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Updated:21 May, 2019, 15:59 PM IST

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Updated:21 May, 2019, 16:01 PM IST


Dear Shareholders,

The Directors are pleased to present their Eighteenth Annual Report and Audited Accounts for the year ended the31st March, 2015.

2. Company's Performance

The Company's financial performance during the year under review improved substantiallyas compared to the previous financial year ended March 31, 2014 with noteworthy increase in EBIDTA and Profit Before Tax despite the loss amounting to Rs.1710.15 lacs incurred due to 'onerous contract' for Wagons procurement by the Indian Railways, the Company's largest customer, as reflected in the Exceptional Items in conformity with the applicable accounting standards. Profit After Tax went up by 162.1% and Earning Per Share (EPS) at Rs.4.91 per share increased by 162.5% over the corresponding numbers in the previous fiscal. Turnover improved by 43.9% with EMU (Rail Coaches) contributing majorly to the to pline as well as bottomline and in fact the key performance indicators would have been significantly better had the order from Indian Railways been not so non–remunerative. Your Company's leadership in Rail Coaches, Defence Wagons, Bailey Bridges, Special Projects for the country's defence sector is manifested in the repeat orders for these special projects/products having been awarded to the Company. The contract by Metro Railway, Kolkata for refurbishment of Metro Coaches is under execution and should enable your Company's foray into manufacture of metro coaches in future. Having successfully exported wagons to neighbouring countries, the Company has finalised fresh orders to manufacture freight cars for other overseas markets. Further, the demand for custom designed wagons in the domestic market is firming up.

Recent entry into building of ships, trawlers and vessels including barges for the Indian Navy presents significant opportunities.

Your Directors are pleased to inform you that the Government of India has issued an Industrial License to your Company dated 1st July, 2015 for manufacture of various products for defence sector of the country and the necessary steps are being taken in this regard.

Your Company has, in July, 2015 successfully concluded acquisition of business and assets of a company in Italy engaged in the manufacture of inter alia Electric Trains, Coaches, Shunting Locomotives for which the Board approved investment of up to Euro 25 million. Your Company has set up a special purpose vehicle, Titagarh Firema Adler SpA in Italy for the said acquisition which makes Titagarh Wagons Limited the first Indian company to own the technology required for manufacture of metro coaches in India presenting huge opportunity in the segment. Overall the outlook appears to been couraging for improved performance during the current financial year.

Pursuant to the approval of shareholders, 15089025 equity shares of Rs.2/– each were allotted to Qualified Institutional Buyers on July 15, 2015ata price of Rs.99/41 per share i.e. at a premium of Rs. 97/41 per share (Issue Size: Rs.150 crores), which have been duly listed at the BSE and NSE. As a result of the said Qualified Institutional Placement (QIP), your Company's paid up capital has increased to Rs. 23,07,68,740/– consisting of 11,53,84,370 equity shares of Rs.2/– each full paid as on July 15,2015 thereby diluting the promoters' total stake by 6.94%. The QIP has inter alia paved theway for availability of larger floating stock at the bourses. The object of the amount raised by QIP is to augment infrastructural capabilities for expansion, pursue growth and combat competition both locally and globally.

3. Dividend

The Board of Directors has recommended a dividend of Forty percent i.e. Re. 0.80 per share on 11,53,84,370 equity shares of Rs. 2/– each fully paid up for the Financial Year under review subject to approval of the members at the ensuing Annual General Meeting.,

4. Business Segments


Average realization per unit declined by 11.2% even as production and sales volume at 770 and 854 units of Wagons increased by 12.2% and 14.9% respectively during the year under review and operating profit (PBIT) at Rs. 1693.89 lacs from the Wagons business was down 26.6% when compared to the corresponding numbers in the previous fiscal.

Despite various announcements in the annual Indian Railways ("IR") budgets of higher planned outlay, enhanced load carrying and obvious opportunities presented by distinctively cost effective movement of cargo by railway network as compared to roads, Wagons industry has been witnessing successive decline in the recent past mainly due to erratic schedule and low quantity of procurement by the IR compounded by unhealthy competition by way of predatory pricing by some of the private sector manufacturers rendering orders by the IR becoming non–remunerative. However, with the demand from private sector buyers for Wagons expected to improve, the outlook from this business is cautiously optimistic.


Eleven rakes of EMU (Coaches) were manufactured and despatched generating net sale of about Rs.12758 lacs and PBIT of Rs. 4140.50 lacs respectively which represents 33.9% of the total net sales and is more than the total EBIDTA of the Company during the year ended March 31, 2015. Metro Railways/Mass Rapid Transport System ("MRTS") in major cities across the country is essential to cater to the transportation needs of urban/semi urban commuters and the potential for self–propelled railway passenger vehicles such as EMUs, Main Line Electrical Multiple Units (MEMUs) and Diesel Multiple Units (DMUs) and metro coaches is huge.

The order for 12 rakes of MEMUs is under execution and benefits from it would flow during the current year. Heavy Engineering Division (HED) of the Company is equipped to turn out a fairly large number of Coaches per month and geared to promptly fulfill the requirement of Indian Railways. Various initiatives being taken by the Government for building "smart cities" in the country would further spur the demand for coaches which augurs well for this vertical.


The segment consists of other products viz. Heavy Earth Moving Machinery, Bailey Bridges etc. which represented less than ten percent of the total revenue on individual basis during the financial year ended March 31, 2015. Steel Castings business continues to contribute to captive consumption of vital components in manufacture of Wagons by the Company.

5. Risks and Concerns

The Company has laid down a risk management mechanism which is reviewed periodically. A Risk Management Policy to identify and assess the key risk areas, monitor mitigation measures and report compliance has been adopted. Based on the review, the following key risks have been identified :

Dependence on the Indian Railways

The Company's wagon manufacturing business is dependent upon the policies of Indian Railways and any change whether positive or adverse, has a direct impact on the Company's business and therefore, development of other verticals viz. special projects for defence, emphasis on securing orders for custom designed wagons for private sector in India and abroad, preparation for entry into metro coaches, expansion through inorganic route etc. through suitably aggressive policies has been undertaken by the Board to mitigate the risk.

Performance guarantee, product warranty and liquidated damages

Some of the contracts for supply involve warranty periods varying from 12–24 months against manufacturing defects notwithstanding the warranties on certain components extended by the respective third party suppliers; enforcement of these may not be always feasible. Further, certain contracts carry performance guarantee clause up to 10% of the contract value, valid for the duration of the warranty period, which can be invoked in the event of there being manufacturing defects that are not rectified by the Company to the customers's satisfaction resulting in loss of reputation.

Growth through organic and inorganic routes

Expansion of the operations and diversification measures undertaken by the Company inter alia, involve financial, managerial and other risks to precious resources in execution and loss of services of senior management personnel can affect the Company's plans to grow. Measures including succession planning have been kept at the core of approach to the Risk management frame work adopted by the Board.

6. Subsidiary Companies

A report containing the details required under Section 134 read with Rule 8(1) of Chapter IX Rules of the Companies Act, 2013 ('the Act') in respect of performance and financial position for the financial year ended March 31, 2015, of wholly owned subsidiaries: Cimco Equity Holdings Private Limited (including its subsidiary Cimmco Limited), Titagarh Capital Private Limited, Titagarh Marine Limited (including its subsidiariesviz .Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited),Titagarh Wagons AFR, France and Titagarh Singapore Pte. Ltd., Singapore; and subsidiaries: Titagarh Agrico Private Limited included in the Consolidated Financial Report (CFS) in the Form AOC–1 is annexed to this Report and marked as Annexure DR–1. The CFS is attached to the Annual Report and Accounts.

The Board has at its meeting held on August 12, 2015 accorded in principle approval to the amalgamation of the following wholly owned subsidiaries; Cimco Equity Holdings Private Limited, Titagarh Capital Private Limited, Titagarh Marine Limited, Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited with itself subject to compliance with applicable provisions of law.

7. Extract of Annual Return

The details forming part of the extract of the annual return in the Form MGT–9 are annexed and marked as Annexure DR–2.

8. Number of Board Meetings

The Board of Directors met Ten (10) times during the financial year 2015 as per the details provided in the Corporate Governance Report forming part ofAnnual Report.

9. Changes in Share Capital

Authorised Capital consisting of 9,60,00,000 equity shares of Rs.10 each was sub–divided into 48,00,00,000 equity shares of Rs.2 each and Issued, Subscribed and Paid up equity capital of the Company consisting of2,00,59,069 equity shares as at March 31, 2015 was split into 10,02,95,345 equity shares of Rs.2 each fully paid up on and from April 23, 2015 and increased to 11,53,84,370 equity shares consequent upon allotment of shares under QIP on July 15, 2015.

10. Loans, Guarantees and Investments

Particulars of loans, guarantees and investments made by the Company pursuant to the Section 186 of the Act are furnished under notes to financial statements.

11. Significant and material orders

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

12. Composition of Audit Committee

The Board has constituted the Audit Committee comprising Shri D N Davar as Chairman and Shri Sunirmal Talukdar and Shri Manoj Mohanka as the members and the details are provided in the Corporate Governance Report.

13. Related Party Transactions

All related party transactions (RPTs) are entered in compliance with the applicable laws and also in accordance with the policy on the subject adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the Listing Agreement and based thereon final approval of the Board is obtained. RPTs as approved by the Board during the financial year 2015 are disclosed in the Form AOC 2 annexed hereto and marked as Annexue DR–3.

14. Corporate Governance Report

The Company has complied with the corporate governance requirements under the Act and Listing Agreement. A separate section on corporate governance under Listing Agreement along with a certificate from a company secretary in practice confirming the compliance, is annexed to and forms part of the Annual Report.

15. Internal Control System

The Company has system of internal controls and necessary checks and balances which are being strengthened so as to ensure

a. that its assets are safeguarded

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

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

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

16. Vigil Mechanism

A fraud free and corruption free environment as part of work culture of the Company cannot be over emphasized and with that objective a Vigil Mechanism policy has been adopted by the Board and is uploaded on the web site of the Company at No complaint of this nature was received by the Audit Committee during the year under review.

17. Internal Complaints Committee

As per the requirement of Section 4 of The Sexual Harassment of Women At Workplace (Prevention, Prohibition and Redressal) Act, 2013 an Internal Complaints Committee has been formed by the Company, the details of which are given in the Corporate Governance Report. No complaint was been lodged with the Committee during the financial year 2014–15.

18. Directors


Shri N K Mittal, Non–Executive Director resigned from the Board w.e.f. 12th April, 2014 and Shri Nandan Bhattacharya, Shri Abhas Sen and Shri Aloke Mookherjea, Independent Directors ceased to be Directors of the Company w.e.f. 29th May, 2014.

Retirement by rotation

Shri J P Chowdhary, Executive Chairman retires by rotation pursuant to the provisions ofSection 152 of the Act and is eligible for re–appointment.


Shri Umesh Chowdhary's term as Vice Chairman & Managing Director (VCMD) ends on September 30, 2015. The Board at its meeting held on May 22, 2015 has subject to approval of the shareholders reappointed him for five years w.e.f. October 01,2015 at the remuneration approved by the Remuneration Committee and detailed in the Notice of ensuing Eighteenth Annual General Meeting.

Shri Shekhar Datta (DIN: 00045591), Independent Director and Shri Sudipta Mukherjee (DIN: 06871871), Director (Wagons Operations) were appointed as Additional Directors of the Company w.e.f. 12th April, 2014 and 15th May, 2014 respectively. Smt. Rashmi Chowdhary (DIN: 06949401), Non–Executive Director was appointed w.e.f. 14th August, 2014 in conformity with the regulations applicable to a listed company regarding appointment of woman director.

The information prescribed by Clause 49 of the Listing Agreement in respect of the above named Directors is given in the Notice of Eighteenth Annual General Meeting.

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

In compliance with the Act and Clause49 of the Listing Agreement, the performance valuation of the Board, Committees and Individual Directors was carried out during the year under review as per the details in Corporate Governance Report.

20. Declaration by Independent Directors

Declarations pursuant to the Sections 164 and 149(6) of the Act and Listing Agreement and affirmation of compliance with the Code of Conduct as well as the Code for Regulation of Insider Trading adopted by the Board, by all the Independent Directors of the Company have been made.

21. Remuneration Policy and remuneration

A policy approved by the Nomination and Remuneration Committee and the Board is followed by the Company on remuneration of Directors and Senior Management Employees, as per the details provided in the Corporate Governance Report.

22. Directors' Responsibility Statement

The Directors state that:

• Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31, 2015 have been followed in preparation of the said accounts and there were no material departures there from requiring any explanation;

• The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss statement of the Company for that period;

• Proper and sufficient care has been taken for maintaining 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;

• The Annual Accounts have been prepared on a going concern basis; and

• The Directors have laid down internal financial controls (IFC) to be followed by the Company and that such IFC are adequate and operating effectively.

23. Statutory Auditors

Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the Company were appointed at the 17th AGM until the conclusion of Twentieth AGM subject to ratification of their appointment at the AGM every year and the Board recommends the same.

24. Consolidated Financial Statements

In accordance with Accounting Standards 21,23 and 27 issued bythe Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of financial statements received from subsidiary companies as approved by their respective Boards, form part of this Report & Accounts. As regards the qualified opinion expressed by Statutory Auditors in their Report, while the Notes No. 15(a), 13(a) and 11 in the Notes on Accounts are self–explanatory, requiring no further specific response from the Directors at this stage, the subsidiary concerned has from out of three entities recovered from one of them the amount receivable during the year and the remaining recoverable amount aggregating Rs.2796.26 lacs is subject to ongoing legal proceedings which are being closely monitored and expedited to the extent within the Company's control.

25. Cost Auditors

Messrs D. Radhakrishnan & Co., Cost Accountants have been re–appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2015–16 subject to ratification of their remuneration by the shareholders in accordance with the provisions of Section 148of the Act and the Companies (Cost Records and Audit) Rules, 2014.TheCost Audit Report for the financial year ended 31st March, 2014 has been filed as stipulated by the applicable provisions of law.

26. Secretarial Auditor

Secretarial Audit has been conducted by Messrs Vanita Sawant & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR–4.

27. Fixed Deposits

The Company did not accept any deposits during the financial year ended March 31,2015.

28. Personnel

Human Resources

A. Empowering the employees

The Company considers its organizational structure to be evolving consistently over time while continuing with its efforts to follow good HR practices. Adequate efforts of the staffand management personnel are directed on imparting continuous training to improve the management practices.

B. Industrial Relations

Industrial relations at all sites of the Company remained cordial.

C. No. of Employees

Manpower employed as at March 31, 2015 was 628.

The Directors express appreciation of the efficient services rendered by the employees at all levels.

29. Particulars of Remuneration of Directors/KMP/Emplyoees

The disclosure stipulated by Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable.

Disclosure pertaining to Remuneration and other details as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure DR–5.

30. Employee Stock Options Scheme

Pursuant to approval of the shareholders, Nomination and Remuneration Committee at its meeting held on March 4,2015 in accordance with the TWL Employees Stock Options Scheme, 2014 (ESOS) extended 5,00,000 (Post Stock Split: 25,00,000) options to be converted into equivalent number of equity shares of Rs.2 each fully paid as per the ESOS.

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

A statement pursuant to Section 134 (3) (M)of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014on conservation ofenergy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR–6.

32. Corporate Social Responsibility

Corporate Social Responsibility (CSR) Committee constituted by the Board met on March 4, 2015 and after taking into consideration all the relevant aspects decided on pursuing promotion of education, enhancing vocational skills, child health and empowering of women and/or other similar or ancillary activities with emphasis on the local areas adjoining the Company's plants in Titagarh and pursuant to Section 135 of the Acta sum ofRs.121.58 lacs was earmarked for the purpose (CSR Amount). As the workon the aforesaid activities including identification of suitable land, action in connection therewith etc., is time consuming, the CSR Amount is yet to be spent. However, the Annexure stipulated in said section is attached marked as Annexure DR–

Apart from the above, your Company contributes inter alia by donations to the charitable institutions directly and through philanthropic organisations engaged in providing medical, education and other reliefs to the poor sections of the society. The campus of Industrial Training Institute (the "ITI") set up on your Company's land at Titagarh plant situate in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) with access to the tools, equipments and machinery together with experienced skilled officers as faculty provided by the Company imparts hands–on training. More than 400 students in various batches have passed and significant number of them engaged in various jobs in the industry. The ITI is recognised by the State Government as one of the best in the country and caters to the requirement ofskilled workmen by industrial units.

33. Listing

The Company's Equity Shares are listed at the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE). The listing fees for thefinancial year ending on March 31, 2016 have been duly paid.

34. Discussion on Financial Performance with respect to Operational Performance

To mitigate the risk factors referred to hereinabove impacting the operations, better manufacturing processes, improved productivity and focus on optimization of resource deployment are undertaken for a reasonable performance, viewed in the backdrop of the trends witnessed in the industries in which the Company operates.

35. Forward Looking Statement

The statements in this report describing the Company's policy, strategy, projections, estimation and expectations may appear forward looking statements within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events and the actual results could materially differ from those expressly mentioned in this Report or implied for various factors including those mentioned in the paragraph "Risks and Concerns" herein above and subsequent developments, information or events.

36. Acknowledgement

Your Directors place on record their appreciation of the cooperation and support extended by the Government, Banks/Financial Institutions and all other business partners.

For and on behalf of the Board


Executive Chairman

Date : August 12, 2015

Place : Kolkata