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29.10
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Updated:09 Apr, 2021, 15:58 PM IST

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Updated:09 Apr, 2021, 16:00 PM IST

Disclosure in board of directors report explanatory

DIRECTORS’ REPORT

 

Distinguished Shareholders,

 

The Directors of your Company are privileged to present the 11h Annual Report on the performance of your Company, along with the Audited Statement of Accounts, Auditors’ Report and the Review of Accounts by the Comptroller & Auditor General of India for the financial year ended 31st March 2014.

 

Integral Reports

The “Management Discussion and Analysis Report”, “Corporate Governance Report”, “Corporate Social Responsibility (CSR) and Sustainability Report” form an integral part of this Directors’ Report and have been placed as Annexure “A” “B” and “C” respectively.

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, mission and objectives, outlook, operational performance, its resources and systems, strengths, opportunities, constraints, risks and concerns, strategies, prospects, etc.

The Corporate Governance Report highlights the Company’s philosophy on Corporate Governance and Key Value(s), composition of Board of Directors and its Committees, their details including a profile of Directors who joined the Board during 2013–14 and thereafter, attendance and remuneration of Directors etc, other relevant disclosures, CEO/CFO Certification and general information for share holders. It is supplemented by the following compliance certificates.

(i)      A Certificate signed by the Chairman and Managing Director affirming receipt of compliance with the Code of Conduct from all Board members and Senior Management personnel during the year 2013–14 (placed at Annexure “B1”) as per guidelines of Department of Public Enterprises on Corporate Governance ;

 

(ii)     A Certificate from the Chairman and Managing Director and Director Finance  with regard to authenticity of financial statements (placed at Annexure “B–2”); and

 

(iii)      A Certificate of compliance of Corporate Governance signed by a practicing Company Secretary (placed at Annexure “B–3”) as per guidelines of Department of Public Enterprises on Corporate Governance.

The Corporate Social Responsibility (CSR) reflects the Company’s CSR activities, Budget, expenditure and evaluation process etc. and Sustainability Report describes RVNL’s plans, policy and activities undertaken for Sustainability during the year.

 

 

1.                   PERFORMANCE HIGHLIGHTS

 

Your Directors take pride to inform you that 2013–14 has been a year in which your Company has exceeded all previous performance parameters. The significant milestones achieved include:

 

v  During 2013–14, 466.5 kms (262 km of Doubling and 203.5 Km of Railway Electrifications) of project length has been physically completed

v  Highest ever turnover of ` 2492.37 crore;

v  Increase in Profit before Tax to ` 195.17 crore;

v  Profit after Tax (PAT) of the Company is at ` 157.42 crore showing increase of 16% over the previous year;

v  The Directors of your Company have recommended a highest ever Dividend of ` 31.50 crore to the Ministry of Railways;

v  Your Company has once again surpassed its performance targets set for Excellent in the Memorandum of Understanding (MoU) entered into with Ministry of Railways (MoR), Government of India in consultation with Department of Public Enterprises. Based on overall performance, your Company has achieved ‘Excellent’ rating for the financial year 2012–13, as in the previous years.

 

 

2.                   FINANCIAL RESULTS

 

Important indicators of the financial performance of RVNL of 2013–14 as compared to 2012–13 are mentioned below (rounded to nearest Rupees/crore):

                                                                                                                                    ( in crore)

Particulars

2013–14

2012–13

Turnover

2492

2117

Total Income

2597

2205

Operating Income

182

168

Gross Margin (from operations)

102

90

Reserves & Surplus

453

333

Profit Before Tax

195

167

Profit After Tax

157

136

Net worth

2538

2418

Appropriations

 

 

Proposed Final Dividend

31.50

27

Transfer to General Reserves

10

10

Transfer to CSR and Sustainability funds

4.07

3.44

Transfer to R&D Fund

0.68

0.49

 

 

Turnover

 The Company has achieved a Turnover of ` 2,492.37 crore at the end of the financial year 2013–14 as compared to ` 2116.85 crore in 2012–13, i.e. an increase of 18%. 

The increase in Turnover is due to projects being executed for Ministry of Railways where there has been a substantial increase from ` 1905 crore in 2012–13 to ` 2319 crore in 2013–14.  However, there has been a decline in the level of expenditure on works undertaken for SPVs and other deposit works to ` 174 crore during 2013–14 in comparison to ` 212 crore in the previous year.  The decline is on account of issues related to land acquisition in Odisha based projects, environmental clearance in Andhra Pradesh and law and order problem in Chhatisgarh. The share of works executed by Zonal Railways in RVNL’s Turnover in 2013–14 is ` 92.96 crore compared to ` 6.17 crore during 2012–13, due to reporting of expenditure incurred in the previous years.

Profit

Profit Before Tax increased from ` 167.46 crore in 2012–13 to ` 195.17 crore in 2013–14. The major increase is on account of higher income from project execution from ` 89.56 crore in previous year to ` 101.75 crore in 2013–14 (excluding appropriation to funds as per DPE guidelines).  There has also been increase in Dividend income by ` 5 crore and the balance increase is from interest income from banks and SPVs.

 

Capital Structure

With an authorized share capital of the Company of ` 3000 crore, there has been no change in the Capital Structure of the Company, with the paid–up share capital of the Company remaining at ` 2085.02 crore.  Ministry of Railways, Government of India holds the entire share capital of the Company.

Dividend

As a result of improved financial performance of the Company, the Board of Directors have recommended a final Dividend of ` 31.50 crore for the year 2013–14 as compared to ` 27 crore in 2012–13 for consideration of the shareholders. The cumulative Dividend paid to Ministry of Railways by RVNL will amount to ` 114 crore, including the Dividend declared for 2013–14.

 

Reserves

 

An amount of ` 10 crore has been transferred to General Reserves by appropriation from profits of the Company.  After taking into account, the proposed Dividend of ` 31.50 crore and Dividend Distribution Tax of ` 5.56 crore, the balance under Reserves & Surplus at the end of 2013–14 stands at ` 452.94 crore in comparison to ` 332.59 crore in 2012–13.

 

Net Worth

The Net Worth of your Company has increased over the previous year on account of transfer of profits amounting to ` 120.35 crore to Reserves and Surplus.  Accordingly, the Net Worth of the Company has increased from ` 2417.61 crore at the end of previous year to ` 2537.96 crore at the end of the current year.

Fixed Deposits

No deposits from the public have been accepted by the Company during the year under review.

Buy–back of shares

The Government of India (Ministry of Railways) holds the entire paid–up share capital of the Company. The Company has not resorted to buy back of shares and accordingly there is nothing to report under section 217(2B) of the Companies Act 1956.

Project Advance/Loans

 RVNL received an amount of ` 2141.36 crore, as project advance, from Ministry of Railways (MoR) during the year for execution of various works. 

Loans from IRFC: During the year, an additional amount of ` 440 crore was received as borrowings from IRFC. With this, the total amount received from IRFC is ` 2623 crore.  The principal and interest on the borrowings from IRFC are repaid by Ministry of Railways (MoR) as a pass through entry in the books of RVNL.  During the year an amount of ` 262 crore was paid to IRFC on this account.

Appropriation to Funds:

The following appropriations to Funds have been made in terms of DPE’s guidelines:

          CSR and Sustainability fund – ` 4.07 crore (3% of PAT of 2012–13)

          R&D fund – ` 0.68 crore (0.5% of PAT of 2012–13)

 

 

 

 

 

3.                   PROJECT EXECUTION:

 

3.1               Physical Size Of the Projects :

 

Ministry of Railways has transferred 123 projects to RVNL for execution, which may be broadly classified under the following heads:

·         Doubling                                         56  

·         Gauge Conversion                           11        

·         New Lines                                       14   

·         Kolkata Metro Rail                                         4  

·         Railway Electrification                      16  

·         Workshops                                      12  

·         Others                                            10  

 

The distribution of project length under various plan heads is shown below:

Upto 2012, the RE works transferred to RVNL were only those where electrification was a part of some other work like doubling, gauge conversion, etc projects being executed by RVNL. However, in the last

2 years, pure RE projects have  also  been  transferred for execution  such  as Manheru – Hissar – RE,  Amla – Chhindwara – Kalumna – RE,  Jakhal – Hisar– RE,  Jakhal – Dhuri– Ludhiana –  RE,  Rajpura – Dhuri – Lehra Mohabat –  RE etc.

With the transfer of projects involving construction of workshops, Metro projects, construction of cable stayed bridge etc; RVNL has diversified the nature of projects being executed by it.

                                 Figures in Route Km

Total:  10881 Km

Total: 8662 Km

These projects are spread all over the country and for efficient implementation of projects, Project Implementation  Units (PIUs) have been established at 23 locations i.e. New Delhi, Mumbai, Kolkata (3 Units), Chennai, Secunderabad, Bhubaneshwar (2 Units), Bhopal (2 Units), Kota,  Jodhpur, Waltair, Bangalore, Pune, Raipur (2 Units), Lucknow, Rishikesh, Patna, Ahmdabad, Kanpur to execute projects in their geographical hinterland.

 

3.2               Status of physical progress of projects

 

The status of the 123 projects assigned to RVNL for execution is as under:–

Projects completed upto March 2014                   :           40

Projects under implementation                            :           79

Project yet to be sanctioned                               :           4

The list of 40 projects fully completed upto March, 2014 is as under:

S.No

Railway

Project Name

Type of Project

Length (Km)

1

Central Railway (CR)

Diva – Kalyan 5th & 6th Line

                Doubling

11

2

Central Railway (CR)

Pakni – Mohol Doubling

               Doubling

17

3

Central Railway (CR)

Panvel – Jasai Jnpt Doubling

               Doubling

28.5

4

Central Railway (CR)

Pakni – Solapur Doubling

               Doubling

16.28

5

East Coast Railway (ECoR)

Jakhpura– Haridaspur 3rd Line

               Doubling

23.3

6

East Coast Railway (ECoR)

Talchar–Cuttack–Paradeep Doubling with 2nd Bridge on Rivers Birupa & Mahanadi

               Doubling

3

7

East Central Railway (ECR)

Barauni – Tilrath Bypass Doubling

               Doubling

8.3

8

Eastern Railway (ER)

Gurup – Saktigarh Extn of 3rd Line

               Doubling

26

9

North Central Railway (NCR)

Palwal – Bhuteswar 3rd Line

               Doubling

81

10

North Central Railway (NCR)

Aligarh – Ghaziabad 3rd Line

               Doubling

106.1

11

South Central Railway(SCR)

Pullampet – Balapalle Ph I of Gooty – Renigunta Doubling

               Doubling

41

12

South Central Railway(SCR)

Krishnapatnam – Venkatachalam Doubling With RE

               Doubling

16.5

13

South Central Railway(SCR)

Gooty – Renigunta Patch Doubling

               Doubling

151

14

South East Central Railway (SECR)

Bilaspur – Urkura 3rd Line Doubling

               Doubling

105

15

South Eastern Railway (SER)

Panskura – Kharagpur 3rd Line

               Doubling

45

16

South Eastern Railway (SER)

Panskura – Haldia Ph 1 Doubling

               Doubling

14

17

South Eastern Railway (SER)

Rajgoda – Tamluk (Jn. Cabin) Doubling

               Doubling

13.5

18

South Eastern Railway (SER)

Tamluk Jn. Cabin – Basulya Sutahata Doubling

               Doubling

24.23

19

South Eastern Railway (SER)

Tikiapara – Santragachi Doubling

               Doubling

5.6

20

Southern Railway (SR)

Attipattu – Korukkupet 3rd Line Doubling

               Doubling

18

21

Southern Railway (SR)

Pattabiram – Triuvallur 4th Line & Tiruvallur – Arakkonam 3rd Line

               Doubling

41.89

22

South Western Railway (SWR)

Hospet – Guntakal Doubling

               Doubling

115

23

North Western Railway (NWR)

Delhi – Rewari Gauge Conversion

                GC

94.2

24

North Western Railway (NWR)

Ajmer – Phulera – Ringus – Rewari Gauge Conversion

GC

295

25

North Western Railway (NWR)

Bhildi – Samdari Gauge Conversion

GC

223

26

Southern Railway (SR)

Thanjavur – Villupuram Gauge Conversion

GC

192

27

Southern Railway (SR)

Cuddalore – Salem Gauge Conversion

GC

193

28

South Western Railway (SWR)

Arasikere–Hassan–Mangalore Gauge Conversion

GC

230

29

Western Railway (WR)

Bharuch – Samni – Dahej Gauge Conversion

GC

62

30

Western Railway (WR)

Gandhidham – Palanpur Gauge Conversion

GC

301

31

East Coast Railway (ECoR)

Daitari – Banspani New Line

NL

155

32

Southern Railway (SR)

Vallaparpadm – Idapally New Line

NL

9

33

East Coast Railway (ECoR)

Tomka –Banaspani – RE

RE

144

34

Railway Electrification (RE)

Kharagpur (Nimpura) – Bhubaneswar Including Branch Line of Talcher – Cuttack – Paradeep )

RE

581

35

Railway Electrification (RE)

Bhubaneswar – Kottavalasa

RE

417

36

South Central  Railway (SCR)

Renigunta – Guntakal RE

RE

308

37

Western Railway (WR)

Bharuch – Samni – Dahej RE

RE

64

38

Central Railway (CR)

Daund–Manmad Incl. Puntamba– Shirdi – RE

RE

255

39

Eastern Railway (ER)

Civil Engineering Works In Connection With Diesel Loco Component Factory, Dankuni

WKSP

 

40

South Eastern Railway (SER)

Setting Up of Diesel Multiple Unit(DMU) Manufacturing Factory at SankRail / Haldia

WKSP

 

Cumulatively, RVNL has till now completed a total of 1385 Kms of doubling, 1590 Kms of gauge conversion 194 Kms of new lines and 1934 Kms. of Railway Electrification. Thus, as on 31.03.14,  5103 km out of a total length 11259 km of 119 sanctioned projects assigned to RVNL, have been completed.

3.3               Projects completed during 2013–14

 

During 2013–14, 465.5 kms (262 km of Doubling and 203.5 Km of Railway Electrification) of project

length has been physically completed including sections of important projects such as Bhopal – Bina 3rd Line, Salka Road – Annuppur (with flyover) Doubling, Goelkera – Manoharpur 3rd Line, Jaroli (Banaspani) – Jakhpura – Doubling, Villupuram – Dindigul Doubling, Tamluk Jn. Cabin – Basulya Sutahata Doubling, Bhagat Ki Kothi – Luni Doubling, Rani–Keshavganj Doubling, Yelahanka – Dharmavaram – Gooty Re, Daund – Manmad Incl. Puntamba – Shirdi – RE  etc.

3.4               In addition, Railway Electrification of 218.7 Km was also carried out in other than specific Railway Electrification as part of Doubling Works. RVNL’s  efforts towards capacity building  in execution of signaling and telecommunication works have paid dividends and during the year important doubling, 3rd line projects have been commissioned involving large scale Solid State Interlocking and NIs of major yards on busy routes.

 

3.5               Bhopal – Bina 3rd Line project: During the year of 57.3 Kms of project length was completed. Mandi Bamora–Kurwai Kethora (7.9 Km), Salamatpur–Diwanganj (9.0 km), Sanchi–Salamatpur (7.4 Km), Sumer–Sorai (8.3 Km) was completed in June, 2013; Kalhar–Bareth (9.6 Km) was completed in July, 2013; Sorai–Vidisha (5.6 Km) was completed in October, 2013 and Bina–Kurwai Kethora (9.5 Km) was completed in March, 2014.

 

3.6               Salka Road – Annuppur (with Flyover) doubling project: This lies on the busy coal carrying route of Indian Railways. During the year of 15.8 Kms of project length was completed. Hari–Ventatnagar (10.8 km), Chulha–Anuppur (5.0 km) sections were completed in June, 2013.

 

3.7               Villupuram – Dindigul Doubling: During the year of 55.0 Kms of project length was completed. Vridhachalam Jn to Ulundurpet (19.0 km)  completed in September, 2013, Dindigul–Tamaraipadi (8.0 km) and Manaparai–Samudram (10.0 km) completed in December, 2013; Samudram–Kolatur (7.0 km) and Ulundurpet –Parikkal (11.0 Km) completed in January, 2014 and March, 2014 respectively. 

 

3.8               Tamluk Jn. Cabin – Basulya Sutahata Doubling: During the year 18.5 Kms of project length was completed. Mahisadal–Barda (8.5 Km) completed in June, 2013 and Tamluk–Mahisadal (10.0 Km) section completed in March, 2014 thus completing the entire project.

 

3.9               Bhagat Ki Kothi – Luni Doubling: During the year of 28.4 Kms of project length was completed. Luni – Hanwant (7.0 km) and   Hanwant – Salawas (8.4 km) completed in August, 2013 and Salawas – Bhagat Ki Kothi (13.0 km) was completed in October, 2013. 

 

3.10            Goelkera – Manoharpur 3rd Line: Manoharpur–Posoita (11.6 km) was completed in June, 2013. 

 

3.11            Jaroli (Banaspani) – Jakhpura – Doubling: During the year 38.4 Kms of project length was completed. Sukinda Road – Baghuapal (8.5 Km) and Baghuapal – Tomka (8.5 Km) sections were completed in December, 2013; Chilkidra–Harichandanpur (10.4 Km), Goaldhi – Keonjhar (11.0 Km) sections were completed in January, 2014 and March, 2014 respectively. 

 

3.12            Krishnapatnam – Venkatachalam Doubling With RE: The entire section (16.5 km) was completed in June, 2013.

 

3.13            Rani–Keshavganj doubling: During the year of 15.0 Kms project length was completed. Nana–Keshavganj (8.7 Km) and Kothar–Nana (6.3 Km) sections were completed in January, 2014 and February, 2014 respectively. 

 

3.14            Daund–Manmad RE:  During the year of 69.4 Kms project length was completed. Sarola–Belvandi (30.0 Km) and Belvandi–Daund (39.4 Km) sections were completed in September, 2013, thus completing the entire project.

 

3.15            Gooty–Dharmavaram–Yelahanka RE: During the year of 134.1 Kms of project length was completed. Gooty–Pamidi (22.0 Km), Garladinne–Anantpur (11 Km) Yelahanka–Rajankunti (7.1 Km), Dodaballapur–Someshwara (34 Km), Anantpur–Prasannayapalli–Zangalpalli–Chigicheria (26.5 Km), Chigicheria–Dharmavaram (13 Km), Viduraswatha–Someshwara (10 Km), Viduraswatha–Devarapalle (6.5 Km), Dharmavaram–Nayasundaram (4 Km) Sections were completed from April to September 2013.

 

3.16            Signaling and Telecommunication

 

3.17            The Company has achieved commendable success in commissioning signaling works associated with doubling, third line, auto signaling, yard remodeling and gauge conversion. During the year 2013–14, RVNL commissioned 20 stations including 7 stations on 3rd line projects, 60 auto signals & 4 IBS. Your Company has also been able to successfully commission telecom works involving laying of optic fibre cables and 6 Quad cables of a total of 210 kms.

 

3.18            Kolkata Metro Projects

 

3.19            Four major projects for the extension of Kolkata Metro were transferred to RVNL in March 2010 viz.

·                     Baranagar – Barrackpore & Dakshineswar (14.5 Km);

·                     Dum Dum Airport – New Garia Via Rajerhat (32 Km);

·                     Joka – Binoy Badal Dinesh Bagh Via Majerhat (16.72 Km); 

·                     Naupara (Ex.) – Baranagar (2.6 Km).

 

RVNL has worked at a fast pace for execution of these projects, despite the fact that no detailed project report (DPR) was prepared at the time of sanctioning of project by the Government. The contract for Naupara – Baranager (2.6 Km) & Baranagar – Dakshineswar (2 Km) including 2 station buildings was awarded in September 2010 which had to be terminated in November 2010 as contractor did not start work. The tender was reinvited and fresh contract was awarded in February 2011. After detailed designing of corridor, 326 piles, 40 pile caps, 25 piers, 19 pier caps and 88 I girders have been cast. Construction of station at Dakshineswar has started. A 213 m diversion of express way to facilitate construction of via duct has also been completed. There are about 500 encroachments which have to be relocated/removed. The second contract has also been terminated due to poor performance of the contractor. Fresh tender is under finalization.

 

In Baranagar– Barrackpore, tender for road widening has been awarded and 96% of the utility identification work has been completed and 98% geotechnical investigation work has been completed. The tenders for the viaduct and stations will be invited only after the water pipe lines are closed by State Government.

 

The foundation stone for Joka – Binoy Badal Dinesh Bagh project, was laid by Her Excellency, President of India on 22.09.2010. The contract for execution of works was awarded in December 2010. 1185 piles, 276 pile caps, 273 piers, 261 pier caps and 232 segment erection has been completed on the Joka – Mominpur section of the project. Work for construction of stations at Joka, Thakurpukur, Sakherbazar, Behala Bazar and Tartala has been awarded in April 2012. 811 piles, 111 pile caps, 92 piers have also been completed for stations. 

 

The contract for viaduct portion between New Garia to Rabindra Tirtha section of Dum Dum Airport – New Garia project in 4 packages have also been awarded on 21.10.2011.  3721 working piles, 392 pile caps, 318 piers, 263 pier caps and 1804 segments have been cast and 503 segments have been launched. The contracts for 21 stations (3 Packages) have also been awarded on 05.03.2014. The Survey, Geotechnical work and Utility diversion is in progress.

 

3.20            Projects under implementation:–

 

The list of 79 projects under various stages of implementation is as under:

S. No.

Railway

Name of Project

Type of Project

1.        

CR

Daund – Gulbarga Doubling

Doubling

2.        

CR & SCR

Pune – Guntakal Rly Elect.

RE

3.        

ECoR

Khurda Road – Barang 3rd Line

Doubling

4.        

ECoR

Cuttack – Barang Doubling

Doubling

5.        

ECoR

Rajatgarh – Barang Doubling

Doubling

6.        

ECoR

Haridaspur – Paradeep New Line

New Line

7.        

ECoR

Angul – Sukinda New Line

New Line

8.        

ECoR

Sambalpur – Titlagarh  –  Doubling

Doubling

9.        

ECoR

Raipur – Titlagarh  –  Doubling

Doubling

10.    

ECoR

Banaspani – Jakhpura – Doubling

Doubling

11.    

ECoR

Titlagarh ( Excl)  –  Raipur –RE

RE

12.    

ECR

Neora – Daniwan & Barbigha – Shekhpur NL as MM of Restoration of Dismantled Line of Fathua – Islampur

New Line

13.    

ER

Dankuni – Furfura New Line

New Line

14.    

ER

Nabadwipghat – Nabadwipdham – New Line

New Line

15.    

NR

New Delhi – Tilak Bridge 5th & 6th Line

New Line

16.    

NR

Utretia– Rae Bareli Doubling

Doubling

17.    

NR

Rishikesh – Karnaprayag New Line

New Line

18.    

NR

Rae Bareilly To Amethi Doubling

Doubling

19.    

NR

Bhanupalli – Bilaspur – Beri New Line

New Line

20.    

NR

Jakhal – Hisar– Railway Electrification

RE

21.    

NR

Jakhal – Dhuri– Ludhiana –  Railway Electrification

RE

22.    

NR

Rajpura – Dhuri – Lehra Mohabat –  Railway Electrification

RE

23.    

NCR

Bhimsen – Jhansi Doubling With Electrification

Doubling

24.    

NER

Lucknow– Pilibhit Via Sitapur, Lakhimpur GC

Gauge Conversion

25.    

NWR

Abu Road – Sarotra Road Patch Doubling

Doubling

26.    

NWR

Sarotra Road – Karjoda Patch Doubling

Doubling

27.    

NWR

Bhagat Ki Kothi – Luni Doubling

Doubling

28.    

NWR

Abu Roard – Swaroopganj Doubling        

Doubling

29.    

NWR

Rani – Keshav Ganj Doubling

Doubling

30.    

NWR

Karjoda – Palanpur Doubling

Doubling

31.    

NWR

Rewari–Manheru Doubling With RE

Doubling

32.    

NWR

Manheru – Hissar – Railway Electrification

RE

33.    

NWR

IOC Siding At Salawas ( Deposit Work)

Others

34.    

NWR

Rani – Palanpur –  Railway Electrification

RE

35.    

SCR

Balance Section of  Obulavaripalle – Krishnapattnam New Line

New Line

36.    

SCR

Balance Section of  Raichur – Guntakal Doubling

New Line

37.    

SCR

Guntur – Tenali Doubling With Electrification

Doubling

38.    

SCR

Vijaywada – Gudivada – Bhimavaram – Narasapur, Gudiva Da – Machilipatnam &  Bhimavaram – Nidadavolu Doubling with RE

Doubling

39.    

SCR

Yelahanka – Dharmavaram – Gooty RE

RE

40.    

SCR

Hospet – Guntakal And Tomagallu – Ranjitpura

RE

41.    

SCR

Multi–Modal Transport System (MMTS) – Phase–II in Hyderabad

MTP

42.    

SER

Goelkera – Manoharpur 3rd Line Doubling

Doubling

43.    

SECR

Amla – Chhindwara – Kalumna – Railway Electrification

RE

44.    

SECR

Salka Road – Annuppur (with Flyover) Doubling

Doubling

45.    

SECR

Dalli – Rajhara – Raoghat New Line

New Line

46.    

SR

Tiruvallur – Arakkonam 4th Line

Doubling

47.    

SR

Villupuram – Dindigul Doubling

Doubling

48.    

SR

Thanjavur – Ponmalai Doubling With Bypass Line Before Pomalai

Doubling

49.    

SWR

Hospet – Tinaighat  –  Doubling

Doubling

50.    

WCR

Bhopal – Bina 3rd Line

Doubling

51.    

WCR

Bina – Kota Doubling     

Doubling

52.    

WCR

Habibganj – Barkhera 3rd Line

Doubling

53.    

WCR

Barkhera– Budni 3rd Line

Doubling

54.    

WCR

Budni – Itarsi 3rd Line

Doubling

55.    

WR

Ahmedabad – Botad Gauge Conversion

Gauge Conversion

56.    

WR

Dhasa – Jetalsar Gauge Conversion

Gauge Conversion

57.    

WR

Palanpur – Samakhiali Doubling

Doubling

58.    

MET

Baranagar – Barrackpore & Dakshineswar

METRO

59.    

MET

Dum Dum Airport – New Garia Via Raerhat         

METRO

60.    

MET

Joka – Binoy Badal Dinesh Bagh Via Majerhat     

METRO

61.    

MET

Naupara(Ex.) – Baranagar (Extension of DumDum – Naupara Metro Line)

METRO

62.    

WKSP

Dankuni – Setting Up Of Electric Loco Assembly And Ancillary Unit Of Clw

WKSP

63.    

WKSP

Barauni – 250 High Horse Power Loco Shed

WKSP

64.    

WKSP

Barauni – New Loco Shed to Home 100 Electric Locos

WKSP

65.    

WKSP

Kharagpur Workshop – Setting up of centre of Excellence for Wagon Prototyping

WKSP

66.    

WKSP

Anara (Adra) Setting up of Mid–Life Rehabilitation Workshop for Coaches

WKSP

67.    

WKSP

Vadodara – Setting up of New PoH Shop for Electrical Locos

WKSP

68.    

WKSP

Varanasi – Augmentation of Production Capacity from 200 To 250 High HP Locos Per Year

WKSP

69.    

WKSP

Lucknow–Modernisation of Alambagh Workshop (Pase–I)

WKSP

70.    

WKSP

Workshop for Manufacture Flat Bogies for Lhb Design Coaches, Yadgir

WKSP

71.    

WKSP

Kota– Modernisation of Wagon Repair Workshop

WKSP

72.    

CR

Augmentation of Administrative / Office Infrastructure, Solapur Division, Gulbarga

OSW

73.    

ER

ROB at Bardhman(YARD) – 4 LANES

ROB

74.    

SR

Srirangam – Tiruchacirapalli Town – 4 Lane ROB in lieu of 2 – Lane Bridge No. 380–A

ROB

75.    

ER

Dum Dum Jn. – Flyover to Improve Passage of Goods and Mail/Express Trains

Flyover

76.    

SCR

Secunderabad– Upgradation Of Facilites At Centralised Training Acedemy For Railway Accounts

OSW

77.    

SCR

Moula Ali – Setting up of Indian Railway Institute of Finance Management

OSW

78.    

SECR

Direct Power Supply from Central Generating Agencies

OSW

79.          

WCR

Provision of Addl. Traction Substation at Budhni

OSW

 

 

 

3.21            Projects under Sanction and DevelopmentConnectivity to Rewas Port Surat – Hajira New Line              Dighi Port New Line                                                      

4.       Rail Connectivity To Vizhinjam International  Seaport Limited (VISL)

 

3.22            Projects handed over to Railways

 

The following sections of projects consisting of 130.05 Km of Doubling and 185 Km of Railway Electrification have been handed over to Zonal Railways for operations during 2013–14:

1.       Hodal – Chhata (21 Km) section of Palwal–Bhuteshwar 3rd line

NCR

2.       Baikunth– Silyari ( 8 Km)section of  Bilaspur–Urkura 3rd line

SECR

3.       Adoni – Esivi–Kupgal  (16 Km) section of Raichur Guntakal Doubling

SCR

4.       Bareth–Ganjbasoda–Pabai (18.6 Km) section of Bhopal–Bina 3rd line

WCR

5.       Panskura –  Shyamchak (25 Km)Section of Panskura – Kharagpur 3rd Line

SER

6.       Krishnapatnam–Venkatachalam doubling (16.45 Km)

SCR

7.       Kallakkudi Palanganatham–Valadi (25 Km) section of Villupuram – Dindigul Doubling

SR

8.       Muddanur – Guntakal  (121Km) section of Renigunta–Guntakal RE

SCR

9.  Baruch–Samni–Dahej RE (64 Km)

WR

 

 

3.23            Accidents

During the year no accident was reported from any of the project sites on RVNL account.

 

 

3.24            ADB funded projects:

 

The first ADB loan (IND–1981) sanctioned for “Railway Sector Improvement” has been closed on 31.12.2011. A 2nd ADB Loan has also been sanctioned for funding of 5 projects, namely:

·         Raipur–Titlagarh doubling

·         Sambhalpur–Titlagarh doubling

·         Hospet–Tinaighat doubling

·         Daund–Gulbarga doubling

·         Pune–Guntakal Railway Electrification

 

The funding by ADB requires compliance of various loan covenants on resettlement and rehabilitation of project affected persons, procurement of works and stores following international competitive bidding and implementation of plans for mitigation of social and environmental impact norms. A Multi Tranche Financing Facility of $ 500 million has been agreed to by ADB. The loan agreement for first Tranche (Loan No. 2793–IND) of this MFF for an amount of $ 150 million has been signed in July 2012. Contracts for 12 packages had been awarded during 2012–13. The tenders for the balance packages are under various stages of process. The contract for General Consultants for these 5 projects had also been awarded in May 2013. The loan agreement for second Tranche (Loan No. 3108–IND) of this MFF for an amount of $ 130 million has been signed in February 2014. The contracts for supply of 60 Kg Rails & 52 Kg Rails have been awarded in March, 2014. Contract for appointment of NGOs to implement the rehabilitation and resettlement policies of the ADB have been finalised and the work of R&R is in an advanced stage.

During the year 2013–14, an amount of Rs 112.41 crore equivalent to $ 18.477 million has been disbursed by ADB.

3.25            Contracting 

 

As the size of projects being executed by RVNL is quite large, to ensure fast award and execution of projects, RVNL invites tenders consisting of multiple packages.  Each tender may consist of two to four contract packages.  This approach has a number of advantages such as:

 

a)                   Multiple contracts can be awarded through one tender which saves time and effort in invitation and finalization of tenders.

b)                   Both small and large agencies can compete for any contract package which increases competition.

c)                   Large agencies who are capable of executing big contracts can quote for multiple packages to achieve economies of scale and pass on the benefit to RVNL by quoting discounts in case of award of more than one package.

d)                   Smaller agencies, which would not be eligible to quote if the tender for the project was floated in a single package, are now able to compete in any of the contract packages individually as they may meet the qualification requirements of individual packages which are of comparatively smaller value.

 

During 2013–14, contracts worth approximately Rs. 5280 cr. were awarded as compared to contracts worth approximately Rs. 4826 cr. awarded during the previous year (2012–13).

The following major contracts were awarded by the Company during the year:

·           Construction of roadbed, station buildings, passenger amenities, minor bridges, General electrical work in connection with the new BG Rail line from Haridaspur to Paradeep (81.200 Km) in Khurda Division of East Coast Railway in State of Orissa, India (in two packages)." – Contract pacakge 1 from Haridaspur KM 0.00 (Incl.) to Kendrapada (Excl.) 42.040 (` 179.6cr.)

·           Construction of roadbed, station buildings, passenger amenities, minor bridges, General electrical work in connection with the new BG Rail line from Haridaspur to Paradeep (81.200 Km) in Khurda Division of East Coast Railway in State of Orissa, India (in two packages)." – Contract pacakge 2 from Kendrapada (Excl.) 42.040 to Paradeep 81.20 (` 206.56cr.)

·           Package 1:  Design, Supply, Erection, Testing & commissioning of 25 KV, 50 HZ, Single Phase, Traction Over–Head Equipment, Switching Stations, Traction sub–station, SCADA, General electrical Services works along with Signaling & Telecommunication work, civil engineering work i.e. Service Buildings, Quarters, TW sidings, TSS cross track and other associated works between Section Raipur (Excl.) Khariar Road (Excl.) 105 RKM/251 TKM of Raipur and  Sambalpur division on East Central &  East Coast Railway respectively, Chhattisgarh & Odisha, India   (` 95.93cr.)

·         Package 2: Design, Supply, Erection, Testing & commissioning of 25 KV, 50 HZ, Single Phase, Traction Over–Head Equipment, Switching Stations, Traction sub–station, SCADA, General electrical Services works along with Singlaling & Telecommunication work, civil engineering work i.e. Service Buildings, Quarters, TW sidings, TSS cross track and other associated works between Section Khariar Road (Incl.) – Titlagarh (Excl.) 98 RKM/229 TKM of Sambalpur division on East Coast Railway, Odisha, India (` 104.85cr.)

·         Construction of Major Bridges in connection with the construction of new BG line from Haridsapur (0.00 km) to Paradeep (81.200 Km) in the Khurda Division of East Coast Railway in Odisha, Inda (` 164.66cr.)

·         Package – 1: Construction of roadbed, major and minor bridges, RUBs, supply of ballast, Track Linking (Excluding supply of Rails and PSC line sleepers), General Electrical, Traction and Signal & Tlecom works (outdoor) in connection with Quadrupling along with Railway Electrification of Ghatkesar – Moulali – "C"cabin and patch doubling between Moulali – Sitafalmandi stations (Including Moulali, Ghatkesar/Cherapalli, Moulali Gate cabin, Malkajgiri & Sitafalmandi yards) on Secunderabad & Hyderabad Divisions of South Central Railway" Notification of Award (` 109.17cr.)

·         Package – 2: Construction of roadbed, major and minor bridges, RUBs, supply of ballast, Track Linking (Excluding suopply of Rails and PSC line sleepers), General Electrical, Traction and Signal & Telecom works (outdoor) in connection with doubling with Railway Electrification of Sanathnanagar – Moulali – "C"cabin section  and Restoration of single line between Telapur & Ramachandrapuram stations (Excluding Moulali but including Sanathnagar, Telapur & Ramachandrapuram yards)  on Secunderabad Division of  South Central Railway" Notification of Award (` 150.51cr.)

·         Package – 3: Construction of roadbed, major and minor bridges, RUBs, supply of ballast, Track Linking (Excluding suopply of Rails and PSC line sleepers), General Electrical, Traction and Signal & Telecom works (outdoor) in connection with doubling with Railway Electrification of Secunderabad – Bolarum – Medchal Stations and between Falaknuma – Umdanagar stations (including  Medchal, Bolarum, Falaknuma & Umdanagar on  Secunderabad  & Hyderabad Divisions of  South Central Railway"Notification of Award (` 129.43cr.)

·         Package 1: Construction of Roadbed, Major & Minor Bridges, Track Linking (Ëxcluding supply of Raills and Main line PSC sleepers), S&T, OHE, TSS & General Electric works in connection with doubling between Bina & Kota (282.576 Kms) excluding Ruthiyal – Guna Section of Kota & Bhopal Divisons of West Central Railway in the State of Rajasthan & Madhya Pradesh, India *Kota including Km (0.00) to PIPLOD ROAD (inlcuding Km 89.00) total 89.00 KM (` 245.95cr.)

·         Package 2: Construction of Roadbed, Major & Minor Bridges, Track Linking (excluding supply of Raills and Main line PSC sleepers), S&T, OHE, TSS & General Electric works in connection with doubling between Bina & Kota (282.576 Kms) excluding Ruthiyal – Guna Section of Kota & Bhopal Divisons of West Central Railway in the State of Rajasthan & Madhya Pradesh, India *PIPLOD ROAD (excluding Km 89.00) to RUTHIYAI (including Km 164.26) and GUNA (including Km 1093.52) to SHAHDORAGAON (Excluding Km 1070.50), Total 98.28 KM (` 260.16cr.)

·         Package 3: Construction of Roadbed, Major & Minor Bridges, Track Linking (excluding supply of Raills and Main line PSC sleepers), S&T, OHE, TSS & General Electric works in connection with doubling between Bina & Kota (282.576 Kms) excluding Ruthiyal – Guna Section of Kota & Bhopal Divisons of West Central Railway in the State of Rajasthan & Madhya Pradesh, India *SHAHDORAGAON (Includingh Km 1070.50) to BINA (Including Km 975.15), Total 95.50 KM (` 252.34 cr.)

·         Earthwork in formation (excluding blanketing), Minor Bridges between Km 19.000 to Km 47.000 and 3 nos. of steel Girder Bridges, 8 nos. of Road over Bridges between Km 19.00 to Km 67.00 in connection with Angul–Sukinda New Railway BG line in the State of Odisha, India (` 144.3cr.)

·         Construction of important and Major Steel Girder Bridges along with Foundation, Substructure and related protection works in connection with Jhansi–Bhimsen doubling in Jhansi Division of North Central Railway in the State of Uttar Pradesh (` 114.13cr.)

·         Manufacture and supply of 106600 MT of UIC 60 Kg/m Rails (Grade 880, Class A) conforming to Indian Railway Specifications IRS – T – 12 – 2––0 (read along with latest amendments) for various Railroad projects in different regions of India (` 639.11cr.)

·         Package 1 – Construction of Roadbed, Major & Minor Bridges, Track Linking (excluding supply of Rails and Main Line PSC sleepers), Outdoor S&T Works, OHE, TSS & General Electricaql works from Jhansi (including Km 1129.00) to Erich Road (including KM 1195.00) and indoor S&T works from Jhansi to Bhimsen in connection wtih Doubling between Jhansi and Bhimsen Stations on Jhansi Division of North Central Railway in the State of Uttar Pradesh, India (` 267.42cr.)

·         Package 2 – Construction of Roadbed, Major & Minior Bridges, Track Linking (excluding supply of Rails and Main Line PSC sleepers), Outdoor S&T Works, OHE, TSS & General Electricaql works from Erich Road (excluding KM 1195.00) to Usargaon (including KM 1265.00)  in connection with Doubling between Jhansi and Bhimsen Stations on Jhansi Division of North Central Railway in the State of Uttar Pradesh, India (` 227.88cr.)

·         Package 3 – Construction of Roadbed, Major & Minior Bridges, Track Linking (excluding supply of Rails and Main Line PSC sleepers), Outdoor S&T Works, OHE, TSS & General Electricaql works from Usargaon (excluding KM 1265.00) to Bhimsen (including Km 1334.00) in connection wtih Doubling between Jhansi and Bhimsen Stations on Jhansi Division of North Central Railway in the State of Uttar Pradesh, India (` 264.46cr.)

·         Manufacture and supply of 10740 MT of  IRS 52 Kg/m Rails (Grade 880, Class A) conforming to Indian Railway Specifications IRS – T – 12 – 2009  (read along with latest amendments) for various Railroad projects in different regions of India (` 64.39cr.)

·         Construction of Roadbed, Major and Minor bridges and track linking (excluding supply of Rails and sleepers), S&T and General Electrical work in Sarotra Road–Palanpur (29.52 Km) in Ajmer Division of North Western Railway and Ahmedabad Division of Western Railway in Gujarat State, India (` 112.8cr.)

·         Package 1 – Construction of roadbed, Major & Minor bridges, Track Linking (excluding supply of Rails, ordinary track sleepers and thick web switches), Outdoor signaling and Electrical (General works in connection with Doubling of Sambalpur–(In.) – Barpali (in) (64.276 kms) part of Sambalpur–Titlagarh Doubling of East Coast Railway in the State of Odissa, India (` 209.27cr.)

·         Package 2 –  Construction of roadbed, Major & Minor bridges, Track Linking (excluding supply of Rails, ordinary track sleepers and thick web switches), Outdoor signaling and Electrical (General works in connection with Doubling of  Barpali (Ex.) – Bolangir (In.) (56.758 kms) part of Sambalpur–Titlagarh Doubling of East Coast Railway in the State of Odissa, India (` 157.05cr.)

·         Package 3 –  Construction of roadbed, Major & Minor bridges, Track Linking (excluding supply of Rails, ordinary track sleepers and thick web switches), Outdoor signaling and Electrical (General works in connection with Doubling of   Bolangir (Ex.) – Titlagarh (Inc) (63.193 kms) part of Sambalpur–Titlagarh Doubling of East Coast Railway in the State of Odissa, India (` 184.74cr.)

·         Package–ANS1: Construction of Seven (07) stations including related works from Kavi Subhas (New Garia) to Ritwik Ghatak in New Garia – airport Metro Corridor of Kolkata Metro Railway Line (` 351.15cr.)

·         Package–ANS2: Construction of Seven (07) stations including related works from Barun Sengupta to Bidhan Nagar in New Garia – airport Metro Corridor of Kolkata Metro Railway Line (` 338.97cr.)

·         Package–ANS3:  Construction of Seven (07) stations from SUB CBD1 to Titumir in New Garia – airport Metro Corridor (` 299.77cr.)

·         Beside these works contracts, ` 36.55 cr. value of FLS, DDE & PMC contracts have also been awarded during the financial year 2013–14.

 

 

 

3.26            Final Location Survey (FLS)

 

            During 2013–14, 458 km of Final Location Survey (FLS) was carried out in the following projects:

·         Habibganj – Barkhera 3rd Line (41 Km)

·         Barkhera– Budni 3rd Line (33 Km)

·         Bhimsen – Jhansi Doubling With Electrification (206 Km)

·         Vijaywada – Gudivada – Bhimavaram – Narasapur, Gudiva Da – Machilipatnam & Bhimavaram – Nidadavolu Doubling with Electrification (154 Km)

·         Guntur – Tenali Doubling with Electrification (24 Km)

 

4.                   PROJECT PLANNING & DEVELOPMENT

 

4.1        Public Private Partnership (PPP) – Joint Venture SPVs of RVNL

RVNL was conceived as a non–budgetary investment initiative for creation and augmentation of capacity of Rail infrastructure. In its initial years, RVNL took the lead to create five joint venture Special purpose Vehicles (SPVs). Through these initiatives, RVNL has succeeded in attracting investment of Rs. 5087 Crore (Rs. 1665.40 crore as equity and Rs. 3421.60 crore as debt), with a contribution of only Rs. 620 crore by RVNL, which is approximately 12% of the total investment (details given below). Of the five SPVs promoted by RVNL, Kutch Railway Company Limited has been fully operational since 2006, Krishnapatnam Railway Company Limited is partially operational since 2008 and Bharuch Dahej Railway Company Limited commenced operations in 2012 in full earnest. Construction work being taken up for Haridaspur Paradip Railway Company Limited and Angul Sukinda Railway Limited SPVs is in progress after completion/resolving land acquisition issues.

 

Name of SPV

Total Equity

RVNL Equity

Partners’ Equity

Debt

Total

 

` Cr

` Cr

%age

` Cr

%age

` Cr

 

Kutch Railway Co Ltd.(KRC) (301 Km)

250.00

125.00

50.0%

125.00

50.0%

300.00

550.00

Bharuch Dahej Railway Co. Ltd.

(63 Km)*

165.00

55.00

33.3%

100.11

60.7%

230.00

395.00

Krishnapatnam Railway Co. Ltd. (113Km)

270.00

81.00

30.0%

189.00

70.0%

933.00

1203.00

Haridaspur Paradip Railway Co.Ltd.

(82 Km)

510.00

170.00

33.3%

340.00

66.7%

1092.00

1602.00

Angul Sukinda Railway Ltd.(102 Km)

470.40

189.00

40.2%

281.40

59.8%

866.60

1337.00

Total

1665.4

620.00

37.23%

1035.51

62.17%

3421.60

5087.00

*Equity gap of Rs. 9.89 Cr

 

 

 

 

 

 

 

Total Investment = Rs.5087 Cr

 

 

 

 

 

 

 

RVNL contribution = Rs.620 Cr or 12%

 

 

 

 

 

 

 

 

a.    Kutch Railway Company Limited (KRC)

The first SPV of RVNL, connecting Gandhidham–Palanpur (301 km Gauge Conversion MG to BG) in Gujarat on Western Railway, commenced operations in 2006. The turnover of the SPV for 2013–14 is expected to increase to Rs. 509 Crore (provisional) as compared to Rs. 501 crore in the previous year.

To cater to the anticipated increase in traffic of Kandla & Mundra ports, KRC has planned the doubling of Samakhyali – Palanpur section (248 km).This route will be an important feeder route to the Dedicated Freight Corridor. The doubling project has been sanctioned by the Ministry of Railways in 2012–13 at a cost of Rs 1266 crore, which would be funded by KRC without any contribution of funds by Indian Railways. The SPV plans to fund the doubling project through internal accruals, enhanced equity participation from shareholders and term loans from banks. KRC has appointed RVNL as the executing agency for this project. Further, the study has been completed for the feasibility of a 3rd line between Samakhyali and Gandhidham (53 km) and report has been submitted to KRC.

 

b.      Haridaspur Paradip Railway Company Limited (HPRCL)

HPRCL was incorporated in 2006 to implement the new line project connecting Haridaspur to Paradip port (82 km) in Odisha on East Coast Railway. Land has been acquired for 68 kms out of the total project length of 82 kms. However, land losers had impeded the progress of construction at some locations through obstruction of work and agitations–demanding additional compensation. To resolve this issue Government of Odisha proposed payment of additional compensation as ex–gratia to the land losers. The additional cost of Rs. 48 crore (approximately) towards land acquisition is being borne by the SPV. By March 2014, about 95% of the ex–gratia amount payable was disbursed through State Government agencies.

 

Contract for important bridge on Luna River is under execution and substantial progress has been made and Bridge on Mahanadi River has been completed and handed over to RVNL. Contracts for roadbed, and other major and minor bridges have been awarded in May 2013. HPRCL is now in the process of financial closure to meet its project funding requirements.

 

c.       Krishnapatnam Railway Company Limited (KRCL)

KRCL was registered on 11.10.2006 to implement the new line project connecting Obulavaripalle to Krishnapatnam Port (113 km) in Andhra Pradesh on South Central Railway. The SPV commissioned 23 km of the project section to connect Venkatachalam Station with Krishnapatnam Port in November, 2008. Currently, an average of 11 loaded trains per day are moving on this section and rapid increase of Rail traffic is anticipated. To cater to the increase in port traffic, a 9 km long by–pass was constructed between Venkatachalam and Manubolu in 2010. Doubling of the section between Venkatachalam and Krishnapatnam, taken up at a cost of Rs. 87 crore completely funded by KRCL, has been completed and opened for traffic on 2nd March 2014.

A contract awarded for phase II of the work between Obulavaripalle to Venkatachalam (17–35 km), in May 2012, which includes two tunnels with a total length of about 7.8 km was terminated due to poor progress of work.   The tender has since been reinvited.   Delay has also occurred on account of pending land acquisition in 3 villages.

d.      Bharuch Dahej Railway Company Limited (BDRCL)

BDRCL was incorporated to implement the Gauge Conversion project connecting Bharuch to Dahej Port (62 km) in Gujarat on Western Railway. The first goods train ran on the section in December, 2011. The SPV started commercial operations in March, 2012. A total of 1689 trains were loaded and run on the section during 2013–14. The SPV is expecting a turnover of Rs. 75.81 crore (provisional) for 2013–14.  Western Railway has introduced passenger services on the section in February, 2014.

Due to the paucity of manpower, Ministry of Railways has permitted the SPV to maintain the entire track and also deploy gatemen to man 16 gates on the section. The Company is successfully carrying out the maintenance work resulting in substantial savings compared to the cost of maintenance indicated by the Railways.

e.       Angul Sukinda Railway Limited (ASRL)

ASRL was formed in February, 2009 to implement the new line project connecting Angul to Sukinda Road (102 km) in Odisha on East Cost Railway. The Concession Agreement between the SPV and Ministry of Railway was signed in May 2010. The process of land acquisition is in progress through East Cost Railway. The Project requires 1205 acres of private land, 220 acres of Government land 251 acres of forestland i.e. total 1676 acres. Acquisition of both government and private land is an advanced stage. A tender for taking up execution of work on a portion of the land which has been acquired has been awarded and work has commenced.

 

4.2        Bankability studies

During the year, Bankability reports for the following projects, which were assigned to RVNL, have been completed and submitted to Ministry of Railways for taking further action:

(a)     Rail connectivity to Dighi Port (in Maharashtra);

(b)     Rail connectivity to Rewas Port (in Maharashtra);

 

Bankability reports for the following projects, which were assigned to RVNL, have been completed

(a)     Samkhyali to Gandhidham 3rd line (submitted to Kutch Railway Company)

(b)     Samkhyali to Gandhidham Doubling (Sent to Kutch Railway Company)

(c)     Revised bankability of Angul – Sukinda (submitted to Angul Sukinda Railway company Limited)

 

In addition, bankability study for the following project is in the process of finalization:

(a)     Bhimsen – Jhansi Doubling with RE

 

4.3        Model Concession Agreements

 

Ministry of Railways had mandated RVNL to develop the Model Concession Agreements for various models enumerated in the new policy on Participative Models for Rail connectivity and capacity augmentation projects. The drafts for all the five (5) Model Agreements have been submitted to Ministry of Railways by RVNL for further scrutiny.

 

5.                   SUBSIDIARIES

 

High Speed Rail Corporation of India Limited (HSRC)

High Speed Rail Corporation of India Ltd. (HSRC) has been formed as a subsidiary of Rail Vikas Nigam Ltd. (RVNL), with the approval of President of India, to develop High Speed Rail (HSRC) Corridors in India to run passenger trains at speeds upto 350 km per hour. RVNL incorporated High Speed Rail Corporation of India Limited (HSRC) as its wholly owned subsidiary on 25th July 2012 with an authorized share capital of Rs. 5 crore and paid–up share capital of Rs. 5 lakh. HSRC, which is a Government Company under the provisions of Companies Act, 1956 received its Certificate of Commencement of Business on 18th August, 2012. HSRC was formally launched by the then Hon’ble Minister for Railways, Sh. Malikarjun Kharge in a function held at Vigyan Bhawan on 29th October 2013.

 

In accordance with section 212 of the Companies Act, 1956, the Audited Balance Sheet and Profit & Loss account for the year ended 31st March 2014) and the report of Board of Directors along with Auditors’ Report thereon of High Speed Rail Corporation of India Limited, have been included in the Annual Report of RVNL (Holding Company).

 

A pre–feasibility study of Delhi–Chandigarh–Amritsar High Speed Rail Corridor has been assigned to HSRC by Ministry of Railways. Ministry of Railways has also entrusted the job of increasing the maximum permissible speed on Indian Railways to 160 Km/h on three sections of IR i.e: Delhi–Agra, Delhi–Chandigarh and Delhi–Kanpur.  Knowledge based support for the work of speed raising on existing tracks by upgrading of infrastructure is in progress with HSRC as the project integrator.

 

6.                   PERSONNEL DEVELOPMENT

 

Human Resource is the driving force behind the success of any organization, and it is important to ensure that they are given due recognition and their continued motivation is ensured. The main thrust of HR policy is to ensure that this resource is able to adapt to the changing business priorities and be a strategic business partner in the growth of the organization. Your Company has a lean, but effective organisation, which has been made possible by careful selection of employees with the relevant experience and capability and their further development to ensure most effective delivery of project execution.

 

In addition to the RVNL’s own cadre of employees, the requirement of technical and experienced manpower is largely met by deputation of officers from the Railways. As on 31.3.2014, out of a total strength of 410 employees, 288 are on deputation and the remaining 122 officials are regular employees of the Company.

 

RVNL has created a sustainable, conducive and employee–friendly working environment where they are encouraged to innovate to enhance productivity. In RVNL, a transparent and open communication forum addresses the employee’s needs which has brought about a sense of belonging to the organization. The working conditions and policies are reviewed from time to time to keep the employees’ morale high. 

 

To equip employees to handle new challenges, special attention is placed on managerial and technical skill development through arranging in–house and external trainings/seminars relevant to their area of work. In all 231 employees were deputed for various training programmes during the year.   

 

RVNL recognizes the services of meritorious employees through individual/group awards by presenting shields and cash awards on the occasion of Annual Foundation Day celebrations. In the current year, celebrations were held on 12th April 2013 and nineteen meritorious employees were awarded for their outstanding performances. In addition, eight shields were given to the Project Implementation Units for their achievements in various fields.  Chairman Railway Board and Member Engineering handed over the awards and shields in the function.The list of winners of shields is as under –

 

        Best  PIU (Winner)                                   –  PIU, Secunderabad

        Best PIU (Runner up)                              –  PIU, Bhopal

        Best Project                                            –  a) Rajgoda–Tamluk–BasulyaSutahata

                                                                                      – b) Panskura–Kharagpur–Manoharpur– Posoita

 

        Best PIU in Maximum Turnover               –   PIU, Chennai

        Best PIU in Metro Project                         –  Jokha–Majerhat, (PIU Majerhat,Kolkata)

        Best Workshop Project                            –  Haldia Workshop, (PIU Majerhat, Kolkata)      

        Best PIU in Railway Electrification  project –  PIU, Secunderabad

        Best PIU in Signalling Projects                –  PIU, Secunderabad

The Company provides free consultation services of doctors in Allopathy, Homeopathy and Ayurveda in the office premises to cater to the medical needs of the employees and their families.

 

As a staff welfare measure, the Company organized a picnic programme in which more than a hundred staff along with families participated.

 

 

Industrial relations

 

Cordial industrial relations have been maintained throughout the year.

 

Implementation of Vishaka Guidelines

 

A new committee was constituted, as per Vishaka Guidelines, during the year for dealing with cases of sexual harassment of women at the work place.

 

 

MOU Targets for HRM Performance Evaluation

 

In the MOU targets for the year, training was to be imparted in five specified modules under the sub head “HRM Performance Evaluation” namely – Building Competency in various fields of Project Management, Building Competency in Corporate Governance for Senior Executives, Building Competency in Sustainability, Building Competency in Risk Management for Senior Management and Building Competency in Corporate Social Responsibility. The Company has achieved the targets for rating as “Excellent” in all the above five parameters.

 

Particulars of Employees under Section 217 (2A) of Companies Act, 1956

 

None of the employees of the Company has drawn remuneration exceeding the limits laid down under the provisions of section 217 (2A) of the Companies Act read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

 

Right to Information Act

 

The Right to Information Act has been implemented in RVNL in letter and spirit and timely responses are given to the queries. The Company has nominated an Appellate Authority/Central Public Information Officer for the Corporate Office and an Asstt. Public Information Officer for each PIU. During the year 2013–14, 46 applications were received and disposed off in time.

 

Rajbhasha (Official Language)

 

The company has been making concerted efforts in implementing the directives of the Government of India on use of Rajbhasha (Official Language). The Rajbhasha Department of the Company has a part–time Mukhya Rajbhasha Adhikari and Up–mukhya Rajbhasha Adhikari and a regular Assistant Manager (Rajbhasha). The website of the company is bilingual and is updated regularly. All computers in the Corporate Office have been provided with Unicode compliant software and fonts to facilitate access to common templates in Devnagari.  To encourage use of Rajbhasha, officials using Rajbhasha in drafting notes and letters were identified and given cash awards.

 

  On the occasion of Rajbhasha Pakhwara, various competitions in Hindi essay writing, Hindi noting and drafting, Hindi quiz and Shankar Dayal Singh Smriti PuraskarYojana were held. The successful employees were awarded cash prizes and certificates. During the year 2013–14, four meetings of Rajbhasha Implementation Committee of RVNL with the representatives of Railway Board and one Independent Observer, nominated by Railway Board, were held.

 

Presidential Directives

 

The Company did not receive any Presidential Directive from Ministry of Railways during 2013–14.

 

 

7.                   VIGILANCE

 

The Vigilance department in RVNL is headed by a Chief Vigilance Officer, and assisted by one GM/ Vigilance (Part time), two DGMs/ Vigilance and one Manager/ Vigilance.

RVNL Vigilance functions include a broad range of preventive checks, punitive measures and intelligence gathering. The main focus of the Vigilance was to assess the quality of compliance of works procedures/ practices including quality control in the implementation of projects through inspections onsite and offsite to suggest suitable system improvements, where required.

Preventive measures

During the year 2013–14, six preventive checks on establishment related matters were conducted and recommendations made for streamlining of procedures namely selection of vendors, terms & conditions of contracts etc.  Apart from these checks, inspections of five projects were carried out to ensure adherence to quality, specification standards and the terms & conditions of contracts. These inspections also covered the project management consultancy contracts.

RVNL also facilitated technical inspection by CTE organization of CVC of three projects of RVNL. The inspection reports of CTE were forwarded to the Technical Authority and their replies, vetted by Vigilance, were submitted to CVC. During 2013–14, as a result of vigorous pursuance with the Management, replies to 117 pending paras of all intensive examinations conducted by CVC in the previous years were sent and a large number were closed on satisfactory compliance and system improvement.

Investigation

Complaints received by Vigilance were handled as per prescribed procedure. The verifiable facts, if any, raised in the complaints were investigated and surprise checks done as deemed fit.

Disciplinary Action

During 2013–14, one major penalty case, four minor penalty cases and three Administrative Action cases were finalized with the imposition of penalties/administrative action.

A detailed investigation on certain issues raised by CTE organization of CVC was conducted and the report was submitted to CVC for its advice in the matter.

All prescribed reports vis. Monthly, Quarterly and Annual reports were submitted to the concerned authorities of Railway Board/ CVC on time.

Vigilance Awareness Week

The Vigilance Awareness Week was celebrated in RVNL from 28th October 2013 to 2nd November 2013 commencing with the administration of pledge by all officers and staff. A seminar on the theme – “Promoting Good Governance – Positive Contribution of Vigilance” – was held on 28.10.2013 in Corporate Office of RVNL. On this occasion, RVNL’s 8th Vigilance Bulletin was released and an interactive session with officers of RVNL and CTE of CVC organized.

As per instructions issued by CVC, RVNL Vigilance took up with the management the matter of adoption of Integrity Pact clause in Works tenders in the interest of greater transparency and accountability. The Management have decided to adopt the Integrity Pact clause in principle and the issue of appointment of Independent External Monitors (IEMs) is under consideration in consultation with CVC.

System Improvement

Some of the major focus areas of system improvement implemented through vigilance efforts are indicated below:–

1.

Provision of levying of cess @ 1% of the construction works on the contractor

2.

Provision for use of local good soil as binding materials

3.

Guidelines for fixing completion period of contracts as per requirement of works.

4.

System of monitoring delays on part of the contractor for imposition of penalties.

5.

Rate of Delay damages

6.

Deployment of PMC personnel commensurate with requirement of work.

 

 

8.                   MEMORANDUM OF UNDERSTANDING

 

The Company secured “Excellent” rating by Department of Public Enterprises for the year 2012–13 on the basis of the Memorandum of Understanding signed between RVNL and Ministry of Railways and achievement of the committed targets. This is the third consecutive year for which the Company has been rated as “Excellent”.

 In 2013–14, the Company has been able to achieve the targets set in the MoU and even surpass them.  RVNL completed Doubling of 187.6 km against an Excellent target of 181 Km under project implementation and 74.5 Km against a target of 69 Km under time line completion of projects. Completion of 173.5 km Railway Electrification was achieved against an excellent target of 170 km and 30 km of Railway Electrification under time line completion of projects. The Company was also able to meet the targets for all financial, enterprise specific, sector specific, Corporate Social Responsibility, R&D parameters set in the MoU for 2013–14. Accordingly, the Company is expecting to achieve an “Excellent” rating for 2013–14 as well.

During the year, the Company signed a Memorandum of Understanding (MoU) with Ministry of Railways fixing its physical, financial targets and other sector specific targets for the year 2014–15.

 

 

9.                   PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.

                                             

Conservation of Energy and Technology Absorption

RVNL is conscious of the limited nature of conventional sources and the importance of using our energy resources wisely. Initiatives taken to create awareness about conservation of energy among employees has resulted in steady reduction in energy consumption at Corporate Office. In addition, various state of the art systems have been installed and environment friendly technology has been adopted in the Corporate Office building.

Environment friendly equipments like solar heaters, solar lights etc are being installed in projects/ offices of the Company.

 

Foreign Exchange Earnings and Outgo

During the financial year 2013–14, the Company spent ` 44.22 lakh in foreign exchange on foreign travel of Company’s officials & ` 37.47 lakh on Project Management Consultancy. The Company, however, did not earn any Foreign Exchange.

 

 

10.               RISK MANAGEMENT

RVNL has a formal Risk Management Policy duly approved by the Board of Directors.  The Policy aims to review the exposure of RVNL to various risks and the mitigation measures to be taken periodically.  It also strives to increase awareness among its employees and other stakeholders about possible risks and measures to control the same.

Your Company has a Risk Management Committee under the chairmanship of Director (Operations) with ED (Projects), ED (PP&D), GGM (HR) and GM (F) as members. Significant risks identified by the Committee include risks arising from time and cost overrun in implementation of projects, risks associated with delay in land acquisition, risk of dependency on Indian Railways for financing RVNL projects etc. A number of measures to minimize the claims of the contractors, recommended by the Committee, have been accepted by RVNL management and circulated to units for compliance.

A residential programme on Risk Management for senior management was conducted at Institute of Public Management, Osmania University by Dr V.S. Sastry on 1.12.2013 to 3.12.2013.  The programme was attended by 14 Managers from various departments and PIUs.   

The Committee has engaged a professional firm for preparing a detailed document on Enterprise Risk Assessment and Management in RVNL. The Committee has also proposed to document the risks faced during project execution, and prepare a compendium of case studies for guidance of project managers.

 

11.               CORPORATE SOCIAL RESPONSIBILITY (CSR)

 

In accordance with the revised guidelines and directives issued by Department of Public Enterprises (DPE) in January 2013 (which were to be effective from 1st April 2013),  RVNL has formulated its CSR and Sustainability Policy which was approved by the Board of Directors (BoD) of RVNL in January 2013 itself.

 

As per the approved CSR and Sustainability Policy, RVNL has put in place a three tier organizational structure to steer the CSR and Sustainability agenda of RVNL. The three–tier structure comprises of:

 

a.       Tier–I                ––          Board Level Committee, headed by an Independent Director;

b.       Tier–II               ––          Corporate Level Committee, headed by ED (Mechanical), the Nodal                                  officer for CSR and Sustainability.

c.       Tier–III              ––          Project Implementation Units (PIU) Level Committees, at the field                                                level, headed by the respective CPM of the PIU. 

 

A comprehensive report on CSR activities of RVNL for the year 2013–14 is enclosed as Annexure–C to the report.

 

 

12.               RESEARCH AND DEVELOPMENT

 

In accordance with the guidelines issued by Department of Public Enterprises, a Board level Committee headed by an Independent Director has been constituted.  The Committee had four meetings during the year. 

 

The progress of identified R&D projects are as under:

 

S. No.

Projects Chosen

Progress

1.

Use of satellite stereo images for identifying various alignment options.

Completed for the full project length of Rishikesh – Karanprayag new line.

2

Consultancy for Development of Integrated IT solution for RVNL including Project Management.

Percentage Financial progress of 40% of the contract has been achieved. 

3

Continued implementation of real time software based project monitoring and management system in additional PIUs

REMS in 5 units i.e. Bangalore, Lucknow, Kolkata (Barrackpur), Chennai and Kolkata (Line) has started functioning. 

 

(b) The Director Level Committee held four meetings (one in each quarter) in the year 2013–14.

(c) An expenditure of ` 1.13 crore has been incurred on R&D activities against the target of ` 77 Lakh during the year 2013–14.

 

13.               DIRECTORS’ RESPONSIBILITY STATEMENT

 

The Board of Directors of the Company in pursuance of section 217 (2AA) of the Companies Act, 1956 as amended hereby confirms:

        I.            that in the preparation of the annual accounts, all the applicable accounting standards along with proper explanation have been followed and there has been no material departure;

      II.            that such accounting policies were selected and applied consistently and such judgements and  estimates were made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and Profit & Loss of the Company for the year ended on 31st March 2013;

    III.            that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

    IV.            that the Annual Accounts have been prepared on a going concern basis.

 

14.               BOARD OF DIRECTORS

 

During 1st April, 2013 to 31st March, 2014, the Company held six Board meetings to transact business with one meeting in the quarter ending June 2013, two meetings in quarter ending September 2013, two meetings in quarter ending December 2013 and one meeting in quarter ending March 2014.

 

Mr. V. P. Dudeja, ED (Works), Ministry of Railways was appointed as (part–time) (official) Director on the Board of RVNL w.e.f. 28.06.2013.  Mr. K. K. Aggarwal, ED (W&P), has been nominated as (part–time) (official) Director by Ministry of Railways w.e.f 22.01.2014.

 

Mr. Pradeep Kumar, Advisor (Projects), Ministry of Railways ceased to be part–time official Director on the Board of RVNL  due to his transfer from the post of Advisor (Projects), Ministry of Railways.

 

Mr. K. K. Chaudhary completed his tenure of 3 years as Independent Director on the Board of RVNL on 14.12.2013.   

 

Prof. (Dr.) S. S. Chatterji completed his tenure of 3 years as Independent Director on the Board of RVNL on 12.05.2014.   

 The Directors would like to express their gratitude to all their predecessors for their invaluable contribution.

 

On the date of report, the strength of the Company is eight Directors comprising of five functional directors including Chairman and Managing Director, two part–time official and  one (part–time) (non official) Directors.

 

The following Directors are holding office as on the date of the report:–

1.         Mr. S.C.  Agnihotri                                 ––          from 27.1.2010 as Managing Director and

            Chairman and Managing Director                        from  5.3.2013 onwards as CMD

               

2.         Ms. Gita Mishra                                     ––          from 13.10.2008 onwards

            Director (Personnel)      

 

3.         Mr.  Mukul Jain                                      ––          from 16.06.2010 onwards

            Director (Operations)

 

4.         Mr.  Vijay Anand                                    ––          from 09.04.2011 onwards

            Director (Projects)

 

5.         Mr. Ashok K. Ganju,                              ––          from 12.09.2011 onwards

            Director (Finance)                                 

 

6.         Mr. R. S. Sharma                                  ––          from 11.06.2012 onwards

            Part– time (non– official)                                     

            Director

 

7.         Mr. V. P. Dudeja,                                   ––          from 28.06.2013 onwards

            ED (Works)/ Railway Board,

            Part– time (official)                                            

            Director

 

8.         Mr. K. K. Aggarwal,                              

            ED (W&P)/Railway Board,                      ––          from 22.01.2014 onwards

            Part–time (official)

            Director

           

15.               AUDITORS

 

The Comptroller & Auditor General of India has appointed M/s Kumar Chopra & Associates Chartered Accountants as Statutory Auditors of the Company for the year ended 31st March, 2014. The Board would like to thank them for their valuable support and guidance during the audit of accounts under review. 

 

16.               COMMENTS OF COMPTROLLER & AUDITOR GENERAL (C&AG) OF INDIA 

 

The Comptroller & Auditor General of India has undertaken supplementary audit on the accounts of the Company for the year ended 31st March, 2014 under Section 619(4) of the Companies Act, 1956. The comments of the C & AG on the Annual Accounts of the Company for the year ended 31st March, 2014 shall also form part of this report.

 

17.               ACKNOWLEDGEMENTS

 

We take this opportunity to gratefully acknowledge the cooperation, guidance and support received from Ministry of Railways (MoR), Ministry of Finance, Department of Public Enterprises, various banks, Asian Development Bank, the Zonal Railways, IRFC, RITES, IRCON, RLDA and our equity partners in Joint Venture SPVs for their continued interest and support to the Company. The Directors would like to express their thanks for the devotion, commitment and dedication of each and every employee of the Company due to which your Company could face the new challenges and opportunities and create a niche for itself as a major provider of Rail infrastructure in the country.  The Directors also place on record their appreciation to the officials of Comptroller & Auditor General of India for their guidance during the year under review.  Last but not the least, the Directors  would  like to express their  deep appreciation and gratitude  towards  all  their  predecessors who have been associated with RVNL, for their invaluable contribution to the growth  and development of the Company in attainment of the Company’s aims and goals in all spheres.

 

For and on behalf of Board of Directors

(S. C. Agnihotri)

Chairman and Managing Director

 

 

 

New Delhi

Dt: 15.07.2014

Annexure “A”

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

 

Industry Structure and Development:

 

Over the years Indian Railways have emerged as the world’s fourth largest Rail freight carrier and largest passenger carrier.  It runs 12,617 trains carrying over 23 million passengers and 3 million tonnes of freight per day. It is the backbone of India’s transport infrastructure and the quality, capacity and the performance of Railways’ infrastructure is of crucial importance for the nation.   Experts have noted that the contribution of Indian Railways is around 1.2% of the GDP and that by 2020 it should reach about 3% to ensure sustainable economic development of the country. 

 

However, Indian Railways is presently faced with a critical infrastructure deficit as the main traffic carrying routes are saturated.             At the same time the road sector has developed significantly resulting in the steady increase in the share of traffic being moved by roads at the cost of the Railways whose share has reduced to less than 30%. Alarmingly, this is also true for the traditional bulk cargo of Railways such as coal, cement, steel etc.  On a wider perspective, reduction in traffic share is not in the national interest as the Railways are the most energy efficient and environment friendly mode of transport on land.

 

Due to serious bottlenecks on saturated lines, the Railways are also not in a position to meet the demand for additional passenger and freight raffic. At the same time there is a need to provide Rail connectivity to emerging ports, new mines, power plants etc.  The situation has been further compounded due to limited budgetary support in the past leading to inadequte funding of important infrastructure enhancing Rail projects.  To ensure that the Railways continue to play a vital role in the economic development of the country, it will have to focus on creation of additional capacity and provide vital links to new economic hubs.  

 

The present scenario of a severe resource crunch and the need for capacity augmentation is in fact similar to that faced by the Railways in 2002. At that time Prime Minister of India launched a non–budgetary investment initiative for the creation and augmentation of capacity of Rail infrastructure called National Rail Vikas Yojana (NRVY). RVNL was, in fact, created in this background with the specific mandate for fast track implementation of projects and raising of extra budgetary resources.

 

 Over the years, RVNL has successfully established its credentials for fast track delivery of Railway infrastructure projects. Initially RVNL had started with the execution of doubling, gauge conversion, new lines and Railway electrification projects. Having established itself in the area of project execution, the Company has now diversified and is executing projects of varied types including construction of Metro lines and workshops.  RVNL has also been assigned the technically challenging Rishikesh Karanprayag new line in Himalayas for execution. The alignment has now been finalised after detailed geo–technical and other studies. Recently another challenging project in Himachal Pradesh, namely Bhanupalli– Bilaspur new line, has also been assigned to RVNL for execution. RVNL is also emerging as a major provider in increasing the Railway Electrification network.

 

RVNL has also recognised the vast potential for building a High Speed Rail Network in the country and with the approval of President of India has formed High Speed Rail Corporation of India Ltd., as its subsidiary.  This initiative will ensure that RVNL will have a significant role to play in the delivery of high speed Rail infrastructure in the country while HSRC will plan for operating the system in partnership with global service providers on PPP basis.  A suitable financial model for implementing HSR projects will have to be formulated accordingly.

 

RVNL has been given a mandate for resource mobilization through extra budgetary resourses. Accordingly, it has played a significant role in the raising of funds for project implementation through the SPV route. RVNL has established five SPVs, which have generated substantial revenues with only a limited contribution of equity by Indian Railways.  To augment resourses, fresh avenues of further investment from critical stakeholders as well as funding agencies will have to be explored. In this regard the Ministry of Railways announced a new policy for Private Participation in Rail infrastructure which addresses the specific concerns of prospective partners such as ports, mines, industry and private investors.  However, presently the company’s role in raising EBR from market borrowings has been limited to projects financed by IRFC (as decided by Railway Board).

 

It is in this background that RVNL is poised to play an even more significant role in the ramping of Rail infrastructure in the country.  While the company has streamlined its tendering and project management processes, the major challenge that RVNL will face in the coming years is to reduce its dependence on allocation of funds in the Railway budget and to find innovative methods to raise extra budgetary resources for implementation of Rail related projects in the country. 

 

 

Rail Vikas Nigam Limited (RVNL) – A Synopsis

 

Rail Vikas Nigam Limited, a Public Sector Undertaking of Ministry of Railways, was created in 2003 under the National Rail Vikas Yojana (NRVY) to implement capacity augumenting Railway projects viz. gauge conversion, new line, doubling or third line through budgetary and non–budgetary resources to remove bottlenecks on the Indian Railways network, and to facilitate port connectivity and multimodal corridors to the hinterland on a fast track basis. With the assignment of metro works in Kolkata and construction of workshop projects, RVNL is emerging as a major provider of Rail infrastructure projects in fast track mode. 

 

 Working on turnkey basis, RVNL undertakes project development and implementation and has been mandated to undertake resource mobilization directly or by creation of project specific SPVs or any other financing structure, appropriate for various kind of projects. RVNL is supporting Ministry of Railways in strengthening the policy and regulatory framework of PPPs in the Railway Sector.

 

Strengths/Weaknesses / Opportunities/Threats

 

Strengths

 

      RVNL has successfully mobilized funds for the construction of new lines by creating project specific SPVs with strategic stakeholders. Its large capital base can be leveraged to raise more funds as per its original mandate.

      MoR has delegated the authority to RVNL for sanctioning of estimates and awarding contracts without any financial limits enabling RVNL to implement projects faster.

      As RVNL can award large value contracts, it has been able to attract the best infrastructure companies in India.

      It has developed expertise in undertaking all stages of project development – from concept to commissioning.

      RVNL has successfully mobilized funds for the construction of new lines by creating project specific SPVs with strategic stake holders. Its large capital base can be leveraged to raise more funds as per its original mandate.

      RVNL has developed the requisite skills and experience to follow ADB procedures and ensure Resettlement and Rehabilitation of Project Affected Persons to implement socio–economic safeguards.

      It has introduced large–scale mechanization in all aspects of construction to achieve high quality output.

      It has refined its tendering processes and introduced innovative concepts like multi–package tenders resulting in faster decision making and savings in overall costs

      It has a sound and robust financial management system, allowing for effective monitoring and control of expenditure

      It is a lean organisation with qualified, expert, technical manpower base.

 

Weaknesses

 

      RVNL is largely dependent on the Ministry of Railways for funding of projects which may prove detrimental for the future growth of the Company and for timely implementation of the projects.

      RVNL has not been notified as a Zonal Railway and accordingly does not have the authority to approve drawings, designs etc.

      The progress of projects often gets impaired on account of delays in securing the necessary approvals from the Zonal Railways.

      There are changes in approved plans by the Railways during execution of projects which causes delays.

      RVNL has to depend on Railways for granting of traffic blocks for execution of projects which may delay the project.

      RVNL does not have the freedom to plan execution of projects and has to follow priorities set by Railways.

      RVNL is dependent on MoR for approval of the projects to be taken up through SPV route along with terms of concession agreement.

      A large percentage of RVNL’s skilled manpower is on deputation from Indian Railways.  In case the terms of deputation that includes provision for retaining Railways accommodation becomes adverse, a number of deputationists may seek repatriation.

 

Opportunities

 

      RVNL can play a significant role in raising extra–budgetary resources for project execution as this is a specific mandate of the company and has experience of implementation of projects in PPP mode.

      With the work of implementation of Kolkata Metro projects, RVNL has developed expertise for implementation of metro projects in other cities across the country.

      RVNL has successfully constructed major workshops for Indian Railways in fast track mode. RVNL can thus undertake implementation of large buildings, factories, townships etc. for other agencies as well.

      With RVNL’s growth as a major provider of a variety of Rail infrastructure, there is an opportunity of securing Rail infrastructure projects overseas.

      RVNL is implementing Rishikesh – Karanprayag project in the Himalayan region and can also take up more such projects in hilly terrain.

      RVNL has formed a subsidiary company for the development and implementation of High Speed Rail projects – High Speed Rail Corporation of India Ltd. which can provide opportunities for:

––    Implementation of High Speed Corridors in the country

     upgradation of some routes for semi high speed operation as planned by MoR

     Providing Inter city high speed train connectivity such as Bangaluru–Mysore (130 km), Ahmedabad–Dholera (125 km)

 

Threats

 

      The shortage of technical manpower, with requisite experience in the Rail sector, is a major constraint in the delivery of projects. 

      At present, RVNL is largely dependent on deputationists from Indian Railways.  Any adverse policy decision may result in Railway officers not being available for deputation. 

      Land acquisition issues require to be resolved expeditiously so that the progress of projects is not hampered.

      Delays in clearances for project execution such as tree–cutting, removal of utilities from the construction of viaducts for metro Rail projects etc.

      A number of projects are being executed along existing running lines, which makes safety a serious challenge.

      Projects are adversely affected due to poor law and order conditions such as those in Left Wing Extremists affected districts.

 

 

 Industrial Relations

 

Industrial Relations remained harmonious and cordial.

 

Strategies

 

The Company is taking measures for ensuring cost control and timely delivery of projects, without any compromise on qualityfor the execution and delivery of Rail infrastructure projects on a fast track basis.  RVNL can play a significant role in Ministry of Railways efforts of raising extra–budgetary resources for project implementation, especially through the SPV route. Innovative models for project financing will also have to be explored.  RVNL has also requested Ministry of Railways that it may be permitted to leverage its equity base to raise funds from the market as per its mandate. 

 

RVNL has created a permanent cadre through absorption to provide institutional continuity and to reduce the dependence on seeking officers and staff on deputation from Railways.  Most of the workforce consists of qualified technical ataff with experience in Railways and/or its PSUs.  Wherever required, RVNL has also recruited specialists to provide expert guidance in its project implementation.

 

A comprehensive and appropriate training programme is being implemented to develop competent, suitably skilled and qualified manpower.  Efforts are also being made to transfer skills and best practices from other infrastructure sectors and acquiring skills related to execution of Railway projects.

 

The Mission, Vision and Objectives of the Company as per the MoU are mentioned below:

 

Mission

 

To create state of the art Rail transport infrastructure to meet the growing demand.

 

Vision

 

To emerge as the most efficient provider of Rail infrastructure, with a sound financial base and global construction practices, for timely completion of projects.

 

 

Objectives

 

·         To undertake and execute successfully project development, financing and implementation of projects relating to infrastructure, especially Rail infrastructure

·         To mobilize financial and human resources for project implementation;

·         Timely execution of projects with least cost escalation;

·         To maintain a cost effective organizational set up;

·         To encourage public private participation in Rail related projects managed by RVNL;

·         To be an infrastructure Project Execution Company committed to sustainable development and environment friendly construction practices of Rail related projects in the country;

·         To acquire, purchase, license, concession or assign Rail infrastructure assets including contractual rights and obligation with the approval of MoR whenever required.

 

Outlook

 

As per the MoU between RVNL and Ministry of Railways for the year 2014–15, RVNL is committed to achieve 200 km of Doubling/third line and 180 km of Railway Electrification during the year.

 

Concerns

 

The main concern being faced by RVNL in the implementation of projects is the availability of adequate funds from Ministry of Railways as the requirement of funds projected for 2014–15 would be higher for achieving the MoU turnover target of ` 2500 Crores. Insufficient funds, delays in land acquisition, finalization of plans by users, timely clearance of permissions from other government departments (mainly Ministry of Environment and Forests) and law and order problems and necessary support from Ministry of Railways are main concern areas in project execution. 

 

Internal Control Systems

 

Effective internal control systems have been put in place for monitoring the implementation of projects including periodic reviews of the physical and financial progress, evaluation of efficiency of cost control measures based on inputs of both the Technical and Finance Departments.

 

Reviews of the progress and nature of expenditure is regularly conducted by the Finance and Accounts Department and reports thereon are submitted to Management.  Budgetary reviews are also conducted.  A system of internal audit by an external firm ensures the efficacy of control systems and also submission of comments on the appropriateness of incurrence of expenditure and their accountal by the Company.  The reports of the internal auditor are periodically reviewed by Audit Committee of the Board of Directors and implementation of recommendations are monitored. The Annual Accounts of the Company are also subject to scrutiny by the Statutory Auditor appointed by CAG and Audit by CAG.

 

Human Resource Development and Industrial Relations

 

Rail Vikas Nigam Limited endeavors at enhancing the capabilities of the organization in acquiring, developing, motivating and retaining its human resources in an environment in which team work and cooperation among employees contributes to the growth and well being of individual employees as well as the organization as a whole. Emphasis is laid on employees maintaining work life balance.

 

To strengthen its position, the Company has formed a nucleus of its own permanent cadre through an Absorption Policy along with a Recruitment & Promotion Policy as approved by the Board of Directors of RVNL.

 

Cautionary Statement

 

Statements in the Management Discussion and Analysis Report describing the Company’s strengths, strategies, projection and estimates are forward looking statements and progressive within the meaning of applicable laws and regulations.  Actual results may vary from those expressed or implied, depending upon economic conditions, government policies and other incidental factors.  Readers are cautioned and not to place undue reliance on the forward looking statements.

 

 

 

 

 

 

 

 

 

 

Annexure ”B”

 

REPORT ON CORPORATE GOVERNANCE

 

1)              The Company’s Corporate Governance Philosophy

 

At RVNL, Corporate Governance is not solely restricted to regulatory or structural remedies.  At your Company, it is a culture, which is based on trusteeship, transparency, empowerment, accountability and corporate ethics. 

 

Your Company has always shown commitment towards its Code of Corporate Governance, which is, “To act in accordance with the highest standards of professional integrity, honesty, ethical conduct and to be proficient, professional and profitable by upholding and promoting transparency and accountability.”

 

RVNL has taken initiatives to strengthen the Corporate Governance framework internally by implementing policies viz., Code of Conduct for Board members and Senior Management and Whistle Blower Policy.  To attain the set goals and targets, your Company has been guided by the following key values: 

 

·          Zeal to attain excellence in performance;To act as a team;  Honesty and  justice in dealings;  Firm obedience to commitments undertaken; Timely completion of work; Respect for dignity and potential of individuals; Devotion and pride towards RVNL.

 

2)              Board of Directors

 

The Board lays down the Company’s policies and procedures and oversees their implementation to ensure attainment of the objectives of the Company.  The Board of Directors consists of experienced professionals who constantly endeavour to set goals to align with the Company’s Mission,
(i.e. “To create state of the art Rail transport infrastructure to meet the growing demand”) and Vision, (i.e. “To emerge as the most efficient provider of Rail infrastructure, with a sound financial base and global construction practices, for timely completion of projects.)”

 

Your Company, being a Government Company, as defined under the Companies Act, 1956, appointment/nomination of all the Directors is done by President of India through Ministry of Railways. The Articles of Association of your Company provides that the strength of the Board shall not be less than three (3) Directors and not more than twelve (12). These Directors may be either whole–time Directors or part–time Directors.

 

Composition of the Board:

 

The present strength of the Board of RVNL comprises of eight (8) Directors.  The composition of the Board includes five (5) whole–time Directors including Chairman and Managing Director, two (2) Government Nominees (on behalf of Ministry of Railways) as (part–time) (official) Director, and one (1) part–time (non–official) (Independent) Directors.

 

The age limit of Chairman and Managing Director and other whole–time Directors is 60 years.

 

The Chairman and Managing Director and other whole–time Directors are appointed for a period of five years from the date of taking over of charge or till the date of superannuation of the incumbent or till further orders from the Government of India, whichever event occurs earlier.

 

Government Nominee Directors representing the Ministry of Railways, Government of India, retire from the Board at the discretion of the nominating authority or on their ceasing to be officials of the Ministry of Railways.

 

Independent Directors are appointed by the Government of India, usually for a tenure of 3 years.

 

The composition of the Board of RVNL during the year, along with Directorships and memberships/chairmanships in the Committees held by them is reproduced in the table below:

 

Directors on the Board of RVNL

S.No

Category of Directors

Name of Directors

Number of  Directorships/

Chairmanships in public limited companies excluding RVNL *

Total No. of Committee

Memberships/

Chairmanships in public limited companies including

RVNL#

 

As Chairman

As Member

(a)      Whole–time Directors

 

1.

Chairman and  Managing Director

 

Mr. S.C. Agnihotri

 

1

{Chairman  –   HSRCIL}

 

 

Nil

Nil

2.

Director (Finance)

Mr. Ashok K. Ganju

 

1

{Director  – HSCRIL}

Nil

Nil

3.

Director (Operations)

Mr. Mukul Jain

1

{Director  – HSCRIL}

Nil

Nil

4.

Director (Personnel)

Ms. Gita Mishra

Nil

Nil

Nil

5.

Director (Projects)

Mr. Vijay Anand

 

1

{Director  – HSCRIL}

Nil

Nil

(ii)       Part–time (official ) Directors

 

6.

Adviser (Projects)/

Railway Board

(upto 31.12.2013)

 

Mr. Pradeep Kumar

 

1

{Director– CMRL}

Nil

Nil

7.

Executive Director (Works)

Railway Board

(From 28.06.2013)

 

Mr. V. P. Dudeja

 

3

{Director–Pipavav Rly. Co. Ltd.}

{Director–Rail Infra. Structure}

{Director–Kutch Railway Co. Ltd.}

Nil

1

8.

Executive Director (W&P)

Railway Board

(From 22.01.2014)

Mr. K. K. Aggarwal

3

{Director–BMRCL}

{Director–KMRCL}

{Director–MRVCL}

Nil

Nil

9.

 

 

 

(Part–time) (non–official) (Independent)

Directors

Dr. K.K. Chaudhuri

(upto 14.12.2013)

 

2

{ Director– Manaksia Limited and Sharda Plywood Industries Limited}

1

3

10.

Prof. (Dr.) S. S. Chatterji

(upto 12.5.2014)

1

{ Director – IRCON}

Nil

2

11

Mr. R.S. Sharma

 

4

{Director –DFCCIL }

{Director–SAIL}

{Director–Hinduja Leyland Fin. Ltd.}

{Director–Jubilant Energy}

Nil

3

* Does not include Directorships of Foreign Companies, Section 25 Companies and Private Limited Companies.

#   Membership/Chairmanship in the Audit Committee and  Shareholders’ Grievance Committee have been considered for counting the number, as prescribed under DPE’s Guidelines on Corporate Governance, 2010.

Notes:

1                     The term “”whole time” indicates functional/executive Directors (in the whole time employment of the Company)

2                     The term “part–time official” indicates the Directors nominated by Government (Ministry of Railways) on the Board of RVNL who are officials of the Ministry of Railways.

3                     The term “part–time non–official” indicates the Directors who are Independent and do not hold any office in the Government.

4                     The number of directorships held by Directors of the Company is within the limit stipulated under Companies Act, 1956.

5                     The Directorships and Memberships/Chairmanships are based on the latest disclosure received.

6                     Directors are not per se related to each other and do not have any pecuniary relationship or transaction with the Company.

7                     None of the Directors are member of more than 10 committees or Chairman of more than 5 committees as laid down in DPE’s guidelines on Corporate Governance of May, 2010.

8                     Full names of the referred companies:

                     i.                        HSRC – High Speed Rail Corporation of India Limited; 

                    ii.                        BMRC – Bangalore Metro Rail Corporation Limited,

                   iii.                        KMRCL– Kolkata Metro Rail Corporation Limited

                   iv.                        MRVCL– Mumbai Rail Vikas Corporation Limited

                    v.                        CMRL – Chennai Metro Rail Limited;

                   vi.                        DFCCIL – Dedicated Freight Corridor Corporation of India Limited

                  vii.                        SAIL– Steel Authority of India Limited

 

 

3)              Board Meetings, Committee meetings  and Procedures

 

a.       Scheduling and selection of agenda for Board/Committee meetings

 

   The meetings are convened by giving appropriate advance notice after obtaining the approval of the Chairman of the Board/ Committee. Detailed agenda notes, along with other explanatory statements, are circulated in advance among the members for focused discussion and effective decision– making during the meeting. When urgent issues need to be addressed, meetings are called at shorter notice or resolutions are passed by circulation, which are put up in the next meeting of the Board of Directors for information.

   Wherever it is not practical to attach a document to the agenda item, being confidential in nature, the same is tabled at the meeting with approval of Chairman of the Board/Committee

   In special and exceptional circumstances, additional or supplementary items are placed on table during the meeting

    The agenda papers are prepared by the concerned officials, sponsored by the concerned Functional Director and approved by the Chairman and Managing Director.

   Duly approved Agenda papers are circulated amongst the members of the Board/Committee by the Company Secretary or the convener of the Committee. 

    The meetings are usually held at the Company’s registered office.

   The members of the Board have complete access to all information of the Company. The Board is also, free to recommend any issue that it may consider important for inclusion in the agenda.

   Presentations are made to the Board/Committee covering Finance, Operations, Human Resources, Joint Venture operations, whenever required.

 

b.       Recording of minutes of the Board/Committee meeting

 

Minutes of the proceedings of each Board/Committee meetings are duly recorded.  Draft minutes are circulated amongst all members of the Board/Committee for their suggestions and comments.  The comments received by the members are incorporated in the minutes, which are finally approved by the Chairman of the Board/Committee.  The finalized minutes are entered in the Minutes Book. The minutes of the Board meeting are confirmed in the next meeting.  Minutes of the meetings of the committees are included in the agenda of the Board meeting for information of the Directors.

 

c.        Compliance of laws

 

RVNL endeavours that all provisions of laws, rules and guidelines applicable to it are complied with. To ensure the same, a duly signed Statutory Compliance Certificate is obtained from all the Departments at Corporate Office level and all the Project Implementing Units which is consolidated by Company Secretary and put up to Board of Directors with the signature of Chairman and Managing Director on an annual basis.

 

d.       Number of Board meetings

 

As per the guidelines on Corporate Governance released by Department of Public Enterprises in 2010, the Board meetings of RVNL are held within an interval of not more than 3 months.

 

During 1st April, 2013 to 31st March, 2014, the Company held six Board meetings to transact business with one meeting in the quarter ending June 2013, two meetings in quarter ending September 2013, two meetings in quarter ending December 2013 and one meeting in quarter ending March 2014.

 

In all cases of absence of a Director, Leave of Absence was granted under clause (g) of sub–section (1) of section 283 of the Companies Act, 1956.

 

Details of the dates of the meetings of Board of Directors of RVNL for the year under review are mentioned below:

60th meeting of Board of Directors

16th April, 2013

61st meeting of Board of Directors

3rd July, 2013

62nd meeting of Board of Directors

18th September, 2013

63rd meeting of Board of Directors

26th November, 2013

64th meeting of Board of Directors

65th meeting of Board of Directors

12th December, 2013

10th March, 2014

 

 

 

 

 

 

 

 

e.       Attendance in Board meetings and last AGM

 

The details of attendance of each Director in the Board meetings held during 2013–14 and in the last AGM are mentioned below:

 

S.No

Name & Status of Directors

No. of Board meetings held

Last AGM attended

Held (during their respective tenure)

Attended

1.

Mr. S.C. Agnihotri ,

Chairman and Managing Director

 

6

6

Yes

2.

Mr. Pradeep Kumar,

Advisor (Projects), Railway Board/

Director (official)

(upto 31.12.2013)

 

5

5

Yes

3.

Mr. Ved Prakash Dudeja,

ED (Works), Railway Board/

Director (official)

(from 28.06.2013 onwards)

5

1

Yes

4.

Mr. K.K. Aggarwal,

ED (W&P), Railway Board/

Director (official)

(from 22.01.2014 onwards )

1

1

No

5.

Ms. Gita Mishra,

Director (Personnel)

 

6

5

Yes

6.

Mr.Ashok K. Ganju,

Director (Finance)

 

6

6

Yes

5.

Mr. Mukul Jain,

Director (Operations)

 

6

6

Yes

6.

Mr. Vijay Anand,

Director (Projects)

 

6

6

Yes

7.

Dr. K.K. Chaudhuri,

Part–time (non–official) Director

(upto 14.12.2013)

 

5

5

Yes

8.

Prof. (Dr.) S. S. Chatterji,

Part–time (non–official) Director

(upto 12.05.2014)

 

6

6

Yes

9.

Mr .R. S. Sharma

Part–time (non–official) Director

 

6

5

Yes

 

 

f.        Disclosures by Directors

 

As per the disclosures made by Directors under section 299 of Companies Act, 1956, no relationship exists between the directors inter–se. The Government Nominee Directors are officials of Ministry of Railways and thus related to the promoter.

 

Since, the entire paid–up share capital of RVNL is being held by Central Government (Ministry of Railways), section 255 to 257 of the Companies Act, 1956, which require not less than 2/3rd of the Directors as persons whose office is liable to determination by retirement of directors by rotation at a general meeting, are exempted to the Company vide Notification no. GSR. 906, dated 30–.07–1981 of Department of Company Affairs.

 

The Company has not issued any prospectus or Letter of Offer.

 

g.       Brief resume of Directors appointed during/after the closure of the financial year

 

        Mr. V. P. Dudeja, ED (Works), Railway Board as (part–time) (official) Director w.e.f. 28.06.2013

 

Mr. V. P. Dudeja, an IRSE office and Post Graduate in Structures (Civil Engg.) with 26 years’ diversified professional experience in Indian Railways and Corporate environment.  He has executed a large number of Railway Construction projects of New Lines, Gauge Conversion, Doubling and Delhi Metro.  He is presently monitoring all Railway construction projects of Indian Railways.

 

        Mr. K.K. Aggarwal, ED (W&P), Railway Board as (part–time) (official) Director  w.e.f. 22.01.2014

 

Mr. K. K. Aggarwal, IRSE officer of 1986 batch, is presently working in Ministry of Railways as Executive Director, Works Planning in Ministry of Railways wherein he is handling the issues related to Suburban Transport, Traffic Facilities and Metro Rail Projects. He is  B.Tech (Civil) from I.I.T/Roorkee and M.Tech from I.I.T/Delhi. During his 25 years of career in Railways, he has served in various capacities including Sr DEN/ Moradabad, Dy Chief Engineer/ Construction/ Chandigarh and Director/Public Sector Units in Ministry of Railways. He has also served as Chief Project Manager/ Delhi in Rail Vikas Nigam Limited from 2007 to 2012. In this capacity, he has completed the work of commissioning of 3rd Line in Aligarh– Ghaziabad and Palwal– Bhuteshwar section of Indian Railways.

He has participated in various trainings in India and abroad and has represented Indian Railways as a part of some delegations abroad.

 

4)              Committees of Board:

 

The Company has formed the following committees of Board of Directors of RVNL: 

 

·         Audit Committee;

·         Remuneration Committee;

·         Investment Committee;

·         CSR and Sustainability Development Committee;

·         Research & Development Committee;

 

Audit Committee

 

o   Scope of the Committee :

The Committee acts in accordance with the Terms of Reference as per Section 292A of Companies Act, 1956 and Guidelines of Corporate Governance laid down by Department of Public Enterprises in May, 2010. The scope of the Committee is:

      Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

      Recommending to the Board the fixation of audit fees.

      Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

      Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

          Matters required to be included in the Directors? Responsibility Statement” to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956;

           Changes, if any, in accounting policies and practices and reasons for the same;

           Major accounting entries involving estimates based on the exercise of judgment by management;

          Significant adjustments made in the financial statements arising out of audit findings;

           Compliance with legal requirements relating to financial statements;

           Disclosure of any related party transactions; and

           Qualifications in the draft audit report.

      Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.

      Reviewing, with the management, performance of internal auditors and adequacy of the internal control systems.

      Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

      Discussion with internal auditors and/or auditors any significant findings and follow up there on.

      Reviewing the findings of any internal investigations by the internal auditors/auditors/agencies into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

      Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post–audit discussion to ascertain any area of concern.

      To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non–payment of declared dividends) and creditors.

      To review the functioning of the Whistle Blower Mechanism.

      To review the follow up action on the audit observations of the C&AG audit.

      To review the follow up action taken on the recommendations of Committee on Public Undertaking (COPU) of the Parliament.

      Provide an open avenue of communication between the statutory auditor, internal auditor and the Board of Directors.

      Review all related party transactions in the company. For this purpose, the Audit Committee may designate a member who shall be responsible for reviewing related party transactions.

      Review with the statutory auditor the co–ordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of all audit resources.

      Consider and review the following with the Statutory auditor and the management:

      The adequacy of internal controls including computerized information system controls and security, and

      Related findings and recommendations of the Statutory Auditor and Internal Auditor, together with the management response.

      Consider and review the following with the management, internal auditors and the Statutory auditor:

      Significant findings during the year, including the status of previous audit recommendations

      Any difficulties encountered during audit work including any restrictions on the activities or access to required information.

      Carrying out functions pursuant to provisions of section 292A of the Companies Act.

 

o   Composition of the Committee

The Company has in place an Audit Committee of the Board of Directors pursuant to Section 292A of the Companies Act, 1956 and the Guidelines on Corporate Governance issued by the Department of Public Enterprises in May, 2010. The Committee is reconstituted as and when there has been change in the Independent or part time Directors of the Company.

As on 31st March 2014, the Committee had the following composition: 

 

 

Name of the Director

              Status

Dr. S.S. Chatterji,  Part–time non–official (Independent) Director

            Chairman

Mr. R.S. Sharma, Part–time non–official (Independent) Director

            Member

Mr. Mukul Jain, Director (Operations)/RVNL

            Member

Mr. V.P. Dudeja, ED (Works), Railway Board

            Member

 

Director (Finance) is a permanent invitee for the meetings of the Audit Committee.

 

The meetings are also attended by senior officials of F&A Department, head/representative of the Internal Auditor and Statutory Auditors as Special Invitees.

 

o   Meetings and Attendance  of the Committee:

 

In accordance with the guidelines released by Department of Public Enterprises on Corporate Governance, the meetings of Audit Committee were held in an interval of less than four months. The Committee met four times during the financial year 2013–14, i.e. on 22nd May 2013, 3rd July 2013, 22nd October, 2013 and on 17th February, 2014. The details of the attendance of each member are mentioned below:

Name of the Member with Status

Meetings held during their

 respective tenure

Attendance

Dr. K. K. Chaudhuri, Chairman (since retired)

Dr. S. S. Chatterji, Member

Mr. R. S. Sharma, Member

Mr. Mukul Jain, Member

Mr. V.P. Dudeja, Member

3

 

4

4

1

1

3

 

4

4

1

1

 

Company Secretary is the Secretary to the Committee.   

Remuneration Committee

Scope of the Committee:

The Committee has been constituted pursuant to clause 5.1 of the guidelines on Corporate Governance issued by Department of Public Enterprises, to decide the annual bonus/PRP pay pool and policy for its distribution as per the recommendations of 2nd IDA Pay Revision Committee.

Composition of the Committee:  

In accordance with the DPE’s guidelines on Corporate Governance released in May 2010, the Committee was constituted with an Independent Director as Chairman.

Composition of the Committee for 2013–14 was as follows:

 Name of the Director

Status

 

Dr. K.K. Chaudhuri, Part–time non–official (Independent) Director

Chairman

Dr. S.S. Chatterji, Part–time non–official (Independent) Director

Member

Mr. R.S. Sharma, Part–time non–official (Independent) Director

Member

Mr. Ashok K. Ganju , Director (Finance), RVNL (without right to vote)

Member

 

 

Mr. S. C. Agnihotri, Chairman and Managing Director and Ms Gita Mishra, Director Personnel are permanent invitees for the meetings of the Committee.

Mr. Ajay Kumar, GGM (HR) is the Secretary to the Committee.

Meetings and Attendance during the year:

Two meetings of the Committee was held during the financial year 2013–14 and it was attended the all members.

 

Details of remuneration paid to Directors of RVNL during 2013–14

 

·         Part–time official (Government nominee) Directors

 

The part–time official (Government nominee) Directors on the Board of the Company do not draw any remuneration. They only draw regular remuneration from the Government of India (Ministry of Railways) as Government officials.

 

·         Sitting fee to Part–time non– official independent Directors

 

The part–time non–official (Independent) Directors on the Board of the Company are paid a sitting fee of 12000/– for attending Board/Committee meeting.

(Figures in )

S. No

Name of the Director

Sitting Fees

Total

Board Meeting

Committee Meetings

 

1.

Dr. K. K. Chaudhuri

60000

96000

156000

2.

Dr. S. S. Chatterji

72000

96000

168000

3.

Mr. R.S. Sharma

60000

120000

180000

 

Total

192000

312000

504000

 

 

 

 

 

 

 

 

 

 

Remuneration of whole–time Directors for financial year 2013–14

S.No

Name of Directors

Salary

Lease/

Licence Fees)

Perquisites

Performance Related Pay/Ex–Gratia Payment *

Retirement Benefit
(EPF or FSC)

Bonus/

Ex–gratia

Stock options

Total

1.

Sh. S.C.Agnihotri

Chairman and Managing Director

 

2499280

750000

 

142227

4205820

240699

 

––

 

––

7838026

2.

Sh. Ashok K.Ganju

Director(Finance)

 

2110494

600000

 

96003

2357987

209604

 

––

 

––

5374088

3.

Smt. Gita Mishra

Director (Personnel)

 

2395305

100000

 

138279

2951190

564684

 

––

 

––

6149458

4.

Sh. Mukul Jain

Director (Operations)

 

2275436

600000

 

130348

2809050

214327

 

––

 

––

6029161

5.

Sh. Vijay Anand

Director (Projects)

 

2104950

––

 

105290

2710500

209052

 

––

 

––

5129792

 

Total

11385465

2050000

612147

15034547

1438366

––

––

30520525

 

Notes:

1.        Gratuity and other pensionary benefits of working Directors have not been included.

2.        Payment on account of PRP to Sh. S.C.Agnihotri, Sh. Mukul Jain and Smt. Gita Mishra pertains to Financial Year 2010–11.

3.        Payment on account of PRP amounting to Rs. 15,23,370/– to Sh. Harish Chandra pertains to Financial Year 2010–11.

 

 

 

Investment Committee

 

Scope of the Committee

 

In accordance with DPE guidelines, the Investment Committee of RVNL has been constituted to take investment decisions for short–term deployment of surplus funds as per financial delegation(s) of power for this purpose. The decision taken by the Committee is put up to the Board of Directors of RVNL regularly for information.   

 

Composition of Committee

 

The Committee consists of Managing Director, Director Finance and Director (Operations). Ms. Meenu Dang, GM (F) is Member Secretary to the Committee. 

 

Meetings and attendance of the Committee

 

The meetings of the committee are held generally on weekly basis or as and when required, and are attended by all the members.

 

Committee on Research & Development

Scope of the Committee

The Committee has been constituted by the Board of Directors of RVNL in accordance with the guidelines of Department of Public Enterprises (DPE) on 24.10.2011. The Committee has been constituted to monitor the progress of implementation of Research & Development, and system improvement initiatives in RVNL.

Composition of Committee: The Committee has been formed with  the following composition:

            Name of the Director

Status

 

Mr. R. S. Sharma, Part–time non–official (Independent) Director

Chairman

Mr. Vijay Anand, Director Project

Mrs Gita Mishra, Director Personnel

Mr. Ashok K Ganju, Director Finance

Mr. Mukul Jain, Director (Operations)                                                       

Member

Member

Member

Member

 

Mr. S.K. Dhiman, ED/Projects is Secretary to the Committee.

 

Meetings and attendance of the Committee

 

During the financial year 2013–14, the Committee had four meetings on 26.6.2013, 18.9.2013, 26.11.2013 and 25.3.2014.  The details of attendance are mentioned below:

 

Name of the Member with Status

Meetings held during their

 respective tenure

Attendance

Mr R. S. Sharma, Chairman

Mr. Vijay Anand, Director Project

Mrs Gita Mishra, Director Personnel

Mr. Ashok K Ganju, Director Finance

Mr. Mukul Jain, Director (Operations

 

4

4

4

4

4

 

3

4

4

3

4

 

Committee on CSR and Sustainability

 

As on date of report, the RVNL’s Board level Committee on CSR and Sustainability has the following composition:

 

 

 

 

Name of the Director

Status

 

Dr. S. S. Chatterji, Independent Director

Mrs Gita Mishra , Director (Personnel)

Chairman

Member & Convener 

Mr. Vijay Anand , Director Projects

Mr. Ashok K Ganju Director Finance

Member

Member

 

Shareholders’ Grievance Committee

The Company has not constituted a Shareholders Grievance Committee as the entire–paid up share capital is held by Ministry of Railways and its nominees.

General Body Meetings

The details relating to date, time, venue and the Special Resolutions passed at the last three Annual General Meetings of the Company are placed below:

 

 

Year

AGM

Date

Time

Venue

Special Resolution passed

2012–13

 

2011–12

 

 

2010–11

10th

 

9th

 

 

8th

18.09.2013

 

21.09.2012

 

 

16.09.2011

1200 hrs

 

1600 hrs

 

 

1200 hrs

Committee Room,

Rail Bhawan

 

Committee Room,

Rail Bhawan

 

 

Committee Room,

Rail Bhawan

No

 

 

No

 

Yes. A special resolution was passed for alteration of Articles of Association of RVNL under section 31 of Companies Act to reflect the increase in sitting fee to part–time (non–official) Independent Directors of RVNL.

Annual General Meeting of current year

           

            Date                 :           10th September, 2014

            Time                 :           1600 hrs

            Venue               :           Committee Room, Rail Bhawan, New Delhi–110001.

Subsidiary Company

 

High Speed Rail Corporation of India Limited is a 100% wholly owned subsidiary company of RVNL. Chapter 6 of the guidelines issued by Department of Public Enterprises in May 2010 on Corporate Governance cover only those subsidiaries, whose turnover or net worth is not less than 20% of the turnover/net worth of the Holding Company. Since, the turnover / net worth of HSRCIL did not exceed 20% of the turnover or net worth of RVNL (Holding company) during 2013–14, HSRCIL is not a ‘subsidiary’ under the above–mentioned DPE‘s guidelines. Therefore, provisions relating to subsidiary companies are not applicable to RVNL. However, the minutes of the Board meetings of HSRCIL, subsidiary of RVNL are invariably placed before the Board of Directors of RVNL.

 

Disclosures 

          The Company has not entered into any significant related party transactions with the Directors or their relatives (Disclosure made by Directors individually pursuant to section 299 of Companies Act) having potential interest with the Company at large. 

 

          The Company has not been imposed a penalty by any statutory authority owing to non–compliance under any law, during the last three years.

 

          The Company has complied with the guidelines on Corporate Governance issued by Department of Public Enterprises (DPE) released in May 2010. RVNL has been including a Report on Corporate Governance and Management Discussion and Analysis Report in its Directors Report since 2007–08. The compliance to these Guidelines was also reflected in the Chairman’s speech delivered at the last Annual General Meeting of the Company held on 18.9.2013.

 

          The Company has not received any Presidential directive during the financial year 2013–14.

 

          All items of expenditure debited in the Books of Accounts of RVNL are for the purpose of project execution entrusted to RVNL and are related to project expenditure.

 

          There are no personal expenses incurred for the Board of Directors except which are as per terms of appointment as contractual obligations.

 

          Details of Administrative and office expenses as a percentage of total expenses vis–à–vis financial expenses – During the year, Ministry of Railways has rationalised the revenue stream of RVNL. The principles of allocation of administrative expenses in RVNL are approved by the Audit Committee.  The percentage of administrative expenses to total expenses was 3.48 in 2013–14.

 

          Your Company has filed the report on Corporate Governance with the Ministry of Railways and Department of Public Enterprises in the stipulated time.

 

          The Company has set up a Risk Management Committee under the chairmanship of a Functional Director. The Committee meets on a quarterly basis and the recommendations of the Committee are put up to Board of Directors at regular intervals.   

 

CEO/CFO Certification

 

The certificate duly signed by Mr. S.C. Agnihotri, Chairman and Managing Director {CEO} and Mr. Ashok K. Ganju, Director (Finance) {CFO}, as presented to Board of Directors, is annexed as Annexure B–1 to the report.

 

Code of Business Conduct and Ethics

The Code of Business Conduct and Ethics as prepared in accordance with the guidelines on Corporate Governance released by Department of Public Enterprises is posted on the website of the Company, www.rvnl.org.

The Compliance of the Code of Conduct has been affirmed on the basis of confirmation received from all the Board members and senior management personnel for the financial year 2013–14. A declaration to this effect, duly signed by the Chairman and Managing Director is placed at Annexure ''B–2” and forms part of this report.

 

Rating on Corporate Governance by Department of Public Enterprises

 

Department of Public Enterprises has rated RVNL as “Excellent” under the category of Corporate Governance during 2012–13. On the basis of self evaluation of achievement of sector specific targets in the MoU, it is expected that RVNL will achieve an “Excellent” rating for 2013–14 also.      

 

Means of Communication

 

The audited annual financial results and Annual Report are displayed on RVNL’s website, www.rvnl.org. Tenders of various departments, details of tenders/contracts awarded, physical and financial Plan of RVNL along with other official news releases are also uploaded on the website of RVNL.

The policies and plans framed under Corporate Governance, viz., Code of Business Conduct and Whistle Blower Policy are placed on the Company’s website.  The information uploaded on the website of RVNL is updated from time to time according to the information provided. A Hindi Version of the website is also available. 

Shareholders’ Information

 

1.              The Company’s Financial Year is from 1st April to 31st March.

 

2.              Payment of Dividend: Dividend when declared is paid within 5 days of declaration.

 

3.              Distribution of shareholding

 

 

Category

              No. of shares held

       % of shareholding

Central Government (Ministry of Railways) in the name of President of India and its nominees

 

                 2085020100

 

 

 

 

            100

 

 

 

Total

                  2085020100

               100

 

Transfer of shares is normally technical in nature from one Government nominee shareholder to another upon change in incumbency, as the entire paid–up share capital of the Company is held by Government of India (Ministry of Railways). To affect the transfer, Company Secretary has been authorized and no transfer is pending.

 

4.     Plant locations/Operating units

 

RVNL does not have plant locations or operating units but has its Project Implementing Units in more than fifteen states across the Country. A list of the units has been mentioned in the Report.

 

5.     Information to Shareholders

 

Apart from the Annual Reports which are sent to shareholders before the Annual General Meeting, the periodical information(s) on the physical and financial progress of the Company are regularly submitted to Ministry of Railways, the sole shareholder of RVNL.

 

6.     Audit Qualifications

 

The Company has been putting all efforts towards ensuring a regime of unqualified financial statements and there have been no significant qualifications. 

7.              Training  of Board Members

 

In this regard, pursuant to clause 3.7 of the guidelines released by Department of Public Enterprises on Corporate Governance, the Company has framed a Training Policy for Board of Directors of RVNL, duly approved by the Board of Directors. The Policy is also posted on the Company’s website, www.rvnl.org.

RVNL also takes initiatives to train its Board members about RVNL’s profile, business parameters, etc. All the relevant issues and significant developments related to the working of RVNL are imparted to part–time Directors {(official) and (non–official), as the case may be} by the management of RVNL from time to time. The documents related to the Company including Annual Reports, Memorandum and Articles of Association, MoU between RVNL and Ministry of Railways etc are provided to them as per the requirement.

Director(s) are nominated on training programmes organized by DPE & SCOPE from time to time.

8.              Whistle Blower Policy

 

RVNL, being a Government Company under Ministry of Railways, is covered by the Chief Vigilance Commission (CVC) and  as per CVC guidelines, a mechanism is established or all its employees and clients to report on any unethical behaviour, actual or suspected fraud to the CVO or the Chairman and Managing Director directly.  However, to encourage best Corporate Governance practices within the Company, a Whistle–blower Policy of RVNL has been prepared and after approval of the Board of Directors, is placed on the Company’s website, www.rvnl.org.

 

No employee has been denied access to the Audit Committee of the Board of Directors.  

 

Compliance Certificate

 

A Certificate obtained from a Practicing Company Secretary regarding compliance of the conditions of Corporate Governance in accordance with the guidelines issued by Department of Public Enterprises has been included as Annexure– B–3 to the Report.

 

Annexure ''B–1

 

Declaration by Chairman and Managing Director regarding compliance with the Code of Conduct by Board Members and Senior Management for the Financial Year 2013–14

 

 

 

I, S.C. Agnihotri, Chairman and Managing Director, Rail Vikas Nigam Limited, do hereby declare that all the members of the Board of Directors and the Senior Management team of the Company have affirmed their compliance with the Code of Conduct and key values of the Company during 2013–14.

 

 

                                                                                                                           (S.C. Agnihotri)

Chairman and Managing Director

 

 

Place: New Delhi

Date: 18.06.2014

 

 

 

 

 

 

 

 

 

 

 

Annexure–B–2

Chairman and Managing Director and Finance Head Certification

We have reviewed financial statements and the cash flow statement for the financial year 2013–14 and to the best of our knowledge and belief:

i)         These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

ii)       These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

iii)      There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are illegal or violative of the Company’s code of conduct.

iv)     We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting. We have disclosed, to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls of which we are aware and the steps we have taken or propose to take or rectify these deficiencies.

v)                   We have discussed with the auditors and the Audit Committee

(b)     Significant changes in internal control over financial reporting during the year.

(c)     Significant changes in accounting policies during the year, and that the same have been disclosed in the notes to the financial statements; and

vi)     There was no instance of significant fraud of which we are not aware nor there has been involvement of management or an employee having significant role in the Company’s under internal control system over financial reporting.

 

                      S.C. Agnihotri                                                                           Ashok K. Ganju           

Chairman and Managing Director                                                               Director Finance               

 

Place: New Delhi

Date: 07.07.2014

 

 

Annexure – “C”

 

Corporate Social Responsibility (CSR) Report

 

 

CSR and Sustainability Policy

In accordance with the revised guidelines and directives issued by Department of Public Enterprises (DPE) in January 2013, RVNL has formulated its CSR and Sustainability Policy duly approved by the Board of Directors (BoD) of RVNL in January 2013.

 

Aims & objectives

CSR and Sustainability activities are being implemented to meet the following broad objectives underlined in the Policy:

 

1)       Implementation in project mode

2)       Focus on periphery of project areas of RVNL

3)       Education & health being thrust areas

4)       Inclusive growth of society with emphasis on development of weaker sections of society

5)       In the backward districts of the country

6)       Realization of UN Millennium Development Goals

 

Strategic partners

RVNL has already entered into a long term MoU on 17.11.2011 with Tata Institute of Social Sciences (TISS), nominated as a National CSR Hub by DPE, to provide necessary support in implementation of CSR activities in RVNL. RVNL is utilizing the services of specialized external agencies, NCSR Hub (TISS) and MoEF empanelled NGOs, Ramakrishna Mission etc for baseline surveys, needs assessment studies, preparation of project reports, implementation, monitoring, evaluation, audit and social impact assessment studies apart from involvement of the field level Committees for close monitoring, evaluation and feedback.

 

Reporting & disclosures

A comprehensive report on CSR & Sustainability activities of RVNL has been made in the Annual Report of RVNL for the year 2013–14. Also, with effect from 15.04.2013, a separate head of “CSR & Sustainability” has been created on RVNL’s website and all information related to CSR & Sustainability is being uploaded on the website on regular basis.

 

Organizational structure

As per the approved CSR and Sustainability Policy, RVNL has put in place a three tier organizational structure to steer the CSR and Sustainability agenda of RVNL:

 

1)         Tier–I, Board Level Committee, is headed by Independent Director.

2)         Tier–II, Corporate Level Committee, is headed by Executive Director (Mech), the Nodal Officer for CSR and Sustainability.

3)       Tier–III, PIU Level Committees, at the field level, is headed by respective Chief Project Manager of Project Implementation Units.

 

Board Level Committee

The Board Level Committee comprises of the following members (Reference Item No 89/13 of 64th Meeting of BoD of RVNL):

 

(a)     Prof. (Dr.) S. S. Chatterji, Independent Director, Chairman

(b)     Mr. Ashok K. Ganju, Director Finance, Member

(c)     Mr. Vijay Anand, Director Projects, Member

(d)     Mrs. Gita Mishra, DirectorPersonnel, Member

(e)     Mr. V. P. Dudeja, Part Time Official Director, Member 

 

Committee meetings

During the year 2013–14, the Board Level Committee held four meetings on 16.04.2013, 03.07.2013, 26.11.2013 and 30.01.2014. The minutes of these meetings have been uploaded on RVNL’s website.

 

Budget & expenditure

During the year 2013–14, ` 5.27 Crore has been spent on CSR & Sustainability activities, which is about 3.9% of PAT of ` 135.55 Crore for the year 2012–13 whereas the MoU target for 2013–14 is 2% of PAT, i.e., ` 2.71 Crore. As approved by BoD of RVNL, funds @3% of PAT of previous year, has been provided in the non–lapsable ‘CSR & Sustainability Fund’ during the current year, which is the maximum allocation vis–à–vis DPE’s guidelines of 2% to 3% for PAT above `100 Crore. Out of a total CSR & Sustainability expenditure of ` 5.27 Crore for the year 2013–14, 78% expenditure is on projects and balance 22% expenditure is due to professional charges made to NCSR Hub (TISS) and a contribution of ` 1 Crore made to the Chief Minister’s Relief Fund, Uttarakhand in view of unprecedented scale of devastation which had occurred in Uttarakhand.

 

CSR & Sustainability projects

Status on the various CSR & Sustainability projects being implemented during the year 2013–14 is briefly discussed hereunder.

 

1

The CSR project for providing hostel facilities for tribal boys in the backward District of Narayanpur in the state of Chhattisgarh has been successfully completed in March 2014 as per schedule. The hostel was inaugurated by His Excellency Governor of Chhattisgarh on 15th April 2014. The project has been implemented by the Ramakrishna Mission Ashrama, Narainpur at a total project cost of ` 3.8 Crore in two years (2012–14). ` 1.9 Crore was spent in 2012–13 and ` 1.86 Crore in 2013–14. The implementation of the project has been monitored by SEED, which is a NCSR Hub (TISS) empanelled NGO.

 

 

The CSR project is in the vicinity of Dallirajhara Raoghat new line construction project of RVNL being executed by CPM/ Bilaspur. The CSR project was sanctioned by the RVNL CSR Committee on 06.03.2012 and the project commenced on 01.04.2012. The project report was prepared by SEED and approval of NCSR Hub (TISS) was received on 29.02.2012. Implementing and monitoring agencies were appointed on 25.03.2012 (date of signing of MoU).

 

 

The CSR project will provide much needed residential hostel facilities to about 300 tribal boys from Abujhmarh area. Abujhmarh means the unknown highland and is inhabited by one of the primitive tribes called Madhia who have been very recently categorized as a “particularly vulnerable tribal group”. This inaccessible area of about 4,000 sq km, a tangled knot of hills and thick forests in Narainpur District of Chhattisgarh, is also dubbed as a liberated zone where only the Maoist writ runs and remains almost out of bounds for the Indian state.

 

Thus, as envisaged in the Need Assessment Survey Report by TISS, the hostel facilities will provide access to quality and value education to these tribal boys and thus, provide a sound platform for mainstreaming of these children and facilitate in meeting the Millennium Development Goals for achieving universal primary education. 

 

Extract of Needs Assessment Survey Report by NCSR Hub (TISS)

“The NCSR Hub team found that it is extremely important to support the activity of the Ramakrishna Ashrama, Narainpur where the intervention has multiplier effect. Role of RVNL can be important here for a longer support to the Ashrama. RVNL can also if finds possible can play the anchor within PSEs to create awareness about the Narainpur and Ashrama which the company is doing. RVNL has a unique opportunity to support the Ashrama in Narainpur. It should thus take an active interest in the socio economic development of Narainpur through the activities of Ramakrishna Ashrama as well as through their own CSR team. This can act as a guiding example of quality CSR intervention by the PSEs in the neediest areas of the country”.

 

 

2

The CSR project for education & development of under privileged differently abled children is being implemented in the backward District of South 24 Paraganas in the state of West Bengal.  The CSR project is being implemented by the Institute for the Handicapped and Backward People (IHBP), Kolkata for a total cost of ` 82 lakhs for a period of three years (2012–15). ` 22.5 lakhs was spent in 2012–13 and ` 27.2 lakhs in 2013–14. ` 32 lakhs has been allocated for 2014–15. IHBP, which is a NCSR Hub (TISS) empanelled NGO, is dedicated to the cause of education and development of underprivileged differently abled children. Project monitoring is being done by Tier–III Kolkata PIU CSR Committee. On 3rd December 2013, the international day of persons with disabilities, the implementing agency was given the state award in the category of outstanding institution working in the field of disability by His Excellency Governor of West Bengal.

 

The CSR project is in the vicinity of Joka–BBD Bagh new metro line construction project of RVNL being executed by CPM(M)/ Kolkata. The project was sanctioned by the RVNL CSR Committee on 06.03.2012 and the project commenced on 01.04.2012. The project report was prepared by IHBP and approval of NCSR Hub (TISS) was received on 29.02.2012. The implementing agency, IHBP, was appointed on 28.03.2012 (date of signing of MoU).

 

One hundred under privileged differently abled children having three types of disabilities, namely, 55 hearing impaired children (21 boys & 34 girls), 28 mentally challenged children (17 boys & 11 girls) and 17 children with cerebral palsy (14 boys & 3 girls) have been covered in the project. Education and development of these children are being done under the close supervision of well qualified and trained teachers with student to teacher ratio of 10:1 for hearing impaired, 6:1 for mentally challenged, 3:1 for cerebral palsy and dedicated support staff. Children have been provided with school uniform, books, notebooks, educational kits, medical aid, nutritious and quality meal. From the feedback obtained from parents, it is seen that parents are satisfied with the progress of the children and these children have immensely benefited with overall improvement in education, awareness and comprehension.

Extract of mid–term social audit report of NCSR Hub (TISS) February 2014

 

“Under this CSR initiative of RVNL, IHBP is giving quality service towards the differently abled children and society in general. This type of CSR initiative is special in nature as compared to other type of programs because RVNL is directly associated in sponsoring the complete education, training and health support to 100 differently abled children in a special school. RVNL is a very cooperating and supporting partner in this CSR project through close monitoring, periodical visits, interactions and follow up. In view of the very positive feedback and response received from the stakeholders, the audit team is of the opinion that RVNL should continue this CSR project for the betterment of the underprivileged differently abled children in the backward district and should continue this project for its sustainability on the long run”.

 

 

3

The CSR project for providing educational support to under privileged children & health support is being implemented in the backward District of South 24 Paraganas in the state of West Bengal and covers a population of about 85,000 people comprising 20% SC, 15% ST and 56% minority community in three Gram Panchayats of Bhangar Block comprising 52 villages. The CSR project is being implemented by Ramakrishna Math, Naora for a total project cost of ` 149 lakhs for a period of three years (2012–15). ` 18.2 lakhs has been spent in 2012–13 and ` 61.3 lakhs in 2013–14. ` 69 lakhs has been allocated for 2013–14. Implementation of the project is monitored by SEED, which is a NCSR Hub empanelled NGO.

 

The CSR project is in the vicinity of Joka–BBD Bagh new metro line construction project of RVNL being executed by CPM(M)/Kolkata. The project was sanctioned by the RVNL CSR Committee on 22.08.2012 and the project commenced on 01.10.2012. The project report was prepared by SEED and approval of NCSR Hub (TISS) was received on 19.06.2012. Implementing and monitoring agencies were appointed on 27.08.2012 (date of signing of MoU).

 

Health support is provided by a team of qualified doctors and medical staff and covers periodic health check up at ten centers along with free medicine, pathological tests & homeopathy treatment at Naora center, mobile medical service and health awareness camps. During the year 2013–14, 13443 patients were treated. Three hundred fifty under privileged children are given free coaching classes, physical training, sports, yoga training etc for 6 days in a week for overall development of the children at 3 centers. These children have been provided with uniform, school bags, books, notebooks, nutritious meal etc. From the feedback obtained from parents, it is seen that parents are extremely satisfied with the overall development of the children. Needy people from the villages have immensely benefited from the health support provided to them.

 

Extract of mid–term social audit report of NCSR Hub (TISS) February 2014

 

“At present RKM, Naora is imparting quality education for overall development and growth of 300 children belonging to underprivileged/ backward/ SC/ ST communities in the backward district, identified by Planning Commission (GoI) under CSR initiative of RVNL. Due to overwhelming positive response from the community, the number of children has steadily increased to 400. As suggested in the recommendations of the previous report, RKM has started new programmes, such as, computer literacy and spoken English classes. In the current study both these programmes have been found working and providing benefits to the beneficiaries. The teachers taking the tuition classes follow the same course pattern as followed in the school. Almost all the students have reported that the coaching classes have been very useful for the children to understand the subject and perform well. The nutritious food which is provided to the children is prepared by a group of local women. With this it can be concluded that the community is also involved in the process.

 

It cannot be denied that the services Math provides will go a long way in contributing to better health conditions in this area. For these long deprived communities, the health camps are a boon, as the nearest private hospitals are very far away. It has made these people come out of their houses and recognize the importance of a doctor’s diagnosis. When the NCSR Hub Team visited the clinics and interacted with the people, it was found that the mobile clinics are functioning well and are providing health services to the people. Qualified Doctors and paramedical assistants/nurses are looking after all these health centers. There is a great zeal and enthusiasm amongst the deprived and underprivileged people towards the CSR project. The audit team noted that RVNL has been a very co–operating and supporting partner in this CSR project through close monitoring, periodical visits, and interactions and follow up. In view of very positive feedback and impact the program has generated among the stakeholders, the audit team is of the opinion that RVNL should continue this CSR project for the betterment of the underprivileged children and people in the backward district and should continue this project for its sustainability on the long run”.

 

 

4

The sustainability project for providing solar home lighting system has been successfully implemented in the backward district of South 24 Paraganas in the state of West Bengal in five hundred households covering 13 villages in Bhangar–I and Canning–II blocks with 2W+2W LED lamps for two room households and 3W LED lamps for single room households. The project has been implemented by TERI for a total cost of ` 39.33 lakhs. Ramakrishna Math, Naora is the monitoring agency and sustainability partner for this project. Out of the project cost, an amount of ` 6 lakhs has been paid to Ramakrishna Math, Naora as sustainability fund.

 

 

The sustainability project is in the vicinity of Joka–BBD Bagh new metro line construction project of RVNL being executed by CPM (M)/Kolkata. The project was sanctioned by the Board Level Committee on 03.07.2013 and the project commenced on 01.04.2013. The project report was prepared by TERI. Implementing and monitoring agencies were appointed on 30.07.2013 (date of signing of MoU). The selection of households covered under the project has been made by TERI and Ramakrishna Math, Naora based on two criteria, i.e., non electrified area and for those who are sending their children to school so as to ensure that the project has the desired impact on the lives of the poor people.

 

Extract of mid–term social audit report of NCSR Hub (TISS) February 2014

“Solar home lighting systems has been successfully installed by TERI in 500 households belonging to the unprivileged and weaker sections of society in Bhangar Block & Canning–I Block in the Backward District of South 24 Parganas, West Bengal under CSR & Sustainability project of RVNL. It is heartening to note that solar home lighting system has replaced kerosene oil used for lighting. The records for the maintenance and usage of the Solar Lights in the houses have been maintained well by the representatives of the RKM. The local youths have been well trained to look after the maintenance and deal with the basic problems with regard to the solar lights. Most of the households agreed that the solar light have been very useful for them and is a helpful intervention. This project has proved to be a great boon to school going children who used to study under kerosene lamps. In view of positive impact and demand the stakeholders, the audit team is of the opinion that RVNL should identify more such households and continue the project in the year 2014–15”.

 

 

5

The CSR project for providing health support facilities to the under privileged people from the backward districts in the state of Uttarakhand is being implemented by Ramakrishna Mission Sevashrama, Kankhal for a total project cost of `5 Crore for a period of three years (2013–16). `50 lakhs has been spent in 2013–14. `2.25 Crore has been allocated for 2014–15 and `2.25 Crore in 2015–16. Project monitoring is being done by Tier–III Rishikesh PIU CSR Committee.

 

The CSR project is in the vicinity of Rishikesh Karnaprayag new line construction project of RVNL being executed by CPM/ Rishikesh. The CSR project was sanctioned by the Board Level Committee on 26.11.2013 based on project report prepared by NCSR Hub (TISS) and the project commenced on 25.12.2013. Implementing agency was appointed on 20.12.2013 (date of signing of MoU).

Ramakrishna Mission Sevashrama Hospital, Kankhal is a 150 bedded multi–specialty charitable hospital founded in 1901 to cater medical need of this region. Due to non–availability of hospital/ medical facilities, the under privileged people from backward Districts of Pauri Garhwal, Tehri Garwal, Chamoli, Champawat and Pithoragarh are availing the privilege of medical facilities of this hospital in addition to the people of Haridwar District. The CSR project envisages augmentation of health support facilities at its hospital, Kankhal in order to meet the increasing patient load. This project will involve construction of 4th and 5th floors in the existing OPD Building. The proposed 4th floor will have fully equipped operation theatres complex and 5th floor will have fully furnished 50 bedded post operative care ward. This augmentation will increase the capacity of hospital from 150 to 200 beds and also facilitate in handling additional surgeries. As per the proposed plan, the post operative care unit will resolve the issue of transferring surgical cases to adjacent building.

 

Extract of project report by NCSR Hub (TISS)

“Supporting the proposed CSR & Sustainability project will greatly increase the efficiency of the hospital and this, in turn, will help the under privileged section of the society in the backward districts of Uttarakhand to avail quality health services at affordable cost”.

 

 

6

The sustainability project for plantation of 13,727 trees near project sites has been completed at three project sites: 2,700 trees at Luni (Jodhpur) by CPM/Jodhpur; 3,000 trees at Cherlopalle (Chennai) by CPM/Chennai & 8,027 trees at Kantabanji (Raipur) by CPM/Raipur. The project was sanctioned by the Board Level Committee on 03.07.2013 based on the baseline survey and project report prepared by M/s EQMS, New Delhi, a MoEF empanelled organization and the project commenced on 01.04.2013.

HIGH SPEED RAIL CORPORATION OF INDIA LIMITED

(A Wholly owned Subsidiary of Rail Vikas Nigam Limited)

 

DIRECTORS’ REPORT

Distinguished Shareholders,

The Directors of your Company are privileged in presenting the 2nd Annual Report of the Company together with the Audited Statements of Accounts and Auditors’ Report for the year ended 31st March, 2014 (from 1st April, 2013 to 31st March, 2014).

President of India (Ministry of Railways) issued directions to Rail Vikas Nigam Ltd. (RVNL) for incorporating an SPV for development of High Speed Rail Corridors in the country.  Subsequently, RVNL incorporated High Speed Rail Corporation of India Limited (HSRC) on 25th July 2012 as its Wholly owned Subsidiary and the Certificate of Commencement of Business was received on 18th August, 2012.  The Company was formally launched by the then Hon’ble Minister of Railways, Sh. Malikarjun Kharge in a function held at Vigyan Bhawan on 29th October 2013. The Company has its registered office in New Delhi.

The main objects of the Company are to enter into and carry on all business related to planning, designing, development, construction, manufacturing, assembling, fabricating, processing, installing, maintenance, operation and financing of railway infrastructure and related logistic support systems, including rolling stock, of all types in India and abroad of High Speed Rail Projects and any other rail–based traffic, as may be approved by the Government of India or Rail Vikas Nigam Limited (RVNL) or any other Authority specifically created for this purpose from time to time, and to undertake any or all activities connected thereto, on PPP, EPC or any other scheme or model basis. 

Business Performance

After launching HSRC in October 2013, a pre–feasibility study for a dedicated High Speed Rail Corridor between Delhi–Chandigarh–Amritsar has been assigned to HSRC by Ministry of Railways. HSRC has also been entrusted by Ministry of Railways with the task to increase the maximum permissible speed on Indian Railways to 160 Km/h on three sections of IR i.e. Delhi–Agra, Delhi–Chandigarh and Delhi–Kanpur. Knowledge based support for the work of speed raising on existing tracks upgrading of infrastructure is in progress with HSRC as the project integrator. However, as these are at a planning stage the Company has not recorded any operating turnover during the year, and the Company is yet to commence its operational activities.

 

Financial Performance

The significant indicators of financial performance of the Company for the financial year from 01.04.2013 to 31.3.2014 are mentioned below:

S.No

Particulars

Amount (in Rs.)

 

1

Authorized Share Capital

5,00,00,000/–

2.

Paid–up share Capital

5,00,000/–

3.

Capital work in progress

1,83,447/–

4.

Total Income

8,877/–

5.

Operating Income

Nil

6.

Profit before Tax

(28,50,029/–)

7.

Net Worth

(30,95,247/–)

8.

Earnings Per Share

(57.00)

 

The expenditure incurred by the Company is on items related to preliminary expenses for setting up the Company and conducting of study.

Capital Structure

The Paid–up Share Capital of the Company is Rs. 5 lakh, against the Authorized Share Capital of Rs. 5 crore.

Dividend

Since the Company has not yet started its commercial activities, the Company has not declared any dividend for the year 2013–14

Fixed Deposits

The Company has not accepted any fixed deposits from public during the year under review.

Reserves

As the Company is yet to commence its operational activities and has not earned any income or profit, the Company has not transferred any amount to General Reserves.

Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo

 

The provisions of conservation of energy, technology absorption are not applicable to the Company.   During the year under review, there is no foreign exchange earnings or outgo.

Particulars of Employees under Section 217 (2A)

The Company has not employed any person whose particulars are required to be submitted in the report pursuant to provisions of Section 217(2A) of the Companies Act, 1956 and rules framed there under.

Buy–Back of Shares under Section 217 (2B)

The Holding Company holds all the shares in the Company and the Company has not resorted to any buy–back of its shares during the year under review.  As such, there is no item to report under Section 217 (2B) of the Companies Act, 1956.

Presidential Directive

No Presidential Directive was received during the year.

Integral Reports

 “Management Discussion and Analysis Report” and “Corporate Governance Report” form an integral part of this Director’s Report, which are placed at Annexure–I & II

Board of Directors

The Board of Directors consists of four (4) part– time Director nominated by the Holding Company, Rail Vikas Nigam Limited.  The Board met four (4) times during the year for transacting business.

The following Directors held office during the year:

Sh. S. C .Agnihotri                                 Chairman

Sh. Mukul Jain                                      Director

Sh. Ashok K. Ganju                               Director

Sh. Vijay Anand                                     Director

Directors’ Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956, Directors of the Company confirm that:–

(i)         in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departure from the same.

(ii)         the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit or Loss of the Company for that period.

 (iii)       the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv)        the Directors have prepared the annual accounts on a going concern basis.

 

Auditors

The Comptroller & Auditor General of India appointed M/s ASAP & Associates, Chartered Accountants as Company’s Statutory Auditors for the year 2013–14.  The Board would like to place on record their sincere thanks for the valuable services rendered by Statutory Auditors.

Comments Comptroller & Auditor General of India

The Comptroller & Auditor General of India has undertaken supplementary audit on the accounts of the Company for the year ended 31st March, 2014 under Section 619 of the Companies Act, 1956. The comments of the C & AG on the Annual Accounts of the Company for the year ended 31st March, 2014 shall also form part of this report.

 

Annexure – I

MANAGEMENT DISCUSSION AND ANALYSIS

An Overview

The company was incorporated on 25th July, 2012 as a Wholly owned Subsidiary (WoS) of Rail Vikas Nigam Limited, a schedule ‘A’ CPSE under Ministry of Railways.

Objectives

The main objects of the company are to enter into and carry on all business related to High Speed Rail Projects and any other rail–based traffic, as may be approved by the Government of India or Rail Vikas Nigam Limited (RVNL) or any other Authority specifically created for this purpose from time to time.

Financial Performance

The company has not recorded any operating turnover during the year, as the Company is yet to start its commercial activities.  The Company, however, earned an interest on deposits amounting to             Rs.8,877/–.

Strengths

The Company has been established as a wholly owned subsidiary of RVNL which has a large pool of technical manpower with a diversity of skills and vast experience of execution of rail related infrastructure projects in the country and developing innovative financial models for project financing. RVNL also has a vast experience of the contracting process and have introduced many new concepts such as multi–packaging etc.

Risks and Concerns

High Speed Rail projects are highly capital intensive.  The implementation of these projects will depend on specific policy directives of the Government of India. Innovative source of funding will have to be rapped for High Speed projects including bilateral and multilateral funding, Foreign Direct Investment, Public Private Partnership, etc.

Internal Control Systems

The internal control systems of the Company will be established with the taking up of operational activities.

Human Resources

The Company has no personnel on its rolls.  At present, all activities of the Company are being managed by personnel of RVNL as additional responsibilities/duties.

 Annexure – II

REPORT ON CORPORATE GOVERNANCE

1.         Company’s Philosophy on Corporate Governance

Initiatives are being taken to implement Corporate Governance principles and measures as contained in the Guidelines on Corporate Governance for Central Public Sector Enterprises May 2010 issued by the Department of Public Enterprises.

2.         Incorporation

The Company was incorporated on 25th July, 2012 as a Wholly owned Subsidiary of RVNL Ltd. with an Authorized Share Capital of Rs.5 crore and paid up share capital of Rs.5 lakhs.  The Holding Company, RVNL, holds the entire paid–up share capital of the Company.

3.         Board of Directors

The Board of the Company comprises of four directors namely Shri S. C. Agnihotri, CMD, RVNL, Shri Mukul Jain, Director (Operations), RVNL, Shri Ashok K. Ganju, Director (Finance), RVNL and Shri Vijay Anand, Director (Projects), RVNL.

The names and categories of Directors on the Board, number of Directorships and Committee Chairmanship/ Membership held by them in other companies are as under: 

S. No.

Name and Designation

Category of Directors Whole Time / Part Time

No. of other Directorship* (including HSRCIL)

No. of Committee Membership**

As Chairman

As Member

1.

S. C .Agnihotri

Part Time Chairman

2

2.

Mukul Jain

Part Time Director

2

1

 

3.

Ashok K. Ganju

Part Time Director

2

4.

Vijay Anand

Part Time Director

2

*    Does not include Directorship in Private Companies, Section 25 Companies and    Foreign Companies.

** Does not include Chairmanship / Membership in the Board of Committees other than the Audit Committee and Shareholders’/Grievance Committees.

 

 

 

 

3.1        Brief Resume of Directors

a.         Mr. S. C Agnihotri, Part–time Chairman (since incorporation i.e. 25.07.2012)

Mr. Satish Agnihotri has assumed the charge of Chairman & Managing Director of Rail Vikas Nigam Limited (RVNL) on 05.03.2013. Prior to this, he was appointed as Managing Director, RVNL. Mr. Satish Agnihotri, M.E. (Structures) and B.E. (Civil) from IIT, Roorkee, joined the Indian Railway Service of Engineers in 1984. Before joining as Managing Director of RVNL on 27.01.2010 he was working as Director (Projects) of the company w.e.f 4th July 2007. Before 4th July 2007, he headed the Metro Project Directorate of Ministry of Railways dealing with upcoming metro lines in metropolitan cities. While working as OSD to Member Engineering, he was involved in laying down the policies, standards, planning, implementation and monitoring of infrastructure projects all over Indian Railways. As Executive Director (Corporate Coordination) & OSD/Chairman Railway Board, he was engaged in substantive decision making in the Ministry of Railways. In his career, spanning over 24 years, he worked on important projects including construction of a double line bridge over river Ganga, doubling of tracks, major yard remodelings, etc. He worked on the Rajdhani Route of Allahabad Division, the most prestigious track on Indian Railways, as Maintenance Engineer progressively as Assistant Engineer, Divisional & Senior Divisional Engineer. He was largely responsible for raising the speed potential of Rajdhani route from 130 to 160/180 KMPH by upgrading the track geometry and strengthening of track. He was also deputed to Japan for undergoing training in Tunnel and Tunneling organized by Japan International Corporation Agency (JICA). Through UNDP, he was deputed to Germany, France and Austria for extensive training on maintenance of high speed track and upkeep of track machines. While working as Executive Director/Track Machine, he visited Germany, France, Italy and Russia as the team leader for development of high output track machines. Along with Chairman, Railway Board, he attended the Conference of Chief Executives of world railways in Japan, organized by UIC.

Mr. Agnihotri has also keen interest in sports and was adjudged as best in sport and studies amongst all branches of Engineering at IIT, Roorkee and was awarded Sarojini Naidu Cup for Work and Play.

b.         Mr. Mukul Jain, Part–time Director (since incorporation i.e. 25.07.2012)

Mr. Mukul Jain has taken over as Director (Operations) of Rail Vikas Nigam Limited on 16th June, 2010. He is a B.Tech in Mechanical Engineering from I.I.T. Delhi, and a Master of Engineering in Logistics & Supply Chain Management from Massachusetts Institute of Technology, Boston and Zaragoza Logistics Center, Spain. 

Mr Jain was the Executive Director in Container Corporation of India Ltd. (CONCOR), a PSU of Government of India prior to joining RVNL. He had joined Indian Railway Traffic Service (IRTS) in 1981. After working in various capacities in operating, commercial and general administration in SE Railway and Western Railway, he joined as Head of CONCORÂ’s Western Region in 1995. He then headed North Western Region of CONCOR from 2003 to 2006. He has worked as Head of Planning & Development, Air Cargo and Shipping in its Corporate Office, New Delhi. He specializes in transport strategy, design of Intermodal Terminals and hinterland port connectivity.

He has been credited with the establishment of highly successful Container Freight Stations in Mulund (Mumbai), Dronagiri Node( JNPT), Vadodara and at several other locations in Western India.He regularly delivers lectures on railways, containerization, logistics, SCM and other management subjects.

c.         Mr. Vijay Anand, Part–time Director (since incorporation i.e. 25.07.2012)

Mr. Vijay Anand an officer of 1981 batch of Indian Railway Service of Engineers, has taken over as Director (Projects) of Rail Vikas Nigam Limited on 9th April, 2011.   He is a graduate in Civil Engineering from Punjab Engineering College, Punjab University, Chandigarh.   He has held various responsible positions in Indian Railways and Delhi Metro Rail Corporation in maintenance and construction of Railway and Metro assets.  In his carrier, spanning over 29 years, he worked on important projects including construction of new Railway lines from Ernakulam – Allepey, Karur – Dindigal, Rohtak – Jakhal doubling.   He while working and Chief Engineer, Northern Railway, Kashmeri gate, was associated in various Common Wealth Game works related with Railways for construction of ROBs & RUBs in Delhi area, which includes Barapulaha Nalaha and Salimgarh Fort Underpass.

 He while working as Chief Project Manager in Delhi Metro Rail Corporation and subsequently as Director (Projects) in Delhi Metro Rail Corporation, has planned, designed, constructed and Commissioned of various Corridors of Delhi Metro Projects on Phase–I and Phase–II including Connaught Place – Dwarka, Shadhara – Dilshad Garden, Delhi University – Jahangirpuri, Inderlok – Mundka, Inderprastha – Noida, Yamuna Bank – Anand Vihar and Central Secretariat –Badarpur.

d.         Mr. Ashok K. Ganju, Part–time Director (since incorporation i.e. 25.07.2012)

Mr. Ashok K Ganju, has taken over as Director (Finance) of Rail Vikas Nigam Limited on 12th September, 2011. After completing B.A. (Hons.) History, M.A. Sociology from Delhi University, he joined the Indian Railways Accounts Service (1981 Exam).  He has worked in various capacities in the Railways in the Division, Workshop, Production Unit, EDP Centre, Traffic Accounts and Construction Offices etc. Prior to joining as Director (Finance), he worked as ED/Finance in RVNL from 31st August, 2007.  He has also been on deputation with Centre for Railway Information Systems (CRIS) and on Central Deputation to the Ministry of Social Justice and Empowerment, Ministry of Consumer Affairs and Food & Public Distribution.  He attended the 30th APPPA Course at the IIPA where he was awarded an M.Phil in Public Administration.

3.2        Number of Board Meetings with date and attendance at the Board meetings and Annual General Meeting

            The Board of Directors met 4 times during the year to discuss the operational activities of the Company.

S. No.

Name and Designation

Board Meetings During the Year

4th Board meeting– 14.06.2013

5th Board Meeting– 20.09.2013

6th Board Meeting –12.12.2013

7th Board Meeting –10.03.2014

Attendance at AGM

Held on 19th August 2013 at 15:00 hrs

Held During tenure

Attended

1.

Sh. S. C .Agnihotri

 

4

4

Yes

2.

Sh. Mukul Jain

4

4

Yes

3.

Sh. Ashok K. Ganju

4

4

Yes

4.

Sh. Vijay Anand

4

4

Yes

 

4.         Remuneration of Directors

            Part time Directors, nominated on the Board by the holding company, do not draw any remuneration from the Company.

            No sitting fee is paid to the part – time Directors.

5.         Code of Conduct

            All Directors of the company are whole–time Directors of the holding company, RVNL.  They have been following the Code of Conduct laid down by RVNL.

6.         Committees of the Board of Directors

            Audit committee, Remuneration committee etc will be constituted as and when the need arises.

7.         Annual General Meeting

The Annual General meeting of the Company was held on Monday, 19th August 2013 at 15:00 hrs at its registered office of the company, in accordance with the provisions of section 166 of the Companies Act .

8.         Means of Communication

All important information pertaining to the Company has been mentioned in the Annual Report of the Company containing inter–alia Audited Accounts, Financial Statements, Directors’ Report, Report on Corporate Governance which is being circulated to the members and others entitled thereto. 

Disclosure relating to amounts transferred to reserves

An amount of ` 10 crore has been transferred to General Reserves by appropriation from profits of the Company. After taking into account, the proposed Dividend of ` 31.50 crore and Dividend Distribution Tax of ` 5.56 crore, the balance under Reserves & Surplus at the end of 2013–14 stands at ` 452.94 crore in comparison to ` 332.59 crore in 2012–13.

Disclosures relating to dividends

As a result of improved financial performance of the Company, the Board of Directors have recommended a final Dividend of ` 31.50 crore for the year 2013–14 as compared to ` 27 crore in 2012–13 for consideration of the shareholders. The cumulative Dividend paid to Ministry of Railways by RVNL will amount to ` 114 crore, including the Dividend declared for 2013–14.

Details regarding energy conservation

RVNL is conscious of the limited nature of conventional sources and the importance of using our energy resources wisely. Initiatives taken to create awareness about conservation of energy among employees has resulted in steady reduction in energy consumption at Corporate Office. In addition, various state of the art systems have been installed and environment friendly technology has been adopted in the Corporate Office building.

Details regarding technology absorption

In addition, various state of the art systems have been installed and environment friendly technology has been adopted in the Corporate Office building.

Details regarding management discussion and analysis explanatory

Industry Structure and Development:

 

Over the years Indian Railways have emerged as the world’s fourth largest Rail freight carrier and largest passenger carrier.  It runs 12,617 trains carrying over 23 million passengers and 3 million tonnes of freight per day. It is the backbone of India’s transport infrastructure and the quality, capacity and the performance of Railways’ infrastructure is of crucial importance for the nation.   Experts have noted that the contribution of Indian Railways is around 1.2% of the GDP and that by 2020 it should reach about 3% to ensure sustainable economic development of the country. 

 

However, Indian Railways is presently faced with a critical infrastructure deficit as the main traffic carrying routes are saturated.             At the same time the road sector has developed significantly resulting in the steady increase in the share of traffic being moved by roads at the cost of the Railways whose share has reduced to less than 30%. Alarmingly, this is also true for the traditional bulk cargo of Railways such as coal, cement, steel etc.  On a wider perspective, reduction in traffic share is not in the national interest as the Railways are the most energy efficient and environment friendly mode of transport on land.

 

Due to serious bottlenecks on saturated lines, the Railways are also not in a position to meet the demand for additional passenger and freight raffic. At the same time there is a need to provide Rail connectivity to emerging ports, new mines, power plants etc.  The situation has been further compounded due to limited budgetary support in the past leading to inadequte funding of important infrastructure enhancing Rail projects.  To ensure that the Railways continue to play a vital role in the economic development of the country, it will have to focus on creation of additional capacity and provide vital links to new economic hubs.  

 

The present scenario of a severe resource crunch and the need for capacity augmentation is in fact similar to that faced by the Railways in 2002. At that time Prime Minister of India launched a non–budgetary investment initiative for the creation and augmentation of capacity of Rail infrastructure called National Rail Vikas Yojana (NRVY). RVNL was, in fact, created in this background with the specific mandate for fast track implementation of projects and raising of extra budgetary resources.

 

 Over the years, RVNL has successfully established its credentials for fast track delivery of Railway infrastructure projects. Initially RVNL had started with the execution of doubling, gauge conversion, new lines and Railway electrification projects. Having established itself in the area of project execution, the Company has now diversified and is executing projects of varied types including construction of Metro lines and workshops.  RVNL has also been assigned the technically challenging Rishikesh Karanprayag new line in Himalayas for execution. The alignment has now been finalised after detailed geo–technical and other studies. Recently another challenging project in Himachal Pradesh, namely Bhanupalli– Bilaspur new line, has also been assigned to RVNL for execution. RVNL is also emerging as a major provider in increasing the Railway Electrification network.

 

RVNL has also recognised the vast potential for building a High Speed Rail Network in the country and with the approval of President of India has formed High Speed Rail Corporation of India Ltd., as its subsidiary.  This initiative will ensure that RVNL will have a significant role to play in the delivery of high speed Rail infrastructure in the country while HSRC will plan for operating the system in partnership with global service providers on PPP basis.  A suitable financial model for implementing HSR projects will have to be formulated accordingly.

 

RVNL has been given a mandate for resource mobilization through extra budgetary resourses. Accordingly, it has played a significant role in the raising of funds for project implementation through the SPV route. RVNL has established five SPVs, which have generated substantial revenues with only a limited contribution of equity by Indian Railways.  To augment resourses, fresh avenues of further investment from critical stakeholders as well as funding agencies will have to be explored. In this regard the Ministry of Railways announced a new policy for Private Participation in Rail infrastructure which addresses the specific concerns of prospective partners such as ports, mines, industry and private investors.  However, presently the company’s role in raising EBR from market borrowings has been limited to projects financed by IRFC (as decided by Railway Board).

 

It is in this background that RVNL is poised to play an even more significant role in the ramping of Rail infrastructure in the country.  While the company has streamlined its tendering and project management processes, the major challenge that RVNL will face in the coming years is to reduce its dependence on allocation of funds in the Railway budget and to find innovative methods to raise extra budgetary resources for implementation of Rail related projects in the country. 

 

 

Rail Vikas Nigam Limited (RVNL) – A Synopsis

 

Rail Vikas Nigam Limited, a Public Sector Undertaking of Ministry of Railways, was created in 2003 under the National Rail Vikas Yojana (NRVY) to implement capacity augumenting Railway projects viz. gauge conversion, new line, doubling or third line through budgetary and non–budgetary resources to remove bottlenecks on the Indian Railways network, and to facilitate port connectivity and multimodal corridors to the hinterland on a fast track basis. With the assignment of metro works in Kolkata and construction of workshop projects, RVNL is emerging as a major provider of Rail infrastructure projects in fast track mode. 

 

 Working on turnkey basis, RVNL undertakes project development and implementation and has been mandated to undertake resource mobilization directly or by creation of project specific SPVs or any other financing structure, appropriate for various kind of projects. RVNL is supporting Ministry of Railways in strengthening the policy and regulatory framework of PPPs in the Railway Sector.

 

Strengths/Weaknesses / Opportunities/Threats

 

Strengths

 

      RVNL has successfully mobilized funds for the construction of new lines by creating project specific SPVs with strategic stakeholders. Its large capital base can be leveraged to raise more funds as per its original mandate.

      MoR has delegated the authority to RVNL for sanctioning of estimates and awarding contracts without any financial limits enabling RVNL to implement projects faster.

      As RVNL can award large value contracts, it has been able to attract the best infrastructure companies in India.

      It has developed expertise in undertaking all stages of project development – from concept to commissioning.

      RVNL has successfully mobilized funds for the construction of new lines by creating project specific SPVs with strategic stake holders. Its large capital base can be leveraged to raise more funds as per its original mandate.

      RVNL has developed the requisite skills and experience to follow ADB procedures and ensure Resettlement and Rehabilitation of Project Affected Persons to implement socio–economic safeguards.

      It has introduced large–scale mechanization in all aspects of construction to achieve high quality output.

      It has refined its tendering processes and introduced innovative concepts like multi–package tenders resulting in faster decision making and savings in overall costs

      It has a sound and robust financial management system, allowing for effective monitoring and control of expenditure

      It is a lean organisation with qualified, expert, technical manpower base.

 

Weaknesses

 

      RVNL is largely dependent on the Ministry of Railways for funding of projects which may prove detrimental for the future growth of the Company and for timely implementation of the projects.

      RVNL has not been notified as a Zonal Railway and accordingly does not have the authority to approve drawings, designs etc.

      The progress of projects often gets impaired on account of delays in securing the necessary approvals from the Zonal Railways.

      There are changes in approved plans by the Railways during execution of projects which causes delays.

      RVNL has to depend on Railways for granting of traffic blocks for execution of projects which may delay the project.

      RVNL does not have the freedom to plan execution of projects and has to follow priorities set by Railways.

      RVNL is dependent on MoR for approval of the projects to be taken up through SPV route along with terms of concession agreement.

      A large percentage of RVNL’s skilled manpower is on deputation from Indian Railways.  In case the terms of deputation that includes provision for retaining Railways accommodation becomes adverse, a number of deputationists may seek repatriation.

 

Opportunities

 

      RVNL can play a significant role in raising extra–budgetary resources for project execution as this is a specific mandate of the company and has experience of implementation of projects in PPP mode.

      With the work of implementation of Kolkata Metro projects, RVNL has developed expertise for implementation of metro projects in other cities across the country.

      RVNL has successfully constructed major workshops for Indian Railways in fast track mode. RVNL can thus undertake implementation of large buildings, factories, townships etc. for other agencies as well.

      With RVNL’s growth as a major provider of a variety of Rail infrastructure, there is an opportunity of securing Rail infrastructure projects overseas.

      RVNL is implementing Rishikesh – Karanprayag project in the Himalayan region and can also take up more such projects in hilly terrain.

      RVNL has formed a subsidiary company for the development and implementation of High Speed Rail projects – High Speed Rail Corporation of India Ltd. which can provide opportunities for:

––    Implementation of High Speed Corridors in the country

     upgradation of some routes for semi high speed operation as planned by MoR

     Providing Inter city high speed train connectivity such as Bangaluru–Mysore (130 km), Ahmedabad–Dholera (125 km)

 

Threats

 

      The shortage of technical manpower, with requisite experience in the Rail sector, is a major constraint in the delivery of projects. 

      At present, RVNL is largely dependent on deputationists from Indian Railways.  Any adverse policy decision may result in Railway officers not being available for deputation. 

      Land acquisition issues require to be resolved expeditiously so that the progress of projects is not hampered.

      Delays in clearances for project execution such as tree–cutting, removal of utilities from the construction of viaducts for metro Rail projects etc.

      A number of projects are being executed along existing running lines, which makes safety a serious challenge.

      Projects are adversely affected due to poor law and order conditions such as those in Left Wing Extremists affected districts.

 

 

 Industrial Relations

 

Industrial Relations remained harmonious and cordial.

 

Strategies

 

The Company is taking measures for ensuring cost control and timely delivery of projects, without any compromise on qualityfor the execution and delivery of Rail infrastructure projects on a fast track basis.  RVNL can play a significant role in Ministry of Railways efforts of raising extra–budgetary resources for project implementation, especially through the SPV route. Innovative models for project financing will also have to be explored.  RVNL has also requested Ministry of Railways that it may be permitted to leverage its equity base to raise funds from the market as per its mandate. 

 

RVNL has created a permanent cadre through absorption to provide institutional continuity and to reduce the dependence on seeking officers and staff on deputation from Railways.  Most of the workforce consists of qualified technical ataff with experience in Railways and/or its PSUs.  Wherever required, RVNL has also recruited specialists to provide expert guidance in its project implementation.

 

A comprehensive and appropriate training programme is being implemented to develop competent, suitably skilled and qualified manpower.  Efforts are also being made to transfer skills and best practices from other infrastructure sectors and acquiring skills related to execution of Railway projects.

 

The Mission, Vision and Objectives of the Company as per the MoU are mentioned below:

 

Mission

 

To create state of the art Rail transport infrastructure to meet the growing demand.

 

Vision

 

To emerge as the most efficient provider of Rail infrastructure, with a sound financial base and global construction practices, for timely completion of projects.

 

 

Objectives

 

·         To undertake and execute successfully project development, financing and implementation of projects relating to infrastructure, especially Rail infrastructure

·         To mobilize financial and human resources for project implementation;

·         Timely execution of projects with least cost escalation;

·         To maintain a cost effective organizational set up;

·         To encourage public private participation in Rail related projects managed by RVNL;

·         To be an infrastructure Project Execution Company committed to sustainable development and environment friendly construction practices of Rail related projects in the country;

·         To acquire, purchase, license, concession or assign Rail infrastructure assets including contractual rights and obligation with the approval of MoR whenever required.

 

Outlook

 

As per the MoU between RVNL and Ministry of Railways for the year 2014–15, RVNL is committed to achieve 200 km of Doubling/third line and 180 km of Railway Electrification during the year.

 

Concerns

 

The main concern being faced by RVNL in the implementation of projects is the availability of adequate funds from Ministry of Railways as the requirement of funds projected for 2014–15 would be higher for achieving the MoU turnover target of ` 2500 Crores. Insufficient funds, delays in land acquisition, finalization of plans by users, timely clearance of permissions from other government departments (mainly Ministry of Environment and Forests) and law and order problems and necessary support from Ministry of Railways are main concern areas in project execution. 

 

Internal Control Systems

 

Effective internal control systems have been put in place for monitoring the implementation of projects including periodic reviews of the physical and financial progress, evaluation of efficiency of cost control measures based on inputs of both the Technical and Finance Departments.

 

Reviews of the progress and nature of expenditure is regularly conducted by the Finance and Accounts Department and reports thereon are submitted to Management.  Budgetary reviews are also conducted.  A system of internal audit by an external firm ensures the efficacy of control systems and also submission of comments on the appropriateness of incurrence of expenditure and their accountal by the Company.  The reports of the internal auditor are periodically reviewed by Audit Committee of the Board of Directors and implementation of recommendations are monitored. The Annual Accounts of the Company are also subject to scrutiny by the Statutory Auditor appointed by CAG and Audit by CAG.

 

Human Resource Development and Industrial Relations

 

Rail Vikas Nigam Limited endeavors at enhancing the capabilities of the organization in acquiring, developing, motivating and retaining its human resources in an environment in which team work and cooperation among employees contributes to the growth and well being of individual employees as well as the organization as a whole. Emphasis is laid on employees maintaining work life balance.

 

To strengthen its position, the Company has formed a nucleus of its own permanent cadre through an Absorption Policy along with a Recruitment & Promotion Policy as approved by the Board of Directors of RVNL.

 

Cautionary Statement

 

Statements in the Management Discussion and Analysis Report describing the Company’s strengths, strategies, projection and estimates are forward looking statements and progressive within the meaning of applicable laws and regulations.  Actual results may vary from those expressed or implied, depending upon economic conditions, government policies and other incidental factors.  Readers are cautioned and not to place undue reliance on the forward looking statements.

 

Details regarding foreign exchange earnings and outgo

During the financial year 2013–14, the Company spent ` 44.22 lakh in foreign exchange on foreign travel of Company’s officials & ` 37.47 lakh on Project Management Consultancy. The Company, however, did not earn any Foreign Exchange.

Details regarding research and development

In accordance with the guidelines issued by Department of Public Enterprises, a Board level Committee headed by an Independent Director has been constituted. The Committee had four meetings during the year.

Particulars of employees as per provisions of section 217

None of the employees of the Company has drawn remuneration exceeding the limits laid down under the provisions of section 217 (2A) of the Companies Act read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

Disclosures in director’s responsibility statement

The Board of Directors of the Company in pursuance of section 217 (2AA) of the Companies Act, 1956 as amended hereby confirms: I. that in the preparation of the annual accounts, all the applicable accounting standards along with proper explanation have been followed and there has been no material departure; II. that such accounting policies were selected and applied consistently and such judgements and estimates were made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and Profit & Loss of the Company for the year ended on 31st March 2013; III. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. IV. that the Annual Accounts have been prepared on a going concern basis.

Director's comments on qualification(s), reservation(s) or adverse remark(s) of auditors as per board's report

The Company has been putting all efforts towards ensuring a regime of unqualified financial statements and there have been no significant qualifications.

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