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Directors Report of Titagarh Wagons Ltd.

Mar 31, 2016

($)ear Shareholders,

The Directors are pleased to present their Nineteenth Annual Report and Audited Accounts for the financial year ended the 31st March, 2016.

1. Profit, Retention & Dividend

Your Company''s financial performance during the year under review was follows :

(Rs. in Lacs)

Particulars

2015-16

2014-15

Turnover

30,974.70

37,613.73

Earnings Before Interest, Tax, Depreciation &Amortization (EBITDA)

606.28

3,391.88

Less : Depreciation and Amortization Expenses

1,000.38

909.57

Less : Finance Cost

534.88 1535.26

631.36 1540.93

Add : Interest Income

2,030.81

1,362.89

Less : Exceptional Items

-

1,710.15

Profit Before Tax

1,101.83

1,503.69

Less : Provision For Taxation

470.83

517.98

Profit After Taxation

631.00

985.71

Balance Brought Forward from Last Account

28,833.66

28,913.65

Amount available for Appropriation

29,464.66

29,899.36

Appropriations

Transfer to General Reserve

100.00

100.00

Dividend on Equity

1,043.79

802.36

Tax on Dividend

212.49 1,356.28

163.34 1,065.70

Net Surplus in Statement of Profit and Loss

28,108.38

28,833.66

2. Company''s Performance

During the FY 2015-16 your Company''s performance was affected adversely mainly due to lack of orders for procurement of Wagons from Indian Railways (IR), the largest customer whereas the counter offer from IR had to be declined since the substantially lower prices owing to predatory pricing resorted to by some of the manufacturers aimed at garnering larger allocation in the tender rendered it un remunerative. Following it the EBIDTA and PBT saw a decline of about 82.1% and 26.7% when compared to the corresponding numbers in the previous financial year.

Your Company has been awarded order for substantially reduced quantity of 854 Wagons in April, 2016 valued at Rs.119 Crore only. However, it is encouraging to note that the Board''s strategy of relentless pursuing to derrick the business from dependence on Wagons space has started yielding positive results as is evident from the incremental contribution to Revenue and EBIDTA in the past couple of years from Rail Coaches and Defense products.

With the recent acquisition of business and assets of a company in Italy through a subsidiary-Titagarh Firema Adler SpA (TFA),your Company is notably the first Indian entity to have access to the technology for Metro Coaches and the Group and as such being eligible, has participated in a tender for this segment in India. TFA has secured some large size orders for Train sets in Italy and is set to play increasingly important role in the Group''s performance. The overseas market for special wagons has received a boost with your Company''s access to the technology for custom designed freight cars through Titograd Wagons AFR (TWA), the subsidiary in France.

In order to be better equipped for enhancing the Group''s presence in overseas markets, your Company''s wholly owned subsidiary in Singapore has set up a Branch in Dubai, U.A.E. and subject to the applicable compliances, greater focus of the executive management of your Company is envisaged in this respect for more efficient management inputs and coordination with the overseas subsidiaries.

Besides consistently consolidating the prominent position of your Company in Rail Coaches (EMU/MEMUs), Wagons, Bailey Bridges, and Special Projects for the country''s defense sector, with the issue of Industrial License by the Government of India (GOI) to your Company, the endeavors are afoot to participate in the tenders of the Defense Manufacturing sector in India.

Pursuant to sanction of the Scheme of Amalgamation of its four wholly owned subsidiaries with the Company having become effective in July, 2016, "Shipbuilding" vertical has been added to the business of your Company. The Board is pleased to inform you that being the lowest bidder in a tender for construction and supply of two vessels to an Institution under the Ministry of Earth Sciences, Government of India, your Company is anticipating the prestigious order.

A joint venture agreement has been signed with Meatier SAS, France (Matera) for manufacture of metallic and modular bridges with a joint venture company being incorporated in India with equal stake in its equity of Maître and the Company. This would facilitate diversification in the related area of your Company''s core competencies and complement the Company’s existing business of Bailey Bridges.

Overall the Board is reasonably confident of significantly improved performance during the current financial year.

3. Dividend

The Board of Directors at its meeting held on 17th March, 2016 declared interim dividend of Forty percent i.e. Re. 0.80 per share on 11,53,84,370 equity shares of Rs. 2/- each fully paid up for the Financial Year under review to the shareholders whose names appeared on the Register of Members on March 29,2016 and the Board recommends to the shareholders to confirm the same as a final dividend at the ensuing Annual General Meeting.

4. Business Segments

Wagons

Production and Sale of Wagons during the year at 1166 and 1135 units were up about 51.4% & 32.9% respectively in the year under review when compared to corresponding numbers in FY 2014-15while the average realization per unit witnessed a decline of30.8%.

The announcements in the annual Indian Railways ("IR") budget notwithstanding the expenditure there under appears to flow into infrastructure the benefits of which would take time to show up in the Wagons segment of the industry. Hence the opportunities presented by distinctively cost effective movement of cargo by railway network as compared to roads, appear to be subdued and successively declining largely due to erratic schedule and lower quantity of procurement by the IR compounded by unhealthy competition following predatory pricing by some of the private sector manufacturers rendering orders by the IR becoming un-remunerative. However, the completion of work on Dedicated Freight Corridors by the Indian Railways would spur demand from I Rand private sector buyers for Wagons and therefore, the outlook for business from this segment is cautiously optimistic.

Coaches

Five rakes of MEMU from out of the order for twelve rakes received in the previous year from Indian Railways were dispatched during the FY 2015-16 and the segment has contributed significantly to EBIDTA and Profit. Production of the remaining rakes has been progressing as per schedule.

Metro Railways/Mass Rapid Transport System ("MRTS") in major cities across the country is essential to cater to the transportation needs of urban/semi urban commuters and the potential for self-propelled railway passenger vehicles such as EMUs, Main Line Electrical Multiple Units (MEMUs) and Diesel Multiple Units (DMUs) and metro coaches is significantly large.

Various initiatives being taken by the Government for building "smart cities" in the country would further generate the demand for Coaches which augurs well for this vertical. Heavy Engineering Division (HED) of the Company is equipped to turn out a fairly large number of Coaches per month and geared to fulfill the requirement of the customers.

Others

The segment consists of other products viz. Bailey Bridges and Heavy Earth Moving Machinery, Defense Products etc. which represented less than ten percent of the total revenue on individual basis during the financial year ended March 31,2016.

5. Internal Financial Controls

Appropriate policies and procedures have been adopted by the Board to ensure effective financial controls, risk assessment and mitigation measures, accuracy and completeness of the accounting records, the prevention and detection of frauds and errors and orderly and efficient conduct of the Company''s business.

The internal financial controls (IFC) have been documented and adequacy of IFC has been evaluated by an external firm of experts and certified by the Statutory Auditors. Based on the aforesaid, the Board has concluded that during the year IFC were operating effectively.

6. Risk and Concerns/Mitigation Measures

The Company has laid down a risk management mechanism which is reviewed periodically. A Risk Management Policy to identify and assess the key risk areas, monitor mitigation measures and report compliance has been adopted. Based on a review, major elements of risks have been identified and are being monitored for effective and timely mitigation.

Dependence on the Indian Railways

The Company''s wagon manufacturing business is dependent upon the policies of Indian Railways and any change whether positive or adverse, has a direct impact on the Company''s business and therefore, development of other verticals viz. Special Projects for Defense, Shipbuilding, with emphasis on securing orders for custom designed Wagons for exports and also private sector in India, expected entry into metro coaches, expansion through inorganic route etc. through suitably designed policies help mitigate the risk.

Performance guarantee, product warranty and liquidated damages

Some of the contracts for supply involve warranty periods varying from 12-24 months against manufacturing defects notwithstanding the warranties on certain components extended by the respective third party suppliers; enforcement thereof may not be always feasible. Further, certain contracts carry performance guarantee clause up to 10% of the contract value, valid for the duration of the warranty period, which can be invoked in the event of there being manufacturing defects. Liquidated damages of 10% in the event of delay in supply is a standard clause in most of the contracts. Consistent monitoring is carried out with due emphasis on better manufacturing practices to address these risks.

Growth through organic and inorganic routes

Expansion of the operations and diversification measures undertaken by the Company involve inter alia, financial, managerial and other risks to precious resources in execution and loss of services of senior management personnel affect the Company''s plans to grow. Measures including careful integration of the new businesses in alignment with the Group policies and succession planning have been kept at the core of approach in the Risk management framework adopted by the Company.

7. Subsidiary Companies

A report containing the details required under Section 134 read with Rule 8(1) of Chapter IX Rules of the Companies Act, 2013 (''the Act'') in respect of performance and financial position for the financial year ended March 31,2016, of wholly owned subsidiaries: Cimco Equity Holdings Private Limited (including its subsidiary Cimmco Limited), Titagarh Marine Limited (including its subsidiariesviz. Corporate Shipyard Private Limited and Times Marine Enterprises Private Limited) (since amalgamated),Titagarh Capital Private Limited, Titagarh Wagons AFR, France and Titagarh Singapore Pte. Ltd., Singapore; and subsidiaries: Titagarh Agrico Private Limited and Titagarh Firema Adler SpA included in the Consolidated Financial Report (CFS) in the Form AOC-1 is annexed to this Report and marked as Annexure DR-1.TheCFS is attached to the Annual Report and Accounts.

Pursuant to the order dated May 17, 2016 of the Hon''ble High Court of Calcutta becoming effective on and from July 13, 2016, the following wholly owned subsidiaries: Cimco Equity Holdings Private Limited, Titagarh Marine Limited, Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited have been amalgamated with your Company.

The Board of Titagarh Agrico Private Limited, with a view to inter alia deriving the benefits of synergy in operations and more efficient utilization of combined resources, has in principle approved the company''s amalgamation into another subsidiary of your Company subject to applicable compliances in this respect.

8. Extract of Annual Return

The details forming part of the extract of the annual return in the Form MGT-9 are annexed and marked as Annexure DR-2.

9. Number of Board Meetings

The Board of Directors met Nine (9) times during the financial year 2015-16 as per the details provided in the Corporate Governance Report forming part of Annual Report.

10. Loans, Guarantee and Investments

Particulars of loans, guarantees and investments made by the Company pursuant to the Section 186 of the Act are furnished under notes to financial statements.

11. Significant and Material orders

There were no material/significant orders passed by any regulator, tribunal impacting the going concern status and the Company''s operations in future.

12. Composition of Audit Committee

The Audit Committee constituted by the Board has Shri D N Davar as Chairman and Shri Sunirmal Talukdar, Shri Manoj Mohanka and Shri S C Das as the members and the details are provided in the Corporate Governance Report. Shri S. C. Das has been inducted in the committee w.e.f. 20th May, 2016.

13. Related Party Transactions

All Related Party Transactions (RPTs) are entered pursuant to compliance with the applicable laws and also in accordance with the policy adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the SEBI (LODR) Regulations, 2015 and based thereon final approval of the Board is obtained. RPTs as approved by the Board during the financial year ended March 31, 2016 are disclosed in the Form AOC 2 annexed hereto and marked as Annexure DR-3.

14. Corporate Governance Report

The Company has complied with the corporate governance requirements under the Act and SEBI (LODR) Regulations, 2015. A separate section on Corporate Governance under Listing Regulations along with a certificate from a Company Secretary in Practice confirming compliance, is annexed to and forms part of the Annual Report.

15. Internal Controls System

The Company has system of internal controls and necessary checks and balances so as to ensure

a. That its assets are safe guarded

b. that transactions are authorized, recorded and reported properly; and

c. that the accounting records are properly maintained and its financial statements are reliable.

The Company has appointed external firm of Chartered Accountants to conduct internal audit whose periodic reports are reviewed by the Audit Committee and management for bringing about desired improvement wherever necessary.

16. Vigil Mechanism

A fraud and corruption free environments part of work culture of the Company is the objective and with that in view Vigil Mechanism Policy has been adopted by the Board which is uploaded on the web site of the Company at www.titagarh.biz. No complaint of this nature has been received by the Audit Committee during the year under review.

17. Internal Complaints Committee

As per the requirement of Section 4 of the Sexual Harassment of Women At Workplace (Prevention, Prohibition and Redressal) Act, 2013 an Internal Complaints Committee has been formed by the Company, the details of which are given in the Corporate Governance Report. No complaint was lodged with the Committee during the financial year 2015-16.

One complaint received in May, 2016 is in the process of being disposed of.

18. Directors

Retirement by Rotation

Shri Umesh Chowdhary, Vice Chairman & Managing Director retires by rotation pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

The information prescribed by Regulation 36 of SEBI (LODR) Regulations, 2015 in respect of the above named Director is given in the Notice of Nineteenth Annual General Meeting.

Pursuant to the decision of Nomination & Remuneration Committee and the Board, Shri Sudipta Mukherjee, Director (Wagons Operations) has been re-designated Whole time Director and his revised remuneration would be placed for your approval pursuant to the provisions of Section 197 of the Companies Act, 2013, read with Schedule Vto the Act.

19. Evaluation of the Board''s performance, Committee and Individual Directors

In compliance with the Act and SEBI (LODR) Regulations, 2015, the performance evaluation of the Board, Committees and Individual Directors was carried out during the FY 2015-16 as per the details set out in Corporate Governance Report.

20. Declaration by Independent Directors

Declarations pursuant to the Sections 164 and 149(6) of the Act and SEBI (LODR) Regulations, 2015 and affirmation of compliance with the Code of Conduct as well as the Code for Regulation of Insider Trading adopted by the Board, byall the Independent Directors of the Company have been made.

21. Remuneration Policy and remuneration

A policy approved by the Nomination and Remuneration Committee and the Board is followed by the Company on remuneration of Directors and Senior Management Employees, as per the details set out in the Corporate Governance Report.

22. Directors'' Responsibility Statement

The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31,2016 have been followed in preparation of the said accounts and there were no material departures there from requiring any explanation;

- The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss statement of the Company for that period;

- Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Annual Accounts have been prepared on a going concern basis; and

- The Directors have laid down internal financial controls (IFC) to be followed by the Company and that such IFC are adequate and operating effectively.

23. Statutory Auditors

Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the Company were appointed at the17th AGM until the conclusion of Twentieth AGM subject to ratification of their appointment at the AGM every year and the Board recommends the same.

As regards the qualified opinion expressed by the Statutory Auditors in their Report on Standalone Financial Statements, the Note 10(e) and emphasis of matter- Note 40 in the relevant notes to the Financial Statements (the Notes) are self-explanatory requiring no further specific response from the Directors at this stage.

24. Consolidated Financial Statements

In accordance with Accounting Standards 21,23 and 27 issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of financial statements received from subsidiary companies as approved by their respective Boards, form part of this Report & Accounts. As regards the qualified opinion expressed by Statutory Auditors in their Report, the Note No. 15(2)(a)(i) and w.r.t. emphasis of matter Notes No. 33(vi)(a), 35 & 42 in the Notes to Accounts are self-explanatory, requiring no specific response from the Directors at this stage, however the recoverable amount aggregating Rs. 2796.26 lacs is subject to ongoing legal proceedings which are being closely monitored and expedited to the extent within the Company''s control. The Statutory Auditor''s attention to the capitalization of certain expenses by a subsidiary company pertains to difference in interpretation of the relative Accounting Standard and the cost incurred till the time of receipt of the requisite approval to the product developed by the said subsidiary having been considered as pre-operative expenses.

25. Cost Auditors

Messrs M R Vyas & Associates., Cost Accountants have been appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2016-17subject to ratification of their remuneration by the shareholders in accordance with the provisions of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014.The Cost Audit Report for the financial year ended31st March, 2016 has been filed as stipulated by the applicable provisions of law.

26. Secretarial Auditor

Secretarial Audit has been conducted by Messrs Vanita Sawant & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4.

27. Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31,2016.

28. Personnel

Human Resources

A. Empowering the employees

The Company''s organizational structure has been evolving over time, the efforts being to follow good HR practices. Adequate training/retraining of the staff and management personnel is a core direction in this area.

B. Industrial Relations

Industrial relations at all sites of the Company remained cordial.

C. No. of Employees

Manpower employed as at March 31,2016was 523.

The Directors express appreciation of the efficient services rendered by the employees at all levels.

29. Particulars of Remuneration of Directors/KMP/Employees

The disclosure stipulated by Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable.

Disclosure pertaining to Remuneration and other details as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure DR-5.

30. Employee Stock Options Scheme

Pursuant to approval of the shareholders, Nomination and Remuneration Committee at its meeting held on March 4,2015 in accordance with the TWL Employees Stock Options Scheme, 2014 (ESOS) granted to the eligible employees 5,00,000 options to be converted into equivalent number of equity shares of Rs.2 each fully paid as per the ESOS.

Options aggregating 27,500 Equity shares of Rs.2/- each fully paid up upon exercise by the eligible employees in conformity with ESOS have been allotted on August 22, 2016.

31. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to Section 134 (3) (m)of the Act read with Rule8of the Companies (Accounts) Rules, 2014on conservation ofenergy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-6.

32. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2016 pursuant to the provisions of Section 135 of the Act and rules made there under is annexed to this Board''s Report and marked as Annexure DR-7.

Apart from the above, your Company makes, inter alia, donations to the charitable institutions directly and through philanthropic organizations engaged in providing medical, education and other reliefs to the poorer sections of the society. Industrial Training Institute (the "ITI") set up on your Company''s land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) is yet another area. The ITI with access to the requisite infrastructure provided by the Company imparts hands-on training to the local people. More than 500 students in various batches have passed and significant number of them are engaged in various jobs in the industry. The ITI has been recognized by the State Government as one of the best in the country and it caters to the requirement of skilled workmen by industrial units.

33. Listing

The Company’s Equity Shares are listed at the BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE).The listing fees for the financial year ending on March 31,2017have been duly paid.

34. Discussion on Financial Performance with respect to Operational Performance

To mitigate the risk factors referred to hereinbefore that impact the operations, better manufacturing processes, improvement in productivity and focus on optimization of resource deployment are some of the measures taken to achieve reasonable performance.

35. Forward Looking Statement

The statements in this report describing the Company’s policy, strategy, projections, estimation and expectations may appear forward looking statements within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events and the actual results could materially differ from those expressly mentioned in this Report or implied for various factors including those mentioned in the paragraph "Risks and Concerns" herein above and subsequent developments, information or events.

36. Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board

Kolkata JP Chowdhary

August 22, 2016 Executive Chairman


Mar 31, 2015

Dear Members,

The Directors are pleased to present their Eighteenth Annual Report and Audited Accounts for the year ended the31st March, 2015.

1. Profit, Retention & Dividend

Your Company's financial performance was as follows :

(Rs. in Lacs)

Particulars 2014-15 2013-14

Turnover 37613.73 26123.92

Profit Before Interest, Depreciation, Tax&Amortisation (EBIDTA) 3391.88 654.12

Less: Depreciation 909.57 695.71

: Interest/Finance Cost 631.36 1540.93 597.59 1293.30

:Exceptional Items 1710.15 -

Add:InterestIncome 1362.89 1236.19

Profit Before Tax 1503.69 597.01

Less:ProvisionFor Taxation 517.98 221.07

Profit After Taxation 985.71 375.94

Balance Brought Forward from 28913.65 29514.43 Last Account

Amount available for Appropriation 29899.36 29890.37

Appropriations

Transfer to General Reserve 100.00 38.00

Dividend on Equity 802.36 802.36

Tax on Dividend 163.34 1065.70 136.36 976.72

Net Surplus in Statement 28833.66 28913.65 of Profit and Loss

2. Company's Performance

The Company's financial performance during the year under review improved substantially as compared to the previous financial year ended March 31, 2014 with noteworthy increase in EBIDTA and Profit Before Tax despite the loss amounting to Rs.1710.15 lacs incurred due to 'onerous contract'for Wagons procurement by the Indian Railways, the Company's largest customer, as reflected in the Exceptional Items in conformity with the applicable accounting standards. Profit After Tax went up by 162.1% and Earning Per Share (EPS) at Rs.4.91 per share increased by 162.5% over the corresponding numbers in the previous fiscal. Turnover improved by 43.9% with EMU (Rail Coaches) contributing majorly to the topline as well as bottomline and in fact the key performance indicators would have been significantly better had the order from Indian Railways been not so non-remunerative.

Your Company's leadership in Rail Coaches, Defence Wagons, Bailey Bridges, Special Projects for the country's defence sector is manifested in the repeat orders for these special projects/products having been awarded to the Company. The contract by Metro Railway, Kolkata for refurbishment of Metro Coaches is under execution and should enable your Company's foray into manufacture of metro coaches in future. Having successfully exported wagons to neighbouring countries, the Company has finalised fresh orders to manufacture freight cars for other overseas markets. Further, the demand for custom designed wagons in the domestic market is firming up.

Recent entry into building of ships, trawlers and vessels including barges for the Indian Navy presents significant opportunities.

Your Directors are pleased to inform you that the Government of India has issued an Industrial License to your Company dated 1st July, 2015 for manufacture of various products for defence sector of the country and the necessary steps are being taken in this regard.

Your Company has, in July, 2015 successfully concluded acquisition of business and assets of a company in Italy engaged in the manufacture of inter alia Electric Trains, Coaches,Shunting Locomotives for which the Board approved investment of upto Euro 25 million. Your Company has set up a special purpose vehicle, Titagarh Firema Adler SpA in Italy for the said acquisition which makes Titagarh Wagons Limited the first Indian company to own the technology required for manufacture of metro coaches in India presenting huge opportunity in the segment.

Overall the outlook appears to be enouraging for improved performance during the current financial year.

Pursuant to the approval of shareholders, 15089025 equity shares ofRs.2/- each were allotted to Qualified Institutional Buyers on July 15, 2015 at a price of Rs.99/41 per share i.e. at a premium of Rs. 97/41 per share (Issue Size: Rs.150 crores), which have been duly listed at the BSE and NSE. As a result of the said Qualified Institutional Placement (QIP), your Company's paid up capital has increased to Rs. 23,07,68,740/- consisting of 11,53,84,370 equity shares of Rs.2/- each full paid as on July 15,2015 thereby diluting the promoters' total stake by 6.94%. The QIP has inter alia paved the way for availability of larger floating stock at the bourses. The object of the amount raised by QIP is to augment infrastructural capabilities for expansion, pursue growth and combat competition both locally and globally.

3. Dividend

The Board of Directors has recommended a dividend of Forty percent i.e. Re. 0.80 per share on 11,53,84,370 equity shares of Rs. 2/- each fully paid upfor the Financial Year under review subject to approval of the members at the ensuing Annual General Meeting.,

4. Business Segments

Wagons

Average realization per unit declined by 11.2% even as production and sales volume at 770 and 854 units of Wagons increased by 12.2% and 14.9% respectively during the year under review and operating profit (PBIT) at Rs. 1693.89 lacs from the Wagons business was down 26.6% when compared to the corresponding numbers in the previous fiscal.

Despite various announcements in the annual Indian Railways ("IR") budgets of higher planned outlay, enhanced load carrying and obvious opportunities presented by distinctively cost effective movement of cargo by railway network as compared to roads, Wagons industry has been witnessing successive decline in the recent past mainly due to erratic schedule and low quantity of procurement by the IRcompounded by unhealthy competition by way of predatory pricing by some of the private sector manufacturers rendering orders by the IR becoming non-remunerative. However,with the demand from private sector buyers for Wagons expected to improve, the outlook from this business is cautiously optimistic.

Coaches

Eleven rakes of EMU (Coaches) were manufactured and despatched generating net sale of about Rs.12758 lacs and PBIT of Rs. 4140.50 lacs respectively which represents 33.9% of the total net sales and is more than the total EBIDTA of the Company during the year ended March 31,2015.

Metro Railways/Mass Rapid Transport System ("MRTS") in major cities across the country is essential to cater to the transportation needs of urban/semi urban commuters and the potential for self-propelled railway passenger vehicles such as EMUs, Main Line Electrical Multiple Units (MEMUs) and Diesel Multiple Units (DMUs) and metro coaches is huge.

The order for 12 rakes of MEMUs is under execution and benefits from it would flow during the current year. Heavy Engineering Division (HED) of the Company is equipped to turn out a fairly large number of Coaches per month and geared to promptly fulfill the requirement of Indian Railways. Various initiatives being taken by the Government for building "smart cities" in the country would further spur the demand for coaches which augurs well for this vertical.

Others

The segment consists of other products viz. Heavy Earth Moving Machinery, Bailey Bridges etc. which represented less than ten percent of the total revenue on individual basis during the financial year ended March 31, 2015. Steel Castings business continues to contribute to captive consumption of vital components in manufacture of Wagons by the Company.

5. Risks and Concerns

The Company has laid down a risk management mechanism which is reviewed periodically. A Risk Management Policy to identify and assess the key risk areas, monitor mitigation measures and report compliance has been adopted. Based on the review, the following key risks have been identified :

Dependence on the Indian Railways

The Company's wagon manufacturing business is dependent upon the policies of Indian Railways and any change whether positive or adverse, has a direct impact on the Company's business and therefore, development of other verticals viz. special projects for defence, emphasis on securing orders for custom designed wagons for private sector in India and abroad, preparation for entry into metro coaches, expansion through inorganic route etc. through suitably aggressive policies has been undertaken by the Board to mitigate the risk.

Performance guarantee, product warranty and liquidated damages

Some of the contracts for supply involve warranty periods varying from 12-24 months against manufacturing defects notwithstanding the warranties on certain components extended by the respective third party suppliers; enforcement of these may not be always feasible. Further, certain contracts carry performance guarantee clause up to 10% of the contract value, valid for the duration of the warranty period, which can be invoked in the event of there being manufacturing defects that are not rectified by the Company to the customers'satisfaction resulting in loss of reputation.

Growth through organic and inorganic routes

Expansion of the operations and diversification measures undertaken by the Company inter alia, involve financial, managerial and other risks to precious resources in execution and loss of services of senior management personnel can affect the Company's plans to grow. Measures including succession planning have been kept at the core of approach to the Risk management framework adopted by the Board.

6. Subsidiary Companies

A report containing the details required under Section 134 read with Rule 8(1) of Chapter IX Rules of the Companies Act, 2013 ('the Act') in respect of performance and financial position for the financial year ended March 31, 2015, of wholly owned subsidiaries: Cimco Equity Holdings Private Limited (including its subsidiary Cimmco Limited), Titagarh Capital Private Limited, Titagarh Marine Limited (including its subsidiaries viz.Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited), Titagarh Wagons AFR, France and Titagarh Singapore Pte. Ltd., Singapore; and subsidiaries: Titagarh Agrico Private Limited included in the Consolidated Financial Report (CFS) in the Form AOC-1 is annexed to this Report and marked as Annexure DR-1. The CFS is attached to the Annual Report and Accounts.

The Board has at its meeting held on August 12, 2015 accorded in principle approval to the amalgamation of the following wholly owned subsidiaries; Cimco Equity Holdings Private Limited,Titagarh Capital Private Limited, Titagarh Marine Limited, Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited with it self subject to compliance with applicable provisions of law.

7. Extract of Annual Return

The details forming part of the extract of the annual return in the Form MGT-9 are annexed and marked as Annexure DR-2.

8. Number of Board Meetings

The Board of Directors met Ten (10) times during the financial year 2015 as per the details provided in the Corporate Governance Report forming part of Annual Report.

9. Changes in Share Capital

Authorised Capital consisting of 9,60,00,000 equity shares of Rs.10 each was sub-divided into 48,00,00,000 equity shares of Rs.2 each and Issued, Subscribed and Paid up equity capital of the Company consisting of2,00,59,069 equity shares as at March 31, 2015 was split into 10,02,95,345 equity shares of Rs.2 each fully paid up on and from April 23, 2015 and increased to 11,53,84,370 equity shares consequent upon allotment of shares under QIP on July 15, 2015.

10. Loans, Guarantees and Investments

Particulars of loans, guarantees and investments made by the Company pursuant to the Section 186 of the Act are furnished under notes to financial statements.

11. Significant and material orders

There were no material/significant orders passed by any regulator, tribunal impacting the going concern status and the Company's operations in future.

12. Composition of Audit Committee

The Board has constituted the Audit Committee comprising Shri D N Davar as Chairman and Shri Sunirmal Talukdar and Shri Manoj Mohanka as the members and the details are provided in the Corporate Governance Report.

13. Related Party Transactions

All related party transactions (RPTs) are entered in compliance with the applicable laws and also in accordance with the policy on the subject adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the Listing Agreement and based thereon final approval of the Board is obtained. RPTs as approved by the Board during the financial year 2015 are disclosed in the Form AOC 2 annexed hereto and marked as Annexue DR-3.

14. Corporate Governance Report

The Company has complied with the corporate governance requirements under the Act and Listing Agreement. A separate section on corporate governance under Listing Agreement along with a certificate from a company secretary in practice confirming the compliance, is annexed to and forms part of the Annual Report.

15. Internal Control System

The Company has system of internal controls and necessary checks and balances which are being strengthened so as to ensure

a. that its assets are safeguarded

b. that transactions are authorised, recorded and reported properly; and

c. that the accounting records are properly maintained and its financial statements are reliable.

The Company has appointed external firm of Chartered Accountants to conduct internal audit whose periodic reports are reviewed by the Audit Committee and management for bringing about desired improvement wherever necessary.

16. VigilMechanism

A fraud free and corruption free environment as part of work culture of the Company cannot be over emphasized and with that objective a Vigil Mechanism policy has been adopted by the Board and is uploaded on the web site of the Company at www.titagarh.biz. No complaint of this nature was received by the Audit Committee during the year under review.

17. Internal Complaints Committee

As per the requirement of Section 4 of The Sexual Harassment of Women At Workplace (Prevention, Prohibition and Redressal) Act, 2013 an Internal Complaints Committee has been formed by the Company, the details of which are given in the Corporate Governance Report. No complaint was been lodged with the Committee during the financial year 2014-15.

18. Directors

Cessation

Shri N K Mittal, Non-Executive Director resigned from the Board w.e.f. 12th April, 2014 and Shri Nandan Bhattacharya, Shri Abhas Sen and Shri Aloke Mookherjea, Independent Directors ceased to be Directors of the Company w.e.f. 29th May, 2014.

Retirement by rotation

Shri J P Chowdhary, Executive Chairman retires by rotation pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

Appointment

Shri Umesh Chowdhary's term as Vice Chairman & Managing Director (VCMD) ends on September 30, 2015. The Board at its meeting held on May 22, 2015 has subject to approval of the shareholders reappointed him for five years w.e.f. October 01, 2015 at the remuneration approved by the Remuneration Committee and detailed in the Notice of ensuing Eighteenth Annual General Meeting.

Shri Shekhar Datta (DIN: 00045591), Independent Director and Shri Sudipta Mukherjee (DIN: 06871871), Director (Wagons Operations) were appointed as Additional Directors of the Companyw.e.f. 12th April, 2014 and 15th May, 2014 respectively. Smt. Rashmi Chowdhary (DIN: 06949401), Non-Executive Director was appointed w.e.f. 14th August, 2014 in conformity with the regulations applicable to a listed company regarding appointment of woman director.

The information prescribed by Clause 49 of the Listing Agreement in respect of the above named Directors is given in the Notice of Eighteenth Annual General Meeting.

19. Evaluation of the Board's performance, Committee and Individual Directors

In compliance with the Act and Clause49 of the Listing Agreement, the performance evaluation of the Board, Committees and Individual Directors was carried out during the year under review as per the details in Corporate Governance Report.

20. Declaration by Independent Directors

Declarations pursuant to the Sections 164 and 149(6) of the Act and Listing Agreement and affirmation of compliance with the Code of Conduct as well as the Code for Regulation of Insider Trading adopted by the Board, by all the Independent Directors of the Company have been made.

21. Remuneration Policy and remuneration

A policy approved by the Nomination and Remuneration Committee and the Board is followed by the Company on remuneration of Directors and Senior Management Employees, as per the details provided in the Corporate Governance Report.

22. Directors' Responsibility Statement

The Directors state that:

* Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31, 2015 have been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

* The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss statement of the Company for that period;

* Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

* The Annual Accounts have been prepared on a going concern basis; and

* The Directors have laid down internal financial controls (IFC) to be followed by the Company and that such IFC are adequate and operating effectively.

23. Statutory Auditors

Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the Company were appointed at the 17th AGM until the conclusion of Twentieth AGM subject to ratification of their appointment at the AGM every year and the Board recommends the same.

24. Consolidated Financial Statements

In accordance with Accounting Standards 21,23 and 27 issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of financial statements received from subsidiary companies as approved by their respective Boards, form part of this Report & Accounts. As regards the qualified opinion expressed by Statutory Auditors in their Report, while the Notes No. 15(a), 13(a) and 11 in the Notes on Accounts are self-explanatory, requiring no further specific response from the Directors at this stage, the subsidiary concerned has from out of three entities recovered from one of them the amount receivable during the year and the remaining recoverable amount aggregating Rs.2796.26 lacs is subject to ongoing legal proceedings which are being closely monitored and expedited to the extent within the Company's control.

25. Cost Auditors

Messrs D. Radhakrishnan & Co., Cost Accountants have been re-appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2015-16 subject to ratification of their remuneration by the shareholders in accordance with the provisions of Section 148ofthe Act and the Companies (Cost Records and Audit) Rules, 2014. The Cost Audit Report for the financial year ended 31st March, 2014 has been filed as stipulated by the applicable provisions of law.

26. Secretarial Auditor

Secretarial Audit has been conducted by Messrs Vanita Sawant & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4.

27. Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31,2015.

28. Personnel

Human Resources

A. Empowering the employees

The Company considers its organizational structure to be evolving consistently over time while continuing with its efforts to follow good HR practices. Adequate efforts of the staffand management personnel are directed on imparting continuous training to improve the management practices.

B. Industrial Relations

Industrial relations at all sites of the Company remained cordial.

C. No. of Employees

Manpower employed as at March 31, 2015 was 628.

The Directors express appreciation of the efficient services rendered by the employees at all levels.

29. Particulars of Remuneration of Directors/KMP/Emplyoees

The disclosure stipulated by Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable.

Disclosure pertaining to Remuneration and other details as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure DR-5.

30. Employee Stock Options Scheme

Pursuant to approval of the shareholders, Nomination and Remuneration Committee at its meeting held on March 4, 2015 in accordance with the TWL Employees Stock Options Scheme, 2014 (ESOS) extended 5,00,000 (Post Stock Split: 25,00,000) options to be converted into equivalent number of equity shares of Rs.2 each fully paid as per the ESOS.

31. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to Section 134 (3) (M)ofthe Act read with Rule 8 of the Companies (Accounts) Rules, 2014on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-6.

32. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee constituted by the Board met on March 4, 2015 and after taking into consideration all the relevant aspects decided on pursuing promotion of education, enhancing vocational skills, child health and empowering of women and/or other similar or ancillary activities with emphasis on the local areas adjoining the Company's plants in Titagarh and pursuant to Section 135 of the Acta sum ofRs.121.58 lacs was earmarked for the purpose (CSR Amount). As the work on the aforesaid activities including identification of suitable land, action in connection therewith etc., is time consuming, the CSR Amount is yet to be spent.However, the Annexure stipulated in said section is attached marked as Annexure DR-7.

Apart from the above, your Company contributes inter alia by donations to the charitable institutions directly and through philanthropic organisations engaged in providing medical, education and other reliefs to the poor sections of the society. The campus of Industrial Training Institute (the "ITI") set up on your Company's land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) with access to the tools, equipments and machinery together with experienced skilled officers as faculty provided by the Company imparts hands-on training. More than 400 students in various batches have passed and significant number of them engaged in various jobs in the industry. The ITI is recognised by the State Government as one of the best in the country and caters to the requirement of skilled workmen by industrial units.

33. Listing

The Company's Equity Shares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE). The listing fees for the financial year ending on March 31, 2016 have been duly paid.

34. Discussion on Financial Performance with respect to Operational Performance

To mitigate the risk factors referred to hereinabove impacting the operations, better manufacturing processes, improved productivity and focus on optimization of resource deployment are undertaken for a reasonable performance, viewed in the backdrop of the trends witnessed in the industries in which the Company operates.

35. Forward Looking Statement

The statements in this report describing the Company's policy, strategy, projections, estimation and expectations may appear forward looking statements within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events and the actual results could materially differ from those expressly mentioned in this Report or implied for various factors including those mentioned in the paragraph "Risks and Concerns" herein above and subsequent developments, information or events.

36. Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board

Kolkata J P Chowdhary August 12, 2015 Executive Chairman


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present their Seventeenth Annual Report and Audited Accounts for theyearended the31st March, 2014.

Profit, Retention & Dividend

Your Company’s financial performance was as follows : (Rs. in Lacs)

Particulars 2013-14 2012-13

Turnover 26123.92 49935.21

Profit Before Interest, Depreciation, Tax & Amortisation 1890.31 5898.95

Less: Depreciation 695.71 678.04

: Interest/Finance Cost 597.59 1293.30 1486.63 2164.67

Profit Before Tax 597.01 3734.28

Less:Provision For Taxation 221.07 1346.47

Profit After Taxation 375.94 2387.81

Balance Brought Forward from Last Account 29514.43 28299.14

Amount available for Appropriation 29890.37 30686.95

Appropriations

Transfer to General Reserve 38.00 240.00

Dividend on Equity 802.36 802.36

Tax on Dividend 136.36 976.72 130.16 1172.52

Balance Carried to Balance Sheet 28913.65 29514.43

Company''s Performance

The Company''s EBIDTA during the year under review at Rs.1890.31 lacs, declined sharply by about 68% as compared to that in the previous financial year due largely to non-release of the Wagons procurement order by Indian Railways, the Company''s largest customer. The other key performance indicators viz. Turnover, Profit After Tax and Earning Per Share (EPS) were also adversely affected. The demand from customers in the private sector for procurement ofregular type of Wagons was practically non-existent as they struggled and/or failed to take delivery ofthe rakes manufactured by your Companyagainst earlier purchase orders in thewakeofdepressed domestic market conditions.

The designs for manufacture of Coaches against the orders for EMU and MEMU secured in the financial year 2012 valued at about Rs.250 crore were finally made available to the Company by RITES in the latter part of financial year 2013, however, the execution could not commence due to modifications stipulated by the customer. Production of the EMU has been taken up and the rakes would be delivered as per delivery schedule agreed. Hence no contribution to the revenue could be made bythis segment during the financial year 2014.

Diversification into the related areas of competencies of your Company viz. Castings, Bailey Bridges, CoR (Cars on Rail) Wagons and Special Projects as part ofde-risking its businesses is being actively pursued to deal with the impact ofinordinate delay in releaseofwagons procurement orders by Indian Railways.

Your Company has been awarded a contract by Metro Railway, Kolkata for refurbishment ofMetro Coaches which is expected to provideyour Company a stepping stone to make a foray into manufacture of metro coaches in future. Participation in shipbuilding activities by undertaking fabrication of certain parts of small to medium vessels is being contemplated and in order to facilitate new business to be taken up, alteration ofthe Objects Clause in Memorandum ofAssociation subject to compliance with the applicable laws is being placed foryour approval by postal ballot.

Rationalisation of resources aimed at incremental efficiency in all areas of operations continues to receive sharp focus while efforts simultaneously to secure larger shareofsupply ofcustomized wagons to the international markets to offset thesubdued demand from the private sector buyers are being made to improve the overall performance ofyour Company in the current year.

Dividend

The Board of Directors has recommended a dividend of40 percent i.e. Rs. 4/- per shareon 2,00,59,069 equityshares of Rs. 10/- each fully paid up subject to approval ofthe members, by appropriation of Rs.938.72 Lacs (including Rs. 136.36 Lacs being Dividend Distribution Tax) after transferring Rs. 38 Lacs to General Reserves from the profit for the Financial Year ended March 31,2014.

Directors''Report

Business Segments

Wagons and Coaches

Wagons segment ofthe Companyaccounted for 88.55% and 99.60% of the total revenue and operating profit respectively ofyourCompany during the year under review. Production of 686 wagons during the FY 2014 was down by 72% against 2495 units; and sales volume registered a decline of 68% respectively as compared to FY 2013. The operating profit ofthe Segment at Rs. 2308 lacs was lower by 47% than the corresponding number in the previous financial year.

Indian Railways has after a long gap released order for reduced quantum ofWagons in April, 2014 however, the margins from Wagons business are substantially stressed even as the wait for much needed boost in demand for freight wagons from completion of Dedicated Freight Corridors continues. Therefore, the performance ofthis segment would largelydepend on contribution from Coaches to bedelivered during the current fiscal.

Others

The segment consists of other products viz. Heavy Earth Moving Machinery, Bailey Bridges etc. which represented less than ten percent ofthe total revenue on individual basis during the financial year ended March 31,2014. Steel Castings business continues to contributeto captiveconsumption of vital components in manufacture ofWagons by the Company.

Strategic and Joint Venture Agreements

Update on your Company''s strategic ventures is as follows :

Cimco Equity Holdings Private Limited (CEHPL)

TheJoint Venture, namely Cimco Equity Holdings Private Limited (CEHPL) is the holding companyofCIMMCO Limited (Cimmco) and was incorporated to be the special purpose vehicle for the Company in revival ofCimmco in accordance with the Rehabilitation Scheme sanctioned by the Hon''ble BIFR. Cimmco is a manufacturer ofWagons and other engineering products, however, there is no conflict ofinterest.

CEHPL becamea wholly owned subsidiary oftheCompany in April, 2014consequent to conversion by yourCompany oftheOptionally Fully Convertible Debentures held in CEHPL and exit ofthe other joint venture partner by sale of its stake in the Company, thereby Cimmco also has since become a subsidiary ofyour Company.

Greysham and Co. Private Limited (Greysham)

Thejointventure; Greysham and Co. Private Limited for manufacture ofAir Brakes and Slack Adjusters, being the critical components for production of Wagons was set up by the Company on June 13, 2008. Greysham is treated as a subsidiary ofthe Company in terms ofthe provisions ofthe Companies Act, 1956 pursuant to the right oftheCompanyto appoint majority ofDirectors on its Board. Operations oftheCompanycontinue to remain suspended and alternative strategy on the objective of backward integration behind setting up Greysham is being reviewed.

Joint Venture with two Group Companies

A joint venture has been entered into with the subsidiaries viz. Titagarh Agrico Private Limited (TAPL) and Cimmco Limited under which TAPL has undertaken a project to manufacture tractors/agriculture implements at Bharatpur.

Joint Venture Agreement with FreightCar America Inc. (FCA)

As agreed between theJointVenture partners in terms ofa Settlement Agreement executed on the 18th February, 2013 thejointventurecompany (JVC) is under the process of being wound up subject to the applicable compliances. During the financial year under review, your Company transferred its entire stake in the JVC to a group company.

Directors

Shri D. N. Davar, Independent Director retires by rotation pursuant to the provisions of Section 152 ofthe Companies Act, 2013 (the Act) and is eligible for re-appointment.

Messrs Nandan Bhattacharya, Abhas Sen and Aloke Mookerjea resigned from the Board w.e.f. the conclusion of Board meeting held on May 29, 2014. Shri STalukdar and Shri Shekhar Datta appointed as Additional Directors w.e.f. November 9, 2013 and April 12, 2014 respectively vacate office at the ensuing Annual General Meeting (AGM) and are proposed to be appointed as Independent Directors in accordance with the provisions ofSections 149 and 152 ofthe Act read with the rules made thereunder and the Clause 49 of Listing Agreement with the Stock Exchanges concerned. Shri D N Davar and Shri Manoj Mohanka, Shri S C Das, Independent Directors are also proposed to be reappointed as per the aforesaid provisions. Shri Sudipta Mukherjee appointed as an Additional Director and designated Director (Wagons Operations) w.e.f. May 15, 2014vacates office at the ensuing AGM and is eligible for reappointment. Smt. Rashmi Chowdhary has been appointed Additional Director and her appointment becomes effective from 14th August, 2014. Shevacates office at theensuing AGM and is eligible for appointment pursuant to Section 160 ofthe Act.

The information prescribed by Clause 49 ofthe Listing Agreement in respect ofthe abovesaid Directors is given in the Notice ofAGM.

Directors'' Responsibility Statement

The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31, 2014 have been followed in preparation ofthesaid accounts and there were no material departures therefrom requiring any explanation;

- The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonableand prudent so asto givetrueand fairviewofthestateofaffairs ofthe Company atthe end offinancial year andofthe profit and loss statement of the Company for that period;

- Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions ofthe Companies Act, 1956 for safeguarding the assets ofthe Companyand for preventing and detecting fraud and other irregularities;and

- The Annual Accounts have been prepared on a going concern basis.

Auditors

Statutory Auditors & Auditors'' Report

Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors ofthe Company retire at the conclusion of ensuing 17th AGM and willing to continue, they have issued a certificate about their eligibility for reappointment and the same is proposed until the conclusion of Twentieth AGM pursuant to the provisions ofSection 139 ofthe Companies Act, 2013.

Cost Auditors

Messrs D. Radhakrishnan & Co., Cost Accountants have been re-appointed as Cost Auditors to conduct cost audit ofthe accounts maintained by the Company in respect ofthe products manufactured by the Company, for the Financial Year 2014-15 subject to ratification of their remuneration by the shareholders in accordance with the provisions ofSection 148 ofthe Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014. The Cost Audit Report for thefinancial year ended 31st March, 2013 has been filed as stipulated by the applicable provisions oflaw.

Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31,2014.

Subsidiary Companies

A statement containing in brief the details required under Section 212(3) ofthe Companies Act, 1956 in respect of key financial data for the financial year ended March 31, 2014, and pursuant to the Circular No. 2/2011 dated February 8, 2011 issued by Ministry of Corporate Affairs regarding Titagarh Capital Private Limited,Titagarh Singapore Pte. Limited,Titagarh Marine Limited (including its subsidiaries viz.Times Marine Private Limited and Corporated Shipyard Private Limited) and Titagarh Agrico Private Limited (formerly Titagarh Cranes Private Limited), whollyowned subsidiaries ofthe Companyand Greysham and Co. Private Limited &Titagarh Wagons AFR, France, subsidiaries ofthe Company is included in the Annual Report.

The Consolidated Financial Statements including thedetails ofthe Accounts ofthe subsidiaries areattached to the Annual Report and Accounts.Acopy ofthe Annual Accounts ofthe subsidiaries will be madeavailable upon request by any member ofthe Company/its subsidiaries at the registered office ofthe Company and those of respective subsidiary companies.

Consolidated Financial Statements

In accordance with Accounting Standard 21-Consolidated Financial Statement of Accounts, Accounting Standard 23-Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27- Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis offinancial statements received from subsidiaries, associates and joint venture companies as approved by their respective Boards, form part of this Report & Accounts. As regards the qualified opinion expressed by Statutory Auditors in their Report, while the Note No. 9(h) in the Notes on Accounts is self-explanatory, requiring no further specific response from the Directors at this stage, the Company has secured a large part of trade and other receivables amounting to Rs.2796.26 lacs through collaterals and with its persistently diligent efforts is reasonably confident of recovering the entire amount from the customer(s) concerned.

Personnel

The particulars ofemployees pursuant to Section 217 (2A) ofthe Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 are set out in the Annexure to this Report.

Industrial relations had been cordial throughout the year under review. The Directors express appreciation ofthe efficient services rendered by the employees at all levels.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation ofenergy, technologyabsorption,foreign exchangeearnings and outgo is annexed to and forms part ofthis Report.

Corporate Social Responsibility

Your Company contributes inter alia by donations to the charitable institutions directly and through philanthropic organisations engaged in providing medical, education and other reliefs to the poor sections ofthesociety.

The campus of Industrial Training Institute (the"ITI") set up on your Company''s land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) with access to the tools, equipments and machinery together with experienced skilled officers as faculty provided by theCompany imparts hands-on training. A total 436 students in four batches have passed,65% ofthem have already been engaged in variousjobs and the fifth batch is undergoing training.

Investment of about Rs. 750 Lacs including Rs. 500 Lacs on construction of building and Rs. 250 Lacs of outlay in machinery, equipments and other facilities has been committed by the State and land for ITI has been allotted by Khardah Municipality near Khardah Railway Station and your Company''s contribution is by way of providing full support for training ofthe students and offer them need based employment at theCompany''s facilities. The ITI is recognised by the State as one ofthe best in the countryand caters to the requirement offor skilled workmen by industrial units.

As required by the provisionsofthe Companies Act, 2013and Clause 49 ofthe Listing Agreement, a CorporateSocial Responsibility Committee has been constituted which has adopted the policy on the necessary action to be taken as stipulated by the said statutes in due course.

Listing

The Company’s EquityShares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE).The listing fees for thefinancial year ending on March 31,2015 have been duly paid.

Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board

Kolkata J P Chowdhary

August 7,2014 Executive Chairman


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present their Sixteenth Annual Report and Audited Accounts for the year ended the 31st March, 2013.

Profit, Retention & Dividend

Your Company''s financial performance was as follows :

(Rs. in Lacs)

Particulars 2012-13 2011-12

Turnover 49,935,21 64,432.99

Profit Before Interest, Depreciation, Tax & Amortisation 5,898.95 12,934.88

Less : Depreciation 55,873 : Interest/Finance Cost 1,486.63 2,164.67 893.91 1452.64

Profit Before Tax 3,734,28 482.24

Less: Provision For Taxation 1,346.47 3,819.79

Profit After Taxation 2,387.81 7,662.45

Balance Brought Forward from Last Account 28,299.14 23,301.75

Amount available for Appropriation 30,686.95 30,964.20

Appropriations

Transfer to General Reserve 240.00 80.00

Dividend on Equity 80236 1,604.73

Tax on Dividend 130.16 1,172.52 260.33 665.06

Balance Carried to Balance Sheet 29,514.43 28,299.14

Economic Environment

Advanced economies faced two of the biggest short-term threats to the global recovery during the year 2012-13, the threat of euro area disintegration and repercussions of''fiscal cliff in the United States in the form of fiscal contraction, which have, however been successfully diffused. Global economic prospects have since improved but the challenges to smooth recovery remain though activity is expected to gradually accelerate, starting in the second half of 2013. Accordingly, the overall growth forecast for advanced economies in 2013 is a modest 114 percent i.e. stagnating at the level of 2012. From a high of about 9 percent GDP growth for many years prior to the 2008 crisis, the Indian economy grew 6 percent during 2012-13 and is projected to slow down further to a decadal low of 5.5 percent during this fiscal. Significant structural challenges would lower potential output over the medium term and also keep inflation elevated with Current Account Deficit in addition to various regional factors posing a serious risk to the much needed growth in the economy despite forecast of a normal monsoon during this fiscal.

Company''s Performance

The Company''s Operating Profit during the year under review (FY 2012-13) at Rs. 5,898.95 lacs, declined sharply by about 54% as against Rs.12,934.88 lacs in the previous financial year (FY 2011 -12) and in relation thereto the Profit After Tax and Earning Per Share (EPS) were also affected adversely, owing mainly to prolonged delay in release of orders by the Indian Railway for Wagons coupled with the substantial rise in the cost of carrying inventory and other inputs, as despite the Company mobilising main raw materials for manufacture of EMUs (Coaches) at substantial cost, the execution of orders for EMU and MEMU secured in the previous financial year, valued at about Rs. 250 crores could not be taken up, in the absence of freezing of design parameters for the newly developed BCHNL wagons by ICF and RCF, who had been assigned the responsibility by Indian Railway. Further, there had been disruption in the manufacturing activities, consequent upon the fire at Titagarh Wagons plant, resulting in the loss of materials costing Rs. 228.98 lacs for which claim has been lodged with the Insurance Company.

Implementation of your Company''s plans to achieve growth in the other segments viz. Coaches, Castings, Bailey Bridges and Special Projects has been taken up and is being pursued aggressively. Cost efficiency and improvement in productivity for optimisation of resources are under sharp focus to tide over the difficult period in the wake of inordinate delay in orders for procurement of Wagons by the Indian Railways, compounded by continued subdued demand from the private sector buyers.

The restructuring of major verticals, earlier announced has subsequent to review been deferred, in the context of the recent developments in the industries in which your Company operates.

Dividend

The Board of Directors has recommended a dividend of 40 percent i.e. Rs. 4/- per share on 2,00,59,069 equity shares of Rs. 10/- each fully paid up subject to approval of the members, by appropriation of Rs. 932.52 Lacs (including Rs. 130.16 Lacs being Dividend Distribution Tax) after transferring Rs. 240 lacs to General Reserves from the profit for the Financial Year ended March 31, 2013.

Business Segments

Wagons and Coaches

Wagons segment of the Company accounted for 87.31% (Previous year 88.00%) and 80.64% (Previous year 80.05%) of the total revenue and operating profit respectively of your Company during the year under review. Production of 2495 wagons during the FY 2012-13 was lower by 9.63% against 2761 and sales of 2362 units of Wagons as compared to 2855 units respectively in FY 2011 -12 portraying a decline of 17.27%. Though the average Sales realisation per unit was comparable, Sales generated by the Segment at Rs. 43,598 lacs were down by 23.11 % vis a vis the corresponding numbers in the previous financial year.

During the FY 2012-13, orders for 12 rakes of MEMU and 11 rakes of EMU from the Indian Railways secured are still pending execution in the absence of designs from the customer. Had the designs been provided to the Company as originally scheduled, the performance of the Company would have been distinctly better than that achieved during the year under review.

The self-propelled railway passenger vehicles such as Electrical Multiple Units ("EMUs"), and Main Line Electrical Multiple Units ("MEMUs"), in which your Company, having been endowed with the first mover''s advantage in the Private Sector, expects to consolidate its position by execution of orders for 23 rakes and with tie up for the requisite technology from foreign collaborators would move on to the next stage of Rolling Stock i.e. manufacture of Metro Coaches.

Movement of cargo by Wagons is expected to continue to be the preferred mode and setting up of the Dedicated Freight Corridors would boost the demand for Rolling Stock, auguring well for this segment.

Steel Castings

Production of 9,971.36 M.T. (Previous year 14,583 M.T.) of Castings and Profit Before Interest & Tax at Rs. 759.17 lacs (Previous year 1,691.68 lacs) during the year under review were lower by 31.62% and 55.12% respectively than the corresponding numbers in the previous financial year ended the 31st March, 2012. About 2/3 of the Steel Castings mainly consisting of bogies and couplers, the critical components produced by the Company were used for captive consumption in the manufacture of Wagons by the Company.

Heavy Earth Moving Machinery (HEMM)

Performance of the segment during the financial year 2012-13 improved with the sale of 16 equipments, higher by 220% whereas production at 7 units was lower by 46.15%, compared to the previous financial year. Higher sales volume led PBIT to rise 481.60 % over the corresponding figure of FY 12 on account of two distinct categories of equipments sold during the year under review.

Your Board is seized of the vital aspect of development of new products and overhaul of the business model of this segment and would take the steps in due course subject to the applicable compliances.

Special Projects-Steel Bridges

Revenue from Steel Bridges accounts for a marginal portion of the total revenues of the Company, however, the segment affords the prestige of being associated with the Country''s defence sector and also has huge potential for growth in future. The Company is exploring association with a world renowned manufacturer of steel bridges to develop the segment.

Strategic and Joint Venture Agreements

Update on your Company''s strategic partnerships entered into for growth and expansion of its businesses is as follows :

Cimco Equity Holdings Private Limited (CEHPL)

The Joint Venture namely Cimco Equity Holdings Private Limited (CEHPL) is the holding company of CIMMCO Limited (Cimmco) and was incorporated to be the Special Purpose Vehicle for the Company for revival of Cimmco in accordance with the Rehabilitation Scheme sanctioned by the Hon''ble BIFR. Cimmco is a manufacturer of Wagons and other engineering products, however, there is no conflict of interest.

Greysham and Co. Private Limited (Greysham)

The joint venture namely, Greysham and Co. Private Limited for manufacture of Air Brakes and Slack Adjusters, being the critical components for production of Wagons, was set up by the Company on June 13,2008. Greysham is treated as a subsidiary of the Company in terms of the provisions of the Companies Act, 1956 pursuant to the right of the Company to appoint majority of Directors on its Board. Aimed at backward integration, the production at Greysham''s unit had to be suspended due to various reasons including partial strike by the workmen. The options available are being evaluated and the matter is receiving due attention for suitable action.

Joint Venture Agreement with FreightCar America Inc. (FCA)

Pursuant to the Joint Venture Agreement (JV) entered into between the Company and FCA, a private limited company, ''Titagarh FreightCar Private Limited''was incorporated in India (JVC) with the stakes of the Company and FCA being 49% and 51% respectively in equity capital of JVC, seeking to develop, design, manufacture, service and distribute Aluminium Rail Cars, Gondolas etc. Due to various compelling reasons, JVC withdrew last year its proposal for design approval submitted to RDSO. Meanwhile, as agreed JV Agreement has been terminated upon execution of Settlement Agreement between the Joint Venture partners on the 18th February, 2013 and consequently the JVC would be wound up subject to the applicable compliances.

Directors

Shri Nandan Bhattacharya and Shri Manoj Mohanka, Directors retire by rotation and being eligible offer themselves for re-appointment at the ensuing

Annual General Meeting (AGM). Shri Sudev Chandra Das appointed as an Additional Director by the Board w.e.f. the 13th May, 2013, holds office upto the date of ensuing AGM and in accordance with the provision of Section 257 of the Companies Act, 1956 (the Act) is eligible for appointment. Notice pursuant to the provisions of Section 257 proposing the candidature of Shri Das has been received from a member of the Company proposing his appointment.

The information prescribed by Clause 49 of the Listing Agreement in respect of the said Directors is given in the Corporate Governance Report annexed to and forming part of this Report.

Directors'' Responsibility Statement

The Directors state that:

Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended the March 31,2013 have been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation; The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the Profit and Loss statement of the Company for that period; Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and The Annual Accounts have been prepared on a going concern basis.

Auditors, Consolidated Financial Statements and Auditor''s Report

Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and willing to continue, they have submitted the certificate pursuant to Section 224(1 )(B) of the Companies Act, 1956 about their eligibility for reappointment. In accordance with Accounting Standard 21 - Consolidated Financial Statement of Accounts, Accounting Standard 23 - Accounting for Investments in Associates in Consolidated Financial Statements (CFS) and Accounting Standard 27 - Financial Reporting on Interest in Joint Ventures issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of financial statements received from subsidiaries, associates and joint venture companies as approved by their respective Boards, form part of this report & Accounts. As regards the qualified opinion in Auditor''s Report on CFS, in addition to Notes No. 31,13.2 & 11 being self explanatory and requiring no further clarification from the Directors at this stage, a gist of management response is as follows : (i) Demand made by ARCIL against the joint venture company (JVC) was not in consonance with the understanding i. e. the alleged amount will stand repaid upon invocation of the pledge of shares being the exclusive security in its favour and therefore, JVC denied such additional demand and thus no provision has been considered necessary. Subsequently in an application filed by ARCIL before the BIFR on the subject, it has been held that ARCIL''s prayers are not maintainable. (ii) The amount comprised of three separate claims has been considered good of recovery based on the facts of each matter and progress witnessed therein including the ruling of the apex court having a direct (positive) bearing on the grounds taken in one of the proceedings filed by JVC. Whereas arbitration has resumed in one of the matters, a part of the amount has already been received against guarantee given in compliance with the Hon''ble High Court''s order in favour of the JVC in the other matter. Therefore, the management is pursuing the proceedings and is hopeful of recovering the said amounts. iii) Order for Wagons procurement having been placed by the customer, JVC has taken steps to execute the same in right earnest and is virtually certain of earning reasonable taxable profit to claim entire Deferred Tax Asset in near future. Cost Auditors

Messrs D. Radhakrishnan & Co., Cost Accountants were re-appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2013-14. The Cost Audit Report for the financial year 31 st March, 2013 would be filed with the authority concerned within the time stipulated by law.

Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31, 2013.

Subsidiary Companies

A statement containing in brief the details required under Section 212(3) of the Companies Act, 1956 and pursuant to the Circular No. 2/2011 dated February 8, 2011 issued by Ministry of Corporate Affairs regarding Titagarh Capital Private Limited (Formerly known as Flourish Securities and Finance Private Limited), Titagarh Singapore Pte. Limited,Titagarh Marine Limited (including its subsidiary) and Titagarh Cranes Private Limited (w.e.f. August 24, 2012), wholly owned subsidiaries of the Company and Greysham and Co. Private Limited and Titagarh Wagons AFR, France, subsidiaries of the Company is included in the Annual Report.

The Accounts of the subsidiaries are not attached to the Annual Report and Accounts and a copy thereof will be made available upon request by any member of the Company/its subsidiaries at the Registered Office of the Company/ respective subsidiary companies.

Personnel

The Particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 are set out in the Annexure to this Report.

Industrial relations have been cordial throughout the year under review. The Directors express their appreciation of the efficient services rendered by the employees at all levels.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

Corporate Social Responsibility

As part of your Company''s Social Responsibility, involvement in various Community Welfare Programmes, directly and through philanthropic organizations continues. Your Company has donated to the charitable institutions and schools engaged in medical, education and relief of the poor sections of the society. Further, the fourth batch of 126 students (including 13 female students) at the campus of Industrial Training Institute (the"ITI") set up on your Company''s land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) with access to the tools, equipments and machinery together with experienced skilled officers as faculty provided by the Company, is being imparted hands-on training.Thus, upon completion of the training of the current batch in July, 2013, a total of about 350 students would have been trained at the ITI.

Investment of about Rs. 750 Lacs including Rs. 500 Lacs on construction of building and Rs. 250 Lacs of outlay in machinery, equipments and other facilities has been committed by the State and land for ITI has been allotted by Khardah Municipality near Khardah Railway Station and your Company''s contribution is by way of providing full support for training of the students and offer them need based employment at the Company''s facilities. ITI is recognised by the State as one of the best in the country and caters to the requirement of skilled workmen by industrial units.

Listing

The Company''s Equity Shares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE). The listing fees for the financial year ending on March 31, 2014 have been duly paid.

Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners. For and on behalf of the Board

Kolkata J P Chowdhary

May 20, 2013 Executive Chairman


Mar 31, 2012

The Directors are pleased to present their Fifteenth Annual Report and Audited Accounts for the year ended the 31st March, 2012.

Profit, Retention & Dividend

Your Company's financial performance was as follows :

(Rs. in Lacs)

Particulars 2011-12 2010-11

Turnover 64,432.99 66,670.78

Profit Before Depreciation and Tax 12,040.97 12,838.07

Less: Depreciation 558.73 576.92

Profit Before Tax 11,482.24 12,261.15

Less: Provision For Taxation 3,819.79 4,121.73

Profit After Taxation 7,662.45 8,139.42

Balance Brought Forward from Last Account 23,301.75 17,761.16

Amount available for Appropriation 30,964.20 25,900.58

Appropriations

Transfer to General Reserve 800.00 850.00

Dividend on Equity 1,604.73 1504.73

Tax on Dividend 260.33 2,665.06 244.10 2,598.83

Balance Carried to Balance Sheet 28,299.14 23,301.75

Economic Environment

Global economy, against a backdrop of unresolved structural fragilities suffered major setbacks during the financial year ended the 31st March, 2012 which include unrest in some oil-producing countries, substantial financial turbulence encountered by Euro zone, sell-off of risky assets. Following the aforesaid, Global growth is expected to moderate to 4% through 2012 and the real GDP in the advanced economies is projected to expand at a very slow pace of about 2% based on certain assumptions, whereas emerging and developing economies would record lower growth rate of about 6% in 2012. Indian economy is estimated to have grown @6.9% in 2011-12 after having grown at the rate of 8.4% in each of the two preceding years. However, slowdown in the industrial growth would lead to decline in the real GDP growth during this fiscal. Concomitantly, the domestic economy is faced with major challenges posed by high inflation rate and recently witnessed sharp depreciation in Rupee.

Company's Performance

The Company's Operating Profit during the year under review (FY 2011-12) at Rs.13,090.36 lacs, declined marginally as compared to that in the previous financial year (FY 2010-11) and Profit Before Tax and Profit After Tax were lower by 6.35% & 5.86% respectively mainly due to lower sales realisation per unit from the main segment viz. Wagons and Coaches and rise in the input costs.

Your Company's focus on pursuing aggressive growth in the other business verticals coupled with innovative manufacturing processes for higher efficiency aimed at achieving inclusive growth in business continues for maximisation of shareholders value. Your Directors have in principle decided to restructure the Company through an apporopriate scheme of Restructuring subject to all applicable compliances/approvals/laws, with a view to achieving the growth potential of the major verticals of the Company.

Dividend

The Board of Directors has recommended a dividend of 80% i.e. Rs. 8/- per share on 2,00,59,069 equity shares of Rs. 10/- each fully paid up subject to approval of the members, by appropriation of Rs. 1865.06 Lacs (including Rs. 260.33 lacs being Dividend Distribution Tax) after transferring Rs. 800 lacs to General Reserves from the profit for the Financial Year ended March 31, 2012.

Conversion of Warrants into Equity Shares

During the year the Company's paid up capital increased from 1,88,09,069 equity shares of Rs. 10/- each to 2,00,59,069 equity shares of Rs. 10/- each upon conversion of 12,50,000 Warrants into equivalent equity shares on March 7, 2012.

Business Segments

Wagons and Coaches

Wagons segment of the Company continues to be the dominant contributor to revenues and operating profit of your Company, accounting for 88.00% and 80.05% of the total revenues and operating profit respectively during the year under review. During FY 2011-12 the Company manufactured 2761 and despatched 2855 Units of Wagons as against 2867 & 2870 respectively in FY 2010- 11 representing production being lower by 3.69% and a negligible 0.52% decline in sales volume in that order when compared to the corresponding numbers in the previous financial year. During the FY 2011-12 two rakes of Coaches (EMUs) were despatched generating revenue of Rs. 1956.66 lacs. The Company has secured orders for 12 rakes of MEMU and 11 rakes of EMU from the Indian Railways during the year under review. The facilities at Uttarpara being equipped to turn out fairly large number of AC/EMUs per month, timely delivery of the said rakes of MEMU and EMU is expected to be smooth. The Operating Profit of the Segment at Rs. 10,471.62 lacs was lower by 6.58% than that in FY 2010-11 due to lower sales realisation per unit.

Metro Railways/Mass Rapid Transport System ("MRTS") in major cities across the country has been considered to be essential to cater to transportation needs of urban/semi urban commuters and there exists enormous potential for self-propelled railway passenger vehicles such as EMUs, Diesel Multiple Units ("DMUs"), Main Line Electrical Multiple Units ("MEMUs") and metro coaches etc.

Though demand for Wagons from Indian Railways (IR) is projected to be firm with quantities varying in line with the funds earmarked by IR and its policy for such procurement from year to year, introduction of Wagon Leasing Policy, new Wagon Investment Scheme is expected to provide the impetus to private sector customers for increase in the off take of Wagons.

Steel Castings

Bulk of Steel Castings produced by the Company is used for captive consumption in the manufacture of critical components such as bogies and couplers at competitive prices. External Sales ofthe Segment at Rs. 4,045.76 lacs and Profit before Interest & Tax at Rs. 1,691.68 lacs during the year under review were higher by 79.62% and 32.31% respectively than that in the previous financial year ended the March 31, 2011. The Division besides being strategically of vital importance to ensuring ready availability of castings for uninterrupted manufacture and timely delivery of Wagons, has great potential for growth in future.

Heavy Earth Moving Machinery (HEMM)

The Division recorded a marginal amount of loss at Rs. 34.96 Lacs during the year under review despite higher average sales realisation, mainly due to higher production cost caused by rise in input costs even as three machines manufactured during FY 2011-12 were deployed on lease to customers. Facilities of the Division have been revamped, however the change in marketing strategy in line with the demands of customers is in focus to tap the segment's real potential aimed at materially enhancing its contribution to the overall financial performance of your Company.

Special Projects - Steel Bridges

Revenue from Steel Bridges accounts for a marginal portion of the total revenues of the Company and income from sale of the product by the Company during FY 2011-12 at Rs. 711.80 lacs was lower by about 69% over those of FY 2010-11 as the volume of production and sale of Bailey Bridges went down by 50% and 48% respectively during the year under review. However, besides the eligibility of the Company to get a repeat order during the current year, the segment affords the prestige of being associated with the country's defence sector.

Strategic and Joint Venture Agreements

Your Company has entered into strategic partnerships mentioned below for growth and expansion of its businesses :

Cimco Equity Holdings Private Limited (CEHPL)

The Joint Venture namely Cimco Equity Holdings Private Limited (CEHPL) is the holding company of CIMMCO Limited (Cimmco) and Cimmco's net worth having turned positive in a short span of nine months, it was discharged by the Hon'ble BIFR from the provisions of SICA vide order dated December 7, 2010. Cimmco is a manufacturer of Wagons and Engineering Products, however there is no conflict of interest.

Greysham and Co. Private Limited (Greysham)

The joint venture namely, Greysham and Co. Private Limited for manufacture of Air Brakes and Slack Adjusters, being the critical components for production of Wagons was set up by the Company on June 13, 2008. Greysham is treated as a subsidiary of the Company in terms ofthe provisions of the Companies Act, 1956 pursuant to the right of the Company to appoint majority of Directors on its Board.

Joint Venture Agreement with FreightCar America Inc. (FCA)

Pursuant to the Joint Venture Agreement (JV) entered into between the Company and FCA, a private limited company, 'Titagarh FreightCar Private Limited' was incorporated in India (JVC) with the stakes of the Company and FCA being 49% and 51% respectively in equity capital of JVC, to develop, design, manufacture, service and distribute Aluminium Rail Cars, Gondolas and such other products as may be agreed from time to time between the partners of the JV. Due to various compelling reasons, JVC has lately withdrawn its proposal for design approval submitted to RDSO. The Joint Venture is in course of being terminated, subject to implementation of concluding agreement amongst the parties.

Directors

ShriDN Davar and ShriNK Mittal, Directors retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting (AGM). Shri Arvind Pande appointed as an Additional Director by the Board w.e.f. the March 24, 2012, holds office upto the date of ensuing AGM and in accordance with Section 257 of the Act is eligible for appointment. Notice pursuant to the provisions of Section 257 proposing the candidature of Shri Pande has been received from a member of the Company proposing his appointment.

The information prescribed by Clause 49 of the Listing Agreement in respect of the said Directors is given in the Corporate Governance Report annexed to and forming part of this Report.

Directors1 Responsibility Statement

The Directors state that:

Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended the March 31, 2012 have been followed in preparation of the said accounts and there were no material departures there from requiring any explanation;

The Directors have selected and followed the accounting policies as described in the Schedule 22 (Notes on Accounts) and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss statement of the Company for that period;

Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

The Annual Accounts have been prepared on a going concern basis. Auditors

Statutory Auditors & Auditors1 Report

Messrs. S R Batliboi & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and willing to continue, they have submitted the certificate pursuant to Section 224(1)(B) of the Companies Act, 1956 about their eligibility for re-appointment.

Cost Auditors

Messrs. D. Radhakrishnan & Co., Cost Accountants were re-appointed as Cost Auditor to conduct cost audit of the accounts maintained by the Company in respect ofthe products manufactured by the Company, for the Financial Year 2012-13.

Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31, 2012.

Subsidiary Companies

A statement containing in brief the details required under Section 212(3) of the Companies Act, 1956 and pursuant to the Circular No. 2/2011 dated February 8, 2011 issued by Ministry of Corporate Affairs regarding Titagarh Capital Private Limited (Formerly known as Flourish Securities and Finance Private Limited), Titagarh Singapore Pte. Limited, wholly owned subsidiaries of the Company and Greysham and Co. Private Limited, Titagarh Wagons AFR, France, and Titagarh Marine Limited (w.e.f. March 3, 2012), subsidiaries of the Company is included in the Annual Report. The Consolidated Financial Statements including the details of the Accounts of the subsidiaries are attached to the Annual Report and Accounts. A copy of the Annual Accounts of the subsidiaries will be made available upon request for inspection by any member of the Company/its subsidiaries at the Registered Office of the Company and those of respective subsidiary companies.

Consolidated Financial Statements

In accordance with Accounting Standard 21-Consolidated Financial Statement of Accounts, Accounting Standard 23-Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27- Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of financial statements received from subsidiaries, associates and joint venture companies as approved by their respective Boards, form part ofthis Report & Accounts. As regards the attention drawn by Statutory Auditors in their Report, Note no.32 is self-explanatory, requiring no specific response from the Directors at this stage.

Personnel

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 are set out in the Annexure to this Report.

Industrial relations had been cordial throughout the year under review. The Directors express appreciation of the efficient services rendered by the employees at all levels.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

Corporate Social Responsibility

Your Company's endeavors to contribute suitably to the society by being involved in a series of community welfare programmes, directly and through philanthropic organizations continue. The first batch of 126 students at the campus of Industrial Training Institute (the "ITI") set up on your Company's land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) with access to the tools, equipments and machinery together with experienced skilled officers as faculty provided by the Company for imparting hands-on training has successfully passed the first module and they have been admitted to the three advanced modules viz. TIG/MIG Welding, Structural Welding and Pressure Vessel & Pipe Welding.

Investment of about Rs. 750 lacs including Rs. 500 lacs on construction of building and Rs. 250 lacs of outlay in machinery, equipments and other facilities has been committed by the State and land for ITI has been allotted by Khardah Municipality near Khardah Railway Station and your Company's contribution is by way of providing full support for training of about 180 students and offer them need based employment at the Company's facilities.

The second batch of 143 students has been admitted to the preliminary module - BBBT during the current year. Your Company is also in dialogue with Directorate of Technical Education for approval of industry specific course under specialized module on "Welding Technology for Fabrication of Railway Transportation Systems" to give the opportunity to the students of Advanced Module to train and be equipped with the skills for securing immediate employment The ITI, once operational fully on the land allotted, shall also cater to the requirement of the industrial units in the adjoining area for skilled workmen.

Listing

The Company's Equity Shares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE). The listing fees for the financial year ended March 31, 2013 have been duly paid.

Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board

Place : Kolkata J P Chowdhary

Date : July 30, 2012 Executive Chairman


Mar 31, 2011

The Directors are pleased to present their Fourteenth Annual Report and Audited Accounts for the year ended March 31, 2011. The Report as well deals with and encompasses aspects relating to Management Discussion and Analysis, while report on Corporate Governance is set out separately.

Economic Environment

During the second half of 2010, global financial conditions broadly improved as reflected in the rise in equity markets, however, lingering vulnerabilities were witnessed in certain sectors including real estate markets and sericitisation in the advanced economies, more so in some of the European economies where financial turbulence raised serious question of fiscal sustainability followed by natural disaster that struck Japan. Robust expansion in emerging and developing economies continued over the year generally, buoyed by well-entrenched private demand and resurgent capital inflows. Growth forecast for the country has been lowered slightly due to growing concern over inflation, however, firm domestic demand; additions to capacities with cost effectiveness backed by forecast of normal monsoons and close monitoring of fiscal health by the Indian Government ought to augur well for the countrys economy in the current financial year.

Company Performance

The Companys financial performance during the year improved significantly with all the key financial indicators recording notable rise and the achievement is particularly satisfying due to the fact that the order for wagons was released by the Indian Railways towards the end of the second quarter of FY 2010-11 even as the demand from private sector for wagons almost dried up because of continuing impact of withdrawal of Wagon Investment Scheme by the Indian Railways. Increase during the year under review (FY 10- 11) in EBIDTA, Profit before Tax and Profit after Tax was 20.11%, 24.05% and 24.51% respectively over the corresponding parameters in the previous financial year ended 31st March, 2010 (FY 09-10) whereas EPS for FY 10-11 at Rs.43.27 was higher by about 25% than Rs. 34.75 in the previous financial year.

Your Companys endeavors to adopt innovative manufacturing processes for higher efficiency while pursuing proactive growth in other business verticals such as Railway Coaches, Heavy Earth Moving & Mining Machinery and Special Projects to attain inclusive growth in business continue for consolidating your Companys prominence in the industry.

Profit, Retention & Dividend

Your Companys financial performance was as follows:

Rs./Lacs

Particulars 2010-11 2009-10

Turnover 66670.78 55422.38

Profit Before Depreciation and Tax 12838.07 10327.30

Less: Depreciation 576.92 443.58

Profit Before Tax 12261.15 9883.72

Less: Provision For Taxation 4121.73 3346.67

Profit After Taxation 8139.42 6537.05

Balance Brought Forward from Last Account 17761.16 13864.37

Less: Debit Balances of Profit & Loss Account of Transferor Companies upon amalgamation - (843.61)

Amount available for Appropriation 25900.58 19557.81

Appropriations

Transfer to General Reserve 850.00 700.00

Dividend on Equity 1504.73 940.45

Tax on Dividend 244.10 2598.83 156.20 1796.65

Balance Carried to Balance Sheet 23301.75 17761.16

Dividend

The Board of Directors has recommended a dividend of 80% i.e. Rs. 8/- per share on 1,88,09,069 equity shares of Rs. 10/- each fully paid up subject to approval of the members, by appropriation of Rs. 1748.83 Lacs (including Rs. 244.10 Lacs being tax on dividend) after transferring Rs. 850.00 Lacs to General Reserves from the profit for the Financial Year Ended March 31, 2011.

Overall Review

The overall performance of the Company during the financial year 2010-11 was satisfactory with all the Segments contributing to the bottomline though Wagons continued to be the mainstay. With a view to creating maximum shareholder value, the Companys resources are aimed at

(a) Creating and maintaining niche markets and undertaking growth both through organic and inorganic routes

(b) Improvement in utilization of assets to achieve productivity gains

(c) Measures to consistently reduce costs and bringing improvement in productivity

(d) Improvement of Working capital management

(e) Expansion of capacity and upgradation of facilities to be better prepared for the potential growth in demand for the Companys portfolio of products.

Business Segments

Wagons and Rail Coaches (EMUs) Wagons

Wagons Division of the Company continues to be the dominant contributor to Revenues and EBIDTA of your Company, accounting for 91.75 % and 86.90% of the total revenues and operating profit respectively during the year under review. The number of wagons manufactured and despatched during the year under review at 2867 & 2870 Units were higher by 5% & 1% respectively than that in the FY 09-10. The Operating Profit of the Division at Rs. 12553.55 Lacs was higher by 39.08 % than that in the previous financial year. Despatch of almost the same number of wagons in both the financial years was due to delayed release of order by the customer.

The Divisions capability to manufacture almost all types of wagons and swiftly scale up production has enabled your Company to satisfactorily cater to its customers requirements of wagons and proactive steps to continually increase efficiency would help your Company retain place of prominence in the industry.

Demand for Wagons from Indian Railways is expected to be as per the announcement made in the Railway Budget, however, new Wagon Investment Scheme as and when announced by the Indian Railways would provide the much needed impetus to the orders from private sector customers.

As per the Railway Budget announced in February, 2011, plan outlay of Rs. 57,630 crores during 2011-12 is the highest ever and acquisition of 18000 Wagons is planned while freight loading capacity upped by 6.4% to 993 MT. The project of dedicated freight corridors is on track and many projects in PPP mode are envisaged. Rising oil prices would necessitate cost effective movement of cargo by railway network and lead to continuing firm demand for Wagons in future.

The number of wagon manufacturers in private sector being restricted to a few, the increased demand for the railway wagons would generate a tangible opportunity for the Company to pursue expansion of business, Indian Railways being the single largest buyer of Wagons.

Uncertainty as to timely availability of raw materials & components and rising costs are major challenges for Wagon Industry in India. Land required for the facilities is also a potent challenge. The dependence on one customer i.e. Indian Railways is a concern in as much as any change in the Government policy stands to directly impact the industry.

Average realization improved owing to production and dispatch of larger number of stainless steel wagons backed by cost optimization.

Rail Coaches (EMUs)

All the five rakes ordered by the Indian Railways have been delivered during the year under review from your Companys manufacturing facility equipped with the state of art machinery at the Uttarpara Unit known as Heavy Engineering Division (HED). HED is now equipped to turn out fairly large number of AC/EMUs per month and is expecting to bag a prestigious order in current financial year.

Metro Railways/Mass Rapid Transport System ("MRTS") in major cities across the country has become essential to cater to transportation needs of urban/semi urban commuters and the potential for self-propelled railway passenger vehicles such as EMUs, Diesel Multiple Units ("DMUs"), Main Line Electrical Multiple Units ("MEMUs") and metro coaches etc. is huge.

Unit 2010-11 2009-10 % Change

Production of Wagons No. 2867 2726 5.17

Sales No. 2870 2847 0.81

Average Realisation Rs.in Lacs/No. 20.97 18.06 16.11

Profit Before Interest and Tax Rs. in Lacs 12,553.55 9,025.90 39.08

Steel Castings

Bulk of Steel Castings produced by the Company is used for captive consumption in the manufacture of critical components such as bogies and couplers at competitive prices. External Sales of the Division at Rs.2252.45 lakhs and Profit before Interest and Tax at Rs 1278.57 lacs of the Division during the year under review were higher by 30.84% and 11.33% respectively than that in the previous financial year ended the 31st March, 2010. The Division is strategically of vital importance as the ready availability of castings ensures uninterrupted manufacture and timely delivery of the wagons.

With the increase in demand for Wagons of various types, the Steel Castings industry is booming since these provide the principal critical components for production of Wagons. The products manufactured require complex technology and have to meet specific design and other specifications spelt out by the discerning end users.

The number of small manufacturers in private sector abound while the large manufacturing units generally set up in-house Foundry for eliminating any interruption in production and maintain quality of the output meant for end users for which the castings are specially made. New avenues are being added for increased cargo movement by railways resulting in higher demand for the Wagons which in turn would require more and more steel castings.

The increase in Steel prices coupled with the measures taken by the Government for controlling inflation in the present time might affect profitability of the Segment.

Unit 2010-11 2009-10 % Change

Production of Steel Castings M.T. 12087 11110 8.79

Sales M.T. 12087* 11110** 8.79

Average Realisation Rs. in Lacs/MT 2.67 0.63 323.81

Profit Before Interest and Tax Rs. in Lacs 1,278.57 1,148.40 11.33

* Includes 11158 M.T. consumed internally for manufacture of Wagons ** Includes 8139 M.T. consumed internally for manufacture of Wagons

Heavy Earth Moving Machinery (HEMM)

The Division is being revamped to tap its real potential aimed at materially enhancing its contribution to the overall financial performance of your Company. During the financial year ended the 31st March, 2011 the Division earned operating profit of Rs.139.18 Lakhs against Rs.177.14 Lakhs in the previous financial year mainly due to lack of product options to the customers. With broad basing of the products of this division i.e. excavators and cranes of various capacities the operations of the division would receive a major boost and are expected to significantly improve the financials.

Unit 2010-11 2009-10 % Change

Production of Equipments No. 10 10 Nil

Sales No. 6 14 (57.14)

Average Realisation Rs. in Lacs/No. 146.91 155.35 (5.43)

Profit Before Interest and Tax Rs. in Lacs 139.18 177.14 (21.43)

Upswing in the Indian economy has boosted the demand for heavy engineering and mining equipments and the industry is set to witness sustained growth with the Government having embarked upon massive infrastructure projects.

The plans to set up new infrastructural facilities for expansion combined with the setting up of various projects for metro railways in a few major cities of India, construction of bridges, highways, airports, ports as well as housing construction, the demand for heavy engineering and mining equipments is also believed to take a long leap in the coming years.

Steel is principal raw material and volatility in its prices combined with rising cost of power and fuel are a cause of concern compounded by the impact of Governments policy measures to control inflation.

Special Projects- Steel Bridges

Income from sale of the Steel Bridges by the Company during the FY 10-11 at Rs. 1037.49 lakhs increased by about 108.91% over that in the FY 09-10. Production and sale of Bailey Bridges were higher by 130.77% and 107.14% respectively during the year under review. Further, your Company is expecting to get repeat order for NBC Shelters from the Ministry of Defence, Government of India during the current financial year.

Unit 2010-11 2009-10 % Change

Production of Steel Bridges M.T. 30 13 130.77

Sales M.T. 29 14 107.14

Average Realisation Rs. in Lacs/ M.T. 35.78 35.47 0.87

Bailey Bridges require superior radiographic quality fabrication technology and the manufacturers have to undergo tough procedures for obtaining license from the DGQA, Ministry of Defense, Government of India for such special products. Currently in this business, there are only four players in India of which two are in the public sector.

The Company is the largest manufacturer of Bailey Bridges in the country and emphasis on infrastructure upgradation by the Government presents reasonable growth potential, especially in the hilly terrain. Periodic upgradation in the defense capabilities of the country also demands induction of Bailey Bridges on the border road network.

Rigorous criteria set by the sensitive defence sector on selection of manufacturer are challenging apart from the consequences in the form of loss of reputation and liquidated damages in case of deviation in the actual performance.

Strategic and Joint Venture Agreements

Your Company has entered into strategic partnerships mentioned below for growth and expansion of its businesses:

Cimco Equity Holdings Private Limited (CEHPL)

The Company and Sponsor Group of Cimmco Limited (formerly Cimmco Birla Limited) (Cimmco) set up a Joint Venture with 50% stake each in CEHPL in 2008 for revival and funding of Cimmco. Cimmco is a subsidiary of CEHPL since 14th March, 2010 consequent to allotment of equity shares against the amount infused by CEHPL in Cimmco pursuant to the Scheme sanctioned by the Honble Board for Industrial and Financial Reconstruction (BIFR). Cimmcos net worth having turned positive, Cimmco has been discharged from the provisions of BIFR and SICA vide order dated December 07, 2010. Cimmco has secured order for wagons valued at about Rs. 250 crores and has started making profits.

Greysham and Co. Private Limited (Greysham)

The joint venture namely, Greysham and Co. Private Limited for manufacture of Air Brakes and Slack Adjusters, being the critical components for production of Wagons was set up by the Company on June 13, 2008. Greysham is treated as a subsidiary of the Company in terms of the provisions of the Companies Act, 1956 pursuant to the right of the Company to appoint majority of Directors on its Board.

Joint Venture Agreement with FreightCar America Inc. (FCA)

Pursuant to the Joint Venture Agreement (JV) entered into between the Company and FCA, a private limited company, Titagarh FreightCar Private Limited was incorporated in India (JVC) with the stakes of the Company and FCA being 49% and 51% respectively in equity capital of JVC, to develop, design, manufacture, service and distribute Aluminium Rail Cars, Gondolas and such other products as may be agreed from time to time between the partners of the JV.

Risks and Concerns

The Company is taking steps required for dealing with the following risks and areas of concern its operations are subject to:

Dependence on the Indian Railways

The Companys wagon manufacturing business is dependent upon the policies of Indian Railways and any change whether positive or adverse, has a direct impact on the Companys business.

Increase in the cost of raw materials and other inputs

(i) The Companys operations require substantial amounts of steel, scrap, specialized components including bogies, coupler sets, air brakes and CTR bearings and are exposed to volatility in prices and availability.

(ii) Steel based raw materials are principal inputs in manufacturing wagons, Bailey bridges and heavy engineering equipment. The cost of steel plates and steel beams are significantly dependent on the prices of steel prevalent in the International markets which are highly volatile and cyclical in nature. To the extent the

Company is not able to pass on such increase in the cost of steel such absorption stands to adversely affect the margins.

Risk of performance guarantee, product warranty and liquidated damages

Some of the contracts for supply involve warranty periods varying from 12-24 months against manufacturing defects notwithstanding the warranties on certain components extended by the respective third party suppliers, enforcement of these may not be always feasible. Further, certain contracts carry performance guarantee clause up to 10% of the contract value, valid for the duration of the warranty period, which can be invoked in the event of there being manufacturing defects that are not rectified by the Company to the customers satisfaction resulting in loss of reputation.

Risks associated with Organic growth of business

Rapid expansion of the operations undertaken by the Company inter alia, involves financial, managerial & other risks to precious resources in successful execution.

Management, revival and integration of the businesses acquired

(a) Transfer of the licence to manufacture air brakes and slack adjusters to Greysham and Co. Private Limited in which the Company has acquired strategic stake is subject to certain statutory approvals which are being actively pursued.

(b) Post successful revival of Cimmco Limited (Cimmco) through a joint venture company, Cimco Equity Holdings Pvt. Limited, integration of corporate practices thereat is under way.

(c) Flourish Securities and Finance Private Limited, a wholly owned subsidiary of the Company acquired in the FY 08-09 for arming itself with the flexibility of providing lease/finance option to its customers of Wagons is a Non Banking Financial Company (NBFC) registered with Reserve Bank of India and is subject to regulations prescribed by the said authority.

(d) With acquisition of the assets of Titagarh Wagons AFR, subsidiary in France enabling the Company to mark its presence in the International market, operations of the Unit thereat have been restarted while adjustments with the local work culture is ongoing.

Management, revival and integration of the above businesses with that of the Company pose a challenge and expose it to risk of resorting to debt financing besides affecting overall operational efficiency, profitability, growth and uncertainty of recouping the funds invested/committed.

The Company engaged the services of a professional agency to identify the risks the Companys businesses face and based on the report on risk management framework submitted by it, measures for mitigation of the risks are being reviewed periodically by the Audit Committee and management so as to evolve an appropriate risk management policy even as implementation of risk mitigation continues wherever necessary.

Internal Control System and Adequacy

The Company has system of internal controls and necessary checks and balances which are being strengthened so as to ensure

a. that its assets are safeguarded

b. that transactions are authorised, recorded and reported properly; and

c. that the accounting records are properly maintained and its financial statements are reliable.

The Company has appointed external firm of Chartered Accountants to conduct internal audit whose periodic reports are reviewed by the Audit Committee and management for bringing about possible improvement wherever necessary. This area is receiving managements attention.

Discussion on Financial Performance with respect to Operational Performance

Notwithstanding the factors referred to hereinabove impacting the operations, better manufacturing processes, improved productivity and focus on optimization of resource deployment resulted in reasonably improved performance viewed in the backdrop of the trends witnessed in the industries in which the Company operates.

Human Resources

A. Empowering the employees

The Company considers its organizational structure to be evolving consistently over time while continuing with its efforts to follow good HR practices. Adequate efforts of the staff and management personnel are directed on imparting continuous training to improve the management practices.

B. Industrial Relations

Industrial relations at all sites of the Company remained cordial.

C. No. of Employees:

Manpower employed as at March 31, 2011 was 936.

Directors

Shri Umesh Chowdhary, Vice Chairman & Director who had stepped down from the post of Managing Director of the Company for pursuing new and emerging opportunities for the Company has been appointed Vice Chairman & Managing Director w.e.f. October 1, 2010.

Shri Anoop Sethis nomination was withdrawn by 2i Capital PCC w.e.f. February 04, 2011 Shri Charles Magolske appointed as Additional (Independent) Director of the Company on 4th February, 2011, holds office upto the date of ensuing Annual General Meeting and is eligible for appointment.

Shri Aloke Mookherjea and Shri Abhas Sen, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-election.

The information prescribed by Clause 49 of the Listing Agreement in respect of the said Directors is given in the Corporate Governance Report annexed to and forming part of this Report.

Directors Responsibility Statement

The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended the March 31, 2011 have been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

- The Directors have selected and followed the accounting policies as described in the Schedule 22 (Notes on Accounts) and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss account of the Company for that period;

- Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- The Annual Accounts have been prepared on a going concern basis.

Auditors

Statutory Auditors & Auditors Report

Messrs. S R Batliboi & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and willing to continue, they have submitted the certificate pursuant to Section 224(1)(B) of the Companies Act, 1956 about their eligibility for reappointment.

As regards the observations in the Auditors Report, note no. 23 in the Schedule 22- Notes on Accounts is self explanatory and requires no further clarification by the Directors pursuant to Section 217 of the Companies Act, 1956. The Company is taking all action necessary in a time bound manner with regard to the points (vii) and (ix)(a) made by the Auditors in the Annexure to their Report and therefore, the same require no further clarification.

Cost Auditors

Messrs. D. Radhakrishnan & Co., Cost Accountants who carried out the cost audit of Steel Foundries during the financial year ended March 31, 2011 have been reappointed as the Cost Auditors for carrying out the Cost Audit of the Companys Steel Foundries for the financial year ending on the March 31, 2012.

Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31, 2011.

Subsidiary Companies

A statement containing in brief the details required under Section 212(3) of the Companies Act, 1956 and Circular No. 2/2011 issued by Ministry of Corporate Affairs dated February 8, 2011 regarding Flourish Securities and Finance Private Limited, Titagarh Singapore Pte. Limited, Singapore - wholly owned subsidiaries of the Company and Greysham and Co. Private Limited and Titagarh Wagons AFR, France, subsidiaries of the Company is included in the Annual Report. The Consolidated Financial Statement including the details of the Accounts of the subsidiaries is attached to the Annual Report and Accounts. A copy of the Annual Accounts of the subsidiaries will be made available upon request for inspection by any member of the Company/its subsidiaries at the registered office of the Company and those of respective subsidiary companies.

Titagarh Wagons AFR

The Companys subsidiary in France acquired as a going concern assets of a manufacturing Wagon/Rolling Stock unit has design, research & development as its core strengths with capacity to annually manufacture 5000 special & conventional types of Wagons at its facilities spread over 17 Hectares of land. The operations have been restarted at the Unit and 18 wagons despatched by March 31, 2011. Orders for further wagons are being pursued and operations of the Subsidiary are being streamlined. The Company has thus forayed into the international market to broaden its footprint.

Consolidated Financial Statements

In accordance with Accounting Standard 21-Consolidated Financial Statement of Accounts, Accounting Standard 23-Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27- Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of the financial statements received from Subsidiaries, Associates and Joint Venture Companies as approved by their respective Boards, form part of this Report & Accounts.

Promoter Group

In accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, details of Promoters, Promoter Group and its constituents are disclosed in a statement annexed to this Report. None of the Promoters have pledged any shares held by them in the Company.

Personnel

The particulars of employees pursuant to section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 are set out in the Annexure to this Report.

Industrial relations were cordial during the year under review. The Directors express appreciation of the efficient services rendered by the employees at all levels.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

Corporate Social Responsibility

Your Companys endeavors to contribute suitably to the society by being involved in a series of Community Welfare Programmes, directly and through philanthropic organizations continue. The first batch of 80 students at the campus of Industrial Training Institute (the "ITI") set up on your Companys land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) with access to the tools, equipments and machinery together with experienced skilled officers as faculty provided by the Company for imparting hands-on training has successfully passed the first module and they have been admitted to the three advanced modules viz. TIG/MIG Welding, Structural Welding and Pressure Vessel & Pipe Welding.

Investment of about Rs. 750 Lacs including Rs. 500 Lacs on construction of building and Rs. 250 Lacs of outlay in machinery, equipments and other facilities is committed by the State and land for ITI has been allotted by Khardah Municipality, near Khardah Railway Station and your Companys contribution is by way of providing full support for training of about 180 students and offer them need based employment at the Companys facilities.

The second batch of 105 students has been admitted to the preliminary module – BBBT during the current year. Your Company is also in dialogue with Directorate of Technical Education for approval of industry specific course in specialized module on

"Welding Technology for Fabrication of Railway Transportation Systems" to give the opportunity to the students of Advanced Module to train and be equipped with the skills for securing immediate employment. The ITI once operational fully on the land allotted, would also cater to the requirement of the industrial units in the adjoining area for skilled workmen.

Listing

The Companys Equity Shares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE) and the listing fees for the financial year ending March 31, 2012 have been duly paid.

Forward looking Statement

The statements in this report describing the Companys policy, strategy, projections, estimation and expectations may appear forward looking statements within the meaning of applicable securities, laws or regulations. These statements are based on certain assumptions and expectations of future events and the actual results could materially differ from those expressly mentioned in this Report or implied for various factors including those mentioned in the paragraph "Risks and Concerns" herein above and subsequent developments, information or events.

Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board Kolkata, Umesh Chowdhary

May 24, 2011 Vice Chairman & Managing Director


Mar 31, 2010

The Directors present their Thirteenth Annual Report and Audited Accounts for the year ended the 31st March, 2010.

Financials

Your Companys financial performance was as follows:

Rs./Lakhs

2009-10 2008-09

Turnover 55422.32 68587.66

Profit Before Depreciation and Tax 10327.30 10069.09

Less: Depreciation 443.58 286.65

Profit Before Tax 9883.72 9782.44

Less: Provision For Taxation 3346.67 3304.06

Profit After Taxation 6537.05 6478.38

Balance Brought Forward from Last Account 13864.37 9114.80

Less: Debit Balances of Profit & Loss Account 843.61 - of Transferor Companies upon amalga- mation

Amount available for Appropriation 19557.81 15593.18

Appropriations

Transfer to General Reserve 700.00 650.00

Dividend on Equity 940.45 922.10

Tax on Dividend 156.20 1796.65 156.71 1728.81

Balance Carried to Balance Sheet 17761.16 13864.37

Global production and trade showed a degree of normalcy in the second half of 2009 and though the recovery was off to a reasonable start, it proceeded at different speeds in various regions and was quite balanced in almost all sectors of Indian economy. Growth forecast for the country is encouraging owing to growing internal demand, however, reasonable impact of sluggish growth in the advanced countries coupled with the uncertainties caused by vulnerability of finance sector in some economies of the world, in particular is not ruled out.

The Companys financial performance during the year was significantly affected by uneven flow of orders for Wagons from the private sector buyers due to economic downturn witnessed in the first half of the year under review and continuing impact of withdrawal of Wagon Investment Scheme by the Indian Railways. Owing to supply of Wagons to the Indian Railways in larger volume than that in the previous financial year which combined with the operational efficiency in manufacture and despatch of a different type of Wagons enabled the Company to recover and in fact end the financial year 2009-10 (FY 09-10) with a marginal increase in the bottomline over the last financial year (FY 08-09).

The financials for the FY 09-10 include those of Titagarh Steels Limited (TSL) and Titagarh Biotec Private Limited (TBPL), consequent upon their merger with the Company under a Scheme of Amalgamation sanctioned by the Honle High Court, Calcutta w.e.f. 01/04/2009 being the Appointed Date and hence are not comparable with those of the FY 08-09. Authorised Capital of the Company post merger increased to Rs.148 Crores consisting of 9,60,00,000 Equity Shares of Rs..10/- each aggregating Rs. 96 Crores and 5,00,00,000 Preference Shares of Rs.10/- each aggregating Rs. 50 Crores and Paid up Equity Capital of the Company enhanced to Rs. 18,80,90,690/- comprising 1,88,09,069 Equity Shares of Rs.10/- each fully paid by allotment of 3,66,954 Equity Shares of Rs.10/- each to the shareholders of TSL on 16/01/2010 whereas the entire equity shares held by the Company in TBPL (wholly owned subsidiary of the Company ) were cancelled.

With proactive management approach, your Company was able to successfully tide over the challenges posed by drying up of demand from Wagon buyers in the private sector and achieve Earning Per Share (EPS) of Rs. 34.75 for the FY 09-10 even on enhanced equity capital as compared to EPS of Rs. 35.21 during the FY 08-09.

Dividend

The Board of Directors has recommended a dividend of 50% i.e. Rs. 5/- per equity share on 1,88,09,069 equity shares of Rs. 10/- each fully paid up subject to approval of the members, by appropriation of Rs.1096.65 Lakhs (including Rs.156.20 Lakhs being tax on dividend) and Rs. 700 Lakhs transferred to General Reserve from the profit for the Financial Year Ended 31st March, 2010.

Operations

The Companys overall performance during the FY 09-10 has been reasonably satisfactory measured on all the key parameters and its pursuit for growth through organic and inorganic routes continues while retaining its prominence in the industry.

Wagons

Wagons segment continued to be the chief contributor to the total revenues and in line with the previous financial year, about 90% of the Companys total Operating Income (PBDIT) during FY 09-10 was generated by this Division. Production of wagons manufactured and despatched during the year under review at 2726 & 2847 Units were lower by 24% & 22.74% respectively than that in the FY 08-09. While the Net Sales at Rs. 498.05 Lakhs were down by about 23.5%, Operating Income declined marginally by about 3.1% mainly due to reduced offtake by the Wagon buyers in the private sector.

The Divisions sharp focus on use of innovative processes to achieve the desired quality with high efficiency enabled it to satisfactorily cater to its customers requirements for various types of Wagons and continuing efforts in this direction would keep it on track for remaining prominent in the industry.

Demand for Wagons from Indian Railways is expected to be firm, however, delay in release of orders is a cause for concern. It is hoped that an improved Wagon Investment Scheme would be announced by the Indian Railways soon so as to give the much required fillip to demand from the private sector buyers.

Steel Castings

Combined production of Steel Castings during the year under review went up by ten times consequent on amalgamation of Titagarh Steels Limited (TSL) with the Company and over three-fourths of the volume was consumed internally for manufacture of Wagons. Besides the Segments share in the Operating Income grew emphatically during FY 09-10 by about 125% compared to that in the FY 08-09, the captive Steel foundries are strategically vital to the Company for maintaining access to the critical components such as bogies and couplers at competitive prices.

The Company has become the largest manufacturer of Casnub Bogies in India since merger of TSL became effective and besides FATA Aluminium Automatic moulding line and successfully commissioned CNC Machine for machining of Coco Bogies. Thus the technical upgradation and augmentation of capacities auger well for the Division and are expected to contribute accordingly to the Companys performance in future.

Heavy Earth Moving Machinery (HEMM)

The marginal drop of about 4% in Net Sales at Rs. 2595.46 Lakhs during the FY 09-10 as against Rs. 2708.39 Lakhs in FY 08-09 notwithstanding, the Divisions Operating Income increased by 32% with manufacture and sale of machines of different specifications. The Company is continuously monitoring the trends of the user industries and is fully focused on improving the financials of this Division in future by revamping its facilities appropriately.

Special Projects- Steel Bridges

Sales of Steel Bridges at Rs. 496.61 Lakhs during the FY 09-10 were higher by about 99% over that in FY 08-09 and though a marginal portion of the Companys total income came from this Segment, owing to the established manufacturing capability in this space the Company occupies a prestigious position in the industry given the importance of these projects in the infrastructural requirement of specific regions of the country. Having duly executed its first order in the previous year, the Division expects to get a repeat order for NBC Shelters from the Ministry of Defence, Government of India.

Rail Coach Division (EMU)

First rake of EMU has been delivered to the Indian Railways from the Companys manufacturing facility equipped with the state of art machinery at the Uttarpara Unit known as Heavy Engineering Division (HED). With initially targeted capacity of manufacturing two rakes of EMUs per month, each rake consisting of nine EMU coaches, the Division is fully geared to turn out larger number of AC/EMUs.

The Government has drawn out plans for developing Metro Railways/Mass Rapid Transport System ("MRTS") in major cities across the country. This would increase the total demand for self-propelled railway passenger vehicles such as EMUs, Diesel Multiple Units ("DMUs"), Main Line Electrical Multiple Units ("MEMUs") and metro coaches etc. which augurs well for the Segment.

Modernization and Expansion of the existing facilities

The modernization and expansion of the existing facilities at Titagarh and Uttarpara, in the State of West Bengal as per the objects stated in the Prospectus issued at the time of Initial Public Offering of equity shares made in March, 2008 has been completed as reported in the interim financial results published by the Company as per the Clause 41 of Listing Agreements with the Stock Exchanges.

Further, the Company is pursuing additions to the manufacturing facilities aimed at balancing its product portfolio and consolidation of its current position as one of the largest Wagon manufacturers in the countrys private sector. Accordingly, new shed for metal processing for fabrication required in the production of EMUs is nearing completion and work on prototype of Double Lane Bailey Bridges has commenced at its Uttarpara Unit.

Utilisation of the proceeds of IPO

In accordance with the Listing Guidelines, the utilization of Issue proceeds is disclosed in the Financial Results published periodically and the inter se/intra activities deployment of funds released from the Companys decision to use internal resources for remaining construction of Corporate & Design and Research Centre, into General Corporate purpose for which even though the Board is fully authorised, as a matter of abundant precaution, the same as detailed in the Notice of ensuing Annual General Meeting is placed for approval of the members thereat.

Strategic and Joint Venture Agreements

Your Company has entered into strategic partnerships mentioned below for growth and expansion of its businesses:

Greysham and Co. Private Limited (Greysham)

Air Brakes and Slack Adjusters are critical components for production of Wagons by the Company and to ensure dedicated supply thereof, a joint venture namely, Greysham and Co. Private Limited has been set up. By virtue of the Companys right to appoint majority of Directors on its Board, Greysham is treated as a subsidiary of the Company in terms of the provisions of the Companies Act, 1956.

Cimco Equity Holdings Private Limited (CEHPL)

The Company and Sponsor Group of Cimmco Limited (formerly Cimmco Birla Limited) (CIMMCO) set up a Joint Venture with 50% stake each in CEHPL formed in 2008 for revival of CIMMCO and appropriate funding thereof pursuant to a draft Rehabilitation Scheme filed by CIMMCO with the Honble Board for Industrial and Financial Reconstruction (BIFR). The Company infused Rs. 48.50 Crores for revival of CIMMCO through CEHPL and upon sanction of the Scheme of Rehabilitation of CIMMCO by the Honble BIFR in March, 2010, consequent to allotment of equity shares against the said amount infused by the Company through CEHPL; CIMMCO has become subsidiary of CEHPL on and from 14/03/2010. Implementation of the BIFR Sanctioned Scheme by CIMMCO is progressing for rehabilitation of CIMMCO.

Joint Venture Agreement with FreightCar America Inc. (FCA)

Pursuant to the Joint Venture Agreement (JV) entered into between the Company and FCA, a private limited company, ‘Titagarh FreightCar Private Limited, was incorporated in India (JVC) in November, 2008 with the stakes of the Company and FCA being 49% and 51% respectively in equity capital of JVC, to develop, design, manufacture, service and distribute Aluminium Rail Cars, Gondolas and such other products as may be agreed from time to time between the partners of the JV. Efforts are being made to acquire land for the manufacturing facility while other activities of the project are progressing as per schedule.

Acquisition of Wagon/Rolling Stock Manufacturing Unit in France

Your Company has acquired as a going concern Wagon/Rolling Stock Manufacturing unit in France through a Special Purpose Vehicle (SPV) set up there for the purpose. The unit with design, research & development being its core strengths has capacity to annually manufacture 5000 special & conventional types of Wagons at its facilities spread over 17 Hectares of land and cost of acquisition is Euro 1.92 million (Rs. 1114 Lakhs approximately) with further investment envisaged being approximately Euro 13 million including some portion thereof in the equity of SPV and balance, if so required in long term working capital facilities.

The acquisition paves the way for your Companys foray into international market and in addition to the inherent synergies would enable building of presence overseas and is expected to contribute to overall growth of the Companys business in future.

Directors

Shri Umesh Chowdhary, Vice Chairman & Managing Director relinquished the office of Managing Director on 23/09/2009, continuing as Vice Chairman and Director to pursue new and emerging opportunities for the Company. Shri J P Chowdhary, Chairman cum Managing Director designated as Executive Chairman was also appointed Chief Executive Officer (CEO) pursuant to Clause 49 of the Listing Agreement.

Shri Nandan Bhattacharya, Shri Manoj Mohanka and Shri Umesh Chowdhary, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-election. The information prescribed by Clause 49 of the Listing Agreement in respect of the said Directors is given in the Corporate Governance Report annexed to and forming part of this Report.

Directors Responsibility Statement

The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended the 31st March, 2010 have been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

- The Directors have selected and followed the accounting policies as described in the Schedule 22 (Notes on Accounts) and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss account of the Company for that period;

- Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- The Annual Accounts have been prepared on a going concern basis.

Auditors

Statutory Auditors & Auditors Report

Messrs. S R Batliboi & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and willing to continue, have submitted the certificate pursuant to Section 224(1)(B) of the Companies Act, 1956 about their eligibility for reappointment.

As regards the observations in the Auditors Report, notes 20 and 22 in the Schedule 22- Notes on Accounts are self explanatory and require no further clarification by the Directors pursuant to Section 217 of the Companies Act, 1956. The Company is taking all action necessary in a time bound manner in regard to the points (vii), (ix)(a) and (ix)(b) made by the Auditors in the Annexure to their Report and therefore, the same require no further clarification.

Internal Auditors

Deloitte Consulting India Private Limited has been engaged as the Internal Auditors for conducting the internal audit aimed at strengthening the internal checks and balances and reappointed Internal Auditors for the financial year ending 31st March, 2011.

Cost Auditors

Messrs. D. Radhakrishnan & Co., Cost Accountants who carried out the cost audit of Steel Foundry during the financial year ended 31st March, 2010 have been reappointed as the Cost Auditors for carrying out the Cost Audit of the Companys Steel Foundries (addition of the other Steel Foundry is pursuant to amalgamation of TSL with the Company) for the financial year ending on the 31st March, 2011.

Fixed Deposits

The Company did not accept any deposits during the financial year ended the 31st March, 2010.

Subsidiary Companies

Flourish Securities and Finance Private Limited, Titagarh Singapore Pte. Limited - wholly owned subsidiaries of the Company and Greysham and Co. Private Limited, a subsidiary, are operating in their respective areas and a statement containing in brief their financial details is included in the Annual Report. The Company has been exempted by the Central Government under Section 212(8) of the Companies Act, 1956 from attaching the Balance Sheet as at 31st March, 2010, Profit & Loss Account for the year ended that date and Reports of Directors and Auditors thereon of the said subsidiaries, to the Companys Annual Report & Accounts. However, a copy each thereof will be made available upon request for inspection by any member of the Company/its subsidiaries at the registered office of the Company and the same would also be available on the website of the Company.

Consolidated Financial Statements

In accordance with Accounting Standard 21-Consolidated Financial Statements, Accounting Standard 23-Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27- Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of the financial statements received from Subsidiaries, Associates and Joint Venture Companies as approved by their respective Boards, form part of this Report & Accounts.

Management Discussion and Analysis & Corporate Governance Report

The Management Discussion & Analysis and Corporate Governance Report along with a certificate on its compliance in accordance with the Clause 49 of Listing Agreements with the Stock Exchanges are annexed to and form part of this Report.

Promoter Group

In accordance with the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997, details of Promoters, Promoter Group and its constituents are disclosed in a statement annexed to this Report. None of the Promoters have pledged any shares held by them in the Company.

Personnel

The particulars of employees pursuant to section 217 (2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure to this Report.

Industrial relations were cordial during the year under review. The Directors express appreciation of the efficient services rendered by the employees at all levels.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

Corporate Social Responsibility

Your Companys endeavors to contribute suitably to the society by being involved in a series of Community Welfare Programmes, directly and through philanthropic organizations continue. Recently the Company has joined hands with West Bengal State Government to set up an Industrial Training Institute (the "ITI") under Private Public Partnership (PPP) in Barrackpore, North 24 Parganas. Investment of about Rs. 750 Lakhs including Rs. 500 Lakhs on construction of building and Rs. 250 Lakhs of outlay in machinery, equipments and other facilities is envisaged by the State whereas your Companys contribution is by way of providing full support for training of about 160 students and consider offering need based employment to them.

Pending allotment of land by the State Government, a campus of the ITI has been set up on your Companys land at Titagarh plant, situate in Barrackpore, North 24 Parganas where the first batch of about 100 students is being imparted training in Fabrication by the personnel and faculties appointed by your Company. Upon successful completion of apprenticeship and acquisition of the requisite skills, your Company will offer regular employment to some of these apprentices in its plants. The ITI once operational fully, shall also cater to the requirement of the industrial units in the adjoining area for skilled workmen.

Listing

The Companys Equity Shares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE) and the listing fees for the financial year ending the 31st March, 2011 have been duly paid.

Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board

J P Chowdhary

Executive Chairman & CEO

Kolkata,

July 9, 2010


Mar 31, 2008

The Directors are pleased to present the Eleventh Annual Report and Audited Accounts for the year ended 31st March, 2008.

Financials

Your Companys financial performance was as follows:

Equity Shares of Rs.10/- each and 20,00,000 Preference Shares of Rs. 10/- each. 16,79,390 Fully Convertible Preference Shares of Rs.10/- each allotted to GE Capital International (Mauritius) were converted into equal number of equity shares of Rs.10/- each fully paid up on 1st February, 2008 thereby increasing the Issued, Subscribed and Paid up Capital of the Company to Rs.16,37,40,040/- divided into 1,63,74,004 Equity Shares of

Rs. Lacs 200/-08 2006-07

Profit Before Interest, Depreciation and Tax 8787.52 4701.40 Add/Less: Interest (net) (682.90) 30.75 Gross Profit for the year 9470.42 4670.65 Less: Depreciation 214.69 190.38 Profit Before Tax 9255.73 4480.27 Less: Provision for CurrentTax 3256.48 1600.27 Fringe Benefit Tax 28.87 24.36 3285.35 1624.63 Less: Deferred Tax (86.15)3199.20(63.05) 1561.58 Profit After Taxation 6056.53 2918.69 Balance Brought Forward from Last Account 4747.08 2393.50 Amount available for Appropriation 10803.61 5312.19

Appropriations General Reserve 610.00 230.00 Interim Dividend - 293.89 Dividend on Equity 922.11 - Tax on Dividend 156.71 1688.82 41.22 565.11 Balance Carried to Balance Sheet 9114.79 4747.08

The financial year 200/-08 was a milestone of achievements in the Companys existence. Operating Profit of the Company during the year under review increased by about 87% and Turnover and Profit before Tax rose by 101% & 107 respectively as compared to the previous financial year. Over the last five years Turnover and Profit before Tax have shown compounded annual growth rate (CAGR) of 61% & 69% respectively providing impetus to the Company to scale even greater heights in future.

The authorised Capital of the Company was increased from Rs. 20 Crores to Rs. 22 Crores divided into 2,00,00,000 Rs.10/-each fully paid up

Initial Public Offering (IPO) of 20,68,111 Equity Shares (net Issue) of the Company of Rs 10/- each at the price of Rs 540;- each fully paid up including premium of Rs.530 - per share received excellent response and the Issued Subscribed and Paid up Capital of the Company increased to Rs. 18,44,21,150/- (Rupees Eighteen Crores Forty tour Lacs Twenty one Thousand One Hundred Fifty) only dividea into 1,84.42,115 Equity Shares of Rs.10/- each fully paid up.

The Companys Equity Shares have been granted listing and

trading approval by Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) effective from 21st April, 2008.

Dividend

The Board of Directors is pleased to recommend a dividend of 50% on the expanded equity capital base subject to approval of the members by appropriation of Rs. 1078.82 Lakhs from the profit of the Financial Year ended 31st Marcn, 2008.

Operations

The Companys overall performance registered commendable growth on all the parameters with a record increase of about 101% in Turnover and a 107% rise in Profit before Tax, placing the Company in high growth trajectory and establishing its prominence in the industry.

Wagons Division

Wagons segment accounted for about 91 % of the Companys total Operating Profit. Production of wagons manufactured during the year under review was higher by 63% over that in the previous financial year and the units sold were up by 67%, bulk of which were ordered by the Indian Railways who continue to be the largest single customer owing to your Companys track record of satisfactory performance. With innovative and aggressive marketing strategy, the Company also added satisfactory number of customers for Wagons in the private sector who contributed significantly to the performance during the last financial year.

Heavy Earth Moving & Mining (HEMM) Division

The Divisions operating profit recorded substantial improvement compared to that in the last fiscal with higher productivity and expanded customer base. The volume of production and Sales value achieved by the HEMM division during the year under review increased by 43% and 140% respectively as compared to the last financial year.

Steel Castings

Production of Steel Castings was up by 49% and bulk of the total quantity was consumed internally for manufacture of Wagons. The Steel foundry at the Companys Uttarpara unit has been certified as a Class "A" foundry by the RDSO, and the in-house production capabilities enable it to maintain access to the critical components such as bogies and couplers at competitive prices. The segment contributes significantly to the overall growth of the Companys business by ensuring availability of important components on time.

Special Projects -Steel Bridges

The Sales volume grew by 43% and in value terms sales of steel bridges were higher by about 86% than that in the last financial year. Substantial rise in the input costs notwithstanding, the Divisions performance during the year under review was satisfactorv.

Expansion, Upgradation & Growth

The Company has planned commencing from the current financial year, organic and inorganic growth in the operations through expansion and UDgradation ot its existing facilities unded bv the proceeds of IPO and internal accruals which combined with the expected increase in demand for the entire range of products manufactured by the Company due to ongoing development in infrastructure undertaken by the country, make the outlook for the current vear very encouraging.

EMU manufacturing facility at Uttarpara unit

An EMU manufacturing facility at the Companys Uttarpara unit is being set up at a total capital outlay of about Rs.1,874 Lakhs with a targeted capacity of manufacturing two rakes of EMUs per month, each rake consisting of nine EMU coaches. The design for the production of EMU coaches would be as per the standard design provided by the Indian Railways.

Modernize and Expand existing facilities at Titagarh and Uttarpara units

In order to modernize and expand the existing facilities to equip the Titagarh and Uttarpara Units to cater to the growing demand for Wagons, Heavy Earth Moving & Mining Equipments and Steel Castings about Rs. 1,008 Lakhs and Rs, 876 Lakhs have been respectively set aside from the IPO proceeds for the programme which includes installation of 132 KVA power sub-station at Heavy Engineering Division (HED) at Uttarpara and certain machinery at HEMM Unit to achieve cost efficiencies.

Axle Machining and Wheelset Assembly Facility

To combat the shortage of wheelsets, a critical component for wagon manufacturing, an Axle Machining and Wheelset Assembly facility is be set up at the Uttarpara Unit at an approximate capital expenditure of Rs. 1,293 Lakhs.

Corporate Office and Research and Development Centre

Designing being a vital part of the Wagon manufacturing process, setting up of a corporate office and a research and development centre in Kolkata over an approximate area of 30000 square feet is contemplated at an estimated cost of Rs. 700 Lakhs.

Strategic Acquisition/Investments

The Companys growth strategy involves adding complimentary range of products to enhance its product portfolio by acquisition of full or partial stakes in other companies with synergy in operations for maximizing shareholder value and long-term growth potential of the Company. Investment of about Rs.3,500

Lakhs has been committed in the proposed acquisition of Cimmco Birla Company Limited which upon revival is expected to afford substantially enlarged scale of operations and the benefits of economies entailed.

Strategic and Joint Venture Agreements

Your Company has entered into strategic partnership with the following:

Cooperation and Funding Agreement with JPMorgan Mauritius Holdings Limited (JPM)

In terms of the Agreement with JPM, an existing shareholder of the Company, JPM and the Company have agreed to cooperate with each other to develop a scheme of revival and rehabilitation for Cimmco Birla Limited (CBL), acceptable to both parties and also to the BIFR. As per the agreement, if an acceptable scheme is agreed to by both parties and is sanctioned by the BIFR under Section 18 of the SICA, the Company may invest up to Rs. 3,500 Lakhs in CBL to acquire equity or options convertible into equity for 51% of CBL.

Joint Venture Agreement with FreightCar America Inc.(FCA)

The agreement has been entered into with FCA to jointly promote and incorporate a private limited company in India subject to certain conditions precedent, including the prior approval of the Foreign Investment Promotion Board, ("FCA JVC") to develop, design, manufacture, service and distribute aluminium rail cars and such other wagon products as may be agreed from time to time between the parties. Pursuant to the Joint Venture Agreement, the Company and FCA shall hold 49% and 51% of the equity shares of the FCA JVC, respectively.

Corporate Governance & Management Discussion and Analysis

The Management Discussion & Analysis and Corporate Governance Report along with a certificate on its compliance are annexed to and form part of this Report.

Directors

Messrs. Aloke Mookherjea and Abhas Sen, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-election.

Directors Responsibility Statement

The Directors state that:

Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended 31st March, 2008 have been followed in preparation of the said accounts.

The Directors have followed the accounting policies as described in the Schedule 22 (Notes on Accounts) and applied them consistently to facilitate true and fair view of the state of affairs of the Company.

Sufficient care has been taken to maintain accounting records of the Company.

The statement of accounts has been prepared on a going concern basis.

Auditors

Messrs. S. R. Batliboi & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of this Annual General Meeting and have submitted the certificate pursuant to Section 224(1 )(B) of the Companies Act, 1956 about their eligibility for reappointment.

Promoter Group

In accordance with the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997, details of Promoter, Promoter Group and its constituents are disclosed in a statement annexed to this Report.

Personnel

The particulars of employees pursuant to Section 217 (2A) of the.Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure to this Report.

Industrial relations were cordial during the year under review. The Directors express appreciation of the efficient services rendered by the employees.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

Subsidiary Company

The requisite disclosures in accordance with Section 212 of the Companies Act, 1956 in respect of the Companys only subsidiary, Titagarh Biotec Private Limited are annexed to and form part of the Report.

Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board J. P. Chowdhary Kolkata, 28th April, 2008 Executive Chairman

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