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I extend a warm and hearty welcome to all of you on the 36th Annual General Meeting of Ircon. The commendable performance of your Company during the year can be judged from the audited annual accounts and other reports for the year ended 31st March 2012 which are before you.
Respected Shareholders, you have two reasons to rejoice.
Your Company has recommended a final dividend of Rs. 64 crores @ 650% of the paid–up share capital of Rs. 9.898 crores which, when declared at this AGM, coupled with the already paid interim dividend of 300%, would take the total dividend for the year 2011–12 to a record level of 950% of the paid–up share capital. The all time high total dividend amounts to Rs. 94.03 crores and is 90% higher than the dividend of Rs.49.49 crores paid for the year 2010–11.
Your Board of Directors has recommended a bonus issue of 1:1 which is proposed for approval at this AGM. It will take the paid–up share capital of the Company from Rs. 9.898 crores to Rs. 19.796 crores.
The impressive financial performance of the Company is evident from the quantum jump of 95% in profit aftertax from Rs. 240 crores in 2010–11 to Rs. 470 crores in 2011–12 and an increase of 50% in profit before tax from Rs. 401 crores in 2010–11 to Rs. 602 crores in 2011–12. The increased profit before tax has been predominantly from foreign projects. The Company deserves appreciation for enhancing its profitability in the backdrop of a modest increase of 16% in turnover from Rs. 3254 crores in 2010–11 to Rs. 3782 crores in 2011–12.
The profits of the Company have trebled in the last four years, i.e. from 2008–09 to 2011–12, as against an increase of 38% in turnover during this period. This is largely attributable to income from foreign projects which has increased from 30% to 49%.
Further, the operating income from projects in the railway sector has also been consistently increasing over the last four years from 55% in 2008–09 to 81% in 2011–12 as against the operating income from highway sector which has declined from 35% in 2008–09 to 14% in 2011–12.
During the last five years, your Company has recorded a compounded growth rate of 19.63% in terms of turnover and 40.24% in terms of profit before tax. However, there is an urgent need to enhance the order book to sustain growth.
Your Company is executing several major projects in India which includes Rail cum road bridge across river Ganga, Road Over Bridges in the State of Rajasthan and Bihar, New Rail Coach Factory at Rae Barielly, Sivok–Rangpo new rail line project, etc., apart from the Nation building projects under Pradhan Mantri Gram Sadak Yojana (PMGSY), Rashtriya Sam Vikas Yojana (RSVY), and J&K Rail Link Project. The Company has secured additional works worth Rs. 1280.29 crores during the year with respect to the Rail Coach Factory work at Rae Bareilly.
Five out of the ten foreign projects being executed by the Company are in Sri Lanka, the value of which is USD 652 million. Your Company has completed the upgradation of Colombo–Matara coastal railway line project in Sri Lanka in April 2012, six months ahead of schedule. The Company is also executing projects in Afghanistan and Ethiopia along with large value projects in Malaysia and Algeria.
Corporate Governance and Responsibilities
I would like to draw your attention to the initiatives taken by the Company in the areas of good Corporate Governance, Corporate Social Responsibility, Sustainable Development, etc.
The Company has put in place, during the year, a formal Fraud Prevention, Detection, and Control Policy along with a Whistle Blower Policy as well as a Board Charter which contains the Corporate Governance Objectives and Role& Responsibility of Directors and the Management. This apart, your Company is duly complying with the DPE Corporate Governance Guidelines.
Your Company is aware of its social responsibilities, and has spent about Rs. 2.25 crores towards CSR activities comprising development of infrastructure and other logistics in ITI Dholpur; disbursement of books, bags, fees, etc. to school students; provision of solar lights; establishment of primary health centre and providing ambulance; plantation/maintenance of park, etc., in the vicinity of Ircon's projects/offices during the year.
A report on the initiatives taken by the Company in the area of sustainable development during 2011–12 and the identified activities for 2012–13 has been attached to the Directors' Report. Recently, your Company has taken steps towards spreading awareness and training on sustainable development.
Your Company which is already certified for Quality Management System –ISO 9001:2008 is now also certified for Environmental Management System ISO 14001:2004.
Subsidiaries of Ircon
It is noteworthy that Ircon is progressively expanding.
During the year, your Company, along with Rail Land Development Authority (RLDA), has promoted a company by the name Indian Railway Stations Development Corporation Limited (IRSDC). The main object of this subsidiary of Ircon (with equity participation of 51% by Ircon and 49% by RLDA) is to develop new railway station (s) and redevelop existing ones for upgrading the level of passenger amenities to better standards. RLDA has already entrusted five stations to IRSDC for development/ re–development.
You will be glad to know that the first 100% subsidiary of your Company, Ircon Infrastructure & Services Limited (IrconISL), incorporated on 30th September 2009 for undertaking infrastructure projects and services including Multi–Functional Complexes, has earned a profit before tax of Rs. 3.82 crores and profit after tax of Rs. 2.56 crores during the year 2011–12, though no dividend has been proposed by the subsidiary.
Before I conclude, I extend, on behalf of the Board of Directors and the Company, our heartfelt thanks to our customers, Railway Board and other Ministries, Bankers, and all the shareholders for the valuable advice, support, and co–operation extended by them. We look forward to their continued support. I would also like to place on record our appreciation for the sincere and dedicated services rendered by the employees of the Company.
I am sure that your Company would continue to earn accolades in the years to come.
A. P. Mishra
Place: New Delhi