2.2.16 Provisions, contingent assets and contingent
liabilities
Provisions
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation.
Provisions recognised by the Company include
provisions for Maintenance, Demobilisation, Legal
Cases, Corporate Social Responsibility (CSR),
Onerous Contracts and others.
If the effect of the time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage of
time is recognised as a finance cost.
These provisions are reviewed at each reporting
date and adjusted to reflect the current best
estimates.
Onerous contracts
If the Company has a contract that is onerous,
the present obligation under the contract is
recognised and measured as a provision. However,
before a separate provision for an onerous
contract is established, the Company recognises
any impairment loss that has occurred on assets
dedicated to that contract.
These estimates are reviewed at each reporting date
and adjusted to reflect the current best estimates.
Contingent liabilities
Contingent liabilities are disclosed when there is
a possible obligation or present obligations that
may but probably will not, require an outflow of
resources embodying economic benefits or the
amount of such obligation cannot be measured
reliably. When there is possible obligation or a
present obligation in respect of which likelihood of
outflow of resources embodying economic benefits
is remote, no provision or disclosure is made.
These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
Contingent assets
Contingent assets are not recognised though are
disclosed, where an inflow of economic benefits is
probable.
2.2.17 Leases
If the contract conveys the right to control the use
of an identified asset for a period in exchange for
consideration, it is treated as lease.
a) Company as a lessee
The Company recognises a right-of-use asset
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and leases for low value underlying
assets.
i) Right-of-use assets
The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted
for any re-measurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before
the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.
The right-of-use assets are also subject to
impairment.
ii) Lease liabilities
At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made over
the lease term. The lease payments include fixed
payments (including in substance fixed payments)
less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and
amounts expected to be paid under residual value
guarantees.
In calculating the present value of lease payments,
the Company uses its incremental borrowing rate at
the lease commencement date because the interest
rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities
is re-measured if there is a modification, a change
in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a
change in an index or rate used to determine such
lease payments) or a change in the assessment of
an option to purchase the underlying asset.
The Company's lease liabilities are included in
financial liabilities.
iii) Short term lease and leases of low value assets
The Company applies the short-term lease
recognition exemption to its short-term lease
contracts including lease of residential premises and
offices (i.e., those leases that have a lease term of 12
months or less from the commencement date and
do not contain a purchase option). It also applies
the lease of low-value assets recognition exemption
to leases of office equipment that are considered to
be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.
b) Company as a lessor
Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset are classified as operating
leases. Rental income arising is accounted for on
a straight-line basis over the lease terms and is
included in revenue in the statement of profit or
loss due to its operating nature. Initial direct costs
incurred in negotiating and arranging an operating
lease are added to the carrying amount of the
leased asset and recognised over the lease term on
the same basis as rental income.
2.2.18 Financial instruments
The Company recognises financial assets and
financial liabilities when it becomes a party to the
contractual provisions of the instrument.
a) Financial assets
Initial recognition and measurement
All financial assets (excluding trade receivables
which do not contain a significant financing
component, being measured at transaction price)
are recognised initially at fair value plus transaction
costs that are directly attributable to the acquisition
of financial asset. Transaction costs directly
attributable to the acquisition of financial assets
carried at fair value through profit or loss (FVTPL)
are expensed in statement of profit and loss.
Subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in below categories based on
the Company's business model and the cash flow
characteristics of the asset:
• Financial assets at amortised cost
After initial measurement, the financial assets that
are held for collection of contractual cash flows
where those cash flow represent solely payments of
principal and interest (SPPI) on the principal amount
outstanding are measured at amortised cost using
the effective interest rate (EIR) method. Interest
income from these financial assets is included in
other income.
• Financial assets at fair value through other
comprehensive income (FVTOCI):
A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cashflows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cashflows that are solely payments of principal and
interest on the principal amount outstanding.
• Financial assets at fair value through profit or
loss (FVTPL):
Assets that do not meet the criteria for amortised
cost or FVTOCI are measured at fair value through
profit or loss (FVTPL). Debt instruments included
within the FVTPL category are measured at fair
value with all changes recognised in the statement
of profit and loss.
Impairment of financial assets
The Company applies the expected credit loss (ECL)
model for recognising impairment loss on financial
assets measured at amortised cost or financial
assets measured at FVTOCI.
The Company follows ‘simplified approach' for
recognition of impairment loss allowance on:
• Trade receivables or contract revenue
receivables; and
• All lease receivables resulting from transactions
within the scope of Ind AS 116
Under simplified approach, impairment loss
allowance is recognised based on lifetime ECLs at
each reporting date.
For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that whether there has been a significant increase
in the credit risk since initial recognition. If credit
risk has not increased significantly, 12-month ECL is
used to provide for impairment loss.
Lifetime ECL are the expected credit losses
resulting from all possible default events over the
expected life of a financial asset. The 12-month ECL
is a portion of the lifetime ECL which results from
default events that are possible within 12 months
after the reporting date.
ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
income/ expense in the statement of profit and
loss.
The balance sheet presentation of impairment for
various financial instruments is described below:
• Financial assets measured as at amortised cost,
contractual revenue receivables and lease
receivables: ECL is presented as an allowance.
The impairment allowance reduces the net
carrying amount. Until the asset meets write¬
off criteria, the Company does not reduce
impairment allowance from the gross carrying
amount.
• Loan commitments and financial guarantee
contracts: ECL is presented as a provision in the
balance sheet i.e., as a liability.
• Debt instruments measured at FVTOCI: For debt
instruments measured at FVTOCI, the expected
credit losses do not reduce the carrying amount
in the balance sheet, which remains at fair value.
Instead, an amount equal to the allowance is
recognised in other comprehensive income as
the ‘accumulated impairment amount'.
Derecognition of financial assets
The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition
under Ind AS 109.
The difference between the carrying amount and
the amount of consideration received / receivable
is recognised in the statement of profit and loss.
b) Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair
value and, in the case of borrowings and payables,
net of directly attributable transaction costs.
The Company's financial liabilities includes trade
payables, borrowings and other financial liabilities
etc.
Subsequent measurement
The measurement of financial liabilities depends on
their classification, as described below:
• Financial liabilities at fair value through profit or
loss.
The company has not designated any financial
liabilities at FVTPL.
• Financial liabilities at amortised cost
Borrowings, trade payables and other financial
liabilities
After initial recognition, borrowings, trade payables
and other financial liabilities are subsequently
measured at amortised cost using the EIR method.
Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The
EIR amortisation is included as finance costs in the
statement of profit and loss.
Derecognition of financial liabilities
A financial liability (or a part of a financial liability)
is derecognised from the Company's Balance Sheet
when the obligation specified in the contract is
discharged or cancelled or expires. The difference
in the respective carrying amounts is recognised in
the statement of profit and loss.
c) Financial guarantee contracts
Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder for
a loss it incurs because the specified debtor fails
to make a payment when due in accordance with
the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at fair
value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per
impairment requirements of Ind AS 109 and the
amount recognised less cumulative amortisation.
d) Offsetting of financial instruments
Financial assets and financial liabilities are offset,
and the net amount is reported in the balance sheet
if there is a currently enforceable contractual legal
right to offset the recognised amounts and there is
an intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.
2.2.19 Fair value measurement
The Company measures financial instruments at fair
value at each reporting period.
The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy
and are disclosed accordingly in the financial
statements.
External valuers are involved for valuation of
significant assets and liabilities, if any. At each
reporting date, the Company analyses the
movements in the values of assets and liabilities
which are required to be remeasured or re-assessed
as per the Company's accounting policies.
2.2.20 Earnings per Share
In determining basic earnings per share, the
company considers the net profit attributable to
equity shareholders. The number of shares used in
computing basic earnings per share is the weighted
average number of shares outstanding during the
period.
In determining diluted earnings per share, the
net profit attributable to equity shareholders and
weighted average number of shares outstanding
during the period are adjusted for the effect of all
dilutive potential equity shares. The Company does
not have any dilutive potential equity shares.
2.2.21 Non - current asset held for sale
Non-current assets (or disposal groups) are
classified as assets held for sale when their carrying
amount is to be recovered principally through a sale
transaction and a sale is considered highly probable.
The sale is considered highly probable only when the
asset or disposal group is available for immediate
sale in its present condition, it is unlikely that the
sale will be withdrawn, and sale is expected within
one year from the date of the classification. Disposal
groups classified as held for sale are stated at the
lower of carrying amount and fair value less costs
to sell. Property, plant and equipment, investment
property and intangible assets are not depreciated
or amortised once classified as held for sale. Assets
classified as held for sale/distribution are presented
separately in the balance sheet.
If the criteria stated by IND AS 105 “Non-current
Assets Held for Sale" are no longer met, the
disposal group ceases to be classified as held for
sale. Non-current asset that ceases to be classified
as held for sale are measured at the lower of (i) its
carrying amount before the asset was classified as
held for sale, adjusted for depreciation that would
have been recognised had that asset not been
classified as held for sale, and (ii) its recoverable
amount at the date when the disposal group ceases
to be classified as held for sale. The depreciation
reversal adjustment related property, plant and
equipment, investment property and intangible
assets is charged to statement of profit and loss in
the period when non-current assets held for sale
criteria are no longer met.
2.2.22 Prior Period Adjustment
Errors/omissions discovered in the current year
relating to prior periods are treated as immaterial
and adjusted during the current year, if all such
errors and omissions in aggregate do not exceed
0.50% of total operating revenue as per last audited
financial statement of the Company.
2.2.23 Significant accounting estimates and judgments
The preparation of Standalone Financial Statements
requires the management to make judgements,
accounting estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
This policy provides an overview of the areas
that involved a higher degree of judgement or
complexity, and of items which are more likely
to be materially adjusted due to estimates and
assumptions turning out to be different than those
originally assessed.
Significant areas of estimation and judgements as
stated in the respective accounting policies that
have the most significant effect on the financial
statements are as follows:
Allowances for uncollected trade receivables
Trade receivables do not carry interest and are stated
at their nominal values as reduced by appropriate
allowances for estimated irrecoverable amount are
based on ageing of the receivable balances and
historical experiences. Individual trade receivables
are written off when management deems not to be
collectible.
Defined benefit plans
The costs of post-retirement benefit obligation are
determined using actuarial valuations. An actuarial
valuation involves making various assumptions that
may differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases, mortality rates and
future pension increases. Due to the complexities
involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are
reviewed at each reporting date.
Contingencies
In the normal course of business, contingent
liabilities may arise from litigation and other claims
against the Company. There are certain obligations
which managements have concluded based on all
available facts and circumstances are not probable
of payment or difficult to quantify reliably and such
obligations are treated as contingent liabilities and
disclosed in notes.
Impairment of financial assets
The impairment provision for financial assets is
based on assumptions about risk of default and
expected loss rates. The company uses judgement
in making these assumptions and selecting the
inputs to the impairment calculation, based on the
Company's past history, existing market conditions
as well as forward looking estimates at the end of
each reporting period.
Taxes
Uncertainties exist with respect to the interpretation
of complex tax regulations, changes in tax laws, and
the amount and timing of future taxable income.
Given the nature of business differences arising
between the actual results and the assumptions
made, or future changes to such assumptions,
could necessitate future adjustments to tax income
and expense already recorded. The Company
establishes provisions, based on reasonable
estimates. The amount of such provisions is based
on various factors, such as experience of previous
tax audits and differing interpretations of tax
regulations by the taxable entity and the responsible
tax authority. Such differences of interpretation may
arise on a wide variety of issues depending on the
conditions prevailing in the respective domicile of
the companies.
Deferred tax assets are recognised for unused tax
losses to the extent that it is probable that taxable
profit will be available against which the losses can
be utilised. Significant management judgement is
required to determine the amount of deferred tax
assets that can be recognised, based upon the
likely timing and the level of future taxable profits
together with future tax planning strategies.
Impairment of non-financial assets
The entity assesses at each reporting date whether
there is an indication that an asset may be impaired.
Determining the recoverable amount of the assets
is judgmental and involves the use of significant
estimates and assumptions. The estimates are based
upon assumptions believed to be reasonable, but
which are inherently uncertain and unpredictable
and do not reflect unanticipated events and
circumstances that may occur.
Non-current asset held for sale
Non-current assets (or disposal groups) are
classified as assets held for sale when their carrying
amount is to be recovered principally through
a sale transaction and a sale is considered highly
probable. The sale is considered highly probable
only when the asset or disposal group is available
for immediate sale in its present condition, it is
unlikely that the sale will be withdrawn, and sale
is expected within one year from the date of the
classification.
Leases - Estimating the incremental borrowing
rate
The Company cannot readily determine the
interest rate implicit in the lease, therefore, it uses
its incremental borrowing rate (IBR) to measure
lease liabilities. The IBR is the rate of interest that
the Company would have to pay to borrow over a
similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment.
Determining the lease term of contracts with
renewal and termination options - Company as
lessee
The Company determines the lease term as the
non-cancellable term of the lease, together with
any periods covered by an option to extend the
lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Company applies judgement in evaluating
whether it is reasonably certain whether or not
to exercise the option to renew or terminate the
lease. After the commencement date, the Company
reassesses the lease term if there is a significant
event or change in circumstances that is within its
control and affects its ability to exercise or not to
exercise the option to renew or to terminate (e.g.,
construction of significant leasehold improvements
or significant customisation to the leased asset).
Revenue recognition
The Company's revenue recognition policy is
central to how the Company values the work it has
carried out in each financial year.
These policies require forecasts to be made of the
outcomes of Contracts, which require, assessments
and judgements to be made on changes in scope of
work and claims and variations.
There are several long term and complex projects
where the Company has incorporated significant
judgements over contractual entitlements. The
range of potential outcomes could result in a
materially positive or negative change to underlying
profitability and cash flow.
Estimates are also required with respect to the
below mentioned aspects of the contract:
• Determination of stage of completion
• Estimation of project completion date
• Provisions for foreseeable losses
• Estimated total revenues and estimated total
costs to completion, including claims and
variations.
These are reviewed at each reporting date and
adjust to reflect the current best estimates.
Note:
(i) These valuations are based on valuations performed by a registered valuer as defined under rule 2 of Companies
(Registered Valuers and Valuation) Rules, 2017 applying valuation model acceptable internationally. Fair Values
are based on income/cost/market value approach.
(ii) The fair value measurement is categorised in Level 3 of fair value hierarchy.
(iii) The investment property in Noida comprises three locations, having lease term of 90 years. Additionally, the
properties in Gurugram and Bangalore are located at single location and are freehold.
(iv) Other provisions amounting to ? 0.57 crore has been created towards capital work in progress in FY 2023-24 for
the Sector 125, Noida property due to pending resolution of the dispute with the Noida Authority.
(i) (a) The Company vide board approval dated 12th August, 2021 has waived interest on its loan given to IRCON PB
Tollway Limited for the period 1st October, 2019 till 31st March, 2024 and deferment of balance interest till
repayment of principal. Moreover, the loan repayment schedule has also been revised during the year. The
said waiver and revision in repayment schedule has been considered as Investment in subsidiary by the
Company in accordance with provision of Ind AS. Accordingly ? 63.55 crore (31st March, 2025: ? 62.60 crore)
has been included in above.
(b) Includes fair value of the financial guarantee of ? 0.19 crore (31st March, 2025 ? 0.19 crore) issued by Ircon to
State Bank of India on behalf of and in respect of term loan facility availed by Ircon Shivpuri Guna Tollway
Limited (ISGTL).
(c) BoD has approved the Equity participation (committed), not exceeding ? 10.00 crore in Wholly Owned
Subsidiary, Ircon Vadodara Kim Expressway limited (IVKEL) Further, BoD has approved interest free loan
not exceeding ? 195.74 crore for IVKEL which has been paid. Further, this includes fair value of the financial
guarantee of ? 0.24 crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility
availed by IVKEL.
(d) Includes fair value of the financial guarantee of ? 0.83 crore (as on 31st March, 2025 ? 0.83 crore) issued by
IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by Ircon Davangere
Haveri Highway Limited ( IDHHL), Wholly Owned Subsidiary. Further, BoD has approved interest free loan
not exceeding ? 13.86 crore for IDHHL which has been paid.
(e) BoD has approved the Equity participation (committed), not exceeding ? 5 Lakh in Wholly Owned
Subsidiary, Ircon Gurgaon Rewari Highway Limited(IGRHL). Further, BoD has approved interest free loan
not exceeding ? 157.43 crore for IGRHL out of which ? 114.18 crore (31st March, 2025: 88.35 crore) has been
paid. Additionally, this includes fair value of the financial guarantee of ? 0.26 crore issued by IRCON to Indian
Overseas Bank on behalf of and in respect of term loan facility availed by IGRHL.
(f) BoD has approved the Equity participation (committed), not exceeding ? 17.16 crore, out of which 9.34 crore
has been paid to Ircon Akloli-Shirsad Expressway Limited (IASEL). Further, BoD has approved interest free
loan not exceeding ? 154.43 crore for IASEL out of which ? 139.58 crore (31st March, 2025 ? 104.98 crore) has
been paid. Additionally, this includes fair value of the financial guarantee of ? 0.19 crore issued by IRCON to
Bank of Baroda on behalf of and in respect of term loan facility availed by IASEL.
(g) BoD has approved the Equity participation (committed), not exceeding ? 14.27 crore, out of which 14.27
crore has been paid to Ircon Ludhiana Rupnagar Highway Limited (ILRHL). Further, BoD has approved
interest free loan not exceeding ? 128.43 crore for ILRHL out of which ? 119.96 crore (31st March, 2025 ? 99.97
crore) has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.24 crore issued
by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by ILRHL.
(h) BoD has approved the Equity participation (committed), not exceeding ? 20.58 crore, out of which 20.58
crore has been paid to Ircon Bhoj Morbe Expressway Limited (IBMEL). Further, BoD has approved interest
free loan not exceeding ? 185.27 crore for IBMEL out of which ? 126.42 crore (31st March, 2025 ? 81.42 crore)
has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.15 crore issued by IRCON
to Bank of Baroda on behalf of and in respect of term loan facility availed by IBMEL.
(i) BoD has approved the Equity participation (committed), not exceeding ? 5 lakh for WOS, Ircon Haridwar
Byepass Limited (IHBL). Further, BoD has approved interest free loan not exceeding ? 120.99 crore for IHBL
out of which ? 82.37 crore (31st March, 2025 ? 82.37 crore) has been paid. Additionally, this includes fair
value of the financial guarantee of ? 0.30 crore issued by IRCON to State Bank of India on behalf of and in
respect of term loan facility availed by IHBL.
(j) BoD has approved the Equity participation (committed), not exceeding ? 3.80 crore in Ircon Renewal Power
Limited (IRPL). Further, BoD has approved interest free loan not exceeding ? 108.03 crore in IRPL, out of
which ? 108.03 crore (31st March, 2025: ? 108.03 crore) has been paid. Additionally, BoD has approved the
interest-bearing Optionally Convertible Debentures (OCDs) of ? 88.99 crore, out of which ? 88.99 crore (31st
March,2025 : ? 66.00 crore ) has been paid.
(ii) (a) Includes fair value of the financial guarantee for ? 0.28 crore issued by IRCON to Punjab National Bank on
behalf of and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31st March, 2026 is Nil
(as on 31st March, 2025 Nil).
Further, Pursuant to the the Concession Agreement dated 28th September 2005, the toll collection rights
of the Ircon - Soma Tollway Private Limited (ISTPL), a Joint Venture Company with 50% holding, in which
Company has an investment of ? 63.87 Crore, are scheduled to cease on 14th May, 2026 upon expiry of the
extended concession period. Subsequently, the highway assets shall be handed over to NHAI in accordance
with the terms of the Concession Agreement. Based on Management assessment and intention to cease
operations upon completion of the concession period, the financials of the Joint Venture company have
been prepared on a basis other than going concern. As on 31.03.2026, net worth of ISTPL comes to ? 302.92
Crores, out of which 50% share i.e. ? 151.46 Crores pertains to IRCON. Therefore, management does not
perceive any impairment in the value of investment in ISTPL.
(b) The Ministry of Railways (MoR), vide letter No. 2011/LMB/22/1/39 dated 18.10.2021, granted in-principle
approval for the closure of Indian Railway Station Development Corporation Limited (IRSDC), a Joint Venture
Company, and transfer of its business to RLDA/MoR. During FY 2024-25, with the consent of all joint venture
partners (IRCON, RITES & RLDA), it was decided to transfer the assets and liabilities of IRSDC (excluding
investments in SITCO and GARUD/Station Facility Management) to RLDA on a slump sale basis at book value
as on 31.12.2024, amounting to approximately ?39.89 crore (±5%). The Business Transfer Agreement was
signed on 09 April 2025, and consideration of ?39.89 crore was received by IRSDC from RLDA on 11 April
2025.
Further, consideration against SITCO has also been received from RLDA against their share of ?6.30 crore in
FY 2023-24 and acquired IRSDC's share in GARUD for ?12.49 crore in June 2025.
The financial statements of IRSDC have been prepared on a liquidation basis since FY 2021-22.
In the Extraordinary General Meeting (EGM) held on 05 May 2026, shareholders approved voluntary liquidation
under Section 59 of the Insolvency & Bankruptcy Code (IBC) and appointed a Liquidator. Liquidation formally
commenced on the same date.
As of the reporting date, the Company continues to monitor developments and does not foresee any
impairment in the value of investment. The Company share in IRSDC's reported net worth stands at ?64.65
crore, representing 26% of ?248.67 crore."
(c) Ministry of Railway (MoR) has granted in-principle approval for closure of Bastar Railway Private Limited,
a joint venture company and transfer of its assets and liabilities to MoR. The legal formalities, pricing
and related modalities are in process and the Company does not foresee any impairment in the value of
investment at this stage.
(d) Board of Directors have approved Interest free loan of ? 173.76 crore in favour of Jharkhand Central Railway
Limited (JCRL), out of which ? 173.76 crore (31st March, 2025: ? 114.11 crore) has been paid.
(e) Board of Directors have approved Interest free loan, of ? 106.63 crores in favour of Mahanadi Coal Railway
Limited (MCRL) out of which ? 84.50 crore (31st March, 2025: ? 84.50 crore) has been paid. Further, It has been
decided to handover Phase- I (Angul - Balram, 14 KM already operational) and Phase- II (Balram-Putgadia-
Tentuloi,54 KM under construction) of MCRL Project to Ministry of Railways (MoR). The legal formalities,
pricing and related modalities are in process and the Company does not foresee any impairment in the
value of investment at this stage.
(f) BoD has approved interest free loan of ? 106.10 crore in favour of Chhattisgarh East Railway Limited (CERL),
out of which ? 46.20 crore (31st March, 2025 46.20 crore) has been paid.
(g) BoD has approved interest free loan of ? 193.36 crore in favour of Chhattisgarh East-West Railway Limited
(CEWRL), out of which ? 193.36 crore (31st March, 2025 ? 64.48 crore) has been paid.
(iii) The Interest free loan as per above will be repaid only on winding up of the SPVs/JV or end of concession
period which ever is later.
(d) Terms / Rights attached to Equity Shares :
(i) Voting
The Company has only one class of equity shares having a par value of ?2 per share. Each holder of equity
share is entitled to one vote per share.
(ii) Liquidation
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion
to the number of equity shares held by the shareholders
(iii) Dividend
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing
Annual General Meeting
19.2 Other Provisions :
Disclosures as per Ind AS 37 regarding nature of provisions and movements in provisions are as follows :
a) Demobilisation Provisions
The Company has made provision for demobilisation to meet the expenditure towards demobilisation of
manpower and plant & equipment in respect of foreign projects.
b) Maintenance Provisions
- In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.
- Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover company's liability
during defect liability period keeping into consideration the contractual obligations, obligations of the sub¬
contractor, operating turnover and other relevant factors
c) Onerous Contracts
The Company has a contract where total contract cost exceeds the total contract revenue. In such situation as
per Ind AS 115 and Ind AS 37 the Company has to provide for these losses. The provision is based on the estimate
made by the management.
d) Legal Cases
Provision for legal cases represents liabilities that are expected to materialise in respect of matters in courts,
arbitrations and appeal.
e) Provisions for Other Expenses
Provision for other expenses represents expected liabilities in respect of indirect taxes and Others
- Sanction : - ?1000.00 Crore, Subsequently, the Bank reduced the limit to ?200 crore based on the Company's
request and considering the current level of fund utilisation. The full fledged reduction by the Bank will be carried
out at the time of renewal of the facility.
- Date of Sanction :- 30.09.2025
- Tenor / Repayable on Demand :- The facility is available for 12 months from the sanction date, subject to review
every 12 months.
(b) Rate of Interest :
(i) Working Capital Demand Loan (WCDL)
- Benchmark Rate: 91-Day Treasury Bill (T-Bill) rate plus a spread of 75 basis points (bps), determined on the
drawal date of each WCDL tranche.
- Applicable Rate during the year: 6.01% to 6.08% p.a. (as applicable on respective drawal dates during the
financial year).
- Rate as at Balance Sheet Date: 6.04% p.a. (91-Day T-Bill rate of 5.29% as at [balance sheet date] plus 75 bps
spread).
(ii) Cash Credit (CC)
- Benchmark Rate: 1-Month MCLR of State Bank of India.
- Rate at Date of Sanction (30.09.2025): 7.90% p.a.
- Reset Frequency: The rate of interest is reset every 1 month based on the applicable 1-Month MCLR of SBI
effective on the reset date.
- Rate as at Balance Sheet Date: 7.85% p.a. (based on 1-Month MCLR applicable on 31st March, 2026.
(c) Details of Security:
The above credit facility is secured by a first pari-passu charge over:
- Present and Future Stocks of raw materials, construction materials, work-in-progress, finished goods.
- Present and future receivables/bills receivable, including receivables from Group companies/ Joint Ventures
(JVs)/ Subsidiaries.
- Book debts and consumable stores & spares of the company, both Present and Future.
- All these current assets, whether lying loose or stored in or about or shall hereinafter from time to time be
brought into or upon or be stored or be in or about of the Company's factories, premises, and godowns, in
transit, on high seas, or on order or delivery, howsoever and wheresoever in the possession of the Company and
either by way of substitution or addition.
Charge Registration: The charge between IRCON International Limited (First Party) and State Bank of India (Second
Party) has been duly created and registered with the Ministry of Corporate Affairs (MCA) on 27th November 2025
in accordance with Section 77 of the Companies Act, 2013.
(d) Other Disclosures
(i) Default in Repayment
There has been no default in repayment of principal or payment of interest on the above borrowings as at the
end of the financial year.
(ii) Utilisation of Borrowings
The Borrowings availed has been utilised for the purposes for which they were sanctioned.
(iii) Stock Statement and Quarterly Returns
- Monthly Stock Statement: As per the sanctioned terms, the Company is required to submit a monthly stock
statement to the Bank by the 20th day of the succeeding month.
- Penal Interest: Any delay beyond the stipulated deadline in submission of the stock statement shall attract a
penal interest of 0.05% p.a., calculated on the sanctioned limit for the period of delay.
- Status during the year: There was no delay in the submission of stock statements; therefore, penal interest was
not applicable.
- Quarterly Returns: The quarterly returns / statements filed by the Company with State Bank of India are in
agreement with the books of account of the Company for the respective quarters.
31 A. Fair Value Measurements
(i) Category wise classification of Financial Instruments
Financial assets and financial liabilities are measured at fair value in these financial statement and are grouped into
three levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to
the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and
other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these
instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties. The following methods and assumptions were used to estimate the
fair values:
i) The fair value of investments in mutual fund units is based on the Net Asset Value (‘NAV') as stated by the issuers
of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at
which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from
the investors
ii) Investment in subsidiaries and joint ventures are classified as equity investments which have been accounted at
historical cost. Since these are out of scope of Ind AS 109 for the purposes of measurement, the same have not
been disclosed in the tables above.
* During the financial year 2025-26 and 2024-25, there were no transfer between Level 1, Level 2 and Level 3 fair
value measurements.
31 B. Financial Risk Management
The Company's principal financial liabilities comprise borrowings, trade, lease liability and other payables. The
Company's principal financial assets include loans to related parties, trade and other receivables, and cash and
short-term deposits that derive directly from its operations. The Company also holds investment in mutual funds,
tax free bonds and Government securities. The Company's activities expose it to some of the financial risks:
market risk, credit risk and liquidity risk.
a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of
changes in market prices. Market risk comprises Foreign currency risk and Interest rate risk. Financial instruments
affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial
instruments.
(i) Foreign Currency Risk
The Company operates internationally and is exposed to insignificant foreign currency risk (since receipts &
payments in foreign currency are generally matched) arising from foreign currency transactions, primarily with
respect to the USD, EURO, BDT, DZD, LKR, JPY, MMK and ZAR, etc Significant foreign currency risk of group are
naturally hedged.
As of March 31, 2026 and March 31, 2025, every 5% increase or decrease of the respective foreign currency would
impact our profit before tax by approximately ? 2.22 crore and ? 28.96 crore respectively.
The Company's significant exposure to foreign currency risk at the end of reporting period are as follows:
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because
of change in market interest rate. The company is exposed to interest rate risk arising mainly from current
borrowing with floating interest rate. The company manages its interest risk in accordance with the companies
policies and risk objective. Financial instruments affected by interest rate risk includes tax free bonds, Govt.
Securities and deposits with banks. Interest rate risk on these financial instruments are very low as interest rate
is fixed for the period of financial instruments.
(ii) Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion
of loans and borrowings affected. The risk estimates provided assume a parallel shift of 0.50% interest rate across
all yield curves while all other variables held constant. This calculation also assumes that the change occurs at the
balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end
balances are not necessarily representative of the average debt outstanding during the year.
b) Credit Risk
The Company's customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in
India and abroad. Accordingly, the Company's customer credit risk is low. The Company's average project execution
cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments
with a credit period ranging from 45 to 60 days and certain retention money to be released at the end of the project.
In some cases retentions are substituted with bank / corporate guarantees. The Company has a detailed review
mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus
for realisation.
The Company is exposed to credit risk for guarantees given. The Company's maximum exposure in this respect is the
maximum amount the Company may have to pay if the guarantee is called on (see Note 37). Based on expectations at
the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable
under the arrangement.
Trade and other receivable
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the industry and country in which the customer operates,
also has an influence on credit risk assessment.
c) Liquidity risk
The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having
access to funding through an adequate amount of committed credit lines. The treasury department regularly
monitors the position of Cash and Cash Equivalents vis-a-vis projections. Assessment of maturity profiles of
financial assets and financial liabilities and maintenance of Balance Sheet liquidity ratios are considered while
reviewing the liquidity position.
The Company's investment policy and strategy are focused on preservation of capital and supporting the
Company's liquidity requirements. The senior Management of the Company oversees its investment strategy
and achieve its investment objectives. The Company typically invests in government of India debt bonds and
mutual funds. The policy requires investments generally to be investment grade, with the primary objective of
minimising the potential risk of principal loss.
The NHAI bonds bear a fixed rate of interest thus they are not affected by the change in bond yield rates and the
mutual funds are highly liquid assets which are paid out monthly and re-invested.
d) Excessive risk concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities
in the same geographical region, or have economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate
the relative sensitivity of the Company's performance to developments affecting a particular industry.
In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific
guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are
controlled and managed accordingly.
31 C. Capital Management
The Company objective to manage its capital in a manner to ensure and safeguard their ability to continue as a
going concern so that the Company can continue to provide maximum returns to shareholders and benefit to other
stakeholders. The Company has paid dividend as per the guidelines issued by Department of Investment and Public
Asset Management (DIPAM) as follows :-
32. Employee Benefits
Disclosures in compliance with Ind AS 19 "Employee Benefits" are as under:
(a) Defined Contribution Plans - General Description
(i) Pension
The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. April 01, 2009,
for all regular employees drawing pay in IDA scale irrespective of their length of service except for those employees
who joined before January 01, 2017 but would superannuate/resign after January 01, 2017, before completing 15 years of
service, in such case Employer contribution towards pension would be effective from January 01, 2017 only. The scheme
was managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities.
In FY 2023-24, the Board of Directors in its 286th meeting held on 11th May, 2023 has approved for shifting of IRCON
Defined Contribution Superannuation Pension Scheme, 2009 maintained with LIC to National Pension System (NPS).
Company's share of contribution to NPS during the FY 2025-26 amounts to ?9.43 crore (? 9.44 crore) .
(ii) Post Retirement Medical Benefit (PRMB)
The Company had established an irrevocable trust by initial one-time contribution of ? 12.00 crore during the year
2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as a voluntary
welfare measure for which the Company is not liable for providing such benefit to its employees. Further, the Company
provides medical benefits to its employees (and spouse) who superannuate from the Company. The Company has
contributed ?6.43 crore (? 5.02 crore) based on DPE guidelines on Superannuation Benefits.
(b) Defined Benefit Plans - General Description
(i) Provident fund
The Company pays fixed contribution of Provident Fund at a pre-determined rate to a separate trust ( IRCON
Contributory Provident Fund Trust), which invests the funds in permitted securities. The trust is required to pay
a minimum rate of interest on contribution to the members of the trust. The trust is approved by the Income Tax
Authorities. The Company has an obligation to make good the shortfall, if any, between the return from the investment
of the trust and the interest payment based on the notified interest rate.
During the period, the Company has contributed ?27.66 crore (?19.86 crore) to the trust towards employer's contribution
for provident fund which includes ?3.05 crore (6.58 crore.) towards reimbursement on account of loss on investment
and an Adhoc payment of ?11.43 crore against stressed assets of PF Trust.
(ii) Gratuity
The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the
employees of the Company as a social security measure on the termination of their employment due to superannuation,
retirement, resignation, physical incapacitation or death. The scheme is managed by a separate trust formed in the
year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of
India. As at March 31, 2026 a liability of ?0.74 crore (? 4.64 crore) has been provided in the books of accounts based on
the actuarial valuation.
Impact of Labour Codes: On 21st November 2025, the Government of India notified provisions of the Code on Wages
2019, the Industrial Relations Code 2020, the Code on Social Security 2020 and the Occupational Safety, Health and
Working Conditions Code 2020, which consolidates the existing 29 labour laws into a unified framework governing
employee benefits. The Company has assessed the incremental impact from the enactment of these New Labour
Codes which is not material and has been recognised in the financial results for the financial year 2025-26.The Company
continues to monitor the developments pertaining to Labour Codes and would provide appropriate accounting effect
on the basis of such developments in case needed.
During the year ended March 31, 2026, the Company has recognised gratuity liability for contract employees for the
first time based on management's assessment of the applicable legal and regulatory position. As at March 31, 2026 the
impact due to change of law is amounting to ?1.29 crore (NIL) based on the actuarial valuation.
(iii) Other Retirement Benefits - General Description
Other retirement benefits include settlement at home-town or to the place where he/she or his/her family intends to
settle in India including Baggage Allowance. The liability on this account is recognized on the basis of actuarial valuation.
The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined
benefit obligation as a result of reasonable changes in key assumptions shown above occurring at the end of the
reporting period.
Sensitivities due to mortality and withdrawals are insignificant and hence ignored.
Sensitivities as to rate of inflation, rate of increase of pensions in payments, rate of increase of pensions before
retirement and life expectancy are not applicable being a lump sum benefit on retirement.
ix) Expected contribution for next annual reporting period
The expected contribution to the defined benefit plan for next annual reporting period is ? 18.63 crore (? 16.98 crore).
Risk analysis
Company is exposed to a number of risks in the defined benefit plan. Most significant risks pertaining to defined
benefits plan, and management's estimation of the impact of these risks are as follows:
a) Interest risk
A decrease in the interest rate on plan assets will increase the plan liability.
b) Longevity risk/ Life expectancy
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality
of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan
participants will increase the plan liability.
c) Salary growth risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.
An increase in the salary of the plan participants will increase the plan liability.
(v) Post Employment Benefit Plans
Ircon Gratuity Trust
Ircon Employees Contributory PF Trust
Ircon Medical Trust
Ircon Defined Contribution Superannuation Pension Scheme, 2009 Trust
(vi) Government Related Entities:
The Company is a Central Public Sector Enterprise (CPSE) under the Ministry of Railways. The Company is
controlled by Government of India (GOI), by holding 65.17 % of equity shares in the name of President of India as
at 31st March, 2026. Pursuant to Para 25 and 26 of Ind AS 24, entities over which the same government has control
or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as
related parties. Transactions with these parties are carried out at market terms at arm length basis. The Company
has applied the exemption available for government related entities and have made limited disclosures in the
financial statements.
d) Terms and conditions of transactions with related parties
(i) Transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions.
(ii) Outstanding balances of related parties at the year-end are unsecured and settlement occurs through banking
transactions. These balances other than loans and interest bearing advances are interest free.
(iii) The loans to key management personnel are on the same terms and conditions as applicable to all other
employees.
34. Interest in Subsidiaries, Joint Ventures and Joint Operations
A. Disclosures in compliance with Ind AS 27 "Separate Financial Statements" are as under:
Investment in following subsidiary companies, joint venture companies and joint operations is accounted at cost.
35. Earnings Per Share
Disclosure as per Ind AS 33 ‘Earnings per share'
Basic EPS is calculated by dividing the profit for the year attributable to equity holders by the weighted average
number of equity shares outstanding during the year.
Diluted EPS is calculated by dividing the profit for the year attributable to the equity holders after considering the
effect of dilution by weighted average number of equity shares outstanding during the year plus the weighted average
number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity
shares.
36. Impairment of Assets
During the year, Company has carried out assessment on impairment of individual assets by working out the recoverable
amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, “Impairment of Assets"
notified under section 133 of the companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Nil
(Nil) has been provided for.
37. Provisions, Contingencies and Commitments
(i) Provisions
The nature of provisions provided and movement in provisions during the year as per Ind AS 37 ‘Provisions,
Contingent Liabilities and Contingent Assets' are disclosed in Note 19.
(ii) Contingent Liabilities
Disclosure of Contingent Liabilities as per Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets' are
as under:
(' in crore)
Foot Note:
1. The Income Tax Authority have raised demands on account of various disallowances pertaining to different
assessment years. Many of these matters were adjudicated in favour of Company but are disputed before higher
authorities by the concerned departments. The Company is contesting these demands, which are pending at
various appellate levels. Based on the advice from the independent tax experts and the developments on the
appeals, the management is confident that additional tax so demanded will not be sustained on completion of
the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has
been made in these financial statements.
2. There are various disputes pending with authorities of excise, customs, service tax, sales tax, VAT etc. The
Company is contesting these demands raised by concerned authorities and are pending at various appellate
authorities. Based on the grounds of appeal and advice of the independent legal experts, the management
believes that there is reasonable strong likelihood of succeeding before the various authorities. Pending the final
decisions on the above, no adjustment has been made in these financial statements. The above disputed indirect
tax demands includes ? 115.60 Crore which is reimbursable from clients.
3. In case of International Metro Civil Contractor, a Joint Operation of the Company, there is disputed demand
pending with the sales tax authorities amounting to ? 3.27 Crore (? 3.07 crore) on account of disallowance of
labour expenses. The joint operation had filed appeals before the appropriate appellate authorities against the
demand. The decision is pending before the appellate authorities and therefore, no provision has been made in
the financial statements.
4. The Company is a party to several legal suits on construction contract terms related disputes, pending before
various courts and arbitration proceedings in India and abroad. Some of the contractors have lodged claims
on the company seeking enhancement of the contract price, revision of work schedule with price escalation,
compensation for the extended period of work, idle charges etc. These claims are being contested by the
company as being not admissible in terms of provisions of the respected contracts. Against a total claim of
? 711.12 crore (? 592.33 crore), provision of ? 68.15 crore (? 64.30 crore) has been made and balance ? 642.97
crore (? 528.02 crore) is shown as contingent liability. The Company has also made counter claims on the
contractors admissible as per the terms of the contract of ? 118.89 crore (? 251.33 crore). Interest on claims is not
considered, being unascertainable.
There are certain other matters pending in litigations against the Company before various courts and appellate
authorities on account of claims by some contractors in cost plus projects. In such cases, the Company envisages
reimbursement from the Clients in full as per the terms of contract and expects no economic outflow of resources.
In this respect, a total claim of ? 1710.96 crore (? 1779.99 crore) is under litigation, for which provision of ? NIL
(? NIL) has been made and reimbursable by the client. The Company has also made counter claims on the
contractors of ? 75.12 crore (? 116.52 crore). Interest on claims is not considered, being unascertainable.
5. One of the contractor, M/s Sai Engineers has filed suit against International Metro Civil Contractor for an amount of
? 0.02 Crore (? 0.02 crore) for dispute on contract terms. The decision is pending before the appellate authorities
and therefore, no provision has been made in the financial statements.
6. There are some cases relating to employees/others are pending in the Courts against the Company in respect of
which the liability is not ascertainable.
7. (i) Company's Non Fund based limits earmarked for issuance of bank guarantee to subsidiary companies amounts
to ? 750 crore (? 750 crore). Out of the said limit, bank guarantees to the extent of ? 270.56 crore (?245.62 crore)
has been utilised as on 31.03.2026.Therefore, the balance limit for issuance of bank guarantee is ? 479.44 crore (?
504.38 crore).
(ii) The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for its
subsidiary companies for an amount of ? 3,841.63 crore ( ? 3,841.63 crore). The term loan availed (net of repayment)
by the subsidiary companies as on 31.03.2026 is ? 2856.93 crore (? 2258.15 crore).
(iii) Contingent Assets
Disclosure of Contingent Assets as per Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets' is as under:
(a) Claims raised by company on some of its clients and awarded by arbitrators in favour of company against which
clients have gone to court not accounted for as receivables are ? 453.33 crore (? 454.6 crore) including interest
calculated up to 31.03.2026 as per arbitration award.
(b) Counter Claims raised by company on sub-contractors and awarded by arbitrators in favour of company against
which sub-contractors have gone to court, not accounted for as receivables are ? 15.62 crore (? 15.36 crore).
(c) Insurance Claim of USD 0.99 Mn (USD 0.95 Mn) and Ethiopian Birr 1.48 Mn (Birr 1.34 Mn) equivalent to ? 9.28 crore
(? 8.16 crore) including interest calculated upto 31.03.2026 awarded by Honourable Supreme Court of Ethiopia in
favour of company has not been accounted for, pending execution order by High Court of Ethiopia.
4. The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility
for its subsidiary companies for an amount of ? 3841.63 crore (? 3841.63 crore). The subsidiary companies have
availed term loan of ? 3037.01 crore (? 2388.66 crore) till 31.03.2026. The subsidiary companies have repaid an
amount of ? 180.08 crore (? 130.51 crore) against these term loans and the term loan balance as on 31.03.2026 is
? 2856.93 crore (? 2258.15 crore).
5 (i) The Company along with SECL (Sponsors) have executed Promoters' Undertaking on behalf of its Joint
Venture, Chhattisgarh East West Railway Ltd.(CEWRL) in favour of Power Finance Corporation towards
refinance of existing term loan of ? 3976.00 crore which has been enhanced to ? 6680.70 crore, wherein
it has been stated that the Promoter shall infuse funds for meeting debt servicing requirement including
principal and interest, in case of shortfall in revenue shall be restricted to the extent of its shareholding in
CEWRL. IRCON's share as per the given amount of Rupee Term Loan is ? 1736.98 crore (26% of total loan of
? 6680.70 crore) as on 31st March 2026 (31st March, 2025: ? 1033.76 crore).
(ii) The Company along with CCL (Sponsors) have executed Sponsor's Support Agreement on behalf of its
Joint Venture, Jharkhand Central Railway Ltd. (JCRL), wherein it has been stated that in case of termination
of the Concession Agreement due to an event of default by the Borrower prior to the achievement of the
Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service obligations of the
Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the Project. IRCON's
share as per the given amount of Rupee Term Loan is ? 327.60 crore (26% of total loan of ? 1259.75 crore) as
on 31st March 2026 (31st March, 2025: ? 327.60 crore)
(iii) The Company along with SECL and CSIDCL (Sponsors) have executed Sponsor's Support Agreement on
behalf of its Joint Venture, Chhattisgarh East Railway Ltd.(CERL Ph-II), wherein it has been stated that in
case of termination of the Concession Agreement due to an event of default by the Borrower prior to the
achievement of the Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service
obligations of the Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the
Project. IRCON's share as per the given amount of Rupee Term Loan is ? 350.74 crore (26% of total loan of
?1,349.00 crore) as on 31st March 2026 (31st March, 2025: ? 350.74 crore).
6 There is an outstanding Letter of Credit as on 31st March, 2026 amounting to ? 109.16 crore (31st March, 2025
?135.86 crore ).
7 The Company in it's 273rd BoD held on 12.11.2021, approved the shareholder's agreement between IRCON and
Ayana Renewable Power Private Limited. As per para 5.2.1 of SSHA, capital to the tune of ' 370.80 Crore are to be
infused in IRPL in the form of hybrid securities. The company's share in these securities is ' 88.99 Crore, i.e., 24%
share of hybrid securities. As per the schedule 10 of the SSHA, the hybrid securities shall :-
(A) be optionally converted to equity shares of the company at anytime after the receipt of second tranche of
VGF, at the option of the holder or
(B) be redeemable at the end of 20 (twenty) years from the date of issuance, which may be extended (subject
to applicable laws) to such date on which any Senior Loan, which were outstanding at the end of the fixed
term, are repaid.
Further, the holders of hybrid securities shall have a right but not an obligation to convert any and/or all of the
hybrid securities held by it into equity shares, anytime after the receipt of 2nd tranche of VGF in one or more
tranches in accordance with the ratio determined in SSHA. In line with the SSHA, IRPL's Board of Directors have
approved the issue of hybrid securities in the form of optionally convertible debentures (OCD's). The salient
features of OCD's are as below:
i) the tenure of OCD's shall be 20 years
ii) the rate of interest shall be 14% p.a. and interest shall be payable only if IRPL has distributable profits, else
interest will get accumulated
iii) interest payable shall remain subordinate to interest and principal payment of senior loans
iv) the OCD will be unsecured
v) the holders of hybrid securities shall have a right but not an obligation to convert the hybrid securities into
equity shares, anytime after the receipt of second tranche of VGF.
IRCON has subscribed to ? 88.99 crore as on 31st March, 2026 (31st March, 2025 ? 66.00 crore) in above OCD's
upon Private Placement by IRPL and the outstanding commitment of IRCON as on 31.03.2026 is NIL.
8 The Company has executed Sponsor Support Undertaking in favour of the lenders for loan availed by its Subsidiary
Companies as under:-
(i) Ircon Shivpuri Guna Tollway Limited
(ii) Ircon Davanagere Haveri Highway Limited
(iii) Ircon Vadodara Kim Expressway Limited
(iv) Ircon Gurgaon Rewari Highway Limited
(v) Ircon Akloli-Shirsad Expressway Limited
(vi) Ircon Ludhiana Rupnagar Highway Limited
(vii) Ircon Bhoj Morbe Expressway Limited
(viii) Ircon Haridwar Bypass Limited
(ix) Ircon Renewable Power Limited
38. Segment Reporting
Disclosure as per Ind AS 108 " Operating Segment" is given as under:
A. General information
Operating segments are defined as components of an enterprise for which discrete financial information is available
which is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate
resources and assessing performance. The Board of Directors of the Company is the Chief Operating Decision
Maker (CODM). The operating segments have been reported in a manner consistent with the internal reporting
provided to the Chief Operating Decision Maker (CODM) for review of performance and allocating resources.
The Company has determined reportable operating segments from geographical perspective.
(i) Trade receivables are non-interest bearing and the customer profile include Ministry of Railways, Public Sector
Enterprises, State Owned Companies in India and abroad. The Company's average project execution cycle is
around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with
a credit period ranging from 45 to 60 days.
(ii) Contract Assets are recognised over the period in which services are performed to represent the Company's
right to consideration in exchange for goods or services transferred to the customer. It includes balances due
from customers under construction contracts that arise when the Company receives payments from customers as
per terms of the contracts however the revenue is recognised over the period under input method. Any amount
previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition
attached i.e. future service which is necessary to achieve the billing milestone.
During the year ended March 31st, 2026, ? 650.11 crore and March 31st 2025, ? 687.43 crore of contract assets as of
April 1st, 2025 and April 1st 2024 respectively has been reclassified to trade receivables upon billing to customers on
completion of milestones.
(iii) Contract liabilities relating to construction contracts are balances due to customers, these arise when a particular
milestone payment exceeds the revenue recognised to date under the input method and advance received in
long term construction contracts. The amount of Advance received gets adjusted over the construction period
as and when invoicing is made to the customer.
D. Cost to obtain the contract
Amount recognised as asset as at 31st March, 2026 is Nil (As at 31st March, 2025: Nil)
Amount of amortisation recognised in the statement of profit and loss during the year is Nil (FY 2024-25: Nil)
E. Cost to fulfil the contract
Amount recognised as asset as at 31st March, 2026 is ? 69.81 crore (As at 31st March, 2025: ? 87.53 crore)
Amount of amortisation recognised in the statement of profit and loss during the year is ? 1.79 crore (FY 2024-25:
? 2.04 crore)
F. Performance obligation
Information about the Company's performance obligations are summarised below:
The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as
at 31st March are, as follows:
40.Leases
a) Company as a Lessee
The Company as a lessee has entered into various lease contracts, which includes lease of land, office space,
guest house and vehicles.
The Company also has certain leases of offices and guest house with lease terms of 12 months or less. The
Company applies the ‘short-term lease' recognition exemptions for these leases.
b) Company as a Lessor
(i) The Company has given buildings under operating lease. Lease income (rental and service charges) aggregating
? 33.48 crore (? 28.08 crore) has been recognized in the Statement of Profit and Loss as per lease arrangements.
(ii) The Company has given Machinery under operating lease. Lease income aggregating ? 7.62 crore (? 3.67 crore)
has been recognized in the Statement of Profit and Loss as per lease arrangement.
44. Corporate Social Responsibility Expenses (CSR)
As per Section 135 of the Companies Act, 2013 read with guidelines issued by Department of Public Enterprises,
GOI, the Company is required to spend, in every financial year, at least two per cent of the average net profits of the
Company made during the three immediately preceding financial years in accordance with its CSR Policy. The details
of CSR expenses for the year are as under:
Comments:-
(i) Change was primarily on account of working capital demand loan availed during the current year.
(ii) Average trade receivables has increased in comparison to previous year.
(iii) Average trade payable has increased in comparison to previous year.
(b) The Company do not have any transactions with companies struck off in current year and previous year.
(c) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period in current year and previous year.
(d) The Company has not traded or invested in crypto currency or virtual currency during the current year and
previous year.
(e) The Company has not advanced or loaned or invested funds to any other person(s) or entity (is), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall in current year and
previous year:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries."
(f) The Company has not received any fund from any person(s) or entity(is), includingforeign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall in current
year and previous year:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries"
(g) The Company does not have any transaction which is not recorded in the books of accounts that has been
subsequently surrendered or disclosed as income during the year as part of the on going tax assessments
under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax
Act, 1961) in current year and previous year.
(h) The Company do not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property in current year and previous year.
(i) The Company has not been declared as wilful defaulter by any bank or financial institution or government
or any government authority in current year and previous year.
(j) The Company has complied with the number of layers prescribed under the Companies Act, 2013 in current
year and previous year.
46. Recent pronouncement
The Ministry of Corporate Affairs ("MCA") notifies new accounting standards or amendments to existing standards
under the Companies (Indian Accounting Standards) Rules from time to time.
Amendments effective from April 1, 2025
a. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates In May 2025, Ind AS 21 Amendments -
Currency Exchangeability Clarifies how to assess exchangeability and determine spot rates when currencies
can't be exchanged, with disclosure of impacts on performance, position, and cash flows.. The Company
has evaluated the impact of the said amendment and concluded that it does not have any impact on its
financial statements.
b. Ind AS 1 - Presentation of Financial Statements In August 2025, the MCA notified amendments relating to
the classification of liabilities as current or non-current, including guidance on non-current liabilities with
covenants. The amendments clarify that the right to defer settlement must exist as at the reporting date and
should be substantive. The Company has assessed the amendment and concluded that there is no impact
on the classification of its current and non-current liabilities.
c. Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures
The amendments introduce disclosure requirements for supplier finance arrangements, including details of
the nature of such arrangements, carrying amounts of related liabilities, and payment terms. Additionally,
such arrangements are considered in assessing concentration of liquidity risk. The Company has evaluated
these amendments and determined that they do not have any impact on its financial statements.
d. Ind AS 12 - Income Taxes - International Tax Reform: Pillar Two Model Rules The amendments introduce
a temporary mandatory exception from the recognition of deferred taxes arising from the implementation
of the Pillar Two Model Rules and require disclosure of its application. As the Company has not undertaken
transactions of this nature, these amendments have no impact on its financial statements.
47. Other Disclosures
a) (i) The company has been claiming deduction under section 80 IA from assessment years 2000-01 to
2019-20. The deduction under section 80 IA has been allowed by Income Tax Appellate Tribunal (ITAT).
However, Income Tax Department has filled appeal before High Court against order of ITAT for the
assessment year 2000-01. Further upto assessment year 2019-20 company was offering global income
for tax in India after excluding the income in accordance with DTAA agreements where income earned
from foreign countries are excluded from global income offered for taxation. The company was allowed
exclusion method upto assessment year 2005-06, thereafter credit against taxes paid in foreign countries
have been allowed from taxes computed on global income by department. After paying the due tax the
issue has been contested by filing appeals. This issue has been allowed in favour of the company by ITAT.
(ii) The provision for income tax with respect to earlier years has been written back / income tax expenses
has been reversed amounting to ? 0.54 crore (? 24.32 crore) on account of favourable orders received from
Income tax authorities.
b) In line with the Government of India's initiative to facilitate timely payments to Micro, Small and Medium
Enterprises (MSMEs), the Company enables eligible MSME vendors to avail invoice discounting facilities
through the Trade Receivables Discounting System (TReDS) platforms. The arrangement is intended solely
to facilitate early realisation of dues by MSME vendors and does not result in any additional financing or
credit support to the Company. Further, the amounts involved under such arrangements are not material in
relation to the Company's total trade payables.
c) Hon'ble High Court has permitted to release an arbitration award, amounting to ? 97.96 Crore against NHAI
for UP-05 ,Orai Highway Project against submission of bank guarantee of equivalent amount. The company
has provided liability of equivalent amount till final decision of the Court.
d) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. So
far as trade/other payables and loans and advances are concerned, the balance confirmation letters were
sent to the parties. Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are
subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried
out on on-going basis. However, management does not expect to have any material financial impact of such
pending confirmations / reconciliations.
e) In the opinion of the management, the value of assets, other than property, plant and equipment and non¬
current investments, on realisation in the ordinary course of business, will not be less than the value at which
these are stated in the Balance Sheet.
f) Certain reclassifications and recasting have been made to the comparative period's financial statements to
enhance comparability with the current year's financial statements. These reclassifications have no effect on
the reported results of operations.
g) Previous year figures are shown under bracket () to differentiate from current year figures.
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