Dear Shareholders,
It's a matter of profound honour to present you the 48th
Annual Report of your Company and give you an insight of the performance of your Company
during FY 2023-24 and Company's new initiatives and future plans. I am delighted to share
that our financial performance has been commendable, with robust revenue growth and
enhanced profitability. On a standalone basis, your Company has achieved highest ever
total turnover of Rs 12387.85 Crore (previous year Rs 10261.63 Crore) representing an
increase of 20.72%; also on a consolidated basis, total turnover registered an increase of
19.73% and stood at Rs 12870.52 Crore (previous year Rs 10749.89 Crore).
The Company has capability and experience across diverse sectors in
infrastructure space. It has credentials in PMC, EPC as well as PPP projects.
I am delighted to share with you that considering the consistent
outstanding performance of your Company, the Union Government has upgraded the status of
your Company from Mini Ratna Category I to NAVRATNA during this financial year. With
Navratna status, comes a greater autonomy and responsibility. I am sure that your company
will scale newer heights in times to come.
CONTRACTS SECURED IN INDIA & ABROAD
During the FY 2023-24, your Company was awarded five projects in India
viz., S&T Works for Jiribam - Imphal new Railway Line Project for NFR; Composite works
in connection with Detachment free rake examination facilities (Ph-II) at Exchange Yard of
Bondamunda for SER; Engagement of Nodal Agency for establishment of Technology Centres/
Extension Centres across India for MSME; Construction of Twin Tube Uni-directional Aizawl
Bypass Tunnel of 2.5 Km in Mizoram on EPC Mode for NHIDCL; Procurement of Goods incl.
Machinery, Plant & Equipment for establishment of Technology Centres/ Extension
Centres across India for MSME.
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 profits.
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 11950.40 Crore in FY
2023-24, as against Rs 9921.20 Crore in the previous financial year registering an
increase of 20.45%. Profit Before Tax (PBT) for FY 2023-24 stood at Rs 1155.54 Crore
thereby showing an increase of 30.84% as compared to Rs 883.19 Crore in the previous
financial year. Profit After Tax (PAT) stood at Rs 862.90 Crore in FY 2023-24, registering
a growth of 11.08%, as against Rs 776.83 Crore in the previous financial year. The Net
Worth of your company has increased by 11.46% to Rs 5771.76 Crore as at 31.03.2024, as
against Rs 5178.48 Crore as at 31.03.2023.
During FY 2023-24, the Railway sector contributed around 84% to our
operating turnover and operating turnover from highway/ other sector was approximately
16%.
On a consolidated basis, stupendous financial performance of the
Company is evident from a jump of 18.93% in the operating turnover during FY 2023- 24,
which touched Rs 12330.91 Crore (previous year Rs 10367.93 Crore). We have achieved a
consolidated Net Profit of Rs 929.51 Crore for FY 2023-24 as against Rs 765.23 Crore in
the previous year registering a growth of 21.47%.
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 2023-24.
Financial results for the quarter ended 30.06.2024:
Total income for this quarter stood at Rs.2,278 crore as against
Rs.2,693 crore of Q1 of FY 2023-24; Revenue from Operations stood at Rs.2,180 crore as
against Rs.2,626 crore of Q1 of FY 2023-24. Profit After Tax (PAT) for this quarter has
increased by 9.2% to Rs 177 Crore from Rs 162 Crore of Q1 of FY 2023-24.
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 2023-24. In
addition to interim dividend, your company has proposed a final dividend of Rs.1.30 per
equity share of a face value of Rs.2/- per share. With this the total dividend pay-out for
FY 2023-24 would stand at 155% on the paid-up equity share capital, aggregating to Rs
291.56 Crore (approx.), which is 33.79% of the post-tax profits of FY 2023-24 and 5.05% of
net worth of the Company as on March 31, 2024.
After declaration and payment of the proposed final dividend, the
cumulative dividend paid to shareholders up to FY 2023-24 would stand close to Rs.300
Crore.
Share Capital:
During the FY 2023-24 the paid-up share capital stood at Rs 188.10
Crore. As on March 31, 2024 the shareholding of the Promoter i.e. President of India stood
at 65.17% of the paid-up equity share capital. 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. 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 Board's Report.
The details of investments made, loans granted and guarantees extended
by IRCON 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.
RATINGS & COMMENDATIONS
In terms of Memorandum of Understanding (MoU) signed with the Ministry
of Railways, Government of India, your company has been rated as "Excellent" for
year 2022-23.
As per 2023 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
top 250 Global Contractors. Further in the Business Standard BS 1000 Annual Magazine
released in March 2024, IRCON has been ranked 142 in 2023 by total revenue and stands at
5th position under the ‘Construction and Infrastructure' Sector. IRCON is also ranked
205th in 2023 in the list of fortune India 500.
During the FY 2023-24, IRCON has been awarded several prestigious
awards viz; (1) CE&CR Annual award for "Outstanding Tunnel Structure" for
the project "Udhampur- Srinagar - Baramulla New BG Rail line - Construction of Tunnel
T-49 on Dharam - Qazigund Section; (2) ' Governance Now' 10th PSU Award - CSR
Commitment and ‘Governance Now' 10th PSU Award for Nation Building; (3)
Dun & Bradstreet award - ESG Champions of India 2024 in the Engineering &
Construction services sector; (4) Excellence in Civil Engineering, Testing and
Commissioning of Rail Projects by Rail Analysis India; (5) Top Challenger 2022-23 award by
Construction MOU World; (6) Safety Innovation Award 2023 for implementing Innovative
Safety Management Systems. Recently, we have been nominated for Dun & Bradstreet award
for ‘Contract & Construction and Tech. Consultancy Services (Central PSU)'
category.
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 this Report.
Your Company has secured ‘Excellent' rating for FY 2023-24, on a self-evaluation
basis, in compliance of Corporate Governance for FY 2023-24.
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 11.65 Crore towards Corporate
Social Responsibility (CSR) activities during FY 2023- 24, as against the allocated budget
of Rs 11.64 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 Company Implemented many CSR Projects in 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. We have also contributed Rs 0.67 Crore towards Prime Minister's Citizen
Assistance and Relief in Emergency Situations Fund (PM CARES Fund).
HUMAN RESOURCE, THE BIGGEST ASSET
Growing with the belief that the employees hold the key to success of
an organisation, the Company's policies have been designed in a way to adopt the latest
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, 2024 stood at 1270, with 155
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.
E-Office system is deployed across IRCON as a step towards paperless office initiative
from Government of India. 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.
Your Company has formulated a Cyber Crisis Management Plan to fight
against Cyber and Social Engineering attacks. 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. Further, 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, meetings of the Board, its committees and also General meetings.
FUTURE OUTLOOK
Indian Railways is planning to implement three major economic railway
corridor programmes viz. energy, mineral and cement corridors, port connectivity corridors
and high traffic density corridors. The projects have been identified under the PM Gati
Shakti for enabling multi-modal connectivity. They will improve logistics efficiency and
reduce cost. Metro Rail and NaMo Bharat can be the catalyst for the required urban
transformation. Expansion of these systems will be supported in large cities focusing on
transit-oriented development.
In Budget 2024-25, capital investment outlay for infrastructure has
been increased by 11.11% to Rs.11.11 lakh crore, which would be 3.4% of GDP. As per the
Budget 2023-24, a capital outlay of Rs. 2.52 lakh crore and Rs.2.72 lakh crore has been
provided for the Railways and Roads & Highways, respectively, which is the highest
ever outlay.
IRCON has a long-standing reputation as one of the Industry leaders in
transportation infrastructure with proven expertise in railway and road projects. To
uphold our reputation in the industry and to get higher turnover, we intend to capitalize
our advantageous position in the market both in terms of our expertise and financial
strength. As we move ahead, we plan to build on our strategy of diversifying across
industry segments through new engines of growth.
We endeavour to enhance our portfolio with projects in the
international markets to achieve healthy profit margins offered by these projects.
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. With sound experience and solid performance, we
expect to see steady growth in our business.
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 our parent
Ministry of Railways as well as other ministries such as Road Transport and Highways,
External Affairs, Finance, Commerce, Urban Development and other government departments
i.e. our association with DPE and DIPAM under Ministry of Finance for Navratna
upgradation, MOU, OFS and other related matter, who have been very supportive and helpful.
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. Without their
active support, the Company would not have achieved its milestones during the year under
review.
Thank you all!!
Best Regards Sd/-
(Hari Mohan Gupta)
Chairman & Managing Director & CEO (DIN: 08453476)
Date: August 13, 2024
Place: New Delhi