Dear Shareholders,
Your Directors have the pleasure in presenting the 14th Operational
Annual Report of the Company along with the Audited Financial Statements for the financial
year ended 31st March 2024.
FINANCIAL HIGHLIGHTS
(Rs in lakhs)
|
2023-24 |
2022-23 |
Operating Profit (PBIDT) |
28,783.78 |
13,481.87 |
Less: Interest (Net) |
7,394.88 |
7,107.30 |
Gross Profit (PBDT) |
21,388.90 |
6,374.57 |
Less: Depreciation |
3,518.73 |
3,502.91 |
Profit before Taxation |
17,870.17 |
2,871.66 |
Less: Tax Expenses |
|
|
- Current Tax including tax related to earlier years |
2815.05 |
- |
- MAT Credit entitlement |
(1,357.00) |
(46.08) |
- Deferred Tax Liability/(Asset) |
5143.11 |
934.08 |
Profit after Taxation |
11,269.01 |
1,983.66 |
Add: Balance brought forward from previous year |
17,489.05 |
16,043.57 |
|
28,758.06 |
18,027.23 |
Appropriations |
|
|
Dividend paid |
482.81 |
321.87 |
General Reserve |
200.00 |
200.00 |
Other Appropriations |
(7.37) |
16.31 |
Balance Carried Forward |
28,082.62 |
17,489.05 |
Note: the above figures are extract of the Audited Financial Statements
prepared for the Financial Year ended 31s March 2023 & 31s' March 2024.
Dividend
Your Directors recommend payment of dividend of 50% i.e. ' 0.50 per
equity share of face value of Rs 1 each for financial year ended 31st March 2024.
The Turnover for the year was Rs 348864 lakhs. The Profit before
Depreciation and Tax (PBDT) and Profit before Tax (PBT) for the year were Rs 21388 lakhs
and Rs 17870 lakhs respectively. The Net Profit was Rs 11269 lakhs, after providing net
tax liability of Rs 6601 lakhs for the year as per the Profit and Loss Account drawn up in
accordance with the Indian Accounting Standards as specified under the Companies Act, 2013
('Act'). The Company has transferred Rs 200 lakhs to Free Reserves during the year.
MANAGEMENT DISCUSSION AND ANALYSIS
Overview of the Industry
Among the major nations of the world, India achieved the highest GDP
growth for FYRs 24, further strengthening its position as the fastest growing major
economy. According to the IMF's report World Economic Outlook (January 2024), India is
projected to remain the fastest growing major economy in
both CYRs 24 and CYRs 25. Additionally, consumer price inflation (CPI)
has moderated significantly and the current account deficit (CAD) has also decreased.
These reaffirm that the Indian economy is in a favorable position and is by far the
fastest growing major economy in the world. Given this encouraging macroeconomic scenario,
it is not surprising that consumer sentiment has strengthened. Consequently, your Company
has achieved its best performance to date.
Indian Railways achieved an all-time high freight loading of 1588 MT in
FY' 24, up from 1095 MT in FYRs 15, with a target of reaching 3000 MT by 2030. Total
receipts for FY' 24 were Rs 256093 crore, generating a net revenue of Rs 3260 crore to
support capital expenditure. The budget allocated Rs 252200 crore for capital expenditure,
maintaining the previous year's focus on infrastructure development. An additional Rs
10000 crore was sourced from extra-budgetary resources with continued focus on
infrastructure development.
The Government of India's strong emphasis on increasing the modal share
of rail in freight has opened a multi-year opportunity for wagon manufacturers,
particularly for your Company. With its diverse range of offerings, long-standing track
record, advanced infrastructure, and technical collaborations with global partners, your
Company is well- positioned to capitalize on these emerging opportunities.
Texmaco Business - An Overview
After a challenging few years, your Company is undergoing a significant
rejuvenation, driven by:
i) surging railway capex
ii) robust wagon ordering; and
iii) net cash balance sheet, which has improved execution, margins and
working capital trajectory. With a legacy dating back to 1939, your Company is one of
India's most experienced and a proven leader in the manufacturing and supply of Freight
Cars and Rail Components to the nation's core sectors with a view to serving both domestic
and export market. During the current year, your Company also supplied for two prestigious
export orders for Africa.
In today's dynamic business landscape, staying ahead requires constant
vigilance and strategic foresight. At your Company, we prioritize identifying risks,
seizing opportunities, and continuously adapting our strategies to not only keep pace but
also thrive to be best performing. Our commitment to evaluating and responding to our
environment ensures sustained growth and a strong competitive edge.
We are truly grateful for the support and loyalty our customers have
shown on us. Your continued trust and patronage are the foundation of our success and we
thank you for being an integral part of our journey. We appreciated your choice in us and
for opportunity given to serve you. Your satisfaction and support are of utmost importance
to us.
During the year, your Company also successfully raised equity of Rs
1050 crore, of which Rs 1000 crore were raised through QIP in two tranches of Rs 750 crore
and Rs 250 crore, wherein equity shares were issued and allotted to few of the largest
financial investors in the world and the balance Rs 50 crore through Preferential
allotment to the Promoter and Promoter group. Consequent to the above allotments, the
Paid-up Share Capital of the Company has increased from 32,18,69,895 Equity Shares of Rs 1
each to 39,94,67,302 Equity Shares of Rs 1 each. Allotment of 77,72,020 Convertible
Warrants (Warrants convertible into Equity Shares of the Company) at a price of Rs 193
each was also approved by the Capital Issue Committee. 25% consideration of the above
allotments were received by the Company during Q1 of the current financial year. Balance
75% is expected within 18 months.
The Government of India's ambitious plan to increase the share of
environment-friendly rail transport in overall freight movement and reduce the industry's
logistics costs has created long-term opportunities for your Company. In 2022, your
Company secured its single largest wagon order for 20067 wagons valued at ~Rs 645354
lakhs. However, following the decision not to deliver the 2nd tranche (resulting in a one-
time provision of Rs 3800 lakhs during Q1FYRs 24 based on a Recovery Notice from IR) the
order was revised to 16722 wagons valued at ~Rs 538527 lakhs. Additionally, in December
2023, your Company further received an order of 3400 wagons valued at Rs 116484 lakhs.
Your Company anticipates government's focus on modernization of railway
infrastructure and the announcement of three major economic railway corridor programs with
a strategic focus on increasing freight movement and connectivity on rail, will increase
the demand for wagons providing long-term growth visibility. The expansion of the global
wagon market will lead to a rise in exports as well, which your Company is fully prepared
to capitalize.
The Steel Foundry unit of your Company continues to perform well,
operating full capacity across both the facilities at Belgharia and Urla. The unit has
shown strong performance in both domestic and export markets. With a total foundry
capacity of 48000 MT, your Company holds the largest Indian Railway casting foundry
capacity in India and is also one of the largest exporter of railway castings in India.
A new SBU is formed to address to Railway component business keeping
our vision to supply both domestic and global markets. The component business is gaining
momentum now, supplying bogies, and parts of passenger rolling stock and metro rail to
many global customers. The Division has now planned to enter into long-term contracts with
domestic and international customers for the supply of bogie frames, under frames, fuel
tanks and other rolling stock components, positioning itself as a global sourcing partner
for many multinational corporations.
To safeguard its core manufacturing business from the volatility and
substantial working capital requirements of EPC business, the Company had announced
demerger of its Infra - Rail & Green Energy Division (w.e.f. 1st April 2024), with
completion expected on receipt of all regulatory clearances. The Company has ceased taking
long-term contracts for this division and is nearing the finishing of its existing
contracts, primarily, with Bangladesh Railways, Bengaluru Metro and Mumbai Metro. Moving
forward, the Company plans to focus on short-cycle projects rather than traditional
railway EPC projects with extended execution cycle. One such significant opportunity lies
in the deployment of the anti-collision system (KAVACH) that Indian Railways plans to
deploy on its network.
The Infra-electrical division continues to diversify its business and
is focusing on specialized solutions. This Division has experienced strong order in recent
years, with its order book growing ~4 times over FYRs 23. This is expected to lead to
robust revenue growth, moving forward. This division offers a comprehensive package in the
field of design, supply, construction and installation for railway electrification as well
as the installation of transformers and substations. The division is also poised to
execute projects outside of the rail segment.
Additionally, the Company's credit rating has been upgraded from 'CARE
BBB+' to 'CARE A-' by CARE Ratings.
TALENT MANAGEMENT
Talent Management is a very important element in our journey of
transformation from good to great. In your Company, Human Relations group has reaffirmed
focus on building Human Capital by various steps including training of employees,
addressing their needs, empowerment and fostering a harmonious workplace culture. The key
task is on maintaining positive work environment, retention of employees and encouraging
productivity.
As a Company, we have implemented a talent management strategy designed
to achieve optimal results. This ongoing process involves attracting and retaining
high-quality employees, developing their skills, and continuously motivating them to
improve their performance as human resources are the most important asset of the
organization. We are also a learning organization which is created by relentless knowledge
management and examples on past mistakes.
Your Company also aims at achieving a Performance driven culture that
has well-defined measures and demonstrated values for achieving the Company's business
results and overall success. With a commitment towards building a Performing Organization,
your Company thrives upon clear objective settings with measurable goals, and targets for
improved performance. In the said approach, employees are recognized and rewarded for
their performance in intrinsic or extrinsic ways. Employee retention is the organizational
goal of keeping productive and talented associates and reducing turnover by fostering a
positive work atmosphere to promote engagement. This includes showing appreciation to
employees, providing competitive pay and benefits, and encouraging a healthy work-life
balance. We promote diversity, with equitable representation of an equitable ratio of men
and women. The human resources strategy endeavours on succession planning to pass
leadership roles down to next level employees.
SIGNIFICANT FINANCIAL RATIOS
As required under the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), the
significant financial ratios are given below:
Particulars |
|
2023-24 |
2022-23 |
2021-22 |
Net Profit Margin * |
% |
3.22 |
0.88 |
1.13 |
Operating Profit Margin * |
% |
5.77 |
3.51 |
4.95 |
Debtors Turnover ** |
Times |
4.20 |
3.31 |
2.75 |
Inventory Turnover |
Times |
5.00 |
4.33 |
4.84 |
Debt Equity Ratio *** |
Times |
0.25 |
0.73 |
0.54 |
Current Ratio * |
Times |
2.63 |
1.59 |
1.83 |
Interest Coverage Ratio ** |
Times |
2.43 |
1.30 |
1.48 |
Return on Net Worth ** |
% |
4.56 |
1.49 |
1.38 |
Increase in profit margin is due to higher volume & cost reduction
measures.
"" Improvement is due to better realisation from customers.
""" Improvement is due to repayment of debt through
raising of equity.
' Improvement is due to reduction in borrowings & increase of
liquid assets.
" Improvement due to higherprofits.
SIGNIFICANT DEVELOPMENT
Qualified Institutions Placement
During the year, pursuant to the approval from members of the Company
by way of Postal Ballot, your Company raised capital of approx. Rs 1000 crore through
Qualified Institutions Placement (QIP) by issuing 5,80,90,000 Equity Shares and
1,61,29,032 Equity Shares, having face value of Rs 1 each, at a price of Rs 129.11 per
Equity Share (including a premium of Rs 128.11) and Rs 155 per Equity Share (including a
premium of Rs 154) respectively to Qualified Institutional Buyers.
The QIP was oversubscribed by more than two times demonstrating strong
interest from foreign investors, domestic institutional investors and funds. The
overwhelming response from Qualified I nstitutional Buyers stands testament of their
unwavering faith in Company's vision and potential. The funds received pursuant to QIP is
being utilised in retiring high cost debt, funding for capital expenditure, working
capital and general corporate purpose.
Preferential Allotment
During the year, pursuant to the approval from Members of the Company
by way of Postal Ballot, your Company has allotted 27,02,700 & 6,75,675 Equity Shares
of face value of Rs 1 each at a price of Rs 145 each to Adventz Finance Private Limited
and Mr Saroj Kumar Poddar (as an individual) respectively by way of preferential issue
aggregating to approx. Rs 50 crore.
Consequent to aforesaid allotment of Equity Shares by way of QIP and
Preferential issue, the paid-up share capital of the Company has increased from
32,18,69,895 equity shares of face value of Rs 1 each as at 31st March 2023 to
39,94,67,302 equity shares of face value of Rs 1 each as at 31st March 2024.
Raising of funds by issuance of Convertible Warrants
During the year, the Board of Directors of the Company has approved
preferential issue of upto 83,40,000 Convertible Warrants, each carrying a right to
subscribe to 1 fully paid-up equity share of the Company of face value of Rs 1 each, to
Messrs Samena Green Limited and Adventz Finance Private Limited, aggregating and not
exceeding Rs 150 crore. The same was approved by the Members of the Company by way of
Postal Ballot. In terms of the approval and upon receipt of 25% of consideration, on 12th
April 2024, your Company has allotted 77,72,020 Convertible Warrants i.e 38,86,010
Convertible Warrants each to Samena Green Ltd & Adventz Finance Pvt Ltd, by way of
preferential issue at a price of Rs 193 per warrant. The remaining 75% of the
consideration will be paid at the time of conversion of warrants into equity shares
anytime within eighteen months from the date of allotment.
FREIGHT CAR DIVISION
Your Company is pleased to inform you that, as of 1st April 2024,
Freight Car Division holds an order book of Rs 544967 lakhs. During the FYRs 24, your
Company successfully delivered a total of 7028 wagons, including 4,969 units for Indian
Railways (IR) and 2,059 units for private sector/export clients. The aggregate value of
these deliveries was approximately Rs 253408 lakhs, with Rs 168855 lakhs attributable to
IR and Rs 84552 lakhs to private/export clients. Steel Foundry have delivered more than
12000 bogies and couplers to facilitate the highest ever wagon builds in a year by your
Company. The turnover for the division amounts to ' 274999 lakhs.
In the Interim Budget for FYRs 25, an allocation of Rs 255 billion has
been made to Indian Railways. The Railways continue to emphasize increasing their freight
market share to 45% and have introduced the "Mission 3000 MT" plan, targeting
implementation by FYRs 30. This initiative includes enhancing wagon designs and inviting
manufacturers to contribute innovative designs that improve wagon capacity and longevity.
Moreover, there is a focus on integrating the latest technologies for maintenance within
Railway Workshops. Your Company is actively collaborating with several international
companies in the railway sector to meet these evolving requirements.
Furthermore, your Company has entered into a 51:49 Joint Venture
Agreement with M/s NYMWAG CS a.s. - AZC Group, a prominent European conglomerate known for
its manufacturing of wagons and wagon components. Initially, the joint venture will focus
on producing wagons and components for the domestic market, with plans to expand into
European markets, thereby establishing a significant presence in these high-demand
markets.
Your Company has successfully completed the first and third tranches of
a substantial order of BCNA & BOBRN wagons from Indian Railways. Additionally, the
Company has been awarded a new contract for 3,400 BOXNS wagons and option clause quantity
of 519 BOBRN wagons. The prototype for this new order is currently under development, with
series production scheduled to begin thereafter.
In addition, your Company has exported 25 tank wagons to Cameroon and
50 gondola wagons to Liberia. These exports are part of repeat orders totalling 300 wagons
received from Arceler Mittal, following the earlier supplies of 100 wagons, which had been
commended for their quality.
New Business:
As a part of its forward-looking vision, your Steel Foundry has
initiated the upgradation of its current Railway Crossing business to complete Railway
Turnout System.
In this context, we are happy to inform that your Foundry has signed a
technical collaboration with Sampyo Rail, South Korea, the leading designer, manufacturer,
and supplier of Railway Turnouts in South Korea.
The Texmaco - Sampyo association is poised to become a significant
Company in the sector, which is presently dominated by only a limited number of suppliers.
Furthermore, your Foundry has successfully shipped the first
consignment of GET castings meant for mining machinery to new export customer Bradken,
Australia.
Your Company is planning to expand steel foundry at Paradeep, Odisha to
meet the domestic and export requirements of steel castings to cater both the mining and
railway segments. This will also focus on crafting mining components and enable the
Company to diversify its product mix.
New Initiatives
In line with your Company's commitment towards environment and societal
responsibility, your Company have initiated many ESG initiatives.
As a major step toward adopting clean energy, your Steel Foundry have
signed a groundbreaking equity partnership with Ampin Energy Transition Pvt. Ltd. to
establish a 10 MW open access group captive solar power project in Chhattisgarh. This
project will enable the Urla unit in reduction of cost of electricity by ~Rs 2.32 per unit
of electricity and predominantly reducing carbon footprints. This signifies a momentous
step in your Company's ongoing commitment to sustainable energy practices.
INFRA RAIL & GREEN ENERGY
During the year FYRs 24, we have adopted a more focused and cautious
approach on the government's core growth areas of Rail Infrastructure and Green Energy.
The Company reclassified its Rail EPC Division establishing the Rail EPC Kalindee Division
and HME/BSD Division under a new nomenclated division 'Infra - Rail & Green Energy.
This reclassification will enable the division to contribute effectively to these key
segments, particularly following the demerger of the division into a separate Company as
approved by the Board.
During the year, Kalindee unit reported a gross revenue of Rs 44703
lakhs, compared to Rs 54028 lakhs during previous year. We have maintained a focus on
efficiently executing contracts currently in hand and making concerted efforts towards the
commercial closure of ongoing projects. We are submitting bids selectively in areas of our
strengths namely in S&T (Signaling & Telecommunications) and Ballast-less track
work contracts, with shorter execution cycle.
The unit is pleased to be a key contractor for laying ballast less
track in East West Metro Corridor Project, Kolkata. This project will connect Howrah &
Sealdah Railway Stations and which would pass through under the bed of Hooghly River
through a tunnel 32 meters below water level. The work under Hooghly River has already
been completed and commercial services between Howrah Maidan and Esplanade have commenced.
The remaining work on the final stretch between Esplanade to Sealdah is ongoing and is
expected to be completed during the year. The Kolkata Metro Rail Corporation (KMRC) plans
to inaugurate full run of E-W Metro's entire 16Km corridor by December 2024.
The outstanding order book as on 1st April 2024 is ' 69392 lakhs.
The HME/ BSD unit has achieved a turnover of Rs 8738 lakhs during FYRs
24.
The unit has completed all long pending contract of HME and BSD except
the largest Subansiri Project of HME and Mizoram Bridge Project of BSD. The progress on
2000 MW Subansiri project which was held up for long due to local issues, site floods etc.
have now substantially been completed to the extent of 90% and it is expected that by
March/AprilRs 25 this project would be commissioned in entirety. Mizoram Bridge Project is
98% completed and a portion of the railway line from Bhairabi in Assam to Hartoki in
Mizoram is commissioned. It is expected that the entire project would be commissioned by
DecemberRs 24. Farakka Barrage Gate rehabilitation work is completed, and a small new site
work has been awarded by the authority in 2023 and the same is under execution.
The outstanding order book as on 1st April 2024 is ' 7381lakhs.
INFRA-ELECTRICAL
During the FYRs 24, the division successfully advanced its
diversification plans into Transmission and Distribution by securing orders from state
utilities of Maharashtra and Madhya Pradesh. They are strengthening their position from
maintenance to construction in electricals in railways.
During the year, your Company have secured orders in 2 x 25 UV traction
both for Overhead Electrification (OHE) and Substations. Part of the order was completed
and commissioned within the same financial year.
Your Company is well positioned and prepared to pursue more orders in 2
x 25 traction, particularly for new lines being constructed by railways and other Special
Purpose Vehicles (SPVs) of railways.
The outstanding order book as on 1st April 2024 is Rs 113205 lakhs.
SUBSIDIARIES / ASSOCIATE / JOINT VENTURES
The subsidiaries / associate / joint ventures continue to contribute to
the growth in revenue and overall performance ofyour Company.
A Report on the performance and financial position of each of the
subsidiaries, associate and joint ventures as included in the Consolidated Financial
Statement of the Company is provided in Form AOC-1 and forms a part of this Annual Report.
The Consolidated Financial Statements of the Company, its subsidiaries,
associate and joint ventures prepared in accordance with the Act, and applicable Indian
Accounting Standards and the Auditors' Report thereon forms a part of this Annual Report.
Following subsidiaries / associate companies were formed to identify
emerging opportunities in the field of Rail, heavy industry and defence business and are
working on determining suitable opportunities to commence its field operations.
i. Belur Engineering Private Limited
ii. Texmaco Transtrak Private Limited
iii. Texmaco Rail Electrification Limited
iv. Panihati Engineering Udyog Private Limited
v. Texmaco Rail Systems Private Limited
vi. Belgharia Engineering Udyog Private Limited
vii. Texmaco Defence Systems Private limited
JOINT VENTURES
i. Touax Texmaco Railcar Leasing Private Limited
In FYRs 23, the JV Company has reported a fleet strength of 17 rakes
and confirmed orders for 10 new rakes. We are pleased to report that that all the 10 rakes
were manufactured and delivered during the year. Consequently, we now have fleet of 27
rakes, all successfully leased out for periods ranging from 10 to 14 years.
The JV Company currently has enquiries for approximately 50 rakes, from
TMIL, JSW, Orient Cement, Birlacorp Cement and other customers. These inquiries cover a
ranges of wagon types, including those for steel coils, both existing and an advance
version, standard cement wagons and also its variations.
Additionally, we are leveraging our in-house wagon design capabilities
to develop a new design of wagons for carrying autocars. The other initiatives are
introduction of Aluminium wagons, improved version of cement carrying cars etc.
With all these developments and with a steadily growing market for
private wagons we see great potential in future for our JV.
The revenue from operation of the JV is ' 5960 lakhs.
ii. Wabtec Texmaco Rail Private Limited
The JV Company completed yet another very successful FY' 24. Total
income during FYRs 24 improved by 29% to Rs 9937 lakhs compared to Rs 7708 lakhs achieved
during FY' 23. Profit before tax surged by 23% to Rs 1839 lakhs from Rs 1491 lakhs earned
during FY' 23.
With a significant increase in wagon production volumes in the country,
the JV Company has achieved its highest ever volume of draft gears to its customers, while
maintaining quality and on-time delivery. At the same time, a similar trend has been
observed in the sales of non-metallic friction wedges to Indian Railways and private
customers. Additionally, the JV Company has significantly increased the export of
receivers to Wabtec, Mexico due to a substantive surge in the demand and the mandate by
AAR for fitment of receivers on all wagons by 2025.
The JV Company is at an advanced stage in introducing the 4-Port
automated Brake Pressure monitoring system and the Brake System Health Monitor to Indian
Railways, supported by effective product demonstration. In addition to the same,
additional freight wagon products suitable for Indian wagons are in various stages of
planning for introduction in India. The
JV Company has also established a complete facility and utilities for
the manufacture and supply of Air Brake Equipment including C3W type Distributor Valves
and is in the process of obtaining an approval from RDSO to commence commercial supply.
The substantial volume of wagon procurement anticipated over the next
few years, aligned with the 3000 MT freight throughput mission of the Hon'ble Minister, is
expected to drive significant growth for the JV Company. This growth will be supported by
the diverse range of its current and upcoming wagon products.
The outstanding order book as on 1st April 2024 is Rs 6000 lakhs.
R & D ACTIVITIES A. Rolling Stock Unit
Our Design Centre is fully equipped to develop next- generation freight
cars tailored for both domestic and international markets, meeting national and
international standards. The Centre collaborates extensively with stakeholders including
Indian Railways, private operators, and vendors to deliver innovative solutions for
enhanced wagon efficiency. In addition to developing wagons, the Centre is also engaged in
developing various components through partnerships with leading industry players.
This year, we successfully exported a tank wagon for petroleum products
to Cameroon. This wagon was indigenously designed to conform to UIC standards, features a
Texmaco ride control bogie developed internally.
We have also designed and manufactured a 30-tonne axle Rotary Dump
Gondola Ore Car for Liberia, adhering to AAR standards. The gondola has performed
admirably and received a certificate of appreciation from the client for its quality and
performance. Following this, the client has placed a follow-up order, and this year we
have modified the design to include a specialized drainage system. This includes newly
designed bottom and side drain plugs with polyurethane (PU) sheets, aligning with
international best practices. Additionally, we have introduced a double-stacking concept
for shipping gondola wagons, significantly reducing transportation costs.
We are also working in close partnership with industry experts to
develop a Taller Autocar wagon. This innovative solution will accommodate a diverse range
of vehicles, including SUVs, two-wheelers, three-wheelers, and farm equipment such as
tractors. The design is currently under review by the Research, Design and Standards
Organisation (RDSO).
Your Company has also entered into a Memorandum of Understanding (MoU)
with Hindalco for the development of aluminium-bodied freight cars. This collaboration
aims to create a lightweight freight car by optimizing design and implementing best
practices in aluminium fabrication. There are many more activities are on the anvil,
including formation of a state of the art design & development centre.
B. Steel Foundry Unit
The Company's R&D Centre, officially recognized by the Department
of Scientific and Industrial Research (DSIR), Government of India, plays a pivotal role in
advancing research and innovation for product and process development. The Centre's
ongoing efforts have led to the successful introduction of a new melting process,
innovations that extend the lifespan of existing products and the design of optimally
weighted and efficient models that enhance the speed and efficiency of transporting goods
and specialized cargos.
Aligned with the Company's vision to set new industry standards,
improve measurement accuracy, and drive digitization, a state-of-the-art scanner is being
integrated into the facility's advanced instruments. This cutting-edge addition is
expected to significantly enhance precision across various applications, further
strengthening the R&D Centre's position at the forefront of technological
advancements. By embracing this technology, the Centre is not only enhancing its
capabilities but also ensuring it remains a leader in innovation and quality within the
industry.
Our metallurgical laboratory, which has achieved ISO/IEC 17025:2017
certification from the National Accreditation Board for Testing and Calibration
Laboratories (NABL). This certification highlights the laboratory's commitment to quality
and accuracy in testing and calibration. Plans are underway to expand the laboratory's
scope of accreditation, encompassing metallography and wet chemical analysis.
The R&D Centre's commitment to innovation and quality positions the
Company as an industry leader, consistently working to improve and adapt to the evolving
demands of the market. Through its state-of-the-art facilities and a focus on excellence,
the Company is well-equipped to address the future challenges and deliver superior
products and services to its customers.
a) New Product Development:
(1) The unit has successfully developed eleven new types of mining
products specifically for the Australian market. These products are highly valued for
their precision in dimension and geometry, meeting the stringend standards required in the
industry. The introduction of these innovative products has significantly expanded
business opportunities and strengthened customer confidence.
(2) A new side frame design (F-1574) has been developed specifically
for the North American market. Following its successful development, the first production
lot has been cast and dispatched to the customer. This milestone represents a significant
achievement in addressing the region's unique requirements and demonstrates the Company's
commitment to delivering tailored solutions.
(3) Three types of couplers with modified designs are currently under
development. Once these designs are finalized and approved, they are expected to open up
new business opportunities in the North American market.
(4) The weldable crossing has been approved by the Indian Railway
R&D sector (RDSO), and the first pilot lot has been dispatched. This approval
represents a significant business milestone for your Company.
(5) High tensile knuckles are currently being developed with an
enhanced process design utilizing advanced technology. The castings have been produced and
sent to North America for testing by the Association of American Railroads (AAR).
Successful testing is anticipated, potentially unlocking significant business
opportunities in the North American market.
b) Innovation in Method Design
Following components have been modified in their method design,
resulting in significant improvements in durability and quality. These enhancements have
not only improved product performance but have also led to substantial cost savings,
demonstrating the effectiveness of the updated design approach.
1. The method design for high-speed bolsters for Indian Railways has
been upgraded by integrating innovative ideas and leveraging the design expertise and
experience from the well-established method used for export bolsters. This redesign has
resolved several quality issues, improved component rigidity, and reduced weight.
2. The R&D division innovated the method design for export and
domestic side frames by employing a new generation approach using centre pouring. This
concept not only significantly reduces costs by increasing yield and decreasing finishing
volume but also enhances overall quality, leading to improved performance and efficiency
in production.
3. Productivity has been significantly enhanced by implementing a
double-decker pattern for small products like followers and pivots. The introduction of a
unit core concept in the yoke has improved control over thickness and dimensions, leading
to overall efficiency and quality.
c) Innovation in Process development
1. The induction melting process, introduced in 2024, has been
validated for various products and received customers approved. This advancement is
expected to increase capacity by approximately 25% while reducing electrical power
consumption per metric ton.
2. The R&D division is installing a sand reclaimer, which will
reduce the need for fresh sand and provide significant cost benefits by recycling and
reusing sand efficiently.
IT SERVICES
IT department of your Company continues to invest in Information
Technology & Digital Solutions while ensuring the security of our existing IT Assets.
We remain committed to our digital transformation journey with a focus
on upgradation of our ERP Platform.
We actively monitor the availability, traffic, packet loss, performance
metrics and response time of various devices including servers, routers, switches, and
virtual machines. This comprehensive monitoring ensures the optimization of our IT
processes for stability and sustainability.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to community service and human welfare. With
this view, the Company has actively engaged in social upliftment of the neighbouring
residents through various CSR drives in the fields of Education, Health, Environment and
Women Empowerment.
To make a significant difference in the society and improve the overall
quality of life, the Texmaco Neighbourhood Welfare Society, the philanthropic arm of the
Company, operates a Health and Wellness Hub at the Texmaco Estate premises. This facility
offers services such as Physiotherapy, Yoga, Gym and Alternative Medicine. The mission
behind this initiative is to alleviate pain, restore health and build physical fitness,
with the aid of skilled and experienced professionals. The Health Hub is well-equipped
with the technologically advanced equipment, supported by a modern Gym. The Yoga Centre
enhances the appeal of the hub. The facility caters to patients from the neighbourhood
apart from the employees and their family members.
The Company remains committed to providing financial assistance for
Health and Education to the unprivileged community of the locality.
These efforts underscore the Company's dedication to corporate social
responsibility and enhance its reputation in the professional arena.
The Company has in place a policy on Corporate Social Responsibility.
During the year, there has been no change in the policy. The weblink for accessing such
policy is https://www.texmaco.in/wp-content/uploads/2023/01/ CSR POLICY TEXRAIL.pdf.
The Company has spent in excess of the prescribed threshold under the
Act on the CSR activities for FYRs 24.
The Annual Report on CSR activities is enclosed as Annexure A and
forms a part of this Report.
GREEN INITIATIVE
Your Company remains steadfast in its commitment to minimize its carbon
foot prints and continues to embrace a sustainability initiative with the aim of going
green and minimising the repercussion on the environment. Your Company had already adopted
the green initiative by dispatching the Annual Report, Notices, other communications,
etc., through e-mail to its Shareholders, whose e-mail address are registered with
relevant Depository Participants / RTA / Company. Shareholders are requested to support
this initiative by registering / updating their e-mail address for receiving Annual
Report, Notices, other communications, etc. through e-mail. The Ministry of Corporate
Affairs ('MCA') and the Securities and Exchange Board of India had issued relaxations from
sending printed copy of Annual Report, Notice of the Annual General Meeting ('AGM'), etc.
to the Shareholders for the AGM to be held in the year 2024.
With objective of supporting the Green Initiative and in view of the
above-mentioned relaxations, your Company is dispatching the Annual Report & Notice of
the AGM along with other documents required to be annexed thereto to the Shareholders
through e-mail at their registered e-mail address. Such documents are also available on
the website of the Company atwww.texmaco.in
Further, those Shareholders who have not yet registered their e-mail
address are requested to follow the procedure as mentioned in the Note to the Notice
calling AGM to receive the Annual Report & the Notice of the AGM and other documents
relating thereto through electronic mode and to enable their participation in the AGM.
PARTICULARS OF EMPLOYEES
The number of employees as at 31st March 2024 was 2121. In terms of the
provisions of Section 197(12) of the Act, read with Rules 5(2) & 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing
the names and other particulars of the employees drawing remuneration in excess of the
limits set out in the said rules is enclosed as Annexure B and forms part of this
Report.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure C and
forms part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Disclosures relating to Conservation of Energy, Technology Absorption,
Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of the Act, read
with Rule 8 of the Companies (Accounts) Rules, 2014, are enclosed as Annexure D and
forms a part of this Report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Meetings of the Board
During the year under review, 9 (Nine) Board Meetings were held on the
following dates:
27th April 2023 . 12th May 2023
17th July 2023
3rd August 2023
15th September 2023
14th October 2023
16th December 2023
1st February 2024
27th February 2024
Criteria for Appointment of Directors and Remuneration Policy
The Nomination and Remuneration Committee has approved the criteria to
determine the appropriate characteristics, skills and experience for the Board as a whole
and its individual members with the objective of having a Board of eminent qualified
professionals, entrepreneurs with diverse backgrounds and experience in business,
governance, education and public service. The criteria include the matrix of skills /
expertise / competencies as specified by the Board for identifying individuals to serve as
a Director on the Board.
Your Company has in place a well-defined Remuneration Policy for
Directors, Key Managerial Personnel and other employees of the Company. The Nomination and
Remuneration Committee periodically reviews the policy to ensure that it is aligned with
the requirements under the applicable laws. During the year, there has been no change in
the policy.
The policy ensures equity, fairness and consistency in rewarding the
employees on the basis of performance against set of objectives. The policy is available
on the Company's website. The weblink for accessing such policy is:
https://www.texmaco.in/wp-content/uploads/2023/ 01/REMUNERATION POLICY TexRail.pdf
Change in Directors and Key Managerial Personnel
Re-appointments:
During the year, the re-appointment of Mr D. H. Kela as Executive
Director of the Company was approved at the AGM of the Company held on 25th September
2023.
The Board of Directors on the recommendation of Nomination and
Remuneration Committee had approved the re-appointments of Mr Utsav Parekh w.e.f 4th
September 2023, Mr Virendra Sinha and Ms Rusha Mitra w.e.f 17th February 2024 as
Independent Directors of the Company. The aforesaid re-appointments were approved by the
shareholders by way of Postal Ballot.
Appointments and Re-designation:
The Board of Directors on the recommendation of the Nomination and
Remuneration Committee, has approved the appointment of Mr Sudipta Mukherjee as an
Executive Director and designated as Deputy Managing Director w.e.f. 1st June 2023.
Further the Board at its meeting held on 16th December 2023 had re-designated Mr. Sudipta
Mukherjee as Managing Director w.e.f 1st January 2024.
The Board on the recommendation of the Nomination and Remuneration
Committee, has approved the appointment of Mr U V Kamath as an Executive Director w.e.f.
1st February 2024. The aforesaid appointments and re-designation were approved by the
Shareholders by way of Postal Ballot.
During the year, Mr Hemant Bhuwania was appointed as the Chief
Financial Officer ('CFO') of the Company w.e.f. 1st April 2023 in place of Mr A. K. Vijay,
Executive Director & CFO, who had tendered his resignation from the position of CFO
w.e.f. 1st April 2023 and accordingly, Mr Vijay continues to act as Executive Director of
the Company. Further, Mr K. K. Rajgaria was appointed as Company Secretary &
Compliance Officer of the Company w.e.f. 30th April 2023.
Resignation:
During the year, Mr D. H. Kela has resigned as Executive Director of
the Company w.e.f. 1st February 2024.
Retire by rotation:
Mr Akshay Poddar, Non-Executive Director and Mr A.K. Vijay, Executive
Director retire by rotation and being eligible, have offered themselves for re-appointment
at the ensuing AGM of the Company.
Proposed Appointment:
The Board of Directors on the recommendation of Nomination and
Remuneration Committee, has approved the appointment of Mr Hemant Bangur as an Independent
Director for a period of 3 (three) years w.e.f 16th May 2024 subject to approval of
shareholders. The aforesaid appointment is being placed for the approval of the
shareholders by way of Postal Ballot.
Board Evaluation
Your Company has in place a Policy for performance evaluation of the
Board, Committees of the Board and individual Directors, by fixing certain criteria, duly
approved by the Nomination and Remuneration Committee and adopted by the Board. The
criteria for the evaluation includes their functioning as Members of the Board or
Committees of the Board, execution and performance of specific duties, etc.
A structured questionnaire, which cover various aspects of the Board
functioning such as Director's strength and contribution, specific duties, obligations,
etc. evolved through discussions within the Board, has been used for this purpose.
Further, on the basis of performance review by Independent Directors at their meeting held
on 21st March
2024 and recommendations of the Nomination and Remuneration Committee,
a process of evaluation was followed by the Board for its own performance and that of its
Committees and individual Directors. Furthermore, the evaluation of the Independent
Directors was performed by the Board. The evaluation criteria comprised assessing the
various parameters including oversight and effectiveness of the Board, performance of the
Directors, expertise /skills / competencies as possessed by the Directors in the context
of the business of your Company, contribution to the strategic planning, etc.
Further, the Board ensured that the evaluation of Directors was carried
out without the participation of the Director who was subject to evaluation.
Declaration by Independent Directors
All Independent Directors of your Company have given the declaration
that they meet the criteria of independence as laid down under the Act and Listing
Regulations.
The Board of Directors of your Company took on record the declaration
submitted by the Independent Directors after undertaking due assessment of their
independence from the Management. The Independent Directors of your Company have also
confirmed their registration with the Independent Directors' databank maintained by the
Indian Institute of Corporate Affairs. The Independent Directors will undertake the
proficiency test, as may be required, under the Companies (Appointment and Qualification
of Directors) Rules, 2014.
The Board is of the opinion that all the Independent Directors possess
the requisite integrity, expertise and experience (including proficiency) to fulfil their
duties to act as such.
AUDIT COMMITTEE AND AUDITORS
Composition of Audit Committee
The composition of the Audit Committee is provided in the Report on
Corporate Governance as attached to this Report.
Statutory Auditors
At the 24th AGM held in the year 2022, Messrs L. B. Jha & Co.,
Chartered Accountants, Statutory Auditors of the Company, were appointed by the
Shareholders to hold the office as such from the conclusion of 24th AGM until the
conclusion of 29th AGM of the Company.
Cost Auditors
Your Company has appointed Messrs DGM & Associates, Cost
Accountants, for conducting the Cost Audit for FYRs 24 in terms of the provisions of the
Act and the Companies (Cost Records and Audit) Rules, 2014.
The Board on the recommendation of the Audit Committee, at its Meeting
held on 16th May 2024 has approved the re-appointment of Messrs DGM & Associates, Cost
Accountants (Firm Registration No. 000038), as the Cost Auditors to conduct the Audit of
the Cost Records of the Company for the FYRs 25 at a remuneration of Rs 2,50,000 (Rupees
Two Lakh Fifty Thousand) plus applicable taxes. The proposal for the ratification of the
remuneration payable to Messrs DGM & Associates is being placed at the ensuing AGM for
the approval of Shareholders.
In terms of the provisions of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost
records and accordingly, such accounts and records are made and maintained.
Secretarial Auditor
Your Company has appointed Messrs S. R. & Associates, Practicing
Company Secretaries, to conduct the Secretarial Audit of the Company for FYRs 24 in terms
of the provisions of the Act & the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and the Listing Regulations.
The Secretarial Audit Report in Form MR-3 is enclosed as Annexure E and
forms a part of this Report.
Whistle-Blower Policy
The details on the Whistle Blower Policy are provided in the Report on
Corporate Governance as attached to this Report.
INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT
The Company maintains a robust system of internal controls, that is
appropriate for the nature and scale of its operations. The designated system ensures that
all transactions are authorised, recorded and reported correctly and assets are
safeguarded and protected against loss from unauthorised use or disposition. In addition,
there are operational and fraud risk controls, covering the entire spectrum of internal
financial controls, aligned with the size and the nature of the Company's operations.
The Audit Committee periodically reviews the internal control system to
ensure that it remains effective and aligned with the business requirements of your
Company.
The Company's Risk Management objectives include monitoring and
reviewing its Risk Management Plan, which involves identifying and addressing various
elements of risk. The Company has established a Risk Management Policy and a comprehensive
framework to mitigate potential losses from systematic issues. This Policy encompasses
processes for risk assessment, identification of both internal and external risks,
including cyber security risks, and outlines detailed procedures for risk evaluation and
mitigation. The Risk Management Committee periodically reviews the Policy to ensure its
effectiveness.
Your Company is having a Risk Management Committee ('RMC') duly
constituted by the Board of Directors of the Company. The composition of the RMC is
provided in the Report on Corporate Governance which forms a part of this Report.
DISCLOSURES
(a) There has been no change in the nature of business of the Company
during the year under review.
(b) There are no significant and material orders passed by the
Regulators / Courts / Tribunals that would impact the going concern status of the Company
and its future operations.
(c) There are no material changes and commitments affecting the
financial position of the Company which have occurred between the end of financial year
and the date of this Report.
(d) The Reports of the Auditors do not contain any qualification /
modification and hence no explanation is required.
(e) Demerger
During the year, the Board of Directors had approved Demerger of the
"Infra - Rail & Green Energy" division of the Company into "M/s
Belgharia Engineering Udyog Private Limited" and approved a Scheme of Arrangement
subject to necessary approvals including from the Securities and Exchange Board of India,
the shareholders and creditors of the Company and Hon'ble National Company Law Tribunal,
Kolkata Bench.
(f) Share Capital
During the year, the Board of Directors of the Company has approved the
issuance of Equity Shares by way of Preferential Issue to Messrs Adventz Finance Private
Limited & Mr Saroj Kumar Poddar (as an individual), for an amount not exceeding Rs 50
crore, which was approved by the Members of the Company by way of Postal Ballot. In terms
of the approval, your Company has allotted 27,02,700 & 6,75,675 Equity Shares of face
value of Rs 1 each at a price of Rs 145 each to Adventz Finance Private Limited and Mr
Saroj Kumar Poddar (as an individual) respectively by way of preferential issue.
Further, during the year, the Board of Directors of the Company has
approved the issuance of Equity Shares by way of Qualified Institutions Placement for an
amount not exceeding Rs 1000 crore, which was approved by the Members of the Company by
way of Postal Ballot. In terms of the approval, your Company has allotted 5,80,90,000
Equity Shares of face value of Rs 1 each at a price of Rs 129.11 per Equity Share &
1,61,29,032 Equity Shares of face value of Rs 1 each at a price of Rs 155 per Equity Share
to Qualified Institutional Buyers.
Consequent to aforesaid allotments, the paid-up share capital of the
Company has increased from 32,18,69,895 equity shares of face value of Rs 1 each as at
31st March 2023 to 39,94,67,302 equity shares of face value of Rs 1 each as at 31st March
2024.
Raising of funds by issuance of Convertible Warrants
During the year, the Board of Directors of the Company has approved
preferential issue of upto 83,40,000 Convertible Warrants, each carrying a right to
subscribe to 1 fully paid-up equity share of the Company of face value of Rs 1 each, to
Messrs Samena Green Limited and Adventz Finance Private Limited, aggregating and not
exceeding Rs 150 crore. The same was approved by the Members of the Company by way of
Postal Ballot. In terms of the approval and upon receipt of 25% of consideration, on 12th
April 2024, your Company has allotted 77,72,020 Convertible Warrants i.e 38,86,010
Convertible Warrants each to Samena Green Ltd & Adventz Finance Pvt Ltd, by way of
preferential issue at a price of Rs 193 per warrant. The remaining 75% of the
consideration will be paid at the time of conversion of warrants into equity shares
anytime within eighteen months from the date of allotment.
(g) Deposits
During the FYRs 24, the Company has not accepted any Deposit under the
provisions of the Act.
(h) Disclosures under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
Your Company has in place an Internal Complaints Committee ('ICC'),
formed in accordance with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder to
promote safe & healthy working environment and to redress complaints received
regarding sexual harassment. The ICC meets at regular intervals.
Further, your Company has a Policy on prevention of Sexual Harassment
in accordance with the said Act and Rules.
During the year, no complaint was received by the ICC.
(i) Disclosure with respect to compliance of Secretarial Standards
The Company has duly complied with the necessary requirements of the
Secretarial Standards relating to Board Meetings and General Meetings, as issued by the
Institute of Company Secretaries of India.
OTHER INFORMATION
Annual Return
The copy of the Annual Return in the prescribed format is available on
the website of the Company. The weblink for accessing Annual Return is:
https://www.texmaco.in/wp- content/uploads/2024/08/AR23-24.pdf
Dividend Distribution Policy
Your Company has in place a Dividend Distribution Policy in line with
the requirements of the Listing Regulations. During the year, there has been no change in
the policy.
The web link for accessing such policy is: https://
www.texmaco.in/wp-content/uploads/2023/01/ Dividend Distribution Policy.pdf
Corporate Governance
Report on Corporate Governance pursuant to the Listing Regulations is
enclosed as Annexure F and forms a part of this Report.
Business Responsibility & Sustainability Report
Business Responsibility & Sustainability Report pursuant to the
Listing Regulations is enclosed as Annexure G and forms a part of this Report.
Particulars of Loans, Guarantees and Investments
The details of Loans, Corporate Guarantees and Investments made during
the financial year under the provisions of Section 186 of the Act have been disclosed in
the financial statements of the Company.
Related Party Transactions
All related party transactions took place during the FYRs 24 were
entered in the ordinary course of business and on arm's length basis.
An omnibus approval from the Audit Committee for the financial year is
obtained for the transactions which are repetitive in nature. All related party
transactions are reported to and approved by the Audit Committee / Board. The details of
such transactions were also placed before the Audit Committee and the Board for their
review, on a quarterly basis. During the year, there was no material related party
transaction entered into by the Company and as such disclosure in Form AOC-2 is not
required.
The Company has in place a policy on dealing with related party
transactions and the same is disclosed on the Company's website. The web link for
accessing such policy is: https://www.texmaco.in/wp-content/uploads/ 2023/01/RPTP.pdf
DIRECTORS' RESPONSIBILITY STATEMENT U/S 134 (5) OF THE COMPANIES ACT,
2013
Your Directors state that:
(a) in the preparation of the Annual Financial Statements for the
financial year ended 31st March 2024, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
(b) relevant accounting policies are applied consistently and the
judgments and estimates made are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year and of the profit
and loss of the Company for that period;
(c) proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(d) the Annual Financial Statements of the Company have been prepared
on a going concern basis;
(e) they had laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and were operating
effectively; and
(f) they had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
|
For and on behalf of the Board |
Dated: 16th May, 2024 |
S. K. Poddar |
Place: Kolkata |
Chairman |