texmaco rail engineering ltd share price Directors report

Dear Shareholders,

Your Directors have pleasure in presenting the 12th Operational Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31st March 2022.


(? in Lakhs)

2021-22 2020-21
Operating Profit (PBIDT) 13,526.29 12,808.04
Less: Interest (Net) 6,703.63 7,922.90
Gross Profit (PBDT) 6,822.66 4,885.14
Less: Depreciation 3,580.75 3,725.67
Profit before Taxation 3,241.91 1,159.47
Less: Tax Expenses
Current Tax including tax related to earlier years 75.59 (21.80)
MAT Credit entitlement (32.00) -
Deferred Tax Liability/(Asset) 1,368.87 (5.36)
Profit after Taxation 1,829.45 1,186.63
Add: Balance brought forward from previous year 10,902.36 10,117.37
12,731.81 11,304.00
Dividend paid (Incl.Tax) 250.34 224.83
General Reserve 200.00 200.00
Other Appropriations (3,762.10) (23.19)
Balance Carried Forward 16,043.57 10,902.36


Note: The above Figures are extract of the Audited Financial Statements prepared for the financial year ended 31st March 2021 & 31st March 2022.


Your Directors recommend payment of dividend of 10% i.e. INR 0.10 per equity share of face value of INR 1 each for the financial year ended 31st March 2022.

The Gross Turnover for the year stood at INR 18,144.16 mn. The Gross Profit for the year i.e. Profit before Depreciation and Tax (PBDT) and Profit before Tax (PBT) were INR 682.27 mn and INR 324.19 mn respectively. The Net Profit was INR 182.95 mn, after providing net tax liability of INR 141.25 mn for the year as per the Profit and Loss Account drawn up in accordance

with the Indian Accounting Standards as specified under the Companies Act, 2013 (Act). The Company has transferred INR 20 mn to Free Reserves during the year.


Whilst the recovery phase from the impact of COVID-19 was still in progress, the FY22 commenced tailing severe impacts of the pandemic ever experienced. The irreparable damages as incurred on human lives on account of shortage of oxygen in the hospitals and medical centres led to diversion of Industrial oxygen. The oxygen shortage along with intermittent lockdowns and restrictions posed a major challenge for your Companys operations during Q1 & Q2 of FY22.

As a responsible corporate, in its endeavour to provide a safe working environment, your Company conducted vaccination camps for safeguarding all its employees & their families and preventing the spread of COVID-19. While deploying the best precautionary practices and following regulatory protocols, your Company continued to put in its best efforts for streamlining the process and its operations to overcome the hindrances and achieve the desired results.

The Rolling Stock division of your Company, while continuously facing the different challenges throughout the year viz, intermittent lockdowns, shortage of oxygen, incessant seasonal rainfall, volatility in commodity prices and the shortage of wheelsets from Rail Wheel Factory (RWF), Bengaluru, still has been able to put up a fair performance for the year. Your Company is extremely thankful to its customers for their continuous support and patronage during these tough times.

Taking into consideration the long dues of the wagon manufacturing sector and in pursuit of developing a world class infrastructure, Indian Railways came up with one of its kind of procurement strategy and floated a tender for 90,000 wagons spread over a period of 39 months during March 2022. Your Company with its goodwill and your support is proud to announce bagging an order of 20,067 wagons valuing approx. INR 64,500 mn under the same. Meanwhile, taking COVID-19 in their stride and with able support of the Government, other business ventures in the freight movement sector also have opened up and they have started to expand their avenues under General Purpose Wagon Investment Scheme (GPWIS) and Container Train Operator (CTO). Your Company is also pleased to announce return of its footsteps in the African continent, thus corroborating its Global reach. With this, your Company shall be able to showcase its design capabilities of developing new products and cater the needs of larger market.

With the demand for wagons touching new highs, your Company is poised to strengthen its positioning in the sector by making a judicious split between its customers and the model mix to be produced while maintaining a healthy order book during FY23.

The Rail EPC Division of your Company too had a challenging start to the year due to COVID-19 related impact. After a slow start to the year, the Division has now been more focussed towards execution of ongoing projects. The focus of Indian Railways on Rail Infrastructure augurs well for the Rail EPC business of your Company.

The Steel Foundry Division of your Company is also looking forward to a robust start with COVID-19 impacts behind and the relaxations in the lockdowns and restrictions imposed. Fortunately, both division and export market demand are firming up and with the added capacity of the Urla unit, Raipur, new products for the domestic markets, especially in hand moulding segments have been successfully developed and well received by the customers, including critical castings for the Defence sector.

While COVID-19 prevention is now becoming a part and way of life, the volatile business and geo-political environment across the world pose a challenge for your Company to operate and to maintain healthy margins. With the closure of big orders, the focus is now shifting more towards their successful execution while managing finances. The infrastructure development push under various government initiatives along with the proposed

advancement in technology is also opening up various new business streams in the mobility and traction divisions, which your Company is now well equipped to garner. With streamlining of internal operations and processes, backed by a healthy order book size, your Company looks forward to a strong business and operational performance in FY23.


As required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the significant financial ratios are given below:

Particulars 2021-22 2020-21 2019-20
Net Profit Margin % 1.13 0.70 (3.59)
Operating Profit Margin % 4.95 4.14 5.62
Debtors Turnover Times 2.75 2.69 2.51
Inventory Turnover Times 4.84 3.99 3.71
Debt Equity Ratio Times 0.54 0.68 0.74
Current Ratio Times 1.86 1.56 1.42
Interest Coverage Ratio Times 1.48 1.15 1.65
Return on Net Worth* % 1.38 1.04 (6.41)


* During FY22, there is increase in Net Profit as compared to FY21.


Rights Issue

During the year, your Company had successfully completed Rights Issue. The Company had issued and allotted 7,15,26,643 Equity Shares of face value of INR 1 each by way of Rights Issue for an amount aggregating INR 164,51,12,789, in the ratio of 2 Equity Shares for every 7 Equity Shares held, to the eligible equity Shareholders of the Company as on the record date at an issue price of INR 23 per Rights Equity Shares (including a premium of INR 22 per Equity Share).

The Rights Issue had received a remarkable response from the Shareholders with over-subscription of approx. 1.35 times, both in retail & institutional category. The successful completion of the Rights Issue is a reflection of the Shareholders trust in the Company.

The funds raised by the Company through Rights Issue have been utilised for the objects stated in the Letter of Offer dated 20th October 2021, i.e. towards repayment of Inter Corporate Deposits and unsecured loans, funding working capital requirements & general corporate purposes.

Consequent to the allotment, the paid up capital of the Company has increased from 25,03,43,252 Equity Shares of INR 1 each to 32,18,69,895 Equity Shares of INR 1 each.


I. Rolling Stock Division

a. Freight Car & Coachings

The year began with a moderate order book position due to the ravaging pandemic severely affecting the economic outlook, more particularly the Infrastructure & Heavy Engineering organisation. The sufferings from the COVID-19 induced pandemic of previous year continued to impact this year too. The 2nd wave of COVID-19 created a dearth in Medical Oxygen availability and hence the Industrial oxygen supplies were totally choked, as saving the human life is the 1st priority for a civilised society. The manufacturing activities were further allowed to be carried out as per strict COVID-19 norms with newly imposed restrictions resulting in restrained shop activities. Your Company too was not able to ramp up the production for long periods because of restrictions imposed and severe shortages of skilled manpower due to the movement restrictions enforced by the administration. Your Companys performance was thus mainly impacted for a greater part of Q1 of FY22. Towards the later part of the year, although there was a slight improvement in COVID-19 situation, the workings continued to be affected due to shortage of Rail Wheelsets sourced from single approved source i.e. RWF, Bengaluru.

On the global front, the tensions across Europe too have had an impact on our working. The year saw a huge volatility in the market leading to great fluctuations in the commodity prices especially steel, that touched new highs and thereby causing pressure on the margins.

From 2nd half of the FY22, the economic activity started showing signs of recovery and demand for wagons for private sector too witnessed an upsurge. However, the availability of the wheelsets remains a challenge as the sole manufacturer in India, RWF has not been able to cater the demand of private sector. The current FY23 started on a very promising note with Railway under their new procurement strategy issued and finalised a wagon tender for 90,000 wagons, to be supplied in 39 months. Your Company has been awarded with an order of 20,067 wagons valuing approx. INR 64,500 mn, the largest ever single order received by the Company.

This year, your Company has been facilitated with some new initiatives which were taken up at higher realms of Ministry of Railway especially the New Wagon Design policy which will lead to introduction of new designs of

your Company on the railway network. In this regard, the Company is already working on a New Taller Wagon design for auto car carrier which it expects to introduce in FY23.

Your Company has maintained its status in meeting the requirements of Non-Indian Railways customers and during the year, have successfully cleared the prototype for 25T container carrier wagon. This will give us access to the emerging markets especially catering to customers operation on Dedicated Freight Corridor (DFC).

Your Company also made inroads in the Export market especially African continent with a privilege to be associated with customers of high repute, both in the Government and private sector.

The turnover of the Freight Car & Coachings during FY22 was INR 5533 mn.

b. Locomotive Components / Assemblies

The year began with a healthy order book position. The order book was expected to be strengthened with deliveries within the year which would have enabled the Company to maintain its performance for FY22. However, the same could not be fructified due to the pandemic in the beginning of year and the situation continued to be same till the second quarter of the year. The COVID-19 pandemic has badly affected the performance of the Division and it could supply only 28 nos. of loco shells during the year.

However, the situation is improving and your Company expects an improved performance during FY23.

As per National Rail Plan 2030, the total requirement of Locomotives would be about 16,800 till 2026 and the average yearly procurement plan is about 2,000 locomotives per year till 2026. Banaras Locomotive Works (BLW) plans to procure 450 nos. loco Shells for FY23, out of this, it has already floated tender for 267 locomotive. Chittaranjan Locomotive Works (CLW) plans CLW plan to procure 450 nos. loco Shells for FY23 and has already floated tender for 137 locomotive. Patiala Locomotive Works (PLW) plans to procure 300 nos. loco Shells for the FY23 and has floated a tender for 150 locomotive.

The turnover of the Electric Loco shells and Assemblies during FY22 was INR 248 mn.

II. Hydro Mechanical Equipment (HME), Bridge & other Steel Structures (BSD)

The HME division and BSD has achieved a turnover of INR 550 mn and INR 601 mn respectively. The performance of 1st half of FY22 was badly affected due to COVID-19 pandemic. The manufacturing and site activities started normalising only from 2nd half of the year.

Some of the major projects were completed during the year and now the work is going on in full swing on Subansiri Hydro Electric project and Mizoram - Assam Bridge project.

Performance of HME Division has shown signs of improvement during the FY22 and is expected to show improved performance in coming years.

III. Texmaco Hi-tech

The division continued to show improvement in its performance even under the challenging business conditions. The turnover of the unit during FY22 was INR 270 mn. The unit has become a reliable source for Alstom and GE / WABTEC for their requirements of E-Loco CBS Primary Parts and Diesel Loco Platform Kit Parts.

The performance of the unit is likely to improve further with all product approvals in place, demand stabilisation and ramp up of production activities. Addition of new customers/business will provide further impetus to our continued strategy of profitable growth through higher capacity utilization.


During the year, production & turnover of the division stood at 16,701 MT valuing total at INR 3360 mn.

Against the order received by the Company for wagons from Railways, there is a sizeable load on steel foundry division to supply bogies and couplers for the wagons to be produced by Heavy Engineering Division.

With the requirement coming, there will be a general bouyancy in the field of bogies & couplers and will be a rewarding challenge for the domestic steel casting foundries to meet it.

With the COVID-19 pandemic gradually subsidising, the demand of steel casting for Railway application, domestically & for export are showing clear signs of recovery and therefore, the foundry industry as a whole is looking forward for the better business during the coming financial years.

The real challenge is to maintain cost under leash in the background of all input prices for manufacturing of castings including that of scrap, ferro alloys, refractories and fluxes going up steadily. However, your Company is confident of better performance of the division during the FY23.


The overall performance of the Division during the FY22 was uniform as compared to previous year. However, this has to be seen in the context of challenges faced due to unprecedented increase in commodity prices putting extreme pressure on margins and growth. The repeated waves of COVID-19 pandemic which have adversely impacted sustained recovery and contributed towards disruptions in global supply chain has been a real dampener for the division. There were challenges of safety of employees as employees and construction sites needed to be maintained COVID-19 free, preventing any spread of infections by deploying adequate safety, hygiene and COVID-19 prevention protocols which although impacted the operating activities, but on a positive note were able to safeguard human resources.

Kalindee unit of the Rail EPC Division has put emphasis on completion of existing contracts in hand to improve working capital cycle of the business thus minimising the pressure on already stressed margins. This is expected to show positive results in coming years and improve cash flow from business going forward. During the year, the Company has completed certain major milestones in projects like Signaling & Telecom contract of Western Dedicated Freight Corridor (WDFC), Track laying work at Eastern Dedicated Freight Corridor (EDFC), Ballast less track work of Bengaluru Metro, etc.

The turnover of the Kalindee unit during FY22 was INR 5669 mn.

Rail Electrification

Bright Power unit of Rail EPC Division has been establishing their foot hold in newer areas other than main line Railway Electrification. The unit has during the year bagged order of INR 950 mn. Bright Power unit has been increasing their share of works in private sidings, refurbishment of substations and other railway installations which need specific expertise and precise experience. The units experience for the last three decades in the field is giving it an edge in making inroads in such areas.

Another new area of concentration is maintenance of existing network of rail electrification.

The unit has already completed maintenance works of railway assets for 300 Kmts successfully and it currently maintains 1200 track Kmts of railway assets in the State of Karnataka and Maharashtra. This is further going to increase in the coming years with Railways opening up this segment. In the conventional business, it has completed commissioning of railway safety inspection for 200 TKM and have completed their old contracts and handed over the commissioned sites to Railways.

It has now also started participating in bids for specialized projects outside India which will be an additional revenue stream in the further coming years.

The turnover of the Bright Power unit during FY22 was INR 1913 mn.


The subsidiaries / associate / joint ventures continues to contribute to the growth and overall performance of your Company.

A Report on the performance and financial position of each of the subsidiaries, associate and joint ventures as included in the Consolidated Financial Statement of the Company is provided in Form AOC-1 and forms a part of this Annual Report.

The Consolidated Financial Statements of the Company, its subsidiaries, associate and joint ventures prepared in accordance with the Act, and applicable Indian Accounting Standards and the Auditors Report thereon form a part of this Annual Report.

Following subsidiaries / associate companies were formed to identify emerging opportunities in the field of Rail, heavy industry and defence business and are working on determining suitable opportunities to commence its field operations.

i. Belur Engineering Private Limited

ii. Texmaco Transtrak Private Limited

iii. Texmaco Rail Electrification Limited

iv. Texmaco Engineering Udyog Private Limited

v. Texmaco Rail Systems Private Limited

The Equity Share capital of Texmaco Rail Systems Private Limited has been increased during the FY22 from INR 1,49,000 to INR 2,00,000.

vi. Texmaco Defence Systems Private Limited

vii. TexRail (SA Pty) Limited

During the year, TexRail (SA Pty), a wholly-owned subsidiary of the Company had ceased its operations and subsequently got deregistered.


i. Touax Texmaco Railcar Leasing Private Limited

The impact of the past years pandemic disruptions was indeed felt by the JV company. Though industrial production bounced back during the 2nd half of the year, it did not immediately translate into orders. The supply chains that were disrupted has re-aligned itself to normalcy.

This started to happen during the end of the year and it looks like the situation is back to normal. In fact, delayed purchase decisions are now sought to be pushed through which is a good sign for the JV company. Also, most industries are now building strategies to make up for revenues lost due to the disruptions caused by the pandemic.

The Rail Industry seems to have gained from the disruptions. The Government of India, Indian Railways and the trade in general have understood that at the time of crisis it is Railways which offers the most stable form of transport. There is also a clear emphasis to move more cargo back to the rail from road. The plan is to achieve at least 50:50 parity by 2030. This will call for the induction of hundreds and thousand of wagons. The Indian Railways has made a start with a large wagon order in the industry.

The JV company has now 17 rakes in operation and expects to sign for another few rakes in the first two quarters of FY23. The JV company expects to stay on top of the requirement for increasing bulk rakes in future. It expects to sign up for a large number of rakes in the coming 1-3 years. This however, is subject to industry being able to overcome a major disruption to trade in the form of shortage of wheelsets. All wheel sets produced by the only domestic producer, RWF, are reserved for Indian Railways production, putting all private operators in difficult situation. This is likely to put some serious setbacks to growth prospects.

The turnover of the JV company during the FY22 was INR 406 mn.

ii. Wabtec Texmaco Rail Private Limited

Wabtec Texmaco Rail Private Limited, the JV company, achieved a turnover of INR 362 mn during the FY22. The business and operations of the JV company got impacted during FY22 to a great extent due to the prevailment of pandemic situation.

The JV company was able to obtain the approval from RDSO for manufacture and supply of unlimited quantity of WD-71 Draft Gears during Q4, FY22. This will considerably strengthen the business prospects of WD-71 Draft Gears for the JV company during FY23. The supply of more than 6,000 nos. WD-71 Draft Gears to Indian Railways & major wagon builders has been completed during FY22 and well received by the market due to its recognised superior quality.

With the effects of the COVID-19 pandemic showing signs of reaching an end and the countrys economy reviving, the JV company expects to achieve a far improved business during FY23. The recent unveiling of the National Rail Plan-2030 by the Ministry of Railways, Government of India

where major investments have been lined up for the freight segment in the coming years with an aim to gradually increase the modal share of Indian Railways to 45% from the current 27% of the total freight market of India and the recent all time highest order against a tender of 90,000 wagons floated by IR will provide a further impetus to the JV companys business during FY23.


Your Company continues its endeavour to explore newer arenas of opportunities to expand its business and operations in the International Market. Your Company continued its excellent performance in exports amounting INR 1120.05 mn. Further, the recent re-emergence of your Company in the African market is a sign of promising future in the export field.

The Rail EPC Division of your Company is well poised to seize the opportunities in the export field.


A. Rolling Stock Division

Rolling Stock Division is focused on development of wagons meeting customer requirement and conforming to national/ international standards. This year, new wagons have been designed for the African market, viz:

i. The division has designed Gondola Wagon for carrying iron ore for client in Liberia. This wagon is 30t axle load standard gauge vehicle with rotary couplers. Design of wagon is done completely in-house using latest CAD/CAE tools and conforms to AAR (Association of American Railroads) specification. Weight optimisation has been done by use of high tensile strength material and FEA simulation.

ii. The division has designed Ballast Wagon for client in Mozambique. This wagon is 20t axle load cape gauge vehicle with side and central bottom discharge. Design of wagon is done completely in-house using latest CAD/ CAE tools and conforms to AAR (Association of American Railroads) specification.

iii. The division is working on new taller autocar wagon with innovative solutions for carrying wide range of cars and other automobiles.

B. Steel Foundry Division

The R&D Centre of the Company is registered and recognised by the Department of Scientific and Industrial Research (DSIR), Government of India. It carries out research and innovation for the development of various products & processes. It has helped

the Company to develop new products, improve product life through process innovations, develop light & efficient designs for higher and faster transportation of goods & specialised cargos. The metallurgical laboratory of our Company, an integral part of the R&D Centre, has already received ISO/IEC 17025:2017 certification from National Accreditation Board for Testing and Calibration Laboratories (NABL), which is approved by International Laboratory Accreditation Cooperation (ILAC).

a) New Product Development:

(1) A new design of bolster, two new designs of yoke castings, and three new designs of coupler have been developed for the North American market by unique metallurgical and process improvement.

(2) Two new designs of high wear resistance components have been developed for ground excavating applications, through unique metallurgical process improvement, characterised by high hardness as well as high impact toughness.

(3) Prototypes of 10 new components for above ground excavations have been developed by unique moulding process.

(4) A new grade with high abrasion resistance and low temperature impact toughness have been developed through unique alloy design and innovative heat treatment cycles.

(5) Prototype for weldable CMS crossing has been developed.

b) New Process Development:

The method design of several existing components have been modified to achieve substantial improvement with respect to solidity and surface finish, resulting in considerable cost saving.

Apart from the above, the R&D Division of the Company has also undertaken the following projects:

(1) Root cause analysis of pin hole and crack in certain components used for groundexcavating application. Subsequent corrective and preventive actions have considerably improved the quality of castings and reduced rejections.

(2) Root cause analysis of service failure of spring used in bogies.

(3) Microstructural analysis of Weldable CMS crossing.

(4) Root cause analysis of crack in the mouth region of yoke castings.


IT Department of your Company has provided a dedicated service in managing the task of business continuity despite the challenges thrown by COVID-19 pandemic with the intermittent restrictions and maintaining social distancing norms. The department worked tirelessly towards transition to the New Normal. The department focussed on digitising assets and systems to make resources efficient, workplace safer, as a result, transition in workplace from office to home to hybrid (Home-Office) was made possible. Despite working remotely, the department ensured that IT infrastructure were constantly monitored for compliance and are up to date with latest security practices. Security audits were conducted with various partners to plug gaps and loopholes which could be open to risk considering a sudden hybrid work environment. The Company is managing its business operations through Oracle ERP Applications.

In a New Normal way of life, implementation of cloud based Microsoft 365 and other virtual platforms & applications have enabled a hybrid work environment. Events such as Foundation day, Board meetings, corporate communication meets, Sales Meets, trainings, workshops etc., were successfully conducted with the help of IT Infrastructure and have enabled a new way of connecting with wide variety of stakeholders.


The past two years have been about struggles, challenges, opportunities, and perseverance. We can breathe a collective sigh of relief that hopefully the worst of this pandemic is behind us. It was far from a normal year, but we did rise to the challenge that COVID-19 pandemic presented us. This was possible as our people exemplified Dedication, Drive, Determination, and Discipline. Hence, the Company strongly believe that our employees and workmen are what makes the Company such a special place to work.

Human Resource function is hence committed to develop a high performing and positive culture for higher engagement and productivity.

We are committed to attract the right talent and skill aligned to our business goals. Performance management, learning and development, employee centric process are key to maintain the employee experience resulting in commitment and contribution to the organisational goals with hybrid and innovative ways of working.

We operate mindful of all regulatory requirements while employing and are an equal opportunity employer.

We shall continue our focus on our key asset - our people. While working strategically to recruit, develop, and helping people to reach their full potential, digital adoption, developing leaders of the future and empowered employees shall be the key to the journey forward.


The Government of India (GOI) continues its focus on investments in rail infrastructure, with the objective of reducing the logistics cost from 14% GDP to 7-8% GDP, in line with the global benchmarks. With this long term objective, the Railways Industry comprising of rolling stock, EPC and allied services, will continue to see investments growing year on year. This is also captured in the National Rail Plan of the Ministry of Railways. The GOI has also undertaken targets to reduce carbon foot print, which will result in more freight on rails and also increase in urban mobility through metro, light metro etc. Also, Indian Railways determined approach on building new DFCs will provide added business opportunity for growth & development of the business of your Company.

Considering the initiatives and emphasis by the Government, the prospects for your Company seem positive.

Railways focus on introduction of safety & security measures across India would further add windows of opportunities for the Company in the Rail segment.

Towards the end of the FY22, your Company participated in the mega-tender of 90,000 wagons, spread across 39 months. This is a great step taken by the GOI to offer long term visibility to the wagon industry. Your Company has managed to secure order for 20,067 wagons to be executed from FY23 onwards, which adds approx. INR 64,500 mn to our order book, loads our capacity for the next 4 years. This, along with good visibility on the private sector and Railways continued focus on improving infrastructure and open new avenues for private sector augurs well for the Company. The rising export demand for the steel castings too is going to support the business prospects of the Company.

The sluggishness in the global economy owing to the recent geo-political events and surge in inflation and commodity prices, continues to challenge the profitability of the Company. Despite the overall challenging situation, the Company managed to provide reasonable results and your Company, with improved efficiency in operations, is constantly working on newer possibilities to overcome any substantial impact.

The challenges faced in project implementation by the infrastructure segment company, putting their finances under tremendous stress would continue to be a challenge in the growth plan envisaged by your Company. Your Company would also face the operational challenge of executing the orders in hand, as the entire eco-system and supply chain will need to gear up for this challenge. Your Company is gearing up for the challenges and is confident of de-bottlenecking its operations to achieve record breaking performance year on year.


The COVID-19 pandemic has had a devastating impact on communities across India as it disrupted the socio-economic landscape of the country. It also impacted several years of developmental gains made in the last decade with respect to the 2030 Sustainable Development Goals. The Company has also witnessed a change and is now focused on reviving the business, in contrast to the pre-pandemic strategy focused solely on growth.

Despite the ongoing unprecedented situation, the Company continues to endeavour its philanthropic objectives to ensure welfare of the communities in particular and society as a whole. Be it in education and skilling, sustainability, healthcare, or women empowerment amongst others, the Company has been leveraging its scale and resources to support employees and communities amid the devastating impact of the COVID-19 pandemic.

To make a significant difference in this regard, Texmaco Neighbourhood Welfare Society, a philanthropic arm, continues to serve the society through its Health Hub facilities which include "Texmaco Arogyam Physio Centre", surrounded by green environs at the Texmaco Estate premises. The mission is to alleviate pain, restore health and build physical fitness with the aid of a team of skilled and experienced Physiotherapists. The Centre is well-equipped with the requisite technologically advanced equipment and supported by a modern Gym and an Alternative Therapy Centre in cheerful and pleasant ambiance. The Yoga Centre adds to the utility of the Hub.

Your Company lays special emphasis on extending support for higher education and employability enhancement program for the underprivileged sections of the society.

The Company continues to undertake the drive of campaigning towards general awareness for protection of the community against COVID-19 pandemic and has taken the initiative of vaccinating all its employees and their family members including the contractual workmen and associates.

The corporate philosophy is working together for common good, and your Companys employees are encouraged to volunteer their time and resource to experience the joy of giving back to the society.

The Company has in place a policy on Corporate Social Responsibility. During the year, the Board in consultation with the Corporate Social Responsibility Committee had reviewed and approved the revised policy to make it align with the recent changes / amendments.

The salient features of key changes includes Annual Action plan in respect of CSR expenditure, set off and carry forward benefits and reporting of CSR activties by the Board.

The weblink for accessing such policy is https://www.texmaco.in/ webfiles/doc/Investors Information/CSR POLICY TEXRAIL.pdf

The Company has spent in excess of the prescribed threshold under the Act on the CSR activities for FY22.

The Annual Report on CSR activities is enclosed as Annexure A and forms a part of this Report.


Your Company remains committed towards its endeavour to minimize its carbon foot prints and continues to embrace a sustainability initiative with the aim of going green and minimising the repercussion on the environment. Your Company had already adopted the green initiative by dispatching the Annual Report, Notices, other communications, etc., through e-mail to its Shareholders, whose e-mail address are registered with relevant Depository Participants / RTA / Company. Shareholders are requested to support this initiative by registering / updating their e-mail address for receiving Annual Report, Notices, other communications, etc. through e-mail. In view of the COVID-19 pandemic, the Ministry of Corporate Affairs (MCA) and the Securities and Exchange Board of India had issued relaxations from sending printed copy of Annual Report, Notice of the Annual General Meeting (AGM), etc. to the Shareholders for the AGM to be held in the year 2022.

With objective of supporting the Green Initiative and in view of the above-mentioned relaxations, your Company is dispatching the Annual Report & Notice of the AGM along with other documents required to be annexed thereto to the Shareholders through e-mail at their registered e-mail address. Such documents are also available on the website of the Company at www.texmaco.in

Further, those Shareholders who have not yet registered their e-mail address are requested to follow the procedure as mentioned in the Note to the Notice calling AGM to receive the Annual Report & the Notice of the AGM and other documents relating thereto through electronic mode and to enable their participation in the AGM.


The number of employees as at 31st March 2022 was 2114. In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is enclosed as Annexure B and forms a part of this Report.

Disclosures 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 are enclosed as Annexure C and forms a part of this Report.


Disclosures relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, are enclosed as Annexure D and forms a part of this Report.


Meetings of the Board

During the year under review, 6 (Six) Board Meetings were held on the following dates:

• 14th May 2021 • 15th May 2021
• 11th August 2021 • 11th November 2021
• 29th December 2021 • 7th February 2022

Criteria for Appointment of Directors and Remuneration Policy

The Nomination and Remuneration Committee has approved the criteria to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board of eminent Qualified Professionals, entrepreneurs with diverse backgrounds and experience in business, governance, education and public service. The criteria include the matrix of skills / expertise / competencies as specified by the Board for identifying individuals to serve as a Director on the Board.

Your Company has in place a well-defined Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company. The Nomination and Remuneration Committee periodically reviews the policy to ensure that it is aligned with the requirements under the applicable laws. During the year, the Board in consultation with the Nomination and Remuneration Committee had reviewed and approved the revised policy to make it align with the recent changes / amendments and in accordance with the current business scenario of the Company.

The salient features of key changes includes Performance linked compensation and segregation of authorities viz. Board / Committees.

The policy ensures equity, fairness and consistency in rewarding the employees on the basis of performance against set of objectives. The policy is available on the Companys website. The weblink for accessing such policy is: https://www.texmaco. in/webfiles/doc/Investors Information/REMUNERATION POLICY TexRail.pdf

Change in Directors and Key Managerial Personnel Re-appointments:

During the year, the re-appointments of Messrs D. H. Kela and A. K. Vijay as Executive Directors of the Company, were approved at the AGM of the Company held on 24th September 2021.

Appointment & Re-designations:

The Board of Directors (Board) on the recommendation of the Nomination and Remuneration Committee, had appointed Mr. P. S. Bhattacharyya, as Independent Director of the Company w.e.f. 1st January 2022 and had also approved re-designations of Messrs A. K. Gupta as Managing Director and Indrajit Mookerjee as Executive Director & Vice Chairman of the Company w.e.f. 1st January 2022. All these aforesaid appointments were approved by the Shareholders by way of Postal Ballot.


During the year, Messrs Sunil Mitra and A. C. Chakrabortti ceased to be Independent Directors of the Company w.e.f. close of business on 9th December 2021 and 7th February 2022 respectively in view of their resignations from the Board of the Company.

Further, the Board at its Meeting held on 12th August 2022 had approved resignation of Mr. A. K. Gupta, Managing Director (DIN: 07808012) w.e.f. close of business on 31st August 2022.

Retire by rotation:

Messrs Akshay Poddar, Non-Executive & Non-Independent Director and A. K. Vijay, Executive Director retire by rotation and being eligible, have offered themselves for re-appointment at the ensuing AGM of the Company.

Proposed Re-appointment:

The present tenure of Messrs A. K. Vijay and Indrajit Mookerjee expires on 31st December 2022 & 1st April 2023 respectively and in view of their visionary leadership and experience as well as valuable contribution, the Board on the recommendation of the Nomination and Remuneration Committee has approved their re-appointment for a period of 3 (three) years each, subject to the approval of the Shareholders.

The above recommendations of the Board are being placed at the ensuing AGM for the approval of the Shareholders.

Board Evaluation

Your Company has in place a Policy for performance evaluation of the Board, Committees of the Board and individual Directors, by fixing certain criteria, duly approved by the Nomination and Remuneration Committee and adopted by the Board. The criteria for the evaluation includes their functioning as Members of the Board or Committees of the Board, execution and performance of specific duties, etc.

A structured questionnaire, which cover various aspects of the Board functioning such as Directors strength and contribution, specific duties, obligations, etc. evolved through discussions within the Board, has been used for this purpose. Further, on the basis of performance review by Independent Directors at their meeting held on 9th March 2022 and recommendations of the Nomination and Remuneration Committee, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. Furthermore, the evaluation of the Independent Directors was performed by the Board. The evaluation criteria comprised assessing the various parameters including oversight and effectiveness of the Board, performance of the Directors, expertise /skills / competencies as possessed by the Directors in the context of the business of your Company, contribution to the strategic planning, etc.

Further, the Board ensured that the evaluation of Directors was carried out without the participation of the Director who was subject to evaluation.

Declaration by Independent Directors

All Independent Directors of your Company have given the declaration that they meet the criteria of independence as laid down under the Act and Listing Regulations.

The Board of Directors of your Company took on record the declaration submitted by the Independent Directors after undertaking due assessment of their independence from the Management. The Independent Directors of your Company have also confirmed their registration with the Independent Directors databank maintained by the Indian Institute of Corporate Affairs. The Independent Directors will undertake the proficiency test, as may be required, under the Companies (Appointment and Qualification of Directors) Rules, 2014.

The Board is of the opinion that all the Independent Directors possess the requisite integrity, expertise and experience (including the proficiency) to fulfil their duties to act as such.


Composition of Audit Committee

The composition of the Audit Committee is provided in the Report on Corporate Governance as attached to this Report.

Statutory Auditors

Messrs L. B. Jha & Co., Chartered Accountants, who had been appointed as the Statutory Auditors at the 19th AGM held in the year 2017 for a period of 5 (five) consecutive years hold office until the conclusion of the 24th AGM of the Company to be held in the year 2022. Messrs L. B. Jha & Co. will complete its present term on conclusion of this AGM.

The Board of Directors considering the experience and expertise and based on the recommendation of the Audit Committee, at its meeting held on 12th August 2022 has approved the re-appointment of Messrs L. B. Jha & Co., Chartered Accountants (Firm Registration No. 301088E), as the Statutory Auditors of the Company for a term of further 5 (five) consecutive years from the conclusion of the 24th AGM till the conclusion of 29th AGM to be held in the year 2027. The proposal for re-appointment of Messrs L. B. Jha & Co. as Statutory Auditors is being placed at the ensuing AGM for the approval of Shareholders.

Messrs S. S. Kothari Mehta & Co., the Branch Auditors for the Companys Rail EPC Business Unit - Kalindee Rail Nirman, who were appointed at the 19th Annual General Meeting (AGM) of the Company for a term of 5 (five) consecutive years would be completing their tenure at the ensuing AGM.

Messrs L. B. Jha & Co. have consented to the appointment as Statutory Auditors and confirmed that their appointment, if made, would be within the limits mentioned under Section 141(3)(g) of the Act and the Companies (Audit and Auditors) Rules, 2014. Further, Messrs L. B. Jha & Co. has also provided confirmation that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Cost Auditors

Your Company has appointed Messrs DGM & Associates, Cost Accountants, for conducting the Cost Audit for FY22 in terms of the provisions of the Act and the Companies (Cost Records and Audit) Rules, 2014.

The Board on the recommendation of the Audit Committee, at its Meeting held on 12th August 2022 has approved the re-appointment of Messrs DGM & Associates, Cost Accountants (Firm Registration No. 000038), as the Cost Auditors to conduct the Audit of the Cost Records of the Company for the FY23 at a remuneration of INR 2,50,000 (Rupees Two Lakh Fifty Thousand) plus applicable taxes and out-of-pocket expenses as incurred from time to time. The proposal for the ratification of the remuneration payable to Messrs DGM & Associates is being placed at the ensuing AGM for the approval of Shareholders.

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are made and maintained.


Secretarial Auditor

Your Company has appointed Messrs S. R. & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for FY22 in terms of the provisions of the Act & the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Listing Regulations.

The Secretarial Audit Report in Form MR-3 is enclosed as Annexure E and forms a part of this Report.

Whistle-Blower Policy

The details on the Whistle Blower Policy are provided in the Report on Corporate Governance as attached to this Report.

During the year, the Board of Directors in consultation with the Audit Committee had reviewed and approved the revised Whistle Blower Policy of the Company to make it align with the recent changes / amendments and in accordance with the current business scenario of the Company.


The Company has a proper and adequate system of internal controls, appropriate to the nature and size of the businesses. The designated system ensures that all transactions are authorised, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorised use or disposition. In addition, there are operational and fraud risk controls, covering the entire spectrum of internal financial controls. The system is commensurate with the size and the nature of operations of the Company.

The Audit Committee periodically reviews the internal control system to ensure that it remains effective and aligned with the business requirements of your Company.

The objectives pertaining to Risk Management are to monitor and review the Risk Management Plan of the Company including identification therein of elements of risks, if any, and such other related functions. The Company has in place a Risk Management Policy along with a comprehensive framework in order to mitigate the risks causing losses which might be incurred due to non-systematic attendance of certain issues. The Risk Management Policy which has been adopted by the Company has in its scope, the establishment of a process for risk assessment, identification of risks both internal & external, cyber security risk and a detailed process for evaluation and mitigation of risks and is reviewed periodically by the Audit Committee to ensure its effectiveness.

During the FY22, the Company has formed a Risk Management Committee, the details of which are provided in the Report on Corporate Governance as attached to this Report.


(a) There has been no change in the nature of business of the Company during the year under review.

(b) There are no significant and material orders passed by the Regulators / Courts / Tribunals that would impact the going concern status of the Company and its future operations.

(c) There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year and the date of this Report.

(d) The Reports of the Auditors do not contain any qualification / modification and hence no explanation is required.

(e) Share Capital Rights Issue

During the year, the Capital Issue Committee of the Company on 2nd December 2021 has allotted 7,15,26,643 Equity Shares at a price of INR 23 per Rights Equity Shares (including a premium of INR 22 per Equity Share over face value of INR 1 per Equity Share) to the eligible equity Shareholders of the Company under the Rights Issue.

Consequent to the aforesaid allotment, the paid up capital of the Company has increased from 25,03,43,252 Equity Shares of INR 1 each to 32,18,69,895 Equity Shares of INR 1 each.


The shareholders of the Company at the Annual General Meeting held on 4th September, 2018 had approved the Texmaco Employee Stock Option Scheme 2018.

The Board of Directors considering the present market price of the Equity Shares of the Company & slowdown in the world-wide economy during COVID-19 pandemic had decided not to proceed with the existing ESOP scheme.

(f) Deposits

During the FY22, the Company has not accepted any Deposit under the provisions of the Act.

(g) Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has in place an Internal Complaints Committee (ICC), formed in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder to promote safe & healthy working environment and to redress complaints received regarding sexual harassment. The ICC meets at regular intervals.

Further, your Company has a Policy on prevention of Sexual Harassment in accordance with the said Act and Rules.

During the year, no complaint was received by the ICC.

(h) Disclosure with respect to compliance of Secretarial Standards

The Company has duly complied with the necessary requirements of the Secretarial Standards relating to Board Meetings and General Meetings, as issued by the Institute of Company Secretaries of India.


Annual Return

The copy of the Annual Return in the prescribed format is available on the website of the Company. The weblink for accessing Annual Return is: https://www.texmaco.in/webfiles/ doc/annual report/AR21-22.pdf

Dividend Distribution Policy

Your Company has in place a Dividend Distribution Policy in line with the requirements of the Listing Regulations. During the year, the Board of Directors had reviewed and approved the revised Dividend Distribution Policy of the Company to make it align with the recent changes / amendments and in accordance with the current business scenario of the Company.

The salient features of key changes includes alignment of external & internal factors for distribution of dividend in line with the business scenario of the Company.

The weblink for accessing such policy is: https://www.texmaco. in/webfiles/doc/Investors Information/Dividend Distribution Policy.pdf

Corporate Governance

Report on Corporate Governance pursuant to the Listing Regulations is enclosed as Annexure F and forms a part of this Report.

Business Responsibility Report

Business Responsibility Report pursuant to the Listing Regulations is enclosed as Annexure G and forms a part of this Report.

Particulars of Loans, Guarantees and Investments

The details of Loans, Corporate Guarantees and Investments made during the financial year under the provisions of Section 186 of the Act have been disclosed in the Financial statements of the Company.

Related Party Transactions

All related party transactions during the FY22 were entered in the ordinary course of business and on arms length basis.

An omnibus approval from the Audit Committee for the financial year is obtained for the transactions which are repetitive in nature. All related party transactions are reported to and approved by the Audit Committee / Board. The details of such transactions were also placed before the Audit Committee and the Board for their review, on a quarterly basis. During the year, there was no material related party transaction entered into by the Company and as such disclosure in Form AOC-2 is not required.

The Company has in place a policy on dealing with related party transactions and the same is disclosed on the Companys website. The weblink for accessing such policy is: https://www. texmaco.in/webfiles/doc/Investors Information/RPTP.PDF

During the year, the Board in consultation with the Audit Committee had reviewed and approved the revised policy on dealing with related party transactions of the Company to make it align with the recent changes / amendments and in accordance with the current business scenario of the Company.


Your Directors state that:

(a) in the preparation of the Annual Financial Statements for the financial year ended 31st March 2022, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) relevent accounting policies are applied consistently and the judgments and estimates made 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) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Annual Financial Statements of the Company have been prepared on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

For and on behalf of the Board
Dated: 12th August, 2022 S. K. Poddar
Place: Kolkata Chairman

List of Enclosures to the Report of the Board of Directors

Annual Report on Corporate Social Responsibility Annexure-A
Particulars of Employees as per the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Annexure-B
Disclosure relating to Remuneration as per the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Annexure-C
Disclosures relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Annexure-D
Secretarial Audit Report Annexure-E
Report on Corporate Governance Annexure-F
Business Responsibility Report Annexure-G