Profit

NSE Symbol: | BSE Code: | ISIN: | Sector:

  • Add to Portfolio
  • Add to Watchlist
  • Add to Alert
  • Add to Message
Add to Portfolio
NSE
386.80
Change Change %
-1.65 -0.42%

Updated:18 Jul, 2019, 15:54 PM IST

BSE
386.50
Change Change %
-1.75 -0.45%

Updated:18 Jul, 2019, 16:01 PM IST

Disclosure in board of directors report explanatory

NOTICE FOR THE THIRTY NINTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the thirty ninth (39th) Annual General Meeting of Ircon International Limited (Ircon) will be held in the Board Meeting Room of Registered Office of Ircon situated at 3rd Floor, C–4, District Centre, Saket, New Delhi–110017, on Tuesday, the 22nd December 2015 at 1700 hours to transact the following business:–

Ordinary Business:

(1) To receive and adopt the Directors Report and the Audited Balance Sheet as on 31st March 2015 and the Statement of Profit & Loss for the year ended 31st March 2015 with the Auditors Report thereon, and pass, with or without modification, the following resolution:

RESOLVED THAT the Financial Statements for the year ended 31st March 2015 comprising Balance Sheet as at 31st March, 2015, the Statement of Profit & Loss for the year ended 31st March 2015, and Cash Flow Statement for the year ended 31st March 2015, including the Consolidated Financial Statements of Ircon and its subsidiaries/ associates/ joint ventures, along with Notes thereto, and the Auditors Reports thereon, as well as the Directors Report along with its Annexures including the Report on CSR and Sustainability Activities, Management Discussion and Analysis Report, Corporate Governance Report, Secretarial Audit report, Extract of Annual Return, Form AOC 1 and Form AOC 2, etc. as circulated and laid before the meeting, be and are hereby approved and adopted.

(2) To declare dividend for 2014–15, over and above the interim dividend already declared by the Board of Directors and paid in February 2015, and pass, with or without modification, the following resolution:

RESOLVED THAT dividend @ Rs.52.00 per share of Rs.10/– each (520% on the paid–up share capital of Rs.19.796 crores), as recommended by the Board of Directors for the year ended 31st March, 2015, be and is hereby declared in favour of the shareholders whose names appear on the Register of Members as on the date of the Annual General Meeting, which is over and above the interim dividend declared by the Board of Directors @ Rs.40.00 per share of Rs.10/– each (400% of the paid–up share capital) and paid to all the members in February 2015.

(3) To consider and if thought fit, to pass with or without modification, the following resolution in respect of Remuneration of Auditors of the Company for 2015–16:

RESOLVED THAT the Board of Directors of Ircon be and is hereby authorized to fix, based on a recommendation to be made by the Audit Committee, the remuneration including out–of–pocket expenses of the Auditors of the Company as may be appointed by the Comptroller & Auditor General of India, for audit of accounts of both domestic and foreign projects of the Company for the year 2015–16, as well as to fix the auditors expenses for their visits to foreign projects for the purpose of audit.

Special Business:

(4) To note appointment of Mr. H.K. Kala, Addl. Member Planning, Railway Board, as Part–time (Official) Director of the Company w.e.f. 2nd June 2015 and if thought fit, to pass with or without modification, the following ordinary resolution:

RESOLVED THAT in terms of the Railway Board letter no. 2004/PL/44/4 dated 26th May 2015 pursuant to Article 49 of the Articles of Association of the Company, the appointment of Mr. H. K. Kala (DIN : 07200108), Addl. Member (Planning), Railway Board, as Part–time (Official) Director of the Company w.e.f. 2nd June 2015, till he holds the post of Additional Member/ Planning or till further orders whichever is earlier, on the terms and conditions specified in said Railway Board's letter, be and is hereby noted.

(5) To approve remuneration of Cost Auditor for 2015–16 and, if thought fit, to pass, with or without modification(s), the following as an ordinary resolution:

RESOLVED THAT pursuant to the provisions of section 148 (3) read with applicable rules of the Companies (Audit and Auditors) Rules, 2014, and other applicable provision, if any (including any statutory modification(s) or re–enactment thereof, for the time being in force), a remuneration of Rs.1,70,000/– (Rupees one lakh seventy thousand only) plus service tax and out–of–pocket expenses, be and is hereby approved to be paid to M/s. Chandra Wadhwa & Co., Cost Accountants, appointed by the Board of Directors (based on the recommendations of the Audit Committee) as Cost Auditor of the Company for the financial year 2015–16 for audit of cost records maintained by the Company.

(6) To amend Memorandum of Association to increase Authorized Share Capital.

To amend the Memorandum of Association which involves substitution of Clause V and, if thought fit, to pass, with or without modification(s), the following as a special resolution:

RESOLVED THAT approval is hereby granted to substitute the existing provisions in Clause V by the provision as proposed and given below subject to the approval of the President of India in terms of the provision of the Companies Act, 2013, and the relevant rules thereunder read with Article 25 of the Articles of Association:

V. The authorized share capital of the Company is Rs. 1,00,00,00,000 (Rupees One hundred crore only) divided into 10,00,00,000 (ten crores) equity shares of Rs. 10/– (Rupees ten only) each.

(7) To amend Article of Association to increase Authorized Share Capital.

To amend the Articles of Association which involves substitution of Article 5 and, if thought fit, to pass, with or without modification(s), the following as a special resolution:

RESOLVED THAT approval is hereby granted to substitute the existing provisions in Article 5 by the provision as proposed and given below subject to the approval of the President of India in terms of the provision of the Companies Act, 2013, and the relevant rules thereunder read with Article 25 of the Articles of Association:

Article 5

Authorised Share Capital

The Authorised share capital of the Company shall be Rs. 1,00,00,00,000 (Rupees one hundred crore only) divided into 10,00,00,000 (ten crores) equity shares of Rs. 10/– (Rupees ten only) each.

BY ORDER OF THE BOARD OF DIRECTORS

Sd/–
(Sumita Sharma)
Company Secretary / Ircon

Place: New Delhi
Date: 26.11.2015 

NOTE: 

1. A MEMBER OF THE COMPANY ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY IN WRITING DULY SIGNED BY HIM/HER TO ATTEND AND VOTE INSTEAD OF HIMSELF/ HERSELF AND A PROXY NEED NOT BE A MEMBER. Form of Proxy is enclosed.

2. As per the provisions of the Companies Act, 2013, a person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company. A member holding more than 10% of the total share capital of the Company may appoint a single person as proxy and such person shall not act as a proxy for any other person or member.

3. During the period beginning 24 hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, a member would be entitled to inspect the proxies lodged at any time during the business hours of the Company provided that not less than 3 days of notice in writing of the intention to inspect is given to the Company.

4. Voting to be by show of hands in the first instance. Every member present in person shall have only one vote on a show of hands. Only when a poll is demanded under section 109, every such member shall have one vote for every share held by him/her.

5. Five members (shareholders) of the Company personally present throughout the meeting is the Quorum.

6. A brief in respect of ordinary business items 1, 2, and 3 are attached as Annexure1.

7. Explanatory statement pursuant to section 102 of the Companies Act, 2013, in respect of special business item 4, 5, 6, and 7 is at Annexure2.

8. The record date shall be the date of Annual General Meeting i.e. 22nd December 2015.

9. Route map including prominent landmark for easy location of the Registered Office (venue of the meeting) is attached as Annexure3.

10. A form of Attendance slip is attached as Annexure4.

11. Relevant documents referred to in the accompanying notice are open for inspection by the Members at the registered office of the Company on all working days during business hours up to the date of Annual General Meeting.

12. Members requested to bring their copies of Annual Report, Notice and Attendance slip duly completed and signed at the meeting

To: 1. All shareholders of the Company

2. Vinod Kumar & Associates, Chartered Accountants, and T.R. Chadha & Co., Chartered Accountants (Joint Statutory Auditors)

3. M/s. Chandra Wadhwa (Cost Auditor)

4. M/s. Vishal Agarwal (Secretarial Auditor)

5. All Directors of the Company

Annexure 1

A brief on Ordinary Business items:

Item No. 1 To receive and adopt the Directors Report and the Audited Balance Sheet as at 31st March 2015 and the Statement of Profit & Loss for the year ended 31st March 2015 with the Auditors Report thereon.

The Standalone and Consolidated Financial Statements (including Form AOC 1) along with Notes thereto, as per the Companies Act, 2013, were approved by the Board of Directors at its meetings held on 28th July 2015 and 14th August 2015 respectively. The Directors Report along with its Annexures including the Report on CSR & Sustainability Activities, Management Discussion and Analysis Report, Corporate Governance Report, Secretarial Audit Report, Extract of Annual Return, and Form AOC–2, were approved by the Board of Directors at its meeting held on 6th November 2015.

The Auditors gave their Report on the Financial Statements on 13th October 2015 which was noted by the BoD along with the management replies to the comments of the Auditors at its meeting held on 6th November 2015.

Item No. 2 To declare dividend for 2014–15.

The Board of Directors at its 215th meeting held on 28th January 2015 declared interim dividend for the year 2014–15 pursuant to its discretionary power under Article 67A of the Articles of Association @ Rs.40 per share of Rs.10/– each (400% of the paid–up share capital of Rs. 19.796 crores) amounting to Rs.79.18 crores approx. which has been paid to the shareholders of the Company in February 2015.

The Board of Directors has recommended a dividend @ Rs.52 per share of Rs.10/– each (520% of the paid–up share capital of Rs.19.796 crores) for the year 2014–15 for consideration by the members. The Company has recorded a profit before tax of Rs.844 crores and a profit after tax of Rs.579 crores during 2014–15.

The dividend to be declared at the Annual General Meeting would amount to Rs.102.94 crores approx. taking the total dividend to Rs.182.12 crores approx. for 2014–15 which works out to 31% approx. of post–tax profit. This is also in accordance with the communication dated 20th June 2003 of Ministry of Finance that profit making PSUs should declare a minimum dividend of 20% on equity or a pay–out of at least 20% of post–tax profits, whichever is higher.

As per Article 67 of the Articles of Association, the Company in general meeting may declare a dividend to be paid to the members according to their rights and interests in the profits but no dividend shall exceed the amount recommended by the Board of Directors.

Item No. 3 To consider Remuneration of Auditors of the Company for 2015–16.

According to section 177 of the Companies Act, 2013, Chapter 4 of the DPE Corporate Governance Guidelines, 2010, and sl. no. 1 of the terms of reference of the Audit Committee, the Audit Committee has to recommend to the Board of Directors fixation of audit fee, and also approval for payment to statutory auditors for any other services that may be required of them. According to section 139 (5) of the Companies Act, 2013, the auditors of a government company shall be appointed by the Comptroller & Auditor General of India (C&AG). According to section 142 (1) of the Companies Act, 2013, remuneration of the auditors of a company, which includes the expenses, any sums to be paid from the Company in respect of auditors expenses shall be fixed by the Company in general meeting or in such manner as the Company in general meeting may determine.

Therefore, on a harmonious application of the aforesaid legal provisions, every year the General Meeting has been authorizing the Board of Directors to fix, based on a recommendation to be made by the Audit Committee, the remuneration including out of pocket expenses of the auditors as well as the auditors expenses for their visits to foreign projects for the purpose of audit. Accordingly a resolution is being proposed for authorizing the Board of Directors for fixing remuneration and permissible expenses of auditors for 2015–16.

The total audit fee including out of pocket expenses, expenditure on foreign visit(s), as well as fee for audit of accounts of foreign projects during the last two years, after recommendation of Audit Committee and approval of Board of Directors, based on the criteria advised by the Audit Committee for fixing the fee of auditors, namely, turnover (volume of work load), statutory compliance requirements, geographical distribution of projects/number of projects, and inflation and market scenario, and as disclosed in the audited Financial Statement is as under:

2013–14 – Rs. 0.63 crores

2014–15 Rs. 0.42 crores

None of the Directors and Key Managerial Personnel of the Company are in any way concerned or interested, in any of the resolutions of ordinary business items.

Annexure 2

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 –– SPECIAL BUSINESS ITEMS

Item No. 4 –– To note appointment of Mr. H.K. Kala, Addl. Member Planning, Railway Board, as Part–time (Official) Director of the Company w.e.f. 2nd June 2015.

Section 152(2) of the Companies Act, 2013, provides that save as otherwise expressly provided, all the directors will be appointed in general meeting.

Mr. H. K. Kala, Additional Member (Planning), Railway Board, has been appointed as Part–time (Official) Director on the Board of Ircon w.e.f. 2nd June 2015, till he holds the post of Additional Member/ Planning or till further orders whichever is earlier, in terms of Railway Board letter no. 2004/PL/44/4 dated 26th May 2015. Mr. Kala has been appointed vice Mr. A. K. Rawal, former Additional Member (Planning), Railway Board, and Part–time (Official) Director on the Board of Ircon.

Since all the directors in Ircon [whole–time, part–time (Official/ non–official)] are appointed by the President of India through Administrative Ministry i.e. Ministry of Railways, in terms of Articles of Association for a fixed tenure, it is not possible to appoint directors at a general meeting. Therefore, the appointments made by the Ministry during the year are being put up for noting by the shareholders.

Further, section 152(6) read with section 160 provides that not less than 2/3rd of the total number of directors shall be persons whose period of office is liable to determination by retirement of directors by rotation. Out of the aforesaid 2/3rd directors, 1/3rd are liable to retire at Annual General Meeting (AGM). A director who retires as aforesaid, is eligible for re–appointment.

However, it is practically not possible to give effect to the above said provisions due to the fact that appointment of directors is done by the Government. To overcome this practical difficulty, the Company has requested the Ministry to advice as to the directors who can be made liable to retire by rotation at the ensuing AGM, and would be eligible for re–appointment.

Since these provisions are exempt for government companies in which the entire paid–up share capital is held by the Central/ State Government, therefore, the Company has also requested Ministry of Railways to take up the matter with the Ministry of Corporate Affairs so as to exempt all government companies from retiring its directors by rotation.

None of the Directors and Key Managerial Personnel of the Company are in any way concerned or interested, in this resolutions, except Mr. H. K. Kala, Addl. Member (Planning), Railway Board and Part–time (Official) Director, Ircon.

Item No. 5 –– To approve remuneration of Cost Auditor for 2015–16

In terms of rule 3(B)(10) read with rule 6 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors at its meeting held on 28th July 2015, based on the recommendation of the Audit Committee, had appointed M/s. Chandra Wadhwa & Co., Cost Accountants, as Cost Auditors of the Company for the financial year 2015–16 to conduct the audit of cost records maintained by the Company relating to its Roads and infrastructure projects corresponding to Para No (I) (a) specified in Schedule VI of the Companies Act, 2013 at a remuneration of Rs.1,70,000/– plus service tax and out–of–pocket expenses for conducting the audit.

Further, in term of section 148(3) of the Companies Act, 2013, read with Rule 14 of Companies (Audit and Auditors) Rules, 2014, remuneration to be payable to the said Cost Auditor duly approved by the Board of Directors, based on the recommendation of the Audit Committee, is placed for ratification by the shareholders.

The same remuneration was paid to Cost Auditor for the financial year 2014–15 after shareholders ratification at 38th annual general meeting held on 25th September 2015.

None of the Directors and Key Managerial Personnel of the Company are in any way concerned or interested, in this resolution.

Item No. 6 and 7 –– Amendment in Memorandum and Articles of Association.

The present proposal is to enhance the authorized share capital of the Company from Rs. 25 crores to Rs.100 crores, and consequently, to alter the Memorandum and Articles of Association of the Company containing the capital clause.

The existing subscribed and paid–up share capital of Rs.19.796 crores is being held by the President of India and his ten nominees [i.e. 99.729% shares], Indian Railway Finance Corporation Limited [i.e. 0.247% shares], and Bank of India [i.e. 0.024% shares].

The Company is a consistent profit making PSU, and has Reserve & Surplus to the tune of Rs.3,334 crores as on 31st March 2015.

Keeping in view the large reserves and surplus available with the Company and the fact that the present authorized share capital has practically been issued, subscribed, and paid–up, there is very little scope for issue of further shares by the Company.

Since the capital clause mentioning the authorized share capital of the Company is an integral part of Memorandum of Association of the Company [clause V], as well as is specified in the Articles of Association of the Company [Article 5]. Therefore, both these documents would also undergo change.

a) The existing and proposed Clause V of the Memorandum of Association is juxtaposed below for ready reference:

Existing Clause V

Proposed Clause V

The authorized share capital of the Company is Rs. 25,00,00,000 (Rupees twenty five crores only) divided into 2,50,00,000 (two crores fifty lakhs) equity shares of Rs. 10/– (Rupees ten only) each.

The authorised share capital of the Company is Rs. 1,00,00,00,000 (Rupees One hundred crore only) divided into 10,00,00,000 (ten crore) equity shares of Rs. 10/– (Rupees ten only) each.

b) The existing and proposed Article 5 of the Articles of Association is juxtaposed below for ready reference:

Existing Article 5

Proposed Article 5

Authorised Share Capital

The authorised share capital of the company shall be Rs. 25,00,00,000 (Rupees twenty five crores only) divided into 2,50,00,000 (two crores fifty lakhs) equity shares of Rs. 10/– (Rupees ten only) each.

Authorised Share Capital

The authorised share capital of the company shall be Rs. 1,00,00,00,000 (Rupees one hundred crore only) divided into 10,00,00,000 (ten crore) equity shares of Rs. 10/– (Rupees ten only) each.

None of the Directors and Key Managerial Personnel of the Company are in any way concerned or interested, in any of the resolutions.


Annexure–4

IRCON INTERNATIONAL LIMITED

Plot No. C–4, District Centre, Saket, New Delhi – 110017

CIN: U45203DL1976GOI008171

ATTENDANCE SLIP

Name of the Member/ Proxy

(In Block Letters)

:

Address of the Member/ Proxy

:

Folio No.

:

No. of Shares held

:

I certify that I am a member/ proxy for the member of the Company.

I hereby record my presence at the 39th Annual General Meeting of the Company held on Tuesday, the 22nd December 2015 at 1700 hours at C 4, District Centre, Saket, New Delhi 110017.

___________________________

Members / Proxys Signature

Note:

Please fill and sign this attendance slip and hand it over at the entrance of the meeting.


IRCON INTERNATIONAL LIMITED

CIN:U45203DL1976GOI008171

Plot No. C–4 District Center, Saket, New Delhi – 110017

Form No. MGT 11 – PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Name of the member : ____________________________________________________
Registered Address : ____________________________________________________
E–mail ID : ____________________________________________________________
Folio No. : _____________________________________________________________
 

I, being the member holding ________ shares of Ircon International Limited, hereby appoint:

1. Name          :____________________________ E–mail Id            :_________________

    Address       :____________________________ Signature           :_________________

                                                            or failing him / her

2. Name          :____________________________ E–mail Id            :_________________

    Address       :____________________________ Signature           :_________________

   

                                                            or failing him / her

3. Name          :____________________________ E–mail Id            :_________________

    Address       :____________________________ Signature           :_________________

   

as my proxy to attend and vote (on a poll) for me and on my behalf at the 39th Annual General Meeting of the company, to be held on Tuesday, the 22nd December 2015, at 1700 hours at Registered Office of Ircon or at any adjournment thereof in respect of such resolutions as are indicated below :

Resolutions:

1.   To receive and adopt the Directors’ Report and the Audited Balance Sheet as at 31st March 2015 and the Statement of Profit & Loss for the year ended 31st March 2015 with the Auditors’ Report thereon.

2.   To declare dividend for the year 2014–15.

3.   To consider Remuneration of Auditors of the Company for 2015–16.

4.   To take note of appointment of Mr. H. K. Kala, Addl. Member (Planning), Railway Board, as Part–time (Official) Director, Ircon.

5.   To approve remuneration of Cost Auditor for 2015–16.

6.   To amend Memorandum of Association to increase Authorized Share Capital.

7.   To amend Articles of Association to increase Authorized Share Capital.

Signed this ____ day of _____________ 2015

_________________________

Signature of Shareholder

_________________________

Signature of Proxy holder(s)

Note:

This form of proxy in order to be effective should be completed (i.e. duly filled, stamped, and signed) and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting, i.e. latest before 1700 hours on 18th December 2015 (19th and 20th December 2015 being Saturday and Sunday).

DIRECTORS REPORT

DISTINGUISHED SHAREHOLDERS

The Directors of your Company have pleasure in presenting their 39th Report on the affairs of the Company for the financial year 2014–15.

PERFORMANCE HIGHLIGHTS

During the financial year 2014–15, your Company achieved a total operating income of Rs. 2950 crores and profit before tax of Rs. 844 crores as compared to operating income of Rs. 4067 crores and profit before tax of Rs. 1249 crores achieved during the previous financial year.

The decline of about 27.46% in operating income is mainly on account of completion of foreign projects in Sri Lanka and Malaysia, though operating income from Indian projects has registered an increase of 7.40% from Rs.1930 crores in 2013–14 to Rs.2073 crores in 2014–15. Accordingly, profit, being a function of turnover, has also decreased.

FINANCIAL HIGHLIGHTS

Some important indicators of financial performance of the Company for the year 2014–15 vis–a–vis 2013–14 are given below:

A. Financial Performance Indicators:

(Rs. in crores)

Sl. No.

Particulars

2014–15

2013–14

Increase/

(Decrease) [in %]

1.

Total income (Gross sales)

3122

4307

(27.52)

2.

Total Operating income

2950

4067

(27.46)

3.

Operating income from Foreign Projects

877

2137

(58.95)

4.

Operating income from Indian Projects

2073

1930

7.40

5.

Profit before tax

844

1249

(32.40)

6.

Profit after tax

579

907

(36.08)

7.

Net worth

3354

2993

12.05

8.

Dividend

182.12

182.12

NIL

B. Foreign Exchange Earnings and Outgo

The Company has earned a foreign exchange of Rs. 842 crores during 2014–15 as compared to Rs. 2185 crores earned during 2013–14. The foreign exchange outgo stood at Rs. 424 crores during 2014–15 as compared to Rs. 1143 crores during 2013–14. Thus, the net foreign exchange earnings have decreased by 59.91% from Rs. 1042 crores in 2013–14 to Rs. 418 crores in 2014–15 due to completion of foreign projects as stated above.

C. Dividend

The Board of Directors (BoD) had declared in January 2015 an interim dividend of Rs. 79.184 crores @ Rs. 40/– per share i.e. 400% on the paid–up share capital of Rs. 19.796 crores, which was paid to the shareholders in February 2015. The BoD has recommended dividend @ Rs. 52 per share i.e. 520% on the paid–up share capital for declaration by the shareholders, which would amount to Rs. 102.94 crores. With this, the total dividend for the year 2014–15 would amount to Rs. 182.12 crores @ Rs.92.00 for every Rs. 10 share which works out to 31.43% of the post–tax profits of Rs. 579.39 crores. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2014–15 will stand at Rs. 939.25 crores.

D. Appropriations/ Tax Provisions/ Reserves

(Rs. in crores)

Sl. No.

Particulars

2014–15

2013–14

1

Interim Dividend

79.18

100.96

2

Proposed Final Dividend

102.94

81.16

3

Tax on Interim Dividend

15.83

17.16

4

Tax on Proposed final dividend

20.96

14.56

5

Transfer to / (from) CSR Activities Reserve

(1.71)

(1.19)

6

Transfer to General Reserve

362.19

693.85

ORDER BOOK

The Company secured works worth Rs. 5039 crores during the year 2014–15. The work load as on 31st March 2015 stood at Rs. 13293 crores as compared to Rs.12071 crores as on 31st March 2014

OPERATIONAL PERFORMANCE

A. Foreign Projects Completed:

Your Company completed following three projects in Sri Lanka during 2014–15:

1. Re–construction of railway line from Pallai to Kankesanthurai in Northern province of Sri Lanka, at a value of Rs. 815 crores.

2. Re–construction of Railway Line from Madhu Road to Talai Mannar in Northern Province of Sri Lanka, at a value of Rs. 793 crores.

3. Design, supply, installation, testing and commissioning of signaling & telecommunication system for the entire railway network in northern province of Sri Lanka (from Anuradhapura to Kankesanthurai and from Medawachchiya to Talaimannar Pier), at a value of Rs. 550 crores.

B. New / On–going Foreign projects:

Following four major projects, two in Bangladesh and one each in Algeria and Malaysia are in progress.

Bangladesh

1. Construction of 2nd Bhairab Railway Bridge with Approach Rail Lines (Lot–A) –– being undertaken through unincorporated JV between your Company and AFCONS viz. IRCON–AFCONS JV, at a total value of Rs.223 crores (Ircon's share).

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, at a value of Rs. 60 crores.

Algeria

3. Installation of a double track line (93 km) in Algeria awarded by ANESRIF, Government of Algeria, at a value of Rs. 1103 crores (USD 230 million) involving construction of second line and upgradation of existing line from Oued Sly to Yellel in Algier Oran section of Algerian Railways. The value of the contract including additional works for realisation of double line has been revised to Rs.1882 crores.

Malaysia

4. Your Company continued to operate meter gauge diesel electric locomotives on Malaysian Railway System (KTMB) as per the lease and maintenance contract at annual value of USD 6.988 million. The contract has been extended up to 31st December 2015 at a value of Rs. 84 crores.

C. Likely Foreign projects:

Concerted efforts are being made to secure contracts in Oman, Bangladesh, Malaysia, Myanmar, and Sri Lanka.

D. Projects Completed in India:

During the year 2014–15, following three projects were completed in India.

1. Construction of Multi–functional complexes (MFCs), assigned by Ircon Infrastructure & Services Limited (IrconISL), at a value of Rs. 94 crores.

2. Design, Engineering, manufacturing, supply to site, construction, installation and Commissioning of Railway siding for Kalisindh Power Project, Stage I, Jhalawar for Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN), at a value of Rs. 165 crores.

3. Consultancy work for evaluation of assets installed by DAMPEL on Airport Express Line of Delhi MRTS, for Delhi Metro Rail Corporation Limited (DMRC), at a value of Rs. 8.55 crores.

E. New Projects in India:

During 2014–15 your Company secured following major projects in India:

1. Preparation and submission of Detailed Project Report, Land Acquisition and feasibility study of East–West Corridor between Gevra Road to Pendra Road in the State of Chhattisgarh, for Chhattisgarh East–West Railway Limited at a value of Rs. 72 crores.

2. Widening and Strengthening of existing Bikaner–Phalodi section to Four–lane from Km. 4.200 to Km. 55.250 and Two–Lane with paved shoulder from Km. 55.250 to Km. 163.500 of NH–15 on BOT (Toll) basis in the State of Rajasthan, for Ircon PB Tollway Limited, at a value of Rs. 646 crores.

3. Four–laning of Shivpuri to Guna from Km 236.00 to Km 332.100 (Package–I) in the State of Madhya Pradesh to be executed on BOT (Toll) on DBFOT pattern under NHDP Phase–IV), for Ircon Shivpuri Guna Tollway Limited, at a value of Rs. 721 crores.

4. Detailed Project Report & Detailed Engineering Project Management & Construction of Coal Transportation System including associated Electrical Package for Darlipali Super Thermal Power project, Stage–I (2x800 MW) for NTPC Limited, at a value of Rs. 26 crores.

5. The work of establishment of SCADA compatibility and improving quality of consumer supply in Meerut Town, Ghaziabad Town, Moradabad Town, and Saharanpur Town to be carried out under R–APDRP Part B scheme on turnkey basis including supply of material for Paschimanchal Vidyut Vitran Nigam Limited (PVVNL), at a value of Rs. 539 crores.

6. The work of system improvement, strengthening and augmentation of distribution system to bring down AT&C losses and improve quality of consumer supply of Meerut town of Uttar Pradesh, to be carried out under RAPDRP Part–B scheme on turnkey basis including supply of material for PVVNL, at a total value of Rs. 566 crores.

7. Contract KT–4: Design, Supply, Installation, Testing and Commissioning of Ballastless Track of Standard Gauge in elevated section of Aluva to Petta corridor of Kochi Metro Rail Limited, at a value of Rs. 162 crores.

8. Contract CT–1–A Supply, Installation, Testing and Commissioning of Ballastless Track of Standard Gauge, Part–1 Corridor of sections of Mukundpur Lajpat Nagar (excluding) Line–7 in elevated and underground sections along with ballasted / ballastless tracks in Mukundpur Depot for Delhi MRTS Project of Phase–III), for DMRC, at a value of Rs. 198 crores.

9. Carrying out Topographical and Geo–Technical Survey, Preparation of Master Plan for proposed campus, planning, designing and construction of boundary wall and allied preparatory works, for the National Institute of Technology, Aizwal, Mizoram, at a value of Rs. 61 crore.

F. On–going major Projects in India:

The following are the on–going projects:

1. Design, and Construction of BG New Railway line from Dharam to Qazigund (Dharam Qazigund) Km 100.88 to Km 168 in the State of Jammu & Kashmir (J&K), including additional works, for Northern Railway, at a value of Rs. 6743 crores.

2. Setting up of new Rail Coach Factory at Rae Bareli, including additional works, for Ministry of Railways, at a value of Rs. 2297 crores.

3. Construction of Corridor–I of East Corridor between Kharsia to Dharamjaygarh in the State of Chhattisgarh, for Chhattisgarh East Railway Limited, at a value of Rs. 1430 crores.

4. Construction of steel super–structure and other ancillary work of rail cum road bridge across river Ganga at Patna, for East Central Railway, at a value of Rs. 1570 crores.

5. Sivok–Rangpo New Rail Line Project, for North Frontier Railway, at a value of Rs. 1339 crores.

6. Construction of Road Over Bridges (RoBs) in Bihar (Phase II) and Rajasthan, for Ministry of Railways and Government of Rajasthan or its various department/ local bodies respectively, at a value of Rs. 1159 crores and Rs. 507 crores respectively.

7. Construction / upgradation of Rural roads and bridges in 5 districts (Garhwa, Gumla, Ranchi, Lohardaga and Simdega) of Jharkhand PMGSY Project at a value of Rs. 525 crores for Ministry of Rural Development, Government of India and State Government of Jharkhand.

8. R–APDRP – Part B Project under Jammu province (Cluster–I, Jammu left), (Cluster–II, Jammu Right), and (Cluster–IV) (Akhnoor, Rajouri, Poonch, Udhampur, Doda, Kishtwar & Bhaderwah), for J&K Power Development Department, at a total value of Rs. 682 crores.

9. Construction of rail link between Jayanagar (India) Bijalpura (Nepal) (Gauge conversion) with extension up to Bardibas on India–Nepal Border, for East Central Railway, at a value of Rs. 447 crores.

10. Construction of Rail Link between Jogbani (Bihar) India to Biratnagar (Nepal), for North Frontier Railway, at a value of Rs. 239 crores.

11. Railway Electrification work for Banihal–Baramulla section (137.73 Kms) part of Udhampur–Srinagar–Baramulla Rail Link Project (USBRL), for Northern Railway, at a value of Rs. 144 crores.

12. Design, supply, installation, testing & commissioning of receiving–cum–traction and auxiliary main sub–station including high voltage cabling from grid sub–station and augmentation works for existing receiving sub–station under CE–6, Lot–1, for DMRC for Delhi MRTS project, Phase–III at a value of Rs. 234 crores.

13. Setting up of three electric loco sheds to home 200 three phase Locos at Bondamunda (for South Eastern Railway), Daund (for Central Railway), and Mughalsarai, (for Northern Railway), at a value of Rs. 234 crores.

14. Development of circulating area at Santragachi and essential passenger amenities and road connectivity to Kona Expressway, for South Eastern Railway, at a value of Rs. 210 crores.

15. Development of coaching terminal at Shalimar by provision of essential passenger amenities, for South Eastern Railway, at a value of Rs. 205 crores.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

A brief background on the subsidiary companies, joint venture and associate companies of Ircon along with their financials and performance is given below. Details of equity investments, loans given, and guarantees extended under section 186 of the Companies Act, 2013, to the subsidiaries, joint ventures, and associate companies are given at para E(3) under the heading 'Compliances':

A. Subsidiary Companies:

1. Ircon Infrastructure & Services Limited (IrconISL)

IrconISL, a wholly owned subsidiary of Ircon, was incorporated on 30th September 2009 and obtained a Certificate of Commencement of Business on 10th November 2009. The main object of IrconISL is to undertake infrastructure projects including planning, designing, development, improvement etc. in the field of construction of Multi Functional Complexes (MFCs), etc., to provide facilities and amenities to users of Indian Railway System, and to carry on the business of hire purchasing, leasing of all kinds of moveable and immoveable properties, to provide consultancy for all kinds of engineering projects including providing maintenance, support, and all kinds of services including social welfare measures, etc.

During 2014–15, in addition to two consultancy projects secured from Ministry of External Affairs viz. preparation of feasibility report and Detailed Project Report for Road and Bridge Projects in Myanmar, IrconISL executed the work for construction of toilets blocks (4786 toilets) under Swachh Bharat Abhiyan for PSUs like Ircon International Limited, Power Grid Corporation of India Limited, Power Finance Corporation Limited, Indian Renewable Energy Development Agency Limited, and South Eastern Coalfields Limited. The work was completed after the close of the year. Out of 23 MFCs undertaken by IrconISL, 19 MFCs have been sub–leased to operators.

Financials of IrconISL:

During the year 2014–15, IrconISL has increased its authorised share capital from Rs. 40 crores to Rs. 65 crores. Ircon has subscribed to the additional share capital of Rs. 25 crores on 31st March 2015. The shares for the said amount were allotted on 25th May 2015, after the close of the year. Therefore, share application money pending allotment, as on 31st March 2015, stood at Rs. 25 crores. The present subscribed and paid–up share capital of IrconISL stands at Rs. 65 crores.

The operating income of IrconISL during 2014–15 has been Rs. 36.39 crores and profit before tax has been Rs. 20.29 crores.

2. Indian Railway Stations Development Corporation Limited (IRSDC)

IRSDC, a subsidiary company of Ircon and JV Company with Rail Land Development Authority (RLDA), was incorporated on 12th April 2012 and it obtained a Certificate of Commencement of Business on 9th May 2012. The main object of IRSDC is to develop/ re–develop the existing / new railway station (s) which will consist of upgrading the level of passenger amenities by new constructions/ renovations including re–development of the station buildings, platform surfaces, circulating area, etc., to better standards so as to serve the need of the passengers in India, and commercial development of land/ air space. The equity participation of Ircon and RLDA in IRSDC is in the ratio of 51:49 respectively.

IRSDC has been entrusted with 6 stations located at Chandigarh, Habibganj (Bhopal), Shivaji Nagar (Pune), Bijwasan (New Delhi), Anand Vihar (Delhi), and Surat (Gujarat) for development/re–development. The projects will be implemented on Self Development Model or Third Party Development or combination of both wherein IRSDC would be granted leasehold rights of the site for Commercial Development, Right of Way, and Licence for the purpose of undertaking station development and re–development Works.

Financials of IRSDC

The authorised share capital of IRSDC is Rs. 100 crores and subscribed & paid–up share capital is Rs. 40 crores.

IRSDC is in construction phase and yet to achieve any operating turnover. During the year, IRSDC earned a profit before tax of Rs. 1.98 crores mainly on account of interest income.

3. Ircon PB Tollway Limited (IrconPBTL)

During the year 2014–15, your Company had formed another wholly–owned subsidiary by the name Ircon PB Tollway Limited (IrconPBTL) incorporated as a Special Purpose Vehicle on 30th September 2014, pursuant to conditions of award of project viz. widening and strengthening of Bikaner–Phalodi section in the State of Rajasthan, by National Highways Authority of India (NHAI). IrconPBTL has obtained approval for commencement of business from the Registrar of Companies on 14th November 2014.

The main object of IrconPBTL is to carry on the business of widening and strengthening of the existing Bikaner & Phalodi Section to four lane from 4.200 km to 55.250 km and Two Lane with paved shoulder from 55.250 km to 163.500 km of NH–15 on Build, Operate, and Transfer (BOT) (Toll) basis in the State of Rajasthan, in accordance with the terms of the Concession Agreement signed with the NHAI.

IrconPBTL has signed the concession agreement with NHAI on 7th November 2014. IrconPBTL has submitted relevant documents to NHAI to achieve financial close. Execution of the project would be taken up after intimation of appointed date by NHAI.

Financials of IrconPBTL:

The authorized share capital of IrconPBTL is Rs. 175 crores. Ircon has subscribed to the additional share capital of Rs. 85 crores on 31st March 2015. The shares for the said amount were allotted on 29th April 2015, after the close of the year. Therefore, share application money pending allotment, as on 31st March 2015, stood at Rs. 85 crores. The present subscribed and paid–up share capital of IrconPBTL stands at Rs. 90 crores. IrconPBTL is yet to start its operations.

4. Ircon Shivpuri Guna Tollway Limited (IrconSGTL)

After the close of the year, your Company has formed another wholly–owned subsidiary company by the name 'Ircon Shivpuri Guna Tollway Limited' (IrconSGTL) on 12th May 2015, pursuant to conditions of award of Shivpuri–Guna Project in the State of Madhya Pradesh by NHAI. IrconSGTL has obtained approval for commencement of business from the Registrar of Companies on 27th May 2015.

The main object of IrconSGTL is to carry on the business of four laning of Shivpuri–Guna section of NH–3 from 236.00 km to 332.1 km on Build, Operate, and Transfer (BOT) (Toll) basis on Design, Build, Finance, Operate and Transfer 'DBFOT' pattern under NHDP Phase–IV in the State of Madhya Pradesh in accordance with the terms of the Concession Agreement, signed with the NHAI, and other ancillary works relating thereto.

IrconSGTL has signed the Concession Agreement with NHAI on 15th June 2015. IrconSGTL is yet to submit relevant documents to NHAI to achieve financial close. Execution of the project would be taken up after achieving financial close and intimation of appointed date by NHAI.

Financials of IrconSGTL:

The authorized share capital of IrconSGTL is Rs. 150 crores and its subscribed and paid–up share capital is Rs. 3 crores.

B. Joint Venture Companies (JVCs) –– In India:

5. Ircon–Soma Tollway Private Limited (ISTPL)

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 in private sector), for executing a BOT project for four laning of Pimpalgaon–Dhule section of NH–3 from km 380 to km 265 in Maharashtra for NHAI.

The project was completed in 2010–11 and ISTPL is earning toll on the entire stretch of 118.158 km.

Financials of ISTPL:

The authorized share capital of ISTPL is Rs. 130 crores and its subscribed and paid–up share capital is Rs. 127.74 crores.

During the year ISTPL has achieved operating turnover of Rs. 155.34 crores and incurred a loss of Rs. 15.67 crores.

Your Company had entered into a tripartite pledge agreement with ISTPL and PNB to pledge 30% of its shareholding in ISTPL, in favour of Punjab National Bank (PNB); a non–disposal undertaking with respect to 21% of its shareholding; and to make good 50% of any shortfall in dues, if any, to PNB in the event of the termination of the Concession Agreement. The said pledge agreement and non–disposal undertaking had been, executed as 50% equity partner in ISTPL, in connection with a loan of Rs. 521.53 crores availed by ISTPL in 2011–12. The outstanding balance of this loan as on 31st March 2015 is Rs. 325.20 crores. The details regarding this loan and related undertakings have also been disclosed in Note no. 12 forming part of the Standalone Financial Statements.

6. Chhattisgarh East Railway Limited (CERL)

A joint venture company (JVC) called 'Chhattisgarh East Railway Limited' (CERL) was incorporated on 12th March 2013, with equity participation by South Eastern Coalfields Limited, Ircon, and Chhattisgarh State Industrial Development Corporation Limited [nominee of Govt. of Chhattisgarh (GoCG)] in the ratio of 64:26:10 respectively, for development of coal connectivity corridor i.e. East Corridor (length 180 Km) in the State of Chhattisgarh. CERL had obtained the Certificate for Commencement of Business on 7th May 2013.

CERL has signed concession agreement for Phase I (comprising 104 km) of the East Corridor Coal connectivity project on 12th June 2015 with Ministry of Railways. Phase I of the project is being implemented for Build, Own, Operate, and Transfer (BOOT) model for PPP projects. Physical work has started after acquisition of 64 km of land, for which about Rs. 100 crores had been invested.

Financials of CERL:

As on 31st March 2015, the authorized share capital of CERL is Rs. 5 crores and subscribed and paid–up share capital is Rs. 4.055 crores. CERL is yet to start commercial operations.

7. Chhattisgarh East–West Railway Limited (CEWRL)

A joint venture company (JVC) called 'Chhattisgarh East–West Railway Limited' (CEWRL) was incorporated on 25th March 2013, with equity participation by South Eastern Coalfields Limited, Ircon, and Chhattisgarh State Industrial Development Corporation Limited (CSIDC) (nominee of GoCG) in the ratio of 64:26:10 respectively, for development of coal connectivity corridor i.e. East West Corridor (length 122 Km) in the State of Chhattisgarh. CEWRL had obtained the Certificate for Commencement of Business on 7th May 2013.

Detailed Project Report (DPR) has been approved by the concerned Railway during July 2015, and implementation work has started.

Financials of CEWRL: 

The authorized share capital of CEWRL is Rs. 5 crores and its subscribed and paid–up share capital is Rs. 4.055 crores. CEWRL is yet to start commercial operations.

C. Joint Venture Companies (JVCs) Outside India:

8. Companhia Dos Caminhos De Ferro Da Beira (CCFB)

A joint venture company "Companhia Dos Caminhos De Ferro Da Beira" (CCFB), was incorporated in Mozambique during 2004 to execute Beira Rail Concession Project. Your Company has 25% equity stake in CCFB along with RITES having 26%, and CFM, a railway undertaking of Mozambique, having 49% equity stake.

Financials of CCFB:

Your Company's equity stake of 25% in CCFB is represented by USD 1.25 million (Rs. 5.53 crores). CCFB had been granted following loans by your Company:

Particulars

Amount as on 31.03.2015

 

(USD million)

 (in Rs.crores)

Loan

5.083

22.48

Conditional shareholders loan

15.041

66.53

Shareholders loan

1.1422

7.115

Total

21.266

96.125

The details of loan have been disclosed in Note no. 34 forming part of the Standalone Financial Statements.

Though track rehabilitation work had been completed and trains started un–interrupted movements for carrying coal, however, the Conceding Authority (Minister of Transport and Communications, Government of Mozambique) had terminated and took over the Concession in December 2011. Efforts were made for amicable settlement which did not succeed. Accordingly, CCFB had initiated arbitration proceedings against Government of Mozambique under International Chamber of Commerce Rules, and filed request for Arbitration with International Court of Arbitration. A suitable provision has been made against the investment following a conservative approach.

Efforts for amicable settlement of the dispute were also going on simultaneously and an agreement to settle the dispute has been signed with Govt. of Mozambique on 21st October 2015 as per which the Company will be able to retrieve its entire investment in installments over a period of time. Accounting adjustments will be made on receipt of amount of 1st installment.

D. Unincorporated Joint Ventures (UJVs) For projects in operation:

9. IRCON–SPSCPL

This unincorporated joint venture with S.P. Singla Constructions Private Limited (SPSCPL), having participating interest of 50:50 by Ircon and SPSCPL respectively, is for design and construction of 592 m long cable stayed major permanent bridge over river Ravi in the State of Jammu & Kashmir. The project was awarded to the UJV on 27th August 2010 at a value of Rs. 145.43 crores.

The overall progress of the project as on 31st March 2015 is 83.67% and the work is likely to be completed in December 2015.

Financials:

During the year, this UJV has achieved operating turnover of Rs. 82.33 crores and profit before tax of Rs. 6.47 crores.

10. IRCON–AFCONS JV

This unincorporated joint venture with Afcons Infrastructure Limited (Afcons), having participating interest of 53:47 by Ircon and Afcons respectively, is for Construction of 2nd Bhairab Railway Bridges with approach Rail Lines in Bangladesh. The agreement for the project was signed on 10th September 2013 at a value of BD Taka 567.17 crores.

The overall progress of the project is 48% as on 31st July 2015, and the work is likely to be completed in September 2016.

Financials:

During the year, this UJV has achieved operating turnover of Rs. 94.13 crores and profit before tax of Rs. 8.45 crores.

E. Unincorporated Joint Ventures (UJVs) –– For completed projects:

11. RICON

This unincorporated joint venture with Rites Limited (RITES) was for securing and executing contracts awarded by CCFB. The participating interest of RITES and Ircon in this UJV is 51% and 49% respectively.

The work assigned to the UJV was completed in 2011. However, the UJV had not been wound up on account of pending settlement with CCFB.

Financials:

During the year RICON has achieved profit before tax of Rs. 0.74 crores.

12. International Metro Civil Contractor (IMCC)

This unincorporated joint venture with four other companies viz. Dyckerhoff & Widmann Aktiengesellschaft (DYWIDAG) in Germany, Larsen & Toubro Limited (L&T), Samsung Corporation (Samsung), Ircon, and Shimizu Corporation (Shimizu), Japan, was made in 2001 for securing and executing construction of Delhi Metro Corridor–Mass Rapid Transport System Phase I Tunnel Project Package MC1B project of Delhi Metro Rail Corporation (DMRC). The participating interest of DYWIDAG, L&T, Samsung, Ircon, and Shimizu is 29%, 26%, 26%, 9.5%, and 9.5% respectively. The project awarded to this UJV was completed in 2005, however, on account of pending matters with tax authorities and other commercial issues, the UJV has not been wound up.

Financials:

During the year IMCC had incurred a loss of Rs. 0.40 crores.

13. Metro Tunnelling Group (MTG)

This unincorporated joint venture with four other companies DYWIDAG International GmbH (DYWIDAG) in Germany, Larsen & Toubro Limited (L&T), Samsung Corporation (Samsung), Ircon, and Shimizu Corporation (Shimizu), Japan, was made in 2006 for securing and executing Design and Construction of Tunnel by shield TBM and Stations by Cut & Cover on Central Secretariat Qutub Minar Corridor of Phase–II of Delhi MRTS Project Packages BC 16 and Package BC 18 of DMRC. The participating interest in DYWIDAG, L&T, Samsung, Ircon, and Shimizu is 29%, 26%, 26%, 9.5%, and 9.5% respectively. The project was completed in 2010, however, the UJV is yet to be wound up on account of pending matters with tax authorities.

Financials:

During the year MTG has achieved profit before tax of Rs. 4.30 crores which mainly consists of interest income.

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 with its three subsidiaries viz. IrconISL, IRSDC, and IrconPBTL, and four joint venture companies viz. ISTPL, CERL, CEWRL, and CCFB; and five un–incorporated Joint Ventures viz. RICON, IMCC, MTG, IRCON–SPSCPL, and IRCON–AFCONS JV. The Board of Directors of your Company has, at its meeting held on 28th July 2015, approved the Standalone Financial Statements for 2014–15. The Consolidated Financial Statements were approved at a meeting of the Board of Directors held on 14th August 2015.

All the above said subsidiaries, joint venture companies, and un–incorporated Joint Ventures in India have financial year ending on 31st March except CCFB (Joint Venture Company in foreign country) which is having a financial year ending on 31st December.

Your Company would make available audited financial statements (standalone and consolidated financial statements) and accounts of its subsidiaries (IrconISL, IRSDC, and IrconPBTL), joint venture companies (ISTPL, CERL, CEWRL, and CCFB), and un–incorporated joint ventures (RICON, IMCC, MTG, IRCON–SPSCPL, and IRCON–AFCONS) at its website (www.ircon.org). Further, the accounts of these subsidiaries and joint ventures would be made available upon request by any shareholder of the Company.

A statement containing the salient features of the financial statements of these subsidiaries and joint ventures in form AOC–1 is attached with the Financial Statements.

COMPLIANCES:

A. Disclosure of Accounting Treatment:

Dues of Beira Rail Concession Project – The principal and interest accrued on loan extended to CCFB have been translated at the exchange rate prevailing as on 31st March 2011 (i.e. 1 USD = Rs. 44.23), based on prudence, instead of rates on the date of balance sheet as required under the provisions of AS–11. The details are given in Note no. 34 forming part of the Standalone Financial Statements.

B. Presidential Directive:

No Presidential directive was received during the year 2014–15.

C. Official language:

Regular quarterly meetings of Official Language Implementation Committee and workshops for effective use of the unicode system and official language are being conducted. 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 Ircon's Intranet for use by the employees. As initiative for pervasive use of Hindi, daily, a thought and a word in Hindi is displayed at the reception.

D. 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, State Level Public Information Officer and Assistant Public Information Officer are posted on Ircon's website. Queries received are replied within the stipulated time. The queries are usually in the nature of service matters, related to finance, contract, and projects. The details of RTI cases have been forwarded to the Ministry of Railways for publication on the website of Central Information Commission (CIC) website on quarterly as well as annual basis.

During the year, 156 queries out of 170 applications (inclusive of 1st and 2nd appeal) were processed / disposed off.

E. Companies Act, 2013

1. Particulars of employees

In terms of the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employee has drawn remuneration of Rs. 60 lakhs or more or Rs. 5 lakhs or more per month during the year 2014–15, except Chairman and Managing Director who has drawn salary of Rs. 60.70 lakhs during the year 2014–15, details of which are given in para 4.1 of the Corporate Governance Report.

2. Deposits

During the year under review, your Company did not accept any deposits from public.

3. Particulars of investments, loans, and guarantees and securities under section 186 of the Companies Act, 2013

Investments made, loans granted, and guarantees extended by your Company in terms of section 186 of the Companies Act, 2013, up to 31st March 2015 are as under:

Sl. No.

Name of the Company

Amount (Rs. in crores)

 

Committed

Actually invested

Equity Investment:

 

a)

Subsidiary Companies

i) IrconISL

65.00

65.00

ii) IRSDC

40.80

20.40

iii) IrconPBTL

165.00

90.00

b)

Joint Venture companies

i) ISTPL

63.87

63.87

ii) CERL

1.30

1.17

iii) CEWRL

1.30

1.17

iv) CCFB

5.53

5.53

Loan :

 

a)

Subsidiary Companies

i) IrconISL (See Note no. 2)

64.90

64.90

ii) IrconPBTL (See Note no. 3)

352.00

Nil

b)

Joint Venture Companies

i) CERL (See Note no. 4)

39.00

30.00

ii) CEWRL (See Note no. 5)

39.00

Nil

iii) CCFB (See Note no. 6)

101.88

95.94

c)

Unincorporated Joint Ventures

IRCON–AFCONS JV (See Note no. 7)

18.15

18.11

Guarantee:

 

a)

Joint Venture Companies

ISTPL

162.60

162.60

Bonds:

 

a)

IRFC Bonds (See Note no. 8)

166.18

NOTES:

1. Apart from the above, your Company has extended following financial assistance to its wholly owned subsidiary (WOS) companies and unincorporated joint ventures (UJV):

i) Allocation of Rs. 150 crores (revolving) of Ircon's non–funded credit limits sanctioned by Indian Overseas Bank to be utilized by three WOS viz. IrconISL, IrconPBTL, and IrconSGTL for facilitating issue of bank guarantees(s) by the Banker in favour of their client as may be required by them to carry on their business.

ii) Allocation of Rs. 90 crores (revolving) of Ircon's non–funded credit limits sanctioned by State Bank of India to be utilized by UJV viz. IRCON–AFCONS JV for facilitating issue of bank guarantees(s) by the Banker in favour of their client as may be required by them to carry on their business.

2. Loan (a) (i) Loan was extended for meeting capital expenditure on construction of multi–functional complexes (MFC). After part repayment, the outstanding loan as on date is Rs. 31.50 crores.

3. Loan (a) (ii): Loan is to be utilized for execution of Bikaner Phalodi Highway project in the State of Rajasthan.

4. Loan (b) (i): Loan has been extended for construction of a Rail line project from Kharsia to Dhramjaigarh in the State of Chhattisgarh.

5. Loan (b) (ii): Loan has been extended for payment of land compensation, consultancy fee, etc. before financial close by CEWRL pending decision on debt–equity structure and other aspects.

6. Loan (b) (iii): Details have been disclosed under the heading 'CCFB' (under Subsidiaries, Joint Ventures, and Associate Companies at para C8) of this Report, and also disclosed in note no. 34 forming part of the Standalone Financial Statements.

7. Loan (c): Loan has been extended for working capital requirement in connection with construction of 2nd Bhairab Railway Bridge project in Bangladesh.

8. Bonds: Details of investments are disclosed in note no. 12 forming part of the Standalone Financial Statements. The BOD had accorded approval in July 2014 for further investment, up to Rs. 150 crores in bonds of public sector undertakings, to be utilized on or before 31st July 2015 against which no investment was made.

After the close of the financial year, your Company has further made/ committed following investments and loan to its subsidiaries and proposed joint ventures companies, up to 31st July 2015:

Sl. No.

Name of the Company

Amount (Rs. in crores)

 

Committed

Actually invested

Equity Investment:

   

a)

Subsidiary Companies:

i) IrconSGTL

150.00

3.00

b)

Proposed Joint Venture Companies

i) In Jharkhand

1.30

Nil

ii) In Odisha

1.30

Nil

iii) In Chhattisgarh

1.30

Nil

Loan:

   

a)

Subsidiary Companies:

IrconSGTL (see note no. 1)

722.11

Nil

Note:

1. Loan to IrconSGTL has been approved for execution of Shivpuri Guna Highway project in the State of Madhya Pradesh.

4. Related Party Transactions:

The related party transactions entered during the year had been in the ordinary course of business and on arm's length basis. Form AOC–2 in terms of section 134(3) (h) of the Companies Act, 2013, read with rule 8 (2) of the Companies (Accounts) Rules, 2014, is placed as AppendixF.

5. Significant and material orders passed by the Regulators/ Courts/ 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.

6. Internal Control System and Risk Management

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

PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company during the year. The total manpower strength as on 31st March 2015 stood at 1472, which included 88 deputationists majority of whom (i.e. 68) were deployed on foreign projects. 1271 were regular employees out of which 1114 were employed on Indian projects. The total number of women employees was 69, out of which 41 were executives. 884 employees of the Company were technically and professionally qualified. There are a total of 225 scheduled caste/ scheduled tribe employees as on 31st March 2015.

Your Company has been continuously taking steps for building capacity of its human resources through training in functional and general management areas, 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 2014–15, a total 1240 man–days training was imparted to officials of Ircon through workshops, seminars, conferences, etc. in external institutes, in–house trainings, 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, etc. to meritorious children of employees, educational assistance to the wards of deceased employees, assistance for marriage of daughters and dependent sisters of group C and D employees, etc. Apart from facility of homeopathy 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. Gym facilities are also available in corporate office and Rae Bareli Project office.

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. During the year 2014–15, no complaints relating to sexual harassment has been received by the Company.

Your Company is gradually moving towards a competency based framework for managing Human Resources. The first step in this direction was Get Ready To Outperform and Win (GROW) project with the aim of building competency map for the organization while also identifying the competency pool for all employees at all levels of organization. During the year, 151 man–days training in behavioral and leadership areas was imparted under GROW project. During the year the Company developed succession planning framework policy for senior management levels (E7 to E9) to ensure a steady flow of future leaders from within the organization. Online grievance redressal system has been introduced in the Company for effective redressal of employees' grievances.

The 39th Annual Day was celebrated on 28th April 2015 with traditional fervor and gaiety. On this occasion, exemplary work done by employees in Indian as well as foreign projects and select projects was appreciated and rewarded. Educational awards to meritorious children of the employees were also given on this occasion.

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 Suddeutschland Private Limited (TUV). Your Company continued the certification and sustained the system as per latest revised code ISO 9001:2008 (by periodical recertification audit after expiry of three years). Latest re–certification audit has been conducted in May 2014, whereby the Company has been re–certified by TUV for a period of another three years i.e. up to September 2017.

During the year, Quality Management Department has initiated knowledge sharing by disseminating information on concrete work as per latest amendment to IS 456:2000, Rebar and Rebar work for improvement in reinforcement work for construction projects, information on spurious TMT bars in market, etc.

Your Company established an Environment Management System (EMS) and was certified for ISO 14001:2004 in October 2011. The latest re–certification audit has been conducted in June 2014 whereby the Company has been re–certified for another three years i.e. up to October 2017.

The Company nominates Environment officers at all Indian projects to monitor EMS at their respective projects. In addition, the Company has a fully operational environmental lab in Jammu for study of impacts on environment by the construction activities.

The Company has started monitoring of wastage of water, air quality and noise quality at its various construction sites and residential complexes. Environmental friendly equipments such as solar heater/ solar lights are also being installed at various projects. Waste water is recycled through Sewage Treatment Plant (STP), and the same is used for horticulture work.

Your Company has also been certified for Occupational Health & Safety Management System (OHSAS BS 18001:2007) in December 2012 by TUV SUD South Asia. This certificate is valid till December 2015.

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.

In addition, in–house trainings are also conducted on safety against fire, environmental protection, identification of hazards, accidental/ incident reporting system, etc.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

On energy conservation front, your company 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 cost of Rs. 15.60 crores. On being fully operational, this solar power plant would meet about one fourth of power requirement for the factory.

Your company has also undertaken installation of LED light fittings at its Corporate Office as energy conservation measure.

Technology absorption has been undertaken through execution of following works:

1. Geographical Information System (GIS) based Overhead Equipment (OHE) Design for Railway Electrification work of Banihal–Baramulla section in USBRL project in the State of J&K.

2. In CE–6 project of DMRC your Company has used following for the first time:

a) 66KV cable with VCV manufacturing process from Indian vendor

b) 25 KV CB with current rating of 3000 Amperes

New Austria Tunnelling Method (NATM) is proposed to be adopted for construction of tunnels in SivokRangpo project. This method is very useful in complex diversified geological condition where forecasting of the rock mass is difficult due to rapidly changing geology.

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 developed Layout Plan (LOP) using software for work of GIS OHE design for Railway Electrification work of Banihal–Baramulla section of USBRL project in the State of J&K.

TECHNOLOGY UPGRADATION AND ABSORPTION

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 modern technology and state of the art equipments in execution of infrastructure projects.

INFORMATION TECHNOLOGY AND DEVELOPMENT OF ERP

SAP ECC 6.0 based Finance–Controlling and HCM module had been successfully implemented and rolled–out on all project offices and corporate office. Updated and current data related to finance and human resources domain can be accessed from anywhere by employees of the Company.

To reduce paper usage and transparent working, use of IT has been enhanced in all the functional domains. Company's Intranet and Internet sites have been improved to publish Office orders, circulars, and notifications.

VIGILANCE ACTIVITIES

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 carries out investigations into complaints. During the year, eight inspections were carried out on various projects / units. Chief Technical Examiners Office (CTEO) has also conducted inspections of three major projects of IRCON. Complaints received from various authorities (like CVC, Railway Board, Vigilance), and other sources were investigated to their logical conclusion. Based on the outcome of investigation, circulars on improvements in the areas of tenders, contracts, HRM, finance, project management, etc. were issued to avoid recurrence of irregularities / procedural errors and to plug loopholes in system. Steps were also taken for closure of paras raised by the CTEO. 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 leveraging technology for better transparency, your company has taken steps like online submission of Immovable Property Returns by officers; online Disciplinary and Vigilance Clearance through intranet portal of the Company; online compliant on Vigilance section/ portal at Ircon's website; E–procurement has already been started in the Company in a comprehensive manner for achieving greater transparency.

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

The tenure of the previous CVO ended on 5th June 2015 and pending appointment of a new CVO, the functions are being discharged by Executive Director (Projects) of the Company.

INTEGRITY PACT

The CVC has recommended adoption of Integrity Pact in respect of major procurements in the Government Organisations. Your Company has signed a Memorandum of Understanding with Transparency International India (TII) on 22nd April 2014 for adoption and implementation of Integrity Pact.

Accordingly, Integrity Pact has been implemented for tenders / contract for works and supply valuing of Rs. 5 crore and above on all Indian Projects. The Company has appointed one Independent External Monitor (IEM) to monitor the activities in consultation with CVC.

AWARDS 

Your Company has received following awards during the year:

1. Asia Pacific HRM Congress Award 2014 for 'Organisation with innovative HR Practices'. The award was received by Mr. H. D. Doddaiah, Addl. General Manager (Southern Region), Ircon, at a function held in Bengaluru on 11th September 2014.

2. Dun and Bradstreet Infra Awards 2014, in the category of 'Construction and Infrastructure Development (Railways)'. The award was received by Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in Mumbai on 30th October 2014.

3. SCOPE Meritorious Award under the category of 'Corporate Social Responsibility & Responsiveness for the year 2012–13. The Commendation certificate was received by Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, from Mr. Anant Geete, Union Minister of Heavy Industries & Public Enterprise, Government of India, in the presence of President of India, Mr. Pranab Mukherjee, at a function held in New Delhi on 5th November 2014.

4. National Award for Excellence in Cost Management 2013 instituted by Institute of Cost Accountants of India for 'Excellence in Cost Management Public Service Sector (Large)'. The award was presented by Mr. Jayant Sinha, Minister of State for Finance, to Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in New Delhi on 25th November 2014.

5. Vishwakarma Award 2015 from Construction Industry Development Council (CIDC) in the category of best professionally managed company with a turnover of more than Rs. 1,000 crores. The award was presented by Mr. Satyendra Jain, Minister of Health, Power and Public Works Department, Government of NCT of Delhi, to Mr. K.K. Garg, Director Finance, Ircon, at a function held in New Delhi on 14th March 2015.

Your Company received following awards after the close of the financial year 2014–15:

6. India Pride Awards 2014–15 instituted by Dainik Bhaskar for 'Excellence in Public Sector Undertaking Central in Infrastructure Development'. The award was presented by Mr.Arun Jaitley, Honble Union Minister for Finance and Corporate Affairs, to Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in New Delhi on 4th June 2015.

7. Dun and Bradstreet Top PSUs Awards 2015, in the category of 'Contract & Construction sector'. The award was received by Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in New Delhi on 23rd July 2015.

INTEGRAL REPORTS

Annual Report on CSR and Sustainability Activities, Management Discussion and Analysis Report, Corporate Governance Report, Secretarial Auditor Report, Extract of Annual Return, Form AOC–2, and "Management replies to qualification contained in the Auditors' Report on Stand–alone and Consolidated Financial Statements", with relevant sub–appendices form an integral part of this Directors Report, and have been placed as Appendix A, B, C, D, E, F, G, and H respectively.

Annual Report on CSR and Sustainability Activities provides a brief outline of the companys 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. [AppendixA].

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its legal status and autonomy, business environment, mission & objectives, sectoral and segment–wise operational performance, strengths, opportunities, constraints, strategy and risks and concerns, as well as human resource and internal control systems [AppendixB].

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 2014–15 and thereafter, attendance and remuneration of directors etc., other relevant disclosures, CMD / DF Certification, and general information for shareholders [AppendixC]. 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 2014–15 (placed at AnnexureC1);

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 AnnexureC2); and

3. Certificate of compliance of Corporate Governance provisions signed by a practising company secretary (placed at AnnexureC3).

Pursuant to the provision of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Vishal Agarwal & Associates, Practising Company Secretary, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report from the auditor is placed at Appendix–D.

The Secretarial Auditor as well as the Auditor who has given the corporate governance compliance certificate had observed that the Company had not appointed adequate number of Independent directors and Woman director on the Board. Your Directors state that your Company being a government company, the appointment of all the directors on the Board is made by the Government of India (through Administrative Ministry i.e. Ministry of Railways). Accordingly, Ministry of Railways has been requested to appoint requisite number of Independent Directors and Woman Director on the Board of Ircon.

Pursuant to section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Extract of Annual Return is placed at AppendixE.

The disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014 in Form AOC–2 is placed at AppendixF.

The replies of the Management on the qualifications contained in the Auditors' Report on stand–alone as well as consolidated financial statements is placed at Appendix G and H respectively.

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 31st March 2015 and of the profit of the Company for the financial year 2014–15;

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 and the Companies Act, 2013 (where applicable), 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.

BOARD OF DIRECTORS

During April 2014 to March 2015, six meetings of the Board of Directors were held with one meeting each in the quarter ended on June 2014 and December 2014, two meetings each in the quarters ended on September 2014 and March 2015. The details of the meetings are furnished in the Corporate Governance Report under heading Board Procedure.

1. The following Directors are holding office as on date:

a)

Mr. Mohan Tiwari

Chairman and Managing Director [DIN 00191363]

w.e.f. 01.02.2009

b)

Mr. K.K. Garg

Director Finance [DIN 01495050]

w.e.f. 03.11.2009

c)

Mr. Deepak Sabhlok

Director Projects [DIN03056457]

w.e.f. 16.04.2010

d)

Mr. Hitesh Khanna

Director Works [DIN 02789681]

w.e.f. 07.03.2011

e)

Mr. Anjum Pervez

Part–time Director (Official) [DIN 06682287]

w.e.f. 15.07.2013

f)

Mr. H.K. Kala

Part–time Director (Official) [DIN 07200108]

w.e.f. 02.06.2015

2. The following Directors ceased to hold office during 2014–15:

1

Prof. (Dr.) S.S. Chatterji*

Independent Director

[Part–time (non–official)] [DIN 03546195]

Ceased to be Director on completion of 3 year tenure on 15.09.2014

2

Mr. B.M. Sharma*

Independent Director

[Part–time (non–official)] [DIN 00779026]

Ceased to be Director on completion of 3 year tenure on 18.09.2014

3

Mr. A.K. Rawal

Part–time Director (official)

[DIN 06806261]

Ceased to be Director due to his superannuation as Additional Member (Planning), Railway Board, on 31.03.2015

* Both the Independent Directors of the Company have declared, at the first board meeting held during 2014–15, that they meet the criteria of Independence in terms of Section 149(6) of the Companies Act, 2013.

AUDITORS

A. Statutory and Branch Auditors

The Auditors of the Company appointed by the Comptroller & Auditor General of India for 2014–15 are:–

Joint Statutory Auditors:

Vinod Kumar & Associates, and T. R. Chadha & Co.

For Company as a whole

Branch Auditors for projects in India:

Jindal & Co., New Delhi

All projects under Northern Region and Western Region

Pravesh Jain & Co., Jammu

(Jammu & Kashmir)

All projects at Jammu & Kashmir (Designated as Srinagar Region)

J L Sengupta & Co., Kolkata (West Bengal)

All projects under Eastern Region

SVR & Associates, Bengaluru (Karnataka)

All projects under Southern Region and one project of Western Region.

Branch Auditors for projects Abroad:

Vinod Kumar & Associates and T. R. Chadha & Co.

All projects in Malaysia

Cabinet de Audit et CAC, Algeria

Algeria

Gajma & Co., Sri Lanka

Sri Lanka

MABS & J Partners, Bangladesh

Bangladesh

B. Cost Auditor

The Board of Directors have appointed M/s. Chandra Wadhwa & Co., Cost Accountants, as Cost Auditor of the Company for conducting the audit of cost records of the Company maintained under the segment Road and other infrastructure projects.

C. Secretarial Auditor

The Board of Directors have appointed M/s. Vishal Agarwal & Associates, Practising Company Secretary, to conduct Secretarial Audit of the Company for the financial year 2014–15.

D. Internal Auditors

The Board of Directors has appointed following Internal Auditors for 2014–15:–

Auditors for Indian Projects:

Bansal Sinha & Co., New Delhi

Northern Region

N.C. Mittal & Co.

Jammu & Kashmir Region

Ray & Co.

Eastern Region

SBA Associates

Southern Region

R.C. Jain & Co.

Western Region

N.C. Mittal & Co.

Corporate Office

Auditors for projects abroad:

KERBAL Athmam, Alger

Algeria

Jayasinghe & Co.,

Sri Lanka

Ahsan Zamir & Co.

Bangladesh

Apart this, two officials of Ircon were nominated to conduct the internal audit of Malaysia projects of your Company for 2014–15, in terms of the decision of the Board of Directors.

ACKNOWLEDGEMENT

We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs 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.

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 Directors

Sd/–

Mohan Tiwari

Chairman & Managing Director

(DIN 00191363)

Place: New Delhi

Date : 6th November 2015

Appendix A

REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) AND

SUSTAINABILITY ACTIVITIES

1. A brief outline of the Company's CSR Policy, including overview of projects or programs undertaken and its web–link:

Your Company is committed to its stakeholders to conduct business in an economically, socially, and environmentally sustainable manner, that is transparent and ethical.

The Company is having a policy on CSR and Sustainability since 2011. The said CSR and Sustainability Policy has been revised in April 2014 and January 2015 with approval of the Board of Directors in line with the requirements of the Companies Act, 2013, and DPE Guidelines, 2014, on the subject.

The object of the CSR and Sustainability Policy is to focus on activities having social, economic and environmental impact, rather than mere output or outcomes.

The policy also provides for selection of CSR projects generally around project sites to provide an opportunity to connect with the people, environment and other stakeholders, who are affected by construction activities. The stakeholders directly impacted by business operations of this company rightfully claim for attention before others. Not only it makes easier to mobilize resources required for execution of CSR projects, but it also offer an advantage of executing regular progress in implementation of planned activities.

The thrust areas for CSR activities are capacity building, empowerment of communities, inclusive socio–economic growth, environment protection, promotion of green and energy efficient technologies, development of backward regions, and upliftment of the marginalized and under–privileged.

The policy also provides for stakeholder engagement by involving State Government/ Local Administration and Gram Sabhas at village level in rural areas, at the initial stage of planning and selection of CSR activities.

During the financial year 2014–15, the Company has undertaken CSR and Sustainability activities in the field of health, education, rural infrastructure development, environment (solar energy), sanitation and cleanliness, art and culture, and socio–economic development. In addition, the Company has also contributed to relief fund established by Government to mitigate the sufferings of people affected by natural calamities in the State of Jammu & Kashmir. To achieve the objective of Clean India (Swachh Bharat) through promotion of sanitation, the company has also contributed an amount of Rs. 1.87 crores to Swachh Bharat Kosh.

The CSR and Sustainability Policy of the Company, along with the projects / activities as approved by the Board of Directors is available at the web–link––http://www.ircon.org/content.aspx?Title=178.

2. Composition of CSR Committee:

Presently your Company has a three–tier structure comprising Board level Committee; Nodal officer and his team; and project level CSR implementation committee; for undertaking the CSR and Sustainability activities / projects.

a) CSR and Sustainability Committee has been constituted in terms of the Companies Act, 2013, and DPE CSR and Sustainability Guidelines, 2014.

A brief background on the constitution of Committee, its mandate, along with details of meetings held during 2014–15 are given in para 7.4 of the Corporate Governance Report. Presently, the Committee is headed by Mr. H. K. Kala, Part–time (Official) Director, Addl. Member (Planning), Railway Board; with Mr. K. K. Garg, Director Finance; Mr. Deepak Sabhlok, Director Projects; and Mr. Hitesh Khanna, Director Works; as its members.

b) The Committee is assisted by Mr. A. K. Goyal, Executive Director (Projects), Nodal Officer and his team.

The Nodal Officer and his team assists the Committee in selection and approval of the CSR and Sustainability activities / projects; facilitates coordination of CSR and Sustainability initiatives; and submits the progress report of implementation of the activities to the CSR and Sustainability Committee.

c) At each project of the Company, a project level CSR implementation committee is constituted headed by project head and supported by two other senior officers from the project. This committee submits proposals to the Nodal officer for undertaking CSR and Sustainability projects; arranges implementation of the approved activities / projects; and submits monthly progress reports to the Nodal Officer.

3. The average net profit of the Company from Indian projects in the last three financial years is Rs. 246.57 crores.

4. The CSR Budget for the financial year 2014–15 has been Rs. 4.93 crores which is 2% of the average net profit of the Company from Indian projects in the last three financial years.

5. During the year 2014–15, the Company has spent Rs. 6.72 crores on CSR activities, which includes Rs. 1.71 crores carried forward from the CSR budget of previous years. Thus, the unspent amount for the year 2014–15 is NIL.

Details of the projects undertaken during the year are as under:

Sl. No.CSR Project or Activity identifiedSector in which the Project is coveredProjects or Programs   
Amount outlay (Budget)         Project or Programs wise Amount Spent on the Projects or Programs during 2014–15 Total Expen–diture for the year
2014–15
Cumula–tive expen–diture up to
2014–15
Amount Spent
(Direct or through implemen–ting agency)
(1) Local area or other
(2) State and District where projects or programs was undertaken
TotalDuring 2014–15(1)
Direct expen–diture on projects or programs
(2)
Over–heads
1Drinking water treatment facility for removal of arsenicHealth(1) Local Area
(2) West  Bengal,      Berhampore
40.0035.0021.33             –   21.3326.33Through M/s SATHEE, an NGO of West Bengal
2Improving health care infrastructure  by construction of health post with Porta Cabins (10Ft x 12Ft), supply of medical equipments and construction of sanitized toilets in Banihal DivisionHealthS. No. (i) of Schedule VII](1) Local
(2) J&K,     Ramban
25.4016.8717.76             –   17.7626.22Through Ircon Infrastructure & Services Limited
3Running and maintenance cost of the 3 existing health units at Banihal, Lalganj, Sivok $HealthS. No. (i) of Schedule VII](1) Local Area
(2) J&K,     Ramban;     UP,     Raebareli; and    West Bengal,     Sivok
30.0030.0023.54             –   23.5423.54Direct
4Augmentation of Drinking water supply to Kohli and Soomber villagesHealthS. No. (i) of Schedule VII](1) Local Area
2) J&K, Ramban
13.5013.5012.79             –   12.7912.79Direct
5Eye & Health Check up camps for school children $HealthS. No. (i) of Schedule VII](1) Local Area
(2) New Delhi
5.001.650.83             –   0.830.83Through M/s Mahavir International (an NGO)
6Drinking water supply to the village of Peerpora, Tethar–BanihalHealthS. No. (i) of Schedule VII](1) Local Area
2) J&K, Ramban
9.009.008.94             –   8.948.94Direct
7Providing one ambulance for state health department at District Ramban HealthS. No. (i) of Schedule VII](1) Local Area
2) J&K, Ramban
10.0010.009.46             –   9.469.46Direct
8Contribution to Swachh Bharat Kosh Sanitation[S. No. (i) of Schedule VII]Swachh Bharat Kosh, Deptt. of Expenditure (Min. of Finance)187.00187.00187.00             –   187.00187.00Direct
9Providing infrastructure works for Girls Inter college under municipality of RaebareliEducationS. No. (ii) of Schedule VII](1) Local Area
(2) UP, Raebareli
97.5022.5022.50             –   22.5097.50Through Municipality of Raebareli
10Up gradation of school and other facilities in village Bhauri (Gwalior) $EducationS. No. (ii) of Schedule VII](1) Local Area
(2) MP, Gwalior
20.0015.0013.77             –   13.7718.77Through MP Laghu Udyog Nigam Ltd.
11Up gradation of School Building at Inarwa–Kamala village*EducationS. No. (ii) of Schedule VII](1) Local Area
(2) Nepal, Inarwa
12.5010.198.64             –   8.6410.95Direct
12Toilet block with Porta Cabins, SDPE septic tanks, water storage tanks in Banihal Division (18 Schools)EducationS. No. (ii) of Schedule VII](1) Local Area
2) J&K, Ramban
57.2027.1321.18             –   21.1851.25Through Ircon Infrastructure & Services Limited
13Contribution for the education & Welfare of the street children in Godhuli Schools EducationS. No. (ii) of Schedule VII](1) Local Area
(2) New Delhi
2.362.362.36             –   2.362.36Through  M/s GODHULI, an NGO
14Development works for Govt. School, Soomber $EducationS. No. (ii) of Schedule VII](1) Local Area
(2) J&K,      Banihal
10.0010.005.13             –   5.135.13Direct
15Additional works at Sant Ravidas Sr Secondary School, Bhadvasia; Jodhpur
EducationS. No. (ii) of Schedule VII](1) Local Area
(2) Rajasthan,      Jodhpur
4.804.808.92             –   8.928.92Direct
16Up gradation of school building of Janta Adarsh Andh Vidyalaya, Sadiq NagarEducationS. No. (ii) of Schedule VII](1) Local Area
(2) New Delhi
3.003.003.35             –   3.353.35Direct
17Providing ceiling fans to Govt. Primary School in Aihar EducationS. No. (ii) of Schedule VII](1) Local Area
(2) UP, Raebareli
1.001.000.94             –   0.940.94Direct
18Providing furniture for student hostel at HSS, Ukheral EducationS. No. (ii) of Schedule VII](1) Local Area
2) J&K, Ramban
10.0010.006.73             –   6.736.73Direct
19Improvement to school infrastructure by providing fencing, pathway and drinking water facilities $EducationS. No. (ii) of Schedule VII](1) Local Area
2) J&K, Ramban
7.007.001.92             –   1.921.92Direct
20Vocational cum skill development training $Skill DevelopmentS. No. (ii) of Schedule VII](1) Local Area
(2) Rajasthan,       Dholpur
20.0014.942.00             –   2.007.06Through ITI Dholpur
21Vocational training centers for women at Bankoot (Banihal) for tailoring and embroidery $Skill DevelopmentS. No. (ii) of Schedule VII](1) Local Area
2) J&K, Ramban
5.002.571.51             –   1.513.94Direct
22Conservation of Energy by replacing CFL Lights with LED LightsEnvironmentS. No. (iv) of Schedule VII](1) Local Area
(2) New Delhi
80.0040.0042.61             –   42.6142.61Direct
23Use of Renewable Energy by installing Solar Panel $EnvironmentS. No. (iv) of Schedule VII](1) Local Area
(2) New Delhi
110.0018.6122.05             –   22.05113.44Direct
24Provision of Mokshda Green cremation system (Mokshda PEVSS) near Lalganj $EnvironmentS. No. (iv) of Schedule VII](1) Local Area
(2) UP, Raebareli
79.0047.3939.52             –   39.5271.13Through M/s MOKSHDA PEVSS, (Paryavaran Evam Van Suraksha Samiti)
25Mechanized Cleaning of Track Surrounding areas at Railway Stations EnvironmentS. No. (iv) of Schedule VII](1) Local Area
(2) New Delhi
65.005.004.87             –   4.8764.87Through Northern Railway
26Providing solar lights in various villages of J&K, Bihar and UP # EnvironmentS. No. (iv) of Schedule VII]1) Local Area
(2) J & K, Ramban;  Bihar, Patna; UP, Raebareli
10.004.47             –   4.474.47Through Ircon Infrastructure & Services Limited
27Up–gradation of Rail Museum at Chanakyapuri, New Delhi (Jointly with other PSUs)Art & CultureS. No. (v) of Schedule VII](1) Local Area
(2) New Delhi
51.6851.6851.68             –   51.6851.68Through RITES Limited
28Contribution to PM/CM relief fund Relief FundS. No. (viii) of Schedule VII](1) Local Area
(2) J&K
50.0050.0050.00             –   50.0050.00Direct
29Protection works for Public graveyard, BanihalRural Development S. No. (x) of Schedule VII](1) Local Area
2) J&K, Ramban
10.0010.0010.10             –   10.1010.10Direct
30Construction of Concrete Pathway from Kaskoot Village (Eastern side) up to the West side boundary wall of Banihal Station yard $Rural Development S. No. (x) of Schedule VII](1) Local Area
(2) J&K, Banihal
4.504.502.67             –   2.672.67Direct
31Construction of pre–fabricated bus shelter at LalganjRural Development S. No. (x) of Schedule VII](1) Local Area
(2) UP, Raebareli
10.0010.009.79             –   9.799.79Direct
32Providing infrastructure facilities in Dulhapur village $Rural Development S. No. (x) of Schedule VII](1) Other
(2) UP,      Ghazipur
25.005.006.09             –   6.096.09Direct
33Community hall under Zila Panchayat in Kila bazaarRural Development S. No. (x) of Schedule VII](1) Local Area
(2) UP, Raebareli
92.5017.5017.50             –   17.5092.50Through Zila Panchayat of Raebareli
34Up gradation of pathways in hilly villages of Soomber and Dudda–Urnihal Rural Development S. No. (x) of Schedule VII](1) Local Area
2) J&K, Ramban
30.0015.0027.40             –   27.4027.40Direct
35Disaster Management in Banihal (J&K)Relief MeasureS. No. (viii) of Schedule VII](1) Local Area
(2) J&K, Banihal
0.200.20          0.13              –   0.130.13Direct
36Evaluation for CSR projects executed during the year 2013–14Health, Education, Rural Development, Skill Development, Environment.(1) Local Area
2) J&K, Ramban, Jammu;
UP, Raebareli, Noida, Gr Noida;
Rajasthan, Dholpur, Jodhpur, Bikaner, Hindaun;
Delhi;
2.702.70              –   2.832.832.83Through Ircon Infrastructure & Services Limited
 TOTAL  1190.84711.09669.482.83672.311063.64 
The CSR activity is the continuation since 2013–14 i.e. before the Companies Act, 2013 was made applicable.         
#Release of final payments for the CSR activities undertaken during the previous years for Providing solar lights in various villages of J&K, Bihar and UP.         
CSR activities / projects continuing in the year 2015–16 also.         
6The BoD, at its meeting held on 28.07.2015, had approved provisional CSR Budget for the financial year 2015–16 of Rs. 6.03 crores which is 2% of the average net profit from Indian projects in the last three financial years.          
7The CSR and Sustainability Committee confirms that the implementation and monitoring of the CSR and Sustainability policy is in compliance with the CSR objectives and policy of the Company.           
For and on behalf of the Board of Directors         
Sd/–  Sd/–   Sd/–  
(Deepak Sabhlok)
Director Projects & Member, CSR and Sustainability Committee
(DIN 03056457)
  (H.K. Kala)
Part–time (Official) Director & Chairman, CSR and Sustainability Committee
(DIN 07200108)
   (Mohan Tiwari)
Chairman & Managing Director
(DIN 00191363)
  
Place:New Delhi
Date:06–11–2015


APPENDIX–B
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
AN OVERVIEW



The Company has a long standing reputation as a sectoral leader in Transportation Infrastructure amongst the public sector construction companies in the Country with specialization in execution of Railway Projects on turnkey basis and otherwise. After commencing business as a railway construction company it diversified progressively since 1985 to roads, buildings, electrical sub–station and distribution, airport construction, commercial complexes, as well as to metro works. It has been one of the few construction companies in the public sector to have earned substantial foreign exchange for the Country and paid dividend without fail every year to the Government.

The Company has executed many landmark construction projects in the last 39 years both in the Country and Abroad. In India, in particular, it has also been undertaking projects even in difficult terrains and disturbed regions. The Company has so far completed projects in more than 22 countries across the globe, and 373 projects in India.

The Company is an ISO certified Company for Quality, Environment, and Occupational Health and Safety Management Systems, a Schedule A public sector company, and a Mini Ratna Category I.

LEGAL STATUS AND AUTONOMY

The Company, a legal entity separate from the Government, is legally, functionally, and financially autonomous, operates under the corporate laws as an independent commercial enterprise, does not receive any budgetary or financial support from the Government, nor is it a dependent agency of the Government. However, the Government of India through the Ministry of Railways and the Department of Public Enterprises under the Ministry of Heavy Industries and Public Enterprises, monitors its performance through a system of Memorandum of Understanding (MOU) as regards targets to be achieved every year as part of accountability to the Parliament in respect of all government companies. Government can issue and does issue guidelines to regulate and bring about some uniform pattern in the functioning of the Company as a public sector company. However, no Government department has any supervisory authority to exercise control over the Company which is managed and run under the superintendence, control, and direction of its Board of Directors as per the Companies Act.

BUSINESS ENVIRONMENT

During 2014–15 Indian economy grew at 7.3 per cent as per the new series of national accounts, adopted by the Central Statistical Organization, with base year of 2011–12 in place of earlier base of 2004–05. The perceptible improvement in economic growth resulted from improved performance of both services as well as manufacturing sectors. Encouraged by the macro–economic stability coupled with improved business sentiments in the country, the International Monetary Fund (IMF) and the World Bank have presented an optimistic growth outlook for India for the year 2015 and beyond.

Government has undertaken various initiatives to sustain this momentum of growth. The major ones, which would afford business opportunities to your Company, are as follows:

1. Railways:

The key focus areas for Indian Railways presently are creation of capacity; modernization of network and rolling stock; dedicated freight corridor (DFC); high speed rail; last mile linkage; port connectivity; etc. Accordingly, an investment of about Rs.8,56,020 crores is planned over a span of next five years i.e. 2015–19 for:

– Network decongestion in the form of Doubling and DFCs;

– Taking up National Projects in North Eastern States and in the State of J&K;

– Track renewal, bridge works;

– Road over bridges, Rail under Bridges;

– Production and maintenance of Rolling Stock in the form of locomotives, coaches, wagons, etc.;

– Augmentation of passenger amenities and stations redevelopment;

– High Speed Rail and Elevated Corridors.

In addition to putting up rail connectivity projects for coal movement in the State of Jharkhand, Odisha, and Chhattisgarh on fast track, Railways has sanctioned 77 projects covering 9400km of doubling / tripling/ quadrupling works along with their electrification at a total cost of Rs. 96182 crores.

Ministry of Railways has also taken initiative for introduction of High Speed Bullet Trains on the Mumbai–Ahmedabad corridor, and also high speed corridor on Diamond Quadrilateral network connecting major metros and growth centers in the Country.

2. Roads:

The Government has approved a scheme for development of 1,126 km of national highways and 4,351 km of state roads in left–wing extremism (LWE) affected areas as a special project with an estimated cost of about Rs. 7,300 crores. In addition, the National Highways and Infrastructure Development Corporation Limited, has been created to expedite development of highways in the North–Eastern region and border areas.

Government has also taken steps to resolve problems being faced by BOT – PPP projects (like developers having negligible equity to contribute and lenders unwillingness to provide debt funds) by rescheduling premium payment in BOT projects. The rescheduling would be available to concessionaires experiencing revenue shortfall so as to ensure that project execution does not suffer owing to cash flow constraints. These initiatives would give a boost to highway projects being offered on BOT basis.

3. Electrical Projects:

In addition to railways electrification works, work for railway sidings/ workshops, tunnel ventilation, industrial electrification, distribution works, smart grid technologies for power sector utility, sub–station/ transmission/ high voltage cable laying works are in the offing.

Government has introduced Integrated Power Development Scheme (IPDS) with an outlay of Rs. 32612 crores for strengthening the sub–transmission and distribution network in urban areas, metering of distribution /feeders/ transformers /consumers in urban areas and roof top solar panels. The IPDS scheme would subsume the presently continuing Restructured Accelerated Power Development and Reforms Programme (R–APDRP).

4. Urban Infrastructure Projects:

Urban infrastructure in the form of smart cities having intelligent physical, social, institutional, and economic infrastructure to improve public services.

5. Signalling & Telecommunication Projects:

Signalling & Telecommunication Projects are included in the composite turnkey railway projects.

In foreign countries opportunities exist in countries like Oman, Ethiopia, Bangladesh, Sri Lanka, Malaysia, and Myanmar.

Present Project Profile:

Your Company is executing projects for construction of railway line in J&K, Sivok–Rangpo, Jayanagar (India) to Bijalpura (Nepal), Jogbani to Biratnagar, etc.; setting of new rail coach factory at Rai Bareli; electric loco sheds; Road over Bridges in Bihar and Rajasthan; Pradhan Mantri Gram Sadak Yojna (PMGSY) in Jharkhand and Bihar; and electrical works under RAPDRP in the State of Jammu & Kashmir and Uttar Pradesh.

Additionally, the Company is a stakeholder in two Special Purpose Vehicle (SPV) companies to undertake rail connectivity projects for coal movement in the State of Chhattisgarh. MoUs have also been signed for taking up such works in the State of Odisha and Jharkhand. Subsequent to the signing of MoUs, two more Joint Venture Companies have been incorporated on 31st August 2015, viz. 'Mahanadi Coal Railway Limited' in the State of Odisha, and 'Jharkhand Central Railway Limited' in the State of Jharkhand.

The Company has also formed two SPV companies for execution of road projects viz. Ircon PB Tollway Limited [for widening and strengthening of the existing Bikaner – Phalodi section to four lane from 4.200 km to 55.250 km and two lane with paved shoulder from 55.250 km to 163.500 km of NH–15 on BOT (Toll) basis in the State of Rajasthan] and Ircon Shivpuri Guna Tollway Limited [for four laning of Shivpuri–Guna section of NH–3 from 236.00 km to 332.1 km on BOT (Toll) basis on DBFOT pattern under NHDP Phase–IV in the State of Madhya Pradesh].

Your Company is executing projects in Malaysia, Bangladesh, Myanmar, Bhutan, and Algeria.

OUTLOOK

The Vision, Mission, and Objectives of the Company are as follows:

A. Vision

To be recognised nationally and internationally as a construction organisation comparable with the best in the field covering the entire spectrum of construction activities and services in the infrastructure sector.

B. Mission

i) To effectively position the Company so as to meet the construction needs of infrastructure development of the changing economic scenario in India and abroad.

ii) To earn global recognition by providing high quality products and services in time and in conformity with the best engineering practices.

C. Objectives

i) To enhance the size and value of business activities of the Company so as to achieve a turnover of Rs. 5500 crores by the year 2016–17.

ii) To achieve reasonable returns on the capital employed.

FINANCIAL PERFORMANCE

In the year 2014–15, the Company has registered total income of Rs. 3122 crores, as compared to the total income of Rs. 4307 crores achieved in 2013–14. About 95% of the total operating income i.e. Rs. 2950 crores, has arisen from operations, out of which about 30% i.e. Rs. 877.52 crores has been contributed by foreign projects. Operating income from foreign projects has decreased by 59% over the previous year. The main reason for lower income during the year is completion of projects in Malaysia and Sri Lanka which had contributed substantial income during the previous year. There had been a corresponding reduction in Profit before tax which has decreased by 32.40% from Rs. 1249 crores in 2013–14 to Rs. 844.29 crores in 2014–15, and Profit after Tax has also decreased by 36.08% from Rs. 907 crores in 2013–14 to Rs. 579 crores in 2014–15. Net Worth has increased by 12.04% during the year, whereas earnings per share have decreased by 36.08% from Rs. 457.92 in 2013–14 to Rs. 292.68 in 2014–15.

Although turnover of the Company has shown declining trend, the Company has secured new projects which have increased order book to Rs. 5039 crores approx. Consequently, the Company is hopeful to reverse the trend and achieve turnover as per objectives.

The Board of Directors has recommended a dividend @ Rs. 52 per share (520% on the paid–up share capital) for consideration and declaration by the shareholders. The Company has already paid an interim dividend @ Rs. 40 per share (400%) in February 2015. The dividend of Rs. 102.94 crores payable after declaration at the Annual General Meeting together with the interim dividend already paid (Rs. 79.184 crores) would take the total dividend pay–out for the year 2014–15 to Rs. 182.12 crores, which is 920% of the existing paid–up share capital of the Company.

OPERATIONAL PERFORMANCE

A. Sectoral Performance:

Railways continued to be the primary sector of interest contributing highest to the operating income. During 2014–15, Railways accounted for 91.12% of operating income, Highways accounted for 7.72%, and the balance 1.16% resulted from buildings, electrical projects, etc. A sector–wise comparative position is given below. The table below shows the proportion of operating income from railway construction works has decreased from 96% in 2013–14 to 91.12% in 2014–15, whereas the proportion of income from highway sector has increased from 3% in 2013–14 to 7.72% in 2014–15.

(Amount in Rs. crores)

Sectors

2012–13

 

2013–14

 

2014–15

 

Operating Income

%

Operating Income

%

Operating Income

%

Railways

3906

92

3884

96

2688

91.12

Highways

225

5

136

3

228

7.72

Buildings

42

1

24

0.5

19

0.63

Others*

59

2

23

0.5

15

0.53

Total

4232

4067

2950

* Includes income from Electrical Projects (Rs. 52 crores during 2012–13, Rs. 21 crores during 2013–14, and Rs. 13.43 crores during 2014–15).

B. Segment–wise Performance:

Foreign projects contributed 45% and 50% to total income during 2012–13 and 2013–14 respectively as compared to 28% in 2014–15. A comparative position for the last three years is given below:

(Amount in Rs. crores)

Segments

2012–13

 

2013–14

 

2014–15

 

Total Income

%

Total Income

%

Total Income

%

Foreign

1995

45

2146

50

868

28

Domestic

2476

55

2161

50

2254

72

Total

4471

4307

3122

STRENGTHS

The Company has rich experience of timely execution of a large number of international projects, especially in developing countries. Its key strengths continue to be impressive financials (reflected in the consistent profitability and healthy balance sheet of the Company), established credentials, and competent manpower. The Company has a track record of quality performance in time to the satisfaction of customers. The Company has gained valuable experience in executing turnkey projects to be utilized for upcoming EPC and DBFOT projects.

OPPORTUNITIES

A number of macro level and sectoral initiatives undertaken to improve economic growth coupled with revival of interest in the development of infrastructure sector in the last few years in India as well as Abroad, particularly in Railway sector, has opened up several opportunities for securing more business. The Company has geared itself to benefit from the opportunity presented by EPC and DBFOT projects both in Railways and Highways by leveraging its financial strength.

CONSTRAINTS

Although every organization has to work within a certain legal framework, the Company as a public sector company faces more constraints (not applicable to private sector companies) which puts it at a disadvantage in a competitive market. Availability of soft credit with overseas competitors and flexibility in procurement and operations with private competitors are some of the other factors.

The structural changes in the construction industry in the last few years whereby all construction and financial risks are being transferred to the Contractors from the employers poses fresh challenge to the Company. These higher risks are willingly taken up by private sector companies in order to increase their order book and to capture a sizeable portion of the market.

Ircon being a domain player in the railway infrastructure segment, has been able to secure a fair share of railway business for the Company in the past. However, with the Employer(s) diluting the qualification requirement a large number of highway contractor are diversifying in this segment thereby increasing the competition for Ircon.

STRATEGY

The Company is focused towards strategic business development to sustain and improve its order book position by giving a thrust to its areas of core competence and international business. Core competence of the Company namely, Railways, Highways, Electric sub–stations, S&T, and Railway Electrification, is being further consolidated. On account of opportunities in the offing in the areas of EPC and DBFOT, an integrated team of railway and highways, design and execution engineers and business development managers have been mobilized to work on such opportunities.

RISKS AND CONCERNS

A. Project Risk Management:

A formal Risk Management framework is in place from August 2007. The Company has a Risk Management Committee of Whole–time Directors and a Rapid Action Group at General Manager / Executive Director (below board) level to ensure its implementation. Risk Management Policy, Risk Management Processes, and MIS reports formats including MIS reports on Risk Management have been evolved in accordance with the Framework. Reports from Rapid Action Group for managing and mitigating risks are submitted through the Risk Management Committee to the Audit Committee for review.

In India, a major concern in execution of projects is non availability of encumbrance free land, and delayed approval of drawings and estimate due to which there is a risk of time and cost overruns which are seldom compensated by the client.

The Companys employees and projects have been and are exposed to risks and threats to life, liberty, and property while operating in risky geographical areas. It however takes pride in executing prestigious works in the nation building task. The Company has taken measures with the help of the Government to provide adequate security, facilities, and also insurance coverage in such places. Policies and procedures are in place for ensuring health and safety. Construction industry is highly susceptible to variation in commodity prices and interest rates.

Quality department has issued Guidelines on Hazard Identification and Risk Analysis due to construction activities, plant and machinery, vehicles, etc. for projects, and suggested operational control procedures to minimize the identified hazards.

B. Treasury Risk Management

Your company was assigned a CARE AAA rating by Credit Analysis & Research Limited (CARE) for long–term non–fund based credit facilities and an A1+ rating (earlier denoted as PR1+, and has now been standardized in accordance with circular dated 15th June 2011 issued by SEBI) for short–term non–fund based credit facilities in 2008–09 based on BASEL II norms of the Reserve Bank of India. These rating have been re–affirmed in an annual surveillance review by CARE in November 2014.

Ircon conducts its business in various countries and, therefore, has to deal in foreign currencies. Execution of projects abroad necessitates investing some funds in foreign banks in order to take care of any exigency arising on account of temporary cash flow mismatch. However, dealing in foreign currencies involves foreign exchange risk and the exchange rate may change unfavorably before the currency is exchanged. In order to minimize or eliminate foreign exchange risk, these exchange rate fluctuations are monitored constantly and surplus funds are exchanged / repatriated to India at the appropriate time, and in accordance with the laws. Efforts are made to provide a natural hedge by matching foreign currency inflows and outflows from various foreign projects. Investment guidelines for foreign projects have been formulated to ensure placement of funds with Foreign Banks in a fair and transparent manner.

INTERNAL CONTROL SYSTEM

The Company has adequate internal control mechanism and an Internal Audit System commensurate with its size and nature of business. A comprehensive internal audit manual had been issued with guidelines for internal auditors to make the internal control system more effective and project specific. Projects are closely monitored through online/offline reporting formats and the key performance indices are monitored by the management on monthly basis.

The Company has in place a structured organizational chart and a system of delegation of powers. This coupled with robust internal MIS systems (online reporting format), ensures appropriate information flow to facilitate effective monitoring. Adherence to these processes is monitored through internal audits in two phases during every financial year. The Company has an internal audit system that requires the Internal Auditors to comment on the existence of adequate internal control systems and compliance therewith in addition to the opinion on existence of proper risk assessment and mitigation mechanism. The Internal Auditors are experienced chartered accountants directly reporting to the Management which also ensures their independence. Reports of the Internal Auditors are reviewed, compliances are ensured, and synopses of Audit Reports along with compliance are put up by Internal Audit Department for consideration by the Audit Committee.

The internal control and audit system are being reviewed periodically by the Management as well as the Audit Committee, followed up by corrective action, whenever necessary as a part of continuous improvement. A structured Fraud Prevention, Detection, and Control Policy (FPDC Policy) along with a Whistle Blower Policy duly approved by the Board of Directors is in place with facility to make e– complaints in confidence.

HUMAN RESOURCE

The Company aims to achieve the right size and right mix of human resource/ employees for the organization. Since your Company is a project based company, there are fluctuations in the manpower requirements which are being taken care by recruiting employees on deputation, contract, and service contract. Recruitment strategies have been re–engineered to make them more in line with the overall strategy of the Company. Training programmes are designed so as to enhance both technical and managerial skills of employees.

A Performance Management System based on the 2nd Pay Revision Committee recommendations is in place which focuses on Key Result Areas for all projects and functions in line with the goals, objectives, and targets of the Company under the Memorandum of Understanding signed with the Ministry of Railways.

The Company offers the benefits of Contributory Provident Fund, Gratuity, and Post retirement Indoor Medical benefits through a Medical Trust. The Company has also formulated a Defined Contribution Pension Scheme, based on the recommendation of 2nd Pay Revision Committee, which has been approved by the Ministry of Railways. The Trust Deed for the said scheme is being registered with the Commissioner of Income tax.
For and on behalf of the Board of Directors

Sd/–
Mohan Tiwari

Chairman & Managing Director
(DIN 00191363)

Place: New Delhi  

Date: 6th November 2015

Appendix C

CORPORATE GOVERNANCE REPORT

1. Companys Philosophy on Corporate Governance & Key Values

1.1 The Code of Corporate Governance of the Company is "To Be Professional, Profitable, Transparent, and Accountable with excellence in every sphere of activity of the Company".

1.2 The Key Values of the Company formally adopted by the Board of Directors are:

a) Constructive approach

b) Working as a team

c) Excellence in performance

d) Probity in work and dealings

e) Being responsible and accountable

2. Board of Directors

2.1 Composition of Board of Directors

Present strength of the Board of Directors of Ircon is six comprising four whole–time directors (Chairman & Managing Director, Director Finance, Director Projects, and Director Works) and two government nominated [part–time (official)] directors.

During 2014–15, the tenure of two independent directors on the Board of Ircon [i.e. Prof. (Dr.) S.S. Chatterji and Mr. B.M. Sharma] concluded on 15th September 2014 and 18th September 2014 respectively. Representations have been made to the Ministry of Railways for appointing requisite number of independent directors as well as women director on the Board of Ircon. In addition, a monthly report on the position of vacancies at Board level is regularly sent to the Ministry of Railways with special request to expedite appointment of requisite independent and women directors.

2.2 The details of directors as on the date of this report are given below:

BOARD OF DIRECTORS AND THEIR MEMBERSHIPS OF BOD / COMMITTEES

(As on the date of this report)

Directors

Whole–time / Part–time (Official)/ Independent

Directorships held in Companies/ Body Corporates

No. of Committee Memberships held in Companies / Body Corporates (including Ircon)

 

(excluding Ircon)

As Chairman

As Member

Mohan Tiwari

[DIN 00191363]

Chairman & Managing Director Whole–time

1

[IRSDC]

NIL

1

K.K. Garg

[DIN 01495050]

Director Finance

Whole–time

1

[CCFB]

1

2

Deepak Sabhlok

[DIN 03056457]

Director Projects

Whole–time

5

[ISTPL, IRSDC, IrconPBTL, IrconSGTL, and JCRL]

1

3

Hitesh Khanna

[DIN 02789681]

Director Works

Whole–time

1

[IrconISL]

NIL

1

Anjum Pervez

[DIN 06682287]

Part–time (official)

1

[RVNL]

NIL

3

H.K. Kala

[w.e.f. 02.06.2015]

[DIN 07200108]

Part–time (official)

1

[MRVC]

3

2

DIRECTORS WHO CEASED TO HOLD OFFICE

(During 2014–15 and thereafter till the date of this report)

Directors

Whole–time / Part–time (Official)/ Independent

Directorships held in Companies/ Body Corporates

No. of Committee Memberships held in Companies / Body Corporates (including Ircon)

 

(excluding Ircon)

As Chairman

As Member

S.S. Chatterji

[up to 15.09.2014]

[DIN 03546195]

Independent

Part–time (non–official)

1

[RVNL]

3

4

B.M. Sharma

[Up to 18.09.2014]

[DIN 00779026]

Independent

Part–time (non–official)

1

[OPDPL]

1

3

A.K. Rawal

[Up to 31.03.2015]

[DIN 06806261]

Part–time (official)

1

[MRVC]

2

2

Notes:

a) The number of Directorships is within the maximum limit of 10 public companies (within the overall maximum limit of 20 Companies) in accordance with the Companies Act, 2013.

b) The Committees covered under the last two columns are Audit Committee, Nomination and Remuneration Committee, Independent Directors Committee, CSR & Sustainability Committee, and Committee for Issue of Renewed / Duplicate Share Certificates.

c) The number of committee memberships of directors is within the maximum limit of ten including the permitted limit of five chairmanships under the DPE Corporate Governance Guidelines, 2010 (DPE CG Guidelines). Only Audit Committee has been counted for the said limit.

d) The term whole–time director used in this report refers to functional / executive directors.

e) The term part–time director used in this report refers to non–executive directors.

f) The term official indicates part–time Government nominated directors who hold office in the Government.

g) The term non–official/ independent indicates part–time directors who hold no office in the Government and are independent.

h) Apart from the remuneration to directors as per the terms and conditions of their appointment and entitled sitting fee to part–time (non–official) directors, as detailed in para 4 of this Report, none of the directors has any material or pecuniary relationship with the Company which can affect their independence of judgment.

i) Full name of companies referred:

i)

IrconISL

Ircon Infrastructure & Services Limited, a wholly owned subsidiary company of Ircon at New Delhi (India)

[CIN U45400DL2009GOI194792]

ii)

IrconPBTL

Ircon PB Tollway Limited, a wholly owned subsidiary company of Ircon at New Delhi (India)

[CIN U45400DL2014GOI272220]

iii)

IrconSGTL

Ircon Shivpuri Guna Tollway Limited, a wholly owned subsidiary company of Ircon at New Delhi (India)

[CIN U45400DL2015GOI280017]

iv)

IRSDC

Indian Railway Stations Development Corporation Limited, a joint venture and a subsidiary company of Ircon (51% equity) at New Delhi (India)

[CIN U45204DL2012GOI234292]

v)

ISTPL

Ircon–Soma Tollway Private Limited, a JV Company at New Delhi (India) in which Ircon has 50% equity participation

[CIN U74999DL2005PTC135055]

vi)

CCFB

Companhia Dos Caminhos De Ferro Da Beira, a JV Company in Mozambique in which Ircon has 25% equity participation

vii)

JCRL

Jharkhand Central Railway Limited, a JV Company in Jharkhand (India) in which Ircon has 26% equity participation

[CIN U45201JH2015GOI003139]

viii)

MRVC

Mumbai Railway Vikas Corporation Limited

[CIN U45203MH1999GOI120765]

ix)

RVNL

Rail Vikas Nigam Limited

[CIN U74999DL2003GOI118633]

x)

OPDPL

Omni–Protech Drugs Private Limited

[CIN U24239PN1993PTC071120]

3. Disclosures about Directors

As per the disclosures made by the directors in terms of section 184 of the Companies Act, 2013, read with Companies (Meetings of Board and its Powers) Rules, 2014, no relationship exists between directors inter–se. Two directors (part–time official) are officials from the Ministry of Railways, and thus related to the promoter.

Since appointment of all the directors including part–time directors is done by the Government in the name of the President of India, it has not been possible to have an item in the notice of AGM for appointment of directors as per section 152 of the Companies Act, 2013, which require determining not less than 2/3rd of the directors as persons whose period of office is liable to determination by retirement of directors by rotation at a general meeting. Further, Government appoints (not the Company) the part–time directors including independent directors with a fixed tenure due to which there is no scope for actually retiring any director by rotation every year and in the process it has not been possible to apply section 152 of the Companies Act, 2013.

The performance evaluation of functional directors as well as the Board of your Company is done through Memorandum of Understanding entered with Ministry of Railways and submitted to Department of Public Enterprises by the Administrative Ministry.

3.1 Brief Resume of Directors who joined the Company

No director joined the Company during the year.

However, after the close of the year, Mr. Hari Krishna Kala (H.K. Kala) (DIN 07200108), Additional Member (Planning), Railway Board, joined Ircon as part–time Official Director w.e.f. 2nd June 2015 (date of his consent), in terms of Presidential Order dated 26th May 2015 issued by the Ministry of Railways.

Born on 22nd June 1956, Mr. Kala is an Indian Railway Service of Mechanical Engineers (IRSME) Officer and joined Railways in February 1979. He has over 36 years of experience of working in various capacities in the Indian Railways including Research and Development, Operation and maintenance of rolling stock, manufacture of wheels, axles, springs, and locomotives and also general administrative responsibilities. He had undergone training in Heavy Haul Operations in US, Coach Design in Japan and Germany, and Strategic Management in France.

As Additional Member (Planning), Railway Board, he is responsible for planning and investment decisions in Railways.

4. Remuneration of Directors

Being a government company, the whole–time directors are appointed by the President of India through the Ministry of Railways and draw remuneration as per Industrial Dearness Allowance (IDA) pay scales pre–determined by the Government and as per the terms and conditions of their appointment issued by the Government.

The part–time official director nominated on the Board do not draw any remuneration from the Company for their role as director but draw their remuneration under Central Dearness Allowance (CDA) pay scales from the Government as government officials.

The Shareholders, at their 31st Annual General Meeting held on 26th September 2007, had authorized the Board of Directors to fix remuneration payable to part–time (non official)/ independent directors by way of sitting fees within the ceiling prescribed by Rule 10–B of the Companies (Central Governments) General Rules and Forms. Accordingly, the Board of Directors, at its 215th meeting held on 28th January 2015, fixed the sitting fee at Rs. 12,000/– for every meeting of the Board of Directors and any Committee(s) thereof.

4.1 Disclosure on Remuneration package of Whole–time Directors during 2014–15:

(in Rs. )

Sl. No.

Name of the Directors

Salary & Allowances

Other Benefits & Perks

Performance Linked Incentive

Retirements

Benefits

Bonus/ Commi–ssion/ Ex–gratia

Stock Option during the year

Total

1

Mr. Mohan Tiwari*,

Chairman & Managing Director (throughout 2014–15)

29,05,779

7,36,259

21,60,440

2,67,560

––

––

60,70,038

2

Mr. K.K. Garg,

Director Finance (throughout 2014–15)

33,87,317

7,43,272

14,49,947

2,39,473

––

––

58,20,009

3

Mr. Deepak Sabhlok

Director Projects (throughout 2014–15)

25,03,058

5,80,575

14,30,520

2,36,194

––

––

47,50,347

4

Mr. Hitesh Khanna

Director Works (throughout 2014–15)

28,86,339

6,48,497

14,07,743

2,32,475

––

––

51,750,54

* Mr. Mohan Tiwari, born on 1st October 1956, qualified as B.E. Civil (Hons.), M.Tech (Structures) and PGDIM, joined Ircon on 25th June 1998 on deputation from Ministry of Railways and got absorbed in 2002 as General Manager. He was a Director (Projects) from 8th August 2003 to 31st January 2009. He assumed tenure post as Managing Director on 1st February 2009, based on Presidential appointment conveyed through Ministry of Railways, for a period of 5 years or up to the age of superannuation, whichever is earlier. He had been re–designated by the Ministry of Railways as Chairman & Managing Director w.e.f. 5th March 2013. His tenure of appointment has been extended beyond 31st January 2014 till 30th September 2016, i.e. the date of his superannuation, vide order dated 15th May 2014 by Ministry of Railways. He has over 36 years of experience in infrastructure sector.

4.2 Details of payments made to Independent Directors / Part–time (Non–official) Directors during 2014–15:

(in Rs. )

Sl.

No.

Name of the Independent Directors / Part–time (Non–official) Directors

Sitting Fee

 

Total

Board Meetings

Committee Meetings

1

Prof. (Dr.) S.S. Chatterji

(Up to 15.09.2014)

30,000

1,00,000

1,30,000

2

Mr. B.M. Sharma

(Up to 18.09.2014)

30,000

60,000

90,000

5. BOARD PROCEDURE

5.1 BoD Charter:

a) The Company has in place a BoD approved Formal Board Charter with Corporate Governance objectives & approach and Role & Responsibility of BoD (including Whole–time Directors, Independent Directors, Government Directors), and Management (Senior Management).

b) This BoD Charter sets out essentially the composition & structure and role & responsibilities of the Board of Directors of the Company keeping the Corporate Governance objectives and approach in perspective.

c) To facilitate the part–time directors to discharge their responsibilities, independent office room in the registered office of the Company has been earmarked for them.

5.2 BoD Meetings and Attendance during 2014–15:

a) The Board of Directors met 6 times during the financial year 2014–15 on:

30th April 2014, 31st July 2014 (adjourned and resumed on 1st August 2014), 11th September 2014, 28th November 2014, 28th January 2015, and 23rd February 2015.

b) Leave of absence was granted in terms of section 167(1)(b) of the Companies Act, 2013.

c) Details of attendance of the Directors and Company Secretary during 2014–15:

Directors

No. of Board Meetings during 2014–15

 

Attended

Held (during their respective tenures)

Attended

last Annual General Meeting

Mohan Tiwari

6

6

YES

K.K. Garg

6

6

YES

Deepak Sabhlok

6

6

YES

Hitesh Khanna

6

6

YES

S.S. Chatterji

3

3

NA

B.M. Sharma

3

3

NA

Anjum Pervez

6

5

YES

A.K. Rawal

6

5

YES

H.K. Kala

NA

NA

NA

Lalitha Gupta

1

1

NA

Iti Matta

2

2

YES

Sumita Sharma

3

3

NA

NA– Not Applicable

During 2014–15 Ms. Lalitha Gupta, Company Secretary & GM (Law), superannuated on 30th April 2014. From 1st May 2014 to 30th September 2014, Ms. Iti Matta, Asst. Manager/ Company Affairs, was appointed to perform the functions of company secretary, till a candidate is selected and appointed at a higher level. Ms. Sumita Sharma is the Company Secretary of the Company w.e.f. 30th September 2014,

6. Code of Conduct for Board Members and Senior Management of the Company and Key Values for entire organization

The Company has in place a Code of Conduct for Board Members and for Senior Management (i.e. Directors, Chief Vigilance Officer, Additional General Managers and above, and Project / Functional Heads) and also Key Values for the Company as a whole. These Codes came into effect from 1st April 2005 and have been posted on the website of the Company.

The declaration signed by Chairman & Managing Director affirming receipt of compliance with the Code of Conduct and Key Values from Board of Directors and Members of Senior Management team during 2014–15 is placed as AnnexureC1.

7. COMMITTEES OF BOD

7.1 Audit Committee:

7.1.1 Terms of Reference:

The Company has revised terms of reference for Audit Committee in line with the Companies Act, 2013; DPE CG Guidelines, 2010; and clause 49 of the Listing Agreement. The core areas in the revised Terms of Reference for Audit Committee include the following:

a) Recommending remuneration of statutory auditors including payment of fees for any other services rendered by the auditors except the services covered under section 144 of the Companies Act, 2013.

b) Review and monitor the auditors independence and performance, and effectiveness of audit process;

c) Approval or any subsequent modification of transactions of the company with related parties and to review the statement of related party transactions submitted by management.

d) Scrutiny of inter–corporate loans and investments;

e) Evaluation of internal financial controls and risk management systems;

f) Overseeing the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient, and credible.

g) Reviewing, with the management, the annual financial statements and Auditors report thereon before submission to the Board for approval, with particular reference to:

i) Matters required to be included in the Directors Responsibility Statement to be included in the Board report in terms of clause (c) of section 134(3) of the Companies Act, 2013;

ii) Changes, if any, in accounting policies and practices and reasons for the same;

iii) Major accounting entries involving estimates based on the exercise of judgment by management;

iv) Significant adjustments made in the financial statements arising out of audit findings;

v) Compliance with legal requirements relating to financial statements;

vi) Disclosure of any related party transactions; and

vii) Qualifications in the draft audit report.

h) Reviewing, with the management, the quarterly financial statements and Auditors report thereon before submission to the Board for approval.

i) Management Discussion and analysis of financial conditions and results of operations.

j) Discussion with the auditors –– both internal and statutory auditors to address significant issues and areas of concern.

k) Reviewing with the Management, the performance of statutory and internal auditors, adequacy of internal control systems and functions including the structure and working of internal audit department, and internal audit reports.

l) Considering such other item/ matters as may be decided by the Board / Audit Committee.

The Audit Committee had reviewed the matters as per the said Terms of Reference including the financial reporting process, the Financial Statements for 2014–15, the declaration of due compliance by Chairman & Managing Director and Director Finance, internal control systems, etc. before recommending the Financial Statements for 2014–15 for approval by the Board of Directors. The Audit Committee had also reviewed the financial statements and performance of subsidiary companies of Ircon.

7.1.2 Composition and Attendance:

The Audit Committee of the Board, consisting of four part–time non–official (independent) Directors of the Company, was originally set up on 28th April 2000 with the approval of Board of Directors pursuant to Clause 49 of the Listing Agreement and as per the conditions for a Mini Ratna public sector company. This has been reconstituted as and when there has been a change in independent directors.

Pending appointment of requisite number of independent directors by the Ministry of Railways, the Audit Committee was last re–constituted in June 2015, as under, with two part–time (official) directors and one whole–time director:

Mr. H.K. Kala, Part–time (Official) Director

Chairman

Mr. Anjum Pervez, Part–time (Official) Director

Member

Mr. Deepak Sabhlok, Director Projects

Member

The Audit Committee met 8 times during the financial year 2014–15 on:

30th April 2014, 22nd May 2014, 31st July 2014, 11th September 2014, 23rd December 2014, 28th January 2015, 23rd February 2015, and 30th March 2015.

The attendance details of meetings held during 2014–15 are:

Member

Status

Meetings held (during their respective tenures)

Meetings attended

B. M. Sharma

Chairman (Up to 18.09.2014)

4

4

S.S. Chatterji

Member (Up to 15.09.2014)

4

4

A. K. Rawal

Chairman (13.11.2014 to 31.03.2015)

4

4

Anjum Pervez

Member (throughout

2014–15)*

8

8

Deepak Sabhlok

Member (w.e.f. 13.11.2014)

4

4

Mohan Tiwari

Member (from 29.04.2015 to 14.06.2015)

NA

NA

H.K. Kala

Chairman (w.e.f. 14.06.2015)

NA

NA

* Mr. Anjum Pervez was the Chairman of Audit Committee from 29.04.2015 to 14.06.2015, and he continues as a member of Audit Committee thereafter.

Company Secretary of Ircon is the Secretary of this Committee. All the said meetings were attended by Company Secretary of the Company (held during their respective tenure).

7.2 Shareholders' / Investors' Grievance Committee

The Company constituted a Shareholders / Investors Grievance Committee of directors on 6th June 2001.The Committee has been re–constituted from time to time due to change in directorships.

Company Secretary is the Compliance Officer of this Committee.

No complaint has been received so far and no share transfer is pending. A half yearly report stating that 'there has been no investor grievance regarding transfer of shares, non–receipt of balance sheet, or non–receipt of declared dividend' is circulated to all the members of the Committee.

The Committee was last re–constituted in July 2013 as under:

Mr. Anjum Pervez, Part–time Official Director

Chairman

Mr. K.K. Garg, Director Finance

Member

Mr. Deepak Sabhlok, Director Projects

Member

After the close of the year, Board of directors of Ircon, at its meeting held on 28th July 2015, had dissolved the Shareholders' / Investors' Grievance Committee in view of the provisions contained in section 178 of the Companies Act, 2013. After dissolution of the said Committee, the power to consider and resolve grievances of security holders of the Company now vest with the Board of Directors.

7.3 Remuneration Committee

The Company has a remuneration Committee in place since 20th April 2009 pursuant to para 5.1 of the DPE CG Guidelines, 2010 for deciding the annual bonus/ variable pay pool and policy for its distribution across executives and non–unionized supervisors. It has been reconstituted as and when there has been a change in directorships.

The Committee had a meeting on 11th September 2014 for payment of PRP for 2013–14, which was attended by all the then members of the Committee and the then Company Secretary of the Company. The Committee was last re–constituted in November 2014 as under:

Mr. Anjum Pervez, Part–time Official Director

Chairman

Mr. Deepak Sabhlok, Director Projects

Member

Mr. Hitesh Khanna, Director Works

Member

In July 2015, the existing Remuneration Committee has been renamed as Nomination and Remuneration Committee and its terms of reference has been widened so as to include area as specified by section 178 of the Companies Act, 2013, along with existing terms of reference under DPE OM dated 26th November 2008. In brief, the scope / terms of reference of Nomination and Remuneration Committee are:

1. To continue with the existing scope of deciding the annual bonus/variable pay pool and policy for its distribution across executives and non–unionized supervisors within the limits prescribed in the DPE OM dated 26th November 2008.

2. To review the policies for selection and removal of persons in senior management and other employees as per DPE and other Government Guidelines, and recommend the same for approval to the Board.

3. Any other work as may be included by Companies Act or DPE Guidelines from time to time.

Presently, Nomination and Remuneration Committee comprises of Mr. H.K. Kala, Part–time Official Director, as its Chairman along with Mr. Anjum Pervez, Part–time Official Director, and Mr. Mohan Tiwari, Chairman & Managing Director, as its members.

7.4 CSR and Sustainability Committee

An integrated Board Committee for CSR and Sustainable Development (CSR–SD Committee) had been constituted in April 2013, in terms of DPE CSR and Sustainability Guidelines, 2013.

After the implementation of new Companies Act, 2013, the CSR–SD Committee was renamed as CSR Committee in July 2014. Later DPE revised Guidelines on CSR and Sustainability (in line with the Companies Act, 2013 and Rules thereunder). These Guidelines were effective from 1st April 2014. Accordingly, CSR and Sustainability Committee has been constituted (in supersession of CSR Committee) in November 2014, to oversee the implementation of CSR and Sustainability Policy of the Company and to assist the BoD to formulate suitable policies and strategies to take the CSR and Sustainability agenda of the Company forward in the desired direction.

The Committee has been reconstituted as and when there has been a change in independent directors. Pending appointment of requisite number of independent directors by the Ministry of Railways, the CSR and Sustainability Committee was last re–constituted in June 2015, as under:

Mr. H. K. Kala, Part–time Official Director

Chairman

Mr. K.K. Garg, Director Finance

Member

Mr. Deepak Sabhlok, Director Projects

Member

Mr. Hitesh Khanna, Director Works

Member

The Committee met 6 times during the financial year 2014–15 on: 28th April 2014, 22nd May 2014, 30th July 2014, 11th September 2014, 30th December 2014 and 23rd February 2015. The attendance details are:

Member

Status

Meetings held (during their respective tenures)

Meetings attended

S.S. Chatterji

Chairman (Up to 15.09.2014)

4

4

A.K. Rawal

Chairman from 13.11.2014 to 31.03.2015)

2

2

H.K. Kala

Chairman (w.e.f. 14.06.2015)

NA

NA

K.K. Garg

Member

6

6

Deepak Sabhlok

Member

6

6

Hitesh Khanna

Member

6

5

All the said Committee meetings were attended by Company Secretary of the Company (held during their respective tenure).

7.5 Independent Directors Committee

Independent Directors Committee (known as ID Committee) has been constituted in October 2013 pursuant to DPE OMs dated 28th December 2012 (amended vide DPE–OM dated 20th June 2013) on Role & responsibilities of Non–official Directors in October 2013 which provides that non–official directors of the Company shall hold one meeting in a year, without the attendance of functional and government directors and members of management to assess the quality, quantity, and timeliness of flow of information between the Company, management, and the Board, that is necessary for the Board to effectively and reasonably perform the duties.

Further, para VII of Schedule IV of the Companies Act, 2013, provides that Independent Directors of the Company shall hold one meeting in a year without the attendance of non–independent directors and members of Management

The Committee had a meeting on 10th September 2014, which was attended by both the Independent Directors of the Company without the attendance of non–independent directors and members of management in compliance with the DPE–OMs and Companies Act, 2013.

The tenure of the two independent directors concluded in September 2014. Accordingly, the constitution of this Committee would be taken up as and when new independent directors join the Board of Ircon.

7.6 Committee for Issue of Renewed/ Duplicate Share Certificates.

The Company has constituted a Committee for Issue of Renewed/ Duplicate Share Certificates in terms of the Companies Act, 2013 read with Companies (Share Capital and Debentures) Rules, 2014, for issue of duplicate shares in replacement of those which are lost or destroyed, mutilated, torn or old, decrepit, worn out, or where the pages on the reverse for recording transfer have been utilized.

The Committee was constituted in January 2015 as under:

Mr. K.K. Garg, Director Finance

Chairman

Mr. Anjum Pervez, Part–time Official Director

Member

Mr. Deepak Sabhlok, Director Projects

Member

Company Secretary is the Secretary of this Committee.

7.7 Share Issue Committee

BoD, at its meeting held on 28th January 2015, had dissolved the Share Issue Committee in view of the fact that issue of share certificates on sub–division, consolidation, etc. under the Common Seal of the Company, shall be done by the Board of Directors by means of a resolution passed at the meeting of the Board in terms of the section 179(3)(c) of the Companies Act, 2013, read with rule 5(1) of the Companies (Share Capital and Debentures) Rules, 2014, as amended from time to time.

No meeting was held during the year 2014–15, before the dissolution of the said Committee.

8. Compliance of provisions relating to subsidiary (ies)

Presently, Ircon has following subsidiaries:

a) Ircon Infrastructure & Services Limited (IrconISL) is a 100% subsidiary company of Ircon.

b) Indian Railway Stations Development Corporation Limited (IRSDC) is a subsidiary of Ircon and also a joint venture between Ircon and Rail Land Development Authority (RLDA) in which Ircon has 51% equity.

c) Ircon PB Tollway Limited (IrconPBTL) is a 100% subsidiary company of Ircon (incorporated during the year on 30th September 2014).

d) Ircon Shivpuri Guna Tollway Limited (IrconSGTL) is a 100% subsidiary company of Ircon (incorporated after the close of the year on 12th May 2015).

None of the aforesaid companies are listed.

Turnover / Net Worth of IrconISL, IRSDC, and IrconPBTL did not exceed 20% of the turnover or net worth of Ircon (holding company) during 2014–15. Therefore, none of IrconISL, IRSDC, or IrconPBTL is a 'material subsidiary' under the Listing Agreement or a 'subsidiary' as per the DPE CG Guidelines.

9. General Body Meetings

9.1 The last three Annual General Meetings were held as under:

Financial Year

Date of holding meeting

Time

Location/ Venue

2013–14

25th September 2014

5 P.M.

Company's Registered Office, Delhi

2012–13

3rd September 2013

5 P.M.

Company's Registered Office, Delhi

2011–12

25th September 2012

5 P.M.

Company's Registered Office, Delhi

9.2 Only one special resolution was passed in the last Annual General Meeting held on 25th September 2014, and that no special resolution was passed in the Annual General Meeting for the year 2011–12 and 2012–13.

9.3 No special resolution is proposed to be conducted through Postal Ballot in the ensuing Annual General Meeting of Ircon.

10.Disclosures

10.1 During the year, there was no transaction of material nature with the directors or their relative that had potential conflict with the interest of the Company.

10.2 The Company has followed the Accounting Standards issued by the Institute of Chartered Accountants of India in the preparation of Financial Statements. Deviations from Accounting Standards have been explained in self explanatory notes given at note no. 34 forming part of the Financial Statements and also in Directors' Report under the heading Compliances.

10.3 During 2014–15, there are no items of expenditure debited in books of accounts, other than for the business purposes of the Company. Also, no expenses have been incurred by the Company which are personal in nature for the Directors and Top Management except for the remuneration paid to Directors, which is as per Government approved pay and perks (Details given in para 4 of this report and also disclosed in Note no. 41 forming part of the Stand–alone Financial Statements).

10.4 Administrative and office expenses as a percentage of total expenses vis–a–vis financial expenses are given below:

Particulars

2014–15

2013–14

Remarks

Administrative expenses (Rs. in crores)

30.60

35.84

Nil

Bank & Other Finance Charges (Rs. in crores)

8.93

38.45

Total Expenses (Rs. in crores)

2277.45

3057.51

Administration expenses/ Total expenses (in %)

1.34%

1.17%

Bank & Financial Charges/ Total expenses

(in %)

0.39%

1.26%

10.5 The Company periodically informs the Board about the risks associated with its projects in risky areas and foreign exchange management. Details pertaining to risk management have been given in Management Discussion and Analysis Report under the heading Risks and Concerns.

10.6 The Company has in place a BoD approved Fraud Prevention, Detection, and Control Policy so as to provide a system for detection and prevention of fraud, reporting of any fraud that is detected or suspected and fair dealing of matters pertaining to fraud.

10.7 The Company has in place a BoD approved Whistle Blower Policy under which there is a mechanism for employees to report to the Management, concerns about unethical behaviour, actual or suspected fraud, or violation of the Company's Code of conduct or ethics policy. The Policy also provides for adequate safeguards against victimization of employees who avail the mechanism. It provides for direct access to the Chairman of the Audit Committee in exceptional cases.

Both these Policies are available on Ircon's website.

10.8 Question of denying access to any of the personnel to Audit Committee has not arisen so far.

10.9 The Company made no public issue of shares nor issued any prospectus or letter of offer during 2014–15.

10.10 There has been no instance of non–compliance of any statutory regulation or government guidelines nor there has been any penalties or strictures imposed on the Company on any matter related to the capital market and guidelines issued by government.

10.11 The transactions with related party are in the ordinary course of business on arms length basis and the disclosure of the same has been made as per requirement of relevant Accounting standard in notes to Financial Statement of the Company.

10.12 DPE has awarded 'Excellent' grading to Ircon for compliance of DPE Corporate Governance Guidelines during 2013–14.

10.13 Ircon has secured, based on self–evaluation, an annual score of '91.25' out of 100 which falls under 'Excellent' grade for compliance of DPE Corporate Governance Guidelines for the year 2014–15.

10.14 The Company informs/ reports to the Board about the compliances of laws in the areas–– Company and Related Laws; Tax Laws; Labour & Employee Welfare Laws; RTI; from projects (Indian and Foreign); etc. every six months.

11. CEO / CFO Certification

The Chairman & Managing Director (CEO) and Director Finance (CFO) have certified in writing with respect to the truth and fairness of the financial statements, due compliances, and financial reporting which was placed before the Audit Committee and the Board of Directors (placed as AnnexureC2 to this Report).

12. General Information for shareholders

12.1 Means of communication

a) Apart from the annual report, etc., being sent to the shareholders before the Annual General Meeting, periodical reports on the progress of projects of the Company including financial performance vis–a–vis the targets are being sent to the Administrative Ministry, Government of India.

b) The Annual Report including the audited financial statements for the year 2014–15 of Ircon and its subsidiaries would be available on the website of the Company.

c) The following have also been displayed on the Companys website:

i) Shareholding pattern of the Company.

ii) Important corporate governance policies like Fraud Prevention, Detection, and Control Policy; and Whistle Blower Policy along with confidential e–mail–ids of nodal officers/ CMD/ Chairman, Audit Committee.

iii) CSR and Sustainability Policy and the CSR Activities for 2014–15.

iv) Code of Conduct for Board Members and Senior Management and Key Values of the Company.

d) E – mail ID of the compliance officer exclusively for the purpose of registering complaints by investors has been displayed on the website under the head Investor Corner for creating investor awareness.

12.2 Annual General Meeting of the Current Year

Date :22nd December 2015

Time :1700 Hours

Venue :Board Room of the Companys Registered Office –

C–4, District Centre, Saket, New Delhi 110 017

12.3 Record Date for payment of Dividend

Dividend would be paid for the year 2014–15 to all such shareholders whose name appear in the Register of Members as on the date of Annual General Meeting i.e. 22nd December 2015, the record date.

12.4 Distribution of Shareholding (As on the date of this report)

Category

No. of shares held (Rs. 10/– each)

Percentage of shareholding

Central Government in the name of the President of India and his ten nominees

1,97,42,400

99.729

Indian Railway Finance Corporation Limited

48,800

0.247

Bank of India

4,800

0.024

Total

1,97,96,000

100

Transfer of shares is normally technical in nature, from one Government nominee shareholder to another consequent upon change of officials, as the Government holds 99.729% of the shares. To effect this transfer, Company Secretary is the authorized officer, and no transfer is pending.

12.5 Plant Locations/ Operating Units

The Company does not have plant locations, but is widespread with operating units/ offices in more than eleven different States in the Country and in five other countries. A list of the units is available on the website of the Company.

12.6 Address for correspondence with the Registered Office

(Regarding Corporate Governance matters covered under this report)

Company Secretary,

Ircon International Limited, C–4, District Centre,

Saket, New Delhi – 110 017

Telephone:91–11–26545265 / 26530456;

Fax: 91–11–26522000 / 26854000

E–Mail: sumita.sharma@ircon.org

Website : www.ircon.org

13. Training of Board Members

13.1 The Company has a Board approved Training Policy for Board Members. According to the Policy, the Company has a practice of imparting introductory training to new Board Members. They are also given documents about the Company which includes Memorandum and Articles of Association, Brochure, Annual Report, latest unaudited financial results, Corporate Plan with MoU targets and achievements, and related provisions on Duties, Responsibilities, etc. of Directors.

13.2 The Board members, based on their requirement attended various seminars, conferences, training programs from time to time. During the year, Ircon's Directors were nominated / had attended training programs organized by ASSOCHAM, Indian Research Centre, SCOPE, Northern Railway, etc.

14. Compliance on Corporate Governance

This Report duly complies with the legal requirements in respect of data that should be disclosed in a Corporate Governance Report for the year 2014–15.

Certificate obtained from a Practising Company Secretary regarding compliance of the conditions of Corporate Governance is placed as Annexure C3 to this Report.

For and on behalf of the Board of Directors

Sd/–
Mohan Tiwari

Chairman and Managing Director

(DIN : 00191363)

Place : New Delhi

Dated : 6th November 2015

Annexure C1

DECLARATION BY CHAIRMAN & MANAGING DIRECTOR REGARDING COMPLIANCE WITH THE CODE OF CONDUCT BY BOD MEMBERS AND SENIOR MANAGEMENT DURING THE FINANCIAL YEAR 2014–15.

I, Mohan Tiwari, Chairman & Managing Director, Ircon International Limited, do hereby declare that all the members of the Board of Directors and the Senior Management Team of the Company have affirmed their compliance of the Code of Conduct and Key Values of the Company during 2014–15.

Sd/–

Mohan Tiwari
Chairman & Managing Director
[DIN : 00191363]

Place: New Delhi

Dated: 21st May 2015

Annexure C2

CHAIRMAN & MANAGING DIRECTOR AND FINANCE HEAD CERTIFICATION

We have reviewed the Financial Statements [i.e. the Balance Sheet, Statement of Profit & Loss and Notes thereto] and the Cash Flow Statement for the financial year 2014–15 and to the best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) These statements together present a true and fair view of the Companys affairs and are in compliance with existing accounting standards, applicable laws and regulations;

(iii) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal, or violative of the Companys code of conduct;

(iv) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting. We have disclosed to the auditors and the Audit Committee deficiencies in the design or operation of such internal controls of which we are aware and the steps we have taken or propose to take to rectify these deficiencies;

(v) We have indicated to Auditors and the Audit Committee changes in Accounting Policies during the year, and that the same have been disclosed in the Notes to the Financial Statements; and

(vi) There was no instance of fraud of which we are aware nor there has been involvement of the Management or an employee having a significant role in the Companys internal control system over financial reporting.

Sd/–                                               Sd/–

K.K. Garg                            Mohan Tiwari

Director Finance      Chairman and Managing Director

[DIN: 01495050]                  [DIN: 00191363]

Place: New Delhi

Dated: 28th July 2015


Annexure–C3
CERTIFICATE on COMPLIANCE WITH THE CONDITIONS of CORPORATE GOVERNANCE UNDER CORPORATE GOVERNANCE GUIDELINES of DPE

To

The Members of

Ircon International Limited

New Delhi

In respect of the compliance of the conditions of Corporate Governance for the year ended 31st March, 2015, by Ircon International Limited, a Government Company under section 2(45) of the Companies Act, 2013, as required by the Guidelines on Corporate Governance issued by the Department of Public Enterprises (DPE):

We have studied the Corporate Governance Report of the said Company as approved by its Board of Directors. We have also examined the relevant records and documents maintained by the Company and furnished to us for our review in this regard.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to a review of procedures and implementation thereof adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the Company.

We state that there has been no investor grievance during the year against the Company as per the records maintained by the Company.

We further comment that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

In our opinion and to the best of our information and on the basis of our review and according to the information and explanations given to us, we certify that the Company has complied with the mandatory requirements of Corporate Governance in all material respects, in conformity with the requirements of the Guidelines on Corporate Governance issued by the Department of Public Enterprises (DPE) in respect of corporate governance norms for a mini–ratna Public Sector Company, except appointment of requisite number of Independent Directors (after conclusion of the tenure of two independent directors on 15.09.2014 and 18.09.2014 respectively) and a Woman Director (during the year under review) on the Board of the Company, which we understand is done by the Government.

FOR M. BANGIA & ASSOCIATES

COMPANY SECRETARIES

Sd/–
MANOJ BANGIA

Place: NEW DELHI

Proprietor

Dated: 06/11/2015

CP NO.3655

Appendix–D
Secretarial Audit Report

(For the Financial year ended on 31st March 2015)

Form No. MR–3

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members

IRCON INTERNATIONAL LIMITED

CIN : U45203DL1976GOI008171

Plot No. C–4, District Centre, Saket

New Delhi–110017

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by IRCON INTERNATIONAL LIMITED (hereinafter called The Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of the Company books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we do hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2015, complied with the statutory provisions listed hereunder and also that the Company has proper Board–processes and compliance–mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by IRCON INTERNATIONAL LIMITED (The Company) for the period ended on March 2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the Rules made thereunder;

(ii) The Securities Contract (Regulation) Act, 1956 (SCRA) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye–laws framed thereunder;

(iv) Foreign Investment and Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment and External Commercial Borrowings.

(v) The following Regulations and Guidelines prescribed under the Securities Exchange Board of India, Act, 1992, (SEBI Act):–

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 /Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (effective 28th October 2014);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998.

(vi) Following laws and rules made thereunder have been identified as specifically applicable to the company by the Management:

(a) Department of Public Enterprises Guidelines are issued by Ministry of Heavy Industries and public Enterprises dated 14th May 2010.

(b) Income Tax Act, 1961

(c) Wealth Tax Act, 1957

(d) Service Tax Law

(e) VAT/Central Sales Tax Act

(f) The Customs Act, 1962

(g) Central Excise Act, 1944

(h) Air Prevention and Control of Pollution Act, 1981

(i) Environment Protection Act, 1986

(j) Water Prevention & Control of Pollution Act, 1974

(k) Information Technology Act, 2000 and the rules made thereunder

(l) Indian Stamp Act, 1999

(m) Right to Information Act, 2005

(n) Negotiable Instrument Act 1881 Other Labour Laws and rules made thereunder:

Apprentice Act, 1961

Child Labour Act, 1986

Contract Labour (Regulation and Abolition) Act, 1970

Workmen Compensation Act, 1923

Employees Provident Fund and Miscellaneous Provisions Act, 1952

Construction workers (Regulation of Employment and Condition of Service) Act, 1996

Equal Remuneration Act, 1976

Maternity Benefits Act, 1961

Minimum Wages Act, 1948

Payment of Wages Act, 1936

Payment of Gratuity Act, 1972

Payment of Bonus Act, 1965

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Commercial Shops and Establishment Act

We further report that no observation in respcet of compliances by the Company with the following is required:

(a) The Secretarial Standards issued by the Institute of Company Secretaries of India as they had not been notified by the Central Government up to March 31st 2015.

(b) The Listing Agreement entered into by the Company with the stock exchange(s) as the company is not listed with any stock exchange;

We further report that during the period under review the company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above without any material non–compliances and subject to the following observations:

1. The Acts, Rules, Regulations, Agreements and Guidelines mention in clause(s) (ii), (iii) and (v) above do not require any observation as the company is an unlisted entity and hence these are not applicable.

2. The Acts, Rules and Regulations mention in clause (iv) above does not require any observation as no such event has occurred during the period under consideration.

3. In respect of other laws specifically applicable to the company mentioned in clause (vi) above we observed that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with all applicable laws, rules, regulations and guidelines.

4. We further report that the Company has, in our opinion, complied with the provisions of the Companies Act, 1956 and the Rules made under that Act and the provisions of Companies Act, 2013 as notified by Ministry of Corporate Affairs and the Memorandum and Articles of Association of the Company without any material non–compliance.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non–Executive Directors except appointment of Independent Directors and Woman Director. It is understood that appointment is being done by the Government.

The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes.

The Company has obtained all necessary approvals under the various provisions of the Act; and the Directors have complied with the disclosure requirements in respect of their eligibility of appointment, their being independent and compliance with the Code of Business Conduct & Ethics for Directors and Management Personnel;

For Vishal Agarwal & Associates

Company Secretaries

Sd/–
(CS Vishal Agarwal)
FCS No.: 7242; C P No. : 7710

Place: New Delhi Date : 05/11/2015

This report is to be read with our letter of even date which is annexed as Annexure–
A and forms an integral part of this report.

Annexure–A

To,

The Members

IRCON INTERNATIONAL LIMITED

CIN : U45203DL1976GOI008171

Plot No. C–4, District Centre, Saket

New Delhi–110017

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed, provide a reasonable basis for our opinion.

3. We have relied on report of Statutory Auditors, Tax auditors, Cost Auditors and C & AG Auditors for compliances of the applicable Financial Laws including Direct and Indirect Tax Laws, Accounting Standards, the correctness and appropriateness of Financial Records, Cost Records and Books of Accounts of the company since the same have been subject to review by respective Auditors and other designated professionals..

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules, regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Vishal Agarwal & Associates

Company Secretaries

Sd/–
(CS Vishal Agarwal)
FCS No.: 7242; C P No. : 7710

Place: New Delhi Date : 05/11/2015


Appendix–E

FORM NO. MGT 9      
EXTRACT OF ANNUAL RETURN      
As on financial year ended on 31.03.2015      
[Pursuant to Section 92 (3) of the Companies Act, 2013, and Rule 12(1) of the Company (Management and Administration) Rules, 2014]        
I.REGISTRATION AND OTHER DETAILS 
1Corporate Identity Number (CIN):U45203DL1976GOI008171   
2Registration Date:28th April 1976   
3Name of the Company:Ircon International Limited   
4 a)Category of the Company:Public Company   
b)Sub–category of the CompanyGovernment Company, Limited by Shares, and Company having share capital.    
5. Address of the Registered office  & contact details:Plot No. C–4, District Centre, Saket, New Delhi – 110017    
Ph. No.: 011–26530456   
Fax No. : 011–26522000   
Email id: sumita.sharma@ircon.org    
6.Whether Listed Company (Yes/ No):No [Delisted since March 2012]   
7. Name, Address & contact details of the Registrar & Transfer Agent, if any.:Not Applicable   
II.       PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY       
All the business activities contributing 10% or more of the total turnover of the company shall be stated:      
Sl. No.Name and Description of Main Products / ServicesNIC Code of the Product/service  %  to total turnover of the Company 
1Railways4210  86.11% 
III.PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES     
[No. of Companies for which information is being filled – 12 Companies]       
Sl. No.Name and Address of the CompanyCIN/ GLN  Holding/ subsidiary/ Associate% of shares heldApplicable section
1Ircon Infrastructure & Services LimitedU45400DL2009GOI194792  Wholly owned subsidiary100%2(87)
Plot No. C–4, District Centre, Saket, New Delhi –110017.
2Ircon PB Tollway Limited U45400DL2014GOI272220  Wholly owned subsidiary100%2(87)
C–4, District Centre, Saket, New Delhi –110017
3Indian Railway Stations Development Corporation LimitedU45204DL2012GOI234292  Subsidiary51%2(87)
4th Floor, Palika Bhawan, Sector–XIII, R. K. Puram, New Delhi– 110066.
4Ircon–Soma Tollway Private LimitedU74999DL2005PTC135055  Associate50%2(6)
C–4, District Centre, Saket, New Delhi–110017. 
5Chhattisgarh East Railway Limited U45203CT2013GOI000729  Associate26%2(6)
Mahadev Ghat Road, Raipura Chowk, Raipur–492013, Chhattisgarh.
6Chhattisgarh East–West Railway LimitedU45203CT2013GOI000768  Associate26%2(6)
Mahadev Ghat Road, Raipura Chowk, Raipur–492013, Chhattisgarh.
7Companhia Dos Caminhos De Ferro Da Beira, SARL, Foreign Company  Associate25%2(6)
Largo do CFM, edificio da Estacao Central, Beira, Mozambique
8IRCON–SPSCL JVUnincorporated Joint Venture  Associate50%2(6)
47, Sector – 9 , Panchkula, 134113, Haryana
9IRCON–AFCONS JVUnincorporated Joint Venture  Associate53%2(6)
Second Floor, C–4, District Centre, Saket, New Delhi–110017. 
10RICONUnincorporated Joint Venture  Associate49%2(6)
Rites Bhawan, 1, Sector – 29, Gurgaon – 122001, Haryana
11International Metro Civil ContractorUnincorporated Joint Venture  Associate9.50%2(6)
8, Jantar Mantar Road, Connaught Place, New Delhi – 110001
12Metro Tunnelling GroupUnincorporated Joint Venture  Associate9.50%2(6)
8, Jantar Mantar Road, Connaught Place, New Delhi – 110001

IV.SHARE HOLDING PATTERN: 
(Equity Share Capital Breakup as percentage of Total Equity)   
i)Category–wise Share Holding 
Category of Shareholders No. of Shares held at the beginning of the year   No. of Shares held at the end of the year   % Change during the year
DematPhysicalTotal% of Total SharesDematPhysicalTotal% of Total Shares
A.PromotersNot Applicable   Not Applicable    
(1)Indian       
a)Individual/ HUF    
b)Central Govt 1,97,42,4001,97,42,40099.7291,97,42,4001,97,42,40099.729Nil
c)State Govt(s)    
d)Bodies Corp.    
e)Banks / FI    
f)Any Other    
 Sub–total (A) (1) 1,97,42,4001,97,42,40099.7291,97,42,4001,97,42,40099.729Nil
(2)Foreign       
a)NRIs – Individuals    
b)Other– Individuals   
c)Bodies Corp.   
d)Banks / FI   
e)Any Other   
 Sub–total (A) (2)   
 Total Shareholding of Promoter                                                  (A) = (A)(1)+(A)(2)1,97,42,4001,97,42,40099.7291,97,42,4001,97,42,40099.729Nil
B.Public Shareholding

Not Applicable
   Not Applicable    
(1)Institutions       
a)Mutual Funds   
b)Banks/ FIs ––       
 Bank – Bank of India4,8004,8000.0244,8004,8000.024Nil
 FIs – Indian Railway Finance Corporation Limited
48,80048,8000.24748,80048,8000.247Nil
c)Central Govt   
d)State Govt(s)   
e)Venture Capital Funds   
f) Insurance Companies   
g) FIIs   
h)Foreign Venture Capital Funds    
i)Others (specify)   
 Sub–total (B)(1):53,60053,6000.27153,60053,6000.271Nil
Category of Shareholders No. of Shares held at the beginning of the year   No. of Shares held at the end of the year   % Change during the year
DematPhysicalTotal% of Total SharesDematPhysicalTotal% of Total Shares
(2)Non– InstitutionsNot Applicable   Not Applicable    
a) Bodies Corp.:       
i)Indian   
ii)Overseas    
b)Individuals   
i)Individual  shareholders  holding nominal share capital upto Rs. 1 lakh   
ii)Individual  shareholders   holding nominal  share capital in excess of Rs 1   lakh.   
c)Others (specify)   
 Sub–total (B)(2):   
 Total Public Shareholding                         (B) = (B)(1) + (B)(2)53,60053,6000.27153,60053,6000.271Nil
C.Shares held by Custodian for  GDRs & ADRs Not Applicable Not Applicable  
Grand Total (A + B + C) Not Applicable1,97,96,0001,97,96,000100Not Applicable1,97,96,0001,97,96,000100NIL
Note: 
1Shares of the Company are not dematerialized as 99.729% shares are held in the names of President of India and his nominees.         
21,97,38,400 equity shares of   Rs.10/– each are held in the name of President of India, and 400 shares of Rs.10/– each are held by each of the ten nominees (who are Government Officials) of the President of India.         
ii)Shareholding of Promoters 
Sl. No.Shareholder’s NameShareholding at the beginning of the year   Share holding at the end of the year   % change in share holding during the year
No. of Shares% of total Shares of the company%of Shares Pledged / encumbered to total shares No. of Shares% of total Shares of the company%of Shares Pledged / encumbered to total shares 
1President of India and his nominees*1,97,42,40099.729Nil 1,97,42,40099.729Nil Nil
 Total1,97,42,40099.729  1,97,42,40099.729   
*List of holdings by the President of India and his nominees annexed.  
iii)Change in Promoters’ Shareholding  (please specify, if there is no change)    
     
Sl. No.Particulars  Shareholding at the beginning of the year  Cumulative Shareholding during the year  
No. of shares% of total shares of the company No. of shares% of total shares of the company 
1At the beginning of the year 1,97,42,40099.729 1,97,42,40099.729 
2Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Nil     
3At the End of the year 1,97,42,40099.729 1,97,42,40099.729 
iv)Shareholding Pattern of top ten Shareholders           
(other than Directors, Promoters and Holders of GDRs and ADRs):          
Sl. No.Particulars  Shareholding at the beginning of the year  Cumulative Shareholding during the year  
No. of shares% of total shares of the company No. of shares% of total shares of the company 
 For each of the top 10 Shareholders       
1Indian Railway Finance Corporation Limited       
a)At the beginning of the year 48,8000.247 48,8000.247 
b)Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): NilNil NilNil 
c)At the End of the year 48,8000.247 48,8000.247 
2Bank of India       
a)At the beginning of the year 4,8000.024 4,8000.024 
b)Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): NilNil NilNil 
c)At the End of the year 4,8000.024 4,8000.024 
v)Shareholding of Directors and Key Managerial Personnel (KMP):         
Sl. No.Particulars  Shareholding at the beginning of the year  Cumulative Shareholding during the year  
No. of shares% of total shares of the company No. of shares% of total shares of the company 
 For each of the Directors and KMP Not Applicable  Not Applicable  
1At the beginning of the year 
2Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 
3At the End of the year 
Note: 
1All the shares of Ircon are held by Central Government in the name of the President of India and his 10 nominees (99.729%), Indian Railway Finance Corporation Limited (0.247%), and Bank of India (0.024%).         

V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/ accrued but not due for payment:    
 Secured Loans excluding depositsUnsecured LoansDepositsTotal Indebtedness
Indebtedness at the beginning of the financial yearNIL   
i)     Principal Amount
ii)    Interest due but not paid 
iii)   Interest accrued but not due
Total (i + ii + iii)
Change in Indebtedness during the financial year
–    Addition
–    Reduction
Net Change
Indebtedness  at the
end  of the financial year
i)     Principal Amount
ii)    Interest due but not paid 
iii)   Interest accrued but not due
Total (i + ii + iii)

VI.    REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL       
A. Remuneration to Managing Director, Whole–time Directors, and / or Manager:       
(Amount in Rs.) 
Sl. No.Particulars of RemunerationName of Whole–time Director (throughout 2014–15)   Total Amount
Mohan Tiwari,             CMDK.K. Garg,     Director FinanceDeepak Sabhlok Director ProjectsHitesh Khanna, Director Works
1Gross salary     
a)Salary as per provisions contained in section 17(1) of the Income–tax Act, 196129,05,77933,87,31725,03,05828,86,3391,16,82,493
b)Value of perquisites u/s 17(2) Income–tax Act, 19617,36,2597,43,2725,80,5756,48,49727,08,603
c)Profits in lieu of salary under section 17(3) Income– tax Act, 1961
2Stock option
3Sweat Equity
4Commission     
–   as % of profit
–   others, specify     
5Others, please specify:     
– Performance Linked Incentive21,60,44014,49,94714,30,52014,07,74364,48,650
– Retirement Benefits2,67,5602,39,4732,36,1942,32,4759,75,702
 Total60,70,03858,20,00947,50,34751,75,054 
 Total (A)    2,18,15,448
 Ceiling as per the Act (See Note below)     
B. Remuneration to other directors:       
(Amount in Rs.) 
Sl. No.Particulars of RemunerationName of Directors    Total Amount
1Independent DirectorsProf. (Dr.) S.S. Chatterji (Up to 15.09.2014) B.M. Sharma (Up to 18.09.2014)  
a)Fee for attending board/ committee meetings     
– Board meetings30,000 30,000 60,000
– Committee meetings1,00,000 60,000 1,60,000
b)Commission  
c)Others (please specify)  
 Total 1,30,000 90,000  
 Total (B1)   2,20,000
2Other Non–executive DirectorsAnjum Pervez (throughout 2014–15) A.K. Rawal (thorughout 2014–15)  
a)Fee for attending board/ committee meetings   
b)Commission 
c)Others (please specify)
 Total (B2)  0
 Total [B=  B1 + B2]    2,20,000
 Total Managerial Remuneration  [A + B]    2,20,35,448
 Overall ceiling as per the Act (See Note below)     
C.Remuneration to Key Managerial Personnel  other than MD/ Manager/ WTD       
(figures in Rs.)
Sl. No.Particulars of RemunerationKey Managerial Personnel    Total Amount
CEO*Company Secretary  CFO*
Lalitha Gupta (Up to 30.04.2014)Iti Matta (from 01.05.2014 to 30.09.2014)Sumita Sharma (w.e.f. 30.09.2014)
1Gross salary      
a)Salary as per provisions contained in section 17(1) of the Income–tax Act, 19611,66,2632,67,9475,03,4289,37,638
b)Value of perquisites u/s 17(2) Income–tax Act, 196141,64215,40057,042
c)Profits in lieu of salary under section 17(3) Income– tax Act, 1961 
2Stock option 
3Sweat Equity 
4Commission    
–   as % of profit
–   others, specify    
5Others, please specify:    
  – Performance Linked Incentive (for FY 2012–13)5,66,18817,0121,41,7217,24,921
 – Retirement Benefits4,49,611  4,49,611
 Total (C) 12,23,7043,00,3596,45,149 21,69,212
 Ceiling as per the Act (See Note below)      
*CMD, Ircon, is deemed to be CEO of the Company; and DF, Ircon, is declared as CFO of the Company  and their remuneration are mentioned in Sl. No. VI (A) above.      
Note 
Section 197 of the Companies Act, 2013, is exempt for government companies in terms of the Ministry of Corporate Affairs notification dated 5th June 2015.       


VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:     
Type  Section of the Companies ActBrief DescriptionDetails of Penalty / Punishment/ Compounding fees imposedAuthority [RD / NCLT made, / COURT]Appeal if any (give Details)
A.  COMPANY     
Penalty ––– NIL –––    
Punishment
Compounding
B. DIRECTORS     
Penalty ––– NIL –––    
Punishment
Compounding
C.      OTHER OFFICERS IN DEFAULT     
Penalty ––– NIL –––    
Punishment
Compounding

Annexure
List of Shareholdings by President of India and its nominees   
(As on  31st March 2015)   
Name of the Company:  IRCON INTERNATIONAL LIMITED   
SI. No.Holders  NameNo. of Shares Held % of  Shareholding
1President  of  India1,97,38,40099.709
2Mr. Arunendra Kumar*4000.002
Chairman, Railway Board
3Ms. Rashmi Kapoor*4000.002
Addl. Memer / Finance [Looking After Financial Commissioner (Railways)], Railway Board
4Mr. V.K. Gupta*4000.002
Member Engineering, Railway Board
5Mr. D.P. Pande*4000.002
Member Traffic, Railway Board
6Mr. A.K. Mital*4000.002
Member Staff [Looking After Member Electrical], Railway Board
7Mr. Alok Johri*4000.002
Member Mechanical, Railway Board
8Mr. A.K. Mital*4000.002
Member Staff, Railway Board
9Mr. A.K. Rawal* 4000.002
Addl. Member (Planning), Railway Board
10Ms. Saroj Rajware*4000.002
Addl. Member (Budget), Railway Board 
11Mr.  Pramod Sharma*4000.002
Executive Director (PSU), Railway Board
 TOTAL1,97,42,40099.729
400 shares each are held by President’s 10 (ten) nominees who are Government officials from the Ministry of Railways.  


Appendix–F

FORM NO. AOC–2

       

[Pursuant to Section 134 (3)(h) of the Companies Act, 2013, read with Rule 8(2) of the Companies (Accounts) Rules, 2014]

       

Form for Disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in section 188 (1) of the Companies Act, 2013, including certain arms–length transactions under third proviso thereto for the financial year 2014–15 (for the period 1st April 2014 to 31st March 2015).

       

1

Details of contracts or arrangements or transactions not at arm's length basis

   

:         NIL

2

Details of material contracts or arrangements or transactions at arm's length basis

   

:

Sl. No.

Name of the related party and nature of relationship

Nature of contracts / arrangements / transactions

Duration of contracts / arrangements / transactions

Salient terms of contracts / arrangements / transactions, including the value, if any

Date of approval by the BoD, if any

Amount paid as advances, if any

1

Ircon Infrastructure & Services Limited
(IrconISL)
Wholly owned subsidiary company

Execution of Corporate Social Responsibility works for Ircon.

MOU dated 8th June 2012        Duration – Continuing.

CSR Works relating to construction of toilets at schools, solar lights, etc.

Not Applicable

NIL

IrconISL is paid actual cost of workplus specified percentage of contract addition towards overheads and profit.

2

Ircon PB Tollway Limited
(IrconPBTL)
Wholly owned subsidiary company 

Execution of Engineering Procurement  Construction (EPC) Contract of Bikaner–Phalodi project for IrconPBTL.

EPC Agreement dated 19th January 2015                                                                                        Duration –– EPC work is 30 months from the appointed date intimated by NHAI or handing over of land by IrconPBTL.

The Contract has been awarded in line with the price quoted to National Highways Authority of India (NHAI) for securing the contract on competitive basis. The project will be executed in terms of the Concession Agreement signed by IrconPBTL with NHAI.

Not Applicable

NIL

3

Chhattisgarh East Railway Limited (CERL)
A Joint Venture Company

Execution of East Corridor Rail project in Chhattisgarh for CERL.


Project Execution Agreement dated 18th January 2014.                                         Duration –– Till the Railway corridor becomes operational in line with the Concession Agreement.                     

The contract is in terms of the Concession Agreement signed by CERL with South Eastern Railways.

Not Applicable

NIL

Ircon would be paid actual cost of work plus specified percentage of contract addition towards overheads and profit.

4

Chhattisgarh East–West Railway Limited (CEWRL)
A Joint Venture Company

Execution of East–West Corridor  Rail project in Chhattisgarh for CEWRL.

Project Execution Agreement dated 5th April 2014.                                                                               Duration –– Till the Railway corridor becomes operational in line with the Concession Agreement.       

The contract is in terms of the Concession Agreement signed by CEWRL with South Eastern Railways.

Not Applicable

NIL

Ircon would be paid actual cost of work plus specified percentage of contract addition towards overheads and profit.

Sl. No.

Name of the related party and nature of relationship

Nature of contracts / arrangements / transactions

Duration of contracts / arrangements / transactions

Salient terms of contracts / arrangements / transactions, including the value, if any

Date of approval by the BoD, if any

Amount paid as advances, if any

5

Ircon Infrastructure & Services Limited
(IrconISL)
Wholly owned subsidiary company

a)  Work for Detailed Design for bridges & Supervision of Geo – Technical investigations in Myanmar for IrconISL.

Letter of award dated 20th March 2015 to Ircon.                                                                      Duration –– 6 months from date of mobilization to site or 3 months from date of providing all relevant details for design of bridges, whichever is later.

The work has been awarded at a total price of `  32.06 lakhs. The same has been awarded to Ircon at internal cost including overheads and profits calculated and quoted by IrconISL in its bid submitted to Government of Myanmar.

Not Applicable

NIL

b)  IrconISL to provide manpower for Ircon’s project in Malaysia

Agreement dated 1st April 2013                                            Duration: 2 years from the date of signing [Unless terminated by either party with prior 30 days written notice, this agreement will remain valid for 2 years. Unless either party so notifies the other of the termination of this agreement, it shall be renewed every 2 years].

The rates for provision of various categories of manpower stipulated in the Agreement are comparable with those charged by manpower supply agencies for international projects for similar type of manpower.

Not Applicable

NIL

c)   IrconISL to provide manpower for Ircon’s project in Sri Lanka.

a)   MoU signing date 21.09.2012 b)   Agreement signed on 26.12.2012                                   Duration: 2 years from the date of signing [Unless terminated by either party with prior 30 days written notice, this agreement will remain valid for 2 years. Unless either party so notifies the other of the termination of this agreement, it shall be renewed every 2 years].

Same as above

Not Applicable

US$ 2,50,000 to be recovered from the bills @20%

d)   Work related to design and construction of MFC in station premises for IrconISL [for construction work carried out in 2014–15].

Letter of award dated 3rd June 2010

Construction of MFCs at 24 identified stations, after feasibility study. Ircon is paid actual cost of work plus specified percentage of contract addition towards overheads and profits.

Not Applicable

NIL

e)   Duomatic on Line Track Tamping Machine’ leased from IrconISL.

Letter dated 31st March 2014  Duration: 24 months commencing from commissioning of Machine in Sri Lanka.

The machine has been leased on monthly hire charge basis. The agreed lease charges are comparable with those charged by International leasing companies for similar machines.

Not Applicable

NIL

Sl. No.

Name of the related party and nature of relationship

Nature of contracts / arrangements / transactions

Duration of contracts / arrangements / transactions

Salient terms of contracts / arrangements / transactions, including the value, if any

Date of approval by the BoD, if any

Amount paid as advances, if any

6

Indian Railway Stations Development Corporation Limited (IRSDC)
Subsidiary and Joint Venture Company with RLDA.

a)  Sub–Leasing of office premises at Palika Bhawan, Sector– XIII, R.K. Puram, New Delhi – 110066.

Lease Agreement dated 25th March 2014                                                  Duration –– 11 months.

Arrangement is on reimbursement of actual expenditure basis.

Not Applicable

NIL

b)  Sub–Leasing of office premises at Palika Bhawan, Sector– XIII, R.K. Puram, New Delhi – 110066.

Lease Agreement dated 25th March 2015                                            Duration –– 11 months.

Arrangement is on reimbursement of actual expenditure basis.

Not Applicable

NIL

Note:

 

1

Apart from above said transactions, other transactions, etc. entered with related parties are as follows:

     

(i)

The Company has also deputed its employees to wholly owned subsidiary companies (viz. IrconISL, IrconPBTL, and IRSDC), joint venture companies (viz. Ircon–Soma Tollway Private Limited (ISTPL)], and unincorporated joint ventures (viz. IRCON–AFONS JV). Deputation of employees is on actual cost (CTC) basis.

     

(ii)

Miscellaneous expenses such as advertisement cost, etc. incurred on behalf of subsidiaries IrconISL and IRSDC is reimbursed on actual basis.

     

(iii)

Office space provided to the wholly owned subsidiary companies (viz. IrconISL, IrconPBTL, and Ircon Shivpuri Guna Tollway Limited) and joint venture company (viz. ISTPL) is charged at the same rate as that of other tentants in the same building.

     

2

All the above said transactions has been approved by the Audit Committee of Ircon.

     

For and on behalf of the Board of Directors

  

                    Sd/–

 

(Mohan Tiwari)

  

Date

 

:   6th November 2015

Chairman & Managing Director

  

Place

 

:   New Delhi

(DIN : 00191363)

  


Appendix–G

ANNEXURE TO DIRECTORS REPORT

(Replies to comments in Auditors' Report on Standalone Financial Statements)

Auditors' Report

Para

Management Replies

4 (a)

The comments in the Auditors' Report inter–alia refer to Note 34 incorporated by the Company in the Accounts. The Note is self explanatory.

4 (b)

Auditors' opinion is in respect of agreements signed in the year 2007 & 2009 and ignores the factual position as per documents provided to them. The payments pertain to 8 projects for the period from 2007–08 to 2014–15 and were as a fixed %age (within the limit as per RBI) of actual payments received by the Company. Selection of these agencies & appointments were made by following the process laid down by the Company and availing of agency services is as per guidelines & industry practices. These projects have also been substantially completed. Entering into such agreements and release of payments do not require approval of the Board or that of Audit Committee as per Company’s delegation of powers. All the payments were made through banking channels only after receipt of payments by the Company & certification of satisfactory services by the Project Heads.

Documents for legal compliances were also shown to the auditors. No specific non compliance has been reported by the auditors under Para 4(b) or Para 8 relating to 'Report on Other Legal and Regulatory Requirements'.

Further, as reported by the auditors in the "Matter of Emphasis" in the report on previous year's financial statements that the 'Company has initiated steps to strengthen the policies, procedures and documentation in this regard', the Board of Directors of the Company has already approved comprehensive guidelines on the matter.

The Company has conveyed Management's view to the office of C&AG and requested them to examine relevant documents and give their comments/ advice on the above qualification.

8 (f)

The Company does not agree to the view that it will have any adverse effect on functioning of the Company.

Annexure to Auditors' Report:

Para

Management Replies

(iv)

Comprehensive guidelines as mentioned in Para 4(b) above have already been approved by the Board of Directors of the Company to strengthen the policies, procedures and documentation.

The scope, coverage and reporting requirements for internal audit are as per the Auditing Standards and Accounting Standards prescribed by the Institute of Chartered Accountants of India.

External firms of Chartered Accountants are engaged for Internal Audit of various units except for one foreign project which was done by qualified officers of the Company as in earlier years. Internal audit reports are reviewed by the Audit Committee on regular basis. There is no adverse comment on internal audit by the branch auditors. The Company is of the view that internal audit system is commensurate with size and nature of its business. However, improvement in Internal Audit System is a continuous process in the Company.

                                                                                                For and on behalf of the Board of Directors

                                                                                                         Sd/–

                                                                                  Mohan Tiwari

Date: 6th November 2015                                                      Chairman & Managing Director

Place: New Delhi                                                                                   (DIN : 00191363)


Appendix–H
 

ANNEXURE TO DIRECTORS REPORT

(Replies to comments in Auditors' Report on Consolidated Financial Statements)

Auditors' Report

Para

Management Replies

4 (a)

The comments in the Auditors' Report inter–alia refer to Note 36 incorporated by the Company in the Accounts. The Note is self–explanatory.

4 (b)

Auditors' opinion is in respect of agreements signed in the year 2007 & 2009 and ignores the factual position as per documents provided to them. The payments pertain to 8 projects for the period from 2007–08 to 2014–15 and were as a fixed %age (within the limit as per RBI) of actual payments received by the Company. Selection of these agencies & appointments were made by following the process laid down by the Company andavailing of agency services is as per guidelines & industry practices. These projects have also been substantially completed. Entering into such agreements and release of payments do not require approval of the Board or that of Audit Committee as per Company’s delegation of powers. All the payments were made through banking channels only after receipt of payments by the Company & certification of satisfactory services by the Project Heads.

Documents for legal compliances were also shown to the auditors. No specific non–compliance has been reported by the auditors under Para 4(b) or Para 8 relating to 'Report on Other Legal and Regulatory Requirements'.

                                                                        

Further, as reported by the auditors in the "Matter of Emphasis" in the report onprevious year's financial statements that the 'Company has initiated steps to strengthen the policies, procedures and documentation in this regard', the Board of Directors of the Company has already approved comprehensive guidelines on the matter.

The Company has conveyed Management's view to the office of C&AG and requested them to examine relevant documents and give their comments/ advice on the above qualification.

8 (f)

The Company does not agree to the view that it will have any adverse effect on functioning of the Company.

Annexure to Auditors' Report:

Para

Management Replies

(iv)

Comprehensive guidelines as mentioned in Para 4(b) above have already been approved by the Board of Directors of the Company to strengthen the policies, procedures and documentation.

The scope, coverage and reporting requirements for internal audit are as per the Auditing Standards and Accounting Standards prescribed by the Institute of Chartered Accountants of India.

External firms of Chartered Accountants are engaged for Internal Audit of various units except for one foreign project which was done by qualified officers of the Company as in earlier years. Internal audit reports are reviewed by the Audit Committee on regular basis. There is no adverse comment on internal audit by the branch auditors. The Company is of the view that internal audit system is commensurate with size and nature of its business. However, improvement in Internal Audit System is a continuous process in the Company.

For and on behalf of the Board of Directors

                                                                                                                Sd/–

                                                                                   Mohan Tiwari

Date: 6th November 2015                                                      Chairman & Managing Director

Place: New Delhi                                                                                   (DIN : 00191363)

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE STANDALONE FINANCIAL STATEMENTS OF IRCON INTERNATIONAL LIMITED, NEW DELHI FOR THE YEAR ENDED 31ST MARCH, 2015.

The preparation of financial statements of IRCON INTERNATIONAL LIMITED, NEW DELHI for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the company.  The statutory auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act are responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with standards on auditing prescribed under section 143(10) of the Act.  This is stated to have been done by them vide their Audit Report dated 13.10.2015.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of IRCON INTERNATIONAL LIMITED, NEW DELHI for the year ended 31 March 2015.  This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.  Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report.

Comments of C&AG

Management Reply

Comments on Disclosure

Notes forming part of financial statements

i

The company had submitted claims of Rs. 359.50 crore to Ministry of Transport (MoT), Government of Malaysia against the extension of time relating to Seremban Gemas Electrified double track project, against which Rs. 58.48 crore has been accepted by MoT during the year 2014–15.  However the company has not recognized this revenue in the financial statements following the conservative principle of accounting.  The fact of non recognition of this revenue should have been disclosed in the ‘Notes forming part of financial statements’ for the year 2014–15. Thus the notes forming part of financial statements are deficient to this extent.

Claim was approved by the consultant of the client on 13.01.2015. However, payment has not been received even till date.  In view of uncertainty in realisation, this remained a contingent asset, hence not accounted for/disclosed. However, comments are noted for future.

ii

Out of the above claims of Rs. 58.48 crore admitted by MoT, claims amounting to Rs. 8.60 crore are payable to the sub–contractors.  However, the company has neither made any provision for the claims payable to sub–contractors nor disclosed the fact of non provisioning of the claims in the ‘Notes forming part of financial statement’.

Since the claim from the client has not been recognised/disclosed as stated in reply to comment (i) above, corresponding claims of sub–contractors have also not been recognised based on matching principle of accounting (but included in contingent liability). However, comments are noted for future.  

For and on behalf of Board of Directors          

 For and on behalf of Comptroller & Auditor General of India

   Sd/–                                                                      sd/–                                  sd/–

Dinesh Bhargav                                    K.K. Garg                                Mohan Tiwari

Principal Director of Audit                    Director Finance              Chairman & Managing Director

(Railway Commercial)                          DIN: 01495050                  DIN: 00191363 

       New Delhi                                                                 New Delhi

23rd November, 2015                                              24th November, 2015

               

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF IRCON INTERNATIONAL LIMITED, NEW DELHI FOR THE YEAR ENDED 31ST MARCH 2015.

The preparation of consolidated financial statements of IRCON INTERNATIONAL LIMITED, NEW DELHI for the year ended 31st March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the company.  The statutory auditors appointed by the Comptroller and Auditor General of India under Section 139(5) read with Section 129(4) of the Act are responsible for expressing opinion on the financial statements under Section 143 read with Section 129(4) of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 13.10.2015.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6) (a) read with Section 129(4) of the Act of the consolidated financial statements of IRCON INTERNATIONAL LIMITED, NEW DELHI for the year ended 31st March 2015.  We conducted supplementary audit of the financial statements of the Subsidiaries namely Ircon Infrastructure & Services Limited, Ircon PB Tollway Limited and Indian Railway Stations Development Corporation Limited but did not conduct supplementary audit of Jointly Controlled Entities (as per list enclosed) for the year ended on that date. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.  On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditor’s report.

For and on behalf of the

Comptroller & Auditor General of India

Sd/–

(Dinesh Bhargav)

Principal Director of Audit

(Railway Commercial) 

Date: 23.11.2015

Place: New Delhi

List of Joint Ventures of IRCON INTERNATIONAL LIMITED, NEW DELHI for which suppkementay audit was not conducted under section 143(6)(a) read with section 129(4) of the Companies Act, 2013 for the year 2014–15.

Joint Ventures
1. RICON
2. Companhia Dos Caminhos De Ferro Da Beira SA (CCFB)
3. Ircon–Soma Tollway Private Limited (ISTPL).
4. International Metro Civil Contractors (IMCC).
5. Metro Tunnelling Group (MTG).
6. Ircon–SPSCPL U.J.V.
7. Ircon–Afcons JV.
8. Chattisgarh East Railway Limited (CVERL).
9. Chattisgarh East–West Railway Limited (CEWRL).

          Sd/–
Audit Officer (Hqr.)
 


 

Description of state of companies affair

DIRECTORS REPORT DISTINGUISHED SHAREHOLDERS The Directors of your Company have pleasure in presenting their 39th Report on the affairs of the Company for the financial year 2014–15. PERFORMANCE HIGHLIGHTS During the financial year 2014–15, your Company achieved a total operating income of Rs. 2950 crores and profit before tax of Rs. 844 crores as compared to operating income of Rs. 4067 crores and profit before tax of Rs. 1249 crores achieved during the previous financial year. The decline of about 27.46% in operating income is mainly on account of completion of foreign projects in Sri Lanka and Malaysia, though operating income from Indian projects has registered an increase of 7.40% from Rs.1930 crores in 2013–14 to Rs.2073 crores in 2014–15. Accordingly, profit, being a function of turnover, has also decreased. FINANCIAL HIGHLIGHTS Some important indicators of financial performance of the Company for the year 2014–15 vis–a–vis 2013–14 are given below: A. Financial Performance Indicators: (Rs. in crores) Sl. No.Particulars2014–152013–14Increase/ (Decrease) [in %] 1.Total income (Gross sales)31224307(27.52) 2.Total Operating income 29504067(27.46) 3.Operating income from Foreign Projects8772137(58.95) 4.Operating income from Indian Projects207319307.40 5.Profit before tax8441249(32.40) 6.Profit after tax579907(36.08) 7.Net worth3354299312.05 8.Dividend182.12182.12NIL B. Foreign Exchange Earnings and Outgo The Company has earned a foreign exchange of Rs. 842 crores during 2014–15 as compared to Rs. 2185 crores earned during 2013–14. The foreign exchange outgo stood at Rs. 424 crores during 2014–15 as compared to Rs. 1143 crores during 2013–14. Thus, the net foreign exchange earnings have decreased by 59.91% from Rs. 1042 crores in 2013–14 to Rs. 418 crores in 2014–15 due to completion of foreign projects as stated above. C. Dividend The Board of Directors (BoD) had declared in January 2015 an interim dividend of Rs. 79.184 crores @ Rs. 40/– per share i.e. 400% on the paid–up share capital of Rs. 19.796 crores, which was paid to the shareholders in February 2015. The BoD has recommended dividend @ Rs. 52 per share i.e. 520% on the paid–up share capital for declaration by the shareholders, which would amount to Rs. 102.94 crores. With this, the total dividend for the year 2014–15 would amount to Rs. 182.12 crores @ Rs.92.00 for every Rs. 10 share which works out to 31.43% of the post–tax profits of Rs. 579.39 crores. After approval and payment of the proposed dividend, the cumulative dividend to shareholders up to 2014–15 will stand at Rs. 939.25 crores. D. Appropriations/ Tax Provisions/ Reserves (Rs. in crores) Sl. No.Particulars2014–152013–14 1Interim Dividend79.18100.96 2Proposed Final Dividend102.9481.16 3Tax on Interim Dividend15.8317.16 4Tax on Proposed final dividend20.9614.56 5Transfer to / (from) CSR Activities Reserve(1.71)(1.19) 6Transfer to General Reserve362.19693.85 ORDER BOOK The Company secured works worth Rs. 5039 crores during the year 2014–15. The work load as on 31st March 2015 stood at Rs. 13293 crores as compared to Rs.12071 crores as on 31st March 2014 OPERATIONAL PERFORMANCE A. Foreign Projects Completed: Your Company completed following three projects in Sri Lanka during 2014–15: 1. Re–construction of railway line from Pallai to Kankesanthurai in Northern province of Sri Lanka, at a value of Rs. 815 crores. 2. Re–construction of Railway Line from Madhu Road to Talai Mannar in Northern Province of Sri Lanka, at a value of Rs. 793 crores. 3. Design, supply, installation, testing and commissioning of signaling & telecommunication system for the entire railway network in northern province of Sri Lanka (from Anuradhapura to Kankesanthurai and from Medawachchiya to Talaimannar Pier), at a value of Rs. 550 crores. B. New / On–going Foreign projects: Following four major projects, two in Bangladesh and one each in Algeria and Malaysia are in progress. Bangladesh 1. Construction of 2nd Bhairab Railway Bridge with Approach Rail Lines (Lot–A) –– being undertaken through unincorporated JV between your Company and AFCONS viz. IRCON–AFCONS JV, at a total value of Rs.223 crores (Ircon's share). 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, at a value of Rs. 60 crores. Algeria 3. Installation of a double track line (93 km) in Algeria awarded by ANESRIF, Government of Algeria, at a value of Rs. 1103 crores (USD 230 million) involving construction of second line and upgradation of existing line from Oued Sly to Yellel in Algier Oran section of Algerian Railways. The value of the contract including additional works for realisation of double line has been revised to Rs.1882 crores. Malaysia 4. Your Company continued to operate meter gauge diesel electric locomotives on Malaysian Railway System (KTMB) as per the lease and maintenance contract at annual value of USD 6.988 million. The contract has been extended up to 31st December 2015 at a value of Rs. 84 crores. C. Likely Foreign projects: Concerted efforts are being made to secure contracts in Oman, Bangladesh, Malaysia, Myanmar, and Sri Lanka. D. Projects Completed in India: During the year 2014–15, following three projects were completed in India. 1. Construction of Multi–functional complexes (MFCs), assigned by Ircon Infrastructure & Services Limited (IrconISL), at a value of Rs. 94 crores. 2. Design, Engineering, manufacturing, supply to site, construction, installation and Commissioning of Railway siding for Kalisindh Power Project, Stage I, Jhalawar for Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN), at a value of Rs. 165 crores. 3. Consultancy work for evaluation of assets installed by DAMPEL on Airport Express Line of Delhi MRTS, for Delhi Metro Rail Corporation Limited (DMRC), at a value of Rs. 8.55 crores. E. New Projects in India: During 2014–15 your Company secured following major projects in India: 1. Preparation and submission of Detailed Project Report, Land Acquisition and feasibility study of East–West Corridor between Gevra Road to Pendra Road in the State of Chhattisgarh, for Chhattisgarh East–West Railway Limited at a value of Rs. 72 crores. 2. Widening and Strengthening of existing Bikaner–Phalodi section to Four–lane from Km. 4.200 to Km. 55.250 and Two–Lane with paved shoulder from Km. 55.250 to Km. 163.500 of NH–15 on BOT (Toll) basis in the State of Rajasthan, for Ircon PB Tollway Limited, at a value of Rs. 646 crores. 3. Four–laning of Shivpuri to Guna from Km 236.00 to Km 332.100 (Package–I) in the State of Madhya Pradesh to be executed on BOT (Toll) on DBFOT pattern under NHDP Phase–IV), for Ircon Shivpuri Guna Tollway Limited, at a value of Rs. 721 crores. 4. Detailed Project Report & Detailed Engineering Project Management & Construction of Coal Transportation System including associated Electrical Package for Darlipali Super Thermal Power project, Stage–I (2x800 MW) for NTPC Limited, at a value of Rs. 26 crores. 5. The work of establishment of SCADA compatibility and improving quality of consumer supply in Meerut Town, Ghaziabad Town, Moradabad Town, and Saharanpur Town to be carried out under R–APDRP Part B scheme on turnkey basis including supply of material for Paschimanchal Vidyut Vitran Nigam Limited (PVVNL), at a value of Rs. 539 crores. 6. The work of system improvement, strengthening and augmentation of distribution system to bring down AT&C losses and improve quality of consumer supply of Meerut town of Uttar Pradesh, to be carried out under RAPDRP Part–B scheme on turnkey basis including supply of material for PVVNL, at a total value of Rs. 566 crores. 7. Contract KT–4: Design, Supply, Installation, Testing and Commissioning of Ballastless Track of Standard Gauge in elevated section of Aluva to Petta corridor of Kochi Metro Rail Limited, at a value of Rs. 162 crores. 8. Contract CT–1–A Supply, Installation, Testing and Commissioning of Ballastless Track of Standard Gauge, Part–1 Corridor of sections of Mukundpur Lajpat Nagar (excluding) Line–7 in elevated and underground sections along with ballasted / ballastless tracks in Mukundpur Depot for Delhi MRTS Project of Phase–III), for DMRC, at a value of Rs. 198 crores. 9. Carrying out Topographical and Geo–Technical Survey, Preparation of Master Plan for proposed campus, planning, designing and construction of boundary wall and allied preparatory works, for the National Institute of Technology, Aizwal, Mizoram, at a value of Rs. 61 crore. F. On–going major Projects in India: The following are the on–going projects: 1. Design, and Construction of BG New Railway line from Dharam to Qazigund (Dharam Qazigund) Km 100.88 to Km 168 in the State of Jammu & Kashmir (J&K), including additional works, for Northern Railway, at a value of Rs. 6743 crores. 2. Setting up of new Rail Coach Factory at Rae Bareli, including additional works, for Ministry of Railways, at a value of Rs. 2297 crores. 3. Construction of Corridor–I of East Corridor between Kharsia to Dharamjaygarh in the State of Chhattisgarh, for Chhattisgarh East Railway Limited, at a value of Rs. 1430 crores. 4. Construction of steel super–structure and other ancillary work of rail cum road bridge across river Ganga at Patna, for East Central Railway, at a value of Rs. 1570 crores. 5. Sivok–Rangpo New Rail Line Project, for North Frontier Railway, at a value of Rs. 1339 crores. 6. Construction of Road Over Bridges (RoBs) in Bihar (Phase II) and Rajasthan, for Ministry of Railways and Government of Rajasthan or its various department/ local bodies respectively, at a value of Rs. 1159 crores and Rs. 507 crores respectively. 7. Construction / upgradation of Rural roads and bridges in 5 districts (Garhwa, Gumla, Ranchi, Lohardaga and Simdega) of Jharkhand PMGSY Project at a value of Rs. 525 crores for Ministry of Rural Development, Government of India and State Government of Jharkhand. 8. R–APDRP – Part B Project under Jammu province (Cluster–I, Jammu left), (Cluster–II, Jammu Right), and (Cluster–IV) (Akhnoor, Rajouri, Poonch, Udhampur, Doda, Kishtwar & Bhaderwah), for J&K Power Development Department, at a total value of Rs. 682 crores. 9. Construction of rail link between Jayanagar (India) Bijalpura (Nepal) (Gauge conversion) with extension up to Bardibas on India–Nepal Border, for East Central Railway, at a value of Rs. 447 crores. 10. Construction of Rail Link between Jogbani (Bihar) India to Biratnagar (Nepal), for North Frontier Railway, at a value of Rs. 239 crores. 11. Railway Electrification work for Banihal–Baramulla section (137.73 Kms) part of Udhampur–Srinagar–Baramulla Rail Link Project (USBRL), for Northern Railway, at a value of Rs. 144 crores. 12. Design, supply, installation, testing & commissioning of receiving–cum–traction and auxiliary main sub–station including high voltage cabling from grid sub–station and augmentation works for existing receiving sub–station under CE–6, Lot–1, for DMRC for Delhi MRTS project, Phase–III at a value of Rs. 234 crores. 13. Setting up of three electric loco sheds to home 200 three phase Locos at Bondamunda (for South Eastern Railway), Daund (for Central Railway), and Mughalsarai, (for Northern Railway), at a value of Rs. 234 crores. 14. Development of circulating area at Santragachi and essential passenger amenities and road connectivity to Kona Expressway, for South Eastern Railway, at a value of Rs. 210 crores. 15. Development of coaching terminal at Shalimar by provision of essential passenger amenities, for South Eastern Railway, at a value of Rs. 205 crores. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES A brief background on the subsidiary companies, joint venture and associate companies of Ircon along with their financials and performance is given below. Details of equity investments, loans given, and guarantees extended under section 186 of the Companies Act, 2013, to the subsidiaries, joint ventures, and associate companies are given at para E(3) under the heading 'Compliances': A. Subsidiary Companies: 1. Ircon Infrastructure & Services Limited (IrconISL) IrconISL, a wholly owned subsidiary of Ircon, was incorporated on 30th September 2009 and obtained a Certificate of Commencement of Business on 10th November 2009. The main object of IrconISL is to undertake infrastructure projects including planning, designing, development, improvement etc. in the field of construction of Multi Functional Complexes (MFCs), etc., to provide facilities and amenities to users of Indian Railway System, and to carry on the business of hire purchasing, leasing of all kinds of moveable and immoveable properties, to provide consultancy for all kinds of engineering projects including providing maintenance, support, and all kinds of services including social welfare measures, etc. During 2014–15, in addition to two consultancy projects secured from Ministry of External Affairs viz. preparation of feasibility report and Detailed Project Report for Road and Bridge Projects in Myanmar, IrconISL executed the work for construction of toilets blocks (4786 toilets) under Swachh Bharat Abhiyan for PSUs like Ircon International Limited, Power Grid Corporation of India Limited, Power Finance Corporation Limited, Indian Renewable Energy Development Agency Limited, and South Eastern Coalfields Limited. The work was completed after the close of the year. Out of 23 MFCs undertaken by IrconISL, 19 MFCs have been sub–leased to operators. Financials of IrconISL: During the year 2014–15, IrconISL has increased its authorised share capital from Rs. 40 crores to Rs. 65 crores. Ircon has subscribed to the additional share capital of Rs. 25 crores on 31st March 2015. The shares for the said amount were allotted on 25th May 2015, after the close of the year. Therefore, share application money pending allotment, as on 31st March 2015, stood at Rs. 25 crores. The present subscribed and paid–up share capital of IrconISL stands at Rs. 65 crores. The operating income of IrconISL during 2014–15 has been Rs. 36.39 crores and profit before tax has been Rs. 20.29 crores. 2. Indian Railway Stations Development Corporation Limited (IRSDC) IRSDC, a subsidiary company of Ircon and JV Company with Rail Land Development Authority (RLDA), was incorporated on 12th April 2012 and it obtained a Certificate of Commencement of Business on 9th May 2012. The main object of IRSDC is to develop/ re–develop the existing / new railway station (s) which will consist of upgrading the level of passenger amenities by new constructions/ renovations including re–development of the station buildings, platform surfaces, circulating area, etc., to better standards so as to serve the need of the passengers in India, and commercial development of land/ air space. The equity participation of Ircon and RLDA in IRSDC is in the ratio of 51:49 respectively. IRSDC has been entrusted with 6 stations located at Chandigarh, Habibganj (Bhopal), Shivaji Nagar (Pune), Bijwasan (New Delhi), Anand Vihar (Delhi), and Surat (Gujarat) for development/re–development. The projects will be implemented on Self Development Model or Third Party Development or combination of both wherein IRSDC would be granted leasehold rights of the site for Commercial Development, Right of Way, and Licence for the purpose of undertaking station development and re–development Works. Financials of IRSDC The authorised share capital of IRSDC is Rs. 100 crores and subscribed & paid–up share capital is Rs. 40 crores. IRSDC is in construction phase and yet to achieve any operating turnover. During the year, IRSDC earned a profit before tax of Rs. 1.98 crores mainly on account of interest income. 3. Ircon PB Tollway Limited (IrconPBTL) During the year 2014–15, your Company had formed another wholly–owned subsidiary by the name Ircon PB Tollway Limited (IrconPBTL) incorporated as a Special Purpose Vehicle on 30th September 2014, pursuant to conditions of award of project viz. widening and strengthening of Bikaner–Phalodi section in the State of Rajasthan, by National Highways Authority of India (NHAI). IrconPBTL has obtained approval for commencement of business from the Registrar of Companies on 14th November 2014. The main object of IrconPBTL is to carry on the business of widening and strengthening of the existing Bikaner & Phalodi Section to four lane from 4.200 km to 55.250 km and Two Lane with paved shoulder from 55.250 km to 163.500 km of NH–15 on Build, Operate, and Transfer (BOT) (Toll) basis in the State of Rajasthan, in accordance with the terms of the Concession Agreement signed with the NHAI. IrconPBTL has signed the concession agreement with NHAI on 7th November 2014. IrconPBTL has submitted relevant documents to NHAI to achieve financial close. Execution of the project would be taken up after intimation of appointed date by NHAI. Financials of IrconPBTL: The authorized share capital of IrconPBTL is Rs. 175 crores. Ircon has subscribed to the additional share capital of Rs. 85 crores on 31st March 2015. The shares for the said amount were allotted on 29th April 2015, after the close of the year. Therefore, share application money pending allotment, as on 31st March 2015, stood at Rs. 85 crores. The present subscribed and paid–up share capital of IrconPBTL stands at Rs. 90 crores. IrconPBTL is yet to start its operations. 4. Ircon Shivpuri Guna Tollway Limited (IrconSGTL) After the close of the year, your Company has formed another wholly–owned subsidiary company by the name 'Ircon Shivpuri Guna Tollway Limited' (IrconSGTL) on 12th May 2015, pursuant to conditions of award of Shivpuri–Guna Project in the State of Madhya Pradesh by NHAI. IrconSGTL has obtained approval for commencement of business from the Registrar of Companies on 27th May 2015. The main object of IrconSGTL is to carry on the business of four laning of Shivpuri–Guna section of NH–3 from 236.00 km to 332.1 km on Build, Operate, and Transfer (BOT) (Toll) basis on Design, Build, Finance, Operate and Transfer 'DBFOT' pattern under NHDP Phase–IV in the State of Madhya Pradesh in accordance with the terms of the Concession Agreement, signed with the NHAI, and other ancillary works relating thereto. IrconSGTL has signed the Concession Agreement with NHAI on 15th June 2015. IrconSGTL is yet to submit relevant documents to NHAI to achieve financial close. Execution of the project would be taken up after achieving financial close and intimation of appointed date by NHAI. Financials of IrconSGTL: The authorized share capital of IrconSGTL is Rs. 150 crores and its subscribed and paid–up share capital is Rs. 3 crores. B. Joint Venture Companies (JVCs) –– In India: 5. Ircon–Soma Tollway Private Limited (ISTPL) 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 in private sector), for executing a BOT project for four laning of Pimpalgaon–Dhule section of NH–3 from km 380 to km 265 in Maharashtra for NHAI. The project was completed in 2010–11 and ISTPL is earning toll on the entire stretch of 118.158 km. Financials of ISTPL: The authorized share capital of ISTPL is Rs. 130 crores and its subscribed and paid–up share capital is Rs. 127.74 crores. During the year ISTPL has achieved operating turnover of Rs. 155.34 crores and incurred a loss of Rs. 15.67 crores. Your Company had entered into a tripartite pledge agreement with ISTPL and PNB to pledge 30% of its shareholding in ISTPL, in favour of Punjab National Bank (PNB); a non–disposal undertaking with respect to 21% of its shareholding; and to make good 50% of any shortfall in dues, if any, to PNB in the event of the termination of the Concession Agreement. The said pledge agreement and non–disposal undertaking had been, executed as 50% equity partner in ISTPL, in connection with a loan of Rs. 521.53 crores availed by ISTPL in 2011–12. The outstanding balance of this loan as on 31st March 2015 is Rs. 325.20 crores. The details regarding this loan and related undertakings have also been disclosed in Note no. 12 forming part of the Standalone Financial Statements. 6. Chhattisgarh East Railway Limited (CERL) A joint venture company (JVC) called 'Chhattisgarh East Railway Limited' (CERL) was incorporated on 12th March 2013, with equity participation by South Eastern Coalfields Limited, Ircon, and Chhattisgarh State Industrial Development Corporation Limited [nominee of Govt. of Chhattisgarh (GoCG)] in the ratio of 64:26:10 respectively, for development of coal connectivity corridor i.e. East Corridor (length 180 Km) in the State of Chhattisgarh. CERL had obtained the Certificate for Commencement of Business on 7th May 2013. CERL has signed concession agreement for Phase I (comprising 104 km) of the East Corridor Coal connectivity project on 12th June 2015 with Ministry of Railways. Phase I of the project is being implemented for Build, Own, Operate, and Transfer (BOOT) model for PPP projects. Physical work has started after acquisition of 64 km of land, for which about Rs. 100 crores had been invested. Financials of CERL: As on 31st March 2015, the authorized share capital of CERL is Rs. 5 crores and subscribed and paid–up share capital is Rs. 4.055 crores. CERL is yet to start commercial operations. 7. Chhattisgarh East–West Railway Limited (CEWRL) A joint venture company (JVC) called 'Chhattisgarh East–West Railway Limited' (CEWRL) was incorporated on 25th March 2013, with equity participation by South Eastern Coalfields Limited, Ircon, and Chhattisgarh State Industrial Development Corporation Limited (CSIDC) (nominee of GoCG) in the ratio of 64:26:10 respectively, for development of coal connectivity corridor i.e. East West Corridor (length 122 Km) in the State of Chhattisgarh. CEWRL had obtained the Certificate for Commencement of Business on 7th May 2013. Detailed Project Report (DPR) has been approved by the concerned Railway during July 2015, and implementation work has started. Financials of CEWRL: The authorized share capital of CEWRL is Rs. 5 crores and its subscribed and paid–up share capital is Rs. 4.055 crores. CEWRL is yet to start commercial operations. C. Joint Venture Companies (JVCs) Outside India: 8. Companhia Dos Caminhos De Ferro Da Beira (CCFB) A joint venture company "Companhia Dos Caminhos De Ferro Da Beira" (CCFB), was incorporated in Mozambique during 2004 to execute Beira Rail Concession Project. Your Company has 25% equity stake in CCFB along with RITES having 26%, and CFM, a railway undertaking of Mozambique, having 49% equity stake. Financials of CCFB: Your Company's equity stake of 25% in CCFB is represented by USD 1.25 million (Rs. 5.53 crores). CCFB had been granted following loans by your Company: ParticularsAmount as on 31.03.2015 (USD million) (in Rs.crores) Loan5.08322.48 Conditional shareholders loan15.04166.53 Shareholders loan1.14227.115 Total21.26696.125 The details of loan have been disclosed in Note no. 34 forming part of the Standalone Financial Statements. Though track rehabilitation work had been completed and trains started un–interrupted movements for carrying coal, however, the Conceding Authority (Minister of Transport and Communications, Government of Mozambique) had terminated and took over the Concession in December 2011. Efforts were made for amicable settlement which did not succeed. Accordingly, CCFB had initiated arbitration proceedings against Government of Mozambique under International Chamber of Commerce Rules, and filed request for Arbitration with International Court of Arbitration. A suitable provision has been made against the investment following a conservative approach. Efforts for amicable settlement of the dispute were also going on simultaneously and an agreement to settle the dispute has been signed with Govt. of Mozambique on 21st October 2015 as per which the Company will be able to retrieve its entire investment in installments over a period of time. Accounting adjustments will be made on receipt of amount of 1st installment. D. Unincorporated Joint Ventures (UJVs) For projects in operation: 9. IRCON–SPSCPL This unincorporated joint venture with S.P. Singla Constructions Private Limited (SPSCPL), having participating interest of 50:50 by Ircon and SPSCPL respectively, is for design and construction of 592 m long cable stayed major permanent bridge over river Ravi in the State of Jammu & Kashmir. The project was awarded to the UJV on 27th August 2010 at a value of Rs. 145.43 crores. The overall progress of the project as on 31st March 2015 is 83.67% and the work is likely to be completed in December 2015. Financials: During the year, this UJV has achieved operating turnover of Rs. 82.33 crores and profit before tax of Rs. 6.47 crores. 10. IRCON–AFCONS JV This unincorporated joint venture with Afcons Infrastructure Limited (Afcons), having participating interest of 53:47 by Ircon and Afcons respectively, is for Construction of 2nd Bhairab Railway Bridges with approach Rail Lines in Bangladesh. The agreement for the project was signed on 10th September 2013 at a value of BD Taka 567.17 crores. The overall progress of the project is 48% as on 31st July 2015, and the work is likely to be completed in September 2016. Financials: During the year, this UJV has achieved operating turnover of Rs. 94.13 crores and profit before tax of Rs. 8.45 crores. E. Unincorporated Joint Ventures (UJVs) –– For completed projects: 11. RICON This unincorporated joint venture with Rites Limited (RITES) was for securing and executing contracts awarded by CCFB. The participating interest of RITES and Ircon in this UJV is 51% and 49% respectively. The work assigned to the UJV was completed in 2011. However, the UJV had not been wound up on account of pending settlement with CCFB. Financials: During the year RICON has achieved profit before tax of Rs. 0.74 crores. 12. International Metro Civil Contractor (IMCC) This unincorporated joint venture with four other companies viz. Dyckerhoff & Widmann Aktiengesellschaft (DYWIDAG) in Germany, Larsen & Toubro Limited (L&T), Samsung Corporation (Samsung), Ircon, and Shimizu Corporation (Shimizu), Japan, was made in 2001 for securing and executing construction of Delhi Metro Corridor–Mass Rapid Transport System Phase I Tunnel Project Package MC1B project of Delhi Metro Rail Corporation (DMRC). The participating interest of DYWIDAG, L&T, Samsung, Ircon, and Shimizu is 29%, 26%, 26%, 9.5%, and 9.5% respectively. The project awarded to this UJV was completed in 2005, however, on account of pending matters with tax authorities and other commercial issues, the UJV has not been wound up. Financials: During the year IMCC had incurred a loss of Rs. 0.40 crores. 13. Metro Tunnelling Group (MTG) This unincorporated joint venture with four other companies DYWIDAG International GmbH (DYWIDAG) in Germany, Larsen & Toubro Limited (L&T), Samsung Corporation (Samsung), Ircon, and Shimizu Corporation (Shimizu), Japan, was made in 2006 for securing and executing Design and Construction of Tunnel by shield TBM and Stations by Cut & Cover on Central Secretariat Qutub Minar Corridor of Phase–II of Delhi MRTS Project Packages BC 16 and Package BC 18 of DMRC. The participating interest in DYWIDAG, L&T, Samsung, Ircon, and Shimizu is 29%, 26%, 26%, 9.5%, and 9.5% respectively. The project was completed in 2010, however, the UJV is yet to be wound up on account of pending matters with tax authorities. Financials: During the year MTG has achieved profit before tax of Rs. 4.30 crores which mainly consists of interest income. 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 with its three subsidiaries viz. IrconISL, IRSDC, and IrconPBTL, and four joint venture companies viz. ISTPL, CERL, CEWRL, and CCFB; and five un–incorporated Joint Ventures viz. RICON, IMCC, MTG, IRCON–SPSCPL, and IRCON–AFCONS JV. The Board of Directors of your Company has, at its meeting held on 28th July 2015, approved the Standalone Financial Statements for 2014–15. The Consolidated Financial Statements were approved at a meeting of the Board of Directors held on 14th August 2015. All the above said subsidiaries, joint venture companies, and un–incorporated Joint Ventures in India have financial year ending on 31st March except CCFB (Joint Venture Company in foreign country) which is having a financial year ending on 31st December. Your Company would make available audited financial statements (standalone and consolidated financial statements) and accounts of its subsidiaries (IrconISL, IRSDC, and IrconPBTL), joint venture companies (ISTPL, CERL, CEWRL, and CCFB), and un–incorporated joint ventures (RICON, IMCC, MTG, IRCON–SPSCPL, and IRCON–AFCONS) at its website (www.ircon.org). Further, the accounts of these subsidiaries and joint ventures would be made available upon request by any shareholder of the Company. A statement containing the salient features of the financial statements of these subsidiaries and joint ventures in form AOC–1 is attached with the Financial Statements. COMPLIANCES: A. Disclosure of Accounting Treatment: Dues of Beira Rail Concession Project – The principal and interest accrued on loan extended to CCFB have been translated at the exchange rate prevailing as on 31st March 2011 (i.e. 1 USD = Rs. 44.23), based on prudence, instead of rates on the date of balance sheet as required under the provisions of AS–11. The details are given in Note no. 34 forming part of the Standalone Financial Statements. B. Presidential Directive: No Presidential directive was received during the year 2014–15. C. Official language: Regular quarterly meetings of Official Language Implementation Committee and workshops for effective use of the unicode system and official language are being conducted. 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 Ircon's Intranet for use by the employees. As initiative for pervasive use of Hindi, daily, a thought and a word in Hindi is displayed at the reception. D. 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, State Level Public Information Officer and Assistant Public Information Officer are posted on Ircon's website. Queries received are replied within the stipulated time. The queries are usually in the nature of service matters, related to finance, contract, and projects. The details of RTI cases have been forwarded to the Ministry of Railways for publication on the website of Central Information Commission (CIC) website on quarterly as well as annual basis. During the year, 156 queries out of 170 applications (inclusive of 1st and 2nd appeal) were processed / disposed off. E. Companies Act, 2013 1. Particulars of employees In terms of the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employee has drawn remuneration of Rs. 60 lakhs or more or Rs. 5 lakhs or more per month during the year 2014–15, except Chairman and Managing Director who has drawn salary of Rs. 60.70 lakhs during the year 2014–15, details of which are given in para 4.1 of the Corporate Governance Report. 2. Deposits During the year under review, your Company did not accept any deposits from public. 3. Particulars of investments, loans, and guarantees and securities under section 186 of the Companies Act, 2013 Investments made, loans granted, and guarantees extended by your Company in terms of section 186 of the Companies Act, 2013, up to 31st March 2015 are as under: Sl. No.Name of the CompanyAmount (Rs. in crores) CommittedActually invested Equity Investment: a)Subsidiary Companies i) IrconISL65.0065.00 ii) IRSDC40.8020.40 iii) IrconPBTL165.0090.00 b)Joint Venture companies i) ISTPL63.8763.87 ii) CERL1.301.17 iii) CEWRL1.301.17 iv) CCFB5.535.53 Loan : a)Subsidiary Companies i) IrconISL (See Note no. 2)64.9064.90 ii) IrconPBTL (See Note no. 3)352.00Nil b)Joint Venture Companies i) CERL (See Note no. 4)39.0030.00 ii) CEWRL (See Note no. 5)39.00Nil iii) CCFB (See Note no. 6)101.8895.94 c)Unincorporated Joint Ventures IRCON–AFCONS JV (See Note no. 7)18.1518.11 Guarantee: a)Joint Venture Companies ISTPL 162.60162.60 Bonds: a)IRFC Bonds (See Note no. 8)–166.18 NOTES: 1. Apart from the above, your Company has extended following financial assistance to its wholly owned subsidiary (WOS) companies and unincorporated joint ventures (UJV): i) Allocation of Rs. 150 crores (revolving) of Ircon's non–funded credit limits sanctioned by Indian Overseas Bank to be utilized by three WOS viz. IrconISL, IrconPBTL, and IrconSGTL for facilitating issue of bank guarantees(s) by the Banker in favour of their client as may be required by them to carry on their business. ii) Allocation of Rs. 90 crores (revolving) of Ircon's non–funded credit limits sanctioned by State Bank of India to be utilized by UJV viz. IRCON–AFCONS JV for facilitating issue of bank guarantees(s) by the Banker in favour of their client as may be required by them to carry on their business. 2. Loan (a) (i) Loan was extended for meeting capital expenditure on construction of multi–functional complexes (MFC). After part repayment, the outstanding loan as on date is Rs. 31.50 crores. 3. Loan (a) (ii): Loan is to be utilized for execution of Bikaner Phalodi Highway project in the State of Rajasthan. 4. Loan (b) (i): Loan has been extended for construction of a Rail line project from Kharsia to Dhramjaigarh in the State of Chhattisgarh. 5. Loan (b) (ii): Loan has been extended for payment of land compensation, consultancy fee, etc. before financial close by CEWRL pending decision on debt–equity structure and other aspects. 6. Loan (b) (iii): Details have been disclosed under the heading 'CCFB' (under Subsidiaries, Joint Ventures, and Associate Companies at para C8) of this Report, and also disclosed in note no. 34 forming part of the Standalone Financial Statements. 7. Loan (c): Loan has been extended for working capital requirement in connection with construction of 2nd Bhairab Railway Bridge project in Bangladesh. 8. Bonds: Details of investments are disclosed in note no. 12 forming part of the Standalone Financial Statements. The BOD had accorded approval in July 2014 for further investment, up to Rs. 150 crores in bonds of public sector undertakings, to be utilized on or before 31st July 2015 against which no investment was made. After the close of the financial year, your Company has further made/ committed following investments and loan to its subsidiaries and proposed joint ventures companies, up to 31st July 2015: Sl. No.Name of the CompanyAmount (Rs. in crores) CommittedActually invested Equity Investment: a)Subsidiary Companies: i) IrconSGTL150.003.00 b)Proposed Joint Venture Companies i) In Jharkhand1.30Nil ii) In Odisha1.30Nil iii) In Chhattisgarh1.30Nil Loan: a)Subsidiary Companies: IrconSGTL (see note no. 1)722.11Nil Note: 1. Loan to IrconSGTL has been approved for execution of Shivpuri Guna Highway project in the State of Madhya Pradesh. 4. Related Party Transactions: The related party transactions entered during the year had been in the ordinary course of business and on arm's length basis. Form AOC–2 in terms of section 134(3) (h) of the Companies Act, 2013, read with rule 8 (2) of the Companies (Accounts) Rules, 2014, is placed as AppendixF. 5. Significant and material orders passed by the Regulators/ Courts/ 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. 6. Internal Control System and Risk Management Details of the internal control system and risk management are provided in the Management Discussion and Analysis Report. PERSONNEL DEVELOPMENT Cordial and harmonious industrial relations prevailed in the Company during the year. The total manpower strength as on 31st March 2015 stood at 1472, which included 88 deputationists majority of whom (i.e. 68) were deployed on foreign projects. 1271 were regular employees out of which 1114 were employed on Indian projects. The total number of women employees was 69, out of which 41 were executives. 884 employees of the Company were technically and professionally qualified. There are a total of 225 scheduled caste/ scheduled tribe employees as on 31st March 2015. Your Company has been continuously taking steps for building capacity of its human resources through training in functional and general management areas, 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 2014–15, a total 1240 man–days training was imparted to officials of Ircon through workshops, seminars, conferences, etc. in external institutes, in–house trainings, 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, etc. to meritorious children of employees, educational assistance to the wards of deceased employees, assistance for marriage of daughters and dependent sisters of group C and D employees, etc. Apart from facility of homeopathy 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. Gym facilities are also available in corporate office and Rae Bareli Project office. 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. During the year 2014–15, no complaints relating to sexual harassment has been received by the Company. Your Company is gradually moving towards a competency based framework for managing Human Resources. The first step in this direction was Get Ready To Outperform and Win (GROW) project with the aim of building competency map for the organization while also identifying the competency pool for all employees at all levels of organization. During the year, 151 man–days training in behavioral and leadership areas was imparted under GROW project. During the year the Company developed succession planning framework policy for senior management levels (E7 to E9) to ensure a steady flow of future leaders from within the organization. Online grievance redressal system has been introduced in the Company for effective redressal of employees' grievances. The 39th Annual Day was celebrated on 28th April 2015 with traditional fervor and gaiety. On this occasion, exemplary work done by employees in Indian as well as foreign projects and select projects was appreciated and rewarded. Educational awards to meritorious children of the employees were also given on this occasion. 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 Suddeutschland Private Limited (TUV). Your Company continued the certification and sustained the system as per latest revised code ISO 9001:2008 (by periodical recertification audit after expiry of three years). Latest re–certification audit has been conducted in May 2014, whereby the Company has been re–certified by TUV for a period of another three years i.e. up to September 2017. During the year, Quality Management Department has initiated knowledge sharing by disseminating information on concrete work as per latest amendment to IS 456:2000, Rebar and Rebar work for improvement in reinforcement work for construction projects, information on spurious TMT bars in market, etc. Your Company established an Environment Management System (EMS) and was certified for ISO 14001:2004 in October 2011. The latest re–certification audit has been conducted in June 2014 whereby the Company has been re–certified for another three years i.e. up to October 2017. The Company nominates Environment officers at all Indian projects to monitor EMS at their respective projects. In addition, the Company has a fully operational environmental lab in Jammu for study of impacts on environment by the construction activities. The Company has started monitoring of wastage of water, air quality and noise quality at its various construction sites and residential complexes. Environmental friendly equipments such as solar heater/ solar lights are also being installed at various projects. Waste water is recycled through Sewage Treatment Plant (STP), and the same is used for horticulture work. Your Company has also been certified for Occupational Health & Safety Management System (OHSAS BS 18001:2007) in December 2012 by TUV SUD South Asia. This certificate is valid till December 2015. 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. In addition, in–house trainings are also conducted on safety against fire, environmental protection, identification of hazards, accidental/ incident reporting system, etc. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION On energy conservation front, your company 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 cost of Rs. 15.60 crores. On being fully operational, this solar power plant would meet about one fourth of power requirement for the factory. Your company has also undertaken installation of LED light fittings at its Corporate Office as energy conservation measure. Technology absorption has been undertaken through execution of following works: 1. Geographical Information System (GIS) based Overhead Equipment (OHE) Design for Railway Electrification work of Banihal–Baramulla section in USBRL project in the State of J&K. 2. In CE–6 project of DMRC your Company has used following for the first time: a) 66KV cable with VCV manufacturing process from Indian vendor b) 25 KV CB with current rating of 3000 Amperes New Austria Tunnelling Method (NATM) is proposed to be adopted for construction of tunnels in SivokRangpo project. This method is very useful in complex diversified geological condition where forecasting of the rock mass is difficult due to rapidly changing geology. 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 developed Layout Plan (LOP) using software for work of GIS OHE design for Railway Electrification work of Banihal–Baramulla section of USBRL project in the State of J&K. TECHNOLOGY UPGRADATION AND ABSORPTION 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 modern technology and state of the art equipments in execution of infrastructure projects. INFORMATION TECHNOLOGY AND DEVELOPMENT OF ERP SAP ECC 6.0 based Finance–Controlling and HCM module had been successfully implemented and rolled–out on all project offices and corporate office. Updated and current data related to finance and human resources domain can be accessed from anywhere by employees of the Company. To reduce paper usage and transparent working, use of IT has been enhanced in all the functional domains. Company's Intranet and Internet sites have been improved to publish Office orders, circulars, and notifications. VIGILANCE ACTIVITIES 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 carries out investigations into complaints. During the year, eight inspections were carried out on various projects / units. Chief Technical Examiners Office (CTEO) has also conducted inspections of three major projects of IRCON. Complaints received from various authorities (like CVC, Railway Board, Vigilance), and other sources were investigated to their logical conclusion. Based on the outcome of investigation, circulars on improvements in the areas of tenders, contracts, HRM, finance, project management, etc. were issued to avoid recurrence of irregularities / procedural errors and to plug loopholes in system. Steps were also taken for closure of paras raised by the CTEO. 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 leveraging technology for better transparency, your company has taken steps like online submission of Immovable Property Returns by officers; online Disciplinary and Vigilance Clearance through intranet portal of the Company; online compliant on Vigilance section/ portal at Ircon's website; E–procurement has already been started in the Company in a comprehensive manner for achieving greater transparency. Vigilance department strives to achieve its objective of promoting an impartial, fearless, and transparent environment in functioning of the organisation by taking steps to prevent unethical practices. The tenure of the previous CVO ended on 5th June 2015 and pending appointment of a new CVO, the functions are being discharged by Executive Director (Projects) of the Company. INTEGRITY PACT The CVC has recommended adoption of Integrity Pact in respect of major procurements in the Government Organisations. Your Company has signed a Memorandum of Understanding with Transparency International India (TII) on 22nd April 2014 for adoption and implementation of Integrity Pact. Accordingly, Integrity Pact has been implemented for tenders / contract for works and supply valuing of Rs. 5 crore and above on all Indian Projects. The Company has appointed one Independent External Monitor (IEM) to monitor the activities in consultation with CVC. AWARDS Your Company has received following awards during the year: 1. Asia Pacific HRM Congress Award 2014 for 'Organisation with innovative HR Practices'. The award was received by Mr. H. D. Doddaiah, Addl. General Manager (Southern Region), Ircon, at a function held in Bengaluru on 11th September 2014. 2. Dun and Bradstreet Infra Awards 2014, in the category of 'Construction and Infrastructure Development (Railways)'. The award was received by Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in Mumbai on 30th October 2014. 3. SCOPE Meritorious Award under the category of 'Corporate Social Responsibility & Responsiveness for the year 2012–13. The Commendation certificate was received by Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, from Mr. Anant Geete, Union Minister of Heavy Industries & Public Enterprise, Government of India, in the presence of President of India, Mr. Pranab Mukherjee, at a function held in New Delhi on 5th November 2014. 4. National Award for Excellence in Cost Management 2013 instituted by Institute of Cost Accountants of India for 'Excellence in Cost Management Public Service Sector (Large)'. The award was presented by Mr. Jayant Sinha, Minister of State for Finance, to Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in New Delhi on 25th November 2014. 5. Vishwakarma Award 2015 from Construction Industry Development Council (CIDC) in the category of best professionally managed company with a turnover of more than Rs. 1,000 crores. The award was presented by Mr. Satyendra Jain, Minister of Health, Power and Public Works Department, Government of NCT of Delhi, to Mr. K.K. Garg, Director Finance, Ircon, at a function held in New Delhi on 14th March 2015. Your Company received following awards after the close of the financial year 2014–15: 6. India Pride Awards 2014–15 instituted by Dainik Bhaskar for 'Excellence in Public Sector Undertaking Central in Infrastructure Development'. The award was presented by Mr.Arun Jaitley, Honble Union Minister for Finance and Corporate Affairs, to Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in New Delhi on 4th June 2015. 7. Dun and Bradstreet Top PSUs Awards 2015, in the category of 'Contract & Construction sector'. The award was received by Mr. Mohan Tiwari, Chairman & Managing Director, Ircon, at a function held in New Delhi on 23rd July 2015. INTEGRAL REPORTS Annual Report on CSR and Sustainability Activities, Management Discussion and Analysis Report, Corporate Governance Report, Secretarial Auditor Report, Extract of Annual Return, Form AOC–2, and "Management replies to qualification contained in the Auditors' Report on Stand–alone and Consolidated Financial Statements", with relevant sub–appendices form an integral part of this Directors Report, and have been placed as Appendix A, B, C, D, E, F, G, and H respectively. Annual Report on CSR and Sustainability Activities provides a brief outline of the companys 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. [AppendixA]. The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its legal status and autonomy, business environment, mission & objectives, sectoral and segment–wise operational performance, strengths, opportunities, constraints, strategy and risks and concerns, as well as human resource and internal control systems [AppendixB]. 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 2014–15 and thereafter, attendance and remuneration of directors etc., other relevant disclosures, CMD / DF Certification, and general information for shareholders [AppendixC]. 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 2014–15 (placed at AnnexureC1); 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 AnnexureC2); and 3. Certificate of compliance of Corporate Governance provisions signed by a practising company secretary (placed at AnnexureC3). Pursuant to the provision of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Vishal Agarwal & Associates, Practising Company Secretary, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report from the auditor is placed at Appendix–D. The Secretarial Auditor as well as the Auditor who has given the corporate governance compliance certificate had observed that the Company had not appointed adequate number of Independent directors and Woman director on the Board. Your Directors state that your Company being a government company, the appointment of all the directors on the Board is made by the Government of India (through Administrative Ministry i.e. Ministry of Railways). Accordingly, Ministry of Railways has been requested to appoint requisite number of Independent Directors and Woman Director on the Board of Ircon. Pursuant to section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Extract of Annual Return is placed at AppendixE. The disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014 in Form AOC–2 is placed at AppendixF. The replies of the Management on the qualifications contained in the Auditors' Report on stand–alone as well as consolidated financial statements is placed at Appendix G and H respectively. 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 31st March 2015 and of the profit of the Company for the financial year 2014–15; 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 and the Companies Act, 2013 (where applicable), 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. BOARD OF DIRECTORS During April 2014 to March 2015, six meetings of the Board of Directors were held with one meeting each in the quarter ended on June 2014 and December 2014, two meetings each in the quarters ended on September 2014 and March 2015. The details of the meetings are furnished in the Corporate Governance Report under heading Board Procedure. 1. The following Directors are holding office as on date: a)Mr. Mohan Tiwari Chairman and Managing Director [DIN 00191363]w.e.f. 01.02.2009 b)Mr. K.K. Garg Director Finance [DIN 01495050]w.e.f. 03.11.2009 c)Mr. Deepak Sabhlok Director Projects [DIN03056457]w.e.f. 16.04.2010 d)Mr. Hitesh Khanna Director Works [DIN 02789681]w.e.f. 07.03.2011 e)Mr. Anjum Pervez Part–time Director (Official) [DIN 06682287]w.e.f. 15.07.2013 f)Mr. H.K. Kala Part–time Director (Official) [DIN 07200108]w.e.f. 02.06.2015 2. The following Directors ceased to hold office during 2014–15: 1Prof. (Dr.) S.S. Chatterji* Independent Director [Part–time (non–official)] [DIN 03546195]Ceased to be Director on completion of 3 year tenure on 15.09.2014 2Mr. B.M. Sharma* Independent Director [Part–time (non–official)] [DIN 00779026]Ceased to be Director on completion of 3 year tenure on 18.09.2014 3Mr. A.K. Rawal Part–time Director (official) [DIN 06806261]Ceased to be Director due to his superannuation as Additional Member (Planning), Railway Board, on 31.03.2015 * Both the Independent Directors of the Company have declared, at the first board meeting held during 2014–15, that they meet the criteria of Independence in terms of Section 149(6) of the Companies Act, 2013. AUDITORS A. Statutory and Branch Auditors The Auditors of the Company appointed by the Comptroller & Auditor General of India for 2014–15 are:– Joint Statutory Auditors: Vinod Kumar & Associates, and T. R. Chadha & Co.For Company as a whole Branch Auditors for projects in India: Jindal & Co., New DelhiAll projects under Northern Region and Western Region Pravesh Jain & Co., Jammu (Jammu & Kashmir)All projects at Jammu & Kashmir (Designated as Srinagar Region) J L Sengupta & Co., Kolkata (West Bengal)All projects under Eastern Region SVR & Associates, Bengaluru (Karnataka)All projects under Southern Region and one project of Western Region. Branch Auditors for projects Abroad: Vinod Kumar & Associates and T. R. Chadha & Co.All projects in Malaysia Cabinet de Audit et CAC, AlgeriaAlgeria Gajma & Co., Sri LankaSri Lanka MABS & J Partners, BangladeshBangladesh B. Cost Auditor The Board of Directors have appointed M/s. Chandra Wadhwa & Co., Cost Accountants, as Cost Auditor of the Company for conducting the audit of cost records of the Company maintained under the segment Road and other infrastructure projects. C. Secretarial Auditor The Board of Directors have appointed M/s. Vishal Agarwal & Associates, Practising Company Secretary, to conduct Secretarial Audit of the Company for the financial year 2014–15. D. Internal Auditors The Board of Directors has appointed following Internal Auditors for 2014–15:– Auditors for Indian Projects: Bansal Sinha & Co., New DelhiNorthern Region N.C. Mittal & Co. Jammu & Kashmir Region Ray & Co.Eastern Region SBA Associates Southern Region R.C. Jain & Co.Western Region N.C. Mittal & Co.Corporate Office Auditors for projects abroad: KERBAL Athmam, AlgerAlgeria Jayasinghe & Co., Sri Lanka Ahsan Zamir & Co.Bangladesh Apart this, two officials of Ircon were nominated to conduct the internal audit of Malaysia projects of your Company for 2014–15, in terms of the decision of the Board of Directors. ACKNOWLEDGEMENT We record our appreciation and thanks to the Ministry of Railways, Ministry of External Affairs 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. 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 Directors Sd/– Mohan Tiwari Chairman & Managing Director (DIN 00191363) Place: New Delhi Date : 6th November 2015 APPENDIX–B MANAGEMENT DISCUSSION AND ANALYSIS REPORT AN OVERVIEW The Company has a long standing reputation as a sectoral leader in Transportation Infrastructure amongst the public sector construction companies in the Country with specialization in execution of Railway Projects on turnkey basis and otherwise. After commencing business as a railway construction company it diversified progressively since 1985 to roads, buildings, electrical sub–station and distribution, airport construction, commercial complexes, as well as to metro works. It has been one of the few construction companies in the public sector to have earned substantial foreign exchange for the Country and paid dividend without fail every year to the Government. The Company has executed many landmark construction projects in the last 39 years both in the Country and Abroad. In India, in particular, it has also been undertaking projects even in difficult terrains and disturbed regions. The Company has so far completed projects in more than 22 countries across the globe, and 373 projects in India. The Company is an ISO certified Company for Quality, Environment, and Occupational Health and Safety Management Systems, a Schedule A public sector company, and a Mini Ratna Category I. LEGAL STATUS AND AUTONOMY The Company, a legal entity separate from the Government, is legally, functionally, and financially autonomous, operates under the corporate laws as an independent commercial enterprise, does not receive any budgetary or financial support from the Government, nor is it a dependent agency of the Government. However, the Government of India through the Ministry of Railways and the Department of Public Enterprises under the Ministry of Heavy Industries and Public Enterprises, monitors its performance through a system of Memorandum of Understanding (MOU) as regards targets to be achieved every year as part of accountability to the Parliament in respect of all government companies. Government can issue and does issue guidelines to regulate and bring about some uniform pattern in the functioning of the Company as a public sector company. However, no Government department has any supervisory authority to exercise control over the Company which is managed and run under the superintendence, control, and direction of its Board of Directors as per the Companies Act. BUSINESS ENVIRONMENT During 2014–15 Indian economy grew at 7.3 per cent as per the new series of national accounts, adopted by the Central Statistical Organization, with base year of 2011–12 in place of earlier base of 2004–05. The perceptible improvement in economic growth resulted from improved performance of both services as well as manufacturing sectors. Encouraged by the macro–economic stability coupled with improved business sentiments in the country, the International Monetary Fund (IMF) and the World Bank have presented an optimistic growth outlook for India for the year 2015 and beyond. Government has undertaken various initiatives to sustain this momentum of growth. The major ones, which would afford business opportunities to your Company, are as follows: 1. Railways: The key focus areas for Indian Railways presently are creation of capacity; modernization of network and rolling stock; dedicated freight corridor (DFC); high speed rail; last mile linkage; port connectivity; etc. Accordingly, an investment of about Rs.8,56,020 crores is planned over a span of next five years i.e. 2015–19 for: – Network decongestion in the form of Doubling and DFCs; – Taking up National Projects in North Eastern States and in the State of J&K; – Track renewal, bridge works; – Road over bridges, Rail under Bridges; – Production and maintenance of Rolling Stock in the form of locomotives, coaches, wagons, etc.; – Augmentation of passenger amenities and stations redevelopment; – High Speed Rail and Elevated Corridors. In addition to putting up rail connectivity projects for coal movement in the State of Jharkhand, Odisha, and Chhattisgarh on fast track, Railways has sanctioned 77 projects covering 9400km of doubling / tripling/ quadrupling works along with their electrification at a total cost of Rs. 96182 crores. Ministry of Railways has also taken initiative for introduction of High Speed Bullet Trains on the Mumbai–Ahmedabad corridor, and also high speed corridor on Diamond Quadrilateral network connecting major metros and growth centers in the Country. 2. Roads: The Government has approved a scheme for development of 1,126 km of national highways and 4,351 km of state roads in left–wing extremism (LWE) affected areas as a special project with an estimated cost of about Rs. 7,300 crores. In addition, the National Highways and Infrastructure Development Corporation Limited, has been created to expedite development of highways in the North–Eastern region and border areas. Government has also taken steps to resolve problems being faced by BOT – PPP projects (like developers having negligible equity to contribute and lenders unwillingness to provide debt funds) by rescheduling premium payment in BOT projects. The rescheduling would be available to concessionaires experiencing revenue shortfall so as to ensure that project execution does not suffer owing to cash flow constraints. These initiatives would give a boost to highway projects being offered on BOT basis. 3. Electrical Projects: In addition to railways electrification works, work for railway sidings/ workshops, tunnel ventilation, industrial electrification, distribution works, smart grid technologies for power sector utility, sub–station/ transmission/ high voltage cable laying works are in the offing. Government has introduced Integrated Power Development Scheme (IPDS) with an outlay of Rs. 32612 crores for strengthening the sub–transmission and distribution network in urban areas, metering of distribution /feeders/ transformers /consumers in urban areas and roof top solar panels. The IPDS scheme would subsume the presently continuing Restructured Accelerated Power Development and Reforms Programme (R–APDRP). 4. Urban Infrastructure Projects: Urban infrastructure in the form of smart cities having intelligent physical, social, institutional, and economic infrastructure to improve public services. 5. Signalling & Telecommunication Projects: Signalling & Telecommunication Projects are included in the composite turnkey railway projects. In foreign countries opportunities exist in countries like Oman, Ethiopia, Bangladesh, Sri Lanka, Malaysia, and Myanmar. Present Project Profile: Your Company is executing projects for construction of railway line in J&K, Sivok–Rangpo, Jayanagar (India) to Bijalpura (Nepal), Jogbani to Biratnagar, etc.; setting of new rail coach factory at Rai Bareli; electric loco sheds; Road over Bridges in Bihar and Rajasthan; Pradhan Mantri Gram Sadak Yojna (PMGSY) in Jharkhand and Bihar; and electrical works under RAPDRP in the State of Jammu & Kashmir and Uttar Pradesh. Additionally, the Company is a stakeholder in two Special Purpose Vehicle (SPV) companies to undertake rail connectivity projects for coal movement in the State of Chhattisgarh. MoUs have also been signed for taking up such works in the State of Odisha and Jharkhand. Subsequent to the signing of MoUs, two more Joint Venture Companies have been incorporated on 31st August 2015, viz. 'Mahanadi Coal Railway Limited' in the State of Odisha, and 'Jharkhand Central Railway Limited' in the State of Jharkhand. The Company has also formed two SPV companies for execution of road projects viz. Ircon PB Tollway Limited [for widening and strengthening of the existing Bikaner – Phalodi section to four lane from 4.200 km to 55.250 km and two lane with paved shoulder from 55.250 km to 163.500 km of NH–15 on BOT (Toll) basis in the State of Rajasthan] and Ircon Shivpuri Guna Tollway Limited [for four laning of Shivpuri–Guna section of NH–3 from 236.00 km to 332.1 km on BOT (Toll) basis on DBFOT pattern under NHDP Phase–IV in the State of Madhya Pradesh]. Your Company is executing projects in Malaysia, Bangladesh, Myanmar, Bhutan, and Algeria. OUTLOOK The Vision, Mission, and Objectives of the Company are as follows: A. Vision To be recognised nationally and internationally as a construction organisation comparable with the best in the field covering the entire spectrum of construction activities and services in the infrastructure sector. B. Mission i) To effectively position the Company so as to meet the construction needs of infrastructure development of the changing economic scenario in India and abroad. ii) To earn global recognition by providing high quality products and services in time and in conformity with the best engineering practices. C. Objectives i) To enhance the size and value of business activities of the Company so as to achieve a turnover of Rs. 5500 crores by the year 2016–17. ii) To achieve reasonable returns on the capital employed. FINANCIAL PERFORMANCE In the year 2014–15, the Company has registered total income of Rs. 3122 crores, as compared to the total income of Rs. 4307 crores achieved in 2013–14. About 95% of the total operating income i.e. Rs. 2950 crores, has arisen from operations, out of which about 30% i.e. Rs. 877.52 crores has been contributed by foreign projects. Operating income from foreign projects has decreased by 59% over the previous year. The main reason for lower income during the year is completion of projects in Malaysia and Sri Lanka which had contributed substantial income during the previous year. There had been a corresponding reduction in Profit before tax which has decreased by 32.40% from Rs. 1249 crores in 2013–14 to Rs. 844.29 crores in 2014–15, and Profit after Tax has also decreased by 36.08% from Rs. 907 crores in 2013–14 to Rs. 579 crores in 2014–15. Net Worth has increased by 12.04% during the year, whereas earnings per share have decreased by 36.08% from Rs. 457.92 in 2013–14 to Rs. 292.68 in 2014–15. Although turnover of the Company has shown declining trend, the Company has secured new projects which have increased order book to Rs. 5039 crores approx. Consequently, the Company is hopeful to reverse the trend and achieve turnover as per objectives. The Board of Directors has recommended a dividend @ Rs. 52 per share (520% on the paid–up share capital) for consideration and declaration by the shareholders. The Company has already paid an interim dividend @ Rs. 40 per share (400%) in February 2015. The dividend of Rs. 102.94 crores payable after declaration at the Annual General Meeting together with the interim dividend already paid (Rs. 79.184 crores) would take the total dividend pay–out for the year 2014–15 to Rs. 182.12 crores, which is 920% of the existing paid–up share capital of the Company. OPERATIONAL PERFORMANCE A. Sectoral Performance: Railways continued to be the primary sector of interest contributing highest to the operating income. During 2014–15, Railways accounted for 91.12% of operating income, Highways accounted for 7.72%, and the balance 1.16% resulted from buildings, electrical projects, etc. A sector–wise comparative position is given below. The table below shows the proportion of operating income from railway construction works has decreased from 96% in 2013–14 to 91.12% in 2014–15, whereas the proportion of income from highway sector has increased from 3% in 2013–14 to 7.72% in 2014–15. (Amount in Rs. crores) Sectors2012–132013–142014–15 Operating Income%Operating Income%Operating Income% Railways390692388496268891.12 Highways225513632287.72 Buildings421240.5190.63 Others* 592230.5150.53 Total4232 4067 2950 * Includes income from Electrical Projects (Rs. 52 crores during 2012–13, Rs. 21 crores during 2013–14, and Rs. 13.43 crores during 2014–15). B. Segment–wise Performance: Foreign projects contributed 45% and 50% to total income during 2012–13 and 2013–14 respectively as compared to 28% in 2014–15. A comparative position for the last three years is given below: (Amount in Rs. crores) Segments2012–132013–142014–15 Total Income%Total Income%Total Income% Foreign19954521465086828 Domestic247655216150225472 Total4471 4307 3122 STRENGTHS The Company has rich experience of timely execution of a large number of international projects, especially in developing countries. Its key strengths continue to be impressive financials (reflected in the consistent profitability and healthy balance sheet of the Company), established credentials, and competent manpower. The Company has a track record of quality performance in time to the satisfaction of customers. The Company has gained valuable experience in executing turnkey projects to be utilized for upcoming EPC and DBFOT projects. OPPORTUNITIES A number of macro level and sectoral initiatives undertaken to improve economic growth coupled with revival of interest in the development of infrastructure sector in the last few years in India as well as Abroad, particularly in Railway sector, has opened up several opportunities for securing more business. The Company has geared itself to benefit from the opportunity presented by EPC and DBFOT projects both in Railways and Highways by leveraging its financial strength. CONSTRAINTS Although every organization has to work within a certain legal framework, the Company as a public sector company faces more constraints (not applicable to private sector companies) which puts it at a disadvantage in a competitive market. Availability of soft credit with overseas competitors and flexibility in procurement and operations with private competitors are some of the other factors. The structural changes in the construction industry in the last few years whereby all construction and financial risks are being transferred to the Contractors from the employers poses fresh challenge to the Company. These higher risks are willingly taken up by private sector companies in order to increase their order book and to capture a sizeable portion of the market. Ircon being a domain player in the railway infrastructure segment, has been able to secure a fair share of railway business for the Company in the past. However, with the Employer(s) diluting the qualification requirement a large number of highway contractor are diversifying in this segment thereby increasing the competition for Ircon. STRATEGY The Company is focused towards strategic business development to sustain and improve its order book position by giving a thrust to its areas of core competence and international business. Core competence of the Company namely, Railways, Highways, Electric sub–stations, S&T, and Railway Electrification, is being further consolidated. On account of opportunities in the offing in the areas of EPC and DBFOT, an integrated team of railway and highways, design and execution engineers and business development managers have been mobilized to work on such opportunities. RISKS AND CONCERNS A. Project Risk Management: A formal Risk Management framework is in place from August 2007. The Company has a Risk Management Committee of Whole–time Directors and a Rapid Action Group at General Manager / Executive Director (below board) level to ensure its implementation. Risk Management Policy, Risk Management Processes, and MIS reports formats including MIS reports on Risk Management have been evolved in accordance with the Framework. Reports from Rapid Action Group for managing and mitigating risks are submitted through the Risk Management Committee to the Audit Committee for review. In India, a major concern in execution of projects is non availability of encumbrance free land, and delayed approval of drawings and estimate due to which there is a risk of time and cost overruns which are seldom compensated by the client. The Companys employees and projects have been and are exposed to risks and threats to life, liberty, and property while operating in risky geographical areas. It however takes pride in executing prestigious works in the nation building task. The Company has taken measures with the help of the Government to provide adequate security, facilities, and also insurance coverage in such places. Policies and procedures are in place for ensuring health and safety. Construction industry is highly susceptible to variation in commodity prices and interest rates. Quality department has issued Guidelines on Hazard Identification and Risk Analysis due to construction activities, plant and machinery, vehicles, etc. for projects, and suggested operational control procedures to minimize the identified hazards. B. Treasury Risk Management Your company was assigned a CARE AAA rating by Credit Analysis & Research Limited (CARE) for long–term non–fund based credit facilities and an A1+ rating (earlier denoted as PR1+, and has now been standardized in accordance with circular dated 15th June 2011 issued by SEBI) for short–term non–fund based credit facilities in 2008–09 based on BASEL II norms of the Reserve Bank of India. These rating have been re–affirmed in an annual surveillance review by CARE in November 2014. Ircon conducts its business in various countries and, therefore, has to deal in foreign currencies. Execution of projects abroad necessitates investing some funds in foreign banks in order to take care of any exigency arising on account of temporary cash flow mismatch. However, dealing in foreign currencies involves foreign exchange risk and the exchange rate may change unfavorably before the currency is exchanged. In order to minimize or eliminate foreign exchange risk, these exchange rate fluctuations are monitored constantly and surplus funds are exchanged / repatriated to India at the appropriate time, and in accordance with the laws. Efforts are made to provide a natural hedge by matching foreign currency inflows and outflows from various foreign projects. Investment guidelines for foreign projects have been formulated to ensure placement of funds with Foreign Banks in a fair and transparent manner. INTERNAL CONTROL SYSTEM The Company has adequate internal control mechanism and an Internal Audit System commensurate with its size and nature of business. A comprehensive internal audit manual had been issued with guidelines for internal auditors to make the internal control system more effective and project specific. Projects are closely monitored through online/offline reporting formats and the key performance indices are monitored by the management on monthly basis. The Company has in place a structured organizational chart and a system of delegation of powers. This coupled with robust internal MIS systems (online reporting format), ensures appropriate information flow to facilitate effective monitoring. Adherence to these processes is monitored through internal audits in two phases during every financial year. The Company has an internal audit system that requires the Internal Auditors to comment on the existence of adequate internal control systems and compliance therewith in addition to the opinion on existence of proper risk assessment and mitigation mechanism. The Internal Auditors are experienced chartered accountants directly reporting to the Management which also ensures their independence. Reports of the Internal Auditors are reviewed, compliances are ensured, and synopses of Audit Reports along with compliance are put up by Internal Audit Department for consideration by the Audit Committee. The internal control and audit system are being reviewed periodically by the Management as well as the Audit Committee, followed up by corrective action, whenever necessary as a part of continuous improvement. A structured Fraud Prevention, Detection, and Control Policy (FPDC Policy) along with a Whistle Blower Policy duly approved by the Board of Directors is in place with facility to make e– complaints in confidence. HUMAN RESOURCE The Company aims to achieve the right size and right mix of human resource/ employees for the organization. Since your Company is a project based company, there are fluctuations in the manpower requirements which are being taken care by recruiting employees on deputation, contract, and service contract. Recruitment strategies have been re–engineered to make them more in line with the overall strategy of the Company. Training programmes are designed so as to enhance both technical and managerial skills of employees. A Performance Management System based on the 2nd Pay Revision Committee recommendations is in place which focuses on Key Result Areas for all projects and functions in line with the goals, objectives, and targets of the Company under the Memorandum of Understanding signed with the Ministry of Railways. The Company offers the benefits of Contributory Provident Fund, Gratuity, and Post retirement Indoor Medical benefits through a Medical Trust. The Company has also formulated a Defined Contribution Pension Scheme, based on the recommendation of 2nd Pay Revision Committee, which has been approved by the Ministry of Railways. The Trust Deed for the said scheme is being registered with the Commissioner of Income tax. For and on behalf of the Board of Directors Sd/– Mohan Tiwari Chairman & Managing Director (DIN 00191363) Place: New Delhi Date: 6th November 2015

Details regarding energy conservation

CONSERVATION OF ENERGY AND TECHNOLOGY ABSOPTION On energy conservation front, your company 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 total cost of Rs. 15.60 crores approximately. On being fully operational, this solar power plant would meet about one fourth of power requirement for the factory. Your company has also undertaken installation of LED light fittings at its Corporate Office as energy conservation measure.

Details regarding technology absorption

Technology absorption has been undertaken through execution of following works: 1. Geographical Information System (GIS) based Overhead Equipment (OHE) Design for Railway Electrification work of Banihal–Baramulla section in USBRL project in the State of J&K. 2. In CE–6 project of DMRC your Company has used following for the first time: a) 66KV cable with VCV manufacturing process from Indian vendor b) 25 KV CB with current rating of 3000 Amperes 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.

Details regarding foreign exchange earnings and outgo

Foreign Exchange Earnings and Outgo The Company has earned a foreign exchange of Rs. 842 crores during 2014–15 as compared to Rs. 2185 crores earned during 2013–14. The foreign exchange outgo stood at Rs. 424 crores during 2014–15 as compared to Rs. 1143 crores during 2013–14. Thus, the net foreign exchange earnings have decreased by 59.91% from Rs. 1042 crores in 2013–14 to Rs. 418 crores in 2014–15 due to completion of foreign projects as stated above.

Disclosures in director’s responsibility statement

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 31st March 2015 and of the profit of the Company for the financial year 2014–15; 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 and the Companies Act, 2013 (where applicable), 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.

Top