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Titagarh Wagons Ltd.

BSE: 532966 Sector: Engineering
NSE: TWL ISIN Code: INE615H01020
BSE 00:00 | 22 Sep 40.20 -0.90






NSE 00:00 | 22 Sep 40.20 -0.85






OPEN 39.50
VOLUME 19449
52-Week high 61.45
52-Week low 20.50
P/E 6.64
Mkt Cap.(Rs cr) 465
Buy Price 40.20
Buy Qty 712.00
Sell Price 40.45
Sell Qty 60.00
OPEN 39.50
CLOSE 41.10
VOLUME 19449
52-Week high 61.45
52-Week low 20.50
P/E 6.64
Mkt Cap.(Rs cr) 465
Buy Price 40.20
Buy Qty 712.00
Sell Price 40.45
Sell Qty 60.00

Titagarh Wagons Ltd. (TWL) - Director Report

Company director report

Dear Shareholders

The Directors hereby present their Twenty First Annual Report on the business andoperations of the Company (‘the Company' or ‘TWL') along with the auditedfinancial statements for the financial year ended March 31 2019. The consolidatedperformance of Titagarh Group (the Company and its subsidiaries) has been referred towherever so required.

1. Profit Retention & Dividend

Titagarh Group's financial performance during the financial year ended March 31 2019was follows:

Rs. in lakhs



Particulars 2018-19 2017-18 2018-19 2017-18
Revenue from operations 91011.28 31652.05 171077.50 127143.84
Other income 2209.25 2328.20 5336.83 2987.86
Total Income (Tl) 93220.53 33980.25 176414.33 130131.70
Earnings before interest tax depreciation and amortisation (EBIDTA) 7586.91 2082.86 8739.16 (6686.54)
Less: Finance Cost 2390.02 864.45 6837.59 4405.99
Less: Depreciation and amortization expenses 1237.85 1297.20 3614.79 5083.59
Profit/(Loss) before exceptional items & tax 3959.04 (78.79) (1713.22) (16176.11)
Share of Loss of a joint venture (3.64) 32.36
Exceptional items (12695.46) - 3832.55 509.12
(Loss) before tax (8736.42) (78.79) (5549.41) (16717.59)
Tax Benefits/Expenses 449.02 370.33 3296.80 1994.16
(Loss) for the year after tax (8287.40) 291.54 (2252.61) (14723.43)
Other Comprehensive Income/(Loss) (net of ta: <) (4.89) (3.66) (725.23) 352674
Total Comprehensive Income for the year (8292.29) 287.88 (2977.84) (11196.69)

1. Performance and Outlook

The Company's performance during the Financial Year 2018-19 (FY 18-19) on a standalonebasis improved remarkably as compared to the previous financial year with all threesegments viz. Wagons & Coaches Specialised Equipment & Bridges and Shipbuildingrecording substantial increase in revenue. Earnings from Shipbuilding during the FY 18-19increased about three times against the previous fiscal owing to execution of theprestigious orders received from Indian Navy and National Institute of Ocean Technology

(NIOT). Operating Income from Specialised Equipment & Bridges went up by about58.4% and from Wagons & Coaches and Shipbuilding increased several times over thecorresponding numbers respectively in the FY 17-18. However the FY 18-19 on a standalonebasis ended with loss due to exceptional item being provision as a matter of prudencerequired to be made for impairment of the Company's investment in the Company's subsidiaryin France consequent to it being referred for rehabilitation process.

On a consolidated basis the Group's revenue during the FY 18-19 increased by 34.6% andEBIDTA was Rs. 8739.16 Lakhs against negative Rs.6686.54 lakhs in the previous financialyear. Loss After Tax at Rs.2252.61 Lakhs during the financial year ended March 31 2019mainly due to the problems faced by the Company's subsidiary in France reduced fromRs.14723.43 Lakhs in the FY 17-18.

Indian Railway (IR) announced procurement of 11790 Wagons in December 2018 and yourCompany was awarded order for 5058 Wagons valued at Rs. 156087 Lakhs which is underexecution as per schedule. IR has also issued another tender for 10168 Wagons during thecurrent financial year and after reverse auction scheduled shortly placement of the orderis expected in this quarter.

Your Company has also participated and technically qualified in the tender announced byMaharashtra Metro Rail Corporation for Metro Coaches for Pune and the outcome is awaited.Your Directors' emphasis on achieving more efficient value chain higher utilisation ofcapacity available with the Company and securing repeat orders for the products includingfrom private sector customers is continuing consistently and the overall outlook fornotable improvement in the consolidated financial performance during the current fiscal ison track.

The Directors had at their meeting held on May 30 2019 (adjourned from May 29 2019)approved a draft Scheme of Amalgamation for merger of Cimmco Limited- a subsidiaryTitagarh Capital Private Limited- a wholly owned subsidiary and Titagarh EnterprisesLimited- a Group company (Transferor Companies No. 1 2 & 3 respectively) with yourCompany (the Scheme) to leverage the synergistic advantages rationalization operationaland cost optimization etc. subject to necessary approvals. As per the Scheme theshareholders of the Transferor Company No. 1 shall be entitled to 13 equity shares ofRs.2/- each fully paid up for every 24 equity shares of Rs.10 each fully paid held by themand shareholders of the Transferor Company No. 3 shall be entitled to11 equity shares ofRs.2/- each fully paid for every 13 Equity Shares of Rs.10 each fully paid up held by themon a record date to be determined to be issued and allotted by Titagarh Wagons Limited.No consideration is payable in case of merger of the Transferor Company No. 2 (whollyowned subsidiary) since the shares held by your Company therein shall be cancelled.

The Board at its meeting held on August 14 2019 has after review directed filing ofthe revised Scheme by excluding the Transferor Company No. 3 from the Scheme with theStock Exchanges/Authorities concerned. The Scheme is in opinion of the Board fair and inthe interest of all stakeholders.

Management Discussion and Analysis Overall Review

The overall performance of the Company during the financial year 2018-19 improvednotably howeverthe exceptional item viz. provision required to be made for impairment ofinvestment in and certain receivables from the subsidiary in France resulted in loss afterexceptional item and tax.

On consolidated basis although revenue and segment results increased significantly theexceptional item stated above resulted in negative bottomline however your Company wasable to substantially reduce the loss after tax as compared to the corresponding number inthe previous financial year which were affected by one-time provision/write-off of lossesincurred on account of reestimation of certain long time contracts that were inheritedalong with the acquisition of the business in the Group's subsidiary in Italy andtechnical problem in the bogies hampering production at the other subsidiary in France.

Segment Review

Rs. in lakhs



Particulars 2018-19 2017-18 Change % 2018-19 2017-18 Change %
Segment Revenue (Gross)
Wagons & Coaches 70499.41 23260.62 203.08 150538.42 118668.96 26.86
Specialised Equipment & Bridges 7352.70 4150.84 77.14 7352.70 4150.84 77.14
Shipbuilding 13151.65 3516.72 273.97 13151.65 3516.72 273.97
Others 7.52 723.87 -98.96 34.73 807.32 -95.70
Total 91011.28 31652.05 187.54 171077.50 127143.84 34.55
Segment Results
Wagons & Coaches 1689.25 18.83 8971 (803.25) (11553.81) -93.05
Specialised Equipment & Bridges 981.91 619.93 58.39 978.27 357.47 173.66
Shipbuilding 3159.69 549.08 475.45 3159.69 549.08 475.45
Others (28.91) 248.84 -111.6 (218.88) (1780.85) -87.71
Total 5838.66 1436.68 306.40 3151.83 (12428.11) -125.4
Total Profit/(Loss) before tax and interest (8736.42) (78.79) 11088 (5549.41) (16717.59) -66.80
Total Loss after tax (8287.40) 291.54 -2943 (2252.61) (14723.43) -84.7

On a standalone basis the Company has improved its overall performance with sales fromRs. 31652 Lakhs in FY17-18 to Rs. 91011 Lakhs in FY18-19 and EBIDTA from Rs.2082.86 LakhsCrores in FY17-18 to Rs. 7586.91 Lakhs in FY1819 recording increase of 187.5% and 264.2%respectively. The Company achieved the highest standalone revenue during the FY 2018-19since incorporation.

During the year apart from the conventional Wagons where the Company continued tomaintain its leadership position having bagged an order for 5058 wagons out of 11790Wagons finalised for procurement by the Indian Railways the Company also successfullylaunched three ships for the Indian Navy and National Institute of Ocean Technology.Further a development order for train propulsion and electrical from Indian Railways wasalso received by the Company owing to the credentials and technology of its Italiansubsidiary Titagarh Firema S.p.A.

On a consolidated basis the Group's revenue was up by about 34.5% during FY 2018-19 ascompared to the previous financial year and the performance of the Company's subsidiary inItaly improved significantly. However the profit of the Group was affected by theprovision required for impairment of investment and certain receivables from the Company'ssubsidiary in France which had to be referred for rehabilitation proceedings.

Overseas Operating Subsidiaries Titagarh Wagons AFR France

Titagarh Wagons AFR (TWA) continued to face several financial and operational problemsduring the year under review resulting in a revenue of Euro 21.28 million as against Euro39.53 million in the previous year and loss before tax (before exceptional items) of Euro5.58 million as against a corresponding loss of Euro 5.84 million. The exceptional lossesfor the year were Euro 3.30 million bringing the total loss before tax of Euro 8.88million as against Euro 5.84 million in the last year.

TWA had undertaken several restructuring steps inter alia change of the top managementincluding the CEO in January 2019 and implemented several cost cutting and businessimprovement measures. However before the benefit of the aforesaid restructuring couldcome about TWA was required to be referred for rehabilitation process.

As a matter of prudence and precaution the Board of TWL has decided to provide forimpairment of 100% value of investment in the French subsidiary amounting to Euro 16million. Reference having been made to the Commercial Court of Paris (‘the Court')the start of the process on 4th June 2019 is deemed as the date from which TWA is nolonger in control of the Company and by an order dated 13th August 2019 the Court hasapproved transfer of business and assets of TWA to another bidder and ordered itsliquidation.

Titagarh Firema SpA Italy

Titagarh Firema S.p.A. (TFA) has made notable progress in curtailing the large lossesmade during FY 2017-18 and has reported a revenue of Euro 62 million against Euro 69.97million in the previous financial year with a positive EBIDTA (before exceptional items)of Euro 2.19 million against a loss of Euro 6.33 million last year. The PBT of TFA wasEuro 2.4 million negative this year against Euro 12.58 million negative in FY 17-18 andthe order book of TFA stood at around Euro 310 million.

TFA had also been able to optimise cost by consolidating the operations from 4 sites to2 sites and is continuing to pursue consolidation and cost optimisation whileparticipating in global tenders for securing more orders. TFA has excellent products andtechnology with the main site of production in Caserta being one of the largest trainmanufacturing sites in Europe. TFA has successfully executed all the legacy contractsacquired with the company most of them being under technical and commercial disputes formore than 10 years. TFA has already absorbed the losses from executing these contractswhich it considers as a part of the cost of acquisition. The Italian subsidiary is notonly active in the European market but also pursuing to participate with the HoldingCompany in the infrastructure projects in India.

Cimmco Limited - Operating subsidiary in India

The Wagons & Engineering Products segment recorded a commendable increase of 94.67%in turnover for FY 201819 as compared to the previous year basically due to increase insale of wagons to the private customers and sale of Loco. The sale of wagons to the IndianRailways (IR) saw an increase of 12.92% as compared to previous year.

Order Book position

At the time of approval by the Board of the financial statements for FY 208-19 theorder book of the Company on standalone basis stood at Rs. 2200 Crores as against Rs. 800crores on the corresponding date in the previous year.

Cimmco Limited (Cimmco) the Indian subsidiary of the Company has the order book of Rs.500 crores as against Rs. 400 crores in the previous financial year.

Thus the total order book of Titagarh and Cimmco combined was at Rs. 2700 crores andthe Group order book at Rs.5500 crore which is the highest ever.

Industry overview of Business Segments Wagons and Coaches

India has the world's fourth largest railway network comprising 119630 kilometresoftotal track and 92081 kilometres of running track over a route of 66687 kilometres (bythe end of FY16). The Indian Railways have a fleet of more than 2.51 lac wagons 70241coaches and 11112 locomotives. The traffic carried by the Indian Railways can be splitinto two segments: passenger and freight.


Construction of the Eastern and the Western Dedicated Freight Corridors will leadfreight volumes to more than double to 2165 million tonnes by FY 2020. Increasingcarrying capacity cost effectiveness and improved quality of service will escalaterailway's share of freight movement from 35% to 50% by 2020.


Government policy on rail network operations cessation of providing fee supply itemscausing enhanced working capital requirement unhealthy competition are some of the majorchallenges.


The Government has set aside a sum of Rs. 856020 crore to carry out medium-termstructural reforms as well as infrastructure development such as electrification andexpansion of the existing network improving safety increasing its fleet of rollingstock providing for high speed rail and freight corridors and providing better passengeramenities. The Government of India has decided to create a Rs. 30000 crore Rail IndiaDevelopment Fund (with assistance from World Bank). This will support commercially viableinvestment in the railway sector in India over the next seven years. The Indian Railwaysaims to be the engine for India's economic growth and development by aiming to earn grossrevenues worth $44.5 billion by FY20.

Metro railways

Metro trains are rail-based mass rapid transit systems that operate on a privilegedright-of-way - either underground or elevated over street level separated from all othermodes of transport in an urban area. Currently there are eight operational metro systemsin India. As of September 2016 India had 324 km ofoperational metro lines in the citiesof Delhi and NCR Gurgaon Kolkata Chennai Bengaluru Jaipur and Mumbai. A further520-km-long lines are under construction and a further 553-km are under consideration.There has been a rapid increase in the expansion of urban mass transportation systemsacross India thanks to continued support from the Central and State Governments andmulti-lateral development agencies.

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

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


Given rising urbanisation and increasing population levels in India implementation ofmetro rail systems will become imperative as mass rapid transit systems are the best wayto decongest traffic. The implementation of the 2017 Metro Rail Policy also augurs wellfor the sector.

Shipbuilding sector overview

The shipbuilding industry has a similar impact on the Indian economy as theinfrastructure sector due to higher multiplier effect on investment and turnover (11.6 and4.2 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 due to decliningdemand and overcapacity the demand for various vessels and barges etc. from theGovernment establishment/Indian Navy offsets to certain extent the challenge.


The revival of the shipbuilding sector is a key part of the Central Government's Makein India initiative. Participation in various tenders is continuing and new orders areexpected though gradually on the basis of the 10-year policy package. The CentralGovernment is targeting to increase India's share of the global shipbuilding industry fromcurrent levels of 0.45% to 5% by 2020.

Discussion on Financial Performance with respect to Operational Performance

Continuing focus of the management is consistently on undertaking better manufacturingprocesses improved productivity and optimization of resource for improvement inperformance aimed at achieving results better than the trend witnessed in the industriesin which the Company operates. Viewed in this backdrop the Company's performance for theyear under review is considered to be in line with the circumstances prevailing.

Overall outlook for the current year

In addition to the healthy order book as on date the Company's focussed approach onconsolidating its prominent position in the Rolling Stock sector coupled with the accessto strong technology for Metro Coaches through its subsidiary in Italy and diversifiedproduct portfolio strategy of innovative ways to cater to its customers and preparednessto seize opportunity in products/projects for defence establishment of India make theoutlook for the current year encouraging.

Key Financial Ratios

As stipulated in the Regulation 34(3) of SEBI (LODR) Regulations 2015 as amended theCompany is required to give the following:

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

Sl. Key Financial Ratios 2018-19 2017-18 Difference (%)
1 Debtors Turnover Ratio (%) 30.60 49.10 37.68%
2 Inventory Turnover Ratio (%) 24.17 42.39 42.98%
3 Interest Coverage Ratio (times) 3.17 2.41 31.53%
4 Current Ratio (times) 1.31 1.76 25.57%
5 Debt Equity Ratio 0.22 0.11 100%
6 Operating Profit Margin (%) 8.6 6.6 30.30%
7 Net Profit Margin (%) (9.11) 0.93 (1079)%

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

1&2.Better Working capital Utilization

3. Increase is due to increase in WCDL and CC facility and increase in interestthereon.

4. Current ratio though it has deteriorated it is within the permissible standards.

5. Increase is due to change in operating method of the company. Earlier TWL used toget free supply of material for manufacturing of Wagons. Now we are asked to procure onour own which has led to increase in borrowing thus increasing the Debt Equity ratio.

6. Operating profit margin has increased due to increase in sales and better profitmargins on new contracts.

7. Would like to draw your attention towards profit before exceptional items wherein weare making an increase in profit of 367.75%. Exceptional items includes written off ofinvestment and other receivables amount of France subsidiary last year.

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

Key Financial Ratios 2018-19 2017-18 Difference (%)
Return on Net Worth (%) (10.86) (0.1) 48.2%

Notes on significantchanges in financial ratios where change is > 25%: The return onNet Worth before exceptional item is a positive 4.92%. The negative return mentioned hereis due to exceptional item i.e. write off of investment and receivables relating to Frenchsubsidiary.

3. Dividend

The Board of Directors at its meeting held on 30th May 2019 has recommended dividendof 15% i.e. Re. 0.30 per

equity share of Rs. 2/- each fully paid up for the Financial Year ended 31st March2019 subject to declaration by shareholders at the ensuing Annual General Meeting.

4. Employee Stock Options Scheme/Change in Share Capital

Pursuant to approval of the shareholders the Nomination and Remuneration Committee(also functioning as Compensation Committee) at its meetings held on March

4. 2015 and May 19 2017 in accordance with the TWL Employees Stock Options Scheme2014 (ESOS) granted to the eligible employees 500000 options each respectively to beconverted into equivalent number of equity shares of Rs. 2/- each fully paid as per theESOS.

Options resulting in 15950 equityshares 11000 equity shares and 600 equity sharesallotted on June 20 2018 September 12 2018 and December 28 2018 respectively to theeligible employees upon exercise by them in conformity with ESOS led to increase in thepaid up equity share capital to Rs. 231055840/- as at 31st March 2019 consisting of115527920 equity shares of Rs. 2/- each fully paid up. Further 35000 equity sharesand 43250 equity shares were allotted on 3rd April 2019 and 18th June 2019respectively which increased the paid up equity share capital to Rs. 231212340/-consisting of 115606170 equityshares 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 Exchange Board of India(Share Based Employee Benefits) Regulations 2014 have been placed on the corporatewebsite of the Company

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

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

6. Investor Education Protection Fund (IEPF)

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

Pursuant to the provisions of Section 124(6) of the Act read with the IEPF Rules allthe shares on which dividends remain unpaid or unclaimed for a period of seven consecutiveyears or more shall be transferred to the demat account of the IEPF Authority (‘IEPFAccount') as notified by the Ministry of Corporate Affairs. In accordance with the saidprovisions the Company had executed and submitted the necessary documents for transfer of3907 equity shares of Rs. 2/- each to the IEPF account on 21st September 2018 inrespect ofwhich dividend had not been claimed by the members for seven consecutive yearsor more as on the cut-off date i.e. 25th August 2018. The details of all sharestransferred to the IEPF Account are uploaded on the Company's website.

The Company has identified 178 shareholders holding 2397 equity shares in aggregatewho have not claimed their dividend consecutively since FY 2011-12 and therefore sharesheld by them are liable to be transferred to the IEPF Account (Due date of transfer:13/10/2019). The Company had sent individual notices on 13/07/2019 through Registered Postto the concerned 178 shareholders with information regarding transfer of their shares andfinal reminder for taking appropriate action for claiming the dividend unclaimed on theirshares. Newspaper advertisement was also published in this regard. The details of suchshareholders are uploaded on the Company's website.

7. Transfer to Reserves

There being no surplus no amount is proposed to be transferred for the year underreview to the general reserves.

8. Risk Management Risks and Concerns

A Risk Management Policy to identify and assess the key risk areas monitor mitigationmeasures and report compliance has been adopted. Based on a review major elements ofrisks have been identified and are being monitored for effective and timely mitigation.

Risk management is an integral part ofthe Company's risk management policy adopted bythe Board with periodic review by the Audit Committee and the Board. Prudence andconservative dealing with risks is at the core of risk management strategy being followedby the Company. The risks both internal and external to which the Company is exposed toinclude macro-economic regulatory strategic financial operational value chain humanresources etc. and each of them is taken into consideration for development andmaintaining of a robust mechanism for mitigation which is evolving with time andcircumstances within which the Company operates.

9. Subsidiary Companies and Joint Venture

A report containing the details required under Section 134 of the Companies Act 2013(‘the Act') read with Rule 8(1) ofthe Companies (Accounts) Rules 2014 in respect ofperformance and financial position for the financial year ended March 31 2019 ofsubsidiaries: Cimmco Limited Titagarh Capital Private Limited Titagarh Wagons AFRFrance Titagarh Singapore Pte. Ltd. Singapore and Titagarh Firema SpA and Joint VentureCompany: Matiere Titagarh Bridges Private Limited included in the Consolidated FinancialReport (CFS) in the Form AOC-1 is annexed to this Report and marked as Annexure DR-2. TheCFS is attached to this Annual Report.

A joint venture Company: Titagarh Mermec Private Limited has been set up in India on18th July 2018 with equal stake in its equity of Mermec SpA Italy (Mermec) and yourCompany for marketing manufacturing and selling diagnostic and signalling systems forrailway infrastructure and auxiliary products and equipment parts related thereto intheTerritoriesviz. India Nepal Bangladesh Myanmar Bhutan Sri Lanka and any othermarket with credit line from India.

10. Extract of Annual Return

The details forming part of the extract of the annual return in the Form MGT-9 areuploaded on the website of the Company The same is also annexed with this report.

11. Number of Board Meetings

The Board of Directors met Five (5) times during the financial year 2018-19 as per thedetails provided in the Corporate Governance Report forming part of Annual Report.

12. Loans Guarantee and Investments

Particulars of loans guarantees and investments made by the Company pursuant to theSection 186 of the Act are furnished under notes to financial statements. The Company hasbeen informed that the said loan guarantee and security are proposed to be utilised byeach recipient for its general business/corporate purposes.

13. Significant and Material orders

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

14. Composition of Audit Committee

The Audit Committee constituted by the Board has Shri D N Davar as Chairman and ShriManoj Mohanka Shri Ramsebak Bandyopadhyay and Shri Atul Joshi as the members. Furtherdetails are provided in the Corporate Governance Report.

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

15. Related Party Transactions

All Related Party Transactions (RPTs) are entered into by the Company pursuant tocompliance with the applicable laws and also in accordance with the policy adopted by theBoard. Audit Committee reviews and approves all the RPTs as stipulated by the SEBI (LODR)Regulations 2015 and based thereon final approval of the Board is obtained. Theparticulars of contracts or arrangements with related parties referred to in section188(1) of the Act and as mentioned in form AOC-2 of the Rules prescribed in the Companies(Accounts) Rules 2014 under the Act are annexed hereto and marked as Annexure DR-3.

16. Corporate Governance Report

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

17. Internal Control System

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

a. That its assets are safeguarded

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

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

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

18. Vigil Mechanism

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

19. Internal Complaints Committee

The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the further details of which are given in theCorporate Governance Report. No complaint was lodged with the Committee during thefinancial year 2018-19.

20. Directors and Key Managerial Personnel

Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC) andthe Board of the Company the members of the Company at the 21st Annual General Meeting(AGM) held on 29th September 2018 had passed special resolutions for the re-appointmentof Shri D.N. Davar Shri Manoj Mohanka and Shri Sunirmal Talukdar as Independent Directorsfor a further term of 5 (five) years w.e.f. April 1 2019.

Mr. Vincenzo Soprano Non-Executive Director who was appointed as Additional Directorby the Board at its meeting held on 28th October 2017 to hold office upto the date of the21st AGM of the Company vacated his office on 29th September 2018 i.e. the date of the21st AGM of the Company. Shri Sunirmal Talukdar Independent Director tendered hisresignation from the Directorship of the Company on 13th October 2018 owing to hispersonal reasons.

Pursuant to the recommendation of the NRC the Board at its meeting held on 29th May2019 appointed Shri Anil Kumar Agarwal as Additional Director of the Company designatedas Director (Finance) and Chief Financial Officer. The Board has recommended necessaryresolution at the ensuing 22nd AGM for the appointment of Shri Anil Kumar Agarwal asDirector (Finance) for a term of 5 years w.e.f. 29th May 2019.

Shri Umesh Chowdhary Vice Chairman & Managing Director retires by rotation at theensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible forre-appointment.

The information prescribed bySEBI (LODR) Regulations 2015 in respect of the abovenamed Directors is given in the Notice of Twenty Second Annual General Meeting.

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

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

In compliance with the Act and SEBI (LODR) Regulations 2015 the performanceevaluation of the Board Committees and Individual Directors was carried out during the FY2018-19 as per the details set out in Corporate Governance Report.

22. Declaration by Independent Directors

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

23. Remuneration Policy and remuneration

A policy approved by the Nomination and Remuneration Committee and adopted by the Boardis practiced by the Company on remuneration of Directors and Senior Management Employeesas per the details set out in the Corporate Governance Report.

24. Directors' Responsibility Statement

The Directors state that:

• Appropriate Accounting Standards as are applicable to the Annual Statement ofAccounts for the financial year ended March 31 2019 had been followed in preparation ofthe said accounts and there were no material departures therefrom requiring anyexplanation;

• The directors had selected and followed the accounting policies as described inthe Notes on Accounts and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give true and fair view of the state of affairs of theCompany at the end of financial year and of the loss of the Company for that period;

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

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

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

• The directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

25. Statutory Auditors

Price Waterhouse & Co Chartered Accountants LLP Chartered Accountants (FRN304026E/E-300009) were appointed as Statutory Auditors of the Company at the 20th AGMuntil the conclusion of 25th AGM subject to ratification of their appointment at the AGMevery year. In view of the amendment under the provisions of section 139 of the CompaniesAct 2013 the members passed a resolution in the 21st Annual General Meeting held on 29thSeptember 2018 to dispense away the requirement of ratification of appointment.

The Auditors' Report on the standalone financial statement for the year ended 31stMarch 2019 does not contain any qualification reservation or adverse remark.

26. Consolidated Financial Statements

In accordance with IND-AS 24 issued by the Institute of Chartered Accountants of Indiaconsolidated financial accounts prepared on the basis of financial statements receivedfrom subsidiary companies as approved by their respective Boards form part of this Report& Accounts.

The Auditors' in their Report dated 30th May 2019 on the Consolidated FinancialStatement of the Company for the year ended 31st March 2019 had expressed a qualifiedopinion in regard to the public shareholding in Cimmco Limited the Company's subsidiary(‘Cimmco') being less than 25%. In this regard the Company had submitted theStatement on impact of audit qualifications to the Stock Exchanges on 30th May 2019wherein inter- alia the following was explained:

• The public shareholding in Cimmco had fallen below 25% due to the allotment offurther shares by Cimmco to Titagarh Wagons Limited (‘the Company') the onlyshareholder of Titagarh Agrico Private Limited (‘TAPL') pursuant to the Scheme ofAmalgamation of TAPL with Cimmco sanctioned by an Order of the Hon'ble National CompanyLaw Tribunal (NCLT) effective from 14th November 2017.

• Although the allotment was made on 02/12/2017 the 7200000 equity shares soallotted could be credited to the Company's demat account only on May 25 2018 after therequisite listing approvals were received.

• The Company came out with two Offers for Sale (OFS) on 14/11/2018 and26/12/2018 but due to low demand could sell only 557968 shares representing 2.04% ofthe share capital of Cimmco.

• It was decided to issue the third OFS in early May 2019 however BSE has advisedthat the Company must wait for trading window to re-open before making the OFS.

• In view of the above it is clear that the achievement of Minimum PublicShareholding was pending due to factors beyond the control of the promoter/Cimmco.

The Directors are now pleased to inform that the third OFS made on 6th and 7th June2019 was oversubscribed in both Retail and Non Retail Categories and as a result theMinimum Public Shareholding of 25% in Cimmco has been achieved and the aforesaid qualifiedopinion stands addressed. The promoters' holding in Cimmco now stands at 74.99% whichincludes the Company's holding of 74.89%.

27. Cost Auditors

M R Vyas & Associates Cost Accountants have been reappointed as Cost Auditors toconduct cost audit of the accounts maintained by the Company in respect of the productsmanufactured by the Company for the Financial Year 2018-19 subject to ratification oftheir remuneration by the shareholders in accordance with the provisions of Section 148 ofthe Act and the Companies (Cost Records and Audit) Rules 2014. The Cost Audit Report forthe financial year ended 31st March 2019 would be filed as stipulated by the applicableprovisions of law. The Company is making and maintaining the accounts and cost records asspecified by the Central Government under the provisions of Section 148(1) of the Act.

28. Secretarial Auditor

Secretarial Audit has been conducted by Vanita Sawant & Associates PracticingCompany Secretaries appointed by the Board and their report is annexed hereto and markedas Annexure DR-4. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

29. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act2013 during the financial year ended March 31 2019.

30. Particulars of Remuneration of Directors/KMP/ Employees

Disclosure pertaining to Remuneration and other details as required underSection 197(12) ofthe Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 (the Rules) is annexed and marked as Annexure DR-5. Theinformation pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report isreadily available for inspection by the members at the Company's Registered Office between10.30 A.M. to 1 P.M. on all working days upto the date of ensuing AGM. Should any memberbe interested in obtaining a copy including through email ( may write tothe Company Secretary at the Company's Registered office.

Human Resources

A. Empowering the employees

The Company considers its organizational structure to be evolving consistently overtime while continuing with its efforts to follow good HR practices. Adequate efforts ofthe staff and management personnel are directed on imparting continuous training toimprove 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 2019 was 586.

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

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

32. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during thefinancial year ended March 31 2019 pursuant to the provisions of Section 135 of the Actand rules made thereunder is annexed to this Board's Report and marked as Annexure DR-7.

Apart from the above the Company makes inter alia donations to the charitableinstitutions directly and through philanthropic organisations engaged in providingmedical education and other reliefs to the economically weaker sections of the society.Industrial Training Institute (the “ITI”) set up on the Company's land atTitagarh plant situate in Barrackpore North 24 Parganas under Private Public Partnership(PPP) is yet another area. The ITI with access to the requisite infrastructure provided bythe Company imparts hands-on training to the local people. A large number of students invarious batches have passed and significant number of them are engaged in various jobs inthe industry. The ITI has been recognised by the State Government as one of the best inthe country and it caters to the requirement of skilled workmen by industrial units.

33. Listing

The Company's Equity Shares are listed at the BSE Limited (BSE) and The National StockExchange of India Limited (NSE). The listing fees for the financial year ending on March31 2020 have been duly paid.

34. Compliance with Secretarial Standards

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

35. Forward Looking Statement

The statements in this report describing the Company's policy strategy projectionsestimation and expectations may appear forward looking statements within the meaning ofapplicable securities laws or regulations. These statements are based on certainassumptions and expectations of future events and the actual results could materiallydiffer from those expressly mentioned in this Report or implied for various factorsincluding those mentioned in the paragraph “Risks and Concerns” herein above andsubsequent developments information or events.

36. Acknowledgement

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

For and on behalf of the Board
Kolkata J P Chowdhary
August 14 2019 Executive Chairman

Annexure DR - 1

Form AOC-I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)

Statement containing salient features of the financial statement ofsubsidiaries/associate companies/ joint ventures Part - A : Subsidiaries

Sl. No. 1 3 4 5 6
Name of the subsidiary Pvt. Ltd. Titagarh Capital Limited Cimmco Limited Titagarh Firema S.p.A. Italy Titagarh Wagons AFR France Titagarh Singapore Pte. Ltd.
Date since when subsidiary was acquired 13.10.2008 16.04.2014 30.06.2015 18.06.2010 22.08.2008
Reporting period for the subsidiary concerned if different from the holding company'sreporting period - -




Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of Foreign subsidiaries Rs./Lakhs Rs./Lakhs EURO Rs. 77.7024 EURO Rs. 77.7024 EURO Rs. 77.7024
Share capital 4000.00 2734.85 7672.28 7115.70 12741.98
Reserves & surplus (1465.63) 11144.70 (5786.22) 6211.11 (6037.68)
Total assets 3042.51 40280.96 25502.57 88700.95 23821.03
Total Liabilities 3042.51 40280.96 25502.57 88700.95 23821.03
Investments 1500.00 0.25 - - 19225.26
Turnover 65.56 25718.56 50264.69 15148.66 -
Profit before taxation (16.13) 103.98 (1969.46) (7183.05) (6108.14)
Provision for taxation - (2676.70) (173.96) (2.88) -
Profit after taxation (16.13) 2780.68 (1795.50) (7185.93) (6108.14)
Proposed Dividend - - -
% of shareholding 100.00 79.37 100.00 100.00 100.00


1. Names of subsidiaries which are yet to commence operations: Nil

2. Names of subsidiaries which have been liquidated or sold during the year: Nil

3. The above numbers have been taken from Standalone Financial Statements of therespective subsidiaries (The above does not include any inter Company eliminations).

Annexure to Director's Report

Part - “B”: Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures

Sl. No. 1 2
Name of Associates/ Joint ventures Matiere Titagarh Bridges Private Limited Titagarh Mermec Private Limited
1. Latest audited* Balance Sheet Date 31/03/2019 -
2. Date on which the Associate or Joint Venture was associated or acquired 02/01/2017 18/07/2018
3. Shares of Associates or Joint Ventures held by the company on the year end:
No. 754882 5000
Amount of investment in Associates or Joint Ventures Rs. 75.49 lakhs Rs. 50000
Extent of Holding (in percentage) 50% 50%
4. Description of how there is significant influence 50% of the paid up Equity capital is held by the Company 50% of the paid up Equity capital is held by the Company
5. Reason why the associate/ joint venture is not consolidated N.A. N.A.
6. Net worth attributable to Shareholding as per latest Audited Balance Sheet Rs. 33.70 Lakhs -
7. Profit/(Loss)fortheyear Rs. (7.27) Lakhs -
i. Considered in Consolidation Rs. (3.64) Lakhs -
ii. Not Considered in Consolidation Rs. (3.64) Lakhs -

* as certified by the Management.

Notes :

1. Names of associates or joint ventures which are yet to commence operations: TitagarhMermec Private Limited

2. Names of associates or joint ventures which have been liquidated or sold during theyear: Nil