The Board of Directors of your Company takes pride in presenting the 47^th Annual Report ofyour company for the financial year ended March 31, 2023. This report provides a comprehensive overview of the Company's performance, including a summary of financial results and key highlights concerning the financial performance for the period ending on March 31, 2023.

FINANCIAL RESULTS

FINANCIAL HIGHLIGHTS

We are delighted to announce that your Company has achieved highest ever total income of ?10,262 Crore during FY 2022-23, compared to ?7,181 Crore in FY 2021-22, representing a remarkable increase of approximately 42.90%.

Furthermore, the operating turnover of the Company for FY 2022-23 has a significant rise of 43.57%, reaching ?9,921 Crore, compared to ?6,910 Crore in FY 2021-22. This growth can be attributed to a healthy order book and efficient execution of projects.

In terms of profitability, the Profit Before Tax pBT) for FY 2022-23 reached ?883 Crore, an impressive increase of 44.75% compared to ?610 Crore in FY 2021-22. Similarly, the Profit After Tax pAT) has shown substantial growth, reaching ?777 Crore in FY 2022-23, a growth of 42.83% from ?544 Crore in FY 2021-22.

construction of a building; ?9.52 Crore for acquiring Plant & Machinery; ?5.49 Crore for acquiring other assets; and ?423.39 Crore towards investments in SPVs.

The Company's liquidity position remains strong at ?4785.32 Crore as on March 31, 2023, comprising of ?2168.41 Crore in cash and cash equivalent and ?2616.91 Crore in other bank balances. Out of ?4785.32 Crore, client/ project funds amount to ?3942.09 Crore.

The Company has also invested ?423.39 Crore in the equity / quasi-equity of its subsidiaries and joint venture companies during the FY 2022-23, which stood at ?1912.4 Crore as on March 31, 2023.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned a foreign exchange of ?19080 Crore cumulatively till date. During FY 2022-23, the Company has earned a foreign exchange of ?432.99 Crore as compared to ?521.26 Crore in FY 2021-22. The foreign exchange outgo stood at ?406.83 Crore during FY 2022-23 as compared to ?467.10 Crore during FY 2021-22. Thus, the net foreign exchange earnings amount to ?26.16 Crore in FY 2022- 23.

IRCON GROUP PERFORMANCE

During the year under review, IRCON along with its subsidiaries ('the Group') on a consolidated basis has recorded highest ever total turnover of ?10750 Crore (previous year: ?7586 Crore). The Group has registered a quantum jump of 40.49% in operating turnover to ?10368 Crore (previous year ?7380 Crore). The Group reported a consolidated profit before tax of ?891 Crore (previous year ?689 Crore) and profit after tax of ?765 Crore (previous year: ?592 Crore), both registering increase of 29.31% and 29.22%, respectively.

The Group EBITDA was ?1117 Crore (previous year: ?846 Crore), an increase of 32.03% over the previous year.

During the FY 2022-23, in terms of the financial performance, the Company has achieved and crossed the Turnover targets criteria of ?8875 Crore (on Consolidated basis) set up by the Ministry of Railways in terms of the Memorandum of Understanding based on the DPE guidelines.

IMPACT OF COVID-19

The Company is continuously monitoring the material changes to future economic conditions.

The Company has initiated several measures to help its employees and their families, including establishing COVID care centers, vaccination centers, and providing them access to medical care facilities. The Company has also taken various initiatives towards implementation of all precautionary measures to deal with the pandemic.

During the FY 2022-23 the Company had made a contribution of ?1.53 Crore towards Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund).

MATERIAL CHANGES AND COMMITMENTS

AFFECTING THE FINANCIAL POSITION

There are no material changes or commitments affecting the financial position of the Company during and after the close of the financial year up to the date of the report.

FINANCIAL STATEMENTS (STANDALONE AND

CONSOLIDATED)

The Board of Directors of the Company has, at its meeting held on May 24, 2023, had approved the Financial Statements for FY 2022-23 (Standalone and Consolidated).

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Company has prepared its Consolidated Financial Statements a) as per line-by- line method for its wholly-owned subsidiaries viz. Ircon Infrastructure & Services Limited (IrconISL), Ircon PB Tollway Limited (IrconPBTL), Ircon Shivpuri Guna Tollway Limited (IrconSGTL), Ircon Davanagere Haveri Highway Limited (IrconDHHL), Ircon Vadodara Kim Expressway Limited (IrconVKEL), Ircon Gurgaon Rewari Highway Limited (IrconGRHL), Ircon Akloli-Shirsad Expressway Limited (IrconASEL), Ircon Ludhiana Rupnagar Highway Limited (IrconLRHL), Ircon Bhoj Morbe Expressway Limited (IrconBMEL), & Ircon Haridwar Bypass Limited (IrconHBL) and subsidiary company viz. Ircon Renewable Power Limited (IRPL); and b) as per equity method, for seven joint venture companies viz. Ircon-Soma Tollway Private Limited (ISTPL), Indian Railway Stations Development Corporation Limited (IRSDC) [not on a going concern basis], Chhattisgarh East Railway Limited (CERL), Chhattisgarh East-West Railway Limited (CEWRL), Jharkhand Central Railway Limited (JCRL), Mahanadi Coal Railway Limited (MCRL) & Bastar Railway Private Limited (BRPL). The accounts of unincorporated joint ventures have been included in the standalone financial statements for the FY 2022-23.

Pursuant to letter dated October 18, 2021 of Ministry of Railway, the closure of business and transfer / hand over of business /assets of IRSDC is under process. Accordingly, as part of the closure activities, all assets and liabilities of IRSDC [other than its investment in its subsidiary companies viz., Gandhi Nagar Railway and Urban Development Corporation (GARUD) and Surat Integrated Transportation Development Corporation Limited (SITCO)] are to be transferred to Rail Land Development Authority (RLDA)/ MoR on slump sale basis for a consideration not less than the book value as on the cutoff date to be mutually agreed upon as approved in the BoD meeting of IRSDC. Closure related activities

initiated in FY 2021-22 are yet to be completed. The liquidation process shall commence on completion of these activities and handing over of assets and liabilities to RLDA/ MoR. Financial statement of IRSDC has been prepared on liquidation basis. The Company does not foresee any impairment in the value of its investment as the Company's share in the reported Net Worth of IRSDC is ?58.50 Crore i.e.26% of ?225 Crore vis-a-vis our shareholding of ?52 Crore.

The Company would make available its audited financial statements (standalone and consolidated) for the FY 2022-23 and financial statements of its eleven subsidiaries (IrconISL, IrconPBTL, IrconSGTL, IrconDHHL, IrconVKEL, IrconGRHL, IrconASEL, IrconLRHL, IrconBMEL, IrconHBL & IRPL) at its website (www.ircon.org).

Further, a statement containing the salient features of the financial statements of eleven subsidiaries and seven joint venture companies in Form AOC-1 is attached to the Financial Statements.

Considering the COVID-19 pandemic and the challenges associated with dispatching physical copies of financial statements, including the Notice of AGM, Board's Report, Auditor's Report, and other related documents, the Ministry of Corporate Affairs (MCA) and Securities and Exchange Board of India (SEBI) have issued guidelines. Accordingly, such statements & documents can be sent exclusively via e-mail to members who have registered their email addresses with the company or with the depository participant/depository, as well as to other eligible persons. These relaxations have been extended until September 30, 2023, as per circulars dated December 28, 2022 and January 5, 2023 issued by MCA and SEBI respectively .

Taking into account these relaxations and as part of our commitment to environmental sustainability, the Notice of AGM and Annual Report will be electronically delivered to shareholders who have already registered their email addresses with the respective depository participants. These documents will be accessible on the Company's website and will also be provided to the stock exchanges, namely BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) Report, as mandated by Regulation 34 read with Schedule-V to the LODR Regulations and DPE Guidelines, has been included as an annexure to this report. It is hereby incorporated by reference and serves as an integral component of this report. The MDA Report provides a comprehensive review of various aspects including the global and Indian economy, industry analysis, future outlook, Company overview, legal status and autonomy, business divisions/

units, financial and operational performance, projects executed during FY 2022-23, upcoming projects, strengths, scope and opportunities, key concerns, business strategies, risk management, adequacy of internal control systems, and significant developments in human resources.

EXTERNAL ENVIORNMENT

MACROECONOMIC CONDITIONS

International Monetary Fund (IMF) in its World Economic Outlook (April 2023), predicted global growth of 2.8% in 2023, with a slight improvement to 3.0% in 2024. Despite of global headwinds, India's economy is expected to grow at a faster pace than the global average and it is expected to grow at 5.9% in 2023 and 6.3% in 2024. The slowdown is concentrated in advanced economies, especially the euro area and the United Kingdom.

Global headline inflation is set to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices, but underlying (core) inflation is likely to decline more slowly. Inflation's return to target is unlikely before 2025 in most cases. Once inflation rates are back to targets, deeper structural drivers will likely reduce interest rates toward their pre-pandemic levels.

India's GDP growth for FY 2023-24 anticipated by the RBI is 6.5% in its monetary policy (April 2023). However the key concern on the growth front in the immediate future is the drag caused by the weak external demand conditions and the impact of any adverse weather conditions on Indian agriculture provides additional downside risk to the growth trajectory.

INFRASTRUCTURE & CONSTRUCTION INDUSTRY -GOVERNMENT INITIATIVES & INDUSTRY OUTLOOK

Infrastructure plays a huge role in propelling other industries and India's overall development. The government, therefore, focuses on the development of infrastructure and construction services through focused policies such as open FDI norms, large budget allocation to the infrastructure sector, smart cities mission, etc. PM launches Gati Shakti Master Plan to integrate different modes of transportation and increase the speed of infrastructure development in India.

The construction Industry in India is expected to reach $1.4 Tn by 2025. Under National Infrastructure Pipeline (NIP), India has an investment budget of $1.4 Tn on infrastructure 24% on renewable energy, 18% on roads & highways, 17% on urban infrastructure, and 12% on railways. Government thrust for developing 35 Multimodal Logistics Parks (MMLPs) at a total capital cost of $ 6.1 Bn,

will cater to 50% of the freight movement and further boost infrastructure development in the country.

Indian Railways have prepared a National Rail Plan (NRP) for India - 2030 to create a 'future ready' Railway system by 2030. The NRP is aimed to formulate strategies based on both operational capacities and commercial policy initiatives to increase modal share of the Railways in freight to 45%. The objective of the Plan is to create capacity ahead of demand, which in turn would also cater to future growth in demand right up to 2050 and also increase the modal share of Railways to 45% in freight traffic and to continue to sustain it.

The government announced 5,000 km of Metro rail network by 2047 in 100 cities. One Station One Product scheme aims to provide opportunities for enhanced livelihood through skill development through provision of sale outlets at railway stations across India. Station redevelopment project will boost the passenger experience, generate new employment opportunities and have a multiplier effect on India's economy. Taking cognizance of its significance in overall infrastructural development, the NIP envisages the investment in Indian Railways worth ?11.43 lakh crore (US$ 138 billion) till FY 2024-25.

With the objective to bring down logistics costs below the national average by 2028 to make exports globally competitive, the Government has made a plan of ?100 lakh crore investment in infrastructure with some mega projects such as the doubling of railway lines, their widening, dedicated freight corridors from Mumbai to Delhi and Amritsar to Kolkata besides 11 other industrial corridors.

Vision 2024 has been envisaged to achieve targets of 2024 MT freight loading by 2024. Government is working towards the development of a national highway network of 2 lakh kilometers by 2025. Indian Railways has planned to install 1000 MW of solar power plants and about 200 MW of wind plants by 2022-23. Out of this, about 204.82 MW (101.42 MW solar and 103.4MW wind power) renewable power has already been set up.

In Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to ?10 lakh crore (US$ 122 billion), which would be 3.3% of GDP. A network of 35 Multimodal Logistics Parks is planned to be developed as part of Bharatmala Pariyojana, with a total investment of about ?46,000 crore (US$ 5.5 billion), which once operational, shall be able to handle around 700 million metric tonnes of cargo. Of this, MMLPs at 15 prioritized locations will be developed with a total investment of about ?22,000 crore (US$ 2.6 billion).

A capital outlay of ?2.40 lakh crore (US$ 29 billion) has

been provided for the Railways, which is the highest ever outlay and about 9 times the outlay made in 2013- 14. 100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified and will be taken up on priority with investment of ?75,000 crore (US$ 9 billion), including ?15,000 crore (US$ 1.8 billion) from private sources. 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.

A total length of 24,800 kms in road projects have been proposed to be constructed with an estimated outlay of ?5.35 trillion (US$ 74.15 billion) under Bharatmala Pariyojana Phase-I. NHAI will consider only those projects that require minimal land acquisition worth ?3 trillion (US$ 42.92 billion) under Bharatmala Pariyojana scheme. A total of 65,000 kms of roads and highways are to be constructed under Bharatmala Pariyojana. In 2023-24, NHAI is allocated ?1.62 lakh crore (US$ 20 billion), all of which is budgetary support.

In Budget 2023-24, the Government of India has allocated ?2.7 lakh Crore (US$ 33 billion) to the Ministry of Road Transport and Highways. The Roads sector is expected to account for 18% capital expenditure over FY 2019-25. The government also aims to construct 23 new national highways by 2025.

These budget allocations are aimed at improving existing infrastructure, building new projects, and addressing the infrastructure gaps across the country.

ORDER BOOK

In the industry that the Company pertains to, an order book is considered an indicator of future performance since it represents a portion of anticipated future revenue. The Company caters to both domestic as well as international markets and receives orders both on competitive bidding as well as through nomination by the Ministry of Railways. Ministry of Railways have made a significant change in their policy on allotting the projects to PSUs, and have ended the system of competitive bidding amongst the eligible PSUs, and introduced competitive bidding for execution of railway works.

The order book as on March 31, 2023, is ?35195 Crore as compared to ?43758 Crore as on March 31, 2022. The major new orders are from railway electrification, highway project, metro track works, workshops, airports and renewable energy; also civil and track work in prestigious High Speed Railway Project. The order book as on June 30, 2023 stood at ? 32,486 Crore.

DOMESTIC PROJECTS

Since incorporation, the Company has diversified into

various infrastructure sectors and is now an established player in the field of railway and highway construction. Moreover, it has diversified in many other areas such as power transmission lines, sub-stations industrial complex, bridge and flyovers, tunnels, electrical and mechanical work, signaling and telecom, production units, station building, multi-function complex, and construction of commercial, residential complexes, and airports. The diversification of project portfolio across various sectors has helped the company in de-risking its construction business and reduce our dependence on any sector or type of project.

In the coming future, IRCON shall continue to pursue projects of High-Speed Rail, National Capital Region Transport Corporation (NCRTC), National Highways Authority of India (NHAI), Indian Railways and other important and high value projects in India.

During the FY 2022-23, your Company was awarded the projects in India viz., establishment of Railway Sidings along with Railway Station contagious to Mine Lease Boundary of Gere Pelma Sector-III Coal Mine, PMC services for Signaling & Telecommunication system; and development of Rail Infrastructure for proposed 02 nos. RLS (20 MTY) for Ananta OCP of Jagannath Area, at Talcher. IRCON has also been engaged for Central Public Sector Undertaking (CPSUs) for development of New Industrial Estates in Union Territory of Jammu and Kashmir.

During FY 2022-23 the following two projects have included in the completed projects category. With this, IRCON has completed more than 400 completed domestic projects.

• Construction of Eight lane Vadodara Kim Expressway from Km. 323.000 to 355.000 (Sanpa to Padra Section of Vadodara Mumbai Expressway) in the State of Gujarat under NHDP Phase - VI on Hybrid Annuity Mode (Phase IA-Package II).

• ECR - Doubling between Hazipur - Bachwara with electrification project (72km) including planning, design and construction of all service and residential buildings, circulating area, parking, platforms, subways, shelters and other allied structures of all stations, including Electrical, Signal & Telecommunication works and any other works.

ONGOING PROJECTS:

A list of ongoing major projects in India is given at Appendix-A.

In FY 22-23, the focus of your Company has been execution, faster deliveries and meeting stringent timelines for overall optimal contribution to the much needed infrastructure growth. This is in line with the vision of our Hon'ble Prime Minister and Hon'ble Minister of Railways. During the FY 2022-23 following were some

work on north side along with flood protection works have been completed and on south side of river 25.98 lac cubic meter against the scope of 28.36 lac cubic meter earth work is completed. Seven out of eight minor bridge, one RUB and substructure for two ROBs also completed. Piling works on the all 3 RORs completed and pile cap casting is in progress (50% works completed). All the structural steel for important bridge, ROBs and RORs procured. Work on 3.6 Km long via duct is also progressing well and till date 927 nos. of piles out of 1000 nos., 61 pier caps and 12 pier shaft out of 101 nos. piers have been completed. The balance work is progressing well.

5. Katni-Singrauli Doubling Project (cost plus project awarded by Western Central Railways having revised estimated cost of ?2445 Crore) : Total 78.29 Km sections was commissioned during FY 2022-23. During FY 2023-24, total 49.21 Km has been targeted. CRS (Commissioner of Railway Safety inspection) has inspected 19.13 Km section of Mahroi - Vijaysota on 27.06.2023. Another section of 30.11 Km is planned in December 2023 and 7.51 Km during FY 2024-25, total 180.5 Km out of 257 Km has been commissioned so far.

6. Katni-Singrauli Doubling Project (Railway Electrification Work): Railway electrification work commissioned in Katni-Singrauli Doubling project during FY 2022-23 is 78 RKM. Total 180.5 Km electrification completed with doubling.

7. Kiul-Gaya Doubling Project (cost plus project awarded by East Central Railways having revised estimated cost of ?1200 Crore) : CRS inspection (Commissioner of Railway Safety inspection) of Wazirganj-Tilaiya section (18.01 Km) was conducted on 02.09.2022 and the section was commissioned at a permissible speed of 100 kmph; and, the entire Lakhisarai -Sheikhpura section (25.32 Km) was commissioned with 100 kmph on 21.02.2023. Total 61.48 Km has been commissioned so far. Rest 61.64 Km has been planned during FY 2023-24. During FY 2023-24, 1.405 Km of Kashichak yard commissioned on 31.05.2023.

8. Sports Complex at Gholsapur, Behala Stadium, Eastern Railway Kolkata (the revised estimate of ?80.82 Cr.): An international standard fully air-conditioned multi-purpose Indoor Stadium with state-of-the-art facilities at Behala was inaugurated on May 30, 2022.

9. NCRTC Project (Revised Estimated Cost of ?723 Crore): IRCON has secured the prestigious ADB (Asian Development Bank) funded OHE & Power Supply Work of Delhi-Ghaziabad-Meerut RRTS Corridor of NCRTC through International Competitive Bidding. It

During the year 2022-23, your Company has secured the order of Procurement of Design, Installation, Testing, Commissioning and Certifying of Signaling and Telecommunication System from Maho Junction (Including) to Anuradhapura (Excluding) in Sri Lanka under Indian Line of Credit.

ONGOING PROJECTS

The Company is executing the following projects in foreign countries:

i. Bangladesh

(a) Khulna-Mongla Port Rail Line project

The Company secured a project in Bangladesh for construction of Khulna-Mongla Port Rail Line for Bangladesh Railway, at US$ 147.78 million (equivalent to approx. ?911 Crore) and after approval of VO-2 at cost of US$ 185.73 million. The project includes construction of embankment, tracks, all civil works, major and minor bridges (except Rupsha Bridge), culverts and implementation of EMP against Package WD1. Additional scope of work was added in 2021. The completion tenure is extended upto September 2023, along with the additional scope of work including rehabilitation of 5 major bridges and 16 nos. of culverts and pending approval for variation VO-3.

(b) Agartala (India)-Akhaura project (Bangladesh portion)

The Company has also signed a contract for providing Technical Advisory Services (TAS) for Construction of New Railway Line from Agartala (India) -Akhaura (Bangladesh) and Project Management Consultancy (PMC) for Construction in Bangladesh Portion with Ministry of External Affairs (MEA), Government of India. The construction contractor for the project is appointed by Bangladesh Railways and contract value is BDT 240.9 Crore (equivalent to approx. ?209.47 Crore). The completion period of the construction contractor was extended up to June 30 2023, however the trial run of loco is planned by 22.08.2023. The overall progress of the project is approximately 88.24 %.

ii. Algeria

The project was awarded by ANESRIF, the National Agency for the Planning and Implementation of Railway Investments, Ministry of Transport, Government of Algeria, at a value of Algerian Dinar 1,628 Crore (equivalent to approx. ?1,003 Crore) with completion date on November 2012. The project involves the construction of the second line and upgradation of an existing line, with a diversion of 10 km from Oued sly to Yellel in Algiers-Oran section

(b) Procurement of design, installation. Testing, commissioning, and certifying of Signaling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) under Indian Line of Credit:

Your Company also secured a project for "Procurement of design, installation, Testing, commissioning, and certifying of Signaling and Telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) under Indian Line of Credit".

The project was awarded on December 04, 2022 by Sri Lankan Railways under the Ministry of Transport and Civil Aviation, Government of Sri Lanka at a value of US$ 14.90 Million (equivalent to approx. ?121.25 Crore) through competitive bidding. Completion period is 12 Months from the date of receipt of mobilization advance.

The project is financed through EXIM Bank of India under Indian line of credit. Contract Agreement is not yet signed due to prevailing economic conditions in Sri Lanka. As such, the project is yet to start.

iv. Nepal

In Nepal, the Company is executing the following two projects:

(a) Construction of BG line between Jogbani (India)-Biratnagar (Nepal) on Indo-Nepal border

The project involves construction of new BG rail line from Bathnaha (India), Ch. 0.00 Km to Biratnagr (Nepal), Ch. Km 18.60. The proposed alignment in Indian portion (5.45 Km) falls in Araria district of Bihar State under Katihar Division of North East Frontier Railways and on the Nepal side (13.15 Km), in Morang district.

The revised value of contract of ?401.65 Crore is under approval of the Ministry of External Affairs.

The section from Bathnaha (India) Ch. 0.00 Km to Nepal Custom Yard (Nepal) Ch. 6.70 Km has been completed and ready for commissioning. The work is in progress in the remaining portion. Progress is hampering due to obstructions being created by local land owners.

The overall progress of the project is approximately 86%.

(b) Construction of BG Line by Gauge conversion Jayanagar (India) - Bijalpura (Nepal) with extension upto Bardibas on India Nepal Border

The Project involves construction of a new BG rail line from Jaynagar (India), Ch. 0.00 Km to Bijalpura (Nepal) Km.52.336 with extension up to Bardibas,

in Sector 32, Gurugram, Haryana and this property is registered with the trademark authorities in India as 'IRCON INTERNATIONAL TOWER'. About 2079Sq. mt. carpet Area of this property has been Leased Out to government agencies and balance available space is in the process of leasing out.

IRCON Retail Mall at Sector - 43, NOIDA, Uttar Pradesh and Commercial cum Office Building at Sector -48, NOIDA, Uttar Pradesh has been leased out completely.

The Company had entered into a Memorandum of Understanding (MOU) on March 26, 2018, with the Rail Land Development Authority (RLDA) for transfer of leasehold rights to IRCON for commercial development on the land parcel measuring 4.3 (four points three) Hectare at Bandra East, Mumbai, Maharashtra, for 99 years against the payment of Upfront Lease Premium. Since MoU has expired and the work being unable to commence on account of non-finalization of agreement between Mumbai Metropolitan Region Development Authority (MMRDA) and RLDA / MoR, the land has been returned back to RLDA and consultancy contracts for commercial development of the plot have also been novated to RLDA.

COMPANIES, JOINT VENTURE COMPANIES AND ASSOCIATE COMPANIES

A brief background on the eleven subsidiary companies and seven joint ventures companies of IRCON along with their financials and performance is given at Appendix-B.

In terms of the Company's Policy on the determining the "Material Subsidiary" and Regulation 24A of the LODR Regulations, for the financial year ending March 31, 2023, none of the subsidiary company is a 'material subsidiary' i.e. whose total income or net worth exceeds 10% of consolidated income or net worth of IRCON in the immediately preceding financial year i.e. March 31, 2022.

COMPLIANCES OF PRESIDENTIAL DIRECTIVES

Presidential directives as issued from time to time on various matters like reservation policy for reserved category persons, SC/ST roster in the employment, revision in pay scale 2017 etc. have been complied with.

OFFICIAL LANGUAGE

The Company is undertaking various novel and encouraging initiatives for extensive use of Hindi in the office. Some of them are:

a. Pledge by all employees to work in Hindi completely on last Monday of every month.

b. Rajbhasha Sanghosthi is being conducted on a quarterly basis in Corporate Office.

c. Birthday wishes to employees, a thought and a word, contributed by different departments on rotational

(MSEs) Order, 2012 notified by the Ministry of Micro, Small and Medium Enterprises (Ministry of MSME) under section 11 of Micro, Small and Medium Enterprises Development Act, 2006. IRCON uses Central Public Procurement portal (CPPP) and Government e-Marketplace (GeM) portal for its procurement, which provides facilitation of registration of MSEs firms registered with any statutory bodies specified by Ministry of MSME.

The Company has always encouraged local suppliers to participate in its tendering process and also promote them through training and hand holding programs. Our continued pursuit in this direction has seen improved participation of small local players and socio-economic development of communities in and around operational locations.

IRCON has taken several steps for effective implementation of MSE policy. The benefits of waiver of cost of tender documents and deposit of earnest money and purchase preference prescribed under the Policy, are incorporated in the tenders for procurement of goods and services.

The company has been extensively following the guidelines of Government on procurement through GeM and provisions are also made in tenders to promote "Make in India" directives of the Government of India. Tenders valuing upto ?200 Crore were invited during FY 202223 using national competitive bidding in compliance to Public Procurement (Preference to make in India), Order 2017.

During the FY 2022-23, the Company has procured items valuing ?44.52 Crore from MSE vendors against expenditure valuing ?102.39 Crore (excluding the procurement of items which are beyond the scope of MSEs) towards material, stores & service, thereby achieving 43.48% procurement from MSEs in compliance with the Procurement Policy. The Company has conducted one national level Special Vendor Development Program at the Corporate Office, Delhi on December 16, 2022.

In compliance with the Micro, Small and Medium Enterprise Development Act, 2006, the Company has on-boarded on the Trade Receivables Discounting System (TReDS) platform, w.e.f. January 25, 2018, to facilitate the financing of trade receivables of MSEs by discounting of their receivables and realisation of their payment before the due date. A clause in General Conditions of Contract is incorporated for MSEs vendors willing to avail the facility.

HUMAN RESOURCE DEVELOPMENT

IRCON recognizes that its employees are fundamental to its success and play a crucial role in safeguarding the organization's values and culture. The organization firmly believes that its achievements rely on the alignment and

RESERVATION IN EMPLOYMENT

The Company continues to give utmost importance to the implementation of the policies and directives of the Government of India in matters relating to reservations in the employment of candidates belonging to Scheduled Caste (SC) / Scheduled Tribe (ST) / other backward classes (OBC) and differently-abled categories. There was a total of 521 SC / ST / OBC and differently-abled employees as on March 31, 2023.

Further, during the FY 2022-23, out of the 66 employees inducted against regular posts, 29 belong to SC / ST / OBC and differently-abled categories. Similarly, out of the 164 employees recruited against the contractual positions, 84 belong to SC / ST / OBC and differently-abled categories.

During the FY 2022-23, training has been given to 437 employees, out of which 171 belong to SC/ST/OBC and differently-abled categories. To ensure the welfare of these employee categories, the Company has appointed Liasion Officers.

The infrastructure of the Company is well built catering to the needs of differently-abled employees.

TRAINING AND HUMAN RESOURCE DEVELOPMENT

IRCON puts a lot of emphasis on development and career progression of employees. Training programs are organised throughout the year. During the FY 2022-23, inhouse training programmes across all levels of employees were organised. Professional programmes, workshops, and seminars organised by reputed and prestigious institutes / agencies were carefully identified in line with business needs of IRCON, and suitable officers were nominated for such programmes.

The Company has been continuously taking steps for building capacity of its human resource through training in functional and general management areas, contract and arbitration, leadership, information technology, as well as soft skills. External faculty is arranged wherever required, and officials are nominated for carrying out workshops and seminars with reputed institutes. Employee Development has always been a priority for the Company, and various training and development plans have been initiated from time to time. During the FY -2022-23 a total 816 man-days training was imparted to officials of IRCON through workshops, seminars, conferences, in-house training and training in external institutes.

EMPLOYEE WELFARE

The Company has adequate and robust schemes in place for the welfare of the employees. These are health cover, medical scheme, post-retirement medical scheme, postretirement pension scheme, periodic health check-ups

at regular intervals, allowances, self-lease for residential accommodation, educational scholarships to the wards of employees, a one-time educational grant for admission to professional degrees and diploma courses, educational awards to meritorious children of employees, educational assistance to the wards of deceased employees, assistance for marriage of daughters and dependent sisters of employees in non-executive categories, and resort facilities for employees and their family members on concessional rates through Dalmia and Sterling Resorts.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is dedicated to creating a supportive and secure working environment for its women employees. The Company has implemented a comprehensive policy for the Prevention, Prohibition, and Redressal of Sexual Harassment at the Workplace, which applies to all employees, including regular employees, deputationists, temporary workers, ad-hoc employees, contract workers, daily wage workers, and individuals employed through agencies or contractors. This policy, along with its details, can be accessed on the Company's website. Furthermore, this policy extends to wholly-owned subsidiary companies of IRCON that are formed as Special Purpose Vehicles.

Your Company has ensured compliance with the provisions concerning the formation of the Internal Committee (IC) as mandated by the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The IC comprises five members, including four Company officials and one external member from an NGO. Additionally, provisions related to the prohibition of sexual harassment have been incorporated into the IRCON's Conduct, Disciplinary, and Appeal Rules. At the beginning of the year, no complaint was pending. During the year, one complaint of sexual harassment was received and it was appropriately addressed within the stipulated time frame. As of the end of the year, no complaint was pending.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Your Company is deeply committed to addressing social, ethical, and environmental concerns within the areas where it operates. We strive to contribute to the development of a sustainable society for future generations while meeting the expectations of our stakeholders. Throughout the years, IRCON has identified various Corporate Social Responsibility (CSR) concerns and implemented actions and initiatives that have had a positive impact on society and the environment. Our CSR activities cover a wide range of areas, including health, education, employment and skill development,

environmental sustainability, clean water and sanitation, sports, culture and heritage, rural transformation, and contributions to the PM CARES Fund.

To guide our CSR efforts, we have the Corporate Social Responsibility & Sustainability Policy (CSR Policy) in alignment with our Company's vision. This policy lays down guidelines and mechanisms that the Company must adhere to when carrying out CSR projects. In accordance with the guidelines issued by the Department of Public Enterprises (DPE) through their Office Memorandum dated December 10, 2018, along with the update on May 12, 2021, CPSEs (Central Public Sector Enterprises) are required to follow a theme-based approach for their CSR activities. The Company allocates a minimum of 60% of their annual CSR budget for thematic programs and give preference to the Aspirational districts in their CSR initiatives. For the fiscal year 2022-23, the common theme chosen by DPE for CSR activities of CPSEs is "Health & Nutrition." By adhering to these guidelines and embracing the chosen theme, we are actively working towards making a positive difference in society and contributing to the well-being of our communities.

During the past year, our company took a focused approach to conceive and implement CSR activities with the aim of generating maximum impact for the target beneficiaries. These initiatives were carried out in collaboration with reputable implementing agencies. In the fiscal year 2022-23, the actual expenditure on CSR activities amounted to ?10.12 Crore, surpassing the allocated budget of ?10.10 Crore. Within this budget, a significant portion was dedicated to the health sector, including a contribution of ?1.53 Crore to the PM CARES Fund.

The CSR Policy, which provides comprehensive guidelines for conducting CSR activities, is available on our Company's website: www.ircon.org. Furthermore, the Annual Report on CSR & Sustainability activities, in compliance with Section 135 of the Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is appended to this report, forming an integral part of it.

QUALITY, HEALTH AND SAFETY

QUALITY MANAGEMENT SYSTEM

IRCON is a precursor Public Sector Organization in adopting the Quality Management System Certification in the domestic as well as International Markets. 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 SUD Private Limited. IRCON has continued the certification and sustained the system as per the

latest version of Quality Management Standards, i.e. ISO 9001:2015 (by periodical re-certification audit after the expiry of every three years). Latest re- certification audit was conducted in September, 2022, whereby the Company has been re-certified by TUV SUD South Asia Private Limited for a period of another three years, i.e. up to March 2026.

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM

The Company established an Occupational Health & Safety Management System and was certified for ISO 45001:2004 in October, 2011. The latest surveillance audit for ISO 45001:2018 was conducted in August 2022, whereby the Company has been re-certified for another two years, i.e. up to December, 2024.

ENVIRONMENT MANAGEMENT

The Company established an Environment Management System (EMS) and was certified for ISO 14001:2004 in October 2011. The latest re-certification audit for ISO 14001:2015 was conducted in November 2022 whereby the Company has been re-certified for another three years, i.e. up to February 2026.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND UPGRADATION

IRCON is conscious of the limited nature of conventional sources and the importance of using energy resources wisely. The Company has been consistently laying emphasis on utilizing energy efficient equipment in its office premises and in various projects so as to minimally effect on the ecology and environment. Towards conservation of energy, IRCON has taken following steps during previous years:

a) IRCON has installed a total of 90 kW Roof Top Grid Connected Solar Power Plant at Corporate Office which is a step to conserve energy and contributing to environment through usage of Green Energy. Total energy produced by Solar Power plant is 44,853 units of kWh which is 3.1% of the energy being drawn from BSES. IRCON has also installed a total of 75 kW Roof Top Grid Connected Solar Power Plant at its Gurgaon office building.

b) Capacitor banks have been installed at Corporate Office building to improve power factor, which further reduces the Electrical Energy consumption.

c) The internal lighting of Corporate Office building by energy-efficient LED lamps also adds in an energy saving of approx. 3,00,000 units of kWh per annum when compared with normal lights.

d) Automatic / Dynamic Reactive Power Factor (APF) correction / compensation panels of Insulated

Gate Bipolar Transistors (IGBT) technology of 10.7 MVAR capacity have been designed and are being instal l ed at the Receiving Su bstations (RSS) for Delhi-Ghaziabad-Meerut RRTS corridor of NCRTC project for RSS Energy Conservation. Moreover, the RSS Control Room Building is also constructed with highest rating of Indian Green Building Council (IGBC) standards to conserve energy.

e) IRCON has also installed LED Lights for energy conservation which reduces energy consumption by upto 50% in various projects like Loco Shed at Bondamunda, Staff Quarters at Mathura-Kasganj-Kalyanpur RE Project, Katni-Singrauli RE Project, etc. and are also planned to be installed at USBRL E&M Tunnel Project.

f) Capacitor Banks of 2400 kVAR capacity each have also been installed at Baramulla, Qazigund & Budgam TSS (J&K) for USBRL RE project and 04 Nos. Traction Sub-Stations (TSS) of Katni-Singrauli Project to improve the power factor. Further, Capacitor Banks of 5500 kVAR capacity each have been installed in Lalkuan & Kashipur TSS of Moradabad-Kashipur RE Project of Izzatnagar division. More than 34,750 units of electricity on a daily basis will be conserved on installing capacitor banks once electric trains are in operation. Moreover, for Tunnel Substations a total of 16 MVAR capacitor banks are being installed to regulate the reactive power generation due to jet fans, thereby reducing energy consumption.

STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATE SOURCES OF ENERGY:

The Company is utilising the following as an alternate source of energy:

a) IRCON is also providing the features similar to the Green Buildings Constructions' at Corporate Office, Gurugram building and its project offices, thereby reducing the environmental impacts on water, materials, waste, energy and carbon emission. IRCON has installed solar panels at various offices/projects; and LED lights, sensor lights & sensor taps are also being used in the Corporate & other offices to conserve electricity.

b) IRCON has also installed Solar Power Photovoltaic Panels for its office Complex in Sangaldan (J&K) with a capacity of 110 kWp.

CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT:

IRCON has planned to invest ?4.2 Cr. approximately for replacing the existing Heating, Ventilation & Air Condition (HVAC) System at Corporate office with new technology Energy Efficient Inverter Type Air Conditioning System which will reduce the energy consumption by 20-30%.

Further, the old refrigerant of R-22 shall be replaced by the new technology refrigerant R-410A which is environment friendly and reduces the carbon emissions helpful in sustainable development.

TECHNOLOGY ABSORPTION AND UPGRADATION EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION:

Towards technology upgradation, the Company had purchased a New Track Construction (NTC) machine in 2019 for Dedicated Freight Corridor Project, CTP-12 (DFC project), which is successfully commissioned to improve productivity, safety, efficiency and quality in track laying at DFC Project.

Your Company has secured a project for construction of Mumbai-Ahmedabad High Speed Railway (MAHSR) Project on December 24, 2021, which has been designated as the first High Speed Railway networks planned to be constructed in India. For this network the Japanese system of the Shinkansen Bullet Train has been selected for its safety, performance and reliability record. After securing the project, IRCON has finalized the detail programme of High- Speed Track construction based on Shinkansen technology for overall total length of 237 Km between Vapi and Surat Railway Stations. This Shinkansen track would be capable of running bullet trains at maximum permissible speed of 350 Kmph. The company has procured rail welding machine under Make In India scheme and is in the process of commissioning. The Shinkansen technology will use RCC track bed, J Track slabs, Cement Asphalt Grout, Special fittings and JIS Rails instead of conventional ballast-less track being constructed in Metro network of Railways in India.

BENEFITS DERIVED LIKE PRODUCT IMPROVEMENT, COST REDUCTION, PRODUCT DEVELOPMENT OR IMPORT SUBSTITUTION

With the deployment of NTC machine, 260-meter-long rail panel can be laid with uniform sleeper spacing and minimum manual interface. This ensures a better quality of track laying and faster progress of track laying with 1.5 km completion per day.

IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST THREE YEARS RECKONED FROM THE BEGINNING OF THE FINANCIAL YEAR) - N.A.

RESEARCH AND DEVELOPMENT

The Company being primarily an EPC 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 technical competence and efficiency.

INFORMATION TECHNOLOGY AND ERP

The Company's Information Technology (IT) department offers a range of services encompassing Data Networks, implementation of company-wide software applications, procurement of IT hardware equipment, as well as the implementation of Highway Traffic Management Systems (HTMS), Toll Management Systems (TMS), and Weigh-in-Motion systems for major highway projects undertaken and operated by IRCON and its Joint Venture companies as concessioners. IT serves not only as a service provider but also plays a vital role in enhancing productivity within IRCON.

IRCON has recently upgraded to SAP S/4 Hana as Enterprise Resource Planning (ERP) application software for the operations of Finance, Controlling and Human Resource Management. It is leading to company wide information availability, transparency and has enabled faster decision making. SAP Business Objects (SAP BO) an analytical product of SAP was added to SAP implementation to automate on-demand financial reporting. This reporting tool fetches real-time data from SAP and helps in preparation of Financial Statements of the Company. Employee Self Service Portal, Finance and HCM modules of SAP have been rolled out for entire organization and five pilot locations are under go live for full functionalities. The financial statements for the year ended March 31, 2023 were prepared from SAP S4-HANA and salaries of employees are also being processed through its payroll module from April 2022 onwards. Fully functional SAP S4-HANA after implementation will cover end-to-end business processes of IRCON. S4-HANA ERP software's server infrastructure is hosted on RailTel cloud on a MEITY empaneled Datacenters to ensure secured access in high availability environment where in there is scope for capacity augmentation without disruption of regular services.

E-Office system is deployed across IRCON for all domestic and foreign projects. It is a step towards paperless office initiative from Government of India for the approvals and movement of files, note sheets and other official documents. It is complete replacement of physical file system with loss less and undeletable data facility, and Digital Signature authentication features.

Implementation of S4-HANA as well as e-office will be in conjunction to each other, and has helped IRCON to march ahead with near paperless requirement in the entire organization.

Dedicated video conferencing facility based on cutting edge AI based online meeting is being widely used for conducting review meetings with project offices, trainings, promotion interviews and contract management issues etc.

Cyber and Social Engineering attacks are a big concern now a days for organizations information security. IRCON has made efforts in this area and has formulated a Cyber Security Management Plan. Incidents of Cyber-attack are reported to CERT-IN for record and further guidance. Steps are being taken to ensure that proper Cyber security audits are done as per industry practice and norms.

CORPORATE GOVERNANCE

The Company places great emphasis on adhering to corporate governance guidelines and best practices, recognizing their significance in enhancing long-term shareholder value and upholding minority rights. It considers it a fundamental obligation to provide timely and accurate information regarding the Company's operations, performance, leadership, and governance.

In compliance with Regulation 34 of the LODR Regulations and DPE Guidelines on Corporate Governance for Central Public Sector Enterprises issued in May 2010, the Corporate Governance Report, along with the compliance certificates of Corporate Governance norms under the aforementioned LODR Regulations and DPE Guidelines, is attached and constitutes an integral part of this report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2023, the Company has ten directors of which four are whole-time directors [Chairman & Managing Director, Director (Finance), Director (Works) and Director (Projects) (additional charge)], two Government Nominee Directors and four Independent Directors.

The Company has requested the Ministry of Railways for appointment of requisite number of Independent Directors in order to comply with the statutory requirements. There were two vacancies to the post of Independent Directors. Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors had declared Chairman & Managing Director (CMD) as deemed Chief Executive Officer (CEO) and all the Whole-time Directors and Company Secretary as Key Managerial Personnel (KMP) of the Company. The senior most finance official of the Company is designated as Chief Financial Officer (CFO) and KMP.

Board of Directors & Key Managerial Personnel (KMP) as on March 31, 2023

The Board of Directors of the Company as on March 31, 2023 were Executive (Functional) Directors viz.-Shri Yogesh Kumar Misra (DIN: 07654014), Chairman & Managing Director & CEO, Smt. Ragini Advani, (DIN: 09575213), Director (Finance), Shri Parag Verma, (DIN: 05272169) Director (Works), Shri Sandeep Jain (DIN:

09435375) Director (Projects) (Additional Charge); Parttime (Official) Directors viz. Shri Brijesh Kumar Gupta (DIN: 10092756) and Shri Dhananjaya Singh (DIN: 08955500); being Government Nominee Directors and Independent Directors viz. Shri Ajay Kumar Chauhan (DIN: 09394953), Shri Dipendra Kumar Gupta (DIN: 09398271), Smt. Ranjana Upadhyay (DIN: 07787711) (woman independent director) and Dr. Kartik Chandulal Bhadra (DIN: 09453387).

In addition to the CEO and whole-time directors, other KMP, as on March 31, 2023 were Shri B Mugunthan, Executive Director (Finance) & CFO and Ms. Ritu Arora, Company Secretary.

Appointments and cessation of the Directors and KMP during and after close of the FY 2022-23

Changes in the post of Chairman & Managing Director:

After close of the financial year 2022-23, pursuant to Railway Board letter dated April 29, 2023, with effect from April 29, 2023 Shri Yogesh Kumar Misra (DIN: 07654014) relinquished the charge of the post of Chairman & Managing Director and Shri Brijesh Kumar Gupta (DIN: 10092756) assumed the additional charge of the post of Chairman & Managing Director. Shri Gupta is proposed to be regularized as Chairman & Managing Director (Additional Charge) of the Company at the ensuing AGM of the Company.

Changes in the post of Functional Directors

Smt. Ragini Advani (DIN: 09575213) was appointed as Director (Finance) (Additional Director) of the Company w.e.f. April 19, 2022 and regularized as Director (Finance) on June 29, 2022 through Postal Ballot.

Shri Parag Verma (DIN: 05272169) was appointed as Director (Works) (Additional Director) of the Company w.e.f. September 21, 2022. He was regularized as Director (Works) on December 14, 2022 through Postal Ballot.

Shri Shyam Lal Gupta (DIN: 07598920) ceased to be Director (Projects) on December 31, 2022, due to superannuation. Shri Sandeep Jain, IRSE, Executive Director Planning (Civil & PSU) - Railway Board, entrusted with the additional charge of Director (Projects) (Additional Director) w.e.f. January 12, 2023 and ceased to be Director (Projects) (additional charge) on July 07, 2023, due to relinquishment of charge on appointment of regular incumbent to the post of Director (Projects).

Shri Anand Kumar Singh (DIN: 07918656), IRSE on selection by PESB has been appointed as Director (Projects) (Additional Director) w.e.f. July 07, 2023. Shri Singh is proposed to be regularized as Director (Projects) of the Company at the ensuing AGM of the Company.

Shri Mohit Sinha (DIN: 00843548), Additional Member (Revenue), Railway Board relinquished the additional

charge of the post of Director (Finance) of the Company w.e.f. April 19, 2022.

Changes in the post of Part-time (Official) Director / Government Nominee Director:

Shri Brijesh Kumar Gupta (DIN: 10092756), Additional Member (CE), Railway Board was appointed as PartTime (Official) Director (Government Nominee Director) (Additional Director) of the Company w.e.f. March 29, 2023 who then assumed the additional charge of the post of Chairman & Managing Director w.e.f April 29, 2023.

Shri Rajesh Argal, former Additional Member (Planning), Railway Board ceased to be Part-Time (Official) Director (Government Nominee Director) of the Company w.e.f. July 31, 2022 on attaining the age of superannuation.

Shri Ram Prakash, Additional Member (Planning) (L/A) (DIN: 09746225) was appointed as Part-Time (Official) Director (Government Nominee Director) (Additional Director) of the Company w.e.f. September 23, 2022. He was regularized on December 14, 2022 through Postal Ballot and he ceased to be Director on January 31, 2023 on attaining the age of superannuation.

Regularization of Independent Directors:

Shri Ajay Kumar Chauhan, Shri Dipendra Kumar Gupta, Smt. Ranjana Upadhyay (Women Independent Director) and Dr. Kartik Chandulal Bhadra who were appointed as Independent Directors (Additional Directors) during FY 2021-22 were regularized as Independent Directors on the Board of the Company on June 29, 2022 through Postal Ballot.

Change in the KMPs:

Shri B Mugunthan, Executive Director (Finance), was appointed as CFO & KMP w.e.f. April 26, 2022.

The complete details of appointment / relinquishment of post by the Directors and other related details are provided in the Corporate Governance report forming part of Annual Report.

INDEPENDENT DIRECTORS' DECLARATION

The Company has received necessary declaration from all Independent Directors that he/she meets the criteria of independence as laid out in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) and 25(8) of the LODR Regulations. The declarations have been noted by the Board of Directors.

The Ministry of Corporate Affairs (MCA) has issued notifications in October 2019, relating to the creation and maintenance of the data bank for independent directors by Indian Institute of Corporate Affairs at Manesar, Haryana (IICA). Under Section 150(1) of the Companies Act, 2013, IICA conducts Online Proficiency Self-Assessment for

Independent Directors. Accordingly, all the Independent Directors of the Company are registered with data bank of IICA.

APPOINTMENT / RE-APPOINTMENT OF DIRECTORS THROUGH POSTAL BALLOT

Pursuant to the provisions of Section 152(2) of the Companies Act, 2013 every director of the Company has to be appointed in the general meeting of the Company. Further pursuant to LODR Regulations, every listed entity shall ensure that approval of shareholders for appointment of a person on the Board of Directors is taken at the next general meeting or within a time period of three months from the date of appointment. However, CPSEs are allowed that the approval of the shareholders for appointment or re-appointment of a person on the Board of Directors or as a Manager is taken at the next general meeting.

RETIREMENT OF DIRECTORS BY ROTATION

In terms of Section 152 of the Companies Act, 2013, the provisions in respect of retirement of Directors by rotation will not be applicable to the Independent Directors. In view of this, all directors (other than the Independent Directors) are considered for retirement by rotation. Accordingly, as per provisions of the Companies Act, 2013, Smt. Ragini Advani, Director (Finance) is liable for retirement by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, offer herself for re-appointment.

The details of such Director seeking re-appointment / appointment at the ensuing AGM are contained in the Notice convening ensuing AGM of the Company.

BOARD & COMMITTEE MEETINGS

Board Meetings:

The Board met eight (8) times during the FY 2022-23, on April 26, 2022; May 27, 2022; July 22, 2022; August 08, 2022; September 23, 2022; November 11, 2022; December 31, 2022; and February 08, 2023. The necessary quorum in terms of LODR Regulations was present for all the meetings. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013, DPE Guidelines and LODR Regulations.

During the FY 2022-23, all the meetings (except one) of the Board were held at the Company's Registered Office, in New Delhi, through physical and Video Conferencing mode. One Board Meeting was held at Shillong, Meghalaya in compliance with the direction of the DPE for holding Board Meeting / Strategic meets of CPSEs at destinations which have potential for development of tourism sector in the country.

Committee meetings:

Your Company's Board has the following committees:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholders' Relationship Committee

4. Risk Management Committee

5. Corporate Social Responsibility & Sustainability Committee

6. Project Progress Review Committee

During the FY 2022-23, the Audit Committee of the Board met eight (8) times, the Nomination & Remuneration Committee met five (5) times, Stakeholders' Relationship Committee met one (1) time; Risk Management Committee of the Board met two (2) times; the Corporate Social Responsibility & Sustainability Committee met six (6) times, and the Project Progress Review Committee met one (1) time.

Details of constitution, terms of reference of the Committees, and attendance of Directors at meetings of the Committees are provided in the Corporate Governance Report forming part of Annual Report.

Separate Meeting of Independent Directors

In compliance with the provisions of Regulation 25(3) of LODR Regulations, Schedule IV of the Companies Act, 2013 and DPE OM dated March 20, 2013, one separate meeting of Independent Directors was held on March 16, 2023 (which continued on March 17, 2023) without the presence of other Board Members.

SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA

IRCON being a Government Company, the appointment of directors on its Board is made by the President of India through the Administrative Ministry, Ministry of Railways. The key qualifications, skills, expertise and attributes of the Directors is included in the Corporate Governance Report.

PERFORMANCE EVALUATION

IRCON is a Government Company that operates under the administrative control of the Ministry of Railways. The appointment procedure for all directors is prescribed by the Government of India, and the directors of the Company have been appointed in accordance with this procedure. The selection of functional directors, including the Chairman and Managing Director (CMD), follows the recommendations of the Public Enterprises Selection Board (PESB) in line with the procedure and guidelines set by the Government of India. The Department of Public Enterprises (DPE) has also established a system and procedure for evaluating the performance of functional

directors, including the CMD.

The evaluation framework for assessing the performance of functional directors encompasses several key areas:

a) The performance of the Company under the Memorandum of Understanding (MOU) signed with the Ministry of Railways, including the achievement of targets set for each respective director.

b) The evaluation process involves self-assessment by the functional directors themselves, followed by an assessment by the CMD, and finally, a comprehensive evaluation by the Ministry of Railways (the Administrative Ministry).

c) For the CMD, the evaluation includes self-assessment and a final evaluation conducted by the Ministry of Railways.

Regarding Government Nominee Directors, their evaluation is carried out by the Ministry of Railways in accordance with the prescribed procedure. Independent Directors, who are also appointed by the Government of India, undergo evaluation by the Ministry of Railways and, ultimately, by the DPE.

REMUNERATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT

As a Government Company, IRCON follows the guidelines issued by the Department of Public Enterprises (DPE) for determining the remuneration of its functional directors, senior management officials, and other employees. The Company has placed the salient features of its remuneration policy for key managerial personnel and employees on its website (www.ircon.org) under the HRM and Career Sections, as required by Section 178(4) of the Companies Act, 2013.

The remuneration policy of the Company, as well as the procedures and policies for the appointment of Senior Management, are reviewed and recommended by the Nomination & Remuneration Committee before being approved by the Board of Directors.

Furthermore, under Section 197 of the Companies Act, 2013, and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, listed companies are required to disclose specific details of directors' remuneration in the Board's Report. However, Government Companies, including IRCON, are exempted from complying with this provision as per Notification No. GSR 463(E) dated June 5, 2015, issued by the Ministry of Corporate Affairs.

Therefore, such details are not included in the Board's Report of IRCON. However, the remuneration paid to directors during FY 2022-23 is disclosed in the Corporate Governance Report.

INTERNAL CONTROL SYSTEMS

The Company has implemented robust financial controls in accordance with the provisions of the Companies Act, 2013. These internal financial controls over financial reporting are functioning effectively. The controls are designed to ensure the maintenance of accurate accounting records, promote the orderly conduct of business operations in compliance with company policies, safeguard company assets, prevent and detect fraud and errors, and ensure the reliability of financial and operational information. The internal control system, which includes Internal Financial Controls over Financial Reporting, undergoes periodic reviews, and necessary adjustments are made to align with evolving business needs.

Further information about the internal control system can be found in the Management Discussion and Analysis Report.

INTERNAL CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

Your Company has adopted an 'Internal code of conduct for prevention of insider trading in dealing with securities of the Company' (Code of Conduct), to regulate, monitor and report trading by designated persons and their immediate relatives and code for practices and procedures for fair disclosure of Unpublished Price Sensitive Information (UPSI) as per the requirement under SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code of Conduct aims that the insiders of the Company shall not derive any benefit or assist others to derive any benefit from the access to and possession of UPSI about the Company which is not in the public domain and thus constitutes insider information.

The Code of Conduct as approved by the Board has been posted on the website of the Company, i.e., www.ircon. org under the head Codes and Policies in the Investors section.

RISK MANAGEMENT

The Company has an elaborate Enterprise Risk Management (ERM) framework, including risk management policy for risk identification and its mitigation.

As per the LODR Regulations, the Company is having a Board level Risk Management Committee, which as on March 31, 2023 comprised of Director (Works) as Chairman, Director (Finance), Director (Projects), and Dr. Kartik Chandulal Bhadra, Independent Director as members.

Details of the Risk Management System are provided in the Management Discussion and Analysis Report and the Risk

Management Committee are provided in the Corporate Governance Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM AND VIGILANCE ACTIVITIES

Being a Government Company, the Company has a separate Vigilance Department which deals with fraud or suspected fraud involving employees/ representatives of suppliers, contractors, consultants, service provider or any other party doing business with the Company. Whistle Blower and Fraud Prevention and Detection Policies have been approved by the Board of Directors and are available on the website of the Company. The Company has in place the necessary vigil mechanism for employees and directors to report to the Management concerns about unethical behavior, actual or suspected fraud, violation of the Company's Code of Conduct or ethics policy and instances of a leak of unpublished price sensitive information. If one raises a concern under this Policy, the complainant will not be at risk of suffering any form of reprisal or retaliation (including discrimination, reprisal, harassment or vengeance) in any manner. No person has been denied access to the Chairman & Managing Director, IRCON or to Chairman of the Audit Committee.

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 carry out investigations into complaints. During FY 2022-23, the Department has carried out 01 surprise inspection and 06 periodic inspections on high-value projects. Apart from surprise and periodic inspections department has carried out 04 preventive inspections on tenders floated from the corporate office. Chief Technical Examiner's Organisation (Technical wing of Central Vigilance Commission) has also carried out extensive investigation of 01 Project.

Complaints raised against officials and procedures, etc., by various Authorities (such as CVC/Railway Board Vigilance, CBI, Prime Minister's Office, etc.,) and received from other sources were investigated to their logical conclusion.

During FY 2022-23, the Department has received a total of 12 nos. complaints and total 11 nos. complaints were disposed off including that of previous years. Nature of Complaints includes irregularities during tendering, execution of contract, anonymous & pseudonymous

each contract / agreement / transaction in a financial year. The transactions, if any, entered into pursuant to the omnibus approval granted, are placed before the Audit Committee on a quarterly basis. Approval of specific related party transactions other than those covered under the Omnibus approval are also obtained from the Audit Committee/ Board in compliance with the requirement of the Companies Act 2013 and LODR Regulations.

In pursuance to Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the "Disclosure of particulars of contracts / arrangements entered by the Company with related parties including certain arms-length transactions" are disclosed in Form AOC-2 and is annexed to this Report.

The Related Party Transaction Policy of the Company has been revised and approved by the Board during the year 2022-23 and is uploaded on the Company's website under the 'Investors' section at www.ircon.org.

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 March 31, 2023, and of the profit of the Company for the FY 2022-23;

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, 2013, 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;

v) that internal financial controls were adequate and operating effectively; and

vi) that proper system has been devised to ensure compliances with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The "Business Responsibility and Sustainability Report"

(BRSR) in compliance with the provisions of Regulation 34 of the LODR Regulations, in the format prescribed under SEBI Circular May 05, 2021 forms part of the Report. The report describes the initiatives taken by IRCON from an environmental, social and governance perspective.

MOU RATING / AWARDS

As per the DPE guidelines, the Ministry of Railways and IRCON enter into a Memorandum of Understanding (MOU) annually, outlining selected parameters and targets for each financial year. The Company's performance is evaluated at the end of the year based on the achievement of these targets. According to the MOU parameters and the Company's performance in the fiscal year 2021-22, it has received a rating of 'Very Good'.

IRCON has been awarded several prestigious awards. Some of the significant awards and accolades won so far during the year 2022-23 are mentioned below:

• Greentech Environment Award for Environment Protection

• ENR - Construction World Global Award

• Dun & Bradstreet PSU & Government Summit - Aatma Nirbhar Bharat Initiatives

AUDITORS

STATUTORY AUDITORS

The Comptroller & Auditor General of India (C&AG) has appointed M/s HDSG & Associates, Chartered Accountants, New Delhi (Firm Registration No.002871N) as the single Statutory Auditors of the Company for FY 2022-23, except for the following foreign projects for which C&AG has approved the appointment of the following as statutory auditors:

COST AUDITORS

In pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Company has maintained the cost records of the Company. The Board of Directors has appointed M/s R.M. Bansal & Co., Cost Accountants, (having firm Registration No.000022) as Cost Auditor of the Company for the FY 2022-23 for conducting the audit of cost records

SECRETARIAL AUDITORS

In pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the LODR Regulations, the Board of Directors has appointed M/s Kumar Naresh Sinha & Associates, Company Secretary in practice (Firm Registration No. S2015UP440500) as the Secretarial Auditor for conducting Secretarial Audit of the Company for the FY 2022-23.

INTERNAL AUDITORS

The Board of Directors have appointed following Internal Auditors for the Indian & Foreign Projects for the FY 2022-23:

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

IRCON is engaged in the business of providing infrastructure facilities and is exempted from compliance with all the provisions of Section 186 [except sub-section (1) to Section 186] in terms of Section 186(11)(a) read with Schedule VI of the Companies Act, 2013.

The details of investments made, loans granted, and guarantees extended by the Company to its subsidiary and joint venture companies during the FY 2022-23 forms part of the notes to the standalone financial statements provided in the Annual Report.

DEPOSITS

The Company did not accept any deposits from the public during the financial year.

OTHER DISCLOSURES

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as at March 31, 2023 is placed on the website of the Company at www.ircon.org, under the Investors section.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has complied with the provisions relating to the Investor Education and Protection Fund (IEPF) under the Companies Act, 2013 and the rules made thereunder. Company Secretary is the nodal officer to deal with the IEPF Authorities and compliances related thereto.

No amount is due for transfer to IEPF and details of unclaimed dividend as on March 31, 2023 are available on the website of the Company, and this is also disclosed in the Corporate Governance report. Further, the Company does not have shares in Demat Suspense Account/ Unclaimed Suspense Account/ Unclaimed Dividend Account and the same has been disclosed in the Corporate Governance report.

SECRETARIAL STANDARDS

During the financial year, the Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR 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 during the FY 2022-23.

DETAILS OF APPLICATION MADE OR ANY PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which will have material impact on the business of the Company.

CHANGE IN THE NATURE OF BUSINESS

There was no material change in the nature of business of the Company during the FY 2022-23.

We would like to express our sincere appreciation to all the dedicated employees of the Company at every level. Their unwavering efforts, dedication, sincerity and commitment have significantly contributed to achieving the highest ever performance of the Company.