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Ircon International Chairman's Speech > Engineering - Heavy > Chairman's Speech from Ircon International - BSE: 541956, NSE: IRCON

Ircon International

BSE: 541956|NSE: IRCON|ISIN: INE962Y01013|SECTOR: Engineering - Heavy
Oct 18, 16:00
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VOLUME 96,180
Mar 09
Chairman's Speech (Ircon International ) Year : Mar '18

Dear Shareholders,

I am delighted to welcome you all on the occasion of 42nd Annual General Meeting of your company. It gives me immense pleasure to present before you the Annual Report for the financial year 2017-18. This has been a year of transition for IRCON during which we have not only maintained business growth, profitability, productivity and order book consolidation but also exercising listing of the company through part disinvestment of holding by Government of India.

Financial Highlights

Financial Year 2017-18 was the remarkable year in terms of business growth.

- The total Income / Turnover of your Company has registered an increase of 26.70% to Rs.4,123 crore in 2017-18 as compared to Rs.3,254 crore in 2016-17 and Profit after tax has increased by approx. 6% from Rs.369 crore to Rs.391 crore during the corresponding period. About 95% of the total income i.e. Rs.3,896 crore has risen from operations, out of which about 15.43% i.e. Rs.601 crore has been contributed by foreign projects.

- On a consolidated basis, your Company has recorded a turnover of Rs.4,212.40 crore and consolidated PAT of Rs.411.62 crore during the financial year ended 31st March 2018.

- The Company has already paid an interim dividend of Rs.95.15 crore for the financial year 2017-18 and now proposes final dividend amounting to Rs.97.25 crore i.e. 103% of the paid-up share capital. Thus, the total dividend for 2017-18 would sum up to Rs.192.40 crore which is 204% of the paid-up share capital and 49.22% of the post-tax profits. After the proposed final dividend, the cumulative dividend to shareholders for the year 2017-18 will amount to Rs.1,492.31 crore.

- During the year, the authorized share capital has been increased from Rs.100 crore to Rs.400 crore. Your Company had bought back 49,28,426 equity shares of President of India at a price of Rs.386.72/- per equity share, amounting to Rs.190.59 crore. Subsequent to buy back of shares, the paid-up share capital of the Company stood reduced from Rs.98.98 crore to Rs.94.05 crore w.e.f. 26th December 2017.

Performance under MoU

With robust all-round performance, your company is expected to achieve the “Excellent” rating for the MoU signed with the Government of India for the year 2017-18 after a gap of 4 years.

Listing with Stock Exchange

After the announcement of the listing of shares of Ircon in the budget for the 2017-18 by the Government of India, DIPAM, Ministry of Finance, the process of disinvestment of approx. 10.53% of post paid-up share capital by the President of India has commenced. Ircon will not receive any proceeds from the Offer and all proceeds shall go to the Government of India, however, it will have the benefits of listing the Equity Shares on the Stock Exchanges.

The Issue/Offer opening date is 17th September 2018 and the closing date is 19th September 2018. Price Band for the offer fixed by the Government of India & the Company in consultation with BRLM is Rs.470 to Rs.475 per Equity Share. A discount of Rs.10 per share on the offer price has been allowed to the eligible Employees and retail individual investors. The bids can be made in lot size of 30 Equity Shares. The Company is likely to be listed by 28th September, 2018.

Operational Profile

During 2017-18, Your Company has commissioned two foreign projects in Bangladesh and three projects in India. So far it had completed more than 127 projects in more than 24 countries across the globe, and 380 projects in various states in India as on 31st March 2018.

During the year your Company has secured eleven projects in India of total value amounting to Rs.6,106 crores. Concerted efforts are being made to secure contracts in Bangladesh, Thailand, Nepal, Turkey, Ghana, Sri Lanka, and Malaysia.

After the closure of the financial year, the Company has also secured many projects in India major of which is construction of Eight lane Vadodra Kim Expressway (Package-II) on HAM basis from NHAI, in the state of Gujarat for a total value of Rs.1,865 crore.

Your Company has entered into a Memorandum of Understanding on 26th March 2018 with the Rail Land Development Authority (RLDA) for transfer of lease hold rights to Ircon for commercial development on the land parcel admeasuring 4.3 (four point three) Hectare at Bandra East, Mumbai, Maharashtra, against the payment of Upfront Lease Premium. In consideration of its roles and responsibilities, Ircon shall be entitled to receive from RLDA, an amount equivalent to a total of 3% (three percent) of the Upfront Lease Premium.

Order Book

Our Order Book as of March 31, 2018 was ?22,407 crores which translates into approximately six times our total operating revenue in Fiscal Year 2018, and we believe it provides evidence of our healthy revenue profile.

We believe that growth in our Order Book position is a result of our track record of successful execution of our projects, which has led to our ability to successfully bid and win new projects. The growth of our average size new orders, together with our diversified business activities in infrastructure projects across transportation, engineering, and building construction limits the risks associated with any particular industry, while simultaneously helping us to benefit from the synergies of operating in diverse business sectors. Further, our track record of executing projects within the specified timelines has also helped us minimize cost overruns.

In view of healthy order book and huge investment taking place in infrastructure projects in India, I am confident that the accelerated growth will continue in years to come.

Subsidiary and Joint Venture Companies

As on 31st March 2018, Ircon had four wholly owned subsidiary companies viz., Ircon Infrastructure & Services Limited, Ircon PB Tollway Limited, Ircon Shivpuri Guna Tollway Limited and Ircon Davanagere Haveri Highway Limited. After the close of the year, one wholly owned subsidiary of the Company by the name of Ircon Vadodara Kim Expressway Limited got incorporated on 16th May, 2018.

Your Company holds 50% equity stake with Soma Tollways Private Limited in Ircon Soma Tollway Private Limited (Joint venture Company) and 50 % stake with RLDA in IRSDC. Your Company also holds 26% equity stake in five other joint venture companies viz. CERL, CEWRL, MCRL, JCRL and BRPL incorporated mainly for coal connectivity projects in the States of Chhattisgarh, Jharkhand, Odisha.

Human Resource

Your company considers its employees as valued assets and focuses on welfare of its employees including minorities and women employees together with focus on acquiring best talent with required skills to cater to its manpower needs. During the year 2017-18, 329 employees [104 regular, 14 on deputationists, and 211 employees on contract basis (including service contract)] were appointed. Out of these new recruits, 112 employees are technically and professionally qualified.

Corporate Governance, CSR and Sustainability

Your Company is committed to good governance, and complies with the requirements of corporate governance under the DPE Corporate Governance Guidelines, other legal requirements. During the year, your Company has spent an amount of Rs.8.73 crore towards Corporate Social Responsibility (CSR) initiatives. The CSR initiatives, aimed at conducting business in a sustainable manner, broadly comprise of activities in the field of health, sanitation, education, employment enhancing education including education for differently abled, environment, infrastructure development, launching CSR mobile application to provide information about the various activities undertaken under CSR etc.


I take this opportunity to express my sincere thanks and gratitude to my colleagues on the Board of Directors for their valuable guidance and advice in the management of the Company. I am also thankful for the whole-hearted support received from the Ministry of Railways, Government of India, DIPAM, other Ministries and Departments of Government of India, our shareholders, financial institutions, banks, CAG, Statutory, Cost & Secretarial Auditors and look forward for their continued support in Company’s future endeavors.

I, on behalf of the entire Board of Directors, sincerely thank all the employees of Ircon at all levels and would like to place on record the appreciation of the Board for the hard work and dedication of all the employees.

(S.K. Chaudhary)

Chairman & Managing Director

Place : New Delhi

Date : 14th September, 2018

Source : Dion Global Solutions Limited
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