Titagarh Wagons Ltd Directors Report.

Dear Shareholders,

The Directors hereby present their Twenty-third Annual Report on the business and operations of Titagarh Wagons Limited (the Company or TWL) along with the audited financial statements, for the financial year ended March 31, 2020. The consolidated performance of Titagarh Group (the Company and its subsidiaries) has appropriately been referred to in this Report.

1. Profit, Retention & Dividend

Titagarh Groups financial performance during the financial year ended March 31, 2020 was as follows:

Rs. in lakhs



Particulars 2019-20 2018-19 2019-20 2018-19
Revenue from operations 148421.49 106041.04 176632.43 155928.84
Other income 1713.60 3438.87 3402.20 3241.10
Total Income (TI) 150135.09 109479.91 180034.63 159169.94
Earnings before interest, tax, depreciation and amortisation (EBIDTA) 14602.41 9589.13 15495.94 11598.27
Less: Finance Cost 6502.92 3937.52 8827.29 6517.76
Less: Depreciation and amortization expenses 1813.89 1612.07 2912.68 2399.10
Profit/(Loss) before exceptional items & tax 6285.60 4039.54 3755.97 2681.41
Share of Loss of a joint venture - (10.18) (3.64)
Exceptional items (16135.44) (12695.46) - 784.53
Profit/(Loss) before tax (9849.84) (8655.92) 3745.79 2677.77
Tax Benefits/Expenses 1857.35 3125.72 2050.55 3299.68
Profit/(Loss) for the year after tax from continuing operations (7992.49) (5530.20) 5,796.34 5,192.92
Loss from discontinued operations (net of tax) - - (9,410.55) (7,445.53)
Profit/(Loss) for the year after tax (7992.49) (5530.20) (3,614.21 (2,252.61)
Other Comprehensive Income/(Loss) (net of tax) (11.75) 1.35 528.28 (725.23)
Total Comprehensive Income for the year (8,004.24) (5528.85) (3085.93) (2977.84)

2. Effect of Amalgamation in the Financials

During the year under review, the Board of Directors had approved the Scheme of Amalgamation (Scheme) of Cimmco Limited (Cimmco) and Titagarh Capital Private Limited (TCPL) - two subsidiaries of the Company, with the Company. The Honble National Company Law Tribunal, Kolkata Bench (NCLT) by an order dated 30th September, 2020 (Order) has sanctioned the Scheme. The Appointed Date as per the Scheme being 1st April, 2019, the effect of amalgamation has been considered in the books retrospectively (the Effect) and accordingly, the figures for the year ended 31st March, 2020 include the results of the Company and its two erstwhile subsidiaries namely Cimmco and TCPL and further the figures for the corresponding year ended 31st March, 2019 have been restated giving the effect from the beginning of the comparative period in the financial statements, i.e. 1st April, 2018 as per the requirements of IND AS 103 as per the accounting treatment specified in the Scheme.

The Scheme was approved by the respective Board of Directors on August 14, 2019 and after receipt of no-objection from the Stock Exchanges it was filed with NCLT in January, 2020. Approval by the shareholders & creditors of the Company was accorded at their respective meetings convened on April 29, 2020 pursuant to the direction of NCLT and although the petition for confirmation of the Scheme was filed by the Company on May 11, 2020, after persistent follow up, the matter was listed by NCLT for hearing on August 17, 2020 only and finally heard on September 07, 2020 when the order for sanctioning the Scheme was reserved. The NCLT passed the final order dated September 30, 2020 sanctioning the Scheme. As per the Scheme, the shareholders of Cimmco shall be entitled to 13 equity shares of Rs. 2/- each fully paid up for every 24 equity shares of Rs. 10/- each fully paid held by them on a record date as may be determined, to be issued and allotted by TWL. No consideration is payable in case of amalgamation of TCPL (wholly owned subsidiary) as the shares held by your Company therein shall be cancelled. The Company had no option but to wait for the Order from NCLT to ensure that the financials are reported after giving effect to the Scheme for the ultimate benefit of shareholders/stakeholders with regard to clarity thereof.

3. Performance and Outlook

The Companys performance during the Financial Year 2019-20 (FY 19-20) on a standalone basis improved substantially as compared to the previous financial year with total income up from Rs. 109479.91 lakhs in FY 18-19 to Rs. 150135.09 lakhs in FY 19-20 i.e. an increase of 37%; EBIDTA (before exceptional items) from Rs. 9589.13 lakhs in FY 18-19 to Rs. 14602.41 lakhs in FY 19-20 recorded an increase of 53% and PBT (before exceptional items) from Rs. 4039.54 lakhs in FY 18-19 to Rs. 6285.60 lakhs in FY 19-20 being higher by about 56%. However, the exceptional items as detailed in the Notes on Accounts, accounted for as a matter of prudence led to Loss for the year amounting to Rs. 7992.49 lakh.

On a consolidated basis, the Groups total income during the FY 19-20 increased from Rs. 159191.54 lakhs in FY 18-19 to Rs. 180,034.63 lakhs in FY 19-20 i.e. an increase of 13.09% and EBIDTA at Rs. 15495.94 Lakhs in FY 19-20 was up by 13.64% against Rs. 11598.27 Lakhs in the previous financial year. Loss from the discontinued operations on account of one overseas subsidiary resulted in Loss after Tax of Rs. 3614.21 Lakhs during the financial year ended March 31, 2020.

The financial performance as reported above was achieved despite the outbreak of COVID-19 and the lockdown announced by the Governments in the countries where the Group operates as a measure to combat the pandemic, however the extent of impact would also be experienced in the financial results for the current financial year due to the time required for synchronization of value-chain with efforts being made for reaching normal/pre-COVID level of operations which were resumed in phases.

Your Companys order book is healthy and execution of the contract for manufacture of 102 Metro Coaches for Pune Metro Rail is progressing as per schedule. Further, the amalgamation of Cimmco Limited with the Company would facilitate achieving improved operational, synergy in operations by combining the activities of the two companies, better economic control, benefits of a single centralized system of management, and help garner larger share of orders for Wagons and foray into products for Defence establishment of the country for which industrial license has been issued by the Ministry concerned. With continued participation in various tenders for the other segments viz. shipbuilding, bridges and specialized equipment and consistent focus on improvement in the operations of overseas subsidiary in Italy combined with resource optimization undertaken by the management, the outlook for the current year is reasonably encouraging.

Management Discussion and Analysis

(a) Overall Review

The overall performance of the Company during the financial year 2019-20 improved remarkably, however the exceptional items viz. impairment of investment in the overseas subsidiaries resulted in loss for the year.

(b) Segment Review

Rs. Lakhs



Particulars 2019-20 2018-19 Change % 2019-20 2018-19 Change %
Segment Revenue (Gross)
Wagons & Coaches 143789.09 85501.96 68.17% 172000.03 135389.76 27.04%
Specialised Equipment & Bridges 2112.33 7352.70 (71.27)% 2112.33 7352.70 (71.27)%
Shipbuilding 2,520.07 13151.65 (80.84)% 2520.07 13151.65 (80.84)%
Others - 34.73 (100.00)% - 34.73 (100.00)%
Total 148421.49 106041.04 39.97% 176632.43 155928.84 13.28%
Segment Results
Wagons & Coaches 14284.95 4207.06 239.55% 14853.39 5942.20 149.96%
Specialised Equipment & Bridges 345.82 981.91 (64.78)% 345.82 978.27 (64.65)%
Shipbuilding 318.21 3195.69 (90.04)% 318.21 3195.69 (90.04)%
Others - (271.73) (100.00)% - (218.88) 100.00%
Total 14948.98 8112.93 84.26% 15517.42 9897.28 56.78%
Total Profit/(Loss) before tax (9849.84) (8655.92) (13.79)% 3745.79 1893.24 97.85%
Profit/(Loss) after Tax from discontinued operations - - - (9410.55) (7445.53) (26.39)%
Total Profit/ (Loss) after tax (7992.49) (5530.20) (44.52)% (3614.21) (2252.61) (60.45)%

During the year under review, the Company continued to consolidate its prominent position in the Wagons industry having been awarded the order for largest quantity by Indian Railways on Group basis in the last big tender and going forward with the combined capacities of Cimmco, your Company augur well for this segment. Apart from successful execution of the order from National Institute of Ocean Technology with launching of two sophisticated coastal research vessels before the scheduled delivery dates, which should improve the credentials of the Company in the shipbuilding business, the train propulsion and electricals business is expected to play very important role in growth of the Group in future backed by the credentials and technology of Titagarh Firema S.p.A., the Companys subsidiary in Italy

Your Company entered into an exclusive cooperation agreement with ABB India Limited (ABB) in June, 2020, to cater to the large and growing business of propulsion equipment (traction converters) for the Indian railway EMU/MEMU market. According to the agreement, Titagarh and ABB will work together to design, develop and manufacture state of the art 3 phase IGBT based propulsion systems for EMU/MEMU which would be manufactured in Titagarhs plant at Uttarpara, Kolkata with certain components being supplied by ABB.

An agreement has been executed by your Company and its subsidiary: Titagarh Firema SpA, Italy with Ansaldo Trasporti S.r.l. (ATR), Gesa Industry S.r.l. (GESA), Ansaldo Breda SpA (AB), all based in Italy, pursuant whereto TWL is to get a license for IPR and Projects for Trains, another segment which offers substantial scope for growth.

With a view to achieving substantial savings in power cost, your Company signed a power purchase Agreement with Fourth Partner Energy in September 2020 to procure 4.8 MW of solar power for its manufacturing facilities at Titagarh and passenger coach and propulsion unit at Uttarpara, to effectively replace approximately 25% of its current annual electricity demand with clean energy. All three power plants are expected to be commissioned by March 2021.

(c) Overseas Operating Subsidiary Titagarh Firema SpA, Italy (TFA)

The financial performance of TFA during the financial year ended March 31, 2020 was affected adversely mainly due to suspension of operations during the last quarter consequent to the measures announced by the Government of Italy to combat the spread of COVID-19 pandemic resulting in lower Revenue and Operating Profit. TFA was forced to close its production facilities with relative reduction of direct production hours starting from 16th March 2020 till later part of May, 2020. This situation has resulted in postponement of the activities with subsequent delayed delivery of several products which have therefore remained on the production lines even as TFA adopted necessary procedures necessitated by extraordinary regulations announced by the Government.

TFA achieved revenue of Euro 36 million during FY 19-20 compared to Euro 62 million last year. The reduction in revenue has been primarily due to completion of majority of the legacy orders during the initial part of the year and the later part was impacted due to Covid. Further substantial portion of the new order book is under design / prototype phase where in the revenue booking would be lower initially with the ramp up happening on commencement of the series production. However, it is important to note that both ongoing projects and new order received will show the execution in terms of revenue in the next year. Despite reduction of revenue by 41% as compared to previous year, the EBIDTA% has increased from 2.06% to 4.05% due to reduction in the overall fixed cost. This would help TFA going forward in order to maintain a very competitive rate per hour both for operations and design.

The main activities which took place during the year under review were:

• During the FY 19-20, TFA has seen substantial changes to its organisational structure with the induction of new management team from similar industry experience with the objective of reshaping the entire value chain aimed at re-launching the operations towards development and growth.

• The technical consolidation of the TFA order with subsequent increase of the reliability parameters and an acknowledged appreciation from the Customer;

• The launch of the Catania order (54 trains for the Circumetnea railway line). The design phase is in the advanced stage and the production of the prototype has started in compliance with the contractual schedule.

• In August, following the awarding of the Indian order for the Pune Metro, planning and design activities have been launched and building of the first car body has commenced.

• The delivery of the T21 project has begun, improving the delivery time thanks to having obtained approval for the put in service;

• An important milestone was the re?start of collaborations with important local players.

The FY 19-20 also marked the passage to international accounting principles which would make it possible to better compare the principal indicators of the company with those of other international operators. TFA has exercised the

option provided by Legislative Decree 28 February 2005, no. 38, as subsequently amended by Law Decree no. 91 of 24 June 2014, which regulates exercising the options provided for by article 5 of European Regulation no. 1606/2002 in the matter of international accounting principles, and has voluntarily adopted the International Financial Reporting Standards, issued by the International Accounting Standards Board, and adopted by the European Union (hereafter "International Accounting Principles" or "EU IFRS") for the first time for the preparation of this Financial Statement.

During the year ended March 31, 2020, TFA recorded a steep increase in the cash used in the operating activity amounting to Euro 11.80 million. The Management has prepared a Budget / Plan 2021 2025 (the "Budget / Plan"), approved by the Board of Directors on June 30, 2020 which shows a substantial financial balance of TFA, also considering the impact of Covid 19. The Budget/ Plan is examined, among other aspects, also as regards the reasonableness of the assumptions underlying the projections made by the management, by a qualified independent third party company.

Although the pandemic has not led to cancellation or reduction of orders, postponement of activities has been witnessed by TFA. Some invitations to tender have been deferred by a few months, though even in this case there is no evidence of potential reduction in the demand for the products manufactured by TFA.

TFA has decided on a well-structured strategic plan to address the impact of COVID-19 on the market and envisages the growth trend over the next five years which would allow the company to find new production level and greater efficiency would be translated into structured elements in dealing with the competition.

The current financial year is expected to see improvements in terms of profitability compared to the previous year owing above all to the start of production of new orders and a general increase in the productivity already the benefits wherefrom have started showing in the review of several business processes and policies for operating costs. The comprehensive value of the orders is to the tune of Euro 333 million (including the framework contract for Euro 216 mln), which places the company, for 2021, in a situation of significant coverage of the assumed revenue forecasts.

In particular, TFA expects to achieve in the current fiscal an important growth plan in terms of turnover volume, which would entail a significant cash absorption originating from the start of the new orders including Ferrovie Circumetena whose contract does not provide for the advance payment. This absorption has been estimated at around Euro 19.8 mln. In order to meet the financial need, a series of initiatives have been undertaken including:

• the use of the short term credit line with a Bank;

• new agreement of factoring with recourse;

• release of a security deposit in place with the Trenitalia customer;

• release of cash through optimisation of current asset levels achieved due to higher targeted invoicing during the fiscal year 2021;

• further actions are being sought under several stimulus packages announced by the Government of Italy to overcome the liquidity crisis created out of Covid-19 pandemic.

Financial year 2020- 2021 is expected to bring improvement in profitability compared to the previous year, due to margins from new orders and reduction in the hourly costs with significant increase of workloads and measures undertaken for TFAs operational efficiency both in terms of implementation of new business processes, optimizaiton policies adopted by management, reorganisation of various departments among which engineering where a new local unit in the city of Savona was built.

Further, the development of the project for a new intercity passenger car, also using government financing, would make it possible to enter into a new market area. In future, for the high power electric component, investments for the development of traction converters would be preferred while for the electric motors specialised businesses would be used.

Following the awarding of the Pune Metro project and in continuity with the strategy defined over recent years, all similar product opportunities on the Indian market will be pursued to maintain and consolidate the market share. The opportunity of launching a new tram in India is being evaluated by using a product platform already established on the European market.

(d) Order Book position

The order book of the merged entity stood at Rs. 2500 crore (approx.) today as against Rs. 2200 crore (approx.) at the time of declaring the financial results in the previous year. The order book is

well diversified across the different segments of the Company and going forward the revenue mix of the Company will undergo a substantial change with business other than Wagons contributing substantially to the top line.

The above order book includes new order received from Indian Railways during the month of September 2020 for supply of 1787 wagons amounting to approximately Rs 500 crore.

(e) Industry overview of Business Segments Wagons and Coaches

Indian Railways is the worlds 3rd largest rail network with 13,452 passenger trains and 9,141 freight trains. Freight traffic of Indian Railways in FY20 (provisional) stood at 999.51 million tonnes.

Private sector companies are being encouraged to participate in rail projects, which were earlier largely in the public domain. The cabinet approved participative models for rail-connectivity and capacity augmented projects, which allows private ownership of some railway lines.

PPP is being utilised in areas such as redevelopment of stations, building private freight terminals and private container train operations. With 100 per cent FDI allowed in the railway sector by the Government, freight traffic is set to increase significantly due to rising investment and private sector participation. Metro rail projects are being envisaged across many cities over the next ten years.

Growing industrialisation across the country has increased freight traffic in the last decade. India is projected to account for 40 per cent of the total global share of rail activity by 2050.


Under Union Budget 2020-21, the Government of India has allocated Rs 72,216 crore (US$ 10.35 billion) as capital support for Indian Railways. The Government has formulated a National Rail Plan, which will enable the country to integrate its rail network with other modes of transport and develop a multi-modal transportation network.

Freight remains the major revenue earning segment for Railways, accounting for 64 per cent of the total revenue in FY20, followed by the passenger segment. Dedicated Freight Corridor Corp. of India Ltd (DFCCIL) is already building two freight corridors - Eastern Freight Corridor from Ludhiana to Dankuni (1,856 km), and Western Freight Corridor from Dadri to Jawaharlal Nehru Port (1,504 km), at a total cost of Rs 81,000 crore (US$ 11.59 billion).

Metro railways

Metro trains are rail-based mass rapid transit systems that operate on a privileged right-of-way - either underground or elevated over street level, separated from all other modes of transport in an urban area. There are currently 13 operational metro systems in India with a total of 678.52 kilometres of operational metro lines and 540 stations. A further 550+ km of lines are under construction.

As per the latest National Urban Transport Policy, metro rail system is to be constructed in every city with a population of 20 lakh or more with Union Government providing financial assistance either directly or through multilateral funding agencies or through a combination of both. The number of metros expected to come up in India is about 50. Since the cost of a heavy metro is very high, various cities have been asked to explore options light metro, tram and monorail.

Metro rail system enables large-scale, rapid and low-cost movement of people while causing very little pollution as compared to conventional modes of transport for thickly populated areas where traffic is a major challenge.

However, making available the land for laying tracks, very large project expenditure, infrastructural issues are some of the major threats in Metro segment. The technologies used in various types of metros in terms of system voltages, axle loads etc are also a challenge which need to be decided based on the ridership, city layout and other related parameters.


Given rising urbanisation and increasing population levels in India, implementation of metro rail systems will become imperative as mass rapid transit systems are the best way to decongest traffic. National Urban Transport Policy also ensures that metros in some form or the other come up in cities thereby ensuring a steady requirement of metro rolling stock for the future.

Shipbuilding sector overview

The shipbuilding industry has a similar impact on the Indian economy as the infrastructure sector due to higher multiplier effect on investment and turnover (11.6 and 4.2 respectively) and high employment potential due to multiplier effect of 6.4. The shipbuilding industry is strategically important due to its role in national defense, energy security and for developing heavy engineering. As per a Ministry of Defence press release, at present all major warships and submarines under construction are being built at Indian shipyards (both PSU as well as Private Shipyards)

(Source: www.pib.nic.in)

Although the global shipping industry has been witnessing slowdown due to declining demand and overcapacity, the demand for various vessels and barges etc. from the Government establishment/Indian Navy offsets to certain extent the challenge.


The revival of the shipbuilding sector is a key part of the Central Governments Make in India initiative. Participation in various tenders is continuing and new orders are expected, though gradually on the basis of the 10-year policy package. The Central Government is targeting to increase Indias share of the global shipbuilding industry from current levels of 0.45% to 5% by 2020.

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

During the year under review, the Company took 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 thereby re-aligning the Companys business into four distinct parts viz. "Freight, Transit and Propulsion", "Shipbuilding", "Bridges & Defence". 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 in line with the circumstances prevailing.

(g) 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 sector coupled with the access to strong technology for Metro Coaches through its subsidiary in Italy and diversified product portfolio, strategy of adopting innovative ways to cater to its customers and preparedness to seize opportunity in products/projects for defence establishment of India combined with the benefits to be accrued upon the merger of Cimmco Limited and Titagarh Capital Private Limited with the Company make the outlook for the current year encouraging.

(h) Key Financial Ratios

As stipulated in the Regulation 34(3) of SEBI (LODR) Regulations, 2015, 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:

Sl. Key Financial Ratios 2019-20 2018-19 Difference (%)
1 Debtors Turnover Ratio (%) 11% 18% (38.89)%
2 Inventory Turnover Ratio (%) 14% 30% (53.33)%
3 Interest Coverage Ratio (times) 1.98 1.56 26.92%
4 Current Ratio (times) 2.40 1.26 90.48%
5 Debt Equity Ratio 0.26 0.33 (21.21)%
6 Operating Profit Margin (%) 8.68% 5.80% 49.66%
7 Net Profit Margin (%) (6.64)% (8.16)% 18.63%

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

1&2. Better Working capital Utilization

3. Increase is interest coverage is good and this is due to better operational reult.

4. Current ratio has improved and is within the permissible standards.

5. Debt Equity ratio has improved due to better operating margin and cash generated from operation being

used to repay/prepay the debt.

6. Operating profit margin is due to increase in sales and better profit margins on new contracts.

(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 2019-20 2018-19 Difference (%)
Return on Net Worth (%)
- Before considering exceptional item 7.70% 4.51% 70.73%
- After considering exceptional item (10)% (6)% (66.67%)

Notes on significant changes in financial ratios where change is > 25%: The decline is due to provision for impairment in investment and receivables from the Companys Italian & Singapore subsidiary made during FYE 31.03.2020, however the return on net worth before the above impact actually increased.by 70.73%.

4. Dividend

In view of the loss for the year, the Directors express their inability to recommend any dividend for the FY 2019-20.

5. Employee Stock Options Scheme/Change in Share Capital

Pursuant to approval of the shareholders, the Nomination and Remuneration Committee (also functioning as Compensation Committee) at its meetings held on March 4, 2015 and May 19, 2017 in accordance with the TWL Employees Stock Options Scheme, 2014 (ESOS) granted to the eligible employees 5,00,000 options each respectively, to be converted into equivalent number of equity shares of Rs. 2/- each fully paid as per the ESOS.

Options resulting in 35,000 equity shares and 43,250 equity shares allotted on 3rd April, 2019 and 18th June, 2019 respectively to the eligible employees upon exercise by them in conformity with ESOS led to increase in the paid up equity share capital to Rs. 23,12,12,340/- as at 31st March, 2020 consisting of 11,56,06,170 equity shares of Rs. 2/- each fully paid up. The equity shares so allotted rank pari-passu with the existing equity shares of the Company.

The disclosures as required under Regulation 14 of Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 have been placed on the corporate website of the Company www.titagarh.in

6. 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. However, the impact on the financial performance of the Company caused due to the outbreak of COVID-19 pandemic is explained separately in the notes to the financial statements.

7. Investor Education 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 6,567 equity shares of Rs. 2/- each, to the IEPF account, on 9th November 2019, 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. 13th October, 2019. The details of all shares transferred to the IEPF Account are uploaded on the Companys website.

The Company has identified 191 shareholders holding 6873 equity shares in aggregate, who have not claimed their dividend consecutively since FY 2012-13 and therefore shares held by them have been transferred to the IEPF Account on due date i.e. 24/09/2020. The Company had published a Notice in the leading Newspaper both in English and Vernacular language on 24th June, 2020 and 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. The details of such shareholders are uploaded on the Companys website.

8. Transfer to Reserves

There being no surplus, no amount is proposed to be transferred for the year under review to the general reserves.

9. Risk Management, Risks and Concerns

A Risk Management Policy to identify and assess the key risk areas, monitor mitigation measures and report compliance has been adopted. Based on a review, major elements of risks have been identified and are being monitored for effective and timely mitigation.

Risk management is an integral part of the Companys risk management policy adopted by the Board with periodic review by the Audit Committee and the Board. Prudence and conservative dealing with risks is at the core of risk management strategy being followed by the Company. The risks, both internal and external to which the Company is exposed to include macroeconomic, regulatory, strategic, financial, operational, value chain, human resources etc. and each of them is taken into consideration for development and maintaining of a robust mechanism for mitigation which is evolving with time and circumstances within which the Company operates.

10. Subsidiary Companies and Joint Venture

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, 2020, of subsidiaries: Titagarh Singapore Pte. Ltd., Singapore and Titagarh Firema SpA and Joint Venture Company: Matiere Titagarh Bridges Private Limited and 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-2. The CFS is attached to this Annual Report.

As reported hereinbefore two subsidiaries of the Company: Cimmco Limited and Titagarh Capital Private Limited have been amalgamated into the Company with effect from April 01, 2019 being the Appointed Date.

Pursuant to the order passed by the Commercial Court of Paris on 13th August, 2019 the Companys erstwhile wholly-owned Subsidiary in France: Titagarh Wagons AFR (TWA), is under liquidation and the Company is no longer in control of TWA w.e.f. 4th June, 2019 being the date when the start of the Rehabilitation Procedure was approved by the said Court. During the year, the group has de-recognised the entire assets & liabilities of TWA.

The Company has acquired the shares held by Matiere SAS, France (Matiere), representing 50% of the paid-up share capital of Matiere Titagarh Bridges Private Limited (MTBPL). As a result of the above, the shareholding of the Company in MTBPL has changed from 50% to 100% and thus MTBPL has become a wholly-owned subsidiary of the Company w.e.f. 14th July, 2020.

11. Copy of the Annual Return

Pursuant to the provisions of Section 92(3) of the Act, the copy of the annual return shall be uploaded on the website of the Company www.titagarh.in(https://titagarh.in/report/annual-reports) and the same can be viewed by the members and stakeholders after 48 hours from the conclusion of the ensuing 23rd Annual General Meeting of the Company.

12. Number of Board Meetings

The Board of Directors met Seven (7) times during the financial year 2019-20 as per the details provided in the Corporate Governance Report forming part of Annual Report.

13. 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.

14. 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.

15. 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.

During the year all recommendations made by the Audit Committee were accepted by the Board.

16. 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 SEBI (LODR) Regulations, 2015 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-3.

17. Corporate Governance Report

The Company has complied with the corporate governance requirements under the Act and SEBI (LODR) Regulations, 2015. 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.

18. 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.

19. Vigil Mechanism

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.

20. 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 2019-20.

21. Directors and Key Managerial Personnel

Pursuant to the recommendations of the Nomination and Remuneration Committee (NRC) and subject to the approval of the members the Company at the 21st Annual General Meeting (AGM), the Board at its meetings held on 4th February, 2019 and 29th May, 2019 passed resolutions for reappointment of Shri Sudipta Mukherjee (DIN: 06871871) as Whole-time Director w.e.f. 15th May, 2019 and appointment of Shri Anil Kumar Agarwal (DIN: 01501767) as Additional Director of the Company, designated as Director (Finance) and Chief Financial Officer w.e.f. 29th May, 2019, respectively. The members in their 21st AGM held on 20th September, 2019 have passed necessary resolutions for reappointment/appointment of Shri Sudipta Mukherjee and Shri Anil Kumar Agarwal for a term of five years.

Pursuant to the recommendations of the Nomination and Remuneration Committee (NRC) and subject to the approval of the members of the Company at ensuing AGM, the Board had on 21st August, 2019, 10th December, 2019, 22nd June, 2020 and 13th August, 2020 appointed Shri Vinod Kumar Sharma (DIN: 02051084), Shri Sunirmal Talukdar (DIN: 00920608), Ms. Nayantara Palchoudhuri (DIN: 00581440) and Shri Krishan Kumar Jalan (DIN: 01767702) as Additional Director (Category: Independent) respectively, w.e.f. the date of passing of such resolution to hold office for a term of 5 years.

Shri D.N. Davar, Shri V.K. Sharma and Shri Ramsebak Bandyopadhyay, tendered their resignation from the position of Independent Director of the Company on 13th September, 2019, 28th February, 2020 and 4th May, 2020 respectively owing to their personal reasons.

Pursuant to the recommendation of the NRC, the Board at its meeting held on 31st July, 2020 subject to approval of the shareholders at the ensuing AGM reappointed Shri Umesh Chowdhary (DIN: 00313652) as the Managing Director & Vice Chairman of the Company for five years w.e.f. 1st October, 2020.

The Board has recommended necessary resolutions at the ensuing 23nd AGM for the appointment of Shri Sunirmal Talukdar, Ms. Nayantara Palchoudhuri and Shri K.K. Jalan as Independent Directors and Shri Umesh Chowdhary as the Managing Director & Vice Chairman of the Company.

Shri J.P. Chowdhary, Executive Chairman, retires by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.

The information prescribed by SEBI (LODR) Regulations, 2015 in respect of the above named Directors is given in the Notice of Twenty Third Annual General Meeting.

During the year under review, there was no change in the Key Managerial Personnel of the Company except the aforesaid appointment/reappointment of Shri Anil Kumar Agarwal and Shri Sudipta Mukherjee.

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

In compliance with the Act and SEBI (LODR) Regulations, 2015, the performance evaluation of the Board, Committees and Individual Directors was carried out during the FY 2019-20 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 SEBI (LODR) Regulations, 2015 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.

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. 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, 2020 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 loss 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.

26. Statutory Auditors

Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (FRN 304026E/E-300009), were appointed as Statutory Auditors of the Company at the 20th AGM until the conclusion of 25th AGM, subject to ratification of their appointment at the AGM every year. In view of the amendment under the provisions of section 139 of the Companies Act, 2013, the members passed a resolution in the 21st Annual General Meeting held on 29th September, 2018 to dispense away the requirement of ratification of appointment.

The Auditors Report on the standalone financial statement for the year ended 31st March, 2020 does not contain any qualification, reservation or adverse remark. As regards emphasis of matter being Note No. 4 (revised authorized share capital after merger, delay in filing of financial results with SEBI and application of the Company for extension of time for submission thereof and managements assessment of the financial impact due to the Covid-19 pandemic) placed by the Auditor in their Report on Standalone financial statement, the Notes No. 3, 5 and 6 are self-explanatory and no further explanation is considered necessary in this Report.

27. Consolidated Financial Statements

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

The Auditors Report on the consolidated financial statement for the year ended 31st March, 2020 does not contain any qualification, reservation or adverse remark, except qualified opinion in regard to non-compliance with Ind AS 110 Consolidated Financial Statements for the year ended March 31, 2020 owing to non-consolidation of the financial results of Titagarh Wagons AFR (TWA) for the period from April 1, 2019 to June 4, 2019. In this regard, the Company had submitted the Statement on impact of audit qualifications to the Stock Exchanges on 8th October, 2020 explaining that the Commercial Court of Paris vide its judgement dated 13th August 2019 had approved a plan for transfer of business and assets of the Companys wholly-owned Subsidiary in France: TWA to another bidder and ordered for liquidation of TWA. On 4th June 2019, the Commercial Court of Paris has approved the start of Rehabilitation Procedure and from said date, Parent Company was no longer in control of TWA, under French law. Accordingly, the Group has derecognised the net assets value of TWA from its consolidated financial statements. The net assets value as on 4th June 2019 has been considered as the same value as appearing on 31st March 2019 since complete financial information including the financial statements from 1st April 2019 till 4th June 2019 is not available for TWA on account of reasons stated above. The de-recognition based on the net asset value as on 31st March 2019, instead of 4th June 2019 will not have any material impact on the total consolidated profit / (loss) before tax except disclosure under respective line items. As regards emphasis of matter being Note No. 5 (revised authorized share capital after merger, delay in filing of financial results with SEBI and application of the Company for extension of time for submission thereof, managements assessment of the financial impact due to the Covid-19 pandemic and preparation of accounts of TFA on going concern basisi) placed by the Auditor in their Report on Consolidated financial statement, the Notes No. 4, 6, 8 and 9 are self-explanatory and no further explanation is considered necessary in this Report.

28. Cost Auditors

M R Vyas & Associates, Cost Accountants, have been reappointed 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 2019-20 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 31st March, 2020 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.

29. Secretarial Auditor

Secretarial Audit has been conducted by Vanita Sawant & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

30. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act, 2013 during the financial year ended March 31, 2020.

31. 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-5. 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 (corp@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, 2020 was 565.

32. 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-6.

33. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2020 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-7.

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 situate 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.

34. 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, 2021 have been duly paid.

35. 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.

36. 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.

37. Acknowledgement

The Directors place on record their 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.

For and on behalf of the Board
Kolkata J P Chowdhary
October 08, 2020

Executive Chairman