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Titagarh Rail Systems Ltd
Industry :  Engineering
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As on: Sep 27, 2023 11:31 AM

Dear Shareholders,

The Directors hereby present their Twenty-fifth 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, 2022. 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, 2022 was as follows:

Rs. in lakhs



Particulars 2021-22 2020-21 2021-22 2020-21
Revenue from operations 147479.43 102578.50 193079.19 152063.95
Other income 2288.28 1137.03 3583.56 2485.92
Total Income (TI) 149767.71 103715.53 196662.75 154549.87
Earnings before interest, tax, depreciation and amortisation (EBIDTA) 18168.33 13065.44 16875.94 10549.64
Less: Finance Cost 5582.23 5478.57 9339.50 8119.93
Less: Depreciation and amortization expenses 1838.34 1572.95 3327.48 2986.76
Profit/(Loss) before exceptional items & tax 10747.76 6013.92 4208.96 (557.05)
Share of Profit/(Loss) of Joint Ventures - - - (0.65)
Exceptional items - (434.75) - -
Profit/(Loss) before tax 10747.76 6448.67 2895.52 (557.70)
Tax Expenses/(Benefits) 2807.14 1421.11 2964.07 1320.95
Profit/(Loss) for the year after tax from continuing operations 7940.62 5027.56 (68.55) (1878.65)
Loss from discontinued operations (net of tax) - - - -
Profit/(Loss) for the year after tax 7940.62 5027.56 (68.55) (1878.65)
Other Comprehensive Income/(Loss) (net of tax) 570.59 465.55 572.48 814.47
Total Comprehensive Income for the year 8511.21 5493.11 503.93 (1064.18)

2. Performance and Outlook

The Company's performance during the Financial Year 2021-22 (FY 21-22) on a standalone basis improved substantially as compared to the previous financial year (FY 20-21) with all three segments viz. 'Freight Rolling Stock', 'Passenger Rolling Stock' and 'Shipbuilding, Bridges and Defence' ('SBD') recording noteworthy increase in revenue, as explained further in 'Segment Review' under the section 'Management Discussion and Analysis' herein below. All the key performance factors improved remarkably with the total income being higher by 44.40%; the EBIDTA went up from Rs. 13065.44 lakhs in FY 2021 to Rs. 18168.33 lakhs in FY 21-22: an increase of 39.06% and Profit after tax, from Rs. 5027.56 lakhs in FY 20-21 to Rs. 7940.62 lakhs in FY 21-22 was up by 57.94%.

On a consolidated basis, the Group's total income increased from Rs. 154549.87 lakhs in FY 20-21 to Rs. 196662.75 lakhs in FY 21-22 i.e. an increase of 27.25%; the EBIDTA from Rs. 10549.64 lakhs in FY 20-21 to Rs. 16875.94 lakhs in FY 21-22 recorded an increase of 59.97% and Loss after tax for FY 21-22 reduced systematically to a level of Rs. 68.55 Lakhs as compared to Rs. 1878.65 Lakhs in FY 20-21, being an improvement of 96.35%.

The financial performance during FY 20-21 having been impacted due to the outbreak of COVID-19 and the lockdown announced by the Governments as a measure to combat the pandemic in the countries where the Group operates notwithstanding, the improvement in the performance for the year under review is commendable since the impact of COVID- 19 pandemic was felt during FY 21-22 as well, more particularly in the first half, however, the macro-economic scenario has improved this year and the demand remained strong as the entire value chain gradually returned to normal.

It is a matter of great satisfaction that during FY 21-22 the Company achieved the highest ever revenue on a standalone basis since its incorporation. The Order Book remained healthy across all the three segments and the Pune Metro project was on schedule and the first train manufactured at the Group's works at Italy and at the state-of-art facilities in Uttarpara, West Bengal, India respectively were flagged-off during the year under review. The performance of the Company on a consolidated basis also improved with the major highlight being the award of a framework contract of Euro 280 million for 38 trainsets of Metro in January 2022 to Titagarh Firema S.p.A. (‘TFA'), the subsidiary in Italy.

The Company continued the consolidation of subsidiaries with the objective of simplification of the business structure and the Board at its meeting held on 10th January, 2022 approved a draft scheme (the Scheme) for amalgamation of Titagarh Bridges and International Private Limited (TBIPL), a wholly owned subsidiary with the Company, with 1st April, 2021 as the Appointed Date, subject to the sanction by the Hon'ble National Company Law Tribunal (NCLT). TBIPL being a wholly owned subsidiary of the Company, no consideration is payable. Following the approval of the Scheme by the shareholders and creditors of the Company at their respective meetings held on 10th May, 2022, a confirmation petition was filed before the NCLT on 28th May, 2022 and an order passed for the next hearing on August 25, 2022.

Your Directors are also pleased to report that the Company received the order for the single largest order ever from the Indian Railways for 24,177 wagons valued at over Rs. 7800 crore (approx.) in May 2022. With the bagging of this contract, the Company's total order book stood at Rs.10,645 crore which is the highest ever order book value on stand-alone basis in the history of the Company. With the execution of Pune Metro project on schedule and continued participation in various tenders for the segments viz. ‘Passenger Rolling Stock' and 'Shipbuilding, Bridges and Defence' and tremendous potential for growth thanks to the continued thrust and support provided by the Government of India to the Indian companies under the initiatives such as “Make in India” 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, being the silver-jubilee year of the Company's operations, is encouraging.

The overall performance of the Company during the financial year 2021-22 is considered to be satisfactory.

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) Shipbuilding. Bridges & Defence - Consisting of Shipbuilding which includes Designing and Construction of Warships, Passenger Vessels, Tugs and other specialised self - propelled vessels and its components; and specialised equipment for Indian Defence Sector and Modular Bridging solutions for several geographically remote locations in India which comprises less than 10% revenue on individual basis.

The segment wise performance is given herein below:

Rs. in Lakhs



Particulars 2021-22


Change %

2021-22 2020-21 Change %
Segment Revenue (Gross)
Freight Rolling Stock 121436.40



121436.40 96374.16 26.01%
Passenger Rolling Stock 21897.41



65771.68 54107.07 21.56%
Shipbuilding, Bridges & Defence 4145.62



5871.11 1582.72 270.95%
Total 147479.43



193079.19 152063.95 26.97%
Segment Results
Freight Rolling Stock



27.50% 15781.12 12377.74 27.50%
Passenger Rolling Stock



188.71% (4077.62) (4282.63) 4.79%
Shipbuilding, Bridges & Defence



263.76% 1521.34 (407.16) 473.65%



45.54% 13224.84 7687.95 72.02%
Total Profit/(Loss) before tax from continuing operations



66.67% 2895.52 (557.70) 619.19%
Profit/(Loss) after Tax from discontinued operations
Total Profit/(Loss) after tax



57.94% (68.55) (1878.65) 96.35%

During the year under review, the performance of the freight rolling stock business of the Company has been quite stable with about 82% of the Company's standalone revenue coming from this segment. The Company has the largest installed capacity of 8400 wagons per annum with state of the art facility at the Plant at Titagarh, W.B. The Company continues to have its dominant position as market leader in this business segment and for last few years has been getting more substantial percentage of total order quantity placed by Indian Railways (‘IR') and is also the largest supplier of wagons to the private sector.

The freight rolling stock segment further received a major boost in May 2022 with the receipt of letter of acceptance for an order for manufacture and supply of 24,177 Wagons from IR valued at over Rs. 7,800 crore (approx.) which is required to be executed over a period of 39 months. The Company possesses the necessary infrastructure and capacity to supply the Wagons against this order, however, further augmenting of its facilities to optimise production costs and efficiencies has been initiated. With the pace at which the IR is modernising and upgrading its network, the demand for wagons is expected to remain buoyant in the coming years.

Under the Passenger Rolling Stock segment of the Company, the execution of Pune Metro project 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 execution of the Pune Metro project is on schedule and the production at the Plant at Uttarpara, West Bengal is in full swing and expected to be completed within FY 2022-23. During FY 2021-22, significant milestones pertaining to this Project were achieved viz. flag- off of the first train manufactured for Pune Metro from Italy on 30th July, 2021; inauguration of the first aluminium coach designed and manufactured by the Company for Pune Metro by the Hon'ble Prime Minister Shri Narendra Modi on 6th March, 2022, when he also bought a ticket from the kiosk from an app on his mobile and took a ten-minute ride from Garware Station to Anand Nagar Station in Pune; and the dispatch of the first metro coach produced in India for Pune metro from the Company's factory in Uttarpara, West Bengal, which was flagged-off by Hon'ble Shri Manoj Joshi, IAS, Secretary - Ministry of Housing and Urban Affairs Government of India. The Company is planning to bid for upcoming metro projects in Tier I and 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 and the DFC wagons are expected to contribute significantly to the Company's revenues in future.

The Company had earlier collaborated with ABB India Limited (ABB) to work together to design, develop and manufacture state of the art 3 phase IGBT based propulsion systems for EMU/MEMU being manufactured in Titagarh's plant at Uttarpara, West Bengal, with certain components being supplied by ABB. In addition to a good market potential for the propulsion business, such business alliance is also very strategic for train production business. In the propulsion tenders, your Company is well placed and is expecting additional orders. While the trial production of the traction motors and the traction converters has already commenced at the Company's facilities, the regular production is expected to start within FY 2022-23, which would be a very important milestone as it would move the Company into a high technology area of propulsion electronics.

The Company is also trying to develop an export market for both the freight wagons and transit train business. International certification and application for accreditation of services have already been completed for wider acceptance of its products globally. A Representative office has recently been opened in America, while the Company already has a significant presence in Europe through the Italian subsidiary involved in transit train manufacturing. The Indian and Italian operations would be synergised to cater to the global market for both the freight wagons and transit business.

Shipbuilding, Bridges and Defence (SBD) segment also is in the centre of the Company's strategy and gets substantial focus. During the year under review, the Company acquired 8.8 acres of land and infrastructure of erstwhile Precision Shipyard at Falta, W.B. to expand the shipbuilding business. With this acquisition, the Company would be able to functionally merge the 2 facilities at Titagarh and in Falta in order to cater to a much wider range of specialised shipbuilding activities and also enable the Company to participate in tenders for larger vessels. The Company has during FY 2021-22 also successfully launched its first warship vessel for the Indian Coast Guard in co-operation with Garden Reach Shipbuilders and Engineers Ltd. (GRSE). The Company would continue to participate in the upcoming shipbuilding tenders. Currently Titagarh is executing a total order for 18 Ships for Indian Navy, GRSE & WBTIDCL.

Powered by the world's most experienced and well equipped manufacturers, the Company also manufactures modular bridging solutions which have multiple options in width and span, as the same includes unique, easy to move and ready to assemble panels. These bridges can be opened to traffic immediately after installation.

The Company is also the industry partner to Defence Research and Development Organisation (DRDO) and holds an industrial license for defence manufacturing. Titagarh manufactures various other products for the Indian Defence establishment such as special purpose wagons, shelters and other engineering equipment as an 'Industry Partner' to the DRDO, Ministry of Defence. The Company would continue to participate in the upcoming defence related tenders.

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

The year ended March 31, 2022 was characterized by the results of the various strategic initiatives undertaken by the Company in terms of restructuring of long-term debts, recapitalization of the Company, execution of projects under completion (including legacy contracts), substantial increase in the order book, rationalization of some company structures and finally concentration of all production activities at the Caserta site. The main goals achieved are the following:

1. Investment agreement with Invitalia - The Company has signed a term sheet with Agenzia nazionale per l'attrazione degli Investments e lo sviluppo di impressed a company/ agency owned by the Government of Italy. The purpose of this agreement is to infuse fresh capital into TFA by Invitalia along with a third-party investor. The investment by Invitalia is to support inter alia in the process of industrial growth of the company.

2. Restructuring of long-term debts with the Bank of Baroda - On 17th December 2021, pursuant to the one-time restructuring applicable for the Covid-19 pandemic, the Company achieved successful restructuring of its existing debt of Euro 79.75 million with the Bank. The restructuring of the long-term debts inter alia includes rescheduling and extending the repayment of the existing long-term debts over two more years as a result of which the cash outflow for the next 3 years will be reduced by Euro 30 million. This will support the Company to use the internal cash accruals to ramp up the production.

3. Order Backlog - On 21st January 2022, the Company signed a framework agreement with the Lazio Region for the supply of 38 trains for a value of 282 million euros. The framework agreement provides for the design of new trains for the Rome-Lido di Ostia and Rome-Viterbo railway networks. With this, the Company's order book (including framework contracts) stands at a good level of 507 million euros, of which only 5% is at the end of its life (including legacy contracts). For this framework contract, the first two application contracts have already been issued for a value of 235 million euros.

4. Delivery of two new trains - The Company has successfully designed, produced and delivered two prototype metro trains, one for Pune Metro (India) and the other for Catania Metro (Sicily). This is an extremely important milestone for us since we were able to supply these two trains in parallel in less than 24 months in spite of the Covid and other difficulties faced by us.

5. Completion of end-of-life contracts (including legacy contracts) - The contracts inherited at the time of the acquisition of Firema Trasporti S.p.A in A.S., and some other contracts, had caused, over the years, substantial losses and significant absorption of liquidity; these contracts are being completed and will see deliveries of the related rolling stock by the second quarter of the financial year 22-23. The completion of these contracts will free up large sums of capital still part of the working capital, which will then be used to settle the overdue payments of suppliers and normalize the working capital cycle.

6. Integration of the sites and rationalization of the workforce - A substantial reduction in fixed costs has been implemented by consolidating operations from 3 sites in a single site in Caserta with the simultaneous improvement

of productivity. The number of employees reduced from 568 in March 2021 to 420 (including 30 employees who have been put-on long-term layoffs due to the shifting of operations from Tito to Caserta site from 1st January 2022). The integration of the site and rationalising of the head count will improve the hourly rate and will make the Company more competitive going forward.

7. Future prospects - The impetus given by the European Union and the Italian Government to green mobility and infrastructure development will open up unprecedented business opportunities for the Company. One of these programs of the Italian Government is the Reconstruction and Resilience Program (PNRR), which plans to invest 40.4 billion euros over the next 3-4 years in the public transport sector, of which a good part in the railway sector, where we will try to participate.

The financial results for the year was impacted due to execution of the end of life contract (including legacy contract) as the strategy of the Company during the year was to focus on completion of these contracts to the maximum possible. Although this resulted into loss at the bottom line more than what was forecasted, however, it was very positive from the cash perspective. Significant amount of cash was blocked in the net working capital of these projects and it was important to release the cash so that the same can be utilised to pay off the overdue suppliers and to use for the new projects. Once the end-of-life contracts (including legacy contracts) are fully executed which is expected by the second quarter of FY 22-23, the Company would be able to concentrate on the new contracts which will be 3- 4 projects in parallel and this will bring in efficiency and proper allocation of the resources.

The results for the year ended 31st March 2022 includes certain non-recurring items and one time provision made towards the closure of the end-of-life contracts (including legacy contracts) aggregating to Euro 5.7 million.

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

Titagarh Bridges and International Private Limited ('TBIPL') (Formerly: Matiere Titagarh Bridges Private Limited), a wholly-owned subsidiary of the Company, is engaged in the business of manufacturing, marketing and selling all types of bridges including metallic bridges and auxiliary products, including all metallic and modular bridge equipment parts related thereto. Pursuant to an agreement between the Company and Matiere S.A.S., France ('Matiere'), the technical know-how for execution of the ongoing contracts as well as manufacturing and selling of the Bridges by TBIPL in the agreed territories are provided by Matiere.

During the year under review, TBIPL recorded a profit of Rs. 269.15 lakhs as compared to the loss of Rs. 63.91 lakhs in the financial year ended 31st March, 2020. The improved performance was mainly on account of increase in revenue from construction contracts during the FY 2021-22.

The Board of the Company and TBIPL at its meeting held on 10th January, 2022 respectively approved the draft Scheme of Amalgamation of TBIPL with the Company w.e.f. the Appointed Date: 1st April, 2021. TBIPL being a wholly owned subsidiary of the Company, no consideration is payable and the equity shares and optionally fully convertible debentures held by the Company in TBIPL shall stand cancelled upon the Scheme becoming effective. The Scheme was approved by the shareholders and creditors of the Company and the unsecured creditors of TBIPL at the meetings convened pursuant to the directions issued by the Hon'ble National Company Law Tribunal (NCLT) and held on 10th May, 2022, and is now awaiting the final sanction of NCLT. Pursuant to the merger of TBIPL with the Company, all the assets and liabilities of TBIPL including the shares held by it in Titagarh Singapore Pte. Ltd., Singapore, and Titagarh Firema S.p.A., Italy, would be transferred to the Company

(e) Order Book position

The total order book of Company on a standalone basis stood at Rs. 2,806 crore at the end of March, 2022, which was well diversified across the three segments with the order book at Freight segment at about Rs. 1,132 crore, the Transit & Propulsion at about Rs. 1,225 crore and the SBD segment at about Rs. 450 crore. With the award of the largest order ever from the Indian Railways in May 2022 for 24,177 wagons valued at over Rs. 7,800 crore, the total order book for the first time crossed Rs. 10,000 crore for the Indian (standalone) operations and Rs. 15,000 crore for the consolidated operations. Going forward the revenue mix of the Company will undergo a substantial change with business other than Wagons contributing substantially to the top line. It is expected that more than 50% of Indian order book would be from the non-wagon division which will reduce dependency on the wagon business.

(f) Industry overview of Business Segments Freight Rolling Stock

India has the fourth-largest railway system in the world, following the US, Russia and China. As of FY21, the Indian Railways had 13,452 passenger trains and 9,141 freight trains. As of FY21, it had a total route network of 68,103 kms. Indian Railways has logged the highest ever electrification of sections covering 6,015 Route Kilometer (RKM) in a single year during 2020-21. More than 5 times electrification was achieved during (2014-21) last seven years as compared

to during 2007-14. By 2024, Indian railways will be run completely on electricity.

Revenue growth has been strong over the years. Indian Railways' revenue reached US$ 23.30 billion in FY22. The gross revenue stood at US$ 16.89 billion in FY2. RailTel, a PSU under the Railway Ministry, which provides fast and free Wi-Fi across the Indian Railways network, announced its highest ever consolidated income of Rs. 11,660.05 million (US$ 158.48 million) for FY19-20. This income figure is a growth of 12.3% over the consolidated income of the financial year FY18-19. The gross revenue stood at US$ 23.3 billion in FY22 (until March 10, 2022).

Freight remains the key revenue earning segment for the Indian Railways, accounting for 75.8% of the total revenue in FY22, followed by the passenger segment.

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.

Indian Railways is also looking at other areas of revenue generation such as the following:

a) Change in composition of coaches so that it can push the more profitable AC coach travel;

b) Additional revenue streams by monetising traffic on its digital booking IRCTC; and c) Disinvesting IRCTC. The Indian Railways has decided to undertake electrification of Broad Gauge (BG) rail lines in a mission mode and is likely to complete the process by 2023-24.

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 16 operational metro systems in India with a total of more than 700 km of operational metro lines and a further 1000+ km of lines are under construction and/ or being proposed. According to nodal ministry, a total of 34 Metro Rail projects are at various stages of progress in the country including Delhi- Meerut Regional Rapid Transit System (RRTS)

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 or Metrolite, Metroneo 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.


The development of Metro network has ushered a wave of latest technologies unleashing investment, generating jobs, and business opportunities in the country. 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.


The Indian shipbuilding industry finds itself in a position that is below its true potential. The industry today exists as a largely monopolist market for defence shipbuilding with a reasonably strong domestic demand, while not making any significant headway in commercial shipbuilding, with little demand.

In Union Budget 2022-23, the total allocation for the Ministry of Shipping was Rs. 1,709.50 crores (US$ 223.31 million). India has plans to invest US$ 82 billion in port projects by 2035. 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.

Outlook / Status of shipyards in India

India's shipbuilding industry comprises of both private and public shipyards, with about 28 shipyards and Shipbuilding assets (not including many minor boat yards) distributed on both the east and west coast. For defence shipbuilding, the

infrastructure and capability exists for building state of art combatants i.e. aircraft carriers, submarines, destroyers, frigates etc., while in terms of commercial shipbuilding, capacity, capability and infrastructure exists for building vessels ranging from niche small high speed crafts to very large cargo vessels up to 400,000 DWT.


India's Defence budget for FY 2022-23 stands at USD 54.20 billion (Rs. 4,05,470.15 crore) after excluding the component of the Defence pensions and is primarily focused towards the upkeep and modernization of an operational Armed Forces. The capital outlay, which focuses towards the modernization of Armed Forces has been increased by 12.82 percent with an allocation of USD 20.36 billion (Rs. 1,52,369.61 crore). In recent times, the Defence budget has also been sensitive to the need for establishing a technological framework to advance growth of a vibrant indigenous military manufacturing infrastructure. For this self-reliance initiative, 68% of the capital procurement has been proposed to be earmarked for domestic industry, up from 58% in 2021-22.

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

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.

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:

SI. Key Financial Ratios 2021-22 2020-21 Difference (%)
1 Debtors Turnover Ratio (days) 52.88 86.30 -38.73%
2 Inventory Turnover Ratio (days) 88.20 102.89 -14.28%
3 Interest Coverage Ratio (times) 3.25 2.38 36.47%
4 Current Ratio (times) 1.22 2.35 -48.27%
5 Debt Equity Ratio 0.12 0.12 -
6 Operating Profit Margin (%) 12.32% 12.74% -3.28%
7 Net Profit Margin (%) 5.38% 6.29% -14.46%

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

• Debtors Turnover Ratio: Variation is attributable to better collection of trade receivables compared to the

volume of operations.

• Interest Coverage Ratio: Variation is primarily due to increase in earnings as compared to the volume of operations.

• Current Ratio: Variation is primarily due to temporary increase in current borrowings and advance from customers.

(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 2021-22 2020-21 Difference (%)
Return on Net Worth (%)
- Before considering exceptional item 11.22% 6.90% 62.65%
-After considering exceptional item 11.22% 7.40% 51.68%

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

Considering various financial/non-financial parameters, the Directors with a viewto conserving resources do not recommend any dividend for the FY 2021-22.

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://titaaarh.in/policies-and-codes.

There was no change in the authorised share capital of the Company during the year under review.

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. 21- each fully paid as per the ESOS.

Options resulting in 129,500 equity shares and 54,000 equity shares allotted on 10th August, 2021 and 13th November, 2021 respectively to the eligible employees upon exercise by them in conformity with ESOS led to increase in the paid up equity share capital to Rs. 23,91,42,178/- as at 31st March, 2022 consisting of 11,95,71,089 equity shares of Rs. 21- 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.

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.

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 (‘I EPF 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 3,764 equity shares of Rs. 21- each, to the IEPF account, on 8th November, 2021, 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. 9th October, 2021. The details of all shares transferred to the IEPF Account are uploaded on the Company's website.

The Company has identified 166 shareholders (including one unclaimed suspense account) holding 55,731 equity shares in aggregate, who have not claimed their dividend consecutively since FY 2014-15 and therefore shares held by them are liable to be transferred to the IEPF Account on due date i.e. 22nd October, 2022. The Company has 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 21st July, 2022, 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.

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

7. 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.

The Company has also appointed a Chief Risk Officer for the purpose of effective coordination of the risk management mechanism.

8. 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, 2022, of subsidiaries: Titagarh Bridges and International Private Limited (TBIPL); Titagarh Singapore Pte. Ltd., Singapore; Titagarh Firema S.p.A., Italy; 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, the Board at its meeting held on 10th January, 2022 has approved the draft Scheme of Amalgamation of TBIPL, a wholly owned subsidiary with the Company, with 1st April, 2021 as the Appointed Date, subject to the sanction by the Hon'ble National Company Law Tribunal (NCLT).

9. 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.

10. Number of Board Meetings

The Board of Directors met Eleven (11) times during the financial year 2021-22 as per the details provided in the Corporate Governance Report forming part of Annual Report.

11. 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.

12. 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.

13. 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.

14. 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.


15. 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.

16. 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 2021-22 has been hosted on the Company's website, which can be accessed at https://titagarh.in/report/ annual-report.

17. 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.

18. 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.

19. 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 2021-22.

20. Directors and Key Managerial Personnel

Pursuant to the recommendation of the Nomination and Remuneration Committee (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 24th Annual General Meeting (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 shareholders at their 24th AGM held on 27th September, 2021 approved the aforesaid appointment of Shri J.P. Chowdhary by passing their special resolution. The shareholders in their 24th AGM also passed resolutions to approve the appointment of Shri Sushil Kumar Roongta (DIN: 00309302), who was earlier appointed by the Board as Additional Director (Category: Independent) w.e.f. 1st January, 2021 to hold office for a term of five years, and Shri Prithish Chowdhary (DIN: 08509158) who was earlier appointed by the Board as Additional Director (Category: Non-Executive) w.e.f. 1st January, 2021.

The Board has recommended necessary resolution to be passed at the ensuing 25th AGM for the (i) reappointment of Shri Atul Joshi (DIN: 03557435) as Independent Director to hold office for a second term of five years w.e.f. 24th January, 2023 and (ii) change in designation of Shri Prithish Chowdhary to Director (Marketing and Business Development) for a term of five years on and from the date of approval by the shareholders at the AGM.

Shri Anil Kumar Agarwal, Director (Finance) & CFO, 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 Fifth Annual General Meeting.

The Board has pursuant to the recommendation of Nomination & Remuneration Committee at their respective meetings held on 13th August, 2022 appointed Shri Ravi Prakash Mundhra as the Company Secretary and Compliance Officer of the Company w.e.f. the said date in place of Shri Sumit Jaiswal who resigned due to his personal reasons.

21. 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 2021-22 as per the details set out in Corporate Governance Report.

22. 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.

23. 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.

24. 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 31,2022 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.

25. Statutory Auditors

Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (FRN 304026E/E-300009), who were appointed as Statutory Auditors of the Company at the 20th AGM holds their office until the conclusion of the ensuing 25th AGM.

Pursuant to the recommendation of the Audit Committee, the Board has recommended the reappointment of Price Waterhouse & Co Chartered Accountants LLP as Statutory Auditors of the Company for a second term of five years to hold office from the conclusion of the 25th AGM until the conclusion of the 30th AGM. They have given their consent for the proposed reappointment as Statutory Auditors of the Company. They have further confirmed that the said reappointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for appointment.

The Auditors' Report on the standalone financial statement for the year ended 31st March, 2022 does not contain any qualification, reservation or adverse remark.

26. 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, 2022 (CFS) does not contain any qualification, reservation or adverse remark, except a qualified opinion and an emphasis of matter as mentioned hereinafter. As regards the qualified opinion in regard to non-classification of the financial debt taken by Titagarh Firema S.p.A. ('TFA'), a subsidiary of the Company, from two financial institutions as due within 12 months due to failure to comply with some financial parameters, the Note 46 to the Notes to Accounts of the CFS may be referred to wherein inter-alia it has been explained that there has been no communication from the Banks for the immediate repayment of the above debts and based


on the discussion and email correspondences, the management of TFA is reasonably certain to obtain such waiver from the Banks shortly. 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.

27. 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 2022-23 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, 2022 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.

28. Secretarial Auditor

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

29. Deposits

The Company did not accept any deposits covered under Chapter V of the Companies Act, 2013 during the financial year ended March 31, 2022.

30. 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, 2022 was 551.

31. 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.

32. Corporate Social Responsibility

A report on Corporate Social Responsibility (CSR) activities undertaken during the financial year ended March 31, 2022 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.

33. 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, 2023 have been duly paid.

34. 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.

35. 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.

36. 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
Kol kata J P Chowdhary
13th August, 2022 Executive Chairman