titagarh wagons ltd share price Directors report

Dear Shareholders,

The Directors present their Twenty-Sixth Annual Report on the business and operations of Titagarh Rail Systems Limited (formerly Titagarh Wagons Limited) (‘the Company or ‘TRSL) along with the Audited Financial Statements, for the financial year ended March 31, 2023. The consolidated performance of Titagarh Group (the Company and its subsidiary) has appropriately been referred to in this Report.

At the outset we are pleased to report that to better reflect your Companys presence in the entire gamut of operations across the rail systems, the Board decided to change the Companys name to Titagarh Rail Systems Limited which upon approval of the authorities concerned became effective from May 19, 2023.

1. Profit, Retention & Dividend

Titagarh Groups financial performance during the financial year ended March 31, 2023 was as follows:

(Rs. in lakhs)








Revenue from operations





Other income





Total Income (TI)





Earnings before interest, tax, depreciation and

amortisation (EBIDTA)





Less: Finance Cost





Less: Depreciation and amortization expenses





Profit/(Loss) before exceptional items & tax





Share of Profit/(Loss) of Joint Ventures





Exceptional items




Profit/(Loss) before tax





Tax Expenses/(Benefits)





Profit/(Loss) for the year after tax from

continuing operations





Loss from discontinued operations (net of tax)





Profit/(Loss) for the year after tax





Other Comprehensive Income/(Loss) (net of tax)





Total Comprehensive Income for the year





2. Performance and outlook

The Companys performance during the Financial Year ended March 31, 2023 (FY 22-23) on a standalone basis was outstanding, with all key performance matrix recording remarkable improvement as compared to the previous financial year (FY 21-22). During the last quarter of the year under review, considering the changes in the overall business activities and internal re-organisation, the operating segments were re-assessed, and the "Shipbuilding, Bridges and Defence" (SBD) segment was merged with freight rolling stock. Accordingly, the operating segments of the Company have been identified as "Freight Rail Systems" (FRS) (which includes SBD) and "Passenger Rail Systems" (PRS).

On a stand-alone level, the revenue from operations went up by Rs. 1,28,501.70 Lakhs registering an increase of 85.92% and EBIDTA of Rs. 30,829.78 lakhs in FY 22-23 was higher by 65.38% as compared to Rs.18,641.47 lakhs in FY 21-22, Profit after tax, climbed from Rs. 3,348.77 lakhs in FY 21-22 to Rs. 10,336.64 lakhs in FY 22-23, an impressive increase of 208.67%.

On a consolidated basis, the Groups total income increased from Rs. 1,48,523.26 lakhs in FY 21-22 to Rs. 2,82,217.34 lakhs in FY 22-23 i.e. an increase of 90.02%; the EBIDTA from Rs. 18,264.13 lakhs in FY 21-22 to Rs. 30,607.35 lakhs in FY 22-23 recorded an increase of 67.58% and Profit after tax from continuing operations for FY 22-23 increased to Rs. 13,463.33 Lakhs as compared to Rs. 7,779.66 Lakhs in FY 21-22, being an improvement of 73.06%.

FY 22-23 has been a remarkable year for the Company with the unprecedented increase in the order book pursuant to the prestigious orders secured by the Company. Some of the major developments/events are mentioned below.

The consortium of your Company with Bharat Heavy Electricals Limited (BHEL) emerged as the 2nd Lowest Bidder (L2) for “Manufacturing cum Maintenance of Vande Bharat Trainsets including Up-gradation of the Government Manufacturing Units & Trainset Depots” and was awarded an order for 80 nos. Vande Bharat trainsets and comprehensive maintenance of the same for 35 years in the mega tender of Indian Railways. The BHEL-TRSL consortium was the only “AatmaNirbhar” consortium that participated in the tender process. A special purpose vehicle (SPV) will be formed between the consortium partners to carry out the maintenance of the trains.

It is a matter of great pride for the Company to be a part of the Governments Make in India policy.

In the other mega tender of Indian Railways, the consortium of your Company with Ramkrishna Forgings Limited was the Lowest Bidder (L1) for “Manufacturing and Supply of Forged Wheels” under the “AatmaNirbhar Bharat” initiative of the Ministry of Railways, Government of India. The Consortium shall establish a state-of-the-art manufacturing facility in India for forged wheel production for supply of approximately 1.6 million wheel discs for different rolling stocks of Indian Railways over a period of 20 years at about 80,000 wheels per annum.

Launching of the maiden warship (Fast Patrol Vessel), designed & manufactured in collaboration with GRSE, for the Indian Coast Guard took place in May, 2022.

Ocean-Going Passenger & Cargo Ferry Vessel for the Cooperative Republic of Guyana was launched, marking a significant milestone as it represents the Companys maiden shipbuilding venture into the export market. The vessel has been meticulously constructed through collaborative efforts with GRSE, showcasing your Companys commitment to excellence and international trade prospects.

The 3rd of July, 2022 marked your Companys 25 years of operational existence, and the Silver Jubilee was celebrated at Uttarpara facility, in the gracious presence of Honble Chief Minister, Smt. Mamata Banerjee along with several other dignitaries of Govt. of West Bengal. The grand ceremony saw the inauguration of laying the foundation stone for the new Stainless Steel Coach manufacturing unit and the Shipyard at Falta SEZ.

The Honble National Company Law Tribunal (NCLT), Kolkata Bench vide its Order dated 4th November, 2022 sanctioned the amalgamation of Titagarh Bridges and International Private Limited (TBIPL), a wholly owned subsidiary with the Company, with 1st April, 2021 as the Appointed Date.

Your Company is enhancing capacities at Titagarh and Bharatpur facilities to 1000 Wagons per month which is expected to be achieved in the next 3-4 months by creating additional capacity as well as streamlining of processes including their automation. Further, capacity creation for backward integration of key components for wagon manufacturing including CRF, Bogie components, air brake pipes availability of which is impacted due to increased demand in the industry, at Titagarh plant is also being undertaken to attain substantial improvements in supply chain and enhance productivity.

The continued resolve of the Government of India to expand and improve the railway infrastructure under the initiatives such as “AtmaNirbhar Bharat” and “Make in India” is of immense support to your Companys growth. Your Company has committed to capex of about Rs. 650 crore over the next two years on capacity/infrastructure building and with consistent focus on resource optimization as well as thrust on augmentation of execution of the orders practiced by the management, the outlook for the current year is encouraging as is also indicated by the following important developments:

Your Company received a Letter of Acceptance (LOA) dated 27th June, 2023 from the Gujarat Metro Rail Corporation (GMRC) Limited for “Design, Manufacture, Supply, Testing, Commissioning and Training of 72 nos. of Standard Gauge Cars for Surat Metro Rail Phase-I Project”. The order value is about INR 857 crore and execution would start 76 weeks after signing the contract and is scheduled to be completed in 132 weeks thereafter. This was followed by another LOA dated 29.08.23 for 30 Standard Gauge Cars for Surat Metro Rail Phase- II Project valued at about INR 350 crore.

It is a matter of great satisfaction that your Companys order book at Rs. 27,890 crore on a standalone basis as at June 30, 2023 is the highest ever since its incorporation. The performance of the Company on a consolidated basis also improved reasonably well with the major highlight being the award of a Framework contract valued at Euro 732.54 million for 33 trainsets, to the consortium of Titagarh Firema S.p.A. (‘TFA), the associate in Italy with Skoda Transportation SA.

Your Company undertook fund raising by way of Preferential Issue of 76,00,000 equity shares to Smallcap World Fund Inc., a part of Capital Group, one of the largest financial investors in the world, at a price of Rs. 380/- per share aggregating Rs. 288.80 crore for its working capital requirements and general corporate purpose. The allotment of shares to the said investor was made on July 7, 2023 and all necessary formalities including listing and trading approvals of BSE and NSE have been completed.

3. Management Discussion and Analysis (a) Overall Review

The overall performance of the Company during the financial year 2022-23 was outstanding and the order book of Rs. 27,546 Crores as at March 31, 2023, which is approximately 17 times its FY 2021-22 order book, provides growth visibility and represents the largest order book value in the Companys history and marks its transformational journey in terms of the Companys size of business.

(b) Segment Review

During the year, the Directors have identified the following reportable segments: a) Freight Rail Systems - Consists of manufacturing of Wagons, Loco Shells, Bogies, Couplers and its components.

The "Shipbuilding, Bridges and Defence" (SBD) segment was merged with Freight Rail Systems, during the year. b) Passenger Rail Systems - Consists of designing and manufacturing of Metro, Passenger Coaches, EMUs, Train Sets, Mono Rail, Propulsion equipment, Traction Motors and its components.

The segment wise performance is given below:

(Rs. in Lakhs)






Change %



Change %

Segment Revenue (Gross)

Freight Rail Systems







Passenger Rail Systems














Segment Results

Freight Rail Systems







Passenger Rail Systems














Total Profit / (Loss) before Tax

from continuing operations







Total Profit / (Loss) after Tax

from discontinued operations







Total Profit / (Loss) after Tax







During the year under review, the revenue from Freight Rail Systems segment (FRS) is higher by 76% and PBDT by 36% as compared to the previous financial year. About 82% of the Companys standalone revenue has come from this segment. The Company has the largest installed capacity of 8400 wagons per annum with state of the art facility at its Plant in Titagarh, W.B. The Company continues to be the market leader in this business segment and for the last few years has been awarded more than 50% of total orders placed by Indian Railways (‘IR) making it the largest supplier of wagons.

The FRS received the largest ever order in the history of the Company as well as of Indian Railway (IR) for manufacture and supply of 24,177 Wagons valued at over Rs. 7,800 Crore in May, 2022 which is required to be executed over a period of 39 months. The execution of this order has been undertaken with the augmented infrastructure and capacity, keeping the focus on optimisation of production costs and efficiencies. IR is modernising and upgrading the infrastructure at a remarkable speed and therefore, the demand for wagons is expected to remain buoyant on a sustainable basis in the coming years.

Under the Passenger Rail Systems segment (PRS), the Pune Metro Project is a very important milestone for the Company. The Company along with its associate: TFA, had signed the first contract for design, development, manufacture and supply of 34 trains of 3 coaches each for Pune Metro (Maharashtra Metro Rail Corporation Limited). The delivery of the Coaches to Pune Metro has already commenced and the trains supplied have been put into passenger service. The following is pertinent in regard to the other significant developments during the FY 22-23 reported hereinbefore:

The Companys entry into highspeed trains segment i.e. the Vande Bharat trains is considered to be a pathbreaking development. The Companys consortium with BHEL for “Manufacturing cum Maintenance of Vande Bharat Trainsets including Up-gradation of the Government Manufacturing Units & Trainset Depots” for 80 Vande Bharat trainsets and comprehensive maintenance of the same for 35 years is valued approximately at Rs. 23,100 crores. The BHEL-TRSL consortium was the only AatmaNirbhar one that participated in the tender announced by the IR.

The consortium of Ramkrishna Forgings Limited (RKFL) and Titagarh has been awarded contract for “Manufacturing and Supply of Forged Wheels” pursuant to long term agreement under AatmaNirbhar Bharat” by Indian Railways and is setting up forged wheel manufacturing unit- a greenfield project with a capacity to manufacture 2 lakh forged wheels per annum. IR will ensure guaranteed off-take of 80,000 wheels per annum over a period of 20 years. The approximate value of this order is Rs.12,600 crores.

A contract has been executed with CRRC, the Chinese Railway Rolling Stock Corporation and Bangalore Metro Rail Corporation Limited (BMRC). BMRC had placed an order on CRRC to supply 216 metro coaches, however due to inability of CRRC to meet the conditions of “Make in India” the contract was not moving forward. The Company was able to step in and sign a tripartite contract to produce these coaches entirely at its plant in Uttarpara, West Bengal. With this, the Company has forayed into the stainless-steel coach manufacturing. The technical expertise/know-how is being provided by CRRC and the ability to manufacture stainless steel coaches would make Titagarh the first and only company in the passenger rolling stock to have facilities and capabilities to produce every type of passenger coaches viz. EMU and MEMU of carbon steel, aluminum body coaches for Pune Metro project and stainless steel coaches for Bangalore Metro.

Metro coaches is one segment in which the Company foresees a huge opportunity as the tier-I and tier-II cities are all going for metro as the most suitable urban rapid transport system.

The Companys performance during FY 2022-23 has been record breaking as it reported its highest ever quarterly revenue of Rs. 766 Crores during 3rd quarter of FY 23, which represents a growth of 101% as compared to last quarter of FY 2021-22. During the year under review, the Company has attained major successes through the supply of its first traction motor from the Companys state-of-the-art facility in Uttarpara, paving the way for the potentially a large market which can be used for the manufacture of metro cars..

“Make in India” initiative coupled with launch of Dedicated Freight Corridor (DFC), metro projects across all major Indian cities is expected to boost wagon and electrical train manufacturing industry in the country. The DFC wagons are expected to add to Companys revenues in near future.

The Company had earlier collaborated with ABB India Limited (ABB) to design, develop and manufacture state of the art 3 phase IGBT based propulsion systems for EMU/MEMU being manufactured at the Companys plant in Uttarpara, West Bengal, with certain components being supplied by ABB. Apart from significant market potential for the propulsion business, it is also strategically important for train production business. In the propulsion tenders, your Company is well placed and is expecting additional orders. The trial production of the traction motors and the traction converters has already commenced at the Companys facilities and the regular production expected to start during current year would be another important milestone as it would mark the Companys move into a high technology area of propulsion electronics.

The efforts are also on to develop an export market for both the freight wagons and transit train business. International certification and application for accreditation of services have already been completed for wider acceptance of its products globally. Efforts are being made to take the presence of the Company beyond Europe through the Italian associate engaged in transit train manufacturing. The Indian and Italian operations would also be futher synergised to cover the global market for both the freight wagons and transit business.

(c) Overseas Operating Associate: Titagarh Firema SpA, Italy (TFA)

The financial year ended March 31, 2023 witnessed a series of positive events as follows:

1. Investment agreement with Invitalia An agreement with Agenzia nazionale per lattrazione degli Investimenti e lo sviluppo di impresa S.p.A a company/ agency owned by the Government of Italy was executed with the shareholders of TFA on 8th September, 2022 pursuant whereto the Government of Italy through its investment arm, Invitalia and Hawk Eye, a private equity firm based in UAE, have invested a total of 14.5 million as primary infusion into TFA resulting in their stake of 44% in the equity capital of TFA and 5.5 million brought in by the promoter shareholders, which in aggregate increased the equity of TFA from 13 million to 33 million which has resulted in not only improving the liquidity position, but also the ratios of the company . The investment by Invitalia is to support inter alia in the process of industrial growth of the company. With this capital infusion, TFA ceased to be a subsidiary of TRSL and post investment, the board of TFA has also been restructured.

2. Order Book: TFA was awarded a framework contract valued at 732.54 million for 33 trainsets, in consortium (RTI) with the international company SKODA Transportation. Subsequently, the first contract for 70 carriages for a value of 138 million has been signed in June, 2023 The contract also includes the assignment of the service and maintenance business for an amount of 221.99 million (51% share). The order book thus amounts to 1,393.09 million with the award of this contract.

3. Completion of end-of-life contracts (including legacy contracts) - During the financial year 2022-23 majority of the legacy contracts, which were inherited at the time of the acquisition of Firema Trasporti S.p.A in TFA, and some other onerous contracts causing substantial losses and adversely affecting liquidity over the years, were completed.

4. Integration of the sites and rationalization of the workforce In order to optimise costs and increase production efficiency, TFA has implemented consolidation of all operational activities in a single site in Caserta coupled with the simultaneous optimisation of the areas dedicated to the different production lines: passenger carriages and freight wagons. Such integration and rationalising of the manpower will improve the hourly rate and make TFA more competitive going forward.

The acquisition of TFA has enabled the Company to enter into the passenger rolling stock business in India and win the contract of Pune Metro for 102 coaches of which, 9 coaches were manufactured and supplied from Italy and the balance 93 coaches are being produced in India. TRSL is able to qualify in most of the Indian tenders for passenger rolling stock on its own, however in very large tenders in domestic market, TRSL has and will continue to participate in consortium with TFA. In terms of the technology & designs available, the design centres of Italy and India work under close coordination with each other. This makes TRSL the only company in India to have the technology and the capability to produce both stainless steel as well as aluminum metro coaches and TRSL intends to have capacity of about 250 cars in the first phase in India, to be enhanced gradually to 840 cars going ahead.

Overall, FY 2023-24 is expected to benefit from the positive impact on overall fixed cost containment, efficiency and gross contract margins owing to the steps taken in FY 2022-23 toward improvement, as mentioned hereinabove.

(d) Industry overview of Business Segments Freight Rolling Stock

The railway network in India spans an extensive track length of 126,366 km and includes 7,335 stations. The Union Budget 2023 has allocated a record capital outlay of $29 billion to the Indian Railways, aiming to construct new trains, railway tracks, enhance passenger facilities, and upgrade the infrastructure to a world-class standard. In the fiscal year 2022-23, a remarkable achievement of laying 5,243 km of tracks was accomplished, surpassing the previous years achievement of 2,909 km. This milestone also marked the highest-ever daily track laying rate of 14.4 km.

During the financial year 2022-23, a record-breaking loading of 1,512 million tonnes (MT) of freight was achieved, surpassing the previous years loading of 1,418 MT. The freight transport unit NTKM (Net Tonne Kilometre) witnessed an impressive growth rate of 10%, surpassing 900 billion NTKMs for the first time, reaching 903 billion NTKMs in FY23, up from 820 billion NTKMs the previous year. The Indian Railways reported a record revenue of Rs 2.40 lakh crore in the fiscal year 2022-23, reflecting a growth of over 25% over the previous year. Freight revenue also experienced significant growth, reaching Rs 1.62 lakh crore, marking an increase of almost 15%.

The implementation of the National Rail Plan (NRP) is set to bring about a major transformation in the freight operation of the Indian Railways. The NRP aims to enhance capacity and efficiency throughout the rail system, projecting a four to six-fold increase in freight traffic in the coming years. This will involve expanding the fleet and capacity to meet the NRP goals through infrastructure augmentation and improved operations. With the objective of contributing approximately 1.5% to the countrys GDP, the railway sector in India aims to support 45% of the modal freight share of the economy through robust infrastructure. In order to bolster freight transportation, the government has accelerated the development of Dedicated Freight Corridors (DFC) along crucial high-density routes. Additionally, the Indian Railway has implemented a comprehensive set of strategies to augment its market share in the freight segment. These measures encompass a variety of tariff rationalization and freight incentive schemes.


The Indian Rail Freight Industry is experiencing significant growth and improvements, with ambitious plans and increased investment aimed at enhancing capacity, efficiency, and sustainability. Annual freight target is expected to increase from 1400m tonnes to 3000m tonnes by 2027 implying an increase in the wagon fleet from current ~336,900 to ~500,000 by 2027. Additionally, plans are underway to develop 100 PM Gati Shakti Cargo terminals for multimodal logistics within the next three years. The wagon industry, which previously faced challenges due to under-utilization of capacities, is expected to witness improvement with substantial orders from Indian Railways and the private sector. With the commissioning of dedicated freight corridors and a goal to increase the share of freight transport through railways, the Indian Railways plans to procure 90,000 wagons by 2025 which is the largest in history and it is nearly 5 times the number of wagons procured by railways in a year.

Passenger Rolling Stock

Indian Railways passenger revenue has achieved an unprecedented growth of 61% in FY23 reaching Rs 63,300 crore. The fiscal year 2022-23 witnessed the highest-ever commissioning of new lines and doubling/multi-tracking covering 5243 km. Additionally, 6565 km of track were electrified with an investment of Rs 6657 crore, driving the Railways closer to the goal of achieving 100% electrification in the current fiscal year. Substantial investment amounting to Rs 44,291 crore was made to procure modern rolling stock, enhancing passenger comfort, and augmenting the Railways loading capacity.

In the current time, the significance of urban mass transit systems has become paramount, primarily due to the exponential population growth and rapid urbanization, which have stretched the existing transportation networks to their limits. Recognizing the need for an effective solution, the government has turned to Mass Rapid Transport Systems (MRTS) like Metro, known for their cleanliness, reliability, speed, and efficiency. Acknowledging the numerous benefits offered by Metro railways, there has been a notable upsurge in the development of Metro services in many cities. As of April 2023, almost 860 kilometers of metro lines are operational, spanning 20 cities. Furthermore, the pace of progress has accelerated significantly, with a remarkable shift from an average monthly commissioning of 0.68 kilometers of metro lines before May 2014 to an impressive 5.6 km per month as of April 2023.

In 2019, the Indian Railways introduced Indias first indigenous Semi High-Speed train, known as Vande Bharat Express. As of July 2023, a total of 50 Vande Bharat trains have been incorporated into the railway network. The government has set forth an ambitious vision to transform the train transport ecosystem by launching Vande Bharat sleeper coaches, metro, suburban, and freight services throughout the country. Over the next few years, there is a plan to manufacture 8,000 Vande Bharat coaches, signifying a significant overhaul of the Indian Railways fleet and an increased inclusion of these semi-high-speed trainsets.


The concerted efforts towards developing urban mass transit systems and modernizing the Indian Railways have paved the way for improved passenger experiences and increased transportation efficiency across the country. The significant progress in metro services, introduction of Vande Bharat Express and strategic investments in rail infrastructure bodes well for the future development and sustainability of Indias transportation networks.

(e) Discussion on Financial Performance with respect to Operational Performance

The Company has taken various operational measures viz. consolidation of the different products in line with the plant capacities which resulted in improved efficiency by turning the plant into a centre of excellence for the particular product and incurring capital expenditure of around Rs. 100 crore in last two years for plant upgradation and making the production facilities state of the art, helping Company to increase productivity and achieve cost efficiency. All plants of the Company are ISO 9001: 2015 and ISO 14001:2015 certified. Continuing focus of the management is consistently on undertaking cost rationalization, better manufacturing processes, improved productivity and optimization of resource for improvement in performance aimed at achieving results better than the trend witnessed in the industries in which the Company operates. Viewed in this backdrop, the Companys performance for the year under review is considered to be satisfactory and in line with the circumstances prevailing.

(f) Overall outlook for the current year

In addition to the healthy order book as on date, the Companys focussed approach on fixed cost reduction in terms of consolidating the common functions and reducing duplication of manpower, consolidating its prominent position in the Rolling Stock business coupled with the access to the technology for Metro Coaches and diversified product portfolio, strategy of adopting innovative ways to cater to its customers and preparedness to seize opportunity in products/ projects for Metro and defence establishment of India make the outlook for the current year encouraging.

(g) Key Financial Ratios

As stipulated in the Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), as amended, the Company reports as follows: (a) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios or sector specific ratios, along with detailed explanations therefor:

Sr. No.

Key Financial Ratios



Difference (%)


Debtors Turnover Ratio (days)





Inventory Turnover Ratio (days)





Interest Coverage Ratio (times)





Current Ratio (times)





Debt Equity Ratio





Operating Profit Margin (%)





Net Profit Margin (%)




Notes on significant changes in financial ratios where change is > 25%:

Debt Equity Ratio: Variation is attributable to increase in borrowings during the year

Net Profit Margin: Variation is attributable to increase in turnover and profitability during the year (b) details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Key Financial Ratios



Difference (%)

Return on Net Worth (%)

- Before considering exceptional item




- After considering exceptional item




Notes on significant changes in financial ratios where change is > 25%: The increase is primarily due to increase in earnings as compared to the increase in volume of operations.

4. Dividend

The Board has recommended a dividend of 25% i.e. INR 0.50 per equity share of face value of Rs. 2/- each (previous year nil) for the financial year ended March 31, 2023, for the approval of the shareholders at the 26th Annual General Meeting of the Company. In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. As a result, the Company will pay the dividend after deducting applicable tax, if any at the source. The total dividend on equity shares for FY 2022-23, if approved by the shareholders, would in aggregate be about Rs. 6.36 Crores.

A Dividend Distribution Policy pursuant to Regulation 43A of the (Listing Regulations) which requires the top 1,000 listed companies (by market capitalisation) to formulate the same, has been adopted by the Board. The said Dividend Distribution Policy can be accessed on the website of the Company at https://titagarh.in/policies-and-codes.

5. Transfer to reserves

Your Directors do not propose to transfer any amount to the general reserve for the year under review.

6. Change in Nature of Business

The product portfolio of the Company has over the years undergone change and from being a Wagons manufacturer, other products viz. Freight Rolling Stock comprising railway wagons, components, shipbuilding, bridges & defence, and Passenger Rolling Stock consisting of Coaches (EMUs/MEMUs) including Metro Coaches, Transit & Propulsion systems and others are the two segments of the Company respectively named “Freight Rail Systems” and “Passenger Rail Systems.” Thus your Company is now present in the entire gamut of rail ecosystem.

7. Share Capital

As on March 31, 2023, the issued, subscribed and paid-up equity share capital of the Company stands at Rs. 23,91,42,178/ - comprising of 11,95,71,089 equity shares of Rs. 2/- each. During the year under review, the Company has not issued any shares or convertible securities or shares with differential voting rights nor granted stock options or sweat equity. During the current year, the paid-up capital of the Company has increased to Rs. 25,43,42,178/- upon allotment of 76,00,000 equity shares of Rs. 2/- each on preferential basis.

The Board in its meeting held on 17th March, 2023 approved the Titagarh Wagons Limited Employee Stock Options Scheme 2023, which was approved by the shareholders by way of Postal Ballot on 26th April, 2023. The Company has also received In-principle approval from Stock Exchanges.

8. Change in name of the Company

The name of the Company was changed to Titagarh Rail Systems Limited in line with the expanded business portfolio in rail systems space and to better reflect the Companys increasing presence across the entire gamut of operations in the rail ecosystem. Fresh Certificate of incorporation pursuant to change of name was issued by the Registrar of Companies on 19th May, 2023.

9. Awards & Achievements

The Company received several notable recognitions during the year:

Shri Umesh Chowdhary, VC&MD, Titagarh Group has been recognized as one of the Most Promising Business Leaders of Asia 22-23.

The Company was featured among the NextGen Leaders of India in the esteemed platform "Ubharta Bharat," celebrating a remarkable 25-year journey of Indias transformative progress.

The Company was invited to participate in the 4th Edition Rail Analysis Innovation & Excellence Summit 2023 as a VIP Panellist. The event was graced by the presence of Shri Prithish Chowdhary.

The "Next Generation Mobile Nodes" built by Titagarh, were showcased during the 74th Republic Day Parade 2023, held at Kartavya Path, New Delhi, India.

10. Credit Rating

In August 2022, CRISIL Ratings has revised its outlook on long-term bank facilities of the Company to ‘Positive from ‘Stable while reaffirming the rating at ‘CRISIL A-.

11. Material Changes and Commitments after the balance sheet date:

No material changes and commitments have occurred since the date of close of the financial year, to which the financial statements relate, till the date of this report, which might affect the financial position of the Company.

12. Investor Education and Protection Fund (IEPF)

As stipulated by the applicable provisions of the Companies Act, 2013 (‘the Act) read with IEPF (Accounting, Audit, Transfer & Refund) Rules, 2016, as amended (‘the IEPF Rules) all unpaid or unclaimed dividend required to be transferred by the Company to the IEPF has been/ shall be transferred, details whereof are provided on the Companys website: www.titagarh.in. Pursuant to the provisions of Section 124(6) of the Act read with the IEPF Rules, all the shares on which dividends remain unpaid or unclaimed for a period of seven consecutive years or more shall be transferred to the demat account of the IEPF Authority (‘IEPF Account) as notified by the Ministry of Corporate Affairs. In accordance with the said provisions, the Company had executed and submitted the necessary documents for transfer of 9,486 equity shares of Rs. 2/- each, to the IEPF account, on 18th November, 2022, in respect of which dividend had not been claimed by the members for seven consecutive years or more as on the cut-off date, i.e. 22nd October, 2022. The details of all shares transferred to the IEPF Account are uploaded on the Companys website.

The Company identified 200 shareholders holding 9,953 equity shares in aggregate, who have not claimed their dividend consecutively since FY 2015-16 and therefore shares held by them were liable to be transferred to the IEPF Account on due date i.e. 15th April, 2023. The Company sent a communication to all concerned with information regarding transfer of their shares and reminder for taking appropriate action for claiming the dividend unclaimed on their shares and also published a Notice in the leading newspaper both in English and Vernacular language on 14th January, 2023, which was also uploaded at the website of the Company and the Stock Exchanges. Subsequently, the Company has executed and submitted necessary documents for transfer of 9,953 equity shares of Rs. 2/- each, to the IEPF account, on 15th May, 2023, in respect of which dividend had not been claimed by the members for seven consecutive years or more as on the cut-off date, i.e. 15th April, 2023.

13. Risk Management, Risks and Concerns

A Risk Management Policy to identify and assess the key risk areas, monitor mitigation measures and report compliance which is in line with the provisions of the Act and Listing Regulations has been adopted by the Company. Based on a review, major elements of risks have been identified and are being monitored for effective and timely mitigation.

The Company has laid down governance procedures around information, communication and risk reporting to inform the Risk Management Committee, the Audit Committee and the Board of Directors about risk assessment, mitigation effectiveness evaluation and related outcome and status.

The Company has a Risk Management Committee of the Board of Directors of the Company under the Chairmanship of Shri Atul Joshi, Independent Director of the Company, to assist the Audit Committee and the Board of Directors in overseeing the Companys risk management processes and controls.

The strategic risks forming part of the Enterprise Risk Management process are also aligned with the audit universe, to the extent seen appropriate/ relevant.

14. Subsidiary Companies, Associates and Joint Ventures

A report containing the details required under Section 134 of the Companies Act, 2013 (‘the Act) read with Rule 8(1) of the Companies (Accounts) Rules, 2014 in respect of performance and financial position for the financial year ended March 31, 2023, of subsidiary: Titagarh Singapore Pte. Ltd., Singapore; associate: Titagarh Firema SpA, Italy (TFA) and Joint Venture Company: Titagarh Mermec Private Limited included in the Consolidated Financial Report (CFS) in the Form AOC-1 is annexed to this Report and marked as Annexure DR-1. The CFS is attached to this Annual Report.

During the year under review, Titagarh Firema SpA, Italy, ceased to be the subsidiary of the Company w.e.f. 8th September, 2022. Further, Titagarh Bridges and International Private Limited, a wholly owned subsidiary has been amalgamated with the Company as per Scheme of Amalgamation approved by the Honble National Company Law Tribunal (NCLT), Kolkata Bench vide its Order dated 26th October, 2022, with 1st April, 2021 as the Appointed Date.

Your Company in consortium with Ramkrishna Forgings Limited (RKFL) has incorporated a Joint Venture Company (JVC) in the name and style of “Ramkrishna Titagarh Rail Wheels Limited” (RTRWL) on 9th June, 2023, for execution of the Project “Manufacturing and Supply of Forged Wheels” under long term Agreement under AatmaNirbhar Bharat. Further, a Shareholders Agreement has been executed on 2nd August, 2023 for operation and management of RTRWL.

The Board of Directors at its meeting held on 17th March, 2023 has approved incorporation of a private limited company in India in joint venture with Titagarh Firema SpA, Italy, associate of the Company, in the name and style of “Titagarh Firema Engineering Services Private Limited” or any other name as approved by the Registrar of Companies, for the purpose of engineering and design related services to support the Transit & Propulsion business. The Board also approved investment by the Company of maximum amount of Rs. 5 Crore in the equity of the proposed joint venture company.

15. Loans, Guarantee and Investments

Particulars of loans, guarantees and investments made by the Company pursuant to the Section 186 of the Act are furnished under notes to financial statements. The Company has been informed that the said loan, guarantee and security are proposed to be utilised by each recipient for its general business/corporate purposes.

16. Significant and Material orders

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

17. Copy of the Annual Return

Pursuant to the provisions of Section 92(3) of the Act read with Section 134(3)(a), the copy of the annual return for the financial year ended March 31, 2023, is available on the website of the Company www.titagarh.in (https://titagarh.in/report/ annual-report) and the same can be viewed by the members and stakeholders of the Company.

18. Related Party Transactions

All Related Party Transactions (RPTs) are entered into by the Company pursuant to compliance with the applicable laws and also in accordance with the policy adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the Listing Regulations and based thereon final approval of the Board is obtained. The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act and as mentioned in form AOC-2 of the Rules prescribed in the Companies (Accounts) Rules, 2014 under the Act are annexed hereto and marked as Annexure DR-2.

19. Number of Board Meetings

The Board of Directors met Eleven (11) times during the financial year ended March 31, 2023 as per the details provided in the Corporate Governance Report forming part of Annual Report.

20. Composition of Audit Committee

The Audit Committee constituted by the Board has Shri Atul Joshi as Chairman and Shri Manoj Mohanka and Shri Sunirmal Talukdar as the members. Further details are provided in the Corporate Governance Report forming part of Annual Report. During the year all recommendations made by the Audit Committee were accepted by the Board.

21. Directors and Key Managerial Personnel

The shareholders at their 25th Annual General Meeting held on 15th September, 2022 approved the following appointment/ re-appointment: - the re-appointment of Shri Atul Joshi (DIN: 03557435) as Independent Director to hold office for a second term of five years w.e.f. 24th January, 2023.

- the appointment of Shri Prithish Chowdhary as Whole-time Director designated as Director (Marketing & Business Development) for a period of five years w.e.f. 13th August, 2022 Based on the recommendation of Nomination and Remuneration Committee (“NRC”), Shri Saket Kandoi was appointed as Director (Freight Rolling Stock) w.e.f. 17th March, 2023 During the year under review, Shri Sudipta Mukherjee, Director (Freight Operations) resigned w.e.f. 17th March, 2023. The Board places on record its sincere appreciation for the services rendered by Shri Sudipta Mukherjee as Director (Operations) of the Company.

In terms of Section 149 of the Act and Listing Regulations, Shri Atul Joshi, Shri Manoj Mohanka, Shri Sunirmal Talukdar, Shri Sushil Kumar Roongta, Shri Krishan Kumar Jalan and Ms Nayantara Palchoudhuri are the Independent Directors of the Company as on the date of this report Based on the recommendation of the NRC and the Audit Committee, the Board of Directors of the Company had approved:

Assignment of additional role of Chief Business and Risk Officer to Mr. Anil Kumar Agarwal w.e.f. 18th November, 2022 and;

Appointed Shri Saurav Singhania as Jt. CFO and designated him Group Finance Controller & Jt. CFO w.e.f. 18th November, 2022.

The Board has pursuant to the recommendation of NRC at its meeting held on 17th March, 2023 appointed Shri Dinesh Arya as the Company Secretary and Chief Compliance Officer (Key Managerial Personnel) w.e.f. 17th March, 2023.

Shri Ravi Prakash Mundhra who was appointed Company Secretary on 13th August, 2022 resigned w.e.f. 17th March, 2023. Smt. Rashmi Chowdhary, Non-Executive Director, retires by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

To strengthen the composition of the Board and based on recommendations of the NRC, the Board of Directors of the Company at its meeting held on 4th September, 2023 has approved appointment of Shri B P Rao (DIN: 01705080) and Shri Debanjan Mandal (DIN: 00469622), as Additional Directors (Category-Independent) of the Company w.e.f. 4th September, 2023. Proposal for their appointment is being placed before the shareholders for their approval at the ensuing Annual General Meeting.

The information prescribed by Listing Regulations in respect of the above-named Directors is given in the Notice of 26th Annual General Meeting.

22. Evaluation of the Boards performance, Committee and Individual Directors

In compliance with the Act and Listing Regulations, the performance evaluation of the Board, Committees and Individual Directors was carried out during the FY 2022-23 as per the details set out in Corporate Governance Report.

23. Declaration by Independent Directors

Declarations pursuant to the Sections 164 and 149(6) of the Act and Listing Regulations and affirmation of compliance with the Code of Conduct as well as the Code for Regulation of Insider Trading adopted by the Board, by all the Independent Directors of the Company have been made. In the opinion of the Board, the Independent Directors hold highest standard of integrity and possess the requisite qualifications, experience, expertise and proficiency.

24. Remuneration Policy and remuneration

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

25. Corporate Governance Report

The Company has complied with the corporate governance requirements under the Act and Listing Regulations. A separate section on Corporate Governance under Listing Regulations along with a certificate from a Company Secretary in Practice confirming compliance is annexed to and forms part of the Annual Report.

26. Business Responsibility and Sustainability Report (BRSR)

In compliance with Regulation 34(2)(f) of Listing Regulations, the Company has included Business Responsibility Report, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective.

27. Internal Control System

The Company has system of internal controls and necessary checks and balances so as to ensure: a. that its assets are safeguarded; b. that transactions are authorised, recorded and reported properly; and c. that the accounting records are properly maintained and its financial statements are reliable.

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

28. Vigil Mechanism / Whistle Blower Policy.

A fraud and corruption free environment as part of work culture of the Company is the objective and with that in view a Vigil Mechanism Policy has been adopted by the Board which is uploaded on the web site of the Company at www.titagarh.in. No complaint of this nature has been received by the Audit Committee during the year under review.

29. Internal Complaints Committee

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the further details of which are given in the Corporate Governance Report. No complaint was lodged with the Committee during the financial year 2022-23.

30. Directors Responsibility Statement

The Directors state that:

Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31, 2023 had been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

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

The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The directors had prepared the Annual Accounts on a going concern basis; and

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

The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31. Statutory Auditor & Auditors Report

The shareholders of the Company at the Twenty Fifth Annual General Meeting held on 15th September, 2022, approved the re-appointment of Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (FRN 304026E/E-300009) as the Statutory Auditors of the Company for a second term of five consecutive years to hold the office till the conclusion of Thirtieth Annual General Meeting to be held in the year 2027. The Auditors report on standalone financial statements for FY 2022-23 does not contain any qualifications, reservations, or adverse remarks.

32. Consolidated Financial Statements

In accordance with IND-AS 24 issued by the Institute of Chartered Accountants of India, consolidated financial statements prepared on the basis of financial statements received from subsidiary company as approved by its Board, form part of this Report & Accounts.

The Auditors Report on the consolidated financial statement for the year ended 31st March, 2023 (CFS) does not contain any qualification, reservation or adverse remark.

33. Cost Auditors

M R Vyas & Associates, Cost Accountants, have been re-appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2023-24 subject to ratification of their remuneration by the shareholders in accordance with the provisions of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014. The Cost Audit Report for the financial year ended March 31, 2023 would be filed as stipulated by the applicable provisions of law. The Company is making and maintaining the accounts and cost records as specified by the Central Government under the provisions of Section 148(1) of the Act.

34. Secretarial Auditor

Secretarial Audit has been conducted by Shri Sumantra Sinha, Practicing Company Secretary appointed by the Board and their report is annexed hereto and marked as Annexure DR-3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

35. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act, 2013 during the financial year ended March 31, 2023.

36. Particulars of Remuneration of Directors/KMP/Employees

Disclosure pertaining to Remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the Rules) is annexed and marked as Annexure DR-4. The information pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report, is readily available for inspection by the members at the Companys Registered Office between 10.30 A.M. to 1 P.M. on all working days upto the date of ensuing AGM. Should any member be interested in obtaining a copy including through email (investors@titagarh.in), may write to the Company Secretary at the Companys Registered office.

Human Resources

A. Empowering the employees

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

B. Industrial Relations

Industrial relations at all sites of the Company remained cordial.

C. No. of Employees:

Manpower employed as at March 31, 2023 was 744.

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

A statement pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-5.

38. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2023 pursuant to the provisions of Section 135 of the Act and rules made thereunder is annexed to this Boards Report and marked as Annexure DR-6.

Apart from the above, the Company makes, inter alia, donations to the charitable institutions directly and through philanthropic organisations engaged in providing medical, education and other reliefs to the economically weaker sections of the society. Industrial Training Institute (the “ITI”) set up on the Companys land at Titagarh plant situated in Barrackpore, North 24 Parganas under Private Public Partnership (PPP) is yet another area. The ITI with access to the requisite infrastructure provided by the Company imparts hands-on training to the local people. A large number of students in various batches have passed and significant number of them are engaged in various jobs in the industry. The ITI has been recognised by the State Government as one of the best in the country and it caters to the requirement of skilled workmen by industrial units.

39. Listing

The Companys Equity Shares are listed at the BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE). The listing fees for the financial year ending on March 31, 2024 have been duly paid.

40. Compliance with Secretarial Standards

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

41. Other Disclosures

The Auditors of the Company have not reported any instances of fraud committed in the Company by its officers or employees as specified under section 143(12) of the Act, details of which needs to be mentioned in this Report.

There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof - There are no instances of onetime settlement during the financial year under review.

42. Forward Looking Statement

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

43. Acknowledgement

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

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board


J P Chowdhary

September 04, 2023

Executive Chairman