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Directors Report of Titagarh Rail Systems Ltd.

Mar 31, 2023

The Directors present their Twenty-Sixth Annual Report on the business and operations of Titagarh Rail Systems Limited (formerly Titagarh Wagons Limited) (''the Company'' or ''TRSL'') along with the Audited Financial Statements, for the financial year ended March 31,2023. The consolidated performance of Titagarh Group (the Company and its subsidiary) has appropriately been referred to in this Report.

At the outset we are pleased to report that to better reflect your Company''s presence in the entire gamut of operations across the rail systems, the Board decided to change the Company''s name to Titagarh Rail Systems Limited which upon approval of the authorities concerned became effective from May 19, 2023.

1. Profit, Retention & Dividend

Titagarh Group''s financial performance during the financial year ended March 31, 2023 was as follows:

(Rs. in lakhs

Standalone

Consolidated

Particulars

2022-23

2021-22

2022-23

2021-22

Revenue from operations

2,78,052.90

1,49,551.20

2,77,959.04

1,46,750.42

Other income

4,398.39

1,806.20

4,258.30

1,772.84

Total Income (TI)

2,82,451.29

1,51,357.40

2,82,217.34

1,48,523.26

Earnings before interest, tax, depreciation and amortisation (EBIDTA)

30,829.78

18,641.47

30,607.35

18,264.13

Less: Finance Cost

8,074.67

5,726.79

8,074.67

5,726.80

Less: Depreciation and amortization expenses

2,250.35

1,838.34

2,250.35

1,838.34

Profit/(Loss) before exceptional items & tax

20,504.76

11,076.34

20,282.33

10,698.99

Share of Profit/(Loss) of Joint Ventures

-

-

(1,272.63)

-

Exceptional items

4,627.55

4,802.46

-

Profit/(Loss) before tax

15,877.21

6,273.88

19,009.70

10,698.99

Tax Expenses/(Benefits)

5,540.57

2,925.11

5,546.37

2,919.33

Profit/(Loss) for the year after tax from continuing operations

10,336.64

3,348.77

13,463.33

7,779.66

Loss from discontinued operations (net of tax)

-

-

-891.70

(7,848.21)

Profit/(Loss) for the year after tax

10,336.64

3,348.77

12,571.63

(68.55)

Other Comprehensive Income/(Loss) (net of tax)

(1,020.12)

570.59

(999.70)

572.48

Total Comprehensive Income for the year

9,316.52

3,919.36

11,571.93

503.93

2. Performance and outlook

The Company''s performance during the Financial Year ended March 31, 2023 (FY 22-23) on a standalone basis was outstanding, with all key performance matrix recording remarkable improvement as compared to the previous financial year (FY 21-22). During the last quarter of the year under review, considering the changes in the overall business activities and internal re-organisation, the operating segments were re-assessed, and the "Shipbuilding, Bridges and Defence" (SBD) segment was merged with freight rolling stock. Accordingly, the operating segments of the Company have been identified as "Freight Rail Systems" (FRS) (which includes SBD) and "Passenger Rail Systems" (PRS).

On a stand-alone level, the revenue from operations went up by Rs. 1,28,501.70 Lakhs registering an increase of 85.92% and EBIDTA of Rs. 30,829.78 lakhs in FY 22-23 was higher by 65.38% as compared to Rs.18,641.47 lakhs in FY 21-22, Profit after tax, climbed from Rs. 3,348.77 lakhs in FY 21-22 to Rs. 10,336.64 lakhs in FY 22-23, an impressive increase of 208.67%.

On a consolidated basis, the Group''s total income increased from Rs. 1,48,523.26 lakhs in FY 21-22 to Rs. 2,82,217.34 lakhs

in FY 22-23 i.e. an increase of 90.02%; the EBIDTA from Rs. 18,264.13 lakhs in FY 21-22 to Rs. 30,607.35 lakhs in FY 22-23 recorded an increase of 67.58% and Profit after tax from continuing operations for FY 22-23 increased to Rs. 13,463.33 Lakhs as compared to Rs. 7,779.66 Lakhs in FY 21-22, being an improvement of 73.06%.

FY 22-23 has been a remarkable year for the Company with the unprecedented increase in the order book pursuant to the prestigious orders secured by the Company. Some of the major developments/events are mentioned below.

• The consortium of your Company with Bharat Heavy Electricals Limited (BHEL) emerged as the 2nd Lowest Bidder (L2) for “Manufacturing cum Maintenance of Vande Bharat Trainsets including Up-gradation of the Government Manufacturing Units & Trainset Depots” and was awarded an order for 80 nos. Vande Bharat trainsets and comprehensive maintenance of the same for 35 years in the mega tender of Indian Railways. The BHEL-TRSL consortium was the only “AatmaNirbhar” consortium that participated in the tender process. A special purpose vehicle (SPV) will be formed between the consortium partners to carry out the maintenance of the trains.

It is a matter of great pride for the Company to be a part of the Government''s Make in India policy.

• In the other mega tender of Indian Railways, the consortium of your Company with Ramkrishna Forgings Limited was the Lowest Bidder (L1) for “Manufacturing and Supply of Forged Wheels” under the “AatmaNirbhar Bharat” initiative of the Ministry of Railways, Government of India. The Consortium shall establish a state-of-the-art manufacturing facility in India for forged wheel production for supply of approximately 1.6 million wheel discs for different rolling stocks of Indian Railways over a period of 20 years at about 80,000 wheels per annum.

• Launching of the maiden warship (Fast Patrol Vessel), designed & manufactured in collaboration with GRSE, for the Indian Coast Guard took place in May, 2022.

• Ocean-Going Passenger & Cargo Ferry Vessel for the Cooperative Republic of Guyana was launched, marking a significant milestone as it represents the Company''s maiden shipbuilding venture into the export market. The vessel has been meticulously constructed through collaborative efforts with GRSE, showcasing your Company''s commitment to excellence and international trade prospects.

• The 3rd of July, 2022 marked your Company''s 25 years of operational existence, and the Silver Jubilee was celebrated at Uttarpara facility, in the gracious presence of Hon''ble Chief Minister, Smt. Mamata Banerjee along with several other dignitaries of Govt. of West Bengal. The grand ceremony saw the inauguration of laying the foundation stone for the new Stainless Steel Coach manufacturing unit and the Shipyard at Falta SEZ.

• The Hon''ble National Company Law Tribunal (NCLT), Kolkata Bench vide its Order dated 4th November, 2022 sanctioned the amalgamation of Titagarh Bridges and International Private Limited (TBIPL), a wholly owned subsidiary with the Company, with 1st April, 2021 as the Appointed Date.

Your Company is enhancing capacities at Titagarh and Bharatpur facilities to 1000 Wagons per month which is expected to be achieved in the next 3-4 months by creating additional capacity as well as streamlining of processes including their automation. Further, capacity creation for backward integration of key components for wagon manufacturing including CRF, Bogie components, air brake pipes availability of which is impacted due to increased demand in the industry, at Titagarh plant is also being undertaken to attain substantial improvements in supply chain and enhance productivity.

The continued resolve of the Government of India to expand and improve the railway infrastructure under the initiatives such as “AtmaNirbhar Bharat” and “Make in India” is of immense support to your Company''s growth. Your Company has committed to capex of about Rs. 650 crore over the next two years on capacity/infrastructure building and with consistent focus on resource optimization as well as thrust on augmentation of execution of the orders practiced by the management, the outlook for the current year is encouraging as is also indicated by the following important developments:

• Your Company received a Letter of Acceptance (LOA) dated 27th June, 2023 from the Gujarat Metro Rail Corporation (GMRC) Limited for “Design, Manufacture, Supply, Testing, Commissioning and Training of 72 nos. of Standard Gauge Cars for Surat Metro Rail Phase-I Project”. The order value is about INR 857 crore and execution would start 76 weeks after signing the contract and is scheduled to be completed in 132 weeks thereafter. This was followed by another LOA dated 29.08.23 for 30 Standard Gauge Cars for Surat Metro Rail Phase- II Project valued at about INR 350 crore.

• It is a matter of great satisfaction that your Company''s order book at Rs. 27,890 crore on a standalone basis as at June 30, 2023 is the highest ever since its incorporation. The performance of the Company on a consolidated basis also improved reasonably well with the major highlight being the award of a Framework contract valued at Euro 732.54 million for 33 trainsets, to the consortium of Titagarh Firema S.p.A. (''TFA''), the associate in Italy with Skoda Transportation SA.

• Your Company undertook fund raising by way of Preferential Issue of 76,00,000 equity shares to Smallcap World Fund Inc., a part of Capital Group, one of the largest financial investors in the world, at a price of Rs. 380/- per share aggregating Rs. 288.80 crore for its working capital requirements and general corporate purpose. The allotment of shares to the said investor was made on July 7, 2023 and all necessary formalities including listing and trading approvals of BSE and NSE have been completed.

3. Management Discussion and Analysis

(a) Overall Review

The overall performance of the Company during the financial year 2022-23 was outstanding and the order book of Rs. 27,546 Crores as at March 31, 2023, which is approximately 17 times its FY 2021-22 order book, provides growth visibility and represents the largest order book value in the Company''s history and marks its transformational journey in terms of the Company''s size of business.

(b) Segment Review

During the year, the Directors have identified the following reportable segments:

a) Freight Rail Systems - Consists of manufacturing of Wagons, Loco Shells, Bogies, Couplers and its components. The "Shipbuilding, Bridges and Defence" (SBD) segment was merged with Freight Rail Systems, during the year.

b) Passenger Rail Systems - Consists of designing and manufacturing of Metro, Passenger Coaches, EMUs, Train Sets, Mono Rail, Propulsion equipment, Traction Motors and its components.

The segment wise performance is given below:

(Rs. in Lakhs

Standalone

Consolidated

Particulars

2022-23

2021-22

Change %

2022-23

2021-22

Change %

Segment Revenue (Gross)

Freight Rail Systems

2,25,093.47

1,27,653.79

76.33%

2,25,093.47

1,27,307.51

76.81%

Passenger Rail Systems

52,959.43

21,897.41

141.85%

52,865.57

19,442.91

171.90%

Total

2,78,052.90

1,49,551.20

85.92%

2,77,959.04

1,46,750.42

89.41%

Segment Results

Freight Rail Systems

23,570.92

17,302.47

36.23%

23,570.94

17,302.47

36.23%

Passenger Rail Systems

2,198.14

440.81

398.66%

2,198.13

614.03

257.98%

Total

25,769.06

17,743.28

45.23%

25,769.07

17,916.50

43.83%

Total Profit / (Loss) before Tax from continuing operations

15,877.21

6,273.88

153.07%

13,463.33

7,779.66

73.06%

Total Profit / (Loss) after Tax from discontinued operations

-891.70

-7848.21

-88.64%

Total Profit / (Loss) after Tax

10,336.64

3,348.77

208.67%

12,571.63

-68.55

18439.36%

During the year under review, the revenue from Freight Rail Systems segment (FRS) is higher by 76% and PBDT by 36% as compared to the previous financial year. About 82% of the Company''s standalone revenue has come from this segment. The Company has the largest installed capacity of 8400 wagons per annum with state of the art facility at its Plant in Titagarh, W.B. The Company continues to be the market leader in this business segment and for the last few years has been awarded more than 50% of total orders placed by Indian Railways (‘IR’) making it the largest supplier of wagons.

The FRS received the largest ever order in the history of the Company as well as of Indian Railway (IR) for manufacture and supply of 24,177 Wagons valued at over Rs. 7,800 Crore in May, 2022 which is required to be executed over a period of 39 months. The execution of this order has been undertaken with the augmented infrastructure and capacity,

keeping the focus on optimisation of production costs and efficiencies. IR is modernising and upgrading the infrastructure at a remarkable speed and therefore, the demand for wagons is expected to remain buoyant on a sustainable basis in the coming years.

Under the Passenger Rail Systems segment (PRS), the Pune Metro Project is a very important milestone for the Company. The Company along with its associate: TFA, had signed the first contract for design, development, manufacture and supply of 34 trains of 3 coaches each for Pune Metro (Maharashtra Metro Rail Corporation Limited). The delivery of the Coaches to Pune Metro has already commenced and the trains supplied have been put into passenger service.

The following is pertinent in regard to the other significant developments during the FY 22-23 reported hereinbefore:

• The Company''s entry into highspeed trains segment i.e. the Vande Bharat trains is considered to be a pathbreaking development. The Company''s consortium with BHEL for “Manufacturing cum Maintenance of Vande Bharat Trainsets including Up-gradation of the Government Manufacturing Units & Trainset Depots” for 80 Vande Bharat trainsets and comprehensive maintenance of the same for 35 years is valued approximately at Rs. 23,100 crores. The BHEL-TRSL consortium was the only AatmaNirbhar one that participated in the tender announced by the IR.

• The consortium of Ramkrishna Forgings Limited (RKFL) and Titagarh has been awarded contract for “Manufacturing and Supply of Forged Wheels” pursuant to long term agreement under AatmaNirbhar Bharat” by Indian Railways and is setting up forged wheel manufacturing unit- a greenfield project with a capacity to manufacture 2 lakh forged wheels per annum. IR will ensure guaranteed off-take of 80,000 wheels per annum over a period of 20 years. The approximate value of this order is Rs.12,600 crores.

• A contract has been executed with CRRC, the Chinese Railway Rolling Stock Corporation and Bangalore Metro Rail Corporation Limited (BMRC). BMRC had placed an order on CRRC to supply 216 metro coaches, however due to inability of CRRC to meet the conditions of “Make in India” the contract was not moving forward. The Company was able to step in and sign a tripartite contract to produce these coaches entirely at its plant in Uttarpara, West Bengal. With this, the Company has forayed into the stainless-steel coach manufacturing. The technical expertise/know-how is being provided by CRRC and the ability to manufacture stainless steel coaches would make Titagarh the first and only company in the passenger rolling stock to have facilities and capabilities to produce every type of passenger coaches viz. EMU and MEMU of carbon steel, aluminum body coaches for Pune Metro project and stainless steel coaches for Bangalore Metro.

Metro coaches is one segment in which the Company foresees a huge opportunity as the tier-I and tier-II cities are all going for metro as the most suitable urban rapid transport system.

The Company''s performance during FY 2022-23 has been record breaking as it reported its highest ever quarterly revenue of Rs. 766 Crores during 3rd quarter of FY 23, which represents a growth of 101% as compared to last quarter of FY 2021-22. During the year under review, the Company has attained major successes through the supply of its first traction motor from the Company''s state-of-the-art facility in Uttarpara, paving the way for the potentially a large market which can be used for the manufacture of metro cars..

“Make in India” initiative coupled with launch of Dedicated Freight Corridor (DFC), metro projects across all major Indian cities is expected to boost wagon and electrical train manufacturing industry in the country. The DFC wagons are expected to add to Company''s revenues in near future.

The Company had earlier collaborated with ABB India Limited (ABB) to design, develop and manufacture state of the art 3 phase IGBT based propulsion systems for EMU/MEMU being manufactured at the Company''s plant in Uttarpara, West Bengal, with certain components being supplied by ABB. Apart from significant market potential for the propulsion business, it is also strategically important for train production business. In the propulsion tenders, your Company is well placed and is expecting additional orders. The trial production of the traction motors and the traction converters has already commenced at the Company''s facilities and the regular production expected to start during current year would be another important milestone as it would mark the Company''s move into a high technology area of propulsion electronics.

The efforts are also on to develop an export market for both the freight wagons and transit train business. International certification and application for accreditation of services have already been completed for wider acceptance of its products globally. Efforts are being made to take the presence of the Company beyond Europe through the Italian associate engaged in transit train manufacturing. The Indian and Italian operations would also be futher synergised to

cover the global market for both the freight wagons and transit business.

(c) Overseas Operating Associate: Titagarh Firema SpA, Italy (TFA)

The financial year ended March 31,2023 witnessed a series of positive events as follows:

1. Investment agreement with Invitalia - An agreement with Agenzia nazionale per l''attrazione degli Investimenti e lo sviluppo di impresa S.p.A a company/ agency owned by the Government of Italy was executed with the shareholders of TFA on 8th September, 2022 pursuant whereto the Government of Italy through its investment arm, Invitalia and Hawk Eye, a private equity firm based in UAE, have invested a total of €14.5 million as primary infusion into TFA resulting in their stake of 44% in the equity capital of TFA and €5.5 million brought in by the promoter shareholders, which in aggregate increased the equity of TFA from €13 million to €33 million which has resulted in not only improving the liquidity position, but also the ratios of the company . The investment by Invitalia is to support inter alia in the process of industrial growth of the company. With this capital infusion, TFA ceased to be a subsidiary of TRSL and post investment, the board of TFA has also been restructured.

2. Order Book: TFA was awarded a framework contract valued at €732.54 million for 33 trainsets, in consortium (RTI) with the international company SKODA Transportation. Subsequently, the first contract for 70 carriages for a value of €138 million has been signed in June, 2023 The contract also includes the assignment of the service and maintenance business for an amount of €221.99 million (51% share). The order book thus amounts to €1,393.09 million with the award of this contract.

3. Completion of end-of-life contracts (including legacy contracts) - During the financial year 2022-23 majority of the legacy contracts, which were inherited at the time of the acquisition of Firema Trasporti S.p.A in TFA, and some other onerous contracts causing substantial losses and adversely affecting liquidity over the years, were completed.

4. Integration of the sites and rationalization of the workforce - In order to optimise costs and increase production efficiency, TFA has implemented consolidation of all operational activities in a single site in Caserta coupled with the simultaneous optimisation of the areas dedicated to the different production lines: passenger carriages and freight wagons. Such integration and rationalising of the manpower will improve the hourly rate and make TFA more competitive going forward.

The acquisition of TFA has enabled the Company to enter into the passenger rolling stock business in India and win the contract of Pune Metro for 102 coaches of which, 9 coaches were manufactured and supplied from Italy and the balance 93 coaches are being produced in India. TRSL is able to qualify in most of the Indian tenders for passenger rolling stock on its own, however in very large tenders in domestic market, TRSL has and will continue to participate in consortium with TFA. In terms of the technology & designs available, the design centres of Italy and India work under close coordination with each other. This makes TRSL the only company in India to have the technology and the capability to produce both stainless steel as well as aluminum metro coaches and TRSL intends to have capacity of about 250 cars in the first phase in India, to be enhanced gradually to 840 cars going ahead.

Overall, FY 2023-24 is expected to benefit from the positive impact on overall fixed cost containment, efficiency and gross contract margins owing to the steps taken in FY 2022-23 toward improvement, as mentioned hereinabove.

(d) Industry overview of Business Segments Freight Rolling Stock

The railway network in India spans an extensive track length of 126,366 km and includes 7,335 stations. The Union Budget 2023 has allocated a record capital outlay of $29 billion to the Indian Railways, aiming to construct new trains, railway tracks, enhance passenger facilities, and upgrade the infrastructure to a world-class standard. In the fiscal year 2022-23, a remarkable achievement of laying 5,243 km of tracks was accomplished, surpassing the previous year''s achievement of 2,909 km. This milestone also marked the highest-ever daily track laying rate of 14.4 km.

During the financial year 2022-23, a record-breaking loading of 1,512 million tonnes (MT) of freight was achieved, surpassing the previous year''s loading of 1,418 MT. The freight transport unit NTKM (Net Tonne Kilometre) witnessed an impressive growth rate of 10%, surpassing 900 billion NTKMs for the first time, reaching 903 billion NTKMs in FY23, up from 820 billion NTKMs the previous year. The Indian Railways reported a record revenue of Rs 2.40 lakh crore in the fiscal year 2022-23, reflecting a growth of over 25% over the previous year. Freight revenue also experienced significant growth, reaching Rs 1.62 lakh crore, marking an increase of almost 15%.

The implementation of the National Rail Plan (NRP) is set to bring about a major transformation in the freight operation of the Indian Railways. The NRP aims to enhance capacity and efficiency throughout the rail system, projecting a four to six-fold increase in freight traffic in the coming years. This will involve expanding the fleet and capacity to meet the NRP goals through infrastructure augmentation and improved operations. With the objective of contributing approximately 1.5% to the country''s GDP, the railway sector in India aims to support 45% of the modal freight share of the economy through robust infrastructure. In order to bolster freight transportation, the government has accelerated the development of Dedicated Freight Corridors (DFC) along crucial high-density routes. Additionally, the Indian Railway has implemented a comprehensive set of strategies to augment its market share in the freight segment. These measures encompass a variety of tariff rationalization and freight incentive schemes.

Outlook

The Indian Rail Freight Industry is experiencing significant growth and improvements, with ambitious plans and increased investment aimed at enhancing capacity, efficiency, and sustainability. Annual freight target is expected to increase from 1400 m tonnes to 3000m tonnes by 2027 implying an increase in the wagon fleet from current ~336,900 to ~500,000 by 2027. Additionally, plans are underway to develop 100 PM Gati Shakti Cargo terminals for multimodal logistics within the next three years. The wagon industry, which previously faced challenges due to under-utilization of capacities, is expected to witness improvement with substantial orders from Indian Railways and the private sector. With the commissioning of dedicated freight corridors and a goal to increase the share of freight transport through railways, the Indian Railways plans to procure 90,000 wagons by 2025 which is the largest in history and it is nearly 5 times the number of wagons procured by railways in a year.

Passenger Rolling Stock

Indian Railways'' passenger revenue has achieved an unprecedented growth of 61% in FY23 reaching Rs 63,300 crore. The fiscal year 2022-23 witnessed the highest-ever commissioning of new lines and doubling/multi-tracking covering 5243 km. Additionally, 6565 km of track were electrified with an investment of Rs 6657 crore, driving the Railways closer to the goal of achieving 100% electrification in the current fiscal year. Substantial investment amounting to Rs 44,291 crore was made to procure modern rolling stock, enhancing passenger comfort, and augmenting the Railways'' loading capacity.

In the current time, the significance of urban mass transit systems has become paramount, primarily due to the exponential population growth and rapid urbanization, which have stretched the existing transportation networks to their limits. Recognizing the need for an effective solution, the government has turned to Mass Rapid Transport Systems (MRTS) like Metro, known for their cleanliness, reliability, speed, and efficiency. Acknowledging the numerous benefits offered by Metro railways, there has been a notable upsurge in the development of Metro services in many cities. As of April 2023, almost 860 kilometers of metro lines are operational, spanning 20 cities. Furthermore, the pace of progress has accelerated significantly, with a remarkable shift from an average monthly commissioning of 0.68 kilometers of metro lines before May 2014 to an impressive 5.6 km per month as of April 2023.

In 2019, the Indian Railways introduced India''s first indigenous Semi High-Speed train, known as Vande Bharat Express. As of July 2023, a total of 50 Vande Bharat trains have been incorporated into the railway network. The government has set forth an ambitious vision to transform the train transport ecosystem by launching Vande Bharat sleeper coaches, metro, suburban, and freight services throughout the country. Over the next few years, there is a plan to manufacture 8,000 Vande Bharat coaches, signifying a significant overhaul of the Indian Railways'' fleet and an increased inclusion of these semi-high-speed trainsets.

Outlook

The concerted efforts towards developing urban mass transit systems and modernizing the Indian Railways have paved the way for improved passenger experiences and increased transportation efficiency across the country. The significant progress in metro services, introduction of Vande Bharat Express and strategic investments in rail infrastructure bodes well for the future development and sustainability of India''s transportation networks.

(e) Discussion on Financial Performance with respect to Operational Performance

The Company has taken various operational measures viz. consolidation of the different products in line with the plant capacities which resulted in improved efficiency by turning the plant into a centre of excellence for the particular product and incurring capital expenditure of around Rs. 100 crore in last two years for plant upgradation and making the

production facilities state of the art, helping Company to increase productivity and achieve cost efficiency. All plants of the Company are ISO 9001: 2015 and ISO 14001:2015 certified. Continuing focus of the management is consistently on undertaking cost rationalization, better manufacturing processes, improved productivity and optimization of resource for improvement in performance aimed at achieving results better than the trend witnessed in the industries in which the Company operates. Viewed in this backdrop, the Company''s performance for the year under review is considered to be satisfactory and in line with the circumstances prevailing.

(f) Overall outlook for the current year

In addition to the healthy order book as on date, the Company''s focussed approach on fixed cost reduction in terms of consolidating the common functions and reducing duplication of manpower, consolidating its prominent position in the Rolling Stock business coupled with the access to the technology for Metro Coaches and diversified product portfolio, strategy of adopting innovative ways to cater to its customers and preparedness to seize opportunity in products/ projects for Metro and defence establishment of India make the outlook for the current year encouraging.

(g) Key Financial Ratios

As stipulated in the Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), as amended, the Company reports as follows:

(a) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios or sector specific ratios, along with detailed explanations therefor:

Sr. No.

Key Financial Ratios

2022-23

2021-22

Difference (%)

1

Debtors Turnover Ratio (days)

31.37

40.16

-21.90%

2

Inventory Turnover Ratio (days)

65.67

86.87

-24.41%

3

Interest Coverage Ratio (times)

3.82

3.26

17.29%

4

Current Ratio (times)

1.22

1.22

0.00%

5

Debt Equity Ratio

0.22

0.15

44.37%

6

Operating Profit Margin (%)

11.09%

12.46%

-11.05%

7

Net Profit Margin (%)

3.72%

2.24%

66.13%

Notes on significant changes in financial ratios where change is > 25%:

• Debt Equity Ratio: Variation is attributable to increase in borrowings during the year

• Net Profit Margin: Variation is attributable to increase in turnover and profitability during the year

(b)

details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Key Financial Ratios

2022-23

2021-22

Difference (%)

Return on Net Worth (%)

- Before considering exceptional item

- After considering exceptional item

21.29%

16.49%

12.73%

7.21%

67.21%

128.58%

Notes on significant changes in financial ratios where change is > 25%: The increase is primarily due to increase in earnings as compared to the increase in volume of operations.

4. Dividend

The Board has recommended a dividend of 25% i.e. INR 0.50 per equity share of face value of Rs. 2/- each (previous year nil) for the financial year ended March 31, 2023, for the approval of the shareholders at the 26th Annual General Meeting of the Company. In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. As a result, the Company will pay the dividend after deducting applicable tax, if any at the source. The total dividend on equity shares for FY 2022-23, if approved by the shareholders, would in aggregate be about Rs. 6.36 Crores.

A Dividend Distribution Policy pursuant to Regulation 43A of the (Listing Regulations) which requires the top 1,000 listed companies (by market capitalisation) to formulate the same, has been adopted by the Board. The said Dividend Distribution Policy can be accessed on the website of the Company at https://titagarh.in/policies-and-codes.

5. Transfer to reserves

Your Directors do not propose to transfer any amount to the general reserve for the year under review.

6. Change in Nature of Business

The product portfolio of the Company has over the years undergone change and from being a Wagons manufacturer, other products viz. Freight Rolling Stock comprising railway wagons, components, shipbuilding, bridges & defence, and Passenger Rolling Stock consisting of Coaches (EMUs/MEMUs) including Metro Coaches, Transit & Propulsion systems and others are the two segments of the Company respectively named “Freight Rail Systems” and “Passenger Rail Systems.” Thus your Company is now present in the entire gamut of rail ecosystem.

7. Share Capital

As on March 31, 2023, the issued, subscribed and paid-up equity share capital of the Company stands at Rs. 23,91,42,178/ - comprising of 11,95,71,089 equity shares of Rs. 2/- each. During the year under review, the Company has not issued any shares or convertible securities or shares with differential voting rights nor granted stock options or sweat equity. During the current year, the paid-up capital of the Company has increased to Rs. 25,43,42,178/- upon allotment of 76,00,000 equity shares of Rs. 2/- each on preferential basis.

The Board in its meeting held on 17th March, 2023 approved the Titagarh Wagons Limited Employee Stock Options Scheme 2023, which was approved by the shareholders by way of Postal Ballot on 26th April, 2023. The Company has also received In-principle approval from Stock Exchanges.

8. Change in name of the Company

The name of the Company was changed to Titagarh Rail Systems Limited in line with the expanded business portfolio in rail systems space and to better reflect the Company''s increasing presence across the entire gamut of operations in the rail ecosystem. Fresh Certificate of incorporation pursuant to change of name was issued by the Registrar of Companies on 19th May, 2023.

9. Awards & Achievements

The Company received several notable recognitions during the year:

• Shri Umesh Chowdhary, VC&MD, Titagarh Group has been recognized as one of the Most Promising Business Leaders of Asia 22-23.

• The Company was featured among the NextGen Leaders of India in the esteemed platform "Ubharta Bharat," celebrating a remarkable 25-year journey of India''s transformative progress.

• The Company was invited to participate in the 4th Edition Rail Analysis Innovation & Excellence Summit 2023 as a VIP Panellist. The event was graced by the presence of Shri Prithish Chowdhary.

• The "Next Generation Mobile Nodes" built by Titagarh, were showcased during the 74th Republic Day Parade 2023, held at Kartavya Path, New Delhi, India.

10. Credit Rating

In August 2022, CRISIL Ratings has revised its outlook on long-term bank facilities of the Company to ''Positive'' from ''Stable'' while reaffirming the rating at ''CRISIL A-''.

11. Material Changes and Commitments after the balance sheet date:

No material changes and commitments have occurred since the date of close of the financial year, to which the financial statements relate, till the date of this report, which might affect the financial position of the Company.

12. Investor Education and Protection Fund (IEPF)

As stipulated by the applicable provisions of the Companies Act, 2013 (''the Act'') read with IEPF (Accounting, Audit, Transfer & Refund) Rules, 2016, as amended (''the IEPF Rules'') all unpaid or unclaimed dividend required to be transferred by the Company to the IEPF has been/ shall be transferred, details whereof are provided on the Company''s website: www.titagarh.in.

Pursuant to the provisions of Section 124(6) of the Act read with the IEPF Rules, all the shares on which dividends remain unpaid or unclaimed for a period of seven consecutive years or more shall be transferred to the demat account of the IEPF Authority (''IEPF Account'') as notified by the Ministry of Corporate Affairs. In accordance with the said provisions, the Company had executed and submitted the necessary documents for transfer of 9,486 equity shares of Rs. 2/- each, to the IEPF account, on 18th November, 2022, in respect of which dividend had not been claimed by the members for seven consecutive years or more as on the cut-off date, i.e. 22nd October, 2022. The details of all shares transferred to the IEPF Account are

uploaded on the Company''s website.

The Company identified 200 shareholders holding 9,953 equity shares in aggregate, who have not claimed their dividend consecutively since FY 2015-16 and therefore shares held by them were liable to be transferred to the IEPF Account on due date i.e. 15th April, 2023. The Company sent a communication to all concerned with information regarding transfer of their shares and reminder for taking appropriate action for claiming the dividend unclaimed on their shares and also published a Notice in the leading newspaper both in English and Vernacular language on 14th January, 2023, which was also uploaded at the website of the Company and the Stock Exchanges. Subsequently, the Company has executed and submitted necessary documents for transfer of 9,953 equity shares of Rs. 2/- each, to the IEPF account, on 15th May, 2023, in respect of which dividend had not been claimed by the members for seven consecutive years or more as on the cut-off date, i.e. 15th April, 2023.

13. Risk Management, Risks and Concerns

A Risk Management Policy to identify and assess the key risk areas, monitor mitigation measures and report compliance which is in line with the provisions of the Act and Listing Regulations has been adopted by the Company. Based on a review, major elements of risks have been identified and are being monitored for effective and timely mitigation.

The Company has laid down governance procedures around information, communication and risk reporting to inform the Risk Management Committee, the Audit Committee and the Board of Directors about risk assessment, mitigation effectiveness evaluation and related outcome and status.

The Company has a Risk Management Committee of the Board of Directors of the Company under the Chairmanship of Shri Atul Joshi, Independent Director of the Company, to assist the Audit Committee and the Board of Directors in overseeing the Company''s risk management processes and controls.

The strategic risks forming part of the Enterprise Risk Management process are also aligned with the audit universe, to the extent seen appropriate/ relevant.

14. Subsidiary Companies, Associates and Joint Ventures

A report containing the details required under Section 134 of the Companies Act, 2013 (''the Act'') read with Rule 8(1) of the Companies (Accounts) Rules, 2014 in respect of performance and financial position for the financial year ended March 31, 2023, of subsidiary: Titagarh Singapore Pte. Ltd., Singapore; associate: Titagarh Firema SpA, Italy (TFA) and Joint Venture Company: Titagarh Mermec 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 this Annual Report.

During the year under review, Titagarh Firema SpA, Italy, ceased to be the subsidiary of the Company w.e.f. 8th September, 2022. Further, Titagarh Bridges and International Private Limited, a wholly owned subsidiary has been amalgamated with the Company as per Scheme of Amalgamation approved by the Hon''ble National Company Law Tribunal (NCLT), Kolkata Bench vide its Order dated 26th October, 2022, with 1st April, 2021 as the Appointed Date.

Your Company in consortium with Ramkrishna Forgings Limited (RKFL) has incorporated a Joint Venture Company (JVC) in the name and style of “Ramkrishna Titagarh Rail Wheels Limited” (RTRWL) on 9th June, 2023, for execution of the Project -“Manufacturing and Supply of Forged Wheels” under long term Agreement under AatmaNirbhar Bharat. Further, a Shareholders'' Agreement has been executed on 2nd August, 2023 for operation and management of RTRWL.

The Board of Directors at its meeting held on 17th March, 2023 has approved incorporation of a private limited company in India in joint venture with Titagarh Firema SpA, Italy, associate of the Company, in the name and style of “Titagarh Firema Engineering Services Private Limited” or any other name as approved by the Registrar of Companies, for the purpose of engineering and design related services to support the Transit & Propulsion business. The Board also approved investment by the Company of maximum amount of Rs. 5 Crore in the equity of the proposed joint venture company.

15. 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. The Company has been informed that the said loan, guarantee and security are proposed to be utilised by each recipient for its general business/corporate purposes.

16. 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.

17. Copy of the Annual Return

Pursuant to the provisions of Section 92(3) of the Act read with Section 134(3)(a), the copy of the annual return for the financial year ended March 31, 2023, is available on the website of the Company www.titagarh.in(https://titagarh.in/report/ annual-report) and the same can be viewed by the members and stakeholders of the Company.

18. Related Party Transactions

All Related Party Transactions (RPTs) are entered into by the Company 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 Listing Regulations and based thereon final approval of the Board is obtained. The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act and as mentioned in form AOC-2 of the Rules prescribed in the Companies (Accounts) Rules, 2014 under the Act are annexed hereto and marked as Annexure DR-2.

19. Number of Board Meetings

The Board of Directors met Eleven (11) times during the financial year ended March 31, 2023 as per the details provided in the Corporate Governance Report forming part of Annual Report.

20. Composition of Audit Committee

The Audit Committee constituted by the Board has Shri Atul Joshi as Chairman and Shri Manoj Mohanka and Shri Sunirmal Talukdar as the members. Further details are provided in the Corporate Governance Report forming part of Annual Report.

During the year all recommendations made by the Audit Committee were accepted by the Board.

21. Directors and Key Managerial Personnel

The shareholders at their 25th Annual General Meeting held on 15th September, 2022 approved the following appointment/ re-appointment:

- the re-appointment of Shri Atul Joshi (DIN: 03557435) as Independent Director to hold office for a second term of five years w.e.f. 24th January, 2023.

- the appointment of Shri Prithish Chowdhary as Whole-time Director designated as Director (Marketing & Business Development) for a period of five years w.e.f. 13th August, 2022

Based on the recommendation of Nomination and Remuneration Committee (“NRC”), Shri Saket Kandoi was appointed as Director (Freight Rolling Stock) w.e.f. 17th March, 2023

During the year under review, Shri Sudipta Mukherjee, Director (Freight Operations) resigned w.e.f. 17th March, 2023. The Board places on record its sincere appreciation for the services rendered by Shri Sudipta Mukherjee as Director (Operations) of the Company.

In terms of Section 149 of the Act and Listing Regulations, Shri Atul Joshi, Shri Manoj Mohanka, Shri Sunirmal Talukdar, Shri Sushil Kumar Roongta, Shri Krishan Kumar Jalan and Ms Nayantara Palchoudhuri are the Independent Directors of the Company as on the date of this report

Based on the recommendation of the NRC and the Audit Committee, the Board of Directors of the Company had approved:

• Assignment of additional role of Chief Business and Risk Officer to Mr. Anil Kumar Agarwal w.e.f. 18th November, 2022 and;

• Appointed Shri Saurav Singhania as Jt. CFO and designated him Group Finance Controller & Jt. CFO w.e.f. 18th November, 2022.

The Board has pursuant to the recommendation of NRC at its meeting held on 17th March, 2023 appointed Shri Dinesh Arya as the Company Secretary and Chief Compliance Officer (Key Managerial Personnel) w.e.f. 17th March, 2023.

Shri Ravi Prakash Mundhra who was appointed Company Secretary on 13th August, 2022 resigned w.e.f. 17th March, 2023.

Smt. Rashmi Chowdhary, Non-Executive Director, retires by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

To strengthen the composition of the Board and based on recommendations of the NRC, the Board of Directors of the Company at its meeting held on 4th September, 2023 has approved appointment of Shri B P Rao (DIN: 01705080) and Shri Debanjan Mandal (DIN: 00469622), as Additional Directors (Category-Independent) of the Company w.e.f. 4th September, 2023. Proposal for their appointment is being placed before the shareholders for their approval at the ensuing Annual General Meeting.

The information prescribed by Listing Regulations in respect of the above-named Directors is given in the Notice of 26th Annual General Meeting.

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

In compliance with the Act and Listing Regulations, the performance evaluation of the Board, Committees and Individual Directors was carried out during the FY 2022-23 as per the details set out in Corporate Governance Report.

23. Declaration by Independent Directors

Declarations pursuant to the Sections 164 and 149(6) of the Act and Listing Regulations 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. In the opinion of the Board, the Independent Directors hold highest standard of integrity and possess the requisite qualifications, experience, expertise and proficiency.

24. Remuneration Policy and remuneration

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

25. Corporate Governance Report

The Company has complied with the corporate governance requirements under the Act and Listing Regulations. 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.

26. Business Responsibility and Sustainability Report (BRSR)

In compliance with Regulation 34(2)(f) of Listing Regulations, the Company has included Business Responsibility Report, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective.

27. Internal Control System

The Company has system of internal controls and necessary checks and balances 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.

28. Vigil Mechanism / Whistle Blower Policy.

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

29. Internal Complaints Committee

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the further details of which are given in the Corporate Governance Report. No complaint was lodged with the Committee during the financial year 2022-23.

30. 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 31,2023 had been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

• The directors had 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 of the Company for that period;

• The directors had taken proper and sufficient care for the maintenance of 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 directors had prepared the Annual Accounts on a going concern basis; and

• The directors had laid down internal financial controls (IFC) to be followed by the Company and that such IFC are adequate and operating effectively.

• The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31. Statutory Auditor & Auditor''s Report

The shareholders of the Company at the Twenty Fifth Annual General Meeting held on 15th September, 2022, approved the re-appointment of Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (FRN 304026E/E-300009) as the Statutory Auditors of the Company for a second term of five consecutive years to hold the office till the conclusion of Thirtieth Annual General Meeting to be held in the year 2027. The Auditor''s report on standalone financial statements for FY 2022-23 does not contain any qualifications, reservations, or adverse remarks.

32. Consolidated Financial Statements

In accordance with IND-AS 24 issued by the Institute of Chartered Accountants of India, consolidated financial statements prepared on the basis of financial statements received from subsidiary company as approved by its Board, form part of this Report & Accounts.

The Auditors'' Report on the consolidated financial statement for the year ended 31st March, 2023 (CFS) does not contain any qualification, reservation or adverse remark.

33. Cost Auditors

M R Vyas & Associates, 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 2023-24 subject 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 ended March 31, 2023 would be filed as stipulated by the applicable provisions of law. The Company is making and maintaining the accounts and cost records as specified by the Central Government under the provisions of Section 148(1) of the Act.

34. Secretarial Auditor

Secretarial Audit has been conducted by Shri Sumantra Sinha, Practicing Company Secretary appointed by the Board and their report is annexed hereto and marked as Annexure DR-3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

35. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act, 2013 during the financial year ended March 31, 2023.

36. Particulars of Remuneration of Directors/KMP/Employees

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 (the Rules) is annexed and marked as Annexure DR-4. The information pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report, is readily available for inspection by the members at the Company''s Registered Office between 10.30 A.M. to 1 P.M. on all working days upto the date of ensuing AGM. Should any member be interested in obtaining a copy including through email ([email protected]), may write to the Company Secretary at the Company''s Registered office.

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, 2023 was 744.

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

A statement pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-5.

38. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2023 pursuant to the provisions of Section 135 of the Act and rules made thereunder is annexed to this Board''s Report and marked as Annexure DR-6.

Apart from the above, the Company makes, inter alia, donations to the charitable institutions directly and through philanthropic organisations engaged in providing medical, education and other reliefs to the economically weaker sections of the society. Industrial Training Institute (the “ITI”) set up on the Company''s land at Titagarh plant situated 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. A large number of students in various batches have passed and significant number of them are engaged in various jobs in the industry. The ITI has been recognised by the State Government as one of the best in the country and it caters to the requirement of skilled workmen by industrial units.

39. 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, 2024 have been duly paid.

40. Compliance with Secretarial Standards

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

41. Other Disclosures

• The Auditors of the Company have not reported any instances of fraud committed in the Company by its officers or employees as specified under section 143(12) of the Act, details of which needs to be mentioned in this Report.

• There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

• Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof - There are no instances of onetime settlement during the financial year under review.

42. 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.

43. Acknowledgement

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

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Kolkata J P Chowdhary

September 04, 2023 Executive Chairman


Mar 31, 2018

Dear Shareholders,

The Directors hereby present their Twenty First Annual Report on the business and operations of the Company (‘the Company’ or ‘TWL’) along with the audited financial statements, for the financial year ended March 31, 2018. The consolidated performance of Titagarh Group (the Company and its subsidiaries) has been referred to wherever so required.

1. Profit, Retention & Dividend

Titagarh Group’s financial performance during the financial year ended March 31, 2018 was follows:

Rs. in lakhs

Standalone

Consolidated

Particulars

2017-18

2016-17

2017-18

2016-17

Revenue from operations

31,652.05

37,033.60

127,143.84

173,918.93

Other income

2,328.20

2,431.36

2,987.86

2,901.78

Total Income (TI)

33,980.25

39,464.96

130,131.70

176,820.71

Earnings before interest, tax depreciation and amortisation (EBIDTA)

2,082.86

4,225.87

(6,686.54)

13,708.70

Less: FinanceCost

864.45

438.44

4,405.99

3,130.89

Less: Depreciation and amortization expenses

1,297.20

1,156.02

5,083.59

5,152.44

(Loss)/ Profit before exceptional items & tax

(78.79)

2,631.41

(16,176.11)

5,425.37

Share of Loss of a joint venture

-

32.36

5.80

Exceptional items

-

509.12

449.91

Profit / (Loss) before tax

(78.79)

2,631.41

(16,717.59)

4,969.66

Tax Expenses

370.33

703.04

1,994.16

2,226.59

Profit / (Loss) for the year after tax

291.54

1,928.37

(14,723.43)

2,743.07

Other Comprehensive Income

(3.66)

(13.76)

3,526.74

(1224.66)

Total Comprehensive Income for the year

287.88

1,914.61

(11,196.69)

1,518.41

2. Performance and Outlook

During the Financial Year 2017-18 the Company’s performance on a standalone basis declined sharply as compared to the previous financial year due mainly to delay in release of Wagons procurement order by the Indian Railways (IR), the largest customer of your Company.

Your Company launched the first 1000-Ton ship for Indian Navy before the contractual delivery period, on the 17th May, 2018. While the execution of contracts for the other ship for Indian Navy and two coastal research vessels for Ministry of Earth Sciences is progressing as per schedule, your Company is pursuing more orders for this vertical.

The merger of Titagarh Agrico Private Limited-a wholly owned subsidiary of the Company with Cimmco Limited, a subsidiary of the Company, was sanctioned by the Hon’ble National Company Law Tribunal, Kolkata by its Order dated October 16, 2017 and has been given effect to and is reflected in the relevant numbers appearing hereinabove.

On a consolidated basis, the Group’s performance suffered a major setback due to one-time provision required to be made in respect of certain legacy contracts that were inherited at the time of acquisition of the business from Firema Trasporti SpA, Italy (FAS); and technical problem witnessed in the bogies fitted into the freight cars supplied in the past affecting production in France, respectively in overseas subsidiaries in Italy and France.

Indian Railways released the bulk procurement order for 1147 Wagons worth Rs. 270.18 crore in the end of December, 2017 and the Company also secured orders from private sector customers and the execution of these orders has commenced in the first quarter of the current financial year after completing the necessary formalities.

Construction of ships under the orders in hand is progressing and more business is being pursued by participation in other tenders in this segment, though the procedure of announcement and finalisation of tenders takes considerable time.

Indian Railway having announced procurement of 22000 wagons, going forward, the focus rightly being on higher utilisation of capacity available with the Company, participation in the tenders for Metro Coaches, and more efficient control over value chain, make the outlook for the current financial year reasonably encouraging. On a consolidated basis, all efforts are being made to appropriately deal with the challenges imposed by the legacy contracts and improve the performance in the coming months.

Management Discussion and Analysis Overall Review

The overall performance of the Company during the financial year 2017-18 sharply declined at standalone level due to delay in wagons procurement order by Indian Railways, the largest customer of freight cars. On consolidated basis the one-time provision/write-off of losses incurred on account of re-estimation of certain long time contracts that were inherited along with the acquisition of the business from the seller- FAS severally impacted the Group’s performance. Further, technical problem in the bogies hampered production at Titagarh Wagons AFR, the wholly-owned subsidiary of the Company in France and contributed to the adverse effect on the financial performance on consolidated level.

Rs in lakhs

Standalone

Consolidated

Particulars

2017-18

2016-17

2017-18

2016-17

1 Segment revenue (gross)

Wagons & coaches

23,260.62

29,341.56

118,668.96

165,829.61

Specialised Equipments& Bridges

4,150.84

7,171.51

4,150.84

7,171.51

Shipbuilding

3,516.72

-

3,516.72

-

Others

723.87

520.53

807.32

917.81

Net sales/ Income from operations

31,652.05

37,033.60

127,143.84

173,918.93

2 Segment results [Profit / (Loss) before tax and interest]

Wagons & coaches

18.83

2,023.09

(11,553.80)

7,246.38

Specialised Equipments& Bridges

619.93

1,398.55

357.47

1,392.75

Shipbuilding

549.08

(192.19)

549.08

(192.19)

Others

248.84

298.48

(1,780.82)

(555.05)

Total

1,436.68

3,527.93

(12,428.07)

7,891.89

Less /(Add)

Interest Income - Net

(683.71)

(992.33)

2,660.96

1,033.48

Unallocable expenditure net of income

2,199.18

1,888.85

1,628.56

1,888.75

Profit before taxes

(78.79)

2,631.41

(16,717.59)

4,969.66

Tax Expenses

(370.33)

703.04

(1,994.16)

2,226.59

Profit after taxes

291.54

1,928.37

(14,723.43)

2,743.07

Segment Review - Standalone

- Revenue from operations on a standalone basis declined from Rs. 37,033.60 lakhs in FY 2016-17 to Rs 31,652.05 lakhs during the FY 2017-18, a reduction of 14.53%.

- The EBIDTA margins (before exceptional items) reduced from 11.41% of revenue in the previous year to 6.58% in the FY 2017-18 due to change in the product mix. The majority of revenue during the year under review comprised sale of wagons where the overall margin was lower than that recorded by the other verticals.

- Shipbuilding vertical launched the first ship weighing 1000 Tonnes before the scheduled delivery date against the order placed for the two ships by Indian Navy, adding Rs. 3516.72 lakhs to the Revenue i.e. 11.11% of the total revenue during the FY 2017-18.

Revenues and EBIDTA - Consolidated

- Revenue from operations at Rs. 127143.84 lakhs was lower by 26.89% on a consolidated basis as compared to Rs. 173,918.93 lakhs in the previous financial year mainly due to delay in release of orders for wagons procurement by the Indian Railway. The total consolidated Group revenue comprised 31.86% from Indian operations and 68.14% from overseas operations.

- The Consolidated EBIDTA margin (before exceptional items) was negative during the year due to one-time provision required to be made by the foreign subsidiary in Italy. However, after removing the impact of one time provision in the foreign subsidiary the overall EBIDTA was positive at 1.51% as against 7.88% in the previous year. The subsidiary in France also recorded loss mainly due to technical problem witnessed in the bogies used in the supply of Wagons in the past, impacting production. The performance of the foreign subsidiaries is dealt with in detail separately hereinbelow.

Performance of segments

1. Wagons and Coaches (the segment consists of entire solution for the rolling stock requirements of customers, from freight wagons to passenger coaches, bogies, couplers, crossings and all allied products.)

Standalone Performance

- The Wagons and Coaches segment recorded a decline of 20.72% in turnoverfor FY 2017-18 as compared to the previous year, as the execution of the bulk order for 1147 Wagons received in the end of December, 2017 could not start in the FY 2017-18 pending finalization of certain aspects, which has since commenced in the first quarter of the current year.

- Although the revenue from operations declined due to reasons stated above, the segment saw a sharp increase in the order book. The year under review ended with an order book of Rs. 587.94 crores, an increase of 96% as compared to the order book as at 31st March 2017. The above increase in the order book is attributed to overall improvement in the wagon procurement from the Indian Railways (IR). Also the demand from the private sector showed a favourable movement with some large orders flowing from the private customers.

- The Company secured its first developmental order of trains electrical from Chittaranjan Locomotive Works (CLW) for supply of one set of 3-phase IGBT Propulsion System for WAG9, India’s highest capacity electric locomotive, valuing Rs 1.94 crores. The above order has been received using the credentials of our wholly owned subsidiary company, Titagarh Firema SpA. The designing and manufacturing of the prototype is under process.

2. Specialised Equipments & Bridges (consists of bailey / other modular bridges, nuclear biological shelters and other defence related products)

- The revenue from this segment saw a decline of 42% during the year under review with the resulting impact on the segment results, basically due to lack of orders from the Ministry of Defence.

- The Company was awarded a prestigious order for supply of 30 modular steel bridges valued at USD 9 million by the Ministry of Physical Infrastructure and Transport, in Nepal- a project funded by World Bank Nepal. The Modular Panel Truss Bridges are an upgraded type of bridges and will be manufactured with the technology to be provided by Matiere pursuant to the technology agreement entered into by the Company.

- Similar to the Wagons and Coaches segment, the Specialised Equipment and Bridges segment saw an increase in the order book during the year. The order book at the end of the year amounted to Rs. 86 crores, an increase of 25% against previous year.

Shipbuilding

- The execution of the two prestigious orders received in the previous year valued at Rs.170 crores from the Indian Navy and National Institute of Ocean Technology started during the year and since the performance of the segment met the reporting requirements of a reportable segment as per IND AS 108 on Operating Segments, the Company has disclosed “Shipbuilding” as a separate reportable segment during the year.

The total revenue booked based on the percentage of completion method amounted to Rs. 3516.72 lakhs with a segment profit of 15.61%.

- During the year, the Company has successfully launched its first ship (1000 MT fuel barge) for the Indian Navy before time and is privileged to be a significant part of the Make in India campaign. The construction work of the remaining three ships from Indian Navy and National Institute of Ocean Technology (NIOT) is progressing satisfactorily.

- The Company has participated in several tenders for ships and going ahead is hopeful of positive results.

Performance of the Operating Subsidiaries

Titagarh Firema SpA, Italy (TFA)

The summary of the financial results of TFA which have been consolidated in the financials of the Company for the FYE 31/03/2018 is as under:

Rs in lakhs

Year Ended

As per IND AS

2017-18

2016-17

Revenue from Operations

58,031

101,079

EBIDTA (before onetime provision)

3,322

8,685

EBIDTA %

5.72%

8.59%

Onetime provision*

-8,097

-

Reported PAT

-8,023

3,313

- Refer note below on one time provision

- TFA’s EBIDTA of 5.72% during the FY 2017-18 as against 8.59% in the previous year is basically due to execution of low margin orders inherited along with the acquisition of business. These are contracts with very low or negative margins which were a part of the acquisition agreement.

- One time provision in FY 2017-18 represents the following:

o Rs. 3,133.91 lakhs (Euro 4.21 million) represents one-time provision/write off of losses incurred on account of re-estimation of certain long term contracts that were inherited alongwith the acquisition of the business from the seller: FAS.

o Rs. 4,963.29 lakhs (Euro 6.58 million) represents provision of estimated penalties likely to arise due to expected delay in supply of trains against contracts that were inherited. Considering the various circumstances that led to the delay, while Management is in active negotiation with the customer to renegotiate and reduce the total amount of this penalty, the final amount will be known on conclusion of the negotiation, however, as a matter of prudence and abundant precaution necessary provision towards the above penalties has been made in the books of accounts.

- After considering the aforesaid one-time provision and the actual consideration paid, the total cost of acquisition is substantially lower than the fair value of the fixed assets (as carried out by independent valuers) and by and large as per the original estimates made at the time of acquisition.

- The order book of TFA as at 31st March 2018 was Euro 138 million. The Company has booked new orders after acquisition amountingto Euro 168 million out of which Euro 76 million is now under execution and the balance has been successfully executed. Out of the inherited contracts of Euro 225 million, Euro 163 million has been successfully executed and the balance of Euro 62 million is under execution.

- The total equity infusion by Titagarh Wagons Limited-the parent Company till date is Euro 25 million and the working capital deployed in the form of direct loan from the bank and shareholder’s loan is Euro 41 million. The cash and cash equivalent including balance with government authorities and deposits against tenders/contracts with customers was Euro 25 million as on 31st march 2018.

- TFA has participated/ is prequalified for several tenders in Europe and other parts of the world and is pursuing them. The total value of the tenders participated or in the process is almost Euro 2 billion.

Titagarh Wagons AFR, France (TWA)

- TWA achieved sales of Rs. 28,602.12 lakhs during the year ended 31st March 2018, as against Rs. 27,322.67 lakhs in the previous year.

- TWA has reported a loss before tax of Rs 4,405.64 lakhs for the year ended 31st March 2018 as against loss of Rs 117.31 lakhs in the previous year.

- The sales and profitability of TWA was impacted due to the following:

o technical problem in the bogies which hampered production during the year. The problem has since been resolved and the production has resumed.

o Revenue from operations includes 33% of the revenue with negative margins taken by TWA in order to regain entry into stainless steel wagons market. The order has been fully executed during the year. TWA is now working on several strategies to bring down the cost of production of the above wagons in order to have better margins.

- The order book of the Company as on 31st March 2018 stands at Euro 24 million.

Cimmco Limited (Cimmco)

- Revenue from operations increased to Rs 13,462.01 lakhs from Rs 12,795.63 lakhs in the financial year.

- During the year, there was delay in release of bulk orders by Indian Railways due to which Cimmco did not have wagon orders for major part of the year. However, the bulk order for 1191 wagons worth Rs. 286 crores has been received in the end of December, 2017, execution of which has started from the first quarter of current year.

- Cimmco is L1 in a contract for supply of BTPGLN wagons to Bharat Petroleum Corporation Limited. The approximate value of the tender is Rs. 90 crores.

- Merger of subsidiary engaged in the manufacture of Tractors has been completed and effect of the same given in the books of accounts of Cimmco.

- The results of Cimmco include an exceptional item amounting to Rs. 614.12 lakhs towards impairment of Plant and Machinery and Intangible assets of Tractor business acquired by Cimmco through merger of Titagarh Agrico Private Limited.

- The order book of Cimmco as at the close of the year was Rs. 415 crore, the execution of which has commenced in the Q1 of FY 19 and would be completed in FYE 31/03/2019.

The FY 2017-18 has been a particularly di^icult year for our European operation. While TFA (Italy) saw impact of issues mainly arising out of legacy contracts and resultant extraordinary losses, TWA (France) had some technical problems with the bogies and a couple of onerous contracts which adversely impacted the operations during the year. The steps taken to bring back the European operations to normalcy have been taken and the situation is expected to improve in FY18-19 and should be able to get back to normalcy in the year after.

The Indian operations suffered on account of subdued orders which has changed in the last few months. The combined order book of the Indian operations was Rs. 1165 crores as against Rs. 654 crores this time last year (TWL- Rs. 750 crores and Cimmco Rs. 415 crores) and the Indian operations are expected to show a substantial improvement in the current financial year.

Following successful launch of the first ship for Indian Navy and three more planned in the next few months, the Company expects to take its contribution to ‘Make in India’ endeavours forward by seizing opportunities in the passenger coach and metro segment and will be actively participating in all the tenders that are expected to be launched in India. TFA with its robust design and technology strength would enable the Company to play key role in Passenger Rolling Stock segment.

Industry overview of Business Segments Wagons and Coaches

India has the world’s fourth largest railway network comprising 119,630 kilometres oftotal track and 92,081 kilometres of running track over a route of 66,687 kilometres (by the end of FY16). The Indian Railways have a fleet of more than 2.51 lac wagons, 70,241 coaches and 11,112 locomotives. The traffic carried by the Indian Railways can be split into two segments: passenger and freight.

Construction of the Eastern and the Western Dedicated Freight Corridors will lead freight volumes to more than double to 2,165 million tonnes by FY 2020. Increasing carrying capacity, cost effectiveness and improved quality of service will escalate railway’s share of freight movement from 35% to 50% by2020.

(Source: www.indianrailways.gov.in) Government policy on rail network operations, cessation of providing fee supply items causing enhanced working capital requirement, unhealthy competition are some of the major challenges.

Outlook

The Government has set aside a sum of Rs. 8,56,020 crore to carry out medium-term structural reforms as well as infrastructure development such as electrification and expansion of the existing network, improving safety, increasing its fleet of rolling stock, providing for high speed rail and freight corridors and providing better passenger amenities. The Government of India has decided to create a Rs. 30,000 crore Rail India Development Fund (with assistance from World Bank). This will support commercially viable investment in the railway sector in India over the next seven years. The Indian Railways aims to be the engine for India’s economic growth and development by aiming to earn gross revenues worth $44.5 billion by FY20.

The Ministry of the Railways has announced its decision to procure wagons in bulk and as per reports available is in the process of finalizing tender for 22000 wagons shortly. This is a major positive development for the industry.

Metro railways

Metro trains are rail-based mass rapid transit systems that operate on a privileged right-of-way - either underground or elevated over street level, separated from all other modes of transport in an urban area. Currently, there are eight operational metro systems in India. As of September 2016, India had 324 km of operational metro lines in the cities of Delhi and NCR, Gurgaon, Kolkata, Chennai, Bengaluru, Jaipur and Mumbai. A further 520-km-long lines are under construction and a further 553-km are under consideration. There has been a rapid increase in the expansion of urban mass transportation systems across India thanks to continued support from the Central and State Governments and multi-lateral development agencies.

Metro rail system enables large-scale, rapid and low-cost movement of people while causing very little pollution as compared to conventional modes of transport, only 3540% in India’s metropolitan cities have a metro rail network and Metro rails can also serve in old, congested and thickly populated areas where traffic is a major challenge

Making available the land for laying tracks, very large project expenditure, infrastructural issues are some of the major threats in Metro Coaches segment.

Outlook

Given rising urbanisation and increasing population levels in India, implementation of metro rail systems will become imperative as mass rapid transit systems are the best way to decongest traffic. The implementation of the 2017 Metro Rail Policy also augurs well for the sector.

Shipbuilding sector overview

The shipbuilding industry has a similar impact on the Indian economy as the infrastructure sector due to higher multiplier effect on investment and turnover (11.6 and 4.2 respectively) and high employment potential due to multiplier effect of 6.4. The shipbuilding industry is strategically important due to its role in national defense, energy security and for developing heavy engineering.As per a Ministry of Defence press release, at present all major warships and submarines under construction are being built at Indian shipyards (both PSU as well as Private Shipyards)

(Source: www.pib.nic.in) Although the global shipping industry has been witnessing slowdown due to declining demand and overcapacity, the demand for various vessels and barges etc. from the Government establishment/Indian Navy offsets to certain extent the challenge.

Outlook

The revival of the shipbuilding sector is a key part of the Central Government’s Make in India initiative. Participation in various tenders is continuing and new orders are expected, though gradually on the basis of the 10-year policy package. The Central Government is targeting to increase India’s share of the global shipbuilding industry from current levels of 0.45% to 5% by 2020.

Discussion on Financial Performance with respect to Operational Performance

Continuing focus of the management is consistently on undertaking better manufacturing processes, improved productivity and optimization of resources for improvement in performance aimed at achieving results better than the trend witnessed in the industries in which the Company operates. Viewed in this backdrop, the Company’s performance for the year under review is considered to be in line with the circumstances prevailing.

Overall outlook for the current year

In addition to the healthy order book as on date, the overall order book of the segment is expected to increase with the finalisation of the new wagon tender for 22000 wagons announced by the IR. Also on the other hand the demand from private sector has seen a sharp increase. The Company has been able to book large orders from the private sector and continues to receive the enquiries due to increase in demand.

The Company’s strategy on diversification as part of its risk management, has started to yield results as is manifested in reasonable growth in business of other verticals viz. Shipbuilding, Specialised Equipment & Bridges etc.

Your Company is set to technically qualify in the Mumbai Metro tender and the result of the price bid would be announced in the next 3-4 months. The participation is in consortium with Titagarh Firma SpA- wholly owned subsidiary of the Company in Italy, who will provide the technology.

More orders in the other verticals viz. Defence and shipbuilding are being pursued aggressively and steps have already been taken for addressing the challenges faced by your Company’s overseas subsidiaries.

Overall the outlook for the current financial year is reasonably encouraging.

3. Dividend

The Board of Directors at its meeting held on 29th May, 2018 has recommended dividend of Fifteen percent i.e. Re 0.30 per equity share of Rs. 2/- each fully paid up for the Financial Year ended 31st March, 2018 subject to declaration by shareholders at the ensuing Annual General Meeting.

4. Employee Stock Options Scheme/Change in Share Capital

Pursuant to approval of the shareholders, Nomination and Remuneration Committee (also functioning as Compensation 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 resulting in 33,750 Equity shares, 6,000 Equity shares and 48,750 equity shares allotted on May 19, 2017, August 28, 2017 and March 16, 2018 respectively to the eligible employees upon exercise by them in conformity with ESOS led to increase in the paid up equity share capital to Rs.23,10,00,740/- as at 31st March, 2018 consisting of 11,55,00,370 equity shares of Rs. 2/-each fully paid up. Further, 15,950 equity shares were allotted on 20th June, 2018 which increased the paid up equity share capital to Rs. 23,10,32,640/- consisting of 11,55,16,320 equityshares of Rs. 2/- each fully paid up. The equity shares so allotted rank pari-passu with the existing equity shares of the Company.

The disclosures as required under Regulation 14 of Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 have been placed on the corporate website of the Company www.titagarh.in

5. Material Changes and Commitments after the balance sheet date:

No material changes and commitments have occurred since the date of close of the financial year, to which the financial statements relate, till the date of this report, which might affect the financial position of the Company.

6. Investor Education Protection Fund (IEPF)

As stipulated by the applicable provisions of the Companies Act, 2013 read with IEPF (Accounting, Audit, Transfer & Refund) Rules, 2016 (‘the IEPF Rules’) all unpaid or unclaimed dividend required to be transferred by the Company to the IEPF has been/ shall be transferred, details whereof are provided on the Company’s website: www.titagarh.in.

In accordance with the provisions of Section 124(6) of the Companies Act, 2013 read with the Rules made thereunder, the Company had executed and submitted the necessary documents for transfer of 19,607 equity shares of Rs. 2/each, to the demat account of IEPF Authority, on 29th November 2017, in respect of which dividend had not been claimed by the members for seven consecutive years or more as on the cut-off date, i.e. 31st October, 2017. The Company has initiated necessary action for transfer of shares in respect of which dividend has not been claimed by the members consecutively since FY 2010-11.

7. Transfer to Reserves

There being no surplus, no amount is proposed to be transferred for the year under review to the general reserve.

8. Risk Management, Risks and Concerns

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.

Risk management is an integral part of the Company’s risk management policy adopted by the Board with periodic review by the Audit Committee and the Board. Prudence and conservative dealing with risks is at the core of risk management strategy being followed by the Company. The risks, both internal and external to which the Company is exposed to include macro-economic, regulatory, strategic, financial, operational, value chain, human resources etc. and each of them is taken into consideration for development and maintaining of a robust mechanism for mitigation which is evolving with time and circumstances within which the Company operates.

9. Subsidiary Companies and Joint Venture

A report containing the details required under Section 134 of the Companies Act, 2013 (‘the Act’) read with Rule 8(1) ofthe Companies (Accounts) Rules, 2014 in respect of performance and financial position forthe financial year ended March 31, 2018, ofsubsidiaries: Cimmco Limited (“Cimmco”), Titagarh Capital Private Limited, Titagarh Wagons AFR, France, Titagarh Singapore Pte. Ltd., Singapore; and Titagarh Firema SpA and Joint Venture Company: Matiere Titagarh Bridges 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 this Annual Report.

The Hon’ble National Company Law Tribunal (NCLT), Kolkata Bench, by an Order passed on 16th October, 2017 under Sections 230 and 232 of the Companies Act, 2013, sanctioned the Scheme of Amalgamation of Titagarh Agrico Private Limited (“TAPL”) with Cimmco Limited w.e.f. the Appointed Date: 1st April, 2016. Upon filing the said Order with the Ministry of Corporate Affairs on 14th November, 2017, TAPL,which was earlier the Company’s subsidiary, has been amalgamated with Cimmco and has therefore ceased to be a subsidiary of the Company.

A joint venture Company: Titagarh Mermec Private Limited has been set up in India on 18th July, 2018 with equal stake in its equity of Mermec SpA, Italy (Mermec) and your Company, for marketing, manufacturing and selling diagnostic and signalling systems for railway infrastructure and auxiliary products and equipment parts related thereto in theTerritoriesviz. India, Nepal, Bangladesh, Myanmar, Bhutan, Sri Lanka and any other market with credit line from India.

10. Extract of Annual Return

The details forming part of the extract of the annual return in the Form MGT-9 are uploaded on the website of the Company www.titagarh.in(http://titagarh.in/annual-reports.php). The same is also annexed with this report marked as Annexure DR-2.

11. Number of Board Meetings

The Board of Directors met Seven (7) times during the financial year 2017-18 as per the details provided in the Corporate Governance Report forming part of Annual Report.

12. 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. The Company has been informed that the said loan, guarantee and security are proposed to be utilised by each recipient for its general business/corporate purposes.

13. 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.

14. 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 Ramsebak Bandyopadhyay as the members. Further details are provided in the Corporate Governance Report.

During the year all recommendations made by the Audit Committee were accepted by the Board.

15. Related Party Transactions

All Related Party Transactions (RPTs) are entered into by the Company 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. The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act and as mentioned in form AOC-2 of the Rules prescribed in the Companies (Accounts) Rules, 2014 under the Act are annexed hereto and marked as Annexure DR-3.

16. Corporate Governance Report

The Company has complied with the corporate governance requirements underthe 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.

17. Internal Control System

The Company has system of internal controls and necessary checks and balances 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.

18. Vigil Mechanism

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

19. Internal Complaints Committee

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, thefurtherdetails of which are given in the Corporate Governance Report. No complaint was lodged with the Committee during the financial year 2017-18.

20. Directors and Key Managerial Personnel

Shri Shekhar Datta, Independent Director, resigned from the Board of Directors with effect from 31st July, 2017.

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), the Board had appointed Shri Ramsebak Bandyopadhyay, Mr. Vincenzo Soprano and Shri Atul Joshi as Additional Directors of the Company w.e.f. 10th August, 2017, 28th October, 2017 and 24th January, 2018 respectively, pursuant to the provisions of Section 161of the Act.

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), the Board at its meeting held on 10th August, 2018 has recommended to the members to pass the necessary resolutions at the ensuing 21st Annual General Meeting for the appointment of Shri Ramsebak Bandyopadhyay and Shri Atul Joshi as the Independent Directors of the Company and the re-appointmentofShri D.N. Davar, Shri Manoj Mohanka and Shri Sunirmal Talukdar as Independent Directors for a further term of 5 (five) years w.e.f. April 1, 2019.

Smt. Rashmi Chowdhary, Non-Executive Director, retires by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

The information prescribed bySEBI (LODR) Regulations, 2015 in respect of the above named Directors is given in the Notice of Twenty First Annual General Meeting.

During the year under review, there was no change in the Key Managerial Personnel of the Company.

21. 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 2017-18 as per the details set out in Corporate Governance Report.

22. 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, by all the Independent Directors of the Company have been made.

23. Remuneration Policy and remuneration

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

24. 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, 2018 had been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

- The directors had 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 of the Company for that period;

- The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;

- The directors had prepared the Annual Accounts on a going concern basis; and

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

- The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. Statutory Auditors

Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (FRN 304026E/E-300009), were appointed as Statutory Auditors of the Company at the 20th AGM until the conclusion of 25th AGM, subject to ratification of their appointment at the AGM every year. In view of the amendment under the provisions of section 139 of the Companies Act, 2013, ratification of appointment is proposed to be dispensed away with.

The Auditors’ Report on the standalone financial statement for the year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark.

26. Consolidated Financial Statements

In accordance with IND-AS24 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. 7(a) in the Notes on Accounts is self-explanatory, requiring no specific response from the Directors at this stage, however the recoverable amount aggregating Rs. 854.81 lakhs is subject to ongoing legal proceedings which are being closely monitored and expedited to the extent within the Company’s control.

27. Cost Auditors

M R Vyas & Associates, Cost Accountants, have been reappointed 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 2018-19 subject 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 ended 31st March, 2018 would be filed as stipulated by the applicable provisions of law. The Company is maintaining the accounts and cost records as specified by the Central Government under the provisions of Section 148(1) of the Act.

28. Secretarial Auditor

Secretarial Audit has been conducted by Vanita Sawant & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

29. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act, 2013 during the financial year ended March 31, 2018.

30. Particulars of Remuneration of Directors/KMP/ Employees

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 (the Rules) is annexed and marked as Annexure DR-5. The information pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report, is readily available for inspection by the members at the Company’s Registered Office between 10.30 A.M. to 1 P.M. on all working days upto the date of ensuing AGM. Should any member be interested in obtaining a copy including through email ([email protected]), may write to the Company Secretary at the Company’s Registered office.

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, 2018 was 512.

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

A statement pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 on conservation of energy, 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, 2018 pursuant to the provisions of Section 135 of the Act and rules made thereunder is annexed to this Board’s Report and marked as Annexure DR-7.

Apart from the above, the Company makes, inter alia, donations to the charitable institutions directly and through philanthropic organisations engaged in providing medical, education and other reliefs to the economically weaker sections of the society. Industrial Training Institute (the “ITI”) set up on the 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. A large number of students in various batches have passed and significant number of them are engaged in various jobs in the industry. The ITI has been recognised 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, 2019 have been duly paid.

34. Compliance with Secretarial Standars

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

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

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

For and on behalf of the Board Kolkata

J P Chowdhary

August 10, 2018 Executive Chairman


Mar 31, 2017

The Directors hereby present their Twentieth Annual Report on the business and operations of the Company (‘the Company’ or ‘TWL’) along with the audited financial statements, for the financial year ended March 31, 2017. The consolidated performance for the Titagarh Group (the Company and its subsidiaries) has been referred to wherever so required.

1. Profit, Retention & Dividend

Titagarh Group’s financial performance during the financial year ended March 31, 2017 was as follows:

Rs. In lacs

Standalone

Consolidated

Particulars

2016-17

2015-16

2016-17

2015-16

Revenue from operations

37,033.60

32,585.61

173,807.58

97,463.20

Other income

2,431.36

2,664.02

3,013.13

4,101.62

Total Income (TI)

39,464.96

35,249.63

176,820.71

101,564.82

Earnings before interest, tax, depreciation and amortization (EBIDTA)

4,225.87

2,318.62

13,708.70

7,125.59

Less: Finance Cost

438.44

542.09

3,130.89

1,728.99

Less: Depreciation and amortization expenses

1,156.02

1,212.65

5,152.44

4,591.71

Profit before exceptional items & tax

2,631.41

563.88

5,425.37

804.89

Share of Loss of a joint venture

-

-

5.80

-

Exceptional items

-

1,954.16

449.91

2,085.71

Profit / (Loss) before tax

2,631.41

(1,390.28)

4,969.66

(1,280.82)

Tax Expenses

703.04

(492.10)

2,226.59

671.41

Profit / (Loss) for the year after tax

1,928.37

(898.19)

2,743.07

(1,952.23)

Other Comprehensive Income

(13.76)

26.18

(43.37)

21.16

Total Comprehensive Income for the year

1,914.61

(872.00)

2,699.69

(1,931.07)

Profit / (Loss) attributable to:

Equity holders of the parent

-

-

2,647.67

(1,625.98)

Non- controlling interests

-

-

52.02

(305.09)

2. Performance and Outlook

During the Financial Year 2016-17 the Company’s performance on a standalone basis improved significantly compared to the previous financial year, and in fact the topline would have been markedly better but for the impact of substantially reduced quantity of Wagons procured by the Indian Railways (IR), the largest customer.

With continuing emphasis on diversification as part of de-risking strategy adopted by the Company, the other verticals, particularly special equipments for defence and bridges enabled overall the EBIDTA and PBT to improve substantially during the financial year under review. The merger of four wholly owned subsidiaries with the Company sanctioned by the Hon’ble High Court of Calcutta on July 11, 2016 has been given effect to and reflected in the relevant numbers appearing hereinabove.

On a consolidated basis, the Group’s performance improved impressively mainly owing to enhanced topline of the recently incorporated overseas subsidiary: Titagarh Firema Adler SpA, Italy.

Management Discussion and Analysis

Overall Review

The overall performance of the Company during the financial year 2016-17 improved notably both at standalone and consolidated levels owing largely to part fruition of the focused efforts of the Company to change the product mix and also the products as part of diversification drive boosted by inorganic growth through acquisition of rolling stock manufacturing unit in Italy; and this was achieved despite the uncertainty and irregular procurement of Wagons by Indian Railways.

Rs. In lacs

Standalone

Consolidated

Particulars

2016-17

2015-16

2016-17

2015-16

1

Segment revenue (gross)

Wagons & coaches

29,341.56

29,738.79

165,829.60

94,402.12

Specialized Equipments & Bridges

7,171.51

1,938.40

7,171.52

1,938.40

Others

520.53

908.42

917.81

1,138.38

Net sales/ Income from operations

37,033.60

32,585.61

173,918.93

97,478.90

2

Segment Results

Wagons & coaches

2,023.09

655.86

7,151.42

2,533.85

Specialized Equipments & Bridges

1,398.55

159.89

1,392.75

159.89

Others

106.29

(1,955.11)

(747.24)

(3,327.97)

Total

3,527.93

(1,139.36)

7,796.93

(634.23)

Less / (Add)

Interest Expense

233.36

349.79

1,860.21

1,311.80

Interest Income

(1,225.70)

(1,932.15)

(921.69)

(2,491.32)

Depreciation and amortization

139.42

145.66

139.42

145.66

Other corporate income

(944.48)

(668.30)

(944.48)

(668.29)

Other corporate expenses

2,693.92

2,355.92

2,693.82

2,348.73

Profit before taxes

2,631.41

(1,390.28)

4,969.65

(1,280.81)

Tax Expenses

703.04

(492.10)

2,226.59

671.41

Profit after taxes

1,928.37

(898.18)

2,743.06

(1,952.22)


Segment Review - Standalone

- Revenue from operations on a standalone basis increased to Rs.37,033.60 lacs from Rs.32,585.61 lacs in the previous year, recording growth of 13.65%.

- Successful de-risking from dependence on railways business is manifested in significantly increased share of revenue from the non-railways segment, mainly from specialized equipments and bridges.

- The EBIDTA margins (before exceptional items) went up from 7.12% of revenue in the previous year to 11.41% during the year under review due to change in the product mix from railway segment to non-railway segment as stated above.

Revenues and EBIDTA - Consolidated

- Revenue from operations grew on a consolidated basis to Rs.173,918.93 lacs from Rs.97,478.90 lacs in the previous financial year, i.e. increase of 78.42%. The total consolidated Group revenue comprised 27.26% from Indian operations and 72.74% from overseas operations. The increase in the European business was mainly due to increase in revenue achieved by Titagarh Firema Adler SPA, Italy (TFA), which had the first full year of operations since it was acquired by the Group by setting up a subsidiary on June 30, 2015. TFA''s top line during the FYE 31/03/2017 was INR 101,079.23 lacs (Euro 137.33 million).

- The consolidated EBIDTA margin (before exceptional items) at 7.31% of the consolidated revenue in the previous year marginally improved to 7.88% in the year under review.

Performance of segments

1. Wagons and Coaches (the segment consists of entire solution for the rolling stock requirements of customers, from freight wagons, to passenger coaches, metro trains, train electrical, bogies, couplers, crossings and all allied products.)

Standalone Performance

- The Wagons and Coaches segment ended the year with almost the same level of turnover as compared to the previous year, however, the turnover from the freight wagons business included in the above segment saw a steep reduction in the volume by 19%. The decline in the freight business was compensated by increase in business from foundry castings by around 93% and scheduled progress in execution of order from Kolkata metro for refurbishment of the metro rakes.

- Although turnover of the segment remained at the same level as the previous year, it recorded a change in the geographical mix wherein the export sales increased by 243%.

- The Company has received some major export orders during the year ended March 31, 2017 for supply of freight wagons and reasonably expects to increase its order book over the period through increased synergy with its foreign subsidiary Titagarh Wagons AFR, which has the patented designs of specialized wagons and also a pool of highly talented design engineers conceptualizing and designing the new wagons for the global market.

- Execution of some of the orders for export of wagons in addition to other freight wagons enabled the segment results to go up by 208% during the FYE 31/03/2017 at higher average realization as compared to previous year.

Highlights

- On 22 April 2017, the Company launched a special wagon keeping in view the special freight train operation (SFTO) scheme. Railway Minister, Sri Suresh Prabhu inaugurated the first SFTO carrying steel coils. The rake was manufactured by the Company at its Uttarpara unit in West Bengal.

- The Metro & Electric Division is a recent addition to the wagons and coaches segment of the Company. In July 2015, the Company acquired the business of Firema Trasporti SpA, Italy, by setting up Titagarh Firema Adler SpA (TFA). Firema, with over 100 years of experience in the Industry in Italy, has a portfolio of rolling stock products and a range of illustrious projects. Titagarh Group through TFA would initially cater primarily to the Metro industry in South Asia, providing integrated solutions, including car bodies, bogies, light railway vehicles, metro trains, electric and diesel locomotives, coaches, tramways, electric and electronic equipment etc.

The Group is poised to expand its client base internationally to include Malaysia, Indonesia, Sri Lanka, Bangladesh, and nationally to Mumbai, Bhopal, Indore and Vijaywada and other places.

2. Specialized Equipments & Bridges (consists of bailey / other modular bridges, nuclear biological shelters and other defence related products)

- The revenue from this segment saw a commendable increase of 270% during the year and the segment results were up by 775% over the corresponding numbers in the previous year. The increase is mainly due to higher volume from the contract for manufacturing of new equipments awarded by the Ministry of Defence.

- The segment is in the process of completing the designs for EMI/EMP Protected Shelters. Commercial Orders for the same are expected thereafter.

- The company has leveraged its joint venture1 with Matiere SAS France, to bid for tenders for the construction of Unibridges as well as explore entry into more joint ventures for different models of bridges.

3. Shipbuilding

The shipbuilding segment though clubbed with the other miscellaneous segment pending revenue, profit and other thresholds as required under IND AS 108 on Operating Segments, for disclosure as a separate business segment, is a separate vertical and with the receipt of new prestigious orders would become a separate reportable segment from the next financial year.

Existing facilities being sufficient and in proximity to Hooghly river combined with the available captive engineering competence, this vertical was commissioned with marginal capital expenditure only.

Highlights

- On 7th December 2016, Titagarh Wagons factory received the capacity assessment certificate from the Ministry of Defence (Navy) wherein the Shipyard has been cleared for undertaking construction of non-weapon platforms up to 120 metres in length and all types of Yardcraft.

- Received the maiden order for construction of 4 ships, two each from Indian Navy and National Institute of Ocean Technology (under the Ministry of Earth and Sciences) at a total order value of approx Rs.170 crores. The said orders are to be executed over a period of next 18 to 36 months.

Industry overview of Business Segments

Wagons and Coaches

India has the world’s fourth largest railway network comprising 119,630 kilometres of total track and 92,081 kilometres of running track over a route of 66,687 kilometres (by the end of FY16). The Indian Railways have a fleet of more than 2.51 lac wagons, 70,241 coaches and 11,112 locomotives. Over 2015-16, the Indian Railways carried 22.2 million passengers and 3.03 million tonnes of freight per day, and earned a gross revenue of H1,68,379.60 crore, a 33% increase from 201213 revenue levels of H1,26,180.43 crore. During the FY07-16 period, revenues have increased at a CAGR of 6.4%. The traffic carried by the Indian Railways can be split into two segments: passenger and freight. In the last eight years, revenues from the passenger segment have expanded at a CAGR of 6.9% resulting in total revenue earnings of ~$6.9 billion. $16.9 billion was generated as earnings from commodity freight traffic during FY16. (Source: www.indianrailways.gov.in)

Growth drivers

- Passenger traffic is expected to increase from 8,152 million (FY16) to 15.18 billion by FY20

- The Central Government’s decision to allow 100%-FDI in the railway sector

- Construction of the Eastern and the Western Dedicated Freight Corridors will lead freight volumes to more than double to 2,165 million tonnes by FY 2020

- Increasing carrying capacity, cost effectiveness and improved quality of service will escalate railway’s share of freight movement from 35% to 50% by 2020

- The Ministry of the Railways decision to construct six high-capacity, high-speed dedicated freight corridors along the Golden Quadrilateral and its diagonals.

Budgetary support

For the first time in India, the previously separate Railway Budget was merged with the Union Budget thereby bringing the railways to the centre stage of Government’s fiscal policy. This would facilitate multi-modal transport planning between railways, highways and inland waterways. The functional autonomy of Railways will, however, continue. The four main focus areas for the railways are: passenger safety, capital and development works, cleanliness and financial and accounting reforms. A rail safety fund - Rashtriya Rail Sankraksha Kosh will be created with a corpus of Rs.1 lac crore over the next five years. 3,500 kilometres of new railway lines will be commissioned in 2017 18 as against 2,800 kilometres in 2016-17. For 2017-18, Rs.1.31 lac crore was allocated to under capital expenditure - the highest such sum ever.

Highlights over the past two years

- Indian Railways generated an investment of Rs.15,000 crore through PPP (public-private-partnership) projects during FY15-16 - the highest till date

- As much as 2,828 kilometres of broad gauge lines were commissioned in FY16-17- the highest till date

- Over 2015-16, Rs.24,000 crore was awarded for setting up dedicated freight corridors

- Capital investment in the railways sector increased to Rs.93,795 crore in FY16

- Cumulative FDI inflows (April 2014 and September 2016) stood at $216.77 million

- The Indian Railways is set to manufacture semi-highspeed (160 kilometres per hour) trains with 16 fully air-conditioned coaches at half of the import cost at the Integral Coach Factory

Government policy on rail network operations and procurement of Wagons and Coaches including emphasis on obtaining supply from its own units, withdrawal of incentive schemes to the private sector freight operators, unhealthy competition are some of the major challenges.

Outlook

The Government has set aside a sum of H8,56,020 crore to carry out medium-term structural reforms as well as infrastructure development such as electrification and expansion of the existing network, improving safety, increasing its fleet of rolling stock, providing for high speed rail and freight corridors and providing better passenger amenities. The Government of India has decided to create a Rs.30,000 crore Rail India Development Fund (with assistance from World Bank). This will support commercially viable investment in the railway sector in India over the next seven years. Indian Railways is all set to introduce the Spanish-made Talgo trains (running up to a speed of 180-km per hour) that can operate using India’s existing infrastructure. The Central Government plans to connect all capital cities in North Eastern Indian with broad gauge lines by 2020. More than 100 stations are to be modernized as per international standards. The Indian Railways aims to be the engine for India’s economic growth and development by aiming to earn gross revenues worth $44.5 billion by FY20.

Metro railways

Metro trains are rail-based mass rapid transit systems that operate on a privileged right-of-way - either underground or elevated over street level, separated from all other modes of transport in an urban area. Currently, there are eight operational metro systems in India. As of September 2016, India had 324 km of operational metro lines in the cities of Delhi and NCR, Gurgaon, Kolkata, Chennai, Bengaluru, Jaipur and Mumbai. A further 520-km-long lines are under construction and a further 553-km are under consideration. There has been a rapid increase in the expansion of urban mass transportation systems across India thanks to continued support from the Central and State Governments and multi-lateral development agencies.

Governmental initiatives

- 100% FDI under the automatic route has been permitted

- Rs.17,810 crore was allocated under the 2017-18 Union Budget

- The Ministry of Urban Development plans to invest more than $20 billion in the metro rail network

Metro rail policy

- A proposal for a new Metro Rail Policy was announced in February 2017 with a renewed focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. Key factors include:

- Provision for private initiatives or PPP in metro railways

- State Governments going for the PPP model will get 20% support in the form of viability gap funding

- As in rail, road and irrigation sectors, metro corporations can now issue tax-free bonds to raise funding

- The private metro rail administration will be allowed to take up property development and commercial activities to cover costs

- Eligibility criteria for cities relaxed by reducing the population threshold from 20 lac to 10 lac

Growth drivers

- Metro rail system enables large-scale, rapid and low-cost movement of people while causing very little pollution as compared to conventional modes of transport

- Only 35-40% in India’s metropolitan cities have a metro rail network

- Metro rails can also serve in old, congested and thickly populated areas where traffic is a major challenge

Making available the land for laying tracks, very large project expenditure, infrastructural issues are some of the major threats in Metro Coaches segment.

Outlook

Given rising urbanisation and increasing population levels in India, implementation of metro rail systems will become imperative as mass rapid transit systems are the best way to decongest traffic. The implementation of the 2016 Metro Rail Policy also augurs positively for the sector.

Defence sector overview

Global defence spending rose by 1% to $1.57 trillion in 2016 (after adjusting for currency fluctuations) against a 0.6% rise in 2015. India surpassed Russia and Saudi Arabia to have the fourth biggest defence budget - spending $50.67 billion (an 8.5% increase over the previous year) against Russia’s $48.5 billion. The United States remained the largest military spender with a defence budget of $622 billion (a 40% share of the year’s global defence spend).

Governmental initiatives

- FDI limit in defense projects has been increased to 49% from 26% in most cases, and 100% where advanced technology is being transferred to India.

- Lock-in period of three years on equity transfer has been removed for FDI in defense

- The ‘Buy Indian IDDM’ (indigenously designed, developed and manufactured) has been introduced to encourage indigenous design, development and manufacture of defense equipment.

- The Central Government has implemented a Defense Offset Policy that counterbalances the nation’s huge defense imports.

India''s defence budget, 2017-18

India’s Defence budget was increased to Rs 2.74 lac crore for 2017-18, a rise of 6% from the 2016-17 allocation of Rs.2.58 lac crore. This budget includes Rs.86,448 crore allocated solely towards capital outlay for the modernization of the military. Although procurement spending in India has been constrained over the last three years due to increased personnel costs, there will be a renewed focus from 2017 onwards on the modernization of India’s military. Increase in military spending will be driven by a $250 billion investment towards the modernization of its firepower procurement programme. The Central Government aims to raise domestic arms procurement from 40% to 70% of the total within five years, thereby also cementing India’s status as the world’s largest arms importer. The Central Government has already signed deals to buy new submarines, howitzers, fighter jets and helmets.

Growth drivers

- Changing geo-political scenarios on India’s borders and internal security requirements may necessitate continual augmentation of its defense and homeland-security equipment.

- India’s current Defence-based requirements are mainly met through imports. The opening up of the Defence sector for private sector participation will allow foreign original equipment manufacturers (OEMs) to enter into strategic partnerships with domestic companies.

- A recommendation was made by a key Defence ministry panel that Indian military spending should be at least 2.5% of the GDP. This year, the defense budget forms a scarce 1.62% share of the GDP.

- The Make in India campaign was launched in 2014. Its objective in the realm of defense was boosting manufacturing, promoting self-reliance, indigenisation, achieving economies of scale, developing capabilities for export, transfer of technology and domestic research and development.

- Contractual offset obligations worth approximately $4.53 billion are likely to materialise over the next five or six years.

Highlights over the last three years

- The Ministry of Commerce has granted 333 industrial licenses to private firms for Defence manufacturing as per the Department of Industrial Policy and Promotion

- Over the last three years (FY15-FY17), 147 contracts worth >Rs 2.96 lac have been signed and 134 proposals worth > Rs.4.45 lac crore have been approved (100 of them fell under the ‘Buy and Make’ in India category).

Indian defence industry is faced with inter alia policy and structural challenges, slow pace of indigenisation, modernization, R&D/technologies, pricing, processing time involved for procurement tenders, long period required for contract execution etc. challenges.

Outlook

India’s Defence sector has already picked up some best practices such as putting a structured procurement process in place and implementing an offset policy. In 2010, India’s Defence spending was pegged at $38.17 billion. This is expected to almost double to $64.07 billion in 2020. India is all set to become the third largest military spender in the world by 2018, third only to the United States and China. (Source: Financial Times).

Shipbuilding sector overview

As of April 2016, the global shipbuilding order book was estimated to be ~280 million deadweight tonnages. China, South Korea and Japan accounted for more than 90% of this global order book. The Indian shipbuilding industry accounted for a mere 0.45%. The Indian shipbuilding industry comprises companies that build ships and other underwater equipment for the naval defense, shipping and fishing sectors. There are 28 major shipyards in India currently -two under the Ministry of Shipping, four under the Ministry of Defense, two under State Governments and the remaining 20 in the private sector. As on 31st December 2015, India had a fleet strength of 1,246 vessels.

Importance of the shipbuilding industry

- The shipbuilding industry has a similar impact on the Indian economy as the infrastructure sector due to higher multiplier effect on investment and turnover (11.6 and 4.2 respectively) and high employment potential due to multiplier effect of 6.4

- The shipbuilding industry is strategically important due to its role in national defense, energy security and for developing heavy engineering.

- As per a Ministry of Defence press release, at present all major warships and submarines under construction are being built at Indian shipyards (both DPSUs as well as Private Shipyards)

(Source: www.pib.nic.in)

Governmental initiatives

As per the tenets laid down under the Shipbuilding and Ship Repair Policy, 2015, infrastructure status has been given to shipyards. With this inclusion, shipyards will be able to avail flexible long-term loans with relaxed ECB norms and issue infrastructure bonds to meet working capital requirements. The Central Government has introduced a Rs.4000 crore-Shipbuilding Financial Assistance Policy for a period of 10 years (starting April 1st 2016) to encourage domestic shipbuilding. Financial assistance will be grated to Indian shipyards equivalent to 20% of the lower of ‘contract price’ or the ‘fair price’ beginning 1 April, 2016. This rate of 20% will be scaled down by three percentage points every three years, starting with 20% during the first three years, 17% for the next three and so on. All governmental departments or agencies shall undertake bulk tendering for their vessel-related requirements with deliveries starting from 2016-17, with a right of first refusal for Indian shipyards. From 2025 onwards, only procurement of Indian-built vessels will be permitted. Finally, to promote ease of doing business, the Government of India has simplified tax compliance procedures for shipyards while procuring duty-free goods for shipbuilding and repair.

Growth drivers

- India’s Maritime Agenda 2010-20 targets to increase India’s share of the global shipbuilding Industry to 5%

- India has a coastline of 7,517-km with potentially navigable waterways of up to 14,500-km

- The Indian Navy is on a modernization drive and looks to introduce various new naval vessels in the coming years

- India’s maritime industry supports 90% of India’s trade by volume

Although the global shipping industry has been beset with slowdown due to declining demand and overcapacity, the demand for various vessels and barges etc. from the Government establishment/Indian Navy offsets the challenges.

Outlook

The revival of the shipbuilding sector is a key part of the Central Government’s Make in India initiative. New orders should trickle in FY17 onwards on the basis of the 10-year policy package. The Central Government is targeting to increase India’s share of the global shipbuilding industry from current levels of 0.45% to 5% by 2020.

Discussion on Financial Performance with respect to Operational Performance

Continuing focus of the management is consistently on undertaking better manufacturing processes, improved productivity and optimization of resource for improvement in performance aimed at achieving results better than the trend witnessed in the industries in which the Company operates. Viewed in this backdrop, the Company’s performance for the year under review is considered to be reasonably satisfactory.

Overall outlook for the current year

Wagons procurement order by IR for the current year is yet to be announced and uncertainty in this area has become a norm. The efforts of the Company to develop other verticals for mitigating dependence on a single product resulted in award of two prestigious orders by Indian Navy and National Institute of Ocean Technology under the Ministry of Earth Sciences for naval barges and coastal research vessels respectively, execution of which has already commenced with the Steel Cutting Ceremony held in the august presence of the senior officials of the respective customers at Titagarh plant in Barrackpore on May 9, 2017

The Company is in a unique position of being equipped with the technology for manufacture of Metro Coaches and is geared to seize the opportunity presented by this segment which is manifested in it being technically qualified in a tender floated in Maharashtra, though the contract was awarded to a foreign entity. However, the Company would continue to pursue orders for supply of Metro Coaches in collaboration with the Company’s recently set up subsidiary- Titagarh Firema Adler SpA in Italy.

Apart from being the first mover in manufacture of Rail Coaches and having successfully executed the repeat orders for EMU/ MEMU to Indian Railways, the other vertical the Company has identified with great potential for growth is- Defence. Pursuant to issue of Industrial License by the Government of India (GOI) to the Company, the participation in the tenders of the Defence establishment of India has been continuing and orders expected from this business should propel the Company’s performance to greater heights in future.

A joint venture company: Matiere Titagarh Bridges Private Limited has been set up in India in January, 2017 with equal stake in its equity of Matiere and the Company as per the joint venture agreement signed with Matiere SAS, France (Matiere) for manufacture of metallic bridges. The infrastructure being a key driver for Indian economy, the Directors believe the Bridges space is going to play an important role in the Company’s portfolio.

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

3. Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), vide its notification in the official gazette dated February, 16, 2015, notified the Indian Accounting Standards (IND AS) applicable to certain classes of Companies. IND AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For Titagarh Group, IND AS is applicable from April 1, 2016, with a transition date of April 1, 2015. The reconciliation and the effect of the transition from IGAAP to IND AS have been provided in the notes to standalone and consolidated financial statements.

4. Dividend

The Board of Directors at its meeting held on 19th May, 2017 has recommended dividend of Forty percent i.e. Re 0.80 per share on 11,54,45,620 equity shares of Rs.2/-each fully paid up for the Financial Year ended 31st March, 2017 subject to declaration by shareholders at the ensuing Annual General Meeting.

5. Employee Stock Options Scheme/Change in Share Capital

Pursuant to approval of the shareholders, Nomination and Remuneration Committee (also functioning as Compensation 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 H2/- each fully paid as per the ESOS.

Options resulting 27,500 Equity shares and 33750 equity shares allotted on August 22, 2016 and May 19, 2017 respectively to the eligible employees upon exercise by them in conformity with ESOS led to increase in the paid up equity share capital to Rs.23,08,23,740/- as at 31st March, 2017 and Rs.23,08,91,240/- as at May 19, 2017 consisting of 11,54,45,620 equity shares of H2/- each fully paid up. The equity shares so allotted rank pari-passu with the existing equity shares of the Company.

Further, in accordance with the order of the Hon’ble High Court of Calcutta sanctioning the Scheme of Amalgamation of the Company’s four wholly owned subsidiaries with the Company which became effective from July 13, 2016, Authorized Share Capital of the Company was increased to Rs.228.10 crore divided into 88,05,00,000 equity shares of Rs.2 each and 52,00,00,000 preference shares of Rs.10 each. The disclosures as required under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 have been placed on the corporate website of the Company www. titagarh.in.

6. Material Changes and Commitments after the balance sheet date:

No material changes and commitments have occurred from the date of close of the financial year, to which the financial statements relate, till the date of this report, which might affect the financial position of the Company.

7. Investor Education Protection Fund (IEPF)

As stipulated by the applicable provisions of the Companies Act, 2013 read with IEPF (Accounting, Audit, Transfer & Refund) Rules, 2016 (‘the Rules’) all unpaid or unclaimed dividend required to be transferred by the Company to the IEPF has been transferred and underlying shares shall also be transferred to the demat account to be created by IEPF Authority according to the Rules, details whereof are provided on the Company’s website: www.titagarh.in.

8. Transfer to Reserves

The Directors do not propose to transfer any amount to the general reserves.

9. Risk Management, Risks and Concerns

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.

Risk management is an integral part of the Company’s risk management policy adopted by the Board with periodic review by the Audit Committee and the Board. Prudence and conservative dealing with risks is at the core of risk management strategy being followed by the Company. The risks, both internal and external which the Company is exposed to include macro-economic, regulatory, strategic, financial, operational, value chain, human resources etc. and each of them is taken into consideration for development and maintaining a robust mechanism for mitigation which is evolving with time and developments within which the Company operates.

10. Subsidiary Companies and Joint Venture

A report containing the details required under Section 134 of the Companies Act, 2013 (‘the Act’) read with Rule 8(1) of the Companies (Accounts) Rules, 2014 in respect of performance and financial position for the financial year ended March 31, 2017, of subsidiaries: Cimmco Limited (“Cimmco”), Titagarh Agrico Private Limited (TAPL) (to be merged with Cimmco), Titagarh Capital Private Limited, Titagarh Wagons AFR, France, Titagarh Singapore Pte. Ltd., Singapore; and Titagarh Firema Adler SpA and Joint Venture Company: Matiere Titagarh Bridges 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 this Annual Report.

Pursuant to approval of the respective Board of Directors of Cimmco and TAPL, a scheme of amalgamation (the Scheme) has been filed before the Honourable National Company Law Tribunal (NCLT) and pursuant to its order, received the approval of the shareholders and creditors in May, 2017 while the other formalities for obtaining sanction of the NCLT are being met.

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 (CEHPL), Titagarh Marine Limited, Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited have been amalgamated with the Company. Consequently Cimmco Limited, a subsidiary of CEHPL has become direct subsidiary of the Company w.e.f. July 13, 2016.

11. 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.

12. Number of Board Meetings

The Board of Directors met Eight (8) times during the financial year 2016-17 as per the details provided in the Corporate Governance Report forming part of Annual Report.

13. 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. The Company has been informed that the said loan, guarantee and security are proposed to be utilized by each recipient for its general business/corporate purposes.

14. 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.

15. Composition of Audit Committee

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

During the year all recommendations made by the Audit Committee were accepted by the Board.

16. Related Party Transactions

All Related Party Transactions (RPTs) are entered into by the Company 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. The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act and as mentioned in form AOC-2 of the Rules prescribed in the Companies (Accounts) Rules, 2014 under the Act are annexed hereto and marked as Annexure DR-3.

17. 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.

18. Management Discussion and Analysis (MDA)

In compliance with the Regulation 34 of the LODR, MDA forms part of this Report. The contents of MDA with respect to Industry view/macro data are sourced from the information available in public domain.

19. Internal Control System

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

a. That its assets are safeguarded

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.

20. Vigil Mechanism

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

21. 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. One complaint lodged with the Committee during the financial year 2016-17 was duly disposed of/resolved satisfactorily.

22. Directors and Key Managerial Personnel

Shri Sudev Chandra Das, Independent Director, resigned from the Board of Directors with effect from 27th October, 2016.

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), the Audit Committee and subject to the approval of the members, the Board in its meeting held on 14th December, 2016 had accorded its approval to the reappointment of Shri J P Chowdhary as the Executive Chairman of the Company for a further period of 5 (five) years w.e.f. 8th January, 2017 and the change in minimum remuneration of Shri Umesh Chowdhary, Vice

Chairman & Managing Director, w.e.f. 1st January, 2017 in the event of inadequacy of profits or loss during the remaining period of his term ending on 30th September, 2020.

Shri Sudipta Mukherjee, Wholetime Director retires by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

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

During the year under review, there was no change in the Key Managerial Personnel of the Company.

23. 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 2016-17 as per the details set out in Corporate Governance Report.

24. 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, by all the Independent Directors of the Company have been made.

25. Remuneration Policy and remuneration

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

26. 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, 2017 had been followed in preparation of the said accounts and there were no material departures there from requiring any explanation; The directors had 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 of the Company for that period;

- The directors had taken proper and sufficient care for the maintenance of 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 directors had prepared the Annual Accounts on a going concern basis; and

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

- The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

27. Statutory Auditors

S R Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Company appointed at the Seventeenth AGM until the conclusion of the ensuing Twentieth AGM complete their term on rotation basis and the Board has pursuant to the recommendation of Audit Committee, decided to place the appointment of Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants, at the ensuing AGM for a term of five years.

28. Consolidated Financial Statements

In accordance with IND-AS 24 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. 7(a) in the Notes on Accounts is self-explanatory, requiring no specific response from the Directors at this stage, however the recoverable amount aggregating Rs.854.81 lacs is subject to ongoing legal proceedings which are being closely monitored and expedited to the extent within the Company’s control.

29. Cost Auditors

M R Vyas & Associates, Cost Accountants have been reappointed 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 2017-18 subject 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 ended 31st March, 2017 would be filed as stipulated by the applicable provisions of law.

30. Secretarial Auditor

Secretarial Audit has been conducted by Vanita Sawant & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

31. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act, 2013 during the financial year ended March 31, 2017.

32. Particulars of Remuneration of Directors/KMP/ Employees

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 (the Rules) is annexed and marked as Annexure DR-5. The information pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report, is readily available for inspection by the members at the Company’s Registered Office between 10.30 A.M. to 1 P.M. on all working days up to the date of ensuing AGM. Should any member be interested in obtaining a copy including through email ([email protected]), may write to the Company Secretary at the Company’s Registered office.

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, 2017 was 506.

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

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

34. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2017 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, the Company makes, inter alia, donations to the charitable institutions directly and through philanthropic organizations engaged in providing medical, education and other reliefs to the economically weaker sections of the society. Industrial Training Institute (the "ITI") set up on the 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.

35. 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, 2018 have been duly paid.

36. 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.

37. Acknowledgement

The 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 19, 2017 Executive Chairman


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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