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Titagarh Wagons Ltd
Industry :  Engineering
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As on: May 26, 2022 05:12 AM

Dear Shareholders,

The Directors hereby present their Twenty-fourth 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, 2021. The consolidated performance of Titagarh Group (the Company and its subsidiaries) has appropriately been referred to in this Report.

1. Profit, Retention & Dividend

Titagarh Group's financial performance during the financial year ended March 31, 2021 was as follows:

Rs. in lakhs



Particulars 2020-21 2019-20 2020-21 2019-20
Revenue from operations 102578.50 148421.49 152063.95 176632.43
Other income 1137.03 1713.60 2485.92 3402.20
Total Income (TI) 103715.53 150135.09 154549.87 180034.63
Earnings before interest, tax, depreciation and amortisation (EBIDTA) 13065.44 14602.41 10549.64 15495.94
Less: Finance Cost 5478.57 6502.92 8119.93 8827.29
Less: Depreciation and amortization expenses 1572.95 1813.89 2986.76 2912.68
Profit/(Loss) before exceptional items & tax 6013.92 6285.60 (557.05) 3755.97
Share of Profit/(Loss) of Joint Ventures - - (0.65) (10.18)
Exceptional items (434.75) 16135.44 - -
Profit/(Loss) before tax 6448.67 (9849.84) (557.70) 3745.79
Tax Expenses/(Benefits) 1421.11 (1857.35) 1320.95 (2050.55)
Profit/(Loss) for the year after tax from continuing operations 5027.56 (7992.49) (1878.65) 5,796.34
Loss from discontinued operations (net of tax) - - - (9,410.55)
Profit/(Loss) for the year after tax 5027.56 (7992.49) (1878.65) (3,614.21)
Other Comprehensive Income/(Loss) (net of tax) 465.55 (11.75) 814.47 528.28
Total Comprehensive Income for the year 5493.11 (8,004.24) (1064.18) (3085.93)

2. Performance and Outlook

The Company's operating margin and profitability on a standalone basis improved remarkably during the Financial Year 2020-21 (FY 2020-21) as compared to the previous financial year. The EBIDTA margin increased to 12.6% in FY 2020-21 as compared to 9.7% in FY 2019-20. Profit after tax of Rs. 5027.56 lakhs in FY 2020-21 as against loss of Rs. 7992.49 lakhs in FY 2019-20, shows a turnaround from the previous financial year when due to certain exceptional items, loss was recorded on standalone basis. It may be noted that despite the total income for FY 2020-21 having been impacted primarily due to the Covid-19 pandemic induced lockdown especially during first half of the year under review the Company has delivered strong topline growth from the second quarter onwards.

On a consolidated basis, the Group's total income during the FY 2020-21 decreased from Rs. 180,034.63 lakhs in FY 201920 to Rs. 154549.87 lakhs in FY 2020-21 i.e. a decline of 14.15%, EBIDTA margin was 6.8% in FY 2020-21 as compared to 8.6% in 2019-20. The Company has suffered overall consolidated loss (after Tax) of Rs. 1878.65 lakhs during the financial year ended March 31, 2021.

The financial performance as reported above was achieved despite the outbreak of COVID-19 pandemic and the lockdown announced by the Governments as a measure to combat the pandemic in the countries where the Group operates, however the extent of impact would also be experienced in the financial statement 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.

The standalone operations of the Company started picking up from Q2 FY 2021 onwards yielding better margins, however the performance of Titagarh Firema SpA, the wholly-owned subsidiary in Italy, remained impacted in the first nine months and started improving in the last quarter of the year under review. The execution of order(s) with lower margin at the subsidiary in Italy impacted the overall margins, however, higher margin order book delivery in the coming year is expected to drive profitability at consolidated level. The Directors are pleased to inform you that the Company became net debt free on standalone basis during the year and the Net Debt of Rs. 678 crore as at in the end of FY 21 appearing in the financial statements is on a consolidated basis.

The consolidation of subsidiaries towards the objective of simplification of the business structure was initiated in the previous financial year. The Hon'ble National Company Law Tribunal, Kolkata Bench, by an order dated 30th September, 2020 had sanctioned the Scheme of Amalgamation ('Scheme') of Cimmco Limited, the Company's subsidiary, and Titagarh Capital Private Limited, the Company's wholly-owned subsidiary, with the Company with effect from April 1, 2019, being the appointed date as per the Scheme.

During November 2020, the Company transferred the investments held by it in subsidiaries, namely Titagarh Firema S.p.A., Italy ('TFA') and Titagarh Singapore Pte Ltd, Singapore ('TSPL'), to Titagarh Bridges and International Private Limited (Formerly: Matiere Titagarh Bridges Private Limited) ('TBIPL') - a wholly owned subsidiary of the Company at present engaged in the business of manufacture of metallic bridges. The consolidated financial statement of the Company for year ended 31st March, 2021 includes the results of TFA and TSPL, the step-down wholly-owned subsidiaries, and TBIPL, the wholly-owned subsidiary.

Your Company had a design center inaugurated by the Secretary, Ministry of Housing and Urban Affairs in January 2021 in Hyderabad to work very closely with the design center in Italy to indigenize the designs for the railway rolling stock and the metro rolling stock in India which would be a big step towards realizing the full potential of 'Make in India' capability. Your Company's order book is healthy and execution of contract for metro trains for Pune Metro is well on track inspite of the difficulties faced due to the COVID-19 pandemic. It is our pleasure to report that the first Aluminium Metro train for Pune Metro was flagged off at TFA, Italy, on 30th July, 2021. 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 encouraging.

Management Discussion and Analysis

(a) Overall Review

The overall performance of the Company during the financial year 2020-21 is considered to be reasonably satisfactory

(b) Segment Review

The completion of merger of Cimmco Limited ('Cimmco') and Titagarh Capital Private Limited with the Company has resulted in substantial benefits viz. consolidation of the different products in line with the plant capacities and bringing in efficiency resulting in creating the plant as a centre of excellence for that particular product, realigning the Company in distinct business segments i.e. Freight Rolling Stock, Passenger Rolling Stock and Others.

During the year, the Directors have identified the following reportable segments:-

a) Freight Rolling Stock - Consists of manufacturing of Wagons, Loco Shells, Bogies, Couplers and its components.

b) Passenger Rolling Stock - Consists of designing and manufacturing of Metro, Passenger Coaches, EMUs, Train Sets, Mono Rail, Propulsion equipment, Traction Motors and its components.

c) Others - Consisting of Shipbuilding which includes Designing and Construction of Warships, Passenger Vessels, Tug and other specialised self - propelled vessels and its components; and miscellaneous items like specialised equipment's for Defence, Bridge Girders, Tractors etc which comprises of less than 10% revenue on individual basis.

The segment wise performance is given herein below:

Rs. Lakhs



Particulars 2020-21 2019-20 Change % 2020-21 2019-20 Change %
Segment Revenue (Gross)
Freight Rolling Stock 96374.15 143037.10 (32.62)% 96374.16 143037.10 (32.62)%
Passenger Rolling Stock 4752.34 751.99 531.97% 54107.07 28962.93 86.81%
Others 1452.01 4632.40 (68.66)% 1582.72 4632.40 (65.83)%
Total 102578.50 148421.49 (30.89)% 152063.95 176632.43 (13.91)%
Segment Results
Freight Rolling Stock 12377.74 13464.54 (8.07)% 12377.74 13968.48 (11.39)%
Passenger Rolling Stock (496.89) - (100.00)% (4282.63) 64.50 (6739.47)%
Others (345.70) 664.03 (152.06)% (407.16) 664.03 (161.32)%
Total 11535.15 14128.57 (18.36)% 7687.95 14697.01 (47.69)%
Total Profit/(Loss) before tax from continuing operations 6448.67 (9849.84) 165.47% (557.70) 3745.79 (114.89)%
Profit/(Loss) after Tax from discontinued operations (9410.55) 100%
Total Profit/ (Loss) after tax 5027.56 (7992.49) 162.90% (1878.65) (3614.21) 48.02%

During the year under review, the freight rolling stock business of the Company was impacted due to the COVID-19 pandemic, however the performance has been quite stable. The Company received a major order from Indian Railways in September 2020 for 1800 wagons worth Rs. 500 crore. Post the merger of Cimmco with the Company, the capabilities for the manufacture of wagons at the Company's plant in Titagarh, West Bengal, have been enhanced and steps are being taken to make it the center of excellence for the wagons production.

Under the Passenger Rolling Stock segment of the Company, the execution of Pune Metro is a very important milestone for the Company. The Company along with its subsidiary: TFA, had signed the first contract for design, manufacture and supply of 34 trains of 3 coaches each for Pune Metro (Maharashtra Metro Rail Corporation Limited). Under this contract, the first 3 trains are to be built in TFA's plant in Caserta, Italy and the balance 31 trains will be manufactured in the Company's plant in India. The first train manufactured for Pune Metro was flagged off from Italy on 30th July, 2021. The Company has already upgraded its plant at Uttarpara, West Bengal, by the middle of April, 2021, from where the first train from India is expected to be rolled out within this financial year. The Company is planning to bid for upcoming metro projects in Tier II cities based on its award of Pune Metro order.

"Make in India" initiative coupled with launch of Dedicated Freight Corridor (DFC), metro projects across all major Indian cities are expected to boost wagon and electrical train manufacturing industry in the country. The Company believes that going forward in the coming year and the year after, the DFC wagons should definitely contribute to revenues.

The collaboration of the Company with ABB India Limited (ABB) is for the growing business of propulsion equipment (traction converters) for the Indian railway EMU/MEMU market and trade propulsion. 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 Titagarh's plant at Uttarpara, West Bengal, with certain components being supplied by ABB. So, apart from having a good market potential for the propulsion business, the same is also very strategic for train production business.

The Company has also participated in several shipbuilding tenders wherein it is very well placed. While the previous orders were executed, the new orders are expected to come to the Company's way and the same shall be reported in near future as soon as they materialize.

The Company has also been awarded a contract worth about Rs. 30 crore in the Defence sector, for which the production is being carried out at Bharatpur, Rajasthan. The Company is also participating in larger tenders for similar or equivalent type of defense equipments.

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

The Financial year 2020-21 was certainly one of the most complex since TFA's incorporation. The pandemic that began last February has severely affected its performance, resulting in periods of total suspension of production activities and other slowdowns with the use of double shifts at production sites. Such a situation has significantly affected TFA's production levels and overall efficiency. At the same time, TFA had equipped itself with a set of indirect structures that enabled the company to regain full control of the various phases that make up the cycle of its activity. On the market side, the pandemic has led to slowdowns in tendering and contracting processes, or even in the awarding of additional contracts as envisaged in the context of framework contracts already awarded.

During the past financial year, 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 greater development and growth.

Economic performance was affected by the effects of Covid-19. Due to the measures adopted by the Government, TFA had been forced to close its production facilities, with a corresponding reduction in direct production hours from 16 March to 20 April 2020. This situation led to a postponement of activities and caused delay in the delivery of some products, which remained on the production lines. TFA has initiated all the necessary procedures required by the extraordinary provisions adopted by the Government. The situation triggered by Covid-19 did not lead to any cancellation or reduction of orders, so TFA only experienced a shift in business.

TFA has drawn up a detailed strategic plan that takes into account the effects of the pandemic on the market, while confirming the growth trend expected over the next five years. The growth factor, although impacted by the situation described above, already showed its effects in 2021 with a significant increase in turnover. The year ended had to contend with the negative effects deriving from a number of orders, which are however destined for definitive completion in the current year.

Significant improvements are foreseen during the current financial year in terms of both profitability and turnover compared to the previous year, owing to the start of production on new orders and a general increase in productivity, which is evident from the analysis of hourly costs, which have already benefited from the review of certain business processes and the policies for revising operating costs as a whole.

The situation described above is accompanied by an order backlog that places TFA, for the financial year 2022, in a situation of substantial overall coverage of the revenue forecasts assumed. The total value of the order backlog is €307 million.

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

• the technical consolidation of the TFA order with a consequent increase in reliability parameters and a declared appreciation by the customer Trenitalia;

• the launch of the Catania Metro order (54 trains for the Circumetnea railway), the design phase of which is at an advanced stage and production has started on schedule.

• From August 2020, following the award of the Indian contract for the construction of the Metro Coaches for Pune, production of the first three complete trains and the flatpacks for further trains is underway

• deliveries of the "T21" order have restarted and delivery times have improved thanks to the approval to put trains into service;

• an important milestone was the resumption of collaborations with major international players.

The significant increase in revenues compared to the previous year, of approximately €30 million, is mainly due to the start of production on the new contracts acquired: FCE - Catania Metro, SEPSA (Ente Autonomo del Volturno), PUNE (Pune City Metro) and TAF (Ferrovie Nord Milano) for the revamping of 25 trains.

However, as mentioned above, the 2021 result was mainly impacted due to the Covid 19 pandemic and the loss arising out of the legacy contracts which would be executed in FY 21-22.

(d) Operating subsidiary in India: Titagarh Bridges and International Private Limited (TBIPL)

TBIPL was originally formed as a Joint Venture Company (JVC) pursuant to joint venture agreement between Matiere SAS, France ('Matiere') and Titagarh Wagons Limited ('TWL'), where each was holding 50% of its paid-up capital. Pursuant to discussions between the joint venture partners covering strategic aspects of business etc., TWL acquired the shares held by Matiere, representing 50% of the paid-up share capital of TBIPL. As a result of the above, the shareholding of TWL in TBIPL changed from 50% to 100% (holding 15,09,764 equity shares of Rs. 10/- each) and thus TBIPL became a wholly-owned subsidiary of TWL w.e.f. 14th July, 2020. The name of the Company was changed from Matiere Titagarh Bridges Private Limited to Titagarh Bridges and International Private Limited w.e.f. 21st October, 2020.

During the year under review, TBIPL incurred a loss of Rs. 63.91 lakhs as compared to the loss of Rs. 19.36 lakhs in the financial year ended 31st March, 2020, mainly due to increase in expenses during the year relating to finance costs.

(e) Order Book position

The total order book of Company on a consolidated basis stands at Rs. 5,601 crore at the end of March, 2021, which is one of the highest order book levels the Company ever had. It is well diversified across Indian and Italian business operations (Italy business constitutes 47% to the total order book) 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. More than 50% of Indian order book is from the non-wagon division which will reduce dependency on the wagon business.

(f) Industry overview of Business Segments

Freight Rolling Stock

Indian Railways is the world's 3rd largest rail network registered double-digit growth in freight traffic amid the COVID-19 pandemic and recorded a 10 per cent increase in freight loading in financial year 2020-21, compared to the previous fiscal 2019-20. The national transporter's total freight loading was 203.88 million tonnes in fiscal 2020-21, compared to 184.88 million tonnes in the financial year 2019-20, marking a 10 per cent year-on-year growth.

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 with also announcement of two new technologies - metro lite and metro neo - to provide metro services at much less cost with same experience, convenience in tier II and tier III cities.

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.


Indian Railways have prepared a National Rail Plan for India 2030. The plan is to create a future ready railway system by 2030 bringing down the logistic cost for industry is at the core of the strategy to 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, in 2021-22 Railway expects to earn 63% of the total revenue through the same. Indian Railways is targeting to increase its freight traffic to 3.3 billion tonnes by 2030 from 1.1 billion tonnes in 2017. Indian Railways plans to achieve 2,024 MT (metric tonne) loading in 2024 from the current 1,200-1,300 MT. It is projected that freight traffic via the Dedicated Freight Corridors will increase at a CAGR of 5.4% to 182 MT in 2021-22.

Passenger Rolling Stock

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.


Presently, the Indian shipping industry is reviving from the impact of the COVID 19 pandemic. One such important step is the Merchant Shipping Bill, 2020 that has been promulgated, with the primary aim of promoting the growth of the Indian shipping industry by incorporating the best practices adopted by other advanced countries like the U.S., Japan, U.K., Singapore, and Australia. Also, Neptune Declaration initiated at a global level in order to streamline and categorize seafarers as "frontline workers" to ensure their well-being.

In Union Budget 2020-21, the total allocation for the Ministry of Shipping was Rs. 1,702.35 crore (US$ 233.48 million). The key ports are expected to deliver seven projects worth more than Rs. 2,000 crore (US$ 274.31 million) on a public- private partnership basis in FY22. Over the last few years, to make the Indian maritime sector "atmanirbhar", there have been concerted attempts by our Government to shift gears with respect to development of ports and expansion of shipping connectivity to our hinterlands in achieving the 5 trillion economy mark.


Increasing investment and cargo traffic point towards a healthy outlook for the Indian ports sector. In Maritime India Summit 2021, the Ministry of Ports, Shipping and Waterways identified a total of 400 projects worth Rs. 2.25 lakh crore (US$ 31 billion) investment potential.

(g) 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 Company's business into distinct parts viz. "Freight Rolling Stock", "Passenger Rolling Stock" and "Others". 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 Company's performance for the year under review is considered to be in line with the circumstances prevailing.

(h) Overall outlook for the current year

In addition to the healthy order book as on date, the Company's focussed approach on fixed cost reduction in terms of consolidating the common functions and reducing duplication of manpower, consolidating its prominent position in the Rolling Stock business coupled with the access to 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 Metro and defence establishment of India make the outlook for the current year encouraging.

(i) 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 2020-21 2019-20 Difference (%)
1 Debtors Turnover Ratio (%) 13% 11% 15.52%
2 Inventory Turnover Ratio (%) 19% 14% 38.48%
3 Interest Coverage Ratio (times) 2.18 1.98 9.96%
4 Current Ratio (times) 2.35 2.01 16.75%
5 Debt Equity Ratio 0.12 0.26 (54.55)%
6 Operating Profit Margin (%) 11.63% 8.68% 33.97%
7 Net Profit Margin (%) 6.29% (6.64)% 194.68%

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

• Inventory Turnover Ratio: It has increased due to procurement made for new contracts for which revenue booking is yet to start.

• Debt Equity Ratio: It has improved due to better operating margin and cash generated from operation being used to repay/prepay the debt.

• Operating Profit Margin: It has improved due to increase in sales and better profit margins on new contracts.

• Net Profit Margin: It has improved 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 2020-21 2019-20 Difference (%)
Return on Net Worth (%)
- Before considering exceptional item 5.80% 9.96% 8.00%
- After considering exceptional item 6.30% (9.79)% (6.17%)

Notes on significant changes in financial ratios where change is > 25%: Not Applicable.

3. Dividend

Considering various financial/non-financial parameters, the Directors with a view to conserving resources do not recommend any dividend for the FY 2020-21.

Pursuant to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"), the Dividend Distribution Policy of the Company is available on the following weblink in the Company's website: https://titagarh.in/policies-and-codes.

4. Employee Stock Options Scheme/Change in Share Capital

Pursuant to the Scheme of Amalgamation of Cimmco Limited and Titagarh Capital Private Limited with the Company, the authorised share capital of the Company increased from Rs. 228.10 crore to Rs. 385.10 crore.

In terms of the Scheme of Amalgamation of Cimmco Limited and Titagarh Capital Private Limited with the Company sanctioned by the Hon'ble National Company Law Tribunal (NCLT), Kolkata, the Company made allotment of 37,20,469 equity shares of Rs. 2/- each of the Company to the eligible members of Cimmco as on 23rd October, 2020 (Record Date) in the share exchange ratio of 13 equity share of Rs. 2/- each of the Company for every 24 equity share of Rs. 10/- each held in Cimmco. These were issued to those erstwhile members of Cimmco on November 7, 2020 resulting in the paid-up Equity Share Capital of the Company to Rs. 23,86,53,278/- divided into 11,93,26,639 equity shares of Rs. 2/- each.

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 60,950 equity shares allotted on 9th January, 2021 to the eligible employees upon exercise by them in conformity with ESOS led to increase in the paid up equity share capital to Rs. 23,87,75,178/- as at 31st March, 2021 consisting of 11,93,87,589 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

5. 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.

6. Investor Education and Protection Fund (IEPF)

As stipulated by the applicable provisions of the Companies Act, 2013 ('the Act') read with IEPF (Accounting, Audit, Transfer & Refund) Rules, 2016, as amended ('the IEPF Rules') all unpaid or unclaimed dividend required to be transferred by the Company to the IEPF has been/ shall be transferred, details whereof are provided on the Company's 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 20,598 equity shares of Rs. 2/- each, to the IEPF account, on 20th November 2020, 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. 24th September, 2020. The details of all shares transferred to the IEPF Account are uploaded on the Company's website.

The Company has identified 191 shareholders holding 49,259 equity shares in aggregate, who have not claimed their dividend consecutively since FY 2013-14 and therefore shares held by them are liable to be transferred to the IEPF Account on due date i.e. 9th October, 2021. The Company had sent a communication to all concerned with information regarding transfer of their shares and reminder for taking appropriate action for claiming the dividend unclaimed on their shares and also published a Notice in the leading Newspaper both in English and Vernacular language on 8th July, 2021, which was also uploaded at the website of the Company and the Stock Exchanges. The details of such shareholders are uploaded on the Company's website.

7. Transfer to Reserves

No amount is proposed to be transferred for the year under review to the general reserves.

8. 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 Company's risk management policy adopted by the Board with periodic review by the Audit Committee and the Board. A Risk Management Committee has been constituted by the Board on 8th June, 2021, the terms of reference of which includes the review the risk management. 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 macro-economic, 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.

9. 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, 2021, of subsidiaries: Titagarh Singapore Pte. Ltd., Singapore; Titagarh Firema SpA, Italy; Titagarh Bridges and International Private Limited and Joint Venture Company: Titagarh Mermec Private Limited included in the Consolidated Financial Report (CFS) in the Form AOC-1 is annexed to this Report and marked as Annexure DR-1. The CFS is attached to this Annual Report.

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.

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

10. Copy of the Annual Return

Pursuant to the provisions of Section 92(3) of the Act, the copy of the annual return has been uploaded on the website of the Company www.titagarh.in(https://titagarh.in/report/annual-report) and the same can be viewed by the members and stakeholders of the Company.

11. Number of Board Meetings

The Board of Directors met Six (6) times during the financial year 2020-21 as per the details provided in the Corporate Governance Report forming part of Annual Report.

12. 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.

13. Significant and Material orders

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

14. 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.

15. 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-2.

16. 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.

17. Business Responsibility Report (BRR)

In compliance with Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, the Company has included Business Responsibility Report, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective.

The BRR for FY 2020-21 has been hosted on the Company's website, which can be accessed at https://titagarh.in/report/ 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 2020-21.

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 of the Company at the 23rd AGM, the Board had on 22nd June, 2020 and 13th August, 2020 appointed 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. The shareholders at their Annual General Meeting held on 30th December, 2020 passed the necessary resolutions for their appointment.

Pursuant to the recommendations of the Nomination and Remuneration Committee (NRC) and subject to the approval of the members of the Company at the ensuing AGM, the Board had on 1st January, 2021 appointed Shri Sushil Kumar Roongta (DIN: 00309302) as Additional Director (Category: Independent) to hold office for a term of 5 years, and Shri Prithish Chowdhary (DIN: 08509158) as Additional Director (Category: Non-Executive), w.e.f. the date of passing of such resolution.

Pursuant to the recommendation of the NRC and review by the Audit Committee, the Board at its meeting held on 10th August, 2021, subject to approval of the shareholders at the ensuing AGM, reappointed Shri Jagdish Prasad Chowdhary (DIN: 00313685) as the Chairman & Managing Director (designated as 'Executive Chairman') of the Company for five years w.e.f. 8th January, 2022.

The Board has recommended necessary resolutions at the ensuing 24th AGM for the appointment of Shri Sushil Kumar Roongta as Independent Director and Shri Prithish Chowdhary as Non-Executive Director, and the reappointment of Shri J.P. Chowdhary as the Chairman and Managing Director (designated as 'Executive Chairman') of the Company.

Shri Sudipta Mukherjee, wholetime director, 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 Fourth Annual General Meeting.

During the year under review, Shri Ramsebak Bandyopadhyay, Independent Director, resigned from the Board of the Company with effect from 4th May, 2020 due to his personal reasons. He has confirmed that there were no other material reasons for his resignation other than the one stated above.

Pursuant to the retirement of Shri Dinesh Arya, Company Secretary, upon attaining superannuation w.e.f. the end of business hours on 27th February, 2021, Shri Sumit Jaiswal has been appointed as the Company Secretary and Compliance Officer of the Company w.e.f. 28th February, 2021.

During the year under review, there was no change in the Key Managerial Personnel of the Company, except the aforesaid retirement/appointment of Company Secretary of the Company.

22. Evaluation of the Board's 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 2020-21 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. In the opinion of the Board, the Independent Directors hold highest standard of integrity and possess the requisite qualifications, experience, expertise and proficiency.

24. Remuneration Policy and remuneration

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

25. 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, 2021 had been followed in preparation of the said accounts and there were no material departures therefrom requiring any explanation;

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

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

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

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

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

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, 2021 does not contain any qualification, reservation or adverse remark.

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, 2021 does not contain any qualification, reservation or adverse remark and as regards an emphasis of matter in their Report wherein they referred to the communication regarding the going concern status of TFA from its Auditors, their opinion is not modified in respect of the same.

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 2020-21 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, 2021 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 Sumantra Sinha, Practicing Company Secretary appointed by the Board and their report is annexed hereto and marked as Annexure DR-3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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, 2021.

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-4. The information pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report, is readily available for inspection by the members at the Company's 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 Company's 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, 2021 was 453.

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-5.

33. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2021 pursuant to the provisions of Section 135 of the Act and rules made thereunder is annexed to this Board's Report and marked as Annexure DR-6.

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

34. Listing

The Company's 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, 2022 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 Company's 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
August 10, 2021 Executive Chairman