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Texmaco Rail & Engineering Ltd
Industry :  Engineering
BSE Code
ISIN Demat
Book Value()
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As on: Dec 09, 2023 10:26 AM

Dear Shareholders,

Your Directors have pleasure in presenting the 11th Operational Annual Report of the Company along with the Audited Financial Statements for the year ended 31st March 2021.


(Rs. in lakhs)

2020-21 2019-20
Operating Profit (PBIDT)* 12,808.04 15,341.92
Less: Interest (Net) 7,922.90 6,630.21
Gross Profit (PBDT)* 4,885.14 8,711.71
Less: Depreciation 3,725.67 3,590.85
Profit before Taxation and Exceptional Items 1,159.47 5,120.86
Less: Exceptional Items - 14,991.97
Profit before Taxation 1,159.47 (9,871.11)
Less: Tax Expenses
Current Tax including tax related to earlier years (21.80) 636.22
MAT Credit entitlement - (258.00)
Deferred Tax Liability/(Asset) (5.36) (3,665.30)
Profit after Taxation 1,186.63 (6,584.03)
Add: Balance brought forward from previous year 10,117.37 17,633.65
11,304.00 11,049.62
Dividend paid (Incl. Tax) 224.83 949.85
General Reserve 200.00 -
Other Appropriations (23.19) (17.60)
Balance Carried Forward 10,902.36 10,117.37


Your Directors recommend payment of dividend of 10% i.e. INR 0.10 per equity share of face value of INR 1 each for financial year ended 31st March 2021 in view of the steady performance of the Company during the year on account of disruptions caused to the operations of the Company due to the widespread COVID-19 pandemic.

The Gross Turnover for the year stood at INR 18293.09 mn. The Gross Profit for the year i.e. Profit before Depreciation and Tax (PBDT) and Profit before Tax (PBT) were INR 488.51 mn and INR 115.95 mn respectively. The Net Profit was INR 118.66 mn, after providing net tax liability of INR 2.72 mn for the year as per the Profit and Loss Account drawn up in accordance with the Indian Accounting Standards as specified under the Companies Act, 2013 ('Act'). The Company has transferred INR 20 mn to Free Reserves during the year.


The FY'21 began with an unprecedented pandemic induced lockdown totally stilting economic activities in all sphere of life in the country and across the globe. The strict lockdowns, intermittent restrictions on operations of factories / commercial activities, the exodus of upcountry manpower and calamities due to the widespread COVID-19 induced ailment disrupted the working of your company for a greater part of the year, especially Q1 & Q2 of the FY'21. Under these challenging conditions, your Company demonstrated highest degree of resilience and made relentless efforts in making up the shortfalls in the second half of the year through strict adherence to cost control measures, restructuring the manpower deployment and further improvement in manufacturing practices.

The performance of the Rolling Stock Division of your Company had shown signs of recovery after a sluggish start to the year due to lockdowns, restrictions and bearing the brunt of a devastating super cyclone 'Amphan' causing widespread damages to the sheds and structures of the Company's facilities at Kolkata. Your Company is extremely thankful to its customers for their support during the difficult year as delivery schedules under many orders had to be re-organised due to the lockdowns. With the emphasis of the Government to make freight movement competitive, the requirements of railway wagons are looking up and expected to remain positive in the coming years. General Purpose Wagon Investment Scheme (GPWIS), permitting the private investment is likely to result in robust growth. Your Company thus has been able to make judicious split in catering to the requirements of both Private and Indian Railways Segment.

Your Company is also concentrating to develop new products through design efforts. Other growth areas in passenger mobility segments also figure in the Company's future plan. Your Company certainly would be benefitted with its resilient position in the wagon segment and expects to maintain healthy order book position during FY'22.

The Rail EPC Division of your Company too had a challenging start to the year, due to COVID-19 related impact. Saving lives and livelihood together was a tough balancing act to perform for your Company. After a slow start to the year, the Division has now been more focussed towards execution of ongoing projects. The focus of Indian Railways is on bringing about a transformation by investing heavily in infrastructure, including track infrastructure & systems, electrification, which augurs well for the Rail EPC business of your Company.

The Steel Foundry Division of your Company has maintained its steady performance, both on the domestic & the export fronts with the relaxations in the lockdowns and restrictions imposed. With the added capacity of the Urla unit, Raipur, new products for the domestic markets, especially in-hand moulding segments were successfully developed by the Foundry and well received by the customers, including critical castings for the Defence sector.

All the segments of the business across the world are undergoing a sea change due to COVID-19 pandemic. The atmosphere of uncertainty and the continuity of pandemic are likely to affect the segment which your Company operates into. Fortunately, the demand in the long run is robust due to the commitment of the Government of India to revitalise the Rail segment and ease the roads from the freight movement. Your Company expects that post this pandemic there will be a surge of pent-up demand and there will be a robust rebound in the economy, especially in the areas of upgradation of infrastructure, rail & metro network, etc. The proposed move of IR to privatise the passenger trains will open new vistas of opportunities in the Railway sector.


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

Particulars 2020-21 2019-20 2018-19
Net Profit Margin* % 0.69 (3.54) 4.01
Operating Profit Margin % 3.50 5.62 6.77
Debtors Turnover Times 2.76 2.84 2.27
Inventory Turnover Times 5.46 3.41 4.13
Debt Equity Ratio Times 0.67 0.73 0.51
Current Ratio Times 1.54 1.42 1.47
Interest Coverage Ratio Times 0.15 1.65 2.50
Return on Net Worth % 1.04 (6.41)# 6.60

* before Exceptional items

#During FY'20, there was exceptional item resulting into a negative return.


I. Rolling Stock Division

a. Freight Car & Coachings

The year began with a moderately healthy order book position for the Division. However, due to prevailing pandemic situation, your Company resumed manufacturing activity in May 2020 on a limited scale with limited manpower, in a phased manner and in strict compliance with the guidelines issued by the State/ Central level administration. It ensured all health & safety measures as prescribed by them. The restrictions continued for a long time and the factory being located in a highly infected zone with many surrounding containment zones, the Company restricted its operations. Your Company could not ramp up the production because of restrictions imposed on the number of people to be allowed on worksite and severe shortages of skilled manpower that could not be mobilised due to the movement restrictions enforced by the administration. The workings of the Division were also affected due to the super cyclone 'Amphan' in the month of May 2020.

During the year, due to slowdown in the economy in the country and the GDP contracting to a record low of 7.3%, the overall spirit of business was badly impacted and meaningful economic activity did not pick its momentum.

No new tenders were issued by the Railway Board during the year under review, except for exercising the 30% option clause against the order placed in 2018. Also, due to the GDP contraction the private sector buyers kept the need for new wagons under wraps.

Nevertheless, with the Rail sector proving to be the hub of commercial activities during the difficult times, the future outlook looks bright.

The schemes announced by the Indian Railways during FY'20 such as Liberalized Special Freight Train Operator ('LSFTO'), Liberalized Wagon Investment Scheme ('LWIS') and General Purpose Wagon Investment Scheme ('GPWIS') are expected to boost the market sentiment and it is envisaged that there would be a comfortable revival of demand for various types of wagons in FY'22.

The Indian Railways plans to create additional freight capacity by inducting some specially-designed wagons such as double stack container wagons, auto car with higher MMD though the opening of the Dedicated Freight Corridor ('DFC') could not take off during the current financial year. These new design wagons are still on the drawing board and are expected to be introduced in FY'22. Your Company expects to improve its order book once these new design wagons are made available by the Research Design & Standards Organisation ('RDSO').

As informed earlier, to facilitate rail transportation of two-wheelers, your Company developed a side loading option on the existing Auto car wagon, which is a first in the industry and could supply three such rakes to the industry while one at present is being manufactured. This has a good potential for transportation of two- wheelers through the Railways, as India at present produces approx. 20 mn units of two-wheelers annually, most of which are transported by road.

To save the environment from fly ash hazard, BTAP wagon was successfully tried and tested for bulk transportation of fly ash with pneumatically-assisted unloading of fly ash from the side discharge valve. Your Company has delivered three such rakes during the year. The PG test of these rakes is in progress. Transportation of fly ash by the BTAP wagon compared to the Open Type wagon has a distinct advantage from the environment point of view and your Company expects to get more orders in this respect from the industry. Your Company has also supplied five rakes of specially-designed steel coil carrying wagons during the year FY'21.

Besides freight car manufacturing, your Company has spare capacities in the specially-created facility to manufacture passenger coaches, loco shell, etc. Indian Railways has an ambitious plan of phasing out the redundant passenger coaches and replacing it with new modern passenger coaches. Your Company is seriously looking to harness this opportunity whenever the Indian Railways becomes fully operational.

The turnover of the unit during FY'21 was INR 6171 mn.

b. Locomotive Components / Assemblies

The year began with a low order book position. The order book was expected to be strengthened with deliveries within the year which would have enabled the Company to maintain its performance for FY'21. However, the same could not be fructified due to the pandemic in the beginning of year and the situation continued to be same till the second quarter of the year. All plans to boost production went haywire and locomotive manufacturing units delayed the procurement process and the division's order book remained low. This pandemic badly affected the performance of the Division and it could supply only 23 nos. of loco shells during the year.

However, the situation is improving and your Company expects an improved performance during FY'22.

As per National Rail Plan 2030, the total requirement of Locomotives would be about 16800 till 2026 and the average yearly procurement plan is about 2000 locomotives per year till 2026. Out of the above, about 1000 locomotives are of high horse power being supplied by Alstom and GE. The balance of about 1000 locomotives are to be supplied by the Chittaranjan Locomotive Works ('CLW') / Banaras Locomotive Works ('BLW') /Diesel Loco Modernisation Works ('DMW'). Together the internal capacity of the participants is to produce about 500 loco shells every year and the balance is outsourced.

In view of the planned switch-over to Electric Traction by Indian Railways within the next two years, the strong demand for Electric Loco Shells by the Production Units (CLW & DMW) of the Railways, from private parties, is expected to be sustained in the future as well.

Your Company is established as a reliable and consistent supplier of loco shells and is now geared to step up the production of complete Electric Loco Shells to meet the upcoming demand in the market.

The turnover of the Electric Loco shells and Assemblies during FY'21 was INR 234 mn.

II. Hydro Mechanical Equipment

The turnover of the Division for the FY'21 stands at INR 500 mn. Due to the pandemic, the turnover of the HME Division had been affected during Q1 & Q2 of FY'21. The manufacturing and site activities started normalising only from August 2020.

The Rongnichu Project, however, was completed three months ahead of its schedule during the FY'21 and successful testing of the PS Liner was also done. The Upper Tamakoshi Project, Nepal is on the verge of being commissioned on successful completion of reservoir impounding. Further, the Bajoli Holi - GMR project, is also nearing completion. Installation work at Subansiri, the largest hydro power project is also gearing up, post restart of work on the project by NHPC and all out efforts are being initiated to complete the project by June 2022. The Division has also received an additional order of INR 430 mn from the Subansiri-NHPC on a challenging completion schedule and the Division is moving ahead to complete all the scheduled targets in time.

In nutshell, the HME Division had shown improvement during the second half of the Financial Year and is heading towards a better performance in FY'22.

III. Bridge & other Steel Structures

The performance of the division during FY'21 was dismal because no fabrication work was possible during the period from April to July 2020 due to the pandemic. Availability of structural steel was also very erratic, which slowed down the entire process of fabrication as well as dispatch.

During FY'22, the Division has set up a target of fabrication and dispatch of almost twice the current year's achieved targets. However, with the onset of the second wave of COVID-19, the site activities were not operating in view of the limited industrial oxygen supply, which would certainly pick up in the second half of the FY'22. The division remains optimistic to achieve the target for FY'22.

The turnover of the division during the FY'21 was INR 209 mn.

IV. Texmaco Hi-tech

The turnover of the unit in spite of the pandemic during FY'21 was INR 193 mn. The turnover was achieved by meeting critical requirements of Alstom and GE for their CBS Primary Parts and Platform Kit Parts requirements.

The performance of the unit for the FY'22 is likely to improve further with all product approvals in place, demand stabilisation and ramp up of production activities.


During the year, production & turnover from both the foundries i.e. Kolkata & Urla, Raipur stood at 21,804 MT (Kolkata 15,973 MT & Urla 5,831 MT) valuing total at INR 3165 mn. The 1st quarter and partially the 2nd quarter of the financial year were a virtual washout and practically very little production was achieved because of the widespread pandemic situation and the restrictions imposed.

The demand on domestic casting front i.e. bogies & couplers was adversely affected because of no fresh order for wagons being placed by the Indian Railways. This apart, the input prices of all the items, particularly scrap, had gone up significantly, making it for the time being uneconomical to produce domestic casting for wagon. However, bogie & coupler castings being produced in the foundry are mostly for captive requirement.

The export demand more or less is steady rather there is a slight upward trend but because of the soaring shipping cost and non-availability of the empty container, dispatch of export castings suffered during the last quarter of the year, resulting in a slight build-up on inventory of finished castings against export orders.

It is expected that once the second wave of COVID-19 is behind us, normalcy will return and the division will report an improved performance.

The overall performance of the Urla unit, Raipur is more or less the same because of poor and unviable domestic demand of wagon castings. However, the Urla unit is trying to procure more orders for hand moulded industrial castings, which are complex in nature and more remunerative.


Kalindee unit of your Company's Rail EPC Division faced challenges due to COVID-19 pandemic & stressed working capital conditions during FY'21. This has resulted in subdued performance during the year.

Execution activities in major projects like WDFC, EDFC, BMRCL have been maintained at reasonable speed. During the year, the Division has focused on completing certain long-pending projects like Jhansi-Bhimsen, MMTS Hyderabad, Bina- Kota doubling, etc.

For the projects in Bangladesh, the division is trying to overcome the various challenges and constraints faced by intermittent stoppage of work due to the spread of COVID-19 and to restore the momentum.

There have been relentless efforts on closing and realizing the dues from old contracts which have started yielding good results. Focus on efficient execution, coupled with speedy realisation of old receivables, has ensured that the overall collections have kept pace with the revenues without adding significant receivables.

The division at present is exploring to acquire new signalling & telecommunication contracts involving technological innovation, which should strengthen the qualitative performance of the division. The Division also intends to focus on automatic fare collection systems and ballast less track systems, which are expected to open up large market segments in the coming years.

The turnover of the Kalindee unit during the FY'21 was INR 5790 mn.

Rail Electrification

During the year, the Bright Power unit of Rail EPC division has successfully completed Commission of Railway Safety ('CRS') inspection for 275 KM of overhead electrification, a significant achievement. These were carried out under strict COVID-19 protocols. Due to the COVID-19 disruptions, the division had to adapt a different approach in carrying out the work. Labour availability and its movement became restricted. Keeping everyone in the field "safe" also was challenging. It was also necessary to maintain the division's financial liquidity and reduce dependence on borrowed funds. Hence, the focus of the division was to complete its old assignments and close the existing contracts. With the above efforts, the Division has performed reasonably well even during the year which witnessed impact of COVID-19 pandemic. The efforts of the division have resulted in improved collection of outstanding and retentions from the customers. The division is now focusing on modification and refurbishment contracts which have to be executed under the very strict train running conditions and requires special skills and expertise. The Division's vast experience in the field along with its dedicated team of trained technical manpower enables it enter into this niche field. The division has bagged such contracts worth INR 1200 mn in FY'21.

The turnover of the Bright Power Unit during the FY'21 was INR 1967 mn.


The subsidiaries / associates / joint ventures continue to contribute to the growth in revenue and overall performance of your Company.

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

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

The Consolidated Financial Statements of the Company include the financial results of its subsidiaries, associates and joint ventures.

i. Belur Engineering Private Limited

Belur Engineering Private Limited, a wholly-owned subsidiary, continues to supplement your Company's business streams by providing its property on lease to the Company to carry out execution of its various contracts.

ii. Texmaco Rail Electrification Limited

Texmaco Rail Electrification Limited ('TRElec'), a wholly-owned subsidiary, was formed to explore business potential in the niche field of Rail Electrification. TRElec continues to explore the fields for its operation.

iii. Texrail SA (Pty) Limited

Texrail SA (Pty) Limited ('SA Pty'), a wholly-owned subsidiary, was established in South Africa for exploring opportunities in the African market. With a view to conserve cost, SA Pty is being deregistered on cessation of its operations.

iv. Texmaco Engineering Udyog Private Limited

During FY'21 the Company formed a wholly-owned subsidiary in the name and style of 'Texmaco Engineering Udyog Private Limited' ('TexUdyog'). It was formed to work on emerging opportunities in the field of Heavy Engineering and structural works. TexUdyog is yet to commence its business operation.

v. Texmaco Transtrak Private Limited

Post signing of an arrangement with CAF, Spain, the technology provider for electronic interlocking and Train Protection and Warning Systems, Texmaco Transtrak Private Limited has taken up the approval process with RDSO.

The approval process of the prototype has been delayed pending RDSO inspection, which is likely to take place once normalcy is restored.

vi. Texmaco Rail Systems Private Limited

Texmaco Rail Systems Private Limited was incorporated to identify the evolving areas in the field of signalling equipment which will strengthen your Company's presence in the signalling business of the Rail EPC Division.


Texmaco Defence Systems Private Limited

During FY'21, Texmaco Defence Systems Private Limited ('Texmaco Defence') has signed few MoUs for exploring the opportunities in the Indian defence market. At Aero India 2021 held at Bengaluru, Texmaco Defence made exclusive arrangements for new ventures to contribute towards National Defence. It is further exploring opportunities in the Civil Aviation & Railways as well as in the Non-Defence and Export sectors. Texmaco Defence looks forward to contribute to the Government's initiatives viz. the AatmaNirbhar Bharat Abhiyan & Make in India.

Joint Ventures

i. Touax Texmaco Railcar Leasing Private Limited

The impact of the pandemic, though not directly, was felt by the JV company. The contraction in orders will not be quantified immediately, considering the length of time, in each contract prescribed for delivery of the ordered rake. However, most customers have seen a sizeable contraction in business. The silver lining is, there are signs that the worst is all set to over. The Pandemic resulted in both a reduction in offtake by customers and a sizeable reduction in liquidity & funds available for revenue expenditure. Lease rentals being one of them, is likely to be postponed unlike critical expenses like wages and raw material. Hence, many firmed up contracts have been pushed into the coming year.

A huge plus, however, from the pandemic is the growth of the rail sector. Most industries had their raw material stuck on roads all over India during the lockdown period. The Indian Railways operated at maximum capacity and ran point-to-point with commodity-specific trains. The Indian Railway initiative to get back its share from the road sector bodes well for the JV company. The IR 'Freight Business Development Portal' is a huge success. There is a substantial increase in enquiries for bulk wagons. There may, however, not be a sizeable increase in demand from the container sector in the immediate future.

The JV company has now 15 rakes in operation and 2 under production. The JV company is currently in discussion for leasing of cement, bulk cargo, auto car rakes, etc. in the current financial year.

The turnover of the JV company during the FY'21 was INR 288 mn.

ii. Wabtec Texmaco Rail Private Limited

Wabtec Texmaco Rail Private Limited, the JV company, achieved a turnover of INR 387 mn during the FY'21. Like a majority of companies across the globe, the business and operations of the JV company also got adversely impacted during FY'21 to a great extent due to the pandemic. All necessary directives of the authorities to contain the spread of the infection were implemented and continues to be followed even after opening up of the operations at factory from a nationwide lockdown enforced by the Government of India.

The business started showing an improvement from the Q3 of FY'21. The demand for Receiver Assemblies, which accounts for a major portion of the JV company's turnover, has increased more than double from October 2020. Orders from SE Railways for supply of Mark 325 Draft Gears, with Followers, were successfully executed within a record time.

The first order for Bridge Plates used on Automobile carrying wagons was also successfully executed during the year on a rake manufactured by Texmaco Rail for a leading global automobile logistics company. The first trial order received for CSP Coilguard used on steel coil carrying wagons is at presently under execution. The JV company managed to retain the status of leadership in the Wheel Chock market in India. The demand for all these new products is expected to grow significantly during FY'22.

The JV company expects to achieve improved business during FY'22 on back of the economy showing early signs of recovery and increased demand from the Indian Railways and the wagon builders.


The Company is actively pursuing new opportunities in the field of exports. The Steel Foundry Division of your Company continued to excel in export totalling to INR 915.18 mn compared to INR 1124 mn of previous year in spite of the global slowdown due to the COVID-19 pandemic. The execution of the projects in the neighbouring countries by the HME Division of your Company has picked up during the year.

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


A. Rolling Stock Division

Rolling Stock Division is focussed on development of wagon with optimized solution with new technology and use of new materials.

i) The division is working on new taller autocar wagon with innovative solutions for carrying wide range of automobiles (two wheeler, three wheeler, car, LCV, HCV) and improving the ease of its operation. In existing BCACBM wagon, side opening arrangement has been developed for two wheeler loading and in this respect, two rakes have been supplied.

ii) The division is working with industry partners to use new materials in wagons to bring down tare weight and improving pay load capacity.

B. Steel Foundry Division

The R&D Centre of the Company is registered and recognised by the Department of Scientific and Industrial Research (DSIR), Government of India. It carries out research and innovation for the development of various products & processes. It has helped the Company to develop new products, improve product life through process innovations, develop light & efficient designs for higher and faster transportation of goods & specialised cargos. This has enabled the Company in saving precious energy and resources while improving cost effectiveness. The metallurgical laboratories of your Company, an integral part of the R&D Centre, has already received ISO/IEC 17025:2017 certification from National Accreditation Board for Testing and Calibration Laboratories (NABL), which is approved by International Laboratory Accreditation Cooperation.

a) New Product Development:

1) A new design of bogie castings, two new designs of yoke castings and a new type of Follower have been developed for the North American market by unique metallurgical and process improvement. This has enabled the Company to expand its export footprint in the United States.

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

b) New Process Development:

New method designs were developed for Centre Plate and Traction Link castings that resulted in remarkable improvement with respect to solidity and surface finish. A substantial cost saving in the final finishing operation was thus achieved.

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

i) development of a computational model to simulate the mould filling operation, flow simulation, solidification pattern and shrinkage prediction for different components.

ii) development of a computational model to simulate heat treatment cycles and resulting thermal stresses across different section thicknesses in different components.

iii) analysis of different types of failures in various components by correlation of parameters of method design, moulding, core making, steelmaking, pouring and heat treatment operations with the casting physical properties to identify the probable root cause of failure and propose suitable corrective / preventive actions for their minimisation/ elimination. These studies have helped in improvement of existing products and processes.

iv) the R&D department has further undertaken collaborative projects with reputed institutes such as Birla Institute of Technology and Science (BITS - Pilani) to assist in improving the quality and life cycle of the products.


IT Department of your Company has facilitated in creating a more cohesive and closely connected Organisation by implementing video conferencing solution for inter locations communication and has minimised travel. The Company is maintaining Oracle ERP business solution for its business operations. The IT team continues to leverage new technologies to increase its efficiency and effectiveness to support digitisation and cyber security system to meet the business goals of the company.


Your Company claims that its employees and workmen are its greatest resources. Human Resources ('HR') of your Company facilitates the management and development of its biggest assets, i.e. employees, workmen, ultimately accelerating their performance.

HR plays a significant role in developing a positive business culture and improving employee engagement and productivity. The HR function also takes the lead on employee wellness and personal development.

People, culture and business success go hand-in-hand. HR, therefore, helps in building the brand image of the Company as an employer which is influential in attracting talent. HR continues to play an important role, especially during the ongoing economic uncertainty caused due to the COVID-19 pandemic, by keeping the employee morale high and strengthening their mental well-being.

Performance management, training and development, recruitment and on boarding, employees relations and reinforcing the values of the business are all essential elements of business culture covered by HR.

An effective performance management system enables managers to offer support to employees who need it and identify future superstars.

It is widely recognised that employee development contributes towards better employee engagement, increased productivity, reduced employee turnover and a more positive work culture. Investing in our employees strengthens our organisation and gives our business a competitive edge. It drives employee engagement, job satisfaction and staff retention, and it defines business success. HR continues to play a key role in developing, reinforcing and improving the culture of its organisation.


The Government's focus and added measures taken in the recent Budget for modernisation under various segments of Railway infrastructure and services - coaches and passenger services, electric locomotives, electrification, signalling, etc., will strengthen the working of the Rail EPC and Rolling Stock Divisions of your Company. The growing pace of electrification including track renewals, bridge works, and doubling of tracks adds value to your Company's operations.

In the Budget 2021-22, the Government has also announced the National Rail Plan for India and record budgetary allocation of INR 1.10 lakh crore is provided towards development of Indian Railways. Considering the initiatives and emphasis by the Government, the prospects for your Company seem positive.

Indian Railways' determined approach on building new DFCs consisting of 263.7 km & 274.3 km in PPP mode will provide added business opportunity for growth & development of the business of your Company. The Indian Railways initiative to prioritise design train operations will provide newer opportunities to companies working in Rail segment. Railways focus on introduction of safety & security measures across India would further add upto the windows of opportunities for the Company in the Rail segment.

Further, in its effort to strengthen the urban mobility system Pan India, the Government has declared that along with the development of infrastructure, about 1,016 km of metro and Regional Rapid Transit System is under construction in 27 cities and also introduced the product for two new technologies i.e., 'MetroLite' and 'MetroNeo' for Tier-2 cities and peripheral areas of Tier-1 cities which would further add to newer opportunities in the segment.

The sluggishness in the global economy owing to the continuing COVID-19 pandemic & its spread across the nation has impacted every segment of the economy as well as businesses and your Company is not left untouched. Despite the overall challenging situation, the Company managed to provide satisfactory results and your Company is confident of overcoming any substantial impact with improved efficiency in its operations.

The challenges faced in project implementation by the infrastructure segment company putting their flames under tremendous stress would continue to be a challenge in the growth plan envisaged by your Company.


Corporate Social Responsibility ('CSR') has become increasingly important with economic globalisation.

Your Company, through its CSR drive, endeavours the sustainable development of the society at large.

Your Company, believes that CSR is integrated with the corporate values and with this notion, the Company's CSR philosophy revolves around mechanisms for creating employability, good health & well-being, environmental protection and women's empowerment.

The Company has taken few important initiatives to serve the society. With the motto of promoting education and training the youth to be capable of being employed with the corporates, your Company continues to promote & provide education and vocational skills through 'Texmaco George Telegraph - Centre of Excellence', a vocational training institute which was set up within the Company's premises, partnered with the National Skill Development Corporation.

Your Company, with its pre-determined objective has been continuously trying to educate underprivileged localities and the deprived children.

To serve its neighbourhood in the field of health & well-being, 'Texmaco Arogyam Physio Centre' a well-equipped Health Hub established within the Company's premises, which marked its 5th anniversary this year, comprises competent doctors and has been providing services of physiotherapy, alternative therapy, acupuncture, gym, yoga, etc. Despite the pandemic, the Centre, with its ceaseless support, helped the neighbourhood people with therapies which helped them in garnering a sense of positivity and well-being.

The Company continues to undertake the drive of campaigning towards general awareness for protection of the community against COVID-19.

Apart from the above, the Company continues to provide financial aid to the underprivileged for promoting health and education.

The Company has spent in excess of the prescribed threshold under the Act on the CSR activities for FY'21.

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


Your Company continues to embrace a sustainability initiative with the aim of going green and minimising the impact on the environment. Your Company had already adopted the green initiative by sending the Annual Report, Notices, other communication, etc., through e-mail to the Shareholders, whose e-mail addresses are registered with relevant Depository Participants / RTA / Company. Shareholders are requested to support this initiative by registering / updating their e-mail addresses for receiving Annual Report, Notices, other communication, etc. through e-mail. In view of the COVID-19 pandemic, the Ministry of Corporate Affairs ('MCA') and the Securities and Exchange Board of India ('SEBI') had issued relaxations from sending printed copy of Annual Report, Notice of the Annual General Meeting ('AGM'), etc. to the Shareholders for the AGM held in the year 2020, which continues for the AGM in 2021 as well.

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

Further those Shareholders who have not yet registered their e-mail addresses are requested to follow the procedure as mentioned in the explanatory note to the Notice calling AGM to receive the Annual Report & the Notice of the AGM through electronic mode and to enable their participation in the AGM.


The number of employees as at 31st March 2021 was 2403. In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is enclosed as Annexure B and forms part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure C and forms part of this Report.


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


Meetings of the Board

During the year under review, 5 (five) Board Meetings were held on the following dates:

• 17th June 2020

• 8th September 2020

• 19th October 2020

• 29th January 2021

• 1st March 2021

Change in Directors and Key Managerial Personnel

During the FY'21, the re-appointments of Mr Saroj Kumar Poddar as Executive Director and Chairman, Mr Akshay Poddar as Non - Executive & Non - Independent Director and re-designation of Mr Indrajit Mookerjee as Managing Director of the Company, were approved at the Annual General Meeting ('AGM') of the Company held on 30th September 2020.

Further, the Board of Directors ('Board') on the recommendation of the Nomination and Remuneration Committee, had appointed Mr U. V. Kamath, Chief Executive- Bright Power unit, Rail EPC Division as Executive Director w.e.f. 1st August 2020, who tendered his resignation w.e.f 8th September 2020. He continues to act as Chief Executive- Bright Power unit, Rail EPC Division of the Company.

Further, the Board on the recommendation of the Nomination and Remuneration Committee, had approved the appointments of Mr Ashish Kumar Gupta as Executive Director and designated as Deputy Managing Director w.e.f. 17th November 2020 and Mr Virendra Sinha & Ms Rusha Mitra as Independent Directors w.e.f. 17th February 2021. All these aforesaid appointments were approved by the shareholders at the Extra Ordinary General Meeting ('EGM') of the Company held on 25th March 2021.

Ms Mridula Jhunjhunwala ceased to hold office as Independent Director of the Company w.e.f. close of business on 19th March 2021 upon completion of her tenure as approved by the Shareholders.

Messrs Damodar Hazarimal Kela and Ashok Kumar Vijay, Executive Directors retire by rotation and being eligible, have offered themselves for re-appointment at the ensuing AGM of the Company.

Further, the present tenure of Mr Kela expires on 24th September 2021 and in view of his visionary leadership and experience, the Board on the recommendation of the Nomination and Remuneration Committee has approved his re-appointment, for a period of 3 (three) years subject to the approval of the Shareholders.

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

Board Evaluation

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

A structured questionnaire, which cover various aspects of the Board functioning such as Director's strength and contribution, specific duties, obligations, etc. evolved through discussions within the Board, has been used for this purpose. Further, on the basis of performance review by Independent Directors at their meeting held on 18th March 2021 and recommendations of the Nomination and Remuneration Committee, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. Furthermore, the evaluation of the Independent Directors was performed by the Board. The evaluation criteria comprised assessing the various parameters including oversight and effectiveness of the Board, performance of the Directors, expertise /skills / competencies as possessed by the Directors in the context of the business of your Company, contribution to the strategic planning, etc.

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

Criteria for Appointment of Directors and Remuneration Policy

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

Your Company has in place a well-defined Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company. The Nomination and Remuneration Committee periodically reviews the policy to ensure that it is aligned with the requirements under the applicable laws. During the year under review, there has been no change in the policy.

The policy ensures equity, fairness and consistency in rewarding the employees on the basis of performance against set of objectives. The policy is available on the Company's website. The weblink for accessing such policy is:


Declaration by Independent Directors

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

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

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


Composition of Audit Committee

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

Statutory Auditors

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

Branch Auditors

The Branch Auditors Messrs S.S. Kothari Mehta & Co. continues to act as such until the conclusion of the 24th AGM of the Company to be held in the year 2022.

Cost Auditors

Your Company has appointed Messrs DGM & Associates, Cost Accountants, for conducting the Cost Audit for FY'21 in terms of the provisions of the Act and the Companies (Cost Records and Audit) Rules, 2014.

The Board on the recommendation of the Audit Committee, at its Meeting held on 14th May 2021 has approved the re-appointment of Messrs DGM & Associates, Cost Accountants (Firm Registration No. 000038), as the Cost Auditors to conduct the Audit of the Cost Records of the Company for the FY'22 at a remuneration of INR 2,50,000 (Rupees Two Lakh Fifty Thousand) plus applicable taxes and out-of-pocket expenses as incurred from time to time. The proposal for the ratification of the remuneration payable to Messrs DGM & Associates is being placed at the ensuing AGM for the approval of Shareholders.

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

Secretarial Auditor

Your Company has appointed Messrs S. R. & Associates, Practicing Company Secretaries, for conducting the Secretarial Audit of the Company for FY'21 in terms of the provisions of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

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

Whistle Blower Policy

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


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

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

The objectives pertaining to Risk Management are to monitor and review the risk management plan of the Company including identification therein of elements of risks, if any, and such other related functions. The Company has in place a Risk Management Policy in order to mitigate the losses which might be incurred due to non-systematic attendance of certain issues. The Risk Management Policy which has been adopted by the Company has in its scope, the establishment of a process for risk assessment, identification of risks both internal & external, cyber security risk and a detailed process for evaluation and mitigation of risks and is reviewed periodically by the Audit Committee to ensure its effectiveness. During the FY'22, the Company has formed a Risk Management Committee, the details of which are provided in the Report on Corporate Governance as attached to this Report.


(a) There has been no change in the nature of business of the Company during the year under review. Further, in order to expand its horizons, the Company is planning to explore into newer fields of upcoming opportunities in defence segment and for which the Company has obtained the approval of the shareholders to the altered object clause of the Memorandum of Association of the Company.

The alterations as to the Object Clause was approved at the EGM held on 25th March 2021.

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

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

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

(e) The Board had earlier approved the Rights Issue in April 2019 for an issue size not exceeding INR 2000 mn. However, due to steep decline in the market price of the shares of the Company and plummeting GDP & Economy, the Board at its Meeting held on 8th September 2020 had withdrawn the Rights Issue.

(f) Share Capital

During the year, the Board of the Company has proposed the issuance of Equity Shares by way of Preferential Issue to Messrs Zuari Global Limited, Adventz Finance Private Limited & Mr Saroj Kumar Poddar (as an individual), for an amount not exceeding INR 2000 mn, which was approved by the Members of the Company at the AGM held on 30th September 2020. In terms of the approval, your Company has allotted 93,54,839 & 1,61,29,031 Equity Shares of face value of INR 1/- each at a price of INR 31/- each to Adventz Finance Private Limited and Mr Saroj Kumar Poddar (as an individual) respectively by way of preferential issue against conversion of loan availed by the Company from them. Consequent to the aforesaid allotment, the paid up capital of the Company has increased from 22,48,59,382 Equity Shares of INR 1/- each to 25,03,43,252 Equity Shares of INR 1/- each.

Further, the Board at its Meeting held on 1st March 2021 has proposed the issuance of Equity Shares by way of Preferential Issue to Messrs Zuari Global Limited and Adventz Finance Private Limited, for an amount not exceeding INR 1150 mn. Accordingly, an Extra Ordinary General Meeting of the Shareholders was convened on 25th March 2021, inter-alia, for issuance of Equity Shares to Messr Zuari Global Limited for an amount not exceeding INR 900 mn. However, the Shareholders had not approved the said proposal.

(g) Deposits

During the FY'21, the Company has not accepted any Deposit under the provisions of the Act.

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

An Internal Complaints Committee ('ICC') has been set up in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder to promote safe & healthy work environment and to redress complaints received regarding sexual harassment. The ICC meets at regular intervals. Your Company has in place a Policy on prevention of Sexual Harassment in accordance with the said Act and Rules.

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

(i) Disclosure with respect to compliance of Secretarial Standards

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


Annual Return

The copy of the Annual Return is available on the website of the Company. The weblink for accessing Annual Return is: https://www.texmaco.in/webfiles/doc/annual report/ ART2021.pd f

Dividend Distribution Policy

Your Company has in place a Dividend Distribution Policy in line with the requirements of the Listing Regulations. There has been no change in the policy during the year. The weblink for accessing such policy is: https://www.texmaco.in/webfiles/doc/ Investors Information/Dividend Distribution Policy.pdf

Corporate Governance

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

Business Responsibility Report

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

Particulars of Loans, Guarantees and Investments

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

Related Party Transactions

All related party transactions during the FY'21 were entered in the ordinary course of business and on arm's length basis.

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

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

During the year under review, there has been no change in the policy.


Your Directors state that:

(a) in the preparation of the Annual Financial Statements, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) such accounting policies are applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

(f) 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.