You are here » Home » Companies » Company Overview » Texmaco Rail & Engineering Ltd

Texmaco Rail & Engineering Ltd.

BSE: 533326 Sector: Engineering
BSE 00:00 | 28 Jan 41.50 1.30






NSE 00:00 | 28 Jan 41.55 1.25






OPEN 41.00
VOLUME 246923
52-Week high 42.75
52-Week low 21.83
P/E 27.67
Mkt Cap.(Rs cr) 1,336
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 41.00
CLOSE 40.20
VOLUME 246923
52-Week high 42.75
52-Week low 21.83
P/E 27.67
Mkt Cap.(Rs cr) 1,336
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Texmaco Rail & Engineering Ltd. (TEXRAIL) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 10thOperational Annual Report of the Company along with the Audited Financial Statements ofthe Company for the year ended 31st March. 2020.


2019-20 2018-19
Operating Profit (PBIDT)* 15341.92 16615.97
Less: Interest (Net) 6630.21 4899.25
Gross Profit (PBDT)* 8711.71 11716.72
Less: Depreciation 3590.85 2895.96
Profit before Taxation and Exceptional Items 5120.86 8820.76
Less: Exceptional Items 14991.97 -
Profit before Taxation (9871.11) 8820.76
Less: Tax Expenses
Current Tax including tax related to earlier years 636.22 1920.65
MAT Credit entitlement (258.00) (1794.45)
Deferred Tax Liability/(Asset) (3665.30) 1166.58
Profit after Taxation (6584.03) 7527.98
Add: Balance brought forward from previous year 17633.65 11414.07
11049.62 18942.05
Dividend paid (Incl.Tax) 949.85 662.14
General Reserve - 500.00
Other Appropriations (17.60) 146.26
Balance Carried Forward 10117.37 17633.65


* before Exceptional Items

During the year your Company has acquired a Foundry at Urla - Raipurwhich has increased its total installed capacity to 42000 MT per annum. The results forthe FY'20 are accordingly after incorporating the financials of this Unit from 1stApril 2020.


Your Directors have pleasure to recommend payment of a dividend of 10%i.e. INR 0.10 per Equity Share of face value of INR 1 each for the year ended 31stMarch. 2020 inspite of the Company incurring loss for the current year on account ofprovision in respect of certain legacy contracts of Rail EPC Division which were underexecution for long and its pending obligations completed during the year.

The Gross Turnover for the year stood at INR 20202.75 mn. The GrossProfit for the year i.e. Profit before Depreciation and Tax (PBDT) and Profit before Tax(PBT) and Exceptional Items were INR 871.17 mn and INR 512.09 mn respectively. The NetProfit was INR (658.40) mn after providing exceptional items and net tax liability of INR1499.20 mn and (328.71) mn respectively for the year as per the Profit and Loss Accountdrawn up in accordance with the Indian Accounting Standards as specified under theCompanies Act 2013.


The performance of Rolling Stock Division of your Company for the yearwas severely impacted due to poor availability of wheel sets and certain other criticalcomponents from approved vendors for execution of both Indian Railways and non-IndianRailway Wagon orders.

Though the Ministry of Railways Govt. of India finally granted thepermission for import of wheel sets for private parties its availability in short termwas challenged and thereafter eruption of COVID-19 from January 2020 onwards furthercrippled its availability.

Nonetheless the requirements for the wagons in line with the variousschemes announced by Railways including General Purpose Wagon Investment Scheme(‘GPWIS') permitting private investment in general purpose wagons etc.resulted in growth of demand of such wagons by end-users. Your Company continues to bebenefitted with a resilient position in the wagon segment and closed the year with ahealthy order book position.

The Rail EPC Division of your Company was sluggish in its performancedue to rising cost and tremendous pressure on working capital due to delay in payments /approvals by customers. The pressure of completing the inherited legacy contracts alsotook its toll. The Company on a prudent accounting policy made a provision of INR 1499 mnin respect of certain old contracts outstanding being doubtful of realisation. The focusof Indian Railways is on bringing about a transformation by investing heavily ininfrastructure including track infrastructure & systems and it augurs well for RailEPC business of your Company. The ambitious plan of Indian Railways to secure the requiredinfrastructure for complete electrification of the rational railway network will furtherstrengthen this business segment. The Rail EPC business of your Company is fully geared toseize the emerging opportunities from the focussed key areas of Indian Railways viz.expansion of metro network dedicated freight corridor doubling of trackselectrification etc.

The Steel Foundry Division of your Company has maintained its steadyperformance both on domestic & export fronts. With the aided capacity of the Urlaunit-Raipur new products for domestic markets specially in hand moulding segment havebeen successfully developed by the Foundry and well received by the Customers includingcritical castings for defense sector.

The world including India has suffered a significant setback with theonslaught of COVID-19 pandemic and this pandemic has resulted in business in all segmentsundergoing a sea change. Presently there is an atmosphere of uncertainty in the countryand customers are going a bit slow in crystallising their future demands. This is bound toaffect to some extent the business scenario in the segment of your Company operates.Fortunately the demand in the long run is robust due to commitment of the Govt. of Indiato revitalise the Rail segment and ease the roads from the freight movement. Neverthelesswith every challenge there lies an opportunity and it is expected that post COVID-19 therewill be a surge of pent up demand and economy will rebound robustly specially in the areasof upgrading of infrastructure rail & metro network etc. The move to privatise thepassenger trains will open new windows of opportunities in this field.


As required under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the significant financial ratios are given below:

Particulars 2019-20 2018-19 2017-18
Operating Profit Margin* % 5.62 6.77 2.05
Debtors Turnover Times 2.84 2.27 1.68
Stock Turnover Times 3.41 4.13 3.84
Debt Equity Ratio Times 0.73 0.51 0.48
Current Ratio Times 1.42 1.47 1.56
Interest Coverage Ratio* Times 1.65 2.50 1.53
Net Profit Margin % (3.54) 4.01 1.13
Return on Net Worth % (6.41) 6.60 1.25


* before exceptional items

The operating margins were impacted due to Slump in Global Economy.

The Net Profit and Return on Net worth were impacted as during theyear Rail EPC Division - Kalindee has completed/ brought close to completion number oflegacy contracts. As a result of such progress a broad review of impairment of Assetsincluding receivables and costs to completion has been carried out and amounts outstandingagainst the respective heads have been evaluated. On the basis of such review theManagement has decided to make certain provisions for impairment.

Increase in Debtors Turnover Ratio is on account of lower realisationat the end of year due to lock down. Also there were delays in realisation from customersfor Project Work.

The increase in Debt Equity Ratio is mainly on account of additionalworking capital facility.

The decrease in Interest Coverage Ratio is mainly on account ofadditional working capital borrowed during the year.


I. Rolling Stock Division

a. Freight Car & Coachings

The year begun with a moderately healthy order book position for theDivision. Unfortunately the year turned challenging for the Division owing to bottlenecksarising out of non-availability of certain critical bought out components viz. wheel setsetc. In fact inadequate supply of wheel sets from RWF the only source for procurement ofwheel sets in India for both Railways and non-IR customers under ‘Make in India'initiative of Govt. of India adversely affected the wagon production of your Company.Wheel sets' requirement of Indian Railways not being fully catered RWF was not in aposition to meet the requirement against non-IR contracts affecting your Company'sproduction during the year for private wagons e.g. Auto car Container Wagon etc.

Your Company vigorously pursued with Indian Railways for givingpermission to import wheel sets to tide over the non-availability of wheel setsparticularly for non-IR customers. Pursuant to the continuous follow up finally in endAugust 2019 Railway Board gave the permission to import wheel sets for a limited period.Accordingly your Company had placed order for wheel sets on overseas suppliers at Chinain September 2019 delivery of which was to take place from January 2020 onwards. With theoutbreak of pandemic COVID-19 the 1st and 2nd consignment of wheelsets got delayed and with the spread of the pandemic manufacture of further wheel setswas severely affected leaving your Company with no other option but to depend only on theuncertainties of the supplies of RWF for the entire production requirement.

During the year Railway Board did not place order against the tenderfloated during FY'19. The only order Railway Board could release on your Companyduring the current year was 529 units of BTPN wagon (under 30% option clause againstearlier order placed in 2018). Also due to sluggishness of the market requirement of newwagons was low.

During the year Railway Board announced ‘Liberalized SpecialFreight Train Operator' (LSFTO) scheme superseding the earlier ‘Special FreightTrain Operator' (SFTO) scheme and the ‘Liberalized Wagon Investment Scheme'(LWIS). Under the LSFTO scheme transportation by public/ private sectors have beenpermitted for specific commodities like bulk fertilizers bulk cement automobiles flyash bulk chemical petrochemical liquid ammonia bulk alumina LPG edible oil etc.requiring Special Purpose Wagons. Since the eligibility to procure various types of wagonsunder LSFTO scheme includes units engaged in Transport & Logistics Port & LandTerminal Operations Container Train Operators Manufacturers Wagon Leasing Warehousingetc. it is expected that requirement for the Special Purpose wagons would come upsubstantially in the near future. Container traffic is again picking up and consequentrising demand for container wagons is envisaged.

With further liberalisation of the existing GPWIS scheme opportunitiesare available to the customers for procurement of conventional Indian Railways wagons toaugment their transportation requirement of various commodities.

Certain reforms in the transport sector and the opening of DedicatedFreight Corridor (DFC) coupled with the Government's determined approach on DedicatedFreight Corridor projects to create additional freight capacity by inducting somespecially designed wagons like Double Stack Container Wagons Auto car with higher MMDSteel Coil carrying Wagons etc. to meet increasing demand would certainly do good toyour Company to improve its order book position.

To facilitate rail transportation of 2-wheelers your Company hasdeveloped side loading option on the existing Auto car wagon which is first in theIndustry and could be a game changer for transportation of 2-wheelers through rail asIndia presently produces 2 crore 2-wheelers annually most of which are transported byroad.

From the environment point of view Government has given a lot ofimportance for proper evacuation of fly ash. Consequently RDSO has conducted certaintrials at the Works of your Company followed by further trials at NTPC-Rihand where theconvenient use of BTAP wagon for bulk transportation of fly ash with pneumatic sideunloading at 2 bar pressure was demonstrated providing unique advantage compared to anywagon for bulk transportation of fly ash. Orders received from NTPC and Birla Corporationfor BTAP wagon for bulk transportation of fly ash are currently under execution. Besidesfreight movement passenger traffic is the key focus of Indian Railways. Saddled withhigher population of outdated passenger coaches Indian Railways is in advanced stage ofevaluating these coaches for replacement which would pave the way of further businessopportunities for your Company. Having created the facility of manufacturing PassengerCoaches Loco Shells your Company feels confident in participating in the initiatives ofIndian Railways for acquisition of new passenger coaches.

b. Locomotive Components / Assemblies

As advised earlier your Company is now well established as a supplierof Electric Loco Shell Assemblies and other Loco Shell components to the variouslocomotive plants of Indian Railways. With the planned total switch-over to ElectricTraction by Indian Railways within the next two years the strong demand for Electric LocoShells by the Production Units (CLW & DLW) of the Railways from private parties isexpected to be sustained in future also.

Your Company steadily stepped up the production of complete ElectricLoco Shells from 40 Shells in FY'18 to 65 Shells in FY'19. The Division was ableto sustain the production in FY'20 also with a production of 64 shells. Theturnover of the Electric Loco shells and Assemblies in FY'20 has been INR 844.5 mn asagainst INR 784.2 mn in FY'19 a growth of 13% compared to the previous FY. While thedemand of Electric Loco Shells from Indian Railways is expected to be sustained in thecoming years the business has attracted a number of new players in the field.Nevertheless with aggressive marketing efforts we hope to protect our share in thebusiness.

II. Hydro Mechanical Equipment

The turnover of the Division for the FY'20 stands at INR676.1 mn against previous year's turnover of INR 550.7 mn. The despatches ofcertain finished inventories were affected towards the end of March. 2020 due toimposition of complete lockdown in view of COVID-19 outbreak.

Although there have been some setbacks in few sites progress due tounprecedented snowfall on two lengthy durations but in general the projects areprogressing well and some are expected to be commissioned during the current year.TamaKoshi Nepal project is also heading towards commissioning with successful completionin milestone of reservoir impounding. Installation work at Subansiri the largest Hydropower project is also gearing up.

Efforts are afoot to effect despatches and accelerate installation workat sites as soon as the present COVID-19 restrictions are eased thereby boosting theperformance of the Division.

III. Bridge & other Steel Structures

The FY'20 was basically utilised to consolidate the functioning ofthe Bridge Division of your Company by way of organising more orders as well asmodernisation of fabrication facilities. During FY'20 your Company has installed CNCplasma cutting machine CNC drilling machine Automatic H - beam welding machine Girdersstraightening machine plate straightening machine automatic bevelling machine andaugmented fabrication facilities by way of construction of New sheds. To enhance theproduction capacity the Company has organised large-scale modernisation of thefabrication facilities.

During the year the Division has achieved a turnover of INR 300 mnagainst the last year's turnover of INR 178 mn. The Division had bagged a major orderof INR 980 mn from NFRLY against very stiff competition and Reverse auctioning. The workconsists of fabrication & erection of steel bridge girders in section between Aizawland Bhairabi. Your Company has also participated in number of other major bridge contactsin NFRLY. Your Company expects to be favoured with orders against few more major bridgetenders in the coming years which are on way. Presently the Division is also executing twonos. contracts of Bridge girders fabrication as well as construction of Railway bridgeincluding foundation & sub-structures at Bangladesh. The division would put all outefforts to double its turnover in FY'21 considering order book of emerging workopportunities.

IV. Texmaco Hi-tech

The turnover of the division during FY'20 was INR 147 mn. Theturnover was affected due to lowering of demand for components of CBS shells for the yeardue to anticipated design change by the customer viz. Alstom coupled with deferredrequirements of CBS Primary parts.

The developmental work of Platform and Cab Structures for GE DieselLocomotives during the year progressed well. Pending the approvals and deferred CBSrequirements due to the outbreak of COVID-19 and uncertainty caused by it the performanceof the Division for the first two quarters of FY'21 is likely to be adverselyaffected.


During the year the turnover of the foundry stood at INR 3481mn against that of INR 2656 mn in the previous year i.e. presenting a healthy growth. Thetotal production & despatch were 23960 MT & 21898 MT respectively against 18567 MT& 18638 MT from the previous year an increase of 29 % & 18 % respectively.

However the reduced domestic demand of bogies & couplers becauseof sluggish supply of wagons owing to insufficient supply of Railway wheel sets to wagonbuilders by the Indian Railways had adversely affected the wagon industry andcorrespondingly the performance of the Division. It was only in second half of FY'20that due to the Indian Railways allowing imports of wheel sets for private wagonsresulting in increased demand of bogies to some extent the Division witnessed areasonable growth in its performance. On the export front the demand remained steady andaround 30 to 35% of turnover of the Division was derived from export.

During the year the Division has started production & dispatch ofCMS crossing a new track product on regular basis. Your Company do expect surge in thedemand of CMS crossing and is gearing up the capacity accordingly. The Division hasbuilt-up a healthy order book position of CMS crossing and is progressively increasing thedespatches to meet the increased demand.

The Urla unit at Raipur had already commenced regular production fromMay 2019 onwards under the Company's management. The Urla plant is manufacturing handmoulded heavy castings and is also approved to manufacture Defence castings for shipbuilding etc. apart from the regular Railway castings.

The whole world is facing an unprecedented crisis with the widespreadof COVID-19 pandemic and global economies are nose-diving even in this difficult time. TheCompany is ensuring that its export to North American market is maintained unaffected.

In the given situation your Company do anticipate that the demand forIndian wagon castings may go down initially during FY'21. However with the focus ofthe Indian Railways on boosting its infrastructure segment and privatisation of variousservices the demand for Railway castings will see growth in the second half of the yearand will support the Division to ensure steady performance.


Your Company's Rail EPC Division faced challenges due to adversemarket & stressed working capital conditions during FY'20. This has resulted insubdued performance during the year. Execution activities in major projects though havebeen maintained at reasonable speed. The focus of the Division during the year was tosuccessfully complete commissioning activities in all major legacy projects likeSitapur-Mailani Gauge Conversion MMTS Hyderabad Kota-Bina Jhansi-Bhimsen etc.

The Division has commenced execution activities in Bengaluru MetroTrack package which is the single largest ballast-less track contract awarded in thecountry.

There have been relentless efforts on closing and realizing the duesfrom old contracts which have started yielding good results. Focus on efficient executioncoupled with speedy realisation of old receivables will help the Division in improving theworking capital cycle and put it in a healthy growth trajectory. The Division is presentlyexploring to acquire new signalling & telecommunication contracts involvingtechnological innovation which will certainly strengthen qualitative performance of theDivision. The Division had made a significant provision during the year ended 31stMarch. 2020 amounting INR 1499.20 mn on account of impairment of assets in respect ofcertain legacy contracts. This has led to decline in profitability of the Division.

Rail Electrification

During the year Bright Power a pioneer in the field of OverheadElectrification of Railways has achieved a turnover of INR 2741 mn and has successfullycommissioned 423 TKM Railway Electrification works against the targeted 368 TKM. TheDivision has also carried out successfully the work in Metro sector like refurbishment ofsub-station at Kolkata metro and electrification of new metro line at Pune Metro prioritysection in record time. The Division as reported earlier has extended its reach into thenew area of OHE and Sub-Station maintenance and subsequent to the order for maintenance ofOHE and Sub-station between Bengaluru and Mysore section for a period of 2 years fromSouth Western Railway it diversified into the maintenance activities of railwayelectrical assets between Mysore-Bidadi section in Karnataka. The boost to theelectrification work being carried out by Indian Railways and unwavering approach onupgradation of Railway network will overlay new vistas for the growth of the business ofthe Division.


A Report on the performance and financial position of each of thesubsidiaries associate and joint ventures included in the Consolidated FinancialStatement and their contribution to the overall performance of the Company is provided inForm No. AOC-1 as required under the Companies Act 2013.

The Consolidated Financial Statements of the Company its subsidiariesassociate and joint ventures prepared in accordance with the Companies Act 2013 andapplicable Indian Accounting Standards along with all relevant documents and theAuditors' Report form part of this Annual Report.

i. Belur Engineering Private Limited

Belur Engineering was incorporated as a wholly owned subsidiary of theCompany in the FY'17 to supplement your Company's business streams throughforward & backward integrations. Presently Belur Engineering has leased out itsparcel of land located at Sodepur NortRs. 24 Parganas – West Bengal to your Companyfor carrying out its execution of project works.

ii. Texmaco Rail Electrification Limited

During the FY'20 your Company has incorporated a wholly ownedsubsidiary ‘Texmaco Rail Electrification Limited' on 26th February2020. This has been formed to explore business potential in the niche field of RailElectrification.

iii. Texrail SA (Pty) Limited

Texrail SA is exploring opportunities in new Standard Gauge RailwayLines in East Africa and Democratic Republic of Congo and Mozambique. During theFY'20 Texrail SA has entered into a couple of MoUs for exploring setting up JVs forRail EPC projects.

iv. Texmaco Transtrak Private Limited

Post signing of an arrangement with CAF Spain the technology providerfor electronic interlocking and Train Protection and Warning Systems the Company hastaken up the approval process with RDSO. Details of the system are under discussions withRDSO while a prototype has undergone environment test in India. The approval process hasbeen delayed pending RDSO inspection which is likely to take place once normalcy isrestored post COVID-19.

v. Tex maco Rail Systems Private Limited

During FY'20 the name of Tex maco Signalling Systems PrivateLimited was changed to ‘Tex maco Rail Systems Private Limited' w.e.f. 11thJune 2019. The company has ceased to be a wholly owned subsidiary of your Company w.e.f.22nd July 2019 post allotment of shares to other investors and continues as asubsidiary thereafter. Tex maco Rail Systems is identifying the evolving areas in thefield of signalling equipment to strengthen your Company's Rail EPC business forsignalling.


Tex maco Defence Systems Private Limited

During the FY'20 Tex maco Defence Systems Private Limited(‘Tex maco Defence') has ceased to be the subsidiary of your Company effective30th March. 2020. Your Company continues to hold 41% of shareholding in Texmaco Defence. Tex maco Defence is in the process of identifying a host of low hangingfruits in the Defence segment by entering into strategic arrangement with OEM suppliers ofcertain Defence equipment.

During the FY'20 Tex maco Defence has signed few MoUs forexploring the opportunities in the Indian market. Tex maco Defence has exclusivearrangements with some companies and it is in the process of discussions with certainglobal names and companies from CIS Nations. Tex maco Defence is confident that with the‘Make in India' initiative propagated by the Government of India theopportunities for it in the defence segment will open up.


i. Touax Tex maco Railcar Leasing Private Limited

The FY'20 continues to witness a positive trend for the leasingbusiness for wagons. The old rigid supply chains of various large industrial consumers ofbreak-bulk raw material are now loosening to accept other alternatives. Mainly presentedin the form of various bulk wagon types now freely available which hitherto reservedonly for the IR and more so always in short supply. This has led to the demand for wagontypes both conventional and commodity specific which are now available for privateownership and leasing. The JV company expects more third party logistic operators to enterthe bulk market under the new GPWIS scheme which will further drive up volumes. The IndianRailways continues in its effort to drive more cargo back to rail from road with moretrade friendly measures ranging from freight rationalisation and easing of freightpolicies. However the recent economic downturn has not been the most conducive to asizeable increase in the current order book on short term basis.

This of course is expected to change in the coming months of thecurrent year. The JV company has now 12 rakes in operation and confirmed orders for 6 morerakes. The JV company is hopeful of signing good size of orders in the near future.

ii. Wabtec Texmaco Rail Private Limited

Wabtec Texmaco Rail Private Limited the JV company has achieved asales turnover of INR 440.1 mn during the FY'20. The JV company has received RDSOapproval for manufacturing and supply of indigenous upgraded high capacity Draft Gears asper RDSO specification. Manufacturing and supply of these Draft Gears had since startedfrom the 2nd quarter of the FY'20. The JV company has also won majority ofthe tenders floated by various zones of Indian Railways for Draft Gears. ReceiverAssemblies export of which account for a major share of the JV company's businessshowed an upward trend from the 3rd quarter of the FY'20. Indigenousmanufacturing of the Wheel Chocks also commenced during the current year which resulted inincreased profitability. The market for other business products e.g. Friction WedgesBrake Blocks for non-IR customers etc. remained steady during FY'20. Efforts arebeing made for introduction of new products like Hydrojacks for removal and fitmentof Draft Gears Coil Guards for steel coil carrying wagons Bridge Plates for Automobilecarrying wagons etc. The JV company expects to further grow and improve upon its resultsduring FY'21.


The Company is actively pursuing the opportunities in field of exports.

The Steel Foundry Division of your Company sustained to excel in exporttotalling to INR 1124 mn i.e. approx 35% of its turnover. The execution of the projects inthe neigh bouring countries by the HME Division of your Company has picked up during theyear. The Rail EPC Division of your Company is well poised to seize the opportunities inthe export field. The Company is also exploring new products to expand its reach in theinternational markets.


A. Rolling Stock Division

a) The R &D has developed new designs of Container Carrier Wagonsand Fuel Tank Wagons for Sri Lankan Railways. These wagons have been developed as perinternational standards using modern design simulations tools for optimum payload designand have been successfully manufactured and commissioned.

b) For BCACBM wagon Side Loading option for two-wheeler has beendeveloped. This will facilitate transportation of two-wheeler through rail.

B. Steel Foundry Division

The R & D Centre of your Company is registered and recognised bythe Department of Scientific and Industrial Research (DSIR) Govt. of India. It is engagedin carrying out research and innovation for the development of various products &processes. It has helped the Company to develop new products improve product life throughprocess innovations develop light & efficient designs for higher and fastertransportation of goods & specialised cargos. This has enabled your Company in savingprecious energy and resources while improving cost effectiveness. The metallurgical lab ofour company an integral part of the R & D Centre has already received ISO/IEC 17025certification from NABL (National Accreditation Board for Testing and CalibrationLaboratories).

a) New Product Development:

1) A new design of high capacity (125T) bogie castings four newdesigns of yoke castings two new types of follower and two new types of draft gearhousing have been developed for North American market by unique metallurgical and processimprovement. This has enabled your Company to expand its export footprint in the USA.

2) A new grade of low alloy steel has been developed for groundexcavating application through unique metallurgical process improvement characterized byhigh hardness as well as high impact toughness.

3) Bogie casting and brake beam developed for Thailand Railways.

4) New design of Draft Gear Housing developed for Indian Railways.

b) New Process Development:

1) A new process of NDT inspection has been introduced resulting insubstantial cost savings

2) Single slag practice during steel making has been implemented toincrease productivity and increase cost savings.

Apart from the above the R & D Division of your Company has alsoundertaken the following projects:

1) Development of a computational model to simulate the mould fillingoperation and the resultant turbulent flow for different components.

2) Correlation of micro-structures of different low alloy steels withtheir chemical composition heat treatment process parameters and resultant mechanicalproperties to identify optimum heat treatment cycles for various steel grades. This wouldhelp to identify and eliminate deviations during heat treatment.

3) Correlation of parameters of moulding core making steel makingpouring and heat treatment operations of different components with the casting physicalproperties to identify defect types and their locations probable root cause of theiroccurrence and corrective / preventive actions for their minimization/ elimination. Thesestudies have helped in improvement of existing products and processes.

4) The R & D department has further undertaken in collaborativeprojects with reputed institutes such as Birla Institute of Technology (BITS –Pilani) to assist in improving the quality and life cycle of the products.


Our corporate and administrative offices are well connected with themanufacturing units through strong internet bandwidth. In house dedicated IT team of theorganisation is maintaining ERP applications for business operations and digitizationacross it's all operating units. To protect confidential information secureCorporate Overview Statutory Reports Financial Statements environment to prevent dataloss and IT infrastructure from external cyber threats the organisation continuouslykeeps upgrading its security system.


Human Relations focusses on internal resources for competitiveadvantage. It regards people as the most important asset of the organisation. HumanResource Management aims to enhance organisational performance by playing a proactive rolein developing relationship with employees of the Company. HR emphasises on thequantitative calculative and strategic aspects of managing the human resource in asystematic way. It promotes leadership skills amongst the people in the organisation whichboosts the morale of the employees and motivates them to demonstrate quality work for theinclusive growth.

HR functionally acts towards the continuous process of skilldevelopment by eliminating any disconnect between demand & supply of skilled manpowerbuilding the training framework skill upgradation building of new skills and innovativethinking for both fresher & experienced workforce of the Company. HR supports increating a non-discretionary healthy work environment whereby the human capital isencouraged to fulfil commitment towards achieving the objectives of the Company.


The Government's focus and measures taken for modernisation undervarious segments of Railway infrastructure and services – coaches and passengerservices electric locomotives electrification signaling etc. will continue tostrengthen the presence of the Rail EPC and Rolling Stock Divisions of the Company.Growing pace of electrification including track renewals bridge works and doubling oftracks remain advantageous to your Company. Indian Railways' plan to build 7high-speed rail corridors to provide faster rail connectivity across the country is alsoa positive for the business of your Company.

The comprehensive plan of Indian Railways to introduce ModernTechnology based rolling stock with reduced maintenance and focus on indigenisation ofrolling-stock in recent years will boost the continued presence of the company as leadingwagon manufacturer. The Private sector companies in the field are being encouraged toparticipate in new rail projects. Freight traffic is set to increase significantly due torising investments and private sector participation.

The Government's determined approach on Dedicated Freight Corridorprojects to create additional freight capacity to meet increasing demand certainly addsflavour to the business of your Company.

Due to the sluggishness in the global economy due to COVID-19 outbreak& its spread with plunging growth rate across the world in view of the uncertaintyover the potential macroeconomic condition the ultimate outcome of the massive impact ofCOVID-19 is not quantifiable. The overall environment is challenging however there issilver lining as the business has started picking up and your Company is confident ofovercoming any substantial impact with improved efficiency in operations.


As a corporate citizen Texmaco stands firm in its commitment to thesocial obligations for the up liftment of the society. With this urge the Companyalways endeavours towards taking CSR initiatives in various areas viz. Health EducationEnvironment Women Empowerment etc.

The Company continues to extend philanthropic services to the society.During the year the Company through the social and community welfare arm has providedfinancial support towards health and education (including educational sponsorships) to alarge section of deserving localites belonging to the unprivileged rung of the socialladder.

With the aid of your Company a self-sustaining Health Hub‘Arogyam' has been set up amidst the ecological balanced premises of theCompany's estate promoting health and well-being amongst the neighbour hood. Duringthe year the Alternative Therapy Centre which includes the services of TraditionalChinese Techniques (Acupuncture Electro-acupuncture Moxibustion Fire & PlasticCupping Tui Na) and Homeopathy has become a significant part of Arogyam Health Hubbesides a well-equipped Physiotherapy centre equipped with competent doctors and astate-of-the-art modern Gymnasium & Yoga centre. Arogyam has celebrated its 4thanniversary on 29th February 2020 at the K. K. Birla Kala Kendra an auditoriumset up for recreational activities of the employees & family members. The programmewas enlightened with the august presence of Padma Shri Dr. Raman Kapur eminentAcupuncturist from Sir Ganga Ram Hospital Delhi who addressed the houseful audience withhis educative presentation on benefits of acupuncture therapy.

In the field of Education Texmaco George Telegraph - Centre ofExcellence which was set up in collaboration with the renowned The George TelegraphTraining Institute to run vocational courses approved by The National Skill DevelopmentCorporation has made a mark by establishing its presence as a recognised vocationaltraining centre. It helps in assisting its students for employment by providing suitabletraining programmes and igniting amongst them the spark of entrepreneurship. The Companysince the outbreak of the pandemic COVID-19 has undertaken the drive towards campaigningfor general awareness for protection of the community against the deadly virus. YourCompany believes in fulfilling its CSR objectives and is constantly exploring newactivities to extend its benefit to the large section of the society. Despite bestefforts the Company has been unable to execute its ambitious plan towards CSR spend.

Your Company shall endeavour to undertake the CSR projects andactivities for the substantial well-being of the people in the community. The AnnualReport on CSR activities in enclosed as Annexure A.


Your Company continues to embrace a sustainability initiative with theaim of going green and minimising the impact on environment. Your Company had alreadyadopted the green initiative by sending Annual Report Notices other communication etc.through e-mail to the Shareholders whose e-mail address are registered with relevantDepository

Participants / RTA / Company. Shareholders are requested to supportthis initiative by registering / updating their e-mail address for receiving AnnualReport Notices other communication etc. through e-mail. This year amidst COVID-19outbreak the Ministry of Corporate Affairs has issued relaxations from sending printedcopy of Annual Report Notice of the Annual General Meeting (‘AGM') etc. to theShareholders for the AGM to be held in the year 2020.

In continuation with the Green Initiative and in view of theabove-mentioned relaxations your Company is sending the Annual Report & Notice of theAGM along with other documents required to be annexed thereto to the Shareholders throughe-mail to their registered e-mail addresses. Such documents are also available on thewebsite of the Company

Further those Shareholders who have not yet registered their e-mailaddresses are requested to follow the procedure as mentioned in the explanatory note tothe Notice calling AGM to receive copy of the Annual Report & the Notice of the AGMand to enable their participation in the AGM.


The number of employees as at 31st March. 2020 was 2674. Interms of the provisions of Section 197(12) of the Companies Act 2013 (‘Act')read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules isenclosed as Annexure B.

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are enclosed as Annexure C.


Disclosures relating to Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 areenclosed as Annexure D.


Meetings of the Board

During the year under review 5 (five) Board Meetings were held on 25thApril 2019 13th May 2019 8th August 2019 23rdOctober 2019 and 31st January 2020.

Change in Directors and Key Managerial Personnel

Mr Akshay Poddar retires by rotation and being eligible offers himselffor re-appointment at the ensuing Annual General Meeting (‘AGM') of the Company.

The Board of Directors at its Meeting held on 8th August2019 had recommended the appointment of Mr Indrajit Mookerjee as an Independent Director.The re-appointments of Messrs A. C. Chakrabortti D. R. Kaarthikeyan Sunil Mitra andIndrajit Mookerjee as Independent Directors of the Company were approved at the last AGMheld on 9th September 2019.

During the year Mr V. K. Sharma ceased to hold office as IndependentDirector of the Company from 29th June 2019 upon completion of his tenure asapproved by the Shareholders. Messrs Sandeep Fuller Managing Director and G. C. AgrawalExecutive Director had resigned from the services of the Company with effect from close ofbusiness on 31st March. 2020.

Mr Ravi Varma Company Secretary & Compliance Officer who resignedeffective 22nd June 2019 was re-appointed as General Manager (CorporateAffairs) & Company Secretary cum Compliance Officer with effect from 14thDecember 2019.

The Board of Directors on the recommendation of the Nomination andRemuneration Committee has approved the re-designation of Mr Indrajit Mookerjee asthe Managing Director of the Company for a period of 3 (three) years w.e.f. 2ndApril 2020 and the appointment of Mr U. V. Kamath as the Executive Director of the Companyfor a period of 3 (three) years w.e.f. 1st August 2020 subject to the approvalof the Shareholders.

The tenure of Mr S. K. Poddar the Executive Director and the Chairmanexpires on 24th September 2020 and in view of his visionary leadership theBoard of Directors on the recommendation of the Nomination and Remuneration Committee hasapproved his re-appointment subject to the approval of the Shareholders.

The above recommendations of the Board of Directors are being placed atthe ensuing AGM for the approval of the Shareholders.

Board Evaluation

Your Company has in place a Policy for performance evaluation of theBoard Committees of the Board and individual Directors by fixing certain criteria dulyapproved by the Nomination and Remuneration Committee and adopted by the Board. Thecriteria for the evaluation includes their functioning as Members of Board or Committeesof the Board execution and performance of specific duties etc.

A structured questionnaire evolved through discussions within theBoard has been used for this purpose. Further on the basis of performance review byIndependent Directors at their Meeting and recommendations of the Nomination andRemuneration Committee a process of evaluation was followed by the Board for its ownperformance and that of its Committees and individual Directors. Furthermore theevaluation of the Independent Directors was performed by the Board of Directors. Theevaluation criteria comprised of assessing the various parameters including oversight andeffectiveness of the Board performance of the Directors expertise /skills / competenciesas possessed by the Directors in the context of the business of your Company contributionto the strategic planning etc. Further the Board of Directors ensured that theevaluation of Directors was carried out without the participation of the Director who wassubjected to evaluation.

Criteria for Appointment of Directors and Remuneration Policy

The Nomination and Remuneration Committee has approved the criteria todetermine the appropriate characteristics skills and experience for the Board as a wholeand its individual members with the objective of having a Board of eminent QualifiedProfessionals entrepreneurs with diverse backgrounds and experience in businessgovernance education and public service. The criteria includes the matrix of skills /expertise / competencies as specified by the Board for identifying individuals to serve asa Director on the Board.

Your Company has a well-defined Remuneration Policy for Directors KeyManagerial Personnel and other employees of the Company. The Nomination and RemunerationCommittee periodically reviews the policy to ensure that it is aligned with therequirements under the applicable laws. During the year under review there has been nochange in the policy.

The policy ensures equity fairness and consistency in rewarding theemployees on the basis of performance against set of objectives. The policy is availableon the Company's website. The web link for accessing such policy is: REMUNERATION_POLICY_TexRail.pdf

Declaration by Independent Directors

All Independent Directors of your Company have given declaration thatthey meet the criteria of independence as laid down under the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The Board of Directors of your Company took on record the declarationssubmitted by the Independent Directors after undertaking due assessment of theirindependence from the Management. The Independent Directors of your Company have alsoconfirmed their registration with the Independent Directors' databank maintained bythe Indian Institute of Corporate Affairs. The requirement to undertake the onlineproficiency test as stipulated under the Companies (Appointment and Qualification ofDirectors) Rules 2014 has a time period of one year from the date of registration andaccordingly the Independent Directors will undertake such proficiency test as may berequired. The Board is of the opinion that all the Independent Directors possess therequisite integrity expertise and experience to fulfil their duties to act as such.


Composition of Audit Committee

The composition of the Audit Committee is provided in the Report onCorporate Governance as attached to this Report.

Statutory Auditors

Messrs. L B Jha & Co. Chartered Accountants who had beenappointed as the Statutory Auditors at the 19th Annual General Meeting (AGM) inthe year 2017 for a period of five (5) years hold office until the conclusion of the 24thAGM of the Company to be held in the year 2022.

Cost Auditors

Your Company has appointed Messrs. DGM & Associates CostAccountants for conducting the Cost Audit for FY'20 in terms of the provisions ofthe Companies Act 2013 and the Companies (Cost Records and Audit) Rules 2014.

The Board of Directors of your Company on there commendation of theAudit Committee at its Meeting held on 17th June 2020 has approved there-appointment of Messrs. DGM & Associates Cost Accountants (Firm Registration No.000038) as the Cost Auditors to conduct the Audit of the Cost Records of the Company forthe FY'21 at a remuneration of INR 185000 (Indian Rupees One Lakh EightyFive Thousand) plus applicable taxes and out-of-pocket expenses as incurred from time totime. The approval for the ratification of the remuneration payable to Messrs. DGM &Associates is being placed for the approval of Shareholders at the ensuing Annual GeneralMeeting. In terms of the Section 148 of the Companies Act 2013 read with the Companies(Cost Records and Audit) Rules 2014 your Company is required to maintain cost recordsand accordingly such accounts and records are maintained.

Secretarial Auditor

Your Company has appointed Messrs. S. R. & Associates CompanySecretaries for conducting the Secretarial Audit for FY'20 in terms of theprovisions of the Companies Act 2013 and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Secretarial Audit Report in Form No. MR-3 isenclosed as

Annexure E.

Whistle Blower Policy

The details on the Whistle Blower Policy are provided in the Report onCorporate Governance as attached to this Report.


The Company has a proper and adequate system of internal controls. Thedesignated system ensures that all transactions are authorised recorded and reportedcorrectly and assets are safeguarded and protected against loss from unauthorised use ordisposition. In addition there are operational and fraud risk controls covering theentire spectrum of internal financial controls. The system is commensurate with the sizeand the nature of operations of the Company.

The Audit Committee periodically reviews the internal control system toensure that it remains effective and aligned with the business requirements of yourCompany.

The objectives pertaining to Risk Management are to monitor and reviewthe risk management plan of the Company including identification therein of elements ofrisks if any and such other related functions. The Company has implemented a RiskManagement Policy in order to mitigate the losses which might be incurred due tonon-systematic attendance of certain issues. The Risk Management Policy which has beenadopted by the Company has in its scope the establishment of a process for riskassessment identification of risks both internal & external cyber security risk anda detailed process for evaluation and treatment of risks and is reviewed periodically bythe Audit Committee to ensure its effectiveness.


(a) There has been no change in the nature of business of the Companyduring the year under review.

(b) There are no significant and material orders passed by theRegulators/ Courts that would impact the going concern status of the Company and itsfuture operations.

(c) There are no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of financial yearand the date of this Report.

(d) The Reports of the Auditors do not contain any qualification andhence no explanation is required.

(e) Share Capital

During the year your Company has allotted 24600 Equity Shares of facevalue of INR 1 each to eligible Employees pursuant to exercise of Options under TexmacoEmployee Stock Option Scheme 2014 and 4785300 Equity Shares of face value of INR 1 eachpursuant to the Scheme of Amalgamation for merger of Texmaco Hi-tech Private LimitedBright Power Projects (lndia) Private Limited into and with the Company. Further yourCompany has not granted any Stock Options as on the date of this Report under TexmacoEmployee Stock Option Scheme 2018.

(f) Deposits

During the year the Company has not accepted any Deposits under theprovisions of Companies Act 2013.

(g) Disclosures under The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

An Internal Complaints Committee (‘ICC') has been set up toredress complaints received regarding sexual harassment which meets at regular intervals.Your Company has in place a Policy on prevention of Sexual Harassment in accordance withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules framed there under to promote safe & healthy workenvironment. During the year no complaint was received by the ICC.

(h) Disclosure with respect to compliance of Secretarial Standards

The Company has duly complied with the necessary requirements of theSecretarial Standards as issued by the Institute of Company Secretaries of India relatingto Board Meetings and General Meetings.


Extract of Annual Return

The extract of Annual Return in Form No. MGT 9 for the FY'20 isenclosed as Annexure F and forms a part of this Report.

Dividend Distribution Policy

Your Company has in place a dividend distribution policy in line withthe requirements of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The said policy is enclosed as Annexure G and forms a part ofthis Report.

Corporate Governance

Report on Corporate Governance pursuant to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is enclosed as Annexure Hand forms a part of this Report.

Business Responsibility Report

Business Responsibility Report pursuant to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is enclosed as Annexure I andforms a part of this Report.

Particulars of Loans Guarantees and Investments

The details of Loans Corporate Guarantees and Investments made duringthe year under the provisions of Section 186 of the Companies Act 2013 have beendisclosed in the Financial Statement of the Company.

Related Party Transactions

All related party transactions during the FY'20 were entered inthe ordinary course of business and on arm's length basis. An omnibus approval fromthe Audit Committee for the financial year is obtained for the transactions which arerepetitive in nature. All related party transactions are reported to and approved by theAudit Committee / Board of Directors. The details of such transactions were also placedbefore the Audit Committee and Board of Directors for their review on a quarterly basis.During the year there was no material related party transaction entered into by theCompany and as such disclosure in Form AOC-2 is not required. The Company has alsoformulated a policy on dealing with related party transactions and the same is disclosedon theCompany'sebsite.Thenkforaccessingsuchpolicyis


Your Directors state that:

(a) in the preparation of the Annual Financial Statements theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

(b) such accounting policies are applied consistently and the judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period;

(c) proper and sufficient care had been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) the Annual Financial Statements of the Company have been preparedon a going concern basis;

(e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and

(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

For and on behalf of the Board
17th June 2020 S. K. Poddar
Kolkata Chairman