Dear Shareholders,
I am delighted to share with you the 47th Annual Report of your Company for FY
202223, which has been yet another year of impressive performance. It is a matter of
great pride that your Company has displayed overall a good performance. On a standalone
basis, your Company has clocked highest ever total turnover of Rs. 0262 Crore (previous
year Rs. 181 Crore) registering an increase of 42.90%; also on a consolidated basis, total
turnover registered a record increase of 41.71% in the history of IRCON and stood at Rs.
0750 Crore (previous year Rs. 586 Crore).
It is noteworthy to mention that your Company, which started exclusively as a railway
construction Company has acquired expertise across diversified infrastructure sectors over
the past 47 years and has also spread in spectrum of services into PMC, EPC and PPP mode.
The Company has to its credit, 128 completed projects in 25 countries across the globe and
over 400 projects in India.
CONTRACTS SECURED IN INDIA & ABROAD
The projects secured during FY 202223 includes Procurement of Design,
Installation, Testing, Commissioning and Certifying of Signalling and Telecommunication
System from Maho Junction (Including) to Anuradhapura (Excluding) in Sri Lanka under
Indian Line of Credit, establishment of Railway
Sidings along with Railway Station contagious to Mine Lease Boundary of Gere Pelma
Sector-III Coal Mine; PMC services for Signalling & 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. Your Company has more than 50 projects in its portfolio, including 5
international projects in Bangladesh, Algeria, Sri Lanka, Nepal & Myanmar. We continue
to actively participate in new projects across industry segments in the domestic front to
capture healthy profit margins. The Company is aggressively pursuing foreign projects
including projects being funded through EXIM Bank of India and projects being funded
through Multilateral funding agencies.
FINANCIAL PERFORMANCE
Financial Highlights:
On Standalone basis, apart from recording the highest ever total turnover, we have also
recorded highest ever operating turnover of Rs. 921 Crore in FY 202223, as against
Rs. 910 Crore in the previous financial year registering an increase of 43.57%. Profit
Before Tax (PBT) for FY 202223 stood at Rs. 83 Crore thereby showing an increase of
44.75% as compared to Rs. 10 Crore in the previous financial year. Profit After Tax (PAT)
stood at Rs. 77 Crore in FY 202223, registering a growth of 42.83%, as against Rs.
44 Crore in the previous financial year. The Net Worth of your company has increased by
12.05% to Rs. 178 Crore in FY 202223, as against Rs. 621 Crore in FY 202122.
During FY 202223, the Railway sector contributed around 94% to our operating
turnover and operating turnover from highway/ other sector was approximately 6%. On
a consolidated basis, the impressive financial performance of the Company is evident from
a quantum jump of 40.49% in the operating turnover during FY 2022-23, which touched Rs.
0368 Crore (previous year Rs. 380 Crore). We have achieved a consolidated Net Profit of
Rs. 65 Crore for FY 202223 as against Rs. 92 Crore in the previous year.
Furthermore, I would like to mention that the Statutory Auditors have not given any
qualification or remarks in the Auditors' Report and the Comptroller & Auditor General
of India (C&AG) has given Nil' comments for the FY 202223.
Financial results for the quarter ending 30.06.2023:
It gives me pleasure to announce that the turnover and profitability for Q1FY24
(Standalone) have improved substantially in comparison with Q1FY23. The total turnover for
this quarter has increased by 37.62% to Rs. 693.21 Crore from Rs. 956.95 Crore; the
operating turnover stood at Rs. 625.64 Crore showing an increase of 38.40% against Rs.
897.20 Crore; and the Profit After Tax (PAT) has increased by 31.29% to Rs. 61.66 Crore
from Rs. 23.13 Crore.
Dividend:
The Board of Directors declared and disbursed an interim dividend of Rs.1.80 per equity
share of a face value of Rs.2/- per share during FY 202223. In addition to interim
dividend, your company has proposed a final dividend of Rs.1.20 per share. With this the
total dividend pay-out for FY 202223 would stand at 150% on the paid-up equity share
capital, aggregating to Rs. 82.15 Crore (approx.), which is 36.31% of the post-tax profits
of FY 202223 and 5.45% of net worth of the Company as on March 31, 2023. After
declaration and payment of the proposed final dividend, the cumulative dividend paid to
shareholders up to FY 202223 would stand at Rs. 657 Crore.
Share Capital:
During the FY 202223 the paid-up share capital stood at Rs. 88.10 Crore. As on
March 31, 2023 the shareholding of the Promoter i.e. President of India stood at 73.18% of
the paid-up equity share capital. Your Company is in compliance of the Minimum Public
Shareholding (MPS) requirement in terms of the Securities Contracts (Regulation) Rules,
1957.
IRCON GROUP COMPANIES
As of now, IRCON Group comprises of eleven subsidiary companies and seven joint venture
companies, the details of which are provided in the Directors' Report.
During the year, your Company has made investment of Rs. 23.39 Crore in its subsidiary
and JV companies and for the purpose of availing of term loan facility from scheduled
commercial banks by wholly owned subsidiaries, IRCON has provided Corporate Guarantee for
five of its subsidiary companies in highway sector. The other details of investments made,
loans granted and guarantees extended by IRCON to its subsidiary and joint venture
companies during the FY 202223 forms part of the notes to the standalone financial
statements provided in the Annual Report.
RATINGS & COMMENDATIONS
In terms of Memorandum of Understanding (MoU) signed with the Ministry of Railways,
Government of India, your company has been rated as "Very Good" for year
202122. As per 2022 edition of USA's Engineering News Record (ENR), IRCON is the
only Indian PSU to make it to the list of top 250 International Contractors as well as
under top 250 Global Construction Contractors. Further, in the Business Standard BS 1000
Annual Magazine released in March 2023, IRCON has been ranked 164 in 2022 by total revenue
and ranked 7 in terms of sector performance under the Construction and
Infrastructure' Sector. IRCON is also ranked 226th in 2022 in the list of fortune India
500. Keeping up the trend of winning awards year after year, during the FY 202223,
IRCON has won Greentech Environment Award for Environment Protection; ENR
Construction World Global Award; and Dun & Bradstreet PSU & Government Summit
Aatma Nirbhar Bharat Initiatives.
CORPORATE GOVERNANCE
We are fully aware that sound principles of corporate governance are essential for long
term development & sustainability and we are operating within the ambit of these
principles. In realization of its commitment to responsible business, we follow the
highest standards of ethical business operations and best practices by adopting a robust
Corporate Governance Policy and Code of Conduct. Your Company is adhering to the
provisions contained in the SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015, the Companies Act 2013, and DPE Corporate Governance Guidelines 2010 and
other applicable regulatory requirements. A certificate on Compliance of conditions of
Corporate Governance under the SEBI Regulation and DPE Guidelines on Corporate Governance
forms part of the Directors'
Report. Your Company has secured Excellent' rating for FY 202223, on a
self-evaluation basis, in compliance of Corporate Governance for FY 202223.
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)
Our Environmental, Social, and Governance (ESG) framework is implemented throughout all
aspects of company operations at IRCON as well as its subsidiary companies. Our corporate
strategies aim to achieve steady, prudent, and sustainable growth. We adhere to the
highest standards of ethical business conduct in order to fulfil our commitment to responsible
business.
We consistently strive to make positive impact on the communities in which we operate.
As a corporate citizen we have spent Rs. 0.12 Crore towards Corporate Social
Responsibility (CSR) activities during FY 2022-23, as against the allocated budget of Rs.
0.10 Crore. Focussing on the Annual Theme Health & Nutrition' as
announced by the DPE and to give preference to the Aspirational districts under their CSR,
the CSR & Sustainability activities of the Company comprised of Conducting Health
Awareness & 66 Medical Camps in districts of Jammu & Kashmir for creating general
health awareness amongst the villagers; Establishing a Vision Centre in Aspirational
district Jaisalmer of Rajasthan for detection of visual defects among school children
thereby preventing the progress of eye disease through proper care and treatment;
Empowerment of Women through Skill Development Training Programmes" in Khora Colony,
Dist. Ghaziabad, Uttar Pradesh by M/s Bisnouli Sarvodaya Gramodyog Sewa Sansthan (BSGSS).
We have also contributed Rs. .53 Crore to Prime Minister's Citizen Assistance and Relief
in emergency Situation Fund (PM CARES Fund).
HUMAN RESOURCE, THE BIGGEST ASSET
The Company's policies have been framed in a way to embrace the most recent techniques
to continuously improve the knowledge, ability, skills, and productivity of the employees.
The philosophy that employees are the key to an organization's success has led to the
development of these policies. Employee participation is promoted as a partnership, with a
focus on their professional development, wellbeing, and growth to foster a positive work
and harmonious environment within the organization.
The Company believes that retention of well-trained, competent, and committed employees
and also expanding our workforce who can usher in new ideas, strategies and processes will
ultimately help in improving the efficiency of the Company. The total strength of our
human resources as of March 31, 2023 stood at 1341, with 257 newly employed personnel.
EMPOWERMENT THROUGH INFORMATION TECHNOLOGY
In the process of improving the levels of transparency and efficiency through
technology advancement, IRCON is in the process of upgrades to SAP S/4 Hana as Enterprise
Resource Planning (ERP) application software. SAP S/4 Hana is already being used in
Finance, Controlling and Human Resource Management functions to a large extent. It is
leading to company wide information availability, transparency and has enabled faster
decision making. 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 other initiatives of the Company
in the direction of paperless office includes e-office system from National Informatics
Centre (NIC) for approval and movement of official documents within the organization,
Government eProcurement system of NIC-GePNIC offering full transparency in public
procurement, and dedicated Video Conferencing facility on CISCO VC and Google Meet from
official e-mail ID, which enabled seamless meetings for review of the projects, meetings
of the Board, its Committees and also General meetings.
FUTURE 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. Under National
Infrastructure Pipeline (NIP), India has an investment budget of $1.4 Tn on
infrastructure, which includes 24% on renewable energy, 18% on roads & highways, 17%
on urban infrastructure, and 12% on railways. 35 Multimodal Logistics Parks (MMLPs) to be
developed at a total capital cost of $ 6.1 Bn, will cater to 50% of the freight movement.
The logistics cost in India is 13% to the GDP as compared 8% in the rest of the world,
making it difficult for Indian
IRCON intend to capitalize its advantageous position in the market both in terms of its
expertise and financial strength. Leveraging established footprint in multiple Indian
states, IRCON is committed to extending its operations internationally as part of its
overarching business expansion strategy.
exports to compete globally. The government is working to bring down logistics cost to
GDP to 7.5% from the current 13%. Indian Government launched Gati Shakti Master Plan to
integrate different modes of transportation and increase the speed of infrastructure
development in India.
A capital outlay of Rs.2.40 lakh crore (US$ 29 billion) has been provided for the
Railways in budget 2023, which is the highest ever outlay. Further, allocation for Roads
and Highways has raised to Rs.2.7 lakh Crore in Budget 2023-24. The Government is working
towards the development of a national highway network of 2 lakh kilometres by 2025.
IRCON has a long-standing reputation as one of the industry leaders in transportation
infrastructure with proven expertise in railway projects. To uphold our reputation in the
industry and to get sustained profit margins, we intend to capitalize our advantageous
position in the market both in terms of our expertise and financial strength. With the
established presence in the Indian market, IRCON further intends to cover the unexplored
areas within the country under National Infrastructure Pipeline. IRCON believes that this
will help in enhancing its portfolio with projects proposed by the Government of India
would further consolidate its position in the infrastructure sector. Our strategic focus
involves enhancing our market presence within the domestic sector by actively enhancing
our involvement in key industry segments such as Railways, Highways, Tunnels, and Bridges.
Additionally, we are engaged in High-Speed Rail projects, NCRTC project, NHAI Projects on
PPP model, renewal power project, PMC undertakings for Indian Railway ventures etc.
Leveraging our established footprint in multiple Indian states, we are committed to
extending our operations nationwide and shall continue to grow in these areas. We are
confident that various infrastructure initiatives decreed by the Government of India will
help us in fostering our future growth. We believe that we are well positioned to execute
projects under these modes due to our strong technological capabilities and sound
financial position. We will also continue to focus on international market for
opportunities in our area of strength and PPP mode of opportunities in Rail &
Roadways.
ACKNOWLEDGEMENT
I am incredibly thankful to all the predecessors and present Board Members, our
Shareholders, and all other Stakeholders for their co-operation and trust in IRCON. On
behalf of the Board of Directors, I take this opportunity to record our gratitude and
appreciation for the untiring efforts of all the past and present employees of the
Company. The Company is grateful for the valuable support received from various Ministries
such as Railways, Road Transport and Highways, 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.
Best Regards, |
Sd/- |
(Brijesh Kumar Gupta) |
Chairman & Managing Director (L/A) & CEO |
(DIN:10092756) |
Date: August 11, 2023 |
Place: New Delhi |