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Texmaco Rail & Engineering Ltd.

BSE: 533326 Sector: Engineering
BSE 00:00 | 24 Jun 39.25 0.80






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OPEN 38.85
VOLUME 82414
52-Week high 58.90
52-Week low 26.55
P/E 68.86
Mkt Cap.(Rs cr) 1,263
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 38.85
CLOSE 38.45
VOLUME 82414
52-Week high 58.90
52-Week low 26.55
P/E 68.86
Mkt Cap.(Rs cr) 1,263
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 11th Operational AnnualReport of the Company along with the Audited Financial Statements for the year ended 31stMarch 2021.


(Rs. in lakhs)

2020-21 2019-20
Operating Profit (PBIDT)* 12808.04 15341.92
Less: Interest (Net) 7922.90 6630.21
Gross Profit (PBDT)* 4885.14 8711.71
Less: Depreciation 3725.67 3590.85
Profit before Taxation and Exceptional Items 1159.47 5120.86
Less: Exceptional Items - 14991.97
Profit before Taxation 1159.47 (9871.11)
Less: Tax Expenses
Current Tax including tax related to earlier years (21.80) 636.22
MAT Credit entitlement - (258.00)
Deferred Tax Liability/(Asset) (5.36) (3665.30)
Profit after Taxation 1186.63 (6584.03)
Add: Balance brought forward from previous year 10117.37 17633.65
11304.00 11049.62
Dividend paid (Incl. Tax) 224.83 949.85
General Reserve 200.00 -
Other Appropriations (23.19) (17.60)
Balance Carried Forward 10902.36 10117.37


Your Directors recommend payment of dividend of 10% i.e. INR 0.10 per equity share offace value of INR 1 each for financial year ended 31st March 2021 in view ofthe steady performance of the Company during the year on account of disruptions caused tothe operations of the Company due to the widespread COVID-19 pandemic.

The Gross Turnover for the year stood at INR 18293.09 mn. The Gross Profit for the yeari.e. Profit before Depreciation and Tax (PBDT) and Profit before Tax (PBT) were INR 488.51mn and INR 115.95 mn respectively. The Net Profit was INR 118.66 mn after providing nettax liability of INR 2.72 mn for the year as per the Profit and Loss Account drawn up inaccordance with the Indian Accounting Standards as specified under the Companies Act 2013('Act'). The Company has transferred INR 20 mn to Free Reserves during the year.


The FY'21 began with an unprecedented pandemic induced lockdown totally stiltingeconomic activities in all sphere of life in the country and across the globe. The strictlockdowns intermittent restrictions on operations of factories / commercial activitiesthe exodus of upcountry manpower and calamities due to the widespread COVID-19 inducedailment disrupted the working of your company for a greater part of the year especiallyQ1 & Q2 of the FY'21. Under these challenging conditions your Company demonstratedhighest degree of resilience and made relentless efforts in making up the shortfalls inthe second half of the year through strict adherence to cost control measuresrestructuring the manpower deployment and further improvement in manufacturing practices.

The performance of the Rolling Stock Division of your Company had shown signs ofrecovery after a sluggish start to the year due to lockdowns restrictions and bearing thebrunt of a devastating super cyclone 'Amphan' causing widespread damages to the sheds andstructures of the Company's facilities at Kolkata. Your Company is extremely thankful toits customers for their support during the difficult year as delivery schedules under manyorders had to be re-organised due to the lockdowns. With the emphasis of the Government tomake freight movement competitive the requirements of railway wagons are looking up andexpected to remain positive in the coming years. General Purpose Wagon Investment Scheme(GPWIS) permitting the private investment is likely to result in robust growth. YourCompany thus has been able to make judicious split in catering to the requirements of bothPrivate and Indian Railways Segment.

Your Company is also concentrating to develop new products through design efforts.Other growth areas in passenger mobility segments also figure in the Company's futureplan. Your Company certainly would be benefitted with its resilient position in the wagonsegment and expects to maintain healthy order book position during FY'22.

The Rail EPC Division of your Company too had a challenging start to the year due toCOVID-19 related impact. Saving lives and livelihood together was a tough balancing act toperform for your Company. After a slow start to the year the Division has now been morefocussed towards execution of ongoing projects. The focus of Indian Railways is onbringing about a transformation by investing heavily in infrastructure including trackinfrastructure & systems electrification which augurs well for the Rail EPC businessof your Company.

The Steel Foundry Division of your Company has maintained its steady performance bothon the domestic & the export fronts with the relaxations in the lockdowns andrestrictions imposed. With the added capacity of the Urla unit Raipur new products forthe domestic markets especially in-hand moulding segments were successfully developed bythe Foundry and well received by the customers including critical castings for theDefence sector.

All the segments of the business across the world are undergoing a sea change due toCOVID-19 pandemic. The atmosphere of uncertainty and the continuity of pandemic are likelyto affect the segment which your Company operates into. Fortunately the demand in thelong run is robust due to the commitment of the Government of India to revitalise the Railsegment and ease the roads from the freight movement. Your Company expects that post thispandemic there will be a surge of pent-up demand and there will be a robust rebound in theeconomy especially in the areas of upgradation of infrastructure rail & metronetwork etc. The proposed move of IR to privatise the passenger trains will open newvistas of opportunities in the Railway sector.


As required under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ('Listing Regulations') the significantfinancial ratios are given below:

Particulars 2020-21 2019-20 2018-19
Net Profit Margin* % 0.69 (3.54) 4.01
Operating Profit Margin % 3.50 5.62 6.77
Debtors Turnover Times 2.76 2.84 2.27
Inventory Turnover Times 5.46 3.41 4.13
Debt Equity Ratio Times 0.67 0.73 0.51
Current Ratio Times 1.54 1.42 1.47
Interest Coverage Ratio Times 0.15 1.65 2.50
Return on Net Worth % 1.04 (6.41)# 6.60

* before Exceptional items

#During FY'20 there was exceptional item resulting into a negative return.


I. Rolling Stock Division

a. Freight Car & Coachings

The year began with a moderately healthy order book position for the Division. Howeverdue to prevailing pandemic situation your Company resumed manufacturing activity in May2020 on a limited scale with limited manpower in a phased manner and in strict compliancewith the guidelines issued by the State/ Central level administration. It ensured allhealth & safety measures as prescribed by them. The restrictions continued for a longtime and the factory being located in a highly infected zone with many surroundingcontainment zones the Company restricted its operations. Your Company could not ramp upthe production because of restrictions imposed on the number of people to be allowed onworksite and severe shortages of skilled manpower that could not be mobilised due to themovement restrictions enforced by the administration. The workings of the Division werealso affected due to the super cyclone 'Amphan' in the month of May 2020.

During the year due to slowdown in the economy in the country and the GDP contractingto a record low of 7.3% the overall spirit of business was badly impacted and meaningfuleconomic activity did not pick its momentum.

No new tenders were issued by the Railway Board during the year under review exceptfor exercising the 30% option clause against the order placed in 2018. Also due to theGDP contraction the private sector buyers kept the need for new wagons under wraps.

Nevertheless with the Rail sector proving to be the hub of commercial activitiesduring the difficult times the future outlook looks bright.

The schemes announced by the Indian Railways during FY'20 such as Liberalized SpecialFreight Train Operator ('LSFTO') Liberalized Wagon Investment Scheme ('LWIS') and GeneralPurpose Wagon Investment Scheme ('GPWIS') are expected to boost the market sentiment andit is envisaged that there would be a comfortable revival of demand for various types ofwagons in FY'22.

The Indian Railways plans to create additional freight capacity by inducting somespecially-designed wagons such as double stack container wagons auto car with higher MMDthough the opening of the Dedicated Freight Corridor ('DFC') could not take off during thecurrent financial year. These new design wagons are still on the drawing board and areexpected to be introduced in FY'22. Your Company expects to improve its order book oncethese new design wagons are made available by the Research Design & StandardsOrganisation ('RDSO').

As informed earlier to facilitate rail transportation of two-wheelers your Companydeveloped a side loading option on the existing Auto car wagon which is a first in theindustry and could supply three such rakes to the industry while one at present is beingmanufactured. This has a good potential for transportation of two- wheelers through theRailways as India at present produces approx. 20 mn units of two-wheelers annually mostof which are transported by road.

To save the environment from fly ash hazard BTAP wagon was successfully tried andtested for bulk transportation of fly ash with pneumatically-assisted unloading of fly ashfrom the side discharge valve. Your Company has delivered three such rakes during theyear. The PG test of these rakes is in progress. Transportation of fly ash by the BTAPwagon compared to the Open Type wagon has a distinct advantage from the environment pointof view and your Company expects to get more orders in this respect from the industry.Your Company has also supplied five rakes of specially-designed steel coil carrying wagonsduring the year FY'21.

Besides freight car manufacturing your Company has spare capacities in thespecially-created facility to manufacture passenger coaches loco shell etc. IndianRailways has an ambitious plan of phasing out the redundant passenger coaches andreplacing it with new modern passenger coaches. Your Company is seriously looking toharness this opportunity whenever the Indian Railways becomes fully operational.

The turnover of the unit during FY'21 was INR 6171 mn.

b. Locomotive Components / Assemblies

The year began with a low order book position. The order book was expected to bestrengthened with deliveries within the year which would have enabled the Company tomaintain its performance for FY'21. However the same could not be fructified due to thepandemic in the beginning of year and the situation continued to be same till the secondquarter of the year. All plans to boost production went haywire and locomotivemanufacturing units delayed the procurement process and the division's order book remainedlow. This pandemic badly affected the performance of the Division and it could supply only23 nos. of loco shells during the year.

However the situation is improving and your Company expects an improved performanceduring FY'22.

As per National Rail Plan 2030 the total requirement of Locomotives would be about16800 till 2026 and the average yearly procurement plan is about 2000 locomotives per yeartill 2026. Out of the above about 1000 locomotives are of high horse power being suppliedby Alstom and GE. The balance of about 1000 locomotives are to be supplied by theChittaranjan Locomotive Works ('CLW') / Banaras Locomotive Works ('BLW') /Diesel LocoModernisation Works ('DMW'). Together the internal capacity of the participants is toproduce about 500 loco shells every year and the balance is outsourced.

In view of the planned switch-over to Electric Traction by Indian Railways within thenext two years the strong demand for Electric Loco Shells by the Production Units (CLW& DMW) of the Railways from private parties is expected to be sustained in thefuture as well.

Your Company is established as a reliable and consistent supplier of loco shells and isnow geared to step up the production of complete Electric Loco Shells to meet the upcomingdemand in the market.

The turnover of the Electric Loco shells and Assemblies during FY'21 was INR 234 mn.

II. Hydro Mechanical Equipment

The turnover of the Division for the FY'21 stands at INR 500 mn. Due to the pandemicthe turnover of the HME Division had been affected during Q1 & Q2 of FY'21. Themanufacturing and site activities started normalising only from August 2020.

The Rongnichu Project however was completed three months ahead of its schedule duringthe FY'21 and successful testing of the PS Liner was also done. The Upper TamakoshiProject Nepal is on the verge of being commissioned on successful completion of reservoirimpounding. Further the Bajoli Holi - GMR project is also nearing completion.Installation work at Subansiri the largest hydro power project is also gearing up postrestart of work on the project by NHPC and all out efforts are being initiated to completethe project by June 2022. The Division has also received an additional order of INR 430 mnfrom the Subansiri-NHPC on a challenging completion schedule and the Division is movingahead to complete all the scheduled targets in time.

In nutshell the HME Division had shown improvement during the second half of theFinancial Year and is heading towards a better performance in FY'22.

III. Bridge & other Steel Structures

The performance of the division during FY'21 was dismal because no fabrication work waspossible during the period from April to July 2020 due to the pandemic. Availability ofstructural steel was also very erratic which slowed down the entire process offabrication as well as dispatch.

During FY'22 the Division has set up a target of fabrication and dispatch of almosttwice the current year's achieved targets. However with the onset of the second wave ofCOVID-19 the site activities were not operating in view of the limited industrial oxygensupply which would certainly pick up in the second half of the FY'22. The divisionremains optimistic to achieve the target for FY'22.

The turnover of the division during the FY'21 was INR 209 mn.

IV. Texmaco Hi-tech

The turnover of the unit in spite of the pandemic during FY'21 was INR 193 mn. Theturnover was achieved by meeting critical requirements of Alstom and GE for their CBSPrimary Parts and Platform Kit Parts requirements.

The performance of the unit for the FY'22 is likely to improve further with all productapprovals in place demand stabilisation and ramp up of production activities.


During the year production & turnover from both the foundries i.e. Kolkata &Urla Raipur stood at 21804 MT (Kolkata 15973 MT & Urla 5831 MT) valuing total atINR 3165 mn. The 1st quarter and partially the 2nd quarter of thefinancial year were a virtual washout and practically very little production was achievedbecause of the widespread pandemic situation and the restrictions imposed.

The demand on domestic casting front i.e. bogies & couplers was adversely affectedbecause of no fresh order for wagons being placed by the Indian Railways. This apart theinput prices of all the items particularly scrap had gone up significantly making itfor the time being uneconomical to produce domestic casting for wagon. However bogie& coupler castings being produced in the foundry are mostly for captive requirement.

The export demand more or less is steady rather there is a slight upward trend butbecause of the soaring shipping cost and non-availability of the empty container dispatchof export castings suffered during the last quarter of the year resulting in a slightbuild-up on inventory of finished castings against export orders.

It is expected that once the second wave of COVID-19 is behind us normalcy will returnand the division will report an improved performance.

The overall performance of the Urla unit Raipur is more or less the same because ofpoor and unviable domestic demand of wagon castings. However the Urla unit is trying toprocure more orders for hand moulded industrial castings which are complex in nature andmore remunerative.


Kalindee unit of your Company's Rail EPC Division faced challenges due to COVID-19pandemic & stressed working capital conditions during FY'21. This has resulted insubdued performance during the year.

Execution activities in major projects like WDFC EDFC BMRCL have been maintained atreasonable speed. During the year the Division has focused on completing certainlong-pending projects like Jhansi-Bhimsen MMTS Hyderabad Bina- Kota doubling etc.

For the projects in Bangladesh the division is trying to overcome the variouschallenges and constraints faced by intermittent stoppage of work due to the spread ofCOVID-19 and to restore the momentum.

There have been relentless efforts on closing and realizing the dues from old contractswhich have started yielding good results. Focus on efficient execution coupled withspeedy realisation of old receivables has ensured that the overall collections have keptpace with the revenues without adding significant receivables.

The division at present is exploring to acquire new signalling & telecommunicationcontracts involving technological innovation which should strengthen the qualitativeperformance of the division. The Division also intends to focus on automatic farecollection systems and ballast less track systems which are expected to open up largemarket segments in the coming years.

The turnover of the Kalindee unit during the FY'21 was INR 5790 mn.

Rail Electrification

During the year the Bright Power unit of Rail EPC division has successfully completedCommission of Railway Safety ('CRS') inspection for 275 KM of overhead electrification asignificant achievement. These were carried out under strict COVID-19 protocols. Due tothe COVID-19 disruptions the division had to adapt a different approach in carrying outthe work. Labour availability and its movement became restricted. Keeping everyone in thefield "safe" also was challenging. It was also necessary to maintain thedivision's financial liquidity and reduce dependence on borrowed funds. Hence the focusof the division was to complete its old assignments and close the existing contracts. Withthe above efforts the Division has performed reasonably well even during the year whichwitnessed impact of COVID-19 pandemic. The efforts of the division have resulted inimproved collection of outstanding and retentions from the customers. The division is nowfocusing on modification and refurbishment contracts which have to be executed under thevery strict train running conditions and requires special skills and expertise. TheDivision's vast experience in the field along with its dedicated team of trained technicalmanpower enables it enter into this niche field. The division has bagged such contractsworth INR 1200 mn in FY'21.

The turnover of the Bright Power Unit during the FY'21 was INR 1967 mn.


The subsidiaries / associates / joint ventures continue to contribute to the growth inrevenue and overall performance of your Company.

A Report on the performance and financial position of each of the subsidiariesassociates and joint ventures included in the Consolidated Financial Statement is providedin Form AOC-1 and forms a part of this Annual Report.

The Consolidated Financial Statements of the Company its subsidiaries associates andjoint ventures prepared in accordance with the Act and applicable Indian AccountingStandards and the Auditors' Report thereon form a part of this Annual Report.

The Consolidated Financial Statements of the Company include the financial results ofits subsidiaries associates and joint ventures.

i. Belur Engineering Private Limited

Belur Engineering Private Limited a wholly-owned subsidiary continues to supplementyour Company's business streams by providing its property on lease to the Company to carryout execution of its various contracts.

ii. Texmaco Rail Electrification Limited

Texmaco Rail Electrification Limited ('TRElec') a wholly-owned subsidiary was formedto explore business potential in the niche field of Rail Electrification. TRElec continuesto explore the fields for its operation.

iii. Texrail SA (Pty) Limited

Texrail SA (Pty) Limited ('SA Pty') a wholly-owned subsidiary was established inSouth Africa for exploring opportunities in the African market. With a view to conservecost SA Pty is being deregistered on cessation of its operations.

iv. Texmaco Engineering Udyog Private Limited

During FY'21 the Company formed a wholly-owned subsidiary in the name and style of'Texmaco Engineering Udyog Private Limited' ('TexUdyog'). It was formed to work onemerging opportunities in the field of Heavy Engineering and structural works. TexUdyog isyet to commence its business operation.

v. Texmaco Transtrak Private Limited

Post signing of an arrangement with CAF Spain the technology provider for electronicinterlocking and Train Protection and Warning Systems Texmaco Transtrak Private Limitedhas taken up the approval process with RDSO.

The approval process of the prototype has been delayed pending RDSO inspection whichis likely to take place once normalcy is restored.

vi. Texmaco Rail Systems Private Limited

Texmaco Rail Systems Private Limited was incorporated to identify the evolving areas inthe field of signalling equipment which will strengthen your Company's presence in thesignalling business of the Rail EPC Division.


Texmaco Defence Systems Private Limited

During FY'21 Texmaco Defence Systems Private Limited ('Texmaco Defence') has signedfew MoUs for exploring the opportunities in the Indian defence market. At Aero India 2021held at Bengaluru Texmaco Defence made exclusive arrangements for new ventures tocontribute towards National Defence. It is further exploring opportunities in the CivilAviation & Railways as well as in the Non-Defence and Export sectors. Texmaco Defencelooks forward to contribute to the Government's initiatives viz. the AatmaNirbhar BharatAbhiyan & Make in India.

Joint Ventures

i. Touax Texmaco Railcar Leasing Private Limited

The impact of the pandemic though not directly was felt by the JV company. Thecontraction in orders will not be quantified immediately considering the length of timein each contract prescribed for delivery of the ordered rake. However most customers haveseen a sizeable contraction in business. The silver lining is there are signs that theworst is all set to over. The Pandemic resulted in both a reduction in offtake bycustomers and a sizeable reduction in liquidity & funds available for revenueexpenditure. Lease rentals being one of them is likely to be postponed unlike criticalexpenses like wages and raw material. Hence many firmed up contracts have been pushedinto the coming year.

A huge plus however from the pandemic is the growth of the rail sector. Mostindustries had their raw material stuck on roads all over India during the lockdownperiod. The Indian Railways operated at maximum capacity and ran point-to-point withcommodity-specific trains. The Indian Railway initiative to get back its share from theroad sector bodes well for the JV company. The IR 'Freight Business Development Portal' isa huge success. There is a substantial increase in enquiries for bulk wagons. There mayhowever not be a sizeable increase in demand from the container sector in the immediatefuture.

The JV company has now 15 rakes in operation and 2 under production. The JV company iscurrently in discussion for leasing of cement bulk cargo auto car rakes etc. in thecurrent financial year.

The turnover of the JV company during the FY'21 was INR 288 mn.

ii. Wabtec Texmaco Rail Private Limited

Wabtec Texmaco Rail Private Limited the JV company achieved a turnover of INR 387 mnduring the FY'21. Like a majority of companies across the globe the business andoperations of the JV company also got adversely impacted during FY'21 to a great extentdue to the pandemic. All necessary directives of the authorities to contain the spread ofthe infection were implemented and continues to be followed even after opening up of theoperations at factory from a nationwide lockdown enforced by the Government of India.

The business started showing an improvement from the Q3 of FY'21. The demand forReceiver Assemblies which accounts for a major portion of the JV company's turnover hasincreased more than double from October 2020. Orders from SE Railways for supply of Mark325 Draft Gears with Followers were successfully executed within a record time.

The first order for Bridge Plates used on Automobile carrying wagons was alsosuccessfully executed during the year on a rake manufactured by Texmaco Rail for a leadingglobal automobile logistics company. The first trial order received for CSP Coilguard usedon steel coil carrying wagons is at presently under execution. The JV company managed toretain the status of leadership in the Wheel Chock market in India. The demand for allthese new products is expected to grow significantly during FY'22.

The JV company expects to achieve improved business during FY'22 on back of the economyshowing early signs of recovery and increased demand from the Indian Railways and thewagon builders.


The Company is actively pursuing new opportunities in the field of exports. The SteelFoundry Division of your Company continued to excel in export totalling to INR 915.18 mncompared to INR 1124 mn of previous year in spite of the global slowdown due to theCOVID-19 pandemic. The execution of the projects in the neighbouring countries by the HMEDivision of your Company has picked up during the year.

The Rail EPC Division of your Company is well poised to seize the opportunities in theexport field.


A. Rolling Stock Division

Rolling Stock Division is focussed on development of wagon with optimized solution withnew technology and use of new materials.

i) The division is working on new taller autocar wagon with innovative solutions forcarrying wide range of automobiles (two wheeler three wheeler car LCV HCV) andimproving the ease of its operation. In existing BCACBM wagon side opening arrangementhas been developed for two wheeler loading and in this respect two rakes have beensupplied.

ii) The division is working with industry partners to use new materials in wagons tobring down tare weight and improving pay load capacity.

B. Steel Foundry Division

The R&D Centre of the Company is registered and recognised by the Department ofScientific and Industrial Research (DSIR) Government of India. It carries out researchand innovation for the development of various products & processes. It has helped theCompany to develop new products improve product life through process innovations developlight & efficient designs for higher and faster transportation of goods &specialised cargos. This has enabled the Company in saving precious energy and resourceswhile improving cost effectiveness. The metallurgical laboratories of your Company anintegral part of the R&D Centre has already received ISO/IEC 17025:2017 certificationfrom National Accreditation Board for Testing and Calibration Laboratories (NABL) whichis approved by International Laboratory Accreditation Cooperation.

a) New Product Development:

1) A new design of bogie castings two new designs of yoke castings and a new type ofFollower have been developed for the North American market by unique metallurgical andprocess improvement. This has enabled the Company to expand its export footprint in theUnited States.

2) Two new designs of high wear resistance components have been developed for groundexcavating applications through unique metallurgical process improvement characterisedby high hardness as well as high impact toughness.

b) New Process Development:

New method designs were developed for Centre Plate and Traction Link castings thatresulted in remarkable improvement with respect to solidity and surface finish. Asubstantial cost saving in the final finishing operation was thus achieved.

Apart from the above the R&D Division of the Company has also undertaken thefollowing projects:

i) development of a computational model to simulate the mould filling operation flowsimulation solidification pattern and shrinkage prediction for different components.

ii) development of a computational model to simulate heat treatment cycles andresulting thermal stresses across different section thicknesses in different components.

iii) analysis of different types of failures in various components by correlation ofparameters of method design moulding core making steelmaking pouring and heattreatment operations with the casting physical properties to identify the probable rootcause of failure and propose suitable corrective / preventive actions for theirminimisation/ elimination. These studies have helped in improvement of existing productsand processes.

iv) the R&D department has further undertaken collaborative projects with reputedinstitutes such as Birla Institute of Technology and Science (BITS - Pilani) to assist inimproving the quality and life cycle of the products.


IT Department of your Company has facilitated in creating a more cohesive and closelyconnected Organisation by implementing video conferencing solution for inter locationscommunication and has minimised travel. The Company is maintaining Oracle ERP businesssolution for its business operations. The IT team continues to leverage new technologiesto increase its efficiency and effectiveness to support digitisation and cyber securitysystem to meet the business goals of the company.


Your Company claims that its employees and workmen are its greatest resources. HumanResources ('HR') of your Company facilitates the management and development of its biggestassets i.e. employees workmen ultimately accelerating their performance.

HR plays a significant role in developing a positive business culture and improvingemployee engagement and productivity. The HR function also takes the lead on employeewellness and personal development.

People culture and business success go hand-in-hand. HR therefore helps in buildingthe brand image of the Company as an employer which is influential in attracting talent.HR continues to play an important role especially during the ongoing economic uncertaintycaused due to the COVID-19 pandemic by keeping the employee morale high and strengtheningtheir mental well-being.

Performance management training and development recruitment and on boardingemployees relations and reinforcing the values of the business are all essential elementsof business culture covered by HR.

An effective performance management system enables managers to offer support toemployees who need it and identify future superstars.

It is widely recognised that employee development contributes towards better employeeengagement increased productivity reduced employee turnover and a more positive workculture. Investing in our employees strengthens our organisation and gives our business acompetitive edge. It drives employee engagement job satisfaction and staff retention andit defines business success. HR continues to play a key role in developing reinforcingand improving the culture of its organisation.


The Government's focus and added measures taken in the recent Budget for modernisationunder various segments of Railway infrastructure and services - coaches and passengerservices electric locomotives electrification signalling etc. will strengthen theworking of the Rail EPC and Rolling Stock Divisions of your Company. The growing pace ofelectrification including track renewals bridge works and doubling of tracks adds valueto your Company's operations.

In the Budget 2021-22 the Government has also announced the National Rail Plan forIndia and record budgetary allocation of INR 1.10 lakh crore is provided towardsdevelopment of Indian Railways. Considering the initiatives and emphasis by theGovernment the prospects for your Company seem positive.

Indian Railways' determined approach on building new DFCs consisting of 263.7 km &274.3 km in PPP mode will provide added business opportunity for growth & developmentof the business of your Company. The Indian Railways initiative to prioritise design trainoperations will provide newer opportunities to companies working in Rail segment. Railwaysfocus on introduction of safety & security measures across India would further addupto the windows of opportunities for the Company in the Rail segment.

Further in its effort to strengthen the urban mobility system Pan India theGovernment has declared that along with the development of infrastructure about 1016 kmof metro and Regional Rapid Transit System is under construction in 27 cities and alsointroduced the product for two new technologies i.e. 'MetroLite' and 'MetroNeo' forTier-2 cities and peripheral areas of Tier-1 cities which would further add to neweropportunities in the segment.

The sluggishness in the global economy owing to the continuing COVID-19 pandemic &its spread across the nation has impacted every segment of the economy as well asbusinesses and your Company is not left untouched. Despite the overall challengingsituation the Company managed to provide satisfactory results and your Company isconfident of overcoming any substantial impact with improved efficiency in its operations.

The challenges faced in project implementation by the infrastructure segment companyputting their flames under tremendous stress would continue to be a challenge in thegrowth plan envisaged by your Company.


Corporate Social Responsibility ('CSR') has become increasingly important with economicglobalisation.

Your Company through its CSR drive endeavours the sustainable development of thesociety at large.

Your Company believes that CSR is integrated with the corporate values and with thisnotion the Company's CSR philosophy revolves around mechanisms for creatingemployability good health & well-being environmental protection and women'sempowerment.

The Company has taken few important initiatives to serve the society. With the motto ofpromoting education and training the youth to be capable of being employed with thecorporates your Company continues to promote & provide education and vocationalskills through 'Texmaco George Telegraph - Centre of Excellence' a vocational traininginstitute which was set up within the Company's premises partnered with the NationalSkill Development Corporation.

Your Company with its pre-determined objective has been continuously trying to educateunderprivileged localities and the deprived children.

To serve its neighbourhood in the field of health & well-being 'Texmaco ArogyamPhysio Centre' a well-equipped Health Hub established within the Company's premises whichmarked its 5th anniversary this year comprises competent doctors and has beenproviding services of physiotherapy alternative therapy acupuncture gym yoga etc.Despite the pandemic the Centre with its ceaseless support helped the neighbourhoodpeople with therapies which helped them in garnering a sense of positivity and well-being.

The Company continues to undertake the drive of campaigning towards general awarenessfor protection of the community against COVID-19.

Apart from the above the Company continues to provide financial aid to theunderprivileged for promoting health and education.

The Company has spent in excess of the prescribed threshold under the Act on the CSRactivities for FY'21.

The Annual Report on CSR activities is enclosed as Annexure A and forms a part of thisReport.


Your Company continues to embrace a sustainability initiative with the aim of goinggreen and minimising the impact on the environment. Your Company had already adopted thegreen initiative by sending the Annual Report Notices other communication etc. throughe-mail to the Shareholders whose e-mail addresses are registered with relevant DepositoryParticipants / RTA / Company. Shareholders are requested to support this initiative byregistering / updating their e-mail addresses for receiving Annual Report Notices othercommunication etc. through e-mail. In view of the COVID-19 pandemic the Ministry ofCorporate Affairs ('MCA') and the Securities and Exchange Board of India ('SEBI') hadissued relaxations from sending printed copy of Annual Report Notice of the AnnualGeneral Meeting ('AGM') etc. to the Shareholders for the AGM held in the year 2020 whichcontinues for the AGM in 2021 as well.

In continuation with the Green Initiative and in view of the above-mentionedrelaxations your Company is sending the Annual Report & Notice of the AGM along withother documents required to be annexed thereto to the Shareholders through e-mail to theirregistered e-mail addresses. Such documents are also available on the website of theCompany

Further those Shareholders who have not yet registered their e-mail addresses arerequested to follow the procedure as mentioned in the explanatory note to the Noticecalling AGM to receive the Annual Report & the Notice of the AGM through electronicmode and to enable their participation in the AGM.


The number of employees as at 31st March 2021 was 2403. In terms of theprovisions of Section 197(12) of the Act read with Rules 5(2) & 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement showingthe names and other particulars of the employees drawing remuneration in excess of thelimits set out in the said rules is enclosed as Annexure B and forms part of this Report.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are enclosed as Annexure C and forms part of thisReport.


Disclosures relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Act read with Rule8 of the Companies (Accounts) Rules 2014 are enclosed as Annexure D and forms a part ofthis Report.


Meetings of the Board

During the year under review 5 (five) Board Meetings were held on the following dates:

• 17th June 2020

• 8th September 2020

• 19th October 2020

• 29th January 2021

• 1st March 2021

Change in Directors and Key Managerial Personnel

During the FY'21 the re-appointments of Mr Saroj Kumar Poddar as Executive Directorand Chairman Mr Akshay Poddar as Non - Executive & Non - Independent Director andre-designation of Mr Indrajit Mookerjee as Managing Director of the Company were approvedat the Annual General Meeting ('AGM') of the Company held on 30th September2020.

Further the Board of Directors ('Board') on the recommendation of the Nomination andRemuneration Committee had appointed Mr U. V. Kamath Chief Executive- Bright Power unitRail EPC Division as Executive Director w.e.f. 1st August 2020 who tenderedhis resignation w.e.f 8th September 2020. He continues to act as ChiefExecutive- Bright Power unit Rail EPC Division of the Company.

Further the Board on the recommendation of the Nomination and Remuneration Committeehad approved the appointments of Mr Ashish Kumar Gupta as Executive Director anddesignated as Deputy Managing Director w.e.f. 17th November 2020 and MrVirendra Sinha & Ms Rusha Mitra as Independent Directors w.e.f. 17thFebruary 2021. All these aforesaid appointments were approved by the shareholders at theExtra Ordinary General Meeting ('EGM') of the Company held on 25th March 2021.

Ms Mridula Jhunjhunwala ceased to hold office as Independent Director of the Companyw.e.f. close of business on 19th March 2021 upon completion of her tenure asapproved by the Shareholders.

Messrs Damodar Hazarimal Kela and Ashok Kumar Vijay Executive Directors retire byrotation and being eligible have offered themselves for re-appointment at the ensuing AGMof the Company.

Further the present tenure of Mr Kela expires on 24th September 2021 and inview of his visionary leadership and experience the Board on the recommendation of theNomination and Remuneration Committee has approved his re-appointment for a period of 3(three) years subject to the approval of the Shareholders.

The above recommendations of the Board are being placed at the ensuing AGM for theapproval of the Shareholders.

Board Evaluation

Your Company has in place a Policy for performance evaluation of the Board Committeesof the Board and individual Directors by fixing certain criteria duly approved by theNomination and Remuneration Committee and adopted by the Board. The criteria for theevaluation includes their functioning as Members of the Board or Committees of the Boardexecution and performance of specific duties etc.

A structured questionnaire which cover various aspects of the Board functioning suchas Director's strength and contribution specific duties obligations etc. evolvedthrough discussions within the Board has been used for this purpose. Further on thebasis of performance review by Independent Directors at their meeting held on 18thMarch 2021 and recommendations of the Nomination and Remuneration Committee a process ofevaluation was followed by the Board for its own performance and that of its Committeesand individual Directors. Furthermore the evaluation of the Independent Directors wasperformed by the Board. The evaluation criteria comprised assessing the various parametersincluding oversight and effectiveness of the Board performance of the Directorsexpertise /skills / competencies as possessed by the Directors in the context of thebusiness of your Company contribution to the strategic planning etc.

Further the Board ensured that the evaluation of Directors was carried out without theparticipation of the Director who was subject to evaluation.

Criteria for Appointment of Directors and Remuneration Policy

The Nomination and Remuneration Committee has approved the criteria to determine theappropriate characteristics skills and experience for the Board as a whole and itsindividual 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 include the matrix of skills /expertise / competencies as specified by the Board for identifying individuals to serve asa Director on the Board.

Your Company has in place 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 the employees on thebasis of performance against set of objectives. The policy is available on the Company'swebsite. The weblink for accessing such policy is:

Declaration by Independent Directors

All Independent Directors of your Company have given the declaration that they meet thecriteria of independence as laid down under the Act and Listing Regulations.

The Board of Directors of your Company took on record the declarations submitted by theIndependent Directors after undertaking due assessment of their independence from theManagement. The Independent Directors of your Company have also confirmed theirregistration with the Independent Directors' databank maintained by the Indian Instituteof Corporate Affairs. The Independent Directors will undertake the proficiency test asmay be required under the Companies (Appointment and Qualification of Directors) Rules2014.

The Board is of the opinion that all the Independent Directors possess the requisiteintegrity 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 on CorporateGovernance as attached to this Report.

Statutory Auditors

Messrs L. B. Jha & Co. Chartered Accountants who had been appointed as theStatutory Auditors at the 19th AGM in the year 2017 for a period of 5 (five)years hold office until the conclusion of the 24th AGM of the Company to beheld in the year 2022.

Branch Auditors

The Branch Auditors Messrs S.S. Kothari Mehta & Co. continues to act as such untilthe conclusion of the 24th AGM of the Company to be held in the year 2022.

Cost Auditors

Your Company has appointed Messrs DGM & Associates Cost Accountants forconducting the Cost Audit for FY'21 in terms of the provisions of the Act and theCompanies (Cost Records and Audit) Rules 2014.

The Board on the recommendation of the Audit Committee at its Meeting held on 14thMay 2021 has approved the re-appointment of Messrs DGM & Associates Cost Accountants(Firm Registration No. 000038) as the Cost Auditors to conduct the Audit of the CostRecords of the Company for the FY'22 at a remuneration of INR 250000 (Rupees Two LakhFifty Thousand) plus applicable taxes and out-of-pocket expenses as incurred from time totime. The proposal for the ratification of the remuneration payable to Messrs DGM &Associates is being placed at the ensuing AGM for the approval of Shareholders.

In terms of the provisions of Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 your Company is required to maintain cost records andaccordingly such accounts and records are made and maintained.

Secretarial Auditor

Your Company has appointed Messrs S. R. & Associates Practicing CompanySecretaries for conducting the Secretarial Audit of the Company for FY'21 in terms of theprovisions of the Act and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

The Secretarial Audit Report in Form MR-3 is enclosed as Annexure E and forms a part ofthis Report.

Whistle Blower Policy

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


The Company has a proper and adequate system of internal controls appropriate to thenature and size of the businesses. The designated system ensures that all transactions areauthorised recorded and reported correctly and assets are safeguarded and protectedagainst loss from unauthorised use or disposition. In addition there are operational andfraud risk controls covering the entire spectrum of internal financial controls. Thesystem is commensurate with the size and the nature of operations of the Company.

The Audit Committee periodically reviews the internal control system to ensure that itremains effective and aligned with the business requirements of your Company.

The objectives pertaining to Risk Management are to monitor and review the riskmanagement plan of the Company including identification therein of elements of risks ifany and such other related functions. The Company has in place a Risk Management Policyin order to mitigate the losses which might be incurred due to non-systematic attendanceof certain issues. The Risk Management Policy which has been adopted by the Company has inits scope the establishment of a process for risk assessment identification of risksboth internal & external cyber security risk and a detailed process for evaluationand mitigation of risks and is reviewed periodically by the Audit Committee to ensure itseffectiveness. During the FY'22 the Company has formed a Risk Management Committee thedetails of which are provided in the Report on Corporate Governance as attached to thisReport.


(a) There has been no change in the nature of business of the Company during the yearunder review. Further in order to expand its horizons the Company is planning to exploreinto newer fields of upcoming opportunities in defence segment and for which the Companyhas obtained the approval of the shareholders to the altered object clause of theMemorandum of Association of the Company.

The alterations as to the Object Clause was approved at the EGM held on 25thMarch 2021.

(b) There are no significant and material orders passed by the Regulators/ Courts thatwould impact the going concern status of the Company and its future operations.

(c) There are no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of financial year and the date of thisReport.

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

(e) The Board had earlier approved the Rights Issue in April 2019 for an issue size notexceeding INR 2000 mn. However due to steep decline in the market price of the shares ofthe Company and plummeting GDP & Economy the Board at its Meeting held on 8thSeptember 2020 had withdrawn the Rights Issue.

(f) Share Capital

During the year the Board of the Company has proposed the issuance of Equity Shares byway of Preferential Issue to Messrs Zuari Global Limited Adventz Finance Private Limited& Mr Saroj Kumar Poddar (as an individual) for an amount not exceeding INR 2000 mnwhich was approved by the Members of the Company at the AGM held on 30thSeptember 2020. In terms of the approval your Company has allotted 9354839 &16129031 Equity Shares of face value of INR 1/- each at a price of INR 31/- each toAdventz Finance Private Limited and Mr Saroj Kumar Poddar (as an individual) respectivelyby way of preferential issue against conversion of loan availed by the Company from them.Consequent to the aforesaid allotment the paid up capital of the Company has increasedfrom 224859382 Equity Shares of INR 1/- each to 250343252 Equity Shares of INR 1/-each.

Further the Board at its Meeting held on 1st March 2021 has proposed theissuance of Equity Shares by way of Preferential Issue to Messrs Zuari Global Limited andAdventz Finance Private Limited for an amount not exceeding INR 1150 mn. Accordingly anExtra Ordinary General Meeting of the Shareholders was convened on 25th March2021 inter-alia for issuance of Equity Shares to Messr Zuari Global Limited for anamount not exceeding INR 900 mn. However the Shareholders had not approved the saidproposal.

(g) Deposits

During the FY'21 the Company has not accepted any Deposit under the provisions of theAct.

(h) Disclosures under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

An Internal Complaints Committee ('ICC') has been set up in accordance with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules framed thereunder to promote safe & healthy workenvironment and to redress complaints received regarding sexual harassment. The ICC meetsat regular intervals. Your Company has in place a Policy on prevention of SexualHarassment in accordance with the said Act and Rules.

During the year no complaint was received by the ICC.

(i) Disclosure with respect to compliance of Secretarial Standards

The Company has duly complied with the necessary requirements of the SecretarialStandards relating to Board Meetings and General Meetings as issued by the Institute ofCompany Secretaries of India.


Annual Return

The copy of the Annual Return is available on the website of the Company. The weblinkfor accessing Annual Return is: report/ART2021.pd f

Dividend Distribution Policy

Your Company has in place a Dividend Distribution Policy in line with the requirementsof the Listing Regulations. There has been no change in the policy during the year. Theweblink for accessing such policy is: InvestorsInformation/Dividend Distribution Policy.pdf

Corporate Governance

Report on Corporate Governance pursuant to the Listing Regulations is enclosed asAnnexure F and forms a part of this Report.

Business Responsibility Report

Business Responsibility Report pursuant to the Listing Regulations is enclosed asAnnexure G and forms a part of this Report.

Particulars of Loans Guarantees and Investments

The details of Loans Corporate Guarantees and Investments made during the financialyear under the provisions of Section 186 of the Act have been disclosed in the FinancialStatements of the Company.

Related Party Transactions

All related party transactions during the FY'21 were entered in the ordinary course ofbusiness and on arm's length basis.

An omnibus approval from the Audit Committee for the financial year is obtained for thetransactions which are repetitive in nature. All related party transactions are reportedto and approved by the Audit Committee / Board . The details of such transactions werealso placed before the Audit Committee and the Board for their review on a quarterlybasis. During the year there was no material related party transaction entered into bythe Company and as such disclosure in Form AOC-2 is not required.

The Company has in place a policy on dealing with related party transactions and thesame is disclosed on the Company's website. The weblink for accessing such policy is:https://www. Information/RPTP.PDF

During the year under review there has been no change in the policy.


Your Directors state that:

(a) in the preparation of the Annual Financial Statements the applicable accountingstandards had been followed along with proper explanation relating to material departures;

(b) such accounting policies are applied consistently and the judgments and estimatesmade are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company at the end of the financial year and of the profit and loss of the Companyfor that period;

(c) proper and sufficient care had been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Annual Financial Statements of the Company have been prepared on a goingconcern basis;

(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.