Kalindee Rail Nirman (Engineers)

At the outset I would like to welcome all of you at the 24th Annual
 General Meeting. I on behalf of the Board of Directors and employees
 and staff of Kalindee Family extend my sincere gratitude to you for
 trust reposed on us.
 
 The investment made on expansion and allied activities has shown the
 desired benefits. The edge in technology and performance in our
 services has been majorly reflected in the financial numbers. The
 unprecedented increasing input costs of various raw materials and
 labour cost though had an impact on the profitability, we have been
 able to maintain reasonable profitability through effective cost
 management. Though the competition has become keener, we have managed
 to increase our portfolio.
 
 I present the Annual Accounts for the year 2007-08 with a sense of deep
 pride and satisfaction. Each year we have progressively raised the bar
 based on our own successes. The cash surplus of the Company rose
 steadily from Rs 1005.68 lacs in 2007 to Rs 1509.54 lacs in 2008. Our
 operating ratio has also improved to 10.24%. We are taking your Company
 to greater heights. On this path of progress, 450 nos. of employees
 have worked shoulder to shoulder as a guiding beacon to write a story
 of success. It is for this reason that your Company has received
 acclaim in various quarters.
 
 1.  . As we improved the financial performance, we have provided the
 saftiest standard of finished work to behemoth like Indian Railways and
 Delhi Metro Rail Corporation Limited which had in turn provided the
 common mass the nations most economical, efficient and profitable
 transport system.
 
 2.  Instead of distressing our customers we concentrated on enhanced
 utilization of our assets and increasing their productivity. Our
 operating guidelines have been oriented towards better network, better
 utilization of rolling stock, decrease in transit times and increase in
 output.
 
 3.  An excellent synergy between investment and operating policies
 helped us achieve better financial results. Railways competitive edge
 has been sharpened through strategic alliances.
 
 4.  Current years performance
 
 Our physical and financial performance in the year 2007-08 has once
 again shown marked improvement registering a growth of 30.78 % and
 earning from Rs. 188.12 crores to Rs. 246.03 crores.
 
 5.  Business Potential
 
 (i) It is known fact that more than 75% of Railways goods traffic moves
 on about 20,000 km of the railways high density network, coal and iron
 ore routes and port connectivity railway lines. Many of these routes
 are fully saturated and capacity utilization is in excess of 100%.
 Enhancing the capacity of these routes and development of
 infrastructure is vital for the future of the Indian Railways. In view
 of submission of Honble Railway Minister a route-wise detailed study
 was carried out and a blue print of same was also submitted. An
 investment of about Rs. 75,000 crores will be made over the next seven
 years to augment line capacity on these routes. Route-wise works would
 be undertaken in a phased manner including works of doubling, third and
 fourth lines, bye-passes, flyovers, crossing stations, inter-mediate
 block stations, automatic signaling works and yard re-modeling. This
 also includes construction of the Eastern and Western corridors. This
 entire network will be provided with IBS by March 2009 leaving
 tremendous scope for your Company.
 
 (ii) With the unprecedented growth in economy, needs for transportation
 logistics in the country have also increased manifold. To meet the
 projected needs of railway traffic, Indian Railways have proposed to
 invest Rs. 2,30,000 crores on expansion of its infrastructure in the
 1lth five year plan as against an expenditure of Rs. 84,000 crores
 incurred during the 10th five year plan.
 
 Indian Railways have targeted to add 15,000 km of Broad Gauge tracks
 through construction of new lines, gauge conversions and doublings in
 the ongoing 11th five year plan. In addition to this, mega projects of
 Dedicated Freight Corridors namely the double line corridors between
 Delhi and Kolkata and Delhi and Mumbai are also to be completed in next
 five years time. A target of this sized shall only be possible with the
 active support and involvement of the construction industry.
 
 (iii) Dedicated rail freight corridor (DFC)
 
 The Indian railways (IR) have witnessed a dramatic turn-around and an
 unprecedented financial turnover in the past two and a half years. This
 has been made possible by higher freight volumes without a substantial
 investment in infrastructure, increased axle load, reduction of
 turn-around time of rolling stock, reduced unit cost of transportation,
 rationalization of tariffs resulting in improvement in market share and
 improved operating margins. Over the past 2 to 3 years, the rai2way
 freight traffic has grown by 8 to 11%, and is projected to cross 1,100
 million tones by the end of the Eleventh Five Year Plan. In order to
 support the increased volume and increase the share of freight revenue
 in the total revenue, the government has decided to build a DFC. The
 government has earmarked Rs 32,000 crores for the project in the Xlth
 plan.
 
 The Golden Quadrilateral is the busiest and most important part of the
 high density network. It would be pertinent to mention here that the
 works of Eastern freight corridor from Ludhiana to Dankuni, situated
 near Kolkata, and the Western corridor from Delhi to JNPT have been
 sanctioned and that the construction work on both these projects will
 commence in 2008-09. Detailed feasibility studies for the North-South,
 East-West, East-South and West-South Dedicated Freight Corridors are
 being carried out. Action is being taken to expedite sanction for
 construction of these corridors.
 
 (iv) Need for Dedicated Freight Corridor Project
 
 The Golden quadrilateral of Delhi, Mumbai, Chennai and Howrah and its
 two diagonals (Delhi - Chennai and Mumabi-Howrah) carry more than 55%
 of the revenue earning freight traffic of the IR. The existing trunk
 routes of Howrah-Delhi on the eastern corridor and Mumbai-Delhi on the
 western corridor are highly saturated with their line capacity
 utilization varying from 115% to 150%. The surge in the demand for
 power (requiring heavy movement of coal), the booming infrastructure
 and growing international trade have led to the conception of the
 Dedicated Freight Corridors (DFCs) along the eastern and western
 Routes. To facilitate the smooth and efficient working of the DFC, the
 ministry of railways has created a special purpose vehicle (SPV) named
 Dedicated Freight Corridor Corporation of India Ltd (DFCCIL). To start
 with, the IR has planned to construct a new DFC covering about 2762 kms
 on two corridors - the eastern corridor from Ludhiana to Sone Nagar and
 the western corridor from Jawahar Lal Nehru Port, Mumbai to
 Tughlakabad/Dadri - and interlinking the two corridors at Khurja. The
 project would lead to up-gradation of transportation technology, the
 increase in productivity and the reduction in unit transportation
 costs.
 
 (v) Modern and Automatic Signaling System:
 
 Furthermore, so far signaling has been utilized primarily for railway
 safety, whereas there is considerable scope to enhance line capacity
 through provision of modern signaling systems. Keeping this in view
 Indian Railway have started expansion of automatic signaling system on
 the network. This system already exists on Delhi-Ghaziabad, Chhota
 Ambala-Sitarampur, Palwal-Mathura and Dhanu Road-Mumbai sections. The
 automatic signaling works for Kanpur-Mughalsarai section though
 sanctioned were frozen. It is also decided to re-start the work of
 installation of this system on this section. Further Railways has also
 started automatic signaling work on Ghaziabad-Kanpur section. Work for
 providing automatic signaling on Howrah-Khana, Delhi-Palwal, Vadodara-
 Surat- Valsad-Dahanu Road have already been sanctioned. After the
 completion of these works, there will be a quantum jump in the existing
 line capacity along with considerable improvement in railway safety.
 
 (vi) Metro Rails:
 
 In order to address the problems of poor infrastructure and rising
 traffic, Mass Rapid Transport System (MRTS) projects like metro rails
 are gaining importance in various states. Since your company has
 already bagged orders from the Delhi Metro Rail Corporation in phase I
 & II in the past, it has proved that it has the skill set and the
 required technologies to win more such orders. This makes it a strong
 contender for the upcoming metro projects in Mumbai, Bangalore and
 Hyderabad. The XI plan has earmarked Rs. 23500 crores for metro
 projects.  (vii) Public Private Partnership: Railways would have to
 make heavy investments for the expansion of the network, modernization
 and upgradation of the technology and for providing world class
 facilities to the customers in the coming years. For this purpose,
 Railways have made a plan to invest Rs. 2,30,000 crores, within the
 next 5 years. For funding a large portion of this plan, use of internal
 resources and borrowings will be resorted to. However it would be
 difficult to finance such a large investment programme solely from
 Railways own resources. Therefore, Indian Railways have started many
 PPP schemes for attracting an investment of Rs. 1,00,000 crores over
 the next 5 years.
 
 (viii) Opportunities from Private Sidings: Your company has forayed
 into building of railway sidings which has great potentials of revenues
 in the future keeping in view the ongoing capex investments undertaken
 by leading companies in cement and steel sectors. Kalindee has already
 undertaken projects for companies such as Vedanta and Dalmia Cement,
 and is in talks with other players to get more such business.
 
 Last year, Orissa Government has signed a large number of MOUs with
 private firms for setting up new industrial units, mostly in the steel
 sector and also covering sponge iron units. The MOUs include power
 projects, cement plants and aluminium plants to be complete with
 bauxite mining facilities, production of alumina as well as metals.
 
 Private Railway sidings will be needed for all these projects. At least
 seven sidings will have to be set up to cater to the requirements of
 the mines in Nayagarh.
 
 6.  Vision 2025
 
 The encouraging Financials of the Company has been achieved by thinking
 beyond the beaten path, taking innovative decisions in commercial,
 operational and pricing policies and through cross functional
 cooperation and coordination. For making this turnaround durable, we
 are planning to prepare a Vision Document which will present new ideas
 and initiatives in a novel manner. This shall outline our preparedness
 and strategies for the future. This document will set forth the target
 for the coming years in the field of operational performance and
 quality of service. It will also detail an action plan for achieving
 the stipulated targets and necessary investment plans thereof. This
 will have a blue print of an organization that encourages
 trans-departmental decision to taking the Company to unprecedented
 heights. This document will inspire the Companys management and its
 employees to do new experiments, and will be like a guiding light for
 the future generation.
 
 7.  Information Technology Vision 2012
 
 In order to make improvements in operational efficiency, bringing
 transparency in working and providing better services to the customers,
 your Company is trying to bring about radical changes in technology
 systems and processes. For achieving these objectives, attention is
 being focused on I.T. applications. For getting maximum benefit in the
 coming years, the mantra for present and future I.T. applications would
 be seamless integration. For the organization, planning and deployment
 of resources would become much easier with a panoramic view of assets
 and this would have a multiplier effect on productivity, organizational
 efficiency and staff satisfaction. The Vision for IT would be
 implemented over the next 5 years.
 
 8.  Safety
 
 Safety is our highest priority. Our sustained efforts have led to
 significant improvement in Railways safety. Government of India is
 investing billions of rupees on Railway safety which is a reflection of
 Centres commitment towards safety of the rail network
 
 9.  Conclusion
 
 Your Company is undergoing unprecedented boom phase in railway sector
 creating huge opportunity which is bound to continue in next decade and
 more. All the Members and staff of the Company including its Clients
 and Bankers have extended their full cooperation.  Needless to say we
 have been able to make unique achievements only by virtue of your
 abiding faith, affection and blessings for the Kalindee family
 
 sd/-
 R D Sharma
 Chairman cum Managing Director