciation and thanks to Ministry of Railways, Ministry of External Affairs and other ministries, Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation, various banks, Embassies, Protector of Immigration, Passport Authority, Doordarshan, All india Radio and esteemed clients both in India and abroad for their continued interest in and support to the Company.

As mentioned earlier, your company has completed 25 years and is well set on the path to a quantum Jump in operations. It is in fitness of things that we humbly remember our illustrious predecessors and place our deep appreciation on record.

We also take this opportunity to record our sincere appreciation for the untiring efforts put in by the employees of the Company at all levels due to which IRCON has occupied a place of pride in the international construction arena and also earnestly call upon the members of IRCON fraternity to continue to lead the Company towards commanding heights of glory.

For and on behalf of the Board of Directors

(K.B.Verma) (Arun Prasada) Director Finance Managing Director

New Delhi 20.8.2001

Mar 31, 2000

We have pleasure in presenting the Twenty-fourth Annual Report of IRCON for the year ended 31st March, 2000.

Financial performance

The Company has recorded an all round improvement in financial performance over that of last year with substantial increase in turnover and profit before tax. The turnover has increased from Rs. 4129 million to Rs. 5373 million with nearly one-fifty (Rs. 1067 million) arising from foreign projects. Consequently, profit before tax has also increased from Rs. 402 million to Rs. 605 million. However, profit after tax shows a decline from Rs. 562 million to Rs. 463 million. The main reason for this is the write back of tax provision of Rs. 187 million in the previous year.

Some important financial indicators are shown below :-

(Rs. in Million)

1999-2000 1998-99

Turnover 5373 4129

Expenditure 4768 3727

Profit before tax 605 402

Profit after tax 463 562

Dividend 114 111

Net transfer to Reserves 336 439

Net Worth 4457 4121

Turnover includes operating income of Rs. 5034 million as against Rs. 3803 million in the previous year. Similarly, other income has also increased from Rs. 327 million to Rs. 339 million.

Foreign exchange earnings and outgo

The total foreign exchange earnings and outgo during the year has been Rs. 1073 million, and Rs. 606 million respectively resulting in a net foreign exchange earnings of Rs. 467 million as compared to total foreign exchange earnings Rs. 689 million and net foreign exchange earnings of Rs. 439 million in the previous year.

Share capital/Shareholders' fund

During the year there has been no increase in the paid-up share capital of the Company which remains at Rs. 49.49 million. Shareholders' fund has increased from Rs. 4121 million to Rs. 4457 million.

Reserves

To obtain tax benefits under the Income-tax Act, 1961, in respect of profits and gains from projects outside India, it is proposed to transfer Rs.2 million from profit and loss account to the foreign projects reserve and write back Rs. 124 million bringing the balance of foreign projects reserve to Rs. 1558 million. After such appropriation and adjustments, it is proposed to transfer a sum of Rs. 458.63 million to the general reserve which will stand at around Rs. 2850 million. The total reserves and surplus of the Company have increased from Rs. 4072 million to Rs. 4408 million.

Dividend

The Board of Directors declared, in exercise of their discretionary powers conferred by the Articles of Association of IRCON, an interim dividend @ 225% of the paid-up share capital for 1999-2000 amounting to Rs. 111.35 million which has been paid to the shareholders of the Company. The Board of Directors have also recommended a final dividend of 5% of the paid-up share capital for 1999-2000 for consideration of the shareholders. A provision of Rs. 113.83 million @ 230% of the paid-up share capital for dividend (including interim and final dividend) has been made in the Annual Accounts for 1999-2000. If approved, the cumulative dividend paid till 1999-2000 will stand at approximately Rs. 455 million.

Liquidity position

Cash position of the Company is quite satisfactory. The cash balance, including flexi deposits, has increased from Rs. 2002 million to Rs. 2964 million during the year. This includes amounts held in foreign exchange to the tune of Rs. 2386 million. All the investments of the Company are in government permitted financial instruments. The Company is examining ways and means to put the surplus funds to best possible use.

Debtors

Although the total amount of sundry debtors has increased from Rs. 1357 million to Rs. 1468 million this year, there has been significant improvement in the ratio of sundry debtors to receipts from works from 37.81% last year to 30% this year.

Operational Performance

During the year, IRCON has successfully completed one project in Nepal (Road Rehabilitation Thankot to Naubise (Km 8.50 to 24.955) and secured three contracts worth Rs. 8008 million -- one in Malaysia and two in Bangladesh.

In India, the Company has completed 17 projects and secured more than fifteen projects worth Rs. 2320 million during the year.

The Company has received two all India export awards - one each from OCCI and EEPC -- for its performance in 1998-99.

Projects abroad

The new ongoing projects are :-

Malaysia

-- Installation of track and associated ancillary supply of track materials including testing, commissioning and maintenance for the proposed Kuala Lumpur Central Station and related infrastructure work.

-- Leasing and maintenance of 25 YDM4 diesel locomotives to KTMB -- Malaysian Railways on wet leasing basis.

-- Rail ink project to Pelabuhan Tanjung Pelepas Johor; valued Rs.5205 million (new).

Bangladesh

-- Flood restoration work of roads at Nawabganj-Sonamasjid.

-- Sylhet-Tambil-Jaflong road improvement project - contract No.1 Sylhet Town to Haripur; valued Rs. 361 million (new).

-- Bangabandhu (Jamuna) bridge railway link project contract-2; valued Rs.2442 million (new).

Iran

-- Signalling project on Shahrud-Mashad section in Iran.

Projects in India

The Company has completed 17 works in India comprising construction or railway siding, housing complex, buildings, roads, flyover, MGR system, sub-station, road under bridges, airport constructions, optical fibre system, etc. which include the prestigious large valued Varanasi-Shaktinagar road project and the largest hangar in Asia for Air India at Mumbai. This apart, about fifty projects are being executed which include the following major works secured during the year :-

-- Construction of railway siding system for Simhadri Thermal Power Project (stage-I); valued at Rs. 892 million.

-- 220, 132 and 33 KV EHV sub stations (Package D) for GRIDCO, Bhubneshwar, valued at Rs. 307 million.

-- Land development/road works for new town project at Rajarhat, Calcutta; valued at Rs. 286 million.

-- Construction/reconstruction of bridges on turnkey basis in package VI in Cuddalore; valued at Rs. 189 million.

-- Three MRTS projects in Chennai; valued at Rs. 153 million.

-- Optic fibre communication system in Kharagpur-Khurda road section of South Eastern Railway; valued at Rs. 90 million.

-- Construction of approaches of flyover at Sonarpur for Calcutta Metropolitan Development Authority (CMDA); valued at Rs. 90 million.

-- Construction of station building at Srinagar (J&K), valued at Rs. 59 million.

Marketing and future works

Concerted marketing efforts have resulted in an unprecedented order book position with orders worth Rs. 10328 million during the year, highest ever for IRCON in a financial year. After the close of the year too, the Company has secured orders worth Rs. 448 million comprising a contract for design, supply, supervision of installation and commissioning of five 66.20 KV and 66.6.3 KV substations in Syria worth Rs. 392 million and a contract worth Rs. 56 million for strengthening and improving expressway for Calcutta Metropolitan Development Authority.

Development of personnel

Cordial and harmonious industrial relations prevail in the Company. The Company has been continuously tuning its training programmes to meet the organisational needs which includes intensive induction courses to the new entrants and development programmes for employees at different levels. The Company also has a liberal scheme -- VRS -- which has been availed by 195 surplus staff during the year. As on 31.3.2000, IRCON has 1785 employees out of which 59 are women including 7 women officers.

The Managing Director presented awards to outstanding personnel of the Company for meritorious services rendered by them during the year on the occasion of 24th annual day of IRCON on 28th April, 2000 in the Corporate Office of the Company.

Corporate governance

The Company has initiated steps towards Corporate governance as recommended by Kumar Mangalam Birla Committee provided in the amended listing agreement with stock exchanges which are applicable to the Company from the financial year 2001-02. The Company has constituted in April 2000 an Audit Committee of the Board of Directors comprising all the four non-official part-time directors which has already started functioning.

Compliances

1. SC/ST/OBC recruitment

Two employees belonging to SC and ST category were recruited during the year.

2. Official language

IRCON has been successful in fully implementing section 3(3) of the Official Language Act. IRCON has created its own website in Hindi and also sends its reports to the Government through E-mail. Besides, Hindi workshops are organised regularly and IRCON's publications are bilingual.

3. Particulars of employees

The particulars of employees drawing a remuneration of Rs. 6,00,000/- per annum, if employed throughout the financial year, and Rs. 50,000/- per months or more if employed for part of the year, as required by the Companies Act, 1956, and rules thereunder are given in an Annexure forming part of this Report.

4. Conservation of energy

Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption.

5. Technology absorption and R&D

IRCON continues to absorb and utilise up-to-date techniques and also adopt innovative methods in its operation; the significant ones undertaken during the year are given below :-

Cable stayed bridge at Krishnarajapuram, Bangalore.

IRCON for the first time, is constructing a cable stayed bridge at Krishnarajapuram, Bangalore, on the Bangalore-Chennai highway, with design and construction methodology sourced from BBR, Switzerland. Successful execution of this job by June 2001 would enable IRCON to bid for similar projects in future as very few Indian companies have successfully constructed such a bridge.

Air India hangar, Mumbai

IRCON accomplished an engineering feat in India by constructing aircraft maintenance hangar for Air India, at Mumbai, with a single piece roof structure, with no intermediate support, weighing 1100 M.T. This hangar is the largest of its kind in Asia. This hangar can simultaneously accommodate two Boeing-747 jets.

Launching scheme of girders of road over bridges

In case of road over bridges, the scheme of erection of RPC girders over railway track, where the alignment of the bridge is at an acute skew angle to the track, has been innovated.

Erection scheme for Gandak bridge

A unique erection scheme for the girders of road bridge over Gandak river was adopted to launch 14 spans of PRC girders, each 60 m span, supported on steel truss commensurate with the site conditions, as no intermediate support could be envisaged due to flowing water under the bridge.

Listing compliance

The annual listing fee has been paid to the Delhi and Mumbai Stock Exchanges where the shares of the Company are listed. According to the listing agreement, the Company has since achieved Y2K compliance.

Presidential Directive

Presidential directive regarding revision of IDA Scales of pay and other benefits for Board level and below Board level posts including non-unionised supervisors with effect from 1.1.1997 received in July 1999 has been implemented.

Vigilance activities

In order to maintain constant vigil in all spheres and implementation of various instructions/directions issues by Central Vigilance Commission, Administrative Ministry, Department of Public Enterprises, etc., a vigilance cell headed by a chief vigilance officer is functioning in the Company. The vigilance activities comprise : preventive/surprise checks; investigation into complaints; replying to the objections raised by chief technical examiner; vigilance clearances; induction training to new recruits and updating for other staff and officers; issuing circulars and compendiums; a close liaison with various enforcement agencies.

Computerisation

IRCON has set up its own network server to facilitate best use of internet and intranet applications for MIS including finance, tendering and project monitoring.

In-house training programmes are being conducted to update and improve the skills of employees for optimum use of computer facilities installed in IRCON.

IRCON has a web site in Hindi, and steps have also been taken for bi-lingual use of computers.

Quality management

After obtaining ISO 9002 certificate for all the operations of the Company in 1996 from TUV Beyern Sachsen, Germany, which has been revalidated in 1999 for three years, the Quality Management System of IRCON has been continuously improving. TUV have also conducted 1st and 2nd Surveillance Audit during 1999-2000 and have appreciated continuous improvements in Quality Management system in the Company.

Developments in Telecommunication

IRCON has installed a small ISP set up after obtaining all India ISP licence and plans to launch the service shortly.

During the year, IRCON was entrusted with a very prestigious project of laying an optical fibre cable (OFC) based telecom backbone along the railway track between Delhi and Mumbai on build-own-operate basis by Railways. An 21.7.1999 which provided the "right-of-way" to IRCON for this purposes. The pilot section of this project was completed during the year covering a distance of approximately 300 Kms between Gandhinagar, Ahmedabad and Surat and terminal equipment was commissioned for a distance of 140 Kms between Gandhinagar and Vadodara involving 25 stations.

However, the possibility of continuation of this pioneering and path breaking project for IRCON is remote in view of the decision of the Government of India, Ministry of Railways, to form an independent corporation for telecom purposes, and IRCON has also received a communication from Ministry of Railways not to progress further on this project and to give consent to cancel the agreement between IRCON and Ministry of Railways in this regard. In view of the unfavourable implications arising from the abrupt closing of the project, in terms of financial loss, credibility, image, and genuine commercial interests of IRCON, a representation has been made to the Ministry of Railways putting forth justification for IRCON to go ahead with the project to retain its credibility as a reputed commercial enterprise of the Government. Financial expenditure incurred so far by IRCON on this project has been about Rs. 124 million, costs for the opportunity lost having been not computed.

Loss on office space

In September 1989, IRCON was allotted 7500 squm. of office space and ancillary space for car parking and storage in NBCC Tower at 15, Bhikaiji Cama Place, New Delhi for Rs. 170 million by NBCC. By January 1991 IRCON had paid Rs. 157.3 million as per agreed schedule constituting more than 92% of total contract value followed by another Rs. 20 lakhs in July 1992 for payment to DESU. Thereafter some disputes arose between IRCON and NBCC regarding actual areas being provided, final cost, and terms of agreement leading to cancellation of allotment by NBCC in April 1996. On the direction of Committee on Disputes (COD), the disputes were referred to the Permanent Machinery of Arbitration (PMA). After hearings, an award was given 22.6.1999 upholding the action of NBCC of cancelling the provisional allotment of office space to IRCON as well as ordering forfeiture of 20% of total price i.e. Rs. 36.45 million. IRCON went on appeal to the Appellate Authority (Law Secretary, Government of India) who upheld the award of the Arbitrator but partially reversed it in favour of IRCON only in respect of the forfeiture of the said Rs. 36.45 million. IRCON then went to COD for permission to take to court and on being disallowed, requested for a review by the Appellate Authority which also was unfavourable.

As all possible avenues to save the case had been exhausted as a public sector undertaking, it has been decided to seek from NBCC the refund of Rs. 159.3 million due to IRCON in terms of the aforesaid Arbitration Award and final order of the Appellate Authority. The financial implication is that IRCON will get only the refund of actual amount paid to NBCC nearly ten years back. But, in the process, the Company has lost not only in terms of present value of the office space, if it had had possession of the same, but also in terms of interest on the amount so invested.

Awards

The Company has received the following awards :-

-- O.C.C.I. Export Award for 1998-99 from Overseas Construction Council of India for "second best performance in the category of maximum turnover in overseas construction projects". The award was presented by Mr. Nipendra Misra, Additional Secretary, Government of India, Ministry of Commerce and Industry, at a function held on 27th December 1999. The Company has been receiving OCCI awards for the last 15 years in succession since 1984-85 and has in all received 28 awards from OCCI.

-- All India Trophy for Top Exporters in the category of Merchant Exporters for outstanding contribution to engineering exports during 1998-99 from Engineering Export Promotion Council (EEPC). The award was presented by Mr. Murasoli Maran, Union Minister for Commerce and Industry, at a function held on 31st May 2000.

Board of Directors

During April 1999 to March 2000, seven meetings of the Board of Directors were held with one meeting each in the quarters ended June 1999 and March 2000, three meetings in the quarter ended September 1999, and two meetings in the quarter ended December 1999.

Mar 31, 1999

It is our privilege and pleasure to present the Twenty-third Annual Report of IRCON for the year ended 31st March, 1999.

Financial performance

The total turnover of the Company during 1998-99 is Rs. 4129 million including a contribution of Rs. 696 million from foreign projects. The profit before tax stands at Rs. 402 million. The net foreign exchange earnings have marginally increased from Rs. 435 million in 1997-98 to Rs. 439 million during the year. The net worth of the Company as on 31st March 1999 is significant at Rs. 4121 million.

Company's performance during the year is summarised below-

(Figures in Millions of Rs.)

1998-99 1997-98

Total turnover 4129 4540

Operating turnover 3803 4197

Expenditure 3384 3765

Depreciation 94 104

Operating profit 325 328

Other income 326 342

Administrative and other expenses 194 * 129

Interest and finance charges 67 35

Prior period adjustment (Net) 12 (3)

Profit before tax 402 503

Tax provision for the year 37 115

Tax provision for the earlier year/refund (197) (38)

Net profit after tax 562 426

Net foreign exchange earnings 439 ** 435

Net worth 4121 3682

* Includes Rs. 39 million towards voluntary retirement terminal benefits.

** During 1998-99 the Company has earned foreign exchange of Rs. 689 million, the foreign exchange outgo being Rs. 250 million.

Reserves

To obtain tax benefits under the Income-tax, 1961, in respect of profits and gains from projects outside India, it is proposed to transfer Rs. 160 million from profit and loss account to the foreign projects reserve and write back Rs. 110 million bringing the balance of foreign projects reserve to Rs. 1680 million. After such appropriation and adjustments, it is proposed to transfer a sum of Rs. 389 million to the general reserve which will stand at Rs. 2391 million.

Share capital

During the year there has been no increase in the paid-up share capital of the Company which remains at Rs. 49.49 million. Shareholders' fund has increased from Rs. 3682 million to Rs. 4121 million.

Dividend

The Board of Directors have recommended a dividend of 225% of the paid-up share capital for 1998-99 amounting to Rs. 111.35 million out of which Rs. 24.7 million (representing 50% of the paid up share capital) has been paid as interim dividend. With this the cumulative dividend paid till 1998-99 will stand at Rs. 341 million approximately.

Operational Performance

During the year, IRCON has successfully completed two projects abroad -- one each in Malaysia and Bangladesh -- and secured two contracts worth Rs. 200 million -- one each in Bangladesh and Malaysia.

In India, the Company has completed 22 projects and secured more than fifteen projects 'worth Rs. 4900 million during the year.

The Company has received two all India export awards - one each from OCCI and EEPC - for its performance in 1997-98.

Projects abroad

The projects completed during the year are :

Malaysia

-- Track work for rail link from South port to West port - Pulau Indah.

Bangladesh

-- Second Road Rehabilitation and maintenance project, RRMP-II Widening Contract-W4, Nawabhanj Project --Shibganj-Kansat-Sonamasjid

The new and ongoing projects are :-

Malaysia

-- Installation of track and associated ancillary supply of track materials including testing, commissioning and maintenance for the proposed Kuala Lumpur Central Station and related infrastructure work; valued Rs. 140 million (new).

-- Leasing and maintenance of 23 YDM4 Diesel locomotives to KTMB -- Malaysian Railways on wet leasing basis.

Bangladesh

-- Flood Restoration work at Nawabganj-Sonamasjid; valued Rs. 60 million (new)

Iran

-- Signalling project on Shahrud-Mashad section in Iran; valued at US$ 25 million approximately.

Projects in India

The Company has completed 22 works in India comprising construction of railway line, railway siding, doubling of track, road over bridges, runway and apron, hospital complex, staff quarters, station buildings with shopping arcades and commercial complexes, housing complex, signalling and telecommunication works including optical fibre system, etc. This apart, more than fifty projects are being executed which include the following prestigious works secured during the year :-

-- Construction of road over bridges in Maharashtra for MSRDC valued at Rs. 1000 million.

-- Construction of expressway between Noida and Greater Noida (25 Kms) for Noida Development Authority valued at Rs. 1260 million.

-- Development of Sector 47 and 48 Noida for Noida Development Authority valued at Rs. 400 million.

-- Construction of Jaipur by-pass Phase-1 connecting NH-11 and NH 8 in Rajasthan for National Highway Authority of India valued at Rs. 539 million.

-- Construction of cable stayed bridge at Bangalore for Southern Railway valued at Rs. 206 million.

-- Construction of ring road works at Bangalore for Bangalore Development Authority valued at Rs. 262 million.

-- Construction of Vadodara-Halol mad in Gujrat for Gujrat Government valued at Rs. 550 million

Marketing and future works

Focussed marketing efforts have resulted in orders worth Rs. 5100 million in India and abroad during 1998-99. Further the Company has secured, after the close of the year, a large contract for execution of new railway line in Malaysia on barter trade worth Rs. 5205 million and a road improvement project in Bangladesh worth Rs. 361 million. In India too, the Company has secured six contracts after March 1999 worth Rs. 1745 million, the important ones being --

-- Construction of railway siding system for Simhadri Thermal Power Project, NTPC, valued at Rs. 811 million.

-- 220, 132 and 33 KV EHV sub station (Package D) for GRIDCO, Bhubneshwar, valued at Rs. 307 million.

-- Construction of outer ring road between Tumkur Road and Magadi Road in Bangalore for Bangalore Development Authority, valued at Rs. 254 million.

Development of personnel

Cordial and harmonious industrial relations prevail in the Company. The Company has been continuously tuning its training programmes to meet the organisational needs which includes intensive induction courses to the new entrants and development programmes for employees at different levels. The Company also has a liberal voluntary retirement scheme which has been availed by more than 230 surplus staff.

The 23rd annual day of IRCON was celebrated on 28th April, 1999 with its characteristic zest and enthusiasm. The then Minister for Railways, Mr. Nitish Kumar, the Minister of State for Railways and Parliamentary Affairs, Mr. Ram Naik, and other dignitaries from the Ministry of Railways, public sector undertakings, clients, etc. graced the occasion. The Minister for Railways presented awards to outstanding personnel of the Company for meritorious services rendered by them for the Company, which was followed by an aesthetic cultural presentation.

IRCON continues to actively support and encourage the sporting-spirit among its employees through annual sports meet, inter-project sports and participation of its cricket team in DDCA league matches. The Company also organised two trekking tours -Shimla-Kurfi-Shimla (18 Kms), Dalhosie-Khajjiar-Dalhosie(22 Kms) for the employees.

Compliances

SC/ST/OBC recruitment

2 employees belonging to SC category were recruited during the year.

Official language

IRCON has been successful in fully implementing section 3(3) of the Official Language Act. IRCON has also created its own website in Hindi which has been highly appreciated by the Minister for Railways. Besides, Hindi workshops are organised regularly and IRCON's publications are bilingual.

Conservation of energy

Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption.

Technology absorption and R&D

IRCON continues to absorb and utilise up-to-date techniques in its operation.

Status on the Y2K preparedness level in IRCON

In accordance with the requirements of the Delhi and Mumbai Stock Exchanges where the shares of the Company are listed and the listing fee has been paid, status of Y2K compliance by the Company is given below :-

-- Risk of the Company's Year 2000 issues : The Company's Hardware/Software systems are all Y2K compliant.

-- Cost to address the Company's Year 2000 issues : The Company is having an aircraft (book value Rs. 75.55 million) A software in computer system of the aircraft wilt require some changes, the cost of which is estimated to Rs 40,000 for which necessary provision has been made in the Accounts.

-- Company's contingency plans: Not applicable presently.

Presidential Directive

Presidential directive regarding revision of IDA Scales of pay and other benefits for Board level and below Board level posts including non-unionised supervisors with effect from 1.1.1997 has been received in July 1999 for implementation which is in process.

Computerisation

Regular in-house training programmes are being conducted to update and hone the skills of employees.

Network systems are being used for cost effective communication. Client-server architecture, and work group and intranet based applications are being utilised for management information system.

Quality management

IRCON's Quality Management System continues to fully meet the requirements of the International Standard ISO 9002 which has been affirmed by re-audit by TUV of Germany who have issued a fresh certificate which is valid till February 2002. During the year, IRCON has taken measures to improve its quality system and has also redefined its Quality and Safety Policies.

Developments in Telecommunication

During 1998-99, IRCON has made noteworthy strides in the emerging field of telecommunication. IRCON secured optical fibre projects from Central Organisation for Railway Electrification for a total value of Rs. 67.4 million.

To cap it, IRCON has been entrusted with a very prestigious project of laying a Optical Fibre Communication System along the railway track between Delhi and Mumbai on Build-Own-Operate basis by Railways. The project covers 1490 route km. of Western Railway involving 271 railway stations covering the major cities of Delhi, Jaipur, Ajmer, Ahmedabad, Vadodara, Surat and Mumbai. The project is to be executed in a very tight time frame of 36 months at a total cost of Rs. 1080 million. Phase-I of the project between Gandhi Nagar and Vadodara, taken up as a pilot project, has been already commissioned and work is continuing on other sections. The contract agreement for this project has already been signed with Railway Board and the process of formation of a joint venture company as envisaged therein has been initiated. The objects of IRCON are also being expanded to include provision of full range of telecom and information technology services in future.

Awards

The Company has received the following awards :-

-- O.C.C.I. Export Award for 1997-98 from Overseas Construction Council of India for "maximum foreign business attempted". The award was presented by Mr. P.P. Prabhu, Secretary, Ministry of Commerce at a function held on 30th November 1998. The Company has been receiving OCCI awards for the last 14 years in succession since 1984-85 and has in all received 27 awards from OCCI.

-- All India Trophy for Highest Exporters 1997-98 (Turnkey Industrial Projects Exporters - Non-SSI) in the field of export from Engineering Export Promotion Council (EEPC). The award was presented by Mr. Ramakrishna Hegde, Union Minister of Commerce, on 19th June 1998.

-- Regional Top Exporters Shield for 1996-97 in the field of export from Engineering Export Promotion Council (EEPC). The award was presented by Mr. P.P. Prabhu, Secretary, Ministry of Commerce at a function held on 14th July 1999.

Board of Directors

During April 1998 to March 1999, eight meetings of the Board of Directors were held with one meeting in the quarter ended June 1998, two meetings each in the quarters ended September 1998 and March 1999, and three meetings in the quarter ended December 1998.

The directors who ceased to hold office during 1998-99 are :-

1. Mr. D.V.Sardana - From 31.7.1998 (AN) Director Finance

2. Ms. Lakshmi Puri - From 21.12.1998 (AN) Part-time Director (official)

The Company has been declared as a Miniratna public enterprise by the Government and consequently IRCON's Board has been strengthened during the year with four nonofficial part-time directors with expertise in technical, management and legal fields.

The following directors are holding offices as on the date of the report :-

1. Mr. V.K.Agnihotri - From 8.8.1997 (FN) Part-time Chairman (official) onwards

2. Mr. Arun Prasada - From 16.5.1997 (FN) Managing Director onwards

3. Mr. A.~Tandon - From 3.11.1997 (FN) Director Projects onwards

4. Mr. B.S.Kapur - From 17.6.1998 (FN) Director Works onwards

5. Mr. S.Suryanarayanan - From 24.9.1996 (FN) Part-time Director (official) onwards

6. Ms. Usha Mathur - From 14.3.1996 (FN) Part-time Director (official) onwards

7. Ms. Kanthi Tripathi - From 24.3.1999 (FN) Part-time Director (official) onwards

8. Dr. S.A.Dave - From 8.3.1999 (FN) Part-time Director (non-official) onwards

9. Prof. N.C.Nigam - From 8.3.1999 (FN) Part-time Director (non-official) onwards

10. Mr. P.K.Choudhury - From 8.3.1999 (FN) Part-time Director (non-official) onwards

11. Mr. S.S.Shroff - From 8.3.1999 (FN) Part-time Director (non-official) onwards

Auditors

The auditors of the Company appointed by the Government of India are :-

S.P.Chopra & Co., New Delhi. ] Statutory Auditors

A. Bafna & Co., Jaipur. ] ] Price Patt & Co., Chennai. ] ] Sheth & Co., Mumbai. ] Joint Branch Auditors ] Kedia & Kedia, Calcutta. ] ] Rajat Associates, Varanasi. ]

Azad Zamir & Co., ] Branch Auditor in Bangladesh. ] Bangladesh.

Mar 31, 1998

It is our privilege and pleasure to present the Twenty-second Annual Report of IRCON for the year ended 31st March, 1998.

Financial performance

The total turnover of the Company during 1997-98 is Rs. 4594 million including a contribution of Rs. 981 million from foreign projects. The profit before tax has improved considerably and stands at Rs. 503 million. The net foreign exchange earnings have marginally increased from Rs. 422 million in 1996-97 to Rs. 435 million during the year. The net worth of the Company as on 31st March 1998 is significant at Rs. 3682 million.

The comparative financial performance of the Company during the last three years is summarised below :

(Figures in Millions of Rs.)

1995-96 96-97 97-98

Total turnover 6259* 4667 4594 Operating turnover 4681 4304 4243 Expenditure 4001 3855 3657 Depreciation 108 106 104 Provision for future contingencies 290 157 318 Operating profit 282 186 164 Other net income 282 271 342 Prior period adjustment (net) 1068 (27) (3) Profit before tax 1632 430 503 Tax provision for the year 267 196 115 Tax provision for the earlier year/refund 238 (6) (38) Net profit after tax 1127 240 426 Net foreign exchange earnings 1888 422 435** Net worth 3268 3349 3682 *This comprise operating turnover : Rs. 4681 million Other income (including excess : Rs. 330 million provision written back) Prior period adjustments : Rs. 1248 million

**During 1997-98 the Company earned foreign exchange of Rs. 919 million and the foreign exchange outgo is Rs. 484 million.

Reserves

It is proposed to transfer Rs. 280 million from profit and loss account to the foreign projects reserve and write back Rs. 75 million bringing the balance of foreign projects reserve to Rs. 1630 million.

After making all provisions and transfer to and from specific reserve funds, it is proposed to transfer a sum of Rs. 127.83 million to the general reserve which now stands at Rs. 2002.39 million.

Share capital

During the year there has been no increase in paid-up share capital of the Company which remains at Rs. 49.49 million. Shareholder's fund has increased from Rs. 3349 million to Rs. 3682 million.

Dividend

The Board of Directors have recommended a dividend of 175% on the paid-up share capital for 1997-98 amounting to Rs. 86.6 million. With this the cumulative dividend paid till 1997-98 will stand Rs. 229.5 million.

Operational performance

IRCON has successfully completed three projects abroad - one each in Malaysia, Bangladesh and Nepal - and has secured on contract worth Rs. 102 million in Malaysia. In the process of execution, the Company has also secured additional work by way of variation order in Bangladesh worth Rs. 67 million approximately. In India, the Company has secured more than twenty projects worth Rs. 3655 million during the year and has completed eighteen projects. The Company received three export awards during the year.

Projects abroad

The projects completed during the year are:

Bangladesh

- Railway signaling and inter-locking work for six stations in Mymensingh-Jamalpur section.

Projects in India

The Company has completed 18 works in India which comprise railway and other works including construction of railway line, railway siding, bridges and tunnels, casting and launching of PSC box girders, signaling and telecommunication system for MGR rail system, laying and commissioning of optic fibre cable, construction of hangars, construction of clear water reservoir, real estate work, etc.

The large value contract for construction of concrete roads in Delhi-Mathura section has been completed after the close of the year. The prestigious project of improvement and strengthening of Varanasi-Shaktinagar road project is progressing as per schedule. This apart more than sixty five projects are being executed.

Future Scenario

After the close of financial year, the Company has secured seven projects worth Rs. 1937 million which include construction of flyover in Mumbai valued Rs. 269 million and construction of Jaipur by-pass phase-1 in Rajasthan valued Rs. 539 million.

Several road projects funded by World Bank and Asian Development Bank are likely to come up for tendering. IRCON has already been pre-qualified for most of these projects.

Corporate restructuring

During the year, management consultants engaged by the Company to evolve and implementable corporate plan for the Company submitted their report. IRCON has already initiated the process of implementing the corporate plan in the thrust areas of marketing, mobilisation, plant and machinery, etc. An exclusive corporate marketing cell, already created, has been strengthened for strategic marketing and steps have been taken to improve the management information system.

Development of personnel

Numerous training programmes were conducted for development of IRCON's personnel within and outside the Company. A total of 903 persons were trained against the target of 811 during 1997-98. Intensive induction training has been imparted to all new entrants for the first time.

The 22nd annual day of IRCON was celebrated on 28th April, 1998 with great zest and enthusiasm. The Minister of State for Railways and Parliamentary Affairs, Mr. Ram Naik, and other dignitaries from the Ministry of Railways, public sector undertakings, clients, etc. graced the occasion. The Minister presented awards to outstanding personnel of the Company for meritorious services rendered by them for the Company, which was followed by a kathak dance recital by the renowned Dhwani troupe of Ms. Vaswati and Mr. Krishna Mohan Misra who displayed exquisite and intricate footwork reflecting the country's classical heritage in all its splendour.

IRCON continues to actively support and encourage the sport-spirit among its employees through annual sports meet, inter-project sports and continued participation of its cricket team in DDCA league matches. Its Table Tennis Team participated in Delhi State Table Tennis Association tournaments held at Talkatora Indoor Stadium.

Compliances

1. SC/ST/OBC recruitment

20 employees belonging to SC/ST/OBC category were inducted during the year.

2. Official language

IRCON has achieved 73% in the compliance of the Official Language Act, 1963. Nearly ninety per cent of computers in the Corporate Office are bilingual. A number of manuals, agreements and proformas have been prepared in bilingual form. IRCON News is also printed in bilingual form. Apart from competitions, a table training programme has been started in order to motivate and help employees to work in Hindi.

3. Particulars of employees

The particulars of employees drawing a remuneration of Rs. 25,000/- per month or more, as required by the Companies Act, 1956, and rules thereunder are given in Annexure to this Report.

4. Conservation of energy

Within the limited scope for utilisation and saving of energy in construction contract, every effort is being made continuously for reduction of energy consumption.

5. Technology absorption and R & D

IRCON looks forward to and utilises any opportunity of developing and absorbing up-to-date techniques in its operation.

Computerisation

A special computer training drive was conducted to improve computer literacy. The latest Internet and Intranet fast communication facilities are being introduced for instant communication across corporate office and project sites for effective project management. Form based E-mail has been started on Internet for reviewing quality implementation.

Mobile computing power to executives engaged in domestic and international marketing and more desktop/ work stations have been provided to enhance office productivity and efficiency. The engineering facilities have been supplemented with 3-D drawing and design capabilities and CAD workstations.

Quality management

After achieving the rare distinction of being the first construction company from India to get ISO 9002 certificate from M/s. T.U.V. of Germany for all its project units and the entire area of operations and activities, the Company has successfully managed to sustain the Quality Management System to the satisfaction of the clients. IRCON is endeavouring continuously to improve the Quality System and implement Total Quality Management.

Awards

IRCON received the following prestigious awards during the year :

- All India Special Shield for 1996-97 in the field of export from Engineering Export Promotion Council (EEPC). The award was presented by Mr. Ramakrishna Hegde, Union Minister of Commerce, on 19th June 1998.

Mar 31, 1997

It is our privilege and pleasure to present the Twenty-first Annual Report of IRCON for the year ended 31st March, 1997.

Performance highlights : 96-97 The Company has registered an operating turnover of Rs. 4304 million during the year. The contribution of foreign projects towards this operating turnover is Rs. 967 million. Profit before tax during the year is Rs. 430 million. Net worth of the Company stands at Rs. 3349 million as on 31st March 1997.

The Company has successfully completed four projects abroad - one each in Angola, Malaysia, Nepal, and Tanzania and has secured four contracts abroad - one in Nepal and three in Malaysia to the tune of Rs. 459 million. In India IRCON secured more than fifteen projects worth Rs. 908 million during the year and has completed over ten projects. In the process of execution IRCON has also secured additional works by way of variation orders both in India and abroad worth Rs. 1175 million approximately. The Company received five export awards during the year.

Financial performance The comparative financial performance of the Company during the last three years is summarised below :-

(Figures in Millions of Rs.) 1994-95 1995-96 1996-97 Total turnover 3924 6259 4667 Operating turnover 3619 4681 * 4304 Expenditure 3220 4001 3855 Depreciation 141 108 106 Provision for future contingencies 76 290 157 Operating profit 182 282 186 Other net income 267 282 271 Prior period adjustment (Net) (35) 1068 (27) Profit before tax 414 1632 430 Tax provision for for the year 150 267 196 Tax provision for the earlier year 4 238 (6) Net profit after tax 260 1127 240 Net foreign exchange earnings 331 1888 422 Net worth 3454 3268** 3349

* This comprises operating turnover : Rs. 4681 million Other income (including excess : Rs. 330 million provision written back) Prior period adjustments : Rs. 1248 million

** During 1995-96 the Company earned foreign exchange of Rs. 2620 million and the foreign exchange outgo is Rs. 732 million.

Share capital During the year there has been no increase in the paid-up share capital of the Company which remains at Rs. 49.49 million. Shareholders' fund has increased from Rs. 3268 million to Rs. 3349 million.

Dividend The Board of Directors have recommended a dividend of 40% on the paid-up share capital for the year 1996-97 amounting to Rs. 19.8 million. With this the cumulative dividend paid till 1996-97 will stand at Rs. 143 million.

Foreign projects completed The projects completed during 1996-97 are :- - Provision of engineering support services to the United Nations peace keeping mission at Angola.

- Construction and commissioning of south chord line, Malaysia.

- Construction of pension paying office complex at Phurse, Dharan, Nepal.

- Supply of turnouts to Tanzania Railway Corporation.

Projects abroad - new and ongoing The Company has secured the following projects during 1996-97 :-

Nepal - Construction of Yatri Niwas at Janakpur Nepal, value Rs. 5.24 million.

Malaysia - Refurbishment of 12 No. Class 22 diesel electric locomotives of KTMB, Malaysian Railways, value Rs. 26.19 million.

- Performance based maintenance contract for 13 no. class 22 diesel electric locomotives of KTMB, Malaysian Railways, value Rs. 325.06 million.

- Supply and maintenance of additional 5 YDM4 diesel locomotives to KTMB - Malaysian Railways on hire basis for 2 years, value Rs. 102.65 million.

In addition, the following are being executed :-

Bangladesh - Second Road Rehabilitation and maintenance project, RRMP-II widening contract-W4, Nawabganj project - Shibganj-Kansat-Sonamasjid.

- Railway signalling and inter-locking work for six stations in Mymensingh - Jamalpur section.

Malaysia - Supply and maintenance of 10 YDM4 diesel locomotives to KTMB - Malaysian Railways on hire basis for 2 years.

Nepal - Road rehabilitation Thankot to Naubise (Km 8.50 to 24.955)

Iran - Signalling project on Ahwaz-Bandare-Imam section.

Lebanon and Italy - Engineering support services for United Nations.

Projects in India The Company is executing a number of projects of great importance to the country for railways, various public sector undertakings, state electricity boards and various authorities including state governments in the areas of electrification and sub-stations, railway siding, track laying, MGR rail system, railway bridges, optic fibre communication, hangars, runways, office, residential including hospital complexes, roads, station buildings and commercial complexes, waste water treatment, clear water reservoir etc.

Some of the large value contracts nearing completion are :

(i) Construction of concrete roads in Delhi-Mathura section; (ii) Staton buildings with commercial complexes in New Bombay. The prestigious project of improvement and strengthening of Varanasi-Shaktinagar road project valued at Rs. 1086 million is progressing as per schedule.

The Company has completed 13 works in India which include 25 KV AC electrification, supply and erection of traction sub-stations, MGR rail systems for thermal power projects, railway siding, bridges and tunnels, airport construction, buildings and complexes and provision of axle counters. The clients include Railways, PSUs like NTPC, Airport Authority, Indian Airlines, Central Coalfields Ltd., TISCO, etc.

The projects secured during 1996-97 broadly comprise: buildings including hospital construction, hostel; runways, bridges, yard modelling, doubling of track, electrification including sub-stations, optic fibre communication systems and microwave (hitech developing area which IRCON is actively pursuing) for various clients including Railways, PSUs, Hospitals, University, etc.

After the close of financial year IRCON has secured a railway work worth Rs. 400 million in the port sector for Paradip Port Trust in August 1997. In addition the Company has got 7 projects valued at Rs. 375 million.

Future scenario A thrust has been given to international marketing efforts in the transport sector, specifically in railways and highways. The Company has focussed its efforts on large value projects funded by Asian Development Bank and World Bank and has already been pre-qualified in Morocco, Indonesia, Mongolia and Brazil.

To evolve suitable marketing and other corporate strategies for IRCON to meet the challenges of ever changing business environment, the Company has engaged management consulants to evolve an implementable corporate plan for IRCON. The draft corporate plan is under finalisation.

Development of personnel Various personnel development programmes were conducted during 1996-97, namely "Motivation in adverse circumstances", "Track Technology" ,"M.D.P Special course for IRCON officers", "Total Quality Management", and "Labour Laws".

The annual day of IRCON for the year 1997 was celebrated on 28th April, 1997. It was graced by the presence of dignitaries from the Ministry of Railways, other ministries, public sector undertakings, clients, etc. The Chairman, Railway Board, who was the chief guest presented the Minister's awards to outstanding personnel of IRCON.

IRCON continues to actively support and encourage the sport-spirit among its employees through annual sports meet, inter-project sports and continued participation of its cricket team in DDCA league matches.

Compliances

1. SC/ST recruitment During 1996-97 special drive was launched to fill up the following backlog of SC/ST vacancies :-

Group No. of No. of No. of vacancies vacancies vacancies for which filled up/ not filled special drive appointment up was launched made

SC ST SC ST SC ST 'C' 8 9 - - 8 9

The posts were advertised in the Employment News and other agencies but there was not adequate response from the candidates belonging to SC/ST community. The posts are being re-advertised and special efforts being made to fill up the backlog of vacancies.

2. Particulars of employees The particulars of employees drawing a remuneration of Rs. 25,000/- per month or more, as required by the Companies Act, 1956, and rules thereunder are given in Annexure to this Report.

3. Official language The Company has made great strides towards achievement of goals of official language policy. Nearly ninety per cent of computers in the Corporate Office are bilingual. A number of manuals and agreements has been prepared in bilingual form. A table training programme has been started in order to assist employees to work in Hindi.

4. Directives No Presidential directives were received by the Company during the year.

The vigilance wing is an integral part of the organisation responsible for implementation of directives/instructions issued by Vigilance Commission, Ministry of Railways and Department of Public Enterprises. It also keeps an ever constant vigil on the activities of the Company by conducting preventive/surprise checks.

5. Conservation of energy Within the limited scope for utilisation and saving of energy in construction contracts, every effort is being made continuously for reduction of energy consumption.

6. Technology absorption and R & D IRCON looks forward to and utilises any opportunity of developing and absorbing up-to-date techniques in its operation.

Computerisation The Company is keeping pace with the advancement in information technology. For global information access and to keep track of upcoming business opportunities, INTERNET facility is available for accessing vital data for business development with various funding agencies including ADB and World Bank.

In-house computer training centre is imparting up-to-date training to officers and staff.

Quality management After achieving the rare distinction of being the first construction company from India to get ISO 9002 certificate from M/s T.U.V. of Germany for all its project units and the entire area of operations and activities of the Company, IRCON is successfully sustaining the quality management system conforming to this international standard. The ISO 9002 certificate granted by M/s S.G.S. Yarsley of U.K. for Malaysian project in January 1994 has now been revalidated for a further period of three years. IRCON is trying to continuously improve its quality management system and endeavouring to implement total quality management in the Company.

Awards IRCON has received the following prestigious awards during the year :- - Top Exporter Shield - Project Exporter (Northern Region) for 1993-94 for export excellence from Engineering Export Promotion Council (EEPC). The award was presented by Mr. Tejendra Khanna, the then Secretary to the Government of India, Ministry of Commerce, on 4th October 1996.

- All India Top Exporter Shield for 1995-96 in the field of export from Engineering Export Promotion Council (EEPC). The award was presented by Mr. B.B. Ramaiah, Minister of State for Commerce, on 18th December 1996. This is the tenth time IRCON has won this Shield from Engineering Promotion Council.

Three O.C.C.I. Export Awards for 1995-96 from Overseas Construction Council of India :

- Maximum turnover in overseas construction projects. - Maximum foreign business attempted. - Maximum foreign business secured in new areas in construction contracts.

These awards were presented by Mr. S. Sundar Secretary to the Government of India, Ministry of Transport, on 30th December 1996. The Company has been receiving OCCI awards for the last 11 years in succession since 1984-85 and has in all received 24 awards from OCCI.

Mar 31, 1996

Distinguished shareholders of IRCON,

It is our privilege and pleasure to present the twentieth annual report of IRCON for the year ended 31st March, 1996.

Performance highlights

In the last two decades the Company has made commendable strides forward and has recorded notable progress in all fields during 1995-96.

(i) Record turnover

The operating turnover for the year comprising work receipts, exchange fluctuation gain, etc. is Rs. 4681 million as against Rs. 3619 million in 1994-95. IRCON has also earned other income to the tune of Rs. 330 million mainly from interest on RBI/ECGC bonds. The prior period income primarily arising from foreign exchange fluctuation gains from Iraq projects amount to Rs. 1248 million. As a result, this year IRCON has recorded an all time high total turnover of Rs. 6259 million. The contribution of foreign projects towards the total turnover is Rs. 2646 million (42%) and that of Indian projects is Rs. 3613 million.

(ii) Record profit

IRCON has earned profit for the last nineteen years in succession, the operating profit during the year being Rs. 282 million (last year Rs. 182 million). The total profit before tax for this year is a record amount of Rs. 1632 million (last year Rs. 414 million). The tremendous enhancement in profit is mainly due to net foreign exchange fluctuation gains of Rs. 1362 million. The net foreign exchange earnings including foreign exchange gains of Iraq project during the year is Rs. 1888 million.

(iii) Excellent MOU rating

The Company has received "Excellent" rating under the Memorandum of Understanding between IRCON and Ministry of Railways for meeting its targets during 1994-95 and has achieved the targets during 1995-96 also. Thus right from 1991-92 when MOU system was introduced in IRCON by the Government of India, IRCON has been rated as "Excellent".

(iv) ISO 9002 certificate

The Company once again achieved the laudable feat of securing ISO 9002-Quality Management Certificate- this time for the company as a whole for all its operations. The Certificate has been issued on 13.03.1996 by TUV of Germany. Earlier the Company received ISO 9002 Certificate from SGS Yarsley International Certification Services Limited of U.K. for its works in Malaysia and New Bombay in the years 1994 and 1995 respectively.

IRCON is the first construction company from India to get these Certificates.

(v) Record export awards

IRCON has received a record number of six export awards and a National bridge award during the year for its outstanding performance.

(vi) Projects

The Company has completed five projects abroad- two in Malaysia and one each in Nepal, Turkey and Bangladesh. The marketing efforts have resulted in securing nine projects in six countries to the tune of Rs. 1547 million. In India IRCON has secured more than twenty projects worth Rs. 2400 million approximately during the year and has completed over ten projects. In the process of execution IRCON has also secured additional works by way of variation orders both in India and abroad.

Financial performance

The comparative financial performance of the Company during the last three years is summarised below:-

(Financial Performance figures in million Rs.)

1993-94 1994-95 1995-96

Total Turnover 3913 3924 6259*

Operating Turnover 3831 3619 4681 Expenditure 3451 3220 4001 Depreciation 160 141 108 Provision for future contingencies 71 76 290 Operating profit 149 182 282 Other Net Income 36 267 282 Prior Period Adjustment (Net) 5 (35) 1068 Profit before tax 190 414 1632 Tax provision for the year 20 150 267 Tax provision for the earlier year -- 4 238 Net profit after tax 170 260 1127 Net foreign exchange earnings 291 331 1888**

Net worth 3317 3454 3276

* This comprises operating turnover : Rs. 4681 million Other income : Rs. 330 million (Including excess provision written back) Prior period Adjustments : Rs. 1248 million

** During 1995-96 the Company has earned foreign exchange of Rs. 2620 million and the foreign exchange outgo is Rs. 732 million.

Change in accounting policies

Some of the accounting policies have been redrafted to make it more clear and some others have been changed as per requirements of accounting standards prescribed by the Institute of Chartered Accountants of India. The changed accounting policies are :-

i) A "provision" for contingency has been made in the Accounts instead of appropriating the same to the contingency reserve. This has resulted in (a) creation of provision for contingency of Rs.152 million for earlier years under prior period adjustments and (b) retrieval of Rs. 14 million relating to earlier years with corresponding increase in profit for the year to that extent.

ii) Leave travel concession has been provided on cash basis as against accrual basis in the previous year which has resulted in reduction of expenditure by Rs. 3.5 million.

Other provisions and reserves made

A provision of Rs. 299 million has been made for foreseeable losses. A provision of Rs. 22 million has also been made for maintenance of projects based on evaluation by the management on substantial completion of the projects.

It is proposed to transfer Rs. 871 million from Profit and Loss Account to the foreign projects reserve and write back Rs. 110 million bringing the balance of foreign projects reserve to Rs. 1428 million.

After making all provisions and transfer to and from specific reserve funds, it is proposed to transfer a sum of Rs. 516 million to the general reserve which now stands at Rs. 1647 million. In addition to these reserves, Foreign Exchange Fluctuation Reserve Account outside Profit & Loss Appropriation is also in operation and stands at Rs. 135 million.

Amount arising from Iraq dues

IRCON received 12.08% Government of India compensation bonds 2001 and 12% Export Credit Guarantee Corporation of India Limited bonds on 31st March, 1995, as part settlement of the deferred dues from Iraq projects. There is no market quotation available for these bonds and the Company intends to hold the same till maturity. Therefore, the bonds have been valued at cost.

As per decision taken by the Board of Directors the gains arising from the retrieval of foreign exchange fluctuation reserve pertaining to Iraq projects was not accounted for during 1994-95. However, pursuant to clarification from CBDT in May, 1996, an amount of Rs. 1234 million has been considered as foreign exchange gain on account of Iraq projects. The necessary tax payable on this amount has been accounted for.

Share capital

The authorised share capital of the Company was increased from Rs. 100 million to Rs. 250 million with the approval of the shareholders for which the President of India approval has been received in July 1996. However there has been no increase in the paid up share capital of the Company which remains at Rs. 49.49 million. Shareholders' fund has marginally decreased from Rs. 3454 million to Rs. 3268 million due to provision for contingency and back taxes on foreign exchange gains.

Dividend

The Board of Directors have recommended a record dividend of 40% on the paid-up share capital for the year 1995-96 amounting to Rs. 19.8 million. With this the cumulative dividend paid till 1995-96 will stand at Rs.123 million.

On-going foreign projects

The Company has secured the following projects in foreign countries during 1995-96, which are in progress:-

Tanzania

Supply of 100 BS 80A turnouts and accessories to Tanzania Railway Corporation, value: Rs. 27 million.

Nepal

- Construction of pension paying office complex at Dharan, value: Rs. 35 million.

- Road rehabilitation project, value: Rs. 98 million.

Bangladesh

- Railway signalling and inter-locking work for six railway stations, value: Rs. 60 million

- Second road rehabilitation and maintenance project, value Rs. 300 million.

Iran

Signalling project, value: Rs. 780 million.

Angola

Contract for provision of engineering support services to the United Nations peace keeping mission, value: Rs. 14.4 million, completed after the close of the year.

Malaysia

- Leasing of 10 additional YDM4 diesel locomotives, value: Rs. 205.5 million.

- Construction and commissioning of by pass line, value: Rs. 27.5 million.

Foreign projects completed

The projects completed during 1995-96 are:-

- Two projects namely widening of existing tunnel and widening of existing culverts in Malaysia.

- 132 KV transmission project in Nepal.

- Electrification of lines in Turkey.

- Road rehabilitation and maintenance project in Bangladesh.

Projects in India

The Company is executing a number of projects of great importance to the Country for railways, various public sector undertakings, state electricity boards and various authorities including state governments in the areas of electrification and sub stations, railway siding, track laying, MGR rail system, railway bridges, hangars, runways; office, residential including hospital complexes, roads, station buildings and commercial complexes, waste water treatment, etc.

Some of the large value contracts nearing completion are (i) Construction of concrete roads in Delhi-Mathura section and (ii) Station buildings with commercial complexes in New Bombay. One of the prestigious projects being executed is improvement and strengthening of Varanasi-Shaktinagar road project valued at Rs. 1086 million.

The projects secured during 1995-96 broadly fall in the following areas:

i) railway sidings for various authorities;

ii) railway electrification;

iii) building complexes comprising hospital, labs, residential areas, etc. These works are for various prestigious institutions like Indian Agricultural Research Institute, Pusa, New Delhi, Fisheries Education, Mumbai, Bhopal Hospital Trust, Airports Authority of India, etc.;

iv) other works like water reservoir, sheds, etc;

v) new area of optic fibre project for Central Railway.

Indian works completed

IRCON has completed three works of railway sidings for National Thermal Power Corporation and Madhya Pradesh Electricity Board; two works of 2*25 KV AC electrification; provision of optical fibre communication in Delhi area; gauge conversion between Giddalur and Nandyal of S.C. Railway; construction of high level road bridge project at Bilaspur, institutional building complex for Footwear Design and Development Institute (FDDI) at Noida and hangar for Indian Airlines at Madras. Even after close of the year the Company has completed a circle office building for Canara Bank at Chandigarh to the immense satisfaction of the clients.

Future scenario

The increasing requirement of clients for financing of the projects by bidder has resulted in dwindling of new contracts abroad and more than 65% of projects secured are in India. To offset this imbalance and increase the presence of IRCON in the international arena, joint ventures with local bhumiputra companies in Malaysia, Bangladesh, etc. are being actively pursued. Further to widen the opportunities IRCON has entered the arena of BOT/BOLT projects.

Development of personnel

To ensure development of personnel of IRCON in the right direction, the Company provides opportunity for various kinds of training-both in-house and institutional. To encourage overall growth and to ensure channelisation of various abilities of employees IRCON organises annual sports meets and annual cultural functions too. In sports IRCON cricket team has done the Company proud by its impressive performance in various championships. The Company has an active staff consultative forum to ensure harmonious industrial relations. The in-house journal "IRCON News" continues to inform the employees and clients about the Company's activities and progress.

The annual day of IRCON for the year 1996 was celebrated on 27th April, 1996. It was graced by the presence of dignitaries from the Ministry of Railways, other ministries, public sector undertakings, clients, etc. The Chairman, Railway Board who was chief guest presented the Minister's awards to IRCON's outstanding personnel.

Compliances

1. SC/ST recruitment

During the year 1995-96, a special recruitment drive to fill up following backlog in vacancies of SC/ST was launched by the Company.

No. of vacancies No. of vacancies Unfilled for which special filled/offer sent vacancies drive launched

Group SC ST SC ST SC ST

C 15 9 12 5 3 4

The unfilled vacancies are due to non-availability of suitable SC/ST candidates. However, all-out efforts are being made to fill up these vacancies.

2. Particulars of employees

The particulars of employees drawing a remuneration of Rs. 25,000/- per month or more, as required by the Companies Act, 1956, and rules thereunder are given in Annexure to this Report.

3. Official language

During the year the Company has made all round progress in the implementation of Hindi. The Company has been notified under the Official Language Act of Government of India that more than 80% of its employees have attained working knowledge of Hindi. A Parliament committee visited IRCON's corporate office and noted with appreciation the efforts of the management towards promotion of Hindi in official work.

4. Directives

Presidential directive regarding revision of pay scales of Board level posts in public enterprises has been implemented.

The vigilance cell of IRCON maintains constant vigil in all spheres of activities of the Company by surprise checks and periodical inspections.

5. Conservation of energy

Within the limited scope for utilisation of, and for saving energy, being construction contractors, every effort is being made continuously for reduction of energy consumption.

6. Technology absorption and R&D

IRCON looks forward to and utilises any opportunity of developing and absorbing up-to-date techniques in its operation. IRCON is already using 'slip form paying technique' in its Delhi-Mathura four laning project by using sophisticated machines like slip form paver and texturing and curing unit in the construction of concrete roads for the first time in the Country.

Computerisation

Bilingual software including DTP in Hindi has been successfully installed and being used to promote work in Hindi.

INTERNET facility has been set up for accessing vital data for business development with various funding agencies like ADB, World Bank, etc. to maintain international competitiveness. The Company has installed documents/imaging system for filing and preserving important documents. In-house computer training centre is also being set up with interactive training tools based on CD-ROM and multimedia facilities to impart up-to-date training to the officers and staff of the Company.

Quality management

IRCON is in the continuous process of updating its quality management systems conforming to ISO standards.

These quality systems have been audited by TUV Bayern of Germany and certified as meeting the standards laid down in ISO 9002. The certificate issued in March 1996 covers the following operations:

"Construction of railway track, highways, bridges, tunnels, workshops, aircraft hangar, MS buildings, railway electrification, S&T works and project management and servicing."

IRCON has thus achieved a rare distinction of being the first construction company from India to get the ISO 9002 certificate.

Awards

IRCON has received the following prestigious awards during the year:-

- National Export Award of Ministry of Commerce for meritorious performance in the field of export during 1992-93. The award was presented by the Hon'ble President of India on 26th August, 1995.

- Four O.C.C.I. Export Awards for the year 1994-95 from Overseas Construction Council of India:-

- Trophy for maximum foreign exchange earned and repatriated to India from overseas construction contracts.

- Trophy for maximum foreign business attempted.

- Trophy for second best in turnover in overseas construction projects.

- Certificate for maximum foreign works secured in new areas in construction contracts.

IRCON was selected in all the four categories for which awards were given by OCCI. These awards were presented by Mr. P. Chidambram, the then Hon'ble Minister of State for Commerce on 21st December 1995. The Company has been receiving OCCI awards for the last 11 years in succession since 1984-85 and has in all received 21 awards from OCCI.

- All India Top Exporter Shield for the year 1994-95 in the field of exports from Engineering Export Promotion Council (EEPC). The award was presented by Mr. P. Chidambram, the then Hon'ble Minister of State for Commerce on 7th February 1996.

- Outstanding Bridge National Award by Indian Institution of Bridge Engineers for bridge constructed in Indonesia.

Board of directors

During the period April 1995 to March 1996, five meetings of the Board of Directors were held with two meetings for the quarter ended June, 1995 and one meeting each in the balance three quarters.

The directors who ceased to hold office during 1995-96 are:

1. Mr. B.S. Agarwal, Director - From 15.9.1995 (AN)

2. Mr. G.K. Kanchan, Director - From 31.1.1996 (AN)

After the close of the year, the directors who ceased to hold office are as follows:

1. Mr. M.D. Khattar, Managing Director

- From 30.4.1996 (AN)

2. Mr. Raj Kumar, Part-time Chairman

- From 31.5.1996 (AN)

3. Mr. S.D. Jain, Managing Director/Director Projects

- From 30.6.1996 (AN)

We place on record our appreciation and thanks to them for their significant contribution to the Company during their tenure.

The following directors are holding offices as on the date of the report:-

1. Mr. M. Ravindra, Chairman - From 31.7.1996 (FN) onwards

2. Mr. D.V. Sardana, Director Finance - From 1.6.1993 (FN) onwards

3. Mr. S.K. Ray, Director Works - From 18.4.1995 (FN) onwards

4. Mr. M.M. Goyal, Director - From 14.3.1996 (FN) onwards

5. Mrs. Usha Mathur, Director - From 14.3.1996 (FN) onwards

6. Mrs. Lakshmi Puri, Director - From 18.5.1994 (FN) onwards

Change of name

The name of the Company was changed from "Indian Railway Construction Company Limited" to "Ircon International Limited" during the year with the approval of the shareholders in the previous annual general meeting.

Acknowledgement

The Board of directors could not have steered the Company towards success in its endeavours without the consistent support, guidance and suggestions received from both within and without. We record our appreciation and thankfulness to all of them, in particular, Ministry of Railways; various banks --Reserve Bank of India, EXIM Bank, State Bank of India, Export Credit and Guarantee Corporation; Embassies, Protector of Immigration, Passport Authority, Doordarshan, All India Radio; esteemed clients both in India and abroad. The employees of the Company deserve special mention and appreciation for their unstinted efforts and cooperation towards the achievement of goals and objectives of the Company.

Mar 31, 1995

It is with immense pleasure that we present the Nineteenth Annual Report of your Company for the year ended 31st March, 1995.

Performance highlights

Your company has been earning profits for the last eighteen years in succession. During this nineteenth year, the Company has scaled new heights in terms of its profit before tax which amounts to Rs. 414.50 million. The turnover has marginally increased during the year 1994-95 and stands at Rs. 3924.21 million, out of which turnover from the foreign projects is Rs. 1562.10 million representing 40% of the total turnover. The operations during the year abroad have resulted in earning a net foreign exchange of Rs. 328.57 million. The net worth of the Company which has been progressing over the years also stands at Rs. 3453.53 million as on 31st March 1995.

The Company has successfully completed a record number of ten international projects during the year and has secured a number of contracts in different countries, namely, road rehabilitation and maintenance project in Bangladesh, radio project (communication) system in Botswana, a contract for civil works for remodelling of existing buildings in Nepal, a contract for hiring including -maintenance of 11 more diesel locomotives for the Malayan Railway and a contract for widening of railway culverts and bridges in Malaysia.

ISO 9002 certificate

The Company has once again accomplished the feat of earning the prestigious ISO 9002 Certificate from SGS Yarsley International Certification Services Limited of U.K. on 16th June 1995 for construction including station building, platform shelter and allied work, multistoried building, associated electric work with plumbing, water supply, drainage and sewage work with fire protection system at Vashi, Belapur Nerul, Jui Nagar stations and Turbhe stores in New Bombay. IRCON is the first construction company from India to have been granted this certificate.

Excellent MOU rating

Apart from three export awards during the year, your Company has received "Excellent" rating under the Memorandum of Understanding between IRCON and the Ministry of Railways for meeting its targets during 1993-94 (based on audited results), and has achieved the targets during 1994-95 also. Thus right from 1991-92 when MOU system was introduced in IRCON by the Government of India, IRCON has been rated as "Excellent".

Financial performance

The comparative financial performance of your Company during the last three years is summarised below

(Figures in Million Rs.) ------------------------------------------------------------- 1992-93 1993-94 1994-95 ------------------------------------------------------------- Turnover and other income 4247.95 3913.11 3924.21

Expenditure 3787.35 3563.29 3368.53

Depreciation 166.93 160.25 141.18

Profit before tax 293.67 189.57 414.50

Taxation for the year 104.40 20.00 150.00

Taxation for the earlier year 15.24 -- 4.03

Net profit 174.03 169.57 260.47

Net foreign exchange earning (direct) 288.61 290.78 328.57

Net worth 3161.73 3317.46 3453.53 -------------------------------------------------------------

Iraq dues :

The Company has been successful in realising substantially the outstanding dues from Iraq to the tune of approx. Rs. 2325 million from RBI and ECGC in the form of Government of India Compensation Bonds and approx. Rs. 570 million through settlement of outstanding dues.

During the year there has been no increase in the paid-up share capital of the Company which remains at Rs. 49.49 million. Shareholders' fund has increased from Rs. 3317.57 million to Rs. 3453.53 million. Approval of the President of India is awaited for increase of the authorised share capital from Rs. 100 million to Rs. 250 million which has already been approved by the shareholders.

We have recommended a dividend of 25% on the paid-up share capital for the year 1994-95 amounting to Rs. 12.37 million. With this the cumulative dividend paid till 1994-95 will stand at Rs. 103.31 million.

It is proposed to transfer Rs. 160.00 million out of the current year's profit to the Foreign Projects Reserve and write back Rs. 129.00 million, thereby bringing the total to Rs. 666.86 million. It is also proposed to transfer a sum of Rs. 77.22 million to the Contingency Reserve, out of the current year's profit. In respect of completed item rate contract projects, Rs. 9.87 million credited to the Contingency Reserve in earlier years is proposed to be written back and reappropriated to General Reserve. The Contingency Reserve now stands at Rs. 152.34 million.

After making provisions for dividend, income-tax and transfer to/from the specific reserve funds, we have recommended transfer of Rs. 177.24 million to the General Reserve. This reserve now stands at Rs. 1131.29 million. In addition to above reserves, Foreign Exchange Fluctuation Reserve Account outside Profit & Loss Appropriation is also in operation.

Foreign projects

New projects

The Company has secured the following projects in foreign countries during 1994-95 and one in Tanzania thereafter:

Bangladesh

* Second road rehabilitation and maintenance project (RRM-Il) from Navaron-Satkhira, near Jessore in Bangladesh, value B.D. Taka 286 million (Rs. 225 million).

* Variation order including construction of parking area valued at Rs. 7.00 million in respect of road rehabilitation and maintenance project North West Bangladesh-Ataikula section, issued by Ministry of Communication, Roads and Highways Department, Government of Bangladesh - Dhaka.

* Additional work of bituminous asphalt concrete valued at Rs. 19.00 million awarded against road rehabilitation and maintenance project 2/3C, Bangladesh.

Botswana

Radio project (communication) system in Botswana at a value of Rs. 32 million.

Nepal

Contract for civil works for remodelling of existing buildings - B.P. Koirala Institute of Health Sciences, Dharan, Nepal at a value of Rs. 16 million, which has also been completed during the year.

Malaysia

* A contract for hiring including maintenance of 11 Nos.YDM4 diesel locomotives for the use by the Malayan Railway at a value of US$ 6.5 million (Rs. 206.70 million). All the 11 locos have been commissioned and put into satisfactory service.

* Contract for widening of railway culverts and bridges at Nilai and in Batang Benar Seremban section in Malaysia for KTM at a value of Malaysian dollars 8.65 million (Rs. 104 million).

* Variation order against double tracking project (Rawang- Seremban) at a value of Malaysian dollars 14.2 million (Rs. 170 million).

* Variation order against design, construction, completion, commissioning and maintenance of second track and rehabilitation of Port Klang railway line including spur line to Subang and Sentul in Malaysia - Package "A" at a value of Malaysian dollars 21.33 million (Rs. 255 million).

Tanzania

Contract for supply of 100 BS 80A turnouts and accessories to Tanzania Railway Corporation at a value of Rs. 26 million.

Projects under implementation overseas

In addition to the above new projects, the following are the ongoing works.

Turkey

Electrification of railway track between Sincan and Ankara.

Nepal

Duhabi-Rhantabari 132 KV transmission project in Nepal.

Malaysia

* Widening of existing tunnel No. 6 at Seremban - package "C" variation work.

* 24 YDM4 diesel locomotives supplied and put into satisfactory service so far are under maintenance.

Projects completed

The projects completed during 1994-95 are :

Saudi Arabia

Design, supply and commissioning of heavy machinery equipment for a major maintenance workshop of Saudi Railway Organisation (SRO) at Dammam, Saudi Arabia.

Bangladesh

* Road improvement project contract 1 from Daudkandi to Chandina bypass on Dhaka - Chittagong National Highway.

* Road rehabilitation and maintenance project (NW), 2/3C, from Nagarbari to Rajshai near Pabna, Bangladesh.Malaysia

* Track rehabilitation of 327 Kms on Malayan Railways.

* Turnkey doubling project between Rawang and Seremban. IRCON has received commendation from Malayan Railways (KTM) for the excellent work done on Seremban station, especially within a very short time frame.

* Design, construction, completion, commissioning and maintenance of second track and rehabilitation of Port Klang railway line including spur line to Subang and Sentul in Malaysia - Package "A".

* Supply and commissioning of 11 YDM4 diesel locomotives.

Nepal

* Reconstruction of the east-west highway section Belbari to Chuharwa Km 78 + 000 to Km 218 * 000.

* Remodelling of B.P. Koirala Institute of Health Sciences.

Indonesia

* Construction of 4 lane senen flyover in Jakarta, Indonesia.

* Construction of pramuka matraman flyover project, Jakarta, Indonesia.

Projects in India

Performance

The Company is executing a number of projects of great importance to the Country for Railways, various public sector undertakings, state electricity boards and various authorities including state governments in the areas of electrification and sub stations, railway siding, track laying, MGR rail system, railway bridges, hangars. office and residential complexes, roads, station buildings and commercial complexes, waste water treatment, etc. During the year, the turnover from the Indian Projects has been Rs. 2362.11 million. Some of the prestigious projects under execution are:

* Four laning of Delhi-Mathura section valued at more than Rs. 1200 million using modern techniques of construction of concrete roads;

* Improvement and strengthening of Varanasi-Shaktinagar road project valued at Rs. 1086 million;

* Construction of station buildings with shopping arcades and commercial complexes in New Bombay valued at more than Rs. 2000 million occupying a place of pride as IRCON's contribution in the development of New Bombay.

New projects

During the year 1994-95, the following projects worth Rs. 1383 million have been secured by the Company in India :

* Gauge conversion project between Giddalur and Nandyal section of S.C. Railway; value Rs. 750.00 million.

* Provision of railway siding for Karan Cement Ltd. on Satna Rewa section at Hindauta Ramban Station on Central Railway; value Rs. 56.00 million.

* Construction of railway siding from Khukrana to Indian Oil Corporation Limited, Phase-Il at Panipat; value Rs. 230.75 million.

* Construction of ROB across railway track near bridge No. 4 at Park Circus for Calcutta Metropolitan Development Authority; value Rs. 18.20 million.

* Construction of simultaneous reception line Kumarpur and Pathra for Farakka Super Thermal Power Project/National Thermal Power Corporation; value Rs. 18.40 million.

* Construction of road under bridges at Khejuriaghat between Farakka and Chamagroan station for Farakka Super Thermal Power Project/National Thermal Power Corporation value Rs. 19.00 million.

* Construction of super-structure in section D of Metropolitan Transport (Railways) Madras; value Rs. 100.95 million.

* Common facilities building at Madras for Air India; value Rs. 75.00 million.

* Execution of institute complex at Noida for Footwear Design and Development Institute (FDDl); value Rs. 32.50 million.

* Provision of optical fibre communication in Delhi area for Indian Railways Central Organisation for Telecom (IRCOT); value Rs. 26.00 million.

* Waste water treatment facility at Bhandup and Ghatkopar for Municipal Corporation of Greater Bombay; value Rs. 55.20 million.

After the close of the Year, the Company has secured projects worth Rs. 856 million namely

* Construction of National Agricultural Science Centre at lARI (PUSA) New Delhi.

* Construction of Central Institute of Fisheries Education (Deemed University) at Versova, Bombay.

* Construction of 3rd wing division of Mycology and Plant Pathology, Indian Agricultural Research Institute, Pusa, New Delhi.

* Welding of 60 rail panels in flash butt welding plant at Meerut (10,000 joints)

* Railway siding for Core Health Care in Gujarat.

* Construction of 25 m litre RCC clear water reservoir at Bojagutta, 'Hyderabad.

* Electrical works for off-sites/utilities for Panipat refinery project.

Works completed

The important works completed during the year are :

* Turnkey construction of railway siding and MGR for thermal power plant at Farakka.

* Construction of railway siding connecting Dhanpuri open cast mines with Amarkantak thermal power plant at Chachai.

* Construction of double line railway bridge over River Kharkai at Jamshedpur (Bihar).

* Welding of 60 rail panels in flash butt welding plant at Meerut (12,500 joints).

* Construction of high level road bridge across Hasdeo River at Korba for Special Area Development Authority (SADA) (Project Management Contract).

* Construction of elevated station building at Chepauk, Madras.

* Construction of super-structure for section B.1 for MTP (Railways), Madras.

* Construction of EMU car shed at Bandel.

* Electrification of power house sidings near Nagpur.

* Construction of power sub-stations for Panipat refinery.

* 33 KV & 11 KV sub-stations and construction power supply arrangement for lOC at Panipat Refinery.

Work completed after the year:

* Construction of hangar for Indian Airlines at Madras.

Marketing efforts-future scenario

To sustain and grow in the post liberalisation milieu, in India, the Company has started bidding for projects under build- operate-transfer (BOT), build-own-Iease-transfer (BOLT), build-own-operate-transfer (BOOT) basis mainly in the areas of surface transport, power sector, etc. and for development projects.

In the international arena efforts are on to explore new geographical areas like Iran, Laos, African countries, etc. for the possibility of entering into joint ventures for securing new projects.

Awards

Your Company had been recipient of the following prestigious awards during the year :

* 0.C.C.l. Export Awards for the year 1993-94 from OverseasConstruction Council of India for :

a) Maximum turnover in overseas construction projects and

b) Second best in the category of maximum foreign exchange earned and repatriated to India from overseas construction projects.

These awards were presented by Shri Pranab Mukherjee, Hon'ble Union Commerce Minister on 10.12.1994. The Company has been receiving OCCI awards for the last 9 years in succession since 1984-85 and has in all received 17 awards from OCCI.

* Certificate of Export Excellence under Project Exports - Non-SSI for the year 1993-94 in the field of exports instituted by Engineering Export Promotion Council (EEPC). The award was presented by the Hon'ble Union Minister for Commerce Mr. Pranab Mukherjee on 1.2.1995.

Industrial relations and staff welfare

With a view to creating harmonious industrial relations, enterprise meetings with the staff representatives both in the projects and at the corporate office have been initiated. In addition, staff grievance handling machinery has also been set up at the project sites and in the corporate office where the staff can meet the project heads on nominated days and give their representations. The above measures have proved very effective and a number of staff grievances have been redressed.

This apart, IRCON's personnel enjoy several welfare benefits like financial help in acute distress, scholarships for their wards, free medical check ups, etc. The Company continues to operate the Group Savings Linked Insurance Scheme and Group Gratuity cum Life Assurance Scheme.

Development of personnel

As part of its integrated human resource development, IRCON organised both in-house and institutional training for executives as well as non-executives who actively participated therein.

Complete view of Hangar with annexe buildings constructed for Indian Airlines at Madras Airport.

IRCON employees have been actively participating in sports too. IRCON Sports Association conducted in-house inter project tournaments during the year in events like chess, table tennis, badminton and carrom for the employees. The cricket team of IRCON is one of the top 32 teams selected on the basis of their performance in DDCA "A" Division League matches during 1994-95 and has been invited for hot weather cricket tournament currently in progress. The cricket team also had distinction of representing in the HSEB cricket tournament at Hisar. IRCON's table tennis team participated in the Delhi State table tennis tournament and the all India public sector tournament at Bhilai.

Nineteenth annual day of IRCON was celebrated on 28th April, 1995 at New Delhi with great zest and enthusiasm. Shri Ashok Bhatnagar, Chairman, Railway Board and other dignitaries graced the occasion. The Chairman, Railway Board presented the Minister's awards to outstanding IRCON personnel for meritorious services rendered by them for the Company.

Earlier, on 26th April 1995, at the in-house function to mark the celebrations, IRCON's cultural team comprising employees and their family members, especially children, displayed their innate talent and regaled the hearts of one and all.

Representation of SC/ST candidates

The Company has been launching at regular intervals a special recruitment drive for SC and ST candidates to fill up all the backlog of vacancies. The Company is committed to clear the backlog by the end of this year. The vacancies are also being circulated to All India SC/ST Welfare Organisation for giving wide publicity among SC/ST candidates.

Particulars of employees

The particulars of employees drawing a remuneration of Rs. 12,000/- per month or more, as required by section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, are given in the Annexure forming part of the Report.

Computerisation

IRCON has successfully implemented networking system with on-line integrated application software at Corporate Office and its projects. All the work groups and senior executives are interconnected on the network for on-line information access.

In the field of civil engineering and highway design, computer aided designing and drafting facilities are being enhanced to achieve high level of accuracy of engineering services and quality of drawing, design and animation facilities with 3- dimensional viewing and plotting.

Computer facilities are also being used for preparation of layout plan for laying optic fibre cable and installation of communication facilities in the fields of signalling and telecommunication. Railway electrification activities are also supported with computerised sub-station layout plan preparation and OHE/SED drawings and design.

To upgrade the user awareness on efficient use of graphical user interface (GUl) and window based applications software training programmes at various levels are being organised at corporate office and projects.

Bilingual software including DPT in Hindi has been successfully installed and being used to promote works in Hindi using computers at corporate office and projects.

Quality management

To start with, quality management systems conforming to ISO-9002 were developed and implemented in IRCON's project unit in Malaysia successfully which was assessed and certified as meeting the requirements of ISO 9002. IRCON is the first construction company from India to have been granted this certificate. Subsequently, the quality systems have been developed and are being implemented in the Indian projects too, in particular, at Bombay, New Bombay, Madras, Panipat and Varanasi. IRCON has already evolved a Corporate Quality Policy and manuals with procedures supplemented by training programmes and internal quality audit for effective implementation of the quality systems.

Certification audit was conducted in March, 1995 for the New Bombay Project Unit and the project has secured the ISO 9002 Certificate from SGS Yarsley International Certification Services Limited, U.K.

Use of Hindi

The Company has been making earnest efforts to bring about effective implementation of the Official Languages Act. Various steps are being taken to promote the use of Hindi in the official work by organising training programmes, holding periodical meetings to assess the progress and holding competitions, granting various incentives and prizes and also by periodical inspections. Hindi is being used with ease in IRCON's cultural functions and trade fairs too.

Conservation of energy

Within the limited scope for utilisation of and for saving energy, being construction contractors, every effort is made continuously for reduction of energy consumption.

Technology absorption and R&D

IRCON looks forward to and utilises any opportunity of developing and absorbing up-to-date techniques in its operation. In India, IRCON has introduced 'slip form paving technique' in its Delhi-Mathura four laning project by using sophisticated machines like slip form paver and texturing and curing unit in the construction of concrete roads. This is the first time that such a technique is being used for roads in the Country.

Foreign exchange earnings and outgo

During 1994-95 the earnings in foreign exchange by your Company is Rs. 1458.53 million and the Foreign Exchange outgo is Rs. 1129.96 million.

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