Kalindee Rail Nirman Engineers Ltd Merged Management Discussions

The new Government at the Centre after the general elections concluded in May this year has revived expectations for faster growth in economy, which has been sluggish for the last couple of years.

Infrastructure sector is the focus area of the new Government. In order to augment low cost funds from outside India, a reduced tax of 5% was also doled out in the erstwhile budget to foreign investors providing debt to key infrastructure projects such as aviation etc.

There is a special emphasis laid on the development of Rail Sector. The announcements pertaining to faster implementation of Dedicated Freight Corridors, Port and Coal connectivity projects augur well for the future of your company. The Management is also exploring all opportunities to enter the export market which is expected to yield positive results for the Company.

At the close of the year, your company had a comfortable order book at Rs.1400 Crore.

BUSINESS SCENARIO: OUTLOOK AND OPPORTUNITIES

In keeping with its aspirations for growth, the company intends to invest in new technologies and ventures to deliver long-term objectives and create value for its various stakeholders.

Foreign Direct Investments (FDI) in the Railway Sector will throw up new opportunities for your company to be involved in developing competencies in line with international practices. This will also help your company to penetrate in International markets in due course.

Your company has initiated aggressive cost control measures in the areas of raw material procurement, power, fuel etc. Senior Level cross functional teams have been instituted to monitor and implement the above. The Company remains cautiously optimistic in its outlook, and expects to be well positioned, maintaining its competitive ability in the various growth segments.

Change of Promoter Group

There was an attempt of hostile takeover bid for the Company during the year under review. In view of said potential threat your Company raised capital by way of preferential allotment of 41,10,400 no. equity shares to M/s Texmaco Rail & Engineering Ltd (Texmaco). Post-acquisition of the then promoter group shares and conclusion of an open offer by Texmaco and the other hostile bidder, Texmaco become the promoters of the Company with effect from December 2013.

Texmaco is a renowned name in railway sector and is Group Company of Adventz group. The association of Texmaco, is intended to act as a catalyst and game changer for the fortune of stakeholders of Kalindee.

With new management and Texmaco’s technical strength and its existing large customer portfolio across various segments of Railway and Infrastructure sector, your company is expected to continue its robust journey towards progress and growth. Opportunities and Threats

With the thrust in development of infrastructure in the Rail sector, there are exciting opportunities for your company in the technically complex railway systems, such as Signaling and Ballastless track. Your company is re-training its manpower to upgrade the skill levels in order to participate, win and execute technologically challenging upcoming projects in the field.

With opening up of the sector to FDIs, there will be new technologies coming into the market. The company will be faced with the challenge to position itself to get into these technologically intensive fields successfully, imbibe the technology and ascend to become a technology major.

Human Relations

The Company sees relationship with the its employees as critical to it’s future growth. It has to manage the change by creating a congenial vibrant working environment atmosphere for individual growth, creativity and dedicated participation in organizational development. In-house and external training programmes are arranged for the employees at all levels, encompassing simulator based trainings, workshops & conferences etc. This would help promote a professional and productive culture by a blend of technology and high skills.

In view of the substantial operations of the company in the highly technical field of Railway Signaling, a special induction programme has been organized to train youngsters in this field where your company has been a pioneer and market leader. An essential part of managing human resources is ensuring high employee retention levels with excellent workmanship and application. The company has got one of the best retention profiles in the industry.

CORPORATE SOCIAL RESPONSIBILITY

Social responsibility is the core value of the Company. There is an effective plan developed by the company to mitigate the negative environmental and social impacts in executing new projects, as well as, the existing ones.

It is well appreciated in the Company that uncontrolled use of natural resources such as water and energy has led to irreversible damages to the environment, which has affected life and well-being of the future generations including various species as well. It has accordingly undertaken several initiatives to conserve water at each of its work locations and exercise extra precautions in discharge of effluents in environment as the case may be.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Director state:

(a) That in the preparation of the annual accounts, applicable accounting standards were followed along with proper explanation relating to material departures, and the notes in the Auditors Report in this regard are self-explanatory;

(b) That such accounting policies were selected and applied consistently and judgments and estimates made 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 and loss of the company for that period;

(c) That proper and sufficient care was taken to maintain 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;

(d) That the annual Accounts were prepared on a "going concern basis".

Green Initiatives

Your Company aims to start a sustainability initiative with the aim of going green and minimizing the impact on environment. Your Company is therefore, proposing to send Annual Report,, Notices etc. through e-mails to the Shareholders, whose e-mail IDs are registered with their Depository Participants with effect from 01.10.2014 In case a Shareholder wishes to receive a printed copy, he/she may please send a request to the Company, which will send a printed copy of the Annual Report/Notices etc. to the Shareholder. Members are requested to support this initiative by registering / updating their email addresses for receiving Annual Report, Notices etc. through e-mail.

Particulars of Employees

The number of employees as at 31st March, 2014 was 419. Since none of the employee is drawing remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956 read with the Companies ( particulars of employees ) Rules 1975 , the disclosure of information is NIL.

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

( a ) Energy conservation measures taken :

Major energy conservation measures have been carried out via usage of more sophisticated machinery which can do higher value of work in lesser time and thereby reducing the requirement of equipment and also maximize savings in two specific areas:

• Electric Energy

• Fuel oil consumption

In our industry 99% equipment are powered by either electrical motor or by fuel oil powered engines. Since most of our work is carried out in remote locations and is subject to harsh environmental conditions, the rate of depreciation is very high. Energy efficiency is ensured thorough well planned actions such as good quality preventive maintenance, machinery up gradation, modernization and introduction of sophisticated and better control system. Fuel oil consumption has been reduced by implementing various preventive maintenance measures and introducing new efficient engines coupled with newer machines and reducing idle running of equipment.

( b ) Additional investment and proposals , if any , being implemented for reduction of consumption of energy:

Continuous additional investments are made in phases to replace older machinery with more sophisticated and more fuel efficient ones. The replacement theory is applied in repairs and renewals where good quality genuine spares are used to provide best service performance with least wastage of resources like oil and energy.

( c ) Impact of the measures ( a ) and ( b ) for reduction of energy consumption and consequent impact on the cost of production :

The company has been able to reduce electrical energy and fuel oil consumption. Though it is not possible to quantify the impact, the measures are expected to result in considerable savings.

Foreign Exchange Earnings and Outgo

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services:

Continued drive is being made to increase exports and to develop new export markets in the field of Railway EPC.

b) Total foreign exchange used and earned:

• Used: Rs. 1726.06 Lacs

• Earned: Rs. 1571.60 Lacs

Directors

Shri Hemant Kumar has been appointed as additional Director of the company w.e.f 27.12.2013, Shri Sandeep Fuller has been appointed as Managing Director of the company w.e.f 07.02.2014.

Mr. Ram Dayal Sharma, erstwhile CMD of the Company met with an accident and passed awauy on 18^th January, 2014. Further Smt. Kalpana Gemini and Smt. Sunita Gemini, Directors of the company resigned from their positions w.e.f 27.12.2013. Besides this no other change in Directorship has happened in the Company during the year under report.

Statutory Auditors

M/s Amit Goyal & Co., Chartered Accountants, Jaipur, the retiring Auditors, are not being reappointed and accordingly based on the recommendation of Audit Committee alongwith Special Notice received by M/s Texmaco, M/s S.S.Kothari Mehta & Co., Chartered Accountants, New Delhi are proposed to be appointed as Statutory Auditors of the Company for a period of 5 years.

Subsidiaries

Your Company does not have any subsidiary Cash Flow Analysis

As stipulated in clause 32 of the listing agreement, the consolidated financial statements were prepared by the Company in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the same together with the Auditors Report thereof form part of the Annual Report.

Acknowledgements

Your Directors would like to express their appreciation for the assistance and the cooperation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

	For Kalindee Rail Nirman (Engineers) Limited
Dated : :: October 13, 2014	By order of the Boardard of Directors
Place : :: Gurgaon
	Sd/ Sd/Sd/- --	Sd/ Sd/Sd/- --
	Hemant Kumar	Shanti Narain
	Director	Chairman & Director
	DIN : 0359980 011 00	DIN : 00233438