Texmaco Rail & Engineering Ltd Directors Report

Dear Shareholders,

Your Directors have the pleasure in presenting the 14th Operational Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31st March 2024.

FINANCIAL HIGHLIGHTS

(Rs in lakhs)

	2023-24	2022-23
Operating Profit (PBIDT)	28,783.78	13,481.87
Less: Interest (Net)	7,394.88	7,107.30
Gross Profit (PBDT)	21,388.90	6,374.57
Less: Depreciation	3,518.73	3,502.91
Profit before Taxation	17,870.17	2,871.66
Less: Tax Expenses
- Current Tax including tax related to earlier years	2815.05	-
- MAT Credit entitlement	(1,357.00)	(46.08)
- Deferred Tax Liability/(Asset)	5143.11	934.08
Profit after Taxation	11,269.01	1,983.66
Add: Balance brought forward from previous year	17,489.05	16,043.57
	28,758.06	18,027.23
Appropriations
Dividend paid	482.81	321.87
General Reserve	200.00	200.00
Other Appropriations	(7.37)	16.31
Balance Carried Forward	28,082.62	17,489.05

Note: the above figures are extract of the Audited Financial Statements prepared for the Financial Year ended 31s March 2023 & 31s March 2024.

Dividend

Your Directors recommend payment of dividend of 50% i.e. 0.50 per equity share of face value of Rs 1 each for financial year ended 31st March 2024.

The Turnover for the year was Rs 348864 lakhs. The Profit before Depreciation and Tax (PBDT) and Profit before Tax (PBT) for the year were Rs 21388 lakhs and Rs 17870 lakhs respectively. The Net Profit was Rs 11269 lakhs, after providing net tax liability of Rs 6601 lakhs 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 Rs 200 lakhs to Free Reserves during the year.

MANAGEMENT DISCUSSION AND ANALYSIS

Overview of the Industry

Among the major nations of the world, India achieved the highest GDP growth for FYRs 24, further strengthening its position as the fastest growing major economy. According to the IMFs report World Economic Outlook (January 2024), India is projected to remain the fastest growing major economy in

both CYRs 24 and CYRs 25. Additionally, consumer price inflation (CPI) has moderated significantly and the current account deficit (CAD) has also decreased. These reaffirm that the Indian economy is in a favorable position and is by far the fastest growing major economy in the world. Given this encouraging macroeconomic scenario, it is not surprising that consumer sentiment has strengthened. Consequently, your Company has achieved its best performance to date.

Indian Railways achieved an all-time high freight loading of 1588 MT in FY 24, up from 1095 MT in FYRs 15, with a target of reaching 3000 MT by 2030. Total receipts for FY 24 were Rs 256093 crore, generating a net revenue of Rs 3260 crore to support capital expenditure. The budget allocated Rs 252200 crore for capital expenditure, maintaining the previous years focus on infrastructure development. An additional Rs 10000 crore was sourced from extra-budgetary resources with continued focus on infrastructure development.

The Government of Indias strong emphasis on increasing the modal share of rail in freight has opened a multi-year opportunity for wagon manufacturers, particularly for your Company. With its diverse range of offerings, long-standing track record, advanced infrastructure, and technical collaborations with global partners, your Company is well- positioned to capitalize on these emerging opportunities.

Texmaco Business - An Overview

After a challenging few years, your Company is undergoing a significant rejuvenation, driven by:

i) surging railway capex

ii) robust wagon ordering; and

iii) net cash balance sheet, which has improved execution, margins and working capital trajectory. With a legacy dating back to 1939, your Company is one of Indias most experienced and a proven leader in the manufacturing and supply of Freight Cars and Rail Components to the nations core sectors with a view to serving both domestic and export market. During the current year, your Company also supplied for two prestigious export orders for Africa.

In todays dynamic business landscape, staying ahead requires constant vigilance and strategic foresight. At your Company, we prioritize identifying risks, seizing opportunities, and continuously adapting our strategies to not only keep pace but also thrive to be best performing. Our commitment to evaluating and responding to our environment ensures sustained growth and a strong competitive edge.

We are truly grateful for the support and loyalty our customers have shown on us. Your continued trust and patronage are the foundation of our success and we thank you for being an integral part of our journey. We appreciated your choice in us and for opportunity given to serve you. Your satisfaction and support are of utmost importance to us.

During the year, your Company also successfully raised equity of Rs 1050 crore, of which Rs 1000 crore were raised through QIP in two tranches of Rs 750 crore and Rs 250 crore, wherein equity shares were issued and allotted to few of the largest financial investors in the world and the balance Rs 50 crore through Preferential allotment to the Promoter and Promoter group. Consequent to the above allotments, the Paid-up Share Capital of the Company has increased from 32,18,69,895 Equity Shares of Rs 1 each to 39,94,67,302 Equity Shares of Rs 1 each. Allotment of 77,72,020 Convertible Warrants (Warrants convertible into Equity Shares of the Company) at a price of Rs 193 each was also approved by the Capital Issue Committee. 25% consideration of the above allotments were received by the Company during Q1 of the current financial year. Balance 75% is expected within 18 months.

The Government of Indias ambitious plan to increase the share of environment-friendly rail transport in overall freight movement and reduce the industrys logistics costs has created long-term opportunities for your Company. In 2022, your Company secured its single largest wagon order for 20067 wagons valued at ~Rs 645354 lakhs. However, following the decision not to deliver the 2nd tranche (resulting in a one- time provision of Rs 3800 lakhs during Q1FYRs 24 based on a Recovery Notice from IR) the order was revised to 16722 wagons valued at ~Rs 538527 lakhs. Additionally, in December 2023, your Company further received an order of 3400 wagons valued at Rs 116484 lakhs.

Your Company anticipates governments focus on modernization of railway infrastructure and the announcement of three major economic railway corridor programs with a strategic focus on increasing freight movement and connectivity on rail, will increase the demand for wagons providing long-term growth visibility. The expansion of the global wagon market will lead to a rise in exports as well, which your Company is fully prepared to capitalize.

The Steel Foundry unit of your Company continues to perform well, operating full capacity across both the facilities at Belgharia and Urla. The unit has shown strong performance in both domestic and export markets. With a total foundry capacity of 48000 MT, your Company holds the largest Indian Railway casting foundry capacity in India and is also one of the largest exporter of railway castings in India.

A new SBU is formed to address to Railway component business keeping our vision to supply both domestic and global markets. The component business is gaining momentum now, supplying bogies, and parts of passenger rolling stock and metro rail to many global customers. The Division has now planned to enter into long-term contracts with domestic and international customers for the supply of bogie frames, under frames, fuel tanks and other rolling stock components, positioning itself as a global sourcing partner for many multinational corporations.

To safeguard its core manufacturing business from the volatility and substantial working capital requirements of EPC business, the Company had announced demerger of its Infra - Rail & Green Energy Division (w.e.f. 1st April 2024), with completion expected on receipt of all regulatory clearances. The Company has ceased taking long-term contracts for this division and is nearing the finishing of its existing contracts, primarily, with Bangladesh Railways, Bengaluru Metro and Mumbai Metro. Moving forward, the Company plans to focus on short-cycle projects rather than traditional railway EPC projects with extended execution cycle. One such significant opportunity lies in the deployment of the anti-collision system (KAVACH) that Indian Railways plans to deploy on its network.

The Infra-electrical division continues to diversify its business and is focusing on specialized solutions. This Division has experienced strong order in recent years, with its order book growing ~4 times over FYRs 23. This is expected to lead to robust revenue growth, moving forward. This division offers a comprehensive package in the field of design, supply, construction and installation for railway electrification as well as the installation of transformers and substations. The division is also poised to execute projects outside of the rail segment.

Additionally, the Companys credit rating has been upgraded from CARE BBB+ to CARE A- by CARE Ratings.

TALENT MANAGEMENT

Talent Management is a very important element in our journey of transformation from good to great. In your Company, Human Relations group has reaffirmed focus on building Human Capital by various steps including training of employees, addressing their needs, empowerment and fostering a harmonious workplace culture. The key task is on maintaining positive work environment, retention of employees and encouraging productivity.

As a Company, we have implemented a talent management strategy designed to achieve optimal results. This ongoing process involves attracting and retaining high-quality employees, developing their skills, and continuously motivating them to improve their performance as human resources are the most important asset of the organization. We are also a learning organization which is created by relentless knowledge management and examples on past mistakes.

Your Company also aims at achieving a Performance driven culture that has well-defined measures and demonstrated values for achieving the Companys business results and overall success. With a commitment towards building a Performing Organization, your Company thrives upon clear objective settings with measurable goals, and targets for improved performance. In the said approach, employees are recognized and rewarded for their performance in intrinsic or extrinsic ways. Employee retention is the organizational goal of keeping productive and talented associates and reducing turnover by fostering a positive work atmosphere to promote engagement. This includes showing appreciation to employees, providing competitive pay and benefits, and encouraging a healthy work-life balance. We promote diversity, with equitable representation of an equitable ratio of men and women. The human resources strategy endeavours on succession planning to pass leadership roles down to next level employees.

SIGNIFICANT FINANCIAL RATIOS

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		2023-24	2022-23	2021-22
Net Profit Margin *	%	3.22	0.88	1.13
Operating Profit Margin *	%	5.77	3.51	4.95
Debtors Turnover **	Times	4.20	3.31	2.75
Inventory Turnover	Times	5.00	4.33	4.84
Debt Equity Ratio ***	Times	0.25	0.73	0.54
Current Ratio *	Times	2.63	1.59	1.83
Interest Coverage Ratio **	Times	2.43	1.30	1.48
Return on Net Worth **	%	4.56	1.49	1.38

Increase in profit margin is due to higher volume & cost reduction measures.

"" Improvement is due to better realisation from customers.

""" Improvement is due to repayment of debt through raising of equity.

Improvement is due to reduction in borrowings & increase of liquid assets.

" Improvement due to higherprofits.

SIGNIFICANT DEVELOPMENT

Qualified Institutions Placement

During the year, pursuant to the approval from members of the Company by way of Postal Ballot, your Company raised capital of approx. Rs 1000 crore through Qualified Institutions Placement (QIP) by issuing 5,80,90,000 Equity Shares and 1,61,29,032 Equity Shares, having face value of Rs 1 each, at a price of Rs 129.11 per Equity Share (including a premium of Rs 128.11) and Rs 155 per Equity Share (including a premium of Rs 154) respectively to Qualified Institutional Buyers.

The QIP was oversubscribed by more than two times demonstrating strong interest from foreign investors, domestic institutional investors and funds. The overwhelming response from Qualified I nstitutional Buyers stands testament of their unwavering faith in Companys vision and potential. The funds received pursuant to QIP is being utilised in retiring high cost debt, funding for capital expenditure, working capital and general corporate purpose.

Preferential Allotment

During the year, pursuant to the approval from Members of the Company by way of Postal Ballot, your Company has allotted 27,02,700 & 6,75,675 Equity Shares of face value of Rs 1 each at a price of Rs 145 each to Adventz Finance Private Limited and Mr Saroj Kumar Poddar (as an individual) respectively by way of preferential issue aggregating to approx. Rs 50 crore.

Consequent to aforesaid allotment of Equity Shares by way of QIP and Preferential issue, the paid-up share capital of the Company has increased from 32,18,69,895 equity shares of face value of Rs 1 each as at 31st March 2023 to 39,94,67,302 equity shares of face value of Rs 1 each as at 31st March 2024.

Raising of funds by issuance of Convertible Warrants

During the year, the Board of Directors of the Company has approved preferential issue of upto 83,40,000 Convertible Warrants, each carrying a right to subscribe to 1 fully paid-up equity share of the Company of face value of Rs 1 each, to Messrs Samena Green Limited and Adventz Finance Private Limited, aggregating and not exceeding Rs 150 crore. The same was approved by the Members of the Company by way of Postal Ballot. In terms of the approval and upon receipt of 25% of consideration, on 12th April 2024, your Company has allotted 77,72,020 Convertible Warrants i.e 38,86,010 Convertible Warrants each to Samena Green Ltd & Adventz Finance Pvt Ltd, by way of preferential issue at a price of Rs 193 per warrant. The remaining 75% of the consideration will be paid at the time of conversion of warrants into equity shares anytime within eighteen months from the date of allotment.

FREIGHT CAR DIVISION

Your Company is pleased to inform you that, as of 1st April 2024, Freight Car Division holds an order book of Rs 544967 lakhs. During the FYRs 24, your Company successfully delivered a total of 7028 wagons, including 4,969 units for Indian Railways (IR) and 2,059 units for private sector/export clients. The aggregate value of these deliveries was approximately Rs 253408 lakhs, with Rs 168855 lakhs attributable to IR and Rs 84552 lakhs to private/export clients. Steel Foundry have delivered more than 12000 bogies and couplers to facilitate the highest ever wagon builds in a year by your Company. The turnover for the division amounts to 274999 lakhs.

In the Interim Budget for FYRs 25, an allocation of Rs 255 billion has been made to Indian Railways. The Railways continue to emphasize increasing their freight market share to 45% and have introduced the "Mission 3000 MT" plan, targeting implementation by FYRs 30. This initiative includes enhancing wagon designs and inviting manufacturers to contribute innovative designs that improve wagon capacity and longevity. Moreover, there is a focus on integrating the latest technologies for maintenance within Railway Workshops. Your Company is actively collaborating with several international companies in the railway sector to meet these evolving requirements.

Furthermore, your Company has entered into a 51:49 Joint Venture Agreement with M/s NYMWAG CS a.s. - AZC Group, a prominent European conglomerate known for its manufacturing of wagons and wagon components. Initially, the joint venture will focus on producing wagons and components for the domestic market, with plans to expand into European markets, thereby establishing a significant presence in these high-demand markets.

Your Company has successfully completed the first and third tranches of a substantial order of BCNA & BOBRN wagons from Indian Railways. Additionally, the Company has been awarded a new contract for 3,400 BOXNS wagons and option clause quantity of 519 BOBRN wagons. The prototype for this new order is currently under development, with series production scheduled to begin thereafter.

In addition, your Company has exported 25 tank wagons to Cameroon and 50 gondola wagons to Liberia. These exports are part of repeat orders totalling 300 wagons received from Arceler Mittal, following the earlier supplies of 100 wagons, which had been commended for their quality.

New Business:

As a part of its forward-looking vision, your Steel Foundry has initiated the upgradation of its current Railway Crossing business to complete Railway Turnout System.

In this context, we are happy to inform that your Foundry has signed a technical collaboration with Sampyo Rail, South Korea, the leading designer, manufacturer, and supplier of Railway Turnouts in South Korea.

The Texmaco - Sampyo association is poised to become a significant Company in the sector, which is presently dominated by only a limited number of suppliers.

Furthermore, your Foundry has successfully shipped the first consignment of GET castings meant for mining machinery to new export customer Bradken, Australia.

Your Company is planning to expand steel foundry at Paradeep, Odisha to meet the domestic and export requirements of steel castings to cater both the mining and railway segments. This will also focus on crafting mining components and enable the Company to diversify its product mix.

New Initiatives

In line with your Companys commitment towards environment and societal responsibility, your Company have initiated many ESG initiatives.

As a major step toward adopting clean energy, your Steel Foundry have signed a groundbreaking equity partnership with Ampin Energy Transition Pvt. Ltd. to establish a 10 MW open access group captive solar power project in Chhattisgarh. This project will enable the Urla unit in reduction of cost of electricity by ~Rs 2.32 per unit of electricity and predominantly reducing carbon footprints. This signifies a momentous step in your Companys ongoing commitment to sustainable energy practices.

INFRA RAIL & GREEN ENERGY

During the year FYRs 24, we have adopted a more focused and cautious approach on the governments core growth areas of Rail Infrastructure and Green Energy. The Company reclassified its Rail EPC Division establishing the Rail EPC Kalindee Division and HME/BSD Division under a new nomenclated division Infra - Rail & Green Energy. This reclassification will enable the division to contribute effectively to these key segments, particularly following the demerger of the division into a separate Company as approved by the Board.

During the year, Kalindee unit reported a gross revenue of Rs 44703 lakhs, compared to Rs 54028 lakhs during previous year. We have maintained a focus on efficiently executing contracts currently in hand and making concerted efforts towards the commercial closure of ongoing projects. We are submitting bids selectively in areas of our strengths namely in S&T (Signaling & Telecommunications) and Ballast-less track work contracts, with shorter execution cycle.

The unit is pleased to be a key contractor for laying ballast less track in East West Metro Corridor Project, Kolkata. This project will connect Howrah & Sealdah Railway Stations and which would pass through under the bed of Hooghly River through a tunnel 32 meters below water level. The work under Hooghly River has already been completed and commercial services between Howrah Maidan and Esplanade have commenced. The remaining work on the final stretch between Esplanade to Sealdah is ongoing and is expected to be completed during the year. The Kolkata Metro Rail Corporation (KMRC) plans to inaugurate full run of E-W Metros entire 16Km corridor by December 2024.

The outstanding order book as on 1st April 2024 is 69392 lakhs.

The HME/ BSD unit has achieved a turnover of Rs 8738 lakhs during FYRs 24.

The unit has completed all long pending contract of HME and BSD except the largest Subansiri Project of HME and Mizoram Bridge Project of BSD. The progress on 2000 MW Subansiri project which was held up for long due to local issues, site floods etc. have now substantially been completed to the extent of 90% and it is expected that by March/AprilRs 25 this project would be commissioned in entirety. Mizoram Bridge Project is 98% completed and a portion of the railway line from Bhairabi in Assam to Hartoki in Mizoram is commissioned. It is expected that the entire project would be commissioned by DecemberRs 24. Farakka Barrage Gate rehabilitation work is completed, and a small new site work has been awarded by the authority in 2023 and the same is under execution.

The outstanding order book as on 1st April 2024 is 7381lakhs.

INFRA-ELECTRICAL

During the FYRs 24, the division successfully advanced its diversification plans into Transmission and Distribution by securing orders from state utilities of Maharashtra and Madhya Pradesh. They are strengthening their position from maintenance to construction in electricals in railways.

During the year, your Company have secured orders in 2 x 25 UV traction both for Overhead Electrification (OHE) and Substations. Part of the order was completed and commissioned within the same financial year.

Your Company is well positioned and prepared to pursue more orders in 2 x 25 traction, particularly for new lines being constructed by railways and other Special Purpose Vehicles (SPVs) of railways.

The outstanding order book as on 1st April 2024 is Rs 113205 lakhs.

SUBSIDIARIES / ASSOCIATE / JOINT VENTURES

The subsidiaries / associate / joint ventures continue to contribute to the growth in revenue and overall performance ofyour 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 forms 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. Panihati Engineering Udyog Private Limited

v. Texmaco Rail Systems Private Limited

vi. Belgharia Engineering Udyog Private Limited

vii. Texmaco Defence Systems Private limited

JOINT VENTURES

i. Touax Texmaco Railcar Leasing Private Limited

In FYRs 23, the JV Company has reported a fleet strength of 17 rakes and confirmed orders for 10 new rakes. We are pleased to report that that all the 10 rakes were manufactured and delivered during the year. Consequently, we now have fleet of 27 rakes, all successfully leased out for periods ranging from 10 to 14 years.

The JV Company currently has enquiries for approximately 50 rakes, from TMIL, JSW, Orient Cement, Birlacorp Cement and other customers. These inquiries cover a ranges of wagon types, including those for steel coils, both existing and an advance version, standard cement wagons and also its variations.

Additionally, we are leveraging our in-house wagon design capabilities to develop a new design of wagons for carrying autocars. The other initiatives are introduction of Aluminium wagons, improved version of cement carrying cars etc.

With all these developments and with a steadily growing market for private wagons we see great potential in future for our JV.

The revenue from operation of the JV is 5960 lakhs.

ii. Wabtec Texmaco Rail Private Limited

The JV Company completed yet another very successful FY 24. Total income during FYRs 24 improved by 29% to Rs 9937 lakhs compared to Rs 7708 lakhs achieved during FY 23. Profit before tax surged by 23% to Rs 1839 lakhs from Rs 1491 lakhs earned during FY 23.

With a significant increase in wagon production volumes in the country, the JV Company has achieved its highest ever volume of draft gears to its customers, while maintaining quality and on-time delivery. At the same time, a similar trend has been observed in the sales of non-metallic friction wedges to Indian Railways and private customers. Additionally, the JV Company has significantly increased the export of receivers to Wabtec, Mexico due to a substantive surge in the demand and the mandate by AAR for fitment of receivers on all wagons by 2025.

The JV Company is at an advanced stage in introducing the 4-Port automated Brake Pressure monitoring system and the Brake System Health Monitor to Indian Railways, supported by effective product demonstration. In addition to the same, additional freight wagon products suitable for Indian wagons are in various stages of planning for introduction in India. The

JV Company has also established a complete facility and utilities for the manufacture and supply of Air Brake Equipment including C3W type Distributor Valves and is in the process of obtaining an approval from RDSO to commence commercial supply.

The substantial volume of wagon procurement anticipated over the next few years, aligned with the 3000 MT freight throughput mission of the Honble Minister, is expected to drive significant growth for the JV Company. This growth will be supported by the diverse range of its current and upcoming wagon products.

The outstanding order book as on 1st April 2024 is Rs 6000 lakhs.

R & D ACTIVITIES A. Rolling Stock Unit

Our Design Centre is fully equipped to develop next- generation freight cars tailored for both domestic and international markets, meeting national and international standards. The Centre collaborates extensively with stakeholders including Indian Railways, private operators, and vendors to deliver innovative solutions for enhanced wagon efficiency. In addition to developing wagons, the Centre is also engaged in developing various components through partnerships with leading industry players.

This year, we successfully exported a tank wagon for petroleum products to Cameroon. This wagon was indigenously designed to conform to UIC standards, features a Texmaco ride control bogie developed internally.

We have also designed and manufactured a 30-tonne axle Rotary Dump Gondola Ore Car for Liberia, adhering to AAR standards. The gondola has performed admirably and received a certificate of appreciation from the client for its quality and performance. Following this, the client has placed a follow-up order, and this year we have modified the design to include a specialized drainage system. This includes newly designed bottom and side drain plugs with polyurethane (PU) sheets, aligning with international best practices. Additionally, we have introduced a double-stacking concept for shipping gondola wagons, significantly reducing transportation costs.

We are also working in close partnership with industry experts to develop a Taller Autocar wagon. This innovative solution will accommodate a diverse range of vehicles, including SUVs, two-wheelers, three-wheelers, and farm equipment such as tractors. The design is currently under review by the Research, Design and Standards Organisation (RDSO).

Your Company has also entered into a Memorandum of Understanding (MoU) with Hindalco for the development of aluminium-bodied freight cars. This collaboration aims to create a lightweight freight car by optimizing design and implementing best practices in aluminium fabrication. There are many more activities are on the anvil, including formation of a state of the art design & development centre.

B. Steel Foundry Unit

The Companys R&D Centre, officially recognized by the Department of Scientific and Industrial Research (DSIR), Government of India, plays a pivotal role in advancing research and innovation for product and process development. The Centres ongoing efforts have led to the successful introduction of a new melting process, innovations that extend the lifespan of existing products and the design of optimally weighted and efficient models that enhance the speed and efficiency of transporting goods and specialized cargos.

Aligned with the Companys vision to set new industry standards, improve measurement accuracy, and drive digitization, a state-of-the-art scanner is being integrated into the facilitys advanced instruments. This cutting-edge addition is expected to significantly enhance precision across various applications, further strengthening the R&D Centres position at the forefront of technological advancements. By embracing this technology, the Centre is not only enhancing its capabilities but also ensuring it remains a leader in innovation and quality within the industry.

Our metallurgical laboratory, which has achieved ISO/IEC 17025:2017 certification from the National Accreditation Board for Testing and Calibration Laboratories (NABL). This certification highlights the laboratorys commitment to quality and accuracy in testing and calibration. Plans are underway to expand the laboratorys scope of accreditation, encompassing metallography and wet chemical analysis.

The R&D Centres commitment to innovation and quality positions the Company as an industry leader, consistently working to improve and adapt to the evolving demands of the market. Through its state-of-the-art facilities and a focus on excellence, the Company is well-equipped to address the future challenges and deliver superior products and services to its customers.

a) New Product Development:

(1) The unit has successfully developed eleven new types of mining products specifically for the Australian market. These products are highly valued for their precision in dimension and geometry, meeting the stringend standards required in the industry. The introduction of these innovative products has significantly expanded business opportunities and strengthened customer confidence.

(2) A new side frame design (F-1574) has been developed specifically for the North American market. Following its successful development, the first production lot has been cast and dispatched to the customer. This milestone represents a significant achievement in addressing the regions unique requirements and demonstrates the Companys commitment to delivering tailored solutions.

(3) Three types of couplers with modified designs are currently under development. Once these designs are finalized and approved, they are expected to open up new business opportunities in the North American market.

(4) The weldable crossing has been approved by the Indian Railway R&D sector (RDSO), and the first pilot lot has been dispatched. This approval represents a significant business milestone for your Company.

(5) High tensile knuckles are currently being developed with an enhanced process design utilizing advanced technology. The castings have been produced and sent to North America for testing by the Association of American Railroads (AAR). Successful testing is anticipated, potentially unlocking significant business opportunities in the North American market.

b) Innovation in Method Design

Following components have been modified in their method design, resulting in significant improvements in durability and quality. These enhancements have not only improved product performance but have also led to substantial cost savings, demonstrating the effectiveness of the updated design approach.

1. The method design for high-speed bolsters for Indian Railways has been upgraded by integrating innovative ideas and leveraging the design expertise and experience from the well-established method used for export bolsters. This redesign has resolved several quality issues, improved component rigidity, and reduced weight.

2. The R&D division innovated the method design for export and domestic side frames by employing a new generation approach using centre pouring. This concept not only significantly reduces costs by increasing yield and decreasing finishing volume but also enhances overall quality, leading to improved performance and efficiency in production.

3. Productivity has been significantly enhanced by implementing a double-decker pattern for small products like followers and pivots. The introduction of a unit core concept in the yoke has improved control over thickness and dimensions, leading to overall efficiency and quality.

c) Innovation in Process development

1. The induction melting process, introduced in 2024, has been validated for various products and received customers approved. This advancement is expected to increase capacity by approximately 25% while reducing electrical power consumption per metric ton.

2. The R&D division is installing a sand reclaimer, which will reduce the need for fresh sand and provide significant cost benefits by recycling and reusing sand efficiently.

IT SERVICES

IT department of your Company continues to invest in Information Technology & Digital Solutions while ensuring the security of our existing IT Assets.

We remain committed to our digital transformation journey with a focus on upgradation of our ERP Platform.

We actively monitor the availability, traffic, packet loss, performance metrics and response time of various devices including servers, routers, switches, and virtual machines. This comprehensive monitoring ensures the optimization of our IT processes for stability and sustainability.

CORPORATE SOCIAL RESPONSIBILITY

Your Company is committed to community service and human welfare. With this view, the Company has actively engaged in social upliftment of the neighbouring residents through various CSR drives in the fields of Education, Health, Environment and Women Empowerment.

To make a significant difference in the society and improve the overall quality of life, the Texmaco Neighbourhood Welfare Society, the philanthropic arm of the Company, operates a Health and Wellness Hub at the Texmaco Estate premises. This facility offers services such as Physiotherapy, Yoga, Gym and Alternative Medicine. The mission behind this initiative is to alleviate pain, restore health and build physical fitness, with the aid of skilled and experienced professionals. The Health Hub is well-equipped with the technologically advanced equipment, supported by a modern Gym. The Yoga Centre enhances the appeal of the hub. The facility caters to patients from the neighbourhood apart from the employees and their family members.

The Company remains committed to providing financial assistance for Health and Education to the unprivileged community of the locality.

These efforts underscore the Companys dedication to corporate social responsibility and enhance its reputation in the professional arena.

The Company has in place a policy on Corporate Social Responsibility. During the year, there has been no change in the policy. The weblink for accessing such policy is https://www.texmaco.in/wp-content/uploads/2023/01/ CSR POLICY TEXRAIL.pdf.

The Company has spent in excess of the prescribed threshold under the Act on the CSR activities for FYRs 24.

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

GREEN INITIATIVE

Your Company remains steadfast in its commitment 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. 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 2024.

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 atwww.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.

PARTICULARS OF EMPLOYEES

The number of employees as at 31st March 2024 was 2121. 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 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 part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Meetings of the Board

During the year under review, 9 (Nine) Board Meetings were held on the following dates:

• 27th April 2023 . 12th May 2023

• 17th July 2023

• 3rd August 2023

• 15th September 2023

• 14th October 2023

• 16th December 2023

• 1st February 2024

• 27th February 2024

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, there has been no change in the policy.

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/wp-content/uploads/2023/ 01/REMUNERATION POLICY TexRail.pdf

Change in Directors and Key Managerial Personnel

Re-appointments:

During the year, the re-appointment of Mr D. H. Kela as Executive Director of the Company was approved at the AGM of the Company held on 25th September 2023.

The Board of Directors on the recommendation of Nomination and Remuneration Committee had approved the re-appointments of Mr Utsav Parekh w.e.f 4th September 2023, Mr Virendra Sinha and Ms Rusha Mitra w.e.f 17th February 2024 as Independent Directors of the Company. The aforesaid re-appointments were approved by the shareholders by way of Postal Ballot.

Appointments and Re-designation:

The Board of Directors on the recommendation of the Nomination and Remuneration Committee, has approved the appointment of Mr Sudipta Mukherjee as an Executive Director and designated as Deputy Managing Director w.e.f. 1st June 2023. Further the Board at its meeting held on 16th December 2023 had re-designated Mr. Sudipta Mukherjee as Managing Director w.e.f 1st January 2024.

The Board on the recommendation of the Nomination and Remuneration Committee, has approved the appointment of Mr U V Kamath as an Executive Director w.e.f. 1st February 2024. The aforesaid appointments and re-designation were approved by the Shareholders by way of Postal Ballot.

During the year, Mr Hemant Bhuwania was appointed as the Chief Financial Officer (CFO) of the Company w.e.f. 1st April 2023 in place of Mr A. K. Vijay, Executive Director & CFO, who had tendered his resignation from the position of CFO w.e.f. 1st April 2023 and accordingly, Mr Vijay continues to act as Executive Director of the Company. Further, Mr K. K. Rajgaria was appointed as Company Secretary & Compliance Officer of the Company w.e.f. 30th April 2023.

Resignation:

During the year, Mr D. H. Kela has resigned as Executive Director of the Company w.e.f. 1st February 2024.

Retire by rotation:

Mr Akshay Poddar, Non-Executive Director and Mr 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 Appointment:

The Board of Directors on the recommendation of Nomination and Remuneration Committee, has approved the appointment of Mr Hemant Bangur as an Independent Director for a period of 3 (three) years w.e.f 16th May 2024 subject to approval of shareholders. The aforesaid appointment is being placed for the approval of the shareholders by way of Postal Ballot.

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 21st March

2024 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 proficiency) to fulfil their duties to act as such.

AUDIT COMMITTEE AND AUDITORS

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

At the 24th AGM held in the year 2022, Messrs L. B. Jha & Co., Chartered Accountants, Statutory Auditors of the Company, were appointed by the Shareholders to hold the office as such from the conclusion of 24th AGM until the conclusion of 29th AGM of the Company.

Cost Auditors

Your Company has appointed Messrs DGM & Associates, Cost Accountants, for conducting the Cost Audit for FYRs 24 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 16th May 2024 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 FYRs 25 at a remuneration of Rs 2,50,000 (Rupees Two Lakh Fifty Thousand) plus applicable taxes. 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 FYRs 24 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.

INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT

The Company maintains a robust system of internal controls, that is appropriate for the nature and scale of its operations. 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, aligned with the size and the nature of the Companys operations.

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 Companys Risk Management objectives include monitoring and reviewing its Risk Management Plan, which involves identifying and addressing various elements of risk. The Company has established a Risk Management Policy and a comprehensive framework to mitigate potential losses from systematic issues. This Policy encompasses processes for risk assessment, identification of both internal and external risks, including cyber security risks, and outlines detailed procedures for risk evaluation and mitigation. The Risk Management Committee periodically reviews the Policy to ensure its effectiveness.

Your Company is having a Risk Management Committee (RMC) duly constituted by the Board of Directors of the Company. The composition of the RMC is provided in the Report on Corporate Governance which forms a part of this Report.

DISCLOSURES

(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) Demerger

During the year, the Board of Directors had approved Demerger of the "Infra - Rail & Green Energy" division of the Company into "M/s Belgharia Engineering Udyog Private Limited" and approved a Scheme of Arrangement subject to necessary approvals including from the Securities and Exchange Board of India, the shareholders and creditors of the Company and Honble National Company Law Tribunal, Kolkata Bench.

(f) Share Capital

During the year, the Board of Directors of the Company has approved the issuance of Equity Shares by way of Preferential Issue to Messrs Adventz Finance Private Limited & Mr Saroj Kumar Poddar (as an individual), for an amount not exceeding Rs 50 crore, which was approved by the Members of the Company by way of Postal Ballot. In terms of the approval, your Company has allotted 27,02,700 & 6,75,675 Equity Shares of face value of Rs 1 each at a price of Rs 145 each to Adventz Finance Private Limited and Mr Saroj Kumar Poddar (as an individual) respectively by way of preferential issue.

Further, during the year, the Board of Directors of the Company has approved the issuance of Equity Shares by way of Qualified Institutions Placement for an amount not exceeding Rs 1000 crore, which was approved by the Members of the Company by way of Postal Ballot. In terms of the approval, your Company has allotted 5,80,90,000 Equity Shares of face value of Rs 1 each at a price of Rs 129.11 per Equity Share & 1,61,29,032 Equity Shares of face value of Rs 1 each at a price of Rs 155 per Equity Share to Qualified Institutional Buyers.

Consequent to aforesaid allotments, the paid-up share capital of the Company has increased from 32,18,69,895 equity shares of face value of Rs 1 each as at 31st March 2023 to 39,94,67,302 equity shares of face value of Rs 1 each as at 31st March 2024.

Raising of funds by issuance of Convertible Warrants

During the year, the Board of Directors of the Company has approved preferential issue of upto 83,40,000 Convertible Warrants, each carrying a right to subscribe to 1 fully paid-up equity share of the Company of face value of Rs 1 each, to Messrs Samena Green Limited and Adventz Finance Private Limited, aggregating and not exceeding Rs 150 crore. The same was approved by the Members of the Company by way of Postal Ballot. In terms of the approval and upon receipt of 25% of consideration, on 12th April 2024, your Company has allotted 77,72,020 Convertible Warrants i.e 38,86,010 Convertible Warrants each to Samena Green Ltd & Adventz Finance Pvt Ltd, by way of preferential issue at a price of Rs 193 per warrant. The remaining 75% of the consideration will be paid at the time of conversion of warrants into equity shares anytime within eighteen months from the date of allotment.

(g) Deposits

During the FYRs 24, the Company has not accepted any Deposit under the provisions of the Act.

(h) 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.

(i) 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.

OTHER INFORMATION

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/wp- content/uploads/2024/08/AR23-24.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, there has been no change in the policy.

The web link for accessing such policy is: https:// www.texmaco.in/wp-content/uploads/2023/01/ 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 & Sustainability Report

Business Responsibility & Sustainability 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 took place during the FYRs 24 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 web link for accessing such policy is: https://www.texmaco.in/wp-content/uploads/ 2023/01/RPTP.pdf

DIRECTORS RESPONSIBILITY STATEMENT U/S 134 (5) OF THE COMPANIES ACT, 2013

Your Directors state that:

(a) in the preparation of the Annual Financial Statements for the financial year ended 31st March 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) relevant 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: 16th May, 2024	S. K. Poddar
Place: Kolkata	Chairman