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Titagarh Wagons Ltd.

BSE: 532966 Sector: Engineering
NSE: TWL ISIN Code: INE615H01020
BSE 00:00 | 21 Sep 91.20 1.70






NSE 00:00 | 21 Sep 91.35 1.80






OPEN 87.75
VOLUME 38218
52-Week high 102.50
52-Week low 38.05
P/E 15.43
Mkt Cap.(Rs cr) 1,090
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 87.75
CLOSE 89.50
VOLUME 38218
52-Week high 102.50
52-Week low 38.05
P/E 15.43
Mkt Cap.(Rs cr) 1,090
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Titagarh Wagons Ltd. (TWL) - Director Report

Company director report

Dear Shareholders

The Directors hereby present their Twenty-third Annual Report on thebusiness and operations of Titagarh Wagons Limited ('the Company' or 'TWL') along with theaudited financial statements for the financial year ended March 31 2020. Theconsolidated performance of Titagarh Group (the Company and its subsidiaries) hasappropriately been referred to in this Report.

1. Profit Retention & Dividend

Titagarh Group's financial performance during the financial year endedMarch 31 2020 was as follows:

Rs. in lakhs



Particulars 2019-20 2018-19 2019-20 2018-19
Revenue from operations 148421.49 106041.04 176632.43 155928.84
Other income 1713.60 3438.87 3402.20 3241.10
Total Income (TI) 150135.09 109479.91 180034.63 159169.94
Earnings before interest tax depreciation and amortisation (EBIDTA) 14602.41 9589.13 15495.94 11598.27
Less: Finance Cost 6502.92 3937.52 8827.29 6517.76
Less: Depreciation and amortization expenses 1813.89 1612.07 2912.68 2399.10
Profit/(Loss) before exceptional items & tax 6285.60 4039.54 3755.97 2681.41
Share of Loss of a joint venture - (10.18) (3.64)
Exceptional items (16135.44) (12695.46) - 784.53
Profit/(Loss) before tax (9849.84) (8655.92) 3745.79 2677.77
Tax Benefits/Expenses 1857.35 3125.72 2050.55 3299.68
Profit/(Loss) for the year after tax from continuing operations (7992.49) (5530.20) 5796.34 5192.92
Loss from discontinued operations (net of tax) - - (9410.55) (7445.53)
Profit/(Loss) for the year after tax (7992.49) (5530.20) (3614.21 (2252.61)
Other Comprehensive Income/(Loss) (net of tax) (11.75) 1.35 528.28 (725.23)
Total Comprehensive Income for the year (8004.24) (5528.85) (3085.93) (2977.84)

2. Effect of Amalgamation in the Financials

During the year under review the Board of Directors had approved theScheme of Amalgamation ('Scheme') of Cimmco Limited ('Cimmco') and Titagarh CapitalPrivate Limited ('TCPL') - two subsidiaries of the Company with the Company. The Hon'bleNational Company Law Tribunal Kolkata Bench ('NCLT') by an order dated 30thSeptember 2020 ('Order') has sanctioned the Scheme. The Appointed Date as per the Schemebeing 1st April 2019 the effect of amalgamation has been considered in thebooks retrospectively (the 'Effect') and accordingly the figures for the yearended 31st March 2020 include the results of the Company and its two erstwhilesubsidiaries namely Cimmco and TCPL and further the figures for the corresponding yearended 31st March 2019 have been restated giving the effect from the beginningof the comparative period in the financial statements i.e. 1st April 2018 asper the requirements of IND AS 103 as per the accounting treatment specified in theScheme.

The Scheme was approved by the respective Board of Directors on August14 2019 and after receipt of no-objection from the Stock Exchanges it was filed with NCLTin January 2020. Approval by the shareholders & creditors of the Company was accordedat their respective meetings convened on April 29 2020 pursuant to the direction of NCLTand although the petition for confirmation of the Scheme was filed by the Company on May11 2020 after persistent follow up the matter was listed by NCLT for hearing on August17 2020 only and finally heard on September 07 2020 when the order for sanctioning theScheme was reserved. The NCLT passed the final order dated September 30 2020 sanctioningthe Scheme. As per the Scheme the shareholders of Cimmco shall be entitled to 13 equityshares of Rs. 2/- each fully paid up for every 24 equity shares of Rs. 10/- each fullypaid held by them on a record date as may be determined to be issued and allotted by TWL.No consideration is payable in case of amalgamation of TCPL (wholly owned subsidiary) asthe shares held by your Company therein shall be cancelled. The Company had no option butto wait for the Order from NCLT to ensure that the financials are reported after givingeffect to the Scheme for the ultimate benefit of shareholders/stakeholders with regard toclarity thereof.

3. Performance and Outlook

The Company's performance during the Financial Year 2019-20 (FY 19-20)on a standalone basis improved substantially as compared to the previous financial yearwith total income up from Rs. 109479.91 lakhs in FY 18-19 to Rs. 150135.09 lakhs in FY19-20 i.e. an increase of 37%; EBIDTA (before exceptional items) from Rs. 9589.13 lakhs inFY 18-19 to Rs. 14602.41 lakhs in FY 19-20 recorded an increase of 53% and PBT (beforeexceptional items) from Rs. 4039.54 lakhs in FY 18-19 to Rs. 6285.60 lakhs in FY 19-20being higher by about 56%. However the exceptional items as detailed in the Notes onAccounts accounted for as a matter of prudence led to Loss for the year amounting to Rs.7992.49 lakh.

On a consolidated basis the Group's total income during the FY 19-20increased from Rs. 159191.54 lakhs in FY 18-19 to Rs. 180034.63 lakhs in FY 19-20 i.e. anincrease of 13.09% and EBIDTA at Rs. 15495.94 Lakhs in FY 19-20 was up by 13.64% againstRs. 11598.27 Lakhs in the previous financial year. Loss from the discontinued operationson account of one overseas subsidiary resulted in Loss after Tax of Rs. 3614.21 Lakhsduring the financial year ended March 31 2020.

The financial performance as reported above was achieved despite theoutbreak of COVID-19 and the lockdown announced by the Governments in the countries wherethe Group operates as a measure to combat the pandemic however the extent of impact wouldalso be experienced in the financial results for the current financial year due to thetime required for synchronization of value-chain with efforts being made for reachingnormal/pre-COVID level of operations which were resumed in phases.

Your Company's order book is healthy and execution of the contract formanufacture of 102 Metro Coaches for Pune Metro Rail is progressing as per schedule.Further the amalgamation of Cimmco Limited with the Company would facilitate achievingimproved operational synergy in operations by combining the activities of the twocompanies better economic control benefits of a single centralized system of managementand help garner larger share of orders for Wagons and foray into products for Defenceestablishment of the country for which industrial license has been issued by the Ministryconcerned. With continued participation in various tenders for the other segments viz.shipbuilding bridges and specialized equipment and consistent focus on improvement in theoperations of overseas subsidiary in Italy combined with resource optimization undertakenby the management the outlook for the current year is reasonably encouraging.

Management Discussion and Analysis

(a) Overall Review

The overall performance of the Company during the financial year2019-20 improved remarkably however the exceptional items viz. impairment of investmentin the overseas subsidiaries resulted in loss for the year.

(b) Segment Review

Rs. Lakhs



Particulars 2019-20 2018-19 Change % 2019-20 2018-19 Change %
Segment Revenue (Gross)
Wagons & Coaches 143789.09 85501.96 68.17% 172000.03 135389.76 27.04%
Specialised Equipment & Bridges 2112.33 7352.70 (71.27)% 2112.33 7352.70 (71.27)%
Shipbuilding 2520.07 13151.65 (80.84)% 2520.07 13151.65 (80.84)%
Others - 34.73 (100.00)% - 34.73 (100.00)%
Total 148421.49 106041.04 39.97% 176632.43 155928.84 13.28%
Segment Results
Wagons & Coaches 14284.95 4207.06 239.55% 14853.39 5942.20 149.96%
Specialised Equipment & Bridges 345.82 981.91 (64.78)% 345.82 978.27 (64.65)%
Shipbuilding 318.21 3195.69 (90.04)% 318.21 3195.69 (90.04)%
Others - (271.73) (100.00)% - (218.88) 100.00%
Total 14948.98 8112.93 84.26% 15517.42 9897.28 56.78%
Total Profit/(Loss) before tax (9849.84) (8655.92) (13.79)% 3745.79 1893.24 97.85%
Profit/(Loss) after Tax from discontinued operations - - - (9410.55) (7445.53) (26.39)%
Total Profit/ (Loss) after tax (7992.49) (5530.20) (44.52)% (3614.21) (2252.61) (60.45)%

During the year under review the Company continued to consolidate itsprominent position in the Wagons industry having been awarded the order for largestquantity by Indian Railways on Group basis in the last big tender and going forward withthe combined capacities of Cimmco your Company augur well for this segment. Apart fromsuccessful execution of the order from National Institute of Ocean Technology withlaunching of two sophisticated coastal research vessels before the scheduled deliverydates which should improve the credentials of the Company in the shipbuilding businessthe train propulsion and electricals business is expected to play very important role ingrowth of the Group in future backed by the credentials and technology of Titagarh FiremaS.p.A. the Company's subsidiary in Italy

Your Company entered into an exclusive cooperation agreement with ABBIndia Limited (ABB) in June 2020 to cater to the large and growing business ofpropulsion equipment (traction converters) for the Indian railway EMU/MEMU market.According to the agreement Titagarh and ABB will work together to design develop andmanufacture state of the art 3 phase IGBT based propulsion systems for EMU/MEMU whichwould be manufactured in Titagarh's plant at Uttarpara Kolkata with certain componentsbeing supplied by ABB.

An agreement has been executed by your Company and its subsidiary:Titagarh Firema SpA Italy with Ansaldo Trasporti S.r.l. ('ATR') Gesa Industry S.r.l.('GESA') Ansaldo Breda SpA ('AB') all based in Italy pursuant whereto TWL is to get alicense for IPR and Projects for Trains another segment which offers substantial scopefor growth.

With a view to achieving substantial savings in power cost yourCompany signed a power purchase Agreement with Fourth Partner Energy in September 2020 toprocure 4.8 MW of solar power for its manufacturing facilities at Titagarh and passengercoach and propulsion unit at Uttarpara to effectively replace approximately 25% of itscurrent annual electricity demand with clean energy. All three power plants are expectedto be commissioned by March 2021.

(c) Overseas Operating Subsidiary Titagarh Firema SpA Italy (TFA)

The financial performance of TFA during the financial year ended March31 2020 was affected adversely mainly due to suspension of operations during the lastquarter consequent to the measures announced by the Government of Italy to combat thespread of COVID-19 pandemic resulting in lower Revenue and Operating Profit. TFA wasforced to close its production facilities with relative reduction of direct productionhours starting from 16th March 2020 till later part of May 2020. This situation hasresulted in postponement of the activities with subsequent delayed delivery of severalproducts which have therefore remained on the production lines even as TFA adoptednecessary procedures necessitated by extraordinary regulations announced by theGovernment.

TFA achieved revenue of Euro 36 million during FY 19-20 compared toEuro 62 million last year. The reduction in revenue has been primarily due to completionof majority of the legacy orders during the initial part of the year and the later partwas impacted due to Covid. Further substantial portion of the new order book is underdesign / prototype phase where in the revenue booking would be lower initially with theramp up happening on commencement of the series production. However it is important tonote that both ongoing projects and new order received will show the execution in terms ofrevenue in the next year. Despite reduction of revenue by 41% as compared to previousyear the EBIDTA% has increased from 2.06% to 4.05% due to reduction in the overall fixedcost. This would help TFA going forward in order to maintain a very competitive rate perhour both for operations and design.

The main activities which took place during the year under review were:

• During the FY 19-20 TFA has seen substantial changes to itsorganisational structure with the induction of new management team from similar industryexperience with the objective of reshaping the entire value chain aimed at re-launchingthe operations towards development and growth.

• The technical consolidation of the TFA order with subsequentincrease of the reliability parameters and an acknowledged appreciation from the Customer;

• The launch of the Catania order (54 trains for the Circumetnearailway line). The design phase is in the advanced stage and the production of theprototype has started in compliance with the contractual schedule.

• In August following the awarding of the Indian order for thePune Metro planning and design activities have been launched and building of the firstcar body has commenced.

• The delivery of the T21 project has begun improving thedelivery time thanks to having obtained approval for the put in service;

• An important milestone was the re?start of collaborations withimportant local players.

The FY 19-20 also marked the passage to international accountingprinciples which would make it possible to better compare the principal indicators of thecompany with those of other international operators. TFA has exercised the

option provided by Legislative Decree 28 February 2005 no. 38 assubsequently amended by Law Decree no. 91 of 24 June 2014 which regulates exercising theoptions provided for by article 5 of European Regulation no. 1606/2002 in the matter ofinternational accounting principles and has voluntarily adopted the InternationalFinancial Reporting Standards issued by the International Accounting Standards Board andadopted by the European Union (hereafter "International Accounting Principles"or "EU IFRS") for the first time for the preparation of this FinancialStatement.

During the year ended March 31 2020 TFA recorded a steep increase inthe cash used in the operating activity amounting to Euro 11.80 million. The Managementhas prepared a Budget / Plan 2021 2025 (the "Budget / Plan") approved by theBoard of Directors on June 30 2020 which shows a substantial financial balance of TFAalso considering the impact of Covid 19. The Budget/ Plan is examined among otheraspects also as regards the reasonableness of the assumptions underlying the projectionsmade by the management by a qualified independent third party company.

Although the pandemic has not led to cancellation or reduction oforders postponement of activities has been witnessed by TFA. Some invitations to tenderhave been deferred by a few months though even in this case there is no evidence ofpotential reduction in the demand for the products manufactured by TFA.

TFA has decided on a well-structured strategic plan to address theimpact of COVID-19 on the market and envisages the growth trend over the next five yearswhich would allow the company to find new production level and greater efficiency would betranslated into structured elements in dealing with the competition.

The current financial year is expected to see improvements in terms ofprofitability compared to the previous year owing above all to the start of production ofnew orders and a general increase in the productivity already the benefits wherefrom havestarted showing in the review of several business processes and policies for operatingcosts. The comprehensive value of the orders is to the tune of Euro 333 million (includingthe framework contract for Euro 216 mln) which places the company for 2021 in asituation of significant coverage of the assumed revenue forecasts.

In particular TFA expects to achieve in the current fiscal animportant growth plan in terms of turnover volume which would entail a significant cashabsorption originating from the start of the new orders including Ferrovie Circumetenawhose contract does not provide for the advance payment. This absorption has beenestimated at around Euro 19.8 mln. In order to meet the financial need a series ofinitiatives have been undertaken including:

• the use of the short term credit line with a Bank;

• new agreement of factoring with recourse;

• release of a security deposit in place with the Trenitaliacustomer;

• release of cash through optimisation of current asset levelsachieved due to higher targeted invoicing during the fiscal year 2021;

• further actions are being sought under several stimulus packagesannounced by the Government of Italy to overcome the liquidity crisis created out ofCovid-19 pandemic.

Financial year 2020- 2021 is expected to bring improvement inprofitability compared to the previous year due to margins from new orders and reductionin the hourly costs with significant increase of workloads and measures undertaken forTFA's operational efficiency both in terms of implementation of new business processesoptimizaiton policies adopted by management reorganisation of various departments amongwhich engineering where a new local unit in the city of Savona was built.

Further the development of the project for a new intercity passengercar also using government financing would make it possible to enter into a new marketarea. In future for the high power electric component investments for the development oftraction converters would be preferred while for the electric motors specialisedbusinesses would be used.

Following the awarding of the Pune Metro project and in continuity withthe strategy defined over recent years all similar product opportunities on the Indianmarket will be pursued to maintain and consolidate the market share. The opportunity oflaunching a new tram in India is being evaluated by using a product platform alreadyestablished on the European market.

(d) Order Book position

The order book of the merged entity stood at Rs. 2500 crore (approx.)today as against Rs. 2200 crore (approx.) at the time of declaring the financial resultsin the previous year. The order book is

well diversified across the different segments of the Company and goingforward the revenue mix of the Company will undergo a substantial change with businessother than Wagons contributing substantially to the top line.

The above order book includes new order received from Indian Railwaysduring the month of September 2020 for supply of 1787 wagons amounting to approximately Rs500 crore.

(e) Industry overview of Business Segments Wagons and Coaches

Indian Railways is the world's 3rd largest rail network with 13452passenger trains and 9141 freight trains. Freight traffic of Indian Railways in FY20(provisional) stood at 999.51 million tonnes.

Private sector companies are being encouraged to participate in railprojects which were earlier largely in the public domain. The cabinet approved'participative models for rail-connectivity and capacity augmented projects' which allowsprivate ownership of some railway lines.

PPP is being utilised in areas such as redevelopment of stationsbuilding private freight terminals and private container train operations. With 100 percent FDI allowed in the railway sector by the Government freight traffic is set toincrease significantly due to rising investment and private sector participation. Metrorail projects are being envisaged across many cities over the next ten years.

Growing industrialisation across the country has increased freighttraffic in the last decade. India is projected to account for 40 per cent of the totalglobal share of rail activity by 2050.


Under Union Budget 2020-21 the Government of India has allocated Rs72216 crore (US$ 10.35 billion) as capital support for Indian Railways. The Governmenthas formulated a 'National Rail Plan' which will enable the country to integrate its railnetwork with other modes of transport and develop a multi-modal transportation network.

Freight remains the major revenue earning segment for Railwaysaccounting for 64 per cent of the total revenue in FY20 followed by the passengersegment. Dedicated Freight Corridor Corp. of India Ltd (DFCCIL) is already building twofreight corridors - Eastern Freight Corridor from Ludhiana to Dankuni (1856 km) andWestern Freight Corridor from Dadri to Jawaharlal Nehru Port (1504 km) at a total costof Rs 81000 crore (US$ 11.59 billion).

Metro railways

Metro trains are rail-based mass rapid transit systems that operate ona privileged right-of-way - either underground or elevated over street level separatedfrom all other modes of transport in an urban area. There are currently 13 operationalmetro systems in India with a total of 678.52 kilometres of operational metro lines and540 stations. A further 550+ km of lines are under construction.

As per the latest National Urban Transport Policy metro rail system isto be constructed in every city with a population of 20 lakh or more with Union Governmentproviding financial assistance either directly or through multilateral funding agencies orthrough a combination of both. The number of metros expected to come up in India is about50. Since the cost of a heavy metro is very high various cities have been asked toexplore options light metro tram and monorail.

Metro rail system enables large-scale rapid and low-cost movement ofpeople while causing very little pollution as compared to conventional modes of transportfor thickly populated areas where traffic is a major challenge.

However making available the land for laying tracks very largeproject expenditure infrastructural issues are some of the major threats in Metrosegment. The technologies used in various types of metros in terms of system voltagesaxle loads etc are also a challenge which need to be decided based on the ridership citylayout and other related parameters.


Given rising urbanisation and increasing population levels in Indiaimplementation of metro rail systems will become imperative as mass rapid transit systemsare the best way to decongest traffic. National Urban Transport Policy also ensures thatmetros in some form or the other come up in cities thereby ensuring a steady requirementof metro rolling stock for the future.

Shipbuilding sector overview

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


Although the global shipping industry has been witnessing slowdown dueto declining demand and overcapacity the demand for various vessels and barges etc. fromthe Government establishment/Indian Navy offsets to certain extent the challenge.


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

(f) Discussion on Financial Performance with respect to OperationalPerformance

During the year under review the Company took various operationalmeasures viz. consolidation of the different products in line with the plant capacitieswhich resulted in improved efficiency by turning the plant into a centre of excellence forthe particular product thereby re-aligning the Company's business into four distinct partsviz. "Freight Transit and Propulsion" "Shipbuilding" "Bridges& Defence". Continuing focus of the management is consistently on undertakingcost rationalization better manufacturing processes improved productivity andoptimization of resource for improvement in performance aimed at achieving results betterthan the trend witnessed in the industries in which the Company operates. Viewed in thisbackdrop the Company's performance for the year under review is considered to be in linewith the circumstances prevailing.

(g) Overall outlook for the current year

In addition to the healthy order book as on date the Company'sfocussed approach on fixed cost reduction in terms of consolidating the common functionsand reducing duplication of manpower consolidating its prominent position in the RollingStock sector coupled with the access to strong technology for Metro Coaches through itssubsidiary in Italy and diversified product portfolio strategy of adopting innovativeways to cater to its customers and preparedness to seize opportunity in products/projectsfor defence establishment of India combined with the benefits to be accrued upon themerger of Cimmco Limited and Titagarh Capital Private Limited with the Company make theoutlook for the current year encouraging.

(h) Key Financial Ratios

As stipulated in the Regulation 34(3) of SEBI (LODR) Regulations 2015as amended the Company reports as follows: (a) Details of significant changes (i.e.change of 25% or more as compared to the immediately previous financial year) in keyfinancial ratios or sector specific ratios along with detailed explanations therefor:

Sl. Key Financial Ratios 2019-20 2018-19 Difference (%)
1 Debtors Turnover Ratio (%) 11% 18% (38.89)%
2 Inventory Turnover Ratio (%) 14% 30% (53.33)%
3 Interest Coverage Ratio (times) 1.98 1.56 26.92%
4 Current Ratio (times) 2.40 1.26 90.48%
5 Debt Equity Ratio 0.26 0.33 (21.21)%
6 Operating Profit Margin (%) 8.68% 5.80% 49.66%
7 Net Profit Margin (%) (6.64)% (8.16)% 18.63%

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

1&2. Better Working capital Utilization

3. Increase is interest coverage is good and this is due to betteroperational reult.

4. Current ratio has improved and is within the permissible standards.

5. Debt Equity ratio has improved due to better operating margin andcash generated from operation being

used to repay/prepay the debt.

6. Operating profit margin is due to increase in sales and betterprofit margins on new contracts.

(b) details of any change in Return on Net Worth as compared to theimmediately previous financial year along with a detailed explanation thereof:

Key Financial Ratios 2019-20 2018-19 Difference (%)
Return on Net Worth (%)
- Before considering exceptional item 7.70% 4.51% 70.73%
- After considering exceptional item (10)% (6)% (66.67%)

Notes on significant changes in financial ratios where change is >25%: The decline is due to provision for impairment in investment and receivables from theCompany's Italian & Singapore subsidiary made during FYE 31.03.2020 however thereturn on net worth before the above impact actually 70.73%.

4. Dividend

In view of the loss for the year the Directors express their inabilityto recommend any dividend for the FY 2019-20.

5. Employee Stock Options Scheme/Change in Share Capital

Pursuant to approval of the shareholders the Nomination andRemuneration Committee (also functioning as Compensation Committee) at its meetings heldon March 4 2015 and May 19 2017 in accordance with the TWL Employees Stock OptionsScheme 2014 (ESOS) granted to the eligible employees 500000 options each respectivelyto be converted into equivalent number of equity shares of Rs. 2/- each fully paid as perthe ESOS.

Options resulting in 35000 equity shares and 43250 equity sharesallotted on 3rd April 2019 and 18th June 2019 respectively to theeligible employees upon exercise by them in conformity with ESOS led to increase in thepaid up equity share capital to Rs. 231212340/- as at 31st March 2020consisting of 115606170 equity shares of Rs. 2/- each fully paid up. The equity sharesso allotted rank pari-passu with the existing equity shares of the Company.

The disclosures as required under Regulation 14 of Securities ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014 have been placed on thecorporate website of the Company

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

No material changes and commitments have occurred since the date ofclose of the financial year to which the financial statements relate till the date ofthis report which might affect the financial position of the Company. However the impacton the financial performance of the Company caused due to the outbreak of COVID-19pandemic is explained separately in the notes to the financial statements.

7. Investor Education Protection Fund (IEPF)

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

Pursuant to the provisions of Section 124(6) of the Act read with theIEPF Rules all the shares on which dividends remain unpaid or unclaimed for a period ofseven consecutive years or more shall be transferred to the demat account of the IEPFAuthority ('IEPF Account') as notified by the Ministry of Corporate Affairs. In accordancewith the said provisions the Company had executed and submitted the necessary documentsfor transfer of 6567 equity shares of Rs. 2/- each to the IEPF account on 9thNovember 2019 in respect of which dividend had not been claimed by the members for sevenconsecutive years or more as on the cut-off date i.e. 13th October 2019. Thedetails of all shares transferred to the IEPF Account are uploaded on the Company'swebsite.

The Company has identified 191 shareholders holding 6873 equity sharesin aggregate who have not claimed their dividend consecutively since FY 2012-13 andtherefore shares held by them have been transferred to the IEPF Account on due date i.e.24/09/2020. The Company had published a Notice in the leading Newspaper both in Englishand Vernacular language on 24th June 2020 and sent a communication to allconcerned with information regarding transfer of their shares and reminder for takingappropriate action for claiming the dividend unclaimed on their shares. The details ofsuch shareholders are uploaded on the Company's website.

8. Transfer to Reserves

There being no surplus no amount is proposed to be transferred for theyear under review to the general reserves.

9. Risk Management Risks and Concerns

A Risk Management Policy to identify and assess the key risk areasmonitor mitigation measures and report compliance has been adopted. Based on a reviewmajor elements of risks have been identified and are being monitored for effective andtimely mitigation.

Risk management is an integral part of the Company's risk managementpolicy adopted by the Board with periodic review by the Audit Committee and the Board.Prudence and conservative dealing with risks is at the core of risk management strategybeing followed by the Company. The risks both internal and external to which the Companyis exposed to include macroeconomic regulatory strategic financial operational valuechain human resources etc. and each of them is taken into consideration for developmentand maintaining of a robust mechanism for mitigation which is evolving with time andcircumstances within which the Company operates.

10. Subsidiary Companies and Joint Venture

A report containing the details required under Section 134 of theCompanies Act 2013 ('the Act') read with Rule 8(1) of the Companies (Accounts) Rules2014 in respect of performance and financial position for the financial year ended March31 2020 of subsidiaries: Titagarh Singapore Pte. Ltd. Singapore and Titagarh Firema SpAand Joint Venture Company: Matiere Titagarh Bridges Private Limited and Titagarh MermecPrivate Limited included in the Consolidated Financial Report (CFS) in the Form AOC-1 isannexed to this Report and marked as Annexure DR-2. The CFS is attached to thisAnnual Report.

As reported hereinbefore two subsidiaries of the Company: CimmcoLimited and Titagarh Capital Private Limited have been amalgamated into the Company witheffect from April 01 2019 being the Appointed Date.

Pursuant to the order passed by the Commercial Court of Paris on 13thAugust 2019 the Company's erstwhile wholly-owned Subsidiary in France: Titagarh WagonsAFR ('TWA') is under liquidation and the Company is no longer in control of TWA w.e.f. 4thJune 2019 being the date when the start of the Rehabilitation Procedure was approved bythe said Court. During the year the group has de-recognised the entire assets &liabilities of TWA.

The Company has acquired the shares held by Matiere SAS France('Matiere') representing 50% of the paid-up share capital of Matiere Titagarh BridgesPrivate Limited ('MTBPL'). As a result of the above the shareholding of the Company inMTBPL has changed from 50% to 100% and thus MTBPL has become a wholly-owned subsidiary ofthe Company w.e.f. 14th July 2020.

11. Copy of the Annual Return

Pursuant to the provisions of Section 92(3) of the Act the copy of theannual return shall be uploaded on the website of the and the same can be viewed bythe members and stakeholders after 48 hours from the conclusion of the ensuing 23rdAnnual General Meeting of the Company.

12. Number of Board Meetings

The Board of Directors met Seven (7) times during the financial year2019-20 as per the details provided in the Corporate Governance Report forming part ofAnnual Report.

13. Loans Guarantee and Investments

Particulars of loans guarantees and investments made by the Companypursuant to the Section 186 of the Act are furnished under notes to financial statements.The Company has been informed that the said loan guarantee and security are proposed tobe utilised by each recipient for its general business/corporate purposes.

14. Significant and Material orders

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

15. Composition of Audit Committee

The Audit Committee constituted by the Board has Shri Atul Joshi asChairman and Shri Manoj Mohanka and Shri Sunirmal Talukdar as the members. Further detailsare provided in the Corporate Governance Report.

During the year all recommendations made by the Audit Committee wereaccepted by the Board.

16. Related Party Transactions

All Related Party Transactions (RPTs) are entered into by the Companypursuant to compliance with the applicable laws and also in accordance with the policyadopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated bythe SEBI (LODR) Regulations 2015 and based thereon final approval of the Board isobtained. The particulars of contracts or arrangements with related parties referred to insection 188(1) of the Act and as mentioned in form AOC-2 of the Rules prescribed in theCompanies (Accounts) Rules 2014 under the Act are annexed hereto and marked as AnnexureDR-3.

17. Corporate Governance Report

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

18. Internal Control System

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

a. That its assets are safeguarded

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

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

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

19. Vigil Mechanism

A fraud and corruption free environment as part of work culture of theCompany is the objective and with that in view a Vigil Mechanism Policy has been adoptedby the Board which is uploaded on the web site of the Company at Nocomplaint of this nature has been received by the Audit Committee during the year underreview.

20. Internal Complaints Committee

The Company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the further details of which are givenin the Corporate Governance Report. No complaint was lodged with the Committee during thefinancial year 2019-20.

21. Directors and Key Managerial Personnel

Pursuant to the recommendations of the Nomination and RemunerationCommittee (NRC) and subject to the approval of the members the Company at the 21stAnnual General Meeting (AGM) the Board at its meetings held on 4th February2019 and 29th May 2019 passed resolutions for reappointment of Shri SudiptaMukherjee (DIN: 06871871) as Whole-time Director w.e.f. 15th May 2019 andappointment of Shri Anil Kumar Agarwal (DIN: 01501767) as Additional Director of theCompany designated as Director (Finance) and Chief Financial Officer w.e.f. 29thMay 2019 respectively. The members in their 21st AGM held on 20thSeptember 2019 have passed necessary resolutions for reappointment/appointment of ShriSudipta Mukherjee and Shri Anil Kumar Agarwal for a term of five years.

Pursuant to the recommendations of the Nomination and RemunerationCommittee (NRC) and subject to the approval of the members of the Company at ensuing AGMthe Board had on 21st August 2019 10th December 2019 22ndJune 2020 and 13th August 2020 appointed Shri Vinod Kumar Sharma (DIN:02051084) Shri Sunirmal Talukdar (DIN: 00920608) Ms. Nayantara Palchoudhuri (DIN:00581440) and Shri Krishan Kumar Jalan (DIN: 01767702) as Additional Director (Category:Independent) respectively w.e.f. the date of passing of such resolution to hold officefor a term of 5 years.

Shri D.N. Davar Shri V.K. Sharma and Shri Ramsebak Bandyopadhyaytendered their resignation from the position of Independent Director of the Company on 13thSeptember 2019 28th February 2020 and 4th May 2020 respectivelyowing to their personal reasons.

Pursuant to the recommendation of the NRC the Board at its meetingheld on 31st July 2020 subject to approval of the shareholders at the ensuingAGM reappointed Shri Umesh Chowdhary (DIN: 00313652) as the Managing Director & ViceChairman of the Company for five years w.e.f. 1st October 2020.

The Board has recommended necessary resolutions at the ensuing 23ndAGM for the appointment of Shri Sunirmal Talukdar Ms. Nayantara Palchoudhuri and ShriK.K. Jalan as Independent Directors and Shri Umesh Chowdhary as the Managing Director& Vice Chairman of the Company.

Shri J.P. Chowdhary Executive Chairman retires by rotation at theensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible forre-appointment.

The information prescribed by SEBI (LODR) Regulations 2015 in respectof the above named Directors is given in the Notice of Twenty Third Annual GeneralMeeting.

During the year under review there was no change in the Key ManagerialPersonnel of the Company except the aforesaid appointment/reappointment of Shri Anil KumarAgarwal and Shri Sudipta Mukherjee.

22. Evaluation of the Board's performance Committee and IndividualDirectors

In compliance with the Act and SEBI (LODR) Regulations 2015 theperformance evaluation of the Board Committees and Individual Directors was carried outduring the FY 2019-20 as per the details set out in Corporate Governance Report.

23. Declaration by Independent Directors

Declarations pursuant to the Sections 164 and 149(6) of the Act andSEBI (LODR) Regulations 2015 and affirmation of compliance with the Code of Conduct aswell as the Code for Regulation of Insider Trading adopted by the Board by all theIndependent Directors of the Company have been made.

24. Remuneration Policy and remuneration

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

25. Directors' Responsibility Statement

The Directors state that:

• Appropriate Accounting Standards as are applicable to the AnnualStatement of Accounts for the financial year ended March 31 2020 had been followed inpreparation of the said accounts and there were no material departures therefrom requiringany explanation;

• The directors had selected and followed the accounting policiesas described in the Notes on Accounts and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give true and fair view of the state ofaffairs of the Company at the end of financial year and of the loss of the Company forthat period;

• The directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

• The directors had prepared the Annual Accounts on a goingconcern basis; and

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

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

26. Statutory Auditors

Price Waterhouse & Co Chartered Accountants LLP CharteredAccountants (FRN 304026E/E-300009) were appointed as Statutory Auditors of the Company atthe 20th AGM until the conclusion of 25th AGM subject toratification of their appointment at the AGM every year. In view of the amendment underthe provisions of section 139 of the Companies Act 2013 the members passed a resolutionin the 21st Annual General Meeting held on 29th September 2018 todispense away the requirement of ratification of appointment.

The Auditors' Report on the standalone financial statement for the yearended 31st March 2020 does not contain any qualification reservation oradverse remark. As regards emphasis of matter being Note No. 4 (revised authorized sharecapital after merger delay in filing of financial results with SEBI and application ofthe Company for extension of time for submission thereof and management's assessment ofthe financial impact due to the Covid-19 pandemic) placed by the Auditor in their Reporton Standalone financial statement the Notes No. 3 5 and 6 are self-explanatory and nofurther explanation is considered necessary in this Report.

27. Consolidated Financial Statements

In accordance with IND-AS 24 issued by the Institute of CharteredAccountants of India consolidated financial accounts prepared on the basis of financialstatements received from subsidiary companies as approved by their respective Boards formpart of this Report & Accounts.

The Auditors' Report on the consolidated financial statement for theyear ended 31st March 2020 does not contain any qualification reservation oradverse remark except qualified opinion in regard to non-compliance with Ind AS 110'Consolidated Financial Statements' for the year ended March 31 2020 owing tonon-consolidation of the financial results of Titagarh Wagons AFR (TWA) for the periodfrom April 1 2019 to June 4 2019. In this regard the Company had submitted theStatement on impact of audit qualifications to the Stock Exchanges on 8thOctober 2020 explaining that the Commercial Court of Paris vide its judgement dated 13thAugust 2019 had approved a plan for transfer of business and assets of the Company'swholly-owned Subsidiary in France: TWA to another bidder and ordered for liquidation ofTWA. On 4th June 2019 the Commercial Court of Paris has approved the start ofRehabilitation Procedure and from said date Parent Company was no longer in control ofTWA under French law. Accordingly the Group has derecognised the net assets value of TWAfrom its consolidated financial statements. The net assets value as on 4th June2019 has been considered as the same value as appearing on 31st March 2019since complete financial information including the financial statements from 1stApril 2019 till 4th June 2019 is not available for TWA on account of reasonsstated above. The de-recognition based on the net asset value as on 31st March2019 instead of 4th June 2019 will not have any material impact on the totalconsolidated profit / (loss) before tax except disclosure under respective line items. Asregards emphasis of matter being Note No. 5 (revised authorized share capital aftermerger delay in filing of financial results with SEBI and application of the Company forextension of time for submission thereof management's assessment of the financial impactdue to the Covid-19 pandemic and preparation of accounts of TFA on going concern basisi)placed by the Auditor in their Report on Consolidated financial statement the Notes No.4 6 8 and 9 are self-explanatory and no further explanation is considered necessary inthis Report.

28. Cost Auditors

M R Vyas & Associates Cost Accountants have been reappointed asCost Auditors to conduct cost audit of the accounts maintained by the Company in respectof the products manufactured by the Company for the Financial Year 2019-20 subject toratification of their remuneration by the shareholders in accordance with the provisionsof Section 148 of the Act and the Companies (Cost Records and Audit) Rules 2014. The CostAudit Report for the financial year ended 31st March 2020 would be filed asstipulated by the applicable provisions of law. The Company is making and maintaining theaccounts and cost records as specified by the Central Government under the provisions ofSection 148(1) of the Act.

29. Secretarial Auditor

Secretarial Audit has been conducted by Vanita Sawant & AssociatesPracticing Company Secretaries appointed by the Board and their report is annexed heretoand marked as Annexure DR-4. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

30. Deposits

The Company did not accept any deposits covered under Chapter V of theCompanies Act 2013 during the financial year ended March 31 2020.

31. Particulars of Remuneration of Directors/KMP/Employees

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

Human Resources

A. Empowering the employees

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

B. Industrial Relations

Industrial relations at all sites of the Company remained cordial.

C. No. of Employees:

Manpower employed as at March 31 2020 was 565.

32. Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo

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

33. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertakenduring the financial year ended March 31 2020 pursuant to the provisions of Section 135of the Act and rules made thereunder is annexed to this Board's Report and marked as AnnexureDR-7.

Apart from the above the Company makes inter alia donations to thecharitable institutions directly and through philanthropic organisations engaged inproviding medical education and other reliefs to the economically weaker sections of thesociety. Industrial Training Institute (the "ITI") set up on the Company's landat Titagarh plant situate in Barrackpore North 24 Parganas under Private PublicPartnership (PPP) is yet another area. The ITI with access to the requisite infrastructureprovided by the Company imparts hands-on training to the local people. A large number ofstudents in various batches have passed and significant number of them are engaged invarious jobs in the industry. The ITI has been recognised by the State Government as oneof the best in the country and it caters to the requirement of skilled workmen byindustrial units.

34. Listing

The Company's Equity Shares are listed at the BSE Limited (BSE) and TheNational Stock Exchange of India Limited (NSE). The listing fees for the financial yearending on March 31 2021 have been duly paid.

35. Compliance with Secretarial Standards

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

36. Forward Looking Statement

The statements in this report describing the Company's policystrategy projections estimation and expectations may appear forward looking statementswithin the meaning of applicable securities laws or regulations. These statements arebased on certain assumptions and expectations of future events and the actual resultscould materially differ from those expressly mentioned in this Report or implied forvarious factors including those mentioned in the paragraph "Risks and Concerns"herein above and subsequent developments information or events.

37. Acknowledgement

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

For and on behalf of the Board
Kolkata J P Chowdhary
October 08 2020

Executive Chairman