The Directors are pleased to present their Fifteenth Annual Report and
Audited Accounts for the year ended the 31st March, 2012.
Profit, Retention & Dividend
Your Company''s financial performance was as follows :
(Rs. in Lacs)
Particulars 2011-12 2010-11
Turnover 64,432.99 66,670.78
Profit Before Depreciation
and Tax 12,040.97 12,838.07
Less: Depreciation 558.73 576.92
Profit Before Tax 11,482.24 12,261.15
Less: Provision For Taxation 3,819.79 4,121.73
Profit After Taxation 7,662.45 8,139.42
Balance Brought Forward from
Last Account 23,301.75 17,761.16
Amount available for Appropriation 30,964.20 25,900.58
Transfer to General Reserve 800.00 850.00
Dividend on Equity 1,604.73 1504.73
Tax on Dividend 260.33 2,665.06 244.10 2,598.83
Balance Carried to Balance Sheet 28,299.14 23,301.75
Global economy, against a backdrop of unresolved structural fragilities
suffered major setbacks during the financial year ended the 31st March,
2012 which include unrest in some oil-producing countries, substantial
financial turbulence encountered by Euro zone, sell-off of risky
assets. Following the aforesaid, Global growth is expected to moderate
to 4% through 2012 and the real GDP in the advanced economies is
projected to expand at a very slow pace of about 2% based on certain
assumptions, whereas emerging and developing economies would record
lower growth rate of about 6% in 2012. Indian economy is estimated to
have grown @6.9% in 2011-12 after having grown at the rate of 8.4% in
each of the two preceding years. However, slowdown in the industrial
growth would lead to decline in the real GDP growth during this fiscal.
Concomitantly, the domestic economy is faced with major challenges
posed by high inflation rate and recently witnessed sharp depreciation
The Company''s Operating Profit during the year under review (FY
2011-12) at Rs.13,090.36 lacs, declined marginally as compared to that
in the previous financial year (FY 2010-11) and Profit Before Tax and
Profit After Tax were lower by 6.35% & 5.86% respectively mainly due to
lower sales realisation per unit from the main segment viz. Wagons and
Coaches and rise in the input costs.
Your Company''s focus on pursuing aggressive growth in the other
business verticals coupled with innovative manufacturing processes for
higher efficiency aimed at achieving inclusive growth in business
continues for maximisation of shareholders value. Your Directors have
in principle decided to restructure the Company through an apporopriate
scheme of Restructuring subject to all applicable
compliances/approvals/laws, with a view to achieving the growth
potential of the major verticals of the Company.
The Board of Directors has recommended a dividend of 80% i.e. Rs. 8/-
per share on 2,00,59,069 equity shares of Rs. 10/- each fully paid up
subject to approval of the members, by appropriation of Rs. 1865.06
Lacs (including Rs. 260.33 lacs being Dividend Distribution Tax) after
transferring Rs. 800 lacs to General Reserves from the profit for the
Financial Year ended March 31, 2012.
Conversion of Warrants into Equity Shares
During the year the Company''s paid up capital increased from
1,88,09,069 equity shares of Rs. 10/- each to 2,00,59,069 equity shares
of Rs. 10/- each upon conversion of 12,50,000 Warrants into equivalent
equity shares on March 7, 2012.
Wagons and Coaches
Wagons segment of the Company continues to be the dominant contributor
to revenues and operating profit of your Company, accounting for 88.00%
and 80.05% of the total revenues and operating profit respectively
during the year under review. During FY 2011-12 the Company
manufactured 2761 and despatched 2855 Units of Wagons as against 2867 &
2870 respectively in FY 2010- 11 representing production being lower by
3.69% and a negligible 0.52% decline in sales volume in that order when
compared to the corresponding numbers in the previous financial year.
During the FY 2011-12 two rakes of Coaches (EMUs) were despatched
generating revenue of Rs. 1956.66 lacs. The Company has secured orders
for 12 rakes of MEMU and 11 rakes of EMU from the Indian Railways
during the year under review. The facilities at Uttarpara being
equipped to turn out fairly large number of AC/EMUs per month, timely
delivery of the said rakes of MEMU and EMU is expected to be smooth.
The Operating Profit of the Segment at Rs. 10,471.62 lacs was lower by
6.58% than that in FY 2010-11 due to lower sales realisation per unit.
Metro Railways/Mass Rapid Transport System (MRTS) in major cities
across the country has been considered to be essential to cater to
transportation needs of urban/semi urban commuters and there exists
enormous potential for self-propelled railway passenger vehicles such
as EMUs, Diesel Multiple Units (DMUs), Main Line Electrical Multiple
Units (MEMUs) and metro coaches etc.
Though demand for Wagons from Indian Railways (IR) is projected to be
firm with quantities varying in line with the funds earmarked by IR and
its policy for such procurement from year to year, introduction of
Wagon Leasing Policy, new Wagon Investment Scheme is expected to
provide the impetus to private sector customers for increase in the
off take of Wagons.
Bulk of Steel Castings produced by the Company is used for captive
consumption in the manufacture of critical components such as bogies
and couplers at competitive prices. External Sales ofthe Segment at Rs.
4,045.76 lacs and Profit before Interest & Tax at Rs. 1,691.68 lacs
during the year under review were higher by 79.62% and 32.31%
respectively than that in the previous financial year ended the March
31, 2011. The Division besides being strategically of vital importance
to ensuring ready availability of castings for uninterrupted
manufacture and timely delivery of Wagons, has great potential for
growth in future.
Heavy Earth Moving Machinery (HEMM)
The Division recorded a marginal amount of loss at Rs. 34.96 Lacs
during the year under review despite higher average sales realisation,
mainly due to higher production cost caused by rise in input costs even
as three machines manufactured during FY 2011-12 were deployed on lease
to customers. Facilities of the Division have been revamped, however
the change in marketing strategy in line with the demands of customers
is in focus to tap the segment''s real potential aimed at materially
enhancing its contribution to the overall financial performance of your
Special Projects - Steel Bridges
Revenue from Steel Bridges accounts for a marginal portion of the total
revenues of the Company and income from sale of the product by the
Company during FY 2011-12 at Rs. 711.80 lacs was lower by about 69%
over those of FY 2010-11 as the volume of production and sale of Bailey
Bridges went down by 50% and 48% respectively during the year under
review. However, besides the eligibility of the Company to get a repeat
order during the current year, the segment affords the prestige of
being associated with the country''s defence sector.
Strategic and Joint Venture Agreements
Your Company has entered into strategic partnerships mentioned below
for growth and expansion of its businesses :
Cimco Equity Holdings Private Limited (CEHPL)
The Joint Venture namely Cimco Equity Holdings Private Limited (CEHPL)
is the holding company of CIMMCO Limited (Cimmco) and Cimmco''s net
worth having turned positive in a short span of nine months, it was
discharged by the Hon''ble BIFR from the provisions of SICA vide order
dated December 7, 2010. Cimmco is a manufacturer of Wagons and
Engineering Products, however there is no conflict of interest.
Greysham and Co. Private Limited (Greysham)
The joint venture namely, Greysham and Co. Private Limited for
manufacture of Air Brakes and Slack Adjusters, being the critical
components for production of Wagons was set up by the Company on June
13, 2008. Greysham is treated as a subsidiary of the Company in terms
ofthe provisions of the Companies Act, 1956 pursuant to the right of the
Company to appoint majority of Directors on its Board.
Joint Venture Agreement with FreightCar America Inc. (FCA)
Pursuant to the Joint Venture Agreement (JV) entered into between the
Company and FCA, a private limited company, ''Titagarh FreightCar
Private Limited'' was incorporated in India (JVC) with the stakes of the
Company and FCA being 49% and 51% respectively in equity capital of
JVC, to develop, design, manufacture, service and distribute Aluminium
Rail Cars, Gondolas and such other products as may be agreed from time
to time between the partners of the JV. Due to various compelling
reasons, JVC has lately withdrawn its proposal for design approval
submitted to RDSO. The Joint Venture is in course of being terminated,
subject to implementation of concluding agreement amongst the parties.
ShriDN Davar and ShriNK Mittal, Directors retire by rotation and being
eligible, offer themselves for re-appointment at the ensuing Annual
General Meeting (AGM). Shri Arvind Pande appointed as an Additional
Director by the Board w.e.f. the March 24, 2012, holds office upto the
date of ensuing AGM and in accordance with Section 257 of the Act is
eligible for appointment. Notice pursuant to the provisions of Section
257 proposing the candidature of Shri Pande has been received from a
member of the Company proposing his appointment.
The information prescribed by Clause 49 of the Listing Agreement in
respect of the said Directors is given in the Corporate Governance
Report annexed to and forming part of this Report.
Directors1 Responsibility Statement
The Directors state that:
Appropriate Accounting Standards as are applicable to the Annual
Statement of Accounts for the financial year ended the March 31, 2012
have been followed in preparation of the said accounts and there were
no material departures there from requiring any explanation;
The Directors have selected and followed the accounting policies as
described in the Schedule 22 (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 and loss
statement of the Company for that period;
Proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
The Annual Accounts have been prepared on a going concern basis.
Statutory Auditors & Auditors1 Report
Messrs. S R Batliboi & Co., Chartered Accountants, Auditors of the
Company retire at the conclusion of ensuing Annual General Meeting and
willing to continue, they have submitted the certificate pursuant to
Section 224(1)(B) of the Companies Act, 1956 about their eligibility for
Messrs. D. Radhakrishnan & Co., Cost Accountants were re-appointed as
Cost Auditor to conduct cost audit of the accounts maintained by the
Company in respect ofthe products manufactured by the Company, for the
Financial Year 2012-13.
The Company did not accept any deposits during the financial year ended
March 31, 2012.
A statement containing in brief the details required under Section
212(3) of the Companies Act, 1956 and pursuant to the Circular No.
2/2011 dated February 8, 2011 issued by Ministry of Corporate Affairs
regarding Titagarh Capital Private Limited (Formerly known as Flourish
Securities and Finance Private Limited), Titagarh Singapore Pte.
Limited, wholly owned subsidiaries of the Company and Greysham and Co.
Private Limited, Titagarh Wagons AFR, France, and Titagarh Marine
Limited (w.e.f. March 3, 2012), subsidiaries of the Company is included
in the Annual Report. The Consolidated Financial Statements including
the details of the Accounts of the subsidiaries are attached to the
Annual Report and Accounts. A copy of the Annual Accounts of the
subsidiaries will be made available upon request for inspection by any
member of the Company/its subsidiaries at the Registered Office of the
Company and those of respective subsidiary companies.
Consolidated Financial Statements
In accordance with Accounting Standard 21-Consolidated Financial
Statement of Accounts, Accounting Standard 23-Accounting for
Investments in Associates in Consolidated Financial Statements and
Accounting Standard 27- Financial Reporting of Interests in Joint
Ventures issued by the Institute of Chartered Accountants of India,
consolidated financial accounts prepared on the basis of financial
statements received from subsidiaries, associates and joint venture
companies as approved by their respective Boards, form part ofthis
Report & Accounts. As regards the attention drawn by Statutory Auditors
in their Report, Note no.32 is self-explanatory, requiring no specific
response from the Directors at this stage.
The particulars of employees pursuant to Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Amendment Rules, 2011 are set out in the Annexure to this Report.
Industrial relations had been cordial throughout the year under review.
The Directors express appreciation of the efficient services rendered
by the employees at all levels.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
A statement pursuant to Section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of
Directors) Rules, 1988 on conservation of energy, technology
absorption, foreign exchange earnings and outgo is annexed to and forms
part of this Report.
Corporate Social Responsibility
Your Company''s endeavors to contribute suitably to the society by being
involved in a series of community welfare programmes, directly and
through philanthropic organizations continue. The first batch of 126
students at the campus of Industrial Training Institute (the ITI) set
up on your Company''s land at Titagarh plant situate in Barrackpore,
North 24 Parganas under Private Public Partnership (PPP) with access to
the tools, equipments and machinery together with experienced skilled
officers as faculty provided by the Company for imparting hands-on
training has successfully passed the first module and they have been
admitted to the three advanced modules viz. TIG/MIG Welding, Structural
Welding and Pressure Vessel & Pipe Welding.
Investment of about Rs. 750 lacs including Rs. 500 lacs on construction
of building and Rs. 250 lacs of outlay in machinery, equipments and
other facilities has been committed by the State and land for ITI has
been allotted by Khardah Municipality near Khardah Railway Station and
your Company''s contribution is by way of providing full support for
training of about 180 students and offer them need based employment at
the Company''s facilities.
The second batch of 143 students has been admitted to the preliminary
module - BBBT during the current year. Your Company is also in dialogue
with Directorate of Technical Education for approval of industry
specific course under specialized module on Welding Technology for
Fabrication of Railway Transportation Systems to give the opportunity
to the students of Advanced Module to train and be equipped with the
skills for securing immediate employment The ITI, once operational
fully on the land allotted, shall also cater to the requirement of the
industrial units in the adjoining area for skilled workmen.
The Company''s Equity Shares are listed at the Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE).
The listing fees for the financial year ended March 31, 2013 have been
Your Directors place on record their appreciation of the cooperation and
support extended by the Government, Banks/Financial Institutions and
all other business partners.
For and on behalf of the Board
Place : Kolkata J P Chowdhary
Date : July 30, 2012 Executive Chairman